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O720 Texas General Obligation Refunding Bond Series 2020ACERTIFICATE FOR ORDINANCE THE STATE OF TEXAS § COUNTY OF TARRANT § CITY OF KENNEDALE § I, the undersigned City Secretary of the CITY OF KENNEDALE, TEXAS (the "City"), hereby certify as follows: 1. The City Council of the City (the "City Council") convened in Regular Meeting on December 15, 2020 by video teleconference as authorized by the Governor of the State of Texas (the "Meeting"), and the roll was called of the duly constituted officers and members of the City Council, to wit: Brian Johnson, Mayor Josh Altom, Councilmember Place 1 Gary Mitchell, Councilmember, Place 2 Sandra Lee, Councilmember, Place 3 Linda Rhodes, Councilmember, Place 4 Chad Wandel, Councilmember, Place 5 and Mayor Pro-Tem and all of the officers and members of the City Council were present, except the following absentees: NONE . Whereupon, among other business, the following was transacted at the Meeting: a written ORDINANCE NO. 720 ORDINANCE AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF $1,540,000 IN AGGREGATE PRINCIPAL AMOUNT OF CITY OF KENNEDALE, TEXAS GENERAL OBLIGATION REFUNDING BOND, SERIES 2020A; SECURING THE PAYMENT THEREOF BY AUTHORIZING THE LEVY OF AN ANNUAL AD VALOREM TAX; AND APPROVING AND AUTHORIZING THE EXECUTION OF ALL INSTRUMENTS AND PROCEDURES RELATED THERETO INCLUDING AN ESCROW AGREEMENT, A PAYING AGENT/REGISTRAR AGREEMENT AND A PURCHASE CONTRACT AND INVESTMENT LETTER (the "Ordinance") was duly introduced for the consideration of the City Council. It was then duly moved and seconded that the Ordinance be passed and, after due discussion, said motion carrying with it the adoption of the Ordinance, prevailed and carried by the following vote: AYES: 6 NOES: 0 ABSTENTIONS: 0 2. A true, full and correct copy of the Ordinance adopted at the Meeting described in the above and foregoing paragraph is attached to and follows this Certificate; the Ordinance has been duly recorded in the City Council's minutes of the Meeting; the above and foregoing paragraph is a true, full and correct excerpt from the City Council's minutes of the Meeting pertaining to the passage of the Ordinance; the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of the City Council as indicated therein; each of the officers and members of the City Council was duly and sufficiently notified officially and personally, in advance, of the time, place and purpose of the Meeting, and that the Ordinance would be introduced and considered for passage at the Meeting, and each of said officers and members consented, in advance, to the holding of the Meeting for such purpose, and that the Meeting was open to the public and public notice of the time, place and purpose of the Meeting was given, all as required by Chapter 551, Texas Government Code. ORDINANCE NO. 720 ORDINANCE AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF $1,540,000 IN AGGREGATE PRINCIPAL AMOUNT OF CITY OF KENNEDALE, TEXAS GENERAL OBLIGATION REFUNDING BOND, SERIES 2020A; SECURING THE PAYMENT THEREOF BY AUTHORIZING THE LEVY OF AN ANNUAL AD VALOREM TAX; AND APPROVING AND AUTHORIZING THE EXECUTION OF ALL INSTRUMENTS AND PROCEDURES RELATED THERETO INCLUDING AN ESCROW AGREEMENT, A PAYING AGENT/REGISTRAR AGREEMENT AND A PURCHASE CONTRACT AND INVESTMENT LETTER DATE OF APPROVAL: DECEMBER 15, 2020 -i- TABLE OF CONTENTS Recitals ............................................................. 1 Section 1. Amount and Purpose of the Bond .................................. 3 Section 2. Designation ................................................... 3 Section 3. Date, Denominations, Numbers, Maturity, and Installment Payments of the Bond.................................................... 4 Section 4. Interest ....................................................... 4 Section 5. Characteristics of the Bond ....................................... 5 Section 6. Form of Bond.................................................. 7 Section 7. Interest and Sinking Fund; Tax Levy; Security Interest ................. 13 Section 8. Investments ................................................... 13 Section 9. Defeasance of Bond............................................. 14 Section 10. Damaged, Mutilated, Lost, Stolen, or Destroyed Bond .................. 15 Section 11. Custody, Approval, and Registration of Bond; Bond Counsel’s Opinion; Cusip Numbers; and CUSIP Numbers............................... 16 Section 12. Covenants Regarding Tax Exemption of Interest on the Bond............ 16 Section 13. Sale of Bond................................................... 19 Section 14. Approval of Escrow Agreement; Refunding of Refunded Obligations ...... 19 Section 15. Notice of Defeasance and Redemption of Refunded Obligations .......... 20 Section 16. Further Procedures.............................................. 20 Section 17. Ordinance a Contract; Amendments ................................ 20 Section 18. Remedies in Event of Default ..................................... 22 Section 19. No Rule 15c2-12 Undertaking; Annual Financial Statements ............. 22 -ii- Section 20. Interested Parties ............................................... 22 Section 21. Incorporation of Recitals ......................................... 22 Section 22. Choice of Law ................................................. 23 Section 23. Effective Date ................................................. 23 SIGNATURES Exhibit A Form of Paying Agent/Registrar Agreement Exhibit B Written Procedures Relating to Continuing Compliance with Federal Tax Covenants Exhibit C Form of Escrow Agreement Exhibit D Form of Notice of Redemption Exhibit E Form of Purchase Contract and Investment Letter ORDINANCE NO. 720 ORDINANCE AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF $1,540,000 IN AGGREGATE PRINCIPAL AMOUNT OF CITY OF KENNEDALE, TEXAS GENERAL OBLIGATION REFUNDING BOND, SERIES 2020A; SECURING THE PAYMENT THEREOF BY AUTHORIZING THE LEVY OF AN ANNUAL AD VALOREM TAX; AND APPROVING AND AUTHORIZING THE EXECUTION OF ALL INSTRUMENTS AND PROCEDURES RELATED THERETO INCLUDING AN ESCROW AGREEMENT, A PAYING AGENT/REGISTRAR AGREEMENT AND A PURCHASE CONTRACT AND INVESTMENT LETTER THE STATE OF TEXAS § COUNTY OF TARRANT § CITY OF KENNEDALE § WHEREAS, the CITY OF KENNEDALE, TEXAS (the "City") in Tarrant County, Texas, is a political subdivision of the State of Texas operating as a home-rule city pursuant to the Texas Local Government Code and its City Charter, which was originally approved by the qualified voters of the City on January 17, 1998, and which was most recently amended by the qualified voters of the City on May 4, 2019; and WHEREAS, among numerous series of bonds and certificates of obligation of the City which are secured by the full faith and credit of the City and a pledge by the City to levy ad valorem taxes sufficient to pay principal of and interest on such bonds or certificates of obligations as they become due, there are specifically outstanding the City of Kennedale, Texas Combination Tax and Revenue Certificates of Obligation, Series 2011, dated June 1, 2011, maturing on February 1 in each of the years 2021, 2023, 2025, 2027, 2029 and 2031, and currently outstanding in the aggregate principal amount of $1,635,000 (the "Series 2011 Certificates"); and WHEREAS, the City now desires to refund all of the outstanding Series 2011 Certificates which mature on and after February 1, 2023, which are referred to herein as the "Refunded Obligations" and are more specifically described as maturing in the years and in the respective principal amounts (aggregating $1,515,000 in principal amount) and bearing interest as shown in the following table: [The remainder of this page intentionally left blank] -2- SERIES 2011 CERTIFICATES TO BE REFUNDED MATURITY (FEB. 1 ) PRINCIPAL AMOUNT MATURING IN YEAR ($) PRINCIPAL AMOUNT REFUNDED ($) STATED INTEREST RATE (%) CUSIP NO. 489332 2023 255,000 255,000 4.000 HF6 *** *** *** *** *** 2025 275,000 275,000 4.000 HG4 *** *** *** *** *** 2027 305,000 305,000 4.000 HH2 *** *** *** *** *** 2029 325,000 325,000 4.000 HJ8 *** *** *** *** *** 2031 355,000 355,000 4.000 HK5 Totals 1,515,000 1,515,000 WHEREAS, all of the Refunded Obligations mature or are subject to redemption prior to maturity within 20 years of the date of the bond hereinafter authorized; in particular, the Refunded Obligations and the ordinance which authorized the issuance of the Refunded Obligations provide that the Series 2011 Certificates maturing on and after February 1, 2023 may be called at the option of the City on February 1, 2021, or any date thereafter, at par; and WHEREAS, Chapter 1207, Texas Government Code, as amended ("Chapter 1207"), authorizes the Issuer to issue refunding bonds and to deposit the proceeds from the sale thereof, and any other available funds or resources, directly with a place of payment (paying agent) for the Refunded Obligations, or with another trust company or commercial bank that does not act as a depository for the City, in an amount sufficient to provide for the payment and/or redemption of the Refunded Obligations, and such deposit, if made before such