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HomeMy WebLinkAboutResolution - 2024-R0474 - General Obligation Refunding Bonds, Series 2019A - 10/08/2024MINUTES 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 Resolution is hereby certified to be a true and correct copy of an official copy thereof on f le among the official records of the City, all on this the 8th day of October, 2024. C S retary City of Lubbock, Texas [SEAL] Signature Page Certificate for Resolution Authorizing Defeasance and Redemption of General Obligation Bonds, Series 2019A 4151-7643-4259.1 R�SOLUTION AUTHORIZING THE DEFEASANCE AND REDEMPTION OF CERTAIN OF THE CITY'S OUTSTANDING BONDS; AUTHORIZING THE EXECUTION OF AN ESCROW AGREEMENT; AND RESOLVING OTHER MATTERS INCIDENT AND RELATED THERETO WHEREAS, pursuant to an ordinance passed and adopted by the City Council of the City of Lubbock, Texas (the "City Council") on September 24, 2019 (the "Ordinance"), the City of Lubbock, Texas (the "City) has heretofore issued certain bonds more particularly described as "City of Lubbock, Texas General Obligation Refunding Bonds, Taxable Series 2019A" dated October 15, 2019 (the "Series 2019A Bonds") currently outstanding in the aggregate principal amount of $32,475,000; and WHEREAS, the City wishes to defease a portion of the Series 2019A Bonds, and to redeemed a portion of such Series 2019A Bonds that are subject to redemption at the option of the City prior to the date of their scheduled maturity; and W��EREAS, in accordance with the provisions of Texas Government Code, Chapter 1207, as amended, the City is authorized and empowered to deposit funds directly with the place of payment for its outstanding bonds, or other authorized depository, and enter into an escrow or similar agreement for the safekeeping, investment, reinvestment, administration, and disbursement of such deposit of funds, and such deposit, when made in accordance with said statute, shall constitute the making of firm banking and financial arrangements for the discharge and full payment of its outstanding bonds; and WHEREAS, City Council hereby finds and determines that an agreement for the payment and defeasance of a portion of the Series 2019A Bonds should be approved and authorization for its execution provided; and W�3EREAS, the City Council further finds and determines that a portion of the Series 2019A Bonds should be redeemed prior to their stated maturity and notice of such redemption should be given, as hereinafter provided and in accordance with the requirements prescribed therefor in the Ordinance; NOW, THEREFORE, BE IT RESOLVED AND OR�ERED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK, TEXAS: Section 1. (a) A portion of the Series 2019A Bonds, maturing on the dates and in the principal amounts set forth in Exhibit A hereto (the "Defeased Bonds"), shall be defeased and a portion of such Defeased Bonds, maturing on the dates and in the principal amounts set forth in Exhibit A hereto (the "Redeemed Bonds"), shall be called for redemption prior to their scheduled maturity dates, such redemption to occur on the dates set forth in Exhibit A hereto (the "Redemption Dates"). The City Council's election to exercise the City's right to defease and redeem a portion of the Series 2019A Bonds and direction to provide 4142-4754-84973 notice of defeasance and redemption of such bonds shall be irrevocable upon the City's transfer of lawfully available funds pursuant to subsection (b) of this section. (b) To effectuate the defeasance of the Defeased Bonds and redemption of the Redeemed Bonds, at the direction of the Mayor, City Manager, or Chief Financial Officer (each an "Authorized Representative"), the City shall transfer lawfully available funds in the amount sufficient to discharge the Defeased Bonds and the Redeemed Bonds (such amount referred to herein as the "Defeasance Deposit") to 80KF, NA, Dallas, Texas, as the escrow agent for the Defeased Bonds (the "Escrow Agent"). (c) Notice of defeasance of the Defeased Bonds and redemption of the Redeemed Bonds shall be provided in accordance with the Ordinance. Section 2. The Escrow Agreement (the "Escrow Agreement"), by and between the City and the Escrow Agent, in substantially the form attached hereto as Exhibit B, is hereby approved as to form and content, and such Escrow Agreement, together with such changes or revisions as may be deemed by an Authorized Representative to be necessary to accomplish the defeasance of the Defeased Bonds, is hereby authorized to be executed and delivered by an Authorized Representative, for and on behalf of the City and as the act and deed of this City Council. Furthermore, upon delivery to the Escrow Agent of the Defeasance Deposit described in Section 1 of this Resolution, each Authorized Representative, the City's Financial Advisor, and Bond Counsel, in cooperation with the Escrow Agent, are hereby authorized and directed to make the necessary arrangements for the deposit of cash and/or the purchase of any securities referenced in the Escrow Agreement to the credit of the special escrow fund established and maintained by the Escrow Agent for such purpose (the "Escrow Fund"), including the execution of subscription forms or agreements, if any, for the purchase of eligible securities for investment of amounts deposited to the Escrow Fund; all as contemplated and provided by the provisions of Chapter 1207, Texas Government Code, as amended, this Resolution, and the Escrow Agreement. Section 3. An Authorized Representative is authorized and directed to instruct the paying agendregistrar for the Defeased Bonds to provide notice of the defeasance of the Defeased Bonds and (in the case of the Redeemed Bonds) notice of defeasance and redemption of the Redeemed Bonds, as provided and required by the Ordinance. Section 4. An Authorized Representative is authorized to engage a recognized firm of certified or independent public accountants or other qualified finance professionals (the "Verification Agent") to verify the sufficiency of the Defeasance Deposit to accomplish the defeasance of the Defeased Bonds, to the extent that an Authorized Representative deems such appointment necessary or appropriate; provided, however, that in the event of a gross