Resolution No. 2025-18RESOLUTION NO.2025 - 18
RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN
AREA WATER AUTHORITY AUTHORIZING THE ISSUANCE OF THE
BAYTOWN AREA WATER AUTHORITY WATER SUPPLY
CONTRACT REVENUE BONDS, SERIES 2025 (CITY OF BAYTOWN
PROJECT); APPROVING OTHER MATTERS RELATED THERETO;
AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.
WHEREAS, it is officially found and determined that the Baytown Area Water Authority
(the "Authority") was organized, created, and established pursuant to Chapter 600, Acts of the
63rd Legislature of the State of Texas, Regular Session, 1973, as amended, and as codified in
Chapter 8104, Texas Special District Local Laws Code (the "Act"); and
WHEREAS, the Act authorizes the Authority to issue bonds for the purpose of financing
the Project (as defined herein); and
WHEREAS, the Authority desires to issue, as authorized by the Act, bonds for the purpose
of making, purchasing, constructing, leasing or otherwise acquiring, enlarging, expanding and
modifying the Project (as hereinafter defined); and
WHEREAS, pursuant to Section 49.181(h)(1)(D), Texas Water Code, the issuance of the
bonds by the Authority is exempt from the requirements of Section 49.181, Texas Water Code;
and
WHEREAS, pursuant to Section 49.183(d), Texas Water Code, the Authority's issuance
of the bonds is exempt from the requirements of Section 49.183(a)-(c), Texas Water Code; and
WHEREAS, the meeting at which this Resolution is being considered is open to the public
as required by law, and the public notice of time, place and purpose of said meeting was given as
required by Chapter 551, Texas Government Code, as amended;
NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE
BAYTOWN AREA WATER AUTHORITY:
ARTICLE I
FINDINGS AND DETERMINATIONS
Section 1.1. Findines. The declarations, determinations and findings declared, made and
found in the preamble to this Resolution are hereby adopted, restated and made a part of the
operative provisions hereof.
ARTICLE II
DEFINITIONS AND INTERPRETATIONS
Section 2.1. Definitions. In this Resolution, the following terms shall have the following
meanings, unless the context clearly indicates otherwise:
"Act" means Chapter 8104, Texas Special District Local Laws Code.
"Additional Bonds" mean the additional parity revenue bonds which the Authority has
reserved the right to issue in Article VI of this Resolution.
"Authority" means the Baytown Area Water Authority, and where appropriate, the Board.
"Authorized Officer" means the President of the Board or General Manager of the
Authority, or his or her designee.
"Baytown Contract" means that certain Amended and Restated Water Supply Contract for
Treated Water, originally entered into on January 31, 1977, amended and restated as of October 23,
1997, as further amended pursuant to an amendment effective as of January 3, 2005, an amendment
effective as of February 23, 2012, an amendment effective as of March 27, 2014, an amendment
effective as of January 18, 2017, between the Authority and the City, an amendment effective as
of January 25, 2019, an amendment effective as of May 9, 2024, and an amendment effective as
of September 1, 2025, between the Authority and the City, under which the Authority sells water
to the City.
"Blanket Issuer Letter of Representations" means the Blanket Issuer Letter of
Representations between the Authority, the Paying Agent/Registrar and DTC.
"Board" means the Board of Directors of the Authority.
"Bond" means any of the Bonds.
"Bonds" mean the Baytown Area Water Authority Water Supply Contract Revenue Bonds,
Series 2025 (City of Baytown Project), authorized by this Resolution.
"Bond Counsel" means Bracewell LLP.
"Business Day" means any day which is not a Saturday, Sunday, a legal holiday or a day
on which banking institutions in the city where the office of the Paying Agent/Registrar is located,
are authorized by law or executive order to close.
"City" means the City of Baytown, Texas, and where appropriate, the City Council thereof.
"Closing Date" means the date of the initial delivery of and payment for the Bonds.
"Code" means the Internal Revenue Code of 1986, as amended, and, with respect to a
specific section thereof, such reference shall be deemed to include (a) the Regulations promulgated
under such section, (b) any successor provision of similar import hereafter enacted, (c) any
corresponding provision of any subsequent Internal Revenue Code and (d) the regulations
promulgated under the provisions described in (b) and (c).
"Comptroller" means the Comptroller of Public Accounts of the State of Texas.
"Contract Amendment" means the seventh amendment to the Baytown Contract, effective
as of September 1, 2025.
"Debt Service Fund" means the interest and sinking fund for payment of the Bonds
established by the Authority in Section 5.3 of this Resolution.
"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.
"Escrow Agent" means BOKF, NA, and its successors and assigns, or such other escrow
agent as may be approved by an Authorized Officer of the Authority and acceptable to the TWDB.
"Escrow Agreement" means the escrow agreement by and between the Authority and the
Escrow Agent pertaining to the deposit of the proceeds of the Bonds.
"Financial Obligation" means a (a) debt obligation; (b) derivative instrument entered into
in connection with, or pledged as security or a source of payment for, an existing or planned debt
obligation; or (c) guarantee of a debt obligation or any such derivative instrument; provided that
"financial obligation" shall not include municipal securities (as defined in the Securities Exchange
Act of 1934, as amended) as to which a final official statement (as defined in the Rule) has been
provided to the MSRB consistent with the Rule.
"Fiscal Year" means the fiscal year of the Authority as shall be set from time -to -time by
the Board.
"Houston" means the City of Houston, Texas.
"Houston Contract" means that certain Water Supply Contract dated October 24, 1994, as
amended on January 3, 2005, on or about February 28, 2007, February 24, 2016, February 7, 2024,
and July 21, 2025 between the Authority and Houston, under which the Authority buys water from
Houston for resale to the City and others, or any similar contract between the same parties for the
purchase and sale of untreated water, entered into by the Authority with the consent of the City.
"Initial Bond" means the Initial Bond authorized by Section 3.4(d).
"Interest Payment Date," when used in connection with any Bond, means May 1, 2026,
and each November 1 and May I thereafter until maturity or prior redemption.
-3-
"Outstanding Bonds" mean the Authority's Water Supply Contract Revenue and
Refunding Bonds, Series 2012 (City of Baytown Project), Water Supply Contract Revenue Bonds,
Series 2018 (City of Baytown Project), and Water Supply Contract Revenue Bonds, Series 2019
(City of Baytown Project) and Water Supply Contract Revenue Bonds, Series 2024 (City of
Baytown Project).
"Owner" or "Registered Owner," when used with respect to any Bond, means the person
or entity in whose name such Bond is registered in the Register. Any reference to a particular
percentage or proportion of the Owners shall mean the Owners at a particular time of the specified
percentage or proportion in aggregate principal amount of all Bonds then outstanding under this
Resolution, exclusive of Bonds held by the Authority.
"Parity Bonds" mean the Bonds, the Outstanding Bonds, and any Additional Bonds.
"Paying Agent/Registrar" means BOKF, NA, and its successors in that capacity.
"Paying Agent/Registrar Agreement" means the paying agent and registrar agreement by
and between the Authority and the Paying Agent/Registrar pertaining to the Bonds.
"Pledged Revenues" mean (i) the payments to be made by the City to the Authority
pursuant to the Baytown Contract consisting of the amounts required to pay, and pledged herein
for payment of, the principal of, premium, if any, and interest on the Bonds and the Outstanding
Bonds, and (ii) any additional revenues, income, receipts, or other resources, including without
limitations, any grants, donations, or income received or to be received from the United States
Government, or any other public or private source, whether pursuant to an agreement or otherwise,
which in the future may, at the option of the Authority pursuant to official action by the Board, be
pledged to the payment of the Parity Bonds. The City is authorized to pay the Pledged Revenues
described in (i) of the previous sentence pursuant to Section 402.014, Texas Local Government
Code (recodified as Section 552.014, Texas Local Government Code).
"Project" means the property, works, facilities, and improvements (whether previously
existing or to be made, constructed, or acquired) within or without the boundaries of the Authority,
necessary (1) to acquire surface water supplies from sources both within and without the
boundaries of the Authority, including particularly the sources provided by the Houston Contract,
(2) to conserve, store, transport, treat, and purify untreated water purchased by the Authority
pursuant to the Houston Contract, and (3) to distribute, sell, and deliver treated water to the City
pursuant to the terms of the Baytown Contract.
"Project Costs" mean the costs incurred by the Authority or the City with respect to the
acquisition of the Project, including, but not limited to, the following items:
(1) Obligations for labor, materials, services and equipment;
(2) Costs of any bonds and insurance, the costs of which are not otherwise provided
for;
(3) Costs of engineering services, including costs for preliminary design and
development work, test borings, surveys, estimates, plans and specifications,
-4-
supervising construction, and performing all other duties required by or consequent
upon proper construction;
(4) Expenses incurred in connection with the issuance and sale of the Bonds, including
without limitation (a) fees and expenses of accountants, auditors, attorneys,
underwriters, engineers, and financial advisors, (b) materials, supplies, printing and
engraving, (c) recording and filing fees, (d) rating agency fees, (e) origination fees,
and (f) initial fees and expenses of a trustee, if any;
(5) Costs required to be paid under the terms of any contract or contracts in connection
with the Project;
(6) Sums required to reimburse the Authority or the City for advances made by either
of them for any of the above items, including fees of any kind for any other costs
incurred, including expenses for organization of the Authority, overhead expenses
and expenses for any work done by either the Authority or the City which are
properly chargeable to the Project; and
(7) Costs of all items related to the acquisition of the Project.
"Project Fund" means the fund established by Section 5.2 of this Resolution to pay Project
Costs.
"Record Date" means, for any Interest Payment Date, the fifteenth (15th) calendar day of
the month next preceding each Interest Payment Date.
"Register" means the books of registration kept by the Paying Agent/Registrar in which
are maintained the names and addresses of, and the principal amounts of the Bonds registered to
each Owner.
"Regulations" means the applicable proposed, temporary or final Treasury Regulations
promulgated under the Code or, to the extent applicable to the Code, under the Internal Revenue
Code of 1954, as such regulations may be amended or supplemented from time to time.
hereto.
"Resolution" means this bond resolution and all amendments hereof and supplements
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"Security Documents" means this Resolution.
"State" means the State of Texas.
"TWDB" means the Texas Water Development Board or its successor.
-5-
Section 2.2. Interpretations. All terms defined herein and all pronouns used in this
Resolution shall be deemed to apply equally to singular and plural and to all genders. The titles
and headings of the articles and sections of this Resolution 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. This Resolution and all the terms and provisions hereof
shall be liberally construed to effectuate the purposes set forth herein and to sustain the validity of
the Bonds and the validity of the lien on and pledge of the Pledged Revenues to secure the payment
of the Bonds.
ARTICLE III
TERMS OF THE BONDS
Section 3.1. Authorization and Authorized Amount. The Bonds shall be in fully
registered form, without coupons, in the initial aggregate principal of amount of $69,000,000 for
the purposes of making, purchasing, constructing, leasing or otherwise acquiring, enlarging,
expanding, and modifying the Project, including (i) the design, construction, acquisition and
equipment of the expansion of the Authority's East Surface Water Treatment Plant and related
infrastructure, and (ii) paying the costs of issuing the Bonds, under and in strict conformity with
the Constitution and laws of the State and the Act.
Section 3.2. Designation, Date, and Interest Payment Dates. The Bonds shall be
designated as "Baytown Area Water Authority Water Supply Contract Revenue Bonds, Series
2025 (City of Baytown Project)," and shall be dated November 1, 2025. The Bonds shall bear
interest payable on each Interest Payment Date at the rates set forth in Section 3.3 of this Resolution
from the latter of the Issuance Date or the most recent Interest Payment Date to which interest has
been paid or duly provided for, calculated on the basis of a 360-day year of 30-day months.
Section 3.3. Initial Bonds, Numbers and Denominations. The Bonds shall be initially
issued bearing the numbers, in the principal amounts, and bearing interest at the rates set forth in
the following schedule and may be transferred and exchanged as set forth in this Resolution. The
Bonds shall mature on May 1 in each of the years and in the amounts set out in such schedule. The
Initial Bond shall be numbered I-1, and all other Bonds shall be numbered in sequence beginning
with R-1. Bonds delivered on transfer of or in exchange for other Bonds shall be numbered in
order of their authentication by the Paying Agent/Registrar, shall be in the denomination of $5,000
or integral multiples thereof, and shall mature on the same date and bear interest at the same rate
as the Bond or Bonds in lieu of which they are delivered.
-6-
Principal
Interest
Principal
Interest
Year
Amount
Rate
Year
Amount
Rate
2027
$1,475,000
1.9400-0
2042
$2,920,000
3.750° o
2028
1,510,000
1.940
2043
2,920,000
3.850
2029
1,540,000
1.980
2044
2,920,000
3.870
2030
1,570,000
2.080
2045
2,920,000
3.890
2031
1,605,000
2.210
2046
2,920,000
4.060
2032
1,645,000
2.360
2047
2,920,000
4.080
2033
1,690,000
2.460
2048
2,920,000
4.090
2034
1,735,000
2.570
2049
2,920,000
4.100
2035
1,785,000
2.680
2050
2,920,000
4.110
2036
1,840,000
2.940
2051
2,920,000
4.120
2037
1,900,000
3.140
2052
2,920,000
4.120
2038
1,965,000
3.300
2053
2,920,000
4.120
2039
2,035,000
3.440
2054
2,920,000
4.120
2040
2,920,000
3.540
2055
2,905,000
4.120
2041
2,920,000
3.660
Section 3.4. Execution and Registration of Bonds; Seal.
(a) The Bonds shall be signed on behalf of the Authority by the President or Vice
President of the Board and countersigned by the Secretary or an Assistant Secretary of the Board,
by their manual, lithographed, or facsimile signatures, and the official seal of the Authority shall
be impressed or placed in facsimile thereon. Such facsimile signatures on the Bonds shall have
the same effect as if each of the Bonds had been signed manually and in person by each of said
officers, and such facsimile seal on the Bonds shall have the same effect as if the official seal of
the Authority had been manually impressed upon each of the Bonds.
(b) If any officer of the Authority whose manual or facsimile signature shall appear on
the Bonds shall cease to be such officer before the authentication of such Bonds or before the
delivery of such Bonds, such manual or facsimile signature shall nevertheless be valid and
sufficient for all purposes as if such officer had remained in such office.
(c) Except as provided below, no Bond shall be valid or obligatory for any purpose or
be entitled to any security or benefit of this Resolution unless and until the Paying
Agent. -Registrar's Authentication Certificate, substantially in the form provided herein, has been
duly authenticated by manual execution by an officer or duly authorized signatory of the Paying
Agent Registrar. In lieu of the executed Paying Agent/Registrar's Authentication Certificate
described above, the Initial Bond delivered at the Closing Date shall have attached hereto the
Comptroller's Registration Certificate substantially in the form provided herein, manually
executed by the Comptroller, or by his duly authorized agent, which certificate shall be evidence
that the Initial Bond has been duly approved by the Attorney General of the State of Texas and
that it is a valid and binding obligation of the City, and has been registered by the Comptroller.
(d) On the Closing Date, the Initial Bond, being a single bond representing the entire
principal amount of the Bonds, payable in stated installments to the TWDB or its designee,
-7-
executed by manual or facsimile signature of the President or Vice President of the Board and the
Secretary or Assistant Secretary of the Board, approved by the Attorney General, and registered
and manually signed by the Comptroller, shall be delivered to the Representative or its designee.
Upon payment for the Initial Bond, the Paying Agent/Registrar shall cancel the Initial Bond and
deliver definitive Bonds to DTC. To the extent the Paying Agent. --'Registrar is eligible to participate
in DTC's FAST system, as evidenced by an agreement between the Paying Agent/Registrar and
DTC, the Paying Agent., -'Registrar shall hold the definitive bonds in safekeeping for the DTC.
Section 3.5. Payment of Principal and Interest. The principal of the Bonds shall be
payable, without exchange or collection charges, in any coin or currency of the United States of
America which, on the date of payment, is legal tender for the payment of debts due the United
States of America, upon their presentation and surrender as they respectively become due and
payable at the principal payment office of the Paying Agent/Registrar in Dallas, Texas or such
other location as may be designated by the Paying Agent/Registrar from time to time. The interest
on each Bond shall be payable by check payable on the Interest Payment Date, mailed by the
Paying Agent/Registrar on or before each Interest Payment Date to the Owner of record as of the
Record Date, to the address of such Owner as shown on the Register.
If the date for the payment of principal or interest on any Bond 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 such payment was due.
Section 3.6. Appointment of Initial Paying Agent., -Registrar, Successor Pa in
Agent/ReRistrars.
(a) BOKF, N.A. is hereby appointed as the Paying Agent/Registrar. The President of
the Board is hereby authorized and directed to execute and deliver a Paying AgentrRegistrar
Agreement, specifying the duties and responsibilities of the Authority and the Paying
Agent:Registrar, in substantially the form presented to the Board. The Paying Agent., Registrar
Agreement, having such terms and provisions as are approved by the President of the Board as
evidenced by his or her execution thereof, and its execution and delivery by the President of the
Board, are hereby authorized and approved. If required, the attestation of the President's signature
by the Secretary or Assistant Secretary of the Board is hereby approved.
(b) The Authority covenants that at all times while any Bonds are outstanding, it will
provide a commercial bank or trust company, organized under the laws of the United States or any
state, authorized under such laws to exercise trust powers, and subject to supervision or
examination by federal or state authority, to serve as and perform the duties and services of Paying
Agent/Registrar for the Bonds. The Authority reserves the right to change the Paying
Agent Registrar for the Bonds on not less than 60 days' written notice to the Paying
Agent Registrar, so long as any such notice is effective not less than 60 days prior to the next
succeeding principal or interest payment date on the Bonds. Promptly upon the appointment of
any successor Paying Agent/Registrar, the previous Paying Agent. -Registrar shall deliver the
Register or a copy thereof to the new Paying Agent. Registrar, and the new Paying Agent/Registrar
shall notify each Owner, by United States mail, first class, postage prepaid, of such change and of
the address of the new Paying Agent., -'Registrar. Each Paying Agent. -Registrar hereunder, by acting
in that capacity, shall be deemed to have agreed to the provisions of this Section.
any successor Paying Agent/Registrar, the previous Paying Agent/Registrar shall deliver the
Register or a copy thereof to the new Paying Agent/Registrar, and the new Paying Agent/Registrar
shall notify each Owner, by United States mail, first class, postage prepaid, of such change and of
the address of the new Paying Agent/Registrar. Each Paying Agent/Registrar hereunder, by acting
in that capacity, shall be deemed to have agreed to the provisions of this Section.
Section 3.7. Special Record Date. If interest on any Bond is not paid on any Interest
Payment Date and continues unpaid for thirty (30) days thereafter, the Paying Agent/Registrar
shall establish a new record date for the payment of such interest, to be known as a Special Record
Date. The Paying Agent/Registrar shall establish a Special Record Date when funds to make such
interest payment are received from or on behalf of the Authority. Such Special Record Date shall
be fifteen (15) days prior to the date fixed for payment of such past due interest, and notice of the
date of payment and the Special Record Date shall be sent by United States mail, first class, postage
prepaid, not later than five (5) days prior to the Special Record Date, to each Owner of record of
an affected Bond as of the close of business on the day prior to the mailing of such notice.
Section 3.8. Ownership; Unclaimed Principal and Interest. Subject to the further
provisions of this Section, the Authority, the Paying Agent/Registrar and any other person may
treat the person in whose name any Bond is registered as the absolute Owner of such Bond for the
purpose of making and receiving payment of the principal of or interest on such Bond, and for all
other purposes, whether or not such Bond is overdue, and neither the Authority nor the Paying
Agent/Registrar shall be bound by any notice or knowledge to the contrary. All payments made
to the person deemed to be the Owner of any Bond in accordance with this Section shall be valid
and effectual and shall discharge the liability of the Authority and the Paying Agent/Registrar upon
such Bond to the extent of the sums paid.
Amounts held by the Paying Agent/Registrar which represent principal of and interest on
the Bonds remaining unclaimed by the Owner after the expiration of three years from the date such
amounts have become due and payable shall be reported and disposed of by the Paying
Agent, Registrar in accordance with the applicable provisions of Texas law including, to the extent
applicable, Title 6 of the Texas Property Code, as amended.
Section 3.9. Registration, Transfer, and Exchange. So long as any Bonds remain
outstanding, the Paying Agent/Registrar shall keep the Register at its principal payment office and,
subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide
for the registration and transfer of Bonds in accordance with the terms of this Resolution.
Each Bond shall be transferable only upon the presentation and surrender thereof at the
principal payment office of the Paying Agent/Registrar in Dallas, Texas (or such other location as
designated by the Paying Agent/Registrar), duly endorsed for transfer, or accompanied by an
assignment duly executed by the registered Owner or his authorized representative in form
satisfactory to the Paying Agent,`Registrar. Upon due presentation of any Bond in proper form for
transfer, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor, within
three Business Days after such presentation, a new Bond or Bonds, registered in the name of the
transferee or transferees, in authorized denominations and of the same maturity and aggregate
principal amount and bearing interest at the same rate as the Bond or Bonds so presented.
-9-
All Bonds shall be exchangeable upon presentation and surrender at the principal payment
office of the Paying Agent/Registrar in Dallas, Texas (or such other location as designated by the
Paying Agent/Registrar), for a Bond or Bonds of like maturity and interest rate and in any
authorized denomination, in an aggregate amount equal to the unpaid principal amount of the Bond
or Bonds presented for exchange. The Paying Agent/Registrar shall be and is hereby authorized
to authenticate and deliver exchange Bonds in accordance with the provisions of this Section. Each
Bond delivered in accordance with this Section shall be entitled to the benefits and security of this
Resolution to the same extent as the Bond or Bonds in lieu of which such Bond is delivered.
The Authority or the Paying Agent/Registrar may require the Owner of any Bond to pay a
sum sufficient to cover any tax or other governmental charge that may be imposed in connection
with the transfer or exchange of such Bond. Any fee or charge of the Paying Agent/Registrar for
such transfer or exchange shall be paid by the Authority.
Section 3.10. Cancellation of Bonds. All Bonds paid or redeemed in accordance with this
Resolution, and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated
and delivered in accordance herewith, shall be cancelled and destroyed upon the making of proper
records regarding such payment or redemption. The Paying Agent/Registrar shall furnish the
Authority with appropriate certificates of destruction of such Bonds.
Section 3.11. Mutilated Lost or Stolen Bonds. Upon the presentation and surrender to
the Paying Agent/Registrar of a mutilated Bond, the Paying Agent/Registrar shall authenticate and
deliver in exchange therefor a replacement Bond of like maturity, interest rate and principal
amount, bearing a number not contemporaneously outstanding. The Authority or the Paying
Agent/Registrar may require the Owner of such Bond to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith and any other expenses
connected therewith, including the fees and expenses of the Paying Agent/Registrar.
If any Bond is lost, apparently destroyed, or wrongfully taken, the Authority, pursuant to
the applicable laws of the State of Texas and in the absence of notice or knowledge that such Bond
has been acquired by a bona fide purchaser, shall authorize and the Paying Agent/Registrar shall
authenticate and deliver a replacement Bond of like maturity, interest rate and principal amount,
bearing a number not contemporaneously outstanding, provided that the Owner thereof shall have:
(1) furnished to the Authority and the Paying Agent/Registrar satisfactory evidence of
the ownership of and the circumstances of the loss, destruction or theft of such
Bond;
(2) furnished such security or indemnity as may be required by the Paying
Agent/Registrar and the Authority to save them harmless;
(3) paid 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 may be imposed; and
(4) met any other reasonable requirements of the Authority and the Paying
Agent/Registrar.
-10-
If, after the delivery of such replacement Bond, a bona fide purchaser of the original Bond
in lieu of which such replacement Bond was issued presents for payment such original Bond, the
Authority and the Paying AgentRegistrar shall be entitled to recover such replacement Bond from
the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser,
and shall be entitled to recover upon the security or indemnity provided therefor to the extent of
any loss, damage, cost or expense incurred by the Authority or the Paying Agent/Registrar in
connection therewith.
If any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or
is about to become due and payable, the Authority in its discretion may, instead of issuing a
replacement Bond, authorize the Paying Agent/Registrar to pay such Bond.
Each replacement Bond delivered in accordance with this Section shall be entitled to the
benefits and security of this Resolution to the same extent as the Bond or Bonds in lieu of which
such replacement Bond is delivered.
Section 3.12. Book -Entry System. (a) The Initial Bond shall be registered in the name of
TWDB. Except as provided in Section 3.14 hereof, all other Bonds shall be registered in the name
of Cede & Co., as nominee of DTC.
(b) With respect to Bonds registered in the name of Cede & Co., as nominee of DTC,
the Authority and the Paying Agent'Registrar shall have no responsibility or obligation to any DTC
participant or any person on whose behalf a DTC participant holds an interest in the Bonds.
Without limiting the immediately preceding sentence, the Authority and the Paying
Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the
records of DTC, Cede & Co., or any DTC participant with respect to any ownership interest in the
Bonds, (ii) the delivery to any DTC participant or any other person, other than a registered owner
of the Bonds, as shown on the Register, of any notice with respect to the Bonds, including any
notice of redemption, and (iii) the payment of any DTC participant or any other person, other than
a registered owner of the Bonds, as shown on the Register, of any amount with respect to principal
of or premium, if any, or interest on the Bonds. Notwithstanding any other provision of this
Resolution to the contrary, the Authority and the Paying Agent/Registrar shall be entitled to treat
and consider the person in whose name each Bond is registered in the Register as the absolute
Owner of such Bond for the purpose of payment of principal of and interest on the Bonds, for the
purpose of giving notices of redemption and other matters with respect to such Bond, for the
purpose of registering transfer with respect to such Bond, and for all other purposes whatsoever.
The Paying Agent/Registrar shall pay all principal of, premium, if any, and interest on the Bonds
only to or upon the order of the respective Owners, as shown in the Register as provided in this
Resolution, or their respective attorneys duly authorized in writing, and all such payments shall be
valid and effective to fully satisfy and discharge the Authority's obligations with respect to
payments of principal, premium, if any, and interest on the Bonds to the extent of the sum or sums
so paid. No person other than an Owner, as shown in the Register, shall receive a Bond Certificate
evidencing the obligation of the Authority to make payments of amounts due pursuant to this
Resolution. 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 of this Resolution with respect to interest checks being mailed to the Owner of record
as of the Record Date, the phrase "Cede & Co." in this Resolution shall refer to such new nominee
of DTC.
