Ordinance No. 6,393ow-
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921022 -1
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF BAYTOWN
GENERAL OBLIGATION AND REFUNDING BONDS, SERIES 1992;
APPROPRIATING THE PROCEEDS OF SALE THEREOF FOR REFUNDING
OUTSTANDING BONDS, WATERWORKS SYSTEM IMPROVEMENTS, A
PUBLIC WORKS MAINTENANCE FACILITY, PUBLIC BUILDINGS,
PARKS, AND STREET IMPROVEMENTS; AUTHORIZING THE ISSUANCE
OF CITY OF BAYTOWN MARINA IMPROVEMENT BONDS, SERIES 1992;
APPROPRIATING $4,190,000 OF THE PROCEEDS OF SALE THEREOF
FOR MARINA IMPROVEMENTS; AND SETTING A HEARING DATE
THE STATE OF TEXAS §
COUNTIES OF HARRIS AND CHAMBERS §
CITY OF BAYTOWN §
WHEREAS, the City of Baytown, Texas (the "City ") has
heretofore issued its General Obligation Refunding Bonds, Series
1985 (the "Outstanding Bonds "); and
WHEREAS, the City desires to refund a portion of the
Outstanding Bonds in advance of their maturities (the "Refunded
Bonds "); and
WHEREAS, Article 717k, Vernon's Texas Civil Statutes, as
amended (the "Act "), authorizes the City to issue refunding bonds
payable from taxes, without an election, for the purpose of
refunding the Refunded Bonds in advance of their maturities, and
to accomplish such refunding by depositing directly with any paying
agent for the Refunded Bonds the proceeds of such refunding bonds,
together with other available funds, in an amount sufficient to
provide for the payment or redemption of the Refunded Bonds, and
provides that such deposit shall constitute the making of firm
banking and financial arrangements for the discharge and final
payment or redemption of the Refunded Bonds; and
WHEREAS, the City desires to authorize the execution of an
escrow agreement and provide for the deposit of proceeds of the
refunding bonds to pay the Refunded Bonds; and
WHEREAS, upon the issuance of the refunding bonds herein
authorized and the deposit of funds referred to above, the Refunded
Bonds shall no longer be regarded as being outstanding, except for
the purpose of being paid pursuant to such deposit, and the
pledges, liens, trusts and all other covenants, provisions, terms,
and conditions of the ordinance authorizing the issuance of the
Refunded Bonds shall be, with respect to the Refunded Bonds,
discharged, terminated and defeased; and
WHEREAS, the Act provides that bonds for other authorized
purposes may be issued in combination with refunding bonds issued
under the Act in accordance with the procedures set out in the Act,
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and further provides that to the extent that the provisions of the
Act are inconsistent with or in conflict with the provisions of
other laws the provisions of the Act are controlling; and
WHEREAS, although the refunding contemplated by this Ordinance
will result in an increase of $10,513,134.06 in the City's debt
service and an increase of $29,957.75 in the present value of such
debt service, the City Council believes that such refunding will
benefit the city by restructuring its debt to provide immediate tax
rate relief for the City and to allow the issuance of authorized
bonds on advantageous terms; and
WHEREAS, the City desires to issue, in combination with such
refunding bonds, as authorized by the Act, $580,000 bonds voted at
an election held within the City on June 9, 1981, and $14,505,000
bonds voted at an election held within the City on May 4, 1991;
Now, Therefore
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN:
1. Recitals: Consideration. It is hereby found and
determined that the matters and facts set out in the preamble to
this Ordinance are true and correct.
It is hereby found and determined that the refunding
contemplated in this Ordinance will benefit the City by
restructuring the debt service payable by the City, to provide
immediate tax relief and allow the issuance of authorized bonds on
advantageous terms, and that such benefits are sufficient
consideration for the refunding of the Refunded Bonds.
2. Definitions. Throughout this Ordinance the following
terms and expressions as used herein shall have the meanings set
forth below:
The term "Acts" shall mean Articles 717k and 823, Vernon's
Texas Civil Statutes, as amended.
The term "AMBAC Indemnity" shall mean AMBAC Indemnity
Corporation, a Wisconsin - domiciled stock insurance company.
The term "Bonds" shall mean the General Obligation Bonds and
the Marina Bonds 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, or a legal holiday.
0 The term "City" shall mean the City of Baytown, Texas.
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The term "Code" shall mean the Internal Revenue Code of 1985,
as amended.
The term "Comptroller" shall mean the Comptroller of Public
Accounts of the State of Texas.
The term "Escrow Agent" shall mean First City, Texas- Houston,
N.A., Houston, Texas.
The term "Escrow Agreement" shall mean the agreement between
the City and the Escrow Agent relating to the escrow of funds to
pay the Refunded Bonds.
The term "General Obligation Bonds" shall mean the City of
Baytown, Texas, General Obligation and Refunding Bonds, Series 1992
authorized in this Ordinance, unless the context clearly indicates
otherwise.
The term "Interest and Sinking Funds" shall mean the interest
and sinking funds for payment of the Bonds established by the City
in Section 19 of this Ordinance.
The term "Interest Payment Date", when used in connection with
any Bond, shall mean February 1, 1993, and each August 1 and
February 1 thereafter until maturity or earlier redemption.
The term "Marina Bonds" shall mean the City of Baytown, Texas,
Marina Improvement Bonds, Series 1992 authorized in this Ordinance,
unless the context clearly indicates otherwise.
The term "Municipal Bond Guaranty Insurance Policy" shall mean
the municipal bond guaranty insurance policy or policies issued by
AMBAC Indemnity insuring the payment when due of the principal of
and interest on the Bonds as provided therein.
The term "Ordinance" as used herein and in the Bonds shall
mean this ordinance authorizing the Bonds.
The term "Owner" shall mean, with respect to each series of
Bonds, any person who shall be the registered owner of any
outstanding Bond of such series.
The term "Paying Agent" shall mean the Registrar.
The term "Record Date" shall mean the fifteenth (15th) day of
the month next preceding each Interest Payment Date.
• The term "Refunded Bonds" shall mean the following bonds of
the City's General Obligation Refunding Bonds, Series 1985, dated
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December 1, 1985, in the aggregate principal amount of $12,125,000,
maturing on February 1:
Year
1993
Principal Amount
$ 220,000
1994
765,000
1995
1,580,000
1996
2,085,000
1997
2,345,000
1998
2,4851000
1999
2,645,000
The term "Registers" shall mean the books of registration kept
by the Registrar for the General Obligation Bonds and for the
Marina Bonds, in which are maintained the names and addresses of,
and the principal amounts of bonds registered to, each Owner.
The term "Registrar" shall mean First City, Texas - Houston,
N.A., Houston, Texas, and its successors in that capacity.
The term "Report" shall mean the report of Ernst & Young,
Certified Public Accountants, verifying the accuracy of certain
mathematical computations relating to the Bonds and the Refunded
Bonds.
The term "Underwriters" shall mean Masterson Moreland Sauer
Whisman, Inc., First Southwest Company, Rauscher Pierce Refsnes,
Inc., Coastal Securities Ltd. and M.E. Allison & Co., Inc.
3. Authorizatign. (a) The General Obligation Bonds shall
be issued, pursuant to the Acts, in fully registered form in the
principal amount of Twenty -Four Million Seven Hundred Thirty
Thousand Dollars ($24,730,000). The estimated maximum costs, the
amount appropriated, and the purposes for which the General
Obligation Bonds are issued are:
$13,835,000 for refunding the Refunded Bonds;
$440,000 for constructing improvements to the City's
waterworks system;
$250,000 for the purchase of land for and construction
of a public works maintenance facility;
$2,760,700 for constructing, improving, and permanently
equipping public buildings;
$650,000 for improving lands for park purposes, including
improvements along Goose Creek stream; and
$6,794,300 for the construction and improvement of City
streets.
• (b) The Marina Bonds shall be issued, pursuant to Article
823, Vernon's Texas Civil Statutes, as amended, in fully registered
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form in the principal amount of Four
Thousand Dollars ($4,190,000), which i s
and the amount appropriated, for the
public marina.
Million One Hundred Ninety
the estimated maximum cost
purpose of constructing a
4. Dgsignation. Date. and Interest Payment Dates. The Bonds
shall be designated as "CITY OF BAYTOWN, TEXAS, GENERAL OBLIGATION
AND REFUNDING BONDS, SERIES 1992„ and "CITY OF BAYTOWN, TEXAS,
MARINA IMPROVEMENT BONDS, SERIES 1992 ", and shall be dated
November 1, 1992. The Bonds shall bear interest at the rates set
forth in Section 5 of this Ordinance from the later of November 1,
1992, or the most recent Interest Payment Date to which such
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, 1993, and semiannually thereafter on August 1 and
February 1 of each year until maturity or prior redemption.
