Ordinance No. 14,322ORDINANCE NO. 14,322
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, AUTHORIZING THE ISSUANCE OF CITY OF BAYTOWN, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION,
SERIES 2020; LEVYING A TAX IN PAYMENT THEREOF, SETTING
CERTAIN PARAMETERS FOR THE SALE OF THE CERTIFICATES;
APPROVING THE PREPARATION AND DISTRIBUTION OF AN OFFICIAL
STATEMENT; ENACTING OTHER PROVISIONS RELATING THERETO;
AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.
******************************************************************************
WHEREAS, under the provisions of Subchapter C, Chapter 271, Texas Local
Government Code, as amended (the "Act"), the City of Baytown, Texas (the "City"), is
authorized to issue certificates of obligation for the purposes specified in this Ordinance and for
the payment of all or a portion of the contractual obligations for professional services, including
that of engineers, attorneys, and financial advisors in connection therewith, and to sell the same
for cash as herein provided; and
WHEREAS, the City is authorized to provide that such obligations will be payable from
and secured by (i) the pledge of an annual ad valorem tax levied upon all taxable property within
the City, within the limits prescribed by law, (ii) a limited subordinate pledge of $1,000 of the
City's net sewer and water revenues as authorized by the Act and Chapter 1502, Texas
Government Code, and (iii) $100,000 annually of the City's hotel occupancy tax revenue
imposed under Chapter 351, Texas Tax Code, and received by the City for the use of rooms in
the Hotel (hereinafter defined), as authorized by Chapter 351, Texas Tax Code; and
WHEREAS, the City Council of the City has found and determined that it is necessary
and in the best interests of the City and its citizens that it issue such certificates of obligation
("Certificates") authorized by this Ordinance; and
WHEREAS, pursuant to a resolution heretofore passed by this governing body, notice of
intention to issue the Certificates payable as provided in this Ordinance was published in a
newspaper of general circulation in the City in accordance with the laws of the State of Texas,
which notice provided that the principal amount of the Certificates would not exceed
$20,500,000 and the proceeds would be used for the purposes set forth in Section 3.1 hereof; and
WHEREAS, such notice provided that the City tentatively planned to consider the
passage of an ordinance authorizing the issuance of the Certificates on January 30, 2020; and
WHEREAS, an additional notice provided that the City postponed the consideration of
the passage of an ordinance authorizing the issuance of the Certificates to February 13, 2020; and
WHEREAS, no petition of any kind has been filed with the City Clerk, any member of
the City Council or any other official of the City, protesting the issuance of the Certificates; and
WHEREAS, this City Council is now authorized and empowered to proceed with the
issuance of the Certificates and to sell the same for cash; and
WHEREAS, the City is a home -rule municipality that has adopted a charter under
Article XI, Section 5 of the Texas Constitution, has a population in excess of 50,000 and has
outstanding indebtedness that is rated by a nationally recognized agency for municipal securities
in one of the four highest rating categories for a long-term obligation; and
WHEREAS, the City has a principal amount of at least $100,000,000 in a combination of
outstanding long-term indebtedness and long-term indebtedness proposed to be issued, and some
amount of such long-term indebtedness is rated in one of the four highest rating categories for
long-term debt instruments by a nationally recognized rating agency for municipal securities
without regard to the effect of any credit agreement or other form of credit enhancement entered
into in connection with the obligation, and therefore qualifies as an "Issuer" under Chapter 1371
of the Texas Government Code, as amended ("Chapter 1371 "); and
WHEREAS, pursuant to Chapter 1371, the City desires to delegate the authority to effect
the sale of the Certificates to the Authorized Officer (hereinafter defined); and
WHEREAS, the meeting at which this Ordinance is considered is open to the public as
required by law, and public notice of the time, place, and purpose of said meeting was given as
required by Chapter 551, Texas Government Code, as amended; therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS:
ARTICLE I
DEFINITIONS AND OTHER PRELIMINARY MATTERS
Section 1.1. Definitions.
Unless otherwise expressly provided or unless the context clearly requires otherwise in
this Ordinance, the following terms shall have the meanings specified below:
"2018 Release" means the SEC Release No. 34-83885 dated August 20, 2018.
"Act" has the meaning assigned to such term in the recitals of this Ordinance.
"Authorized Officer" means the Mayor, the City Manager, Assistant City Manager or the
Director of Finance of the City, or such other officers of the City as designated in writing, who
are authorized to act on behalf of the City in selling and delivering the Certificates.
"Bond Counsel" means Winstead PC.
"Bonds" means the Baytown Municipal Development District Hotel Revenue Bonds,
Series 2020, being issued to finance the Hotel.
"Business Day" means a day that is not a Saturday, Sunday, legal holiday or other day on
which banking institutions in the city where the Designated Payment/Transfer Office is located
are required or authorized by law or executive order to close.
-2-
"Certificates" means the City's certificates of obligation authorized to be issued by
Section 3.1 of this Ordinance and designated as "City of Baytown, Texas Combination Tax and
Revenue Certificates of Obligation, Series 2020" and such other series or subseries as may be
designated in the Pricing Certificate.
"Chapter 1371" has the meaning assigned to such term in the recitals of this Ordinance.
"City" means the City of Baytown, Texas.
"City Facilities" has the meaning assigned to such term in Section 3.1 hereof.
"Closing Bate" means the date of the initial delivery of and payment for the Certificates
designated in the Pricing Certificate.
"Code" means the Internal Revenue Code of 1986, as amended, and, with respect to a
specific section thereof, such reference shall be deemed to include (a) the Regulations
promulgated under such section, (b) any successor provision of similar import hereafter enacted,
(c) any corresponding provision of any subsequent Internal Revenue Code and (d) the
regulations promulgated under the provisions described in (b) and (c).
"Convention Center" has the meaning assigned to such term in Section 3.1 hereof.
"Counsel's Opinion" has the meaning assigned to such term in Section 9.1 hereof.
"Dated Date" means the date designated as the dated date of the Certificates in the
Pricing Certificate.
"Debt Service" means collectively, all amounts due and payable with respect to the
Certificates representing the principal of the Certificates and the interest, payable at the times
and in the manner provided herein and the payment of the costs associated therewith.
"Designated Payment/Transfer Office" means (i) with respect to the initial Paying
Agent/Registrar named herein, its office in Dallas, Texas, or at such other location designated by
the Paying Agent/Registrar, and (ii) with respect to any successor Paying Agent/Registrar, the
office of such successor designated and located as may be agreed upon by the City and such
successor.
"DTC" means The Depository Trust Company of New York, New York, or any
successor securities depository.
"DTC Participant" means brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations on whose behalf DTC was created to hold securities
to facilitate the clearance and settlement of securities transactions among DTC Participants.
"Financial Obligation" means a (i) debt obligation, (ii) derivative instrument entered into
in connection with, or pledged as security or a source of payment for, an existing or planned debt
obligation, or (iii) guarantee of a debt obligation or any such derivative instrument; provided that
"Financial Obligation" shall not include municipal securities as to which a final official
-3-
statement has been provided to the MSRB consistent with the Rule. The City intends such term
to have the meaning ascribed to it in the 2018 Release and any further amendments or written
guidance provided by the SEC or its staff with respect to the amendments to the Rule effected by
the 2018 Release.
"Fiscal Year" means such fiscal year as shall from time to time be set by the City
Council.
"Hotel" has the meaning assigned to such term in Section 3.1 hereof.
"Interest and Sinking Fund" means the interest and sinking fund established by
Section 2.3 of this Ordinance.
"Initial Certificate" means the initial certificate authorized by Section 3.4(d) of this
Ordinance.
"Initial Purchaser" means the initial purchaser of the Certificates designated in the
Pricing Certificate.
"Interest Payment Date" means the date or dates on which interest on the Certificates is
scheduled to be paid, as designated in the Pricing Certificate.
"Maturity" means the date on which the principal of the Certificates becomes due and
payable according to the terms thereof, or by proceedings for prior redemption.
"MSRB" means the Municipal Securities Rulemaking Board.
"Net Revenues" means the revenues to be derived from the System, after the payment of
all operation and maintenance expenses thereof.
"Ordinance" as used herein and in the Certificates means this ordinance authorizing the
Certificates.
"Owner" means the person who is the registered owner of a Certificate or Certificates, as
shown in the Register.
"Paying Agent/Registrar" means initially The Bank of New York Mellon Trust
Company, N.A., Dallas, Texas, or any successor thereto as provided in this Ordinance.
"Paying Agent Registrar Agreement" means the paying agent/registrar agreement
between the Paying Agent/Registrar and the City relating to the Certificates.
"Pricing Certificate" means a certificate or certificates to be signed by the Authorized
Officer, in substantially the form attached hereto as Exhibit A with such variations, omissions
and insertions as are approved by the Authorized Officer as indicated by his/her signature.
"Record Date" means the fifteenth (15`h) day of the month next preceding each Interest
Payment Date.
-4-
"Register" means the bond register specified in Section 3.6(a) of this Ordinance.
"Regulations" means the applicable, proposed, temporary or final Treasury Regulations
promulgated under the Code, or, to the extent applicable to the Code, under the Internal Revenue
Code of 1954, as such regulations may be amended or supplemented from time to time.
"Representation Letter" means the Blanket Letter of Representations between the City
and DTC.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"Special Payment Date" means the date that is fifteen (15) days after the Special Record
Date, as described in Section 3.3(e).
"Special Record Date" means a new record date for interest payment established in the
event of a nonpayment of interest on a scheduled date, and for thirty (30) days thereafter, as
described in Section 3.3(e).
"State" means the State of Texas.
"Stated Maturity" means the respective stated maturity dates of the Certificates specified
in the Pricing Certificate.
"System" as used in this Ordinance means the City's waterworks and sanitary sewer
system.
"Unclaimed Payments" means money deposited with the Paying Agent/Registrar for the
payment of principal, redemption premium, if any, or interest on the Certificates as the same
becomes due and payable or money set aside for the payment of Certificates duly called for
redemption prior to maturity and remaining unclaimed by the Owners of such Certificates for
ninety (90) days after the applicable payment or redemption date.
Section 1.2. Findings.
The declarations, determinations, and findings declared, made, and found in the preamble
to this Ordinance are hereby adopted, restated, and part of the operative provisions hereof.
Section 1.3. Table of Contents, Titles, and Headings.
The table of contents, titles, and headings of the Articles and Sections of this Ordinance
have been inserted for convenience of reference only and are not to be considered a part hereof
and shall not in any way modify or restrict any of the terms or provisions hereof and shall never
be considered or given any effect in construing this Ordinance or any provision hereof or in
ascertaining intent, if any question of intent should arise.
-5-
Section 1.4. Interpretation.
(a) Unless the context requires otherwise, words of the masculine gender shall be
construed to include correlative words of the feminine and neuter genders and vice versa, and
words of the singular number shall be construed to include correlative words of the plural
number and vice versa.
(b) Any action required to be taken on a date which is not a Business Day shall be
taken on the next succeeding Business Day and have the same effect as if taken on the date so
required.
(c) This Ordinance and all the terms and provisions hereof shall be liberally
construed to effectuate the purposes set forth herein to sustain the validity of this Ordinance.
(d) Article and section references shall mean references to articles and sections of this
Ordinance unless otherwise designated.
ARTICLE II
TAX LEVY; HOTEL OCCUPANCY TAX; INTEREST AND SINKING FUND; PLEDGE
OF REVENUES
Section 2.1. Tax Levy.
(a) Pursuant to the authority granted by the Texas Constitution and the laws of the
State of Texas, there shall be levied and there is hereby levied for the current year and for each
succeeding year thereafter while any of the Certificates or any interest thereon is outstanding and
unpaid, an ad valorem tax on each one hundred dollars valuation of taxable property within the
City, at a rate sufficient, within the limit prescribed by law, to pay the Debt Service requirements
of the Certificates, being (i) the interest on the Certificates, and (ii) a sinking fiend for their
redemption at maturity or a sinking fund of 2% per annum (whichever amount is greater), when
due and payable, full allowance being made for delinquencies and costs of collection.
(b) The ad valorem tax thus levied shall be assessed and collected each year against
all property appearing on the tax rolls of the City most recently approved in accordance with law
and the money thus collected shall be deposited as collected to the Interest and Sinking Fund.
(c) Said ad valorem tax, the collections therefrom, and all such amounts on deposit in
or required hereby to be deposited into the Interest and Sinking Fund are hereby pledged and
committed irrevocably to the payment of the principal of and interest on the Certificates and
related fees and expenses when and as due and payable in accordance with their terms and this
Ordinance.
(d) To pay Debt Service on the Certificates coming due prior to receipt of the taxes
levied to pay such Debt Service, there is hereby appropriated from current funds on hand, which
are hereby certified to be on hand and available for such purpose, an amount sufficient to pay
such Debt Service, and such amount shall be used for no other purpose.
M
Section 2.2. Hotel Occupancy.
(a) Pursuant to Chapter 351 of the Texas Tax Code, the City has imposed a hotel
occupancy tax for the use or possession or for the right to the use or possession of rooms in
hotels within the City, and such hotel occupancy tax will be imposed for the use of rooms in the
Hotel upon completion of the Hotel (the "Hotel HOT").
(b) A portion of the Hotel HOT imposed and received by the City in the amount of
$100,000 annually shall be deposited to the Interest and Sinking Fund.
(c) The portion of the Hotel HOT deposited into the Interest and Sinking Fund is
hereby pledged and committed to the payment of the principal of and interest on the Certificates
and related fees and expenses when and as due and payable in accordance with their terms and
this Ordinance; provided, however, that such pledge is and shall be junior and subordinate in all
respects to the pledge of the Hotel HOT to the payment of all outstanding obligations of the City
and any obligation of the City, whether authorized heretofore or hereafter, which the City
designates as having a pledge senior to the pledge of the Ilotel HOT to the payment of the
Certificates. The City also reserves the right to issue, for any lawful purpose at any time, in one
or more installments, bonds, certificates of obligation and other obligations of any kind payable
in whole or in part from the I lotel HOT, secured by a pledge of the Hotel HOT that may be prior
and superior in right to, on a parity with, or junior and subordinate to the pledge of the Hotel
HOT securing the Certificates.
