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April 27, 2020 REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF NE0.E121_ANED 4:30 p.m. April 27, 2020 1. MEETING The meeting was called to order at 4:30 p.m. by Mayor Albanese at the Nederland City Office Building, 207 N. 12th Street, Nederland, Texas. See attached for quorum. This meeting was closed to in-person attendance by the public_ A temporary suspension of the Open Meetings Act to allow telephone or videoconference public meetings has been granted by Governor Abbott. Telephonic and videoconferencing capabilities were utilized to allow individuals to address the City Council. The following statement was posted: "PIJRSUANT TO SECTION 30_07, PENAL COBE (TRESPASS BY LICENSE HOLCOER WITH AN OPENLY CARRIES HANC>GIJN), A PERSON LICENSEco IIIV13ER SUBCHAPTER H, CHAPTER 411, GOVERNMENT CODE (HANDGUN LICENSING LAW), MAY NOT ENTER THIS PROPERTY WITH A 1-1ANraGIJN THAT IS CARRIED OPENLY." 2. INVOCATION ANS PLEDGE OF ALLEGIANCE The invocation and pledge of allegiance were led by Gay Ferguson, City Clerk. 3. CONSENT AGENDA - All consent agenda items listed are considered to be routine by the City Council and will be enacted by one motion. There will be no separate discussion of these items unless a councils-nes-sniper so requests, in which event the item will be removed from the Consent Agenda and considered separately. A motion was made by Mayor Pro Tem Neal and seconded by Mayor Albanese to approve the Consent Agenda Items a-la as presented. MOTION CARRIES. Ayes: Mayor Albanese, Councilmembers Austin, Neal, Horner, and Root. Noes: None. a. Minutes - April 6, 2020 regular meeting and April 9, 2020 special meeting. b_ Tax Assessor Collection Report - March 2020 4. REGULAR AGENDA a. A motion was made by councilmember Root and seconded by Councilmember Hollier to amend Ordinance 164, setting the calendar for regular City Council meetings - May 2020 to April 2021. MOTION CARRIE13. Ayes: Mayor Albanese, Councilmembers Austin, Neal, Horner, and Root. Noes: None. Minutes Continued, April 27, 2020 b. A motion was made by Councilmember Austin and seconded by Councilmember Hollier to approve Ordinance No. 2020-10, denying the Distribution Cost Recovery Factor Rate increase request of Entergy Texas, Inc. MOTION CARRIED. Ayes: Mayor Albanese, Councilmembers Austin, Neal, Hollier, and Root. Noes: None. c. A motion was made by Councilmember Hollier and seconded by Councilmember Root to authorize a Request for Proposals for employee group benefits (dental insurance). MOTION CARRIED. Ayes: Mayor Albanese, Councilmembers Austin, Neal, Hollier, and Root. Noes: None. d. A motion was made by Councilmember Austin and seconded by Councilmember Root to approve final payment and release of retainage for the Doornbos Park Lighting project. MOTION CARRIED. Ayes: Mayor Albanese, Councilmembers Austin, Neal, Hollier, and Root. Noes: None. e. A motion was made by Mayor Pro Tern Neal and seconded by Councilmember Hollier to approve a Municipal Financial Advisory Services contract with U.S. Capital Advisors. MOTION CARRIED. Ayes: Mayor Albanese, Councilmembers Austin, Neal, Hollier, and Root. Noes: None. f. A motion was made by Councilmember Austin and seconded by Councilmember Hollier to approve Ordinance No. 2020-11, authorizing the issuance of City of Nederland, Texas, General Obligation Refunding Bonds, Series 2020. MOTION CARRIED. Ayes: Mayor Albanese, Councilmembers Austin, Neal, Hollier, and Root. Noes: None. g. A motion was made by Mayor Pro Tern Neal and seconded by Councilmember Hollier to approve Resolution No. 2020-06, ratifying a Declaration of Local State of Disaster in response to concerns related to the Coronavirus Disease 2019 (COVID- 19) and consenting to continuation of the disaster declaration for a period of more than 7 days. MOTION CARRIED. Ayes: Mayor Albanese, Councilmembers Austin, Neal, Hollier, and Root. Noes: None. 5. COMMUNICATION City Manger's Report: • All staff returned to work today • School crossing guards will continue fire hydrant project • Library will begin curbside service by next Monday • Playgrounds and swimming pool will remain closed Minutes Continued, April 27, 2020 6. ADJOURN There being no further business a motion was made by Mayor Albanese and seconded by Councilmember Austin to adjourn the meeting at 4:57 p.m. MOTION CARRIED. otoitieyes: Mayor Albanese, Councilmembers Austin, Neal, Hollier, and Root. `\\\\\.0. N �� None. .tib• :Qac 4 ' ' ' Q _ �/� '44 �� ' z= ate GEE lit�; ` Don Albanese, Mayor %?OF ����C .�` City of Nederland, Texas 'N1111 111111\\\\ ATTEST: 'AA dieVA /III/ it ay Ferguso', City Clerk City of Nederland, Texas 9 CITY OF NEDERLAND COUNCIL MEETING ATTENDANCE SHEET NAME TITLE PRESENT ABSENT \/- Don Albanese Mayor Talmadge Austin Council Member-Ward I Billy Neal Council Member-Ward II //Emmett Hollier Council Member-Ward III v Sylvia Root Council Member-Ward IV ` / Chris Duque City Manager Gay Ferguson City Clerk v Jesse Branick City Attorney \/ Cheryl Dowden Director of Finance Gary Porter Police Chief Terry Morton Fire Chief \/- Robert Woods Director of Public Works " George Wheeler Building Official V Victoria Klehn Librarian Holly Guidry Human Resources Director v Joni Underwood Executive Secretary Angela Fanette Parks Director 10,-.-t defbrA410. ....____ on Albanese, Mayor GaYergul , City Cler April 27, 2020 Date S0N CO' ALLISON NATHAN GETZ �'ii '�1,. TERRY WUENSCHEL '; / , .! T�ih'.4SSESSOR-COLLECTORCHIEF DEPUTY , .� ; � *,' , '?'EX N STATE OF TEXAS COUNTY OF JEFFERSON I, Allison Nathan Getz, P.C.C., the Tax Assessor-Collector of Jefferson County, Texas and also,by contract or statute, the Tax Assessor-Collector for CITY OF NEDERLAND, affirm, under oath, that this amount $135,448.18, represents all taxes collected for CITY OF NEDERLAND during the month of March 2020. Allison Nathan Getz, P.C.C. JEFFERSON COUNTY COURTHOUSE• P.O.BOX 2112 • BEAUMONT,TEXAS 77704-2112 PHONE: (409)835-8516 • FAX: (409)835-8589 AN AMENDMENT TO ORDINANCE NO. 164 AN ORDINANCE SETTING REGULAR DATES FOR COUNCIL MEETINGS TO BE HELD FROM MAY 11, 2020 THROUGH APRIL 26,2021. NOW,THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NEDERLAND,TEXAS: THAT the following dates will be and are hereby regular meeting dates for the meetings of the City Council of the City of Nederland, Texas. All of the below regular meeting shall begin at 4:30 p.m. on each of the following dates: May 11 and 18, 2020 June 8 and 22, 2020 July 13 and 27, 2020 August 10 and 24, 2020 September 14 and 28, 2020 October 12 and 26, 2020 November 9 and 16, 2020 December 7 and 14, 2020 January 11 and 25, 2021 February 8 and 22, 2021 March 8 and 22, 2021 April 12 and 26, 2021 ANY AND ALL ordinances of the City of Nederland, Texas which conflict with any provisions of this amendment are hereby expressly repealed. „ ,,,,,PASSED AND APPROVED by the City Council at a regular meeting this ‘,.��; 7 2'of,,ApriI, 2020. moi'� � \\%%%�▪ = APS.. i��c _ ; on Albanese, Mayor City of Nederland, Texas nF JEF,ossM.• '` ay Fergustbn, ity ClerlfT-L C1 City of Nederland, Texas APPROVED AS TO FORM AND LEGALITY: Je- a Br- i , City Attorney Ci of ► -derland, Texas ORDINANCE NO. 2020-10 AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF NEDERLAND, TEXAS (`CITY") DENYING THE DISTRIBUTION COST RECOVERY FACTOR RATE INCREASE REQUEST OF ENTERGY TEXAS, INC. FILED ON MARCH 31, 2020; SETTING JUST AND REASONABLE RATES FOR ENTERGY TEXAS, INC. FOR SERVICE WITHIN THE MUNICIPAL LIMITS; FINDING THAT THE MEETING COMPLIES WITH THE OPEN MEETINGS ACT; MAKING OTHER FINDINGS WHEREAS, on or about March 31, 2020, Entergy Texas, Inc. ("Entergy")filed an Application to Amend its Distribution Cost Recovery Factor ("DCRF") with the City to increase electric rates by amending its DCRF rider pursuant to Public Utility Regulatory Act("PURA")Section 36.210;and WHEREAS,the City has exclusive original jurisdiction over the rates, operations, and services of an electric utility within its municipal limits pursuant to PURA Section 33.001(a);and WHEREAS,the jurisdictional deadline for the City to act in this rate matter is May 30,2020;and WHEREAS, Entergy's existing DCRF rider is set to collect approximately $3.2 million per year;and WHEREAS, Entergy's proposed amended Distribution Cost Recovery Factor rider would increase customer rates in the Entergy Service Area by approximately$20.4 million per year,for a total of$23.6 million per year;and WHEREAS,the City retained the Lawton Law Firm, P.C.to review the Company's rate request and make necessary rate recommendations to the City;and WHEREAS, the Lawton Law Firm has recommended that the City deny the Company's request to amend its Distribution Cost Recovery Factor. NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NEDERLAND,TEXAS,THAT: Section 1. That the statement and findings set out in the preamble to this Ordinance are hereby in all things approved and adopted. Section 2. The City of Nederland hereby denies Entergy's request to amend its Distribution Cost Recovery Factor in total. Section 3. The meeting at which this ordinance was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code,Chapter 551. Section 4. This ordinance shall become effective from and after its passage. PASSED AND APPROVED this 27TH day of APRIL,2020. 0011111111111 I 1/4/ s\f, liDei",,„ &1,\-!•••***',:Z•••‘9'-- „:.=/..... • * ”'-i.,..,t):•-0---:-:, f t_illet.3>f*•cl--il• n Albanese,Mayor ':::0.•.VN. /I,I c)F--- City of Nederland,Texas --..:--° '•'''--- ;:\''' ' - ", );•,•*'......•-'1<,- Arr, tISI \‘` FergusoP ay City Clerk City of Nederland,Texas APPROVED AS TO FORM AND LEGALITY: IP Jess: Brani kIty Attorney Cit of N:derland,Texas ---.., 1 411 , CERTIFICATE OF CITY CLERK THE UNDERSIGNED HEREBY CERTIFIES that: 1. On April 27, 2020 the City Council (the "Governing Body") of the City of Nederland, Texas (the "City") convened in regular session, open to the public, at its regular meeting place in the City (the "Meeting"), the duly constituted members of the Governing Body being as follows: Don Albanese Mayor Billy Neal Mayor Pro Tern Talmadge Austin Councilmember Sylvia Root Councilmember Emmett Hollier Councilmember and all of such persons were present at the Meeting, except the following: , thus constituting a quorum. Among other business considered at the Meeting, the attached Ordinance (the"Ordinance") entitled: AN ORDINANCE AUTHORIZING THE ISSUANCE OF "CITY OF NEDERLAND, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020"; LEVYING AN AD VALOREM TAX; APPROVING AN OFFICIAL STATEMENT, AUTHORIZING A TRANSFER AND PAYING AGENCY AGREEMENT, AND AN ESCROW AGREEMENT; AUTHORIZING OFFICIALS TO APPROVE THE AMOUNTS, INTEREST RATES, PRICES AND TERMS THEREOF AND CERTAIN OTHER MATTERS RELATING THERETO; AND OTHER MATTERS IN CONNECTION THEREWITH was introduced and submitted to the Governing Body for passage and adoption. After presentation and discussion of the Ordinance, a motion was made and seconded that the Ordinance be finally passed and adopted. The motion was carried by the following vote: g. voted"For" voted"Against" abstained all as shown in the official Minutes of the Governing Body for the Meeting. 2. The attached Ordinance is a true and correct copy of the original on file in the official records of the City; the duly qualified and acting members of the Governing Body on the date of the Meeting are those persons shown above, and, according to the records of my office, each member of the Governing Body was given actual notice of the time, place, and purpose of the Meeting and had actual notice that the Ordinance would be considered; and the Meeting and deliberation of the aforesaid public business, including the subject of the Ordinance, was posted and given in advance thereof in compliance with the provisions of Texas Government Code chapter 551, as amended. 56497493.2 WITNESS WHEREOF, I have signed my name officially on this p���ay of , 2020. ` 0,1%I IIIII,,,,,,, ��pERLgN�% >-i 44 ��.�f 0:10 �/ :LT,.= lay Fergu fa n, Ci -9 �,:,Qw 1 awti'c`.Y,^ City of Nederland, Texas 56497493.2 Ordinance No. 2020- AN ORDINANCE AUTHORIZING THE ISSUANCE OF "CITY OF NEDERLAND, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020"; LEVYING AN AD VALOREM TAX; APPROVING AN OFFICIAL STATEMENT, AUTHORIZING A TRANSFER AND PAYING AGENCY AGREEMENT, AND AN ESCROW AGREEMENT; AUTHORIZING OFFICIALS TO APPROVE THE AMOUNTS, INTEREST RATES, PRICES AND TERMS THEREOF AND CERTAIN OTHER MATTERS RELATING THERETO; AND OTHER MATTERS IN CONNECTION THEREWITH. CITY OF NEDERLAND, TEXAS Adopted April 27, 2020 56497493.2 3 TABLE OF CONTENTS Page RECITALS 1 ARTICLE ONE THE BONDS Section 1.1. Authorization and Terms; Purpose 2 Section 1.2. Redemption 4 Section 1.3. Execution, Registration by Comptroller, Delivery, and Dating 5 Section 1.4. Registration, Transfer, and Exchange 6 Section 1.5. Mutilated, Destroyed, Lost, and Stolen Bonds 7 Section 1.6. Persons Deemed Owners 8 Section 1.7. Cancellation 8 Section 1.8. Book-Entry Only 8 ARTICLE TWO DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 2.1. Definitions 9 Section 2.2. Notices 13 Section 2.3. Effect of Headings and Table of Contents; Recitals 13 Section 2.4. Ordinance a Contract; Amendments 14 Section 2.5. Benefits of Ordinance 14 Section 2.6. Repealer 14 Section 2.7. Governing Law 15 Section 2.8. Severability 15 Section 2.9. Public Meeting 15 Section 2.10. Authority of Officers 15 Section 2.11. Ancillary Bond Contracts 15 ARTICLE THREE FORMS Section 3.1. Forms Generally 16 Section 3.2. Form of Bond 17 Section 3.3. Form of Registration Certificate of Comptroller of Public Accounts 22 Section 3.4. Form of Certificate of Paying Agent 22 Section 3.5. Form of Assignment 23 Section 3.6. Insurance Legend 23 Section 3.7. Form of Initial Bond 23 56497493.2 -i- TABLE OF CONTENTS (continued) Page ARTICLE FOUR TAXES, REVENUES, AND FUNDS; INVESTMENTS Section 4.1. Debt Service Fund 25 Section 4.2. Deposits to Debt Service Fund; Excess Bond Proceeds 25 Section 4.3. Tax Levy 25 Section 4.4. Investments and Security For Funds 26 Section 4.5. Escrow Agreement; Funding of Defeasance; Redemption of Refunded Obligations 26 ARTICLE FIVE COVENANTS Section 5.1. To Maintain Agency 28 Section 5.2. Covenants to Maintain Tax-Exempt Status 28 Section 5.3. Remedies in Event of Default 32 ARTICLE SIX DEFEASANCE Section 6.1. Discharge of Obligations 33 ARTICLE SEVEN SALE Section 7.1. Sale of the Bonds;Notice of Sale 35 Section 7.2. Payment of Costs of Issuance; Engagement of Bond Counsel 35 Section 7.3. Official Statement 35 ARTICLE EIGHT CONTINUING DISCLOSURE UNDERTAKING Section 8.1. Definitions 36 Section 8.2. Annual Reports 36 Section 8.3. Material Event Notices 36 Section 8.4. Limitations, Disclaimers, and Amendments 37 56497493.2 -11- AN ORDINANCE AUTHORIZING THE ISSUANCE OF "CITY OF NEDERLAND, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020"; LEVYING AN AD VALOREM TAX; APPROVING AN OFFICIAL STATEMENT, AUTHORIZING A TRANSFER AND PAYING AGENCY AGREEMENT, AND AN ESCROW AGREEMENT; AUTHORIZING OFFICIALS TO APPROVE THE AMOUNTS, INTEREST RATES, PRICES AND TERMS THEREOF AND CERTAIN OTHER MATTERS RELATING THERETO; AND OTHER MATTERS IN CONNECTION THEREWITH. RECITALS 1. The City of Nederland, Texas (the "Issuer"), a home-rule city, has duly issued the stated maturities of the obligations (the "Refunded Obligations") described in this Ordinance. 