defeasance of the Defeased Bonds, the sufficiency of the Defeasance Deposit to accomplish such defeasance may be certified to the City by the City's Financial Advisor or another qualified financial institution in lieu of verification by a Verification Agent. Section 5. Each Authorized Representative is hereby authorized and directed to finalize, execute and deliver such agreements, certificates, notices, letters, and other instruments � 4142-4754-8497.3 as any such official shall deem necessary, appropriate, or convenient to effect the defeasance and redemption described herein and otherwise give effect to the intent and purpose hereof. Section 6. The City Council hereby approves payment from its lawfully available funds of professional fees and expenses of the City's Financial Advisor and Bond Counsel, the Escrow Agent, the Verification Agent, and the paying agent/registrar for the Defeased Bonds, respectively, and any other party whose services have been determined by an Authorized Representative to be necessary or appropriate to accomplish the purpose and intent of this Resolution. Section 7. The recitals contained in the preamble hereof are hereby found to be true, and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a part of the judgment and findings of the City Council. Section 8. This Resolution shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. Section 9. If any provision of this Resolution or the application thereof to any person or circumstance shall be held to be invalid, the remainder of this Resolution and the application of such provision to other persons and circumstances shall nevertheless be valid, and the City Council hereby declares that this Resolution would have been enacted without such invalid provision. Section 10. It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by Chapter 551, as amended, Texas Government Code. Section 11. This Resolution shall be in force and effect from and after its final passage, and it is so resolved. [Signature page follows.J 3 4142-4754-8497 3 ADOPTED THIS 8'h day of October 2024, by the City Council of the City of Lubbock, Texas. AT EST: � � ARK MCBRAYER, Mayor COURTNEY PAZ, City Secretary [SEAL] APPROVED AS TO CONTENT: By: 1 ���l.�C:� CHERYL B OCK, Interim Chief Financial Officer : � � : �lil�f�7:�.�IC�l�Li7:7�a r- By. JERRY V. E, JR., Bond Counsel Exhibit A— Schedule of Defeased Bonds and Redeemed Bonds Exhibit B— Form of Escrow Agreement [Signature Page to Resolution] �r�r�r�i�:ics�3 EXHIBIT A Schedule of Defeased Bonds and Redeemed Bonds City of Lubbock, Texas General Obligation Refunding Bonds, Taxable Series 2019A CUSIP No. 549188S76 549188584 549188592 549188T26 549188T34 549188T42 549188T59 Original Maturity (February 15) 2026 2027 2028 2029 2030 2031 2032 Principal Amount Outstandin� $4,110,000 4,200,000 4,295,000 4,390,000 4,490,000 4,605,000 2,360,000 Amount Defeased $70,000 70,000 70,000 75,000 75,000 75,000 80,000 Exhibit B-1 Amount Remaining Outstandin� $4,040,000 4,130,000 4,225,000 4,315,000 4,415,000 4,530,000 2,280,000 Redemption Date and Redemption Price for Redeemed Bonds N/A N/A N/A N/A 2/ 15/2029 @ Par 2/ 15/2029 @ Par 2/ 15/2029 @ Par 4142-4754-8497.3 EXHIBIT B FORM OF ESCROW AGREEMENT Exhibit B-1 4142-4754-8497.3 ESCROW AGREEMENT THIS ESCROW AGREEMENT (this "Escrow Agreement"), dated for convenience as of October 8, 2024, but effective on the Escrow Funding Date described herein, is made and entered into by and between the City of Lubbock, Texas, a home rule municipality duly created, organized, and existing under the Constitution and laws of the State of Texas (the "City"), and BOKF, NA, Dallas, Texas, as escrow agent (together with any successor or assign in such capacity, the "Escrow Agent"). WHEREAS, the City has heretofore issued certain bonds (hereinafter defined as the `'Obligations") and the governing body of the City has determined that it desires to defease and redeem a portion of the Obligations in advance of their stated maturities; WHEREAS, the governing body of the City has adopted a resolution (the "Defeasance Resolution") authorizing the defeasance and redemption of certain of the Obligations identified herein in Exhibit C(the "Defeased Obligations"); WHEkF:AS, to provide for the payment of the Defeased Obligations, the City has provided for the transfer to the Escrow Agent pursuant to this Escrow Agreement of lawfully available funds for such purpose (the "Escrow Deposit"); and WHEIZI:AS, the governing body of the City has further determined to effectuate the defeasance of the Defeased Obligations pursuant to this Escrow Agreement, under which provision is made for the safekeeping, investment, reinvestment, administration, and disposition of the Escrow Deposit so as to provide firm banking and financial arrangements for the discharge and final payment of the Defeased Obligations pursuant to Sections 1207.033 and 1207.062, Texas Government Code; NOW, THER�;FORE, in consideration of the mutual undertakings, promises, and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, and in Resolution to secure the full and timely payment of the principal of and interest on the Defeased Obligations, the City and the Escrow Agent contract and agree as follows: ARTICLE I DEFINITIONS AND INTERP[tI:TATIONS Section l.l Definitions. Unless otherwise expressly provided or unless the context clearly requires otherwise, the following terms shall have the respective meanings specified below for all purposes of this Escrow Agreement: • "City Council" shall mean the City Council of the City. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the applicable regulations thereunder and under the Internal Revenue Code of 1954. 