RDAP-2012-10 - 2012-04Draft 4/20/2012
RESOLUTION DAP-2012-10
RESOLUTION AUTHORIZING THE ISSUANCE OF $ DEVELOPMENT
AUTHORITY OF PEARLAND TAX INCREMENT CONTRACT REVENUE AND
REFUNDING BONDS, SERIES 2012; APPROVING DOCUMENTS RELATING TO
THE SERIES 2012 BONDS; AND CONTAINING OTHER PROVISIONS RELATED
THERETO
BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE DEVELOPMENT
AUTHORITY OF PEARLAND:
ARTICLE I
RECITALS
WHEREAS, by Ordinance No. 891, adopted on December 21, 1998, the City of
Pearland (the "City") created Reinvestment Zone Number Two, City of Pearland, Texas
(the "TIRZ") pursuant to Chapter 311, Texas Tax Code, and by Ordinance No. 1276,
adopted on July 10, 2006, the City approved an annexation of land into the TIRZ; and
WHEREAS, by Ordinance No. 918, adopted on August 23, 1999, the City
approved a preliminary project plan for the TIRZ and a preliminary reinvestment zone
financing plan for the TIRZ, which it amended by Ordinance No. 1276, adopted on July
10, 2006, by Ordinance No. 1312 adopted on November 13, 2006, and by Ordinance No.
1314, adopted on November 13, 2006; and
WHEREAS, by Resolution No. 2004-107, adopted on June 28, 2004, the City
authorized the creation of the Development Authority of Pearland (the "Authority") to
aid, assist and act on behalf of the City in the performance of the City's governmental
and proprietary functions with respect to, and to provide financing for the TIRZ; and
WHEREAS, by Ordinance No. R2004-17, adopted on October 11, 2004, the City
approved and on October 5, 2004, the Boards of Directors of the TIRZ and the Authority
approved that certain Agreement by and between the City, the TIRZ, and the Authority,
as amended by Amendment No. 1 to the Tri-Party Agreement, dated September 17,
2007 (collectively, the "Tri-Party Agreement"), pursuant to which the City delegated to
the Authority the power and authority to issue, sell or deliver its bonds, notes or other
obligations in accordance with the terms of the Tri-Party Agreement; and
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WHEREAS, the Authority has issued its $13,995,000 Tax Increment Contract
Revenue Bonds, Series 2004, (the "Series 2004 Bonds'), its $9,775,000 Tax Increment
Contract Revenue Bonds, Series 2005 (the "Series 2005 Bonds'), its $9,970,000 Tax
Increment Contract Revenue Bonds, Series 2006 (the "Series 2006 Bonds"), its
$15,950,000 Tax Increment Contract Revenue Bonds, Series 2007 (the "Series 2007
Bonds"); and its $8,815,000 Tax Increment Contract Revenue Bonds, Series 2009 (the
"Series 2009 Bonds") (collectively, the "Refunded Bonds");
WHEREAS, the Authority now desires to issue bonds to refund the Refunded
Bonds and to pay Project Costs;
WHEREAS, the Authority wishes to refund the Refunded Bonds in order to
restructure the Authority's debt and that such refunding is in the best interests of the
Authority.
WHEREAS by Resolution No. adopted on 2012, the City
authorized the Authority to issue, sell, or deliver its Tax Increment Contract Revenue
and Refunding Bonds, Series 2012; and
WHEREAS, as permitted by the Act, the Authority desires to issue its Tax
Increment Contract Revenue and Refunding Bonds, Series 2012 upon the terms and
conditions and for the purposes herein provided.
ARTICLE II
DEFINITIONS AND INTERPRETATIONS
Section 2.1: Definitions. In this Resolution, the following terms shall have
the following meanings, unless the context clearly indicates otherwise. Terms not
defined herein shall have the meanings assigned to such terms in the Indenture:
The term "Applicable Rate" shall mean the lesser of (a) the highest rate permitted
by applicable law or (b) the LIBOR Rate plus two hundred basis points (2.0%) per
annum, with said rate to be adjusted every three months, every six months, every nine
months or every twelve months at the election of the Authority (each, an "Adjustment
Date") to reflect any change in said rate at the time of any such adjustment.
The term "Audit" shall mean the audited annual financial statements of the
Authority prepared by an independent auditor.
The term "Business Day" shall mean any day which is not a Saturday, Sunday, or
a day on which banking institutions in the city where the designated payment office of
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the Paying Agent/Registrar is located are authorized by law or executive order to close,
or a legal holiday.
The term "Comptroller" shall mean the Comptroller of Public Accounts of the
State of Texas.
The term "DTC" shall mean The Depository Trust Company of New York, New
York; or any successor securities depository.
The term "DTC Participant" shall mean brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations on whose behalf DTC
was created to hold securities to facilitate the clearance and settlement of securities
transactions among DTC Participants.
The term "Escrow Agent" shall mean [ Fargo Bank, N.A.,] or any successor
thereto.
The term "Escrow Agreement" shall mean that certain Escrow Agreement, dated
as of , 2012, by and between the Escrow Agent and the Authority.
The term "Escrow Fund" shall mean the fund created in Section of the
Escrow Agreement to be administered by the Escrow Agent pursuant to the provisions
of the Escrow Agreement.
The term "Fixed Rate" shall mean 3.07% per annum.
The term "Fixed Rate Period" shall mean May 22, 2012 through and including
May 21, 2022.
The term "Highest Lawful Rate" shall mean with respect to the Series 2012 Bonds
the maximum net effective interest rate permitted by law to be paid thereon as
provided by Chapter 1204, Texas Government Code, as amended, or any successor
thereto.
The term "Initial Series 2012 Bond" shall mean the Initial Series 2012 Bond
authorized by Section 3.4(d).
The term "Indenture" shall mean the Indenture of Trust dated as of May 1, 2012,
between the Authority and [Wells Fargo Bank, National Association], as Trustee.
The term "Interest Payment Date" shall mean, with respect to the Series 2012
Bonds, September 1, 2012, and each March 1 and September 1 thereafter until maturity
or redemption, or such other Interest Payment Date that is set forth in the Resolution.
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The term "Issuance Date" shall mean the date on which each such Series 2012
Bond is authenticated by the Paying Agent/Registrar and delivered to and paid for by
the Purchaser.
The term "LIBOR Rate" shall mean the London Interbank Offered Rate for three
(3) months, six (6) months, nine (9) months or twelve (12) months as published in The
Wall Street Journal under "Latest" in the "Money Rates" column on the banking day
immediately preceding the Adjustment Date (or, if such source is not available, such
alternate source as reasonably determined by the - Purchaser and approved by the
Authority). If the Adjustment Date in any particular month would otherwise fall on a
day that is not a banking day then, at Purchaser's option, the Adjustment Date for that
particular month will be the first banking day immediately following thereafter.
"Banking day" shall mean any day other than Saturday or Sunday or other day that
commercial banks in the State of Texas or London, England are authorized to close or
are in fact closed.
. The term "Maximum Rate" shall mean with respect to the Series 2012 Bonds, the
lesser of 6% per annum or the Highest Lawful Rate.