payment dates, shall constitute the making of firm banking and financial arrangements for the discharge and final payment or redemption of the Refunded Obligations; and WHEREAS, Chapter 1207 (specifically Section 1207.062, Texas Government Code) further authorizes the City to enter into an escrow agreement with (i) any paying agent for the Refunded Obligations, or (ii) another trust company or commercial bank that does not act as a depository for the Board and is named in the proceedings authorizing such escrow agreement, with respect to the safekeeping, investment, reinvestment, administration and disposition of any such deposit, upon such terms and conditions as the City and such paying agent, trust company or commercial bank may agree; provided that such deposits may be invested and reinvested in: (i) direct noncallable obligations of the United States, including obligations that are unconditionally guaranteed by the United States, -3- (ii) noncallable obligations of an agency or instrumentality of the United States, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the City Council of the City adopts or approves this Ordinance, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, and (iii) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that, on the date the City Council of the Issuer adopts or approves this Order, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, and all of which must mature and bear interest payable at such times and in such amounts as will be sufficient to provide for the scheduled payment or redemption of the Refunded Obligations; and WHEREAS, BOKF, NA currently serves as the paying agent for the Series 2011 Certificates, and the Escrow Agreement hereinafter authorized between the City and BOKF, NA constitutes an escrow agreement of the kind authorized and permitted by Chapter 1207; and WHEREAS, the City Council of the City hereby finds and declares a public purpose and deems it advisable and in the best interests of the City to issue a bond (defined in Section 3 hereof as the "Bond"), the proceeds of which will be used to pay costs of issuance and refund the Refunded Obligations in order to achieve a gross debt service savings and a net present value debt service savings for the benefit of the taxpayers of the City; and WHEREAS, such refunding of the Refunded Obligations will result in a gross debt service savings of $202,364.00 and a net present value debt service savings of $188,552.61 (i.e., 12,445717% of the principal amount of the Refunded Obligations) after taking into account a contribution from the City in the amount of $49,588.14; and WHEREAS, the Bond hereinafter authorized and designated is to be issued and delivered pursuant to Chapter 1207 and Chapter 1201, Texas Government Code; and WHEREAS, it is hereby officially found and determined that the meeting at which this Ordinance was passed was open to the public, and public notice of the time, place, and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code; THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF KENNEDALE, TEXAS: SECTION 1. AMOUNT AND PURPOSE OF THE BOND. The City's general obligation refunding bond (hereinafter sometimes called the "Bond") is hereby authorized to be issued in the aggregate principal amount of $1,540,000 FOR THE PURPOSE OF PROVIDING FUNDS TO REFUND A PORTION OF THE CITY’S GENERAL OBLIGATION INDEBTEDNESS AND PAY COSTS OF ISSUANCE. SECTION 2. DESIGNATION. The Bond authorized to be issued by this Ordinance shall be designated the CITY OF KENNEDALE, TEXAS GENERAL OBLIGATION REFUNDING BOND, SERIES 2020A. -4- SECTION 3. DATE, DENOMINATIONS, NUMBERS, MATURITY, AND INSTALLMENT PAYMENTS OF THE BOND. (a) Initially there shall be issued, sold, and delivered hereunder one fully registered Bond, without interest coupons, dated December 15, 2020, in the denomination and principal amount of $1,540,000, numbered R-1, with any bond issued in replacement thereof being in the denomination and principal amount hereinafter stated and numbered consecutively from R-2 upward, payable in installments to the registered owner thereof, or to the registered assignee of said bond (in each case, the "Registered Owner"). (b) Principal of the Bond shall mature and be payable in installments on the dates and in the principal installment amounts and shall bear interest at the per annum rate set forth in the following schedule: Payment Date (February 1) Principal Installment Amount ($) Interest Rate (%) 2022 145,000 1.220 2023 145,000 1.220 2024 150,000 1.220 2025 150,000 1.220 2026 155,000 1.220 2027 155,000 1.220 2028 155,000 1.220 2029 155,000 1.220 2030 165,000 1.220 2031 165,000 1.220 Total 1,540,000 *** The term "Bond" as used in this Ordinance shall mean and include collectively the bond initially issued and delivered pursuant to this Ordinance, as well as all other substitute bonds and replacement bonds issued pursuant hereto. SECTION 4. INTEREST. The Bond shall bear interest from the dates specified in the FORM OF BOND set forth in this Ordinance to date of maturity or prior redemption at the rate per annum set forth above. Said interest shall be payable in the manner provided and on the dates stated in the FORM OF BOND set forth in this Ordinance. -5- SECTION 5. CHARACTERISTICS OF THE BOND. (a) Registration and Transfer; Authentication. The City shall keep or cause to be kept at the designated corporate trust or commercial banking office (currently located in Sulfur Springs, Texas) of ALLIANCE BANK (the "Paying Agent/Registrar"), books or records for the registration of the transfer of the Bond (the "Registration Books"), and the City hereby appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and make such registrations of transfers under such reasonable regulations as the City and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such registrations and transfers as herein provided within three days of presentation in due and proper form. Attached hereto as Exhibit A is a copy of the Paying Agent/Registrar Agreement between the City and the Paying Agent/Registrar which is hereby approved in substantially final form, and the Mayor or Mayor Pro-Tem and the City Secretary of the City are hereby authorized to execute the Paying Agent/Registrar Agreement and approve any changes in the final form thereof. The Paying Agent/Registrar shall obtain and record in the Registration Books the address of the Registered Owner of each Bond to which payments with respect to the Bond shall be mailed, as herein provided; but it shall be the duty of the Registered Owner to notify the Paying Agent/Registrar in writing of the address to which payments shall be mailed, and such interest payments shall not be mailed unless such notice has been given. The City shall have the right to inspect the Registration Books during regular business hours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required by law, shall not permit their inspection by any other entity. The City shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such registration, transfer and delivery of a substitute Bond or Bond. Registration of assignment and transfer of a Bond shall be made in the manner provided and with the effect stated in the FORM OF BOND set forth in this Ordinance. Each substitute Bond shall bear a letter and/or number to distinguish it from each other Bond. Except as provided in Section 5(c) hereof, an authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Bond, date and manually sign said Bond, and no such Bond shall be deemed to be issued or outstanding unless such Bond is so executed. The Paying Agent/Registrar promptly shall cancel the paid Bond or a Bond surrendered for transfer. No additional ordinances, orders or resolutions need be passed or adopted by the governing body of the City or any other body or person so as to accomplish the foregoing, and the Paying Agent/Registrar shall provide for the printing, execution and delivery of the substitute Bond in the manner prescribed herein. Pursuant to Subchapter D, Chapter 1201, Texas Government Code, the duty of transfer of the Bond as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of said Bond, the transferred Bond shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Bond which initially was issued and delivered pursuant to this Ordinance, approved by the Attorney General, and registered by the Comptroller of Public Accounts. -6- (b) Payment of Bond and Interest. The City hereby further appoints the Paying Agent/Registrar to act as the paying agent for paying the principal of and interest on the Bond, all as provided in this Ordinance. The Paying Agent/Registrar shall keep proper records of all payments made by the City and the Paying Agent/Registrar with respect to the Bond, and of all transfers of the Bond, and all replacements of the Bond, as provided in this Ordinance. However, in the event of a nonpayment of interest on a scheduled 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 (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States mail, first-class postage prepaid, to the address of the Registered Owner appearing on the Registration Books at the close of business on the last business day