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Home My WebLink AboutP.O. NO. 7451 AUTHORIZING THE ISSUANCE AND SALE OF CITY OF PORT ARTHUR, TEXAS COMBINATION TAX AND REVENUE, CERTIFICATES OF OBLIGATION, SERIES 2026B. MEMORANDUM To: Christe Whitley Ned, City Secretary From: Gwen Thibodeaux, Sr. Legal Assists Date: September 22, 2026 Subject: Updated PO 7451 Please find attached updated PO 7451, Certificates of Obligation, that the bond counsel has submitted for tonight's City Council meeting. Please update the Proposed Ordinance and scan the update. Attachment P.O. No. 7451 9/22/26 updated dm/lb CERTIFICATE FOR ORDINANCE THE STATE OF TEXAS § COUNTY OF JEFFERSON § I, the undersigned City Secretary of the City of Port Arthur, Texas (the "City"), hereby certify as follows: 1. The City Council of the City convened in a regular meeting on September 22,2026, at the place stated in the notice of such meeting given as stated below, and the roll was called of the duly constituted officials and members of said City Council,to wit: Charlotte M. Moses Mayor Taylor Getwood Councilmember,District 1 Cal Jones Councilmember,District 2 Warren Pena Councilmember,District 3 Kaala Jacobs Councilmember,District 4 Thomas Kinlaw, III Councilmember, At Large Position 5 -Mayor Pro Tern Donald Frank, Sr. Councilmember,At Large Position 6 And all of said persons were present,thus constituting a quorum. Whereupon,among other business, the following was transacted at said meeting: a written ORDINANCE OF THE CITY OF PORT ARTHUR, TEXAS, AUTHORIZING THE ISSUANCE AND SALE OF CITY OF PORT ARTHUR, TEXAS, COMBINATION TAX AND REVENUE, CERTIFICATES OF OBLIGATION, SERIES 2026B IN THE AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED OF $49,945,000 LEVYING A TAX IN PAYMENT THEREOF; MAKING OTHER PROVISIONS REGARDING SUCH CERTIFICATES OF OBLIGATION, INCLUDING AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE PRELIMINARY OFFICIAL STATEMENTS AND AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE OFFICIAL STATEMENTS AND MATTERS INCIDENT THERETO; AWARDING THE SALE OF THE CERTIFICATES;AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE PURCHASE AGREEMENTS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE LOAN AGREEMENTS AND PROMISSORY NOTES; AUTHORIZING THE EXECUTION AND DELIVERY OF A PAYING AGENT/REGISTRAR AGREEMENT; AND AUTHORIZING AND CONFIRMING THE ENGAGEMENT OF CERTAIN PROFESSIONALS IN CONNECTION WITH THE ISSUANCE OF THE CERTIFICATES OF OBLIGATION; FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC AS REQUIRED BY LAW; AND ENACTING OTHER PROVISIONS RELATING THERETO was duly introduced for the consideration of said City Council and read in full. It was then duly moved and seconded that said ordinance be adopted; and after due discussion, such motion, carrying with it the adoption of said ordinance, prevailed and carried by the following vote: AYES: NOES: ABSTENTIONS: 2. That a true,full, and correct copy of the aforesaid ordinance adopted at the meeting described in the above and foregoing paragraph is attached to and follows this certificate;that said ordinance has been duly recorded in said City Council's minutes of said meeting; that the above and foregoing paragraph is a true, full, and correct excerpt from the said City Council's minutes of said meeting pertaining to the adoption of said ordinance; that the persons named in the above and foregoing paragraph are the duly chosen, qualified, and acting officers and members of said City Council as indicated therein; that each of the officers and members of said City Council was duly and sufficiently notified officially and personally, in advance, of the date, hour, place, and purpose of the aforesaid meeting,and each of said officers and members consented, in advance,to the holding of said meeting for such purpose;that said meeting was open to the public as required by law; and that public notice of the date, hour, place, and subject of said meeting was given as required by the Texas Open Meetings Act. [Signature Page to Follow] Signature Page to Certified Ordinance Certificate #544404033_v2 SIGNED AND SEALED this September 22, 2026. City Secretary, City of Port Arthur, Texas (SEAL) Signature Page to Certified Ordinance Certificate #544404033_v2 P.O. No. 7451 9/22/26 updated dm/lb ORDINANCE NO. 26- ORDINANCE OF THE CITY OF PORT ARTHUR,TEXAS,AUTHORIZING THE ISSUANCE AND SALE OF CITY OF PORT ARTHUR,TEXAS,COMBINATION TAX AND REVENUE, CERTIFICATES OF OBLIGATION, SERIES 2026B IN THE AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED OF $49,945,000 LEVYING A TAX IN PAYMENT THEREOF; MAKING OTHER PROVISIONS REGARDING SUCH CERTIFICATES OF OBLIGATION, INCLUDING AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE PRELIMINARY OFFICIAL STATEMENTS AND AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE OFFICIAL STATEMENTS AND MATTERS INCIDENT THERETO; AWARDING THE SALE OF THE CERTIFICATES; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE PURCHASE AGREEMENTS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE LOAN AGREEMENTS AND PROMISSORY NOTES; AUTHORIZING THE EXECUTION AND DELIVERY OF A PAYING AGENT/REGISTRAR AGREEMENT; AND CONFIRMING THE ENGAGEMENT OF CERTAIN PROFESSIONALS IN CONNECTION WITH THE ISSUANCE OF THE CERTIFICATES OF OBLIGATION; FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC AS REQUIRED BY LAW; AND ENACTING OTHER PROVISIONS RELATING THERETO * * * * * * WHEREAS,under the provisions of Subchapter C,Chapter 271,Texas Local Government Code, as amended (the"Act"),the City of Port Arthur,Texas, is authorized to issue certificates of obligation for the purposes specified in this Ordinance and for the payment of all or a portion of the contractual obligations for professional services, including that of engineers, attorneys, and financial advisors in connection therewith, and to sell the same for cash as herein provided; and WHEREAS, the City is authorized to provide that such obligations will be payable from and secured by the levy of a direct and continuing ad valorem tax, within the limits prescribed by law, against all taxable property within the City, in combination with a limited pledge of a subordinate lien on the net revenues of the City's waterworks and sewer system in an amount not to exceed $10,000 as authorized by the Act and Chapter 1502, Texas Government Code; and WHEREAS,the City Council has found and determined that it is necessary and in the best interests of the City and its citizens that it issue such certificates of obligation authorized by this Ordinance; and WHEREAS, pursuant to a resolution heretofore passed by this governing body, notice of intention to issue certificates of obligation of the City payable as provided in this Ordinance was published in the Port Arthur News, a newspaper of general circulation of the City in accordance with the laws of the State of Texas; and WHEREAS,no petition of any kind has been filed with the City Secretary, any member of the City Council or any other official of the City, protesting the issuance of such certificates of obligation; and WHEREAS, this City Council is now authorized and empowered to proceed with the issuance of said certificates of obligation and to sell the same for cash; and WHEREAS, the meeting at which this Ordinance is considered is open to the public as required by law, and public notice of the time, place, and purpose of said meeting was given as required by Chapter 551, Texas Government Code, as amended; now therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR, TEXAS: ARTICLE I. DEFINITIONS AND OTHER PRELIMINARY MATTERS Section 1.01 Definitions. Unless otherwise expressly provided or unless the context clearly requires otherwise in this Ordinance,the following terms shall have the meanings specified below: "Business Day" means any day which is not a Saturday, Sunday or legal holiday, or day on which banking institutions in the State of Texas or the city in which the Designated Payment/Transfer Office is located are generally authorized or obligated by law or executive order to close. "Certificate"means any of the Certificates. "Certificate Date" means the date designated as the initial date of the Certificates by Section 3.02(a)of this Ordinance. "Certificates" mean the certificates of obligation authorized to be issued by Section 3.01 of this Ordinance and designated as "City of Port Arthur, Texas, Combination Tax and Revenue Certificates of Obligation, Series 2026B." "City"means the City of Port Arthur, Texas. "Closing Date"means the date of the initial delivery of and payment for the Certificates. "Code" means the Internal Revenue Code of 1986, as amended, including applicable regulations, published rulings, and court decisions. "Dated Date"means October 1, 2026. "Delivery Date"means October 15, 2026. #544404033_v2 "Designated Payment/Transfer Office" means (i) with respect to the initial Paying Agent/Registrar named herein,its office in Austin,Texas,or at such other location designated by the Paying Agent/Registrar and (ii) with respect to any successor Paying Agent/Registrar, the office of such successor designated and located as may be agreed upon by the City and such successor. "DTC" means The Depository Trust Company of New York,New York, or any successor securities depository. "DTC Participant" means brokers and dealers, banks, trust companies, clearing corporations and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. "Event of Default" means any event of default as defined in Section 11.01 of this Ordinance. "Fiscal Year"means such fiscal year as shall from time to time be set by the City Council. "Initial Certificate" means the initial certificate authorized by Section 3.04 of this Ordinance. "Interest and Sinking Fund" means the interest and sinking fund established by Section 2.02 of this Ordinance. "Interest Payment Date" means the date or dates on which interest on the Certificates is scheduled to be paid until their respective dates of maturity or prior redemption, such dates being February 15 and August 15, commencing August 15, 2027. "MSRB"means the Municipal Securities Rulemaking Board. "Net Revenues"means the gross revenues of the System less the expenses of operation and maintenance as said expenses are defined in Chapter 1502, Texas Government Code, as amended. "Ordinance" as used herein and in the Certificates means this ordinance authorizing the Certificates. "Owner" means the person who is the registered owner of a Certificate or Certificates, as shown in the Register. "Paying Agent/Registrar" means initially UMB Bank, N.A., Austin, Texas, or any successor thereto as provided in this Ordinance. "Paying Agent/Registrar Agreement" means the Paying Agent/Registrar Agreement between the Paying Agent/Registrar and the City relating to the Certificates. "Project" means the purposes for which the Certificates are issued as set forth in Section 3.01. #544404033_v2 "Record Date" means the last business day of the month preceding such interest payment date. "Register"means the bond register specified in Section 3.06(a) of this Ordinance. "Representation Letter"means the Blanket Letter of Representations between the City and DTC. "Rule"means SEC Rule 15c2-12, as amended from time to time. "SEC"means the United States Securities and Exchange Commission. "Special Payment Date"means the Special Payment Date prescribed by Section 3.03(b)of this Ordinance. "Special Record Date" means the Special Record Date prescribed by Section 3.03(b) of this Ordinance. "Surplus Revenues"means the revenues of the System in an amount not to exceed$10,000 remaining after payment of all operation and maintenance expenses thereof. "System" as used in this Ordinance means the City's combined waterworks and sewer system, including all present and future additions, extensions, replacements, and improvements thereto. "Unclaimed Payments" means money deposited with the Paying Agent/Registrar for the payment of principal of, redemption premium, if any, or interest on the Certificates as the same becomes due and payable or money set aside for the payment of Certificates duly called for redemption prior to maturity and remaining unclaimed by the Owners of such Certificates for 90 days after the applicable payment or redemption date. "Underwriters" means Huntington Securities, Inc., Siebert Williams Shank & Co., LLC and PNC Capital Markets LLC. Section 1.02 Findings. The declarations, determinations and findings declared, made and found in the preamble to this Ordinance are hereby adopted,restated and made a part of the operative provisions hereof. Section 1.03 Titles and Headings. The titles and headings of the Articles and Sections of this Ordinance have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof and shall never be considered or given any effect in construing this Ordinance or any provision hereof or in ascertaining intent, if any question of intent should arise. #544404033_v2 Section 1.04 Interpretation. (a) Unless the context requires otherwise, words of the masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa. (b) This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein. ARTICLE II. SECURITY FOR THE CERTIFICATES; INTEREST AND SINKING FUND Section 2.01 Tax Levy. (a) Pursuant to the authority granted by the Texas Constitution and the laws of the State of Texas,there shall be levied and there is hereby levied for the current year and for each succeeding year thereafter while any of the Certificates or any interest thereon is outstanding and unpaid,an ad valorem tax on each one hundred dollars valuation of taxable property within the City, at a rate sufficient, within the limit prescribed by law, to pay the debt service requirements of the Certificates, being (i) the interest on the Certificates, and (ii) a sinking fund for their redemption at maturity or a sinking fund of 2% per annum (whichever amount is greater), when due and payable, full allowance being made for delinquencies and costs of collection. (b) The ad valorem tax thus levied shall be assessed and collected each year against all property appearing on the tax rolls of the City most recently approved in accordance with law, and the money thus collected shall be deposited as collected to the Interest and Sinking Fund. (c) Said ad valorem tax, the collections therefrom, and all amounts on deposit in or required hereby to be deposited to the Interest and Sinking Fund are hereby pledged and committed irrevocably to the payment of the principal of and interest on the Certificates when and as due and payable in accordance with their terms and this Ordinance. (d) The City hereby covenants and agrees that the Surplus Revenues are hereby irrevocably pledged equally and ratably to the payment of the principal of and interest on the Certificates, as the same become due. The Surplus Revenues shall be deposited to the Interest and Sinking