HomeMy WebLinkAboutO-2017-3666 Certificate of Obligation, Series 2017 ORDINANCE AUTHORIZING ISSUANCE OF
CITY OF LA PORTE,TEXAS,
CERTIFICATES OF OBLIGATION, SERIES 2017
Adopted January 23,2017
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TABLE OF CONTENTS
Page
ARTICLE I FINDINGS AND DETERMINATIONS 1
Section 1.1: Findings and Determinations 1
ARTICLE II DEFINITIONS AND INTERPRETATIONS 2
Section 2.1: Definitions 2
Section 2.2: Interpretations 3
ARTICLE III TERMS OF THE CERTIFICATES 3
Section 3.1: Amount, Purpose and Authorization 3
Section 3.2: Designation, Date and Interest Payment Dates 3
Section 3.3: Numbers, Denomination, Interest Rates and Maturities 4
Section 3.4: Redemption Prior to Maturity 4
Section 3.5: Manner of Payment, Characteristics, Execution and Authentication 5
Section 3.6: Authentication 5
Section 3.7: Ownership 5
Section 3.8: Registration, Transfer and Exchange 6
Section 3.9: Book-Entry Only System 6
Section 3.10: Replacement Certificates 8
Section 3.11: Cancellation 9
ARTICLE IV FORM OF CERTIFICATES 9
Section 4.1: Form of Certificates 9
ARTICLE V SECURITY FOR THE CERTIFICATES 9
Section 5.1: Pledge and Levy of Taxes and Revenues 9
Section 5.2: Debt Service Fund 10
Section 5.3: Further Proceedings 10
ARTICLE VI CONCERNING THE PAYING AGENT/REGISTRAR 11
Section 6.1: Acceptance 11
Section 6.2: Trust Funds 11
Section 6.3: Certificates Presented 11
Section 6.4: Unclaimed Funds Held by the Paying Agent/Registrar 11
Section 6.5: Paying Agent/Registrar May Own Certificates 11
Section 6.6: Successor Paying Agents/Registrars 11
ARTICLE VII PROVISIONS CONCERNING SALE AND APPLICATION OF PROCEEDS
OF CERTIFICATES 12
Section 7.1: Sale of Certificates; Insurance 12
Section 7.2: Approval, Registration and Delivery 12
Section 7.3: Private Placement Memorandum 12
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Section 7.4: Deposit of Proceeds; Escrow Agreement 12
Section 7.5: Covenants to Maintain Tax Exemption 13
Section 7.6: Related Matters 16
ARTICLE VIII CONTINUING DISCLOSURE UNDERTAKING 16
Section 8.1: Annual Reports 16
Section 8.2: Material Event Notices 16
Section 8.3: Identifying Information. All documents shall be provided to the MSRB in an
electronic format and accompanied by identifying information, as prescribed by the MSRB. 17
Section 8.4: Limitations, Disclaimers and Amendments 18
Section 8.5: Definitions 19
ARTICLE IX SPECIAL PROVISIONS RELATING TO THE TEXAS WATER
DEVELOPMENT BOARD 19
Section 9.1: Compliance with the Texas Water Development Board's Rules and
Regulations 19
Section 9.2: Construction Fund; Timely Use of Proceeds. 19
Section 9.3: Records; Final Accountings 19
Section 9.4: Annual Audit 20
Section 9.5: Investment of Proceeds 20
Section 9.6: Surplus Proceeds 20
Section 9.7: Insurance 20
Section 9.8: Water Conservation Program 20
Section 9.9: TWDB Remedies 20
Section 9.10: Environmental Determination 20
Section 9.11: Environmental Indemnification 20
Section 9.12: Compliance with Davis-Bacon 20
Section 9.13: Federal Funding Accountability and Transparency Act 21
Section 9.14: American Iron and Steel Requirement 21
Section 9.15: Additional Covenants Related to Tax-Exempt Status 21
ARTICLE X MISCELLANEOUS 22
Section 10.1: Defeasance 22
Section 10.2: Ordinance a Contract-Amendments 22
Section 10.3: Legal Holidays 23
Section 10.4: Power to Revise Form of Documents 23
Section 10.5: No Recourse Against City Officials 23
Section 10.6: Further Proceedings 23
Section 10.7: Severability 23
Section 10.8: Open Meeting 23
Section 10.9: Repealer 24
Section 10.10: Effective Date 24
EXHIBIT A- FORM OF CERTIFICATE
EXHIBIT B - FORM OF SPECIAL ESCROW DEPOSIT AGREEMENT
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ORDINANCE NO. 2017-3666
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF LA PORTE,
TEXAS, CERTIFICATES OF OBLIGATION, SERIES 2017; AND
CONTAINING OTHER MATTERS INCIDENT THERETO
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE, TEXAS:
ARTICLE I
FINDINGS AND DETERMINATIONS
Section 1.1: Findings and Determinations. The City Council hereby officially finds
and determines that:
(a) The City of La Porte, Texas (the "City"), acting through its City Council, is
authorized pursuant to and in accordance with the provisions of Texas Local Government Code,
Chapter 271, Subchapter C, as amended (the "Act"), to issue certificates of obligation to
provide all or part of the funds to pay contractual obligations to be incurred for the construction
of public works and the purchase of materials, supplies, equipment, machinery, buildings, land
and rights-of-way for authorized needs and purposes and for the payment of contractual
obligations for professional services, to wit: (i) the planning, acquisition, design and
construction of wastewater system improvements, and (ii) professional services rendered in
connection therewith.
(b) The City Council authorized the publication of a notice of intention to issue its City
of La Porte, Texas, Certificates of Obligation, Series 2017 (the "Certificates") to the effect that
the City Council was tentatively scheduled to meet at 6:00 p.m. on January 23, 2017, at its
regular meeting place to adopt an ordinance authorizing the issuance of the Certificates to be
payable from an ad valorem tax levied, within the limits prescribed by law, on the taxable
property located within the City, and a pledge of surplus net revenues of the City's water and
sewer system(the "System").
(c) Such notice was published on December 22, 2016 and December 29, 2016 in The
Bay Area Observer.
(d) No petition signed by at least five percent(5%)of the qualified voters of the City has
been filed with or presented to any official of the City protesting the issuance of such
Certificates on or before the date of passage of this Ordinance.
(e) The City has determined that it is in the best interests of the City and that it is
otherwise desirable to issue the Certificates to provide all or part of the funds to pay contractual
obligations to be incurred for the purposes authorized by the Act.
(f) The Certificates herein authorized for issuance are to be delivered to the Texas
Water Development Board (the "TWDB" or the "Purchaser") in evidence of a loan commitment
received in the aggregate amount of the Certificates.
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ARTICLE II
DEFINITIONS AND INTERPRETATIONS
Section 2.1: Definitions. As used herein,the following terms shall have the meanings
specified, unless the context clearly indicates otherwise:
"Act"means Texas Local Government Code, Chapter 271, Subchapter C, as amended.
"Attorney General"means the Attorney General of the State of Texas.
"Certificate"or"Certificates"means any or all of the City of La Porte, Texas,
Certificates of Obligation, Series 2017, authorized by this Ordinance.
"City"means the City of La Porte, Texas, and, where appropriate, its City Council.
"City Council"means the governing body of the City.
"Code"means the Internal Revenue Code of 1986, as amended.
"Comptroller"means the Comptroller of Public Accounts of the State of Texas.
"Debt Service Fund"means the fund by that name created pursuant to Section 5.2 hereof.
"Fiscal Year"means the City's then designated fiscal year, which currently is the twelve-
month period beginning on the first day of October of a calendar year and ending on the last day
of September of the next succeeding calendar year and each such period may be designated with
the number of the calendar year in which such period ends.
"Interest Payment Date,"when used in connection with any Certificate, means September
15, 2017, and each March 15 and September 15 thereafter until maturity or earlier redemption of
such Certificate.
"Issuance Date"means the date on which the Certificates are delivered to and paid for by
the Purchaser.
"Ordinance"means this Ordinance and all amendments hereof and supplements hereto.
"Outstanding,"when used with reference to the Certificates,means, as of a particular
date, all Certificates theretofore and thereupon delivered pursuant to this Ordinance except: (a)
any Certificates canceled by or on behalf of the City at or before such date; (b)any Certificates
defeased pursuant to the defeasance provisions of this Ordinance or otherwise defeased as
permitted by applicable law; and(c)any Certificates in lieu of or in substitution for which a
replacement Certificate shall have been delivered pursuant to this Ordinance.
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"Paying Agent/Registrar" means Amegy Bank, a division of ZB, National Association,
Houston, Texas, and its successors in that capacity.
"Purchaser"means the Texas Water Development Board.
"Record Date" means the close of business on the last calendar day of the month
immediately preceding the month in which the applicable Interest Payment Date occurs.
"Register" means the registration books for the Certificates kept by the Paying
Agent/Registrar in which are maintained the names and addresses of, and the principal amounts
registered to, each Registered Owner of Certificates.
"Registered Owner" means the person or entity in whose name any Certificate is
registered in the Register.
Section 2.2: Interpretations. All terms defined herein and all pronouns used in this
Ordinance shall be deemed to apply equally to singular and plural and to all genders. The titles
and headings of the articles and 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. 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 the Certificates and the validity of the levy of ad valorem taxes to pay the principal of
and interest on the Certificates.
ARTICLE III
TERMS OF THE CERTIFICATES
Section 3.1: Amount, Purpose and Authorization. The Certificates shall be issued
in fully registered form, without coupons, under and pursuant to the authority of the Act in the
total authorized aggregate principal amount of TEN MILLION SIX HUNDRED THIRTY FIVE
THOUSAND DOLLARS ($10,635,000) for the purpose of providing all or part of the funds to
pay contractual obligations to be incurred for the purposes described in paragraph 1.1(a) hereof,
and to pay the costs of issuing the Certificates.
Section 3.2: Designation, Date and Interest Payment Dates. The Certificates shall
be designated as the "City of La Porte, Texas, Certificates of Obligation, Series 2017," and shall
be dated February 1, 2017. The Certificates shall bear interest at the rates set forth in Section 3.3
below, from the later of the Issuance Date, or the most recent Interest Payment Date to which
interest has been paid or duly provided for, calculated on the basis of a 360-day year of twelve
30-day months,payable on September 15, 2017, and each March 15 and September 15 thereafter
until maturity or earlier redemption.
If interest on any Certificate is not paid on any Interest Payment Date and continues
unpaid for thirty (30) days thereafter, the Paying Agent/Registrar shall establish a new record
date for the payment of such interest, to be known as a Special Record Date. The Paying
Agent/Registrar shall establish a Special Record Date when funds to make such interest payment
are received from or on behalf of the City. Such Special Record Date shall be fifteen (15) days
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prior to the date fixed for payment of such past due interest, and notice of the date of payment
and the Special Record Date shall be sent by United States mail, first class, postage prepaid, not
later than five (5) days prior to the Special Record Date, to each affected Registered Owner as of
the close of business on the day prior to mailing of such notice.
Section 3.3: Numbers, Denomination, Interest Rates and Maturities. The
Certificates shall be initially issued bearing the numbers, in the principal amounts and bearing
interest at the rates set forth in the following schedule, and may be transferred and exchanged as
set out in this Ordinance. The Certificates shall mature on March 15 in each of the years and in
the amounts set out in such schedule. Certificates delivered in transfer of or in exchange for
other Certificates shall be numbered in order of their authentication by the Paying
Agent/Registrar, shall be in the denomination of$5,000 or integral multiples thereof and shall
mature on the same date and bear interest at the same rate as the Certificate or Certificates in lieu
of which they are delivered.
Certificate Year of Principal Interest
Number Maturity Amount Rate
Section 3.4: Redemption Prior to Maturity.
(a) The Certificates maturing on and after March 15, 2028, are subject to redemption
prior to maturity, at the option of the City, in whole or in part, in inverse order of maturity, on
March 15, 2027, or any date thereafter, at par plus accrued interest to the date fixed for
redemption.
(b) Certificates may be redeemed in part only in integral multiples of $5,000. If a
Certificate subject to redemption is in a denomination larger than $5,000, a portion of such
Certificate may be redeemed, but only in integral multiples of$5,000. In selecting portions of
Certificates for redemption, each Certificate shall be treated as representing that number of
Certificates of$5,000 denomination which is obtained by dividing the principal amount of such
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Certificate by $5,000. Upon presentation and surrender of any Certificate for redemption in
part, the Paying Agent/Registrar, in accordance with the provisions of this Ordinance, shall
authenticate and deliver in exchange therefor a Certificate or Certificates of like maturity and
interest rate in an aggregate principal amount equal to the unredeemed portion of the Certificate
so surrendered.
(c) Notice of any redemption, identifying the Certificates or portions thereof to be
redeemed, shall be sent by United States mail, first class, postage prepaid, to the Registered
Owners thereof at their addresses as shown on the Register, not less than thirty (30) days before
the date fixed for such redemption. By the date fixed for redemption, due provision shall be
made with the Paying Agent/Registrar for the payment of the redemption price of the
Certificates called for redemption. If such notice of redemption is given, and if due provision
for such payment is made, all as provided above, the Certificates which are to be so redeemed
thereby automatically shall be redeemed prior to their scheduled maturities, they shall not bear
interest after the date fixed for redemption, and they shall not be regarded as being Outstanding
except for the purpose of being paid with the funds so provided for such payment.
Section 3.5: Manner of Payment, Characteristics, Execution and Authentication.
The Paying Agent/Registrar is hereby appointed the paying agent for the Certificates. The
Certificates shall be payable, shall have the characteristics and shall be executed, sealed,
registered and authenticated, all as provided and in the manner indicated in the FORM OF
CERTIFICATES set forth in Article IV of and Exhibit A to this Ordinance. If any officer of the
City whose manual or facsimile signature shall appear on the Certificates shall cease to be such
officer before the authentication of the Certificates or before the delivery of the Certificates, such
manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if such
officer had remained in such office.
The approving legal opinion of Andrews Kurth Kenyon LLP, Houston, Texas, Bond
Counsel, may be printed on the back of the Certificates over the certification of the City
Secretary, which may be executed in facsimile. CUSIP numbers also may be printed on the
Certificates, but errors or omissions in the printing of either the opinion or the numbers shall
have no effect on the validity of the Certificates.
Section 3.6: Authentication. Except for the Certificates to be initially issued, which
need not be authenticated by the Registrar, only such Certificates as shall bear thereon a
certificate of authentication, substantially in the form provided in Article IV of and Exhibit A to
this Ordinance, manually executed by an authorized representative of the Paying
Agent/Registrar, shall be entitled to the benefits of this Ordinance or shall be valid or obligatory
for any purpose. Such duly executed certificate of authentication shall be conclusive evidence
that the Certificate so authenticated was delivered by the Paying Agent/Registrar hereunder.