Section 3.13. Successor Securities Depository; Transfer Outside Book -Entry -Only
System. In the event that the Authority in its sole discretion, determines that the beneficial owners
of the Bonds be able to obtain certificated Bonds, or in the event DTC discontinues the services
described herein, the Authority 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, as identified by DTC, of the appointment of such successor securities
depository and transfer one or more separate Bonds to such successor securities depository or
(ii) notify DTC and DTC Participants, as identified by DTC, of the availability through DTC of
Bonds and transfer one or more separate Bonds to DTC Participants having Bonds credited to their
DTC accounts, as identified by DTC. In such event, the Bonds shall no longer be restricted to
being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be
registered in the name of the successor securities depository, or its nominee, or in whatever name
or names Owners transferring or exchanging Bonds shall designate, in accordance with the
provisions of this Resolution.
Section 3.14. Payments to Cede & Co. Notwithstanding any other provision of this
Resolution to the contrary, so long as any Bonds are registered in the name of Cede & Co., as
nominee of DTC, all payments with respect to principal of, premium, if any, and interest on such
Bonds, and all notices with respect to such Bonds, shall be made and given, respectively, in the
manner provided in the Blanket Letter of Representations.
Section 3.15. Redemption. The Bonds shall be subject to redemption prior to stated
maturity as provided in this Section.
(a) Optional Redemption. The Authority reserves the right to redeem Bonds maturing
on and after May 1, 2036, in whole or from time to time in part, in principal amounts of $5,000 or
any integral multiples thereof, before their respective scheduled maturity dates, on November 1,
2035, or on any date thereafter, at a redemption price equal to the principal amount thereof plus
accrued interest to the date of redemption.
(b) Partial Redemption.
(i) If less than all of the Bonds are to be redeemed pursuant to Section 3.15(a),
the Authority shall determine the maturities and the principal amount thereof to be
redeemed and shall direct the Paying Agent/Registrar to call by lot or any other customary
random selection method such Bonds for redemption.
(ii) A portion of a single Bond of a denomination greater than $5,000 may be
redeemed, but only in a principal amount equal to $5,000 or any integral multiple thereof.
The Paying Agent/Registrar shall treat each $5,000 portion of such Bond as though it were
a single Bond for purposes of selection for redemption.
(iii) Upon surrender of any Bond for redemption in part, the Paying
Agent/Registrar, in accordance with Section 3.9 of this Resolution, shall authenticate and
-12-
deliver exchange Bonds in an aggregate principal amount equal to the unredeemed
principal amount of the Bond so surrendered, such exchange being without charge.
(c) Notice of Redemption to Owners.
(i) The Paying Agent/Registrar shall give notice of any redemption of Bonds
by sending notice by United States mail, first class, postage prepaid, not less than thirty
(30) days before the date fixed for redemption, to the Owner of each Bond (or part thereof)
to be redeemed, at the address shown on the Register at the close of business on the
Business Day next preceding the date of mailing such notice.
(ii) The notice shall state the redemption date, the redemption price, the place
at which the Bonds are to be surrendered for payment, and, if less than all the Bonds
outstanding are to be redeemed, an identification of the Bonds or portions thereof to be
redeemed.
(iii) The Authority reserves the right to give notice of its election or direction to
redeem Bonds under Section 3.15(a) conditioned upon the occurrence of subsequent
events. Such notice may state (A) 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 (B) that the Authority retains the right to
rescind such notice at any time prior to the scheduled redemption date if the Authority
delivers a certificate of the Authority 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 Bonds subject to
conditional redemption where redemption has been rescinded shall remain outstanding.
(iv) 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.
ARTICLE IV
FORM OF BOND AND CERTIFICATES
Section 4.1. Forms. The form of the Bond, including the form of the Paying
Agent/Registrar's Authentication Certificate, the form of Assignment, and the form of Registration
Certificate of the Comptroller shall be, respectively, substantially as follows, with such additions,
deletions and variations as may be necessary or desirable and not prohibited by this Resolution:
-13-
(a) Form of Bond.
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF HARRIS AND CHAMBERS
NUMBER AMOUNT
REGISTERED REGISTERED
BAYTOWN AREA WATER AUTHORITY
WATER SUPPLY CONTRACT REVENUE BOND
SERIES 2025
(CITY OF BAYTOWN PROJECT)
INTEREST RATE: MATURITY DATE: CLOSING DATE: CUSIP NO.:
QMay 1, 20 November 14, 2025
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
THE BAYTOWN AREA WATER AUTHORITY (herein the "Authority"), a political
subdivision of the State of Texas for value received, promises to pay, but solely from certain
Pledged Revenues as hereinafter provided, to the Registered Owner identified above or registered
assigns, on the Maturity Date specified above, upon presentation and surrender of this Bond to
BOKF, NA (the "Paying Agent/Registrar") at its principal payment office in Dallas, Texas (or
such other location designated by the Paying Agent/Registrar), the principal amount identified
above, in any coin or currency -of the United States of America which on the date of payment of
such principal is legal tender for the payment of debts due the United States of America, and to
pay, solely from such Pledged Revenues, interest thereon at the rate shown above, calculated on
the basis of a 360-day year of twelve 30-day months, from the later of the Closing Date identified
above, or the most recent interest payment date to which interest has been paid or duly provided
for. The date of this Bond is November 1, 2025, but interest shall accrue on the principal amount
hereof from the Closing Date. Interest on this Bond is payable by check on May 1 and November 1
beginning on May 1, 2026, mailed to the registered owner as shown on the books of registration
kept by the Paying Agent/Registrar as of the fifteenth day of the month next preceding each interest
payment date.
THIS BOND IS ONE OF A SERIES of fully registered bonds specified in the title hereof,
issued in the aggregate principal amount of $69,000,000, pursuant to a resolution adopted by the
Board of Directors of the Authority (the "Resolution"), for the purposes of making, purchasing,
constructing, leasing or otherwise acquiring, enlarging, expanding, and modifying the Project,
including (i) the design, construction, acquisition and equipment of expansion of the Authority's
East Surface Water Treatment Plant and related infrastructure, and (ii) paying the costs of issuing
-14-
the Bonds, under and in strict conformity with the Constitution and laws of the State of Texas,
particularly Chapter 8104, Texas Special District Local Laws Code,
THIS BOND AND THE SERIES OF WHICH IT IS A PART are special obligations of
the Authority that are payable, together with the Authority's outstanding Water Supply Contract
Revenue and Refunding Bonds, Series 2012 (City of Baytown Project), Water Supply Contract
Revenue and Refunding Bonds, Series 2018 (City of Baytown Project), Water Supply Contract
Revenue and Refunding Bonds, Series 2019 (City of Baytown Project), and Water Supply Contract
Revenue Bonds, Series 2024 (City of Baytown Project) (the "Outstanding Bonds"), from and
secured by an irrevocable first lien on and pledge of payment equal to the principal of, premium,
if any, and interest on the Bonds and the Outstanding Bonds (the "Pledged Revenues") to be made
to the Authority by the City of Baytown, Texas (the "City"), under a contract which
unconditionally obligates the City to make such payments. No owner of the Bonds shall ever have
the right to demand payment of the Bonds from funds derived or to be derived from taxation or
from any revenues of the Authority other than the Pledged Revenues.
THE AUTHORITY HAS RESERVED THE RIGHT to issue additional parity revenue
bonds, subject to the restrictions contained in the Resolution, which may be equally and ratably
payable from, and secured by a first lien on and pledge of, the Pledged Revenues in the same
manner and to the same extent as this Bond and the series of which it is a part.
THE AUTHORITY RESERVES THE RIGHT to redeem Bonds maturing on and after
May 1, 2035, prior to their scheduled maturities, in whole or from time to time in part, in integral
multiples of $5,000, on November 1, 2035, or any date thereafter at par plus accrued interest on
the principal amounts called for redemption to the date fixed for redemption. If less than all of the
Bonds are to be redeemed, the Authority shall determine the maturities and the principal amount
thereof to be redeemed and shall direct the Paying Agent/Registrar to call by lot or any other
customary random selection method such Bonds for redemption. Reference is made to the
Resolution for complete details concerning the manner of redeeming the Bonds.
NOT LESS THAN THIRTY (30) DAYS prior to a redemption date for the Bonds, the
Authority shall cause a notice of redemption to be sent by United States mail, first class, postage
prepaid, to the Owners of the Bonds to be redeemed at the address of the Owner appearing on the
registration books of the Paying Agent/Registrar at the close of business on the business day next
preceding the date of mailing such notice.
IN THE RESOLUTION, THE AUTHORITY RESERVES THE RIGHT, in the case of an
optional redemption, to give notice of its election or direction to redeem Bonds conditioned upon
the occurrence of subsequent events. Such notice may state (i) that the redemption is conditioned
upon the deposit of moneys and/or authorized securities, in an amount equal to the amount
necessary to effect the redemption, with the Paying Agent/Registrar, or such other entity as may
be authorized by law, no later than the redemption date, or (ii) that the Authority retains the right
to rescind such notice at any time on or prior to the scheduled redemption date if the Authority
delivers a certificate of the Authority 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
-15-
of redemption to the affected Owners. Any Bond subject to conditional redemption for which such
redemption has been rescinded shall remain outstanding.
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 Authority in the
notice, the Bonds called for redemption shall become due and payable on the specified redemption
date, and notwithstanding that any Bond or portion thereof has not been surrendered for payment,
interest on such Bonds or portions thereof shall cease to accrue.
THIS BOND IS TRANSFERABLE only upon presentation and surrender at the principal
payment office of the Paying Agent., -'Registrar in Dallas, Texas (or such other location designated
by the Paying Agent/Registrar) duly endorsed for transfer or accompanied by an assignment duly
executed by the registered .owner or his authorized representative, subject to the terms and
conditions of the Resolution.
THIS BOND IS EXCHANGEABLE at the principal payment office of the Paying
Agent/Registrar in Dallas, Texas, for Bonds in the principal denomination of $5,000 or any integral
multiple thereof, subject to the terms and conditions of the Resolution.
THE BOND SHALL NOT BE VALID OR OBLIGATORY for any purpose or be entitled
to any benefit under the Resolution unless this Bond is either (i) registered by the Comptroller of
Public Accounts of the State of Texas by registration certificate attached or affixed hereto or
(ii) authenticated by the Paying AgenvRegistrar by due execution of the authentication certificate
endorsed hereon.
THE REGISTERED OWNER OF THIS BOND, by acceptance hereof, acknowledges and
agrees to be bound by all the terms and conditions of the Resolution.
THE AUTHORITY HAS COVENANTED in the Resolution that it will at all times provide
a legally qualified Paying Agent: -Registrar for the Bonds and will cause notice of any changes of
Paying Agent -Registrar to be mailed to each registered owner.
IT IS HEREBY CERTIFIED, RECITED AND COVENANTED that this Bond has been
duly and validly issued and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and be done precedent to or in the issuance and delivery of this Bond have been
performed, existed, and been done in accordance with law; that this Bond and the series of which
it is a part do not exceed any statutory limitation; and that provision has been made for the payment
of the principal of and interest on this Bond and all of the Bonds by the creation of the aforesaid
lien on and pledge of the Pledged Revenues.
IN WITNESS WHEREOF, the Authority has caused this Bond to be duly executed under
its offs ial seal in accordance with,law. �%%t
fi
renda Bradley Smith Angela J son Z
President, Board of Directors Assistant ecretary o
Baytown Area Water Authority Baytown Area Water AfR ri Y
S -a �`�
'
[SEAL]
(b) Form of Registration Certificate.
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
[Acting] Comptroller of Public Accounts
of the State of Texas
(SEAL)
(c) Form of Authentication Certificate.
AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been delivered pursuant to the Resolution described
in the text of this Bond.
BOKF, NA,
As Paying Agent/Registrar
LIM
Authorized Signature
Date of Authentication
-17-
(d) Form of Assignment.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns, and transfers unto
(Please print or type name, address, and zip code of Transferee)
(Please insert Social Security or Taxpayer Identification Number of Transferee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer said Bond on the
books kept for registration thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature must be guaranteed
by a member firm of the New York Stock
Exchange or a commercial bank or trust
company.
Registered Owner
NOTICE: The signature above must correspond
to the name of the registered owner as shown
on the face of this Bond in every particular,
without any alteration, enlargement or change
whatsoever.
(e) The Initial Bond 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 Bond, the headings
"INTEREST RATE" and "MATURITY DATE" shall both be
completed with the words "As Shown Below" and the word
"CUSIP" deleted;
(ii) in the first paragraph of the Bond, the words "on the Maturity
Date specified above" and "at the rate shown above" shall be deleted
and the following shall be inserted at the end of the first sentence
"..., with such principal to be paid in installments on May 1 in each
of the years and in the principal amounts identified in the following
schedule and with such installments bearing interest at the per
annum rates set forth in the following schedule:
[Information to be inserted from schedule in Section 3.3]
(iii) the Initial Bond shall be numbered I-1.
Section 4.2. CUSIP Numbers. CUSIP Numbers may be printed on the Bonds, but errors
or omissions in the printing of such numbers shall have no effect on the validity of the Bonds.
-18-
Section 4.3. Further Proceedings. After the Initial Bond has been executed, it shall be
the duty of the President of the Board and other appropriate officials and agents of the Authority
to deliver the Initial Bond and all pertinent records and proceedings to the Attorney General of the
State of Texas for examination and approval. After the Initial Bond has been approved by the
Attorney General, it shall be delivered to the Comptroller for registration. Upon registration of
the Initial Bond, the Comptroller (or the Comptroller's bond clerk or an assistant bond clerk
lawfully designated in writing to act for the Comptroller) shall manually sign the Comptroller's
Registration Certificate prescribed herein and the seal of said Comptroller shall be impressed, or
placed in facsimile, thereon.
ARTICLE V
SECURITY AND SOURCE OF PAYMENT FOR ALL PARITY BONDS
Section 5.1. Pledge, Special Obligations. All Parity Bonds shall be payable from and
secured by an irrevocable first lien on and pledge of the Pledged Revenues. The Authority hereby
covenants to maintain rates and charges to the City pursuant to the Baytown Contract in amounts
sufficient to provide Pledged Revenues to meet the debt service requirements on the Bonds and
the Outstanding Bonds. The Authority reserves the right, at the option of the Authority exercised
through the adoption of official action by the Board, to add any additional revenues, income,
receipts, or other resources, including without limitations, any grants, donations, or income
received or to be received from the United States Government, or any other public or private
source, whether pursuant to an agreement or otherwise, to the definition of Pledged Revenues.
The Bonds and the Outstanding Bonds are special obligations of the Authority payable
solely from the sources described above, and no Owner shall ever have the right to demand
payment of the Bonds from funds derived or to be derived from taxation or from any revenues of
the Authority other than the Pledged Revenues.
Section 5.2. Project Fund.
(a) Immediately after the sale and delivery of the Bonds, the Authority shall deposit
into a separate and special fund called the "Baytown Area Water Authority Water Supply Contract
Revenue Bonds, Series 2025 (City of Baytown Project) Project Fund" (the "Project Fund"), the
amount specified in Section 7.2 of this Resolution. The Project Fund shall be established, drawn
on, and used by the Authority to pay Project Costs.
(b) Any moneys held as part of the Project Fund shall be invested and reinvested in
accordance with the laws of the State and the Authority's investment policy. All interest and
realized profit from such investment shall be used to pay Project Costs or may be transferred and
deposited in the Debt Service Fund if so directed by the Authority.
(c) After completion of the Project, any proceeds of the Bonds remaining in the Project
Fund shall be deposited into the Debt Service Fund.
Section 5.3. Debt Service Fund. Immediately after the sale and delivery of the Bonds,
the Authority shall deposit into a separate and special fund called the `Baytown Area Water
Authority Water Supply Contract Revenue Bonds, Series 2025 (City of Baytown Project) Debt
-19-
Service Fund" (the "Debt Service Fund"), the accrued interest, if any, on the Bonds to the date of
delivery. All payments by the City of Pledged Revenues shall be deposited directly into the
appropriate debt service fund for the Bonds and the Outstanding Bonds.
The establishment of separate debt service funds for each issue of Parity Bonds is for
administrative convenience only. The Parity Bonds are on a parity with and of equal dignity with
one another and are equally and ratably payable from the Pledged Revenues.
All money from time to time deposited and held in the Debt Service Fund shall be held in
trust by the Paying Agent/Registrar for the benefit of the Bond owners and used to pay, or cause
to be paid, the principal of and interest on the Bonds.
Section 5.4. Payment of Pledged Revenues. Under the terms of the Baytown Contract,
by approving the issuance of the Bonds and the terms and conditions of this Resolution, the City
has absolutely and unconditionally obligated itself and agreed to make the following payments to
the Authority in immediately available funds:
(1) On or before December 1, 2025, and on or before the first day of each month
thereafter, such amounts, in approximately equal monthly installments, as
will be sufficient, together with any other amounts available therefor in the
Debt Service Fund, to pay the interest which shall become due on the Bonds
on the next succeeding interest payment date; and
(2) On or before December 1, 2025, and on or before the first day of each month
thereafter, such amounts, in approximately equal monthly installments, as
will be sufficient, together with any other amounts available therefor in the
Debt Service Fund, to pay the principal which shall become due on the
Bonds on the next succeeding principal payment date.
Section 5.5. Investment of Funds. Money in the Project Fund and the Debt Service Fund
may, at the option of the Authority, be invested in any investments authorized by Texas law,
including, particularly, the Public Funds Investment Act, Texas Government Code, Chapter 2256,
and the Public Funds Collateral Act, Texas Government Code, Chapter 2257, and the Authority's
investment policy, including through a guaranteed investment contract as authorized by Section
2256.015 of the Government Code; provided that all such investments shall be made in such a
manner that the money required to be expended from the Project Fund or Debt Service Fund will
be available at the proper time or times.
Section 5.6. Security for Uninvested Funds. So long as any Bonds remain outstanding,
all uninvested money on deposit in, or credited to, the Project Fund and the Debt Service Fund
shall be secured by the pledge of security, as provided by Texas law, including, particularly, the
Public Funds Collateral Act, Texas Government Code, Chapter 2257.
-2 tl-
ARTICLE VI
ADDITIONAL BONDS
Section 6.1. Additional Bonds. In addition to the right to issue inferior lien obligations,
the Authority reserves the right, upon the request of the City, to issue Additional Bonds in such
amounts as are required for the purpose of acquiring funds to (i) complete making, purchasing,
constructing, leasing, or acquiring the Project, (ii) enlarge, expand, or modify the Project,
(iii) reconstruct the Project, or (iv) refund any Bonds, Outstanding Bonds, or Additional Bonds,
The Additional Bonds when issued and delivered, shall be payable from and secured by a first lien
on and pledge of the Pledged Revenues (which shall include additional payments sufficient to
enable the Authority to comply with all terms and conditions of the Resolution authorizing the
issuance of such Additional Bonds), in the same manner and to the same extent as the Outstanding
Bonds and the Bonds; and the Bonds, the Outstanding Bonds, and any Additional Bonds shall be
in all respects on a parity and of equal dignity.
No such installment or series of Additional Bonds shall be issued unless:
(1) A certificate is executed by the President and Secretary or Assistant
Secretary of the Board to the effect that no default exists in
connection with any covenants or requirements of the Bonds,
Outstanding Bonds, or Additional Bonds, if any, and that the Debt
Service Fund contains the amount then required to be on deposit
therein;
(2) The City is not in default with respect to any series of bonds or other
debt issued by it; and
(3) The principal of any such installment or series of Additional Bonds
is payable on May 1, and interest is payable on May 1 and
November 1.
ARTICLE VII
PROVISIONS CONCERNING SALE, ESCROW AGREEMENT APPLICATION OF
PROCEEDS OF BONDS
Section 7. 1. Sale of Bonds Private Placement Memorandum.
('a) The Bonds are hereby officially sold and awarded to the TWDB (the "Purchaser")
at a price equal to the principal amount thereof pursuant to the terms of the commitment issued by
the Purchaser. It is hereby officially found, determined and declared that the terms of this sale are
the most advantageous reasonably available. The Bonds shall initially be registered in the name of
such Purchaser, or its designee.
(b) The farm and substance of the Private Placement Memorandum for the Bonds dated
October 9, 2025, a form of which is attached hereto as Exhibit A, with such changes as may be
approved by the General Manager of the Authority or his designee and any addenda, supplement
-2 l -
or amendment thereto (the "Private Placement Memorandum"), are hereby in all respects approved
and adopted. The proper officials of the Authority are hereby authorized to execute such Private
Placement Memorandum.
(c) The President of the Board, the General Manager of the Authority and all other
officers of the Authority are authorized to take such actions, to obtain such consents or approvals
and to execute such documents, certificates and receipts, and to make such elections pertaining to
the tax-exempt status of the Bonds as they may deem necessary and appropriate in order to
consummate the delivery of the Bonds, to pay the costs of issuance of the Bonds, and to effectuate
the terms and provisions of the Resolution.
Section 7.2. Approval of the Escrow Agreement. The Escrow Agreement, in
substantially the form attached hereto as Exhibit B, and the terms and provisions thereof, are
hereby approved. The execution and delivery of the Escrow Agreement by the President of the
Board and the attestation of the President's signature by the Secretary or Assistant Secretary of the
Board are hereby authorized and approved.
Section 7.3. Deposit of Proceeds; Transfer of Funds. Proceeds from the sale of the
Bonds, together with other funds of the Authority, if any, shall, promptly upon receipt by the
Authority, be applied as follows:
(a) Pursuant to written instructions from Hilltop Securities Inc., the Authority's
Financial Advisor, on the Closing Date the Paying Agent/Registrar shall pay from the proceeds of
the Bonds received on the Closing Date an amount sufficient to pay the costs of issuance for the
Bonds, unless such amounts are required to be deposited in escrow pursuant to the requirements
of the TWDB. To the extent that such amount is not required or used for such purpose, any excess
shall be deposited to the Escrow Fund.
(b) After giving effect to the payment required in subsection (a), the remaining
Proceeds of the Bonds shall be deposited to the "Escrow Fund" (as defined in the Escrow
Agreement), and, to the extent directed in writing by the TWDB, the Project Fund. Moneys
deposited to the Escrow Fund shall be applied as provided in the Escrow Agreement. For the
purposes of the Resolution, the Escrow Fund shall be treated as a subaccount of the Project Fund.
ARTICLE VIII
FEDERAL INCOME TAX MATTERS
Section 8.1. General. The Authority covenants not to take any action or omit to take any
action, that if taken or omitted, would cause the interest on the Bonds to be includable in gross
income for federal income tax purposes. In furtherance thereof, the Authority covenants to comply
with sections 103 and 141 through 150 of the Code and the provisions set forth in the Federal Tax
Certificate executed by the Authority in connection with the Bonds.
Section 8.2. No Private Activity Bonds. The Authority covenants that it will use the
proceeds of the Bonds (including investment income) and the property financed, directly or
indirectly, with such proceeds so that the Bonds will not be "private activity bonds" within the
meaning of section 141 of the Code. Furthermore, the Authority will not take a deliberate action
-22-
(as defined in section 1.141-2(d)(3) of the Regulations) that causes the Bonds to be "private activity
bonds" unless it takes a remedial action permitted by section 1.141-12 of the Regulations.
Section 8.3. No Federal Guarantee. The Authority covenants not to take any action or
omit to take any action that, if taken or omitted, would cause the Bonds to be "federally
guaranteed" within the meaning of section 149(b) of the Code, except as permitted by section
149(b)(3) of the Code.
Section 8.4. No Hedge Bonds. The Authority covenants not to take any action or omit
to take any action that, if taken or omitted, would cause the Bonds to be "hedge bonds" within the
meaning of section 149(g) of the Code.
Section 8.5. No -Arbitrage Bonds. The Authority covenants that it will make such use
of the proceeds of the Bonds (including investment income) and regulate the investment of such
proceeds of the Bonds so that the Bonds will not be "arbitrage bonds" within the meaning of
section 148(a) of the Code.
Section 8.6. Required Rebate. The Authority covenants that, if the Authority does not
qualify for an exception to the requirements of section 148(f) of the Code, the Authority will
comply with the requirement that certain amounts earned by the Authority on the investment of
the gross proceeds of the Bonds, be rebated to the United States.
Section 8.7. Information Reporting. The Authority covenants to file or cause to be riled
with the Secretary of the Treasury an information statement concerning the Bonds in accordance
with section 149(e) of the Code.
Section 8.8. Record Retention. The Authority will retain all material records relating to
the expenditure of the proceeds (including investment income) of the Bonds until three years after
the Iast Bond is redeemed or paid at maturity (or such other period as provided by subsequent
guidance issued by the Department of Treasury) in a manner that ensures their complete access
throughout such retention period.
Section 8.9. Registration. If the Bonds are "registration -required bonds" under section
149(a)(2) of the Code, the Bonds will be issued in registered form.
Section 8.10. Favorable Opinion of Bond Counsel. Notwithstanding the foregoing, the
Authority will not be required to comply with any of the federal tax covenants in this Section 8.04
if the Authority has received an opinion of nationally recognized bond counsel that such
noncompliance will not adversely affect the excludability of interest on the Bonds from gross
income for federal income tax purposes.
Section 8.11. Continuing Compliance. Notwithstanding any other provision of this
Resolution, the Authority's obligations under the federal tax covenants set forth above will survive
the defeasance and discharge of the Bonds for as long as such matters are relevant to the
excludability of interest on the Bonds from gross income for federal income tax purposes.
Section 8.12. Official Intent. For purposes of section 1.150-2(d) of the Regulations, to
the extent that an official intent to reimburse by the Authority has not been adopted for a particular
-23-
project, this Resolution serves as the Authority's official declaration of intent to use proceeds of
the Bonds to reimburse itself from proceeds of the Bonds issued in the maximum amount
authorized by this Resolution for certain expenditures paid in connection with the projects set forth
herein. Any such reimbursement will only be made (i) for an original expenditure paid no earlier
than 60 days prior to the date hereof and (ii) not later than 18 months after the later of (A) the date
the original expenditure is paid or (B) the date of with the project to which such expenditure relates
is placed in service or abandoned, but in no event more than three years after the original
expenditure is paid.
ARTICLE IX
SPECIAL PROVISIONS RELATING TO THE TWD132
Section 9.1. Application of Article V. The provisions of this Article shall apply so long
as the Bonds, or any of them, are owned by the TWDB.
