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Ordinance No. 5,012ORDINANCE NO. 5012 80526 -1 ORDINANCE AUTHORIZING THE ISSUANCE OF $1,140,000 CITY OF BAYTOWN, TEXAS, PUBLIC IMPROVEMENT BONDS, SERIES 1988; APPROPRIATING $1,140,000 OF THE ® PROCEEDS OF SALE THEREOF FOR STREET IMPROVEMENTS; AND CONTAINING OTHER PROVISIONS RELATED THERETO THE STATE OF TEXAS § COUNTIES OF HARRIS AND CHAMBERS § CITY OF BAYTOWN § WHEREAS., the Charter of the City of Baytown and the Constitution and laws of the State of Texas, particularly Chapters 1 and 7 of Title 22, Revised Civil Statutes of Texas, as amended, authorize the City of Baytown to issue Public Improvement Bonds to obtain funds for needed public improvements; and WHEREAS, the bonds hereinafter authorized were duly and favorably voted at an election held in the City on the 9th day of July, 1981; and WHEREAS, the election authorizing the issuance of the bonds was held in conformity with the Constitution and laws of the State of Texas and section 58 of the home -rul Charter of the City; and WHEREAS, $19,650,000 of the $23,290,000 bonds voted at such election have been previously issued; and WHEREAS, the City Council of the City has and does hereby determine that bonds in the amount of $1,140,000, as a portion and the fifth installment of the $23,290,000 bonds voted at such election, should now be issued and delivered in order to accomplish the purposes for which they were voted, and the City reserving the right to issue the remaining $2,500,000 of the bonds authorized at such election at a later time; Now, Therefore BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN: E 11 ARTICLE I DEFINITIONS AND INTERPRETATIONS Section 1.1: Definitions. Throughout this ordinance the following terms and expressions as used herein shall have the meanings set forth below: The term "Bond" or "Bonds" shall mean any bond or all bonds, as the case may be, of the Public Improvement Bonds, Series 1988, authorized in this Ordinance, unless the context clearly indicates otherwise. The term "Business Day" shall mean any day which is not a Saturday, Sunday, or a day on which the Registrar is authorized by law or executive order to close. The term "City" shall mean the City of Baytown, Texas, and, where appropriate, the City Council. The term "Code" shall mean the Internal Revenue Code of 1986, as amended. ® The term "Construction Fund" shall mean the construction fund established by the City pursuant to Article VI of this Ordinance. The term "Interest and Sinking Fund" shall mean the interest and sinking fund established by the City pursuant to Section 5.1 of this Ordinance. The term "Interest Payment Date ", when used in connec- tion with any Bond, shall mean February 1, 1989, and each August 1 and February 1 thereafter until maturity or earlier redemption of such Bond. The term "Ordinance" as used herein and in the Bonds shall mean this ordinance authorizing the Bonds and all amendments hereof and supplements hereto. The term "Owner" shall mean any person who shall be the registered owner of any outstanding Bonds. The term "Paying Agent" shall mean the Registrar. -2- u The term "Record Date" shall mean, for any Interest Payment Date, the 15th calendar day of the month next preceding such Interest Payment Date. ® The term "Register" shall mean the books of registration kept by the Registrar in which are maintained the names and addresses of and the principal amounts registered to each Owner. The term "Registrar" shall mean MTrust Corp, National Association, Houston, Texas, and its successors in that capacity. Section 1.2: Interpretations. All definitions of terms used herein and all pronouns used in this Ordinance shall be deemed to apply equally to singular and plural and to all genders. The titles and headings of the articles and sec- tions of this Ordinance have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof. This Ordinance and all the terms and pro- visions hereof shall be liberally construed to effectuate the purposes set forth herein. ARTICLE II TERMS OF THE BONDS Section 2.1: Amount and Purpose. The Bonds shall be issued in fully registered form, without coupons, in the total authorized aggregate amount of One Million One Hundred Forty Thousand Dollars ($1,140,000) for the purpose of constructing permanent street improvements for the City. Section 2.2: Designation, Date, and Interest Payment Date. The Bonds shall be designated as the "CITY OF BAYTOWN, TEXAS, PUBLIC IMPROVEMENT BONDS, SERIES 198811, and shall be dated June 1, 1988. The Bonds shall bear interest from the later of June 1, 1988, or the most recent Interest Payment Date to which interest has been paid or duly provided for, calculated on the basis of a 360 -day year of twelve 30 -day months, interest payable on February 1, 1989, and semi- annually thereafter on August 1 and February 1 of each year until maturity or prior redemption. -3- [I �, I E Section 2.3: Numbers Denomination, Interest Rates and Maturities. The Bonds shall be issued bearing the numbers, in the principal amounts, and bearing interest at the rates set forth in the following schedule, and may be transferred and exchanged as set out in this Ordinance. The Bonds shall mature, subject to prior redemption in accordance with this Ordinance, on February 1 in each of the years and in the amounts set out in such schedule. Bonds delivered in trans- fer of or in exchange for other Bonds shall be numbered in order of their authentication by the Registrar, shall be in the denomination