Fund at such time as the Surplus Revenues are to be applied to the payment of the Certificates. (e) If the liens and provisions of this Ordinance shall be released in a manner permitted by Article XIII hereof, then the collection of such ad valorem tax may be suspended or appropriately reduced, as the facts may permit, and further deposits to the Interest and Sinking Fund may be suspended or appropriately reduced, as the facts may permit. In determining the aggregate principal amount of outstanding Certificates, there #544404033_v2 shall be subtracted the amount of any Certificates that have been duly called for redemption and for which money has been deposited with the Paying Agent/Registrar for such redemption. Section 2.02 Interest and Sinking Fund. (a) The City hereby establishes special funds or accounts to be designated"City of Port Arthur, Texas, Combination Tax and Revenue Certificates of Obligation, Series 2026B" Interest and Sinking Fund" (the "Interest and Sinking Fund"), said funds to be maintained at an official depository bank of the City separate and apart from all other funds and accounts of the City. (b) Money on deposit in or required by this Ordinance to be deposited to the Interest and Sinking Fund shall be used solely for the purpose of paying the interest on and principal of the Certificates when and as due and payable in accordance with their terms and this Ordinance. Section 2.03 Pledge of Revenues. The Surplus Revenues to be derived from the operation of the System in an amount not to exceed Ten Thousand Dollars($10,000)are hereby pledged to the payment of the principal of and interest on the Certificates as the same come due; provided,however,that such pledge is and shall be junior and subordinate in all respects to the pledge of the Surplus Revenues to the payment of all outstanding obligations of the City and any obligation of the City, whether authorized heretofore or hereafter, which the City designates as having a pledge senior to the pledge of the Surplus Revenues to the payment of the Certificates. The City also reserves the right to issue, for any lawful purpose at any time, in one or more installments, bonds, certificates of obligation and other obligations of any kind payable in whole or in part from the Surplus Revenues, secured by a pledge of the Surplus Revenues that may be prior and superior in right to, on a parity with, or junior and subordinate to the pledge of Surplus Revenues securing the Certificates. ARTICLE III. AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE CERTIFICATES Section 3.01 Authorization. (a) The City's certificates of obligation to be designated "City of Port Arthur, Texas, Combination Tax and Revenue Certificates of Obligation, Series 2026B," are hereby authorized to be issued and delivered in accordance with the Constitution and laws of the State of Texas, specifically §271.041-063, Local Government Code, V.T.C.A, as amended, and principal amount not to exceed $49,975,000 for the purpose of paying contractual obligations to be incurred for the construction and renovation of public works, more specifically for (1) the design and construction of a nature center (including landscaping, sidewalks, parking lots and appurtenances for greenscapes) located on the Pleasure Island System, (2) the construction or reconstruction of water and sewer improvements throughout the City, (3) the renovation and/or construction of a City fire #544404033_v2 house, (4) the renovation and equipping of City administrative buildings, (5) the design and construction of streets and sidewalks throughout the City and items related thereto,and (6) costs of issuance related to the Certificates. (b) The issuance of the Certificates is hereby authorized under and in accordance with the provisions hereof, the officers of the City are each hereby authorized to execute, attest, and affix the City's seal to the Certificates and to deliver the Certificates to the Attorney General of the State of Texas for approval, the Comptroller of Public Accounts for registration and the Paying Agent/Registrar for authentication, and thereafter to deliver such Certificates to the Underwriter pursuant to the Purchase Agreement authorized in Section 7.01 herein. Section 3.02 Date, Denomination, Maturities, and Interest. (a) The Certificates shall be dated as of the Dated Date. The Certificates shall be in fully registered form, without coupons, in the denomination of 5,000 or any integral multiple thereof and shall be numbered separately from one upward, except the Initial Certificate, which shall each be numbered T-1. [remainder of page intentionally left blank] #544404033_v2 (b) The Certificates shall mature on August 15,in the years and in the principal amounts and shall bear interest at the per annum rates set forth in the following schedule: Maturity Bond Component Date Amount Rate Serial Bonds: 08/15/2027 4.945,000 5.000% 08/15/2028 970,000 5.000% 08/15/2029 1,020,000 5.000% 08/15/2030 1,075,000 5.000% 08/15/2031 1,125,000 5.000% 08/15/2032 1,180,000 5,000% 08/15/2033 1,245,000 5.000% 08/15/2034 1,300,000 5.000% 08/15/2035 1.370,000 5.000% 08/15/2036 1,440.000 5.000% 08/15/2037 1.510,000 5.000% 08/15/2038 1,585,000 5.000% 08/15/2039 1,660,000 5.000% 08/15/2040 1.745.000 5.000% 08/15/2041 1,835.000 5.250% 08/15/2042 1,925,000 5.250% 08/15/2043 2.035,000 5.250% 08/15/2044 2,135.000 5.250% 08/15/2045 2,255.000 5.250% 08/15/2046 2.365,000 5.250% 08/15/2047 1.195,000 5.250% 08/15/2048 1,255,000 5.000% 37.170,000 Term Bond due 8/15/2051: 08/15/2049 1,320,000 5.500% 08/15/2050 1,395.000 5.500% 08/15/2051 1,470 000 5 500% 4,185.000 Term Bond due 8/15/2056: 08/15/2052 1,550.000 5.125% 08/15/2053 1,630,000 5.125% 08/15/2054 1,715,000 5.125% 08/15/2055 1.800,000 5.125% 08/15/2056 1.895.000 5 125% 8.590.000 49.945.000 #544404033_v2 (c) Interest shall accrue and be paid on each Certificate respectively until its maturity or prior redemption from the later of the date of initial delivery or the most recent Interest Payment Date to which interest has been paid or provided for at the rates per annum for each respective maturity specified in the schedule contained in subsection (b) above. Such interest shall be payable semiannually on each Interest Payment Date until maturity or prior redemption. Interest on the Certificates shall be computed on the basis of a 360- day year consisting of twelve 30-day months. Section 3.03 Medium, Method, and Place of Payment. (a) The principal of and interest on the Certificates shall be paid in lawful money of the United States of America. (b) Interest on the Certificates shall be payable to the Owners as shown in the Register at the close of business on the Record Date; provided, however, that in the event of nonpayment of interest on a scheduled Interest Payment Date, and for 30 days thereafter, a new record date for such interest payment (a"Special Record Date") will be established by the Paying Agent/Registrar if and when funds for the payment of such interest have been received from the City.Notice of the Special Record Date and of the scheduled payment date of the past due interest(the"Special Payment Date,"which shall be at least 15 days after the Special Record 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 Owner of a Certificate appearing in the Register at the close of business on the last Business Day next preceding the date of mailing of such notice. (c) Interest shall be paid by check, dated as of and mailed on the Interest Payment Date, and sent United States mail, first class, postage prepaid, by the Paying Agent/Registrar to each Owner, at the address thereof as it appears in the Register, or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the Owner; provided, however, that the Owner shall bear all risk and expense of such alternative banking arrangement.At the option of an Owner of at least$1,000,000 principal amount of Certificates, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. (d) The principal of each Certificate shall be paid to the Owner thereof on the due date, whether at the maturity date or the date of prior redemption thereof, upon presentation and surrender of such Certificate at the Designated Payment/Transfer Office. (e) If the date for the payment of the principal of or interest on the Certificates is not a Business Day,then the date for such payment shall be the next succeeding Business Day, and payment on such date shall have the same force and effect as if made on the original date payment was due and no additional interest shall be due by reason of nonpayment on the date on which such payment is otherwise stated to be due and payable. (f) Unclaimed Payments of amounts due hereunder shall be segregated in a special escrow account and held in trust,uninvested by the Paying Agent/Registrar, for the account of the Owner of the Certificates to which such Unclaimed Payments pertain. #544404033_v2 Subject to Title 6 of the Texas Property Code, any Unclaimed Payments remaining unclaimed by the Owners entitled thereto for three years after the applicable payment or redemption date shall be applied to the next payment or payments on the Certificates thereafter coming due and, to the extent any such money remains three years after the retirement of all outstanding Certificates, such money shall be paid to the City to be used for any lawful purpose. Thereafter, neither the City, the Paying Agent/Registrar, nor any other person shall be liable or responsible to any Owners of such Certificates for any further payment of such unclaimed moneys or on account of any such Certificates, subject to Title 6 of the Texas Property Code. Section 3.04 Execution and Registration of Certificates. (a) The Certificates shall be executed on behalf of the City by the Mayor and the City Secretary,by their manual or electronic signatures, and the official seal of the City shall be impressed or placed in electronic form thereon. Such electronic signatures on the Certificates shall have the same effect as if each of the Certificates had been signed manually and in person by each of said officers,and such electronic seal on the Certificates shall have the same effect as if the official seal of the City had been manually impressed upon each of the Certificates. (b) In the event that any officer of the City whose manual or electronic signature appears on the Certificates ceases to be such officer before the authentication of such Certificates or before the delivery thereof, such manual or electronic signature nevertheless shall be valid and sufficient for all purposes as if such officer had remained in such office. (c) Except as provided below,no Certificate shall be valid or obligatory for any purpose or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the Certificate of Paying Agent/Registrar substantially in the form provided herein, duly authenticated by manual execution by an officer or duly authorized signatory of the Paying Agent/Registrar. It shall not be required that the same officer or authorized signatory of the Paying Agent/Registrar sign the Certificate of Paying Agent/Registrar on all of the Certificates. In lieu of the executed Certificate of Paying Agent/Registrar described above, the Initial Certificate delivered at the Closing Date shall have attached thereto the Comptroller's Registration Certificate substantially in the form provided in the Form of Certificates, manually executed by the Comptroller of Public Accounts of the State of Texas(the"Comptroller"), or by his duly authorized agent,which certificate is evidence that such Initial Certificate has been duly approved by the Attorney General of the State of Texas (the "Attorney General") and that it is a valid and binding obligation of the City, and has been registered by the Comptroller. (d) On the Closing Date, one Initial Certificate representing the entire principal amount of all Certificates, payable in stated installments to the Initial Purchaser, or its designee, executed by the manual or electronic signatures of the Mayor and City Secretary of the City, approved by the Attorney General, and registered and manually signed by the Comptroller, will be delivered to the Initial Purchaser or its designee. Upon payment for the Initial Certificate, the Paying Agent/Registrar shall cancel the Initial Certificate and deliver to DTC on behalf of the Initial Purchaser one registered definitive Certificate for #544404033_v2 each year of maturity of the Certificates in the aggregate principal amount of all Certificates for such maturity, registered in the name of Cede & Co., as nominee of DTC. Section 3.05 Ownership. (a) The City, the Paying Agent/Registrar and any other person may treat the person in whose name any Certificate is registered as the absolute owner of such Certificate for the purpose of making and receiving payment of the principal thereof, for the further purpose of making and receiving payment of the interest thereon,and for all other purposes (except interest will be paid to the person in whose name such certificate is registered on the Record Date or Special Record Date, as applicable), whether or not such Certificate is overdue, and neither the City nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary. (b) All payments made to the Owner of a Certificate shall be valid and effectual and shall discharge the liability of the City and the Paying Agent/Registrar upon such Certificate to the extent of the sums paid. Section 3.06 Registration, Transfer and Exchange. (a) So long as any Certificates remain outstanding, the City shall cause the Paying Agent/Registrar to keep at the Designated Payment/Transfer Office a register (the "Register")in which, subject to such reasonable regulations as it may prescribe,the Paying Agent/Registrar shall provide for the registration and transfer of Certificates in accordance with this Ordinance. (b) The ownership of a Certificate may be transferred only upon the presentation and surrender of the Certificate at the Designated Payment/Transfer Office with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar. No transfer of any Certificate shall be effective until entered in the Register. (c) The Certificates shall be exchangeable upon the presentation and surrender thereof at the Designated Payment/Transfer Office for a Certificate or Certificates of the same maturity and interest rate and in any denomination or denominations of any integral multiple of $5,000 and in an aggregate principal amount equal to the unpaid principal amount of the Certificates presented for exchange. The Paying Agent/Registrar is hereby authorized to authenticate and deliver Certificates exchanged for other Certificates in accordance with this Section. (d) Each exchange Certificate delivered by the Paying Agent/Registrar in accordance with this Section shall constitute an original contractual