R2004-211 12-20-04RESOLUTION NO. R2004-211
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS, AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO
ENTER INTO A DEVELOPMENT AGREEMENT WITH THE PEARLAND
ECONOMIC DEVELOPMENT CORPORATION AND POAG & McEWEN
LIFESTYLE CENTERS-HOUSTON, LLC, FOR DEVELOPMENT OF A
LIFESTYLE RETAIL CENTER.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That certain Development Agreement by and between the City of
Pearland, the Peadand Economic Development Corporation and Poag & McEwen Lifestyle
Centers-Houston, LLC, a copy of which is attached hereto as Exhibit "A" and made a part
hereof for all purposes, is hereby authorized and approved.
Section 2. That the City Manager or his designee is hereby authorized to execute
and the City Secretary to attest a Development Agreement with the Pearland Economic
Development Corporation and Poag & McEwen Lifestyle Centers-Houston, LLC for
development of a Lifestyle Retail Center.
PASSED, APPROVED and ADOPTED this the 20th
A.D., 2004.
~dayof December
TOM REID
MAYOR
~TTEST:
~C/ITY S F:C2'RETARY
APPROVED AS TO FORM:
DARRIN M. COKER
CITY ATTORNEY
Exhibit "A"
Resolution R2004-211
DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (this "Agreement") is .made and entered
into as of December 20, 2004 (the "Effective Date"), by and among the CITY OF
PEARLAND, TEXAS, a home rule municipality located in the counties of Brazoria,
Harris, and Fort Bend, Texas (the "City"), the PEARLAND ECONOMIC
DEVELOPMENT CORPORATION, an economic development corporation created
under Section 4B of Art. 5190.6, TEX. REV. CIVIL STAT., aS amended (the "EDC"), and
POAG & McEWEN LIFESTYLE CENTERS--HOUSTON, LLC, a Delaware limited
liability company (the "Developer").
RECITALS
A. Capitalized terms used in these recitals are defined in Article I, below.
The Developer is the holder of the right to purchase and develop the Tract, a 127-acre
tract of land located within the city limits of the City in Harris County at the southwest
corner of the intersection of State Highway 288 and the Sam Houston Tollroad, Beltway
8.
B. The Developer desires to purchase and develop, the Tract to include an
upscale commercial and retail development with quality retail tenants comprising
approximately 700,000 to 800,000 square feet of retail space, which will benefit the City
by generating significant property taxes and other revenues, as well as creating
numerous permanent jobs and drawing additional retail development to the Project and
surrounding area; however, there are significant costs associated with construction and
development of the Project and providing Public Infrastructure for the Project.
C. The City and the EDC desire that the Tract be developed to promote new
and expanded business development in the area of the Project and the City, to assist
with the creation and retention of jobs to maximize public revenues and to provide a
major amenity for the benefit of City residents and recognize that, in the absence of
public assistance, the Project would not occur solely through private investment in the
foreseeable future, and would not consist of a high-end commercial retail development
as contemplated by the Parties, thereby denying the benefits to the City and the EDC as
provided herein.
D. To facilitate the development of the Tract, and subject to and in
accordance with the terms of this Agreement and the limitations hereinafter stated,
(i) the Developer, the EDC and City have agreed to cooperate in the
legislative creation of the District, a special purpose municipal management district,
on the Tract, which will dedicate its revenues to the Project and assist in the
development of Public Infrastructure as detailed herein;
(ii) the Developer has agreed to directly finance, design, and construct the
Project and certain Public Infrastructure to serve the Project and convey the Public
Infrastructure, plus any required easements, without charge or encumbrance to the
City, the District or other public entity, as agreed herein; and
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(iii) the City and the EDC will collect their respective Sales Taxes within the
Project and contribute certain of such revenues to the District as provided in this
Agreement.
E. The City and the EDC, after due and careful consideration, have
concluded that the development of the Tract and Project as provided for herein will
further the growth of the City, improve the environment of the City, increase the
assessed valuation of the real estate situated within the City, foster increased
economic activity within and outside the City, increase employment opportunities
within the City, upgrade Public Infrastructure within the Project, and otherwise be in
the best interests of the City by furthering the health, safety, and welfare of its
residents and taxpayers, and that entering into this Agreement is necessary and
convenient to achieve such purposes.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:
Article I
Definitions: incorporation of recitals
1.1. Definitions. Capitalized terms shall have the meanings provided for
them in this Section, unless otherwise defined or the context clearly requires otherwise.
City Commitment is defined in Section 5.1.
City Sales Taxes means the City sales and use taxes generated solely from within
the Project and remitted to the City by the Comptroller of the State of Texas.
District means a legislatively created municipal management district described in
Article IV, including, when applicable, a municipal utility district created in lieu thereof
in accordance with Section 4.5.
EDC Commitment is defined in Section 6.1.
EDC Sales Taxes means the EDC sales and use taxes generated solely from within
the Project and remitted to the EDC by the Comptroller of the State of Texas.
Letter of Acceptance means a certificate of the City certifying the completion of a
portion of the Public Infrastructure constructed by or under the supervision of the
Developer or the District in accordance with the applicable plans and regulations.
Project means a high-end retail, commercial development to be constructed on
the Tract, including not less than 700,000 square feet of high-end retail space. The
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Project may also include additional types of like-quality development. All such
development shall be consistent with the City's comprehensive land use plan and
applicable City zoning requirements.
Public Infrastructure means the water, wastewater, drainage and detention
associated with public streets and roadways, streets and roadways, landscaping and
lighting within public rights-of-way, utilities, and other public infrastructure and public
rights of way serving the Project, as described on Exhibit A attached hereto.
State Comptroller means the Comptroller of Public Accounts for the State of Texas,
or such other agency responsible for collecting sales and use taxes within the State and
remitting them to the City and the EDC.
Tract means that certain approximately 127 acres comprised of two tracts of land
described in Exhibit B attached hereto, as well as such other land within the City as the
Parties may agree to add to the District from time to time in accordance with Section
4.4.
Party or Parties means all or any of the City, the EDC, and the Developer, as
applicable.
1.2. Recitals incorporated. The representations, covenants and recitations
set forth in the recitals to this Agreement are material to this Agreement and are
hereby found and agreed to be true and correct, and are incorporated into and made a
part hereof as though they were fully set forth in this Article.
1.3. Singular and plural; gender. Words used herein in the singular, where
the context so permits, also include the plural and vice versa. The definitions of words
in the singular herein also apply to such words when used in the plural where the
context so permits and vice versa. Likewise, any masculine references shall include the
feminine, and vice versa.
II. Representations
2.1. Representations of the City. The City hereby represents that:
a. It is a duly authorized, created and existing home-rule municipality
in good standing under the laws of the State and is duly qualified and authorized to
carry on the governmental functions and operations as contemplated by this
Agreement.
b. It has the power, authority and legal right to enter into and perform
this Agreement and the execution, delivery and performance hereof (i) have been duly
authoriZed, (ii) will not, to the best of its knowledge, violate any applicable judgment,
48755_6 3
order, law or regulation, and (iii) does not constitute a default under, or result in the
creation of, any lien, charge, encumbrance or security interest upon any assets of the
City under any agreement or instrument to which the City is a party or by which the
City or its assets may be bound or affected.
c. This Agreement has been duly authorized, executed and delivered
by the City and, constitutes a legal, valid and binding obligation of the City, enforceable
in accordance with its terms.
do
City does not
obtained.
The execution, delivery and performance of this Agreement by the
require the consent or approval of any person which has not been
2.2. Representations of the Developer. The Developer hereby represents that:
a. The Developer is a duly authorized, created and existing limited
liability company under the laws of the State of Delaware, is qualified to do business in
the State of Texas, and is duly qualified to do business wherever necessary to carry on
the operations contemplated by this Agreement.
b. The Developer has the power, authority and legal right to enter into
and perform its obligations set forth in this Agreement, and the execution, delivery and
performance hereof, (i) have been duly authorized, (ii) will not, to the best of its
knowledge, violate any judgment, order, law or regulation applicable to the Developer
or any provisions of the Developer's limited partnership agreement, and (iii) does not
constitute a default under or result in the creation of, any lien, charge, encumbrance or
security interest upon any assets of the Developer under any agreement or instrument
to which the Developer is a party or by which the Developer or its assets may be bound
or affected.
c. The Developer has sufficient capital to perform its obligations
under this Agreement.
d. This Agreement has been duly authorized, executed and delivered
and constitutes a legal, valid and binding obligation of the Developer, enforceable in
accordance with its terms.
2.3. Representation of the EDC. The EDC hereby represents that:
a. The EDC is duly authorized, created, as an economic development
corporation, existing under the laws of the State, and is duly qualified and authorized to
carry on the functions and operations as contemplated by this Agreement.
48755_6 - 4 -
b. The EDC has the power, authority and legal right to enter into and
perform this Agreement and the execution, delivery and performance hereof (i) have
been duly authorized, (ii) will not, to the best of its knowledge, violate any applicable
judgment, order, law or regulation, and (iii) does not constitute a default under, or
result in the creation of, any lien, charge, encumbrance or security interest upon any
assets of the EDC under any agreement or instrument to which the EDC is a party or by
which the EDC or its assets may be bound or affected.
c. This Agreement has been duly authorized, executed and delivered
by the EDC and, constitutes a legal, valid and binding obligation of the EDC,
enforceable in accordance with its terms.
d. The execution, delivery and performance of this Agreement by the
EDC does not require the consent or approval of any person which has not been
obtained.
III. The Project and Public Infrastructure.
3.1. Construction of the Project. The Developer agrees to construct, or cause
to be constructed the Project, and shall commence such construction within four years
of the Effective Date. For purposes of this Agreement, construction shall be deemed to
have commenced when the Developer has commenced physical improvements on the
Tract after securing all applicable permits and approvals required for such
improvements.
3.2. Developer Project investments. The Developer intends to commit capital
investment to the Project sufficient to carry out the construction and implementation of
the Project.
3.3. Public Infrastructure requirements.
a. The Developer is responsible for the design and construction, plus
right of way costs, of any private and public infrastructure and all Public Infrastructure
required to serve the Project. The proposed Public Infrastructure, estimated to cost
approximately $10 million are described in more detail on Exhibit A attached hereto.
The estimated costs of $10 million is understood to be an estimate only and the actual
costs thereof shall be determined with respect to the costs incurred in connection with
the design construction and other costs directly associated therewith. Certain additional
infrastructure and related improvements (the "Additional Infrastructure") shall be
designed and constructed by the Developer. Such Additional Infrastructure shall be
designed and constructed in accordance with all applicable City requirements, but shall
not be deemed part of the Public Infrastructure and shall not be owned, operated or
maintained by the City or the EDC.
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b. The Developer agrees to construct the Public Infrastructure and
Additional Infrastructure and to provide and furnish, or cause to be provided and
furnished, all materials and services as and when required in connection with the
construction of the Public Infrastructure and Additional Infrastructure. The Developer
will obtain all necessary permits and approvals from the City and all other
governmental officials and agencies having jurisdiction, provide supervision of all
phases of construction of the Public Infrastructure and Additional Infrastructure,
provide periodic reports of such construction to the City and the EDC upon request,
and cause the construction to be performed in accordance with the approved plans.
The City and the EDC shall use their best efforts to assist the Developer in obtaining
such permits and approvals necessary to construct the Public Infrastructure and
Additional Infrastructure. The Developer shall be responsible for the inspection and
supervision of the construction and implementation of the Public Infrastructure and
Additional Infrastructure.
c. The Developer shall commence construction of the Public
Infrastructure and Additional Infrastructure in a timely fashion to coincide with the
expected development of the Project. Following completion of a component of Public
Infrastructure, the Developer will call for inspection of the applicable Public
Infrastructure by the City, and upon approval thereof as being in compliance with City
standards relating thereto, the Public Infrastructure will be conveyed to the City as
mutually agreed upon by the Developer and the City. All Additional Infrastructure
shall be owned and maintained by the Developer or the District and shall not be
conveyed to the City.
3.4. Acceptance of Public Infrastructure.
a. Promptly upon the completion of construction of any of the Public
Infrastructure, the City shall furnish a Letter of Acceptance so certifying. Each Letter of
Acceptance shall be in a recordable form, and shall be a conclusive determination of
satisfaction and termination of the covenants in this Agreement with respect to the
obligations of the Developer or the District, as applicable, with respect to such Public
Infrastructure. Upon written request for a Letter of Acceptance, the City shall have 30
days after receipt thereof to provide a Letter of Acceptance or a written statement
indicating in detail why the certificate cannot be issued, and what measures or acts will
be necessary, in the reasonable opinion of the City citing applicable laws and
ordinances to take or perform to obtain issuance of such Letter of Acceptance. The
Developer, or the District, as applicable, will follow standard City requirements
applicable to all developers within the City with regard to the acceptance of facilities by
the City.
b. Only Public Infrastructure improvements will be conveyed to the City and
the City and EDC obligations with respect to the cost of any infrastructure
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improvements for the Project will be limited solely as provided in Sections 5.1 and 6.1,
respectively. The Additional Infrastructure and any other non-public, on-site
infrastructure improvements made by the Developer will not be conveyed to the City
and will be Developer's or the District's sole responsibility.
3.5. Easements and rights of way.
a. The Developer shall construct all Public Infrastructure within public
easements or rights of way; provided that, such easements, when required to be
granted by the Developer, may be limited solely to those rights required for the
location, operation and maintenance of the applicable Public Infrastructure, and the
Developer may retain any and all rights consistent with the limited grant of such rights.
For example, and not by way of limitation, the Developer may provide utility
easements for public water, wastewater and drainage facilities located within streets
intended to remain private, such easement limiting access to the operation and
maintenance of such water and wastewater facilities without creating a public street.
b. To the extent that any of the Public Infrastructure to be constructed
under the management of the Developer or the District is to be located in City-owned
rights-of-way, the City shall grant to the Developer or the District and their designees
access thereto to enable the construction of such Public Infrastructure.
IV. Municipal management district.
4.1. Creation. The Parties contemplate the creation of the District by the
Legislature of the State of Texas in its 2005 general session, to assist the Parties in
carrying out the terms and goals of this Agreement. The District shall be created over
the Tract, and the City hereby consents to the creation thereof. The Parties agree to
cooperate as may be required to secure the passage of the special legislation required
for the creation of the District. Upon request therefor, the City agrees to provide
documentation of its consent to the creation of the District to satisfy the requirements of
the Legislature and the Attorney General of the State of Texas relating to the creation of
the District and the issuance of the District's bonds.
4.2. Powers. The Parties intend that the District shall have the powers
provided generally for municipal management districts pursuant to Chapter 375, TEX.
LOCAL GOV'T CODE, as amended, in addition to the following specific powers:
a. Levy and collection of ad valorem taxes in the same manner as provided
for municipal utility districts under Chapter 54, TEX. WATER CODE, as amended.
48755_6 - 7 -
b. Levy and collection of a sales and use tax up to one-half of one percent in
the same manner as provided for the City under Chapter 321, TEX. TAX COI~E, as
amended.
c. Receive the City Commitment and the EDC Commitment solely as
provided herein and pledge such Commitments to the payment of its bonds.
d. Construct, own and operate such facilities, including the Additional
Infrastructure and any Public Infrastructure not conveyed to the City or other political
subdivisions; provided, however, the District agrees that any ownership interest of the
District in any parking lots or buildings shall be structured in such a way as not to
materially diminish the ad valorem tax revenues payable to the City for such facilities.
The District may directly pay for Public Infrastructure and Additional Infrastructure
with its funds, the City Commitment and the EDC Commitment, or bond proceeds;
provided, that to the extent the District uses the City Commitment or the EDC
Commitment directly for such purpose, such expenditures shall be credited against the
respective City and the EDC Commitments contained in Articles V and VI hereof.