next preceding the date of mailing of such notice. (c) In General. The Bond (i) shall be issued in fully registered form, without interest coupons, with the principal of and interest on such Bond to be payable only to the Registered Owner thereof, (ii) may be redeemed prior to the scheduled principal installment dates (notice of which shall be given to the Paying Agent/Registrar by the City at least 35 days prior to any such redemption date), (iii) may be transferred and assigned, (iv) shall have the characteristics, (v) shall be signed, sealed, executed and authenticated, (vi) the principal of and interest on the Bond shall be payable, and (vii) shall be administered, and the Paying Agent/Registrar and the City shall have certain duties and responsibilities with respect to the Bond, all as provided, and in the manner and to the effect as required or indicated, in the FORM OF BOND set forth in this Ordinance. The Bond initially issued and delivered pursuant to this Ordinance is not required to be, and shall not be, authenticated by the Paying Agent/Registrar, but on each substitute Bond issued in transfer or replacement for any Bond issued under this Ordinance the Paying Agent/Registrar shall execute the PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE, in the form set forth in the FORM OF BOND. (d) Substitute Paying Agent/Registrar. The City covenants with the registered Owner of the Bond that at all times while the Bond is outstanding the City will provide a competent and legally qualified bank, trust company, financial institution or other agency to act as and perform the services of Paying Agent/Registrar for the Bond under this Ordinance, and that the Paying Agent/Registrar will be one entity. The City reserves the right to, and may, at its option, but only with the prior written consent of the Registered Owner, change the Paying Agent/Registrar upon not less than 40 days written notice to the Paying Agent/Registrar, to be effective not later than 30 days prior to the next principal or interest payment date after such notice. In the event that the entity at any time acting as Paying Agent/Registrar (or its successor by merger, acquisition, or other method) should resign or otherwise cease to act as such, the City covenants that promptly it will appoint, but only upon the prior written consent of the Registered Owner, a competent and legally qualified bank, trust company, financial institution, or other agency to act as Paying Agent/Registrar under this Ordinance. Upon any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shall transfer and deliver the Registration Books (or a copy thereof), along with all other pertinent books and records relating to the Bond, to the new Paying Agent/Registrar designated and -7- appointed by the City. Upon any change in the Paying Agent/Registrar, the City promptly will cause a written notice thereof to be sent by the new Paying Agent/Registrar to the Registered Owner of the Bond, by United States mail, first-class postage prepaid, which notice also shall give the address of the new Paying Agent/Registrar. By accepting the position and performing as such, each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this Ordinance, and a certified copy of this Ordinance shall be delivered to the Paying Agent/Registrar. (e) On the closing date, one Initial Bond representing the entire principal amount of the Bond, payable in stated installments to the Purchaser, executed by manual or facsimile signature of the Mayor or Mayor Pro-Tem of the City and the City Secretary of the City, approved by the Attorney General of Texas, and registered and manually signed by the Comptroller of Public Accounts of the State of Texas, will be delivered to the Purchaser or its designee. The Paying Agent/Registrar shall insert the date of delivery and deliver the Bond to the Purchaser. SECTION 6. FORM OF BOND. The form of the Bond, including the form of Paying Agent/Registrar's Authentication Certificate, the form of Assignment and the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be attached to the Bond initially issued and delivered pursuant to this Ordinance, shall be, respectively, substantially as follows, with such appropriate variations, omissions, or insertions as are permitted or required by this Ordinance. [The remainder of this page intentionally left blank] -8- (a) Form of Bond. NO. R-1 UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF TARRANT PRINCIPAL AMOUNT $1,540,000 CITY OF KENNEDALE, TEXAS GENERAL OBLIGATION REFUNDING BOND, SERIES 2020A Interest Rate Delivery Date Maturity Date As shown below December 30, 2020 As shown below REGISTERED OWNER: ALLIANCE BANK PRINCIPAL AMOUNT: ONE MILLION FIVE HUNDRED FORTY THOUSAND DOLLARS THE CITY OF KENNEDALE, TEXAS (the "City"), being a political subdivision and home rule municipality of the State of Texas located in Tarrant County, Texas, for value received, hereby promises to pay, from the sources described herein, to the registered owner specified above, or registered assign (the "Registered Owner"), the principal amount from time to time unpaid and to pay interest thereon from the date of delivery of this Bond as specified above at the rate per annum set forth in the table below, calculated on the basis of a 360-day year of twelve 30-day months. The principal of this Bond shall mature and be paid in installments on the dates and in the amounts set forth in the table below: Payment Date (February 1) Principal Installment Amount ($) Interest Rate (%) 2022 145,000 1.220 2023 145,000 1.220 2024 150,000 1.220 2025 150,000 1.220 2026 155,000 1.220 2027 155,000 1.220 2028 155,000 1.220 2029 155,000 1.220 2030 165,000 1.220 2031 165,000 1.220 Total 1,540,000 *** -9- THE PRINCIPAL OF AND INTEREST ON THIS BOND are payable in lawful money of the United States of America, without exchange or collection charges. The City shall pay interest on the unpaid principal installments of this Bond on August 1, 2021, and on each February 1 and August 1 thereafter to the date of maturity thereof. The last principal installment of this Bond shall be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity at the designated corporate trust or commercial banking office of ALLIANCE BANK (currently located in Sulphur Springs, Texas), which is the "Paying Agent/Registrar" for this Bond. The payment of all other principal installments of and interest on this Bond shall be made by the Paying Agent/Registrar to the Registered Owner hereof on each principal and interest payment date by check or draft, dated as of such principal and interest payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the City required by the ordinance authorizing the issuance of this Bond (the "Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check or draft shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest payment date, to the Registered Owner hereof, at its address as it appeared on the fifteenth (15th) day of the month next preceding each such date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. In addition, principal and interest may be paid by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Registered Owner. THE CITY COVENANTS WITH THE REGISTERED OWNER of this Bond that on or before each principal payment date and interest payment date for this Bond it will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on the Bond, when due. IF THE DATE FOR THE PAYMENT of the principal of or interest on this Bond shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the designated corporate trust or commercial banking office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. THIS BOND IS DATED AS OF DECEMBER 15, 2020, and is authorized and issued pursuant to and in compliance with the Constitution and laws of the State of Texas in the original aggregate principal amount of $1,540,000 FOR THE PURPOSE OF PROVIDING FUNDS TO REFUND A PORTION OF THE CITY’S GENERAL OBLIGATION INDEBTEDNESS AND PAY COSTS OF ISSUANCE. THE UNPAID PRINCIPAL INSTALLMENTS OF THIS BOND MAY BE REDEEMED prior to their scheduled due date, at the option of the City, with funds derived from any available and lawful source, as a whole, or in part (provided that a portion of an installment payment may be redeemed only in an integral multiple of $5,000), at the redemption price of the principal amount of the principal installments called for redemption, plus accrued interest thereon to the date fixed -10- for redemption. The City shall determine the principal installment payment dates, and the principal amount within each payment date, to be redeemed. AT LEAST 30 DAYS PRIOR to the date fixed for any redemption of the principal installments of this Bond or portions thereof prior to a scheduled due date, a written notice of such redemption shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, at least 30 days prior to the date fixed for any such redemption to the Registered Owner of this Bond at its address as it appeared on the Registration Books maintained by the Paying Agent/Registrar on the day such notice of redemption is mailed. Any notice of redemption so mailed shall be conclusively presumed to have been duly given irrespective of