Ordinance No. 13,822ORDINANCE NO. 13,822
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, AUTHORIZING THE ISSUANCE OF CITY OF BAYTOWN, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION,
SERIES 2018; LEVYING A TAX IN PAYMENT THEREOF, ENACTING
OTHER PROVISIONS RELATING THERETO; AND PROVIDING FOR THE
EFFECTIVE DATE THEREOF.
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WHEREAS, under the provisions of Subchapter C, Chapter 271, Texas Local
Government Code, as amended (the "Act"), the City of Baytown, Texas (the "City"), is
authorized to issue certificates of obligation for the purposes specified in this Ordinance and for
the payment of all or a portion of the contractual obligations for professional services, including
that of engineers, attorneys, and financial advisors in connection therewith, and to sell the same
for cash as herein provided; and
WHEREAS, the City is authorized to provide that such obligations will be payable from
and secured by the levy of a direct and continuing annual ad valorem tax, within the limits
prescribed by law, against all taxable property within the City, in combination with a limited
pledge of a subordinate lien on the net revenues of the City's waterworks and sanitary sewer
system (the "System") in an amount not to exceed $1,000 as authorized by the Act and Chapter
1502, Texas Government Code; and
WHEREAS, the governing body (the "City Council") of the City has found and
determined that it is necessary and in the best interests of the City and its citizens that it issue
such certificate of obligation authorized by this Ordinance; and
WHEREAS, the City Council has found and determined that the issuance of the
certificate of obligation through a direct purchase will result in the best value for the City; and
WHEREAS, pursuant to a resolution heretofore passed by this governing body, notice of
intention to issue the certificate of obligation of the City payable as provided in this Ordinance
was published in a newspaper of general circulation in the City in accordance with the laws of
the State of Texas, which notice provided that the principal amount of such certificates of
obligation would not exceed $8,000,000 and the proceeds would be used for the purpose of
paying contractual obligations to be incurred for the purposes set forth in Section 3.1 hereof; and
WHEREAS, such notice provided that the City tentatively planned to consider the
passage of an ordinance authorizing the issuance of the certificate of obligation on August 9,
2018; and
WHEREAS, no petition of any kind has been filed with the City Clerk, any member of
the City Council or any other official of the City, protesting the issuance of such certificate of
obligation; and
WHEREAS, this City Council is now authorized and empowered to proceed with the
issuance of said certificate of obligation and to sell the same for cash; and
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WHEREAS, the meeting at which this Ordinance is considered is open to the public as
required by law, and public notice of the time, place, and purpose of said meeting was given as
required by Chapter 551, Texas Government Code, as amended; NOW THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS:
ARTICLE I
DEFINITIONS AND OTHER PRELIMINARY MATTERS
Section 1.1. Definitions.
Unless otherwise expressly provided or unless the context clearly requires otherwise in
this Ordinance, the following terms shall have the meanings specified below:
"Bond Counsel" means Bracewell LLP.
"Business Day" means a day that is not a Saturday, Sunday, legal holiday or other day on
which banking institutions in the city where the Designated Payment/Transfer Office is located
are required or authorized by law or executive order to close.
"Certificate" or "Certificates" means the City's certificate of obligation entitled "City of
Baytown, Texas Combination Tax and Revenue Certificate of Obligation, Series 2018"
authorized to be issued by Section 3.1 of this Ordinance.
"City" means the City of Baytown, Texas.
"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).
"Designated Payment/Transfer Office" means (i) with respect to the initial Paying
Agent/Registrar named herein, its office in Houston, Texas or at such other location designated
by the Paying Agent/Registrar, and (ii) with respect to any successor Paying Agent/Registrar, the
office of such successor designated and located as may be agreed upon by the City and such
successor.
"Fiscal Year" means such fiscal year as shall from time to time be set by the City
Council.
"Interest and Sinking Fund" means the interest and sinking fund established by Section
2.2 of this Ordinance.
"Initial Certificate" means the initial certificate authorized by Section 3.4(d) of this
Ordinance.
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"Interest Payment Date" means date or dates upon which interest on the principal of the
Certificate is scheduled to be paid until its maturity or prior redemption, such dates being
February 1 and August 1 of each year, commencing on February 1, 2019.
"Issuance Date" means the date of the initial delivery of and payment for the Certificate.
"Net Revenues" means the revenues to be derived from the System, after the payment of
all operation and maintenance expenses thereof.
"Ordinance" as used herein and in the Certificate means this ordinance authorizing the
Certificate.
"Owner" means initially the person who is the registered owner of the Certificate, as
shown in the Register.
"Paying Agent/Registrar" means initially ZMFU II, Inc.
"Paying Agent/Registrar Agreement" means the Paying Agent/Registrar Agreement
between the Paying Agent/Registrar and the City relating to the Certificate.
"Purchase Letter" means the letter agreement described in Section 7.1 of this Ordinance.
"Purchaser" means ZMFU II, Inc.
"Record Date" means, for any Interest Payment Date, the fifteenth day of the month next
preceding each Interest Payment Date.
"Register" means the bond register specified in Section 3.6(a) of this Ordinance.
"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.
"Special Payment Date" means the date that is fifteen (15) days after the Special Record
Date, as described in Section 3.3(b).
"Special Record Date" means a new record date for interest payment established in the
event of a nonpayment of interest on a scheduled date, and for thirty (30) days thereafter, as
described in Section 3.3(b).
"State" means the State of Texas.
"System" as used in this Ordinance means the City's waterworks and sanitary sewer
system.
"Unclaimed Payments" means money deposited with the Paying Agent/Registrar for the
payment of principal, redemption premium, if any, or interest on the Certificate as the same
becomes due and payable or money set aside for the payment of Certificate duly called for
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redemption prior to maturity and remaining unclaimed by the Owners of such Certificate for
ninety (90) days after the applicable payment or redemption date.
Section 1.2. Other Definitions.
The terms "Act," "City" and "City Council" shall have the meanings assigned in the
preamble to this Ordinance.
Section 1.3. Findings.
The declarations, determinations, and findings declared, made, and found in the preamble
to this Ordinance are hereby adopted, restated, and made a part of the operative provisions
hereof.
Section 1.4. Table of Contents, Titles, and Headings.
The table of contents, titles, and headings of the Articles and Sections of this Ordinance
have been inserted for convenience of reference only and are not to be considered a part hereof
and shall not in any way modify or restrict any of the terms or provisions hereof and shall never
be considered or given any effect in construing this Ordinance or any provision hereof or in
ascertaining intent, if any question of intent should arise.
Section 1.5. Interpretation.
(a) Unless the context requires otherwise, words of the masculine gender shall be
construed to include correlative words of the feminine and neuter genders and vice versa, and
words of the singular number shall be construed to include correlative words of the plural number
and vice versa.