of $5,000 or integral multiples thereof, and shall mature on the same date and bear interest at the same rate as the Bond or Bonds in lieu of which they are de- livered. Bond 'Principal Interest Number Year Amount Rate R- 1 1990 $ 40,000 % R- 2 1991 50,000 R- 3 1992 50,000 R- 4 1993 50,000 R- 5 1994 50,000 R- 6 1995 100,000 R- 7 1996 100,000 R- 8 1997 100,000 R- 9 1998 100,000 R -10 1999 100,000 R -11 2000 100,000 R -12 2001 100,000 R -13 2002 100,000 R -14 2003 100,000 Section 2.4: Execution of Bonds; Seal. The Bonds shall be signed by the Mayor of the City and countersigned by the City Clerk of the City, by their manual, lithographed, or facsimile signatures, and the official seal of the City shall be impressed.or placed in facsimile thereon. Such facsimile signatures on the Bonds shall have the same effect as if each of the Bonds had been signed manually and in person by each of said officers, and such facsimile seal on the Bonds shall have the same effect as if the official seal of the City had been manually impressed upon each of the Bonds. If any officer of the City whose manual or facsimile signature shall appear on the Bonds shall cease to be such officer before the authentication of such Bonds or before the delivery of such -4- n E CJ Bonds, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in such office. Section 2.5: Authentication. Except for the Bonds to be initially issued, which need not be authenticated, only such Bonds as shall bear thereon a certificate of authentica- tion, substantially in the form provided in Section 4.3 of this Ordinance, manually executed by an authorized represen- tative of the Registrar, shall be entitled to the benefits of this Ordinance or shall be valid or obligatory for any purpose. Such duly executed certificate of authentication shall be conclusive evidence that the Bond so authenticated was delivered by the Registrar hereunder. Section 2.6: Medium and Place of Payment. The Regis- trar is hereby appointed as the Paying Agent for the Bonds. The principal of the Bonds shall be payable, without exchange or collection charges, in any coin or currency of the United States of America which, on the date of payment, is legal tender for the payment of debts due the United States of America, upon their presentation and surrender as they become due and payable, whether at maturity or by prior redemption, at the corporate trust office of the Registrar. The interest on each Bond shall be payable by check payable on the Interest Payment Date mailed by the Registrar on or before each Interest Payment Date to the Owner of record as of the Record Date, to the address of such Owner as shown on the Register. If the date for payment of the principal of or interest on any Bond is not a Business Day, then the date for such payment shall be the next succeeding Business Day. Section 2.7: Ownership; Unclaimed Principal and Interest. The City, the Registrar and any other person may treat the person in whose name any Bond is registered as the absolute owner of such Bond for the purpose of making and receiving payment of the principal thereof and for the further purpose of making and receiving payment of the interest thereon, and for all other purposes, whether or not such Bond is overdue, and neither the City nor the Registrar shall be bound by any notice or knowledge to the contrary. All payments made to the person deemed to be the Owner of any Bond in accordance with this Section 2.7 shall be valid and -5- LJ effectual and shall discharge the liability of the City and the Registrar upon such Bond to the extent of the sums paid. ® Amounts held by the Registrar which represent principal of and interest on the Bonds remaining unclaimed by the Owner after the expiration of three years from the date such amounts have become due and payable shall be reported and disposed of by the Registrar in accordance with the applicable provisions of Texas law including, to the extent applicable, Title 6 of the Texas Property Code, as amended. Section 2.8: Registration, Transfer and Exchange. So long as any Bonds remain outstanding, the Registrar shall keep the Register at its corporate trust office and, subject to such reasonable regulations as it may prescribe, the Registrar shall provide for the registration and transfer of Bonds in accordance with the terms of this Ordinance. Each Bond shall be transferable only upon the presenta- tion and surrender thereof at the corporate trust office of the Registrar, duly endorsed for transfer, or accompanied by an assignment duly executed by the registered Owner or his authorized representative in form satisfactory to the Registrar. Upon due presentation of any Bond for transfer, the Registrar shall authenticate and deliver in exchange therefor, within 72 hours after such presentation, a new Bond or Bonds, registered in the name of the transferee or transferees, in authorized denominations and of the same maturity and aggregate principal amount and bearing interest at the same rate as the Bond or Bonds so presented. All Bonds shall.be exchangeable upon presentation and surrender thereof at the corporate trust office of the Registrar for a Bond or Bonds of the same maturity and interest rate and in any authorized denomination, in an aggregate principal amount equal to the unpaid principal amount of the Bond or Bonds presented for exchange. The Registrar shall be and is hereby authorized to authenticate and deliver exchange Bonds in accordance with the provisions of this Section 2.8. Each