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Home My WebLink AboutOrdinance - 2024-O0136 - Water And Wastewater System Revenue Refunding Bonds - 10/08/2024MINUTES AND CERTIFICATION PERTAINING TO PASSAGE OF AN ORDINANCE STATE OF TEXAS § COUNTY OF LUBBOCK § CITY OF LUBBOCK § On the 8th day of October, 2024, 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: Mark McBrayer, Mayor Christy Martinez-Garcia ) Gordon Harris ) David Glasheen ) Members of Brayden Rose ) the Council Dr. Jennifer Wilson ) Tim Collins ) Mayor Mark McBrayer and all of said persons were present[, except Council Member Gordon Harris �, thus constituting a quorum. Whereupon, among other business, a written Ordinance bearing the following caption was introduced: AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CITY OF LUBBOCK, TEXAS, WATER AND WASTEWATER SYSTEM REVENUE REFUNDING BONDS, IN ONE OR MORE SERIES; PROVIDING FOK THE AWARD OF THE SALE THEREOF IN ACCORDANCE WITH SPECIFIED PARAMETERS; APPROVING AN OFFICIAL STATEMENT; APPROVING EXECUTION OF A PURCHASE CONTRACT; AND ENACTING OTHER PROVISIONS RELATING THERETO The Ordinance, a full, true and correct copy of which is attached hereto, was read and reviewed by the City Council. Thereupon, it was duly moved and seconded that the Ordinance be passed and adopted. The Presiding Officer put the motion to a vote of the members of the City Council, and the Ordinance was passed and adopted by the following vote: AYES: 5 NOES: � ABSTENTIONS: 2 (Signature page follows) 4127-6182-5875.1 MINUTES APPROVED AND CERTIFIED TO BE TRUE AND CORRECT, and to correctly reflect the duly constituted officers and members of the City Council of said City, and the attached and following copy of said Ordinance is hereby certified to be a true and correct copy of an official copy thereof on file among the off cial records of the City, all on this the Sth day of October, 2024. City Secretary City of Lubbock, Texas [SEAL] Signature Page Certificate for Ordinance Water and Wastewater System Revenue Refunding Bonds 4127-6182-5875.1 Ordinance No. 2024 — 00136 ORDINANCE relating to CITY OF LUBBOCK, TEXAS WATER AND WASTEWATER SYSTEM REVENUE REFUNDING BONDS Adopted: October 8, 2024 41{4-5400-6866.4 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS AND OTHER PRELIMINARY MATTERS Section1.01 Definitions ...............................................................................................................2 Section1.02 Findings ...................................................................................................................9 Section 1.03 Table of Contents, Titles and Headings ...................................................................9 Section1.04 Interpretation ............................................................................................................9 ARTICLE II SECURITY FOR THE BONDS Section 2.01 Pledge of Security ..................................................................................................10 Section 2.02 Limited Obligations ...............................................................................................10 Section 2.03 Security Interest .....................................................................................................10 ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE BONDS Section 3.01 Section 3.02 Section 3.03 Section 3.04 Section 3.05 Section 3.06 Section 3.07 Section 3.08 Section 3.09 Section 3.10 Section 3.11 Section 3.12 Authorization.........................................................................................................10 Date, Denomination, Maturities and Interest ......................................................... l l Medium, Method and Place of Payment ................................................................ l l Execution and Registration of Bonds ....................................................................12 Ownership..............................................................................................................13 Registration, Transfer and Exchange .....................................................................13 Cancellation...........................................................................................................14 TemporaryBonds ..................................................................................................14 ReplacementBonds ...............................................................................................15 Book-Entry Only System .......................................................................................16 Successor Securities Depository; Transfer Outside Book-Entry Only System....................................................................................................................16 Paymentsto Cede & Co .........................................................................................17 ARTICLE IV REDEMPTION OF BONDS BEFORE MATU�tITY Section 4.01 Section 4.02 Section 4.03 Section 4.04 Section 4.05 Section 4.06 Section 4.07 Section 4.08 Limitation on Redemption .....................................................................................17 Mandatory Sinking Fund Redemption ...................................................................17 OptionalRedemption .............................................................................................17 PartialRedemption ................................................................................................18 Notice of Redemption to Owners ..........................................................................18 Payment Upon Redemption ...................................................................................19 Effectof Redemption .............................................................................................19 Lapseof Payment ..................................................................................................19 «r.z�ic�i��:iTs� ARTICLE V PAYING AGENT/REGISTRAR Section 5.01 Appointment of Paying Agent/Registrar ...............................................................19 Section5.02 Qualifications .........................................................................................................20 Section 5.03 Maintaining Paying Agent/Registrar .....................................................................20 Section5.04 Termination ............................................................................................................20 Section 5.05 Notice of Change to Owners ..................................................................................20 Section 5.06 Agreement to Perform Duties and Functions ........................................................20 Section 5.07 Delivery of Records to Successor ..........................................................................20 ARTICLE VI FORM OF THE BONDS Section6.01 Form Generally ......................................................................................................21 Section 6.02 CUSIP Registration ...............................................................................................21 Section6.03 Legal Opinion ........................................................................................................21 Section 6.04 Statement of Insurance ..........................................................................................21 ARTICLE VII FUNDS AND ACCOUNTS Section 7.01 Segregation of Revenues; Fund Designations .......................................................22 Section7.02 System Fund ..........................................................................................................22 Section7.03 Bond Fund .............................................................................................................23 Section 7.04 General Reserve Fund ............................................................................................23 Section 7.05 TWDB Reserve Fund ............................................................................................25 Section7.06 Reserved . ...............................................................................................................27 Section 7.07 Payment of Bonds ..................................................................................................27 Section 7.08 Deficiencies in Funds ............................................................................................27 Section 7.09 Security and Investment of Funds .........................................................................27 Section 7.10 Excess Revenues ....................................................................................................28 ARTICLE VIII SALE AND DELIVERY OF BONDS; DEPOSIT OF PROCEEDS Section 8.01 Sale of Bonds; Official Statement .........................................................................28 Section 8.02 Control and Delivery of Bonds ..............................................................................30 Section 8.03 Deposit of Proceeds ...............................................................................................30 ARTICLE IX ADDITIONAL BONDS Section 9.01 Issuance of Additional Bonds ................................................................................30 Section 9.02 Credit Facilities ......................................................................................................32 Section 9.03 Separately Financed Projects .................................................................................32 ARTICLE X PARTICULAR REPRESENTATIONS AND COVENANTS Section10.01 Rates and Charges ..................................................................................................32 Section 10.02 Maintenance and Operation; Insurance .................................................................33 ii 4164-5400-6866.4 Section 10.03 Records, Accounts, Accounting Reports ...............................................................33 Section 10.04 Further Covenants ..................................................................................................34 Section 10.05 Covenants to Maintain Tax Exempt Status . ..........................................................35 Section 10.06 Disposition of Project ............................................................................................37 ARTICLE XI DEFAULT AND REMEDIES Section 11.01 Events of Default ...................................................................................................38 Section 11.02 Remedies for Default .............................................................................................38 Section 11.03 Remedies Not Exclusive ........................................................................................38 ARTICLE XII DISCHARGE Section12.01 Discharge ...............................................................................................................39 ARTICLE XIII CONTINUING DISCLOSURE UNDERTAKING Section 13.01 Annual Reports ......................................................................................................39 Section 13.02 Event Notices .........................................................................................................39 Section 13.03 Identifying Information .........................................................................................41 Section 13.04 Limitations, Disclaimers and Amendments ...........................................................41 ARTICLE XIV AMENDMENT OF ORDINANCE Section 14.01 Amendment of Ordinance ......................................................................................42 ARTICLE XV REDEMPTION OF R�FUNDED OBLIGATIONS Section 15.01 Redemption of Refunded Obligations . ..................................................................44 Section 15.02 Arrangements for Defeasance of Refunded Obligations . ......................................44 Section 15.03 Notice of Redemption ............................................................................................45 ARTICLE XVI EFFECTIVE IMMEDIATELY Section 16.01 Effective Immediately ...........................................................................................45 Schedule I- Refunding Candidates .................................................................................. Schedule I Exhibit A- Description of Annual Disclosure of Financial Information .................................. A-1 Exhibit B - Sale Parameters ........................................................................................................B-1 Exhibit C- Form of the Bonds ...................................................................................................C-1 4164-5400-6866.4 iii AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CITY OF LUBBOCK, TEXAS, WATER AND WASTEWATER SYSTEM REVENUE REFUNDING BONDS, IN ONE OR MORE SERIES; PROVIDING FOR THE AWARD OF THE SALE THEREOF IN ACCORDANCE WITH SPECIFIED PARAMETERS; APPROVING AN OFFICIAL STATEMENT; APPROVING EXECUTION OF A PURCHASE CONTRACT; AND ENACTING OTHER PROVISIONS RELATING THER�:TO 'IWHEREAS, in accordance with the Constitution and laws of the State of Texas, specifically Chapter 1502, Texas Government Code, as amended ("Chapter 1502"), the City Council (the "City Council") of the City of Lubbock, Texas (the "City") has previously determined that it is in the best interest of the City to create and maintain a combined water and wastewater system (the "Water and Wastewater System" or the "System"); W�iEREAS, the City Council hereby finds and determines that bonds secured by a first lien on and pledge of the Net Revenues of the Water and Wastewater System should be issued for the purposes hereinafter provided; WI-IEREAS, Chapter 1207, Texas Government Code, as amended ("Chapter 1207"), authorizes the City to issue refunding bonds to refund all or a portion of the outstanding obligations of the City identified on Schedule I attached hereto (collectively, the "Refunding Candidates"); WHEREAS, the City now desires to refund all or a portion of such Refunding Candidates (such refunded obligations to be hereinafter referred to as the "Refunded Obligations"); WHEREAS, Chapter 1207 further authorizes the City to deposit the proceeds from the sale of refunding bonds, together with any other available funds or resources, directly with the paying agent for any of the Refunded Obligations or a trust company or commercial bank, and such deposit, if made before the payment dates therefor, shall constitute the making of firm banking and financial arrangements for the discharge and final payment of the Refunded Obligations; 'C�VHEREAS, the City Council hereby finds and determines that the refunding contemplated by this Ordinance will benefit the City by providing present value debt service savings in an amount or amounts to be certified in the Pricing Certificate(s) (hereinafter defined) and that such benefit is sufficient consideration for the issuance of refitnding bonds, as provided by this Ordinance, and the refunding of the Refunded Obligations; W�[EREAS, the City is an "Issuer" within the meaning of Chapter 1371, Texas Government Code ("Chapter 1371"), as amended, and the City Council desires to delegate, pursuant to Chapters 1207 and 1371 and the parameters of this Ordinance, to the Authorized Officer (hereinafter defined), the authority to approve the terms of the bonds authorized hereby and to otherwise take such actions as are necessary and appropriate to effect the sale of such bonds and the refunding of the Refunded Obligations; WHEREAS, the revenue bonds hereinafter authorized are to be issued and delivered pursuant to Chapter 1207 and Chapter 1371 and in accordance with the general laws of the State of Texas; and 4164-5400-6866 4 WHEREAS, the meeting at which this Ordinance is considered is open to the public as required by law, and the public notice of the time, place and purpose of said meeting was given as required by Chapter 551, Texas Government Code, as amended; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK, TEXAS, THAT: 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: "Account" means any account created within a Fund established pursuant to the terms of this Ordinance or an ordinance authorizing the issuance of Parity Obligations. "Additional Bonds" means the additional parity obligations the City reserves the right to issue in accordance with the terms and conditions prescribed in Section 9.01 hereof. "Authorized Officer" means each of the Mayor, the City Manager and the Chief Financial Officer, acting individually. "Bond" means any of the Bonds. "Bond Date" means the date designated as the initial date of the Bonds by Section 3.02(a) of this Ordinance. "Bond Fund" has the meaning assigned in Section 7.01 hereof. "Bonds" means the bonds authorized to be issued by Section 3.01 of this Ordinance. "Business Day" means any day other than a Saturday, Sunday or legal holiday or other day on which banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are required or authorized by law or executive order to close. "Chapter 1207" means Chapter 1207, Texas Government Code, as amended. "Chapter 1208" means Chapter 1208, Texas Government Code, as amended. "Chapter 1371" means Chapter 1371, Texas Government Code, as amended. "Chapter 1502" means Chapter 1502, Texas Government Code, as amended. "Chief Financial Officer" means the Chief Financial Officer of the City or such other City official or officer who has assumed the duties of the Chief Financial Officer. "City" means the City of Lubbock, Texas. 2 4164-5400-6866.4 "Closing Date" means the date of the initial delivery of and payment for Bonds. "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, enacted on or before the Issue Date. "Computation Date" has the meaning stated in Section 1.148-1(b) of the Regulations. "Covered Parity Bonds" means Parity Bonds (other than TWDB Bonds) designated as Covered Parity Bonds. "Credit Facility" means an agreement (including a loan agreement, revolving credit agreement, agreement establishing a line of credit, letter of credit, reimbursement agreement, insurance contract, commitment to purchase Parity Bonds, purchase or sale agreement, or commitment or other contract) that is (a) authorized, recognized and approved by the City as a Credit Facility in connection with the authorization, issuance, security, or payment of Parity Bonds or (b) entered into with a fnancial institution for the purpose of (i) enhancing or supporting the creditworthiness of (A) a series or installment of Parity Bonds or (B) all of the Parity Bonds, (ii) providing a surety policy or other similar instrument in order to Cund all or a portion of a Reserve Fund Requirement for one or more series of Parity Bonds, or (iii) providing liquidity with respect to a series or installment of Parity Bonds which by their terms are subject to tender for purchase, and which, by its terms, creates a liability on the part of the City on a parity with the Parity Bonds; provided that, on the date any such credit facility is issued, any rating agency having an outstanding rating on the Parity Bonds would not lower the rating on the Parity Bonds as confirmed in writing by such rating agency. A determination by the City Council contained in the ordinance authorizing the issuance of Parity Bonds and/or authorizing the execution and delivery of a Credit Facility that such agreement constitutes a Credit Facility under this definition shall be conclusive as against all Owners. "Debt Service" means, as of any particular date of computation, with respect to any series or installment of obligations and with respect to any period, the aggregate of the amounts to be paid or set aside by the City as of such date or in such period for the payment of the principal of, premium, if any, and interest (to the extent not capitalized) on such obligations; assuming in the case of obligations required to be redeemed or prepaid as to principal prior to maturity, the principal amounts thereof will be redeemed or paid prior to maturity in accordance with the mandatory redemption or prepayment provisions applicable thereto. "Defeasance Securities" has the meaning assigned in the Escrow Agreement. "Designated Payment/Transfer Office" means the Designated PaymendTransfer Office, as designated in the Paying Agent/Registrar Agreement, or such other location designated by the Paying Agent/Registrar. "DTC" means The Depository Trust Company of New York, New York, or any successor securities depository. "DTC Participant" means brokers and dealers, banks, trust companies, clearing corporations and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. 3 4164-5400-6866.4 "EMMA" means the Electronic Municipal Market Access System. "Escrow Agreement" means an agreement referred to in Section 15.02 of this Ordinance. "Event of Default" means any event of default as described in Section 11.01 of this Ordinance. "Financial Obligation" means a(a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) guarantee of a debt obligation or any such derivative instrument; provided that "financial obligation" shall not include municipal securities (as defined in the Securities Exchange Act of 1934, as amended) as to which a final official statement (as defined in the Rule) has been provided to the MSRB consistent with the Rule. "Fiscal Year" means the twelve (12) month accounting period used by the City in connection with the operations of the System which may be any twelve (12) consecutive month period established by the City. "Fund" means any of the funds, accounts or a portion of a fund or account, confirmed and/or established pursuant to Article VII hereof. "General Reserve Fund" has the meaning assigned in Section 7.01 hereof. "General Reserve Fund RequiremenY' means an amount equal to the lesser of (i) the maximum annual debt service (calculated on a Fiscal Year basis) for all Outstanding Covered Parity Bonds, as determined on the date of issuance of each series or installment of Additional Bonds issued as Couered Parity Bonds, and annually following each principal payment date or redemption date for the Covered Parity Bonds, as the case may be, or (ii) the maximum amount in a reasonably required reserve fund that can be invested without restriction as to yield pursuant to Subsection (d) of section 148 of the Code and regulations promulgated thereunder. "Initial Bond" means the initial bond or bonds authorized by Section 3.04 of this Ordinance. "Interest Payment Date" means the date or dates on which interest on the Bonds is scheduled to be paid until their respective dates of maturity or prior redemption, as set forth in the Pricing Certificate. "Investment" has the meaning stated in Section 1.148-1(b) of the Regulations. "Issue Date" for each series of Bonds or other obligations of the City is the respective date on which such series of Bonds or other obligations of the City is delivered against payment therefor. "MSRB" means the Municipal Securities Rulemaking Board. "Net Revenues" means all income, revenues and receipts of every nature derived from and received by virtue of the operation of the System including interest income and earnings received 4 4164-5400-6866.4 from the investment of moneys in the special Funds created by this Ordinance or ordinances authorizing Parity Obligations, after deducting and paying, and making provisions for the payment of, current expenses of maintenance and operation thereof, including all salaries, materials, repairs and extensions necessary to render efficient service; provided, however, only such expenses for repairs and extensions as in the judgment of the City Council reasonably and fairly exercised, are necessary to keep the System in operation and to render adequate service to the City and the inhabitants thereof, or such as might be necessary to meet some physical accident or condition which would otherwise impair any obligations payable from Net Revenues of the System, shall be deducted in determining "Net Revenues". Contractual payments for the purchase of water or the treatment of sewage shall be a maintenance and operating expense of the System to the extent provided in the contract incurred therefor and as may be authorized by law. Depreciation shall never be considered as an expense of operation and maintenance. "Non-Recourse Debt" means any debt secured by a lien (other than a lien on Net Revenues), liability for which is effectively limited to the property subject to such lien with no recourse, directly or indirectly, to any other property of the City attributable to the Water and Wastewater System; provided, however, that such debt is being incurred in connection with the acquisition of property only, which property is not, at the time of such occurrence, owned by the City and being used in the operations of the City. "Official StatemenY' means a document described in Section 8.01(c) prepared for dissemination to potential investors in connection with the public offering and sale of Bonds. "Outstanding" when used in this Ordinance with respect to Parity Bonds, means, as of the date of determination, all Parity Bonds theretofore sold, issued and delivered by the City, except: (1) those Parity Bonds cancelled or delivered to the transfer agent or registrar for cancellation in connection with the exchange or transfer of such obligations; (2) those Parity Bonds paid or deemed to be paid in accordance with the provisions of Section 12.01 of this Ordinance; and (3) those Parity Bonds that have been mutilated, destroyed, lost, or stolen and replacement bonds have been registered and delivered in lieu thereof. "Owner" means the person who is the registered owner of a Bond or Bonds, as shown in the Register. "Parity Bonds" means any Previously Issued Bonds, the Bonds and Additional Bonds, if any. "Parity Obligations" means all Parity Bonds, as well as any other obligations issued or incurred by the City that are determined and declared by the City Council of the City to be on a parity with the Parity Bonds, including obligations of the City issued or incurred under the terms of a Credit Facility. 5 4164-5400-6866.4 "Paying AgendRegistrar" means the bank or trust company identified in the Paying Agent/Registrar Agreement referred to in Section 5.01 of this Ordinance, or any successor thereto as provided in this Ordinance. "Preliminary Official Statement" means a document described in Section 8.01(c) prepared for dissemination to potential investors prior to the availability of the final Offcial Statement. "Previously Issued Bonds" means Outstanding and unpaid revenue bonds payable from and secured by a first lien on and pledge of the Net Revenues of the System, which consist of the following: (i) City of Lubbock, Texas Water and Wastewater System Revenue Bonds, Series 2019, (ii) City of Lubbock, Texas Water and Wastewater System Revenue Improvement and Refunding Bonds, Series 2019A, (iii) City of Lubbock, Texas Water and Wastewater System Revenue Refunding Bonds, Taxable Series 2019B, (iv) City of Lubbock, Texas Water and Wastewater System Revenue Bonds, Series 2020A, (v) City of Lubbock, Texas Water and Wastewater System Revenue Re�'unding Bonds, Series 2020B, (vi) City of Lubbock, Texas Water and Wastewater System Revenue Refiznding Bonds, Taxable Series 2020C, (vii) City of Lubbock, Texas Water and Wastewater System Revenue Bonds, Series 2021, (viii) City of Lubbock, Texas Water and Wastewater System Revenue Bonds, Series 2021 A, (ix) City of Lubbock, Texas Water and Wastewater System Revenue Bonds, Series 2022, and (x) City of Lubbock, Texas Water and Wastewater System Revenue Bonds, Series 2023. "Pricing Certificate" means a certificate or certificates signed by an Authorized Officer establishing the terms and features of each series of Bonds in accordance with Section 8.01 hereof. "Proceeds" has the meaning stated in Section 1.148-1(b) of the Regulations. "Purchase Contract" means any contract, agreement or investment letter pursuant to which the Bonds of each series are sold to the Purchaser thereof. 6 4164-5400-6866.4 "Purchaser" means the purchaser or purchasers of the Bonds of each series identified in the Pricing Certificate or Purchase Contract. "Record Date" means the date specified in the Pricing Certificate. "Refunding Candidates" means the obligations described in Schedule I attached hereto. "Refunded Obligations" means the Refunding Candidates designated as Refunded Obligations in a Pricing Certifcate. "Register" means the register specified in Section 3.06(a) of this Ordinance. "Regulations" means the final or temporary Income Tax Regulations applicable to obligations issued pursuant to Sections 141 through 150 of the Code. Any reference to a section of the Regulations shall also refer to any successor provision to such section hereafter promulgated by the Internal Revenue Service pursuant to Sections 141 through 150 of the Code and applicable to the Bonds. DTC. "Representation Letter" means the Blanket Letter of Representations between the City and "Reserve Fund Obligations" means cash or investment securities of any of the type or types permitted under Sections 7.04 and 7.09 of this Ordinance (in the case of the General Reserve Fund) or Sections 7.05 and 7.09 of this Ordinance (in the case of the TWDB Reserve Fund). "Reserve Funds" has the meaning assigned in Section 7.01 hereof. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. "Special Payment Date" means the special payment date prescribed by Section 3.03(b). "Special Record Date" means the special record date prescribed by Section 3.03(b). "Subordinate Obligations" means any debt secured by or payable in whole or in part from revenues of the System or any portion thereof which expressly provides that all payments thereon shall be subordinated to the timely payment of all Parity Obligations then outstanding or subsequently issued. "System" or "Water and Wastewater System" means the City's combined water and wastewater system, including all properties and interests in properties (real, personal or mixed and tangible or intangible, including contract rights, water rights and permits) owned, operated, maintained, and vested in, the City for the supply, storage, treatment and distribution of treated water for municipal, domestic, commercial, industrial and other uses and the collection and treatment of watered wastes, together with all future additions, extensions, replacements and improvements thereto; provided that, notwithstanding the foregoing, and to the extent now or hereafter authorized or permitted by law, the term Water and Wastewater System shall not include 7 4164-5400-6866.4 any water or wastewater facilities that are declared not to be a part of the Water and Wastewater System and are acquired or constructed by the City with the proceeds from the issuance of "Special Facilities Bonds," which are hereby defined as being special revenue obligations of the City which are not secured by or payable from the Net Revenues as defined herein, but which are secured by and payable solely from special contract revenues or payments received from any other legal entity in connection with such facilities, and thus constitute Non-Recourse Debt; and such revenues or payments shall not be considered as or constitute gross revenues of the Water and Wastewater System, unless and to the extent otherwise provided in the ordinance or ordinances authorizing the issuance of such "Special Facilities Bonds." "System Fund" has the meaning assigned in Section 7.01 hereof. "Taxable Bonds" means any Bonds for which the City does not intend that the interest thereon shall be excludable from gross income of the owners thereof for federal income tax purposes pursuant to Sections 103 and 141 through 150 of the Code, as determined and set forth in the Pricing Certificate therefor. "Tax-Exempt Bonds" means any Bonds for which the City intends that the interest thereon shall be excludable from gross income of the owners thereof for federal income tax purposes pursuant to Sections 103 and 141 through 150 of the Code, as determined and set forth in the Pricing Certificate therefor. "Term Bonds" has the meaning set forth in Section 4.02 hereof. "TWDB" means Texas Water Development Board. "TWDB Bonds" means Parity Bonds owned by the Texas Water Development Board and designated as TWDB Bonds. "TWDB Reserve Fund" has the meaning assigned in Section 7.01 hereof. "TWDB Reserve Fund Requirement" means an amount equal to the lesser of (i) the average annual debt service (calculated on a Fiscal Year basis) for all Outstanding TWDB Bonds, as determined on the date of issuance of each series or installment of Additional Bonds issued as TWDB Bonds, and annually following each principal payment date or redemption date for TWDB Bonds, as the case may be, or (ii) the maximum amount in a reasonably required reserve fund that can be invested without restriction as to yield pursuant to Subsection (d) of section 148 of the Code and regulations promulgated thereunder. "Unclaimed Payments" mean money deposited with the Paying Agent/Registrar for the payment of principal of, premium, if any, or interest on the Bonds as the same come due and payable and remaining unclaimed by the Owners of such Bonds after the applicable payment or redemption date. 4164-5400-6866 4 Section 1.02 Findin�s. (a) The declarations, determinations and findings declared, made and found in the preamble to this Ordinance are hereby adopted, restated and made a part of the operative provisions hereof. (b) The Water and Wastewater System shall be maintained in accordance with this Ordinance as long as the Bonds remain Outstanding. (c) The Bonds are payable from and secured by a first lien on and pledge of the Net Revenues of the Water and Wastewater System. (d) All conditions precedent to the issuance of the Bonds have been or will be satisfied prior to delivery of the Bonds to the Purchasers. (e) Each of the Bonds shall be deemed and construed to be a"Security", and as such a negotiable instrument, within the meaning of Article 8 of the Texas Uniform Commercial Code. (� The provisions of this Ordinance shall constitute a contract between the City and the holder or holders from time to time of the Bonds and no change, variation or alteration of any kind of the provisions of this Ordinance may be made, unless as herein otherwise provided, until all of the Bonds shall have been paid as to both principal and interest. Section 1.03 Table of Contents, Titles and Headin�s. 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 1.04 Interpretation. (a) Unless the context requires otherwise, words of the masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa. (b) Any action required to be taken on a date which is not a Business Day shall be done on the next succeeding Business Day and have the same effect as if done on the date so required. (c) 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. 4 4164-5400-6866.4 ARTICLE II SECURITY FOR THE BONDS Section 2.01 Pled�e of Security. The Bonds are and shall be equally and ratably secured by and payable from a first lien on and pledge of the Net Revenues. The City hereby covenants and agrees that all of the Net Revenues derived from the operation of the System, with the exception of Net Revenues in excess of the amounts required to establish and maintain the special Funds created for the payment and security of the Parity Obligations, are hereby irrevocably pledged for the payment of the Parity Obligations (including the Bonds) and the interest thereon, and it is hereby ordained that the Parity Obligations (including the Bonds) and the interest thereon, shall constitute a first lien on the Net Revenues of the System and be valid and binding without any physical delivery thereof or further act by the City as provided in Chapter 1208, Texas Government Code, as amended. Section 2.02 Limited Obli at� ions. (a) The Bonds are special obligations of the City, payable solely from the pledged Net Revenues, and do not constitute a prohibited indebtedness of the City, and the Bonds shall never be payable out of funds raised or to be raised by taxation. (b) The Net Revenues shall not in any manner be pledged to the payment of any debt or obligation of the City or the System, other than Parity Obligations, except on a subordinate lien basis. Section 2.03 Securitv Interest. Chapter 1208 applies to the issuance of the Bonds and the pledge of the Net Revenues granted by the City under Section 2.01 hereof, and such pledge is therefore valid, effective, and perfected. If Texas law is amended at any time while the Bonds are outstanding and unpaid such that the pledge of the Net Revenues granted by the City is to be subject to the filing requirements of Chapter 9, Texas Business & Commerce Code, then in order to preserve to the registered owners of the Bonds the perfection of the security interest in said pledge, the City agrees to take such measures as it determines are reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9, Texas Business & Commerce Code, and enable a fling to perfect the security interest in said pledge to occur. ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE BONDS Section 3.01 Authorization. The Bonds are hereby authorized to be issued and delivered in accordance with the Constitution and laws of the State of Texas, including specifically Chapter 1207, Chapter 1371, and Article VIII of the Charter of the City. The Bonds shall bear the title or designation set forth 10 4164-5400-6866.4 in the Pricing Certificate therefor and be issued as Covered Parity Bonds in one or more series, from time to time, on the dates and in the principal amount designated in the Pricing Certificate therefor, such aggregate principal amount not to exceed $64,000,000, for the purposes of (i) refunding the Refunded Obligations and (ii) paying the costs of issuing the Bonds and refunding the Refunded Obligations. If the Bonds are issued in more than one series, the provisions of this Ordinance shall apply to each such series in the manner, to the extent and subject to such terms and conditions as shall be specified in the Pricing Certificate therefor. Section 3.02 Date, Denomination, Maturities and Interest. (a) The Bonds shall be dated the Bond Date set forth in the Pricing Certificate. The Bonds shall be issued in fully registered form, without coupons, in the denomination of $5,000 or any integral multiple thereof and shall be numbered separately from one upward or such other designation acceptable to the City and the Paying Agent/Registrar, except the Initial Bond, which shall be numbered T-1, or in such other manner provided in the Pricing Certificate. The Bonds shall mature on the date or dates, in the years and in the principal amounts set forth in the Pricing Certificate; provided, that the maximum maturity for the Bonds shall not exceed the number of years set forth in Exhibit B. (b) Interest shall accrue and be paid on each Bond respectively until its maturity or prior redemption, from the later of the date set forth in the Pricing Certificate or the most recent Interest Payment Date to which interest has been paid or provided for at the rates per annum for each respective maturity specified in the Pricing Certificate. Such interest shall be payable on each Interest Payment Date until maturity or prior redemption. Interest on the Bonds shall be calculated on the basis of a three hundred sixty (360) day year composed of twelve (12) months of thirty (30) days each, or on such other basis as set forth in the Pricing Certificate. Section 3.03 Medium, Method and Place of Pavment. (a) The principal of, premium, if any, and interest on the Bonds shall be paid in lawful money of the United States of America. (b) Interest on the Bonds shall be payable to each Owner as shown in the Register at the close of business on the Record Date; provided, however, in the event of nonpayment of interest on a scheduled Interest Payment Date and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date") shall be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (the "Special Payment Date," which shall be 15 days after the Special Record Date) shall be sent at least five Business Days prior to the Special Record Date by first-class United States mail, postage prepaid, to the address of each Owner of a Bond appearing on the Register at the close of business on the last Business Day next preceding the date of mailing of such notice. (c) Interest shall be paid by check, dated as of the Interest Payment Date, and sent by the Paying Agent/Registrar to each Owner by United States mail, first class postage prepaid, to the 11 4164-5400-6866.4 address of each Owner as it appears in the Register, or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the Owner; provided, however, the Owner shall bear all risk and expense of such other banking arrangement. At the option of an Owner of at least $1,000,000 principal amount of the Bonds, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. (d) The principal of each Bond shall be paid to the Owner thereof on the due date (whether at the maturity date or the date of prior redemption thereo fl upon presentation and surrender of such Bond at the Designated Payment/Transfer Office. (e) If the date for the payment of the principal of, premium, if any, or interest on the Bonds is not a Business Day, then the date for such payment shall be the next succeeding day that is a Business Day, and payment on such date shall have the same force and effect as if made on the original date payment was due and no additional interest shall be due by reason of nonpayment on the date on which such payment is otherwise stated to be due and payable. ( fl Unclaimed Payments shall be segregated in a special escrow account and held in trust, uninvested by the Paying Agent/Registrar, for the accounts of the Owners of the Bonds to which the Unclaimed Payments pertain. Subject to Title 6 of the Texas Property Code, Unclaimed Payments remaining unclaimed by the Owners entitled thereto for three years after the applicable payment or redemption date shall be applied to the next payment or payments on the Bonds thereafter coming due and, to the extent any such money remains three (3) years after the retirement of all outstanding Bonds, shall be paid to the City to be used for any lawful purpose. Thereafter, neither the City, the Paying AgenURegistrar nor any other person shall be liable or responsible to any owners of such Bonds for any further payment of such unclaimed monies or on account of any such Bonds, subject to Title 6 of the Texas Property Code. Section 3.04 Execution and Re�istration of Bonds. (a) The Bonds shall be executed on behalf of the City by the Mayor and the City Secretary, by their manual or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Bonds shall have the same effect as if each of the Bonds had been signed manually and in person by each of said officers, and such facsimile seal on the Bonds shall have the same effect as if the official seal of the City had been manually impressed upon each of the Bonds. (b) In the event that any officer of the City whose manual or facsimile signature appears on the Bonds ceases to be such officer before the authentication of such Bonds or before the delivery thereof, such manual or facsimile signature nevertheless shall be valid and sufficient for all purposes as if such officer had remained in such office. (c) Except as provided below, no Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the Certificate of Paying AgenURegistrar substantially in the form provided in the form of bond attached hereto as Exhibit C, duly authenticated by execution by an officer or duly authorized signatory of the Paying Agent/Registrar. It shall not be required that the same officer or authorized signatory of the Paying Agent/Registrar sign the Certificate of Paying AgendRegistrar on all of 12 4164-5400-6866.4 the Bonds. In lieu of the executed Certificate of Paying Agent/Registrar described above, the Initial Bond delivered at the Closing Date shall have attached thereto the Comptroller's Registration Certificate substantially in the form provided in the form of bond attached hereto as Exhibit C, manually executed by (or, to the extent allowed by law, bearing a facsimile signature o� the Comptroller of Public Accounts of the State of Texas, or by his duly authorized agent, which Certificate shall be evidence that the Bond has been duly approved by the Attorney General of the State of Texas, that it is a valid and binding obligation of the City and that it has been registered by the Comptroller of Public Accounts of the State of Texas. (d) On the Closing Date, one Initial Bond of each series reflecting the terms set forth in the Pricing Certificate and representing the entire principal amount of all Bonds of such series, payable in stated installments to the Purchaser, or its designee, executed by the Mayor and City Secretary of the City by their manual or facsimile signatures, approved by the Attorney General, and registered and manually signed by (or, to the extent allowed by law, bearing a facsimile signature o� the Comptroller of Public Accounts, will be delivered to the Purchaser or its designee. Upon payment for the Initial Bond, the Paying Agent/Registrar shall cancel the Initial Bond and deliver a single registered, definitive Bond for each maturity, in the aggregate principal amount thereof, to DTC on behalf of the Purchaser. Section 3.05 Ownership. (a) The City, the Paying Agent/Registrar and any other person may treat the person in whose name any Bond is registered as the absolute owner of such Bond for the purpose of making and receiving payment as provided herein (except interest shall be paid to the person in whose name such Bond is registered on the Record Date or Special Record Date, as applicable), and for all other purposes, whether or not such Bond is overdue, and neither the City nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary. (b) All payments made to the Owner of a Bond shall be valid and effectual and shall discharge the liability of the City and the Paying Agent/Registrar upon such Bond to the extent of the sums paid. Section 3.06 Registration, Transfer and Exchan�e. (a) So long as any Bond remains outstanding, the City shall cause the Paying Agent/Registrar to keep at the Designated Payment/Transfer Office a register (the "Register") in which, subject to such reasonable regulations as it may prescribe, the Paying AgendRegistrar shall provide for the registration and transfer of Bonds in accordance with this Ordinance. (b) The ownership of a Bond may be transferred only upon the presentation and surrender of the Bond at the Designated Payment/Transfer Office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Ager�t/Registrar. No transfer of any Bond shall be effective until entered in the Register. (c) The Bonds shall be exchangeable upon the presentation and surrender thereof at the Designated Payment/Transfer Office of the Paying Agent/Registrar for a dond or Bonds of the same series, maturity and interest rate and in any denomination or denominations of any integral multiple of $5,000 and in an aggregate principal amount equal to the unpaid principal amount of 13 4164-5400-6866.4 the Bonds presented for exchange. The Paying Agent/Registrar is hereby authorized to authenticate and deliver Bonds exchanged for other Bonds in accordance with this Section. (d) Each exchange Bond delivered by the Paying Agent/ Registrar in accordance with this Section shall constitute an original contractual obligation of the City and shall be entitled to the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such exchange Bond is delivered. (e) No service charge shall be made to the Owner for the initial registration, subsequent transfer, or exchange for any different denomination of any of the Bonds. The Paying AgendRegistrar, however, may require the Owner to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection with the registration, transfer or exchange of a Bond. (� Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer, or exchange any Bond called for redemption, in whole or in part, where such redemption is scheduled to occur within forty-five (45) calendar days after the transfer or exchange date; provided, however, such limitation shall not be applicable to an exchange by the Owner of the uncalled principal balance of a Bond. Section 3.07 Cancellation. All Bonds paid or redeemed before scheduled maturity in accordance with this Ordinance, and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and delivered in accordance with this Ordinance, shall be cancelled and proper records shall be made regarding such payment, redemption, exchange or replacement. The Paying Agent/Registrar shall then return such cancelled Bonds to the City or may in accordance with law destroy such cancelled Bonds and periodically furnish the City with certificates of destruction of such Bonds. Section 3.08 Temporary Bonds. (a) Following the delivery and registration of the Initial Bond and pending the preparation of definitive Bonds, the proper officers of the City may execute and, upon the City's request, the Paying Agent/Registrar shall authenticate and deliver, one or more temporary Bonds that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any denomination, substantially of the tenor of the definitive Bonds in lieu of which they are delivered, without coupons, and with such appropriate insertions, omissions, substitutions and other variations as the officers of the City executing such temporary Sonds may determine, as evidenced by their signing of such temporary Bonds. (b) Until exchanged for Bonds in definitive form, such Bonds in temporary form shall be entitled to the benefit and security of this Ordinance. (c) The City, without unreasonable delay, shall prepare, execute and deliver to the Paying Agent/Registrar the Bonds in definitive form; thereupon, upon the presentation and surrender of the Bonds in temporary form to the Paying Agent/Registrar, the Paying AgenURegistrar shall cancel the Bonds in temporary form and shall authenticate and deliver in exchange therefor Bonds of the same maturity and series, in definitive form, in the authorized 14 4164-5400-6866.4 denomination, and in the same aggregate principal amount, as the Bonds in temporary form surrendered. Such exchange shall be made without the making of any charge therefor to any Owner. Section 3.09 Replacement Bonds. (a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated Bond, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a replacement Bond of the same series and of like tenor and principal amount, bearing a number not contemporaneously outstanding. The City or the Paying Agent/Registrar may require the Owner of such I3ond to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection therewith and any other expenses connected therewith. (b) In the event that any Bond is lost, apparently destroyed or wrongfully taken, the Paying Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall authenticate and deliver a replacement Bond of the same series and of like tenor and principal amount, bearing a number not contemporaneously outstanding, provided that the Owner first: (i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her ownership of and the circumstances of the loss, destruction or theft of such Bond; (ii) furnishes such security or indemnity as may be required by the Paying Agent/Registrar to save it and the City harmless; (iii) pays all expenses and charges in connection therewith, including, but not limited to, printing costs, legal fees, fees of the Paying AgendRegistrar and any tax or other governmental charge that is authorized to be imposed; and (iv) satisfies any other reasonable requirements imposed by the City and the Paying Agent/Registrar. (c) If, after the delivery of such replacement Bond, a bona fide purchaser of the original Bond in lieu of which such replacement Bond was issued presents for payment such original Bond, the City and the Paying Agent/Registrar shall be entitled to recover such replacement Bond from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the City or the Paying Agent/Registrar in connection therewith. (d) In the event that any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or is about to become due and payable, the Paying Agent/Registrar, in its discretion, instead of issuing a replacement Bond, may pay such Bond if it has become due and payable or may pay such Bond when it becomes due and payable. (e) Each replacement Bond delivered in accordance with this Section shall constitute an original additional contractual obligation of the City and shall be entitled to the benefits and i5 4164-5400-6866.4 security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such replacement Bond is delivered. Section 3.10 Book-Entry Only Svstem. (a) Notwithstanding any other provision hereof, upon initial issuance of the Bonds, the ownership of the Bonds shall be registered in the name of Cede & Co., as nominee of DTC. The definitive Bonds shall be initially issued in the form of a single separate ft�lly registered certificate for each of the maturities thereof. (b) With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the City and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant or any other person, other than an Owner, as shown on the Register, of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than a Bondholder, as shown in the Register of any amount with respect to principal of, premium, if any, or interest on the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, the City and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each Bond is registered in the Register as the absolute owner of such E3ond for the purpose of payment of principal of, premium, if any, and interest on such Bonds, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfer with respect to such Bond, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of, premium, if any, and interest on the Bonds only to or upon the order of the respective owners, as shown in the Register as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner, as shown in the Register, shall receive a certificate evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the word "Cede & Co." in this Ordinance shall refer to such new nominee of DTC. (c) An Authorized Officer is authorized and directed to execute and deliver the Representation Letter applicable to the City's obligations (including the Bonds) delivered in book- entry only form to DTC as securities depository for the Bonds. Section 3.11 Successor Securities Depositorv; Transfer Outside Book-Entry Only Svstem. In the event that the City or the Paying Agent/Registrar determines that DTC is incapable of discharging its responsibilities described herein and in the Representation Letter of the City to DTC, or in the event DTC discontinues the services described herein, the City or the Paying 16 4164-5400-6866.4 Agent/Registrar shall (i) appoint a successor securities depository, qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the appointment of such successor securities depository and transfer one or more separate Bonds to such successor securities depository or (ii) notify DTC and DTC Participants of the availability through DTC of Bonds and transfer one or more separate Bonds to DTC Participants having Bonds credited to their DTC accounts. In such event, the Bonds shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Bonds shall designate, in accordance with the provisions of this Ordinance. Section 3.12 Pavments to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary, so long as any k3onds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on such Bonds, and all notices with respect to such Bonds, shall be made and given, respectively, in the manner provided in the Representation Letter. ARTICLE IV REDEMPTION OF BONDS BEFORE MATURITY Section 4.01 Limitation on Redemption. The Bonds shall be subject to redemption before scheduled maturity only as provided in this Article IV and in the Pricing Certificate. Section 4.02 Mandatory Sinkin� Fund Redemption. Bonds designated as "Term Bonds," if any, in the Pricing Certificate are subject to scheduled mandatory redemption and will be redeemed by the City at the price(s), on the date(s), and in the respective principal amounts set forth in the Pricing Certificate out of moneys available for such purpose in the Bond Fund, in the manner provided in the Form of Bond attached hereto as Exhibit C, with such changes as are required by the Pricing Certificate. Section 4.03 Optional Redemption. (a) The City reserves the option to redeem Bonds on the terms and in the manner provided in the Form of Bond attached hereto as Exhibit C, with such changes as are required by the Pricing Certificate. (b) Except as otherwise provided in a Pricing Certificate, if less than all of the Bonds are to be redeemed pursuant to an optional redemption, the City shall determine the maturity or maturities and the amounts thereof to be redeemed and shall direct the Paying AgendRegistrar to call by lot, or by any other customary method that results in a random selection, the Bonds, or portions thereof, within such maturity or maturities and in such principal amounts for redemption. 17 4164-5400-6866 4 (c) The City, at least forty-five (45) days before the redemption date, unless a shorter period shall be satisfactory to the Paying Agent/Registrar, shall notify the Paying Agent/Registrar of such redemption date and of the principal amount of Bonds to be redeemed. Section 4.04 Partial Redemption. (a) Except as otherwise provided in a Pricing Certificate, a portion of a single Bond of a denomination greater than $5,000 may be redeemed, but only in a principal amount equal to $5,000 or any integral multiple thereo£ If such a Bond is to be partially redeemed, the Paying AgenURegistrar shall treat each $5,000 portion of the Bond as though it were a single Bond for purposes of selection for redemption. (b) Upon surrender of any Bond for redemption in part, the Paying Agent/Registrar, in accordance with Section 3.06 of this Ordinance, shall authenticate and deliver an exchange Bond or gonds in an aggregate principal amount equal to the unredeemed portion of the Bond so surrendered, such exchange being without charge. (c) The Paying Agent/Registrar shall promptly notify the City in writing of the principal amount to be redeemed of any Bond as to which only a portion thereof is to be redeemed. Section 4.05 Notice of Redemption to Owners. (a) The Paying Agent/Registrar shall give notice of any redemption of Bonds by sending notice by United States mail, first class postage prepaid, not less than thirty (30) days before the date fixed for redemption, to the Owner of each Bond (or part thereo� to be redeemed, at the address shown on the Register at the close of business on the Business Day next preceding the date of mailing such notice. (b) The notice shall state the redemption date, the redemption price, the place at which the Bonds are to be surrendered for payment, and, if less than all the Bonds outstanding are to be redeemed, an identification of the Bonds or portions thereof to be redeemed. (c) The City reserves the right to give notice of its election or direction to redeem Bonds under Section 4.03 conditioned upon the occurrence of subsequent events. Such notice may state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption date or (ii) that the City retains the right to rescind such notice at any time prior to the scheduled redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar instructing the Paying AgendRegistrar to rescind the redemption notice, and such notice and redemption shall be of no effect if such moneys and/or authorized securities are not so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice of redemption to the affected Owners. Any Bonds subject to conditional redemption where redemption has been rescinded shall remain Outstanding, and the rescission shall not constitute an event of default. Further, in the case of a conditional redemption, the failure of the City to make moneys and/or authorized securities available in part or in whole on or before the redemption date shall not constitute an event of default. 