Loading...
Ordinance No. 4,747BAYTWN(h) ® ORDINANCE NO. 4747 ORDINANCE AUTHORIZING THE ISSUANCE OF $400,000 CITY OF BAYTOWN, TEXAS CERTIFICATES OF OBLIGATION, SERIES 1987; APPROPRIATING $400,000 OF PROCEEDS OF SALE THEREOF FOR THE PURCHASE OF LAND FOR AUTHORIZED NEEDS AND PURPOSES AND THE COST OF PROFESSIONAL SERVICES INCURRED IN CONNECTION THEREWITH; AND CONTAINING OTHER PROVISIONS RELATED THERETO THE STATE OF TEXAS COUNTIES OF HARRIS AND CHAMBERS CITY OF BAYTOWN WHEREAS, the City Council of the CITY OF BAYTOWN, TEXAS (the - "City "), authorized the publication of a notice of intention to issue certificates of obligation to the effect that the City Council would meet on June 11, 1987, to adopt.- an ordinance and take such other action as may be deemed necessary to authorize the issuance of certificates of obli- gation, payable from City ad valorem taxes, for the purpose° 'of evidencing the indebtedness of the City for all or any part of the cost of purchasing land for authorized needs and purposes; and the cost of professional services incurred in connection therewith; and WHEREAS, such notice was published at the times and in the manner required by the Constitutions and laws of the State of Texas and of the United States of America, respec- tively, particularly Article 2368a.1, Vernon's Texas Civil Statutes, as amended; and WHEREAS, on June 11, 1987, the date tentatively estab- lished by the City for adoption of an ordinance authorizing the issuance of said certificates of obligation, the City was unable to adopt said ordinance because the exact terms of said certificates of obligation had not been established; and WHEREAS, at the meeting of the City Council held on June 11, 1987, and at each regular meeting of the City Council since that date, the City Council made known that its intention to issue said certificates of obligation was still in effect; and ® WHEREAS, the terms of the certificates of obligation have now been established and the City has now determined to adopt this ordinance authorizing the issuance of said • V, C certificates of obligation, and affirmatively finds that it is authorized to proceed with the issuance and sale of said certificates in accordance with the terms hereof; and WHEREAS, no petition or other request has been filed with or presented to any official of the City requesting that any of the proceedings authorizing such certificates of obligation be submitted to a referendum or other election; THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS: Section 1.. Throughout this ordinance the following terms and expressions as used herein shall have the meanings set forth below: The term "Certificates" or "Series 1987 Certificates" shall mean the Series 1987 Certificates authorized in this Ordinance, unless the context clearly indicates otherwise. The term "City" shall mean the City of Baytown, Texas. The term "Construction Fund" shall mean the Construc- tion Fund established pursuant to Section 8 of this Ordi- nance. The term "Interest and Sinking Fund" shall mean the interest and sinking fund established by the City pursuant to Section 7 of this Ordinance. The term "Interest Payment Date ", when used in connec- tion with any Certificate, shall mean February 1, 1988, and each February 1 and August 1 thereafter until maturity. The term "Ordinance" as used herein and in the Certifi- cates shall mean this ordinance authorizing the Certificates. The term "Owner" shall mean any person who shall be the registered owner of any outstanding Certificates. The term "Paying Agent" shall mean the Registrar. The term "Record Date" shall mean, for any Interest Payment Date, the fifteenth day of the month next preceding such Interest Payment Date. The term "Register" shall mean the books of registra- tion kept by the Registrar in which are maintained the names -2- v and addresses of and the principal amounts registered to each owner. ® The term "Registrar" shall mean First City National Bank of Houston, Houston, Texas, and its successors in that capacity. Section 2. The Certificates shall be issued in fully registered form, without coupons, in the total authorized aggregate amount of Four Hundred Thousand Dollars ($400,000) for the purpose of evidencing the indebtedness of the City for all or any part of the cost of purchasing land for authorized needs and purposes; and the cost of professional services incurred in connection therewith. Section 3. (a) The Certificates shall be designated as the "CITY OF BAYTOWN, TEXAS, CERTIFICATES OF OBLIGATION, SERIES 1987 ", and shall be dated August 1, 1987. The Certificates shall bear interest from the later of August 1, 1987, 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 twelve 30 day months, inter- est payable on February 1, 1988, and semiannually thereafter ® on August 1 and February 1 of each year until maturity. (b) The Certificates shall be 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 out in this Ordinance. The Certificates shall mature on February 1 in each of the years and in the amounts set out in such schedule. Certificates