Bond delivered in accordance with this Section 2.8 shall be entitled to the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such Bond is delivered. The City or the Registrar may require the Owner of any Bond to pay a sum sufficient to cover any tax or other 0 M. governmental the transfer the Registrar ® the City. charge that may be imposed in or exchange of such Bond. Any for such transfer or exchange connection with fee or charge of shall be paid by The City shall not be required (1) to issue, transfer or exchange any Bond during a period beginning at the opening of business 15 days before the date of the first mailing of a notice of redemption and ending at the close of business on the day of such mailing or (2) to transfer oe exchange any Bond selected for redemption, if such redemption is to occur within thirty calendar days. Section 2.9: Cancellation. All Bonds paid or redeemed in accordance with this Ordinance, and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and delivered in accordance herewith, shall be cancelled and destroyed upon the making of proper records regarding such payment or redemption. The Registrar shall furnish the City with appropriate certificates of destruction of such Bonds. Section 2.10: Replacement Bonds. Upon the presentation ® and surrender to the Registrar of a mutilated Bond, the Registrar shall authenticate and deliver in exchange therefor a replacement Bond of like maturity, interest rate and prin- cipal amount, bearing a number not contemporaneously out- standing. The City or the Registrar may require the Owner of such Bond to pay a sum suf f icient to cover any tax or other governmental charge that may be imposed in connection there- with and any other expenses connected therewith, including the fees and expenses of the Registrar. If any Bond is lost, apparently destroyed, or wrongfully taken, the City, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall exe- cute and the Registrar shall authenticate and deliver a re- placement Bond of like maturity, interest rate and principal amount, bearing a number not contemporaneously outstanding, provided that the Owner thereof shall have: (a) furnished to the City and the Registrar satisfactory evidence of the ownership of and.the circumstances of the loss, destruction or theft of such Bond; -7- C� (b) furnished such security or indemnity as may be required by the Registrar and the City to save them harmless; (c) paid all expenses and charges in connection therewith, including, but not limited to, printing costs, legal fees, fees of the Registrar and any tax or other governmental charge that may be imposed; and (d) met any other reasonable requirements of the City and the Registrar. If, after the delivery of such replacement Bond, a bona fide purchaser of the original Bond in lieu of which such replacement Bond was issued presents for payment such original Bond, the City and the Registrar shall be entitled to recover such replacement Bond from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the City or the Registrar in connection therewith. If any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or is about to become due and payable, the City in its discretion may, instead of issuing a replacement Bond, authorize the Registrar to pay such Bond. Each replacement Bond delivered in accordance with this Section 2.10 shall be entitled to the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such replacement Bond is delivered. ARTICLE III OPTION OF PRIOR REDEMPTION Section 3.1• the right, at its Bonds maturing on part, on February thereafter at par for redemption to Optional Redemption. The City reserves option, to redeem prior to maturity the or after February 1, 1999, in -whole or in 1, 1998, or on any Interest Payment Date plus accrued interest on the Bonds called the date fixed for redemption. If less -8- than all of the Bonds are redeemed at any time, the Bonds to be redeemed shall be selected by the City. ® Section 3.2: Partial Redemption. Principal amounts may be redeemed only in integral multiples of $5,000. If a Bond subject to redemption is in a denomination larger than $5,000, a portion of such Bond may be redeemed, but only in integral multiples of $5,000. Upon surrender of any Bond for redemption in part, the Registrar, in accordance with Section 2.8 hereof, shall authenticate and deliver in exchange therefor a Bond or Bonds of like maturity and interest rate in an aggregate principal amount equal to the unredeemed portion of the Bond so surrendered. 1� Section 3.3: Notice of Redemption. Notice of any redemption identifying the Bonds to be redeemed in whole or in part shall be given by the Registrar at least thirty days prior to the date fixed for redemption by sending written notice by first class mail to the Owner of each Bond to be redeemed in whole or in part at the address shown on the Register. Such notices shall state the redemption date, the amount of accrued interest payable on the redemption date, the place at which Bonds are to be surrendered for payment and, if less than all Bonds outstanding are to be redeemed, the numbers of the Bonds or portions thereof to be redeemed. Any notice given as provided in this Section 3.3 shall be conclusively presumed to have been duly given, whether or not the Owner receives such notice. By the date fixed for redemption, due provision shall be made with the Registrar for payment of the redemption price of the Bonds or portions thereof to be redeemed. When Bonds have been called for redemption in whole or in part and due provision has been made to redeem same as herein provided, the Bonds or portions thereof so redeemed shall no longer be regarded as out- standing except for the purpose of receiving payment solely from the funds so provided for redemption, and the rights of the Owners to collect interest which would otherwise accrue after the redemption date on any Bond or portion thereof called for redemption shall terminate on the date fixed for redemption. MM CJ �J ARTICLE IV FORM OF BONDS AND CERTIFICATES Section 4.1: Form of Bonds. The Bonds shall be in substantially the following form, with such additions, deletions and variations as may be necessary or desirable and not prohibited by this Ordinance: (Face of Bond) UNITED STATES OF AMERICA STATE OF TEXAS COUNTIES OF HARRIS AND CHAMBERS NUMBER R- REGISTERED INTEREST RATE: REGISTERED OWNER: PRINCIPAL AMOUNT: CITY OF BAYTOWN, TEXAS PUBLIC IMPROVEMENT BOND SERIES 1988 MATURITY DATE: ISSUE DATE: June 1, 1988 DENOMINATION REGISTERED CUSIP: DOLLARS THE CITY OF BAYTOWN, TEXAS (the "City ") promises to pay to the registered owner identified above, or registered assigns, on the date specified above, upon presentation and surrender of. this bond at the corporate trust office of MTrust Corp, National Association, Houston, Texas (the "Registrar "), the principal amount identified above, payable in any coin or currency of the United States of America which on the date of payment of such principal is legal tender for the payment of debts due the United States of America, and to pay interest thereon at the rate shown above, calculated on the basis of a 360 -day year of twelve 30 -day months, from the later of June 1, 1988, or the most recent interest payment -10- a C date to which interest has been paid or duly provided for. Interest on this bond is payable by check payable on February 1, 1989 and semiannually thereafter on each August 1 and February 1, mailed to the registered owner as shown on the books of registration kept by the Registrar as of the 15th calendar day of the month next preceding each interest payment date. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL HAVE THE SAME FORCE AND EFFECT AS IF SET FORTH AT THIS PLACE. IN WITNESS WHEREOF, this bond has been signed with the manual or facsimile signature of the Mayor of the City and countersigned with the manual or facsimile signature of the City Clerk of the City, and the official seal of the City has been duly impressed, or placed in facsimile, on this bond. (AUTHENTICATION CERTIFICATE) (SEAL) CITY OF BAYTOWN, TEXAS Mayor City Clerk (Back Panel of Bond) THIS BOND is one of a duly authorized series of Bonds, aggregating $1,140,000 (the "Bonds ") , issued for the purpose of constructing permanent street improvements for the City, pursuant to an ordinance adopted by the City Council on May 26, 1988 (the "Ordinance "). THE CITY RESERVES THE RIGHT, at its option, to redeem the Bonds maturing on or after February 1, 1999, prior to their scheduled maturities, in whole or in part, in integral multiples of $5,000, on February 1, 1998, or on any interest payment date thereafter at par plus accrued interest on the principal amounts called for redemption to the date fixed for redemption. Reference is made to the Ordinance for complete details concerning the manner of redeeming the Bonds. -11- n NOTICE OF ANY REDEMPTION shall be given at least thirty (30) days prior to the date fixed for redemption by first class mail, addressed -to the registered owners of each Bond ® to be redeemed in whole or in part at the address shown on the books of registration kept by the Registrar. When Bonds or portions thereof have been called for redemption, and due provision has been made to redeem the same, the-principal amounts so redeemed shall be payable solely from the funds provided for redemption, and interest which would otherwise accrue on the amounts called for redemption shall terminate on the date fixed for redemption. THIS BOND IS TRANSFERABLE only upon presentation and surrender at the corporate trust office of the Registrar, duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or his authorized representative, subject to the terms and conditions of the ordinance. THIS BOND IS EXCHANGEABLE at the corporate trust office of the Registrar for bonds in the principal amount of $5,000 or any integral multiple thereof, subject to the terms and ® conditions of the Ordinance. THE REGISTRAR SHALL NOT BE REQUIRED (1) to issue, transfer or exchange any Bond during a period beginning at the opening of business 15 calendar days before the date of the first mailing of a notice of redemption and ending at the close of business on the day of such mailing or (2) to transfer or exchange any Bond selected for redemption, if such redemption is to occur within thirty calendar days. THIS BOND SHALL NOT BE valid or obligatory for any pur- pose or be entitled to any benefit under the Ordinance unless this Bond is either (i) registered by the Comptroller of Public Accounts of the State of Texas by registration cer- tificate attached or affixed hereto or (ii) authenticated by the Registrar by due execution of the authentication certificate endorsed hereon. IT IS HEREBY CERTIFIED, RECITED AND COVENANTED that this Bond has been duly and validly issued and delivered; that all acts, conditions and things required or proper to be performed, to exist and to be done precedent to or in the issuance and delivery of this Bond have been performed, exist ® and