Section 9.2. Covenant to Abide with Rules. The Authority will abide with all applicable
laws of the State of Texas and Rules of the TWDB relating to the loan of funds evidenced by the
Bonds and the Project.
Section 9.3. Tax Covenant.
(a) The Authority will not take, or omit to take, any action, which action or omission
would adversely affect the excludability for federal income tax purposes of interest payable on the
Bonds or on any series of bonds issued by the TWDB.
(b) Neither the Authority nor a related party thereto will acquire any of the TWDB's
Source Series Bonds in an amount related to the amount of the Bonds to be acquired from the
Authority by the TWDB.
Section 9.4. As -Built Plans: Final Accounting and Report on HUBS.
(a) Upon completion of the Project, the Authority (a) will provide to the Executive
Administrator of the TWDB a complete set of as -built drawings and (b) shall render a final
accounting of the cost of the Project to the TWDB. In addition, the Authority shall report to the
TWDB the amount of Project funds, if any, that were used to compensate historically underutilized
businesses that worked on the Project, in accordance with 31 TAC, Section 363.42(c)(1).
(b) In accordance with the rules and regulations of the TWDB, any surplus moneys
remaining after completion of the Project may be used for the following purposes as approved by
the Executive Administrator: (a) to redeem, in inverse order of maturity, the Bonds owned by the
TWDB; (b) deposited into the Interest and Sinking Fund for payment of interest or principal on
the Bonds owned by the TWDB or (c) for eligible project costs as authorized by the Executive
Administrator.
' To be updated based on TWDB requirements. Preliminary, subject to change.
-24-
Section 9.5. Compliance with Environmental Finding. The Authority shall comply with
all conditions as specified in the final environmental finding of the Executive Administrator when
issued, including the standard emergency discovery conditions for threatened and endangered
species and cultural resources.
Section 9.6. Environmental Indemnification. The Authority shall not use proceeds from
the sale of the Bonds for sampling, testing, removing or disposing of contaminated soils and/or
media at the Project site. To the extent permitted by Iaw, the Authority agrees to indemnify, hold
harmless and protect the TWDB from any and all claims, causes of action or damages to the person
or property of third parties arising from the sampling, analysis, transport, storage, treatment,
recycling and disposition of any contaminated sewage sludge, contaminated sediments and/or
contaminated media that may be generated by the Authority, its contractors, consultants, agents,
officials and employees as a result of activities relating to the Project.
Section 9.7. Annual Audit. The Authority will furnish a copy of each annual audit,
prepared in accordance with generally accepted accounting principles (GAAP), to the TWDB,
Attention: Executive Administrator, not later than 180 days following the close of the Fiscal Year.
The Baytown Contract provides that upon the Authority's receipt of a request from the Executive
Administrator of the TWDB, the City will furnish a copy of each annual audit, prepared in
accordance with generally accepted accounting principles (GAAP), to the TWDB.
Section 9.8. Remedies. Notwithstanding any other provisions of this Resolution, the
TWDB may exercise all remedies available to it in law or equity, and any provision of the Bonds
or Resolution that restricts or limits the TWDB's full exercise of these remedies shall be of no
force and effect.
Section 9.9. Insurance Covenant. The Authority will maintain adequate insurance
coverage customarily maintained by municipal corporations on the projects such as those financed
with the proceeds of the Bonds in amounts adequate to protect the TWDB's interest.
Section 9.10. Conveyance of Bonds. Prior to any action by the Authority to convey its
Bonds held by the TWDB to another entity, the conveyance and assumption of the Bonds must be
approved by the TWDB.
Section 9.11. Use of Iron and Steel Products. The Authority covenants that it will abide
by all applicable construction contract requirements related to the use of iron and steel products
produced in the United States, as required by as required by Chapter 2252, Subchapter G, Texas
Government Code, and Section 17,183, Texas Water Code.
Section 9.12. Rating Requirement. The Authority will maintain one or more ratings by a
nationally -recognized statistical rating agency on bonds issued under the Resolution for so long as
the Bonds remain outstanding.
Section 9.13. Notice of Suit by the Attorney General of the State of Texas. The Authority
shall promptly notify TWDB in writing of any suit against it by the Attorney General of the State
of Texas under Section 2.103, Texas Government Code, and Section 1.10(f), Texas Penal Code,
related to federal laws regulating firearms, firearm accessories, and firearm ammunition.
-2 5 -
Section 9.14. Enforcement of Projects Contract and Operating Contract. The Authority
shall maintain and enforce the Projects Contract and Operating Contract so that revenues paid to
the Authority by the City are sufficient to meet the revenue requirements of the Authority's
operation of the facilities financed and operated under such agreements.
Section 9.15. Additional Requirement for Parity Obligations. The Authority may not
issue additional Parity Obligations unless the Authority demonstrates to the Executive
Administrator's satisfaction that the Pledged Revenues will be sufficient for the repayment of the
proposed Parity Obligations and any outstanding Parity Obligations. For the avoidance of doubt,
such demonstration may be made by means including, but not limited to, contractual provisions
obligating the City to make payments under the Projects Contract like those included in Article V
of the Baytown Contract.
ARTICLE X
DISCHARGE
Section 10.1. Discharge. The Bonds may be refunded, discharged or defeased in any
manner now or hereafter permitted by applicable law.
ARTICLE XI
CONTINUING DISCLOSURE UNDERTAKING OF THE AUTHORITY
Section 11.1. Annual Reports.
(a) The Authority will provide certain updated financial information and operating data
to the MSRB annually in an electronic format as prescribed by the MSRB. The information to be
updated by the is the audited financial statements of the Authority, if audited financial statements
are then available. The Authority will update and provide this information within six (6) months
of the end of its fiscal years ending in and after 2025. Financial statements so to be provided shall
be prepared in accordance with the accounting principles described in the notes to the financial
statements for the most recently concluded Fiscal Year, and audited, if the Authority 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, the
Authority shall provide unaudited financial statements for such Fiscal Year to the MSRB.
Thereafter, when and if audited financial statements become available, the Authority shall provide
such audited financial statements as required to the MSRB.
(b) If the Authority changes its Fiscal Year, it will notify the MSRB of the change (and
of the date of the new Fiscal Year end) prior to the next date by which the Authority otherwise
would be required to provide financial information and operating data pursuant to this Section.
(c) The financial information and operating data to be provided pursuant to this Section
may be set forth in full in one or more documents or may be included by specific reference to any
document, including an official statement or other offering document, if it is available from the
MSRB, that theretofore has been provided to the MSRB or filed with the SEC.
-2 6-
Section 11.2. Event Notices.
(a) The Authority shall provide the following to the MSRB, in an electronic format as
prescribed by the MSRB, in a timely manner not in excess of ten (10) business days after the
occurrence of the event, notice of any of the following events with respect to the Bonds:
(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults, if material;
(3) Unscheduled draws on debt service reserves reflecting financial difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial difficulties;
(5) Substitution of credit or liquidity providers, or their failure to perform;
(6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or
final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB)
or other material notices or determinations with respect to the tax status of the
Bonds, or other material events affecting the tax status of the Bonds;
(7) Modifications to rights of the holders of the Bonds, if material;
(8) Bond calls, if material, and tender offers;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the Bonds, if
material;
(11) Rating changes;
(12) Bankruptcy, insolvency, receivership or similar event of the Authority;
Note to paragraph 12: For the purposes of the event identified in paragraph
12 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 the
Authority 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 Authority, 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 Authority.
-27-
(13) The consummation of a merger, consolidation, or acquisition involving the
Authority or the sale of all or substantially all of the assets of the Authority, 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;
(14) Appointment of a successor or additional trustee or the change of name of a trustee,
if material;
(15) Incurrence of a Financial Obligation of the City, if material, or agreement to
covenants, events of default, remedies, priority rights, or other similar terms of a
Financial Obligation of the City, any of which affect security holders, if material;
and
(16) 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.
Note to paragraphs (.15)-and (16): For purposes of the events identified in
paragraphs (15) and (16) of this section and in the definition of Financial Obligation
in Section 1.1, the Authority intends the words used in such paragraphs to have the
meanings ascribed to them in SEC Release No. 34-83885 dated August 20, 2018
(the "2018 Release") and any further written guidance provided by the SEC or its
staff with respect to the amendments to the Rule effected by the 2018 Release.
(b) The Authority shall provide to the MSRB, in an electronic format as prescribed by
the MSRB, in a timely manner, notice of a failure by the Authority to provide required annual
financial information in accordance with Section 11.1 above. All documents provided to the
MSRB pursuant to this section shall be accompanied by identifying information as prescribed by
the MSRB.
Section 11.3. Limitations Disclaimers and Amendments.
(a) The Authority shall be obligated to observe and perform the covenants specified in
this Article for so long as, but only for so long as, the Authority remains an "obligated person"
with respect to the Bonds within the meaning of the Rule, except that the Authority in any event
will give notice of any bond calls and any defeasances that cause the Authority to be no longer an
"obligated person."
(b) The provisions of this Article are for the sole benefit of the Owners and beneficial
owners of the Bonds, and nothing in this Article, express or implied, shall give any benefit or any
legal or equitable right, remedy, or claim hereunder to any other person. The Authority undertakes
to provide only the financial information, operating data, financial statements, and notices which
it has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide
any other information that may be relevant or material to a complete presentation of the Authority'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 Authority
-28-
does not make any representation or warranty concerning such information or its usefulness to a
decision to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE AUTHORITY BE LIABLE TO THE
OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN
CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM
ANY BREACH BY THE AUTHORITY, 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.
(c) No default by the Authority in observing or performing its obligations under this
Article shall constitute a breach of or default under the Resolution for purposes of any other
provisions of this Resolution.
(d) Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit
the duties of the Authority under federal and state securities laws.
(e) The provisions of this Article may be amended by the Authority 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 Authority, but only if (i) the
provisions of this Article, as so amended, would have permitted an underwriter to purchase or sell
Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any
amendments or interpretations of the Rule to the date of such amendment, as well as such changed
circumstances, and (ii) either (A) the Owners of a majority in aggregate principal amount (or any
greater amount required by any other provisions of this Resolution that authorizes such an
amendment) of the Outstanding Bonds consent to such amendment or (B) an entity or individual
person that is unaffiliated with the Authority (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 provisions of this Article may also be amended from time to
time or repealed by the Authority 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 Authority's right to do so would not prevent underwriters of the
initial public offering of the Bonds from lawfully purchasing or selling Bonds in such offering. If
the Authority so amends the provisions of this Article, it shall include with any amended financial
information or operating data next provided in accordance with Section 10.1 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 XII
CONTINUING DISCLOSURE UNDERTAKING OF THE CITY
Section 12.1. Annual Reports. The City will provide annually to the Municipal Securities
Rulemaking Board (the "MSRB") (i) within six (6) months after the end of each fiscal year ending
in or after 2025, audited financial statements of the City, if audited financial statements are then
-29-
available, or (ii) if audited financial statements of the City are not then available, audited financial
statements of the City, when and if available, but not later than 12 months after any such fiscal
year end of the City. Financial statements so to be provided shall be prepared in accordance with
the accounting principles described in the notes to the financial statements for the most recently
concluded Fiscal Year, and 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, the City shall provide unaudited financial
statements for such 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.
If the City changes its fiscal year, the City will notify the MSRB of the change (and of the date of
the new fiscal year end) prior to the next date by which the City otherwise would be required to
provide financial information and operating data pursuant to this Article XII.
The financial information and operating data to be provided pursuant to this Article XII 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, if it is available from the
MSRB, that theretofore has been provided to the MSRB or filed with the SEC. The financial
information or operating data shall be provided in an electronic format as prescribed by the MSRB.
The term "Fiscal Year," as used in this Article XII, shall mean the fiscal year of the City as set
from time to time by the Council.
ARTICLE XIII
MISCELLANEOUS
Section 13.1. Related Matters. To satisfy in a timely manner all of the Authority's
obligations under this Resolution, the President of the Board, the Vice President of the Board, the
Secretary of the Board, the Assistant Secretary of the Board and all other appropriate officers and
agents of the Authority are hereby authorized and directed to do any and all things necessary and/or
convenient to carry out the terms and purposes of this Resolution.
Section 13.2. Changes to Resolution. The Authorized Officer, in consultation with Bond
Counsel, is hereby authorized to make changes to the terms of this Resolution if necessary or
desirable to carry out the purposes hereof or in connection with the approval of the Bonds by the
Attorney General of Texas.
Section 13.3. Severability. If any Section, paragraph, clause or provision of this
Resolution 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 Resolution.
Section 13.4. Amendment to Baytown Contract. The Contract Amendment is hereby
approved in substantially the form presented to the Board, with such changes as may be approved
by the President of the Board, with such approval evidenced by her execution of the Contract
-30-
Amendment, and the President of the Board is hereby authorized and directed to execute and
deliver, and the Secretary of the Board or other appropriate official of the Authority is authorized
to attest, the Contract Amendment.
Section 13.5. 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 Board or agent or employee of Board or of the Authority in his or her individual
capacity; and neither the members of Board nor any officer thereof, nor any agent or employee of
Board or of the Authority, shall be liable personally on the Bonds, or be subject to any personal
liability or accountability by reason of the issuance thereof.
Section 13.6. Open Meeting. It is hereby officially found and determined that the meeting
at which this Resolution was adopted was open to the public, and that public notice of the time,
place and purpose of said meeting was given, all as required by the Texas Open Meetings Act.
Section 13.7. Effective Date. This Resolution shall become effective immediately upon
passage by the Board and approval by the Authority.
[Signature Page Follows]
-11-
INTRODUCED, READ and PASSED, by the affirm tive vote of the Board of Directors
of the Baytown Area Water Authority this the day of �� 6ae,2025.
— lkll-t�
B . nda Bradley Smith, President
ATTEST:
Angela Jac on, Assistant Secretary
`,tjkIIIlltt/�'
�JONAT�R
APPROVED AS 10 FORM:
Scott Lemon VGetie'r—al Counsel
Signature Page to Resolution Authorizing Baytown Area Water Authority
Water Supply Contract Revenue Bonds, Series 2025 (City of Baytown Project)
Exhibit A
Form of Private Placement Memorandum
PRIVATE PLACEMENT MEMORANDUM DATED OCTOBER 9, 2025
NEW ISSUE BOOK -ENTRY -ONLY
On the Delivery Date (defined below) of the Bonds (defined below), Bracewell LLP, Bond Counsel to 1he Issuer, will render its
opinion substantially in the form attached in APPENDIX E - FORM OF OPINION OF BOND COUNSEL.
$69,000,000
BAYTOWN AREA WATER AUTHORITY
WATER SUPPLY CONTRACT REVENUE BONDS,
SERIES 2025 (CITY OF BAYTOWN PROJECT) (the "Bonds")
Dated: November 1, 2025
Due: May 1
Interest Payment Date:
Interest on the Bonds will be payable on May 1, 2026, and each November I and May 1
thereafter (each an "Interest Payment Date") until maturity or prior redemption. The
Bonds will bear interest at the rates per annum set forth in "APPENDIX A - MATURITY
SCHEDULE."
Record Date:
The fifteenth (I 5th) calendar day of the month next preceding each Interest Payment Date.
Date Interest Accrues:
Each Obligation shall bear interest from the Delivery Date (as defined below) thereof or
the most recent Interest Payment Date to which interest has been paid or provided for at
the rate set forth in APPENDIX A — MATURITY SCHEDULE, such interest payable
semiannually on May I, 2026, and each November l and May 1 thereafter (each an
"Interest Payment Date") until maturity or prior redemption.
Redemption:
The Bonds are subject to redemption prior to maturity as provided herein. See "THE
BONDS - Redemption Provisions" herein.
Authorized
The Bonds are being issued as fully registered bonds in denominations of $5,000, or any
Denominations:
integral multiple thereof.
Paying Agent/Registrar:
The paying agent ("Paying Agent/Registrar") for the initial Bonds is BOKF, NA.
Book -Entry -Only System Upon initial issuance, the ownership of the Bonds will be registered in the registration
books of the Issuer kept by the Paying Agent/Registrar, in the name of Cede & Co., as
nominee of The Depository Trust Company, New York, New York ("DTC"), to which
principal, redemption premium, if any, and interest payments on the Bonds will be made_
The purchasers of the Bonds will not receive physical delivery of bond certificates.
Principal of, interest, and premium if any, on the Bonds will be payable at the designated
office of the Paying Agent/Registrar as the same become due and payable.
Issuer: Baytown Area Water Authority (the "Issuer" or "Authority").
Official Action: The Bonds are being issued pursuant to a Resolution of the Board of Directors of the
Baytown Area Water Authority Authorizing the Issuance of the Baytown Area Water
Authority Water Supply Contract Revenue Bonds, Series 2025 (City of Baytown Project);
Approving Other Matters Related Thereto, And Providing for the Effective Date Thereof
(the "Bond Resolution" or "Official Action"). See "APPENDIX B OFFICIAL
ACTION."
Purpose: See "APPENDIX B — OFFICIAL ACTION."
Defined Terms: Except as otherwise set forth herein, capitalized terms used but not defined in this Private
Placement Memorandum have the meanings assigned to them in the Bond Resolution.
Security for the Bonds: See "THE BONDS — Security for the Bonds."
No Debt Service Reserve Fund: There is no debt service reserve fund associated with the Bonds. See "APPENDIX B —
FORM OF OFFICIAL ACTION."
Ratings: See "OTHER INFORMATION — Ratings."
Delivery Date: November 14, 2025
See "APPENDIX A - MATURITY SCHEDULE" for Principal Amounts, Maturities, Interest Rates, Prices
or Yields, and Initial CUSIP Numbers
BAVTOWN AREA WATER AUTHORITY
BOARD OF DIRECTORS
Term
Name
Position Expiration
Brenda Bradley Smith President 8.3 1:2026
Frank McKay III Vice President 831:2027
Vacant Secretary N'A
Alyssa Linares Director 8.:31..,2026
David Start Director 8.31,2027
1INDEPENDENT AUDITORS, CONSU LTANTS ANn Ammon
Independent Auditors ............ ................................. ---- ....... ........ ......... Belt Harris Pechacek LLLP, Houston, Texas
Ekmd Counsel......". ........................... -- ............ ............ Bracewell LLP, Houston, Texas
Financial Adrvi%or .................. Hilltop Securities, Inc., Houston, Texas
Paying AgC]1T."ReZi;;tTar --------------- .............................. BOKF, N.A., Dallas, Texas
nginca BGE, Inc., Houston, Texas
rr
TABLE OF CONTENTS
pap
INTRODUCTION ----------'—'-------_--_----__'-'----'-'-_--'-'-----__.0
THE AUTHORITY -_-'-'-.......... ...... ....... ___ ........... -----...... .............. ...... '-_--__'---'............
--'A
Dese,riptiop«fMi�Authority ........................................... .............................................................................................................. U
Adbnisisnad"mfthe Aun6mrig/-------.---.............. ............ ..... ---............. ____ ............ ....... .......... ------A
Cmwsulmmmm---... ---'-'__'-'--.-....... -----------___............ ....... -__....... ---'--''_�
SourcemfWater Supply ............. ---....... -................................................ ..................................... ....... .................................. 2
Waler—_--__---'__---... ..... —_—_—_-......... --_—_'---'-....... ........ ---.2
TheAuthority's0p#tiuns............ ----------------------------------- ......................................................................................... ................. %
THEBONDS ............ -_..... -....... --- ___ .... ....... ----................................ ---....... -............ ....... ---........ ----2
Gmmwmd.............. --------------------........ .......... ........... -......... ,.--..,.--.-..%
Purpose __------'------------_'—_-----'----'---'----'-'-'_--------2
Authorityfor ]m^m«ce--....................... ......... ....... ___ ...... -.... ...... -................. ____ ......... -------....... ....... 1
Securityfor the Bonds ................................................. ....... ...................... ................... ........................ ....................................... 3
NmDebi Service Reserve Fomd...... ---__'—................... __-----_--_---__.......... -'-__---�
8edemptb*mPw*isivFis..................................... ------------ ____ ---------- --------------------- -----------------------------------
.............................. 3
Notice ofRedemption, Selection myBonds x*Be Redeenmd................................. .................... -............... ............ --........ -3
THE B/\YT«}WN CONTRACT ... ......... ----------....... ---------------------------------4
General................................ --..................... ......................................................................................................... ................ -',4
Dehndiomo-....... ____ ......... ............. ................... ................ ....... ....... ---........ .......... —_'-.......... ....... ......... '4
Weand Delivery wfTreated Water ........................ ............................... ....................................................................................... 4
Ratesand Prices .............. ............... ..... ................ -................................ ----............................
—.......... _.......... .5
Issuance ofBonds, PuyoowmuBy the City --'--.................... .......... ___ ........... ....... --'---............ -...... '-_--'S
?enw..................................... ............................................... .................. ...........................................
........................................... 5
THE BOND RESOLDJI3N_'........ ........... ___ ....... ......... ____ ......... —...... --'...................
_'---........ -_...... 3
GeFW.Mt.................. ................................................................................. ..................... ................................................................. 5
De0nh"u-_-................. --'-_----....... -....... ...... '-'..... ..................... .............
............ ........... __--... 5
9hdo; Special Wigations........... ............. --......................... -..... ....... ............... ................................................................. 6
DebtService Fmnd..................................... ............................................................. ................. .......
....... ..................................... 6
Payu=mwf Pledged Revammwu--...... -----....... -----------------........... ------------------6
AdditionalBonds ............................................................................................................................................................................
6
THE CITY^SUTILITY SYSTEMS ...... -........................... ........................................... ........ ____
...... ....... -----............... .7
BOOK- FNTRY-ONLY SYSTEM -........... --.................... ....... ----...................................................................................
7
TAX MATTERS ...... .......... ....... ----'_---.................. _----_-......... —_-----'------'-_---J0
Opinim--....... ----'--'....... -'---'---'-'--'----'----'---'--'-------
--_,~-~,~~~'--'-J�
OTHERINFORMATION .......... ............... ............................................................ ....... .......... ....................................................
_.W
FommmdLooking Sm:*mmots....... ...... ...... .......... .... .... -----..... ----.... --........
-------.......... ------.8
Ratings................................................................................................................ ...........................................................................
V
LITMATION------------------------------------------------------------..�
�e�u�--'--'----'—'-'-'__'---'--'----'-............. -'--'------------- ___
...................................... ---�9
TheIssuer .................................................................................................... ......... .................................
...................... ................ V
CdyUtility System Litigation. --'.............. '...... --_'-'-----'---'-'-----'--'-'----'--_--'/�
CONTINUING DISCLOSURE 'OF INFORMATION .................................................... .................................................................
9
The 6muer^uCoFNU|am*wwith Prior Um6mmakinp-....... -------------................ -----------------..�
3hwCity's Compliance »"ivhPrior Dm&rtaWngn........................................................ ................................................................
'.9
ADDITIONAL IN FORMATION --'..... ____ ....... ----..... ___ ............. ___ ....... -'---....... -----'-----........... .i0
iii
APPENDIX A
MATURITY SCHEDULE
APPENDIX B
OFFICIAL ACTION
APPENDIX C
BAYTOWN CONTRACT
APPENDIX D
ORDINANCE APPROVING THE OFFICIAL ACTION
APPENDIX E
FORM OF OPINION OF BOND COUNSEL
IV
Private Placement Memorandum
relating to
$69,000,000
BAYTOWN AREA WATER AUTHORITY
WATER SUPPLY CONTRACT REVENUE BONDS,
SERIES 2025 (CITY OF BAYTOWN PROJECT) (the "Bonds")
INTRODUCTION
This Private Placement Memorandum, including the cover page and appendices, contains brief descriptions of the Baytown Area
Water Authority (the "Issuer" or the "Authority"), provides certain information with respect to the issuance by the Issuer,
summarizes certain provisions of the "Bonds" pursuant to the Official Action and certain information related to the City of Baytown,
Texas (the "City") and its contract with the Issuer securing the Bonds, as amended from time to time (the "Baytown Contract").
Except as otherwise set forth herein, capitalized terms used but not defined in this Private Placement Memorandum have the
meanings assigned to them in the Official Action. See "APPENDIX B — "OFFICIAL ACTION" attached hereto.
APPENDIX A contains the maturity schedule for the Bonds. APPENDIX B contains the Official Action and a description of the
purpose for the proceeds of the Bonds. APPENDIX C contains the Baytown Contract. APPENDIX D contains the City ordinance
approving the Official Action_ APPENDIX E contains a copy of the proposed opinion of Bond Counsel with respect to the Bonds.
The summaries of the documents contained in the forepart of this Private Placement Memorandum are not complete or definitive,
and every statement made in this Private Placement Memorandum concerning any provision of any document is qualified by
reference to such document in its entirety.
THE AUTHORITY
Description of the Authority
The Authority is a political subdivision of the State of Texas, and operates under Chapter 8104, Texas Special District Local Laws
Code (the "Act") and Chapters 49 and 54, Texas Water Code. Due to severe subsidence caused by extraction of water from
underground sources in the area included within the Authority, the Authority was created for the purposes of acquiring surface
and/or underground water supplies from sources both within and without the boundaries of the Authority, which boundaries
generally encompass the City. As set forth in the Act, the Authority has the power to issue revenue bonds to provide for the
construction and acquisition of water supply facilities.
Administration of the Authority
Policy -making and supervisory functions are the responsibility of and are vested in the Board of Directors of the Authority (the
"Board"). The Board consists of five members, appointed by the City Council of the City (the "City Council") to two-year staggered
terms, which begin on September 1. One of the members of the Board must reside outside the City and none may be a member of
the City Council. The Board members are listed on the page iii hereof.
Under the provisions of the Act, the City Manager of the City is designated the General Manager of the Authority and acts its chief
executive officer. Under policies established by the Board, he is responsible for the following duties: administering the directives
of the Board; keeping the Authority's records and minutes; coordinating with state, federal and local agencies; developing plans
and programs for Board approval; formulating the Authority's budget subject to the approval of both the Board and City Council:
hiring, supervising, training and discharging Authority employees, if any; contracting for or retaining outside professional services:
and performing any other duties assigned by the Board.
The General Manager is Mr. Jason Reynolds, currently the City Manager of the City.
Consultants
The Authority has retained several consultants to perform professional services in connection with the issuance of the Bonds.
Several of the consultants are identified on page iii hereof.
