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Home My WebLink AboutOrdinance - 2019-O0046 - Electric Light and Power BondOrdinance No. 2019 — 00046 relating to CITY OF LUBBOCK, TEXAS ELECTRIC LIGHT AND POWER SYSTEM REVENUE REVOLVING NOTE PROGRAM Adopted: April 23, 2019 4131-1963-7018.7 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS AND OTHER PRELIMINARY MATTERS Section1.01 Definitions.................................................................................................. 2 Section 1.02 Table of Contents, Titles and Headings ..................................................... 7 Section 1.03 Interpretation.............................................................................................. 7 ARTICLE II AUTHORIZATION OF AND SECURITY FOR NOTES Section 2.01 General Authorization................................................................................ 7 Section 2.02 Terms Applicable to Notes........................................................................ 8 Section 2.03 Paying Agent/Registrar............................................................................ 10 Section 2.04 Form of Notes.......................................................................................... 10 Section 2.05 Execution - Authentication...................................................................... 10 Section 2.06 Notes Mutilated, Lost, Destroyed or Stolen ............................................. 11 Section 2.07 Negotiability, Registration and Exchangeability ..................................... 11 Section 2.08 Delegation of Authority to Authorized Representative ........................... 12 Section 2.09 Pledge; Payments..................................................................................... 13 Section 2.10 Note Construction Fund........................................................................... 14 Section 2.11 Cancellation............................................................................................. 14 Section 2.12 Fiscal and Other Agents....:...................................................................... 14 Section 2.13 Funds Secured.......................................................................................... 15 ARTICLE III ISSUANCE AND SALE OF NOTES Section3.01 General..................................................................................................... 15 Section 3.02 Proceeds of Sale of Notes; Exchange of Notes ........................................ 16 Section 3.03 Paying Agent/Registrar Agreement......................................................... 16 Section 3.04 Note Purchase Agreement........................................................................ 17 ARTICLE IV FLOW OF FUNDS Section 4.01 Previously Created Funds........................................................................ 17 Section 4.02 The System Fund..................................................................................... 17 Section 4.03 Note Payment Fund.................................................................................. 18 ARTICLE V PARTICULAR REPRESENTATIONS AND COVENANTS Section 5.01 Limitation on Issuance............................................................................. 19 Section 5.02 Allocation of, and Limitation on, Expenditures for Eligible Projects..................................................................................................... 19 Section 5.03 Disposition of Eligible Projects............................................................... 19 Section 5.04 Opinion of Bond Counsel........................................................................ 19 Section 5.05 Issuance of Bonds Similarly Secured ...................................................... 20 4131-1963-7018.7 TABLE OF CONTENTS (continued) Page Section 5.06 Application of Bonds Similarly Secured Covenants and Agreements.............................................................................................. 20 Section 5.07 Rates and Charges.................................................................................... 20 Section 5.08 Maintenance and Operation; Insurance ................................................... 21 Section 5.09 Obligations of Inferior Lien and Pledge .................................................. 21 Section 5.10 Bond Anticipation Notes.......................................................................... 21 Section 5.11 Records, Accounts, Accounting Reports ................................................. 21 Section 5.12 Other Representations and Covenants..................................................... 22 Section 5.13 Federal Income Tax Exclusion................................................................ 22 Section 5.14 Disposition of Project.............................................................................. 25 ARTICLE VI DEFAULT AND REMEDIES Section6.01 Remedies................................................................................................... 26 Section 6.02 Remedies Not Exclusive.......................................................................... 26 ARTICLE VII MISCELLANEOUS Section 7.01 Amendments or Modifications Without Consent of Holders of Notes........................................................................................................ 26 Section 7.02 Ordinance to Constitute a Contract; Equal Security; Note Purchase Agreement................................................................................................ 28 Section 7.03 Severability of Invalid Provisions............................................................ 28 Section 7.04 Payment and Performance on Business Days .......................................... 29 Section 7.05 Defeasance............................................................................................... 29 Section 7.06 Limitation of Benefits With Respect to the Ordinance ............................ 29 Section 7.07 Approval of Attorney General................................................................. 30 Section 7.08 Further Procedures................................................................................... 30 Section 7.09 Incorporation of Recitals.......................................................................... 30 ARTICLE VIII EFFECTIVE IMMEDIATELY Section 8.01 Effective Immediately.............................................................................. 30 Exhibit A - Form of Notes A-1 -11- 4131-1963-7018.7 AN ORDINANCE ESTABLISHING AN ELECTRIC LIGHT AND POWER SYSTEM REVENUE REVOLVING NOTE PROGRAM AND AUTHORIZING THE ISSUANCE OF PROGRAM OBLIGATIONS, FROM TIME TO TIME, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $300,000,000 OUTSTANDING AT ANY ONE TIME, PRESCRIBING THE TERMS, FEATURES AND CHARACTERISTICS OF SUCH OBLIGATIONS; APPROVING AND AUTHORIZING CERTAIN AUTHORIZED OFFICERS AND EMPLOYEES OF THE CITY TO ACT ON BEHALF OF THE CITY IN THE SALE AND DELIVERY OF SUCH OBLIGATIONS, WITHIN THE LIMITATIONS SPECIFIED HEREIN; MAKING CERTAIN COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; PROVIDING FOR THE PAYMENT OF THE OBLIGATIONS; RESOLVING OTHER MATTERS RELATED THERETO, INCLUDING APPROVAL OF A NOTE PURCHASE AGREEMENT AND A PAYING AGENT/REGISTRAR AGREEMENT; AND PROVIDING AN EFFECTIVE DATE 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 (as defined herein) 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, in the ordinances authorizing the issuance of the Previously Issued Bonds the City reserved the right to issue obligations on an inferior lien on and pledge of the Net Revenues of the System; WHEREAS, the City Council of the City (the "City Council") wishes to establish interim financing program to better manage capital requirements related to the System; WHEREAS, the City Council hereby finds and determines that electric light and power system revenue revolving notes (the "Notes") secured by a lien on and pledge of the Net Revenues of the System subordinate to the Previously Issued Bonds and the Additional Bonds should be issued as Subordinate Lien Obligations (as defined herein) for the purposes of acquiring, purchasing, constructing, improving, renovating, enlarging, and/or equipping property, buildings, structures, facilities, and/or related infrastructure for the System and paying other Project Costs (as defined herein), and refunding, renewing or refinancing such Notes; WHEREAS, the Notes hereinafter authorized are to be issued and delivered pursuant to Chapter 1371, Texas Government Code ("Chapter 1371"), as amended, and Chapter 1502 and in accordance with the general laws of the State of Texas; 4131-1963-7018 7 WHEREAS, the City is an "Issuer" within the meaning of Chapter 1371, and the City Council desires to delegate, pursuant to Chapter 1371 and the parameters of this Ordinance, to the Authorized Officer (hereinafter defined), the authority to approve the principal amount, the interest rate, the number of series, the price and the other terms of the Notes and to otherwise take such actions as are necessary and appropriate to effect the sale of such Notes; WHEREAS, pursuant to request for proposals #7102-19-EUA issued by the System, responsible staff of the System evaluated several proposals to provide an interim lending facility and determined that the proposal submitted by the Initial Note Purchaser (hereinafter defined) presented the most advantageous terms for the City; WHEREAS, the meeting at which this Ordinance is considered is open to the public as required by law, and public notice of the time, place and purpose of said meeting was given as required by Chapter 551, Texas Government Code, as amended; NOW, THEREFORE, 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: "Act" means collectively Chapters 1371 and 1502 of the Texas Government Code, as amended. "Additional Bonds" means the additional revenue bonds, notes or similar obligations (other than the Notes) permitted to be issued on a parity with the Previously Issued Bonds in accordance with the ordinances authorizing such Previously Issued Bonds; and which may be refunding bonds issued pursuant to and in accordance with the provisions of Texas Government Code, Chapter 1207, as amended. "Authorized Representative" means each of the Mayor, the City Manager, the Chief Financial Officer of the City, the Director of Electric Utilities, and the Chief Financial Officer of the System, acting individually. "Bond Counsel" means Orrick, Herrington & Sutcliffe LLP or such other attorney or firm of attorneys which are nationally recognized as having expertise in the practice of tax-exempt municipal finance law, as approved by the City. "Bond Fund" means the fund by that name described in Section 4.01(a)(ii) hereof. "Bonds Similarly Secured" means, collectively, the Previously Issued Bonds and Additional Bonds. -2- 4131-1963-7018.7 "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 in the State of Texas are generally authorized or obligated by law or executive order to close. "Chapter 1371" means Chapter 1371 of the Texas Government Code, as amended. "City" means the City of Lubbock, Texas. "City Council" means the governing body of the City. "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, enacted on or before the Issue Date. "Default Rate" means the rate of interest specified, if at all, in a Note Purchase Agreement as being applicable to Outstanding Notes subject to such Note Purchase Agreement during the continuation of an Event of Default. "Designated Office" means the designated office of the Paying Agent/Registrar where Notes must be presented and delivered for receipt of payment of the principal amount thereof. "Eligible Investments" means any or all of the authorized investments described in the Public Funds Investment Act, Texas Government Code, Chapter 2256, as amended, and the City's then most recent Investment Policy, in which the City may purchase, sell and invest System funds; and provided further that Eligible Investments shall specifically include, with respect to the investment of proceeds of any Notes, guaranteed investment contracts fully collateralized by 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. "Eligible Project" means the acquisition, purchase, construction, improvement, renovation, enlargement, and/or equipment of property, buildings, structures, facilities, equipment and/or related infrastructure for the System, including capital assets and facilities incident and related to the operation, maintenance and administration thereof. "Event of Default" shall have the meaning set forth in a Note Purchase Agreement. "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 IV hereof. "Holder" or "Noteholder" means any person, firm, association or corporation who holds, directly or indirectly, any Note drawn, issued or endorsed to such person, firm, association or corporation or to the order of such person, firm, association or corporation. "Initial Note Purchaser" means Bank of America, N.A. -3- 4131-1963-7018.7 "Maximum Interest Rate" means the maximum net effective interest rate permitted by law to be paid on obligations issued or incurred by the City in the exercise of its borrowing powers (currently prescribed by Chapter 1204, as amended, Texas Government Code, or any successor provision). "Maximum Maturity Date" means June 1, 2039. "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 Notes or 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 Notes or the Bonds Similarly Secured, shall be deducted. "Notes" means the Tax -Exempt Notes and the Taxable Notes authorized in accordance with the terms of this Ordinance and having the terms and characteristics specified herein hereof and in the form attached as Exhibit A hereof. "Note Construction Fund" means the fund so designated in Section 2.10 hereof. "Note Payment Fund" means the fund so designated in Section 4.02 hereof. "Note Purchase Agreement" means a note purchase agreement between the City and the Note Purchaser relating to the Notes, approved and authorized to be entered into by Section 3.04 of this Ordinance, as from time to time in effect, pursuant to which the Note Purchaser is obligated to purchase and/or accept Notes at the times, subject to the conditions, and bearing interest calculated in the manner specified therein, but in all respects consistent with the provisions of this Ordinance. "Note Purchase Agreement Costs" means any commitment fees, administrative fees, commitment reduction fees, commitment termination fees, legal and administrative fees and expenses, and other costs, fees, and expenses payable, from time to time, by the City to the Purchaser under a Note Purchase Agreement, but specifically excluding the principal of and interest on any Note. "Note Purchaser" means the Initial Note Purchaser and any party designated as the Note Purchaser from time to time pursuant to the terms of a Note Purchase Agreement. "Outstanding" means all Notes or Bonds Similarly Secured theretofore issued and delivered, except: (1) those Notes or Bonds Similarly Secured theretofore cancelled by the respective paying agent/registrar or delivered to the respective paying agent/registrar for cancellation; -4- 4131-1963-7018.7 (2) those Notes or Bonds Similarly Secured for which payment has been duly provided by the City in accordance with the provisions of this Ordinance by the irrevocable deposit with the respective paying agent/registrar of cash or Government Obligations, or both, in the amount necessary to fully pay the principal of, premium, if any, and interest thereon to maturity or redemption, as the case may be; (3) those Notes or Bonds Similarly Secured that have been mutilated, destroyed, lost or stolen and for which replacement notes or bonds have been registered and delivered in lieu thereof; and (4) those Notes or Bonds Similarly Secured owned by or on behalf of the City. "Paying Agent/Registrar" means the agent appointed pursuant to Section 2.03 hereof, or any successor to such agent. "Paying Agent/Registrar Agreement" means the agreement approved and authorized to be entered into by Section 3.03 hereof, as from time to time amended or supplemented, and any subsequent Paying Agent/Registrar Agreement approved by the City Council. "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 2010, dated October 15, 2010; (2) City of Lubbock, Texas, Electric Light and Power System Revenue Refunding and Improvement Bonds, Series 2013, dated April 15, 2013; (3) City of Lubbock, Texas, Electric Light and Power System Revenue Bonds, Series 2014, dated May 1, 2014; (4) City of Lubbock, Texas, Electric Light and Power System Revenue Bonds, Series 2015, dated April 15, 2015; (5) City of Lubbock, Texas, Electric Light and Power System Revenue Bonds, Series 2016, dated April 15, 2016; (6) City of Lubbock, Texas, Electric Light and Power System Revenue Bonds, Series 2017, dated August 15, 2017; and (7) City of Lubbock, Texas, Electric Light and Power System Revenue Bonds, Series 2018, dated August 15, 2018. "Program" means the "City of Lubbock, Texas Electric Light and Power System Revenue Revolving Note Program" established pursuant to the provisions of this Ordinance. -5- 4131-1963-7018.7 "Project Costs" means all costs and expenses incurred in relation to Eligible Projects, including without limitation design, planning, engineering and legal costs, acquisition costs of land, interests in land, rights -of -way and easements, construction costs, costs of machinery, equipment, and other capital assets incident and related to the operation, maintenance, and administration of an Eligible Project, financing costs (including interest on obligations during the constitutionally permitted time period, and payments on credit agreements during and after construction, underwriter's discount or fee and/or fees for legal, financial, and other professional services, and Note Purchase Agreement Costs). A Project Cost incurred before the issuance of Notes issued to finance the related Eligible Project may be reimbursed from proceeds from the sale of Notes, and such reimbursement shall be a "Project Cost." "Rating Agency" means any nationally -recognized municipal bond rating agency then maintaining a rating on the Notes at the request of the City. "Reserve Portion" has the meaning assigned to it in the ordinances authorizing the Bonds Similarly Secured. "Reserve Requirement" has the meaning assigned to it in the ordinances authorizing the Bonds Similarly Secured. "Securities Act" means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect. "Stated Maturity" means with respect to any Note the date specified as the maturity date therein. "Subordinate Lien Obligations" means each series of bonds, notes and other debt obligations, including the Notes, payable from and secured by a lien on and pledge of the Net Revenues of the System, junior and subordinate in rank and dignity to the lien and pledge securing the payment of the Bonds Similarly Secured. "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. "System Fund" means the fund described in Section 4.01(a)(i) hereof. "Tax -Exempt Notes" means the Notes authorized to be issued and at any time outstanding under the Program pursuant to this Ordinance, the interest on which is excludable from gross income for federal income tax purposes. "Taxable Notes" means the Notes authorized to be issued and at any time outstanding under the Program pursuant to this Ordinance that are not obligations described in section 103(a) of the Code or are obligations which constitute specified private activity bonds within the meaning of section 141(b) of the Code. -G- 4131-1963-7018 7 Section 1.02 Table of Contents, Titles and Headings. The table of contents, titles and headings of the Articles and Sections of this Ordinance have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof and shall never be considered or given any effect in construing this Ordinance or any provision hereof or in ascertaining intent, if any question of intent should arise. Section 1.03 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) Any duty, responsibility, privilege, power or authority conferred by this Ordinance upon an officer shall extend to an individual who occupies such office in an interim, acting or provisional capacity. (d) This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein. ARTICLE II AUTHORIZATION OF AND SECURITY FOR NOTES Section 2.01 General Authorization. Pursuant to authority conferred by and in accordance with the provisions of the Act, the Constitution and laws of the State of Texas, Notes shall be and are hereby authorized to be issued, from time to time, in an aggregate principal amount not to exceed THREE HUNDRED MILLION DOLLARS ($300,000,000) at any one time Outstanding for the purpose of financing Project Costs and to refinance, renew or refund Notes, all in accordance with and subject to the terms, conditions, and limitations contained herein. The authority to issue Notes from time to time under the provisions of this Ordinance shall exist until the Maximum Maturity Date. Notwithstanding any provision herein to the contrary, no Notes shall be issued unless there exists and is then in effect one or more Note Purchase Agreements, and then, Notes shall never be issued in a principal amount that exceeds the "commitment amount", "available commitment", or such other term or concept indicating the principal of Notes that the Note Purchaser(s) are obligated to purchase from time to time under such Note Purchase Agreement(s). The City Council hereby finds and determines that the terms of the Program and the sale of Notes to the Note Purchaser are in the best interests of the City to provide for the financing of the Eligible Projects on the terms most advantageous to the City. -7- 4131-1963-7018.7 Section 2.02 Terms Applicable to Notes. (a) Dated Date; Maturity Date; Authorized Denominations. Notes herein authorized shall (i) be dated as of their date of issuance (the "Note Date") and (ii) mature on the date specified in such Note; provided however, that such maturity date shall not be later than the earlier to occur of any of the following: (A) 364 days following the Note Date; (B) the termination date of the then effective Note Purchase Agreement relating to such Note; and (C) the Maximum Maturity Date. Unless a larger denomination is specified in the Note Purchase Agreement then in effect, the Notes shall be issued in minimum denominations of $100,000 or any integral of $100,000 in excess thereof and shall be numbered in ascending consecutive numerical order in the order of their issuance. (b) Determination of Federal Tax Treatment; Style, Calculation and Payment of Interest. The Notes shall be issued as either (i) Tax -Exempt Notes, to be designated "City of Lubbock, Texas Electric Light and Power System Revenue Tax -Exempt Revolving Notes" or (ii) Taxable Notes, to be designated "City of Lubbock, Texas Electric Light and Power System Revenue Taxable Revolving Notes". The Notes provided for in the Note Purchase Agreement shall bear interest at such rate or rates (either fixed, variable, or floating) per annum computed on the basis of actual days elapsed based upon (A) a 360-day year of twelve 30-day months, (B) a 360-day year, or (C) a 365-day or 366-day year, as provided in the Note Purchase Agreement, in each case determined by the City at the time such Notes are issued; provided, however, that in no event shall the interest rate on any Note exceed the Maximum Interest Rate in effect on the date of issuance thereof. Notes issued without a fixed numerical rate of interest for the term thereof specified at their time of issuance shall bear interest in accordance with any clearly stated formula or method of calculation specified in the Note Purchase Agreement. In addition, the Note Purchase Agreement may include provision for payment of (i) interest calculated at a Default Rate, (ii) "clawback" interest (being a provision stating that the rate of interest on Notes may remain at the Maximum Interest Rate for a duration necessary to compensate a Holder in the event that the aforementioned formulaic methodology produces an interest rate that exceeds the Maximum Interest Rate for a period of time), so long as such "clawback" provision does not extend beyond the stated maturity date of the applicable Note, and (iii) interest at a taxable gross -up rate if interest on any Tax -Exempt Note becomes includable in the gross income of the Holder thereof. Interest on Notes shall be payable at maturity (in conjunction with payment of principal) and at such intervals prior to maturity as specified, if at all, in the applicable Note Purchase Agreement. The manner of payment of interest on Notes shall be as specified in the applicable Note Purchase Agreement. (c) Redemption. Unless specified otherwise in a Note Purchase Agreement with respect to timing and price, Notes issued hereunder shall be subject to redemption, at the direction of the Authorized Representative, in whole or in part, on any date, at the price of par plus accrued interest to such date of redemption; provided, however, that redemption of Notes bearing interest at a variable or floating may be subject to further restriction regarding the timing and requisite notice of, but (except with respect to any fees specified in the applicable Note Purchase Agreement in connection therewith) not the price for, such redemption, as further specified, if at all, in a Note Purchase Agreement. -8- 4131-1963-7018.7 Subject to any additional requirements of the applicable Note Purchase Agreement then in effect and the last sentence of this paragraph, at least thirty (30) days prior to the date any Notes are to be redeemed, as determined by an Authorized Representative, a notice of redemption shall be given in the manner set forth below. A written notice of such redemption shall be given to the Registered Owner of each Note or a portion thereof being called for redemption by depositing such notice in the United States mail, first class postage prepaid, addressed to each such Registered Owner at his address shown on the Registration Books (defined herein) kept by the Paying Agent/Registrar. Notwithstanding the foregoing, if the Registered Owner of a Note to be redeemed is the Note Purchaser, then such Notes are redeemable upon at least three (3) Business Days (or such shorter period as may be specified in a Note Purchase Agreement) prior written notice delivered by the City, at the direction of an Authorized Representative, to the Note Purchaser and the Paying Agent/Registrar. By the date fixed for any such redemption, due provision shall be made by the City with the Paying Agent/Registrar for the payment of the required redemption price for the Notes or the portions thereof which are to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If such written notice of redemption is given, and if due provision for such payment is made, all as provided above, the Notes, or the portions thereof which are to be so redeemed, thereby automatically shall be redeemed prior to their scheduled maturities, shall not bear interest after the date fixed for their redemption, and shall not be regarded as being Outstanding except for the right of the Registered Owner to receive the redemption price plus accrued interest to the date fixed for redemption from the Paying Agent/Registrar out of the funds provided for such payment. The Paying Agent/Registrar shall record in the Registration Books all such redemptions of principal of the Notes or any portion thereof. If a portion of any Notes shall be redeemed, a substitute Note or Notes having the same stated maturity date, bearing interest at the same interest rate (or calculated in the same manner, as applicable), in any denomination of or in excess of $100,000, at the written request of the Registered Owner, and in an aggregate principal amount equal to the unredeemed portion thereof, will be issued to the Registered Owner upon the surrender thereof for cancellation, at the expense of the City, all as provided in this Ordinance. (d) Notes in Registered Form. The Notes shall be issued in registered form, without coupons, in the name of the Registered Owner thereof or to bearer. The Notes shall initially be registered in the name of the Note Purchaser. Both principal of and interest on each Note shall be payable in lawful money of the United States of America, without exchange or collection charges to the Holder. The principal of any Note is payable upon presentation and surrender thereof at the corporate office of the Paying Agent/Registrar; interest on Notes shall be paid as described in Subsection (b) above. If the date for the payment of the principal of or interest on any Note shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the corporate trust office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a day. The payment on such date shall have the same force and effect as if made on the original date any such payment on the Note was due. The City and the Paying Agent/Registrar may treat the bearer (in the case of Notes so registered) or the Registered Owner as the absolute owner of any Note for the purpose of receiving payment thereof and for all purposes, and, to the extent permitted by law, the City and the Paying Agent/Registrar shall not be affected by any notice or knowledge to the contrary. -9- 4131-1963-7018.7 Section 2.03 Pang A eg nt/Re isg tray. The City appoints The Bank of New York Mellon Trust Company, N.A., as the Paying Agent/Registrar for the Notes. The City covenants and agrees to keep and maintain at the corporate office of the Paying Agent/Registrar books and records (the "Registration Books") for the registration, payment, transfer, and exchange of the Notes, all as provided herein and under such reasonable rules and regulations as the Paying Agent/Registrar may prescribe. The City covenants to maintain and provide a Paying Agent/Registrar at all times while the Notes are outstanding, which shall be a banking institution authorized under applicable laws to exercise trust powers. Should a change in the Paying Agent/Registrar for the Notes occur, the City shall promptly cause a written notice thereof to be sent to each Registered Holder of Notes then Outstanding by United States Mail, first-class, postage prepaid. Such notice shall give the address of the successor Paying Agent/Registrar. A successor Paying Agent/Registrar may be appointed without the consent of the Holders. Section 2.04 Form of Notes. The Notes, the Certificate of Authentication and the Certificate of Assignment to appear on each of the Notes shall be substantially in the forms set forth in attached Exhibit A with such appropriate insertions, omissions, substitutions and other variations as are permitted or required by this Ordinance and 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 thereon as may, consistently herewith, be approved by an Authorized Representative. Any portion of the text of any Notes may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Notes. The Notes shall be printed, lithographed, engraved or produced in any other similar manner, or typewritten, all as determined and approved by an Authorized Representative. Section 2.05 Execution, Authentication. The Notes shall be executed on behalf of the City by the Mayor and attested by the City Secretary, as provided in this Section 2.05. The signature of such officers on the Notes may be manual or facsimile. Notes bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the date of passage of this Ordinance shall be deemed to be duly executed on behalf of the City, notwithstanding that such individuals or either of them shall cease to hold such offices at the time of the initial sale and delivery of Notes authorized to be issued hereunder and with respect to Notes delivered in subsequent sales, exchanges and transfers, all as authorized and provided in the Public Security Procedures Act (Texas Government Code, Chapter 1201, as amended). No Note shall be entitled to any right or benefit under this Ordinance, or be valid or obligatory for any purpose, unless there appears on such Note either a certificate of registration manually executed by the Comptroller of Public Accounts of the State of Texas or his duly authorized agent or a certificate of authentication executed by the Paying Agent/Registrar in the customary manner then prevailing for obligations such as the Notes. -10- 4131-1963-7018.7 Section 2.06 Notes Mutilated, Lost, Destroyed or Stolen. If any Note shall become mutilated, the City, shall execute and deliver a new Note of like tenor and number in exchange and substitution for the Note so mutilated, but only upon surrender to the City of the Note so mutilated. If any Note shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the City and, if such evidence be satisfactory to it and indemnity satisfactory to it shall be given, the City, shall execute and deliver a new Note of like tenor in lieu of and in substitution for the Note so lost, destroyed or stolen. Neither the City nor the Paying Agent/Registrar shall be required to treat both the original Note and any duplicate Note as being outstanding for the purpose of determining the principal amount of Notes which may be issued hereunder, but both the original and the duplicate Note shall be treated as one and the same. Section 2.07 Negotiability, Registration and Exchangeability. The obligations issued hereunder shall be, and shall have all of the qualities and incidents of, a negotiable instrument under the laws of the State of Texas, and each successive holder, in accepting any of the obligations, shall be conclusively deemed to have agreed that such obligations shall be and have all of the qualities and incidents of a negotiable instrument under the laws of the State of Texas. The Registration Books relating to the registration, payment and transfer or exchange of the Notes shall at all times be kept and maintained by the City at the Designated Office of the Paying Agent/Registrar, and the Paying Agent/Registrar shall obtain, record and maintain in the Registration Books the name and address of each registered owner of the Notes, issued under and pursuant to the provisions of this Ordinance, and the Paying Agent/Registrar further shall provide such information to the City as described in Section 2.02 hereof. Any Note may, in accordance with its terms and the terms hereof, be transferred or exchanged for Notes of like tenor and character and of other authorized denominations upon the Registration Books by the Holder in person or by his duly authorized agent, upon surrender of such Note to the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer or request for exchange duly executed by the Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar provided, however, that such subsequent Holder is a "qualified institutional buyer" or an "accredited investor" (each, as defined in the Securities Act) and such transfer is made in accordance with the transfer restrictions set forth in the Note Purchase Agreement. Upon surrender for transfer of any Note at the Designated Office of the Paying Agent/Registrar, the Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or transferees, one or more new Notes executed on behalf of, and furnished by, the City of like tenor and character and of authorized denominations and having the same maturity, bearing interest at the same rate and being of a like aggregate principal amount as the Note or Notes surrendered for transfer. Furthermore, Notes may be exchanged for other Notes of like tenor and character and of authorized denominations and having the same maturity, bearing the same rate of interest and of like aggregate principal amount as the Notes surrendered for exchange, upon surrender of the Notes to be exchanged at the Designated Office of the Paying Agent/Registrar. Whenever any -11- 4131-1963-7018.7 Notes are so surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Notes of like tenor and character as the Notes exchanged, executed on behalf of, and furnished by, the City to the Holder requesting the exchange. Unless the Noteholder is the Note Purchaser, the City and the Paying Agent/Registrar may charge the Noteholder a sum sufficient to reimburse them for any expenses incurred in making any exchange or transfer after the first such exchange or transfer. The Paying Agent/Registrar or the City may also require payment from the Holder of a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in relation thereto. Such charges and expenses shall be paid before any such new Note shall be delivered. New Notes delivered upon any transfer or exchange shall be valid obligations of the City, evidencing the same debt as the Notes surrendered, shall be secured by this Ordinance and shall be entitled to all of the security and benefits hereof to the same extent as the Notes surrendered. Section 2.08 Delegation of Authority to Authorized Representative. Each Authorized Representative is hereby appointed and designated, as an officer of the City, to act on behalf of the City, in connection with the execution of the Note Purchase Agreement, and the selling and delivering, from time to time, of Notes under the Program, and carrying out the duties and procedures specified in this Ordinance, including approval (subject only to the limitations specified within this Ordinance) of the following terms and provisions for each issue of Notes: (1) the principal amount of each Note; (2) the Note Date; (3) the rate of interest or the method of calculating the interest to be borne on the principal amount of each Note; (4) the maturity date of each Note; (5) the date, dates, or intervals on which interest on each Note shall be paid; (6) whether the subject Notes shall be issued as Tax -Exempt Notes or Taxable Notes; (7) the commitment fee and other Note Purchase Agreement Costs, if any, including the method of the calculation and timing for payment of such expenses; and (8) such other matters as herein delegated to an Authorized Representative for final determination. These characteristics, as finally determined by the Authorized Representative consistent with the provisions of this Ordinance shall be evidenced in the Note Purchase Agreement, and (to the extent applicable) in each definitive Note. -12- 4131-1963-7018.7 Section 2.09 Pledge, Payments. (a) The Notes and the Note Purchase Agreement Costs are special obligations of the City, constituting Subordinate Lien Obligations, payable from and secured solely by the sources specified in this Ordinance. The City agrees to make payments into the Note Payment Fund, for further deposit into the appropriate account therein, at such times and in such amounts as are necessary to provide for the full payment of the Note Purchase Agreement Costs and the principal of and the interest on the Notes as and when due, whether by reason of maturity, redemption, or otherwise. Unless paid from available revenues, such payments are to be made from the proceeds of other Notes (including new Notes issued to replace maturing Notes), Additional Bonds, or other City obligations payable from and secured by a lien on and pledge of the Net Revenues, any of such obligations issued for the purposes of refinancing, redeeming, or refunding then -Outstanding Notes. To provide security for the payment of the principal of and interest on the Notes and for the payment of the Note Purchase Agreement Costs as the same shall become due and payable, there is hereby pledged, subject to the provisions of this Ordinance permitting the application thereof for the purposes and on the terms and conditions set forth herein, (i) the proceeds from (a) the sale or exchange of other Notes issued for the purpose of refinancing, renewing, replacing, or redeeming Notes and (b) the sale of a series of bonds or other obligations to be issued by the City for the purpose of refinancing, renewing, or redeeming Notes and (ii) the Net Revenues, such pledge of Net Revenues, however, being junior and subordinate in rank and dignity to the lien and pledge securing the payment of the Bonds Similarly Secured now or hereafter Outstanding (such lien being at the level of priority specified in Section 4.02(c) of this Ordinance), (iii) the amounts held in the Note Payment Fund until the amounts deposited therein are used for authorized purposes, and (iv) the amounts remaining on deposit in the Note Construction Fund after the payment of all Project Costs; and it is hereby resolved and declared the principal of and interest on the Notes and all Note Purchase Agreement Costs shall be and are hereby equally and ratably secured by and payable from a lien on and pledge of the sources hereinabove identified in clauses (i) through (iv), subject and subordinate only to the exceptions noted above. In accordance with the provisions of the ordinances authorizing the Bonds Similarly Secured, the Notes represent Subordinate Lien Obligations. As such (and as stated above), debt service on the Notes and the Note Purchase Agreement Costs are payable from Net Revenues disbursed from the System Fund, at the level of priority specified in Article IV of this Ordinance. In accordance with the provisions of Section 4.02(c) hereof, Net Revenues shall be deposited into the Note Payment Fund, for further deposit into the appropriate account therein, from time to time in amounts necessary to pay the principal of and/or interest on the Notes and the Note Purchase Agreement Costs to the extent not paid from the proceeds of or replaced with other Notes or City obligations issued for such purpose. (b) Perfection of Pledge of Interest in Securitx. Chapter 1208 of the Texas Government Code, applies to the issuance of the Notes and the pledge of the Net Revenues granted by the City herein, and such pledge is, therefore, valid, effective, and perfected. If Texas law is amended at any time while the Notes are outstanding and unpaid such that the pledge of the Net Revenues granted by the City is to be subject to the filing requirements of Chapter 9, as amended, Texas Business & Commerce Code, then in order to preserve to the Registered Owners of the Notes the -13- 4131-1963-7018.7 perfection of the security interest in this pledge, the City agrees to take such measures as it determines are reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9, as amended, Texas Business & Commerce Code and enable a filing to perfect the security interest in this pledge to occur. Section 2.10 Note Construction Fund. There is hereby created and established on the books of the City a separate fund hereby designated as the "City of Lubbock, Texas Electric Light and Power System Revenue Revolving Note Construction Fund" (the "Note Construction Fund"). Within the Note Construction Fund there shall be created two accounts, known as the Tax -Exempt Note Construction Account and the Taxable Note Construction Account, respectively. (a) Tax -Exempt Note Construction Account. Proceeds derived from the sale of Tax - Exempt Notes issued for the purpose of