Section 3.7: Ownership. The City, the Paying Agent/Registrar and any other person
may treat the person in whose name any Certificate is registered as the absolute owner of such
Certificate for the purpose of making and receiving payment of the principal thereof and interest
thereon and for all other purposes, whether or not such Certificate is overdue, and neither the
City nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary.
All payments made to the person deemed to be the Registered Owner of any Certificate in
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accordance with this Section shall be valid and effective and shall discharge the liability of the
City and the Paying Agent/Registrar upon such Certificate to the extent of the sums paid.
Section 3.8: Registration, Transfer and Exchange. The Paying Agent/Registrar is
hereby appointed the registrar for the Certificates. So long as any Certificate remains
Outstanding, the Paying Agent/Registrar shall keep the Register at its office in Houston, Texas,
in which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar
shall provide for the registration and transfer of the Certificates in accordance with the terms of
this Ordinance.
Each Certificate shall be transferable only upon the presentation and surrender thereof at
the principal corporate trust office of the Paying Agent/Registrar, accompanied by an assignment
duly executed by the Registered Owner or his authorized representative in form satisfactory to
the Paying Agent/Registrar. Upon due presentation of any Certificate for transfer, the Paying
Agent/Registrar shall authenticate and deliver in exchange therefor, within seventy-two (72)
hours after such presentation, a new Certificate or Certificates, registered in the name of the
transferee or transferees, in authorized denominations and of the same maturity and aggregate
principal amount and bearing interest at the same rate as the Certificate or Certificates so
presented and surrendered.
All Certificates shall be exchangeable upon the presentation and surrender thereof at the
principal corporate trust office of the Paying Agent/Registrar for a Certificate or Certificates of
the same maturity and interest rate and in any authorized denomination, in an aggregate principal
amount equal to the unpaid principal amount of the Certificate or Certificates presented for
exchange. The Paying Agent/Registrar shall be and is hereby authorized to authenticate and
deliver exchange Certificates in accordance with the provisions of this Section. Each Certificate
delivered by the Paying Agent/Registrar in accordance with this Section shall be entitled to the
benefits and security of this Ordinance to the same extent as the Certificate or Certificates in lieu
of which such Certificate is delivered.
All Certificates issued in transfer or exchange shall be delivered to the Registered
Owners thereof at the principal corporate trust office of the Paying Agent/Registrar or sent by
United States mail, first class,postage prepaid.
The City or the Paying Agent/Registrar may require the Registered Owner of any
Certificate to pay a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with the transfer or exchange of such Certificate. Any fee or charge of
the Paying Agent/Registrar for such transfer or exchange shall be paid by the City.
The Paying Agent/Registrar shall not be required to transfer or exchange any Certificate
called for redemption in whole or in part during the forty-five (45) day period immediately prior
to the date fixed for redemption; provided, however, that this restriction shall not apply to the
transfer or exchange by the Registered Owner of the unredeemed portion of a Certificate called
for redemption in part.
Section 3.9: Book-Entry Only System. (a) The definitive Certificates shall be
initially issued in the form of a separate single fully registered Certificate for each of the
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maturities thereof. Upon initial issuance, the ownership of each such Certificate shall be
registered in the name of Cede & Co., as nominee of DTC, and except as provided in subsection
(b) hereof, all of the Outstanding Certificates shall be registered in the name of Cede & Co., as
nominee of DTC. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the
effect that DTC has deretermined to substitute a new nominee in place of Cede & Co., and
subject to the provisions in this Ordinance with respect to interest checks being mailed to the
Registered Owner at the close of business on the Record Date, the word "Cede & Co." in this
Ordinance shall refer to such new nominee of DTC.
With respect to Certificates registered in the name of Cede & Co., as nominee of DTC,
the City and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC
Participant or to any person on behalf of whom such a DTC Participant holds an interest in the
Certificates. Without limiting the immediately preceding sentence, the City and the Paying
Agent/Registrar shall have no responsibility or obligation with respect to (a) the accuracy of the
records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in
the Certificates, (b) the delivery to any DTC Participant or any other person, other than a holder
of the Certificate, as shown on the Register, of any notice with respect to the Certificates,
including any notice of redemption or (c) the payment to any DTC Participant or any other
person, other than a holder of the Certificate, as shown in the Register of any amount with
respect to principal of Certificates,premium, if any, or interest on the Certificates.
Except as provided in subsection (c) of this Section 3.9, the City and the Paying
Agent/Registrar shall be entitled to treat and consider the person in whose name each Certificate
is registered in the Register as the absolute owner of such Certificate for the purpose of payment
of principal of, premium, if any, and interest on Certificates, for the purpose of giving notices of
redemption and other matters with respect to such Certificate, for the purpose of registering
transfer with respect to such Certificate, and for all other purposes whatsoever. The Paying
Agent/Registrar shall pay all principal of Certificates, premium, if any, and interest on the
Certificates only to or upon the order of the respective owners, as shown in the Register as
provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such
payments shall be valid and effective to fully satisfy and discharge the City's obligations with
respect to payment of principal of, premium, if any, and interest on the Certificates to the extent
of the sum or sums so paid. No person other than an owner shall receive a Certificate evidencing
the obligation of the City to make payments of amounts due pursuant to this Ordinance.
(b) Payments and Notices to Cede & Co. Notwithstanding any other provision of this
Ordinance to the contrary, as long as any Certificates are registered in the name of Cede & Co.,
as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on
the Certificates, and all notices with respect to such Certificates shall be made and given,
respectively, in the manner provided in the representation letter of the City to DTC.
(c) Successor Securities Depository; Transfer Outside Book-Entry Only System. In
the event that the City or the Paying Agent/Registrar determines that DTC is incapable of
discharging its responsibilities described herein and in the representation letter of the City to
DTC, and that it is in the best interest of the beneficial owners of the Certificates that they be
able to obtain certified Certificates, the City or the Paying Agent/Registrar shall (a) appoint a
successor securities depository, qualified to act as such under Section 17(a) of the Securities and
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Exchange Act of 1934, as amended, notify DTC of the appointment of such successor securities
depository and transfer one or more separate Certificates to such successor securities depository
or (b) notify DTC of the availability through DTC of Certificates and transfer one or more
separate Certificates to DTC Participants having Certificates credited to their DTC accounts. In
such event, the Certificates shall no longer be restricted to being registered in the Register in the
name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor
securities depository, or its nominee, or in whatever name or names holders of the Certificates
transferring or exchanging Certificates shall designate, in accordance with the provisions of this
Ordinance.
Section 3.10: Replacement Certificates. Upon the presentation and surrender to the
Paying Agent/Registrar of a damaged or mutilated Certificate, the Paying Agent/Registrar shall
authenticate and deliver in exchange therefor a replacement Certificate, of the same maturity,
interest rate and principal amount, bearing a number not contemporaneously outstanding. The
City or the Paying Agent/Registrar may require the Registered Owner of such Certificate to pay
a sum sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith and any other expenses connected therewith, including the fees and
expenses of the Paying Agent/Registrar and the City.
If any Certificate is lost, apparently destroyed or wrongfully taken, the City, pursuant to
the applicable laws of the State of Texas and ordinances of the City, and in the absence of notice
or knowledge that such Certificate has been acquired by a bona fide purchaser, shall execute, and
the Paying Agent/Registrar shall authenticate and deliver, a replacement Certificate of the same
maturity, interest rate and principal amount, bearing a number not contemporaneously
outstanding,provided that the Registered Owner thereof shall have:
(a) furnished to the City and the Paying Agent/Registrar satisfactory evidence of the
ownership of and the circumstances of the loss, destruction or theft of such Certificate;
(b) furnished such security or indemnity as may be required by the Paying
Agent/Registrar and the City to save and hold them harmless;
(c) paid 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 may be imposed; and
(d) met any other reasonable requirements of the City and the Paying Agent/Registrar.
If, after the delivery of such replacement Certificate, a bona fide purchaser of the original
Certificate in lieu of which such replacement Certificate was issued presents for payment such
original Certificate, the City and the Paying Agent/Registrar shall be entitled to recover such
replacement Certificate from the person to whom it was delivered or any person taking
therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the
City or the Paying Agent/Registrar in connection therewith.
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If any such mutilated, lost, apparently destroyed or wrongfully taken Certificate has
become or is about to become due and payable, the City in its discretion may, instead of issuing a
replacement Certificate, authorize the Paying Agent/Registrar to pay such Certificate.
Each replacement Certificate delivered in accordance with this Section shall be entitled to
the benefits and security of this Ordinance to the same extent as the Certificate or Certificates in
lieu of which such replacement Certificate is delivered.
Section 3.11: Cancellation. All Certificates paid or redeemed in accordance with this
Ordinance, and all Certificates in lieu of which exchange Certificates or replacement Certificates
are authenticated and delivered in accordance herewith, shall be canceled and destroyed upon the
making of proper records regarding such payment or redemption. The Paying Agent/Registrar
shall periodically furnish the City with certificates of destruction of such Certificates.
ARTICLE IV
FORM OF CERTIFICATES
Section 4.1: Form of Certificates. The Certificates, including the Form of
Comptroller's Registration Certificate, Form of Paying Agent/Registrar Authentication
Certificate, Form of Assignment and Form of Statement of Insurance, if any, shall be in
substantially the form set forth in Exhibit A hereto, with such omissions, insertions and
variations as may be necessary or desirable, and not prohibited by this Ordinance.
ARTICLE V
SECURITY FOR THE CERTIFICATES
Section 5.1: Pledge and Levy of Taxes and Revenues. (a) To provide for the
payment of principal of and interest on the Certificates, there is hereby levied, within the limits
prescribed by law, for the current year and each succeeding year thereafter, while the Certificates
or any part of the principal thereof and the interest thereon remain outstanding and unpaid, an ad
valorem tax upon all taxable property within the City sufficient to pay the interest on the
Certificates and to create and provide a sinking fund of not less than 2% of the principal amount
of the Certificates or not less than the principal payable out of such tax, whichever is greater,
with full allowance being made for tax delinquencies and the costs of tax collection, and such
taxes, when collected, shall be applied to the payment of principal of and interest on the
Certificates by deposit to the Debt Service Fund(as hereinafter defined) and to no other purpose.
(b) The City hereby declares its purpose and intent to provide and levy a tax legally
sufficient to pay the principal of and interest on the Certificates, it having been determined that
the existing and available taxing authority of the City for such purpose is adequate to permit a
legally sufficient tax. There is hereby appropriated, from current funds on hand and legally
available therefor, funds sufficient to pay the debt service coming due on the Certificates prior
to receipt of taxes levied therefor.
(c) In addition, pursuant to the authority of Chapter 1502, Texas Government Code, the
City also hereby pledges the surplus revenues to be derived from the City's waterworks and
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sewer system that remain after the payment of all operation and maintenance expenses thereof,
and all debt service, reserve and other requirements in connection with the City's revenue
obligations (now or hereafter outstanding) that are secured by a lien on all or party of the net
revenues of the System (the "Surplus Revenues") to the payment of the principal of and interest
on the Certificates. The City shall such Surplus Revenues to the credit of the Debt Service Fund
created pursuant to Section 5.2 hereof to the extent necessary to pay the principal of and
interest on the Certificates. If Surplus Revenues are used in lieu of ad valorem taxes for the
payment of the debt service requirements of System debt, the City shall maintain and collect
sufficient rates and charges to produce System revenues in any amount necessary to meet the
debt service requirements of all outstanding obligations payable from System revenues. The
City further agrees to maintain the funds established by and required by the Certificates.
(d) If Net Revenues are actually on deposit in the Debt Service Fund prior to the annual
tax levy, the City shall reduce the amount of the tax levy by the amount of Net Revenues on
deposit in the Debt Service Fund on such date. However, if the determination of Net Revenues
to be deposited in the Debt Service Fund is based on budgeted amounts, (i) the City shall
transfer and deposit in the Debt Service Fund each month an amount not less than 1112th of the
annual debt service on the Certificates until the amount on deposit in the Debt Service Fund
equals the amount required for annual debt service on the Certificates; (ii) the City shall not
transfer any pledged Net Revenues to any fund other than the Debt Service Funds until such
time as an amount equal to the annual debt service on the Certificate for the then current fiscal
year has been deposited in the Debt Service Fund; (iii) each year that the Certificates are
outstanding, and prior to the time taxes are to be levied for such year, the City shall establish,
adopt, and maintain an annual budget that provides for either the monthly deposit of sufficient
Net Revenues, ad valorem tax revenues or other legally available funds, or a combination
thereof, into the Debt Service Fund for the repayment of the Certificates; and (iv) the City will
either maintain and collect sufficient rates and charges to produce revenues in an amount not
less than 1.10 times debt service requirements for all outstanding obligations of the City secured
by Net Revenues, or shall provide documentation evidencing the levy and collection of an ad
valorem tax rate sufficient to provide for the payment of annual debt service requirements.
Section 5.2: Debt Service Fund. The "Certificates of Obligation, Series 2017, Debt
Service Fund"(the"Debt Service Fund") is hereby created as a special fund solely for the benefit
of the Certificates. The City shall establish and maintain such fund at an official City depository
and shall keep such fund separate and apart from all other funds and accounts of the City. Any
amount on deposit in the Debt Service Fund shall be maintained by the City in trust for the
Registered Owners of the Certificates. Such amount, plus any other amounts deposited by the
City into such fund and any and all investment earnings on amounts on deposit in such fund,
shall be used only to pay the principal of, premium, if any, and interest on the Certificates.
Section 5.3: Further Proceedings. After the Certificates to be initially issued have
been executed, it shall be the duty of the Mayor to deliver the Certificates to be initially issued
and all pertinent records and proceedings to the Attorney General for examination and approval.
After the Certificates to be initially issued shall have been approved by the Attorney General,
they shall be delivered to the Comptroller for registration. Upon registration of the Certificates
to be initially issued, the Comptroller (or a deputy lawfully designated in writing to act for the
Comptroller) shall manually sign the Comptroller's registration certificate prescribed herein to
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be affixed or attached to the Certificates to be initially issued, and the seal of said Comptroller
shall be impressed, or placed in facsimile,thereon.