2. The City Council of the Issuer (the "Governing Body") has determined that refunding bonds should be issued in an amount sufficient to discharge and make final payment of the principal of and interest on all of the Refunded Obligations at their respective maturities in order to achieve a present value debt service savings and a gross debt service savings, to be established in the Officer's Pricing Certificate described herein. 3. The Governing Body has determined that it is in the best interests of the Issuer to issue such refunding bonds. 4. The Issuer is empowered by Texas Government Code chapter 1207, as amended, and the Charter of the Issuer to issue the refunding bonds hereinafter authorized for such purposes. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NEDERLAND, TEXAS: 56497493.2 -1- ARTICLE ONE THE BONDS SECTION 1.1. Authorization and Terms; Purpose. A. Authorization, Designation, Principal Amount, Purpose. General Obligation Refunding Bonds of the Issuer shall be and are hereby authorized to be issued in the aggregate principal amount not to exceed $3,000,000 to be designated and bear the title "CITY OF NEDERLAND, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020", for the purpose of providing funds to refund the Refunded Obligations, and to pay costs incurred in connection with the issuance of the Bonds, pursuant to and in conformity with the Constitution and laws of the State of Texas, including particularly, but not by way of limitation, Texas Government Code chapter 1207, as amended. • As authorized by Chapter 1207, Texas Government Code, as amended, the City Manager of the Issuer (and in the absence of the City Manager, the Deputy City Manager of the Issuer) is hereby authorized to act on behalf of the Issuer in selling and delivering the Bonds and carrying out the other procedures specified in this Ordinance, including any additional designation or title by which the Bonds shall be known, the price at which the Bonds will be sold, the date or dates on which the Bonds shall be sold, the form in which the Bonds shall be issued whether as current interest bonds, as compound interest bonds, or as a combination of current interest bonds and compound interest bonds, the years in which the Bonds will mature, the principal amount to mature in each of such years, the aggregate principal amount of the Bonds, the rate of interest to be borne by each such maturity, the first interest payment date or compounding date, as the case may be, the dates, prices, and terms, if any, upon and at which the Bonds shall be subject to redemption prior to maturity at the option of the Issuer, as well as any mandatory sinking fund redemption provisions, all other matters relating to the issuance, sale and mandatory sinking fund redemption provisions, designating an amount of up to $1,000,000 of legally available funds of the Issuer to be used to refund the Refunded Obligations, and all other matters relating to the issuance, sale and delivery of the Bonds, including the refunding of the Refunded Obligations, all of which shall be specified in the Officer's Pricing Certificate for the Bonds, provided that: (i) the price to be paid for the Bonds shall not be less than 90% of the aggregate original principal amount of the Bonds plus accrued interest, if any, thereon from their date to their delivery, (ii) none of the Bonds shall bear interest at an interest rate which results in an initial yield in excess of the maximum rate allowed by Chapter 1204, Texas Government Code, whichever is less, and (iii) the aggregate principal amount of the Bonds shall equal an amount sufficient to provide for the refunding of the Refunded Obligations, which will result in a minimum dollar reduction in aggregate debt service costs to the Issuer on a present value basis of not less than 4.0% based on bond market conditions and available interest rates for the Bonds on the date of the sale of the Bonds, all as set forth in the Officer's Pricing Certificate. 56497493.2 -2- If the condition set forth above cannot be met, the Bonds shall not be issued. The delegation made hereby shall expire if not exercised by the City Manager of the Issuer (or in the absence of the City Manager, the Deputy City Manager of the Issuer) by the close of business on June 30, 2020 B. Denominations, Stated Maturities, Interest Rates. The Bonds shall be issued in fully registered form only, shall have a dated date of June 1, 2020 (unless otherwise provided in the Officer's Pricing Certificate as a later date) (the "Dated Date"), shall be in denominations of $5,000 or any integral multiple (within a Stated Maturity) thereof; and the Bonds are due and payable on September 1 thereafter in each of the years (but not later than September 1, 2031) and in the principal amounts (the "Stated Maturities") and bear interest, computed on the basis of a 360-day year of twelve 30-day months, on the unpaid principal amounts from the Dated Date; or from the most recent Interest Payment Date (hereinafter defined) to which interest has been paid or duly provided for, to the earlier of redemption or Stated Maturity, at per annum rates, all as to be set forth in the Officer's Pricing Certificate. Interest on the Bonds shall be payable semiannually on each September 1 and March 1 (each such date an "Interest Payment Date"), commencing September 1, 2020 (or such later date designated in the Officer's Pricing Certificate), while any of the Current Interest Bonds remain Outstanding. C. Terms of Payment. The principal of and the interest on the Bonds, due and payable by reason of maturity or otherwise, shall be payable only to the Registered Owners appearing on the Security Register maintained by the Paying Agent, and the payment thereof shall be in any coin or currency of the United States of America, which at the time of payment is legal tender for the payment of public and private debts and shall be without exchange or collection charges to the Registered Owners. Principal of the Bonds shall be payable at the Stated Maturities only upon presentation and surrender of the Bonds to the Paying Agent at the Place of Payment. Interest on the Bonds shall be paid to the Registered Owners whose name appears in the Security Register at the close of business on the Record Date and shall be paid by the Paying Agent (i) by check sent United States Mail, first class postage prepaid, to the address of the Registered Owner recorded in the Security Register or (ii) by such other method, acceptable to the Paying Agent, requested by, and at the risk and expense of,the Registered Owner. If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the Paying Agent is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the original date payment was due. In the event of a non-payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent, if and when funds for the payment of such interest have been received from the Issuer. Notice of the Special Record Date and of the scheduled payment date 56497493.2 -3- a of the past due interest ("Special Payment Date"), which shall be 15 days after the Special Records Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each Registered Owner of a Bond appearing on the registration books of the Paying Agent at the close of business on the last business day next preceding the date of mailing of such notice. SECTION 1.2. Redemption. A. Optional and Mandatory Redemption. The Bonds are not subject to redemption at the option of the Issuer prior to Stated Maturity. The Bonds may be subject to mandatory redemption on the Redemption Dates and Redemption Prices as set forth in the Officer's Pricing Certificate. B. Notice of Redemption. The Paying Agent shall mail notice of redemption in the name and at the expense of the Issuer not less than 30 days prior to the Redemption Date to each Registered Owner of Bonds to be redeemed, stating: (1) the Redemption Date, (2) the Redemption Price, (3) the principal amount, the identification (by title, CUSIP number, Stated Maturity, interest rate, and Dated Date) and, in the case of partial redemption, the respective principal amounts and Bond numbers of the Bonds to be redeemed, (4) that on the Redemption Date the Redemption Price of each of the Bonds to be redeemed will become due and payable and that interest thereon ceases to accrue from and after said date, and (5) that the Bonds to be redeemed are to be surrendered for payment of the Redemption Price at the Place of Payment, and the address of such Place of Payment. Neither the failure to give any notice to any Registered Owner nor any defect therein will affect the sufficiency of notice given to Registered Owners as hereinabove stated. Any notice so mailed shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice. Notice having been so given, the Bonds called for redemption shall become due and payable on the specified Redemption Date, and notwithstanding that any Bond or portion thereof has not been surrendered for payment, interest on such Bond or portion thereof shall cease to accrue. C. Payment of the Redemption Price. Upon the surrender of such Bonds for redemption in accordance with such notice, the Paying Agent shall pay such Bonds at the Redemption Price out of money supplied by the Issuer. If any Bond called for redemption is not so paid upon surrender thereof for redemption, the same continues to bear interest from the Redemption Date at the rate borne by such Bond. 56497493.2 -4- D. Partial Redemption. Any Bond which is to be redeemed only in part must be surrendered at the Place of Payment (with, if the Issuer or the Paying Agent so requires, due endorsement by, or written instrument of transfer in form satisfactory to the Issuer and the Paying Agent duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Issuer shall execute and the Paying Agent shall register and deliver to the Holder of such Bond, without service charge, a new Bond or Bonds of the same Stated Maturity and of any authorized denomination or denominations as requested by such Holder in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. SECTION 1.3. Execution, Registration by Comptroller, Delivery, and Dating. The Mayor of the Issuer shall execute the Bonds on behalf of the Issuer and attested by the Clerk of the Issuer. The signature of either of said officers on the Bonds may be manual or facsimile. Bonds bearing the manual or facsimile signatures of individuals who were at the time the proper officers of the Issuer bind the Issuer, notwithstanding that such individuals or either of them cease to hold such offices prior to the certification and delivery of such Bonds. The Mayor of the Issuer is authorized and directed to execute and the Clerk of the Issuer to attest the initial Bond in the name of Cede & Co. The Mayor of the Issuer is further authorized and directed to submit such initial Bond, together with the record of the proceedings authorizing the issuance thereof and any and all other necessary orders, certificates, and records, to the Attorney General of Texas for approval. After the Attorney General has approved such Bonds, the Mayor of the Issuer shall cause such Bonds to be delivered to the Comptroller of Public Accounts of the State of Texas for registration. If requested by the Attorney General or its representatives, or if otherwise deemed necessary to properly evidence the intent of the Issuer in the adoption of this Ordinance, the Mayor or Mayor Pro Tern of the Issuer may make such ministerial changes in the written text of this Ordinance as such officer determines are consistent with the intent and purposes of this Ordinance, which determination shall be final. Upon registration of the Bonds, the Comptroller is authorized and directed to deliver the Bonds in accordance with instructions of the Mayor of the Issuer. At any time thereafter the Issuer may deliver such Bonds to the Paying Agent together with definitive Bonds to be issued in exchange therefor, and the Paying Agent is directed, within not more than five business days following receipt of instructions from the payee named therein designating the Persons, Stated Maturities, and denominations to and in which such Bonds are to be transferred, register and deliver such definitive Bonds as provided in such instructions. The officers or acting officers of the Governing Body are authorized to execute and deliver on behalf of the Governing Body such certificates and instruments as may be necessary to accomplish or in furtherance of the delivery of the Bonds to and payment therefor by the Purchasers. All Bonds registered and delivered by the Paying Agent hereunder are to be dated by the Paying Agent the date of their registration. No Bond is entitled to any right or benefit under this Ordinance, or is valid or obligatory for any purpose, unless there appears on such Bond either a certificate of registration substantially in the form provided in Section 3.3, executed by the Comptroller of Public 56497493.2 -5- Accounts of the State of Texas or his duly authorized agent by manual signature, or a certificate of registration substantially in the form provided in Section 3.4, executed by the Paying Agent by manual signature, and either such certificate upon any Bond is conclusive evidence, and the only evidence, that such Bond has been duly certified or registered and delivered. SECTION 1.4. Registration, Transfer, and Exchange. The Issuer shall cause to be kept at the Place of Payment a register (herein referred to as the "Security Register") in which, subject to such reasonable regulations as the Issuer or the Paying Agent may prescribe,the Paying Agent shall provide for the registration of the Bonds and of transfers of the Bonds as herein provided. Upon surrender or transfer of any Bond at the Place of Payment, the Issuer shall execute, and the Paying Agent shall register and deliver, in the name of the designated transferee or transferees, one or more new Bonds of the same Stated Maturity, of any authorized denominations, and of a like aggregate principal amount. New Bonds registered, and delivered in an exchange or transfer will be delivered by the Paying Agent at the Place of Payment or sent by United Stated mail at the Holder's written request, risk, and expense. At the option of the Holder, Bonds may be exchanged for other Bonds of the same Stated Maturity, of any authorized denominations, and of like aggregate principal amount, upon surrender of the bonds to be exchanged at the Place of Payment. Whenever any Bonds are so surrendered for exchange, the Issuer shall execute, and the Paying Agent shall register and deliver,the Bonds which the Holder of Bonds making the exchange is entitled to receive. Every Bond presented or surrendered for transfer or exchange must be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Paying Agent duly executed, by the Holder thereof or his attorney duly authorized in writing. No service charge may be made to the Holder for any registration, transfer, or exchange of Bonds, but the Issuer or the Paying Agent may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Bonds. Neither the Issuer nor the Paying Agent is required (1) to transfer or exchange any Bond during a period beginning 45 days prior to a Redemption Date hereunder and ending at the close of business on the day of mailing of a notice of redemption or (2) thereafter to transfer or exchange in whole or in part any Bond so selected for redemption. 