whether received by the Registered Owner. The notice may state (1) that it is conditioned upon the deposit of moneys, in an amount equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar no later than the redemption date, or (2) 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 an authorized representative to the Paying Agent/Registrar instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and optional redemption shall be of no effect if such moneys are not so deposited or if the notice is so rescinded. By the date fixed for any such redemption, due provision shall be made with the Paying Agent/Registrar for the payment of the required redemption price for the applicable principal installment payments of this Bond or portions thereof which are to be so redeemed. If such written notice of redemption is mailed (and not rescinded), and if due provision for such payment is made, all as provided above, the principal installment payments, or portions thereof, which are to be so redeemed thereby automatically shall be treated as redeemed prior to their scheduled due dates, and they shall not bear interest after the date fixed for redemption, and they shall not be regarded as being outstanding except for the right of the Registered Owner to receive the redemption price from the Paying Agent/Registrar out of the funds provided for such payment. UPON THE PAYMENT OF ANY OUTSTANDING principal balance of this Bond, whether on a scheduled due date or upon optional redemption, the Paying Agent/Registrar shall note in the Bond Registration Books the amount of such payment, the date said payment was made and the remaining unpaid principal balance of this Bond. THIS BOND IS ISSUED AS A FULLY REGISTERED BOND, without interest coupons, in the denomination of the principal amount thereof. As provided in the Ordinance, this Bond may, at the request of the Registered Owner or the assignee hereof, be assigned or transferred for a like aggregate principal amount of a fully registered Bond in the denomination of the principal amount hereof, without interest coupons, payable to the Registered Owner or assignees as the case may be, having the same denomination, upon surrender of this Bond to the Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth in the Ordinance. Among other requirements for such assignment and transfer, this Bond must be presented and surrendered to the Paying Agent/Registrar, together with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this Bond. The form of Assignment printed or endorsed on this Bond may be executed by the Registered Owner to evidence the assignment hereof, but such method is not exclusive, and other instruments of assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of this Bond by the Registered Owner. The Paying Agent/Registrar's reasonable standard or customary fees and charges for assigning, transferring or exchanging any Bond will be paid by the -11- City. In any circumstance, any taxes or governmental charges required to be paid with respect thereto shall be paid by the one requesting such assignment or transfer, as a condition precedent to the exercise of such privilege. The Paying Agent/Registrar shall not be required to make any such transfer during the period commencing with the close of business on any Record Date and ending with the opening of business on the next following principal or interest payment date. IN THE EVENT ANY PAYING AGENT/REGISTRAR FOR THE BOND IS CHANGED by the City, resigns, or otherwise ceases to act as such, the City has covenanted in the Ordinance that it promptly will appoint a competent and legally qualified substitute therefor, and cause written notice thereof to be mailed to the Registered Owner of the Bond. IT IS HEREBY CERTIFIED, RECITED, AND COVENANTED that this Bond has been duly and validly authorized, issued and delivered; that all acts, conditions and things required or proper to be performed, exist and be done precedent to or in the authorization, issuance and delivery of this Bond have been performed, existed and been done in accordance with law, and that this Bond does not exceed any constitutional or statutory limitation; that this Bond is an obligation of the City; and that ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Bond, as such interest comes due, and as such principal matures, have been levied and ordered to be levied against all taxable property in the City, and have been pledged for such payment, within the limits prescribed by law, all as provided in the Ordinance authorizing the Bond. THE CITY HAS RESERVED THE RIGHT to amend the Ordinance as provided therein, and under some (but not all) circumstances amendments thereto must be approved by the Registered Owner of the Bond. BY BECOMING THE REGISTERED OWNER OF THIS BOND, the Registered Owner thereby acknowledges all of the terms and provisions of the Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Ordinance is duly recorded and available for inspection in the official minutes and records of the governing body of the City, and agrees that the terms and provisions of this Bond and the Ordinance constitute a contract between the Registered Owner hereof and the City. IN WITNESS WHEREOF, the City has caused this Bond to be signed with the manual or facsimile signature of the Mayor or Mayor Pro-Tem of the City and countersigned with the manual or facsimile signature of the City Secretary of the City, and has caused the official seal of the City to be duly impressed, or placed in facsimile, on this Bond. (signature) (signature) City Secretary Mayor (Pro-Tem) City of Kennedale, Texas City of Kennedale, Texas (SEAL) -12- (b) Form of Paying Agent/Registrar's Authentication Certificate. PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE (To be executed if this Bond is not accompanied by an executed Registration Certificate of the Comptroller of Public Accounts of the State of Texas) It is hereby certified that this Bond has been issued under the provisions of the Ordinance described in the text of this Bond; and that this Bond has been issued in replacement of, or transferred for, a Bond of a Series which originally was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. Dated: ALLIANCE BANK_______________________ Paying Agent/Registrar By: ___________________________ Authorized Representative [The remainder of this page intentionally left blank] -13- (d) Form of Assignment. ASSIGNMENT (Please print or type clearly) For value received, the undersigned hereby sells, assigns and transfers unto: Transferee's Social Security or Taxpayer Identification Number: Transferee's name and address, including zip code: the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints , attorney, to register the transfer of the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: . Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by an eligible guarantor institution participating in a securities transfer association recognized signature guarantee program. NOTICE: The signature above must correspond with the name of the Registered Owner as it appears upon the front of this Bond in every particular, without alteration or enlargement or any change whatsoever. (e) Form of Registration Certificate of the Comptroller of Public Accounts: COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this Bond has been examined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller of Public Accounts of the State of Texas. Witness my signature and seal this _______________________. ___________________________________ Comptroller of Public Accounts of the State of Texas (COMPTROLLER'S SEAL) -14- SECTION 7. INTEREST AND SINKING FUND; TAX LEVY; SECURITY INTEREST. (a) Interest and Sinking Fund; Tax Levy. A special "Interest and Sinking Fund" is hereby created and shall be established and maintained by the City at an official depository bank of the City. Said Interest and Sinking Fund shall be kept separate and apart from all other funds and accounts of the City, and shall be used only for paying the interest on and the principal of the Bond. Immediately after the issuance and delivery of the Bond, all accrued interest on the Bond, if any, together with any premium on the Bond that is not used by the City to pay costs of issuance in accordance with the provisions of Section 1201.042(d), Texas Government Code, as amended, shall be deposited to the credit of the Interest and Sinking Fund. In addition, all ad valorem taxes levied and collected for and on account of the Bond shall be deposited, as collected, to the credit of said Interest and Sinking Fund. For each fiscal year while the Bond or interest thereon is outstanding and unpaid, the governing body of the City shall compute and ascertain a rate and amount of ad valorem tax which will be sufficient to raise and produce the money required to pay the interest on the Bond as such interest comes due, and to provide and maintain a sinking fund adequate to pay the principal of the Bond as such principal matures (but never less than 2% of the original principal amount of the Bond as a sinking fund each year); and said tax shall be based on the latest approved tax rolls of the City, with full allowance