(b) Any action required to be taken on a date which is not a Business Day shall be
taken on the next succeeding Business Day and have the same effect as if taken on the date so
required.
(c) This Ordinance and all the terms and provisions hereof shall be liberally
construed to effectuate the purposes set forth herein to sustain the validity of this Ordinance.
(d) Article and section references shall mean references to articles and sections of this
Ordinance unless otherwise designated.
ARTICLE II
TAX LEVY; INTEREST AND SINKING FUND; PLEDGE OF REVENUES
Section 2.1. Tax Levy.
(a) Pursuant to the authority granted by the Texas Constitution and the laws of the
State of Texas, there shall be levied and there is hereby levied for the current year and for each
succeeding year thereafter while the principal of the Certificate or any interest thereon is
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outstanding and unpaid, an ad valorem tax on each one hundred dollars valuation of taxable
property within the City, at a rate sufficient, within the limit prescribed by law, to pay the debt
service requirements of the Certificate, being (i) the interest on the Certificate, and (ii) a sinking
fund sufficient to pay the amounts due on each scheduled mandatory redemption date or at final
maturity, as applicable when due and payable, or a sinking fund of 2% per annum (wluchever
amount is greater), full allowance being made for delinquencies and costs of collection.
(b) The ad valorem tax thus levied shall be assessed and collected each year against
all property appearing on the tax rolls of the City most recently approved in accordance with law
and the money thus collected shall be deposited as collected to the Interest and Sinking Fund.
(c) Said ad valorem tax, the collections therefrom, and all amounts on deposit in or
required hereby to be deposited to the Interest and Sinking Fund are hereby pledged and
committed irrevocably to the payment of the principal of and interest on the Certificate and
related fees and expenses when and as due and payable in accordance with its terms and this
Ordinance.
(d) To pay debt service on the Certificate coming due prior to receipt of the taxes
levied to pay such debt service, there is hereby appropriated from current funds on hand, which
are hereby certified to be on hand and available for such purpose, an amount sufficient to pay
such debt service, and such amount shall be used for no other purpose.
Section 2.2. Interest and Sinking Fund.
(a) The City hereby establishes a special fund or account to be designated the "City
of Baytown, Texas, Combination Tax and Revenue Certificate of Obligation, Series 2018,
Interest and Sinking Fund" (the "Interest and Sinking Fund") with said fund to be maintained at
an official depository bank of the City separate and apart from all other funds and accounts of the
City.
(b) Money on deposit in, or required by this Ordinance to be deposited to, the Interest
and Sinking Fund shall be used solely for the purpose of paying the interest on and principal of
the Certificate when and as due and payable in accordance with its terms and this Ordinance and
any related expenses.
Section 2.3. Pledge of Revenues.
The Net Revenues to be derived from the operation of the System in an amount not to
exceed One Thousand Dollars ($1,000) are hereby pledged to the payment of the principal of and
interest on the Certificate as the same come due; provided, however, that such pledge is and shall
be junior and subordinate in all respects to the pledge of the Net Revenues to the payment of all
outstanding obligations of the City and any obligation of the City, whether authorized heretofore
or hereafter, which the City designates as having a pledge senior to the pledge of the Net
Revenues for the payment of the Certificate. The City also reserves the right to issue, for any
lawful purpose at any time, in one or more installments, bonds, certificates of obligation and
other obligations of any kind payable in whole or in part from the Net Revenues, secured by a
pledge of the Net Revenues that may be prior and superior in right to, on a parity with, or junior
and subordinate to the pledge of Net Revenues securing the Certificate. The revenues of the
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System available after the payment of all operation and maintenance expenses of the System, any
debt service payable from gross revenues or Net Revenues of the System, if any, as well as other
payments, costs or expenses designated in an ordinance authorizing the issuance of System
revenue obligations may be used for any lawful purpose of the City.
ARTICLE III
AUTHORIZATION; GENERAL TERMS AND PROVISIONS
REGARDING THE CERTIFICATE
Section 3.1. Authorization.
The City's "City of Baytown, Texas Combination Tax and Revenue Certificate of
Obligation, Series 2018" is hereby authorized to be issued and delivered in accordance with the
Constitution and laws of the State, specifically Subchapter C, Chapter 271, Texas Local
Government Code, as amended. The Certificate shall be issued in the principal amount of
$7,365,000 for the purposes of evidencing the indebtedness of the City for all or any part of the
costs associated with the construction of improvements to and the equipment of public safety
facilities, including the City's fire training facility, and the costs of professional services incurred
in connection therewith.
Section 3.2. Date, Denomination, Maturities and Interest.
(a) The Certificate shall be issued as a single term Certificate in the principal amount
of $7,365,000, bearing interest at 3.00% and maturing on February 1, 2028.
(b) The Initial Certificate shall be numbered I-1 and all other Certificates, if any, shall
be numbered separately from R-1 upward or with such other designation acceptable to the City
and the Paying Agent/Registrar.
(c) The Certificate shall be dated August 15, 2018. Interest on the Certificate shall
accrue from the Issuance Date and be paid until the principal amount thereof has been paid or
provision for such payment has been made, at the rate per annum specified in subsection (a)
above. Such interest shall be payable semi-annually on each Interest Payment Date, computed on
a basis of a 360 -day year composed of twelve 30 -day months.
Section 3.3. Medium, Method and Place of Pam.
(a) The principal of and interest on the Certificate shall be payable in lawful money
of the United States of America.
(b) Interest on the Certificate shall be payable to the Owner whose name appears in
the Register at the close of business on the Record Date; provided, however, that in the event of
nonpayment of interest on a scheduled Interest Payment Date, and for thirty (30) days thereafter,
a new record date for such interest payment (a "Special Record Date") will be established by the
Paying Agent/Registrar, if and when funds for the payment of such interest have been received
from the City. Notice of the Special Record Date and of the scheduled payment date of the past
due interest (the "Special Payment Date," which shall be at least fifteen (15) days after the
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Special Record Date) shall be sent at least five (5) Business Days prior to the Special Record
Date by United States mail, first class, postage prepaid, to the address of the Owner of the
Certificate appearing on the books of the Paying Agent/Registrar at the close of business on the
fifteenth day next preceding the date of mailing of such notice.
(c) Interest on the Certificate shall be paid by check (dated as of the Interest Payment
Date) and sent by the Paying Agent/Registrar to the person entitled to such payment, United
States mail, first class postage prepaid, to the address of such person as it appears in the Register
or by such other customary banking arrangements acceptable to the Paying Agent/Registrar and
the person to whom interest is to be paid; provided, however, that such person shall bear all risk
and expenses of such other customary banking arrangements.