Source of Water Supply
The Authority, as buyer, entered into a "Wholesale Water Supply Contract — Untreated Water" with the City of Houston, as seller,
which was initially entered into as of October 24, 1994 and has been amended from time to time, most recently on May 7, 2025
(the "Houston Contract"). Under the Houston Contract, the Authority purchases raw water from the City of Houston for treatment
and resale collectively, to the City and others. The term of the Houston Contract currently runs to December 31, 2055. The raw
water provided under the Houston Contract is delivered to the Authority by the Coastal Water Authority ("CWA") from the Trinity
River via the CWA canal system. The Houston Contract establishes an obligation of the City of Houston to provide water to the
Authority up to an average of 32 million gallons per day (MOD). The Authority may reserve additional quantities of untreated
water by providing 30 days' notice to the City of Houston. If the Authority exceeds the contracted quantity by an average over 10
percent for a month, a surcharge of five percent is added to the overage of the contracted quantity.
Water System
The Authority operates two surface water treatment plants. The Authority's Water Treatment facilities are surface water treatment
plants utilizing coagulation, flocculation, sedimentation, filtration, and disinfection for treatment of the raw water. The current total
firm capacity for the Authority's two surface water treatment plants is 31.9 MOD with a peak capacity of 31.9 MGD. The total
storage capacity is 15 million gallons stored in four ground storage tanks. The Authority's East Surface Water Treatment Plant,
which is the newer of the two plants, was constructed on the CWA Barbers Hill Canal and has an initial capacity of 6 MOD (with
expansion capacity up to 24 MOD in four phases). The next stage in the expansion of the East Surface Water Treatment Plant is
being funded with the proceeds of the Bonds. The Authority has the capability to expand its surface water treatment plant capacity
to 59 MOD in the future. During the fiscal year ended September 30, 2024, the average daily water usage from the Authority's
plants was approximately 15.97 MOD.
Proceeds from the sale of the Bonds will be used for the purposes of (i) the design, construction, acquisition and equipment of (a)
the expansion of the East Surface Water Treatment Plant and related infrastructure and (ii) paying the costs of issuing such Bonds.
The Authority's Operations
The Authority provides treated water to the City and seven other utility districts under contract. Approximately 91% percent of the
treated water is utilized by the City and approximately 9% is utilized by the seven other political subdivisions that are customers of
the Authority. For fiscal year 2024, the Authority sold an average of 15.97 MOD to its customers. The Authority has contracted
with the City for personnel to operate the facilities of the Authority, including the water treatment plants.
The Bonds are payable only from the Pledged Revenues described herein and not from any other funds of the Issuer. See "THE
BONDS — Security for the Bonds."
THE BONDS
General Description
The Bonds are being issued in the aggregate principal amount set forth in APPENDIX A of this Private Placement Memorandum
and will mature and be subject to redemption prior to maturity as described therein. The Bonds are being issued as fully registered
bonds in denominations of $5,000, or any integral multiple thereof. The Bonds will be dated as of the date of delivery of the Bonds
and will mature on the dates referenced thereon and will bear interest at the rates per annum set forth in "APPENDIX A -
MATURITY SCHEDULE."
Interest on the Bonds is payable semiannually on each Interest Payment Date until maturity or prior redemption and will be calculated
on the basis of a 360-day year consisting of twelve 30-day months. Principal of and the redemption price with respect to the Bonds
will be payable to the Owners upon presentation and surrender at the principal office of the Paying Agent/Registrar.
Purpose
Proceeds from the sale of the Bonds will be used for the purposes of (i) the design, construction, acquisition and equipment of (a)
the expansion of the East Surface Water Treatment Plant and related infrastructure and (ii) paying the costs of issuing such Bonds.
See "APPENDIX B - FORM OF OFFICIAL ACTION."
Authority for Issuance
The Bonds are issued under and pursuant to the Constitution and laws of the State of Texas, including Article XVI, Section 59 of
the Texas Constitution, Chapter 8104, Texas Special District Local Laws Code (the "Act") and Chapter 1201, Texas Government
Code, as amended, and pursuant to the Official Action.
Security for the Bonds
The Bonds, when issued, will constitute valid and binding special obligations of the Authority, subject and pursuant to the terms
and conditions of the Bond Resolution adopted by the Board and approved by the City. The principal of and interest on the Bonds,
together with the Authority's outstanding Water Supply Contract Revenue & Refunding Bonds, Series 2012 (City of Baytown
Project), Water Supply Contract Revenue Bonds, Series 2018 (City of Baytown Project), Water Supply Contract Revenue Bonds,
Series 2019 (City of Baytown Project), and Water Supply Contract Revenue Bonds, Series 2024 (City of Baytown Project) are
payable from, and secured by a first lien on and pledge of, certain payments (the "Pledged Revenues") to be made to the Authority
by the City pursuant to the Amended and Restated Water Supply Contract for Treated Water between the Authority and the City
(the "Baytown Contract"), which was initially entered into as of January 31, 1977, amended and restated as of October 23, 1997,
and further amended effective January 3, 2005, effective February 23, 2012, effective March 27, 2014, effective January 18, 2017,
effective January 25, 2019, effective May 9, 2024, and effective September 1, 2025. The source of such payments includes any and
all available sources that the City may pledge toward such payments, including gross revenues of its waterworks and sewer system,
but does not include ad valorem taxes. The City has agreed and is obligated to the Authority, pursuant to the provisions of the
Baytown Contract, to make payments of the Pledged Revenues in accordance with the terms of the Bond Resolution which requires
payments to be made into the Debt Service Fund in amounts sufficient to pay the principal of, premium, if any, and interest on the
Bonds when due. The beneficial owners of the Bonds do not have the right to demand payment out of any funds derived or to be
derived from taxation or any other revenues of the Authority other than the Pledged Revenues. See "APPENDIX C - BAYTOWN
CONTRACT." The Authority has no taxing power.
Pursuant to the Houston Contract, the City of Houston is obligated to supply untreated water to the Authority until December 31,
2055. See "THE AUTHORITY — SOURCE OF WATER SUPPLY." In addition, the Authority is obligated to supply treated water
to the City and the City is required to make contract payments to the Authority until December 31, 2055.
No Debt Service Reserve Fund
There is no debt service reserve fund associated with the Bonds. See "APPENDIX B -OFFICIAL ACTION."
Redemption Provisions
The Authority reserves the right to redeem Bonds maturing on and after May 1, 2036, in whole or from time to time in part, in
principal amounts of $5,000 or any integral multiples thereof, before their respective scheduled maturity dates, on November I,
2035, or on any date thereafter, at a redemption price equal to the principal amount thereof plus accrued interest to the date of
redemption. If less than all of the Bonds are to be redeemed, the Issuer shall determine the amounts and maturities thereof to be
redeemed. If less than all of the Bonds of a stated maturity are to be redeemed, the Issuer shall direct the Paying Agent/Registrar to
call by lot or other random selection in such manner as the Paying Agent/Registrar in its discretion may deem proper Bonds, or
portions thereof within such maturity and in such amounts, for redemption; provided however, that the portion of any Bonds to be
redeemed will be in Authorized Denominations and that, in selecting the Bonds for redemption, the Paying Agent/Registrar will
treat each Bond as representing that number of Bonds that is obtained by dividing the principal amount of such Bond by $5,000.
Notice of Redemption; Selection of Bonds to Be Redeemed
Not less than 30 days prior to a redemption date for the Bonds, the Paying Agent/Registrar, at the direction of the Authority, shall
cause a notice of redemption to be sent by United States mail, first class, postage prepaid, to the registered owners of the Bonds to
be redeemed, in whole or in part, at the address of the registered owner appearing on the registration books of the Paying
Agent/Registrar. 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, THE
BONDS CALLED FOR REDEMPTION SHALL BECOME DUE AND PAYABLE ON THE SPECIFIED REDEMPTION DATE,
AND NOTWITHSTANDING THAT ANY OBLIGATION OR PORTION THEREOF HAS NOT BEEN SURRENDERED FOR
PAYMENT, INTEREST ON SUCH OBLIGATION OR PORTION THEREOF SHALL CEASE TO ACCRUE.
The Authority has reserved the right to give notice of its election or direction to optionally redeem Bonds conditioned upon the
occurrence of subsequent events. Such notice may state (A) that the redemption is conditioned upon the deposit of moneys and for
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 (B) that the Authority retains the right to rescind
such notice at any time prior to the scheduled redemption date if the Authority delivers a certificate of the Authority 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 Bonds subject
to conditional redemption where redemption has been rescinded shall remain outstanding.
The Paying Agent/Registrar and the Authority, so long as a Book -Entry -Only System is used for the Bonds, will send any notice of
redemption or other notices with respect to the Bonds only to DTC. Any failure by DTC to advise any DTC participant, or of any
DTC participant or indirect participant to notify the beneficial owner, shall not affect the validity of the redemption of the Bonds
called for redemption or any other action premised on any such notice. Redemption of portions of the Bonds by the Authority will
reduce the outstanding principal amount of such Bonds held by DTC.
In such event, DTC may implement, through its Book -Entry -Only System, a redemption of such Bonds held for the account of DTC
participants in accordance with its rules. or other agreements with DTC participants and then DTC participants and indirect
participants may implement a redemption of such Bonds from the beneficial owners_
Neither the Authority nor the Paying Agent/Registrar will have any responsibility to DTC participants, indirect participants or the
persons for whom DTC participants act as nominees, with respect to the payments on the Bonds or the providing of notice to DTC
participants, indirect participants, or beneficial owners of the selection of portions of the Bonds for redemption. See "BOOK -
ENTRY -ONLY SYSTEM.".
THE BAYTOWN CONTRACT
General
The following are summaries of certain provisions of the Baytown Contract and do not purport to be a complete statement of the
provisions of the Baytown Contract_ Reference is hereby made to the Baytown Contract for complete details. See "APPENDIX C
BAYTOWN CONTRACT."
Definitions
Authority's Cost: The costs to be incurred by the Authority in the performance of its obligations under the Baytown Contract,
including (i) the Pledged Revenues with respect to all outstanding Bonds, (h) maintenance, operational and administrative costs,
and (iii) the cost of untreated water pursuant to the Houston Contract (as defined herein).
Bonds; Bonds or other evidences of indebtedness, including notes, issued by the Authority pursuant to the Act and the terms of the
Baytown Contract, which, together with the interest thereon, are to be paid from payments of Pledged Revenues to be made by the
City pursuant to the Baytown Contract and which have been issued and sold to acquire funds to make, purchase, construct, lease,
or otherwise acquire the Project; complete such making, purchasing, constructing, leasing or acquiring; enlarge, expand, or modify
the Project; reconstruct the Project; or refund any Bonds.
Bond Resolution: Any resolution or resolutions adopted by the Board which authorizes the issuance of Bonds pursuant to the
Baytown Contract and provides for other security and payment as such resolution or resolutions may be amended from time to time.
Pledged Revenues: The payments to be made by the City to the Authority for treated water and pledged in a Bond Resolution for
payment of the principal of, premium, if any, and interest on the bonds issued pursuant to the terms of the Baytown Contract.
Project: The property, works, facilities and improvements, whether previously exkiing or to be made, constructed or acquired, within
s-r -,% iihout the boundaries of the Authority, necessary
0) to acquire surface water supplies from sources both within and without the boundaries of the
Authority, including pa=fiicularly the sources pro-,ideri by the Ilouston Contract,
(ii) to conserve, store, transport, treat and purify untreated water purchased by the Authority pursuant t.}
BAWA's Contract, and
(iii) to distribute, sell and deliver treated water to the City pursuant to the tenns of the Baytown Contract.
Sale and Delivery of Treated Water
Subject to the terms and conditions of the Baytown Contract, the Authority agrees to sell and deliver (or cause to be delivered) to
the City, all of the City's treated water requirements for municipal purposes, and the City agrees to purchase from the Authority,
4
all of the City's treated water requirements for municipal purposes. It is expressly agreed that the Authority shall not be obligated
to deliver to the City treated water in excess of the Contract Quantity of 28.6 million gallons per day
Rates and Prices
The City agrees to pay the Authority's Costs through the establishment of rates for the purchase of treated water and by payments
to the Authority based on such established rates. The Authority and the City shall periodically establish rates for the purchase of
treated water.
Issuance of Bonds; Payments By the City
The Authority agrees, upon request of the City, to issue and sell, from time to time, Bonds in amounts sufficient to provide and pay
for the costs of the Project. The Bonds shall have the form and characteristics as provided in the Bond Resolution.
In consideration of the Authority's agreement to issue the Bonds, and as part of the Authority's Costs, the City agrees to pay Pledged
Revenues to the Authority pursuant to and in accordance with the terms of any Bond Resolution. The City shall pay the Pledged
Revenues in the amounts and at the time designated in the Bond Resolutions. In the event the City should fail to make any payment
required by the Baytown Contract, such payment shall continue as an obligation of the City until such overdue amount shall have
been fully paid.
The source of funds for the City to make the payments of the Pledged Revenues shall include any and all available sources that the
City may pledge toward such payments, including gross revenues of the City's utility systems.
A copy of any Bond Resolution, showing the principal amount of and rate of interest on the Bonds, their maturities, the name of
the purchaser thereof, and other pertinent features, must be delivered to and approved by the City prior to the issuance and delivery
of the Bonds.
The Authority and the City agree and understand that the holders of the Bonds shall rely upon such approval of the City and upon
the City's promise to pay the Pledged Revenues. Therefore, the City covenants and agrees that such payments of the Pledged
Revenues shall be made without setoff or counterclaim and, notwithstanding any other provisions of the Baytown Contract, the
holders of the Bonds shall be entitled to rely upon the foregoing covenants and agreements regardless of any other agreements
between the City and the Authority.
Term
The Baytown Contract is for a term ending December 31, 2055, but provides that it shall continue in effect until all of the Bonds
are paid.
THE BOND RESOLUTION
General
Certain provisions of the Bond Resolution are summarized below. The following does not purport to be a complete statement of
the provisions of the Bond Resolution, to which reference is hereby made for complete details. See "APPENDIX B — OFFICIAL
ACTION."
Definitions
Outstanding Bonds: The Authority's Water Supply Contract Revenue & Refunding Bonds, Series 2012 (City of Baytown Project),
Water Supply Contract Revenue Bonds, Series 2018 (City of Baytown Project), Water Supply Contract Revenue Bonds, Series
2019 (City of Baytown Project), and Water Supply Contract Revenue Bonds, Series 2024 (City of Baytown Project).
Pledged Revenues: (i) The payments to be made by the City to the Authority pursuant to the Baytown Contract consisting of the
amounts required to pay, and pledged for payment of, the principal of, premium, if any, and interest on the Bonds and the
Outstanding Bonds, and (ii) any additional revenues, income, receipts, or other resources, including without limitations, any grants,
donations, or income received or to be received from the United States Government, or any other public or private source, whether
pursuant to an agreement or otherwise, which in the future may, at the option of the Authority pursuant to official action by the
Board, be pledged to the payment of the Parity Bonds. The City is authorized to pay the Pledged Revenues described in (i) of the
previous sentence pursuant to Section 402.014, Texas Local Government Code (recodified as Section 552.014, Texas Local
Government Code).
Project: The property, works, facilities, and improvements (whether previously existing or to be made, constructed, or acquired)
within or without the boundaries of the Authority, necessary (1) to acquire surface water supplies from sources both within and
without the boundaries of the Authority, including particularly the sources provided by the Houston Contract, (2) to conserve, store,
transport, treat, and purify untreated water purchased by the Authority pursuant to the Houston Contract, and (3) to distribute, sell,
and deliver treated water to the City pursuant to the terms of the Baytown Contract.
Pledge; Special Obligations
The Bonds, together with the Outstanding Bonds, are payable from, and secured by an irrevocable first lien on and pledge of, the
Pledged Revenues. The Authority covenants to maintain rates and charges to the City pursuant to the Baytown Contract in amounts
sufficient to provide Pledged Revenues to meet the debt service requirements on the Bonds and the Outstanding Bonds. The
Authority reserves the right, at the option of the Authority exercised through the adoption of official action by the Board, to add
any additional revenues, income, receipts, or other resources, including without limitations, any grants, donations, or income
received or to be received from the United States Government, or any other public or private source, whether pursuant to an
agreement or otherwise, to the definition of Pledged Revenues.
The Bonds and the Outstanding Bonds are special obligations of the Authority payable solely from the sources described above,
and no owner of the Bonds shall ever have the right to demand payment of the Bonds from funds derived or to be derived from
taxation or any revenues of the Authority other than the Pledged Revenues.
Debt Service Fund
Immediately after delivery of the Bonds, the Authority shall deposit into the Debt Service Fund for the Bonds the accrued interest,
if any, on the Bonds to the date of delivery. All payments by the City of Pledged Revenues shall be deposited directly into the
appropriate debt service fund for the Bonds and the Outstanding Bonds.
All moneys from time to time deposited and held in the Debt Service Fund shall be held in trust by the Registrar for the benefit of
the Bond owners and used to pay, or cause to be paid, the principal of and interest on the Bonds.
Payment of Pledged Revenues
Under the terms of the Baytown Contract, by approving the issuance of the Bonds and the terms and conditions of the Bond
Resolution, the City has absolutely and unconditionally obligated itself and agreed to make the following payments to the Authority
in immediately available funds:
(i) On or before December I, 2025, and the first day of each month thereafter, such amounts, in
approximately equal monthly installments, as will be sufficient, together with any other amounts
available therefor in the Debt Service Fund, to pay the interest which shall become due on the Bonds on
the next succeeding interest payment date; and
(ii) On or before December 1, 2025, and on or before the first day of each month thereafter, such amounts, in
approximately equal monthly installments, as will be sufficient, together with any other amounts available therefor
in the Debt Service Fund, to pay the principal which shall become due on the Bonds on the next succeeding principal
payment date.
Additional Bonds
The Authority reserves the right, upon the request of the City, to issue additional bonds (the "Additional Bonds") in such amounts
as are required for the purpose of acquiring funds to (i) complete making, purchasing, constructing, leasing, or acquiring the Project,
(ii) enlarge, expand, or modify the Project, (iii) reconstruct the Project, or (iv) refund any Bonds, Outstanding Bonds, or Additional
Bonds. The Additional Bonds, when issued and delivered, shall be payable from and secured by a first lien on and pledge of the
Pledged Revenues (which shall include additional payments sufficient to enable the Authority to comply with all terms and
conditions of the resolution authorizing the issuance of such Additional Bonds), in the same manner and to the same extent as the
Outstanding Bonds and the Bonds; and the Bonds, the Outstanding Bonds and any Additional Bonds shall in all respects be on a
parity and of equal dignity.
No such installment or series of Additional Bonds shall be issued unless:
(i) A certificate is executed by the President and Assistant Secretary of the Board to the effect that no
default exists in connection with any covenants or requirements of the Bonds, Outstanding Bonds or
Additional Bonds, if any, and that the Debt Service Fund contains the amount then required to be on
deposit therein;
(ii) The City is not in default with respect to any series of bonds or other debt issued by it; and
(iii) The principal of and interest on any such installment or series of Additional Bonds are payable on the
same semiannual interest dates and annual principal dates as the Bonds and the Outstanding Bonds.
THE CITY'S UTILITY SYSTEMS
For information regarding the City's Utility System, see City's audited financial information for the fiscal year ended September
30, 2024.
BOOK -ENTRY -ONLY SYSTEM
The information in this caption concerning The Depository Trust Company, New York, New York ("DTC"), and DTC's book entry
system has been obtained from DTC and the Issuer makes no representation or warranty nor takes any responsibility for the accuracy
or completeness of such information.
DTC will act as securities depository for the Obligations. The Obligations will be issued as fully -registered securities registered in
the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of
DTC. One fully registered certificate will be issued for each maturity of the Obligations, in the aggregate principal amount of each
such maturity, and will be deposited with DTC. See APPENDIX B - "FORM OF OFFICIAL ACTION."
DTC, the world's largest securities depository, is a limited -purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million
issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100
countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among
Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry
transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities
certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation
("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing
Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the
DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and
clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). DTC has Standard & Poor's rating of "AA+." The DTC Rules applicable to its Participants are on file
with the Securities and Exchange Commission. More information about DTC can be found at w %% wAtce.com.
Purchases of Obligations under the DTC system must be made by or through Direct Participants, which will receive a credit for the
Obligations on DTC's records. The ownership interest of each actual purchaser of each Obligation (`Beneficial Owner") is in turn
to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC
of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered
into the transaction. Transfers of ownership interests in the Obligations are to be accomplished by entries made on the books of
Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in the Obligations, except in the event that use of the book -entry system for the Obligations is discontinued.
To facilitate subsequent transfers, all Obligations deposited by Direct Participants with DTC are registered in the name of DTC's
partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of
Obligations with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in
beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Obligations; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Obligations are credited, which may or may not be the Beneficial Owners.
The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and
by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Redemption notices shall be sent to DTC. If less than all of the Obligations within an issue are being redeemed, DTC's practice is
to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
Redemption proceeds and principal and interest payments on the Obligations will be made to Cede & Co., or such other nominee
as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's
receipt of funds and corresponding detail information from the City or the Paying Agent/Registrar, on payable dates in accordance
with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as in the case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent/Registrar or the
City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds
and principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is
the responsibility of the City or the Paying Agent/Registrar, disbursement of such payments to Direct Participants will be the
responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect
Participants.
A Beneficial Owner shall give notice to elect to have its Obligations purchased or tendered, through its Participant, to the Paying
Agent/Registrar, and shall effect delivery of such Obligations by causing the Direct Participant to transfer the Participant's interest
in the Obligations, on DTC's records, to the Paying Agent/Registrar. The requirement for physical delivery of Obligations in
connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Obligations
are transferred by Direct Participants on DTC's records and followed by a book -entry credit of tendered Obligations to the Paying
Agent/Registrar's DTC account.
DTC may discontinue providing its services as depository with respect to the Obligations at any time by giving reasonable notice
to the City or the Paying Agent/Registrar. Under such circumstances, in the event that a successor depository is not obtained,
Obligation certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book -entry
transfers through DTC (or a successor securities depository). In that event, Obligation certificates will be printed and delivered. The
information in this section concerning DTC and DTC's book -entry system has been obtained from sources that the City believes to
be reliable, but the City takes no responsibility for the accuracy thereof.
TAX MATTERS
Opinion
Bond Counsel will deliver its opinion on the date of delivery of the Bonds substantially in the form as attached in "APPENDIX E -
FORM OF OPINION OF BOND COUNSEL."
OTHER INFORMATION
Forward Looking Statements
The statements contained in this Private Placement Memorandum, including the cover page, appendices, and any other information
or documents provided by the Issuer, that are not purely historical, are forward -looking statements, including statements regarding
the Issuer's expectations, hopes, intentions, or strategies regarding the future. Holders and beneficial owners of the Bonds have
placed reliance on forward -looking statements. All forward looking statements included in this Private Placement Memorandum
are based on information available to the Issuer on the date hereof. It is important to note that the Issuer's actual results could differ
materially from those in such forward -looking statements.
Ratings
The Bonds and the presently outstanding Authority obligations are rated "AaY by Moody's and "AA-" by Standard and Poor's
Rating Services, a Standard & Poor's Financial Service LLC business ("S&P"), without regard to credit enhancement. An
explanation of the significance of such ratings may be obtained from the company furnishing the rating. The ratings reflect only the
respective views of such organizations and the City makes no representation as to the appropriateness of the ratings. There is no
assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn
entirely by either or both of such rating companies, if in the judgment of either or both companies, circumstances so warrant. Any
such downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the market price of the
Bonds.
LITIGATION
General
On the date of delivery of the Bonds to the initial purchasers thereof, the Issuer will execute and deliver a certificate to the effect that,
except as disclosed herein, no litigation of any nature has been filed or is pending, as of that date, to restrain or enjoin the issuance
or delivery of the Bonds or which would affect the provisions made for their payment or security or in any manner questioning the
validity of the Bonds.
The Issuer
There is no litigation, proceeding, inquiry, or investigation pending by or before any court or other governmental authority or entity
(or, to the best knowledge of the Issuer, threatened) that adversely affects the power, authority or obligation of the Issuer to deliver
the Bonds, the security for, or the validity of, the Bonds or the financial condition of the Issuer.
City Utility System Litigation
In 2013, the City entered into a 10-year formal agreement with the Texas Commission on Environmental Quality ("TCEQ") to
complete substantial work to improve the performance of the sanitary sewer system under a voluntary program established by the
State called the Sanitary Sewer Overflow Initiative (the "SSOI"). The State's program allows municipalities to direct resources
toward corrective actions to fix sanitary sewer overflows ("SSOs") that are prohibited by the Clean Water Act ("CWA").
Prior to the end of the initial 10-year agreement, the City began working on a plan to continue its improvements to the sanitary
sewer system under a new agreement with the State. However, prior to the negotiation of such an agreement with the State, a citizens
group called Bayou City Waterkeeper filed a notice of intent to sue the City regarding sanitary sewer overflows. As required by
law, the notice of intent was sent to the EPA, the State, and the Texas Commission on Environmental Quality, which allowed those
governmental agencies the opportunity to take action as the primary regulators of the Clean Water Act rather than having a private
group initiate litigation. As a result, the City is now party to a lawsuit filed by the United States on behalf of the Environmental
Protection Agency and the State of Texas on behalf of the TCEQ regarding sanitary sewer overflows in the City and Bayou City
Waterkeeper has intervened in the lawsuit as permitted by the Clean Water Act. The lawsuit and related negotiations are expected
to facilitate the development of a scope of work for improvements to the City's sanitary sewer system that would be formalized in
a consent decree filed with a federal court. The parties jointly requested a stay in the litigation pending settlement discussions,
which the Judge granted, administratively closing the matter. On April 2, 2025, the Judge signed an order extending the stay through
September 30, 2025 and the parties will report to the Court on the status of negotiations no later than September 30, 2025. The City
believes it is likely that the current negotiations will continue into 2026 and anticipates requesting that the stay be continued
accordingly and as necessary to facilitate a mutually -agreeable settlement. The scope of the sanitary sewer improvements that
would be included in a consent decree and the financial impact on the City associated with funding such improvements are currently
unknown. However, resolution of the suit may involve a substantial investment in the City's sanitary sewer system that could be
material to investors.
