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Home My WebLink AboutOrdinance - 2013-O0040 - Electric Light And Power Bond - 04/11/2013Ordinance No. 2013-00040 DRAFT ORDINANCE relating to CITY OF LUBBOCK, TEXAS ELECTRIC LIGHT AND POWER SYSTEM REVENUE REFUNDING AND IMPROVEMENT BONDS SERIES 2013 Adopted: April 11, 2013 HOU:3299318.4 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS AND OTHER PRELIMINARY MATTERS Section1.01 Definitions...............................................................................................................2 Section1.02 Findings...................................................................................................................7 Section 1.03 Table of Contents, Titles and Headings...................................................................7 Section1.04 Interpretation............................................................................................................8 ARTICLE II SECURITY FOR THE BONDS Section 2.01 Pledge of Security....................................................................................................8 Section 2.02 Limited Obligations.................................................................................................8 Section 2.03 Security Interest.......................................................................................................8 ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE BONDS Section3.01 Authorization...........................................................................................................9 Section 3.02 Date, Denomination, Maturities and Interest...........................................................9 Section 3.03 Medium, Method and Place of Payment..................................................................9 Section 3.04 Execution and Registration of Bonds....................................................................10 Section3.05 Ownership..............................................................................................................11 Section 3.06 Registration, Transfer and Exchange..................................................................... I I Section3.07 Cancellation...........................................................................................................12 Section 3.08 Temporary Bonds..................................................................................................12 Section 3.09 Replacement Bonds...............................................................................................13 Section 3.10 Book -Entry Only System.......................................................................................14 Section 3.11 Successor Securities Depository; Transfer Outside Book -Entry Only System....................................................................................................................15 Section 3.12 Payments to Cede & Co.........................................................................................15 ARTICLE IV REDEMPTION OF BONDS BEFORE MATURITY Section 4.01 Limitation on Redemption.....................................................................................15 Section 4.02 Optional Redemption.............................................................................................15 Section 4.03 Mandatory Sinking Fund Redemption...................................................................16 Section 4.04 Partial Redemption................................................................................................16 Section 4.05 Notice of Redemption to Owners..........................................................................16 Section 4.06 Payment Upon Redemption...................................................................................17 Section 4.07 Effect of Redemption.............................................................................................17 Section4.08 Lapse of Payment..................................................................................................17 HOU:3299318.4 ARTICLE V PAYING AGENT/REGISTRAR Section 5.01 Appointment of Paying Agent/Registrar...............................................................18 Section 5.02 Qualifications.........................................................................................................18 Section 5.03 Maintaining Paying Agent/Registrar.....................................................................18 Section5.04 Termination............................................................................................................18 Section 5.05 Notice of Change to Owners..................................................................................18 Section 5.06 Agreement to Perform Duties and Functions........................................................18 Section 5.07 Delivery of Records to Successor..........................................................................19 ARTICLE VI FORM OF THE BONDS Section6.01 Form Generally......................................................................................................19 Section 6.02 CUSIP Registration...............................................................................................19 Section6.03 Legal Opinion........................................................................................................19 Section 6.04 Statement of Insurance..........................................................................................20 ARTICLE VII FUNDS AND ACCOUNTS Section 7.01 Segregation of Revenues/Fund Designations........................................................20 Section7.02 System Fund..........................................................................................................20 Section7.03 Bond Fund.............................................................................................................20 Section 7.04 Payment of Bonds..................................................................................................23 Section 7.05 Deficiencies in Funds............................................................................................23 Section 7.06 Security of Funds...................................................................................................23 ARTICLE V III SALE AND DELIVERY OF BONDS; DEPOSIT OF PROCEEDS Section 8.01 Sale of Bonds; Official Statement.........................................................................25 Section 8.02 Control and Delivery of Bonds..............................................................................26 Section 8.03 Deposit of Proceeds...............................................................................................27 ARTICLE IX PARTICULAR REPRESENTATIONS AND COVENANTS Section 9.01 Additional Bonds...................................................................................................27 Section 9.02 Rates and Charges..................................................................................................29 Section 9.03 Maintenance and Operation; Insurance.................................................................29 Section 9.04 Records, Accounts, Accounting Reports...............................................................29 Section 9.05 Further Covenants..................................................................................................30 Section 9.06 Other Representations and Covenants...................................................................31 Section 9.07 Federal Income Tax Exclusion..............................................................................31 Section 9.08 Disposition of Project............................................................................................34 ARTICLE X DEFAULT AND REMEDIES Section 10.01 Events of Default...................................................................................................34 Section 10.02 Remedies for Default.............................................................................................34 ii HOU:329931 S.d Section 10.03 Remedies Not Exclusive........................................................................................34 ARTICLE XI DISCHARGE Section11.01 Discharge...............................................................................................................35 ARTICLE XII CONTINUING DISCLOSURE UNDERTAKING Section 12.01 Annual Reports......................................................................................................35 Section 12.02 Event Notices.........................................................................................................36 Section 12.03 Identifying Information.........................................................................................37 Section 12.04 Limitations, Disclaimers and Amendments...........................................................37 ARTICLE XIII AMENDMENTS; ATTORNEY GENERAL MODIFICATION Section13.01 Amendments..........................................................................................................38 Section 13.02 Attorney General Modification..............................................................................38 ARTICLE XIV REDEMPTION OF REFUNDED OBLIGATIONS; APPROVAL OF ESCROW AGREEMENT; PURCHASE OF ESCROWED SECURITIES Section 14.01 Redemption of Refunded Obligations...................................................................39 Section 14.02 Escrow Securities...................................................................................................39 Section 14.03 Arrangements for Defeasance of Refunded Obligations.......................................39 Section 14.04 Notice of Redemption............................................................................................39 Section 14.05 Effect of Refunding All of the Refunded Obligation Candidates ..........................39 ARTICLE XV EFFECTIVE IMMEDIATELY Section 15.01 Effective Immediately........................................................................................... 40 Schedule I - Refunded Obligation Candidates.............................................................. Schedule I-1 Exhibit A - Description of Annual Disclosure of Financial Information .................................. A-1 Exhibit B - Sale Parameters........................................................................................................B-1 Exhibit C - Form of the Bonds...................................................................................................C-1 HOU:3299318.4 AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CITY OF LUBBOCK, TEXAS, ELECTRIC LIGHT AND POWER SYSTEM REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 2013; PROVIDING FOR THE AWARD OF THE SALE THEREOF IN ACCORDANCE WITH SPECIFIED PARAMETERS; APPROVING THE OFFICIAL STATEMENT; APPROVING EXECUTION OF A PURCHASE CONTRACT AND ESCROW AGREEMENT; AND ENACTING OTHER PROVISIONS RELATING THERETO WHEREAS, in accordance with the Constitution and laws of the State of Texas, specifically Chapter 1502, Texas Government Code, as amended ("Chapter 1502"), the City of Lubbock, Texas (the "City"), has previously issued its electric light and power system revenue bonds (such outstanding revenue bonds being the "Previously Issued Bonds"), payable from and secured by a first lien on and pledge of the net revenues of the City's Electric Light and Power System (the "System"); WHEREAS, in the ordinances authorizing the issuance of the Previously Issued Bonds the City reserved the right to issue, under certain conditions, additional bonds ("Additional Bonds") on a parity as to lien and right with the Previously Issued Bonds; WHEREAS, the conditions precedent to the issuance of Additional Bonds under the ordinances authorizing the issuance of the Previously Issued Bonds have occurred and are existing, and the City intends to issue pursuant to this Ordinance its revenue bonds as additional bonds on a parity with the Previously Issued Bonds; WHEREAS, the City Council of the City (the "City Council") hereby finds and determines that electric light and power system revenue bonds secured by a first lien on and pledge of the Net Revenues of the System on a parity with the Previously Issued Bonds should be issued for the purposes of acquiring, purchasing, constricting, improving, renovating, enlarging, and/or equipping property, buildings, strictures, facilities, and/or related infrastructure for the System (the "Project"); WHEREAS, Chapter 1207, Texas Government Code, as amended ("Chapter 1207"), authorizes the City to issue refunding bonds to refund all or a portion of the Previously Issued Bonds described on Schedule I attached hereto (collectively, the "Refunded Obligation Candidates"); WHEREAS, the City now desires to refund all or a portion of such Refunded Obligation Candidates (such refunded obligations to be hereinafter referred to as the "Refunded Obligations"); WHEREAS, Chapter 1207 further authorizes the City to deposit the proceeds from the sale of refunding bonds, together with any other available funds or resources, directly with the paying agent for any of the Refunded Obligations or a trust company or commercial bank, and such deposit, if made before such payment dates, shall constitute the making of firm banking and financial arrangements for the discharge and final payment of the Refunded Obligations; HOU:3299318.4 WHEREAS, Chapter 1207 further authorizes the City to enter into an escrow agreement with respect to the safekeeping, investment, reinvestment, administration and disposition of any such deposit; WHEREAS, the City Council hereby finds and determines that the refunding contemplated by this Ordinance will benefit the City by providing present value debt service savings in an amount or amounts to be certified in the Pricing Certificate(s) (hereinafter defined), and that such benefit is sufficient consideration for the issuance of refunding bonds, as provided by this Ordinance, and the refunding of the Refunded Obligations; WHEREAS, in the event that all of the Refunded Obligation Candidates are refunded in frill as contemplated by this Ordinance, there will no longer be any Previously Issued Bonds outstanding that are dated on or prior to July 1, 2001; WHEREAS, the City Council hereby finds and determines that electric light and power system revenue refunding bonds secured by a first lien on and pledge of the Net Revenues of the System on a parity with the Previously Issued Bonds should be issued for the purpose of refunding the Refunded Obligations; WHEREAS, the revenue bonds hereinafter authorized are to be issued and delivered pursuant to Chapter 1207 and Chapter 1502 and in accordance with the general laws of the State of Texas; WHEREAS, the City Council desires to delegate, pursuant to Chapter 1207 and Chapter 1371, Texas Government Code, as amended ("Chapter 1371"), and the parameters of this Ordinance, to the Authorized Officer, the authority to approve the principal amount, the interest rate, the number of series, the price and the other terms of the bonds authorized hereby and to otherwise take such actions as are necessary and appropriate to effect the sale of such bonds; WHEREAS, the meeting at which this Ordinance is considered is open to the public as required by law, and the public notice of the time, place and purpose of said meeting was given as required by Chapter 551, Texas Government Code, as amended; therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: ARTICLE I DEFINITIONS AND OTHER PRELIMINARY MATTERS Section 1.01 Definitions. Unless otherwise expressly provided or unless the context clearly requires otherwise in this Ordinance, the following terms shall have the meanings specified below: "Additional Bonds" means the additional parity obligations the City reserves the right to issue in accordance with the terms and conditions prescribed in Section 9.01 hereof. "Authorized Officer" means each of the City Manager and the Executive Director of Finance, acting individually. 2 HOU:3299318.4 "Average Annual Debt Service" means that amount which, at the time of computation, is derived by dividing the total amount of Debt Service to be paid over a period of years as the same is scheduled to become due and payable by the number of years taken into account in determining the total Debt Service. Capitalized interest payments provided from bond proceeds shall be excluded in making the aforementioned computation. "Bond" means any of the Bonds. "Bond Date" means the date designated as the initial date of the Bonds by Section 3.02(a) of this Ordinance. "Bond Purchase Contract" means any bond purchase contract approved in Section 8.01(b) of this Ordinance. "Bonds" means the City's bonds authorized to be issued by Section 3.01 of this Ordinance. "Bonds Similarly Secured" means the Previously Issued Bonds, the Bonds and Additional Bonds, if any. "Business Day" means any day other than a Saturday, Sunday or legal holiday or other day on which banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are required or authorized by law or executive order to close. "Chief Financial Officer" means the Chief Financial Officer of the City or such other City employee who has assumed the duties of the Chief Financial Officer. "City" means the City of Lubbock, Texas. "Closing Date" means the date of the initial delivery of and payment for the Bonds. "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, enacted on or before the Issue Date. "Computation Date" has the meaning stated in Section 1.148-1(b) of the Regulations. "Credit Facility" means any agreement of the City entered into with a financial institution in connection with and for the purpose of (i) enhancing or supporting the creditworthiness of (A) a series of Bonds Similarly Secured or (B) all of the Bonds Similarly Secured, (ii) providing a surety policy in order to fund all or a portion of the Required Reserve for the Bonds Similarly Secured, or (iii) providing liquidity with respect to a series of Bonds Similarly Secured which by their terms are subject to tender for purchase, and which, by its terms, creates a liability on the part of the City on a parity with the Bonds Similarly Secured; provided that, on the date any such credit facility is issued, any rating agency having an outstanding rating on the Bonds Similarly Secured would not lower the rating on the Bonds Similarly Secured as confirmed in writing by such rating agency. A determination by the City contained in the ordinance authorizing the issuance of Bonds Similarly Secured and/or authorizing the execution and delivery of a Credit HOU:3299318.4 Facility that such agreement constitutes a Credit Facility under this definition shall be conclusive as against all Owners. "Debt Service" means, as of any particular date of computation, with respect to any series of obligations and with respect to any period, the aggregate of the amounts to be paid or set aside by the City as of such date or in such period for the payment of the principal of, premium, if any, and interest (to the extent not capitalized) on such obligations; assuming in the case of obligations required to be redeemed or prepaid as to principal prior to maturity, the principal amounts thereof will be redeemed prior to maturity in accordance with the mandatory redemption provisions applicable thereto. "Designated Payment/Transfer Office" means the Designated Payment/Transfer Office, as designated in the Paying Agent/Registrar Agreement, or such other location designated by the Paying Agent/Registrar. "DTC" means The Depository Trust Company of New York, New York, or any successor securities depository. "DTC Participant" means brokers and dealers, banks, trust companies, clearing corporations and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. "EMMA" means the Electronic Municipal Market Access System. "Escrow Agent" means the place of payment for the Refunded Obligations or the trust company or commercial bank identified in the Escrow Agreement and its successors in such capacity. "Escrow Agreement" means an Escrow Agreement between the City and the Escrow Agent pertaining to the defeasance of the Refunded Obligations, as described in Section 14.03 of this Ordinance. "Escrow Fund" means the fund by that name established in the Escrow Agreement. "Escrow Securities" has the meaning assigned in the Escrow Agreement. "Event of Default" means any event of default as defined in Section 10.01 of this Ordinance. "Fiscal Year" means the twelve (12) month accounting period used by the City in connection with the operations of the System which may be any twelve (12) consecutive month period established by the City. "Fund" means any of the funds, accounts or a portion of a fund or account, confirmed and/or established pursuant to Article VII hereof. "Gross Proceeds" has the meaning stated in Section 1.148-1(b) of the Regulations. 4 HOU:3299318.4 "Initial Bond" means the initial bond or bonds authorized by Section 3.04 of this Ordinance. "Interest Payment Date" means the date or dates on which interest on the Bonds is scheduled to be paid until their respective dates of maturity or prior redemption, as set forth in the Pricing Certificate. "Investment" has the meaning stated in Section 1.148-1(b) of the Regulations. "Issue Date" for each series or sub -series of the Bonds or other obligations of the City is the respective date on which such series or sub -series of the Bonds or other obligations of the City is delivered against payment therefor. "MSRB" means the Municipal Securities Rulemaking Board. "Net Revenues" means the gross revenues of the System less expenses of operation and maintenance. Such expenses of operation and maintenance shall not include depreciation charges or amounts or Funds pledged for the Bonds Similarly Secured, but shall include all salaries, labor, materials, repairs, and extensions necessary to render services; provided, however, that in determining "Net Revenues," only such repairs and extensions as in the judgment of the City Council, reasonably and fairly exercised, are necessary to keep the System in operation and render adequate service to the City and inhabitants thereof, or such as might be necessary to meet some physical accident or condition which otherwise would impair the security of the Bonds Similarly Secured, shall be deducted. "Net Sale Proceeds" has the meaning stated in Section 1.148-1(b) of the Regulations. "New Money Purposes" has the meaning assigned in Section 3.01 of this Ordinance. "Nonpurpose Investment" has the meaning stated in Section 1.148-1(b) of the Regulations. "Outstanding" when used in this Ordinance with respect to Bonds Similarly Secured, means, as of the date of determination, all Bonds Similarly Secured theretofore sold, issued and delivered by the City, except: (1) those Bonds Similarly Secured cancelled or delivered to the transfer agent or registrar for cancellation in connection with the exchange or transfer of such obligations; (2) those Bonds Similarly Secured paid or deemed to be paid in accordance with the provisions of Section 11.01 of this Ordinance; and (3) those Bonds Similarly Secured that have been mutilated, destroyed, lost, or stolen and replacement bonds have been registered and delivered in lieu thereof. "Owner" means the person who is the registered owner of a Bond or Bonds, as shown in the Register. 5 HOU:3299318.4 "Paying Agent/Registrar" means the bank or trust company identified in the Paying Agent/Registrar Agreement referred to in Section 5.01 of this Ordinance, or any successor thereto as provided in this Ordinance. "Previously Issued Bonds" means the Outstanding and unpaid revenue bonds payable from and secured by a first lien on and pledge of the Net Revenues of the System, further identified as follows: (1) City of Lubbock, Texas, Electric Light and Power System Revenue Bonds, Series 2001, dated July 1, 2001, issued in the original principal amount of $9,200,000, currently outstanding in the aggregate principal amount of $4,140,000, and maturing on April 15 in each of the years 2013 through 2019, inclusive, and on April 15, 2021; and (2) City of Lubbock, Texas, Electric Light and Power System Revenue Bonds, Series 2010, dated October 15, 2010, issued in the original principal amount of $73,295,000, currently outstanding in the aggregate principal amount of $59,580,000, and maturing on April 15 in each of the years 2013 through 2020, inclusive. "Pricing Certificate" means a certificate or certificates signed by an Authorized Officer establishing the terms and features of each series of Bonds in accordance with Section 8.01 hereof. "Proceeds" has the meaning stated in Section 1.148-1(b) of the Regulations. "Project" has the meaning assigned in the recitals to this Ordinance. "Rebate Amount" has the meaning stated in Section 1.148-3 of the Regulations. "Record Date" means the date specified in the Pricing Certificate. "Refunded Obligation Candidates" means the Previously Issued Bonds described in Schedule I attached hereto. "Refunded Obligations" means the Refunded Obligation Candidates designated as Refunded Obligations in a Pricing Certificate. "Refunding Purposes" has the meaning assigned in Section 3.01 of this Ordinance. "Register" means the Register specified in Section 3.06(a) of this Ordinance. "Regulations" means the final or temporary Income Tax Regulations applicable to the 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. "Representation Letter" means the Blanket Letter of Representations between the City and DTC. 6 HOU:3299318.4 "Representative" means the representative for the Underwriters named in the Bond Purchase Contract. "Reserve Fund Obligations" means cash or investment securities of any of the type or types permitted under Section 7.06(d) of this Ordinance. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. "Special Payment Date" means the Special Payment Date prescribed by Section 3.03(b). "Special Record Date" means the Special Record Date prescribed by Section 3.03(b). "System" means all properties, real, personal, mixed or otherwise, now owned or hereafter acquired by the City through purchase, construction or otherwise, and used in connection with the City's Electric, Light and Power System and in anywise pertaining thereto, whether situated within or without the limits of the City. "Term Bonds" has the meaning set forth in Section 4.03 hereof. "Unclaimed Payments" mean money deposited with the Paying Agent/Registrar for the payment of principal of, premium, if any, or interest on the Bonds as the same come due and payable and remaining unclaimed by the Owners of such Bonds after the applicable payment or redemption date. "Underwriters" mean the entities named as underwriters in the Bond Purchase Contract. "Yield of (i) any Investment shall be computed in accordance with Section 1.148-5 of the Regulations, and (ii) the Bonds shall be computed in accordance with Section 1.148-4 of the Regulations. Section 1.02 Findings. The declarations, determinations and findings declared, made and found in the preamble to this Ordinance are hereby adopted, restated and made a part of the operative provisions hereof. Section 1.03 Table of Contents, Titles and Headings. The table of contents, titles and headings of the Articles and Sections of this Ordinance have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof and shall never be considered or given any effect in construing this Ordinance or any provision hereof or in ascertaining intent, if any question of intent should arise. 