(d) The principal of the Certificate shall be paid to the person in whose name such
Certificate is registered on the respective dates due thereof (whether at the maturity date or the
date of prior redemption thereof) upon presentation and surrender of such Certificate at the
Designated Payment/Transfer Office; provided, however, that for so long as the Certificate is
held by a single Owner, mandatory sinking fund redemption payments, if applicable, made prior
to final maturity will be noted by the Paying Agent/Registrar, in their official records but will not
require presentation and surrender of the Certificate.
(e) If the date for the payment of the principal and interest on the Certificate is not a
Business Day, the date for such payment shall be the next succeeding Business Day, and payment
on such date shall for all purposes be deemed to have been made on the due date thereof as
specified in this Section.
(f) Subject to any applicable escheat, unclaimed property, or similar law, including
Title 6, Texas Property Code, Unclaimed Payments remaining unclaimed by the Owners entitled
thereto for three years after the applicable payment or redemption date shall be paid to the City;
and thereafter, neither the Paying Agent/Registrar nor any other person shall be liable or
responsible to any Owners of such Certificate for any further payment of such unclaimed moneys
or on account of any such Certificate.
Section 3.4. Execution and Registration of Certificate.
(a) The Certificate shall be executed on behalf of the City by the Mayor or Mayor Pro
Tem and the City Clerk, by their manual or facsimile signatures, and the official seal of the City
shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Certificate
shall have the same effect as if the Certificate had been signed manually and in person by each of
said officers, and such facsimile seal on the Certificate shall have the same effect as if the official
seal of the City had been manually impressed upon the Certificate.
(b) In the event that any officer of the City whose manual or facsimile signature
appears on the Certificate ceases to be such officer before the authentication of such Certificate
or before the delivery thereof, such signature nevertheless shall be valid and sufficient for all
purposes as if such officer had remained in such office.
(c) Except as provided below, no Certificate shall be valid or obligatory for any
purpose or be entitled to any security or benefit of this Ordinance unless and until there appears
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thereon the Certificate of Paying Agent/Registrar substantially in the form provided herein, duly
authenticated by manual execution by an officer or duly authorized signatory of the Paying
Agent/Registrar. It shall not be required that the same officer or authorized signatory of the
Paying Agent/Registrar sign each certificate of Paying Agent/Registrar. In lieu of the executed
certificate of Paying Agent/Registrar described above, the Initial Certificate delivered at the
Issuance Date shall have attached thereto the Comptroller's Registration Certificate substantially
in the form provided herein, manually executed by the Comptroller of Public Accounts of the
State, or by his duly authorized agent, which certificate shall be evidence that the Certificate has
been duly approved by the Attorney General of the State, and that it is a valid and binding
obligation of the City, and that it has been registered by the Comptroller of Public Accounts of
the State.
(d) On the Issuance Date, one initial Certificate (the "Initial Certificate") representing
the entire principal amount of the Certificate, payable to the Purchaser or its designee, executed
by the manual or facsimile signatures of the Mayor or Mayor Pro Tem and the City Clerk,
approved by the Attorney General of the State, and registered and manually signed by the
Comptroller of Public Accounts of the State, will be delivered to the Purchaser or its designee.
Section 3.5. Ownership.
(a) The City, the Paying Agent/Registrar and any other person may treat the person in
whose name the Certificate is registered as the absolute Owner of the Certificate for the purpose
of making and receiving payment of the principal thereof, for the purpose of making and
receiving payment of the interest thereon (subject to the provisions herein that the interest is to be
paid to the person in whose name the Certificate is registered on the Record Date or Special
Record Date, as applicable), and for all other purposes, whether or not the Certificate is overdue,
and neither the City nor the Paying Agent/Registrar shall be bound by any notice or knowledge to
the contrary.
(b) All payments made to person deemed to be the Owner of the Certificate in
accordance to this Section shall be valid and effectual and shall discharge the liability of the City
and the Paying Agent/Registrar upon the Certificate to the extent of the sums paid.
Section 3.6. Registration, Transfer, and Exchange.
(a) So long as the Certificate remains outstanding, the City shall cause the Paying
Agent/Registrar to keep at its Designated Payment/Transfer Office a register (the "Register") in
which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar
shall provide for the registration and transfer of the Certificate in accordance with this Ordinance
and subject to the limitations contained in the Purchase Letter.
(b) Subject to the restrictions contained in the Purchase Letter, the ownership of the
Certificate may be transferred only upon the presentation and surrender of the Certificate to the
Paying Agent/Registrar at the Designated Payment/Transfer Office with such endorsement or
other instrument of transfer and assignment as is acceptable to the Paying Agent/Registrar. No
transfer of the Certificate shall be effective until entered in the Register.
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(c) The Certificate shall be exchangeable upon the presentation and surrender thereof
at the Designated Payment/Transfer Office for a Certificate of the same maturity and interest rate
and in any denomination or denominations of $100,000 or any integral multiple of $5,000 in
excess thereof, and in an aggregate principal amount equal to the unpaid principal amount of the
Certificate presented for exchange. The Paying Agent/Registrar is hereby authorized to
authenticate and deliver the Certificate transferred or exchanged for another Certificate in
accordance with this Section.
(d) Each exchange Certificate delivered by the Paying Agent/Registrar in accordance
with this Section shall constitute an original contractual obligation of the City and shall be
entitled to the benefits and security of this Ordinance to the same extent as the Certificate in lieu
of which such exchange Certificate is delivered.
(e) No service charge shall be made to the Owner for the initial registration,
subsequent transfer, or exchange for a different denomination of the Certificate. The Paying
Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover any tax or
other governmental charge that is authorized to be imposed in connection with the registration,
transfer, or exchange of the Certificate.
(f) Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer
or exchange the Certificate called for redemption, in whole or in part, within forty-five (45) days
after the transfer or exchange; provided, however, such limitation shall not be applicable to an
exchange by the Owner of the uncalled balance of a Certificate.
Section 3.7. Cancellation and Authentication.
The Certificate paid or redeemed before scheduled maturity in accordance with this
Ordinance, and a Certificate in lieu of which an exchange Certificate or replacement Certificate
is authenticated and delivered in accordance with this Ordinance, shall be cancelled upon the
making of proper records made with such payment, redemption, exchange, or replacement. The
Paying Agent/Registrar shall dispose of such cancelled Certificate in accordance with the
Securities Exchange Act of 1934, as amended.
Section 3.8. Replacement Certificate.
(a) Upon the presentation and surrender to the Paying Agent/Registrar, at the
Designated Payment/Transfer Office, of a mutilated Certificate, the Paying Agent/Registrar shall
authenticate and deliver in exchange therefor a replacement Certificate of like tenor and principal
amount, bearing a number not contemporaneously outstanding. The City or the Paying
Agent/Registrar may require the Owner of such Certificate to pay a sum sufficient to cover any
tax or other governmental charge that is authorized to be imposed in connection therewith and
any other expenses connected therewith.