The term "Purchaser" shall mean the Capital One Bank, N.A. as initial purchaser
of the Series 2012 Bonds. J
The term "Paying Agent/Registrar" shall mean Capital One, N.A., and its
successors in that capacity.
The term "Record Date" shall mean, for any Interest Payment Date, the fifteenth
(15th) calendar day of the month next preceding each Interest Payment Date.
The term "Resolution" or "Bond Resolution" shall mean this Resolution
Authorizing the Issuance of $ Development Authority of Pearland Tax
Increment Contract Revenue and Refunding Bonds, Series 2012, and all amendments
hereof and supplements hereto.
The term "Series 2012 Bond" or "Series 2012 Bonds" shall mean the Authority's
Tax Increment Contract Revenue and Refunding Bonds, Series 2012 authorized by this
Resolution.
The term "Variable Rate Period" shall mean the period from and including any
Adjustment Date to and including the day immediately preceding the next following
Adjustment Date and beginning May 22, 2022. Each Variable Rate Period shall be three
(3), six (6), nine (9) or twelve (12) months as selected by the Corporation on each
Adjustment Date.
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Section 2.2: Interpretations. All terms defined herein and all pronouns used
in this Resolution shall be deemed to apply equally to singular and plural and to all
genders. The titles and headings of the articles and sections of this 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 III
TERMS OF THE SERIES 2012 BONDS
Section 3.1: Amount, Purpose, Authorization. The Series 2012 Bonds shall
be issued in the aggregate principal amount of $ for the purpose of (1) paying
Project Costs, (2) refunding the Refunded Bonds, and (3) paying Costs of Issuance, all
under and pursuant to the authority of the Act and all other applicable law. None of
the proceeds of the Series 2012 Bonds shall be used for the purpose of paying or
otherwise providing for educational facilities.
Section 3.2: Name, Designation, Date, and Interest Payment Dates. The
Series 2012 Bonds shall be designated as the "DEVELOPMENT AUTHORITY OF
PEARLAND TAX INCREMENT CONTRACT REVENUE AND REFUNDING BONDS,
SERIES 2012," shall be issued in fully registered form, without coupons and shall be
dated May 1, 2012 (the "Dated Date"). The Series 2012 Bonds shall bear interest at the
rates set forth in Section 3.3 from the later of the Dated Date, or the most recent Interest
Payment Date to which interest has been paid or duly provided for, calculated on the
basis of a 360-day year of twelve 30-day months, payable, semiannually on March 1 and
September 1, commencing September 1, 2012, until maturity or earlier redemption.
Section 3.3: Principal Amounts and Interest Rates: Numbers and
Denomination. The Series 2012 Bonds shall be initially issued in the principal amounts
and bearing interest at the rates set forth below, and may be transferred and exchanged
as set out in this Resolution. The Series 2012 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. The Series 2012 Bonds shall accrue
interest from the date of delivery until, but not including, May 17, 2022, at the Fixed
Rate. Beginning May 17, 2022, the interest rate shall reset on each Adjustment Date to
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the Applicable Rate for the corresponding Variable Rate Period with the first such
Adjustment Date being May 17, 2022, until the date of final maturity or prepayment
prior to maturity. The Initial Bond shall be numbered I-1 and all other Series 2012 Bonds
shall be numbered in sequence beginning with R-1. Series 2012 Bonds delivered on
transfer of or in exchange for other Series 2012 Bonds shall be numbered in the order of
their authentication by the Paying Agent/Registrar, shall be in the denomination of
$100,000 with $5,000 increments thereof, and shall mature on the same date and bear
interest at the same rate as the Series 2012 Bond or Series 2012 Bonds in lieu of which
they are delivered.
Principal Maturity Date Interest
Amount September 1 Rate
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
Section 3.4: Execution and Registration of Series 2012 Bonds. (a) The Series
2012 Bonds shall be signed by the Chair or Vice Chair or Director of the Board and
countersigned by the Secretary or Director of the Board, by their manual, lithographed,
or facsimile signatures. Such facsimile signatures on the Series 2012 Bonds shall have
the same effect as if each of the Series 2012 Bonds had been signed manually and in
person by each of said Directors or officers.
(b) If any Director or officer of the Authority whose manual or facsimile
signature shall appear on the Series 2012 Bonds shall cease to be such Director or officer
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before the authentication of such Series 2012 Bonds or before the delivery of such Series
2012 Bonds, such manual or facsimile signature shall nevertheless be valid and
sufficient for all purposes as if such Director or officer had remained in such office.
(c) Except as provided below, no Series 2012 Bond shall be valid or obligatory
for any purpose or be entitled to any security or benefit of this Resolution unless and
until there appears thereon the Paying Agent/Registrar's Authentication Certificate
substantially in the form provided herein, duly authenticated by manual execution by
an officer or duly authorized signatory of the Paying Agent/Registrar. In lieu of the
executed Paying Agent/Registrar's Authentication Certificate described above, the
Initial Series 2012 Bond delivered at the Issuance Date shall have attached thereto the
Comptroller's Registration Certificate substantially in the form provided herein,
manually executed by the Comptroller, or by his duly authorized agent, which
certificate shall be evidence that the Initial Series 2012 Bond has-been duly approved by
the Attorney General of the State of Texas and that it is a valid and binding obligation of
the Authority, and has been registered by the Comptroller.
(d) On the Issuance Date, the Initial Series 2012 Bond, being a single bond
representing the entire principal amount of the Series 2012 Bonds, payable in stated
installments to the Purchaser or their designee, executed by manual or facsimile
signature of the Chair or Vice Chair and Secretary or Director of the Board, approved by
the Attorney General, and registered and manually signed by the Comptroller of Public
Accounts, shall be delivered to the Purchaser or their designee. Upon payment for the
Initial Series 2012 Bond, the Paying Agent/Registrar shall cancel the Initial Series 2012
Bond and deliver Series 2012 Bonds to the [Purchaser] in accordance with Section 3.12.
Section 3.5: Payment of Principal and Interest. The Paying Agent/Registrar
is hereby appointed as the registrar and paying agent for the Series 2012 Bonds. The
principal of the Series 2012 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,
whether at maturity or by prior redemption, at the designated office of the Paying
Agent/Registrar. The interest on each Series 2012 Bond shall be payable by check on the
Interest Payment Date, mailed by the 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 Series 2012 Bond is not
a Business Day, then the date for such payment shall be the next succeeding Business
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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 3.6: Successor Paying Agent/Registrars. The Authority covenants
that at all times while any Series 2012 Bonds are Outstanding it will provide a
commercial bank, or trust company or other entity duly qualified and legally
authorized to act as Paying Agent/Registrar for the Series 2012 Bonds. The Authority
reserves the right to change the Paying Agent/Registrar for the Series 2012 Bonds on not
less than -sixty (60) days written notice to the Paying Agent/Registrar, so long as any
such notice is effective not less than sixty (60) days prior to the next succeeding
principal or interest payment date on the Series 2012 Bonds. Promptly upon the
appointment of any successor Paying Agent/Registrar, the previous Paying
Agent/Registrar shall deliver the Register or a copy thereof to the new Paying
Agent/Registrar, and the new Paying Agent/Registrar shall notify each Owner, by
United States mail, first class postage prepaid, of such change and of the address of the
new Paying Agent/Registrar. Each Paying Agent/Registrar hereunder, by acting in that
capacity, shall be deemed to have agreed to the provisions of this Section.