being made for tax delinquencies and the cost of tax collection. Said rate and amount of ad valorem tax is hereby levied, and is hereby ordered to be levied, against all taxable property in the City for each year while the Bond or interest thereon is outstanding and unpaid; and said tax shall be assessed and collected each such year and deposited to the credit of the Interest and Sinking Fund created by this Ordinance. Said ad valorem taxes sufficient to provide for the payment of the interest on and principal of the Bond, as such interest comes due and such principal matures, are hereby pledged for such payment, within the limit prescribed by law. (b) Security Interest. Chapter 1208, Texas Government Code, applies to the issuance of the Bond and the pledge of the ad valorem taxes granted by the City under Section 7(a) of this Ordinance, and is therefore valid, effective, and perfected. If Texas law is amended at any time while the Bond is outstanding and unpaid such that the pledge of the ad valorem taxes granted by the City under Section 7(a) of this Ordinance is to be subject to the filing requirements of Chapter 9, Texas Business & Commerce Code, then in order to preserve to the registered owner of the Bond the perfection of the security interest in said pledge, the City agrees to take such measures as it determines are reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9, Texas Business & Commerce Code, and enable a filing to perfect the security interest in said pledge to occur. SECTION 8. INVESTMENTS. Funds on deposit in the Interest and Sinking Fund shall be secured by the depository bank of the City in the manner and to the extent required by law to secure other public funds of the City and may be invested from time to time in any investment authorized in the Public Funds Investment Act (Chapter 2256, Texas Government Code) and the City's investment policy adopted in accordance with the provisions of the Public Funds Investment Act at the direction of the City Manager or Director of Finance of the City; provided, however, that investments purchased for and held in the Interest and Sinking Fund shall have a final maturity no later than the next principal or interest payment date for which such funds are required. Income and -15- profits from such investments shall be deposited in the Interest and Sinking Fund. It is further provided, however, that any interest earnings on Bond proceeds which are required to be rebated to the United States of America pursuant to Section 13 hereof in order to prevent the Bond from being an arbitrage bond shall be so rebated and not considered as interest earnings for the purposes of this Section. SECTION 9. DEFEASANCE OF BOND. (a) The Bond and the interest thereon shall be deemed to be paid, retired and no longer outstanding (a "Defeased Bond") within the meaning of this Ordinance, except to the extent provided in subsection (d) of this Section, when payment of the principal of such Bond, plus interest thereon to the due date (whether such due date be by reason of maturity or otherwise) either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for on or before such due date by irrevocably depositing with or making available to the Paying Agent/Registrar in accordance with an escrow agreement or other instrument (the "Future Escrow Agreement") for such payment (1) lawful money of the United States of America sufficient to make such payment or (2) Defeasance Securities that mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money to provide for such payment (which sufficiency shall be verified by a certified public accountant or a firm of certified public accountants), and when proper arrangements have been made by the City with the Paying Agent/Registrar for the payment of its services until the Defeased Bond shall have become due and payable. At such time as the Bond shall be deemed to be a Defeased Bond hereunder, as aforesaid, the Bond and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the ad valorem maintenance taxes herein levied and pledged as provided in this Ordinance, and such principal and interest shall be payable solely from such money or Defeasance Securities. Notwithstanding the foregoing, in the event the funds on deposit in the Future Escrow Agreement are deficient for any reason to pay debt service on the Defeased Bond when due, the City shall remain obligated to pay such deficiency from lawfully available and/or appropriated funds. (b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the City be invested in Defeasance Securities, maturing in the amounts and times as hereinbefore set forth, and all income from such Defeasance Securities received by the Paying Agent/Registrar that is not required for the payment of the Bond and interest thereon, with respect to which such money has been so deposited, shall be turned over to the City, or deposited as directed in writing by the City. Any Future Escrow Agreement pursuant to which the money and/or Defeasance Securities are held for the payment of the Defeased Bond may contain provisions permitting the investment or reinvestment of such moneys in Defeasance Securities or the substitution of other Defeasance Securities upon the satisfaction of the requirements specified in subsection (a)(i) or (ii) of this Section. All income from such Defeasance Securities received by the Paying Agent/Registrar which is not required for the payment of the Defeased Bond, with respect to which such money has been so deposited, shall be remitted to the City or deposited as directed in writing by the City. -16- (c) The term "Defeasance Securities" means (i) direct, noncallable obligations of the United States of America, including obligations that are unconditionally guaranteed by the United States of America., (ii) noncallable obligations of an agency or instrumentality of the United States of America, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date of the purchase thereof are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, (iii) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that, on the date the governing body of the City adopts or approves the proceedings authorizing the financial arrangements are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, and (iv) any other then authorized securities or obligations under applicable state law that may be used to defease obligations such as the Bond. (d) Until the Defeased Bond shall have become due and payable, the Paying Agent/Registrar shall perform the services of Paying Agent/Registrar for the Defeased Bond the same as if they had not been defeased, and the City shall make proper arrangements to provide and pay for such services as required by this Ordinance. SECTION 10. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BOND. (a) Replacement Bond. In the event any outstanding Bond is damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new Bond of the same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Bond, in replacement for such Bond in the manner hereinafter provided. (b) Application for Replacement Bond. Application for replacement of a damaged, mutilated, lost, stolen, or destroyed Bond shall be made by the Registered Owner thereof to the Paying Agent/Registrar. In every case of loss, theft, or destruction of a Bond, the Registered Owner applying for a replacement Bond shall furnish to the City and to the Paying Agent/Registrar such security or indemnity as may be required by them to save each of them harmless from any loss or damage with respect thereto. Also, in every case of loss, theft, or destruction of a Bond, the Registered Owner shall furnish to the City and to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such Bond, as the case may be. In every case of damage or mutilation of a Bond, the Registered Owner shall surrender to the Paying Agent/Registrar for cancellation the Bond so damaged or mutilated. (c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in the event any such Bond shall have matured, and no default has occurred which is then continuing in the payment of the principal of, redemption premium, if any, or interest on such Bond, the City may authorize the payment of the same (without surrender thereof except in the case of a damaged or mu- tilated Bond) instead of issuing a replacement Bond, provided security or indemnity is furnished as above provided in this Section. -17- (d) Charge for Issuing Replacement Bond. Prior to the issuance of any replacement Bond, the Paying Agent/Registrar shall charge the Registered Owner of such Bond with all legal, printing, and other expenses in connection therewith. Every replacement Bond issued pursuant to the provisions of this Section by virtue of the fact that any Bond is lost, stolen, or destroyed shall constitute a Bond of the City whether or not the lost, stolen, or destroyed Bond shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and proportionately with any other Bond duly issued under this Ordinance. (e) Authority for Issuing Replacement Bond. In accordance with Section 1201, Texas Government Code, this Section of this Ordinance shall constitute authority for the issuance of any such replacement