5. Initial Bonds; Numbers and Denominations. The Bonds
shall be initially issued bearing the numbers, in the principal
amounts, and bearing interest at the rates set forth in the
following schedules, 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 schedules. Bonds
delivered on transfer 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 delivered.
Bond
u bgr
Year
Principal
Amount
Interest
Rate__
R- 1
1995
$ 365,000
4.20%
R- 2•
1996
380,000
4.50%
R- 3
1997
400,000
4.90%
R- 4
1998
420,000
5.10%
R- 5
1999
440,000
5.125%
R- 6
2000
485,000
5.375%
R- 7
2001
605,000
5.625%
R- 8
2002
710,000
5.75%
R- 9
2003
840,000
5.80%
R -10
2004
1,390,000
6.00%
R -11
2005
1,475,000
6.125%
R -12
2006
1,470,000
6.20%
R -13
2008
5,225,000
6.40%
R -14
2012
10,525,000
6.40%
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Bond
um gr
Year
Principal
Amount
Interest
Rate
R- 1
1995
$115,000
7.875%
R- 2
1996
125,000
7.875%
R- 3
1997
135,000
7.875%
R- 4
1998
145,000
7.875%
R- 5
1999
1600000
7.875$
R- 6
2000
170,000
7.875$
R- 7
2001
185,000
7.875%
R- 8
2002
200,000
7.875%
R- 9
2003
215,000
6.30%
R -10
2004
230,000
6.50%
R -11
2005
245,000
6.60%
R -12
2006
260,000
6.70%
R -13
2007
280,000
6.70%
R -14
2008
300,000
6.70%
R -15
2009
320,000
6.70%
R -16
2010
345,000
6.75%
R -17
2011
365,000
6.75%
R -18
2012
395,000
6.75%
6. Execution of Bonds: Seal. The Bonds shall be signed by
the Mayor and countersigned by the City Clerk, 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 Bonds, such manual or
facsimile signature shall nevertheless be valid and sufficient for
all purposes as if such officer had remained in such office.
7. ADDroval by Attorney General: Registration by
Comptroller. The Bonds to be initially issued shall be delivered
to the Attorney General of Texas for approval and shall be
registered by the Comptroller. The manually executed registration
certificates of the Comptroller, substantially in the form provided
in Section 17 of this Ordinance, shall be attached or affixed to
the Bonds to be initially issued.
8. Authentication. Except for the Bonds to be initially
issued, which need not be authenticated by the Registrar, only such
Bonds which bear thereon a certificate of authentication,
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substantially in the forms provided in Section 17 of this
Ordinance, manually executed by an authorized representative of the
Registrar, shall be entitled to the benefits of this Ordinance or
shall be valid or obligatory for any purpose. Such duly executed
certificate of authentication shall be conclusive evidence that the
Bonds so authenticated were delivered by the Registrar hereunder.
9. Payment of Principal and Interest. The Registrar is
hereby appointed as the paying agent and registrar 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 respectively become due and
payable, whether at maturity or by prior redemption, at the
principal corporate trust office of the Registrar. The interest
on each Bond shall be payable on each Interest Payment Date, by
check mailed by the Registrar on or before the Interest Payment
Date to the Owner of record as of the Record Date, to the address
of such Owner as shown on the Registers, or by such other method
acceptable to the Registrar, requested by and at the risk and
expense of the Owner.
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 with the same force and effect
as if made on the date payment was originally due.
10. successor Registrars. The City covenants that at all
times while any Bonds are outstanding it will provide a national
or state banking corporation, organized under the laws of the
United States or any State, with trust powers and subject to
supervision or examination by federal or state authority to act as
Registrar for the Bonds. The City reserves the right to change the
Registrar for the Bonds on not less than 60 days written notice to
the Registrar, so long as any such notice is effective not less
than 60 days prior to the next succeeding principal or interest
payment date on the Bonds. Promptly upon the appointment of any
successor Registrar, the previous Registrar shall deliver the
Registers or copies thereof to the new Registrar, and the new
Registrar shall notify each Owner, by United States mail, first
class postage prepaid, of such change and of the address of the new
Registrar. Each Registrar hereunder, by acting in that capacity,
shall be deemed to have agreed to the provisions of this Section.
11. ,Special Record Date. If interest on any Bond is not paid
on any Interest Payment Date and continues unpaid for thirty (30)
days thereafter, the Registrar shall establish a new record date
for the payment of such interest, to be known as a Special Record
Date. The Registrar shall establish a Special Record Date when
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funds to make such interest payment are received from or on behalf
of the City. Such Special Record Date -shall be fifteen (15) days
prior to the date fixed for payment of such past due interest, and
notice of the date of payment and the Special Record Date shall be
sent by United States mail, first class, postage prepaid, not later
than five (5) days prior to the Special Record Date, to each
affected owner of record as of the close of business on the day
prior to the mailing of such notice.
12. 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 of or
interest on such Bond, 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 12 shall be valid and 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.
13. Registration. Transfer. and Exchange. So long as any
Bonds remain outstanding, the Registrar shall keep the Registers
at its principal 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 presentation and
surrender thereof at the principal corporate trust office of the
Registrar, duly endorsed for transfer, or accompanied by an
assignment duly executed by the registered Owner or his 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 three
Business Days after such presentation, a new Bond or Bonds,
registered in the name of the transferee or transferees, in
authorized denominations and of the same series, maturity and
aggregate principal amount and bearing interest at the same rate
as the Bond or Bonds so presented.
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All Bonds shall be exchangeable upon presentation and
surrender thereof at the principal corporate trust office of the
Registrar for a Bond or Bonds of the same series, maturity and
interest rate and in any authorized denomination, in an aggregate
amount equal to the unpaid principal amount of the Bond or Bonds
presented for exchange. The Registrar shall be and is hereby
authorized to authenticate and deliver exchange Bonds in accordance
with the provisions of this Section 13. Each Bond delivered in
accordance with this Section 13 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 governmental
charge that may be imposed in connection with the transfer or
exchange of such Bond. Any fee or charge of the Registrar for such
transfer or exchange shall be paid by the City.
14. Mutilated. Lost, or Stolen 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 series, maturity, interest rate, and principal amount,
bearing a number not contemporaneously outstanding. 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 authorize and the Registrar shall
authenticate and deliver a replacement Bond of like series,
maturity, interest rate and principal amount, bearing a number not
contemporaneously outstanding.
The City or the Registrar may require the Owner of a mutilated
Bond to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith and any other
expenses connected therewith, including the fees and expenses of
the Registrar. The City or the Registrar may require the owner of
a lost, apparently destroyed or wrongfully taken Bond, before any
replacement Bond is issued, to:
(1) furnish to the City and the Registrar satisfactory
evidence of the ownership of and the circumstances
of the loss, destruction or theft of such Bond;
(2) furnish such security or indemnity as may be
required by the Registrar and the City to save them
harmless;
(3) pay all expenses and
therewith, including, but
costs, legal fees, fees
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charges in connection
not limited to, printing
of the Registrar and any
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tax or other governmental charge that may be
imposed; and
(4) meet 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 14 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.
15. Cancellation of Bonds. All Bonds paid 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. The Registrar shall furnish
the City with appropriate certificates of destruction of such
Bonds.
16. Red= tom. The City reserves the right to redeem Bonds
prior to maturity, in whole or from time to time in part, on
February 14 2002, or on any date thereafter at a price of par plus
accrued interest on the Bonds called for redemption to the date
fixed for redemption. If less than all of the Bonds of a series
are redeemed, the particular bonds or portions thereof to be
redeemed shall be selected by the City.
The General Obligation Bonds maturing in the years 2008 and
2012 are also subject to mandatory redemption by lot on the dates,
in the amounts, for the prices, and in the manner set out in the
form of General Obligation Bonds.
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
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only in integral multiples of $5,000. Upon surrender of any Bond
for redemption in part, the Registrar, in accordance with Section
13 hereof, shall authenticate and deliver in exchange therefor a
Bond or Bonds of like series, maturity and interest rate in an
aggregate principal amount equal to the unredeemed portion of the
Bond so surrendered.
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 f irst 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 redemption price, the
place at which Bonds are to be surrendered for payment and, if less
than all Bonds outstanding of a particular maturity of any series
are to be redeemed, the numbers of the Bonds or portions thereof
of such series and maturity to be redeemed. Any notice given as
provided in this Section 16 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, plus accrued interest to the date
fixed for redemption. 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 outstanding 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.