Section 3.7: Special Record Date. If interest on any Series 2012 Bond is not
paid on any Interest Payment Date and continues unpaid for thirty (30) days thereafter,
the Paying Agent/Registrar shall establish a new record date for the payment of such
interest, to be known as a :'Special Record Date." The Paying Agent/Registrar shall
establish a Special Record Date when funds to make such interest payment are received
from or on behalf of the Authority. 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 of record of an affected Series 2012 Bond as of the close of business on the day
prior to the mailing of such notice.
Section 3.8: Ownership; Unclaimed Principal and Interest. Subject to the
further provisions of this Section, the Authority, the Paying Agent/Registrar and any
other person may treat the person in whose name any Series 2012 Bond is registered as
the absolute Owner of such Series 2012 Bond for the purpose of making and receiving
payment of the principal of or interest on such Series 2012 Bond, and for all other
purposes, whether or not such Series 2012 Bond is overdue, and neither the Authority
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 Series 2012
Bond in accordance with this Section 3.8 shall be valid and effectual and shall discharge
HOU:3209953.2
the liability of the Authority and the Paying Agent/Registrar upon such Series 2012
Bond to the extent of the sums paid.
Amounts held by the Paying Agent/Registrar which represent principal of and
interest on the Series 2012 Bonds remaining unclaimed by the Owner after the
expiration of three (3) years from the date such amounts have become due and payable
shall be remitted to the Authority, except to the extent that they are required by law to
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.
Section 3.9: Registration of Bonds. (a) The Series 2012 Bonds shall be
registered in the name of Capital One, N.A.
(b) Notwithstanding any other provision of this Resolution to the contrary,
the Authority and the Paying Agent/Registrar shall be entitled to treat and consider the
person in whose name each Series 2012 Bond is registered in the Register as the absolute
Owner of such Series 2012 Bond for the purpose of payment of principal of and interest
on the Series 2012 Bonds, for the purpose of giving notices of redemption and other
matters with respect to such Series 2012 Bond, for the purpose of registering transfer
with respect to such Series 2012 Bond, and for all other purposes whatsoever. The
Paying Agent/Registrar shall pay all principal of, premium, if any, and interest on the
Series 2012 Bonds only to or upon the order of the respective Owners, as shown in the
Register as provided in this Resolution, or their respective attorneys duly authorized in
writing, and all such payments shall be valid and effective to fully satisfy and discharge
the Authority's obligations with respect to payments of principal, premium, if any, and
interest on the Series 2012 Bonds to the extent of the sum or sums so paid. No person
other than an Owner, as shown in the Register, shall receive a Series 2012 Bond
certificate evidencing the obligation of the Authority to make payments of amounts due
pursuant to this Resolution.
Section 3.10: Reserved.
Section 3.11: Reserved.
Section 3.12: Registration, Transfer, and Exchange. So long as any Series
2012 Bonds remain Outstanding, the Paying Agent/Registrar shall keep the Register at
its designated office and, subject to such reasonable regulations as it may prescribe, the
Paying Agent/Registrar shall provide for the registration and transfer of Series 2012
Bonds in accordance with the terms of this Resolution.
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Each Series 2012 Bond shall be transferable only upon the presentation and
surrender thereof at the designated 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 Series 2012 Bond in proper form for transfer, the Paying
Agent/Registrar shall authenticate and deliver in exchange therefor, a new Series 2012
Bond or Series 2012 Bonds, registered in the name of the transferee or transferees, in
authorized denominations and of the same maturity, aggregate principal amount, and
Dated Date, and bearing interest at the same rate as the Series 2012 Bond or Series 2012
Bonds so presented.
All Series 2012 Bonds shall be exchangeable upon presentation and surrender
thereof at the designated office of the Paying Agent/Registrar for a Series 2012 Bond or
Series 2012 Bonds of the same maturity, Dated Date, and interest rate and in any
authorized denomination, in an aggregate amount equal to the unpaid principal
amount of the Series 2012 Bond or Series 2012 Bonds presented for exchange. The
Paying Agent/Registrar shall be and is hereby authorized to authenticate and deliver
exchange Series 2012 Bonds in accordance with the provisions of this Section 3.12. Each
Series 2012 Bond delivered in accordance with this Section 3.12 shall be entitled to the
benefits and security of this Resolution to the same extent as the Series 2012 Bond or
Series 2012 Bonds in lieu of which such Series 2012 Bond is delivered.
The Authority or the Paying Agent/Registrar may require the Owner of any
Series 2012 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 Series 2012
Bond. Any fee or charge of the Paying Agent/Registrar for such transfer or exchange
shall be paid by the Authority.
The Paying Agent/Registrar shall not be required to transfer or exchange any
Series 2012 Bond during the period beginning on a Record Date or a Special Record
Date and ending on the next succeeding Interest Payment Date or to transfer or
exchange any Series 2012 Bond called for redemption during the period beginning
thirty days prior to the date fixed for redemption and ending on the date fixed for
redemption; provided, however, that this limitation shall not apply to the exchange by
the Owner of the unredeemed portion of a Series 2012 Bond called for redemption in
part.
Section 3.13: Cancellation of Series 2012 Bonds. All Series 2012 Bonds paid or
redeemed in accordance with this Resolution, and all Series 2012 Bonds in lieu of which
exchange Series 2012 Bonds or replacement Series 2012 Bonds are authenticated and
delivered in accordance herewith, shall be cancelled upon the making of proper records
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regarding such payment or redemption and retained in accordance with the Paying
Agent/Registrar's document retention policy. Upon request of the Authority therefore,
the Paying Agent/Registrar shall furnish the Authority with appropriate certificates of
cancellation of such Series 2012 Bonds.
Section 3.14: Mutilated, Lost, or Stolen Series 2012 Bonds. Upon the
presentation and surrender to the Paying Agent/Registrar of a mutilated Series 2012
Bond, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a
replacement Series 2012 Bond of like maturity, Dated Date, interest rate and principal
amount, bearing a number not contemporaneously Outstanding. The Authority or the
Paying Agent/Registrar may require the Owner of such Series 2012 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 Series 2012 Bond is lost, apparently destroyed, or wrongfully taken, the
Authority, pursuant to the applicable laws of the State of Texas and in the absence of
notice or knowledge that such Series 2012 Bond has been acquired by a bona fide
purchaser, shall execute and the Paying Agent/Registrar shall authenticate and deliver a
replacement Series 2012 Bond of like maturity, Dated Date, interest rate and principal
amount, bearing a number not contemporaneously Outstanding, provided that the
Owner thereof shall have:
(1) furnished to the Authority and the Paying Agent/Registrar satisfactory
evidence of the ownership of and the circumstances of the loss,
destruction or theft of such Series 2012 Bond;
(2) furnished such security or indemnity as may be required by the Paying
Agent/Registrar and the Authority 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 Authority and the Paying
Agent/Registrar.