18 4164-5400-6866.4 (d) Any notice given as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Owner receives such notice. Section 4.06 Pavment Upon Redemption. (a) Before or on each redemption date, the City shall deposit with the Paying Agent/Registrar money sufficient to pay all amounts due on the redemption date and the Paying Agent/Registrar shall make provision for the payment of the Bonds to be redeemed on such date by setting aside and holding in trust such amounts as are received by the Paying Agent/Registrar from the City and shall use such funds solely for the purpose of paying the principal of and accrued interest on the Bonds being redeemed. (b) Upon presentation and surrender of any Bond called for redemption at the Designated Payment/Transfer Office on or after the date fixed for redemption, the Paying Agent/Registrar shall pay the principal of and accrued interest on such Bond to the date of redemption from the money set aside for such purpose. Section 4.07 Effect of Redemption. (a) Notice of redemption having been given as provided in Section 4.05 of this Ordinance and subject to any conditions or rights reserved by the City under Section 4.05(c), the Bonds or portions thereof called for redemption shall become due and payable on the date fixed for redemption and, unless the City defaults in its obligation to make provision for the payment of the principal thereof, or accrued interest thereon, such Bonds or portions thereof shall cease to bear interest from and after the date fixed for redemption, whether or not such Bonds are presented and surrendered for payment on such date. (b) If the City shall fail to make provision for payment of all sums due on a redemption date, then any Bond or portion thereof called for redemption shall remain Outstanding and continue to bear interest at the rate stated on the Bond until due provision is made for the payment of same by the City. Section 4.08 Lapse of Pavment. Money set aside for the redemption of Bonds and remaining unclaimed by the Owners of such Bonds shall be subject to the provisions of Section 3.03(� hereof. ARTICLE V PAYING AGENT/REGISTRAR Section 5.01 Appointment of Pavin� e� isg trar. The form of Paying Agent/Registrar Agreement presented at the meeting at which this Ordinance was approved and the appointment of the Paying Agent/Registrar identified therein are hereby approved. The Mayor is hereby authorized and directed to execute the Paying Agent/Registrar Agreement with the Paying Agent/Registrar, specifying the duties and responsibilities of the City 19 4164-5400-6866.4 and the Paying Agent/Registrar, in substantially the form presented at the meeting at which this Ordinance was approved with such changes as may be approved by an Authorized Officer. The signature of the Mayor shall be attested by the City Secretary. Section 5.02 4ualifications. Each Paying Agent/Registrar shall be a commercial bank, a trust company organized under the laws of the State of Texas, or any other entity duly qualified and legally authorized to serve as and perform the duties and services of paying agent and registrar for the Bonds. Section 5.03 Maintainin�vin�gent/Registrar. (a) At all times while any Bonds are Outstanding, the City will maintain a Paying Agent/Registrar that is qualified under Section 5.02 of this Ordinance. (b) If the Paying AgendRegistrar resigns or otherwise ceases to serve as such, the City will promptly appoint a replacement. Section 5.04 Termination. The City, upon not less than sixty (60) days' notice, reserves the right to terminate the appointment of any Paying AgendRegistrar by delivering to the entity whose appointment is to be terminated written notice of such termination. Section 5.05 Notice of Chan�e to Owners. Promptly upon each change in the entity serving as Paying Agent/Registrar, the City will cause notice of the change to be sent to each Owner by United States mail, first class postage prepaid, at the address in the Register thereof, stating the effective date of the change and the name and mailing address of the replacement Paying Agent/Registrar. Section 5.06 Agreement to Perform Duties and Functions. By accepting the appointment as Paying Agent/Registrar and executing the Paying AgendRegistrar Agreement, the Paying Agent/Registrar is deemed to have agreed to the provisions of this Ordinance and that it will perform the duties and functions of Paying Agent/Registrar prescribed thereby. Section 5.07 Deliver�of Records to Successor. If a Paying Agent/Registrar is replaced, such Paying Agent/Registrar, promptly upon the appointment of the successor, will deliver the Register (or a copy thereo� and all other pertinent books and records relating to the Bonds to the successor Paying Agent/Registrar. 20 4164-5400-6866 4 ARTICLE VI FORM OF THE BONDS Section 6.01 Form Generallv. (a) The Bonds, including the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Certificate of the Paying Agent/Registrar, and the Assignment form to appear on each of the Bonds, (i) shall be generally in the form set forth in Exhibit C hereto, with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance and the Pricing Certificate, and (ii) may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association, referred to herein as "CUSIP numbers") and such legends and endorsements (including any reproduction of an opinion of counsel) thereon as, consistently herewith, may be determined by the City or by the officers executing such Bonds, as evidenced by their execution thereof. (b) Any portion of the text of any Bonds may be set forth on the reverse side thereof, with an appropriate reference thereto on the face of the Bonds. (c) The definitive Bonds shall be typewritten, photocopied, printed, lithographed, or engraved, and may be produced by any combination of these methods or produced in any other similar manner, all as determined by the officers executing such Bonds, as evidenced by their execution thereof. (d) The Initial Bond submitted to the Attorney General of the State of Texas may be typewritten and photocopied or otherwise reproduced. Section 6.02 CUSIP Registration. The City or the Purchaser may secure CUSIP numbers or other identification numbers for the Bonds, and may authorize the printing of such numbers on the face of the Bonds. It is expressly provided, however, that the presence or absence of identification numbers on the Bonds shall be of no significance or effect regarding the legality thereof and neither the City nor the attorneys approving said Bonds as to legality are to be held responsible for identification numbers incorrectly printed on the Bonds. Section 6.03 Le a��nion. The approving legal opinion of Orrick, Herrington & Sutcliffe LLP, Austin, Texas, Bond Counsel to the City ("Bond Counsel"), may be attached to or printed on the reverse side of each Bond over the certification of the City Secretary of the City, which may be executed in facsimile. Section 6.04 Statement of Insurance. A statement relating to a municipal bond insurance policy, if any, issued for any Bond or Bonds may be printed on or attached to each such Bond. 21 4164-5400-6866 4 ARTICLE VII FUNDS AND ACCOUNTS Section 7.01 Se�gation of Revenues; Fund Des�nations. All receipts, revenues and income derived from the operation and ownership of the System shall be kept separate from other funds of the City and deposited within twenty-four (24) hours after collection into the "Water and Wastewater System Fund" (hereinafter referred to as the "System Fund") which has been created and established on the books of the City. The System Fund shall continue to be kept and maintained at an official depository bank of the City while the Parity Obligations (including the Bonds) remain Outstanding. Furthermore, the City affirms that the following special funds have been created and established and such funds shall continue to be maintained by the City while any Parity Obligations (including the Bonds) remain Outstanding: the "Special Water and Wastewater System Revenue Bond Fund" (hereinafter referred to as the "Bond Fund"), the "Special Water and Wastewater System Revenue Bond General Reserve Fund" (hereinafter referred to as the "General Reserve Fund") and the "Special Water and Wastewater System Revenue Bond TWDB Reserve Fund" (herein after referred to as the "TWDB Reserve Fund" and, together with the General Reserve Fund, the "Reserve Funds"). The Bond Fund, the General Reserve Fund and the TWDB Reserve Fund shall continue to be kept and maintained at the City's official depository bank, and moneys deposited therein shall be used for no purpose other than for the payment, redemption and retirement of Parity Obligations, as herein provided. The City may provide for the creation of any special Accounts deemed necessary or appropriate for the efficient administration of the System and payment of Parity Obligations. Section 7.02 Svstem Fund. The City hereby covenants and agrees with the owners of the Bonds that the moneys deposited in the System Fund shall be used first for the payment of the reasonable and proper expenses of operating and maintaining the System. All moneys deposited in the System Fund in excess of the amounts required to pay operating and maintenance expenses of the System shall be applied and appropriated, to the extent required and in the order of priority prescribed, as follows: First: To the payment of the amounts required to be deposited in the Bond Fund for the payment of Parity Obligations, including the principal of and interest on the Parity Bonds as the same become due and payable; Second: To the payment, equally and ratably, of the amounts required to be deposited in the Reserve Funds to accumulate, restore and maintain the amounts required to be deposited therein; Third: To the payment of Subordinate Obligations, including the payment of amounts required to maintain any special funds created to secure payment of Subordinate Obligations; and Fourth: For any other purpose of the City now or hereafter permitted by law. 22 4164-5400-6866 4 Section 7.03 Bond Fund. The City hereby agrees and covenants to deposit to the Bond Fund an amount equal to one hundred percent (100%) of the amount required to fully pay all Parity Obligations as such payments mature and become due, including the amount required to pay the principal of and interest on the Bonds on or before each maturity date and Interest Payment Date therefor, such payments to be made in substantially equal monthly installments on or before the first day of each month beginning on or before the first day of the month next following the month the Bonds are delivered to the Purchasers. The required monthly deposits to the Bond Fund for the payment of principal of and interest on the Bonds shall continue to be made as hereinabove provided until such time as (i) the total amount on deposit in the Bond Fund, together with the amount deposited in the Reserve Funds, is equal to the amount required to fully pay and discharge all Outstanding Parity Obligations, including Parity Bonds (principal and interest), or (ii) the Bonds are no longer Outstanding. Accrued interest, if any, received from the purchasers of the Bonds shall be deposited in the Bond Fund, and shall be taken into consideration and reduce the amount of the monthly deposits hereinabove required which would otherwise be required to be deposited in the Bond Fund from the Net Revenues of the System. Section 7.04 General Reserve Fund. (a) The City covenants and agrees to accumulate and maintain Reserve Fund Obligations in the General Reserve Fund equal to not less than the General Reserve Fund Requirement which shall be calculated and predetermined at the time of issuance of each series or installment of Covered Parity Bonds. Upon issuance of Additional Bonds designated as Covered Parity Bonds, the General Reserve Fund Requirement shall be increased, if required, to an amount equal to the General Reserve Fund Requirement after taking into account such Additional Bonds. The General Reserve Fund shall be made available for and reasonably employed to pay principal of and interest on Covered Parity Bonds in the event that amounts in the Bond Fund are insufficient for such purpose. If any amount of the General Reserve Fund is employed to pay principal of or interest on Covered Parity Bonds and, after disbursement of such amounts for such purpose, the amount on deposit in the General Reserve Fund is less than the General Reserve Fund Requirement, or if an event of default under any Credit Facility held in the General Reserve Fund has occurred and is continuing, the General Reserve Fund Requirement shall be restored from Net Revenues in twenty-four (24) approximately equal monthly payments from the first available Net Revenues in the System Fund, subject only to (and in accordance with) the priority of payments hereinabove prescribed in Section. 7.02. (b) The City may, at its option, withdraw all surplus on deposit in the General Reserve Fund over the General Reserve Fund Requirement and deposit the same in the System Fund; provided, however, that to the extent such surplus monies constitute bond proceeds, including interest and income derived therefrom, such amounts shall not be deposited to the System Fund and shall only be used for the purposes for which bond proceeds may be used. (c) For the purpose of determining compliance with the requirements of subsections (a) and (b) of this Section 7.04, Reserve Fund Obligations shall be valued each year as of the last day of the Fiscal Year at their market value, except that any direct obligations of the United States 23 4164-5400-6866.4 (State and Local Government Series) held for the benefit of the Reserve Fund in book-entry form shall be continuously valued at their par value or face principal amount. (d) To the extent permitted by and in accordance with applicable law, the City may replace or substitute a Credit Facility for cash or investment securities on deposit in the General Reserve Fund or in substitution or replacement of any existing Credit Facility. Upon such replacement or substitution, cash or investment securities of any of the types permitted by Section 7.09 hereof on deposit in the General Reserve Fund, which (taken together with the face amount of any existing Credit Facilities) are in excess of the General Reserve Fund Requirement may be withdrawn by the City, at its option, and transferred to the System Fund; provided that the face amount of any Credit Facility may be reduced at the option of the City in lieu of such transfer. However, to the extent such surplus monies constitute bond proceeds, including interest and income derived therefrom, such amounts shall not be deposited to the System Fund and shall only be used for the purposes for which bond proceeds may be used. (e) If the City is required to make a withdrawal from the General Reserve Fund, the City shall promptly notify the issuer of any Credit Facility of the necessity for a withdrawal from the General Reserve Fund, and shall make such withdrawal first from available moneys or investment securities then on deposit in the General Reserve Fund, and next from a drawing under any Credit Facility to the extent of such deficiency. (� In the event of a deficiency in the General Reserve Fund (including a deficiency resulting in whole or in part from termination or expiration of a Credit Facility or an event of default under a Credit Facility), the City shall restore such deficiency from the first available Net Revenues of the System in the System Fund, subject only to (and in accordance with) the priority of payments hereinabove prescribed in Section 7.02, in twenty-four (24) approximately equal monthly payments. (g) In the event of the redemption or defeasance of any of the Outstanding Covered Parity Bonds, any Reserve Fund Obligations on deposit in the General Reserve Fund in excess of the General Reserve Fund Requirement may be withdrawn and transferred, at the option of the City and subject to the last sentence of this subparagraph (g), to the System Fund, as a result of (i) the redemption of the Outstanding Covered Parity Bonds, or (ii) funds for the payment of the Outstanding Covered Parity Bonds having been deposited irrevocably with the paying agent or place of payment therefor in the manner described in this Ordinance, the result of such deposit being that such Covered Parity Bonds no longer are deemed to be Outstanding under the terms of this Ordinance. However, to the extent such surplus monies constitute bond proceeds, including interest and income derived therefrom, such amounts shall not be deposited to the System Fund and shall only be used for the purposes for which bond proceeds may be used. (h) In the event there is a draw upon a Credit Facility, the City shall reimburse the issuer of such Credit Facility for such draw in accordance with the terms of any agreement pursuant to which the Credit Facility is issued from Net Revenues; however, such reimbursement from Net Revenues shall be (i) subject to the provisions of subparagraph (� hereof, and (ii) subordinate and junior in right of payment to the payment of principal of and premium, if any, and interest on the Parity Bonds. Any interest due on any reimbursement obligation under the Credit Facility shall not exceed the highest lawful rate of interest which may be paid by the City. 4164-5400-6866.4 24 (i) Notwithstanding anything to the contrary contained in this Ordinance, the requirement set forth above in this Section 7.04 to maintain the General Reserve Fund shall be suspended for such time as the Net Revenues for each Fiscal Year are equal to at least 1.25 times the maximum annual debt service requirements of all Outstanding Parity Bonds. In the event that the Net Revenues for any Fiscal Year are less than 1.25 times the maximum annual debt service requirements of all Outstanding Parity Bonds, the City will be required to commence making deposits to the General Reserve Fund, as provided in subsection (� above, and to continue such deposits until the earlier of (i) such time as the General Reserve Fund contains the General Reserve Fund Requirement or (ii) the end of any period of two consecutive Fiscal Years during which Net Revenues were equal to not less than 1.25 times the maximum annual debt service requirements of all Outstanding Parity Bonds. During such time as the obligation to maintain the General Reserve Fund Requirement in the General Reserve Fund has been suspended pursuant to this subsection (i), the City may, at its option, withdraw all monies from the General Reserve Fund and deposit such surplus in the System Fund; provided, however, to the extent such monies constitute bond proceeds, including interest and income derived therefrom, such amounts shall not be deposited to the System Fund and shall only be used for the purposes for which bond proceeds may be used. Section 7.05 TWDB Reserve Fund. (a) The City covenants and agrees to accumulate and maintain Reserve Fund Obligations in the TWDB Reserve Fund equal to not less than the TWDB Reserve Fund Requirement which shall be calculated and predetermined at the time of issuance of each series or installment of TWDB Bonds. The City covenants and agrees that the TWDB Reserve Fund Requirement in connection with the issuance of each series of TWDB Bonds shall be accumulated in equal monthly installments over the initial sixty (60) months following the initial delivery of such series of TWDB Bonds. Upon issuance of Additional Bonds designated as TWDB Bonds, the TWDB Reserve Fund Requirement shall be increased, if required, to an amount equal to the TWDB Reserve Fund Requirement after taking into account such Additional Bonds. The TWDB Reserve Fund shall be made available for and reasonably employed to pay principal of and interest on TWDB Bonds in the event that amounts in the Bond Fund are insufficient for such purpose. If any amount of the TWDB Reserve Fund is employed to pay principal of or interest on TWDB Bonds and, after disbursement of such amounts for such purpose, the amount on deposit in the TWDB Reserve Fund is less than the TWDB Reserve Fund Requirement, or if an event of default under any Credit Facility held in the TWDB Reserve Fund has occurred and is continuing, the TWDB Reserve Fund Requirement shall be restored from Net Revenues in twenty-four (24) approximately equal monthly payments from the first available Net Revenues in the System Fund, subject only to (and in accordance with) the priority of payments hereinabove prescribed in Section 7.02. (b) The City may, at its option, withdraw all surplus on deposit in the TWDB Reserve Fund over the TWDB Reserve Fund Requirement and deposit the same in the System Fund; provided, however, that to the extent such surplus monies constitute bond proceeds, including interest and income derived therefrom, such amounts shall not be deposited to the System Fund and shall only be used for the purposes for which bond proceeds may be used. 25 4164-5400-6866.4 (c) For the purpose of determining compliance with the requirements of subsections (a) and (b) of this Section 7.05, Reserve Fund Obligations shall be valued each year as of the last day of the Fiscal Year at their market value, except that any direct obligations of the United States (State and Local Government Series) held for the benefit of the Reserve Fund in book-entry form shall be continuously valued at their par value or face principal amount. (d) To the extent permitted by and in accordance with applicable law, the City may replace or substitute a Credit Facility for cash or investment securities on deposit in the TWDB Reserve Fund or in substitution or replacement of any existing Credit Facility. Upon such replacement or substitution, cash or investment securities of any of the types permitted by Section 7.09 hereof on deposit in the TWDB Reserve Fund, which (taken together with the face amount of any existing Credit Facilities) are in excess of the TWDB Reserve Fund Requirement may be withdrawn by the City, at its option, and transferred to the System Fund; provided that the face amount of any Credit Facility may be reduced at the option of the City in lieu of such transfer. However, to the extent such surplus monies constitute bond proceeds, including interest and income derived therefrom, such amounts shall not be deposited to the System Fund and shall only be used for the purposes for which bond proceeds may be used. (e) If the City is required to make a withdrawal from the TWDQ Reserve Fund, the City shall promptly notify the issuer of any Credit Facility of the necessity for a withdrawal from the TWDB Reserve Fund, and shall make such withdrawal first from available moneys or investment securities then on deposit in the TWDB Reserve Fund, and next from a drawing under any Credit Facility to the extent of such deficiency. (� In the event of a deficiency in the TWDB Reserve Fund (including a defciency resulting in whole or in part from termination or expiration of a Credit Facility or an event of default under a Credit Facility), the City shall restore such deficiency from the first available Net Revenues of the System in the System Fund, subject only to (and in accordance with) the priority of payments hereinabove prescribed in Section 7.02, in twenty-four (24) approximately equal monthly payments. (g) In the event of the redemption or defeasance of any of the Outstanding TWDB Bonds, any Reserve Fund Obligations on deposit in the TWDB Reserve Fund in excess of the TWDB Reserve Fund Requirement may be withdrawn and transferred, at the option of the City and subject to the last sentence of this subparagraph (g), to the System Fund, as a result of (i) the redemption of the Outstanding TWDB Bonds, or (ii) funds for the payment of the Outstanding TWDB Bonds having been deposited irrevocably with the paying agent or place of payment therefor in the manner described in this Ordinance, the result of such deposit being that such TWDB Bonds no longer are deemed to be Outstanding under the terms of this Ordinance. However, to the extent such surplus monies constitute bond proceeds, including interest and income derived therefrom, such amounts shall not be deposited to the System Fund and shall only be used for the purposes for which bond proceeds may be used. (h) In the event there is a draw upon a Credit Facility, the City shall reimburse the issuer of such Credit Facility for such draw in accordance with the terms of any agreement pursuant to which the Credit Facility is issued from Net Revenues; however, such reimbursement from Net Revenues shall be (i) subject to the provisions of subparagraph (� hereof, and (ii) subordinate and 4164-5400-6866 4 26 junior in right of payment to the payment of principal of and premium, if any, and interest on the Parity Bonds. Any interest due on any reimbursement obligation under the Credit Facility shall not exceed the highest lawful rate of interest which may be paid by the City. Section 7.06 Reserved. Section 7.07 Pavment of Bonds. While any of the Bonds are Outstanding, the proper officers of the City are hereby authorized to transfer or cause to be transferred to the Paying Agent/Registrar, from funds on deposit in the Bond Fund and, if necessary, the Reserve Fund amounts sufficient to fully pay and discharge promptly each installment of interest and principal on the Bonds as such installments mature and come due; such transfer of funds to be made in such manner as will cause immediately available funds to be deposited with the Paying Agent/Registrar for the Bonds at the close of the Business Day next preceding the date of payment for the Bonds. Section 7.08 Deficiencies in Funds. If in any month the City shall, for any reason, fail to pay into any Fund the full amounts above stipulated, amounts equivalent to such deficiencies shall be set apart and paid into such Fund from the first available and unallocated Net Revenues of the System, subject to the priority of payments prescribed in Section 7.02, in the following month or months and such payments shall be in addition to the amounts hereinabove provided to be otherwise paid into such Fund during such month or months. Section 7.09 Securitv and Investment of Funds. (a) All Funds and Accounts shall be secured in the manner and to the fullest extent required by law for the security of public funds, including Chapter 2257, Texas Government Code, as amended, and the funds created by the Ordinance shall be used only for the purposes therein specified. (b) Money in any Fund or Account established or affirmed pursuant to this Ordinance or any ordinance authorizing the issuance of Parity Obligations, may, at the option of the City, be invested in time deposits or certificates of deposit secured in the manner required by law for public funds, or be invested in direct obligations of, including obligations the principal and interest on which are unconditionally guaranteed by, the United States of America, in obligations of any agencies or instrumentalities thereof, or in such other investments as are permitted under the Public Funds Investment Act, Chapter 2256, Texas Government Code, as amended, or any successor law, as in effect from time to time, consistent with the City's investment policy; provided that all such deposits and investments shall be made in such manner (which may include repurchase agreements for such investment with any primary dealer of such agreements) that the money required to be expended from any such Fund will be available at the proper time or times. Such investments shall be valued each year in terms of current market value as of the last day of the Fiscal Year. For purposes of maximizing investment returns, to the extent permitted by law, money in such Funds may be invested in common investments of the kind described above, or in a common pool of such investment which shall be kept and held at an official depository bank, which shall not be deemed to be or constitute a commingling of such money or funds provided that safekeeping receipts or 27 4164-5400-6866.4 certificates of participation clearly evidencing the investment or investment pool in which such money is invested and the share thereof purchased with such money or owned by such fund are held by or on behalf of each such Fund. If necessary, such investments shall be promptly sold to prevent any default. Any investment made with money deposited to the credit of a Reserve Fund shall not have a maturity in excess of five (5) years. Section 7.10 Excess Revenues. All revenues of the System in excess of those required to establish and maintain the Bond Fund and the Reserve Funds as required herein may be used for any proper City purpose now or hereafter permitted by law including, without limitation, pledging any excess revenues in support of Subordinate Obligations. ARTICLE VIII SALE AND DELIVERY OF BONDS; DEPOSIT OF PROCEEDS Section 8.01 Sale of Bonds; Official Statement. (a) The Bonds shall be sold in accordance with the terms of this Ordinance, including this Section 8.01(a) and Exhibit B hereto, provided that all of the conditions set forth in Exhibit B can be satisfied. As authorized by Chapter 1207 and Chapter 1371, the Authorized Officer is authorized to act on behalf of the City upon determining that the conditions set forth in Exhibit B can be satisfied, in selling and delivering each series of Bonds and carrying out the other procedures specified in this Ordinance, including determining (i) the manner of sale (which may be by private placement, public, private, negotiated or competitive sale, limited or public offering or any combination thereo�, (ii) the total aggregate principal amount and the number of series of the Bonds, (iii) the date(s) on which the Bonds of each series will be sold and delivered, (iv) whether to acquire bond insurance for each series of Bonds, (v) the amount of capitalized interest, if any, (vi) the amount and manner of funding the General Reserve Fund Requirement, if necessary, (vii) the price at which the Bonds of each series will be sold, (viii) the Refunding Candidates to be refunded and their redemption dates, (ix) the title, designation and/or number for each series of Bonds, (x) whether particular Bonds will be issued as Tax-Exempt Bonds or Taxable Bonds, (xi) the form in which the Bonds of each series shall be issued, (xii) the dates on which the Bonds of each series will mature, the principal amount to mature in each year, the rate of interest to be borne by each such maturity, the interest payment dates, and the initial date from which interest will accrue, (xiii) the dates, prices and other terms upon and at which the Bonds of each series shall be subject to redemption or tender prior to maturity (including terms for optional and mandatory sinking fund redemption), and (xiv) all other terms and provisions of the Bonds and the refunding of the Refunded Obligations and all other matters relating to the issuance, sale and delivery thereof and the refunding of the Refunded Obligations, all of which shall be specified in the Pricing Certificate for each series of Bonds. The Authorized Officer may approve modifications to this Ordinance to conform to the terms of the Bonds, as approved by the Authorized Officer, and execute any instruments, agreements and other documents as the Authorized Officer shall deem necessary or appropriate in connection with the issuance, sale and delivery of Bonds and the refunding of the Refunded Obligations pursuant to this Ordinance. 28 4164-5400-6866.4 The authority granted to the Authorized Officer under this Section 8.01(a) shall expire at 11:59 p.m. on the first anniversary of the date of adoption of this Ordinance (the "Expiration Date"), unless otherwise extended by the City Council by separate action. Bonds sold pursuant to a Purchase Contract (in the case of a private placement or negotiated sale) or winning bid (in the case of a competitive offering) executed on or before the Expiration Date may be delivered after such date. In satisfaction of Section 1201.022(a)(3), Texas Government Code, the City Council hereby determines that the delegation of the authority to the Authorized Officer to approve the final terms and conditions of each series of the Bonds as set forth in this Ordinance is, and the decisions made by the Authorized Officer pursuant to such delegated authority and incorporated in a Pricing Certificate will be, in the best interests of the City and shall have the same force and effect as if such determination were made by the City Council, and the Authorized Officer is hereby authorized to make and include in a Pricing Certificate an appropriate finding to that effect. Any finding or determination made by the Authorized Officer relating to the issuance and sale of the Bonds and the execution of the Purchase Contract in connection therewith shall have the same force and effect as a finding or determination made by the City Council. (b) An Authorized Offcer is hereby authorized and directed to execute and deliver the Purchase Contract (in the case of a private placement or negotiated sale) or the winning bid (in the case of a competitive offering) in the form and on the terms approved by the Authorized Officer, and all other officers, agents and representatives of the City are hereby authorized to do any and all things necessary or desirable to satisfy the conditions set out therein and to provide for the issuance and delivery of the Bonds. (c) The form and substance of a Preliminary Official Statement, and any addenda, supplement or amendment thereto, prepared for use in connection with the public offering and sale of each series of Bonds is hereby approved, with such appropriate variations in the form of any Preliminary Official Statement previously prepared, as shall be approved by the Authorized Officer, and such Preliminary Official Statement is hereby deemed final as of its date within the meaning and for the purposes of paragraph (b)(1) of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended. The Authorized Officer is hereby authorized and directed to cause to be prepared a final Official Statement (the "Official Statement") incorporating applicable pricing information and other terms pertaining to each series of Bonds, and to execute the same by manual or facsimile signature and deliver appropriate numbers of executed copies thereof to the Purchasers. The Official Statement as thus approved, executed and delivered, with such appropriate variations as shall be approved by the Authorized Ofiicer and the Purchasers, may be used by the Purchasers in the public offering and sale of the Bonds. The use and distribution of the Preliminary Official Statement, and the preliminary public offering of the Bonds by the Purchasers, is hereby approved and confirmed. In the event the Bonds are sold pursuant to a competitive sale, the Authorized Officer is hereby authorized to approve the preparation and distribution of a notice of sale. (d) All officers of the City are authorized to execute such documents, certificates, receipts and other instruments as they may deem appropriate in order to consummate the delivery of the Bonds in accordance with the terms of sale therefor including, without limitation, the Purchase Contract. 