4155-2199-7139.2 "Defeasance Resolution" shall mean the City's resolution adopted by the City Council on October 7, 2024, authorizing the defeasance and redemption of the Defeased Obligations. "Defeasance Securities" means (a) Government Obligations, (b) noncallable obligations of an agency or instrumentality of the United States, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date of the purchase thereof, are rated as to investment quality by a nationally recognized investment rating firm not less than "AAA" or its equivalent, and (c) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that, on the date of the purchase thereof, are rated as to investment �quality by a nationally recognized investment rating firm not less than "AAA" or its equivalent. "Defeased Obligations" shall mean the outstanding bonds of the City shown on Exhibit C hereto. "City" shall mean the City of Lubbock, Texas. "Escrow Agent" shall mean BOKF, NA, Dallas, Texas, in its capacity as escrow agent hereunder, and any successor or assign in such capacity. "Escrow Agreement" shall mean this escrow agreement. "Escrow Deposit" shall mean the initial deposit into the Escrow Fund, as more particularly described in Section 2.1. "Escrow Funding Date" shall mean the date on which the City deposits with the Escrow Agent the Escrow Deposit described in Section 2.1. "Escrow Fund" shall mean the fund created in Section 3.1 of this Escrow Agreement to be administered by the Escrow Agent pursuant to the provisions of this Cscrow Agreement. "Escrowed Securities" shall mean the Limited Yield Securities and the Open Market Securities. "Government Obligations" means direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America. "Limited Yield Securities" shall mean the non-callable United States Treasury Obligations- State and Local Government Series to be initially purchased with proceeds of the Escrow Deposit, as more fully described in the Report, together with all reinvestments of the proceeds thereof as may be directed in Section 4.2 or permitted in Section 4.3(b). "Obligations" shall mean the City of Lubbock, Texas General Obligation Refunding Bonds, Taxable Series 2019A. "Open Market Securities" shall mean Defeasance Securities, if any, to be purchased in the open market with cash and the proceeds of the Escrow Deposit, as more fully described in the 2 4155-2199-7139.2 Report, together with all reinvestments of the proceeds thereof as may be directed in Section 4.2 or permitted in Section 4.3(b), or cash or obligations substituted therefor pursuant to Section 4.3(a). "Original Ordinance" shall mean the City's ordinance authorizing the issuance, sale, and delivery of the Obligations. "Paying Agent for the Defeased Obligations" shall mean U.S. Bank Trust Company, National Association. "Report" shall mean the verification report prepared by the Verification Agent relating to the defeasance of the Defeased Obligations, a copy of which is attached hereto as Exhibit B, and any subsequent verification report required by Section 4.3. "Verification Agent" shall mean the recognized firm of certified public accountants appointed pursuant to the Defeasance Resolution. Section 1.2 Interpretations. The titles and headings of the articles and sections of this Escrow Agreement have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict the terms hereo£ This Escrow Agreement and all of the terms and provisions hereof shall be liberally construed to effectuate the puiposes set forth herein and to achieve the intended purpose of providing for the defeasance and redemption of the Defeased Obligations in accordance with applicable law. Capitalized terms used herein and not otherwise defined shall have the meaning assigned in the Defeasance Resolution. ARTICLE II DEPOSITS OF FUNDS AND ESCROWED SECURITIES AND PROVISION OF NOTICE TO BOND HOLDERS Section 2.1 Deposits to Escrow Fund. On the Escrow Funding Date, the City shall deposit, or cause to be deposited, with the Escrow Agent, for deposit in the Escrow Fund, the funds and Escrowed Securities described in the Report, and the Escrow Agent shall, upon the receipt thereof, acknowledge such receipt to the Issuer in writing. Section 2.2 Provision of Notice to Bond Holders. Not later than 10 business days following the Escrow Funding Date, the Escrow Agent shall provide or cause to be provided notice to the holders of the Defeased Obligations in accordance with the Original Ordinance and in substantially the form provided in Exhibit D hereto. 4155-2199-7139 2 ARTTCLE III CREATION AND OPERATION OF ESCROW FUND Section 3.1 Escrow Fund. On the Escrow Funding Date the Escrow Agent will create in its books a special fund and irrevocable escrow to be k��own as (a) "City of Lubbock, Texas General Obligation Refunding Bonds, Taxable Series 2019A — 2025 Defeasance" (the "Escrow Fund"). On the Escrow Funding Date, the Escrow Deposit described in Section 2.1 will be deposited to the credit of the Escrow Fund. The Escrow Deposit and all proceeds therefi•om shall be the property of the Escrow Fund and shall be applied only in strict conformity with the terms and conditions hereof. All Escrowed Securities, all proceeds therefrom and all cash balances fi•om time to time on deposit in the Escrow Fund are hereby irrevocably pledged to the payment of the principal of, redemption premium, if any, and interest on the Defeased Obligations, which payment shall be made by timely transfers to the Paying Agent for the Defeased Obligations of such amounts at such times as are provided in Section 3.2. When the final transfers have been made to the Paying Agent for the Defeased Obligations for the payment of such principal of, redemption premium, if any, and interest on the Defeased Obligations, any balance then remaining in the Escrow Fund shall be transferred to the City, and the Escrow Agent shall thereupon be discharged from any further duties hereunder. Section 3.2 Pavment of Principal, Redemption Premium, if anv, and Interest; Redemption of Certain Obli atg ions. . (a) The Escrow Agent is hereby irrevocably instructed to transfer to the Paying Agent for the Defeased Obligations from the cash balance from time to time on deposit in the Escrow Fund the amounts required to pay the principal of, redemption premium, if any, and interest on the Defeased Obligations in the amounts and at the times shown in the Report. • (b) Except for amounts transferred to the Paying Agent for the Defeased Obligations pursuant to Section 3.2(a) and to the City pursuant to Section 3.1 and Section 4.2, the Escrow Agent agrees that it shall never make any withdrawals from the Escrow Fund or assert any claims, liens, or charges against the Escrow Fund. Section 3.3 Sufficiency of Escrow Fund. The City represents (based upon the Report) that the successive receipts of the principal of and interest on