CONTINUING DISCLOSURE OF INFORMATION
In the Official Action, the Issuer has made a continuing disclosure agreement for the benefit of the holders and beneficial owners
of the Bonds. In the City ordinance approving the Official Action and as reflected in the Official Action, the City has made a
continuing disclosure agreement for the benefit of the holders and beneficial owners of the Bonds. The Issuer and the City are each
required to observe such agreements for so long as the City remains obligated to advance funds to pay the Bonds. Under the
agreement, the Issuer and the City will each be obligated to provide certain updated financial information and operating data, and
timely notice of specified material events, to the Municipal Securities Rulemaking Board through the Electronic Municipal Market
Access System. SEE APPENDIX B - "FORM OF OFFICIAL ACTION" and APPENDIX D - "FORM OF ORDINANCE
APPROVING OFFICIAL ACTION."
The Issuer's Compliance with Prior Undertakings
During the last five years, the Issuer has not failed to comply in any material respect with its continuing disclosure agreements
undertaken in accordance with SEC Rule 15c2-12.
The City's Compliance with Prior Undertakings
For the fiscal year ended September 30, 2024, the City filed unaudited financial information and operating data by the required
date. The City did not file audited financial information until June 23, 2025. For the fiscal year ended September 30, 2023, the City
filed unaudited financial information and operating data by the required date. The City did not file audited financial statements until
April 12, 2024. For the fiscal year ended September 30, 2022, the City filed unaudited financial information by the required date.
The City filed its audited financial statements on October 23, 2023. For the fiscal year ended September 30, 2021, the City timely
filed unaudited financial information and operating data. The City filed its audited financial statements on July 13, 2022.
MISCELLANEOUS
Any statements made in this Private Placement Memorandum involving matters of opinion or of estimates, whether or not so
expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will
be realized. Neither this Private Placement Memorandum nor any statement that may have been made verbally or in writing is to
be construed as a contract with the owners of the Bonds.
The information contained above is neither guaranteed as to accuracy or completeness nor to be construed as a representation by the
Issuer. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this
Private Placement Memorandum nor any sale made hereunder is to create, under any circumstances, any implication that there has
been no change in the affairs of the Issuer or the Issuer from the date hereof.
The Private Placement Memorandum is submitted in connection with the sale of the securities referred to herein to the TWDB on
the Delivery Date and may not be reproduced or used, as a whole or in part, for any other purpose.
ADDITIONAL INFORMATION
The Private Placement Memorandum speaks only as of its date and the information contained herein is subject to change.
Descriptions of the Bonds and the Official Action and any other agreements and documents contained herein constitute summaries
of certain provisions thereof and do not purport to be complete. This Private Placement Memorandum was approved by the Issuer.
10
APPENDIX A
MATURITY SCHEDULE
Maturity Date
Principal
Interest
CUSIP
(may 1)
Amount
Rate
Number ='
2027
$1,475,000
1.940%
073177JP3
2028
1,510,000
1.940
073177JQI
2029
1,540,000
1.980
073177JR9
2030
1,570,000
2.080
073177JS7
2031
1,605,000
2.210
073177JT5
2032
1,645,000
2.360
073177JU2
2033
1,690,000
2.460
073177JVO
2034
1,735,000
2.570
073177JW8
2035
1,785.000
2,680
073177JX6
2036
1,840,000
2.940
073177JY4
2037
1,900,000
3.140
073177JZ I
2038
1,965,000
3.300
073177KA4
2039
2,035,000
3.440
073177KB2
2040
2,920.000
3.540
073177KCO
2041
2,920,000
3.660
073177KD8
2042
2,920,000
3.750
073177KE6
2043
2,920,000
3.850
073177KF3
2044
2,920,000
3.870
073177KGI
2045
2,920,000
3.890
073177KH9
2046
2,920,000
4.060
073177KJS
2047
2,920,000
4.080
073177KK2
2048
2,920,000
4.090
073177KLO
2049
2,920,000
4.100
073177KM8
2050
2,920,000
4.110
073177KN6
2051
2,920,000
4.120
073177KPI
2052
2,920,000
4.120
073177KQ9
2053
2,920,000
4.120
073177KR7
2054
2,920,000
4.120
073177KS5
2055
2,905,000
4.120
073177KT3
(1) The Authority reserves the right to redeem Bonds maturing on and after May 1, 2036, in whole or from time to
time in part, in principal amounts of $5,000 or any integral multiples thereof, before their respective scheduled
maturity dates, on November 1, 2035, or on any date thereafter, at a redemption price equal to the principal amount
thereof plus accrued interest to the date of redemption.
(2) CUSIP is a registered trademark of the American Bankers Association. CUSIP data is provided by CUSIP Global
Services, managed on behalf of the American Bankers Association by FactSct Research Systems, Inc. This data is
not intended to create a database and does not serve in any way as a substitute for the CUSIP services. CUSIP
numbers are provided for convenience of reference only. Neither the Issuer nor the Financial Advisor take any
responsibility for the accuracy of the CUSIP numbers set forth herein.
A-]
APPENDIX B
OFFICIAL ACTION
]Attached]
B-1
APPENDIX C
BAYTOWN CONTRACT
[Attached]
C-!
Amended and Restated
Water Supply Contract --
Treated Water
STATE OF TEXAS §
COUNTY OF HARRIS §
This Amended and Restated Water Supply Contract -- Treated Water, hereinafter referred
to as "Contract," is made and entered into on the date herein after last specified by and between the
Baytown Area Water Authority, a governmental agency and a body politic and corporate of the State
of Texas, created pursuant to Chapter 600, Acts of the 63rd Legislature, Regular Session, 1973,
hereinafter referred to as "BAWA," and the City of Baytown, a municipal corporation and home -rule
city which is located within Harris and Chambers Counties, Texas, hereinafter referred to as "CITY."
WHEREAS, BAWA and CITY, by executing this Contract, adopt this Amended and
Restated Water Supply Contract -- Treated Water, which accurately incorporates the Water Supply
Contract -- Treated Water dated the 3V day of January 1977 and all amendments and supplements
thereto in effect to date, including, but not limited to, that certain Water Supply Contract -- Treated
Water dated the 26"i day of November, 1996; and
WHEREAS, BAWA has the right under a contract with the City of Houston to buy untreated
water from the City of Houston; and
WHEREAS, BAWA has constructed and will continue to repair, construct and modify
certain facilities to treat and deliver the aforementioned untreated water to CITY as treated water;
and
WHEREAS, CITY has constructed or contracted with BAWA to construct certain facilities
to enable CITY to receive the aforementioned treated water; and
WHEREAS, BAWA desires to sell large quantities of treated water from such source or
sources to C[TY; and
WHEREAS, CITY, subject to the terms and conditions contained herein, desires to purchase
from BAWA its treated water; and
WHEREAS, BAWA has issued four series of contract revenue bonds payable from payments
made by the City pursuant to the provisions of this Contract and expects to issue one or more
additional series of said bonds; and
Amended and Restated Water 5unoly Contract for Treated Water, Page I
WHEREAS, BAWA and CITY have found, and do hereby find, that BAWA and CITY are
authorized by the laws of the State of Texas to enter into a contract for the sale of water upon such
terms and for the period of time hereinafter set forth; and
WHEREAS, CITY is authorized to enter into a contract for the purchase of treated water
from BAWA pursuant to Chapter 402 of the Texas Local Government Code;
NOW THEREFORE, for and in consideration of the premises and the mutual covenants and
agreements herein contained, the parties hereto do hereby mutually agree as follows:
ARTICLE I
DEFINITIONS
Unless a different meaning or intent clearly appears from the context, the following words
and terms shall have the meanings specified in this Article, respectively:
1.01 "Act" means Chapter 600, Acts of the 63' Legislature, Regular Session, 1973.
1.02 "BAWA Contract" means the Water Supply Contract between the City of Houston
and Baytown Area Water Authority, dated October 24, 1994, between BAWA, as buyer, and
the City of Houston, Texas, as seller, a copy of which is attached hereto and incorporated
herein for all intents and purposes.
1.03 "BAWA's Cost" means the costs to be incurred by BAWA in the performance of its
obligations under this Contract, including the following:
(a) the Pledged Revenues as described herein with respect to all outstanding
Bonds,
(b) maintenance, operational and administrative costs, and
(c) the cost of untreated water pursuant to BAWA Contract, including any
penalty or interest incurred by BAWA by reason of CITY's acts.
1.04 "Bonds" shall mean bonds or other evidences of indebtedness, including notes, issued
by BAWA pursuant to the Act and the terms of this Contract,
(a) which, together with the interest thereon, are to be paid from the payments
of Pledged Revenues (hereinafter defined) to be made by CITY pursuant to
this Contract and
Amended and Restated Water Supply Contract for Treated Water, Page 2
(b) which have been issued and sold to acquire funds to:
(1) make, purchase, construct, lease, or otherwise acquire the Project
(hereinafter defined)
(2) complete such making purchasing, constructing, leasing, or acquiring,
(3) enlarge, expand or modify the Project
(4) reconstruct the Project or
(5) refund any Bonds.
1.05 "Bond Resolution' shall mean any resolution or resolutions adopted by the governing
body of BAWA which authorize the issuance of Bonds pursuant to this Contract and
providing for other security and payment as such resolution or resolutions may be amended
from time to time as therein permitted.
1.06 "City's Facilities" shall mean facilities constructed by CITY to enable CITY to
receive treated water.
1.07 "Contract Ouantity" shall mean the maximum quantity of treated water that BAWA
agrees to reserve and sell to CITY pursuant to Section 2.01 herein.
1.08 "Contract Term" is defined in Article X.
1.09 "Cost of Project" shall mean the costs incurred to or to be incurred by BAWA or
CITY with respect to the acquisition of the Project, whether incurred prior to or after the date
of this Contract and including, but not limited to, the following items:
(a) obligations for labor, materials, services, and equipment;
(b) costs of any bonds and insurance, the cost of which is not otherwise provided
for;
(c) costs of engineering services, including costs of preliminary design and
development work, test borings, surveys, estimates, plans and specifications,
supervising construction, and performing all other duties required by or
consequent upon proper construction;
(d) expenses incurred in connection with the issuance and sale of the Bonds,
including without limitation:
(1) fees and expenses of accountants, auditors, attorneys, underwriters,
engineers, and financial advisors,
(2) materials, supplies, printing and engraving,
(3) recording and filing fees,
Amended and Restated Water Supply Contract for Treated Water, Page 3
(4) rating agency fees, and
(5) initial fees and expenses of a trustee, if any;
(e) costs required to be paid under the terms of any contract or contracts in
connection with the Project;
(f) sums required to reimburse BAWA or CITY for advances made by either of
them for any of the above items, including fees of any kind for any other cost
incurred, including expenses for organization or BAWA, overhead expenses
and expenses for any work done by either BAWA or CITY which are
properly chargeable to the Project; and
(g) costs of all other items related to the acquisition of the Project.
1.10 "Director" shall mean the Director of Utilities of the City of Baytown or any
successor department and all persons designated by the Director to administer the sale and
delivery of water to customers within the City of Baytown.
1.11 "General Manager" shall mean the General Manager of the Baytown Area Water
Authority or any successor agency and all persons designated by the General Manager to
administer the sale and delivery of water to CITY.
1.12 "MGD" is an abbreviation for million gallons of water per day. As used in this
contract, "MGD" refers to a quantity of water during a period of time expressed for
convenience in terms of an average daily quantity during a calendar month (unless a different
period of time is specified). The volume of two MGD for a calendar month, for example,
is calculated as follows: Two million gallons multiplied by the number of days in such
calendar month.
1.13 "Pledged Revenues" means the payments to be made by CITY to BAWA for treated
water and pledged in a Bond Resolution for payment of the principal of, premium, if any,
and interest on the bonds issued pursuant to the terms of this Contract.
1.14 "Point of Delivery" shall mean those delivery points as indicated on Exhibit "A,"
which is attached hereto and incorporated herein for all intents and purposes, to which
BAWA agrees to deliver treated water to CITY.
1.15 "Point of Measurement" shall mean the location of the meter at which CITY's
consumption of water is measured, more particularly described in Exhibit "A."
Amended and Restated Water Sui)oly Contract for Treated Water, Page 4
l .16 "Proiect" means the property, works, facilities and improvements, whether previously
existing or to be made, constructed or acquired, within or without the boundaries of BAWA,
necessary
(a) to acquire surface water supplies from sources both within and without the
boundaries of BAWA, including particularly the sources provided by
BAWA's Contract (hereinafter defined),
(b) to conserve, store, transport, treat and purify untreated water purchased by
BAWA pursuant to BAWA's Contract, and
(c) to distribute, sell and deliver treated water to CITY pursuant to the terms of
the Contract.
1.17 "Service Area" shall mean the area within the boundaries more particularly described
in Exhibit "B," which is attached hereto and incorporated herein for all intents and purposes.
1.18 "TNRCC" shall mean the Texas Natural Resource Conservation Commission or its
successor.
1.19 "Water" shall mean potable water meeting the minimum drinking water standards
prescribed by Texas Department of Health Resources and Texas Natural Resource
Conservation Commission, and their successor agencies.
ARTICLE II
SALE AND DELIVERY OF WATER
2.01 Subject to the terms and conditions of this contract, during the Contract Term,
BAWA agrees to sell and deliver (or cause to be delivered) to CITY, all of CITY's water
requirements of treated water for municipal purposes at the Points of Delivery at daily rates of
delivery; and CITY agrees to purchase from BAWA, all of CITY's treated water requirements for
municipal purposes (as such term is defined by the TNRCC in its rules) at such Points of Delivery
during the term of this Contract. It is expressly agreed to and understood that BAWA shall not be
obligated to deliver to CITY treated water in excess of the Contract Quantity which shall be the
monthly average per day of 10.71 MGD.
2.02 The Points of Delivery for treated water sold under this contract shall be designated
in %witing by CITY; provided, however, BAWA reserves the right to reject any point of delivery
designated by CITY which would affect, interfere with or increase the cost of any other facilities or
operations which BAWA might wish to construct or implement, or plan to construct or implement,
or which would adversely affect BAWA's ability to provide treated water to any of its customers.
Amended and Restated Water Sunoty Contract for Treated Water, Page 5
Both BAWA and CITY agree that the points of delivery shall be those indicated on Exhibit "A,"
which is attached hereto and incorporated herein for all intents and purposes. Additionally, CITY
may give BAWA notice in writing of any additional or change in point(s) of delivery designated by
CITY, and BAWA agrees to accept or reject such point(s) of delivery by a response in writing within
thirty (30) days after BAWA's receipt of the notice.
2.03 Treated water may be delivered to CITY from any source or combination of sources
available to BAWA.
2.04 The treated water to be delivered shall meet minimum standards prescribed by the
State of Texas for municipal purposes (as such term is defined by the TNRCC in its rules) and shall
be only used by CITY within the Service Area.
2.05 1 f CITY wishes to reserve for itself additional monthly quantities of treated water,
CITY must notify BAWA in writing of CITY's desire to do so. The General Manager may, at his
discretion after considering the treated water requirements of CITY and its obligations and
commitments, increase the quantity of treated water supplied to CITY; provided, however, that
BAWA shall be under no obligation to deliver treated water in excess of Contract Quantity. CITY
may, at its discretion, discontinue delivery of such additional monthly requirements of treated water
by giving BAWA thirty (30) days' written notice.
2.06 CITY shall own and be responsible for all lines connected to BAWA's transmission
line, beginning at the point where the metering device is installed to meter sales to CITY.
ARTICLE III
CONSTRUCTION OF THE PROJECT
3.01 BAWA agrees to proceed promptly with the acquisition and construction of the
Project with the proceeds of the Bonds or, at the option of BAWA, other money lawfully available
for such purpose. BAWA does not anticipate any delays in commencing or completing the Project,
but BAWA shall not be liable to CITY for any damages occasioned by the acquisition, construction
or completion of the Project or any delays in completion of the Project.
3.02 If BAWA desires to materially revise the scope of or the plans and specifications for
the Project, such proposed revisions shall be submitted to CITY for approval. if CITY approves
such revisions, the Project shall be modified. No such modification shall, however, revise the
Project in such a manner as to change the purpose of the Project from receiving, treating and
supplying surface water for the benefit of CITY.
Amended and Restated Water Supply Contract for Treated Water, Page 6
ARTICLE IV
RATES AND PRICES
4.01 The City agrees to pay BAWA's costs through the establishment of rates for the
purchase of treated water and by payments to BAWA based on such established rates. BAWA and
the City shall periodically establish rates for the purchase of treated water. Billing at the rate for
water as specified hereinbelow shall commence as of November 26, 1996.
4.02 Whenever CITY's consumption shall exceed Contract Quantity by ten percent (10%),
a five percent (5%) surcharge shall be charged against that portion of the consumption that exceeds
the Contract Quantity. Provided, however, this surcharge shall not apply to any increase in the
quantity of treated water granted by the General Manager pursuant to Section 2.05 hereof.
4.03 All water sold and delivered by BAWA to CITY for which CITY is obligated to pay
hereunder shall be sold to CITY at the rate of $ l .18 per one thousand gallons.
4.04 The amount of water delivered to CITY shall be measured by the metering equipment
located at the treatment plant which measures the total quantity of treated water delivered into the
transmission lines, with the amount delivered to CITY being the total delivered into the transmission
line at the plant, less such amounts sold/metered to other customers of the Authority.
4.05 Additionally, CITY understands and agrees that BAWA may at any time, by order
duly enacted, increase or change the price or prices for treated water as set forth in this article;
provided, however that except where an independent rate analysis conducted by a qualified concern
indicates that certain rate increase is required, the price or prices for treated water shall not be
increased percentagewise to CITY during any twelve (12) month period of this contract in excess
of the percentage rate increase in BAWA's water rates to other purchasers of treated water during
the same period.
ARTICLE V
ISSUANCE AND SALE OF BONDS; CITY'S PAYMENT OF PLEDGED REVENUE
AND OTHER AMOUNTS
5.01 Pursuant to the authority granted by the Act, BAWA agrees, upon the request of
CITY, to issue and sell, from time to time, Bonds in the amounts sufficient to provide the Project
and pay the Costs of the Project. The Bonds shall have the form and the characteristics; bear the
designation; bear the date or dates; mature at such time or times, serially, term, or otherwise, in not
more than forty (40) years from their dates; bear interest at the rate or rates, payable annually,
semiannually, quarterly, or otherwise; be in the denominations; be in the form, either coupon or
Amended and Restated Water Supply Contract for Treated Water, page 7
registered; carry the registration privileges as to principal only or as to both principal and interest
and as to successive exchange of coupon for registered bonds or notes or vice versa, and successive
exchanges of bonds or notes of one denomination for bonds or notes of other denominations; be
executed in the manner; be payable at the place or places within or without the state; and be sold for
the price or prices, all as provided in the Bond Resolution.
5.02 In consideration of BAWA's agreement to issue the Bonds and as a part of BAWA's
costs, CITY agrees to pay (i) Pledged Revenues to BAWA pursuant to and in accordance with the
terms of any Bond resolution and (ii) the periodic fees, charges, and expenses of any trustee and
paying agent in connection with the Bond. The amount of the Pledged Revenues to be paid by CITY
may be increased from time to time by the issuance and sale of additional Bonds.
5.03 CITY shall pay the Pledged Revenues in the amounts and at the times designated in
the Bond Resolutions. City shall pay the Pledged Revenues in addition to the amounts payable
pursuant to Section 4.03 hereof.
5.04 In the event CITY should fail to make any payment required by this article, such
payment shall continue as an obligation of CITY until such overdue amount shall have been fully
paid.
5.05 The parties to this Contract recognize that Bonds may be secured by a trust indenture
with respect thereto and the payments of the Pledged Revenues may be pledged therein. CITY
expressly consents to such procedures and will comply with any such trust indenture securing the
Bonds. The parties to this Contract recognize the necessity of complying with all requirements of
any such trust indenture, including the right of the trustee under any such indenture to require
increases or to permit decreases in the amount of the Pledged Revenues and other payments and to
enforce any remedies described herein.
5.06 The parties to this Contract further recognize that from the proceeds of the sale of the
Bonds, BAWA may establish a reserve fund or funds in the amount or amounts and for the purpose
or purposes set out in any Bond resolution. Such reserve fiend or funds shall be used for the payment
of any maturing principal of and interest on the Bonds when the amount in the applicable interest
and sinking fund is insufficient, or for the payment of the last maturing principal of the interest on
the Bonds. BAWA shall invest and reinvest or cause to be invested or reinvested, the reserve fund
or fund in accordance with law, and the income therefrom may be periodically transferred to the
interest and sinking fund applicable to the Bonds; or, in the event that the parties hereto so
determine, a reserve fund or funds in an amount or amounts different from the aforementioned
amount may be established and the income from investment of such additional amount may be
deposited in such reserve funds.
5.07 The source of funds for CITY to make the payments of the Pledged Revenues shall
include any and all available sources that CITY may pledge toward such payments, including gross
Amended and Restated Water Supply. Contract for Treated Water, Page 8
revenues of appropriate utility systems and those sources provided by Chapters 49 and 54, Texas
Water Code and Section 402.014 of the Texas Local Government Code, as amended.
5.08 A copy of any Bond Resolution, showing the principal amount of and interest rate
on the Bonds, the maturities of the Bonds, the name of the purchaser thereof, and other pertinent
features, must be delivered to and approved by City prior to issuance and delivery of the Bonds.
5.09 The parties to this Contract agree and understand that the holders of the Bonds shall
rely upon such approval of CITY and upon CITY's promise to pay the Pledged Revenues specified
herein. Therefore, CITY covenants and agrees that such payments of the pledged Revenues shall
be made regardless of the status of the acquisition of the Project and without setoff or counterclaim
and, notwithstanding any other provisions of this Contract, the holders of the Bonds shall be entitled
to rely upon the foregoing covenants and agreements regardless of any other agreements between
CITY and BAWA.
ARTICLE VI
REPORTS
6.01 Within fifteen (15) days after the end of each quarterly period during the term of this
Contract, CITY shall fumish BAWA with a statement under oath showing the quantities and sources
of all water for use or resale by CITY.
ARTICLE VII
M EASURING_E_OUI PM ENT
7.01 All measuring equipment shall be owned by BAWA, even when purchased by CITY,
and all measuring equipment shall be located at the Point of Measurement as shown on Exhibit "A."
7.02 During all reasonable hours as determined by the General Manager in his sole
discretion, CITY, BAWA, the City of Houston, and the Coastal Water Authority of Texas shall have
access to the measuring equipment. CITY may have access to all records pertinent to determining
the measurement and quantity of treated water actually delivered hereunder, but the reading of the
measuring equipment for purposes of billing shall be done by BAWA.
7.03 BAWA shall maintain the measuring equipment within the accuracy tolerance
specified in Section 7.04 by periodic tests. BAWA shall conduct such tests at least once every
twelve (12) months and shall notify CITY at least forty-eight (48) hours in advance of the time and
location at which tests are to be made. BAWA agrees to properly test said measuring equipment at
BAWA's cost when requested to do so by CITY once every twelve (12) months. If CITY requests
an additional test within twelve (12) months, BAWA shall charge CITY an amount equal to
Amended and Restated Water Sutsoly Contract for Treated Water, Page 9
BAWA's costs to perform such test unless the test reveals that the equipment registers one hundred
two percent (102%) or more for a given flow rate. In addition, CITY shall have the right to
independently check, at its own cost, said measuring equipment at any time upon forty-eight (48)
hours' notification to the General Manager and opportunity for the General Manager to witness such
tests.
7.04 Should any test of the measuring equipment in question show that the equipment
registers either more than one hundred two percent (102%) or less than ninety-five percent (95%)
of the water delivered for a given flow rate, the total quantity of water delivered to CITY will be
deemed to be the average daily consumption as measured by the measuring equipment when in
working order, and the meter shall be calibrated to the manufacturer's specifications (in the case of
Venturi meters) or the AWWA specifications (for all other types of meters) for the given rate of
flow, or replaced by BAWA with accurate measuring equipment that is tested before it is placed in
service. The adjustment shall be for a period extending back to the time when the inaccuracy began,
if such time is ascertainable; and if such time is not ascertainable, for a period extending back to the
last test of the measuring equipment or one hundred twenty (120) days, whichever is shorter. If, for
any reason, the measuring equipment is out of service or out of repair and the amount of treated
water delivered cannot be ascertained or computed from the reading thereof, water delivered during
the period shall be estimated and agreed upon by the parties hereto on the basis of the best data
available.
As used in this section, the expression "given rate of flow" means one of the following
selected by the General Manager:
(a) the total quantity of water delivered during the preceding period (usually a calendar
month) as reflected by the totalizer, converted to gallons per minute;
(b) high, low and intermediate rates of flow in the flow rate, as reflected by the flow
recording devices;
(c) the applicable Contract Quantity for the current period, usually a calendar month,
converted to gallons per minute; or
(d) AWWA-specified test flow rates for that size and type of meter.
7.05 In the event of a dispute between BAWA and CITY as to the accuracy of the testing
equipment used by BAWA to conduct the accuracy test, an independent check may be mutually
agreed upon between CITY and BAWA and shall be conducted by an independent measuring
equipment company suitable to both CITY and BAWA. The cost of such test shall be at CITY's sole
expense.
Amended and Restated Water Supply Contract for Treated Water, Page 10
7.06 CITY may install, at its own cost and expense, such check meters in CITY's pipeline
or canal as may be deemed appropriate, but BAWA shall have the right of ingress and egress to such
check meters during all reasonable hours; provided, however, that billing computations shall be on
the basis of the results of the measuring equipment set forth above.
ARTICLE VIII
BILLING AND PAYMENT
8.01 As used in this Article VIII, the term "day" shall mean a period of twenty-four (24)
consecutive hours beginning at a mutually agreed -upon time on one calendar day and ending at the
same time on the next succeeding calendar day, and the term "month" shall mean a period beginning
at a mutually agreed -upon time on the first day of a calendar month and ending at the same time on
the first day on the next succeeding calendar month.
8.02 The measuring equipment shall be read on the day at the end of each month (or at
such period of frequency arranged between the parties) and at a mutually agreed upon time, or as
near thereto as practicable.
8.03 The quantities of treated water for which payment is due by CITY hereunder in any
month shall be the total quantity of treated water delivered to CITY in such month determined by
the measuring equipment described in Article V hereof.
8.04 BAWA shall bill CITY at CITY's address within ten (10) days after the read date by
a statement showing the quantity of water used during the preceding month. Payment shall be due
and payable to BAWA at its offices in Baytown, Harris County, Texas, on or before the twentieth
day after receipt of such statement. City shall pay Pledged Revenues as provided in Section 5.03.
8.05 Should CITY fail to tender payment of any amount when due, interest thereon shall
accrue at the rate of ten percent per annum from the date when due until paid and CITY shall be
deemed to be in default.
