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Ord. 0549 1988-04-11
CERTIFICATE FOR ORDINANCE THE STATE OF TEXAS S COUNTIES OF BRAZORIA AND HARRIS S. We, the undersigned officers of the City Council of the CITY OF PEARLAND, TEXAS, hereby certify as follows: 1. That the City Council of the CITY OF PEARLAND, TEXAS, convened in regular session on April 11, 1988, at the regular meeting place thereof, within the City and the roll was called of the duly constituted officers and members of the City Council, to -wit: Tom Reid Stella Roberts Richard F. Tetens James E. Bost Dennis Frauenberger William E. Wolff Kay Krouse Mayor Councilmember Councilmember Councilmember Councilmember Councilmember City Secretary and all of said persons were present, except the following absentee(s): NONE thus constituting a quorum. Whereupon, among other business, the following was transacted at said meeting: a written ORDINANCE AUTHORIZING THE ISSUANCE OF $2,000,000 CITY OF PEARLAND, TEXAS, PUBLIC IMPROVEMENT BONDS, SERIES 1988; AND DECLARING THAT A SPECIFIC AND IMMEDIATE PUBLIC EMERGENCY EXISTS IN THAT PROCEEDS OF SALE OF SUCH BONDS ARE REQUIRED AS SOON AS POSSIBLE TO ACCOMPLISH THE BOND PURPOSES FOR PROTECTION OF LIFE, HEALTH, PROPERTY AND THE PUBLIC PEACE WITHIN THE CITY was duly introduced for the consideration of the City Council and read in full. It was then duly moved and seconded that said ordinance be adopted; and, after due discussion, said motion, carrying with it the adoption of the ordinance, prevailed and carried by the following vote: AYES: All members of said City Council shown present above voted "Aye". NOES: None. 2. A true, full and correct copy of the aforesaid ordinance adopted at the meeting described in the above and foregoing paragraph is attached to and follows this certificate; that the ordinance has been duly recorded in the City Council's minutes of said meeting; that the above and foregoing paragraph is a true, full and correct excerpt from the City Council's minutes of said meeting pertaining to the adoption of the ordinance; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of the City Council as indicated therein; that each of the officers and members of the City Council was duly and sufficiently notified officially and personally, in advance, of the date, hour, place and purpose of the aforesaid meeting, and that the ordinance would be introduced and considered for adoption at said meeting, and each of said officers and members consented, in advance, to the holding of said meeting for such purpose; that said meeting was open to the public as required by law; and that public notice of the date, hour, place and subject of said meeting was given as required by Vernon's Texas Civil Statutes, Article 6252-17, as amended. SIGNED AND SEALED this llth day of April,988. Cit Secretary Mayor (SEAL) ORDINANCE NO. 549 ORDINANCE AUTHORIZING THE ISSUANCE OF $2,000,000 CITY OF PEARLAND, TEXAS, PUBLIC IMPROVEMENT BONDS, SERIES 1988; AND DECLARING THAT A SPECIFIC AND IMMEDIATE PUBLIC EMERGENCY EXISTS IN THAT PROCEEDS OF SALE OF SUCH BONDS ARE REQUIRED AS SOON AS POSSIBLE TO ACCOMPLISH THE BOND PURPOSES FOR PROTECTION OF LIFE, HEALTH, PROPERTY AND THE PUBLIC PEACE WITHIN THE CITY THE STATE OF TEXAS COUNTIES OF BRAZORIA AND HARRIS CITY OF PEARLAND WHEREAS, the bonds hereinafter authorized were duly and favorably voted at an election held in the City on the 15th day of September, 1984; and WHEREAS, said election authorizing the issuance of the bonds was held in conformity with the Constitution and laws of the State of Texas and section 8.24(a) of the home -rule charter of the City; and WHEREAS, the City Council of the City has and does hereby determine that bonds in the amount of S2,000,000, as a portion and the third installment of the $13,500,000 bonds voted at said election, should now be issued and delivered in order to accomplish the purposes for which they were voted, $9,500,000 bonds of said voted authorization having been heretofore issued, sold, and delivered, and the City reserving the right to issue the remainder of the bonds authorized at such election at a later time; Now, Therefore BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: ARTICLE I DEFINITIONS AND INTERPRETATIONS Section 1.1: Definitions. Throughout this ordinance the following terms and expressions as used herein shall have the meanings set forth below: The term "Bond" or "Bonds" shall mean any bond or all bonds, as the case may be, of the Public Improvement Bonds, Series 1988, authorized in this Ordinance, unless the context clearly indicates otherwise. 1 The term "City" shall mean the City of Pearland, Texas, and, where appropriate, the City Council. The term "Construction Fund" shall mean the construc- tion fund established by the City pursuant to Article VI of this Ordinance. The term "Interest and Sinking Fund" shall mean the interest and sinking fund established by the City pursuant to Section 5.1 of this Ordinance. The term "Interest Payment Date", when used in connec- tion with any Bond, shall mean March 1, 1989, and each September 1 and March 1 thereafter until maturity or earlier redemption of such Bond. The term "Ordinance" .as used herein and in the Bonds shall mean this ordinance authorizing the Bonds and all amendments hereof and supplements hereto. The term "Owner" shall mean any person who shall be the registered owner of any outstanding Bonds. The term "Paying Agent" shall mean the Registrar. The term "Record Date" shall mean, for any Interest Payment Date, the 15th calendar date of the month next preceding such Interest Payment Date. The term "Register" shall mean the books of registra- tion kept by the Registrar in which are maintained the names and addresses of and the principal amounts registered to each Owner. The term "Registrar" shall mean MTrust Corp, National Association, Houston, Texas, and its successors in that capacity. Section 1.2:. Interpretations. All definitions of terms used herein and all pronouns -used in this Ordinance shall be deemed to apply equally to singular and plural and to all genders. The titles and headings of the articles and sections of this Ordinance have been inserted for conve- nience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof. This Ordinance and all the 2 terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein. ARTICLE II TERMS OF THE BONDS Section 2.1: Amount and Purpose. The Bonds shall be issued in fully registered form, without coupons, in the total authorized aggregate amount of Two Million Dollars ($2,000,000) for the purpose of construction and improvement of the roads, bridges, and streets of the City. Section 2.2: Designation, Date, and Interest Payment Date. The Bonds shall be designated as the "CITY OF PEARLAND, TEXAS, PUBLIC IMPROVEMENT BONDS, SERIES 1988", and shall be dated May 1, 1988. The Bonds shall bear interest from the later of May 1, 1988, or the most recent Interest Payment Date to which interest has been paid or duly pro- vided for, calculated on the basis of a 360-day year of twelve 30-day months, interest payable on March 1, 1989, and semiannually thereafter on September 1 and March 1 of each year until maturity or prior redemption. Section 2.3: Numbers, Denomination, Interest Rates and Maturities. The Bonds shall be issued bearing the numbers, in the principal amounts, and bearing interest at the rates set forth in the following schedule, and may be transferred and exchanged as set out in this Ordinance. The Bonds shall mature, subject to prior redemption in accordance with this Ordinance, on March 1 in each of the .years and in the amounts set out in such schedule. Bonds delivered in trans- fer of or in exchange for other Bonds shall be numbered in order of their authentication by the Registrar, shall be in the denomination of $5,000 or integral multiples thereof, and shall mature on the same date and bear interest at the same rate as the Bond or Bonds in lieu of which they are de- livered. Bond Principal Interest Number Year Amount Rate R- 1 1989 $ 50,000 8.80 R- 2 1990 50,000 8.80 R- 3 1991 50,000 8.80 R- 4 1992 50,000 8.80 3 R- 5 1993 50,000 8.80 R- 6 1994 50,000 8.80 R- 7 1995 50,000 8.80 R- 8 1996 50,000 8.80 R- 9 1997 100,000 8.00 R-10 1998 250,000 6.80 R-11 1999 250,000 6.90 R-12 2000 250,000 7.00 R-13 2001 250,000 7.10 R-14 2002 250,000 7.25 R-15 2003 250,000 7.25 Section 2.4: Execution of Bonds; Seal. The Bonds shall be signed by the Mayor of the City and countersigned by the City Secretary of the City, by their manual, litho- graphed, or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Bonds shall have the same effect as if each of the Bonds had been signed manually and in person by each of said officers, and such facsimile seal on the Bonds shall have the same effect as if the official seal of the City had been manually impressed upon each of the Bonds. If any officer of the City whose manual or facsimile signature shall appear on the Bonds shall cease to be such officer before the authentication of such Bonds or before the delivery of such Bonds, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in such office. Section 2.5: Authentication. Only such Bonds as shall bear thereon either (i) the manually executed registration certificate of the Comptroller of Public Accounts of Texas substantially in the form provided in Section 4.2 of this Ordinance or (ii) a certificate of authentication, substan- tially in the form provided in Section 4.3 of this Ordi- nance, manually executed by an authorized officer of the Registrar, shall be entitled to the benefits of this Ordi- nance or shall be valid or obligatory for any purpose. Such duly executed certificate of authentication shall be conclu- sive evidence that the Bond so authenticated was delivered by the Registrar hereunder. Section 2.6: Medium and Place of Payment. The Regis- trar is hereby appointed as the Paying Agent for the Bonds. The principal of the Bonds shall be payable, without ex- change or collection charges, in any coin or currency of the United States of America, which, on the date of payment, is 4 legal tender for the payment of debts due the United States of America, upon their presentation and surrender as they become due and payable, whether at maturity or by prior redemption, at the principal corporate trust office of the Registrar. The interest on each Bond shall be payable by check or draft payable on the Interest Payment Date mailed by the 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. Section 2.7: Ownership; Unclaimed Principal and Interest. The City, the Registrar and any other person may treat the person in whose name any Bond is registered as the absolute owner of such Bond for the purpose of making and receiving payment of the principal thereof and for the further purpose of making and receiving payment ofthe interest thereon, and for all other purposes, whether or not such Bond is overdue, and neither the City nor the Registrar shall be bound by any notice or knowledge to the contrary. All payments made to the person deemed to be the Owner of any Bond in accordance with this Section 2.7 shall be valid and effectual and shall discharge the liability of the City and the Registrar upon such Bond to the extent of the sums paid. Amounts held by the Registrar which represent principal of and interest on the Bonds remaining unclaimed by the Owner after the expiration of three years from the date such amounts have become due and payable shall be reported and disposed of by the 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 2.8: Registration, Transfer and Exchange. So long as any Bonds remain outstanding, the Registrar shall keep the Register at its principal corporate trust office in which, subject to such reasonable regulations as it may pre- scribe, the Registrar shall provide for the registration and transfer of Bonds in accordance with the terms of this Ordinance. Each Bond shall be transferable only upon the presenta- tion and surrender thereof at the principal corporate trust office of the 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 Registrar. Upon due presentation of any Bond for 5 transfer, the Registrar shall authenticate and deliver in exchange therefor, within 72 hours after such presentation, a new Bond or Bonds, registered in the name of the trans- feree or transferees, in authorized denominations and of the same maturity and aggregate principal amount and bearing interest at the same rate as the Bond or Bonds so presented. All Bonds shall be exchangeable upon presentation and surrender thereof at the principal corporate trust office of the Registrar for a Bond or Bonds of the same maturity and interest rate and in any authorized denomination, in an aggregate principal amount equal to the unpaid principal amount of the Bond or Bonds presented for exchange. The Registrar shall be and is hereby authorized to authenticate and deliver exchange Bonds in accordance with the provisions of this Section 2.8. Each Bond delivered in accordance with this Section 2.8 shall be entitled to the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such Bond is delivered. The City or the 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 Registrar for such transfer or exchange shall be paid by the City. The Registrar shall not be required to transfer .or exchange any Bond during a period beginning at the opening of business fifteen (15) calendar days prior to the first mailing of a notice of redemption of Bonds and ending at the close of business on the day of such mailing. Section 2.9: Cancellation. All Bonds paid or redeemed in accordance with this Ordinance, and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and delivered in accordance herewith, shall be cancelled and destroyed upon the making of proper records regarding such payment or redemption. The Registrar shall furnish the City with appropriate certificates of destruction of such Bonds. Section 2.10: Replacement Bonds. Upon the presenta- tion and surrender to the Registrar of a mutilated Bond, the Registrar shall authenticate and deliver in exchange there- for a replacement Bond of like maturity, interest rate and principal amount, bearing a number not contemporaneously outstanding. The City or the Registrar may require the 6 Owner of such Bond to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in con- nection therewith and any other expenses connected there- with, including the fees and expenses of the Registrar. If any Bond is lost, apparently destroyed, or wrongfully taken, the City, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall execute and the Registrar shall authenti- cate 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: (a) furnished to the City and the Registrar satisfactory evidence of the ownership of and the circumstances of the loss, destruction or theft of such Bond; (b) furnished such security or indemnity as may be required by the Registrar and the City to save them harmless; (c) paid all expenses and charges in connection therewith, including, but not limited to, printing costs, legal fees, fees of the Registrar and any tax or other governmental charge that may be imposed; and (d) met any other reasonable requirements of the City and the Registrar. If, after the delivery of such replacement Bond, a bona fide purchaser of the original Bond in lieu of which such re- placement Bond was issued presents for payment such original Bond, the City and the Registrar shall be entitled to recover such replacement Bond from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the City or the Registrar in connection therewith. If any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or is about to become due and payable, the City in its discretion may, instead of 7 issuing a replacement Bond, authorize the Registrar to pay such Bond. Each replacement Bond delivered in accordance with this Section 2.10 shall be entitled to the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such replacement Bond is delivered. ARTICLE III OPTION OF PRIOR REDEMPTION Section 3.1: Optional Redemption. The City reserves the right, at its option, to redeem prior to maturity the Bonds maturing on or after March 1, 1999, in whole or from time to time in part, on March 1, 1998, or on any Interest Payment Date thereafter at par plus accrued interest on the Bonds called for redemption to the date fixed for redemp- tion. If less than all of the Bonds within a stated maturity are redeemed at any time, the Bonds to be redeemed shall be selected by the City. Section 3.2: Partial Redemption. 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 Registrar, in accordance with Section 2.8 hereof, shall authenticate and deliver in exchange therefor a Bond or Bonds of like maturity and interest rate in an aggregate principal amount equal to the unredeemed portion of the Bond so surrendered. Section 3.3: Notice of Redemption. Notice of any redemption identifying the Bonds to be redeemed in whole or in part shall be given by the Registrar at least thirty days prior to the date fixed for redemption by (i) sending written notice by certified mail to the Owner of each Bond to be redeemed in whole or in part at the address shown on the Register and (ii) publication one time in a financial journal or publication published in the City of New York, New York, or in the City of Austin, Texas. Such notices shall state the redemption date, the amount of accrued interest payable on the redemption date, the place at which Bonds are to be surrendered for payment and, if less than all Bonds outstanding are to be redeemed, the numbers of the Bonds or portions thereof to be redeemed. Any notice given 8 as provided in this Section 3.3 shall be conclusively presumed to have been duly given, whether or not the Owner receives such notice. By the date fixed for redemption, due provision shall be made with the Registrar for payment of the redemption price of the Bonds or portions thereof to be redeemed, plus accrued interest to the date fixed for redemption. When Bonds have been called for redemption in whole or in part and due provision has been made to redeem same as herein provided, the Bonds or portions thereof so redeemed shall no longer be 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. ARTICLE IV FORM OF BONDS AND CERTIFICATES Section 4.1: Form of Bonds. The Bonds shall be in substantially the following form, with such additions, deletions and variations as may be necessary or desirable and not prohibited by this Ordinance: (Face of Bond) UNITED STATES OF AMERICA STATE OF TEXAS COUNTIES OF BRAZORIA AND HARRIS NUMBER DENOMINATION R- $ REGISTERED REGISTERED CITY OF PEARLAND, TEXAS PUBLIC IMPROVEMENT BOND, SERIES 1988 INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP: May 1, 1988 REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS THE CITY OF PEARLAND, TEXAS (the "City") promises to pay to the registered owner identified above, or registered 9 assigns, on the date specified above, upon presentation and surrender of this bond at the principal corporate trust office of MTrust Corp, National Association, HOUSTON, TEXAS (the "Registrar"), the principal amount identified above, payable in any coin or currency of the United States of America which on the date of payment of such principal is legal tender for the payment of debts due the United States of America, and to pay interest thereon at the rate shown above, calculated on the basis of a 360-day year of twelve 30-day months, from the later of May 1, 1988, 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 or draft payable on March 1, 1989 and semiannually thereafter on each September 1 and March 1, mailed to the registered owner as shown on the books of registration kept by the Registrar as of the l5th calendar date of the month next preceding each interest payment date. 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. IN WITNESS WHEREOF, this bond has been signed with the manual or facsimile signature of the Mayor of the City and countersigned with the manual or facsimile signature of the City Secretary of the City, and the official seal of the City has been duly impressed, or placed in facsimile, on this bond. (AUTHENTICATION CERTIFICATE) (SEAL) CITY OF PEARLAND, TEXAS Mayor City Secretary (Back Panel of Bond) THIS BOND is one of a duly authorized series of Bonds, aggregating $2,000,000 (the "Bonds"), issued for the purpose of construction and improvement of the roads, bridges, and streets of the city, and pursuant to an ordinance adopted by the City Council on April 11, 1988 (the "Ordinance") . 10 THE CITY RESERVES THE RIGHT, at its option, to redeem the Bonds maturing on or after March :1, 1999, prior to their scheduled maturities, in whole or from time to time in part, in integral multiples of $5,000, on March 1, 1998, or on any interest payment date thereafter at par plus accrued inter- est on the principal amounts called for redemption to the date fixed for redemption. Reference is made to the Ordi- nance 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 cer- tified mail, addressed to the registered owners of each Bond to be redeemed in whole or in part at the address shown on the books of registration kept by the Registrar and by publication once in a financial journal or publication published in the City of New York, New York, or in the City of Austin, Texas. 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 redemp- tion. THIS BOND IS TRANSFERABLE only upon presentation and surrender at the principal corporate trust office of the 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 condi- tions of the Ordinance. THE BONDS ARE EXCHANGEABLE at the principal corporate trust office of the Registrar for bonds in the principal amount of $5,000 or any integral multiple thereof, subject to the terms and conditions of the Ordinance. THE REGISTRAR SHALL NOT BE REQUIRED to transfer or exchange any Bond during a period beginning at the opening of business fifteen (15) calendar days prior to the first mailing of a notice of redemption of Bonds and ending at the close of business on the day of such mailing. THIS BOND SHALL NOT BE valid or obligatory for any pur- pose or be entitled to any benefit under the Ordinance unless this Bond either (i) is registered by the Comptroller of Public Accounts of the State of Texas by registration 11 certificate endorsed hereon or (ii) is authenticated by the Registrar by due execution of the authentication certificate endorsed hereon. IT IS HEREBY CERTIFIED, RECITED AND COVENANTED that this Bond has been duly and validly issued and delivered; that all acts, conditions and things required or proper to be performed, to exist and to be done precedent to or in the issuance and delivery of this Bond have been performed, exist and have been done in accordance with law; and that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Bond, as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in the City within the limits prescribed by the Constitution and laws of the State of Texas, and have been pledged irrevocably for such payment. Section 4.2: Registration of Bonds by State Comptroller. Bonds No. R-1 through R-15 shall be registered by the Comptroller of Public Accounts of the State of Texas, as provided by law. The registration certificate of the Comptroller of Public Accounts shall be attached or affixed to Bonds R-1 through R-15 and shall be in substantially the following form: COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I HEREBY CERTIFY that this bond has been examined, cer- tified as to validity, and approved by the Attorney General of the State of Texas, and that this bond has been regis- tered by the Comptroller of Public Accounts of the State of Texas. WITNESS MY SIGNATURE AND SEAL this XXXXXXXXXX Comptroller of Public Accounts (SEAL) of the State of Texas Section 4.3: Form of Authentication Certificate. The following form of authentication certificate shall be printed on the face of each of the Bonds: 12 Registration Date: AUTHENTICATION CERTIFICATE It is hereby certified that this Bond has been delivered pursuant to the Ordinance described in the text of this Bond, in exchange for or in replacement of a Bond, Bonds or a portion of a Bond or Bonds of a Series which was originally approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. MTrust Corp, National Association Houston, Texas By Authorized Signature Date of Authentication: Section 4.4: Form of Assignment. The following form of assignment shall be printed on the back of each of the Bonds: ASSIGNMENT For value received, the undersigned hereby sells, assigns, and transfers unto (Please print or type name, address, and zip code of Transferree) (Please insert Social Security or Taxpayer Identification Number of Transferee) the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer said bond on the books kept for registration thereof, with full power of substitution in the premises. 