(b) In the event that any Certificate is lost, apparently destroyed or wrongfully taken,
the Paying Agent/Registrar, pursuant to the applicable laws of the State and in the absence of
notice or knowledge that such Certificate has been acquired by a bona fide purchaser, shall
authenticate and deliver a replacement Certificate of like tenor and principal amount, bearing a
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number not contemporaneously outstanding, provided that the Owner first complies with the
following requirements:
(i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her
ownership of and the circumstances of the loss, destruction, or theft of such Certificate;
(ii) furnishes such security or indemnity as may be required by the Paying
Agent/Registrar and the City to save them harmless;
(iii) pays all expenses and charges in connection therewith, including, but not
limited to, printing costs, legal fees, fees of the Paying Agent/Registrar, and any tax or
other governmental charge that is authorized to be imposed; and
(iv) satisfies any other reasonable requirements imposed by the City and the
Paying Agent/Registrar.
(c) If, after the delivery of such replacement Certificate, a bona fide purchaser of the
original Certificate in lieu of which such replacement Certificate was issued presents for payment
such original Certificate, the City and the Paying Agent/Registrar shall be entitled to recover such
replacement Certificate from the person to whom it was delivered or any person taking
therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost, or expense incurred by the
City or the Paying Agent/Registrar in connection therewith.
(d) In the event that any such mutilated, lost, apparently destroyed, or wrongfully
taken Certificate has become or is about to become due and payable, the Paying Agent/Registrar,
in its discretion, instead of issuing a replacement Certificate, may pay such Certificate when it
becomes due and payable.
(e) Each replacement Certificate delivered in accordance with this Section shall
constitute an original additional contractual obligation of the City and shall be entitled to the
benefits and security of this Ordinance to the same extent as the Certificate or Certificates in lieu
of which such replacement Certificate is delivered.
ARTICLE IV
REDEMPTION OF CERTIFICATE BEFORE MATURITY
Section 4.1. Limitation on Redemption.
The Certificate shall be subject to redemption before scheduled maturity only as provided
in this Article IV.
Section 4.2. Optional Redemption.
The City has reserved the right to redeem the Certificate before its scheduled maturity
date, in whole or from time to time in part, on any date after the Issuance Date, at a redemption
price equal to the principal amount thereof plus accrued interest to the date of redemption.
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Section 4.3. Mandatory Sinking Fund Redemption.
(a) The Certificate is issued as a single "Term Certificate" as designated in the form
of Certificate contained in Exhibit A attached hereto and is subject to scheduled mandatory
redemption and will be redeemed by the City, in part at a price equal to the principal amount
thereof, without premium, plus accrued interest to the redemption date, out of moneys available
for such purpose in the Interest and Sinking Fund, on the dates and in the respective principal
amounts as set forth in the form of Certificate contained in Exhibit A.
(b) Prior to each scheduled mandatory redemption date, the Paying Agent/Registrar
shall select for redemption by lot, or by any other customary method that results in a random
selection, a principal amount of the Term Certificate equal to the aggregate principal amount of
such Term Certificate to be redeemed, shall call such Term Certificate for redemption on such
scheduled mandatory redemption date, and shall give notice of such redemption, as provided in
Section 4.3. Notwithstanding the foregoing, for so long as the Certificate is held as a single Term
Certificate by the Purchaser, it shall not be necessary for the Paying Agent/Registrar to provide
notice of such mandatory redemption, and the Paying Agent/Registrar shall record the reductions
in the principal amount of the Certificate due to mandatory sinking fund redemption payments in
its official records and provide the City with a copy of such record.
(c) The principal amount of the Term Certificate required to be redeemed on any
redemption date pursuant to subparagraph (a) of this Section 4.3 shall be reduced, at the option of
the City, by the principal amount of any Term Certificate which, at least 45 days prior to the
mandatory sinking fund redemption date shall have been acquired by the City and delivered to
the Paying Agent/Registrar for cancellation.
Section 4.4. Partial Redemption.
(a) If less than the outstanding principal amount of the Certificate is to be redeemed
pursuant to Section 4.2 hereof, the City shall determine the maturity or maturities (or the
mandatory sinking fund payment with respect to a Term Certificate) and the amounts thereof to
be redeemed and shall direct the Paying Agent/Registrar to call by lot, or other customary
method that results in random selection, the Certificate, or portions thereof, within such maturity
or maturities (or mandatory sinking fund payments with respect to a Term Certificate) and in
such principal amounts for redemption.
(b) A portion of the Certificate in a denomination greater than $100,000 may be
redeemed, but only in a principal amount equal to $100,000 or any integral $5,000 multiple
thereof. If such the Certificate is to be partially redeemed, the Paying Agent/Registrar shall treat
each $100,000 portion or any integral $5,000 multiple of the Certificate as though it were a single
Certificate for purposes of selection for redemption.
(c) Upon surrender of any Certificate for redemption in part, the Paying
Agent/Registrar, in accordance with Section 3.6 of this Ordinance, shall authenticate and deliver
an exchange Certificate in an aggregate principal amount equal to the unredeemed portion of the
Certificate so surrendered, such exchange being without charge.
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Section 4.5. Notice of Redemption to Owners.
(a) The Paying Agent/Registrar shall give notice of any redemption of the Certificate
by sending notice by first class United States mail, postage prepaid, not less than 30 days before
the date fixed for redemption, to the Owners of the Certificate (or portions 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.
(b) The City reserves the right to give notice of its election or direction to redeem the
Certificate under Section 4.2 conditioned upon the occurrence of subsequent events. Such notice
may state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized
securities, in an amount equal to the amount necessary to effect the redemption, with the Paying
Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption
date or (ii) that the City retains the right to rescind such notice at any time prior to the scheduled
redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar
instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and
redemption shall be of no effect if such moneys and/or authorized securities are not so deposited
or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such
rescission of a conditional notice of redemption to the affected Owners. The Certificate subject
to conditional redemption where redemption has been rescinded shall remain Outstanding.
(c) Any notice given as provided in this Section shall be conclusively presumed to
have been duly given, whether or not the Owner receives such notice.
Section 4.6. Payment Upon Redemption.
(a) Before or on each redemption date, the City shall deposit with the Paying
Agent/Registrar money sufficient to pay all amounts due on the redemption date and the Paying
Agent/Registrar shall make provision for the payment of the Certificate to be redeemed on such
date by setting aside and holding in trust such amounts as are received by the Paying
Agent/Registrar from the City and shall use such funds solely for the purpose of paying the
principal of, redemption premium, if any, and accrued interest on the Certificate being redeemed.