the Escrowed Securities will assure that the cash balance on deposit from time to time in the Escrow Fund will be at all times sufficient to provide money for transfer to the Paying Agent for the Defeased Obligations at the times and in the amounts required to pay the interest on the Defeased Obligations as such interest comes due and to pay the principal of, redemption premium, if any, and interest on the Defeased Obligations as the Defeased Obligations mature or are called for redemption, all as more fully set forth in the Report. If, for any reason, at any time, the cash balances on deposit or scheduled to be on deposit in the Escrow Fund shall be insuff cient to transfer the amounts required by the Paying Agent for the Defeased Obligations to make the payments set forth in Section 3.2, the City shall timely deposit into the Escrow Fund, from lawfiilly 4 4155-2199-71392 available funds, additional funds in the amounts required to make such payments. Notice of any such insufficiency shall be given promptly by the Escrow Agent to the City as hereinafter provided, but the Escrow Agent shall not in any manner be responsible for any insufficiency of funds in the Escrow Fund or the City's failure to make additional deposits thereto. Section 3.4 Trust Fund. The Escrow Agent at all times shall hold the Escrow Fund, the Escrowed Securities, and all other assets of the Escrow Fund wholly segregated from all other funds and securities on deposit with the Escrow Agent; it shall never allow the Escrowed Securities or any other assets of the Escrow Fund to be commingled with any other fitnds or securities of the Escrow Agent; and it shall hold and dispose of the assets of the Escrow Fund only as set forth herein. The Escrowed Securities and other assets of the Escrow Fund always shall be maintained by the Escrow Agent for the benefit of the holders of the Defeased Obligations; and a special account evidencing such fact shall be maintained at all times on the books of the Escrow Agent. The holders of the Defeased Obligations shall be entitled to the same preferred claim and first lien upon the Escrowed Securities, the proceeds thereof, and all other assets of the Escrow Fund to which they are entitled as holders of the Defeased Obligations. The amounts received by the Escrow Agent under this Escrow Agreement shall not be considered as a banking deposit by the City, and the Escrow Agent shall have no right or title with respect thereto except as escrow agent under the terms hereof. The amounts received by the Escrow Agent hereunder shall not be subject to warrants, drafts, or checks drawn by the City or, except to the extent expressly herein provided, by the Paying Agent for the Defeased Obligations. Section 3.5 Security for Cash Balances. Cash balances from time to time on deposit in the Escrow Fund, to the extent not insured by the Federal Deposit Insurance Corporation or its successor, shall be collateralized with securities or obligations that are eligible under the laws of the State of Texas to secure and be pledged as collateral for trust accounts until the principal of and interest on the Defeased Obligations have been presented for payment and paid to the owners thereof. ARTICLE IV LIMITATION ON INVESTMENTS Section 4.1 General. Except as herein otherwise expressly provided, the Escrow Agent shall not have any power or duty to invest any money held hereunder, to make substitutions of the Escrowed Securities or to sell, transfer, or otherwise dispose of the Escrowed Securities. Section 4.2 Reinvestment of Proceeds of Escrowed Securities. Upon receipt of written instructions from the City, the Escrow Agent is hereby authorized to reinvest proceeds of the Escrowed Securities which are attributable to amounts received as principal of or interest on the Escrowed Securities and which are not immediately needed to pay the Defeased Obligations in Government Obligations selected by the City, in the amounts, and 5 4155-2199-7139.2 maturing and bearing interest, all as set out in the Report. The City hereby designates and appoints the Escrow Agent as its agent and duly authorized representative for purposes of subscribing for and purchasing such obligations, all of which shall constitute Escrowed Securities. Any income or increment earned from such reinvestment remaining after final payment of the Defeased Obligations shall be promptly transferred to the City as described in Seetion 3.1. Section 4.3 Substitution of Securities. (a) Concurrently with the delivery of the Escrow Deposit, the City may, upon compliance with the conditions stated in subsection (c) of this Section 4.3, at its option, substitute cash or non-interest bearing obligations of the United States Treasury (i.e., Treasury obligations which mature and are payable in a stated amount on the maturity date thereof and for which there are no payments other than the payment made on the maturity date) for non-interest bearing Open Market Securities listed in the Report, but only if such cash and/or substituted non-interest bearing direct obligations of the United States Treasury: (i) are in an amount, and/or mature in an amount, which, together with any cash substituted for such obligations, is equal to or greater than the amount payable on the maturity date of the obligation listed in the Report which such obligation is substituted, and (ii) mature on or before the maturity date of the obligation listed in the Report for which such obligation is substituted. The City may at any time substitute any Open Market Securities which, as permitted by the preceding sentence, were not deposited to the credit of the Escrow Fund, for the cash and/or obligations that were substituted concurrently with the delivery of the Escrow Deposit for such Open Market Securities. (b) At the written request of the City, and upon compliance with the conditions hereinafter stated in subsection (c) of this Section 4.3, the �scrow Agent shall sell, transfer, otherwise dispose of or request the redemption of all or any portion of the Escrowed Securities and apply the proceeds therefrom to purchase Defeased Obligations or direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America which do not permit the redemption thereof at� the option of the obligor. (c) Any