obligation of the City and shall be entitled to the benefits and security of this Ordinance to the same extent as the Certificate or Certificates in lieu of which such exchange Certificate is delivered. (e) No service charge shall be made to the Owner for the initial registration, subsequent transfer, or exchange for a different denomination of any of the Certificates. The Paying Agent/Registrar, however, may require the Owner to pay a sum sufficient to #544404033_v2 cover any tax or other governmental charge that is authorized to be imposed in connection with the registration, transfer, or exchange of a Certificate. (f) Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer, or exchange any Certificate called for redemption, in whole or in part, within 45 calendar days prior to the date fixed for redemption;provided,however,such limitation shall not be applicable to an exchange by the Owner of the uncalled principal balance of a Certificate. Section 3.07 Cancellation. All Certificates paid or redeemed before scheduled maturity in accordance with this Ordinance, and all Certificates in lieu of which exchange Certificates or replacement Certificates are authenticated and delivered in accordance with this Ordinance, shall be cancelled and proper records shall be made regarding such payment,redemption,exchange or replacement. The Paying Agent/Registrar shall dispose of cancelled Certificates in accordance with the Securities Exchange Act of 1934. Section 3.08 Replacement Certificates. (a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated Certificate, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a replacement Certificate of like tenor and principal amount, bearing a number not contemporaneously outstanding. The City or the Paying Agent/Registrar may require the Owner of such Certificate to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection therewith and any other expenses connected therewith. (b) In the event that any Certificate is lost, apparently destroyed or wrongfully taken, the Paying Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Certificate has been acquired by a bona fide purchaser, shall authenticate and deliver a replacement Certificate of like tenor and principal amount, bearing a number not contemporaneously outstanding,provided that the Owner first: (i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her ownership of and the circumstances of the loss, destruction or theft of such Certificate; (ii) furnishes such security or indemnity as may be required by the Paying Agent/Registrar to save it and the City harmless; (iii) pays all expenses and charges in connection therewith, including, but not limited to,printing costs, legal fees, fees of the Paying Agent/Registrar and any tax or other governmental charge that is authorized to be imposed; and (iv) satisfies any other reasonable requirements imposed by the City and the Paying Agent/Registrar. #544404033_v2 (c) If, after the delivery of such replacement Certificate, a bona fide purchaser of the original Certificate in lieu of which such replacement Certificate was issued presents for payment such original Certificate, the City and the Paying Agent/Registrar shall be entitled to recover such replacement Certificate from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss,damage, cost or expense incurred by the City or the Paying Agent/Registrar in connection therewith. • (d) In the event that any such mutilated, lost, apparently destroyed or wrongfully taken Certificate has become or is about to become due and payable,the Paying Agent/Registrar, in its discretion, instead of issuing a replacement Certificate, may pay such Certificate if it has become due and payable or may pay such Certificate when it becomes due and payable. (e) Each replacement Certificate delivered in accordance with this Section shall constitute an original additional contractual obligation of the City and shall be entitled to the benefits and security of this Ordinance to the same extent as the Certificate or Certificates in lieu of which such replacement Certificate is delivered. Section 3.09 Book-Entry Only System. (a) The definitive Certificates shall be initially issued in the form of a separate single fully registered Certificate for each maturity. Upon initial issuance, the ownership of each such Certificate shall be registered in the name of Cede&Co.,as nominee of DTC, and except as provided in Section 3.10 hereof, all of the outstanding Certificates shall be registered in the name of Cede& Co., as nominee of DTC. (b) With respect to Certificates registered in the name of Cede & Co., as nominee of DTC, the City and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in the Certificates, except as provided in this Ordinance. Without limiting the immediately preceding sentence, the City and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Certificates, (ii) the delivery to any DTC Participant or any other person, other than an Owner, as shown on the Register, of any notice with respect to the Certificates, including any notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than an Owner, as shown in the Register of any amount with respect to principal of, premium, if any, or interest on the Certificates. Notwithstanding any other provision of this Ordinance to the contrary, the City and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each Certificate is registered in the Register as the absolute Owner of such Certificate for the purpose of payment of principal of, premium, if any, and interest on the Certificates, for the purpose of giving notices of redemption and other matters with respect to such Certificate, for the purpose of registering transfer with respect to such Certificate, and for #544404033_v2 all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of, premium, if any, and interest on the Certificates only to or upon the order of the respective Owners, as shown in the Register as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, and interest on the Certificates to the extent of the sum or sums so paid. No person other than an Owner, as shown in the Register, shall receive a certificate evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions in this Ordinance with respect to interest checks or drafts being mailed to the registered Owner at the close of business on the Record Date,the word"Cede & Co." in this Ordinance shall refer to such new nominee of DTC. (c) The Representation Letter previously executed and delivered by the City, and applicable to the City's obligations delivered in book entry only form to DTC as securities depository, is hereby ratified and approved for the Certificates. Section 3.10 Successor Securities Depository; Transfer Outside Book-Entry-Only System. In the event that the City determines that it is in the best interest of the City and the beneficial owners of the Certificates that they be able to obtain certificated Certificates, or in the event DTC discontinues the services described herein, the City shall (i) appoint a successor securities depository, qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the appointment of such successor securities depository and transfer one or more separate Certificates to such successor securities depository;or(ii)notify DTC and DTC Participants of the availability through DTC of certificated Certificates and cause the Paying Agent/Registrar to transfer one or more separate registered Certificates to DTC Participants having Certificates credited to their DTC accounts. In such event, the Certificates shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Certificates shall designate, in accordance with the provisions of this Ordinance. Section 3.11 Payments to Cede& Co. Notwithstanding any other provision of this Ordinance to the contrary, so long as the Certificates are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on such Certificates, and all notices with respect to such Certificates shall be made and given, respectively, in the manner provided in the Representation Letter of the City to DTC. Section 3.12 Successor Securities Depository; Transfer Outside Book-Entry Only System. #544404033_v2 In the event that the City or the Paying Agent/Registrar determines that DTC is incapable of discharging its responsibilities described herein and in the representation letter of the City to DTC, and that it is in the best interest of the beneficial owners of the Certificates that they be able to obtain certificated Certificates, or in the event DTC discontinues the services described herein, the City or the Paying Agent/Registrar shall(i)appoint a successor securities depository,qualified to act as such under Section 17(a)of the Securities and Exchange Act of 1934, as amended,notify DTC and DTC Participants of the appointment of such successor securities depository and transfer one or more separate Certificates to such successor securities depository or (ii) notify DTC and DTC Participants of the availability through DTC of Certificates and transfer one or more separate Certificates to DTC Participants having Certificates credited to their DTC accounts. In such event, the Certificates shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Certificates shall designate, in accordance with the provisions of this Ordinance. ARTICLE IV. REDEMPTION OF CERTIFICATES BEFORE MATURITY Section 4.01 Redemption Before Maturity. The Certificates shall be subject to redemption before their scheduled maturity only as provided in this article. Section 4.02 Optional Redemption. (a) The Certificates maturing on or after August 15, 2037 are subject to redemption at the option of the City on August 15,2036 or on any date thereafter,in whole or in part, at a redemption price of par plus accrued interest to the date of redemption. (b) The City,at least 45 days before the redemption date,unless a shorter period shall be satisfactory to the Paying Agent/Registrar, shall notify the Paying Agent/Registrar of such redemption date and of the principal amount of Certificates to be redeemed. Section 4.03 Partial Redemption. (a) If less than all of the Certificates are to be redeemed pursuant to Section 4.02, the City shall determine the maturity or maturities and the amounts thereof to be redeemed and shall direct the Paying Agent/Registrar to call by lot the Certificates, or portions thereof, within such maturity or maturities and in such principal amounts for redemption at the close of business on the Business Day next preceding the date of mailing such notice. (b) A portion of a single Certificate of a denomination greater than$5,000 may be redeemed, but only in a principal amount equal to $5,000 or any integral multiple thereof. If such a Certificate is to be partially redeemed, the Paying Agent/Registrar shall treat each$5,000 portion of a Certificate as though it were a single certificate for purposes of selection for redemption. #544404033_v2 (c) Upon surrender of any Certificate for redemption in part, the Paying Agent/Registrar, in accordance with Section 3.06 of this Ordinance, shall authenticate and deliver an exchange Certificate or Certificates in an aggregate principal amount equal to the unredeemed portion of the Certificate so surrendered, such exchange being without charge, notwithstanding any provision of Section 3.06 to the contrary. Section 4.04 Notice of Redemption to Owners. (a) The Paying Agent/Registrar shall give notice of any redemption of Certificates by sending notice by United States mail, first class, postage prepaid, not less than 30 days before the date fixed for redemption,to the Owner of each Certificate(or part thereof) to be redeemed, at the address shown in the Register at the close of business on the Business Day next preceding the date of mailing such notice. (b) The notice shall state the redemption date, the redemption price, the place at which the Certificates are to be surrendered for payment, and, if less than all the Certificates outstanding are to be redeemed, an identification of the Certificates or portions thereof to be redeemed. (c) The City reserves the right to give notice of its election or direction to redeem Certificates under Section 4.02 conditioned upon the occurrence of subsequent events. Such notice may state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount equal to the amount necessary to effect the redemption,with the Paying Agent/Registrar, or such other entity as may be authorized by law,no later than the redemption date or(ii)that the City retains the right to rescind such notice at any time on or prior to the scheduled redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and redemption shall be of no effect if such moneys and/or authorized securities are not so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice of redemption to the affected Owners. Any Certificates subject to conditional redemption where redemption has been rescinded shall remain Outstanding, and the rescission of such redemption shall not constitute an Event of Default. Further, in the case of a conditional redemption, the failure of the City to make moneys and/or authorized securities available in part or in whole on or before the redemption date shall not constitute an Event of Default. (d) Any notice given as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Owner receives such notice. Section 4.05 Payment Upon Redemption. (a) Before or on each redemption date, the City shall deposit with the Paying Agent/Registrar money sufficient to pay all amounts due on the redemption date and the Paying Agent/Registrar shall make provision for the payment of the Certificates to be redeemed on such date by setting aside and holding in trust an amount from the Interest and Sinking Fund or otherwise received by the Paying Agent/Registrar from the City and #544404033_v2 shall use such funds solely for the purpose of paying the principal of, and accrued interest on the Certificates being redeemed. (b) Upon presentation and surrender of any Certificate called for redemption at the Designated Payment/Transfer Office on or after the date fixed for redemption, the Paying Agent/Registrar shall pay the principal of,redemption premium,if any,and accrued interest on such Certificate to the date of redemption from the money set aside for such purpose. Section 4.06 Effect of Redemption. (a) Notice of redemption having been given as provided in Section 4.05 of this Ordinance and, subject, in the case of an optional redemption under Section 4.02, to any conditions or rights reserved by the City under Section 4.05(c),the Certificates or portions thereof called for redemption shall become due and payable on the date fixed for redemption and, unless the City fails to make provision for the payment of the principal thereof,or accrued interest thereon, such Certificates or portions thereof shall