Ordinance No. 11,846ORDINANCE NO. 11,846
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, AUTHORIZING THE ISSUANCE OF CITY OF BAYTOWN, TEXAS
GENERAL OBLIGATION AND REFUNDING BONDS, SERIES 2012;
LEVYING A TAX IN PAYMENT THEREOF; SETTING CERTAIN
PARAMETERS FOR THE BONDS; AUTHORIZING THE AUTHORIZED
OFFICER TO APPROVE THE AMOUNT, THE INTEREST RATE, PRICE
AND CERTAIN OTHER TERMS THEREOF; AUTHORIZING THE
REDEMPTION PRIOR TO MATURITY OF CERTAIN OUTSTANDING
BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND
PURCHASE AGREEMENT, AN ESCROW AGREEMENT AND A PAYING
AGENT /REGISTRAR AGREEMENT RELATING TO SUCH BONDS;
APPROVING THE PREPARATION AND DISTRIBUTION OF AN OFFICIAL
STATEMENT; AND ENACTING OTHER PROVISIONS RELATING
THERETO; AND PROVIDING FOR THE EFFECT WE DATE THEREOF.
WHEREAS, the City of Baytown, Texas (the "City ") has heretofore issued the
obligations described on the attached Schedule I (the "Refunded Obligations Candidates "); and
WHEREAS, the City desires to refund a portion of the Refunded Obligations Candidates
in order to achieve a present value savings in debt service; and
WHEREAS, it is intended that all or a portion of the Refunded Obligation Candidates
shall be designated as Refunded Obligations (as hereinafter defined) in the Pricing Certificate (as
hereinafter defined) and shall be refunded pursuant to this Ordinance and the Pricing Certificate;
and
WHEREAS, Chapter 1207, Texas Government Code, as amended, authorizes the City to
issue refunding bonds for the purpose of refunding the Refunded Obligations in advance of their
maturities, and to accomplish such refunding by depositing directly with a paying agent for the
Refunded Obligations (or other qualified escrow agent), the proceeds of such refunding bonds,
together with other available funds or securities, in an amount sufficient to provide for the
payment or redemption of the Refunded Obligations, and provides that such deposit shall
constitute the making of firm banking and financial arrangements for the discharge and final
payment or redemption of the Refunded Obligations; and
WHEREAS, the City desires to authorize the execution of an escrow agreement, if
necessary, in order to provide for the deposit of proceeds of the refunding bonds and, to the
extent specified pursuant hereto, other lawfully available funds of the City, to pay the redemption
price of the Refunded Obligations when due; and
WHEREAS, upon the issuance of the refunding bonds herein authorized and the deposit
of funds referred to above, the Refunded Obligations shall no longer be regarded as being
outstanding, except for the purpose of being paid pursuant to such deposit, and the pledges, liens,
trusts and all other covenants, provisions, terms and conditions of the ordinances authorizing the
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issuance of the Refunded Obligations shall be, with respect to the Refunded Obligations,
discharged, terminated and defeased; and
WHEREAS, the City hereby finds and determines that the issuance and delivery of the
refunding bonds hereinafter authorized is necessary and in the public interest and the use of the
proceeds in the manner herein specified constitutes a valid public purpose; and
WHEREAS, the City hereby finds and determines that the refunding contemplated in this
Ordinance will benefit the City by providing a present value saving in the debt service payable
by the City, and that such benefit is sufficient consideration for the refunding of the Refunded
Obligations; and
WHEREAS, the City hereby finds and determines that the manner in which the refunding
is being executed does not make it practicable to make the determination described by Section
1207.008(a)(2) of Chapter 1207; and
WHEREAS, the bonds hereinafter authorized were duly and favorably voted at an
election in the City on November 6, 2007 (the "Election "); and
WHEREAS, at the Election, the voters authorized an amount of bonds for the purposes
set forth in the following schedule, such schedule showing amounts previously issued pursuant to
such voted authorization:
Amount
Purpose Authorized Previously Issued Unissued
Streets, Sidewalks, Drainage $36,850,000 $10,421,000 $26,429,000
and Utilities Improvements
Public Safety, EMS and Fire $22,995,000 $7,162,000 $15,833,000
Fighting Facilities and
Equipment
Park Improvements and
$10,940,000
$7,530,000
$3,410,000
Citywide Beautification
Extension of East Baker
$7,170,000
$630,000
$6,540,000
Road
Drainage Improvements
$2,020,000
$1,072,000
$948,000
TOTAL
$79,975,000
$26,815,000
$53,160,000
WHEREAS, the amounts from such authorizations being issued pursuant to this
ordinance, and the balance that remains unissued after the issuance of the bonds herein
authorized shall be indicated in the Pricing Certificate (defined herein); and
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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 rating 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
WHEREAS, pursuant to Sections 1207.007 and 1371.053, Texas Government Code, as
amended, the City desires to delegate the authority to effect the sale of the bonds to the
Authorized Officer (hereinafter defined); and
WHEREAS, the meeting at which this Ordinance is being considered is open to the
public as required by law, and the public notice of the time, place and purpose of said meeting
was given as required by Chapter 551, Texas Government Code; Now, Therefore
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS:
ARTICLE I
DEFINITIONS AND OTHER PRELIMINARY MATTERS
Section 1.01 Definitions.
Unless otherwise expressly provided in this Ordinance or unless the context clearly
requires otherwise, the following terms shall have the meanings specified below:
"Accreted Value" means, with respect to the Capital Appreciation Bonds, the original
principal amount of such Bond plus the initial premium, if any, paid therefor, with interest
thereon compounded semiannually, as set forth in the Pricing Certificate.
"Authorized Officer" means the Mayor or the City Manager of the City, who are
authorized to act on behalf of the City in selling and delivering the Bonds, or such other officers
of the City as designated in writing.
"Bond" means any of the Bonds.
"Bonds" means the City's bonds authorized to be issued by Section 3.01 of this
Ordinance and designated as "City of Baytown, Texas, General Obligation and Refunding
Bonds, Series 2012" and such other series or subseries as may be designated in the Pricing
Certificate.
"Bond Counsel" means Bracewell & Giuliani LLP.
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"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.
"Capital Appreciation Bonds" means, collectively, the Bonds designated as Capital
Appreciation Bonds in the Pricing Certificate, if any, and with respect to which interest is
compounded semiannually and is payable only at Maturity.
"City" means the City of Baytown, Texas.
"Closing Date" means the date of the initial delivery of and payment for the Bonds.
"Code" means the Internal Revenue Code of 1986, as amended, including applicable
regulations, published rulings and court decisions.
"Current Interest Bonds" means, collectively, the Bonds designated as Current Interest
Bonds in the Pricing Certificate and with respect to which interest is payable on each Interest
Payment Date.
"Dated Date" means the date of the Bonds as designated in the Pricing Certificate.
"Debt Service" means the collectively, all amounts due and payable with respect to the
Bonds representing the principal of the Current Interest Bonds and the interest thereon and the
Maturity Amount of the Capital Appreciation Bonds, in each case, payable at the times and in the
manner provided herein and in the Pricing Certificate.
"Designated Payment/Transfer Office" means (i) with respect to the initial Paying
Agent/Registrar, its corporate trust office in Dallas, Texas or 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.
"Escrow Agent" means The Bank of New Mellon Trust Company, N.A, unless otherwise
designated in the Pricing Certificate.
"Escrow Agreement" means the escrow agreement by and between the City and the
Escrow Agent relating to the Refunded Obligations.
"Escrow Fund" means the fund or funds established by the Escrow Agreement to hold
cash and securities for the payment of debt service on the Refunded Obligations.
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"Escrow Securities" means (1) direct noncallable obligations of the United States,
including obligations that are unconditionally guaranteed by the United States; (2) noncallable
obligations of an agency or instrumentality of the United States, including obligations that are
unconditionally guaranteed or insured by the agency or instrumentality and that, on the date of
hereof, are rated as to investment quality by a nationally recognized investment rating firm not
less than "AAA" or its equivalent; and (3) noncallable obligations of a state or an agency or a
county, municipality, or other political subdivision of a state that have been refunded and that, on
the date hereof, are rated as to investment quality by a nationally recognized investment rating
firm not less than "AAA" or its equivalent.
"Fiscal Year" means such fiscal year of the City as shall be set from time to time by the
City Council.
"Initial Bonds" means the Initial Current Interest Bond and the Initial Capital
Appreciation Bond.
"Initial Current Interest Bond" means the Initial Current Interest Bond authorized by
Section 3.04(d).
"Initial Premium Capital Appreciation Bond" means the Initial Premium Capital
Appreciation Bond authorized by Section 3.04(d).
"Interest and Sinking Fund" means the interest and sinking fund established by Section
2.02 of this Ordinance.
"Interest Payment Date" means, with respect to the Current Interest Bonds, the date or
dates on which interest on the Bonds is scheduled to be paid, as designated in the Pricing
Certificate.