financing Project Costs shall be deposited to the credit of the Tax -Exempt Note Construction Account. Money deposited in the Tax -Exempt Note Construction Account shall remain therein until expended from time to time for the purposes specified in Section 3.02 of this Ordinance, and shall not be used for any other purposes whatsoever, except for temporary investment thereof as provided in Section 3.02 of this Ordinance. Any money remaining in the Tax -Exempt Note Construction Account and not necessary for the payment of Project Costs shall be paid into the Tax -Exempt Note Payment Account. (b) Taxable Note Construction Account. Proceeds derived from the sale of Taxable Notes issued for the purpose of financing Project Costs shall be deposited to the credit of the Taxable Note Construction Account. Money deposited in the Taxable Note Construction Account shall remain therein until expended from time to time for the purposes specified in Section 3.02 of this Ordinance, and shall not be used for any other purposes whatsoever, except for temporary investment thereof as provided in Section 3.02 of this Ordinance. Any money remaining in the Taxable Note Construction Account and not necessary for the payment of Project Costs or the purpose described in the preceding paragraph shall be paid into the Taxable Note Payment Account. Section 2.11 Cancellation. All Notes which at maturity have collected the principal of and interest thereon from the Paying Agent/Registrar or are surrendered for transfer or exchange pursuant to the provisions hereof shall, upon payment be canceled by the Paying Agent/Registrar, and the Paying Agent/Registrar forthwith shall transmit to the City a certificate identifying such Notes and certifying that such Notes have been duly canceled and destroyed. Section 2.12 Fiscal and Other Agents. In furtherance of the purposes of this Ordinance, the Authorized Representatives are hereby authorized, from time to time, to appoint and provide for the payment of such additional fiscal, -14- 4131-1963-7018.7 paying or other agents or trustees as it may deem necessary or appropriate in connection with the Notes. Section 2.13 Funds Secured. Moneys in all Funds created under this Ordinance, to the extent not invested as permitted hereunder, shall be secured in the manner prescribed by law for securing funds of the City. ARTICLE III ISSUANCE AND SALE OF NOTES Section 3.01 General. The Notes shall be completed and delivered by the Paying Agent/Registrar in accordance with telephonic, electronic, computer, or written instructions of any Authorized Representative and in the manner specified in the Paying Agent/Registrar Agreement and below. To the extent such instructions are not written, they shall be confirmed in writing within 24 hours. Such instructions shall specify such principal amounts, dates of issue, maturities, rates of interest, whether the Note is a Tax -Exempt Note or a Taxable Note, and other terms and conditions which are hereby authorized and permitted to be fixed by any Authorized Representative at the time of sale of the Notes. Such instructions shall include the purchase price of the Notes (which shall equal the principal amount of the Notes sold, without original issue premium or discount, and without accrued interest), and a request that the Paying Agent/Registrar authenticate such Notes by countersignature of its authorized officer or employee and deliver them to the named purchaser or purchasers thereof upon receipt of payment. Such instructions shall also specify the amounts of the proceeds of such issue of Notes which are to be deposited to the Note Payment Fund and/or to the Note Construction Fund and with designation for further deposit to the appropriate accounts therein. Such instructions shall also contain provisions representing that all action on the part of the City necessary for the valid issuance of the Notes then to be issued, has been taken, that all provisions of Texas and federal law necessary for the valid issuance of such Notes, with provision for original issue discount and interest exemption from federal income taxation with respect to the Tax -Exempt Notes, have been complied with, and that such Notes in the hands of the Holders thereof will be valid and enforceable obligations of the City according to their terms, subject to the exercise of judicial discretion in accordance with general principles of equity and bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and that, based upon the advice of Bond Counsel, the earned original issue discount on the Tax -Exempt Notes or stated interest on the Tax -Exempt Notes, as the case may be, will be excluded from the gross income of the Holders for federal income tax purposes. Such instructions shall also certify that: no Event of Default has occurred and is continuing as of the date of such Certificate; other than Section 5.13 of this Ordinance with respect to Taxable Notes, the City is in compliance with the covenants set forth in Article V hereof as of the date of such instructions; and the sum of the interest payable on such Note and any discount established for such Note will not exceed a yield (calculated on the principal amount of the Note in the applicable manner specified herein) to the stated maturity date of such Note in excess of the Maximum Interest Rate in effect on the date of issuance of such Note. -15- 4131-1963-7018.7 Section 3.02 Proceeds of Sale of Notes: Exchange of Notes. (a) The proceeds of the sale of any Notes (net of all expenses and costs of sale and issuance) shall be applied for any or all of the following purposes, as directed by an Authorized Representative: (i) Proceeds to be used for the payment and redemption of the outstanding Notes at or before stated maturity or for the payment of interest on Notes shall be deposited into the Note Payment Fund, for further deposit to the appropriate account therein, and expended therefor; provided, however, that no Tax -Exempt Note proceeds shall be used for the payment and redemption of outstanding Taxable Notes (or interest thereon) unless the deposit of Tax -Exempt Note proceeds to be used for such purpose shall be accompanied by an opinion of Bond Counsel stating that such use of Tax Exempt Note proceeds shall not affect the excludability of the interest on such Tax -Exempt Notes from the gross income of the Holders thereof, pursuant to section 103 of the Code, for federal income tax purposes. (ii) Proceeds not deposited into the Note Payment Fund as provided in subparagraph (i) above shall be deposited to the Note Construction Fund, for further deposit to the appropriate account therein, and used and applied in accordance with the provisions of Section 2.10 hereof to pay Project Costs or to otherwise accomplish the purposes permitted by this Ordinance. (b) Maturing Notes may be replaced with replacement Notes, which replacement Notes shall have the characteristics determined by an Authorized Representative and the Note Purchaser pursuant to the terms of the then -effective and applicable Note Purchase Agreement, but at all times subject to the limitations on the issuance of Notes specified in this Ordinance; provided, however, that no Tax Exempt Note shall replace maturing Taxable Notes unless the delivery of such replacement Tax -Exempt Note shall be accompanied at their time of delivery by an opinion of Bond Counsel stating that replacement shall not affect the excludability of the interest on such Tax -Exempt Notes from the gross income of the Holders thereof, pursuant to section 103 of the Code, for federal income tax purposes. Pending expenditure for the foregoing purposes, proceeds from the sale of Notes may be invested in Eligible Investments. Earnings and profits from the investment of money in the Note Construction Fund shall be held therein. Section 3.03 Pang Agent/Registrar Agreement. The Paying Agent/Registrar Agreement by and between the City and the Paying Agent/Registrar relating to the Notes, in substantially the form presented with this Ordinance, is hereby approved, and any Authorized Representative is hereby authorized and directed to approve all final changes and execute the same for and on behalf of the City. Any Authorized Representative is hereby authorized to enter into any supplemental agreements with the Paying Agent/Registrar or with any successor Paying Agent/Registrar in order to implement the functions of the Paying Agent/Registrar with respect to the Notes. -16- 4131-1963-7018.7 Section 3.04 Note Purchase A>reement. Based on the recommendation of the Chief Financial Officer of the System, the City Council hereby approves the selection of the Initial Note Purchaser to provide an interim lending facility in accordance with the terms of this Ordinance and the Note Purchase Agreement. The Note Purchase Agreement, substantially in the form presented with this Ordinance, is hereby approved. Each Authorized Representative is hereby authorized and directed to approve any final changes to the Note Purchase Agreement and execute and deliver such agreement on the City's behalf. The provisions of the Note Purchase Agreement relating to the terms, conditions, events of default, remedies, downgrade pricing and similar terms, conditions and provisions pertaining to the Notes are incorporated herein by reference as if fully set forth herein. The payment of the Note Purchase Agreement Costs, as specified in the Note Purchase Agreement pursuant to mutual agreement between the Initial Note Purchaser and the Authorized Representative, are hereby authorized to be paid from Net Revenues. Notwithstanding any provision herein to the contrary, the aggregate amount of the commitments of Note Purchasers to purchase Notes under all Note Purchase Agreements at any time in effect shall never exceed the maximum principal amount of Notes authorized at any one time to be outstanding under the Program. ARTICLE IV FLOW OF FUNDS Section 4.01 Previously Created Funds. The City covenants and agrees that all receipts, revenues and income derived from the operation and ownership of the System shall be kept separate from other funds of the City. To that end, the following special funds heretofore established in connection with the issuance of the Previously Issued Bonds are hereby confirmed and shall be maintained at the Depository Bank so long as any of the Bonds Similarly Secured are Outstanding, to -wit: (i) "Electric Light and Power System Fund" (the "System Fund"); and (ii) "Special Electric Light and Power System Revenue Bond Retirement and Reserve Fund" (the "Bond Fund"). The Bond Fund shall be held in trust solely for the benefits of the Holders and the Owners of the Bonds Similarly Secured. Section 4.02 The System Fund. The City hereby reaffirms its covenant to the Owners of the Previously Issued Bonds and agrees with the owners of the Notes 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: -17- 4131-1963-7018.7 (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 pursuant to the terms of the Ordinances authorizing the Previously Issued Bonds and any Additional Bonds; (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 payable pursuant to the terms of the Ordinances authorizing the Previously Issued Bonds and any Additional Bonds; and (c) To the payment of the amounts, required to be deposited in the Note Payment Fund for the payment of principal of and interest on the Notes as the same become due and payable. Section 4.03 Note Payment Fund. There is hereby created and established a separate and special fund to be designated as the "City of Lubbock, Texas Electric Light and Power System Revenue Revolving Note Payment Fund" (the "Note Payment Fund"). Within the Note Payment Fund there shall be created two accounts, known as the Tax -Exempt Note Payment Account and the Taxable Note Payment Account, respectively. (i) Tax -Exempt Note Payment Account. Money on deposit in the Tax -Exempt Note Payment Account shall be used to pay principal of and interest on Tax -Exempt Notes at the respective interest payment, maturity, or redemption dates of each issue of such Tax - Exempt Notes as provided herein. Amounts remaining in the Tax -Exempt Note Payment Account not then necessary for the purposes for which such funds were originally held in such account may be transferred to the Tax -Exempt Note Construction Account (created pursuant to Section 2.10 hereof) or the System Fund upon request of an Authorized Representative. Pending the expenditure of money in the Tax -Exempt Note Payment Account for authorized purposes, money deposited therein may be invested at the direction of an Authorized Representative in Eligible Investments. Any income received from investments in the Tax -Exempt Note Payment Account shall be retained in such account. (ii) Taxable Note Payment Account. Money on deposit in the Taxable Note Payment Account shall be used to pay principal of and interest on Taxable Notes at the respective interest payment, maturity, or redemption dates of each issue of such Taxable Notes as provided herein. Amounts remaining in the Taxable Note Payment Fund not then necessary for the purposes for which such funds were originally held in such account may be transferred to the Taxable Note Construction Account (created pursuant to Section 2.10 hereof) or the System Fund upon request of an Authorized Representative. Pending the expenditure of money in the Taxable Note Payment Account for authorized purposes, money deposited therein may be invested at the direction of an Authorized Representative in Eligible Investments. Any income received from investments in the Taxable Note Payment Account shall be retained in such account. -18- 4131-1963-7018.7 ARTICLE V PARTICULAR REPRESENTATIONS AND COVENANTS Section 5.01 Limitation on Issuance. Unless this Ordinance is amended and modified by the City Council in accordance with the provisions of Section 7.01 hereof, the City covenants that there will not be issued and outstanding at any time under this Ordinance more than $300,000,000 in principal amount of Notes. For purposes of this section, any portion of Outstanding Notes to be paid on a particular day from moneys on deposit in the Note Payment Fund and/or the proceeds of other Notes or City obligations issued for the purpose of refinancing, redeeming or refunding then Outstanding Notes shall not be considered Outstanding on such day. In addition to the foregoing, (i) no Notes shall be issued for any project other than an Eligible Project and (ii) no Notes shall be issued if the Notes then Outstanding after such issuance would exceed the authorized but unissued amount of Notes. Section 5.02 Allocation of, and Limitation on, Expenditures for Eligible Projects. The City covenants to account for on its books and records the expenditure of proceeds from the sale of the Tax -Exempt Notes and any investment earnings thereon to be used for Eligible Projects by allocating proceeds to expenditures within 18 months of the later of the date that (a) the expenditure on an Eligible Project is made or (b) each Eligible Project is completed. The foregoing notwithstanding, the City shall not expend such proceeds or investment earnings more than sixty (60) days after the later of (a) the fifth anniversary of the date of delivery of the Tax -Exempt Notes or (b) the date the Tax -Exempt Notes are retired, unless the City obtains an opinion of Bond Counsel substantially to the effect that such expenditure will not adversely affect the tax-exempt status of the Tax -Exempt Notes. For purposes of this Section, the City shall not be obligated to comply with this covenant if it obtains an opinion of Bond Counsel to the effect that such failure to comply will not adversely affect the excludability of the interest on the Tax -Exempt Notes from gross income for federal income tax purposes. Section 5.03 Disposition of Eligible Projects. That, for so long as any of the Notes 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 or other obligations expressly permitted to be issued by the ordinances authorizing the Bonds Similarly Secured, it will not encumber the Net Revenues unless such encumbrance is made junior and subordinate to the Subordinate Lien Obligations. In the event the City sells the System, the City will use proceeds of such sale to provide for final payment of the Notes, any Bonds Similarly Secured and any other obligations secured by Net Revenues. Section 5.04 Opinion of Bond Counsel. The City shall cause the legal opinion of Bond Counsel as to the validity of the Notes and as to the exemption of interest on the Tax -Exempt Notes from federal income taxation to be -19- 4131-1963-7018.7 furnished to any Noteholder without cost. In addition, a copy of such opinion may be printed on or attached to each of the Notes. Section 5.05 Issuance of Bonds Similarly Secured. The City hereby expressly reserves the right to hereafter issue Additional Bonds, without limitation as to principal amount, but subject to any terms, conditions or restrictions applicable thereto under law or otherwise, payable from a first and prior lien on Net Revenues of the System upori such terms and conditions as the City Council may determine and for any purpose allowed by law, including to repay all or a portion of the Outstanding Notes, as long as the conditions specified for such issuance in the ordinances authorizing the Outstanding Bonds Similarly Secured are met. Section 5.06 Application of Bonds Similarly Secured Covenants and Agreements. It is the intention of the City Council and accordingly hereby recognized and stipulated that the provisions, agreements and covenants contained herein bearing upon the management and operations of the System, and the administering and application of revenues derived from the operation thereof, shall to the extent possible be harmonized with like provisions, agreements and covenants contained in the ordinances authorizing the issuance of the Bonds Similarly Secured, and to the extent of any irreconcilable conflict between the provisions contained herein and in the ordinances authorizing the issuance of the Bonds Similarly Secured, the provisions, agreements and covenants contained therein shall prevail to the extent of such conflict and be applicable to this Ordinance but in all respects subject to the priority of rights and benefits, if any, conferred thereby to the holders of the Bonds Similarly Secured. Section 5.07 Rates and Charges. The City hereby covenants and agrees with the owners of the Notes 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; (c) the amounts required to be deposited to the Note Payment Fund to pay the principal of and interest on the Notes as the same becomes due and payable; provided, however, for the purpose of calculating the annual principal and interest requirements on Outstanding Notes for purposes of this Section, the City may assume 30-year level debt service amortization based on the lesser of The Bond Buyer Revenue Bond Index for such term, as in effect on the first day of the Fiscal Year, or the Revenue Bond Index average published in The Bond Buyer on the date of computation; and -20- 4131-1963-7018.7 (d) 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 5.08 Maintenance and Operation; Insurance. 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 5.09 Obligations of Inferior Lien and Pledge. The City hereby reserves the right to issue obligations payable from and secured by a lien on and pledge of the Net Revenues of the System, junior and subordinate in rank and dignity to the lien and pledge securing the payment of the Notes, as may be authorized by the laws of the State of Texas. Section 5.10 Bond Anticipation Notes. The City hereby acknowledges that the Notes are being issued as bond anticipation notes, and the City in good faith shall endeavor to and maintain capacity to sell a sufficient principal amount of Additional Bonds in order to have funds available, together with other lawfully available funds, to pay the Notes and the interest thereon, or any renewals thereof, or any obligations created under the Note Purchase Agreement, as the same shall become due, and such Bonds shall be issued as refunding bonds pursuant to and in accordance with the provisions of Texas Government Code, Chapter 1207, as contemplated and permitted under Section 1371.057(c) of Chapter 1371. Section 5.11 Records, Accounts, Accounting Reports. The City hereby covenants and agrees while any of the Notes 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 all other records and accounts of the City in accordance with generally accepted accounting principles 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 Holder of any Notes, or any duly authorized agent or agents of such Holder, 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; -21- 4131-1963-7018.7 (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 (0 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 Holders of the Notes. Section 5.12 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 Note on the dates and at the places and manner prescribed in such Note; 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 Note; all action on its part for the creation and issuance of the Note has been duly and effectively taken; and the Note in the hands of the Holders thereof are and will be valid and enforceable obligations of the City in accordance with their terms. Section 5.13 Federal Income Tax Exclusion. (a) Definitions. When used in this Section, the following terms shall have the following meanings: "Closing Date" means the date on which the Notes are first authenticated and delivered to the initial purchasers against payment therefor. "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, effective on or before the Closing Date. "Computation Date" has the meaning set forth in Section 1.148-1(b) of the Regulations. -22- 4131-1963-7018.7 "Gross Proceeds" means any proceeds as defined in Section 1.148-1(b) of the Regulations, and any replacement proceeds as defined in Section 1.148-1(c) of the Regulations, of the Tax - Exempt Notes. "Investment" has the meaning set forth in Section 1.148-1(b) of the Regulations. "Nonpurpose lnvestment" means any investment property, as defined in Section 148(b) of the Code, in which Gross Proceeds of the Tax -Exempt Notes are invested and which is not acquired to carry out the governmental purposes of the Tax -Exempt Notes. "Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the Regulations. "Regulations" means any proposed, temporary, or final Income Tax Regulations issued pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code of 1954, which are applicable to the Tax -Exempt Notes. Any reference to any specific Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation designed to supplement, amend or replace the specific Regulation referenced. "Yield" of (1) any Investment has the meaning set forth in Section 1.148-5 of the Regulations; and (2) the Tax -Exempt Notes has the meaning set forth in Section 1.148-4 of the Regulations. (b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any Tax -Exempt Note to become includable in the gross income, as defined in Section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the City receives 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 Tax -Exempt Note, the City shall comply with each of the specific covenants in this Section. (c) No Private Use or Private Payments. Except as permitted by Section 141 of the Code and the Regulations and rulings thereunder, the City shall at all times prior to the last stated maturity of Tax -Exempt Notes: (1) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Tax -Exempt Notes and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or -23- 4131-1963-7018.7 any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Tax -Exempt Notes or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds other than taxes of general application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. (d) No Private Loan. Except to the extent permitted by Section 141 of the Code and the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Tax -Exempt Notes to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds 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 any property acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. (e) Not to Invest at Higher Yield. Except to the extent permitted by Section 148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the Tax -Exempt Notes directly or indirectly invest Gross Proceeds in any Investment (or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Tax - Exempt Notes. (f) Not Federally Guaranteed. Except to the extent permitted by Section 149(b) of the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any action which would cause the Tax -Exempt Notes to be federally guaranteed within the meaning of Section 149(b) of the Code and the Regulations and rulings thereunder. (g) Information Report. The City shall timely file the information required by Section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary may prescribe. (h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in Section 148(f) of the Code and the Regulations and rulings thereunder: (1) The City shall 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 accounting for at least six (6) years after the day on which the last outstanding Tax -Exempt Note is discharged. However, to the extent permitted by law, the City may -24- 4131-1963-7018.7 commingle Gross Proceeds of the Tax -Exempt Notes with other money of the City, provided that the City separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. (2) Not less frequently than each Computation Date, the City shall calculate the Rebate Amount in accordance with rules set forth in Section 148(f) of the Code and the Regulations and rulings thereunder. The City shall maintain such Computations with its official transcript of proceedings relating to the issuance of the Tax -Exempt Notes until six (6) years after the final Computation Date. (3) The City shall pay to the United States out of the Tax -Exempt Note Payment Account or its general fund, as permitted by applicable Texas statute, regulation or opinion of the Attorney General of the State of Texas, the amount that when added to the future value of previous rebate payments made for the Tax -Exempt Notes equals (i) in the case of a Final Computation Date as defined in Section 1.148-3(e)(2) of the Regulations, one hundred percent (100%) of the Rebate Amount on such date, and (ii) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such date. In all cases, the rebate payments shall be made at the times, in the installments, to the place and in the manner as is or may be required by Section 148(f) of the Code and the Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or such other forms and information as is or may be required by Section 148(f) of the Code and the Regulations and rulings thereunder. (4) The City shall exercise reasonable diligence to assure that no errors are made in the Computations and payments required by paragraphs (2) and (3), and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter (and in all events within one hundred eighty (180) days after discovery of the error), including payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under Section 1.148-3(h) of the Regulations. (i) Elections. The City hereby directs and authorizes each Authorized Representative or any combination of them, to make elections permitted or required pursuant to the provisions of the Code or the Regulations, as they deem necessary or appropriate in connection with the Tax - Exempt Notes, in the Certificate as to Tax Exemption or similar or other appropriate certificate, form or document. 0) Reimbursement. The City reasonably expects to reimburse capital expenditures made from its own funds with respect to Eligible Projects with Note proceeds and this Ordinance shall constitute a declaration of official intent under Treasury Regulations Section 1.150-2. The maximum principal amount of obligations expected to be issued and outstanding for Eligible Projects at any time is $300,000,000. Section 5.14 Disposition of Project. The City covenants that the property financed or refinanced with the proceeds of the Tax - Exempt Notes 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 -25- 4131-1963-7018.7 bond counsel substantially to the effect that such sale or other disposition will not adversely affect the tax-exempt status of the Tax -Exempt Notes. 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 VI DEFAULT AND REMEDIES Section 6.01 Remedies. In addition to all the rights and remedies provided by the laws of the State of Texas during the continuance of any Event of Default, the Holder or Holders of any of the Notes shall be entitled to proceed to protect and enforce all rights conferred hereunder or under the Note Purchase Agreement by such appropriate judicial proceedings as such Holder shall deem most effectual to protect and enforce any such rights either by suit in equity or by action at law; or by a writ of mandamus issued by a court of proper jurisdiction, compelling and requiring the City and its officers to observe and perform any payment, covenant, condition or obligation prescribed in the Ordinance or the Note Purchase Agreement. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power, nor shall such delay or omission be construed to be a waiver of any such default or acquiescence therein, and every such right and power may be exercised from time to time and as often as may be deemed expedient. The provisions of this Ordinance shall be deemed to be a contract with each and every Holder and the duties of the City shall be enforceable by mandamus or appropriate suit, action or proceeding in any court of competent jurisdiction. Section 6.02 Remedies Not Exclusive. 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 Notes or now or hereafter existing at law or in equity. ARTICLE VII MISCELLANEOUS Section 7.01 Amendments or Modifications Without Consent of Holders of Notes. (a) Amendments Without Consent. Except as set forth in the Note Purchase Agreement, this Ordinance and the rights and obligations of the City and of the owners of the Notes may be modified or amended at any time without notice to or the consent of any owner of the Notes or any Bonds Similarly Secured, solely for any one or more of the following purposes: (i) To add to the covenants and agreements of the City contained in this Ordinance, other covenants and agreements thereafter to be observed, or to surrender any right or power reserved to or conferred upon the City in this Ordinance; -26- 4131-1963-7018.7 (ii) To cure any ambiguity or inconsistency, or to cure or correct any defective provisions contained in this Ordinance upon receipt by the City of an opinion of nationally recognized bond counsel, that the same is needed for such purpose, and will more clearly express the intent of this Ordinance, (iii) To supplement the security for the Notes, replace or provide additional credit facilities, or change the form of the Notes or make such other changes in the provisions hereof as the City may deem necessary or desirable and which shall not, in the judgment of the City, materially adversely affect the interests of the owners of the outstanding Notes; (iv) To make any changes or amendments requested by any Rating Agency then rating or requested to rate the Notes, as a condition to the issuance or maintenance of a rating, which changes or amendments do not, in the judgment of the City, materially adversely affect the interests of the owners of the outstanding Notes; or (v) To make such other changes in the provisions hereof as the City may deem necessary or desirable and which shall not, in the judgment of the City, materially adversely affect the interests of the owners of outstanding Notes. Notice of any such amendment may be published by the City in the manner described in subsection (c) of this Section; provided, however, that the publication of such notice shall not constitute a condition precedent to the adoption of such amendatory resolution and the failure to publish such notice shall not adversely affect the Implementation of such amendment as adopted pursuant to such amendatory resolution. (b) Amendments With Consent. Subject to the other provisions of this Ordinance, the owners of outstanding Notes aggregating a majority in outstanding principal amount shall have the right from time to time to approve any amendment, other than amendments described in subsection (a) of this Section, to this Ordinance which may be deemed necessary or desirable by the City; provided, however, that nothing herein contained shall permit or be construed to permit, without the approval of the owners of all of the outstanding Notes, the amendment of the terms and conditions in this Ordinance or in the Notes so as to: (i) Make any change in the maturity of the outstanding Notes; (ii) Reduce the rate of interest borne by outstanding Notes; (iii) Reduce the amount of the principal payable on outstanding Notes; (iv) Modify the terms of payment of principal of or interest on the outstanding Notes, or impose any conditions with respect to such payment; (v) Affect the rights of the owners of less than all Notes then outstanding; or (vi) Change the minimum percentage of the outstanding principal amount of Notes necessary for consent to such amendment. -27- 4131-1963-7018.7 (c) Notice. If at any time the City shall desire to amend this Ordinance other than pursuant to subsection (a) of this Section, the City shall cause written notice of the proposed amendment to be given by certified mail to each registered owner of the Notes affected at the address shown on the Register. Such notice shall briefly set forth the nature of the proposed amendment and shall state that a copy thereof is on file with the City Secretary or interim City Secretary for inspection by all owners of Notes. (d) Consent Irrevocable. Any consent given by the owner of Notes or the Note Purchaser pursuant to the provisions of this Section shall be irrevocable for the period specified in such notice, or if the notice is silent, for a period of eighteen (18) months from the date of mailing of the notice provided for in this Section, and shall be conclusive and binding upon all future owners of the same Notes during such period. Such consent may be revoked at any time after eighteen (18) months from the date of mailing by the owner who gave such consent or as otherwise provided in such consent, or by a successor in title, by filing notice thereof with the Paying Agent/Registrar and the City, but such revocation shall not be effective if the owners of a majority in outstanding principal amount of Notes, prior to the attempted revocation, consented to and approved the amendment. (e) Ownership. For the purpose of this Section, the ownership and other matters relating to all Notes registered as to ownership shall be determined from the Registration Books kept by the Paying Agent/Registrar therefor. The Paying Agent/Registrar may conclusively assume that such ownership continues until written notice to the contrary is served upon the Paying Agent/Registrar. Section 7.02 Ordinance to Constitute a Contract; Equal Security; Note Purchase Agreement. In consideration of the acceptance of the Notes, the issuance of which is authorized hereunder, by those who shall hold the same from time to time, this Ordinance shall be deemed to be and shall constitute a contract between the City and the Holders from time to time of the Notes and the pledge made in this Ordinance by the City, and the covenants and agreements set forth in this Ordinance to be performed by the City shall be for the equal and proportionate benefit, security and protection of all Holders of the Notes, without preference, priority or distinction as to security or otherwise of any of the Notes authorized hereunder over any of the others by reason of time of issuance, sale or maturity thereof or otherwise for any cause whatsoever, except as expressly provided in or permitted by this Ordinance. Section 7.03 Severability of Invalid Provisions. If any one or more of the covenants, agreements or provisions herein contained shall be held contrary to any express provisions of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements or provisions and shall in no way affect the validity of any of the other provisions hereof or of the Notes issued hereunder. -28- 4131-1963-7018.7 Section 7.04 Payment and Performance on Business Days. Whenever under the terms of this Ordinance or the Notes, the performance date of any provision hereof or thereof, including the payment of principal of or interest on the Notes, shall occur on a day other than a Business Day, then the performance thereof, including the payment of principal of and interest on the Notes, need not be made on such day but may be performed or paid, as the case may be, on the next succeeding Business Day with the same force and effect as if made on the date of performance or payment. Section 7.05 Defeasance. If, when all or any portion of the Notes shall have become due and payable in accordance with their terms or otherwise as provided in this Ordinance, the entire principal and interest so due and payable upon such Notes shall be paid, or if at or prior to the date such Notes have become due and payable, (i) sufficient moneys, (ii) direct obligations of, or obligations guaranteed by, the United States of America, the principal of and interest on which will provide sufficient moneys for such payment, (iii) noncallable and non -prepayable obligations of an agency or instrumentality of the United States of America, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, the principal of and interest on which will provide sufficient moneys for such payment, or (iv) noncallable and non -prepayable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, the principal of and interest on which will provide sufficient moneys for such payment, shall be held in trust by the Paying Agent/Registrar or a duly authorized escrow agent, and provision shall also be made for paying all other sums payable hereunder by the City with respect to such Notes, the pledge herein created with respect to such Notes shall thereupon cease, terminate and become discharged, and such Notes shall no longer be deemed outstanding for purposes of this Ordinance, and all the provisions of this Ordinance relating to the Notes, including all covenants, agreements, liens and pledges made herein for the benefit thereof, shall be deemed duly discharged, satisfied and released. Section 7.06 Limitation of Benefits With Respect to the Ordinance. With the exception of the rights or benefits herein expressly conferred, nothing expressed or contained herein or implied from the provisions of this Ordinance or the Notes is intended or should be construed to confer upon or give to any person other than the City, the Note Purchaser, the Holders of the Notes and the Paying Agent/Registrar, any legal or equitable right, remedy or claim under or by reason of or in respect to this Ordinance or any covenant, condition, stipulation, promise, agreement or provision herein contained. This Ordinance and all of the covenants, conditions, stipulations, promises, agreements and provisions hereof are intended to be and shall be for and inure to the sole and exclusive benefit of the City and the Holders of the Notes as herein and therein provided. -29- 4131-1963-7018.7 Section 7.07 Approval of Attorney General. No Notes herein authorized to be issued shall be sold or delivered by an Authorized Representative until the Attorney General of the State of Texas shall have approved the proceedings relating to the Program, the Notes and the Note Purchase Agreement as required in accordance with applicable law. Section 7.08 Further Procedures. Any one or more of the Authorized Representatives are hereby expressly authorized, empowered and directed from time to time and at any time to do and perform all such acts and things and to execute, acknowledge and deliver in the name and on behalf of the City all agreements, instruments, certificates or other documents, whether mentioned herein or not, as may be necessary or desirable in order to carry out the terms and provisions of this Ordinance and the issuance, sale and delivery of the Notes. In addition, prior to the delivery of the Notes, the Authorized Representatives are each hereby authorized and directed to approve any changes or corrections to this Ordinance or to any of the documents authorized and approved by this Ordinance: (i) in order to cure any ambiguity, formal defect, or omission in this Ordinance or such other document, or (ii) as requested by the Attorney General of the State of Texas or his representative to obtain the approval of the Note proceedings by the Attorney General. In the event that any officer of the City whose signature shall appear on any document shall cease to be such officer before the delivery of such document, such signature nevertheless shall be valid and sufficient for all purposes the same as if such officer had remained in office until such delivery. Section 7.09 Incorporation of Recitals. The City hereby finds that the statements set forth in the recitals of this Ordinance are true and correct, and the City hereby incorporates such recitals as a part of this Ordinance. ARTICLE VIII EFFECTIVE IMMEDIATELY Section 8.01 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.] -30- 4131-1963-7018.7 PRESENTED, FINALLY PASSED AND APPROVED, AND EFFECTIVE on the 23rd day of April , 2019, at a regular meeting of the City Council of the City of Lubbock, Texas. DANIEL M. POPE, Mayor ATTEST: &CA GARZA, 610 cretary APPROVED AS TO CONTENT: D. 1111 KOS ELICH, Chief Financial Officer APPROVED AS TO FORM: 4�z'z JERK . KYLE, JR., Bond Counsel Signature Page for Ordinance 4131-1963-7018.7 EXHIBIT A FORM OF NOTE Note Note Maturity Principal Number Date Date Amount Form of Tax -Exempt Note Style: United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS ELECTRIC LIGHT AND POWER SYSTEM REVENUE TAX-EXEMPT REVOLVING NOTE Form of Taxable Note Style: United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS ELECTRIC LIGHT AND POWER SYSTEM REVENUE TAXABLE REVOLVING NOTE Form of Heading and First Paragraph for Fixed Rate Note: Note No.: Note Date: Principal Amount: $ Maturity Date: Interest Rate: % The City of Lubbock (the "City"), a municipal corporation of the State of Texas, FOR VALUE RECEIVED, hereby promises to pay, solely from the sources hereinafter identified and as hereinafter stated, to the order of on the Maturity Date specified above, the principal sum specified above, and to pay interest, if any, on such principal amount at such Maturity Date from the above specified Note Date or from the most recent date to which interest has been paid or duly provided for to such Maturity Date at the per annum Interest Rate shown above, subject to adjustment as provided in the Ordinance or a Note Purchase