(b) Upon presentation and surrender of any Certificate called for redemption at the
Designated Payment/Transfer Office of the Paying Agent/Registrar on or after the date fixed for
redemption, the Paying Agent/Registrar shall pay the principal of, redemption premium, if any,
and accrued interest on such Certificate to the date of redemption from the money set aside for
such purpose.
Section 4.7. Effect of Redemption.
(a) When the Certificate has been called for redemption in whole or in part and due
provision has been made to redeem same as herein provided, the Certificate or portions thereof so
redeemed shall no longer be regarded as outstanding except for the purpose of receiving payment
solely from the funds so provided for redemption, and the rights of the Owner to collect interest
which would otherwise accrue after the redemption date on the Certificate or portion thereof
called for redemption shall terminate on the date fixed for redemption. If the City shall fail to
make provision for payment of all sums due on a redemption date, then the Certificate or portion
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thereof called for redemption shall continue to bear interest at the rate stated on the Certificate
until due provision is made for the payment of same.
(b) If the City shall fail to make provision for payment of all sums due on a
redemption date, then the Certificate or portion thereof called for redemption shall continue to
bear interest at the rate stated on the Certificate until due provision is made for the payment of
same by the City.
Section 4.8. Lapse of Payment. Money set aside for the redemption of the Certificate
and remaining unclaimed by the Owner thereof shall be subject to the provisions of Section
3.3(f) hereof.
ARTICLE V
PAYING AGENT/REGISTRAR
Section 5.1. Appointment of Initial Pa idrig Agent/Registrar.
(a) ZMFU II, Inc. is hereby appointed as the initial Paying Agent/Registrar for the
Certificate. The form of Paying Agent/Registrar Agreement is hereby approved.
(b) The City hereby approves and the Mayor or Mayor Pro Tem and the City Clerk
are hereby authorized to execute and deliver a Paying Agent/Registrar Agreement, specifying the
duties and responsibilities of the City and the Paying Agent/Registrar.
Section 5.2. Qualifications.
Each Paying Agent/Registrar shall be a commercial bank or trust company organized
under the laws of the State, or any other entity duly qualified and legally authorized to serve as
and perform the duties and services of paying agent and registrar for the Certificate.
Section 5.3. Maintaining PavingAgent/Registrar.
(a) At all times while the Certificate is outstanding, the City will maintain a Paying
Agent/Registrar that is qualified under Section 5.2 of this Ordinance.
(b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the
City will promptly appoint a replacement, provided no such resignation shall be effective until a
successor Paying Agent/Registrar has accepted the duties of Paying Agent/Registrar for the
Certificate.
Section 5.4. Termination.
The City reserves the right to terminate the appointment of any Paying Agent/Registrar
by (i) delivering to the entity whose appointment is to be terminated (i) forty-five (45) days
written notice of the termination of the appointment and of the Paying Agent/Registrar
Agreement, stating the effective date of such termination, and (ii) appointing a successor Paying
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Agent/Registrar; provided that, no such termination shall be effective until a successor Paying
Agent/Registrar has assumed the duties of Paying Agent/Registrar for the Certificate.
Section 5.5. Notice of Change to Owners.
Promptly upon each change in the entity serving as Paying Agent/Registrar, the City will
cause notice of the change to be sent to each Owner by United States mail, first class, postage
prepaid, at the address in the Register, stating the effective date of the change and the name and
mailing address of the replacement Paying Agent/Registrar.
Section 5.6. Agreement to Perform Duties and Functions.
By accepting the appointment as Paying Agent/Registrar, the Paying Agent/Registrar is
deemed to have agreed to the provisions of this Ordinance and that it will perform the duties and
functions of Paying Agent/Registrar prescribed hereby and under the Paying Agent/Registrar
Agreement.
Section 5.7. Delivery of Records to Successor.
If a Paying Agent/Registrar is replaced, such Paying Agent/Registrar, promptly upon the
appointment of the successor, will deliver the Register (or a copy thereof) and all other pertinent
books and records relating to the Certificate to the successor Paying Agent/Registrar.
ARTICLE VI
FORM OF THE CERTIFICATE
Section 6.1. Form Generally.
(a) The Certificate, including the Registration Certificate of the Comptroller of Public
Accounts of the State, the Certificate of the Paying Agent/Registrar and the Assignment form to
appear on the Certificate, (i) shall be substantially in the form set forth in this Article, with such
appropriate insertions, omissions, substitutions, and other variations as are permitted or required
by this Ordinance, and (ii) may have such letters, numbers, or other marks of identification and
such legends and endorsements (including any reproduction of an opinion of counsel) thereon as,
consistently herewith, may be determined by the City or by the officers executing such
Certificate, as evidenced by their execution thereof.
(b) The Certificate shall be typewritten, photocopied, printed, lithographed, or
engraved, and may be produced by any combination of these methods or produced in any other
similar manner, all as determined by the officers executing such Certificate, as evidenced by their
execution thereof.
Section 6.2. Form of the Certificate.
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The form of the Certificate, including the form of the Registration Certificate of the
Comptroller of Public Accounts of the State, the form of Certificate of the Paying
Agent/Registrar and the form of Assignment appearing on the Certificate, shall be substantially
as set forth in Exhibit A attached hereto.
Section 6.3. Legal Opinion.
The approving legal opinion of Bond Counsel may be attached to or printed on the
reverse side of each Certificate over the certification of the City Clerk of the City, which may be
executed in facsimile.
ARTICLE VII
SALE AND DELIVERY OF CERTIFICATE; DEPOSIT OF PROCEEDS; OFFICIAL
STATEMENT
Section 7.1. Sale of Certificate.
(a) The Certificate is hereby sold and shall be delivered to the Purchaser at the price
of $7,365,000.00, representing the par amount of the Certificate, in accordance with the terms of
the Purchaser Letter of even date herewith, presented to and hereby approved by the City
Council, which price and terms are hereby found and determined to be the most advantageous
reasonably obtainable by the City. The Mayor or Mayor Pro Tem and other appropriate officials
of the City are hereby authorized to execute the Purchase Letter on behalf of the City and to do
any and all things necessary or desirable to satisfy the conditions set out therein and to provide
for the issuance and delivery of the Certificate and the approving opinion of the Attorney General
of the State of Texas.
(b) All officers and officials of the City are authorized to take such actions and to
execute such documents, certificates and receipts, and to make such elections with respect to the
tax-exempt status of the Certificate, as they may deem necessary and appropriate in order to
consummate the delivery of the Certificate. Further, in connection with the submission of the
record of proceedings for the Certificate to the Attorney General of the State of Texas for
examination and approval of the Certificate, the appropriate officer of the City is hereby
authorized and directed to issue a check of the City payable to the Attorney General of the State
of Texas as a nonrefundable examination fee in the amount required by Chapter 1202, Texas
Government Code (such amount to be the lesser of (i) 1/10th of 1% of the principal amount of the
Certificate or (ii) $9,500, but in no case less than $750).