"Maturity" means the date on which the principal of the Current Interest Bonds and the
Maturity Amount of the Capital Appreciation Bonds become due and payable according to the
terms thereof, whether at Stated Maturity or by proceedings for prior redemption.
"Maturity Amount" means, with respect to the Capital Appreciation Bonds, the original
principal amount thereof plus the initial premium, if any, paid therefore, plus interest accreted
and compounded thereon, as set forth herein and in the Pricing Certificate, and payable at
Maturity.
"MSRB" means the Municipal Securities Rulemaking Board.
"Ordinance" means this Ordinance.
"Owner" means the person who is the registered owner of a Bond or Bonds, as shown in
the Register.
"Paying Agent/Registrar" means The Bank of New York Mellon Trust Company, N.A.
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"Paying Agent Registrar Agreement" means the Paying Agent/Registrar Agreement
between the Paying Agent/Registrar and the City relating to the Bonds.
"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.
"Purchase Agreement" means the Bond Purchase Agreement between the City and the
Underwriters providing for the sale of the Bonds to the Underwriters.
"Record Date" means the fifteenth day of the month next preceding an Interest Payment
Date.
"Refunded Obligation Candidates" mean the obligations of the City described in
Schedule I attached hereto.
"Refunded Obligations" mean those obligations of the City designated as such in the
Pricing Certificate from the list of Refunded Obligation Candidates.
"Register" means the bond register specified in Section 3.06(a).
"Representations Letter" means the Blanket Letter of Representations between the City
and DTC.
"Rule" means Rule 15c2 -12, as amended from time to time, adopted by the SEC under
the Securities Exchange Act of 1934.
"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 3.03(e).
"Special Record Date" means the new record date for interest payment established in the
event of a nonpayment of interest on a scheduled payment date, and for thirty (30) days
thereafter, as described in Section 3.03(e).
"State" means the State of Texas.
"Stated Maturity" means the respective stated maturity dates of the Bonds specified in the
Pricing Certificate.
"Unclaimed Payments" means money deposited with the Paying Agent/Registrar for the
payment of principal, premium, if any, or interest, or money set aside for the payment of Bonds
duly called for redemption prior to Stated Maturity and remaining unclaimed by the Owners of
such Bonds for 90 days after the applicable payment or redemption date.
"Underwriters" means the underwriters designated in the Pricing Certificate.
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Section 1.02 Findings.
The declarations, determinations and findings declared, made and found in the preamble
to this Ordinance are hereby adopted, restated and made a part of the operative provisions hereof.
Section 1.03 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. References to section numbers shall
mean sections in this Ordinance.
Section 1.04 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 and to sustain the validity of this Ordinance.
(d) References to section numbers shall mean sections in this Ordinance unless
designated otherwise.
ARTICLE II
SECURITY FOR THE BONDS; INTEREST AND SINKING FUND
Section 2.01 Tax Levy.
(a) Pursuant to the authority granted by the Constitution and the laws of the State,
there shall be levied and there is hereby levied for the current year and for each succeeding year
hereafter while any part of the principal of the Bonds or any interest thereon is outstanding and
unpaid, an ad valorem tax on all taxable property within the City, at a rate sufficient, within the
limit prescribed by law, to pay the debt service requirements of the Bonds, being (i) the interest
on the Bonds, and (ii) a sinking fund for their redemption at maturity or a sinking fund of two
percent (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 taxable property appearing on the tax rolls of the City most recently approved in accordance
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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 amounts on deposit in or
required hereby to be deposited to the Interest and Sinking Fund are hereby pledged and
committed irrevocably to the payment of the principal of and interest on the Bonds when and as
due and payable in accordance with their terms and this Ordinance.
(d) To pay debt service on the Bonds 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.
Section 2.02 Interest and Sinking Fund.
(a) The City hereby establishes a special fund or account to be designated the "City
of Baytown, Texas, General Obligation and Refunding Bonds, Series 2012, Interest and Sinking
Fund" (the "Interest and Sinking Fund ") 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 Bonds when and as due and payable in accordance with their terms and this Ordinance.
ARTICLE III
AUTHORIZATION; GENERAL TERMS AND PROVISIONS
REGARDING THE BONDS
Section 3.01 Authorization.
The Bonds are hereby authorized to be issued and delivered in accordance with Chapters
1207, 1331 and 1371, Texas Government Code, as amended. The Bonds shall be issued in a
total aggregate principal amount not to exceed $34,500,000, for the purposes of (a) providing
funds for the payment of costs of issuing the Bonds, (b) refunding the Refunded Obligations and
(c) for the following purposes for which the City has voted authorization:
(i) $11,040,000 for streets, sidewalks, drainage and utilities improvements;
(ii) $970,000 for public safety, EMS and fire fighting facilities and equipment;
(iii) $1,475,000 for park improvements and citywide beautification;
(iv) $120,000 for the extension of East Baker Road; and
(v) $400,000 for drainage facilities.
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The amounts and purposes identified above in Section 3.01(c)(i) -(v) are subject to adjustment by
the Authorized Officer in the Pricing Certificate provided the aggregate principal amount of such
purposes shall not exceed $14,005,000. The Bonds shall be issued as Current Interest Bonds,
Capital Appreciation Bonds or a combination of Capital Interest Bonds and Capital Appreciation
Bonds, as determined by the Authorized Officer and all as identified and designated in the
Pricing Certificate,
Section 3.02 Date, Denomination, Maturities, and Interest. (a) The Bonds shall be
dated the Dated Date as set forth in the Pricing Certificate, and shall be in fully registered form,
without coupons.
(b) The Current Interest Bonds shall be in the aggregate principal amount designated
in the Pricing Certificate, shall be in the denomination of $5,000 principal amount or any integral
multiple thereof and shall be numbered separately from one upward, except the Initial Current
Interest Bond, which shall be numbered ICI -1.
(c) The Current Interest Bonds 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 Current Interest Bond, respectively, until
the principal amount thereof has been paid or provision for such payment has been made, from
the later of (i) the Dated Date or the Closing Date, as set forth 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 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.
(e) The Capital Appreciation Bonds shall be in the aggregate original principal
amount and aggregate Maturity Amount designated in the Pricing Certificate, shall be in the
Maturity Amounts of $5,000 or any integral multiple thereof, and shall be numbered separately
from one upward, except the Initial Capital Appreciation Bond, which shall be numbered ICA -1.
(f) The Capital Appreciation Bonds shall be issued in the original principal amounts
and shall bear interest at the per annum rates, calculated on the basis of a 360 -day year composed
of twelve 30 -day months (subject to rounding to the Accreted Values thereof), and shall mature
on the dates and in the Maturity Amounts set forth in the Pricing Certificate.
(g) Interest shall accrete on each Capital Appreciation Bond from the Closing Date
and shall be compounded semiannually as designated in the Pricing Certificate, until Maturity.
The accreted interest on each Capital Appreciation Bond shall be payable at Maturity as a
portion of the Maturity Amount.
Section 3.03 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 Current Interest Bond 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
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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 Current Interest Bond and the Maturity Amount of each
Capital Appreciation Bond shall be paid to the Owner thereof at Maturity upon presentation and
surrender of such Bond 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 (the "Special Payment Date," which shall be fifteen (15)
days after the Special Record Date) shall be sent at least five Business Days prior to the Special
Record Date by United States mail, first class, postage prepaid, to the address of each Owner of a
Bond 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 Bonds to which the Unclaimed
Payments pertain. Subject to Title 6, Texas Property Code, Unclaimed Payments 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 Bonds thereafter
coming due and, to the extent any such money remains after the retirement of all outstanding
Bonds, 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 Bonds for any further payment of such unclaimed moneys or on account of any such Bonds,
subject to Title 6, Texas Property Code.
Section 3.04 Execution and Registration of Bonds.
(a) The Bonds shall be executed on behalf of the City by the Mayor and 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 Bonds shall have the same effect as
if each of the Bonds had been signed manually and in person by each of said officers, and such
facsimile seal on the Bonds shall have the same effect as if the official seal of the City had been
manually impressed upon each of the Bonds.
(b) In the event that any officer of the City whose manual or facsimile signature
appears on the Bonds ceases to be such officer before the authentication of such Bonds or before
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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 Bond 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 Bonds. In
lieu of the executed Certificate of Paying Agent/Registrar described above, the Initial Bond
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 of Texas, or by her duly authorized agent, which certificate shall be
evidence that the Bond 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, the Initial Bonds, being (i) a single Initial Current Interest
Bond representing the entire principal amount of the Current Interest Bonds designated in the
Pricing Certificate and (ii) a single Initial Capital Appreciation Bond representing the aggregate
Maturity Amount of the Capital Appreciation Bonds designated in the Pricing Certificate, each
such Initial Bond to be payable in stated installments to the Underwriters or their designee, each
such Initial Bond to be executed by manual or facsimile signatures of the Mayor 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 Underwriters or their
designee. Upon payment for the Initial Bonds, the Paying Agent/Registrar shall cancel the Initial
Bonds and deliver registered definitive Bonds to DTC in accordance with Section 3.09 hereof.