13 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. Statement of Insurance Municipal Bond Guaranty Insurance Policy No. (the "Policy") with respect to payments due for principal of and interest on this bond has been issued by AMBAC Indemnity Corporation ("AMBAC Indemnity"). The policy has been delivered to the United States Trust Company of New York, New York, New York, as the Insurance Trustee under said Policy and will be held by such Insurance Trustee or any successor insurance trustee. The policy is on file and available for inspection at the principal office of the Insurance Trustee and a copy thereof may be secured from AMBAC Indemnity or the Insurance Trustee. All payments required to be made under the Policy shall be made in accordance with the prvisions thereof. The owner of this bond acknowledges and consents to the subrogation rights of AMBAC Indemnity as more fully set forth in the Policy. Section 4.5: Legal Opinion; CUSIP. The approving opinion of Vinson & Elkins, Houston, 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 BONDS Section 5.1: Interest and Sinking Fund; Tax Levy. The proceeds from all taxes levied, assessed and collected for and on account of the Bonds authorized by this Ordinance shall be deposited, as collected, in a special fund to be designated "City of Pearland, Texas, Public Improvement Bonds, Series 1988, Interest and Sinking Fund". While said 14 Bonds or any part of the principal thereof or interest thereon remain outstanding and unpaid, there is hereby levied and there shall be annually levied, assessed and collected in due time, form and manner within the limits prescribed by law, and at the same time other City taxes are levied, assessed and collected, in each year, beginning with the current year, a continuing direct annual ad valorem tax upon all taxable property in said City sufficient to pay the current interest on said Bonds as the same becomes due, and to provide and maintain a sinking fund adequate to pay the principal of the Bonds as such principal matures but never less than two percent (2%) of the original principal amount of the Bonds each year, full allowance being made for delin- quencies and costs of collection, and said taxes when col- lected shall be applied to the payment of the interest on and principal of said Bonds and to no other purpose. In addition, interest accrued from the date of the Bonds until their delivery, and premium if any, is to be deposited in such fund. Section 5.2: Investment of Interest and Sinking Fund. Money in the Interest and Sinking Fund may, at the option of the City, be invested in time deposits or certificates of deposit secured in the manner required by law for public funds, or be invested in direct obligations of, or obliga- tions the principal of and interest on which are uncondi- tionally guaranteed by, the United States of America, in obligations of any agencies or instrumentalities of the United States of America or as otherwise permitted by state law; provided that all such deposits and investments shall be made in such manner (which may include repurchse agreements for such investments) that money required to be expended from the Interest and Sinking Fund will be available at the proper time or times. All such invest- ments shall be valued in terms . of current market value no less frequently than the last business day of the City's Fiscal Year, except that any direct obligations of the United States of America - State and Local Government Series shall be continuously valued at their par value or principal face amount. Any obligation in which money is so invested shall be kept and held in an official depository of the City, except as hereinafter provided. For purposes of maximizing investment returns, money in such Interest and Sinking Fund may be invested, together with money in the Construction Fund or with other money of the City, in common investments of the kind described above, or in a common pool of such investments which shall be kept and held at an official depository of the City, which shall not be deemed 15 to be or constitute a commingling of such money or Funds provided that safekeeping receipts or certificates of participation clearly evidencing the investment or invest- ment pool in which such money is invested and the share thereof purchased with such money or owned by such Fund are held by or on behalf of each such Fund. If necessary, such investments shall be promptly sold to prevent any default. All interest and income derived from such deposits and investments of the Interest and Sinking Fund shall be credited to the Interest and Sinking Fund. So long as any Bonds remain outstanding, all uninvested moneys on deposit in, or credited to, the Interest and Sinking Fund shall be secured by the pledge of security, as provided by law for cities in the State of Texas. ARTICLE VI CONSTRUCTION FUND Section 6.1: Construction Fund. There is hereby created and established a special fund of the City, to be known as the "City of Pearland, Texas, Public Improvement Bonds, Series 1988, Construction Fund", which shall be maintained as a separate account on the books of the City. Money on deposit in the Construction Fund shall be used only for the purposes set forth in Section 2.1 of this Ordinance, except that interest and income derived from deposit and investment of moneys in the Construction Fund may be utilized as provided below in Section 6.2 hereof. Section 6.2: Investment of Money in Construction Fund. Money on deposit in the Construction Fund may, at the option of the City, be invested as permitted by Texas law;. provided that all such deposits and investments shall be made in such manner (which may include repurchase agreements for such investments) that the money required to be expended from the Construction Fund will be available at the proper time or times. All such investments shall be valued in terms of current market value no less frequently than the last business day of the City's Fiscal Year, except that any direct obligations of the United States of America -- State and Local Government Series shall be continuously valued at their par value or principal face amount. Any obliga- tion in which money is so invested shall be kept and held in an official depository of the City, except as herein- after provided. For purposes of maximizing investment 16 returns, money in the Construction Fund may be invested, together with money in the Interest and Sinking Fund or with other money of the City, in common investments of the kind described above, or in a common pool of such investments which shall be kept and held at an official depository of the City, which shall not be deemed to be or constitute a commingling of such money or Funds provided that safekeeping receipts or certificates of participation clearly evidencing the investment or investment pool in which such money is invested and the share thereof purchased with such money or owned by the Construction Fund are held by or on behalf of the Construction Fund. All interest and income derived from such deposits and investments shall remain in the Construc- tion Fund, except that (a) to the extent required by law, such interest and income may be applied to make such pay- ments to the United States of America as shall be required to assure that interest on the Bonds is exempt from federal income taxation, and (b) in the discretion of the City, such interest and income may be utilized to pay principal of and interest on the Bonds. ARTICLE VII PROVISIONS CONCERNING SALE AND DISPOSITION OF PROCEEDS OF BONDS Section 7.1: Sale of Bonds. The sale of the Bonds to Clayton Brown & Associates, Inc. (the "Purchaser") at the price of par plus accrued interest thereon to date of delivery, plus a cash premium of $-0-, is hereby authorized, approved, ratified and confirmed, subject to the unqualified approving opinion as to the legality of the Bonds of the Attorney General of the State of Texas, and of Vinson & Elkins, Houston, Texas, bond counsel. It is hereby found and declared that the bid of said Purchaser is the best obtained by the City for the Bonds pursuant to and after taking public bids for the sale thereof. Section 7.2: Approval, Registration and Delivery. After the Bonds to be initially issued shall have been executed, it shall be the duty of the Mayor of the City to deliver the Bonds to be initially issued and all pertinent records and proceedings to the Attorney General of Texas, for examination and approval by the Attorney General. After the Bonds to be initially issued shall have been approved by the Attorney General, they shall be delivered to the Comp- troller of Public Accounts of the State of Texas for 17 registration. Upon registration of the Bonds to be initial- ly issued, the Comptroller of Public Accounts (or a deputy lawfully designated in writing to act for the Comptroller) shall manually sign the Comptroller's Registration Certifi- cate prescribed herein to be attached or affixed to the Bonds to be initially issued, and the seal of said Comp- troller shall be impressed, or placed in facsimile, thereon. Section 7.3: Tax Exemption. The City covenants that it shall make such use of the proceeds of the Bonds, regulate investments of proceeds thereof and take such other and further actions as may be required by Sections 103 and 141-150 of the Internal Revenue Code of 1986 (the "Code") and all applicable temporary, proposed and final regulations and procedures promulgated thereunder or promulgated under the Internal Revenue Code of 1954, to the extent applicable to the Code ("Regulations"), necessary to assure that interest on the Bonds is excludable from gross income for federal income tax purposes. Without limiting the generality of the foregoing covenant, the City hereby covenants as follows: (a) The City will not use, nor permit to be used, more than 10 percent of the net proceeds of the Bonds in the trade or business of any person (other than use as a member of the general public) other than a governmental unit ("private -use proceeds"). For purposes of this Section, the term "net proceeds" means the proceeds derived from the sale o.f the Bonds, plus interest earnings thereon, less any amounts deposited in a reasonably required reserve or replacement fund; the term "person" includes any individual, corporation, partnership, unincorpor- ated association or any other entity capable of carrying on a trade or business; and the term "trade or business" means, with respect to any natural person, any activity regularly carried on for profit and, with respect to persons other than natural persons, means any activity other than an activity carried on by a governmental unit; (b) The City will not use, nor permit to be used, more than 5 percent of the net proceeds of the Bonds in the trade or business of any person other than a governmental unit if such use is 18 unrelated to the governmental purpose of the Bonds. Further, the amount of private -use proceeds of the Bonds ("excess private -use proceeds") will not exceed the proceeds of the Bonds expended for the governmental purpose of the Bonds to which such excess private -use proceeds relate; (c) Principal and interest on the Bonds will be paid solely from ad valorem taxes collected by the City. Further, no person using more than 10 percent of the net proceeds of the Bonds in a trade or business, other than a governmental unit, shall make payments (other than as a member of the general public), directly or indirectly, accounting for more than 10 percent of such principal and interest; (d) The City will not use, or permit to be used, an amount exceeding the lesser of (i) $5,000,000 or (ii) 5 percent of the net proceeds of the Bonds to finance loans to persons other than governmental units, directly or indirectly; (e) Based upon all facts and estimates now known or reasonably expected to be in existence on the date the Bonds are delivered, the City 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; (f) The City will monitor the yield on the investment of the proceeds of the Bonds and moneys pledged to the repayment of the Bonds and will restrict the yield on such investments to the extent required by the Code or the Regu- lations. Without limiting the generality of the foregoing, the City will take appropriate steps to restrict the yield on all proceeds of the Bonds on hand on a date that is three years from the date of delivery of the Bonds to a yield which is not materially higher than the yield on the Bonds (in both cases calculated in accordance with the Code and Regulations); 19 (g) The City will not cause. the Bonds to be treated as "federally guaranteed" obligations for purposes of Section 149(b) of the Code (as may be modified in any applicable rules, rulings, policies, procedures, regulations or other official statements promulgated or proposed by the Department of the Treasury or the Internal Revenue Service with respect to "federally guaranteed" obligations described in Section 149(b) of the Code) ; and (h) The City will take all necessary steps to comply with the requirement that "excess arbitrage profits" earned on the investment of the "gross proceeds" of the Bonds (within the meaning of Section 148(f)(6)(B) of the Code), if any, be rebated to the federal government. Specifically, the City will (i) maintain records regarding the investment of the gross proceeds of the Bonds as may be required to calculate such "excess arbitrage profits" separately from records of amounts on deposit in the funds and accounts of the City allocable to other bond issues of the City or moneys which do not represent gross proceeds of any bonds of the City, (ii) calculate, not less often than annually, the amount of "excess arbitrage pro- fits," if any, earned from the investment of the gross proceeds of the Bonds and (iii) pay, not less often than every fifth anniversary date of the delivery of the Bonds, all amounts required to be rebated to the federal government. Further, the City will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the gross proceeds of the Bonds that might result in a "prohibited payment" within the meaning of Temp. Treas. Reg. §1.103-15AT. (i) The City will timely file a statement with the federal government setting forth the informa- tion required pursuant to Section 149(e) of the Code. 20 All officers, employees and agents of the City are authorized and directed to provide certifications of facts and estimates that are material to the reason- able expectations of the City regarding the foregoing as of the date the Bonds are delivered. In complying with the foregoing covenants, the City may rely from time to time upon an opinion issued by nationally -recognized bond counsel to the effect that any action by the City in reliance upon any interpre- tation 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. Section 7.4: Qualified Tax -Exempt Obligations. The City hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of section 265(b) of the Code. In connection therewith, the City represents (a) that the aggregate amount of tax-exempt obligations issued by the City during calendar year 1988, including the Bonds, which have been designated as "qualified tax-exempt obligations" under section 265(b)(3) of the Code does not exceed $10,000,000, and (b) that the reasonably anticipated amount of tax-exempt obligations which will be issued by the City during calendar year 1988, including the Bonds, will not exceed $10,000,000. For purposes of this section 7.4, the term "tax-exempt obligation" does not include "private activity bonds" within the meaning of section 141 of the Code, other than "qualified 501(c)(3) bonds" within the meaning of section 145 of the Code. In addition, for purposes of this section 7.4, the City includes all governmental units which are "subordinate entities" of the City, within the meaning of section 265(b) of the Code. Section 7.5: Books and Records. So long as any of the Bonds are outstanding the City covenants and agrees that it will keep proper books of record and account in which full, true and correct entries will be made of all dealings, activities and transactions relating to the Bonds and the funds created pursuant to this Ordinance, and all books, documents and vouchers relating thereto shall at all reasonable times be made available for inspection upon request of any Owner. 21 ARTICLE VIII MISCELLANEOUS Section 8.1: Official Statement. The City ratifies and confirms its prior approval of the form and content of the Official Statement prepared for initial offering and sale of the Bonds and hereby approves the form and content of any addenda, supplement, or amendment thereto. The use of such Official Statement in the reoffering of the Bonds by the Purchaser is hereby approved and authorized. The proper officials of the City are hereby authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed therein, dated as of the date of payment for and delivery of the Bonds. Section 8.2: Provisions Concerning Registrar. (a) The Registrar, by undertaking the performance of the duties of. the Registrar and in consideration of the payment of fees and/or deposits of money pursuant to this Ordinance and a Paying Agent/Registrar Agreement, accepts and agrees to abide by the terms of this Ordinance and such Agreement. The City hereby approves the Paying Agent/Registrar Agreement. (b) The City reserves the right to replace the Regis- trar or its successor at any time. If the Registrar is replaced by the City, the new Registrar shall accept the previous Registrar's records and act in the same capacity as the previous Registrar. Any successor Registrar shall be either a national or state banking institution and a corpo- ration organized and doing business under the laws of the United States of America or any State authorized under such laws to exercise trust powers and subject to supervision or examination by Federal or State authority. Section 8.3: Further Procedures. The Mayor, and the City Secretary and other appropriate officials of the City are hereby authorized and directed to do any and all things necessary and/or convenient to carry out the terms and purposes of this Ordinance. Section 8.4: Severability. If any Section, paragraph, clause or provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such Section, paragraph, clause or 22 provision shall not affect any of the remaining provisions of this Ordinance. Section 8.5: Declaration of Emergency; Open Meeting. It is hereby officially found and determined that this Ordinance relates to an immediate public emergency affecting life, health, property and the public peace, and that such emergency and urgent public necessity exist, the specific emergency being that the proceeds from the sale of the Bonds are required as soon as possible so that the City may proceed without unnecessary delay to accomplish the purposes for which the Bonds were voted in order to further protect life, health, property and the public peace within the City; that such emergency and necessity require the adoption of this Ordinance and the holding of the meeting at which this Ordinance is adopted at the time and place held; the meeting at which this Ordinance was adopted was open to the public, and public notice of the time, place and purpose of said meeting was given, all as required by Vernon's Texas Civil Statutes Article 6252-17, as amended; and that such notice as given is hereby authorized, approved, adopted and ratified. Section 8.6: Effect of Ordinance. This Ordinance shall be in force and effect from and after its passage, and it is so ordered. Section 8.7: Repealer. All orders, resolutions and ordinances, or parts thereof, inconsistent herewith are hereby repealed to the extent of such inconsistency. PASSED AND APPROVED on first and only required reading as an emergency ordinance pursuant to Section 3.10 of the City Charter on this llth day of April, 1988. ATTEST: City Secttetary CITY OF PEARLAND, TEXAS (SEAL) ayor CITY OF PEARLAND, TEXAS 23 r.. /'i- r..• r• r•-. r... ,.... '1-9 "'1 1 -, 71 -'1 CITL OF PEARLAND, TEXAS PUBLIC IMPROVEMENT BONG": SERIES 1988 l * * * * * * k * * * * $2 , 000, 00C * * * * * * * * * * CITY OF PEARLAND, TEXAS PUBLIC IMPROVEMENT BONDS SERIES 1988 $2, 000, 000 Document No. Vinson & Elkins Opinion i General Certificate 2 Preliminary Official Statement and Notice of Sale 3 Winning Bid 4 Certified Copy of Bond Ordinance 5 Certificate of Assessed Valuation 6 Signature Identification and No-Litigation Certificate 7 Attorney General 's Opinion and Comptroller' s Registration Certificate 8 Paying Agent/Registrar Agreement 9 AMBAC Insurance Policy and Opinion 10 Final Official Statement 11 Official Statement Certificate 12 No-Arbitrage Certificate 13 8038 Information Return 14 Receipt and No-Litigation Certificate 15 Purchaser's Receipt 16 Registrar's Receipt 17 Specimen Bond 18 VINSON & ELKINS ATTORNEYS AT LAW THE WILLARD OFFICE BUILDING FIRST CITY CENTRE 1455 PENNSYLVANIA AVE. N.W. 3300 FIRST CITY TOWER 816 CONGRESS AVENUE WASHINGTON,D.C. 20004-1007 1001 FANNIN AUSTIN,TEXAS 7B701-2496 TELEPHONE 202639-6500 TELEX 89680 HOUSTO N,TEXAS 77002-6760 TELEPHONE 512495-8400 TELEPHONE 713 651-2222 TELEX 762146 47 CHARLES ST., BERKELEY SQUARE 3700 TRAMMELL CROW CENTER LONDON W1X 7PB, ENGLAND May 11, 1988 2001 ROSS AVENUE TELEPHONE 01 441 491-7236 DALLAS,TEXAS 75201-2916 CABLE VINELKINS LONDON WI-TELEX 24140 TELEPHONE 214 220-7700 WE HAVE ACTED as bond counsel for the CITY OF PEARLAND, TEXAS (the "City" ) , in connection with an issue of bonds (the "Bonds" ) described as follows: CITY OF PEARLAND, TEXAS, PUBLIC IMPROVEMENT BONDS, SERIES 1988, dated May 1, 1988, in the total authorized aggregate amount of $2, 000, 000, maturing on March 1 in each year as follows: Amount Amount Year Maturing Year Maturing 1989 $ 50, 000 1997 $100, 000 1990 50, 000 1998 250, 000 1991 50, 000 1999 250, 000 1992 50, 000 2000 250, 000 1993 50, 000 2001 250, 000 1994 50, 000 2002 250, 000 1995 50, 000 2003 250, 000 1996 50, 000 The Bonds bear interest, are subject to redemption prior to maturity, and may be transferred and exchanged as set out in the Bonds and in the Ordinance adopted by the City Council of the City authorizing their issuance (the "Ordinance" ) . WE HAVE ACTED as bond counsel for the sole purpose of rendering an opinion with respect to the legality and validity of the Bonds under the Constitution and laws of the State of Texas, under which the City is acting as a home-rule city of the State of Texas, and with respect to the exclusion of interest on the Bonds from gross income for federal income tax purposes. We have not investigated or verified original proceedings, records, data or other material, but have relied solely upon the transcript of certified proceedings described in the following paragraph. We have not assumed any responsibility with respect to the financial condition or capabilities of the City or the disclosure thereof in connection with the sale of the Bonds . Our role in connection with the City' s Official Statement prepared for use in connection with the sale of the Bonds has been limited as described therein. IN OUR CAPACITY as bond counsel, we have participated in the preparation of and have examined a transcript of certified proceedings pertaining to the Bonds which contains certified copies of certain proceedings of the City, customary certificates of officers, agents and represen- tatives of the City and other public officials and other certified showings relating to the authorization and issu- ance of the Bonds. We have also examined executed Bond No. R-1 of this issue. BASED ON SUCH EXAMINATION, IT IS OUR OPINION that the transcript of certified proceedings evidences complete legal authority for the issuance of the Bonds in full compliance with the Constitution and laws of the State of Texas pres- ently effective and that therefore the Bonds constitute valid and legally binding obligations of the City and are payable both as to principal and interest from the receipts of an annual ad valorem tax levied, within the limits prescribed by law, on taxable property located within the City. THE RIGHTS OF THE OWNERS of the Bonds are subject to the applicable provisions of the federal bankruptcy laws and any other similar laws affecting the rights of creditors of political subdivisions, and may be limited by general principles of equity which permit the exercise of judicial discretion. IT IS OUR FURTHER OPINION that: ( 1 ) Interest on the Bonds is excludable from gross income of the holders for federal income tax purposes under existing law. (2 ) The Bonds are not "private activity bonds" within the meaning of the Internal Revenue Code of 1986, as amended (the "Code" ) , and interest on the Bonds is not subject to the alternative minimum tax on individuals and corporations, except that interest on the Bonds will be included in the "adjusted net book income" and "adjusted current earnings" of a corporation (other than any S corporation, regulated investment company, REIT, or REMIC) for purposes of computing its alter- native minimum tax and its Superfund "environ- mental tax" liability. In providing such opinions, we have relied on represen- tations of the City with respect to matters solely within the knowledge of the City which we have not independently verified, and have assumed continuing compliance with the covenants in the Ordinance pertaining to those sections of the Code which affect the exclusion from gross income of interest on the Bonds for federal income tax purposes. If such representations are determined to be inaccurate or incomplete or the City fails to comply with the foregoing covenants of the Ordinance, interest on the Bonds could become includable in gross income from the date of their original delivery, regardless of the date on which the event causing such inclusion occurs . In the Ordinance the City has designated the Bonds as "qualified tax-exempt obligations" under the Code and has made the representations and covenants, which we have not independently verified, necessary to qualify the Bonds as "qualified tax-exempt obligations" . Based on such representations and covenants, it is our opinion that the Bonds are "qualified tax-exempt obligations" under existing law. Except as stated above, we express no opinion as to any federal, state or local tax consequences resulting from the ownership of, receipt of interest on, or disposition of, the Bonds. Owners of the Bonds should be aware that the ownership of tax-exempt obligations may result in collateral federal income tax consequences to financial institutions, life insurance and property and casualty insurance companies, certain S corporations with Subchapter C earnings and profits, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations . In addition, certain foreign corporations doing business in the United States may be subject to the new "branch profits tax" on their effectively-connected earnings and profits ( including tax-exempt interest such as interest on the Bonds) . VMS �- r=t Ira GENERAL CERTIFICATE THE STATE OF TEXAS § COUNTIES OF BRAZORIA § AND HARRIS § CITY OF PEARLAND § I , the undersigned, City Secretary of the City of Pearland, Texas, do hereby make and execute this certificate for the benefit of the Attorney General of the State of Texas and all other persons interested in the $2 , 000 , 000 CITY OF PEARLAND, TEXAS, PUBLIC IMPROVEMENT BONDS, SERIES 1988 , dated May 1 , 1988 , now in process of issuance. I certify the following: 1 . The Home-Rule Charter of the City has not been amended, altered, changed, or repealed since the issuance of the City' s Combination Tax and Revenue Certificates of Obligation, Series 1988 , dated April 1 , 1988 . 