56497493.2 -6- SECTION 1.5. Mutilated, Destroyed, Lost, and Stolen Bonds. If(1) any mutilated Bond is surrendered to the Paying Agent, or the Issuer and the Paying Agent receive evidence to their satisfaction of the destruction, loss, or theft of any Bond, and (2)there is delivered to the Issuer and the Paying Agent such security or indemnity as they require to save each of them harmless, then, in the absence of notice to the Issuer or the Paying Agent that such Bond has been acquired by a bona fide purchaser, the Issuer shall execute and upon its request the Paying Agent shall register and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost, or stolen Bond, a new Bond of the same Stated Maturity, and of like tenor and principal amount, bearing a number not contemporaneously outstanding. In case any such mutilated, destroyed, lost, or stolen Bond has become or is about to become due and payable, the Issuer in its discretion may pay such Bond instead of issuing a new Bond. Upon the issuance of any new Bond under this Section, the Issuer or the Paying Agent may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith. Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost, or stolen Bond constitutes an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost, or stolen Bond is at any time enforceable by anyone, and the new Bond is entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Bonds. The provisions of this Section are exclusive and preclude (to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost, or stolen Bonds. SECTION 1.6. Persons Deemed Owners. The Issuer and the Paying Agent, and any agent of either, may treat the Registered Owner as the owner of a Bond for purposes of receiving payment of principal and Redemption Price of and (subject to Section 1.3) interest on the Bond and for all other purposes whatsoever, whether or not the Bond is due or overdue, and neither the Issuer nor the Paying Agent, or any agent of either, is affected by notice to the contrary. SECTION 1.7. Cancellation. All Bonds surrendered for payment, redemption, transfer, exchange, or replacement, if surrendered to the Paying Agent, are to be promptly canceled by it and, if surrendered to the Issuer, are to be delivered to the Paying Agent and, if not already canceled, are to promptly be canceled by the Paying Agent. The Issuer may at any time deliver to the Paying Agent for cancellation any Bonds previously certified and delivered which the Issuer acquires in any manner whatsoever, and all Bonds so delivered are to be promptly canceled by the Paying Agent. No Bond may be certified in lieu of or in exchange for any Bond canceled as provided in this Section, except as expressly provided by this Ordinance. All canceled Bonds held by the Paying 56497493.2 -7- Agent are to be disposed of in accordance with the standard document retention policies of the Issuer. SECTION 1.8. Book-Entry Only Notwithstanding the provisions contained in Sections 1.3, 1.4, 1.5, or 1.6 relating to the payment, redemption and transfer/exchange of the Bonds, the Issuer hereby approves and authorizes the use of "Book-Entry Only" securities clearance, settlement and transfer system provided by The Depository Trust Company ("DTC"), a limited purpose trust company organized under the laws of the State of New York, in accordance with DTC's requirements and procedures, and authorizes the Issuer and the Paying Agent to take such as actions as are necessary to qualify the Bonds with DTC and to deliver the Bonds through DTC. Pursuant to the rules and procedures of DTC now in effect, the Bonds shall be deposited with DTC (or with the Paying Agent on behalf of DTC) who shall hold said Bonds for its participants (the "DTC Participants"). While the Bonds are so held, the Registered Owner of the Bonds on the Security Register for all purposes, including payment and notices, shall be Cede & Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each Bond (the "Beneficial Owners") being recorded in the records of DTC and DTC Participants. In the event DTC determines to discontinue serving as securities depository for the Bonds or otherwise ceases to provide book-entry clearance and settlement of securities transactions in general or the Issuer determines that DTC is incapable of properly discharging its duties as securities depository for the Bonds, the Issuer covenants and agrees with the Registered Owners of the Bonds to cause Bonds to be printed in definitive form and provide for the certificated certificates to be issued and delivered to DTC Participants and Beneficial Owners, as the case may be. Thereafter, the Bonds in definitive form shall be assigned, transferred and exchanged on the Security Register maintained by the Paying Agent and payment of such Bonds shall be made in accordance with the provisions of Sections 1.2, 1.3, 1.4, or 1.5. ARTICLE TWO DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 2.1. Definitions For all purposes of this Ordinance, except as otherwise expressly provided or unless the context otherwise requires: (1) The terms defined in this Section have the meanings assigned to them in this Section. (2) All terms defined herein include the plural as well as the singular. 56497493.2 -8- (3) All references in this Ordinance to designated "Articles", "Sections", "Exhibits", and other subdivisions are to the designated Articles, Sections, Exhibits, and other subdivisions of this Ordinance as originally adopted. (4) The words "herein", "hereof', and "hereunder" and other words of similar import refer to this Ordinance as a whole and not to any particular Article, Section, Exhibit, or other subdivision. "Bonds" means any obligation of the Issuer authorized to be issued by Article One, whether initially delivered or issued in exchange for or upon transfer or in lieu of any Predecessor Bond. "Collection Date" means, for any year, the date that annual ad valorem taxes levied by the Issuer in that year. "Dated Date" has the meaning stated in Section 1.1(b). "Debt Service Fund" means the special fund of the Issuer created and established by the provisions of Section 4.1. "Debt Service Requirements" means (i) the interest on the Bonds and (ii) a sinking fund for payment of principal of the Bonds at Stated Maturity or earlier redemption or a sinking fund of 2%(whichever amount is greater). "DTC" means The Depository Trust Company,New York,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 through electronic book-entry changes in the accounts of the DTC Participants, thereby eliminating the need for physical movement of definitive certificates. "Escrow Agent" means BOKF, NA, Dallas, Texas, or any successor thereto under the Escrow Agreement. "Escrow Agreement" means the Escrow Agreement dated as of the Dated Date among the Issuer and the Escrow Agent. "Fiscal Year" means the annual financial accounting period for the Issuer as established by the Issuer on or prior to the date of this Ordinance; provided, however, the Governing Body may change such annual financial accounting period to end on another date if such change if found and determined to be necessary for accounting purposes or is required by applicable law. "Governing Body" means the City Council of the Issuer. 56497493.2 -9- "Governmental Obligations" means (1) direct obligations of, or obligations the timely payment of the principal of and interest on which are fully and unconditionally guaranteed by, the United States of America, or (2) obligations authorized under Texas law from time to time for discharge and final payment of political or governmental obligations which, at the time of deposit have been assigned ratings in the highest rating category by a nationally recognized investment rating firm, but in the case of both Clauses (1) and (2) only if such obligations may not be called for redemption prior to maturity. "Interest Payment Date" means a date specified in the Bonds as a fixed date on which an installment of interest thereon is due and payable. "Issue Date" means the date on which Bonds are first registered and delivered to the Purchasers in exchange for the purchase price therefor. "Issuer" has the meaning stated in the Recitals. "Maturity" when used with respect to any Bond means the date on which the principal of such Bond becomes due and payable as therein provided, whether at the Stated Maturity, by call for redemption, or otherwise. "Officer's Pricing Certificate" shall mean a certificate or certificates to be signed by the City Manager of the Issuer (or in the City Manager's absence, the Assistant City Manager) pursuant to Section 1 hereof, in substantially the form attached hereto as Exhibit B. "Ordinance" means this Ordinance as finally passed and adopted by the Governing Body or as it may from time to time be supplemented, modified, or amended in accordance with the provisions hereof. "Outstanding" when used with respect to Bonds means, as of the date of determination, all Bonds theretofore issued and delivered under this Ordinance, except, without duplication: (1) Canceled Bonds: Bonds theretofore canceled by the Paying Agent or delivered to the Paying Agent for cancellation; (2) Gross Cash Defeasance: Bonds for whose payment or redemption money in the necessary amount has been theretofore deposited with the Paying Agent in trust for the Registered Owner of such Bonds, provided that, if such Bonds are to be redeemed, notice of such redemption has been duly given pursuant to this Ordinance, irrevocably provided for to the satisfaction of the Paying Agent, or waived; (3) Replaced Bonds: Bonds in exchange for or in lieu of which other Bonds have been registered and delivered pursuant to this Ordinance; (4) Paid Missing Bonds: Bonds alleged to have been destroyed, lost, or stolen which have been paid as provided in Section 1.7; and 56497493.2 -10- (5) Net Cash Defeasance: Bonds for the payment of the principal (or Redemption Price) of and interest on which money or Governmental Obligations or both are held by the Paying Agent or other bank or trust company and with the effect specified in Section 6.1; provided, however, that in determining whether the Registered Owners of the requisite principal amount of Bonds Outstanding have given any request, demand, authorization, direction, notice, consent, or waiver hereunder, Bonds owned by the Issuer or any other obligor upon the Bonds are disregarded and deemed not Outstanding, except that, in determining whether the Paying Agent is protected in relying upon any such request, demand, authorization, direction, notice, consent, or waiver, only Bonds which the Paying Agent knows to be so owned are required to be so disregarded. "Paying Agent" means the corporation named as the "Paying Agent" herein until a successor Paying Agent becomes such pursuant to the applicable provisions of this Ordinance, and thereafter"Paying Agent"means such successor Paying Agent. "Person" means any individual, corporation, partnership,joint venture, association,joint- stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof. "Place of Payment" initially means a corporate trust office of the Paying Agent in the City of Dallas, Texas, established, and thereafter means the city so designated from time to time by the Issuer as the"Place of Payment" with notice to the Registered Owners. "Predecessor Bonds" of any particular Bond means every previous Bond evidencing all or a portion of the same debt as that evidenced by such particular Bond, and, for purposes of this definition, any Bond registered and delivered under Section 1.7 in lieu of a mutilated, lost, destroyed, or stolen Bond is deemed to evidence the same debt as the mutilated, lost, destroyed, or stolen Bond. "Purchaser" means the initial purchaser or purchasers of the Bonds designated in accordance with Section 7.1. "Record Date" for the interest payable on any Interest Payment Date means the close of business on the last business day of the calendar month next preceding such Interest Payment Date. "Redemption Date" means the date fixed for redemption of a Bond pursuant to the terms of this Ordinance. "Redemption Price" means the price specified in the Form of Bond in Section 3.2 as the price at which a Bond may be redeemed pursuant to the terms of the Ordinance. "Refunded Obligations" means the Issuer's outstanding obligations identified in Exhibit C hereto that are Outstanding on the date of execution of the Pricing Certificate by a Pricing 56497493.2 -1 1- I Officer(except as any such maturities or bonds within a maturity may be omitted in the Officer's Pricing Certificate). "Registered Owner" mean the registered owner, whose name appears in the Security Register, for any Bond. "Security Register" has the meaning stated in Section 1.4. "Stated Maturity" when used with respect to any Bond means the date specified in such Bond as the fixed date on which the principal of such Bond is due and payable. SECTION 2.2. Notices. Where this Ordinance provides for notice to Registered Owners of any event, such notice is sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first- class postage prepaid, to each Registered Owner, at the address of such Registered Owner as it appears in the Security Register close of business on the date next preceding the date of mailing such notice. Neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Registered Owner affects the