To the extent the Paying Agent/Registrar is eligible to participate in DTC's FAST System, as
evidenced by an agreement between the Paying Agent/Registrar and DTC, the Paying
Agent/Registrar shall hold the definitive Bonds in safekeeping for DTC.
Section 3.05 Ownership.
(a) The City, the Paying Agent/Registrar and any other person may treat the Owner
as the absolute owner of such Bond for the purpose of making and receiving payment of the
principal or Maturity Amount thereof for the further purpose of making and receiving payment
of the interest thereon (subject to the provision herein that for the Current Interest Bonds interest
is to be paid to the person in whose name the Current Interest Bond is registered on the Record
Date or Special Record Date, as applicable), and for all other purposes, whether or not such
Bond 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 Bond shall be valid and effectual and shall
discharge the liability of the City and the Paying Agent/Registrar upon such Bond to the extent
of the sums paid.
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Section 3.06 Registration, Transfer and Exchange.
(a) So long as any Bonds remain outstanding, the City shall cause the Paying
Agent/Registrar to keep at its Designated Payment/Transfer Office a bond 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 Bonds in accordance with this
Ordinance.
(b) The ownership of a Bond may be transferred only upon the presentation and
surrender of the Bond to the Paying Agent/Registrar at the Designated Payment/Transfer Office
with such endorsement or other evidence of transfer acceptable to the Paying Agent/Registrar.
No transfer of any Bond shall be effective until entered in the Register.
(c) The Bonds shall be exchangeable upon the presentation and surrender thereof at
the Designated Payment/Transfer Office for a Bond or Bonds 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 (with respect to Current Interest Bonds) or Maturity Amount (with
respect to Capital Appreciation Bonds) equal to the unpaid principal amount or Maturity Amount
of the Bonds presented for exchange.
(d) The Paying Agent/Registrar is hereby authorized to authenticate and deliver
Bonds transferred or exchanged in accordance with this Section. A new Bond or Bonds will be
delivered by the Paying Agent/Registrar, in lieu of the Bond being transferred or exchanged, at
the Designated Payment/Transfer, or sent by United States mail, first class, postage prepaid, to
the Owner or his designee. Each Bond 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 Bond or Bonds in
lieu of which such Bond is delivered.
(e) No service charge shall be made to the Owner for the initial registration, any
subsequent transfer, or exchange for a different denomination of any of the Bonds. The Paying
Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover any tax or
other governmental charge that is authorized to be imposed in connection with the registration,
transfer or exchange of a Bond.
(f) Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer
or exchange any Bond called for redemption, in whole or in part, within forty -five (45) days
prior to the date fixed for redemption; provided, however, such limitation of transfer shall not be
applicable to an exchange by the Owner of the uncalled principal balance of a Bond.
Section 3.07 Cancellation. All Bonds paid or redeemed before Stated Maturity in
accordance with this Ordinance, and all Bonds in lieu of which exchange Bonds or replacement
Bonds are authenticated and delivered in accordance with this Ordinance, shall be cancelled
upon the making of proper records regarding such payment, redemption, exchange or
replacement. The Paying Agent/Registrar shall dispose of such cancelled Bonds in the manner
required by the Securities Exchange Act of 1934, as amended.
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Section 3.08 Replacement Bonds.
(a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated
Bond, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a
replacement Bond of like tenor and principal amount (with respect to the Current Interest Bonds)
or Maturity Amount (with respect to the Capital Appreciation Bonds), bearing a number not
contemporaneously outstanding. The City or the Paying Agent/Registrar may require the Owner
of such Bond 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 Bond is lost, apparently destroyed or wrongfully taken, the
Paying Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the absence
of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall
authenticate and deliver a replacement Bond of like tenor and principal amount (with respect to
the Current Interest Bonds) or Maturity Amount (with respect to the Capital Appreciation
Bonds), 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 Bond;
(ii) furnishes such security or indemnity as may be required by the Paying
Agent/Registrar and the City to save them 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.
(c) If, after the delivery of such replacement Bond, a bona fide purchaser of the
original Bond in lieu of which such replacement Bond was issued presents for payment such
original Bond, the City and the Paying Agent/Registrar shall be entitled to recover such
replacement Bond from the person to whom it was delivered or any person taking therefrom,
except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost, or expense incurred by the City or the
Paying Agent/Registrar in connection therewith.
(d) In the event that any such mutilated, lost, apparently destroyed, or wrongfully
taken Bond has become or is about to become due and payable, the Paying Agent/Registrar, in its
discretion, instead of issuing a replacement Bond, may pay such Bond if it has become due and
payable or may pay such Bond when it becomes due and payable.
(e) Each replacement Bond 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 Bond or Bonds in lieu of which such
replacement Bond is delivered.
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43932095.1
Section 3.09 Book -Entry Only System.
(a) Unless otherwise specified in the Pricing Certificate, the definitive Bonds shall be
initially issued in the form of a separate fully registered Bond for each of the maturities thereof.
Upon initial issuance, the ownership of each such Bond 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 Bonds shall be registered in the name of Cede & Co., as nominee of DTC.
(b) With respect to Bonds 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
Bonds, 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 Bonds, (ii) the delivery to any DTC Participant or any
other person, other than an Owner of any notice with respect to the Bonds, or (iii) the payment to
any DTC Participant or any other person, other than an Owner of any amount with respect to
principal of or interest on the Bonds. 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 Bond is registered in the Register as the absolute owner of such
Bond for the purpose of payment of principal of, premium, if any, and interest on the Bonds for
the purpose of giving notices with respect to such Bond, and other matters with respect to such
Bond, for the purpose of registering transfer with respect to such Bond, and for all other purposes
whatsoever. The Paying Agent/Registrar shall pay all principal of and interest on the Bonds 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
be valid and effective to fully satisfy and discharge the City's obligations with respect to
payment of premium, if any, principal and interest on the Bonds to the extent of the sum or sums
so paid. No person other than an Owner, as shown in the Register, shall receive a Bond
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 of this Ordinance with respect to interest payments being mailed to the Owner as
shown on the Register 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 Bonds.
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 of the
beneficial owners of the Bonds that they be able to obtain certificated Bonds, or in the event
DTC discontinues the services described herein, the City or the Paying Agent/Registrar shall
(i) appoint a successor securities depository, qualified to act as such under Section 17(a) of the
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Securities and 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 Bonds to
such successor securities depository; or (ii) notify DTC and DTC Participants of the availability
through DTC of certificated Bonds and cause the Paying Agent/Registrar to transfer one or more
separate registered Bonds to DTC Participants having Bonds credited to their DTC accounts. In
such event, the Bonds 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
Bonds 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 any
Bonds 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 Bonds, and all notices with respect to such
Bonds, shall be made and given, respectively, in the manner provided in the Representation
Letter of the City to DTC.
ARTICLE IV
REDEMPTION OF BONDS BEFORE MATURITY
Section 4.01 Limitation on Redemption.
The Bonds shall be subject to redemption before Stated Maturity only as provided in this
Article IV and in the Pricing Certificate.
Section 4.02 Optional Redemption.
The Bonds shall be subject to redemption prior to the Stated Maturity, at the option of the
City at such times, in such amounts, in such manner and at such redemption prices as may be
designated and provided for in the Pricing Certificate.
Section 4.03 Mandatory Redemption.
(a) The Bonds designated as "Term Bonds" in the Pricing Certificate ( "Term
Bonds "), 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 moneys 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 Bonds equal to the aggregate principal amount of such
Term Bonds to be redeemed, shall call such Term Bonds for redemption on such scheduled
mandatory redemption date, and shall give notice of such redemption, as provided in Section
4.05.
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(c) The principal amount of the Term Bonds required to be redeemed on any
redemption date pursuant to subparagraph (a) of this Section 4.03 shall be reduced, at the option
of the City, by the principal amount of any Term Bonds which, at least 45 days prior to the
mandatory sinking fund redemption date (i) shall have been acquired by the City at a price not
exceeding the principal amount of such Term Bonds plus accrued interest to the date of purchase
thereof, 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 4.04 Partial Redemption.
(a) If less than all of the Bonds are to be redeemed pursuant to Section 4.02, the City
shall determine the maturities and the principal amount thereof to be redeemed and shall direct
the Paying Agent/Registrar to call by lot or any other customary random selection method such
Bonds for redemption.
(b) A portion of a single Bond 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. The
Paying Agent/Registrar shall treat each $5,000 portion of such Bond as though it were a single
Bond for purposes of selection for redemption.
(c) Upon surrender of any Bond for redemption in part, the Paying Agent/Registrar,
in accordance with Section 3.06 of this Ordinance, shall authenticate and deliver exchange
Bonds in an aggregate principal amount equal to the unredeemed principal amount of the Bond
so surrendered, such exchange being without charge.