If, after the delivery of such replacement Series 2012 Bond, a bona fide purchaser of the
original Series 2012 Bond in lieu of which such replacement Series 2012 Bond was
issued presents for payment such original Series 2012 Bond, the Authority and the
Paying Agent/Registrar shall be entitled to recover such replacement Series 2012 Bond
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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
Authority or the Paying Agent/Registrar in connection therewith.
If any such mutilated, lost, apparently destroyed or wrongfully taken Series 2012
Bond has become or is about to become due and payable, the Authority in its discretion
may, instead of issuing a replacement Series 2012 Bond, authorize the Paying
Agent/,Registrar to pay such Series 2012 Bond.
Each replacement Series 2012 Bond delivered in accordance with this Section 3.14
shall be entitled to the benefits and security of this Resolution to the same extent as the
Series 2012 Bond or Series 2012 Bonds in lieu of which such replacement Series 2012
Bond is delivered.
Section 3.15: Redemption. The Series 2012 Bonds are subject to optional and
mandatory sinking fund redemption on the dates and for the redemption prices set
forth in the form of the Series 2012 Bond in this Resolution.
Principal amounts may be redeemed only in integrals of $100,000. If a Series
2012 Bond subject to redemption is in a denomination larger than $100,000, a portion of
such Series 2012 Bond may be redeemed, but only in integral multiples of $5,000. In
selecting portions of Series 2012 Bonds for redemption, the Paying Agent/ Registrar
shall treat each Series 2012 Bond as representing that number of Series 2012 Bonds of
$100,000 denomination or any integral multiple of $5,000 in excess thereof. The Paying
Agent/Registrar shall select the particular Series 2012 Bonds to be redeemed within any
given maturity by lot or other random selection method. Upon surrender of any Series
2012 Bond for redemption in part, the Paying Agent/Registrar, in accordance with this
Resolution, shall authenticate and deliver in exchange therefor a Series 2012 Bond or
Series 2012 Bonds of like maturity and interest rate in an aggregate principal amount
equal to the unredeemed portion of the Series 2012 Bond so surrendered.
Unless waived by the Owner, notice of any redemption identifying the Series
2012 Bonds to be redeemed shall be given as provided in the form of Series 2012 Bond
in this Resolution. Any notice given as provided in this Section 3.15 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 Series 2012 Bonds or
portions thereof to be redeemed, plus accrued interest to the date fixed for redemption.
When Series 2012 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 Series 2012 Bonds
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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 Series 2012 Bond or portion thereof called for redemption shall
terminate on the date fixed for redemption.
Section 3.16: Limited Obligations. THE SERIES 2012 BONDS AND ALL
PARITY BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY, PAYABLE
SOLELY OUT OF THE PLEDGED REVENUES, WHICH IS THE SOLE ASSET OF THE
AUTHORITY PLEDGED THEREFOR. THE SERIES 2012 BONDS ARE OBLIGATIONS
SOLELY OF THE AUTHORITY AND DO NOT CONSTITUTE, WITHIN THE
MEANING OF ANY STATUTORY OR CONSTITUTIONAL PROVISION, AN
INDEBTEDNESS, AN OBLIGATION OR A LOAN OF CREDIT OF THE CITY OF
PEARLAND, THE STATE OF TEXAS, ALVIN INDEPENDENT SCHOOL DISTRICT,
BRAZORIA COUNTY, FORT BEND COUNTY OR ANY OTHER MUNICIPALITY,
COUNTY, OR OTHER MUNICIPAL OR POLITICAL CORPORATION OR
SUBDIVISION OF THE STATE OF TEXAS. NEITHER THE CITY OF PEARLAND,
ALVIN INDEPENDENT SCHOOL DISTRICT, BRAZORIA COUNTY NOR FORT
BEND COUNTY IS OBLIGATED TO MAKE PAYMENTS ON THE SERIES 2012
BONDS.
ARTICLE IV
FORM OF SERIES 2012 BONDS AND CERTIFICATES
Section 4.1: Forms. The form of the Series 2012 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 for the Series 2012 Bonds to be
initially issued, shall be substantially as follows, with such additions, deletions and
variations, as may be necessary or desirable and not prohibited by this Resolution,
including any legend regarding bond insurance if such insurance is obtained by the
Purchaser:
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(a) Form of Bond
Number
United States of America
State of Texas
DEVELOPMENT AUTHORITY OF PEARLAND
Registered
TAX INCREMENT CONTRACT REVENUE AND REFUNDING BOND
SERIES 2012
INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP:
May 1, 2012
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS
The DEVELOPMENT AUTHORITY OF PEARLAND (the "Authority"), a not -
for -profit local government corporation created by the City of Pearland (the "City"), in
the Counties of Brazoria and Fort Bend, in the State of Texas, for value received,
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 Series 2012 Bond at the
designated office of the Paying Agent/Registrar (the "Paying Agent/Registrar"),
initially, Wells Fargo Bank, National Association, 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 of twelve 30-day months, from the later
of the Dated Date identified above, or the most recent interest payment date to which
interest has been paid or duly provided for. Interest on this Series 2012 Bond is payable
by check on March 1 and September 1, beginning on September 1, 2012, mailed to the
Registered Owner as shown on the books of registration kept by the Paying
Agent/Registrar as of the fifteenth (15th) 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.
14
HOU:3209953.2
THE SERIES 2012 BONDS AND ALL PARITY BONDS ARE LIMITED
OBLIGATIONS OF THE AUTHORITY, PAYABLE SOLELY OUT OF THE PLEDGED
REVENUES, WHICH IS THE SOLE ASSET OF THE AUTHORITY PLEDGED
THEREFOR. THE SERIES 2012 BONDS ARE OBLIGATIONS SOLELY OF THE
AUTHORITY AND DO NOT CONSTITUTE, WITHIN THE MEANING OF ANY
STATUTORY OR CONSTITUTIONAL PROVISION, AN INDEBTEDNESS, AN
OBLIGATION OR A LOAN OF CREDIT OF THE CITY OF PEARLAND, THE STATE
OF TEXAS, ALVIN INDEPENDENT SCHOOL DISTRICT, BRAZORIA COUNTY,
FORT BEND COUNTY OR ANY OTHER MUNICIPALITY, COUNTY, OR OTHER
MUNICIPAL OR POLITICAL CORPORATION OR SUBDIVISION OF THE STATE OF
TEXAS. NEITHER THE CITY OF PEARLAND, ALVIN INDEPENDENT SCHOOL
DISTRICT, BRAZORIA COUNTY NOR FORT BEND COUNTY IS OBLIGATED TO
MAKE PAYMENTS ON THE SERIES 2012 BONDS.
THIS SERIES 2012 BOND IS ONE OF A DULY AUTHORIZED SERIES OF
SERIES 2012 BONDS aggregating $ issued for the purpose of (1) paying
Project Costs, (2) refunding the Refunded Bonds, and (3) paying Costs of Issuance, all
under and pursuant to the authority of the Act and all other applicable laws, and a
resolution adopted by the Authority on , 2012 (the "Resolution"). None of the
proceeds of the Series 2012 Bonds shall be used for the purpose of paying or otherwise
providing for educational facilities.
THIS BOND shall accrue interest from the date of delivery until, but not
including,. May 22, 2022, at a rate of 3.07% per annum. Beginning May 22, 2022, the
interest rate shall reset on each Adjustment Date to the Applicable Rate for the
corresponding Variable Rate Period with the first such Adjustment Date being May 22,
2022, until the date of final maturity or prepayment prior to maturity.