7 HOU:32993 18.4 Section 1.04 Interpretation. (a) Unless the context requires otherwise, words of the masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa. (b) Any action required to be taken on a date which is not a Business Day shall be done on the next succeeding Business Day and have the same effect as if done on the date so required. (c) This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein. ARTICLE II SECURITY FOR THE BONDS Section 2.01 Pledge of Security. The City hereby covenants and agrees that all of the Net Revenues derived from the operation of the System, with the exception of those in excess of the amounts required to establish and maintain the special Funds created for the payment and security of the Bonds Similarly Secured, are hereby irrevocably pledged for the payment of the Previously Issued Bonds, the Bonds and Additional Bonds, if issued, and the interest thereon, and it is hereby ordained that the Previously Issued Bonds, the Bonds and Additional Bonds, if issued, and the interest thereon, shall constitute a first lien on the Net Revenues of the System and be valid and binding without any physical delivery thereof or further act by the City as provided in Chapter 1208, Texas Government Code, as amended. Section 2.02 Limited Obligations. The Bonds, together with the Previously Issued Bonds and any Additional Bonds, are special obligations of the City, payable solely from the pledged Net Revenues, and do not constitute a prohibited indebtedness of the City. Neither the Bonds nor any Additional Bonds shall ever be payable out of funds raised or to be raised by taxation. Section 2.03 Security Interest. The City represents that, under Chapter 1208, Texas Government Code, as amended ("Chapter 1208"), a security interest in the Net Revenues pledged to the payment of the Bonds that is created by the City is valid and effective according to the terms of the security agreement and is perfected from the time the security agreement is entered into or adopted continuously through the termination of the security interest, without physical delivery or transfer of control of the property, filing of a document, or another act. The City covenants that, if Chapter 1208 is amended at any time while the Bonds are outstanding and unpaid, the City shall take all actions required in order to preserve for the Owners of the Bonds a perfected security interest in the property in which such security interest is granted pursuant to Section 2.01 hereof. 8 HOU:3299318.4 ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE BONDS Section 3.01 Authorization. The City's bonds, to be designated "City of Lubbock, Texas, Electric Light and Power System Revenue Refunding and Improvement Bonds, Series 2013," or such other designation or designations as set forth in the Pricing Certificate, are hereby authorized to be issued and delivered in accordance with the Constitution and laws of the State of Texas, including specifically Chapters 1207, 1371 and 1502 Texas Government Code, as amended, and Article VIII of the Charter of the City. The Bonds shall be issued in the number of series and in the principal amount designated in the Pricing Certificate(s) therefor, such aggregate principal amount not to exceed $20,000,000, consisting of (a) an aggregate principal amount not to exceed $16,000,000 for the purposes of (i) paying the costs of the Project, (ii) funding the reserve fund requirement for the Bonds, and (iii) paying the costs of issuing the Bonds (collectively, the "New Money Purposes"), and (b) an aggregate principal amount not to exceed $4,000,000 for the purposes of (i) refunding the Refunded Obligations and (ii) paying the costs of issuing the Bonds and refunding the Refunded Obligations (collectively, the "Refunding Purposes"). Section 3.02 Date, Denomination, Maturities and Interest. (a) The Bonds shall be dated the date set forth in the Pricing Certificate. The Bonds shall be in fully registered form, without coupons, in the denomination of $5,000 or any integral multiple thereof, and shall be numbered separately from one upward or such other designation acceptable to the City and the Paying Agent/Registrar, except the Initial Bond, which shall be numbered T-1, or in such other manner provided in the Pricing Certificate. (b) The Bonds shall mature on the date or dates, in the years and in the principal amounts set forth in the Pricing Certificate provided that the maximum maturity for the Bonds shall not exceed the number of years set forth in Exhibit B. (c) Interest shall accrue and be paid on each Bond respectively until its maturity or prior redemption, from the later of the date set forth in the Pricing Certificate or the most recent Interest Payment Date to which interest has been paid or provided for at the rates per annum for each respective maturity specified in the Pricing Certificate. Such interest shall be payable on each Interest Payment Date until maturity or prior redemption. Interest on the Bonds shall be calculated on the basis of a three hundred sixty (360) day year composed of twelve (12) months of thirty (30) days each, or on such other basis as set forth in the Pricing Certificate. Section 3.03 Medium, Method and Place of Payment. (a) The principal of, premium, if any, and interest on the Bonds shall be paid in lawful money of the United States of America. (b) Interest on the Bonds shall be payable to each Owner as shown in the Register at the close of business on the Record Date; provided, however, in the event of nonpayment of interest on a scheduled Interest Payment Date and for 30 days thereafter, a new record date for 9 HOU:3299318.4 such interest payment (a "Special Record Date") shall be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (the "Special Payment Date," which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by first-class United States mail, postage prepaid, to the address of each Owner of a Bond appearing on the Register at the close of business on the last business day next preceding the date of mailing of such notice. (c) Interest shall be paid by check, dated as of the Interest Payment Date, and sent by the Paying Agent/Registrar to each Owner by United States mail, first class postage prepaid, to the address of each Owner as it appears in the Register, or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the Owner; provided, however, the Owner shall bear all risk and expense of such other banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Bonds, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. (d) The principal of each Bond shall be paid to the Owner thereof on the due date (whether at the maturity date or the date of prior redemption thereof) upon presentation and surrender of such Bond at the Designated Payment/Transfer Office. (e) If the date for the payment of the principal of, premium, if any, or interest on the Bonds is not a Business Day, then the date for such payment shall be the next succeeding day that is a Business Day, and payment on such date shall have the same force and effect as if made on the original date payment was due and no additional interest shall be due by reason of nonpayment on the date on which such payment is otherwise stated to be due and payable. (f) Unclaimed Payments shall be segregated in a special escrow account and held in trust, uninvested by the Paying Agent/Registrar, for the accounts of the Owners of the Bonds to which the Unclaimed Payments pertain. Subject to Title 6 of the Texas Property Code, Unclaimed Payments remaining unclaimed by the Owners entitled thereto for three years after the applicable payment or redemption date shall be applied to the next payment or payments on the Bonds thereafter coming due and, to the extent any such money remains three (3) years after the retirement of all outstanding Bonds, shall be paid to the City to be used for any lawful purpose. Thereafter, neither the City, the Paying Agent/Registrar nor any other person shall be liable or responsible to any owners of such Bonds for any further payment of such unclaimed monies or on account of any such Bonds, subject to Title 6 of the Texas Property Code. Section 3.04 Execution and Reizistration of Bonds. (a) The Bonds shall be executed on behalf of the City by the Mayor and the City Secretary, by their manual or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Bonds shall have the same effect as if each of the Bonds had been signed manually and in person by each of said officers, and such facsimile seal on the Bonds shall have the same effect as if the official seal of the City had been manually impressed upon each of the Bonds. 10 HOU:3299318.4 (b) In the event that any officer of the City whose manual or facsimile signature appears on the Bonds ceases to be such officer before the authentication of such Bonds or before the delivery thereof, such manual or facsimile signature nevertheless shall be valid and sufficient for all purposes as if such officer had remained in such office. (c) Except as provided below, no Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the Certificate of Paying Agent/Registrar substantially in the form provided in Section 6.02 of this Ordinance, duly authenticated by manual execution by an officer or duly authorized signatory of the Paying Agent/Registrar. It shall not be required that the same officer or authorized signatory of the Paying Agent/Registrar sign the Certificate of Paying Agent/Registrar on all of the Bonds. In lieu of the executed Certificate of Paying Agent/Registrar described above, the Initial Bond delivered at the Closing Date shall have attached thereto the Comptroller's Registration Certificate substantially in the form provided in Section 6.02 of this Ordinance, manually executed by the Comptroller of Public Accounts of the State of Texas, or by his duly authorized agent, which Certificate shall be evidence that the Bond has been duly approved by the Attorney General of the State of Texas, that it is a valid and binding obligation of the City and that it has been registered by the Comptroller of Public Accounts of the State of Texas. (d) On the Closing Date, one Initial Bond representing the entire principal amount of all Bonds of such series and the terms set forth in the Pricing Certificate, payable in stated installments to the Representative, or its designee, executed by the Mayor and City Secretary of the City by their manual or facsimile signatures, approved by the Attorney General, and registered and manually signed by the Comptroller of Public Accounts, will be delivered to the Representative or its designee. Upon payment for the Initial Bond, the Paying Agent/Registrar shall cancel the Initial Bond and deliver a single registered, definitive Bond for each maturity, in the aggregate principal amount thereof, to DTC on behalf of the Underwriters. Section 3.05 Ownership. (a) The City, the Paying Agent/Registrar and any other person may treat the person in whose name any Bond is registered as the absolute owner of such Bond for the purpose of making and receiving payment as provided herein (except interest shall be paid to the person in whose name such Bond is registered on the Record Date or Special Record Date, as applicable), 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. (b) All payments made to the Owner of a Bond shall be valid and effectual and shall discharge the liability of the City and the Paying Agent/Registrar upon such Bond to the extent of the sums paid. Section 3.06 Registration, Transfer and Exchange. (a) So long as any Bonds remain outstanding, the City shall cause the Paying Agent/Registrar to keep at the Designated Payment/Transfer Office a register (the "Register") in which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of Bonds in accordance with this Ordinance. 11 HOU:3299318.4 (b) The ownership of a Bond may be transferred only upon the presentation and surrender of the Bond at the Designated Payment/Transfer Office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar. No transfer of any Bond shall be effective until entered in the Register. (c) The Bonds shall be exchangeable upon the presentation and surrender thereof at the Designated Payment/Transfer Office of the Paying Agent/Registrar for a Bond or Bonds of the same maturity and interest rate and in any denomination or denominations of any integral multiple of $5,000 and in an aggregate principal amount equal to the unpaid principal amount of the Bonds presented for exchange. The Paying Agent/Registrar is hereby authorized to authenticate and deliver Bonds exchanged for other Bonds in accordance with this Section. (d) Each exchange Bond delivered by the Paying Agent/ Registrar in accordance with this Section shall constitute an original contractual obligation of the City and shall be entitled to the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such exchange Bond is delivered. (e) No service charge shall be made to the Owner for the initial registration, subsequent transfer, or exchange for any different denomination of any of the Bonds. The Paying Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection with the registration, transfer or exchange of a Bond. (f) Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer, or exchange any Bond called for redemption, in whole or in part, where such redemption is scheduled to occur within forty five (45) calendar days after the transfer or exchange date; provided, however, such limitation shall not be applicable to an exchange by the Owner of the uncalled principal balance of a Bond. Section 3.07 Cancellation. All Bonds paid or redeemed before scheduled maturity in accordance with this Ordinance, and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and delivered in accordance with this Ordinance, shall be cancelled and proper records shall be made regarding such payment, redemption, exchange or replacement. The Paying Agent/Registrar shall then return such cancelled Bonds to the City or may in accordance with law destroy such cancelled Bonds and periodically furnish the City with certificates of destruction of such Bonds. Section 3.08 Temporary Bonds. (a) Following the delivery and registration of the Initial Bond and pending the preparation of definitive Bonds, the proper officers of the City may execute and, upon the City's request, the Paying Agent/Registrar shall authenticate and deliver, one or more temporary Bonds that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any denomination, substantially of the tenor of the definitive Bonds in lieu of which they are delivered, without coupons, and with such appropriate insertions, omissions, substitutions and 12 HOU:3299318.4 other variations as the officers of the City executing such temporary Bonds may determine, as evidenced by their signing of such temporary Bonds. (b) Until exchanged for Bonds in definitive form, such Bonds in temporary form shall be entitled to the benefit and security of this Ordinance. (c) The City, without unreasonable delay, shall prepare, execute and deliver to the Paying Agent/Registrar the Bonds in definitive form; thereupon, upon the presentation and surrender of the Bonds in temporary form to the Paying Agent/Registrar, the Paying Agent/Registrar shall cancel the Bonds in temporary form and shall authenticate and deliver in exchange therefor Bonds of the same maturity and series, in definitive form, in the authorized denomination, and in the same aggregate principal amount, as the Bonds in temporary form surrendered. Such exchange shall be made without the making of any charge therefor to any Owner. Section 3.09 Replacement Bonds. (a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated Bond, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a replacement Bond of like tenor and principal amount, bearing a number not contemporaneously outstanding. The City or the Paying Agent/Registrar may require the Owner of such Bond to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection therewith and any other expenses connected therewith. (b) In the event that any Bond is lost, apparently destroyed or wrongfully taken, the Paying Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall authenticate and deliver a replacement Bond of like tenor and principal amount, bearing a number not contemporaneously outstanding, provided that the Owner first: (i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her ownership of and the circumstances of the loss, destruction or theft of such Bond; (ii) furnishes such security or indemnity as may be required by the Paying Agent/Registrar to save it and the City harmless; (iii) pays all expenses and charges in connection therewith, including, but not limited to, printing costs, legal fees, fees of the Paying Agent/Registrar and any tax or other governmental charge that is authorized to be imposed; and (iv) satisfies any other reasonable requirements imposed by the City and the Paying Agent/Registrar. (c) If, after the delivery of such replacement Bond, a bona fide 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 13 HOU:3299318.4 provided therefor to the extent of any loss, damage, cost or expense incurred by the City or the Paying Agent/Registrar in connection therewith. (d) In the event that any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or is about to become due and payable, the Paying Agent/Registrar, in its discretion, instead of issuing a replacement Bond, may pay such Bond if it has become due and payable or may pay such Bond when it becomes due and payable. (e) Each replacement Bond delivered in accordance with this Section shall constitute an original additional contractual obligation of the City and shall be entitled to 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 3.10 Book -Entry Only System. (a) Notwithstanding any other provision hereof, upon initial issuance of the Bonds, the ownership of the Bonds shall be registered in the name of Cede & Co., as nominee of DTC. The definitive Bonds shall be initially issued in the form of a single separate fully registered certificate for each of the maturities thereof. (b) With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the City and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant or any other person, other than an Owner, as shown on the Register, of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than a Bondholder, as shown in the Register of any amount with respect to principal of, premium, if any, or interest on the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, the City and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each Bond is registered in the Register as the absolute owner of such Bond for the purpose of payment of principal of, premium, if any, and interest on such 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, premium, if any, and interest on the Bonds only to or upon the order of the respective owners, as shown in the Register as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner, as shown in the Register, shall receive a certificate evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the word "Cede & Co." in this Ordinance shall refer to such new nominee of DTC. 14 HOU:32993I 8.4 (c) The Representation Letter previously executed and delivered by the City, and applicable to the City's obligations delivered in book -entry only form to DTC as securities depository, is hereby ratified and approved for the Bonds. Section 3.11 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, or in the event DTC discontinues the services described herein, the City or the Paying Agent/Registrar shall (i) appoint a successor securities depository, qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the appointment of such successor securities depository and transfer one or more separate Bonds to such successor securities depository or (ii) notify DTC and DTC Participants of the availability through DTC of Bonds and transfer one or more separate Bonds to DTC Participants having Bonds credited to their DTC accounts. In such event, the Bonds shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Bonds shall designate, in accordance with the provisions of this Ordinance. Section 3.12 Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary, so long as any Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on such Bonds, and all notices with respect to such Bonds, shall be made and given, respectively, in the manner provided in the Representation Letter. ARTICLE IV REDEMPTION OF BONDS BEFORE MATURITY Section 4.01 Limitation on Redemption. The Bonds shall be subject to redemption before scheduled maturity only as provided in this Article IV and in the Pricing Certificate. Section 4.02 Optional Redemption. (a) The City reserves the option to redeem Bonds in the manner provided in the Form of Bond attached hereto as Exhibit C, with such changes as are required by the Pricing Certificate. (b) If less than all of the Bonds are to be redeemed pursuant to an optional redemption, the City shall determine the maturity or maturities and the amounts thereof to be redeemed and shall direct the Paying Agent/Registrar to call by lot, or by any other customary method that results in a random selection, the Bonds, or portions thereof, within such maturity or maturities and in such principal amounts for redemption. 15 HOU:3299318.4 (c) The City, at least forty-five (45) days before the redemption date, unless a shorter period shall be satisfactory to the Paying Agent/Registrar, shall notify the Paying Agent/Registrar of such redemption date and of the principal amount of Bonds to be redeemed. Section 4.03 Mandatory Sinking Fund Redemption. Bonds designated as "Term Bonds," if any, in the Pricing Certificate are subject to scheduled mandatory redemption and will be redeemed by the City, out of moneys available for such purpose in the Interest and Sinking Fund, in the manner provided in the Form of Bond attached hereto as Exhibit C, with such changes as are required by the Pricing Certificate. Term Bonds shall be subject to mandatory redemption at the price, on the dates, and in the respective principal amounts set forth in the Pricing Certificate. Section 4.04 Partial Redemption. (a) A portion of a single Bond of a denomination greater than $5,000 may be redeemed, but only in a principal amount equal to $5,000 or any integral multiple thereof. If such a Bond is to be partially redeemed, the Paying Agent/Registrar shall treat each $5,000 portion of the Bond as though it were a single Bond for purposes of selection for redemption. (b) Upon surrender of any Bond for redemption in part, the Paying Agent/Registrar, in accordance with Section 3.06 of this Ordinance, shall authenticate and deliver an exchange Bond or Bonds in an aggregate principal amount equal to the unredeemed portion of the Bond so surrendered, such exchange being without charge. (c) The Paying Agent/Registrar shall promptly notify the City in writing of the principal amount to be redeemed of any Bond as to which only a portion thereof is to be redeemed. Section 4.05 Notice of Redemption to Owners. (a) The Paying Agent/Registrar shall give notice of any redemption of Bonds by sending notice by United States mail, first class postage prepaid, not less than thirty (30) days before the date fixed for redemption, to the Owner of each Bond (or part thereof) to be redeemed, at the address shown on the Register at the close of business on the business day next preceding the date of mailing such notice. (b) The notice shall state the redemption date, the redemption price, the place at which the Bonds are to be surrendered for payment, and, if less than all the Bonds outstanding are to be redeemed, an identification of the Bonds or portions thereof to be redeemed. (c) The City reserves the right to give notice of its election or direction to redeem Bonds under Section 4.02 conditioned upon the occurrence of subsequent events. Such notice may state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption date or (ii) that the City retains the right to rescind such notice at any time prior to the scheduled redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar 16 HOU:3299318.4 instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and redemption shall be of no effect if such moneys and/or authorized securities are not so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice of redemption to the affected Owners. Any Bonds subject to conditional redemption where redemption has been rescinded shall remain Outstanding, and the rescission shall not constitute an event of default. Further, in the case of a conditional redemption, the failure of the City to make moneys and/or authorized securities available in part or in whole on or before the redemption date shall not constitute an event of default. (d) Any notice given as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Owner receives such notice. Section 4.06 Payment Upon Redemption. (a) Before or on each redemption date, the City shall deposit with the Paying Agent/Registrar money sufficient to pay all amounts due on the redemption date and the Paying Agent/Registrar shall make provision for the payment of the Bonds to be redeemed on such date by setting aside and holding in trust such amounts as are received by the Paying Agent/Registrar from the City and shall use such funds solely for the purpose of paying the principal of and accrued interest on the Bonds being redeemed. (b) Upon presentation and surrender of any Bond called for redemption at the Designated Payment/Transfer Office on or after the date fixed for redemption, the Paying Agent/Registrar shall pay the principal of and accrued interest on such Bond to the date of redemption from the money set aside for such purpose. Section 4.07 Effect of Redemption. (a) Notice of redemption having been given as provided in Section 4.05 of this Ordinance and subject to any conditions or rights reserved by the City under Section 4.05(c), the Bonds or portions thereof called for redemption shall become due and payable on the date fixed for redemption and, unless the City defaults in its obligation to make provision for the payment of the principal thereof, or accrued interest thereon, such Bonds or portions thereof shall cease to bear interest from and after the date fixed for redemption, whether or not such Bonds are presented and surrendered for payment on such date. (b) If the City shall fail to make provision for payment of all sums due on a redemption date, then any Bond or portion thereof called for redemption shall remain Outstanding and continue to bear interest at the rate stated on the Bond until due provision is made for the payment of same by the City. Section 4.08 Lapse of Payment. Money set aside for the redemption of Bonds and remaining unclaimed by the Owners of such Bonds shall be subject to the provisions of Section 3.03(f) hereof. 17 HOU:3299318.4 ARTICLE V PAYING AGENT/REGISTRAR Section 5.01 Appointment of Pang Agent/Registrar. The form of Paying Agent/Registrar Agreement presented at the meeting at which this Ordinance was approved and the appointment of the Paying Agent/Registrar identified therein are hereby approved. The Mayor is hereby authorized and directed to execute the Paying Agent/Registrar Agreement with the Paying Agent/Registrar, specifying the duties and responsibilities of the City and the Paying Agent/Registrar, in substantially the form presented at the meeting at which this Ordinance was approved with such changes as may be approved by the Mayor or an Authorized Officer. The signature of the Mayor shall be attested by the City Secretary. Section 5.02 4ualifications. Each Paying Agent/Registrar shall be a commercial bank, a trust company organized under the laws of the State of Texas, or any other entity duly qualified and legally authorized to serve as and perform the duties and services of paying agent and registrar for the Bonds. Section 5.03 Maintaining Paying Agent/Registrar. _ (a) At all times while any Bonds are Outstanding, the City will maintain a Paying Agent/Registrar that is qualified under Section 5.02 of this Ordinance. (b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the City will promptly appoint a replacement. Section 5.04 Termination. The City, upon not less than sixty (60) days' notice, reserves the right to terminate the appointment of any Paying Agent/Registrar by delivering to the entity whose appointment is to be terminated written notice of such termination. Section 5.05 Notice of Change to Owners. Promptly upon each change in the entity serving as Paying Agent/Registrar, the City will cause notice of the change to be sent to each Owner by United States mail, first class postage prepaid, at the address in the Register thereof, stating the effective date of the change and the name and mailing address of the replacement Paying Agent/Registrar. Section 5.06 Agreement to Perform Duties and Functions. By accepting the appointment as Paying Agent/Registrar and executing the Paying Agent/Registrar Agreement, the Paying Agent/Registrar is deemed to have agreed to the provisions of this Ordinance and that it will perform the duties and functions of Paying Agent/Registrar prescribed thereby. 