(c) The obligation of the Purchaser to accept delivery of the Certificate is subject to
the Purchaser being furnished with the final, approving opinion of Bond Counsel to the City,
which opinion shall be dated as of and delivered on the Issuance Date.
Section 7.2. Deposit of Proceeds.
Proceeds from the sale of the Certificate shall, promptly upon receipt by the City, be
applied as follows:
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(a) With respect to Certificate proceeds:
(i) Certificate proceeds in the amount of $7,365,000.00 shall be used for the
purposes set forth in Section 3.1; and
(ii) Any amounts remaining after accomplishing the purposes specified in
Section 3.1 may be deposited to the Debt Service Fund.
(b) The costs of issuing the Certificate shall be paid from lawfully available funds of
the City.
Section 7.3. Control and Delivery of Certificate.
(a) The Mayor of the City is hereby authorized to have control of the Initial
Certificate and all necessary records and proceedings pertaining thereto pending investigation,
examination, and approval of the Attorney General of the State, registration by the Comptroller
of Public Accounts of the State and registration with, and initial exchange or transfer by, the
Paying Agent/Registrar.
(b) After registration by the Comptroller of Public Accounts, delivery of the
Certificate shall be made to the Purchaser under and subject to the general supervision and
direction of the Mayor or Mayor Pro Tem, against receipt by the City of all amounts due to the
City under the terms of sale.
(c) All officers of the City are authorized to execute such documents, certificates and
receipts and to make such elections with respect to the tax-exempt status of the Certificate, as
they may deem necessary to consummate the delivery of the Certificate.
ARTICLE VIII
REPRESENTATIONS AND COVENANTS
Section 8.1. Payment of the Certificate.
On or before each Interest Payment Date while any portion of the Certificate is
outstanding and unpaid, there shall be made available to the Paying Agent/Registrar, out of the
Interest and Sinking Fund, money sufficient to pay such interest on and principal of, redemption
premium, if any, and interest on the Certificate as will accrue or mature on the applicable Interest
Payment Date or date of prior redemption.
Section 8.2. Other Representations and Covenants.
(a) The City will faithfully perform, at all times, any and all covenants, undertakings,
stipulations, and provisions contained in this Ordinance and in the Certificate; the City will
promptly pay or cause to be paid the principal of, redemption premium, if any, and interest on the
Certificate on the dates and at the places and manner prescribed in such Certificate; and the City
will, at the times and in the manner prescribed by this Ordinance, deposit or cause to be deposited
the amounts of money specified by this Ordinance.
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(b) The City is duly authorized under the laws of the State to issue the Certificate; all
action on its part for the creation and issuance of the Certificate has been duly and effectively
taken; and the Certificate in the hands of the Owner thereof is and will be a valid and enforceable
obligation of the City in accordance with its terms.
ARTICLE IX
PROVISIONS CONCERNING FEDERAL INCOME TAX EXCLUSION
Section 9.1. General Tax Covenants.
The City intends that the interest on the Certificate be excludable from gross income for
purposes of federal income taxation pursuant to sections 103 and 141 through 150, inclusive, of
the Code. The City covenants and agrees not to take any action, or knowingly omit to take any
action within its control, that if taken or omitted, respectively, would (i) cause the interest on the
Certificate to be includable in the gross income, as defined in section 61 of the Code, of the
holders thereof for purposes of federal income taxation or (ii) result in the violation of or failure
to satisfy any provision of Section 103 and 141 through 150, inclusive, of the Code. In
particular, the City covenants and agrees to comply with each requirement of this Article IX;
provided, however, that the City will not be required to comply with any particular requirement
of this Article IX if the City has received an opinion of nationally recognized bond counsel
("Counsel's Opinion") that (i) such noncompliance will not adversely affect the excludability of
interest on the Certificate from gross income for federal income tax purposes or (ii) compliance
with some other requirement specified in such Counsel's Opinion will satisfy the applicable
requirements of the Code, in which case compliance with such other requirement will constitute
compliance with the corresponding requirement specified in this Article IX.
Section 9.2. No Private Use or Pavment and No Private Loan Financing.
The City will certify, through an authorized officer, employee or agent, that, based upon
all facts and estimates known or reasonably expected to be in existence on the date the
Certificate is delivered, the proceeds of the Certificate will not be used in a manner that would
cause the Certificate to be a "private activity bond" within the meaning of section 141 of the
Code. The City covenants and agrees that it will make such use of the proceeds of the
Certificate, including interest or other investment income derived from Certificate proceeds,
regulate the use of property financed, directly or indirectly, with such proceeds, and take such
other and further action as may be required so that the Certificate will not be a "private activity
bond" within the meaning of section 141 of the Code.
Section 9.3. No Federal Guarantee.
The City covenants and agrees not to take any action, or knowingly omit to take any
action within its control, that, if taken or omitted, respectively, would cause the Certificate 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.
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Section 9.4. Certificate Is Not A Hedge Bond.
The City covenants and agrees not to take any action, or knowingly omit to take any
action, and has not knowingly omitted and will not knowingly omit to take any action, within its
control, that, if taken or omitted, respectively, would cause the Certificate to be a "hedge bond"
within the meaning of section 149(g) of the Code.
Section 9.5. No -Arbitrage Covenant.
The City will certify, through an authorized officer, employee or agent, that, based upon
all facts and estimates known or reasonably expected to be in existence on the date the
Certificate is delivered, the proceeds of the Certificate will not be used in a manner that would
cause the Certificate to be an "arbitrage bond" within the meaning of section 148(a) of the Code.
Moreover, the City covenants and agrees that it will make such use of the proceeds of the
Certificate including interest or other investment income derived from Certificate proceeds,
regulate investments of proceeds of the Certificate, and take such other and further action as may
be required so that the Certificate will not be an "arbitrage bond" within the meaning of section
148(a) of the Code.
Section 9.6. Arbitrage Rebate.
If the City does not qualify for an exception to the requirements of Section 148(f) of the
Code, the City will take all necessary steps to comply with the requirement that certain amounts
earned by the City on the investment of the "gross proceeds" of the Certificate (within the
meaning of section 148(f)(6)(B) of the Code), be rebated to the federal government.