cease to bear interest from and after the date fixed for redemption, whether or not such Certificates are presented and surrendered for payment on such date. (b) If the City shall fail to make provision for payment of all sums due on a redemption date, then any Certificate or portion thereof called for redemption shall continue to bear interest at the rate stated on the Certificate until due provision is made for the payment of same. ARTICLE V. PAYING AGENT/REGISTRAR Section 5.01 Appointment of Initial Paying Agent/Registrar. UMB Bank,N.A.,Austin, Texas, is hereby appointed as the initial Paying Agent/Registrar for the Certificates. The Paying Agent/Registrar Agreement submitted to this City Council, the form of which is attached hereto as Exhibit A,is hereby approved. The Mayor is hereby authorized to amend, complete or modify such agreement as necessary and is further authorized to execute such agreement and the City Secretary is hereby authorized to attest such agreement. Section 5.02 Qualifications. Each Paying Agent/Registrar shall be a commercial bank,a trust company organized under the laws of the State of Texas, or any other entity duly qualified and legally authorized to serve as and perform the duties and services of paying agent and registrar for the Certificates. Section 5.03 Maintaining Paying Agent/Registrar. (a) At all times while any of the Certificates are outstanding, the City will maintain a Paying Agent/Registrar that is qualified under Section 5.02 of this Ordinance. The Mayor is hereby authorized and directed to execute an agreement with the Paying #544404033_v2 Agent/Registrar specifying the duties and responsibilities of the City and the Paying Agent/Registrar. The signature of the Mayor shall be attested by the City Secretary of the City. (b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the City will promptly appoint a replacement, provided, that no such resignation shall be effective until a successor Paying Agent/Registrar has been appointed and has accepted the duties of Paying Agent/Registrar for the Certificates. Section 5.04 Termination. The City, upon not less than sixty (60) days notice, reserves the right to terminate the appointment of any Paying Agent/Registrar by delivering to the entity whose appointment is to be terminated written notice of such termination,provided,that no such termination shall be effective until a successor Paying Agent/Registrar has been appointed and has accepted the duties of Paying Agent/Registrar for the Certificates. Section 5.05 Notice of Change to Owners. Promptly upon each change in the entity serving as Paying Agent/Registrar, the City will cause notice of the change to be sent to each Owner by United States mail, first class, postage prepaid,at the address thereof in the Register,stating the effective date of the change and the name and mailing address of the replacement Paying Agent/Registrar. Section 5.06 Agreement to Perform Duties and Functions. By accepting the appointment as Paying Agent/Registrar and executing the Paying Agent/Registrar Agreement,the Paying Agent/Registrar is deemed to have agreed to the provisions of this Ordinance and that it will perform the duties and functions of Paying Agent/Registrar prescribed thereby. Section 5.07 Delivery of Records to Successor. If a Paying Agent/Registrar is replaced, such Paying Agent/Registrar, promptly upon the appointment of the successor, will deliver the Register (or a copy thereof) and all other pertinent books and records relating to the Certificates to the successor Paying Agent/Registrar. ARTICLE VI. FORM OF THE CERTIFICATES Section 6.01 Form Generally. (a) The Certificates, including the Registration Certificate of the Comptroller of Public Accounts of the State of Texas,the Certificate of the Paying Agent/Registrar,and the Assignment form to appear on each of the Certificates, (i) shall be substantially in the form set forth in this Article,with such appropriate insertions,omissions,substitutions,and other variations as are permitted or required by this Ordinance, and (ii) may have such #544404033_v2 letters,numbers,or other marks of identification(including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including any reproduction of an opinion of counsel)thereon as, consistently herewith,may be determined by the City or by the officers executing such Certificates, as evidenced by their execution thereof. (b) Any portion of the text of any Certificates may be set forth on the reverse side thereof, with an appropriate reference thereto on the face of the Certificates. (c) The definitive Certificates, if any, shall be typewritten, photocopied, printed, lithographed, or engraved, and may be produced by any combination of these methods or produced in any other similar manner, all as determined by the officers executing such Certificates, as evidenced by their execution thereof. (d) The Initial Certificate submitted to the Attorney General of the State of Texas may be typewritten and photocopied or otherwise reproduced. Section 6.02 Form of the Certificates. The form of the Certificates, including the form of the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the form of Certificate of the Paying Agent/Registrar and the form of Assignment appearing on the Certificates, shall be substantially as follows: (a) Form of Certificates. REGISTERED REGISTERED No. $ United States of America State of Texas CITY OF PORT ARTHUR, TEXAS COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION SERIES 2026B INTEREST RATE: MATURITY DATE: CERTIFICATE CUSIP NUMBER: DATE: #544404033_v2 August 15, October 1, 2026 The City of Port Arthur, Texas (the "City"), in Jefferson County, State of Texas, for value received, hereby promises to pay to f I or registered assigns, on the Maturity Date specified above,the sum of DOLLARS unless this Certificate shall have been sooner called for redemption and the payment of the principal hereof shall have been paid or provided for, and to pay interest on such principal amount from the later of the Delivery Date or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above,computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2027. The principal of this Certificate shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the corporate trust office in Austin,Texas(the"Designated Payment/Transfer Office"),of UMB Bank, N.A., as Paying Agent/Registrar, or, with respect to a successor paying agent/registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Certificate is payable by check dated as of the interest payment date, and will be mailed on or before such interest payment date, by United States mail, first class,postage prepaid,by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar, or by such other customary banking arrangements acceptable to the Paying Agent/Registrar and the person to whom interest is to be paid;provided,however,that such person shall bear all risk and expense of such other customary banking arrangements. For the purpose of the payment of interest on this Certificate, the registered owner shall be the person in whose name this Certificate is registered at the close of business on the "Record Date," which shall be the last business day of the month preceding such interest payment date; provided, however, that in the event of nonpayment of interest on a scheduled interest payment date, and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar,if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (the "Special Payment Date," which date shall be fifteen (15) days after the Special Record Date) shall be sent at least five(5)Business Days(as hereinafter defined) prior to the Special Record Date by United States mail, first class, postage prepaid, to the address of each registered owner of a Certificate appearing on the books of the Paying Agent/Registrar at the close of business on the last Business Day next preceding the date of mailing of such notice. If the date for the payment of the principal of or interest on this Certificate is not a Business Day, the date for such payment shall be the next succeeding day which is not a Saturday, Sunday or legal holiday,or day on which banking institutions in the State of Texas or the city in which the #544404033_v2 Designated Payment/Transfer Office of the Paying Agent/Registrar is located are generally authorized or obligated by law or executive order to close (a "Business Day"), and payment on such date shall for all purposes be deemed to have been made on the original date payment was due. This Certificate is one of a series of fully registered Certificates specified in the title hereof issued in the aggregate principal amount of$49,975,000 (herein referred to as the "Certificates"), issued pursuant to a certain ordinance of the City (the "Ordinance") for the purpose of paying contractual obligations to be incurred for the construction and renovation of public works, more specifically for (1) the design and construction of a nature center (including landscaping, sidewalks,parking lots and appurtenances for greenscapes)located on the Pleasure Island System, (2) the construction or reconstruction of water and sewer improvements throughout the City, (3) the renovation and/or construction of a City fire house, (4) the renovation and equipping of City administrative buildings, (5) the design and construction of streets and sidewalks throughout the City and items related thereto, and (6) costs of issuance related to the Certificates. The Certificates maturing on and after August 15, 2037 are subject to redemption at the option of the City on August 15, 2036 or on any date thereafter at a price of par plus interest accrued to the date of redemption. If less than all of the Certificates are to be redeemed pursuant to an optional redemption,the City shall determine the maturity or maturities and the amounts thereof to be redeemed and shall direct the Paying Agent/Registrar to call by lot the Certificates,or portions thereof, within such maturity or maturities and in such principal amounts, for redemption. Certificates maturing on August 15, 2051 and 2026 (the "Term Certificates") are subject to mandatory sinking fund redemption prior to their scheduled maturity, and will be redeemed by the City,in part at a redemption price equal to the principal amount thereof,without premium,plus interest accrued to the redemption date, on the dates and in the principal amounts shown in the following schedules: $ Term Certificates Maturing August 15,2051 Mandatory Redemption Date Principal Amount 2049 $1,550,000 2050 1,630,000 2051(maturity) 1,470,000 $ Term Certificates Maturing August 15,2056 Mandatory Redemption Date Principal Amount 2052 $1,550,000 2053 1,630,000 2054 1,715,000 2055 1,800,000 2056(maturity) 1,895,000 #544404033_v2 The Paying Agent/Registrar will select by lot or by any other customary method that results in a random selection the specific Term Certificates (or with respect to Term Certificates having a denomination in excess of $5,000, each $5,000 portion thereof) to be redeemed by mandatory redemption. The principal amount of Term Certificates required to be redeemed on any redemption date pursuant to the foregoing mandatory sinking fund redemption provisions hereof shall be reduced,at the option of the City,by the principal amount of any Term Certificates which, at least 45 days prior to the mandatory sinking fund redemption date (i) shall have been acquired by the City at a price not exceeding the principal amount of such Term Certificates plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, or (ii) shall have been redeemed pursuant to the optional redemption provisions hereof and not previously credited to a mandatory sinking fund redemption. Notice of such redemption or redemptions shall be given by United States mail, first class, postage prepaid,not less than 30 days before the date fixed for redemption,to the registered owner of each of the Certificates to be redeemed in whole or in part. In the Ordinance, the City reserves the right in the case of an optional redemption to give notice of its election or direction to redeem Certificates conditioned upon the occurrence of subsequent events. Such notice may state (i)that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount equal to the amount necessary to effect the redemption,with the Paying Agent/Registrar,or such other entity as may be authorized by law, no later than the redemption date or (ii) that the City retains the right to rescind such notice at any time prior to the scheduled redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and redemption shall be of no effect if such moneys and/or authorized securities are not so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice of redemption to the affected Owners. Any Certificates subject to conditional redemption where redemption has been rescinded shall remain Outstanding, and the rescission of such redemption shall not constitute an event of default. Further, in the case of a conditional redemption,the failure of the City to make moneys and/or authorized securities available in part or in whole on or before the redemption date shall not constitute an event of default. Any notice so mailed shall be conclusively presumed to have been duly given, whether or not the registered owner receives such notice.Notice having been so given and subject, in the case of an optional redemption, to any rights or conditions reserved by the City in the notice, the Certificates called for redemption shall become due and payable on the specified redemption date, and notwithstanding that any Certificate or portion thereof has not been surrendered for payment, interest on such Certificate or portion thereof shall cease to accrue. As provided in the Ordinance, and subject to certain limitations therein set forth, this Certificate is transferable upon surrender of this Certificate for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar;thereupon,one or more new fully registered Certificates of the same stated maturity, of authorized denominations, bearing the same rate of interest, and for the same aggregate principal amount will be issued to the designated transferee or transferees. #544404033_v2 Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer or exchange any Certificate called for redemption, in whole or in part, within 45 calendar days prior to the date fixed for redemption; provided, however, such limitation shall not be applicable to an exchange by the owner of the uncalled principal balance of a Certificate. The City, the Paying Agent/Registrar, and any other person may treat the person in whose name this Certificate is registered as the owner hereof for the purpose of receiving payment as herein provided (except interest shall be paid to the person in whose name this Certificate is registered on the Record