18 HOU:3299318.4 Section 5.07 Delivery of Records to Successor. If a Paying Agent/Registrar is replaced, such Paying Agent/Registrar, promptly upon the appointment of the successor, will deliver the Register (or a copy thereof) and all other pertinent books and records relating to the Bonds to the successor Paying Agent/Registrar. ARTICLE VI FORM OF THE BONDS Section 6.01 Form Generally. (a) The Bonds, including the Registration Certificate Of the Comptroller of Public Accounts of the State of Texas, the Certificate of the Paying Agent/Registrar, and the Assignment form to appear on each of the Bonds, (i) shall be generally in the form set forth in Exhibit C hereto, with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance and the Pricing Certificate, and (ii) may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including any reproduction of an opinion of counsel) thereon as, consistently herewith, may be determined by the City or by the officers executing such Bonds, as evidenced by their execution thereof. (b) Any portion of the text of any Bonds may be set forth on the reverse side thereof, with an appropriate reference thereto on the face of the Bonds. (c) The definitive Bonds shall be typewritten, photocopied, printed, lithographed, or engraved, and may be produced by any combination of these methods or produced in any other similar manner, all as determined by the officers executing such Bonds, as evidenced by their execution thereof. (d) The Initial Bond submitted to the Attorney General of the State of Texas may be typewritten and photocopied or otherwise reproduced. Section 6.02 CUSIP Registration. The City may secure identification numbers through CUSIP Global Services, managed on behalf of the American Bankers Association by Standard & Poor's Financial Services LCC, and may authorize the printing of such numbers on the face of the Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the Bonds shall be of no significance or effect as regards the legality thereof and neither the City nor the attorneys approving said Bonds as to legality are to be held responsible for CUSIP numbers incorrectly printed on the Bonds. Section 6.03 Legal Opinion. The approving legal opinion of Andrews Kurth LLP, Bond Counsel, may be attached to or printed on the reverse side of each Bond over the certification of the City Secretary of the City, which may be executed in facsimile. 19 HOU:3299318.4 Section 6.04 Statement of Insurance. A statement relating to a municipal bond insurance policy, if any, issued for the Bonds may be printed on or attached to each Bond. ARTICLE V II FUNDS AND ACCOUNTS Section 7.01 Segregation of Revenues/Fund Designations. All receipts, revenues and income derived from the operation and ownership of the System shall be kept separate from other funds of the City and deposited within twenty-four (24) hours after collection in the "Electric Light and Power System Fund" (created and established in connection with the issuance of the Previously Issued Bonds), which Fund (hereinafter referred to as the "System Fund") is hereby reaffirmed and shall continue to be kept and maintained at an official depository bank of the City while the Bonds remain Outstanding. Furthermore, the "Special Electric Light and Power System Revenue Bond Retirement and Reserve Fund" (hereinafter referred to as the "Bond Fund"), created and established in connection with the issuance of the Previously Issued Bonds, is hereby reaffirmed and shall continue to be maintained by the City while the Bonds remain Outstanding. The Bond Fund is and shall continue to be kept and maintained at the City's official depository bank, and moneys deposited in the Bond Fund shall be used for no purpose Other than for the payment, redemption and retirement of Bonds Similarly Secured. Section 7.02 System Fund. The City hereby reaffirms its covenant to the Owners of the Previously Issued Bonds and agrees with the owners of the Bonds that the moneys deposited in the System Fund shall be used first for the payment of the reasonable and proper expenses of operating and maintaining the System. All moneys deposited in the System Fund in excess of the amounts required to pay operating and maintenance expenses of the System shall be applied and appropriated, to the extent required and in the order of priority prescribed, as follows: (a) To the payment of the amounts required to be deposited in the Bond Fund for the payment of principal of and interest on the Bonds Similarly Secured as the same become due and payable; and (b) To the payment of the amounts, if any, required to be deposited in the Reserve Portion of the Bond Fund to accumulate, restore and maintain the Reserve Requirement as security for the payment of the principal of and interest on the Bonds Similarly Secured. Section 7.03 Bond Fund. (a) In addition to the required monthly deposits to the Bond Fund for the payment of principal of and interest on the Previously Issued Bonds, the City hereby agrees and covenants to deposit to the Bond Fund an amount equal to one hundred percent (100%) of the amount required to fully pay the interest on and principal of the Bonds falling due on or before each maturity date and Interest Payment Date, such payments to be made in substantially equal 20 HOU:3299318.4 monthly installments on or before the first day of each month beginning on or before the first day of the month next following the month the Bonds are delivered to the Underwriters. The required monthly deposits to the Bond Fund for the payment of principal of and interest on the Bonds shall continue to be made as hereinabove provided until such time as (i) the total amount on deposit in the Bond Fund, including the "Reserve Portion" deposited therein, is equal to the amount required to fully pay and discharge all Outstanding Bonds Similarly Secured (principal and interest) or (ii) the Bonds are no longer Outstanding, i.e., the Bonds have been fully paid as to principal and interest or all the Bonds have been refunded. Accrued interest, if any, received from the purchasers of the Bonds shall be deposited in the Bond Fund, and shall be taken into consideration and reduce the amount of the monthly deposits hereinabove required which would otherwise be required to be deposited in the Bond Fund from the Net Revenues of the System. (b) In addition to the amounts to be deposited in the Bond Fund to pay current principal and interest for the Bonds Similarly Secured, the City reaffirms its covenant to the holders of the Previously Issued Bonds and agrees to accumulate and maintain in said Fund a reserve amount (the "Reserve Portion") equal to not less than the average annual principal and interest requirements of all Outstanding Bonds Similarly Secured (calculated and predetermined at the time of issuance of each series of Bonds Similarly Secured). The Pricing Certificate shall set forth the amount required to be on deposit in the Reserve Portion of the Bond Fund by virtue of the issuance of the Bonds (the "Required Reserve"), which amount will be not less than the average annual principal and interest requirements of the Outstanding Bonds Similarly Secured after giving effect to the issuance of the Bonds. The Reserve Portion of the Bond Fund shall be made available for and reasonably employed in meeting the requirements of the Bond Fund if need be, and if any amount thereof is so employed, the Reserve Portion in the Bond Fund shall be fully restored to the Required Reserve as rapidly as possible from the first available Net Revenues of the System in the System Fund subject only to the priority of payments hereinabove prescribed in Section 7.02. Any amounts on deposit in the Reserve Portion of the Bond Fund which are in excess of the Required Reserve shall be transferred to the System Fund. (c) At any time after all of the Previously Issued Bonds dated on or before July 1, 2001, have been paid, refunded or cancelled and are no longer Outstanding, the provisions of subsections (d) through (k) of this Section 7.03 shall apply to the Bonds and any Additional Bonds, and the provisions contained in subsection (b) of this Section 7.03 shall be of no force and effect. (d) In addition to the amounts to be deposited in the Bond Fund to pay current principal and interest for the Bonds Similarly Secured, the City covenants and agrees to accumulate and maintain in the Bond Fund a reserve amount (the "Reserve Portion") of Reserve Fund Obligations equal to not less than the Average Annual Debt Service requirements of all Outstanding Bonds Similarly Secured (the "Required Reserve") which shall be calculated and predetermined at the time of issuance of each series of Bonds Similarly Secured. Upon issuance of Additional Bonds, the Required Reserve shall be increased, if required, to an amount equal to the lesser of (i) the Average Annual Debt Service (calculated on a Fiscal Year basis) for all bonds Outstanding, as determined on the date of issuance of each series of Additional Bonds, and annually following each principal payment date or redemption date for the Bonds, the Previously Issued Bonds and any Additional Bonds Outstanding, as the case may be, or (ii) the maximum amount in a reasonably required reserve fund that can be invested without restriction 21 HOU:3299318.4 as to yield pursuant to Subsection (d) of section 148 of the Code and regulations promulgated thereunder. The Reserve Portion of the Bond Fund shall be made available for and reasonably employed in meeting the requirements of the Bond Fund if need be, and if any amount thereof is so employed, and the Reserve Portion in the Bond Fund is less than the Required Reserve, or if an event of default under any Credit Facility held in the Reserve Portion of the Bond Fund has occurred and is continuing, the Required Reserve shall be restored from Net Revenues in twenty- four (24) approximately equal monthly payments from the first available Net Revenues of the System in the System Fund subject only to the priority of payments hereinabove prescribed in Section 7.02. (e) The City may, at its option, withdraw all surplus on deposit in the Reserve Portion of the Bond Fund over the Required Reserve and deposit the same in the System Fund; provided, however, that to the extent such surplus monies constitute bond proceeds, including interest and income derived therefrom, such amounts shall not be deposited to the System Fund and shall only be used for the purposes for which bond proceeds may be used. (f) For the purpose of determining compliance with the requirements of subsection (d) of this Section 7.03, Reserve Fund Obligations shall be valued each year as of the last day of the City's fiscal year at their market value, except that any direct obligations of the United States (State and Local Government Series) held for the benefit of the Reserve Portion of the Bond Fund in book -entry form shall be continuously valued at their par value or face principal amount. (g) To the extent permitted by, and in accordance with applicable law and upon approval of the Attorney General of the State of Texas, the City may replace or substitute a Credit Facility for cash or investment securities on deposit in the Reserve Portion of the Bond Fund or in substitution or replacement of any existing Credit Facility. Upon such replacement or substitution, cash or investment securities of any of the types permitted by Section 7.06(d) hereof, on deposit in the Reserve Portion of the Bond Fund which, taken together with the face amount of any existing Credit Facilities, are in excess of the Required Reserve may be withdrawn by the City, at its option, and transferred to the System Fund; provided that the face amount of any Credit Facility may be reduced at the option of the City in lieu of such transfer. However, to the extent such surplus monies constitute bond proceeds, including interest and income derived therefrom, such amounts shall not be deposited to the System Fund and shall only be used for the purposes for which bond proceeds may be used. Any interest due on any reimbursement obligation under the Credit Facility shall not exceed the highest lawful rate of interest which may be paid by the City. (h) If the City is required to make a withdrawal from the Reserve Portion of the Bond Fund, the City shall promptly notify the issuer of any Credit Facility of the necessity for a withdrawal from the Reserve Portion of the Bond Fund, and shall make such withdrawal first from available moneys or investment securities then on deposit in the Reserve Portion of the Bond Fund, and next from a drawing under any Credit Facility to the extent of such deficiency. (i) In the event of a deficiency in the Reserve Portion of the Bond Fund, or in the event that on the date of termination or expiration of any Credit Facility or the date of an occurrence of an event of default under the Credit Facility has occurred and is continuing beyond any cure period therefor, if any, there is not on deposit in the Reserve Portion of the Bond Fund 22 HOU:3299318.4 sufficient Reserve Fund Obligations, all in an aggregate amount at least equal to the Required Reserve calculated as of the date of such deficiency, termination, expiration or event of default of such Credit Facility, then the City shall restore such deficiency from the first available Net Revenues of the System in the System Fund subject only to the priority of payments hereinabove prescribed in Section 7.02, in twenty-four (24) approximately equal monthly payments. 0) In the event of the redemption or defeasance of any of the Outstanding Bonds Similarly Secured, any Reserve Fund Obligations on deposit in the Reserve Fund in excess of the Required Reserve may be withdrawn and transferred, at the option of the City and subject to the last sentence of this subparagraph 0), to the System Fund, as a result of (i) the redemption of the Outstanding Bonds Similarly Secured, or (ii) funds for the payment of the Outstanding Bonds Similarly Secured having been deposited irrevocably with the paying agent or place of payment therefor in the manner described in this Ordinance, the result of such deposit being that such Outstanding Bonds Similarly Secured no longer are deemed to be Outstanding under the terms of this Ordinance. However, to the extent such surplus monies constitute bond proceeds, including interest and income derived therefrom, such amounts shall not be deposited to the System Fund and shall only be used for the purposes for which bond proceeds may be used. (k) In the event there is a draw upon the Credit Facility, the City shall reimburse the issuer of such Credit Facility for such draw in accordance with the terms of any agreement pursuant to which the Credit Facility is issued from Net Revenues; however, such reimbursement from Net Revenues (i) shall be subject to the provisions of subparagraph (h) hereof, and (ii) shall be subordinate and junior in right of payment to the payment of principal of and premium, if any, and interest on the Bonds Similarly Secured. Section 7.04 Payment of Bonds. While any of the Bonds are Outstanding, the proper officers of the City are hereby authorized to transfer or cause to be transferred to the Paying Agent/Registrar, from funds on deposit in the Bond Fund, including the Reserve Portion, if necessary, amounts sufficient to fully pay and discharge promptly as each installment of interest and principal on the Bonds accrues or matures or comes due by reason of redemption prior to maturity; such transfer of funds to be made in such manner as will cause immediately available funds to be deposited with the Paying Agent/Registrar for the Bonds at the close of the Business Day next preceding the date of payment for the Bonds. Section 7.05 Deficiencies in Funds. If in any month the City shall, for any reason, fail to pay into the Bond Fund the full amounts above stipulated, amounts equivalent to such deficiencies shall be set apart and paid into the Bond Fund from the first available and unallocated Net Revenues of the System in the following month or months and such payments shall be in addition to the amounts hereinabove provided to be otherwise paid into the Bond Fund during such month or months. Section 7.06 Security of Funds. (a) Moneys on deposit in the System Fund (except any amounts as may be properly invested) shall be secured in the manner and to the fullest extent required by the laws of the State 23 HOU:3299318.4 of Texas for the security of public funds. Moneys on deposit in the Bond Fund shall be continuously secured by a valid pledge of direct obligations of, or obligations unconditionally guaranteed by the United States of America, having a market value, exclusive of accrued interest, at all times at least equal to the amount of money to be deposited in said Fund. All sums deposited in the Bond Fund shall be held as a trust fund for the benefit of the Owners of the Bonds Similarly Secured, while the beneficial interest therein deemed to be vested in such Owners. To the extent money in the Reserve Portion of the Bond Fund is invested under the provisions of subsection (b) of this Section 7.06, securing such money as provided otherwise in this section, is not required. (b) Money deposited to the credit of the Reserve Portion of the Bond Fund may, at the option of the City, be invested in obligations identified in, and in accordance with the provisions of the Public Funds Investment Act, Chapter 2256, Texas Government Code, relating to the investment of "bond proceeds"; provided that all such investments shall be made in such a manner that the money required to be expended from said Funds will be available at the proper time or times. Such investments (except State and Local Government Series investments held in book -entry form, which shall at all times be valued at par) shall be valued in terms of current market value within forty-five (45) days of the close of each Fiscal Year and, with respect to investments held for the account of the Reserve Portion of the Bond Fund, within thirty (30) days of the date of passage of each ordinance authorizing the issuance of Additional Bonds. All moneys resulting from maturity of principal and interest of the securities shall be reinvested or accumulated in the Reserve Portion of the Bond Fund and considered a part thereof and used for and only for the purposes hereinabove provided with respect to said Reserve Portion, provided that when the full amount required to be accumulated in the Reserve Portion of the Bond Fund (being the amounts required to be accumulated by the ordinances authorizing the Bonds Similarly Secured) is accumulated, any interest increment may be used in the Bond Fund to reduce the payments that would otherwise be required to pay the current Debt Service requirements on Bonds Similarly Secured. (c) At any time after all of the Previously Issued Bonds dated on or before July 1, 2001, have been paid, refunded or cancelled and are no longer Outstanding, the provisions of subsection (d) of this Section 7.06 shall apply to the Bonds and any Additional Bonds, and the provisions contained in subsections (a) and (b) of this Section 7.06 shall be of no force and effect. (d) Money in any Fund established or affirmed pursuant to this Ordinance or any ordinance authorizing the issuance of Previously Issued Bonds, and any Additional Bonds, may, at the option of the City, be invested in time deposits or certificates of deposit secured in the manner required by law for public funds, or be invested in direct obligations of, including obligations the principal and interest on which are unconditionally guaranteed by, the United States of America, in obligations of any agencies or instrumentalities thereof, or in such other investments as are permitted under the Public Funds Investment Act, Chapter 2256, Texas Government Code, as amended, or any successor law, as in effect from time to time, consistent with the City's investment policy; provided that all such deposits and investments shall be made in such manner (which may include repurchase agreements for such investment with any primary dealer of such agreements) that the money required to be expended from any such Fund will be available at the proper time or times. Such investments shall be valued each year in terms of 24 HOU:3299318.4 current market value as of the last day of the Fiscal Year. For purposes of maximizing investment returns, to the extent permitted by law, money in such Funds may be invested in common investments of the kind described above, or in a common pool of such investment which shall be kept and held at an official depository bank, which shall not be deemed to be or constitute a commingling of such money or funds provided that safekeeping receipts or certificates of participation clearly evidencing the investment or investment pool in which such money is invested and the share thereof purchased with such money or owned by such fund are held by Or on behalf Of each such Fund. If necessary, such investments shall be promptly sold to prevent any default. Any investment made with money deposited to the credit of the Reserve Portion of the Bond Fund shall not have a maturity in excess of five (5) years. ARTICLE VIII SALE AND DELIVERY OF BONDS; DEPOSIT OF PROCEEDS Section 8.01 Sale of Bonds; Official Statement. (a) The Bonds shall be sold at negotiated sale to the Underwriters in accordance with the terms of this Ordinance, including this Section 8.01(a) and Exhibit B hereto, provided that all of the conditions set forth in Exhibit B can be satisfied. As authorized by Chapters 1207 and 1371, Texas Government Code, as amended, the Authorized Officer is authorized to act on behalf of the City upon determining that the conditions set forth in Exhibit B can be satisfied, in selling and delivering each series of Bonds and carrying out the other procedures specified in this Ordinance, including determining (i) the total aggregate principal amount and the number of series of the Bonds, (ii) whether to acquire bond insurance for each series of Bonds, (iii) the amount and manner of funding the reserve fund requirement; (iv) the price at which the Bonds of each series will be sold, (v) the Refunded Obligation Candidates to be refunded and their redemption dates, (vi) the number and any additional or different title or designation for each series of Bonds to be issued, (vii) the form in which the Bonds of each series shall be issued, (viii) the dates on which the Bonds of each series will mature, the principal amount to mature in each year, the rate of interest to be borne by each such maturity, the interest payment dates, and the initial date from which interest will accrue, (ix) the dates, prices and other terms upon and at which the Bonds of each series shall be subject to redemption prior to maturity (including terms for optional and mandatory sinking fund redemption), and (x) all other matters relating to the issuance, sale and delivery of the Bonds and the refunding of the Refunded Obligations, all of which shall be specified in the Pricing Certificate for each series of Bonds. The authority granted to the Authorized Officer under this Section 8.01(a) shall expire at 10:00 p.m., on the 180th day following the date of this Ordinance (the "Expiration Date"), unless otherwise extended by the City Council by separate action. Bonds sold pursuant to a Bond Purchase Contract executed on or before the Expiration Date may be delivered after such date. Any finding or determination made by the Authorized Officer relating to the issuance and sale of the Bonds and the execution of the Bond Purchase Contract in connection therewith shall have the same force and effect as a finding or determination made by the City Council. (b) The Authorized Officer is hereby authorized and directed to execute and deliver, and the City Secretary is hereby authorized and directed to attest, a bond purchase contract with 25 HOU:3299318.4 respect to each series of Bonds (the "Bond Purchase Contract") which shall be in the form approved by the Authorized Officer. Upon completion of the terms of the Bond Purchase Contract in accordance with the terms of the Pricing Certificate and this Ordinance, the Authorized Officer is authorized and directed to execute such Bond Purchase Contract on behalf of the City and the Authorized Officer 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. The Bonds shall initially be registered in the name of the Representative. (c) The form and substance of the Preliminary Official Statement and any addenda, supplement or amendment thereto, with such appropriate variations as shall be approved by the Authorized Officer, are hereby in all respects approved and adopted, and the Preliminary Official Statement is hereby deemed final as of its date within the meaning and for the purposes of paragraph (b)(1) of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended. The Authorized Officer and City Secretary are hereby authorized and directed to cause to be prepared a final Official Statement (the "Official Statement") incorporating applicable pricing information pertaining to the Bonds, and to execute the same by manual or facsimile signature and deliver appropriate numbers of executed copies thereof to the Underwriters. The Official Statement as thus approved, executed and delivered, with such appropriate variations as shall be approved by the Authorized Officer and the Underwriters, may be used by the Underwriters in the public offering and sale of the Bonds. The City Secretary is hereby authorized and directed to include and maintain a copy of the Official Statement and any addenda, supplement or amendment thereto thus approved among the permanent records of the meeting at which this Ordinance was approved. The use and distribution of the Preliminary Official Statement, and the preliminary public offering of the Bonds by the Underwriters, is hereby approved and confirmed. (d) All officers of the City are authorized to execute such documents, certificates, receipts and other instruments as they may deem appropriate in order to consummate the delivery of the Bonds in accordance with the terms of sale therefor including, without limitation, the Bond Purchase Contract. (e) The obligation of the Underwriters to accept delivery of the Bonds is subject to the closing conditions set forth in the Bond Purchase Contract, including specifically the Underwriters being furnished with the final, approving opinion of Andrews Kurth LLP, bond counsel for the City, which opinion shall be dated and delivered the Closing Date. Section 8.02 Control and Delivery of Bonds. (a) The Authorized Officer of the City is hereby authorized to have control of the Initial Bond and all necessary records and proceedings pertaining thereto pending investigation, examination, and approval of the Attorney General of the State of Texas, registration by the Comptroller of Public Accounts of the State of Texas and registration with, and initial exchange or transfer by, the Paying Agent/Registrar. (b) After registration by the Comptroller of Public Accounts, delivery of the Bonds shall be made to the Underwriters under and subject to the general supervision and direction of 26 HOU:3299318.4 the Authorized Officer, against receipt by the City of all amounts due to the City under the terms of sale. (c) In the event the Mayor or City Secretary is absent or otherwise unable to execute any document or take any action authorized herein, the Mayor Pro Tern and the Assistant City Secretary, respectively, shall be authorized to execute such documents and take such actions, and the performance of such duties by the Mayor Pro Tern and the Assistant City Secretary shall for the purposes of this Ordinance have the same force and effect as if such duties were performed by the Mayor and City Secretary, respectively. Section 8.03 Deposit of Proceeds. Proceeds from the sale of the Bonds shall be applied in accordance with the provisions set forth in the Pricing Certificate for such Bonds. ARTICLE IX PARTICULAR REPRESENTATIONS AND COVENANTS Section 9.01 Additional Bonds. In addition to the right