delivered in transfer of or in exchange for other Certifi- cates shall be numbered in order of their authentication by the 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 Certificate or Certificates in lieu of which they are delivered. -3- (d) Only such Certificates as shall bear thereon either (i) the manually executed registration certificate of the Comptroller of Public Accounts of Texas substantially in the form provided in Section 5(b) of this Ordinance or (ii) a certificate of authentication, substantially in the form provided in Section 5(c). of this. Ordinance, manually exe- cuted by an authorized representative of the Registrar, shall be entitled to the benefits of this Ordinance or shall be valid. or obligatory for any purpose. Such duly executed certificate of authentication shall be conclusive evidence that the Certificate so authenticated was delivered by the Registrar hereunder. (e) The Registrar is hereby appointed as the paying agent for the Certificates. The principal of the Certifi- cates 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 become due and pay- able, at the principal corporate trust office of the Regis - trar. The interest on each Certificate shall be payable by check or draft payable on the Interest Payment Date mailed 1XI'.0 Certificate Principal Interest Number Year Amount Rate R -1 1989 $100;000 6.90% R -2 1990 100,000 5.40 R -3 1991 100,000 5.50 R -4 1992 100,000 5.70 (c) The Certificates shall be signed by the Mayor of the City and countersigned by the City Clerk of the City, by their manual, lithographed, or facsimile signatures, and the official seal of the City shall be manually impressed or placed in facsimile thereon. Such facsimile signatures on the Certificates shall have the same effect as if each of the Certificates had been signed manually and in person by each of said officers, and such facsimile seal on the Certificates shall have the same effect as if the. .official seal of the City had been manually impressed upon each.of the Certificates. If any officer of the City whose manual or facsimile signature shall appear on the Certificates shall cease to be such officer before the authentication of such Certificates or before the delivery of such Certifi- cates, such manual or facsimile signature shall nevertheless ® be valid and sufficient for all purposes as if such officer had in remained such office. (d) Only such Certificates as shall bear thereon either (i) the manually executed registration certificate of the Comptroller of Public Accounts of Texas substantially in the form provided in Section 5(b) of this Ordinance or (ii) a certificate of authentication, substantially in the form provided in Section 5(c). of this. Ordinance, manually exe- cuted by an authorized representative of the Registrar, shall be entitled to the benefits of this Ordinance or shall be valid. or obligatory for any purpose. Such duly executed certificate of authentication shall be conclusive evidence that the Certificate so authenticated was delivered by the Registrar hereunder. (e) The Registrar is hereby appointed as the paying agent for the Certificates. The principal of the Certifi- cates 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 become due and pay- able, at the principal corporate trust office of the Regis - trar. The interest on each Certificate shall be payable by check or draft payable on the Interest Payment Date mailed 1XI'.0 by the 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. (f) The City, the Registrar and any other person may treat the person in whose name any Certificate is registered as the absolute owner of such Certificate for the purpose of making and receiving payment of the principal thereof and for the further purpose of making and receiving payment of the interest thereon, and for all other purposes, whether or not such Certificate is overdue, and neither the City nor the 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 Certificate in accordance with this Section 3(f) shall be valid and effectual and shall discharge the liability of the City and the Registrar upon such Certifi- cate to the extent of the sums paid. (g) So long as any Certificates remain outstanding, the Registrar shall keep the Register at its principal corporate trust office in which, subject to such reasonable regulations as it may prescribe, the Registrar shall provide for the registration and transfer of Certificates in accor- dance with the terms of this Ordinance. Each Certificate shall be transferable only upon the presentation and surrender thereof at the principal corpo- rate trust office of the 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 Registrar. Upon due presentation of any Certificate for transfer, the Registrar shall authen- ticate and deliver in exchange therefor, to the extent possible within three (3) business days after such presen- tation, a new Certificate or Certificates, registered in the name of the transferee or transferees, in authorized de- nominations and of the same maturity and aggregate principal amount