Bond without necessity of further action by the City or any other body or person, and the duty of the replacement of such Bond is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such replacement Bond in the form and manner and with the effect, as provided in Section 5(a) of this Ordinance for Bond issued in conversion and exchange of a Bond. SECTION 11. CUSTODY, APPROVAL, AND REGISTRATION OF BOND; BOND COUNSEL'S OPINION; AND CUSIP NUMBERS. The Mayor of the City is hereby authorized to have control of the Bond initially issued and delivered hereunder and all necessary records and proceedings pertaining to the Bond pending its delivery and its investigation, examination, and approval by the Attorney General of the State of Texas, and its registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of the Bond the Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate attached to such Bond, and the seal of said Comptroller shall be impressed, or placed in facsimile, on such Certificate. The approving legal opinion of the City's Bond Counsel (with an appropriate certificate pertaining thereto executed by facsimile signature of the City Secretary of the City) and the assigned CUSIP numbers, if any, may, at the option of the City, be printed on the Bond issued and delivered under this Ordinance, but neither shall have any legal effect, and shall be solely for the convenience and information of the Registered Owner of the Bond. In addition, if bond insurance is obtained, the Bond may bear an appropriate legend as provided by the insurer. SECTION 12. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE BOND. (a) Covenants. The City covenants to take any action necessary to assure, or refrain from any action which would adversely affect, the treatment of the Bond as an obligation described in section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), the interest on which is not includable in the "gross income" of the holder for purposes of federal income taxation. In furtherance thereof, the City covenants as follows: (1) to take any action to assure that no more than 10 percent of the proceeds of the Bond or the projects financed therewith (less amounts deposited to a reserve fund, if any) are used for any "private business use," as defined in section 141(b)(6) of the Code or, if more than 10 percent of the proceeds or the projects financed therewith are so used, such amounts, whether or not received by the City, with respect to such private business use, do -18- not, under the terms of this Ordinance or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than 10 percent of the debt service on the Bond, in contravention of section 141(b)(2) of the Code; (2) to take any action to assure that in the event that the "private business use" described in subsection (1) hereof exceeds 5 percent of the proceeds of the Bond or the projects financed therewith (less amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent is used for a "private business use" which is "related" and not "disproportionate," within the meaning of section 141(b)(3) of the Code, to the governmental use; (3) to take any action to assure that no amount which is greater than the lesser of $5,000,000, or 5 percent of the proceeds of the Bond (less amounts deposited into a reserve fund, if any) is directly or indirectly used to finance loans to persons, other than state or local governmental units, in contravention of section 141(c) of the Code; (4) to refrain from taking any action which would otherwise result in the Bond being treated as a "private activity bond" within the meaning of section 141(b) of the Code; (5) to refrain from taking any action that would result in the Bond being "federally guaranteed" within the meaning of section 149(b) of the Code; (6) to refrain from using any portion of the proceeds of the Bond, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code) which produces a materially higher yield over the term of the Bond, other than investment property acquired with – (A) proceeds of the Bond invested for a reasonable temporary period of 90 days or less until such proceeds are needed for the purpose for which the Bond is issued, (B) amounts invested in a bona fide debt service fund, within the meaning of section l.148-1(b) of the Treasury Regulations, and (C) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed 10 percent of the proceeds of the Bond; (7) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise contravene the requirements of section 148 of the Code (relating to arbitrage); -19- (8) to refrain from using the proceeds of the Bonds or proceeds of any prior bonds to pay debt service on another issue more than 90 days after the date of issue of the Bonds in contravention of the requirements of section 149(d) of the Code (relating to advance refundings); and (9) to pay to the United States of America at least once during each five-year period (beginning on the date of delivery of the Bond) an amount that is at least equal to 90 percent of the "Excess Earnings," within the meaning of section 148(f) of the Code and to pay to the United States of America, not later than 60 days after the Bond has been paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings under section 148(f) of the Code. (b) Rebate Fund. In order to facilitate compliance with the above covenant (8), a "Rebate Fund" is hereby established by the City for the sole benefit of the United States of America, and such fund shall not be subject to the claim of any other person, including without limitation the bondholders. The Rebate Fund is established for the additional purpose of compliance with section 148 of the Code. (c) Proceeds. The City understands that the term "proceeds" includes "disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date of issuance of the Bond. It is the understanding of the City that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the U.S. Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated which modify or expand provisions of the Code, as applicable to the Bond, the City will not be required to comply with any covenant contained herein to the extent that such failure to comply, in the opinion of nationally recognized bond counsel, will not adversely affect the exemption from federal income taxation of interest on the Bond under section 103 of the Code. In the event that regulations or rulings are hereafter promulgated which impose additional requirements which are applicable to the Bond, the City agrees to comply with the additional requirements to the extent necessary, in the opinion of nationally recognized bond counsel, to preserve the exemption from federal income taxation of interest on the Bond under section 103 of the Code. In furtherance of such intention, the City hereby authorizes and directs the Mayor, City Manager and Director of Finance of the City to execute any documents, certificates or reports required by the Code and to make such elections, on behalf of the City, which may be permitted by the Code as are consistent with the purpose for the issuance of the Bond. (d) Allocation of, and Limitation on, Expenditures for the Project. The City covenants to account for the expenditure of sale proceeds and investment earnings to be used for the purposes described in Section 1 of this Ordinance (the "Project") on its books and records in accordance with the requirements of the Internal Revenue Code. The City recognizes that in order for the proceeds to be considered used for the reimbursement of costs, the proceeds must be allocated to expenditures within 18 months of the later of the date that (1) the expenditure is made, or (2) the Project is completed; but in no event later than three years after the date on which the original expenditure is -20- paid. The foregoing notwithstanding, the City recognizes that in order for proceeds to be expended under the Internal Revenue Code, the sale proceeds or investment earnings must be expended no more than 60 days after the earlier of (1) the fifth anniversary of the delivery of the Bond, or (2) the date the Bond is retired. The City agrees to obtain the advice of nationally-recognized bond counsel if such expenditure fails to comply with the foregoing to assure that such expenditure will not adversely affect the tax-exempt status of the Bond. For purposes hereof, the issuer shall not be obligated to comply with this covenant if it obtains an opinion that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest. (e) Disposition of Project. The City covenants that the property constituting the Project will not be sold or otherwise disposed in a transaction resulting in the receipt by the City of cash or other compensation, unless the City obtains an opinion of nationally-recognized bond counsel that such sale or other disposition will not adversely affect the tax-exempt status of the Bond. For purposes of the foregoing, the portion of the property comprising personal property and disposed in the ordinary course shall not be treated as a transaction resulting in the receipt of cash or other compensation. For purposes hereof, the City shall not be obligated to comply with this covenant if it obtains an opinion