THIS SERIES 2012 BOND AND THE SERIES OF WHICH IT IS A PART are
limited obligations of the Authority that are together with all other Parity Bonds
heretofore or hereafter issued under the Indenture described below, payable from, and
are equally and ratably secured by a lien on the Pledged Revenues, which include the
Contract Tax Increments, moneys on deposit in the Pledged Revenue Fund, the Debt
Service Fund, and interest earned on moneys deposited therein, as defined and more
fully provided in the Indenture of Trust dated as of May 1, 2012, between the Authority
and Wells Fargo Bank, National Association, as Trustee (the "Indenture"). This Series
2012 Bond and the series of which it is -a part and all other Parity Bonds, together with
the interest thereon, are payable solely from such Pledged Revenues.
15
I. 16111ky-TIZ54*4
THE AUTHORITY RESERVES THE RIGHT during the Fixed Rate Period, at its
option, to redeem in whole or in part the Series 2012 Bonds on any date, at par plus
accrued interest on the amounts called for redemption to the date fixed for redemption.
THE AUTHORITY RESERVES THE RIGHT during any Variable Rate Period,, at
its option, to redeem in whole or in part the Series 2012 Bonds on the final day of any
Variable Rate Period, at par plus accrued interest on the amounts called for redemption
to the date fixed for redemption. Also, during any Variable Rate Period, the Authority
reserves the right, at its option, to redeem in whole or in part the Series 2012 Bonds on
any date other than the final date of any Variable Rate Period, at par plus accrued
interest on the amounts called for redemption to the date fixed for redemption, plus
payment of the cost, if any, resulting from the breakage of any LIBOR contract of the
Purchaser associated with the Series 2012 Bonds for such Variable Rate Period.
UNLESS WAIVED BY THE OWNER, NOTICE OF ANY REDEMPTION shall
be given at least thirty (30) days prior to the date fixed for redemption by first class
mail, addressed to the Registered Owners of each Series 2012 Bond to be redeemed in
whole or in part at the address shown on the books of registration kept by the Paying
Agent/Registrar. Such notices shall state the redemption date, the redemption price, the
place at which Series 2012 Bonds are to be surrendered for payment and, if less than all
Series 2012 Bonds Outstanding of a particular maturity are to be redeemed, the
numbers of the Series 2012 Bonds or portions thereof of such maturity to be redeemed.
When Series 2012 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 SERIES 2012 BOND IS TRANSFERABLE only, upon presentation and
surrender at the designated 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, subject to the terms and conditions of the Resolution.
THIS SERIES 2012 BOND IS EXCHANGEABLE at the designated office of the
Paying Agent/Registrar for Series 2012 Bonds in the principal amount of $5,000 or any
integral multiple thereof, subject to the terms and conditions of the Resolution.
NEITHER THE AUTHORITY NOR THE PAYING AGENT/REGISTRAR shall be
required to transfer or exchange any Series 2012 Bond during the period beginning on
the fifteenth calendar day of the month next preceding any interest payment date and
16
HOU:3209953.2
ending on such interest payment date or to transfer any Series 2012 Bond called for
redemption during the 30 day period prior to the redemption date.
THIS SERIES 2012 BOND shall not be valid or obligatory for any purpose or be
entitled to any benefit under the Resolution unless this Series 2012 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.
THE AUTHORITY HAS RESERVED THE RIGHT to issue Additional Parity
Bonds, subject to the restrictions contained in the Resolution and the Indenture, which
may be equally and ratably payable from, and secured by a lien on and pledge of, the
Pledged Revenues in the same manner and to the same extent as the Parity Bonds and
this Series 2012 Bond and the series of which it is a part.
IT IS HEREBY DECLARED AND REPRESENTED that this Series 2012 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 Series 2012 Bond have been performed, existed, and been done in
accordance with law; that the Series 2012 Bonds do not exceed any statutory limitation;
and that provision has been made for the payment of the principal of and interest on
this Series 2012 Bond and all of the Parity Bonds by the creation of the aforesaid lien on
and pledge of the Pledged Revenues as provided in the Indenture.
IN WITNESS WHEREOF, the Authority has caused this Series 2012 Bond to be
executed by the manual or facsimile signatures of the Chair and Director.
DEVELOPMENT AUTHORITY OF
PEARLAND
Chair, Board of Directors
Director, Board of Directors
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HOU:3209953.2
(b) Form of Registration Certificate of Comptroller of Public Accounts.
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Series 2012 Bond has been examined, certified as to
validity, and approved by the Attorney General of the State of Texas, and that this
Series 2012 Bond has been registered by the Comptroller of Public Accounts of the State
of Texas.
WITNESS MY SIGNATURE AND SEAL this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
(c) Form of Paying Agent/Registrar's Authentication Certificate
AUTHENTICATION CERTIFICATE
It is hereby certified that this Series 2012 Bond
has been delivered pursuant to the Bond
Resolution described in the text of this
Series 2012 Bond.
By:
Authorized Signature
Date of Authentication:
as Trustee
IN
HOU:3209953.2
(d) Form of Assignment
Assignment
For value received, the undersigned hereby sells, assigns, and transfers unto
(Please print or type name, address, and zip code of Transferee)
(Please insert Social Security or Taxpayer Identification Number of Transferee)
the within Series 2012 Bond and all rights thereunder, and hereby irrevocably
constitutes and appoints
attorney to transfer said Series 2012 Bond on the books kept for registration thereof,
with full power of substitution in the premises.
101.1,10093
Signature Guaranteed:
Registered Owner
NOTICE: Signature(s) must be guaranteed NOTICE: The signature above must
by an institution which is a participant in correspond to the name of the Registered
the Securities Transfer Agent Medallion Owner as shown on the face of this Bond
Program ("STAMP") or similar program. in every particular, without any alteration,
enlargement or change whatsoever.
(e) The Initial Series 2012 Bond shall be in the form set forth in paragraphs
(a), (b) and (d) of this Section, except for the following alterations:
(i) immediately under the name of the Bond, the headings "INTEREST RATE"
and "MATURITY DATE" shall both be completed with the words "As Shown
Below";
(ii) in the first paragraph of the Series 2012 Bond, the words "on the maturity
date specified above, " "the principal amount identified above," and "at the rate
shown above" shall be deleted and the following shall be inserted at the end of
the first sentence with such principal to be paid in installments on
September 1 in each of the years and in the principal amounts identified in the
19
HOU:3209953.2
following schedule and with such installments bearing interest at the per annum
rates set forth in the following schedule:
[Information to be inserted from schedule in Section 3.3]
(iii) the Initial Series 2012 Bond shall be numbered I-1
Section 4.2: Legal Opinion; Bond Insurance. The approving opinion of Co -
Bond Counsel may be printed on the Series 2012 Bonds, but errors or omissions in the
printing of such opinion or such numbers shall have no effect on the validity of the
Series 2012 Bonds. If bond insurance is obtained by the Purchaser, the Series 2012
Bonds may bear an appropriate legend as provided by the insurer.