to issue bonds of inferior lien as authorized by the laws of the State of Texas, the City hereby reserves the right to issue Additional Bonds which, when duly authorized and issued in compliance with the terms and conditions hereinafter appearing, shall be on a parity with the Previously Issued Bonds and the Bonds herein authorized, payable from and equally and ratably secured by a first lien on and pledge of the Net Revenues of the System. The Additional Bonds may be issued in one or more installments, provided, however, that none shall be issued unless and until the following conditions have been met: (a) The Mayor and Chief Financial Officer have certified that the City is not then in default as to any covenant, condition or obligation prescribed by any ordinance authorizing the issuance of Bonds Similarly Secured then Outstanding, including showings that all interest, sinking and reserve funds then provided for have been fully maintained in accordance with the provisions of said ordinances; (b) The applicable laws of the State of Texas in force at the time provide permission and authority for the issuance of such Additional Bonds and have been fully complied with; (c) The Additional Bonds are made to mature on April 15 or October 15, or both, in each of the years in which they are provided to mature; (d) The Reserve Portion of the Bond Fund shall be accumulated and supplemented as necessary to maintain a sum which shall be not less than the Average Annual Debt Service requirements of all bonds secured by a first lien on and pledge of the Net Revenues of the System which will be outstanding upon the issuance of any series of Additional Bonds. Accordingly, each ordinance authorizing the issuance of any series of Additional Bonds shall provide for any required increase in the Reserve Portion, and if supplementation is necessary to meet all conditions of said Reserve Portion, said ordinances shall make provision that same be 27 HOU:3299318.4 supplemented by the required amounts in equal monthly installments over a period of not to exceed sixty (60) calendar months from the dating of such Additional Bonds. (e) In addition to the conditions precedent that must be satisfied pursuant to this Section 9.01, so long as the Previously Issued Bonds dated on or prior to July 1, 2001, remain Outstanding, the condition precedent set forth in subdivision (i) below must be satisfied. Once the Previously Issued Bonds dated on or prior to July 1, 2001 are no longer Outstanding, the condition precedent in subdivision (ii) below must be satisfied. (i) The City has secured from an independent certified public accountant a written report demonstrating the Net Revenues of the System were, during the last completed Fiscal Year, or during any consecutive twelve (12) months period of the last fifteen (15) consecutive months prior to the month of adoption of the ordinance authorizing the Additional Bonds, equal to at least one and one-half (1-1/2) times the Average Annual Debt Service requirements of all Bonds Similarly Secured and which will be outstanding upon the issuance of the Additional Bonds; and further demonstrating that for the same period as is employed in arriving at the aforementioned test said Net Revenues were equal to at least one and one -fifth (1-115) times the maximum annual principal and interest requirements of all such bonds as will be outstanding upon the issuance of the Additional Bonds. (ii) The City has secured a certificate or opinion from an independent certified public accountant to the effect that, according to the books and records of the City, the Net Revenues of the System were, during the last completed Fiscal Year, or during any consecutive twelve (12) months period of the last eighteen (18) consecutive months prior to the month of adoption of the ordinance authorizing the Additional Bonds, equal to at least 1.25 times the Average Annual Debt Service requirements of the Bonds Similarly Secured which will be outstanding upon the issuance of the Additional Bonds; and further demonstrating that for the same period as is employed in arriving at the aforementioned test said Net Revenues were equal to at least 1.10 times the maximum annual principal and interest requirements of all Bonds Similarly Secured as will be outstanding upon the issuance of the Additional Bonds. In making a determination of the Net Revenues, the certified public accountant may take into consideration a change in the charges for services afforded by the System that became effective at least 60 days prior to the last day of the period for which Revenues are determined and, for purposes of satisfying the above Net Revenues test, make a pro -forma determination of the Net Revenues of the System for the period of time covered by his certification or opinion based on such change in charges being in effect for the entire period covered by the certificate or opinion of the certified public accountant. When thus issued, such Additional Bonds may be secured by a pledge of the Net Revenues of the System on a parity in all things with the pledge securing the issuance of the Bonds and the Previously Issued Bonds. 28 HOU:3299318.4 Section 9.02 Rates and Char. The City hereby covenants and agrees with the owners of the Bonds that rates and charges for electric power and energy afforded by the System will be established and maintained to provide revenues sufficient at all times to pay: (a) all necessary and reasonable expenses of operating and maintaining the System as set forth in the definition "Net Revenues" and to recover depreciation; (b) the amounts required to be deposited to the Bond Fund to pay the principal of and interest on the Bonds Similarly Secured as the same becomes due and payable and to accumulate and maintain the reserve amount required to be deposited therein; and (c) any other legally incurred indebtedness payable from the revenues of the System and/or secured by a lien on the System or the revenues thereof. Section 9.03 Maintenance and Operation; Insurance. (a) Prior to the date that the Previously Issued Bonds dated on or prior to July 1, 2001, are no longer Outstanding, or deemed to be Outstanding, the provisions of this subparagraph (a) shall apply to the Similarly Secured Bonds. The City hereby covenants and agrees to maintain the System in good condition and operate the same in an efficient manner and at reasonable cost. The City further agrees to maintain insurance for the benefit of the owners of the Bonds of the kinds and in the amounts which are usually carried by private companies operating similar properties, and that during such time all policies of insurance shall be maintained in force and kept current as to premium payments. All moneys received from losses under such insurance policies other than public liability policies are hereby pledged as security for the Bonds Similarly Secured until and unless the proceeds thereof are paid out in making good the loss or damage in respect of which such proceeds are received, either by replacing the property destroyed or repairing the property damaged, and adequate provisions are made within ninety (90) days after the date of the loss for making good such loss or damage. The premiums for all insurance policies required under the provisions of this Section shall be considered as maintenance and operation expenses of the System. (b) On the date that the Previously Issued Bonds issued on or prior to July 1, 2001, are no longer Outstanding, or deemed to be not Outstanding, the provisions of this subparagraph (b) shall apply to the Similarly Secured Bonds. In regard to the operations and properties of the System, the City agrees to carry and maintain liability and property damage insurance of the kind and in the amounts customarily carried by municipal corporations in Texas on such kind of properties; provided, however, the City, in lieu of and/or in combination with carrying such insurance, may self -insure against all perils and risks by establishing self-insurance reserves. Section 9.04 Records, Accounts, Accounting_ Reports. The City hereby covenants and agrees while any of the Bonds or any interest thereon remain Outstanding and unpaid, it will keep and maintain a proper and complete system of records and accounts pertaining to the operation of the System separate and apart from ail other records and accounts of the City in accordance with generally accepted accounting principles 29 HOU:3299318.4 prescribed for municipal corporations, and complete and correct entries shall be made of all transactions relating to said System, as provided by applicable law. The Owner of any Bonds, or any duly authorized agent or agents of such Owner, shall have the right at all reasonable times to inspect all such records, accounts and data relating thereto and to inspect the System and all properties comprising the same. The City further agrees that as soon as possible following the close of each Fiscal Year, it will cause an audit of such books and accounts to be made by an independent firm of certified public accountants. Each such audit, in addition to whatever other matters may be thought proper by the certified public accountant, shall particularly include the following: Year; (a) A detailed statement of the income and expenditures of the System for such Fiscal (b) A balance sheet as of the end of such Fiscal Year; (c) The comments of such accountant regarding the manner in which the City has complied with the covenants and requirements of this Ordinance and his recommendations for any changes or improvements in the operation, records and accounts of the System; (d) A list of the insurance policies in force at the end of the Fiscal Year on the System properties, setting out as to each policy the amount thereof, the risk covered, the name of the insurer, and the policy's expiration date; (e) A list of the securities which have been on deposit as security for the money in the Bond Fund throughout the Fiscal Year and a list of the securities, if any, in which the Reserve Portion of the Bond Fund has been invested; and (f) The total number of metered and unmetered customers, if any, connected with the System at the end of the Fiscal Year. Expenses incurred in making the audits above referred to are to be regarded as maintenance and operating expenses of the System and paid as such. Copies of the aforesaid annual audit shall be furnished upon written request to the original purchasers and any subsequent Owners of the Bonds. Section 9.05 Further Covenants. The City hereby further covenants and agrees as follows: (a) That it has the lawful power to pledge the Net Revenues to the payment of the Bonds and has lawfully exercised said power under the Constitution and laws of the State of Texas; that the Previously Issued Bonds, the Bonds and the Additional Bonds, when issued, shall be ratably secured under said pledge in such manner that one bond shall have no preference over any other bond of said issues. (b) That, other than for the payment of the Previously Issued Bonds and the Bonds, the Net Revenues are not in any manner now pledged to the payment of any debt or obligation of the City or of the System on a parity with the Previously Issued Bonds and the Bonds. 30 HOU:3299318.4 (c) That, for so long as any of the Bonds or any interest thereon remain Outstanding, the City will not sell, lease or encumber the System or any substantial part thereof; provided, however, this covenant shall not be construed to prohibit the sale of such machinery, or other properties or equipment which has become obsolete or otherwise unsuited to the efficient operation of the System when other property of equal value has been substituted therefor, and, also, with the exception of the Additional Bonds expressly permitted by this Ordinance to be issued, it will not encumber the Net Revenues unless such encumbrance is made junior and subordinate to all of the provisions of this Ordinance. In the event the City sells the System, the City will use proceeds of such sale to provide for final payment of the Bonds, the Previously Issued Bonds, and any Additional Bonds. (d) That, it will cause to be rendered monthly to each customer receiving electric services a statement therefor and will not accept payment of less than all of any statement so rendered, using its power under existing ordinances and under all such ordinances to become effective in the future to enforce payment, to withhold service from such delinquent customers and to enforce and authorize reconnection charges. (e) That it will faithfully and punctually perform all duties with respect to the System required by the Constitution and laws of the State of Texas, including the making and collecting of reasonable and sufficient rates for services supplied by the System, and the segregation and application of the revenues of the System as required by the provisions of this Ordinance. (f) That no free service shall be provided by the System and to the extent the City or its departments or agencies utilize the services provided by the System, payment shall be made therefor at rates charged to others for similar service. Section 9.06 Other Representations and Covenants. (a) The City will faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions contained in this Ordinance; the City will promptly pay or cause to be paid the principal of, premium, if any, and interest on each Bond on the dates and at the places and manner prescribed in such Bond; and the City will, at the times and in the manner prescribed by this Ordinance, deposit or cause to be deposited the amounts of money specified by this Ordinance. (b) The City is duly authorized under the laws of the State of Texas to issue the Bonds; all action on its part for the creation and issuance of the Bonds has been duly and effectively taken; and the Bonds in the hands of the Owners thereof are and will be valid and enforceable obligations of the City in accordance with their terms. Section 9.07 Federal Income Tax Exclusion. (a) 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 such Bond 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, 31 HOU:3299318.4 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. (b) 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 after the Issue Date of any Bond and prior to the last stated maturity of the Bonds (i) exclusively own, operate, and possess all property the acquisition, construction, or improvement of which is to be financed directly or indirectly with Gross Proceeds of such Bond (including property financed with Gross Proceeds of the Refunded Obligations or notes or bonds refunded by the Refunded Obligations) 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 (ii) not directly or indirectly impose or accept any charge or other payment for use of Gross Proceeds of such Bond or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with such Gross Proceeds (including property financed with Gross Proceeds of the Refunded Obligations or notes or bonds refunded by the Refunded Obligations) other than taxes of general application and interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. (c) 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 such Bond 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 with Gross Proceeds of the Refunded Obligations or notes or bonds refunded by the Refunded Obligations) 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. (d) 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 such Bond, directly or indirectly invest Gross Proceeds of such Bond 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. (e) 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 32 HOU:3299318.4 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. (f) Information Report. The City shall timely file with the Secretary of the Treasury the information required by Section 149(e) of the Code with respect to the Bonds on such forms and in such place as such Secretary may prescribe. (g) 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: (i) 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, (ii) 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, (iii) 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 (ii) 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 (iv) exercise reasonable diligence to assure that no errors are made in the calculations required by paragraph (ii) and, if such error is made, to discover and promptly to correct such error within a reasonable amount of time thereafter, including payment to the United States of any interest and any penalty required by the Regulations. (h) 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 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. (i) Not Hedge Bonds. The City did not invest more than 50 percent of the Proceeds of any series of the Refunded Obligations (or, if applicable, the obligations refunded by the Refunded Obligations (the "Original Bonds")) in Nonpurpose Investments having a guaranteed 33 HOU:3299318.4 yield for four years or more. On the Issue Date Of the Refunded Obligations, or, if applicable, the Original Bonds, the City reasonably expected that at least 85 percent of the Net Sale Proceeds of each series of the Refunded Obligations, or, if applicable, the Original Bonds, would be used to carry out the governmental purpose of such series within three years after the Issue Date of such series. Section 9.08 Disposition of Project. The City covenants that the property financed or refinanced with the proceeds of the Bonds will not be sold or otherwise disposed in a transaction resulting in the receipt by the City of cash or other compensation, unless the City obtains an opinion of a nationally -recognized bond counsel substantially to the effect that such sale or other disposition will not adversely affect the tax-exempt status of the Bonds. For purposes of this Section, the portion of the property comprising personal property and disposed of in the ordinary course of business shall not be treated as a transaction resulting in the receipt of cash or other compensation. For purposes of this Section, the City shall not be obligated to comply with this covenant if it obtains an opinion of a nationally -recognized bond counsel to the effect that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest. ARTICLE X DEFAULT AND REMEDIES Section 10.01 Events of Default. Each of the following occurrences or events for the purpose of this Ordinance is hereby declared to be an Event of Default: (a) defaults in payments to be made to the Bond Fund as required by this Ordinance; (b) defaults in the observance or performance of any other of the covenants, conditions or obligations set forth in this Ordinance. Section 10.02 Remedies for Default. (a) Upon the happening of any Event of Default, then any Owner or an authorized representative thereof, including but not limited to, a trustee or trustees therefor, may proceed against the City for the purpose of protecting and enforcing the rights of the Owners under this Ordinance and shall be entitled to a writ of mandamus issued by a court of proper jurisdiction compelling and requiring the City Council and other officers of the City to observe and perform any covenant, condition or obligation prescribed in this Ordinance. (b) It is provided that all such proceedings shall be instituted and maintained for the equal benefit of all Owners of Bonds then Outstanding. Section 10.03 Remedies Not Exclusive. (a) No remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the Bonds or now or hereafter 34 HOU:3299318.4 existing at law or in equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to accelerate the debt evidenced by the Bonds shall not be available as a remedy under this Ordinance. (b) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power, or shall be construed to be a waiver of any such default or acquiescence therein, and every such right or power may be exercised from time to time and as often as may be deemed expedient. ARTICLE XI DISCHARGE Section 11.01 Discharge. The Bonds may be defeased, discharged or refunded in any manner permitted by applicable law. ARTICLE XII CONTINUING DISCLOSURE UNDERTAKING Section 12.01 Annual Reports. (a) The City shall provide annually to the MSRB, within six (6) 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, being the information referred to in Exhibit A hereto. Any financial statements so to be provided shall be (i) prepared in accordance with the accounting principles described in Exhibit A hereto, and (ii) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided and (iii) submitted through EMMA, in an electronic format with accompany identifying information, as prescribed by the MSRB. If the audit of such financial statements is not complete within such period, then the City shall provide notice that audited financial statements are not available and shall provide unaudited financial statements for the applicable fiscal year to the MSRB. The City shall provide audited financial statements for the applicable fiscal year to the MSRB, when and if audited financial statements become available. (b) 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. (c) The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific referenced 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 of filed with the SEC. 35 HOU:3299318.4 Section 12.02 Event Notices. (a) The City shall notify the MSRB, in a timely manner (not in excess of ten (10) business days after the occurrence of an event), of any of the following events with respect to the Bonds: (i) principal and interest payment delinquencies; (ii) nonpayment related defaults, if material; (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) adverse tax opinions, 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; (vii) modifications to rights of Owners, if material; (viii) redemption calls, if material, and tender offers; (ix) defeasances; (x) release, substitution, or sale of property securing repayment of the Bonds, if material; (xi) rating changes; (xii) bankruptcy, insolvency, receivership or similar event of the City; (xiii) 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; and (xiv) appointment of a successor Paying Agent/Registrar or change in the name of the Paying Agent/Registrar, if material. (b) As used in clause (xii) 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 of governmental authority has assumed jurisdiction over substantially all of 36 HOU:3299318.4 the assets or business of the City, or if jurisdiction has been assumed by leaving the City Council and official 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. (c) The City shall notify the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with Section 12.01 of this Ordinance by the time required by such Section. Section 12.03 Identifying Information. All documents provided to the MSRB pursuant to this Article shall be accompanied by identifying information as prescribed by the MSRB. Section 12.04 Limitations, Disclaimers and Amendments. (a) The City shall be obligated to observe and perform the covenants specified in this Article for so long as, but only for so long as, the City remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that the City in any event will give notice of any Bond calls and any defeasances that cause the City to be no longer an "obligated person." (b) The provisions of this Article are for the sole benefit of the Owners and beneficial owners of the Bonds, and nothing in this Article, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Article or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. (c) No default by the City in observing or performing its obligations under this Article shall constitute a breach of or default under the Ordinance for purposes of any other provisions of this Ordinance. 37 HOU:3299318.4 (d) Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. (e) The provisions of this Article may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (i) the provisions of this Article, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (ii) either (A) the Owners of a majority in aggregate principal amount (or any greater amount required by any other provisions of this Ordinance that authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (B) an entity or individual person that is unaffiliated with the City (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the Owners and beneficial owners of the Bonds. 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 12.01 an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in type of financial information or operating data so provided. ARTICLE XIII AMENDMENTS; ATTORNEY GENERAL MODIFICATION Section 13.01 Amendments. This Ordinance shall constitute a contract with the Owners, 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 consent of or notice to any Owners, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Owners, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the written consent of the Owners of the Bonds holding a majority in aggregate principal amount of the Bonds then outstanding, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Owners of outstanding Bonds, no such amendment, addition, or rescission shall (i) extend the time or times of payment of the principal of, premium, if any, 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, premium, if any, 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 Owners for consent to any such amendment, addition, or rescission. Section 13.02 Attorney General Modification. In order to obtain the approval of the Bonds by the Attorney General of the State of Texas, any provision of this Ordinance may be modified, altered or amended after the date of its adoption if required by the Attorney General in connection with the Attorney General's examination as to the legality of the Bonds and approval thereof in accordance with the applicable law. Such changes, if any, shall be provided to the City Secretary and the City Secretary shall insert such changes into this Ordinance as if approved on the date hereof. 