Section 2.3. Interest and Sinking Fund.
(a) The City hereby establishes a special fund or account to be designated the "City
of Baytown, Texas, Combination Tax and Revenue Certificates of Obligation, Series 2020,
Interest and Sinking Fund" (the "Interest and Sinking Fund") with said fund to be maintained at
an official depository bank of the City separate and apart from all other funds and accounts of the
City.
(b) Money on deposit in, or required by this Ordinance to be deposited to, the Interest
and Sinking Fund shall be used solely for the purpose of paying the interest on and principal of
the Certificates when and as due and payable in accordance with their terms and this Ordinance.
Section 2.4. Pledge of Revenues.
(b) The Net Revenues to be derived from the operation of the System in an amount
not to exceed One Thousand Dollars ($1,000) are hereby pledged to the payment of the principal
of and interest on the Certificates as the same come due; provided, however, that such pledge is
and shall be junior and subordinate in all respects to the pledge of the Net Revenues to the
payment of all outstanding obligations of the City and any obligation of the City, whether
authorized heretofore or hereafter, which the City designates as having a pledge senior to the
pledge of the Net Revenues to the payment of the Certificates. The City also reserves the right to
issue, for any lawful purpose at any time, in one or more installments, bonds, certificates of
obligation and other obligations of any kind payable in whole or in part from the Net Revenues,
secured by a pledge of the Net Revenues that may be prior and superior in right to, on a parity
with, or junior and subordinate to the pledge of Net Revenues securing the Certificates. The
-7-
revenues of the System available after the payment of all operation and maintenance expenses of
the System, any Debt Service payable from gross revenues or Net Revenues of the System, if
any, as well as other payments, costs or expenses designated in an ordinance authorizing the
issuance of System revenue obligations may be used for any lawful purpose of the City.
ARTICLE III
AUTHORIZATION; GENERAL TERMS
AND PROVISIONS REGARDING THE CERTIFICATES
Section 3.1. Authorization.
(a) The Certificates are hereby authorized to be issued and delivered in accordance
with the Constitution and laws of the State, specifically the Act and Chapter 1371. The
Certificates shall be issued in the total aggregate principal amount not to exceed $20,500,000 for
the purpose of providing for the payment of contractual obligations to be incurred in connection
with the planning, acquisition, construction, equipping, expansion, repair, and/or renovation of
City -owned public property, including (1) a convention center consisting of public conference
rooms and meeting space of approximately 33,600 square feet, including a ballroom of
approximately 12,000 square feet (the "Convention Center"), (2) public facilities and
infrastructure ancillary to the conference rooms and meeting space, (3) a proportionate interest in
elements common to the Convention Center and the hotel that will be interconnected with the
Convention Center (the "Hotel"), such as the foundation, HVAC system, mechanical, electrical,
and plumbing systems, roof, and other similar structural elements, (4) areas common to the
Convention Center and the Hotel, (5) the completion of a water and wastewater preliminary
engineering report for the design of a water line extension and replacement of an existing
wastewater lift station and force main, and (6) a parking lot or parking structure with
approximately 320 spaces, adjacent to the Convention Center (collectively, the "City Facilities").
For those areas and elements described in clauses (3) and (4) of the preceding sentence that are
common to the Convention Center and the 1lotel, the City hereby finds that Certificate proceeds
may be expended only on costs attributable to the City's proportionate interest in those common
areas and elements.
(b) The City hereby establishes a special fund or account to be designated the "City
of Baytown, Texas Combination Tax and Revenue Certificates of Obligation, Series 2020, City
Facilities Fund" (the "City Facilities Fund"), with said fund to be held by the bank serving as
trustee for the Bonds. The City Facilities Fund shall be held separate and apart from all other
funds and accounts of the City, of the Baytown Municipal Development District, and of the
trustee bank, and amounts on deposit in the City Facilities Fund shall be used solely to pay costs
of the City Facilities, and shall not pay costs of the Hotel nor secure the payment of principal of
or interest on the Bonds.
Section 3.2. Date, Denomination, Maturities, and Interest.
(a) The Certificates shall be dated the Dated Date and shall be issued in fully
registered form, without coupons.
-8-
(b) The Certificates shall be issued in the aggregate principal amount designated in
the Pricing Certificate, shall be in the denomination of $5,000 or any integral multiple thereof
and shall be numbered separately from R-1 upward, except the Initial Certificate, which shall be
numbered I-1.
(c) The Certificates shall mature on the dates and in the principal amounts and shall
bear interest at the per annum rates set forth in the Pricing Certificate.
(d) Interest shall accrue and be paid on each Certificate, respectively, until the
principal amount thereof has been paid or provision for such payment has been made, from the
later of (i) the Closing Date or Dated Date, as designated in the Pricing Certificate, or (ii) the
most recent Interest Payment Date to which interest has been paid or provided for at the rate per
annum for each respective Stated Maturity specified in the Pricing Certificate. Such interest shall
be payable on each Interest Payment Date and shall be computed on the basis of a 360-day year
of twelve 30-day months.
Section 3.3. Medium, Method and Place of Payment.
(a) Debt Service shall be paid in lawful money of the United States of America.
(b) Interest on each Certificate shall be paid by check dated as of the Interest Payment
Date, and sent first class United States mail, postage prepaid, by the Paying Agent/Registrar to
each Owner, as shown in the Register at the close of business on the Record Date, at the address
of each such Owner as such appears in the Register or by such other customary banking
arrangements acceptable to the Paying Agent/Registrar and the person to whom interest is to be
paid; provided, however, that such person shall bear all risk and expense of such other customary
banking arrangements.
(c) The principal of each Certificate shall be paid to the Owner thereof at Stated
Maturity upon presentation and surrender of such Certificate at the Designated Payment/Transfer
Office of the Paying Agent/Registrar.
(d) If the date for the payment of Debt Service is not a Business Day, the date for
such payment shall be the next succeeding Business Day, and payment on such date shall for all
purposes be deemed to have been made on the due date thereof as specified in this Section.
(e) In the event of a nonpayment of interest on a scheduled payment date, and for
thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date")
will be established by the Paying Agent/Registrar, if and when funds for the payment of such
interest have been received from the City. Notice of the Special Record Date and of the Special
Payment Date of the past due interest shall be sent at least five (5) Business Days prior to the
Special Record Date by United States mail, first class, postage prepaid, to the address of each
Owner of a Certificate appearing on the books of the Paying Agent/Registrar at the close of
business on the last Business Day next preceding the date of mailing of such notice.
(f) Payments shall be segregated in a special account and held in trust, uninvested by
the Paying Agent/Registrar, for the account of the Owner of the Certificates to which the
Unclaimed Payments pertain. Subject to Title 6, Texas Property Code, Unclaimed Payments
Wa
remaining unclaimed by the Owners entitled thereto for three (3) years after the applicable
payment or redemption date shall be applied to the next payment or payments on the Certificates
thereafter coming due and, to the extent any such money remains after the retirement of all
outstanding Certificates, shall be paid to the City to be used for any lawful purpose. Thereafter,
neither the City, the Paying Agent/Registrar nor any other person shall be liable or responsible to
any holders of such Certificates for any further payment of such Unclaimed Payments or on
account of any such Certificates, subject to Title 6, Texas Property Code.
Section 3.4. Execution and Registration of Certificates.
(a) The Certificates shall be executed on behalf of the City by the Mayor or Mayor
Pro Tem and the City Clerk, by their manual or facsimile signatures, and the official seal of the
City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the
Certificates shall have the same effect as if each of the Certificates had been signed manually and
in person by each of said officers, and such facsimile seal on the Certificates shall have the same
effect as if the official seal of the City had been manually impressed upon each of the
Certificates.
(b) In the event that any officer of the City whose manual or facsimile signature
appears on the Certificates ceases to be such officer before the authentication of such Certificates
or before the delivery thereof, such signature nevertheless shall be valid and sufficient for all
purposes as if such officer had remained in such office.
(c) Except as provided below, no Certificate shall be valid or obligatory for any
purpose or be entitled to any security or benefit of this Ordinance unless and until there appears
thereon the Certificate of Paying Agent/Registrar substantially in the form provided herein, duly
authenticated by manual execution by an officer or duly authorized signatory of the Paying
Agent/Registrar. It shall not be required that the same officer or authorized signatory of the
Paying Agent./Registrar sign the certificate of Paying Agent/Registrar on all of the Certificates.
In lieu of the executed certificate of Paying Agent Registrar described above, the Initial
Certificate delivered at the Closing Date shall have attached thereto the Comptroller's
Registration Certificate substantially in the form provided herein, manually executed by the
Comptroller of Public Accounts of the State, or by his or her duly authorized agent, which
certificate shall be evidence that the Certificate has been duly approved by the Attorney General
of the State, and that it is a valid and binding obligation of the City, and that it has been
registered by the Comptroller of Public Accounts of the State.
(d) On the Closing Date, one Initial Certificate representing the entire principal
amount of the Certificates designated in the Pricing Certificate, payable in stated installments to
the Initial Purchaser or its designee, to be executed by the manual or facsimile signatures of the
Mayor or Mayor Pro Tern and City Clerk, approved by the Attorney General of the State, and
registered and manually signed by the Comptroller of Public Accounts of the State, will be
delivered to the Initial Purchaser or its designee. Upon payment for the Initial Certificate, the
Paying Agent/Registrar shall cancel the Initial Certificate and deliver registered definitive
Certificates to DTC in accordance with Section 3.9 hereof. To the extent the Paying
Agent/Registrar is eligible to participate in DTC's FAST System, as evidenced by an agreement
-10-
between the Paying Agent/Registrar and DTC, the Paying Agent/Registrar shall hold the
definitive Certificates in safekeeping for DTC.
Section 3.5. Ownership.
(a) The City, the Paying Agent/Registrar and any other person may treat the Owner
as the absolute owner of such Certificate for the purpose of making and receiving payment of the
principal thereof, for the purpose of making and receiving payment of the interest thereon
(subject to the provisions herein that the interest is to be paid to the person in whose name the
Certificate is registered on the Record Date or Special Record Date, as applicable), and for all
other purposes, whether or not such Certificate is overdue, and neither the City nor the Paying
Agent/Registrar shall be bound by any notice or knowledge to the contrary.
(b) All payments made to the Owner of a Certificate shall be valid and effectual and
shall discharge the liability of the City and the Paying Agent/Registrar upon such Certificate to
the extent of the sums paid.
Section 3.6. Registration, Transfer, and Exchange.
(a) So long as any Certificates remain outstanding, the City shall cause the Paying
Agent/Registrar to keep at its Designated Payment/Transfer Office a register (the "Register") in
which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar
shall provide for the registration and transfer of Certificates in accordance with this Ordinance.
(b) The ownership of a Certificate may be transferred only upon the presentation and
surrender of the Certificate to the Paying Agent/Registrar at the Designated Payment"Transfer
Office with such endorsement or other instrument of transfer and assignment as is acceptable to
the Paying Agent/Registrar. No transfer of any Certificate shall be effective until entered in the
Register.
(c) The Certificates shall be exchangeable upon the presentation and surrender
thereof at the Designated Payment/Transfer Office for a Certificate or Certificates of the same
maturity and interest rate and in any denomination or denominations of any integral multiple of
$5,000, and in an aggregate principal amount equal to the unpaid principal amount of the
Certificates presented for exchange.
(d) The Paying Agent/Registrar is hereby authorized to authenticate and deliver
Certificates transferred or exchanged in accordance with this Section. A new Certificate or
Certificates will be delivered by the Paying Agent/Registrar, in lieu of the Certificate being
transferred or exchanged, at the Designated PaymentiTransfer Office, or sent by United States
mail, first class, postage prepaid, to the Owner or his designee. Each Certificate delivered by the
Paying Agent/Registrar in accordance with this Section shall constitute an original contractual
obligation of the City and shall be entitled to the benefits and security of this Ordinance to the
same extent as the Certificate or Certificates in lieu of which such Certificate is delivered.
(e) No service charge shall be made to the Owner for the initial registration,
subsequent transfer, or exchange for a different denomination of any of the Certificates. The
Paying Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover any
-11-
tax or other governmental charge that is authorized to be imposed in connection with the
registration, transfer, or exchange of a Certificate.
(f) Neither the City nor the Paying Agent/Registrar shall be required to transfer or
exchange any Certificate called for redemption, in whole or in part, within forty-five (45) days
prior to the date fixed for redemption; provided, however, such limitation shall not be applicable
to an exchange by the Owner of the uncalled balance of a Certificate.
Section 3.7. Cancellation.
All Certificates paid or redeemed before Stated Maturity in accordance with this
Ordinance, and all Certificates in lieu of which exchange Certificates or replacement Certificates
are authenticated and delivered in accordance with this Ordinance, shall be cancelled and proper
records made regarding such payment, redemption, exchange, or replacement. The Paying
Agent/Registrar shall dispose of such cancelled Certificates in the manner required by the
Securities Exchange Act of 1934, as amended.
Section 3.8. Replacement Certificates.
(a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated
Certificate, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a
replacement Certificate of like tenor and principal amount, bearing a number not
contemporaneously outstanding. The City or the Paying Agent/Registrar may require the Owner
of such Certificate to pay a sum sufficient to cover any tax or other governmental charge that is
authorized to be imposed in connection therewith and any other expenses connected therewith.