ARTICLE IX
TITLE TO AND RESPONSIBILITY FOR WATER
9.01 As between BAWA and CITY, BAWA shall be in exclusive control and possession
of, and solely responsible for, all treated water deliverable hereunder and solely responsible for any
damage or injury caused thereby until the same shall pass through the Point of Delivery and
thereafter, CITY shall be in exclusive control and possession thereof and solely responsible for any
injury or damage caused thereby.
Amended and Restated Water Supply Contract for Treated Water, Page t t
9.02 BAWA MAKES NO WARRANTY, EXPRESS OR IMPLIED, REGARDING THE
QUALITY OR DELIVERY PRESSURE OF TREATED WATER, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
9.03 With respect to all water handling facilities located between the Point of Delivery and
the Point of Measurement, BAWA and CITY specifically agree:
(a) that all such facilities, other than the measurement equipment itself, shall be and
remain the property of CITY subject to the terms of this Contract;
(b) that CITY shall take all reasonable steps to maintain such facilities and to prevent
leaks or discharges from such facilities;
(c) that CITY shall repair any such leak or discharge at once upon receiving notice
thereof and pay BAWA the price of any water lost by reason of such a leak or
discharge;
(d) that CITY shall correct or repair any damage caused by any such leak or discharge
and shall hold BAWA harmless from and against any such damage and claims
therefore;
(e) that CITY shall alter or relocate, at its sole cost, any such facilities whenever BAWA
shall reasonably request in writing that the same be done; and
(f) that CITY shall promptly remove such facilities and restore their locations to their
pre-existing conditions whenever this Contract is no longer in effect and BAWA so
requests in writing.
ARTICLE X
TERM
This Contract as amended and restated shall remain in force and effect until December 31,
2020, at 8:00 a.m.; provided that this Contract shall continue in effect until all of the Bonds are paid.
ARTICLE XI
PERFORMANCE BY BAWA AND CITY
11.01 BAWA covenants and agrees that it will not contract for the sale of water to other
users to such an extent or for such quantities as to impair BAWA's ability to perform fully and
punctually its obligations to CITY under this Contract. In case of temporary shortage of water,
Amended and Restated Water Supply Contract for Treated Water, Page 12
notwithstanding BAWA's compliance with the portions of this Article Xl, BAWA shall distribute
the available supply as provided by the laws of the State of Texas, particularly Section 11.039(a) of
the Texas Water Code, as amended.
11.02 Pursuant to the Amendatory Contract entered into by the City of Houston and the San
Jacinto River Authority, which is incorporated herein by this reference, CITY covenants and agrees
that it shall take treated water for the purpose of distribution through its municipal water system, and
such water shall be used for municipal purposes (as such term is defined by TNRCC Rules, currently
in effect or as hereinafter amended) and for no other purposes. CITY covenants and agrees that such
treated water shall be sold, distributed or used and ultimately consumed only for residential
household or other strictly municipal purposes exclusively within the Service Area. No extension
of these boundaries may be made by CITY without written consent of BAWA as well as the written
consent of the San Jacinto River Authority and City of Houston, when required pursuant to the
Water Supply Contract between the City of Houston and BAWA, dated October 24, 1994. CITY
agrees to include covenants similar to those contained in this Section 11.02 in any sales or contracts
for sale of water by CITY to any other entity. CITY agrees to submit the wording of such covenants
to BAWA for the written approval of BAWA and all other required entities prior to entering into
such contracts.
CITY understands and agrees that BAWA, the City of Houston and/or the San Jacinto River
Authority may enforce the covenants contained in Section 11.02 herein by an action brought directly
against CITY. In the event that BAWA and/or the City of Houston maintains any legal proceeding
to enforce such covenants, CITY agrees to indemnify BAWA and/or the City of Houston in the
amount of all expenses relating to the legal proceeding, including, but not limited to, costs of court
and reasonable attorneys' fees.
11.03 CITY acknowledges that according to the terms of the contract between BAWA and
the City of Houston, BAWA may be liable to the City of Houston and/or the San Jacinto River
Authority for monetary damages in the event that CITY (or any purchaser of water from or through
CITY) fails to comply with the restrictions and limitations on the sale of water set out in Section
11.02 herein. CITY acknowledges that such monetary damages would amount to seventy-five
percent (75%) of the consideration or revenue received by BAWA for the estimated amount of water
distributed, sold or used in violation of such restrictions or limitations, plus all litigation expenses,
reasonable attorneys' fees, and all other remedies available to the City of Houston and/or the San
Jacinto River Authority. CITY hereby agrees to totally indemnify, defend, and save BAWA
harmless from and against any such expenses and liability which BAWA might incur or any loss
BAWA might suffer, as a result of any failure by CITY, or any purchaser of water from or through
CITY, to comply with such restriction and limitation. CITY agrees that in the event that CITY
furnishes or sells water or water services to a third party that in turn will famish water to the ultimate
consumer, CITY shall include covenants in any such sales or contracts for sale of water to such third
party(ies) to ensure that said other entity(ies) will likewise indemnify, hold harmless, and defend
Amended and Restated Water Suonly Contract for Treated Water, Page 13
BAWA. CITY agrees to submit the wording of such covenants for the approval of BAWA prior to
entering into such contracts.
CITY acknowledges that according to the terms of the contract between the City of Houston
and the San Jacinto River Authority, the City of Houston may be liable to the San Jacinto River
Authority for monetary damages in the event that CITY (or any purchaser of water from or through
CITY) fails to comply with the restrictions and limitations on the sale of water set out in Section
11.02 herein. CITY acknowledges that such monetary damages would amount to seventy-five
percent (75%) of the consideration or revenue received by the City of Houston for the estimated
amount of water distributed, sold or used in violation of such restrictions or limitations, plus all
litigation expenses, reasonable attorneys' fees, and all other remedies available to the San Jacinto
River Authority. CITY hereby agrees to fully indemnify, defend, and save the City of Houston
harmless from and against any such expenses and liability which the City of Houston might incur
or any loss the City of Houston might suffer, as a result of any failure by CITY, or any purchaser of
water from or through CITY, to comply with such restrictions and limitations. CITY agrees that in
the event that CITY furnishes or sells water or water services to a third party that in turn will furnish
water to the ultimate consumer, CITY shall include covenants in any such sales or contracts for sale
of water to such third party(ies) to ensure that said other entity(ies) will likewise indemnify, hold
harmless, and defend the City of Houston. CITY agrees to submit the wording of such covenants
for the approval of BAWA and the City of Houston prior to entering into such contracts.
11.04 CITY agrees to maintain, at its sole expense, its water wells, if any, in good repair
and working order to facilitate the use of such water wells as an emergency source of supply, if
required, should BAWA be unable to deliver the Contract Quantity of water for any reason. CITY
shall bear all costs of maintaining and supplying such emergency sources of supply.
ARTICLE XII
ENVIRONMENTAL CONSIDERATIONS
12.01 On or before the first anniversary of the effective date of this contract, CITY shall
approve, implement and throughout the term hereof remain in full compliance with a water
conservation program in accordance with the requirements of the TNRCC. Such plan (and any
amendments thereto) shall be submitted to the appropriate authority as required by state law for
review and approval. In the event that the TNRCC adopts new requirements, CITY shall adopt an
amended plan and submit the same to the appropriate authority for review and approval.
12.02 CITY agrees that in the event that CITY furnishes or sells water or water services to
a third party that in turn will furnish water to the ultimate consumer, the requirements of this
Contract relative to water conservation shall be met through contractual agreements between CITY
and the third party, providing for the implementation and continued compliance with a water
conservation program consistent with the requirements of the TNRCC.
Amended and Restated Water Supply Contract for Treated Watgr, Page 14
ARTICLE XIII
REMEDIES UPON DEFAULT
13.01 In the event of any default by CITY in the performance of any of CITY's obligations
hereunder which shall continue for a period of thirty (30) days or more, BAWA shall give written
notice to CITY specifying the matter with respect to which CITY is in default and requesting that
the same be remedied with promptness and dispatch. In the event CITY, within forty-five (45) days
after the mailing of such notice by BAWA, has failed to remedy the matter in default, BAWA may
suspend further delivery of treated water to CITY hereunder; and in the event such default on the
part of CITY continues for an additional thirty (30) days, BAWA may, by an additional written
notice to CITY, cancel and terminate this contract, whereupon all rights of CITY and all obligations
of BAWA hereunder shall terminate and be at an end. The exercise of such rights shall be in
addition to any other remedies available to BAWA under the laws of the State of Texas.
13.02 During any monthly period in which BAWA is unable to deliver to CITY, CITY's
daily requirements of water, whether as a result of temporary curtailments resulting from temporary
shortages as provided in Section 11.01 hereof or of force majeure as provided in article X1I hereof,
CITY shall be obligated to pay BAWA only for the quantities of treated water actually delivered to
CITY under this contract during such month. During any such period, CITY shall be free to obtain
treated water from other sources. The provisions of this section shall not relieve the City of its
obligation to pay Pledged Revenues.
13.03 The failure of either party to insist in any one or more instance upon performance of
any of the terms, covenants or conditions of this Contract, shall not be construed as a waiver or
relinquishment of the future performance of any such term, covenant, or condition by the other party
hereto, but the obligation of such other party with respect to future performance shall continue in full
force and effect.
ARTICLE XIV
FORCE MAJEURE
14.01 In the event either party is rendered unable, wholly or in part, by force majeure to
carry out any of its obligations under this Contract other than the payment of money, or in the event
CITY is rendered unable, wholly or in part, by force majeure to operate CITY's facilities, it is agreed
that on such party's giving notice and full particulars of such force majeure in writing or by telefax
or telegraph to the other party as soon as possible after the occurrence of the cause relied upon, then
the obligations of the party given such notice, to the extent it is affected by force majeure and to the
extent that due diligence is being used to resume performance at the earliest practicable time, shall
Amended and Restated Water Sunvly Contract for Treated Water, Page IS
be suspended during the continuance of any inability so caused as to the extent provided but for no
longer period. Such cause shall as far as possible be remedied with all reasonable dispatch.
14.02 The term "force majeure" as used herein, shall include, but not be limited to, acts of
God, strikes, lockouts, or other industrial disturbances, acts of the public enemy, war, blockades,
insurrections, riots, epidemics, landslides, lighting, earthquakes, fires, storms, floods, washouts,
droughts, tornadoes, hurricanes, arrests and restraints of government and people, explosions,
breakage or damage to machinery, equipment, pipelines or canals, and any other inabilities of either
party whether similar to those enumerated or otherwise and not within the control of the party
claiming such inability which by the exercise of due diligence and care such party could not have
avoided.
14.O3 It is understood and agreed that the settlement of strikes or lockouts shall be entirely
within the discretion of the party having the difficulty and the above requirement that any force
majeure be remedied with all reasonable dispatch shall not require the settlement of strikes or
lockouts by acceding to demands of the opposing party when such course is inadvisable in the
discretion of the party having the difficulty.
14.04 CITY shall not be guaranteed any specific quantity or pressure of water whenever
BAWA's treated water supply is limited or when BAWA's equipment may become inoperative due
to unforeseen breakdown or scheduled maintenance and repairs, and BAWA is in no case to be held
to any liability for failure to furnish any specific amount or pressure of water. BAWA agrees that
it will attempt to make any necessary repairs or adjustments to its equipment within reasonable times
mutually agreeable to both parties. It is farther agreed that BAWA may, without liability of default,
interrupt its services hereunder to make necessary alterations to or repairs in its facilities, but only
if such interruption cannot otherwise reasonably be avoided. BAWA shall schedule interruptions
in advance after consultation with CITY.
ARTICLE XV
ADDRESS AND NOTICES
15.01 Until CITY is otherwise notified in writing by BAWA, the address of BAWA is and
shall remain as follows:
Baytown Area Water Authority
Attn: General Manager
2401 Market Street
Baytown, Texas 77520
Until BAWA is otherwise notified in writing by CITY, the address of CITY is and shall
remain as follows:
Amended and Restated Water Sugoly Contract for Treated Water, Page 16
City of Baytown
Attn: City Manager
2401 Market Street
Baytown, Texas 77520
15.02 All written notices, statements, and payments required or permitted to be given under
this Contract from one party to the other shall be deemed given by telefax or the deposit in a United
States Postal Service mailbox or receptacle of certified or registered mail, with proper postage
affixed thereto, addressed to the respective other party at the address set forth above or at such other
address as the parties respectively shall designate by written notice.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
16.01 This contract shall bind and benefit the respective parties and their legal successors,
but shall not otherwise be assignable, in whole or in part, by either party without first obtaining the
written consent of the other; provided, however, that CITY shall have the right, without any consent
of BAWA to pledge or otherwise assign CITY's rights hereunder to the extent required by any
mortgage, deed of trust or other similar agreement to which CITY may be, or hereafter become a
party ; and provided, further, however, that no successor or assignee of CITY shall be entitled to
receive water or sell water to a third party under this Contract unless and until the City of Houston
and the San Jacinto River Authority give their written consent to such assignment.
16.02 This Contract shall be for the sole and exclusive benefit of BAWA and CITY and
shall not be construed to confer any rights upon any third party, except as expressly provided in
Article V. BAWA shall never be subject to any liability in damages to any customer of CITY for
any failure to perform under this Contract.
16.03 This Contract shall be subject to all present and future valid laws, orders, rules and
regulations of the United States of America and the State of Texas and of any regulatory body having
jurisdiction.
16.04 This instrument contains all the agreements made between the parties concerning the
sale and delivery of water by BAWA to CITY at the Point of Delivery set out in this Contract.
16.05 The construction, interpretation and performance of this Contract shall be governed
by the laws of the State of Texas.
Amended and Restated Water Sumb Contract for Treated Water, Page 17
16.06 All parties agree that should any provision of this Contract be determined to be
invalid or unenforceable, such determination shall not affect any other term of this Contract, which
shall continue in full force and effect.
16.07 Each party has the full power and authority to enter into and perform this Contract,
and the person signing this Contract on behalf of each party has been properly authorized and
empowered to enter into this Contract. The persons executing this Contract hereby represent that
they have authorization to sign on behalf of their respective entities.
16.08 The parties acknowledge that they have read, understand and intend to be bound by
the terms and conditions of this Contract.
IN WITNESS WHEREOF, the parties hereto have executed this contract as of the 23' day
of October, 1997, in multiple copies each of which shall be deemed to be an original, but all of
which shall constitute but one and the same contract.
CITY OF BAYTOWN
PETE C. ALFARO, Mayor
ATTEST:
EILEEN P. HALL, City Clerk
BAYTOWN AREA WATER AUTHORITY
ROBERT L. GILLETTE, President
A'rrEST:
4&�Ae
=Z
PETER R. BUENZ, Sec tary
c:kll%6'%BA WAkCit�ofl3aylownDA WA.AmendedRwatcdConlract
Amended and Restated Water Supply Contract for Treated Water, Page I &
Exhibit A
Point of Measure
TEXAS WATER COMMISSION
CERTIFICATE OF CONVENIENCE .AND NECESSITY
To Provide Water Service Under V.T.C.A., water Code
and Texas water Commission Substantive Rules
Certificate No. ias6o
I. Certificate holder:
Name: City of Baytown
Address: P. 0. Box 424
Baytown, Texas 77522-0424
II. General Description and Location of Service Area:
AR.RIS COUNTY:
The area covered by this certificate in Harris County is located
approximately 22 miles east of Houston, Texas on State Highway
146. The service area is generally bounded on the north by
portions of Decker Drive, Baker Road, South Road and Massey-
Tomkins Road; on the south by Scott Bay, Black Duck Bay and Tabbs
Bav; on the east by Cedar Bayou; and, on the Nest by Burnet Bav
and Crystal. Bay. -
Dual certification exists with Bavtovn Area water lutho:_ty, CC:
No. 10872.
Cr a ?-SBERS COUNTY
Pineburst Subdivision - The area covered by this ca tif;cate in
Chambers County is located approximately 13.5 Miles west/northwest
of downtown Anahuac, Texas on State Highway 146. The service area
is generally bounded on the north by willow Oak Drive, on the
northeast by the Southern Pacific Railroad, on the south by
Cherokee Street, on the west by Cedar Bayou and on the southeast
by State Highway 146.
Cedar Bend Subdivision - The area covered by this certificate in
Chambers County for Cedar Bend Subdivision is located
approximately 13.5 miles west of downtown Anahuac, Texas on State
Highway 146. The service area is generally bounded on the east
by State Highway 146 and on the west by Cedar Bayou.
Lincoln Cedar Subdivision -- The area covered by this certificate
in Chambers County is located 13.5 miles west of downtown Anahuac,
Texas on State Highway 146. The service area 2.s genera11y
3
I I, �-LZ6, 9S dOd
10
sv
46
g6soZ j = a 09801
L931 v: 098 q 170
x Z1.601
�r 6L01
ca
co
dtoz
oi-
426
ILA
BPI low
41
CONTRACT ANIENDIMENT
STATE OF TEXAS §
COUNTY OF HARRIS §
This CONTRAC'I' A11ENDMENT ("the Amendment") is reticle and entered into by and
between the Bayiown Area Water Authority, a movemimemal entity and body politic and corporate. which
is situated and has its principal office at Baytown, 11arris County, Texas (-BAWA-) and the City of
Baytown, Texas a municipal corporation and home -rule city, which is principally situated and has its City
Ifall in Hanis County, Texas ("City")
WITNESSh,TH
WHEREAS, the City and the BAWA enterers into a Water Supply Contract - Treated Witter
dated January 31, 1977; acid
WHEREAS, thereafter on November G, 1997, such ,agreement was amended and restated (the
"'Amended and Restated Water Supply Contract") in order to extent) the term of the agreement and to
incorporate all amendments and Supplements: and
WHEREAS, on jnnrenrv_, 2005, BAWA amended its 1Vater Supply Contract Keith the
C. av of Houston try extend [lie terns of the contract and increase: the contract quartllty: and
WHEREAS, the City and BAWA desire to amend the Amended and Restated Water Supply
Contract to liken Ise extend the term of the contract and increase the cone act rlrt,:nuty;
NOW, THEREFORE', ORE', for and to consideration of the premises and tilutual covenants and
ag,reenients herein contained. the parties hereby agree as fol)ow.s:
1.
The definition of "BA WA Contract" contained in Section I Al 2 of the; Amended and Restated
Water Supply Comract between 13AWA and the City (if' Baytown is amcn&d to include the Contract
Amendment dated , qua 3_, 2005, which iti attachedhereto as Exhibit -A-and incorporated herein
Cor ail intent anti purpose,.
Section 2.1 of the ATIMided and Rtwated Water Supply Con.riwt is :tmended by increasing the.
Contract Quantity (as defined therein) to 14.22 million gallons per day
M.
Article VIll oi" the Amended and Re,tated 1Vatc.r Supply Contract is amended by extending the
termination date to December 31, 2040.
r art .��inendm{j�t, P.k.vt•
IV.
This Amendment shall become effective upon the effective date of the amended BAWA Contract
Its defined herein,
V.
The Amended and Rc:stottxl \Voter Supply C0111f Wt bettweca the parties hereto and this
:intendment arc the entire agreement of the parties. In the event of any conflict bctween a provision of
tlic Amended and Restated Witter Supply Contract and this AntCndmetlt, the provision of lus Amendment
shall control.
IN WITNESS WIIEREOF, the parties hcrcin have stgtu:d this Amendment in multiple copies
each of ,which shall be decsned to be an ori,1-inal, but all of which shall constitute hut'one ;end the same
contract. as of the date of the amendrnew to the f A\VA Contract specified above.
BAY'TOWN AREA \VA'TER AUTIIUttITY
BAYTOWN, HARRIS COUNTY, TEXAS
("BAWA"),,
1?()I31-RT l.. GII,L.I:TTE, President
"VI TEST:
G\R1 \IITI1. •\a,i.tant Secretan-
APPROVED AS TO F010i:
4�1 =:,<-AAI(
tNACIO RAMIREZ. S V.eneral Counsel
CITY OF DAY'I O1 N,1 ERAS
("CITY")
CALL IN NIl. NDIT' GER, Mayor y~
ATTEST:
6ARY S.11Tli, City C'lcr'
APPROVED AS TO FORNI:
ill/ 112
w"61111C.11111%goo, lc==e�K
eKAACI0 RAMIREZ. StXitv Attontey
ii�_ «ti¢alu,r4 K.11c,i t-4k, k 4%Ftr`.t41. I18W A { .ITHC4.r A11 4 31 I-114 ,of Nix a}ur., n [ owractArnen.fir.; m 1 it A
f',�^q,�et,hrrn,3mar�', Pates 2
CONTRACT AMENDMENT
STATE OF TEXAS §
COUNTIES OF HARRIS AND CHAMBERS §
This Contract Amendment (the "Amendment") is made and entered into by and between
the Baytown Area Water Authority, a governmental entity and body politic and corporate, which
is situated and has its principal in the City of Baytown, Texas, Harris County ("BAWA") and the
City of Baytown, Texas, a municipal corporation home -rule city, which is principally situated
and has its City Hall in Hams County, Texas (the "City").
WITNESSETH:
WHEREAS, the City and BAWA entered into a Water Supply Contract — Treated Water
dated January 31, 1977, which was amended and restated on November 6, 1997 and further
amended by action dated October 26, 2004 (the "2004 Amendment," and collectively the
"Contract"); and
WHEREAS, the City and BAWA wish to clarify the provision of the 2004 Amendment
that extended the termination date of the Contract by correcting the Article of the Contract
referenced in the 2004 Amendment;
NOW, THEREFORE, for and in consideration of the premises and mutual covenants and
agreements herein contained, the parties hereby agree as follows:
1.
Article X of the Contract shall be amended and restated as set forth below:
ARTICLE X
TERM
This Contract as amended and restated shall remain in force and
effect until December 31, 2040; provided that this Contract shall
continue in effect until all of the Bonds are paid.
It.
The amendment to Article VIII of the Contract set forth in the 2004 Amendment is
hereby repealed.
This Amendment is effective as of February 23, 2012.
1V,
The Contract between the parties hereto and this Amendment are the entire agreement of
the parties. In the event of any conflict between a provision of the Contract and this
Amendment, the provision of this Amendment shall control.
IN WITNESS WHEREOF, the parties hereto have signed this Amendment in multiple
copies, each of which shall be deemed to be an original, but all of which shall constitute but one
and the same contract, as of the date hereof.
BAYTOWN AREA WATER AUTHORITY CITY OF BAYTOWN, TEXAS
RENDA BRADLEY ShM, President
ATTE�T:1 ? ;:
BRYSCH, A"tant Secretary
APPROVED AS TO FORM:
do9m "2g""z
'emmin .44
ACIO RAMIREZ, SR., GO& Counsel
APPROVED AS TO FORM:
ACIO RAMIREZ, SR., C' y ttomey
CONTRACT AMENDMENT
STATE OF TEXAS §
COUNTY OF HARRIS §
This CONTRACT AMENDMENT ("the Amendment") is made and entered into by and between
the Baytown Area Water Authority, a governmental entity and body politic and corporate, which is
situated and has its principal office at Baytown, Harris County, Texas ("BAWA') and the City of
Baytown, Texas, a municipal corporation and home -rule city, which is principally situated and has its
City Hall in Hams County, Texas ("City").
WITNESSETH
WHEREAS, the City and the BAWA entered into a Water Supply Contract — Treated Water
dated January 31, 1977; and
WHEREAS, thereafter on November 6, 1997, such agreement was amended and restated (the
"Amended and Restated Water Supply Contract'l in order to extend the term of the agreement and to
incorporate all amendments and supplements; and
WHEREAS, on January 3, 2005, BAWA amended its Water Supply Contract with the City of
Houston to extend the term of the contract and increase the contract quantity; and
WHEREAS, the City and BAWA amended its Water Supply Contract — Treated Water with the
City of Baytown (the "First Amendment") to extend the term of the contract and increase the contract
quantity, which amendment was effective on January 3, 2005; and
WHEREAS, on February 23, 2012, the City and BAWA clarified the First Amendment regarding
the extension of the termination date of the Amended and Restated Water Supply Contract (the "Second
Amendment"); and
WHEREAS, the City and BAWA desire to increase the contract quantity again based upon the
results of the City's alternative capacity requirement approved by the Texas Commission on
Environmental Quality by executing this Contract Amendment to the Water Supply Contract — Treated
Water (the "Third Amendment");
NOW, THEREFORE, for and in consideration of the premises and mutual covenants and
agreements herein contained, the parties hereby agree as follows:
Section 2.01 of the Amended and Restated Water Supply Contract is amended by increasing the
Contract Quantity (as defined therein) to 16 million gallons per day.
II.
This Third Amendment shall become effective on March 27, 2014.
The Amended and Restated Water Supply Contract between the parties hereto and the First
Amendment, the Second Amendment and this Third Amendment are the entire agreement of the parties.
In the event of any conflict between a provision of the Amended and Restated Water Supply Contract and
the amendments, the order of priority of documents is as follows:
1. Third Amendment;
2. Second Amendment;
3. First Amendment; and
4. Amended and Restated Water Supply Contract.
IN WITNESS WHEREOF, the parties hereto have signed this Amendment in multiple copies
each of which shall be deemed to be an original, but all of which shall constitute but one and the same
contract_
BAYTOWN AREA WATER AUTHORITY
BAYTOWN, HARRIS COUNTY, TEXAS
("BA WA")
Au,
BR NDA BR.ADLEY SMITH, Pr 'dent
ZAt T:
LETICIA BRYSCH, AsAtaht Secretary
APPROVED AS TO FORM:
2�0�� -
CFMACIO RAMIREZ, SR., Gen r Counsel
1
CITY OF BA TOWN, TEXAS
(-`City") /
�r
EPHEN H. DONCARLOS, Mayor
ATTE T:
r
LETICIA BRYSCH, Citylitlerk
APPROVED AS TO FORM:
e` NACIO RAMIREZ, SR., Ci ttorney
RAKarcnlFtics�ContractskDAWA Contract with the City of Bayt3Nrnti ritirdContracLAmendment doc
Contract Amendment. Pagc 2
CONTRACT AMENDMENT
STATE OF TEXAS §
COUNTY OF HARRIS §
This CONTRACT AMENDMENT ("the Amendment") is made and entered into by and between
the Baytown Area Water Authority, a governmental entity and body politic and corporate, which is
situated and has its principal office at Baytown, Hams County, Texas ("BAWA') and the City of
Baytown, Texas, a municipal corporation and home -rule city, which is principally situated and has its
City Hall in Harris County, Texas ("City').