ARTICLE VI
CONCERNING THE PAYING AGENT/R.EGISTRAR
Section 6.1: Acceptance. Amegy Bank, a division of ZB, National Association is
hereby appointed as the initial Paying Agent/Registrar for the Certificates pursuant to the terms
and provisions of the Paying Agent/Registrar Agreement by and between the City and the Paying
Agent/Registrar in substantially the form presented at the meeting at which this Ordinance was
approved. The Mayor is hereby authorized to execute and deliver such Paying Agent/Registrar
Agreement on behalf of the City in multiple counterparts and the City Secretary is hereby
authorized to attest thereto and affix the City's seal. Such initial Paying Agent/Registrar and any
successor Paying Agent/Registrar, by undertaking the performance of the duties of the Paying
Agent/Registrar hereunder, and in consideration of the payment of any fees pursuant to the terms
of any contract between the Paying Agent/Registrar and the City and/or the deposits of money
pursuant to this Ordinance, shall be deemed to accept and agree to abide by the terms of this
Ordinance.
Section 6.2: Trust Funds. All money transferred to the Paying Agent/Registrar in its
capacity as Paying Agent/Registrar for the Certificates under this Ordinance (except any sums
representing Paying Agent/Registrar's fees) shall be held in trust for the benefit of the City, shall
be the property of the City and shall be disbursed in accordance with this Ordinance.
Section 6.3: Certificates Presented. Subject to the provisions of Section 6.4, all
matured Certificates presented to the Paying Agent/Registrar for payment shall be paid without
the necessity of further instructions from the City. Such Certificates shall be canceled as
provided herein.
Section 6.4: Unclaimed Funds Held by the Paying Agent/Registrar. Funds held by
the Paying Agent/Registrar that represent principal of and interest on the Certificates remaining
unclaimed by the Registered Owner thereof after the expiration of three years from the date such
funds have become due and payable (a) shall be reported and disposed of by the Paying
Agent/Registrar in accordance with the provisions of Title 6 of the Texas Property Code, as
amended, to the extent such provisions are applicable to such funds, or (b) to the extent such
provisions do not apply to the funds, such funds shall be paid by the Paying Agent/Registrar to
the City upon receipt by the Paying Agent/Registrar of a written request therefor from the City.
The Paying Agent/Registrar shall have no liability to the Registered Owners of the
Certificates by virtue of actions taken in compliance with this Section.
Section 6.5: Paying Agent/Registrar May Own Certificates. The Paying
Agent/Registrar in its individual or any other capacity, may become the owner or pledgee of
Certificates with the same rights it would have if it were not the Paying Agent/Registrar.
Section 6.6: Successor Paying Agents/Registrars. The City covenants that at all
times while any Certificates are Outstanding it will provide a legally qualified bank, trust
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company, financial institution or other agency to act as Paying Agent/Registrar for the
Certificates. The City reserves the right to change the Paying Agent/Registrar for the
Certificates on not less than sixty(60) days' written notice to the Paying Agent/Registrar, as long
as any such notice is effective not less than 60 days prior to the next succeeding principal or
interest payment date on the Certificates. Promptly upon the appointment of any successor
Paying Agent/Registrar, the previous Paying Agent/Registrar shall deliver the Register or a copy
thereof to the new Paying Agent/Registrar, and the new Paying Agent/Registrar shall notify each
Registered Owner, by United States mail, first class, postage prepaid, of such change and of the
address of the new Paying Agent/Registrar. Each Paying Agent/Registrar hereunder, by acting
in that capacity, shall be deemed to have agreed to the provisions of this Ordinance.
ARTICLE VII
PROVISIONS CONCERNING SALE AND
APPLICATION OF PROCEEDS OF CERTIFICATES
Section 7.1: Sale of Certificates. The sale of the Certificates to the Purchaser at a
price of par pursuant to a loan commitment received from the Purchaser is hereby approved. The
City shall pay a 1.85% origination fee to the Purchaser. It is hereby found, determined and
declared that the price and terms of the Certificates are the most advantageous reasonably
obtainable by the City. The Mayor and all other officers, agents and representatives of the City
are hereby authorized to do any and all things necessary to provide for the issuance and delivery
of the Certificates.
Section 7.2: Approval, Registration and Delivery. The Mayor is hereby authorized
to have control and custody of the Certificates and all necessary records and proceedings
pertaining thereto pending their delivery, and the Mayor and other officers and employees of the
City are hereby authorized and directed to make such certifications and to execute such
instruments as may be necessary to accomplish the delivery of the Certificates and to assure the
investigation, examination and approval thereof by the Attorney General and the registration of
the initial Certificates by the Comptroller. Upon registration of the Certificates, the Comptroller
(or the Comptroller's certificates clerk or an assistant certificates clerk lawfully designated in
writing to act for the Comptroller) shall manually sign the Comptroller's Registration
Certificates prescribed herein to be attached or affixed to each Certificates initially delivered and
the seal of the Comptroller shall be impressed or printed or lithographed thereon.
Section 7.3: Private Placement Memorandum. The City Council hereby approves
the form and content of the Private Placement Memorandum prepared in connection with the sale
of the Certificates, and approves the delivery of the Private Placement Memorandum to the
Purchaser, with such changes therein or additions thereto as the officials executing the same may
deem advisable, such determination to be conclusively evidenced by their execution thereof.
Section 7.4: Deposit of Proceeds; Escrow Agreement. Immediately following the
delivery of the Certificates and prior to the deposit of the proceeds from the sale of such
Certificates in the Construction Fund referenced in Section 9.2 of this Ordinance, such proceeds
shall be held in trust and in escrow pursuant to the written escrow agreement described below
pending written authorization to release said proceeds.
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A "Special Escrow Deposit Agreement" by and between the City and Amegy Bank, a
division of ZB, National Association, Houston, Texas, attached hereto as Exhibit B and
incorporated herein by reference as a part of this Resolution for all purposes, is hereby approved
as to form and content, and the Mayor and City Secretary are hereby authorized and directed to
execute such Agreement in substantially the same form and content herein approved.
Section 7.5: Covenants to Maintain Tax Exemption.
(a) Definitions. When used in this Section, the following terms have the following
meanings:
"Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any,
enacted on or before the Issue Date.
"Computation Date"has the meaning stated in section 1.148 1(b) of the Regulations.
"Gross Proceeds"has the meaning stated in section 1.148 1(b)of the Regulations.
"Investment"has the meaning stated in section 1.148 1(b)of the Regulations.
"Issue Date" for the Certificates or other obligations of the City is the respective date on
which such Certificates or other obligations of the City, is delivered against payment therefor.
"Net Sale Proceeds"has the meaning stated in section 1.148 1(b)of the Regulations.
"Nonpurpose Investment" has the meaning stated in section 1.148 1(b) of the
Regulations.
"Proceeds"has the meaning stated in section 1.148-1(b)of the Regulations.
"Rebate Amount"has the meaning stated in section 1.148-3 of the Regulations.
"Regulations" means the temporary or final Income Tax Regulations applicable to the
Certificates issued pursuant to sections 141 through 150 of the Code. Any reference to a section
of the Regulations shall also refer to any successor provision to such section hereafter
promulgated by the Internal Revenue Service pursuant to sections 141 through 150 of the Code
and applicable to the Certificates.
"Yield of'
(1) any Investment shall be computed in accordance with section 1.148-5 of
the Regulations, and
(2) the Certificates shall be computed in accordance with section 1.148-4 of
the Regulations.
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(b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use
of or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross
Proceeds) in a manner which, if made or omitted, respectively, would cause the interest on any
Certificates to become includable in the gross income, as defined in section 61 of the Code, of
the owner for federal income tax purposes. Unless and until the City has received a written
opinion of counsel nationally recognized in the field of municipal bond law to the effect that
failure to comply with such covenant will not adversely affect the exemption from federal
income tax of the interest on any Certificate, the City shall comply with the specific covenants in
this Section.
(c) No Private Use or Private Payments. Except as permitted by section 141 of the
Code and the regulations and rulings relating to section 141 of the Code, the City shall, at all
times prior to the last stated maturity of the Certificates,
(1) exclusively own, operate, and possess all property the acquisition,
construction, or improvement of which is to be financed directly or indirectly with Gross
Proceeds of the Certificates and not use or permit the use of such Gross Proceeds or any
property acquired, constructed, or improved with such Gross Proceeds in any activity
carried on by any person or entity other than a state or local government, unless such use
is solely as a member of the general public, or
(2) not directly or indirectly impose or accept any charge or other payment for
use of Gross Proceeds of the Certificates or any property the acquisition, construction or
improvement of which is to be financed directly or indirectly with such Gross Proceeds
other than taxes of general application and interest earned on investments acquired with
such Gross Proceeds pending application for their intended purposes.
(d) No Private Loan. Except to the extent permitted by section 141 of the Code and
the regulations and rulings relating to section 141 of the Code, the City shall not use Gross
Proceeds of the Certificates to make or finance loans to any person or entity other than a state or
local government. For purposes of the foregoing covenant, Gross Proceeds are considered to be
"loaned" to a person or entity if (1) property acquired, constructed or improved with Gross
Proceeds is sold or leased to such person or entity in a transaction which creates a debt for
federal income tax purposes, (2) capacity in or service from such property is committed to such
person or entity under a take or pay, output, or similar contract or arrangement, or (3) indirect
benefits, or burdens and benefits of ownership, of such Gross Proceeds or such property are
otherwise transferred in a transaction which is the economic equivalent of a loan.
(e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of
the Code and the regulations and rulings relating to section 148 of the Code, the City shall not, at
any time prior to the earlier of the final stated maturity or final payment of the Certificates,
directly or indirectly invest Gross Proceeds of such Certificates in any Investment (or use such
Gross Proceeds to replace money so invested), if as a result of such investment the Yield of all
Investments allocated to such Gross Proceeds whether then held or previously disposed of,
exceeds the Yield on the Certificates.
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(f) Not Federally Guaranteed. Except to the extent permitted by section 149(b)of the
Code and the regulations and rulings relating to section 149(b) of the Code, the City shall not
take or omit to take any action which would cause the Certificates to be federally guaranteed
within the meaning of section 149(b) of the Code and the regulations and rulings relating to
section 149(b)of the Code.
(g) Information Report. The City shall timely file with the Secretary of the Treasury
the information required by section 149(e) of the Code with respect to the Certificates on such
forms and in such place as such Secretary may prescribe.
(h) Payment of Rebate Amount. Except to the extent otherwise provided in section
148(f)of the Code and the regulations and rulings relating to section 148(f) of the Code, the City
shall:
(1) account for all Gross Proceeds (including all receipts, expenditures and
investments thereof) on its books of account separately and apart from all other funds
(and receipts, expenditures and investments thereof) and shall retain all records of such
accounting for at least six years after the fmal Computation Date. The City may,
however, to the extent permitted by law, commingle Gross Proceeds of the Certificates
with other money of the City, provided that the City separately accounts for each receipt
and expenditure of such Gross Proceeds and the Certificates acquired with these
proceeds.
(2) calculate the Rebate Amount with respect to the Certificates, not less
frequently than each Computation Date, in accordance with rules set forth in section
148(f) of the Code, section 1.148 3 of the Regulations, and the rulings thereunder. The
City shall maintain a copy of such calculations for at least six years after the final
Computation Date.
(3) as additional consideration for the purchase of the Certificates by the
initial purchaser and the loan of the money represented by this purchase, and in order to
induce such purchase by measures designed to ensure the excludability of the interest
from the gross income of the owners for federal income tax purposes, pay to the United
States the amount described in paragraph(2) above at the times, in the installments,to the
place, in the manner and accompanied by such forms or other information as is or may be
required by section 148(f) of the Code and the regulations and rulings relating to section
148(f)of the Code, and
(4) exercise reasonable diligence to assure that no errors are made in the
calculations required by paragraph (2) and, if such error is made, to discover and
promptly to correct such error within a reasonable amount of time, including payment to
the United States of any interest and any penalty required by the Regulations.
(i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of
the Code and the regulations and rulings relating to section 148 of the Code,the City shall not, at
any time prior to the earlier of the final stated maturity or final payment of the Certificates, enter
into any transaction that reduces the amount required to be paid to the United States pursuant to
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Subsection (h) of this Section because such transaction results in a smaller profit or a larger loss
than would have resulted if the transaction had been at arm's length and had the Yield of the
Certificates not been relevant to either party.
(j) Not Hedge Bonds. The City will not invest more than 50 percent of the Proceeds
of the Certificates in Nonpurpose Investments having a guaranteed yield for four years or more.
On the Closing Date, the City will reasonably expect that at least 85 percent of the Net Sale
Proceeds of the Certificates will be used to carry out the governmental purpose of such series
within three years after the Closing Date.
Section 7.6: Related Matters. In order that the City shall satisfy in a timely manner
all of its obligations under this Ordinance,the Mayor,the Mayor Pro-Tem, City Secretary and all
other appropriate officers, agents, representatives and employees of the City are hereby
authorized and directed to take all other actions that are reasonably necessary to provide for the
issuance and delivery of the Certificates, including, without limitation, executing and delivering
on behalf of the City all certificates, consents, receipts, requests, notices, and other documents as
may be reasonably necessary to satisfy the City's obligations under this Ordinance and to direct
the transfer and application of funds of the City consistent with the provisions of this Ordinance.
ARTICLE VIII
CONTINUING DISCLOSURE UNDERTAKING
Section 8.1: Annual Reports. The City shall provide annually to the MSRB the
audited financial statements of the City. Any financial statements so to be provided shall be (1)
prepared in accordance with the generally accepted accounting principles as applicable to
government units prescribed by the Government Accounting Standards Board and (2) 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 12 months after any such fiscal year end, then the City shall file unaudited financial
statements within such 12-month period and audited financial statements for the applicable fiscal
year, when and if the audit report on such statements becomes available.
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.
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.
Section 8.2: Material Event Notices. The City shall notify the MSRB, in a timely
manner, of any of the following events with respect to the Certificates (not in excess of ten (10)
business days after the occurrence of the event):
(a) Principal and interest payment delinquencies;
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(b) Non-payment related defaults;
(c) Unscheduled draws on debt service reserves reflecting fmancial difficulties;
(d) Unscheduled draws on credit enhancements reflecting financial difficulties;
(e) Substitution of credit or liquidity providers, or their failure to perform;
(g) Adverse tax opinions or events affecting the tax-exempt status of the Certificates;
(h) Modifications to rights of holders of the Certificates;
(i) Certificate calls;
(j) Defeasances;
(k) Release, substitution, or sale of property securing repayment of the Certificates;
(1) Rating changes'
(m)bankruptcy, insolvency, receivership, or similar event of the City;
(n) 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 action, or the termination of a
definitive agreement relating to any such actions, other than pursuant to its terms, if material; and
(o)the appointment of a successor or additional trustee or change of name of the trustee,
if material.