4.3. District financing.
a. The District shall be authorized to issue its bonds to generate funds for the
acquisition of the Public Infrastructure or Additional Infrastructure and for other
economic development or other purposes allowed by State law, including specifically,
for the payment of such incentives by the City to the Developer as provided in this
Agreement with respect to the Project. Without limitation of the foregoing, the Parties
anticipate that the District will generate approximately $15 million in net bond proceeds
secured by a pledge of a projected ad valorem tax rate of $0.50 per $100 taxable
valuation, and of a one-half percent sales and use tax to be levied by the District. Costs
of creation of the District, plus costs related to the negotiation, drafting and approval of
this Agreement, may be financed by the District.
b. In addition to its own funds, the District may pledge the City
Commitment and the EDC Commitment as security for payment of District bonds,
which may be sold by negotiation, and issued in one or more series maturing not more
than 40 years from the date of issuance; provided that, District debt secured by the City
or the EDC Commitment shall mature not later than 35 years from date of issuance.
Any District debt secured by the City Commitment or the EDC Commitment must be
callable without penalty within ten years of the date of issuance. In addition, such
District bonds must be issued on commercially reasonable terms including such reserve
requirements, coverage requirements, credit enhancement features, interest rates and
other features consistent with bonds issued by similar entities of like quality and credit
worthiness. The District agrees to proceed with diligence and to use its best efforts to
issue such bonds at the earliest possible time consistent with the requirements in the
preceding sentence.
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c. Prior to the issuance of any District debt, the District will notify the City
and the EDC of the anticipated terms of such financing, and shall not issue any such
debt unless it is in compliance with the applicable terms of this Agreement. The District
will not issue bonds to refund its debt secured by the City Commitment or the EDC
Commitment unless such refunding results in a savings to the District and the
maturities of the refunded debt are not extended thereby, unless the City and the EDC
consent to such extension.
4.4. Annexation. If the Parties agree, and the City provides its consent
therefor, the area of the District may be increased by annexation in accordance with the
terms of Chapter 375, TEX. LOCAL GOV'T CODE, as amended. In such event, the pledge of
revenues of the City and the EDC under Articles V and VI, respectively, may be
applied to the annexed land, if the Parties and the District so agree.
4.5. Alternatives to municipal management district. Although the Parties
intend to use their best efforts to secure the creation of the District in the 2005 General
Legislative Session, such creation cannot be assured; if the District is not created as
contemplated, the Parties agree that the second acceptable alternative is that a
municipal utility district (a "MUD") be created over the Tract, and that road powers be
granted the MUD in accordance with Chapter 54, TEXAS WATER CODE. In such event,
the consent of the City to the creation of the District shall be construed as consent to the
creation of the MUD, and all references to the District shall be construed to refer to the
MUD hereunder, including the commitment of sales tax revenues of the City and the
EDC. If a MUD is created in lieu of a municipal management district as provided in
this Section, this Agreement will govern the relationship between the MUD, the EDC,
and the City, and there will be no additional reimbursement obligation (beyond the
City Commitment and the EDC Commitment) imposed on the City or the EDC.
4.6 Increase in City sales and use tax rate; dissolution of the District. If the
City were to increase its sales and use tax rate so as to prevent or diminish the District's
ability to collect its full half-percent sales and use tax, the City will increase the City
Commitment by an amount equal to the amount by which the District's sales and use
taxes are diminished. The City will not dissolve the District prior to the issuance of the
District bonds described in this Article; should the City determine to dissolve the
District subsequent thereto, the City will be responsible for District obligations as
provided under applicable law relating to municipal management districts. After the
District debt has been retired, the District and the City shall discuss whether additional
City services are required to be performed to be paid from a portion of the District's
sales tax.
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V. City Sales Tax commitment.
5.1. City Commitment.
a. Pursuant to its authority under Chapter 380, TEX. LOCAL GOV'T CODE, as
amended, the City agrees to remit 90 percent of City Sales Taxes to the District as
provided in this Article (the "City Commitment") for such period as specified in Section
5.1 b hereof. The City Commitment will be used to service debt issued by the District as
provided in this Agreement, and the District is authorized to pledge the City
Commitment to its debt issued for such purpose. The City Commitment will
commence upon the receipt of any City Sales Taxes from the Project, and will continue
through and after the issuance of District bonded debt secured thereby, terminating
upon the earlier of the retirement of all such District bonded debt secured thereby,
including any refunding bonds issued pursuant to this Agreement or 35 years from the
first date of issuance of any such bonded debt. If the City Commitment exceeds the
amount required to service District debt secured thereby, it shall be applied by the
District as follows: (1) if the maximum City Commitment of $20 million net bond
proceeds, plus applicable interest if any, has not been fully funded, to pay the
Developer directly, and (2) if the maximum City Commitment has been fully funded, to
redeem the latest maturing District debt secured by the City Commitment.
b. Maximum City Commitment. The Parties agree that the maximum City
Commitment will be an amount sufficient to service bonded District debt issued in an
amount yielding net proceeds equal to $20 million (plus interest on any unpaid portion
of such amount [the "specified amount"], commencing one hundred days after 50% of
the square footage of stores within the Project are open for business, at the rate of eight
percent per annum), and that such obligation on behalf of the City will be limited solely
to the City Sales Taxes and from no other source; provided that the City shall have the
right, but shall have no obligation to do so, to pay the City Commitment from any other
source of legally available funds of the City. If the District uses City Commitment
funds to pay the Developer directly (rather than from bond proceeds), the amount of
such direct payment will be subtracted from the $20 million obligation described above.
Any District bonds issued and secured by the City Commitment in an amount such that
the total principal amount is less than $45 million dollars, shall be credited against the
specified amount in proportion to the percentage of revenues contributed by the City
for such bond issues. Upon the earlier of (i) 35 years from the date any District bonds
are issued pursuant to this Agreement, or (ii) such time as the City has contributed the
specified amount and the District debt secured thereby is retired, the City shall have no
further obligation under this Agreement and the City Sales Taxes levied and collected
within the Project shall belong solely to the City.
c. All City ad valorem taxes collected by the City on property within the
Project and the District will belong solely to the City and will not be paid, rebated or
pledged in any manner to the District or the District bonds.
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5.2. Special fund. The City shall determine the amount of the City Sales Taxes
received by the City from the State Comptroller each month in cooperation with the
Developer, the District and the State Comptroller. The City hereby creates and
establishes a special fund of the City to deposit the City Sales Taxes, and hereby pledges
such fund to the payment of the City Commitment as provided herein. The City
Commitment shall be remitted to the District on or before the 15th day of the month
following the calendar month in which the City Sales Taxes are received by the City
from the State Comptroller. The ten percent of City Sales Taxes not comprising the City
Commitment, shall not be considered part of the funds pledged hereby and may be
used by the City for any lawful purpose.
5.3. City accounting. The City shall maintain complete books and records
showing deposits to and disbursements from the special fund of the City for City Sales
Taxes, which books and records shall be deemed complete if kept in accordance with
generally accepted accounting principles as applied to Texas municipalities. Such
books and records shall be available for examination by the duly authorized officers
or agents of the Developer or the District during normal business hours upon request
made not less than five business days prior to the date of such examination. The City
shall maintain such books and records throughout the term of this Agreement and for
four years thereafter.
5.4. Economic development goals. In consideration of the City's agreement
to pay the City Commitment to the District as provided herein, the Developer agrees
that the Project shall generate a minimum of 700 permanent jobs, on or before three.
years after the initial payment of the City Commitment.
VI. EDC Sales Tax commitment.
6.1. EDC Commitment.
a. Pursuant to its authority under Art. 5190.6, TEX. REV. CIV. STAT., as
amended, the EDC agrees to remit 90 percent of EDC Sales Taxes to the District as
provided in this Article (the "EDC Commitment") as specified in Section 6.1(b) and (c)
hereof. The EDC Commitment will be used by the District to service District debt
issued by the District for the purpose of acquiring eligible Public Infrastructure from the
Developer as provided in Section 3.3.a. of this Agreement, and the District is authorized
to pledge the EDC Commitment to its debt issued for such purposes. The EDC
Commitment will commence upon the receipt of any EDC Sales Taxes from the Project,
and will continue through and after the issuance of District bonded debt secured
thereby, terminating upon the earlier of the retirement of all such District bonded debt,
including any refunding bond issued pursuant to this Agreement, or 35 years from the
first date of issuance of any such bonded debt. If the EDC Commitment exceeds the
amount required to service District debt secured thereby, it shall be applied by the
District as follows: (1) if the maximum EDC Commitment has not been fully funded, to
pay the Developer directly for the acquisition of Public Infrastructure and (2) if the
maximum EDC Commitment has been fully funded, to redeem the latest maturing
District debt.
b. Maximum EDC Commitment. The Parties agree that the maximum EDC
Commitment will be an amount sufficient to service bonded District debt issued in an
amount yielding net proceeds equal to $10 million (plus (i) interest on any unpaid
portion of such amount [the "specified amount"], commencing one hundred days after
50% of the square footage of stores within the Project are open for business, at the rate
of eight percent per annum, and (ii) $30,000 in expenses as described in Section 7.3) and
that such obligation on behalf of the EDC will be limited solely to the EDC Sales Tax
and from no other source; provided that the EDC shall have the right, but shall have no
obligation to do so, to pay the EDC Commitment from any other source of legally
available funds of the EDC. If the District uses EDC Commitment funds to pay the
Developer directly (rather than from bond proceeds), the amount of such direct
payment will be subtracted from the $10 million obligation described above. Any
District bonds issued and secured by the EDC Commitment in an amount such that the
total principal amount is less than $45 million, shall be credited against the specified
amount in proportion to the percentage of revenues contributed by the EDC for such
bond issues. Upon the earlier of (i) 35 years from the date any District bonds are issued
pursuant to this Agreement or (ii) such time as the EDC has contributed the specified
amount and the District debt secured thereby is retired, the EDC shall have no further
obligation under this Agreement and the EDC Sales Taxes levied and collected within
the Project shall belong solely to the EDC.
c. The parties recognize and acknowledge that the EDC currently has sales
tax revenue bonds outstanding and may issue additional sales tax revenue bonds
secured by a gross revenue pledge of all EDC sales tax revenues (including the EDC
Commitment) and that such gross revenue pledge is senior and superior to the EDC
Commitment provided for in this Agreement. However, the EDC covenants and agrees
that it will not issue any such additional EDC debt secured by a pledge of EDC sales
and use taxes unless such additional EDC debt can reasonably be expected to be
serviced with a coverage factor of 125 percent. For purposes of determining debt
service coverage in connection with the foregoing covenant, the EDC shall not include
any of the EDC Commitment in the calculations of the EDC sales tax revenues available
to pay debt service.
6.2. Special fund. The EDC shall determine the amount of the EDC Sales
Taxes received each month by the EDC from the State Comptroller in cooperation with
the Developer, the District and the State Comptroller. Subject to the priority of the EDC
bond pledges described in 6.1.c above, the EDC hereby establishes a special fund for the
EDC Commitment and hereby pledges such fund to the payment of the EDC
Commitment. The EDC hereby agrees to pay the EDC Commitment to the District on
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the 15th day of each month that such funds become legally available for such purpose
pursuant to the applicable EDC bond resolution. A copy of the EDC Series 1997 bond
resolution is attached as Exhibit C. In connection with future EDC bond issues, the
EDC covenants that it will not materially alter the flow of funds contained therein to
adversely affect the EDC's ability to pay the EDC Commitment as provided herein. The
ten percent of EDC Sales Taxes not comprising the EDC Commitment shall not be
considered part of the funds pledged hereby and may be used by the EDC for any
lawful purpose.
6.3. EDC accounting. The EDC shall maintain complete books and records
showing deposits to and disbursements from the special fund of the EDC for EDC
Sales Taxes, which books and records shall be deemed complete if kept in accordance
with generally accepted accounting principles as applied to Texas municipalities. Such
books and records shall be available for examination by the duly authorized officers
or agents of the Developer or the District during normal business hours upon request
made not less than five business days prior to the date of such examination. The EDC
shall maintain such books and records throughout the term of this Agreement and for
four years thereafter.
6.4. Economic development goals. In consideration of the EDC's agreement
to pay the EDC Commitment to the District for the purchase of Public Infrastructure as
provided herein, the Developer agrees that the Project shall generate a minimum of 700
permanent jobs on or before three years after the initial payment of the EDC
Commitment.
VII. Development considerations.
7.1 Zoning. The City acknowledges that the Project is consistent with its
master plan, and upon proper request by the Developer therefor, agrees to cooperate
with the Developer to initiate zoning changes necessary for the proposed lifestyle center
development. The City agrees that upon application of the Developer, the City will use
its best efforts to the extent permitted by law to take such actions as may be required
and necessary to ensure the development of the Tract and the Project by the Developer
in accordance with this Agreement and to take such additional actions as necessary to
enable the City to execute this Agreement and to carry out fully and perform the terms,
covenants, agreements, duties and obligations on its part to be kept and performed as
provided by the terms and provisions hereof.
7.2. Public infrastructure of other entities. The Parties will cooperate to
encourage other public entities to take actions consistent with the development
requirements of the Project including specifically (i) the location and construction of
highway ramps and other access facilities required for the Project from Texas
Department of Transportation and other entities with jurisdiction; and (ii) the
participation of Harris County in creating detention solutions for the Project as part of
the required infrastructure, and to secure Harris County's participation in tax increment
-13-
financing of detention facilities; and (iii) securing easements or other rights to Clear
Creek or regional drainage facility from the Harris County Flood Control District.
7.3. Certain expenses. The EDC will pay $30,000 to the Developer towards
the reasonable costs of creation of the District and the legal and other expenses of the
Parties involved in negotiating and drafting this Agreement and other necessary
agreements and documents to carry out the intent of this Agreement. Neither the City
nor the EDC shall be responsible for any other costs related to the creation of the
District nor shall such other costs be funded using either the City Commitment or the
EDC Commitment.
VIII. Default and cure.
8.1. Default.
a. A Party shall be deemed in default under this Agreement (which shall
be deemed a breach hereunder) if such Party fails to materially perform, observe or
comply with any of its covenants, agreements or obligations hereunder or breaches
or violates any of its representations contained in this Agreement.
b. Before any failure of any Party to perform its obligations under this
Agreement shall be deemed to be a breach of this Agreement, the Party claiming
such failure shall notify, in writing, the Party alleged to have failed to perform of the
alleged failure and shall demand performance. No breach of this Agreement may be
found to have occurred if performance has commenced to the reasonable satisfaction
of the complaining Party within 30 days of the receipt of such notice, subject,
however, to the terms and provisions of Subsection c of this Section. Upon a breach
of this Agreement, a non-defaulting Party, in any court of competent jurisdiction, by
an action or proceeding at law or in equity, may secure the specific performance of
the covenants and agreements herein contained, may be awarded damages for
failure of performance, or both. Except as otherwise set forth herein, no action taken
by a Party pursuant to the provisions of this Section pursuant to the provisions of
any other Section of this Agreement shall be deemed to constitute an election of
remedies and all remedies set forth in this Agreement shall be cumulative and non-
excluSive of any other remedy either set forth herein or available to any Party at law
or in equity. Each of the Parties shall have the affirmative obligation to mitigate its
damages in the event of a default by the other Party.
c. Notwithstanding anything in this Agreement which is or may appear to
be to the contrary, if the performance of any covenant or obligation to be performed
hereunder by any Party is delayed as a result of circumstances which are beyond the
reasonable control of such Party (which circumstances may include, without
limitation, pending litigation, acts of God, war, acts of civil disobedience, fire or
other casualty, shortage of materials, adverse weather conditions (such as, by way of
illustration and not limitation, severe rain storms or below freezing temperatures, or
48755_6 - 14 -
tornados) labor action, strikes or similar acts) the time for such performance shall be
extended by the amount of time of such delay. The Party claiming delay of
performance as a result of any of the foregoing "force majeure" events shall deliver
written notice of the commencement of any such delay resulting from such force
majeure event not later than seven days after the claiming Party becomes aware of
the same, and if the claiming Party fails to so notify the other Party of the occurrence
of a force majeure event causing such delay, the claiming Party shall not be entitled
to avail itself of the provisions for the extension of performance contained in this
Section.
d. In addition to any other right or remedy pursuant to this Agreement, in
the event of a material breach by the other Parties under this Agreement which
continues for 30 days after written notice to the defaulting Party, as applicable,
thereof and the defaulting Party's failure to cure or diligently proceed to cure such
breach to the non-defaulting Party's reasonable satisfaction, the non-defaulting Party
shall have the right (but not the obligation), in its sole discretion, by mandamus,
specific performance or mandatory permanent injunction to require the defaulting
Party to do so; provided that, the sole remedy of the City and the EDC with respect
to the Developer's failure to construct the Project, the Public Infrastructure, or the
Additional Infrastructure, resulting from market conditions or other reasons shall be
the Developer's inability to be reimbursed for eligible costs thereof, and mandamus,
injunction and specific performance shall not apply
8.2. Personal liability of public officials. To the extent permitted by State
law, no public official or employee shall be personally responsible for any liability
arising under or growing out of this Agreement.