17. Forms. The forms of the Bonds, including the forms of
the Registrar's Authentication Certificate, the forms of
Assignment, forms of insurance -legend, and the forms of
Registration Certificate of the Comptroller, which shall be
attached or affixed to the Bonds initially issued, shall be,
respectively, substantially as follows, with such additions,
deletions and variations as may be necessary or desirable and not
prohibited by this Ordinance:
NUMBER
R-
REGISTERED
United States of America
State of Texas
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DENOMINATION
REGISTERED
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CITY OF BAYTOWN, TEXAS
GENERAL OBLIGATION AND REFUNDING BOND
SERIES 1992
INTEREST RATE:
REGISTERED OWNER:
PRINCIPAL AMOUNT:
MATURITY DATE: ISSUE DATE: CUSIP:
November 1, 1992
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 principal corporate trust office of First City, Texas -
Houston, N.A., 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 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 350 day year of twelve 30 day months, from the later
of November 1, 1992, or the most recent interest payment date to
which interest has been paid or duly provided for. Interest on
this Bond is payable by check on February 1 and August 1, beginning
on February 1, 1993, mailed to the registered owner of record as
of the fifteenth (15th) day of the month next preceding each
interest payment date, or by such other method acceptable to the
Registrar requested by and at the risk and expense of the Owner.
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 and countersigned with the
manual or facsimile signature of the City Clerk, and the official
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seal of the City has been duly impressed, or placed in facsimile,
on this Bond.
(AUTHENTICATION (SEAL) CITY OF BAYTOWN, TEXAS
CERTIFICATE)
Mayor
City Clerk
(Back Panel of Bond)
THIS BOND is one of a duly authorized issue of Bonds,
aggregating $24,730,000 (the "Bonds ") , issued for the purpose of
refunding a portion of the City's outstanding bonds and for the
following purposes:
constructing improvements to the City's waterworks
system;
the purchase of land for and construction of a public
works maintenance facility;
constructing, improving, and permanently equipping public
buildings;
improving lands for park purposes, including improvements
along Goose Creek stream; and
the construction and improvement of City streets,
authorized at elections held in the City on June 9, 1981 and May 4,
1991, and pursuant to an ordinance adopted by the City on
October 22, 1992 (the "Ordinance ").
THE CITY RESERVES THE RIGHT to redeem Bonds maturing on and
after February 1, 2003, in whole or-from time to time in part, in
integral multiples of $5,000, on February 1, 2002, or any date
thereafter- at par and 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.
The Bonds maturing in the years 2008 and 2012 (the "Term
Bonds ") are also subject to mandatory redemption at par plus
accrued interest on the principal amounts redeemed, on the
following dates and in the following amounts:
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REDEMPTION
MATURITY DATE
2008 February 1, 2007
2012 February 1, 2009
February 1, 2010
February 1, 2011
AMOUNT
$2,530,000
$2,870,000
$3,060,000
$3,265,000
On or before January 1 of each year in which Term Bonds are
to be mandatorily redeemed, the Registrar shall select, by lot or
other random method the particular Term Bonds to be mandatorily
redeemed on the following February 1 and give notice of such
redemption.
The principal amount of Term Bonds of each maturity to be
mandatorily redeemed in each year shah be reduced by the principal
amount of Term Bonds of such maturity which have been optionally
redeemed on or before January 1 of such year and which have not
been made the basis for a previous reduction.
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 owner 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 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 principal 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.
THE BONDS ARE EXCHANGEABLE at the principal 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.
THIS BOND shall not be valid or obligatory for any purpose 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 certificate attached or affixed
hereto or (ii) authenticated by the Registrar by due execution of
the authentication certificate endorsed hereon.
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THE REGISTERED OWNER of this Bond, by acceptance hereof,
acknowledges and agrees to be bound by all the terms and conditions
of the Ordinance.
THE CITY has covenanted in the Ordinance that it will at all
times provide a legally qualified registrar for the Bonds and will
cause notice of any change of registrar to be mailed to each
registered owner.
IT IS HEREBY certified, -ecited 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 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.
Form of Registration Certificate
of Comptroller of Public Accounts
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Bond has been examined, certified
as to validity, and approved by the Attorney General of the State
of Texas, and that this Bond has been registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL this
xxxxxxxxxx
(SEAL) Comptroller of Public Accounts
of the State of Texas
Form of Registrar's Authentication Certificate
AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been delivered
pursuant to the Bond Ordinance described in the text of
this Bond.
First City, Texas- Houston, N.A.
0 BY
Authorized Signature
-15-
•
Date of Authentication
II •
ASSIGNMENT
For value received, the undersigned hereby sells, assigns, and
transfers unto
(Please print or type name, address, and zip code of Transferee)
(Please insert Social Security or Taxpayer Identification Number
of Transferee)
the within Bond and all rights thereunder, and hereby irrevocably
constitutes and appoints
attorney to transfer said Bond on the books kept for registration
thereof, with full power of substitution in the premises.
DATED:
Signature Guaranteed:
NOTICE: Signature must be
guaranteed by a member firm
of the New York Stock
Exchange or a commercial
bank or trust company.
Registered Owner
NOTICE: The signature above
must correspond to the name of
the registered owner as shown
on the face of this Bond in
every particular, without any
alteration, enlargement or
change whatsoever.
. 7-W . 1 - i . - 1.
Municipal Bond Guaranty Insurance Policy No. (the
"Policy ") with respect to payments due for principal of and
interest on this bond has been issued by AMBAC Indemnity
Corporation ( "AMBAC Indemnity "). The policy has been delivered to
the United States Trust Company of New York, New York, New York,
as the Insurance Trustee under said Policy and will be held by such
Insurance Trustee or any successor insurance trustee. The policy
is on file and available for inspection at the principal office of
the Insurance Trustee and a copy thereof may be secured from AMBAC
Indemnity or the Insurance Trustee. All payments required to be
made under the Policy shall be made in accordance with the
provisions thereof. The owner of this bond acknowledges and
consents to the subrogation rights of AMBAC Indemnity as more fully
set forth in the Policy.
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is
United States of America
State of Texas
NUMBER DENOMINATION
R- $
REGISTERED REGISTERED
CITY OF BAYTOWN, TEXAS
MARINA IMPROVEMENT BOND
SERIES 1992
INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP:
November 1, 1992
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
The City of Baytown, Texas (the "City") promises to pay to the
registered owner identified above, or registered assigns, on the
date specified above, upon presentation and surrender of this Bond
at the principal corporate trust office of First City, Texas -
Houston, N.A., 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 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 November 1, 1992, or the most recent interest payment date to
which interest has been paid or duly provided for. Interest on
this Bond is payable by check on February 1 and August 1, beginning
on February 1, 1993, mailed to the registered owner of record as
of the fifteenth (15th) day of the month next preceding each
interest payment date, or by such other method acceptable to the
Registrar requested by and at the risk and expense of the Owner.
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 and countersigned with the
manual or facsimile signature of the City Clerk, and the official
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seal of the City has been duly impressed, or placed in facsimile,
on this Bond.
(AUTHENTICATION (SEAL) CITY OF BAYTOWN, TEXAS
CERTIFICATE)
Mayor
City Clerk
(Back Panel of Bond)
THIS BOND is one of a duly authorized issue of Bonds,
aggregating $4,190,000 (the "Bonds "), issued for the purpose of
constructing a public marina, authorized at an election held in
the City on May 4, 1991, and pursuant to an ordinance adopted by
the City on October 22, 1992 (the "Ordinance ").
THE CITY RESERVES THE RIGHT to redeem Bonds maturing on and
after February 1, 2003, in whole or from time to time in part, in
integral multiples of $5,000, on February 1, 2002, or any date
thereafter at par and 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.
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 owner 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 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 principal 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.
THE BONDS ARE EXCHANGEABLE at the principal 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.
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Ll
THIS BOND shall not be valid or obligatory for any purpose 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 certificate attached or affixed
hereto or (ii) authenticated by the Registrar by due execution of
the authentication certificate endorsed hereon.
THE REGISTERED OWNER of this Bond, by acceptance hereof,
acknowledges and agrees to be bound by all the terms and conditions
of the Ordinance.
THE CITY has covenanted in the Ordinance that it will at all
times provide a legally qualified registrar for the Bonds and will
cause notice of any change of registrar to be mailed to each
registered owner.
IT IS HEREBY certified, recited and covenanted that this Bond
has been duly and validly issued and delivered; that all acts,
conditions and things required or proper to be performed, 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 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.
Form of Registration Certificate
of Comptroller of Public Accounts
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Bond has been examined, certified
as to validity, and approved by the-Attorney General of the State
of Texas, and that this Bond has been registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL this
(SEAL)
•
-19•-
xxxxxxxxxx
Comptroller of Public Accounts
of the State of Texas
AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been delivered
pursuant to the Bond Ordinance described in the text of
this Bond.
First City, Texas - Houston, N.A.