sufficiency of such notice with respect to all other Registered Owners. Where this Ordinance provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event with respect to which such notice is given, and such waiver is the equivalent of such notice. Waivers of notice by Registered Owners are to be filed with the Issuer, but such filing is not a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 2.3. Effect of Headings and Table of Contents; Recitals. The section headings herein and in the Table of Contents are for convenience only and do not affect the construction hereof. The Recitals contained in the preamble hereof are hereby found to be true, and such Recitals are hereby made a part hereof for all purposes and are adopted as part of the judgment and findings of the Governing Body. SECTION 2.4. Ordinance a Contract;Amendments. This Ordinance constitutes a contract with the Registered Owners entered into upon the initial purchase of the Bonds, is binding on the Issuer and its successors and assigns whether or not so expressed, and may not be amended or repealed by the Issuer so long as any Bond remains Outstanding except as permitted in this Section. The Issuer may, without the consent of or notice to any Registered Owner, from time to time and at any time amend this Ordinance in any manner not detrimental to the interests of the Registered Owners, including the curing of any ambiguity, inconsistency, or formal defect or omission herein or therein. In addition, the Issuer may, with the written consent of the Registered Owners of a majority in aggregate principal amount of the Bonds then Outstanding affected thereby, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without 56497493.2 -12- the consent of the Registered Owners of all of the affected Outstanding Bonds, no such amendment, addition, or rescission may (1) change the Stated Maturity of the Bonds or any Interest Payment Date for an installment of interest thereon, reduce the principal amount thereof, the Redemption Price therefor, or the rate of interest thereon, change the place or places at, or the coin or currency in, which any Bond or the interest thereon is payable, or in any other way modify the terms or sources of payment of the principal of or interest on the Bonds, (2) give any preference to any Bond over any other Bond, (3) modify any of the provisions of the proviso to the definition of the term "Outstanding", or (4) modify any of the provisions of this Section, except to increase the percentage provided hereby or to provide that certain other provisions of this Ordinance cannot be modified or waived without the consent of the Registered Owner of each Bond affected thereby. Any consent to any amendment hereof by the Registered Owner of any Bond binds every future Registered Owner of the same Bond and the Registered Owner of every Bond issued upon transfer or in lieu thereof or in exchange therefor, in respect of anything done or suffered to be done by the Issuer in reliance thereon, whether or not notation of such action is made upon such Bond. SECTION 2.5. Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or may be construed to confer upon any Person (other than the Issuer and Registered Owners) any right, remedy, or claim, legal or equitable, under or by reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being intended to be and being for the sole and exclusive benefit of the Issuer and the Registered Owners. SECTION 2.6. Repealer. All orders, ordinances, and resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed and declared to be inapplicable to the extent of such conflict, and the provisions of this Ordinance are controlling as to the matters prescribed herein. SECTION 2.7. Governing Law. This Ordinance is to be construed in accordance with and governed by the laws of the State of Texas and the United States of America. SECTION 2.8. Severability. If any provision of this Ordinance or the application thereof to any Person or circumstance is held to be invalid, illegal, or unenforceable, the remainder of this Ordinance and the application of such provision to other Persons and circumstances is nevertheless valid, legal, and enforceable and the Governing Body hereby declares that this Ordinance would have been enacted without such invalid provision or application. 56497493.2 -13- SECTION 2.9. Public Meeting. The Governing Body officially finds, determines, and declares that notice of the adoption of this Ordinance was posted as required by law at a location within the Issuer in a place readily accessible to the general public at all times for at least 72 hours preceding the scheduled time of the meetings at which this Ordinance is read and approved; that such meetings were open to the public; and that public notice of the time, place, and purpose of such meetings was given as required by Texas Government Code chapter 551, as amended. SECTION 2.10. Authority of Officers. The Mayor, the Mayor Pro Tern, the Clerk or any assistant Clerk, City Manager, City Attorney, or Director of Finance of the Issuer, or any of them, are authorized to evidence adoption of this Ordinance and to do any and all things proper and necessary to carry out the intent hereof. SECTION 2.11. Ancillary Bond Contracts. Though such parties may be identified, and the entry into a particular form of contract may be authorized herein, the Governing Body, pursuant to applicable law, hereby delegates to the City Manager of the Issuer the authority to independently select the counterparty to any agreement with any Paying Agent, rating agency, bond insurer, securities depository, Escrow Agent, open market securities bidding agent, verification agent, or any other contract that is determined by the City Manager, the Issuer's financial advisor, or the bond counsel to be necessary or incidental to the issuance of the Bonds as long as each of such contracts has a value of less than the amount referenced in Section 2252.908 of the Texas Government Code (collectively, the "Ancillary Bond Contracts"); and, as necessary, to execute the Ancillary Bond Contracts on behalf and as the act and deed of the Issuer. The Governing Body has not participated in the selection of any of the business entities which are counterparties to the Ancillary Bond Contracts. 56497493.2 -14- 1 ARTICLE THREE FORMS SECTION 3.1. Forms Generally. The Bonds, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be reproduced on the initial Bonds, the Registration Certificate of the Paying Agent to be reproduced on subsequently delivered Bonds, and the form of Assignment to be reproduced on each of the Bonds are to be substantially in the forms set forth in this Article with such appropriate insertions, omissions, substitutions, and other variations as may be necessary or desirable in order to carry out the terms and provisions of this Ordinance, including specifically the series designations, principal amounts, maturities, interest rates, redemption provisions and other terms contained in the Officer's Pricing Certificate, and not otherwise prohibited by this Ordinance. Any portion of the text of any Bonds may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Bond. The Bonds may be printed, lithographed, engraved, typewritten, photocopied, or produced by any combination of these methods, or produced in any other manner, all as determined by the officers executing such Bonds as evidenced by their execution thereof. The initial Bonds to be delivered to the Attorney General may be issued either (i) as a single fully registered Bond in the total principal amount of the Bonds with principal installments to become due and payable as provided in Section 1.1 hereof and numbered consecutively T-1 and upward, or (ii) as fully registered Bonds, being one note for each stated maturity in the applicable principal amount and denomination and to be numbered consecutively from T-1 and upward (hereinafter called the "Initial Bond(s)"). [The remainder of this page intentionally left blank.] 56497493.2 -15- SECTION 3.2. Form of Bond. Unless this bond is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its agent for registration of transfer, exchange, or payment, and any bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED REGISTERED NO. $ United States of America State of Texas CITY OF NEDERLAND, TEXAS, GENERAL OBLIGATION REFUNDING BOND, SERIES 2020 Dated Date: Interest Rate: Stated Maturity: CUSIP NO.: June 1, 2020 REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS The City of Nederland, Texas (hereinafter referred to as the "Issuer"), a body corporate and political subdivision of the State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the order of the Registered Owner named above, or the registered assigns thereof, on the Stated Maturity date specified above the Principal Amount hereinabove stated, and to pay interest on the unpaid principal amount hereof from the Dated Date specified above at the per annum Interest Rate specified above, computed on the basis of a 360-day year of twelve 30-day months; such interest being payable on September 1 and March 1 in each year commencing September 1, 2020 (the "Interest Payment Dates"), and, except as otherwise permitted by the Ordinance hereinafter referred to, to make the payments to the United States of America in the amounts and on the dates therein described when due. Principal of this Bond is payable at its Stated Maturity to the Registered Owner hereof, upon presentation and surrender, at the principal payment office of the Paying Agent executing the Registration Certificate of Paying Agent appearing hereon, which shall initially be BOKF,NA, Dallas, Texas, or its successor. In the event of a non-payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent, if and when funds for the payment of such interest have been received from the Issuer. Notice of the Special Record Date and of the scheduled payment date 56497493.2 -16- of the past due interest ("Special Payment Date"), which shall be 15 days after the Special Records Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each Registered Owner of a Bond appearing on the registration books of the Paying Agent at the close of business on the last business day next preceding the date of mailing of such notice. If the specified date for the payment of the principal of or interest on this Bonds shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the Paying Agent is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the original date payment was due. This Bond is one of the series specified in its title issued in the aggregate principal amount of$2,755,000 (the "Bonds") for the purpose of providing funds to refund certain of the Issuer's outstanding obligations and to pay costs incurred in connection with the issuance of the Bonds, under and in conformity with the Constitution and laws of the State of Texas, including particularly, but not by way of limitation, Texas Government Code chapter 1207, as amended, and pursuant to an Ordinance adopted by the Governing Body of the Issuer (herein referred to as the"Ordinance"). The Issuer shall not have the option of redeeming the Bonds prior to maturity. [Bonds maturing on Mandatory Redemption Date are subject to mandatory redemption prior to maturity in the principal amounts and on the redemption dates set out below, at a price equal to such principal amounts plus accrued interest from the most recent interest payment date to such redemption dates: Bonds maturing September 1, 20_ Redemption Date Principal (September 11 Amount (Stated Maturity) Bonds maturing September 1, 20_ Redemption Date Principal (September 1) Amount (Stated Maturity) Bonds maturing September 1, 20_ Redemption Date Principal (September 11 Amount 56497493.2 -17- I $ (Stated Maturity) Bonds maturing September 1, 20_ Redemption Date Principal September Amount (Stated Maturity) Bonds maturing September 1, 20_ Redemption Date Principal (February 15) Amount (Stated Maturity) Such Bonds to be redeemed shall be selected by lot from and among the Bonds of such maturity then subject to redemption. The Issuer, at its option, may credit against any mandatory sinking fund redemption requirement Bonds of the maturity then subject to redemption which have been purchased and canceled by the Issuer or have been redeemed and theretofore applied as a credit against any mandatory sinking fund redemption requirement.] Notice of any such redemption shall be sent by first-class mail to the Registered Owners thereof at their addresses as shown on the books of registration kept by the Paying Agent not less than 30 days before the date fixed for such redemption. By the date fixed for redemption, due provision shall be made with the Paying Agent for the payment of the redemption price of the Bonds called for redemption. If such notice of redemption is given, and if due provision for such payment is made, all as provided above, the Bonds which are to be so redeemed thereby automatically shall be deemed prior to their scheduled maturities, they shall not bear interest after the date fixed for redemption, and they shall not be regarded as being outstanding for purposes of the Ordinance except for the purpose of being paid by the Paying Agent with the funds so provided for such payment. The Bonds are equally and ratably payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by law, upon all taxable property in the Issuer. Reference is hereby made to the Ordinance, a copy of which is on file with the Paying Agent, and to all of the provisions thereof which the Registered Owner of this Bond by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the tax levied for the payment of the Bonds; the terms and conditions relating to the transfer or exchange of this Bond; the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Registered Owners; the rights, duties, and obligations of the Issuer and the Paying Agent; the terms and provisions upon which this Bond may be redeemed or discharged at or prior to its maturity, and deemed to be no longer 56497493.2 -18- Outstanding thereunder; and for other terms and provisions contained therein. A capitalized term used herein and not otherwise defined has the same meaning as the meaning assigned to such term in the Ordinance. The Ordinance permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Registered Owners of the Bonds under the Ordinance at any time by the Issuer with the consent of the Registered Owners of a majority in aggregate principal amount of such Bonds at the time outstanding affected by such modification. Any such consent by the Registered Owners of this Bond or any Predecessor Bond herefor evidencing the same debt is conclusive and binding upon such Registered