8.3. Liability of the Developer, its successors and assignees. Any
obligation or liability of the Developer whatsoever that may arise at anytime under
this Agreement or any obligation or liability which may be incurred by the
Developer pursuant to any other instrument, transaction or undertaking
contemplated hereby shall be satisfied, if at all, out of the assets of the Developer
only. No obligation or liability shall be personally binding upon, nor shall resort for
the enforcement thereof be had to, the property of any of partners, officers,
employees, shareholders or agents of the Developer, regardless of whether such
obligation or liability is in the nature of contract, tort or otherwise.
IX. General provisions.
9.1. Cooperation. The Parties agree to take such actions, including the
execution and delivery of such documents, instruments, petitions and certifications
(and, in the case of the City and EDC, the adoption of such ordinances and
resolutions), as may be necessary or appropriate, from time to time to carry out the
terms, provisions and intent of this Agreement and to aid and assist each other
in carrying out said terms, provisions and intent. Further, the City agrees
-15-
(absent any uncured breach of the terms of this Agreement by the Developer
resulting in a default) that it will not revoke or amend ordinances that are or
will be adopted by the City relating to the District, the Project, and this
Agreement except as is consistent and in compliance with this Agreement. The
Parties shall cooperate fully with each other in seeking from any or all
appropriate governmental bodies (whether federal, state, county or local)
financial or other aid and assistance required or useful for the construction or
improvement of property and facilities in and on the Tract or for the provision
of services to the Tract, including, without limitation, grants and assistance for
public transportation, roads and highways, water and sanitary sewage facilities
and storm water disposal facilities. The Developer acknowledges that the City's
and EDC's agreements to cooperate as set forth herein are not intended to
impose any additional cost or expense on the City or the EDC except as herein
described and that the City's and the EDC's financial responsibilities hereunder
are limited as set forth herein.
9.2. No waiver of City standards. Except as may be specifically provided
in this Agreement, the City does not waive or grant an exemption to the Tract or
the Developer with respect to City regulations or ordinances, including without
limitation platting, permitting or similar provisions.
9.3. Time of the essence. Time is of the essence of this Agreement. The
Parties will make every reasonable effort to expedite the subject matters hereof and
acknowledge that the successful performance of this Agreement requires their
continued cooperation. All dates and time periods provided for in this Agreement
shall be delayed during any pending or threatened litigation that would affect the
ability to issue the bonds, acquire the Tract, or commence or continue with
construction of the Public Infrastructure or the Project, for a time period equal to the
duration of such litigation.
9.4. Authorized Parties. Whenever under the provisions of this
Agreement and other related documents and instruments or any supplemental
agreements, any request, demand, approval, notice or consent of the City, EDC, or
Developer is required, or the City, EDC, or Developer is required to agree or to take
some action at the request of the other, such request, demand, approval, notice or
consent, or agreement shall be given for the City, unless otherwise provided herein,
by the City Manager or his designee, for the EDC by its executive director, and for
Developer by any officer of Developer so authorized (and, in any event, the officers
executing this Agreement are so authorized); and any party shall be authorized to
act on any such request, demand, approval, notice or consent, or agreement.
9.5. Notices. Any notice sent under this Agreement (except as otherwise
expressly required) shall be written and mailed or sent by rapid transmission
confirmed by mailing written confirmation at substantially the same time as such
48755_6 - 16 -
rapid transmission, or personally delivered to an officer of the receiving party at the
following addresses:
If to the City:
City Manager City of Pearland
3519 Liberty Drive
Pearland, Texas 77581
with copies to:
City Attorney
City of Pearland
3519 Liberty Drive
Pearland, Texas 77581
City Secretary
City of Pearland
3519 Liberty Drive
Pearland, Texas 77581
If to the EDC:
Pearland Economic Development Corporation
3519 Liberty Drive
Pearland, Texas 77581
If to the Developer:
Poag & McEwen Lifestyle Centers--Houston, LLC
6400 Poplar Avenue, Suite 850
Memphis, Tennessee 38119
Attention: Robert Rodgers
with a copy to:
Lynne B. Humphries
Allen Boone Humphries LLP
3200 Southwest Freeway, Suite 2600
Houston, Texas 77027
Each party may change its address by written notice in accordance with this Section,
Any communication addressed and mailed in accordance with this Section shall be
deemed to be given when so mailed, any notice so sent by rapid transmission shall be
deemed to be given when receipt of such transmission is acknowledged, and any
communication so delivered in person shall be deemed to be given when receipted for
by, or actually received by, an authorized officer of the City, the EDC, or the
Developer, as the case may be.
9.6. Amendments and waivers. Any provision of this Agreement may be
amended or waived if such amendment or waiver is in writing and is approved by the
Parties. No course of dealing on the part of the City, the EDC or the Developer nor
any failure or delay by the City, the EDC or the Developer with respect to exercising
-17-
any right, power or privilege pursuant to this Agreement shall operate as a waiver
thereof except as otherwise provided in this Section.
9.7. Invalidity. In the event that any of the provisions contained in this
Agreement shall be held unenforceable in any respect, such unenforceability shall
not affect any other provisions of this Agreement and, to that end, all provisions,
covenants, agreements or portions of this Agreement are declared to be severable.
9.8. Successors and assigns. No party shall have the right to assign its
rights under this Agreement or any interest herein, without the prior written consent
of the other Parties, except that the Developer may assign its rights and
responsibilities hereunder to any related, affiliated or subsidiary entity to which
substantially all of its assets and its rights to proceed with development of the
Project are transferred.
9.9. Exhibits, titles of articles, sections and subsections. The exhibits
attached to this Agreement are incorporated herein and shall be considered a part of
this Agreement for the purposes stated herein, except that in the event of any
conflict between any of the provisions of such exhibits and the provisions of this
Agreement, the provisions of this Agreement shall prevail. All titles or headings are
only for the convenience of the Parties and shall not be construed to have any effect
or meaning as to the agreement between the Parties hereto. Any reference herein to a
section or subsection shall be considered a reference to such section or subsection of
this Agreement unless otherwise stated. Any reference herein to an exhibit shall be
considered a reference to the applicable exhibit attached hereto unless otherwise
stated.
9.10. Applicable law. This Agreement is a contract made under and shall,
be construed in accordance with and governed by the laws of the United States of
America and the State of Texas, and any actions concerning this Agreement shall be
brought in either the Texas State District Courts of Harris County, Texas or the
United States District Court for the Southern District of Texas.
9.11. Entire agreement. This written Agreement represents the final
agreement subsequent between the Parties and may not be contradicted by evidence
of prior, contemporaneous, or oral agreements of the Parties. There are no unwritten
oral agreements between the Parties.
9.12. Term of Agreement. The term of this Agreement shall commence on
the date first above written and shall continue for 20 years thereafter; provided that
the obligations of the City and the EDC to make the City Commitment and the EDC
Commitment, respectively, shall continue until all District bonds secured thereby are
retired.
9.13. Effectiveness of Agreement. This Agreement shall become
effective from and after its approval and execution by the Parties.
48755_6 - 18-
9.14. Approval by the Parties. Whenever this Agreement requires or
permits approval or consent to be hereafter given by any of the Parties, such
approval or consent shall not be unreasonably withheld or delayed.
9.15. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original arid all of which shall constitute
but one and the same agreement.
9.16. Interpretation. This Agreement has been jointly negotiated by the
Parties and shall not be construed against a party because that Party may have
primarily assumed responsibility for the drafting of this Agreement.
[Execution pages follow.]
-19-
IN WITNESS WHEREOF, the Parties have duly executed this Agreement
pursuant to all requisite authorizations as of the date first above written.
CITY:
ATTEST:
Date countersigned:
CITY OF PEARLAND, TEXAS, a home-
rule municipality~
B y:
APPROVED AS TO FORM:
City Attorney
Date: /~--
48755_6 - 20 -
EDC:
PEARLAND ECONOMIC
DEVELOPMENT CORPORATION
48755_6 - 21 -
DEVELOPER:
POAG & McEWEN LIFESTYLE
CENTERS--HOUSTON, a Delaware
limite~~ty,~r~pa~ /
Name: Robert L. Roger_s, Ir. I '
Title: Vice President and General Counsel
Exhibits
A - Public Infrastructure
B - Legal Description of Tract
C - EDC 1997 Bond Resolution
48755_6 - 22 -
EXHIBIT A
Description of Public Infrastructure to be financed with EDC Commitment
1. North Spectrum Drive -- Construction of a 4-lane divided roadway with a landscaped median, landscaped
and lighted in accordance with the provisions of the PUD for LNR properties located along Kirby Drive. The
project will commence on the west side of the TXDOT ditch and extend to Lew Briggs Road and shall include the
cost of a bridge over the TXDOT ditch and will include right and left mm lanes at the Lew Briggs intersection.
Project includes cost of right of way, detention, and engineering and testing.
2. Water lines -- (a) Extension of a 16" water line from the west side of the TXDoT ditch to Lew Briggs
Road within the North Spectrum right of way; (b) Water lines on the property that will provide adequate fare
protection to the tract and which can be extended by the City, at its option and cost to serve other properties in the
area; (c) 12" inch water line from Beltway 8 to North Spectrum and a 16" water line from North Spectrum to
Spectrum Boulevard ( both along Lew Briggs); (d) a 12" water line from SH 288 to Lew Briggs along Spectrum
Blvd., engineering and testing cost included for all three segments, and (e) other public water lines in public right of
way as are needed to serve the Project.
3. Sewer lines -- An 18" sewer line from west of the TXDoT ditch to the east side of Lew Briggs Road and
other public sewer lines in public right of way as are needed to serve the Project.
4. A four lane divided road from Beltway 8 to Spectrum Boulevard with a landscaped and lighted median and
a right mm lanes at North Spectrum and a left mm lane at Spectrum Boulevard that is consistent with the plans
shown in the LNR PUD. Project includes costs of right of way, engineering, and detention.
5. Construction of Spectrum Boulevard from Lew Briggs to SH 288 consisting of a four lane divided road
including an additional right and left mm lanes at Lew Briggs with a landscaped and lighted median (in accordance
with landscaping requirement in the LNR PUD). Project includes costs of engineering, right of way, and detention.
6. Dedicated right of way for each of these streets shall be 100' except where mm lanes are required at
intersection. City to cooperate with Developer to acquire (as a Project cost) right of way, including condemnation
assistance as required, for North Spectrum Boulevard from the west side of the TXDoT ditch to Lew Briggs and
west half of the Lew Briggs right of way from Beltway 8 to the point where the Developer owns property on both
sides of Lew Briggs.
7. Detention as is needed to serve the roadways mentioned above.
8. Public storm sewers in public right of way as are needed to serve the Project.
9. If not constructed by TXDoT, southbound 288 off ramps, to connect to the frontage road adjacent to the
Project.
48755_6
EXHIBIT B
LEGAL DESCRIPTION
All of the following tracts are situated in Harris County, Texas
TRACT 1:
A parcel of land containing 88.6991 acres (3,863,734 square feet), more or less, out of Lots 6, 7 and 8 of
the said subdivision of the James Hamilton Survey and being more particularly described as follows:
COMMENCING at a 1 inch iron pipe found at the southwest comer of the said James Hamilton Survey,
said point also being the southwest comer of said Lot 4;
THENCE N 87° 35' 30" E, along the south line of the said James Hamilton Survey and the south line of
said Lot 4, a distance of 1320.00 feet to a 3/4 inch iron rod found at the southeast comer of said Lot 4 and
the southwest comer of Lot 5 of the said subdivision of the James Hamilton Survey;
THENCE N 02° 24' 30" W, along the common line of said Lots 4 and 5, a distance of 1320.00 feet to a
found 1/2 inch iron pipe at the common comer of said Lots 3, 4, 5 and 6, from said 1/2 inch iron pipe a
found 1 inch iron rod bear S 03° 07' 14" W, 0.98 feet in length, also being the POINT OF BEGINNING of
the herein described tract;
THENCE N 02° 24' 30" W, along the east line of Lot 2 of the said subdivision of the James Hamilton
Survey and said Lot 3, and the west line of said Lots 7 and 8, a distance of 2200.00 feet to a 5/8 inch iron
rod set at the northwest comer of said Lot 7 and the southwest comer of said Lot 8, form said 5/8 inch iron
rod and found fence comer bears S 83° 57' 48" E, 21.66 feet in length;
THENCE N 87° 40' 21" E (called N 87° 35' 30" E), along the common line of said Lots 7 and 8, a distance
of 659.68 feet (called 660.00 feet) to a set 5/8 inch iron rod, from said 5/8 inch iron rod found 1 inch iron
pipe bears S 78° 34' 01" W, 8.67 feet in length, also from said 5/8 inch iron rod a found fence comer bears
N 88° 52' 15" W, 1.61 feet in length;
THENCE N 02° 24' 30" W, a distance of 640.18 feet to a 5/8 inch iron rod set in the south line of South
Belt (variable width), from said 5/8 inch iron rod a found 1 inch iron pipe bears S 87° 45' 03" W, 8.30 feet
in length, also from said 5/8 inch iron rod a found fence comer bears S 66° 39' 49" W, 1.37 feet in length;
THENCE S 89° 32' 13" E, along the south line of said South Belt, a distance of 35.99 feet to a 5/8 inch iron
rod set on a curve to the right;
THENCE continuing along the south line of said South Belt and along a fence line and said curve to the
right, having a radius of 881.47 feet, through a central angle of 46° 25' 21", a distance of 714.19 feet to a set
5/8 inch iron rod, said curve having a chord which bears S 66° 19' 32" E, 694.81 feet in length;
THENCE S 02° 24' 30" E, a distance of 332.88 feet to a set 5/8 inch iron rod;
THENCE N 87° 35' 30" E, a distance of 179.39 feet to a 5/8 inch iron rod set on the west line of State
Highway 288 (variable width) and on a curve to the right;
THENCE along the west line of said State Highway 288, a fence line and said curve to the right, having a
radius of 881.47 feet, through a central angle of 11° 55' 32", a distance of 183.47 feet to a found concrete
monument, said curve having a chord which bears S 12° 22' 47" E, 183.14 feet in length;
THENCE S 06° 25' 01" E, continuing along the west line of said State Highway 288 and a fence line, a
distance of 1811.66 feet (called 1811.72 feet) to a found concrete monument;
48~5~
THENCE S 02° 38' 57" E (called S 02° 52' 57" E), continuing along the west line of said State Highway
288 and a fence line, a distance of 209.95 feet (called 212.35 feet) to a fence comer found in the south line
of said Lot 6 and the north line of said Lot 5;
THENCE S 87° 32' 19" W (called S 87° 35'.30" W), along the south line of said Lot 6 and the north line of
said Lot 5, a distance of 1658.31 feet (called 1659.51 feet) to the POINT OF BEGINNING and containing
88.6991 acres (3,863,734 square feet) of land.
