Ordinance No. 4,85671112 -2
ORDINANCE NO. 4856
AN ORDINANCE OF THE GOVERNING BODY APPROVING
THE EXECUTION AND DELIVERY OF A PERSONAL
PROPERTY FINANCE CONTRACT; LEVYING A
CONTINUING DIRECT ANNUAL AD VALOREM TAX, WITHIN
APPLICABLE LEGAL LIMITATIONS, FOR THE PAYMENT OF
AMOUNTS DUE THEREUNDER; PLEDGING SUCH TAX TO
THE PAYMENT OF SUCH AMOUNTS; APPROVING THE
EXECUTION AND DELIVERY OF AN ESCROW AGREEMENT;
AND CONTAINING OTHER INCIDENTAL AND RELATED
MATTERS
WHEREAS, this governing body (the "Governing Body ") has determined and
found that it is necessary to provide for the acquisition and purchase of certain
personal property (the "Property ") to be used by this City (the "City ") for its
governmental purposes; and
® WHEREAS, in order to facilitate the acquisition of the Property through
cooperative action with other political subdivisions at an advantageous cost, the
Governing Body has determined that the City should become a "Participating
Political Subdivision" to, and as defined in, the Interlocal Public Property
Acquisition Agreement (the "Interlocal Agreement') attached hereto as Exhibit A,
by authorizing the execution of the "Additional Party Agreement." attached thereto;
and
WHEREAS, in order to provide for the financing of the acquisition of the
Property, the Governing Body has determined to authorize the execution and
delivery of the Personal Property Finance Contract (the "Finance Contract') in the
form attached hereto as Exhibit B and to take all other action necessary to
implement such financing and to provide for the payment of the City's obligations
thereunder; and
WHEREAS, in order to provide for payment of the costs of the acquisition of
the Property, the Governing Body has determined to authorize the execution and
delivery of the Escrow Agreement (the "Escrow Agreement ") in the form attached
as Exhibit D to the Finance Contract;
NOW, THEREFORE,. BE IT ORDAINED BY THE CITY COUNCIL
OF THE CITY OF BAYTOWN, TEXAS, AS FOLLOWS:
Section 1. Findings The Governing Body hereby finds and determines that:
(a) All of the Property, a complete listing of which appears on Exhibit A
to the Finance Contract, is personal property and will remain personal property,
within the meaning of the Public Property Finance Act, Chapter 271, Subchapter A,
Texas Local Government Code, as amended;
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(b) The acquisition of the Property is necessary and in the public interest
of the City in the furtherance of its governmental purposes;
(c) The cooperative action described in the Interlocal Agreement will
provide a means of financing the Property with the economy and efficiency
contemplated by the Interlocal Cooperation Act, Article 4413(32c), Vernon's Texas
® Civil Statutes, as amended; and
(d) All taxes levied and pledged by the City to provide funds for the
payment of amounts due under the Finance Contract shall constitute taxes for the
payment of principal of and interest on debt of the City, as that term is defined by
the Texas Property Tax Code, as amended.
Section 2. Approval of Interlocal Agreement, Personal Property Finance
Contract and Escrow Agreement.
(a) The Governing Body hereby approves the Interlocal Agreement in the
form and substance attached hereto as Exhibit A, and authorizes and directs the
Mayor or Mayor Pro -Tem (if any), and any one of the appointed City officials named
in Exhibit C hereto to execute and deliver the "Additional Party Agreement"
attached to the Interlocal Agreement as Exhibit A, provided that the City shall not
and does not incur any cost and shall not be obligated to participate in any program
® developed thereunder by reason of such action.
(b) The Governing Body hereby approves the terms of the Finance
Contract in the form and substance and to the effect presented to the Governing
Body and attached hereto as Exhibit B.
(c) The Governing Body hereby approves the terms of the Escrow
Agreement in the form and substance and to the effect presented to the Governing
Body and attached as Exhibit D to the Finance Contract.
(d) The Mayor and all other officers of the City, or any of them, and any
appointed City official named in Attachment A hereto are hereby authorized and
directed to execute and deliver the Finance Contract and the Escrow Agreement
and any and all certificates and other instruments as may be necessary for the
delivery thereof, the approval of the Finance Contract and the Escrow Agreement
by the Attorney General of Texas, if required or permitted by law, and the
registration of the Finance Contract by the Comptroller of Public Accounts of
Texas.
(e) The interest rate on the unpaid "Principal Installments," due to be
paid by the City under the Finance Contract shall be set and established in the
manner and at the time set forth in the Finance Contract.
Section 3. Levy of Taxes. (a) For the purposes of this Ordinance,
capitalized terms used herein that are capitalized terms in the Finance Contract
shall have the meanings assigned to them therein. Additionally, the term "Debt
® Service Payments" means the aggregate of the Contract Payments and the
Administration Fee.
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(b) To provide for the payment of the Debt Service Payments, there is
hereby levied for the current year and for each succeeding year hereafter while any
amounts are required to be paid under the Finance Contract, and there shall be
annually assessed and collected in due time, form and manner, a direct and
continuing ad valorem tax on all taxable property within the corporate limits of the
City at a rate from year to year, within the limitations prescribed by law, on each
® one hundred dollars' valuation of taxable property as will be sufficient to provide
funds to pay the Debt Service Payments each year, including (i) the total interest
portion of such Debt Service Payments, as the same comes due, and (ii) the total
amount necessary to provide, create and maintain sinking fund to pay the total.
principal portion of the Debt Service Payments, as the same comes due, or to
provide, create and maintain the sinking fund of 2% per annum of such principal
portion of the Debt Service Payments (whichever amount shall be greater), full
allowance being made for delinquencies and costs of collection.
(c) The City covenants that, in accordance with the provisions of the
Texas Property Tax Code, any amounts budgeted out of the Authorized Tax to pay
the Debt Service Payments, for the purposes of the Texas Property Tax Code, will
be set aside and treated as "debt" in determining the City's annual total tax rate,
separate and apart from any tax that it may levy for any other purpose.
(d) The City shall keep separate records and accounts relating to the
® receipt and disbursement of the portion of the Authorized Tax that is levied,
assessed and collected for and on account of the Debt Service Payments. The taxes
collected for the payment of the Debt Service Payments shall be deposited and paid
in the amounts, at the times, into the accounts and at the places required by the
Finance Contract.
Section 4. Pledge and Security. The City hereby covenants and agrees that
such amount of the Authorized Tax as is necessary and sufficient to pay the Debt
Service Payments are hereby irrevocably pledged to the payment in full of the Debt
Service Payments.
Section 5. Additional Actions. The Mayor and each of the other officers and
the appointed City officials named in Attachment A hereto are hereby designated as
Authorized Officers under the Finance Contract, and they, or any of them, are
authorized to take any and all action necessary to carry out and consummate the
transactions described in or contemplated by the instruments approved hereby or
otherwise to give effect to the actions authorized hereby and the intent hereof.
Included in such authority is the authority to certify to the accuracy and
completeness of any materials and information regarding this City that may be used
or useful in the marketing of the Bonds contemplated by the Finance Contract.
Section 6. Effective Date. This Ordinance shall be in force and effect from
and after its adoption on the date shown below.
Section 7. Public Meeting. It is hereby found and determined that advance
notice of the time, place and purpose of the meeting was given to each member of
® the Governing Body; and that such meeting and deliberation of the aforesaid public
business were open to the public and written notice of such meeting, including the
subject of this Ordinance, was posted and given in advance in compliance with the
provisions of Article 6252 -17, Section 3A, Vernon's Texas Civil Statutes, as
amended.
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FINALLY ADOPTED AND APPROVED this ap!&M 2►, /a, /� 9f9-
CITY OF BAYTOWN
EMMETT 0. HUT 0, Mayor
ATTEST:
EILEEN P. HALL, City Clerk
[CITY SEAL]
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ATTACHMENT A
CITY OFFICIALS DESIGNATED
AS AUTHORIZED OFFICERS
r
Name
Fritz Lanham
Bobby Rountree
Ken Mitchell
Eileen P. Hall
f7
a
® 014814/5
Position
City Manager
Assistant
City Manager
Director of Finance
Citv Clerk
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EXHIBIT "A"
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STATE OF TEXAS § INTERLOCAL PUBLIC PROPERTY
0 § ACQUISITION AGREEMENT
COUNTY OF BELL §
® This INTERLOCAL PUBLIC PROPERTY ACQUISITION AGREEMENT
(together with any amendments and supplements hereto, the or this "Agreement "),
dated as of May 1, 1987, executed by and among the CITY OF BELTON, TEXAS (the
"City "), the BELTON INDEPENDENT SCHOOL DISTRICT (the "District "), BELL
COUNTY (the "County ") and any other political subdivision of the State of Texas
that becomes a party hereto in accordance with the terms hereof:
WITNESSETH
WHEREAS, the City, the District and the County are authorized by the
Interlocal Cooperation Act (the "Interlocal Act "), Article 4413 (32c), Vernon's Texas
Civil Statutes, as amended, to enter into cooperative agreements among themselves,
and with and among other political subdivisions, for the purpose of fulfilling and
implementing their respective public and governmental purposes, needs, objectives
and programs; and
® WHEREAS, the City, the District and the County have determined that
economy and efficiency can be achieved through the establishment and
administration of a cooperative property purchasing and acquisition program (the
"Program ") to finance and coordinate the purchase and acquisition of equipment and
other property that each is authorized by law to finance, purchase or otherwise
acquire (collectively the "Program Property "); and
WHEREAS, the City, the District and the County have additionally
determined that other political subdivisions that are qualified to do so under the
Interlocal Act should be permitted to join with them as parties to this Agreement in
order to enhance and fulfill the purposes of the Interlocal Act and their own
respective public purposes by participating in the Program (the City, the District,
the County and such other additional parties hereto being herein collectively
referred to as the "Participating Political Subdivisions "); and
WHEREAS, the City, the District and the County agree, and each additional
political subdivision that becomes a Participating Political Subdivision by its
acceptance hereof assents, to the creation and designation of a non - profit
corporation under the Texas Non - Profit Corporation Act, Article 1396 -1.01, et seq.,
Vernon's Texas Civil Statutes, as amended, to function as the administrative agency
and instrumentality of the City, and as the administrative agency of the
Participating Political Subdivisions under the Interlocal Act in ' implementing the
Program and performing the functions specified herein;
NOW, THEREFORE, the City, the District and the County, and such
® additional political subdivisions as assent hereto, have agreed and hereby do agree,
as follows, to -wit:
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Section 1. Creation and Purposes of the Program. (a) The City, the District
and the County hereby agree to cause the Program to be established for their
benefit and for the benefit of the other Participating Political Subdivisions.
(b) The Program shall be implemented and administered in accordance
with and subject to the terms of this Agreement.