Specifically, the City will (i) maintain records regarding the investment of the gross proceeds of
the Certificate as may be required to calculate the amount earned on the investment of the gross
proceeds of the Certificate separately from records of amounts on deposit in the funds and
accounts of the City allocable to other bond issues of the City or moneys do not represent gross
proceeds of the Certificate of the City, (ii) calculate at such times as are required by the
Regulations, the amount earned from the investment of the gross proceeds of the Certificate that
is required to be rebated to the federal government, and (iii) pay, not less often than every fifth
anniversary date of the delivery of the Certificate or on such other dates as may be permitted
under the Regulations, all amounts required to be rebated to the federal government. Further, the
City will not indirectly pay any amount otherwise payable to the federal government pursuant to
the foregoing requirements to any person other than the federal government by entering into any
investment arrangement with respect to the gross proceeds of the Certificate that might result in a
reduction in the amount required to be paid to the federal government because such arrangement
results in a smaller profit or a larger loss than would have resulted if the arrangement had been at
arm's length and had the yield on the issue not been relevant to either party.
Section 9.7. Information Reporting.
The City covenants and agrees to file or cause to be filed with the Secretary of the
Treasury, not later than the fifteenth day of the second calendar month after the close of the
calendar quarter in which the Certificate is issued, an information statement concerning the
Certificate, all under and in accordance with section 149(e) of the Code.
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#5737246.11
Section 9.8. Record Retention.
The City will retain all pertinent and material records relating to the use and expenditure
of the proceeds of the Certificate until three (3) years after the Certificate is redeemed or paid at
maturity, or such shorter period as authorized by subsequent guidance issued by the Department
of the Treasury, if applicable. All records will be kept in a manner that ensures their complete
access throughout the retention period. For this purpose, it is acceptable that such records are
kept either as hardcopy books and records or in an electronic storage and retrieval system,
provided that such electronic system includes reasonable controls and quality assurance
programs that assure the ability of the City to retrieve and reproduce such books and records in
the event of an examination of the Certificate by the Internal Revenue Service.
Section 9.9. Registration.
The Certificate will be issued in registered form.
Section 9.10. Deliberate Actions.
The City will not take a deliberate action (as defined in section 1.141-2(d)(3) of the
Regulations) that causes the Certificate to fail to meet any requirement of section 141 of the
Code after the issue date of the Certificate unless an appropriate remedial action is permitted by
section 1.141-12 of the Regulations, the City takes such remedial action and the City receives a
Counsel's Opinion that such remedial action cures any failure to meet the requirements of
section 141 of the Code.
Section 9.11. Continuing Obligation.
Notwithstanding any other provision of this Ordinance,
covenants and provisions of this Article IX will survive the
Certificate for so long as such matters are relevant to the
Certificate from gross income of interest on the Certificate.
ARTICLE X
DISCHARGE
Section 10.1. Discharge.
the City's obligations under the
defeasance and discharge of the
excludability of interest on the
The Certificate may be defeased, discharged or refunded in any manner now or hereafter
permitted by applicable law.
SUM
#5737246.11
ARTICLE XI
MISCELLANEOUS
Section 11.1. Changes to Ordinance.
The City Attorney or Bond Counsel is hereby authorized to make changes to the terms of
this Ordinance if necessary or desirable to carry out the purposes hereof or in connection with the
approval of the issuance of the Certificate by the Attorney General of the State.
Section 11.2. Related Matters.
To satisfy in a timely manner all of the City's obligations under this Ordinance, the
Mayor, the City Manager, the Finance Director, the City Clerk and all other appropriate officers
and agents of the City are hereby authorized and directed to do any and all things necessary
and/or convenient to carry out the terms and purposes of this Ordinance.
Section 11.3. Individuals Not Liable.
No covenant, stipulation, obligation or agreement herein contained shall be deemed to be
a covenant, stipulation, obligation or agreement of any member of City Council or agent or
employee of City Council or of the City in his or her individual capacity and neither the
members of City Council nor any officer thereof, nor any agent or employee of City Council or
of the City, shall be liable personally on the Certificate, or be subject to any personal liability or
accountability by reason of the issuance thereof.
Section 11.4. Severability and Savings.
If any section, paragraph, clause or provision of this Ordinance shall for any reason be
held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph,
clause or provision shall not affect any of the remaining provisions of this Ordinance.
Section 11.5. Repealer.
All ordinances or resolutions, or parts thereof, heretofore adopted by the City and
inconsistent with the provisions of this Ordinance are hereby repealed to the extent of such
conflict.
Section 11.6. Force and Effect.
This Ordinance shall be in full force and effect from and after its final passage, and it is
so ordained.
[Execution Page Follows]
#5737246.11
INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the
City of Baytown this the 9th day of August, 2018.
ATTEST:
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APPROVED AS TO FORM:
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4 ACIO RAMIREZ, SR., i Attorney
#5737246.10
Signature Page to
City of Baytown Ordinance No.
EXHIBIT A
FORM OF CERTIFICATE
(a) Form of Certificate.
REGISTERED
NO.
United States of America
State of Texas
Counties of Harris and Chambers
AMOUNT
CITY OF BAYTOWN, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATE OF OBLIGATION
SERIES 2018
INTEREST RATE: MATURITY DATE: ISSUANCE DATE:
3.00% February 1, 2028 August 28, 2018
The City of Baytown (the "City"), in the Counties of Harris and Chambers, State of
Texas, for value received, hereby promises to pay to
ZMFU II, INC.
or registered assigns, on the maturity date specified above, the sum of
SEVEN MILLION THREE HUNDRED SIXTY-FIVE THOUSAND DOLLARS
and to pay interest on such principal amount from the later of the Issuance Date specified above
or the most recent interest payment date to which interest has been paid or provided for until
payment of such principal amount has been paid or provided for, at the per annum rate of interest
specified above, computed on the basis of a 360 -day year of twelve 30 -day months, such interest
to be paid semiannually on February 1 and August 1 of each year, commencing on February 1,
2019.
The principal of this Certificate shall be payable without exchange or collection charges
in lawful money of the United States of America upon presentation and surrender of this
Certificate at the corporate trust office of ZMFU II, Inc., Houston, Texas, or such other location
designated by the Paying Agent/Registrar (the "Designated Payment/Transfer Office"), of the
Paying Agent/Registrar or, with respect to a successor Paying Agent/Registrar, at the Designated
Payment/Transfer Office of such successor. Interest on this Certificate is payable by check dated
as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the
registered owner at the address shown on the registration books kept by the Paying
Agent/Registrar or by such other customary banking arrangement acceptable to the Paying
Exhibit A to Ordinance
#5737246.11
Agent/Registrar and the registered owner; provided, however, such registered owner shall bear
all risk and expenses of such customary banking arrangement. For the purpose of the payment of
interest on this Certificate, the registered owner shall be the person in whose name this
Certificate is registered at the close of business on the "Record Date," which shall be the
fifteenth day of the month next preceding such interest payment date. In the event of a
nonpayment of interest on a scheduled payment date, and for thirty (30) days thereafter, a new
record date for such interest payment (a "Special Record Date") will be established by the
Paying Agent/Registrar, if and when funds for the payment of such interest have been received
from the City. Notice of the Special Record Date and of the special payment date of the past due
interest (the "Special Payment Date," which date shall be fifteen (15) days after the Special
Record Date) shall be sent at least five (5) business days prior to the Special Record Date by
United States mail, first class, postage prepaid, to the address of each owner of a Certificate
appearing on the books of the Paying Agent/Registrar at the close of business on the last day
next preceding the date of mailing of such notice.