(b) In the event that any Certificate is lost, apparently destroyed or wrongfully taken,
the Paying Agent/Registrar, pursuant to the applicable laws of the State and in the absence of
notice or knowledge that such Certificate has been acquired by a bona fide purchaser, shall
authenticate and deliver a replacement Certificate of like tenor and principal amount, bearing a
number not contemporaneously outstanding, provided that the Owner first complies with the
following requirements:
(i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her
ownership of and the circumstances of the loss, destruction, or theft of such
Certificate;
(ii) furnishes such security or indemnity as may be required by the Paying
Agent/Registrar to save it and the City harmless;
(iii) pays all expenses and charges in connection therewith, including, but not
limited to, printing costs, legal fees, fees of the Paying Agent/Registrar, and any tax or
other governmental charge that is authorized to be imposed; and
(iv) satisfies any other reasonable requirements imposed by the City and the
Paying Agent/Registrar.
-12-
(c) If, after the delivery of such replacement Certificate, a bona fide purchaser of the
original Certificate in lieu of which such replacement Certificate was issued presents for
payment such original Certificate, the City and the Paying Agent/Registrar shall be entitled to
recover such replacement Certificate from the person to whom it was delivered or any person
taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security
or indemnity provided therefor to the extent of any loss, damage, cost, or expense incurred by the
City or the Paying Agent/Registrar in connection therewith.
(d) In the event that any such mutilated, lost, apparently destroyed, or wrongfully
taken Certificate has become or is about to become due and payable, the Paying Agent/Registrar,
in its discretion, instead of issuing a replacement Certificate, may pay such Certificate when it
becomes due and payable.
(e) Each replacement Certificate delivered in accordance with this Section shall
constitute an original additional contractual obligation of the City and shall be entitled to the
benefits and security of this Ordinance to the same extent as the Certificate or Certificates in lieu
of which such replacement Certificate is delivered.
Section 3.9. Book -Entry -Only System.
(a) Unless otherwise specified in the Pricing Certificate, the definitive Certificates
shall be initially issued in the form of a separate, single, Rilly registered Certificate for each
Stated Maturity. Upon initial issuance, the ownership of each such Certificate shall be registered
in the name of Cede & Co., as nominee of DTC, and except as provided in Section 3.10 hereof,
all of the outstanding Certificates shall be registered in the name of Cede & Co., as nominee of
DTC.
(b) With respect to Certificates registered in the name of Cede & Co., as nominee of
DTC, the City and the Paying Agent/Registrar shall have no responsibility or obligation to any
DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in
the Certificates, except as provided in this Ordinance. Without limiting the immediately
preceding sentence, the City and the Paying Agent/Registrar shall have no responsibility or
obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC
Participant with respect to any ownership interest in the Certificates, (ii) the delivery to any DTC
Participant or any other person, other than an Owner, as shown on the Register, of any notice
with respect to the Certificates, including any notice of redemption, or (iii) the payment to any
DTC Participant or any other person, other than an Owner, as shown in the Register, of any
amount with respect to principal of, premium, if any, or interest on the Certificates.
Notwithstanding any other provision of this Ordinance to the contrary, the City and the Paying
Agent/Registrar shall be entitled to treat and consider the person in whose name each Certificate
is registered in the Register as the absolute Owner of such Certificate for the purpose of payment
of principal of, premium, if any, and interest on the Certificates, for the purpose of giving notices
of redemption and other matters with respect to such Certificate, for the purpose of registering a
transfer with respect to such Certificate, and for all other purposes whatsoever. The Paying
Agent/Registrar shall pay all principal of, premium, if any, and interest on the Certificates only
to or upon the order of the respective Owners, as shown in the Register as provided in this
Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall
-13-
be valid and effective to fully satisfy and discharge the City's obligations with respect to
payment of principal of, premium, if any, and interest on the Certificates to the extent of the sum
or sums so paid. No person other than an Owner, as shown in the Register, shall receive a
certificate evidencing the obligation of the City to make payments of amounts due pursuant to
this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the
effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject
to the provisions in this Ordinance with respect to interest checks or drafts being mailed to the
Owner at the close of business on the Record Date, the word "Cede & Co." in this Ordinance
shall refer to such new nominee of DTC.
(c) The Representation Letter previously executed and delivered by the City, and
applicable to the City's obligations delivered in book -entry -only form to DTC as securities
depository, is hereby ratified and approved for the Certificates.
Section 3.10. Successor Securities Depository: Transfer Outside Book -Entry -Only
System.
In the event that the City determines that it is in the best interest of the City and the
beneficial owners of the Certificates that they be able to obtain certificated Certificates, or in the
event DTC discontinues the services described herein, the City shall (i) appoint a successor
securities depository, qualified to act as such under Section 17(a) of the Securities Exchange Act
of 1934, as amended, notify DTC and DTC Participants of the appointment of such successor
securities depository and transfer one or more separate Certificates to such successor securities
depository; or (ii) notify DTC and DTC Participants of the availability through DTC of
certificated Certificates and cause the Paying Agent/Registrar to transfer one or more separate
registered Certificates to DTC Participants having Certificates credited to their DTC accounts. In
such event, the Certificates shall no longer be restricted to being registered in the Register in the
name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor
securities depository, or its nominee, or in whatever name or names Owners transferring or
exchanging Certificates shall designate, in accordance with the provisions of this Ordinance.
Section 3.11. Payments to Cede & Co.
Notwithstanding any other provision of this Ordinance to the contrary, so long as the
Certificates are registered in the name of Cede & Co., as nominee of DTC, all payments with
respect to principal of, premium, if any, and interest on such Certificates, and all notices with
respect to such Certificates shall be made and given, respectively, in the manner provided in the
Representation Letter of the City to DTC.
ARTICLE IV
REDEMPTION OF CERTIFICATES BEFORE MATURITY
Section 4.1. Limitation on Redemption.
The Certificates shall be subject to redemption before Stated Maturity only as provided in
this Article IV and in the Pricing Certificate.
-14-
Section 4.2. Optional Redemption.
The Certificates shall be subject to redemption at the option of the City at such times, in
such amounts, in such manner and at such redemption prices as may be designated in the Pricing
Certificate.
Section 4.3. Mandatory Sinking Fund Redemption.
(a) The Certificates designated as "Term Certificates" in the Pricing Certificate
("Tenn Certificates"), if any, are subject to scheduled mandatory redemption and will be
redeemed by the City, in part at a price equal to the principal amount thereof, without premium,
plus accrued interest to the redemption date, out of money available for such purpose in the
Interest and Sinking Fund, on the dates and in the respective principal amounts as set forth in the
Pricing Certificate.
(b) Prior to each scheduled mandatory redemption date, the Paying Agent/Registrar
shall select for redemption by lot, or by any other customary method that results in a random
selection, a principal amount of Term Certificates equal to the aggregate principal amount of
such Term Certificates to be redeemed, shall call such Term Certificates for redemption on such
scheduled mandatory redemption date, and shall give notice of such redemption, as provided in
Section 4.5.
(c) The principal amount of the Term Certificates required to be redeemed on any
redemption date pursuant to subparagraph (a) of this Section 4.3 shall be reduced, at the option
of the City, by the principal amount of any Term Certificates which, at least forty-five (45) days
prior to the mandatory sinking fund redemption date (i) shall have been acquired by the City and
delivered to the Paying Agent/Registrar for cancellation, or (ii) shall have been redeemed
pursuant to the optional redemption provisions hereof and not previously credited to a mandatory
sinking fund redemption.
Section 4.4. Partial Redemption.
(a) If less than all of the Certificates are to be redeemed pursuant to Section 4.2
hereof, the City shall determine the maturity or maturities and the amounts thereof (or mandatory
sinking fund payment with respect to Term Certificates, if any) to be redeemed and shall direct
the Paying Agent/Registrar to call by lot, or other customary method that results in random
selection, the Certificates, or portions thereof, within such Stated Maturity or Stated Maturities
and in such principal amounts for redemption.
(b) A portion of a single Certificate of a denomination greater than $5,000 may be
redeemed, but only in a principal amount equal to $5,000 or any integral multiple thereof. If such
a Certificate is to be partially redeemed, the Paying Agent/Registrar shall treat each $5,000
portion of the Certificate as though it were a single Certificate for purposes of selection for
redemption.
(c) Upon surrender of any Certificate for redemption in part, the Paying
Agent/Registrar, in accordance with Section 3.6(c) of this Ordinance, shall authenticate and
-15-
deliver an exchange Certificate or Certificates in an aggregate principal amount equal to the
unredeemed portion of the Certificate so surrendered, such exchange being without charge.
(d) The Paying Agent/Registrar shall promptly notify the City in writing of the
principal amount to be redeemed of any Certificate as to which only a portion thereof is to be
redeemed.
Section 4.5. Notice of Redemption to Owners.
(a) At the direction of the City, the Paying Agent/Registrar shall give notice of any
redemption of Certificates by sending notice by first class United States mail, postage prepaid,
not less than thirty (30) days before the date fixed for redemption, to the Owner of each
Certificate (or part thereof) to be redeemed, at the address shown on the Register at the close of
business on the Business Day next preceding the date of mailing such notice.
(b) The notice shall state the redemption date, the redemption price, the place at
which the Certificates are to be surrendered for payment, and, if less than all the Certificates
outstanding are to be redeemed, an identification of the Certificates or portions thereof to be
redeemed.
(c) The City reserves the right to give notice of its election or direction to redeem
Certificates under Section 4.2 conditioned upon the occurrence of subsequent events. Such notice
may state (i) that the redemption is conditioned upon the deposit of money and/or authorized
securities, in an amount equal to the amount necessary to effect the redemption, with the Paying
Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption
date or (ii) that the City retains the right to rescind such notice at any time prior to the scheduled
redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar
instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and
redemption shall be of no effect if such money and/or authorized securities are not so deposited
or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such
rescission of a conditional notice of redemption to the affected Owners. Any Certificates subject
to conditional redemption where redemption has been rescinded shall remain outstanding and the
rescission of such redemption shall not constitute an event of default.
(d) Any notice given as provided in this Section shall be conclusively presumed to
have been duly given, whether or not the Owner receives such notice.
Section 4.6. Payment Upon Redemption.
(a) Before or on each redemption date, the City shall deposit with the Paying
Agent/Registrar money sufficient to pay all amounts due on the redemption date and the Paying
Agent/Registrar shall make provision for the payment of the Certificates to be redeemed on such
date by setting aside and holding in trust such amounts as are received by the Paying
Agent/Registrar from the City and shall use such funds solely for the purpose of paying the
principal of, redemption premium, if any, and accrued interest on the Certificates being
redeemed.
-16-
(b) Upon presentation and surrender of any Certificate called for redemption at the
Designated Payment/Transfer Office of the Paying Agent/Registrar on or after the date fixed for
redemption, the Paying Agent/Registrar shall pay the principal of, redemption premium, if any,
and accrued interest on such Certificate to the date of redemption from the money set aside for
such purpose.
Section 4.7. Effect of Redemption.
When Certificates have been called for redemption in whole or in part and due provision
has been made to redeem same as herein provided, the Certificates 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 Certificate or portion thereof
called for redemption shall terminate on the date fixed for redemption. If the City shall fail to
make provision for payment of all sums due on a redemption date, then any Certificate or portion
thereof called for redemption shall continue to bear interest at the rate stated on the Certificate
until due provision is made for the payment of same.
Section 4.8. Lapse of Payment. Money set aside for the redemption of the Certificates
and remaining unclaimed by the Owners thereof shall be subject to the provisions of
Section 3.3(f) hereof.
ARTICLE V
PAYING AGENT/REGISTRAR
Section 5.1. Appointment of Initial Paving A eg nt/Re ig strar.
(a) The Bank of New York Mellon Trust Company, N.A., Dallas, Texas is hereby
appointed as the initial Paying Agent/Registrar for the Certificates.
(b) The Paying Agent/Registrar shall keep such books or records and make such
transfers and registrations under such reasonable regulations as the City and the Paying
Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such transfer and
registrations as herein provided. It shall be the duty of the Paying Agent/Registrar to obtain from
the Owners and record in the Register the address of such Owner of each Certificate to which
payments with respect to the Certificates shall be mailed, as provided herein. The City or its
designee shall have the right to inspect the Register during regular business hours of the Paying
Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Register confidential
and, unless otherwise required by law, shall not permit its inspection by any other entity.
(c) The City hereby further appoints the Paying Agent/Registrar to act as the paying
agent for paying the principal of and interest on the Certificates. The Paying Agent/Registrar
shall keep proper records of all payments made by the City and the Paying Agent/Registrar with
respect to the Certificates, and of all conversions, exchanges and replacements of such
Certificates, as provided in this Ordinance.
-17-
(d) The Authorized Officer is hereby authorized and directed to execute and deliver
or cause the execution and delivery by the Mayor or the Mayor Pro Tem and the City Clerk of
the City, a Paying Agent/Registrar Agreement, specifying the duties and responsibilities of the
City and the Paying Agent/Registrar. The City hereby approves the form of Paying
Agent/Registrar Agreement, attached hereto as Exhibit B.
Section 5.2. Qualifications.
Each Paying Agent/Registrar shall be a commercial bank or trust company organized
under the laws of the State, or any other entity duly qualified and legally authorized to serve as
and perform the duties and services of paying agent and registrar for the Certificates.
Section 5.3. Maintaining Paving A eg nt/Registrar.
(a) At all times while any Certificates are outstanding, the City will maintain a
Paying AgentRegistrar that is qualified under Section 5.2 of this Ordinance.
(b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the
City will promptly appoint a replacement, provided no such resignation shall be effective until a
successor Paying Agent/Registrar has accepted the duties of Paying Agent/Registrar for the
Certificates.
Section 5.4. Termination.
The City reserves the right to terminate the appointment of any Paying Agent/Registrar
by (i) delivering to the entity whose appointment is to be terminated forty-five (45) days written
notice of the termination of the appointment and of the Paying Agent/Registrar Agreement,
stating the effective date of such termination, and (ii) appointing a successor Paying
Agent/Registrar; provided, that, no such termination shall be effective until a successor Paying
Agent/Registrar has assumed the duties of Paying Agent/Registrar for the Certificates.
Section 5.5. Notice of Change to Owners.