Agreement. Interest hereon is computed on the basis of actual days elapsed and a 360- day year. Both principal and interest on this Note being payable in lawful money of the United States of America at the designated office of the Paying Agent/Registrar executing the "Certificate of Authentication" endorsed hereon and appear ng below or its successor. No interest will accrue on the Principal Amount hereof after such Maturity Date. A-1 4131-1963-7018.7 Form of Heading and First Paragraph for Variable Rate Note: Note No.: Principal Amount: $_ Interest Rate: % Note Date: Maturity Date: The City of Lubbock (the "City"), a municipal corporation of the State of Texas, FOR VALUE RECEIVED, hereby promises to pay, solely from the sources hereinafter identified and as hereinafter stated, to the order of _ _ on the Maturity Date specified above, the principal sum specified above, and to pay interest, if any, on such principal amount at such Maturity Date from the above specified Note Date or from the most recent date to which interest has been paid or duly provided for to such Maturity Date at the rate per annum (computed on the basis of actual days elapsed and a [360-day year of twelve 30-day months/360-day year/365-day or 366-day year, as applicable]) equal to [insert formula or method of calculation for determining variable or floating interest rate, subject to adjustment as provided in the Ordinance or a Note Purchase Agreement]. Both principal and interest on this Note being payable in lawful money of the United States of America at the designated office of the Paying Agent/Registrar executing the "Certificate of Authentication" endorsed hereon and appearing below, or its successor. No interest will accrue on the principal amount hereof after such Maturity Date. Form of Remainder of all Notes: This Note is one of a series of notes authorized under the "City of Lubbock, Texas Electric Light and Power System Revenue Revolving Note Program" (the "Program"), pursuant to which the City may issue additional notes, bearing interest at fixed, variable, or floating rates (and which interest may or may not, dependent upon form, be excludable from gross income for federal tax purposes), in an aggregate principal amount at any one time outstanding not to exceed THREE HUNDRED MILLION DOLLARS ($300,000,000) (such notes, the "Notes"). The Program, as well as the issuance of Notes thereunder, has been duly authorized in accordance with the provisions of an ordinance (the "Ordinance") adopted by the City Council of the City for the purpose of financing Project Costs and to refinance, renew, or refund outstanding Notes; all in accordance and in strict conformity with the provisions of the Constitution and laws of the State of Texas, including but not limited to, Chapters 1371 and 1502, as amended, Texas Government Code, and the City's Home Rule Charter. This Note is payable from and equally secured by a lien on and pledge of (i) the proceeds from (a) the sale or exchange of other Notes issued for the purpose of refinancing, renewing, replacing, or redeeming this Note and (b) the sale of a series or issue of bonds or other obligations to be issued by the City subsequent to the Note Date hereof for the purpose of refinancing, renewing, or redeeming this Note, (ii) the Net Revenues, such pledge of Net Revenues, however, being junior and subordinate in rank and dignity to the lien and pledge securing the payment of the Bonds Similarly Secured now or hereafter Outstanding, (iii) the amounts held in the Note Payment Fund until the amounts deposited therein are used for authorized purposes, and (iv) the amounts remaining on deposit in the Note Construction Fund after the payment of all Project Costs. The Notes are Subordinate Lien Obligations under the Ordinance. A-2 4131-1963-7018.7 This Note, together with other Notes similarly secured, is payable solely from the sources hereinabove identified securing the payment thereof. The Notes do not constitute a legal or equitable pledge, charge, lien, or encumbrance upon any property of the City or the System, except as otherwise described above and the Holder hereof shall never have the right to demand payment of this obligation from any sources or properties of the City except as identified above. In the Ordinance, the City reserves the right and permits the issuance of Additional Bonds to repay all or a portion of the Outstanding Notes as long as the conditions specified for such issuance in the ordinances authorizing the Bonds Similarity Secured are met. The City may issue Additional Bonds or other obligations as long as the conditions specified for such issuance in the ordinances authorizing the Bonds Similarly Secured are met. In addition, the City has reserved the right to issue obligations payable from and secured by a lien on and pledge of the Net Revenues of the System, junior and subordinate in rank and dignity to the lien and pledge securing the payment of the Notes, as may be authorized by the laws of the State of Texas. Reference is hereby made to the Ordinance, copies of which may be obtained upon request to the City, and to all of the terms and provisions the Holder hereof by acceptance of this Note hereby assents, including, but not limited to, provisions relating to definitions of terms, the description of and the nature of the security for this Note, the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Holders of this Note, and the right to issue System debt. Unless specified otherwise in a Note Purchase Agreement with respect to timing and price, Notes issued hereunder shall be subject to redemption, at the direction of the Authorized Representative, in whole or in part, on any date, at the price of par plus accrued interest to such date of redemption; provided, however, that redemption of Notes bearing interest at a variable or floating may be subject to further restriction regarding the timing and requisite notice of, but (except with respect to any fees specified in the applicable Note Purchase Agreement in connection therewith) not the price for, such redemption, as further specified, if at all, in a Note Purchase Agreement. Subject to any additional requirements of the applicable Note Purchase Agreement then in effect and the last sentence of this paragraph, at least thirty (30) days prior to the date any Notes are to be redeemed, as determined by an Authorized Representative, a notice of redemption shall be given in the manner set forth below. A written notice of such redemption shall be given to the Registered Owner of each Note or a portion thereof being called for redemption by depositing such notice in the United States mail, first-class postage prepaid, addressed to each such Registered Owner at his address shown on the Registration Books kept by the Paying Agent/Registrar. Notwithstanding the foregoing, if the Registered Owner of a Note to be redeemed is the Note Purchaser, then such Notes are redeemable upon three (3) Business Days' prior written notice delivered by the City, at the direction of an Authorized Representative, to the Note Purchaser and the Paying Agent/Registrar. By the date fixed for any such redemption, due provision shall be made by the City with the Paying Agent/Registrar for the payment of the required redemption price for the Notes or the portions thereof which are to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If such written notice of redemption is given, and if due provision for such payment MI 4131-1963-7018.7 is made, all as provided above, the Notes, or the portions thereof which are to be so redeemed, thereby automatically shall be redeemed prior to their scheduled maturities, shall not bear interest after the date fixed for their redemption, and shall not be regarded as being Outstanding except for the right of the Registered Owner to receive the redemption price plus accrued interest to the date fixed for redemption from the Paying Agent/Registrar out of the funds provided for such payment. The Paying Agent/Registrar shall record in the Registration Books all such redemptions of principal of the Notes or any portion thereof. If a portion of any Notes shall be redeemed, a substitute Note or Notes having the same stated maturity date, bearing interest at the same interest rate (or calculated in the same manner, as applicable), in any denomination or denominations in excess of $100,000 at the written request of the Registered Owner, and in an aggregate principal amount equal to the unredeemed portion thereof, will be issued to the Registered Owner upon the surrender thereof for cancellation, at the expense of the City, all as provided in this Ordinance. It is hereby certified and recited that all acts, conditions, and things required by law and the Ordinance to exist, to have happened, and to have been performed precedent to and in the issuance of this Note, do exist, have happened, and have been performed in regular and in due time, form, and manner as required by law and that the issuance of this Note, together with all other Notes, is not in excess of the principal amount of Notes permitted to be issued under the Ordinance. This Note has all the qualities and incidents of a negotiable instrument under the laws of the State of Texas. This Note may be registered to bearer or to any designated payee. Title to any Note registered to bearer shall pass by delivery. If not registered to bearer, this Note may be transferred only on the Registration Books. Upon surrender hereof at the designated office of the Paying Agent/Registrar, this Note may be exchanged for a like aggregate principal amount of fully registered (which registration may be to bearer) Notes of authorized denominations of like interest rate and maturity, but only in the manner, subject to the limitations and upon payment of the charges provided in the Ordinance and upon surrender and cancellation of this Note. This Note shall not be entitled to any benefit under the Ordinance or be valid or become obligatory for any purpose until this Note shall have been authenticated by the execution by the Paying Agent/Registrar of the Certificate of Authentication hereon. In the event of any conflict or inconsistency between this Note and the Ordinance, the Ordinance shall control. [The remainder of this page intentionally left blank] A-4 4131-1963-7018.7 IN TESTIMONY WHEREOF, the City Council has caused this Note to be signed with the imprinted facsimile signature of the Mayor, attested by the facsimile signature of the City Secretary. Mayor, City of Lubbock, Texas City Secretary, City of Lubbock, Texas [SEAL] A-5 4131-1963-7018.7 [Form of Paving Agent/Registrar's Certificate of Authentication) PAYING AGENT/REGISTRAR'S CERTIFICATE OF AUTHENTICATION This Note is one of the Notes delivered pursuant to the within -mentioned Ordinance. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. as Paying Agent/Registrar By: Authorized Signatory T A-6 4131-1963-7018.7 CERTIFICATE OF 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 Note and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Note on the books kept for registration thereof, with full power of substitution in the premises. DATED: Signature guaranteed: NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company. NOTICE: The signature on this assignment must correspond with the name of the Registered Owner as it appears on the face of the within Note in every particular. A-7 4131-1963-7018.7 PAYING AGENT/REGISTRAR AGREEMENT THIS PAYING AGENT/REGISTRAR AGREEMENT ("Agreement") is entered into as of June 1, 2019 (the "Effective Date") by and between the CITY OF LUBBOCK, TEXAS ("Borrower") with offices at 1625 13th Street, Lubbock, Texas 79457, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (the "Agent") with offices at 2001 Bryan Street, 1 Oth Floor, Dallas, Texas 75201. On April 23, 2019, the City Council of the Borrower adopted an ordinance (the "Note Ordinance") which authorized the issuance of its City of Lubbock, Texas Electric Light and Power System Revenue Tax -Exempt Revolving Notes (the "Tax -Exempt Notes") and City of Lubbock, Texas Electric Light and Power System Revenue Taxable Revolving Notes (the "Taxable Notes" and, together with the Tax -Exempt Notes, the "Direct Purchase Notes"), pursuant to the provisions of Chapters 1371 and 1502, Texas Government Code, which is referred to herein as the "Act', to provide interim financing for the purpose of financing Project Costs and to refinance, renew, or refund outstanding Direct Purchase Notes. This Agreement will confirm the arrangements made between the Agent and Borrower whereby the Agent has agreed to act as Paying Agent/Registrar in connection with the Direct Purchase Notes which may be sold to and purchased by the Bank (as hereinafter defined) pursuant to the Note Purchase Agreement (as hereinafter defined). The sale of the Direct Purchase Notes was authorized by the Note Ordinance. Section 1. Defined Terms. Capitalized terms not specifically defined herein shall have the meanings given to them in the Note Ordinance. References to time in this Agreement are references to New York City time. Section 2. Issuance of Direct Purchase Notes. Concurrently with the execution of this Agreement, the Borrower has entered into a Note Purchase Agreement dated as of June 1, 2019 (as may be amended, restated and supplemented from time to time, the "Note Purchase Agreement' hereunder, and the "Note Purchase Agreement' under the Note Ordinance) with Bank of America, N.A. (the "Bank" hereunder, and the "Initial Note Purchaser" under the Note Ordinance) for the purchase by the Bank of Direct Purchase Notes. The Direct Purchase Notes will be issued on the terms and subject to the conditions set forth in the Note Ordinance and the Note Purchase Agreement. Each Direct Purchase Note will be entitled to the benefits of this Agreement, the Note Purchase Agreement and the Note Ordinance. This Agreement applies solely to Direct Purchase Notes purchased by the Bank pursuant to the Note Purchase Agreement. In the event the Note Purchase Agreement terminates, this Agreement will terminate and, in the event the Borrower enters into a replacement or other note purchase agreement, this Agreement will be replaced with a similar paying agent/registrar agreement. Section 3. Responsibilities of Agent. Subject to the terms and conditions set forth herein and in the Note Ordinance, the Agent agrees to. perform the duties of paying agent/registrar set forth herein and in the Note Ordinance. It is understood that in undertaking to perform such duties, and in the performance thereof, it is the intention of Borrower that the Agent act solely as an agent and not as a principal. In the event of a conflict between the terms 4148-5812-5339.5 44181-5 of this Agreement and the terms of the Note Ordinance relating to the duties of the Agent, the terms of this Agreement shall control. Section 4. Establishment of Funds; Proceeds of Direct Purchase Notes. (a) The Note Ordinance establishes the following funds: (i) "City of Lubbock, Texas Electric Light and Power System Revenue Revolving Note Construction Fund" (the "Note Construction Fund"); and (ii) "City of Lubbock, Texas Electric Light and Power System Revenue Revolving Note Payment Fund " (the "Note Payment Fund"). (b) The net proceeds of the sale of the Direct Purchase Notes authenticated and delivered by the Agent hereunder shall be transferred to Borrower for deposit in the Note Construction Fund or in the Note Payment Fund or, if the Note Payment Fund is held by the Agent, retained by the Agent for deposit in the Note Payment Fund in the amounts determined and as directed by the Borrower. Such proceeds shall be applied by Borrower pursuant to Section 3.02 of the Note Ordinance. Section 5. Note Ordinance and Certificate of Incumbency. The Borrower has delivered to the Agent (i) a certified copy of the Note Ordinance, which copy is appended hereto as Exhibit A, and (ii) a certified original of Borrower's certificate of incumbency (the "Certificate of Incumbency"), containing the name, title, and true signature of those officers of Borrower authorized by the Note Ordinance to take action with respect to the Direct Purchase Notes (the "Authorized Borrower Representatives"), which certificate is appended hereto as Exhibit B. Borrower agrees to provide the Agent with a revised certified copy of the Note Ordinance and/or Certificate of Incumbency when and as required by changes in authorization of personnel. The Agent may conclusively rely upon such Note Ordinance and/or Certificate until a revised Note Ordinance and/or Certificate is delivered by Borrower. Section 6. Authorized Persons. The Borrower authorizes the Agent to accept and execute Instructions given pursuant to Section 8 hereof by an Authorized Borrower Representative or by any person, including any employee of the Bank who has been designated by an Authorized Borrower Representative in writing to the Agent as a person authorized to give such instructions hereunder. Such designated persons shall be hereinafter collectively referred to as "Authorized Persons". The initial written designation of Authorized Person(s) is appended hereto as Exhibit C-1. The Borrower agrees to provide the Agent with revised written designations in the form of Exhibit C-1 when and as required by changes in authorization or personnel or a change in the Bank. The Agent may conclusively rely upon such revised written designations until a new revised written designation is delivered by Borrower. The Agent agrees to designate in a writing delivered to Borrower those persons authorized to act on behalf of the Agent with respect to actions taken by the Agent under this Agreement and the Agent agrees to provide Borrower with revised written designations in the form of Exhibit C-2 when and as required by changes in authorization or personnel. Section 7. Physical Direct Purchase Notes. All Direct Purchase Notes issued to the Bank pursuant to the Note Purchase Agreement shall be in physical form. The Direct Purchase 2 4148-5812-5339.5 44181-5 Notes shall be in the form set forth in Exhibit A to the Note Ordinance, with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by the Note Ordinance and approved by an Authorized Borrower Representative. For use as described in Section 9 hereof, the Borrower will, prior to the time that it intends to issue Direct Purchase Notes, deliver to the Agent the Direct Purchase Notes to be issued, bearing the manual or facsimile signatures of the requisite number of Authorized Borrower Representatives with all terms included (including principal amount, payee, date of issue, maturity date and interest rate). Section 8. Instructions. (a) The term "Instructions" shall mean a communication, purporting to be from an Authorized Borrower Representative or Authorized Person, in the form of a written notice including those transmitted through facsimile transmittal equipment or via email by way of a .pdf or other manner of scanned attachment thereto of a manually executed document; in each case received by the Agent at the address specified in Section 18 hereof prior to 1:00 p.m. on the day on which the Instructions are to be operative, which shall be a Business Day. (b) If the Agent, at its option, acts upon Instructions transmitted after 1:00 p.m. on the day on which the Instructions are to be operative, Borrower understands and agrees that (i) such Instructions shall be acted upon, on a best efforts basis, and (ii) the Agent makes no representations or warranties that the issuance and delivery of any Direct Purchase Note pursuant to Section 9 hereof shall be completed prior to the close of business on the date of transmission of such Instructions. (c) Any Instructions given to the Agent in a writing from an Authorized Borrower Representative or Authorized Person prior to 1:00 p.m. on the day on which such Instructions are to be operative. In the absence of the Agent's timely receipt of such written Instructions or in the event the Agent acts upon Instructions received after 1:00 p.m. on the day on which the Instructions are to be operative, Borrower understands and agrees that the Instructions received after the aforementioned 1:00 p.m., as understood by the Agent, shall be the true and controlling Instructions for all purposes of this Agreement. Notwithstanding anything to the contrary in this Section 8, Borrower acknowledges that the Agent may act upon the Instructions without any duty to make any inquiry regarding the genuineness of such Instructions. Section 9. Issuance of Direct Purchase Notes. (a) The Agent's sole duties in connection with the issuance of the Direct Purchase Notes in physical form when Borrower delivers printed, typewritten Direct Purchase Notes to the Agent (which shall accompany the copy of the Borrower's request to Bank of America, N.A., as the purchaser, to purchase such particular Note(s) in accordance with the Note Purchase Agreement) pursuant to Section 6 hereof shall be as follows: (i) to hold the printed, typewritten Direct Purchase Notes in safekeeping, pending receipt of Borrower's written Instructions and delivery to the Bank and reasonable care will be exercised by the Agent in maintaining each such Note in safekeeping, which shall not be less than the care maintained by the 4148-5812-5339.5 44181-5 Agent for promissory notes or bonds of other political subdivisions or corporations for which it serves as registrar, or that is maintained for its own promissory notes or bonds; to cause a duly authorized officer or duly authorized employee of the Agent to countersign each Direct Purchase Note for purposes of authentication of the Direct Purchase Note only; and (iii) to deliver the Direct Purchase Notes in accordance with the Instructions (A) by hand, against receipt for payment, (B) by overnight mail to the address provided in the Instructions, (C) pursuant to a custody agreement between the Agent and the Bank, or (D) as otherwise provided in the written Instructions. (b) No Direct Purchase Note shall be delivered by the Agent to the Bank except against payment therefor. A Direct Purchase Note shall be deemed delivered against payment if the proceeds of such Direct Purchase Note are received by the Agent, or the Borrower confirms receipt by the Borrower, in immediately available funds before or at the time of its delivery of such Direct Purchase Note to the Bank. (c) The Agent shall not issue any Direct Purchase Note (i) maturing after the Maximum Maturity Date, (ii) having a term in excess of 365 calendar days, or such shorter term permitted by the Note Purchase Agreement, or (iii) maturing later than the Commitment Expiration Date. The Agent shall issue a Direct Purchase Note only in an authorized denomination allowed under the Note Purchase Agreement. (d) In no event shall the Agent issue any Direct Purchase Note on any date if, after (i) the issuance of such Direct Purchase Note and (ii) transferring to Borrower or, if the Note Payment Fund is held by the Agent, the crediting on such day to the Note Payment Fund of the proceeds received from the sale of Direct Purchase Notes on such day and any other funds for the purpose of paying the Bank the principal amount of Direct Purchase Notes maturing on such date, the aggregate principal amount of Direct Purchase Notes outstanding would exceed the Available Commitment under the Note Purchase Agreement. The Borrower shall advise the Agent of the amount of the Available Commitment under the Note Purchase Agreement, including any change in the amount of the Available Commitment during the term of the Note Purchase Agreement. Section 10. Borrower Certification. Notwithstanding the provisions of Section 9 hereof, the Agent shall not authenticate and deliver Direct Purchase Notes unless it has received the certifications of Borrower in the form required by Section 3.01 of the Note Ordinance and the Instructions are otherwise in conformity with the requirements of the Note Ordinance. Section 11. Payment of Interest, Principal and Redemption Price. (a) By 2:00 p.m on each interest payment date and on the date that any Direct Purchase Notes are scheduled to mature or be redeemed, the Borrower shall ensure that there shall have been deposited in, or, if the Note Payment Fund is held by the Agent, transferred to the Agent for deposit in the Note Payment Fund immediately available funds at least equal to the 4 4148-5812-5339.5 44181-5 interest payable on such date, and the principal amount of Direct Purchase Notes maturing on such date or the redemption price for Direct Purchase Notes to be redeemed on such date. Such interest shall be paid directly by the Borrower or by the Agent from moneys received from Borrower that are on deposit in the Note Payment Fund to the extent funds are available in said fund. If the Note Payment Fund is held by the Agent, when any Direct Purchase Note maturing or to be redeemed is presented by the Registered Owner thereof to the Agent for payment, payment shall be made from and charged to the Note Payment Fund to the extent funds are available in said fund. (b) Each Direct Purchase Note presented to the Agent for payment on any Business Day at or after the maturity or redemption date of such Direct Purchase Note shall be paid by the Agent. (c) For purposes of Section 11(a) and (b), presentment of any Direct Purchase Note may be made to the Agent pursuant to the terms of a custody agreement between the Agent and the Registered Owner, as and to the extent determined necessary by the Agent and the Registered Owner in their sole discretion. Section 12. Mutilated, Lost, Stolen or Destroyed Direct Purchase Notes. If any Direct Purchase Note is mutilated, lost, stolen or destroyed, the Agent shall authenticate and deliver a new Note in accordance with Section 2.06 of the Note Ordinance. Section 13. Inspection of Documents by Noteholders. The Agent shall keep a fully executed, or conformed, copy of the Note Purchase Agreement and this Agreement (together with all amendments, modifications, supplements, waivers and consents made or given with respect thereto) on file at its Designated Office. The Agent shall permit reasonable inspection to be made of such documents by the holder of any Direct Purchase Note or by any officer, employee or agent of such holder; provided that, the person purporting to be such holder establishes to the satisfaction of the Agent that he is in fact the holder of such Note and, in cases where inspection is sought to be made by a person purporting to be an officer, employee or agent of such holder, that such person submits evidence satisfactory to the Agent of his authority to make such inspection on behalf of the holder of such Note. Section 14. Compensation and Expenses. The Borrower agrees: (a) to pay to the Agent a fee in compensation for all services rendered by the Agent hereunder in accordance the schedule of fees attached to this agreement as Exhibit D, and (b) to reimburse the Agent upon request for all reasonable expenses, disbursements incurred or made by the Agent in accordance with any provisions of this Agreement (including the reasonable compensation and the expenses and disbursements of the Agent's counsel), except any such expense, disbursement as may be attributable to the negligence or willful misconduct of the Agent. Section 15. Representations and Warranties. In addition to any other representations and warranties on the part of the Borrower contained herein, Borrower hereby represents and warrants that its entry into this Agreement, and the appointment of the Agent by Borrower as paying agent/registrar are within Borrower's powers and have been duly authorized 5 4148-5812-5339.5 44181-5 by all necessary action and will not violate, breach or contravene any provision of any law, rule, regulation, order, contract or agreement binding upon Borrower. In addition, Borrower represents and warrants that the issuance of the Direct Purchase Notes is within Borrower's powers and has been duly and validly authorized by all necessary action, that such issuance will not violate any provisions of law, and that such Direct Purchase Notes, when completed, authenticated and delivered pursuant hereto, will constitute Borrower's legal, valid and binding obligation. Section 16. Term and Termination. (a) Either the Agent or Borrower may terminate this Agreement, and the authority granted herein, at any time upon not less than thirty (30) days' prior written notice given to the other party to this Agreement and the Bank specifying the termination date hereof. In either such event, Borrower shall appoint a successor paying agent/registrar with the prior written consent of the Bank, which consent may not be unreasonably withheld. Such termination shall not take effect until a successor is appointed. Promptly following the Agent's receipt or giving of such notice, the Agent shall redeliver to the successor all Direct Purchase Notes then held by the Agent hereunder for Borrower's account for safekeeping, against receipt by the successor, and shall transfer to the successor paying agent/registrar all funds, if any, then on deposit in, or otherwise to the credit of the Note Payment Fund (if then held by the Agent) in excess of that amount which is equal to the principal amount of all Outstanding Direct Purchase Notes, plus accrued interest, theretofore issued by the Agent hereunder which will mature prior to the effective date of the Agent's resignation. (b) Any Direct Purchase Notes Outstanding on the date of any termination of this Agreement pursuant to paragraph (a) of this Section 16 shall nevertheless remain valid obligations of Borrower, and the provisions of this Agreement (including the Agent's obligations hereunder to pay maturing Direct Purchase Notes issued by the Agent hereunder) shall continue to be applicable with respect to the payment of such Direct Purchase Notes to the same extent as if this Agreement had not terminated. (c) No Direct Purchase Notes shall be delivered to the Agent by Borrower for safekeeping or issuance hereunder at any time following the day preceding the termination date set forth in a notice to or from the Agent of the termination of this Agreement. Section 17. Amendments and Modifications. No amendment, modification, termination or waiver of any provision of this Agreement shall be effective unless the same shall be in writing and signed by all of the parties (including the consenting parties) hereto and unless the consent of the Bank has been obtained, which consent shall not be unreasonably withheld. No such amendment, modification, termination or waiver shall adversely affect the rights of the holder or holders of any Direct Purchase Note outstanding at the time of such amendment, modification, termination or waiver unless consented to in writing by such holder or holders. Section 18. Notices. Except where instructions or notices are authorized herein to be given, all notices, demands, instructions and other communications hereto shall be in writing and shall be personally delivered or sent by first-class or express mail, postage prepaid, return receipt requested, or by e-mail (if an e-mail address is set forth below in this Section 18 or otherwise provided pursuant to this Section 18), and shall be deemed to be given for purposes of this 6 4148-5812-5339.5 44181-5 Agreement on the date that such writing is delivered or sent to the intended recipient thereof in accordance with the provisions of this Section 18. Unless otherwise specified in a notice sent or delivered in accordance with the foregoing provisions of this Section 18, notices, demands, instructions and other communications in writing shall be given to or made upon the following parties at their respective addresses (or to their respective e-mail addresses (if an e-mail address is set forth below in this Section 18 or otherwise provided pursuant to this Section 18) indicated below, or at such other address as any party hereto may notify to the other parties hereto in accordance with the provisions of this Section 18: If to the Agent: The Bank of New York Mellon Trust Company, N.A. 2001 Bryan Street, 1 Oth Floor Dallas, Texas 75201 Attention: Marcus Wilson Email: marcus.wilson@bnymellon.com If to Borrower: City of Lubbock, Texas 1625 13th Street Lubbock, Texas 79457 Attention: Assistant Director of Electric Utilities/CFO E-mail: aburcham@lpandl.com If to the Bank: Bank of America, N.A. 211 N. Robinson, 2nd Floor Oklahoma City, Oklahoma 73102 Attention: Brent Riley E-Mail: brent.riley@baml.com Section 19. Binding Effect; Assignment. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. No party hereto may assign any of its rights or obligations hereunder except with the prior written consent of all parties hereto, including the consenting parties. Section 20. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Texas. Section 21. Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute one and the same Agreement. The delivery of copies of this Agreement, as so executed, by Adobe Acrobat .pdf scan or other manner of scanned email attachment or facsimile transmission shall constitute effective execution and delivery as to the parties and may be used in lieu of originals for all purposes. 7 4148-5812-5339.5 44181-5 Section 22. Headings. Section headings used in this Agreement are for convenience only and shall not affect the construction of this Agreement. Section 23. No Petition. The Agent, solely in the capacity as paying agent/registrar, hereby covenants and agrees that it will not institute against, or join any person in instituting against, Borrower any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any Federal or state bankruptcy or similar law, for one year and one day after the latest maturing Note is paid in full. Section 24. Limited Duties. (a) It is understood that the Agent shall hold and apply funds in the Note Payment Fund only to the extent the Note Payment Fund is held by the Agent and as provided in this Agreement and the Note Ordinance on behalf of the holders of the respective Direct Purchase Notes, from time to time, and that the Agent shall have no obligation to exercise on behalf of the holders of Direct Purchase Notes any rights or to ensure that Borrower complies with the provisions of the Note Ordinance or this Agreement. The Agent shall not be liable for any action taken, suffered, or omitted or for any error of judgment made by the Agent or its agents or attorneys in the performance of the duties under this Agreement, except to the extent that a court of competent jurisdiction finally determines that the Agent's willful misconduct or negligence directly caused a loss to Borrower. In no event shall Agent be liable for incidental, indirect, special, consequential or punitive damages or penalties of any kind (including, but not limited to lost profits), even if Agent has been advised of the likelihood of such damages or penalty and regardless of the form of action. The Agent may rely and shall be protected in acting or refraining from acting upon any communication authorized by this Agreement and upon any written instruction, notice, confirmation, request, direction, consent, report, certificate, Note or other instrument, paper or document believed by the Agent to be genuine. The Agent may consult with counsel and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by the Agent hereunder in good faith and in reliance thereon. The Agent shall not be required to expend or risk its own funds or otherwise incur or become exposed to financial liability in the performance of the duties hereunder. The Agent may perform its duties and exercise its rights hereunder either directly or by or through agents or attorneys. The Agent undertakes to perform such duties and only such duties as are expressly set forth in this Agreement, each of which is ministerial and non - discretionary in nature, and no implied covenants shall be read into this Agreement against the Agent. (b) The Agent is authorized, in its sole discretion, to comply with orders issued or process entered by any court with respect to the Note Payment Fund if the Note Payment Fund is held by the Agent, to the extent that such court has jurisdiction in the matter. If any portion of the Note Payment Fund is at any time attached, garnished or levied upon under any court order, or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered by any court affecting such property or any part thereof, then and in any such event, the Agent is authorized, in its sole discretion, to rely upon and comply with any such order, writ, judgment or decree which it is advised by legal counsel selected by it is binding upon it, without the need for appeal or other action; and if the Agent complies with any such order, writ, 8 4148-5812-5339.5 44181-5 judgment or decree, it shall not be liable to any of the parties hereto or to any other person or entity by reason of such compliance even though such order, writ, judgment or decree may be subsequently reversed, modified, annulled, set aside or vacated. Section 25. No Personal Liability. No member of the City Council, officer, employee, trustee or agent of the Borrower shall be personally liable for the payment of any amount owing by the Borrower in respect to Section 11 hereof or for the payment by the Borrower of any fee hereunder or any other obligation of the Borrower or claim against the Borrower arising out of or based upon this Agreement. Section 26. Indemnification. TO THE EXTENT PERMITTED BY TEXAS LAW, BORROWER AGREES TO INDEMNIFY AND TO HOLD HARMLESS THE AGENT AND EACH DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY, AGENT AND AFFILIATE OF THE AGENT (COLLECTIVELY, THE "INDEMNIFIED PARTIES") AGAINST ANY LOSS, DAMAGE, CLAIM, LIABILITY OR EXPENSE (INCLUDING REASONABLE COST OF DEFENSE AND THE REASONABLE COST OF AGENT'S ENFORCEMENT OF BORROWER'S OBLIGATIONS UNDER THIS SECTION 26) ARISING OUT OF, OR BASED UPON THE PERFORMANCE OF SUCH INDEMNIFIED PARTY'S DUTIES UNDER THIS AGREEMENT, EXCEPT FOR ANY LOSS, DAMAGE, CLAIM, LIABILITY OR EXPENSE DIRECTLY CAUSED BY THE NEGLIGENCE OR WILLFUL MISCONDUCT OF THE INDEMNIFIED PARTIES. THE FOREGOING INDEMNIFICATION SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT OR THE RESIGNATION OR REMOVAL OF THE AGENT FOR ANY REASON. Section 27. Force Maieure. In no event shall the Agent be liable for any failure or delay in the performance of its obligations under this Agreement due to circumstances beyond the Agent's control, including, but not limited to, acts of God, flood, war (whether declared or undeclared), terrorism, fire, riot, embargo, government action, including any laws, ordinances, regulations or the like which restrict or prohibit the providing of the services contemplated by this Agreement. Section 28. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the matters covered hereby, and supersedes all prior agreements and understandings between the parties. Section 29. Fax/ -Email. The Agent shall have the right to accept and act upon instructions, including funds transfer instructions ("Instructions") given pursuant to this Agreement and delivered using Electronic Means (hereafter defined); provided, however, that the Borrower shall provide to the Agent an incumbency certificate listing officers with the authority to provide such Instructions ("Authorized Officers") and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Borrower whenever a person is to be added or deleted from the listing. If the Borrower elects to give the Agent Instructions using Electronic Means and the Agent in its discretion elects to act upon such Instructions, the Agent's understanding of such Instructions shall be deemed controlling. The Borrower understands and agrees that the Agent cannot determine the identity of the actual sender of such Instructions and that the Agent shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency 9 4148-5812-5339.5 44181-5 certificate provided to the Agent have been sent by such Authorized Officer. The Borrower shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Agent and that the Borrower and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Borrower. The Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Agent's reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The Borrower agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Agent, including without limitation the risk of the Agent acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Agent and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Borrower; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Agent immediately upon learning of any compromise or unauthorized use of the security procedures. "Electronic Means" for purposes of this section shall mean the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Agent, or another method or system specified by the Agent as available for use in connection with its services hereunder. [Signature Page Follows.] 