By
Authorized Signature
Date of Authentication
ASSIGNMENT
For value received, the undersigned hereby sells, assigns, and
transfers unto
(Please print or type name, address, and zip code of Transferee)
(Please insert Social Security or Taxpayer Identification Number
of Transferee)
the within Bond and all rights thereunder, and hereby irrevocably
constitutes and appoints
attorney to transfer said Bond on the books kept for registration
thereof, with full power of substitution in the premises.
DATED:
Signature Guaranteed:
NOTICE: Signature must be
guaranteed by a member firm
of the New York Stock
Exchange or a commercial
bank or trust company.
Registered Owner
NOTICE: The signature above
must correspond to the name of
the registered owner as shown
on the face of this Bond in
every particular, without any
alteration, enlargement or
change whatsoever.
Municipal Bond Guaranty Insurance Policy No. (the
"Policy ") with respect to payments due for principal of and
interest on this bond has been issued by AMBAC Indemnity
Corporation ( "AMBAC Indemnity "). The policy has been delivered to
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the United States Trust Company of New York, New York, New York,
as the Insurance Trustee under said Policy and will be held by such
Insurance Trustee or any successor insurance trustee. The policy
is on file and available for inspection at the principal office of
the Insurance Trustee and a copy thereof may be secured from AMBAC
Indemnity or the Insurance Trustee. All payments required to be
made under the Policy shall be made in accordance with the
provisions thereof. The owner of this bond acknowledges and
consents to the subrogation rights of AMBAC Indemnity as more fully
set forth in the Policy.
18. Legal Opinions; Cusig Numbers; Bond Insurance. The
approving opinions of Vinson & Elkins L.L.P., Houston, Texas, and
CUSIP Numbers may be printed on the Bonds, but errors or omissions
in the printing of such opinions or such numbers shall have no
effect on the validity of the Bonds.
The purchase of and payment of the premium for municipal bond
insurance by the City, in accordance with the terms of a commitment
for such insurance presented to and hereby approved by the City
Council is hereby authorized. All officials and representatives
of the City are authorized and directed to execute such documents
and to do any and all things necessary or desirable to obtain such
insurance, and the printing on the Bonds of an appropriate legend
regarding such insurance is hereby approved.
19. interest and Sinking Funds: Tax Levy. There are hereby
established separate funds of the City to be known as the City of
Baytown, Texas, General Obligation and Refunding Bonds, Series 1992
Interest and Sinking Fund and City of Baytown, Texas, Marina
Improvement Bonds, Series 1992 Interest and Sinking Fund, which
shall be kept separate and apart from all other funds of the City.
The proceeds from all taxes levied, assessed and collected for and
on account of the General Obligation Bonds and Marina Bonds
authorized by this Ordinance shall be deposited, as collected, into
the respective 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 assessed and collected in due time, form and manner, and
at the same time as other City taxes are assessed, levied 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 for each
series of not less than two percent of the principal amount of the
Bonds of such series or the amount required to pay each installment
of principal of the Bonds. of such series as the same matures,
whichever is greater, full allowance being made for delinquencies
and costs of collection, and said taxes are hereby irrevocably
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pledged to the payment of the interest on and principal of the
Bonds for which they are levied, respectively, and to no other
purpose.
To pay the debt service coming due on the Bonds prior to
receipt of the taxes levied to pay such debt service, there is
hereby appropriated from current funds on hand, which are hereby
certified to be on hand and available for such purpose, an amount
sufficient to pay such debt service, and such amount shall be used
for no other purpose.
20. Further Proceedi=. After the Bonds to be initially
issued have been executed, it shall be the duty of the Mayor and
other appropriate officials and agents of the City to deliver the
Bonds to be initially issued and all pertinent records and
proceedings to the Attorney General of the State of Texas, for
examination and approval. After the Bonds to be initially issued
have been approved by the Attorney General, they shall be delivered
to the Comptroller for registration. Upon registration of the
Bonds to be initially issued, the Comptroller (or the Comptroller's
bond clerk or an assistant bond clerk lawfully designated in
writing to act for the Comptroller) shall manually sign the
Comptroller's Registration Certificates prescribed herein and the
seal of said Comptroller shall be impressed, or placed in
facsimile, thereon.
21. Sale; Bond Purchase Agreement. The Bonds are hereby sold
and shall be delivered to the Underwriters at a price of
$28,348,324.20 plus accrued interest to the date of delivery, in
accordance with the terms of a bond purchase agreement of even date
herewith, presented to and hereby approved by the City Council,
which price and terms are hereby found and determined to be the
most advantageous reasonably obtainable by the City. The Mayor and
other appropriate officials of the City are hereby authorized and
directed to execute such bond purchase agreement on behalf of the
City, and the Mayor and all other officers, agents and
representatives of the City are hereby authorized to do any and
all things necessary or desirable to satisfy the conditions set out
therein and to provide for the issuance and delivery of the Bonds.
22. 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, respectively, would cause the interest on the
Bonds to be includable in gross income, as defined in section 61
of the Code, of the Owners thereof for purposes of federal income
taxation. In particular, the City covenants and agrees to comply
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•
with each requirement of this Section 22; provided, however, that
the City shall not be required to comply with any particular
requirement of this Section 22 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 compliance with some other requirement set forth in this
Section 22 will satisfy the applicable requirements of the Code,
in which case compliance with such other requirement specified in
such Counsel's Opinion shall constitute compliance with the
corresponding requirement specified in this Section 22.
(b) Use of Proceeds. The City covenants and agrees that its
use of the Net Proceeds of the Bonds and the Refunded Bonds will
at all times satisfy the following requirements:
(i) The City will use all of the Net Proceeds of
the Bonds to (A) acquire Escrowed Securities
(as hereinafter defined) sufficient to pay the
principal of and interest on the Refunded
Bonds, (B) for the purpose of constructing
various permanent improvements in the City (the
"New Money Portion of the Bonds "), and (C) to
pay the costs of issuing the Bonds, except for
amounts, if any, described in the Report as the
rounding amount and the ending cash balance in
the Escrow Fund (as hereinafter defined). The
City has limited and will limit the amount of
original or investment proceeds of the Refunded
Bonds and the New Money Portion 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 Refunded Bonds and the
New Money Portion of the Bonds, respectively
( "private -use proceeds "). For purposes of this
Section, the term "person" includes any
individual, corporation, partnership,
unincorporated association, or any other entity
capable of carrying on a trade or business; and
the term "trade or business" means, with
respect to any natural person, any activity
regularly carried on for profit and, with
respect to persons other than natural persons,
any activity other than an activity carried on
by a governmental unit. Any use of proceeds
• of the Refunded Bonds or the Bonds in any
manner contrary to the guidelines set forth in
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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;
(ii) The City has not permitted and will not permit
more than five percent of the Net Proceeds of
the Refunded Bonds or the New Money Portion 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 such Refunded Bonds or the New Money
Portion of the Bonds. Further, the amount of
private -use proceeds of the Refunded Bonds or
the New Money Portion of the Bonds in excess
of five percent of the Net Proceeds of the
Refunded Bonds or the New Money Portion of the
Bonds ( "excess private -use proceeds ") did not
and will not exceed the proceeds of the
Refunded Bonds or the New Money Portion of the
Bonds expended for the governmental purpose of
the Refunded Bonds or the New Money Portion of
the Bonds to which such excess private -use
proceeds relate;
(iii) The City has not permitted and will not permit
an amount of proceeds of the Refunded Bonds or
the New Money Portion of the Bonds exceeding
the lesser of (a) $5,000,000 or (b) five
percent of the Net Proceeds of the Refunded
Bonds or the New Money Portion of the Bonds to
be used, directly or indirectly, to finance
loans to persons other than governmental units.
When used in this Section 22, the term Net Proceeds of the Bonds
and the Refunded Bonds shall mean the proceeds from the sale of
each issue of the Bonds and the Refunded Bonds, respectively,
including investment earnings on the proceeds of such issue, less
accrued interest with respect to such issue.
(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 regulations thereunder, except
as permitted by section 149(b) (3) of the Code and such regulations.
• (d) Bonds are not Hedge Bonds. The City covenants and agrees
that not more than 50 percent of the New Money Portion of the Bonds
-24-
•
a-
will be invested in nonpurpose investments (as defined in section
148(f)(6)(A) of the Code) having a substantially guaranteed yield
for four years or more within the meaning of section
149 (g) (3) (A) (ii) of the Code, and the City reasonably expects that
at least 85 percent of the spendable proceeds of the New Money
Portion of the Bonds will be used to carry out the governmental
purposes of the Bonds within the three -year period beginning on the
date the Bonds are issued. Furthermore, the City represents that
not more than 50 percent of the proceeds of the Refunded Bonds
(including any issue of bonds refunded by the Refunded Bonds) was
invested in nonpurpose investments (as defined in section
148(f)(6)(A) of the Code) having a substantially guaranteed yield
for four years or more within the meaning of section
149(g)(3)(A)(ii) of the Code, and the City reasonably expected at
the time the Refunded Bonds (including any issue of bonds refunded
by the Refunded Bonds) was issued that at least 85 percent of the
spendable proceeds of such issue would be used to carry out the
governmental purposes of --sch issues within the corresponding
three -year period beginning on the date of issue of such Refunded
Bonds.