and bearing interest at the same rate as the Certifi- cate or Certificates so presented. All Certificates shall be exchangeable upon presenta- tion and surrender thereof at the principal corporate trust office of the Registrar for a Certificate or Certificates of the same maturity and interest rate and in any authorized denomination, in an aggregate principal amount equal to the ® unpaid principal amount of the Certificate or Certificates presented for exchange. The Registrar shall be and is hereby authorized to authenticate and deliver exchange Certificates in accordance with the provisions of this E67M Section 3(g). Each Certificate delivered in accordance with .this Section 3(g) shall be entitled to the benefits and security of this Ordinance to the same extent as the Certif- icate or Certificates in lieu of which such Certificate is delivered. The City or the Registrar may require the Owner of any Certificate 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 Certificate. Any fee or charge of the Registrar for such transfer or exchange shall be paid by the City. (h) All Certificates paid in accordance with this Ordinance, and all Certificates in lieu of which exchange Certificates. or replacement Certificates are authenticated and delivered in accordance herewith, shall be cancelled and destroyed upon the making of proper reoords regarding such payment or redemption. The Registrar shall furnish the City with appropriate certificates of destruction of such Certif- icates. (i) Upon the presentation and surrender to the Regis- trar of a mutilated Certificate, the Registrar shall authen- ticate and deliver in exchange therefor a replacement Cer- tificate of like maturity, interest rate and principal amount, bearing a number not contemporaneously outstanding. The City or the Registrar may require the Owner of such Certificate 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 Registrar. If any Certificate is lost, apparently destroyed, or wrongfully taken, the City, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowl- edge that such Certificate has been acquired by a bona fide purchaser, shall execute and the Registrar shall authenti- cate and deliver a replacement Certificate 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 City and the Registrar satisfactory evidence of the ownership of and the circumstances of the loss, destruction or theft of such Certificate; IM L' r� (2) furnished such security or indemnity as may be required by the Registrar and the City 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 Registrar and any tax or other governmental charge that may be imposed; and (4) met any other reasonable requirements of the City and the Registrar. 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 Regis- trar shall be entitled to recover such replacement Certifi- cate 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 Registrar in connection there- with. If any such mutilated, lost, apparently destroyed or wrongfully taken Certificate has become or is about to become due and payable, the City in its discretion may, instead of issuing a replacement Certificate, authorize the Registrar to pay such Certificate. Each replacement Certificate delivered in accordance with this Section 3(i) shall be entitled to the benefits and security of this Ordinance to the same extent as the Certif- icate or Certificates in lieu of which such replacement Certificate is delivered. Section 4: The Certificates shall not be subject to redemption prior to their scheduled maturities. Section S. (a) The Certificates shall be tially the following form, with such additions, and variations as may be necessary or desirable ted by this Ordinance: -7- in substan- deletions and permit- L (Face of Certificate) UNITED STATES OF AMERICA ® STATE OF TEXAS COUNTIES OF HARRIS AND CHAMBERS NUMBER DENOMINATION R- $ REGISTERED REGISTERED CITY OF BAYTOWN, TEXAS Certificate of Obligation, Series 1987 INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP: August 1, 1987 REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS THE CITY OF BAYTOWN, TEXAS (the "City ") promises to pay to the Registered Owner identified above, or registered assigns, on the date specified above, upon presentation and surrender of this certificate at the principal corporate trust office of First City National Bank of Houston, Houston, Texas (the "Registrar "), the principal amount identified above, payable 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 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 August 1, 1987, or the most recent interest payment date to which interest has been paid or duly provided for. Interest on this certificate is payable by check or draft payable on February 1, 1988, and semiannually thereafter on each August 1 and February 1, mailed to the registered owner as shown on the books of registration kept by the Registrar as of the fifteenth day of the month next preceding each interest payment date (the "Record Date "). REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS CERTIFICATE SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL HAVE THE SAME FORCE AND EFFECT AS IF SET ® FORTH AT THIS PLACE. �j Q1m Mayor City Clerk (Back Panel of Certificate) THIS CERTIFICATE is one of a duly authorized issue of Certificates, aggregating $400,000 (the "Certificates "), ® issued in accordance with the Constitution and laws of the State of Texas, particularly Article 2368a.1, Vernon's Texas Civil Statutes, as amended, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of purchasing land for authorized needs and purposes; and the cost of professional services incurred in connection therewith, and authorized pursuant to an ordinance duly adopted by the City Council of the City on July 9, 1987 (the "Ordinance ") entitled ORDINANCE AUTHORIZING THE ISSUANCE OF $400,000 CITY OF BAYTOWN, TEXAS; CERTIFICATES OF OBLIGATION, SERIES 1987; APPROPRIATING $400,000 OF PROCEEDS OF SALE THEREOF FOR THE PURCHASE OF LAND FOR AUTHORIZED NEEDS AND PURPOSES AND THE COST OF PROFESSIONAL SERVICES INCURRED IN CONNECTION THEREWITH; AND CONTAINING OTHER PROVISIONS RELATED THERETO, which Ordinance is of record in the offi- cial minutes of said City Council. THE CERTIFICATES are not subject to redemption prior to their scheduled maturities. THIS CERTIFICATE is transferable only upon presentation and surrender at the principal corporate trust office of the Registrar, duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or his au- thorized representative, subject to the terms and conditions of the Ordinance. M*M J IN WITNESS WHEREOF, this certificate has been signed _with the manual or facsimile signature of the Mayor of the ® City and countersigned with the manual or ture of the City Clerk of the City, and the facsimile official signa- seal of the City has been duly impressed, or placed in facsimile, on this certificate. (AUTHENTICATION CERTIFICATE) (SEAL) CITY OF BAYTOWN, TEXAS Mayor City Clerk (Back Panel of Certificate) THIS CERTIFICATE is one of a duly authorized issue of Certificates, aggregating $400,000 (the "Certificates "), ® issued in accordance with the Constitution and laws of the State of Texas, particularly Article 2368a.1, Vernon's Texas Civil Statutes, as amended, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of purchasing land for authorized needs and purposes; and the cost of professional services incurred in connection therewith, and authorized pursuant to an ordinance duly adopted by the City Council of the City on July 9, 1987 (the "Ordinance ") entitled ORDINANCE AUTHORIZING THE ISSUANCE OF $400,000 CITY OF BAYTOWN, TEXAS; CERTIFICATES OF OBLIGATION, SERIES 1987; APPROPRIATING $400,000 OF PROCEEDS OF SALE THEREOF FOR THE PURCHASE OF LAND FOR AUTHORIZED NEEDS AND PURPOSES AND THE COST OF PROFESSIONAL SERVICES INCURRED IN CONNECTION THEREWITH; AND CONTAINING OTHER PROVISIONS RELATED THERETO, which Ordinance is of record in the offi- cial minutes of said City Council. THE CERTIFICATES are not subject to redemption prior to their scheduled maturities. THIS CERTIFICATE is transferable only upon presentation and surrender at the principal corporate trust office of the Registrar, duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or his au- thorized representative, subject to the terms and conditions of the Ordinance. M*M THE CERTIFICATES are exchangeable at the principal cor- porate trust office of the Registrar in the principal amount ® of $5,000 or any integral multiple thereof, subject to the terms and conditions of the Ordinance. THIS CERTIFICATE shall not be valid or obligatory for any purpose or be entitled to any benefit under the Ordi- nance unless this Certificate either (i) is registered by the Comptroller of Public Accounts of the State of Texas by registration certificate endorsed hereon or (ii) is authen- ticated by the Registrar by due execution of the authentica- tion certificate endorsed hereon. 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 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 within the limits prescrib- ed by the Constitution and laws of the State of Texas, and have been pledged irrevocably for such payment; that this Certificate shall be a debt of the City within the meaning of Article XI, Sections 5 and 7 of the Constitution of Texas; and that, when delivered, this Certificate shall be deemed and construed (i) to be a "Security" within the meaning of Chapter 8, Investment Securities, Uniform Commer- cial Code (Chapter 785, Acts of the 60th Legislature, Regular Session, 1967), and (ii) to be a general obligation of the City within the meaning of Chapter 784, Acts of the 61st Legislature of Texas, Regular Session, 1969. (b) Certificates Nos. R -1 through R -4 shall be regis- tered by the Comptroller of Public Accounts of the State of Texas, as provided by law. The registration certificate of the Comptroller of Public Accounts shall be printed on or attached to Certificates Nos. R -1 through R -4 and shall be in substantially the following form: COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. ® I HEREBY CERTIFY THAT this certificate has been exam- ined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this certificate has v -10- ,7 n been registered by the Comptroller of Public Accounts of the State of Texas. WITNESS MY SIGNATURE AND SEAL this (SEAL) xxxxxxxxxx Comptroller of Public Accounts of the State of Texas (c) The following form of authentication certificate shall be printed on the face of each of the Certificates, except for Certificates Nos. R -1 through R -4: Registration Date: AUTHENTICATION CERTIFICATE It is hereby certified that this certificate has been delivered pursuant to the Ordinance described in the text of this Certificate, in exchange for or in replacement of a certificate, certificates, or a portion of a certificate or certificates of a Series which was originally approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. First City National Bank of Houston Houston, Texas By Authorized Signature (d) The following form of assignment shall be printed on the back of each of the Certificates: ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto (print or typewrite name, address, and zip code of transferee): number: _ certificate irrevocably (Social Security or other identifying the within and all rights thereunder, and hereby constitutes and appoints -11- attorney to transfer said certificate on the books kept for registration thereof, with full power of substitution in the premises. ® DATED: Signature Guaranteed: NOTICE: This 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 on this assignment must correspond with the name of the regis- tered owner as it appears on the face of the within certi- ficate in every particular. -12- Section 6. The approving opinion of Vinson & Elkins, Houston, Texas, and CUSIP Numbers may be printed on the Certificates, but errors or omissions in the printing of such opinion or such numbers shall have no effect on the validity of the Certificates. Section 7. The proceeds from all taxes levied, assessed and collected for and on account of the Certificates autho- rized by this Ordinance shall be deposited, as collected, in a special fund to be designated "City of Baytown, Texas, Certificates of Obligation, Series 1987, Interest and Sinking Fund ". While said Certificates or any part of the principal thereof or interest thereon remain outstanding and unpaid, there is hereby levied and there shall be annually levied, assessed and collected, within the limits prescribed by law, in due time, form and manner, and at the same time other City taxes are levied, assessed and collected, in each year, beginning with the current year, a continuing direct annual ad valorem tax upon all taxable property in said City sufficient to pay the current interest on said Certificates as the same becomes due, and to provide and maintain a sinking fund adequate to pay the principal of the Certifi- cates as such principal matures but never less than two percent (2%) of the original principal amount of the Certif- icates each year,, full allowance being made for delinquencies and costs of collection, and said taxes when collected shall be applied to the payment of the interest on and principal ® of said Certificates and to no other purpose. In addition, interest accrued from the date of the Certificates until their delivery, and premium if any, is to be deposited in such fund. Money in the Interest and Sinking Fund may, at -12- -13- the option of the City, be invested as permitted by state _law.; provided that all such deposits and investments shall ® be made in such a manner that money required to be expended from the Interest and Sinking Fund will be available at the proper time or times. All interest and income derived from such deposits and investments of the Interest and Sinking Fund shall be credited to the Interest and Sinking Fund. So long as any Certificates remain outstanding, all uninvested moneys on deposit in, or credited to, the Interest and Sinking Fund shall be secured by the pledge of security, as provided by law for cities in the State of Texas. Section S. There is hereby created and established a special fund of the City, to be known as the "City of Baytown, Texas, Certificates of Obligation, Series 1987, Construction Fund ", which shall be maintained as a separate account on the books of the City. The proceeds of the Certificates, after depositing accrued interest and any premium to the Interest and Sinking Fund, as provided in Section 7 shall be deposited in the Construction Fund. Money on deposit in the Construction Fund shall be used only for the purposes set forth in Section 2 of this Ordinance, except that interest and income derived from deposit and investment of moneys in the Construction Fund may be uti- lized as provided below in this Section 8. Money on deposit in the Construction Fund may, at the option of the City, be invested as permitted by Texas law; provided that all such deposits and investments shall be made in such manner that the money required to be expended from the Construction Fund will be available at the proper time or times_ So long as any Certificates remain