38 HOU:3299318.4 ARTICLE XIV REDEMPTION OF REFUNDED OBLIGATIONS; APPROVAL OF ESCROW AGREEMENT; PURCHASE OF ESCROWED SECURITIES Section 14.01 Redemption of Refunded Obligations._ (a) The City hereby calls the Refunded Obligations for redemption prior to maturity on the dates and at the prices set forth in the Pricing Certificate. (b) The Authorized Officer is hereby authorized and directed to cause a copy of this Ordinance to be delivered to each paying agent/registrar for the Refunded Obligations, the delivery of which shall constitute notice of redemption and notice of defeasance to such paying agent/registrar. Section 14.02 Escrow Securities. The Mayor and the Authorized Officer, either or both, are hereby authorized to make necessary arrangements for the purchase of the Escrow Securities referenced in the Escrow Agreement, as may be necessary for the Escrow Fund and the application for the acquisition of the Escrow Securities is hereby approved and ratified. Following the deposits to the Escrow Fund as specified herein and in the Pricing Certificate, the Refunded Obligations shall be payable solely from and secured by such deposits. Section 14.03 Arrangements for Defeasance of Refunded Obligations. The Authorized Officer may execute and deliver an escrow agreement, a deposit agreement or a similar agreement (each an "Escrow Agreement") or 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 Authorized Officer determines may be necessary or convenient to carry out the intent and purpose of this Ordinance. Section 14.04 Notice of Redemption. Each paying agent/registrar for the Refunded Obligations is hereby authorized and directed to give notice of redemption and deposit with respect to the Refunded Obligations as required under the ordinance pursuant to which the Refunded Obligations were issued. Section 14.05 Effect of Refunding All of the Refunded Obligation Candidates. In the event that all of the Refunded Obligation Candidates are refunded in full as contemplated by this Ordinance, the following provisions of this Ordinance will no longer be of force and effect, and shall be superseded by the provisions of this Ordinance described below: (i) Subsection (b) of Section 7.03 shall be of no force and effect, and the provisions of subsections (d) through (k) of Section 7.03 shall apply to the Bonds and any Additional Bonds; 39 HOU:3299318.4 (ii) Subsections (a) and (b) of Section 7.06 shall be of no force and effect, and the provisions of subsection (d) of Section 7.06 shall apply to the Bonds and any Additional Bonds; (iii) Subdivision (i) of subsection (e) of Section 9.01 no longer will be required to be satisfied in connection with the issuance of Additional Bonds, and the condition precedent to the issuance of Additional Bonds set forth in subdivision (ii) of subsection (e) of Section 9.01 must be satisfied; and (iv) Subsection (a) of Section 9.03 shall no longer apply to the Similarly Secured Bonds, and subsection (b) of Section 9.03 shall apply to the Similarly Secured Bonds. ARTICLE XV EFFECTIVE IMMEDIATELY Section 15.01 Effective Immediately. Notwithstanding the provisions of the City Charter, this Ordinance shall become effective immediately upon its adoption at this meeting pursuant to Section 1201.028, Texas Government Code. [Signature page follows] 40 HOU:3299318.4 PRESENTED, FINALLY PASSED AND APPROVED, AND EFFECTIVE on the I Ith day of April, 2013, at a regular meeting of the City Council of the City of Lubbock, Texas. I - , " Azzlz ATTEST: N�CWWON, GLEMayor [SEAL] APPROVED AS TO CONTENT: By: ROY---- PAMELA MOON, CPA, Executive Director of Finance APPROVED AS TO FORM: By: _ JERK . KYLE, JR., Bond Counsel Signature Page for Ordinance I IOU:3299318.4 SCHEDULEI REFUNDED OBLIGATIONS CANDIDATES All outstanding maturities of the following obligations of the City: • Electric Light and Power System Revenue Bonds, Series 2001 Schedule I-1 HOU:3299318.4 EXHIBIT A DESCRIPTION OF ANNUAL DISCLOSURE OF FINANCIAL INFORMATION The following information is referred to in Article XII of this Ordinance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and included in the Appendix or other headings of the Official Statement referred to) below: 1. The portions of the financial statements of the City appended to the Official Statement as APPENDIX B, but for the most recently concluded fiscal year. 2. Statistical and financial data set forth in the Official Statement in "APPENDIX A - FINANCIAL INFORMATION REGARDING THE CITY" (Tables 1 - 12). Accounting Principles The accounting principles referred to in such Article XII are the accounting principles described in the notes to the City's financial statements appended to the Official Statement. Exhibit A-1 HOU:3299318.4 EXHIBIT B SALE PARAMETERS In accordance with Section 8.01(a) of the Ordinance, the following conditions with respect to the Bonds must be satisfied in order for the Authorized Officer to act on behalf of the City in selling and delivering the Bonds to the Underwriters: (a) the price to be paid for the Bonds shall be not less than 90% of the aggregate principal amount of the Bonds; (b) the Bonds shall not bear interest at a rate greater than the maximum rate allowed by Chapter 1204, Texas Government Code, as amended; (c) the aggregate principal amount of the Bonds shall produce proceeds in an amount sufficient to fiend the purposes described in Section 3.01 and such aggregate principal amount shall not exceed the maximum amount authorized in Section 3.01; (d) the refunding of the Refunded Obligations shall result in positive gross debt service savings and net present value savings of at least five percent (5%); (e) the maximum maturity for the Bonds shall not exceed twenty-one (21) years from the date of their delivery; and (f) the Bonds to be issued, prior to delivery, must have been rated by a nationally recognized rating agency for municipal securities in one of the four highest rating categories for long term obligations. Exhibit B-1 HOU:3299318.4 EXHIBIT C FORM OF THE BONDS The form of the Bonds shall be generally in the form set forth below, including the form of the Registration Certificate of the Comptroller of Public Accounts of the State of Texas to accompany the initially delivered Bonds, the form of Certificate of the Paying Agent/Registrar and the form of Assignment appearing on the Bonds shall be substantially as follows, provided however, that the substantially final form of the Bonds shall be set forth in or attached to the Pricing Certificate and shall incorporate and reflect the final terms of the Bonds set forth in the Pricing Certificate: (a) Form of Bond. REGISTERED REGISTERED No. $ United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS ELECTRIC LIGHT AND POWER SYSTEM REVENUE [REFUNDING AND IMPROVEMENT BOND] SERIES 2013 INTEREST RATE: MATURITY DATE: BOND DATE: CUSIP NUMBER: % I - The City of Lubbock (the "City"), in the County of Lubbock, State of Texas, for value received, hereby promises to pay to or registered assigns, but solely from the sources and in the manner hereinafter provided, on the Maturity Date specified above, the sum of DOLLARS unless this Bond shall have been sooner called for redemption and the payment of the principal hereof shall have been paid or provided for, and to pay interest on such principal amount from the later of the Bond Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or 1 Information to be inserted from Pricing Certificate. Exhibit C-1 HOU:3299318.4 provided for, at the per annum rate of interest specified above, computed on the basis of a 360- day year of twelve 30-day months, such interest to be paid semiannually on April 15 and October 15 of each year, commencing 2 All capitalized terms used herein but not defined shall have the meaning assigned to them in the Ordinance (defined below). The principal of this Bond shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Bond at the corporate office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of New York Mellon Trust Company, N.A., the initial Paying Agent/Registrar, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Bond is payable by check dated as of the interest payment date, and mailed by the Paying Agent/Registrar to the registered owner at the address shown on the Register kept by the Paying Agent/Registrar, or by such other customary banking arrangements acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expense of such other banking arrangement. For the purpose of the payment of interest on this Bond, the registered owner shall be the person in whose name this Bond is registered at the close of business on the "Record Date," which shall be the last Business Day of the month next preceding an Interest Payment Date. If the date for the payment of the principal of or interest on this Bond shall be a Saturday, Sunday, legal holiday or day on which banking institutions in the city where the Paying Agent/Registrar is located are required or authorized by law or executive order to close, the date for such payment shall be the next succeeding day that is not a Saturday, Sunday, legal holiday or day on which banking institutions are required or authorized to close and payment on such date shall for all purposes be deemed to have been made on the original date payment was due. This Bond is one of a series of fully registered bonds specified in the title hereof issued in the aggregate principal amount of $ 3 (herein referred to as the "Bonds"), issued pursuant to the authority provided by Chapters 1207, 1371 and 1502, Texas Government Code, as amended, and a certain ordinance of the City (the "Ordinance"), for the purposes of (i) acquiring, purchasing, constructing, improving, renovating, enlarging, and/or equipping property, buildings, structures, facilities, and/or related infrastructure for the City's Electric Light and Power System, (ii) refunding certain outstanding obligations of the City, and (iii) paying the costs of issuing the Bonds. The Bonds, together with certain outstanding parity lien revenue bonds of the City, are secured by and payable solely from a first lien on and pledge of the Net Revenues of the System, as provided or incorporated by reference in the Ordinance. The Bonds constitute special obligations of the City payable solely from the sources and in the manner set forth herein and in the Ordinance and not from any other revenues, funds or assets of the City. ' Information to be inserted from Pricing Certificate. 3 Information to be inserted from Pricing Certificate. Exhibit C-2 HOU:3299318.4 The City has reserved the right, subject to the restrictions stated or incorporated by reference in the Ordinance, to issue additional parity revenue bonds that may be secured in the same manner and on a parity with the Bonds and the Previously Issued Bonds. [The City has reserved the option to redeem the Bonds maturing on or after April 15, 20_, before their respective scheduled maturities in whole or in part on April 15, 20_, or on any date thereafter, at a price equal to the principal amount of the Bonds so called for redemption plus accrued interest to the date fixed for redemption. If less than all of the Bonds are to be redeemed, the City shall determine the maturity or maturities and the amounts thereof to be redeemed and shall direct the Paying Agent/Registrar to call by lot the Bonds, or portion thereof, within such maturity and in such principal amounts, for redemption.]4 [Bonds maturing on April 15, 20_ (the "Term Bonds") are subject to mandatory sinking fund redemption prior to their scheduled maturity, and will be redeemed by the City, in part at a redemption price equal to the principal amount thereof, without premium, plus interest accrued to the redemption date, on the dates and in the principal amounts shown in the following schedule: Term Bonds Maturing April 15, 20 Redemption Date Principal Amount April 15, 20_ April 15, 20_ April 15, 20_ (maturity) The Paying Agent/Registrar will select by lot or by any other customary method that results in a random selection 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 sinking fund redemption provisions hereof shall be reduced, at the option of the City, by the principal amount of any Term Bonds which, at least 45 days prior to the mandatory sinking fund redemption date (i) shall have been acquired by the City at a price not exceeding the principal amount of such Term Bonds plus accrued interest to the date Qf purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, or (ii) shall have been redeemed pursuant to the optional redemption provisions hereof and not previously credited to a mandatory sinking fund redemption.]5 Notice of such redemption or redemptions shall be given by first class mail, postage prepaid, not less than 30 days before the date fixed for redemption, to the registered owner of each of the Bonds to be redeemed in whole or in part. Subject to the right of the City to give a conditional notice of redemption with respect to an optional redemption, as described below, d Insert optional redemption provisions, if any, and revise to conform to the Pricing Certificate. 5 Insert mandatory sinking fund redemption provisions, if any, and revise as necessary to conform to the Pricing Certificate. Exhibit C-3 HOU:3299318.4 notice having been so given, the Bonds or portions thereof designated for redemption shall become due and payable on the redemption date specified in such notice; from and after such date, notwithstanding that any of the Bonds or portions thereof so called for redemption shall not have been surrendered for payment, interest on such Bonds or portions thereof shall cease to accrue. Notice of such redemption or redemptions shall be given by first class mail, postage prepaid, not less than thirty (30) days before the date fixed for redemption, to the registered owner of each of the Bonds to be redeemed in whole or in part. In the Ordinance, the City reserves the right in the case of an optional redemption to give notice of its election or direction to redeem Bonds conditioned upon the occurrence of subsequent events. Such notice may state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption date or (ii) that the City retains the right to rescind such notice at any time prior to the scheduled redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and redemption shall be of no effect if such moneys and/or authorized securities are not so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice of redemption to the affected owners. Any Bonds subject to conditional redemption where redemption has been rescinded shall remain Outstanding, and the rescission shall not constitute an event of default. Further, in the case of a conditional redemption, the failure of the City to make moneys and/or authorized securities available in part or in whole on or before the redemption date shall not constitute an event of default. As provided in the Ordinance and subject to certain limitations therein set forth, this Bond is transferable upon surrender of this Bond for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar; thereupon, one or more new fully registered Bonds of the same stated maturity, of authorized denominations, bearing the same rate of interest, and for the same aggregate principal amount will be issued to the designated transferee or transferees. Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer or exchange any Bond called for redemption where such redemption is scheduled to occur within 45 calendar days of the transfer or exchange date; provided, however, such limitation shall not be applicable to an exchange by the registered owner of the uncalled principal balance of a Bond. The City, the Paying Agent/Registrar, and any other person may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except interest shall be paid to the person in whose name this Bond is registered on the Record Date) and for all other purposes, whether or not this Bond be overdue, and neither the City nor the Paying Agent/Registrar, nor any such agent shall be affected by notice to the contrary. IT IS HEREBY CERTIFIED AND RECITED 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 be done precedent to or in the issuance and delivery of this Bond have been performed, Exhibit C-4 HOU:3299318.4 existed, and been done in accordance with law; that the Bonds do not exceed any constitutional or statutory limitation; and that provision has been made for the payment of the principal of and interest on the Bonds by irrevocably pledging the net revenues of the System, as hereinabove recited. The registered owner hereof shall never have the right to demand payment of this Bond out of any funds raised or to be raised by taxation. IN WITNESS WHEREOF, the City has caused this Bond to be executed in its name by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the City Secretary, and the official seal of the City has been duly impressed or placed in facsimile on this Bond. Mayor,,City of Lubbock, Texas City S cretary, City of Lubbo xas [SEAL] (b) Form of Comptroller's Registration Certificate. The following Comptroller's Registration Certificate may be deleted from the definitive Bonds if such Certificate on the initial Bond is fully executed. OFFICE OF THE COMPTROLLER § OF PUBLIC ACCOUNTS § REGISTER NO. OF THE STATE OF TEXAS I hereby certify that there is on file and of record in my office a certificate of the Attorney General of the State of Texas to the effect that this Bond has been examined by him as required by law, that he finds that it has been issued in conformity with the Constitu lion and laws of the State of Texas, and that it is a valid and binding special obligation of the City of Lubbock, Texas, payable from the revenues pledged to its payment by and in the ordinance authorizing same and that said bond has this day been registered by me. Witness my hand and seal of office at Austin, Texas, Comptroller of Public Accounts of the State of Texas [SEAL] Exhibit C-5 HOU:3299318.4 (c) Form of Certificate of Paying Agent/Registrar. The following Certificate of Paying Agent/Registrar may be deleted from the Initial Bond if the Comptroller's Registration Certificate appears thereon. CERTIFICATE OF PAYING AGENT/REGISTRAR It is hereby certified that this Bond has been issued under the provisions of the Ordinance described on this Bond; and that this Bond has been issued in conversion of and exchange for or replacement of a bond, bonds, or portion of a bond or bonds of an issue which was originally approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas as shown in the records kept by the undersigned. as Paying Agent/Registrar By: Dated: Authorized Representative (d) Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto (print or typewrite name, address and Zip Code of transferee): (Social Security or other identifying number: ) the within Bond and all rights hereunder and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration hereof, with full power of substitution in the premises. Dated: Signature Guaranteed By: Authorized Signatory NOTICE: The signature on this Assignment must correspond with the name of the registered owner as it appears on the face of the within Bond in every particular and must be guaranteed in a manner acceptable to the Paying Agent/Registrar. (e) The Initial Bond shall be in the form set forth in subsections (a), (b) and (d) of this Section, except for the following alterations: Exhibit C-6 HOU:3299318.4 (i) immediately under the name of the Bond (which name shall be set forth in the Pricing Certificate), the headings "INTEREST RATE" and "MATURITY DATE" shall be completed with the words "As shown below"; (ii) in the first paragraph of the Bond, the words "on the Maturity Date specified above" shall be deleted and the following will be inserted: "on April 15 in each of the years, in the principal installments and bearing interest at the per annum rates in accordance with the following schedule: Year Principal Installment Interest Rate (Information to be inserted from the Pricing Certificate) (iii) the Initial Bond shall be numbered T-1. Exhibit C-7 HOU:3299318.4 CITY OF LUBBOCK Note: PLEASE USE BLACK INK. PLEASE DO NOT LET YOUR SIGNATURE TOUCH THE PRINT ON THIS PAGE. DO NOT PUT THE SEAL OVER ANY PRINT ON THIS PAGE. SIGNATURES: Mayor —> City Secretary —> SEAL -IOU:3305254.1 Ordinance No. 2013-00040 The Attorney General of Texas Public Finance Section William P. Clements Building, 71h Floor 300 West 15th Street Austin, Texas 78701 April 11, 2013 The Comptroller of Public Accounts Public Finance Division I I I East 17th Street Austin, Texas 78701 Re: City of Lubbock, Texas - Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2013; General Obligation Refunding and Improvement Bonds, Series 2013; and General Obligation Refunding Bonds, Taxable Series 2013 (collectively, the "Obligations") Ladies and Gentlemen: The captioned Obligations are being sent to the Office of the Attorney General, and it is requested that such office examine and approve the Obligations in accordance with law. After such approval, it is requested that the Attorney General deliver the Obligations to the Comptroller of Public Accounts for registration. Enclosed with the Obligations is a signed but undated copy of the GENERAL CERTIFICATE (the "Certificate") relating to the Obligations. The Attorney General is hereby authorized and directed to date the Certificate concurrently with the date of approval of the Obligations. If any litigation or contest should develop pertaining to the Obligations or any other matters covered by said Certificate, the undersigned will notify the Attorney General thereof immediately by telephone. With this assurance the Attorney General can rely on the absence of any such litigation or contest, and on the veracity and currency of said Certificate, at the time the Attorney General approves the Obligations unless the Attorney General is notified otherwise as aforesaid. The Comptroller is hereby requested to register the Obligations as required by law and the proceedings authorizing the Obligations. After such registration, the Comptroller is hereby authorized and directed to deliver the Obligations, together with three copies of each of the Attorney General's Approving Opinion and Comptroller's Certificate for the Obligations, to Jerry Kyle, Jr., Andrews Kurth LLP, I I I Congress Avenue, Austin, TX 78701. CITY OF LUBBOCK By: Mayor I IOU:3305248.1 Ordinance No. 2013-00040 PAYING AGENT/REGISTRAR AGREEMENT between CITY OF LUBBOCK, TEXAS and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. Pertaining to City of Lubbock, Texas Tax and Waterworks System Surplus Revenue Certificates of Obligation Series 2013 Dated as of April 11, 2013 I-IOU:3297094.1 TABLE OF CONTENTS Page ARTICLE I APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR.................I Section1.01. Appointment...................................................................................................1 Section1.02. Compensation . ................................................................................................ I ARTICLE II DEFINITIONS...........................................................................................................2 Section2.01. Definitions.......................................................................................................2 ARTICLEIII PAYING AGENT.....................................................................................................3 Section 3.01. Duties of Paying Agent...................................................................................3 Section3.02. Payment Dates................................................................................................4 Section 3.03. Merger, Conversion, Consolidation, or Succession........................................4 ARTICLEIV REGISTRAR............................................................................................................4 Section 4.01. Transfer and Exchange...................................................................................4 Section 4.02. The Certificates...............................................................................................4 Section4.03. Form of Register.............................................................................................5 Section4.04. List of Owners.................................................................................................5 Section 4.05. Cancellation of Certificates.............................................................................5 Section 4.06. Mutilated, Destroyed, Lost, or Stolen Certificates.........................................5 Section 4.07. Transaction Information to Issuer...................................................................6 ARTICLEV THE BANK................................................................................................................6 Section5.01. Duties of Bank................................................................................................6 Section 5.02. Reliance on Documents, Etc...........................................................................7 Section 5.03. Recitals of Issuer.............................................................................................8 Section 5.04. May Hold Certificates.....................................................................................8 Section 5.05. Money Held by Bank......................................................................................8 Section5.06. Indemnification...............................................................................................8 Section5.07. Interpleader.....................................................................................................9 ARTICLE VI MISCELLANEOUS PROVISIONS.........................................................................9 Section6.01. Amendment.....................................................................................................9 Section6.02. Assignment.....................................................................................................9 Section6.03. Notices............................................................................................................9 Section 6.04. Effect of Headings..........................................................................................9 Section 6.05. Successors and Assigns...................................................................................9 Section6.06. Separability.....................................................................................................9 Section 6.07. Benefits of Agreement..................................................................................10 Section 6.08. Entire Agreement..........................................................................................10 Section6.09. Counterparts..................................................................................................10 Section6.10. Termination...................................................................................................10 Section6.11. Governing Law.............................................................................................10 (i) I IOU:3297094.1 PAYING AGENT/REGISTRAR AGREEMENT THIS PAYING AGENT/REGISTRAR AGREEMENT (the or this "Agreement"), dated as of April 11, 2013, is by and between CITY OF LUBBOCK, TEXAS (the "Issuer"), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (the "Bank"), a national banking association. WHEREAS, the Issuer has duly authorized and provided for the issuance of its Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2013 (the "Certificates"), dated April 15, 2013, to be issued as registered securities without coupons; and WHEREAS, all things necessary to make the Certificates the valid obligations of the Issuer, in accordance with their terms, will be taken upon the issuance and delivery thereof, and WHEREAS, the Issuer is desirous that the Bank act as the Paying Agent of the Issuer in paying the principal, redemption premium, if any, and interest on the Certificates, in accordance with the teens thereof, and that the Bank act as Registrar for the Certificates; and WHEREAS, the Issuer has duly authorized the execution and delivery of this Agreement, and all things necessary to make this Agreement the valid agreement of the Issuer, in accordance with its terms, have been done; NOW, THEREFORE, it is mutually agreed as follows: ARTICLE I APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 1.01. Appointment. (a) The Issuer hereby appoints the Bank to act as Paying Agent with respect to the Certificates in paying to the Owners of the Certificates the principal, redemption premium, if any, and interest on all or any of the Certificates. (b) The Issuer hereby appoints the Bank as Registrar with respect to the Certificates. (c) The Bank hereby accepts its appointment, and agrees to act as, the Paying Agent and Registrar. Section 1.02. Compensation. (a) As compensation for the Bank's services as Paying Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in Annex A attached hereto for the first year of this Agreement, or such part thereof as this Agreement shall be in effect, and thereafter while this Agreement is in effect, the fees and amounts set forth in the Bank's current fee schedule then in effect for services as Paying Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the following Fiscal Year. FIOU:3297094.1 (b) In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable expenses, disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof, including the reasonable compensation and the expenses and disbursements of its agents and counsel. ARTICLE II DEFINITIONS Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the following terms have the following meanings when used in this Agreement: "Bank" means The Bank of New York Mellon Trust Company, N.A. "Bank Office" means the Bank's office in Dallas, Texas. The Bank will notify the Issuer in writing of any change in location of the Bank Office. "Business Day" means any day which is not a Saturday, Sunday or legal holiday or day on which banking institutions in New York, New York are required or authorized by law or executive order to close. "Certificate" or "Certificates" means any or all of the Issuer's Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2013, dated April 15, 2013. "Certificate Ordinance" means the ordinance of the City Council of the Issuer authorizing the issuance and delivery of the Certificates. "Financial Advisor" means RBC Capital Markets, LLC. "Fiscal Year" means the 12 month period ending September 30th of each year. "Issuer" means the City of Lubbock, Texas. "Issuer Request" and "Issuer Order" means a written request or order signed in the name of the Issuer by the Mayor of the Issuer, or any other authorized representative of the Issuer and delivered to the Bank. "Legal Holiday" means a day on which the Bank is required or authorized by applicable law to be closed. "Owner" means the Person in whose name a Certificate is registered in the Register. "Paying Agent" means the Bank when it is performing the functions associated with the terms in this Agreement. I-Iou:3297094. l "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, or government or any agency or political subdivision of a government. "Predecessor Certificates" of any particular Certificate means every previous Certificate evidencing all or a portion of the same obligation as that evidenced by such particular Certificate (and, for the purposes of this definition, any Certificate registered and delivered under Section 4.06 in lieu of a mutilated, lost, destroyed or stolen Certificate shall be deemed to evidence the same obligation as the mutilated, lost, destroyed or stolen Certificate). "Record Date" means the last Business Day of the month next preceding an interest payment date established by the Certificate Ordinance. "Register" means a register in which the Issuer shall provide for the registration and transfer of Certificates. "Responsible Officer" when used with respect to the Bank means the Chairman or Vice Chairman of the Board of Directors, the Chairman or Vice Chairman of the Executive Committee of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Stated Maturity" means the date or dates specified in the Certificate Ordinance as the fixed date on which the principal of the Certificates is due and payable or the date fixed in accordance with the terms of the Certificate Ordinance for redemption of the Certificates, or any portion thereof, prior to the fixed maturity date. ARTICLE III PAYING AGENT Section 3.01. Duties of Paying Agent. (a) The Bank, as Paying Agent and on behalf of the Issuer, shall pay to the Owner, at the Stated Maturity and upon the surrender of the Certificate or Certificates so maturing at the Bank Office, the principal amount of the Certificate or Certificates then maturing, and redemption premium, if any, provided that the Bank shall have been provided by or on behalf of the Issuer adequate funds to make such payment. (b) The Bank, as Paying Agent and on behalf of the Issuer, shall pay interest when due on the Certificates to each Owner of the Certificates (or their Predecessor Certificates) as shown in the Register at the close of business on the Record Date, provided that the Bank shall have been provided by or on behalf of the Issuer adequate funds to make such payments; such payments shall be made by computing the amount of interest to be paid each Owner, preparing I-IOU:3297094.1 the checks, and mailing the checks on each interest payment date addressed to each Owner's address as it appears in the Register on the Record Date. Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal of, redemption premium, if any, and interest on the Certificates at the dates specified in the Certificate Ordinance. Section 3.03. Merger Conversion, Consolidation, or Succession. Any corporation into which the Paying Agent 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 Paying Agent shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Paying Agent shall be the successor of the Paying Agent hereunder without the execution or filing of any paper or any further act on the part of either of the parties hereto. ARTICLE IV REGISTRAR Section 4.01. Transfer and Exchange. (a) The Issuer shall keep the Register at the Bank Office, and subject to such reasonable written regulations as the Issuer may prescribe, which regulations shall be furnished to the Bank herewith or subsequent hereto by Issuer Order, the Issuer shall provide for the registration and transfer of the Certificates. The Bank is hereby appointed "Registrar" for the purpose of registering and transferring the Certificates as herein provided. The Bank agrees to maintain the Register while it is Registrar. The Bank agrees to at all times maintain a copy of the Register at its office located in the State of Texas. (b) The Bank as Registrar hereby agrees that at any time while any Certificate is outstanding, the Owner may deliver such Certificate to the Registrar for transfer or exchange, accompanied by instructions from the Owner, or the duly authorized designee of the Owner, designating the persons, the maturities, and the principal amounts to and in which such Certificate is to be transferred and the addresses of such persons; the Registrar shall thereupon, within not more than three (3) business days, register and deliver such Certificate or Certificates as provided in such instructions. The provisions of the Certificate Ordinance shall control the procedures for transfer or exchange set forth herein to the extent such procedures are in conflict with the provisions of the Certificate Ordinance. (c) Every Certificate surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, the signature on which has been guaranteed in a manner satisfactory to the Bank, duly executed by the Owner thereof or his attorney duly authorized in writing. (d) The Bank may request any supporting documentation it feels necessary to effect a re -registration. Section 4.02. The Certificates. The Issuer shall provide an adequate inventory of unregistered Certificates to facilitate transfers. The Bank covenants that it will maintain the me I-IOU:3297094.1 unregistered Certificates in safekeeping and will use reasonable care in maintaining such unregistered Certificates in safekeeping, which shall be not less than the care it maintains for debt securities of other governments or corporations for which it serves as registrar, or which it maintains for its own securities. Section 4.03. Form of Register. (a) The Bank as Registrar will maintain the records of the Register in accordance with the Bank's general practices and procedures in effect from time to time. The Bank shall not be obligated to maintain such Register in any form other than a form which the Bank has currently available and currently utilizes at the time. (b) The Register may be maintained in written form or in any other form capable of being converted into written form within a reasonable time. Section 4.04. List of Owners. (a) The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the cost, if any, of reproduction, a copy of the information contained in the Register. The Issuer may also inspect the information in the Register 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. (b) The Bank will not release or disclose the content of the Register 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 or court order or as otherwise required by law. Upon receipt of a subpoena or court order the Bank will notify the Issuer so that the Issuer may contest the subpoena or court order. Section 4.05. Cancellation of Certificates. All Certificates 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 Certificates previously certified or registered and delivered which the Issuer may have acquired in any manner whatsoever, and all Certificates so delivered shall be promptly cancelled by the Bank. All cancelled Certificates held by the Bank shall be disposed of pursuant to the Securities Exchange Act of 1934, as amended. Section 4.06. Mutilated Destroyed Lost, or Stolen Certificates. (a) Subject to the provisions of this Section 4.06, the Issuer hereby instructs the Bank to deliver fully registered Certificates in exchange for or in lieu of mutilated, destroyed, lost, or stolen Certificates as long as the same does not result in an over -issuance. (b) If (i) any mutilated Certificate is surrendered to the Bank, or the Issuer and the Bank receives evidence to their satisfaction of the destruction, loss, or theft of any Certificate, and (ii) there is delivered to the Issuer and the Bank such security or indemnity as may be required by the Bank to save and hold each of them harmless, then in the absence of notice to the -5- I IOU:3297094.1 Issuer or the Bank that such Certificate has been acquired by a bona fide purchaser, the Issuer shall execute, and upon its request the Bank shall register and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost, or stolen Certificate, a new Certificate of the same stated maturity and of like tenor and principal amount bearing a number not contemporaneously outstanding. (c) Every new Certificate issued pursuant to this Section in lieu of any mutilated, destroyed, lost, or stolen Certificate shall constitute a replacement of the prior obligation of the Issuer, whether or not the mutilated, destroyed, lost, or stolen Certificate shall be at any time enforceable by anyone, and shall be entitled to all the benefits of the Certificate Ordinance equally and ratably with all other outstanding Certificates. (d) Upon the satisfaction of the Bank and the Issuer that a Certificate has been mutilated, destroyed, lost, or stolen, and upon receipt by the Bank and the Issuer of such indemnity or security as they may require, the Bank shall cancel the Certificate number on the Certificate registered with a notation in the Register that said Certificate has been mutilated, destroyed, lost, or stolen; and a new Certificate shall be issued of the same series and of like tenor and principal amount bearing a number, according to the Register, not contemporaneously outstanding. (e) The Bank may charge the Owner the Bank's fees and expenses in connection with issuing a new Certificate in lieu of or exchange for a mutilated, destroyed, lost, or stolen Certificate. (f) The Issuer hereby accepts the Bank's current blanket Certificate for lost, stolen, or destroyed Certificates and any future substitute blanket Certificate for lost, stolen, or destroyed Certificates that the Bank may arrange, and agrees that the coverage under any such blanket Certificate is acceptable to it and meets the Issuer's requirements as to security or indemnity. The Bank need not notify the Issuer of any changes in the security or other company giving such Certificate or the terms of any such Certificate, provided that the amount of such Certificate is not reduced below the amount of the Certificate on the date of execution of this Agreement. The blanket Certificate then utilized by the Bank for lost, stolen, or destroyed Certificates by the Bank is available for inspection by the Issuer on request. Section 4.07. Transaction Information to Issuer. The Bank will, within a reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to the Certificates it has paid pursuant to Section 3.01; Certificates it has delivered upon the transfer or exchange of any Certificates pursuant to Section 4.01; and Certificates it has delivered in exchange for or in lieu of mutilated, destroyed, lost, or stolen Certificates pursuant to Section 4.06 of this Agreement. ARTICLE V THE BANK Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein and in accordance with the Certificate Ordinance and agrees to use reasonable care in the 0 I IOU:3297094.1 performance thereof. The Bank hereby agrees to use the funds deposited with it for payment of the principal of, redemption premium, if any, and interest on the Certificates to pay the Certificates as the same shall become due and further agrees to establish and maintain all accounts and funds as may be required for the Bank to function as Paying Agent. Section 5.02. 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. (b) The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent facts. (c) No provisions of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not assured to it. (d) The Bank may rely and shall be protected in acting or refraining from acting upon any ordinance, resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, certificate, 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 Certificates, but is protected in acting upon receipt of Certificates containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Owner or an attorney -in -fact of the Owner. The Bank shall not be bound to make any investigation into the facts or matters stated in an ordinance, resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, certificate, note, security, or other paper or document supplied by Issuer. (e) The Bank is also authorized to transfer funds relating to the closing and initial delivery of the Certificates in the manner disclosed in the closing memorandum as prepared by the Issuer's Financial Advisor or other agent. The Bank may act on a facsimile or e-mail transmission of the closing memorandum acknowledged by the Financial Advisor or the Issuer as the final closing memorandum. 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. (f) The Bank may consult with counsel, and the written advice of such counsel or any opinion of counsel 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. (g) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys of the Bank. -7- 1 IOU:3297094.1 Section 5.03. Recitals of Issuer. (a) The recitals contained herein and in the Certificates shall be taken as the statements of the Issuer, and the Bank assumes no responsibility for their correctness. (b) The Bank shall in no event be liable to the Issuer, any Owner or Owners, or any other Person for any amount due on any Certificate except as otherwise expressly provided herein with respect to the liability of the Bank for its duties under this Agreement. Section 5.04. May Hold Certificates. The Bank, in its individual or any other capacity, may become the Owner or pledgee of Certificates and may otherwise deal with the Issuer with the same rights it would have if it were not the Paying Agent/Registrar, or any other agent. Section 5.05. Money Held by Bank. (a) Money held by the Bank hereunder need not be segregated from any other funds provided appropriate accounts are maintained. (b) The Bank shall be under no liability for interest on any money received by it hereunder. (c) Subject to the provisions of Title 6, Texas Property Code, as amended, any money deposited with the Bank for the payment of the principal, redemption premium, if any, or interest on any Certificate and remaining unclaimed for three years after final maturity of the Certificate has become due and payable will be paid by the Bank to the Issuer, and the Owner of such Certificate shall thereafter look only to the Issuer for payment thereof, and all liability of the Bank with respect to such monies shall thereupon cease. (d) The Bank will comply with the reporting requirements of Chapter 74 of the Texas Property Code, as amended. (e) The Bank shall deposit any moneys received from the Issuer into a trust account to be held in a paying agent capacity for the payment of the Certificates, with such moneys in the account that exceed the deposit insurance, available to the Issuer, provided 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 and to the extent practicable under the laws of the United States of America to secure and be pledged as collateral for trust accounts until the principal and interest on the Certificates have been presented for payment and paid to the owner thereof. Payments made from such trust account shall be made by check drawn on such trust account unless the owner of such Certificates shall, at its own expense and risk, request such other medium of payment. Section 5.06. Indemnification. To the extent permitted by law, the Issuer agrees to indemnify the Bank, its officers, directors, employees, and agents for, and hold them harmless against, any loss, liability, or expense incurred without negligence or bad faith on their part arising out of or in connection with its acceptance or administration of the Bank's duties hereunder, and under Article V of the Certificate Ordinance, including the cost and expense -S- 1 IOU:3297094.1 (including its counsel fees) of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement. Section 5.07. Interpleader. The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim, demands or controversy over its persons as well as funds on deposit in a court of competent jurisdiction within the State of Texas; waive personal service of any process; and agree that service of process by certified or registered mail, return receipt requested, to the address set forth in 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 within the State of Texas to determine the rights of any person claiming any interest herein. ARTICLE VI MISCELLANEOUS PROVISIONS Section 6.01. Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereof. Section 6.02. Assignment. This Agreement may not be assigned by either party without the prior written consent of the other. Section 6.03. 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 below: (a) if to the Issuer: City of Lubbock, Texas 1625 13th Street Lubbock, Texas 79457 Attention: Executive Director of Finance if to the Bank: The Bank of New York Mellon Trust Company, N.A. 2001 Bryan Street, 11 th Floor Dallas, Texas 75201 Section 6.04. Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. Section 6.05. Successors and Assigns. All covenants and agreements herein by the Issuer shall bind its successors and assigns, whether so expressed or not. Section 6.06. Separability. If any provision herein shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. -9- I IOU:3297094.1 Section 6.07. 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 6.08. Entire Agreement. This Agreement and the Certificate Ordinance constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent/Registrar, and if any conflict exists between this Agreement and the Certificate Ordinance, the Certificate Ordinance shall govern. Section 6.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. Section 6.10. Termination. (a) This Agreement will terminate on the date of final payment by the Bank issuing its checks for the final payment of principal, redemption premium, if any, and interest of the Certificates. (b) This Agreement may be earlier terminated upon sixty (60) days written notice by either party; provided, that, no termination shall be effective until a successor has been appointed by the Issuer and has accepted the duties imposed by this Agreement. A resigning Paying Agent/Registrar may petition any court of competent jurisdiction for the appointment of a successor Paying Agent/Registrar if an instrument of acceptance by a successor Paying Agent/Registrar has not been delivered to the resigning Paying Agent/Registrar within sixty (60) days after the giving of notice of resignation. (c) The provisions of Section 1.02 and of Article Five shall survive and remain in full force and effect following the termination of this Agreement. Section 6.11. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas. [Signature Page to Follow] -10- I IOU:3297094.1 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above. CITY OF LUBBOCK, TEXAS By: Glen o ert n, Mayor ATTEST: Rebe ca Garza, City Secretak') [Signature page for Paying Agent/Registrar Agreement for Tax and Waterworks System Saupkis Revenue Certificates of Obligation] I IOU:3297094.1 THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. By: Title: [Signature page for Paying Agent/Registrar Agreement for Tax and Waterworks System Sur plus Revenue Certificates of Obligation] 1 IOU:3297094.1 ANNEX "A" SCHEDULE OF FEES FOR SERVICE AS PAYING AGENT/REGISTRAR I IOU:3297094.1 [LOGO] BNY MELLON CORPORATE TRUST 2001 Bryan — 11 th Floor Dallas, TX 75201 1 IOU:3297094.1 Ordinance No. 2013-00040 CERTIFICATE PURSUANT TO PURCHASE CONTRACT I, the undersigned official of the City of Lubbock, Texas (the "City"), acting in my official capacity, in connection with the issuance and delivery by the City of Lubbock, Texas, of its Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2013 (the "Certificates"); City of Lubbock, Texas, General Obligation Refunding and Improvement Bonds, Series 2013 (the "Tax -Exempt Bonds"); and City of Lubbock, Texas, General Obligation Refunding Bonds, Taxable Series 2013 (the "Taxable Bonds" and, together with the Certificates and the Tax -Exempt Bonds, the "Obligations"), hereby certify that: 1. This certificate is delivered pursuant to the Purchase Contract relating to the Obligations, dated April _, 2013 (the "Purchase Contract"), between the City and First Southwest Company, Citigroup Global Markets, Inc., and Raymond James and Associates, Inc. (collectively, the "Underwriters"). Capitalized words used herein as defined terms and not otherwise defined herein have the respective meanings assigned to them in the Purchase Contract. 2. The representations and warranties of the City contained in the Purchase Contract are true and correct in all material respects on and as of the date hereof as though made on and as of the date hereof. 3. Except to the extent disclosed in the Official Statement, no litigation is pending or, to my knowledge, threatened in any court to restrain or enjoin the issuance or delivery of the Obligations, or collection or application of the ad valorem taxes or, in the case of the Certificates, the Pledged Revenues pledged or to be pledged, to pay the principal of and interest on the Obligations, or the pledge thereof, or in any way contesting or affecting the validity of the Obligations or the City Documents, or contesting the powers of the City or the authorization of the Obligations or the City Documents, or contesting in any way the accuracy, completeness or fairness of the Official Statement. 4. To the best of my knowledge, no event affecting the City has occurred since the date of the Official Statement that should be disclosed in the Official Statement for the purpose for which it is to be used or that it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect. 5. There has not been any material and adverse change in the affairs or financial condition of the City since September 30, 2012, the latest date as to which audited financial information is available. [Execution Page Follows.] I-IOU:3297089.1 DATED: , 2013. City Manager City of Lubbock, Texas Signature Page for Certificate Pursuant to Purchase Contract 1 IOU:3297089.1 Ordinance No. 2013-00040 GENERAL CERTIFICATE We, the undersigned, Mayor, City Manager and City Secretary, respectively, of the City of Lubbock, Texas (the "City"), do hereby certify the following information: 1. This certificate relates to the City of Lubbock, Texas, Electric Light and Power System Revenue Refunding and Improvement Bonds, Series 2013 (the "Bonds"), dated April 15, 2013. Capitalized terms used herein and not otherwise defined shall have the meaning assigned thereto in the Ordinance (the "Ordinance"), adopted by the City Council of the City, authorizing the issuance of the Bonds. 2. The City of Lubbock, Texas, is a duly incorporated Home Rule City, and is operating and existing under the Constitution and laws of the State of Texas and the duly adopted Home Rule Charter of the City. The Home Rule Charter was last amended at an election held in the City on November 2, 2004. 3. The following are duly qualified and acting, elected or appointed officials of the City of Lubbock, Texas: Glen Robertson, Mayor Victor Hernandez ) Karen Gibson, Mayor Pro Tem Todd R. Klein ) Members of Jim Gerlt ) the Council Floyd Price ) Latrelle Joy ) Lee Ann Dumbauld, City Manager Pamela Moon, Executive Director of Finance Rebecca Garza, City Secretary 4. The Net Revenues of the System are not pledged or encumbered to the payment of any debt or obligation of the City or the System except the Bonds, the Outstanding Previously Issued Bonds (consisting of the City's Electric Light and Power System Revenue Bonds, Series 2010) and the subordinate lien obligations described on Exhibit A hereto. 5. The debt service requirements for the Bonds and the Previously Issued Bonds are set forth under "Table 7 - Revenue Bond Debt Service Requirements" included in "APPENDIX A - FINANCIAL INFORMATION REGARDING THE CITY" to the City's Official Statement prepared in connection with the issuance of the Bonds (the "Official Statement"), and such table is incorporated herein by reference and is true and correct as of the date hereof. 6. The rates charged by the System for services provided are set forth under "Table 11 - Monthly Electric Rates" included in "APPENDIX A - FINANCIAL INFORMATION REGARDING THE CITY" to the Official Statement, and such table is incorporated herein by reference and is true and correct as of the date hereof. 7. The revenues and expenses of the System are set forth under "Table 8 - Condensed Statement of Operations" included in "APPENDIX A - FINANCIAL HOU:3296765.2 INFORMATION REGARDING THE CITY" to the Official Statement, and such table is incorporated herein by reference and is true and correct as of the date hereof. 8. The City's Executive Director of Finance has assumed the duties of CFO. 9. No litigation of any nature has been filed or is now pending or, to our knowledge, threatened in any court to restrain the issuance or delivery of said Bonds, the collection of Net Revenues to pay the principal of and interest on the Bonds or the pledge thereof or otherwise affecting the provisions made for their payment or security, or in any manner questioning the proceedings or authority concerning the issuance of said Bonds. 10. Neither the corporate existence nor the boundaries of the City, nor the title of its present officers to their respective offices is being contested, and no authority or proceedings for the issuance of said proposed Bonds have been repealed, revoked or rescinded. 11. The City is not in default in connection with any of the covenants, conditions or obligations contained in the ordinance authorizing the Outstanding Previously Issued Bonds and all interest, sinking and reserve funds for such bonds have been fully maintained in accordance with the provisions of said ordinances. 12. The descriptions and statements of or pertaining to the City contained in the Official Statement, and any addenda, supplement or amendment with respect to such descriptions or statements thereto, on the date of such Official Statement, on the date of sale of the Bonds and on the date of the delivery, were and are true and correct in all material respects. 13. Insofar as the City and its affairs, including its financial affairs, are concerned, such Official Statement did not and does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 14. Insofar as the descriptions and statements, including financial data, of or pertaining to entities, other than the City, and their activities contained in such Official Statement are concerned, such statements and data have been obtained from sources which the City believes to be reliable and the City has no reason to believe that they are untrue in any material respect. 15. There has been no material adverse change in the financial condition and affairs of the City since the date of the Official Statement. 16. The undersigned Mayor and City Secretary officially executed and signed the Bonds, including the Initial Bond delivered to the Underwriters (the "Initial Bond"), by manual signature or by causing facsimiles of our manual signatures to be imprinted or lithographed on each of the Bonds, and we hereby adopt said facsimile signatures as our own, respectively, and declare that said facsimile signatures constitute our signatures the same as if we had manually signed each of the Bonds. 17. The Bonds, including the Initial Bond, are substantially in the form, and have been duly executed and signed in the manner, prescribed in the Ordinance. 