(e) 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.
(f) 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. Specifically, 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 allocable
to other obligations of the City or moneys which do not represent
gross proceeds of any obligations of the City, (ii) calculate at
such times as are required by applicable regulations, 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,
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not less often than every fifth anniversary date of the delivery
of the Bonds or on such other dates as may be permitted by
applicable regulations, all amounts required to be rebated to the
federal government. Further, the City will not indirectly pay any
amount otherwise payable to the federal government pursuant to the
foregoing requirements to any person other than the federal
government by entering into any investment arrangement with respect
to the gross proceeds of the Bonds that might result in a reduction
in the amount required to be paid to the federal government because
such arrangement results in a smaller profit or larger loss than
would have resulted if the arrangement had been at arm's length and
had the yield on the issue not been relevant to either party.
(g) 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.
24. Payment Pursuant to Municipal Bond Guaranty Insurance
Policy. As long as the Municipal Bond Guaranty Insurance Policy
shall be in full force and effect, the City and the Registrar agree
to comply with the following provisions:
(a) if payment of principal or interest due on the Bonds has
not been made to the Registrar, the Registrar or any Owner to whom
such payment is due, shall so notify AMBAC Indemnity by telephonic
or telegraphic notice, subsequently confirmed in writing, or
written notice by registered or certified mail. Such notice shall
specify the amount of the anticipated deficiency, the Bonds to
which such deficiency is applicable and whether such Bonds will be
deficient as to principal or interest, or both. AMBAC Indemnity,
on the later of the date due for payment or within one Business Day
after receipt of notice of nonpayment, will deposit sufficient
moneys with United States Trust Company of New York, as insurance
trustee for AMBAC Indemnity or any successor insurance trustee (the
"Insurance Trustee").
(b) the Registrar shall, after giving notice to AMBAC
Indemnity as provided in (a) above, make available to AMBAC
Indemnity and, at AMBAC Indemnity's direction, to the Insurance
Trustee, the Bond Register and all records relating to the Funds
and Accounts maintained under this Ordinance.
(c) the Registrar shall provide AMBAC Indemnity and the
Insurance Trustee with a list of registered Owners of Bonds
• entitled to receive principal or interest payments from AMBAC
Indemnity under the terms of the Municipal Bond Guaranty Insurance
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Policy, and shall make arrangements with the Insurance Trustee (i)
to mail checks or drafts to the registered Owners of Bonds entitled
to receive full or partial interest payments from AMBAC Indemnity
and (ii) to pay principal upon Bonds surrendered to the Insurance
Trustee by the registered Owners of Bonds entitled to receive full
or partial principal payments from AMBAC Indemnity.
(d) the Registrar shall, at the time it provides notice to
AMBAC Indemnity pursuant to (a) above, notify registered Owners of
Bonds entitled to receive the payment of principal or interest
thereon from AMBAC Indemnity (i) as to the fact of such
entitlement, (ii) that AMBAC Indemnity will remit to them all or
a part of the interest payments next coming due, (iii) that should
they be entitled to receive full payment of principal from AMBAC
Indemnity, they must present and surrender their Bonds together
with any appropriate instrument of assignment for payment to the
Insurance Trustee, and not the Registrar and (iv) that should they
be entitled to receive partial payment of principal from AMBAC
Indemnity, they must present and surrender their Bonds for payment
thereon first to the Registrar, who shall note on such Bonds the
portion of the principal paid by the Registrar, and then, along
with an appropriate instrument of assignment, to the Insurance
Trustee, which will then pay the unpaid portion of principal. The
Insurance Trustee shall disburse to registered Owners of Bonds or
the Registrar, the payment due less any amount held by the
Registrar for payment of principal of or interest on Bonds and
legally available therefor.
(e) in the event that the Registrar has notice that any
payment of principal of or interest on a Bond which has become due
for payment and which is made to a Bond Owner by and on behalf of
the City has been deemed a preferential transfer and theretofore
recovered from its registered Owner pursuant to the United States
Bankruptcy Code by a trustee in bankruptcy in accordance with the
final, nonappealable order of -a court having competent
jurisdiction, the Registrar shall, at the time AMBAC Indemnity is
notified pursuant to (a) above, notify all registered Owners that
in the event that any registered Owner's payment is so recovered,
such registered Owner will be entitled to payment from AMBAC
Indemnity to the extent of such recovery if sufficient funds are
not otherwise available, and the Registrar shall furnish to AMBAC
Indemnity its records evidencing the payments of principal of and
interest on the Bonds which have been made by the Registrar and
subsequently recovered from registered Owners and the dates on
which such payments were made.
(f) in addition to those rights granted AMBAC Indemnity under
this Ordinance, AMBAC Indemnity shall, upon remittance and transfer
of Bonds and appropriate instruments of assignment, become the
Owner thereof, and to evidence such ownership (i) in the case of
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C
claims for past due interest, the Registrar shall note AMBAC
Indemnity's rights as Owner on the Register upon receipt from AMBAC
Indemnity of proof of the payment of interest thereon to the
registered Owners of the Bonds and (ii) in the case of claims for
past due principal, the Registrar shall note AMBAC Indemnity's
rights as Owner on the Register upon surrender of the Bonds by the
registered Owners thereof together with proof of the payment of
principal thereof.
24. AMBAC Consent. Any provision of this ordinance expressly
recognizing or granting rights in or to AMBAC Indemnity may not be
amended in any manner which affects the rights of AMBAC Indemnity
hereunder without the prior written consent of AMBAC Indemnity.
25. AMBAC Subrogation. In the event that the principal
and /or interest due on the Bonds shall be paid by AMBAC Indemnity
pursuant to the Municipal Bond Guaranty Insurance Policy, the Bonds
shall remain outstanding for all purposes, not be defeased or
otherwise satisfied and not be considered paid by the City and all
covenants, agreements and other obligations of the City to the
Owners shall continue to exist and shall run to the benefit of
AMBAC Indemnity, and AMBAC Indemnity shall be subrogated to the
rights of such Owners.
26. Notices to be Given to AMBAC Indemnity. While the
Municipal Bond Guaranty Insurance Policy is in effect, the City
shall furnish to AMBAC Indemnity:
(a) as soon as practicable
of any financial statement of the
annual report of the City.
after the filing thereof, a copy
City and a copy of any audit and
(b) a copy of any notice to be given to the Owners of the
Bonds, including, without limitation, notice of any redemption or
defeasance of Bonds, and any certificate rendered pursuant to this
Ordinance relating to the security for the Bonds; and
(c) such additional information it may reasonably request.
The City will permit AMBAC Indemnity to discuss the affairs,
finances and accounts of the City or any information AMBAC
Indemnity may reasonably request regarding the security for the
Bonds with appropriate officers of the City. The City will permit
AMBAC Indemnity to have access to and to make copies of all books
and records relating to the Bonds at any reasonable time.
27. parties. Nothing herein expressed or implied is intended
or shall be construed to confer upon, or to give to, any person or
entity other than the City, AMBAC Indemnity, the Registrar, and the
Owners of the Bonds, any right, remedy or claim under or by reason
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of this ordinance or any covenant, condition or stipulation hereof,
and all such covenants, stipulations, promises and agreements
herein by the City shall be for the sole and exclusive benefit of
the City, AMBAC Indemnity, the Registrar, and the Owners of the
Bonds.
28. Use of Proceeds. Proceeds from the sale of the Bonds
shall, promptly upon receipt by the City, be applied as follows:
(a) Accrued interest for each series shall be deposited
into the Interest and Sinking Fund for such series and
invested only in direct obligations of the United States
of America.
(b) $10,895,000 from the proceeds of the General
Obligation Bonds shall be used for the following
purposes:
constructing improvements to the City's waterworks
system;
the purchase of land for and construction of
a public works maintenance facility;
constructing, improving, and permanently
equipping public buildings;
improving lands for park purposes, including
improvements along Goose Creek stream; and
the construction and improvement of City
streets.
Earnings on such investments may be transferred to the
General Obligation and Refunding Bonds Interest and
Sinking Fund.
(c) $4,190,000 from the proceeds of the Marina Bonds
shall be used for the purpose of constructing a public
marina.
Earnings on such investments may be transferred to the
Marina Improvement Bonds Interest and Sinking Fund.