29 4164-5400-6866.4 The obligation of the Purchasers to accept delivery of the Bonds is subject to the closing conditions set forth in the Purchase Contract, including specifically the Purchasers being furnished with the final, approving opinion of Bond Counsel, which opinion shall be dated as of and delivered on the Closing Date. Section 8.02 Control and Delivery of Bonds. (a) An Authorized Officer of the City is hereby authorized to have control of the Initial Bond and all necessary records and proceedings pertaining thereto pending investigation, examination, and approval of the Attorney General of the State of Texas, registration by the Comptroller of Public Accounts of the State of Texas and registration with, and initial exchange or transfer by, the Paying AgenURegistrar. (b) After registration by the Comptroller of Public Accounts, delivery of the Bonds shall be made to the Purchasers under and subject to the general supervision and direction of the Authorized Officer, against receipt by the City of all amounts due to the City under the terms of sale. (c) In the event the Mayor or City Secretary is absent or otherwise unable to execute any document or take any action authorized herein, the Mayor Pro Tem and the Assistant City Secretary, respectively, shall be authorized to execute such documents and take such actions, and the performance of such duties by the Mayor Pro Tem and the Assistant City Secretary shall for the purposes of this Ordinance have the same force and effect as if such duties were performed by the Mayor and City Secretary, respectively. Section 8.03 Deposit of Proceeds. Proceeds from the sale of the Bonds shall be applied in accordance with the provisions set forth in the Pricing Certificate for such Bonds, which may provide for the creation of any special accounts deemed necessary or appropriate by the Authorized Officer. In addition, in furtherance of the authority conferred by this Ordinance, any Authorized Officer may direct that lawfully available funds of the City be applied (in such amounts as the Authorized Officer shall direct), deposited and invested to effect the purposes of the Bonds and this Ordinance. ARTICLE IX ADDITIONAL BONDS Section 9.01 Issuance of Additional Bonds. (a) In addition to the right to issue obligations of inferior lien as authorized by the laws of the State of Texas, the City hereby reserves the right to issue Additional Bonds which, when duly authorized and issued in compliance with the terms and conditions hereinafter appearing, shall be on a parity with the Parity Obligations herein authorized (including the I3onds), payable from and equally and ratably secured by a first lien on and pledge of the Net Revenues of the System. The Additional Bonds may be issued in one or more series or installments, provided, however, that none shall be issued unless and until the following conditions have been met: 30 4164-5400-6866.4 (i) The City is not then in default as to any covenant, condition or obligation prescribed by any ordinance authorizing the issuance of Parity Obligations then Outstanding; (ii) Each of the special Funds created for the payment and security of the Parity Obligations contains the amount of money and investments then required to be on deposit therein; (iii) With respect to Covered Parity Bonds, the General Reserve Fund Requirement shall be accumulated and supplemented as necessary to maintain therein the General Reserve Fund Requirement (unless the obligation to maintain the General Reserve Fund Requirement is suspended pursuant to subsection 7.04(i)) and, with respect to TWDB Bonds, the TWDB Reserve Fund Requirement shall be accumulated and supplemented as necessary to maintain therein the TWDB Reserve Fund Requirement; the ordinance authorizing the issuance of the Additional Bonds shall provide for any required increase in the General Reserve Fund or the TWDB Reserve Fund, as applicable, and (if supplementation is necessary to meet all conditions of said Reserve Funds) said ordinance shall make provision that same be supplemented by the required amounts in equal monthly installments from the date of delivery of such Additional Bonds, as provided by this Ordinance; (iv) The Chief Financial Officer shall provide a certificate to the effect that, according to the books and records of the City, during the last completed Fiscal Year, or during any consecutive twelve (12) month period of the last fifteen (15) months next preceding the date of delivery of the Additional gonds, the Net Revenues of the System were equal to at least 1.25 times the maximum annual debt service requirements of the Parity Bonds which will be outstanding upon the issuance of the Additional Bonds. In making a determination of the Net Revenues, the Chief Financial Officer may take into consideration a change in the charges for services afforded by the System that became effective at least 60 days prior to the last day of the period for which Revenues are determined and, for purposes of satisfying the above Net Revenues test, make a pro-forma determination of the Net Revenues of the System for the period of time covered by the certificate based on such change in charges being in effect for the entire period covered by the certificate of the Chief Financial Officer. When thus issued, such Additional Bonds may be secured by a pledge of the Net Revenues of the System on a parity in all things with the pledge securing the Parity Bonds. (b) Wherever, in this Ordinance, the City reserves the right to issue Additional Bonds, such term shall also include, mean and refer to any other forms or types of obligations which may be made lawfully payable from and secured by the same source of revenues of the City. (c) If Additional Bonds are being issued for the purpose of refunding less than all outstanding Parity 8onds, the certification described in subsection (a)(iv) of this Section is not required so long as the aggregate debt service requirements of such refunding Parity Bonds (or Parity Obligations) will not exceed the aggregate debt service requirements of the Parity Bonds being refunded. 31 4164-5400-6866.4 Section 9.02 Credit Facilities. Payments to be made under a Credit Facility may be treated as Parity Obligations if the governing body of the City makes a finding in the ordinance authorizing the execution and delivery of such Credit Facility that the obligations of the City incurred under the Credit Facility shall be treated as a Parity Obligation and that, based upon the findings contained in a certificate executed and delivered by the Chief Financial Officer, the City will have sufficient funds to meet the financial obligations of the System, including sufficient Net Revenues to satisfy the annual debt service requirements of the System and the fnancial obligations of the City relating to the System after giving effect to the treatment of the Credit Facility as a Parity Obligation. Section 9.03 Separatelv Financed Projects. The City expressly retains the right to issue or incur bonds, notes, or other obligations or evidences of indebtedness, other than Parity Obligations, for any project or purpose for goods or services other than the supply, storage, treatment and distribution of treated water for municipal, domestic, commercial, industrial and other uses and the collection and treatment of watered wastes, which presently are or hereafter may be authorized or permitted to be provided or maintained by water and wastewater systems generally or the City specifically under the laws of the State of Texas, federal law or the City's home rule charter; provided, that the bonds, notes or other obligations issued or incurred for any such separately financed project are payable from and secured by other available funds derived from the ownership or operation thereof or excess Net Revenues remaining after satisfying, or making provision for the satisfaction of, the priority of claims identified on such Net Revenues in Section 7.02 hereof and separate books and records for such separately financed project or activity are maintained by the City. ARTICLE X PARTICULAR REPRCSENTATIONS AND COVENANTS Section 10.01 Rates and Char�. The City shall, at all times while any of the Parity Obligations are outstanding and unpaid, maintain rates and collect charges for the facilities and services afforded by the Water and Wastewater System, as required by Section 1502.057, Texas Government Code, which will provide revenues sufficient at all times to: (a) pay all maintenance, operation, debt service, depreciation, replacement and betterment charges of the Water and Wastewater System; (b) pay the amounts required to be deposited to the Bond Fund to pay the principal of and interest on the Parity Bonds as the same becomes due and payable, to accumulate and maintain the reserve amount, if any, required to be deposited in the Reserve Fund, and to pay any other costs of Parity Obligations as the same becomes due and payable; (c) produce Net Revenues each year in an amount reasonably estimated to be not less than 1.25 times the maximum annual debt service requirements of the Parity Bonds from time to time outstanding; and 32 4164-5400-6866.4 (d) pay 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 10.02 Maintenance and Operation; Insurance. The City shall maintain the Water and Wastewater System in good condition and operate the same in an efficient manner and at reasonable cost. So long as any Parity Bonds are outstanding, 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 10.03 Records, Accounts, Accounting Reports. The City hereby covenants and agrees while any of the Bonds or any interest thereon remain Outstanding and unpaid, it will keep and maintain a proper and complete system of records and accounts pertaining to the operation of the System separate and apart from 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 Owner of any Bonds, or any duly authorized agent or agents of such Owner, shall have the right at all reasonable times to inspect all such records, accounts and data relating thereto and to inspect the System and all properties comprising the same. The City further agrees that as soon as possible following the close of each Fiscal Year, it will cause an audit of such books and accounts to be made by an independent firm of certified public accountants. Each such audit, in addition to whatever other matters may be thought proper by the certified public accountant, shall particularly include the following: (a) A detailed statement of the income and expenditures of the System for such Fiscal Year; (b) A balance sheet as of the end of such Fiscal Year; (c) The comments of such accountant regarding the manner in which the City has complied with the covenants and requirements of this Ordinance and his recommendations for any changes or improvements in the operation, records and accounts of the System; (d) A list of the insurance policies in force at the end of the Fiscal Year on the System properties, setting out as to each policy the amount thereof, the risk covered, the name of the insurer, and the policy's expiration date. Expenses incurred in making the audits above referred to are to be regarded as maintenance and operating expenses of the System and paid as such. Copies of the aforesaid annual audit shall be furnished upon written request to the original purchasers and any subsequent Owners of the Bonds. 33 4164-5400-6866.4 Section 10.04 Further Covenants. The City hereby further covenants and agrees as follows: (a) That it has the lawful power to pledge the Net Revenues to the payment of the Bonds and has lawfully exercised said power under the Constitution and laws of the State of Texas; that the Bonds, when issued, shall be equally and ratably secured by a first lien on and pledge of the Net Revenues pari passu with the lien securing payment of all other Parity Obligations in such manner that no Parity Obligation shall have preference or priority over the Bonds. (b) That, other than for the payment of Parity Obligations, the Net Revenues are and shall not in any manner be pledged to the payment of any debt or obligation of the City or of the System on a parity with the Bonds. (c) So far as it legally may, the City covenants and agrees, for the protection and security of the Parity Bonds and the holders thereof from time to time, that it will not grant a franchise for the operation of any competing system in the City until all Parity Bonds shall have been retired. (d) That, for so long as any of the Bonds or any interest thereon remain Outstanding, the City will not sell, lease or encumber the System or any substantial part thereof; provided, however, this covenant shall not be construed to prohibit the sale of such machinery, or other properties or equipment which has become obsolete or otherwise unsuited to the efficient operation of the System when other property of equal value has been substituted therefor, and, also, with the exception of the Additional Bonds expressly permitted by this Ordinance to be issued, it will not encumber the Net Revenues unless such encumbrance is made junior and subordinate to all of the provisions of this Ordinance. In the event the City sells the System, the City will use proceeds of such sale to provide for final payment of the Parity Obligations and any Additional Bonds. (e) That, it will cause to be rendered monthly to each customer receiving water and wastewater services a statement therefor and will not accept payment of less than all of any statement so rendered, using its power under existing ordinances and under all such ordinances to become effective in the future to enforce payment, to withhold service from such delinquent customers and to enforce and authorize reconnection charges. ( fl That it will faithfully and punctually perform all duties with respect to the System required by the Constitution and laws of the State of Texas, including the making. and collecting of reasonable and sufficient rates for services supplied by the System, and the segregation and application of the revenues of the System as required by the provisions of this Ordinance. (g) That no free service shall be provided by the System and to the extent the City or its departments or agencies utilize the services provided by the System, payment shall be made therefor at rates charged to others for similar service. (h) That it will faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions contained in this Ordinance; the City will promptly pay or cause to be paid the principal of, premium, if any, and interest on each Bond on the dates and at the places and 34 4164-5400-6866.4 manner prescribed in such Bond; and the City will, at the times and in the manner prescribed by this Ordinance, deposit or cause to be deposited the amounts of money specified by this Ordinance. Section 10.05 Covenants to Maintain Tax Exempt Status. (a) The City intends that the interest on the Tax-Exempt Bonds shall be excludable from gross income of the owners thereof for federal income tax purposes pursuant to Sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended (the "Code"), and all applicable temporary, proposed and final regulations (the "Regulations") and procedures promulgated thereunder and applicable to the Tax-Exempt Bonds: For this purpose, the City covenants that it will monitor and control the receipt, investment, expenditure and use of all gross proceeds of the Tax-Exempt Bonds (including all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with the proceeds of the Tax-Exempt Bonds) and take or omit to take such other and further actions as may be required by Sections 103 and 141 through 150 of the Code and the Regulations to cause interest on the Tax- Exempt Bonds to be and remain excludable from the gross income, as defined in Section 61 of the Code, of the owners of the Tax-Exempt Bonds for federal income tax purposes. Without limiting the generality of the foregoing, the City shall comply with each of the following covenants: (i) The City will use all of the proceeds of the Tax-Exempt Bonds to (i) provide funds for the purposes described in Section 3.01 hereof, and (ii) to pay the costs of issuing the Tax-Exempt Bonds. Other than as described in Section 3.01 hereof, the City will not use any portion of the proceeds of the Tax-Exempt Bonds to pay the principal of or interest or redemption premium on, any other obligation of the City or a related person. (ii) All property financed or refinanced with the proceeds of the Tax-Exempt Bonds will be owned and operated by the City. The City will not directly or indirectly take any action, or omit to take any action, which action or omission would cause the Tax- Exempt Bonds to constitute "private activity bonds" within the meaning of Section 141(a) of the Code. (iii) Principal of and interest on the Tax-Exempt Bonds will be paid solely from ad valorem taxes collected by the City and investment earnings on such collections. (iv) Based upon all facts and estimates now known or reasonably expected to be in existence on the date the Tax-Exempt Bonds are delivered, the City reasonably expects that the proceeds of the Tax-Exempt Bonds will not be used in a manner that would cause the Tax-Exempt Bonds or any portion thereof to be an "arbitrage bond" within the meaning of Section 148 of the Code. (v) At all times while the Tax-Exempt Bonds are outstanding, the City will identify and properly account for all amounts constituting gross proceeds of the Tax- Exempt Bonds in accordance with the Regulations. The City will monitor the yield on the investments of the proceeds of the Tax-Exempt Bonds and, to the extent required by the Code and the Regulations, will restrict the yield on such investments to a yield which is not materially higher than the yield on the Tax-Exempt Bonds. To the extent necessary to prevent the Tax-Exempt Bonds from constituting "arbitrage bonds," the City will make 35 4164-5400-6866.4 such payments as are necessary to cause the yield on all yield restricted nonpurpose investments allocable to the Tax-Exempt Bonds to be less than the yield that is materially higher than the yield on the Tax-Exempt Bonds. (vi) The City will not take any action or knowingly omit to take any action that, if taken or omitted, would cause the Tax-Exempt Bonds to be treated as "federally guaranteed" obligations for purposes of Section 149(b) of the Code. (vii) The City represents that not more than fifty percent (50%) of the proceeds of the Refunded Obligations were invested in nonpurpose investments (as defined in Section 148(�(6)(A) of the Code) having a substantially guaranteed yield for four years or more within the meaning of Section 149(g)(3)(A)(ii) of the Code, and on the date of issue of the Refunded Obligations, the City reasonably expected that at least eighty-five percent (85%) of the spendable proceeds of the Refunded Obligations would be used to carry out the governmental purpose of the Refunded Obligations within the three-year period beginning on the issue date of Refunded Obligations . (viii) The City will take all necessary steps to comply with the requirement that certain amounts earned by the City on the investment of the gross proceeds of the Tax- Exempt Bonds, if any, be rebated to the federal government. Specifically, the City will (i) maintain records regarding the receipt, investment, and expenditure of the gross proceeds of the Tax-Exempt Bonds as may be required to calculate such excess arbitrage profits separately from records of amounts on deposit in the funds and accounts of the City allocable to other obligations of the City or moneys which do not represent gross proceeds of any obligations of the City and retain such records for at least six years after the day on which the last outstanding Tax-Exempt Bond is discharged, (ii) account for all gross proceeds under a reasonable, consistently applied method of accounting, not employed as an artifice or device to avoid in whole or in part, the requirements of Section 148 of the Code, including any specified method of accounting required by applicable Regulations to be used for all or a portion of any gross proceeds, (iii) calculate, at such times as are required by applicable Regulations, the amount of excess arbitrage profits, if any, earned from the investment of the gross proceeds of the Tax-Exempt Bonds and (iv) timely pay, as required by applicable Regulations, all amounts required to be rebated to the federal government. In addition, the City will exercise reasonable diligence to assure that no errors are made in the calculations required by the preceding sentence and, if such an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter, including payment to the federal government of any delinquent amounts owed to it, interest thereon and any penalty. (ix) The City will not directly or indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the gross proceeds of the Tax-Exempt Bonds that might result in a reduction in the amount required to be paid to the federal government because such arrangement results in a smaller profit or a larger loss than would have resulted if such arrangement had been at arm's length and had the yield on the Tax-Exempt Bonds not been relevant to either party. riuz�if�i�r�:�Tx� 36 (x) The City will timely file or cause to be filed with the Secretary of the Treasury of the United States the information required by Section 149(e) of the Code with respect to the Tax-Exempt Bonds on such form and in such place as the Secretary may prescribe. (xi) The City will not issue or use the Tax-Exempt Bonds as part of an "abusive arbitrage device" (as defined in Section 1.148-10(a) of the Regulations). Without limiting the foregoing, the Tax-Exempt Bonds are not and will not be a part of a transaction or series of transactions that attempts to circumvent the provisions of Section 148 of the Code and the Regulations, by (i) enabling the City to exploit the difference between tax- exempt and taxable interest rates to gain a material financial advantage, or (ii) increasing the burden on the market for tax-exempt obligations. (xii) Proper officers of the City charged with the responsibility for issuing the Tax-Exempt Bonds are hereby directed to make, execute and deliver certifications as to facts, estimates or circumstances in existence as of the date of issuance of the Tax-Exempt Bonds and stating whether there are facts, estimates or circumstances that would materially change the City's expectations. On or after the date of issuance of the Tax-Exempt Bonds, the City will take such actions as are necessary and appropriate to assure the continuous accuracy of the representations contained in such certificates. (xiii) The covenants and representations made or required by this Section are for the benefit of the Tax-Exempt Bond holders and any subsequent Tax-Exempt Bond holder, and may be relied upon by the Tax-Exempt Bond holders and any subsequent Tax- Exempt Bond holder and bond counsel to the City. (b) In complying with the foregoing covenants, the City may rely upon an unqualified opinion issued to the City by nationally recognized bond counsel that any action by the City or reliance upon any interpretation of the Code or Regulations contained in such opinion will not cause interest on the Tax-Exempt Bonds to be includable in gross income for federal income tax purposes under existing law. (c) Notwithstanding any other provision of this Ordinance, the City's representations and obligations under the covenants and provisions of this Section shall survive the defeasance and discharge of the Tax-Exempt Bonds for as long as such matters are relevant to the exclusion of interest on the Tax-Exempt Bonds from the gross income of the owners for federal income tax purposes. Section 10.06 Disposition of Project. The City covenants that the property financed or refnanced with the proceeds of the Tax- Exempt Bonds will not be sold or otherwise disposed in a transaction resulting in the receipt by the City of cash or other compensation, unless the City obtains an opinion of a nationally- recognized bond counsel substantially to the effect that such sale or other disposition will not adversely affect the tax-exempt status of the Tax-Exempt Bonds. For purposes of this Section, the portion of the property comprising personal property and disposed of in the ordinary course of business shall not be treated as a transaction resulting in the receipt of cash or other compensation. 37 4164-5400-6866 4 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 XI DEFAULT AND REMEDIES Section 11.01 Events of Default. Each of the following occurrences or events for the purpose of this Ordinance is hereby declared to be an Event of Default: (a) defaults in payments to be made to the Bond Fund as required by this Ordinance; (b) defaults in the observance or performance of any other of the covenants, conditions or obligations set forth in this Ordinance. Section 11.02 Remedies for Default. (a) Upon the happening of any Event of Default, then any Owner or an authorized representative thereof, including but not limited to, a trustee or trustees therefor, may proceed against the City for the purpose of protecting and enforcing the rights of the Owners under this Ordinance and shall be entitled to a writ of mandamus issued by a court of proper jurisdiction compelling and requiring the City Council and other officers of the City to observe and perform any covenant, condition or obligation prescribed in this Ordinance. (b) It is provided that all such proceedings shall be instituted and maintained for the equal benefit of all Owners of Bonds then Outstanding. Section 11.03 Remedies Not Exclusive. (a) No remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the Bonds or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to accelerate the debt evidenced by the Bonds shall not be available as a remedy under this Ordinance. (b) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power, or shall be construed to be a waiver of any such default or acquiescence therein, and every such right or power may be exercised from time to time and as often as may be deemed expedient. 38 4164-5400-6866.4 ARTICLE XII DISCHARGE Section 12.01 Dischar�e. Except as otherwise provided in the Pricing Certificate, the Bonds may be defeased, discharged or refunded in any manner permitted by applicable law. ARTICLE XIII CONTINUING DISCLOSURE UNDERTAKING Section 13.01 Annual Reports. (a) The City shall provide annually to the MSRB, (1) within six (6) months after the end of each fiscal year of the City, financial information and operating data with respect to the City of the general type included in the final Official Statement authorized by Section 8.01 of this Ordinance, being information of the type described in Exhibit A hereto, including financial statements of the City if audited financial statements of the City are then available, and (2) if not provided as part such financial information and operating data, audited financial statements of the City, when and if available. Any financial statements to be provided shall be (i) prepared in accordance with the accounting principles described in Exhibit A, or such other accounting principles as the City may be required to employ from time to time pursuant to state law or regulation, and (ii) audited, if the City commissions an audit of such iinancial statements and the audit is completed within the period during which they must be provided. If the audit of such financial statements is not complete within twelve (12) months after any such fiscal year end, then the City shall file unaudited fnancial statements within such 12-month period and audited financial statements for the applicable fiscal year, when and if the audit report on such statements becomes available. (b) If the City changes its fiscal year, it will notify the MSRB of the change (and of the date of the new fiscal year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. (c) The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific referenced to any document (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to the MSRB of filed with the SEC. (d) An Authorized Officer is authorized to establish and implement written procedures to ensure compliance with the reporting requirements imposed by this Section. Such procedures may be modified and amended by the Authorized Officer from time to time to the extent the modification or amendment of such procedures are deemed necessary, useful or appropriate. Section 13.02 Event Notices. (a) The City shall notify the MSRB, in a timely manner (not in excess of ten (10) Business Days after the occurrence of an event), of any of the following events with respect to the Bonds: 39 4164-5400-6866.4 (i) principal and interest payment delinquencies; (ii) nonpayment related defaults, if material; (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701- TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (vii) modifications to rights of Owners, if material; (viii) redemption calls, if material, and tender offers; (ix) defeasances; (x) release, substitution, or sale of property securing repayment of the Honds, if material; (xi) rating changes; (xii) bankruptcy, insolvency, receivership or similar event of the City; (xiii) the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (xiv) appointment of a successor trustee or change in the name of the trustee, if material; (xv) incurrence of a Financial Obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the City, any of which affect security holders, if material; and (xvi) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the City, any of which reflect financial difficulties. For these purposes, (a) any event described in the immediately preceding paragraph (xii) is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a 40 4164-5400-6866.4 court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or o�'icers of the City in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City, and (b) the City intends the words used in the immediately preceding paragraphs (xv) and (xvi) and the definition of Financial Obligation in this Ordinance to have the same meanings as when they are used in the Rule, as evidenced by SEC Release No. 34-83885, dated August 20, 2018. (b) The City shall notify the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with Section 13.01 of this Ordinance by the time required by such Section. Section 13.03 Identifving Information. All documents provided to the MSRB pursuant to this Article shall be provided in an electronic format and be accompanied by identifying information as prescribed by the MSRB. Section 13.04 Limitations, Disclaimers and Amendments. (a) The City shall be obligated to observe and perform the covenants specified in this Article for so long as, but only for so long as, the City remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that the City in any event will give notice of any Bond calls and any defeasances that cause the City to be no longer an "obligated person." (b) The provisions of this Article are for the sole benefit of the Owners and beneficial owners of the Bonds, and nothing in this Article, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Article or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUC�� BR�ACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PEK�ORMANCE. 