have been done in accordance with law; and that annual -12- r� LJ ad valorem taxes, within the limits prescribed by law, sufficient to provide for the payment of the interest on and principal of this Bond, as such interest comes due and such ® principal matures, have been levied and ordered to be levied against all taxable property in the City, and have been pledged irrevocably for such payment. n Section 4.2: Registration of Bonds by State Comp- troller. Bonds No. R -1 through R -14 shall be registered by the Comptroller of Public Accounts of the State of Texas, as provided by law. The registration certificate of the Comp- troller of Public Accounts shall be attached or affixed to Bonds R -1 through R -14 and shall be in substantially the following form: COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I HEREBY CERTIFY that this bond has been examined, cer- tified as to validity, and approved by the Attorney General of'the State of Texas, and that this bond has been registered by the Comptroller of Public Accounts of the State of Texas. WITNESS MY SIGNATURE AND SEAL this xxxxxxxxxx Comptroller of Public Accounts of the State of Texas ( SEAL) Section 4.3: Form of Authentication Certificate. The following form of authentication certificate shall be printed on the'face of each of the Bonds: AUTHENTICATION CERTIFICATE It is hereby certified that this Bond has been delivered pursuant to the Ordinance described in the text of this Bond, in exchange for or in replacement of a Bond, Bonds or a portion of a Bond or Bonds of a Series which was originally approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. -13- MTrust Corp, National Association Houston, Texas BY Authorized Signature Date of Authentication: Section 4.4: Form of Assignment. The following form of assignment shall be printed on the back of each of the Bonds: ASSIGNMENT For value received, the assigns, and transfers unto undersigned hereby sells, (Please print or type name, address, and zip code of Transferree) (Please insert Social Security or Taxpayer Identification Number of Transferee) the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer said bond on the books kept for registration thereof, with full power of substitution in the premises. DATED: Signature Guaranteed: Registered Owner NOTICE: The signature above must correspond to the name of the registered owner as shown NOTICE: Signature must be on the face of this bond in guaranteed by a member firm every particular, without any of the New York Stock alteration, enlargement or Exchange or a commercial change whatsoever. bank or trust company. Section 4.5: Legal Opinion; CUSIP; Bond Insurance. The approving opinion of Vinson & Elkins, Houston, Texas, and CUSIP Numbers may be printed on the Bonds, but errors or omissions in the printing of such opinion or such numbers shall have no effect on the validity of the Bonds. If bond -14- insurance is obtained by the purchaser, the Bonds may bear an appropriate legend as provided by the insurer. 0 ARTICLE V SECURITY AND SOURCE OF PAYMENT FOR BONDS Section 5.1: Interest and Sinking Fund; Tax Levy. The proceeds from all taxes levied, assessed and collected for and on account of the Bonds authorized by this Ordinance shall be deposited, as collected, in_ a special fund to be designated "City of Baytown, Texas, Public Improvement Bonds, Series 1988, Interest and Sinking Fund ". While the Bonds or any part of the principal thereof or interest thereon remain outstanding and unpaid, there is hereby levied and there shall be annually levied, assessed and collected in due time, form and manner, and at the same time as other City taxes are levied, assessed and collected in each year, beginning with the current year, a continuing direct annual ad valorem tax, within the limits prescribed by law, upon all taxable property in the City sufficient to pay the current interest on the Bonds as the same becomes due, and to provide and maintain a sinking fund adequate to pay the principal of the Bonds as such principal matures but never less than two percent (2%) of the original principal amount of the Bonds each year, full allowance being made for delinquencies and costs of collection, and such taxes when collected shall be applied to the payment of the interest on and principal of the Bonds and to no other purpose. In addition, interest accrued from the date of the Bonds until their delivery, and premium if any, is to be deposited in such fund. Section 5.2: Investment of Interest and Sinking Fund. Money in the Interest and Sinking Fund may, at the option of the City, be invested in time deposits or certificates of deposit secured in the manner required by law for public funds, or be invested in direct obligations of, or obliga- tions the principal of and interest on which are uncondition- ally guaranteed by, the United States of America, in obliga- tions of any agencies or instrumentalities of the United States of America or as otherwise permitted by state law; provided that all such deposits and investments shall be made in such manner (which may include repurchase agreements for such investments) that money required to be expended from the ® Interest and Sinking Fund will be available at the proper -15- time or times. All such investments shall be valued in terms of current market value no less frequently than the last business day of the City's Fiscal Year, except that any ® direct obligations of the United States of America - State and Local Government Series shall be continuously