outstanding, all uninvested monies on deposit in, or credited to, the Construction Fund shall be secured by the pledge of security as provided by law for cities in the state of Texas. All interest and income derived from such deposits and investments shall remain in the Construction Fund, except that, in the discretion of the City, such interest and income may be transferred to the Interest and Sinking Fund. Section 9. After the Certificates to be initially issued shall have been executed, the Mayor of the City and other members of the City Council of the City shall have authority to deliver the Certificates to be initially issued and all pertinent records and proceedings to the Attorney General of Texas, for examination and approval by the ® Attorney General. After the Certificates to be initially issued shall have been approved by the Attorney General, they shall be delivered to the Comptroller of Public Ac- counts of the State of Texas for registration. Upon -13- registration of the Certificates to be initially issued, the Comptroller of Public Accounts (or a deputy lawfully-desig- nated in writing to act for the Comptroller) shall manually sign the Comptroller's Registration Certificate prescribed herein to be printed and endorsed on the Certificates to be initially issued, and the seal of said Comptroller shall be impressed, or placed in facsimile, thereon. Section 10. The sale of the Certificates to Lovett, Mitchell, Webb &. Garrison, Inc. (herein referred to as the "Purchaser ") at the price of par plus accrued interest on the Certificates to date of delivery, plus a cash premium of $0.00, in accordance with the bid of said Purchaser, is hereby authorized, approved, ratified and confirmed, subject to.the. unqualified approving opinion as to the legality of the Certificates of the Attorney General of the State of Texas, and of Vinson & Elkins, Houston, Texas, bond counsel. Certificates Nos. R -1 through R -4 shall be registered in the name of the Purchaser. It is hereby found and determined that the sale of the Certificates, as herein provided, is on the best terms and at the best price reasonable attainable by the City pursuant to competitive bids received by the City. Section 11. So long as any of the Certificates are outstanding the City covenants and agrees that it will keep proper books of record and account in which full, true and correct entries will be made of all dealings, activities and transactions relating to the Certificates and the funds created pursuant to this Ordinance, and all books, documents and vouchers relating thereto shall at all reasonable times be made available for inspection upon request of any holder of any of the Certificates. Section 12. The City recognizes that the purchasers and holders of the Certificates will have accepted them on, and paid there for a price that reflects, the understanding that interest on the Certificates is excludable.from gross income for federal income tax purposes. Hence, the City covenants that it shall make such use of the proceeds of the Certificates, regulate investments of proceeds thereof and take such other and further actions as may be required by Sections 103 and 141 -150 of the Internal Revenue Code of 1986 (the "Code ") and all applicable temporary, proposed and final regulations and procedures promulgated thereunder or ® promulgated under the Internal Revenue Code of 1954, to the extent applicable to the Code ( "Regulations "), necessary to assure that interest on the Certificates is excludable from gross income for federal income tax purposes. Without v -14- limiting the generality of the foregoing covenant, the City hereby covenants as follows: ® a. The City will not permit more than 10 percent of the net proceeds of the Certificates to be used in the trade or business of any person (other than use as a member of the general public) other than a govern- mental unit ( "private -use proceeds ") . For purposes of this Section, the term "net proceeds" means the pro- ceeds derived from the sale of the Certificates, plus interest earnings thereon, less any amounts deposited in a reasonably required reserve or replacement fund; the term "person" includes any individual, corporation, partnership, unincorporated association or any other entity capable of carrying on a trade or business; and the term "trade or business" means, with respect to any natural person, any activity regularly carried on for profit and, with respect to persons other than natural persons, means any activity other than an activity carried on by a governmental unit; b. The City will not permit more than 5,percent of the net proceeds of the Certificates to be used in the trade or business of any person other than a ' governmental unit if such use is unrelated to the governmental purpose of the Certificates. Further, the amount of private -use proceeds of the Certificates in excess of 5 percent of the net proceeds of the Certifi- cates ( "excess private -use proceeds ") will not exceed the proceeds of the Certificates expended for the governmental purpose of the