Promptly upon each change in the entity serving as Paying Agent/Registrar, the City will
cause notice of the change to be sent to each Owner by United States mail, first class, postage
prepaid, at the address in the Register, stating the effective date of the change and the name and
mailing address of the replacement Paying Agent/Registrar.
Section 5.6. Agreement to Perform Duties and Functions.
By accepting the appointment as Paying Agent/Registrar, the Paying Agent/Registrar is
deemed to have agreed to the provisions of this Ordinance and that it will perform the duties and
functions of Paying Agent!Registrar prescribed hereby and under the Paying Agent'Registrar
Agreement.
Section 5.7. Delivery of Records to Successor.
If a Paying Agent/Registrar is replaced, such Paying Agent/Registrar, promptly upon the
appointment of the successor, will deliver the Register (or a copy thereof) and all other pertinent
books and records relating to the Certificates to the successor Paying Agent/Registrar.
ARTICLE VI
FORM OF THE CERTIFICATES
Section 6.1. Form Generally.
(a) The Certificates, including the Registration Certificate of the Comptroller of
Public Accounts of the State, the Certificate of the Paying Agent/Registrar and the Assignment
form to appear on each of the Certificates, (i) shall be substantially in the form set forth in this
Article, with such appropriate insertions, omissions, substitutions, and other variations as are
permitted or required by this Ordinance, and (ii) may have such letters, numbers, or other marks
of identification (including identifying numbers and letters of the Committee on Uniform
Securities Identification Procedures of the American Bankers Association) and such legends and
endorsements (including any reproduction of an opinion of counsel) thereon as, consistently
herewith, may be determined by the City or by the officers executing such Certificates, as
evidenced by their execution thereof.
(b) The Certificates shall be typewritten, photocopied, printed, lithographed, or
engraved, and may be produced by any combination of these methods or produced in any other
similar manner, all as determined by the officers executing such Certificates, as evidenced by
their execution thereof.
Section 6.2. Form of the Certificates.
The form of the Certificates, including the form of the Registration Certificate of the
Comptroller of Public Accounts of the State of Texas, the form of Certificate of the Paying
Agent/Registrar and the form of Assignment appearing on the Certificates, shall be substantially
as set forth in the form of Pricing Certificate attached hereto as Exhibit A.
Section 6.3. CUSIP Registration.
The City may secure identification numbers through the CUSIP Global Services, which is
managed on behalf of the American Bankers Association by S&P Global Market Intelligence, or
another entity that provides securities identification numbers for municipal securities, and may
print such numbers on the face of the Certificates. It is expressly provided, however, that the
presence or absence of CUSIP numbers on the Certificates or any errors or omissions in the
printing of such number shall be of no significance or effect in regard to the legality thereof and
neither the City nor Bond Counsel to the City are to be held responsible for CUSIP numbers
incorrectly printed on the Certificates.
-19-
Section 6.4. Legal Opinion.
The approving legal opinion of Bond Counsel may be attached to or printed on the
reverse side of each Certificate over the certification of the City Clerk of the City, which may be
executed in facsimile.
Section 6.5. Bond Insurance.
If bond insurance is obtained by the Initial Purchaser, the Certificates may bear an
appropriate legend as provided by the insurer.
ARTICLE VII
SALE AND DELIVERY OF CERTIFICATES;
DEPOSIT OF PROCEEDS; OFFICIAL STATEMENT
Section 7.1. Sale of Certificates.
(a) The Certificates shall be sold by negotiated sale to the Initial Purchaser in
accordance with the terms of this Ordinance. As authorized by Chapter 1371, the Authorized
Officer is authorized to act on behalf of the City in selling and delivering the Certificates and in
carrying out the other procedures specified in this Ordinance, determining the price at which
each of the Certificates will be sold, the number and designation of each series or subseries of
Certificates to be issued, the form in which the Certificates shall be issued, the years and dates on
which the Certificates will mature, the principal amount to mature in each of such years, the
aggregate principal amount to be issued by the City, the rate of interest to be borne by each
maturity of the Certificates, the dates, prices and terms upon and at which the Certificates shall
be subject to redemption prior to maturity at the option of the City and shall be subject to
mandatory sinking fund redemption, the defeasance provisions and all other matters relating to
the issuance, sale and delivery of the Certificates, all of which shall be specified in the Pricing
Certificate; provided that the following conditions can be satisfied:
(i) [the price to be paid for the Certificates shall not be less than 90° o of the
aggregate original principal amount of the Certificates plus accrued interest thereon
from their date to their delivery;
(ii) the true interest costs for the Certificates shall not be greater than 4.50° o];
(iii) the aggregate principal amount of the Certificates authorized to be issued
for purposes described in Section 3.1 shall not exceed the maximum aggregate
principal amount described in Section 3.1;
(iv) no Certificate shall mature more than thirty (30) years from the date of
delivery thereof; and
(v) a bond purchase agreement for the Bonds shall have been signed by all
parties thereto indicating that the Bonds have been priced.
-20-
(b) All 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 Certificates. The Initial Certificate shall initially be registered in
the name of the Initial Purchaser, as applicable, or such other entity as may be specified in the
Pricing Certificate.
(c) The authority granted to the Authorized Officer under Sections 7.1(a) and 7.1(b)
shall expire on a date one year from the date of this Ordinance, unless otherwise extended by the
City by separate action.
(d) The Authorized Officer and all other officers of the City are authorized to take
such actions, to obtain such consents or approvals and to execute such documents, agreements,
certificates and receipts as they may deem necessary and appropriate in order to consummate the
delivery of the Certificates, pay the costs of issuance of the Certificates, and effectuate the terms
and provisions of this Ordinance.
Section 7.2. Official Statement.
The form and substance of the Preliminary Official Statement (and any addenda,
supplements or amendments thereto that are approved by the Authorized Officer), is hereby
ratified and approved and is deemed final within the meaning and for the purposes of
paragraph (b)(1) of Rule 15c2-12 under the Securities Exchange Act of 1934. The City hereby
authorizes the preparation of a final Official Statement reflecting the terms of the sale of the
Certificates and other relevant information. The use of such final Official Statement in the
reoffering of the Certificates by the Initial Purchaser is hereby approved and authorized. The
proper officials of the City are authorized to execute and deliver a certificate pertaining to such
Official Statement as prescribed therein, dated as of the date of payment for and delivery of the
Certificates.
Section 7.3. Deposit of Proceeds.
Proceeds from the sale of the Certificates, together with other funds of the City, if any,
shall, promptly upon receipt by the City, be applied as set out in the Pricing Certificate. Any
proceeds remaining after the accomplishment of such purposes, including interest earnings on
the investment of such proceeds, shall be deposited to the Interest and Sinking Fund.
Section 7.4. Control and Delivery of Certificates.
(a) The Mayor of the City is hereby authorized to have control of the Initial
Certificate and all necessary records and proceedings pertaining thereto pending investigation,
examination, and approval of the Attorney General of the State, registration by the Comptroller
of Public Accounts of the State and registration with, and initial exchange or transfer by, the
Paying Agent/Registrar.
(b) After registration by the Comptroller of Public Accounts of the State, delivery of
the Certificates shall be made to the Initial Purchaser under and subject to the general
supervision and direction of the Authorized Officer, against receipt by the City of all amounts
due to the City under the terms of sale.
-21-
(c) All officers of the City are authorized to execute such documents, certificates and
receipts and to make such elections with respect to the tax-exempt status of the Certificates, as
they may deem necessary to consummate the delivery of the Certificates.
ARTICLE VIII
REPRESENTATIONS AND COVENANTS
Section 8.1. Payment of the Certificates.
On or before each Interest Payment Date while any of the Certificates are outstanding and
unpaid, there shall be made available to the Paying Agent/Registrar, out of the Interest and
Sinking Fund, money sufficient to pay such interest on and principal of, redemption premium, if
any, and interest on the Certificates as will accrue or mature on the applicable Interest Payment
Date or date of prior redemption.
Section 8.2. Other Representations and Covenants.
(a) The City will faithfully perform, at all times, any and all covenants, undertakings,
stipulations, and provisions contained in this Ordinance and in each Certificate; the City will
promptly pay or cause to be paid the principal of, redemption premium, if any, and interest on
each Certificate on the dates and at the places and manner prescribed in such Certificate; and the
City will, at the times and in the manner prescribed by this Ordinance, deposit or cause to be
deposited the amounts of money specified by this Ordinance.
(b) The City is duly authorized under the laws of the State to issue the Certificates; all
action on its part for the creation and issuance of the Certificates has been duly and effectively
taken; and the Certificates in the hands of the Owners thereof are and will be valid and
enforceable obligations of the City in accordance with their terms.
ARTICLE IX
PROVISIONS CONCERNING EXCLUDABILITY
OF INTEREST FROM FEDERAL INCOME TAX
Section 9.1. General Tax Covenants.
The City intends that the interest on the Certificates be excludable from gross income for
federal income tax purposes pursuant to sections 103 and 141 through 150, inclusive, of the
Code. The City covenants and agrees not to take any action, or knowingly omit to take any
action within its control, that if taken or omitted, respectively, would (i) cause the interest on the
Certificates to be includable in the gross income, as defined in section 61 of the Code, for federal
income tax purposes or (ii) result in the violation of or failure to satisfy any applicable provision
of section 103 and 141 through 150, inclusive, of the Code. In particular, the City covenants and
agrees to comply with each requirement of this Article IX; provided, however, that the City will
not be required to comply with any particular requirement of this Article IX if the City has
received an opinion of nationally recognized bond counsel ("Counsel's Opinion") that (i) such
noncompliance will not adversely affect the excludability of interest on the Certificates from
-22-
gross income for federal income tax purposes or (ii) compliance with some other requirement
will satisfy the applicable requirements of the Code, in which case compliance with such other
requirement will constitute compliance with the corresponding requirement specified in this
Article IX.
Section 9.2. No Private Use or Payment and No Private Loan Financing.
The City covenants and agrees that it will make such use of the proceeds of the
Certificates, including interest or other investment income derived from Certificate proceeds,
regulate the use of property financed, directly or indirectly, with such proceeds, and take such
other and further action as may be required so that the Certificates will not be "private activity
bonds" within the meaning of section 141 of the Code. Moreover, the City will certify, through
an Authorized Officer, employee or agent, that, based upon all facts and estimates known or
reasonably expected to be in existence on the date the Certificates are delivered, the proceeds of
the Certificates will not be used in a manner that would cause the Certificates to be "private
activity bonds" within the meaning of section 141 of the Code.
Section 9.3. No Federal Guarantee.
The City covenants and agrees not to take any action, or knowingly omit to take any
action within its control, that, if taken or omitted, respectively, would cause the Certificates to be
"federally guaranteed" within the meaning of section 149(b) of the Code, except as permitted by
section 149(b)(3) of the Code.
Section 9.4. Certificates Are Not Hedge Bonds.
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 Certificates to
be "hedge bonds" within the meaning of section 149(g) of the Code.
Section 9.5. No -Arbitrage Covenant.
The City covenants and agrees that it will make such use of the proceeds of the
Certificates, including interest or other investment income derived from Certificate proceeds,
regulate investments of proceeds of the Certificates, and take such other and further action as
may be required so that the Certificates will not be "arbitrage bonds" within the meaning of
section 148(a) of the Code. Moreover, the City will certify, through an Authorized Officer,
employee or agent that, based upon all facts and estimates known or reasonably expected to be in
existence on the date the Certificates are delivered, the proceeds of the Certificates will not be
used in a manner that would cause the Certificates to be "arbitrage bonds" within the meaning of
section 148(a) of the Code.
Section 9.6. Arbitrage Rebate.
If the City does not qualify for an exception to the requirements of section 148(0 of the
Code relating to the required rebate to the United States, the City will take all steps necessary to
comply with the requirement that certain amounts earned by the City on the investment of the
"gross proceeds" of the Certificates (within the meaning of section 148(f)(6)(B) of the Code), be
-23-
rebated to the federal government. Specifically, the City will (i) maintain records regarding the
investment of the gross proceeds of the Certificates as may be required to calculate the amount
earned on the investment of the gross proceeds of the Certificates separately from records of
amounts on deposit in the funds and accounts of the City allocable to other bond issues of the
City or money that does not represent gross proceeds of any Certificates of the City, (ii)
determine at such times as are required by applicable Regulations, the amount earned from the
investment of the gross proceeds of the Certificates that is required to be rebated to the federal
government, and (iii) pay, not less often than every fifth anniversary date of the delivery of the
Certificates or on such other dates as may be permitted under 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 Certificates that might result in a reduction
in the amount required to be paid to the federal government because such arrangement results in
a smaller profit or a larger loss than would have resulted if the arrangement had been at arm's
length and had the yield on the issue not been relevant to either party.
Section 9.7. Information Reporting.
The City covenants and agrees to file or cause to be filed with the Secretary of the
Treasury, not later than the 15th day of the second calendar month after the close of the calendar
quarter in which the Certificates are issued, an information statement concerning the Certificates,
all under and in accordance with section 149(e) of the Code.
Section 9.8. Record Retention.
The City will retain all pertinent and material records relating to the use and expenditure
of the proceeds of the Certificates until three years after the last Certificate is redeemed or paid at
maturity, or such shorter period as authorized by subsequent guidance issued by the Department
of the Treasury, if applicable. All records will be kept in a manner that ensures their complete
access throughout the retention period. For this purpose, it is acceptable that such records are
kept either as hardcopy books and records or in an electronic storage and retrieval system,
provided that such electronic system includes reasonable controls and quality assurance
programs that assure the ability of the City to retrieve and reproduce such books and records in
the event of an examination of the Certificates by the Internal Revenue Service.
Section 9.9. Registration.
The Certificates will be issued in registered form.
Section 9.10. Deliberate Actions.