such transaction described in subsections (a) and (b) of this Section 4.3 may be affected by the Escrow Agent only if (1) the Escrow Agent shall have received a written opinion from a recognized firm of certified public accountants that such transaction will not cause the amount of money and securities in the Escrow Fund to be reduced below an amount which will be suffcient, when added to the interest to accrue thereon, to provide for the payment of principal of, redemption premium, if any, and interest on the remaining Defeased Obligations as they become due, and (2) the Escrow Agent shall have received the unqualified written legal opinion of nationally recognized bond counsel or tax counsel acceptable to the City and the 0 4155-2199-7139 2 Escrow Agent to the effect that (a) such transaction will not cause any of the Defeased Obligations to be an "arbitrage bond" within the meaning of the Code and (b) that such transaction complies with the Constitution and laws of the State of Texas and with all relevant documents relating to the issuance of the Defeased Obligations. Section 4.4 Arbitra�e. The City hereby covenants and agrees that it shall never request the Escrow Agent to exercise any power hereunder or permit any part of the money in the Escrow Fund or proceeds from the sale of Escrowed Securities to be used directly or indirectly to acquire any securities or obligations if the exercise of such power or the acquisition of such securities or obligations would cause any Defeased Obligation to be an "arbitrage bond" within the meaning of the Code. ARTICLE V f�ECORDS AND RF?PORTS Section 5.1 Records. The Escrow Agent shall keep books of record and account in which complete and correct entries shall be made of all transactions relating to the receipt, disbursement, allocation, and application of the money and Escrowed Securities deposited to the Escrow Fund and all proceeds thereof, and such books shall be available for inspection at reasonable hours and under reasonable conditions by the City and the holders of the Defeased Obligations. Section 5.2 Reports. For the period beginning on the Escrow Funding Date and ending on December 31, 2025, and for each twelve (12) month period thereafter while this Agreement remains in effect, the Escrow Agent shall prepare and send to the City within thirty (30) days following the end of such period a written report summarizing all transactions relating to the Escrow Fund during such period, including, without limitation, credits to the Escrow Fund as a result of interest payments on or maturities of the Escrowed Securities and transfers fi•om the Escrow Fund to the Paying Agent for the Defeased Obligations or otherwis�e, together with a detailed statement of all Escrowed Securities and the cash balances on deposit in the Escrow Fund as of the end of such period. ARTICLE VI CONCERNING THE ESCROW AGENT Section 6.1 Representations of Escrow A e�nt. BOK�=, NA, Dallas, Texas, hereby represents that it is (a) either (i) a Paying Agent for the Defeased Obligations or (ii) a trust company or cornmercial bank that does not act as a depository for the City, and (b) that it has all necessaiy power and authority to enter into this Escrow 7 4155-2199-7139.2 Agreement and undertake the obligations and responsibilities imposed upon it herein and that it will carry out all of its obligations hereunder. Section 6.2 Limitation on Liabilitv. The liability of the Escrow Agent to transf�r funds to the Paying Agent for the Defeased Obligations for the payments of the principal of, redemption premium, if any, and interest on the Defeased Obligations shall be limited to the proceeds of the Escrowed Securities and the cash balances from time to time on deposit in the Escrow Fund. Notwithstanding any provision contained herein to the contrary, the Escrow Agent shall have no liability whatsoever for the insufficiency of funds from time to time in the Escrow Fund or any failure of the obligor of the Escrowed Securities to make timely payment thereon, except for its obligation to notify the City promptly of any such occurrence upon the Escrow Agent having actual knowledge of such occurrence. The recitals herein and in the Defeasance Resolution shall be taken as the statements of the City and shall not be considered as made by, or i�mposing any obligation or liability upon, the Escrow Agent. The Escrow Agent is not a party to the Defeasance Resolution or the Original Ordinance and in its capacity as Escrow Agent is not responsible for or bound by any of the provisions thereo£ In its capacity as Escrow Agent, it is agreed that the Escrow Agent need look only to the terms and provisions of this Escrow Agreement. The Escrow Agent makes no representation�as to the value, condition, or sufficiency of the Escrow Fund, or any part thereof, or as to the title of the City thereto, or as to the security afforded thereby or hereby, and the Escrow Agent shall incur no liability or responsibility with respect to any of such matters. It is the intention of the City and the Escrow Agent that the Escrow Agent shall never be required to risk, use, or advance its own funds or otherwise incur personal financial liability in the performance of any of its duties or the exercise of any of its rights and powers hereunder. The Escrow Agent shall not be liable for the performance of any duties, except such duties as are specifically set forth in this Escrow Agreement, and no implied covenants or obligations shall be read into this Escrow Agreement. Nothing fierein contained shall relieve the Escrow Agent from liability for its own negligent action, negligent failure to act, or wil�ful misconduct, except that this sentence shall not be construed to limit the effect of the immediately preceding sentence. The Escrow Agent shall not incur any liability for any error of judgment made in good faith by a responsible officer thereof, unless it shall be proved that it was negligent in ascertaining the pertinent facts. The Escrow Agent shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bond, or other paper or document believed by it to be genuine, and to have been signed or presented by the proper party or parties. The Escrow Agent may consult with counsel, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it