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is unaffiliated with the City (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the Owners and beneficial owners of the Bonds. The City may also repeal or amend the provisions of this Article if the SEC amends or repeals the applicable provisions of the Rule or any court of final jurisdiction enters judgment that such provisions of the Rule are invalid, but in either case only if and to the extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing or selling Bonds in the primary offering of the Bonds. If the City so amends the provisions of this Article, it shall include with any amended financial information or operating data next provided in accordance with Section 13.02 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. ARTICLE XIV SURETY POLICY Section 14.01. Surety Policy. In order to satisfy in whole the City's obligations with respect to the Reserve Fund provided in this Ordinance, and subject to the provisions of Section 8.05(b) hereof, the City shall purchase from Financial Security Assurance, Inc., as Surety, a Surety Policy for such Fund, in an amount equal to the all of the amount of the average annual requirement for the payment of principal and interest with respect to the Bonds, it being found and determined that the substitution of a Surety Policy in lieu of depositing cash to the Reserve Fund is cost effective. It is officially found, determined and declared that the substitution of the Surety Policy for all of the average annual principal and interest requirements of the Bonds is cost effective. Section 14.02. Provisions Applicable While Surety Policy in Effect. The following provisions shall apply so long as a Surety Policy issued by Financial Security Assurance, Inc. ("Financial Security") shall be in effect with respect to the Bonds: (a) The City shall repay any draws under the Surety Policy and pay all related reasonable expenses incurred by Financial Security. Interest shall accrue and be payable on such draws and expenses from the date of payment by Financial Security at the Late Payment Rate. "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 ("Prime Rate") (any change in such Prime Rate 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 Bonds and (b) the maximum rate permissible under applicable usury or similar laws limiting interest rates, including, particularly Tex. Gov't Code Ann. S 1204.006. The Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a year of 365 days. In the event JPMorgan Chase Bank ceases to announce its Prime Rate publicly, Prime Rate shall be the publicly announced prime or base lending rate of such national bank as Financial Security shall specify. (i) Repayment of draws and payment of expenses and accrued interest thereon at the Late Payment Rate (collectively, "Policy Costs") shall commence in the first month following each draw, and each such monthly payment shall be in an amount at least equal to 1/12 of the aggregate of Policy Costs related to such draw. R:\San Marcos\EUS Rfdg.02IDocs\Ordinance\Final.wpd 42