WTITIESSETH
WHEREAS, the City and the BAWA entered into a Water Supply Contract — Treated Water
dated January 31, 1977; and
WHEREAS, thereafter on November b, 1997, such agreement was amended and restated (the
"Amended and Restated Water Supply Contract") in order to extend the term of the agreement and to
incorporate all amendments and supplements; and
WHEREAS, on January 3, 2005, BAWA amended its Water Supply Contract with the City of
Houston to extend the term of the contract and increase the contract quantity; and
WHEREAS, the City and BAWA amended its Water Supply Contract — Treated Water with the
City of Baytown (the "First Amendment") to extend the term of the contract and increase the contract
quantity, which amendment was effective on January 3, 2005; and
WHEREAS, on February 23, 2012, the City and BAWA clarified the First Amendment regarding
the extension of the termination date of the Amended and Restated Water Supply Contract (the "Second
Amendment"); and
WHEREAS, effective on March 27, 2014, the City and BAWA increased the contract quantity
based upon the results of the City's alternative capacity requirement approved by the Texas Commission
on Environmental Quality by executing this Contract Amendment to the Water Supply Contract — Treated
Water (the "Third Amendment"); and
WHEREAS, the City and BAWA desire to increase the contract quantity again by executing this
Contract Amendment to the Water Supply Contract — Treated Water (the "Fourth Amendment");
NOW, THEREFORE, for and in consideration of the premises and mutual covenants and
agreements herein contained, the parties hereby agree as follows:
1.
Section 2.01 of the Amended and Restated Water Supply Contract is amended by increasing the
Contract Quantity (as defined therein) to 21 million gallons per day.
coll= Mod east 1
This Fourth Amendment shall become cffewtive on January 18, 2017.
The Amended and Restated Water Supply Contract between the parties hereto, the First
Amendment, the Second Amendment, the Third Amendment and this Fourth Amendment are the entire
agreement of the parties. In the event of any conflict between a provision of the Amended and Restated
Water Supply Contract and the amendments, the order of priority of documents is as follows:
I. Fourth Amendment,
2. Third Amendment;
3. Second Amendment:
4. First Amendment; and
5. Amended and Restated Water Supply Contract.
IN WITNESS WHEREOF, the parties hereto have signed this Amendment in multiple copies
each of which shall be deemed to be an original, but all of which shall constitute but one and the sanic
contract.
BAYTO'WN .AREA WATER AUTHORITY
BAY TOWN. HARRIS COUNTY, TEXAS
("13AW A")
/h2zez ,Zz ,
BRF--bdDA BRADLEY SMIT I, President
A-rFE T:
.T CIA BRYSCH, As. '.. nt Secretary
APPROVED AS TO FORM:
4w,�A,1-4
I NACIO RAMIRI:Z, S[ , General Counscl
CITY Of. TOWN. TEXAS
(-City-) T
DONCARLOS,
A` 711
I
ETICIA BRYSCI I, City Cle -
II1i�tT'.t�l�l1�E7�.ylt�l��J:�lc
*Wd 6 ItAMIREZ, SR., City ttoniey
COnFS01 t.ega- •mote r n raetst aontrel wills IheCu% of Baytown Fit urthContrret,kmendnrent.dix �7
�Jr�-iaitfl�.`1 �—
Conlract Ainendment. Page 2
CONTRACT AMENDMENT
STATE OF TEXAS §
§
COUNTY OF HARRIS §
This CONTRACT AMENDMENT ("the Amendment") is made and entered into by and between
the Baytown Area Water Authority, a governmental entity and body politic and corporate, which is
situated and has its principal office at Baytown, Harris County, Texas ("BAWA") and the City of
Baytown, Texas, a municipal corporation and home -rule city, which is principally situated and has its
City Hall in Harris County, Texas ("City").
WTTNESSETH
WHEREAS, the City and BAWA entered into a Water Supply Contract - Treated Water dated
January 31, 1977; and
WHEREAS, thereafter on November 6, 1997, such agreement was amended and restated (the
"Amended and Restated Water Supply Contract") in order to extend the term of the agreement and to
incorporate all amendments and supplements; and
WHEREAS, on January 3, 2005, BAWA amended its Water Supply Contract with the City of
Houston to extend the term of the contract and increase the contract quantity; and
WHEREAS, the City and BAWA amended its Water Supply Contract - Treated Water with the
City of Baytown (the "First Amendment") to extend the term of the contract and increase the contract
quantity, which amendment was effective on January 3, 2005; and
WHEREAS, on February 23, 2012, the City and BAWA clarified the First Amendment regarding
the extension of the termination date of the Amended and Restated Water Supply Contract (the "Second
Amendment"); and
WHEREAS, effective on March 27, 2014, the City and BAWA increased the contract quantity
based upon the results of the City's alternative capacity requirement approved by the Texas Commission
on Environmental Quality by executing this Contract Amendment to the Water Supply Contract - Treated
Water (the 'Third Amendment"); and
WHEREAS, effective on January 18, 2017, the City and BAWA increased the contract quantity
to 21 MGD by executing this Contract Amendment to the Water Supply Contract - Treated Water (the
"Fourth Amendment"); and
WHEREAS, the City and BAWA desire to increase the contract quantity again by executing this
Contract Amendment to the Water Supply Contract - Treated Water (the "Fifth Amendment");
NOW, THEREFORE, for and in consideration of the premises and mutual covenants and
agreements herein contained, the parties hereby agree as follows:
1.
Section 2.01 of the Amended and Restated Water Supply Contract is amended by increasing the
Contract Quantity (as defined therein) to 22.7 million gallons per day.
Comma Amendment. Page 1
This Fifth Amendment shall become effective on January 25, 2018.
'rhe Amended and Restated Water Supply Contract between the parties hereto, the First
Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, and this Fifth
Amendment are the entire agreement of the parties. In the event of any conflict between a provision of
the Amended and Restated Water Supply Contract and the amendments, the order of priority of
documents is as follows:
1. Fifth Amendment;
2. Fourth Amendment;
3. Third Amendment;
4. Second Amendment;
5. First Amendment; and
6. Amended and Restated Water Supply Contract.
IN \FITNESS WHEREOF, the parties licreto have signed this Amendment in multiple copies
each of which shall be deemed to be an original, but all of which shall constitute but one and the same
contract.
BAYTOWN AREA WATER AUrIIORITY
BAYTOWN, HARRIS COUNTY, TEXAS
("BAWA")
BRENDA BRADLEY SMITH, President
On
LETICIA BRYSCII, Ass i. ant ecrctary
APPROVED AS TO FORM:
*AC11Z0
RAM1REZ, SR., Genwra C unsel
CrrY OF BAYTOWN, TEXAS
("City")
BRANDON' CAPETILLO, Mayor
At s'r:
LI TiCIA E3fivsCl 1, City clerk
APPROVED AS TO FORM:
R: Karen FilLs'BAWA.Rt-colulinn.2Q14ltnnuary-FitlliConlrlct{+mcndAticnt.dtx
vqv
ACIO RAM IREZ, SR., C y Attorney
Coninict Amendment. Page 2
CONTRACT AMENDMENT
STATE OF TEXAS
COUNTY OF HARRIS
This CONTRACT AMENDMENT ("the Amendment") is made and entered into by and
between the Baytown Area Water Authority, a governmental entity and body politic and corporate,
which is situated and has its principal office located in the City of Baytown, Harris County, Texas
("BAWA"), and the City of Baytown, Texas, a municipal corporation and home -role city, which
is principally situated and has its City Hall in Harris County, Texas ("City").
WITNESSETH
WHEREAS, the City and BAWA entered into a Water Supply Contract — Treated Water
dated January 31, 1977 (the "Original Water Supply Contract"); and
WHEREAS, thereafter on November 6, 1997, the Original Water Supply Contract was
amended and restated in order to extend the term of the agreement and to incorporate all
amendments and supplements (the "Amended and Restated Water Supply Contract"); and
WHEREAS, on January 3, 2005, BAWA amended its Water Supply Contract with the City
of Houston. Texas to extend the term of the contract and increase the contract quantity; and
WHEREAS, effective on January 3, 2005, the City and BAWA amended the Amended and
Restated Water Supply Contract to extend the term of the contract and increase the contract
quantity (the "First Amendment"); and
WHEREAS, effective on February 23, 2012, the City and BAWA further amended the
Amended and Restated Water Supply Contract to clarify the First Amendment regarding the
extension of the termination date of the Amended and Restated Water Supply Contract (the
"Second Amendment"); and
WHEREAS, effective on March 27, 2014, the City and BAWA further amended the
Amended and Restated Water Supply Contract to increase the contract quantity based upon the
results of the City's alternative capacity requirement approved by the Texas Commission on
Environmental Quality by executing a Contract Amendment to the Amended and Restated Water
Supply Contract (the "Third Amendment"); and
WHEREAS, effective on January 18, 2017, the City and BAWA further amended the
Amended and Restated Water Supply Contract to increase the contract quantity to 21 million
gallons per day by executing a Contract Amendment to the Amended and Restated Water Supply
Contract (the "Fourth Amendment"); and
WHEREAS, effective on January 25, 2019, the City and BAWA further amended the
Amended and Restated Water Supply Contract to increase the contract quantity to 22.7 million
gallons per day by executing a Contract Amendment to the Amended and Restated Water Supply
Contract (the "Fifth Amendment"); and
IM-# 10310870.5
WHEREAS, in the first quarter of 2024, BAWA amended its Water Supply Contract with
the City of Houston, Texas to increase the contract quantity; and
WHEREAS, the City and BAWA desire to increase the City's contract quantity by
executing this Contract Amendment to the Amended and Restated Water Supply Contract (the
"Sixth Amendment"); and
WHEREAS, the City and BAWA desire to make certain clarifying amendments to the
definition of BAWA Contract in Section 1.02 of the Amended and Restated Water Supply Contract
in this Sixth Amendment.
NOW. THEREFORE, for and in consideration of the premises and mutual covenants and
agreements herein contained, the parties hereby agree as follows:
Section 1.02 of the Amended and Restated Water Supply Contract is hereby deleted and
replaced in its entirety as follows:
"BAWA Contract" means the Water Supply Contract between the City of Houston and
Baytown Area Water Authority, dated October 24, 1994, between BAWA, as buyer, and the City
of Houston, Texas, as seller, as amended from time to time, and incorporated herein for all intents
and purposes.
Section 2.01 of the Amended and Restated Water Supply Contract is amended by
increasing the Contract Quantity (as defined therein) to 28.6 million gallons per day.
This Sixth Amendment shall become effective on May 9.2024.
The Amended and Restated Water Supply Contract between the parties hereto, the First
Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth
Amendment and this Sixth Amendment are the entire agreement of the parties. In the event of any
conflict between a provision of the Amended and Restated Water Supply Contract and the
amendments, the order of priority of documents is as follows:
1. Sixth Amendment;
2. Fifth Amendment;
3. Fourth Amendment;
4. Third Amendment;
5. Second Amendment;
6. First Amendment; and
7. Amended and Restated Water Supply Contract.
[Execution Page Follows]
-2-
IM-M 10310870.5
IN WITNESS WHEREOF, the parties hereto have signed this Amendment in multiple
copies each of which shall be deemed to be an original, but all of which shall constitute but one
and the same contract.
BAYTOWN AREA WATER AUTHORITY
BAYTOWN, HARRIS CO[ JNTY, TEXAS
("SAWA")
CITY OF BAYTOWN, TEXAS ("City")
B ENDA BRADLE SMITH, President NDON CAPE'I ILLO, Mayor
ATTEST:
\y11111JJ!!
fir. �9G
st o T
�- �Z
Sr.
lrl�fFl11�11\
ATTEST:
ANGEL JACKSON, t° clerk
APPROVED AS TO FORM: APPROVED AIS TO FORM:
L'EM(PND, General Counsel SCOTT LE"OND, City Attorney
Signature Page to Sixth Amendment to Amended and Restated Water Supply Contract
tM-N 10310870 3
CONTRACT AMENDMENT
STATE OF TEXAS §
COUNTY OF HARRIS §
This CONTRACT AMENDMENT ("the Amendment") is made and entered into by and
between the Baytown Area Water Authority, a governmental entity and body politic and corporate,
which is situated and has its principal office located in the City of Baytown, Harris County, Texas
("BAWA"), and the City of Baytown, Texas, a municipal corporation and home -rule city, which
is principally situated and has its City Hall in Harris County, Texas ("City").
WITNESSETH
WHEREAS, the City and BAWA entered into a Water Supply Contract - Treated Water
dated January 31, 1977 (the "Original Water Supply Contract"); and
WHEREAS, thereafter on November 6, 1997, the Original Water Supply Contract was
amended and restated in order to extend the term of the agreement and to incorporate all
amendments and supplements (the "Amended and Restated Water Supply Contract"); and
WHEREAS, on January 3, 2005, BAWA amended its Water Supply Contract with the City
of Houston, Texas to extend the term of the contract and increase the contract quantity; and
WHEREAS, effective on January 3, 2005, the City and BAWA amended the Amended and
Restated Water Supply Contract to extend the term of the contract and increase the contract
quantity (the "First Amendment"); and
WHEREAS, effective on February 23, 2012, the City and BAWA further amended the
Amended and Restated Water Supply Contract to clarify the First Amendment regarding the
extension of the termination date of the Amended and Restated Water Supply Contract (the
"Second Amendment"); and
WHEREAS, effective on March 27, 2014, the City and BAWA further amended the
Amended and Restated Water Supply Contract to increase the contract quantity based upon the
results of the City's alternative capacity requirement approved by the Texas Commission on
Environmental Quality by executing a Contract Amendment to the Amended and Restated Water
Supply Contract (the "Third Amendment"); and
WHEREAS, effective on January 18, 2017, the City and BAWA further amended the
Amended and Restated Water Supply Contract to increase the contract quantity to 21 million
gallons per day by executing a Contract Amendment to the Amended and Restated Water Supply
Contract (the "Fourth Amendment"); and
WHEREAS, effective on January 25, 2019, the City and BAWA further amended the
Amended and Restated Water Supply Contract to increase the contract quantity to 22.7 million
gallons per day by executing a Contract Amendment to the Amended and Restated Water Supply
Contract (the "Fifth Amendment"); and
IM-# 10729511.4
WHEREAS, effective on May 9, 2024, the City and BAWA further amended the Amended
and Restated Water Supply Contract to clarify the definition of the BAWA Contract and increase
the contract quantity to 28.6 million gallons per day by executing a Contract Amendment to the
Amended and Restated Water Supply Contract (the "Sixth Amendment"); and
WHEREAS, the City and the BAWA have applied for financial assistance from the Texas
Water Development Board (the "TWDB") under the State Water Implementation Fund of Texas
("SWIFT") the purposes of making, purchasing, constructing, leasing or otherwise acquiring,
enlarging, expanding, and modifying the Project, including (i) the design, construction, acquisition
and equipment of the expansion of the Authority's East Surface Water Treatment Plant and related
infrastructure and (ii) paying the costs of issuing the bonds to evidence the financial assistance;
and
WHEREAS, the resolution of the TWDB approving the financial assistance (the "TWDB
Resolution") requires that BAWA enter into a financing agreement with the TWDB (the
"Financing Agreement") through which the BAWA expresses its intent to sell to the TWDB its
bonds to evidence the loan under the SWIFT program contingent on the sale of bonds by the
TWDB to fund such financial assistance; and
WHEREAS, it is necessary to enter into this amendment (the "Seventh Amendment") to
amend the Amended and Restated Water Supply Contract to (i) extend the term of the Amended
and Restated Water Supply Contract to correspond with the term of the financial assistance to be
received from the TWDB, (ii) to clearly evidence the obligation of the City to make all principal
installment and interest payments on the bonds issued to the TWDB and payments under the
Financing Agreement, if any, when due, and (iii) make other revisions required by the TWDB in
connection with the receipt of financial assistance for the Project;
NOW, THEREFORE, for and in consideration of the premises and mutual covenants and
agreements herein contained, the parties hereby agree as follows:
I.
A. The Amended and Restated Water Supply Contract is hereby amended to add a new
Section 1.10.1 immediately following Section 1.10. Section 1.10.1 shall read as follows:
1.10.1 "Financing Agreement" means the final executed financing
agreement between BAWA and the TWDB required in connection with the receipt
of funding from the TWDB pursuant to the SWIFT program, a copy of which is
attached hereto as Exhibit C."
B. The Amended and Restated Water Supply Contract is hereby amended to add a new
Section 1.17.1 immediately following Section 1.17. Section 1.17.1 shall read as follows:
1.17.1 "TWDB" means the Texas Water Development Board or its
successor.
C. The Amended and Restated Water Supply Contract is hereby amended to add a new
Section 5.10 to read as follows:
5.10. In connection with its commitment to purchase a series of Bonds to
evidence financial assistance being provided to BAWA for the Project, the TWDB
has required that BAWA enter into the Financing Agreement to evidence BAWA's
commitment to borrow from the TWDB under the financial assistance program
described in the TWDB Resolution an amount not to exceed $69,000,000,
consistent with the terms and conditions outlined in the Financing Agreement. The
Financing Agreement includes an acknowledgement and representation that
BAWA has a current need for the financial assistance being sought from the TWDB
and is committed to taking the necessary steps to issue Bonds to evidence the
financial commitment from the TWDB under the SWIFT program. The Bonds
referenced in the Financing Agreement are being issued by BAWA at the request
and for the benefit of the City under the Contract, and payments under the Contract
are the sole source of funding available for making payments on the Bonds and any
payments due under the Financing Agreement. The City hereby acknowledges
BAWA's obligations under the Financing Agreement and the timelines for
terminating a commitment to issue Bonds to the TWDB. The City agrees that any
payments due to the TWDB because of the termination or breach of the Financing
Agreement will be paid by the City from lawfully available funds of the City's
utility system identified by the City in accordance with the terms of the Financing
Agreement.
D. The Amended and Restated Water Supply Contract is hereby amended to add a new
Section 5.11 to read as follows:
5.11 Upon BAWA's receipt of a request from the Executive Administrator
of the TWDB, the City Agrees that it will furnish a copy of each annual audit,
prepared in accordance with generally accepted accounting principles (GAAP), to
the TWDB.
E. The Amended and Restated Water Supply Contract is hereby amended to add a new
Section 5.12 to read as follows:
5.12 The continuing disclosure obligations of the City set forth in the
ordinance of the City approving the issuance of the Authority's Water Supply
Contract Revenue Bonds, Series 2025 (City of Baytown Project) (the "Series 2025
Bonds") are hereby incorporated into the Contract for all purposes for so long as
the Series 2025 Bonds are outstanding.
F. The Amended and Restated Water Supply Contract is hereby amended to add a new
Section 5.13 to read as follows:
5.13 The City, recognizing BAWA's intent that interest on the Bonds being
issued to the TWDB (as described in the Financing Agreement) be excluded from
gross income for federal income tax purposes, 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 interest on such Bonds to be includable in
gross income, as defined in Section 61 of the Internal Revenue Code of 1986, as
amended, for federal income tax purposes, including but not limited to entering into
contracts with users that would give rise to private business use in excess of the
amount permitted by Section 141 of the Internal Revenue Code of 1986, as
amended.
G. Article X of the Amended and Restated Water Supply Contract is hereby amended and
restated as follows:
Article X
Term
This Contract as amended and restated shall remain in force and effect until
December 31, 2055; provided that this Contract shall continue in effect until all of
the Bonds are paid.
H. The Amended and Restated Water Supply Contract is hereby amended by adding Exhibit
B, a copy of which is attached to this Seventh Amendment as Attachment A.
II.
A. This Seventh Amendment shall become effective as of September 1, 2025.
A. The Amended and Restated Water Supply Contract between the parties hereto, the First
Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth
Amendment, the Sixth Amendment, and this Seventh Amendment are the entire agreement of the
parties. In the event of any conflict between a provision of the Amended and Restated Water
Supply Contract and the amendments, the order of priority of documents is as follows:
1. Seventh Amendment;
2. Sixth Amendment;
3. Fifth Amendment;
4. Fourth Amendment;
5. Third Amendment;
6. Second Amendment;
7. First Amendment; and
8. Amended and Restated Water Supply Contract.
[Execution Page Follows]
IN WITNESS WHEREOF, the parties hereto have signed this Amendment in multiple
copies each of which shall be deemed to be an original, but all of which shall constitute but one
and the same contract.
BAYTOWN AREA WATER AUTHORITY
BAYTOWN, HARRIS COUNTY, TEXAS
("BA WA")
BRENDA BRADLEY SMITH, President
A *CKSON, Assistant Secretary
APPROVED AS TO FORM:
SCOTT LEIfIOND, General Counsel
CITY OF BAYTOWN, TEXAS ("City")
CHARLES JOHNSON, Mayor
ATTEST:
ANGELA JACKSON, City Clerk
APPROVED AS TWORM:
SCOTT LEMONIp, City Attorney
Signature Page to Seventh Amendment to Amended and Restated Water Supply Contract
IN WITNESS WHEREOF, the parties hereto have signed this Amendment in multiple
copies each of which shall be deemed to be an original, but all of which shall constitute but one
and the same contract.
BAYTOWN AREA WATER AUTHORITY
BAYTOWN, HARRIS COUNTY, TEXAS
('-BA WA")
BRENDA BRADLEY SMITH, President
ATTEST:
ANGELA JACKSON, Assistant Secretary
CITY OF BAYTOWN, TEXAS ("City")
APPROVE S TO FORM: APPROVED A TO FORM:
SCOTTEEMND, General C-0—urtsel SCOTT LEMOND, City Attorney
Signature Page to Seventh amendment to Amended and Restated Water Supply Contract
Attachment A
Exhibit C to the Amended and Restated Water Supply Contract - Treated Water
Exhibit C
Financing Agreement
[See Attached Financing Agreement]
APPENDIX D
ORDINANCE APPROVING OFFICIAL ACTION
[Attached)
D- l
Form of Ordinance
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, APPROVING A RESOLUTION OF THE BAYTOWN AREA WATER
AUTHORITY AUTHORIZING THE ISSUANCE OF BAYTOWN AREA
WATER AUTHORITY WATER SUPPLY CONTRACT REVENUE BONDS,
SERIES 2025 (CITY OF BAYTOWN PROJECT); ACCEPTING THE TERMS
AND CONDITIONS OF SUCH RESOLUTION; PROVIDING FOR
CONTINUING DISCLOSURE WITH RESPECT TO SUCH BONDS;
APPROVING AN AMENDMENT TO THE AMENDED AND RESTATED
WATER SUPPLY CONTRACT BETWEEN THE CITY AND THE BAYTOWN
AREA WATER AUTHORITY; AND PROVIDING FOR AN EFFECTIVE
DATE.
WHEREAS, the City Council (the "Council") of the City of Baytown, Texas (the "City")
has entered into an Amended and Restated Water Supply Contract -Treated Water, originally dated
January 31, 1977, as amended and restated as of October 23, 1997, and as further amended as of
January 3, 2005, as of February 23, 2012, as of March 27, 2014, as of January 18, 2017, as of
January 25, 2018, as of May 9, 2024, and as of September 1, 2025 (collectively, the "Contract"),
with the Baytown Area Water Authority (the "Authority"); and
WHEREAS, the City and the Authority have applied for financial assistance from the
Texas Water Development Board (the "TWDB") under the State Water Implementation Fund of
Texas ("SWIFT") the purposes of making, purchasing, constructing, leasing or otherwise
acquiring, enlarging, expanding, and modifying the Project, including (i) the design, construction,
acquisition and equipment of the expansion of the Authority's East Surface Water Treatment Plant
and related infrastructure and (ii) paying the costs of issuing the bonds to evidence the financial
assistance; and
WHEREAS, pursuant to Chapter 8104, Texas Special District Local Laws Code (the
"Act"), and the Contract, the Authority now proposes to issue its bonds styled "Baytown Area
Water Authority Water Supply Contract Revenue Bonds, Series 2025 (City of Baytown Project)"
(the "Bonds") in connection with the receipt of financial assistance from the TWDB; and
WHEREAS, the Council requests that the Authority proceed with the issuance and sale of
the bonds and in accordance with the provisions of the Act is taking this action to approve the
Authority's resolution authorizing issuance of the Bonds (the "Bond Resolution") prior to issuance
and delivery of the Bonds.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
BAYTOWN, TEXAS:
Section 1: The findings, determinations and declarations set out in the preamble to this
Ordinance are hereby found, determined and declared to be true and correct and are incorporated
herein for all purposes. Capitalized terms shall have the meanings ascribed in the preamble to this
IM-# 10729625.4
Ordinance. All capitalized terms not defined herein shall have the meaning assigned in the Bond
Resolution.
Section 2: A copy of the Bond Resolution has been submitted to the Council. The
Bond Resolution, including the principal amount of the Bonds, the sale of the bonds to the TWDB,
and all of the of the other terms and conditions thereof, is hereby approved, and the Bonds are
hereby approved and authorized to be issued pursuant to the Bond Resolution.
Section 3: In consideration of the issuance of the Bonds by the Authority, the City
hereby makes the following agreement for the benefit of the Authority and the holders and
beneficial owners of the Bonds. The City is required to observe the agreement for so long as it is
an "obligated person" with respect to the Bonds within the meaning of Securities and Exchange
Commission (the "SEC") Rule 15c2-12 (the "Rule").
(a) Annual Reports.
The City will provide annually to the Municipal Securities Rulemaking Board (the
"MSRB") (i) within six (6) months after the end of each fiscal year ending in or after 2025,
audited financial statements of the City, if audited financial statements are then available,
or (ii) if audited financial statements of the City are not then available, audited financial
statements of the City, when and if available, but not later than 12 months after any such
fiscal year end of the City. Financial statements so to be provided shall be prepared in
accordance with the accounting principles described in the notes to the financial statements
for the most recently concluded Fiscal Year, and 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, the
City shall provide unaudited financial statements for such 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.
(i) If the City changes its Fiscal Year, it will notify the MSRB of the change
(and of the date of the new Fiscal Year end) prior to the next date by which the City
otherwise would be required to provide financial information and operating data pursuant
to this Section 3(a).
(ii) The financial information and operating data to be provided pursuant to this
Section 3(a) 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, if it is available from the MSRB, that theretofore has been provided to the
MSRB or filed with the SEC. The financial information or operating data shall be provided
in an electronic format as prescribed by the MSRB.
(iii) The term "Fiscal Year" shall mean the fiscal year of the City as set from
time to time by the Council.