ARTICLE V
ADDITIONAL BONDS
Section 5.1: Additional Parity Bonds. The Authority reserves the right to
issue, for any lawful purpose (including the refunding of any previously issued Parity
Bonds), one or more series of Additional Parity Bonds payable from and secured by a
lien on the Pledged Revenues, on a parity with the Series 2012 Bonds, and any
previously issued Parity Bonds; provided, however, that Additional Parity Bonds may
be issued only in accordance with the provisions of Article III of the Indenture.
Section 5.2: Subordinate Lien Obligations. The Authority reserves the right
to issue, for any lawful purpose, 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 VI
COVENANTS AND PROVISIONS
RELATING TO ALL PARITY BONDS
Reference is made to Article V of the Indenture. All covenants made by the
Authority therein are hereby incorporated into this Resolution.
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HOU:3209953.2
ARTICLE VII
PROVISIONS CONCERNING SALE AND
APPLICATION OF PROCEEDS OF SERIES 2012 BONDS
Section 7.1: Sale. The Series 2012 Bonds are hereby sold to the Purchaser by
means of a private placement, and at a price of the par value thereof, is hereby
approved, and delivery of the Series 2012 Bonds to the Purchaser shall be made upon
payment therefor in accordance with the terms of sale and the terms and conditions of
the Private Placement Letter, which is attached hereto as Exhibit A. and such price and.
terms are hereby found and determined to be the most advantageous reasonably
obtainable by the Authority. The Chair and other appropriate officers, agents and
representatives of the Authority are hereby authorized to do any and all things
necessary or desirable to provide for the issuance and delivery of the Series 2012 Bonds.
Section 7.2: Application of Proceeds. Proceeds from the sale of the Series
2012 Bonds shall, promptly upon receipt by the Trustee, be applied as follows:
(a) $ shall be deposited to the Escrow Fund for the Refunded
Bonds.
(b) $ shall be deposited in the Project Fund.
(c) $ shall be used to pay Cost of Issuance.
(d) All remaining proceeds from the sale of the Series 2012 Bonds shall be
deposited into the Debt Service Fund.
ARTICLE VIII
TAX EXEMPTION
Section 8.1: Tax Covenants. The Authority intends that the interest on the
Series 2012 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 and applicable to the Series 2012 Bonds. For this purpose, the Authority
covenants that it will monitor and control the receipt, investment, expenditure and use
of all gross proceeds of the Series 2012 Bonds (including all property the acquisition,
construction or improvement of which is to be financed directly or indirectly with the
proceeds of the Series 2012 Bonds) and take or omit to take such other and further
21
HOU:3209953.2
actions as may be required by Sections 103 and 141 through 150 of the Code and the
Regulations to cause interest on the Series 2012 Bonds to be and remain excludable from
the gross income, as defined in Section 61 of the Code, of the owners of the Series 2012
Bonds for federal income tax purposes. Without limiting the generality of the
foregoing, the Authority shall comply with each of the following covenants:
a. The Authority will use all of the proceeds of the Series 2012 Bonds to
(i) provide funds for the purposes described in Section 3.1 hereof and
(ii) to pay the costs of issuing the Series 2012 Bonds. The Authority will
not use any portion of the proceeds of the Series 2012 Bonds to pay the
principal of or interest or redemption premium on, any other obligation of
the Authority or a related person.
b. The Authority will not directly or indirectly take any action, or omit to
take any action, which action or omission would cause the Series 2012
Bonds to constitute "private activity bonds" within the meaning of Section
141(a) of the Code.
C. certain ad valorem taxes resulting from the increase in appraised value of
real property located in the Reinvestment Zone Number Two, City of
Pearland, Texas collected by the City of Pearland, Texas for the account of
the Authority, investment earnings on such collections, and as available,
proceeds of the Series'2012 Bonds.
d. Based upon all facts and estimates now known or reasonably expected to.
be in existence on the date the Series 2012 Bonds are delivered, the
Authority reasonably expects that the proceeds of the Series 2012 Bonds
will not be used in a manner that would cause the Series 2012 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 Series 2012 Bonds are outstanding, the Authority
will identify and properly account for all amounts constituting gross
proceeds of the Series 2012 Bonds in accordance with the Regulations.
The Authority will monitor the yield on the investments of the proceeds of
the Series 2012 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 Series 2012 Bonds. To the
extent necessary to prevent the Series 2012 Bonds from constituting
"arbitrage bonds," the Authority will make such payments as are
necessary to cause the yield on all yield restricted nonpurpose
22
HOU:3209953.2
investments allocable to the Series 2012 Bonds to be less than the yield that
is materially higher than the yield on the Series 2012 Bonds.
f. The Authority will not take any action or knowingly omit to take any
action that, if taken or omitted, would cause the Series 2012 Bonds to be
treated as "federally guaranteed" obligations for purposes of Section
149(b) of the Code.
g. The Authority represents that not more than fifty percent (50%) of the
proceeds of the Series 2012 Bonds will be invested in nonpurpose
investments (as defined in Section 148(f)(6)(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 Authority reasonably
expects that at least eighty-five percent (85%) of the spendable proceeds of
the Series 2012 Bonds will be used to carry out the governmental purpose
of the Series 2012 Bonds within the three-year period beginning on the
date of issue of the Series 2012 Bonds.
h. The Authority will take all necessary steps to comply with the
requirement that certain amounts earned by the Authority on the
investment of the gross proceeds of the Series 2012 Bonds, if any, be
rebated to the federal government. Specifically, the Authority will
(i) maintain records regarding the receipt, investment, and expenditure of
the gross proceeds of the Series 2012 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 Authority allocable to other
obligations of the Authority or moneys which do not represent gross
proceeds of any obligations of the Authority 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
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 Series 2012 Bonds and
.(iv) timely pay, as required by applicable Regulations, all amounts
required to be rebated to the federal government. In addition, the
Authority will exercise reasonable diligence to assure that no errors are
23
HOU:3209953.2
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 Authority 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 proceeds of the Series
2012 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 Series 2012
Bonds not been relevant to either party.
j. The Authority 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 Series 2012 Bonds on such form and in such
place as the Secretary may prescribe.
k. The Authority will not issue or use the Series 2012 Bonds as part of an
"abusive arbitrage device" (as defined in Section 1.148-10(a) of the
Regulations). Without limiting the foregoing, the Series 2012 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 Authority 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 Authority charged with the responsibility for issuing
the Series 2012 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 Series 2012 Bonds and stating whether there are
facts, estimates or circumstances that would materially change the
Authority's expectations. On or after the date of issuance of the Series
2012 Bonds, the Authority will take such actions as are necessary and
appropriate to assure the continuous accuracy of the representations
contained in such certificates.
24
HOU:3209953.2
In. The covenants and representations made or required by this Section are
for the benefit of the Bondholders and any subsequent Bondholder, and
may be relied upon by the Bondholders and any subsequent Bondholder
and bond counsel to the Authority.
In complying with the foregoing covenants, the Authority may rely upon an
unqualified opinion issued to the Authority by nationally recognized bond counsel that
any action by the Authority or reliance upon any interpretation of the Code or
Regulations contained in such opinion will not cause interest on the Series 2012 Bonds
to be includable in gross income for federal income tax purposes under existing law.