The City will not take a deliberate action (as defined in Section 1.141-2(d)(3) of the
Regulations) that causes the Certificates to fail to meet any requirement of section 141 of the
Code after the issue date of the Certificates unless an appropriate remedial action is permitted by
Section 1.141-12 of the Regulations, the City takes such remedial action, and the City receives a
Counsel's Opinion that such remedial action cures any failure to meet the requirements of
section 141 of the Code.
-24-
Section 9.11. Continuing Obligation.
Notwithstanding any other provision of this Ordinance, the City's obligations under the
covenants and provisions of this Article IX will survive the defeasance and discharge of the
Certificates for so long as such matters are relevant to the excludability of interest on the
Certificates from gross income for federal income tax purposes.
ARTICLE X
DISCHARGE
Section 10.1. Discharge.
The Certificates may be defeased, discharged or refunded in any manner now or hereafter
permitted by applicable law.
ARTICLE XI
CONTINUING DISCLOSURE UNDERTAKING
Section 11.1. Annual Reports.
(a) The City shall provide annually to the MSRB, (i) within six (6) months after the
end of each Fiscal Year of the City ending in or after 2020, financial information and operating
data with respect to the City of the general type included in the Official Statement under Tables 1
through 7 and Tables 9 through 16, and including financial statements of the City if audited
financial statements of the City are then available, and (ii) if not provided as part of such
financial information and operating data, audited financial statements of the City, when and if
available. Any financial statements to be provided shall be (i) prepared in accordance with the
accounting principles described in the financial statements for the most recently concluded Fiscal
Year, or such other accounting principles as the City may be required to employ, from time to
time, by State law or regulation, and (ii) audited, if the City commissions an audit of such
statements and the audit is completed within the period during which they must be provided. If
the audit of such financial statements is not complete within six (6) months after any such Fiscal
Year end, then the City shall file unaudited financial statements within such 6-month period and
audited financial statements for the applicable Fiscal Year, when and if the audit report on such
financial statements becomes available.
(b) If the City changes its Fiscal Year, it will notify the MSRB of the change (and of
the date of the new Fiscal Year end) prior to the next date by which the City otherwise would be
required to provide financial information and operating data pursuant to this Section.
(c) The financial information and operating data to be provided pursuant to this
Section may be set forth in full in one or more documents or may be included by specific
reference to any document (including an official statement or other offering document, if it is
available from the MSRB) that theretofore has been provided to the MSRB or filed with the
SEC.
-25-
Section 11.2. Event Notices.
(a) The City shall provide the following to the MSRB, in an electronic format as
prescribed by the MSRB, in a timely manner not in excess of ten (10) business days after the
occurrence of the event, notice of any of the following events with respect to the Certificates:
Principal and interest payment delinquencies;
Non-payment related defaults, if material;
Unscheduled draws on debt service reserves reflecting financial
difficulties;
Unscheduled draws on credit enhancements reflecting financial
difficulties;
(5) Substitution of credit or liquidity providers, or their failure to perform;
(6) Adverse tax opinions, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue
(IRS Form 5701-TEB) or other material notices or determinations with
respect to the tax status of Certificates, or other material events affecting
the tax status of the Certificates;
(7) Modifications to rights of the holders of the Certificates, if material;
(8) Certificate calls, if material, and tender offers;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the
Certificates, if material;
(11) Rating changes;
(12) Bankruptcy, insolvency, receivership or similar event of the City;
Note to paragraph 12: For the purposes of the event identified in paragraph
12 of this section, the event is considered to occur when any of the
following occur: the appointment of a receiver, fiscal agent or similar
officer for the City in a proceeding under the U.S. Bankruptcy Code or in
any other proceeding under state or federal law in which a court or
governmental authority has assumed jurisdiction over substantially all of
the assets or business of the City, or if such jurisdiction has been assumed
by leaving the existing governing body and officials or officers in
possession but subject to the supervision and orders of a court or
governmental authority, or the entry of an order confirming a plan of
reorganization, arrangement or liquidation by a court or governmental
-26-
authority having supervision or jurisdiction over substantially all of the
assets or business of the City.
(13) The consummation of a merger, consolidation, or acquisition involving the
City or the sale of all or substantially all of the assets of the City, other
than in the ordinary course of business, the entry into a definitive
agreement to undertake such an action or the termination of a definitive
agreement relating to any such actions, other than pursuant to its terms, if
material;
(14) Appointment of successor or additional trustee or the change of name of a
trustee, if material;
(15) Incurrence of a Financial Obligation of the City, if material, or agreement
to covenants, events of default, remedies, priority rights, or other similar
terms of a Financial Obligation of the City, any of which affect security
holders, if material; and
(16) Default, event of acceleration, termination event, modification of terms, or
other similar events under the terms of a Financial Obligation of the City,
any of which reflect financial difficulties.
Note to paragraphs (15) and (16): For purposes of the events identified in
paragraphs (15) and (16) of this section and in the definition of Financial
Obligation in Section 1.1, the City intends the words used in such
paragraphs to have the meanings ascribed to them in the 2018 Release and
any further amendments or written guidance provided by the SEC or its
staff with respect to the amendments to the Rule effected by the 2018
Release.
(b) The City shall notify the MSRB, in a timely manner, of any failure by the City to
provide financial information or operating data in accordance with Section I L I. All documents
provided to the MSRB pursuant to this section shall be accompanied by identifying information
as prescribed by the MSRB.
Section 11.3. Limitations, Disclaimers and Amendments.
(a) The City shall be obligated to observe and perform the covenants specified in this
Article for so long as, but only for so long as, the City remains an "obligated person" with
respect to the Certificates within the meaning of the Rule, except that the City in any event will
give notice of any redemption calls and any defeasances that cause the City to no longer be an
"obligated person."
(b) The provisions of this Article are for the sole benefit of the Owners and beneficial
owners of the Certificates, and nothing in this Article, express or implied, shall give any benefit
or any legal or equitable right, remedy, or claim hereunder to any other person. The City
undertakes to provide only the financial information, operating data, financial statements, and
notices which it has expressly agreed to provide pursuant to this Article and does not hereby
-27-
undertake to provide any other information that may be relevant or material to a complete
presentation of the City's financial results, condition, or prospects or hereby undertake to update
any information provided in accordance with this Article or otherwise, except as expressly
provided herein. The City does not make any representation or warranty concerning such
information or its usefulness to a decision to invest in or sell Certificates at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER
OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN
CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM
ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITH OR WITHOUT FAULT
ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY RIGHT
AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON
ACCOUNT OF ANY SUCH BREACFI SHALL BE LIMITED TO AN ACTION FOR
MANDAMUS OR SPECIFIC PERFORMANCE.
(c) No default by the City in observing or performing its obligations under this
Article shall constitute a breach of or default under this Ordinance for purposes of any other
provisions of this Ordinance.
(d) Nothing in this Article is intended or shall act to disclaim, waive, or otherwise
limit the duties of the City under federal and State securities laws.
(e) The provisions of this Article may be amended by the City from time to time to
adapt to changed circumstances that arise from a change in legal requirements, a change in law,
or a change in the identity, nature, status, or type of operations of the City, but only if (i) the
provisions of this Article, as so amended, would have permitted an underwriter to purchase or
sell Certificates in the primary offering of the Certificates in compliance with the Rule, taking
into account any amendments or interpretations of the Rule to the date of such amendment, as
well as such changed circumstances, and (ii) either (A) the Owners of a majority in aggregate
principal amount (or any greater amount required by any other provisions of this Ordinance that
authorizes such an amendment) of the outstanding Certificates consent to such amendment or (B)
a person that is unaffiliated with the City (such as nationally recognized bond counsel)
determines that such amendment will not materially impair the interests of the Owners and
beneficial owners of the Certificates. The provisions of this Article may also be amended from
time to time or repealed by the City if the SEC amends or repeals the applicable provisions of the
Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and to
the extent that reservation of the City's right to do so would not prevent the underwriter of the
initial public offering of the Certificates from lawfully purchasing or selling Certificates in such
offering. If the City so amends the provisions of this Article, it shall include with any amended
financial information or operating data next provided in accordance with Section 11.1 an
explanation, in narrative form, of the reasons for the amendment and of the impact of any change
in the type of financial information or operating data so provided.
Section l l.4. Amendments to the Rule.
In the event the Authorized Officer, in consultation with Bond Counsel and the City's
financial advisor, determines that it is necessary or desirable to amend the provisions of this
-28-
Article XI in order to facilitate compliance with amendments to the Rule and related guidance
from the SEC, the Authorized Officer may make such changes in the Pricing Certificate for the
Certificates, and such amendments are hereby authorized and shall be deemed effective as set
forth in the Pricing Certificate.
ARTICLE XII
MISCELLANEOUS
Section 12.1. Changes to Ordinance.
The City Attorney or Bond Counsel is hereby authorized to make changes to the terms of
this Ordinance if necessary or desirable to carry out the purposes hereof or in connection with the
approval of the issuance of the Certificates by the Attorney General of the State.
[Include provisions allowing for other amendments to this Ordinance with consent of
owners?]
Section 12.2. Related Matters.
To satisfy in a timely manner all of the City's obligations under this Ordinance, the
Mayor, the City Manager, the Finance Director, the City Clerk and all other appropriate officers
and agents of the City are hereby authorized and directed to do any and all things necessary
and/or convenient to carry out the terms and purposes of this Ordinance.
Section 12.3. Individuals Not Liable.
No covenant, stipulation, obligation or agreement herein contained shall be deemed to be
a covenant, stipulation, obligation or agreement of any member of City Council or agent or
employee of City Council or of the City in his or her individual capacity, and neither the
members of City Council nor any officer thereof, nor any agent or employee of City Council or
of the City, shall be liable personally on the Certificates, or be subject to any personal liability or
accountability by reason of the issuance thereof.
Section 12.4. Severability and Savings.
If any section, paragraph, clause or provision of this Ordinance shall for any reason be
held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph,
clause or provision shall not affect any of the remaining provisions of this Ordinance.
Section 12.5. Repealer.
All ordinances or resolutions, or parts thereof, heretofore adopted by the City and
inconsistent with the provisions of this Ordinance are hereby repealed to the extent of such
conflict.
KT
Section 12.6. Force and Effect.
This Ordinance shall be in full force and effect from and after its final passage, and it is
so ordained.
[Execution Page Follows]
-30-
INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the
City of Baytown this the 131h day of February, 2020.
J
B NDON CAPETILLO, Mayo
ATTEST:
LETICIA BRYSCH, Ci lerk
APPROVED AS TO FORM:
11
GNACIO RAMIREZ, Sb City Attorney
Signature Page to
City of Baytown Ordinance
EXHIBIT A to Ordinance
FORM OF PRICING CERTIFICATE
PRICING CERTIFICATE
The undersigned, [Mayor/City Manager/City Assistant Manager/Director of Finance],
being an Authorized Officer of the City of Baytown, Texas (the "City"), pursuant to Section 7.1
of the Ordinance adopted on February 13, 2020 (the "Ordinance") authorizing the issuance of
"CITY OF BAYTOWN, TEXAS COMBINATION TAX AND REVENUE CERTIFICATES
OF OBLGIATION, SERIES 2020" (the "Certificates") does hereby approve the following terms
of the Certificates:
1. The total principal amount of the Certificates is $ which is less
than or equal to $20,500,000, the maximum aggregate par amount of Certificates authorized
pursuant to the Ordinance.
2. The Certificates are hereby sold to Citigroup Global Markets, as "Initial Purchaser",
for a purchase price of $ representing the principal amount of the Certificates
of $ , [plus/less] a [premium/discount] of $ , and less an
Underwriter's discount of $
3. The Dated Date of the Certificates is . The Closing Date of the
Certificates is scheduled for Interest shall begin to accrue on the
Closing Date, to be paid semiannually on and of each year, commencing on
4. The maturity dates, principal amounts, redemption provisions, interest rates, yields,
and prices for the Certificates are as set forth below:
Maturity Principal Interest Initial
( ) Amount ($) Rate ° o Yield % Price
Optional Redemption. The City reserves the right to redeem Certificates maturing on or after
1, 20_, in whole or part, in principal amount of $5,000 or any integral multiple therof,
on 1, 20 , or any date thereafter at the redemption price of par plus accrued
interest to the redemption date.
Mandatory Redemption. The Certificates stated to mature on 1, 20_, 1,
20 _, and 1, 20 are referred to herein as the "Term Certificates". The Term
Certificates are subject to mandatory sinking fund redemption prior to their Stated Maturities
from money required to be deposited in the Interest and Sinking Fund for such purpose and shall
be redeemed in part, by lot or other customary method, at the principal amount thereof plus
accrued interest to the date of redemption in the following principal amounts on 1 in
each of the years as set forth below:
$ Term Bond Stated to
Mature 1,20
Principal
Year Amount ($)
*
$ Term Bond Stated to
Mature 1,20
Principal
Year Amount ($)
*
*Payable at Stated Maturity.
$ Term Bond Stated to
Mature 1,20
Principal
Year Amount ($)
*
5. The undersigned does hereby find, certify and represent that the foregoing terms of
the Certificates satisfy the parameters contained in Subsections 7.1(a)(i), (ii), (iii), and (iv) of the
Ordinance, and that on or prior to the date hereof, a bond purchase agreement for the Baytown
Municipal Development District Hotel Revenue Bonds, Series 2020 (the "Bonds") has been
signed by all parties thereto indicating that the Bonds have been priced.
6. The proceeds of the Certificates shall be applied as follows:
(i) The proceeds of the Certificates shall be the amount of $ ,
consisting of $ principal amount of Certificate proceeds plus/less
premium/discount received from the sale of the Certificates in the amount of
$ , and such proceeds shall be deposited into the City Facilities Fund held by
the trustee bank acting on behalf of the holders of the Bonds to be used to pay contractual
obligations incurred for the City Facilities described in Section 3.1 of the Ordinance[; and
(ii) amounts remaining after accomplishing the above described purpose shall
be used to pay contractual obligations incurred relating to issuance of the Certificates].
7. The terms of the Certificates are the most reasonable and advantageous and are in the
best interest of the City.
(Remainder of this page intentionally left blank)
-2-
EXECUTED AND DELIVERED this
CITY OF BAYTOWN, TEXAS
Authorized Officer
Signature Page to Pricing Certificate
City of Baytown, Texas Combination Tax and Revenue
Certificates of Obligation, Series 2020
Exhibit A to Ordinance
EXHIBIT A to Pricing Certificate
FORM OF THE CERTIFICATES
(a) Form of Certificate.
REGISTERED REGISTERED
NO. $
United States of America
State of Texas
Counties of Harris and Chambers
CITY OF BAYTOWN, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATE OF OBLIGATION
SERIES 2020
INTEREST RATE: MATURITY DATE: CLOSING DATE:' CUSIP NO.:
00
The City of Baytown (the "City"), in the Counties of Harris and Chambers, State of
Texas, for value received, hereby promises to pay to
or registered assigns, on the maturity date specified above, the sum of
DOLLARS
and to pay interest on such principal amount from the later of the Closing Date specified above
or the most recent interest payment date to which interest has been paid or provided for until
payment of such principal amount has been paid or provided for, at the per annum rate of interest
specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest
to be paid semiannually Z and 3 of each year, commencing on 4
The principal of this Certificate shall be payable without exchange or collection charges
in lawful money of the United States of America upon presentation and surrender of this
Certificate at the corporate trust office of The Bank of New York Mellon Trust Company, N.A.,
Dallas, Texas, or such other location designated by the Paying Agent/Registrar (the "Designated
Payment/Transfer Office"), of the Paying Agent/Registrar or, with respect to a successor Paying
Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest on this
Certificate is payable by check dated as of the interest payment date, and will be mailed by the
Paying Agent/Registrar to the registered owner at the address shown on the registration books
Insert from Pricing Certificate.
Z Insert from Pricing Certificate.
3 Insert from Pricing Certificate.
4 Insert from Pricing Certificate.
M1
kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable
to the Paying Agent/Registrar and the registered owner; provided, however, such registered
owner shall bear all risk and expenses of such customary banking arrangement. For the purpose
of the payment of interest on this Certificate, the registered owner shall be the person in whose
name this Certificate is registered at the close of business on the "Record Date," which shall be
the fifteenth day of the month next preceding such interest payment date. In the event of a
nonpayment of interest on a scheduled payment date, and for thirty (30) days thereafter, a new
record date for such interest payment (a "Special Record Date") will be established by the
Paying Agent/Registrar, if and when funds for the payment of such interest have been received
from the City. Notice of the Special Record Date and of the special payment date of the past due
interest (the "Special Payment Date," which date shall be fifteen (15) days after the Special
Record Date) shall be sent at least five (5) business days prior to the Special Record Date by
United States mail, first class, postage prepaid, to the address of each owner of a Certificate
appearing on the books of the Paying Agent/Registrar at the close of business on the last day
next preceding the date of mailing of such notice.
If the date for the payment of the principal of or interest on this Certificate is not a
Business Day, the date for such payment shall be the next succeeding day which is not a
Saturday, Sunday or legal holiday, or day on which banking institutions in the State of Texas or
the city in which the Designated Payment/Transfer Office of the Paying Agent/Registrar is
located are generally authorized or obligated by law or executive order to close (a "Business
Day"), and payment on such date shall for all purposes be deemed to have been made on the
original date payment was due.
This Certificate [is dated and]5 is one of a series of fully
registered certificates specified in the title hereof issued in the aggregate principal amount of
$ 6 (herein referred to as the "Certificates") pursuant to a certain ordinance (the
"Certificate Ordinance") adopted by the City Council of the City and a pricing certificate
executed pursuant to the Certificate Ordinance (the "Pricing Certificate" and together with the
Certificate Ordinance, the "Ordinance") for the purpose of providing for the payment of
contractual obligations to be incurred in connection with the planning, acquisition, construction,
equipping, expansion, repair, and/or renovation of City -owned public property, including (1) a
convention center consisting of public conference rooms and meeting space of approximately
33,600 square feet, including a ballroom of approximately 12,000 square feet (the "Convention
Center"), (2) public facilities and infrastructure ancillary to the conference rooms and meeting
space, (3) a proportionate interest in elements common to the Convention Center and the hotel
that will be interconnected with the Convention Center (the "Hotel"), such as the foundation,
HVAC system, mechanical, electrical, and plumbing systems, roof, and other similar structural
elements, (4) areas common to the Convention Center and the Hotel, (5) the completion of a
water and wastewater preliminary engineering report for the design of a water line extension and
replacement of an existing wastewater lift station and force main, and (6) a parking lot or parking
structure with approximately 320 spaces adjacent to the Convention Center.
5 Delete if interest on the Certificates accrues from the Dated Date; insert from Pricing Certificate.
6 Insert from Pricing Certificate.
-5-
The City has reserved the right to redeem the Certificates maturing on and after [[Date],
20 , in whole or from time to time in part before their respective Stated Maturity dates, on
[Date], 207 or on any date thereafter, at a redemption price equal to the principal amount
thereof plus accrued interest to the date of redemption. If less than all of the Certificates are to be
redeemed, the City shall determine the maturity or maturities and the amounts thereof to be
redeemed and shall direct the Paying Agent/Registrar to call by lot the Certificates, or portions
thereof, within such maturity and in such principal amounts, for redemption.
[Certificates maturing on is (the "Term Certificates") are subject to mandatory
sinking fund redemption prior to their Stated Maturity, and will be redeemed by the City, in part
at a redemption price equal to the principal amount thereof, without premium, plus interest
accrued to the redemption date, on the dates and in the principal amounts shown in the following
schedule:
$ 9 Term Certificate Maturing 10
Mandatory Redemption Date
11
13
Redemption Date
12
14
The Paying Agent"Registrar will select for redemption by lot, or by any other customary
method that results in a random selection the specific Term Certificates (or with respect to Term
Certificates having a denomination in excess of $5,000, each $5,000 portion thereof) to be
redeemed by mandatory redemption. The principal amount of Term Certificates required to be
redeemed on any redemption date pursuant to the foregoing mandatory sinking fund redemption
provisions hereof shall be reduced, at the option of the City, by the principal amount of any Term
Certificates which, at least forty-five (45) days prior to the mandatory sinking fund redemption
date (i) shall have been acquired by the City and delivered to the Paying Agent/Registrar for
cancellation, or (ii) shall have been redeemed pursuant to the optional redemption provisions
hereof and not previously credited to a mandatory sinking fund redemption.] 15
Not less than thirty (30) days prior to a redemption date for the Certificates, the City shall
cause a notice of redemption to be sent by United States mail, first class, postage prepaid, to the
Owners of the Certificates to be redeemed at the address of the Owner appearing on the
registration books of the Paying Agent/Registrar at the close of business on the business day next
preceding the date of mailing such notice.
The City reserves the right to give notice of its election or direction to redeem
Certificates pursuant to an optional redemption conditioned upon the occurrence of subsequent
Insert from Pricing Certificate.
8 Insert from Pricing Certificate.
9 Insert from Pricing Certificate.
10 Insert from Pricing Certificate.
11 Insert from Pricing Certificate.
12 Insert from Pricing Certificate.
13 Insert from Pricing Certificate.
14 Insert from Pricing Certificate.
15 Delete if Term Certificates are not issued.
10
events. Such notice may state (i) that the redemption is conditioned upon the deposit of money
and/or authorized securities, in an amount equal to the amount necessary to effect the
redemption, with the Paying Agent/Registrar, or such other entity as may be authorized by law,
no later than the redemption date, or (ii) that the City retains the right to rescind such notice at
any time on or prior to the scheduled redemption date if the City delivers a certificate of the City
to the Paying Agent/Registrar instructing the Paying Agent/Registrar to rescind the redemption
notice and such notice and redemption shall be of no effect if such money and/or authorized
securities are not so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give
prompt notice of any such rescission of a conditional notice of redemption to the affected
Owners. Any Certificates subject to conditional redemption and such redemption has been
rescinded shall remain outstanding and the rescission of such redemption shall not constitute an
event of default.
Any notice so mailed shall be conclusively presumed to have been duly given, whether or
not the registered owner receives such notice. Notice having been so given and subject, in the
case of an optional redemption, to any rights or conditions reserved by the City in the notice, the
Certificates called for redemption shall become due and payable on the specified redemption
date, and notwithstanding that any Certificate or portion thereof has not been surrendered for
payment, interest on such Certificates or portions thereof shall cease to accrue.
As provided in the Ordinance, and subject to certain limitations therein set forth, this
Certificate is transferable upon surrender of this Certificate for transfer at the Designated
Payment/Transfer Office of the Paying Agent/Registrar with such endorsement or other evidence
of transfer as is acceptable to the Paying Agent/Registrar; thereupon, one or more new fully
registered Certificates of the same stated maturity, of authorized denominations, bearing the
same rate of interest, and for the same aggregate principal amount will be issued to the
designated transferee or transferees.
The City, the Paying Agent/Registrar, and any other person may treat the person in whose
name this Certificate is registered as the owner hereof for the purpose of receiving payment as
herein provided (except interest shall be paid to the person in whose name this Certificate is
registered on the Record Date) and for all other purposes, whether or not this Certificate be
overdue, and neither the City nor the Paying Agent/Registrar shall be affected by notice to the
contrary.
IT IS HEREBY certified, recited and covenanted that this Certificate has been duly and
validly issued and delivered; that all acts, conditions and things required or proper to be
performed, to exist and to be done precedent to or in the issuance and delivery of this Certificate
have been performed, exist and have been done in accordance with law; that annual ad valorem
taxes, within the limits prescribed by law, sufficient to provide for the payment of the interest on
and principal of this Certificate, as such interest comes due and such principal matures, have
been levied and ordered to be levied against all taxable property in the City.
IT IS ALSO HEREBY certified, recited and represented that $100,000 annually of the
revenues derived from the hotel occupancy tax imposed by the City pursuant to Chapter 351,
Texas Tax Code and collected from the Hotel (the "Hotel HOT") as authorized by Chapter 351,
Texas Tax Code, shall be pledged for payment of the interest on and principal of this Certificate;
-7-
provided, however, that such pledge is and shall be junior and subordinate in all respects to the
pledge of the Hotel HOT to the payment of all outstanding obligations of the City and any
obligation of the City, whether authorized heretofore or hereafter, which the City designates as
having a pledge senior to the pledge of the Hotel HOT to the payment of the Certificates. The
City also reserves the right to issue, for any lawful purpose at any time, in one or more
installments, bonds, certificates of obligation and other obligations of any kind payable in whole
or in part from the Hotel HOT, secured by a pledge of the Hotel HOT that may be prior and
superior in right to, on a parity with, or junior and subordinate to the pledge of the Hotel HOT
securing the Certificates.
IT IS FURTHER certified, recited and represented that the revenues to be derived from
the operation of the City's waterworks and sanitary sewer system, after the payment of all
operation and maintenance expenses thereof (the "Net Revenues"), are pledged to the payment of
the principal of and interest on the Certificates in an amount not to exceed $1,000; provided,
however, that such pledge is junior and subordinate in all respects to the pledge of the Net
Revenues to the payment of all outstanding obligations of the City and any obligation of the
City, whether authorized heretofore or hereafter, which the City designates as having a pledge
senior to the pledge of the Net Revenues to the payment of the Certificates. The City also
reserves the right to issue, for any lawful purpose at any time, in one or more installments,
bonds, certificates of obligation and other obligations of any kind payable in whole or in part
from the Net Revenues, secured by a pledge of the Net Revenues that may be prior and superior
in right to, on a parity with, or junior and subordinate to the pledge of the Net Revenues securing
the Certificates.
IN WITNESS WHEREOF, the City has caused this Certificate to be duly executed under
its official seal in accordance with law.
City Clerk Mayor
City of Baytown, Texas City of Baytown, Texas
[SEAL]
(b) Form of Comptroller's Registration Certificate.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER §
OF PUBLIC ACCOUNTS & REGISTER NO.
THE STATE OF TEXAS
I HEREBY CERTIFY THAT this Certificate has been examined, certified as to validity,
and approved by the Attorney General of the State of Texas and that this Certificate has been
registered by the Comptroller of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL OF OFFICE this
in
[SEAL]
Comptroller of Public Accounts
of the State of Texas
(c) Form of Certificate of Pang Agent/Registrar.
CERTIFICATE OF PAYING AGENT/REGISTRAR
This is one of the Certificates referred to in the within mentioned Ordinance. The series
of Certificates of which this Certificate is a part was originally issued as one Initial Certificate
which was approved by the Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State of Texas.
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Paying Agent/Registrar
Date: ... ........... _ By:
Authorized Signatory
(d) Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto (print or
typewrite name, address and Zip Code of transferee):
(Social Security or other identifying number: ) the within Certificate
and all rights hereunder and hereby irrevocably constitutes and appoints
attorney to transfer the within Certificate on the books kept for
registration hereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed By:
Authorized Signatory
NOTICE: The signature on this Assignment
must correspond with the name of the registered
owner as it appears on the face of the within
Certificate in every particular and must be
guaranteed in a manner acceptable to the
Paying Agent/Registrar.
(e) The Initial Certificate shall be in the form set forth in paragraphs (a), (b) and (d)
of this Section, except for the following alterations:
-9-
(i) immediately under the name of the Certificate the headings
"INTEREST RATE" and "MATURITY DATE" shall both be completed with the
expression "As Shown Below" and "CUSIP NO. " deleted; and
(ii) in the first paragraph of the Certificate, the words "on the maturity
date specified above, the sum of DOLLARS" shall be
deleted and the following will be inserted: "or
the principal installments and bearing interest
the following schedule:"
[ ] in each of the years, in
at the per annum rates set forth in
(Information to be inserted from the Pricing Certificate)
(iii) the Initial Certificate shall be numbered I-1.