-2-
(b) Event Notices.
(i) The City shall provide the following to the MSRB, in an electronic format
as prescribed by the MSRB, in a timely manner not in excess of ten (10) business days after
the occurrence of the event, notice of any of the following events with respect to the Bonds:
(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults, if material;
(3) Unscheduled draws on debt service reserves reflecting financial
difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial
difficulties;
(5) Substitution of credit or liquidity providers, or their failure to
perform;
(6) Adverse tax opinions, the issuance by the Internal Revenue Service
of proposed or final determinations of taxability, Notices of Proposed Issue (IRS
Form 5701-TEB) or other material notices or determinations with respect to the tax
status of the Bonds, or other material events affecting the tax status of the Bonds;
(7) Modifications to rights of the holders of the Bonds, if material;
(8) Bond calls, if material, and tender offers;
(9) Defeasances;
(l 0) Release, substitution, or sale of property securing repayment of the
Bonds, if material;
(11) Rating changes;
(12) Bankruptcy, insolvency, receivership or similar event of the City;
Note to paragraph 12: For the purposes of the event identified in
paragraph ( l 2) 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 the City 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 City, 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
-3-
authority having supervision or jurisdiction over substantially all of the
assets or business of the City.
(13) The consummation of a merger, consolidation, or acquisition
involving the City or the sale of all or substantially all of the assets of the City,
other than in the ordinary course of business, the entry into a definitive agreement
to undertake such an action or the termination of a definitive agreement relating to
any such actions, other than pursuant to its terms, if material;
(14) Appointment of a successor or additional trustee or the change of
name of a trustee, if material;
(15) Incurrence of a Financial Obligation of the City, if material, or
agreement to covenants, events of default, remedies, priority rights, or other similar
terms of a Financial Obligation of the City, any of which affect security holders, if
material; and
(16) 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.
Note to paragraphs (15)and ( 16): As used in paragraphs (15) and
(16) of this section, "Financial Obligation" means a (a) debt obligation; (b)
derivative instrument entered into in connection with, or pledged as security
or a source of payment for, an existing or planned debt obligation; or (c)
guarantee of a debt obligation or any such derivative instrument; provided
that "financial obligation" shall not include municipal securities (as defined
in the Securities Exchange Act of 1934, as amended) as to which a final
official statement (as defined in the Rule) has been provided to the MSRB
consistent with the Rule. For purposes of the events identified in paragraphs
(15) and (16) of this section and in the definition of Financial Obligation,
the City intends the words used in such paragraphs to have the meanings
ascribed to them in SEC Release No. 34-83885 dated August 20, 2018 (the
"2018 Release") and any further written guidance provided by the SEC or
its staff with respect to the amendments to the Rule affected by the 2018
Release.
(ii) The City shall provide to the MSRB, in an electronic format as prescribed
by the MSRB, in a timely manner, notice of a failure by the City to provide required annual
financial information in accordance with Section 3(a) above. All documents provided to
the MSRB pursuant to this section shall be accompanied by identifying information as
prescribed by the MSRB.
(c) Limitations, Disclaimers and Amendments.
(i) The City shall be obligated to observe and perform the covenants specified
in this Section 3 for so long as, but only for so long as, the City remains an "obligated
person" with respect to the Bonds within the meaning of the Rule, except that the City in
-4-
any event will give notice of any bond calls and any defeasances that cause the City to be
no longer an "obligated person."
(ii) The provisions of this Section 3 are for the sole benefit of the Authority and
the Owners and beneficial owners of the Bonds, and nothing in this Section, express or
implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder
to any other person. The City undertakes to provide only the financial information,
operating data, financial statements, and notices that it has expressly agreed to provide
pursuant to this Section 3 and does not hereby undertake to provide any other information
that may be relevant or material to a complete presentation of the City's financial results,
condition, or prospects or hereby undertake to update any information provided in
accordance with this Section 3 or otherwise, except as expressly provided herein. The City
does not make any representation or warranty concerning such information or its usefulness
to a decision to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE
OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN
CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART
FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITH OR
WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS
SECTION 3, 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.
(iii) No default by the City in observing or performing its obligations under this
Section 3 shall constitute a breach of or default under this Ordinance or the Bond
Resolution for purposes of any other provisions of this Ordinance or the Bond Resolution.
(iv) Nothing in this Section 3 is intended or shall act to disclaim, waive, or
otherwise limit the duties of the City under federal and state securities laws.
(v) The provisions of this Section 3 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 Section 3, as so amended, would have permitted an
underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance
with the Rule, taking into account any amendments or interpretations of the Rule to the
date of such amendment, as well as such changed circumstances, and (ii) either (A) the
Owners of a majority in aggregate principal amount (or any greater amount required by
any other provisions of the Bond Resolution that authorizes such an amendment) of the
Bonds then outstanding under the Bond Resolution consent to such amendment or (B) an
entity or individual person that is unaffiliated with the City (such as nationally recognized
bond counsel) determines that such amendment will not materially impair the interests of
the Owners and beneficial owners of the Bonds. The provisions of this Section 3 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 rights of the City
to do so would not prevent underwriters of the initial public offering of the Bonds from
-5-
lawfully purchasing or selling Bonds in such offering. If the City so amends the provisions
of this Section 3, it shall include with any amended financial information or operating data
next provided in accordance with Section 3(a) 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.
Section 4: The Authority is authorized to use information relating to the City in a
Private Placement Memorandum relating to the Bonds, the form of which shall be approved by the
City Manager or his designee, as may be necessary to carry out the intents and purposes of this
Ordinance and to effectuate the sale of the Bonds to the TWDB as described in the resolution of
the TWDB approving the financial assistance evidenced by the Bonds.
Section 5: This Ordinance shall become effective immediately upon passage by the
Council.
[Execution Page Follows]
--
INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the
City of Baytown this the _ day of , 2025.
CHARLES JOHNSON, Mayor
ATTEST:
ANGELA JACKSON, City Clerk
[SEAL]
APPROVED AS TO FORM:
SCOTT LEMOND, City Attorney
Signature Page to City of Baytown, Texas Ordinance No.
CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS §
COUNTIES OF HARRIS AND CHAMBERS §
I, the undersigned officer of the City Council of the City of Baytown, Texas, hereby certify
as follows:
I . The City Council of the City of Baytown, Texas, convened in a regular meeting on
the _ day of , 2025, at the regular meeting place thereof, within said City, and the
roll was called of the duly constituted officers and members of said City Council, to wit:
Charles Johnson
Laura Alvarado
Sarah Graham
Ken Griffith
James Franco
Jacob Powell
Mike Lester
Mayor
Council Member, District 1
Council Member, District 2
Council Member, District 3
Council Member, District 4
Council Member, District 5
Council Member, District 6
and all of said persons were present, except the following absentee(s): , thus
constituting a quorum. Whereupon, among other business, the following was transacted at said
meeting:
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, APPROVING A RESOLUTION OF THE BAYTOWN AREA WATER
AUTHORITY AUTHORIZING THE ISSUANCE OF BAYTOWN AREA
WATER AUTHORITY WATER SUPPLY CONTRACT REVENUE BONDS,
SERIES 2025 (CITY OF BAYTOWN PROJECT); ACCEPTING THE TERMS
AND CONDITIONS OF SUCH RESOLUTION; PROVIDING FOR
CONTINUING DISCLOSURE WITH RESPECT TO SUCH BONDS;
APPROVING AN AMENDMENT TO THE AMENDED AND RESTATED
WATER SUPPLY CONTRACT BETWEEN THE CITY AND THE BAYTOWN
AREA WATER AUTHORITY; AND PROVIDING FOR AN EFFECTIVE
DATE.
was duly introduced for the consideration of said City Council. It was then duly moved and
seconded that said ordinance be adopted; and, after due discussion, said motion, carrying with it
the adoption of said ordinance, prevailed and carried by the following vote:
Member(s) of City Council shown present voted "Aye."
Member(s) of City Council shown present voted "No."
Member(s) of City Council shown present abstained from voting.
2. 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 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 that said ordinance would be introduced and considered for adoption
at said 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
Chapter 551, Texas Government Code, as amended.
SIGNED AND SEALED this day of , 2025.
[SEAL]
-2-
City Clerk
City of Baytown, Texas
APPENDIX E
FORM OF OPINION OF BOND COUNSEL
[Attached]
BRACEWELL
[November 14, 2025)
We have acted as bond counsel for Baytown Area Water Authority (the "Authority"), in connection with the
bonds hereinafter described (the "Bonds"):
BAYTOWN AREA WATER AUTHORITY WATER SUPPLY CONTRACT REVENUE BONDS, SERIES 2025
(CITY OF BAYTOWN PROJECT), dated November 1, 2025, in the aggregate principal amount of
$69,000,000.
The Bonds mature, bear interest, are subject to redemption prior to maturity, and may be
transferred and exchanged as set out in the Bonds and in the resolution adopted by the Board
of Directors of the Authority authorizing their issuance (the "Bond Resolution").
We have acted as bond counsel for the sole purpose of rendering an opinion with respect to the legality and
validity of the Bonds under the constitution and laws of the State of Texas and with respect to the excludability
of interest on the Bonds from gross income for federal income tax purposes. We have not investigated or verified
original proceedings, records, data or other material, but have relied solely upon the transcript of proceedings
described in the following paragraph. We have not assumed any responsibility with respect to the financial
condition or capabilities of the Authority or the disclosure thereof in connection with the sale of the Bonds.
In our capacity as bond counsel, we have participated in the preparation of and have examined a transcript of
proceedings pertaining to the authorization and issuance of the Bonds, on which we have relied in giving our
opinion. The transcript contains certified copies of certain proceedings of the Authority and the City of Baytown,
Texas (the "City"); customary certificates of officers, agents, and representatives of the Authority, the City and
other public officials; and other certified showings relating to the authorization and issuance of the Bonds. We
have also analyzed such laws, regulations, guidance, documents and other materials as we have deemed
necessary to render the opinions herein. Moreover, we have examined executed Bond No. 1-1 of this issue.
In providing the opinions set forth herein, we have relied on representations and certifications of the Authority,
the Authority's financial advisor, the City and other parties involved with the issuance of the Bonds with respect
to matters solely within the knowledge of such parties, which we have not independently verified. In addition,
we have assumed for purposes of this opinion continuing compliance with the covenants of the Bond Resolution,
including but not limited to, covenants relating to the tax-exempt status of the Bonds.
Based on such examination, and in reliance of such representations, certifications and assumptions, it is our
opinion that:
Bracewell LLP 1'.-1.713.223.2300 F: =1.300.40d.3970
711 Louisiana Stree�, Sure 2300, Houston, *etas 77002 2710
bracevj-dcnrn
AUSTIN CONNECTICUT DALLAS DU8AI HOJSTON LONDON NEW YORK SAN ANTONIO SEATTLE WASHINGTON. DC
E-2
(1) The transcript of certified proceedings evidences complete legal authority for the
issuance of the Bonds in full compliance with the Constitution and laws of the State of Texas presently
effective and, therefore, the Bonds constitute valid and legally binding obligations of the Authority.
(2) The Bonds are special obligations of the Authority, which, together with the Authority's
outstanding Water Supply Contract Revenue and Refunding Bonds, Series 2012 (City of Baytown
Project), Water Supply Contract Revenue Bonds, Series 2018 (City of Baytown Project), Water Supply
Contract Revenue Bonds, Series 2019 (City of Baytown Project), and the Water Supply Contract Revenue
Bonds, Series 2024 (City of Baytown Project) (collectively, the "Outstanding Bonds"), are payable both
as to principal and interest from, and are equally and ratably secured by a pledge of and first lien on the
Pledged Revenues (as defined in the Bond Resolution).
(3) Interest on the Bonds is excludable from gross income for federal income tax purposes
under Section 103 of the Internal Revenue Code of 1986, as amended. In addition, interest on the Bonds
is not a specific preference item for purposes of the alternative minimum tax on individuals, but we
observe that such interest is taken into account in computing the alternative minimum tax on
corporations.
The Authority has reserved the right to issue additional bonds and refunding bonds which may be on parity with
and of equal dignity in all respects with the Bonds and the Outstanding Bonds, subject to the restrictions
contained in the Bond Resolution. The rights of the owners of the Bonds are subject to applicable provisions of
the federal bankruptcy laws and other similar laws affecting the rights of creditors of political subdivisions
generally and may be limited by general principles of equity which permit the exercise of judicial discretion.
We express no opinion as to the amount or timing of interest on the Bonds or, except as stated above, any
federal, state or local tax consequences resulting from the receipt or accrual of interest on, or the acquisition,
ownership, or disposition of the Bonds. This opinion is specifically limited to the laws of the State of Texas and,
to the extent applicable, the laws of the United States of America. Further, in the event that the representations
of the Authority, the City and other parties upon which we have relied are determined to be inaccurate or
incomplete or the Authority fails to comply with the covenants of the Order, interest on the Bonds could become
includable in gross income for federal income tax purposes from the date of the original delivery of the Bonds,
regardless of the date on which the event causing such
Our opinions are based on existing law and our knowledge of facts as to the date hereof and may be affected by
certain actions that may be taken or omitted on a later date. We assume no duty to update or supplement our
opinions, and this opinion letter may not be relied upon in connection with any changes to the law or facts, or
actions taken or omitted, after the date hereof.
F-3
Exhibit B
Form of Escrow Agreement
Form of Escrow Agreement
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement"), made by and between the BAYTOWN AREA
WATER AUTHORITY (the "Authority"), a political subdivision and conservation and
reclamation district of the State of Texas, and BOKF, NA, as Escrow Agent (the "Escrow Agent"),
together with any successor in such capacity;
WITNESSETH:
WHEREAS, pursuant to the Authority's Resolution Relating to its Contract Revenue
Bonds (City of Baytown Project) adopted on October 8, 2025 (the "Resolution"), the Authority
authorized the issuance of $69,000,000 Baytown Area Water Authority Contract Revenue
Bonds, Series 2025 (City of Baytown Project) (the "Series 2025 Bonds") to obtain financial
assistance from the Texas Water Development Board (the "TWDB") for the purposes of making,
purchasing, constructing, leasing or otherwise acquiring, enlarging, expanding, and modifying
the Project, as such project is further described in the Contract Amendment (as defined in the
Resolution) and paying the costs of issuance of the Bonds (collectively, the "Project"); and
WHEREAS, the Escrow Agent is a state or national bank designated by the Texas
Comptroller as a state depository institution in accordance with Texas Government Code,
Chapter 404, Subchapter C, or is a designated custodian of collateral in accordance with Texas
Government Code, Chapter 404, Subchapter D, and is otherwise qualified and empowered to
enter into this Agreement, and hereby acknowledges its acceptance of the terms and provisions
hereof; and
WHEREAS, a condition of the Series 2025 Bonds is the deposit of the proceeds of the
Series 2025 Bonds (the "Proceeds") in escrow subject to being withdrawn only with the
approval of the Executive Administrator or another designated representative; provided,
however, the Proceeds can be transferred to different investments so long as all parties hereto
consent to such transfer.
NOW, THEREFORE, in consideration of the mutual agreements herein contained and in
consideration of the amount of fees to be paid by the Authority to the Escrow Agent, as set forth
on EXHIBIT A, the receipt of which is hereby acknowledged, and in order to secure the delivery
of the Series 2025 Bonds, the parties hereto mutually undertake, promise and agree for
themselves, their respective representatives and successors, as follows:
SECTION 1: ESCROW ACCOUNT. Upon the delivery of the Series 2025 Bonds described above,
the Proceeds identified under TWDB Commitment Number [I--] to be deposited to the
credit of a special escrow account (the "Escrow Account") maintained at the Escrow Agent on
behalf of the Authority and the TWDB and shall not be commingled with any other accounts or
with any other proceeds or funds. The Proceeds received by the Escrow Agent under this
Agreement shall not be considered as a banking deposit by the Authority, and the Escrow Agent
shall have no right to title with respect thereto except as Escrow Agent under the terms of this
Agreement.
IM-# 10835350.3
The Escrow Account shall be entitled "[TWDB 510901 BAWA SWIFT 2025 Escr Acct" and shall
not be subject to warrants, drafts or checks drawn by the Authority but shall be disbursed or
withdrawn to pay the costs of the Project for which the Series 2025 Bonds were issued or other
purposes in accordance with the Resolution and solely upon written authorization from the
Executive Administrator or his/her designated representative. The Escrow Agent shall provide
to the Authority and to the TWDB the Escrow Account bank statements upon request.
SECTION 2: COLLATERAL. All cash deposited to the credit of such Escrow Account and any
accrued interest in excess of the amounts insured by the FDIC and remaining uninvested under
the terms of this Agreement shall be continuously secured by a valid pledge of direct
obligations of the United States of America or other collateral meeting the requirements of the
Public Funds Collateral Act, Texas Government Code, Chapter 2257.
SECTION 3: INVESTMENTS. While the Proceeds are held in escrow, the Escrow Agent shall
only invest escrowed Proceeds in investments that are authorized by the Public Funds
Investment Act, Texas Government Code, Chapter 2256 (the "PFIA"). It is the Authority's
responsibility to direct the Escrow Agent to invest all public funds in a manner that is consistent
not only with the PFIA but also with its own written investment policy.
SECTION 4: DISBURSEMENTS. The Escrow Agent shall not honor any disbursement from the
Escrow Account, or any portion thereof, unless and until it has been supplied with written
approval and consent by the Executive Administrator or his/her designated representative.
However, no written approval and consent by the Executive Administrator shall be required if
the disbursement involves transferring Proceeds from one investment to another within the
Escrow Account provided that all such investments are consistent with the PFIA requirements.
SECTION 5: UNEXPENDED FUNDS. Any Proceeds remaining unexpended in the Escrow
Account after completion of the Project and after the final accounting has been submitted to
and approved by the TWDB shall be disposed of pursuant to the provisions of the Resolution.
The Authority shall deliver a copy of such TWDB approval of the final accounting to the Escrow
Agent together with instructions concerning the disbursement of unexpended Proceeds
hereunder. The Escrow Agent shall have no obligation to ensure that such unexpended
Proceeds are used as required by the provisions of the Resolution, that being the sole obligation
of the Authority.
SECTION 6: CERTIFICATIONS. The Escrow Agent shall be authorized to accept and rely upon
the certifications and documents furnished to the Escrow Agent by the Authority and shall not
be liable for the payment of any funds made in reliance in good faith upon such certifications
or other documents or approvals, as herein recited.
SECTION 7: LIABILITY OF ESCROW AGENT. To the extent permitted by law, the Escrow Agent
shall not be liable for any act done or step taken or omitted by it or any mistake of fact or law,
except for its negligence or default or failure in the performance of any obligation imposed
upon it hereunder. The Escrow Agent shall not be responsible in any manner for any
proceedings in connection with the Series 2025 Bonds or any recitation contained in the Series
2025 Bonds.
SECTION 8: RECORDS. The Escrow Agent will keep complete and correct books of record and
account relating to the receipts, disbursements, allocations and application of the money
deposited to the Escrow Account, and investments of the Escrow Account and all proceeds
thereof. The records shall be available for inspection and copying at reasonable hours and
under reasonable conditions by the Authority and the TWDB.
SECTION 9: MERGER/CONSOLIDATION. In the event that the Escrow Agent merges or
consolidates with another bank or sells or transfers substantially all of its assets or corporate
trust business, then the successor bank shall be the successor Escrow Agent without the
necessity of further action as long as the successor bank is a state or national bank designated
by the Texas Comptroller as a state depository institution in accordance with Texas
Government Code, Chapter 404, Subchapter C, or is a designated custodian of collateral in
accordance with Texas Government Code, Chapter 404, Subchapter D. The Escrow Agent must
provide the TWDB with written notification within 30 days of acceptance of the merger,
consolidation, or transfer. If the merger, consolidation or other transfer has occurred between
state banks, the newly -created entity shall forward the certificate of merger or exchange issued
by the Texas Department of Banking as well as the statement filed with the pertinent chartering
authority, it applicable, to the TWDB within five business days following such merger,
consolidation or exchange.
SECTION 10: AMENDMENTS. This Agreement may be amended from time to time as necessary
with the written consent of the Authority and the TWDB, but no such amendments shall
increase the liabilities or responsibilities or diminish the rights of the Escrow Agent without its
consent.
SECTION 11: TERMINATION. In the event that this Agreement is terminated by either the
Authority or by the Escrow Agent, the Escrow Agent must report said termination in writing to
the TWDB within five business days of such termination. The Authority is responsible for
ensuring that the following criteria are satisfied in selecting the successor escrow agent and
notifying the TWDB of the change in escrow agents: (a) the successor escrow agent must be an
FDIC -insured state or national bank designated by the Texas Comptroller as a state depository;
(b) the successor escrow agent must be retained prior to or at the time of the termination; (c)
an escrow agreement must be executed by and between the Authority and the successor
escrow agent and must contain the same or substantially similar terms and conditions as are
present in this Agreement; and (d) the Authority must forward a copy of the executed escrow
agreement with the successor escrow agent within five business days of said termination. No
funds shall be released by the TWDB until it has received, reviewed and approved the escrow
agreement with the successor escrow agent. if the Authority has not appointed a successor
escrow agent within thirty (30) days of the notice of termination, the Escrow Agent may
petition any court of competent jurisdiction in Texas for the appointment of a successor escrow
agent or for other appropriate relief, and any such resulting appointment shall be binding upon
the Authority. Whether appointed by the Authority or a court, the successor escrow agent and
escrow agreement must be approved by the TWDB for the appointment to be effective. The
3
Escrow Agent is responsible for performance under this Agreement until a successor has been
approved by the TWDB and has signed an acceptable escrow agreement.
SECTION 12: EXPIRATION. This Agreement shall expire upon final transfer of the funds in the
Escrow Account to the Authority.
SECTION 13. POINT OF CONTACT. The points of contact for the Escrow Agent and the TWDB
are as follows:
BOKF, NA
5956 Sherry Lane, Suite 900
Dallas, Texas 75225
Attention: Anthony Orozco
Ph: (972) 892-9973
Fax: (214) 256-7517
E-Mail: aorozco@bokf.com
Executive Administrator
Texas Water Development Board
1700 North Congress Avenue
Austin, Texas 78701
SECTION 14: CHOICE OF LAW. This Agreement shall be governed exclusively by the applicable
laws of the State of Texas. Venue for disputes shall be in the District Court of Travis County,
Texas.
SECTION 15: ASSIGNABILITY. This Agreement shall not be assignable by the parties hereto,
in whole or in part, without the consent of the TWDB, and any attempted assignment shall be
void and of no force and effect.
SECTION 16: ENTIRE AGREEMENT. This Agreement evidences the entire Escrow Agreement
between the Escrow Agent and the Authority and supersedes any other agreements, whether
oral or written, between the parties regarding the Proceeds or the Escrow Account. No
modification or amendment of this Agreement shall be valid unless the same is in writing and
is signed by the Authority and consented to by the Escrow Agent and the TWDB.
SECTION 17: VALIDITY OF PROVISIONS. If any term, covenant, condition or provision of this
Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the provisions shall remain in full force and effect and shall in no way be affected,
impaired or invalidated thereby.
SECTION 18: COMPENSATION FOR ESCROW SERVICES. The Escrow Agent shall be entitled
to compensation for its services as stated in EXHIBIT A, which compensation shall be paid by
the Authority but may not be paid directly from the Escrow Account.
SECTION 19: VERIFICATIONS OF STATUTORY REPRESENTATIONS AND COVENANTS. The
Escrow Agent makes the following representation and verifications pursuant to Chapters 2252,
2271, 2274, and 2276, Texas Government Code, as heretofore amended (the "Government
Code"), in entering into this Agreement. As used in such verifications, "affiliate" means an
entity that controls, is controlled by, or is under common control with the Escrow Agent within
the meaning of SEC Rule 405, 17 C.F.R. § 230.405, and exists to make a profit. Liability for
breach of any such verification during the term of this Agreement shall survive until barred by
the applicable statute of limitations.
A. NOT SANCTIONED COMPANY. The Escrow Agent represents that neither it nor any
of its parent company, wholly- or majority -owned subsidiaries, and other affiliates is a
company identified on a list prepared and maintained by the Texas Comptroller of Public
Accounts under Section 2252.153 or Section 2270.0201, Government Code. -The foregoing
representation excludes the Escrow Agent and its parent company, wholly- or majority -owned
subsidiaries, and other affiliates, if any, that the United States government has affirmatively
declared to be excluded from its federal sanctions regime relating to Sudan or Iran or any
federal sanctions regime relating to a foreign terrorist organization.
B. NO BOYCOTT OF ISRAEL. The Escrow Agent hereby verifies that it and its parent
company, wholly- or majority -owned subsidiaries, and other affiliates, if any, do not boycott
Israel and will not boycott Israel during the term of this Agreement. As used in the foregoing
verification, "boycott Israel" has the meaning provided in Section 2271.001, Government Code.
C. NO DISCRIMINATION AGAINST FIREARM ENTITIES. The Escrow Agent hereby verifies
that it and its parent company, wholly- or majority -owned subsidiaries, and other affiliates, if
any, do not have a practice, policy, guidance, or directive that discriminates against a firearm
entity or firearm trade association and will not discriminate against a firearm entity or firearm
trade association during the term of this Agreement. As used in the foregoing verification,
"discriminate against a firearm entity or firearm trade association" has the meaning provided
in Section 2274.001(3), Government Code.
D. No BOYCOTT OF ENERGY COMPANIES. The Escrow Agent hereby verifies that it and
its parent company, wholly- or majority -owned subsidiaries, and other affiliates, if any, do not
boycott energy companies and will not boycott energy companies during the term of this
Agreement. As used in the foregoing verification, "boycott energy companies" has the meaning
provided in Section 2276.001(1), Government Code.
SECTION 20: FORM 1295 EXEMPTION. The Escrow Agent represents that it is a wholly owned
subsidiary of BOKF Financial, a publicly traded business entity, and therefore this Agreement
is exempt from Section 2252.908, Texas Government Code, as amended.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective upon
signature of both parties.
[Signature Page Follows]
BAYTOWN AREA WATER AUTHORITY
By:
President, Board of Directors
Date: November 1, 2025
Address: P.O. Box 424
Baytown, TX 77522
BOKI~, NA
as Escrow Agent
By. -
Title:
Date:
Address: BOK Financial
5956 Sherry Lane, Suite 900
Dallas, TX 75225
Signature Page to Escrow Agreement
EXHIBIT A
Fee Schedule