10 4148-5812-5339.5 44181-5 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. CITY OF LUBBOCK, TEXAS DANIEL M. POPE, MAYOR (SEAL) ATTEST: Reb cca Garza, City <ectr [Signature page for Paying Agent, Registrar Agreement] 4148-5812-5339.5 44181-5 THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. By: Its: [Signature page for Paying Agent/Registrar Agreement] 4148-5812-5339.5 44181-5 EXHIBIT A Program Note Ordinance A-1 4148-5812-5339.5 44181-5 EXHIBIT B Certificate of Incumbency The undersigned hereby certifies that the persons identified below are the duly qualified and acting officers of the CITY OF LUBBOCK, TEXAS ("Borrower"); and, with respect to the Note Purchase Agreement dated as of June 5, 2019, and any amendments thereto (collectively, the "Agreement"), by and between Borrower and BANK OF AMERICA, N.A., that such persons hold the respective offices or positions set forth opposite their signatures below; that the signatures below written are true and correct signatures of said persons and that as of the date of execution of the Agreement such persons were duly qualified and acting as the officers or position holders indicated below and duly authorized to execute the same: Name Office or Position Signature Daniel M. Pope Mayor L—f�� W. Jarrett Atkinson City Manager D. Btu Kostelich Chief Financial Officer David McCalla Director of Electric Utilities Assistant Director of Electric Andy Burcham Utilities/CFO Dated: 2019 By: __�Q'o �"O'; . Reb ca Garza, ecretary 4148-5812-5339.5 44181-5 EXHIBIT C-1 Designation of Borrower Authorized Persons Name Daniel M. Pope W. Jarrett Atkinson D. Blu Kostelich David McCalla Andy Burcham 4148-5812-5339 5 44181-5 Office of Position Mayor City Manager Chief Financial Officer Director of Electric Utilities Assistant Director of Electric Utilities/CFO C-1-1 EXHIBIT C-2 Designation of Agent Authorized Persons C-2-1 4148-5812-5339.5 44181-5 EXHIBIT D Fee Schedule Lubbock Power and Light Direct Purchase Note Program 2019 March 1, 2019 Presented By: I Fee Schedule for the following: BNY Mellon Corporate Trust • Paying Agent • Registrar D- I 4148-5812-5339.5 44181-5 BNY MELLON ONY Mellon Corporate Trust Fee Schedule for Lubbock Power and Light Direct Purchase Note Program 2019 Fee Schedule Subject to the Terms and Dischnures below, upon appointment of The Bank of New York Mellon Trust Company, NA. I' BNYM" or "us" or "affiliates' or "subsidiaries"I In the rolesasoutilned within this Fee Schedule (this "FeeSchedule"l, Lubbock Power and Light ("Client") shall be responsible for the payment of the fees, expenses and charges as set forth herein. Fees are payable or accrue at the time of the execution of the governing documents (the "Transaction Documents"I in connection with the closing of the transaction Ithe 'Transaction") which is the subject of this fee Schedule General Fees r , the Transaction Acceptance Fee Is payable at the time of the execution of the governing documents In connection with the closing of the transaction which is the subject of this Agreement (the `rransaction"), and compensates BNYM for the following. review of all supporting documents, Initial establishment of the required accounts and Know Your Client checks. Charges related to the Issuance of a note and related set up an the systems, the subsequent installment deliveries of a note, or the redemption of a note and the related taking the note off the systems. Issuance or Delivery $ 300 Call or Redemption $300 Maturity or interest Payment $300 A charge coveting the normal duties and responsiblhtl $7SO per year. This fee Is payable annually In advance. With respect to Investments In money market mutual funds for which BNYM provides shareholder services, BNYM for Its affiliates) may receive fees from the mutual funds for their affiliates) for shareholder services as set forth in the Authorization and Direction to invest Cash Balances in Money Market Mutual Funds or other similar fees described in the fund prospectus BNYM wi!J charge a $115 transaction fee for the purchase or sale of commercial paper, US. treasuries and agencies or other securty. The charges for performing extraordinary or other services not contemplated at the time of the execution of the Transaction Documents or not specifically covered elsewhere In this schedule will be commensurate with the service to be provided and may be charged In BNY Melon's sole discretion. If it Is contemplated that BNY Mellon hold/and or value collateral, additional acceptance, administration and counsel review fees will be applicable to the agreement governing such services. 1f the bonds are converted to certificated form, additional annual fees will be charged for any applicable tender agent and/or registrar/paying agent services. Additional Information will be provided at such time. if all outstanding bonds of a series are defeased or redeemed, or BNY Mellon is removed as paying agent prior to the maturity of the bonds, a termination fee maybe assessed at that time. PRIVATE AND CONF1DENT1AL The Infomrellon contained within this Fee Schedule is the proprietary Information of The Bank of New York Mellon and Is confidential. Except as allmrwise provided by law, this document. either In whole or In part, must not be reproduced or disclosed to others or used for purposes other than that far which It has been supplied without the prior written permissbon of The Bank of New York Mellon. 2 D-2 4148-5812-5339.5 44181-5 BNY Mellon Corporate Trust Fee Schedule for Lubbock Power and l fight Direct Purchase Note Program 2019 Miscellaneous fees and expenses may include, but are not necessarily limped to supplemental agreements, tender processing, the preparation and distribution of sinking fund redemption notices, optional redemptions, failed remarketing processing, preparation of special or interim reports. UCC filing fees, auditor confirmation fees, wire transfer fees, Letter of Credit drawdown fees, transaction fees to settle third -party trades, and reconcilement fees to balance trust account balances to third -party Investment provider statements. Counsel, accountants, special agents and others will be charged at the actual amount of fees and expenses Wed. FDIC or other governmental charges will be passed along as Incurred. Reimbursement will be required for any out-of-pocket expenses and will be Invoiced to the Client in an amount equal to 6% of the fees billed for the year. Client agrees to reimburse BNYM for extraordinary expenses incurred by it in connection with the Transaction to the extent permitted by law. Negative Interest Rates — Charges With respect to any funds Invested by BNYM In connection with the Transaction, iC (I) any recognized overnight benchmark rate or any official overnight Interest rate set by a central bank or other monetary authority Is negative or zero, or (Irl any market counterparty or other Institution applies a negative interest rate or any related charge to any account or balance of BNYM or any account or balance opened for You by BNYM, BNYM may apply a charge to any of Your accounts or balances BNYM vrill give You prompt written notice of the application of any such charges. You acknowledge and agree that the application of such a charge by BNYM may cause the effective interest rate applicable to Your account or balance to be negative, notwithstand, ng that one or more of the rates set by third parties specified in clauses (1) and Iil) above may be positive. Terms and Disclosures General BNYM's final acceptance of Its appointment pursuant to the Transaction Documents is sub;ect to the full review and approval of all related documentation and standard Know Your Client procedures. in the event that this Transaction does not proceed with BNYM in the roles contemplated by this Fee Schedule and the Transaction Documents, Client will be responsible for payment of any external counsel fees and expenses and out-of-pocket expenses which BNYM may have incurred up to and including the termination date. Client shall be responsible for filing any applicable information returns with the U.& Department of Treasury, Internal Revenue Service in connection with payments made by BNYM to vendors who have not performed services for BNYM's benefit under the various bond or note Issuances or other undertakings contemplated by this Fee Schedule. The Bank of New York Mellon Corporation is a global financial organization that operates in and provides services and products to clients through Its affiliates and subsidiaries located in multiple Jurisdictions (the "BNY Me!Ion Group"), The BNY Mellon Group may (1) centralize in one or more affiliates and subsidiaries certain activities (the 'Centralized Functions"), including audit, accounting, administration, risk management, legal, compliance, sales, product communication, relationship management, and the compilation and analysis of Information and data regarding Client (which, for purposes of this provision, includes the name and business contact Information for Client employees and representatives) and the accounts established pursuant to the Transaction Documents I"Client information") and (III use third party service providers to store, maintain and process Client information ("Outsourced functions"). Notwithstanding anything to the contrary contained elsewhere In this fee Schedule or the Transaction Documents and solely in connection with the Centralized functions and/or Outsourced functions, Client consents to the disclosure of, and authorizes BNY Mellon to disclose, Client Information to 11) other members of the BNY Mellon Group land their respective officers, directors and employees) and to III) third -party, service providers (but solely in connection with Outsourced Functions) who are required to maintain the confidentiality of Client Information_ In addition, the BNY Mellon Group may aggregate Client Information with other data collected and/or calculated by the BNY Mellon Group, and the BNY Mellon Group will own all such aggregated data, provided that the BNY Mellon Group shall not distribute the aggregated data In a format that identifies Client Information with Client specifically. Client represents that it is authorized to consent to the foregoing and that the disclosure of Client Information in connection with the Centralized Functions and/or Outsourced Functions does not violate any relevant data protection legislation. Client also consents to the disclosure of Client Information to governmental and regulatory authorities In jurisdictions where the BNY Mellon Group operates and otherwise as required by law - PRIVATE AND CONFIDENTIAL The Information contained within this Fee Schedule is the proprietary Informatlon of The Bank of New York Mallion and Is confidential. Except as otherwise provided by law, this documerd, either in whole or In part, must not be xoproduced or disclosed to others or used for purposes other than that tot which it has been supplied wlthoul the prior wrhlen perrtiission of The Bank of New York Mellon_ D-3 4148-5812-5339.5 44181-5 BNY Mellon Corporate Truitt Fee Schedule for Lubbock Power and Lmgh1 Direct Purchase Note Program 2019 Client agrees that BNYM shall have no obligation to expend or risk its own funds or otherwise to Incur any liability, financial or otherwise, in the performance of any of its duties as paying agent or registrar in connection with the Transaction, or in the exercise of any of its rights or powers in connection therewith, If it shall have reasonable grounds for believing that repayment of such funds Is not assured to it. Client agrees to reimburse BNYM for extraordinary expenses incurred by it in connection with the Transaction to the extent permitted by law. Please note the fees quoted In this Fee Schedule are based upon the Information available at the present time. Further quotes may be provided once the structure of the deal has been finalized. Annual Fees cover a period of one year and any portion thereof and afe not subject to pro -ration- Fees may be subject to adjustment during the life of the engagement. Advance Fees BNYM requires that Client agree to the fees quoted m this Fee Schedule prior to the commencement of any work or the provision of any services by BNYM in relation to the Transaction, in the event that BNYM provides any services to Client prior to your aireement to the fees quoted herein, the commencement of such work or the provision of such services shall not be deemed to constitute a waiver of the fees listed in this Fee Schedule BNYM reserves the right to cease providing services until such time as Client agrees to the fees quoted herein. BNYM reserves the right to request that any and all fees due and payable pursuant to this Fee Schedule and related in any way to the Transaction are paid in advance (either In whole or in part) prior to the provision of any serv,tes. Acceptance/Revocation of Offer You may agree to the fees quoted herein by (I) executing this Fee Schedule and returning It to us, (d) closing the Transaction, or (di) instructing us or continuing to instruct us after receipt of this Fee Schedule. Upon the earlier to occur of (I), 111) and (Ili), the fees quoted herein shall be deemed accepted by you. if you agree to the fees quoted herein, the terms of this Fee Schedule shall supersede any prior fees quoted with respect to the Transaction_ BNYM may revoke the terms of this fee Schedule if the Transaction does not close within three months from the date of this Fee Schedule. Should the Transaction fail to close for any reason, a termination fee equal to BNYM's Acceptance Fee, any external counsel fees, expenses and disbursements and all out-of-pocket expenses will apply. Confidential Information Except as otherwise provided by law, all information provided to Client by BNYM must remain confidential and may not be Intentionally disclosed, reproduced, copied, published, or displayed In any form to any third party without BNYM's prior written approval. Client Notice Required By the USA Patriot Act To help the U.S. government fight the funding of terrorism and money laundering activities, US Federal law requires all financial Institutions to obtain, verity and record Information that identifies each person (whether an Individual or organizatloni for which a relationship Is established. When Client establishes a relationship with BNYM, we will ask Chent to provide certain information (and documents) that will help usto Identify Client. Wewill askforyour organization's name, physical address, tax identification or other government registration number and other information that will help us identify Client We may also ask for a Certificate of Incorporation or similar document or other pertinent identifying documentation for your type of organization. PRIVATE AND OONFIDENTIAL The Information contained within this Fee Schedule Is the proprietary Information of The Bank of New York Mellon and Is confidentleL Except as otherwise provided by law, this documerh, either In whole or in part, must not be reproduced or disclosed to others or used for purposes other than Ihal for which It has been supplied without the prior written permission of The Bank of New York Mellon. D-4 4148-5812-5339.5 44181-5 The Attorney General of Texas Public Finance Division William P. Clements Building 300 West 15th Street, 7`1' Floor Austin, Texas 78701 June , 2019 The Comptroller of Public Accounts Public Finance Division I I I East 17th Street Austin, Texas 78701 Re: City of Lubbock, Texas — Electric Light and Power System Revenue Revolving Note Program (the "Revolving Note Program") Ladies and Gentlemen: A transcript pertaining to the Revolving Note Program is hereby submitted to the Office of the Attorney General, and it is requested that such office examine and approve the transcript of proceedings in accordance with law. The transcript contains a signed but undated copy of the GENERAL CERTIFICATE (the "Certificate") relating to the Revolving Note Program. The Attorney General is hereby authorized and directed to date the Certificate concurrently with the date of approval of the transcript. If any litigation or contest should develop pertaining to the Revolving Note Program, 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 transcript unless the Attorney General is notified otherwise as aforesaid. CITY OF LUBBOCK, TEXAS By. MayorV 4132-4197-2508.1 MINUTES AND CERTIFICATION PERTAINING TO PASSAGE OF AN ORDINANCE STATE OF TEXAS COUNTY OF LUBBOCK CITY OF LUBBOCK On the 23rd day of April, 2019, 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: Daniel M. Pope, Mayor Juan A. Chadis ) Jeff Griffith, Mayor Pro Tern Shelia Patterson Harris ) Members of Latrelle Joy ) the Council Steve Massengale ) Randy Christian ) and all of said persons were present, except N/A , thus constituting a quorum. Whereupon, among other business, a written Ordinance bearing the following caption was introduced: AN ORDINANCE ESTABLISHING AN ELECTRIC LIGHT AND POWER SYSTEM REVENUE REVOLVING NOTE PROGRAM AND AUTHORIZING THE ISSUANCE OF PROGRAM OBLIGATIONS, FROM TIME TO TIME, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $300,000,000 OUTSTANDING AT ANY ONE TIME, PRESCRIBING THE TERMS, FEATURES AND CHARACTERISTICS OF SUCH OBLIGATIONS; APPROVING AND AUTHORIZING CERTAIN AUTHORIZED OFFICERS AND EMPLOYEES OF THE CITY TO ACT ON BEHALF OF THE CITY IN THE SALE AND DELIVERY OF SUCH OBLIGATIONS, WITHIN THE LIMITATIONS SPECIFIED HEREIN; MAKING CERTAIN COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; PROVIDING FOR THE PAYMENT OF THE OBLIGATIONS; RESOLVING OTHER MATTERS RELATED THERETO, INCLUDING APPROVAL OF A NOTE PURCHASE AGREEMENT AND A PAYING AGENT/REGISTRAR AGREEMENT; AND PROVIDING AN EFFECTIVE DATE 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: 7 4130-6666-8060.1 00*-� ABSTENTIONS: 0 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 23rd day of April, 2019. 4ity L",ecretary City ubbock, Texas [SEAL] 4130-6666-8060.1 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 Revolving Notes (the "Notes"). 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 Notes or the Note Purchase Agreement (as defined in the Ordinance). 2. The City of Lubbock, Texas, is a duly incorporated Home Rule City with a population greater than 50,000 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: Daniel M. Pope, Mayor Juan A. Chadis ) Jeff Griffith, Mayor Pro Tern Shelia Patterson Harris ) Members of Latrelle Joy ) the Council Steve Massengale ) Randy Christian ) W. Jarrett Atkinson, City Manager D. Blu Kostelich, Chief Financial Officer David McCalla, Director of Electric Utilities Andy Burcham, Assistant Director/Chief Financial Officer, Electric Utilities Rebecca Garza, City Secretary 4. The City is a qualified issuer pursuant to the provisions of Texas Government Code, Chapter 1371.001(4)(A), as amended. 5. 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 Notes, the Outstanding Previously Issued Bonds (consisting of the City's Electric Light and Power System Revenue Bonds, Series 2010, Electric Light and Power System Revenue Refunding and Improvement Bonds, Series 2013, Electric Light and Power System Revenue Bonds, Series 2014, Electric Light and Power System Revenue Bonds, Series 2015, Electric Light and Power System Revenue Bonds, Series 2016, Electric Light and Power System Revenue Bonds, Series 2017, and Electric Light and Power System Revenue Bonds, Series 2018). 6. The revenues and expenses of the System set forth on Exhibit A hereto, are true and correct as of the date hereof. 7. The rates charged by the System for services provided set forth on Exhibit B hereto, are true and correct as of the date hereof. 4132-4483-2027.1 8. The debt service requirements for the Outstanding Previously Issued Bonds and Additional Bonds issued as fixed rate refunding bonds to refund the Notes set forth on Exhibit C hereto, are true and correct as of the date hereof. 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 Notes, the collection of Net Revenues to pay the principal of and interest on the Notes 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 Notes. 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 Notes 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 undersigned Mayor and City Secretary officially executed and signed the Notes, including the Initial Note delivered to the Initial Purchaser (the "Initial Note"), by manual signature or by causing facsimiles of our manual signatures to be imprinted or lithographed on each of the Notes, 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 Notes. 13. The Notes, including the Initial Note, are substantially in the form, and have been duly executed and signed in the manner, prescribed in the Ordinance. 14. At the time the undersigned Mayor and City Secretary so executed and signed the Note Purchase Agreement and the Notes, 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. 15. All conditions precedent set forth in the Ordinance with respect to issuance of the Notes have been satisfied. 16. (A) The representations and warranties of the City contained in each of the Program Documents and each certificate, letter, other writing or instrument delivered by the City to the Bank pursuant hereto or thereto are true and correct on and as of the Closing Date as though made on and as of such date; (B) no Default or Event of Default has occurred and is continuing or would result from the City's execution and delivery of the Note Purchase Agreement, or the acceptance of the Commitment by the City; (C) the audited annual financial statements of the City for the Fiscal Year ended September 30, 2018, including the balance sheet as of such date of said period, all examined and reported on by Weaver and Tidwell, L.L.P., as heretofore delivered to the Bank, correctly and fairly present the financial condition of the City as of said date and the results of the operations of the City for such period and have been prepared in accordance with GAAP consistently applied, except as stated in the notes thereto; (D) since the release of the 2 4132-4483-2027.1 audited annual financial statements of the City for the Fiscal Year ended September 30, 2018, no Material Adverse Change with respect to the City has occurred prior to the Closing Date; (E) the acceptance of the Commitment by the City pursuant to the Note Purchase Agreement is an arm's length commercial transaction between the City and the Bank; (F) the City has consulted with its own respective legal and financial advisors in connection with the acceptance of the Commitment by the City pursuant to the Note Purchase Agreement; (G) the Bank has not acted as a fiduciary in favor of the City with respect to the Notes or the acceptance of the Commitment by the City; (H) to the best knowledge of the City, the underlying unenhanced long-term ratings assigned to any Revenues Secured Debt by Fitch, Moody's and S&P have not been reduced, withdrawn or suspended since the date of the Rating Documentation and (I) all conditions in Section 5.1 of the Note Purchase (other than (viii), (xi) and (xii) (to the extent of any law, regulation, ruling or other action of the State of New York or any political subdivision or authority therein) for which the City has no knowledge) have been satisfied. 17. With respect to the contracts executed in connection with the authorization and issuance of the Notes, all disclosure filings and acknowledgements required by Section 2252.908, Texas Government Code, and the rules of the Texas Ethics Commission related to said provision, have been made. 18. That with respect to the contracts executed in connection with the authorization and issuance of the Notes: a. all disclosure filings and acknowledgements required by Section 2252.908, Texas Government Code, and the rules of the Texas Ethics Commission related to said provision, have been made; b. pursuant to Section 2270.002, Texas Government Code, the City has not entered and is not entering into governmental contracts with companies that Boycott Israel (as such term is defined in Section 2270.001, Texas Government Code); and C. pursuant to Section 2252.152, Texas Government Code, the City has not entered and will not enter into a governmental contract with a company that is identified on a list prepared and maintained by the Comptroller of Public Accounts under Sections 806.051, 807.051, or 2252.153, Texas Government Code. 19. The Attorney General's office is authorized to date this Certificate as of the date of delivery of its approving opinion in reliance upon the commitment of the undersigned to notify your office immediately if any of the information contained herein ceases to be correct in all material respects. [EXECUTION PAGE FOLLOWS] 3 4132-4483-2027.1 EXECUTED AND DELIVERED this , 2019. 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 Daniel M. Pope, 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. d GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS `�W kL' LU 4 2019. ' 4 V ?p4PpY Pu�O JENNIFER SOWDER CLEMENTS * Notary Public, State of Texas Notary IN 12497068.3 S, OF F6 My Commission Expires 06-28.2020 [SEAL] Notary Public, and for the State of Texas Signature Page for General Certificate 4132-4483-2027.1 EXECUTED AND DELIVERED this MANUAL SIGNATURE STATE OF TEXAS COUNTY OF LUBBOCK 119. OFFICIAL TITLE City Manager, City of Lubbock, Texas Before me, the undersigned authority, on this day personally appeared W. Jarrett Atkinson, 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 , 2019. notary ruonc, and for the State of Texas zo, "PSG JENNIFER SOWDER CLEMENTS Notary Pubk, State of Texas [SEAL] * Notary IN 12497068.3 '+ 00 My Commission Expires 06-28.2020 Signature Page for General Certificate 4132-4483-2027.1 EXECUTED AND DELIVERED this MANUAL SIGNATURE STATE OF TEXAS COUNTY OF LUBBOCK )19. OFFICIAL TITLE City Secretary, City of Lubbock, Texas 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 sur-1, person executed the above and foregoing certificate for the purposes therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS , 2019. �D�PpV P"B<i JENNIFER SOWDER CLEMENTS' Notary Public, State of Texas Notary ID# 12497068.3 My Commission Expires 06-28.2020 [SEAL j Notary Public, n and for the State of Texas Signature Page for General Certificate 41324483-2027.1 EXHIBIT A Revenues and Expenses of the System Exhibit A 4132-4483-2027.1 EXHIBIT B Rates of the System Exhibit B 4132-4483-2027.1 EXHIBIT C Debt Services Requirements Exhibit C 4132-4483-2027 1 CHAPMAN DRAFT DATED APRIL 12, 2019 NOTE PURCHASE AGREEMENT dated June 5, 2019 between CITY OF LUBBOCK, TEXAS and BANK OF AMERICA, N.A. Note Purchase Agreement (Lubbock TX) 4289096 TABLE OF CONTENTS SECTION HEADING PAGE ARTICLE I DEFINITIONS................................................................................................. l Section1.1. Defined Terms........................................................................................I Section 1.2. Other Interpretive Provisions...............................................................16 Section 1.3. Accounting Terms................................................................................16 Section1.4. Rounding..............................................................................................16 Section1.5. Times of Day........................................................................................17 ARTICLE II SALE AND PURCHASE; CLOSING..................................................................17 Section 2.1. Purchase and Sale of Notes; Initial Purchase.......................................17 Section2.2. Closing.................................................................................................18 Section 2.3. Method of Purchase.............................................................................18 Section2.4. Interest Rate.........................................................................................20 Section2.5. Payment................................................................................................20 Section2.6. Fees......................................................................................................21 Section 2.7. Reduction and Termination..................................................................23 Section2.8. Taxability.............................................................................................23 Section 2.9. Funding Indemnity...............................................................................24 Section 2.10. Extension of Commitment Expiration Date.........................................25 Section 2.11. Security of Obligations........................................................................25 Section 2.12. Suspension Events...............................................................................25 ARTICLE III LIABILITY, INDEMNITY AND PAYMENT.......................................................26 Section 3.1. Liability of the Agency........................................................................26 Section 3.2. Indemnification by the Agency............................................................26 Section 3.3. Increased Costs....................................................................................27 Section3.4. Taxes....................................................................................................28 Section 3.5. Maximum Rate; Default Rate..............................................................28 Section 3.6. Liability of the Bank............................................................................29 Section 3.7. Obligations Unconditional...................................................................29 Section3.8. Illegality...............................................................................................30 Section 3.9. Inability to Determine Rates................................................................30 ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................31 Section 4.1. Representations of the Agency............................................................31 ARTICLEV CONDITIONS................................................................................................36 Section 5.1. Closing Conditions...............................................................................36 Section 5.2. Certain Conditions to Bank's Obligations...........................................39 Section 5.3. Satisfaction or Waiver of Conditions...................................................40 ec ARTICLEVI COVENANTS................................................................................................40 Section 6.1. Covenants of the Agency.....................................................................40 ARTICLE VII DEFAULTS AND REMEDIES ..........................................................................47 Section 7.1. Events of Default Section7.2. .................................................................................47 Remedies ..............................................................................................49 Section 7.3. Suits at Law or in Equity and Mandamus............................................50 Section7.4. No Waiver............................................................................................50 Section 7.5. Discontinuance of Proceedings............................................................51 ARTICLEVIII GENERAL....................................................................................................51 Section8.1. Notices.................................................................................................51 Section 8.2. Successors Assigns and ........................................................................51 Section8.3. Amendments........................................................................................53 Section 8.4. Governing Law; Jurisdiction; Etc........................................................53 Section 8.5. Waiver of Jury Trial.............................................................................54 Section8.6. Counterparts.........................................................................................54 Section8.7. Severability ..........................................................................................55 Section 8.8. Survival of this Agreement..................................................................55 Section8.9. Effectiveness........................................................................................55 Section 8.10. No Personal Liability...........................................................................55 Section 8.11. USA Patriot Act...................................................................................55 Section 8.12. Notice of Final Agreement...................................................................56 Section 8.13. No Advisory or Fiduciary Relationship...............................................56 Section8.14. Israel Boycott.......................................................................................56 Section 8.15. Texas Government Code Section 2252.152.........................................56 EXHIBIT A Form of Request for Purchase EXHIBIT B Form of Notice of Continuation/Conversion EXHIBIT C Form of Request for Extension EXHIBIT D --- Form of Notice of Termination EXHIBIT E ---- Form of Notice of Termination or Reduction EXHIBIT F -- Form of Notice of Reduction EXHIBIT G — Form of Notice of Extension EXHIBIT H -- Form of Investor Letter EXHIBIT I — Form of Compliance Certificate M NOTE PURCHASE AGREEMENT June 5, 2019 City of Lubbock, Texas 1625 131" Street Lubbock, Texas 79457 Attention: City Council Ladies and Gentlemen: The undersigned Bank of America, N.A. (the "Bank") offers to enter into this Note Purchase Agreement (as amended, supplemented or otherwise modified from time to time, the Agreement) with the City (as hereinafter defined), for the purchase by the Bank and sale by the City of the Notes specified below. This offer is made subject to the City's written acceptance on the Closing Date, and upon such acceptance this Agreement shall be in full force and effect in accordance with its terms and shall be binding upon the City and the Bank. ARTICLE I DEFINITIONS Section 1.1. Defined Terms. Capitalized terms not otherwise defined herein shall have the same meanings as are set forth in the Ordinance (as defined herein). In addition to the terms defined elsewhere in this Agreement, the following terms shall have the indicated meanings: "1933 Act" means the Securities Act of 1933, as the same shall from time to time be supplemented or amended. "Affiliate" means, with respect to any Person, any Person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such first Person. A Person shall be deemed to control another Person for the purposes of this definition if such first Person possesses, directly or indirectly, the power to direct, or cause the direction of, the management and policies of the second Person, whether through the ownership of voting securities, common directors, trustees or officers, by contract or otherwise. "Alternate Rate" means a fluctuating rate of interest per annum (rounded to the fifth decimal place) determined daily, equal to the Prime Rate plus the Applicable Spread — LIBOR (Tax -Exempt) or the Applicable Spread — LIBOR (Taxable), as applicable; provided, that subject to Section 3.5 hereof, at no time shall the Alternate Rate exceed the Maximum Rate; provided, however, that immediately and upon the occurrence of an Event of Default (and without any notice given with respect thereto) and during the continuation of such Event of Default, "Alternate Rate" shall mean the Default Rate. "Applicable Factor" means 80%. "Applicable Spread - LIBOR (Tax -Exempt) " means, initially 34 basis points (0.34%), which is subject to maintenance of the current Rating. In the event of a change in the Rating, the Applicable Spread -LIBOR (Tax -Exempt) shall equal the number of basis points set forth in the Level associated with the lowest Rating as set forth in the schedule below: Level I Level II Level III Level IV Level V Level VI Level VII Level VIII RATING MOODY'S S&P FITCH Al or higher A+ or higher A+ or higher APPLICABLE SPREAD -LIBOR (TAX-EXEMPT) BASIS POINTS (%) 0.34% A2 A A 0.44% A3 A- A- 0.54% Baal BBB+ BBB+ 0.64% Baa2 BBB BBB 0.74% Baa3 BBB- BBB- 0.84% Below Investment Grade +1.50% Rating withdrawn or suspended for +1.50% credit -related reasons Any change in the Applicable Spread -LIBOR (Tax -Exempt) resulting from a change in the Rating shall be and become effective as of and on the date of the public announcement of the change in the Rating. References to the Rating above are references to rating categories as presently determined by the Rating Agencies and in the event of adoption of any new or changed rating system by any such Rating Agency, including, without limitation, any recalibration of the Rating in connection with the adoption of a "global" rating scale, each Rating from the Rating Agency in question referred to above shall be deemed to refer to the rating category under the new rating system which most closely approximates the applicable rating category as currently in effect. In the event that any Rating is suspended, withdrawn, or otherwise unavailable for credit -related reasons from any Rating Agency, or upon the occurrence of and during the continuance of an Event of Default, in each such case, the interest rate on the Notes shall increase automatically to the Default Rate. The City acknowledges that as of the Closing Date the Applicable Spread -LIBOR (Tax -Exempt) is that specified above for Level 1. "Applicable Spread -- LIBOR ('Taxable) " means, initially 43 basis points (0.43%), which is subject to maintenance of the current Rating. In the event of a change in the Rating, the Applicable Spread -LIBOR (Taxable) shall equal the number of basis points set forth in the Level associated with the lowest Rating as set forth in the schedule below: -2- Level I Level II Level III Level IV Level V Level VI Level VII Level VIII RATING MOODY'S S&P FITCH Al or higher A+ or higher A+ or higher APPLICABLE SPREAD -LIBOR (TAXABLE) BASIS POINTS (%) 0.43 % A2 A A 0.53% A3 A- A- 0.63% Baal BBB+ BBB+ 0.73% Baa2 BBB BBB 0.83% Baa3 BBB- BBB- 0.93% Below Investment Grade +l .50% Rating withdrawn or suspended for +1.50% credit -related reasons Any change in the Applicable Spread -LIBOR (Taxable) resulting from a change in the Rating shall be and become effective as of and on the date of the public announcement of the change in the Rating. References to the Rating above are references to rating categories as presently determined by the Rating Agencies and in the event of adoption of any new or changed rating system by any such Rating Agency, including, without limitation, any recalibration of the Rating in connection with the adoption of a "global" rating scale, each Rating from the Rating Agency in question referred to above shall be deemed to refer to the rating category under the new rating system which most closely approximates the applicable rating category as currently in effect. In the event that any Rating is suspended, withdrawn, or otherwise unavailable for credit -related reasons from any Rating Agency, or upon the occurrence of and during the continuance of an Event of Default, in each such case, the interest rate on the Notes shall increase automatically to the Default Rate. The City acknowledge that as of the Closing Date the Applicable Spread - LIBOR (Taxable) is that specified above for Level I. "Authorized Representative " has the meaning set forth in the Ordinance. "Available Commitment" means, on any date, an initial amount equal to $300,000,000 and thereafter such initial amount adjusted from time to time as follows: (a) downward in an amount equal to the principal amount of any Note purchased by the Bank pursuant to the terms hereof; (b) upward in an amount equal to the principal amount of any Note paid by the City pursuant to the terms of Section 2.5 hereof; and (c) downward to zero upon the expiration or termination of the Available Commitment in accordance with the terms hereof; provided, that, after giving effect to any of the foregoing adjustments the Available Commitment shall never exceed $300,000,000 at any one time. -3- "Bank" has the meaning specified in the introductory paragraph hereof. "Bank Agreement" means any credit agreement, liquidity agreement, standby bond purchase agreement, reimbursement agreement, direct purchase agreement (such as a continuing covenant agreement or supplemental bondholder's agreement), bond purchase agreement, or other agreement or instrument (or any amendment, supplement or other modification thereof) under which, directly or indirectly, any Person or Persons undertake(s) (i) to make or provide funds to make, payment of, (ii) to purchase or (iii) to provide credit enhancement for bonds, notes or other obligations of the City secured by or payable from Net Revenues on an equal basis with the owners of Subordinate Lien Obligations. "Bankruptcy Code" means the federal Bankruptcy Code of 1978, as it may be amended from time to time (Title I 1 of the United States Code), and any successor statute thereto. "Bond Counsel" means the law firm of Orrick, Herrington & Sutcliffe LLP, or any nationally recognized bond counsel selected by the City and reasonably acceptable to the Bank. "Bonds Similarly Secured" has the meaning set forth in the Ordinance. "Business Day" means any day (i) when banks are not required or authorized by law or executive order to be closed in Dallas, Texas, New York, New York, the city in which the office of the Bank at which Requests for Purchase are to be honored is located or the city in which the Paying Agent/Registrar is located, (ii) when the New York Stock Exchange is not required or authorized by law or executive order to be closed and (iii) with respect to all notices and determinations in connection with, and payments of principal and interest on, any Note, any day that is a Business Day described in clauses (i) and (ii) and that is also a day for trading by and between banks in Dollar deposits in the London interbank market. "Change in Law" means the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd -Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a "Change in Law", regardless of the date enacted, adopted or issued. "City" means the City of Lubbock, Texas. "City Council" means the City Council, the governing body of the City, and any successor thereto. -4- "Closing" has the meaning specified in Section 2.2 hereof. "Closing Date" means June 5, 2019. "Code" means the Internal Revenue Code of 1986, as amended, and when reference is made to a particular section thereof, the applicable Treasury Regulations from time to time promulgated or proposed thereunder. "Commitment" means the agreement of the Bank pursuant to Section 2.1 hereof to make purchases of Notes under the terms hereof for the account of the City the proceeds of which shall be used for the purposes set forth in the Ordinance. "Commitment Expiration Date" means December 31, 2021 unless extended as provided herein. "Commitment Fee" has the meaning set forth in Section 2.6(a) hereof. "Commitment Fee Rate " has the meaning set forth in Section 2.6(a) hereof. "Compliance Certificate" means a certificate substantially in form of Exhibit I hereto. "Default" means any condition or event which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default. "Default Rate " means, (i) for the Floating Rate Notes, the Fixed Rate Notes and the other Obligations, a rate of interest equal to ten percent (10%) per annum, and (ii) for the Commitment Fee, a rate equal to the Commitment Fee Rate in effect on the date of an Event of Default plus and one and one half of one percent (1.50%). "Designated Jurisdiction" means any country or territory to the extent that such country or territory itself is the subject of any Sanction. "Determination of Taxability" means and shall be deemed to have occurred on the first to occur of the following: (i) on the date when the City files any statement, supplemental statement or other tax schedule, return or document which discloses that an Event of Taxability shall have in fact occurred; (ii) on the date when a Noteholder or any former Noteholder notifies the City that it has received a written opinion by a nationally recognized firm of attorneys of substantial expertise on the subject of tax-exempt municipal finance to the effect that an Event of Taxability shall have occurred unless, within one hundred eighty (180) days after receipt by the City of such notification from such Noteholder or such former Noteholder, the City shall deliver to such Noteholder or such former Noteholder, as applicable, a ruling or determination letter issued to or on behalf of the City by the -5- Commissioner of the Internal Revenue Service or the Director of Tax -Exempt Bonds of the Tax -Exempt and Government Entities Division of the Internal Revenue Service (or any other government official exercising the same or a substantially similar function from time to time) to the effect that, after taking into consideration such facts as form the basis for the opinion that an Event of Taxability has occurred, an Event of Taxability shall not have occurred; (iii) on the date when the City shall be advised in writing by the Commissioner of the Internal Revenue Service or the Director of Tax -Exempt Bonds of the Tax -Exempt and Government Entities Division of the Internal Revenue Service (or any other government official exercising the same or a substantially similar function from time to time, including an employee subordinate to one of these officers who has been authorized to provide such advice) that, based upon filings of the City, or upon any review or audit of the City or upon any other ground whatsoever, an Event of Taxability shall have occurred; or (iv) on the date when the City shall receive notice from a Noteholder or any former Noteholder that the Internal Revenue Service (or any other government official or agency exercising the same or a substantially similar function from time to time) has assessed as includable in the gross income of such Noteholder or such former Noteholder the interest on any Tax -Exempt Note due to the occurrence of an Event of Taxability; provided, however, no Determination of Taxability shall occur under subparagraph (iii) or (iv) hereunder unless the City has been afforded the reasonable opportunity, at its expense, to contest any such assessment, and, further, no Determination of Taxability shall occur until such contest, if made, has been finally determined; provided further, however, that upon written demand from a Noteholder or former Noteholder, the City shall promptly reimburse such Noteholder or former Noteholder for any payments, including any taxes, interest, penalties or other charges, such Noteholder (or former Noteholder) shall be obligated to make as a result of the Determination of Taxability. "Dollar" and "$" mean lawful money of the United States. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, and regulations thereunder, in each case as in effect from time to time. References to Sections of ERISA shall be construed also to refer to any successor Sections. "ERISA Affiliate" means any trade or business (whether or not incorporated) under common control with the City within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code). "Event of Default" with respect to this Agreement has the meaning set forth in Section 7.1 of this Agreement and, with respect to any Program Document, has the meaning assigned therein. -6- "Event of Taxability" means (i) a change in Law or fact or the interpretation thereof, or the occurrence or existence of any fact, event or circumstance (including, without limitation, the taking of any action by the City, or the failure to take any action by the City, or the making by the City of any misrepresentation herein or in any certificate required to be given in connection with this Agreement or the issuance, sale or delivery of the Notes) which has the effect of causing interest paid or payable on any Tax -Exempt Note to become includable, in whole or in part, in the gross income of a Noteholder or any former Noteholder for federal income tax purposes or (ii) the entry of any decree or judgment by a court of competent jurisdiction, or the taking of any official action by the Internal Revenue Service or the Department of the Treasury, which decree, judgment or action shall be final under applicable procedural Law, in either case, which has the effect of causing interest paid or payable on any Tax -Exempt Note to become includable, in whole or in part, in the gross income of such Noteholder or such former Noteholder for federal income tax purposes with respect to any Tax -Exempt Note. "Excess Interest Amount" has the meaning set forth in Section 3.5(b) hereof. "Federal Funds Rate " means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1 %) charged to Bank of America, N.A. on such day on such transactions as determined by Bank of America, N.A. "Fiscal Year" has the meaning set forth in the Ordinance. "Fitch " means Fitch, Inc., and its successors and assigns. "Fixed Rate Note " means a Note bearing interest at the Taxable Fixed Rate or the Tax - Exempt Fixed Rate, as applicable. "Floating Rate Note" means a Note bearing interest at the Tax -Exempt Floating Rate - LIBOR or the Taxable Floating Rate -LIBOR, as applicable. "GAAP" means generally accepted accounting principles in effect from time to time in the United States and applicable to entities such as the City, including, without limitation, those principles set forth in the statements and pronouncement of the Government Accounting Standards Board. "Governmental Approval" means an authorization, consent, approval, permit, license, certificate of occupancy or an exemption of, a registration or filing with, or a report to any Governmental Authority. -7- "Governmental Authority" means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including, without limitation, the Financial Conduct Agency, the Prudential Regulation Authority and any supra -national bodies such as the European Union or the European Central Bank). "Gross -Up Rate" means, for each day that the Gross -Up Rate is determined, the quotient of (i) one divided by (ii) one minus the Maximum Federal Corporate Tax Rate in effect as of such day. "Guarantee" means, for any Person, all guarantees, endorsements (other than for collection or deposit in the ordinary course of business) and other contingent obligations of such Person to purchase, to provide funds for payment, to supply funds to invest in any other Person or otherwise to assure a creditor of another Person against loss. "Indebtedness" means for any Person (without duplication) (i) all indebtedness created, assumed or incurred in any manner by such Person representing money borrowed (including by the issuance of debt securities), (ii) all obligations for the deferred purchase price of property or services (other than trade accounts payable arising in the ordinary course of business), (iii) all obligations secured by any Lien upon property of such Person, whether or not such Person has assumed or become liable for the payment of such indebtedness, (iv) all Capitalized Lease Obligations of such Person, (v) all obligations, contingent or otherwise, of such Person on or with respect to letters of credit, banker's acceptances and other evidences of indebtedness representing extensions of credit whether or not representing obligations for borrowed money, (vi) all Guarantees and (vii) obligations of such Person under any Swap Contract. "Indemnitee" has the meaning set forth in Section 3.2(a) hereof. "Initial Commitment Amount" means $300,000,000. "Initial Purchase " means the purchase by the Bank on the Closing Date of the City's f V. "Interconnection Agreement" means the Interconnection Agreement to be entered into between Sharyland Utilities, L.P. and the City, as the same may be amended, modified, supplemented or restated. "Interconnection Agreement Event of Default" means an "event of default" as set forth in Section 11.1 of the Interconnection Agreement. 1 Information to be provided by an Authorized Representative prior to the Closing Date. If no purchase will occur at closing, this definition will be deleted. 10 "Interest Payment Date " means, (a) for any Fixed Rate Note, quarterly in arrears on the first Business Day of each January, April, July and October of each calendar year and on the related Note Maturity Date; and (b) as to any Floating Rate Note, quarterly in arrears on the first Business Day of each January, April, July and October of each calendar year and on the related Note Maturity Date. "Interest Period" means, as to each Fixed Rate Note, the period commencing on the date such Fixed Rate Note is issued, converted to or continued as a Fixed Rate Note and ending on the date one, three, six or twelve months thereafter, as selected by the City in its Request for Purchase; provided that: (a) the Interest Period shall commence on the date of advance of or conversion to any Fixed Rate Note and, in the case of immediately successive Interest Periods, each successive Interest Period shall commence on the date on which the immediately preceding Interest Period expires; (b) if any Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided, that if any Interest Period with respect to a Fixed Rate Note would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the immediately preceding Business Day; (c) any Interest Period with respect to a Fixed Rate Note that begins on the first Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the first Business Day of the relevant calendar month at the end of such Interest Period; and (d) no Interest Period shall extend beyond the Note Maturity Date; "Investment Policy" means the investment policy of the City, delivered to the Bank pursuant to Section 5.1 hereof. "Laws" means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law. "LIBOR" means, for any Interest Period, the rate per annum equal to the London Interbank Offered Rate, or a comparable or successor rate which rate is approved by the Bank, as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Bank from time to time) at or about '.m 11:00 a.m., London time, two (2) London Business Days prior to the commencement of such Interest Period, for United States Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period; provided that (i) to the extent a comparable or successor rate is approved by the Bank in connection herewith, the approved rate shall be applied in a manner consistent with market practice; provided, further that to the extent such market practice is not administratively feasible for the Bank, such approved rate shall be applied in a manner as otherwise reasonably determined by the Bank and (ii) if LIBOR shall be less than zero, such rate shall be deemed zero for purposes of this Agreement. "LIBOR Daily Floating Rate " means a fluctuating rate of interest which can change on each banking day. The rate will be adjusted on each banking day to equal the London Interbank Offered Rate (or a comparable or successor rate which rate is approved by the Bank) for United States Dollar deposits (for delivery on the date in question for a one -month term beginning on that date). The Bank will use the London Interbank Offered Rate as published on the applicable Bloomberg screen page (or other commercially available source providing such quotations as may be designated by the Bank from time to time) at or about 11:00 a.m. London time two (2) London Business Days prior to the date in question; provided that (i) to the extent such rate is not available at such time for any reason and a comparable or successor rate is approved by the Bank in connection herewith, the approved rate shall be applied in a manner consistent with market practice; provided, further that to the extent such market practice is not administratively feasible for the Bank, such approved rate shall be applied in a manner as otherwise reasonably determined by the Bank and (ii) if the LIBOR Daily Floating Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement. "Lien " means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing). "London Business Day" means any day on which dealings in United States Dollar deposits are conducted by and between banks in the London interbank eurodollar market. "Majority Noteholder" means the Noteholders with a majority of the aggregate principal amount of Notes from time to time. As of the Closing Date, the Bank shall be the Majority Noteholder. "Margin Stock" has the meaning ascribed to such term in Regulation U promulgated by the FRB, as now and hereafter from time to time in effect. "Material Adverse Change " means the occurrence of any event or change, which separately or in the aggregate with the occurrence of other events, results or could reasonably be expected to result in a Material Adverse Effect. -10- "Material Adverse Effect" means any material adverse change in or effect on (i) the business, operations, assets, liabilities, condition (financial or otherwise) or results of operations of the City, (ii) the ability of the City to consummate the transactions contemplated by this Agreement or any of the Program Documents to which the City is a party, (iii) the ability of the City to perform any of its obligations under any of the Program Documents to which the City is or will be a party or (iv) the legality, validity, binding effect or enforceability against the City of any Program Document to which the City is a party or the rights, security, interests or remedies of the Bank hereunder or under any of the other Program Documents. "Maximum Federal Corporate Tax Rate " means, for any day, the maximum rate of income taxation imposed on corporations pursuant to Section I I (b) of the Code, as in effect as of such day (or, if as a result of a change in the Code, the rate of income taxation imposed on corporations generally shall not be applicable to the Bank, the maximum statutory rate of federal income taxation which could apply to the Bank as of such day). As of the Closing Date, the Maximum Federal Corporate Tax Rate is 21 %. "Maximum Rate" means the maximum net effective interest rate permitted by State law to be paid on obligations issued or incurred by the City in the exercise of its borrowing powers. "Moody's" means Moody's Investors Service, Inc. and any successor rating agency. "Multiemployer Plan" means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the City or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions. "Multiple Employer Plan" means a Plan which has two or more contributing sponsors (including the City or any ERISA Affiliate) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA. "Net Revenues" has the meaning set forth in the Ordinance. "Note " or "Notes " has the meaning specified in Section 2.1(a) hereof. "Note Maturity Date " means, for each Note, the maturity date designated in such Note at the time of issuance pursuant to the terms of Section 2.1(c) hereof. "Note Payment Fund" has the meaning set forth in the Ordinance. "Noteholder" or "Holder" means the Bank and each Bank Transferee or Non -Bank Transferee pursuant to Section 8.2 hereof so long as such Bank Transferee or Non -Bank Transferee is an owner of Notes. "Obligations" means the obligations of the City under this Agreement to pay and repay all fees, expenses and charges payable or reimbursable hereunder to the Bank (including, without limitation, any amounts to reimburse the Bank for any advances or expenditures by it under any -11- of such documents) and all other payment obligations of the City to the Bank arising under this Agreement or the other Program Documents, in each, case whether now existing or hereafter arising, due or to become due, direct or indirect, absolute or contingent, and howsoever evidenced, held or acquired. "OFAC" means the Office of Foreign Assets Control of the United States Department of the Treasury. "Ordinance" means Ordinance No. 2019- relating to the City of Lubbock, Texas Electric Light and Power System Revenue Revolving Note Program, as the same may be amended, modified, supplemented or restated in accordance with the terms thereof and hereof. "Outstanding" has the meaning set forth in the Ordinance. "Participation Agreement" means the Participation Agreement dated as of August 21, 2018, by and between Sharyland Utilities, L.P. and the City, as the same may be amended, modified, supplemented or restated. "Participation Agreement Event of Default" means any "event of default" as set forth in Article VI of the Participation Agreement. "Patriot Act" means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Title III of Pub. L. 107-56 (signed into law October 26, 2001). "Paying Agent/Registrar" means the entity chosen as paying agent/registrar under the Paying Agent/Registrar Agreement and its successors and assigns. "Paying Agent/Registrar Agreement" means that certain Paying Agent/Registrar Agreement dated as of June 1, 2019, between the City and the Paying Agent/Registrar, as the same may be amended, modified or supplemented from time to time in accordance with its terms and the terms hereof. "PBGC" means the Pension Benefit Guaranty Corporation or any successor thereto. "Pension Plan" means any employee pension benefit plan (including a Multiple Employer Plan or a Multiemployer Plan) that is maintained or is contributed to by the City and any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code "Person" means an individual, a corporation, a partnership, an association, a limited liability company, a trust or any other entity or organization, including a government or political subdivision or any agency or instrumentality thereof. "Plan" means any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Plan), maintained for employees of the City or any ERISA Affiliate or any -12- such Plan to which the City or any ERISA Affiliate is required to contribute on behalf of any of its employees. "Prime Rate" means on any day, the rate of interest in effect for such day as publicly announced from time to time by Bank of America, N.A. as its "prime rate." The "prime rate" is a rate set by Bank of America, N.A. based upon various factors including Bank of America, N.A.'s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America, N.A. shall take effect at the opening of business on the day specified in the public announcement of such change. "Program Documents" means this Agreement, the Ordinance, the Paying Agent/Registrar Agreement, the Notes, the Tax Certificate (with respect to the Tax -Exempt Notes), and any exhibits, schedules, instruments or agreements relating thereto, as the same may be amended, modified or supplemented in accordance with their terms and the terms hereof. "Project Costs" has the meaning set forth in the Ordinance. "Purchase " means each Purchase described in Section 2.3 hereof. "Purchase Date " means each date on which a Purchase occurs. "Rating" means the long-term unenhanced ratings (without regard to any bond insurance policy or credit enhancement) assigned by each Rating Agency to the Bonds Similarly Secured. "Rating Agency" means, individually or collectively, as applicable, Fitch, Moody's and "Rating Documentation" has the meaning set forth in Section 5.1 hereof. "Reduction Fee " means an amount equal to the product of (A) the Commitment Fee Rate in effect on the date of the permanent reduction of the Commitment pursuant to Section 2.7(a) hereof, (B) the difference between (x) the Initial Commitment Amount and (y) the sum of the Available Commitment after the reduction and the aggregate principal amount of the Notes outstanding after the reduction and (C) a fraction, the numerator of which is equal to the number of days from and including the date of such reduction to and including the first anniversary of the Closing Date, and the denominator of which is 360. "Related Parties" means, with respect to any Person, such Person's Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person's Affiliates. "Request for Purchase" means the request for a purchase of a Note by the Bank, in the form of Exhibit A hereto. -13- "Revenues Secured Debt" means Indebtedness of the City secured by or payable from a lien on Net Revenues. "S&P" means S&P Global Ratings, and any successor rating agency. "Sanction(s) " means any international economic sanction administered or enforced by the United States Government (including, without limitation, OFAC), the United Nations Security Council, the European Union, Her Majesty's Treasury or other relevant sanctions authority. "Security" has the meaning set forth in Section 2.11 hereof. "State " means the State of Texas. "State Legislature" means the legislative branch of the government of the State of Texas. "Subordinate Lien Obligations" has the meaning set forth in the Ordinance. "Suspension Event" means the occurrence of a Participation Agreement Event of Default or Interconnection Agreement Event of Default. "Swap Contract" means only in connection with Revenues Secured Debt (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross -currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a "Master Agreement"), including any such obligations or liabilities under any Master Agreement. "System " has the meaning set forth in the Ordinance. "Tax Certificate" means that certain Federal Tax Certificate dated no later than the first Purchase Date to occur hereunder, by the City, relating to any Tax -Exempt Notes initially sold and delivered hereunder, as the same may be amended or supplemented from time to time. "Tax -Exempt Fixed Rate" means an annualized fixed rate, for the applicable Interest Period, that is equal to the sum of (a) product of (i) the Applicable Factor and (ii) LIBOR for the applicable Interest Period and (b) the Applicable Spread -LIBOR (Tax -Exempt); provided, -14- however, that immediately and upon the occurrence of an Event of Default (and without any notice given with respect thereto) and during the continuation of such Event of Default, "Tax -Exempt Fixed Rate " shall mean the Default Rate. "Tax -Exempt Floating Rate -LIBOR " means a floating rate per annum equal to the sum of (a) the product of (i) the Applicable Factor and (ii) the LIBOR Daily Floating Rate and (b) the Applicable Spread -LIBOR (Tax -Exempt); provided, however, that immediately and upon the occurrence of an Event of Default (and without any notice given with respect thereto) and during the continuation of such Event of Default, "Tax -Exempt Floating Rate - LIBOR " shall mean the Default Rate. "Tax -Exempt Note" means a Note bearing interest at the Tax -Exempt Fixed Rate or the Tax -Exempt Floating Rate -LIBOR, as applicable. "Taxable Date" means the date on which interest on any Tax -Exempt Note is first includable in gross income of any Noteholder thereof (including the Bank) as a result of an Event of Taxability as such a date is established pursuant to a Determination of Taxability. "Taxable Fixed Rate " means an annualized fixed rate, for the applicable Interest Period, that is equal to the sum of (a) LIBOR for the applicable Interest Period and (b) the Applicable Spread -LIBOR (Taxable); provided, however, that immediately and upon the occurrence of an Event of Default (and without any notice given with respect thereto) and during the continuation of such Event of Default, "Taxable Fixed Rate " shall mean the Default Rate. "Taxable Floating Rate -LIBOR" means a floating rate per annum equal to the sum of (a) the LIBOR Daily Floating Rate and (b) the Applicable Spread -LIBOR (Taxable); provided, however, that immediately and upon the occurrence of an Event of Default (and without any notice given with respect thereto) and during the continuation of such Event of Default, "Taxable Floating Rate - LIBOR" shall mean the Default Rate. "Taxable Note" means Notes bearing interest at the Taxable Fixed Rate or the Taxable Floating Rate -LIBOR, as applicable. "Taxable Period" has the meaning set forth in Section 2.8(a) hereof. "Termination Date" means the earliest of (i) the Commitment Expiration Date, as such date may be extended pursuant to Section 2.10 hereof, (ii) the date on which the Commitment and Available Commitment are otherwise terminated or reduced to zero in accordance with Section 2.7 hereof, and (iii) the date the Commitment terminates by its terms in accordance with Section 7.2 hereof. "Termination Fee" means an amount equal to the product of (A) the Commitment Fee Rate in effect on the date of termination of the Commitment pursuant to Section 2.7(b) hereof, (B) the difference between (x) the Initial Commitment Amount and (y) the principal amount of any permanent reduction to the Commitment pursuant to Section 2.7(a) hereof for which a Reduction Fee has been paid to the Bank and (C) a fraction, the numerator of which is equal to -15- the number of days from and including the date of termination to and including the first anniversary of the Closing Date, and the denominator of which is 360. Section 1.2. Other Interpretive Provisions. With reference to this Agreement and each other Program Document, unless otherwise specified herein or in such other Program Document: (a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation." The word "will" shall be construed to have the same meaning and effect as the word "shall." Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Program Document), (ii) any reference herein to any Person shall be construed to include such Person's successors and assigns, (iii) the words "hereto," "herein," "hereof' and "hereunder," and words of similar import when used in this Agreement, shall be construed to refer to this Agreement in its entirety and not to any particular provision thereof, (iv) all references in this Agreement to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to this Agreement in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. (b) In the computation of periods of time from a specified date to a later specified date, the word `from" means `from and including;" the words "to" and "until" each mean "to but excluding;" and the word "through" means "to and including." (c) Section headings herein are included for convenience of reference only and shall not affect the interpretation of this Agreement. Section 1.3. Accounting Terms. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein. Section 1.4. Rounding. Any financial ratios required to be maintained by the City pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such -16- ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding -up if there is no nearest number). Section 1.5. Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Central time (daylight or standard, as applicable). ARTICLE II SALE AND PURCHASE; CLOSING Section 2.1. Purchase and Sale of Notes; Initial Purchase. (a) From the Closing Date through the Termination Date, and upon and subject to the terms and conditions and on the basis of the representations, warranties and agreements contained herein, the Bank hereby agrees, when requested by the City pursuant to this Agreement, to purchase from the City from time to time (but in no event more than three (3) purchases per calendar month and no more than fifteen (15) Notes outstanding at any one time) in an aggregate principal amount not to exceed the Available Commitment, and the City hereby agrees to sell and deliver to the Bank from time to time the "City of Lubbock, Texas Electric Light and Power System Revenue Tax -Exempt Revolving Notes" and "City of Lubbock, Texas Electric Light and Power System Revenue Taxable Revolving Notes," each in the form attached as Exhibit A to the Ordinance (the "Notes"), upon issuance thereof under the terms and conditions of the Ordinance, in one or more installments on each Purchase Date. The Notes are authorized pursuant to the provisions of Chapters 1371 and 1502, Texas Government Code, as amended, and the Ordinance, and are to be issued only for the purposes authorized under the Ordinance. Pursuant to the Ordinance, the principal of and interest on the Notes are payable from and secured by a subordinate lien on and pledge of Net Revenues, subject to the terms and conditions of the Ordinance, as applicable. (b) Pursuant to and subject to the terms of this Agreement, each Note shall be sold to the Bank at a purchase price equal to the principal amount of each Note and no accrued interest and the Bank shall pay such purchase price to the City upon delivery of such Note to the Bank on the related Purchase Date. (c) Each Note shall (i) be dated the date such Note is delivered to the Bank, (ii) be secured by the Net Revenues in the manner described in Section 2.1(a) hereof, (iii) mature not later than the earlier of (A) three hundred sixty-four (364) days following the related Purchase Date, and (B) the Commitment Expiration Date and (iv) be in a minimum principal amount of $2,000,000 or an integral multiple of $100,000 in excess thereof. Interest on Tax -Exempt Notes and Taxable Notes shall be calculated on the basis of a year of 360 days and actual days elapsed from the Purchase Date. (d) On the Closing Date the Bank will purchase the City's Purchase Note"). The Initial Purchase Note shall bear interest at the duration of [ ], and the Note Maturity Date shall be 2 Information to be provided by an Authorized Representative prior to the Closing Date. -17- (the "Initial [] having a 2 Section 2.2. Closing. At such date and time as shall have been mutually agreed upon by the City and the Bank, the certificates, opinions and other documents required by Section 5.1 below shall be executed and delivered (all of the foregoing actions are herein referred to collectively as the "Closing"). Assuming the Closing is completed in accordance with the provisions of this Agreement then, subject to the provisions of this Agreement and the conditions set forth in Section 5.2 hereof, the Bank shall purchase each Note and pay the purchase price therefor specified in Section 2.1(b) hereof (and the City shall issue and deliver such Note) at each Purchase. Section 2.3. Method of Purchase. (a) Each purchase of a Note shall be made upon the City's irrevocable notice to the Bank and the Paying Agent/Registrar in the form of a Request for Purchase with blanks appropriately completed. Each Request for Purchase shall be signed by an Authorized Representative and shall specify: (1) the Purchase Date which shall be a Business Day and shall be at least three (3) Business Days after the date of the Request for Purchase in the case of a Fixed Rate Note and at least one (1) Business Day after the date of the Request for Purchase in the case of a Floating Rate Note; (2) the principal amount of the Note to be purchased, which shall not exceed the Available Commitment as of the proposed Purchase Date; (3) whether the requested Note shall be a Fixed Rate Note (and whether such rate shall be the Taxable Fixed Rate or the Tax -Exempt Fixed Rate) or a Floating Rate Note (and whether such rate shall be the Taxable Floating Rate -LIBOR or the Tax -Exempt Floating Rate -LIBOR, as applicable); (4) if applicable, the duration of the Interest Period with respect thereto, and that the last day of the proposed Interest Period will not be later than the earlier of the Note Maturity Date or the Commitment Expiration Date; (5) whether absent a different election by the City (i) at the end of an Interest Period the City desires that the related Fixed Rate Note (A) automatically convert to a Floating Rate Note (and designated whether such conversion will be to the Tax -Exempt Floating Rate -LIBOR or the Taxable Floating Rate -LIBOR), until otherwise directed by the City or (B) continue as a Fixed Rate Note in the same Interest Period until otherwise directed by the City or (ii) the City desires that the related Note automatically continue as a Floating Rate Note until otherwise directed by the City. Each Request for Purchase must be received by the Bank not later (x) than 10:00 a.m. three Business Days immediately prior to the requested Purchase Date in the case of a Fixed Rate Note and (y) than 10:00 a.m. one Business Day immediately prior to the requested Purchase Date in the case of a Floating Rate Note. (b) Upon receipt of a Request for Purchase for a Fixed Rate Note by the Bank, the Bank, subject to the terms and conditions of this Agreement, shall be required to make a purchase of a Fixed Rate Note by 3:00 p.m. on the proposed Purchase Date for the account of the City in an amount equal to the amount of the requested purchase. Notwithstanding the foregoing, in the event such Request for Purchase for a Fixed Rate Note is received by the Bank after 10:00 a.m. on the Business Day which is three (3) Business Days immediately prior to the day of the proposed Purchase, the Bank shall be required to make the related Purchase for a Fixed Rate Note by 3:00 p.m. on the fourth Business Day after receipt of the related Request for Purchase. Pursuant to Section 2.4(c) hereof, the Bank shall determine the initial Tax -Exempt Fixed Rate or Taxable Fixed Rate, as applicable, for a Fixed Rate Note two (2) Business Days prior to the related Purchase Date. -18- (c) Upon receipt of a Request for Purchase for a Floating Rate Note by the Bank, subject to the terms and conditions of this Agreement, the Bank shall be required to make a purchase for a Floating Rate Note by 3:00 p.m. on the proposed Purchase Date for the account of the City in an amount equal to the amount of the requested purchase. Notwithstanding the foregoing, in the event such Request for Purchase for a Floating Rate Note is received by the Bank after 10:00 a.m. on the Business Day which is one (1) Business Day immediately prior to the day of the proposed Purchase, the Bank shall be required to make the related Purchase for a Floating Rate Note by 3:00 p.m. on the second Business Day immediately following receipt of the related Request for Purchase. (d) Subject to Section 2.3(a) hereof, a Fixed Rate Note may be continued in whole or in part as a Fixed Rate Note for successive Interest Periods upon the City's irrevocable request to the Bank in the form of Exhibit B hereto with blanks appropriately completed (each, a "Notice of Continuation "). The Bank must receive each Notice of Continuation not later than 10:00 a.m. on the Business Day which is three (3) Business Days prior to the last day of the then current Intcrest Period. Upon the Bank's timely receipt of a duly completed and executed Notice of Continuation, the Fixed Rate Note described therein shall be continued as a Fixed Rate Note with the Interest Period specified therein, or, if no Interest Period is specified therein, then the applicable Fixed Rate Note shall be converted to a Floating Rate Note bearing interest at the Tax -Exempt Floating Rate -LIBOR or Taxable Floating Rate -LIBOR, as applicable. (e) A Fixed Rate Note may be converted in whole to a Floating Rate Note on the last day of the then current Interest Period and a Floating Rate Note may be converted in whole to (i) a Fixed Rate Note or (ii) the other type of Floating Rate Note on any Business Day, in all cases, upon the City's irrevocable notice to the Bank in the form of Exhibit B hereto with blanks appropriately completed (each, a "Notice of Conversion "). Each Notice of Conversion must be received by the Bank not later than 10:00 a.m. (i) one (1) Business Day prior to the date of a proposed conversion of a Fixed Rate Note to a Floating Rate Note, (ii) one (1) Business Day prior to the date of a proposed conversion of a Note bearing interest at the Tax -Exempt Floating Rate -LIBOR or the Taxable Floating Rate -LIBOR, as applicable, to a Note bearing interest at the Tax -Exempt Floating Rate -LIBOR or the Taxable Floating Rate LIBOR, as applicable or (iii) three (3) Business Days prior to the proposed conversion date in the case of a conversion of a Floating Rate Note to a Fixed Rate Note. Upon the Bank's timely receipt of a duly completed and executed Notice of Conversion, the Fixed Rate Note or Floating Rate Note, as applicable, described therein shall be converted to a Floating Rate Note or a Fixed Rate Note, respectively, with the Interest Period specified therein in the case of a conversion to a Fixed Rate Note. A Fixed Rate Note may only be converted to Floating Rate Note on the last day of an Interest Period. If a Fixed Rate Note or a Floating Rate Note is converted to bear interest at the Alternate Rate pursuant to Section 3.8 or Section 3.9 and the circumstance or condition requiring such conversion ceases to apply or exist, then without further action and without penalty, such Note shall be automatically converted to a Floating Rate Note and the Bank shall give notice thereof to the City and the Paying Agent/Registrar. (f) If, after examination, the Bank shall have determined that a Request for Purchase, Notice of Continuation or Notice of Conversion does not conform to the terms and conditions hereof, then the Bank shall use its best efforts to give notice to the City and the Paying -19- Agent/Registrar to the effect that documentation was not in accordance with the terms and conditions hereof and stating the reasons therefor. The City may attempt to correct any such nonconforming Request for Purchase, Notice of Continuation or Notice of Conversion, if, and to the extent that, the City is entitled (without regard to the provisions of this sentence) and able to do so. If the City fails to specify a type of Note or the applicable Interest Period in a Request for Purchase, Notice of Continuation or Notice of Conversion or if the City fails to give a timely notice requesting a conversion or continuation, then the applicable Notes shall be issued and bear interest as, continued or converted to, Floating Rate Notes. The Bank shall promptly notify the City and the Paying Agent/Registrar of the interest rate applicable to any Interest Period for Fixed Rate Notes upon determination of such interest rate. During the existence of a Default or an Event of Default, no Notes may be requested as, converted to or continued as Fixed Rate Notes without the prior written consent of the Bank in its sole discretion. (g) After giving effect to all Purchases, continuations, and conversions of the Notes, there can only be one Interest Period at any one time for a particular Note. Section 2.4. Interest Rate. (a) Each Note shall bear interest at a rate per annum equal to the lesser of (1) the Maximum Rate, (2) if a Floating Rate Note, the Tax -Exempt Floating Rate - LIBOR or the Taxable Floating Rate -LIBOR, as applicable, or (3) if a Fixed Rate Note, the Tax - Exempt Fixed Rate or the Taxable Fixed Rate. The Floating Rate or Fixed Rate, as applicable, shall be rounded to the fifth decimal place. (b) Any principal of, and to the extent permitted by State law, any interest on the Notes and any other sum payable hereunder, which is not paid when due shall bear interest, from the date due and payable until paid, payable on written demand, at a rate per annum equal to the lesser of (i) the Default Rate and (ii) subject to Section 3.5 hereof, Maximum Rate. (c) The Bank shall promptly notify the City and the Paying Agent/Registrar of the interest rate applicable to any Interest Period for Fixed Rate Notes upon determination of such interest rate; provided, however, that the failure by the Bank to provide notice of the applicable interest rate shall not relieve the City of its obligation to make payment of amounts as and when due hereunder. Each determination by the Bank of an interest rate shall be conclusive and binding for all purposes, absent manifest error. (d) From and after the Taxable Date, each Tax -Exempt Note shall bear interest at the applicable Gross -Up Rate. Section 2.5. Payment. (a) Accrued but unpaid interest on each Note shall be due and payable on the applicable Interest Payment Date. All outstanding principal of a Note shall be due and payable on the related Note Maturity Date. Interest due and payable on a Note shall be equal to the amount accrued to, but excluding the related payment date. If the payment date for the principal of or interest on a Note is a day other than a Business Day, the date for payment thereof shall be extended, without penalty, to the next succeeding Business Day, and such extended period of time shall be included in the computation of interest; provided, however, the payment of interest on a Note on such extended date shall have the same force and effect as if made on the original payment date. -20- (b) Subject to Section 2.9 hereof, the City may prepay or redeem any Note, in whole or in part, provided at least two (2) Business Days' prior written notice is given by the City to the Bank and the Paying Agent/Registrar. Each such notice shall specify the date and amount of such prepayment and the Notes to be prepaid and the Interest Period(s) of such Notes. Each such notice of optional prepayment shall be irrevocable and shall bind the City to make such prepayment in accordance with such notice. Any prepayment of a Note shall be in a principal amount of $2,000,000 or a whole multiple of $100,000 in excess thereof or, if less, the entire principal amount of the particular Note then outstanding. All prepayments of principal shall include accrued interest to the date of prepayment and all other amounts due and payable at such time pursuant to this Agreement. Section 2.6. Fees. (a) Commitment Fees. The City agrees to pay to the Bank a nonrefundable annual fee (the "Commitment Fee "), (i) from and including the Closing Date to the first anniversary of the Closing Date, initially at a rate of 25 basis points (0.25%) per annum multiplied by the daily Available Commitment, which is subject to the maintenance of the current Rating and subject to adjustment based on the number of basis points set forth in the Level associated with the lowest Rating as set forth in the schedule (the "Commitment Fee Rate ") and (ii) from and after the first anniversary of the Closing Date, the Commitment Fee shall be calculated based on the number of basis points set forth in the Level associated with the lowest Rating as set forth in the schedule below multiplied by the daily Available Commitment: COMMITMENT FEE RATE BASIS RATING POINTS (%) MOODY'S S&P FITCH AVAILABLE AVAILABLE COMMITMENT COMMITMENT < 50% > 50% Level I Al or A+ or A+ or 0.25% 0.00% higher higher higher Level II A2 A A 0.35% 0.00% Level III A3 A- A- 0.45% 0.00% Level IV Baal BBB+ BBB+ 0.55% 0.00% Level V Baa2 BBB BBB 0.65% 0.00% Level VI Baa3 BBB- BBB- 0.75% 0.00% Level VII Below Investment Grade +1.50% +1.50% Level VIII Rating withdrawn or suspended for +1.50% +1.50% credit -related reasons -21- In determining the applicable Commitment Fee Rate based on the percentage of usage of the Commitment, (i) for any downgrade to the Rating that occurs during the period from and including the Closing Date to but excluding the first anniversary of the Closing Date, the percentage of usage shall be determined based on the percentage of usage on the date of such downgrade and (ii) for any downgrade to the Rating that occurs at any time after the first anniversary of the Closing Date, the percentage of usage shall be determined based on the daily average amount of Notes Outstanding during the most recently completed four fiscal quarters. Any change in the Commitment Fee resulting from a change in the Rating shall be and become effective as of and on the date of the public announcement of the change in the Rating. The Commitment Fee shall be payable quarterly in arrears on the first Business Day of each January, April, July and October of each calendar year (beginning on the first such date to occur after the Closing Date) and on the Commitment Expiration Date, or such earlier date on which the Commitment may be terminated in accordance with the terms of this Agreement. References to the Rating above are references to rating categories as presently determined by the Rating Agencies and in the event of adoption of any new or changed rating system by any such Rating Agency, including, without limitation, any recalibration of the Rating in connection with the adoption of a "global" rating scale, each Rating from the Rating Agency in question referred to above shall be deemed to refer to the rating category under the new rating system which most closely approximates the applicable rating category as currently in effect. In the event that any Rating is suspended, withdrawn, or otherwise unavailable for credit -related reasons from any Rating Agency, or upon the occurrence of and during the continuance of an Event of Default, in each such case the Commitment Fee Rate shall increase automatically to the Default Rate, without prior notice to the City. The City acknowledges that as of the Closing Date the Commitment Fee Rate is that specified above for Level I. (b) Termination or Reduction Fee. The City shall pay to the Bank a Reduction Fee or Termination Fee, as applicable, in connection with each permanent reduction or termination of the Available Commitment or Commitment pursuant to Section 2.7 hereof prior to the first anniversary of the Closing Date, in an amount equal to the Reduction Fee or Termination Fee, as applicable, payable on the date of such termination or each such reduction. (c) Amendment, Consent or Waiver Fee. Upon each amendment hereof, consent or waiver hereunder or under any Program Document, the City shall pay or cause to be paid reasonable attorneys' fees and expenses, if any, incurred by the Bank in processing such amendment, consent or waiver and a fee in an amount of $2,500. (d) Costs, Expenses and Taxes. The City will promptly pay on written demand (i) the reasonable fees, costs and expenses of the Bank incurred in connection with the preparation, negotiation, execution and delivery of this Agreement, the Notes and the other Program Documents, (ii) the reasonable fees and disbursements (not to exceed $50,000) of Chapman and Cutler LLP, special counsel to the Bank, incurred in connection with the preparation, execution, filing and administration and delivery of this Agreement and the other Program Documents, (iii) the reasonable fees and disbursements of counsel or other reasonably required consultants to the Bank with respect to advising the Bank as to the rights and responsibilities under this Agreement and the other Program Documents after the occurrence of any Default hereunder, or an Event of Default, (iv) all reasonable costs and expenses, if any, in connection with any waiver -22- or amendment of, or the giving of any approval or consent under, or any response thereto or the enforcement of this Agreement, the Program Documents and any other documents which may be delivered in connection herewith or therewith, including in each case the reasonable fees and disbursements of counsel to the Bank or other reasonably required consultants and (v) any reasonable amounts advanced by or on behalf of the Bank to the extent required to cure any Default, Event of Default or event of nonperformance hereunder or any Program Document, together with interest at the Default Rate. In addition, the City shall pay any and all stamp taxes, transfer taxes, documentary taxes, and other taxes and fees payable or determined to be payable in connection with the execution, delivery, filing, and recording of this Agreement and the security contemplated by the Program Documents (other than taxes based on the net income of the Bank) and, to the extent permitted by State law, agrees to indemnify and hold the Bank harmless from and against any and all liabilities with respect to or resulting from any delay in paying, or omission to pay, such taxes and fees, including interest and penalties thereon; provided, however, that the City may reasonably contest any such taxes or fees with the prior written consent of the Bank, which consent, if an Event of Default does not then exist, shall not be unreasonably withheld. In addition, the City agrees to pay, after the occurrence of a Default or an Event of Default, all reasonable costs and expenses (including reasonable attorneys' fees and costs of settlement) incurred by the Bank in enforcing any obligations or in collecting any payments due from the City hereunder by reason of such Default or Event of Default or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a "workout" or of any collection, insolvency, bankruptcy proceedings or other enforcement proceedings resulting therefrom. (e) Default Rate. If the City shall fail to pay any amount payable under this Section 2.6 as and when due, each such unpaid amount shall bear interest for each day from and including the date it was due until paid in full at the applicable Default Rate. The obligations of the City under Sections 2.6(d) and (e) shall survive the termination of this Agreement. Section 2.7. Reduction and Termination. (a) Subject to the provisions of Section 2.6(b) hereof, the Available Commitment shall be reduced from time to time as requested by the City within fifteen (15) Business Days of the City's written notice to the Bank requesting such reduction in the form of Exhibit E hereto; provided, that (i) each such reduction amount shall be in an amount equal to $2,000,000 or an integral multiple thereof, and (ii) any reduction in the Available Commitment shall not be effective until the Bank delivers to the City and the Paying Agent/Registrar a notice in the form attached hereto as Exhibit F reflecting such reduction. (b) Subject to the provisions of Section 2.6(b) hereof, the City may at any time and at its sole option terminate the Commitment upon ten (10) Business Days' prior written notice to the Bank in the form of Exhibit E hereto. As a condition to any such termination, the City shall pay or cause to be paid all Obligations due and owing to the Bank at such time (for the avoidance of doubt, any outstanding Note at such time may remain outstanding until the applicable Note Maturity Date). Section 2.8. Taxability. In the event a Taxable Date occurs, the City hereby agrees to pay to the Bank or any Noteholder on written demand therefor (1) an amount equal to the difference between (A) the amount of interest that would have been paid to the Bank or any -23- Noteholder, as applicable, on any Tax -Exempt Note during the period for which interest on such Tax -Exempt Note is includable in the gross income of the Bank or any Noteholder, if such Tax - Exempt Note had borne interest at the Gross -Up Rate, beginning on the Taxable Date (the "Taxable Period"), and (B) the amount of interest actually paid to the Bank or any Noteholder, as applicable, during the Taxable Period, and (2) an amount equal to any interest, penalties or charges owed by the Bank or any Noteholder, as applicable, as a result of interest on the Tax - Exempt Notes becoming includable in the gross income of the Bank or any Noteholder, as applicable, together with any and all reasonable attorneys' fees, court costs, or other out-of-pocket costs incurred by the Bank or any Noteholder, as applicable, in connection therewith. (b) The obligations of the City under this Section 2.8 shall survive the termination of the Commitment and this Agreement. Section 2.9. Funding Indemnity. To the extent permitted by law, upon written demand of the Bank from time to time, the City shall promptly compensate the Bank for and hold the Bank harmless from any loss, cost or expense incurred by it as a result of: (a) any continuation, conversion, payment or prepayment of any Fixed Rate Note on a day other than the last day of the Interest Period for such Fixed Rate Note (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); (b) any failure by the City (for a reason other than the failure of the Bank to purchase a Note) to prepay, borrow, continue or convert any Fixed Rate Note on the date or in the amount notified by the City; Including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Fixed Rate Note or from fees payable to terminate the deposits from which such funds were obtained. To the extent permitted by law, the City shall also pay any customary administrative fees charged by the Bank in connection with the foregoing. For purposes of calculating amounts payable by City to the Bank under this Section 2.9, the Bank shall be deemed to have funded each Fixed Rate Note made by it at LIBOR for such Fixed Rate Note by a matching deposit or other borrowing in the London interbank market for a comparable amount and for a comparable period, whether or not such Fixed Rate Note was in fact so funded. The amount of the compensation owing to the Bank in accordance with this Section shall be determined and calculated by the Bank and provided to the City as soon as practicable following a request for the calculation of such amount. A certificate of the Bank setting forth the amount of such compensation and delivered to the City shall be conclusive absent manifest error. The City shall pay the Bank the amount shown as due on any such certificate within thirty (30) days after receipt thereof. -24- Section 2.10. Extension of Commitment Expiration Date. The City may request an extension of the Commitment Expiration Date in writing in the form of Exhibit C hereto not more than one hundred eighty (180) days prior to the then current Commitment Expiration Date and not less than one hundred twenty (120) days prior to the then current Commitment Expiration Date. The Bank will make reasonable efforts to respond to such request within thirty (30) days after receipt of all information necessary, in the Bank's judgment, to permit the Bank to make an informed credit decision. If the Bank fails to definitively respond to such request within such thirty (30) day period, the Bank shall be deemed to have refused to grant the extension requested. The Bank may, in its sole and absolute discretion, decide to accept or reject any such proposed extension and no extension shall become effective unless the Bank shall have consented thereto in writing in the form of Exhibit G hereto or otherwise. The Bank's consent, if granted, shall be conditioned upon the preparation, execution and delivery of documentation in form and substance satisfactory to the Bank (which may include, but shall not be limited to the delivery of a "no adverse effect opinion " of Bond Counsel to the Bank with respect to the tax-exempt status of the Tax -Exempt Notes). Section 2.11. Security of Obligations. (a) Pledge. The City hereby pledges and grants to the Bank, on an equal and ratable basis with the owners of Subordinate Lien Obligations and as collateral security for the payment by the City, when due, of all Obligations, the due and punctual observance and performance of all other obligations of the City under this Agreement, and the due and punctual observance and performance of the City's obligations to the owners of the Notes arising under the Notes, an irrevocable lien on, pledge of and security interest in the amounts held in the Note Payment Fund until the amounts deposited therein are used for authorized purposes. (b) Security. The Ordinance creates a valid irrevocable lien on, pledge of, and security interest in the Net Revenues as security for all of the Notes and all action necessary to perfect the lien on, pledge of, and security interest of the Bank in such Net Revenues has been duly and validly taken. The City hereby pledges and grants to the Bank, on an equal and ratable basis with the owners of Subordinate Lien Obligations, as security for the payment by the City, when due, of all Obligations now or at any time hereafter owing to the Bank under this Agreement a lien on and security interest in the Net Revenues and the right to enforce certain remedies under the Ordinance as described therein. The collateral security described in this Section 2.11(a) and (b) is referred to as the "Security. " (c) Acknowledgement. The Bank acknowledges that this Agreement and the Obligations of the City hereunder are special obligations of the City, secured and payable solely from the Security and that the Obligations constitute Subordinate Lien Obligations. Section 2.12. Suspension Events. Upon the occurrence of a Suspension Event the Bank shall have the right to suspend the Commitment upon delivery of written or electronic notice to the City of the same. -25- ARTICLE III LIABILITY, INDEMNITY AND PAYMENT Section 3.1. Liability of the City. The City and the Bank agree that the obligation of the City to pay the Notes and the Obligations are contractual obligations of the City payable solely from the Net Revenues and shall not be affected by, and the Bank shall not be responsible for, among other things, (i) the validity, genuineness or enforceability of this Agreement, the Notes or documents, notices or endorsements relating thereto (even if this Agreement or any documents, notices endorsements relating thereto should in fact prove to be in any and all respects invalid, fraudulent or forged), (ii) the use to which the amounts disbursed by the Bank may be put, or (iii) any other circumstances or happenings whatsoever, whether or not similar to any of the foregoing. Section 3.2. Indemnification by the City. (a) To the extent permitted by State law, the City shall indemnify the Bank and each Related Party of the Bank (each such Person being called an "Indemnitee ") against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the reasonable fees, charges and disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any Person (including the City) other than such Indemnitee and its Related Parties arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Program Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or thereby, or, in the case of the Bank (and any sub -agent thereof) and its Related Parties only, the administration of this Agreement and the other Program Documents (including in respect of any matters addressed in Section 3.1), (ii) the purchase of the Notes or the use or proposed use of the proceeds therefrom, or (iii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the City, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the negligence or willful misconduct of such Indemnitee. (b) To the fullest extent permitted by applicable State law, the City shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Program Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, or the use of the proceeds thereof. No Indemnitee referred to in subsection (a) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Program Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the negligence or willful misconduct of -26- such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction. (c) All amounts due under this Section shall be payable not later than thirty (30) days after receipt of an invoice. Section 3.3. Increased Costs. (a) Increased Costs Generally. If any Change in Law shall: (i) impose, modify or deem applicable any reserve, liquidity ratio, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by a Noteholder; (ii) subject any Noteholder to any taxes on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or (iii) impose on any Noteholder or the London interbank market any other condition, cost or expense affecting this Agreement or the Notes; and the result of any of the foregoing shall be to increase the cost to any Noteholder with respect to this Agreement, the Notes, or the making, maintenance or funding of the purchase price of the Notes, or to reduce the amount of any sum received or receivable by such Noteholder hereunder (whether of principal, interest or any other amount) then, upon request of such Noteholder, to the extent permitted by State law, the City will, pursuant to Section 3.3(c) hereof, pay to the such Noteholder such additional amount or amounts as will compensate such Noteholder for such additional costs incurred or reduction suffered. (b) Capital Requirements. If any Noteholder determines that any Change in Law affecting such Noteholder or any of its parent or holding companies, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Noteholder's capital or liquidity or on the capital or liquidity of such Noteholder's holding company, if any, as a consequence of this Agreement or the purchase of any Note hereunder, to a level below that which such Noteholder or such Noteholder's holding company could have achieved but for such Change in Law (taking into consideration such Noteholder's policies and the policies of its parent or holding company with respect to capital adequacy), then from time to time, to the extent permitted by law, the City will, pursuant to Section 3.3(c) hereof, pay to such Noteholder such additional amount or amounts as will compensate such Noteholder or its parent or holding companies, as applicable, for any such reduction suffered. (c) Certificates for Reimbursement. A certificate of any Noteholder setting forth the amount or amounts necessary to compensate such Noteholder or its parent or its holding companies, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the City shall be conclusive absent manifest error. The City shall pay to the Bank (and if -27- applicable, to the Bank on behalf of a Noteholder) the amount shown as due on any such certificate within thirty (30) days after receipt thereof. (d) Delay in Requests. Failure or delay on the part of any Noteholder to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Noteholder's right to demand such compensation; provided that the City shall not be required to compensate any Noteholder pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than nine (9) months prior to the date that such Noteholder notifies the City of the Change in Law giving rise to such increased costs or reductions and of the Noteholder's intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine (9) months period referred to above shall be extended to include the period of retroactive effect thereof). Section 3.4. Taxes. If any payments to the Bank under this Agreement are made from outside the United States, the City will not deduct any foreign taxes from any payments it makes to the Bank. If any such taxes are imposed on any payments made by the City (including payments under this paragraph), the City will pay the taxes and will also pay to the Bank, at the time interest is paid, any additional amount which the Bank specifies as necessary to preserve the after-tax yield the Bank would have received if such taxes had not been imposed. The City will confirm that it has paid the taxes by giving the Bank official tax receipts (or notarized copies) within thirty (30) days after the due date. Section 3.5. Maximum Rate; Default Rate. (a) Any and all amounts remaining unpaid when due under this Agreement shall bear interest at the Default Rate until repaid and shall be payable upon written demand. To the extent permitted by State law, any such amounts which constitute interest remaining unpaid when due shall bear interest at the Default Rate until repaid and shall be payable upon written demand. Upon the occurrence and during the continuance of an Event of Default, the Obligations and the Notes shall bear interest at the Default Rate, which shall be payable by the City to the Bank pursuant to the terms of Section 2.5 hereof. (b) In the event that the rate of interest payable hereunder or under the Notes shall exceed the Maximum Rate for any period for which interest is payable, then (i) interest at the Maximum Rate shall be due and payable with respect to such interest period and (ii) interest at the rate equal to the difference between (A) the rate of interest calculated in accordance with the terms hereof or the Notes, as applicable and (B) the Maximum Rate (the "Excess Interest Amount"), shall be deferred until such date as the rate of interest calculated in accordance with the terms hereof or the Notes, as applicable ceases to exceed the Maximum Rate, at which time the City shall pay to the Bank, with respect to amounts then payable to the Bank that are required to accrue interest hereunder or under the Notes, such portion of the deferred Excess Interest Amount as will cause the rate of interest then paid to the Bank, to equal the Maximum Rate, which payments of deferred Excess Interest Amount shall continue to apply to such unpaid amounts hereunder or under the Notes until all deferred Excess Interest Amount is fully paid to the Bank. Notwithstanding the foregoing and to the extent permitted by State law, on the date on which no principal amount with respect to the Notes remains unpaid, the City shall pay to the Bank a fee equal to any accrued and unpaid Excess Interest Amount on such date; provided that -28- such payment shall not cause interest to exceed the maximum net effective interest rate authorized under Chapter 1204, Texas Government Code, as amended; provided further that in no event shall interest accrue and be payable after such date. (c) All amounts paid pursuant to this Agreement shall be non-refundable and shall be paid in immediately available funds. Section 3.6. Liability of the Bank. To the extent permitted by State law, the City assumes all risks of the acts or omissions of the Paying Agent/Registrar with respect to the use of the Commitment and the purchase of Notes made pursuant thereto; provided that this assumption with respect to the Bank is not intended to and shall not preclude the City from pursuing such rights and remedies as it may have against the Paying Agent/Registrar under any other agreements. The Bank shall not be liable or responsible for (i) the use of the proceeds of the Notes or the transactions contemplated hereby and by the Program Documents or for any acts or omissions of the Paying Agent/Registrar, (ii) the validity, sufficiency, or genuineness of any documents determined in good faith by the Bank to be valid, sufficient or genuine, even if such documents shall, in fact, prove to be in any or all respects invalid, fraudulent, forged or insufficient, (iii) purchase of Notes by the Bank against presentation of Requests for Purchase for which the Bank in good faith has determined to be valid, sufficient or genuine and which subsequently are found not to comply with the terms of this Agreement, or (iv) any other circumstances whatsoever in making or failing to make payment hereunder; provided that the City shall not be required to indemnify the Bank for any claims, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by the negligence or willful misconduct of the Bank, respectively, as determined by a court of competent jurisdiction in a final and nonappealable judgment. Section 3.7. Obligations Unconditional. The City's obligation to repay the Notes and all of its respective Obligations under this Agreement shall be absolute and unconditional under any and all circumstances, including without limitation: (a) any lack of validity or enforceability of this Agreement, the Notes or any of the other Program Documents; (b) any amendment or waiver of or any consent to departure from all or any of the Program Documents; (c) the existence of any claim, set-off, defense or other right which the City may have at any time against the Bank or any other person or entity, whether in connection with this Agreement, the other Program Documents, the transactions contemplated herein or therein or any unrelated transaction; or (d) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing; and irrespective of any setoff, counterclaim or defense to payment which the City may have against any Noteholder or any other Person, including, without limitation, any defense based on the failure of any nonapplication or misapplication of the proceeds of Notes hereunder, and irrespective of the legality, validity, regularity or enforceability of this Agreement, the Notes or any or all other Program Documents, and notwithstanding any amendment or waiver of (other than an amendment or waiver signed by the Bank- explicitly reciting the release or discharge of any such obligation), or any consent to, or departure from, this Agreement, the Notes or any or all other Program Documents or any exchange, release, or nonperfection of any collateral securing the obligations of the City hereunder; provided, however, that nothing contained in this Section 3.7 shall abrogate or otherwise affect the rights of the City under this Agreement. -29- Section 3.8. Illegality. If the Bank determines that any law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for the Bank to make, maintain or fund Notes whose interest is determined by reference to LIBOR or the LIBOR Daily Floating Rate, or to determine or charge interest rates based upon LIBOR or the LIBOR Daily Floating Rate, or any Governmental Authority has imposed material restrictions on the authority of the Bank to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by the Bank to the City, any obligation of the Bank to make or continue Fixed Rate Notes or Floating Rate Notes or to convert Fixed Rate Notes to Floating Rate Notes and vice versa shall be suspended until the Bank notifies the City that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the City shall, upon written demand from the Bank convert the interest on all Fixed Rate Notes and Floating Rate Notes to Notes that bear interest at the Alternate Rate, either on the last day of the Interest Period therefor in the case of Fixed Rate Notes, if the Bank may lawfully continue to maintain such Fixed Rate Notes to such day, or on the next Business Day, in the case of Floating Rate Notes and if the Bank may not lawfully continue to maintain Fixed Rate Notes through the last day of the Interest Period therefor, then immediately upon written demand. For purposes of this Agreement and the Notes, Notes bearing interest at the Alternate Rate shall constitute Floating Rate Notes. Upon any such conversion, the City shall also pay accrued interest on the amount so converted on the date of such conversion. Section 3.9. Inability to Determine Rates. If the Bank reasonably determines that for any reason in connection with any request for a Fixed Rate Note or a conversion to or continuation thereof or any request for a Floating Rate Note or a conversion thereof that (a) Dollar deposits are not being offered to banks in the London interbank market for the applicable amount and, if applicable, Interest Period, (b) adequate and reasonable means do not exist for determining LIBOR for any requested Interest Period or the LIBOR Daily Floating Rate, as the case may be, or (c) LIBOR for any requested Interest Period or the LIBOR Daily Floating Rate, as the case may be, does not adequately and fairly reflect the cost to the Bank of funding such Fixed Rate Note or Floating Rate Note, as the case may be, the Bank will promptly so notify the City. Thereafter, the obligation of the Bank to make or maintain Fixed Rate Notes and Floating Rate Notes shall be suspended until the Bank revokes such notice. Upon receipt of such notice, (i) the City shall immediately revoke any pending request for a purchase of, conversion to or continuation of Fixed Rate Notes or borrowing of or conversion to Floating Rate Notes, and deliver notice to the Bank that such Notes will be converted to Notes bearing interest at the Alternate Rate, in the amount specified therein, (ii) the interest on all outstanding Fixed Rate Notes shall be automatically converted to the interest rate set forth in such notice on the last day of the applicable Interest Period therefor and (iii) the interest rate on all outstanding Floating Rate Notes shall be automatically converted to the interest rate set forth in such notice on the next Business Day. Upon any such conversion, the City shall also pay accrued interest on the amount so converted on the date of such conversion. -30- ARTICLE IV REPRESENTATIONS AND WARRANTIES Section 4.1. Representations of the City. In order to induce the Bank to enter into this Agreement, the City represents and warrants to the Bank as follows: (a) Organization and Powers. The City (a) is duly established and validly existing under the Constitution and laws of the State; (b) has all corporate powers and all material governmental licenses, authorizations, consents, and approvals required to carry on its business as now conducted; (c) has full legal right, power and authority to pledge the Net Revenues as security for its obligations under this Agreement; (d) had full legal right, power and authority to adopt the Ordinance; (e) has full legal right, power and authority to execute, deliver, and perform this Agreement and the other Program Documents; (f) has full legal right, power and authority to borrow and obtain extensions of credit hereunder, and to execute, deliver, and perform the Notes; and (g) has full power and authority to operate the System. (b) Authorization; Contravention. The City has the corporate power, and has taken all necessary corporate action to authorize the Program Documents to which it is a party, and to execute, deliver and perform its obligations under this Agreement and each of the other Program Documents to which it is a party in accordance with their respective terms. The City has approved the form of the Program Documents to which it is not a party. The City is duly authorized and licensed to own its Property and to operate its business under the Laws, rulings, regulations and ordinances of all Governmental Authorities having the jurisdiction to license or regulate such Property or business activity and the departments, agencies and political subdivisions thereof, and the City has obtained all requisite approvals of all such governing bodies required to be obtained for such purposes. All Governmental Approvals necessary for the City to enter into this Agreement and the other Program Documents and to perform the transactions contemplated hereby and thereby and to conduct its business activities and own its property have been obtained and remain in full force and effect and are subject to no further administrative or judicial review. No other Governmental Approval or other action by, and no notice to or filing with, any Governmental Authority is required for the due execution, delivery and performance by the City of this Agreement or the due execution, delivery or performance by the City of the Program Documents. (c) Governmental Consent or Approval. No consent of any Person and no license, approval or authorization of, or notice to or registration, filing or declaration with, any applicable Governmental Authority (other than any action that may be required under any state securities or blue sky laws) is required in connection with the adoption, performance, validity or enforceability of the Ordinance, the issuance, validity or enforceability of the Notes, or the execution, delivery, performance, validity or enforceability of this Agreement or the other Program Documents or, if required, the same has been obtained and is in full force and effect or, if not yet obtained, will be obtained on or before the Closing Date and will be in full force and effect on such date, and true copies thereof have been, or will be, delivered to the Bank on or before the Closing Date. -31- (d) Litigation. There is no action, suit or proceeding pending in any court, any other Governmental Authority with jurisdiction over the City or any arbitration in which service of process has been completed against the City or, to the knowledge of the City, any other action, suit or proceeding pending or threatened in any court, any other Governmental Authority with jurisdiction over the City or any arbitrator, in either case against the City or any of its properties or revenues, or any of the Program Documents to which it is a party, which is reasonably likely to result in a Material Adverse Effect, except any action, suit or proceeding which has been brought prior to the Closing Date as to which the Bank has received an opinion of counsel satisfactory to the Bank, in form and substance satisfactory to the Bank and the Bank's legal counsel, to the effect that such action, suit or proceeding is without substantial merit. (e) No Default. No default by the City has occurred and is continuing in the payment of the principal of or premium, if any, or interest on any Revenues Secured Debt including, without limitation, regularly scheduled payments on Swap Contracts which constitute Revenues Secured Debt. No bankruptcy, insolvency or other similar proceedings pertaining to the City or any agency or instrumentality of the City are pending or presently contemplated. No Default or Event of Default has occurred and is continuing hereunder. No "default" or "event of default" under, and as defined in, any of the other Program Documents has occurred and is continuing. The City is not presently in default under any material agreement to which it is a party which could reasonably be expected to have a Material Adverse Effect. The City is not in violation of any material term of the organizational documents or authorizing legislation applicable to the City or any material term of any bond indenture or agreement to which it is a party or by which any of its Property is bound which could reasonably be expected to result in a Material Adverse Effect. (f) Financial Statements. The Audited Financial Statements, which financial statements, accompanied by the audit report of Weaver and Tidwell, L.L.P., nationally recognized independent public accountants, heretofore furnished to the Bank, which are consistent in all material respects with the audited financial statements of the City for the Fiscal Year ended September 30, 2018, fairly present the financial condition of the City in all material respects as of such dates and the results of its operations for the periods then ended in conformity with GAAP. Since the date of the Audited Financial Statements, there has been no material adverse change in the financial condition or operations of the City that could reasonably be expected to result in a Material Adverse Effect. (g) Margin Regulations. The City will not use the proceeds from the issuance of any of the Notes in contravention of any Law or of any Program Document. The City is not engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no part of the proceeds from the issuance of any of the Notes will be used to purchase or carry any such Margin Stock or extend credit to others for the purpose of purchasing or carrying any such Margin Stock. (h) Complete and Correct Information. All information, reports and other papers and data with respect to the City furnished by the City to the Bank were, at the time the same were so furnished, correct in all material respects. Any financial, budget and other projections furnished by the City to the Bank were prepared in good faith on the basis of the assumptions stated -32- therein, which assumptions were fair and reasonable in light of conditions existing at the time of delivery of such financial, budget or other projections, and represented, and as of the date of this representation, represent (subject to the updating or supplementation of any such financial, budget or other projections by any additional information provided to the Bank in writing, the representations contained in this Agreement being limited to financial, budget or other projections as so updated or supplemented), in the judgment of the City, a reasonable, good faith estimate of the information purported to be set forth, it being understood that uncertainty is inherent in any projections and that no assurance can be given that the results set forth in the projections will actually be obtained. No fact is known to the City that materially and adversely affects or in the future may (as far as it can reasonably foresee) materially and adversely affect the security for any of the Notes or any of the other Obligations, or the ability of the City to repay when due the Obligations, that has not been set forth in the financial statements and other documents referred to in this Section 4.1(h) or in such information, reports, papers and data or otherwise disclosed in writing to the Bank. The documents furnished and statements made by the City in connection with the negotiation, preparation or execution of this Agreement and the other Program Documents do not contain untrue statements of material facts or omit to state material facts necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading. (i) Taxes. The City has filed or caused to be filed, if any, all material tax returns required by law to be filed and has paid or caused to be paid all material taxes, assessments and other governmental charges levied upon or in respect of any of its properties, assets or franchises, other than taxes the validity or amount of which are being contested in good faith by the City by appropriate proceedings and for which the City shall have set aside on its books adequate reserves in accordance with GAAP. 0) Legal, Valid, and Binding Obligations. This Agreement has been duly executed and delivered by one or more duly authorized officers of the City, and each of the Program Documents to which the City is a party, when executed and delivered by the City will be, a legal, valid and binding obligation of the City enforceable in accordance with its terms, except as such enforceability may be limited by (a) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar Law affecting creditors' rights generally, and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). (k) No Further Consent or Approval. The execution, delivery and performance of this Agreement and each of the other Program Documents in accordance with their respective terms do not and will not (i) contravene the City's Charter, (ii) require any consent or approval of any creditor of the City, (iii) violate any Laws (including, without limitation, Regulations T, U or X of the FRB, or any successor regulations), (iv) conflict with, result in a breach of or constitute a default under any contract to which the City is a party or by which it or any of its Property may be bound or (v) result in or require the creation or imposition of any Lien upon or with respect to any Property now owned or hereafter acquired by the City or any Affiliate thereof except such Liens, if any, expressly created by a Program Document. 