Section 8.2: Continuing Obligation. Notwithstanding any other provision of
this Resolution, the Authority's representations - and obligations under the covenants
and provisions of this Article VIII shall survive the defeasance and discharge of the
Series 2012 Bonds for as long as such matters are relevant to the exclusion of interest on
the Series 2012 Bonds from the gross income of the owners for federal income tax
purposes.
ARTICLE IX
CONTINUING DISCLOSURE UNDERTAKING
Section 9.1: Annual Reports. [Discuss if needed] The Authority will provide
certain updated financial information and operating data to the MSRB annually in an
electronic format as prescribed by the MSRB and available via the Electronic Municipal
Market Access ("EMMA") system at www.emma.msrb.org. The -Authority is
considered a component unit of the City and as such, the financial statements of the
Authority are not currently separately audited, but included in the City's audit. Any
financial statements so provided shall be (1) prepared in accordance with the
Accounting Principles described in this Resolution and (2) audited, if the Authority or
the City commissions an audit of such statements and the audit is completed within the
period during which they must be provided. If the audit of such financial statements is
not complete within such period, then the Authority shall provide unaudited financial
statements for the applicable fiscal year to EMMA within six months of such period,
and audited financial statements, when the audit report on such statements becomes
available.
If the Authority changes its fiscal year, the Authority will notify EMMA of the
change (and of the date of the new fiscal year end) prior to the next date by which the
Authority otherwise would be required to provide financial information and operating
data pursuant to this Article IX.
25
HOU:3209953.2
The financial information and operating data to be provided pursuant to this
Section may be set forth in full in one or more documents or may be included by
specific reference to any document available to the public on the MSRB's Internet Web
site or filed with the SEC, as permitted by the SEC Rule.
Section 9.2: Material Event Notices. The Authority shall notify the MSRB in
an electronic format prescribed by the MSRB, in a timely manner (not in excess of ten
(10) days after the occurrence of the event), of any of the following events with respect
to the Series 2012 Bonds:
(i) Principal and interest payment delinquencies;
(ii) Non-payment related defaults, if material;
(iii) Unscheduled draws on debt service reserves reflecting
financial difficulties;
(iv) Unscheduled draws on credit enhancements reflecting
financial difficulties;
(v) Substitution of credit or liquidity providers or their failure to
perform;
(vi) Adverse tax opinions, the issuance by the Internal Revenue
Service of proposed or final determinations of taxability,
Notices of Proposed Issue (IRS Form 5701-TEB) or
other material notices or determinations with respect to
the tax status of the Series 2012 Bonds, or other material
events affecting the tax status of the Series 2012 Bonds;
(vii) Modifications to rights of holders of the Series 2012 Bonds, if
material;
(viii) Bond calls, if material, and tender offers;
{ix) Defeasances;
(x) Release, substitution, or sale of property securing repayment
of the Bonds, if material;
(xi) Rating changes;
(xii) Bankruptcy, insolvency, receivership or similar event of the
Corporation;
(xiii) The consummation of a merger, consolidation, or acquisition
involving the Corporation or the sale of all or substantially
all of the assets of the Corporation, other than in the
ordinary course of business, the entry into a definitive
agreement to undertake such an action or the termination
of a definitive agreement relating to any such actions, other
than pursuant to its terms, if material; and
AM
HOU:3209953.2
(xiv) Appointment of a successor Paying Agent/Registrar or
change in the name of the Paying Agent/Registrar, if
material.
For the purposes, any event described in the immediate proceeding paragraph
(xii) is considered to occur when any of the following occur: the appointment of a
receiver, fiscal agent or similar officer for the Authority in a proceeding United States
Bankruptcy Code or any other proceeding under state or federal law in which a court or
governmental authority has assumed jurisdiction over substantially all of the assets or
business of the Authority, or if such jurisdiction has been assumed by leaving the
existing governing body and officials or officers in possession but subject to the
supervision and orders of a court or governmental authority, or the entry of order
confirming a plan of reorganization, arrangement or liquidation by a court or
governmental authority having supervision or jurisdiction over substantially all of the
assets or business of the Authority.
The Authority shall notify the MSRB, in a timely manner, of any failure by the
Authority to provide financial information or operating data in accordance this Section
by the time required by such Section.
Section 9.3: Limitations, Disclaimers, and Amendments. The Authority
shall be obligated to observe and perform the covenants specified in this Article IX for
so long as, but only for so long as, the Authority remains an "obligated person" with
respect to the Series 2012 Bonds within the meaning of the Rule, except that the
Authority in any event will give the notice of any deposit made in accordance with
Texas law that causes Bonds no longer to be outstanding.
The provisions of this Article are for the sole benefit of the holders and the
beneficial owners of the Series 2012 Bonds, and nothing in this Article, express or
implied, shall give any benefit or any legal or equitable right, remedy, or claim
hereunder to any other person. The Authority undertakes to provide only the financial
information, operating data, financial statements, and notices which it has expressly
agreed to provide pursuant to this Article and does not hereby undertake to provide
any other information that may be relevant or material to a complete presentation of the
Authority's financial results, condition, or prospects or hereby undertake to update any
information provided in accordance with this Article or otherwise, except as expressly
provided herein. The Authority does not make any representation or warranty
concerning such information or its usefulness to a decision to invest in or sell bonds at
any future date.
27
HOU:3209953.2
UNDER NO CIRCUMSTANCES SHALL THE AUTHORITY BE LIABLE TO THE
HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN
CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART
FROM ANY BREACH BY THE AUTHORITY, WHETHER NEGLIGENT OR WITHOUT
FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT
EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT,
FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE UNLIMITED TO AN
ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
No default by the Authority in observing or performing its obligations under this
Article IX shall constitute a breach of or default under this Resolution for purposes of
any other provision of this Resolution.
Nothing in this Article IX is intended or shall act to disclaim, waive, or otherwise
limit the duties of the Authority under federal and state securities laws.
The provisions of this Article IX may be amended by the Authority from time to
time to adapt to changed circumstances that arise from a change in legal requirements,
a change in law, or a change in the identity, nature, or status or type of principal
payment of the Authority, if (1) the agreement, as so amended, would have permitted
an underwriter to purchase or sell Bonds in the initial primary offering in compliance
with the Rule, taking into account any amendments or interpretations of the Rule to the
date of such amendment, as well as such changed circumstances, and (2) either (a) the
holders of a majority in aggregate amount of the outstanding Series 2012 Bonds consent
to such amendment or (b) a person unaffiliated with the Authority (such as nationally
recognized bond counsel) determines that the amendment will not materially impair
the interests of the holders and beneficial owners of the Series 2012 Bonds. The
Authority may also amend or repeal the provisions of this continuing disclosure
agreement if the SEC amends or repeals the applicable provisions of the Rule or a court
of final jurisdiction enters judgment that such provisions of the Rule are invalid, but
only if and to the extent that the provisions of this sentence would not prevent an
underwriter from lawfully purchasing or selling Bonds in the primary offering of the
Series 2012 Bonds. If any such amendment is made, the Authority will include in its
next annual update an explanation in narrative form of the reasons for the change and
its impact on the type of operating data or financial information being provided.