Section 4.05 Notice of Redemption to Owners.
(a) The Paying Agent/Registrar shall give notice of any redemption of Bonds by
sending notice by United States mail, first class, postage prepaid, not less than thirty (30) days
before the date fixed for redemption, to the Owner of each Bond (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 Bonds are to be surrendered for payment, and, if less than all the Bonds outstanding
are to be redeemed, an identification of the Bonds or portions thereof to be redeemed.
(c) The City reserves the right to give notice of its election or direction to redeem
Bonds under Section 4.02 conditioned upon the occurrence of subsequent events. Such notice
may state (i) that the redemption is conditioned upon the deposit of moneys 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 moneys 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
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rescission of a conditional notice of redemption to the affected Owners. Any Bonds subject to
conditional redemption where redemption has been rescinded shall remain Outstanding.
(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 4.06 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 Bonds 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 Bonds being redeemed.
(b) Upon presentation and surrender of any Bond called for redemption to 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 Bond to the date of
redemption from the money set aside for such purpose.
Section 4.07 Effect of Redemption.
(a) When Bonds have been called for redemption in whole or in part and due
provision has been made to redeem same as herein provided, the Bonds or portions thereof so
redeemed shall no longer be regarded as outstanding except for the purpose of receiving payment
solely from the funds so provided for redemption, and the rights of the Owners to collect interest
which would otherwise accrue after the redemption date on any Bond or portion thereof called
for redemption shall terminate on the date fixed for redemption.
(b) If the City shall fail to make provision for payment of all sums due on a
redemption date, then any Bond or portion thereof called for redemption shall continue to bear
interest at the rate stated on the Bond until due provision is made for the payment of same by the
City.
Section 4.08 Lapse of Payment. Money set aside for the redemption of the Bonds and
remaining unclaimed by the Owners thereof shall be subject to the provisions of Section 3.03(f)
hereof.
ARTICLE V
PAYING AGENT/REGISTRAR
Section 5.01 Appointment of Initial Paying _Agent/Registrar.
(a) The Bank of New York Mellon Trust Company, N.A., is hereby selected and
appointed as the initial Paying Agent/Registrar for the Bonds.
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(b) The Authorized Officer is hereby authorized and directed to execute and deliver,
or cause the execution and delivery by the Mayor and City Clerk, a Paying Agent/Registrar
Agreement, specifying the duties and responsibilities of the City and the Paying Agent/Registrar,
in such form as may be approved by the Authorized Officer, such approval to be evidenced by
the signature of the appropriate City officials.
Section 5.02 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 Bonds.
Section 5.03 Maintaining Paving Agent/Re isg tray.
(a) At all times while any of the Bonds are outstanding, the City will maintain a
Paying Agent/Registrar that is qualified under Section 5.02 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
Bonds.
Section 5.04 Termination.
The City reserves the right to terminate the appointment of any Paying Agent/Registrar
by delivering to the entity whose appointment is to be terminated (i) 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
been appointed and has accepted the duties of Paying Agent/Registrar for the Bonds.
Section 5.05 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 first class United States mail, postage
prepaid, at the address thereof in the Register, stating the effective date of the change and the
name and mailing address of the replacement Paying Agent/Registrar.
Section 5.06 Agreement to Perform Duties and Functions.
By accepting the appointment as Paying Agent/Registrar, and by executing the Paying
Agent/Registrar Agreement, 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 herein.
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Section 5.07 Delivery of Records to Successor.
The Paying Agent/Registrar, promptly upon the appointment of a successor, will deliver
the Register (or a copy thereof) and all other pertinent books and records relating to the Bonds to
the successor Paying Agent/Registrar,
ARTICLE VI
FORM OF THE BONDS
Section 6.01 Form Generally.
(a) The Bonds, including the Registration Certificate of the Comptroller of Public
Accounts of the State to accompany the Initial Bonds, the Certificate of the Paying
Agent/Registrar, and the Assignment form which shall accompany, appear on or be attached or
affixed to each of the Bonds, (i) shall be substantially in the form set forth below, with such
appropriate insertions, omissions, substitutions, and other variations as may be necessary or
desirable and not prohibited by this Ordinance and the Pricing Certificate, 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 legend relating to bond
insurance for the Bonds or reproduction of an opinion of counsel) as, consistently herewith, may
be determined by the Authorized Officer or by the officers executing such Bonds, as evidenced
by their execution thereof.
(b) Any portion of the text of any Bonds may be set forth on the reverse side thereof,
with an appropriate reference thereto on the face of the Bonds.
(c) The definitive Bonds 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 Bonds, as evidenced by their
execution thereof.
(d) The Initials Bonds submitted to the Attorney General of the State may be
typewritten and photocopied or otherwise reproduced.
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Section 6.02 Form of Current Interest Bond.
(a) Form of Current Interest Bond.
REGISTERED REGISTERED
No. $
United States of America
State of Texas
Counties of Harris and Chambers
CITY OF BAYTOWN, TEXAS
GENERAL OBLIGATION AND REFUNDING BOND
SERIES 2012
INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP NO.:
The City of Baytown, Texas (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
unless the payment of the principal hereof shall have been paid or provided for, and to pay
interest on such principal amount from the later of the Dated 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 on February 1 and August 1 of each year, commencing 2
The principal of this Bond shall be payable without exchange or collection charges in
lawful money of the United States of America upon presentation and surrender of this Bond at
the corporate trust office of The Bank of New York Mellon Trust Company, NA., 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
Bond is payable by check dated as of the interest payment date, mailed by the Paying
1 Insert from Pricing Certificate.
2 Insert from Pricing Certificate.
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Agent/Registrar to the registered owner at the address shown on the registration books kept by
the Paying Agent/Registrar, 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. For
the purpose of the payment of interest on this Bond, the registered owner shall be the person in
whose name this Bond 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 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 days after the Special Record Date)
shall be sent at least five business days prior to the Special Record Date by United States mail,
first class, postage prepaid, to the address of each owner of a Bond appearing on the books of the
Paying Agent/Registrar at the close of business on the fifteenth day next preceding the date of
mailing of such notice.
If the date for the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, legal holiday, or day on which banking institutions in the city where the Paying
Agent/Registrar is located are required or authorized by law or executive order to close, the date
for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal
holiday, or day on which banking institutions are required or authorized to close, and payment on
such date shall for all purposes be deemed to have been made on the original date payment was
due.
This Bond is one of a series of fully registered bonds specified in the title hereof, dated as
3 , issued in the aggregate principal amount of 4 , [in part as (i) 5
original principal amount of Capital Appreciation Bonds, and (ii) 6 principal amount
of Current Interest Bonds,]? pursuant to a certain ordinance (the "Bond Ordinance ") adopted by
the City Council of the City and a pricing certificate executed pursuant to the Bond Ordinance
(the "Pricing Certificate," and, together with the Bond Ordinance, the "Ordinance "), for the
purposes of refunding certain outstanding obligations of the City; streets, sidewalks, drainage
and utilities improvements; public safety, EMS and fire fighting facilities and equipment; park
improvements and citywide beautification; the extension of East Baker Road; and drainage
facilities; and paying the costs of issuing the Bonds. This Bond is a Current Interest Bond.
3 Insert from Pricing Certificate.
4 Insert from Pricing Certificate.
5 Insert from Pricing Certificate.
6 Insert from Pricing Certificate.
7 Delete if Capital Appreciation Bonds are not issued.
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The Bonds and the interest thereon are payable from the proceeds of a direct and
continuing ad valorem tax levied, within the limits prescribed by law, against all taxable property
in the City sufficient, together with certain available funds of the City on deposit in the interest
and sinking fund for the Bonds, to provide for the payment of the principal of and interest on the
Bonds, as described and provided in the Ordinance.
The City has reserved the option to redeem the Bonds maturing on and after 8
in whole or in part before their respective scheduled maturity dates, on 9 , 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 Bonds 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 Bonds, or portions thereof, within such maturity and in
such principal amounts, for redemption.
[Mandatory redemption language] 10
Not less than thirty (30) days prior to a redemption date for the Bonds, the City shall
cause a notice of redemption to be sent by United States mail, first class, postage prepaid, to the
Owners of the Bonds 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.
In the Ordinance, the City reserves the right, in the case of an optional redemption, to
give notice of its election or direction to redeem Bonds conditioned upon the occurrence of
subsequent events. Such notice may state (i) that the redemption is conditioned upon the deposit
of moneys 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 moneys 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 Bond subject to conditional redemption for which such redemption has been
rescinded shall remain outstanding.
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
Bonds called for redemption shall become due and payable on the specified redemption date, and
8 Insert from Pricing Certificate.
9 Insert from Pricing Certificate.
10 Insert from Pricing Certificate.
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notwithstanding that any Bond or portion thereof has not been surrendered for payment, interest
on such Bonds or portions thereof shall cease to accrue.