For these purposes, any event described in the immediately preceding paragraph (n) 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 United States 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 authority having supervision or jurisdiction over substantially all of the assets or
business of the City.
The City shall notify the MSRB, in a timely manner, of any failure by the City to provide
financial information or operating data in accordance with Section 8.1 of this Ordinance by the
time required by such Section.
Section 8.3: Identifying Information. All documents shall be provided to the MSRB
in an electronic format and accompanied by identifying information, as prescribed by the
MSRB.
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Section 8.4: Limitations, Disclaimers and Amendments. The City shall be
obligated to observe and perform the covenants specified in this Article for so long as, but only
for so long as, the City remains an "obligated person" with respect to the Certificates within the
meaning of the Rule, except that the City in any event will give the notice required by Section
8.2 of any Certificate calls and defeasance that cause the City to be no longer such an"obligated
person."
The provisions of this Article are for the sole benefit of the holders and beneficial owners
of the Certificates, and nothing in this Article, express or implied, shall give any benefit or any
legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to
provide only the financial information, operating data, financial statements, and notices which it
has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide
any other information that may be relevant or material to a complete presentation of the City's
financial results, condition, or prospects or hereby undertake to update any information provided
in accordance with this Article or otherwise, except as expressly provided herein. The City does
not make any representation or warranty concerning such information or its usefulness to a
decision to invest in or sell Certificates at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER
OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN
CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM
ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR 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.
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 provision of this
Ordinance.
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.
The provisions of this Article may be amended by the City from time to time to adapt the
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 (1) the
provisions of this Article, as so amended, would have permitted an underwriter to purchase or
sell the Certificates in the primary offering of the Certificates in compliance with the Rule,
taking into account any amendments or interpretations of the Rule to the date of such
amendment, as well as such changed circumstances, and(2) either(a)the holders of a majority in
aggregate principal amount (or any greater amount required by any other provision of this
Ordinance that authorizes such an amendment) of the outstanding Certificates consent to such
amendment or (b) a person that is unaffiliated with the City (such as nationally recognized bond
counsel) determines that such amendment will not materially impair the interests of the holder
and beneficial owners of the Certificates. If the City so amends the provisions of this Article, it
shall include with any amended financial information or operating data next provided in
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accordance with Section 8.1 an explanation, in narrative form, of the reasons for the amendment
and of the impact of any change in the type of financial information or operating data so
provided. The City may also amend or repeal the provisions of this Article if the SEC amends or
repeals the applicable provisions of the Rule or a court of final jurisdiction enters judgment that
such provisions of the Rule are invalid, and the City also may amend the provisions of this
Article in its discretion in any other manner or circumstance, but in either case only if and to the
extent that the provisions of this sentence would not have prevented an underwriter from
lawfully purchasing or selling Certificates in the primary offering of the Certificates, giving
effect to (a) such provisions as so amended and (b) any amendments or interpretations of the
Rule.
Section 8.5: Definitions. As used in this Article, the following terms have the
meanings ascribed to such terms below:
"MSRB"means the Municipal Securities Rulemaking Board.
"Rule"means SEC Rule 15c2-12, as amended from time to time.
"SEC"means the United States Securities and Exchange Commission.
ARTICLE IX
SPECIAL PROVISIONS RELATING TO THE TEXAS
WATER DEVELOPMENT BOARD
Section 9.1: Compliance with the Texas Water Development Board's Rules and
Regulations. The City will comply with all of the requirements contained in the resolution or
resolutions adopted by the TWDB with respect to the issuance of the Certificates in the TWDB's
rules, regulations and relevant statutes.
Section 9.2: Construction Fund; Timely Use of Proceeds. The proceeds of the
Certificates shall be applied to establish at an official depository of the City a construction fund
(the "Construction Fund"), which shall be kept separate from all other accounts and funds of the
City. The City shall maintain project accounts in accordance with generally accepted accounting
principles (GAAP), including standards relating to the reporting of infrastructure assets. Monies
on deposit in the Construction Fund shall be applied in accordance with the applicable
requirements of the Texas Water Code and the rules and regulations of the TWDB. All funds
deposited to the credit of the Construction Fund will be used in a timely and expeditious manner,
as required by federal statute and EPA regulations, and the City will adhere to the project
schedule approved by the Executive Administrator.
Section 9.3: Records; Final Accountings. The City will keep and maintain full and
complete records and accounts pertaining to the construction of the projects financed with the
proceeds of sale of the Certificates, including the Construction Fund, in accordance with the
standards set forth by the Government Accounting Standard Board. Within 60 days of
completion, the City will submit to the TWDB a final accounting of the total costs of the projects
financed with the Certificates.
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Section 9.4: Annual Audit. So long as any Certificates are held by the TWDB, the
City will annually submit to the TWDB's Executive Administrator, within 180 days of the end of
the City's fiscal year, a copy of its annual audited financial statements prepared in accordance
with generally acceptable auditing standards by a certified public accountant.
Section 9.5: Investment of Proceeds. Proceeds from the sale of the Certificates shall
be held at a designated state depository institution or other properly chartered and authorized
institution in accordance with the Public Funds Investment Act, Government Code, Chapter
2256, and the Public Funds Collateral Act, Government Code, Chapter 2257.
Section 9.6: Surplus Proceeds. Any proceeds of the Certificates that are determined
to be remaining unused funds unspent after the original approved project described in Section 3.1
hereof is completed shall be used for enhancements to the original project that are explicitly
approved by the Executive Administrator. If no enhancements are authorized by the Executive
Administrator, the City shall submit a final accounting and disposition of any unused funds.
Proceeds of the Certificates determined to be surplus funds remaining after completion of the
projects described in Section 3.1 hereof and completion of a fmal accounting shall be used for
the following purposes as approved by the Executive Administrator of the TWDB: (1)to redeem,
in inverse annual order, the Certificates owned by the TWDB, (2) deposit into the Interest and
Sinking Fund for the payment of interest or principal on the Certificates owned by the TWDB, or
(3) deposit into a reserve fund.
Section 9.7: Insurance. The City will maintain insurance on the projects financed
with the proceeds of the Certificates in amounts adequate to protect the TWDB's interest.
Section 9.8: Water Conservation Program. The City has implemented or will
implement an approved water conservation program required by the TWDB for so long as the
Certificates are outstanding.
Section 9.9: TWDB Remedies. The TWDB may exercise all remedies available to it
in law or equity, and any provision of the Certificates that restricts or limits the TWDB's full
exercise of these remedies shall be of no force and effect.
Section 9.10: Environmental Determination. The City will comply with any special
conditions specified by the TWDB's environmental determination until all financial obligations
to the TWDB have been discharged.
Section 9.11: Environmental Indemnification. Proceeds of the Certificates shall not
be used by the City when sampling, testing, removing or disposing of contaminated soils and/or
media at the project site. The City shall indemnify, hold harmless and protect the TWDB from
any and all claims, causes of action or damages to the person or property of third parties arising
from the sampling, analysis, transport, storage, treatment and disposition of any contaminated
sewage sludge, contaminated sediments and/or contaminated media that may be generated by the
City, its contractors, consultants, agents, officials and employees as a result of activities relating
to the project,to the extent permitted by law.
Section 9.12: Compliance with Davis-Bacon. All laborers and mechanics employed
by contractors and subcontractors for projects be paid wages at rates not less than those
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prevailing on projects of a similar character in the City in accordance with the Davis-Bacon Act,
and the U.S. Department of Labor's implementing regulations and all project contracts shall
mandate compliance with the Davis-Bacon Act. All contracts and subcontracts for the
construction of the project carried out in whole or in part with proceeds of the Certificates shall
insert in full in any contract in excess of$2,000 the contracts clauses as provided by the TWDB.
Section 9.13: Federal Funding Accountability and Transparency Act. The City
shall provide the TWDB with all information required to be reported in accordance with the
Federal Funding Accountability and Transparency Act of 2006, Pub. L. 109-282. The City shall
obtain a Data Universal Numbering System Number and shall register with the System for
Award Management, and maintain such registration while the Certificates are outstanding.
Section 9.14: American Iron and Steel Requirement. The City will abide by all
applicable construction contract requirements related to the use of iron and steel products
produced in the United States, as required by the 2014 Federal Appropriations Act and related
State Revolving Fund Policy Guidelines.
Section 9.15: Additional Covenants Related to Tax-Exempt Status.
(a) The City will not use any portion of the proceeds of the Certificates in a manner that
would cause the Certificates to become "private activity bonds" within the meaning of Section
141 of the Code, and the Regulations.
(b) No portion of the proceeds of the Certificates will be used, directly or indirectly, in a
manner that would cause the Certificates to be "arbitrage bonds" within the meaning of Section
148(a) of the Code and Regulations, including to acquire or to replace funds which were used,
directly or indirectly to acquire Nonpurpose Investments (as defined in the Code and
Regulations) which produce a yield materially higher than the yield on the TWDB's bonds that
are issued to provide financing for the Certificates (the "Source Series Bonds"), other than
Nonpurpose Investments acquired with:
(1) proceeds of the TWDB's Source Series Bonds invested for a reasonable
temporary period of up to three (3) years after the issue date of the Source Series Bonds
until such proceeds are needed for the facilities to be financed;
(2) amounts invested in a bona fide debt service fund, within the meaning of
Section 1.148-1(b) of the Regulations; and
(3) amounts deposited in any reasonably required reserve or replacement fund
to the extent such amounts do not exceed the least of the maximum annual debt service
on the Certificates, 125% of the average annual debt service on the Certificates, or 10%
of the stated principal amount (or, in the case of a discount, the issue price) of the
Certificates.
(c) Neither the City nor a related party thereto will acquire any of the TWDB's Source
Series Bonds in an amount related to the amount of the Certificates.
•
21
HOU:3746876.1
ARTICLE X
MISCELLANEOUS
Section 10.1: Defeasance. The City may defease the provisions of this Ordinance and
discharge its obligations to the Registered Owners of any or all of the Certificates to pay the
principal of and interest thereon in any manner now or hereafter permitted by law, including by
depositing with the Paying Agent/Registrar, a trust company or commercial bank other than the
Paying Agent/Registrar, or with the Comptroller of Public Accounts of the State of Texas either:
(a) cash in an amount equal to the principal amount of such Certificates and
premium, if any, and interest thereon to the date of maturity or redemption; or
(b) pursuant to an escrow or trust agreement, cash and/or (i) direct noncallable
obligations of United States of America, including obligations that are unconditionally
guaranteed by the United States of America; (ii) 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 are rated as to investment quality by a
nationally recognized investment rating firm not less than "AAA" or its equivalent; or (iii)
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 are rated as to investment quality by a
nationally recognized investment rating firm not less than"AAA" or its equivalent, which, in the
case of(i), (ii) or (iii), may be in book-entry form, and the principal of and interest on which
will, when due or redeemable at the option of the holder, without further investment or
reinvestment of either the principal amount thereof or the interest earnings thereon, provide
money in an amount which, together with other moneys, if any, held in such escrow at the same
time and available for such purpose, shall be sufficient to provide for the timely payment of the
principal of and interest thereon to the date of maturity or earlier redemption;
provided, however, that if any of the Certificates are to be redeemed prior to their respective
dates of maturity, provision shall have been made for giving notice of redemption as provided in
this Ordinance. Upon such deposit, such Certificates shall no longer be regarded to be
Outstanding or unpaid. Any surplus amounts not required to accomplish such defeasance shall
be returned to the City.
Section 10.2: Ordinance a Contract - Amendments. This Ordinance shall constitute
a contract with the Registered Owners from time to time, be binding on the City, and shall not be
amended or repealed by the City so long as any Certificate remains Outstanding except as
permitted in this Section. The City may, without the consent of or notice to any Registered
Owners, from time to time and at any time, amend this Ordinance in any manner not detrimental
to the interests of the Registered Owners, including the curing of any ambiguity, inconsistency,
or formal defect or omission herein. In addition, the City may, with the consent of Registered
Owners who own in the aggregate 51% of the principal amount of the Certificates then
Outstanding, amend, add to, or rescind any of the provisions of this Ordinance; provided that,
without the consent of all Registered Owners of Outstanding Certificates, no such amendment,
addition, or rescission shall (i) extend the time or times of payment of the principal of and
interest on the Certificates, reduce the principal amount thereof, the redemption price, or the rate
22
HOU:3746876.1
of interest thereon, or in any other way modify the terms of payment of the principal of or
interest on the Certificates, (ii) give any preference to any Certificate over any other Certificate,
or (iii) reduce the aggregate principal amount of Certificates required to be held by Registered
Owners for consent to any such amendment, addition, or rescission.
Section 10.3: Legal Holidays. In any case where the date interest accrues and
becomes payable on the Certificates or principal of the Certificates matures or the date fixed for
redemption of any Certificates or a Record Date shall be in the City a Saturday, Sunday, legal
holiday or a day on which banking institutions are authorized by law to close, then payment of
interest or principal need not be made on such date, or the Record Date shall not occur on such
date,but payment may be made or the Record Date shall occur on the next succeeding day which
is not in the City a Saturday, Sunday, legal holiday or a day on which banking institutions are
authorized by law to close with the same force and effect as if(i) made on the date of maturity or
the date fixed for redemption and no interest shall accrue for the period from the date of maturity
or redemption to the date of actual payment or (ii) the Record Date had occurred on the fifteenth
calendar day of that month.
Section 10.4: Power to Revise Form of Documents. Notwithstanding any other
provision of this Ordinance, the Mayor is hereby authorized to make or approve such revisions,
additions, deletions, and variations to this Ordinance and in the form of the documents attached
hereto as exhibits as, in the judgment of the Mayor, and in the opinion of Bond Counsel to the
City, may be necessary or convenient to carry out or assist in carrying out the purposes of this
Ordinance, the Preliminary Official Statement, the final Official Statement, or as may be
required for approval of the Certificates by the Attorney General of Texas; provided, however,
that any changes to such documents resulting in substantive amendments to the terms and
conditions of the Certificates or such documents shall be subject to the prior approval of the City
Council.
Section 10.5: No Recourse Against City Officials. No recourse shall be had for the
payment of principal of or interest on any Certificates or for any claim based thereon or on this
Ordinance against any official of the City or any person executing any Certificates.
Section 10.6: Further Proceedings. The Mayor, Mayor Pro-Tern, City Secretary and
other appropriate officials of the City are hereby authorized and directed to do any and all things
necessary and/or convenient to carry out the terms of this Ordinance.
Section 10.7: Severability. If any Section, paragraph, clause or provision of this
Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or
unenforceability of such Section, paragraph, clause or provision shall not affect any of the
remaining provisions of this Ordinance.