Date or Special Record Date, as applicable) and for all other purposes, whether or not this Certificate be overdue, and neither the City nor the Paying Agent/Registrar shall be affected by notice to the contrary. Build America Mutual Assurance Company ("BAM"), New York, New York, has delivered its municipal bond insurance policy (the "Policy") with respect to the scheduled payments due of principal of and interest on this Certificate to UMB Bank, N.A., Austin, Texas, or its successor, as paying agent for the Certificates (the "Paying Agent"). Said Policy is on file and available for inspection at the principal office of the Paying Agent and a copy thereof may be obtained from BAM or the Paying Agent. All payments required to be made under the Policy shall be made in accordance with the provisions thereof. By its purchase of these Certificates,the owner acknowledges and consents (i) to the subrogation and all other rights of BAM as more fully set forth in the Policy and (ii) that upon the occurrence and continuance of a default or an event of default under the Ordinance or this Certificate, BAM shall be deemed to be the sole owner of the Certificates for all purposes and shall be entitled to control and direct the enforcement of all rights and remedies granted to the owners of the Certificates or the trustee, paying agent, registrar or similar agent for the benefit of such owners under the Ordinance, at laws or in equity. IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Certificate and the series of which it is a part is duly authorized by law; that all acts, conditions, and things required to be done precedent to and in the issuance of the Certificates have been properly done and performed and have happened in regular and due time, form, and manner as required by law; and that ad valorem taxes upon all taxable property in the City have been levied for and pledged to the payment of the debt service requirements of the Certificates within the limit prescribed by law; that,in addition to said taxes,further provisions have been made for the payment of the debt service requirements of the Certificates by pledging to such purpose Surplus Revenues, as defined in the Ordinance, derived by the City from the operation of its combined waterworks and sewer system in an amount limited to$10,000;that when so collected, such taxes and Surplus Revenues shall be appropriated to such purposes; and that the total indebtedness of the City, including the Certificates, does not exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the City has caused this Certificate to be executed by the manual or electronic signature of the Mayor of the City and countersigned by the manual or electronic signature of the City Secretary of the City,and the official seal of the City has been duly impressed or placed in electronic form on this Certificate. #544404033_v2 Charlotte M. Moses, Mayor City of Port Arthur, Texas Christie Ned, City Secretary City of Port Arthur, Texas [SEAL] (b) Form of Comptroller's Registration Certificate. The following Comptroller's Registration Certificate may be deleted from the definitive Certificates if such certificate on the Initial Certificate is fully executed. CERTIFICATE OF COMPTROLLER OFFICE OF THE COMPTROLLER § OF PUBLIC ACCOUNTS § REGISTER NO. OF THE STATE OF TEXAS § I hereby certify that there is on file and of record in my office an opinion of the Attorney General of the State of Texas to the effect that this Certificate has been examined by him as required by law, that he finds that it has been issued in conformity with the Constitution and laws of the State of Texas, and that it is a valid and binding obligation of the City of Port Arthur, Texas, and that this Certificate has this day been registered by me. Witness my hand and seal of office at Austin, Texas, Comptroller of Public Accounts of the State of Texas [SEAL] (c) Form of Certificate of Paying Agent/Registrar. The following Certificate of Paying Agent/Registrar may be deleted from the Initial Certificate if the executed Comptroller's Registration Certificate appears thereon. CERTIFICATE OF PAYING AGENT/REGISTRAR #544404033_v2 The records of the Paying Agent/Registrar show that the Initial Certificate of this series of Certificates was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas, and that this is one of the Certificates referred to in the within-mentioned Ordinance. UMB Bank,N.A., as Paying Agent/Registrar By: Dated: Authorized Signatory (d) Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto (print or typewrite name, address and Zip Code of transferee): (Social Security or other identifying number: ) the within Certificate and all rights hereunder and hereby irrevocably constitutes and appoints attorney to transfer the within Certificate on the books kept for registration hereof, with full power of substitution in the premises. Dated: NOTICE: The signature on this Assignment must correspond with the name of the registered owner as it appears on the face of the within Certificate in every particular and must be guaranteed in a manner acceptable to the Paying Agent/Registrar. Signature Guaranteed: Authorized Signatory #544404033_v2 (e) The Initial Certificate shall be in the form set forth in paragraphs (a), (b) and(d) of this Section, except for the following alterations: (i) immediately under the name of the Certificate, the headings "INTEREST RATE" and "MATURITY DATE" shall both be completed with the words"As shown below"and the words "CUSIP NUMBER" deleted; and (ii) in the first paragraph of the Certificate, the words "on the Maturity Date specified above," shall be deleted and the following will be inserted: "on August 15 in each of the years, in the principal installments and bearing interest at the per annum rates in accordance with the following schedule: Principal Interest Years Installments Rate (Information to be inserted from schedule in Section 3.02 of this Ordinance) Section 6.03 CUSIP Registration. The City may secure identification numbers through the CUSIP Service Bureau Division of Standard& Poor's Corporation,New York,New York, and may authorize the printing of such numbers on the face of the Certificates. It is expressly provided, however, that the presence or absence of CUSIP numbers on the Certificates shall be of no significance or effect as regards the legality thereof and neither the City nor the attorneys approving said Certificates as to legality are to be held responsible for CUSIP numbers incorrectly printed on the Certificates. Section 6.04 Legal Opinion. The approving legal opinion of Holland& Knight LLP, Bond Counsel, may be printed on the reverse side of or attached to each Certificate over the certification of the City Secretary of the City, which may be executed in electronic form. Section 6.05 Statement of Insurance. A statement relating to a municipal bond insurance policy, if any, to be issued for the Certificates may be printed on or attached to each Certificate. ARTICLE VII. SALE AND DELIVERY OF CERTIFICATES,DEPOSIT OF PROCEEDS; OFFICIAL STATEMENT Section 7.01 Sale of Certificates and Official Statement. (a) The Certificates are hereby officially sold and awarded to and shall be delivered to the Underwriters at the price and on the terms specified in the Purchase #544404033_v2 Contract. The form, terms and provisions of the Purchase Contract are hereby approved and the City Manager or Director of Finance is hereby authorized and directed to execute and deliver such Purchase Contract upon completion of the terms thereof. It is hereby officially found, determined and declared that the terms of this sale are the most advantageous reasonably obtainable. The Certificates shall initially be registered in the name of the representative of the Underwriters, or its designee. The Mayor and all other officers, agents and representatives of the City are hereby authorized to do any and all things necessary or desirable to satisfy the conditions to and to provide for the issuance and delivery of the Certificates. (b) The form and substance of the Preliminary Official Statement, and any addenda, supplement or amendment thereto, and the final Official Statement(the"Official Statement")presented to and considered at this meeting,are hereby in all respects approved and adopted, and the Preliminary Official Statement is hereby deemed final as of its date (except for the omission of pricing and related information)within the meaning and for the purposes of paragraph(b)(1) of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended. The Mayor and City Secretary of the City are hereby authorized and directed to execute the same and deliver appropriate numbers of copies thereof to the Underwriters. The Official Statement as thus approved and delivered,with such appropriate variations as shall be approved by the Mayor of the City and the Underwriters, may be used by the Underwriters in the public offering and sale thereof. The use and distribution of the Preliminary Official Statement in the public offering of the Certificates by the Underwriters is hereby ratified, approved and confirmed. The City Secretary is hereby authorized and directed to include and maintain a copy of the Official Statement and any addenda, supplement or amendment thereto thus approved among the permanent records of this meeting. The use and distribution of the Official Statement and the preliminary public offering of the Certificates by the Underwriters is hereby ratified,approved and confirmed. (c) All officers of the City are authorized to execute such documents, certificates and receipts, and to make such elections with respect to the tax-exempt status of the Certificates, as they may deem appropriate in order to consummate the delivery of the Certificates. (d) The obligation of the Underwriters to accept delivery of the Certificates is subject to the Underwriters being furnished with the final, approving opinion of Bond Counsel for the City, which opinion shall be dated and delivered the Section 7.03 Control and Delivery of Certificates. (a) The Mayor of the City is hereby authorized to have control of the Initial Certificate and all necessary records and proceedings pertaining thereto pending investigation, examination, and approval of the Attorney General of the State of Texas, registration by the Comptroller and registration with, and initial exchange or transfer by, the Paying Agent/Registrar. #544404033_v2 (b) After registration by the Comptroller, delivery of the Certificates shall be made to the Underwriter under and subject to the general supervision and direction of the Mayor, against receipt by the City of all amounts due to the City under the terms of sale. (c) All officers of the City are authorized to execute such documents, certificates and receipts and to make such elections with respect to the tax-exempt status of the Certificates, as they may deem necessary to consummate the delivery of the Certificates. Section 7.04 Deposit of Proceeds. The purchase price for the Certificates of$50,479,922.99 (which represents of the principal amount of $49,975,000 plus a cash premium of $833,732.00, less the Underwriter's discount of$298,809.01) shall be allocated as follows: (a) $50,000,000.00 to the construction fund for the Project; (b) $216,040.00 to the cost of issuance of the Certificates; and (c) $259,460.64 for bond insurance. (d) Any amounts remaining following payment of the costs of issuing the Certificates shall be deposited to the interest and sinking fund for the Certificates. Section 7.05 Official Statement. The form and substance of the Preliminary Official Statement and any addenda, supplement or amendment thereto, is hereby ratified and approved, and is confirmed as deemed final within the meaning and for the purposes of paragraph (b)(1) of Rule 15c2-12 under the Securities Exchange Act of 1934. The City hereby authorizes the preparation of a final Official Statement to add the terms of the Initial Purchaser's bid and other relevant information. The use of such final Official Statement in the reoffering of the Certificates by the Initial Purchaser is hereby approved and authorized. The proper officials of the City are authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed therein,dated as of the date of payment for and delivery of the Certificates. ARTICLE VIII. INVESTMENTS Section 8.01 Investments. (a) Money in the Interest and Sinking Fund created by this Ordinance and any of the funds to be deposited pursuant to Section 7.03(b) hereof, at the option of the City, may be invested in such securities or obligations as permitted under applicable law as in effect on the date of the investment. #544404033_v2 (b) Any securities or obligations in which such money is so invested shall be kept and held in trust for the benefit of the Owners and shall be sold and the proceeds of sale shall be timely applied to the making of all payments required to be made from the fund from which the investment was made. Section 8.02 Investment Income. (a) Interest and income derived from investment of the Interest and Sinking Fund shall be credited to such fund. (b) Interest and income derived from investment of the funds to be deposited pursuant to Section 7.03(b)hereof shall be credited to the account where deposited until the acquisition or construction of the Projects is completed and thereafter, to the extent such interest and income are present, such interest and income shall be deposited to the Interest and Sinking Fund. Section 8.03 Engagement of Professionals. The City Council hereby confirms the prior engagement of(l) Holland& Knight LLP, as Bond Counsel to the City and (2) Hilltop Securities Inc., as Financial Advisor, to the City, in connection with the issuance and sale of the Certificates and (3) approves the engagement of Huntington Securities, Inc., Siebert Williams Shank & Co., LLC and PNC Capital Markets LLC, as the underwriters. ARTICLE IX. PARTICULAR REPRESENTATIONS AND COVENANTS Section 9.01 Payment of the Certificates. On or before each Interest Payment Date or any redemption date for the Certificates and while any of the Certificates are outstanding and unpaid, there shall be made available to the Paying Agent/Registrar,out of the Interest and Sinking Fund,money sufficient to pay such interest on and principal of the Certificates as will accrue or mature on the applicable Interest Payment Date,maturity date or date of prior redemption. Such transfer of funds shall be made in such manner as will cause immediately available funds to be deposited with the Paying Agent/Registrar not later than the close of business on the Business Day next preceding the date of payment for the Certificates. Section 9.02 Other Representations and Covenants. (a) The City will faithfully perform, at all times, any and all covenants, undertakings, stipulations, and