-10-
EXHIBIT B to Ordinance
PAYING AGENT.. REGISTRAR AGREEMENT
between
CITY OF BAYTOWN, TEXAS
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
Pertaining to
City of Baytown, Texas
Combination Tax and Revenue
Certificates of Obligation, Series 2020
Dated as of [12020
TABLE OF CONTENTS
ARTICLE I APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR.................I
Section1.01.
Appointment.................................................................................................... I
Section 1.02.
Compensation.................................................................................................. I
ARTICLE II DEFINITIONS...........................................................................................................2
Section2.01.
Definitions.......................................................................................................2
ARTICLE III PAYING AGENT.....................................................................................................3
Section 3.01.
Duties of Paying Agent....................................................................................3
Section3.02.
Payment Dates.................................................................................................3
ARTICLE IV REGISTRAR............................................................................................................3
Section 4.01.
Transfer and Exchange....................................................................................3
Section 4.02.
The Certificates................................................................................................4
Section4.03.
Form of Register..............................................................................................4
Section4.04.
List of Owners.................................................................................................4
Section 4.05.
Cancellation of Certificates.............................................................................4
Section 4.06.
Mutilated, Destroyed, Lost, or Stolen Certificates..........................................5
Section 4.07.
Transaction Information to Issuer....................................................................5
ARTICLE V THE BANK...............................................................................................................5
Section5.01.
Duties of Bank.................................................................................................5
Section 5.02.
Reliance on Documents, Etc............................................................................5
Section 5.03.
Recitals of Issuer..............................................................................................6
Section 5.04.
May Hold Certificates......................................................................................6
Section 5.05.
Money Held by Bank.......................................................................................7
Section 5.06.
Indemnification................................................................................................7
Section5.07.
Interpleader......................................................................................................7
ARTICLE VI MISCELLANEOUS PROVISIONS........................................................................8
Section6.01.
Amendment......................................................................................................8
Section6.02.
Assignment......................................................................................................8
Section6.03.
Notices.............................................................................................................8
Section 6.04.
Bank to Give Notice of Change.......................................................................8
Section 6.05.
Anti -Boycott Verification................................................................................8
Section 6.06.
Iran, Sudan and Foreign Terrorist Organizations............................................9
Section 6.07.
Form 1295 Exemption.....................................................................................9
Section 6.08.
Effect of Headings...........................................................................................9
Section 6.09.
Successors and Assigns...................................................................................9
Section6.10.
Separability....................................................................................................10
Section 6.11.
Benefits of Agreement...................................................................................10
Section 6.12.
Entire Agreement...........................................................................................10
Section 6.13.
Counterparts...................................................................................................10
Section6.14.
Termination....................................................................................................10
Section 6.15.
Merger, Conversion, Consolidation or Succession........................................11
Section 6.16.
Governing Law..............................................................................................11
Section 6.17.
Electronic Means...........................................................................................11
Section 6.18.
Resignation or Removal of the Bank.............................................................12
Annex A - Schedule of Fees for Service as Paying Agent./Registrar
-11-
PAYING AGENT/ REGISTRAR AGREEMENT
THIS PAYING AGENT/REGISTRAR AGREEMENT (this "Agreement"), dated as of
[ 15 2020, is by and between CITY OF BAYTOWN, TEXAS (the "Issuer") and THE
BANK OF NEW YORK MELLON TRUST COMPANY, N.A., Dallas, Texas (the "Bank"), a
national banking association duly organized and existing under the laws of the United States of
America.
WHEREAS, the Issuer has duly authorized and provided for the issuance of its City of
Baytown, Texas Combination Tax and Revenue Certificates of Obligation, Series 2020, dated
1, 2020 (the "Certificates"), to be issued as registered securities without coupons;
WHEREAS, all things necessary to make the Certificates the valid obligations of the
Issuer, in accordance with their terms, will be taken upon the issuance and delivery thereof;
WHEREAS, the Issuer desires that the Bank act as the Paying Agent of the Issuer in
paying the principal, redemption premium, if any, and interest on the Certificates, in accordance
with the terms thereof, and that the Bank act as Registrar for the Certificates; and
WHEREAS, the Issuer has duly authorized the execution and delivery of this Agreement,
and all things necessary to make this Agreement the valid agreement of the Issuer, in accordance
with its terms, have been done.
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE I
APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR
Section 1.01. Appointment.
(a) The Issuer hereby appoints the Bank to act as Paying Agent with respect to the
Certificates in paying to the Owners of the Certificates the principal, redemption premium, if
any, and interest on all or any of the Certificates.
(b) The Issuer hereby appoints the Bank as Registrar with respect to the Certificates.
(c) The Bank hereby accepts its appointment, and agrees to act as, the Paying Agent
and Registrar.
Section 1.02. Compensation.
(a) As compensation for the Bank's services as Paying Agent/Registrar, the Issuer
hereby agrees to pay the Bank the fees and amounts set forth in Annex A.
(b) In addition, the Issuer agrees to reimburse the Bank upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Bank in accordance
with any of the provisions hereof, including the reasonable compensation and the expenses and
disbursements of its agents and counsel.
ARTICLE II
DEFINITIONS
Section 2.01. Definitions.
The terms "Agreement," "Bank," "Certificates," and "Issuer" have the meanings assigned
them in the recitals hereto. Capitalized terms used herein and not defined herein shall have the
meanings assigned in the Certificate Ordinance (as hereinafter defined). For all purposes of this
Agreement, except as otherwise expressly provided or unless the context otherwise requires, the
following terms have the following meanings when used in this Agreement:
"Bank Office" means the Bank's office in Dallas, Texas. The Bank will notify the Issuer
in writing of any change in location of the Bank Office.
"Certificate Ordinance" means the ordinance of the City Council of the Issuer authorizing
the issuance and delivery of the Certificates.
"Financial Advisor" means Hilltop Securities, Inc., and its successor in that capacity.
"Issuer Request" and "Issuer Order" means a written request or order signed in the name
of the Mayor of the Issuer, or any other authorized representative of the Issuer and delivered to
the Bank.
"Owner" means the Person in whose name a Certificate is registered in the Register.
"Paying Agent" means the Bank when it is performing the functions associated with the
terms in this Agreement.
"Person" means any individual, corporation, partnership, joint venture, association, joint
stock company, trust, unincorporated organization, or government or any agency or political
subdivision of a government.
"Predecessor Certificates" of any particular Certificate means every previous Certificate
evidencing all or a portion of the same obligation as that evidenced by such particular Certificate
(and, for the purposes of this definition, any Certificate registered and delivered under
Section 4.06 hereof in lieu of a mutilated, lost, destroyed or stolen Certificate shall be deemed to
evidence the same obligation as the mutilated, lost, destroyed or stolen Certificate).
"Record Date" has the meaning assigned in the Certificate Ordinance.
"Register" means a register in which the Registrar shall provide for the registration and
transfer of Certificates.
-2-
"Responsible Officer" means, when used with respect to the Bank, the officer or officers
of the Bank with in the corporate trust department having direct responsibility for the
administration of this Agreement.
"Stated Maturity" means the date or dates specified in the Certificate Ordinance as the
fixed date on which the principal of the Certificates is due and payable or the date fixed in
accordance with the terms of the Certificate Ordinance for redemption of the Certificates, or any
portion thereof, prior to the fixed maturity date.
ARTICLE III
PAYING AGENT
Section 3.01. Duties of Paying Agent.
(a) The Bank, as Paying Agent and on behalf of the Issuer, shall pay to the Owner, at
the Stated Maturity and upon the surrender of the Certificate or Certificates so maturing at the
Bank Office, the principal amount of the Certificate or Certificates then maturing, and
redemption premium, if any, provided that the Bank shall have been provided by or on behalf of
the Issuer adequate funds to make such payment.
(b) The Bank, as Paying Agent and on behalf of the Issuer, shall pay interest when
due on the Certificates to each Owner of the Certificates (or their Predecessor Certificates) as
shown in the Register at the close of business on the Record Date, provided that the Bank shall
have been provided by or on behalf of the Issuer adequate funds to make such payments. The
Paying Agent/Registrar shall make such payments in accordance with the Certificate Ordinance
by computing the amount of interest to be paid each Owner, preparing the checks, and mailing
the checks (or other payment method allowed under the terms of the Certificate Ordinance) on
each Interest Payment Date addressed to each Owner's address as it appears in the Register at the
close of business on the Record Date.
Section 3.02. Payment Dates.
The Issuer hereby instructs the Bank to pay the principal of, redemption premium, if any,
and interest on the Certificates at the dates specified in the Certificate Ordinance.
ARTICLE IV
REGISTRAR
Section 4.01. Transfer and Exchange.
(a) The Bank is hereby appointed "Registrar" for the purpose of registering and
transferring the Certificates as herein provided. The Bank agrees to maintain the Register while it
is Registrar. The Bank shall keep the Register at the Bank Office, and subject to such reasonable
written regulations as the Issuer may prescribe, which regulations shall be furnished to the Bank
herewith or subsequent hereto by Issuer Order, the Bank shall provide for the registration and
transfer of the Certificates.
-3-
(b) The Certificates shall be subject to transfer and exchange as set forth in the
Certificate Ordinance.
Section 4.02. The Certificates.
The Issuer shall provide an adequate inventory of unregistered Certificates to facilitate
transfers. The Bank covenants that it will maintain the unregistered Certificates in safekeeping
and will use reasonable care in maintaining such unregistered Certificates in safekeeping, which
shall be not less than the care it maintains for debt securities of other governments or
corporations for which it serves as registrar, or which it maintains for its own securities.
Section 4.03. Form of Register.
(a) The Bank as Registrar will maintain the records of the Register in accordance
with the Bank's general practices and procedures in effect from time to time. The Bank shall not
be obligated to maintain such Register in any form other than a form which the Bank has
currently available and currently utilizes at the time.
(b) The Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
Section 4.04. List of Owners.
(a) The Bank will provide the Issuer at any time requested by the Issuer, upon
payment of the cost, if any, of reproduction, a copy of the information contained in the Register.
The Issuer may also inspect the information in the Register at any time the Bank is customarily
open for business, provided that reasonable time is allowed the Bank to provide an up-to-date
listing or to convert the information into written form.
(b) The Bank will not release or disclose the content of the Register to any person
other than to, or at the written request of, an authorized officer or employee of the Issuer, except
upon receipt of a subpoena or court order or as otherwise required by law. Upon receipt of
subpoena or court order, the Bank will notify the Issuer so that the Issuer may contest the
subpoena or court order.
Section 4.05. Cancellation of Certificates.
All Certificates surrendered to the Bank for payment, redemption, transfer, exchange, or
replacement, shall be promptly cancelled by it upon the making of proper records regarding such
payment, transfer, exchange or replacement. The Issuer may at any time deliver to the Bank for
cancellation any Certificates previously certified or registered and delivered which the Issuer
may have acquired in any manner whatsoever, and all Certificates so delivered shall be promptly
cancelled by the Bank. All cancelled Certificates held by the Bank shall be disposed of pursuant
to the Securities Exchange Act of 1934.
-4-
Section 4.06. Mutilated, Destroyed, Lost, or Stolen Certificates.
(a) The Issuer hereby instructs the Bank to deliver fully registered Certificates in
exchange for or in lieu of mutilated, destroyed, lost, or stolen Certificates as long as the same
does not result in an overissuance.
(b) The Issuer hereby accepts the Bank's current blanket bond for lost, stolen, or
destroyed Certificates and any future substitute blanket bond for lost, stolen, or destroyed
Certificates that the Bank may arrange, and agrees that the coverage under any such blanket bond
is acceptable to it and meets the Issuer's requirements as to security or indemnity. The Bank
need not notify the Issuer of any changes in the security or other company giving such bond or
the terms of any such bond, provided that the amount of such bond is not reduced below the
amount of the bond on the date of execution of this Agreement. The blanket bond then utilized
by the Bank for lost, stolen, or destroyed Certificates by the Bank is available for inspection by
the Issuer on request.
Section 4.07. Transaction Information to Issuer.
The Bank will, within a reasonable time after receipt of written request from the Issuer,
furnish the Issuer information as to the Certificates it has paid pursuant to Section 3.01;
Certificates it has delivered upon the transfer or exchange of any Certificates pursuant to Section
4.01; and Certificates it has delivered in exchange for or in lieu of mutilated, destroyed, lost, or
stolen Certificates pursuant to Section 4.06 of this Agreement.
ARTICLE V
THE BANK
Section 5.01. Duties of Bank.
The Bank undertakes to perform the duties set forth herein and in accordance with the
Certificate Ordinance and agrees to use reasonable care in the performance thereof. The Bank
hereby agrees to use the funds deposited with it for payment of the principal of, redemption
premium, if any, and interest on the Certificates to pay the Certificates as the same shall become
due and further agrees to establish and maintain all accounts and funds as may be required for
the Bank to function as Paying Agent.
Section 5.02. Reliance on Documents, Etc.
(a) The Bank may conclusively rely, as to the truth of the statements and correctness
of the opinions expressed therein, on certificates or opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts.
(c) No provisions of this Agreement shall require the Bank to expend or risk its own
funds or otherwise incur any financial liability for performance of any of its duties hereunder, or
-5-
in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is
not assured to it.
(d) The Bank may rely and shall be protected in acting or refraining from acting upon
any ordinance, resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, certificate, note, security, or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or parties. Without limiting
the generality of the foregoing statement, the Bank need not examine the ownership of any
Certificates, but is protected in acting upon receipt of Certificates containing an endorsement or
instruction of transfer or power of transfer which appears on its face to be signed by the Owner
or an attorney -in -fact of the Owner. The Bank shall not be bound to make any investigation into
the facts or matters stated in an ordinance, resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, certificate, note, security, or other paper or
document supplied by Issuer.