2 . That the following persons constitute the City Council of the City: Tom Reid Mayor Stella Roberts Councilmember Richard F. Tetens Councilmember James E. Bost Councilmember Dennis Frauenberger Councilmember William E. Wolff Councilmember 3 . That Kay Krouse is the City Secretary, Ronald J. Wicker is the City Manager, Janet Eastburn is the City Treasurer, Luke L. Daniel is the City Attorney and Barbara Lenamon is the Tax Assessor-Collector of the City. 4 . As to the election held September 15 , 1984 , the City has complied with the Federal Voting Rights Act of 1965 , as amended, and the Texas Election Code, as amended. 5 . That the following is a true, correct and complete statement of the outstanding indebtedness of the City payable from ad valorem taxes : Purpose Date Interest Maturities Amt. Outst. WW & San. 12-1-64 3 . 80% $ 45M 6-1-1988 $ 360 , 000 SS Imp. 3 . 80% 50M 1989/91 Ser. ' 64 3 . 90% 55M 1992/94 WW & San. 6-1-66 4 . 30% 30M 6-1-1988 335 , 000 SS Imp. , 4 . 35% 30M 1989/90 Ser. ' 66 4 . 35% 35M 1991 4 . 40% 35M 1992/93 4 . 40% 40M 1994 4 . 40% 100M 1995 G. O. , 8-1-68 5 . 00% 35M 2-1-89 305 , 000 Ser. ' 68 5 . 10% 40M 1990/91 5 . 25% 40M 1992 5 . 25% 50M 1993/95 G. O. , 6-1-75 6 . 00% 50M 2-1-1989 295 ,000 Ser. ' 75 6 . 10% 55M 1990 6 . 25% 60M 1991 6 . 40% 65M 1992 6 . 50% 65M 1993 C/O, 8-1-77 6 . 25% 35M 8-1-1988 76 , 000 Ser. ' 76-A 6 . 25% 40M 1989 1M 1990 Perm.Imp. , 9-1-78 5 . 00% 125M 3-1-1989/90 1 , 525 , 000 «.. Ser. ' 78 5 . 10% 125M 1991 5. 20% 125M 1992 5 . 25% 125M 1993 5 . 30% 200M 1994 5 . 40% 200M 1995 5 . 50% 250M 1996/97 WW Sys. 9-1-80 6 . 50% 55M 3-1-1989 55 , 000 C/O, Ser. ' 80 WW Sys. 6-1-81 9 . 25% 100M 3-1-1990 400 ,000 C/O, 9 . 40% IOOM 1991 Ser. ' 81 9 . 75% 100M 1992/93 �— pimmn �� �� MIMM Or IM— ��, �� Ref. , 8-15-85 6 . 70% 645M 3-1-1989 10, 700, 000 Ser. ' 85 7 .00% 705M 1990 7 . 25% 770M 1991 7 .50% 830M 1992 7 . 75% 915M 1993 8 . 00% 1 ,095M 1994 8 . 10% 1 , 190M 1995 8 . 25% 1 , 285M 1996 8 . 40% 1 , 280M 1997 8 . 50% 510M 1998 8 . 60% 500M 1999 8 . 70% 490M 2000 8 . 80% 485M 2001 Pub. Imp. , 4-1-86 8 . 50% 75M 3-1-1989/90 4 , 400, 000 Ser. ' 86 8 . 50% 100M 1991 8 . 50% 125M 1992/93 8 . 50% 150M 1994 8 . 50% 175M 1995 8. 50% 300M 1996 6 . 50% 425M 1997 6 . 60% 450M 1998/99 6 . 70% 475M 2000 6 . 75% 475M 2001 6 . 80% 500M 2002 6 . 50% 500M 2003 C/O, 4-1-88 6 . 40% 50M 3-1-1989/93 250 , 000 Ser. ' 88 BONDS IN PROCESS OF ISSUANCE: Pub.Imp. , 5-1-88 50M 3-1-1989 2 , 000 ,000 Ser. ' 88 50M 1990 50M 1991 50M 1992 50M 1993 50M 1994 50M 1995 50M 1996 100M 1997 250M 1998 250M 1999 250M 2000 250M 2001 250M 2002 250M 2003 TOTAL $20 , 701 , 000 WITNESS MY HAND AND THE OFFICIAL SEAL OF THE CITY, this the 11th day of April , 1988 . City Secretary City of Pearland, Texas (SEAL) OFFICIAL BID FORM Mayor and City Council City of Pearland City Hall 3519 Liberty Drive Pearland, Texas 77588 Gentlemen: We have read in detail the Official Notice of Sale and accompanying Preliminary Official Statement of the City of Pearland (the "City"), relating to its S2,000,000 Public Improvement Bonds, Series 1988 (the "Bonds"). We hereby offer to purchase the Bonds, described in your Official Notice of Sale and Preliminary Official Statement, upon the terms and conditions set forth in such Official Notice of Sale, which terms and conditions are incorporated herein by reference for all purposes, for a price of par value thereof, plus accrued interest, to the date the Bonds are delivered to us, plus a cash premium of $ -O— , provided such Bonds bear interest at the following rates: Maturity Interest Rate Maturity Interest Rate 3-1-1989 Q"s° % 3-1-1997 9-Lb 3-1-1990 0• an % 3-1-1998 Lc, O % 3-1-1991 g.Eo % 3-1-1999 i0.90 % 3-1-1992 8 g0 % 3-1-2000 7, 66 % 3-1-1993 g R(� % 3-1-2001 17,/0 % f 3-1-1994 % 3-1-2002 //075— % 3-1-1995 0, bb % 3-1-2003 d7.a5 % 3-1-1996 8, 30 Our calculation (which is not a part of this bid) of the interest cost from the above is: Total Interest Cost From May 1, 1988 b ?CO• Less: Cash Premium S —•D Net Interest Cost S 1i5�, '7Z 0?) Net Effective Interest Rate � a� 5/� % The Initial Bonds shall be registered in the name of Clayton & CO. (syndicate manager). We will advise MTrust Corp, National Association, a national banking association, in Houston, Texas, Corporate Trust Division, the paying agent/registrar (The "Registrar"), of our registration instructions at least five business days prior to the date set for Initial Delivery. We will not ask the Registrar to accept any registration instructions after the five day period. The undersigned agrees to complete, execute, and deliver to the City, by the date of delivery of the Bonds, a certificate relating to the "issue price" of the Bonds in the form accompanying the Official Notice of Sale, with such changes thereto as may be acceptable to the City. We agree to accept delivery of and make payment for the Bonds in immediately available funds at the Corporate Trust Office, MTrust Corp, National Association, a national banking association, in Houston, Texas, not later than 10:00 A.M., Central Daylight Saving Time, on or about May 11 , 1988, or thereafter on the date the Bonds are tendered for delivery, pursuant to the terms set forth in the Notice of Sale and Bidding Instructions. Cashier's Check No. , issued by 1st City National Bank, Austin , Texas, and payable to your order in the amount of S40,000 (is attached hereto) (has been made available to you prior to the opening of this Bid) as a Good Faith Deposit for disposition in accordance with the terms and conditions set forth herein and in the Official Notice of Sale. Should we fail or refuse to make payment for the Bonds in accordance with such terms and conditions, this check shall be cashed and the proceeds retained as complete liquidated damages against us. We hereby represent that sale of the Bonds in states other than Texas will be made only pursuant to exemptions from registration or qualification and where necessary, we will register or qualify the Bonds in accordance with the securities laws of the states in which the Bonds are offered or sold. Respectfully submitted, CLAYTON BROWN&ASSOCIATES.INC. (312 )641-0937 300 W. Washington Chicago, IL 60606 By LL )C- � ,C .0 Authorized Representative Geri Schroeder,A.V.P. ACCEPTANCE CLAUSE The above and foregoing bid is hereby in all things accepte by the City of Pearland this 11th day of April , 1988. ATTEST: L7(.1.!0(7- City Secretary, City of Pearland Mayor, City of Pearland Return of S40,000 Good Faith Deposit is hereby acknowledged: CERTIFICATE FOR ORDINANCE THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § We, the undersigned officers of the City Council of the CITY OF PEARLAND, TEXAS, hereby certify as follows : 1 . That the City Council of the CITY OF PEARLAND, TEXAS, convened in regular session on April 11 , 1988 , at the regular meeting place thereof, within the City and the roll was called of the duly constituted officers and members of the City Council , to-wit: Tom Reid Mayor Stella Roberts Councilmember Richard F. Teter.s Councilmember James E. Bost Councilmember Dennis Frauenberger Councilmember William E. Wolff Councilmember Kay Krouse City Secretary and all of said persons were present, except the following absentee (s) : none thus constituting a quorum. Whereupon, among other business , the following was transacted at said meeting: a written ORDINANCE AUTHORIZING THE ISSUANCE OF $2 , 000 , 000 CITY OF PEARLAND, TEXAS, PUBLIC IMPROVEMENT BONDS, SERIES 1988 ; AND DECLARING THAT A SPECIFIC AND IMMEDIATE PUBLIC EMERGENCY EXISTS IN THAT PROCEEDS OF SALE OF SUCH BONDS ARE REQUIRED AS SOON AS POSSIBLE TO ACCOMPLISH THE BOND PURPOSES FOR PROTECTION OF LIFE, HEALTH, PROPERTY AND THE PUBLIC PEACE WITHIN THE CITY was duly introduced for the consideration of the City Council and read in full. It was then duly moved and seconded that said ordinance be adopted; and, after due discussion, said motion, carrying with it the adoption of the ordinance, prevailed and carried by the following vote : AYES : All members of said City Council shown present above voted "Aye" . NOES : None. ORDINANCE NO. ORDINANCE AUTHORIZING THE ISSUANCE OF $2 , 000, 000 CITY OF PEARLAND, TEXAS, PUBLIC IMPROVEMENT BONDS, SERIES 1988; AND DECLARING THAT A SPECIFIC AND IMMEDIATE PUBLIC EMERGENCY EXISTS IN THAT PROCEEDS OF SALE OF SUCH BONDS ARE REQUIRED AS SOON AS POSSIBLE TO ACCOMPLISH THE BOND PURPOSES FOR PROTECTION OF LIFE, HEALTH, PROPERTY AND THE PUBLIC PEACE WITHIN THE CITY THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § CITY OF PEARLAND § WHEREAS, the bonds hereinafter authorized were duly and favorably voted at an election held in the City on the 15th day of September, 1984; and WHEREAS, said election authorizing the issuance of the bonds was held in conformity with the Constitution and laws of the State of Texas and section 8 .24(a) of the home-rule charter of the City; and WHEREAS, the City Council of the City has and does hereby determine that bonds in the amount of $2 , 000, 000, as a portion and the third installment of the $13 , 500, 000 bonds voted at said election, should now be issued and delivered in order to accomplish the purposes for which they were voted, $9, 500, 000 bonds of said voted authorization having been heretofore issued, sold, and delivered, and the City reserving the right to issue the remainder of the bonds authorized at such election at a later time; Now, Therefore BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: ARTICLE I DEFINITIONS AND INTERPRETATIONS Section 1 . 1 : Definitions. Throughout this ordinance the following terms and expressions as used herein shall have the meanings set forth below: The term "Bond" or "Bonds" shall mean any bond or all bonds, as the case may be, of the Public Improvement Bonds, Series 1988, authorized in this Ordinance, unless the context clearly indicates otherwise. 1 .�.. The term "City" shall mean the City of Pearland, Texas, and, where appropriate, the City Council . The term "Construction Fund" shall mean the construc- tion fund established by the City pursuant to Article VI of this Ordinance. The term "Interest and Sinking Fund" shall mean the interest and sinking fund established by the City pursuant to Section 5 . 1 of this Ordinance. The term "Interest Payment Date" , when used in connec- tion with any Bond, shall mean March 1, 1989, and each September 1 and March 1 thereafter until maturity or earlier redemption of such Bond. The term "Ordinance" as used herein and in the Bonds shall mean this ordinance authorizing the Bonds and all amendments hereof and supplements hereto. The term "Owner" shall mean any person who shall be the registered owner of any outstanding Bonds. The term "Paying Agent" shall mean the Registrar. The term "Record Date" shall mean, for any Interest Payment Date, the 15th calendar date of the month next preceding such Interest Payment Date. The term "Register" shall mean the books of registra- tion kept by the Registrar in which are maintained the names and addresses of and the principal amounts registered to each Owner. The term "Registrar" shall mean MTrust Corp, National Association, Houston, Texas, and its successors in that capacity. Section 1 . 2 : Interpretations. All definitions of terms used herein and all pronouns used in this Ordinance shall be deemed to apply equally to singular and plural and to all genders. The titles and headings of the articles and sections of this Ordinance have been inserted for conve- nience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof. This Ordinance and all the 2 - terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein. ARTICLE II TERMS OF THE BONDS Section 2 . 1 : Amount and Purpose. The Bonds shall be issued in fully registered form, without coupons, in the total authorized aggregate amount of Two Million Dollars ( $2, 000, 000) for the purpose of construction and improvement of the roads, bridges, and streets of the City. Section 2 .2 : Designation, Date, and Interest Payment Date. The Bonds shall be designated as the "CITY OF PEARLAND, TEXAS, PUBLIC IMPROVEMENT BONDS, SERIES 1988" , and shall be dated May 1, 1988. The Bonds shall bear interest from the later of May 1, 1988, or the most recent Interest Payment Date to which interest has been paid or duly pro- vided for, calculated on the basis of a 360-day year of twelve 30-day months, interest payable on March 1, 1989, and semiannually thereafter on September 1 and March 1 of each year until maturity or prior redemption. Section 2 . 3 : Numbers, Denomination, Interest Rates and Maturities . The Bonds shall be issued bearing the numbers, in the principal amounts, and bearing interest at the rates set forth in the following schedule, and may be transferred and exchanged as set out in this Ordinance. The Bonds shall mature, subject to prior redemption in accordance with this Ordinance, on March 1 in each of the years and in the amounts set out in such schedule . Bonds delivered in trans- fer of or in exchange for other Bonds shall be numbered in order of their authentication by the Registrar, shall be in the denomination of $5, 000 or integral multiples thereof, and shall mature on the same date and bear interest at the same rate as the Bond or Bonds in lieu of which they are de- livered. Bond Principal Interest Number Year Amount Rate R- 1 1989 $ 50, 000 8. 80 R- 2 1990 50, 000 8 . 80 R- 3 1991 50, 000 8. 80 R- 4 1992 50, 000 8. 80 3 2 . A true, full and correct copy of the aforesaid ordinance adopted at the meeting described in the above and foregoing paragraph is attached to and follows this certificate; that the ordinance has been duly recorded in the City Council ' s minutes of said meeting; that the above and foregoing paragraph is a true, full and correct excerpt from the City Council ' s minutes of said meeting pertaining to the adoption of the ordinance; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of the City Council as indicated therein; that each of the officers and members of the City Council was duly and sufficiently notified officially and personally, in advance , of the date , hour, place and purpose of the aforesaid meeting, and that the ordinance would he introduced and considered for adoption at said meeting, and each of said officers and members consented, in advance, to the holding of said meeting for such purpose; that said meeting was open to the public as required by law; and that public notice of the date, hour, place and subject of said meeting was given as required by Vernon' s Texas Civil Statutes, Article 6252-17 , as amended. SIGNED AND SEALED this llth day of April, 1988 . c------)044-v 14, City Secretary Mayor (SEAL) R- 5 1993 50, 000 8. 80 R- 6 1994 50, 000 8. 80 R- 7 1995 50, 000 8 . 80 R- 8 1996 50, 000 8. 80 R- 9 1997 100, 000 8.00 R-10 1998 250, 000 6. 80 R-11 1999 250, 000 6. 90 R-12 2000 250, 000 7. 00 R-13 2001 250, 000 7 . 10 R-14 2002 250, 000 7.25 R-15 2003 250, 000 7 .25 Section 2 . 4: Execution of Bonds; Seal . The Bonds shall be signed by the Mayor of the City and countersigned by the City Secretary of the City, by their manual, litho- graphed, or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Bonds shall have the same effect as if each of the Bonds had been signed manually and in person by each of said officers, and such facsimile seal on the Bonds shall have the same effect as if the official seal of the City had been manually impressed upon each of the Bonds. If any officer of the City whose manual or facsimile signature shall appear on the Bonds shall cease to be such officer before the authentication of such Bonds or before the delivery of such Bonds, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in such office. Section 2 . 5 : Authentication. Only such Bonds as shall bear thereon either (i ) the manually executed registration certificate of the Comptroller of Public Accounts of Texas substantially in the form provided in Section 4.2 of this Ordinance or ( ii ) a certificate of authentication, substan- tially in the form provided in Section 4. 3 of this Ordi- nance, manually executed by an authorized officer of the Registrar, shall be entitled to the benefits of this Ordi- nance or shall be valid or obligatory for any purpose. Such duly executed certificate of authentication shall be conclu- sive evidence that the Bond so authenticated was delivered by the Registrar hereunder. Section 2 . 6: Medium and Place of Payment. The Regis- trar is hereby appointed as the Paying Agent for the Bonds. The principal of the Bonds shall be payable, without ex- change or collection charges, in any coin or currency of the United States of America, which, on the date of payment, is 4 legal tender for the payment of debts due the United States of America, upon their presentation and surrender as they become due and payable, whether at maturity or by prior redemption, at the principal corporate trust office of the Registrar. The interest on each Bond shall be payable by check or draft payable on the Interest Payment Date mailed by the 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. Section 2 . 7 : Ownership; Unclaimed Principal and Interest. The City, the Registrar and any other person may treat the person in whose name any Bond is registered as the absolute owner of such Bond for the purpose of making and receiving payment of the principal thereof and for the further purpose of making and receiving payment of the interest thereon, and for all other purposes, whether or not such Bond is overdue, and neither the City nor the Registrar shall be bound by any notice or knowledge to the contrary. All payments made to the person deemed to be the Owner of any Bond in accordance with this Section 2 . 7 shall be valid and effectual and shall discharge the liability of the City and the Registrar upon such Bond to the extent of the sums paid. Amounts held by the Registrar which represent principal of and interest on the Bonds remaining unclaimed by the Owner after the expiration of three years from the date such amounts have become due and payable shall be reported and disposed of by the 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 2 . 8: Registration, Transfer and Exchange. So long as any Bonds remain outstanding, the Registrar shall keep the Register at its principal corporate trust office in which, subject to such reasonable regulations as it may pre- scribe, the Registrar shall provide for the registration and transfer of Bonds in accordance with the terms of this Ordinance. Each Bond shall be transferable only upon the presenta- tion and surrender thereof at the principal corporate trust office of the 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 Registrar. Upon due presentation of any Bond for 5 transfer, the Registrar shall authenticate and deliver in exchange therefor, within 72 hours after such presentation, a new Bond or Bonds, registered in the name of the trans- feree or transferees, in authorized denominations and of the same maturity and aggregate principal amount and bearing interest at the same rate as the Bond or Bonds so presented. All Bonds shall be exchangeable upon presentation and surrender thereof at the principal corporate trust office of the Registrar for a Bond or Bonds of the same maturity and interest rate and in any authorized denomination, in an aggregate principal amount equal to the unpaid principal amount of the Bond or Bonds presented for exchange. The Registrar shall be and is hereby authorized to authenticate and deliver exchange Bonds in accordance with the provisions of this Section 2 . 8. Each Bond delivered in accordance with this Section 2 . 8 shall be entitled to the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such Bond is delivered. The City or the 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 Registrar for such transfer or exchange shall be paid by the City. The Registrar shall not be required to transfer or exchange any Bond during a period beginning at the opening of business fifteen ( 15 ) calendar days prior to the first mailing of a notice of redemption of Bonds and ending at the close of business on the day of such mailing. Section 2 . 9 : Cancellation. All Bonds paid or redeemed in accordance with this Ordinance, and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and delivered in accordance herewith, shall be cancelled and destroyed upon the making of proper records regarding such payment or redemption. The Registrar shall furnish the City with appropriate certificates of destruction of such Bonds . Section 2 . 10 : Replacement Bonds. Upon the presenta- tion and surrender to the Registrar of a mutilated Bond, the Registrar shall authenticate and deliver in exchange there- for a replacement Bond of like maturity, interest rate and principal amount, bearing a number not contemporaneously outstanding. The City or the Registrar may require the 6 Owner of such Bond to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in con- nection therewith and any other expenses connected there- with, including the fees and expenses of the Registrar. If any Bond is lost, apparently destroyed, or wrongfully taken, the City, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall execute and the Registrar shall authenti- cate 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: (a) furnished to the City and the Registrar satisfactory evidence of the ownership of and the circumstances of the loss, destruction or theft of such Bond; (b) furnished such security or indemnity as may be required by the Registrar and the City to save them harmless; (c) paid all expenses and charges in connection therewith, including, but not limited to, printing costs, legal fees, fees of the Registrar and any tax or other governmental charge that may be imposed; and (d) met any other reasonable requirements of the City and the Registrar. If, after the delivery of such replacement Bond, a bona fide purchaser of the original Bond in lieu of which such re- placement Bond was issued presents for payment such original Bond, the City and the Registrar shall be entitled to recover such replacement Bond from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the City or the Registrar in connection therewith. If any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or is about to become due and payable, the City in its discretion may, instead of 7 issuing a replacement Bond, authorize the Registrar to pay such Bond. Each replacement Bond delivered in accordance with this Section 2 . 