51911 (1) Incorporation by Reference. The representations and warranties of the City contained in the other Program Documents to which the City is a party, together with the related definitions of terms contained therein, are hereby incorporated by reference in this Agreement as if each and every such representation and warranty and definition were set forth herein in its entirety, and the representations and warranties made by the City in such Sections are hereby made for the benefit of the Bank. No amendment to or waiver of such representations and warranties or definitions made pursuant to the relevant Program Document or incorporated by reference shall be effective to amend such representations and warranties and definitions as incorporated by reference herein without the prior written consent of the Bank. (m) Security. (i) The Ordinance creates a valid lien on, pledge of, and security interest in the Net Revenues and applicable funds created in the Ordinance as security for the Notes and all action necessary to perfect the lien on, pledge of, and security interest of the owners of the Notes in such security has been duly and validly taken; (ii) The Ordinance creates a valid lien on, pledge of, and security interest in the Security as security for the repayment of the Obligations and all action necessary to perfect the lien on, pledge of, and security interest of the Bank in the Security has been duly and validly taken; (iii) Except in regards to Bonds Similarly Secured and other obligations permitted to be issued or incurred by the ordinances authorizing Bonds Similarly Secured, the Ordinance does not permit the issuance of any debt secured by the Security to rank senior to the Notes and all Obligations due and owing the Bank hereunder. No filing, registering, recording or publication of the Ordinance, this Agreement or any other instrument is required to establish the pledge under the Ordinance or this Agreement or to perfect, protect or maintain the lien created hereby or thereby on the Security; (n) No Proposed Legal Changes. There is no amendment, or to the knowledge of the City, proposed amendment to the Constitution of the State or any State Law or any administrative interpretation of the Constitution of the State or any State Law, or any legislation that has passed either house of the legislature of the State, or any judicial decision interpreting any of the foregoing, the effect of which could reasonably be expected to result in a Material Adverse Effect. (o) Proceeds. The proceeds of the Notes will be applied by the City, for deposit into the Note Payment Fund to the payment or prepayment of the Notes or otherwise to the Note Construction Fund and none of the funds borrowed by virtue of this Agreement will be used in any manner or for any purpose except in the manner and for the purposes authorized by State law and the Ordinance. (p) ERISA. The City is not subject to ERISA and maintains no Plans. (q) Environmental Compliance. The operations of the System are in material compliance with all of the requirements of applicable federal, state and local environmental, health and safety statutes and regulations and are not the subject of any governmental -34- investigation evaluating whether any remedial action is needed to respond to a release of any toxic or hazardous waste or substance into the environment, where a failure to comply with any such requirement or the need for any such remedial action could reasonably be expected to result in a Material Adverse Effect. (r) Solvency. The City is, and upon the incurrence of any Note or any Obligation by the City on any date on which this representation and warranty is made will be, solvent and able to pay its debts as they become due. (s) Tax Exempt Status. The City has not taken any action or omitted to take any action, and knows of no action taken by any Governmental Authority, which action, if taken or omitted, would adversely affect the exclusion of interest on the Tax -Exempt Notes from gross income for purposes of federal income taxation. (w) Usury. The terms of this Agreement and the other Program Documents regarding the calculation and payment of interest and fees do not violate any applicable usury laws. (x) Sanctions Concerns. (i) Neither the City, nor, to the knowledge of the City, any director, officer, employee, agent, affiliate or representative thereof, is an individual or entity that is, or is owned or controlled by any individual or entity that is (A) currently the subject or target of any Sanctions, (B) included on OFAC's List of Specially Designated Nationals, HMT's Consolidated List of Financial Sanctions Targets and the Investment Ban List, or any similar list enforced by any other relevant sanctions authority or (C) located, organized or resident in a Designated Jurisdiction. (ii) Anti -Corruption Laws. The City has conducted its business in compliance with the United States Foreign Corrupt Practices Act of 1977 and other similar anti -corruption legislation in other jurisdictions, and have instituted and maintained policies and procedures designed to promote and achieve compliance with such laws. (bb) Compliance with Laws. The City is in compliance with all Laws, except for such noncompliance that, singly or in the aggregate, has not caused or is not reasonably expected to cause a Material Adverse Effect. (cc) Title; Licenses. Except as disclosed in writing to the Bank prior to execution of this Agreement, the City has good title to all of the facilities, plants and other property which constitute the System, except to the extent failure to do so could not reasonably be expected to result in a Material Adverse Effect. Except as disclosed in writing to the Bank prior to execution of this Agreement, the City has all rights, permits, easements, servitudes, rights -of -way and licenses necessary to carry on its business as presently conducted. (dd) Insurance. The City currently maintains a system of self-insurance or insurance coverage with insurance companies believed by the City to be capable of performing their obligations under the respective insurance policies issued by such insurance companies to the City (as determined in its reasonable discretion) and in full compliance with Section 5.08 of the Ordinance. -35- (ee) Paying AgentlRegistrar. The Bank of New York Mellon Trust Company, N.A. is the duly appointed and acting Paying Agent/Registrar for the Notes. (ff) Immunity. The City is not entitled to claim immunity on the grounds of sovereignty or other similar grounds (including, without limitation, governmental immunity) with respect to itself or its revenues (irrespective of their use or intended use) to the extent waived pursuant to Section 1371.059, Texas Government Code, as amended. (gg) No Public Vote or Referendum. There is no public vote or referendum pending, proposed or concluded, the results of which could reasonably be expected to result in a Material Adverse Effect. (hh) Swap Contracts. The City has not entered into any Swap Contract relating to Revenues Secured Debt (a) wherein any termination payment thereunder is senior to or on a parity with the payment of the Notes or the other Obligations or (b) which requires the City to post cash collateral to secure its obligations thereunder. ARTICLE V CONDITIONS Section 5.1. Closing Conditions. The Bank's obligations under this Agreement shall be conditioned upon the performance by the City of its obligations to be performed hereunder and the tender by the City of its performance at the Closing as described in this Section, which Closing shall not be completed unless the Bank shall receive at the time of the Closing the following: (i) The Bank shall have received the following documents, each dated and in form and substance as is satisfactory to the Bank: (A) executed originals or certified copies of all approvals, authorizations and consents of any trustee, or holder of any indebtedness or obligation of the City necessary for the City to enter into each of the Program Documents and the transactions contemplated herein and therein; (B) the approving opinion of the Attorney General of Texas with respect to the proceedings authorizing issuance of the Notes and execution of this Agreement and matters related thereto; (C) a counterpart of this Agreement, duly executed by the City and the Bank; (D) a certificate of an Authorized Representative, certifying that all conditions precedent set forth in the Ordinance with respect to issuance of the Notes shall have been satisfied; -36- (E) certified copies of all approvals or authorizations by, or consents of, or notices to or registrations with, any Governmental Authority required for the City to enter into this Agreement and the other Program Documents; (F) a certificate of an Authorized Representative, certifying the names and true signatures of the officers of the City authorized to sign this Agreement, the Notes and the other Program Documents; (G) such financial information, budgets, projections, investment policies and guidelines for permitted investments of the City provided to the Bank as the Bank has requested; (H) the audited annual financial statements of the City for the Fiscal Year ended September 30, 2018 and a copy of the most recent budget of the City; (I) an executed original or certified copy, as applicable, of each of the Program Documents; Date; (J) a copy of the City's Investment Policy in effect on the Closing (K) an IRS Form W-9 duly completed by the City. (ii) The Bank shall have received a written description of all actions, suits or proceedings pending or threatened against the City in any court or before any arbitrator of any kind or before or by any governmental or non -governmental body which could reasonably be expected to result in a Material Adverse Effect with respect to the City, and such other statements, certificates, agreements, documents and information with respect thereto as the Bank may reasonably request. No law, regulation, ruling or other action of the United States, the State of Texas or any political subdivision or authority therein or thereof shall be in effect or shall have occurred, the effect of which would be to prevent the City from fulfilling its obligations under this Agreement and the other Program Documents. (iii) The Bank shall have received an opinion addressed to the Bank and dated the Closing Date from the City's Counsel, in form and substance reasonably satisfactory to the Bank and its counsel, which provides for, among other opinions, the following: (1) the execution, delivery and performance by the City of this Agreement, the Notes and the other Program Documents are within the City's powers, have been duly authorized by all necessary action, and require no action by or in respect of, or filing with, any governmental body, agency or official that has not been accomplished, and (2) such other matters as the Bank may reasonably request, in form and substance satisfactory to the Bank and its counsel. (iv) The following statement shall be true and correct on the Closing Date, and the Bank shall have received a certificate signed by an Authorized Representative dated -37- the Closing Date, certifying that: (A) the representations and warranties of the City contained in each of the Program Documents and each certificate, letter, other writing or instrument delivered by the City to the Bank pursuant hereto or thereto are true and correct on and as of the Closing Date as though made on and as of such date; (B) no Default or Event of Default has occurred and is continuing or would result from the City's execution and delivery of this Agreement, or the acceptance of the Commitment by the City; (C) the audited annual financial statements of the City for the Fiscal Year ended September 30, 2018, including the balance sheet as of such date of said period, all examined and reported on by Weaver and Tidwell, L.L.P., as heretofore delivered to the Bank correctly and fairly present the financial condition of the City as of said date and the results of the operations of the City for such period, have been prepared in accordance with GAAP consistently applied except as stated in the notes thereto; (D) since the release of the audited annual financial statements of the City for the Fiscal Year ended September 30, 2018, no Material Adverse Change with respect to the City has occurred prior to the Closing Date; (E) the acceptance of the Commitment by the City pursuant to this Agreement is an arm's length commercial transaction between the City and the Bank; (F) the City has consulted with its own respective legal and financial advisors in connection with the acceptance of the Commitment by the City pursuant to this Agreement; (G) the Bank has not acted as a fiduciary in favor of the City with respect to the Notes or the acceptance of the Commitment by the City; (H) to the best knowledge of the City, the underlying unenhanced long-term ratings assigned to any Revenues Secured Debt by Fitch, Moody's and S&P have not been reduced, withdrawn or suspended since the date of the Rating Documentation and (I) that all conditions in this Section 5.1 (other than (viii), (xi) and (xii) (to the extent of any law, regulation, ruling or other action of the State of New York or any political subdivision or authority therein) for which the City has no knowledge) have been satisfied. (v) The Bank shall have received an opinion addressed to the Bank and dated the Closing Date of Bond Counsel as to the exclusion of interest on the Tax -Exempt Notes from gross income for federal income tax purposes of the Bank, the pledge of Net Revenues securing the Notes and the Obligations constituting a valid pledge, and such other matters as the Bank may reasonably request, in form and substance satisfactory to the Bank and its counsel. (vi) All necessary action on the part of the City shall have been taken as required for the assignment and pledge of a lien on the Net Revenues for the benefit of the Bank as described in Section 2.11 hereof. (vii) All other legal matters pertaining to the execution and delivery of this Agreement, the Notes and the Ordinance shall be reasonably satisfactory to the Bank and its counsel. (viii) The Bank shall have received evidence from Fitch, Moody's and S&P confirming that the underlying unenhanced long-term rating assigned to the Bonds Similarly Secured is at least "A+" (or its equivalent), "A1" (or its equivalent) and "AA-" (or its equivalent), respectively, (referred to herein as the "Rating Documentation "). -38- (ix) No Note shall be registered with The Depository Trust Company or any other securities depository. No offering document or official statement shall be prepared with respect to the Notes. (x) The Bank shall have received such other documents, certificates, opinions, approvals and filings with respect to this Agreement, the Notes and the other Program Documents as the Bank has requested of the City. (xi) No law, regulation, ruling or other action of the United States, the State of New York or the State of Texas or any political subdivision or authority therein or thereof shall be in effect or shall have occurred, the effect of which would be to prevent the Bank from fulfilling its obligations under this Agreement. (xii) The City shall have received an opinion addressed to the City and dated the Closing Date of counsel to the Bank that this Agreement constitutes a valid binding and enforceable obligation against the Bank, in form and substance reasonably satisfactory to the City and its Bond Counsel. Section 5.2. Certain Conditions to Bank's Obligations. The Bank has entered into this Agreement in reliance upon the representations and warranties of the City contained herein and to be contained in the documents and instruments to be delivered at the Closing and at each Purchase, and upon the performance by the City of its obligations hereunder, as of the date hereof and as of the Closing Date and each Purchase Date. Accordingly, the Bank's obligations under this Agreement to purchase, to accept delivery of and to pay for the Notes shall be subject to performance by the City of its obligations to be performed hereunder and the delivery of the documents and instruments required to be delivered hereby at or prior to each Purchase, and shall also be subject to the following additional conditions: (a) delivery to the Bank of a Request for Purchase (except in the case of the Initial Purchase) executed by an Authorized Representative; (b) the representations and warranties of the City contained herein shall be true, complete and correct on the date hereof, on the Closing Date and on each Purchase Date; (c) at the time of each Purchase, this Agreement and the Ordinance shall be in full force and effect in accordance with their respective terms and shall not have been amended, modified or supplemented in any manner which will adversely affect (i) the ability of the City to issue the Notes or perform its obligations thereunder or under this Agreement or (ii) the security for the Notes; (d) both at the time of the Closing and at the time of each Purchase, all official action of the City relating to this Agreement, the Notes and the Ordinance shall have been taken and shall be in full force and effect in accordance with their respective terms and shall not have been amended, modified or supplemented in any material adverse respect; -39- (e) each Note requested to be purchased by the Bank shall be delivered to the Bank on the related Purchase Date purchased by the Bank pursuant to the terms hereof and shall be in an amount not less than $2,000,000 and in an integral multiple of $100,000 in excess thereof; (f) the Bank will have no obligation to purchase any Note if, because of a Change in Law, such request to purchase Notes made by the City would be illegal. In such event, the City will have no liability whatsoever with respect to such request for purchase and the Bank will have no liability for its failure to so purchase if such failure is due to a Change in Law; (g) at the time of each Purchase, no Default or Event of Default shall have occurred and be continuing; (h) on the initial issuance date of a Tax -Exempt Note, delivery of an opinion dated such issuance date of Bond Counsel as to the exclusion of interest on the Tax - Exempt Notes from gross income for federal income tax purposes of the Noteholder, the pledge of Net Revenues securing the Tax -Exempt Notes and the Obligations constituting a valid pledge, and such other matters as the Bank may reasonably request, in form and substance satisfactory to the Bank and its counsel; (i) on the initial issuance date of a Tax -Exempt Note, delivery of an executed Tax Certificate, which shall include an Issue Price Certificate executed by the Bank; and 0) on the initial issuance date of a Tax -Exempt Note, delivery of a copy of the related IRS Form 8038-G duly executed by the City to be filed with the Internal Revenue Service. The submission by an Authorized Representative of a Request for Purchase in connection with each Purchase shall be deemed to be a representation and warranty by the City on the date of each such Purchase that the conditions specified in clauses (b) and (g) of this Section 5.2 have been satisfied on and as of such date. Section 5.3. Satisfaction or Waiver of Conditions. All the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to the Bank, and the Bank shall have the right to waive any condition set forth in this Article V. ARTICLE VI COVENANTS Section 6.1. Covenants of the City. The City covenants and agrees, from the date hereof and until the Termination Date and the payment in full of all Notes and Obligations, unless the Bank shall otherwise consent in writing: -40- (a) Information. The City will deliver to the Bank: (i) Annual Report. As soon as available, and in any event within 270 days after the end of the Fiscal Year, the annual audited financial statements of the City together with the opinion of the City's independent accountants. (ii) Unaudited Quarterly Financials. As soon as available, and in any event within 45 days after each of the first three quarters of each Fiscal Year, the unaudited financial statements of the City, including the balance sheet as of the end of such quarter and a statement of income and expenses, all in reasonable detail and certified, subject to year-end adjustment, by an Authorized Representative. (c) Compliance Certificate. In connection with the financial statements required to be delivered by the City pursuant to Sections 6.1(a)(i) and 6.1(a)(ii) hereof, a Compliance Certificate signed by an Authorized Representative (x) stating that no Event of Default or Default has occurred, or if such Event of Default or Default has occurred, specifying the nature of such Event of Default or Default, the period of its existence, the nature and status thereof and any remedial steps taken or proposed to correct such Event of Default or Default and (y) demonstrating compliance with the financial covenants set forth in Section 5.07 of the Ordinance. (d) Budget. As soon as available, and in any event within 60 days following the end of each Fiscal Year, the operating budget of the City. (e) Notices of Resignation of the Paying Agent Registrar. As promptly as practicable, written notice to the Bank of any resignation of the Paying Agent/Registrar immediately upon receiving notice of the same. (f) Offering Memorandum and Material Event Notices. (A) Within ten (10) days after the issuance of any Revenues Secured Debt with respect to which a final official statement or other offering or disclosure document has been prepared by the City, (1) a copy of such official statement or offering circular or (2) notice that such information has been filed with EMMA and is publicly available; and (B) during any period of time the City is subject to continuing disclosure requirements under Rule 15c2-12 promulgated pursuant to the Securities Exchange Act of 1934, as amended (17 C.F.R. Sec. 240-15c2-12), or any successor or similar legal requirement, immediately following any dissemination, distribution or provision thereof to any Person, (1) a copy of any reportable event notice (as described in b(5)(i)(C) of Rule 15c2-12) disseminated, distributed or provided in satisfaction of or as may be required pursuant to such requirements or (2) notice that such event notice has been filed with EMMA and is publicly available. (g) Notice of Default; Event of Default; Participant Agreement Event of Default; Interconnection Agreement Event of Default. (i) Promptly upon obtaining knowledge of any Default, Event of Default, Participation Agreement Event of Default or Interconnection Agreement Event of Default, or notice thereof, and in any event within -41- five (5) days thereafter, a certificate signed by an Authorized Representative specifying in reasonable detail the nature and period of existence thereof and what action the City has taken or proposes to take with respect thereto; and (ii) promptly following a written request of the Bank, a certificate of an Authorized Representative as to the existence or absence, as the case may be, of a Default or an Event of Default under this Agreement. (h) Litigation. As promptly as practicable, written notice to the Bank of all actions, suits or proceedings pending or threatened against the City before any arbitrator of any kind or before any court or any other Governmental Authority which could reasonably be expected to result in a Material Adverse Effect. (i) Amendments. Promptly after the adoption thereof and to the extent is not required to receive and make notice of the same, copies of any amendments to the Program Documents. 0) Participation Agreement Budget. A copy of the annual Budget (as defined in the Participation Agreement) or any changes to the Budget. (k) Other Information. Such other information regarding the business affairs, financial condition and/or operations of the City as the Bank may from time to time reasonably request. (b) Access to Records. The City will keep adequate records and books of account, in which complete entries will be made, reflecting all financial transactions of the City, and furnish to the Bank such information regarding the financial condition, results of operations, or business of the City as the Bank may reasonably request and will permit any officers, employees, or agents of the Bank to visit and inspect any of the properties of the City and to discuss matters reasonably pertinent to an evaluation of the credit of the City, all at such reasonable times as the Bank may reasonably request. All information received by or provided to the Bank pursuant to this Agreement, unless otherwise made public by the City, will be held as confidential information by such party. (c) Proceeds of the Notes. None of the proceeds of the Notes will be used in any manner or for any purpose except in the manner and for the purposes authorized by Texas law, this Agreement and the Ordinance. The City shall not use the proceeds of the Notes, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose, in each case in violation of, or for a purpose which violates, or would be inconsistent with, Regulation T, U or X of the Board of Governors of the Federal Reserve System. (d) No Amendment of Program Documents. The City shall not modify, amend or consent to any modification, amendment or waiver in any material respect of any Program Document without the prior written consent of the Bank. -42- (e) Additional Indebtedness. It will use its best efforts and with due diligence endeavor to sell a sufficient amount of additional Indebtedness in order to have funds available, together with other moneys available for such purpose, to pay all amounts owed to the Bank under this Agreement. Other than to repay the Obligations in full, the City shall not issue any (x) Subordinate Lien Obligations (other than the Obligations) (y) Indebtedness issued pursuant to Section 5.09 of the Ordinance, or (z) any Senior Lien Obligations without the prior written consent of the Bank; provided that the consent of the Bank shall not be required for (i) the issuance of Senior Lien Obligations in a cumulative amount not to exceed $50,000,000 and (ii) the issuance of Senior Lien Obligations issued for the purpose of refunding previously issued Senior Lien Obligations. (f) Taxes and Liabilities. The City will pay all of its indebtedness and obligations promptly and in accordance with its terms and pay and discharge or cause to be paid and discharged promptly all taxes, assessments, and governmental charges or levies imposed upon it or upon its income and profits, or upon any of its property, real, personal, or mixed, or upon any part thereof, before the same shall become in default except for those matters which are reasonably being contested in good faith by appropriate action or proceedings or for which the City has established adequate reserves in accordance with GAAP. (g) Supplemental Ordinances and Further Assurances. The City will at any and all times, insofar as it may be authorized so to do by law, pass, make, do execute, acknowledge, and deliver all and every such further resolutions, acts, assignments, recordings, filings, transfers, and assurances as may be necessary or desirable for the better assuring, conveying, granting, assigning, and confirming all and singular the rights, revenues, and other funds and the Security pledged or assigned to the payment of the Notes, or intended so to be, of which the City may become bound to pledge or assign. (h) Performance and Compliance with Other Covenants. The City agrees that it will perform and comply with each and every covenant and agreement required to be performed or observed by it in the Ordinance and each of the other Program Documents to which it is a party, which provisions, as well as related defined terms contained therein, are hereby incorporated by reference herein with the same effect as if each and every such provision were set forth herein in its entirety all of which shall be deemed to be made for the benefit of the Bank and shall be enforceable against the City. To the extent that any such incorporated provision permits the City or any other party to waive compliance with such provision or requires that a document, opinion or other instrument or any event or condition be acceptable or satisfactory to the City or any other party, for purposes of this Agreement, such provision shall be complied with unless it is specifically waived by the Bank in writing and such document, opinion or other instrument and such event or condition shall be acceptable or satisfactory only if it is acceptable or satisfactory to the Bank which shall only be evidenced by the written approval by the Bank of the same. Except as permitted by Section 6.1(d) hereof, no termination or amendment to such covenants and agreements or defined terms or release of the City with respect thereto made pursuant to the Ordinance or any of the other Program Documents to which the City is a party, shall be effective to terminate or amend such covenants and agreements and defined terms or release the City with respect thereto in each case as incorporated by reference herein without the prior written consent of the Bank. Notwithstanding any termination or expiration of the Ordinance or any such other -43- Program Document to which the City is a party, the City shall continue to observe the covenants therein contained for the benefit of the Bank until the termination of this Agreement and the payment in full of the Notes and all other Obligations. All such incorporated covenants shall be in addition to the express covenants contained herein and shall not be limited by the express covenants contained herein nor shall such incorporated covenants be a limitation on the express covenants contained herein. (i) Compliance with Rules and Regulations. The City shall comply with all laws, ordinances, orders, rules, and regulations of duly constituted public authorities which if not complied with would have a Material Adverse Effect with respect to the City. 0) Investment Policy. The City will comply with the City's Investment Policy and State law with respect to investments. (k) Preservation of Existence, Etc. The City shall maintain its existence and preserve and keep in force and effect all licenses, permits, franchises and qualifications necessary to the proper conduct of its operations. The City will not (i) terminate, wind up, liquidate or dissolve its affairs or consolidate or merge with or into any Person except to the extent that the City repays to the Bank all Obligations in full prior to the date such event takes effect or (ii) sell, transfer, convey or lease (whether in a single transaction or a series of transactions) all or any substantial part of the System. The City will not amend any constituting document or any agreement governing its operations or management in a manner that could have a Material Adverse Effect with respect to the City. (m) Exempt Status. The City shall not take any action or omit to take any action that, if taken or omitted, would adversely affect the excludability of interest on the Tax -Exempt Notes from the gross income of the holders thereof for purposes of federal income taxation. (n) Other Agreements. In the event that the City shall, directly or indirectly, enter into or otherwise consent to any Bank Agreement which such Bank Agreement provides such Person with different or more restrictive covenants, different or additional events of default and./or greater rights and remedies than are provided to the Bank in this Agreement, the City shall provide the Bank with a copy of each such Bank Agreement and such different or more restrictive covenants, different or additional events of default and/or greater rights and remedies shall automatically be deemed to be incorporated into this Agreement and the Bank shall have the benefits of such different or more restrictive covenants, different or additional events of default and/or greater rights and remedies as if specifically set forth herein. The City shall promptly enter into an amendment to this Agreement to include different or more restrictive covenants, different or additional events of default and/or greater rights and remedies; provided that the Bank shall have and maintain the benefit of such different or more restrictive covenants, different or additional events of default and/or greater rights and remedies even if the City fails to provide such amendment. (o) Swap Contracts. The City shall at all times require that any termination fees payable in connection with any Swap Contract entered into by the City and payable from and secured by Net Revenues, shall be subordinate to the payment of the Notes and the Obligations -44- hereunder. The City shall not provide any collateral to support the obligations of the City under any Swap Contract entered into by the City and payable from and secured by Net Revenues, other than a Lien on Net Revenues. Except as set forth in the first sentence of this Section, the City shall at all times require that any Lien on Net Revenues securing any Swap Contract entered into by the City and payable from and secured by Net Revenues, be on a parity with the Lien securing the Indebtedness to which such Swap Contract relates. (p) Sovereign Immunity. Pursuant to Section 1371.059, Texas Government Code, as amended, the City agrees to waive sovereign immunity from suit and liability for the purposes of adjudicating a claim to enforce its duties and obligations under this Agreement or for damages for breach of this Agreement. (q) Bonding Capacity. The City shall at all times maintain the ability under the Ordinance to issue Subordinate Lien Obligations in an amount at least equal to the sum of (i) the aggregate principal amount of the Notes, plus (ii) the aggregate amount of accrued interest to maturity on all Notes, plus (iii) any Obligations. (r) ERISA. The City will comply in all material respects with Title IV of ERISA, if, when and to the extent applicable. (s) Further Assurances. The City shall promptly upon request by the Bank, execute and deliver such further documents and do such other acts and things as the Bank may reasonably request in order to effect fully the purposes of this Agreement and the other Program Documents, and to provide for payment of the Notes and the Obligations and for granting the pledge of the Security in accordance with the terms of this Agreement and the other Program Documents. (t) Offering Document. The City shall not refer to the Bank in any offering document or make any changes in reference to the Bank in any offering document without the Bank's prior written consent thereto, such consent not to be unreasonably withheld. (u) Accuracy of Information. All data, certificates, reports, documents and other information furnished to the Bank, whether pursuant to this Agreement, or in connection with or pursuant to an amendment or modification of, or waiver under, this Agreement shall, at the time the same are so furnished, (i) be complete and correct in all material respects to the extent necessary to give the Bank true and accurate knowledge of the subject matter thereof, and (ii) not contain any untrue statements of a material fact or omit to state a material fact necessary in order to make the statements contained therein not misleading, and the furnishing of the same to the Bank shall constitute a representation and warranty by the City to that effect. Each financial statement furnished to the Bank, whether pursuant to this Agreement, or in connection with or pursuant to an amendment or modification of, or waiver under, this Agreement, shall, at the time the same is so furnished, fairly present the financial condition and results of operations of the City. (w) Liens. The City will not create, incur, assume or suffer to exist any pledge of, lien on or other security interest in the Security except as provided in the Program Documents. -45- (x) Paying Agent/Registrar. No substitution of the Paying Agent/Registrar shall occur without the prior written consent of the Bank. (y) Total Outstanding. At no time shall the City permit the aggregate principal amount of all Notes outstanding and unpaid to exceed the Commitment. (z) Underlying Rating. The City shall at all times maintain a rating on the Bonds Similarly Secured from at least one Rating Agency. The City covenants and agrees that it shall not at any time withdraw any long-term unenhanced rating on the Bonds Similarly Secured from any of Fitch, Moody's or S&P if the effect of such withdrawal would be to cure a Default or an Event of Default under this Agreement or reduce the Applicable Spread - LIBOR (Tax -Exempt) or Applicable Spread - LIBOR (Taxable), as applicable. (aa) Maintenance of Property. The City shall (a) maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted except to the extent the failure to do so could not reasonably be expected to result in a Material Adverse Effect; (b) make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) use the standard of care typical in the industry in the operation and maintenance of its facilities. (bb) Maintenance of Insurance. The City shall maintain a system of self-insurance or insurance coverage with insurance companies believed by the City to be capable of performing their obligations under the respective insurance policies issued by such insurance companies to the City (as determined in its reasonable discretion) and in full compliance with Section 5.08 of the Ordinance. (cc) Sanctions. The City will not directly or indirectly, use any proceeds from the issuance of any of the Notes, or lend, contribute or otherwise make available such proceeds to any Person, to fund any activities of or business with any Person, or in any Designated Jurisdiction, that, at the time of such funding, is the subject of Sanctions, or in any other manner that will result in a violation by any Person of Sanctions. (dd) Anti -Corruption. The City will not directly or indirectly, use any proceeds from the issuance of the Notes for any purpose which would breach the United States Foreign Corrupt Practices Act of 1977 and other similar anti -corruption legislation in other jurisdictions. (ee) Participation Agreement. Upon the occurrence of a change of ownership of Sharyland Utilities, L.P., the City shall cause the successor entity to become a party to the Participation Agreement or accept an assignment of all of the obligations of Sharyland Utilities, L.P. under the Participation Agreement. .Ertl ARTICLE VII DEFAULTS AND REMEDIES Section 7.1. Events of Default. The occurrence of any of the following events (whatever the reason for such event and whether voluntary, involuntary, or effected by operation of Law) shall be an "Event of Default" hereunder, unless waived in writing by Bank: (a) the City shall fail to pay the principal of or interest on any Note when due (whether by scheduled maturity, required prepayment, redemption or otherwise); (b) the City shall fail to pay any Obligation (other than the obligation to pay the principal of or interest on the Notes or) when due and such failure shall continue for three (3) Business Days; (c) any representation or warranty made by or on behalf of the City in this Agreement or in any other Program Document or in any certificate or statement delivered hereunder or thereunder shall be incorrect or untrue in any material respect when made or deemed to have been made or delivered; (d) the City shall default in the due performance or observance of any of the covenants set forth in Sections 6.1(a), (b), (e), (k), (o), (p), (w), (x) or (y) hereof; (e) the City shall default in the due performance or observance of any other term, covenant or agreement contained in this Agreement or any other Program Document and such default shall remain unremedied for a period of thirty (30) days after the occurrence thereof; (f) the City shall (i) have entered involuntarily against it an order for relief under the United States Bankruptcy Code, as amended, (ii) become insolvent or shall not pay, or be unable to pay, or admit in writing its inability to pay, its debts generally as they become due, (iii) make an assignment for the benefit of creditors, (iv) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its Property, (v) institute any proceeding seeking to have entered against it an order for relief under the United States Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, marshalling of assets, adjustment or composition of it or its debts under any Law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (vi) take any corporate action in furtherance of any matter described in parts (i) through (v) above, or (vii) fail to contest in good faith any appointment or proceeding described in Section 7.1(g) of this Agreement; (g) a custodian, receiver, trustee, examiner, liquidator or similar official shall be appointed for the City or any substantial part of its Property, or a proceeding described -47- in Section 7.1(f)(v) shall be instituted against the City and such proceeding continues undischarged or any such proceeding continues undismissed or unstayed for a period of sixty (60) or more days; (h) (i) a debt moratorium, debt adjustment or comparable restriction is imposed on the repayment when due and payable of the principal of or interest on any Debt of the City by the City or any Governmental Authority with appropriate jurisdiction or (ii) a debt restructuring is imposed on the repayment when due and payable of the principal of or interest on any Debt of the City by any Governmental Authority with appropriate jurisdiction; (i) (i) any provision of this Agreement or any other Program Document related to (A) payment of principal of or interest on the Notes or any other Revenues Secured Debt or (B) the validity or enforceability of the pledge of the Security or any other pledge or security interest created by the Ordinance shall at any time for any reason cease to be valid and binding on the City as a result of any legislative or administrative action by a Governmental Authority with competent jurisdiction, or shall be declared, in a final nonappealable judgment by any court of competent jurisdiction, to be null and void, invalid or unenforceable; or (ii) the validity or enforceability of any material provision of this Agreement or any other Program Document related to (A) payment of principal of or interest on the Notes or any other Revenues Secured Debt, or (B) the validity or enforceability of the pledge of the Security or any other pledge or security interest created by the Ordinance shall be publicly contested by the City; or (iii) any other material provision of this Agreement or any other Program Document, other than a provision described in clause (i) above, shall at any time for any reason cease to be valid and binding on the City or shall be declared in a final non -appealable judgment by any court with competent jurisdiction to be null and void, invalid, or unenforceable, or the validity or enforceability thereof shall be publicly contested by the City; 0) dissolution or termination of the existence of the City; (k) the City shall (i) default on the payment of the principal of or interest on any Revenues Secured Debt beyond the period of grace, if any, provided in the instrument or agreement under which such Revenues Secured Debt was created or incurred; or (ii) default in the observance or performance of any agreement or condition relating to any Revenues Secured Debt or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event shall occur or condition exist, the effect of which default, event of default or similar event or condition is to permit (determined without regard to whether any notice is required) any such Revenues Secured Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Revenues Secured Debt; -48- (1) Reserved; (m) any final, unappealable judgment or judgments, writ or writs or warrant or warrants of attachment, or any similar process or processes, , in an aggregate amount in excess of $10,000,000 (after taking into account the amount of any available insurance coverage with written acknowledgement of such coverage having been provided by the provider of such insurance coverage to the Bank) shall be entered or filed against the City or against any of its Property and remain unpaid, unvacated, unbonded or unstayed for a period of ninety (90) days; (n) any "event of default" under any Program Document (as defined respectively therein) shall have occurred; or (o) (i) S&P shall have downgraded its rating of any long-term unenhanced Bonds Similarly Secured of the City to below "BBB-" (or its equivalent), or suspended or withdrawn its rating of the same due to credit related reasons; or (ii)] any of Fitch, Moody's and S&P shall have downgraded its rating of any long-term unenhanced Bonds Similarly Secured of the City to below "BBB-" (or its equivalent), "BaaY (or its equivalent), or "BBB-" (or its equivalent) respectively, or suspended or withdrawn its rating of the same due to credit related reasons; or Section 7.2. Remedies. If an Event of Default specified in Section 7.1 hereof shall occur and be continuing, the Bank may take one or more of the following actions at any time and from time to time (regardless of whether the actions are taken at the same or different times): (a) (i) by written notice to the Paying Agent/Registrar and the City, terminate the Available Commitment (with notice of termination provided in the form of Exhibit D hereto) and declare the outstanding amount of the Obligations under this Agreement to be immediately due and payable without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived, and an action therefor shall immediately accrue; (ii) deliver a written notice to the Paying Agent / Registrar and the City that an Event of Default has occurred and is continuing and direct the Paying Agent / Registrar and the City, as applicable, to cause an acceleration of the Notes or take such other remedial action as is provided for in the Ordinance; (iii) either personally or by attorney or agent without bringing any action or proceeding, or by a receiver to be appointed by a court in any appropriate action or proceeding, take whatever action at law or in equity may appear necessary or desirable to collect the amounts due and payable under the Program Documents or to enforce performance or observance of any obligation, agreement or covenant of the City under the Program Documents, whether for specific performance of any agreement or covenant of the City or in aid of the execution of any power granted to the Bank in the Program Documents; -49- (iv) at the expense of the City, cure any Default, Event of Default or event of nonperformance hereunder or under any Program Document; provided, however, that the Bank shall have no obligation to effect such a cure; and (v) exercise, or cause to be exercised, any and all remedies as it may have under the Program Documents (other than as provided for in clause (ii) of this Section 7.2(a)) and as otherwise available at law and at equity. (b) Notwithstanding the provisions of Section 7.2(a)(i) or 7.2(a)(ii), (x) the Bank shall not cause an acceleration of the Notes as described in Section 7.2(a)(i) or 7.2(a)(ii) until seven (7) days after the occurrence of an Event of Default specified in Section 7.1(a), 7.1(h), 7.1(i)(i), 7.1(i)(ii), 7.10), 7.1(k), 7.1(m) or 7.1(o)(i) and (y) the Bank shall notify the City of an acceleration at least one hundred eighty (180) days prior thereto in the case of any Event of Default not specified in the immediately preceding clause (x). Notwithstanding the foregoing sentence of this Section 7.2(b), if (i) (x) an Event of Default under Section 7.1(f) or 7.1(g) hereof occurs or (y) any other holder or credit enhancer of Revenues Secured Debt or any counterparty under any Swap Contract related thereto causes