in good faith and in accordance therewith. The Escrow Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians, or nominees appointed : 4155-2199-7 I 39.2 with due care, and shall not be responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian, or nominee so appointed. The Escrow Agent agrees to accept and act upon instructions or directions pursuant to this Agreement sent by unsecured e-mail, facsimile transmission, or other similar unsecured electronic methods; provided, however, that the Escrow Agent shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the City elects to give the Escrow Agent e-mail or facsimile instructions (or instructions by a similar electronic method) and the Escrow Agent in its discretion elects to act upon such instructions, the Escrow Agent's understanding of such instructions shall be deemed controlling. The Escrow Agent shall not be liable for any losses, costs, or expenses arising directly or indirectly from the Escrow Agent's reliance upon and compliance with such instructions notwithstanding such instruct�ons conflict or are inconsistent with a subsequent written instruction. The City agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Escrow Agent, including without limitation the risk of the Escrow Agent acting on unauthorized instructions, and the risk of interception and misuse by third parties. Unless it is specifically provided otherwise herein, the Escrow Agent has no duty to determine or inquire into the happening or occurrence of any event or contingency or the performance or failure of performance of the City with respect to arrangements or contracts with others, with the Escrow Agent's sole duty hereunder being to safeguard the Escrow Fund and to dispose of and deliver the same in accordance with this Escrow Agreement. If, however, the Escrow Agent is called upon by the terms of this Escrow Agreement to determine the occurrence of any event or contingency, the Escrow Agent shall be obligated, in making such determination, only to exercise reasonable care and diligence, and in the event of error in making such determination the Escrow Agent shall be liable only for its own misconduct or its negligence. In determining the occurrence of any such event or contingency the Escrow Agent may request from the City or any other person such reasonable additional evidence as the Escrow Agent in its discretion may deem necessary to determine any fact relating to the occurrence of such event or contingency, and in this connection may make inquiries of, and consult with, the City, among others, at any time. The Escrow Agent shall not be liable for any action taken or neglected to be taken by it in good faith in the exercise of reasonable care and believed by it to be within the discretion or power conferred upon it by this Escrow Agreement, nor 'shall the Escrow Agent be responsible for the consequences of any error of judgment; nor shall the Escrow Agent be answerable, except for its own neglect or willful misconduct, for any loss unless the same shall have been through its negligence or want of good faith. In the absence of bad faith, the Escrow Agent may rely conclusively upon the truth, completeness, and accuracy of the statements, certificates, opinions, resolutions, and other documents conforming to the requirements of this Escrow Agreement and shall not be obligated to make any independent investigation with respect thereto. To the full extent permitted by law, the City agrees to indemnify, defend, and hold the Escrow Agent and its officers, directors, agents, and employees harmless from and against any and all loss, damage, tax, liability, and expense that G� 4 I 55-2199-7139.2 may be incurred by the Escrow Agent arising out of or in connection with its acceptance or appointment as Escrow Agent hereunder, including attorneys' fees and expenses of defending itself against any claim or liability in connection with its perfor�nance hereunder, except that the Escrow Agent shall not be indemnified for any loss, damage, tax, liability, or expense resulting from its own negligence or willful misconduct. The Escrow Agent is authorized and directed to transfer funds relating to the closing in the manner disclosed in the closing memorandum pre�ared by the City's financial advisor or other agent which is delivered to the Escrow Agent by the City. The Escrow Agent may act on a facsimile or electronic mail transmission of the closing memorandum acknowledged in writing by the City or the City's financial advisor as the fnal closing memorandum. The Escrow Agent shall not be liable for any losses, costs, or expenses arising directly or indirectly from the Escrow Agent's reliance upon and compliance with such instructions. Section 6.3 Compensation. On the Escrow Funding Date, the City will pay the Escrow Agent for performing its services as Escrow Agent hereunder and for all expenses incurred or to be incurred by the Escrow Agent in the administration of this Escrow Agreement, the fees set out in Exhibit A. If the Escrow Agent is requested or required to perform any extraordinary services hereunder, the City hereby agrees to pay reasonable fees to the Escrow Agent for such extraordinary services and to reimburse the Escrow Agent for all expenses incurred by the Escrow Agent in performing such extraordinary services. It is expressly provided that the Escrow Agent shall look only to the City for the payment of such additional fees and reimbursement of such additional expenses. The Escrow Agent hereby agrees that in no event shall it ever assert any claim or lien against the Escrow Fund for any fees for its services, whether regular, additional, or extraordinary, as Escrow Agent, or in any other capacity, or for reimbursement for any of its expenses. The foregoing sentence shall survive the termination of this Escrow Agreement and the earlier removal or resignation of the Escrow Agent. Section 6.4 Successor Escrow A�ents. If at any time the Escrow Agent or its legal successor or successors should become unable, through operation of law or otherwise, to act as escrow agent hereunder, or if its property and affairs shall be taken under the control of any state or federal court or administrative body because of insolvency