10 shall be entitled to the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such replacement Bond is delivered. ARTICLE III OPTION OF PRIOR REDEMPTION Section 3 . 1 : Optional Redemption. The City reserves the right, at its option, to redeem prior to maturity the Bonds maturing on or after March 1, 1999, in whole or from time to time in part, on March 1, 1998, or on any Interest Payment Date thereafter at par plus accrued interest on the Bonds called for redemption to the date fixed for redemp- tion. If less than all of the Bonds within a stated maturity are redeemed at any time, the Bonds to be redeemed shall be selected by the City. Section 3 .2 : Partial Redemption. 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 Registrar, in accordance with Section 2 .8 hereof, shall authenticate and deliver in exchange therefor a Bond or Bonds of like maturity and interest rate in an aggregate principal amount equal to the unredeemed portion of the Bond so surrendered. Section 3 . 3 : Notice of Redemption. Notice of any redemption identifying the Bonds to be redeemed in whole or in part shall be given by the Registrar at least thirty days prior to the date fixed for redemption by ( i ) sending written notice by certified mail to the Owner of each Bond to be redeemed in whole or in part at the address shown on the Register and ( ii) publication one time in a financial journal or publication published in the City of New York, New York, or in the City of Austin, Texas. Such notices shall state the redemption date, the amount of accrued interest payable on the redemption date, the place at which Bonds are to be surrendered for payment and, if less than all Bonds outstanding are to be redeemed, the numbers of the Bonds or portions thereof to be redeemed. Any notice given 8 as provided in this Section 3 . 3 shall be conclusively presumed to have been duly given, whether or not the Owner receives such notice. By the date fixed for redemption, due provision shall be made with the Registrar for payment of the redemption price of the Bonds or portions thereof to be redeemed, plus accrued interest to the date fixed for redemption. When Bonds have been called for redemption in whole or in part and due provision has been made to redeem same as herein provided, the Bonds or portions thereof so redeemed shall no longer be 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. ARTICLE IV FORM OF BONDS AND CERTIFICATES Section 4. 1 : Form of Bonds. The Bonds shall be in substantially the following form, with such additions, deletions and variations as may be necessary or desirable and not prohibited by this Ordinance: (Face of Bond) UNITED STATES OF AMERICA STATE OF TEXAS COUNTIES OF BRAZORIA AND HARRIS NUMBER DENOMINATION R- $ REGISTERED REGISTERED CITY OF PEARLAND, TEXAS PUBLIC IMPROVEMENT BOND, SERIES 1988 INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP: May 1, 1988 REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS THE CITY OF PEARLAND, TEXAS (the "City" ) promises to pay to the registered owner identified above, or registered 9 assigns, on the date specified above, upon presentation and surrender of this bond at the principal corporate trust office of MTrust Corp, National Association, HOUSTON, TEXAS (the "Registrar" ) , the principal amount identified above, payable in any coin or currency of the United States of America which on the date of payment of such principal is legal tender for the payment of debts due the United States of America, and to pay interest thereon at the rate shown above, calculated on the basis of a 360-day year of twelve 30-day months, from the later of May 1, 1988, 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 or draft payable on March 1, 1989 and semiannually thereafter on each September 1 and March 1, mailed to the registered owner as shown on the books of registration kept by the Registrar as of the 15th' calendar date of the month next preceding each interest payment date. 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. IN WITNESS WHEREOF, this bond has been signed with the manual or facsimile signature of the Mayor of the City and countersigned with the manual or facsimile signature of the City Secretary of the City, and the official seal of the City has been duly impressed, or placed in facsimile, on this bond. (AUTHENTICATION CERTIFICATE) (SEAL) CITY OF PEARLAND, TEXAS Mayor City Secretary (Back Panel of Bond) THIS BOND is one of a duly authorized series of Bonds, aggregating $2, 000, 000 (the "Bonds" ) , issued for the purpose of construction and improvement of the roads, bridges, and streets of the city, and pursuant to an ordinance adopted by the City Council on April 11, 1988 (the "Ordinance" ) . 10 THE CITY RESERVES THE RIGHT, at its option, to redeem the Bonds maturing on or after March 1, 1999, prior to their scheduled maturities, in whole or from time to time in part, in integral multiples of $5, 000, on March 1, 1998, or on any interest payment date thereafter at par plus accrued inter- est on the principal amounts called for redemption to the date fixed for redemption. Reference is made to the Ordi- nance 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 cer- tified mail, addressed to the registered owners of each Bond to be redeemed in whole or in part at the address shown on the books of registration kept by the Registrar and by publication once in a financial journal or publication published in the City of New York, New York, or in the City of Austin, Texas. 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 redemp- tion. THIS BOND IS TRANSFERABLE only upon presentation and surrender at the principal corporate trust office of the 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 condi- tions of the Ordinance. THE BONDS ARE EXCHANGEABLE at the principal corporate trust office of the Registrar for bonds in the principal amount of $5, 000 or any integral multiple thereof, subject to the terms and conditions of the Ordinance . THE REGISTRAR SHALL NOT BE REQUIRED to transfer or exchange any Bond during a period beginning at the opening of business fifteen ( 15) calendar days prior to the first mailing of a notice of redemption of Bonds and ending at the close of business on the day of such mailing. THIS BOND SHALL NOT BE valid or obligatory for any pur- pose or be entitled to any benefit under the Ordinance unless this Bond either ( i ) is registered by the Comptroller of Public Accounts of the State of Texas by registration 11 •� ,ram .,�. certificate endorsed hereon or (ii ) is authenticated by the Registrar by due execution of the authentication certificate endorsed hereon. IT IS HEREBY CERTIFIED, RECITED AND COVENANTED that this Bond has been duly and validly issued and delivered; that all acts, conditions and things required or proper to be performed, to exist and to be done precedent to or in the issuance and delivery of this Bond have been performed, exist and have been done in accordance with law; and that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Bond, as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in the City within the limits prescribed by the Constitution and laws of the State of Texas, and have been pledged irrevocably for such payment. Section 4. 2 : Registration of Bonds by State Comptroller. Bonds No. R-1 through R-15 shall be registered by the Comptroller of Public Accounts of the State of Texas, as provided by law. The registration certificate of the Comptroller of Public Accounts shall be attached or affixed to Bonds R-1 through R-15 and shall be in substantially the following form: COMPTROLLER' S REGISTRATION CERTIFICATE: REGISTER NO. I HEREBY CERTIFY that this bond has been examined, cer- tified as to validity, and approved by the Attorney General of the State of Texas, and that this bond has been regis- tered by the Comptroller of Public Accounts of the State of Texas. WITNESS MY SIGNATURE AND SEAL this xxxxxxxxxx Comptroller of Public Accounts (SEAL) of the State of Texas Section 4. 3 : Form of Authentication Certificate. The following form of authentication certificate shall be printed on the face of each of the Bonds: 12 Registration Date: AUTHENTICATION CERTIFICATE It is hereby certified that this Bond has been delivered pursuant to the Ordinance described in the text of this Bond, in exchange for or in replacement of a Bond, Bonds or a portion of a Bond or Bonds of a Series which was originally approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. MTrust Corp, National Association Houston, Texas By Authorized Signature . Date of Authentication: Section 4. 4: Form of Assignment. The following form of assignment shall be printed on the back of each of the Bonds: ASSIGNMENT For value received, the undersigned hereby sells, assigns, and transfers unto (Please print or type name, address, and zip code of Transferree) (Please insert Social Security or Taxpayer Identification Number of Transferee) the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer said bond on the books kept for registration thereof, with full power of substitution in the premises. 13 DATED: Signature Guaranteed: Registered Owner NOTICE: The signature above must correspond to the name of the registered owner as shown NOTICE: Signature must be on the face of this bond in guaranteed by a member firm every particular, without any of the New York Stock alteration, enlargement or Exchange or a commercial change whatsoever. bank or trust company. Statement of Insurance Municipal Bond Guaranty Insurance Policy No. (the "Policy" ) with respect to payments due for principal of and interest on this bond has been issued by AMBAC Indemnity Corporation ( "AMBAC Indemnity" ) . The policy has been delivered to the United States Trust Company of New York, New York, New York, as the Insurance Trustee under said Policy and will be held by such Insurance Trustee or any successor insurance trustee . The policy is on file and available for inspection at the principal office of the Insurance Trustee and a copy thereof may be secured from AMBAC Indemnity or the Insurance Trustee. All payments required to be made under the Policy shall be made in accordance with the prvisions thereof. The owner of this bond acknowledges and consents to the subrogation rights of AMBAC Indemnity as more fully set forth in the Policy. Section 4. 5 : Legal Opinion; CUSIP. The approving opinion of Vinson & Elkins, Houston, 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 BONDS Section 5 . 1 : Interest and Sinking Fund; Tax Levy. The proceeds from all taxes levied, assessed and collected for and on account of the Bonds authorized by this Ordinance shall be deposited, as collected, in a special fund to be designated "City of Pearland, Texas, Public Improvement Bonds, Series 1988, Interest and Sinking Fund" . While said 14 Bonds or any part of the principal thereof or interest thereon remain outstanding and unpaid, there is hereby levied and there shall be annually levied, assessed and collected in due time, form and manner within the limits prescribed by law, and at the same time other City taxes are levied, assessed and collected, in each year, beginning with the current year, a continuing direct annual ad valorem tax upon all taxable property in said City sufficient to pay the current interest on said Bonds as the same becomes due, and to provide and maintain a sinking fund adequate to pay the principal of the Bonds as such principal matures but never less than two percent (2%) of the original principal amount of the Bonds each year, full allowance being made for delin- quencies and costs of collection, and said taxes when col- lected shall be applied to the payment of the interest on and principal of said Bonds and to no other purpose. In addition, interest accrued from the date of the Bonds until their delivery, and premium if any, is to be deposited in such fund. Section 5 . 2 : Investment of Interest and Sinking Fund. Money in the Interest and Sinking Fund may, at the option of the City, be invested in time deposits or certificates of deposit secured in the manner required by law for public funds, or be invested in direct obligations of, or obliga- tions the principal of and interest on which are uncondi- tionally guaranteed by, the United States of America, in obligations of any agencies or instrumentalities of the United States of America or as otherwise permitted by state law; provided that all such deposits and investments shall be made in such manner (which may include repurchse agreements for such investments) that money required to be expended from the Interest and Sinking Fund will be available at the proper time or times . All such invest- ments shall be valued in terms of current market value no less frequently than the last business day of the City' s Fiscal Year, except that any direct obligations of the United States of America - State and Local Government Series shall be continuously valued at their par value or principal face amount. Any obligation in which money is so invested shall be kept and held in an official depository of the City, except as hereinafter provided. For purposes of maximizing investment returns, money in such Interest and Sinking Fund may be invested, together with money in the Construction Fund or with other money of the City, in common investments of the kind described above, or in a common pool of such investments which shall be kept and held at an official depository of the City, which shall not be deemed 15 to be or constitute a commingling of such money or Funds provided that safekeeping receipts or certificates of participation clearly evidencing the investment or invest- ment pool in which such money is invested and the share thereof purchased with such money or owned by such Fund are held by or on behalf of each such Fund. If necessary, such investments shall be promptly sold to prevent any default. All interest and income derived from such deposits and investments of the Interest and Sinking Fund shall be credited to the Interest and Sinking Fund. So long as any Bonds remain outstanding, all uninvested moneys on deposit in, or credited to, the Interest and Sinking Fund shall be secured by the pledge of security, as provided by law for cities in the State of Texas . ARTICLE VI CONSTRUCTION FUND Section 6 . 1 : Construction Fund. There is hereby created and established a special fund of the City, to be known as the "City of Pearland, Texas, Public Improvement Bonds, Series 1988, Construction Fund" , which shall be maintained as a separate account on the books of the City. Money on deposit in the Construction Fund shall be used only for the purposes set forth in Section 2 . 1 of this Ordinance, except that interest and income derived from deposit and investment of moneys in the Construction Fund may be utilized as provided below in Section 6 .2 hereof. Section 6.2 : Investment of Money in Construction Fund. Money on deposit in the Construction Fund may, at the option of the City, be invested as permitted by Texas law; provided that all such deposits and investments shall be made in such manner (which may include repurchase agreements for such investments) that the money required to be expended from the Construction Fund will be available at the proper time or times. All such investments shall be valued in terms of current market value no less frequently than the last business day of the City' s Fiscal Year, except that any direct obligations of the United States of America -- State and Local Government Series shall be continuously valued at their par value or principal face amount. Any obliga- tion in which money is so invested shall be kept and held in an official depository of the City, except as herein- after provided. For purposes of maximizing investment 16 • returns, money in the Construction Fund may be invested, together with money in the Interest and Sinking Fund or with other money of the City, in common investments of the kind described above, or in a common pool of such investments which shall be kept and held at an official depository of the City, which shall not be deemed to be or constitute a commingling of such money or Funds provided that safekeeping receipts or certificates of participation clearly evidencing the investment or investment pool in which such money is invested and the share thereof purchased with such money or owned by the Construction Fund are held by or on behalf of the Construction Fund. All interest and income derived from such deposits and investments shall remain in the Construc- tion Fund, except that ( a) to the extent required by law, such interest and income may be applied to make such pay- ments to the United States of America as shall be required to assure that interest on the Bonds is exempt from federal income taxation, and (b) in the discretion of the City, such interest and income may be utilized to pay principal of and interest on the Bonds . ARTICLE VII PROVISIONS CONCERNING SALE AND DISPOSITION OF PROCEEDS OF BONDS Section 7 . 1 : Sale of Bonds. The sale of the Bonds to Clayton Brown & Associates, Inc . (the "Purchaser" ) at the price of par plus accrued interest thereon to date of delivery, plus a cash premium of $-0- , is hereby authorized, approved, ratified and confirmed, subject to the unqualified approving opinion as to the legality of the Bonds of the Attorney General of the State of Texas, and of Vinson & Elkins, Houston, Texas, bond counsel . It is hereby found and declared that the bid of said Purchaser is the best obtained by the City for the Bonds pursuant to and after taking public bids for the sale thereof. Section 7. 2 : Approval, Registration and Delivery. After the Bonds to be initially issued shall have been executed, it shall be the duty of the Mayor of the City to deliver the Bonds to be initially issued and all pertinent records and proceedings to the Attorney General of Texas, for examination and approval by the Attorney General . After the Bonds to be initially issued shall have been approved by the Attorney General, they shall be delivered to the Comp- troller of Public Accounts of the State of Texas for 17 registration. Upon registration of the Bonds to be initial- ly issued, the Comptroller of Public Accounts (or a deputy lawfully designated in writing to act for the Comptroller) shall manually sign the Comptroller' s Registration Certifi- cate prescribed herein to be attached or affixed to the Bonds to be initially issued, and the seal of said Comp- troller shall be impressed, or placed in facsimile, thereon. Section 7 . 3 : Tax Exemption. The City covenants that it shall make such use of the proceeds of the Bonds, regulate investments of proceeds thereof and take such other and further actions as may be required by Sections 103 and 141-150 of the Internal Revenue Code of 1986 (the "Code" ) and all applicable temporary, proposed and final regulations and procedures promulgated thereunder or promulgated under the Internal Revenue Code of 1954, to the extent applicable to the Code ( "Regulations" ) , necessary to assure that interest on the Bonds is excludable from gross income for federal income tax purposes . Without limiting the generality of the foregoing covenant, the City hereby covenants as follows : (a) The City will not use, nor permit to be used, more than 10 percent of the net proceeds of the Bonds in the trade or business of any person (other than use as a member of the general public) other than a governmental unit ( "private-use proceeds" ) . For purposes of this Section, the term "net proceeds" means the proceeds derived from the sale of the Bonds, plus interest earnings thereon, less any amounts deposited in a reasonably required reserve or replacement fund; the term "person" includes any individual, corporation, partnership, unincorpor- ated association or any other entity capable of carrying on a trade or business; and the term "trade or business" means, with respect to any natural person, any activity regularly carried on for profit and, with respect to persons other than natural persons, means any activity other than an activity carried on by a governmental unit; (b) The City will not use, nor permit to be used, more than 5 percent of the net proceeds of the Bonds in the trade or business of any person other than a governmental unit if such use is 18 unrelated to the governmental purpose of the Bonds. Further, the amount of private-use proceeds of the Bonds ( "excess private-use proceeds" ) will not exceed the proceeds of the Bonds expended for the governmental purpose of the Bonds to which such excess private-use proceeds relate; (c) Principal and interest on the Bonds will be paid solely from ad valorem taxes collected by the City. Further, no person using more than 10 percent of the net proceeds of the Bonds in a trade or business, other than a governmental unit, shall make payments (other than as a member of the general public ) , directly or indirectly, accounting for more than 10 percent of such principal and interest; (d) The City will not use, or permit to be used, an amount exceeding the lesser of ( i ) $5, 000, 000 or (ii ) 5 percent of the net proceeds of the Bonds to finance loans to persons other than governmental units, directly or indirectly; (e) Based upon all facts and estimates now known or reasonably expected to be in existence on the date the Bonds are delivered, the City 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; ( f) The City will monitor the yield on the investment of the proceeds of the Bonds and moneys pledged to the repayment of the Bonds and will restrict the yield on such investments to the extent required by the Code or the Regu- lations. Without limiting the generality of the foregoing, the City will take appropriate steps to restrict the yield on all proceeds of the Bonds on hand on a date that is three years from the date of delivery of the Bonds to a yield which is not materially higher than the yield on the Bonds ( in both cases calculated in accordance with the Code and Regulations) ; 19 (g) The City will not cause the Bonds to be treated as "federally guaranteed" obligations for purposes of Section 149(b) of the Code (as may be modified in any applicable rules, rulings, policies, procedures, regulations or other official statements promulgated or proposed by the Department of the Treasury or the Internal Revenue Service with respect to "federally guaranteed" obligations described in Section 149(b) of the Code) ; and (h) The City will take all necessary steps to comply with the requirement that "excess arbitrage profits" earned on the investment of the "gross proceeds" of the Bonds (within the meaning of Section 148( f) (6) (B) of the Code) , if any, be rebated to the federal government. Specifically, the City will ( i ) maintain records regarding the investment of the gross proceeds of the Bonds as may be required to calculate such "excess arbitrage profits" separately from records of amounts on deposit in the funds and accounts of the City allocable to other bond issues of the City or moneys which do not represent gross proceeds of any bonds of the City, ( ii ) calculate, not less often than annually, the amount of "excess arbitrage pro- fits, " if any, earned from the investment of the gross proceeds of the Bonds and ( iii ) pay, not less often than every fifth anniversary date of the delivery of the Bonds, all amounts required to be rebated to the federal government. Further, the City will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the gross proceeds of the Bonds that might result in a "prohibited payment" within the meaning of Temp. Treas. Reg. §1 . 103-15AT. (i ) The City will timely file a statement with the federal government setting forth the informa- tion required pursuant to Section 149 (e) of the Code. 20 All officers, employees and agents of the City are authorized and directed to provide certifications of facts and estimates that are material to the reason- able expectations of the City regarding the foregoing as of the date the Bonds are delivered. In complying with the foregoing covenants, the City may rely from time to time upon an opinion issued by nationally-recognized bond counsel to the effect that any action by the City in reliance upon any interpre- tation 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. Section 7. 