valued at their par value or principal face amount. Any obligation in which money is so invested shall be kept and held in an official depository of the City, except as hereinafter provided. For purposes of maximizing investment returns, money in such Interest and Sinking Fund may be invested, together with money in the Construction Fund or with other money of the City, in common investments of the kind described above, or in a common. pool of such investments which shall be kept and held at an official depository of the City, which shall not be deemed to be or constitute a com- mingling of such money or Funds provided that safekeeping receipts or certificates of participation clearly evidencing the investment or investment pool in which such money is invested and the share thereof purchased with such money or owned by such Fund are held by or on behalf of each such Fund. If necessary, such investments shall be promptly sold to prevent any default. All interest and income derived from such deposits and investments of the Interest and Sinking Fund shall be credited to the Interest and Sinking Fund. So long as any Bonds remain outstanding, all unin- vested moneys on deposit in, or credited to, the Interest and Sinking Fund shall be secured by the pledge of security as provided by law for cities in the State of Texas. C ARTICLE VI CONSTRUCTION FUND Section 6.1: Construction Fund. There is hereby created and established a special fund of the City, to be known as the "City of Baytown, Texas, Public Improvement Bonds, Series 1988, Construction Fund ", which shall be maintained as a separate account on the books of the City. Money on deposit in the Construction Fund shall be used only for the purposes set forth in Section 2.1 of this Ordinance, except that interest and income derived from deposit and investment of moneys in the Construction Fund may be utilized as provided below in Section 6.2 hereof. Section 6.2: Investment of Money in Construction Fund. Money on deposit in the Construction Fund may, at the option -16- Ll of the City, be invested as permitted by Texas law; provided that all such deposits and investments shall be made in such ® manner (which may include repurchase agreements for. such investments) that the money required to be expended from the Construction Fund will be available at the proper time or times. All such investments shall be valued in terms of current market value no less frequently than the last business day of the City's Fiscal Year, except that any direct obligations of the United States of America -- State and Local Government Series shall be continuously valued at their par value or principal face amount. Any obligation in which money is so invested shall be kept and held in an official depository of the City, except as hereinafter pro - vided. For purposes of maximizing investment returns, money in the Construction Fund may be invested, together with money in the Interest and Sinking Fund or with other money of the City, in common investments of the kind described above, or in a common pool of such investments which shall be kept and held at an official depository of the City, which shall not be deemed to be or constitute a commingling of such money or Funds provided that safekeeping receipts or certificates of participation clearly evidencing the investment or, in- vestment pool in which such money is invested and the share thereof purchased with such money or owned by the Construc- tion Fund are held by or on behalf of the Construction Fund. All interest and income derived from such deposits and investments shall remain in the Construction Fund, except that (a) to the extent required by law, such interest and income may be applied to make such payments to the United States of America as shall be required to assure that interest on the Bonds is excludable from gross income for federal income tax purposes, and (b) in the discretion of the City, such interest and income may be utilized to pay principal of and interest on the Bonds. ARTICLE VII PROVISIONS CONCERNING SALE AND DISPOSITION OF PROCEEDS OF BONDS Section 7.1: Sale of Bonds. The sale of the Bonds to First Republicbank Dallas, NA (the "Purchaser ") at the price of par plus accrued interest thereon to date of delivery, plus a cash premium of $ -0- ® is hereby authorized, approved, ratified and confirmed, subject to the unqualified approving opinion as to the -17- v v legality of the Bonds of the Attorney General of the State of Texas, and of Vinson & Elkins, Houston, Texas, bond counsel. It is hereby found and declared that the bid of said Pur- chaser is the best obtained by the City for the Bonds pursuant to and after taking public bids for the sale thereof. Section 7.2: Approval Registration and Delivery. After the Bonds to be initially issued shall have been executed, it shall be the duty of the Mayor of the City to deliver the Bonds to be initially issued and all pertinent records and proceedings to the Attorney General of Texas, for examination and approval by the Attorney General. After the Bonds to be initially issued shall have been approved by the Attorney General, they shall be delivered to the Comptroller of Public Accounts of the State of Texas for registration. Upon registration of the Bonds to be initially issued, the Comptroller of Public Accounts (or a deputy lawfully desig- nated in writing to act for the Comptroller) shall manually sign the Comptroller's Registration Certificate prescribed herein to be attached or affixed to the Bonds