(c) The purposes of the Program are (1) to obtain the benefits,
efficiencies and cost savings that can accrue to the Participating Political
Subdivisions by concurrent financing, and in appropriate cases, joint purchasing and
acquisition, of qualified property under the Public Property Finance Act, Article
2368.2, Vernon's Texas Civil Statutes, as amended, and other applicable law, and (2)
to provide a centralized method of collective compliance by the Participating
Political Subdivisions of the accounting and payment requirements of the arbitrage
rebate provisions of the Tax Reform Act of 1986 when applicable.
Section 2. Creation, Powers and Duties of Administrative Agency. (a) It is
agreed that the City shall authorize the creation of a non - profit corporation and
instrumentality (the "Authority ") conforming to the requirements of Private Letter
Ruling No. 0103.02 -02, issued by the Internal Revenue Service of the United States,
addressed to the City, and dated September 12, 1986, the Authority to be named
"Public Property Finance Corporation of Texas."
® (b) The City, the District, the County and the other Participating
Political Subdivisions designate the Authority as their administrative agency under
the Interlocal Act to perform the following services and functions, to -wit:
(i) to prepare and develop, in coordination with the
administrator or administrators below defined, plans for the implementation
of the Program, including, if considered appropriate, efficient and in the
interests of the various Participating Political Subdivisions, to establish as a
part of the Program separate property acquisition and funding plans for the
various types of political subdivisions that become Participating Political
Subdivisions hereunder;
(ii) to designate and retain the services of one or more servicing
agents for each separate property acquisition and funding plan that forms a
part of the Program (the "Program Administrator ") and to enter into an
appropriate Program Administration Agreement with the Program
Administrator of each plan for the purpose of developing, implementing, and
administering the details of such plan and servicing and handling the details
thereof for and on behalf of the Participating Political Subdivisions and the
Authority;
(iii) in coordination with the Program Administrator, to develop
and establish specific rules, regulations and guidelines for access to and
participation in financings under the applicable plan by the Participating
Political Subdivisions, including the development of specific standards of
® creditworthiness and conditions to participation in plan financings, the same
to be consistent with the general program policies and guidelines presented to
the Internal Revenue Service in support of its Private Letter Ruling cited
above, and further subject to the requirements imposed by the providers, if
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any, of credit support or enhancement of any notes, bonds or other
obligations issued by the Authority to provide funding therefor;
(iv) in coordination with and when and as requested by the
Program Administrator, to develop periodic financing plans and to issue
® bonds, notes or other obligations for the sole purpose of providing funds under
each plan for use by such of the Participating Political Subdivisions that
have, in advance, specifically requested funding for qualified purposes under
the Public Property Finance Act or other applicable law and have formally
processed through appropriate and applicable legal procedures commitments
to utilize such funds when available;
(v) in coordination with the Program Administrator, to provide
accounting procedures and methods by which the accounting and payment
requirements of the arbitrage rebate and payment requirements of the Tax
Reform Act of 1986 can be complied with on a centralized accounting basis
insofar as they may be applicable to financings provided under the Program
and permitted by applicable law;
(vi) in coordination with the Program Administrator, to develop
procedures, rules and guidelines for the implementation of collective
® purchasing programs on a volume basis for and on behalf of such of the
Participating Political Subdivisions that desire to purchase or acquire
qualified property through the Program, subject to all laws applicable to the
Participating Political Subdivisions themselves requiring competitive bidding
or otherwise specifying similar rules and requirements pertaining to the
purchasing of public property; and
(vii) to perform any functions and duties imposed by it under the
terms of any contract, indenture, or other agreement to which it is a party.
Section 3. Obligations of Participating Political Subdivisions. (a) No
Participating Political Subdivision shall ever be liable to pay or be responsible for
the payment of any sum of money to the Authority or to any other Participating
Political Subdivision or to any other person or party solely by reason of its execution
of this Agreement.
(b) Any obligation of a Participating Political Subdivision to pay any
money under the Program can and shall arise only under the terms and provisions of
a separate contract, agreement, note, bond or similar agreement or instrument that
has been formally and specifically authorized pursuant to authority granted in the
Public Property Finance Act or other applicable law, and adopted and approved by
the governing body of the Participating Political Subdivision and approved- by the
Attorney General of Texas in accordance with and when required by law.
(c) No obligation of a Participating Political Subdivision shall ever be or
become the obligation of any other Participating Political Subdivision, whether or
not any other Participating Political Subdivision may be in default under any
agreement that it may execute.
(d) The assent of a political subdivision to the terms hereof and its
agreement to become a Participating Political Subdivision hereunder shall not in any
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manner obligate such political subdivision to participate in any financing under the
Program or to incur any monetary obligation of any manner or kind, and each
specific financing activity of the Authority shall be limited solely to the
Participating Political Subdivisions that execute separate agreements or obligations
described in subsection (b) of this Section 3.
® Section 4. Additional Parties, Withdrawals. (a) Any "local government," as
defined in the Interlocal Act, may become a party to this Agreement by the
execution of an Additional Party Agreement substantially in the form and substance
attached hereto as Exhibit A. However, participation in a specific financing or
other property purchasing activity under the Program by any Participating Political
Subdivision shall be in accordance with and is subject to meeting the requirements
of the Program as aforesaid.
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(b) Any Participating Political Subdivision may withdraw from this
Agreement at any time by giving 30 day's written notice to the City, the District,
the County, the Authority, and the Program Administrator for any financing plan in
which it is a participant. It is provided, however, that such withdrawal shall not
reduce, diminish or impair any then outstanding obligations of the withdrawing
political subdivision to make any payments agreed to be made pursuant to any
separate, specific agreements theretofore executed by the withdrawing party in
relation to any financing in which the withdrawing party had participated. Such
obligations shall continue according to their terms notwithstanding such withdrawal.
Section 5. Public Meetings and Records. All meetings of the Board of
Directors of the Authority shall be open to the public and notice thereof shall be
given in accordance with the requirements of Article 6252 -17, Vernon's Texas Civil
Statutes, as amended, and all records of the Authority shall be open to public
inspection in accordance with Article 6252 -17a, Vernon's Texas Civil Statutes, as
amended.
Section 6. Term. "The term of this Agreement shall be one year from the
date hereof and shall automatically be renewed for one year on each anniversary of
the commencement date, except with respect to any Participating Political
Subdivisions that may have withdrawn herefrom in accordance with Section 4 hereof.
Section 7. Other Governmental Programs. The execution of this Agreement
by any Participating Political Subdivision does not in any manner limit, impair,
diminish or affect its right or power to participate in any other governmental
programs by interlocal agreement or otherwise.
Section 8. Acceptance By Authority. After the creation of the Authority in
accordance herewith, this Agreement shall be submitted to the Authority -for its
approval, acceptance and agreement as hereinbelow provided, after the execution of
which, this Agreement shall be. in full force and effect.
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EXECUTED AND DELIVERED initially by and between the City, the District
and the County on and as of the day and year first above written.
ATTEST:
t /
ATTEST:
Secretary,, oard of Truste
ATTEST:
County Clerk, and ex- officio Clerk of
the Commissioners Court
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CITY OF BELTON, TEXAS
e
By
Mayor
BELTON INDEPENDENT SCHOOL
DISTRICT
n.
.y L
�: - Q, !.f.1UL!
: o. fi' of Trustees
I
BELL COUNTY
By
County Judge
M'9
Acceptance By Authority
The Public Property Finance Corporation of Texas hereby accepts the terms
and provisions of the above and foregoing Agreement and agrees to be bound thereby
to the extent required therein, all on and as of this M4 day of May, lIP7
® PUBLIC PROPERTY FINANCE
CORPORATION OF TEXAS
[SEAL]
ATTFST:
C-
. Secretary
9 O111H
By /�-"/ dl"4
/ - 0 President
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Exhibit A
Additional Party Agreement
The below named political subdivision of the State of Texas, acting by and
IS through the undersigned duly authorized officer(s), by this instrument agrees to
become a Participating Political Subdivision under, but strictly subject to, the terms
and provisions of that certain Interlocai Public Property Acquisition Agreement,
dated as of May 1, 1987, and initially executed by and among the City of Belton, the
Belton Independent School District and Bell County.
Executed this day of , 1987.
(District) (City) (County) (etc.)
By
Duly Authorized Officer
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EXHIBIT "B"
11
PERSONAL PROPERTY FINANCE CONTRACT
by and between
the
INCORPORATED CITY
named on the signature page
and
PUBLIC PROPERTY FINANCE CORPORATION OF TEXAS
Dated as of the date herein specified
NOTICE: All right, title, and interest of the Public Property Finance Corporation of Texas in and to this
Personal Property Finance Contract and the Contract Payments (herein defined), but excluding the
Administration Fee (herein defined), has been or will be collaterally assigned to secure payment of the
bonds described herein.
PERSONAL PROPERTY FINANCE CONTRACT
THIS PERSONAL PROPERTY FINANCE CONTRACT (the or this "Finance Contract "), dated as of
the date specified below, by and between PUBLIC PROPERTY FINANCE CORPORATION OF TEXAS
(the "Corporation'), a non - profit corporation incorporated under the laws of the State of Texas, and the
INCORPORATED CITY (the "City') identified on the signature page of this Finance Contract;
WITNESSETH:
® WHEREAS, the Corporation is the administrative agency for the City and various other political
subdivisions of the State of Texas (the "Participating Political Subdivisions') under an Interlocal Property
Acquisition Contract (the "Interlocal Contract ") executed pursuant to the Interlocal Cooperation Act,
Article 4413(32c), Vernon's Texas Civil Statutes, as amended; and
WHEREAS, the Corporation was organized pursuant to the Interlocal Contract for the purpose,
among others, of providing financing for the City and other Participating Political Subdivisions in a
manner that will permit them to acquire qualified property under the authority of the Public Property
Finance Act, Chapter 271, Subchapter A, Texas Local Government Code, as amended, and to pay for the
same in installments as permitted by law; and
WHEREAS, the governing body of the City has found and deems it necessary, useful and
appropriate for its public purposes to acquire the personal property listed in Exhibit A and has agreed to
pay for the same and for certain related costs, in installments, in accordance with the terms hereof; and
WHEREAS, the Corporation intends to obtain the funds required to purchase such property for the
City by issuing its revenue bonds or notes that, in either case, will be payable solely from and secured by
a pledge of a portion of the payments to be made by the City under this Finance Contract; and
WHEREAS, all things have been done which are necessary to constitute this Finance Contract a
® valid contract of the parties hereto in accordance with its terms;
NOW, THEREFORE, for and in consideration of the payments due or to become due hereunder and
the mutual covenants and agreements contained herein, and subject to the conditions herein set forth,
the parties hereto covenant, agree and bind themselves as follows:
ARTICLE I
DEFINITIONS
. Section 1.1. Definitions. Unless the context otherwise requires, the terms defined in this Section
shall, for all purposes of this Finance Contract, have the meanings herein specified.
"Acquisition Fund" means the special fund of the City bearing that name to be established with
the Escrow Bank pursuant to Section 2.4(b).
"Acquisition Certificate" means a certificate substantially in the form of Exhibit C.
"Act" means the Public Property Finance Act, Chapter 271, Subsection A, Texas Local
Government Code, as amended.