4: Qualified Tax-Exempt Obligations . The City hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of section 265(b) of the Code. In connection therewith, the City represents (a) that the aggregate amount of tax-exempt obligations issued by the City during calendar year 1988, including the Bonds, which have been designated as "qualified tax-exempt obligations" under section 265(b) (3 ) of the Code does not exceed $10, 000, 000, and (b) that the reasonably anticipated amount of tax-exempt obligations which will be issued by the City during calendar year 1988, including the Bonds, will not exceed $10, 000, 000 . For purposes of this section 7 . 4, the term "tax-exempt obligation" does not include "private activity bonds" within the meaning of section 141 of the Code, other than "qualified 501(c) (3 ) bonds" within the meaning of section 145 of the Code. In addition, for purposes of this section 7 . 4, the City includes all governmental units which are "subordinate entities" of the City, within the meaning of section 265 (b) of the Code. Section 7 . 5 : Books and Records. So long as any of the Bonds are outstanding the City covenants and agrees that it will keep proper books of record and account in which full, true and correct entries will be made of all dealings, activities and transactions relating to the Bonds and the funds created pursuant to this Ordinance, and all books, documents and vouchers relating thereto shall at all reasonable times be made available for inspection upon request of any Owner. 21 • ARTICLE VIII MISCELLANEOUS Section 8. 1 : Official Statement. The City ratifies and confirms its prior approval of the form and content of the Official Statement prepared for initial offering and sale of the Bonds and hereby approves the form and content of any addenda, supplement, or amendment thereto . The use of such Official Statement in the reoffering of the Bonds by the Purchaser is hereby approved and authorized. The proper officials of the City are hereby authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed therein, dated as of the date of payment for and delivery of the Bonds . Section 8 . 2 : Provisions Concerning Registrar. ( a) The Registrar, by undertaking the performance of the duties of the Registrar and in consideration of the payment of fees and/or deposits of money pursuant to this Ordinance and a Paying Agent/Registrar Agreement, accepts and agrees to abide by the terms of this Ordinance and such Agreement. The City hereby approves the Paying Agent/Registrar Agreement. (b) The City reserves the right to replace the Regis- trar or its successor at any time . If the Registrar is replaced by the City, the new Registrar shall accept the previous Registrar' s records and act in the same capacity as the previous Registrar. Any successor Registrar shall be either a national or state banking institution and a corpo- ration organized and doing business under the laws of the United States of America or any State authorized under such laws to exercise trust powers and subject to supervision or examination by Federal or State authority. Section 8. 3 : Further Procedures. The Mayor, and the City Secretary and other appropriate officials of the City are hereby authorized and directed to do any and all things necessary and/or convenient to carry out the terms and purposes of this Ordinance. Section 8. 4: Severability. If any Section, paragraph, clause or provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such Section, paragraph, clause or 22 provision shall not affect any of the remaining provisions of this Ordinance. Section 8. 5 : Declaration of Emergency; Open Meeting. It is hereby officially found and determined that this Ordinance relates to an immediate public emergency affecting life, health, property and the public peace, and that such emergency and urgent public necessity exist, the specific emergency being that the proceeds from the sale of the Bonds are required as soon as possible so that the City may proceed without unnecessary delay to accomplish the purposes for which the Bonds were voted in order to further protect life, health, property and the public peace within the City; that such emergency and necessity require the adoption of this Ordinance and the holding of the meeting at which this Ordinance is adopted at the time and place held; the meeting at which this Ordinance was adopted was open to the public, and public notice of the time, place and purpose of said meeting was given, all as required by Vernon' s Texas Civil Statutes Article 6252-17, as amended; and that such notice as given is hereby authorized, approved, adopted and ratified. Section 8. 6: Effect of Ordinance. This Ordinance shall be in force and effect from and after its passage, and it is so ordered. Section 8. 7 : Repealer. All orders, resolutions and ordinances, or parts thereof, inconsistent herewith are hereby repealed to the extent of such inconsistency. PASSED AND APPROVED on first and only required reading as an emergency ordinance pursuant to Section 3 . 10 of the City Charter on this llth day of April, 1988 . /s/ Tom Reid Mayor CITY OF PEARLAND, TEXAS ATTEST: /s/ Kay Krouse City Secretary CITY OF PEARLAND, TEXAS ( SEAL) 23 CERTIFICATE OF ASSESSED VALUATION THE STATE OF TEXAS § COUNTIES OF BP.AZORIA § AND HARRIS § CITY OF PEARLAND § I , the undersigned, the duly appointed, qualified and acting Tax Assessor-Collector of the City of Pearland of Brazoria and Harris Counties , Texas (the "City") , do hereby certify that the following is a true and correct statement of the assessed valuation of taxable property in said City as shown by the duly approved tax rolls for the year 1987, which are the last approved tax rolls for said City on file in my office , to-wit: $559, 188 ,980 WITNESS MY HAND AND THE OFFICIAL SEAL OF SAID CITY, this day of April, 1988 . (-, Tax Assessor-Col ector City of Pearland, Texas (SEAL) SIGNATURE IDENTIFICATION AND NO-LITIGATION CERTIFICATE THE STATE OF TEXAS § COUNTIES OF BRAZORIA § AND HARRIS We, the undersigned officers of the City of Pearland, Texas, certify that we officially signed, by our facsimile signatures, on behalf of said City, the following described bonds, hereinafter called the "Bonds" , to-wit: CITY OF PEARLAND, TEXAS, PUBLIC IMPROVEMENT BONDS, SERIES 1988 , dated May 1 , 1988 , aggregating $2 , 000 , 000 , and maturing on March 1 in each of the years 1989 through 2003 , both inclusive, being on the date of such signing and on the date hereof the duly chosen, qualified and acting officers authorized to execute the Bonds, and holding the official titles set forth below opposite such signatures. We further certify that said facsimile signatures have been affixed to the Bonds with our full knowledge and consent, and we hereby respec- tively adopt the same as our own signatures. We further certify that, to our knowledge, no liti- gation of any nature is now pending or threatened, either in the State or Federal courts contesting or attacking the Bonds or restraining or enjoining their issuance, execution or delivery, or restraining or enjoining the levy and/or collection and/or pledge of the funds from which the Bonds are payable, or in any manner questioning the authority or proceedings for the issuance, execution or delivery of the Bonds, or affecting the title of the present officials, and that no proceedings or authority for the issuance, execution or delivery of the Bonds have been repealed, rescinded or revoked. We further certify that the seal which has been im- pressed, or placed in facsimile, upon the Bonds is the legally adopted, proper and only official seal of the issuer of the Bonds . We further certify that no petition or other request has been filed with or presented to any official of the issuer of the Bonds requesting that any of the proceedings ..ram authorizing the Bonds be submitted to a referendum or other election. We further certify that the information and data contained in the General Certificate dated April 11 , 1988 , are still true and correct as of this date . WITNESS OUR HANDS this liAN day of {Mc 1988 . SIGN URES TITLE OF OFFICE Mayor Tom Reid City Secretary Kay Krou The signatures of the above officers are hereby cer- tified to be genuine . Pearland State Bank ( k'L ) Name of Bank Signature f ank Officer Pearland, Texas Cashier City Title of Bank Officer (BANK SEAL) 41111.=M illIMM MINIM MGM =WM iMMIIII M..rm r."'.. + 46 Ey`: !1 2 EW o,I�/i [9i 'rum Ass:' HE ATTORNEY TEXAS JIM VATTOX ATTORNEY GENERAL May 9, 1988 THIS IS TO CERTIFY that the City of Pearland, Texas (the "Issuer") , has submitted to me City of Pearland, Texas, Public Improvement Bonds, Series 1988 (the "Bonds") , in the aggregate principal amount of $2 , 000, 000 for approval. The Bonds are dated May 1, 1988, numbered R-1 through R-15, in various denominations, and were authorized by an Ordinance of the Issuer passed on April 11, 1988 . I have examined the law and such certified proceedings and other papers as I deem necessary to render this opinion. As to questions of fact material to my opinion, I have relied upon representations of the Issuer contained in the certified proceedings and other certifications of public officials furnished to me without undertaking to verify the same by independent investi- gation. I express no opinion relating to any Official Statement or other offering material relating to the Bonds. Based on my examination, I am of the opinion, as of the date hereof and under existing law, as follows: (1) The Bonds have been issued in accordance with law and are valid and binding obligations of the Issuer. (2) The Bonds are payable from the proceeds of an annual ad valorem tax levied, within the limits prescribed by law, upon all taxable property within the Issuer. Therefore, the Bonds are approved. ;:]]L Gi5/.), _ 7ei Attor General of the State of Texas No. 22374 Book No. 83 nlb 512/-103.2100 SUPREME COURT RIF'ILIIING AUSTIN, TEXAS 7S711-123,1S OFFICE OF COMPTROLLER OF THE STATE OF TEXAS I, Bob Bullock, Comptroller of Public Accounts of the State of Texas, do hereby certify that the attachment is a true and correct copy of the opinion of the Attorney City of Pearland Texas , Public Improvement Bonds , General approving the Series 1988 R-1/R-15 of the denomination of numbered S various dated May 1 19 311_, as authorized by issuer, interest various percent, under and by authority of which said bonds were registered 9th day of May 19 88 as the same appears of in this office, on the 89 294 Bond Register of the Comptroller's Office, Vol. record on page 50614 Register Number Given under my hand and seal of office, at Austin, Texas, the 9th May 19 83 day of a a BOB BULLOCK Comptroller of Public Accounts State of Texas tr=73-116 Vsig7s(Rsv. 9•65/4) PAYING AGENT/REGISTRAR AGREEMENT entered into as of (this "Agreement"), by and between MTrust Corp, National Association, organized and existing under the laws of the United States of America ("MTrust") and the City of Pearland, a political subdivision of the State of Texas located within Brazoria and Harris Counties organized and existing under the Constitution and laws of the State of Texas (the "Issuer"). RECITALS WHEREAS, the Issuer has duly authorized and provided for the issuance of its securities to be issued only in registered form, as to the payment of principal and interest thereon in an aggregate principal amount of $2,000,000 and titled City of Pearland, Texas, Public Improvement Bonds, Series 1988 (the 'Securities"); and WHEREAS, the Issuer has selected MTrust to serve as Paying Agent/Registrar in connection with the payment of the principal of, premium, if any, and interest on said Securities and with respect to the registration, transfer and exchange thereof by the registered owners thereof; and WHEREAS, MTrust has agreed to serve in such capacities for and on behalf of the Issuer and has full power and authority to perform and serve as Paying Agent/Registrar for the Securities; NOW, THEREFORE, it is mutually agreed as follows: ARTICLE ONE APPOINTMENT OF MTRUST AS PAYING AGENT AND REGISTRAR Section 1.01 Appointment. The Issuer hereby appoints MTrust to serve as Paying Agent with respect to the Securities, to pay to the registered owner of the Securities the principal, premium (if any) and interest on the Securities as the same become due and payable to the registered owners thereof; all in accordance with this Agreement and the Security Resolution (hereinafter defined). The Issuer hereby appoints MTrust as Registrar with respect to the Securities and, as Registrar for the Securities, MTrust shall keep and maintain for and on behalf of the Issuer, books and records as to the ownership of said Securities and with respect to the transfer and exchange of said Securities as provided herein and in the Security Resolution. MTrust hereby accepts its appointment and agrees to serve as the Paying Agent and Registrar for the Securities. Section 1.02 Compensation. As compensation for MTrust's services as Paying Agent/Registrar, the Issuer hereby agrees to pay MTrust the fees and amounts set forth in Annex A attached hereto for the remainder of the Fiscal Year during which this Agreement is executed and thereafter the fees and amounts set forth in MTrust's current fee schedule then in effect for services as Paying Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close of the Fiscal year of the Issuer, and shall be effective upon the first day of the following Fiscal Year. s-- In addition, the Issuer agrees to reimburse MTrust upon its request for all reasonable expenses, disbursements and advances (including the reasonable compensation and expenses and disbursements of its agents and counsel) incurred or made by MTrust pursuant to or as a result of, any of the provisions hereof. ARTICLE TWO DEFINITIONS Section 2.01 Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: "Acceleration Date" on any Security means the date on and after which the principal or any or all installments of interest, or both, are due and payable on any Security which has become accelerated pursuant to the terms of the Security. "MTrust Office" means the corporate trust office of MTrust as indicated on page 10. MTrust will notify the Issuer in writing of any change in location of MTrust Office. "Security Resolution" means the resolution, order or ordinance of the governing body of the Issuer pursuant to which the Securities are issued certified by the secretary or any other officer of the Issuer and delivered to MTrust. "Fiscal Year" means the fiscal year of the Issuer ending September 31. "Holder" and "Security Holder" each means a Person in whose name a Security is registered in the Security Register. "Issuer Request" and "Issuer Order" means a written request or order signed in the name of the Issuer by an officer of the governing body of the Issuer or such other person named, or appointed by virtue of holding a particular position with the Issuer, in the Security Resolution as authorized to sign, and delivered to MTrust. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of a government. "Predecessor Securities" of any particular Security means every previous Security evidencing all or a portion of the same obligation as that evidenced by such particular Security (and, for the purposes of this definition, any Security registered and delivered under Section 4.06 in lieu of a mutilated, lost, destroyed or stolen Security shall be deemed to evidence the same obligation as the mutilated, lost, destroyed or stolen Security. "Redemption Date" when used with respect to any Security to be redeemed means the date fixed for such redemption pursuant to the terms of the Security Resolution. "Responsible Officer" when used with respect to MTrust means the Chairman or Vice-Chairman of the Board of Directors, the Chairman or Vice-Chairman of the Executive Committee of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of MTrust customarily performing functions similar to those performed by any of the -2- above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Security Register" means the books and records to be maintained by MTrust on behalf of the Issuer relating to the registration, transfer, exchange, and payment of the Securities. "Stated Maturity" means the date specified in the Security Resolution as the fixed date on which the principal of the Security is scheduled to be due and payable. Section 2.02. Other Definitions. The terms "MTrust," "Issuer" and "Security" have the meanings assigned to them in the recital paragraphs of this Agreement. The term "Paying Agent/Registrar" refers to MTrust when it is performing the functions associated with such terms in this Agreement. Section 2.03. Construction of Terms. If appropriate in the context of this Agreement, words of the singular number shall be considered to include the plural, words of the plural shall be considered to include the singular, and words of the masculine, feminine, or neuter gender shall be considered to include the other genders. ARTICLE THREE PAYING AGENT Section 3.01. Duties of Paving Agent. As Paying Agent, MTrust shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of each Security at its Stated Maturity, Redemption Date, or Acceleration Date to the holder upon surrender of the Security certificate to MTrust at the MTrust Office. As Paying Agent, MTrust shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each Security when due. MTrust shall compute the amount of interest to be paid each Holder, and shall prepare and send a check in such amount by United States mail (first class postage prepaid) on or prior to each interest payment date, to the Holder of each Security (or Predecessor Securities) whose name appears in the Security Register on the record date. Such checks shall be mailed in such manner to such Holder the address for each such Holder appearing on the Security Register, or shall be transmitted to such Holder on each interest payment date by such other method acceptable to MTrust, requested in writing by, and at the risk and expense of, the Holder. Section 3.03 Payment Dates. The Issuer hereby instructs MTrust to pay the principal of and interest on the Securities at the dates specified in the Security Resolution. -3- ARTICLE FOUR REGISTRAR Section 4.01 Transfer and Exchange. MTrust agrees to keep and maintain for and on behalf of the Issuer at the MTrust Office, books and records (herein sometimes referred to as the "Security Register") for recording the names and addresses of the Holders of the Securities, the transfer, exchange and replacement of the Securities and the payment of the principal of and interest on the Securities to the Holders and containing such other information as may be reasonably required by the Issuer and subject to such reasonable regulations as the Issuer and MTrust may prescribe. All transfers, exchanges and replacement of Securities shall be noted in the Security Register. Every Security certificate surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument or transfer, the signature on which has been guaranteed by an officer of a federal or state bank or a member of the National Association of Securities Dealers, in form satisfactory to MTrust, duly executed by the Holder or his attorney duly authorized in writing. As a condition to effecting a re-registration, transfer or exchange of the Securities, the Registrar may request any supporting documentation it feels necessary to effect a re- registration, transfer or exchange of the Securities. To the extent possible and under reasonable circumstances, MTrust agrees that, in relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof will be completed and new Securities delivered to the Holder or the assignee of the Holder in not more than three (3) business days after the receipt of the Securities to be cancelled in an exchange or transfer and the written instrument of transfer or request for exchange duly executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the Paying Agent/Registrar. Section 4.02. Certificates. The Issuer shall provide the Registrar with an adequate inventory of Securities certificates to facilitate transfers. MTrust covenants that it will maintain the Securities certificates in safekeeping and will use reasonable care in maintaining such Securities certificates in safekeeping, which shall be not less than the level of care it maintains for debt securities of other governments or corporations for which it serves as registrar, or which it maintains for its own securities. Section 4.03. Form of Security Register. MTrust as Registrar will maintain the records of the Security Register in accordance with MTrust's general practices and procedures in effect from time to time. MTrust shall not be obligated to maintain such Register in any form other than those which MTrust has currently available and currently utilizes at the time. The Security Register may be maintained in written form or in any other form capable of being converted into written form within a reasonable time. -4- _ +mom _ - ate.= Amm+ d. r - im...- a+a r �.�► �.