As provided in the Ordinance, and subject to certain limitations therein set forth, this
Bond is transferable upon surrender of this Bond 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 Bonds 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 Bond 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 Bond is registered on the
Record Date) and for all other purposes, whether or not this Bond be overdue, and neither the
City nor the Paying Agent/Registrar shall be affected by notice to the contrary.
IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Bond and the
series of which it is a part is duly authorized by law; that all acts, conditions and things required
to be done precedent to and in the issuance of the Bonds have been properly done and performed
and have happened in regular and due time, form and manner, as required by law; that sufficient
and proper provision for the levy and collection of taxes has been made, within the limits
prescribed by law, which when collected shall be appropriated exclusively to the timely payment
of the principal of and interest on the Bonds; and that the total indebtedness of the City,
including the Bonds, does not exceed any constitutional or statutory limitation.
IN WITNESS WHEREOF, the City has caused this Bond to be duly executed under its
official seal in accordance with law.
City Clerk Mayor
City of Baytown, Texas City of Baytown, Texas
[SEAL]
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(b) Form of Certificate of Paving Agent/Registrar.
CERTIFICATE OF PAYING AGENT /REGISTRAR
This is one of the Bonds referred to in the within mentioned Ordinance. The series of
Bonds of which this Bond is a part was originally issued as one Initial Bond 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
(c) Form of Assi nment.
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
Bond and all rights hereunder and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration hereof,
power of substitution in the premises.
Dated:
Signature Guaranteed By:
Authorized Signatory
within
with full
NOTICE: The signature on this Assignment
must correspond with the name of the
registered owner as it appears on the face of
the within Bond in every particular and must
be guaranteed in a manner acceptable to the
Paying Agent/Registrar.
(d) Initial Current Interest Bond Insertions.
(i) The Initial Current Interest Bond shall be in the form set forth in
paragraphs (a), (b) and (c) of this Section, except that, in the event there is more than one
maturity of Bonds:
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(A) immediately under the name of the Bond, the headings
"INTEREST RATE" and "MATURITY DATE" shall both be completed with the
words "As Shown Below" and "CUSIP NO. " deleted;
(B) in the first paragraph the words "on the Maturity Date specified
above, the sum of DOLLARS" shall be deleted
and the following will be inserted: "on in the years, in the principal
installments and bearing interest at the per annum rates set forth in the following
schedule:
(Information to be inserted from the Pricing Certificate); and
(C) the Initial Current Interest Bond shall be numbered ICI -1.
(ii) The following Registration Certificate of Comptroller of Public Accounts
shall appear on the Initial Bond for the Current Interest Bonds:
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER §
OF PUBLIC ACCOUNTS & REGISTER NO.
THE STATE OF TEXAS
I HEREBY CERTIFY THAT there is on file and of record in my office a certificate to
the effect that the Attorney General of the State of Texas has approved this Bond, and that this
Bond has been registered this day by me.
WITNESS MY SIGNATURE AND SEAL OF OFFICE this
[SEAL]
" Insert from Pricing Certificate.
43932095.1
Comptroller of Public Accounts of
the State of Texas
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Section 6.03 Form of Capital Appreciation Bond.
(a) Form of Capital Appreciation Bond.
REGISTERED
No.
REGISTERED
MATURITY AMOUNT
United States of America
State of Texas
Counties of Harris and Chambers
CITY OF BAYTOWN, TEXAS
GENERAL OBLIGATION AND REFUNDING BOND
SERIES 2012
ORIGINAL
YIELD TO PRINCIPAL MATURITY CLOSING
MATURITY: AMOUNT: DATE: DATE:
12 13 14 15
CUSIP
NUMBER:
The City of Baytown, Texas (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 Maturity Amount of this Bond,
being the sum of
DOLLARS
The Maturity Amount represents the total of the Original Principal Amount hereof, plus
the initial premium paid hereon, together with interest thereon to the Maturity Date. Interest
accretes from the Closing Date specified above, and will compound semiannually on 16
12 Insert from Pricing Certificate.
" Insert from Pricing Certificate.
14 Insert from Pricing Certificate.
15 Insert from Pricing Certificate.
16 Insert from Pricing Certificate.
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113932095.1
and on 17 in each year, commencing on 1S . A table of "Accreted Values" per $5,000
Maturity Amount is printed on or attached to this Bond. The term "Accreted Value," as used
herein means the original principal amount of this Bond plus the initial premium, if an�, paid
therefore with interest thereon accreted and compounded semiannually to the on I or
20 next preceding the date of such calculation(or, the date of calculation, if such calculation
is made on 21 or 22 ) at a compounding rate which produces the approximate yield to
maturity set forth above. For any date other than a 23 or 24 , the Accreted Value of
this Bond shall be determined by a straight -line interpolation between the values for the
applicable semiannual compounding dates, based on 30 -day months.
If the date for the payment of the Maturity Amount on this Bond shall be a Saturday,
Sunday, legal holiday, or day on which banking institutions in the city where the Paying
Agent/Registrar is located are required or authorized by law or executive order to close, the date
for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal
holiday, or day on which banking institutions are required or authorized to close, and payment on
such date shall for all purposes be deemed to have been made on the Maturity Date.
This Bond is one of a series of fully registered bonds specified in the title hereof, dated as
of 25 , issued in the aggregate principal amount of $ 26 , in part as (i) $ 27
original principal amount of Capital Appreciation Bonds, and (ii) $ 28 principal amount of
Current Interest Bonds, pursuant to a certain ordinance (the "Bond Ordinance ") adopted by the
City Council of the City and a pricing certificate executed pursuant to the Bond Ordinance (the
"Pricing Certificate," and, together with the Bond Ordinance, the "Ordinance "), for the purposes
of refunding certain outstanding obligations of the City; streets, sidewalks, drainage and utilities
improvements; public safety, EMS and fire fighting facilities and equipment; park improvements
17 Insert from Pricing Certificate.
18 Insert from Pricing Certificate.
19 Insert from Pricing Certificate.
20 Insert from Pricing Certificate.
21 Insert from Pricing Certificate.
22 Insert from Pricing Certificate.
" Insert from Pricing Certificate.
24 Insert from Pricing Certificate.
25 Insert from Pricing Certificate.
26 Insert from Pricing Certificate.
27 Insert from Pricing Certificate.
29 Insert from Pricing Certificate.
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#3932095.1
and citywide beautification; the extension of East Baker Road; and drainage facilities; and
paying the costs of issuing the Bonds. This Bond is a Capital Appreciation Bond payable as to
the principal and interest as herein provided.
The Capital Appreciation Bonds are not subject to redemption prior to stated maturity.
The Bonds and the interest thereon are payable from the proceeds of a direct and
continuing ad valorem tax levied, within the limits prescribed by law, against all taxable property
in the City sufficient, together with certain available funds of the City on deposit in the interest
and sinking fund for the Bonds, to provide for the payment of the principal of and interest on the
Bonds, as described and provided in the Ordinance.
As provided in the Ordinance, and subject to certain limitations therein set forth, this
Bond is transferable upon surrender of this Bond 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 Bonds 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 Bond 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 Bond is registered on the
Record Date) and for all other purposes, whether or not this Bond be overdue, and neither the
City nor the Paying Agent/Registrar shall be affected by notice to the contrary.
IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Bond and the
series of which it is a part is duly authorized by law; that all acts, conditions and things required
to be done precedent to and in the issuance of the Bonds have been properly done and performed
and have happened in regular and due time, form and manner, as required by law; that sufficient
and proper provision for the levy and collection of taxes has been made, within the limits
prescribed by law, which when collected shall be appropriated exclusively to the timely payment
of the principal of and interest on the Bonds; and that the total indebtedness of the City,
including the Bonds, does not exceed any constitutional or statutory limitation.
IN WITNESS WHEREOF, the City has caused this Bond to be duly executed under its
official seal in accordance with law.
City Clerk
City of Baytown, Texas
[SEAL]
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#3932095.1
Mayor
City of Baytown, Texas
(b) Form of Certificate of Paying Agent/Registrar.
CERTIFICATE OF PAYING AGENT/REGISTRAR
This is one of the Bonds referred to in the within mentioned Ordinance. The series of
Bonds of which this Bond is a part was originally issued as one Initial Bond 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
(c) Fonn 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
Bond and all rights hereunder and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration hereof,
power of substitution in the premises.
Dated:
Signature Guaranteed By:
Authorized Signatory
within
with full
NOTICE: The signature on this Assignment
must correspond with the name of the
registered owner as it appears on the face of
the within Bond in every particular and
must be guaranteed in a manner acceptable
to the Paying Agent/Registrar.
(d) Table of Accreted Values.
The Accreted Values 29 of the Capital Appreciation Bonds shall be printed on the reverse
side of, or attached to, each of the Capital Appreciation Bonds, including the Initial Capital
Appreciation Bond.