41 4164-5400-6866.4 (c) No default by the City in observing or performing its obligations under this Article shall constitute a breach of or default under the Ordinance for purposes of any other provisions of this Ordinance. (d) Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. (e) The provisions of this Article may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (i) the provisions of this Article, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (ii) either (A) the Owners of a majority in aggregate principal amount (or any greater amount required by any other provisions of this Ordinance that authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (B) an entity or individual person that is unaffiliated with the City (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the Owners and beneficial owners of the Bonds. If the City so amends the provisions of this Article, it shall include with any amended financial information or operating data next provided in accordance with Section 12.01 an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in type of financial information or operating data so provided. ARTICLE XIV AMENDMENT OF ORDINANCE Section 14.01 Amendment of Ordinance. (a) That the holders of the Parity Bonds aggregating a majority in principal amount of then outstanding Parity Bonds shall have the right from time to time to approve any amendment to this Ordinance which may be deemed necessary or desirable by the City; provided, however, that without the consent of the holders of all of the Parity Bonds at the time outstanding, nothing herein contained shall permit or be construed to permit the amendment of the terms and conditions in this Ordinance or in the Bonds so as to: (i) make any change in the maturity of the outstanding Bonds; (ii) reduce the rate of interest borne by any of the outstanding Bonds; (iii) reduce the amount of the principal payable on the outstanding Bonds; (iv) modify the terms of payment of principal of or interest on the outstanding Bonds or impose any conditions with respect to such payment; (v) affect the rights of the holders of less than all of the Bonds then outstanding; or (vi) change the minimum percentage of the principal amount of Bonds necessary for consent to such amendment. (b) That if at any time the City shall desire to amend the Ordinance under this Section, the City shall cause notice of the proposed amendment to be (i) posted on the MSRB's EMMA system or (ii) published in a financial newspaper or journal published in The City of New York, New York, once during each calendar week for at least two (2) successive calendar weeks; provided, however, that the publication of such notice shall not constitute a condition precedent to the adoption of such amendatory ordinance and the failure to post or publish such notice shall not 42 4164-5400-6866 4 adversely affect the implementation of such amendment as adopted pursuant to such amendatory ordinance. Such notice shall briefly set forth the nature of the proposed amendment and shall state that a copy thereof is on file at the principal office of the Paying Agent/Registrar for inspection by all holders of Bonds. Such publication is not required, however, if notice in writing is given to each holder of Bonds. (c) That whenever at any time not less than thirty (30) days, and within one year, from the date of the first posting or publication of said notice or other service of written notice the City shall receive an instrument or instruments executed by the holders of at least a majority in aggregate principal amount of all Bonds then outstanding, which instrument or instruments shall refer to the proposed amendment described in said notice and which specifically consent to and approve such amendment in substantially the form of the copy thereof on file with the Paying Agent/Registrar, the City Council may pass the amendatory ordinance in substantially the same form. (d) That upon the passage of any amendatory ordinance pursuant to the provisions of this Section, this Ordinance shall be deemed to be amended in accordance with such amendatory ordinance, and the respective rights, duties and obligations under this Ordinance of the City and all the holders of then outstanding Bonds shall thereafter be determined, exercised and enforced hereunder, subject in all respects to such amendments. (e) That any consent given by the holder of a Bond pursuant to the provisions of this Section shall be irrevocable for a period of six (6) months from the date of the first publication of the notice provided for in this Section, and shall be conclusive and binding upon all future holders of the same Bond during such period. Such consent may be revoked at any time after six (6) months from the date of the first publication of such notice by the holder who gave such consent, or by a successor in title, by filing notice thereof with the Paying Agent/Registrar therefor and the City, but such revocation shall not be effective if the holders of a majority in aggregate principal amount of the then outstanding Bonds as in this Section defined have, prior to the attempted revocation, consented to and approve the amendment. (fl For the purposes of this Section, the ownership and other matters relating to all Bonds registered as to ownership shall be determined from the registration books kept by the registrar therefor. The Paying Agent/Registrar may conclusively assume that such ownership continues until written notice to the contrary is served upon the Paying AgendRegistrar. (g) The foregoing provisions of this Section notwithstanding, the City by action of the City Council may amend this Ordinance for any one or more of the following purposes: (i) To add to the covenants and agreements of the City in this Ordinance contained, other covenants and agreements thereafter to be observed, grant additional rights or remedies to bondholders or to surrender, restrict or limit any right or power herein reserved to or conferred upon the City; (ii) To make such provisions for the purpose of clarifying matters or questions arising under this Ordinance, as are required by the Attorney General of Texas to obtain the Attorney General's approval of the issuance of the Bonds or required by the Purchaser 43 4164-5400-6866.4 before their issuance or for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained in this Ordinance, or at any time before or after issuance, including, without limitation, those matters described in Section 13.04 hereof, as are necessary or desirable and not contrary to or inconsistent with this Ordinance, and in all events which shall not adversely affect the interests of the owners of the Bonds; (iii) To modify any of the provisions of this Ordinance in any other respect whatsoever, provided that such modification shall be, and be expressed to be, effective only after all previously issued Parity Bonds outstanding at the date of the adoption of such modification shall cease to be outstanding; (iv) To make such amendments to this Ordinance as may be required, in the opinion of Bond Counsel, to ensure compliance with sections 103 and 141 through 150 of the Code and the regulations promulgated thereunder and applicable thereto. Notice of any such amendment may be posted or published by the City in the manner described in clause (b) of this Section; provided, however, that the publication of such notice shall not constitute a condition precedent to the adoption of such amendatory ordinance and the failure to post or publish such notice shall not adversely affect the implementation of such amendment as adopted pursuant to such amendatory ordinance. (h) If any Section, paragraph, clause or provision of this Ordinance shall for any reason be held to be invalid, null, void, of no force and effect, then such provisions shall be construed as severable from the reminder of this Ordinance and shall not affect the validity of all other provision of this Ordinance which shall remain in full force and effect. ARTICLE XV KEDEMPTION OF REFUNDED OBLIGATIONS Section 15.01 Redem�tion of Refunded Obli at� ions• (d) The City hereby calls the Refunded Obligations for redemption prior to maturity on the dates and at the prices set forth in the Pricing Certificate. (e) The Authorized Officer is hereby authorized and directed to cause a copy of this Ordinance to be delivered to each paying agent/registrar for the Refunded Obligations, together with the Pricing Certificate therefor, the delivery of which shall constitute notice of redemption and notice of defeasance to such paying agendregistrar. Section 15.02 Arran�ements for Defeasance of Refunded Obli at� ions• The Authorized Officer may execute and deliver escrow agreements, deposit agreements or similar agreements (each an "Escrow Agreement"), letters of instructions or any other instruments relating to the safekeeping, investment, administration and disposition of moneys deposited to effect the defeasance of the Refunded Obligations in such form and subject to such terms and conditions as the Authorized Officer determines may be necessary or convenient to carry out the intent and purpose of this Ordinance. An Authorized Officer is further authorized to solicit bids and subscribe for and make other arrangements for the purchase of Defeasance Securities, as 44 4164-5400-6866 4 may be necessary for the defeasance of the Refunded Obligations, and the solicitation of offers and application for the acquisition of the Defeasance Securities is hereby approved and ratified. Section 15.03 Notice of Redemption. Each paying agent/registrar for the Refunded Obligations is hereby authorized and directed to give notice of redemption and deposit with respect to the Refunded Obligations as required under the ordinance pursuant to which the Refunded Obligations were issued. ARTICLE XVI EFFECTIVE IMMEDIATELY Section 16.01 Effective Immediatelv. 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. ] 45 4164-5400-6866.4 PRESENTED, FINALLY PASSED AND APPROVED, AND EFFECTIVE on the 8th day of October, 2024, at a regular meeting of the City Council of the City of Lubbock, Texas. � MA K MCBRAYER, Mayor ATTEST: COURTNEY PAZ, City Secretary [SEAL] APPROVED AS TO CONTENT: By: CHERYL BROCK, Interim Chief Financial Officer APPROVED AS TO FORM: By: � JERRY V YLE, JR., Bond Counsel Signature Page for Ordinance 4164-5400-6866.4 SCHEDULEI REFUNDING CANDIDATES All outstanding maturities of the following obligations of the City: • General Obligation Refunding Bonds, Series 2014 • Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2015 • General Obligation Refunding Bonds, Series 2015 Schedule I-1 4164-5400-6866.4 EXHIBIT A DESCRIPTION OF ANNUAL DISCLOSURE OF FINANCIAL INFORMATION* The following information is referred to in Article XIII of this Ordinance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and included in the Appendix or other headings of the Official Statement referred to) below: 1. Statistical and financial data set forth in the Official Statement in Tables 1— 15 of APPENDIX A. 2. The portions of the financial statements of the City appended to the Official Statement as APPENDIX B, but for the most recently concluded fiscal year. Accounting Principles The accounting principles referred to in such Article XIII are the accounting principles described in the notes to the respective financial statements appended to the Official Statement. *Subject to any changes prescribed by the Pricing Certificate. Exhibit A-1 4164-5400-6866.4 EXHIBIT B SALE PARAMETERS In accordance with Section 8.01(a) of the Ordinance, the following conditions with respect to the Bonds of each series must be satisfied in order for the Authorized Officer to act on behalf of the City in selling and delivering the Bonds to the Purchaser: (a) the price to be paid for the Bonds shall be not less than 90% of the aggregate principal amount of the Bonds; (b) the interest rate of the Bonds of any series shall not exceed the maximum rate allowed by Chapter 1204, Texas Government Code, as amended; (c) no Bond shall mature later than the final maturity date of the Refunded Obligations designated in the Pricing Certificate for the Bonds of such series; (d) the principal amount of the Bonds of each series shall produce proceeds in an amount sufficient, as determined by the Authorized Officer, to fund the purpose(s) identified in Section 3.01 being financed by the issuance of the Bonds of such series and such principal amount (when combined with the aggregate principal amount of any other series of Bonds issued pursuant to this Ordinance) shall not exceed the maximum amount authorized in Section 3.01; (e) the refunding of the Refunded Obligations shall result in (i) positive gross debt service savings and (ii) net present value debt service savings of at least two percent (2.0%) of the principal amount of the Refunded Obligations; and (� the Bonds to be issued, prior to delivery, must have been rated by a nationally recognized rating agency for municipal securities in one of the four highest rating categories for long term obligations. Exhibit B-1 4164-5400-6866 4 EXHIBIT C FORM OF THE BONDS The form of the Bonds shall be generally in the form set forth below, including the form of the Registration Certificate of the Comptroller of Public Accounts of the State of Texas to accompany the initially delivered Bonds, the form of Certificate of the Paying Agent/Registrar and the form of Assignment appearing on the Bonds shall be substantially as follows, provided however, that the substantially final form of the Bonds shall be set forth in or attached to the Pricing Certificate and shall incorporate and reflect the final terms of the Bonds set forth in the Pricing Certificate: (a) Form of Bond. REGISTERED No. it�:GISTEKED United States of America State of Texas INTEREST RATE: County of Lubbock CITY OF LUBBOCK, TEXAS WATER AND WASTEWATER SYSTEM REVENUE REFUNDING BOND [TAXABLE] SERIES 20_ MATURITY DATE: BOND DATE: CUSIP NUMBER: % � The City of Lubbock (the "City"), in the County of Lubbock, State of Texas, for value received, hereby promises to pay to or registered assigns, but solely from the sources and in the manner hereinafter provided, on the Maturity Date specified above, the sum of DOLLARS unless this Bond shall have been sooner called for redemption and the payment of the principal hereof shall have been paid or provided for, and to pay interest on such principal amount from the I[nformation to be inserted from Pricing Certificate. Exhibit C-1 4164-5400-6866 4 later of � �, 20[_] or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30- day months, such interest to be paid semiannually on and of each year, commencing , 20 .Z All capitalized terms used herein but not defined shall have the meaning assigned to them in the Ordinance (defined below). The principal of this Bond shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Bond at the corporate office in Dallas, Texas (the "Designated Payment/Transfer Office"), of BOKF, NA, the initial Paying Agent/Registrar, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Bond is payable by check dated as of the interest payment date, and mailed by the Paying Agent/Registrar to the registered owner at the address shown on the Register kept by the Paying AgendRegistrar, or by such other customary banking arrangements acceptable to the Paying AgenURegistrar and the registered owner; provided, however, such registered owner shall bear all risk and expense of such other banking arrangement. For the purpose of the payment of interest on this Bond, the registered owner shall be the person in whose name this Bond is registered at the close of business on the "Record Date," which shall be the [lasUffteenth] 13usiness Day of the month next preceding an Interest Payment Date. If the date for the payment of the principal of or interest on this Bond shall be a Saturday, Sunday, legal holiday or day on which banking institutions in the city where the Paying AgenURegistrar is located are required or authorized by law or executive order to close, the date for such payment shall be the next succeeding day that is not a Saturday, Sunday, legal holiday or day on which banking institutions are required or authorized to close and payment on such date shall for all purposes be deemed to have been made on the original date payment was due. This Bond is one of a series of fully registered bonds specified in the title hereof issued in the aggregate principal amount of $ 3(herein referred to as the "Bonds"), issued pursuant to the authority provided by Chapters 1207 and 1371, Texas Government Code, as amended, and a certain ordinance of the City (the "Ordinance"), for the purposes described in the Ordinance. The Bonds are secured by and payable solely from a first lien on and pledge of the Net Revenues of the System, as provided or incorporated by reference in the Ordinance. The Bonds constitute special obligations of the City payable solely from the sources and in the manner set forth herein and in the Ordinance and not from any other revenues, funds or assets of the City. The City has reserved the right, subject to the restrictions stated or incorporated by reference in the Ordinance, to issue additional parity revenue bonds that may be secured in the same manner and on a parity with the Bonds and the Previously Issued Bonds. 2 Information to be inserted from Pricing Certificate. 3[nformation to be inserted from Pricing Certificate. Exhibit C-2 4164-5400-6866.4 [The City has reserved the option to redeem the Bonds maturing on or after , 20 , before their respective scheduled maturities in whole or in part on , 20 , or on any date thereafter, at a price equal to the principal amount of the Bonds so called for redemption plus accrued interest to the date fixed for redemption. If less than all of the Bonds are to be redeemed, the City shall determine the maturity or maturities and the amounts thereof to be redeemed and shall direct the Paying AgendRegistrar to call by lot the Bonds, or portion thereof, within such maturity and in such principal amounts, for redemption.]4 [Bonds maturing on , 20_ (the "Term Bonds") are subject to mandatory sinking fund redemption prior to their scheduled maturity, and will be redeemed by the City, in part at a redemption price equal to the principal amount thereof, without premium, plus interest accrued to the redemption date, on the dates and in the principal amounts shown in the following schedule: Term Bonds Maturing , 20 Redemption Date Principal Amount , 20 , 20 , 20_ (maturity) The Paying Agent/Registrar will select by lot or by any other customary method that results in a random selection the specific Term Bonds (or with respect to Term Bonds having a denomination in excess of $5,000, each $5,000 portion thereo fl to be redeemed by mandatory redemption. The principal amount of Term Bonds required to be redeemed on any redemption date pursuant to the foregoing mandatory sinking fund redemption provisions hereof shall be reduced, at the option of the City, by the principal amount of any Term Bonds which, at least 45 days prior to the mandatory sinking fund redemption date (i) shall have been acquired by the City at a price not exceeding the principal amount of such Term Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying AgendRegistrar for cancellation, or (ii) shall have been redeemed pursuant to the optional redemption provisions hereof and not previously credited to a mandatory sinking fund redemption.]5 Notice of such redemption or redemptions shall be given by first class mail, postage prepaid, not less than 30 days before the date fixed for redemption, to the registered owner of each of the Bonds to be redeemed in whole or in part. Subject to the right of the City to give a conditional notice of redemption with respect to an optional redemption, as described below, notice having been so given, the Bonds or portions thereof designated for redemption shall become due and payable on the redemption date specified in such notice; from and after such date, notwithstanding that any of the Bonds or portions thereof so called for redemption shall not have been surrendered for payment, interest on such Bonds or portions thereof shall cease to accrue. 4[nsert optional redemption provisions, if any, and revise to conform to the Pricing Certificate. 5 Insert mandatory sinking fund redemption provisions, if any, and revise as necessary to conform to the Pricing Certificate. Exhibit C-3 4164-5400-6866.4 Notice of such redemption or redemptions shall be given by first class mail, postage prepaid, not less than thirty (30) days before the date fixed for redemption, to the registered owner of each of the Bonds to be redeemed in whole or in part. In the Ordinance, the City reser�es the right in the case of an optional redemption to give notice of its election or direction to redeem Bonds conditioned upon the occurrence of subsequent events. Such notice may state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption date or (ii) that the City retains the right to rescind such notice at any time prior to the scheduled redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar instructi�g the Paying AgendRegistrar to rescind the redemption notice, and such notice and redemption shall be of no effect if such moneys and/or authorized securities are not so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice of redemption to the affected owners. Any Bonds subject to conditional redemption where redemption has been rescinded shall remain Outstanding, and the rescission shall not constitute an event of default. Further, in the case of a conditional redemption, the failure of the City to make moneys and/or authorized securities available in part or in whole on or before the redemption date shall not constitute an event of default. As provided in the Ordinance and subject to certain limitations therein set forth, this Bond is transferable upon surrender of this Bond for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar; thereupon, one or more new fully registered Bonds of the same stated maturity, of authorized denominations, bearing the same rate of interest, and for the same aggregate principal amount will be issued to the designated transferee or transferees. Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer or exchange any Bond called for redemption where such redemption is scheduled to occur within 45 calendar days of the transfer or exchange date; provided, however, such limitation shall not be applicable to an exchange by the registered owner of the uncalled principal balance of a Bond. The City, the Paying AgendRegistrar, and any other person may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except interest shall be paid to the person in whose name this Bond is registered on the Record Date) and for all other purposes, whether or not this Bond be overdue, and neither the City nor the Paying AgentlRegistrar, nor any such agent shall be affected by notice to the contrary. IT IS HEREBY CERTIFIED AND RECITED that this Bond has been duly and validly issued and delivered; that all acts, conditions, and things required or proper to be performed, exist, and be done precedent to or in the issuance and delivery of this Bond have been performed, existed, and been done in accordance with law; that the Bonds do not exceed any constitutional or statutory limitation; and that provision has been made for the payment of the principal of and interest on the Bonds by irrevocably pledging the net revenues of the System, as hereinabove recited. The registered owner hereof shall never have the right to demand payment of this Bond out of any funds raised or to be raised by taxation. Exhibit C-4 4164-5400-6866.4 IN WITNESS WHER�:OF, the City has caused this Bond to be executed in its name by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the City Secretary, and the official seal of the City has been duly impressed or placed in facsimile on this Bond. Mayor, City of Lubbock, Texas City Secretary, City of Lubbock, Texas [SEAL] (b) Form of Comptroller's Registration Certificate. The following Comptroller's Registration Certificate may be deleted from the definitive Bonds if such Certificate on the initial Bond is fully executed. OFFICE OF THE COMPTROLLER § OF PUBLIC ACCOUNTS § REGISTER NO. OF THE STATE OF TEXAS § I hereby certify that there is on file and of record in my office a certificate of the Attorney General of the State of Texas to the effect that this Bond has been examined by him as required by law, that he finds that it has been issued in conformity with the Constitution and laws of the State of Texas, and that it is a valid and binding special obligation of the City of Lubbock, Texas, payable from the revenues pledged to its payment by and in the ordinance authorizing same and that said bond has this day been registered by me. Witness my hand and seal of office at Austin, Texas, Comptroller of Public Accounts of the State of Texas [SEAL] Exhibit C-5 4164-5400-6866.4 (c) Form of Certificate of Payin� e� ndRe is�. The following Certificate of Paying Agent/Registrar may be deleted from the Initial Bond if the Comptroller's Registration Certificate appears thereon. CERTIFICATE OF PAYING AGENT/REGISTREIR It is hereby certified that this Bond has been issued under the provisions of the Ordinance described on this Bond; and that this Bond has been issued in conversion of and exchange for or replacement of a bond, bonds, or portion of a bond or bonds of an issue which was originally approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas as shown in the records kept by the undersigned. BOKF, NA, as Paying AgendRegistrar Dated: Authorized Representative ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto (print or typewrite name, address and Zip Code of transferee): (Social Security or other identifying number: ) the within Bond and all rights hereunder and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration hereof, with full power of substitution in the premises. Dated: Signature Guaranteed By: Authorized Signatory : (d) Form of Assi�nment. NOTICE: The signature on this Assignment must correspond with the name of the registered owner as it appears on the face of the within Bond in every particular and must be guaranteed in a manner acceptable to the Paying Agent/Registrar. (e) The Initial Bond shall be in the form set forth in subsections (a), (b) and (d) of this Section, except for the following alterations: Exhibit C-6 4164-5400-6866.4 (i) immediately under the name of the Bond (which name shall be set forth in the Pricing Certificate), the headings "INTEREST RATE" and "MATURITY DATE" shall be completed with the words "As shown below"; (ii) in the first paragraph of the Bond, the words "on the Maturity Date specified above" shall be deleted and the following will be inserted: "on February 15 in each of the years, in the principal installments and bearing interest at the per annum rates in accordance with the following schedule: Year Principal Installment Interest Rate (Information to be inserted from the Pricing Certificate) (iii) the Initial Bond shall be numbered T-1. Exhibit C-7 4164-5400-6866 4 PRICING CERTIFICATE City of Lubbock, Texas Water and Wastewater System Revenue Refunding Bonds, Series 2024 Re: City of Lubbock, Texas Water and Wastewater System Revenue Refunding Bonds, Series 2024 (the "Bonds") I, the undersigned Interim Chief Financial Officer for the City of Lubbock, Texas (the "City"), do hereby make and execute this Pricing Certifcate pursuant to an Ordinance adopted by the City Council of the City on October 8, 2024 (the "Ordinance") authorizing the issuance of the Bonds. Capitalized terms used in this Pricing Certificate shall have the meanings given such terms in the Ordinance. 1. As authorized by Section 8.01 of the Ordinance, I have acted on behalf of the City in selling the Bonds to (the "Purchaser") pursuant to the terms of a purchase contract in substantially the form accepted, approved, and authorized pursuant to Section 8.01 of the Ordinance, for the sum of $� 1(representing the principal amount of the Bonds, plus a[net] premium of $ and less an underwriters' discount of $� �), and having the following terms, conditions, and provisions, all as authorized pursuant to Section 8.01 of the Ordinance: A. The Bonds shall be issued in the aggregate principal amount of $� �, are dated � �, 20[24] (the "Bond Date"), bear interest from their date of delivery, and shall mature on February 15 in each of the years 20[� through and including 20U, in the principal amounts and bear interest payable on August 15 and February 15 of each year, commencing February 15, 20U, at the rates set forth in the following schedule: Principa( Principal Year Installments Interest Rates Year Instatlments Interest Rates B. Optional Redemption. The Bonds maturing on and after February 15, 20�] are subject to optional redemption, in whole or from time to time, in part, in integral multiples of $5,000 on February 15, 20[_], or on any date thereafter, at a redemption price of par, plus accrued interest to the date fixed for redemption. 