TRACT II:
A parcel of land containing 9.0000 acres (392,040 square feet), more or less, out of Lot 3 of the said
subdivision of the James Hamilton Survey and being more particularly described as follows:
COMMENCING at a 1 inch iron pipe found at the southwest comer of the said James Hamilton Survey,
said point also being the southwest comer of said Lot 4;
THENCE N 02° 24' 30" W, along the west lines of the said James Hamilton Survey and said Lot 4, a
distance of 1320.00 feet to a 5/8 inch iron rod set at the southwest comer of said Lot 4 and the southwest
comer of said Lot 3 for the POINT OF BEGINNING of the herein described tract.
THENCE N 02° 24' 30" W, continuing along the west line of the said James Hamilton Survey and along the
west line of said Lot 3, a distance of 594.00 feet to a set 5/8 inch iron rod;
THENCE N 87° 35' 30" E, a distance of 660.00 feet to a set 5/8 inch iron rod;
THENCE S 02° 24' 30" E, a distance of 594.00 feet to a 5/8 inch iron rod set in the common line of said
Lots 3 and 4;
THENCE S 87° 35' 30" W, along the common line of said Lots 3 and 4, a distance of 660.00 feet to the
POINT OF BEGINNING and containing 9.0000 acre (392;040 square feet) of land.
TRACT III:
A parcel of land containing 5.0000 acres (217,800 square feet), more or less, out of Lot 4 of the said
subdivision of the James Hamilton Survey and being more particularly described as follows:
COMMENCING at a 1 inch iron pipe found at the southwest comer of the said James Hamilton Survey,
said point also being the southwest comer of said Lot 4;
THENCE N 02° 24' 30" W, along the west lines of the said James Hamilton Survey and said Lot 4, a
distance of 990.00 feet to a 5/8 inch iron rod set for the POINT OF BEGINNING;
THENCE N 02° 24' 30" W, continuing along the west lines of the said James Hamilton Survey and said Lot
4, a distance of 330.00 feet to a 5/8 inch iron rod set at the northwest comer of said Lot 4 and southwest
comer of said Lot 3;
THENCE N 87° 35' 30" E, along the common line of said Lots 3 and 4, a distance of 660.00 feet to a set 5/8
inch iron rod;
THENCE S 02° 24' 30" E, a distance of 330.00 feet to a set 5/8 inch iron rod;
THENCE S 87° 35' 30" W, a distance of 660.00 feet to the POINT OF BEGINNING and containing 5.0000
acres (217,800 square feet) of land.
48755_6
TRACT IV:
A parcel of land containing 5.0000 acres (217,800 square feet), more or less, out of Lot 3 of the said
subdivision of the James Hamilton Survey and being more particularly described as follows:
COMMENCING at a 1 inch iron pipe found at the southwest comer of the said James Hamilton Survey,
said point also being the southwest comer of said Lot 4;
THENCE N 87° 35' 30" E, along the south lines of the said James Hamilton Survey and the said Lot 4, a
distance of 1320.00 feet to a 3/4 inch iron rod found at the southeast comer of said Lot 4 and the southwest
comer of Lot 5 of said subdivision of the James Hamilton Survey;
THENCE N 02° 24' 30" W, along the common line of said Lots 4 and 5, a distance of 1320.00 feet to a 1/2
inch iron pipe found at the common comer of said Lots 3, 4, 5 and 6, from said 1/2 inch iron pipe a found 1
inch iron rod bears S 03° 07' 14" W, 0.98 feet in length, also from said 1/2 inch iron pipe a found fence
comer bears S 87° 53' 08" E, 0.88 feet in length, said 1/2 inch iron pipe also being the POINT OF
BEGINNING of the herein described tract;
THENCE S 87° 35' 30" W, along the common line of said Lots 3 and 4, a distance of 660.00 feet to a set
5/8 inch iron rod;
THENCE N 02° 24' 30" W, a distance of 330.00 feet to a set 5/8 inch iron rod;
THENCE N 87° 35' 30" E, a distance of 660.00 feet to a 5/8 inch iron rod set in the common line of said
Lots 3 and 6;
THENCE S 02° 24' 30" E, along the common line of said Lots 3 and 6, a distance of 330.00 feet to the
POINT OF BEGINNING and containing 5.0000 acres (217,800 square feet) of land.
TRACT V:
A parcel of land containing 5.000 acres (217,800 square feet), more or less, out of Lot 3 of the said
subdivision of the James Hamilton Survey and being more particularly described as follows:
COMMENCING at a 1 inch iron pipe found at the southwest comer of the said James Hamilton Survey,
said point also being the southwest comer of said Lot 4;
THENCE N 87° 35' 30" E, along the south lines of the said James Hamilton Survey and said Lot 4, a
distance of 1320.00 feet to a 3/4 inch iron rod found at the southeast comer of said Lot 4 and the southwest
comer of Lot 5 of the said subdivision of the James Hamilton Survey;
THENCE N 02° 24' 30" W, along the common line of said Lots 4 and 5, at a distance of 1320.00 feet pass a
1/2 inch iron pipe found at the common comer of said Lots 3, 4, 5 and 6, from said ½ inch iron pipe a
found 1 inch iron rod bears S 03° 07' 14" W, 0.98 feet in length, also from said 1/2 inch iron pipe a found
fence comer bears S 87° 53' 08" E, 0.88 feet in length, in all a distance of 1650.00 feet to a 5/8 inch rod set
for the POINT OF BEGINNING;
THENCE S 87° 35' 30" W, a distance of 660.00 feet to a set 5/8 inch iron rod;
THENCE N 02° 24' 30" W, a distance of 330.00 feet to a 5/8 inch iron rod;
THENCE N 87° 35' 30" E, a distance of 660.00 feet to a 5/8 inch iron rod set in the common line of said
Lots 3 and 6;
48755_6
THENCE S 02° 24' 30" E, along the common line of said Lots 3 and 6, a distance of 330.00 feet to the
POINT OF BEGINNING and containing 5.0000 acres (217,800 square feet) of land.
TRACT VI:
A parcel of land containing 5.0000 acres (217,800 square feet), more or less, out of Lot 4 of the said
subdivision of the James Hamilton Survey and being more particularly described as follows:
COMMENCING at a 1 inch iron pipe found at the southwest comer of the said James Hamilton Survey,
said point also being the southwest comer of said Lot 4;
THENCE N 02° 24' 30" W, along the west lines of the said James Hamilton Survey and said Lot 4, a
distance of 330.00 feet to a 5/8 inch iron rod set for the POINT OF BEGINNING;
THENCE N 02° 24' 30" W, continuing along the west lines of the said James Hamilton Survey and said Lot
4, a distance of 330.00 feet to a set 5/8 inch iron rod;
THENCE N 87° 35' 30" E, a distance of 660.00 feet to a set 5/8 inch iron rod;
THENCE S 02° 24' 30" E, a distance of 330.00 feet to a set 5/8 inch iron rod;
THENCE 87° 35' 30" W, a distance' of 660.00 feet to the POINT OF BEGINNING and containing 5.0000
acres (217,800 square feet) of land.
TRACT VII:
All that certain 9.9963 acre tract or parcel of land, more or less, lying and being situated in the DAVID
WHITE (Assignee of James Hamilton) Survey, Abstract 881, Harris County, Texas, and being a portion of
that certain 15 acre tract of land described in deed from Julius S. Worland to J.V. King, dated August 17,
1954 and recorded in Volume 2309, Page 695, Deed Records of Harris County, Texas and being more
particularly described as follows:
BEGINNING at a 1" iron pipe in the west line of the said 15 acre tract, same being located South 317.96
feet from its northwest comer and said beginning point also being the point of intersection of the southerly
right-of-way line of the proposed South Belt Highway with the aforementioned west line of the 15 acre
tract;
THENCE S 87° 04' 09" E, along the southerly line of the said South Belt Highway at 23.40 feet pass a
concrete monument, in all 660.87 feet to a 1" iron pipe for comer in the east line of the said 15 acre tract;
THENCE South, along the east line of the said 15 acre tract, 641.58 feet to a 1" iron pipe for the southeast
comer of the tract herein described;
THENCE N 89° 41' W, along the south line of the tract 660.00 feet to a 1" iron pipe for its Southwest
comer;
THENCE North, along the west line of the said 15 acre tract, 674.57 feet to the point or PLACE OF
BEGINNING and containing as aforesaid 9.9963 acres of land.
48755_6
RF. SOLUTION AUTHORIZING THE ISSUANCE OF $5,000,000 PEARLAND
ECONOMIC DEVELOPMENT CORPORATION SALES TAX REVENUE
BONDS, SERIFS 1997; AND CONTAINING OTHER PROVISIONS RELATED
THERETO
BE 1T RESOLVED BY THE BOARD OF DIRECTORS OF TILE PEARLAND
ECONOMIC DEVELOPMENT CORPORATION:
ARTICLE I
FINDINGS AND .DETERMINATION_$
Section 1,1: Findings and Determinations. It is hereby officially found and determined
that:
(a) the City Council of the City of Pearland, Texas (the "City"), by Ordinance No.
R95-36 duly adopted on May 22, 1995, authorized the creation of the pearland Economic
Development Corporation (the "Corporation") to act on behalf of the City by receiving and
expending sales tax revenues for various projects which promote or develop new or expanded
· business enterprises or which promote and encourage economic development, employment and
the public welfare;
(b) on January 21, 1995, the voters of the City approved the lev), of one-half of one
percent (1/2%) sales and use tax to be used for the benefit of the Corporation (the "Sales Tax");
(c) on June 26, 1995, the Corporation was duly created, incorporated, chartered and
organized pursuant to Article 5190.6, Section 4B, Texas Revised Civil Statutes (the "Act"); and
(d) the acquisition and construction of street and bridge improvements within the City,
including specifically the extension of McHard Road from State Highway 35 to Mykawa Road
(the "Project"), is important to ~e economic growth and development of the City and will
benefit the City's residents by aiding the City's efforts to encourage growth and development,
stimulate commerce, promote or develop new or expanded business enterprises, and enhance the
health, safety, and welfare of the City's residents; and
(e) as permitted by the Act, the Corporation desires to issue sales tax revenue bonds
upon the terms and conditions and for the purposes herein provided.
ARTICLE II
~EFINITIONS AND INTERPRETATIONS
Section 2.1.; ~. In this Resolution, the following terms shall have the following
meanings, unless the context clearly indicates otherwise:
"Act" shall mean Article 5190.6, Section 4B, Texas Revised Civil Statutes, as amended.
"Additional Farity Bonds" shall mean the additional bonds permitted to be issued by the
Corporation pursuant to Section 6. ! of this Resolution.
~Attorney General" shall mean the Attorney General of the State of Texas.
"Board of Directors~ shall mean the governing body of the Corporation.
"Bond Insurance Commitment" shall mean the bond insurance commitment of the Bond
Insurer substantially in the form attached hereto as Exhibit E.
~Bond Insurance Folicy" shall mean the municipal bond new issuance insurance policy
issued by the Bond Insurer that guarantees payment of principal of and interest on the Bonds.
"Bond Insurer" shall mean MBIA Insurance Corporation, or any successor thereto.
~Bonds" shall mean the Corporation's Sales Tax Revenue Bonds, Series 1997, but only
to the extent such Bonds are Outstanding within the meaning of this Resolution.
"Business Day" shall mean any day which is not a Saturday, Sunday, a day on which
banking institutions in the city where the principal corporate trust office of the Paying
Agent/Registrar is located are authorized by law or executive order to close, or a legal holiday.
"City" shall mean the City of Pearland, Texas, a municipal corporation and home-role
city, and where appropriate, the City Council of the City.
"Code* shall mean the Internal Revenue Code of 1986, as amended.
"Comptroller" shall mean the Comptroller of Public Accounts of the State of Texas.
"Construction Fund" shall mean the Corporation's Construction Fund created pursuant
to Section 9.4 of this Resolution.
~Corporafion" shall mean the Pearland Economic Development Corporation, and any
successor thereto.
"Debt Service Fund" shall mean the Sales Tax Revenue Bonds, Series 1997 Debt Service
Fund created pursuant to Section 5.2 of this Resolution.
"Debt Service Requirement" shall mean the amount necessary to pay the principal of,
premium, if any, and interest due and owing on the Bonds, and any Additional Parity Bonds,
during each fiscal year of the Corporation. The Debt Service Schedule for the Bonds is attached
to this Resolution as Exhibit A.
"Initial Debt Service Requirement" shall mean the amount necessary to pay the principal
of and interest on the Bonds due and owing from the date of this Resolution through the
Corporation's 1996-1997 fiscal year.
"Interest Payment Date", when used in connection with any Bond, shall mean September
1, 1997, and each September 1 and March 1 thereafter until maturity or earlier redemption.
"Outstanding", when used with reference to the Bonds shall mean, as of a particular date,
the principal amount of all such Bonds theretofore and thereupon delivered by the Corporation
as provided in or contemplated by this Resolution, except: (a) any such Bond canceled by or
on behalf of the Board of Directors at or before such date; (b) any such Bond paid or with
respect to which provision for payment has been made pursuant to the provisions of this
Resolution or otherwise defeased as permitted by applicable law; or (c) any such Bond in lieu
of or in substitution for which another Bond shall have been delivered pursuant to this
Resolution.
"Owner" or "Registered Owner", when used with respect to any Bond shall mean the
person or entity in whose name such Bond is registered in the Register. Any reference to a
particular percentage or proportion of the Owners shall mcan the Owners at a particular time of
the specified percentage or proportion in aggregate principal amount of all Bonds then
outstanding under this Resolution, exclusive of Bonds held by the Corporation.
"Parity Bonds" shall mean the Bonds, each series of Additional Parity Bonds from time
to time hereafter issued by the Corporation, and any refunding bonds issued to refund the Bonds
or any Additional Parity Bonds, but only to the extent such Parity Bonds remain Outstanding.
"Paying Agent/Registrar" shall mean Texas Commerce Bank National Association,
Dallas, Texas, and its successors in that capacity.
"Pledged Revenues" shall mean (a) 100% of the Sales Tax Revenues and (b) 100% of
all of the interest income from the investment or deposit of moneys in the Revenue Fund, the
Debt Service Fund and the Reserve Fund.
"Purchaser" shall mean the initial purchaser of the Bonds as defined in Section 9.1 of this
Resolution.
3
"Record Date' shall mean, for any Interest Payment Date, the fifteenth (15) calendar day
of the month next preceding each Interest Payment Date.
'Register' shall mean the books of registration kept by the Paying Agent/Registrar in
which are maintained the names and addresses of, and the principal amounts of the Bonds
registered to, each Owner.
'Reserve Fund' shall mean the Sales Tax Revenue Bonds, Series 1997 Reserve Fund
created pursuant to Section 5.2 of this Resolution.
"Reserve Fund Requirement' shall mean the lesser of (i) 10% of the stated principal
amount of the Bonds and any Additional Parity Bonds outstanding as of the issuance date of such
Additional Parity Bonds (or the sales proceeds in the event that the original issue discount
exceeds 2% multiplied by the stated redemption price at maturity of the Bonds and any
Additional Parity Bonds outstanding as of the issuance date of such Additional Parity Bonds) as
of the issuance date of such Additional Parity Bonds, (ii) the maximum annual principal and
interest requirements of the Bonds and any Additional Parity Bonds then outstanding and (iii)
125 % of the average annual principal and interest requirements of the Bonds and any Additional
Parity Bonds then outstanding.
'Reserve Fund Surety Bond" shall mean the reserve fund surety bond issued by the
Reserve Fund Surety Bond Insurer.
"Reserve Fund Surety Bond Insurer" shall mean AMBAC Indemnity Corporation or any
successor thereto.