Owner and all future Registered Owners of this Bond and of any Bond issued upon the transfer or in lieu hereof or in exchange herefor, whether or not notation of such consent is made upon this Bond. This Bond, subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its presentation and surrender at the principal corporate trust office of the Paying Agent, with the Assignment hereon duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying Agent duly executed by, the Registered Owner hereof, or his duly authorized agent. When a transfer on the Security Register occurs, one or more new fully registered Bonds of the same Stated Maturity, of authorized denominations, bearing the same Interest Rate, and of the same aggregate Principal Amount will be issued by the Paying Agent to the designated transferee or transferees. No service charge may be made for any transfer or exchange of this Bond, but the Issuer or the Paying Agent may require payment of a sum sufficient to cover any tax or governmental charge payable in connection therewith. The Issuer, the Paying Agent, and any agent of either of them may treat the Person in whose name this Bond is registered as the Registered Owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Bond be overdue, and none of the Issuer, the Paying Agent, and any such agent is affected by notice to the contrary. It is hereby certified, recited, represented and declared that the Issuer is a body corporate and political subdivision duly organized and legally existing under and by virtue of the Constitution and laws of the State of Texas; that the issuance of the Bonds is duly authorized by law; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Bonds to render the same lawful and valid obligations of the Issuer have been properly done, have happened, and have been performed in regular and due time, form, and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Bonds do not exceed any Constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Bonds by the levy of a tax as aforestated. In case any provision in this Bond 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. The terms and provisions of this Bond and the Ordinance shall be construed in accordance with and shall be governed by the laws of the State of Texas. 56497493.2 -19- Unless either a Registration Certificate hereon has been executed by the Comptroller of Public Accounts of the State of Texas or his duly authorized agent or by the Paying Agent, respectively, by manual signature, this Bond shall not be entitled to any benefit under the Ordinance or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Issuer has caused this Bond to be duly executed. Dated: CITY OF NEDERLAND, TEXAS ‘124"14-QCOUNTERSIGNED: Mayor ity Clerk [The remainder of this page intentionally left blank.) 56497493.2 -20- SECTION 3.3. Form of Registration Certificate of Comptroller of Public Accounts REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER§ OF PUBLIC ACCOUNTS § § REGISTER NO. THE STATE OF TEXAS § I HEREBY CERTIFY that this Bond has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by the Comptroller of Public Accounts of the State of Texas. WITNESS my signature and seal of office this Comptroller of Public Accounts of the State of Texas (SEAL) Note to Printer: Not to appear on definitive Bonds SECTION 3.4. Form of Certificate of Paying Agent. CERTIFICATE OF PAYING AGENT This Bond has been duly issued under the provisions of the within-mentioned Ordinance; the Bond or Bonds of the above-entitled and designated series originally delivered having been approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts, as shown by the records of the Paying Agent. BOKF,NA as Paying Agent By Authorized Officer Note to Printer: Not to appear on initial Bonds 56497493.2 -21- SECTION 3.5. Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print or typewrite name, address, and zip code of transferee): (Social Security or other identifying number: ) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. DATED: NOTICE: The signature on this assignment must correspond with the name of the registered Signature guaranteed: owner as it appears on the face of the within Bond in every particular. SECTION 3.6. Insurance Legend. If bond insurance is obtained by the Issuer or the Purchaser for the Bonds, the Definitive Bonds and the Initial Bond(s) shall bear the appropriate legend as provided by the Insurer. SECTION 3.7. Form of Initial Bond. The Initial Bond shall be in the form set forth in Section 3.2 except that the form of a single fully registered Bond shall be modified as follows: (i) immediately under the name of the Bond the headings "Interest Rate " and "Stated Maturity " will be omitted, and "CUSIP No." may be omitted; (ii) Paragraph one will read as follows: The City of Nederland, Texas (together with its successors, the "Issuer"), a body politic and political subdivision duly organized and existing under and by virtue of the laws of the State of Texas, for value received, hereby promises to pay to the Registered Owner named above (the "Registered Owner"), or the registered assigns thereof, the hereinabove stated Principal Amount 56497493.2 -22- on September 1 in each of the years and in principal amounts and bearing interest at per annum rates in accordance with the following schedule: Year of Principal Interest Stated Maturity Amount Rate(%) (Information to be inserted from schedule in Officer's Pricing Certificate). (or so much thereof as shall not have been paid upon prior redemption) and to pay interest thereon computed on the basis of a 360-day year of twelve 30-day months to the Person herein specified from the Dated Date specified above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, until such principal is paid or duly provided for on or after such Stated Maturity or any earlier Redemption Date, semiannually on September 1 and March 1 in each year commencing September 1, 2020, at the per annum Interest Rates specified above, computed on the basis of a 360-day year of twelve 30-day months. Principal installments of this Bond are payable at its Stated Maturity or on a prepayment date to the registered owner hereof by BOKF, NA, Dallas, Texas (the "Paying Agent"), upon its presentation and surrender. [The remainder of this page intentionally left blank] 56497493.2 -23- ARTICLE FOUR TAXES, REVENUES,AND FUNDS; INVESTMENTS SECTION 4.1. Debt Service Fund. To pay interest on and to provide a sinking fund for the payment, redemption, and retirement of the Bonds, the Issuer hereby creates and shall maintain solely for such purposes (subject to the provisions of Section 5.2) a special fund designated as its "UNLIMITED GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020 DEBT SERVICE FUND" (the "Debt Service Fund"). The Issuer authorizes and directs its authorized officials to withdraw from the Debt Service Fund and to transfer to the Paying Agent money on deposit in the Debt Service Fund sufficient to pay the amount of principal or interest falling due on the Bonds, such transfer of funds to the Paying Agent to be made in such manner as will cause immediately available funds to be deposited with the Paying Agent on or before the last business day next preceding each interest and principal payment date for the Bonds. SECTION 4.2. Deposits to Debt Service Fund; Excess Bond Proceeds. The Issuer shall deposit accrued interest and premium, if any, received from the Purchaser and ad valorem taxes levied and collected to pay principal or Redemption Price of or interest on the Bonds to the Debt Service Fund. In addition, the Issuer shall deposit any surplus proceeds, including investment income therefrom, from the sale of the Bonds not expended for authorized purposes to the Debt Service Fund. SECTION 4.3. Tax Levy. To provide for the payment of the Debt Service Requirements, the Issuer levies and shall levy for the current year and each succeeding year thereafter while the Bonds or any interest thereon is Outstanding, a sufficient tax on each $100 of taxable property in the Issuer, adequate to pay such amounts or a sinking fund of 2% (whichever amount is greater), full allowance being made for delinquencies and costs of collection. Such tax shall be assessed and collected each year, and the same may not be diverted to any other purpose. The Issuer shall pay the taxes so levied and collected into the Debt Service Fund. The Governing Body hereby declares its purpose and intent to provide and levy such tax, it having been determined that the existing and available taxing authority of the Issuer for such purpose is adequate to permit a legally sufficient tax in consideration of all other outstanding indebtedness. The Issuer shall determine the amount of taxes to be provided annually for the Debt Service Requirements in the following manner: A. Prior to establishing the annual tax rate, the Governing Body shall determine: (1) the amount of Debt Service Requirements to become due and payable on the Bonds between the Collection Date for the taxes then to be levied and the Collection Date for the taxes to be levied during the next succeeding calendar year; and 56497493.2 -24- (2) the amount on deposit in the Debt Service Fund (including surplus Bond proceeds transferred to the Debt Service Fund under Section 4.2) after deducting therefrom the total amount of Debt Service Requirements to become due on Bonds prior to the Collection Date for the ad valorem taxes then to be levied. B. The Issuer shall assess and levy annually each year a tax to pay the Debt Service Requirements sufficient to provide tax revenues in the amount established in paragraph(1) above less the sum total of the amount established in paragraph (2), after taking into consideration delinquencies and costs of collecting such annual taxes. Texas Government Code chapter 1208 applies to the issuance of the Bonds and the pledge of the tax revenues granted hereunder, and such pledge is therefore valid, effective, and perfected. If Texas law is hereafter amended at any time while the Bonds are Outstanding and unpaid so that the pledge of taxes hereunder is 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 Issuer 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 filing to perfect the security interest in such pledge to occur. SECTION 4.4. Investments and Security For Funds. The Issuer is required to keep all money in such funds and accounts at a depository of the Issuer except when invested pursuant to this Section. Subject to Section 5.2, money in any fund established by this Ordinance may, at the option of the Issuer, be invested in a manner permitted by the provisions of the Public Funds Investment Act of 1987, Texas Government Code chapter 2256, subchapter A, as then in effect, the Public Funds Collateral Act, Texas Government Code chapter 2257, as then in effect, or by any other law applicable to the Issuer; provided that all such investments must be made so that money required to be expended will be available at the proper time or times. The Issuer shall credit or debit all interest and income or losses from deposits and investments in any fund or account established pursuant to the provisions of this Ordinance shall be credited to such fund or account. The Issuer shall sell investments promptly as necessary to prevent any default in connection with the Bonds. All money on deposit in the funds for which this Ordinance makes provision (except any portion thereof as may be at any time properly invested as provided herein) shall be secured in the manner and to the fullest extent required by the laws of Texas for the security of public funds, and money on deposit in such funds shall be used only for the purposes permitted by this Ordinance. SECTION 4.5. Escrow Agreement; Funding of Defeasance; Redemption of Refunded Obligations. A. Authorization of Escrow Agreement. The terms and provisions of the Escrow Agreement are hereby approved, and the Mayor and the Mayor Pro Tern of the Issuer, or either of them, and the Clerk and any Assistant or Acting Clerk of the Issuer, or any of them, are 56497493.2 -25- hereby authorized to execute and deliver the Escrow Agreement substantially in the form and to the effect presented to the Governing Body on the date of adoption of this Ordinance, but with such changes therein as the Mayor or the Mayor Pro Tern may approve, such approval to be conclusively evidenced by the execution thereof by such officer, all as the act and deed of the Governing Body, and the Governing Body further approves the purchase of the securities to be held by the Escrow Agent pursuant to the Escrow Agreement and authorizes the Mayor and the Mayor Pro Tern, or either of them, to take such action in furtherance of the purchase of such securities as may be necessary or advisable. B. Funding of Defeasance. Promptly after the delivery of the Bonds, an amount as specified in the Escrow Agreement is to be deposited in immediately available funds to the escrow fund established with the Escrow Agent pursuant to the Escrow Agreement and used for the purposes of providing for the full and complete discharge and final payment of all the outstanding Refunded Obligations and appurtenant coupons. The Governing Body hereby finds and determines, after consultation with the engineer for the Issuer, that amounts held in any construction fund for the Refunded Obligations are necessary for the purposes for which the Refunded Obligations were issued and as a reasonable contingency, repair, and replacement fund for the facilities financed thereby. The Governing Body hereby further finds and determines that amounts held in the interest and sinking fund of the Issuer in excess of the amount specified in the Escrow Agreement are reasonably required to insure timely payment of debt service on tax- supported obligations of the Issuer and that all amounts held in the operating fund of the Issuer are reasonably required to pay costs of operating and maintaining the properties of the Issuer. The Governing Body therefore finds and determines that none of the amounts held in the Construction Fund or such interest and sinking fund or operating fund are surplus or should be applied to purchase the securities held by the Escrow Agent under the Escrow Agreement, except the amount specified in the Escrow Agreement. Promptly after the delivery of the Bonds, sufficient proceeds received from the sale of the Bonds, together with other legally available funds from the Issuer's debt service funds held for payment of the Refunded Obligations, is to be deposited in immediately available funds to the escrow fund established with the Escrow Agent pursuant to the Escrow Agreement and used for the purposes of providing for the full and complete discharge and final payment of all the outstanding Refunded Obligations and appurtenant coupons. C. Redemption of Refunded Obligations. Subject to the sale of the Bonds and the execution of the Officer's Pricing Certificate designating the Refunded Bonds, the Issuer hereby irrevocably exercises its option to call for redemption, and hereby calls for redemption, on the earliest date on which each series of Refunded Obligations may be called for redemption, as established in the Officer's Pricing Certificate, the Refunded Obligations as described in the Escrow Agreement. The Mayor and the Mayor pro-tern of the Issuer, or either of them, are authorized and instructed to give or effect notice of such redemption to the paying agent for the Refunded Obligations to be so redeemed by delivery of a certified copy of this Ordinance and to the holders of such Refunded Obligations and appurtenant coupons, by publication or mail in the manner described in such bonds, promptly on or after the Issue Date. The Governing Body hereby authorizes and instructs the officers of the Governing Body, the paying agent for the Refunded Obligations, and the Escrow Agent to take such steps as are necessary to accomplish 56497493.2 -26- the redemption and the discharge of the Refunded Obligations in accordance with the provisions hereof. [The remainder of this page is intentionally left blank.] 