or bankruptcy or for any other reason or if the Escrow Agent resigns or is removed in accordance with this Section, a vacancy shall €orthwith exist in the office of Escrow Agent hereunder. In such event the City, by appLopriate action, shall promptly appoint an Escrow Agent to fill such vacancy. If no successor Escrow Agent shall have been appointed by the City within 60 days of such vacancy or Escrow Agent's giving notice of resignation, a successor may be appointed by the holders of a majority in aggregate principal amount of the Defeased Obligations then outstanding by an instrument or instruments in writing filed with the City, signed by such holders or by their duly authorized attorneys or the Escrow Agent may petition a court of competent jurisdiction for the appointment of a successor Escrow Agent. If, in a proper case, no appointment of a successor Escrow Agent shall be made pursuant to the foregoing provisions of this section within three months after a vacancy shall have occurred, the holder of any Defeased Obligation then outstanding may apply to any court of competent jurisdiction to appoint a �� 4 I 55-2199-7139.2 successor Escrow Agent. Such court may thereupon, after such notice, if any, as it may deem proper, prescribe and appoint a successor Escrow Agent. Any successor Escrow Agent shall be qualified to act in such capacity under Chapter 1207, Texas Government Code, as amended, and shall be a corporation organized and doing business under the laws of the United States or the State of Texas, authorized under such laws to exercise corporate trust powers, having a combined capital �nd surplus of at least $50,000,000, and subject to supervision or examination by federal or state authority. Any successor Escrow Agent shall execute, acknowledge, and deliver to the City and the Escrow Agent an instrument accepting such appointment hereunder, and the Escrow Agent shall execute and deliver an instrument transferring to such successor Escrow Agent, subject to the terms of this Agreement, all the rights, powers, and trusts of the Escrow Agent hereunder. Upon the raquest of any such successor Escrow Agent, the City shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor Escrow Agent all such rights, powers, and duties. The Escrow Agent shall pay over to its successor Escrow Agent a proportional part of the Escrow Agent's fee paid hereunder. The Escrow Agent at the time acting hereunder may at any time resign and be discharged from the escrow hereby created by giving not less than sixty (60) days' written notice to the City specifying the date when such resignation will take effect. No such resignation shall take effect unless a successor Escrow Agent shall have been appointed by the holders of the Defeased Obligations or by the City as herein provided and such successor Escrow Agent shall have accepted such appointment, in which event such resignation shall take effect immediately upon the appointment and acceptance of a successor Escrow Agent. The Escrow Agent may be removed at any time by an instrument or concurrent instruments in writing delivered to the Escrow Agent and to the City and signed by the holders of a majority in aggregate principal amount of the Defeased Obli�gations then outstanding. ARTICLE VII MISCELLANEOUS Section 7.1 Notices. Any notice, authorization, request, or demand required or permitted to be given hereunder shall be made or given in writing and shall be deemed to have been duly given when mailed by registered or certified mail, postage prepaid, addressed as follows: To the Escrow Agent: BOKF, NA 5956 Sherry Lane, Suite 900 Dallas, Texas 75225 11 4155-2199-7139.2 To the City: City of Lubbock, Texas 1314 Avenue K, 11 th Floor Lubbock, Texas 79401 Attention: Chief Financial Officer The United States Post Office registered or certified mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date and fact of delivery. Either party hereto may change the address to which notices are to be delivered by giving to the other party not less than ten (10) days' prior written notice thereo£ � Section 7.2 Termination of Responsibilities. Upon the taking by the Escrow Agent of all the actions as described herein, the Escrow Agent shall have no further obligations or responsibilities hereunder to the City, the holders of the Defeased Obligations, or to any other person or persons in comlection with this Cscrow Agreement. Section 7.3 Binding A�reement; Amendment. This Escrow Agreement shall be binding upon the City and the Escrow Agent and their respective successors and legal representatives and shall inure solely to the benefit of the holders of the Defeased Obligations, the City, the Escrow Agent, and their respective successors and legal representatives. This Escrow Agreement shall not be subject to amendment without the written consent of the holders of all Defeased Obligations then outstanding. Section 7.4 Severability. If any one or more of the provisions contained in this Escrow Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Escrow Agreement, but this Escrow Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. Section 7.5 Governing Law. This Escrow Agreement shall be governed exclusively by the provisions hereof and by the applicable laws of the State of Texas. � Section 7.6 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitut� one and the same Agreement. �z � 4155-2199-7139 2 Section 7.7 Time of Essence. Time shall be of the essence in the performance of obligations fi�om time to time imposed upon the Escrow Agent by this Escrow Agreement. Section 7.8 Statutory Verifications. The Escrow Agent makes the following representation and covenants to enable the Issuer to comply with Chapters 2252, 2271, 2274, and 2276, Texas Government Code, as heretofore amended (the "Government Code"), in entering into this Agreement. As used in such verifications, ."affiliate" means an entity that controls, is controlled by, or is under common control with the Escrow Agent within the meaning of SEC Rule 405, 17 C.F.R. § 230.405, and exists to make a profit. Liability for breach of any such verification prior to the expiration or earlier termination of this Agreement shall survive until barred by the applicable statute of limitations, and shall not be liquidated or otherwise limited by any provision of this Agreement, notwithstanding anything in this Agreement to the contrary. a. Not a Sanctioned Compan�. The Escrow Agent represents that neither it nor any of its parent company, wholly- or majority-owned subsidiaries, and other affiliates is a company identified on a list prepared and maintained by the Texas Comptroller of Public Accounts under Section 2252.153 or Section 2270.0201, Government Code. The foregoing representation excludes an Esc�ow Agent and each of its parent company, wholly- or majority-owned subsidiaries, and other affiliates, if any, that the United States government has afiirmatively declared to be excluded from its federal sanctions regime relating to Sudan or Iran or any federal sanctions regime relating to a foreign terrorist organization. b. No Bovcott oflsrael. The Escrow Agent hereby verifies that it and its parent company, wholly- or majority-owned subsidiaries, and other affiliates, if any, do not boycott Israel and will not boycott Israel during the term of this Agreement. As used in the foregoing verification, "boycott Israel" has the meaning provided in Section 2271.001, Government Code. c. No Discrimination Against Firearm Entities. The Escrow Agent hereby verifies that it and its parent company, wholly- or majority-owned subsidiaries, and other affiliates, if any, do not have a practice, policy, guidance, or directive that discriminates against a frearm entity or firearm trade association and will not discriminate against a firearm entity or firearm trade association during the term of this Agreement. As used in the foregoing verification, "discriminate � against a frearm entity or firearm trade association" has the meaning provided in Section 2274.001(3), Government Code. d. No Bovcott of Energy Companies. The Escrow Agent hereby verifies that it and its parent company, wholly- or majority-owned subsidiaries, and other affiliates, if any, do not boycott energy companies and •will not boycott energy companies during the term of this Agreement. As used in the foregoing verification, "boycott energy companies" has the meaning provided in Section 2276.001(1), Government Code. 13 4 I 5 S-2 I 99-7139.2 Section 7.7 Exem�tion From Section 2252.908, Texas Government Code. Exemption From Section 2252.908, Texas Government Code. The Escrow Agent hereby warrants and represents to the Issuer that it is a publicly traded business entity or a wholly owned subsidiary of such a business entity. [Execzrtion Pages Follor��J 1� 4 I 55-2199-7139.2 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. CITY O�.j_�UBBOCK, TEXAS ayor ATTEST: City Secretary Signature �Page Escrow Agreement 4 I 55-2199-7 I 392 BOK�', NA By: _ Name: Title: Signature •Page Escrow Agreement 4 I 55-2199-7 I 39.2 EXHIBIT A TO ESCROW AGREEMENT Fee Schedule A-1 4155-2199-7139.2 EXHIBIT B TO ESCROW AGREEMENT The Report C 4155-2199-7139.2 EXHIBIT C TO ESCROW AGREEMENT Schedule of Defeased Obli�ations City of Lubbock, Texas General Obligation Refunding Bonds, Taxable Series 2019A CUSIP No. 549188576 549188S84 549188592 549188T26 549188T34 549188T42 549188T59 Original Maturity (Februa�y 15) 2026 2027 2028 2029 2030 2031 2032 Pcincipal Amount Outstandin� $4,1 I 0,000 4,200,000 4,295,000 4,390,000 4,490,000 4,605,000 2,360,000 Amount Defeased $70,000 70,000 70,000 75,000 75,000 75,000 80,000 Amount Remaining Outstanding $4,040,000 4,130,000 4,225,000 4,315,000 4,415,000 4,530,000 2,280,000 Redemption Date and Redemption Price foc Redeemed Bonds N/A N/A N/A N/A 2/I S/2029 @ Par 2/15/2029 @ Par 2/ 15/2029 @ Par C-1 4155-2199-7139.2 EXHIBIT D TO ESCROW AGREEMENT NOTICE OF DEFEASAIVCE AND REDEMPTION NOT[CE IS HERGBY G►VEN that the City of Lubbock, Texas (the "City"), acting through its City Council (the "City Council"), has defeased and called for redemption the following outstanding obligations: City of Lubbock, Texas General Obligation Refunding Bonds, Taxable Series 2019A, dated October I5, 2019 (the "Obligations"), stated to mature on February 15 in the years and in the amounts as follows: • O►-iginal CUS[P No.' 549188S76 549188S84 549188S92 549188T26 549188T34 549188T42 549188T59 Defeased CUSIP No.' 549188__ 549188_ 549188_ 549188 549188 549188 549188 _ Principal Undefeased Stated Maturity Amount CUSIP No.' Februa 15 OutstandinQ 549188 2026 $4, I 10,000 549188 _ 2027 4,2�0,000 549188 2028 4,295,000 549188 2029 4,390,000 549188 2030 4,490,000 549188 2031 4,605,000 549188 2032 2,360,000 Amount Defeased $70,000 70,000 70,000 75,000 75,000 75,000 80,000 Amount Re►naining [nterest Outstandin� Rate °/o $4,040,000 2.055 4,130,000 2.136 4,225,000 2.236 4,315,000 2.286 4,415,000 2.386 4,530,000 2.486 2,280,000 2.586 Redemption Date 2/ 15/2026 2/ I 5/2027 2/15/2028 2/15/2029 2/15/2029 2/IS/2029 2/IS/2029 The various redemption dates shown in the table above (the "Redemption Dates") are the dates fixed for redemption of the Obligations, as directed by the City Council. You are hereby notified that the Obligations must be presented for redemption on or before the applicable Redemption Date and that on such date the redemption price of the Obligations shall become due and payable. As of the date of this notice, the City has deposited with BOKF, NA, as escrow agent, cash and securities sufficient to pay sufficient to pay the principal of, premium, if any, and interest on the Obligations to the applicable Redemption Dates. � NOT[CE IS FURTHER GIVEN that the Obligations will be payable at and should be submitted either in person or by certified or registered mail to BOKF, NA, at the following address: BOKF, NA 5956 Sherry Lane, Suite 900 Dallas, Texas 75225 Attn: Corporate Trust THIS NOTICE is issued and given at the request of and on behalf of the City pu►•suant to the redemption provisions reserved to the City in the proceedings authorizing the issuance of the Obligations. Dated: , 2025. BOKF, NA, as Escrow Agent ' The CUSIP number is includcd solely for the convcnience of the Obligation holders. None of the City, [3ond Counsel, or the Paying AgendRegistrar shall be responsible f'or the selection or the use of the CUSIP nwnber, nor is any representation made as to its correctness on the Obligations or as indicated in any redemption notice. D-1 4155-2 � 99-7139.2