"Resolution" shall mean this Resolution Authorizing the Issuance of $5,000,000 Pearland
Economic Development Corporation Sales Tax Revenue Bonds, Series 1997, and all amendments
hereof and supplements hereto.
'Revenue Fund" shall mean the Sales Tax Revenue Fund created pursuant to Section 5.2
of this Resolution.
"Sales Tax" shall mean the 1/2 of 1% sales and use tax authorized to be levied by the
City for the benefit of the Corporation for the promotion and development of new and expanded
business enterprises pursuant to an election held on January 21, 1995.
"Sales Tax Revenues" shall mean 100% of the funds collected by the City from the levy
of the Sales Tax, without deduction, offset or credit for any administrative charges or expenses
incurred by the City or the Corporation in connection with the levy and collection of the Sales
Tax, other than any amounts due and owing to the Comptroller for collection costs and other
charges.
4
"Surplus Fund" shall mean the Sales Tax Surplus Fund created pursuant to Section 5.2
of this Resolution.
Section 2.2: !gterpretation~. All terms defined herein and ali pronouns used in this
Resolution shall be deemed to apply equally to singular and plural and to all genders. The rifles
and headings of the articles and sections of this Resolution 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 Resolution 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 Parity Bonds and the validity of the lien on and pledge of the Pledged Revenues
to secure the payment of the Parity Bonds.
ARTICLE IH
..TERMS OF TH]~ BONDS
Section 3.1.: Name, Amount, Purpose, Authorization. The Bonds shall be issued in fully
registered form, without coupons, in the aggregate principal amount of FIVE MILLION AND
NO/100 DOLLARS ($5,000,000) for the purposes permitted by the Act, including particularly
acquiring and constructing street and bridge improvements within the City and paying expenses
of issuance, all under and pursuant to the authority of the Act.
Section 3.2: _Designation, Date, and Interest Payment Dates. The Bonds shall be dated
May 1, 1997 and designated as the PEARLAND ECONOMIC DEVELOPMENT
CORPORATION SALES TAX REVENUE BONDS, SERIES 1997, and shall bear interest at
the rates set forth in Section 3.3 of this Resolution from the later of May 1, 1997, 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 composed of twelve 30-day months, payable on September 1,
I997, and semiannually thereafter on March 1 and September 1 of each year until maturity or
earlier redemption.
Section 3,3: Initial Bonds; Numbersi Denomination; Interest Rates and Maturities. The
Bonds shall be initially issued bearing the numbers, in the principal amounts, and beating
interest at the rates set forth below, and may be transferred and exchanged as set out in this
Resolution. The Bonds shall mature, subject to prior redemption in accordance with this
Resolution, on September 1 in each of the years and in the amounts set out in the following
schedule. Bonds delivered on transfer of or in exchange for other Bonds shall be numbered in
order of their authentication by the Paying AgenffRegistrar, shall be in the denomination of
$5,000 or integral multiples thereof, and shall mature on the same date and bear interest at the
same rate as the Bond or Bonds in lieu of which they are delivered.
Bond Year of Principal Interest
Number ... Maturitg_. Amount ~_
R-1 1998 $80,000 7.200%
R-2 1999 85,000 7.200%
5
Bond Year of Principal Interest
N~mber Maturity . Am0~nt .. Rate
R-3 2000 90,000 7.200%
R-4 2001 95,000 7.200%
R-5 2002 100,000 7.200%
R-6 2003 185,000 7.200%
R-7 2004 200,000 7.200%
R-8 2005 210,000 7.200 %
R-9 2006 220,000 7.200%
R- 10 2007 235,000 6.000 %
R-11 2008 300,000 5.200%
R-12 2009 320,000 5.300%
R-13 2010 340,000 5.400%
R-14 2011 360,000 5.450%
R-15 2012 385,000 5.500%
R-16 2013 410,000 5.500%
R-17 2014 435,000 5.500%
R-18 2015 460,000 5.200%
R-19 2016 490,000' 5.200%
~: _Optional Redemption. The Corporation reserves the right, at its option, to
redeem Bonds maturing on or after September 1, 2008, in whole, or from time to time in part,
on September 1, 2007 or on any date thereafter, at par plus accrued interest on the amounts
called for redemption to the date fixed for redemption. If less than all of the Bonds are to be
redeemed, the Corporation shall determine the particulsa: Bonds or portions thereof to be
redeemed.
Principal amounts may be redeemed only in integral multiples of $5,000. If a Bond
subject to redemption is in a denomination larger than $5,000, a portion of such Bond may be
redeemed, but only in integral multiples of $5,000. Upon surrender of any Bond for redemption
in part, the Paying Agent/Registrar, in accordance with Section 3.11 of this Resolution, 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 Paying Agent/Registrar at least thirty days prior to the date fixed for redemption
by sending written notice by first class mail, postage prepaid, 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, and the place at which Bonds are to be surrendered for
payment and, if less than all Bonds outstanding are to be redeemed in any one maturity, the
numbers of the Bonds or portions thereof of such maturity to be redeemed. In selecting portions
of Bonds for redemption, the Paying Agent/Registrar shall treat each Bond as representing that
number of Bonds of $5,000 denomination which is obtained by dividing the principal amount
of such Bond by $5,000. The Paying Agent/Registrar shall select the particular Bonds to be
6
redeemed within any given maturity by lot or other random method. Any notice given as
provided in this Section 3.4 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 Paying Agent/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 the same as herein provided, the Bonds or portions thereof so redeemed shall no longer
be regarded as Outstanding except for the purpose of receiving payment solely from the funds
so provided for redemption, and the rights of the Owners to collect interest which would
otherwise accrue after the redemption date on any Bond or portion thereof called for redemption
shall terminate on the date fixed for redemption.
Section 3.,5: Execution of Bonds. The Bonds shall be signed on behalf of the
Corporation by the President and ~ountersigned by the Secretary by their manual, lithographed,
or facsimile signatures 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.
If any officer of the Corporation 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 ail
purposes as if such officer had remained in such office.
Section 3.6: Approval By Attorney General: Registration by Comptroller. The Bonds
to be initially issued shall be delivered to the Attorney General for examination anct approval and
shall be registered by the Comptroller. The manually executed registration certificate of the
Comptroller substantially in the form provided in Article IV of this Resolution shall be affixed
or attached to the Bonds to be ini~ally issued.
~tion 3.7: Authentication. Except for the Bonds to be initially issued, which need not
be authenticated, only such Bonds as shall bear thereon a certificate of authentication
substantially in the form provided in Article IV of this Resolution, manually executed by an
authorized representative of the Paying Agent/Registrar, shall be entitled to the benefits of this
Resolution or shall be valid or obligatory for any purpose. Such duly executed certificate of
authentication shall be conclusive evidence that the Bond so authenticated was delivered by the
Paying Agent/Registrar hereunder.
Section ,3.8: Payment of Principal and Interest. The principal of the Bonds shall be
payable, without exchange or collection charges, in any coin or currency of the United States
of America which, on the date of payment, is legal tender for the payment of debts due the
United States of America, upon their presentation and surrender as they respectively become due
and payable at the principal corporate trust office of the Paying Agent/Registrar. The interest
on each Bond shall be payable by check payable on the Interest Payment Date, mailed by the
7
Paying Agent/Registrar on or before each Interest Payment Date to the Owner of record as of
the Record Date, to the address of such Owner as shown on the Register, or by such other
method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of,
the Owner.
If the date for the payment of principal or interest on any Bond is not a Business Day,
then the date for such payment shall be the next succeeding Business Day, and payment on such
date shall have the same force and effect as if made on the original date such payment was due.
Section 3.9: Special Record Date. If interest on any Bond is not paid on any Interest
Payment Date and continues unpaid for thirty (30) days thereafter, the Registrar shall establish
a new record date for the payment of such interest, to be known as a "Special Record Date.'
The Registrar shall establish a Special Record Date when funds to make such interest payment
are received from or on behalf of the Corporation. Such Special Record Date shall be fifteen
(15) days prior to the date fixed for payment of such past due interest, and notice of the date of
payment and the Special Record Date shall be sent by United States mail, first class, postage
prepaid, not later than five (5) days prior to the Special Record Date, to each Owner or record
of an affected Bond as of the close of business on the day prior to the mailing of such notice.
Section 3.!0: Ownership. Subject to the further provisions of this Section, the
Corporation, the Paying Agent/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 Corporation 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 Owner of any Bond in accordance with this Section 3.10 shall
be valid and effectual and shall discharge the liability of the Corporation and the Paying
Agent/Registrar upon such Bond to the extent of the sums paid.
Section 3...11: Registration, Transfer and Exchange. So long as any Bonds remain
outstanding, the Paying Agent/Registrar shall keep the Register at its principal corporate trust
office and, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar
shall provide for the registration and transfer of Bonds in accordance with the terms of this
Resolution.
Each Bond shall be transferable only upon the Presentation and surrender thereof at the
principal corporate trust office of the Paying Agent/Registrar, duly endorsed for transfer, or
accompanied by an assignment duly executed by the registered Owner or his authorized
representative in form satisfactory to the Paying Agent/Registrar. Upon due presentation of any
Bond in proper form for transfer, the Paying Agent/Registrar shall authenticate and deliver in
exchange therefor, within three (3) Business Days after such presentation, a new Bond or Bonds,
registered in the name of the transferee or transferees, in the same maturity and aggregate
principal amount and bearing interest at the same rate as the Bond or Bonds so presented.
8
All Bonds shall be exchangeable upon presentation and surrender thereof at the principal
corporate trust office of the Paying Agent/Registrar for a Bond or Bonds of the same maturity
and interest rate, in an aggregate amount equal to the unpaid principal amount of the Bond or
Bonds presented for exchange. The Paying Agent/Registrar shall be and is hereby authorized
to authenticate and deliver exchange Bonds in accordance, with the provisions of this Section
3.11. Each Bond delivered in accordance with this Section 3.11 shall be entitled to the benefits
and security of this Resolution to the same extent as the Bond or Bonds in lieu of which such
Bond is delivered.
The Corporation or the Paying Agent/Registrar may require the Owner of any Bond to
pay a sum sufficient to cover any tax or other governmental charge that may be imposed in
connection with the transfer or exchange of such Bond. Any fee or charge of the Paying
Agent/Registrar for such transfer or exchange shall be paid by the Corporation.
S...~.tion 3,12: Cancellation of Bonds. All Bonds paid or redeemed in accordance with
this Resolution, and all Bonds in lieu of which exchange Bonds or replacement Bonds 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 furnish the Corporation with appropriate certificates of destruction of such Bonds.
.Section 3,13: Mutilated, Lost, or Stolen Bonds. Upon the presentation and surrender
to the Paying Agent/Registrar of a mutilated Bond, the Paying Agent/Registrar shall authenticate
and deliver in exchange therefor a replacement Bond of like maturity, interest rate and principal
amount, bearing a number not contemporaneously outstanding. The Corporation or the Paying
Agent/Registrar may require the Owner of such Bond to pay a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection therewith and any other
expenses connected therewith, including the fees and expenses of the Paying Agent/Registrar.
If any Bond is lost, apparently destroyed, or wrongfully taken, the Corporation, 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 execute and the Paying Agent/Registrar
shall authenticate and deliver, a replacement Bond of like maturity, interest rate and principal
amount, bearing a number not contemporaneously outstanding, provided that the Owner thereof
shall have:
furnished to the Corporation and the Paying Agent/Registrar satisfactory evidence
of the ownership of and the circumstances of the loss, destruction or theft of such
Bond;
(2)
furnished such security or indemnity as may be required by the Paying
Agent/Registrar and the Corporation to save them harmless;
(3)
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
(4) met any other reasonable requirements of the Corporation and the Paying
Agent/Registrar.
If, after the delivery of such replacement Bond, a bona fide purchaser of the original Bond in
lieu of which such replacement Bond was issued presents for payment such original Bond, the
Corporation and the Paying Agent/Registrar shall be entitled to recover such replacement Bond
from the person to whom it was delivered or any person taking therefrom, except a bona fide
purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expense incurred by the Corporation or the Paying
Agent/Registrar in connection therewith.
If any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become
or is about to become due and payable, the Corporation in its discretion may, instead of issuing
a replacement Bond, authorize the Paying Agent/Registrar to pay such Bond.
Each replacement Bond delivered in accordance with this Section 3.13 shall be entitled
to the benefits and security of this Resolution to the same extent as the Bond or Bonds in lieu
of which such replacement Bond is delivered.
10
ARTICLE IV
FORM OF BONDS AND CERTIFICA~
Section 4,1: .F.P_.~. The form of the Bonds, including the form of the Paying
Agent/Registrar's Authentication Certificate, the form of Assignment and the form of the
Comptroller's Registration Certificate 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 Resolution:
_FORM OF BON~.
UNITED STATES OF AMERICA
STATE OF TEXAS
DENOMINATION
NUMBER $
R- REGISTERED
REGISTERED
PEARLAND ECONOMIC
DEVELOPMENT CORPORATION
SALES TAX REVENUE BOND
SERIES 1997
INTEREST RATE:
ISSUE DATE:
MATURITY DATE:
CUSIP:
May 1, 1997
September 1,
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS:
THE PEARLAND ECONOMIC DEVELOPMENT CORPORATION (the
"Corporation"), a corporation created to act on behalf of the City of Pearland, Texas (the
"City"), in the County of Brazoria, in the State of Texas, for value received hereby promises
to pay, but solely from certain Pledged Revenues as hereinafter provided, to the Registered
Owner identified above or registered assigns, on the Maturity Date specified above, upon
presentation and surrender of this Bond at the principal payment office of Texas Commerce Bank
National Association, Dallas, Texas (the "Paying Agent/Registrar"), the principal amount
identified above, 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, solely from such Pledged Revenues, interest thereon at the rate shown
above, calculated on the basis of a 360-day year, composed of twelve 30-day months, from the
later'of May 1, 1997, 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 sent by United States mail, first
11
class, postage Prepaid, payable on September 1 and March 1, beginning on September I, 1997,
mailed to the registered owner as shown on the books of registration kept by the Paying
Agent/Registrar as of the fifteenth (15) calendar day of the month next preceding each interest
payment date, or by such other method, acceptable to the Paying Agent/Registrar, requested by
and at the risk and expense of the registered owner. Any accrued interest payable at maturity
or earlier redemption shall be paid upon presentation and surrender of this Bond at the principal
corporate trust office of the Paying Agent/Registrar.
THIS BOND IS ONE OF A DULY AUTHORIZED SERIES OF BONDS (the "Bonds)
aggregating $5,000,000, issued for the purposes permitted by Article 5190.6, Texas Revised
Civil Statutes (the "Act"), including particularly acquiring and constructing street and bridge
improvements within the City and paying expenses of issuance, ali under and pursuant to the
authority of the Act and all other applicable law, and a resolution adopted by the Corporation
on April 7, 1997 (the "Resolution").
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND
SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL HAVE THE
SAME FORCE AND EFFECT AS IF SET FORTH AT THIS PLACE.
THIS BOND shall not be valid or obligatory for any purpose or be entitled to any benefit
under the Resolution 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 Paying Agent/Registrar by due execution of the authentication certificate
endorsed hereon.
IN WITNESS WHEREOF, the Corporation has caused this Bond to be executed by the
President of the Corporation and countersigned by the Secretary of the Corporation by the
manual, lithographed or printed facsimile signatures.
(AUTHENTICATION OR
REGISTRATION CERTIFICATE)
PEARLAND ECONOMIC DEVELOPMENT
CORPORATION
President
COUNTERSIGNED:
12
* * *
(Back Panel of Bond)
THE CORPORATION RESERVES THE RIGHT to redeem Bonds maturing on or after
September 1, 2008, in whole or from time to time in part, in integral multiples of $5,000, on
September 1, 2007, or on 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
Resolution for complete details concerning the manner of redeeming the Bonds.