(d) The balance of the proceeds from the sale of the
Bonds shall be applied to establish an escrow fund to
refund the Refunded Bonds, as more fully provided below,
and, to the extent not otherwise provided for, to pay all
expenses arising in connection with the issuance of the
Bonds, the establishment of such escrow fund and the
refunding of the Refunded Bonds. Any proceeds of the
Bonds remaining after making all such deposits and
payments shall be deposited into the General Obligation
and Refunding Bond Interest and Sinking Fund.
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1�1
29. Escrow Agreement. The discharge and defeasance of the
Refunded Bonds shall be effectuated pursuant to the terms and
provisions of an Escrow Agreement to be entered into by and between
the City and First City, Texas - Houston, N.A., Houston, Texas, as
Escrow Agent, which shall be substantially in the form attached
hereto as Exhibit A, the terms and provisions of which are hereby
approved, subject to such insertions, additions and modifications
as shall be necessary (a) to carry out the program designed for the
City by the Underwriters, and which shall be certified as to
mathematical accuracy by Ernst & Young, Certified Public
Accountants, whose Report shall be attached to the Escrow Agreement
(b) to maximize the City's present value savings and /or to minimize
the City's costs of refunding, (c) to comply with all applicable
laws and regulations relating to the refunding of the Refunded
Bonds and (d) to carry out the other intents and purposes of this
Ordinance, and the Mayor or Mayor Pro Tem is hereby authorized to
execute and deliver such Escrow Agreement on behalf of the City in
multiple counterparts and the City Clerk or an Assistant City Clerk
is hereby authorized to attest thereto and affix the City's seal.
30. Redemption of Refunded Bonds. The City hereby
irrevocably calls the following bonds of the City for redemption
prior to maturity on the date shown below, at a price of par plus
accrued interest to the date fixed for redemption, and authorizes
and directs the Paying Agent for such bonds to select the
particular bonds to be redeemed and to give notice of such
redemption in accordance with the ordinance authorizing the
issuance of such bonds:
31. Purchase of United States Treasury Obligations. To
assure the purchase of the Escrowed Securities referred to in the
Escrow Agreement, the Mayor or Mayor Pro Tem, the Director of
Finance, and the Escrow Agent are hereby authorized to subscribe
for, agree to purchase, and purchase non - callable obligations of
the United States of America, in such amounts and maturities and
bearing interest at such rates as may be provided for in the
Report, and to execute any and all subscriptions, purchase
agreements, commitments, letters of authorization and other
documents necessary to effectuate the foregoing, and any actions
heretofore taken for such purpose are hereby ratified and approved.
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Redemption
Issue Maturity
Amount
Date
General Obl. 1995
$10580,000
February 1,
1994
Refunding Bonds, 1996
2,085,000
February 1,
1994
Series 1985 1997
2345,000
February 1,
1994
1998
2,485,000
February 1,
1994
1999
2,645,000
February 1,
1994
31. Purchase of United States Treasury Obligations. To
assure the purchase of the Escrowed Securities referred to in the
Escrow Agreement, the Mayor or Mayor Pro Tem, the Director of
Finance, and the Escrow Agent are hereby authorized to subscribe
for, agree to purchase, and purchase non - callable obligations of
the United States of America, in such amounts and maturities and
bearing interest at such rates as may be provided for in the
Report, and to execute any and all subscriptions, purchase
agreements, commitments, letters of authorization and other
documents necessary to effectuate the foregoing, and any actions
heretofore taken for such purpose are hereby ratified and approved.
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1�1
32. Related Matters. To satisfy in a timely manner all of
the City's obligations under this Ordinance, the bond purchase
agreement, and the Escrow Agreement, the Mayor or Mayor Pro Tem,
the Director of Finance, the City Clerk or an Assistant City Clerk,
and all other appropriate officers and agents of the City are
hereby authorized and directed to take all other actions that are
reasonably necessary to provide for the refunding of the Refunded
Bonds, including, without limitation, executing and delivering on
behalf of the City all Bonds, consents, receipts, requests, and
other documents as may be reasonably necessary to satisfy the
City's obligations under the Escrow Agreement, the Bond Purchase
Agreement, and this Ordinance and to direct the application of
funds of the City consistent with the provisions of such Escrow
Agreement and this Ordinance.
33. Registrar. The forms of agreements setting forth the
duties of the Registrar are hereby approved, and the appropriate
officials of the City are hereby authorized to execute such
agreements for and on behalf of the City.
34. official Statement. The City Council ratifies and
confirms its prior approval of the form and content of the
Preliminary Official Statement prepared in the initial offering and
sale of the Bonds and hereby authorizes the preparation of a final
Official Statement reflecting the terms of the bond purchase
agreement with the Underwriters and other relevant matters. The
use of such Official Statement in the reoffering of the Bonds by
the Underwriters 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.
35. No Personal Liability. No recourse shall be had for
payment of the principal of or interest on any Bonds or for any
claim based thereon, or on this Ordinance, against any official or
employee of the City or any person executing any Bonds.
36. Public Hearing. To comply with the provisions of the
Code, there shall be given, as required by the Code, notice of a
public hearing to be conducted at 6:45 p.m. on November 12, 1992,
in the Council Chambers, 2401 Market Street, Baytown, Texas, with
respect to the Marina Bonds. The Mayor is hereby designated as
Hearing Officer and appointed to conduct such public hearing.
37. Ouen Meeting. It is hereby officially found and
determined that the meeting at which this Ordinance was adopted
was open to the public, and that public notice of the time, place
and purpose of said meeting was given, all as required by Article
6252 -17, Vernon's Texas Civil Statutes, as amended.
-31-
•
PASSED AND APPROVED this 22nd day of October, 1992.
ATTEST:
?I "X-'e
C _ty Clerk
CITY OF BAYTOWN, TEXAS
(SEhL)
-32-
/ X�26A
Mayor
CITY F YTOWN, TEXAS
•
EXHIBIT A
ESCROW A0ZEMENT
THIS ESCROW AGREEMENT (the "Escrow Agreement ") dated for
convenience October 22, 1992, but effective on the Escrow Funding
Date described herein, is made and entered into by and between the
City of Baytown, Texas, an incorporated city of the State of Texas
(the "City "), and First City, Texas- Houston, N.A., Houston Texas
(the "Escrow Agent ").
WHEREAS, the City has heretofore issued and there remain
outstanding the City's General Obligation Refunding Bonds, Series
1985, dated December 1, 1985 (the "Outstanding Bonds "); and
WHEREAS, the City desires to refund in advance of maturity
a portion of such Outstanding Bonds in the aggregate principal
amount of $12,125,000 (the "Refunded Bonds "); and
WHEREAS, Article 717k, Vernon's Texas Civil Statutes, as
amended, authorizes and empowers the City to issue, sell and
deliver refunding bonds payable from ad valorem taxes and to
deposit the proceeds of such bonds, together with other funds, with
a place of payment for the Refunded Bonds in an amount which is
sufficient to provide for the payment or redemption of the
principal of and interest on the Refunded Bonds; and
WHEREAS, the City Council of the City has adopted an ordinance
authorizing the issuance of the City's General Obligation and
Refunding Bonds, Series 1992, in the aggregate principal amount of
$24,730,000 (the "Refunding Bonds ") , for the purpose, among others,
of providing the funds necessary to refund the Refunded Bonds; and
WHEREAS, the City Council of the City has further determined
to effectuate the advance refunding of the Refunded Bonds pursuant
to this Escrow Agreement, under which provision is made for the
safekeeping, investment, reinvestment, administration and
disposition of the proceeds of the Refunding Bonds, so as to
provide firm banking and financial arrangements for the discharge
and final payment or redemption of the Refunded Bonds;
NOW, THEREFORE, in consideration of the mutual undertakings,
promises and agreements herein contained, and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and in order to secure the full and timely
payment of the principal of and the interest on the Refunded Bonds,
the City and the Escrow Agent agree as follows:
•
0
C�
Year Principal Amount
1993
$ 220,000
1994
765,000
1995
1,580,000
1996
2,085,000
1997
2,345,000
1998
2,485,000
1999
2,645,000
"Refunding Bonds" shall mean the City's General obligation and
Refunding Bonds, Series 1992, dated November 1, 1992, in the
initial aggregate principal amount of $24,730,000.
"Refunding Bond Ordinance" shall mean the City's Ordinance
adopted October 22, 1992, authorizing the issuance, sale and
delivery of the Refunding Bonds.
"Report" shall mean the verification report prepared by Ernst
& Young relating to the advance refunding of the Refunded Bonds,
a copy of which is attached hereto as Exhibit A, and any subsequent
report required by Section 5.02.