Section 9.4: Definitions.
The term "Accounting Principles" shall mean the accounting principles
described in the notes to the Audit as such principles may be changed from time to time
to comply with State laws or regulations.
HOU:3209953.2
The term "MSRB" shall mean the Municipal Securities Rulemaking Board.
The term "Rule" shall mean SEC Rule 15c2-12, as amended from time to time.
The term "SEC" shall mean the United States Securities and Exchange
Commission.
ARTICLE X
AUTHORIZATION AND CONFIRMATION OF AGREEMENTS
Section 10.1: Agreements. The Board hereby approves issuance of the Series
2012 Bonds and all reasonable agreements necessary or convenient in connection with
the issuance of the Series 2012 Bonds, including without limitation the following:
Private Placement Letter by and between the Authority and Capital One, N.A., the
Purchaser, in the form attached hereto as Exhibit A; and any and all other documents
and agreements reasonable and necessary to issue the Series 2012 Bonds (collectively,
the "Agreements"). The Board, by a majority vote of its members, at a regular meeting,
hereby approves the form, terms, and provisions of the Agreements and authorizes the
execution and delivery of the Agreements.
ARTICLE XI
MISCELLANEOUS
Section 11.1: Further Proceedings. The Chair, Vice Chair, Secretary,
Directors, and other appropriate officials of the Authority are hereby authorized and
directed to do any and all things necessary and/or convenient to carry out the intent,
purposes and terms of this Resolution, including the execution and delivery of such
certificates, documents or papers necessary and advisable.
Section 11.2: 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.
OR
HOU:3209953.2
Section 11.3: 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 11.4: Parties Interested. Nothing in this Resolution expressed or
implied is intended or shall be construed to confer upon, or to give to, any person or
entity, other than the Authority, the Paying Agent/Registrar, the Trustee and the
Owners of the Series 2012 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 Authority, the Paying Agent/Registrar, the Trustee and the
Owners of the Series 2012 Bonds.
Section 11.5: Repealer. All orders, resolutions and ordinances, or parts
thereof, inconsistent herewith are hereby repealed to the extent of such inconsistency.
Section 11.6: Effective Date. This Resolution shall become effective
immediately upon passage by this Authority and signature of the Chair, Vice Chair, or
Director of the Authority.
[Execution Page Follows]
30
HOU:3209953.2
PASSED AND APPROVED this _ day of April, 2012.
Chair, Board of Directors
ATTEST:
Lm
Secretary, Board of Directors
DAP Bond Resolution Series 2012
HOU:3209953.2
Exhibits
A. Private Placement Letter (Tab 1)
DAP Bond Resolution Series 2012
HOU:3209953.2
MINUTES OF A SPECIAL MEETING OF THE DEVELOPMENT AUTHORITY OF
PEARLAND, CITY OF PEARLAND TEXAS, HELD ON MONDAY,APRIL 30, 2012, 4.00
P.M., IN THE FIRST FLOOR CONFERENCE ROOM AT PEARLAND CITY HALL, 3519
LIBERTY DRIVE, PEARLAND, TEXAS.
Mayor Reid called the meeting to order at 4:00 p.m. with the following present.
Chairman Tom Reid
Secretary Ed Baker
Boardmember Tom Pool
Boardmember Tony Carbone
Boardmember Bill Sloan
Others in attendance: Bill Eisen City of Pearland City Manager; Claire Bogard City of
Pearland Finance Director; Rick Overgaard City of Pearland Assistant Finance Director;
Young Lorfing City of Pearland City Secretary; Maria E. Rodriguez City of Pearland Deputy
City Secretary; Ryan O'Hara BOSC, Inc,; Frank Ildebrando, BOSC, Inc,; Trey Lary Allen
Boone Humphries Robinson; Rick Witte, Andrews Kurth LLP; Drew Pelter Shadow'Creek
Ranch Development Company.
NEW BUSINESS:
BOARD ACTION-RESOLUTION NO. RDAP-2012-10—A RESOLUTION AUTHORIZING
THE ISSUANCE OF DEVELOPMENT AUTHORITY OF PEARLAND TAX INCREMENT
. CONTRACT REVENUE AND REFUNDING BONDS, SERIES 2012; APPROVING
DOCUMENTS RELATING TO THE SERIES 2012 BONDS; AND CONTAINING OTHER
PROVISIONS RELATED. Mr. Ryan O'Hara, Managing Director, Texas Public Finance.
Ryan O'Hara stated that there are five outstanding issues by the Development Authority of
Pearland. Two of the issues have cash reserves $1,374,330 and three have surety
policies with reserve requirements. He stated they had been.looking for a buyer for all the
outstanding bonds, Capital One has come forth with the best offer of 3.07% for 10 years
until May 2022,then 65% of 6 month LIBOR plus 2.00% maximum rate of 6.00%. Today'
rate'is below 2.50% and the Bonds are callable anytime. Capital One is not requiring the
Reserve requirements freeing up the $4.2 million dollars. The proposed refunding will
lower the debt service requirements creating the capacity to issue $3.25 million in new
money. He gave an overview of the Tax Increment Contract Revenue and Refunding
Bonds Series for 2012. Mr. O'Hara stated the total benefit to the Development Authority of
Pearland is$4,975,670. He stated the funds that are freed up could be used tO reimburse
the developer.
Discussion ensued between Boardmember Sloan, Rick Witte,Andrews Kurth, LLP, Ryan
O'Hara, Managing Director, BOSC., Inc, and Frank Ildebrando, BOSC, Inc. regarding the
requirements and proposal by Capital One.
Page 1 of 2 —4/30/2012 — DAP
Boardmember Carbone asked if in terms of ratings the agency looks at these bonds
completely separate from other uses by the City and if the reserves carried here have any
effect on other City uses. Boardmember Carbone also asked if the proceeds received from
the Alvin Independent School District could be used for debt service.
Rick Witte, Andrews Kurth LLP, stated yes, the bonds being looked at separate and yes,
the proceeds from the Alvin Independent School can be used for Debt service. He stated
there has not been a situation to where it has needed to be done in the past. The
proceeds are held in a suspense account for about a year because Alvin Independent
School District has the ability to pull out of the transaction. Once the money has been
freed up by calendar, it is free for cash reimbursements or debt service.
Trey Lary, Allen Boone Humphries Robinson LLP, stated in order to proceed further with
this transaction the Board needs to this Resolution authorizing the issuance of the bond; it
authorizes all of the ancillary documents like the escrow agreements, the purchase letter
with Capital One along with a lot of the authorizing requirement to proceed with this
transaction. He stated he is available for any regarding the resolution or any other aspect
on the legal side of the transaction.
Boardmember Pool, made the motion, seconded by Boardmember Carbone, to approve
Resolution No. RDAP-2012-10.
Voting "Aye" Boardmembers Baker, Pool, Sloan, Carbone, and Reid
Voting "No" None.
Motion Passed 5 to 0.
ADJOURNMENT
Meeting was adjourned at 4:45 p.m.
7 Minutes approved as submitted and/or corrected this 17th of Sept .D., 2012
Tom Reid
Chairman
ATTEST:
aleill-,---
Ed Baker
Secretary
Page 2 of 2 —4/30/2012 — DAP