29 Insert from Pricing Certificate.
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#3932095.1
(e) Initial Capital Appreciation Bond Insertions.
(i) The Initial Capital Appreciation Bond shall be in the form set forth in
paragraphs (a), (b), (c) and (d) of this Section, except for the following alterations:
(A) immediately under the name of the Bond, the headings "YIELD
TO MATURITY," "ORIGINAL PRINCIPAL AMOUNT" AND "MATURITY
DATE," shall be completed with the words "As Shown Below" and "CUSIP NO.
" deleted;
(B) in the first paragraph of the Bond, the words "on the Maturity Date
specified above, the Maturity Amount of This Bond being the sum of
DOLLARS" shall be deleted and the following will be inserted: "on $ 30 in
the years, in the Original Principal Amounts and the Maturity Amounts and with
interest at the compounding rates which produce the respective approximate Yield
to Maturity set forth in the following schedule:
(Information to be inserted from the Pricing Certificate); and
(C) the Initial Capital Appreciation Bond Shall be numbered ICA -1.
30 Insert from Pricing Certificate.
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#3932095.1
Original
Principal
Yield to
Maturity
Years
Amounts
Maturity—
Amounts
(Information to be inserted from the Pricing Certificate); and
(C) the Initial Capital Appreciation Bond Shall be numbered ICA -1.
30 Insert from Pricing Certificate.
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#3932095.1
(ii) The following Registration Certificate of Comptroller of Public Accounts
shall appear on the Initial Bond for the Capital Appreciation Bonds:
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER §
OF PUBLIC ACCOUNTS § REGISTER NO.
THE STATE OF TEXAS &
I HEREBY CERTIFY THAT there is on file and of record in my office a certificate to
the effect that the Attorney General of the State of Texas has approved this Bond, and that this
Bond has been registered this day by me.
WITNESS MY SIGNATURE AND SEAL OF OFFICE this
[SEAL]
Section 6.04 CUSIP Registration.
Comptroller of Public Accounts of
the State of Texas
The City may secure identification numbers through the CUSIP Service Bureau Division
of Standard & Poor's Ratings Service, a division of the McGraw -Hill Companies, New York,
New York, and may authorize the printing of such numbers on the face of the Bonds. It is
expressly provided, however, that the presence or absence of CUSIP numbers on the Bonds 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 the attorneys approving said Bonds as to
legality are to be held responsible for CUSIP numbers incorrectly printed on the Bonds.
Section 6.05 Legal Opinion.
The approving legal opinion of Bond Counsel may be attached to or printed on the
reverse side of each Bond.
Section 6.06 Bond Insurance.
If it is determined that the purchase of bond insurance would result in savings to the City,
the Authorized Officer is hereby authorized to approve the purchase of and payment of the
premium for bond insurance by the City, the terms of commitment for such insurance, if any and
any special provisions related to such policy, if any. All officials and representatives of the City
are authorized and directed to execute such documents and to do any and all things necessary or
desirable to obtain such insurance. A statement relating to the bond insurance obtained for the
Bonds, if any, may be printed on or attached to each Bond.
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#3932095.1
ARTICLE VII
DELEGATION OF AUTHORITY,
SALE AND DELIVERY OF BONDS, DEPOSIT OF PROCEEDS
Section 7.01 Sale of Bonds; Official Statement.
(a) The Bonds shall be sold to the Underwriters or Purchasers in accordance with the
terms of this Ordinance. As authorized by Chapters 1207 and 1371, Texas Government Code, as
amended, the Authorized Officer is authorized to act on behalf of the City in selling and
delivering the Bonds and in carrying out the other procedures specified in this Ordinance,
including determining whether the Bonds will be sold in a negotiated sale, the price at which
each of the Bonds will be sold, the number and designation of each series or subseries of Bonds
to be issued, the form in which the Bonds shall be issued, the years and dates on which the
Bonds will mature, the principal amount (with respect to Current Interest Bonds) and Maturity
Amount (with respect to Capital Appreciation Bonds) to mature in each of such years, the
aggregate principal amount of Refunded Obligations, the aggregate principal amount (with
respect to Current Interest Bonds) and Maturity Amount (with respect to Capital Appreciation
Bonds) to be issued by the City, the rate of interest to be borne by each maturity of the Bonds,
the yield to Stated Maturity for the Capital Appreciation Bonds, the first interest payment date
for the Current Interest Bonds, the first compounding date for the Capital Appreciation Bonds,
the dates, prices and terms upon and at which the Bonds shall be subject to redemption prior to
maturity at the option of the City and shall be subject to mandatory sinking fund redemption, the
designation of the Refunded Obligations from the Schedule of Refunded Obligation Candidates,
the selection of an escrow agent, verification agent and bond insurer, if any, and all other matters
relating to the issuance, sale and delivery of the Bonds and including the refunding of the
Refunded Obligations, 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 Bonds shall not be less than 90% of the
aggregate original principal amount of the Bonds plus accrued interest thereon from their
date to their delivery;
(ii) the Bonds shall not bear interest at a rate greater than 5.00 %;
(iii) the aggregate principal amount of the Bonds authorized to be issued for
the purposes described in Section 3.01 shall not exceed the maximum par amount
described in Section 3.01 and shall be in an amount sufficient, in combination with the
net premium from the sale of the Bonds, plus other available funds of the City, if any, to
provide for the refunding of the maximum amount of the Refunded Obligations and the
costs and expenses of issuance of the Bonds, including underwriter's discount;
(iv) the present value savings in debt service resulting from the refunding of
the Refunded Obligations shall be at least 5.00% of the principal amount of the Refunded
Obligations, as shown by a table of calculations prepared by the City's financial advisor
and attached to the Pricing Certificate; and
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#3932095.1
(v) no Bond shall mature more than forty (40) years from the date of delivery
thereof.
(b) The Authorized Officer is hereby authorized and directed to execute and deliver
on behalf of the City a Purchase Agreement providing for the sale of the Bonds to the
Underwriters, in such form as determined by the Authorized Officer. The Authorized Officer is
hereby authorized and directed to approve the final terms and provisions of the Purchase
Agreement in accordance with the terms of the Pricing Certificate and this Ordinance, which
final terms shall be determined to be the most advantageous reasonably attainable by the City,
such approval and determination being evidenced by its execution thereof by the Authorized
Officer. 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 Bonds. The Initial Bonds shall initially be registered in the name of
the Underwriters or their designee or such other entity as may be specified in the Purchase
Agreement.
(c) The authority granted to the Authorized Officer under Sections 7.01(a) through
7.01(c) shall expire on a date one year from the date of this Ordinance, unless otherwise
extended by the City by separate action.
(d) The City hereby approves the form and content and distribution of the Preliminary
Official Statement, and the Preliminary Official Statement (with such addenda, supplements or
amendments as may be approved by the Authorized Officer and the Underwriters) is deemed
final within the meaning and for the purposes of paragraph (b)(1) of Rule 15c2 -12 under the
Securities and Exchange Act of 1934. The City hereby authorizes the preparation of a final
Official Statement reflecting the terms of the Purchase Agreement and other relevant
information. The use of such final Official Statement by the Underwriters (with such appropriate
variations as shall be approved by the Authorized Officer and the Underwriters) is hereby
approved and authorized and the proper officials of the City are authorized to sign such Official
Statement and deliver a certificate pertaining to such Official Statement, if necessary.
(e) 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 Bonds, pay the costs of issuance of the Bonds, and effectuate the terms and
provisions of this Ordinance.
Section 7.02 Control and Delivery of Bonds.
(a) The Mayor is hereby authorized to have control of the Initial Bond and all
necessary records and proceedings pertaining thereto pending investigation, examination, and
approval of the Attorney General of the State of Texas, registration by the Comptroller of Public
Accounts of the State of Texas and registration with, and initial exchange or transfer by, the
Paying Agent/Registrar.
(b) After registration by the Comptroller of Public Accounts, delivery of the Bonds
shall be made to either the Underwriters or the Purchasers under and subject to the general
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supervision and direction of the Authorized Officer, against receipt by the City of all amounts
due to the City under the terms of sale.
Section 7.03 Deposit of Proceeds, Transfer of Funds.
Proceeds from the sale of the Bonds, 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.
ARTICLE VIII
REPRESENTATIONS AND COVENANTS
Section 8.01 Payment of the Bonds. On or before each date on which principal,
premium, if any, or interest is due on the Bonds, there shall be made available to the Paying
Agent/Registrar, out of the Interest and Sinking Fund, money sufficient to pay such principal,
premium, if any, or interest when due.
Section 8.02 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 Bond; the City will promptly
pay or cause to be paid the principal of and interest on each Bond on the dates and at the places
and manner prescribed in such Bond; 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 Bonds; all
action on its part for the creation and issuance of the Bonds has been or will be duly and
effectively taken; and the Bonds 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 FEDERAL INCOME TAX EXCLUSION
Section 9.01 General Tax Covenants.