Section 10.8: Open Meeting. It is hereby found, determined and declared that a
sufficient written notice of the date, hour,place and subject of the meeting of the City Council at
which this Ordinance was adopted was posted at a place convenient and readily accessible at all
times to the general public at City Hall for the time required by law preceding this meeting, as
required by the Open Meetings Law, Chapter 551, Texas Government Code, and that this
meeting has been open to the public as required by law at all times during which this Ordinance
23
HOU:3746876.I
and the subject matter thereof has been discussed, considered and formally acted upon. The City
Council further ratifies, approves and confirms such written notice and the contents and posting
thereof.
Section 10.9:Repealer. All orders, resolutions and ordinances, or parts thereof,
inconsistent herewith are hereby repealed to the extent of such inconsistency.
Section 10.10: Effective Date. This Ordinance shall be in force and effect from
and after its passage on the date shown below.
[Signature page follows.]
24
HOU:3746876.1
DULY PASSED AND APPROVED this the 23rd '. •f January, 2017.
)tot
gil
Mayo .
ATTEST:
a/XL&
0)dy-
City Secretary
V
APPROVED AS TO FORM AND CONTENT:
ity ttorney
S-1
HOU:3746876.1
EXHIBIT A
FORM OF CERTIFICATE
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF LA PORTE, TEXAS,
CERTIFICATE OF OBLIGATION
SERIES 2017
NUMBER DENOMINATION
R-1 $
REGISTERED REGISTERED
INTEREST RATE2: ISSUANCE DATE: MATURITY DATE2: CUSIP2:
October 20, 2017 March 15,
DATED DATE: February 1, 2017
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
THE CITY OF LA PORTE, TEXAS, a municipal corporation of the State of Texas (the
"City"), for value received, hereby promises to pay to the Registered Owner identified above or
its registered assigns, on the Maturity Date specified above (or on earlier redemption as herein
provided), upon presentation and surrender of this Certificate at the principal corporate trust
office of Amegy Bank, a division of ZB, National Association, or its successor (the "Paying
Agent/Registrar"), the principal amount identified above (or so much thereof as shall not have
been paid or deemed to have been paid upon prior redemption) payable in any coin or currency
of the United States of America which on the date of payment of such principal is legal tender
for the payment of debts due to the United States of America, and to pay interest thereon at the
rate shown above, calculated on a basis of a 360-day year composed of twelve 30-day months,
from the later of the Issuance Date identified above or the most recent interest payment date to
which interest has been paid or duly provided for.3 Interest on this Certificate is payable on
Initial Certificate shall be numbered T-1.
2 Omitted from initial Certificate.
3 The first sentence of the initial Certificate shall read as follows:
THE CITY OF LA PORTE,TEXAS,a municipal corporation of the State of Texas(the"City"), for value received,
hereby promises to pay to the Registered Owner identified above or its registered assigns, on March 15 of each of
the years and in the principal amounts set forth in the following schedule: [Insert information regarding years of
maturity,principal amounts and interest rates from Section 3.3 of the Ordinance.](or on earlier redemption as herein
provided),upon presentation and surrender of this Certificate at the principal corporate trust office of Amegy Bank,
a division of ZB, National Association, or its successor (the "Paying Agent/Registrar"), the principal amounts
identified above (or so much thereof as shall not have been paid or deemed to have been paid upon prior
redemption)payable in any coin or currency of the United States of America which on the date of payment of such
A-1
HOU:3746876.1
September 15, 2017, and each March 15 and September 15 thereafter until maturity or earlier
redemption of this Certificate, by check sent by United States mail, first class, postage prepaid,
by the Paying Agent/Registrar to the Registered Owner of record as of the close of business on
the fifteenth calendar day of the month immediately preceding the applicable interest payment
date, as shown on the registration books kept by the Paying Agent/Registrar. Any accrued
interest payable at maturity or earlier redemption shall be paid upon presentation and surrender
of this Certificate at the principal corporate trust office of the Paying Agent/Registrar.
Notwithstanding the foregoing, while the Certificates are held by the Texas Water Development
Board (the "TWDB"), payment of principal of and interest on the Certificates shall be made by
federal funds wire transfer, at no cost to the Purchaser, to an account at a financial institution
located in the United States designated by the Purchaser.
THIS CERTIFICATE IS ONE OF A DULY AUTHORIZED SERIES OF
CERTIFICATES (the "Certificates") in the aggregate principal amount of $10,635,000 issued
pursuant to an ordinance adopted by the City Council of the City on January 23, 2017 (the
"Ordinance"), for the purpose of providing all or part of the funds to pay contractual obligations
to be incurred for the construction of public works and the purchase of materials, supplies,
equipment, machinery, buildings, land and rights-of-way for authorized needs and purposes and
for the payment of contractual obligations for professional services, to wit (i) improvements and
extensions to the City's water and sewer system, (ii) street improvements, (iii) drainage
improvements, and (iv) professional services rendered in connection with the above listed
projects.
THE CITY RESERVES THE RIGHT, at its option, to redeem, prior to their maturity,
Certificates maturing on or after March 15, 2028, in whole or in part, in inverse order of
maturity, on March 15, 2027, or any date thereafter, at par plus accrued interest to the date fixed
for redemption.
THE CERTIFICATES MAY BE REDEEMED IN PART only in integral multiples of
$5,000. If a Certificate subject to redemption is in a denomination larger than $5,000, a portion
of such Certificate may be redeemed, but only in integral multiples of $5,000. In selecting
portions of Certificates for redemption, each Certificate shall be treated as representing that
number of Certificates of $5,000 denomination which is obtained by dividing the principal
amount of such Certificate by $5,000. Upon surrender of any Certificate for redemption in part,
the Paying Agent/Registrar, in accordance with the provisions of the Ordinance, shall
authenticate and deliver in exchange therefor a Certificate or Certificates of like maturity and
interest rate in an aggregate principal amount equal to the unredeemed portion of the Certificate
so surrendered.
NOTICE OF ANY SUCH REDEMPTION, identifying the Certificates or portions
thereof to be redeemed, shall be sent by United States mail, first class, postage prepaid, to the
Registered Owners thereof at their addresses as shown on the books of registration kept by the
Paying Agent/Registrar, not less than thirty (30) days before the date fixed for such redemption.
By the date fixed for redemption, due provision shall be made with the Paying Agent/Registrar
principal is legal tender for the payment of debts due to the United States of America, and to pay interest thereon at
the rate shown above,calculated on a basis of a 360-day year composed of twelve 30-day months, from the later of
the Issuance Date identified above or the most recent interest payment date to which interest has been paid or duly
provided for.
A-2
HOU:3746876.1
for the payment of the redemption price of the Certificates called for redemption. If such notice
of redemption is given, and if due provision for such payment is made, all as provided above,the
Certificates which are to be so redeemed thereby automatically shall be redeemed prior to their
scheduled maturities, they shall not bear interest after the date fixed for redemption, and they
shall not be regarded as being outstanding except for the purpose of being paid with the funds so
provided for such payment.
THIS CERTIFICATE IS TRANSFERABLE only upon presentation and surrender at the
principal corporate trust office of the Paying Agent/Registrar, accompanied by an assignment
duly executed by the Registered Owner or its authorized representative, subject to the terms and
conditions of the Ordinance.
THIS CERTIFICATE IS EXCHANGEABLE at the principal corporate trust office of the
Paying Agent/Registrar for a Certificate or Certificates of the same maturity and interest rate and
in the principal amount of $5,000 or any integral multiple thereof, subject to the terms and
conditions of the Ordinance.
THE PAYING AGENT/REGISTRAR is not required to accept for transfer or exchange
any Certificate called for redemption, in whole or in part, during the forty-five (45) day period
immediately prior to the date fixed for redemption; provided, however, that such limitation shall
not apply to the transfer or exchange by the Registered Owner of an unredeemed portion of a
Certificate called for redemption in part.
THE CITY OR PAYING AGENT/REGISTRAR may require the Registered Owner of
any Certificate to pay a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with the transfer or exchange of a Certificate. Any fee or charge of the
Paying Agent/Registrar for a transfer or exchange shall be paid by the City.
THE REGISTERED OWNER of this Certificate by acceptance hereof, acknowledges
and agrees to be bound by all the terms and conditions of the Ordinance.
IT IS HEREBY DECLARED AND REPRESENTED that this Certificate has been duly
and validly issued and delivered; that all acts, conditions and things required or proper to be
performed, exist and to be done precedent to or in the issuance and delivery of this Certificate
have been performed, exist and have been done in accordance with law; that the Certificates do
not exceed any constitutional or statutory limitation; and that annual ad valorem taxes sufficient
to provide for the payment of the interest on and principal of this Certificate, as such interest
comes due and such principal matures, have been levied and ordered to be levied, within the
limits prescribed by law, against all taxable property in the City and have been irrevocably
pledged for such payment, and that this Certificate is additionally secured by and payable from a
pledge of the Surplus Revenues of the City's waterworks and sewer system remaining after
payment of all operation and maintenance expenses thereof and all debt service, reserve, and
other requirements in connection with the City's revenue obligations (now or hereafter
outstanding)that are payable from all or a part of said revenues,all as provided in the Ordinance.
REFERENCE IS HEREBY MADE TO THE ORDINANCE, a copy of which is filed
with the Paying Agent/Registrar, for the full provisions thereof, to all of which the Registered
Owners of the Certificates assent by acceptance of the Certificates.
A-3
HOU:3746876.1
THIS CERTIFICATE shall not be valid or obligatory for any purpose or be entitled to
any benefit under the Ordinance unless this Certificate is authenticated by the Paying
Agent/Registrar by due execution of the authentication certificate endorsed hereon.4
IN WITNESS WHEREOF, the City has caused its corporate seal to be impressed or
placed in facsimile hereon and this Certificate to be signed by the Mayor, countersigned by the
City Secretary by their manual, lithographed or printed facsimile signatures.
CITY OF LAA'ORTE, TEXAS
A.
Mayor
(SEAL)
COUNTERSIGNED:
City Secretary k"
4 In the initial Certificate,this paragraph shall read:
"THIS CERTIFICATE shall not be valid or obligatory for any purpose or be entitled to
any benefit under the Ordinance unless this Certificate is registered by the Comptroller of Public
Accounts of the State of Texas by due execution of the registration certificate endorsed hereon."
A-4
HOU:3746876.1
FORM OF COMPTROLLER'S REGISTRATION CERTIFICATE
The following form of Comptroller's Registration Certificate shall be attached or affixed
to each of the Certificates initially delivered:
THE STATE OF TEXAS
REGISTER NO.
OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS
I hereby certify that this certificate has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and that this certificate has been
registered by the Comptroller of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL OF OFFICE this
Comptroller of Public Accounts
of the State of Texas
[SEAL]
* * *
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
The following form of authentication certificate shall be printed on the face of each of the
Certificates other than those initially delivered:
AUTHENTICATION CERTIFICATE
This Certificate is one of the Certificates described in and delivered pursuant to the
within-mentioned Ordinance; and, except for the Certificates initially delivered, this Certificate
has been issued in exchange for or replacement of a Certificate, Certificates, or a portion of a
Certificate or Certificates of an issue which originally was approved by the Attorney General of
the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas.
AMEGY BANK,A DIVISION OF ZB,
NATIONAL ASSOCIATION,
as Paying Agent/Registrar
By:
Authorized Signature
Date of Authentication:
A-5
HOU:3746876.1
* * * *
FORM OF ASSIGNMENT
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
(Please print or type name, address, and zip code of Transferee)
(Please insert Social Security or Taxpayer Identification Number of Transferee)
the within certificate and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer such certificate on the books kept
for registration thereof, with full power of substitution in the premises.
DATED:
Signature Guaranteed:
Registered Owner
NOTICE: The signature above must
correspond to the name of the Registered
NOTICE: Signature must be guaranteed by a Owner as shown on the face of this certificate
member firm of the New York Stock Exchange in every particular, without any alteration,
or a commercial bank or trust company. enlargement or change whatsoever.
* * * *
A-6
HOU:3746876.1
EXHIBIT B
FORM OF SPECIAL ESCROW DEPOSIT AGREEMENT
(TAB 7)
HOU:3746876.1
EXHIBIT C
TWDB RESOLUTION
(TAB 2)
HOU:3746876.1
DULY PASSED AND APPROVED this the 23r. o.y of January, 2017.
I ,
May., 11/
ATTEST:
(190-Ater,&
City Secretary f
APPROVED AS TO FORM AND CONTENT:
riffri
A orney
S-1
HOU:3746876.3
DULY PASSED AND APPROVED this the 22d .y of Janu. , 2017.
IIIA
M.yor
ATTEST:
City Secretary
APPROVED AS TO FORM AND CONTENT:
City Attorney
S-1
HOU:3746876.3
DULY PASSED AND APPROVED this the 21 t: of Jan .ry, 2017.
ALA
Ma IF
ATTEST:
LCA 62'" l/
City Secretary
APPROVED AS TO FORM AND CONTENT:
/ ,
City Attorney
S-1
HOU:3746876.3
DULY PASSED AND APPROVED this the 23rsiay ,of January, 017.
Mayor IF
ATTEST:
tgtraLL
City Secretary
APPROVED AS TO FORM AND CONTENT:
ity Attorney
S-1
HOU:3746876.3
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT (this "Agreement"), is entered into as of January 23, 2017 by and
between the City of La Porte, Texas (the "Issuer"), and Amegy Bank, a division of ZB, National
Association, (the"Bank").
RECITALS OF THE ISSUER
The Issuer has duly authorized and provided for the issuance of its certificates, entitled
"City of La Porte, Texas, Certificates of Obligation, Series 2017 (the "Certificates") in an
aggregate principal amount of$10,635,000 to be issued as fully registered certificates;
All things necessary to make the Certificates the valid obligations of the Issuer, in
accordance with their terms, will be done upon the issuance and delivery thereof;
The Issuer and the Bank wish to provide the terms under which the Bank will act as
Paying Agent to pay the principal, redemption premium (if any) and interest on the Certificates,
in accordance with the terms thereof, and under which the Bank will act as Registrar for the
Certificates;
The Issuer and the Bank have duly authorized the execution and delivery of this
Agreement; and all things necessary to make this Agreement the valid agreement of the parties,
in accordance with its terms, have been done.
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01. Appointment. The Issuer hereby appoints the Bank to act as Paying Agent
with respect to the Certificates, to pay to the Registered Owners of the Certificates in accordance
with the terms and provisions of this Agreement and the Ordinance, the principal of, redemption
premium(if any), and interest, on all or any of the Certificates.
The Issuer hereby appoints the Bank as Registrar with respect to the Certificates.