to be initially issued, and the seal of said Comptroller shall be impressed, or placed in facsimile, thereon. Section 7.3: Tax Exemption. (a) General Tax Covenant. The City intends that the interest on the Bonds shall be excludable from gross income for purposes of federal income taxation pursuant to sections 103 and 141 through 150 of the Code, and applicable regulations. The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that if taken or omitted, respec- tively, would cause the interest on the Bonds to be includ- able in gross income, as defined in section 61 of the Code, of the holders thereof for purposes of federal income taxa- tion. In particular, the City covenants and agrees to comply with each requirement of this Section 7.3; provided, however, that the City shall not be required to comply with any particular requirement of this Section 7.3 if the City has received an opinion of nationally recognized bond counsel ( "Counsel's Opinion ") that such noncompliance will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or if the City has received a Counsel's Opinion to the effect that compli- ance with some other requirement set forth in this Sec- tion 7.3 will satisfy the applicable requirements of the Code, in which case compliance with such other requirement -18- r L.I specified in such Counsel's opinion shall constitute compli- ance with the corresponding requirement specified in this Section 7.3. ® (b) Use of Proceeds. The City covenants and agrees that its use of the Net Proceeds of the Bonds and the Refund- ed Bonds will at all times satisfy the following require- ments: (i) The City has limited and will limit the amount of original or investment proceeds of the Bonds to be used (other than use as a member of the general public) in the trade or business of any person other than a governmental unit to an amount aggregating no more than ten percent of the Net Proceeds of the Bonds ( "private -use proceeds "). For purposes of this Section, the term "person" in- cludes any individual, corporation, partnership, unincorporated association, or any other entity capable of carrying on a trade or business; and the term "trade or business" means, with respect to any natural person, any activity regularly carried on ® for profit and, with respect to persons other than natural persons, any activity other than an activity carried on by a governmental unit. Any use of proceeds of the Bonds and the Refunded Bonds in any manner contrary to the guidelines set forth in Revenue Procedures 82 -14, 1982 -1 C.B. 459, and 82 -15, 1982 -1 C.B. 460, including any revisions or amendments thereto, shall constitute the use of such proceeds in the trade or business of one who is not a governmental unit; E (ii) The City will not permit more than five percent of the Net Proceeds of the Bonds to be used in the trade or business of any person other than a governmental unit if such use is unrelated to the governmental purpose of the Bonds. Further, the amount of private -use proceeds of the Bonds in excess of five percent of the Net Proceeds of , the Bonds ( "excess private -use proceeds ") did not and will not exceed the proceeds of the Bonds expended for the governmental purpose of the Bonds to which such excess private -use proceeds relate; -19- v (iii) The City will not permit an amount of proceeds of the Bonds exceeding the lesser of (a) $5,000,000 or (b) five percent of the Net Proceeds ® of the Bonds to be used, directly or indirectly, to finance loans to persons other than governmental units. When used in this Section 7.3, the term Net Proceeds of the Bonds shall mean the proceeds from the sale of the Bonds, including investment earnings on such proceeds, less accrued interest. (c) No Federal Guaranty. The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that, if taken or omitted, respectively, would cause the'Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Code and applicable regula- tions thereunder, except as permitted by section 149(b)(3) of the Code and such regulations. (d) No- Arbitrage Covenant. The City shall certify, through an authorized officer, employee or agent, that based upon all facts and estimates known or reasonably expected to be in existence on the date the Bonds are delivered, the City will reasonably expect that the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of section 148(a) of the Code and applicable regulations thereunder. Moreover, the City covenants and agrees that it will make such use of the proceeds of the Bonds including interest or other investment income derived from Bond proceeds, regulate investments of proceeds of the Bonds, and take such other and further action as may be required so that the Bonds will not be "arbitrage bonds" within the meaning of section 148(a) of the Code and applicable regulations thereunder. (e) Arbitrage Rebate. The City will take all necessary steps to comply with the requirement that certain amounts earned by the City on the investment of the "gross proceeds" of the Bonds (within the meaning of section 148(f)(6)(B) of the Code), be rebated to the federal government. specifi- cally, the City will (i) maintain records regarding the investment of the gross proceeds of the Bonds as may be required to calculate the amount earned on the investment of the gross proceeds of the Bonds separately from records of ® amounts on deposit in the funds and accounts of the City -20- v allocable to other bond issues of the City or moneys which do not represent gross proceeds of any