The City intends that the interest on the Bonds shall be excludable from gross income for
purposes of federal income taxation pursuant to sections 103 and 141 through 150 of the Code
and the applicable regulations promulgated thereunder (the "Regulations "). The City covenants
and agrees not to take any action, or knowingly omit to take any action within its control, that if
taken or omitted, respectively, would cause the interest on the Bonds to be includable in the
gross income, as defined in section 61 of the Code, of the holders thereof for purposes of federal
income taxation. In particular, the City covenants and agrees to comply with each requirement
of this Article IX, provided, however, that the City shall not be required to comply with any
particular requirement of this Article IX if the City has received an opinion of nationally
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43932095.1
recognized bond counsel ( "Counsel's Opinion ") that such noncompliance will not adversely
affect the exclusion from gross income for federal income tax purposes of interest on the Bonds
or if the City has received a Counsel's Opinion to the effect that compliance with some other
requirement set forth in this Article IX will satisfy the applicable requirements of the Code, in
which case compliance with such other requirement specified in such Counsel's Opinion shall
constitute compliance with the corresponding requirement specified in this Article.
Section 9.02 No Private Use or Payment and No Private Loan Financing.
The City shall certify, through an authorized officer, employee or agent, that, based upon
all facts and estimates known or reasonably expected to be in existence on the date the Bonds are
delivered, the proceeds of the Refunded Obligations have not been and the Bonds will not be
used in a manner that would cause the Bonds to be "private activity bonds" within the meaning
of section 141 of the Code and the Regulations. The City covenants and agrees that it will make
such use of the proceeds of the Bonds, including interest or other investment income derived
from Bond proceeds, regulate 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 Bonds will not be
'`private activity bonds" within the meaning of section 141 of the Code and the Regulations.
Section 9.03 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 Bonds to be
"federally guaranteed" within the meaning of section 149(b) of the Code and the Regulations,
except as permitted by section 149(b)(3) of the Code and the Regulations.
Section 9.04 Bonds are not Hedge Bonds.
The City covenants and agrees not to take any action, or knowingly omit to take any
action, and has not knowingly omitted and will not knowingly omit to take any action, within its
control, that, if taken or omitted, respectively, would cause the Bonds to be "hedge bonds"
within the meaning of section 149(g) of the Code and the Regulations.
Section 9.05 No- Arbitrage.
The City covenants and agrees that it will make such use of the proceeds of the Bonds
including interest or other investment income derived from Bond proceeds, regulate investments
of proceeds of the Bonds, and take such other and further action as may be required so that the
Bonds will not be "arbitrage bonds" within the meaning of section 148(a) of the Code and the
Regulations. 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
Bonds are delivered, the City will reasonably expect that the proceeds of the Bonds will not be
used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of
section 148(a) of the Code and the Regulations.
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#3932095.1
Section 9.06 Arbitrage Rebate.
If the City does not qualify for an exception to the requirements of section 148(0 of the
Code, the City will take all necessary steps to comply with the requirement that certain amounts
earned by the City on the investment of the "gross proceeds" of the Bonds (within the meaning
of section 148(f)(6)(B) of the Code) be rebated to the federal government. Specifically, the City
will (i) maintain records regarding the investment of the gross proceeds of the Bonds as may be
required to calculate the amount earned on the investment of the gross proceeds of the Bonds
separately from records of amounts on deposit in the funds and accounts of the City allocable to
other bond issue of the City or moneys which do not represent gross proceeds of any bonds of
the City, (ii) calculate at such times as are required by the Regulations, the amount earned from
the investment of the gross proceeds of the Bonds which is required to be rebated to the federal
government, and (iii) pay, not less often than every fifth anniversary date of the delivery of the
Bonds or on such other dates as may be permitted under the Regulations, all amounts required to
be rebated to the federal government. Further, the City will not indirectly pay any amount
otherwise payable to the federal government pursuant to the foregoing requirements to any
person other than the federal government by entering into any investment arrangement with
respect to the gross proceeds of the Bonds that might result in a reduction in the amount required
to be paid to the federal government because such arrangement results in a smaller profit or 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 9.07 Information Reporting.
The City covenants and agrees to file or cause to be filed with the Secretary of the
Treasury, not later than the 15th day of the second calendar month after the close of the calendar
quarter in which the Bonds are issued, an information statement concerning the Bonds, all under
and in accordance with section 149(e) of the Code and the Regulations.
Section 9.08 Record Retention.
The City will retain all pertinent and material records relating to the use and expenditure
of the proceeds of the Bonds until six years after the last Bond is redeemed, or such shorter
period as authorized by subsequent guidance issued by the Department of 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 Bonds by
the Internal Revenue Service.
Section 9.09 Registration.
The Bonds will be issued in registered form.
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N3932095.1
Section 9. 10 Continuing Obligation.
Notwithstanding any other provision of this Ordinance, the City's obligations under the
covenants and provisions of Article shall survive the defeasance and discharge of the Bonds.
ARTICLE X
DISCHARGE
Section 10.01 Discharge.
The Bonds may be refunded, discharged or defeased in any manner now or hereafter
permitted by applicable law.
ARTICLE XI
CONTINUING DISCLOSURE UNDERTAKING
Section 11.01 Annual Reports.
(a) The City will provide certain updated financial information and operating data to
the MSRB annually in an electronic format as prescribed by the MSRB. The information to be
updated includes certain updated financial information and operating data with respect to the
City of the general type included in the final Official Statement in Tables 1 through 7 and 9
through 20 and in Appendix B thereto. The City will update and provide this information within
six (6) months of the end of its fiscal years ending in or after 2012. Financial statements so to be
provided shall be prepared in accordance with the accounting principles described in the notes to
the financial statements for the most recently concluded Fiscal Year, and, 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
such period, the City shall provide notice that audited financial statements are not available and
shall provide unaudited financial statements for such Fiscal Year to the MSRB. Thereafter,
when and if audited financial statements become available, the City shall provide such audited
financial statements as required to the MSRB.
(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.
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Section 11.02 Material 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 Bonds:
(1) Principal and interest payment delinquencies;
(2) Non - payment related defaults, if material;
(3) Unscheduled draws on debt service reserves reflecting financial
difficulties;
(4) 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 the
Bonds, or other material events affecting the tax status of the Bonds;
(7) Modifications to rights of the holders of the Bonds, if material;
(8) Bond calls, if material, and tender offers;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the Bonds,
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
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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; and
(14) Appointment of successor or additional trustee or the change of name of a
trustee, if material.
(b) The City shall provide to the MSRB, in an electronic format as prescribed by the
MSRB, in a timely manner, notice of a failure by the City to provide required annual financial
information and notices of material events in accordance with Section 11.01 and section (a)
above. All documents provided to the MSRB pursuant to this section shall be accompanied by
identifying information as prescribed by the MSRB.
Section 11.03 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 Bonds within the meaning of the Rule, except that the City in any event will give
notice of any bond calls and any defeasances that cause the City to be no longer an "obligated
person ".
(b) The provisions of this Article are for the sole benefit of the Owners and beneficial
owners of the Bonds, 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 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 Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER
OR BENEFICIAL OWNER OF ANY BOND 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 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
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
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43932095.1
(c) No default by the City in observing or performing its obligations under this
Article shall constitute a breach of or default under the 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 Bonds in the primary offering of the Bonds 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 Bonds consent to such amendment or (B) an entity or
individual 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 Bonds. 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 underwriters of the
initial public offering of the Bonds from lawfully purchasing or selling Bonds 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 11.01 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.
ARTICLE XII
APPROVAL OF ESCROW AGREEMENT AND RELATED PROVISIONS
Section 12.01 Appointment of Escrow Agent, Approval of Escrow Agreement.
The Bank of New York Mellon Trust Company, N.A., is hereby appointed Escrow Agent
for the purpose of refunding the Refunded Obligations. The Authorized Officer is hereby
authorized and directed to execute and deliver, or cause the execution and delivery by the Mayor
and City Clerk, an Escrow Agreement, having such terms and provisions as are approved by the
Authorized Officer as evidenced by the execution thereof by the appropriate City official.
Section 12.02 Purchase of Securities for Escrow Fund.
The Authorized Officer is authorized to make necessary arrangements for the purchase of
the Escrow Securities referenced in the Escrow Agreement, including, without limitation, the
execution of such documents, certificates or instruments as may be necessary in connection
therewith including the execution of subscriptions for the purchase of United States Treasury
Securities — State and Local Government Series. All actions of the Authorized Officer taken
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#3932095.1
prior to the date of this Ordinance in connection with making arrangements for the purchase of
such Escrow Securities are hereby ratified and affirmed.
Section 12.03 Redemption and Defeasance of Refunded Obligations.