�. ter.. Section 4.04 List of Security Holders. MTrust will provide the Issuer at any time requested by the Issuer, upon payment of the required fee, a copy of the information contained in the Security Register. The Issuer may also inspect the information in the Security Register at any time MTrust is customarily open for business, provided that reasonable time is allowed MTrust to provide an up-to-date listing or to convert the information into written form. MTrust will not release or disclose the content of the Security Register to any Person other than to, or at the written request of, an authorized officer or employee of the Issuer as specified in an Issuer Order, except upon receipt of a subpoena or court order. Upon receipt of a subpoena or court order MTrust will notify the Issuer so that the Issuer may contest the subpoena or court order. Section 4.05 Return of Cancelled Certificates. MTrust will, at such reasonable intervals as it determines, surrender to the Issuer those Securities certificates in lieu of which or in exchange for which other Securities certificates have been issued, or which have been paid. Section 4.06 Mutilated, Destroyed, Lost, or Stolen Securities Certificates. The Issuer hereby instructs MTrust to deliver and issue Securities certificates in exchange for or in lieu of mutilated, destroyed, lost or stolen Securities certificates as long as the same does not result in an overissuance. MTrust will issue and deliver a new Security certificate in exchange for a mutilated Security certificate surrendered to it. MTrust will issue a new Security certificate in lieu of a Security certificate for which it received written representation from the Holder that the certificate representing such Security is destroyed, lost, or stolen; without the surrender or production of the original certificate. MTrust will pay on behalf of the Issuer the unpaid principal and premium, if any, of a Security at the Stated Maturity or on the Redemption Date or Acceleration Date, for which it receives written representation that the certificate representing such Security is destroyed, lost or stolen without the surrender or production of the original certificate. MTrust will not issue a replacement Security certificate or pay such replacement Security certificate unless there is delivered to MTrust such security or indemnity as it may require (which may be by MTrust's blanket bond) to save both MTrust and the Issuer harmless. On satisfaction of MTrust and the Issuer that a Security certificate has been mutilated, destroyed, lost, or stolen, the certificate number on the mutilated, destroyed, lost, or stolen Security certificate will be cancelled with a notation that it has been mutilated, destroyed, lost or stolen and a new Security certificate will be issued of the same series and of like tenor and principal amount bearing a number (according to the Security Register) not contemporaneously outstanding. MTrust may charge the Holder MTrust's fees and expense in connection with issuing a new Security certificate in lieu of or exchange for a mutilated, destroyed, lost or stolen Security certificate. -5- The Issuer hereby accents MTrncoc t ,_ , - r - ANN The Issuer hereby accepts MTrust's current blanket bond for lost, stolen, or destroyed certificates and any future substitute blanket bond for lost, stolen, or destroyed certificates that MTrust may arrange, and agrees that the coverage under any such blanket bond is acceptable to it and meets the Issuer's requirements as to security or indemnity. MTrust need not notify the Issuer of any changes in the security or other company giving such bond or the terms of any such bond. An any time MTrust is customarily open for business, the blanket bond then utilized for the purpose of lost, stolen or destroyed certificates by MTrust shall be available for inspection by the Issuer on request. Section 4.07 Transaction Information to Issuer. MTrust will, within a reasonable time after receipt of an Issuer Request; furnish the Issuer information as to the Securities it has paid pursuant to 3.01, Security certificate it has delivered upon the transfer or exchange of any Security certificates pursuant to Section 4.01 and Security certificates it has delivered in exchange for or in lieu of mutilated, destroyed, lost or stolen Security certificates pursuant to Section 4.06. ARTICLE FIVE MTR UST Section 5.01 Duties of MTrust MTrust undertakes to perform the duties set forth herein and agrees to use reasonable care in the performance thereof. Section 5.02 Reliance on Documents, Etc. (a) MTrust may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions furnished to MTrust by the Issuer. (b) MTrust shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved in a court of competent jurisdiction that MTrust was negligent in ascertaining the pertinent facts. (c) No provision of this Agreement shall require IvITrust to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risk or liability is not assured to it. (d) MTrust may rely and shall be protected by the Issuer against any claim by the Issuer or any other Person in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, ordcr, bond, note, security, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Without limiting the generality of the foregoing statement, MTrust need not examine the ownership of any Securities, but is protected in acting upon receipt of a Security certificate containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Holder or an agent of the Holder. MTrust shall not be bound to make any investigation into the facts or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security or other paper or document supplied by Issuer. -6- ,^- ram" (e) MTrust may consult with legal counsel, and the written advice of such counsel or any opinion of counsel shall be full and complete authorization and protection with respect to any action taken, suffered or omitted by it hereunder in good faith and in reliance therein; provided that any such written advice or opinion is supplied to the Issuer by MTrust. (f) MTrust may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys of MTrust. Section 5.03 Recitals of Issuer. The recitals contained herein other than any recital relating to the power and authority of MTrust under this Agreement and in the Securities shall be taken as the statements of the Issuer, and MTrust assumes no responsibility for their correctness. MTrust shall in no event be liable to the Issuer, any Holder or Holders of any Security or any other Person for any amount due on any Security from its own funds. Section 5.04 May Hold Securities. MTrust, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the same rights it would have if it were not the Paying Agent/Registrar, or any other agent; provided that such dealings do not result in a breach of any duties or agreements imposed by this Agreement. Section 5.05 Moneys Held by MTrust. Funds held by MTrust hereunder need not be segregated from any other funds provided appropriate accounts are maintained in the name and for the benefit of the Issuer. MTrust shall be under no liability for interest on any money received by it hereunder. Any money deposited with MTrust for the payment of the principal, premium (if any) or interest on any Security and remaining unclaimed for three years after the Security has become due and payable at the stated maturity will be reported and turned over to the State of Texas pursuant to Senate Bill 581, Title 6, Chapter 72, Abandonment of Personal Property. Section 5.06. Interpleader. The Issuer and MTrust agree that MTrust may seek adjudication of any adverse claim, demand or controversy over its person as well as funds on deposit, in any Federal or State District Court located in the State and County where either the MTrust Office or the Administrative Office of the Issuer is located, and agree that service of process by certified or registered mail, return receipt requested, to the address referred to in section 6.03 of this Agreement shall constitute adequate service. The Issuer and MTrust further agree that MTrust has the right to file a Bill of Interpleader in any court of competent jurisdiction to determine the rights of any Person claiming any interest herein. Section 5.07 Depository Services. It is hereby represented and warranted that, in the event the Securities are otherwise qualified and accepted for Depository Trust Company or equivalent depository trust service by other organizations, MTrust has the capability and, to the extent within -7- within its control, will comply with the operational arrangements, which establishes requirements for securities to be eligible for such typed depository trust services, including but not limited to, requirements for the timeliness of payments and funds availability, transferred turnaround time, and notification of redemptions and calls. ARTICLE SIX MISCELLANEOUS PROVISIONS Section 6.01 Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereto. Section 6.02 Assignment. This Agreement may not be assigned by either party without the prior written consent of the other. Section 6.03 Notices. Any request, demand, authorization, direction, notice, consent, waiver or other document provided or permitted hereby to be given or furnished to the Issuer or MTrust shall be mailed or delivered to the Issuer of MTrust, respectively, at the address shown on page 11. Section 6.04 Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. Section 6.05 Successors and Assigns. All covenants and agreements herein by the Issuer and MTrust shall bind their respective successors and assigns, whether so expressed or not. Section 6.06. Severability. In case any provision herein shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be effected or impaired thereby. Section 6.07 Benefits of Agreement. Nothing herein, expressed or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy or claim hereunder. Section 6.08 Entire Agreement. This Agreement and the Security Resolution constitute the entire agreement between the parties hereto relative to MTrust acting as Paying Agent/Registrar and if any conflict exists between this Agreement and the Security Resolution, the Security Resolution shall govern. (8) Section 6.09 Counterparts. This Agreement may be executed in any number of counterparts, each which shall be deemed an original and all of which shall constitute one and the same Agreement. Section 6.10 Termination. This Agreement will terminate (i) on the date of final payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be earlier terminated by either party upon sixty (60) days written notice; provided, however, an early termination of this Agreement by either party shall not be effective until (a) a successor Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and (b) notice given to the Holders of the Securities of the appointment of a successor Paying/Agent/Registrar. Furthermore, MTrust and Issuer mutually agree that the effective date of an early termination of this Agreement shall not occur at any time which would disrupt, delay or otherwise adversely affect the payment of the Securities. Upon an early termination of this Agreement, MTrust agrees to promptly transfer and deliver the Security Register (or a copy therefore), together with other pertinent books and records relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by the Issuer. The provisions of Section 1.02 and of Article Five shall survive, and remain in full force and effect following the termination of this Agreement. Section 6.11 Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. CITY OF P ARLAND By: .243 Title: Mayor, City of Pearland, Texas [SEAL] Attest: Address: City of Pearland 3519 Liberty Pearland, Texas 77581 Title: City Secretary (9) MTRUST CORP, NATIONAL ASSOCIATION BY: -7),: • � `- —tJ Assistant Vice Presi4nt [SEAL] Attest: Mailing Address: MTrustCorp, National Association Debt Administration Division Title: Vice President PO Box 3285 Houston, Texas 77253 Delivery Address: MTrust Corp, National Association Debt Administration Division 333 Clay, 3 Allen Center 5th Floor Houston, Texas 77002 (10) fin ANNEX A CORPORATE SERVICES PAYING AGENT/REGISTRAR FEES FOR BOND ISSUES $2,000,000 OR LESS We offer comprehensive Paying Agent/Registrar services for Municipalities issuing tax exempt debt securities. Through our commitment to excellence and controlled growth philosophy, we can assure you a consistently high level of service and responsiveness. CLOSING AND ACCOUNT SET-UP CERTIFICATE ISSUANCE We review the documents, work closely with the Issuer, Financial We provide for the safekeeping of blank and cancelled certificates, Advisor, Underwriter, Bond Counsel, and Bond Printer to establish cancellation and reregistration of certificates on a timely basis, the necessary records and to achieve the proper distribution at immediate updating of records, legal transfers. and the replace- closing. In addition, we provide facilities for closing and the ment of lost,stolen,and mutilated certificates. transfer of funds if requested. Closing(one-time fee) $300.00 Certificate Issuance Fee is included in Account Maintenance Includes Initial Certificate Issuance ACCOUNT MAINTENANCE REDEMPTIONS We maintain all Issuer and Bondholder records (which include We provide for the receipt and cancellation of certificates on the name, address, tax identification, account types, and certificate matured or called bonds, timely issuance of checks and updating detail). In addition, we provide timely notices of payment, timely of records,and response to Issuer and Bondholder inquiries. updating of Bondholder records, issuance of semiannual interest payments, response to all Issuer and Bondholder inquiries, and Cancellation of Certificates and Checks Issued are included in appropriate tax reporting. Account Maintenance Semiannual Charge ADDITIONAL SERVICES Base Fee(includes the first 30 Accounts) 250.00 Fees are based upon time and project responsibility. Bond Calls 1. Lottery(selection of Bonds to be called) 2. Publication of call 3. Mailing of Call Notices to Bondholders ADDITIONAL SERVICES(Continued) MISCELLANEOUS Bondholder List Special Services Printing of names,each $ .03 Services not anticipated at the time of issuance, but deemed Minimum printing fee $100.00 necessary or desirable by the customer will be subject to additional charges based upon the services performed and responsibilities assumed. Gummed Labels Out-of-Pocket Expenses Label preparation,each $ .05 The costs for professional services (such as attorneys and Minimum preparation fee $100.00 accountants), postage, courier services, insurance, stationery, telephone,travel to closing,etc.will be billed at cost. Transfer Sheets Billing Period Semiannual $200.00 Fees and expenses will be billed semiannually and will be included on the statement requesting funds for interest and principal payment. List and labels can be requested in various formats such as: By State By Zip Code By Size By Type(Individuals,Brokers,Nominees,etc.) By Maturity of any of the above ACCEPTED: IL MTrust A Momentum Company DATE: Austin/San Antonio Dallas Fort Worth Houston P.O.Box 2266 P.O.Box 655415 P.O.Box 910 P.O.Box 3285 Austin,TX 78780 Dallas,TX 75265 Fort Worth,TX 76101 Houston,TX 77253 (512)479-5132 (214)698-6987 (817)334-9310 (713)751-7237 Effective 1/1/87 AMBAC Indemnity Corporation c o CT Coroorsuon Systems Municipal Bond Guaranty Insurance Policy 222`zest VGashingrot.avenue vLidison.'Eisconstn 53-03 .admmtstrauce Office: Ore State Street Plaza New York.New viork 10004 E`.feetive°ate' May 11, 1988 Policy'No.. 2721BE • A%113AC Indemnity C:,rpontion .AMBAC).in consideration of the payment of the premium and sublet/to the terms of this puitx nerebv uno mdiuonally and ire:xabiy guarantees to arw owner or holder.as hereinafter defined of the following described obligations.the till and .omplere payment required to he made by or on behalf of the Issuer CO: MCRIJST CORP, NATIONAL ASSOCIATION, HOUSTO , TEXAS or its successor i the Paving Agent'1 of an amount equal to t i)the principal of(either at the stated maturity or by any advancement of maturity pursuant to a mandatory sinking fund payment)and interest on.the Obligations a as that term is defined below i as such payments 'nail 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 optionaLredemption or acceleration resulting from default or ochemise.other than any advancement of maturity pursuant to a mandatory sinking hind 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 t n)the reimbursement of any such payment which is subsequently recovered from any owner or holder pursuant to a final judgment by a court of competent jurisdiction chat such payment _„rstitutes an avoidable preference to such owner or holder within the meaning of any applicable bankruptcy law.The amounts reterred to:n clauses i i)and Oil the preceding sentence shall be referred to herein collectively as the"Insured Amounts:'"Obligations'shail mean: $2,000,000 City of Pearland, Texas, Public Izt>Arovenent Bonds, Series 1988, dated ray 1, 1988 and maturing on Mfarch 1 in the years 1989 through 2003, both inclusive. • • 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 AMBAC or its designee from the Paying Agent or any owner or holder of an Obligation or coupon thereof the payment of an Insured Amount for wtuch is then due,that suit required payment has not been made. AMBAC,on the due date of such payment on within one business day after receipt of notice of such nonpayment.whichever is later.will make a deposit of funds.in an accourrwith United States Trust Company of New York in New York New York or as successor,sufficient for the • payment of any such Insured Amounts which are then due.Upon presentment and surrender of such Obligations or coupons or presentment of such other proof of ownership of the Obligations.together with any appropriate instruments of assignment to evidence the assignment of the Insured Amounts due on the Obligations as are paid by AMBAC,and appropriate insuuttients to effect the appointment of AMBAC as agent for such owners or holders of the Obligations or coupons in any legal proceeding related to payment of Insured Amounts on the Obligations or coupons.such instruments being in form satisfactory to United States Trust Company of New York United States Trust Company of New York shall disburse to such owners,holden or the Paving Agent payment of the Insured Amounts due on such Obligations and coupons.less any amount held by the Paying Agent for the payment of such Insured Amounts and legally available therefore.This policy does not insure against loss of amcprepayment premium which may at any time be payable with respect to any Obligation or coupon. As used herein,the term"owner"shall mean the registered owner of any Obligation as indicated in the books maintained by the Paving Agent,the Issuer or any designee of the Issuer for such purpose and the tern"holder"shall mean the bearer of any Obligation not registered as to principal or as to pnnapai and interest lot such purpose and,when used with reference to a coupon.shall mean the bearer of the coupon.The terms owner or holder shall not include the Issuer or any pain whose agreement with the Issuer constitutes the underlying secunty for the Obligations. Any service of process on AMBAC may be made to AMBAC or an agent designated for such purpose and such service of process shall be valid and binding as to AMBAC.ANBACs offices are located at One State Street Plaza.New York New York 1000a. This policy is non-cancellable for any reason.The premium on this policy is nor refundable for any reason including the payment prior to maturity of the Obligations. LN WITNESS WHEREOF,AMBAC has caused this policy to be executed by its duly authorized officers in facsimile. .AMBAC Indemnity Corporation •�N�irr j+°..anion;•..!'`!+ ad Representative S. ` 11 .ram' Jr4 > 41 • President Secretary 7lfi • AMSAC Irsda,rrety Ca.soration 250 East Kiipoum Avenue P 0 Boa 4.86, Miiwauaae. Wisconsin 5321r Admrnimattve Office — MunKRlal Bond Insurance One State Street Flail.New York,New York 10034 COMPLAINT NOTICE: Should any dispute arise about Your premium or about a claim that you have filed,write to the company that ne Policy !f the problem is not resole uee ed.you may also write to the State Board of Insurance.Department C.1110 San lac, Austin, Texas 78766. This notice of complaint procedure Is for information only and does not become a parr or cpnc, of this Policy. Fem.a2180ttt MU) AMBAC Indemnity Corp()ration One State Street Plaza New York, New York 10110 0-i Telephone: (212) 668-0340 May 11 , 1988 City of Pearland Clayton Brown & Associates, City Hall Inc. 3519 Liberty Drive 300 W. Washington Awc© Pearland, TX 77581 Chicago, IL 60606 Vinson & Elkins 3300 First City Tower 1001 Fannin Houston, TX 77002 Gentlemen: This opinion has been requested of the undersigned , an Assistant General Counsel and a Vice President of AMBAC Indemnity Corporation, a Wisconsin stock insurance company ( "AMBAC Indemnity" ) , in connection with the issuance by AMBAC Indemnity of a certain Municipal Bond Guaranty Insurance Policy , effective as of the date hereof ( the "Policy" ) , insuring $2 ,000, 000 in aggregate principal amount of the City of Pearland, Texas, Public Improvement Bonds , Series 1988, dated May 1 , 1988 ( the "Bonds" ) . In connection with my opinion herein, I have examined the Policy, such statutes, documents and proceedings as I have considered necessary or appropriate in the circumstances to render the following opinion, including, without limiting the generality of the foregoing, certain statements contained in the Official Statement of the Issuer dated April 11 , 1988 , relating to the Bonds ( the "Official Statement" ) under the headings "MUNICIPAL BOND INSURANCE" and "APPENDIX C - FORM OF MUNICIPAL BOND GUARANTY INSURANCE POLICY" . Based upon the foregoing and having regard to legal considerations I deem relevant, I am of the opinion that: 1 . AMBAC Indemnity is a stock insurance company duly organized and validly existing under the laws of the State of Wisconsin and duly qualified to conduct an insurance business in the State of Texas. 2 . AMBAC Indemnity has full corporate power and authority to execute and deliver the Policy and the Policy has been duly authorized, executed and delivered by AMBAC Indemnity and constitutes a legal , valid and binding obligation of AMBAC Indemnity enforceable in accordance with its terms except to the extent that the enforceability (but not the validity) of such obligation may be limited by any applicable bankruptcy , insolvency, liquidation, rehabilitation or other similar law or enactment now or hereafter enacted affecting the enforcement of creditors ' rights. 3 . The execution and delivery by AMBAC Indemnity of the Policy will not, and the consummation of the transactions contemplated thereby and the satisfaction of the terms thereof will not, conflict with or result in a breach of any of the terms, conditions or provisions of the Certificate of Incorporation or By-Laws of AMBAC Indemnity, or any restriction contained in any , contract , agreement or instrument to which AMBAC Indemnity is a party or by which it is bound or constitute a default under any of the foregoing. 4 . Proceedings legally required for the issuance of the Policy have been taken by AMBAC Indemnity and licenses , orders, consents or other authorizations or approvals of any governmental boards or bodies legally required for the enforceability of the Policy have been obtained ; any proceedings not taken and any licenses, authorizations or approvals not obtained are not material to the enforceability of the Policy. 5. The statements contained in the Official Statement under the heading "MUNICIPAL BOND INSURANCE , " insofar as such statements constitute summaries of the matters referred to therein, accurately reflect and fairly present the information purported to be shown and , insofar as such statements describe AMBAC Indemnity , fairly and accurately describe AMBAC Indemnity. 6. The form of Policy contained in the Official Statement under the heading "APPENDIX C - FORM OF MUNICIPAL BOND GUARANTY INSURANCE POLICY" is a true and complete copy of the form of Policy. Very truly yours , J ep V. Sa ano Vice President and Assistant General Counsel JVS/mb OFFICIAL STATEMENT CERTIFICATE We, the undersigned officers of the CITY OF PEARLAND, TEXAS (the "City") , acting solely in our respective official capacities , hereby certify with respect to that issue of "City of Pearland, Texas, Public Improvement Bonds, Series 1988 , " in the principal amount of $2 , 000 , 000 (the "Bonds") , as follows: That to the best of our knowledge and belief: (a) the descriptions and statements of or pertain- ing to the City contained in its Official Statement, and any addenda, supplement or amendment with respect to such descriptions or statements thereto, on the date of such Official Statement, on the date of sale of said Bonds and the acceptance of the best bid therefor, and on the date of deliv- ery, were and are true and correct in all material respects; (b) insofar as the City and its affairs , in- cluding its financial affairs , are concerned, such Official Statement did not and does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (c) insofar as the descriptions and statements, including financial data, of or pertaining to entities other than the City, and their activities, contained in such Official State- ment are concerned, such statements and data have been obtained from sources which the City believes to be reliable and that the City has no reason to believe that they are untrue in any material respect; and (d) there has been no material adverse change in the financial condition of the City since the date of the last audited financial statements of the City. EXECUTED on Mal i ) riff u , the date of payment for and the delivery of the /Bonds. CITY OF PEARLAND, TEXAS By: �Uyrt { C Mayor City ecretary (SEAL) Immo NO-ARBITRAGE CERTIFICATE I, the undersigned officer of the City of Pearland, Texas (the "City") , make this certification for the benefit of all persons interested in the exclusion from gross income for federal income tax purposes of the interest to be paid on the City' s $2 ,000 ,000 City of Pearland, Texas, Public Improvement Bonds, Series 1988 (the "Bonds") , which are being issued in the aggregate principal amount of $2 ,000 ,000 and delivered simultaneously with the delivery of this certificate. The capitalized terms used in this Certificate (unless otherwise defined) are defined in the ordinance authorizing the issuance of the Bonds adopted on April 11 , 1988 (the "Ordinance") . I do hereby certify as follows: 1 . Authorized Representative. I am the duly chosen, qualified, and acting officer of the City for the office shown below my signature; as such, I am familiar with the facts herein certified and I am duly authorized to execute and deliver this Certificate. 2. Qualification of Official. I am charged, along with others , with responsibility for issuing the Bonds. I am aware of the provisions of Section 148 of the Internal Revenue Code of 1986 , as amended (the "Code") , and, to the extent applicable under the Code, the Treasury Regulations (the "Regulations" ) heretofore promulgated under Sec- tion 103 (c) of the Internal Revenue Code of 1954 , as amended and in effect prior to the enactment of the Tax Reform Act of 1986 . This Certificate is being executed and delivered pursuant to Section 1 . 103-13 and 1 . 103-14 of the Regula- tions. 3 . Reasonable Expectations. This certification is based on the facts and estimates in existence on the date of issue of the Bonds , and to the best of my knowledge and belief the expectations set forth herein are reasonable in the light of such facts and estimates. 4 . Description of Governmental Purpose. The Bonds are being issued for the purposes of funding construction and improvement of the roads, bridges , and streets of the City (the "Project") described more fully in the Official Statement dated April 11 , 1988 and the costs of issuance of the Bonds . 5 . Amount and Use of Original Proceeds of Bonds. The amount of original proceeds of the Bonds is approximately $1 ,957 ,437 . 80 , which amount represents the original princi- pal amount of the Bonds in the amount of $2 , 000 ,000 , plus accrued interest in the amount of $4 ,137 . 