The Bank hereby accepts its appointment, and agrees to act as Paying Agent and
Registrar.
Section 1.02. Compensation. As compensation for the Bank's services as Paying Agent
and Registrar, the Issuer hereby agrees to pay the Bank the fees set forth in the Bank's fee
schedule attached as Annex A hereto. The Bank reserves the right to amend the fee schedule at
any time, provided the Bank shall have furnished the Issuer with a written copy of such amended
fee schedule at least 75 days prior to the date that the new fees are to become effective.
HOU:3747011.1
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"Bank"means Amegy Bank, a division of ZB,National Association, a national bank duly
organized and existing under the laws of the United States of America.
"Certificate" or"Certificates"means any one or all of the"$10,635,000 City of La Porte,
Texas, Certificates of Obligation, Series 2017."
"Financial Advisor"means RBC Capital Markets, LLC and its successors.
"Issuer"means the City of La Porte, Texas.
"Ordinance" means the order of the Issuer approved September 28, 2017, pursuant to
which the Certificates are issued.
"Paying Agent"means the Bank when it is performing the function of paying agent.
"Person" means any individual, corporation, partnership,joint venture, associations,joint
stock company, trust, unincorporated organization or government or any agency or political
subdivision of a government or any entity whatsoever.
"Registrar"means the Bank when it is performing the function of registrar.
All other capitalized terms shall have the meanings assigned in the Ordinance.
ARTICLE THREE
DUTIES OF THE BANK
Section 3.01. Initial Delivery of Certificates. The Certificates will be initially registered
and delivered to the purchaser designated by the Issuer as set forth in the Ordinance. If such
purchaser delivers a written request to the Bank not later than five business days prior to the date
of initial delivery, the Bank will, on the date of initial delivery, exchange the Certificates initially
delivered for Certificates of authorized denominations, registered in accordance with the
instructions in such request and the Ordinance.
Section 3.02. Duties of Paying Agent. As Paying Agent, the Bank shall, provided
adequate funds have been provided to it for such purpose by or on behalf of the Issuer, pay on
behalf of the Issuer the principal of, redemption premium, if any, and interest, on each Certificate
in accordance with the provisions of the Ordinance.
Section 3.03. Duties of Bank. The Bank undertakes to perform the duties set forth
herein and agrees to use reasonable care in the performance thereof.
2
HOU:3747011.1
The Bank is authorized to receive the purchase price of and, if applicable, accrued
interest on the Certificates from the underwriter of the Certificates and to transfer said funds
relating to the closing and initial delivery of the Certificates in the manner disclosed in the
closing memorandum approved by the Issuer as prepared by the Issuer's Financial Advisor or
other agent. The Bank may act on a facsimile or electronic mail transmission of the closing
memorandum acknowledged by the Issuer or the Issuer's Financial Advisor as the final closing
memorandum to be followed by an original of the closing memorandum signed by the Financial
Advisor or the Issuer. The Bank shall not be liable for any losses, costs or expenses arising
directly or indirectly from the Bank's reliance upon and compliance with such instructions.
Section 3.04. Duties of Registrar. The Bank shall provide for the proper registration of
the Certificates and the exchange, replacement and registration of transfer of the Certificates, in
accordance with the provisions of the Ordinance. The Bank will maintain the books of
registration in accordance with the Bank's general practices and procedures in effect from time
to time.
Section 3.05. Unauthenticated Certificates. The Issuer shall provide an adequate
inventory of unauthenticated Certificates to facilitate transfers. The Bank covenants that it will
maintain such unauthenticated Certificates in safekeeping and will use reasonable care in
maintaining such Certificates in safekeeping, which shall be not less than the care it maintains
for debt securities of other government entities or corporations for which it serves as registrar, or
which it maintains for its own bonds.
Section 3.06. Reports. The Bank will provide the Issuer reports upon request, which
reports will describe in reasonable detail all transactions pertaining to the Certificate and the
books of registration. The Issuer may also inspect and make copies of the information in the
books of registration at any time the Bank is customarily open for business, provided that
reasonable time is allowed the Bank to provide an up-to-date listing or to convert the information
into written form.
The Bank will not release or disclose the content of the books of registration to any
person other than to, or at the written request of, an authorized officer or employee of the Issuer,
except upon receipt of a subpoena, court order or as otherwise required by law. Upon receipt of
a subpoena, court order or other lawful request, the Bank will notify the Issuer immediately so
that the Issuer may contest the subpoena, court order or other request provided the Bank is not
prohibited from providing such notice.
Section 3.07. Cancelled Certificates. All Certificates surrendered for payment,
redemption, transfer, exchange, or replacement, if surrendered to the Bank, shall be promptly
cancelled by it and, if surrendered to the Issuer, shall be delivered to the Bank and, if not already
cancelled, shall be promptly cancelled by the Bank. The Issuer may at any time deliver to the
Bank for cancellation any Certificates previously authenticated and delivered which the Issuer
may have acquired in any manner whatsoever, and all Certificates so delivered shall be promptly
cancelled by the Bank. All cancelled Certificates held by the Bank shall be destroyed and
evidence of such destruction furnished to the Issuer.
3
HOU:3747011.1
Section 3.08. Reliance on Documents, Etc. (a) The Bank may conclusively rely, as to
the truth of the statements and correctness of the opinions expressed therein, on certificates or
opinions furnished to the Bank by the Issuer.
(b) The Bank shall not be liable to the Issuer for actions taken under this Agreement
so long as it acts in good faith and exercises due diligence, reasonableness and care, as
prescribed by law,with regard to its duties hereunder.
(c) This Agreement is not intended to require the Bank to expend its own funds for
performance of any of its duties hereunder.
(d) The Bank may rely and shall be protected by the Issuer against any claim by the
Issuer or any other Person in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note,
security, or other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties. Without limiting the generality of the foregoing
statement, the Bank need not examine the ownership of any Certificate, but is protected in acting
upon receipt of a Certificate containing an endorsement or instruction of transfer or power of
transfer which appears on its face to be signed by the holder or an agent of the holder. The Bank
shall not be bound to make any investigation into the acts or matters stated in a resolution,
certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond,
note, security or other paper or document supplied by Issuer.
(e) The Bank may consult with legal counsel, and the written advise of such counsel
or any opinion shall be full and complete authorization and protection with respect to any action
taken, suffered or omitted by it hereunder in good faith and in reliance thereon; provided that any
such written advice or opinion is supplied to the Issuer by the Bank.
(f) The Bank may exercise any of the powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys.
Section 3.09. Money Held by Bank. Money held by the Bank hereunder shall be held in
trust for the benefit of the Registered Owners of the Certificates.
The Bank shall be under no obligation to pay interest on any money received by it
hereunder.
All money deposited with the Bank hereunder shall be secured in the manner and to the
fullest extent required by law for the security of funds of the Issuer, including the
collateralization of any funds pursuant to Chapter 2257, Texas Government Code, to the extent
such funds are not insured by the Federal Deposit Insurance Company.
Any money deposited with the Bank for the payment of the principal, redemption
premium (if any) or interest on any Certificate and remaining unclaimed by the Registered
Owner after the expiration of three years from the date such funds have become due and payable
shall be reported and disposed of by the Bank in accordance with the provisions of Texas law
including, to the extent applicable, Title 6 of the Texas Property Code, as amended. To the
extent such provision of the Texas Property Code do not apply to the funds, such funds shall be
4
HOU:3747011.1
paid by the bank to the Issuer upon receipt of a written request therefor from the Issuer. The
Bank shall have no liability to the Registered Owners of the Certificates by virtue of actions
taken in compliance with the foregoing provision.
Section 3.10. Indemnification. To the extent permitted by law, the Issuer agrees to
indemnify the Bank for, and hold it harmless against, any loss, liability or expense incurred by
the Bank without negligence or bad faith on the Bank's part, arising out of or in connection with
its acceptance or administration of the Bank's duties hereunder, including the cost and expense
(including the Bank's counsel fees) of defending against any claim or liability in connection with
the exercise or performance of any of the Bank's powers or duties under this Agreement.
Section 3.11. Interpleader. The Issuer and the Bank agree that the Bank may seek
adjudication of any adverse claim, demand or controversy over its person as well as funds on
deposits, in any Federal or State Court located in the State and County where the administrative
offices of the Issuer is located, and agree that service of process by registered mail, return receipt
requested, to the address referred to in Section 4.04 of this Agreement shall constitute adequate
service. The Issuer and the Bank further agree that the Bank has the right to file a Bill of
Interpleader in any court of competent jurisdiction in the State of Texas to determine the rights of
any Person claiming any interest herein.
Section 3.12. Merger, Conversion, Consolidation or Succession. Any corporation into
which the Bank may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion, or consolidation to which the Bank shall be a
party, or any corporation succeeding to all or substantially all of the corporate trust business of
the Bank shall be the successor of the Bank hereunder without the execution or filing of any
paper or any further act on the part of either of the parties hereto. In case any Certificate shall
have been registered, but not delivered, by the Bank then in office, any successor by merger,
conversion, or consolidation to such authenticating Bank may adopt such registration and deliver
the Certificate so registered with the same effect as if such successor Bank had itself registered
such Certificate.
ARTICLE FOUR
MISCELLANEOUS PROVISIONS
Section 4.01. May Own Certificates. The Bank, in its individual or any other capacity,
may become the owner or pledgee of Certificates with the same rights it would have if it were
not the Paying Agent and Registrar for the Certificates.
Section 4.02. Amendment. This Agreement may be amended only by an agreement in
writing signed by both of the parties hereof.
Section 4.03. Assignment. This Agreement may not be assigned by either party without
the prior written consent of the other.
Section 4.04. Notices. Any request, demand, authorization, direction, notice, consent,
waiver or other document provided or permitted hereby to be given or furnished to the Issuer or
the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses
5
HOU:3747011.1
shown herein, or such other address as may have been given by one party to the other by 15 days
written notice.
Section 4.05. Effect of Headings. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof
Section 4.06. Successors and Assigns. All covenants and agreements herein by the
Issuer and the Bank shall bind their successors and assigns, whether so expressed or not.
Section 4.07. Severability. If any provision of this Agreement shall be invalid or
unenforceable, the validity and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired.
Section 4.08. Benefits of Agreement. Nothing herein, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder, any benefit or any legal
or equitable right, remedy or claim hereunder.
Section 4.09. Ordinance Governs Conflicts. This Agreement and the Ordinance
constitute the entire agreement between the parties hereto relative to the Bank acting as Paying
Agent and Registrar and if any conflict exists between this Agreement and the Ordinance, the
Ordinance shall govern.
Section 4.10. Term and Termination. This Agreement will terminate on the date of the
final payment by the Bank of the principal of and interest on the Certificates. This Agreement
shall be effective from and after its date and may be terminated for any reason by the Issuer or
the Bank at any time upon 30 days written notice; provided, however, that no such termination
shall be effective until a successor has been appointed and has accepted the duties of the Bank
hereunder. In the event of early termination regardless of circumstances, the Bank shall deliver
to the Issuer or its designee all funds, Certificates and all books and records pertaining to the
Bank's role as Paying Agent and Registrar with respect to the Certificates, including, but not
limited to, the books of registration.
Section 4.11. Governing Law. This Agreement shall be construed in accordance with
and shall be governed by the laws of the State of Texas.
6
HOU:3747011.1
AMEGY BANK,A DIVISION OF ZB,
NATIONAL ASSOCIATION
By:
Title: Agent
Address: 1801 Main St., Suite 850
Houston, TX 77002
Attn: Corporate Trust and
Escrow Department
8
HOU:3747011.1
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
CITY OF LA Pit XAS
By:
Mayer
Address: 604 W. Fairmont Parkway
La Porte, TX 77571
ATTEST:
G&W). JCICbtby
City Secretary
7
HOU:3747011.1
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
/1
CITY OF LA P O " E, TEXA
..J
By: `'iv' A
Mayo . IP
Address: 604 W. Fairmont Parkway
La Porte, TX 77571
ATTEST:
ativici
City Secretary
7
HOU:3747011.1
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
CITY OF LA P,`, ' E, TEXA
By:
Mayo tip
Address: 604 W. Fairmont Parkway
La Porte,TX 77571
ATTEST:
igtruit - z.r/i /
City Secretary /
7
HOU:3747011.1
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
CITY OF LA Pal E, TEXAS
By: i.' 1 -
Mayo, •
Address: 604 W. Fairmont Parkway
La Porte, TX 77571
ATTEST:
pti_ja
iicee2 jt_,.
City Secretary
7
HOU:3747011.1
CITY OF LA PORTE, TEXAS
January 23, 2017
Attorney General of Texas
Attention: Public Finance Division
William P. Clements Building, 9th Floor
300 W. 15th Street
Austin, TX 78701
Texas State Comptroller of Public Accounts
Cash and Securities Management Division
Thomas Jefferson Rusk Building
208 East 10th Street, 4th Floor, Room 448
Austin,Texas 78701-2407
Re: City of La Porte, Texas, Certificates of Obligation, Series 2017 (the
"Certificates')
Ladies and Gentlemen:
TO THE ATTORNEY GENERAL
The captioned Certificates are being sent to you for approval and we enclose one
executed but undated SIGNATURE IDENTIFICATION AND NO-LITIGATION
CERTIFICATE. Upon approval of the Certificates, you are authorized and respectfully
requested to insert the date in such certificate, which date is to be the same as your approval date.
If any litigation should develop before you have approved the Certificates, we will notify you at
once both by telephone and fax. With this assurance you can rely upon the absence of litigation
at the time that you approve the Certificates unless we advise you to the contrary.
After you have approved the Certificates, please deliver them to the Comptroller of
Public Accounts of Texas for registration.
TO THE COMPTROLLER
After the Certificates have been registered, they will be picked up by Andrews Kurth
Kenyon LLP.
Very truly yiu ,
Mays
City o . Porte, Texas
Encl. to Attorney General
HOU:3755063.1
CITY OF LA PORTE, TEXAS
January 23, 2017
Attorney General of Texas
Attention: Public Finance Division
William P. Clements Building, 9th Floor
300 W. 15th Street
Austin,TX 78701
Texas State Comptroller of Public Accounts
Cash and Securities Management Division
Thomas Jefferson Rusk Building
208 East 10th Street, 4th Floor, Room 448
Austin, Texas 78701-2407
Re: City of La Porte, Texas, Certificates of Obligation, Series 2017 (the
"Certificates')
Ladies and Gentlemen:
TO THE ATTORNEY GENERAL
The captioned Certificates are being sent to you for approval and we enclose one
executed but undated SIGNATURE IDENTIFICATION AND NO-LITIGATION
CERTIFICATE. Upon approval of the Certificates, you are authorized and respectfully
requested to insert the date in such certificate, which date is to be the same as your approval date.
If any litigation should develop before you have approved the Certificates, we will notify you at
once both by telephone and fax. With this assurance you can rely upon the absence of litigation
at the time that you approve the Certificates unless we advise you to the contrary.
After you have approved the Certificates, please deliver them to the Comptroller of
Public Accounts of Texas for registration.
TO THE COMPTROLLER
After the Certificates have been registered, they will be picked up by Andrews Kurth
Kenyon LLP.
Verytrulyyo4 ,
4I
6
Mayo
City of : 'orte,Texas
Encl. to Attorney General
HOU:3755063.1
CITY OF LA PORTE, TEXAS
January 23, 2017
Attorney General of Texas
Attention: Public Finance Division
William P. Clements Building, 9th Floor
300 W. 15th Street
Austin,TX 78701
Texas State Comptroller of Public Accounts
Cash and Securities Management Division
Thomas Jefferson Rusk Building
208 East 10th Street, 4th Floor, Room 448
Austin,Texas 78701-2407
Re: City of La Porte, Texas, Certificates of Obligation, Series 2017 (the
"Certificates')
Ladies and Gentlemen:
TO THE ATTORNEY GENERAL
The captioned Certificates are being sent to you for approval and we enclose one
executed but undated SIGNATURE IDENTIFICATION AND NO-LITIGATION
CERTIFICATE. Upon approval of the Certificates, you are authorized and respectfully
requested to insert the date in such certificate, which date is to be the same as your approval date.
If any litigation should develop before you have approved the Certificates, we will notify you at
once both by telephone and fax. With this assurance you can rely upon the absence of litigation
at the time that you approve the Certificates unless we advise you to the contrary.
After you have approved the Certificates, please deliver them to the Comptroller of
Public Accounts of Texas for registration.
TO THE COMPTROLLER
After the Certificates have been registered, they will be picked up by Andrews Kurth
Kenyon LLP.
Very truly yof r.,N
1
Mayo
City of ►. 'orte, Texas
Encl. to Attorney General
HOU:3755063.1
•
CITY OF LA PORTE, TEXAS
January 23, 2017
Attorney General of Texas
Attention: Public Finance Division
William P. Clements Building, 9th Floor
300 W. 15th Street
Austin, TX 78701
Texas State Comptroller of Public Accounts
Cash and Securities Management Division
Thomas Jefferson Rusk Building
208 East 10`h Street, 4th Floor, Room 448
Austin,Texas 78701-2407
Re: City of La Porte, Texas, Certificates of Obligation, Series 2017 (the
"Certificates')
Ladies and Gentlemen:
TO THE ATTORNEY GENERAL
The captioned Certificates are being sent to you for approval and we enclose one
executed but undated SIGNATURE IDENTIFICATION AND NO-LITIGATION
CERTIFICATE. Upon approval of the Certificates, you are authorized and respectfully
requested to insert the date in such certificate, which date is to be the same as your approval date.
If any litigation should develop before you have approved the Certificates, we will notify you at
once both by telephone and fax. With this assurance you can rely upon the absence of litigation
at the time that you approve the Certificates unless we advise you to the contrary.
After you have approved the Certificates, please deliver them to the Comptroller of
Public Accounts of Texas for registration.
TO THE COMPTROLLER
After the Certificates have been registered, they will be picked up by Andrews Kurth
Kenyon LLP.
Very truly your ),
•
Mayor 411
City of L. 'orte, Texas
Encl. to Attorney General
HOU:3755063.1
SIGNATURE IDENTIFICATION AND NO-LITIGATION CERTIFICATE
We,the undersigned officers of the City of La Porte,Texas,certify that we officially signed,
by facsimile signatures,on behalf of said City,the following described Certificates,hereinafter called
the"Certificates",to wit:
CITY OF LA PORTE TEXAS,CERTIFICATES OF OBLIGATION,SERIES 2017,
dated February 1, 2017, in the principal amount of$10,635,000,
being on the date of such signing and on the date hereof the duly chosen,qualified and acting officers
authorized to execute the Certificates, and holding the official titles set forth below opposite such
signatures. We further certify that said facsimile signatures have been affixed to the Certificates with
our full knowledge and consent, and we hereby respectively adopt the same as our own signatures.
We further certify that we have caused the official seal of the City to be impressed or placed
in facsimile upon each of said Certificates and that said seal has been duly adopted as,and is hereby
declared to be, the official seal of the City.
We further certify that no litigation of any nature is now pending or to our knowledge
threatened,either in the State or Federal courts contesting or attacking the Certificates or restraining
or enjoining their issuance, execution or delivery, or restraining or enjoining the levy and/or
collection and/or pledge of the funds from which the Certificates are payable, or in any manner
questioning the authority or proceedings for the issuance,execution or delivery of the Certificates,or
affecting the title of the present officials, or the boundaries of the City, and that no proceedings or
authority for the issuance,execution or delivery of the Certificates have been repealed,rescinded or
revoked.
In witness whereof we have signed this certificate and delivered it on the day of
January, 2017.
.•.da
HOU:3626115.1
SIGNATURES TITLE OF OFFICE
arltio•4 Mayor
firf
PITAL&z7.4eilydity
City Secretary
THE STATE OF TEXAS §
COUNTY OF HARRIS §
Before me,on the day of January,2017,personally appeared the foregoing individuals,
known to me to be the officers whose true and genuine signatures were subscribed to the foregoing
instrument in my presence.
)fuVIi1tAALJy
Notary Public
State of Texas
(NOTARY SEAL)
Jejit- Mira Publie,=Tram
cl'irkeingrege
HOU:3626115.1
SIGNATURES TITLE OF OFFICE
1
I �
i 1. Mayor
,(/u.( e /[A, ✓ City Secretary
,
THE STATE OF TEXAS §
COUNTY OF HARRIS §
Before me,on the 4 day of January,2017,personally appeared the foregoing individuals,
known to me to be the officers whose true and genuine signatures were subscribed to the foregoing
instrument in my presence.
Oatria 401,14)
Notary Public
State of Texas
(NOTARY SEAL)
� n'.'. SHARON HARRIS 1
+' Notary Public,Stole of Texas '
Comm.Expires 11-05-2017 ,
.41; Notary ID 123984206
HOU:3626115.1
SIGNATURES TITLE OF OFFICE
gkr
Mayor
II/
/ -
/y/� City Secretary
THE STATE OF TEXAS §
COUNTY OF HARRIS �piI
Before me,on the� '" day of January,2017,personally appeared the foregoing individuals,
known to me to be the officers whose true and genuine signatures were subscribed to the foregoing
instrument in my presence.
1/4,4,OkrY,OtificaL
Notary Public
State of Texas
(NOTARY SEAL)
x;fi► SHARON HARRIS
Notory PubUc,Stot�of
Comm.6lirw 11-05-2017 I
NotaryID 123984206
HOU:3626115.1
SIGNATURES TITLE OF OFFICE
/
AI, A Mayor
MP illr
avuit �/� City Secretary
THE STATE OF TEXAS §
COUNTY OF HARRIS §
Before me,on theib day of January,2017,personally appeared the foregoing individuals,
known to me to be the officers whose true and genuine signatures were subscribed to the foregoing
instrument in my presence.
%/Matt-viol-mid'
Notary Public
State of Texas
(NOTARY SEAL)
II
"0:4T. SHARON HARRIS
* Nalary►ublic,Slap of
. Comm.44ne 11-01.4011'
'.a:, Notary I 123984206
HOU:3626115.1
SIGNATURES TITLE OF OFFICE
I
4111r
Mayor
I ,
' 04-i � City Secretary
THE STATE OF TEXAS §
COUNTY OF HARRIS §
Before me,on the j)" day of January,2017,personally appeared the foregoing individuals,
known to me to be the officers whose true and genuine signatures were subscribed to the foregoing
instrument in my presence.
SAA APLOIfiALd-}
SHARON HARRIS Notary Public
th„y Notary Public, State of Texas
Com. Expires >-os-2o State of Texas
Notary ID 123984206
(NOTARY SEAL)
HOU:3626115.1
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (Agreement), made by and between the City of La Porte, a
political subdivision of the State of Texas in Harris County, Texas, (City), acting by and through
the Mayor, and Amegy Bank, a division of ZB, National Association, as Escrow Agent together
with any successor in such capacity;
WITNESSETH:
WHEREAS, pursuant to an Ordinance finally adopted on [January 23, 2017] (Ordinance), the City
of La Porte authorized the issuance of$10,635,000 City of La Porte, Texas Combination Tax and
Surplus Revenue Certificates of Obligation, dated February 1, 2017 (Obligations) to obtain
financial assistance from the Texas Water Development Board (TWDB) for the purpose of funding
water or wastewater system improvements (Project); and
WHEREAS, the Escrow Agent is a state or national bank designated by the Texas Comptroller as a
state depository institution in accordance with Texas Government Code, Chapter 404, Subchapter
C, or is a designated custodian of collateral in accordance with Texas Government Code, Chapter
404, Subchapter D and is otherwise qualified and empowered to enter into this Agreement, and
hereby acknowledges its acceptance of the terms and provisions hereof; and
WHEREAS, a condition of the Obligations is the deposit of the proceeds of the Obligations
(Proceeds) in escrow subject to being withdrawn only with the approval of the Executive
Administrator or another designated representative; provided, however, the Proceeds can be
transferred to different investments so long as all parties hereto consent to such transfer;
NOW, THEREFORE, in consideration of the mutual agreements herein contained and in
consideration of the amount of fees to be paid by the City to the Escrow Agent, as set forth on
EXHIBIT A, the receipt of which is hereby acknowledged, and in order to secure the delivery of
the Obligations, the parties hereto mutually undertake, promise and agree for themselves, their
respective representatives and successors, as follows:
SECTION 1: ESCROW ACCOUNT(S). Upon the delivery of the Obligations described above,
the Proceeds identified under TWDB Commitment Number(s) L1000552 shall be deposited to the
credit of a special escrow account(s) or escrow subaccount(s) (Escrow Account(s)) maintained at
the Escrow Agent on behalf of the City and the TWDB and shall not be commingled with any other
accounts or with any other proceeds or funds. The Proceeds received by the Escrow Agent under
this Agreement shall not be considered as a banking deposit by the City, and the Escrow Agent
shall have no right to title with respect thereto except as Escrow Agent under the terms of this
Agreement.
.. I
The Escrow Account(s) shall be entitled "City of La Porte Certificates of Obligation, Texas Water
Development Board L1000552 Escrow Account" and shall not be subject to warrants, drafts or
II
1
LGL-006 10/01/13
HOU:3746994.1
checks drawn by the City but shall be disbursed or withdrawn to pay the costs of the Project for
which the Obligations were issued or other purposes in accordance with the Ordinance and solely
upon written authorization from the Executive Administrator or his/her designated representative.
The Escrow Agent shall provide to the City and to the TWDB the Escrow Account(s) bank
statements upon request.
SECTION 2: COLLATERAL. All cash deposited to the credit of such Escrow Account(s) and
any accrued interest in excess of the amounts insured by the FDIC and remaining uninvested under
the terms of this Agreement shall be continuously secured by a valid pledge of direct obligations of
the United States of America or other collateral meeting the requirements of the Public Funds
Collateral Act, Texas Government Code, Chapter 2257.
SECTION 3: INVESTMENTS. While the Proceeds are held in escrow, the Escrow Agent shall
only invest escrowed Proceeds in investments that are authorized by the Public Funds Investment
Act, Texas Government Code, Chapter 2256 (PFIA). It is the City's responsibility to direct the
Escrow Agent to invest all public funds in a manner that is consistent not only with the PFIA but
also with its own written investment policy.
SECTION 4: DISBURSEMENTS. The Escrow Agent shall not honor any disbursement from the
Escrow Account(s), or any portion thereof, unless and until it has been supplied with written
approval and consent by the Executive Administrator or his/her designated representative.
However, no written approval and consent by the Executive Administrator shall be required if the
disbursement involves transferring Proceeds from one investment to another within the Escrow
Account(s)provided that all such investments are consistent with the PFIA requirements.
SECTION 5: UNEXPENDED FUNDS. Any Proceeds remaining unexpended in the Escrow
Account(s) after completion of the Project and after the final accounting has been submitted to and
approved by the TWDB shall be disposed of pursuant to the provisions of the Ordinance. The City
shall deliver a copy of such TWDB approval of the final accounting to the Escrow Agent together
with instructions concerning the disbursement of unexpended Proceeds hereunder. The Escrow
Agent shall have no obligation to ensure that such unexpended Proceeds are used as required by the
provisions of the Ordinance, that being the sole obligation of the City.
SECTION 6: CERTIFICATIONS. The Escrow Agent shall be authorized to accept and rely
upon the certifications and documents furnished to the Escrow Agent by the City and shall not be
liable for the payment of any funds made in reliance in good faith upon such certifications or other
documents or approvals, as herein recited.
SECTION 7: LIABILITY OF ESCROW AGENT. To the extent permitted by law, the Escrow
Agent shall not be liable for any act done or step taken or omitted by it or any mistake of fact or
law, except for its negligence or default or failure in the performance of any obligation imposed
upon it hereunder. The Escrow Agent shall not be responsible in any manner for any proceedings
in connection with the Obligations or any recitation contained in the Obligations.
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LGL-006 10/01/13
HOU:3746994.1
SECTION 8: RECORDS. The Escrow Agent will keep complete and correct books of record
and account relating to the receipts, disbursements, allocations and application of the money
deposited to the Escrow Account, and investments of the Escrow Account and all proceeds thereof.
The records shall be available for inspection and copying at reasonable hours and under reasonable
conditions by the City and the TWDB.
SECTION 9: MERGER/CONSOLIDATION. In the event that the Escrow Agent merges or
consolidates with another bank or sells or transfers substantially all of its assets or corporate trust
business, then the successor bank shall be the successor Escrow Agent without the necessity of
further action as long as the successor bank is a state or national bank designated by the Texas
Comptroller as a state depository institution in accordance with Texas Government Code, Chapter
404, Subchapter C, or is a designated custodian of collateral in accordance with Texas Government
Code Chapter 404, Subchapter D. The Escrow Agent must provide the TWDB with written
notification within 30 days of acceptance of the merger, consolidation, or transfer. If the merger,
consolidation or other transfer has occurred between state banks, the newly-created entity shall
forward the certificate of merger or exchange issued by the Texas Department of Banking as well
as the statement filed with the pertinent chartering authority, if applicable,to the TWDB within five
business days following such merger, consolidation or exchange.
SECTION 10: AMENDMENTS. This Agreement may be amended from time to time as
necessary with the written consent of the City and the TWDB, but no such amendments shall
increase the liabilities or responsibilities or diminish the rights of the Escrow Agent without its
consent.
SECTION 11: TERMINATION. In the event that this Agreement is terminated by either the
City or by the Escrow Agent, the Escrow Agent must report said termination in writing to the
TWDB within five business days of such termination. The City is responsible for ensuring that the
following criteria are satisfied in selecting the successor escrow agent and notifying the TWDB of
the change in escrow agents: (a) the successor escrow agent must be an FDIC-insured state or
national bank designated by the Texas Comptroller as a state depository; (b) the successor escrow
agent must be retained prior to or at the time of the termination; (c) an escrow agreement must be
executed by and between the City and the successor escrow agent and must contain the same or
substantially similar terms and conditions as are present in this Agreement; and (d) the City must
forward a copy of the executed escrow agreement with the successor escrow agent within five
business days of said termination. No funds shall be released by the TWDB until it has received,
reviewed and approved the escrow agreement with the successor escrow agent. If the City has not
appointed a successor escrow agent within thirty (30) days of the notice of termination, the Escrow
Agent may petition any court of competent jurisdiction in Texas for the appointment of a successor
escrow agent or for other appropriate relief, and any such resulting appointment shall be binding
upon the City. Whether appointed by the City or a court, the successor escrow agent and escrow
agreement must be approved by the TWDB for the appointment to be effective. The Escrow Agent
is responsible for performance under this Agreement until a successor has been approved by the
TWDB and has signed an acceptable escrow agreement.
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LGL-006 10/01/13
HOU:3746994.1
SECTION 12: EXPIRATION. This Agreement shall expire upon final transfer of the funds in the
Escrow Account(s)to the City.
SECTION 13: POINT OF CONTACT. The points of contact for the Escrow Agent and the
TWDB are as follows:
Deirdre Ward Jeff Walker
Vice President Executive Administrator
Amegy Bank, a division of ZB, Texas Water Development
National Association Board
1801 Main St., 8th Floor 1700 North Congress Avenue
Houston, Texas, 77002 Austin, Texas 78701
713-232-6017
713-571-5010
Deirdre.Ward@amegybank.com
SECTION 14: CHOICE OF LAW. This Agreement shall be governed exclusively by the
applicable laws of the State of Texas. Venue for disputes shall be in the District Court of Travis
County,Texas.
SECTION 15: ASSIGNABILITY. This Agreement shall not be assignable by the parties hereto,
in whole or in part, and any attempted assignment shall be void and of no force and effect.
SECTION 16: ENTIRE AGREEMENT. This Agreement evidences the entire Escrow
Agreement between the Escrow Agent and the City and supersedes any other agreements, whether
oral or written, between the parties regarding the Proceeds or the Escrow Account(s). No
modification or amendment of this Agreement shall be valid unless the same is in writing and is
signed by the City and consented to by the Escrow Agent and the TWDB.
SECTION 17: VALIDITY OF PROVISIONS. If any term, covenant, condition or provision of
this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the provisions shall remain in full force and effect and shall in no way be affected,
impaired or invalidated thereby.
SECTION 18: COMPENSATION FOR ESCROW SERVICES. The Escrow Agent shall be
entitled to compensation for its services as stated in Exhibit A, which compensation shall be paid
by the City but may not be paid directly from the Escrow Account(s).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective upon
signature of both parties.
4
LGL-006 10/01/13
HOU:3746994.1
AMEGY BANK,A DIVISION OF ZB, N.A.
as Escrow Agent
By:
Title: _Vice President
Date:
Address: 1801 Main St., Suite 850
Houston, TX 77002
Attn: Corporate Trust and
Escrow Department
(Bank Seal)
6
LGL-006 10/01/13
HOU:3746994.
it
EXHIBIT A
Fee Schedule
7
LGL-006 10/01/13
HOU:3746994.1
CITY OF L• 'ORTE, T ' • S
Ir
By:
Manor
Address: 604 W. Fairmont Parkway
La Porte,TX 77571
ATTEST:
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City Secretar
Y LZhi
(Seal)
5
LGL-006 10/01/13
HOU:3746994.1
CITY OF LA '0'TE, TE : S
By: d.J.
Mai or .
Address: 604 W. Fairmont Parkway
La Porte, TX 77571
ATTEST:
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Cit Secretary Y
(Seal)
5
LGL-006 10/01/13
HOU:3746994.1
CITY OF LA it • E, TEXA
By: jirli.' •
Ma 71
Address: 604 W. Fairmont Parkway
La Porte, TX 77571
ATTEST:
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City Secretary e
(Seal)
5
LGL-006 10/01/13
HOU:3746994.1
CITY OF LA i ' E, TEXA
By: �.
May" IP
Address: 604 W. airmont Parkway
La Porte, TX 77571
ATTEST:
01:1- 11g. ,..t&LV
City Secretary
(Seal)
5
LGL-006 10/01/13
HOU:3746994.1
PRIVATE PLACEMENT MEMORANDUM CERTIFICATE
I, the undersigned, Mayor of the City of La Porte, Texas (the "City"), acting in my
official capacity as such, hereby certify with respect to that issue of"City of La Porte, Texas,
Certificates of Obligation, Series 2017," in the principal amount of $ (the
"Certificates"), as follows:
To the best of my knowledge and belief:
(a) the descriptions and statements of or pertaining to the City contained in its
Private Placement Memorandum, and any addenda, supplement or
amendment thereto, on the date of such Private Placement Memorandum,
on the date of sale of the Certificates and the acceptance of the best bid
therefor, and on the date of the delivery, were and are true and correct in
all material respects;
(b) insofar as the City and its affairs, including its financial affairs, are
concerned, the Private Placement Memorandum did not and does not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(c) insofar as the descriptions or statements, including financial data, of or
pertaining to entities, other than the City, and their activities contained in
the Private Placement Memorandum are concerned, such statements and
data have been obtained from sources which the City believes to be
reliable and the City has no reason to believe that they are untrue in any
material respect; and
(d) there has been no material adverse change in the financial condition of the
City since the date of the last audited financial statements of the City.
SIGNED as of , 2017, the date of payment for and delivery of the Bonds.
[Signature Page Follows]
HOU:3755220.1
CITY OF LA PORTE, TEXAS
o/
•yor
HOU:3755220.1
CITY OF LA PORTE, TEXAS
Allah
• ayor
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CITY OF LA P"RTE, TEXAS
Ott
Akin
Mayor
HOU:3 755220.1
CITY OF LA PORTE, TEXAS
gaith
Mayor
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CITY OF LA PORTE, TEXAS
NOTE:PLEASE USE BLUE OR BLACK INK. DO NOT PUT THE SEAL OVER ANY
PRINT ON THIS PAGE.
SIGNATURES:
Ma •r
City Secretary
SEAL SEAL
HOU:3755081.1
CITY OF LA PORTE, TEXAS
NOTE:PLEASE USE BLUE OR BLACK INK. DO NOT PUT THE SEAL OVER ANY
PRINT ON THIS PAGE.
SIGNATURES:
1LTA
Ma or \.
PTMOIL J0Fizal( t
City Secretary
SEAL SEAL
1
HOU:3755081.1
CITY OF LA PORTE, TEXAS
NOTE:PLEASE USE BLUE OR BLACK INK. DO NOT PUT THE SEAL OVER ANY
PRINT ON THIS PAGE.
SIGNATURES:
Alith
Ma
6)„.1„.
City Secretary
SEAL SEAL
HOU:3755081.1
RECEIPT AND NO-LITIGATION CERTIFICATE
THE STATE OF TEXAS §
COUNTY OF HARRIS §
We, the undersigned officers of City of La Porte, Texas (the"City"), do hereby certify, as
of the date set forth below, the following:
1. On February 24, 2017, we delivered, or caused to be delivered, to the Purchaser
thereof the following certificates of obligation(the"Certificates"):
CITY OF LA PORTE, TEXAS, CERTIFICATES OF OBLIGATION, SERIES
2017, dated February 1, 2017, in the principal amount of$10,635,000.
2. At the time of such delivery, the City received from the Purchaser full payment
for the Certificates in keeping with the ordinance authorizing the issuance and awarding the sale
thereof.
3. At the time of delivery of the Certificates, (a) no litigation of any nature has been
filed or is now pending which contests or attacks the validity of the Certificates, which would
restrain or enjoin the issuance or delivery of the Certificates; which would restrain or enjoin the
collection or pledge of funds from which the Certificates are payable or would in any other
manner affect the provision made for their payment or security; or which in any manner
questions the proceedings or authority concerning the issuance of the Certificates; and so far as
we know and believe no such litigation is threatened; (b) neither the corporate existence nor the
boundaries of the City are being contested; no litigation has been filed or is now pending which
would affect the authority of the officers of the City to issue, execute and deliver the Certificates
or would affect the title of the undersigned to their respective offices; and no authority or
proceedings for the issuance, execution or delivery of the Certificates have been repealed,
rescinded or revoked; and (c) no additional bonds, warrants or other indebtedness payable from
the same source as the Certificates have been issued since the date of the General Certificate
submitted to the Attorney General of Texas in connection with the approval of the Certificates.
HOU:3755094.1
SIGNED as of, and delivered on, the date of delivery of the Certificates set forth above.
( 1
ayo
f La Portfp
, exas
13(atii- -Asjociitz9
City Secretary
City of La Porte,Texas
HOU:3755094.1
SIGNED as of, and delivered on,the date of delivery of the Certificates set forth above.
M. or
City I a Porte, - 'as
aiaa- ttait
City Secretary
City of La Porte,Texas
HOU:3755094.1
SIGNED as of, and delivered on, the date of delivery of the Certificates set forth above.
MAUS
Ma or
City . a Porte, T- .s
City Secretary `
City of La Porte, exas
HOU:3755094.1
SIGNED as of, and delivered on, the date of delivery of the Certificates set forth above.
M., or
Cit of a Porte, It
iffsi
City Secretary
City of La Porte, exas
HOU:3755094.1
GENERAL CERTIFICATE
STATE OF TEXAS §
COUNTY OF HARRIS §
CITY OF LA PORTE §
We, the undersigned officers of the City of La Porte, Texas (the "City"), do hereby make
and execute this certificate for the benefit of the Attorney General of the State of Texas and all
other persons interested in the City of La Porte, Texas, Certificates of Obligation, Series 2017,
dated February 1, 2017 (the "Certificates"), now in the process of issuance. We certify as
follows:
(1) The City is a home rule municipality operating under its own charter, which has
not been amended since the issuance of the City of La Porte, Texas, General Obligation
Refunding Bonds, Series 2016, the last obligations issued by the City and approved by the Texas
Attorney General.
(2) The following individuals are the duly elected and qualified Mayor and City
Council of the City holding the offices opposite their names:
Louis R. Rigby Mayor
John P. Zemanek Commissioner-at-Large
Dottie Kaminski Commissioner-at-Large
Danny Earp Commissioner, District 1
Chuck Engelken Commissioner, District 2
Daryl Leonard Commissioner, District 3
Kristen Martin Commissioner, District 4
Jay Martin Commissioner, District 5
Mike Clausen Commissioner, District 6
(3) Patrice Fogarty is the duly appointed and qualified City Secretary of the City.
(4) Attached as Exhibit A is a true, full and correct debt service schedule for the
Certificates. Attached as Exhibit B is a true, full and correct debt service schedule for all of the
City's outstanding tax-supported debt, including the Certificates. The principal amount of the
City's total outstanding tax-supported debt, including the Certificates, is $45,785,000.
(5) The 2016 certified net taxable valuation of the City is $
(6) The following is a true, full and current schedule of the City's water and sewer
system revenues remaining after the payment of all operation and maintenance expenses thereof
("Net Revenues") for the past three completed fiscal years:
2013 2014 2015
(7) A true and correct copy of the City's current rate schedule for its water and sewer
system is attached hereto as Exhibit C.
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(8) With respect to the contracts executed in connection with the authorization and
issuance of the Certificates, all disclosure filings and acknowledgments required by Section
2252.908, Texas Government Code, and the rules of the Texas Ethics Commission related to said
provision, have been made.
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HOU:3754700.I
EXHIBIT A
DEBT SERVICE SCHEDULE FOR THE CERTIFICATES
Period
Ending Principal Coupon Interest Debt Service
9/30/2018 430,000 183,819.44 613,819.44
9/30/2019 495,000 117,959.00 612,959.00
9/30/2020 495,000 0.140% 117,612.50 612,612.50
9/30/2021 500,000 0.310% 116,491.00 616,491.00
9/30/2022 500,000 0.480% 114,516.00 614,516.00
9/30/2023 505,000 0.630% 111,725.25 616,725.25
9/30/2024 505,000 0.790% 108,139.75 613,139.75
9/30/2025 510,000 0.920% 103,799.00 613,799.00
9/30/2026 515,000 1.060% 98,723.50 613,723.50
9/30/2027 520,000 1.150% 93,004.00 613,004.00
9/30/2028 530,000 1.250% 86,701.50 616,701.50
9/30/2029 535,000 1.340% 79,804.50 614,804.50
9/30/2030 540,000 1.430% 72,359.00 612,359.00
9/30/2031 550,000 1.520% 64,318.00 614,318.00
9/30/2032 560,000 1.580% 55,714.00 615,714.00
9/30/2033 570,000 1.640% 46,616.00 616,616.00
9/30/2034 575,000 1.700% 37,054.50 612,054.50
9/30/2035 590,000 1.750% 27,004.50 617,004.50
9/30/2036 600,000 1.790% 16,472.00 616,472.00
9/30/2037 610,000 1.820% 5,551.00 615,551.00
10,635,000 1,657,384.44 12,292,384.44
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EXHIBIT B
DEBT SERVICE SCHEDULE FOR TAX-SUPPORTED DEBT
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SIGNED AND SEALED this ,j'day of January, 2017.
CITY OF LA PORTE, TEXAS
41//1. ' Ara
City Secretary ' 4 May.
(CITY SEAL)
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/� I
SIGNED AND SEALED this Z) day of January, 2017.
CITY OF LA PORTE, TEXAS
I'
bA
City Secretary ' I Mayor, .
(CITY SEAL)
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SIGNED AND SEALED this/0�Q day of January, 2017.
CITY OF LA PORTE, TEXAS
City Secretary Mayo
IF �
(CITY SEAL)
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SIGNED AND SEALED thisgday of January, 2017.
CITY OF LA PORTE, TEXAS
itt
City Secretary Mayor ,
(CITY SEAL)
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