56497493.2 -27- ARTICLE FIVE COVENANTS SECTION 5.1. To Maintain Agency. The Issuer will at all times maintain an agency in the State of Texas meeting the qualifications herein described, for the performance of the duties of the Paying Agent hereunder. BOKF, NA, Dallas, Texas, is hereby appointed Paying Agent for such purposes. The Paying Agent may be removed from its duties hereunder at any time upon not less than 30 days notice with or without cause by action of the Governing Body entered in its minutes, but no such removal is effective until such successor has accepted the duties of the Paying Agent hereunder by written instrument. Every Paying Agent appointed hereunder must at all times be a commercial bank or trust company organized and doing business under the laws of the United States of America or of any state, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $10,000,000, subject to supervision or examination by federal or state authority, and registered as a transfer agent with the Securities and Exchange Commission. If such corporation publishes reports of condition at least annually pursuant to law or to the requirements of such supervising or examining authority, then for the purposes of this Section the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Upon any change in the Paying Agent, the Issuer agrees to promptly cause a written notice thereof to be sent to each Registered Owner affected by the change, which notice shall also give the address of the new Paying Agent, which shall thereafter be the designated Place of Payment. The terms of the Transfer and Paying Agency Agreement (the "Paying Agency Agreement") with the initial Paying Agent are hereby approved in substantially the form and to the effect presented to the Governing Body on this date, and the Mayor and the Mayor Pro Tem of the Issuer, or either of them, and the Clerk and any Assistant or Acting Clerk of the Issuer, or any of them, are hereby authorized to execute and deliver such Transfer and Paying Agency Agreement. SECTION 5.2. Covenants to Maintain Tax-Exempt Status. A. Definitions. When used in this Section, the following terms have the following meanings: "Closing Date" means the date on which the Bonds are first authenticated and delivered to the initial purchasers against payment therefor. "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, effective on or before the Closing Date. "Computation Date"has the meaning set forth in Section 1.148-1(b) of the Regulations. 56497493.2 -28- "Gross Proceeds" means any proceeds as defined in Section 1.148-1(b) of the Regulations, and any replacement proceeds as defined in Section 1.148-1(c) of the Regulations, of the Bonds. "Investment"has the meaning set forth in Section 1.148-1(b) of the Regulations. "Nonpurpose Investment"means any investment property, as defined in section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested and which is not acquired to carry out the governmental purposes of the Bonds. "Rebate Amount"has the meaning set forth in Section 1.148-1(b)of the Regulations. "Regulations" means any proposed, temporary, or final Income Tax Regulations issued pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code of 1954, which are applicable to the Bonds. Any reference to any specific Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation designed to supplement, amend or replace the specific Regulation referenced. "Yield"of (1) any Investment has the meaning set forth in Section 1.148-5 of the Regulations; and (2) the Bonds has the meaning set forth in Section 1.148-4 of the Regulations. B. Not to Cause Interest to Become Taxable. The Issuer shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction, or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner which, if made or omitted, respectively, would cause the interest on any Bond to become includable in the gross income, as defined in section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the Issuer shall have received a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the exemption from federal income tax of the interest on any Bond, the Issuer shall comply with each of the specific covenants in this Section. C. No Private Use or Private Payments. Except as permitted by section 141 of the Code and the Regulations and rulings thereunder, the Issuer shall at all times prior to the last Stated Maturity of Bonds: (1) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Bonds (including property financed with Gross Proceeds of the Refunded Obligations), and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the 56497493.2 -29- United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Bonds or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds (including property financed with Gross Proceeds of the Refunded Obligations), other than taxes of general application within the Issuer or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. D. No Private Loan. Except to the extent permitted by section 141 of the Code and the Regulations and rulings thereunder, the Issuer shall not use Gross Proceeds of the Bonds to make or finance loans to any Person other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if (1) property acquired, constructed, or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes, (2) capacity in or service from such property is committed to such Person under a take-or-pay, output, or similar contract or arrangement, or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed, or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. E. Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the Issuer shall not, at any time prior to the final Stated Maturity of the Bonds, directly or indirectly invest Gross Proceeds of the Bonds in any Investment (or use such Gross Proceeds to replace money so invested), if as a result of such investment the Yield of any Investment acquired with Gross Proceeds (or with money replaced thereby) whether then held or previously disposed of, exceeds the Yield of the Bonds. F. Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the Code and the Regulations and rulings thereunder, the Issuer shall not take or omit to take any action which would cause the Bonds to be federally guaranteed within the meaning of section 149(b) of the Code and the Regulations and rulings thereunder. G. Information Report. The Issuer shall timely file with the Secretary of the Treasury the information required by section 149(e) of the Code with respect to the Bonds on such form and in such place as such Secretary may prescribe. H. Payment of Rebatable Arbitrage. Except to the extent otherwise provided in section 148(f) of the Code and the Regulations and rulings thereunder,the Issuer shall: (1) account for all Gross Proceeds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of such accounting for at least six years after the final Computation Date. The Issuer may, 56497493.2 -30- however, to the extent permitted by law, commingle Gross Proceeds of the Bonds with other money of the Issuer, provided that the Issuer separately accounts for each receipt and expenditure of such Gross Proceeds and the obligations acquired therewith. (2) calculate the Rebate Amount, not less frequently than each Computation Date, in accordance with rules set forth in section 148(f) of the Code and the Regulations, and the rulings thereunder. The Issuer shall maintain a copy of such calculations for at least six years after the final Computation Date. (3) as additional consideration for the purchase of the Bonds by the Purchasers thereof and the loan of the money represented thereby, and in order to induce such purchase by measures designed to ensure the excludability of the interest thereon from the gross income of the owners thereof for federal income tax purposes, pay to the United States the amount that when added to the future value of previous rebate payments made for the Bonds equals (i) in the case of a Final Computation Date as defined in Section 1.148-3(e)(2) of the Regulations, one hundred percent (100%) of the Rebate Amount on such date; and (ii) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such date, at the times, in the installments, to the place, in the manner and accompanied by such forms or other information as is or may be required by section 148(f) of the Code and the Regulations and rulings thereunder, and (4) exercise reasonable diligence to assure that no errors are made in the calculations required by paragraphs (2) and (3) and, if such error is made, to discover and promptly to correct such error within a reasonable amount of time thereafter (and in all events within 180 days after discovery of the error), including payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty required by Treas. Reg. § 1.148-3(h). To the extent authorized by law, when used herein the term "interest" includes all payments due to the United States of America pursuant to this Subsection. The Issuer shall not invest Gross Proceeds in amounts and for such period of time such that the amounts due to the United States of America pursuant to this Section, when aggregated with other interest payable on the Bonds, shall cause the "net effective interest rate" on the Bonds, to exceed 15% per annum. I. Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the Issuer shall not, at any time prior to the earlier of the final Stated Maturity or final payment of the Bonds enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection(G) of this Section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the Yield of the Bonds not been relevant to either party. J. Elections. The Issuer hereby directs and authorizes the Mayor, Mayor Pro Tern, Clerk, City Manager, Attorney, or Director of Finance of the Issuer, either or any combination of the foregoing, to make such elections in the Certificate as to Tax Exemption or similar or other 56497493.2 -31- appropriate certificate, form, or document permitted or required pursuant to the provisions of the Code or Regulations as they deem necessary or appropriate in connection with the Bonds. Such elections are deemed made on the Issue Date. K. Bonds Not Hedge Bonds. (1) At the time the original bonds refunded by the Bonds were issued, the Issuer reasonably expected to spend at least 85% of the spendable proceeds of such bonds within three years after such bonds were issued. (2) Not more than 50% of the proceeds of the original bonds refunded by the Bonds were invested in Nonpurpose Investments having a substantially guaranteed Yield for a period of 4 years or more. SECTION 5.3. Remedies in Event of Default. In addition to all the rights and remedies provided by the laws of the State of Texas, the Issuer covenants and agrees particularly that in the event the Issuer (a) defaults in the payments to be made to the Debt Service Fund, or (b) defaults in the observance or performance of any other of the covenants, conditions, or obligations set forth in this Ordinance, the Registered Owners of any of the Bonds shall be entitled to seek a writ of mandamus issued by a court of proper jurisdiction compelling and requiring the governing body of the Issuer and other officers of the Issuer to observe and perform any covenant, condition, or obligation prescribed in this Ordinance. 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 and power may be exercised from time to time and as often as may be deemed expedient. The specific remedies herein provided shall be cumulative of all other existing remedies and the specification of such remedies shall not be deemed to be exclusive. [The remainder of this page intentionally left blank.] 