If the date for the payment of the principal of or interest on this Certificate is not a
Business Day, the date for such payment shall be the next succeeding day which is not a
Saturday, Sunday or legal holiday, or day on which banking institutions in the State of Texas or
the city in which the Designated Payment/Transfer Office of the Paying Agent/Registrar is
located are generally authorized or obligated by law or executive order to close (a "Business
Day"), and payment on such date shall for all purposes be deemed to have been made on the
original date payment was due.
This Certificate is dated August 15, 2018 and is issued in aggregate principal amount of
$7,365,000 pursuant to a certain ordinance (the "Ordinance") adopted by the City Council of the
City for the costs associated with the construction of improvements to and the equipment of
public safety facilities, including the City's fire training facility, and the costs of professional
services incurred in connection therewith.
The City has reserved the right to redeem the Certificate before its respective scheduled
maturity date, in whole or from time to time in part, on any date after the Issuance Date, at a
redemption price equal to the principal amount thereof plus accrued interest to the date of
redemption.
The Certificate is issued as a "Tenn Certificate" and is subject to mandatory sinking fund
redemption prior to scheduled maturity, and will be redeemed by the City, in part at a redemption
price equal to the principal amount thereof, without premium, plus interest accrued to the
redemption date, on the dates and in the principal amounts shown in the following schedule:
Exhibit A to Ordinance
#5737246.11
Mandatory Sinking
Fund Redemption
Mandatory Redemption Date Payments
February 1, 2019
$655,000
February 1, 2020
$660,000
February 1, 2021
$680,000
February 1, 2022
$700,000
February 1, 2023
$720,000
February 1, 2024
$745,000
February 1, 2025
$765,000
February 1, 2026
$790,000
February 1, 2027
$815,000
February 1, 2028 (maturity)
$835,000
Reference is made to the Ordinance for complete details concerning the manner of
redeeming this Certificate.
As provided in the Ordinance, and subject to certain limitations contained in the
Ordinance and the Purchase Letter, this Certificate is transferable upon surrender of this
Certificate for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar
with such endorsement or other evidence of transfer as is acceptable to the Paying
Agent/Registrar; thereupon, one or more new fully registered Certificate of the same stated
maturity, of authorized denominations, bearing the same rate of interest, and for the same
aggregate principal amount will be issued to the designated transferee or transferees.
The City, the Paying Agent/Registrar, and any other person may treat the person in whose
name this Certificate is registered as the owner hereof for the purpose of receiving payment as
herein provided (except interest shall be paid to the person in whose name this Certificate is
registered on the Record Date) and for all other purposes, whether or not this Certificate be
overdue, and neither the City nor the Paying Agent/Registrar shall be affected by notice to the
contrary.
IT IS HEREBY certified, recited and covenanted that this Certificate has been duly and
validly issued and delivered; that all acts, conditions and things required or proper to be
performed, to exist and to be done precedent to or in the issuance and delivery of this Certificate
have been performed, exist and have been done in accordance with law; and that annual
ad valorem taxes, within the limits prescribed by law, sufficient to provide for the payment of the
interest on and principal of this Certificate, as such interest comes due and such principal
matures, have been levied and ordered to be levied against all taxable property in the City.
IT IS FURTHER certified, recited and represented that the revenues to be derived from
the operation of the City's waterworks and sanitary sewer system, after the payment of all
operation and maintenance expenses thereof (the "Net Revenues"), are pledged to the payment of
Exhibit A to Ordinance
#5737246.11
the principal of and interest on the Certificate in an amount not to exceed $1,000; provided,
however, that such pledge is junior and subordinate in all respects to the pledge of the Net
Revenues to the payment of all outstanding obligations of the City and any obligation of the
City, whether authorized heretofore or hereafter, which the City designates as having a pledge
senior to the pledge of the Net Revenues to the payment of the Certificate. The City also
reserves the right to issue, for any lawful purpose at any time, in one or more installments,
bonds, certificates of obligation and other obligations of any kind payable in whole or in part
from the Net Revenues, secured by a pledge of the Net Revenues that may be prior and superior
in right to, on a parity with, or junior and subordinate to the pledge of the Net Revenues securing
the Certificate.
IN WITNESS WHEREOF, the City has caused this Certificate to be duly executed under
its official seal in accordance with law.
City Clerk Mayor [Pro Tem] 1
City of Baytown, Texas City of Baytown, Texas
[SEAL]
(b) Form of Comptroller's Registration Certificate.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER §
OF PUBLIC ACCOUNTS § REGISTER NO.
THE STATE OF TEXAS §
I HEREBY CERTIFY THAT this Certificate has been examined, certified as to validity,
and approved by the Attorney General of the State of Texas and that this Certificate has been
registered by the Comptroller of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL OF OFFICE this
[SEAL]
I Delete if the Mayor executes the Certificate.
Comptroller of Public Accounts
of the State of Texas
Exhibit A to Ordinance
#5737246.11
(c) Form of Certificate of Paving Agent/Registrar.
CERTIFICATE OF PAYING AGENT/REGISTRAR
The records of the Paying Agent/Registrar show that the Initial Certificate of this series
of certificates of obligation was approved by the Attorney General of the State of Texas and
registered by the Comptroller of Public Accounts of the State of Texas, and that this is the
Certificate referred to in the within -mentioned Ordinance.
Date:
(d) Form of Assignment.
ZMFU II, Inc.,
as Paying Agent/Registrar
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto (print or
typewrite name, address and Zip Code of transferee):
(Social Security or other identifying number: ) the within Certificate
and all rights hereunder and hereby irrevocably constitutes and appoints
attorney to transfer the within Certificate on the books kept for
registration hereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed By:
Authorized Signatory
NOTICE: The signature on this Assignment
must correspond with the name of the
registered owner as it appears on the face of
the within Certificate in every particular and
must be guaranteed in a manner acceptable to
the Paying Agent/Registrar.
(e) The Initial Certificate shall be in the form set forth in paragraphs (a), (b), (c) and
(d) of this Section. The Initial Certificate shall be numbered I-1.
Exhibit A to Ordinance
#5737246.11