48 , less issuance costs in the amount of $46 ,700 .00 . Proceeds of the Bonds (exclusive of the discount) will be deposited and disbursed as follows: a. The amount of $4 , 137 .48 will be deposited as accrued interest in the City ' s Interest and Sinking Fund and will be disbursed to pay interest on the first interest payment date for the Bonds. b. The amount of $46 ,700 .00 will be deposited in the City' s Construction Fund and is expected to be disbursed to pay legal fees, fiscal agent fees and administrative and organizational fees relating to the issuance of the Bonds. c. The amount of $1 , 957 ,437 . 80 will be deposited in the Construction Fund and is expected to be disbursed to pay or reimburse the costs of acquisition and construction of the Project. The aggregate amount of the costs of acquisition and construction of the Project is anticipated to be not less than such amount. Any costs of the Project not financed out of original or investment proceeds of the Bonds will be financed out of the City' s available funds. 6 . Amount and Use of Investment Proceeds. The best estimate of the City is that investment proceeds resulting from the investment of any proceeds of the Bonds pending expenditure of such proceeds for costs of the Project will be in the approximate amount of $90 ,000 .00 . All such investment proceeds will be retained in the Construction Fund and used to pay or reimburse Project costs in addition to those described in paragraph 5 above. 7 . No Overissuance. Based upon the expectations set forth in the preceding paragraphs, the proceeds of the Bonds (together with any earnings from investments of such pro- ceeds pending their expenditure) are not expected to exceed the amount necessary for the governmental purpose of the Bonds by more than five percent of such amount. -2- ammaii, i mmft m.o. ..m 8 . Temporary Period for Original Proceeds. (a) The City has incurred or will incur within six months of the date hereof substantially binding con- tracts to commence acquisition or construction of the Project pursuant to which the City is obligated to expend at least $48 ,935. 94 . (b) The City reasonably expects that work on or acquisition of the Project will proceed with due diligence to completion and that the proceeds of the Bonds will be expended on the Project with reasonable dispatch. (c) The City reasonably expects that all of the original proceeds of the Bonds will have been expended on the Project prior to May 11 , 1991 . Any Original Proceeds not expended prior to May 11 , 1991 , will be invested at a yield not "materially higher" than the yield on the Bonds, except as set forth in Paragraph 13 below. 9 . Temporary Period for Investment Proceeds. The City reasonably expects that any amount derived from the investment of moneys received from the sale of the Bonds and from the investment of such investment income will not be commingled with substantial other receipts or revenues of the City and will be expended prior to May 11 , 1991 or one year after receipt of such investment income, whichever is later. Any such investment proceeds not expended prior to such date will be invested at a yield not "materially higher" than the yield on the Bonds, except as set forth in Paragraph 13 below. 10 . Flow of Funds. Under the Ordinance, the City is obligated to levy, assess and collect taxes in an amount sufficient to pay debt service on the Bonds. All taxes levied, assessed and collected by the City for and on account of the Bonds will be deposited into the Interest and Sinking Fund. 11 . Interest and Sinking Fund. The Interest and Sinking Fund established in the Ordinance will be used primarily to achieve a proper matching of revenues and debt service on the Bonds within each Bond year. The City expects that the taxes levied, assessed and collected each -3- .rr. Immo year, and amounts received from investment of moneys held in the Interest and Sinking Fund, will be sufficient to pay debt service each year on the Bonds. The City will adjust the annual tax rates as necessary, taking into account other moneys available or to be available for the payment of debt service on the Bonds. The portion of the Interest and Sinking Fund which will be depleted at least once a year except for a reasonable carryover amount not to exceed the greater of (a) one year' s earnings on the Interest and Sinking Fund or (b) one-twelfth of annual debt service, will be treated as a separate fund (the "Debt Service Portion" ) for purposes of this certificate. Amounts, other than original and investment proceeds of the Bonds, remaining in the Interest and Sinking Fund after the annual payment of all principal of and interest and premium, if any, on the Bonds, other than such reasonable carryover amount will be treated for purposes of this certificate as a separate fund (the "Reserve Portion") . The City reasonably expects that the sum of any amounts which (i) are allocable to such Reserve Portion or (ii) remain part of the Debt Service Portion for more than 13 months after the date of receipt of such amount, will not exceed $195 ,743 .78 at any time so long as any of the Bonds are outstanding. To the extent any such accumulations exceed $195 ,743 .78 , the amount in excess of $195 ,743.78 will be invested at a yield not in excess of the yield on the Bonds, except as set forth in paragraph 13 below. 12. No Other Funds. Other than the Interest and Sinking Fund, there are and will be no other funds or accounts comprised of securities (within the meaning of Section 165 (g) (2) (A) or (B) of the Code) , obligations, annuity contracts or investment-type property and estab- lished by or on behalf of the City which are reasonably expected to be used or generate earnings to be used, to pay debt service on the Bonds or which are reserved or pledged as collateral for payment of debt service on the Bonds and for which there is reasonable assurance that amounts therein will be available to pay such debt service if the City encounters financial difficulties . Uses of amounts in the Interest and Sinking Fund are described above and, there- fore, there is no other fund created or established, or to be created or established, which would be treated as a sinking fund in connection with the Bonds. 13 . Minor Portion. The City expects that all proceeds received from the sale of the Bonds and all investment -4- proceeds received on such amounts, and all other amounts pledged or anticipated to be used to pay principal of and interest on the Bonds , other than amounts on deposit in the Interest and Sinking Fund, will be expended in accordance with paragraphs 7 , 8 or 11 above. To the extent such amounts remain unexpended or are otherwise on hand following the periods set forth in paragraphs 7 , 8 or 11 above, the City will invest such amounts at a restricted yield as set forth in such paragraphs; provided, however, that a portion of such amounts, not to exceed in the aggregate $97 , 871 . 89 , may be invested at a yield which is materially higher than the yield on the Bonds. 14 . Compliance With Rebate Requirements. The City will use at least 95% of the net proceeds of the Bonds for local governmental activities of the City (including govern- mental units the jurisdiction of which is entirely within the jurisdiction of the City) and reasonably expects that the aggregate amount of all tax-exempt bonds (other than "private activity bonds" within the meaning of Section 141 of the Code) issued by the City (and all subordinate enti- ties of the City and entities to which the City is subordi- nate within the meaning of Section 148 of the Code) during the 1988 calendar year will not exceed $5 ,000 ,000 . Accord- ingly, the City expects to qualify for an exception to the requirements of Section 148 (f) of the Code relat; to the required rebate to the United States . In the event the City does not qualify for such exception, the City has covenanted in the Ordinance that it will take all necessary steps to comply with the requirement that "rebatable arbitrage earnings" on the investment of the "gross proceeds" of the Bonds, within the meaning of Section 148 (f) of the Code, if any, be rebated to the federal government. Specifically, the City will (1) maintain records regarding the investment of the "gross proceeds" of the Bonds as may be required to calculate such "rebatable arbitrage earnings" separately from records of amounts on deposit in the funds and accounts of the City which are allocable to other bond issues of the City or moneys which do not represent "gross proceeds" of any bonds of the City, (ii) calculate at such intervals as may be required by applicable Treasury Regulations , the amount of "rebatable arbitrage earnings, " if any, earned from the investment of the "gross proceeds" of the Bonds and (iii) pay, not less often than every fifth anniversary date of the delivery of the Bonds , all amounts required to be rebated to the federal government. Further, -5- the City will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the "gross proceeds" of the Bonds that might result in a "prohibited payment" within the meaning of Section 1 . 103-15AT of the Regulations. 15 . Yield on the Bonds. For purposes of this certifi- cate, the term "yield" shall have the meaning ascribed in Section 148 (h) of the Code and means that yield which when used in computing the present worth of all payments of principal and interest to be paid on an obligation produces an amount equal to the purchase price of such obligation. The yield on both the Bonds and any investments allocable to the Bonds ("Nonpurpose Investments") shall be calculated by the same frequency interval of compounding interest. In the case of the Bonds, "purchase price" means the initial offering price of the Bonds to the public (excluding all bond houses, brokers and other intermediaries) plus accrued interest. Based upon the representation of the underwriter, Clayton Brown & Associates, Inc. , set forth in Exhibit A hereto, the initial offering price (including accrued interest) of the Bonds to the public at which a substantial number of each maturity of the Bonds were sold aggregated $2 ,045 ,647 . 31 . Any underwriter' s disci -nt, issuance costs or costs of carrying or repaying the t=onds shall not be taken into account as an adjustment to the purchase price. The yield on the Bonds calculated in this manner by the financial advisor, Underwood Neuhaus & Co. , Inc. , as set forth on Exhibit B hereto, is 6 .978228% . As used herein, the term "Nonpurpose Investment" does not include obligations described in Section 103 (a) of the Code. 16 . No Artifice or Device. 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 (a) enabling the City to exploit the difference between tax-exempt and taxable interest rates to gain a material financial advantage , and (b) increasing the burden on the market for tax-exempt obligations. 17 . No Common Issue. There are no other obligations of the City which (a) are to be issued at substantially the same time as the Bonds, (b) are to be sold pursuant to a common plan of financing together with the Bonds, and (c) will be paid out of substantially the same source of funds -6- err dualism/ �� d. MMM Imam or will have substantially the same claim to be paid out of substantially the same source of funds as the Bonds. 18 . No Disposition. The City does not expect to dispose of any portion of the Project while any of the Bonds are outstanding. 19 . No Arbitrage. On the basis of the foregoing facts, estimates and circumstances, it is not expected that the proceeds of the Bonds will be used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code and the Regulations. To the best of the knowledge and belief of the undersigned, there are not other facts, estimates or circumstances that would materially change such expectations. 20. Right to Certify. The City has not been notified of nor is the City aware of any listing or proposed listing of it by the Commissioner of Internal Revenue, by publica- tion in the Internal Revenue Bulletin or otherwise, to the effect that it may not certify its Bonds. WITNESS MY HAND and the official seal of the City as of this 1" day of May, 1988 . Mayor City of Pearland, Texas (SEAL) -7- CERTIFICATE OF UNDERWRITER The undersigned hereby certifies as follows with respect to the sale of S2,000,000 City of Pearland, Texas, Public Improvement Bonds, Series 1988 (the "Bonds"). 1. The undersigned is the underwriter or the manager of the syndicate of underwriters which has purchased the Bonds from The City of Pearland, Texas (the "Issuer") at competitive sale. 2. The undersigned and/or one or more other members of the underwriting syndicate, if any, have made a bona fide offering of the Bonds of each maturity to the public. 3. The initial offering price (experessed as a yield) for the Bonds of each maturity at which a substantial amount of the Bonds of such maturity was sold to the public is as set forth below: Principal Amount Maturing Year of Maturity Yield S50,000 3-1-1989 `Z_. 50,000 3-1-1990 _.5_ 50,000 3-1-1991 S`75 50,000 3-1-1992 (_ _C_ 50,000 3-1-1993 l }-0. 50,000 3-1-1994 (•1• < 50,000 3-1-1995 1,.`L-b 50,000 3-1-1996 62_•(X0 100,000 3-1-1997 (F.70 250,000 3-1-1998 (o• O 250,000 3-1-1999 C. QO 250,000 3-1-2000 '7.aa 250,000 3-1-2001 y.io 250,000 3-1-2002 '1 .-2';' 250,000 3-1-2003 _. 4. The term "public", as used herein, means persons other than bondhouses, brokers, dealers, and similar persons or organizations acting in the capacity of underwriters or wholesalers. 5. The offering prices (yields) described above reflect current market prices at the time of such sales. 6. The undersigned understands that the statements made herein will be relied upon by the Issuer in its effort to comply with the conditions imposed by the Internal Revenue Code of 1986 on the exclusion of interest on the Bonds from gross income for federal income tax purposes. EXECUTED AND DELIVERED this 644k Al ,r 7 f ( /00 / /CLAYTON BROWN&ASSOCIATES,INC. (Name of( nderwriter or Manager) 'I . ( -Q,� By � C. , �� � Title Geri Schroeder,A.V.P. ix am= ..ter EXHIBIT B CERTIFICATE OF FINANCIAL ADVISOR We, the undersigned, have acted as financial advisor to the City of Pearland, Texas (the "City") , in connection with the sale and delivery of the City of Pearland, Texas, Public Improvement Bonds , Series 1988 , in the aggregate amount of $2 ,000 ,000 (the "Bonds" ) . In our capacity as financial advisor, we hereby certify as follows: 1 . That the initial yield on the Bonds , based on a purchase price of $2 ,045 ,647 . 32 , is not less than 6.978228 percent. For purposes of this certificate , the term "yield" means that yield which when used as a discount factor in computing the present value of an obligation produces the purchase price thereof . No underwriter ' s discount, issuance costs, or costs of carrying or repaying the Bonds has been taken into account for purposes of computing the yield on the Bonds. In addition, the purchase price used in computing yield on the Bonds is based solely on the certificate of Clayton Brown & Associates, Inc. attached to the No-Arbitrage Certificate prepared in ccnection with the Bonds. The undersigned understands that the statements made herein will be relied upon by the City in its effort to comply with the conditions imposed by the Internal Revenue Code of 1986 on the exclusion of interest on the Bonds from the gross income of their owners . Underwood, Neuhaus & Co. , Inc. By: Title: First Vice President 0830/2113 pear3/x Form 8038-G Information Return for Tax-Exempt (December 1986) Governmental Bond Issues 0MB No 1545 0720 Department of the Treasury ► Under Section 149(e) E,pires 12-31-89 Internal Revenue Service (Use Form 8038-GC if issue price is under S 100.000.) Part I Reporting Authority Check box if Amended Return ► E 1 Issuer's name 2 Issuer s employer ident,t,cathon number City of Pearland 1-746028909-7 3 Number and street i 4 Report number 3519 Liberty Drive l G198 -2_ 5 City or town state.and ZIP code ! 6 Date of issue Pearland, Texas • May 11, 1988 Part II Type of Issue (check box(es)that applies) 7 Check box if bonds are tax or other revenue anticipation bonds► E Issue Price 8 Check box if bonds are in the form of a lease or installment sale N. E 9 ❑ Education . . . . . . . . . . . . . 10 ❑ Health and hospital 11 ❑ Transportation 12 ❑ Public safety . . . . . . . . . . . . . . . . . . . . . . 13 E Environment(including sewage bonds) 14 E Housing . . . . . . . . . . . . . . . . . . . . . 15 L Utilities . . . . . . . . . . . . . . . . . . . . . . $2,041,509.84 16 ❑ Other. Describe(see instructions)► Part III Description of Bonds (a) (b) (c) (d) (a) • (c) Stated redemption Weighted (f) Net interest Maturity date Interest rate Issue price price at maturity avers a maturit geld cost 17 Finalmatunty . 3-1-2003 17.25 % $ 246,476.9 $ 250,000 y��A�����������1�������f�/�������% �� 18 Entire issue . . 'l0//00/////////OOGO///�/0/M0%�///�///00�/ $2,041,509.8441 $2,000,000 _ 10.56 years 6.9782 6.893 Part IV Uses of Original Proceeds of Issue(including underwriters'discount) 19 Proceeds used for accrued interest 19 $ 4,137.48 20 Proceeds used for bond issuance costs(including underwriters'discount) 20 I $ 46,700.00 21 Proceeds used for credit enhancement 21 -0- 22 Proceeds allocated to reasonably required reserve or replacement fund 22 -0- 23 Proceeds used to refund prior iss.ues 23 -0- 24 Nonrefunding proceeds of the issue(subtract lines 20, 21,22,and 23 from line 18,column(c)) . . 24 $1,994,809.16 Part V Description of Refunded Bonds(complete this part only for refunding bonds) N/A 25 Enter the remaining weighted average maturity of the bonds to be refunded ► years 26 Enter the last date on which the refunded bonds will be called ► 27 Enter the date(s)the refunded bonds were issued ► Part VI Miscellaneous 28 Enter the amount(if any)of the state volume cap allocated to this issue ► N/A 29 Arbitrage rebate: a Check box if the small governmental unit exception to the arbitrage rebate requirement applies b Check box if the 6-month temporary investment exception to the arbitrage rebate requirement is expected to apply ❑ c Check box if you expect to earn and rebate arbitrage profits to the U.S. ❑ 30 Enter the amount of the bonds designated by the issuer under section 265(bX3)(BXii) ► $2,041,509.84 31 Pooled financings: a Check box if any of the proceeds of this issue are to be used to make loans to other governmental units P. ❑ and enter the amount ► N/A b Check box if this issue is a loan made from the proceeds of another tax-exempt issue ► ❑ and enter the name of the issuer P. N/A and the date of the issue ► Under penalties of perjury.I declare at I nave e,amined this return and accompanying schedules and statements.and to the best of my knowledge and belief. Please they are true.c rrect.and complete Sign 3/i 1r� Mayo r Here I 'Signature of officer / ate Title For Paperwork Reduction Act Notice, see page 1 of the Instructions. Form 8038-G (12-86) /mi ram• w..■ RECEIPT AND NO-LITIGATION CERTIFICATE THE STATE OF TEXAS § COUNTIES OF BRAZORIA § AND HARRIS CITY OF PEARLAND § We, the undersigned officers of the CITY OF PEARLAND, TEXAS (the "City") , do hereby certify, as of the date set forth below, the following: 1 . On ItIIJ' i , we delivered, or caused to be delivered, t thie purchaser thereof the following bonds (the "Bonds") : CITY OF PEARLAND, TEXAS, PUBLIC IMPROVEMENT BONDS, SERIES 1988 , dated May 1 , 1988 , in the principal amount of $2 , 000 ,000 . 2 . At the time of such delivery, the City received from the purchaser full payment for the Bonds in keeping with the ordinance authorizing the issuance and awarding the sale thereof, such full purchase price being par plus accrued interest on the Bonds to the date of delivery, plus a premium of $ - b " . 3 . At the time of delivery of the Bonds , (a) no litigation of any nature has been filed or is now pending which contests or attacks the validity of the Bonds , which would restrain or enjoin the issuance or delivery of the Bonds; which would restrain or enjoin the collection or pledge of funds from which the Bonds are payable or would in any other manner affect the provision made for their payment or security; or which in any manner questions the proceed- ings or authority concerning the issuance of the Bonds ; and so far as we know and believe no such litigation is threat- ened; (b) neither the corporate existence nor the boundaries of the City are being contested; no litigation has been filed or is now pending which would affect the authority of the officers of the City to issue, execute and deliver the Bonds or would affect the title of the undersigned to their respective offices; and no authority or proceedings for the issuance, execution or delivery of the Bonds have been repealed, rescinded or revoked; and (c) no additional bonds, warrants or other indebtedness payable from the same source as the Bonds have been issued since the date of the General .w- � .3 ii i' INIMIN ..... .r. WORM ..�.. moms i• Certificate submitted to the Attorney General of Texas in connection with the approval of the Bonds . SIGNED AND SEALED as of, and delivered n, the date of delivery of the Bonds set forth above. AA ---:7-) Mayor CITY OF PEARLAND, TEXAS City Secreary CITY OF PEARLAND, TEXAS (CITY SEAL) . — PURCHASER' S RECEIPT The undersigned duly authorized representative of Clayton Brown & Associates , Inc. , the purchaser of the following described bonds: CITY OF PEARLAND, TEXAS , PUBLIC IMPROVEMENT BONDS, SERIES 1988 , dated May 1 , 1988 , in the total aggregate amount of $2 , 000 ,000 , acknowledges that the bonds have been delivered and received in the proper form and in accordance with the terms of issuance of said bonds; and certifies that the bonds have been paid for in full at a price equal to the principal amount of the bonds , plus accrued interest to the date of delivery. EXECUTED AND DELIVERED this l/ day of May, 1988 . CLAYTON BROWN & ASSOCIATES, INC. By IZ, A"\ i/ j O`er BETH BRADFORD Title TRUST OFFICER REGISTRAR'S RECEIPT The undersigned duly authorized representative of MTrust Corp, National Association, the registrar of the following described bonds : CITY OF PEARLAND, TEXAS , PUBLIC IMPROVEMENT BONDS, SERIES 1988 , dated May 1 , 1988 , in the total authorized aggregate amount of $2 , 000 , 000 , certifies that it has duly registered the above mentioned bonds in accordance with the Ordinance, adopted on April 11 , 1988 , and that said bonds have been delivered to the purchaser. EXECUTED AND DELIVERED this /l day of May, 1988 . MTRUST CORP, NATIONAL ASSOCIATION By 6d-L B RUST OFFICER CER Title /..;. �,. 1. ./ ,\ 1 i ., / \ 'r j ,` 1 '.1. I'�• j,'` /* ' , + •, >4 _ i � °°� ZinITED SmfIPESof ERICA ' t i'- SO -:,-1;„''':''' ','-'.t.,-:-'114;:j k:1 — - — ,-,--:Ta= its -„l REGISTERED REGISTERED ,al: �\x p DENOMINATION , , tY1i111[B Ellt i STATE OF TEXAS ➢D1DlGIGA lS " 'fr - ' COUNTIES OF BRAZORIA AND HARRIS O` '.! '' - - :, (� } of Dtt y�`n (�A $ 5 0 , 0 0 .0.a`' r,' -..._ -�ii`;::�_'� �ity oL learluub, 1 exaj -,�\ ,+ /'. t*. } Public Jmpruuement 1nnb 4 SERIES 1988 I i,. ?'ti INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP: �o �` fs0 1 ,Itatlt 8.80% March 1, 1990 May 1, 1988 704862 HE 4 y Moo `�\ REGISTERED OWNER: 4 ,?,,' CLAYTON BROWN & ASSOCIATES. INC. p) °;o+ i ,s,q (f} C ,fie, W.,''4 FIFTY THOUSAND r °. " Agile' PRINCIPAL AMOUNT: DOLLARS L L A R. S e{�la► THE CITY OF PEARLAND,TEXAS(the"City")promises topay to the registered owner identified above, is payable by check or draft payable on March 1, 1989 and semiannually thereafter on each September 1 and March '4 ;; ` r „ - ' or registered assigns,on the date specified above,upon presentation and surrender of this bond at the principal cor- I,mailed to the registered owner as shown on the books of registration kept by the Registrar as of the 15th calendar `t% porate trust office of MTrust Corp,National Association,Houston,Texas(the"Registrar"),the principal amount ides- date of the month next preceding each interest payment date. '' ; i tified above,payable in any coin or currency of the United States of America which on the date of payment of such REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON '`',•' it', .; principal is legal tender for the payment of debts due the United States of America,and to pay interest thereon at the THE REVERSE HEREOF,WHICH PROVISIONS SHALL HAVE THE SAME FORCE AND EFFECT AS IF SET ,•.