"Administration Fee" means the annual fee to be paid by the City to the Administrator pursuant
to Section 3.1(f) (excluding any paying agent/registrar fees paid to the Paying Agent/Registrar).
"Administrator" means until the Delivery Date the Houston - Galveston Area Council, and from and
after the Delivery Date means the Paying Agent/Registrar.
"Authorized Investments" means those investment securities in which the City may lawfully invest
its funds.
"Authorized Officer ", when used with respect to the Corporation, means the president or any vice
president of the Corporation or the Administrator acting on behalf of the Corporation, or such other
person or persons designated by the board of directors of the Corporation as an Authorized Officer for
® purposes of this Finance Contract, and, when used with respect to the City, means the Mayor, Mayor
Pro -Tem, the City Manager and the City Secretary of the City and such other person or persons
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designated by the governing body of the City as an Authorized Officer for purposes of this Finance
Contract.
® "Authorized Tax" means the ad valorem tax levied in the Tax Ordinance and permitted to be
levied by and within the City for its public purposes upon all taxable property located therein within the
limits provided by law or its City charter, if any.
"Business Day" means any day other than a Sunday, Saturday, legal holiday or the equivalent on
which banking institutions generally are authorized or required to close in the city in which the Paying
® Agent/Registrar has its principal corporate trust office or in New York, New York.
"Certificate of the Corporation" and "Certificate of the City" means an instrument of the
Corporation or the City, respectively, signed by an Authorized Officer of the Corporation or the City, as
the case may be.
" Cityy" means the incorporated municipality and city of the State of Texas identified as such on
the signature page hereof and its successors by operation of law.
"Closing Bank" means a national bank designated by the Administrator on behalf of the
Corporation as the Bank to perform the functions of the Closing Bank specified in Article 11.
"Closing Fee" means the fee to be paid to the Administrator for itself and the Corporation to
cover their costs in connection with this Finance Contract and the issuance of the Notes as permitted b-
Section 2.5(a).
"Code" means the Internal Revenue Code of 1986, as amended to the Delivery Date.
"Contract Payments" means all amounts, except the Administration Fee, due and owing by the
City under this Finance Contract as provided in Section 3.1(f).
"Corporation" means the Public Property Finance Corporation of Texas, a Texas non - profit
® corporation.
"Delivery Costs" means the total of (a) the Corporation's costs of issuing the Notes, allocated to
the City on a pro rata basis or directly attributable to the City, including insurance premiums, if any,
filing and recording costs, printing costs, reproduction and binding costs, fees of the Paying Agent/
Registrar and the Closing Bank, financing discounts, legal fees and charges, financial and other
professional consultant fees, costs of rating agencies or credit ratings, fees for authentication,
registration, transportation and safekeeping of Notes, and other charges and fees in connection with the
foregoing, plus (b) any costs or expenses incurred directly by the City in connection with the execution of
this Finance Contract that are included in advance in the computation of "Maximum Delivery Costs" in
Exhibit B, that the City requests to be paid from the Delivery Costs Fund and that, according to
generally accepted accounting principles, can be charged as a Property Cost, and plus (c) the Closing Fee.
"Delivery Costs Fund" means a special fund to be established and held by the Closing Bank for the
purpose of paying the Delivery Costs.
"Delivery Date" means the date after the Sale Date on which the Notes are authenticated and
initially delivered to the purchasers thereof against receipt of the purchase price therefor.
"Escrow Agreement" means an agreement substantially in the form attached hereto as Exhibit D
to be executed between the City and the Escrow Bank.
"Escrow Bank" means the bank selected by the City to hold the Acquisition Fund under the Escrow
Agreement, which bank may be, at the option of the City, the official depository bank of the City.
"Final Acquisition Date" means the third anniversary of the Delivery Date, or such earlier date on
which the final item(s) of the Property is acquired or on which the City no longer intends to acquire the
Property, as evidenced by the filing of the Certificate of the City required by Section 2.6(e).
"Finance Contract" means this Personal Property Finance Contract, as originally executed or as it
may from time to time be supplemented, modified or amended by one or more instruments supplemental
hereto entered into in accordance with the applicable provisions hereof.
"Finance Payment" means each "Principal Installment" and "Interest Installment" agreed to be
paid by the City pursuant to Section 3.1.
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"Finance Payment Date" means the Stated Maturity of each Interest Installment of each Finance
Payment as set forth in Section 3.1(b), and the Stated Maturity of each Principal Installment of each
Finance Payment as set forth in Exhibit B.
® "Finance Payment Fund" means the sinking fund of the City by that name to be established
® pursuant to Section 3.1(e) and held by the Paying Agent/Registrar under the Note Resolution.
"First Interest Payment Date" means the date on which the first Interest Installment is due under
this Finance Contract as specified on Exhibit B.
® "Fiscal Year' means the fiscal year of the City officially established as its fiscal year for
budgeting and accounting purposes.
"Insurer" means a provider of municipal bond insurance or other provider of credit enhancement
with respect to the Notes, if any, that'may be approved by the City and the Administrator.
"Interest Installment" means each of the interest payments defined as such in Section 3.1(b).
"Net Effective Interest Rate" means the "net effective interest rate" borne by the aggregate of
the Principal Installments, as such term is defined and such rate is calculated with reference to an issue
or series of public securities in Article 717k -2, Vernon's Texas Civil Statutes, as amended.
"Note Resolution" means the resolution of the board of directors of the Corporation that
authorizes the sale and prescribes the terms of the Notes.
"Notes" means any issue or series of notes or other debt obligations of the Corporation, for the
payment of a portion of which all or any part of the Finance Payments are pledged and assigned in
accordance with the Note Resolution.
"Owner" or "Note Owner" or "Owner of Notes" or any similar term when used with respect to any
Note, means the person in whose name such Note is registered in accordance with the Note Resolution.
® "Paying Agent /Registrar" means the bank designated in the Note Resolution as the place at which
the principal of the Notes is payable as named on Exhibit B.
"Principal Amount" means the amount designated as such on Exhibit B, as reduced pursuant to
Section 2.4(a), if applicable.
® "Principal Installment" means each of the principal installment payments defined as such in
Section 3.1(a).
"Pro pert " means those items of personal property listed in Exhibit A and any substitutes therefor
or additions thereto permitted by this Finance Contract.
"Property Costs" means all costs of acquiring and installing the Property other than the Deliver
Costs.
"Sale Date" means the date on which the Corporation enters into a note purchase agreement
pursuant to which the Notes are sold to a broker, dealer or underwriter for resale to the public.
"Stated Maturity ", when used with respect to the Interest Installment of any Finance Payment,
means the date or dates on which an Interest Installment is payable hereunder, as such dates are
specified in Section 3.1(b) and in Exhibit B, and, when used with respect to the Principal Installment of
any Finance Payment, means the date specified in Exhibit B hereto as the maturity date on which such
Principal Installment is due and payable, and, when used with respect to any Note, means the date
specified in such Note as the fixed date on which the principal amount of such Note is due and payable.
"Tax Ordinance" means the ordinance adopted by the governing body of the City that authorizes
the execution and delivery of this Finance Contract and that levies the tax described in Section-3.2(b).
Section 1.2. Rules of Construction. Words of the masculine gender shall be deemed and construed
to include correlative words of the feminine and neuter genders. Unless the context otherwise indicates,
words importing the singular number shall include the plural number and vice versa, and words importing
persons shall include corporations and associations, including public bodies as well as natural persons.
® The use of the terms "hereby," "hereof," "hereto," "herein," "hereunder," and any similar terms
refer to this Finance Contract.
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References to numbered Sections or to lettered Exhibits refer to the Sections in and Exhibits
attached to this Finance Contract that bear those numbers or letters, respectively.
All the terms and provisions hereof shall be liberally construed to effectuate the purposes set
® forth herein, and to sustain the validity hereof.
ARTICLE II
® FUNDING AND PAYMENT OF PROPERTY COSTS AND DELIVERY COSTS
Section 2.1. Issuance of Notes. (a) In order to provide funding for the purpose of paving the
Property Costs and the Delivery Costs for and on behalf of the City, the Corporation will include in its
earliest reasonably available issue of Notes an amount equal to the "Principal Amount" specified in
Exhibit B, and will advance such amount to the City in accordance with Section 2.4.
(b) The Corporation estimates that the Sale Date will occur within 60, and that the Delivery
Date will occur within 90, days of the date of this Finance Contract. The Administrator will inform the
City on a regular basis of the expected Sale Date and Delivery Date. The City retains the right and
option to cancel and withdraw from this Finance Contract by written notice received by the
Administrator at least 10 days prior to the Sale Date.
Section 2.2. Authority to Pledge and AssiE'n Contract Payments. (a) Subject to the limitations
contained in subsections (b) and (c), the City authorizes the Corporation to pledge and assign all or any
part of the Contract Payments and the rights of enforcement of this Finance Contract to or for the
benefit of the holders from time to time of the Notes, to the Insurer (if any) and, to the extent required
to protect the tax exempt status of the Notes, to the United States.
(b) No assignment or pledge under subsection (a) shall ever be made or given in such manner
as would cause the amount of the Contract Payments to be greater, or to be payable at times that are
different, than as expressly stated and agreed to herein.
® Section 2.3. Conditions to Funding. (a) The Corporation and the City agree that the Property
Costs and the Delivery Costs will not be funded under this Finance Contract if any one of the following
terminating events shall occur:
(i) The City fails to comply with the administrative rules of the Administrator;
® (ii) The Corporation is unable. to market and sell the Notes at interest rates and on
terms deemed by the Administrator, in its discretion, to be favorable, in. the light of then
prevailing market conditions and other considerations, to the City;
(iii) The Administrator determines that the Delivery Costs will exceed the "Maximum
Delivery Costs" specified in Exhibit B;
GO The Administrator determines on the Sale Date either (A) that the actual Net
Effective Interest Rate will exceed the "Maximum Net Effective Interest Rate" specified in
Exhibit B, or (B) that the actual Net Effective Interest Rate will exceed the "Estimated Net
Effective Interest Rate" that is established in accordance with Section
(v) The Administrator has received notice of cancellation of this Finance Contract in
accordance with Section 2.1(b);
(vi) The Attorney General of Texas shall decline or fail to approve either this Finance
Contract in accordance with the Act or other applicable law or the Notes in accordance with
applicable law unless he shall have no jurisdiction to approve the same under law; or
(vii) The Corporation is unable to sell the Notes as tax - exempt municipal securities, or
is, for any reason, unable to deliver and receive payment for the Notes on the Delivery Date.
(b) In the event of the occurrence of any one or more of the terminating events described in
subsection (a), this Finance Contract shall be null and void and of no further force or effect. It is
provided, however, that, by resolution or ordinance adopted by the governing body of the City, the
terminating events described in subsections (iii) and (iv) can be waived and actual Delivery Costs and/or,
as the case may be, the actual Net Effective Interest Rate approved and established. In such event, this
Finance Contract shall be deemed amended to the extent stated in such resolution or ordinance upon
acceptance by the Corporation.