56497493.2 -32- ARTICLE SIX DEFEASANCE SECTION 6.1. Discharge of Obligations. Any Bond is deemed paid and is no longer considered to be a Bond within the meaning of this Ordinance when payment of the principal of and interest on such Bond to the Stated Maturity thereof or (if notice of redemption has been duly given, irrevocably provided for, or waived as provided herein) to the Redemption Date has been made or has been provided for by deposit with the Paying Agent or an escrow agent for such payment (or with any other bank or trust company which has agreed to hold the same for such purpose) (1) money sufficient to make such payment, (2) Governmental Obligations certified by an independent public accounting firm of national reputation to be of such maturities and interest payment dates and to bear such interest as will, without further investment or reinvestment of either the principal amount thereof or the interest earnings therefrom, be sufficient to make such payment, or (3) a combination of money and Governmental Obligations together so certified sufficient to make such payment, provided that all the expenses pertaining to the Bonds with respect to which such deposit is made have been paid or the payment thereof provided for to the satisfaction of the Paying Agent (and to such other bank or trust company). If such deposit is made with respect to some but not all of the Bonds then Outstanding, the Issuer shall designate the Stated Maturities of Bonds with respect to which such deposit is made. If such deposit is sufficient so to provide for the payment of the principal of and interest on some but not all Outstanding Bonds of a particular Stated Maturity so designated, the Paying Agent shall select the Outstanding Bonds of such Stated Maturity with respect to which such deposit is made by such random method as the Paying Agent deems fair and appropriate and which may provide for the selection of portions (equal to and leaving unredeemed an authorized denomination)of Bonds a denomination larger than $5,000. Notwithstanding anything herein to the contrary, no such deposit has the effect described in this Section (a) if made during the subsistence of a default in the payment of any Bond unless made with respect to all of the Bonds then Outstanding or (b) unless accompanied by an opinion of counsel of recognized standing in the field of federal income taxation to the effect that neither such deposit nor the investment thereof adversely affects the excludability of interest on any Bond from the gross income of any owner thereof for federal income tax purposes. The Paying Agent (or other bank or trust company) with which a deposit is made of money and Governmental Obligations for such purpose shall hold the deposit in a segregated account in trust or escrow for the Registered Owners of the Bonds with respect to which such deposit is made and, together with any investment income therefrom, the deposit may be disbursed solely to pay the principal of and interest on such Bonds when due, except that cash receipts may be withdrawn and paid to the Issuer provided the date and amount of such withdrawals are taken into account in the most recent verification of the accounting firm referred to in this Section. No money or Governmental Obligations so deposited may be invested or reinvested unless in Governmental Obligations and unless such money and Governmental Obligations not invested and such new investments are together certified by an independent 56497493.2 -33- public accounting firm of national reputation to be of such amounts, maturities, and interest payment dates and to bear such interest as will, without further investment or reinvestment of either the principal amount thereof or the interest earnings therefrom, be sufficient to make such payment. At such times as a Bond is deemed to be paid hereunder, as aforesaid, it is no longer entitled to the benefits of this Ordinance, except for the purposes of any such payment from such money or Governmental Obligations and for the provisions of Sections 1.4 and 1.7 and for the continuing compliance of the Issuer with the provisions of Section 5.2. [The remainder of this page intentionally left blank] 56497493.2 -34- ARTICLE SEVEN SALE SECTION 7.1. Sale of the Bonds; Notice of Sale. The sale of the Bonds to the Purchasers specified in the Officer's Pricing Certificate (collectively, the "Purchaser", having all the rights, benefits, and obligations of a Registered Owner), at the price specified in the Officer's Pricing Certificate, is confirmed and determined to be in compliance with the terms of the Notice of Sale. SECTION 7.2. Payment of Costs of Issuance; Engagement of Bond Counsel. The Issuer has in consultation with its financial advisor, First Southwest Company, set aside an amount of the proceeds of the Bonds to pay Costs of Issuance of the Bonds. The amount of such proceeds will be designated in a closing letter prepared by the financial advisor, and in the absence of contrary written instructions included as part of such closing letter to deposit such proceeds with the Issuer, the Paying Agent will pay such costs of issuance on behalf of the Issuer in accordance with invoices which conform to the instructions in the closing letter. The Issuer hereby confirms engagement of Norton Rose Fulbright US LLP as Bond Counsel ("Bond Counsel") for the Issuer in accordance with the terms of the Letter of Engagement between the Issuer and Bond Counsel. SECTION 7.3. Official Statement. The Governing Body hereby authorizes and approves, in connection with the sale of the Bonds, the preparation and distribution of a Preliminary Official Statement, Notice of Sale and Bidding Instructions relating to the Bonds, and a final Official Statement containing such additional information and amendments as may be necessary to conform to the terms of the Bonds, the Officer's Pricing Certificate, and this Ordinance. The Issuer hereby ratifies and confirms that the Preliminary Official Statement approved by this Section constitutes an Official Statement of the Issuer with respect to the Bonds that was deemed "final" by the Issuer as of its date, except for the omission of no more than the information permitted by Subsection(b)(1) of Rule 15c2-12 of the Securities and Exchange Commission. The proper officials of the Issuer are hereby authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed therein. [The remainder of this page intentionally left blank] 56497493.2 -35- ARTICLE EIGHT CONTINUING DISCLOSURE UNDERTAKING SECTION 8.1. Definitions. As used in this Article, the following terms have the meanings ascribed to such terms below: "EMMA" means the Electronic Municipal Marketing System. "MSRB"means the Municipal Securities Rulemaking Board. "Rule" means SEC Rule 15c2-12, as amended from time to time or officially interpreted by the SEC. "SEC" means the United States Securities and Exchange Commission. SECTION 8.2. Annual Reports. The Issuer shall provide annually certain updated financial information and operating data to the MSRB through EMMA, within six months after the end of each fiscal year of the Issuer ending on or after September 30, 2020. The information to be updated includes all quantitative financial information and operating data of the general type included in the Official Statement, being the information described in Exhibit A hereto. Any financial statements so to be provided shall be (1) prepared in accordance with the accounting principles set forth in Appendix A to the Official Statement, or as may otherwise hereafter be established consistent with Texas law and Generally Accepted Accounting Principles, and (2) audited, if the Issuer commissions an audit of such statements and the audit is completed within the period during which they must be provided. If audited financial statements are not so provided, then the Issuer shall provide audited financial statements for the applicable fiscal year to the MSRB through EMMA, when and if audited financial statements become available but if such audited financial statements are unavailable the Issuer will provide such financial statements on an unaudited basis within the above-described six-month period. If the Issuer changes its fiscal year, it will notify the MSRB through EMMA of the change (and of the date of the new fiscal year end) prior to the next date by which the Issuer otherwise would be required to provide financial information and operating data pursuant to this Section. SECTION 8.3. Material Event Notices. The Issuer shall notify the MSRB through EMMA of any of the following events with respect to the Bonds in a timely manner, and not more than 10 business days after occurrence of the event: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults, if material; 56497493.2 -36- 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. 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-exempt status of the Bonds, or other material events affecting the tax status of the Bonds; 7. Modifications to rights of Registered Owners of the Bonds, if material; 8. Bond calls, if material, and tender offers; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Bonds; if material; 11. Rating changes; 12. Bankruptcy, insolvency, receivership, or similar event of the Issuer, which shall occur as described below; 13. The consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of its assets, other than in the ordinary course of business, the entry into of 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; 14. Appointment of a successor or additional trustee or the change of name of a trustee, if material; 15. Incurrence of a financial obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the obligated person, any of which affect security holders, if material; and 16. Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of the financial obligation of the obligated person, any of which reflect financial difficulties. For these purposes, (a) any event described in the immediately preceding paragraph (12) is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the Issuer in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Issuer, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers of the Issuer 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 Issuer, and (b) the Issuer intends the words used in the immediately preceding paragraphs (15) and (16) and the definition of "Financial Obligation" means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) 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 56497493.2 -37- 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. The Issuer shall notify the MSRB via EMMA, in a timely manner, of any failure by the Issuer to provide financial information or operating data in accordance with Section 8.2 by the time required by such Section. SECTION 8.4. Limitations, Disclaimers, and Amendments. The Issuer shall be obligated to observe and perform the covenants specified in this Section with respect to the Issuer and the Bonds while, but only while, the Issuer remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that the Issuer in any event will give the notice required by Section 8.3 of any Bond calls and defeasance that cause the Issuer to be no longer such an "obligated person." The provisions of this Section are for the sole benefit of the Registered Owners and beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The Issuer undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the financial results, condition, or prospects of the Issuer or the State of Texas or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The Issuer 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 ISSUER BE LIABLE TO THE REGISTERED 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 ISSUER, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. No default by the Issuer in observing or performing its obligations under this Section shall constitute a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the Issuer under federal and state securities laws. The provisions of this Section may be amended by the Issuer from time to time to adapt to changed circumstances resulting from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the Issuer, but only if (1) the provisions of this Section, as so amended, would have permitted an underwriter to purchase or 56497493.2 -38- 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 (2) either (a) the Registered Owners of a majority in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (b) a Person that is unaffiliated with the Issuer (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the Registered Owners and beneficial owners of the Bonds. The provisions of this Section may also be amended from time to time or repealed by the Issuer if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and to the extent that reservation of the Issuer's right to do so would not prevent underwriters of the initial public offering of the Bonds from lawfully purchasing or selling Bonds in such offering. If the Issuer so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection (b) an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided. 56497493.2 -39- EXHIBIT A ANNUAL FINANCIAL INFORMATION Financial information and operating data with respect to the City of the general type included in the Official Statement under the Schedule numbers 1 through 6 and 8 through 14, and in Appendix A of the Official Statement. 56497493.2 EXHIBIT A EXHIBIT B OFFICER'S PRICING CERTIFICATE Re: The City of Nederland, Texas General Obligation Refunding Bonds, Series 2020 I, the undersigned City Manager of the City of Nederland, Texas (the "Issuer") hereby makes and executes this Certificate pursuant to an Ordinance adopted by the Governing Body of the Issuer on , 2020 (the "Bond Ordinance"), authorizing the issuance of the referenced bonds. Capitalized terms used in this Certificate shall have the meaning given such terms in the Bond Ordinance. 1. As authorized by Section 1.1 of the Bond Ordinance, I have acted on behalf of the Issuer in selling the Bonds to the Purchasers, , authorized and approved pursuant to the Bond Ordinance, for the sum of , with the Bonds having the following designations, terms, and provisions: The Bonds shall be known and designated as the Issuer "GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020" and shall be issued in the original aggregate principal amount of Interest on the Bonds shall be payable commencing on , and each thereafter. 2. The Bonds shall mature and become payable on the dates and in the respective principal amounts and interest rates set forth below, subject to prior redemption as set forth below: Maturity Date (September 1) Principal Amount Interest Rate (%) 56497493.2 EXHIBIT B —page 1 The Bonds are not subject to redemption prior to maturity, at the option of the Issuer 3. Pursuant to Section 1.1 of the Bond Ordinance, I hereby find and determine that: (a) the price to be paid for the Bonds is not be less than 90% of the aggregate original principal amount of the Bonds plus accrued interest, if any, thereon from their date to their delivery, (b) none of the Bonds bear interest at an interest rate which results in an initial yield in excess of the maximum rate allowed by Chapter 1204, Texas Government Code, (c) the aggregate principal amount of the Bonds equals an amount sufficient to provide for the refunding of the maximum principal amount of the Outstanding Bonds specified in paragraph 4 below and result in a minimum dollar reduction in aggregate debt service costs to the Issuer on a present value basis of not less than 4.0%. The present value savings achieved from issuance of the Bonds is $ , and the gross savings achieved from issuance of the Bonds is $ 4. The Issuer shall contribute an amount equal to $[* *] from its legally available funds which shall be used to refund a portion of the Refunded Obligations. 