(e) The Bank is also authorized to transfer funds relating to the closing and initial
delivery of the Certificates in the manner disclosed in the closing memorandum as prepared by
the Issuer's Financial Advisor or other agents. The Bank may act on a facsimile or e-mail
transmission of the closing memorandum acknowledged by the Financial Advisor or the Issuer
as the final closing memorandum. The Bank shall not be liable for any losses, costs or expenses
arising directly or indirectly from the Bank's reliance upon and compliance with such
instructions.
(f) The Bank may consult with counsel, and the written advice of such counsel or any
opinion of counsel shall be full and complete authorization and protection with respect to any
action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon.
(g) The Bank may exercise any of the powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys of the Bank.
Section 5.03. Recitals of Issuer.
(a) The recitals contained herein and in the Certificate Ordinance shall be taken as the
statements of the Issuer, and the Bank assumes no responsibility for their correctness.
(b) The Bank shall in no event be liable to the Issuer, any Owner or Owners, or any
other Person for any amount due on any Certificate except as otherwise expressly provided
herein with respect to the liability of the Bank for its duties under this Agreement.
Section 5.04. May Hold Certificates.
The Bank, in its individual or any other capacity, may become the Owner or pledgee of
Certificates and may otherwise deal with the Issuer with the same rights it would have if it were
not the Paying Agent/Registrar, or any other agent.
-6-
Section 5.05. Money Held by Bank.
(a) Money held by the Bank hereunder need not be segregated from any other funds
provided appropriate accounts are maintained.
(b) The Bank shall be under no liability for interest on any money received by it
hereunder.
(c) Subject to the provisions of Title 6, Texas Property Code, any money deposited
with the Bank for the payment of the principal, redemption premium, if any, or interest on any
Certificate and remaining unclaimed for three years after final maturity of the Certificate has
become due and payable will be paid by the Bank to the Issuer, and the Owner of such
Certificate shall thereafter look only to the Issuer for payment thereof, and all liability of the
Bank with respect to such monies shall thereupon cease.
(d) The Bank will comply with the reporting requirements of Chapter 74 of the Texas
Property Code.
(e) The Bank shall deposit any money received from the Issuer into a trust account to
be held in a paying agent capacity for the payment of the Certificates, with such money in the
account that exceed the deposit insurance, available to the Issuer, provided by the Federal
Deposit Insurance Corporation to be fully collateralized with securities or obligations that are
eligible under the laws of the State of Texas and to the extent practicable under the laws of the
United States of America to secure and be pledged as collateral for trust accounts until the
principal and interest on the Certificates have been presented for payment and paid to the owner
thereof. Payments made from such trust account shall be made by check drawn on such trust
account unless the owner of such Certificates shall, at its own expense and risk, request such
other medium of payment.
Section 5.06. Indemnification.
To the extent permitted by law, the Issuer agrees to indemnify the Bank and its officers,
directors, employees, and agents and save and them harmless from and against, any and all
actions or suits, whether groundless or otherwise, and from any and against any and all loss,
liability, or expense incurred without negligence, bad faith or willful misconduct on their part
arising out of or in connection with its acceptance or administration of the Bank's duties
hereunder, including the cost and expense (including the reasonable counsel fees and expenses
outside counsel engaged by the Bank; the Issuer shall not be responsible for the salary, expenses
or any costs associated with counsel employed by the Bank or any affiliate, subsidiary or parent
of the Bank) of defending itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties under this Agreement.
Section 5.07. Interpleader.
The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim,
demands or controversy over its persons as well as funds on deposit in a court of competent
jurisdiction within the State of Texas; waive personal service of any process; and agree that
service of process by certified or registered mail, return receipt requested, to the address set forth
-7-
in this Agreement shall constitute adequate service. The Issuer and the Bank further agree that
the Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction within
the State of Texas to determine the rights of any person claiming any interest herein.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01. Amendment.
This Agreement may be amended only by an agreement in writing signed by both of the
parties hereof.
Section 6.02. Assignment.
This Agreement may not be assigned by either party without the prior written consent of
the other.
Section 6.03. Notices.
Any request, demand, authorization, direction, notice, consent, waiver, or other document
provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed or
delivered to the Issuer or the Bank, respectively, at the addresses shown below:
if to the Issuer: City of Baytown, Texas
2401 Market Street
Baytown, Texas 77520
Attention: Mayor
if to the Bank: The Bank of New York Mellon Trust Company,
N.A.
2001 Bryan Street
Dallas, Texas 75201
Attention: Corporate Trust Department
Section 6.04. Bank to Give Notice of Change.
The Bank hereby agrees that it will give notice to the Issuer, the Owners and the
Municipal Securities Rulemaking Board of (a) any change in the name of the Bank after the date
hereof, (b) any change in the location of the Bank Office or a change in the mailing address of
the Bank, and (c) any merger or other change in the corporate structure affecting the name,
location and address of the Bank, in each case within ten (10) business days of the effective date
of such change.
Section 6.05. Anti -Boycott Verification.
The Bank hereby verifies that it and its parent company, wholly- or majority -owned
subsidiaries, and other affiliates, if any, do not boycott Israel and, to the extent this Agreement is
-8-
a contract for goods or services, will not boycott Israel during the term of this Agreement. The
foregoing verification is made solely to comply with Section 2270.002, Texas Government
Code, and to the extent such Section does not contravene applicable Federal law. As used in the
foregoing verification, "boycott Israel" means refusing to deal with, terminating business
activities with, or otherwise taking any action that is intended to penalize, inflict economic harm
on, or limit commercial relations specifically with Israel, or with a person or entity doing
business in Israel or in an Israeli -controlled territory, but does not include an action made for
ordinary business purposes. The Bank understands `affiliate' to mean an entity that controls, is
controlled by, or is under common control with the Bank and exists to make a profit.
Section 6.06. Iran, Sudan and Foreign Terrorist Organizations.
The Bank Agent represents that neither it nor any of its parent company, wholly- or
majority -owned subsidiaries, and other affiliates is a company identified on a list prepared and
maintained by the Texas Comptroller of Public Accounts under Section 2252.153 or
Section 2270.0201, Texas Government Code, and posted on any of the following pages of such
officer's internet website:
https:Hcomptroller.texas_gov/purchasing/docs/sudan-list.pdf,
https:Hcomptroller.texas.gov/purchasinp/docs/iran-list.pdf,
or
https:Hcomptroller.texas,govi'
urchasing/docs/fto-list.pdf.
The foregoing representation is made solely to comply with Section 2252.152, Texas
Government Code, and to the extent such Section does not contravene applicable Federal law
neither the Bank nor any wholly- or majority -owned subsidiaries, and other affiliates, if any, that
the United States government has affirmatively declared to be excluded from its federal
sanctions regime relating to Sudan or Iran or any federal sanctions regime relating to a foreign
terrorist organization. The Bank understands "affiliate" to mean any entity that controls, is
controlled by, or is under common control with the Bank and exists to make a profit.
Section 6.07. Form 1295 Exemption.
The Bank represents that it is a wholly owned subsidiary of The Bank of New York
Mellon Corporation, a publicly traded business entity, and therefore this Agreement is exempt
from Section 2252.908, Texas Government Code, as amended.
Section 6.08. Effect of Headings.
The Article and Section headings herein are for convenience only and shall not affect the
construction hereof.
Section 6.09. Successors and Assigns.
All covenants and agreements herein by the Issuer shall bind its successors and assigns,
whether so expressed or not.
-9-
Section 6.10. Separability.
If any provision herein shall be invalid, illegal, or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 6.11. Benefits of Agreement.
Nothing herein, express or implied, shall give to any Person, other than the parties hereto
and their successors hereunder, any benefit or any legal or equitable right, remedy, or claim
hereunder.
Section 6.12. Entire Agreement.
This Agreement and the Certificate Ordinance constitute the entire agreement between
the parties hereto relative to the Bank acting as Paying Agent/Registrar, and if any conflict exists
between this Agreement and the Certificate Ordinance, the Certificate Ordinance shall govern.
Section 6.13. Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be
deemed an original and all of which shall constitute one and the same Agreement.
Section 6.14. Termination.
(a) This Agreement will terminate on the date of final payment by the Bank issuing
its checks for the final payment of principal, redemption premium, if any, and interest of the
Certificates.
(b) This Agreement may be earlier terminated upon 60 days written notice by either
party; provided, that, no termination shall be effective until a successor has been appointed by
the Issuer and has accepted the duties imposed by this Agreement. A resigning Paying
Agent/Registrar may petition any court of competent jurisdiction for the appointment of a
successor Paying Agent/Registrar if an instrument of acceptance by a successor Paying
Agent/Registrar has not been delivered to the resigning Paying Agent/Registrar within 60 days
after the giving of notice of resignation.
(c) The provisions of Section 1.02 and of Article V shall survive and remain in full
force and effect following the termination of this Agreement.
-10-
Section 6.15. Merger, Conversion, Consolidation or Succession.
Any corporation into which the Bank may be merged or converted or with which it may
be consolidated, or any corporation resulting from any merger, conversion, or consolidation to
which the Bank shall be a party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Bank shall be the successor of the Bank hereunder without the
execution or filing of any paper or any further act on the part of either of the parties hereto;
provided, however, that the resulting entity must qualify to serve as the Paying Agent/Registrar
under the terms of the Certificate for Ordinance and Texas law. In case any Certificate shall have
been registered, but not delivered, by the Bank then in office, any successor by merger,
conversion, or consolidation to such authenticating Bank may adopt such registration and deliver
the Certificate so registered with the same effect as if such successor Bank had itself registered
such Certificate. The Bank shall notify the Issuer of any changes described in this paragraph in
accordance with Section 6.04.
Section 6.16. Governing Law.
This Agreement shall be construed in accordance with and governed by the laws of the
State of Texas.
Section 6.17. Electronic Means.
The Bank shall have the right to accept and act upon instructions, including funds transfer
instructions ("Instructions") given pursuant to this Agreement and delivered using Electronic
Means ("Electronic Means" shall mean the following communications methods: e-mail,
facsimile transmission, secure electronic transmission containing applicable authorization codes,
passwords and/or authentication keys issued by the Bank, or another method or system specified
by the Bank as available for use in connection with its services hereunder); provided, however,
that the Issuer shall provide to the Bank an incumbency certificate listing officers with the Issuer
to provide such Instructions ("Authorized Officers") and containing specimen signatures of such
Authorized Officers, which incumbency certificate shall be amended by the Issuer, whenever a
person is to be added or deleted from the listing. If the Issuer elects to give the Bank Instructions
using Electronic Means and the Bank in its discretion elects to act upon such Instructions, the
Bank's understanding of such Instructions shall be deemed controlling. The Issuer understands
and agrees that the Bank cannot determine the identity of the actual sender of such Instructions
and that the Bank shall conclusively presume that directions that purport to have been sent by an
Authorized Officer listed on the incumbency certificate provided to the Bank have been sent by
such Authorized Officer. The Issuer shall be responsible for ensuring that only Authorized
Officers transmit such Instructions to the Bank and that the Issuer and all Authorized Officers are
solely responsible to safeguard the use and confidentiality of applicable user and authorization
codes, passwords and/or authentication keys upon receipt by the Issuer. The Bank shall not be
liable for any losses, costs or expenses arising directly or indirectly from the Bank's reliance
upon and compliance with such Instructions notwithstanding such directions conflict or are
inconsistent with a subsequent written instruction. To the extent allowed by law, the Issuer
agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to
the Bank, including without limitation the risk of the Bank acting on unauthorized Instructions,
and the risk of interception and misuse by third parties; (ii) that it is fully informed of the
-11-
protections and risks associated with the various methods of transmitting Instructions to the Bank
and that there may be more secure methods of transmitting Instructions than the method(s)
selected by the Issuer; (iii) that the security procedures (if any) to be followed in connection with
its transmission of Instructions provide to it a commercially reasonable degree of protection in
light of its particular needs and circumstances; and (iv) to notify the Bank immediately upon
learning of any compromise or unauthorized use of the security procedures.
Section 6.18. Resignation or Removal of the Bank.
Any time, other than on a day during the forty-five (45) day period preceding any
payment date for the Issuer's Certificates, the Bank may resign by giving at least forty-five (45)
days' prior written notice to the Issuer; and the Bank's agency shall be terminated and its duties
shall cease upon expiration of such forty-five (45) days or such lesser period of time as shall be
mutually agreeable to the Bank and the Issuer; provided, however, that no such termination shall
be effective until a successor paying agent/registrar has assumed the duties of paying
agent/registrar for the Certificates. The Issuer agrees that it will use commercially responsible
efforts to engage a replacement paying agent/registrar following the receipt of such notice. At
any time, following at least forty-five (45) days' prior written notice (or such lesser period of
time as shall be mutually agreeable to the Bank and the Issuer) from the Issuer, the Bank may be
removed from its agency. Such removal shall become effective upon the expiration of the forty-
five (45) day or agreed upon lesser time period, and upon payment to the Bank of all amounts
payable to it in connection with its agency, provided, however, that no such termination shall be
effective unless a successor paying agent/registrar has assumed the duties of paying
agent/registrar with respect to the Certificates. In such event, the Bank shall deliver to the Issuer,
or to the Issuer's designated representative, all Certificates and cash belonging to the Issuer and
shall furnish to the Issuer, or to the Issuer's designated representative, the register and all other
pertinent books and records relating to the Certificates, including reasonably detailed information
regarding the status of the Issuer's outstanding Certificates and copies of other pertinent records
then in the Bank's possession, reasonably requested by the Issuer.
[Signature Pages to Follow]
-12-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first written above.
ATTEST:
By:
City Clerk
CITY OF BAYTOWN, TEXAS
DO
Mayor
Signature Page to Paying Agent/Registrar Agreement
The Bank of New York Mellon Trust Company,
N.A., as Paying Agent/Registrar
Title:
Signature Page to Paying Agent;Registrar Agreement
ANNEX A
SCHEDULE OF FEES FOR SERVICE AS PAYING AGENT./REGISTRAR
[Attached]
A-1
4814-9036-6892v.11