2 I IOU:3296765.2 18. At the time the undersigned Mayor and City Secretary so executed and signed the Bonds, we were, and at the time of executing this certificate we are, the duly chosen, qualified, and acting officers indicated therein and authorized to execute the same. 19. We have caused the official seal of the City to be impressed, or printed, or copied on each of the Bonds; and said seal on the Bonds has been duly adopted as, and is hereby declared to be, the official seal of the City. [EXECUTION PAGE FOLLOWS] -IOU:3296765.2 EXECUTED AND DELIVERED this MANUAL SIGNATURE STATE OF TEXAS § COUNTY OF LUBBOCK § OFFICIAL TITLE Mayor, City of Lubbock, Texas Before me, the undersigned authority, on this day personally appeared Glen Roberston, Mayor of the City of Lubbock, Texas, known to me to be such person who signed the above and foregoing certificate in my presence and acknowledged to me that such person executed the above and foregoing certificate for the purposes therein stated. I GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS ""►"'► `� Notary Public, ��,•�Q.. ........ lF •, In and for the State of Texas A �, Of .XP..IR 6 0 Signature Page 1 for General Certificate IOU:3296765.2 EXECUTED AND DELIVERED this MANUAL SIGNATURE OFFICIAL TITLE City Manager, City of Lubbock, Texas STATE OF TEXAS COUNTY OF LUBBOCK Before me, the undersigned authority, on this day personally appeared Lee Ann Dumbauld, City Manager of the City of Lubbock, Texas, known to me to be such person who signed the above and foregoing certificate in my presence and acknowledged to me that such person executed the above and foregoing certificate for the purposes therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS (lo{ dl �rpr��, �013 CELIAWEBB Notary Public, Notary Public, Stale of Texas In and for the State of Texas My Commission Expires 3-01.2014 [SEAL] Signature Page 2 for General Certificate 11 Ol 3296765.2 EXECUTED AND DELIVERED this MANUAL SIGNATURE OFFICIAL TITLE City Secretary, City of Lubbock, Texas STATE OF TEXAS § COUNTY OF LUBBOCK § Before me, the undersigned authority, on this day personally appeared Rebecca Garza, City Secretary of the City of Lubbock, Texas, known to me to be such person who signed the above and foregoing certificate in my presence and acknowledged to me that such person executed the above and foregoing certificate for the purposes therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS Notary Public, In and for the State of Texas [SEAL] Signature Page 3 for General Certificate 1 IOU:3296765.2 Exhibit A Combination Tax and Electric Light and Power System Surplus Revenue Certificates of Obligation, Series 2005, dated February 15, 2005, issued in the original principal amount of $23,055,000 and currently outstanding in the amount of $1,625,000 A-1 I IOU:3296765 2 Ordinance No. 2013-00040 PAYING AGENT/REGISTRAR AGREEMENT between CITY OF LUBBOCK, TEXAS and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. Pertaining to City of Lubbock, Texas Electric Light and Power System Revenue Refunding and Improvement Bonds Series 2013 Dated as of April 11, 2013 I IOU:3305710.1 TABLE OF CONTENTS Page ARTICLE I APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR.................I Section1.01. Appointment . ..................................................................................................... I Section1.02. Compensation . ................................................................................................... I ARTICLEII DEFINITIONS...........................................................................................................2 Section2.01. Definitions..........................................................................................................2 ARTICLEIII PAYING AGENT.....................................................................................................3 Section 3.01. Duties of Paying Agent......................................................................................3 Section3.02. Payment Dates...................................................................................................4 Section 3.03. Merger, Conversion, Consolidation, or Succession...........................................4 ARTICLEIV REGISTRAR............................................................................................................4 Section 4.01. Transfer and Exchange......................................................................................4 Section4.02. The Bonds..........................................................................................................4 Section4.03. Form of Register................................................................................................5 Section4.04. List of Owners....................................................................................................5 Section 4.05. Cancellation of Bonds........................................................................................5 Section 4.06. Mutilated, Destroyed, Lost, or Stolen Bonds.....................................................5 Section 4.07. Transaction Infonnation to Issuer......................................................................6 ARTICLEV THE BANK................................................................................................................6 Section5.01. Duties of Bank...................................................................................................6 Section 5.02. Reliance on Documents, Etc..............................................................................7 Section 5.03. Recitals of Issuer................................................................................................7 Section5.04. May Hold Bonds................................................................................................8 Section 5.05. Money Held by Bank.........................................................................................8 Section5.06. Indemnification..................................................................................................8 Section5.07. Interpleader........................................................................................................8 ARTICLE VI MISCELLANEOUS PROVISIONS.........................................................................9 Section6.01. Amendment........................................................................................................9 Section6.02. Assignment........................................................................................................9 Section6.03. Notices...............................................................................................................9 Section6.04. Effect of Headings.............................................................................................9 Section 6.05. Successors and Assigns......................................................................................9 Section6.06. Separability........................................................................................................9 Section 6.07. Benefits of Agreement......................................................................................9 Section 6.08. Entire Agreement...............................................................................................9 Section6.09. Counterparts.....................................................................................................10 Section6.10. Termination......................................................................................................10 Section6.11. Governing Law................................................................................................10 (i) I I0U:3305710.1 PAYING AGENT/REGISTRAR AGREEMENT THIS PAYING AGENT/REGISTRAR AGREEMENT (the or this "Agreement"), dated as of April 11, 2013, is by and between CITY OF LUBBOCK, TEXAS (the "Issuer"), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (the "Bank"), a national banking association. WHEREAS, the Issuer has duly authorized and provided for the issuance of its Electric Light and Power System Revenue Refunding and Improvement Bonds, Series 2013 (the "Bonds"), dated April 15, 2013, to be issued as registered securities without coupons; and WHEREAS, all things necessary to make the Bonds the valid obligations of the Issuer, in accordance with their terms, will be taken upon the issuance and delivery thereof, and WHEREAS, the Issuer is desirous that the Bank act as the Paying Agent of the Issuer in paying the principal, redemption premium, if any, and interest on the Bonds, in accordance with the terms thereof, and that the Bank act as Registrar for the Bonds; and WHEREAS, the Issuer has duly authorized the execution and delivery of this Agreement, and all things necessary to make this Agreement the valid agreement of the Issuer, in accordance with its terms, have been done; NOW, THEREFORE, it is mutually agreed as follows: ARTICLE I APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 1.01. Appointment. (a) The Issuer hereby appoints the Bank to act as Paying Agent with respect to the Bonds in paying to the Owners of the Bonds the principal, redemption premium, if any, and interest on all or any of the Bonds. (b) The Issuer hereby appoints the Bank as Registrar with respect to the Bonds. (c) The Bank hereby accepts its appointment, and agrees to act as, the Paying Agent and Registrar. Section 1.02. Compensation. (a) As compensation for the Bank's services as Paying Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in Annex A attached hereto for the first year of this Agreement, or such part thereof as this Agreement shall be in effect, and thereafter while this Agreement is in effect, the fees and amounts set forth in the Bank's current fee schedule then in effect for services as Paying Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the following Fiscal Year. I IOU:3305710.1 (b) In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable expenses, disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof, including the reasonable compensation and the expenses and disbursements of its agents and counsel. ARTICLE II DEFINITIONS Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the following terms have the following meanings when used in this Agreement: "Bank" means The Bank of New York Mellon Trust Company, N.A. "Bank Office" means the Bank's office in Dallas, Texas. The Bank will notify the Issuer in writing of any change in location of the Bank Office. "Bond" or "Bonds" means, collectively, any or all of the Issuer's Electric Light and Power System Revenue Refunding and Improvement Bonds, Series 2013, dated April 15, 2013. "Bond Ordinance" means the ordinance of the City Council of the Issuer authorizing the issuance and delivery of the Bonds. "Business Day" means any day which is not a Saturday, Sunday or legal holiday or day on which banking institutions in New York, New York are required or authorized by law or executive order to close. "Financial Advisor" means RBC Capital Markets, LLC. "Fiscal Year" means the 12 month period ending September 30th of each year. "Issuer" means the City of Lubbock, Texas. "Issuer Request" and "Issuer Order" means a written request or order signed in the name of the Issuer by the Mayor of the Issuer, or any other authorized representative of the Issuer and delivered to the Bank. "Legal Holiday" means a day on which the Bank is required or authorized by applicable law to be closed. "Owner" means the Person in whose name a Bond is registered in the Register. "Paying Agent" means the Bank when it is performing the functions associated with the terms in this Agreement. I IOU:3305710.1 "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, or government or any agency or political subdivision of a government. "Predecessor Bonds" of any particular Bond means every previous Bond evidencing all or a portion of the same obligation as that evidenced by such particular Bond (and, for the purposes of this definition, any Bond registered and delivered under Section 4.06 in lieu of a mutilated, lost, destroyed or stolen Bond shall be deemed to evidence the same obligation as the mutilated, lost, destroyed or stolen Bond). "Record Date" means the last Business Day of the month next preceding an interest payment date established by the Bond Ordinance. "Register" means a register in which the Issuer shall provide for the registration and transfer of Bonds. "Responsible Officer" when used with respect to the Bank means the Chairman or Vice Chairman of the Board of Directors, the Chairman or Vice Chairman of the Executive Committee of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Stated Maturity" means the date or dates specified in the Bond Ordinance as the fixed date on which the principal of the Bonds is due and payable or the date fixed in accordance with the terms of the Bond Ordinance for redemption of the Bonds, or any portion thereof, prior to the fixed maturity date. ARTICLE III PAYING AGENT Section 3.01. Duties of Paying Agent. (a) The Bank, as Paying Agent and on behalf of the Issuer, shall pay to the Owner, at the Stated Maturity and upon the surrender of the Bond or Bonds so maturing at the Bank Office, the principal amount of the Bond or Bonds then maturing, and redemption premium, if any, provided that the Bank shall have been provided by or on behalf of the Issuer adequate funds to make such payment. (b) The Bank, as Paying Agent and on behalf of the Issuer, shall pay interest when due on the Bonds to each Owner of the Bonds (or their Predecessor Bonds) as shown in the Register at the close of business on the Record Date, provided that the Bank shall have been provided by or on behalf of the Issuer adequate funds to make such payments; such payments shall be made by computing the amount of interest to be paid each Owner, preparing the checks, -3- I IOU:3305710.1 and mailing the checks on each interest payment date addressed to each Owner's address as it appears in the Register on the Record Date. Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal of, redemption premium, if any, and interest on the Bonds at the dates specified in the Bond Ordinance. Section 3.03. Merger Conversion Consolidation, or Succession. Any corporation into which the Paying Agent 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 Paying Agent shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Paying Agent shall be the successor of the Paying Agent hereunder without the execution or filing of any paper or any further act on the part of either of the parties hereto. ARTICLE IV REGISTRAR Section 4.01. Transfer and Exchange. (a) The Issuer shall keep the Register at the Bank Office, and subject to such reasonable written regulations as the Issuer may prescribe, which regulations shall be furnished to the Bank herewith or subsequent hereto by Issuer Order, the Issuer shall provide for the registration and transfer of the Bonds. The Bank is hereby appointed "Registrar" for the purpose of registering and transferring the Bonds as herein provided. The Bank agrees to maintain the Register while it is Registrar. The Bank agrees to at all times maintain a copy of the Register at its office located in the State of Texas. (b) The Bank as Registrar hereby agrees that at any time while any Bond is outstanding, the Owner may deliver such Bond to the Registrar for transfer or exchange, accompanied by instructions from the Owner, or the duly authorized designee of the Owner, designating the persons, the maturities, and the principal amounts to and in which such Bond is to be transferred and the addresses of such persons; the Registrar shall thereupon, within not more than three (3) business days, register and deliver such Bond or Bonds as provided in such instructions. The provisions of the Bond Ordinance shall control the procedures for transfer or exchange set forth herein to the extent such procedures are in conflict with the provisions of the Bond Ordinance. (c) Every Bond surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, the signature on which has been guaranteed in a manner satisfactory to the Bank, duly executed by the Owner thereof or his attorney duly authorized in writing. (d) The Bank may request any supporting documentation it feels necessary to effect a re -registration. Section 4.02. The Bonds. The Issuer shall provide an adequate inventory of unregistered Bonds to facilitate transfers. The Bank covenants that it will maintain the me I IOU:3305710.1 unregistered Bonds in safekeeping and will use reasonable care in maintaining such unregistered Bonds in safekeeping, which shall be not less than the care it maintains for debt securities of other governments or corporations for which it serves as registrar, or which it maintains for its own securities. Section 4.03. Form of Register. (a) The Bank as Registrar will maintain the records of the Register in accordance with the Bank's general practices and procedures in effect from time to time. The Bank shall not be obligated to maintain such Register in any form other than a form which the Bank has currently available and currently utilizes at the time. (b) The Register may be maintained in written form or in any other form capable of being converted into written form within a reasonable time. Section 4.04. List of Owners. (a) The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the cost, if any, of reproduction, a copy of the information contained in the Register. The Issuer may also inspect the information in the Register 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. (b) The Bank will not release or disclose the content of the Register 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 or court order or as otherwise required by law. Upon receipt of a subpoena or court order the Bank will notify the Issuer so that the Issuer may contest the subpoena or court order. Section 4.05. Cancellation of 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 certified or registered 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 disposed of pursuant to the Securities Exchange Act of 1934, as amended. Section 4.06. Mutilated Destroyed Lost or Stolen Bonds. (a) Subject to the provisions of this Section 4.06, the Issuer hereby instructs the Bank to deliver fully registered Bonds in exchange for or in lieu of mutilated, destroyed, lost, or stolen Bonds as long as the same does not result in an over -issuance. (b) If (i) any mutilated Bond is surrendered to the Bank, or the Issuer and the Bank receives evidence to their satisfaction of the destruction, loss, or theft of any Bond, and (ii) there is delivered to the Issuer and the Bank such security or indemnity as may be required by the Bank to save and hold each of them harmless, then in the absence of notice to the Issuer or the -5- 1-IOU:3305710.1 Bank that such Bond has been acquired by a bona fide purchaser, the Issuer shall execute, and upon its request the Bank shall register and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost, or stolen Bond, a new Bond of the same stated maturity and of like tenor and principal amount bearing a number not contemporaneously outstanding. (c) Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost, or stolen Bond shall constitute a replacement of the prior obligation of the Issuer, whether or not the mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone, and shall be entitled to all the benefits of the Bond Ordinance equally and ratably with all other outstanding Bonds. (d) Upon the satisfaction of the Bank and the Issuer that a Bond has been mutilated, destroyed, lost, or stolen, and upon receipt by the Bank and the Issuer of such indemnity or security as they may require, the Bank shall cancel the Bond number on the Bond registered with a notation in the Register that said Bond has been mutilated, destroyed, lost, or stolen; and a new Bond shall be issued of the same series and of like tenor and principal amount bearing a number, according to the Register, not contemporaneously outstanding. (e) The Bank may charge the Owner the Bank's fees and expenses in connection with issuing a new Bond in lieu of or exchange for a mutilated, destroyed, lost, or stolen Bond. (f) The Issuer hereby accepts the Bank's current blanket bond for lost, stolen, or destroyed Bonds and any future substitute blanket bond for lost, stolen, or destroyed Bonds that the Bank may arrange, and agrees that the coverage under any such blanket bond is acceptable to it and meets the Issuer's requirements as to security or indemnity. The Bank need not notify the Issuer of any changes in the security or other company giving such bond or the terms of any such bond, provided that the amount of such bond is not reduced below the amount of the bond on the date of execution of this Agreement. The blanket bond then utilized by the Bank for lost, stolen, or destroyed Bonds by the Bank is available for inspection by the Issuer on request. Section 4.07. Transaction Information to Issuer. The Bank will, within a reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to the Bonds it has paid pursuant to Section 3.01; Bonds it has delivered upon the transfer or exchange of any Bonds pursuant to Section 4.01; and Bonds it has delivered in exchange for or in lieu of mutilated, destroyed, lost, or stolen Bonds pursuant to Section 4.06 of this Agreement. ARTICLE V THE BANK Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein and in accordance with the Bond Ordinance and agrees to use reasonable care in the performance thereof. The Bank hereby agrees to use the funds deposited with it for payment of the principal of, redemption premium, if any, and interest on the Bonds to pay the Bonds as the same shall become due and further agrees to establish and maintain all accounts and funds as may be required for the Bank to function as Paying Agent. -6- 1-IOU:3305710.1 Section 5.02. 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. (b) The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent facts. (c) No provisions of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not assured to it. (d) The Bank may rely and shall be protected in acting or refraining from acting upon any ordinance, resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, certificate, 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 Bonds, but is protected in acting upon receipt of Bonds containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Owner or an attorney -in -fact of the Owner. The Bank shall not be bound to make any investigation into the facts or matters stated in an ordinance, resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, certificate, note, security, or other paper or document supplied by Issuer. (e) The Bank is also authorized to transfer funds relating to the closing and initial delivery of the Bonds in the manner disclosed in the closing memorandum as prepared by the Issuer's Financial Advisor or other agent. The Bank may act on a facsimile or e-mail transmission of the closing memorandum acknowledged by the Financial Advisor or the Issuer as the final closing memorandum. 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. (f) The Bank may consult with counsel, and the written advice of such counsel or any opinion of counsel 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. (g) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys of the Bank. Section 5.03. Recitals of Issuer. (a) The recitals contained herein and in the Bonds shall be taken as the statements of the Issuer, and the Bank assumes no responsibility for their correctness. -7- I IOU:3305710.1 (b) The Bank shall in no event be liable to the Issuer, any Owner or Owners, or any other Person for any amount due on any Bond except as otherwise expressly provided herein with respect to the liability of the Bank for its duties under this Agreement. Section 5.04. May Hold Bonds. The Bank, in its individual or any other capacity, may become the Owner or pledgee of Bonds and may otherwise deal with the Issuer with the same rights it would have if it were not the Paying Agent/Registrar, or any other agent. Section 5.05. Money Held by Bank. (a) Money held by the Bank hereunder need not be segregated from any other funds provided appropriate accounts are maintained. (b) The Bank shall be under no liability for interest on any money received by it hereunder. (c) Subject to the provisions of Title 6, Texas Property Code, as amended, any money deposited with the Bank for the payment of the principal, redemption premium, if any, or interest on any Bond and remaining unclaimed for three years after final maturity of the Bond has become due and payable will be paid by the Bank to the Issuer, and the Owner of such Bond shall thereafter look only to the Issuer for payment thereof, and all liability of the Bank with respect to such monies shall thereupon cease. (d) The Bank will comply with the reporting requirements of Chapter 74 of the Texas Property Code, as amended. (e) The Bank shall deposit any moneys received from the Issuer into a trust account to be held in a paying agent capacity for the payment of the Bonds, with such moneys in the account that exceed the deposit insurance, available to the Issuer, provided 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 and to the extent practicable under the laws of the United States of America to secure and be pledged as collateral for trust accounts until the principal and interest on the Bonds have been presented for payment and paid to the owner thereof. Payments made from such trust account shall be made by check drawn on such trust account unless the owner of such Bonds shall, at its own expense and risk, request such other rnedium of payment. Section 5.06. Indemnification. To the extent permitted by law, the Issuer agrees to indemnify the Bank, its officers, directors, employees, and agents for, and hold them harmless against, any loss, liability, or expense incurred without negligence or bad faith on their part arising out of or in connection with its acceptance or administration of the Bank's duties hereunder, and under Article V of the Bond Ordinance, including the cost and expense (including its counsel fees) of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement. Section 5.07. InteMlleader. The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim, demands or controversy over its persons as well as funds on deposit in a court of competent jurisdiction within the State of Texas; waive personal service of 5:11 14OU:3305710.1 any process; and agree that service of process by certified or registered mail, return receipt requested, to the address set forth in 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 within the State of Texas to determine the rights of any person claiming any interest herein. ARTICLE VI MISCELLANEOUS PROVISIONS Section 6.01. Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereof. Section 6.02. Assignment. This Agreement may not be assigned by either party without the prior written consent of the other. Section 6.03. 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 below: (a) if to the Issuer: City of Lubbock, Texas 1625 13th Street Lubbock, Texas 79457 Attention: Executive Director of Finance if to the Bank: The Bank of New York Mellon Trust Company, N.A. 2001 Bryan Street, 1 lth Floor Dallas, Texas 75201 Section 6.04. Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. Section 6.05. Successors and Assigns. All covenants and agreements herein by the Issuer shall bind its successors and assigns, whether so expressed or not. Section 6.06. Separability. If any provision herein shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 6.07. 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 6.08. Entire Agreement. This Agreement and the Bond Ordinance constitute the entire agreement between the parties hereto relative to the Bank acting as Paying In I IOU:3305710.1 Agent/Registrar, and if any conflict exists between this Agreement and the Bond Ordinance, the Bond Ordinance shall govern. Section 6.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. Section 6.10. Termination. (a) This Agreement will terminate on the date of final payment by the Bank issuing its checks for the final payment of principal, redemption premium, if any, and interest of the Bonds. (b) This Agreement may be earlier terminated upon sixty (60) days written notice by either party; provided, that, no termination shall be effective until a successor has been appointed by the Issuer and has accepted the duties imposed by this Agreement. A resigning Paying Agent/Registrar may petition any court of competent jurisdiction for the appointment of a successor Paying Agent/Registrar if an instrument of acceptance by a successor Paying Agent/Registrar has not been delivered to the resigning Paying Agent/Registrar within sixty (60) days after the giving of notice of resignation. (c) The provisions of Section 1.02 and of Article Five shall survive and remain in full force and effect following the termination of this Agreement. Section 6.11. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas. [Signature Page to Follow] -10- HOU:3305710.1 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above. CITY OF LUBBOCK, TEXAS By: 1 11 K GIe oberts , Mayor ATTEST: -4? Reb eca Garza, City Secretary [Signature page for Paying Agent/Registrar Agreement for Electric Light and Power System Bonds] I IOU:3305710.1 THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. By: Title: [Signature page for Paying Agent/Registrar Agreement for Electric Light and Power System Bonds] I IOU:3305710.1 ANNEX "A" SCHEDULE OF FEES FOR SERVICE AS PAYING AGENT/REGISTRAR A-1 I IOU:3305710.1 [LOGO] BNY MELLON CORPORATE TRUST 2001 Bryan — 11 th Floor Dallas, TX 75201 1 IOU:3305710.1 Ordinance N0. 2013-00040 GENERAL CERTIFICATE We, the undersigned, Mayor, City Manager and City Secretary, respectively, of the City of Lubbock, Texas (the "City"), do hereby certify the following information: 1. This certificate relates to the City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2013 (the "Certificates"); City of Lubbock, Texas, General Obligation Refunding and Improvement Bonds, Series 2013 (the "Tax - Exempt Bonds"); and City of Lubbock, Texas, General Obligation Refunding Bonds, Taxable Series 2013 the ("Taxable Bonds" and, together with the Certificates and the Tax -Exempt Bonds, the "Obligations"). Capitalized terms used herein and not otherwise defined shall have the meaning assigned thereto in the respective ordinances (each an "Ordinance," collectively, the "Ordinances") of the City Council authorizing the issuance of the Obligations. 2. The total tax supported debt of the City, after giving effect to the issuance of the proposed Obligations, is $ 3. The assessed value of property for the purpose of taxation in the City of Lubbock, Texas, as shown by its official tax rolls for the year 2012, being its latest approved official assessment rolls is $13,100,207,908, which amount is net of the amount of any exemptions to which property otherwise subject to taxation was entitled pursuant to applicable provisions of the Constitution and laws of the State of Texas. 4. A true and correct copy of the debt service schedule for the Obligations and all other outstanding indebtedness of the City payable from ad valorem taxes is set forth in the table entitled "Table 9-General Obligation Debt Service Requirements" included in "APPENDIX A - Financial Information Regarding the City" to the City's Official Statement, such debt service schedule being incorporated herein by reference for all purposes. 5. The City of Lubbock, Texas, is a duly incorporated Home Rule City, and is operating and existing under the Constitution and laws of the State of Texas and the duly adopted Home Rule Charter of the City. The Home Rule Charter was last amended at an election held in the City on November 2, 2004. 6. The following are duly qualified and acting, elected or appointed officials of the City of Lubbock, Texas: Glen Robertson, Mayor Karen Gibson, Mayor Pro Tem Lee Ann Dumbauld, City Manager Pamela Moon, Executive Director of Finance Rebecca Garza, City Secretary I-IOU:3297085. I Victor Hernandez Todd R. Klein Jim Gerlt Floyd Price Latrelle Joy Members of the Council 7. No litigation of any nature has been filed or is now pending to restrain or enjoin the issuance or delivery of the Obligations or which would affect the provisions made for their payment or security, or in any manner questioning the proceedings or authority concerning the issuance of the Obligations, and so far as we know and believe, no such litigation is threatened. 8. Neither the corporate existence nor the boundaries of the City, nor the title of its present officers to their respective offices is being contested, and so far as we know and believe, no litigation is threatened regarding such matters, and no authority or proceedings for the issuance of the Obligations have been repealed, revoked or rescinded. 9. There has not been filed or presented to the City Secretary or the City Council any petition protesting, challenging or otherwise questioning the issuance of the Obligations. 10. The Ordinances were duly adopted by the City Council on April 11, 2013. 11. None of the Refunded Obligations were ever purchased by or held in the interest and sinking fund created for their payment and redemption; none of the Refunded Obligations are now held in or owned by the sinking fund created for the purpose of paying off or redeeming any of the Refunded Obligations; none of the Refunded Obligations will be taken up and paid for with money in said sinking fund; and, except for $ being contributed by the City to the Escrow Fund for the Refunded Obligations, there is no money in the sinking fund with which to pay principal of any of the Refunded Obligations. 12. The principal and interest payments due on the Tax -Exempt Bonds and the Taxable Bonds on August 15, 2013 will be paid from funds of the City that have been appropriated for such purpose and are lawfully available to pay such principal and interest payments. 13. A true and correct statement of the revenues and expenses of the Waterworks System for fiscal years 2008, 2009, 2010, 2011 and 2012, together with a true and correct copy of an excerpt of current rates and charges for the services of the System, is attached hereto as Exhibit A. 14. Except for the pledge of income and revenues of the System to the payment of. (i) water supply contracts with the Canadian River Municipal Water Authority, (ii) the Certificates, and (ii) the obligations set forth in Exhibit B hereto, none of the City's debts or obligations will be secured by a lien on and pledge of the revenues or income of the System. 15. The City is not in default in the payment of principal and interest on its debt obligations. 16. The descriptions and statements of or pertaining to the City contained in its Official Statement pertaining to the Obligations (the "Official Statement"), and any addenda, supplement or amendment with respect to such descriptions or statements thereto, on the date of such Official Statement, on the date of sale of the Obligations and on the date of the delivery, were and are true and correct in all material respects. -1)- I IOU:3297085.1 17. Insofar as the City and its affairs, including its financial affairs, are concerned, such Official Statement did not and does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 18. Insofar as the descriptions and statements, including financial data of or pertaining to entities other than the City and their activities contained in such Official Statement are concerned, such statements and data have been obtained from sources which the City believes to be reliable and the City has no reason to believe that they are untrue in any material respect. 19. There has been no material adverse change in the financial condition and affairs of the City since the date of the Official Statement. 20. The undersigned Mayor and City Secretary officially executed and signed the Obligations, including the Initial Obligations delivered to the initial purchasers of the Obligations, by manually executing the Obligations or by causing facsimiles of our manual signatures to be imprinted or copied on each of the Obligations, and we hereby adopt said manual or facsimile signatures as our own, respectively, and declare that said facsimile signatures constitute our signatures the same as if we had manually signed each of the Obligations. 21. The Obligations, including the Initial Obligations delivered to the initial purchasers of the Obligations, are substantially in the form, and have been duly executed and signed in the manner, prescribed in the Ordinances. 22. At the time the undersigned Mayor and City Secretary so executed and signed the Obligations we were, and at the time of executing this certificate we are, the duly chosen, qualified, and acting officers indicated therein, and authorized to execute the same. 23. We have caused the official seal of the City to be impressed, or printed, or copied on each of the Obligations; and said seal on the Obligations has been duly adopted as, and is hereby declared to be, the official seal of the City. [EXECUTION PAGES FOLLOW] I IOU:3297085.1 EXECUTED AND DELIVERED this MANUAL SIGNATURE OFFICIAL TITLE Mayor, City of Lubbock, Texas STATE OF TEXAS COUNTY OF LUBBOCK Before me, the undersigned authority, on this day personally appeared Glen Robertson, Mayor, of the City of Lubbock, Texas, known to me to be such person who signed the above and foregoing certificate in my presence and acknowledged to me that such person executed the above and foregoing certificate for the purposes therein stated. . GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS Ila A daVor Apri.f. W3• yp 'I CELIA WEBB `� Notary Publio, State of Texas FPS My Commission Expires 3.01201PW"4 Notary Public, In and for the State of Texas [SEAL] Signature Page for General Certificate I IOU:3297085.1 EXECUTED AND DELIVERED this MANUAL SIGNATURE STATE OF TEXAS § COUNTY OF LUBBOCK § OFFICIAL TITLE City Manager, City of Lubbock, Texas Before me, the undersigned authority, on this day personally appeared Lee Ann Dumbauld, City Manager, of the City of Lubbock, Texas, known to me to be such person who signed the above and foregoing certificate in my presence and acknowledged to me that such person executed the above and foregoing certificate for the purposes therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS I F'd* , y oyApnl yob • nA42�J74 Notary Public, In and for the State of Texas [SEAL] Signature Page for General Certificate 1 IOU:3297085.1 EXECUTED AND DELIVERED this MANUAL SIGNATURE OFFICIAL TITLE City Secretary, City of Lubbock, Texas STATE OF TEXAS § COUNTY OF LUBBOCK § Before me, the undersigned authority, on this day personally appeared Rebecca Garza, City Secretary, of the City of Lubbock, Texas, known to me to be such person who signed the above and foregoing certificate in my presence and acknowledged to me that such person executed the above and foregoing certificate for the purposes therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE.THIS I'I'l, 14 j J- otaryPublic, In and for the State of Texas I IOU:3297085.1 Exhibit A (See attached) HOU:3297085.1 Exhibit B Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2012, dated April 1, 2012, issued in the original principal amount of $12,395,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2011, dated March 15, 2011, issued in the original principal amount of $112,230,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2010C, dated October 1 ,2010, issued in the original principal amount of $41,000,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2010A, dated February 4, 2010, issued in the original principal amount of $48,955,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2010B (Build America Bonds - Direct Payment), dated February 4, 2010, issued in the original principal amount of $96,540,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2010, dated January 1, 2010, issued in the original principal amount of $19,945,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2009, dated March 1, 2009, issued in the original principal amount of $58,705,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008A, dated June 15, 2008, issued in the original principal amount of $22,615,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2008, dated April 15, 2008, issued in the original principal amount of $80,485,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Taxable Series 2008, dated December 15, 2007, issued in the original principal amount of $11,805,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2007A, dated August 15, 2007, issued in the original principal amount of $60,820,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2007, dated January 1, 2007, issued in the original principal amount of $25,255,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2006, dated April 15, 2006, issued in the original principal amount of $76,950,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2005, dated August 15, 2005, issued in the principal amount of $46,525,000 Tax and Waterworks System Surplus Revenue Refunding Bonds, Series 2005, dated July 1, 2005, issued in the original principal amount of $43,080,000 I IOU:3297085.1 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2004, dated September 15, 2004, issued in the original principal amount of $3,1 00,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2003, dated July 15, 2003, issued in the original principal amount of $9,765,000 Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2002, dated February 5, 2002, issued in the original principal amount of $6,450,000 I-IOU:3297085.1 Ordinance No. 2013-00040 CERTIFICATE PURSUANT TO PURCHASE CONTRACT We, the undersigned officials of the City of Lubbock, Texas (the "City"), acting in our official capacity, in connection with the issuance and delivery by the City of Lubbock, Texas, of its Electric Light and Power System Revenue Refunding and Improvement Bonds, Series 2013 (the "Bonds"), hereby certify that: 1. This certificate is delivered pursuant to the Purchase Contract relating to the Bonds, dated April _, 2013 (the "Purchase Contract"), between the City and First Southwest Company, Citigroup Global Markets, Inc., and Raymond James and Associates, Inc. (collectively, the "Underwriters"). Capitalized words used herein as defined terms and not otherwise defined herein have the respective meanings assigned to them in the Purchase Contract. 2. The representations and warranties of the City contained in the Purchase Contract are true and correct in all material respects on and as of the date hereof as though made on and as of the date hereof. 3. Except to the extent disclosed in the Official Statement, no litigation is pending or, to our knowledge, threatened in any court to restrain or enjoin the issuance or delivery of the Bonds, or collection or application of Pledged Revenues pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity of the Bonds or the City Documents, or contesting the powers of the City or the authorization of the Bonds or the City Documents, or contesting in any way the accuracy, completeness or fairness of the Official Statement. 4. To the best of our knowledge, no event affecting the City has occurred since the date of the Official Statement that should be disclosed in the Official Statement for the purpose for which it is to be used or that it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect. 5. There has not been any material and adverse change in the affairs or financial condition of the City since September 30, 2012, the latest date as to which audited financial information is available. [Execution Page Follows.] I-IOU:3305723. E DATED: , 2013. City Mlarnager City of Lubbock, Texas Executive Director of Finance City of Lubbock, Texas Signature Page for Certificate Pursuant to Purchase Contract I IOU:3305723.1 Ordinance No. 2013-00040 ADDITIONAL BONDS CERTIFICATE This certificate relates to the City of Lubbock, Texas, Electric Light and Power System Revenue Refunding and Improvement Bonds, Series 2013 (the "Bonds"), dated April 15, 2013. Capitalized terms used herein and not otherwise defined shall have the meaning assigned thereto in the Ordinance (the "Ordinance"), adopted by the City Council of the City, authorizing the issuance of the Bonds. Pursuant to Section 9.01(a) of the Ordinance, I, the undersigned Executive Director of Finance of the City of Lubbock, Texas (the "City"), do hereby certify that the City is not in default in connection with any of the covenants, conditions or obligations contained in the ordinance authorizing the Outstanding Previously Issued Bonds and all interest, sinking and reserve funds for such bonds have been fully maintained in accordance with the provisions of said ordinances. DATED: , 2013 qZ040 clogr- Executive Director of Finance City of Lubbock, Texas 1 IOL':3305913.1 Ordinance No. 2013-00040 ESCROW DEPOSIT LETTER April 11, 2013 The Bank of New York Mellon Trust Company, National Association 2001 Bryan Street 1 Ith Floor Dallas, TX 75201 Re: City of Lubbock, Texas Electric Light and Power System Revenue Refunding and Improvement Bonds, Series 2013 (the "Bonds") Ladies and Gentlemen: The City of Lubbock, Texas (the "City") is issuing the captioned Bonds to refund its Electric Light and Power System Revenue Bonds, Series 2001 (the "Refunded Bonds"). The Bank of New York Mellon Trust Company, National Association, as the successor in interest to U.S. Trust Company of Texas, N.A., currently serves as the paying agent/registrar (the "Refunded Bonds Paying Agent") for the Refunded Bonds. Capitalized terms used herein and not defined shall have the meanings assigned in the ordinance adopted by the City Council of the City on April 11, 2013 (the "Ordinance") which authorized the issuance of the Bonds. The Refunded Bonds will be redeemed on May 30, 2013 (the "Redemption Date"), with certain proceeds of the Bonds which are scheduled to be delivered in exchange for the purchase price therefor on May 21, 2013. Upon the delivery of the Bonds described above, the City will deposit funds, including proceeds of the sale of the Bonds, in an amount sufficient to pay all unpaid principal of and interest on the Refunded Bonds (the "Defeasance Deposit'), with the Refunded Bonds Paying Agent and such funds shall be held in escrow by the Refunded Bonds Paying Agent in accordance with the terms of this Escrow Deposit Letter. The Refunded Bonds Paying Agent agrees to hold the Defeasance Deposit (in the amount of $ ) in an uninvested account (the "Escrow Fund") and collateralized to the extent not insured by the Federal Deposit Insurance Corporation until the Redemption Date. Such amount shall be collateralized only with direct obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, which may be in book -entry form. The City intends that this deposit shall constitute the making of firm banking and financial arrangements for the discharge and final payment of the Refunded Bonds as required by the provisions of the laws of the State of Texas and the ordinance authorizing the issuance of the Refunded Bonds. The Refunded Bonds Paying Agent shall receive, hold and administer funds and discharge the directions set forth in this Escrow Deposit Letter in its capacity as paying agent/registrar for the Refunded Bonds pursuant to the Paying Agent/Registrar Agreement currently in effect therefor (the "Paying Agent/Registrar Agreement'). The Refunded Bonds Paying Agent assumes no liability except as expressed in this Escrow Deposit Letter and in the -IOU:3305776.1 Paying Agent/Registrar Agreement and in the observance of due diligence in accordance with ordinary business practices. The Refunded Bonds Paying Agent agrees that (i) it shall serve as the paying agent for the Refunded Bonds until the Refunded Bonds have been paid, (ii) its compensation for the services described herein shall be determined in accordance with the Paying Agent/Registrar Agreement and (iii) its remedies for nonpayment of fees under the Paying Agent/Registrar Agreement shall be limited to an action for amounts due and owing thereunder. Upon disbursement of all of the funds and investments from the Escrow Fund, this Escrow Deposit Letter shall terminate and the Refunded Bonds Paying Agent shall provide the City with a final accounting of all of the funds disbursed from the Escrow Fund. The Refunded Bonds Paying Agent shall be protected in acting upon any written notice, request, waiver, consent, certificate, receipt, authorization, power of attorney or other paper or document which the Refunded Bonds Paying Agent in good faith believes to be genuine and what it purports to be. The Refunded Bonds Paying Agent may consult with legal counsel in the event of a dispute or question as to the Refunded Bonds Paying Agent's duties hereunder, and the Refunded Bonds Paying Agent shall incur no liability and shall be fully protected in acting in accordance with the good faith, opinion and instruction of such counsel. The Refunded Bonds Paying Agent shall have only those duties as are specifically provided herein and in the Paying Agent/Registrar Agreement, and shall under no circumstances be deemed a fiduciary for the City. The Refunded Bonds Paying Agent shall neither be responsible for, nor chargeable with, knowledge of the terms and conditions of any other agreement, instrument or document between the other parties hereto, in connection herewith. This Escrow Deposit Letter sets forth all matters pertinent to the escrow contemplated hereunder, and no additional obligations of the Refunded Bonds Paying Agent shall be inferred from the terms of this Escrow Deposit Letter. To the full extent permitted by law, the parties agree to indemnify, defend and hold the Refunded Bonds Paying Agent harmless from and against any and all loss, damage, tax, liability and expense that may be incurred by the Refunded Bonds Paying Agent arising out of or in connection with its acceptance or appointment as Refunded Bonds Paying Agent hereunder, including attorneys' fees and expenses of defending itself against any claim or liability in connection with its performance hereunder except that the Refunded Bonds Paying Agent shall not be indemnified for any loss, damage, tax, liability, or expense resulting from its own negligence or willful misconduct. You are hereby directed to disburse funds from the Escrow Fund on May 30, 2013, in the amount of $ to the owners of the Refunded Bonds to pay principal of and unpaid interest on the Refunded Bonds. The Refunded Bonds Paying Agent hereby certifies that funds to be deposited with in the amount of $ will be sufficient in amount to pay on May 30, 2013, the full redemption price of, including all principal and accumulated interest on, the Refunded Bonds. 2 I IOU:3305776.1 This Escrow Deposit Letter shall be effective as of the date first written above. Thank you for your assistance in this matter. [Signature page follows] 3 I IOU:3305776.1 EXECUTED as of the date first written above, but effective as set forth herein. CITY OF LUBBOCK, TEXAS By: , x 14, 't-0 Cify qanager I IOU:3305776.1 THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION By:_ Nam( Title: 1 IOU:3305776.1 Ordinance No. 2013-00040 The Attorney General of Texas Public Finance Section William P. Clements Building, 71h Floor 300 West 15th Street Austin, Texas 78701 April 11, 2013 The Comptroller of Public Accounts Public Finance Division 111 East 17th Street Austin, Texas 78701 Re: City of Lubbock, Texas Electric Light and Power System Revenue Refunding and Improvement Bonds, Series 2013 (the "Bonds") Ladies and Gentlemen: The captioned Bonds are being sent to the Office of the Attorney General, and it is requested that such office examine and approve the Bonds in accordance with law. After such approval, it is requested that the Attorney General deliver the Bonds to the Comptroller of Public Accounts for registration. Enclosed with the Bonds is a signed but undated copy of the GENERAL CERTIFICATE (the "Certificate") relating to the Bonds. The Attorney General is hereby authorized and directed to date the Certificate concurrently with the date of approval of the Bonds. If any litigation or contest should develop pertaining to the Bonds or any other matters covered by said Certificate, the undersigned will notify the Attorney General thereof immediately by telephone. With this assurance the Attorney General can rely on the absence of any such litigation or contest, and on the veracity and currency of said Certificate, at the time the Attorney General approves the Bonds unless the Attorney General is notified otherwise as aforesaid. The Comptroller is hereby requested to register the Bonds as required by law and the proceedings authorizing the Bonds. After such registration, the Comptroller is hereby authorized and directed to deliver the Bonds, together with three copies of each of the Attorney General's Approving Opinion and Comptroller's Certificate for the Bonds, to Jerry Kyle, Jr., Andrews Kurth LLP, I I I Congress Avenue, Austin, Texas 78701. CITY OF LUBBOCK -IOU:3305682.1 Mayor Ordinance No. 2013-00040 CITY OF LUBBOCK, TEXAS 1625 13th Street Lubbock, Texas 79401 April 11, 2013 Mr. Tony Hongnoi The Bank of New York Mellon Trust Company, N.A. 2001 Bryan Street, 1 lth Floor Dallas, Texas 75201 Re: City of Lubbock, Texas - Redemption of Outstanding Obligations set forth in Schedule I attached hereto (the "Refunded Obligations") Dear Mr. Hongnoi: In connection with the refunding by the City of Lubbock, Texas (the "City"), of certain of the outstanding Refunded Obligations, the ordinances authorizing the issuance of the Refunded Obligations (each, an "Ordinance") require that written notice be provided in the name of the City not less than thirty (30) days prior to a redemption date. As paying agent/registrar for the Refunded Obligations, The Bank of New York Mellon Trust Company, N.A., is instructed to send notice of redemption of the Refunded Obligations in accordance with the respective Ordinance authorizing the issuance of such Refunded Obligations. The notice and the call for redemption are conditional in all respects upon the closing of the City's Electric Light and Power System Revenue Refunding and Improvement Bonds, Series 2013, on May 21, 2013. Please acknowledge receipt of this letter by signing in the space provided. CITY OF LUBBOCK, TEXAS By: Pamela Moon Executive Director of Finance 1 IOl':3305660.1 Receipt Acknowledged on this , 2013: The Bank of New York Mellon Trust Company, N.A. By: Name: Title: -IOU:3305660.1 SCHEDULEI I IOU:3305660.1 Ordinance No. 2013-00040 MINUTES AND CERTIFICATION PERTAINING TO PASSAGE OF AN ORDINANCE STATE OF TEXAS § COUNTY OF LUBBOCK § CITY OF LUBBOCK § On the IIth day of April, 2013, the City Council of the City of Lubbock, Texas, convened in a regular meeting at the regular meeting place thereof, the meeting being open to the public and notice of said meeting, giving the date, place and subject thereof, having been posted as prescribed by Chapter 551, Texas Government Code, as amended; and the roll was called of the duly constituted officers and members of the City Council, which officers and members are as follows: Glen Robertson, Mayor Karen Gibson, Mayor Pro Tem Victor Hernandez Todd R. Klein Jim Gerlt Floyd Price Latrelle Joy Lee Ann Dumbauld, City Manager Pamela Moon, Executive Director of Finance Rebecca Garza, City Secretary Members of the Council and all of said persons were present, except Floyd Price thus constituting a quorum. Whereupon, among other business, a written Ordinance bearing the following caption was introduced: AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CITY OF LUBBOCK, TEXAS, ELECTRIC LIGHT AND POWER SYSTEM REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 2013; PROVIDING FOR THE AWARD OF THE SALE THEREOF IN ACCORDANCE WITH SPECIFIED PARAMETERS; APPROVING THE OFFICIAL STATEMENT; APPROVING EXECUTION OF A PURCHASE CONTRACT AND ESCROW AGREEMENT; AND ENACTING OTHER PROVISIONS RELATING THERETO The Ordinance, a full, true and correct copy of which is attached hereto, was read and reviewed by the City Council. Thereupon, it was duly moved and seconded that the Ordinance be passed and adopted. The Presiding Officer put the motion to a vote of the members of the City Council, and the Ordinance was passed and adopted by the following vote: AYES: 6 NOES: 0 ABSTENTIONS: j_ I IOU:3305719.1 MINUTES APPROVED AND CERTIFIED TO BE TRUE AND CORRECT, and to correctly reflect the duly constituted officers and members of the City Council of said City, and the attached and following copy of said Ordinance is hereby certified to be a true and correct copy of an official copy thereof on file among the official records of the City, all on this the 1 lth day of April, 2013. City cretary City of Lubbock, Texas [SEAL] I]OU:3305719.1