Section 1.02. Interpretations. The titles and headings of
the articles and sections of this Escrow Agreement have been
inserted for convenience of reference only and are not to be
considered a part hereof and shall not in any w
restrict the terms hereof. This Escrow Agreement a
terms and provisions hereof shall be liberally
effectuate the purposes set forth herein and to
intended purpose of providing for the refunding of
Bonds in accordance with applicable law.
ARTICLE II
+ i• .. • all + z_Z I + ' • + •�J�
3y modify or
id all of the
construed to
achieve the
the Refunded
Section 2.01. Deposits with Escrow Agent: Accruisition of
Escrowed Securities. On the Escrow Funding Date the City will
deposit, or cause to be deposited, with the Escrow Agent the
following:
(a) Escrowed Securities in the principal amount of
$ ; and
(b) A beginning cash balance of $
-3-
ARTICLE I
• •`
Section_ 1.01. 12efinitions. Unless otherwise expressly
provided or unless the context clearly requires otherwise, the
following terms shall have the respective meanings specified below
for all purposes of this Escrow Agreement:
"City" shall mean the City of Baytown, Texas, and any
successor to its duties and functions.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and the applicable regulations thereunder and under the
Internal Revenue Code of 1954.
"Escrow Agent" shall mean First City, Texas - Houston, N.A.,
Houston, Texas, in its capacity as escrow agent hereunder, and any
successor or assign in such capacity.
"Escrow Agreement" shall mean this escrow agreement by and
between the City and the Escrow Agent.
"Escrow Fund" shall mean the fund created in Section 3.01 of
this Escrow Agreement to be administered by the Escrow Agent
pursuant to the provisions of this Escrow Agreement.
"Escrow Funding Date" shall mean the date on which the City
deposits with the Escrow Agent the cash and Escrowed Securities
described in Section 2.01.
"Escrowed Securities" shall mean the direct non - callable
obligations of or direct, non- callable, non - prepayable obligations
the principal of and interest on which are unconditionally
guaranteed by, the United States of America, payable to the City
for deposit into the Escrow Fund and initially purchased with
proceeds of the Refunding Bonds and other funds, all as more fully
described in the Report.
"Paying Agent for the Refunded Bonds" shall mean First City,
Texas - Houston, N.A., Houston, Texas (formerly First City National
Bank of Houston, Houston, Texas).
"Refunded Bond Ordinance" shall mean the City's ordinance
authorizing the issuance, sale and delivery of the Refunded Bonds.
"Refunded Bonds" shall mean the following bonds of the City's
General Obligation Refunding Bonds, Series 1985, dated December 1,
1985, in the aggregate principal amount of $12,125,000, maturing
•
on February 1:
-2-
ARTICLE III
oil 0
Section 3.01. Escrow Fund. On the Escrow Funding Date the
Escrow Agent will create on its books a special fund and
irrevocable escrow to be known as the City of Baytown, Texas,
General Obligation and Refunding Bonds, Series 1992 Escrow Fund,
into which will be deposited the cash and Escrowed Securities
described in Section 2.01. The Escrowed Securities, all proceeds
therefrom and all cash balances from time to time on deposit in the
Escrow Fund shall be the property of the Escrow Fund, and shall be
applied only in strict conformity with the terms and conditions
hereof. The Escrowed Securities, all proceeds therefrom and all
cash balances from time to time on deposit in the Escrow Fund are
hereby irrevocably pledged to the payment of the principal of and
interest on the Refunded Bonds, which payment shall be made by
timely transfers to the Paying Agent for the Refunded Bonds of such
amounts at such times as are provided in Section 3.02 hereof. When
the final transfers have been made to the Paying Agent for the
Refunded Bonds for the payment of such principal of and interest
on the Refunded Bonds, any balance then remaining in the Escrow
Fund shall be transferred to the City, and the Escrow Agent shall
thereupon be discharged from any further duties hereunder.
Section 3.02. ],avment of Principal of and Interest on
Refunded Bonds. (a) The Escrow Agent is hereby irrevocably
instructed to transfer to the Paying Agent for the Refunded Bonds
from the cash balance from time to time on deposit in the Escrow
Fund the amounts required to pay the principal of and interest on
the Refunded Bonds as the same become due and payable, all as
provided in the Report.
(b) Money transferred to and held by the Paying Agent for the
Refunded Bonds in accordance with the provisions hereof shall be
held by the Paying Agent for the Refunded Bonds as a separate trust
fund for the account of the respective Owners of the Refunded Bonds
in connection with which such money is held; provided, however,
that money so held remaining unclaimed by the Owners of such
Refunded Bonds for three ( 3 ) years after the dates on which payment
thereon was due, shall be reported and disposed of in accordance
with the provisions of Texas law including, to the extent
applicable, Title b of the Texas Property Code, as amended.
Section 3.03. ,gpfficiency of Escrow Fund. The City
represents (based solely upon the Report) that the successive
receipts of the principal of and interest on the Escrowed
Securities will assure that the cash balance on deposit from time
• to time in the Escrow Fund will be at all times sufficient to
provide money for transfer to the Paying Agent for the Refunded
-4-
•
Bonds at the times and in the amounts required to pay the interest
on the Refunded Bonds as such interest comes due and to pay the
principal of the Refunded Bonds as the Refunded Bonds mature or are
redeemed. If any deficiency results from any error in the
calculations set forth in the Report, the City shall transfer to
the Escrow Agent for deposit to the Escrow Fund to be held pursuant
to this Escrow Agreement an additional amount of cash or securities
sufficient to provide for such deficiency.
Section-3.04. Escrow Fund. The Escrow Agent at all times
shall hold the Escrow Fund, the Escrowed Securities and all other
assets of the Escrow Fund wholly segregated from all other funds
and securities on deposit with the Escrow Agent; it shall never
allow the Escrowed Securities or any other assets of the Escrow
Fund to be commingled with any other funds or securities of the
Escrow Agent; and it shall hold and dispose of the assets of the
Escrow Fund only as set forth herein. The Escrowed Securities and
other assets of the Escrow Fund always shall be maintained by the
Escrow Agent for the benefit of the Owners of the Refunded Bonds;
and a special account therefor evidencing such fact shall be
maintained at all times on the books of the Escrow Agent. The
Owners of the Refunded Bonds shall be entitled to the same
preferred claim and first lien upon the Escrowed Securities, the
proceeds thereof and all other assets of the Escrow Fund as are
enjoyed by other beneficiaries of similar accounts. The amounts
received by the Escrow Agent under this Escrow Agreement shall not
be considered as a banking deposit by the City, and the Escrow
Agent shall have no right or title with respect thereto except as
escrow agent under the terms hereof. The amounts received by the
Escrow Agent hereunder shall not be subject to warrants, drafts or
checks drawn by the City.
Section 3,05. Security for Cash Balances. Cash balances from
time to time on deposit in the Escrow Fund, to the extent not
insured by the Federal Deposit Insurance Corporation or its
successor, shall be continuously secured by a pledge of direct
obligations of, or obligations unconditionally guaranteed by, the
United States of America, having a market value at least equal to
such cash balances.
ARTICLE IV
Section 4.01. Optional Redemption. The City has irrevocably
called the following bonds of the City for redemption prior to
maturity on the date shown below, at a price of par plus accrued
• interest to the date fixed for redemption, and authorized and
directed the Paying Agent for such bonds to select the particular
-5-
u
bonds to be redeemed and to give notice of such redemption in
accordance with the ordinance authorizing the issuance of such
bonds:
Issue Maturity
Amount
Redemption
Date
General Obl. 1995
$1,580,000
February 1,
1994
Refunding Bonds, 1996
2,085,000
February 1,
1994
Series 1985 1997
21345,000
February 1,
1994
1998
21485,000
February 1,
1994
1999
2,645,000
February 1,
1994
ARTICLE V
Section 5.01. General. Except as herein otherwise expressly
provided, the Escrow Agent shall not have any power or duty to
invest any money held hereunder; or to make substitutions of the
Escrowed Securities; or to sell, transfer or otherwise dispose of
the Escrowed Securities.
Section 5.02. Substitution of Securities. At the written
request of the City, and upon compliance with the conditions
hereinafter stated, the Escrow Agent shall sell, transfer,
otherwise dispose of or request the redemption of all or any
portion of the Escrowed Securities and apply the proceeds therefrom
to purchase Refunded Bonds or direct, non - callable obligations of,
or direct, non - callable, non - prepayable obligations the principal
of and interest on which are unconditionally guaranteed for full
and timely payment by, the United States of America and which do
not permit the redemption thereof at the option of the obligor.