NOTICE OF ANY REDEMPTION shall be given at least thirty (30) days prior to the
date fixed for redemption by first class mail, postage prepaid, addressed to the registered owner
of each Bond to be redeemed in whole or in part at the address shown on the books of
registration kept by the Paying Agent/Registrar. When Bonds or portions thereof have been
called for redemption, and due provision has been made to redeem the same, the principal
amounts so redeemed shall be payable solely from the funds provided for redemption, and
interest which would otherwise accrue on the amounts called for redemption shall terminate on
the date fixed for redemption.
THIS BOND AND THE SERIES OF WHICH IT IS A PART are special obligations of
the Corporation that are payable from and are equally and ratably secured by a first lien on the
Pledged Revenues, as defined and provided in the Resolution, which Pledged Revenues are
required to be set aside and pledged to the payment of the Bonds, and all additional bonds issued
on a parity therewith, in the Debt Service Fund and Reserve Fund maintained for the payment
of all such Bonds, and any excess Sales Tax Revenues are to be set aside in the Surplus Fund
and used for any purpose authorized under the Act.
THIS BOND AND THE SERIES OF WHICH IT IS A PART ARE PAYABLE SOLELY
FROM SUCH PLEDGED REVENUES AND NEITHER THE STATE, THE CITY, NOR ANY
POLITICAL CORPORATION, SUBDIVISION OR AGENCY OF THE STATE SHALL BE
OBLIGATED TO PAY THE SAME OR THE INTEREST THEREON AND NEITHER THE
FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE, THE CITY, OR ANY
OTHER POLITICAL CORPORATION, SUBDIVISION OR AGENCY THEREOF IS
PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR THE INTEREST ON THE
BONDS. NEITHER THE BONDS NOR ANY INSTRUMENT RELATED TO THE BONDS
MAY GIVE A BONDHOLDER A RIGHT TO DEMAND PAYMENT FROM TAX
PROCEEDS IN EXCESS OF THOSE COLLECTED FROM THE SALES AND USE TAX
IMPOSED BY THE CITY PURSUANT TO THE ACT. THE OWNER HEREOF SHALL
NEVER HAVE THE RIGHT TO DEMAND PAYMENT OF THIS BOND OUT OF ANY
FUNDS RAISED OR TO BE RAISED BY AD VALOREM TAXATION.
THIS BOND IS TRANSFERABLE only upon presentation and surrender at the principal
payment office of the Paying Agent/Registrar, duly endorsed for transfer or accompanied by an
13
assignment duly executed by the registered owner or his authorized representative, subject to the
terms and conditions of the Resolution.
THE BONDS ARE EXCHANGEABLE at the principal payment office of the Paying
Agent/Registrar for Bonds in the principal amount of $5,000 or any integral multiple thereof,
subject to the terms and conditions of the Resolution.
THE REGISTERED OWNER of this Bond, by acceptance hereof, acknowledges and
agrees to be bound by all the terms and conditions of the Resolution.
THE CORPORATION has covenanted in the Resolution that it will at all times provide
a legally qualified paying agent and registrar for the Bonds and will cause notice of any change
of registrar to be mailed to each registered owner.
THE CORPORATION HAS RESERVED THE RIGHT to issue additional parity bonds,
subject to the restrictions contained in the Resolution, which may be equally and ratably payable
from, and secured by a first lien on and pledge of, the Pledged Revenues in the same manner
and to the same extent as this Bond and the series of which it is a part.
IT IS HEREBY DECLARED AND REPRESENTED that this Bond has been duly and
validly issued and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and be done precedent to or in the issuance and delivery of this Bond have
been performed, existed, and been done in accordance with law; that the Bonds do not exceed
any statutory limitation; and that provision has been made for the payment of the principal of
and interest on this Bond and all of the Bonds by the creation of the aforesaid lien on and pledge
of the Pledged Revenues.
FORM OF REGISTRATION CERTIFICA~
THE STATE OF TEXAS
OFFICE OF THE COMPTROLL~ OF PUBLIC ACCOUNTS
REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity and approved
by the Attorney General of the State of Texas, and that this Bond has been registered by the
Comptroller of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL OF OFFICE this
(SEAL)
Comptroller of Public Accounts
of the State of Texas
14
FORM OF AUTHENTICATION CERTIFICATE
AUTHENTICATION CERTIFICATE
This Bond is one of the Bonds described in and delivered pursuant to the within-
mentioned Resolution, and, except for the Bonds initially delivered, this Bond has been issued
in exchange for or replacement of a Bond, Bonds or a portion of a Bond or Bonds 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.
Texas Commerce Bank National
Association
Dallas, Texas
By:
Authorized Signature
Date of Authenticatiom
STATEMENT OF INSURANCE
MBIA Insurance Corporation (the "Insurer") has issued a policy containing the following
provisions, such policy being on f'fle at TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, HOUSTON, TEXAS.
The Insurer, in consideration of the payment of the premium and subject to the terms of
this policy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter
defined, of the following described bonds, the full and complete payment required to be made
by or on behalf of the Corporation to TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, HOUSTON, TEXAS or its successor (the "Paying AgentM) of an amount equal
to (i) the principal of (either at the stated maturity or by any advancement of maturity pursuant
to a mandatory sinking fund paymen0 and interest on, the Bonds (as that term is defined below)
as such payments shall become due but shall not be so paid (except that in the event of any
acceleration of the due date of such principal by reason of mandatory or optional redemption or
acceleration resulting from default or otherwise, other than any advancement of maturity
pursuant to a mandatory sinking fund payment, the payments guaranteed hereby shall be made
in such amounts and at such times as such payments of principal would have been due had there
not been any such acceleration); and (ii) the reimbursement of any such payment which is
subsequently recovered from any owner pursuant to a final judgment by a court of competent
jurisdiction that such payment constitutes an avoidable preference to such owner within the
meaning of any applicable bankruptcy law. The amounts referred to in clauses (i) and (ii) of
the preceding sentence shall be referred to herein collectively as the "Insured Amounts.M
"Bonds~ shall mean:
15
PEARLAND ECONOMIC DEVELOPMENT CORPORATION
xAs)
SALES TAX REVENUE BONDS,
SERIES 1997
Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in
writing by registered or certified mail, or upon receipt of written notice by registered or certified
mail, by the Insurer from the Paying Agent or any owner of a Bond the payment of an Insured
Amount for which is then due, that such required payment has not been made, the Insurer on
the due date of such payment or within one business day after receipt of notice of such
nonpayment, whichever is later, will make a deposit of funds, in an account with State Street
Bank and Trust Company, N.A., in New York, New York, or its successor, sufficient for the
payment of any such Insured Amounts which are then due. Upon presentment and surrender
of such Bonds or presentment of such other proof of ownership of the Bonds, together with any
appropriate instruments of assignment to evidence the assignment of the Insured Amounts due
on the Bonds as are paid by the Insurer, and appropriate instruments to effect the appointment
of the Insurer as agent for such owners of the Bonds in any legal proceeding related to payment
of Insured Amounts on the Bonds, such instruments being in a form satisfactory to State Street
Bank and Trust Company, N.A., State Street Bank and Trust Company, N.A. shall disburse to
such owners or the Paying Agent payment of the Insured Amounts due on such Bonds, less any
amount held by the Paying Agent for the payment of such Insured Amounts and legally available
therefor. This policy does not insure against loss of any prepayment premium which may at any
time be payable with respect to any Bond.
As used herein, the term "owner" shall mean the registered owner of any Bond as
indicated in the books maintained by the Paying Agent, the Corporation, or any designee of the
Issuer for such purpose. The term owner shall not include the Corporation or any party whose
agreement with the Corporation constitutes the underlying security for the Bonds.
Any service of process on the Insurer may be made to the Insurer at its offices located
at 113 King Street, Armonk, New York 10504 and such service of process shall be valid and
binding.
This policy is non-cancellable for any reason. The premium on this policy is not
refundable for any reason including the payment prior to maturity of the Bonds.
DISCLOSURE OF GUARANTY FUND NONPARTICIPATION: In the event the Insurer is
unable to fulfill its contractual obligation under this policy or contract or application or
certificate or evidence of coverage, the policyholder or certificateholder is not protected by an
insurance guaranty fund or other solvency protection arrangement.
MBIA Insurance Corporation
16
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 fights thereunder, and hereby irrevocably constitutes and appoints
attorney totransfer said
Bond on the books kept for registration thereof, with full power of substitution in the premises.
DATED:
Signature Guaranteed:
NOTICE: Signature must be
guaranteed by a member firm of
the New York Stock exchange or
a commercial bank or trust company.
Registered Owner
NOTICE: The signature above must correspond to
the name of the registered owner as shown on the
face of this Bond in every particular, without
any alteration, enlargement or change whatsoever.
Section 4.2: .Legal .Opinion: Cusip Numbers. The approving opinion of Mayor, Day,
Caldwell & Keeton, L.L.P., Houstotl, Texas, and CUSIP Numbers may be printed on the Bonds,
but errors or omissions in the printing of such opinion or such numbers shall have no effect on
the validity of the Bonds.
ARTICLE V
SECURITY AND SOURCE OF
pAYMENT FOR ALL PARITY BONDS
Section 5.1' Pledge and Source of Payment. The Corporation hereby covenants and
agrees that all Pledged Revenues shall be deposited and paid into the special funds established
in Section 5.2 of this Resolution, and shall be applied in the manner set out herein, to provide
for the payment of principal, interest and any redemption premium of the Parity Bonds and all
expenses of paying the same. The Parity Bonds shall constitute special obligations of the
Corporation that shall be payable solely from, and shall be equally and ratably secured by a fu'st
lien on, the Pledged Revenues, as collected and received by the Corporation, which Pledged
Revenues shall, in the manner herein provided, be set aside and pledged to the payment of the
Parity Bonds in the Debt Service Fund and Reserve Fund, and any excess Sales Tax Revenues
shall be set aside in the Surplus Fund as hereinafter provided, and the Parity Bonds shall be in
all respects on a parity with and of equal dignity with one another. The owners of the Parity
17
Bonds shall never have the right to demand payment out cf any funds raised or to be raised by
ad valorem taxation. The owners of the Parity Bonds shall never have the right to demand
payment from Sales Tax Revenues in excess of those collected from the Sales Tax.
Section 5,2: Special Funds. The following special funds are hereby created, and such
funds shall be maintained and accounted for as hereinafter provided, so long as any Parity Bonds
remain Outstanding:
(a) Sales Tax Revenue Fund (the "Revenue Fund");
CO)
Fund");
Sales Tax Revenue Bonds, Series 1997 Debt Service Fund (the UDebt Service
(c) Sales Tax Revenue Bonds, Series 1997 Reserve Fund (the ~Reserve Fund'); and
(d) Sales Tax Surplus Fund (the "Surplus Fund").
The Revenue Fund and the Surplus Fund shall be maintained and accounted for as separate
accounts on the books of the Corporation. The Debt Service Fund and any moneys held in the
Reserve Fund shall be maintained at an official depository bank of the Corporation separate and
apart from all other funds and accounts of the City or the Corporation and shall constitute trust
funds which shall be held in trust for the benefit of the Owners of the Parity Bonds and the
proceeds of which shall be and are hereby pledged to the payment of the Parity Bonds. All of
the funds named above shall be used solely as provided herein so long as any Parity Bonds
remain Outstanding.
Section 5,3: Fl0w of Funds. Ail Pledged Revenues shall be deposited as collected into
the Revenue Fund. Money from time to time on deposit to the credit of the Revenue Fund shall
be applied as follows in the following order or priority:
(a) First, to make all deposits into the Debt Service Fund required by this Resolution,
and any resolution authorizing the issuance of Additional Parity Bonds;
Co)
Resolution;
Second, to make any rebate payments required pursuant to Section 9.5 of this
(c) Third, to reimburse the Reserve Fund Surety Bond Insurer and any other issuer
of a surety bond issued in satisfaction of the Reserve Fund Requirement, any amounts advanced
under the Reserve Fund Surety Bond or such other surety bonds;
(d) Fourth, to pay interest to the Reserve Fund Surety Bond Insurer and any other
issuer of a surety bond issued in satisfaction of the Reserve Fund Requirement, for any mounts
advanced under the Reserve Fund Surety Bond or such other surety bonds;
(e) Fifth, to make all deposits into the Reserve Fund required by this Resolution, and
any resolution authorizing the issuance of Additional Parity Bonds;
i8
(f) Sixth, to make the transfers required by any resolutions authorizing the issuance
or incurrence of subordinate lien obligations (subject to the prior requirements of any resolutions
authorizing the issuance of Additional Parity Bonds); and
(g) Seventh, to make all deposits into the Surplus Fund as required by this Resolution,
said funds to be used for any lawful purpose.
Whenever the total amounts on deposit to the credit of the Debt Service Fund and the Reserve
Fund shall be equivalent to the sum of the aggregate principal amount of all Outstanding Parity
Bonds plus the aggregate amount of all interest accrued and to accrue thereon, no further
payments need be made into the Debt Service Fund or the Reserve Fund.
Section 5.4: .D. ebt Service Fund. On or before the last Business Day of each month,
beginning May, 1997, there shall be deposited into the Debt Service Fund from the Revenue
Fund such amounts as are necessary to accumulate the amount required to pay the Initial Debt
Service Requirement on the Bonds. Once such amount has been accumulated, on or before the
last Business Day of each month so long as any Parity Bonds remain outstanding, there shall be
transferred into the Debt Service Fund from the Revenue Fund such amounts as will be sufficient
to accumulate the amount required to pay the Debt Service Requirement scheduled to become
due on the Parity Bonds during the Corporation's current fiscal year.
If in any month the Corporation shall fail to make the full transfer to the Debt Service
Fund required by this Resolution, amounts equivalent to such deficiency shall be transferred to
the Debt Service Fund from the first available and unallocated money in the Revenue Fund in
the following month or months, and such transfers shall be in addition to the other amounts
required to be transferred to the Debt Service Fund.
Money deposited to the credit of the Debt Service Fund shall be used soley for the
purpose of paying principal (at maturity or prior redemption or to purchase Parity Bonds issued
as term bonds in the open market to be credited against mandatory redemption requirements),
interest, and any redemption premium on the Parity Bonds, plus all bank charges and other costs
and expenses related to such payment. On or before each principal and/or Interest Payment Date
on the Parity Bonds, the Corporation shall transfer from the Debt Service Fund to the paying
agents an amount equal to the principal, interest and any redemption premium payable on the
Parity Bonds on such date, together with an amount equal to all bank charges and other costs
and expenses relating to such payment. The paying agents shall totally destroy all paid Parity
Bonds and shall provide the Corporation with an appropriate certificate of destructiOn.
Section 5.5: Reserve Fund. The Corporation shall initially deposit in the Reserve Fund,
within five years from the date of delivery of the Bonds, in equal monthly installments, an
amount which after such five-year period shall equal the Reserve Fund Requirement. After such
five-year period, so long thereafter as the Reserve Fund contains such amount, no deposits shall
be required to be made into the Reserve Fund, and any excess amounts may be transferred to
the Revenue Fund, the Debt Service Fund or the Surplus Fund. But, if and whenever the
balance in the Reserve Fund is reduced below such amount, monthly deposits into the Reserve
Fund from the fLrSt available and unallocated money in the Revenue Fund shall be resumed and
continued until the Reserve Fund has been restored to such amount. The Reserve Fund shall
19
be used to pay the principal of and interest on the Parity Bonds at any time when there is not
sufficient money available in the Debt Service Fund for such purpose and it may be used finally
to pay and retire the last Parity Bonds to mature or be redeemed.