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(c) Delivery of the Notes on the Delivery Date shall he conclusive evidence that the
terminating events described in paragraphs (i), (ii), (v) and (vii) of subsection (a) have not occurred. A
certificate executed by the Administrator certifying the calculations required by paragraphs (iii) and (iv)
shall be conclusive evidence that the terminating events described in paragraphs (iii) and GO o}'
subsection (a) have not occurred. A copy of the resolution or ordinance of the governing body of the
City, certified by an Authorized Officer of the City, and a Certificate of Acceptance by the Corporation
executed on its behalf by the Administrator, shall constitute conclusive evidence that this Finance
Contract has been amended and of the terms of such amendment as permitted by subsection (b).
® Section 2.4. Advance of Principal Amount. (a) If none of the terminating events described in
Section 2.3(a) has occurred, or if such has occurred but has been waived and this Finance Contract is
amended as provided by Section 2.3(b), the Corporation, for and in consideration of the Contract
Payments and the covenants and agreements herein contained, will, on the Delivery Date, advance to and
for the sole use and benefit of the City an amount equal to the "Principal Amount" stated in Exhibit B
for the exclusive purpose of paying the Property Costs and paying the Delivery Costs. If the
Administrator determines that the estimate of the Delivery Costs immediately prior to the Sale Date is
significantly less than the Maximum Delivery Costs specified in Exhibit B then the Corporation shall
reduce the Delivery Costs advanced to the City (in whole $5,000 amounts) and the Principal Amount and
the Principal Installments in inverse order of maturity will be reduced accordingly. Such reduction shall
be reflected in the schedule of Finance Payments required by Section 3.1(000.
(b) On the Delivery Date, the Acquisition Fund shall be established with the Escrow Band: in
the name and for the exclusive benefit and account of the City for the purpose of paying the Property
Costs to be financed as set forth in Exhibit B. Withdrawals from the Acquisition Fund shall be made in
accordance with the Escrow Agreement. The Delivery Costs Fund shall be a temporary account or fund
held at the Closing Bank and shall be used by the Closing Bank for the purpose of paying the Delivery
Costs. The amount advanced under subsection (a) shall be paid to the Closing Bank. From that sum, an
amount equal to the amount of the Property Costs to be financed, appearing on line (c) of Part 1 of
Exhibit B, shall be transferred to the Escrow Bank for deposit to the Acquisition Fund. The remaining
amount of such advance shall be deposited to the Delivery Costs Fund. Any accrued interest received by
® the Corporation allocable to this Finance Contract shall be deposited to the Finance Payment Fund to be
created pursuant to Section 3.1(e).
Section 2.5. Use of Delivery Costs Fund. (a) The City acknowledges and agrees that the Closing
Bank is authorized when requested by the Administrator to withdraw amounts from the Delivery Costs
Fund for the purpose of paying the Delivery Costs to the persons entitled thereto, including the Closing
Fee to the Administrator in an amount equal to the percentage of the Property Costs to be financed as
® set forth in Exhibit B.
(b) If any obligations are incurred by the City of a character described in clause (b) of the
definition of Delivery Costs in Section 1.1, the Administrator shall request prompt payment thereof from
the Delivery Costs Fund in the amounts and to the payees described in Exhibit B.
(c) On the earliest practicable date after the expiration of six months from the Delivery
Date, the Administrator shall cause the Closing Bank to transfer any money remaining in the Delivery
Costs Fund that is attributable to this Finance Contract to the Finance Payment Fund.
Section 2.6. Uses of Acquisition Fund Purchase of Property. (a) Commencing with the Delivery
Date and employing due diligence until all the Property has been acquired, the City agrees to award and
administer one or more contracts or purchase orders, and in general do any and all other things
necessary, to acquire the Property. The City agrees to enter into a binding commitment to acquire the
Property in an amount equal to the lesser of $100,000 and 2 -1/2% of the amount originally deposited to
the Acquisition Fund within six months of the Delivery Date. The City may from time to time
requisition money from the Acquisition Fund pursuant to the terms of the Escrow Agreement for the
payment of Property Costs upon delivery to the Escrow Bank, with a copy to the Administrator, of an
Acquisition Certificate in the form of Exhibit C. The City shall also keep copies of each Acquisition
Certificate, together with the invoices or other documents evidencing that such amount is due and
payable, in its records, and shall make such records available to the Administrator and the Corporation
upon reasonable notice.
Except as provided in Section 3.1(f) and subject to Section 2.6(f), the City agrees that it will not
request that moneys be withdrawn from the Acquisition Fund for any purpose other than payment of
Property Costs to persons entitled thereto.
(b) Neither the Corporation, the Paying Agent /Registrar, the Administrator, the Insurer (if
any) nor the Owners shall have any responsibility for the acquisition of the Property and shall have no
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liability for the payment of any Property Costs or Contract Payments (except from amounts received
from the City for the payment of Contract Payments that are pledged under the Note Resolution).
(c) The City may make any changes in the description of the Property or of any component
thereof whenever the City deems such changes to be necessary and appropriate and provided that the
nature of the Property after such changes will constitute qualified property eligible for financing wider
the Act. Actions described herein shall be evidenced by a Certificate of the City filed with the Escrov,
Bank and the Administrator prior to such action being taken.
® (d) All items of the Property are and shall at all times be and remain personal property
notwithstanding that the Property or any portion thereof may be or hereafter become in any manner
affixed or attached to or embedded in or rested upon real property or any improvement thereon.
(e) On the Final. Acquisition Date, the City shall file a Certificate of the City with the
Administrator and the Escrow Bank stating that the Final Acquisition Date has occurred, the final
acquisition of the Property has been made, and directing that all amounts remaining in the Acquisition
Fund be transferred to the Finance Payment Fund. Any transferred amounts shall be applied to 010
payment of succeeding Principal Installments, and, if applicable, to the prepayment of Principal
Installments in accordance with Section 3.1(d)(i). After such transfer, the Acquisition Fund shall be
closed and the Escrow Agreement canceled.
(f) During the time, if any, in which money remains in the Acquisition Fund, the City shall he
entitled to invest such money in Authorized Investments; provided that any such investments must
comply with the tax covenants specified in Section 4.4. Earnings on such investments will be credited to
the Acquisition Fund. The City shall deliver investment instructions to the Escrow Bank, with a coPy to
the Administrator, for the purpose of accounting any required arbitrage rebate amount. The City herel ;v
grants the Corporation a security interest in the Acquisition Fund and all deposits thereto to secure the
City's obligations under this Finance Contract.
Section 2.7. City to Select, Provide for Delivery of Own. Operate Possess and Maintain the
Property. (a) The City shall have exclusive title, ownership and possession of, and shall have the sole
right and duty of selecting, providing for the delivery of, operating and maintaining the Property.
Neither the Corporation, the Administrator, the Paying Agent /Registrar, the Insurer (if any) nor the
Owners shall have any responsibility or liability for any such selection, delivery, ownership, possession,
operation, maintenance, or insurance. Failure by the City to select, provide for delivery of, own,
operate, possess and maintain the Property shall not relieve the City of its obligation to pay the
Contract Payments hereunder or to perform any other obligation under this Finance Contract.
(b) The City assumes all risks of every nature or kind with respect to the Property and this
Finance Contract and the City agrees to defend and protect the Corporation, the Paying Agent/
Registrar, the Administrator, the Insurer (if any) and the Owners against and from all claims, demands or
damages with respect thereto or with respect to this Finance Contract. No loss or damage to any item
of the Property acquired or used pursuant to this Finance Contract nor defect therein nor unfitness or
obsolescence thereof shall relieve the City of its obligation to pay the Contract Payments hereunder or
to perform any other obligation under this Finance Contract.
ARTICLE III
INSTALLMENT REPAYMENTS OF PRINCIPAL AND INTEREST,
OTHER PAYMENTS
Section 3.1. Installment Repatimrents of Principal and Interest to the Corporation. (a) If the
advance of principal is made under Section 2.4, the City agrees to repay the advance in installments (the
"Principal Installments ") on February 15 of each of the years and in the amounts specified in Exhibit B.
(b) The City agrees to pay interest on each Principal Installment at the rates per annum set
forth in part 2 of Exhibit B. Such interest (the "Interest Installments ") shall accrue from the date
specified in the Note Resolution for the commencement of the accrual of interest on the Notes and shall
be payable to the Corporation on the First Interest Payment Date specified in Exhibit B and on each
August 15 and February 15 thereafter. The Interest Installments shall be deposited by the City to its
Finance Payment Fund as provided in Section 3.1(d) until all Principal Installments are paid in full. Such
interest is to be calculated on the basis of a 360 -day year comprised of twelve 30-day months.
® (c) The Principal Installments may not be prepaid except as provided in this subsection, as
follows:
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(i) The Corporation may reserve the right in the Note Resolution to call any Notes
for redemption on any Stated Maturity of the Notes designated by the Corporation in the
extraordinary event that the City fails to expend all funds within the Acquisition Fund by the date
of the Final Acquisition Date. If the Corporation reserves and exercises such right of redemption,
the money transferred to the Finance Payment Fund pursuant to Section 2.6(e) that remains
unexpended on the redemption date thus established (in the largest integral multiples of $5,000)
® shall be used and applied to prepay those Principal Installments that correspond to the Stated
Maturities of the Notes that are called for redemption under such extraordinary circumstances.
(ii) In addition to the right of redemption described in Section 3.100), the
Corporation may reserve the right to call Notes for redemption, in whole or in part, at any time in
the manner and subject to the procedures stated in the Note Resolution. If such right of optional
redemption is reserved, then the City shall have the right to prepay such of the Principal
Installments that correspond to Stated Maturities of the Notes that are subject to such right of
redemption upon giving written notice of the exercise of such right to the Administrator at least
60 days prior to the date on which such prepayment is to occur. The Administrator shall notify
the Paying Agent/Registrar of such prepayment. The City shall deposit to the Finance Payment
Fund, at least one Business Day prior to the redemption date, in immediately available funds, an
amount, including accrued interest, necessary to accomplish such prepayment. On the redemption
date of the applicable Notes, the Note Resolution shall require the Paying Agent/Registrar to pay
from the Finance Payment Fund such amounts as are necessary and sufficient to accomplish such
redemption.
(d) The City hereby directs the Paying Agent/Registrar to establish Finance Payment Fund on
the Delivery Date, in the name and for the account of the City. The Finance Payment Fund shall for all
legal purposes be treated as a sinking fund created by the City in support of its obligations to make the
Finance Payments. On a Business Day which is no less than ten days prior to the February la Finance
Payment Date in each year, the City shall deposit to its Finance Payment Fund with the Paying Agent/
® Registrar in immediately available funds the amount equal to its next succeeding February 15 and August
15 Finance Payments, less any credit for the amount then on deposit in such Fund (and not otherwise
reserved by the City to pay a rebate amount to the United States or otherwise restricted under this
Finance Contract) that can, under this Finance Contract, be applied to payment of Principal Installments
and Interest Installments; provided that transfers to the Finance Payment Fund from the Acquisition
Fund shall be reserved for Principal Installments only. On a Business Day which is no less than ten days
® prior to the August 15 Finance Payment Date in each year, the City shall deposit to its Finance Payment
Fund with the Paying Agent/Registrar in immediately available funds the amount which, when added to
the amount already on deposit in the Finance Payment Fund (and not otherwise reserved by the City to
pay a rebate amount to the United States or otherwise restricted under this Finance Contract), equals
the Finance Payment due on such August 15. The Paying Agent/Registrar shall invest the amounts in the
Finance Payment Fund at the direction of the City in any Authorized Investments; provided, however,
that such investments must comply with the tax covenants specified in Section 4.4. Any earnings on the
Finance Payment Fund will remain in that fund and will be used for the purposes of the fund. The
Finance Payment Fund will be held by the Paying Agent/Registrar solely for the purposes stated in this
Finance Contract, and the City hereby grants the Corporation a security interest in such fund and all
deposits thereto to secure the City's obligations under this Finance Contract to make Finance Payments
and any rebate amounts'required to be paid hereunder.
(e) The Note Resolution shall require the Paying Agent/Registrar to debit the Finance
Payment Fund on each Finance Payment Date in the amount of the Finance Payment then due and to
apply the same in payment thereof.
(f) In addition to the Finance Payments, the City agrees to pay the following amounts when
due directly to the persons indicated: (i) to the United States of America any amounts required by the
Code to be rebated to the United States of America by the Corporation or by the City in connection with
the financing of Property under this Finance Contract; and (ii) to the Paying Agent /Registrar the actual
reasonable expenses and fees of the Paying Agent/Registrar for the performance of. its duties under the
Note Resolution and any related agreements. The City also agrees to pay the Administration Fee, if any,
directly to the Administrator at the times stated on Exhibit B. To the extent, but only to the extent,
that such action would not cause an insufficiency in the amounts available to make principal and interest
payments on the Notes, the City hereby directs the Escrow Bank to disburse funds to the City from the
Acquisition Fund, and directs the Paying Agent/Registrar to disburse funds to the City from the Finance
® Payment Fund, at any time such funds are needed to pay any required rebate to the United States, as
determined by the City. The Paying Agent/Registrar shall notify the City of any payment due under
clause (ii) of this subsection, and payment shall be due within 30 days of any such notice. The Finance
Payments and the other amounts due under this subsection, except the Administration Fee, are herein
referred to as the "Contract Payments ".
(g) Any provisions contained herein to the contrary notwithstanding, the Corporation shall not
® be entitled to receive or collect, nor shall the City be obligated to pay, interest on the unpaid principal
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amount of this Finance Contract in excess of a Net Effective Interest Rate of 15% per annum, and if an%
provision herein shall ever be construed or held to permit the collection or to require the payment of and
amount of interest in excess of that permitted by such law, the provisions of this Section 3.1(h) shall
control and shall override any contrary or inconsistent provision herein. The intention of the parties
being to conform strictly to the limitations under such applicable law, this Finance Contract shall be
held subject to reduction to the amount allowed under such law as now or hereafter construed by the
courts having jurisdiction.
® Section 3.2. Security Levy of Taxes, Budgetipg. (a) The City covenants that it will include
within its annual budget for each fiscal year during which payments are required to be made hereunder
an amount equal at least to the amounts of the Contract Payments and the Administration Fee, and that
it will appropriate and set aside out of the Authorized Tax money sufficient in amount to pay the
Contract Payments and the Administration Fee.
(b) In support of the City's obligation to pay the Contract Payments and the Administration
Fee, the City, in the Tax Ordinance, has levied, and hereby agrees to collect, a direct and continuing ad
valorem tax upon all taxable property within the City at a rate from year to year, within the limits
provided by law, that is sufficient to provide the money each year required for the payment of the
Contract Payments and the Administration Fee and to provide, create and maintain the sinking fund
therefor required by law. In determining the specific rate of such tax each year, the City shall make full
allowance for delinquencies and the costs of collection.
(c) The taxes levied and agreed to be collected, as provided in subsection (b), are hereby
pledged to the Corporation for the payment of the Contract Payments, and to the Administrator for
payment of the Administration Fee, and the City hereby covenants and agrees that it will not amend,
rescind, alter or repeal the Tax Ordinance or reduce, alter or impair this pledge for so long as an\
amounts due under this Finance Contract are unpaid.
(d) During the term of this Finance Contract, the City covenants to calculate its tax rate
under Section 26.04 of the Property Tax Code of the State of Texas, as amended, by treating amounts
® due under this Finance Contract as principal of and interest on debt of the City.
(e) The City waives all rights of set -off, recoupment, counterclaim, and abatement against
the Corporation, the Paying Agent /Registrar, the Insurer (if any) and the Owners with respect to the
amounts due under this Finance Contract, and the City's obligation to pay amounts due under this
Finance Contract is absolute and unconditional and not subject to set -off, recoupment, counterclaim or
abatement for any reason whatsoever.
ARTICLE lV
REPRESENTATIONS AND COVENANTS; DISCLAIMER OF WARRANTIES
Section 4.1. Representations and Covenants of City. The City represents and covenants as
follows:
(a) The City is a duly incorporated municipality and city of the State of Texas authorized
under the Act to enter into this Finance Contract and the transactions contemplated hereby and to
perform all of its obligations hereunder;
(b) The officers of the City executing this Finance Contract are Authorized Officers, and the
City has taken all action and complied with all applicable procedures necessary to insure enforceability
of this Finance Contract;
(c) The Taut Ordinance has been duly adopted and is in full force and effect; and this Finance
Contract has been duly authorized thereby and has been properly executed and delivered by the City,
and, assuming due authorization, execution, and delivery by the Corporation, this Finance Contract
constitutes a legal, valid, and binding agreement of the City enforceable against the City in accordance
with its terms;
(d) The Property will be used during the term of this Finance Contract only to carry out the
lawful purposes of the City;
(e) The City will comply with and satisfy all applicable competitive bidding requirements in
® its acquisition of the Property; and
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(b) The City agrees that it will not use or permit the use of Gross Proceeds in any manner
that will cause any of the Notes to be "private activity bonds" within the meaning of Section 141 of the
Code. In furtherance of this covenant, unless otherwise permitted by the Code and the regulations and
rulings thereunder, the City shall:
(i) exclusively own, operate, and possess all of the Property, the acquisition,
construction, or improvement of which is to be financed directly or indirectly with Gross Proceeds
and not use or permit the use of Gross Proceeds or any of the Property, acquired, constructed, or
® improved with Gross Proceeds in any activity carried on by any person or entity other than a state
or local government, unless such use is merely as a member of the general public, or
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M Neither the execution and delivery of this Finance Contract, nor the fulfillment of or
compliance with the terms and conditions hereof, nor the consummation of the transactions
contemplated hereby, conflicts with or results in a breach of the terms, conditions, or provisions of any
agreement or instrument to which the City is now a party or by which the City is bound, or constitutes a
default under any of the foregoing.
Section 4.2. Representations and Covenants of the Corporation. The Corporation represents and
covenants as follows:
(a) The Corporation is a non -profit corporation duly organized, existing, and in good standing
®
under and by virtue of the laws of the State of Texas, and has due corporate power and authority to enter,
into this Finance Contract and the Trust Indenture and the transactions contemplated thereby and to
perform all its obligations required hereunder and thereunder;
(b) This Finance Contract has been duly authorized, executed, and delivered by the
Corporation and, assuming due authorization, execution, and delivery by the City, constitutes a legal,
valid, and binding agreement of the Corporation enforceable against the Corporation in accordance with
its terms; and
(c) Neither the execution and delivery of this Finance Contract, nor the fulfillment of or
compliance with the terms and conditions hereof, nor the consummation of the transaction
contemplated hereby, conflicts with or results in a breach of the terms, conditions, or provisions of t1w
Corporation's Articles of Incorporation or By -Laws or any agreement or instrument to which the
Corporation is now a party or by which the Corporation is bound, or constitutes a default under any of
the foregoing.
Section 4.3. Disclaimer of Warranties. NEITHER THE CORPORATION, THE ADMINISTRATOR,
THE INSURER .(IF ANY) THE OWNERS NOR THE PAYING AGENT /REGISTRAR MAKE AN)
WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN,
CONDITION, MERCHANT- ABILITY, FITNESS OR USEFULNESS FOR ANY PARTICULAR PURPOSI:
OR FITNESS FOR THE USE CONTEMPLATED BY THE CITY OF THE PROPERTY, OR ANY OTHER
®
REPRESENTATION OR WARRANTY WITH RESPECT TO THE PROPERTY. NO BREACH OF
SHALL AFFECT THE OBLIGATION OF THE CITY TO PAY THE CONTRACT PAYMENTS
WARRANTY
WHEN DUE. THIS DISCLAIMER IS GIVEN BY THE CITY TO THE PAYING AGENT /REGISTRAR, THE
ADMINISTRATOR, THE CORPORATION AND THE INSURER (IF ANY) ONLY AND IS NOT INTENDED,
NOR SHALL IT BE CONSTRUED, TO AMEND, MODIFY, OR OTHERWISE AFFECT THE GUARANTEES
AND WARRANTIES, IF ANY, PROVIDED BY THE MANUFACTURER, WHOLESALE DISTRIBUTOR, OR
ANY OTHER PARTY WITH RESPECT TO THE PROPERTY.
City not use, the use
Section 4.4. Covenants to Maintain Tax- Exempt Status. (a) The shall permit
of, or omit to use "Gross Proceeds" (as hereinafter defined) or any other amounts (or any property the
acquisition, construction, or improvement of which is to be financed directly or indirectly with Gross
Proceeds) in a manner which, if made or omitted, respectively, would cause the interest on any Note to
become includable in the gross income, as defined in section 61 of the Code, of the Owner thereof for
"Gross Proceeds" means all
federal income tax purposes. For the purposes of this Section, the term
amounts received by or for the account of the City under this Finance Contract, all amounts received as
a result of the investment of such amounts, all amounts held for the credit of the Delivery Costs Fund,
the Finance Payment Fund, and the Acquisition Fund, and all other amounts that may be considered
Gross Proceeds under the Code and the regulations and rulings thereunder. The City will not pledge or
set aside money which it reasonably expects to use to pay its obligations under this Finance Contract
except in the Finance Payment Fund. Without limiting the generality of the foregoing, unless and until
of counsel nationally recognized in
the City and the Corporation shall have received a written opinion
the field of municipal bond law to the effect that failure to comply with such covenant will not adversely
affect the exclusion from gross income from federal income tax purposes of the interest on the Notes,
the City shall comply with each of the specific covenants in this Section.
(b) The City agrees that it will not use or permit the use of Gross Proceeds in any manner
that will cause any of the Notes to be "private activity bonds" within the meaning of Section 141 of the
Code. In furtherance of this covenant, unless otherwise permitted by the Code and the regulations and
rulings thereunder, the City shall:
(i) exclusively own, operate, and possess all of the Property, the acquisition,
construction, or improvement of which is to be financed directly or indirectly with Gross Proceeds
and not use or permit the use of Gross Proceeds or any of the Property, acquired, constructed, or
® improved with Gross Proceeds in any activity carried on by any person or entity other than a state
or local government, unless such use is merely as a member of the general public, or
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ARTICLE V
DEFAULTS, REMEDIES
Section 5.1. Defaults. Remedies. (a) Upon the occurrence of a failure by the City to -make any
of the payments required under Ms Finance Contract in the amount, at the times and to- the place
required and specified herein (an "Event of Default'), the Corporation acting on behalf of itself and the
Owners of the Notes, and the Insurer, if any, may take any action at law or in equity to collect all
amounts then due and thereafter to become due under this Finance Contract and the Tax Ordinance; or
to enforce the performance or observance of any other obligation, agreement or covenant of the City,
and to enforce the levy, liens, pledges and security granted or created under this Finance Contract and
® the Tax Ordinance; provided that none of such parties shall have any right to declare the balance of the
Finance Payments to be immediately due and payable as a remedy because of the occurrence of an Event
of Default.
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(ii) not directly or indirectly impose or accept any charge or other payment for use of
any of the Property, the acquisition, construction, or improvement of which is to be financed
directly or indirectly with Gross Proceeds, other than taxes of general application within the City
or interest earned on investments acquired with Gross Proceeds pending application for their
intended purposes, either or both.
(c) Except for expenditures for Authorized Investments, the City shall not use Gross Proceeds
to make or finance loans to any person or entity other than a state or local government. For purposes of
Gross Proceeds are considered to be "loaned" to a person or entity if 0) property
the foregoing covenant,
acquired, constructed, or improved with Gross Proceeds is sold or leased to such person or entity in a
(ii) capacity in or service from such
transaction which creates a debt for federal income tax purposes,
property is committed to such person or entity under a take -or -pay, output, or similar contract or
arrangement, or (iii) indirect benefits, or burdens and benefits of ownership, of Gross Proceeds or any
constructed, or improved with Gross Proceeds are otherwise transferred in a
property acquired,
transaction which is the economic equivalent of a loan.
(d) Except to the extent permitted by section 149(b) of the Code and the regulations and
to take any action which would cause the Notes to be
rulings thereunder, the City shall not take or omit
federally guaranteed within the meaning of section 149(b) of the Code and the regulations and rulings
thereunder.
(e) If requested by the Corporation to do so, the City shall timely provide the informal imi
required by section 149(e) of the Code, on such form as may be prescribed, to the Administrator for
filing with the Secretary of the Treasury.
(f) The City shall cause to be calculated and paid the amount, if any, required to be rebated
to the United States pursuant to section 148(f) of the Code because of this Finance Contract. The Cite
shall execute any required filing in connection therewith and shall provide the Administrator with any
requested records. If the City discovers an error in any calculation made by the 'Administrator, the City
will so notify the Administrator immediately.
®
(g) Except to the extent permitted by section 148 of the Code and the regulations and rulings
thereunder, the City shall not directly or indirectly invest Gross Proceeds in any investment (or use
invested), if as a result of such investment the Yield (as hereinafter
Gross Proceeds to replace money so
defined) from the Delivery Date of all investments acquired with Gross Proceeds (or with money
replaced thereby) whether then held or previously disposed of, exceeds the Yield of the Notes. On the
Final Acquisition Date and at all times thereafter, the City will invest any moneys transferred from the
Acquisition Fund to the Finance Payment Fund only in investments which produce a Yield no greater
®
than the Yield on the Notes. The City will invest any moneys transferred from the Delivery Costs Fund
in investments which a Yield no greater than the Yield on the
to the Finance Payment Fund only produce
Notes. For the purposes of this section, the term "Yield" shall mean the discount factor required to
reduce the payments of principal and interest with respect to an obligation, compounding semiannually,
in the case of the Notes, their issue price. The
to a present value equal to its purchase price, or
Administrator will notify each City of the Yield on the Notes, as calculated on the Delivery Date in the
Corporation's "Certificate as to Tax Exemption ".
(h) Except to the extent permitted by section 148 of the Code and the regulations and rulings
to be to
thereunder, the City shall not enter into any transaction that reduces the amount required paid
the United States pursuant to section 148(f) of the Code because such transaction results in a smaller
profit or a larger loss than would have resulted if the transaction had been at arm's length and had the
Yield of the Notes not been relevant to either party.
ARTICLE V
DEFAULTS, REMEDIES
Section 5.1. Defaults. Remedies. (a) Upon the occurrence of a failure by the City to -make any
of the payments required under Ms Finance Contract in the amount, at the times and to- the place
required and specified herein (an "Event of Default'), the Corporation acting on behalf of itself and the
Owners of the Notes, and the Insurer, if any, may take any action at law or in equity to collect all
amounts then due and thereafter to become due under this Finance Contract and the Tax Ordinance; or
to enforce the performance or observance of any other obligation, agreement or covenant of the City,
and to enforce the levy, liens, pledges and security granted or created under this Finance Contract and
® the Tax Ordinance; provided that none of such parties shall have any right to declare the balance of the
Finance Payments to be immediately due and payable as a remedy because of the occurrence of an Event
of Default.
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9
(b) Except for rights of acceleration which are hereby denied, no remedy herein conferred
upon or reserved to the Corporation is intended to be exclusive of any other available remedy or
remedies, but each and every such remedy shall be cumulative and in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity.
(c) No delay or omission to exercise any right or power occurring upon any default shall
impair any such right or power or be construed to be a waiver thereof, and all such rights and powers
maybe exercised as often as may be deemed expedient.
® (d) If the Corporation shall fail or refuse diligently to take action to collect amounts due
hereunder, and such failure continues for a period of 60 days, then any Owner, acting on behalf of all
Owners, may take such actions in its or their own name and in the name of the Corporation.
Section 5.2. Payment of Expenses of Collection. In the event the City..defaults on any of the
provisions of this Finance Contract and the Corporation or. its assignee, or the Owners, or an Insurer
incurs expenses in the collection of amounts due hereunder or for the enforcement of any other
obligation of the City hereunder, the City will pay on demand therefor to the Corporation or such
assignee or to such Insurer all such expenses.
Section 5.3. Limitation on Waivers. If this Finance Contract is breached by the City and such
breach is waived, such waiver shall be limited to the particular breach so waived and shall not be deemed
a waiver of any other breach hereunder.
ARTICLE VI
PROVISIONS OF GENERAL APPLICATION
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Section 6.1. Term. The term of this Finance Contract shall commence as of the date set forth on
the signature page hereof and shall terminate, except as describe in Section 4.4 hereof, on the date all
amounts required to be paid by the City under this Finance Contract are paid in full.
®
be
Section 6.2. Amendments. Except as provided herein, this Finance Contract shall not
amended, modified, or altered in any manner following the execution hereof by the parties hereto. Prior
to the Sale Date, this Finance Contract may be amended in writing by the parties hereto for any
purpose. After the Sale Date, this Finance Contract may be amended in writing by the parities hereto
for the purposes specified in Section 2.3(b); and for the purpose of curing any ambiguity or of curing,
correcting, or supplementing any defective provision contained herein, provided that no such amendment
shall adversely affect the right of the Corporation (or its assignees) to receive Finance Payments and all
other payments hereunder. This Finance Contract may also be amended by the parties hereto with the
consent of the Insurer, if any, and of a majority in aggregate principal amount of the Owners of the
Notes then Outstanding (as defined in the Note Resolution); provided that no such amendment shall
impair the right of any Note Owner to be paid in full when due without such Owner's consent.
Section 6.3. Preservation and Inspection of Documents. All documents received by the
under the of this Finance Contract shall be
Corporation or the City, or by the Administrator, provisions
retained in their respective possessions and shall be subject at all reasonable times to the inspection of
the other party hereto and its assigns, agents, and representatives, any of whom may make copies
thereof.
Section 6.4. Parties in Interest. Nothing in this Finance Contract, expressed or implied, is
to confer upon or to give to any person or party other than the
intended to or shall be construed
Corporation, the Administrator, the Paying Agent/Registrar, the City, the Insurer, if any, and the
Owners of the Notes any rights, remedies, or claims under or by reason of this Finance Contract or any
covenant, condition, or stipulation hereof; and all covenants, stipulations, promises, and agreements in
this Finance Contract shall be for the sole and exclusive benefit of the Corporation, the Paying
Agent/Registrar, the City, the Insurer (if any) and the Owners of the Notes as third -party beneficiaries.
Section 6.5. No Recourse Under Finance Contract. All covenants, stipulations, promises,
agreements, and obligations contained in this Finance Contract shall be deemed to be the covenants,
stipulations, promises, agreements, and obligations of the parties hereto, respectively, in their corporate
of the hereto in an individual
capacities, and not of any member, officer, employee, or agent parties
be had for the of the Finance Payments or for any claim based
capacity, and no recourse shall payment
thereon or under this Finance Contract against any member, officer, employee, or agent of the parties
®
hereto.
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Section 6.6. Notices. All written notices to be given hereunder shall be given by first -class mail
or personal delivery to the party entitled thereto at its address set forth on the signature page hereof, or
at such other address as the party may provide to the other party, in writing from time to time. Notice
shall be effective upon deposit in the United States mail, postage prepaid or, in the case of personal
delivery, upon delivery to the address set forth on the signature page hereof.
Section 6.7. Severability. If any one or more of the covenants, stipulations, promises,
agreements, or obligations provided in this Finance Contract on the part of the Corporation or the City
to be performed should be determined by a court of competent jurisdiction to be contrary to law, then
® such covenant, stipulation, promise, agreement or obligation shall be deemed and construed to be
severable from the remaining covenants, stipulations, promises, agreements, and obligations herein
contained and shall in no way affect the validity of the other provisions of this Finance Contract.
Section 6.8. Headin s. Any headings preceding the text of the several Articles and Sections
hereof, and any table of contents or marginal notes appended to copies hereof, shall be solely for
convenience of reference and shall not constitute a part of this Finance Contract, nor shall they affect
its meaning, construction, or effect.
Section 6.9. Applicable Law. This Finance Contract shall be governed by and construed in
accordance with the laws of the State of Texas and the United States of America.
Section 6.10. Representatives. Whenever under the provisions of this Finance Contract the
approval of the Corporation or the City is required or the Corporation or the City are required to take
some action at the request of the other, such approval or such request may be given for the Corporation
by an Authorized Officer of the Corporation and for the City by an Authorized Officer of the City, and
any party hereto shall be authorized to rely upon any such approval or request. Actions taken by the
Administrator shall be effective for all purposes if taken by a person designated by the Administrator
w_ ith notice to the City and the Trustee to act on its behalf under the Finance Contract.
Section 6.11. Execution in Counterparts Possession of Original. This Finance Contract may be
simultaneously executed in several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument. The Corporation's security interest in this Finance
Contract and the funds created herein is perfected by possession, and all other executed Finance
Contracts not held by the Corporation or the Paying Agent/Registrar shall be deemed for the purpose of
such security interest to be copies.
IN WITNESS WHEREOF, the parties hereto have caused this Finance Contract to be executed in
their respective names by their duly Authorized Officers and to be dated and delivered on the actual
date of execution hereof by the City, to -wit:
PUBLIC PROPERTY FINANCE CORPORATION OF
TEXAS
Address: 333 East Avenue A
Belton, Texas 76513
By:
Title:
v
0 l 4 9 N
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0
W1
r
�J
ATTEST:
Title:
[CITY SEAL]
lu
v
CITY OF BAYTOWN , TEXAS
Address: 2401 Market Street
P. 0. Box 424
Baytown, Texas 77522
By:
Title:
-13-
u
Items of Property
Computer equipment
Computer and software
K]
E
0 02-1-
EXHIBIT "A"
INITIAL PROPERTY DESCRIPTION
Estimated
Quantity Estimated Cost Useful Life
1 $125,000 7
1 150,000 7
$275,000
A -1
Baytown
Expected Date of
Acquisition Payment
January 1, 1988
January 1, 1988
EXHIBIT "B"
DETERMINATION OF PRINCIPAL AMOUNT, PRINCIPAL
INSTALLMENT SCHEDULE AND INTEREST RATE, MISCELLANEOUS TERMS
Part 1 Determination of Principal Amount
(a) Total Estimated Costs from Exhibit A $275,000
(b) Estimated interest earnings on Acquisition
Fund prior to Final Acquisition Date 1,145
(c) Property Costs to be financed (line (a) less line (b)) 273,855
(d) Maximum Delivery Costs (2.32% of line (c)) 6,350
(e) Principal Amount (line (c) plus line (d)) 285,000*
*Rounded to neat highest $5,000.
Part 2. Principal Installment Schedule and Interest Rate (each principal installment must be divisible by
5 and the total must equal the principal amount)
Stated Maturity
Principal Installment Date (February 15) Interest Rate
r:
Part 3. Miscellaneous
(a) The First Interest Payment Date under this Finance Contract is February 15, 1988.
(b) The amount of the Closing Fee to be paid to the Administrator for itself and the
Corporation as a part of the Delivery Costs is .16% of the Property Costs stated on line (c) of Part I of
this Exhibit.
(c) The annual Administration Fee payable to the Administrator pursuant to Section 3.1(g)
will be in an amount equal to the reasonable amount charged by the Administrator to others similarly
situated for services rendered.
(d) The Paying Agent/Registrar under the Bond Resolution is Texas Commerce Bank National
Association, Houston, Texas.
(e) Included in the calculation Maximum Delivery Costs are the following unique costs to the
City, such as fees of the City's own financial advisors or counsel: N /A.
(f) The Escrow Bank is Bavtown State Sank.
Ll
B -1
I& 0220- /11
EXHIBIT "C"
ACQUISITION CERTIFICATE
1, the undersigned officer of the City of Baytown (the "City "), herehy certify in
connection with the Personal Property Finance Contract, dated as of (the "Finance
Contract "), by and between the City and the Public Property Finance Corporation of Texas (the
® "Corporation "), as follows:
1. The City warrants and certifies that it is required to make a payment of Property Costs
(as defined in the Finance Contract) in connection with its purchase of Property (as defined in the
Finance Contract) in accordance with Section 2.6 of the Finance Contract.
2. $ should be withdrawn from our Acquisition Fund for the payment of the
Property Costs. The amount disbursed in accordance with this Certificate must be paid to persons other-
than the City. The amount withdrawn shall be payable by cheek(s) in the amount(s) and to the persons)
indicated in the copies of the invoices attached hereto. Alternatively, the amount requested shall b�
disbursed pursuant to the following wire or check instructions:
Such amount will be used to pay the' Property Costs and has not been the subject of any other Acquisitioli
Certificate.
3. All public bidding requirements have been satisfied with. respect to the Property for whic•11
this Acquisition Certificate is submitted.
® Dated: , 19
clrY of BAYTOWfV, TE \AS
0149 H/17
CJ
By:
Title:
C -1
ATTEST:
Title:
[BANK SEAL]
J
O 1 4 1 H/ 2 2
�11
By:
Title:
D -5
BAYTOWN STATE BANK
Baytown, Texas, as escrow bank.
EXHIBIT D
ESCROW AGREEMENT
® THIS ESCROW AGREEMENT, dated as of the date specified below (herein, together with am
'
amendments or supplements hereto, called the "Agreement) is entered into by and between the Cit'
named below (herein called the "City ") and the bank named below, as escrow agent (herein, together with
any successor in such capacity, called the "Escrow Bank ").
® WITNESSETH:
WHEREAS, the Public Property Finance Act, Chapter 271, Subchapter A, Teaas Local
Government Code, as amended (the "Act'), authorizes the City to execute, perform, and make payments
under contracts with any person for the use, acquisition or purchase of personal property as described in
the Act; and
WHEREAS, the Act permits the governing body of the City to execute contracts in any form
deemed appropriate in connection with the use, acquisition or purchase of personal property; and
WHEREAS, the City desires to acquire or purchase certain personal property that is useful and
appropriate for the purpose of the City, all as described in the Personal. Property Finance Contract
described below (the "Property'); and
WHEREAS, the governing body of the City has by duly adopted ordinance (the "Ordinance ")
authorized a certain Personal Property Finance Contract (the "Contract') that provides for the financinb
of the Property; and
WHEREAS, the Contract and the Ordinance authorized the execution of an Escrow Agreement in
substantially the form hereof and the deposit of the proceeds of such financing into the "Acquisition
Fund" created in the Contract and herein; and
® NOW, THEREFORE, in consideration of the mutual undertakings, promises and agreements herein
contained and in consideration of other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the City and.the Escrow Bank mutually undertake, promise, and agree for
themselves and their respective representatives and successors, as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
SECTION 1.01. Definitions. Unless the context clearly indicates otherwise, the following terms
shall have the meanings assigned to them below when they are used in this Agreement:
"Acquisition Fund" means the fund created by that name in the Contract and in this Agreement to
be administered by the Escrow Bank pursuant to the provisions of this Agreement.
"Authorized Representative" shall mean with respect to the City, the Superintendent, the chief
business or financial officer of the City or such other person hereafter designated by the governing bode
of the City.
"Permitted Investments" shall mean all forms of investment then authorized by law for the
investment of the general funds of the City.
SECTION 1.02. Other Definitions. Terms that are capitalized herein and that are not otherwise
herein defined shall have the same meaning as are assigned to such terms in the Contract and the
Ordinance.
D -1
All interest and other income received by the Escrow Bank from investment of the Acquisition
Fund shall be retained in the Acquisition Fund.
The Escrow Bank shall not be liable for any loss resulting from the making or disposition of any
investment pursuant to this Section, and any such losses shall be charged to the Acquisition Fund.
ri
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D -2
ARTICLE II
DEPOSIT OF FUNDS
SECTION 2.01. Deposits in the Acquisition Fund. At the time required by the Contract, there
®
shall be deposited with the Escrow Bank, for deposit in the Acquisition Fund, the amount required by the
Contract to be deposited therein, and the Escrow Bank shall, upon the receipt thereof, acknowledge such
receipt to the City and the Administrator in writing.
®
ARTICLE III
CREATION AND OPERATION OF ACQUISITION FUND
SECTION 3.01. Acquisition Fund. (a) The Escrow Bank will create on its books a special
irrevocable escrow fund to be known as the City's Personal Property Acquisition Fund (the "Acquisition
Fund "). The Escrow Bank hereby agrees that upon receipt thereof it will deposit to the credit of the
Acquisition Fund the funds described in Section 2.01 hereof. Such deposit, all proceeds therefrom, alai
all cash balances from time to time on deposit therein G) shall be the property of the Acquisition Fwid,
and (ii) shall be applied only in strict conformity with the terms and conditions of this Agreement.
(b) The Escrow Bank shall hold the Acquisition Fund and all assets therein, wholly segregated
from all other funds and securities on deposit with the Escrow Bank; it shall never allow any other assets
of the Acquisition Fund to be commingled with any other funds or securities of the Escrow Bank; and it
shall hold and dispose of the assets of the Acquisition Fund only as set forth herein.
(c) The assets of the Acquisition Fund shall always be held by the Escrow Bank in a fiduciary
capacity for the benefit of the City and a special account thereof shall at all tintes be maintained on th,
books of the Escrow Bank. The amounts received by the Escrow Bank under this Agreement shall not. be
considered as a banking deposit by the City, and the Escrow Bank shall have no right to title with respect
thereto except as a fiduciary and Escrow Bank under the terms of this Agreement.
®
be to
(d) The amounts received by the Escrow Bank under this Agreement shall not subject
warrants, drafts or checks drawn by the City but shall be disbursed or withdrawn, in connection with the
costs paid or incurred by the City with respect to the use, acquisition or purchase of the Property, solely
upon the receipt of an Acquisition Certificate from an Authorized Representative in the form attached
to the Contract on Exhibit C. The Escrow Bank shall retain on file copies of each Acquisition
Certificate.
SECTION 3.02. Moneys Secured. All moneys deposited with the Escrow Bank and not invested in
securities by the Escrow Bank pursuant to the provisions hereof or to the extent not insured by the
Federal Deposit Insurance Corporation or other federal agency, shall continuously be secured, for the
benefit of the City and the Owners, to the extent and as required by law for security of the City's funds.
Such securities shall be deposited with the Escrow Bank, but shall be pledged as such security.
SECTION 3.03. No Unauthorized Transfers. No money shall be withdrawn or transferred from or
paid out of the Acquisition Fund except as herein expressly provided in Section 3.01.
SECTION 3.04. Investment of Money in Escrow Fund. All money held by the Escrow Bank
pursuant to this Escrow Agreement shall be deposited or invested only in Permitted Investments and onl\
at the written direction of the Authorized Representative:
All interest and other income received by the Escrow Bank from investment of the Acquisition
Fund shall be retained in the Acquisition Fund.
The Escrow Bank shall not be liable for any loss resulting from the making or disposition of any
investment pursuant to this Section, and any such losses shall be charged to the Acquisition Fund.
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D -2
ARTICLE IV
RECORDS AND REPORTS
SECTION 4.01. Records. The Escrow Bank: will keep books of record and account in which
complete and correct entries shall be made of all transactions relating to the receipts, disbursements,
allocations and application of the money and Permitted Investments deposited to the Acquisition Fund
and all proceeds thereof, including specifically the submission of any Acquisition Certificate and the
® disbursement of funds pursuant to any such submission, and such books shall be available for inspection at
reasonable hours and under reasonable conditions by the City and the Administrator on behalf of the
Owners and the Corporation.