Following the deposit to the Escrow Fund or with the paying agent/registrar for the
Refunded Obligations, the Refunded Obligations shall be payable solely from and secured by the
cash and securities on deposit in the Escrow Fund or such other fund held by the paying
agent/registrar for the Refunded Obligations for the purpose of refunding the Refunded
Obligations and shall cease to be payable from ad valorem taxes. The Refunded Obligations are
hereby called for redemption prior to maturity on the dates and at the redemption prices set forth
in the Pricing Certificate. The City Clerk is hereby authorized and directed to cause to be
delivered to the paying agent/registrar for the Refunded Obligations a certified copy of this
Ordinance and a copy of the Pricing Certificate calling the Refunded Obligations for redemption.
The delivery of this Ordinance and the Pricing Certificate to the paying agent/registrar for the
Refunded Obligations shall constitute the giving of notice of redemption to the paying
agent/registrar for the Refunded Obligations, and such paying agent /registrar is hereby
authorized and directed to give notice of redemption to the owners of the Refunded Obligations
in accordance with the requirements of the respective ordinances authorizing the issuance
thereof.
ARTICLE XIII
MISCELLANEOUS
Section 13.01 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 Bonds by the
Attorney General of Texas.
Section 13.02 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 13.03 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 Bonds, or be
subject to any personal liability or accountability by reason of the issuance thereof.
Section 13.04 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.
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43932095.1
Section 13.05 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.
Section 13.06 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]
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INTRODUCED, READ and PASSED by the afflirmative vote of the City Council of the
C " - , ILY0113aYLOwn tlUSLnC )I Q ki dayo V Januaq, 111)11)
APPROVED AS TO FORM:
,10T�ACIO RAMIREZ, SR., City Atto, y
43932095A
Signature Page to
City of Baytown Ordinance No.
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SCHEDULEI
SCHEDULE OF REFUNDED OBLIGATION CANDIDATES
City of Baytown, Texas Certificates of Obligation, Series 2003
City of Baytown, Texas General Obligation Bonds, Series 2003
City of Baytown, Texas General Obligation Bonds, Series 2004
City of Baytown, Texas Certificates of Obligation, Series 2004A
Schedule I
#3932095.1
EXHIBIT A
Form of Pricing Certificate
Exhibit A to Ordinance
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#3932095.1
FORM OF
PRICING CERTIFICATE
Re: City of Baytown, Texas General Obligation and Refunding Bonds, Series 2012 (the
"Bonds ")
I, the undersigned officer of the City of Baytown, Texas (the "City "), do hereby make
and execute this Pricing Certificate pursuant to an ordinance adopted by the City Council of the
City on January _, 2012 (the "Ordinance ") captioned as follows:
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, AUTHORIZING THE ISSUANCE OF CITY OF BAYTOWN, TEXAS
GENERAL OBLIGATION AND REFUNDING BONDS, SERIES 2012;
LEVYING A TAX IN PAYMENT THEREOF; SETTING CERTAIN
PARAMETERS FOR THE BONDS; AUTHORIZING THE AUTHORIZED
OFFICER TO APPROVE THE AMOUNT, THE INTEREST RATE, PRICE
AND CERTAIN OTHER TERMS THEREOF; AUTHORIZING THE
REDEMPTION PRIOR TO MATURITY OF CERTAIN OUTSTANDING
BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND
PURCHASE AGREEMENT, AN ESCROW AGREEMENT AND A PAYING
AGENT/REGISTRAR AGREEMENT RELATING TO SUCH BONDS;
APPROVING THE PREPARATION AND DISTRIBUTION OF AN OFFICIAL
STATEMENT; AND ENACTING OTHER PROVISIONS RELATING
THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF
authorizing the issuance of the referenced Bonds. Capitalized terms used in this Pricing
Certificate shall have the meanings given such terms in the Ordinance.
As authorized by Section 7.01 of the Ordinance, I have acted on behalf of the City in
selling the Bonds to (the "Underwriters ") pursuant to the
terms of the Purchase Agreement dated as of the date hereof. The Bonds shall have the terms set
forth in this Pricing Certificate.
A. The Bonds shall have a Dated Date of , 2012 and shall be
issued in the aggregate principal amount of $ , for the purposes specified in
Section 3.01 in the Ordinance. The Bonds have a scheduled Closing Date of ,
2011.
B. The [Current Interest] Bonds shall bear interest from the Closing Date. The
Bonds shall mature on February 1 in each of the years, in the principal amounts and shall bear
interest at the per annum rates set forth in the following schedule:
Exhibit A to Ordinance
A -2
#3932095.1
Stated Principal Interest Stated Principal Interest
Maturily Amount Rate Maturity Amount Rate
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
C.
la
E.
% 2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
[Capital Appreciation Bonds, if any]
[Optional Redemption]
[Mandatory Redemption]
$
F. The yield on the Bonds as calculated for federal arbitrage purposes is
approximately %, as determined by the City's financial advisor, First Southwest
Company.
G. The Refunded Obligation Candidates to be refunded with a portion of the
proceeds of the Bonds are set forth in Schedule I hereto. The Refunded Obligations are hereby
called for redemption on redemption dates specified in Schedule I. The Refunded Obligations
shall be redeemed at a redemption price equal to the principal amount thereof plus interest
accrued thereon to the redemption date therefor.
H. In accordance with the other parameters contained in Section 7.01 of the
Ordinance, the undersigned does hereby find, certify and represent that the foregoing terms of
the Bonds satisfy the following requirements and parameters contained within such Section 7.01:
(i) the price to be paid for the Bonds is not less than 90% of the aggregate
original principal amount of the Bonds plus accrued interest thereon from their date to
their delivery;
(ii) the Bonds do not bear interest at a rate greater than the maximum rate of
(iii) the aggregate principal amount of the Bonds authorized to be issued for
the purposes described in Section 3.01 of the Ordinance does not exceed $34,500,000 and
is in an amount sufficient, in combination with the net premium from the sale of the
Exhibit A to Ordinance
A -3
43932095.1
Bonds, plus other available funds of the City, if any, to provide for the refunding of the
maximum amount of the Refunded Obligations selected from the Refunded Obligation
Candidates and the costs and expenses of issuance of the Bonds, including underwriter's
discount;
(iv) the refunding of the Refunded Obligations results in a present value debt
service savings of %. A copy of the table provided by the City's financial advisor, First
Southwest Company, and showing the debt service savings is attached hereto as
Exhibit B; and
(v) no Bond shall mature more than forty (40) years from the date of delivery
thereof.
The proceeds of the Bonds and other available funds shall be applied as follows:
(i) the amount of $ consisting of $ principal
amount of Bond proceeds, plus $ net premium received from the sale of the
Bonds, [plus available funds from the City in the amount of $ j shall be
used to pay the redemption price of the Refunded Obligations;
(ii) the amount of $ , consisting of $ principal
amount of Bond proceeds and $ net premium received from the sale of the
Bonds shall be used;
(iii) net premium received from the sale of the Bonds in the amount of
shall be used to pay the costs of issuance;
(iv) net premium received from the sale of the Bonds in the amount of
$ shall be used the pay the underwriting discount;
(v) accrued interest on the Bonds in the amount of $ shall be
deposited to the Interest and Sinking Fund for the Bonds; and
(vi) any amounts remaining after accomplishing the above described purposes
shall be deposited to the Interest and Sinking Fund.
J. [Insurance Provisions]
Exhibit A to Ordinance
A -4
43932095.1
K. The voters of the City authorized the amount of bonds for the purposes set forth in
the following schedule, such schedule reflects the Bonds and the amounts previously issued for
such purposes:
L. The form of Pricing Certificate attached to the Ordinance shall be replaced with
this Pricing Certificate.
[Signature Page Follows]
Exhibit A to Ordinance
A-5
43932095.1
Amount
Previously I
Authorized but
Purpose
Authorized
Issued
Unissued
The Bonds
Unissued
Streets, Sidewalks,
"-'--* -
"8"'-0,000
5
--- --
-'----2-1,000
10,4
........ ...... ..
Drainage and Utilities
Improvements
Public Safety, EMS and
$22,995,000
$7,162,000
... ..... ......................
$15,833,000
-------- . .............
$
Fire Fighting Facilities
and Equipment
Park Improvements and
$10,940,000
$7,530,000
$3,410,000
$
$
Citywide Beautification
Extension of East Baker
$7,170,000
$630,000
$6,540,000
$
Road
Drainage Improvements
$2,020A0
$1,072,000
$948,000
TOTAL
$79,4T5-,-066'"[—$26,8I5,000
, S53,166'-06-6 . ....
.....
L. The form of Pricing Certificate attached to the Ordinance shall be replaced with
this Pricing Certificate.
[Signature Page Follows]
Exhibit A to Ordinance
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43932095.1
This Pricing Certificate for the City of Baytown, Texas, General Obligation and
Refunding Bonds, Series 2012, is executed on the day of 12012.
Authorized Officer
City of Baytown, Texas
Exhibit A to Ordinance
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