In lieu of cash or investments, the Reserve Fund Requirement may be satisfied in whole
or in part with one or more surety bonds issued by an insurance company rated in the highest
rating category by Standard & Poor's Ratings Group and Moody's Investors Service, and, if
rated by A.M. Best & Company, also rated in the highest rating category by A.M. Best &
Company, including the Reserve Fund Surety Bond pursuant to the Financial Guaranty
Agreement, a form of which is attached hereto as Exhibit G, the terms and provisions of which
are hereby approved. The President is hereby authorized and directed to execute and deliver
such Financial Guaranty Agreement on behalf of the Corporation, in multiple counterparts and
the Secretary is hereby authorized to attest thereto, together with such changes, additions,
deletions and amendments thereto as such officers shall deem necessary or appropriate. Such
Reserve Fund Surety Bond may be drawn upon only after all cash or investments held in the
Reserve Fund have been used or applied. If the Reserve Fund Requirement is satisfied with the
Reserve Fund Surety Bond and one or more surety bonds authorized under this Section, draws
on the Reserve Fund Surety Bond and such other surety bonds shall be made on a pro rata basis.
Notwithstanding anything in this Resolution to the contrary, the Bonds may not be
redeemed pursuant to Section 3.4 unless all mounts owed to the Reserve Fund Surety Bond
Insurer pursuant to the Financial Guaranty Agreement have been paid in full.
Section 5.6: Surplus Fund. After making any transfers which may be required into the
Debt Service Fund, the Reserve Fund, or any other fund or. funds created in any resolution
authorizing the issuance of Parity Bonds, any money remaining in the Revenue Fund shall be
considered surplus, and may be deposited into the Surplus Fund and used by the Corporation
for any lawful purpose.
Section.5.,7: Deficiencie~ in Fund~. If in any month there shall not be deposited into any
Fund maintained pursuant to this Article the full amounts required herein, amounts equivalent
to such deficiency shall be set apart and paid into such Fund or Funds from the first available
and unallocated money in the Revenue Fund, and such payment shall be in addition to the
amounts otherwise required to be paid into such Funds during the succeeding month or months.
Section 5.8: Investment of Funds; Transfer 'of Investment Income. Money in the
Revenue Fund, the Debt Service Fund and the Reserve Fund may, at the option of the
Corporation, be invested in time deposits or certificates of deposit of commercial banks secured
in the manner required by law for public funds and insured by the Federal Deposit Insurance
Corporation to the maximum extent permitted by law, or be invested in direct obligations of,
or obligations fully guaranteed by, the United States of America, or in any other investments
authorized by Texas law; provided that ail such deposits and investments shall be made in such
manner that the money required to be expended from the any Fund will be available at the
proper time or times, and provided further that in no event shall such deposits or investments
of money in the Reserve Fund mature later than the final maturity date of the Parity Bonds. All
such investments shall be valued in terms of current market value as of the last Business Day
20
of the Corporation's fiscal year. Any obligation in which money is so invested shall be kept and
held in the official depository bank of the Corporation at which the Fund is maintained from
which the investment was made. Ail such investments shall be promptly sold when necessary
to prevent any default in connection with the Parity Bonds.
All interest and income derived from such deposits and investments shall be transferred
or credited as received to the Revenue Fund, and shall constitute Pledged Revenues.
Section 5.9: Security for Uninvestex!..Funds. So long as any Parity Bonds remain
outstanding, all uninvested money on deposit in, or credited to, the Revenue Fund, the Debt
Service Fund and the Reserve Fund shall be secured by the pledge of security, as provided by
Texas law.
ARTICLE VI
ADDITIONAL BONDS
Section 6.1: Additional Parity Bonds. The Corporation reserves the right to issue, for
any purpose authorized under the Act (including the refunding of any previously issued Parity
Bonds or any other bonds or obligations of the Corporation issued in connection with or payable
from Sales Tax Revenues), one or more series of Additional Parity Bonds payable from and
secured by a first lien on the Pledged Revenues, on a parity with the Bonds, and any previously
issued Additional Parity Bonds; provided, however, that no Additional Parity Bonds may be
issued unless:
(a) The Additional Parity Bonds mature on, and interest is payable on, the same days
of the year as the Bonds;
Co) The Debt Service Fund and the Reserve Fund each contains the amount of money
then required to be on deposit therein;
(c) For any twelve (12) consecutive months of the preceding 18-month period
immediately preceding the month in which the resolution authorizing such Additional Parity
Bonds is adopted (the "Base Period"), the Pledged Revenues were equal to at least 140% of the
maximum annual principal and interest requirements on all Parity Bonds that will be outstanding
after the issuance of the series of Additional Parity Bonds then proposed to be issued, as
certified by the President of the Corporation, an authorized officer of the City, or by an
independent certified public accountant or finn of independent certified public accountants;
provided, however, that this requirement shall not appiy to the issuance of any series of
Additional Parity Bonds for refunding purposes that will have the result of reducing the
maximum annual principal and interest requirements on Parity Bonds; and
(d) Provision is made in the resolution authorizing the Additional Parity Bonds then
proposed to be issued that (1) additional deposits will be made into the Debt Service Fund
sufficient to provide for the principal and interest requirements on the Additional Parity Bonds
and (2) deposits will be made into the Reserve Fund of such amount, or one or more surety
bonds will be provided, so that it will contain a balance not less than the Reserve Fund
21
Requirement on all Parity Bonds that will be outstanding after the issuance of such series of
Additional Parity Bonds.
Section 6.2: Subordinate Lien Bonds. The Corporation reserves the right to issue, for
any purpose authorized under the Act, bonds, notes or other obligations secured in whole or in
part by liens on the Pledged Revenues that are junior and subordinate to the lien on Pledged
Revenues securing payment of the Parity Bonds. Such subordinate lien obligations may be
further secured by any other source of payment lawfully available for such purposes.
ARTICLE VII
PAYING AGENT/REGISTRAR
Section 7.1: Paying Agen.t/Registrar; Computation of Amount of Interest. (a) Texas
Commerce Bank National Association, Dallas, Texas is hereby appointed Paying Agent and
Registrar for the Bonds, and the Corporation declares its intention to enter into a Paying
Agent/Registrar Agreement with Texas Commerce Bank National Association, Dallas, Texas.
The Paying Agent/Registrar Agreement shall be substantially in the form attached hereto as
Exhibit B, the terms and provisions of which are hereby approved, and the President is hereby
authorized and directed to execute and deliver such Paying Agent/Registrar Agreement on behalf
of the Corporation, in multiple counterparts and the Secretary is hereby authorized to attest
thereto and affix the Corporation's seal, together with such changes, additions, deletions and
amendments thereto as such officers shall deem necessary or appropriate. 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
Corporation and/or the deposits of money pursuant to this Resolution, shall be deemed to accept
and agree to abide by the terms of this Resolution.
(b) All money transferred to the Paying Agent/Registrar by the Corporation under this
Resolution (except sums representing Paying Agent/Registrar's fees) shall be held in trust for
the benefit of the Registered Owners, shall be the property of the Corporation, and shall be
disbursed in accordance with this Resolution.
(c) The Paying Agent/Registrar, in its individual or any other capacity, may become
an Owner or pledgee of Bonds with the same rights it would have if it was not the Paying/Agent
Registrar.
(d) The dollar amount of interest due and payable from time to time shall be
computed by the Paying Agent/Registrar.
(e) The Paying Agent/Registrar shall hold in escrow on behalf of the Corporation the
Bonds initially issued by the Corporation and approved by the Attorney General and shall deliver
such Bonds to the Bank in accordance with this Resolution and the Bond Purchase Agreement.
(f) Amounts held by the Paying Agent/Registrar which represent principal of and
interest on the Bonds remaining unclaimed by the Owner after the expiration of three O) years
22
from the date such amounts have become due and payable shall be reported and disposed of by
the Paying Agent/Registrar in accordance with the applicable provisions of Texas law including,
to the extent applicable, Title 6 of the Texas Property Code, as amended.
(g) The Paying Agent/Registrar shall deliver a written demand for payment, in a form
acceptable to the Reserve Fund Surety Bond Insurer at least three business days prior to the date
on which a draw under the Reserve Fund Surety Bond will be required. The Paying
Agent/Registrar shall maintain adequate records, verified with the Reserve Fund Surety Bond
Insurer, regarding the amount available to be drawn at any given time under the Reserve Fund
Surety Bond and regarding to the amounts paid and owing to the Reserve Fund Surety Bond
Insurer under the terms of the Financial Guaranty Agreement.
Section 7,2: Successor .Paying Agents/Registrars. If the Paying Agent/Registrar or its
successors become unable for any reason to act as Paying Agent/Registrar hereunder, the
Corporation covenants that it will appoint a qualified bank as the Paying Agent/Registrar initially
appointed to perform the duties of Paying Agent/Registrar which shall be either a national or
state banking institution and a corporation organized and doing business under the laws of the
United States of America or any state thereof, which is authorized under such laws to exercise
trust powers and is subject to supervision or examination by federal or State authority, having
a reported capital and surplus of not less than $75,000,000. No successor Paying
Agent/Registrar shall be appointed unless the Corporation shall have the first given 60 days'
written notice, by first class mail, to each Registered Owner of Bonds.
ARTICLE VIII
COVENANTS AND PROVISIONS
RELATING TO ALL PARITY BONDS
Section 8.1: Punctual Payment of Parity. Bonds. The Corporation will punctually pay
or cause to be paid the interest on and principal of all Parity Bonds according to the terms
thereof and will faithfully do and perform, and at all times fully observe, any and all covenants,
undertakings, stipulations and provisions contained in this Resolution and in any resolution
authorizing the issuance of Additional Parity Bonds.
Section 8.2: Accounts, Records, and Audits. So long as any Parity Bonds remain
outstanding, the Corporation covenants and agrees that it will maintain a proper and complete
system of records and accounts in which full, true and proper entries will be made of all
dealings, transactions, business and affairs which in any way affect or pertain to the Sales Tax
Revenues or the Pledged Revenues. The Corporation shall after the close of each of its fiscal
years cause an audit report of such. records and accounts to be prepared by an independent
certified public accountant or independent firm of certified public accountants. Each year
promptly after such audit report is prepared, the Corporation shall furnish a copy thereof without
cost to the Municipal Advisory Council of Texas, the major municipal rating agencies and any
owners of Parity Bonds who shall request same.
Section 8.3: Pledge and Encumbrance of PI.edged Revenues. The Corporation covenants
and represents that it has the lawful power to create a lien on and to pledge the Pledged
23
Revenues to secure the payment of the Parity Bonds and has lawfully exercised such power
under the Constitution and laws of the State of Texas. The Corporation further covenants and
represents that, other than to the payment of the Parity Bonds, the Pledged Revenues are not and
will not be made subject to any other lien pledge or encumbrance to secure the payment of any
debt or obligation of the Corporation, unless such lien, pledge or encumbrance is junior and
subordinate to the lien and pledge securing payment of the Parity Bonds.
Section 8.4: Bondowners' Remedies. This Resolution shall constitute a contract between
the Corporation and the Owners of the Parity Bonds from time to time outstanding and this
Resolution shall be and remain irrepealable until the Parity Bonds and the interest thereon shall
be fully paid or discharged or provision therefor shall have been made as provided herein. In
the event of a default in the payment of the principal of or interest on any of the Parity Bonds
or a default in the performance of any duty or covenant provided by law or in this Resolution,
the Owner or Owners of any of the Parity Bonds may pursue all legal remedies afforded by the
Constitution and laws of the State of Texas to compel the Corporation to remedy such default
and to prevent further default or defaults. Without in any way limiting the generality of the
foregoing, it is expressly provided that any Owner of any of the Parity Bonds may at law or in
equity, by suit, action, mandamus, or other proceedings, enforce and compel performance of
all duties required to be performed by the Corporation under this Resolution, including the
deposit of the Pledged Revenues into the special funds herein provided, and the application of
such Pledged Revenues in the manner required in this Resolution.
.Section 8.5: Discharge by Deposit. The Corporation may discharge its obligation to the
Owners of any or all of the Parity Bonds to pay principal, interest and redemption premium (if
any) thereon in any manner then permitted by law, including by depositing with any paying
agent for such Parity Bonds either: (i) cash in an amount equal to the principal amount and
redemption premium, if any, of such Parity Bonds plus interest thereon to the date of maturity
or redemption, or (ii) pursuant to an escrow or trust agreement, cash and/or direct obligations
of the United States of America, in principal amounts and maturities and bearing interest at rates
sufficient to provide for the timely payment of the principal amount and redemption premium,
if any, of such Parity Bonds plus interest thereon to the date of maturity or redemption;
provided, however, that if any of such Parity Bonds are to be redeemed prior to their respective
dates of maturity, provision shall have been made for giving notice of redemption as provided
in the resolution authorizing such Parity Bonds. Upon such deposit, such Parity Bonds shall no
longer be regarded to be outstanding or unpaid.
Notwithstanding anything herein to the contrary, in the event that the principal and/or
interest due on the Bonds shall be paid by the Bond Insurer pursuant to the Bond Insurance
Policy, the Bonds shall remain outstanding for all purposes, not be defeased or otherwise
satisfied and not be considered paid by the Corporation, and the assignment and pledge of all
covenants, agreements and other obligations of the Corporation to the Owners shall continue to
exist and shall run to the benefit of the Bond Insurer, and the Bond Insurer shall be subrogated
to the rights of such Owners.
.Section 8..6,: Payjog Agents .May Own Parity Bonds. The paying agents for the Parity
Bonds, in their individual or any other capacity, may become holders or pledgees of the Parity
Bonds with the same rights they would have if they were not paying agents.
24
..Section 8.7: NO Recourse Against Corporation Officers. No recourse shall be had for
the payment of principal of or interest on any Parity Bonds or for any claim based thereon or
on this Resolution against any officer of the Corporation or any person executing any Parity
Bonds.
ARTICLE IX
PROVISIONS CONCERNING SALE AND
APPLICATION OF PROCEEDS OF BONDS
Section 9.1: Sale of. Bonds; Insurance. The sale of the Bonds to First Southwest
Company (the ~Purchaser') at a price of the par value thereof plus accrued interest on the
Bonds, is hereby approved, and delivery of the Bonds to the Purchaser shall be made upon
payment therefor in accordance with the terms of sale and the terms and conditions of the
Purchaser's bid. It is hereby officially found, determined and declared that the Purchaser is the
highest bidder for the Bonds as a result of invitations for competitive bids. It is further officially
found, determined and declared that the Bonds have been sold at public sale to the bidder
offering the lowest interest cost, which is hereby determined to be a net effective interest rate
of 5.605445 %, after receiving sealed bids pursuant to an Official Notice of Sale and Preliminary
Official Statement prepared and distributed in connection with the sale of the Bonds.
The Corporation hereby acknowledges that the Purchaser's bid is contingent upon the
issuance of a policy of municipal bond guaranty insurance, from the Bond Insurer insuring the
timely payment of principal of and interest on the Bonds. Such insurance is to be obtained at
the Purchaser's expense. The appropriate officials and representatives of the Corporation are
hereby authorized and directed to execute such documents and certificates and to do any and all
things necessary or desirable to obtain such insurance, and the printing on the Bonds of an
appropriate legend or statement regarding such insurance, as provided by the Bond Insurer, is
hereby approved.
Section 9.2: Approval. Registration and Delivery_. The President of the Corporation is
hereby authorized to have control and custody of the Bonds and all necessary records and
proceedings pertaining thereto pending their delivery, and the President and other appropriate
officers of the Corporation are hereby authorized and directed to make such certifications and
to execute such instruments as may be necessary to accomplish the delivery of the Bonds and
to assure the investigation, examination and approval thereof by the Attorney General and the
registration of the initial Bonds by the Comptroller. Upon registration of the Bonds, 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 to be attached or affixed to each Bond initially delivered and the seal of the
Corporation shall be impressed or printed or lithographed thereon.