4162-6564-0371. I C. In accordance with the parameters contained in Section 8.01 and Exhibit B of the Ordinance, the undersigned does hereby find, certify, and represent that the foregoing terms of the Bonds satisfy the following requirements and parameters contained within such Section 8.01 and Exhibit B: (i) the price to be paid for the Bonds is not less than 90% of the aggregate principal amount of the Bonds; (ii) the Bonds do not bear interest at a rate greater than the maximum rate allowed by Chapter 1204, Texas Government Code, as amended; (iii) the final maturity for the Bonds is February 15, 20[�, which does not exceed the final maturity date of the Refunded Obligations; (iv) the aggregate principal amount of the Bonds produces proceeds in an amount sufficient to fund the purposes described in Section 3.01 of the Ordinance and the aggregate principal amount of such Bonds (which are the only series of bonds issued pursuant to the Ordinance) does not exceed the maximum amount authorized in Section 3.01 of the Ordinance; (v) as shown in Schedule I attached hereto, the refunding of the Refunded Obligations results in positive gross debt service savings and net present value savings of $f 1(Which represents ��% of the principal amount of the Refunded Obligations), which is at least two percent (2.0%) of the principal amount of the Refunded Obligations; and (vi) the Bonds have been rated by a nationally recognized rating agency for municipal securities in one of the four highest rating categories for long term obligations. 2. The Refunded Obligations consist of those Refunding Candidates described in Schedule II attached hereto. 3. The proceeds of the Bonds shall be applied as follows: A. $�� of the proceeds from the sale of the Bonds shall be deposited and shall be applied as provided in the Escrow Agreement; and B. $�� of the proceeds of the Bonds shall be deposited to a special account of the City and used to pay costs of issuance of the Bonds. 4. The Bonds shall be issued substantially in the form attached hereto as Exhibit A. 5. The undersigned hereby finds that the terms and conditions of the sale of the Bonds are in the best interest of the City and are the most advantageous reasonably available to the City. [SIGNATURE PAGE FOLLOWS] 2 4162-6564�371. I Executed as of the , 2024. Authorized fficer Signature Page for Pricing Certificate for Water and Wastewater System Revenue Refunding Bonds, Series 202�1 4162-6564-4371.1 SCHEDULE I SAVINGS Schedule I-1 4162-6564�371.1 SCHEDULE II REFUNDED OBLIGATIONS Schedule II-1 4162-6564�371. I EXHIBIT A The form of the Bond, including the form of the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the form of Certificate of the Paying Agent/Registrar and the form of Assignment appearing on the Bonds shall be generally as follows: (a) Form of Bond. REGISTERED No. REGISTERED $ United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS WATER AND WASTEWATER SYSTEM REVENUE AEFUNDING BOND, [TAXABLE] SERIES 2024 INTER� ST RATE: MATURITY DATE: BOND DATE: CUSIP NUMBER: % February 15, 20 , 2024 The City of Lubbock (the "City"), in the County of Lubbock, State of Texas, for value received, hereby promises to pay to or registered assigns, but solely from the sources and in the manner hereinafter provided, on the Maturity Date specified above, the sum of DOLLARS unless this Bond shall have been sooner called for redemption and the payment of the principal hereof shall have been paid or provided for, and to pay interest on such principal amount from the later of � �, 20U or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30- day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing � �, 20L�. All capitalized terms used herein but not defined shall have the meaning assigned to them in the Ordinance (defined below). The principal of this Bond shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Bond at the corporate office in Dallas, Texas (the "Designated Payment/Transfer Office"), of BOKF, NA, the initial Paying Agent/Registrar, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Bond is payable by check Exhibit A-1 4162-6564-437 I I dated as of the interest payment date, and mailed by the Paying Agent/Registrar to the registered owner at the address shown on the Register kept by the Paying Agent/Registrar, or by such other customary banking arrangements acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expense of such other banking arrangement. For the purpose of the payment of interest on this Bond, the registered owner shall be the person in whose name this Bond is registered at the close of business on the "Record Date," which shall be the last Business Day of the month next preceding an Interest Payment Date. If the date for the payment of the principal of or interest on this 13ond shall be a Saturday, Sunday, legal holiday or day on which banking institutions in the city where the Paying Agent/Registrar is located are required or authorized by law or executive order to close, the date for such payment shall be the next succeeding day that is not a Saturday, Sunday, legal holiday or day on which banking institutions are required or authorized to close and payment on such date shall for all purposes be deemed to have been made on the original date payment was due. This Bond is one of a series of fully registered bonds specified in the title hereof issued in the aggregate principal amount of $� �(herein referred to as the "Bonds"), issued pursuant to the authority provided by Chapters 1207 and 1371, Texas Government Code, as amended, and a certain ordinance of the City (the "Ordinance"), for the purposes described in the Ordinance. The Bonds are secured by and payable solely from a first lien on and pledge of the Net Revenues of the System, as provided or incorporated by reference in the Ordinance. The Bonds constitute special obligations of the City payable solely from the sources and in the manner set forth herein and in the Ordinance and not from any other revenues, funds or assets of the City. The City has reserved the right, subject to the restrictions stated or incorporated by reference in the Ordinance, to issue additional parity revenue bonds that may be secured in the same manner and on a parity with the Bonds and the Previously Issued Bonds. [The City has reserved the option to redeem the Bonds maturing on or after February 15, 20 , before their respective scheduled maturities in whole or in part on , 20 , or on any date thereafter, at a price equal to the principal amount of the Bonds so called for redemption plus accrued interest to the date fixed for redemption. If less than all of the Bonds are to be redeemed, the City shall determine the maturity or maturities and the amounts thereof to be redeemed and shall direct the Paying AgenURegistrar to call by lot the Bonds, or portion thereof, within such maturity and in such principal amounts, for redemption. Bonds maturing on , 20_ (the "Term Bonds") are subject to mandatory sinking fund redemption prior to their scheduled maturity, and will be redeemed by the City, in part at a redemption price equal to the principal amount thereof, without premium, plus interest accrued to the redemption date, on the dates and in the principal amounts shown in the following schedule: Exhibit A-2 4162-6564�37 I I Term Bonds Maturing , 20 Redemption Date Principal Amount , 20 , 20 , 20_ (maturity) The Paying Agent/Registrar will select by lot or by any other customary method that results in a random selection the specific Term Bonds (or with respect to Term Bonds having a denomination in excess of $5,000, each $5,000 portion thereo� to be redeemed by mandatory redemption. The principal amount of Term Bonds required to be redeemed on any redemption date pursuant to the foregoing mandatory sinking fund redemption provisions hereof shall be reduced, at the option of the City, by the principal amount of any Term Bonds which, at least 45 days prior to the mandatory sinking fund redemption date (i) shall have been acquired by the City at a price not exceeding the principal amount of such Term Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, or (ii) shall have been redeemed pursuant to the optional redemption provisions hereof and not previously credited to a mandatory sinking fund redemption. Notice of such redemption or redemptions shall be given by frst class mail, postage prepaid, not less than thirty (30) days before the date fixed for redemption, to the registered owner of each of the Bonds to be redeemed in whole or in part. In the Ordinance, the City reserves the right in the case of an optional redemption to give notice of its election or direction to redeem Bonds conditioned upon the occurrence of subsequent events. Such notice may state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption date or (ii) that the City retains the right to rescind such notice at any time prior to the scheduled redemption date if the City delivers a certificate of the City to the Paying AgendRegistrar instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and redemption shall be of no effect if such moneys and/or authorized securities are not so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice of redemption to the affected owners. Any Bonds subject to conditional redemption where redemption has been rescinded shall remain Outstanding, and the rescission shall not constitute an event of default. Further, in the case of a conditional redemption, the failure of the City to make moneys and/or authorized securities available in part or in whole on or before the redemption date shall not constitute an event of default.] As provided in the Ordinance and subject to certain limitations therein set forth, this Bond is transferable upon surrender of this Bond for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar; thereupon, one or more new fully registered Bonds of the same stated maturity, of authorized denominations, bearing the same rate of interest, and for the same aggregate principal amount will be issued to the designated transferee or transferees. Exhibit A-3 4162-6564�37 I , I Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer or exchange any Bond called for redemption where such redemption is scheduled to occur within 45 calendar days after the transfer or exchange date; provided, however, such limitation shall not be applicable to an exchange by the registered owner of the uncalled principal balance of a Bond. The City, the Paying Agent/Registrar, and any other person may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except interest shall be paid to the person in whose name this Bond is registered on the Record Date) and for all other purposes, whether or not this Bond be overdue, and neither the City nor the Paying Agent/Registrar, nor any such agent shall be affected by notice to the contrary. IT IS HEREBY CERTIFIED AND RECITED that this Bond has been duly and validly issued and delivered; that all acts, conditions, and things required or proper to be performed, exist, and be done precedent to or in the issuance and delivery of this Bond have been performed, existed, and been done in accordance with law; that the Bonds do not exceed any constitutional or statutory limitation; and that provision has been made for the payment of the principal of and interest on the Bonds by inevocably pledging the net revenues of the System, as hereinabove recited. The registered owner hereof shall never have the right to demand payment of this Bond out of any funds raised or to be raised by taxation. IN WITNESS WHEREOF, the City has caused this Bond to be executed in its name by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the City Secretary, and the official seal of the City has been duly impressed or placed in facsimile on this Bond. Mayor, City of Lubbock, Texas City Secretary, City of Lubbock, Texas SEAL Exhibit A-4 4162-6564-4371 I (i) Form of Comptroller's Re�istration Certificate. The following Comptroller's Registration Certificate may be deleted from the definitive Bonds if such Certificate on the initial Bond is fully executed. OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS OF THE STATE OF TEXAS § § RI;GISTER NO. § I hereby certify that there is on iile and of record in my office a certificate of the Attorney General of the State of Texas to the effect that this Bond has been examined by him as required by law, that he finds that it has been issued in conformity with the Constitution and laws of the State of Texas, and that it is a valid and binding special obligation of the City of Lubbock, Texas, payable from the revenues pledged to its payment by and in the ordinance authorizing same and that said bond has this day been registered by me. Witness my hand and seal of office at Austin, Texas, Comptroller of Public Accounts of the State of Texas [SEAL] (ii) Form of Certificate of Paying Agent/Re ig strar. The following Certificate of Paying Agent/Registrar may be deleted from the Initial Bond if the Comptroller's Registration Certificate appears thereon. CERTIFICATE OF PAYING AGENT/REGISTRAR It is hereby certified that this gond has been issued under the provisions of the Ordinance described on this Bond; and that this Bond has been issued in conversion of and exchange for or replacement of a bond, bonds, or portion of a bond or bonds of an� issue which was originally approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas as shown in the records kept by the undersigned. BOKF, NA, as Paying Agent/Registrar By: Dated: Authorized Representative Exhibit A-5 4162-6564-4371 I (iii) Form of Assi n�. ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto (print or typewrite name, address and Zip Code of transferee): (Social Security or other identifying number: ) the within Bond and all rights hereunder and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration hereof, with full power of substitution in the premises. Dated: Signature Guaranteed Authorized Signatory _ NOTICE: The signature on this Assignment must correspond with the name of the By: registered owner as it appears on the face of the within Bond in every particular and must _ be guaranteed in a manner acceptable to the Paying Agent/Registrar. (iv) The Initial Bond shall be in the form set forth in subsections (a), (b) and (d) of this Section, except for the following alterations: (1) immediately under the name of the Bond (which name shall be set forth in the Pricing Certificate), the headings "INTEREST RATE" and "MATURITY DATE" shall be completed with the words "As shown below" and the heading "CUSIP NUMBER" shall be deleted; (2) in the first paragraph of the Bond, the words "on the Maturity Date specified above, the sum of DOLLARS" shall be deleted and the following will be inserted: "on February 15 in each of the years, in the principal installments and bearing interest at the per annum rates in accordance with the following schedule: Year Principal Installment Interest Rate (Information to be inserted from the Pricing Certificate) (3) the Initial Bond shall be numbered T-1. Exhibit A-6 4162-6564-0371, I PAYING AGENT/REGISTRAR AGREEMENT Ti�IS PAYING AGENT/REGISTRAR AG�EEMENT (the "Agreement"), dated as of [October 29], 2024, is by and between CITY OF LUBBOCK, TEXAS (the "Issuer"), and BOKF, NA, Dallas, Texas (the "Bank"), a national banking association. WI IEREAS, the Issuer has duly authorized and provided for the issuance of its Water and Wastewater System Revenue Refunding Bonds, Series 2024 (the "Bonds"), dated [November 15], 2024, to be issued as registered securities without coupons; and WHEREAS, all things necessary to make the Bonds the valid obligations of the Issuer, in accordance with their terms, will be taken upon the issuance and delivery thereof, and WHEREAS, the Issuer is desirous that the Bank act as the Paying Agent of the Issuer in paying the principal, redemption premium, if any, and interest on the Bonds, in accordance with the terms thereof, and that the Bank act as Registrar for the Bonds; and WHEREAS, the Issuer has duly authorized the execution and delivery of this Agreement, and all things necessary to make this Agreement the valid agreement of the Issuer, in accordance with its terms, have been done; NOW, THEREFORE, it is mutually agreed as follows: ARTICLE I APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 1.01. A�pointment. (a) The Issuer hereby appoints the Bank to act as Paying Agent with respect to the Bonds in paying to the Owners of the Bonds the principal, redemption premium, if any, and interest on all or any of the Bonds. (b) The Issuer hereby appoints the Bank as Registrar with respect to the Bonds. (c) The Bank hereby accepts its appointment, and agrees to act as, the Paying Agent and Registrar. Section 1.02. Compensation. (a) As compensation for the Bank's services as Paying Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in Exhibit A attached hereto for the first year of this Agreement, or such part thereof as this Agreement shall be in effect. (b) In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable expenses, disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof, including the reasonable compensation and the expenses and disbursements of its agents and counsel. 414 I -4745-53 I 5.1 ARTICLE II DEFINITIONS Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the following terms have the following meanings when used in this Agreement: "Bank" means BOKF, NA. "Bank Office" means the Bank's office in Dallas, Texas. The Bank will notify the Issuer in writing of any change in Location of the Bank Office. "Bond" or "Bonds" means, collectively, any or all of the Issuer's Water and Wastewater System Revenue Refunding Bonds, Series 2024, dated [November 26], 2024. "Bond Ordinance" means the ordinance of the City Council of the Issuer authorizing the issuance and delivery of the Bonds. "Business Day" means any day which is not a Saturday, Sunday or legal holiday or day on which banking institutions in New York, New York are required or authorized by law or executive order to close. "Financial Advisor" means RBC Capital Markets, LLC. "Fiscal Year" means the 12-month period ending September 30th of each year. "Issuer" means the City of Lubbock, Texas. "Issuer Request" and "Issuer Order" means a written request or order signed in the name of the Issuer by the Mayor of the Issuer, or any other authorized representative of the Issuer and delivered to the Bank. � "Legal Holiday" means a day on which the Bank is required or authorized by applicable law to be closed. "Owner" means the Person in whose name a Bond is registered in the Register. "Paying Agent" means the Bank when it is performing the functions associated with the terms in this Agreement. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, or government or any agency or political subdivision of a government. "Predecessor Bonds" of any particular Bond means every previous Bond evidencing all or a portion of the same obligation as that evidenced by such particular Bond (and, for the purposes of this definition, any Bond registered and delivered under Section 4.06 in lieu of a mutilated, lost, -2- 4141-4745-5315. I destroyed or stolen Bond shall be deemed to evidence the same obligation as the mutilated, lost, destroyed or stolen Bond). "Record Date" means the last Business Day of the month next preceding an interest payment date established by the Bond Ordinance. "Register" means a register in which the Issuer shall provide for the registration and transfer of Bonds. "Responsible Officer" when used with respect to the Bank means the Chairman or Vice Chairman of the Board of Directors, the Chairman or Vice Chairman of the Executive Committee of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Stated Maturity" means the date or dates specified in the Bond Ordinance as the fixed date on which the principal of the Bonds is due and payable or the date fixed in accordance with the terms of the Bond Ordinance for redemption of the Bonds, or any portion thereof, prior to the fixed maturity date. ARTICLE III PAYING AGENT Section 3.01. Duties of Payin�A�ent. (a) The Bank, as Paying Agent and on behalf of the Issuer, shall pay to the Owner, at the Stated Maturity and upon the surrender of the Bond or Bonds so maturing at the Bank Office, the principal amount of the Bond or Bonds then maturing, and redemption premium, if any, provided that the Bank shall have been provided by or on behalf of the Issuer adequate funds to make such payment. (b) The Bank, as Paying Agent and on behalf of the Issuer, shall pay interest when due on the Bonds to each Owner of the Bonds (or their Predecessor Bonds) as shown in the Register at the close of business on the Record Date, provided that the Bank shall have been provided by or on behalf of the Issuer adequate funds to make such payments; such payments shall be made by computing the amount of interest to be paid each Owner, preparing the checks, and mailing the checks on each interest payment date addressed to each Owner's address as it appears in the Register on the Record Date. Section 3.02. Pavment Dates. The Issuer hereby instructs the Bank to pay the principal of, redemption premium, if any, and interest on the Bonds at the dates specified in the Bond Ordinance. -3- 4141-4745-53I5. I Section 3.03. Mer�er, Conversion, Consolidation, or Succession. Any corporation into which the Paying Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion, or consolidation to which the Paying Agent shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Paying Agent shall be the successor of the Paying Agent hereunder without the execution or filing of any paper or any further act on the part of either of the parties hereto. ARTICLE IV REGISTRAR Section 4.01. Transfer and Exchan�e. (a) The Issuer shall keep the Register at the Bank Office, and subject to such reasonable written regulations as the Issuer may prescribe, which regulations shall be furnished to the Bank herewith or subsequent hereto by Issuer Order, the Issuer shall provide for the registration and transfer of the Bonds. The Bank is hereby appointed "Registrar" for the purpose of registering and transferring the Bonds as herein provided. The Bank agrees to maintain the Register while it is Registrar. The Bank agrees to at all times maintain a copy of the Register at its office located in the State of Texas. (b) The Bank as Registrar hereby agrees that at any time while any Bond is outstanding, the Owner may deliver such Bond to the Registrar for transfer or exchange, accompanied by instructions from the Owner, or the duly authorized designee of the Owner, designating the persons, the maturities, and the principal amounts to and in which such Bond is to be transferred and the addresses of such persons; the Registrar shall thereupon, within not more than three (3) business days, register and deliver such Bond or Bonds as provided in such instructions. The provisions of the Bond Ordinance shall control the procedures for transfer or exchange set forth herein to the extent such procedures are in conflict with the provisions of the Bond Ordinance. (c) Every Bond surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, the signature on which has been guaranteed in a manner satisfactory to the Bank, duly executed by the Owner thereof or his attorney duly authorized in writing. (d) The Bank may request any supporting documentation it feels necessary to effect a re-registration. Section 4.02. The Bonds. The Issuer shall provide an adequate inventory of unregistered Bonds to facilitate transfers. The Bank covenants that it will maintain the unregistered Bonds in safekeeping and will use reasonable care in maintaining such unregistered Bonds in safekeeping, which shall be not less than the care it maintains for debt securities of other governments or corporations for which it serves as registrar, or which it maintains for its own securities. -4- 414I -4745-53I 5 I Section 4.03. Form of Re i� (a) The Bank as Registrar will maintain the records of the Register in accordance with the Bank's general practices and procedures in effect from time to time. The Bank shall not be obligated to maintain such Register in any form other than a form which the Bank has currently available and currently utilizes at the time. (b) The Register may be maintained in written form or in any other form capable of being converted into written form within a reasonable time. Section 4.04. List of Owners. (a) The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the cost, if any, of reproduction, a copy of the information contained in the Register. The Issuer may also inspect the information in the Register at any time the Bank is customarily open for business, provided that reasonable time is allowed the Bank to provide an up-to-date listing or to convert the information into written form. (b) The Bank will not release or disclose the content of the Register to any person other than to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a subpoena or court order or as otherwise required by law. Upon receipt of a subpoena or court order the Bank will notify the Issuer so that the Issuer may contest the subpoena or court order. Section 4.05. Cancellation of Bonds. All Bonds surrendered for payment, redemption, transfer, exchange, or replacement, if surrendered to the Bank, shall be promptly cancelled by it and, if surrendered to the Issuer, shall be delivered to the Bank and, if not already cancelled, shall be promptly cancelled by the Bank. The Issuer may at any time deliver to the Sank for cancellation any Bonds previously certified or registered and delivered which the Issuer may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Bank. All cancelled Bonds held by the Bank shall be disposed of pursuant to the Securities Exchange Act of 1934, as amended. Section 4.06. Mutilated, Destroved, Lost, or Stolen Bonds. (a) Subject to the provisions of this Section 4.06, the Issuer hereby instructs the Bank to deliver fully registered Bonds in exchange for or in lieu of mutilated, destroyed, lost, or stolen Bonds as long as the same does not result in an over-issuance. (b) If (i) any mutilated Bond is surrendered to the Bank, or the Issuer and the Bank receives evidence to their satisfaction of the destruction, loss, or theft of any Bond, and (ii) there is delivered to the Issuer and the Bank such security or indemnity as may be required by the Bank to save and hold each of them harmless, then in the absence of notice to the Issuer or the Bank that such Bond has been acquired by a bona fide purchaser, the Issuer shall execute, and upon its request the Bank shall register and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost, or stolen Bond, a new Sond of the same stated maturity and of like tenor and principal amount bearing a number not contemporaneously outstanding. -5- 4141-4745-5315.1 (c) Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost, or stolen Bond shall constitute a replacement of the prior obligation of the Issuer, whether or not the mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone, and shall be entitled to all the benefits of the Bond Ordinance equally and ratably with all other outstanding Bonds. (d) Upon the satisfaction of the Bank and the Issuer that a Bond has been mutilated, destroyed, lost, or stolen, and upon receipt by the Bank and the Issuer of such indemnity or security as they may require, the Bank shall cancel the Bond number on the Bond registered with a notation in the Register that said Bond has been mutilated, destroyed, lost, or stolen; and a new Bond shall be issued of the same series and of like tenor and principal amount bearing a number, according to the Register, not contemporaneously outstanding. (e) The Bank may charge the Owner the Bank's fees and expenses in connection with issuing a new Bond in lieu of or exchange for a mutilated, destroyed, lost, or stolen Bond. ( fl The Issuer hereby accepts the Bank's current blanket bond for lost, stolen, or destroyed Bonds and any future substitute blanket bond for lost, stolen, or destroyed Bonds that the Bank may arrange, and agrees that the coverage under any such blanket bond is acceptable to it and meets the Issuer's requirements as to security or indemnity. The Bank need not notify the Issuer of any changes in the security or other company giving such bond or the terms of any such bond, provided that the amount of such bond is not reduced below the amount of the bond on the date of execution of this Agreement. The blanket bond then utilized by the Bank for lost, stolen, or destroyed Bonds by the Bank is available for inspection by the Issuer on request. Section 4.07. Transaction Information to Issuer. The Bank will, within a reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to the Bonds it has paid pursuant to Section 3.01; Bonds it has delivered upon the transfer or exchange of any Bonds pursuant to Section 4.01; and Bonds it has delivered in exchange for or in lieu of mutilated, destroyed, lost, or stolen Bonds pursuant to Section 4.06 of this Agreement. ARTICLE V THE BANK Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein and in accordance with the Bond Ordinance and agrees to use reasonable care in the performance thereof. The Bank hereby agrees to use the funds deposited with it for payment of the principal of redemption premium, if any, and interest on the Bonds to pay the Bonds as the same shall become due and further agrees to establish and maintain all accounts and funds as may be required for the Bank to function as Paying Agent. _{�_ 4141-4745-5315. I Section 5.02. Reliance on Documents, Etc. (a) The Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certifcates or opinions furnished to the Bank. (b) The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent facts. (c) No provisions of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not assured to it. (d) The Bank may rely and shall be protected in acting or refraining from acting upon any ordinance, resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, certificate, note, security, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Without limiting the generality of the foregoing statement, the Bank need not examine the ownership of any Bonds, but is protected in acting upon receipt of Bonds containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Owner or an attorney-in-fact of the Owner. The Bank shall not be bound to make any investigation into the facts or matters stated in an ordinance, resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, certificate, note, security, or other paper or document supplied by Issuer. (e) The Bank is also authorized to transfer funds relating to the closing and initial delivery of the Bonds in the manner disclosed in the closing memorandum as prepared by the Issuer's Financial Advisor or other agent. The Bank may act on a facsimile or e-mail transmission of the closing memorandum acknowledged by the Financial Advisor or the Issuer as the final closing memorandum. The Bank shall not be liable for any losses, costs or expenses arising directly or indirectly from the Bank's reliance upon and compliance with such instructions. (� The Bank may consult with counsel, and the written advice of such counsel or any opinion of counsel shall be full and complete authorization and protection with respect to any action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon. (g) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys of the Bank. Section 5.03. Recitals of Issuer. (a) The recitals contained herein and in the Bonds shall be taken as the statements of the Issuer, and the Bank assumes no responsibility for their correctness. (b) The Bank shall in no event be liable to the Issuer, any Owner or Owners, or any other Person for any amount due on any Bond except as otherwise expressly provided herein with respect to the liability of the Bank for its duties under this Agreement. -7- 4141-4745-5315. I Section 5.04. Mav Hold Bonds. The Bank, in its individual or any other capacity, may become the Owner or pledgee of Bonds and may otherwise deal with the Issuer with the same rights it would have if it were not the Paying AgentlRegistrar, or any other agent. Section 5.05. Monev Held bv Bank. (a) Money held by the Bank hereunder need not be segregated from any other funds provided appropriate accounts are maintained. (b) The Bank shall be under no liability for interest on any money received by it hereunder. (c) Subject to the provisions of Title 6, Texas Property Code, as amended, any money deposited with the Bank for the payment of the principal, redemption premium, if any, or interest on any Bond and remaining unclaimed for three years after final maturity of the Bond has become due and payable will be paid by the Bank to the Issuer, and the Owner of such Bond shall thereafter look only to the Issuer for payment thereof, and all liability of the Bank with respect to such monies shall thereupon cease. (d) The Bank will comply with the reporting requirements of Chapter 74 of the Texas Property Code, as amended. (e) The Bank shall deposit any moneys received from the Issuer into a trust account to be held in a paying agent capacity for the payment of the Bonds, with such moneys in the account that exceed the deposit insurance, available to the Issuer, provided by the Federal Deposit Insurance Corporation to be fully collateralized with securities or obligations that are eligible under the laws of the State of Texas and to the extent practicable under the laws of the United States of America to secure and be pledged as collateral for trust accounts until the principal and interest on the Bonds have been presented for payment and paid to the owner thereof. Payments made from such trust account shall be made by check drawn on such trust account unless the owner of such Bonds shall, at its own expense and risk, request such other medium of payment. Section 5.06. Indemnification. To the extent permitted by law, the Issuer agrees to indemnify the Bank, its officers, directors, employees, and agents for, and hold them harmless against, any loss, liability, or expense incurred without negligence or bad faith on their part arising out of or in connection with its acceptance or administration of the Bank's duties hereunder, and under Article V of the Bond Ordinance, including the cost and expense (including its counsel fees) of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement. Section 5.07. Interpleader. The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim, demands or controversy over its persons as well as funds on deposit in a court of competent jurisdiction within the State of Texas; waive personal service of any process; and agree that service of process by certified or registered mail, return receipt requested, to the address set forth in this Agreement shall constitute adequate service. The Issuer and the Bank further agree that the Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction within the State of Texas to determine the rights of any person claiming any interest herein. -8- 4141-4745-5315. I Section 5.08. Statutory Verifications. The Bank 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 Bank 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) The Bank 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, Texas Government Code. The foregoing representation excludes an Bank and each of its parent company, wholly- or majority-owned subsidiaries, and other affiliates, if any, that the United States government has affirmatively 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) The Bank 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, Texas Government Code. (c) The Bank 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 firearm 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 firearm entity or firearm trade association" has the meaning provided in Section 2274.001(3), Texas Government Code. (d) The Bank 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), Texas Government Code. Section 5.09. Exemption From Section 2252.908, Texas Government Code. The Bank 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. -9- 414 I -4745-5315. I ARTICLE VI MISCELLANEOUS PROVISIONS Section 6.01. Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereof. Section 6.02. Assi n� ment• This Agreement may not be assigned by either party without the prior written consent of the other. Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent, waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown below: (a) if to the Issuer: City of Lubbock, Texas 1314 Avenue K Lubbock, Texas 79401 Attention: Interim Chief Financial Officer if to the Bank: BOKF, NA 5956 Sherry Lane, Suite 1201 Dallas, Texas 75225 Section 6.04. Effect of Headin�s. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. Section 6.05. Successors and Assi� All covenants and agreements herein by the Issuer shall bind its successors and assigns, whether so expressed or not. Section 6.06. Separabilitv. If any provision herein shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired�thereby. Section 6.07. Benefits of A�reement. Nothing herein, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy, or claim hereunder. Section 6.08. Entire A�reement. This Agreement and the Bond Ordinance constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent/Registrar, and if any conflict exists between this Agreement and the Bond Ordinance, the Bond Ordinance shall govern. Section 6.09. Counter�arts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. -10- 414I -4745-53 I 5. I Section 6.10. Termination. (a) This Agreement will terminate on the date of final payment by the Bank issuing its checks for the final payment of principal, redemption premium, if any, and interest of the Bonds. (b) This Agreement may be earlier terminated upon sixty (60) days written notice by either party; provided, that, no termination shall be effective until a successor has been appointed by the Issuer and has accepted the duties imposed by this Agreement. A resigning Paying Agent/Registrar may petition any court of competent jurisdiction for the appointment of a successor Paying Agent/Registrar if an instrument of acceptance by a successor Paying AgendRegistrar has not been delivered to the resigning Paying Agent/Registrar within sixty (60) days after the giving of notice of resignation. (c) The provisions of Section 1.02 and of Article Five shall survive and remain in full force and effect following the termination of this Agreement. Section 6.11. Governin� Law• This Agreement shall be construed in accordance with and governed by the laws of the State of Texas. [Signature Page to FollowJ -11- 4141-4745-53I5. I IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above. CITY OF LUBBOCK, TEXAS -�. By: ayor AT ST: City ecretary Signature page jor Paying AgenllRegistrar Agreement for Water and Wastewater System Revenue Refi�nding Bonds, Series 2024 4141-4745-53 I 5. I BOKF, NA, Dallas, Texas By: _ Name: Title: Address: 5956 Sherry Lane, Suite 1201 Dallas, Texas 75225 Signature page for Paying AgentlRegfstrar Agreement for Water and Wastewater System Revenue Refunding Bonds, Series 2024 414I -0745-53 I 5.1 EXHIBIT A SCHEDULE OF FEES FOR SERVICE AS PAYING AGENTIREGISTRAR 4141-4745-5315. I ESCROW AGREEMENT THIS ESCROW AGREEMENT, dated as of [October 29], 2024 (herein, together with any amendments or supplements hereto, called the "Agreement"), entered into by and between CITY OF LUBBOCK, TEXAS (the "Issuer"), and BOKF, NA, a national banking association, as escrow agent (herein, together with any successor in such capacity, called the "Escrow Agent"). WITNESSETH: WHEREAS, the Issuer has heretofore issued and there presently remain outstanding the obligations (the "Refunded Obligations") of the Issuer listed and described on Exhibit A attached hereto, and the Refunded Obligations are scheduled to mature or have been called for early redemption in such years, bear interest at such rates, and are payable at such times and in such amounts as are set forth in Exhibit A attached hereto and incorporated by reference herein for all purposes; WHEREAS, when firm banking arrangements have been made for the payment of principal and interest to the maturity dates or redemption dates of the Refunded Obligations, then the Refunded Obligations shall no longer be regarded as outstanding except for the purpose of receiving payment from the funds provided for such purpose; WHEREAS, Chapter 1207, Texas Government Code, as amended ("Chapter 1207"), authorizes the Issuer to issue refunding bonds and to deposit the proceeds from the sale thereof and any other available funds or resources, directly with the paying agent for any of the Refunded Obligations, and such deposit, if made before the payment dates of the Refunded Obligations and in sufficient amounts, shall constitute the making of firm banking and financial arrangements for the discharge and final payment of the Refunded Obligations; WHEREAS, Chapter 1207 further authorizes the Issuer to enter into an escrow agreement with the paying agent for any of the Refunded Obligations with respect to the safekeeping, investment, administration and disposition of any such deposit, upon such terms and conditions as the Issuer and such paying agent may agree, provided that such deposits may be invested only in United States Treasury securities (or other securities as permitted by Section 1207.062(b), Texas Government Code, and which may be in book entry form, and which shall mature and bear interest payable at times and in amounts sufficient to provide for the scheduled payment or redemption of principal and interest on the Refunded Obligations when due; WHEREAS, the Escrow Agent, is the paying agent for all of the Refunded Obligations and this Agreement constitutes an escrow agreement of the kind authorized and required by Chapter 1207; WHEREAS, Chapter 1207 makes it the duty of the Escrow Agent to comply with the terms of this Agreement and timely make available to the other places of payment, if any, for the Refunded Obligations the amounts required to provide for the payment or redemption of the principal of and interest on such obligations when due, and in accordance with their terms, but solely from the funds, in the manner, and to the extent provided in this Agreement; 4134-5146-2995, t WHEREAS, the issuance, sale, and delivery of the City of Lubbock, Texas, Water and Wastewater System Revenue Refunding Bonds, Series 2024 (the "Refunding Bonds"), have been duly authorized for the purpose, among others, of obtaining the funds required to provide for the payment of the principal of the Refunded Obligations at their respective maturity or redemption dates and the interest thereon to such maturity or redemption dates; WHEREAS, the Issuer desires that, concurrently with the delivery of the Refunding Bonds to the purchasers thereof, a portion of the proceeds of the Refunding Bonds shall be applied to purchase certain "Escrow Securities" (as herein defined) for deposit to the credit of the Escrow Fund created pursuant to the terms of this Agreement and to establish a beginning cash balance (if needed) in such Escrow Fund; WHEREAS, the Escrow Securities shall mature and the interest thereon shall be payable at times and in amounts sufiicient to provide moneys which, together with cash balances from time to time on deposit in the Escrow Fund, will be sufficient to pay the interest on the Refunded Obligations as it accrues and becomes payable and to pay the principal of the Refunded Obligations on their maturity dates or redemption dates; WHEREAS, to facilitate the receipt and transfer of proceeds of the Escrow Securities the Issuer desires to establish the Escrow Fund at the designated office of the Escrow Agent; and WHEREAS, the Escrow Agent is a party to this Agreement and hereby acknowledges its acceptance of the terms and provisions hereof; NOW. THEREFORE, in consideration of the mutual undertakings, promises and agreements herein contained, the sufficiency of which hereby is acknowledged, and to secure the hill and timely payment of principal of and the interest on the Refunded Obligations, the Issuer and the Escrow Agent mutually undertake, promise, and agree for themselves and their respective representatives and successors, as follows: ARTICLE I DEFINITIONS AND 1NTERPRETATIONS Section 1.01 Definitions. Unless the context clearly indicates otherwise, the following terms shall have the meanings assigned to them below when they are used in this Agreement: "Be i�� Cash Balance" means the funds described in Exhibit C attached to this Agreement. "Code" means the Internal Revenue Code of 1986, as amended, including applicable regulations, published rulings and court decisions thereunder. "Escrow Fund" means the escrow created in Section 3.01 of this Agreement to be administered by the Escrow Agent pursuant to the provisions of this Agreement. "Escrow Securities" means (a) direct noncallable obligations of the United States of America, including obligations which are unconditionally guaranteed by the United States of 2 4134-5146-2995. I America (including interest strips of bonds issued by the Resolution Funding Corporation), which may be United States Treasury obligations such as its State and Local Government Series, and which may be in book-entry form; (b) certain noncallable obligations of an agency or instrumentality of the United States, including obligations which are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date of purchase, are rated as to investment quality by all nationally recognized credit rating agencies then rating such securities of not less than the highest rating category maintained by such rating agencies; and (c) certain 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 purchase, are rated as to investment quality by all nationally recognized credit rating agencies then rating such securities of not less than the highest rating category maintained by such rating agencies. "Verification Report" means the report of Robert Thomas CPA, LLC, Certified Public Accountants verifying the sufficiency of the deposits made with the Escrow Agent for defeasance of the Refunded Obligations. Section 1.02 Other Definitions. The terms "Agreement," "Issuer," "Escrow Agent," "Refunded Obligations" and "Refunding Bonds," when they are used in this Agreement, shall have the meanings assigned to them in the preamble to this Agreement. Section 1.03 Interpretations. The titles and headings of the articles and sections of this Agreement have been inserted for convenience and reference only and are not to be considered a part hereof and shall not in any way modify or restrict the terms hereof. This Agreement and all of the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to achieve the intended purpose of providing for the refunding of the Refunded Obligations in accordance with applicable law. ARTICLE II DEPOSIT OF FUNDS AND ESCROW SECURITIES Section 2.01 Deposits in the Escrow Fund. Concurrently with the sale and delivery of the Refunding Bonds, the Issuer shall deposit, or cause to be deposited, with the Escrow Agent, for deposit in the Escrow Fund, the Beginning Cash Balance and the Escrow Securities described in Exhibit C attached hereto and incorporated by reference as a part of this Agreement for all purposes. The Escrow Agent shall, upon the receipt thereof, acknowledge such receipt to the Issuer in writing. ARTICLE III CREATION AND OPERATION OF ESCROW FUND Section 3.01 Escrow Fund. The Escrow Agent hereby creates on its books a special trust and irrevocable escrow fund to be known as City of Lubbock, Texas, Water and Wastewater System Revenue Refunding Bonds, Series 2024 Escrow Fund (the "Escrow Fund") for the purpose of paying the principal of and interest on the Refunded Obligations, as described in Exhibit A, in order to make firm banking arrangements therefor. The Escrow Agent hereby agrees that upon 3 4134-SI46-2995.1 receipt thereof it will deposit to the credit of the Escrow Fund the Beginning Cash Balance and the Escrow Securities described in Exhibit C. Such deposit, all proceeds therefrom, and all cash balances from time to time on deposit therein (a) shall be the property of the Escrow Fund, (b) shall be applied only in strict conformity with the terms and conditions of this Agreement, and (c) to the extent needed to pay the principal and interest requirements on the Refunded Obligations, are hereby irrevocably pledged to the payment of the principal of and interest on the Refunded Obligations, which payment shall be made by timely transfers of such amounts at such times as are provided for in Section 3.02 hereof. When the final transfers have been made for the payment of such principal of and interest on the Refunded Obligations, any balance remaining in the Escrow Fund shall be transferred to the Issuer for deposit in the interest and sinking fund for the Refunding Bonds. Section 3.02 Pavment of Principal and Interest. The Escrow Agent is hereby irrevocably instructed to transfer, from the cash balances from time to time on deposit in the Escrow Fund, the amounts required to pay the principal of the Refunded Obligations at their respective maturity date or dates as of which such Refunded Obligations have been called for earlier redemption, and interest thereon when due, in the amounts and at the times shown in Exhibit B. Section 3.03 Sufficiencv of Escrow Fund. The Issuer represents, based on the Verification Report, that the successive receipts of the principal of and interest on the Escrow 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 moneys for transfer to each place of payment for the Refunded Obligations, at the times and in the amounts required to pay the interest on the Refunded Obligations as such interest comes due and the principal of the Refunded Obligations as such principal comes due, all as more fully set forth in Exhibit D attached hereto. If, for any reason, at any time, the cash balances on deposit or scheduled to be on deposit in the Escrow Fund shall be insufficient to transfer the amounts required by each place of payment for the Refunded Obligations to make the payments set forth in Section 3.02 hereof, notice of any such insufficiency shall be given promptly as hereinafter provided, but neither the Escrow Agent nor the Issuer shall in any manner be responsible for any insufficiency of funds in the Escrow Fund, unless such insufficiency shall be caused by the Escrow Agent or the Issuer's negligence or willful misconduct. Section 3.04 Trust Funds. The Escrow Agent shall hold at all times the Escrow Fund, the Escrow 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 Escrow Securities or any other assets of the Escrow Fund to be commingled with any other funds or securities of the Escrow Agent; and it shall hold and dispose of the assets of the Escrow Fund only as set forth herein. The Escrow Securities and other assets of the Escrow Fund shall always be maintained by the Escrow Agent as trust funds for the benefit of the owners of the Refunded Obligations, and a special account thereof shall at all times be maintained on the books of the Escrow Agent. The owners of the Refunded Obligations shall be entitled to a preferred claim and first lien upon the Escrow Securities, the proceeds thereof, and all other assets of the Escrow Fund. The amounts received by the Escrow Agent under this Agreement shall not be considered as a banking deposit by the Issuer, and the Escrow Agent shall have no right or title with respect thereto except as a trustee and Escrow Agent under the terms of this Agreement. The amounts received by the Escrow Agent under this Agreement shall not be subject to warrants, drafts or checks drawn by the Issuer or, except to the extent expressly herein provided, by a place of payment for the Refunded Obligations. 4 4134-5146-2995. I Section 3.05 Securitv for Cash Balances. Cash balances from time to time on deposit in the Escrow Fund shall, to the extent not insured by the Federal Deposit Insurance Corporation or its successor, be continuously secured by a pledge of direct noncallable obligations of, or noncallable obligations unconditionally guaranteed by, the United States of America, having a market value at least equal to such cash balances. ARTICLE IV SUBSTITUTION OF ESCROW SECURITIES Section 4.01 In General. Except as provided in Section 4.02 and 4.03 hereof, the Escrow Agent shall not have any power or duty to make substitutions for the Escrow Securities described in Exhibit C, or to sell, transfer, or otherwise dispose of such Escrow Securities. Section 4.02 Substitution of Escrow Securities at Bond Closin�. Concurrently with the sale and delivery of the Refunding Bonds, the Issuer, at its option, may substitute cash or Escrow Securities for the Escrow Securities listed in part III of E�chibit C, but only if such cash and/or Escrow Securities: (a) 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 part III of Exhibit C for which such obligation is substituted, and (b) mature on or before the maturity date of the obligation listed in part III of Exhibit C for which such obligation is substituted. The Issuer may at any time substitute the Escrow Securities listed in part III of Exhibit C which, as permitted by the preceding sentence, were not deposited to the credit of the Escrow Fund, for the cash and/or obligations that were substituted concurrently with the sale and delivery of the Refunding Bonds for such Escrow Securities, provided, that upon any such substitution the Escrow Agent receives (i) a verification report from a firm of independent certified public accountants as to the sufficiency of the Escrow Securities to provide for the payment of the Refunded Obligations (assuming such substitution has been made and assuming a zero percent reinvestment rate), (ii) an opinian of bond counsel or tax counsel to the effect that such substitution shall not affect the tax- exempt status of interest on the Refunded Obligations or the Refunding Bonds and (iii) that such transaction complies with the Constitution and laws of the State of Texas. Section 4.03 Substitution of Escrow Securities following Bond Closing. At the written request of the Issuer, and upon compliance with the conditions hereinafter stated, the Escrow Agent shall sell, transfer, otherwise dispose of or request the redemption of all or any portion of the Escrow Securities and apply the proceeds therefrom to purchase Refunded Obligations or other Escrow Securities. Any such transaction may be effected by the Escrow Agent only if (i) the Escrow Agent shall have received a written opinion from a firm of independent certified public accountants that such transaction will not cause the amount of money and securities in the Escrow Fund to be reduced below an amount which will be sufficient, when added to the interest to accrue thereon and assuming a zero percent reinvestment rate, to provide for the payment of principal of and interest on the remaining Refunded Obligations as they become due, and (ii) the Escrow Agent 4134-5146-2995 I shall have received the unqualified written legal opinion of nationally recognized bond counsel or tax counsel acceptable to the Issuer and the Escrow Agent to the effect that (A) such transaction will not cause any of the Refunding Bonds to be an "arbitrage bond" within the meaning of the Code or otherwise adversely affect the tax-exempt status of the Refunded Obligations or the Refunding Bonds, and (B) that such transaction complies with the Constitution and laws of the State of Texas. The foregoing provisions of substitution notwithstanding, the Escrow Agent shall be under no obligation to effect the substitution of the Escrow Securities in the manner contemplated by Subsection 4.03(a) if the Issuer fails to deliver or cause to be delivered to the Escrow Agent no later than three Business Days prior to the proposed date such substitution is to be effected a written certificate setting forth in reasonable detail the maturity dates and maturity amounts of the Escrow Securities to be substituted and the proposed date such substitution is to occur. Section 4.04 Allocation of Certain Escrow Securities. The maturing principal of and interest on the Escrow Securities may be applied to the payment of any Refunded Obligations and no allocation or segregation of the receipts of principal or interest from such Escrow Securities is required. Section 4.05 Arbitra�e. The Issuer 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 Escrow Securities to be used directly or indirectly to acquire any securities or obligations if the exercise of such power or the acquisition of such securities or obligations would cause any Refunding Bonds or Refunded Obligations to be an "arbitrage bond" within the meaning of Section 148 of the Code. ARTICLE V APPLICATION OF CASH BALANCES Section 5.01 In General. Except as provided in Sections 5.02 and 5.03 hereof, neither the Issuer nor the Escrow Agent shall reinvest any moneys deposited to or held as part of the Escrow Fund. Section 5.02 Reinvestment in SLGS. Cash balances in the Escrow Fund shall be reinvested as set forth on Exhibit E attached hereto. Section 5.03 Reinvestment of Cash Balances. At the written request of the Issuer, and upon compliance with the conditions hereinafter stated, the Escrow Agent shall permit or cause the reinvestment of cash balances in the Escrow Fund, pending the use thereof to pay when due the principal of and interest on the Refunded Obligations, in Escrow Securities which obligations must mature on or before the respective dates needed for payment of the Refunded Obligations. Any such modification must include (a) an opinion of nationally recognized bond counsel or tax counsel that such transaction (i) does not adversely affect the tax-exempt nature of the Refunding Bonds or the Refunded Obligations and (ii) complies with the Constitution and laws of the State of Texas and (b) a verification report by a firm of independent certified public accountants verifying the sufficiency of the Escrow Fund and the yield on the investment thereof. G 4134-5146-2995. I ARTICLE VI RECORDS, REPORTS AND NOTICES Section 6.01 Records. The Escrow Agent will keep books of record and account in which complete and correct entries shall be made of all transactions relating to the receipts, disbursements, allocations and application of the money and Escrow 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 Issuer and the owners of the Refunded Obligations. Section 6.02 Reports. While this Agreement remains in effect, the Escrow Agent at least annually shall prepare and send to the Issuer a written report summarizing all transactions relating to the Escrow Fund during the preceding year, including, without limitation, credits to the Escrow Fund as a result of interest payments on or maturities of the Escrow Securities and transfers from the Escrow Fund for payments on the Refunded Obligations or otherwise, together with a detailed statement of all Escrow Securities and the cash balance on deposit in the Escrow Fund as of the end of such period. ARTICLE VII CONCERNING THE PAYING AGENTS AND ESCROW AGENT Section 7.01 Representations. The Escrow Agent hereby represents that it has all necessary power and authority to enter into this Agreement and undertake the obligations and responsibilities imposed upon it herein, and that it will carry out all of its obligations hereunder. Section 7.02 Limitation on Liabilitv. The liability of the Escrow Agent to transfer funds for the payment of the principal of and interest on the Refunded Obligations shall be limited to the proceeds of the Escrow Securities and the cash balances from time to time on deposit in the Escrow Fund. Notwithstanding any provision contained herein to the contrary, neither the Escrow Agent nor any place of payment for the Ref�nded Obligations shall have any liability whatsoever for the insufficiency of funds from time to time in the Escrow Fund or any failure of the obligors of the Escrow Securities to make timely payment thereon, except for the obligation to notify the Issuer promptly of any such occurrence. The recitals herein and in the proceedings authorizing the Refunding Bonds shall be taken as the statements of the Issuer and shall not be considered as made by, or imposing any obligation or liability upon, the Escrow Agent. The Escrow Agent is not a party to the proceedings authorizing the Refunding Bonds or the Refunded Obligations and is not responsible for nor bound by any of the provisions thereof (except as a place of payment or a paying agendregistrar therefor). In its capacity as Escrow Agent, it is agreed that the Escrow Agent need look only to the terms and provisions of this Agreement. The Escrow Agent makes no representations as to the value, conditions or sufficiency of the Escrow Fund, or any part thereof, or as to the title of the Issuer thereto, or as to the security �rr�i��r�z�i�xi afforded thereby or hereby, and the Escrow Agent shall not incur any liability or responsibility in respect to any of such matters. It is the intention of the parties hereto that the Escrow Agent shall never be required to use or advance its own funds or otherwise incur personal financial liability in the performance of any of its duties or the exercise of any of its rights and powers hereunder. The Escrow Agent shall not be liable for any action taken or neglected to be taken by it in good faith in any exercise of reasonable care and believed by it to be within the discretion or power conferred upon it by this Agreement, nor shall the Escrow Agent be responsible for the consequences of any error of judgment; and the Escrow Agent shall not be answerable for any loss unless the same shall have been through its negligence or willful misconduct. The Escrow Agent may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, written investment direction, statement, instrument, opinion, notice or other paper or document believed by it to be genuine and to have been signed or presented by the proper party. The Escrow Agent need not investigate any fact or matter stated in the document. The Escrow Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents or attorneys and may in all cases pay reasonable compensation to any agent or attorney retained or employed by it in connection therewith. 