SECTION 4.02. Reports. While this Agreement remains in effect, the Escrow Bank annually shall
prepare and send to the City and the Administrator a written report summarizing all transactions
relating to the Acquisition Fund during the preceding year, together with a detailed statement of all
Permitted Investments and the cash balance on deposit in the Acquisition Fund as of the end of surf,
period.
ARTICLE V
CONCERNING THE ESCROW BANK
01 e9 H /20
D -3
11
SECTION 5.01. Representations. The Escrow Bank hereby represents that it has all necessnr\
into this Agreement and undertake the obligations and responsibilities
power and authority to enter
imposed upon it herein, and that it will carry out all of its obligations hereunder.
SECTION 5.02. Limitation on Liability. The Escrow Bank makes no representations as to the
thereof, or as to the title of the Cite
value, conditions or sufficiency of the Acquisition Fund, or any part
thereto, or as to the security afforded thereby or hereby, and the Escrow Bank shall not incur am
®
liability or responsibility in respect to any of such matters.
It is the intention of the parties hereto that the Escrow Bank shall never be required to use or
financial liability in the performance of an of its
advance its own funds or otherwise incur personal
duties or the exercise of any of its rights and powers hereunder.
The Escrow Bank shall not be liable for any action taken or neglected to be taken by it in good
faith in any exercise of reasonable care and believed by it to be within the discretion or power conferred
Escrow Bank be responsible for the consequences of any error of
upon it by this Agreement, nor shall the
judgment; and the Escrow Bank shall not be answerable except for its own action, neglect or default, nor
for any loss unless the same shall have been through its negligence or want of good faith.
Unless it is specifically otherwise provided herein, the Escrow Bank has no duty to determine or
contingency or the performance or failure of
inquire into the happening or occurrence of any event or
or contracts with others, with the Escrow Bank's
performance of the City with respect to arrangements
sole duty hereunder being to safeguard the Acquisition Fund, to dispose of and deliver the same in
accordance with this Agreement. If, however, the Escrow Bank is called upon by the terms of this
or contingency, the Escrow Bank shall be obligated,
Agreement to determine the occurrence of any event
in making such determination, only to exercise reasonable care and diligence, and in event of error in
making such determination the Escrow Bank shall be liable.only for its own misconduct or its negligence.
In determining the occurrence of any such event or contingency the Escrow Bank may request from the
City such reasonable additional evidence as the Escrow Bank in its discretion mad,
or any other person
deem necessary to determine any fact relating to the occurrence of such event or contingency, and in
this connection may make inquiries of, and consult with, among others, the City at any time.
SECTION 5.03. Successor Escrow Banks. If at any time the Escrow Bank or its legal successor or
escrow agent
successors should become unable, through operation or law or otherwise, to act as
if its and affairs shall be taken under the control of any state or federal court or
hereunder, or property
administrative body because of insolvency or bankruptcy or for any other reason, a vacancy shall
Escrow Bank hereunder. In such event the City, by appropriate action,
forthwith exist in the office of
promptly shall appoint an Escrow Bank to fill such vacancy. If no successor Escrow Bank shall have been
by an
appointed by the City within 60 days, a successor may be appointed by the Administrator
instruments in writing filed with the City, signed by such owners or by their duly
instrument or
authorized attorneys -in -fact.
01 e9 H /20
D -3
11
Any successor Escrow Bank shall be a corporation organized and doing business under the laws of
the United States or the State of Texas, which may, but need not be, authorized under such labs to
exercise corporate trust powers, having its principal office and place of business in the State of Texas,
having a combined capital and surplus of at least $1,000,000 and subject to the supervision or
examination by federal or state authority.
Any successor Escrow Bank shall execute, acknowledge and deliver to the City and the preceding
Escrow Bank an instrument accepting such appointment hereunder, and the Escrow Bank shall execute
and deliver an instrument transferring to such successor Escrow Bank, subject to the terms of this
® Agreement, all the rights, powers and trusts of the Escrow Bank hereunder. Upon the request of an,
such successor Escrow Bank, the City shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor Escrow Bank all such rights, powers and duties.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Notice. Any notice, authorization, request, or demand required or permitted to
be given hereunder shall be in writing and shall be deemed to have been duly given when mailed b.'
registered or certified mail, postage prepaid addressed to the City or the Escrow Bank at their
respective official principal address. The United States Post Office registered or certified mail receipt
showing delivery of the aforesaid shall be conclusive evidence of the date and fact of delivery.
SECTION 6.02. Termination'of Responsibilities. Upon the taking of all the actions as descrihc,i
herein by the Escrow Bank, the Escrow Bank shall have no further obligations or responsibi lities
hereunder to the City, or to any other person or persons in connection with this Agreement.
SECTION 6.03. Binding Agreement. This Agreement shall be binding upon the City and the
Escrow Bank and their respective successors and legal representatives, and shall inure solely to the
® benefit of the Owners, the City, the Corporation, the Escrow Bank and their respective successors ajid
legal representatives.
SECTION 6.04. Severability. In case any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, but this
Agreement shall be construed as if such invalid or illegal or unenforceable provision had i.tever be,•n
contained herein.
SECTION 6.05. Texas Law Governs. This Agreement shall be governed exclusively by the
provisions hereof and by the applicable laws of the State of Texas.
SECTION 6.06. Time of the Essence. Time shall be of the essence in the performance of
obligations from time to time imposed upon the Escrow Bahl: by this Agreement.
SECTION 6.07. Amendments. This Agreement shall not be amended except to cure any ambiguity
or formal defect or omission in this Agreement. No amendment shall be effective unless the same shall
be in writing and signed by the parties thereto. No such amendment shall adversely affect the rights of
the Owners or the Corporation.
EXECUTED as of
CITY Of BAYTOWN , TEXAS
B �
- -7
ATTEST:
Title:
[CITY SEAL]
Q L< y H/ 2 I
n
D -4
71112 -1
(1 ) I am the duly chosen, qualified and acting officer of
the City for the office shown beneath my signature, and in such
capacity I am familiar with and have personal knowledge of the
matters hereinafter stated.
(2 ) The City Council of the City convened in regular
SESSION ON THE 12 DAY OF November 1987, at the
designated meeting place in Baytown, Texas, and the roll was
called of the duly constituted officers and members of said City
Council, to wit: Mayor Emmett O. Hutto and Council members Fred T. Philips,
® Jimmy Johnson, Perry M. Simmons, Ron Embry, Roy L. Fuller and Rolland J. Pruett
and all of said persons were present except
thus constituting a quorum. Whereupon, among other business, the
following was transacted at said Meeting: a written Ordinance
was duly introduced for the consideration of said City Council
and read in full. Thereupon, the presiding officer instructed
the members of said City Council that if any member of said City
Council or any relative by blood or marriage to such member has a
substantial interest in any business entity which would be
peculiarly affected by action on said Ordinance, such member must
file an affidavit prior to the vote on said Ordinance with the
Secretary of said City Council stating the nature and extent of
such interest and must abstain from participating in the
discussion and vote on said Ordinance, all as more specifically
set forth in Article 988b, Vernon's Annotated Texas Civil
Statutes, as amended. The following persons filed an affidavit
and abstained pursuant to the foregoing instructions:
A copy of each affidavit so filed is attached hereto as an
exhibit to this Certificate. It was then duly moved and seconded
that said Ordinance be adopted; and, after due discussion, said
motion, carrying with it the adoption of said Ordinance,
prevailed and carried by the following vote:
AYES: 7
NOES: 0
ABSTENTIONS:
(3) A true, full and correct copy of the aforesaid
Ordinance adopted at the Meeting described in the above and
foregoing paragraph is attached to and follows this Certificate;
THE STATE OF TEXAS §
§ CERTIFICATE
FOR ORDINANCE
CITY OF BAYTOWN §
I, the undersigned officer of
the City
of Baytown, Texas
(the "City" ), do hereby make,
execute
and deliver this
certificate for the benefit of all
persons
interested in the
actions and proceedings of the City
Council of the City. I DO
HEREBY CERTIFY as follows:
(1 ) I am the duly chosen, qualified and acting officer of
the City for the office shown beneath my signature, and in such
capacity I am familiar with and have personal knowledge of the
matters hereinafter stated.
(2 ) The City Council of the City convened in regular
SESSION ON THE 12 DAY OF November 1987, at the
designated meeting place in Baytown, Texas, and the roll was
called of the duly constituted officers and members of said City
Council, to wit: Mayor Emmett O. Hutto and Council members Fred T. Philips,
® Jimmy Johnson, Perry M. Simmons, Ron Embry, Roy L. Fuller and Rolland J. Pruett
and all of said persons were present except
thus constituting a quorum. Whereupon, among other business, the
following was transacted at said Meeting: a written Ordinance
was duly introduced for the consideration of said City Council
and read in full. Thereupon, the presiding officer instructed
the members of said City Council that if any member of said City
Council or any relative by blood or marriage to such member has a
substantial interest in any business entity which would be
peculiarly affected by action on said Ordinance, such member must
file an affidavit prior to the vote on said Ordinance with the
Secretary of said City Council stating the nature and extent of
such interest and must abstain from participating in the
discussion and vote on said Ordinance, all as more specifically
set forth in Article 988b, Vernon's Annotated Texas Civil
Statutes, as amended. The following persons filed an affidavit
and abstained pursuant to the foregoing instructions:
A copy of each affidavit so filed is attached hereto as an
exhibit to this Certificate. It was then duly moved and seconded
that said Ordinance be adopted; and, after due discussion, said
motion, carrying with it the adoption of said Ordinance,
prevailed and carried by the following vote:
AYES: 7
NOES: 0
ABSTENTIONS:
(3) A true, full and correct copy of the aforesaid
Ordinance adopted at the Meeting described in the above and
foregoing paragraph is attached to and follows this Certificate;
71112 -1a
said Ordinance has been duly recorded in said City Council's
minutes of said Meeting; the above and foregoing paragraph is a
true, full and correct excerpt from said City Council's minutes
of said Meeting pertaining to the adoption of said Ordinance;
that the persons referred to in the above and foregoing paragraph
are duly chosen, qualified and acting officers and members of
said City Council; and that each of the officers and members of
said City Council was duly and sufficiently notified as required
by applicable law of the aforesaid Meeting.
(4) Written notice of the date, hour, place and subject of
said Meeting of said City Council was posted on a bulletin board
located at a place convenient to the public in the City Hall of
the City of Baytown, Texas, for at least 72 hours preceding the
scheduled time of such Meeting, or, in the case of emergency or
urgent public necessity, for at least two hours preceding the
scheduled time of such Meeting; such place of posting was readily
accessible to the general public at all times from such time of
posting until the scheduled time of such Meeting; and such
Meeting was open to the public as required by law at all times
during which the Ordinance and the subject matter thereof were
® discussed, considered and formally acted upon, all as required by
the Open Meetings Law, Article 6252 -17, Vernon's Annotated Texas
Civil Statutes, as amended.
WITNESS MY HAND AND THE OFFICIAL SEAL OF THE CITY OF
BAYTOWN, TEXAS, this the 12 day of November , 1987_
By /
Title:
City er
(SEAL)