Section 9.3: ,Offering Documents; Ratings. The Board of Directors of the Corporation
hereby ratifies, authorizes and approves, in connection with the sale of the Bonds, the
preparation and distribution of the Official Notice of Sale, Official Bid Form and the Preliminary
Official Statement, a copy of which is attached hereto as Exhibit C. A form of final Official
Statement is attached hereto as Exhibit D, which is substantially the same as the Preliminary
25
Official, except for the additional information necessary to conform the final Official Statement
to the terms of this Resolution.
Further, the Board of Directors of the Corporation hereby ratifies, authorizes and
approves the actions of the President, the Corporation's financial advisor and other consultants
in seeking ratings on the Bonds from one or more of Moody's Investors Service, Inc. or
Standard Poor's Ratings Group, and such actions are hereby ratified and confirmed.
Section 9,4: Application, of Proceedv of Bonds; Appropriation. Proceeds from the sale
of the Bonds shall, promptly upon receipt by the Corporation, be applied as follows:
0)
Accrued interest shall be deposited into the Debt Service Fund created in
Section 5.2 of this Resolution;
(ii)
A portion of the proceeds shall be applied to pay expenses arising in
connection with the issuance of the Bonds, including payment of the
premiums for the Reserve Fund Surety Policy, if any; and
(iii)
The remaining proceeds shall be deposited into the Construction Fund,
which is hereby created by the Corporation, to be used for the purposes
permitted by the Act, including particularly acquiring and constructing
street and bridge improvements within the City, all under and pursuant to
the authority of the Act.
Section 9,5: Tax Exemption. The Corporation intends that the interest on the Bonds
shall be excludable from gross income of the owners thereof for federal income tax purposes
pursuant to Sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as
amended, (the "Code") and all applicable temporary, proposed and final regulations (the
"Regulations") and procedures promulgated thereunder ~.d applicable to the Bonds, For this
purpose, the Corporation covenants that it will monitor and control the receipt, investment,
expenditure and use of all gross proceeds of the Bonds (including all property the acquisition,
construction or improvement of which is to be financed directly or indirectly with the proceeds
of the Bonds) and take or omit to take such other and further actions as may be required by
Sections 103 and 141 through 150 of the Code and'the Regulations to cause interest on the
Bonds to be and remain excludable from the gross income, as defined in Section 61 of the Code,
of the owners of the Bonds for federal income tax purposes. Without limiting the generality of
the foregoing, the Corporation shall comply with each of the following covenants:
(a) The Corporation will use all of the proceeds of the Bonds (i) for purposes
permitted by the Act, including particularly to provide funds for the acquisition and construction
of street and bridge improvements within the City and (ii) to pay the costs of issuing the Bonds.
The Corporation will not use any portion of the proceeds of the Bonds to pay the principal of
or interest or redemption premium on, any other obligation of the Corporation or a related
person.
26
(b) The Corporation will not directly or indirectly take any action or omit to take any
action, which action or omission would cause the Bonds to constitute "private activity bonds~
within the meaning of Section 141(a) of the Code.
(c) Principal of and interest on the Bonds will be paid solely from Pledged Revenues
(as defined herein) collected by the Corporation, investment earnings on such collections, and
as available, proceeds of the Bonds.
(d) Based upon all facts and estimates now known or reasonably expected to be in
existence on the date the Bonds are delivered, the Corporation reasonably expects that the
proceeds of the Bonds will not be used in a manner that would cause the Bonds or any portion
thereof to be an "arbitrage bond" within the meaning of Section 148 of the Code.
(e) At all times while the Bonds are outstanding, the Corporation will identify and
properly account for all amounts constituting gross proceeds of the Bonds in accordance with
the Regulations. The Corporation will monitor the yield on the investments of the proceeds of
the Bonds and, to the extent required by the Code and the Regulations, will restrict the yield on
such investments to a yield which is not materially higher than the yield on the Bonds. To the
extent necessary to prevent the Bonds from constituting "arbitrage bonds," the Corporation will
make such payments as are necessary to cause the yield on all yield restricted nonpurpose
investments allocable to the Bonds to be less than the yield that is materially higher than the
yield on the Bonds.
(f) The Corporation will not take any action or knowingly omit to take any action,
if taken or omitted, would cause the Bonds to be treated as ~federally guaranteed" obligations
for purposes of Section 149Co) of the Code.
(g) The Corporation represents that not more than fifty percent (50%) of the proceeds
of the Bonds will be invested in nonpurpose investments (as defined in Section 148(f)(b)(A) of
the Code) having a substantially guaranteed yield for four years or more within the meaning of
Section 149(g)(3)(A)(ii) of the Code, and the Corporation reasonably expects that at least eighty-
five percent (85%) of the spendable proceeds of the Bonds will be used to carry out the
governmental purpose of the Bonds within the three-year period beginning on the date of issue
of the Bonds.
(h) The Corporation will take all necessary steps to comply with the requirement that
certain amounts earned by the Corporation on the investment of the gross proceeds of the Bonds,
if any, be rebated to the federal government. Specifically, the Corporation will (i) maintain
records regarding the receipt, investment, and expenditure of the gross proceeds of the Bonds
as may be required to calculate such excess arbitrage profits separately from records of amounts
on deposit in the funds and accounts of the Corporation allocable to other obligations of the
Corporation or moneys which do not represent gross proceeds of any obligations of the
Corporation and retain such records for at least six years after the day on which the last
outstanding Bond is discharged, (ii) account for all gross proceeds under a reasonable,
consistently applied method of accounting, not employed as an artifice or device to avoid in
whole or in part, the requirements of Section 148 of the Code, including any specified method
of accounting required by applicable Regulations to be used for all or a portion of any gross
27
proceeds, (iii) calculate, at such times as are required by applicable Regulations, the amount of
excess arbitrage profits, if any, earned from the investment of the gross proceeds of the Bonds
and (iv) timely pay, as required by applicable Regulations, all amounts required to be rebated
to the federal government. In addition, the Corporation will exercise reasonable diligence to
assure that no errors are made in the calculations required by the preceding sentence and, if such
an error is made, to discover and promptly correct such error within a reasonable amount of
time thereafter, including payment to the federal government of any delinquent amounts owed
to it, interest thereon and any penalty.
(i) The Corporation will not directly or 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 pro-
ceeds 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 such arrangement had been at arm's length and had the yield on the
Bonds not been relevant to either party.
(j) The Corporation will timely file or cause to be filed with the Secretary of the
Treasury of the United States the information required by Section 149(e) of the Code with
respect to the Bonds on such form and in such place as the Secretary may prescribe.
(k) The Corporation will not issue or use the Bonds as part of an "abusive arbitrage
device" (as defined in Section 1.148-10(a) of the Regulations). Without limiting the foregoing,
the Bonds are not and will not be a part of a transaction or series of transactions that attempts
to circumvent the provisions of Section 148 of the Code and the Regulations, by (i) enabling the
Corporation to exploit the difference between tax-exempt and taxable interest rates to gain a
material financial advantage, or (ii) increasing the burden on the market for tax-exempt
obligations.
(1) Proper officers of the Corporation charged with the responsibility for issuing the
Bonds are hereby directed to make, execute and deliver certifications as to facts, estimates or
circumstances in existence as of the date of issuance of the Bonds and stating whether there are
facts, estimates or circumstances that would materially change the Corporation's expectations.
On or after the date of issuance of the Bonds, the Corporation will take such actions as are
necessary and appropriate to assure the continuous accuracy of the representations contained in
such certificates.
(m) The covenants and representations made or required by this Section are for the
benefit of the Bond holders and any subsequent Bond holder, and may be relied upon by the
Bond holders and any subsequent Bond holder and bond counsel to the Corporation.
In complying with the foregoing covenants, the Corporation may rely upon an unqualified
opinion issued to the Corporation by nationally recognized bond counsel that any action by the
Corporation or reliance upon any interpretation of the Code or Regulations contained in such
opinion will not cause interest on the Bonds to be includable in gross income for federal income
tax purposes under existing' law.
28
Notwithstanding any other provision of this resolution, the Corporation's representations
and obligations under the covenants and provisions of this Section 9.5 shall survive the
defeasance and discharge of the Bonds for as long as such matters are relevant to the exclusion
of interest on the Bonds from the gross income of the owners for federal income tax purposes.
ARTICLE X
~ISCELLANEOUS.
Section 10.1: Further Proceedings. The President, Secretary and other appropriate
officers of the Corporation are hereby authorized and directed to do any and all things necessary
and/or convenient to carry out the terms of this Resolution.
Section 10.2: Severability. If any section, paragraph, clause or provision of this
Resolution 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 Resolution.
Section 10.3: Open Meeting. It is hereby officially found and determined that the
meeting at which this Resolution was adopted was open to the public, and that public notice of
the time, place and purpose of said meeting was given, all as required by the Texas Open
Meetings Act.
Section 10.4: NO Personal Liability. No recourse shall be had for payment of the
principal of or interest on any Bonds or for any claim based thereon, or on this Resolution,
against any officer or employee of the Corporation or any person executing any Bonds.
Section 10.5: Parties Interested. Nothing in this Resolution or the Bonds, expressed or
implied, is intended or shall be construed to confer upon, or to give to, any person or entity,
other than the Corporation, the Paying Agent/Registrar and the Owners of the Bonds, any right,
remedy or claim under or by reason of this Resolution or any covenant, condition or stipulation
hereof, and all covenants, stipulations, promises and agreements in this Resolution shall be for
the sole and exclusive benefit of the Corporation, the Paying Agent/Registrar and the Owners
of the Bonds.
Section 10.6: Repealer. All orders, resolutions and ordinances, or parts thereof,
inconsistent herewith are hereby repealed to the extent of such inconsistency.
Section 10.7: Continuing Obligation. Notwithstanding any other provision of this
Resolution, the Corporation's obligations under the covenants and provisions of this Resolution
shall survive the defeasance and discharge of the Bonds.
29
Section ,10.8: Governing Law. This Resolution shall be construed in accordance with
and governed by the laws of the State of Texas.
Section 10.9: Effective Date. This Resolution shall become effective immediately upon
passage by this Corporation and signature of the President of the Corporation.
PASSED AND APPROVED this
ATTEST:
SECRETARY
(SEAL)
Exhibits:
B--
C-
D-
E--
F--
Debt Service Schedule
Paying Agent/Registrar Agreement
Preliminary Official Statement
Official Statement
Bond Insurance Commitment
Financial Guaranty Agreement
3O
EXHIBIT A
DEBT SERVICE SCHEDULE
SEE TAB NUMBER 14
EXHIBIT B
PAYING AGENT/REGISTRAR AGREEMENT
SEE TAB NUMBER 11
EXHIBIT C
PRELIMINARY OFFICIAL STATEMENT
SEE TAB NUMBER 12
EXHIBIT D
OFFICIAL STATEMENT
SEE TAB NUMB~ 13
EXHIBIT E
BOND INSURANCE COMMITMENT
COMMITMENT TO ISSUE A
FINANCIAL GUARANTY INSURANCE POLICY
Re: $5,000,000 Pearland Economic
Series 1997
(the "Obligations")
Application No.: 1997-001644-01
Sale Date: April 7, 1997
Program Type: Competitive OBP
Development Corporation, Sales Tax Revenue Bonds,
This commitment to issue a financial guaranty insurance policy (the "Commitment") dated
April 8, 1997, constitutes an agreemem between RAUSCHER PIERCE REFSNES, INC. the
("Applicant") and MBIA Insurance Corporation (the "Insurer"), a stock insurance company
incorporated under the laws of the State of New York.
Based on an approved application dated April 3, 1997, the Insurer agrees, upon satisfaction
of the conditions herein, to issue on the earlier of (i) 120 days of said approval date or (ii) on the
date of delivery of and payment for the Obligations, a financial guaranty insurance policy (the
"Policy") for the Obligations, insuring the payment of principal of and interest on the Obligations
when due. The issuance of the Policy shall be subject to the following terms and conditions:
1. Payment by the Applicant, or by the Trustee on behalf of the Applicant, on the date of
delivery of and payment for the Obligations, of a nonrefundable premium in the amount of
$24,100. The premium set out in this paragraph shall be the total premium required to be paid on
the Policy issued pursuant to this Commitment.
2. The Obligations shall have received the unqualified opinion of bond counsel with
respect to the tax-exempt status of interest on the Obligations.
3. There shall have been no material adverse change in the Obligations or the Resolution,
Bond Ordinance, Trust Indenture or other official document authorizing the issuance of the
Obligations or in the final official statement or other similar documem, including the financial
statements included therein.
4. There shall have been no material adverse change in any information submitted to the
Insurer as a part of the application or subsequently submitted to be a part of the application to the
Insurer.
5. No event shall have occurred which would allow an~, underwriter or any other purchaser
of the Obligations not to be required to purchase the Obligations at closing.
CERTIFICATE FOR RESOLUTION
STATE OF TEXAS
COUNTIES OF HARRIS AND BRAZORIA
We, the undersigned officers of the Board of Directors (the NBoard*) of the Pearland
Economic Development Corporation (the 'Corporation'), hereby certify as follows:
1. The Board of the Corporation convened in a regular meeting on April 7, 1997,
at the regular meeting place thereof, within the City of Pearland, Texas, and the roll was called
of the duly constituted officers and members of the Board, to-wit:
Dennis M. Frauenberger
Trieia Holland
Susan Lenamon
Connie Beaumont
Stella Roberts
Bill Berger
Vacant
President
Vice President
Secretary
Member
Member
Member
Member
and all of such persons were present except Dennis M.
quorum. Whereupon, among other business, the following
written
Frauenberger, thus constituting a
was transacted at such meeting: a
RESOLUTION AUTHORIZING THE ISSUANCE OF $5,000,000 PEARLAND
ECONOMIC DEVELOPMENT CORPORATION SALES TAX REVENUE
BONDS, SERIES 1997; AND CONTAINING OTHER PROVISIONS RELATED
THERETO
was duly introduced for the consideration of the Board and read in full. It was then duly moved
and seconded that said resolution be adopted; and, after due discussion, such motion, carrying
with it the adoption of said resolution, prevailed and carried by the following vote:
5 AYES 0 NOES
2. That a true, full and correct copy of the aforesaid resolution adopted at the
meeting described in the above and foregoing paragraph is attached to and follows this
certificate; that such resolution has been duly recorded in the Board's minutes of such meeting;
that the above and foregoing paragraph is a true, full and correct excerpt from the Board's
minutes of such meeting pertaining to the adoption of such resolution; that the persons named
in the above and foregoing paragraph are the duly chosen, qualified and acting officers and
members of the Board as indicated therein; that each of the officers and members of the Board
was duly and sufficiently not/fled officially and personally, in advance, of the date, hour, place
was duly and sufficiently notified officially and personally, in advance, of the date, hour, place
and purpose of the aforesaid meeting, and that the resolution would be introduced and considered
for adoption at such meeting, and each of such officers and members consented, in advance, to
the holding of such meeting for such purpose; that such meeting was open to the public as
required by law; and that public notice of the date, hour, place_and~t of such meeting was
given as required by Chapter 551, Texas Government Codei'as amended.~.......~
SIGNED AND SEALED this 7th day of April, 199~ ~
Secretary
(SEAL)
0377002.01
04970711118
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6 A Statement of Insurance satisfactory to the Insurer shall be printed on the Obligations.
7. Prior to the delivery of and payment for the Obligations, none of the information or
documents submitted as a part of the application to the Insurer shall be determined to contain any
untrue or misleading statement of a material fact or fail to state a material fact required to be
stated therein or necessary in order to make the statements contained therein not misleading.
8. No material adverse change affecting any security for the Obligations shall have occurred
prior to the delivery of and payment for the Obligations.
9. This Commitment may be signed in counterpart by the parties hereto.
Dated this 8th day of April, 1997.
MBIA Insurance Corporation
Assistant Secretary
RAUSCItER PIERCE REFSNES, INC.
By:
Title:
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0372071.02
069724/1356
EXHIBIT F
FINANCIAL GUARANTY AGREEMENT
SEE TAB NUMBER 31