\ti • rate shown above,calculated on the basis of a 360-day year of twelve 30-day mogths,from the later of May 1, 1988, FORTH AT THIS PLACE. ( ! dMT� mug or the most recent interest payment date to which interest has been paid or duly provided for. Interest on this bond , IN WITNESS WHEREOF,this bond has been signed with the manual or facsimile signature of the Mayor of the City and countersigned with the manual or facsimile signature of the City Secretary of the City,and the official seal of the City has been duly impressed,or placed in facsimile,on this bond. t, L. 4 304" i qi r' I AUTHENTICATION CERTIFICATE -. ;.. • • ••• • - ••. •• •• • It is hereby certified that this Bond has been delivered pursuant to the Ordinance described in the �. Bsj. ,, • ••• • ••• :: •; • •.•, • text of this Bond,in exchange for or in replacement of a Bond.Bonds or a portion of a Bond or Bonds nt* •••. • •: . • of a Series which was originally approved by the Attorney General of the State of Texas and registered I, '{IN �' ......• •�• • : i,11n1„ by the Comptroller of Public Accounts of the State of Texas. p i SO \ ,,cITY%F PEARLAND•,TEX• AS •• sS�`�.EIIL,40,,,, C p}a ryt a "• • • • •• • ,Q tom' ` • •": :• • • • • . r.;:' JL «? Houston. Texas ,', .r , +• ,��� ,�` •• - 1^! - Date of Authentication: 0 d4r ,�ti 4010,9r -0,O41 City Secretary.• •• ,•• ••••• ! • • n M9yEr •� •••• �.,, '•......... ' '; °,�r� • � P .' ..,,.i,. ••. . ... ••• • • ••• • • 0,.............. � „•.... 'T�y. ..nnnl l , ?' i By 0� pi,; „.04,-► r Authorized Signature Hao,, — --- --- ----- ra.-z- ------- ---- - _ -_ - —_----- '' _ s �- ,' ., • � �• ,;. dig- ..:: -�� .•. ��s. �-i� - •7 _::� • .� T. — -�. " 4� �1- � .......� „ .,. ::,,�., , ,.. w. ., :, ,. 1 r. d$.. � r • :� r1 .. .,. � •" ^^n y;�;•,i'r,,. .. �+ r r •"„� + • • THIS BOND ts one of a duly=dwnzd urns of Bolls.aggregating 32.000.000 She"Bands"),awed tar the purpose of um. THE BONDS ARE EXCHANGEABLE at the principal corporae trust office of the Repatra for bonds in the PnrceIPl amount rumwn all'umpmvsnem of the roads,br.A8n.all streets of the Coy,and purwant wan ordinance adopted M the Co Council on of 55.000 or any integral muhipk thereof,a lbj>t to the terms are condotons of the Ordinance. April II,1988(de"Odwtee"). THE REGISTRAR SHALL NOT BE REQUIRED to transfer or exchange any Bond during a penal begonntng at the opening of THE CITY RESERVES THE RIGHT,at Ion apron,to redeem the Bonds matunn4 on or after March I.1999.prior to.eir o hdul. business fifteen 115)calendar days prig to the firs mailing of a not.of redemption of Bonds and coding at the close of busuesa on ed matunlrcs,to wlwk or from tome to time th pan.in imegral multiples of 55.000.on Match I.1998,or Ito any interest pay meth date the day of such mailing. thereafter at par plus mounted interest on the pnncre.atsour called for redenptioo to the date fixed for redemption.Reference is made THIS BOND SHALL.NOT BE valid or obligatory for any Patpose in be entitled to an)benefit under tO a Odinaae unless His to He Ordinance for complete death concemieg the manner of redeeming the Bonds. Bond either III is regooemd by He Canpeoller of Public Accounts of the State of Texas by registration cenific*le endorsed hereon or NOTICE OF ANY REDEMPTION shall he given at Ieaa thirty 130)days prior to the date fixed for reaemplon by cerufed maul. tul is authenocaltil by the Registrar by due exaction of the authentication cenof te endorsed hereon. addressed to He registered owners of each Bond to be redeemed In whole or to pan at the address shtown on the hook of registration IT IS HEREBY CERTIFIED,RECITED AND COVENANTED that this Bad has been duly and vandly issued and delivered, kept by the Registrar and by publication once in a f oal journal or...non publabed In the Coy of New York,New York.or that all acts.conditions and shags required a power to he performed.to exist and to be done precedent to oral He nuuanor and delivery men the City of Austin,Texas.When Bonds or ponm thereof have been cal.for rde mpbwn.end due pmv.ton has been trade to redeem of this Bad have been performed,eta ad have ham done m accordance with law.and that annual ad valorem tax.wfficiem to provide He saute.the principal amounts so redeemed shall he payable solely from the Iunds provodd fee redemption.and interest which would for He pytanl of the MUGeat on and principal of this Bond,as such interest comes due and such principal matures,have been levied otherwise accrue on the amounts called for redemption shall terminate on the daR fixed for reemptoon and odc,ed to be kvkd again all walk property on the City wnaun the limit prescribed by the Comtialtion and laws of the State THIS BOND IS TRANSFERABLE only upon presentation and surrender at the principal corporate trust office of the Registrar, of Texas.all have been pkdgd irrevocably for such payment duly endorsed fa vamfer or acwmpateed by an assignment duly executed by He registered owner or his outhunted represenuttve,sub no to the tens and conditions of He Ordinance. VINSON a EucINS ATTORNEYS AT caw 3300 FIRST CITY TOWER 1001 FANNIN • HOUSTON,TEXAS 0002AI700 BASED ON SUCH EXAMINATION.IT IS OUR OPINION that theityprobalcentfied Ps .Asses complete legal authority the e nawaoa of the Bonds H full compliance.111 the Comdmtto.ate laws of the• «Te toy eS've and WE HAVE ACTED as bad cwmcl fa the CITY OF PEARLAND,TEXAS(He"City").on connection tooth an caste of bonds that therz d fore the Bonds constitute valid a legally biding obligatl6gs of He Co)vet are payadwpoth•m , pal and Hareat from (He'Bads")descend asfollows: He receipt of an annual ad valorem tax kvid th.within e limits et'eynhd w nook. ,By la,an no .popen•IgJbd within the City. THE RIGHTS OF THE OWNERS of the Bonds are saga?rcatheippleoble provision of the fedett Wokrvpcy laws ad any CITY OF PEARLAND.TEXAS,PUBLIC IMPROVEMENT BONDS.SERIES 1988.dated May I.1988,H the total other somas laws affecting He Tight of creditors of politrflaITSatAIns,a.may be limited V Werara`p�snples of eluhy whkh authorized aggregate anwuot of S2,000.000.muunng on March I tin each year as follows: permit the exercise of odic.HscrdoP. IT IS OUR FURTHER OPINION that: a • • Am.nt Amount Year Maturing Year Maturing IQ Interest on the Blinds is excludable from gross tia'ane of 0e holders for(egad intone tv wrgesvusler existing bor. 1989 s SD,CVJ 199'/ 5100.000 (21 The Bonds are rut"private stivoty bonds',e tB•e muting octr,Impel Revele Co.of 1(s6.as amended 1990 50,000 1998 100,UW (He"Code").and interest on He Bonds is edsabiieel to the alsmativeehwtyh o•ndividuals•d corporations, 1991 50,003 1999 250,000 except that interest on He Bods will be onc Cot the"adjusted net book&dole"and"adjusted.rrem earnings" 1992 50,000 2000 250,000 of a cotpnatia Iarher Nan any S corporannn rr�ttelf investment campao.%EIT,a R€Fr'1(or puposs of com- puting 50,000 20D1 250.ODD puting as altermtise minimum tax and its SWESIS•d-environmental tax"hayliry. • • 1996 50,030 2002 250.000 • 1995 50,000 2003 250,00D In providing.such coin.,ppe we have relied as npsesryannns of the Cy,.rc peel to miners solo widen the kmwkdgc of 1996 30,000 the Coy whntlm we have ma set entry verified,and have ow...continuing continuing aroI �with He covenants pal the om,lao z pennon• to : f the Codewhich aRat the a tlatdn'irom gross Intone of interest on doe sWp ieySnl income.purposes. The Bonds bear art subject to redemption P maturity.and may be transferred and exehangd as set out If such h W d need to be meccvred Q•coenpim or the Cob ails3n comply tooth He(oagonng rovetunt of He o at the Bonds cad m the Ordinance doped by He Coy Conch of the City.11wrade Heir ouaance I Se•'Oratinaae"I N He Bonds la become iochWYktihrydAu income from th`rylsof Heir anlsn{dot vary regardless of He ink whichon WE HAVE ACTED as bond caun0el for the sole purpose of rendenog an opinionH respect to the legality and validny of the I Oat 0ld.uo t e CO has designated the Boots p'q.0fied ax< mpf did p s'undo•00 Epode and has made Be repreaen- Bods under the COmtimttion and laws of the Sate of Texas under which the CO 8 a hone rule cry of the S of T _ and cosenants,which we have not indepedm#y 4 fted,necessary qualo y He Bonds . tax-exempt gnified obl obligations. ad woo rupee to the cactus.]of se th rest on e Bonds from gross mincomee for federal income tax purposes We have not Investigated Based such cpr d a a r fip towNattle Bad ag guy ftd ax-Me0pe6•g1/ms unash 0.098 law• or toted on5i1a1 proceedings,records.data or other material,but have reit.sokly upon the transcript of cernfid procedines dcsrib- Except as sated arose.we express no opinion ash y feel•-sl,sus h E l adsnnsegaences resulting from the ow mesh'',of, d in the following paragraph.We have assumedmti t assumed any respobdtiry uoc with respect to the fiial condition or capabtl'trcs of the Coy receipt ot interest on.or Msposffion of.the Bonds. ••••• or the disc. a thereof in connection with He sale of the Bands.Our rote on connection with the City s Official Statement prepmd Owners of the Beds should.aware that the owlein.ea ante pf obTgi •cesu•in federal income tax fro use m connection with the sale of the Bads has been limited as described thereinconsequences to I . f c and p pre d a casualty. comply.. S cokorations with Sub- IN OUR CAPACITY as bond counsel,we have participated m cipat He preparanon of and have examined a vans,.of cent fed pro. clupter C K profits.( L.tsclual recipientsof SocnahF yo Ndmd Retirement bei!(s and wavers ho may be deemed rase paruuning to W on pros 8 Y customary ha d d d h d purchase Y let ahltgaltons.In ddwpow was ixeign corporations clomp ages de Bonds which corms public officials a f end f the C f' f ff in the ��i.0d Pnr1A agent and eeprexruva or true City and offer publicoB- ad her eeni(ed showings relating t the authorize nand issuance business PS interest d Skies u n t y he o subject 50 Hooflb w•branch Ra•th set Qa an Herr eBxtivelY-co•• �s and profits(deluding of to Bands.We have also examined executed Bond No.R-1 of dm issue. tasteinterest n t • a •Ilsdl*F•fINS I HEREBY CERTIFY that the above and fagging a a sue and tort.copy of He legal optimon upon He bonds therein described which was manually signed by Vinson&Elkins,Houston,Texas.a.wu dated as of Ile daRtf deltiyry of and payment for sad hods. City .. Secretary C City of Pearad.Texts STATEMENT OF INSURANCE Municipal Bond Guaranty Imar.ce Paltry No.27218E(the"Policy".with respect 10 payments due for principal of and interest on this hood his been Owed by AMBAC Indemnity Corporation I"AMBAC Indemotiry"1.The Policy has been delivered to the United States Tmsl Company of New Yak,New York.New York,as the Insurance Trustee under satin Polk)and.11 be held by such Insurance Trustee or any successor insurance mow.The Policy ton file and avadabk for aspe.on at the pdcipal office of the Imuonce Trustee set a copy thereof may he secured from AMEAC Indemnity or the hum..Trustee.Al payrne.+s squired to be made under the Policy shall he made in accordance oath.provision deco(The oarer of dos bme acknowledges and ironsems to the.wbrogaion rights of AMBAC Indemnity as more fully e1 forth in the Policy. ASSIGNMENT Foe wlae received,the underrogned hereby sells.assigns.and transfers unto (Please pro or type inane,address.and zip code of Transferee, _ (Please bsen Social Sennry or Taxpayer Identification Mather of Transferee) the wain.bad and all rights thereunder.and hereby irrevocably constitutes and appoints 'snowy to transfer said bad on He boob kept for registration hereof.with full power of substitution on the premises. DATED.- Signature Guaranteed: NOTICE:Signature mat he gat^ased by a member firm of the New Yak Suck Exchange or a commercial bank or rand company. Registered Owner NOTICE:The manamrc above mast correspond to He name<ede registered owner as shown on the face of this bond in every particular, without any alteration,enlargement or change who never. , ; Atic �htI�ED SmRESoffI�ItERIC�I �' :� a s� - �° fir. ass 41 r---------- ------- -- v-�'--- — - --- -- --- {1nsi ° REGISTERED REGISTERED t DENOMINATION 1 b 1 0 "'1,4 �r; NUMBER i STATE OF TEXAS 1M)LLA�e� _� ,p,. COUNTIES OF BRAZORIA AND HARRIS 1 ! 1 N!{ 4' . (Mg of ilearlanb, Xexuu ' ,,z, ublir Jmprouement fond I,, „ SERIES 1988 gip• 1,i INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP: ( '' !, + auSOR May 1, 1988 f 3 , 't 47 lifts }', J REGISTERED OWNER: ' •�`! • I N ' qr_ S !6 ffsIone PRINCIPAL AMOUNT: D O L. L A R S - ,, „4 5;. THE CITY OF PEARLAND,TEXAS(the"City")promises to pay to the registered owner identified above, is payable by check or draft payable on March I, 1989 and semiannually thereafter on each September 1 and March j or registered assigns,on the date specified above,upon presentation and surrender of this bond at the principal cor- I,mailed to the registered owner as shown on the books of registration kept by the Registrar as of the 15th calendar i, A'_ - porate trust office of MTrust Corp,National Association,Houston,Texas(the"Registrar"),the principal amount iden- date of the month next preceding each interest payment date. ( , - ":,,r ` i tified above,payable in any coin or currency of the United States of America which on the date of payment of such REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON i, 14 ,, principal is legal tender for the payment of debts due the United States of America,and to pay interest thereon at the THE REVERSE HEREOF,WHICH PROVISIONS SHALL HAVE THE SAME FORCE AND EFFECT AS IF SET ( „ 4 rate shown above,calculated on the basis of a 360-day year of twelve 30-day months,from the later of May I, 1988, FORTH AT THIS PLACE. i 1010 or the most recent interest payment date to which interest has been paid or duly provided for. Interest on this bond I; OW . I IN WITNESS WHEREOF,this bond has been signed with the manual or facsimile signature of the Mayor of the City and countersigned with the manual or facsimile signature of the City Secretary of the City,and the official seal I of the City has been duly impressed,or placed in facsimile,on this bond. pP 1tn 1 y s> Asif' AUTHENTICATION CERTIFICATE 1 •{I • • • ..; •'• •.•. . . It is hereby certified that this Bond has been delivered pursuant to the Ordinance described in the ,, itf#+ .,. •• • •• • : ••. • • text of this Bond,in exchange for or in replacement of a Bond,Bonds or a portion of a Bond or Bonds i O,‘4 ►f • of a Series which was originally approved by the Attorney General of the State of Texas and registered 1 latN#;i ••••••••• f 4 t»x;�" ••� •i1 Y OF PEARLAND,4 EXAS ,��seE��_!__�,___ by the Comptroller of Public Accounts of the State of Texas. I ` 4. ••• •�� ••.• ••• • .. MTrust Corp,• National Association 1 ; •,41.41.4....... JL .•••• Houston, Texas ', fill • • •••• •t`-=^�.. .. _• • 1^! Date of Authentication: 5 •• ••• •• � • • • • •• • • • • �tti1F `„ e0,1 City Seree sry• • • • • • • • • Mayon, •• 1i. `ryA 1 'N y i1 SUi 4cad ' B Authorized Signature t , i' llpit — —— — — r'�'r � -'• ,,. �,...:< i • ,, .,:.Ci'.:•'.'r,l.r, ''.a,''! r, .... . Kr'r',, •�. .... '`r�,'. .. ..�•;' .. ,^,r', � - ,,,,;. • THIS BOND is are of a duly aulburiaed series of Bonds.aggregating$2 000000 IIM"&rids"1.'issued for the purpose of cam THE BONDS ARE EXCHANGEABLE al the pnnopd corporate mat office of dre Registrar for bonds In the principal amount sm..and hnpmvesnenl of the road,bridges.and streets of the City,and purssmt to an ordinance adopted by the Clay Council on of$5,1100 or any in.,.multiple thereof.subject to the terms and conditions of the Ordinates. April II,1988(the"Ordimmce"I. THE REGISTRAR SHALL NOT BE REQUIRED to Irarufer or exchange any Bond during a pent.legimhing at the opening of THE CRY RESERVES THE RIGHT,at its o%wn,to ranem the Bonds storing on or after March I.1999.prior to then schedul- business bftan 1151 calendar days poor to the fire mailthg of a nonce of redemption of Bonds and ending at the close of business inn d nlatunties,Al wink Al from lime o unit in pan.In integral multiples of S5 000.an March 1.1998,or an any interest payment date the day of.such mailing. Ibemaher at per plus accrued interest on the prmclpal amounts called for reJempinm to the date fixed for redemption.Reference is made THIS BOND SHALL NOT BE valid or obligatory for any purpose or be entitled to any benefit under All Ordinance unless this to the Ordinance for complete death concerning the manner of redeeming Ae Binds. Bond either to Is registered by Ne CwnpbAller Al Public Attou,l of the State of Texas by rgisrrauin cenlfiute endorsed hereon or NOTICE OF ANY REDEMPTION shall be given at leas thirty 1101 days prior to the date fixed for ledem%nm by certified mail, inl is authenticated by the Registrar by due execution of the authentication certificate endorsed hereon. addressed to the registered owners of each Bond to be redeemed in whole Al in pan at to address shown o,the books of regisaation IT IS HEREBY CERTIFIED,RECITED AND COVENANTED that HIS Bind hu been duly and validly Issued and delivered, kept by the Reglarar and by publication one in a financial Journal or publication published in the City of New York.New York,or that AI acts,conditions and things wired or proper lo Iv performed,to exist and to be done precedent to or in the issuance and delivery m the Ciry of Allsrm.Texas.When Bonds or pitons thereofhase Mtn called for redemption.and due psocisnon has ken made to redeem of thh Bored have been performed,most and have been done N accordance with law.and that annual ad valorem taxes sufi"ciem to provide the same,Ne principal amounts so redeemed shall be payable solely from the funds provided for redemption.and interest which would for the payment of the interest on and pnrelpal of this Band,as such interest coma Are and such pnneipl Iwures,have peen levied othenwile accrue on the ammo,a called for redemption shall te In We date fixed for redemption. and ordered to he levied against all taxable property in the Cily whin the limits prescribed by the Constitution and laws Al the State THIS BOND IS TRANSFERABLE only upon presentation an t aneMer at to pnreipal corps ate trust office of the Registrar, of Texas.and have ban pledged irrevocably for such payment. Ally endorsed for transfer or accompnted by an assignment duly executed by the registered owner Al hs authorized representative.sab- red to the terms and editions of the Ordinance. VINSON&ELKINs ATTORNEYS AT LAW • MOO FlIST CITY TOWER FANNIN HOUSTON,TEXAS 77002-0780 • BASED ON SUCH EXAMINATION,1T IS OUR OPINION that theacnpt Alce•m ILc d��ygg evidences complete legal au ,for Ae issuance of the Bonds in full compliance witlyeaECAlI •lAan and laws of Stall presently effective end WE HAVE ACTED as bond counsel for the CITY OF PEARLAND,TEXAS(The"Clay").In connection with an issue Al bonds that therefore the Bads constitute valid and legally bid ,01lll111aa oT the City and are pay* both as to principal and interest from (the"Bads')described as follows'. Ae receipts of an annual ad valorem sex levied,within the stypiA prelcndd by law.on tart p� waled within the City. THE RIGHTS OF THE OWNERS Al the Bondw sufjaLm the applicable prov1sdps df tad fakial bankruptcy laws and any CITY OF PEARLAND.TEXAS,PUBLIC IMPROVEMENT BONDS,SERIES 1988.dated May I.1988,in the toed other similar laws affecting the rights Al creditors Al midi&ubBsisone.fl g be limlfed b'general pnnc1ples Al equm which .SN onzd aggregate u as amoure of 52,000.000.munng on March I In uch year follows', permit de exercise of judicial discretion. a •• IT IS OUR FURTHER OPINION Nat'. Amount Amount },��� • Year Maturing Year Maturing 011merest on the Bosch is excludable fronglb re iacy of the lop rafsr;demi ircnite tax"upon.under existing law• 1989 S 50,000 1997 SI00,000 (21 The Balls arc not"piny*activity b nd8'�sank,the meaning of MA•eraal Revenue Code of 1986,as amended 1990 50,000 1998 250,000 (dm"Cede").and interest oh the Bondi/gnat y1•ece Ise the...Slog pigmum 08 qQnn•d•idJIds and corpalions, 1991 50,003 1999 250,000 except that'mterat on the Bonds will baRnciwk4 in the".joined net book encmme"Rd"adjulled current earnings" 1992 50000 2000 250000 Ala corporation(other Nan any 5 corpoddhen.vs.hoed investment comps,.REIT1r REMICI Sr purposes of com- 1993 50.000 2001 250,000 prong its alterllauve minimum tax and ga•S ind"envllo nmr.:'iasiliry.• • 1995 50,000 2003 250.000 In providing.such opinions,we have relief 0 marceentations Al the Clly walirespeclp•ycr•.s4ly wain the knowledge of 19965 50,000 2003 250.000 the Cry which have not independently vellfie3 go* and continuing o l ante with the n the Ordmavre pertain- Mg 50000 thoseAl the CodeMelt affect the tact iAlrah Income Al�or(l0 8 ,mitt on'Y with porposes the The Bonds bear- subject to redemption prior maturity,and may he transferred and exch.gd as set out If such h rty d trotl he- AI f+ incomplete or yh C1 y J I'u cowls h Ne foregoing mvaanls o!the in the Bonds and.to Ord...adopted by the City Council of the City authorizing their issuance(th • diwce"1 0Minance.ireerest on to Mnds could become incgudabie`n•noss Income franathe•date,f then ciaamagl d Fran regardless of the dva can which to event causing such hneluson occurs... WE HAVE ACTED as bond counsel for the sole purpose of rendering an opintonith respect to the legality and validity of the In the Oceinance the C]ly has designated the Byds m�{gyayl fist w< oPf Vo�gaAoni M as riderll•sc.,•and h the represen- Bolds under to Conti and laws Al the State Al Texas under which de Cal s acting as a have rule city of Ne State or Texas. d a which h tehm pe de dy ed er ill$ IIp1 to Bonds H qualified sex IA obi g m and with respect to the exclusion Al interest on the Bonds bon,gross income for Idea notm l income tall pumnes We have a lestiga Based ed Bas such representations and, t isoueopi Irralhltcu the Bow C'gWlfid I: .eL l•b�ui it nd ling law. or e TM gene!proceed g records.clamor other material buthe eked solely upon the transcript of candid d proce ngs descr b _Except above.stated a P p wit ..s Wail E loci,' consigner*res4lng from to ship Al, ed in the f 11 N8 paragraph W lave not assumed any responsibility i with respect to die financial cond1on or capabilities Al the City %Al Napos f the Gaul - OAl N Bads should be that the - blip Alfax-exempt abllg s di,result in?olla al federal a thedisclosure thereof ,with aA sale Al the Bond.W le n - with the Ciry s Official Sutemcm prepared wt'� time Sub ax far use N connection COP with as bale Al the Bonds has been limited he described the hapter C eas l,financial el and paSaselI l hta I y ance Sll hearla WNW taIn 5 corporations with mad IN OUR CAPACITY the as bond counsel,we have participated A prepay of and have a ned arisen% f certified pm- bap i g d profile.de d e p b of Social n.ties a•t1Noli!inurement hiadd 2}' v3 I Wy - w :bedamd pertaining to o r end o Al customary tons haverod ed indebtedness top new br cart• <Rrnp obligations.eA ay-ionnect&ein foreign roi win doing readingsthe Bonds which contains ttnilhd c mf f the CA f f officers. agenr ants ha' s Al the my and other publico -officialsand other-cni0d showings relating m the authorization d sconce Ai-exempt :e the United S t y b osubject to to new branch profits sex on I•r effectivel••••earnings and profs(including of the Bands.AlWe have also examined examd Bond No.R-I of this issue. emP interest h u interest n tr Bondsl. •••• • VINSON a Eucais I HEREBY CERTIFY due the above and foregoing is a nue and mom spy of the legal opinion upon the bond therein described which wasmanually signed by Vinson&Elkins,Houston,Texas,and was dated u of Me dallordelivcry of and payment for said hoods. City Secretary Ciry of Par1aM,Texas STATEMENT OF INSURANCE Municipal Bond Guaranty Insurance Policy No.2121 BE idle"Policy"I web respect to payments due for principal of and interest on this bond has been issued by AMBAC Indemnity Corporation f'AMBAC Indemnity").The Policy has been delivered to the United States Tn.Company of New York,New York,New York.as the Insurance Trustee under said Policy and will be held by such Insurance Trustee or any successor insurance trustee.The Policy ix on file and mailable for inspection at the principal office of the Insurance Trustee and a copy thereof may be secured ham AMBAC Indemnity ate Insurance Trustee.All paynena required to be made under the Policy shall1L made in accordance wall*provisions thereof.The owner of this bind acksowkages and consents to the subrogation eghs of AMBAC Indemnity as more fully to fond d the Policy. A551GNMEAT For wdue received.the undersigned hereby sells.assigns,and transfers moo lPNase print or ape noire.address.and zip rode of Transferee) (Ukase insert Social Security or Tarpayher Idenafmaaion Norther of T fared the widen bond and all rights thereunder.and hereby irrevocably constitutes and appoints anrmey tatransfer said dad on the books kepi fin registration thereof.noN full power of substitution in the premises. DATED.- Signature Guaranteed- NOTICE Sigeaare noon be guaranteed by a IneaMrr firm of the New York Stock Exchange or a commercial bank or ma canpamy. Regotered Purer NOTICE.-The sfgluare dove must correspond to the name of the registered owner Al shown on the face of rho bond in every particular. Mauna a am alteration.enlargement or change whatsoever.