Certificates to which such excess private -use proceeds relate; C. The City will not use or permit to be used, directly or indirectly, an amount exceeding the lessor of (i) $5,000,000 or (ii) 5 percent of the net proceeds of the Certificates to finance loans to persons other than governmental units; d. Based upon all facts and estimates now known or reasonably expected to be in existence on the date the Certificates are delivered, the City reasonably expects that the proceeds of the Certificates will not be used in a manner that would cause the Certificates or any portion thereof to be an "arbitrage Bond" within ® the meaning of Section 148 of the Internal Revenue Code of 1986; n -15- g. The City will take all necessary steps to comply with the requirement that "excess arbitrage profits" earned on the investment of the gross proceeds of the Certificates, if any, be rebated to the federal government. Specifically, the City will (i) maintain records regarding the investment of the gross proceeds of the Certificates as may be required to calculate such "excess arbitrage profits" separately from records of amounts on deposit in the funds and accounts of the City which are allocable to other bond issues of the City or moneys which do not represent gross proceeds of any bonds of the Issuer, (ii) calculate, not less often than annually, the amount of "excess arbitrage prof - its," if any, earned from the investment of the gross proceeds of the Certificates and (iii) pay, not less ® often than every fifth anniversary date of the delivery of the Certificates, all amounts required to be rebated to the federal government. Further, the City will not indirectly pay any amount otherwise payable to the -16- e. The City will monitor the yield on the investment of the proceeds of the Certificates and ® moneys pledged to the repayment of the Certificates, other than amounts not subject to yield restriction due to deposit in a reasonably required reserve or replace- ment fund or a bona fide debt service fund, and will restrict the yield on such investments to the extent required by the Code or the Regulations. Without limiting -the generality of the foregoing, the City will take appropriate steps to restrict the yield on (i) all original proceeds of the Certificates on hand on a date that is three years from the date of delivery of the Certificates, and (ii) all investment proceeds on hand on a date that is three years from the date of delivery of the Certificates or one year from the date such investment proceeds are received, whichever is later, to a yield which is not materially higher than the yield on the Certificates (in both cases calculated in accordance with the Code and Regulations); f. The City will not cause the Certificates to be treated as "federally guaranteed" obligations within the meaning of Section 149(b) of the Code (as may be modified in any applicable rules, rulings, policies, procedures, regulations or other official statements promulgated or proposed by the Department of the Treasury or the Internal Revenue Service with respect to "federally guaranteed" obligations described in Section 149 (b ) of the Code) ; g. The City will take all necessary steps to comply with the requirement that "excess arbitrage profits" earned on the investment of the gross proceeds of the Certificates, if any, be rebated to the federal government. Specifically, the City will (i) maintain records regarding the investment of the gross proceeds of the Certificates as may be required to calculate such "excess arbitrage profits" separately from records of amounts on deposit in the funds and accounts of the City which are allocable to other bond issues of the City or moneys which do not represent gross proceeds of any bonds of the Issuer, (ii) calculate, not less often than annually, the amount of "excess arbitrage prof - its," if any, earned from the investment of the gross proceeds of the Certificates and (iii) pay, not less ® often than every fifth anniversary date of the delivery of the Certificates, all amounts required to be rebated to the federal government. Further, the City will not indirectly pay any amount otherwise payable to the -16- federal government pursuant to the foregoing require- ments to any person other than the federal government by entering into any investment arrangement with ® respect to the gross proceeds of the Certificates that might result in a "prohibited payment" within the meaning of Temp. Treas. Reg. §1.103 -15AT; and h. The City, will timely file a statement with the federal government setting forth the information required pursuant to Section 149 (e ) of the Code. All officers,. employees and agents of the City are author- ized and directed to provide certifications of facts and estimates that are material to the reasonable expectations of the Issuer as of the date the Certificates are .delivered. In complying with the foregoing covenants, the City may rely from time to time upon an opinion issued by nationally recognized bond counsel to the effect that any action by the City or reliance upon any interpretation of the Code or Regulations contained in such opinion will not cause inter- est on the Certificates to be includable in gross income for federal income tax purposes under existing law. ® Section 13. The City hereby designates the Certifi- cates as "qualified tax - exempt obligations" for purposes of Section 265(b) of the Code and covenants that it shall take all actions necessary to satisfy with respect to the Certif- icates the requirements of Section 265(b)(3) of the Code. In particular, the City represents (a) that the aggregate amount of tax- exempt obligations issued by the City during calendar year 1987, including the Certificates, which have been designated as "qualified tax - exempt obligations" under Section 265(b)(3) of the Code does not exceed $10,000,000 and (b) that the reasonably anticipated amount of tax - exempt obligations which will be issued by the City during the calendar year 1987, including the Certificates, will not exceed $10,000,000. For purposes of this section 13, the term "tax- exempt obligation" does not include "private activity bonds" within the meaning of Section 141 of the Code, other than "qualified 501(c)(3) bonds" within the meaning of Section 145 of the Code. In addition, for purposes of this section 13, the City includes all govern - mental units of which the City is a "subordinate entity" and governmental units which are "subordinate entities" of the City, within the meaning of Section 265(b) (3)(E) of the ® Code. Section 14. There is hereby appropriated out of the proceeds of the sale of the Bonds authorized by this -17- Ordinance the sum of $400,000 for the purchase of land for .authorized needs and purposes and the cost of professional ® services incurred in connection therewith. It is officially found and determined that the useful life of such land is perpetual. Section 15. The facts, recitals, and statements set out in the preamble of this Ordinance are hereby found and determined to be true and correct. Without limitation to such statement, no petition of any kind or character signed by 5% of the qualified electors of the City has been filed with the Mayor, City Secretary, or any other official of the City protesting the issuance of the Certificates or any portion thereof. The City further approves the Official Statement prepared in connection with the sale of the Certificates. -18- Section 16. It is hereby officially found and deter- mined that an emergency and urgent public necessity exist relating to the adoption of this ordinance, and because the proceeds from the sale of the Certificates are required as soon as possible for necessary and urgently needed improve- ments; that such emergency and necessity require the adoption of this Ordinance and the holding of the meeting, or meetings, at which this Ordinance is adopted at the time or times and place held; the meeting, or meetings, at which this Ordinance was adopted was or were open to the public, and public . notice of the time, place and purpose of said meeting, or meetings, was given, all as required by Vernon's Ann. Tex. Civ. St. Article 6252 -17, as amended; and that such notice or notices as given are hereby authorized, approved, adopted and ratified. Section 17. This Ordinance shall be in force and effect from and after its final passage, and it is so ordered. Section 18. (a) The Registrar, by undertaking the performance of the duties of the Registrar and in considera- tion of the payment of fees and /or deposits of money pursuant to this Ordinance and a Paying Agent /Registrar Agreement, accepts and agrees to abide by the terms of. this Ordinance and such Agreement. The City hereby approves the Paying Agent /Registrar Agreement. ® (b) The City reserves the right to replace the Regis- trar or its successor at any time. If the Registrar is replaced by the City, the new Registrar shall accept the -18- v previous Registrar's records and act in the same capacity as the previous Registrar. Any successor Registrar shall be either a national or state banking institution and a corpo- ration organized and doing business under the laws of the United States of America or any State authorized under such laws to exercise trust powers and subject to supervision or examination by Federal or State authority. Section 19. The City approves the form and content of the Official Statement prepared for initial offering and sale of the Certificates and the use of such Official Statement in the reoffering of the Certificates by the Purchaser is hereby approved and authorized. The proper officials of the City are hereby authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed therein, dated as of the date of payment for and delivery of the Certificates. Section 20. No recourse shall be had for payment of the principal of or interest on any Certificates or for any claim based thereon, or on this Ordinance, against any official or employee of the City or any person executing any Certificates. PASSED AND APPROVED this 9th day of July, 1987. ATTEST: F C City Clerk CITY OF BAYTOWN, TEXAS (SEAL) -19-