5. The Refunded Obligations are as follows: 56497493.2 EXHIBIT B —page 2 WITNESS MY HAND, this — 'i A Cityrer, City ederland, Texas 56497493.2 SIGNATURE PAGE EXHIBIT C REFUNDED OBLIGATIONS The City of Nederland, Texas, Tax and Revenue Certificates of Obligation, Series 2011 56497493.2 EXHIBIT C- page 1 Mar 19,2020 11:45 am Prepared by US Capital Advisors LLC (Finance 8.500 nederland:NEDERLAN-REF2020,REF2020) TABLE OF CONTENTS City of Nederland,Texas General Obligation Refunding Bonds,Series 2020 Scale 3/12/2020 SLG 3/19/2020 S&P'AA' BQ No Call Report Page Savings 1 Summary of Refunding Results 2 Bond Summary Statistics 3 Bond Pricing 5 Sources and Uses of Funds 6 Summary of Bonds Refunded 7 Bond Debt Service 8 Prior Bond Debt Service 10 Unrefunded Bond Debt Service 11 Escrow Statistics 12 Escrow Sufficiency 13 $ Mar 19,2020 11:45 am Prepared by US Capital Advisors LLC (Finance 8.500 nederland:NEDERLAN-REF2020,REF2020) Page 1 SAVINGS City of Nederland,Texas General Obligation Refunding Bonds,Series 2020 Scale 3/12/2020 SLG 3/19/2020 S&P'AA' BQ No Call Present Value Prior Refunding to 06/16/2020 Date Debt Service Debt Service Savings @ 1.7430042% 09/30/2020 46,021.25 39,041.67 6,979.58 6,954.39 09/30/2021 307,042.50 290,800.00 16,242.50 15,910.74 09/30/2022 311,882.50 294,800.00 17,082.50 16,448.94 09/30/2023 316,145.00 298,500.00 17,645.00 16,700.29 09/30/2024 314,800.00 296,900.00 17,900.00 16,651.04 09/30/2025 317,960.00 300,150.00 17,810.00 16,281.98 09/30/2026 320,460.00 303,100.00 17,360.00 15,596.06 09/30/2027 322,400.00 305,750.00 16,650.00 14,698.49 09/30/2028 328,625.00 313,100.00 15,525.00 13,465.72 09/30/2029 329,077.50 315,000.00 14,077.50 11,994.95 09/30/2030 328,605.00 313,800.00 14,805.00 12,400.62 09/30/2031 332,320.00 317,200.00 15,120.00 12,447.72 3,575,338.75 3,388,141.67 187,197.08 169,550.96 Savings Summary Dated Date 06/01/2020 Delivery Date 06/16/2020 PV of savings from cash flow 169,550.96 Plus:Refunding funds on hand 863.89 Net PV Savings 170,414.85 Mar 19,2020 11:45 am Prepared by US Capital Advisors LLC (Finance 8.500 nederland:NEDERLAN-REF2020,REF2020) Page 2 SUMMARY OF REFUNDING RESULTS City of Nederland,Texas General Obligation Refunding Bonds,Series 2020 Scale 3/12/2020 SLG 3/19/2020 S&P'AA' BQ No Call Dated Date 06/01/2020 Delivery Date 06/16/2020 Arbitrage yield 1.743004% Escrow yield 0.020252% Value of Negative Arbitrage 10,507.89 Bond Par Amount 2,755,000.00 True Interest Cost 1.865173% Net Interest Cost 1.997222% Average Coupon 3.494360% Average Life 6.577 Par amount of refunded bonds 2,900,000.00 Average coupon of refunded bonds 3.388303% Average life of refunded bonds 6.600 PV of prior debt to 06/16/2020 @ 1.743004% 3,217,856.81 Net PV Savings 170,414.85 Percentage savings of refunded bonds 5.876374% Percentage savings of refunding bonds 6.185657% • Mar 19,2020 11:45 am Prepared by US Capital Advisors LLC (Finance 8.500 nederland:NEDERLAN-REF2020,REF2020) Page 3 BOND SUMMARY STATISTICS City of Nederland,Texas General Obligation Refunding Bonds,Series 2020 Scale 3/12/2020 SLG 3/19/2020 S&P'AA' BQ No Call Dated Date 06/01/2020 Delivery Date 06/16/2020 Last Maturity 09/01/2031 Arbitrage Yield 1.743004% True Interest Cost(TIC) 1.865173% Net Interest Cost(NIC) 1.997222% All-In TIC 2.316260% Average Coupon 3.494360% Average Life(years) 6.577 Weighted Average Maturity(years) 6.738 Duration of Issue(years) 5.987 Par Amount 2,755,000.00 Bond Proceeds 3,048,305.85 Total Interest 633,141.67 Net Interest 361,875.82 Bond Years from Dated Date 18,118,958.33 Bond Years from Delivery Date 18,118,958.33 Total Debt Service 3,388,141.67 Maximum Annual Debt Service 317,200.00 Average Annual Debt Service 302,287.73 Underwriter's Fees(per$1000) Average Takedown Other Fee 8.000000 Total Underwriter's Discount 8.000000 Bid Price 109.846310 Par Average Average PV of 1 bp Bond Component Value Price Coupon Life change GO Refunding Bonds,Series 2020 2,755,000.00 110.646 3.494% 6.577 1,803.15 2,755,000.00 6.577 1,803.15 Mar 19,2020 11:45 am Prepared by US Capital Advisors LLC (Finance 8.500 nederland:NEDERLAN-REF2020,REF2020) Page 4 BOND SUMMARY STATISTICS City of Nederland,Texas General Obligation Refunding Bonds,Series 2020 Scale 3/12/2020 SLG 3/19/2020 S&P'AA' BQ No Call All-In Arbitrage TIC TIC Yield Par Value 2,755,000.00 2,755,000.00 2,755,000.00 +Accrued Interest +Premium(Discount) 293,305.85 293,305.85 293,305.85 -Underwriter's Discount -22,040.00 -22,040.00 -Cost of Issuance Expense -79,505.00 -Other Amounts Target Value 3,026,265.85 2,946,760.85 3,048,305.85 Target Date 06/16/2020 06/16/2020 06/16/2020 Yield 1.865173% 2.316260% 1.743004% Amok Mar 19,2020 11:45 am Prepared by US Capital Advisors LLC (Finance 8.500 nederland:NEDERLAN-REF2020,REF2020) Page 5 BOND PRICING City of Nederland,Texas General Obligation Refunding Bonds,Series 2020 Scale 3/12/2020 SLG 3/19/2020 S&P'AA' BQ No Call Maturity Bond Component Date #Bonds Amount Rate Yield Price GO Refunding Bonds,Series 2020: 09/01/2020 4 20,000 3.000% 1.260% 100.359 09/01/2021 40 200,000 3.000% 1.260% 102.078 09/01/2022 42 210,000 3.000% 1.270% 103.754 09/01/2023 44 220,000 3.000% 1.300% 105.323 09/01/2024 45 225,000 3.000% 1.340% 106.769 09/01/2025 47 235,000 3.000% 1.400% 108.008 09/01/2026 49 245,000 3.000% 1.500% 108.859 09/01/2027 51 255,000 3.000% 1.640% 109.209 09/01/2028 54 270,000 3.000% 1.710% 109.838 09/01/2029 56 280,000 4.000% 1.830% 118.310 09/01/2030 58 290,000 4.000% 1.960% 118.788 09/01/2031 61 305,000 4.000% 2.090% 118.994 551 2,755,000 Dated Date 06/01/2020 Delivery Date 06/16/2020 First Coupon 09/01/2020 Par Amount 2,755,000.00 Premium 293,305.85 Production 3,048,305.85 110.646310% Underwriter's Discount -22,040.00 -0.800000% Purchase Price 3,026,265.85 109.846310% Accrued Interest Net Proceeds 3,026,265.85 Mar 19,2020 11:45 am Prepared by US Capital Advisors LLC (Finance 8.500 nederland:NEDERLAN-REF2020,REF2020) Page 6 SOURCES AND USES OF FUNDS City of Nederland,Texas General Obligation Refunding Bonds,Series 2020 Scale 3/12/2020 SLG 3/19/2020 S&P'AA' BQ No Call Dated Date 06/01/2020 Delivery Date 06/16/2020 Sources: Bond Proceeds: Par Amount 2,755,000.00 Premium 293,305.85 3,048,305.85 Uses: Refunding Escrow Deposits: Cash Deposit 0.96 SLGS Purchases 2,945,896.00 2,945,896.96 Delivery Date Expenses: Cost of Issuance 79,505.00 Underwriter's Discount 22,040.00 101,545.00 Other Uses of Funds: Deposit to project fund 863.89 3,048,305.85 Mar 19,2020 11:45 am Prepared by US Capital Advisors LLC (Finance 8.500 nederland:NEDERLAN-REF2020,REF2020) Page 7 SUMMARY OF BONDS REFUNDED City of Nederland,Texas General Obligation Refunding Bonds,Series 2020 Scale 3/12/2020 SLG 3/19/2020 S&P'AA' BQ No Call Maturity Interest Par Call Call Bond Date Rate Amount Date Price Tax&Rev Certificates of Obligation,Series 2011,CO2011,CO2011: 09/01/2021 2.400% 215,000.00 09/01/2020 100.000 09/01/2022 2.550% 225,000.00 09/01/2020 100.000 09/01/2023 2.700% 235,000.00 09/01/2020 100.000 09/01/2024 2.850% 240,000.00 09/01/2020 100.000 09/01/2025 3.000% 250,000.00 09/01/2020 100.000 09/01/2026 3.100% 260,000.00 09/01/2020 100.000 09/01/2027 3.250% 270,000.00 09/01/2020 100.000 09/01/2028 3.350% 285,000.00 09/01/2020 100.000 09/01/2029 3.550% 295,000.00 09/01/2020 100.000 09/01/2030 3.700% 305,000.00 09/01/2020 100.000 09/01/2031 3.850% 320,000.00 09/01/2020 100.000 2,900,000.00 Mar 19,2020 11:45 am Prepared by US Capital Advisors LLC (Finance 8.500 nederland:NEDERLAN-REF2020,REF2020) Page 8 BOND DEBT SERVICE City of Nederland,Texas General Obligation Refunding Bonds,Series 2020 Scale 3/12/2020 SLG 3/19/2020 S&P'AA' BQ No Call Period Ending Principal Coupon Interest Debt Service 09/30/2020 20,000 3.000% 19,041.67 39,041.67 09/30/2021 200,000 3.000% 90,800.00 290,800.00 09/30/2022 210,000 3.000% 84,800.00 294,800.00 09/30/2023 220,000 3.000% 78,500.00 298,500.00 09/30/2024 225,000 3.000% 71,900.00 296,900.00 09/30/2025 235,000 3.000% 65,150.00 300,150.00 09/30/2026 245,000 3.000% 58,100.00 303,100.00 09/30/2027 255,000 3.000% 50,750.00 305,750.00 09/30/2028 270,000 3.000% 43,100.00 313,100.00 09/30/2029 280,000 4.000% 35,000.00 315,000.00 09/30/2030 290,000 4.000% 23,800.00 313,800.00 09/30/2031 305,000 4.000% 12,200.00 317,200.00 2,755,000 633,141.67 3,388,141.67 Mar 19,2020 11:45 am Prepared by US Capital Advisors LLC (Finance 8.500 nederland:NEDERLAN-REF2020,REF2020) Page 9 BOND DEBT SERVICE City of Nederland,Texas General Obligation Refunding Bonds,Series 2020 Scale 3/12/2020 SLG 3/19/2020 S&P'AA' BQ No Call Period Annual Ending Principal Coupon Interest Debt Service Debt Service 09/01/2020 20,000 3.000% 19,041.67 39,041.67 09/30/2020 39,041.67 03/01/2021 45,400.00 45,400.00 09/01/2021 200,000 3.000% 45,400.00 245,400.00 09/30/2021 290,800.00 03/01/2022 42,400.00 42,400.00 09/01/2022 210,000 3.000% 42,400.00 252,400.00 09/30/2022 294,800.00 03/01/2023 39,250.00 39,250.00 09/01/2023 220,000 3.000% 39,250.00 259,250.00 09/30/2023 298,500.00 03/01/2024 35,950.00 35,950.00 09/01/2024 225,000 3.000% 35,950.00 260,950.00 09/30/2024 296,900.00 03/01/2025 32,575.00 32,575.00 09/01/2025 235,000 3.000% 32,575.00 267,575.00 09/30/2025 300,150.00 03/01/2026 29,050.00 29,050.00 09/01/2026 245,000 3.000% 29,050.00 274,050.00 09/30/2026 303,100.00 03/01/2027 25,375.00 25,375.00 09/01/2027 255,000 3.000% 25,375.00 280,375.00 09/30/2027 305,750.00 03/01/2028 21,550.00 21,550.00 09/01/2028 270,000 3.000% 21,550.00 291,550.00 09/30/2028 313,100.00 03/01/2029 17,500.00 17,500.00 09/01/2029 280,000 4.000% 17,500.00 297,500.00 09/30/2029 315,000.00 03/01/2030 11,900.00 11,900.00 09/01/2030 290,000 4.000% 11,900.00 301,900.00 09/30/2030 313,800.00 03/01/2031 6,100.00 6,100.00 09/01/2031 305,000 4.000% 6,100.00 311,100.00 09/30/2031 317,200.00 2,755,000 633,141.67 3,388,141.67 3,388,141.67 Mar 19,2020 11:45 am Prepared by US Capital Advisors LLC (Finance 8.500 nederland:NEDERLAN-REF2020,REF2020) Page 10 PRIOR BOND DEBT SERVICE City of Nederland,Texas General Obligation Refunding Bonds,Series 2020 Scale 3/12/2020 SLG 3/19/2020 S&P'AA' BQ No Call Period Annual Ending Principal Coupon Interest Debt Service Debt Service 09/01/2020 46,021.25 46,021.25 09/30/2020 46,021.25 03/01/2021 46,021.25 46,021.25 09/01/2021 215,000 2.400% 46,021.25 261,021.25 09/30/2021 307,042.50 03/01/2022 43,441.25 43,441.25 09/01/2022 225,000 2.550% 43,441.25 268,441.25 09/30/2022 311,882.50 03/01/2023 40,572.50 40,572.50 09/01/2023 235,000 2.700% 40,572.50 275,572.50 09/30/2023 316,145.00 03/01/2024 37,400.00 37,400.00 09/01/2024 240,000 2.850% 37,400.00 277,400.00 09/30/2024 314,800.00 03/01/2025 33,980.00 33,980.00 09/01/2025 250,000 3.000% 33,980.00 283,980.00 09/30/2025 317,960.00 03/01/2026 30,230.00 30,230.00 09/01/2026 260,000 3.100% 30,230.00 290,230.00 09/30/2026 320,460.00 03/01/2027 26,200.00 26,200.00 09/01/2027 270,000 3.250% 26,200.00 296,200.00 09/30/2027 322,400.00 03/01/2028 21,812.50 21,812.50 09/01/2028 285,000 3.350% 21,812.50 306,812.50 09/30/2028 328,625.00 03/01/2029 17,038.75 17,038.75 09/01/2029 295,000 3.550% 17,038.75 312,038.75 09/30/2029 329,077.50 03/01/2030 11,802.50 11,802.50 09/01/2030 305,000 3.700% 11,802.50 316,802.50 09/30/2030 328,605.00 03/01/2031 6,160.00 6,160.00 09/01/2031 320,000 3.850% 6,160.00 326,160.00 09/30/2031 332,320.00 2,900,000 675,338.75 3,575,338.75 3,575,338.75 Mar 19,2020 11:45 am Prepared by US Capital Advisors LLC (Finance 8.500 nederland:NEDERLAN-REF2020,REF2020) Page 11 UNREFUNDED BOND DEBT SERVICE City of Nederland,Texas General Obligation Refunding Bonds,Series 2020 Scale 3/12/2020 SLG 3/19/2020 S&P'AA' BQ No Call Tax&Rev Certificates of Obligation,Series 2011 (CO2011) Period Annual Ending Principal Coupon Interest Debt Service Debt Service 09/01/2020 205,000 2.300% 2,357.50 207,357.50 09/30/2020 207,357.50 205,000 2,357.50 207,357.50 207,357.50 Mar 19,2020 11:45 am Prepared by US Capital Advisors LLC (Finance 8.500 nederland:NEDERLAN-REF2020,REF2020) Page 12 ESCROW STATISTICS City of Nederland,Texas General Obligation Refunding Bonds,Series 2020 Scale 3/12/2020 SLG 3/19/2020 S&P'AA' BQ No Call Modified Yield to Yield to Perfect Value of Total Duration Receipt Disbursement Escrow Negative Cost of Escrow Cost (years) Date Date Cost Arbitrage Dead Time Global Proceeds Escrow: 2,945,896.96 0.208 0.020252% 0.020252% 2,935,389.06 10,507.89 0.01 2,945,896.96 2,935,389.06 10,507.89 0.01 Delivery date 06/16/2020 Arbitrage yield 1.743004% Mar 19,2020 11:45 am Prepared by US Capital Advisors LLC (Finance 8.500 nederland:NEDERLAN-REF2020,REF2020) Page 13 ESCROW SUFFICIENCY City of Nederland,Texas General Obligation Refunding Bonds,Series 2020 Scale 3/12/2020 SLG 3/19/2020 S&P'AA' BQ No Call Prior Debt(PRI) Escrow Net Escrow Excess Excess Date Requirement Receipts Receipts Balance 06/16/2020 0.96 0.96 0.96 09/01/2020 2,946,021.25 2,946,020.29 -0.96 2,946,021.25 2,946,021.25 0.00 A► RESOLUTION NO. 2020-06 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEDERLAND, TEXAS EXTENDING THE DISASTER DECLARATION ISSUED BY MAYOR ALBANESE ON MARCH 16, 2020 IN RESPONSE TO THE CORONAVIRUS DISEASE 2019 (COVID-19) WHEREAS, the City of Nederland, Texas has been impacted by the Coronavirus Disease 19 (COVID-19)that was declared a pandemic by the World Health Organization;and WHEREAS,on March 16, 2020, Don Albanese, Mayor of the City of Nederland,Texas issued a Declaration of Disaster declaring a state of disaster for the City of Nederland;and WHEREAS, on March 23, 2020, the Nederland City Council via Resolution No. 2020-03, authorized the extension of the Declaration of Disaster through April 22, 2020 in accordance with Section 418.018 of the Texas Government Code, and on March 23, 2020,the Nederland City Council via Resolution No. 2020-04,authorized the extension of the Declaration of Disaster through April 30, 2020 in accordance with Section 418.018 of the Texas Government Code;and WHEREAS,the conditions necessitating such disaster declaration continue to exist;and WHEREAS, pursuant to Section 418.108(b),Texas Government Code, a local state of disaster may not be continued for a period in excess of seven(7)days without the consent of the governmental body of the political subdivision;and WHEREAS,the continued presence and effects of Coronavirus Disease 19(COVID-19) pose an imminent threat to public health and safety and immediate action of the City Council is required. NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NEDERLAND,TEXAS, THAT: Section 1. The declaration of disaster, which was signed and executed by the Mayor on March 16, 2020, shall be extended by the City Council of the City of Nederland though May 27,2020 in accordance with Section 418.018 of the Texas Government Code. Section 2. The meeting at which this resolution was approved was in all things conducted in strict compliance with the Open Meetings Act,Texas Government Code,Chapter 551. Section 3. This resolution shall become effective from and after its passage. PASSED AND APPROVED by the Nederland City Council this the 27TH day of APRIL,2020. ouuuu,„r,, ''o ,1 1 / ,4( ax.vuo.R.„-- . °(y.'' � or Albanese, Mayor .--;---(3"-. ..44..„,,,of. moo; %,G , J•*�: City of Nederland, Texas -,�/fr ;CSF PliA Gay Ferguson, City Clerll01/1/ APPROVED AS TO FORM AND LEGALITY: trA Jesse : . , Attorney