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 Issuer agrees, to the extent permitted by law, to indemnify, defend, and hold the Escrow Agent and its officers, directors, agents, and employees harmless from and against any and all loss, damage, claim, liability and expense that may be incurred by the Escrow Agent arising out of or in connection with its acceptance or appointment as Escrow Agent hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder except that the Escrow Agent shall not be indemnified for any loss, damage, claim, liability, or expense resulting from its own negligence or willful misconduct. The foregoing indemnification shall survive the termination of this Agreement or the resignation or removal of the Escrow Agent for any reason. Unless it is specifically otherwise provided 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 Issuer with respect to arrangements or contracts with others, with the Escrow Agent's sole duty hereunder being to safeguard the Escrow Fund, to dispose of and deliver the same in accordance with this Agreement. If, however, the Escrow Agent is called upon by the terms of this 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 event of error in making such determination the Escrow Agent shall be liable only for its own willfiil misconduct or its negligence. In determining the occurrence of any such event or contingency the Escrow Agent may request from the Issuer or any 8 4134-5146-2995. I 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 inyuiries of, and consult with counsel, among others, the Issuer at any time. Section 7.03 Compensation. (a) Concurrently with the sale and delivery of the Refunding Bonds, the Issuer shall pay to the Escrow Agent the sum of $[750], the sufficiency of which is hereby acknowledged by the Escrow Agent to pay its fee for performing the services of Escrow Agent hereunder and for all expenses incurred or to be incurred by it as Escrow Agent in the administration of this Agreement. In the event that the Escrow Agent is requested to perform any extraordinary services hereunder, the Issuer 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, and the Escrow Agent hereby agrees to look only to the Issuer for the payment of such fees and reimbursement of such 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 or extraordinary, as Escrow Agent, or in any other capacity, or for reimbursement for any of its expenses. (b) Concurrently with the sale and delivery of the Refunding Bonds, the Issuer shall pay to the Escrow Agent the sum of $[300] per call notice, the sufficiency of which is hereby acknowledged by the Escrow Agent, for all future reasonable fees and expenses for paying agency services relating to the Refunded Obligations for which it serves as the paying agent. The Escrow Agent shall be obligated to make available for the Refunded Obligations amounts from the Escrow Fund sufficient to pay when due the principal of and interest on any Refunded Obligations presented for payment. 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 or extraordinary, as paying agent for any of the Refunded Obligations or for reimbursement for any of its expenses. (c) Upon receipt of the aforesaid specific sums stated in subsections (a) and (b) of this Section, the Escrow Agent shall acknowledge such receipt to the Issuer in writing. Section 7.04 Successor Escrow A�. (a) 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 properly and affairs shall be taken under the control of any state or federal court or administrative body because of insolvency or bankruptcy or for any other reason, a vacancy shall forthwith exist in the office of Escrow Agent hereunder. In such event the Issuer, by appropriate action, promptly shall appoint an Escrow Agent to fill such vacancy. If no successor Escrow Agent shall have been appointed by the Issuer within 60 days, a successor may be appointed by the owners of a majority in principal amount of the Refunded Obligations then outstanding by an instrument or instruments in writing filed with the Issuer, signed by such owners or by their duly authorized attorneys-in-fact. 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 owner of any Refunded Bond may apply to any court of competent jurisdiction to appoint a successor Escrow Agent. Such court may thereupon, after such notice, if any, as it may deem proper, prescribe and appoint a successor Escrow Agent. (b) The Escrow Agent may at any time resign and be discharged from the trust hereby created by giving not less than 60 days' written notice to the Issuer; provided, that, no such 4134-5146-2995. I 0 resignation shall take effect unless: (i) a successor Escrow Agent shall have been appointed by the Issuer as herein provided; (ii) such successor Escrow Agent shall have accepted such appointment; (iii) the successor Escrow Agent shall have agreed to accept the fees currently in effect for the Escrow; and (iv) the Escrow Agent shall have paid over to the successor Escrow Agent a proportional part of the Escrow Agent's fee hereunder. Such resignation shall take effect immediately upon compliance with the foregoing requirements. If within 60 days following the resignation of the Escrow Agent, no successor Escrow Agent shall have been appointed, the Escrow Agent may apply to any court of competent jurisdiction to appoint a successor Escrow Agent. (c) Any successor Escrow Agent shall be: (i) a corporation organized and doing business under the laws of the United States or the State of Texas; (ii) authorized under such laws to exercise corporate trust powers; (iii) have a combined capital and surplus of at least $5,000,000; (iv) subject to the supervision or examination by Federal or State authority and (v) qualified to serve as Escrow Agent under the provisions of Chapter 1207, Texas Government Code, as amended. (d) Any successor Escrow Agent shall execute, acknowledge and deliver to the Issuer and the Escrow Agent an instrument accepting such appointment hereunder, and the Escrow Agent shall execute and deliver an instrument transferring to such successor Escrow Agent, subject to the terms of this Agreement, all the rights, powers and trusts of the Escrow Agent hereunder. Upon the request of any such successor Escrow Agent, the Issuer 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 hereunder. Section 7.05 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) 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, Texas Government Code. The foregoing representation excludes an Escrow Agent and each of its parent company, wholly- or majority-owned subsidiaries, and other affiliates, if any, that the United States government has affirmatively 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. 10 4134-5146-2995. I (b) 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, Texas Government Code. (c) 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 firearm 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 firearm entity or iirearm trade association" has the meaning provided in Section 2274.001(3), Texas Government Code. (d) 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), Texas Government Code. Section 7.06 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. ARTICLE VIII MISCELLANEOUS Section 8.01 Notice. Except as provided in Sections 3.01 and 8.08 hereof, which require actual receipt of notice or consent, as the case may be, any notice, authorization, request, or demand required or permitted to be given hereunder, shall be 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 1201 Dallas, Texas 75225 To the Issuer: City of Lubbock, Texas 1314 Avenue K Lubbock, Texas 79457 Attention: Interim Chief Financial Officer To the Rating Agencies: Moody's Investors Service, Inc. 2200 Ross Avenue Suite 4650 West Dallas, Texas 75201 Attention: Public Finance Department 11 4134-5146-2995.1 Standard & Poor's Rating Group 25 Broadway New York, New York 10004 Fitch Investors Service, L.P. 4514 Cole Avenue, Suite 600 Dallas, Texas 75205 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 provide an electronic address to which notices are to be delivered in lieu of the physical address provided above or change the physical address to which notices are to be delivered by giving to the other party not less than ten (10) days prior notice thereof. Section 8.02 Termination of Responsibilities. Upon the taking of all the actions as described herein by the Escrow Agent, the Escrow Agent shall have no further obligations or responsibilities hereunder to the Issuer, the owners of the Refunded Obligations or to any other person or persons in connection with this Agreement. Section 8.03 Bindin��reement. This Agreement shall be binding upon the Issuer and the Escrow Agent and their respective successors and legal representatives, and shall inure solely to the benefit of the owners of the Refunded Obligations, the Issuer, the Escrow Agent and their respective successors and legal representatives. Section 8.04 Severabilitv. In case any one or more of the provisions contained in this 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 provisions of this Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. In the event any one or more provisions hereof are held to be invalid, illegal or unenforceable the Issuer shall promptly notify each of the rating agencies then maintaining a rating on the Refunded Obligations. Section 8.05 Texas Law Governs. This Agreement shall be governed exclusively by the provisions hereof and by the applicable laws of the State of Texas. Section 8.06 Time of the Essence. Time shall be of the essence in the performance of obligations from time to time imposed upon the Escrow Agent by this Agreement. Section 8.07 Effective Date of A�reement. This Agreement shall be effective upon receipt by the Escrow Agent of the funds described in Exhibit C and the Escrow Securities, together with the specific sums stated in subsections (a) and (b) of Section 7.03 for Escrow Agent and paying agency fees, expenses, and services. Section 8.08 Modification of Agreement. This Agreement shall be binding upon the Issuer and the Escrow Agent and their respective successors and legal representatives and shall inure solely to the benefit of the owners of the Refunded Obligations, the Issuer, the Escrow Agent and their respective successors and legal representatives. Furthermore, no alteration, amendment 12 4134-5146-2995 I or modification of any provision of this Agreement (a) shall alter the firm financial arrangements made for the payment of the Refunded Obligations or (b) shall be effective unless (i) prior written consent of such alteration, amendment or modification shall have been obtained from the owners of all Refunded Obligations outstanding at the time of such alteration, amendment or modification and (ii) such alteration, amendment or modification is in writing and signed by the parties hereto; provided, however, the Issuer and the Escrow Agent may, without the consent of owners of the Refunded Obligations, amend or modify the terms and provisions of this Agreement to cure in a manner not adverse to the owners of the Refunded Obligations any ambiguity, formal defect or omission in this Agreement. Prior notice of any such modification shall be given to each rating agency then maintaining a rating on the Refunded Obligations. ARTICLE IX ACKNOWLEDGMENT OF RECEIPT OF NOTICE Section 9.01 Acknowled�ment of Receipt of Notice of Defeasance and Redemption. The Escrow Agent, by its execution hereof, as paying agent/registrar for the Refunded Obligations set forth on Exhibit A, acknowledges receipt of the ordinance authorizing the issuance of the Refunding Bonds constituting written notice of defeasance and redemption of the Refunded Obligations, and agrees to provide or cause to be provided to the owners thereof notice of defeasance and redemption of such Refunded Obligations as required by the respective ordinances that authorized the issuance of such Refi�nded Obligations. [Execution Page Follows] l3 4134-5146-2995. I IN WITNESS WHEREOF, this Escrow Agreement has been executed in multiple counterparts, each one of which shall constitute one and the same original Agreement, as of the date and year appearing on the first page of this Agreement. CITY OF LUBBOCK, TEXAS �_ AT EST: City Secretary Signature Page for Escrow Agreement 4134-5146-2995. I BOKF, NA By: Name: Title: Signature Page for Escrow Agreement 4134-5146-2995. I INDEX TO EXHIBITS Exhibit A Description of the Refunded Obligations Exhibit B Schedule of Debt Service on Refunded Obligations Exhibit C Description of Beginning Cash Balance and Escrow Securities Exhibit D Escrow Fund Cash Flow Exhibit E Reinvestments in Zero Interest Rate SLGS 4134-5146-2995.1 EXHIBIT A DESCRIPTION OF THE REFUNDED OBLIGATIONS A-1 4134-5146-2995. I EXHIBIT B SCHEDULE OF DEBT SERVICE ON REFUNDED OBLIGATIONS B-1 4134-5146-2995. I EXHIBIT C DESCRIPTION OF BEGINNING CASH BALANCES AND ESCROW SECURITIES I. Cash II. State and Local Government Series Obli at� III. Open Market Securities G1 4134-5146-2995. I EXHIBIT D ESCROW FUND CASH FLOW D-1 4134-5146-2995.1 EXHIBIT E REINVESTMENTS IN ZERO INTEREST RATE SLGS none E-1 4134-5146-2995.1 GENERAL CERTIFICATE We, the undersigned, Mayor, City Manager and City Secretary, respectively, of the City of Lubbock, Texas, do hereby certify the following information: 1. This certificate relates to the City of Lubbock, Texas, Water and Wastewater System Revenue Refunding Bonds, Series 2024 (the "Bonds"). Capitalized terms used herein and not otherwise defined shall have the meaning assigned thereto in the ordinance (the "Ordinance") of the City Council authorizing the issuance of the Bonds. 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 hetd in the City on November 2, 2004. 3. The following are duly qualified and acting, elected or appointed officials of the City of Lubbock, Texas: Mark Mcdrayer, Mayor Christy Martinez-Garcia Gordon Harris David Glasheen Brayden Rose Dr. Jennifer Wilson Tim Collins ) ) ) ) ) ) Members of the Council W. Jarrett Atkinson, City Manager Cheryl Brock, Interim Chief Financial Officer Courtney Pa�, City Secretary 4. Save and except for the pledge of the income and revenues of the City's combined Water and Wastewater System (the "System") to the payment of the principal of and interest to become due with respect to the obligations listed in Exhibit A, the income and revenues of said System have not been pledged or hypothecated in any other manner or for any other purpose; and the above obligations evidence the only liens, encumbrances or indebtedness of said System or against the income and revenues of such System. 5. The debt service requirements for the Bonds and the Previously Issued Bonds are set forth under "Table 8— Water and Wastewater Revenue Bond Debt Service Requirements" included in "APPENDIX A— FINANCIAL INFORMATION REGAkllING THE SYSTEM" to the City's Official Statement prepared in connection with the issuance of the Bonds (the "Official Statement"), and such table is incorporated herein by reference and is true and correct as of the date hereof. 6. The revenues and expenses of the System are set forth under "Table 5— Water and Wastewater Svstem Revenue Bonds Covera�" included in "APPENDIX A— FINANCIAL INFORMATION REGARDING THE SYSTEM" to the Official Statement, and such table is incorporated herein by reference and is true and correct as of the date hereof. 4160-8437-1795.1 7. The rates charged by the System for services provided are set forth under "Table 6 - Monthlv Water Rates" and "Table 7- Monthlv Wastewater Rates" included in "APPENDIX A — FINANCIAL INFORMATION REGARDING THE SYSTEM" to the Offcial Statement, and such table is incorporated herein by reference and is true and correct as of the date hereof 8. The Bonds have been duly and officially executed by the undersigned Mayor and City Secretary with our manual or facsimile signature in the same manner appearing hereon, and the undersigned Mayor and City Secretary hereby adopt and ratify our respective signatures in the manner appearing on each of the Bonds whether in manual or facsimile form, as the case may be, as our true, genuine and official signatures. 9. On the Bond Date and on the date hereof, we were and are the duly qualified and acting officials of the City indicated below. 10. The Mayor and City Secretary have caused the official seal of the City to be impressed, imprinted or lithographed on the Bonds; and said seal on the Bonds has been duly adopted as, and is hereby declared to be, the official sea� of the City. 11. No litigation of any nature is now pending before any federal or state court, or administrative body, or to our knowledge threatened, seeking to restrain or enjoin the issuance or delivery of the Bonds or questioning the issuance or sale of the Bonds, the authority or action of the governing body of the City relating to the issuance or sale of the Bonds, the collection of the revenues of the City's combined Water and Wastewater System (the "System"), or the imposition of rates and charges with respect to the System, pledged to pay the principal of and interest on the Bonds or that otherwise would have a material adverse effect on the financial affairs of the City or the System to pay the Bonds; and that neither the corporate existence or boundaries of the City nor the right to hold office of any member of the governing body of the City or any other elected or appointed official of the City is being contested or otherwise questioned. 12. No authority or proceeding for the issuance, sale or delivery of the Bonds, passed and adopted by the governing body of the City, has been amended, repealed, revoked, rescinded or otherwise modified since the date of passage thereof, and all such proceedings and authority relating to the issuance and sale of the Bonds remain in full force and effect as of the date of this certificate. 13. Except for city buildings and institutions operated by the City, no free services of the System shall be allowed, and rates charged for services furnished by the System shall be equal and uniform as required by law. 14. With respect to the contracts executed in connection with the authorization and issuance of the Bonds, all disclosure iilings 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. [The remainder of this page is intentionally left blank.] 2 4160-8437-1795.1 EXECUTED AND DELIVERED this MANU GNATURE OFFICIAL TITLE Mayor, City of Lubbock, Texas STATE OF TEXAS COUNTY OF LUBBOCK Before me, the undersigned authority, on this day personally appeared Mark McBrayer, Mayor, of the City of Lubbock, Texas, known to me to be such person who signed the above and foregoing certificate in my presence and acknowledged to me that such person executed the above and foregoing certificate for the purposes therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS �, D� � a(�2i�. ,��,,,,,, � �,,, �,,,,�� ,.��( FAL c '�-, , •, P " �`�_t� .;��tY�P(�e�•., �i '. c'�p i .;� C' .a� �.`�; [SEAL]I' �,..3`rq�oF�'' A�`�, ,,, ,. •,.;��o�y5' _ �,�, , ,,. �"''��,,,�� „►,,,,, , otary Public, In and for the State of Texas Signature Page for General Certificate 4160-8437-1795.1 EXECUTED AND DELIVERED this MANUAL SIGNATURE OFFICIAL TITLE � City Manager, City of Lubbock, Texas STATE OF TEXAS COUNTY OF LUBBOCK . Before me, the undersigned authority, on this day personally appeared 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 �� aU� ,`,,�,,,,,,, , ,,,,,,,,,�� ,.•'' p,FZY..FA� C�'•, ;• . •••�Y• • • -. �`�o�c� °�e�••.,'L : 'o : : [SEAL] " �.�'�`�'q 5:'�,�;' � ..?�� ,�. ,,. . A , •,��•�'',�,� ExP �,�� ''��u� �n►u�`',• � otary Public, In and for the State of Texas Signature Page for General Certificate 4160-8437-1795.I EXECUTED AND DELIVERED this MANUAL SIGNATURE OFFICIAL TITLE City Secretary, City of Lubbock, Texas STATE OF TEXAS COUNTY OF LUBBOCK Before me, the undersigned authority, on this day personally appeared Courtney Paz, City Secretary, of the City of Lubbock, Texas, known to me to be such person who signed the above and foregoing certificate in my presence and acknowledged to me that such person executed the above and foregoing certificate for the purposes therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS Cf�%i- ��,,,,,,�,��,,,,,,. ,,,,.•�' �.� Fq (, �''��.,,,, � �P;.��Y�PVeC�2 �: :'� o'• [SEAL] ��'••. �� ,y, �� C,,= ,. '•• � A,�;t�',. , ',•,��'''J�y� � � � E� �� ,`,``` otary Public, In and for the State of Texas Signature Page for General Certifrcate 4160-8437-1795.1 EXHIBIT A WATER AND WASTEWATER SYSTEM OBLIGATIONS 1. Bonds payable from a first lien on and pledge of the Net Revenues of the System: a. Water and Wastewater System Revenue Bonds, Series 2019; b. Water and Wastewater System Revenue Improvement and Refunding Bonds, Series 2019A; c. Water and Wastewater System Revenue Refunding Bonds, Taxable Series 2019B; d. Water and Wastewater System Revenue Bonds, Series 2020A; e. Water and Wastewater System Revenue Refunding Bonds, Series 2020B; f. Water and Wastewater System Revenue Refunding Bonds, Taxable Series 2020C; g. Water and Wastewater System Revenue Bonds, Series 2021; h. Watex and Wastewater System Revenue Bonds, Series 2021A; i. Water and Wastewater System Revenue Bonds, Series 2022; j. Water and Wastewater System Revenue Bonds, Series 2023; and k. the Bonds. 2. Obligations payable from a limited pledge of the revenues Net Revenues of the System: a. Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2014; b. Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2015; c. Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2016; d. Tax and Waterworks System Surplus �Revenue Certifcates of Obligation, Series 2017; e. Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2017A; f. Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2018A; g. Tax and Waterworks System Surplus Revenue Certificates of Obligation, Taxable Series 2018B; h. Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series 2019; i. Combination Tax and Revenue Certificates of Obligation, Series 2020; A-1 4160-8437-1795.1 Combination Tax and Revenue Certificates of Obligation, Series 2021; k. Combination Tax and Revenue Certificates of Obligation, Series 2021 A; l. Combination Tax and Revenue Certificates of Obligation, Series 2023; and m. Combination Tax and Revenue Certificates of Obligation, Series 2024. Signature Page for General Certiftcate 4I60-8437-1795.1 ADDITIONAL BONDS CERTIFICATE This certificate relates to the City of Lubbock, Texas, Water and Wastewater System Revenue Refunding Bonds, Series 2024 (the "Bonds"), dated � ], 2024. Capitalized terms used herein and not otherwise defined shall have the meaning assigned thereto in the ordinance (the "Ordinance"), adopted by the City Council of the City, authorizing the issuance of the Bonds. Pursuant to Section 9.01(a) of the Ordinance, I, the undersigned Interim Chief Financial Officer of the City of Lubbock, Texas (the "City"), do hereby certify: 1. The City is not in default as to any covenant, condition or obligation prescribed by any ordinance authorizing the issuance of Parity Obligations now Outstanding; 2. Each of the special Funds created for the payment and security of the Parity Obligations contains the amount of money and investments required to be on deposit therein; and 3. During the last completed Fiscal Year next preceding the date of delivery of the Bonds, the Net Revenues of the System were equal to at least 1.25 times the maximum annual debt service requirements of the Parity Bonds which will be outstanding upon the issuance of the Bonds as shown in Exhibit A hereto. 4137-1845-6659.1 DATE . 024. Interim Chief Financial Officer City of Lubbock, Texas 4137-1845-6659.1 EXHIBIT A 4137-1845-6659.1 CLOSING CERTIFICATE I, the undersigned City Manager of the City of Lubbock, Texas (the "City"), acting in my official capacity, in connection with the issuance and delivery by the City of Lubbock, Texas, of its Water and Wastewater System Revenue Refunding Bonds, Series 2024 (the "Bonds"), hereby certify that: 1. This certificate is delivered pursuant to the Purchase Contract relating to the Bonds, dated [October 29], 2024 (the "Purchase Contract"), between the City and �] (the "Underwriter"). Capitalized words used herein as defined terms and not otherwise defined herein have the respective meanings assigned to them in the Purchase Contract. 2. The representations and warranties of the City contained in the Purchase Contract are true and correct in all material respects on and as of the date hereof as though made on and as of the date hereof. 3. Except to the extent disclosed in the Offcial Statement, no litigation is pending or, to my knowledge, threatened in any court to restrain or enjoin the issuance or delivery of the Bonds, or the collection or application of any part of the net revenues of the System pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or to restrain or enjoin the City from setting the rates and charges generating the net revenues of the System securing the payment of the Bonds, or in any way contesting or affecting the validity of the Bonds or the City Documents, or contesting the powers of the City or the authorization of the Bonds or the City Documents, or contesting in any way the accuracy, completeness or fairness of the Official Statement. 4. To the best of my knowledge, no event affecting the City has occurred since the date of the Official Statement that should be disclosed in the Official Statement for the purpose for which it is to be used or that it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect. � 5. There has not been any material and adverse change in the affairs or financial condition of the City or the System since September 30, 2023, the latest date as to which audited financial information is available. [Execution Page Follows] 4135-335 I 11067 1 DATED: , 2024. C� -� City nager City of Lubbock, Texas Signature Page for Closing Certificate 4135-3351 �067. I SecNon 11.4 Survival of Defeasance. Notwithstanding any provision in this Tax Certificate or the Ordinances to the contrary, the obligation to remit the Rebate Requirement, if any, to th t of the Treasury and to comply with all other requirements contai survive defeasance of the Obligations. Dated: CITY OF LUBBOCK, TEXAS By: W. Ja tt Atkinson City Manager S-1 Form 8038-G (Rev, 10-2021) 35 36a b c 37 38a b c d 39 40 41a b c d 42 43 44 45a b Page 2 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) .... 35 Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIC). See instructions . . . . . . . . . . . . . . . . . . . . . . . . . 36a Enter the final maturity date of the GIC ►(MM/DD/YYYI� Enter the name of the GIC provider ► Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans to other govemmental units . . . . . . . . . . . . . . . . . . . . . . . . 37 If this issue is a loan made from the proceeds of another tax-exempt issue, check box ►❑ and enter the following information: Enter the date of the master pool bond ►(MM/DD/YYYY) Enter the EIN of the issuer of the master pool bond ► Enter the name of the issuer of the master pool bond ► If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box .... ►❑ If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box ............. ►❑ If the issuer has ident'rfied a hedge, check here ►❑ and enter the following information: Name of hedge provider ► Type of hedge ► Term of hedge ► If the issuer has superintegrated the hedge, check box . . . . . . . . . . . . . . . . . . . . . ► ❑ If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated according to the requirements under the Code and Regulations (see instructions), check box ........ ► ❑ If the issuer has established written procedures to monitor the requirements of section 148, check box ..... ►❑ If some portion of the proceeds was used to reimburse expenditures, check here ►❑ and enter the amount of reimbursement . . . . . . . . . . . . . . ► Enter the date the official intent was adopted ►(MM/DD/YYYY) Under penakies of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowiedge SInature and belief, they are true, c , and complete. 1 further declare that 1 cornsent to the IRS's disclosure of the issuer's return iMormation, as necessary to 9 process this retum, to th rson that I hav thorized above. and COnSellt . W. Jarrett Atkinson, City Manager ' Signature of ' uer's authorized representative Date t Type or print name and title Paid P�nt/fype preparer's name Preparer's signature Date Check ❑ if PT�N Preparer Use Only Barbara Jane League Firm's name ► Orrick, Herrington & Sutclif Firm's address► 609 Main Street, 40th Floor, self-employed p01702522 Firm's EIN ► 94-2952627 Phone no. 713-658-6786 Form ��-Ca (Rev. 10-2021) 4151-2099-7715 The Attorney General of Texas Public Finance Section William P. Clements Building, 9`" Floor 300 West 15th Street Austin, Texas 78701 The Comptroller of Public Accounts Public Finance Division 208 East 10`" Street Austin, Texas 78701 Re: City of Lubbock, Texas — Water and Wastewater System Revenue Refunding Bonds, Series 2024 (the "Bonds") Ladies and Gentlemen: The captioned Bonds are being sent to the Office of the Attorney General, and it is requested that such office examine and approve the Bonds in accordance with law. After such approval, it is requested that the Attorney General deliver the Bonds to the Comptroller of Public Accounts for registration. Enclosed with the Bonds is a signed but undated copy of the GENERAL CERTIFICATE (the "Certificate") relating to the Bonds. The Attorney General is hereby authorized and directed to date the Certificate concurrently with the date of approval of the Bonds. If any litigation or contest should develop pertaining to the Bonds or any other matters covered by said Certificate, the undersigned will notify the Attorney General thereof immediately by telephone. With this assurance the Attorney General can rely on the absence of any such litigation or contest, and on the veracity and currency of said Certificate, at the time the Attorney General approves the Bonds unless the Attorney General is notified otherwise as aforesaid. The Comptroller is hereby requested to register the Bonds as required by law and the proceedings authorizing the Bonds. After such registration, the Comptroller is hereby authorized and directed to deliver the Bonds, together with three copies of each of the Attorney General's Approving Opinion and Comptroller's Certificate for the Bonds, to Jerry V. Kyle, Jr., Orrick, Herrington & Sutcliffe LLP, 200 West 6`h Street, Suite 2250, Austin, TX 78701. [Signature Page to Follow] �irz�rr�xa��:i�i�ri CITY OF LUBBOCK, TEXAS � By: Mayor Signature Page Attorney GenerallComptroller Letter 4 I 64- I I 33-0899, I CITY OF LUBBOCK, TEXAS 1314 Avenue K Lubbock, Texas 79401 �,, 2024 Mr. Tony Hongnoi BOKF, NA 5956 Sherry Lane, Suite 900 Dallas, Texas 75225 Re: City of Lubbock, Texas - Redemption of Outstanding Obligations set forth in Schedule I attached hereto (the "Refunded Obligations") Dear Mr. Hongnoi: The City of Lubbock, Texas (the "City), has elected to exercise its right to redeem certain of the outstanding obligations of the City shown on Exhibit A attached hereto (the "Refunded Obligations") on the dates shown therein. As paying agent/registrar for the Refunded Obligations, you are hereby instructed to send a notice of redemption in connection with the Refunded Obligations in accordance with the ordinances authorizing the issuance of the Refunded Obligations (collectively, the "Ordinances"). The notice and the call for redemption are conditional in all respects upon the closing of the City's Water and Wastewater System Revenue Refunding Bonds, Series 2024, on [November 26], 2024. Please acknowledge receipt of this letter by signing in the space provided. By your acknowledgment hereof, you agree (i) to continue to serve as paying agent for the Refunded Obligations and to limit your remedies for nonpayment of fees under the Paying AgendRegistrar Agreements currently in effect for such Refunded Obligations to an action for amounts due and owing thereunder, and (ii) to provide the notice in accordance with the Ordinances. The Remainder of this Page Intentionally Left Blank. 4163-3550-5747. I CITY OF LUBBOCK, TEXAS By: _ Cheryl Brock Interim Chief Financial Officer Signature Page Instruction Letter to Paying Agent for Refunded Bonds 4163-3550-5747.1