bonds of the City, (ii) calculate at such times as are required by applicable regu- lations, the amount earned from the investment of the gross proceeds of the Bonds which is required to be rebated to the federal government, and (iii) pay, not less often than every fifth anniversary date of the delivery of the Bonds, all amounts required to be rebated to the federal government. Further, the City will not indirectly pay any amount other- wise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the gross proceeds of the Bonds that might result in a "prohibited payment" within the meaning of Temp. Treas. Reg. §1.103 -15AT. (f) Information Reporting. The City covenants and agrees to file or cause to be filed with the Secretary of the Treasury,. not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Bonds are issued, an information statement concerning the Bonds, all under and in accordance with section 149(e) of the Code and applicable regulations thereunder. ® Section 7.4: Qualified Tax - Exempt Obligations. The City hereby designates the Bonds as qualified tax - exempt obligations" for purposes of section 265(b) of the Code. In connection therewith, the City represents (a) that the ag- gregate amount of tax - exempt obligations issued by the City during calendar year 1988, including the Bonds, which have been designated as "qualified tax - exempt obligations" under section 265(b)(3) of the Code does not exceed $10,000,000, and (b) that the reasonably anticipated amount of tax - exempt obligations which will be issued by the City during calendar year 1988, including the Bonds, will not exceed $10,000,000. For purposes of this section 7.4, the term "tax- exempt obligation" does not include "private activity bonds" within the meaning of section 141 of the Code, other than "qualified 501(c)(3) bonds" within the meaning of section 145 of the Code. In addition, for purposes of this section 7.4, the City includes all governmental units which are "subordinate entities" of the City, within the meaning of section 265(b) of the Code. Section 7.5: Books and Records. So long as any of the ® Bonds are outstanding the City covenants and agrees that it -21- C E E will keep proper books of record and account in which full, true and correct entries will be made of all dealings, activities and transactions relating to the Bonds and the funds created pursuant to this Ordinance, and all books, documents and vouchers relating thereto shall at all reasonable times be made available for inspection upon request of any Owner. ARTICLE VIII MISCELLANEOUS Section 8.1: Official Statement. The City ratifies and confirms its prior approval of the form and content of the Official Statement prepared for initial offering and sale of the Bonds and hereby approves the form and content of any addenda, supplement, or amendment thereto. The use of such Official Statement in the reoffering of the Bonds by the Purchaser is hereby approved and authorized. The proper officials of the City are hereby authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed therein, dated as of the date of payment for and delivery of the Bonds. Section 8.2: Provisions Concerning Registrar. (a) The Registrar, by undertaking the performance of the duties of the Registrar and in consideration of the payment of fees and /or deposits of money pursuant to this Ordinance and a Paying Agent /Registrar Agreement, accepts and agrees to abide by the terms of this Ordinance and such Agreement. The City hereby approves the Paying Agent /Registrar Agreement. (b) The City reserves the right to replace the Regis- trar or its successor at any time on sixty days written notice. If the Registrar is replaced by the City, the new Registrar shall accept the previous Registrar's records and act in the same capacity as the previous Registrar. Any successor Registrar shall be either a national or state banking institution and a corporation organized and doing business under the laws of the United States of America or any State authorized under such laws to exercise trust powers and subject to supervision or examination by Federal or State authority. Section 8.3: Further Proceedings. The Mayor, and the City Clerk and other appropriate officials of the City are -22- C hereby authorized and directed to do any and all things necessary and /or convenient to carry out the terms and purposes of this Ordinance. Section 8.4: Severability. If any Section, paragraph, clause or provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such Section, paragraph, clause or provision shall not affect any of the remaining provisions of this Ordinance. Section 8.5: Open Meeting. It is hereby officially found and determined that the meeting at which this Ordinance is adopted at the time and place held; the meeting at which this Ordinance was adopted was open to the public, and public notice of the time, place and purpose of said meeting was given, all as required by Article 6252 -17, Vernon's Texas Civil Statutes Article, as amended; and that notice as given is hereby authorized, approved, adopted and ratified. Section 8.6: Effect of Ordinance. This Ordinance shall be in force and effect from and after its passage, and it is so ordered. Section 8.7: Repealer. All orders, resolutions and ordinances, or parts thereof, inconsistent herewith are hereby repealed to the extent of such inconsistency. PASSED AND APPROVED this 26th day of May, 1988. ATTEST: City Clerk CITY OF BUTOWN, TEXAS (�;FAL) Z--,- -.-� -.-� - - I ayor CITY OF BAYTOWN, TEXAS -23-