that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest. (f) Written Procedures. Unless superseded by another action of the City, to ensure compliance with the covenants contained herein regarding private business use, remedial actions, arbitrage and rebate, the City Council hereby adopts and establishes the instructions attached hereto as Exhibit B as the City's written procedures. (g) Designation as Qualified Tax-Exempt Obligation. The City hereby designates the Bond as a "qualified tax-exempt obligation" as defined in section 265(b)(3) of the Code. In furtherance of such designation, the City represents, covenants and warrants the following: (a) that during the calendar year in which the Bond is issued, the City (including any subordinate entities) has not designated nor will designate bonds, which when aggregated with the Bond, will result in more than $10,000,000 of "qualified tax-exempt obligations" being issued; (b) that the City reasonably anticipates that the amount of tax-exempt obligations issued, during the calendar year in which the Bond is issued, by the City (or any subordinate entities) will not exceed $10,000,000; and, (c) that the City will take such action or refrain from such action as necessary, and as more particularly set forth in this Section, in order that the Bond will not be considered a "private activity bonds" within the meaning of section 141 of the Code. SECTION 13. SALE OF BOND. The Bond is hereby initially sold and shall be delivered to ALLIANCE BANK (the "Purchaser") for cash for the par value thereof and no accrued interest, pursuant to the Purchase Contract and Investment Letter, attached hereto as Exhibit C, dated the date of the final passage of this Ordinance which the Mayor or Mayor Pro-Tem of the City is hereby authorized to execute and deliver. In satisfaction of Section 1201.022(a)(3), Texas Government Code, and upon consultation with the City's Financial Advisor, the City Council hereby determines that the final terms of the Bond as set forth in this Ordinance are in the City's best interests. The Bond initially shall be registered in the name of Alliance Bank. -21- SECTION 14. APPROVAL OF ESCROW AGREEMENT; REFUNDING OF REFUNDED OBLIGATIONS. Concurrently with the initial delivery of the Bond the City shall deposit an amount from the proceeds from the sale of the Bond and other available funds of the City, if required, with BOKF, NA, as "Escrow Agent," sufficient to provide for the refunding of the Refunded Obligations, all in accordance with Chapter 1207. Attached hereto as Exhibit D is an Escrow Agreement between the City and the Escrow Agent, which is hereby approved in substantially final form, and the Mayor or Mayor Pro-Tem and City Secretary of the City are hereby authorized, for and on behalf of the City, to approve any changes in the Escrow Agreement from the form attached hereto and to execute the Escrow Agreement in final form. SECTION 15. NOTICE OF DEFEASANCE AND REDEMPTION OF REFUNDED OBLIGATIONS. There is attached to this Ordinance as Exhibit E is a NOTICE OF DEFEASANCE AND REDEMPTION with respect to the Refunded Obligations. The Refunded Obligations are hereby called for redemption on the "Redemption Date" set forth in the NOTICE OF DEFEASANCE AND REDEMPTION. As soon as practicable after the adoption of this Ordinance, a copy of such NOTICE OF DEFEASANCE AND REDEMPTION shall be (i) posted with the MSRB through the EMMA system, and (ii) sent to all registered owners of the respective Refunded Obligations by first class mail postage prepaid, addressed to such registered owners at their respective addresses shown on the registration books of the paying agent/registrar for the Refunded Obligations. SECTION 16. FURTHER PROCEDURES. The Mayor, Mayor Pro-Tem, City Manager, Director of Finance, and City Secretary of the City are hereby expressly authorized, empowered and directed from time to time and at any time to do and perform all such acts and things and to execute, acknowledge and deliver in the name and under the corporate seal and on behalf of the City all other instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this Ordinance, the Bond, and the sale of the Bond. In case any officer whose signature shall appear on the Bond shall cease to be such officer before the delivery of such Bond, such signature shall nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office until such delivery. SECTION 17. ORDINANCE A CONTRACT; AMENDMENTS. The Ordinance shall constitute a contract with the Registered Owner of the Bond, binding on the City and its successors and assigns, and shall not be amended or repealed by the City as long as any Bond remains outstanding except as permitted in this Section. (a) The City may from time to time, without the consent of Registered Owner, except as otherwise required by paragraph (b) below, amend or supplement this Ordinance to (i) cure any ambiguity, defect or omission in this Ordinance that does not materially adversely affect the interests of the Registered Owner, (ii) grant additional rights or security for the benefit of the Registered Owner, (iii) add events of default as shall not be inconsistent with the provisions of this Ordinance and that shall not materially adversely affect the interests of the Registered Owner, (v) qualify this Ordinance under the Trust Indenture Act of 1939, as amended, or corresponding provisions of -22- federal laws from time to time in effect, or (iv) make such other provisions in regard to matters or questions arising under this Ordinance as shall not be materially inconsistent with the provisions of this Ordinance and that shall not, in the opinion of nationally-recognized bond counsel, materially adversely affect the tax-exempt status of the Bond. (b) Except as provided in paragraph (a) above, the Registered Owner of the Bond shall have the right from time to time to approve any amendment hereto that may be deemed necessary or desirable by the City; provided, however, that without the consent of the Registered Owner, nothing herein contained shall permit or be construed to permit amendment of the terms and conditions of this Ordinance or in any of the Bond so as to: (1) Make any change in the maturity of the Bond; (2) Reduce the rate of interest borne by the Bond; (3) Reduce the amount of the principal of payable on the Bond; or (4) Modify the terms of payment of principal of or interest on the Bond or impose any condition with respect to such payment. (c) If at any time the City shall desire to amend this Ordinance under Section 16(a) or (b) above, the City shall send by U.S. mail to the Registered Owner of the Bond a copy of the proposed amendment prior to its effective date. (d) Whenever at any time within one year from the date of mailing of such notice the City shall receive an instrument or instruments executed by the Registered Owner, which instrument or instruments shall refer to the proposed amendment and which shall specifically consent to and approve such amendment, the City may adopt the amendment in substantially the same form. (e) Upon the adoption of any amendatory Ordinance pursuant to the provisions of this Section, this Ordinance shall be deemed to be modified and amended in accordance with such amendatory Ordinance, and the respective rights, duties, and obligations of the City and Registered Owner of the Bond shall thereafter be determined, exercised, and enforced, subject in all respects to such amendment. (f) Any consent given by the Registered Owner of the Bond pursuant to the provisions of this Section shall be irrevocable for a period of six months from the date of the such consent and shall be conclusive and binding upon all future Registered Owners of the Bond during such period. Such consent may be revoked at any time after six months from the date of said consent by the Registered Owner who gave such consent, or by a successor in title, by filing notice with the City, but such revocation shall not be effective if the Registered Owner has, prior to the attempted revocation, consented to and approved the amendment. -23- (g) For the purposes of establishing ownership of the Bond, the City shall rely solely upon the registration of the ownership of such Bond on the Registration Books kept by the Paying Agent/Registrar. SECTION 18. REMEDIES IN EVENT OF DEFAULT. In addition to all the rights and remedies provided by the laws of the State of Texas, it is specifically covenanted and agreed particularly that in the event the City (i) defaults in the payment of the principal, premium, if any, or interest on the Bond, (ii) defaults in the deposits and credits required to be made to the Interest and Sinking Fund, or (iii) defaults in the observance or performance of any other of the covenants, conditions or obligations set forth in this Ordinance, the Registered Owner of the Bond shall be entitled to seek a writ of mandamus issued by a court of proper jurisdiction compelling and requiring the governing body of the City and other officers of the City to observe and perform any covenant, condition or obligation prescribed in this Ordinance. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein, and every such right and power may be exercised from time to time and as often as may be deemed expedient. The specific remedy herein provided shall be cumulative of all other existing remedies, and the specification of such remedy shall not be deemed to be exclusive. SECTION 19. NO RULE 15C2-12 UNDERTAKING; ANNUAL FINANCIAL STATEMENTS. The City has not made an undertaking in accordance with Rule 15c2-12 of the Securities and Exchange Commission (the "Rule") in connection with the issuance of the Bond inasmuch as the Purchaser is not acting as an "underwriter in a primary offering of municipal securities" within the meaning of the Rule. The City is not, therefore, obligated pursuant to the Rule to provide any on-going disclosure relating to the City or the Bond; however, as long as the Bond is outstanding, the City shall provide the following to the Registered Owner: (a) Audited financial statements of the City, to be provided within six months after the close of each fiscal year ending on and after August 31, 2020; and (b) A copy of the City's annual budget within not more than 30 days after it is adopted by the City's governing body. SECTION 20. INTERESTED PARTIES. Nothing in this Ordinance expressed or implied is intended or shall be construed to confer upon, or to give to, any person or entity, other than the City and the Registered Owners of the Bond, any right, remedy or claim under or by reason of this Ordinance or any covenant, condition or stipulation hereof, and all covenants, stipulations, promises and agreements in this Ordinance contained by and on behalf of the City shall be for the sole and exclusive benefit of the City and the Registered Owners of the Bond. SECTION 21. INCORPORATION OF RECITALS. The City hereby finds that the statements set forth in the recitals of this Ordinance are true and correct, and the City hereby incorporates such recitals as a part of this Ordinance. -24- SECTION 22. CHOICE OF LAW. This Ordinance shall be governed by and construed in accordance with the laws of the State of Texas. SECTION 23. EFFECTIVE DATE. Pursuant to the provisions of Section 1201.028, Texas Government Code, this Ordinance shall become effective immediately after its adoption. [The remainder of this page intentionally left blank] EXHIBIT A THE PAYING AGENT/REGISTRAR AGREEMENT IS OMITTED AT THIS POINT AS IT APPEARS IN EXECUTED FORM ELSEWHERE IN THIS TRANSCRIPT OF PROCEEDINGS B-1 EXHIBIT B WRITTEN PROCEDURES RELATING TO CONTINUING COMPLIANCE WITH FEDERAL TAX COVENANTS A. Arbitrage. With respect to the investment and expenditure of the proceeds of the Bond, the City's Director of Finance (the "Responsible Person") will: (i) monitor all amounts deposited into a sinking fund or funds (e.g., the Interest and Sinking Fund), to assure that the maximum amount invested at a yield higher than the yield on the Bond does not exceed an amount equal to the debt service on the Bond in the succeeding 12 month period plus a carryover amount equal to one-twelfth of the principal and interest payable on the Bond for the immediately preceding 12-month period; (ii) monitor the actions of the Escrow Agent to ensure compliance with the applicable provisions of the Escrow Agreement, including with respect to reinvestment of cash balances; (iii) ensure that the applicable information return (e.g., IRS Form 8038-G, 8038-GC, or any successor forms) is timely filed with the IRS; and (iv) assure that, unless excepted from rebate and yield restriction under section 148(f) of the Code, excess investment earnings are computed and paid to the U.S. government at such time and in such manner as directed by the IRS (A) at least every 5 years after the date of delivery of the Bond (the "Issue Date"), and (B) within 30 days after the date the Bond is retired. B. Private Business Use. With respect to the use of the facilities financed or refinanced with the proceeds of the Bond the Responsible Person will: (i) monitor the date on which the facilities are substantially complete and available to be used for the purpose intended; (ii) monitor whether, at any time the Bond is outstanding, any person, other than the City, the employees of the City, the agents of the City or members of the general public has any contractual right (such as a lease, purchase, management or other service agreement) with respect to any portion of the facilities; (iii) monitor whether, at any time the Bond is outstanding, any person, other than the City, the employees of the City, the agents of the City or members of the general public has a right to use the output of the facilities (e.g., water, gas, electricity); B-2 (iv) monitor whether, at any time the Bond is outstanding, any person, other than the City, the employees of the City, the agents of the City or members of the general public has a right to use the facilities to conduct or to direct the conduct of research; (v) determine whether, at any time the Bond is outstanding, any person, other than the City, has a naming right for the facilities or any other contractual right granting an intangible benefit; (vi) determine whether, at any time the Bond is outstanding, the facilities are sold or otherwise disposed of; and (vii) take such action as is necessary to remediate any failure to maintain compliance with the covenants contained in the Ordinance related to the public use of the facilities. C. Record Retention. The Responsible Person will maintain or cause to be maintained all records relating to the investment and expenditure of the proceeds of the Bond and the use of the facilities financed or refinanced thereby for a period ending three (3) years after the complete extinguishment of the Bond. If any portion of the Bond is refunded with the proceeds of another series of tax-exempt obligations, such records shall be maintained until the three (3) years after the refunding obligations are completely extinguished. Such records can be maintained in paper or electronic format. D. Responsible Person. The Responsible Person shall receive appropriate training regarding the City's accounting system, contract intake system, facilities management and other systems necessary to track the investment and expenditure of the proceeds and the use of the facilities financed or refinanced with the proceeds of the Bond. The foregoing notwithstanding, the Responsible Person is authorized and instructed to retain such experienced advisors and agents as may be necessary to carry out the purposes of these instructions. EXHIBIT C THE PURCHASE CONTRACT AND INVESTMENT LETTER IS OMITTED AT THIS POINT AS IT APPEARS IN EXECUTED FORM ELSEWHERE IN THIS TRANSCRIPT OF PROCEEDINGS EXHIBIT D THE ESCROW AGREEMENT IS OMITTED AT THIS POINT AS IT APPEARS IN EXECUTED FORM ELSEWHERE IN THIS TRANSCRIPT OF PROCEEDINGS EXHIBIT E NOTICE OF DEFEASANCE AND REDEMPTION To the Holders of the CITY OF KENNEDALE, TEXAS COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 2011 (Maturing on and after February 1, 2023) NOTICE IS HEREBY GIVEN that the City of Kennedale, Texas (the "City"), in Tarrant County, Texas, has deposited cash and authorized investment securities, if any, into an irrevocable trust account in order to pay, and has legally defeased, and all of the City's outstanding COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 2011, dated June 1, 2011, which mature on and after February 1, 2023 (the "Refunded Obligations"), as more specifically described below: CITY OF KENNEDALE, TEXAS COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 2011 MATURITY (FEB. 1 ) PRINCIPAL AMOUNT MATURING IN YEAR ($) PRINCIPAL AMOUNT REFUNDED ($) STATED INTEREST RATE (%) CUSIP NO. 489332 2023 255,000 255,000 4.000 HF6 *** *** *** *** *** 2025 275,000 275,000 4.000 HG4 *** *** *** *** *** 2027 305,000 305,000 4.000 HH2 *** *** *** *** *** 2029 325,000 325,000 4.000 HJ8 *** *** *** *** *** 2031 355,000 355,000 4.000 HK5 NOTICE IS FURTHER GIVEN that all of the Refunded Obligations have been called for redemption on February 1, 2021 (the "Redemption Date") at the Redemption Price equal to 100% of par plus accrued interest to the Redemption Date. The Refunded Obligations shall be redeemed and shall become due and payable on the Redemption Date, and the interest thereon shall cease to accrue from and after the Redemption Date. DUE AND PROPER ARRANGEMENTS have been made to provide BOKF, NA, the Paying Agent/Registrar for the Refunded Obligations, with funds sufficient to pay the redemption price of the Refunded Obligations. Interest thereon shall cease to accrue from and after the Redemption Date. NOTICE IS FURTHER GIVEN THAT the Refunded Obligations will be payable at and should be submitted either in person or by certified mail to the following address: BOKF, NA Global Corporate Trust 111 Fillmore Ave E. St. Paul, MN 55107 For Questions: 1-800-934-6802 To avoid a backup withholding tax required by Section 3406 of the Internal Revenue Code of 1986, holders must submit a properly completed IRS Form W-9. _________________________ * THE ABOVE REFERENCED CUSIP NUMBERS ARE PROVIDED FOR THE CONVENIENCE OF THE HOLDERS. NEITHER THE PAYING AGENT NOR THE CITY ARE RESPONSIBLE FOR ANY ERROR OF ANY NATURE RELATING TO THE CUSIP NUMBERS.