provisions contained in this Ordinance and in each Certificate; the City will promptly pay or cause to be paid the principal of and interest on each Certificate on the dates and at the places and manner prescribed in such Certificate;and the City will, at the times and in the manner prescribed by this Ordinance, deposit or cause to be deposited the amounts of money specified by this Ordinance. #544404033_v2 (b) The City is duly authorized under the laws of the State of Texas to issue the Certificates; all action on its part for the creation and issuance of the Certificates has been duly and effectively taken; and the Certificates in the hands of the Owners thereof are and will be valid and enforceable obligations of the City in accordance with their terms. ARTICLE X. PROVISIONS CONCERNING FEDERAL INCOME TAX EXCLUSION Section 10.01 Provisions Concerning Federal Income Tax. (a) General. The City intends that the interest on the Certificates be excludable from gross income for federal income tax purposes pursuant to sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended (the "Code"), and the applicable Treasury Regulations (the "Regulations"). The City covenants and agrees not to take any action, or omit to take any action within its control, that if taken or omitted, respectively, would (i) cause the interest on the Certificates to be includable in gross income, as defined in section 61 of the Code, for federal income tax purposes or(ii)result in the violation of or failure to satisfy any provision of Section 103 and 141 through 150 of the Code and the applicable Regulations. In particular,the City covenants and agrees to comply with each requirement of this Article X; provided, however, that the City will not be required to comply with any particular requirement of this Article X if the City has received an opinion of nationally recognized bond counsel ("Counsel's Opinion") that (i) such noncompliance will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Certificates or (ii) compliance with some other requirement set forth in this Article X will satisfy the applicable requirements of the Code and the Regulations, in which case compliance with such other requirement specified in such Counsel's Opinion will constitute compliance with the corresponding requirement specified in this Article X. (b) No Private Use or Payment and No Private Loan Financing. The City covenants and agrees that it will make such use of the proceeds of the Certificates, including interest or other investment income derived from Certificates proceeds, regulate the use of property financed, directly or indirectly,with such proceeds,and take such other and further action as may be required so that the Certificates will not be "private activity bonds" within the meaning of section 141 of the Code and the Regulations promulgated thereunder. Moreover, the City will certify, through an authorized officer, employee or agent, based upon all facts and estimates known or reasonably expected to be in existence on the date the Certificates are delivered, that the proceeds of the Certificates will not be used in a manner that would cause the Certificates to be"private activity bonds"within the meaning of section 141 of the Code and the Regulations promulgated thereunder. (c) No Federal Guarantee. The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that if taken or omitted, respectively, would cause the Certificates to be"federally guaranteed"within the meaning of section 149(b) of the Code and the applicable Regulations thereunder, except as permitted by section 149(b)(3) of the Code and such Regulations. #544404033_v2 (d) No Hedge Bonds. The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that if taken or omitted,respectively, would cause the Certificates to be "hedge bonds" within the meaning of section 149(g) of the Code and the applicable Regulations thereunder. (e) No Arbitrage. The City covenants and agrees that it will make such use of the proceeds of the Certificates,including interest or other investment income derived from Certificate proceeds, regulate investments of proceeds of the Certificates, and take such other and further action as may be required so that the Certificates will not be "arbitrage bonds" within the meaning of section 148(a) of the Code and the applicable Regulations promulgated thereunder. Moreover, the City will certify, through an authorized officer, employee or agent,based upon all facts and estimates known or reasonably expected to be in existence on the date the Certificates are delivered,that the proceeds of the Certificates will not be used in a manner that would cause the Certificates to be "arbitrage bonds" within the meaning of section 148(a) of the Code and the applicable Regulations promulgated thereunder. (f) Arbitrage Rebate. If the City does not qualify for an exception to the requirements of section 148(f) of the Code relating to the required rebate to the United States, the City will take all necessary steps to comply with the requirement that certain amounts earned by the City on the investment of the "gross proceeds" of the Certificates (within the meaning of section 148(f)(6)(B) of the Code), be rebated to the federal government. Specifically, the City will (i) maintain records regarding the investment of the gross proceeds of the Certificates as may be required to calculate the amount earned on the investment of the gross proceeds of the Certificates separately from records of amounts on deposit in the funds and accounts of the City allocable to other bond issues of the City or moneys that do not represent gross proceeds of any bonds of the City, (ii) determine at such times as are required by applicable Regulations, the amount earned from the investment of the gross proceeds of the Certificates which is required to be rebated to the federal government, and (iii) pay, not less often than every fifth anniversary date of the delivery of the Certificates, or on such other dates as may be permitted under applicable Regulations, all amounts required to be rebated to the federal government. Further, the City will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the gross proceeds of the Certificates that might result in a reduction in the amount required to be paid to the federal government because such arrangement results in a smaller profit or a larger loss than would have resulted if the arrangement had been at arm's length and had the yield on the issue not been relevant to either party. (g) Information Reporting. The City covenants and agrees to file or cause to be filed with the Secretary of the Treasury, not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Certificates are issued, an information statement concerning the Certificates, all under and in accordance with section 149(e) of the Code and the applicable Regulations promulgated thereunder. #544404033_v2 (h) Record Retention. The City will retain all pertinent and material records relating to the use and expenditure of the proceeds of the Certificates until three years after the last Certificate is redeemed, or such shorter period as authorized by subsequent guidance issued by the Department of Treasury, if applicable. All records will be kept in a manner that ensures their complete access throughout the retention period. For this purpose,it is acceptable that such records are kept either as hardcopy books and records or in an electronic storage and retrieval system,provided that such electronic system includes reasonable controls and quality assurance programs that assure the ability of the City to retrieve and reproduce such books and records in the event of an examination of the Certificates by the Internal Revenue Service. (i) Registration. The Certificates will be issued in registered form. (j) Deliberate Actions. The City will not take a deliberate action(as defined in section 1.141-2(d)(3) of the Regulations) that causes the Certificates to fail to meet any requirement of section 141 of the Code after the issue date of the Certificates unless an appropriate remedial action is permitted by section 1.141-12 of the Regulations and an opinion of Bond Counsel is obtained that such remedial action cures any failure to meet the requirements of section 141 of the Code. (k) Continuing Obligation. Notwithstanding any other provision of this Ordinance, the City obligations under the covenants and provisions of this Article X will survive the defeasance and discharge of the Certificates for as long as such matters are relevant to the exclusion from gross income of interest on the Certificates for federal income tax purposes. ARTICLE XI. DEFAULT AND REMEDIES Section 11.01 Events of Default. Each of the following occurrences or events for the purpose of this Ordinance is hereby declared to be an Event of Default: (a) the failure to make payment of the principal of,redemption premium,if any, or interest on any of the Certificates when the same becomes due and payable; or (b) default in the performance or observance of any other covenant,agreement, or obligation of the City, which default materially and adversely affects the rights of the Owners, including but not limited to their prospect or ability to be repaid in accordance with this Ordinance,and the continuation thereof for a period of sixty(60)days after notice of such default is given by any Owner to the City. Section 11.02 Remedies for Default. (a) Upon the happening of any Event of Default, any Owner or an authorized representative thereof, including but not limited to a trustee or trustees therefor, may #544404033_v2 proceed against the City for the purpose of protecting and enforcing the rights of the Owners under this Ordinance by mandamus or other suit, action or special proceeding in equity or at law in any court of competent jurisdiction for any relief permitted by law, including the specific performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right of the Owners hereunder or any combination of such remedies. (b) It is provided that all such proceedings shall be instituted and maintained for the equal benefit of all Owners of Certificates then outstanding. Section 11.03 Remedies Not Exclusive. (a) No remedy herein conferred or reserved is intended to be exclusive of any other available remedy, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the Certificates or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to accelerate the debt evidenced by the Certificates shall not be available as a remedy under this Ordinance. (b) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. ARTICLE XII. DISCHARGE Section 12.01 Discharge. The Certificates may be defeased, refunded or discharged in any manner permitted by applicable law. ARTICLE XIII. CONTINUING DISCLOSURE UNDERTAKING Section 13.01 Annual Reports. The City shall provide annually to the MSRB, within six (6)months after the end of each Fiscal Year,financial information and operating data with respect to the City of the general type included in the final Official Statement, being the information described in Exhibit B hereto. Any financial statements so to be provided shall be(i)prepared in accordance with the accounting principles described in Exhibit B hereto, and (ii) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If the audit of such financial statements is not complete within such period, then the City shall provide notice that audited financial statements are not available and shall provide unaudited financial statements for the applicable Fiscal Year to the MSRB. Thereafter,when and if audited financial statements become available,the City shall provide such audited financial statements as required to the MSRB. #544404033_v2 (a) If the City changes its Fiscal Year, it will notify each the MSRB of the change(and of the date of the new Fiscal Year end)prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. (b) The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document(including an official statement or other offering document)that theretofore has been provided to the MSRB or filed with the SEC. Section 13.02 Material Event Notices (a) The City shall notify the MSRB,in a timely manner,of any of the following events with respect to the Certificates, if such event is material within the meaning of the federal securities laws: (i) principal and interest payment delinquencies; (ii) nonpayment related defaults; (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) adverse tax opinions or events affecting the tax exempt status of the Certificates; (vi i) modifications to rights of Owners; (viii) bond calls; (ix) defeasance; (x) release, substitution, or sale of property securing repayment of the Certificates; (xi) rating changes; (xii) bankruptcy, insolvency, receivership, or similar event of the obligated person; Note to paragraph (xii): For the purposes of the event identified in paragraph(xii) of this section, the event is considered to occur when any of the following occur: the appointment of a receiver,fiscal agent or similar officer for an obligated person #544404033_v2 in a proceeding under the U.S. 