Any such transaction may be effected by the Escrow Agent only if
(1) the Escrow Agent shall have received a written opinion from a
nationally recognized firm of independent certified public
accountants acceptable to the City and the Escrow Agent that such
transaction will not cause the amount of money and securities in
the Escrow Fund to be reduced below an amount which will be
sufficient, when added to the interest to accrue thereon, to
provide for the payment of principal and interest on the remaining
Refunded Bonds as they become due, and (2) the Escrow Agent shall
have received the unqualified written legal opinion of nationally
recognized bond counsel or tax counsel acceptable to the City and
the Escrow Agent to the effect that (i) such transaction will not
cause any of the Refunding Bonds to be an "arbitrage bond" within
the meaning of the Code, and (ii) that such transaction complies
with the Constitution and laws of the State of Texas and with all
. relevant documents relating to the issuance of the Refunded Bonds
and the Refunding Bonds.
-"6-
•
ARTICLE VI
Section 6.01. Recgrds. The Escrow Agent shall 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 Escrowed Securities
deposited to the Escrow Fund and all proceeds thereof, and such
books shall be available for inspection at reasonable hours and
under reasonable conditions by the City and the Owners of the
Refunded Bonds.
Section 6.02. Revorts. For the period beginning on the
Escrow Funding Date and ending on February 1, 1993, and for each
twelve (12) month period thereafter while this Agreement remains
in effect, the Escrow Agent shall prepare and send to the City, at
the City's request, within thirty (30) days following the end of
such period a written report summarizing all transactions relating
to the Escrow Fund during such period, including, without
limitation, credits to the Escrow Fund as a result of interest
payments on or maturities of the Escrowed Securities and transfers
from the Escrow Fund to the Paying Agent for the Refunded Bonds or
otherwise, together with a detailed statement of all Escrowed
Securities and the cash balance on deposit in the Escrow Fund as
of the end of such period.
Section 6.03. Notification. The Escrow Agent shall notify
the City immediately if at any time during the term of this
agreement it determines that there is insufficient cash and
Escrowed Securities in the Escrow Fund to provide for the transfer
to the Paying Agents for the Refunded Bonds for timely payment of
all interest on and principal of the Refunded Bonds.
ARTICLE VII
Section 7.91. $eRresentations. The Escrow Agent hereby
represents that it has all necessary power and authority to enter
into this Escrow Agreement and undertake the obligations and
responsibilities imposed upon it herein, and that it will carry out
all of its obligations hereunder.
Section 7 Limitation on_Liability. The Escrow Agent
shall not be liable for any action taken or neglected to be taken
in good faith in the exercise of reasonable care and believed to
. be within the discretion or power conferred by this Escrow
Agreement, nor shall it be responsible for the consequences of any
-7-
error of judgment; and it shall not be answerable except for its
own neglect or default, nor for any loss unless the same shall have
been through its negligence or want of good faith.
The liability of the Escrow Agent to transfer funds to the
Paying Agent for the Refunded Bonds for the payments of the
principal of and interest on the Refunded Bonds shall be limited
to the proceeds of the Escrowed Securities and the cash balances
from time to time on deposit in the Escrow Fund. Notwithstanding
any provision contained herein to the contrary, the Escrow Agent
shall have no liability whatsoever for the insufficiency of funds
from time to time in the Escrow Fund or any failure of the obligor
of the Escrowed Securities to make timely payment thereon, except
for the obligation to notify the City promptly of any such
occurrence.
The recitals herein and in the proceedings authorizing the
Refunding Bonds shall be taken as the statements of the City and
shall not be considered as made by, or imposing any obligation or
liability upon, the Escrow Agent. In its capacity as Escrow Agent,
it is agreed that the Escrow Agent need look only to the terms and
provisions of this Escrow Agreement.
The Escrow Agent makes no representation as to the value,
condition or sufficiency of the Escrow Fund, or any part thereof,
or as to the title of the City thereto, or as to the security
afforded thereby or hereby, and the Escrow Agent shall incur no
liability or responsibility with respect to any of such matters.
It is the intention of the City and the Escrow Agent that the
Escrow Agent shall never be required to use or advance its own
funds or otherwise incur personal financial liability in the
performance of any of its duties or the exercise of any of its
rights and powers hereunder.
Unless it is specifically provided otherwise herein, the
Escrow Agent has no duty to determine or inquire into the happening
or occurrence of any event or contingency or the performance or
failure of performance of the City with respect to arrangements or
contracts with others, with the Escrow Agent's sole duty hereunder
being to safeguard the Escrow Fund and to dispose of and deliver
the same in accordance with this Escrow Agreement. If, however,
the Escrow Agent is called upon by the terms of this Escrow
Agreement to determine the occurrence of any event or contingency,
the Escrow Agent shall be obligated, in making such determination,
only to exercise reasonable care and diligence, and in event of
error in making such determination the Escrow Agent shall be liable
only for its own misconduct or its negligence. In determining the
occurrence of any such event or contingency the Escrow Agent may
request from the City or any other person such reasonable
-8-
additional evidence as the Escrow Agent in its discretion may 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 the City, among others, at any time.
Section 7.03. Compengation. (a) on the Escrow Funding Date
the City will pay the Escrow Agent, as a fee for performing the
services hereunder and for all expenses incurred or to be incurred
by the Escrow Agent in the administration of this Escrow Agreement,
and for its services in its capacity as the Paying Agent for the
Refunded Bonds, the sum of $ If the Escrow Agent is
requested to perform any extraordinary services hereunder, the City
hereby agrees to pay reasonable fees to the Escrow Agent for such
extraordinary services and to reimburse the Escrow Agent for all
expenses incurred by the Escrow Agent in performing such
extraordinary services. It is expressly provided that the Escrow
Agent shall look only to the City for the payment of such
additional fees and reimbursement of such additional expenses. The
Escrow Agent hereby agrees that in no event shall it ever assert
any claim or lien against the Escrow Fund for any fees for its
services, whether regular, additional or extraordinary, as Escrow
Agent, or in any other capacity, or for reimbursement for any of
its expenses.
Section 2.44. Successor Escrow Agents. Either the City or
the Escrow Agent may terminate this Escrow Agreement on 60 days
written notice, but no such termination shall be effective until
a successor has been appointed and has accepted such appointment.
Any successor Escrow Agent appointed by the City shall succeed,
without further act, to all the rights, immunities, powers and
trusts of the predecessor Escrow Agent hereunder. Upon the request
of any such successor Escrow Agent, the City shall execute any and
all instruments in writing for more fully and certainly vesting in
and confirming to such successor Escrow Agent all such immunities,
rights, powers and duties. The Escrow Agent shall pay over to its
successor Escrow Agent a proportional part of the Escrow Agent's
fee hereunder equal to the portion of such fee attributable to
duties to be performed after the date of succession.
MM
•
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Notices. 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 by
registered or certified mail, postage prepaid addressed as follows:
First City, Texas - Houston, N.A.
P. O. Box 809
Houston, TX 77002
Attention: Corporate Trust
To the City:
City of Baytown
Attention: Mayor
2401 Market Street
Baytown, TX 77520
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. Any party hereto may
change the address to which notices are to be delivered by giving
to the other parties not less than ten days prior notice thereof.
section 8.02. Termination of s o Aggnt's Obligations.
Upon the taking by the Escrow Agent of all the actions as described
herein, the Escrow Agent shall have no further obligations or
responsibilities hereunder to the City, the Owners of the Refunded
Bonds or to any other person or persons in connection with this
Escrow Agreement.
Section 8.03. Binding_ Agreement. This Escrow Agreement shall
be binding upon the City, and the Escrow Agent and their respective
successors and legal representatives, and shall inure solely to the
benefit of the Owners of the Refunded Bonds, the City, the Escrow
Agent and their respective successors and legal representatives.
Section Severability. In case any one or more of the
provisions contained in this Escrow 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 Escrow Agreement, but this Escrow
Agreement shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein. Written
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notice of any holding or other event requiring severability shall
be promptly sent by the City to Moody's Investors Service.
Section 8.05. Amendment. Except as provided in this Section,
this Escrow Agreement may not be amended without the prior written
consent of the Owners of all Refunded Bonds then outstanding. No
consent of any Owner shall be required for amendments limited to:
(a) the insertion of unintentionally omitted material or the
correction of mistakes or clarification of ambiguities; (b) the
pledging of additional security to the refunded bondholders; or (c)
the deposit of additional cash or securities to the escrow account.
Section 8.05. Governing Law. This Escrow Agreement shall be
governed exclusively by the provisions hereof and by the applicable
laws of the State of Texas.
Section 8.07. Time of Ess=ge. Time shall be of the essence
in the performance of obligations from time to time imposed upon
the Escrow Agent by this Escrow Agreement.
Executed as of October 22, 1992, but effective as set forth
herein.
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ATTEST:
City Clerk
( SEAL)
ATTEST:
By.
Title:
( SEAL)
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CITY OF BAYTOWN, TEXAS
Mayor
FIRST CITY, TEXAS- HOUSTON,
N.A., as Escrow Agent
By:
Title: