HomeMy WebLinkAboutPO 5871: ISSUANCE OF GENERAL OBLIGATION BONDSMemorandum
City of Port Arth ur, Texas
Finance Department
To: Steve Fitzgibbons, City Manag
From: Rebecca Underhill, Director of
Date: March 31, 2008
Subject: Proposed Ordinance 5871
Presented for Council consideration and approval is PO 5871. This ordinance authorizes the issuance of $9
million of the $17 million in General Obligation Bonds, approved at the November 6, 2007 election. The
allocation of the issue was -based upon the spending schedules, of the departments. The balance of
authorization in the propositions will be issued in January 2009 `
Authorization 2008 G0 2009 GO
Proposition No. 1 -Water $ 4,000,000 $ 1',700,000 $ 2,300,000
Proposition No. 2 -Public Safety 3,000,000 1,500,000 1,500,000
Proposition No. 3 -Drainage 2,000,000 :400,000 1,600,000
Proposition No. 4 -Streets 3,000,000 1,600,000 1,400,000
Proposition No. 5 -Business Pazk ' 3,000,000 3,000,000 -
Proposition No. 6 -Parks 2,000,000 800,000 1,200,000
Total $ 17,000,000 $ 9,000,000 $ 8,000,000
The staff, along- with the City's financial advisors, First Southwest Company, will receive bids for the
bonds and present them to Council at the April 8, 2008 meeting. <
Z:\Financel0rdinances~PO 5871 General Obligation, Series 2008, $9 miltion.doc
P. O. No. 5871
4/4/08
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PORT
ARTHUR, TEXAS, AUTHORIZING THE ISSUANCE OF $9,000,000 CITY
OF PORT' ARTHUR TEXAS, GENERAL OBLIGATION BONDS, SERIES
2008; MAKING OTHER PROVISIONS RELATED THERETO; AND
PROVIDING FOR THE EFFECTIVE DATE THEREOF
THE STATE OF TEXAS §
COUNTY OF JEFFERSON §
CITY OF PORT ARTHUR §
WHEREAS, the bonds hereinafter authorized were duly and favorably voted at elections held
in the City of Port Arthur; Texas (the "City") on the 6th day ofNovember, 2007 (the "Election"); and
WHEREAS, the City Council of the City does hereby determine that bonds should be issued
in the amount of $9,000,000 as a portion and the first installment of a total of $17,000,000 bonds'
voted at the Election, said bonds having been authorized forthe-purposes and issued in the amounts
shown below:
Amount
purpose Authorized . This Issue Unissued
Water Facilities $4;000,000 $1,700,000 $2,300,000
Public Safety, Fire Station and Police 3,000,000 1,500,000 1,500,000
Department Facilities
Drainage Improvements 2,000,000 400,000 1,600,000
Streets, Sidewalks-and Related Drainage 3,000,000. ~ 1,600,000 .1,400,000
Improvements
Streets, Sidewalks and Related Drainage. 3,000,000 3,000,000 0
Improvements at the Port Arthur Business
Pazk
City Parks and Recreational Facilities 2,000.000 800,000 1,200,000
TOTAL $17,000,000 $9,000,000 $8,000,000
Now, Therefore
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR:
Houston 3559986v.3
1'. Definitions. Throughout this Ordinance the following terms and expressions as used
herein shall have the meanings set forth below:
"Act" means Chapter 1331, Texas Government Code, as amended.
"Blanket Issuer Letter ofRepresentations" means the Blanket Issuer Letter of Representations
between the City, the Registrar and DTC.
t
"Bonds" means the $9,000,000 City of Port Arthur, Texas, General Obligation Bonds, Series
2008, authorized in this Ordinance, unless the context clearly indicates otherwise.
"Business Day" means any day which is not a Saturday, Sunday, or a day on which the
Registraz is authorized bylaw or executive order to close.
"City" means the City of Port Arthur, Texas.
"Closing Date" means the date of the initial delivery of and payment for the Bonds.
"Code" means the Internal Revenue Code of 1986, as amended.
"Comptroller" means the Comptroller of Public Accounts of the State of Texas.
"Debt Service Fund" means the debt service fund for payment of the Bonds established by the
City in Section 19 of this Ordinance.
"DTC" means The Depository Trust Company of New York, New York, or any successor
securities. depository.
"DTC Participant" means brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations on whose behalf DTC was created to hold securities to facilitate the
clearance and settlement of securities transactions among DTC Participants.
"Initial Bond" means the Initial Bond authorized by Section 5(d).
"Interest Payment Date", when used in connection with any Bond, means February 15, 2009,
and each August 15 and February 15 thereafrer until maturity or eazlier redemption.
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be a nationally
recognized municipal securities information repository within the meaning of the Rule from time to
time.
"Ordinance" as used herein and in the Bonds means this ordinance authorizing the Bonds.
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"Owner" means any person who shall be the registered owner of any outstanding Bond.
"Record Date" means, for any Interest Payment Date, the 15th day of the month next
preceding each Interest Payment Date.
"Register"-means the books of registration kept by the Registraz, in which aze maintained the
names and addresses of, and the principal amounts of the Bonds registered to, each Owner.
"Registrar" means Wells Fargo Bank, N.A., and its successors in that capacity.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means the Municipal Advisory Council of Texas, which has been designated by the
State of Texas as, and determined by the SEC staff to be, a state information depository within the
meaning of the Rule.
2. Authorization. The matters and facts recited in the preamble to this Ordinance aze
hereby found to be true and correct. The Bonds shall be issued, pursuant to the Act, in fully
registered form in the aggregate principal amount of Nine Million Dollazs ($9,000,000) for the
purposes listed below, with the amount for each purpose being as described in the preamble to this
Ordinance:
(i) water facilities;
(ii) public safety, fire station and police departtrient facilities;
(iii) drainage improvements; y
(iv) _ streets, sidewalks and related drainage improvements;
(v) streets, sidewalks and related drainage improvements at the Port Arthur Business
Pazk; and ,
(vi) city parks and recreational facilities.
3. Designation Date and Interest Payment Dates. The Bonds shall be designated as
"CITY OF PORT ARTHUR, TEXAS, GENERAL OBLIGATION BONDS, SERIES 2008" and shall.
be dated April 15, 2008. The Bonds shall bear interest at the rates set forth in Section 4 of this
Ordinance from the later of April 15, 2008, or the most recent Interest Payment Date to which such
interest has been paid or duly provided for, calculated on the basis of a 360-day year of twelve 30-
daymonths, interest payable on February 15, 2009, and semiannually thereafter on August 15 and
February 15 of each year until maturity or earlier redemption.
4. Principlal Amounts and Interest Rates• Numbers and Denominations. The Bonds shall
be issued in the principal amounts and bearing interest at the rates set forth in the following schedule,
and may be transferred and exchanged as set out in this Ordinance. The Bonds shall mature on
February 1 in each of the yeazs and in the amounts set out in such schedule. The Initial Bond shall be
numbered I-1 and all other Bonds shall be numbered in sequence beginning with R-1. Bonds
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delivered on transfer of of in exchange for other Bonds shall be numbered in order of their
authentication by the Registrar, shall be in the denomination of $5,000 or integral multiples thereof,
and shall mature on the same date and bear interest at the same rate as the Bond or Bonds in lieu of
which they are delivered.'
Principal Interest
° Year Amount Rate
2009 $170,000
2010 310,000
2011 320,000
2012 335,000
2013 350,000
2014 365,000
2015 380,000
2016 400,000
2017 415,000
2018 435,000
2019 450,000
2020 470,000
2021 490,000
2022 515;000
2023 535,000
2024 560,000
2025 585,000
2026 610,000
2027 640,000
2028 665,000
5. Execution of Bonds; Seal. (a) The Bonds shall be signed by the Mayor and
countersigned by the City Secretary, by their manual, lithographed, or facsimile signatures, and the
official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures
on the Bonds shall have the same effect as if each of the Bonds had been signed manually and in
person by each of said officers, and such facsimile seal on the Bonds shall have the same effect as if
the official seal of the City had been manually impressed upon each of the Bonds.
(b) ff any officer of the City whose manual or facsimile signature shall appear on the
Bonds shall cease to be such officer before the authentication of such Bonds or before the delivery of
such Bonds, such manual or facsimile signature shall nevertheless be valid and: sufficient for all
purposes. as if such officer had remained in such office.
(c) Except as provided below, no Bond shall be valid or obligatory for any purpose or be
entitled to any security or benefit of this Ordinance unless and until there appears thereon the
Registrar's Authentication Certificate substantially in the form provided herein, duly authenticated by
manual execution by an officer or duly authorized signatory of the Registrar. In lieu of the executed
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Registtaz's Authentication Certificate described above, the Initial Bond delivered at the Closing Date
shall have attached hereto the Comptroller's Registration Certificate substantially in the form
provided. herein, manually executed by the Comptroller, or by his duly authorized agent, which
certificate shall be evidence that the Initial Bond has been duly approved by the Attomey General
and that it is a valid and binding obligation of the City, and has been registered by the Comptroller.
(d) On the Closing Date, the Initial Bond, being a single bond representing the entire
principal amount of the Bonds, payable in stated installments to the Purchaser or its designee,
executed by manual or facsimile signature of the Mayor and City Secretary of the City, approved by
the Attorney General, and registered and manually signed by the Comptroller, shall be delivered to
the Purchaser or its designee. Upon payment for the Initial. Bond, the Registraz shall cancel the
Initial Bond and deliver defmitive bonds to DTC.
6. Payment of Principal and Interest. The Registrar is hereby appointed as the paying
agent and registrar for the Bonds. The principal of the Bonds shall be payable, without exchange or
collection charges, in any coin or currency of the United States of America which ou the date of
payment is legal tender for the payment of,debts due the United States of America, upon their
presentation and surrender as they respectively become due and payable, whether at maturity or
eazlier redemption, at the principal payment office of the Registraz. The interest on each Bond shall
be payable on each Interest Payment Date, by check mailed by the Registrar on or before the Interest
Payment Date to the Owner of record as of the Record Date, to the address of such Owner as shown
on the Register:
If the date for payment ofthe principal of or interest on any Bond is not a Business Day, then
the date.for such paymentshall be the next succeeding Business Day with the same force and effect
as if made on the date payment was originally due.
7. Successor Re isg trans. The City covenants that at all times while any Bonds are
outstanding it will provide a commercial bank or trust company, organized under the laws of the
United States or any state, authorized under such laws to exercise trust powers, and. subject to
supervision or examination by federal or state authority, to serve as and perform the duties and
services of Registrar for the Bonds. The City reserves the right to change the Registrar on not less
than 60 days written notice to the Registraz, so long as any such notice is effective not less than 60
days prior to the next succeeding principal or interest payment date on the Bonds. Promptly upon the
appointment of-any successor Registrar, the previous Registrar shall deliver the Register or copies
thereof to the new Registrar, and the new Registraz shall notify each Owner, by United States mail,
first class postage prepaid, of such change and of the address of the new Registrar. Each Registraz
hereunder, by acting in that capacity, shall be deemed to have agreed to the provisions of this
Section.
8. ~ecial Record Date. If interest on any Bond is not paid on any Interest Payment Date
and continues unpaid for thirty (30) days thereafter, the Registraz shall establish a new record date
for the payment of such interest, to be known as a Special Record Date. The Registraz shall establish
a Special Record Date when funds to make such interest payment aze received from or on behalf of
the City. Such Special Record Date shall be fifteen (15) days prior to the date fixed for payment of
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such past due interest, and notice of the date of payment and the Special Record Date shall be sentby
'United States mail, first class, postage prepaid, not later than five (5) days prior to the Special Record
Date, to each affected Owner of record as of the close of business on the day prior to the mailing of
such notice. '
9. Ownership• Unclaimed Principal and Interest. The City, the Registrar and any other
person may treat the person in whose name any Bond is registered as the absolute owner of such
Bond for the purpose of making and receiving payment of the principal of or interest on such Bond,
and for'all other purposes, whether or not such Bond is overdue, and neither the City nor the
Registrar shall be bound by any notice or knowledge to the contrary. All payments made to the
person deemed to be the Owner of any Bond in accordance with this Section shall be valid and
effectual and shall discharge the liability of the City and the Registrar upon such' Bond to the extent
of the sums paid.
Amounts held by the Registraz which represent principal of and interest on the Bonds
remaining unclaimed by the Owner after the expiration of three years from the date such amounts
have become due and payable shall be reported and disposed of by the Registraz in accordance with
the applicable provisions of Texas law including, to the extent applicable, Title 6 of the Texas
Property Code, as amended.
10. Registration Transfer, and Exchange. So long as any Bonds remain outstanding, the
Registrar shall keep the Register at its principal payment office.in Minneapolis, Minnesota. Subject
to such reasonable regulations as it may prescribe, the Registrar shall provide for the registration and
transfer of Bonds in accordance with the terms of this Ordinance.
Each. Bond shall be transferable only upon the presentation and surrender thereof at the
principal payment office of the Registrar in Minneapolis, Minnesota, duly endorsed for transfer, or
accompanied by an assignment duly executed by the registered Owner or his authorized
representative inform satisfactory to the Registrar. Upon due presentation of any Bond for transfer,.
the Registrar shall authenticate and deliver in exchange therefor, within three Business Days after
such presentation, a new Bond or Bonds registered in the name of the transferee or transferees, in
authorized denominations and of the same maturity and aggregate principal amount and bearing.
interest at the same rate as the Bond or Bonds so presented.
All Bonds shall be exchangeable upon presentation and surrender thereof at the principal
payment office in Minneapolis, Minnesota, of the Registraz, for a Bond or Bonds of like maturity and
interest rate and in any authorized denomination, in an aggregate amount equal to the unpaid
principal amount of the Bond or Bonds presented for exchange. The Registrar shall be and is hereby
authorized to authenticate and deliver exchange Bonds in accordance with the provisions of this
Section. Each Bond delivered in accordance with this Section shall be entitled to the benefits and.
security of this Ordinance to the same extent as the Bond or Bonds in-lieu of which such Bond is
delivered.
The City or the Registraz may require the Owner of any Bond to pay a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with the transfer or
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Houston3559986v.4
exchange of such Bond. Any fee or charge of the Registraz for such transfer or exchange shall be
paid by the City.
11. Mutilated, Lost, or Stolen Bonds. Upon the presentation and surrender to the
Registrar of a mutilated Bond, the Registraz shall authenticate and deliver. in exchange therefor a
replacement Bond. of like maturity, interest rate, and principal amount, bearing a number not
contemporaneously outstanding. If any Bond is lost, appazently destroyed, or wrongfully taken, the
City, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge
that such Bond has been acquired by a bona fide purchaser, shall authorize and the Registrar shall
authenticate and deliver a replacement Bond of like maturity, interest rate and principal amount,
bearing a number not contemporaneously outstanding.
The City or the Registraz may require the Owner of a mutilated Bond to pay a sum sufficient
to cover any tax or other govemmental chazge that may be imposed in connection therewith and any
other expenses connected therewith, including the fees and expenses of the Registrar. The City or
the Registraz may require the Owner of a lost, appazently destroyed or wrongfully taken Bond, before
any replacement Bond is issued, to: - ,
(1) furnish to the City and the Registrar satisfactory evidence of the ownership of
and the circumstances of the loss, destruction or theft of such Bond;
(2) famish such security or indemnity as maybe required by the Registrar and
the City to save them harmless; . '
(3) pay all expenses and chazges in connection therewith, including, but not
limited to, printing costs, legal fees, fees of the Registraz and any tax or other.
governmental charge that maybe imposed; and '
(4) meet any other reasonable requirements of the City and the Registraz.
If, after the delivery of such replacement Bond, a bona fide purchaser of the original Bond in
lieu of which such replacement Bond was issued presents for payment such original Bond, the City
and the Registrar shall be entitled to recover such replacement Bond from the person to whom it was
delivered or any person taking therefrom, except a bona fide purchaser, and shall be.entitled to
recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or
expense incurred by the City or the Registrar in connection therewith.
If any such mutilated, lost, appazently destroyed or wrongfully taken Bond has become or is
about to become due and payable, the City in its discretion may, instead of issuing a replacement
Bond, authorize the Registraz to pay such Bond.
Each replacement Bond delivered in accordance with this Section shall be entitled to the
benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such
replacement Bond is delivered. ,
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12. Cancellation of Bonds. All Bonds paid in accordance with this Ordinance, and all
Bonds in lieu of which exchange Bonds or replacement. Bonds aze authenticated and. delivered in
accordance herewith, shall be cancelled and destroyed upon the making of proper records regazding
such payment. The Registrar shall furnish the City with appropriate. certificates of destructioh of
such Bonds.
13.
registered in the name of Cede & Co., as nominee of DTC.
(b) -With respect to Bonds registered in the name of Cede & Co., as nominee ofDTC', the
City and the Registrar shall have no responsibility or obligation to any DTC Participant or to any
person on behalf of whom such DTC Participant holds an interest in the Bonds, except as provided in
this Ordinance. Without limiting the immediately preceding sentence, the City and the Registraz
shall have no responsibility or obligation with respect to (i) the accuracy of the records ofDTC, Cede
& Co. or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to
any DTC Participant or any other person, other than an Owner, as shown on the Register, of any
notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any DTC
Participantor any other person, other than an Owner, as shown on the Register, of any amount with
respect to principal of, premium, if any, or interest on the Bonds. Notwithstanding any other
provision of this Ordinance to the contrary, the City and the Registrar shall be entitled to treat and
consider the person in whose name each Bond is registered in the Register as the absolute Owner of
such Bond for the purpose of payment of principal of and interest on the Bonds, for the purpose of
giving notices of redemption and other matters with respect to such Bond, for the purpose of
registering transfer with respect to such Bond, and for all other purposes whatsoever. The Registraz
shall pay all principal of, premium, if any, and interest on the Bonds only to or upon the order of the
respective Owners, as shown in the Register as provided in this Ordinance, or their respective
attorneys duly authorized in writing, and all such payments shall be valid and. effective to fully
satisfy and discharge the City's obligations with respect to payments of principal, premium, if any,
and interest on the Bonds to the extent of the sum or sums so paid, No person other than an Owner,
as shown in the Register, shall receive a Bond certificate evidencing the obligation of the City to
make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Registraz
of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede
& Co., and subject to the provisionsof this Ordinance with respect to interest checks being mailed to
the Owner of record as of the Record Date; the phrase "Cede & Co." in this Ordinance shall referto
such new nominee of DTC.
14. Successor Securities Depository' Transfer Outside Book-Entry Only System. In the
event that the City, in its sole discretion, determines that the beneficial owners of the Bonds should
be able to obtain certificated Bonds,,or in the event DTC discontinues the services described herein, .
the City shall (i) appoint a successor securities depository, qualified to act as such under Section
17(a) of the Securities and Exchange Act of i 934, as amended, riotify'DTC and DTC Participants, as .
identified by DTC, of the appointment of such successor securities depository and transfer one or
more separate Bonds to such successor securities depository or (ii) notify DTC and.DTC
Participants, as identified by DTC, of the availability through DTC of Bonds and transfer one or
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Book-Entry Only System. (a) The Initial Bond shall be registered in the name.of
'.Except as provided in Section 14 hereof, all-other Bonds shall be
Houston 3569986v.4
more sepazate Bonds to DTC Participants having Bonds credited to their DTC accounts, as identified
by DTC. In such event, the Bonds shall not longer be restricted to being registered in the Register in
the name of Cede & Co.,. as nominee of DTC, but maybe registered in the name of the successor
securities depository; or its nominee, or in whatever name or names Owners transferring or
exchanging Bonds shall designate, in accordance with the provisions of this Ordinance.
15. Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to
the contrary, so long as any Bonds aze registered in the name of Cede & Co., as nominee of DTC, all
payments with respect to principal of, premium, if any, and interest on such Bonds, and all notices
with respect to such Bonds, shall be made and given, respectively, in the manner provided in the
Blanket Letter of Representations.
16. Optional land Mandatoryl Redemption; Defeasance. -The Bonds, are subject to
optional [and mandatory] redemption as set forth in the Form of Bonds in this Ordinance.
Principal amounts maybe redeemed only in integral multiples of $5,000. If a Bond subject to
redemption is in a denomination larger. than $5,000, a portion of such Bond maybe redeemed, but
only in integral multiples of $5,000. Upon surrender of any Bond for redemption in part, the
Registraz, in accordance with Section 10 hereof, shall authenticate and deliver in exchange therefor a
Bond or Bonds of like maturity and interest rate in an aggregate principal amount equal to the
unredeemed portion of the Bond so surrendered.
Notice of any redemption identifying the Bonds to be redeemed in whole or in part shall. be
given by the Registrar at least thirty days-prior to the date fixed for redemption by sending written
notice by first class mail to the Owner of each Bond to be redeemed in whole or in part at the address
shown on the Register. Such notices shall state the redemption date, the redemption price, the place
at which Borids are to be surrendered for payment and, if less than all Bonds outstanding of a
particulaz maturity are to be redeemed, the numbers ofthe Bonds or portions thereof of such maturity
to be redeemed. Any notice given as provided in this Section shall be conclusively presumed to have
been duly given, whether or not the Owner receives such notice. By the date fixed for redemption,
due provision shall be made with the Registrar for payment of the redemption price of the Bonds or
portions thereof to be redeemed, plus accrued interest to the date fixed for redemption. When Bonds
have been called for redemption in whole or in part and due provision has been made to redeem same
as herein provided, the Bonds or portions thereof so redeemed shall no longer be regazded as
outstanding except for the purpose of receiving payment solely from the funds so provided for
redemption, and the rights of the Owners to collect interest which would otherwise accrue after the
redemption date on any Bond or portion thereof called for redemption shall terminate on the date
fixed for redemption.
The Bonds may be discharged or defeased in any manner now or hereafter permitted by law.
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17. Forms. The form of the Bonds, including the form of the Registrar's Authentication
Certificate, the form of Assigrunent, and the form of Registration Certificate of the Comptroller,
which shall be attached or affixed to the Bonds initially issued, shall be, respectively, substantially as
follows, with such additions, deletions and variations as may be necessary or desirable and not
prohibited by this Ordinance, including any legend regazding bond insurance if such insurance is
obtained by the Purchases:
(a) Fonn of Bonds.
REGISTERED
NUMBER
INTEREST RATE:
REGISTERED OWNER:.
PRINCIPAL AMOUNT:
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF JEFFERSON
CITY OF PORT ARTHUR, TEXAS
GENERAL OBLIGATION BOND
SERIES 2008
MATURITY DATE: `, ISSUE DATE:
February 15, 20_ April 15, 2008
REGISTERED
DENOMINATION
CUSIP:
DOLLARS
The City of Port Arthur, Texas (the "City") promises to pay to the registered owner identified
above, or registered assigns, on the maturity date specified above, upon presentation and surrender of
this Bond to Wells Fargo Bank, N.A. (the "Registrar"), at its principal payment office in
Minneapolis, Minnesota, the principal amount identified'above, payable in any coin or currency of
the United States of America which on the date of payment of such principal is legal tender for the
payment of debts due the United States of America, and to pay interest thereon at the rate shown
above, calculated on the basis of a 360-day yeaz of twelve 30-day months, from the later of Apri115,
2008, or the most recent interest payment date to which interest has been paid or duly provided for.
Interest on this Bond is payable by check on February 15, 2009, and semiannually thereafter on each
August 15 and February 15, mailed to the registered owner as shown on the books of registration
kept by the Registrar as of the 15th day of the month next preceding such interest payment date.
THI&BOND is one of a duly authorized issue of Bonds, aggregating $9,000,000 (the
"Bonds"),issued for construction, acquisition and improvement of water facilities; public safety, fire
station. and police department facilities; drainage improvements; streets, sidewalks and related
drainage improvements; streets, sidewalks and related drainage improvements at the Port Arthur
Business Pazk; and city pazks.and recreational facilities, under and in strict conformity with the
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Constitution and laws of the State of Texas and by authority of an election held within the City on
November 6, 2007, and pursuant to an ordinance adopted by the City Council (the "Ordinance"),
which Ordinance is of record in the official minutes of the City Council.
THE CITY RESERVES THE RIGHT to redeem Bonds maturing on and after February 15,
2019, prior to their scheduled maturities, in whole or from time to time in part, in integral multiples
of $5,000, on February 15, 2018, or any date thereafter at par plus accrued interest on the principal
amounts called for redemption to the date fixed for redemption. Reference is made to the Ordinance
for complete details concerning the manner of redeeming the Bonds.
[THE BONDS maturing in the years 20_ and 20_ (the "Term Bonds") are subject to
mandatory redemption prior to maturity in the amounts and on the dates set out below, at a price
equal to the principal amount to be redeemed plus accrued interest to the redemption date:
TERM BONDS MATURING IN THE YEAR 20
Mandatory Redemption Dates Principal Amount
February 15, 20_
February 15, 20_ (maturity)
TERM BONDS MATURING IN THE YEAR 20
Mandatory Redemption Dates Principal Amount.
February 15, 20_ $
February 15, 20_ (maturity) $
THE PARTICULAR TERM BONDS to be redeemed shall be selected bythe Registrar by lot
or other customary random selection method, on or before 7anuary 15 of each year in which Term
Bonds aze to be mandatorily redeemed. The principal amount of Term Bonds to be mandatorily
redeemed in each yeaz shall be reduced by the principal amount of such Term Bonds that have been
acquired by the District and delivered to the Registrar for cancellation or have been optionally
redeemed and which have not been made the basis for a previous reduction.]
NOTICE OF ANY REDEMPTION shall be given at least thirty (30) days prior to the. date
fixed for redemption by first class mail, addressed to the registered owners of each Bond to be
redeemed in whole or in part at the address shown on the books of registration kept by the Registraz.
When Bonds or portions thereof have been called for redemption, and due provision has been made
to redeem the same, the amounts so redeemed shall be payable solely from the funds provided for
redemption, and interest which would otherwise accrue on the amounts called forredemption shall
terminate on the date fixed for redemption.
THIS BOND is transferable only upon presentation and surrender at the principal payment.
office of the Registrar in Minneapolis, Minnesota, duly endorsed for transfer or accompanied by an
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assignment duly executed by the registered owner or his authorized representative, subject to the
terms and conditions of the Ordinance. -
THE BONDS are exchangeable at the principal payment office of the Registrar in
Minneapolis, Minnesota, for Bonds in the principal amount of $5,000 or any integral multiple
thereof, subject to the terms and conditions of the Ordinance.
THIS BOND shall'not be valid or obligatory for any purpose or be entitled to any benefit
under the Ordinance unless this Bond is either (i) registered by the Comptroller of Public Accounts
of the State of Texas by registration certificate attached or affixed hereto or (ii) authenticated by the
Registrar by due execution of the authentication certificate endorsed hereon.
THE REGISTERED OWNER of this Bond, by acceptance hereof, aclmowledges and agrees
to be bound by all the terms and conditions of the Ordinance.
THE CITY has covenanted in the Ordinance that it will at all times provide a legally qualified
registrar for the Bonds and will cause notice of any change of registraz to be mailed to each
registered owner.
IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly
issued and delivered; that all acts, conditions and things required or proper to be performed, to exist
and to be done precedent to or in the issuance and delivery of this Bond have been performed, exist
and have been done in accordance with law; and that annual ad valorem taxes, within the limits
prescribed by law, sufficient to provide for the payment of the interest on and principal of this Bond,
as such interest comes due and such principal matures, have been levied and ordered to be levied
against all taxable property in the City, and have been pledged irrevocably for such payment.
IN WITNESS WHEREOF, this Bond has been signed with the manual or facsimile signature
of the Mayor of the City and countersigned with the manual or facsimile signature of the City
Secretary of the City, and the official seal of the City has been duly impressed, or placed in facsimile,
on this Bond.
(AUTHENTICATION (SEAL) , CITY OF PORT ARTHUR, TEXAS
CERTIFICATE)
Mayor
City Secretary
(b) Form of Registration Certificate of Comptroller.
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
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Houston 3559986v.4
I hereby certify that this Bond has been examined, certified as to validity, and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL this
(SEAL)
Comptroller of Public Accounts
of the State of Texas
(c) Fonn of Registrar's Authentication Certificate.
AUTHENTICATION CERTIFICATE
'' _ It is hereby certified that this Bond has been delivered pursuant to the
Ordinance described in the text of this Bond.
Wells Fargo Bank, N.A.
As Paying Agent/Registrar
By
Authorized Signature
Date of Authentication
(d) 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 Bond and all rights thereunder, and hereby irrevocably constitutes and appoints r
attorney to transfer said Bond on the books kept for registration thereof, with full power of
substitution in the premises.
DATED:
Signature Guaranteed: ,
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Houston 3559986v.4
c
NOTICE: Signature must be guaranteed
by a member firm of the New York Stock
Exchange or a commercial bank or trust
company.
(e) Form of Statement of Insurance.
Registered Owner
NOTICE: The signature above must
correspond to the name of the registered
owner as shown on the face of this Bond in
every particulaz; without any alteration,
enlargement or change whatsoever.
[TO COME]
(f) The Initial Bond shall be in the form set forth in paragraphs (a), (b) and (d) of this
Section, except for the following alterations:
(i) immediately under the name of the Bond, the headings
"INTEREST RATE" and "MATURITY DATE" shall both be
completed with the words "As Shown Below" and the word "CUSII"'
deleted;
(ii) in the fast paragraph of the Bond, the words "on the maturity
.date specified above" and "at the rate shown above" shall be deleted
and the following shall be inserted at the end of the first sentence "...,
with such principal to be paid in installments on February 15 in each
_ of the yeazs and in the principal amounts identified in the following
schedule and with such installments bearing interest at the per annum
rates set fiirth in the following schedule:
[Information to be inserted from schedule in Section 4]
(iii) the Initial Bond shall be numbered I-1.
18. CUSIP Numbers; Bond Insurance. CUS1P Numbers may be printed on the Bonds, but
errors or omissions in the printing of such numbers shall have no effect on the validity of the Bonds:'
If bond insurance is obtained by the Purchaser; the Bonds may bear an appropriate legend as
provided by the insurer..
{ 19. Debt Service Fund; Tax Levy. There is hereby established a sepazate fund of the City
to be known as the City of Port Arthur, Texas, General Obligation Bonds, Series 2008 Debt Service
Fund (the "Debt Service Fund"), which shall be kept separate and apart from all other funds of the
City. The proceeds from all taxes levied, assessed and collected for and on account of the Bonds
authorized bythis Ordinance shall be deposited, as collected, in the Debt Service Fund. -While the
Bonds or any part of the principal thereof or interest thereon remainoutstanding and unpaid, there is
hereby levied and there shall be annually assessed and collected in due time, form and manner, and at
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Houston 3559986x.4
the same time as other City taxes gaze assessed, levied and collected, in each year, a continuing direct.
annual ad valorem tax, within the limits prescribed by law, upon all taxable property in the City,
sufficient to pay the current interest on the Bonds as the same becomes due and to provide and.
maintain a sinking fund of not less than two percent of the principal amount of the Bonds or the
amount required to pay each installment of principal of the Bonds as the same matures, whichever is
greater, full allowance being made for delinquencies and costs of collection, and said taxes are
hereby irrevocably pledged to the payment of the interest on and principal of the Bonds and to no
other purpose.
20. Application of Chanter 1208, Govemment Code. Chapter 1208, Govemment Code,
applies to the issuance of the Bonds and the pledge ofthe taxes granted by the City under Section 19
of this Ordinance, and such pledge is therefore valid, effective and perfected.. If Texas law is
amended at any time while the Bonds are outstanding and unpaid such that the pledge of the taxes
granted by the City under Section 19 of this Ordinance is to be subject to the filing requirements of
Chapter 9, Business & Commerce Code, then in order to preserve to the registered owners of the
Bonds the perfection of the security interest in said pledge,. the City agrees to take such measures as
it determines are reasonable and necessary under Texas law to comply with the applicable provisions
of Chapter 9, Business & Commerce Code and enable a filing to perfect the security interest in said
pledge to occur. .
21. Further Proceedings. After the Bonds to be initially issued have been executed, it
shall be the duty of the Mayor or Mayor Pro Tem and otherappropriate officials and agents of the
City to deliver the Bonds to be initially issued and all pertinent records-and proceedings to the
Attomey General, for examination and approval. After the Bonds to be initially issued have been
approved by the Attomey General, they shall be delivered to the Comptroller for registration. Upon
registration of the Bonds to be initially issued, the Comptroller (or the Comptroller's bond clerk or an
assistant bond clerk lawfully designated in writing to act for the Comptroller) shall manually sign the
Comptroller's Registration Certificate prescribed herein and the seal of said Comptroller shall be
impressed, orplaced in facsimile, thereon.
22. Sale. The sale and delivery of the Bonds to (the
"Purchaser") at a price of paz, plus accmed interest thereon to date of delivery, is herebyauthorized,
approved, ratified and confirmed, subject to the approving opinion as to the.legality of the Bonds of
the Attomey General of the State of Texas, and of Vinson & Elkins L.L.P., Houston, Texas, bond
counsel. It is hereby found and declared that the Bonds were sold at public sale-and that the bid of
the Purchaser was the best bid received by the City.
23. Federal Income Tax Inclusion.
(a) General Tax Covenant. The City intends that the interest on the Bonds shall be
excludable from gross income for purposes of federal income taxation pursuant to sections 103 and
141 through 150 of the Internal Revenue Code of 1986, as amended (the "Code), and applicable
Income Tax Regulations (the "Regulations"). The City covenants and agrees not to take any action,
or knowingly omit to take any action within its control that, if taken or omitted, respectively, would
cause the interest on the Bonds to be includable in gross income, as defined in section. 61 of the
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Houston 3559986v.4
Code, for federaPincome tax purposes. In particular, the City covenants and agrees to comply with
each requirement of this Section; provided, however, that the City shall not be required to comply
with any particulaz requirement of this Section if the City has received an opinion of nationally
recognized bond counsel ("Counsel's Opinion") that such noncompliance will not adversely affect
the exclusion from gross income for federal income tax purposes of interest on the Bonds or if the
City has received a Counsel's Opinion to the effect that compliance with some other requirement set
forth in this Section will satisfy the applicable requirements of the Code and Regulations, in which
case compliance with such other requirement specified in such Counsel's Opinion shall constitute
compliance with the corresponding requirement specified in this Section.
(b) No Private Use or Payment and No Private Loan Financing. The City shall certify,
through an authorized officer, employee or-agent that based upon all facts and estimates known or.
reasonably expected to be in existence on the date the Bonds are delivered, thatthe proceeds of the
Bonds will not be used in a manner that would cause the Bonds to be "private activity bonds" within
the meaning ofsection 141 ofthe Code and the Regulations promulgated thereunder. Moreover, the
City covenants and agrees that it will make such use of the proceeds of the Bonds including interest
or other investment income derived from Bond proceeds, regulate the use of property financed,
directly or indirectly, with such proceeds, and take such other and further action as may be required
so that the Bonds will-not be "private activity bonds" within the meaning of section 141 of the Code
and the Regulations promulgated thereunder.
(c) No Federal Guarantee. The City covenants and agrees not take any action, or
knowingly omit to take any action within its control, that, if taken or omitted, respectively, would
cause the Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Code and
the applicable Regulations thereunder, except as permitted by section 149(b)(3) of the Code and such
Regulations.
(d) No Hedge Bonds. The City covenants and agrees that it has not and will-not take any
action, and has not knowingly omitted and will not knowingly omit to take any action, within its
control, that, if taken or omitted, respectively, would cause the Bonds to be "hedge bonds" within the
meaning of section 149(g) of the Code and the applicable Regulations thereunder.
(e) No Arbitrage. The City shall certify, through an authorized officer, employee or agent
that based upon all facts and estimates known or reasonably expected to be in existence on the date
the Bonds are delivered, the City will reasonably expect that the proceeds of the Bonds will not be
used in a manner that would cause the Bonds to be "azbitrage bonds" within the meaning.of section
148(a) of the Code and the applicable Regulations promulgated thereunder. Moreover, the City
covenants and agrees that it will make such use of the proceeds of the Bonds including interest or
other investment income derived from Bond proceeds, regulate investments of proceeds of the
Bonds, and take such other and further action as may be required so that the Bonds will not be
"arbitrage bonds" within the meaning of section 148(a) of the Code and the applicable Regulations
promulgated thereunder.
(f) Arbitrage Rebate. If the City does not qualify for an exception to the requirements of
section 148(f) of the Code relating. to the required rebate to the United States, the City will take all
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Houston 3559986x.4 -
necessary steps to comply with the requirement that certain amounts earned by the City on the
investment of the "gross proceeds" of the Bonds (within the meaning of section 148(f)(6)(B) of the
Code), be rebated to the federal government. Specifically, the City will (i) maintain records
regarding the investment of the gross proceeds of the Bonds as may be required to calculate the
amount earned on the investment of the gross proceeds of the Bonds separately from records of
amounts on deposit in the funds and accounts of the City allocable to other bond issues ofthe City or
moneys which do not represent gross proceeds of any bonds of the City, (ii) calculate at such times
as are required'by applicable Regulations, the amount earned from the investment of the gross
proceeds of the Bonds which is required to be rebated to the federal government, and (iii) pay, not
less often than every fifth anniversary date of the delivery of the Bonds or on such other dates as may
be permitted under applicable Regulations, all amounts required to be rebated to the federal
government. Further, the City will not indirectly pay any amount otherwise payable to the federal
government pursuant,to the foregoing requirements to any person other than the federal government
by entering into any investment arrangement with respect to the gross proceeds of the Bonds that
might result in a reduction in the amount required to be paid to the federal government because such
arrangement results in a smaller profit or a larger loss than would have resulted if the arrangement
had been. at arm's length and had the yield on the issue not been relevant to either party.
(g) Information Reporting. The City covenants and agrees to file or cause to be filed with
the Secretary of the Treasury, not later than the 15th day of the second calendar month after the close
of the calendar quarter in which the Bonds are issued, an information statement concerning the
Bonds, all under and in accordance with section 149(e) of the Code and the applicable Regulations
promulgated thereunder.
(h) Continuing Obli ag tion. Notwithstanding any other provision of this Ordinance, the
City's obligations under the covenants and provisions of this Section shall survive the defeasance and
discharge of the Bonds,
24. Use of Proceeds. Proceeds from the sale of the Bonds shall; promptly upon receipt by
the City, be applied as follows:
(a) Accrued interest on the Bonds shall be deposited into the Debt
Service Fund; and
(b) :The remaining proceeds of the Bonds shall be used for the purposes
described in Section 2 of this Ordinance and for paying the costs of
issuance of the Bonds. Any bond proceeds remaining after
accomplishing the purposes set out in Section 2 and paying costs of
issuance, plus earnings on investments of such proceeds, shall be
transferred to the Debt Service Fund `
25. Official Statement: -The City ratifies and confines its prior approval of the form and
content of the Preliminary Official Statementprepared in the initial offering and sale of the Bonds
and. hereby authorizes the preparation of a final Official Statement reflecting the. terms of the
Purchaser's bid and other relevant information. The use of such Official Statement in the reoffering
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Houston 3559986v.4
of the Bonds by the Purchaser is hereby approved and authorized. The proper officials of the City
aze hereby authorized to execute and deliver a certificate pertaining to such Official Statement as
prescribed therein, dated as of the date of payment for and delivery of the Bonds.
26. Continuing Disclosure Undertaking. (a) Annual Reports. The City shall provide
annually to each NRMSIIi and the SID, within six months after the end of each fiscal year, financial
information and operating data with respect to the City of the general type included imthe final.
Official Statement authorized by Section 25 of this Ordinance underTables numbered 1 through 6
and 8 through 15, and in Appendix B. The information to be provided will include audited financial
statements, if the City commissions an audit and it is completed by the required time. If audited
financial statements are not available by the required time, the City will provide unaudited financial
statements at the required time and audited financial statements when and if they become available.
Ariy finaricial statements so to be provided shall be prepared in accordance with the accounting.
principles described in Appendix B to the Official Statement, or such other accounting principles as
the City maybe required to employ from time to time pursuant to State law or regulation.
If the City changes its fiscal year, it will notify each NRMSIR and the SID of the change (and
of the date of the new fiscal yeaz end) prior to the next date by which the Ciry 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 maybe
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 each NRMSIR and the SID or filed with the SEC.
(b) Material Event Notices. The City shall notify the SID and either each NRMSIR or the
MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event is
material within the meaning of the federal securities laws:
A. Principal and interest payment delinquencies;
B. Non-payment related defaults;
C. Unscheduled draws on debt service reserves reflecting financial
difficulties;
D. Unscheduled draws on credit enhancements reflecting financial
difficulties;
E. Substitution of credit or liquidity providers, or their failure to
perform; '
F. Adverse tax opinions or events affecting the tax-exempt status of the
Bonds;
G. Modifications to rights of holders of the Bonds;
H. Bond calls;
I. Defeasances;.
7. Release, substitution, oi• sale of property securing repayment of the
Bonds; and
K. Rating changes. " '
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Aouston 3559986v.4
The City shall notify the SID and either each NRIvISIR or the MSRB, in a timely manner, of
any failure by the City to provide financial information or operating data in accordance with Section
26(a) of this Ordinance by the time required. by such Section.
(c) Limitations, Disclaimers, and Amendments. The City shall be obligated to observe
and perform the covenants specified in this Section for so long as, but only for so long as, the City
remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that.
the City in any event will give notice of any deposit made in accordance with Texas law that causes
Bonds no longer to be outstanding.
The provisions of this Section are for the sole benefit of the holders and beneficial owners of
the Bonds, and nothing in this Section, 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. inforiation, operating data, financial statements,. and notices which it has expressly
agreed to provide pursuant to this Section 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 Section. or otherwise, except as expressly provided herein. The City does not make any
representation or warranty concerning such information or its usefulness to a decision to invest in or
sell Bonds at any future date.
UNDER NO CII2CUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT,
FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY,
WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT
SPECIFIED IN THIS SECTION, 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 Section shall
comprise a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section 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 Section maybe amended by the City from time to time to adopt to
changed circumstances thaYanse from a change in legal requirements, change in law, or change in
the identity,. nature,.status or type of operations of 'the City, but only if (1),the agreement, as
amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of
the Bonds incompliance with the Rule, taking into account any amendments or interpretations ofthe
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 of the outstanding Bonds consent to such
amendment, or (b) a person unaffiliated with the City (such as nationally recognized bond counsel),
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Houston 3559986v.4
determines that the amendment will not materially impair the interests of theho]ders and beneficial
owners of the Bonds. The City may also amend or repeal the~provisions ofthis continuing disclosure
agreement 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 aze invalid, but only if and to the extent
that the provisions of this sentence would not prevent an underwriter from lawfully purchasing or
selling Bonds in the primary offering of the Bonds. If any such amendment is made, the City will
include in its next annual update an explanation in narrative form of the reasons for the change and
its impact on the type of operating data or financial infonnation being provided.
27. Re istraz. The form of agreement setting forth the duties of the Registrar is hereby
approved and attached hereto as Exhibit A, and the appropriate officials of the City are hereby
authorized to execute such agreement for and on behalf of the City.
28. Further Proceedines. The Mayor, the Mayor Pro Tem, City Secretary and other
appropriate officials of the City are hereby authorized and directed to do any and all thingsnecessary
and/or convenient to carry out the terms and purposes of this Ordinance.
29. Partial Invalidity. 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..
30. Open Meeting. The meeting at which this Ordinance was adopted was open toahe
public, and public notice of the time, place and purpose of said meeting, was given, all as required by
the Texas Open Meetings Act.
31. Effective Date. This Ordinance shall take effect immediately from and after its
passage by the City Council of the City of Port. Arthur.
_20_.
Houston 3559986v.4 ~.
PASSED AND APPROVED this 8th day of April, 2008, at a Regular Meeting of the City
Council of the City of Port Arthur, Texas by the following vote:
AYES:
ATTEST:
/s/ Terre Hanks
Terri Hanks, City Secretary
APPROVED AS TO FORM:
/s/ Mark T. Sokolow ~ ~~`~t+'~~
Mark T. Sokolow, City Attorney
APPROVED FOR ADMINISTRATION:
/s/ Harvey Robinson
,Harvey Robinson, Assistant City Manager
/s/ Rebecca R. Underhill
Rebecca R. Underhill, Finance Director
/s/ Wendolynn M. Montoya
Vinson & Elkins Representative
/s/ Debris "Bobbie" Prince
Debris Prince, Mayor
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Aouston 3559986v.4 -
EXHIBIY ~~A"
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT (this "Agreement"), is entered into as of April 8, 2008, by and
between the City of Port Arthur, Texas (the "Issuer"), and Wells Fazgo Bank, N.A. (the "$ank").
RECITALS OF THE ISSUER
The Issuer has duly authorized and provided for the issuance of its bonds, entitled "City
of Port Arthur, Texas, General Obligation Bonds, Series 2008" (the "Bonds") in an aggregate
principal amount of $9;000,000 to be issued as fully registered bonds;
All things necessary to make the Bonds 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 Bonds, in
accordance with the terms thereof, and under which the Bank will act as Registrar for the Bonds;
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, Apnointment.
The Issuer hereby appoints the Bank to act as Paying Agent with respect to the Bonds, to
pay to the Registered Owners of the Bonds in accordance with the terms -and provisions of this
Agreement and the Bond Ordinance, the principal of, redemption premium (if any), and interest,
on all or any of the Bonds. .
The Issuer hereby appoints the Bank as Registraz with respect to the Bonds.
The Bank hereby accepts its appointment, and agrees to act as Paying Agent and
Registrar.
Houston 3562058x.1
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 famished 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.
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 Wells Fargo Bank, N.A., a.national bank duly organized and existing
under the laws of the United States of America.
"Bond" or "Bonds" means any one or all of the "$9,000,0000 City of Port Arthur, Texas,
General Obligation Bonds, Series 2008."
"Bond Ordinance" means the ordinance of the.Issuer approved April 8, 2008, pursuant to
which the Bonds are issued.
"Issuer" means the City of Port Arthur, Texas.
"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. govemment 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 Bond Ordinance.
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Houston 3562058v.1
ARTICLE THREE
DUTIES OF THE BANK
Section 3.01. Initial Delivery of Bonds.
The Bonds will be initially registered and delivered to the purchaser designated by the
Issuer as set forth in the.Bond 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 Bonds initially delivered foi• Bonds of authorized
denominations, registered in accordance with the instructions in such request and the Bond
Ordinance.
Section 3.02. Duties of Paving 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 Bond in accordance with the provisions of the
Bond Ordinance.
Section 3.03. Duties of Re isg fraz.
The Bank shall provide for the proper registration of the Bonds and the exchange;
replacement and registration of transfer of the Bonds, in accordance with the provisions of the
Bond Order. 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 3.04. Unauthenticated Bonds..
The .Issuer shall provide an adequate inventory of unauthenticated Bonds to facilitate
transfers. The Bank covenants that it will maintain such unauthenticated Bonds in safekeeping
and will' use reasonable caze in maintaining such Bonds 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 registraz, or which it maintains for its own bonds. "
Section 3.05. Reports.
The Bank will provide the Issuer reports upon request; which reports will describe in
reasonable detail all. transactions pertaining to the Bonds 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 forni.'
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 '
. _3_
Houston 3562058v.1
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.
Section 3.06. Cancelled Borids.
All Bonds 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 Bonds previously
authenticated and delivered which the Issuer may have acquired in any manner whatsoever, and
all Bonds so delivered shall be promptly cancelled by the Bank. All cancelled Bonds held by the
Bank shall be destroyed and evidence of such destruction famished to the Issuer.
Section 3.07. 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, instmment, 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 Bond, but is protected in acting upon
receipt of a Bond 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.
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Houston 3562058v-1
'Section 3.08. Monev Held by Bank:
The Bank shall hold the Debt Service Fund for the Bonds and receive annual transfers
from the Issuer into such fend, all in accordance with the Provisions of the Bond Ordinance.
Money held. by the Bank hereunder shall be held in trust for the benefit of the Registered Owners
of the Bonds. '.
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.
Any money deposited. with. the Bank for the payment of the principal, redemption
premium (if any) or interest on any Bond 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. The Bank
shall have not liability to the Registered Owners of the Bonds by virtue of actions taken in
compliance with the foregoing provision.
Section 3.09. 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 3.10. Interoleader.
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 either the Bank's office in Texas or 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 fiu-ther agree that the Bank has the right to file a Bill of
Interpleader in any court of competent jurisdiction within the State of Texas to determine the
rights of any Person claiming any interest herein.
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Houston 3562058v. i
ARTICLE FOUR
MISCELLANEOUS PROVISIONS
Section 4.01. Mav Own Bonds.
The Bank, in its individual or any other capacity, may become the owner or pledgee of
Bonds with the same rights it would have if it were not the Paying Agent and Registrar for the
Bonds.
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. Assi ng ment.
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 famished to the Issuer or the Bank shall be mailed or
delivered to the Issuer or the Bank, respectively, at the addresses 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. ,
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Houston 3562058v.1
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. Bond Ordinance Governs Conflicts.
This Agreement and the Bond Ordinance constitute the entire agreement between the
parties hereto relative to the Barik acting as Paying Agent and Registrar and if any conflict exists
between this Agreement and the Bond Ordinance, the Bond Ordinance shall govern.
Section 4.10. Term and Termination.
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, Bonds and all books and records
pertaining to the Bank's role as Paying Agent and Registrar with respect to the Bonds, 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and yeaz first above written.
7
Houston 3562058v.1
CITY OF PORT ARTHUR, TEXAS
By
Mayor
Address: 444 4th Street -
Port Arthur, TX 77640
ATTEST:
Ciry Secretary
Houston 3562058v.I
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WELLS FARGO BANK, N.A.
Title: Agent
Address: 400 W. 15`h Street, 15` Floor
Austin, TX 78701