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 obligated person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers 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 obligated person. (xiii) the consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (xiv) the appointment of a successor or additional trustee or the change in the name of the trustee, if material; (xv) the incurrence of a financial obligation of the City, if material, or an agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material; and (xvi) a default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties. (b) The City shall notify the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with Section 13.01 of this Ordinance by the time required by such Section. (c) The City reserves the right to file all information and notices required under this Article through the facilities of DisclosureUSA or any other central post office approved by the SEC for such purpose. Section 13.03 Limitations, Disclaimers and Amendments. The City shall be obligated to observe and perform the covenants specified in this Article for so long as, but only for so long as the City remains an "obligated person" with respect to the Certificates within the meaning of the Rule, except that the City in any event will give notice of any redemption calls and any defeasances that cause the City to be no longer an"obligated person." The provisions of this Article are for the sole benefit of the Owners and beneficial owners of the Certificates, and nothing in this Article, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide #544404033_v2 any other information that may be relevant or material to a complete presentation of the City's financial results,condition,or prospects or hereby undertake to update any information provided in accordance with this Article or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Certificates at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. (a) No default by the City in observing or performing its obligations under this Article shall constitute a breach of or default under the Ordinance for purposes of any other provisions of this Ordinance. (b) Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. (c) The provisions of this Article may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (i) the provisions of this Article, as so amended, would have permitted an underwriter to purchase or sell Certificates in the primary offering of the Certificates in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and(ii)either (A)the Owners of a majority in aggregate principal amount (or any greater amount required by any other provisions of this Ordinance that authorizes such an amendment) of the Outstanding Certificates consent to such amendment or (B) an entity or individual person that is unaffiliated with the City (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the Owners and beneficial owners of the Certificates. The provisions of this Article may also be amended from time to time or repealed by the City 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 City's right to do so would not prevent underwriters of the initial public offering of the Certificates from lawfully purchasing or selling Certificates in such offering. If the City so amends the provisions of this Article, it shall include with any amended financial information or operating data next provided in accordance with Section 13.01 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. #544404033_v2 ARTICLE XIV. BOND INSURANCE In order to obtain the lowest attainable interest rates on the Certificates, the Mayor is authorized to enter into a credit agreement with one or more Insurers to obtain one or more bond insurance policies with respect to all or a portion of the Certificates. The Mayor is authorized to execute and the City Secretary or City Secretary is authorized to attest and affix the City's seal to any documents required in connection with the purchase of any such policy or policies. The City hereby agrees to the following: (a) "Insurance Policy" shall be defined as follows: "the insurance policy issued by the Insurer guaranteeing the scheduled payment of principal of and interest on the Certificates when due". "Insurer" shall be defined as follows: "Build America Mutual Assurance Company, a New York stock insurance company, or any successor thereto or assignee thereof'. (b) The prior written consent of the Insurer shall be a condition precedent to the deposit of any credit instrument provided in lieu of a cash deposit into the Debt Service Reserve Fund, if any. Notwithstanding anything to the contrary set forth in the Ordinance,amounts on deposit in the Debt Service Reserve Fund shall be applied solely to the payment of debt service due on the Certificates. (c) The Insurer shall be deemed to be the sole holder of the Insured Certificates for the purpose of exercising any voting right or privilege or giving any consent or direction or taking any other action that the holders of the Certificates insured by it are entitled to take pursuant to the section or article of the Ordinance pertaining to (i) defaults and remedies and(ii)the duties and obligations of the Paying Agent. In furtherance thereof and as a term of the Ordinance and each Certificate,the Paying Agent and each Bondholder appoint the Insurer as their agent and attorney-in-fact and agree that the Insurer may at any time during the continuation of any proceeding by or against the Issuer under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law(an"Insolvency Proceeding")direct all matters relating to such Insolvency Proceeding, including without limitation, (A) all matters relating to any claim or enforcement proceeding in connection with an Insolvency Proceeding (a "Claim"), (B) the direction of any appeal of any order relating to any Claim,(C)the posting of any surety, supersedeas or performance bond pending any such appeal, and (D) the right to vote to accept or reject any plan of adjustment. In addition,the Paying Agent and each Bondholder delegate and assign to the Insurer, to the fullest extent permitted by law, the rights of the Paying Agent and each Bondholder in the conduct of any Insolvency Proceeding, including, without limitation, all rights of any party to an adversary proceeding or action with respect to any court order issued in connection with any such Insolvency Proceeding. Remedies granted to the Bondholders shall expressly include mandamus. (d) The security for the Certificates shall include a pledge of any agreement with any underlying obligor that is a source of payment for the Certificates and a default under any such agreement shall constitute an Event of Default under the #544404033_v2 Ordinance. If acceleration is permitted under the Ordinance, the maturity of Certificates insured by the Insurer shall not be accelerated without the consent of the Insurer and in the event the maturity of the Certificates is accelerated, the Insurer may elect, in its sole discretion,to pay accelerated principal and interest accrued on such principal to the date of acceleration(to the extent unpaid by the Issuer) and the Paying Agent shall be required to accept such amounts. Upon payment of such accelerated principal and interest accrued to the acceleration date as provided above, the Insurer's obligations under the Insurance Policy with respect to such Certificates shall be fully discharged. No grace period for a covenant default shall exceed 30 days or be extended for more than 60 days, without the prior written consent of the Insurer. No grace period shall be permitted for payment defaults. (e) The Insurer shall be included as a third party beneficiary to the Ordinance. Upon the occurrence of an extraordinary optional, special or extraordinary mandatory redemption in part,the selection of Certificates to be redeemed shall be subject to the approval of the Insurer. The exercise of any provision of the Ordinance which permits the purchase of Certificates in lieu of redemption shall require the prior written approval of the Insurer if any Certificate so purchased is not cancelled upon purchase. Any amendment, supplement, modification to, or waiver of, the Ordinance or any other transaction document, including any underlying security agreement (each a "Related Document"), that requires the consent of Certificate owners or adversely affects the rights and interests of the Insurer shall be subject to the prior written consent of the Insurer. (f) Unless the Insurer otherwise directs, upon the occurrence and continuance of an Event of Default or an event which with notice or lapse of time would constitute an Event of Default, amounts on deposit in the Construction Fund shall not be disbursed, but shall instead be applied to the payment of debt service or redemption price of the Certificates. The rights granted to the Insurer under the Ordinance or any other Related Document to request, consent to or direct any action are rights granted to the Insurer in consideration of its issuance of the Insurance Policy. Any exercise by the Insurer of such rights is merely an exercise of the Insurer's contractual rights and shall not be construed or deemed to be taken for the benefit, or on behalf, of the Bondholders and such action does not evidence any position of the Insurer, affirmative or negative, as to whether the consent of the Certificate owners or any other person is required in addition to the consent of the Insurer. (g) Only (1) cash, (2) non-callable direct obligations of the United States of America("Treasuries"), (3) evidences of ownership of proportionate interests in future interest and principal payments on Treasuries held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying Treasuries are not available to any person claiming through the custodian or to whom the custodian may be obligated, (4) subject to the prior written consent of the Insurer, pre-refunded municipal obligations rated "AAA" and "Aaa" by S&P and Moody's, respectively, or (5) subject to the prior written consent of the Insurer, securities eligible for"AAA" defeasance under then existing criteria of S&P or any combination thereof, shall be used to effect defeasance of the Certificates unless the Insurer otherwise approves. Any obligations or #544404033_v2 securities deposited as provided in this paragraph, shall qualify under Section 1207.062(b) of the Local Government Code, as amended. To accomplish defeasance, the Issuer shall cause to be delivered (i) a report of an independent firm of nationally recognized certified public accountants or such other accountant as shall be acceptable to the Insurer ("Accountant") verifying the sufficiency of the escrow established to pay the Certificates in full on the maturity or redemption date ("Verification"), (ii) an Escrow Deposit Agreement(which shall be acceptable in form and substance to the Insurer),(iii)an opinion of nationally recognized bond counsel to the effect that the Certificates are no longer "Outstanding" under the Ordinance and (iv) a certificate of discharge of the Paying Agent with respect to the Certificates; each Verification and defeasance opinion shall be acceptable in form and substance, and addressed, to the Issuer, Paying Agent and Insurer. The Insurer shall be provided with final drafts of the above-referenced documentation not less than five business days prior to the funding of the escrow. Certificates shall be deemed Outstanding under the Ordinance unless and until they are in fact paid and retired or the above criteria are met. Notwithstanding the above, in the event any provisions in this Section 30(1) conflict with Section 1207.033 of the Texas Government Code, as amended ("Section 1207.033"), the provisions of Section 1207.033 shall prevail. (h) Amounts paid by the Insurer under the Insurance Policy shall not be deemed paid for purposes of the Ordinance and the Certificates relating to such payments shall remain Outstanding and continue to be due and owing until paid by the Issuer in accordance with the Ordinance. The Ordinance shall not be discharged unless all amounts due or to become due to the Insurer have been paid in full or duly provided for. (I) Each of the Issuer and Paying Agent covenant and agree to take such action (including, as applicable, filing of UCC financing statements and continuations thereof)as is necessary from time to time to preserve the priority of the pledge of the Trust Estate under applicable law. Claims Upon the Insurance Policy and Payments by and to the Insurer. If, on the third Business Day prior to the related scheduled interest payment date or principal payment date ("Payment Date") there is not on deposit with the Paying Agent, after making all transfers and deposits required under the Ordinance, moneys sufficient to pay the principal of and interest on the Certificates due on such Payment Date, the Paying Agent shall give notice to the Insurer and to its designated agent (if any) (the "Insurer's Fiscal Agent") by telephone or telecopy of the amount of such deficiency by 12:00 noon, New York City time, on such Business Day. If, on the second Business Day prior to the related Payment Date,there continues to be a deficiency in the amount available to pay the principal of and interest on the Certificates due on such Payment Date,the Paying Agent shall make a claim under the Insurance Policy and give notice to the Insurer and the Insurer's Fiscal Agent (if any) by telephone of the amount of such deficiency, and the allocation of such deficiency between the amount required to pay interest on the Certificates and the amount required to pay principal of the Certificates, confirmed in writing to the Insurer and the Insurer's Fiscal Agent by 12:00 noon, New York City time, on such second Business Day by filling in the form of Notice of Claim and Certificate delivered with the Insurance Policy. #544404033_v2 The Paying Agent shall designate any portion of payment of principal on Certificates paid by the Insurer, whether by virtue of mandatory sinking fund redemption, maturity or other advancement of maturity, on its books as a reduction in the principal amount of Certificates registered to the then current Bondholder, whether DTC or its nominee or otherwise, and shall issue a replacement Certificate to the Insurer, registered in the name of Build America Mutual Assurance Company,in a principal amount equal to the amount of principal so paid(without regard to authorized denominations);provided that the Paying Agent's failure to so designate any payment or issue any replacement Certificate shall have no effect on the amount of principal or interest payable by the Issuer on any Certificate or the subrogation rights of the Insurer. The Paying Agent shall keep a complete and accurate record of all funds deposited by the Insurer into the Policy Payments Account (defined below) and the allocation of such funds to payment of interest on and principal of any Certificate. The Insurer shall have the right to inspect such records at reasonable times upon reasonable notice to the Paying Agent. Upon payment of a claim under the Insurance Policy, the Paying Agent shall establish a separate special purpose trust account for the benefit of Bondholders referred to herein as the "Policy Payments Account" and over which the Paying Agent shall have exclusive control and sole right of withdrawal. The Paying Agent shall receive any amount paid under the Insurance Policy in trust on behalf of Bondholders and shall deposit any such amount in the Policy Payments Account and distribute such amount only for purposes of making the payments for which a claim was made. Such amounts shall be disbursed by the Paying Agent to Bondholders in the same manner as principal and interest payments are to be made with respect to the Certificates under the sections hereof regarding payment of Certificates. It shall not be necessary for such payments to be made by checks or wire transfers separate from the check or wire transfer used to pay debt service with other funds available to make such payments.Notwithstanding anything herein to the contrary, the Issuer agrees to pay to the Insurer(i) a sum equal to the total of all amounts paid by the Insurer under the Insurance Policy (the "Insurer Advances"); and (ii) to the extent permitted by law and subject to annual appropriation, interest on such Insurer Advances from the date paid by the Insurer until payment thereof in full, payable to the Insurer at the Late Payment Rate per annum (collectively, the "Insurer Reimbursement Amounts"). "Late Payment Rate" means