any such Revenues Secured Debt or other obligations of the City to become immediately due and payable (whether by repurchase, mandatory tender, mandatory redemption, acceleration or otherwise), the Bank may immediately, without notice, avail itself of the remedies set forth in Section 7.2(a)(i) or 7.2(a)(ii) hereof and/or declare or cause to be declared the unpaid principal amount of all outstanding Notes, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder to be immediately due and payable and (ii) any other holder or credit enhancer of Revenues Secured Debt or any counterparty under any Swap Contract related thereto has the right to cause such Revenues Secured Debt to be immediately due and payable (whether by repurchase, mandatory tender, mandatory redemption, acceleration or otherwise) on a date earlier than, or pursuant to a notice period which is shorter than what is set forth in the first sentence of this Section 7.2(b) in connection with a default related to such Revenues Secured Debt, then the Bank shall automatically have such right or shorter notice period, as applicable. Section 7.3. Suits at Law or in Equity and Mandamus. If any Event of Default shall occur, then and in every such case the Bank shall be entitled to proceed to protect and enforce its rights by such appropriate judicial proceeding as it may deem most effectual to protect and enforce any such right, either by suit, in equity, or by action at law, whether for the specific performance of any covenant or agreement contained in this Agreement, in aid of the exercise of any power granted in this Agreement, or to enforce any other legal or equitable right vested in the Bank by this Agreement, the Notes or by law. The provisions of this Agreement shall be a contract with each and every Noteholder and the duties of the City shall be enforceable by any Noteholder by mandamus or other appropriate suit, action, or proceeding in any court of competent jurisdiction. Section 7.4. No Waiver. No failure on the part of Bank to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder preclude any further exercise thereof or the exercise of any other -50- right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. No delay or omission by the Bank in the exercise of any right, remedy or power or in the pursuit of any remedy shall impair any such right remedy or power or be construed to be a waiver of any default on the part of the Bank or to be acquiescence therein. No express or implied waiver by the Bank of any Event of Default shall in any way be a waiver of any future or subsequent Event of Default. Section 7.5. Discontinuance of Proceedings. In case the Bank shall proceed to invoke any right, remedy or recourse permitted hereunder or under the Program Documents and shall thereafter elect to discontinue or abandon the same for any reason, the Bank shall have the unqualified right so to do and, in such event, the City and the Bank shall be restored to their former positions with respect to the Obligations, the Program Documents and otherwise, and the rights, remedies, recourse and powers of the Bank hereunder shall continue as if the same had never been invoked. ARTICLE VIII GENERAL Section 8.1. Notices. Any notice or other communication to be given to the Bank under this Agreement may be given by delivering the same in writing to Bank of America, N.A., 211 N. Robinson, 2nd Floor, Oklahoma City, Oklahoma 73102; attention: Brent Riley, or to such different address for the Bank as the Bank shall have notified the City as aforesaid. Any notice or other communication to be given to the City under this Agreement may be given by delivering the same in writing to Lubbock Power & Light, 1301 Broadway St, Lubbock, Texas 79401; attention: Assistant Director of Electric Utilities/CFO, or to such different address for the City as the City shall have notified the Bank as aforesaid. The approval or other action or exercise of judgment by the Bank shall be evidenced by a writing signed on behalf of the Bank and delivered to the City. Section 8.2. Successors and Assigns. (a) Successors and Assigns Generally. This Agreement is a continuing obligation and shall be binding upon the City, its successors, transferees and assigns and shall inure to the benefit of the Noteholders and their respective permitted successors, transferees and assigns. The City may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Bank. Each Noteholder may, in its sole discretion and in accordance with applicable law, from time to time assign, sell or transfer in whole or in part, this Agreement, its interest in the Notes and the other Program Documents in accordance with the provisions of paragraph (b) or (c) of this Section. Each Noteholder may at any time and from time to time enter into participation agreements in accordance with the provisions of paragraph (d) of this Section. Each Noteholder may at any time pledge or assign a security interest subject to the restrictions of paragraph (e) of this Section. Bank of America, N.A. shall be the Bank hereunder until such time as the Majority Noteholder designates an alternate Person to serve as the Bank hereunder by delivery of written notice to the City and the Paying Agent/Registrar and such Person accepts and agrees to act as the Bank hereunder and under the Program Documents. -51- The Majority Noteholder may so designate an alternate Person to act as the Bank from time to time. Upon acceptance and notification thereof to the City and the Paying Agent/Registrar, the successor to the Bank for such purposes shall thereupon succeed to and become vested with all of the rights, powers, privileges and responsibilities of the Bank, and Bank of America, N.A. or any other Person being replaced as the Bank shall be discharged from its duties and obligations as the Bank hereunder. (b) Sales and Transfers by Noteholder to a Bank Transferee. Without limitation of the foregoing generality, a Noteholder may at any time sell or otherwise transfer to one or more transferees all or a portion of the Notes to a Person that is (i) an Affiliate of the Bank or (ii) a trust or other custodial arrangement established by the Bank or an Affiliate of the Bank, the owners of any beneficial interest in which are limited to "qualified institutional buyers" as defined in Rule 144A promulgated under the 1933 Act, or "accredited investors" as defined in Rule 501 of Regulation D under the 1933 Act (each, a "Bank Transferee"). From and after the date of such sale or transfer, Bank of America, N.A. (and its successors) shall continue to have all of the rights of the Bank hereunder and under the other Program Documents as if no such transfer or sale had occurred; provided, however, that (A) no such sale or transfer referred to in clause (b)(i) or (b)(ii) hereof shall in any way affect the obligations of the Bank hereunder, (B) the City and the Paying Agent/Registrar shall be required to deal only with the Bank with respect to any matters under this Agreement and (C) in the case of a sale or transfer referred to in clause (b)(i) or (b)(ii) hereof, only the Bank shall be entitled to enforce the provisions of this Agreement against the City. (c) Sales and Transfers by Noteholder to a Non -Bank Transferee. Without limitation of the foregoing generality, a Noteholder may at any time sell or otherwise transfer to one or more transferees which are not Bank Transferees but each of which constitutes a "qualified institutional buyer" as defined in Rule 144A promulgated under the 1933 Act or an "accredited investor" as defined in Rule 501 of Regulation D under the 1933 Act (each a "Non -Bank Transferee ") all or a portion of the Notes if (A) written notice of such sale or transfer, including that such sale or transfer is to a Non -Bank Transferee, together with addresses and related information with respect to the Non -Bank Transferee, shall have been given to the City, the Paying Agent/Registrar and the Bank (if different than the Noteholder) by such selling Noteholder and Non -Bank Transferee, and (B) the Non -Bank Transferee shall have delivered to the City, the Paying Agent/Registrar and the selling Noteholder, an investment letter in substantially the form attached as Exhibit H to this Agreement (the "Investor Letter"). From and after the date the City, the Paying Agent/Registrar and the selling Noteholder have received written notice and an executed Investor Letter, (A) the Non -Bank Transferee thereunder shall be a party hereto and shall have the rights and obligations of a Noteholder hereunder and under the other Program Documents, and this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to effect the addition of the Non -Bank Transferee, and any reference to the assigning Noteholder hereunder and under the other Program Documents shall thereafter refer to such transferring Noteholder and to the Non -Bank Transferee to the extent of their respective interests, and (B) if the transferring Noteholder no longer owns any Notes, then it shall relinquish its rights and be released from its obligations hereunder and under the Program Documents. -52- (d) Participations. Each Noteholder shall have the right to grant participations in all or a portion of such Noteholder's interest in the Notes, this Agreement and the other Program Documents to one or more other banking institutions; provided, however, that (i) no such participation by any such participant shall in any way affect the obligations of the Bank hereunder and (ii) the City and the Paying Agent/Registrar shall be required to deal only with the Bank, with respect to any matters under this Agreement, the Notes and the other Program Documents and no such participant shall be entitled to enforce any provision hereunder against the City. The City agrees that each participant shall be entitled to the benefits of Sections 3.2, 3.3 and 3.4 hereof to the same extent as if it were a Noteholder hereunder; provided, however, that a participant shall not be entitled to receive any greater payment under Sections 3.3 and 3.4 than such Noteholder would have been entitled to receive with respect to the participation sold to such participant, unless the sale of the participation to such participant is made with the City's prior written consent. (e) Certain Pledges. In addition to the rights of the Bank set forth above, the Bank may at any time pledge or grant a security interest in all or any portion of its rights or interests under the Notes, this Agreement and/or the Program Documents to secure obligations of the Bank or an Affiliate of the Bank, including any pledge or assignment to secure obligations to a Federal Reserve Bank or to any state or local governmental entity or with respect to public deposits; provided that no such pledge or assignment shall release the Bank from any of its obligations hereunder or substitute any such pledgee or assignee for the Bank as a party hereto. Section 8.3. Amendments. Any provision of this Agreement may be amended or modified if, but only if, such amendment or modification is in writing and is signed by the City and the Bank. Section 8.4. Governing Law; Jurisdiction; Etc. (a) THIS AGREEMENT AND THE OTHER PROGRAM DOCUMENTS AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER PROGRAM DOCUMENT (EXCEPT, AS TO ANY OTHER PROGRAM DOCUMENT, AS EXPRESSLY SET FORTH THEREIN) AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF TEXAS. (b) Submission to Jurisdiction. EACH OF THE BANK AND THE CITY IRREVOCABLY AND UNCONDITIONALLY AGREE THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST A PARTY IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER PROGRAM DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF TEXAS SITTING IN LUBBOCK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE NORTHERN DISTRICT OF TEXAS, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH TEXAS STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL -53- JUDGMENT IN ANY SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. (c) Waiver of Venue. EACH OF THIS PARTIES HEREAFTER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT 1T MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER PROGRAM DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT. (d) Service of Process. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 8.L NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW. Section 8.5. Waiver of Jury Trial, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER PROGRAM DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER PROGRAM DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. Section 8.6. Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. The parties agree that the electronic signature of a party to this Agreement shall be as valid as an original signature of such party and shall be effective to bind such party to this Agreement. The parties agree that any electronically signed document (including this Agreement) shall be deemed (i) to be "written" or "in writing," (ii) to have been signed and (iii) to constitute a record established and maintained in the ordinary course of business and an original written record when printed from electronic files. Such paper copies or "printouts," if introduced as evidence in any judicial, arbitral, mediation or administrative proceeding, will be admissible as between the parties to the same extent and under the same conditions as other original business records created and maintained in documentary form. Neither party shall contest the admissibility of true and accurate copies of electronically signed documents on the basis of the best evidence rule or as not satisfying the business records exception to the hearsay rule. For purposes hereof, "electronic signature" means a manually -signed original signature that is then transmitted by electronic means; "transmitted by electronic means" means sent in the form of a facsimile or sent via the internet as a "pdf' (portable document format) or other -54- replicating image attached to an e-mail message; and, "electronically signed document" means a document transmitted by electronic means and containing, or to which there is affixed, an electronic signature. Section 8.7. Severability. If any provision of this Agreement shall be held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provisions of any constitution, statute, rule of public policy, or any other reason, such circumstances shall not have the effect of rendering the provision in question invalid, inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions of this Agreement invalid, inoperative or unenforceable to any extent whatever. Section 8.8. Survival of this Agreement. All covenants, agreements, representations and warranties made in this Agreement shall survive the extension by the Bank of the Commitment and shall continue in full force and effect so long as the Commitment shall be unexpired or any sums drawn or due thereunder or any other obligations shall be outstanding and unpaid, regardless of any investigation made by any Person and so long as any amount payable hereunder remains unpaid. The agreement of the City to indemnify the Bank and each Indemnitee under Section 3.2 hereof shall continue in full force and effect notwithstanding a termination of the Commitment or the fulfillment of all Obligations. The obligations of the City under Sections 3.3 and 2.6(d) hereof shall also continue in full force and effect notwithstanding a termination of the Commitment or the fulfillment of all Obligations. Whenever in this Agreement the Bank is referred to, such reference shall be deemed to include the successors and assigns of the Bank and all covenants, promises and agreements by or on behalf of the City which are contained in this Agreement shall inure to the benefit of the successors and assigns of the Bank. Section 8.9. Effectiveness. This Agreement shall become effective upon the execution by the Bank and the acceptance hereof by the City. Section 8.1 D. No Personal Liability. None of the City's governing body members, officers, employees, or agents (including, without limitation, any person executing this Agreement) shall be liable personally for any Obligation or be subject to any personal liability or accountability by reason of the City's issuance of any Note or for the City entering into this Agreement. Section 8.11. USA Patriot Act. The Bank is subject to the Patriot Act and hereby notifies the City that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies the City, which information includes the name and address of the City and other information that will allow the Bank to identify the City in accordance with the Patriot Act. The City shall, promptly following a request by the Bank, provide all documentation and other information that the Bank requests in order to comply with its ongoing obligations under applicable "know your customer" and anti -money laundering rules and regulations, including the Patriot Act. -55- Section 8.12. Notice of Final Agreement. THIS IS THE FINAL EXPRESSION OF THE AGREEMENT BETWEEN THE BANK AND THE CITY AND SUCH WRITTEN AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR ORAL AGREEMENT OR OF A CONTEMPORANEOUS ORAL AGREEMENT BETWEEN THE BANK AND THE CITY. Section 8.13. No Advisory or Fiduciary Relationship. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Program Document), the City acknowledges and agrees, and acknowledges its Affiliates' understanding, that: (a) (i) the services regarding this Agreement provided by the Bank and any Affiliate thereof are arm's-length commercial transactions between the City, on the one hand, and the Bank and its Affiliates, on the other hand, (ii) the City has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) the City is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Program Documents; (b) (i) the Bank and its Affiliates each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary, for the City, or any other Person and (ii) neither the Bank nor any of its Affiliates has any obligation to the City with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Program Documents; and (c) the Bank and its Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the City, and neither the Bank nor any of its Affiliates has any obligation to disclose any of such interests to the City. To the fullest extent permitted by law, the City, hereby waives and releases any claims that it may have against the Bank or any of its Affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transactions contemplated hereby. Section 8.14. Israel Boycott. Pursuant to Section 2270.002, Texas Government Code, the Bank hereby represents that neither it nor or any wholly owned subsidiary, majority -owned subsidiary, parent company or affiliate of the Bank, subject to or as otherwise required or permitted by applicable Federal law, including, without limitation, 50 U.S.C. Section 4607, Boycotts Israel (as defined in Section 2270.002, Texas Government Code) and, subject to or as otherwise required or permitted by applicable Federal law, including, without limitation, 50 U.S.C. Section 4607, the Bank agrees that neither it nor or any wholly owned subsidiary, majority -owned subsidiary, parent company or affiliate of the Bank will Boycott Israel during the term of this Agreement. Section 8.15. Texas Government Code Section 2252.152. The Bank hereby acknowledges to its best knowledge that (a) the Bank does not engage in business with Iran, Sudan or any foreign terrorist organization except to the extent required or otherwise permitted by applicable Federal law and (b) the Bank is not listed by the Texas Comptroller as described in Section 2252.152 of the Texas Government Code. The term "foreign terrorist organization" as used in this Section has the meaning assigned to such term in Section 2251.152 of the Texas Government Code. [Signature Pages Follow] .'l Respectfully submitted, BANK OF AMERICA, N.A. Name: Title: [Signature Page to Note Purchase Agreement] CITY OF LUBBOCK, TEXAS -L-- F� � - DANIEL M. POPE, MAYOR [Signature Page to Note Purchase Agreement] EXHIBIT A [FORM OF REQUEST FOR PURCHASE] Bank of America, N.A., as Bank Telephone: Facsimile: Attention: Email: with a copy to: Bank of America, N.A., as Bank Telephone: Facsimile: Attention: Email: Ladies and Gentlemen: REQUEST FOR PURCHASE as Paying Agent/Registrar Telephone Facsimile: Attention: Email: The undersigned, an Authorized Representative, refers to the Note Purchase Agreement dated June 5, 2019 (together with any amendments or supplements thereto, the "Agreement"), between the City of Lubbock, Texas (the "City") and Bank of America, N.A. (the "Bank") (the terms defined therein being used herein as therein defined) and hereby requests, pursuant to Section 2.3 of the Agreement, that the Bank make a Purchase of Notes under the Agreement, and in that connection sets forth below the following information relating to such Purchase (the "Proposed Purchase "): 1. The Business Day of the Proposed Purchase is , 20_ (the "Purchase Date "), which is at [least three Business Days] [one Business Day] after the date hereof. 2. The principal amount of the Proposed Purchase of a Note is $ , which is not greater than the Available Commitment as of the Purchase Date set forth in 1 above. A-1 3. The City requests that the following existing notes be combined into one Note with principal amount of the Proposed Purchase Note in # 2 above. [Note R - ] [Note R - ] 4 The aggregate amount of the Proposed Purchase shall be used solely for the purposes permitted in the Ordinance and the Agreement. 5. The Note Maturity Date shall be (such date shall not be later than the earlier of (i) the Commitment Expiration Date and (ii) three hundred sixty-four (364) days from the Purchase Date). 6. The interest rate with respect to the Proposed Purchase of a Note shall be [the Fixed Rate] [if Fixed Rate: the Taxable Fixed Rate or the Tax -Exempt Fixed Rate] [the Floating Rate] [if Floating Rate: the Tax -Exempt Floating Rate -LIBOR or the Taxable Floating Rate -LIBOR]. (A) The interest period selected for a Fixed Rate Note is [one], , [three], [six] or [twelve] month LIBOR. If any draw is not on the first business day of the month the note will bear interest at one month up to the first of the month and automatically cover to the interest period selected. (B) At the end of the Interest Period elected by the City in (A) the City desires that the related Fixed Rate Note [automatically convert to a Floating Rate Note (Tax -Exempt Floating Rate -LIBOR or Taxable Floating Rate - LIBOR), until otherwise directed by the City] or [continue as a Fixed Rate Note in the same Interest Period until otherwise directed by the City] or (B) the City desires that the related Note automatically continue as a Floating Rate Note bearing interest at [Floating Rate -LIBOR] until otherwise directed by the City. 7. After giving effect to the Proposed Purchase, the aggregate principal amount of all Notes outstanding under the Agreement will not exceed the Available Commitment. 8. The Paying Agent/Registrar is directed to issue and hold the authenticated Note for the benefit of the Bank, consistent with the instructions herein pursuant to the Ordinance, the Agreement and the Paying Agent/Registrar Agreement. An electronic copy of the authenticated Note will be attached to this Request for Purchase. 9. The City makes the representations set forth in the Ordinance as if set forth in this request. Further, the City certifies that it has identified the specific projects to be financed or refinanced with the Notes contemplated by this request in other documentation of the City and the City has been generally advised by Bond Counsel that projects similar to such projects constitute Project Costs. A-2 The submission of this Request for Purchase constitutes a representation and warranty that the conditions specified in Section 5.2 of the Agreement have been satisfied on and as of the date hereof. A-3 The Proposed Purchase shall be made by the Bank by wire transfer of immediately available funds to the undersigned in accordance with the instructions set forth below: [Insert wire instructions] Very truly yours, FEW Name: Title: EXHIBIT B [FORM OF NOTICE OF CONTINUATION/CONVERSION] NOTICE OF CONTINUATION/CONVERSION Bank of America, N.A., as Bank as Paying Agent/Registrar Telephone: Facsimile: Telephone: Attention: Facsimile: Email: Attention: Email: with a copy to: Bank of America, N.A., as Bank Telephone: Facsimile: Attention: Email: Ladies and Gentlemen: The undersigned, an Authorized Representative, refers to the Note Purchase Agreement dated , 2019 (together with any amendments or supplements thereto, the "Agreement"), between the City of Lubbock, Texas (the "City") and Bank of America, N.A. (the "Bank") (the terms defined therein being used herein as therein defined) and hereby gives the Bank notice irrevocably, pursuant to Section 2.3 [(d)] [(e)] of the Agreement, of the [conversion] [continuation] of the interest rate on the Note(s) specified herein, that: The Business Day of the proposed [conversion] [continuation] is 20_ (the "Conversion•Continuation Date "), which is at least [three Business Days following the date hereof] [one Business Day following the date hereof]. 2. The aggregate amount of the Note(s) to be [converted] [continued] is 3. The Note(s) to be [converted] [continued] is/are [Fixed Rate Note] [Floating Rate Note]. UM 4. The Note(s) is/are to be [converted into] [continued as] [Fixed Rate Note] [Floating Rate Note]. 5. [If applicable:] (i) The duration of the Interest Period for the Note(s) to be [converted into] [continued as] [Fixed Rate Note(s)] shall be [one] [three] [six] months. (ii) The last day of the proposed Interest Period for the Note(s) to be [converted into] [continued as] [Fixed Rate Note(s)] will be , 20_ which is not later than the Commitment Expiration Date. The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the proposed conversion/continuation date, before and after giving effect thereto and to the application of the proceeds therefrom: (a) the representations and warranties of the City set forth in Article IV of the Agreement and in each Program Document are true and correct in all material respects on the date hereof, as if made on the date hereof; and (b) no Default or Event of Default shall have occurred and be continuing as of such date. IN WITNESS WHEREOF, the undersigned has executed and delivered this Notice of Continuation/Conversion as of the day of , CITY OF LUBBOCK, TEXAS Name: Title: I: EXHIBIT C [FORM OF REQUEST FOR EXTENSION] Bank of America, N.A., as Bank Telephone: Facsimile: Attention: Email: with a copy to: Bank of America, N.A., as Bank Telephone: Facsimile: Attention: Email: Ladies and Gentlemen: REQUEST FOR EXTENSION as Paying Agent/Registrar Telephone: Facsimile: Attention: Email: Reference is made to the Note Purchase Agreement dated , 2019 (together with any amendments or supplements thereto, the "Agreement") between the undersigned, the City of Lubbock, Texas (the "City") and Bank of America, N.A. (the "Bank"). All terms defined in the Agreement are used herein as defined therein. The City hereby requests, pursuant to Section 2.10 of the Agreement, that the Commitment Expiration Date with respect to the Available Commitment as of the date hereof be extended by to Pursuant to such Section 2.10, we have enclosed with this request the following information: 1. a reasonably detailed description of any and all Defaults that have occurred and are continuing; 2. confirmation that all representations and warranties of the City as set forth in Article IV of the Agreement and each Program Document are true and correct as though made on the date hereof and that no Default or Event of Default has occurred and is continuing on the date hereof; and C-1 3. any other pertinent information previously requested by the Bank. The Bank is asked to notify the City of its decision with respect to this request within 30 days of the date of receipt hereof. If the Bank fails to notify the City of the Bank's decision within such 30-day period, the Bank shall be deemed to have rejected such request. Very truly yours, CITY OF LUBBOCK, TEXAS Name: Title: C-2 EXHIBIT D [FORM OF NOTICE OF TERMINATION] NOTICE OF TERMINATION as Paying Agent/Registrar Telephone: Facsimile: Attention: Email: Ladies and Gentlemen: We refer to the Note Purchase Agreement dated , 2019 (together with any amendments or supplements thereto, the "Agreement"), between the City of Lubbock, Texas (the "City") and the undersigned, Bank of America, N.A. Any term below that is defined in the Agreement shall have the same meaning when used herein. We hereby notify you that an Event of Default has occurred under Section 7.1 of the Agreement. As a result, unless and until you have been advised otherwise by us: 1. The Available Commitment [has been automatically]/[is hereby] reduced to $0.00 and the Bank has no further obligation to purchase Notes under the Agreement; and 2. The Commitment [has been automatically]/[is] terminated and will no longer be reinstated. IN WITNESS WHEREOF, we have executed and delivered this Notice as of the _____ day of ,20 . Very truly yours, BANK OF AMERICA, N.A. By Name: Title: D-1 EXHIBIT E [FORM OF NOTICE OF TERMINATION OR REDUCTION] NOTICE OF TERMINATION OR REDUCTION [Date] Bank of America, N.A., as Bank Telephone: Facsimile: Attention: Email: with a copy to: Bank of America, N.A., as Bank Telephone: Facsimile: Attention: Email: Ladies and Gentlemen: as Paying Agent/Registrar Telephone: Facsimile: Attention: Email: Re: Note Purchase Agreement dated , 2019 The City of Lubbock, Texas (the "City"), through its undersigned, an Authorized Representative, hereby certifies to Bank of America, N.A. (the "Bank"), with reference to the Note Purchase Agreement dated , 2019 (together with any amendments or supplements thereto, the "Agreement"), between the City and the Bank (the terms defined therein and not otherwise defined herein being used herein as therein defined): [(1) The City hereby informs you that the Commitment is terminated in accordance with the Agreement.] E-1 [(1) The City hereby informs you that the Available Commitment is reduced from [insert amount as of the date of Certificate] to [insert new amount], such reduction to be effective on .] E-2 IN WITNESS WHEREOF, the City has executed and delivered this Notice this day of , CITY OF LUBBOCK, TEXAS Name: Title: E-3 EXHIBIT F [FORM OF NOTICE OF REDUCTION] NOTICE OF REDUCTION as Paying Agent/Registrar Telephone: Facsimile: Attention: Email: Ladies and Gentlemen: [Date] We hereby notify you that pursuant to Section 2.7(a) of the Note Purchase Agreement dated , 2019, between the City of Lubbock, Texas (the "City") and Bank of America, N.A. (the "Bank"), the Available Commitment is reduced from [insert amount as of the date of Certificate] to [insert new amount], such reduction to be effective on F-1 Very truly yours, BANK OF AMERICA, N.A. Name: Title: F-2 EXHIBIT G [FORM OF NOTICE OF EXTENSION] NOTICE OF EXTENSION as Paying Agent/Registrar Telephone: Facsimile: Attention: Email: Ladies and Gentlemen: [Date] We hereby notify you that pursuant to Section 2.10(b) of the Note Purchase Agreement dated , 2019, between the City of Lubbock, Texas (the "City") and the undersigned, Bank of America, N.A. (the "Bank"), the Commitment Expiration Date with respect to the Commitment as of the date hereof shall be extended to . Your acknowledgment hereof shall be deemed to be your representation and warranty that all your representations and warranties contained in Article IV of the Agreement and each other Program Document are true and correct and will be true and correct as of the date hereof and that no Default or Event of Default has occurred and is continuing. G-1 Very truly yours, BANK OF AMERICA, N.A. Name: Title: G-2 Acknowledged as of by CITY OF LUBBOCK, TEXAS an G-3 Name: Title: EXHIBIT H FORM OF INVESTOR LETTER City of Lubbock, Texas Re: Ladies and Gentlemen: This letter is to provide you with certain representations and agreements with respect to our purchase of the above -referenced notes (the "Notes"). The Notes were issued by the City of Lubbock, Texas (the "City") pursuant to City ordinance adopted by the City Council on April 9, 2019 (the "Ordinance"). Bank of America, N.A. (the "Bank, " the "undersigned, " "us" or "we, " as applicable) is purchasing the Notes pursuant a Note Purchase Agreement dated , 2019, between the City and the Bank. We hereby represent and warrant to you and agree with you as follows: 1. We understand that the Notes have not been registered pursuant to the Securities Act of 1933, as amended (the "1933 Act"), the securities laws of any state nor has the Ordinance been qualified pursuant to the Trust Indenture Act of 1939, as amended, in reliance upon certain exemptions set forth therein. We acknowledge that the Notes (i) are not being registered or otherwise qualified for sale under the "blue sky" laws and regulations of any state and (ii) will not be listed on any securities exchange. 2. We have not offered, offered to sell, offered for sale or sold any of the Notes by means of any form of general solicitation or general advertising, and we are not an underwriter of the Notes within the meaning of Section 2(11) of the 1933 Act. 3. We have sufficient knowledge and experience in financial and business matters, including purchase and ownership of municipal and other tax-exempt obligations, to be able to evaluate the risks and merits of the investment represented by the purchase of the Notes. 4. The Bank is either a "qualified institutional buyer" as defined in Rule 144A promulgated under the 1933 Act, or an "accredited investor" as defined in Rule 501 of Regulation D under the 1933 Act and is able to bear the economic risks of such investment. 5. The Bank understands that no official statement, prospectus, offering circular, or other comprehensive offering statement is being provided with respect to the Notes. The Bank has made its own inquiry and analysis with respect to the City, the Notes and the security therefor, and other material factors affecting the security for and payment of the Notes. 6. The Bank acknowledges that it has either been supplied with or been given access to information, including financial statements and other financial information, regarding the City, to which a reasonable investor would attach significance in making investment decisions, and has had the opportunity to ask questions and receive answers from knowledgeable individuals concerning the City, the Notes and the security therefor, so that as a reasonable investor, it has been able to make its decision to purchase the Notes. 7. The Notes are being acquired by the Bank for investment for its own account and not with a present view toward resale or distribution; provided, however, that the Bank reserves the right to sell, transfer or redistribute the Notes, but agrees that any such sale, transfer or distribution by the Bank shall be to a Person: (a) that is an affiliate of the Bank; (b) that is a trust or other custodial arrangement established by the Bank or one of its affiliates, the owners of any beneficial interest in which are limited to qualified institutional buyers or accredited investors; (c) that is a secured party, custodian or other entity in connection with a pledge by the Bank to secure public deposits or other obligations of the Bank or one of its affiliates to state or local governmental entities; or (d) that the Bank reasonably believes to be a qualified institutional buyer or accredited investor and who executes an investor letter substantially in the form of this letter which is delivered to the City (as an addressee). H-2 Very truly yours, BANK OF AMERICA, N.A. Name: Title: [Signature Page to Investor Letter] EXHIBIT I FORM OF COMPLIANCE CERTIFICATE Financial Statement Date: , To: Bank of America, N.A., Ladies and Gentlemen: Reference is made to that certain Note Purchase Agreement dated as of , 20 (the "Agreement"), between the City of Lubbock, Texas (the "City") and Bank of America, N.A. (the "Purchaser "). Unless otherwise defined herein, the terms used in this Certificate shall have the meanings assigned thereto in the Agreement. The undersigned Authorized Representative hereby certifies as of the date hereof that he/she is the of the City, and that, as such, he/she is authorized to execute and deliver this Certificate to the Bank on the behalf of the City, and that: [Use following paragraph 1 for fiscal year-end financial statements] 1. Attached hereto as Schedule 1 are the year-end audited financial statements required by Section 6.1(a)(i) of the Agreement for the fiscal year of the City ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section. [Use following paragraph I for fiscal quarter -end financial statements] 1. Attached hereto as Schedule 1 are the quarter -end unaudited financial statements required by Section 6.1(a)(ii) of the Agreement for the fiscal quarter of the City ended as of the above date, which includes the balance sheet as of the end of the quarter and a statement of income and expenses. 2. The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a review of the transactions and condition (financial or otherwise) of the City during the accounting period covered by the attached financial statements. 3. A review of the activities of the City during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the City performed and observed all its Obligations under the Program Documents, and [select one:] [to the best knowledge of the undersigned during such fiscal period, the City performed and observed each covenant and condition of the Program Documents applicable to it, and no Default or Event of Default has occurred and is continuing.] --or-- [the following covenants or conditions have not been performed or observed and the following is a list of each such Default or Event of Default and its nature and status:] 4. The representations and warranties of the City contained in Article IV of the Agreement are true and correct on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that for purposes of this Certificate, the representations and warranties contained in Section 4.1(f) of the Agreement shall be deemed to refer to the most recent statements furnished pursuant to Section 6.1 of the Agreement, including the statements in connection with which this Certificate is delivered. Delivery of an executed counterpart of a signature page of this Certificate by fax transmission or other electronic mail transmission (e.g. "pdf' or "tif') shall be effective as delivery of a manually executed counterpart of this Certificate. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of CITY OF LUBBOCK, TEXAS By: Name: Title: [Signature Page to Compliance Certificate] AFFP ORDINANCE NO. 2019-00040 AN OR Affidavit of Publication STATE OF TEXAS) SS ORDINANCE NO.2019-00040 COUNTY OF LUBBOCK) AN ORDINANCE AMENDING THE FY 2018-19 BUDGET FOR MUNICIPAL PURPOSES RESPECTING THE GRANT FUND TO ACCEPT AND APPROPRIATE FUNDING FROM THE FEDERAL TRANSIT ADMINISTRATION FOR THE SECTION 5339 GRANT; PROVIDING FOR FILING; AND PROVIDING FOR A SAVINGS CLAUSE. Robin Morse, being duly sworn, says: That she is Advertising Sales Manager of the Lubbock Avalanche -Journal, a daily newspaper of general circulation, printed and published in Lubbock, Lubbock County, Texas; that the publication, a copy of which is attached hereto, was published in the said newspaper on April 26, 2019 That said newspaper was regularly issued and circulated on those dates. SIGNED: Adv&rtising SIB Mak ager ORDINANCE NO.2019-00041 AN ORDINANCE AMENDING ZONING ORDINANCE NO. 7084 AND THE OFFICIAL MAP OF THE CITY OF LUBBOCK MAKING THE FOLLOWING CHANGES: ZONE CASE NO. 2995-AA; A ZONING CHANGE TO C-3 FROM R-1 SPECIFIC USE FOR REDUCED SETBACKS ZONING DISTRICT AT 7103 MILWAUKEE AVENUE, SOUTHEAST OF THE INTERSECTION OF 70TH STREET AND MILWAUKEE AVENUE, ON 9.932 ACRES OF UNPLATTED LAND OUT OF BLOCK AK, SECTION 29, AB 244 TRACT A, LUBBOCK, TEXAS; PROVIDING A PENALTY; PROVIDING A SAVINGS CLAUSE; AND, PROVIDING FOR PUBLICATION. SECTION 2. THAT VIOLATION OF ANY PROVISION OF THIS ORDINANCE SHALL BE DEEMED A.MIRr1FKAF:AKIno n, tIO- • �-• - 'TO EXCEED ORDINANCE NO. 2019-00046 D AN ORDINANCE ESTABLISHING AN ELECTRIC LIGHT AND POWER SYSTEM IN REVENUE REVOLVING NOTE PROGRAM AND AUTHORIZING THE ISSUANCE •,F LUBBOCK. OF PROGRAM OBLIGATIONS, FROM TIME TO TIME, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $300,000,000 OUTSTANDING AT ANY ONE TIME, PRESCRIBING THE TERMS, FEATURES AND CHARACTERISTICS OF SUCH OB IGATIONS; APPROVING AND AUTHORIZING CERTAIN AUTHOR- IZED OFFICERS AND EMPLOYEES OF THE CITY TO ACT ON BEHALF OF THE THE CITY IN THE SALE AND DELIVERY OF SUCH OBLIGATIONS, WITHIN THE 'ING LMITATIONS SPECIFIED HEREIN; MAKING CERTAIN COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; PROVIDING FOR THE PAY- FROM C-2 MENT OF THE OBLIGATIONS; RESOLVING OTHER MATTERS RELATED THERETO, INCLUDING APPROVAL OF A NOTE PURCHASE AGREEMENT H STREET, AND A PAYING AGENT/REGISTRAR AGREEMENT; AND PROVIDING AN EF- MILWAUKEE ,gUIVE DATE Z'1'CRES OF TRACT A, HALLE ADDITION AND THE SOUTH 100 FEET OF TRACT A, DOUBLE J ADDITION, LUBBOCK, TEXAS; PROVIDING A PENALTY; PROVIDING A SAVINGS CLAUSE; AND, PROVIDING FOR PUBLICATION. Subscribed to and sworn to me this 26th day of April 2019. SECTION 2. THAT VIOLATION OF ANY PROVISION OF THIS ORDINANCE SHALL BE DEEMED A MISDEMEANOR PUNISHABLE BY FINE NOT TO EXCEEC TWO THOUSAND AND NO/100 DOLLARS ($2,000.00) AS PROVIDED IN SECTION 40.01.006 OF THE ZONING ORDINANCE OF THE CITY OF LUBBOCK. ORDINANCE NO.2019-00043 AN ORDINANCE AMENDING ZONING ORDINANCE NO. 7084 AND THE OFFICIAL MAP OF THE CITY OF LUBBOCK MAKING THE FOLLOWING Cindy Mc aha, Notary Public, Lubbock County, Texas CHANGES: ZONE CASE NO.3310-A; A ZONING CHANGE TO R-1A FROM R-1 SPECIFIC USE FOR GARDEN HOMES ZONING DISTRICT AT 13801-13808 My commission expires: January 07, 2023 SALEM AVENUE, APPROXIMATELY 1400 FEET WEST OF THE INTERSECTION �„_ F 139TH STREET AND QUAKER AVENUE, STRATFORD POINTE ADDITION, FF_ —"�TS 38-45.LUBBOCK, TEXAS; PROVIDING A PENALTY; PROVIDING A Cindy McN E PVINGS CLAUSE; AND, PROVIDING FOR PUBLICATION. MY COMMISSION EXPIRES01107/2023CTION 2. THAT VIOLATION OF ANY PROVISION OF THIS ORDINANCE 00000412 16048587M„Np7ARY ID: 1070316-1 ALL BE DEEMED A MISDEMEANOR PUNISHABLE BY FINE NOT TO EXCEEC O THOUSAND AND NO/100 DOLLARS ($2,000.00) AS PROVIDED IN CITY OF LUBBOCK -LEGAL ADS SECTION 40.01.006 OF THE ZONING ORDINANCE OF THE CITY OF LUBBOCK. PO BOX 2000 LUBBOCK, TX 79457 ORDINANCE NO.2019-00044 AN ORDINANCE AMENDING ARTICLE 22.08 OF THE CODE OF ORDINANCES, CITY OF LUBBOCK, TEXAS, WITH REGARD TO THE CITY OF LUBBOCK WATER CONSERVATION PLAN; THE CITY OF LUBBOCK DROUGHT AND EMERGENCY CONTINGENCY PLAN; THE CITY OF LUBBOCK IRRIGATION WATER CONSERVATION PLAN; PROVIDING FOR TARGET GOALS; ESTABLISHING CRITERIA FOR THE DROUGHT RESPONSE STAGES; ESTABLISHING RESTRICTIONS ON CERTAIN WATER USES RELATED TO DROUGHT OR SHORTAGES; PROVIDING A PENALTY FOR EACH DAY OF