the lesser of(a)the greater of(i)the per annum rate of interest,publicly announced from time to time by JPMorgan Chase Bank at its principal office in The City of New York, as its prime or base lending rate (any change in such rate of interest to be effective on the date such change is announced by JPMorgan Chase Bank)plus 3%,and(ii)the then applicable highest rate of interest on the Certificates and (b) the maximum rate permissible under applicable usury or similar laws limiting interest rates. The Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a year of 360 days. The Issuer hereby covenants and agrees that the Insurer Advances are secured by a lien on and pledge of the Net Revenues and payable from such Net Revenues on a parity with debt service due on the Certificates. Funds held in the Policy Payments Account shall not be invested by the Paying Agent and may not be applied to satisfy any costs, expenses or liabilities of the Paying Agent. Any funds remaining in the Policy Payments Account following a Certificate payment date shall promptly be remitted to the Insurer. #544404033_v2 (j) The Insurer shall,to the extent it makes any payment of principal of or interest on the Certificates, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Insurance Policy (which subrogation rights shall also include the rights of any such recipients in connection with any Insolvency Proceeding).Each obligation of the Issuer to the Insurer under the Related Documents shall survive discharge or termination of such Related Documents. The Issuer shall pay or reimburse the Insurer any and all charges, fees, costs and expenses that the Insurer may reasonably pay or incur in connection with(i)the administration, enforcement, defense or preservation of any rights or security in any Related Document; (ii) the pursuit of any remedies under the Ordinance or any other Related Document or otherwise afforded by law or equity, (iii)any amendment,waiver or other action with respect to,or related to,the Ordinance or any other Related Document whether or not executed or completed, or (iv) any litigation or other dispute in connection with the Ordinance or any other Related Document or the transactions contemplated thereby, other than costs resulting from the failure of the Insurer to honor its obligations under the Insurance Policy. The Insurer reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of the Ordinance or any other Related Document. After payment of reasonable expenses of the Paying Agent, the application of funds realized upon default shall be applied to the payment of expenses of the Issuer or rebate only after the payment of past due and current debt service on the Certificates and amounts required to restore the Debt Service Reserve Fund to the Debt Service Reserve Requirement. The Insurer shall be entitled to pay principal or interest on the Certificates that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer (as such terms are defined in the Insurance Policy) and any amounts due on the Certificates as a result of acceleration of the maturity thereof in accordance with the Ordinance,whether or not the Insurer has received a Notice of Nonpayment(as such terms are defined in the Insurance Policy) or a claim upon the Insurance Policy. The notice address of the Insurer is: Build America Mutual Assurance Company, 200 Liberty Street, New York, New York 10281, Attention: Claims, Re: Policy No. 2026B0931; Telephone: (212) 235-2500; Telecopier: (212) 962-1524. In each case in which notice or other communication refers to an Event of Default, then a copy of such notice or other communication shall also be sent to the attention of the General Counsel and shall be marked to indicate "URGENT MATERIAL ENCLOSED." (k) The Insurer shall be provided with the following information by the Issuer or Paying Agent, as the case may be: (i) Annual audited financial statements within 180 days(or such longer period agreed to by BAM) after the end of the Issuer's fiscal year (together with a certification of the Issuer that it is not aware of any default or Event of Default under the Ordinance), and the Issuer's annual budget within 30 days after the approval thereof together with such other information,data or reports as the Insurer shall reasonably request from time to time; (ii) Notice of any draw upon the Debt Service Reserve Fund within two Business Days after knowledge thereof other than (i) withdrawals of amounts in #544404033_v2 excess of the Debt Service Reserve Requirement and(ii)withdrawals in connection with a refunding of Certificates; (iii) Notice of any default known to the Paying Agent or Issuer within five Business Days after knowledge thereof; (iv) Prior notice of the advance refunding or redemption of any of the Certificates, including the principal amount, maturities and CUSIP numbers thereof; (v) Notice of the resignation or removal of the Paying Agent and Registrar and the appointment of, and acceptance of duties by, any successor thereto; (vi) Notice of the commencement of any proceeding by or against the Issuer or Obligor commenced under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency Proceeding"); (vii) Notice of the making of any claim in connection with any Insolvency Proceeding seeking the avoidance as a preferential transfer of any payment of principal of, or interest on,the Certificates; (viii) A full original transcript of all proceedings relating to the execution of any amendment, supplement, or waiver to the Related Documents; and (ix) All reports, notices and correspondence to be delivered to Bondholders under the terms of the Related Documents. In addition,to the extent that the Issuer has entered into a continuing disclosure agreement, covenant or undertaking with respect to the Certificates,all information furnished pursuant to such agreements shall also be provided to the Insurer, simultaneously with the furnishing of such information. (I) The Insurer shall have the right to receive such additional information as it may reasonably request. The Issuer will permit the Insurer to discuss the affairs, finances and accounts of the Issuer or any information the Insurer may reasonably request regarding the security for the Certificates with appropriate officers of the Issuer and will use commercially reasonable efforts to enable the Insurer to have access to the facilities,books and records of the Issuer on any business day upon reasonable prior notice. The Issuer shall notify the Insurer of any failure of the Issuer to provide notices,certificates and other information under the transaction documents.Notwithstanding satisfaction of the other conditions to the issuance of Additional Bonds set forth in the Ordinance, no such issuance may occur(1) if an Event of Default(or any event which,once all notice or grace periods have passed,would constitute an Event of Default) exists unless such default shall be cured upon such issuance and(2)unless the Debt Service Reserve Fund is fully funded at the Debt Service Reserve Requirement(including the proposed issue)upon the issuance of such Additional Bonds, in either case unless otherwise permitted by the Insurer. In #544404033_v2 determining whether any amendment, consent, waiver or other action to be taken, or any failure to take action, under the Ordinance would adversely affect the security for the Certificates or the rights of the Bondholders, the Paying Agent shall consider the effect of any such amendment, consent, waiver, action or inaction as if there were no Insurance Policy. No contract shall be entered into or any action taken by which the rights of the Insurer or security for or sources of payment of the Certificates may be impaired or prejudiced in any material respect except upon obtaining the prior written consent of the Insurer. If the Certificates are issued for refunding purposes, there shall be delivered an opinion of Bond Counsel addressed to the Insurer (or a reliance letter relating thereto), or a certificate of discharge of the Paying Agent for the Refunded Obligations, to the effect that, upon the making of the required deposit to the escrow, the legal defeasance of the Refunded Obligations shall have occurred. If the Refunded Obligations are insured by Build America Mutual Assurance Company, at least three business days prior to the proposed date for delivery of the Policy with respect to the Refunding Certificates, the Insurer shall also receive (i) the verification letter, of which the Insurer shall be an addressee,by an independent firm of certified public accountants which is either nationally recognized or otherwise acceptable to the Insurer, of the adequacy of the escrow established to provide for the payment of the Refunded Obligations in accordance with the terms and provisions of the Escrow Deposit Agreement, and(ii)the form of an opinion of Bond Counsel addressed to the Insurer (or a reliance letter relating thereto) to the effect that the Escrow Deposit Agreement is a valid and binding obligation of the parties thereto, enforceable in accordance with its terms (such Escrow Deposit Agreement shall provide that no amendments are permitted without the prior written consent of the Insurer). An executed copy of each of such opinion and reliance letter, if applicable, or Paying Agent's discharge certificate,as the case may be, shall be forwarded to the Insurer prior to delivery of the Certificates.Any interest rate exchange agreement("Swap Agreement")entered into by the Issuer shall meet the following conditions: (i)the Swap Agreement must be entered into to manage interest costs related to, or a hedge against (a) assets then held, or (b) debt then outstanding, or(iii)debt reasonably expected to be issued within the next twelve(12) months, and(ii) the Swap Agreement shall not contain any leverage element or multiplier component greater than 1.0x unless there is a matching hedge arrangement which effectively off-sets the exposure from any such element or component. Unless otherwise consented to in writing by the Insurer, any uninsured net settlement, breakage or other termination amount then in effect shall be subordinate to debt service on the Certificates and on any debt on parity with the Certificates. The Issuer shall not terminate a Swap Agreement unless it demonstrates to the satisfaction of the Insurer prior to the payment of any such termination amount that such payment will not cause the Issuer to be in default under the Related Documents, including but not limited to, any monetary obligations thereunder. All counterparties or guarantors to any Swap Agreement must have a rating of at least "A-" and "A3" by Standard & Poor's (`S&P") and Moody's Investors Service ("Moody's"). If the counterparty or guarantor's rating falls below "A-" or "A3" by either S&P or Moody's,the counterparty or guarantor shall execute a credit support annex to the Swap Agreement, which credit support annex shall be acceptable to the Insurer. If the counterparty or the guarantor's long term unsecured rating falls below"Baal" or"BBB+" by either Moody's or S&P, a replacement counterparty or guarantor, acceptable to the #544404033_v2 Insurer, shall be required. Any consent, approval or permit required herein by the Insurer shall not be unreasonably withheld. ARTICLE XV. MISCELLANEOUS Section 15.01 Changes to Ordinance. Bond Counsel is hereby authorized to make any changes to the terms of this Ordinance if necessary or desirable to carry out the purposes hereof or in connection with the approval of the issuance of the Certificates by the Attorney General of Texas. Section 15.02 Partial Invalidity. If any section,paragraph, clause or provision of this Ordinance shall for any reason be held to be invalid or unenforceable,the invalidity or unenforceability of such section,paragraph,clause or provision shall not affect any of the remaining provisions of this Ordinance. Section 15.03 Repealer. All ordinances or resolutions, or parts thereof, heretofore adopted by the City and inconsistent with the provisions of this Ordinance are hereby repealed to the extent of such conflict. Section 15.04 Individuals Not Liable. No covenant, stipulation, obligation or agreement herein contained shall be deemed to be a covenant, stipulation, obligation or agreement of any member of City Council or agent or employee of City Council or of the City in his or her individual capacity and neither the members of City Council nor any officer thereof, nor any agent or employee of City Council or of the City, shall be liable personally on the Certificates,or be subject to any personal liability or accountability by reason of the issuance thereof Section 15.05 Related Matters. To satisfy in a timely manner all of the City's obligations under this Ordinance,the Mayor or Mayor Pro Tern, the City Secretary and all other appropriate officers and agents of the City are hereby authorized and directed to do any and all things necessary and/or convenient in order to consummate the delivery of the Certificates, pay the costs of issuance on the Certificates, and effectuate the terms and purposes of this Ordinance. Section 15.06 Force and Effect. This Ordinance shall be in full force and effect from and after its final passage. and it is so ordained. #544404033_v2 READ, ADOPTED, AND APPROVED, this 22nd day of September, 2026, A.D., at a Regular Meeting of the City Council of the City of Port Arthur, Texas by the following vote: AYES: Mayor: Councilmembers: , , NOES: • Charlotte M. Moses, Mayor ATTEST: Christe Whitley Ned, City Secretary Signature Page to Certified Ordinance #544404033_v2 APPROVED AS TO FORM: Roxann Cotroneo, City Attorney APPROVED FOR ADMINISTRATION: Ronald Burton, CPM, City Manager Lynda Boswell, Director of Finance Signature Page to Certified Ordinance #544404033_v2 EXHIBIT A Paying Agent/Registrar Agreement See Tab 5 A-1 #544404033_v2 P.O. No. 7451 9/22/26 updated dm/lb EXHIBIT B DESCRIPTION OF ANNUAL DISCLOSURE OF FINANCIAL INFORMATION The following information is referred to in Article XIII of this Ordinance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Article are as specified (and included in the Appendix or other headings of the Official Statement referred to)below: 1. The portions of the financial statements of the City appended to the Official Statement as Appendix B,but for the most recently concluded Fiscal Year. 2. The quantitative financial information and operating data with respect to the City of the general type included in the main text of the Official Statement is numbered Tables 1 through 6 and 8 through 16, both inclusive. Accounting Principles The accounting principles referred to in such Article are the accounting principles described in the notes to the financial statements referred to in Paragraph 1 above, as such principles may be changed from time to time to comply with State law.