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Ord. 1533 2016-11-14
ORDINANCE NO. 1533 An Ordinance of the City Council of the City of Pearland,Texas, authorizing the issuance of City of Pearland, Texas, permanent improvement refunding bonds in one or more series, setting certain parameters for the bonds, authorizing refunding of certain outstanding obligations, authorizing a pricing officer to approve the amount, the interest rate, price, and terms thereof and certain other procedures and provisions relating thereto. WHEREAS, the City of Pearland, Texas (the "City"), acting through its City Council, is authorized by Section 3 07 of its Home Rule Charter and the Constitution and laws of the State of Texas,particularly Chapters 1331 of the Texas Government Code, as amended, to issue bonds for the purpose of making needed public improvements, WHEREAS, the City Council of the City has heretofore issued or assumed the obligations described m Exhibit A attached hereto and as more particularly described in the Officer's Pricing Certificate(defined herein), and WHEREAS,the City desires to refund part of said obligations in advance of their matunties as determined pursuant to the parameters set forth herein(the"Refunded Bonds")for the purpose of achieving debt service savings, and WHEREAS, Chapter 1207, Texas Government Code, as amended ("Chapter 1207") authorizes the City to issue refunding bonds payable from taxes,without an election,for the purpose of refunding the Refunded Bonds in advance of their matunties, and to accomplish such refunding by depositing directly with any paying agent for the Refunded Bonds (or other qualified escrow agent), the proceeds of such refunding bonds, together with other available funds, in an amount sufficient to provide for the payment or redemption of the Refunded Bonds, and provides that such deposit shall constitute the making of firm banking and financial arrangements for the discharge and final payment or redemption of the Refunded Bonds, and WHEREAS,the City desires to authonze the execution of an escrow agreement,if necessary, and provide for the deposit of proceeds of the refunding bonds, together with other lawfully available funds of the Distract, to pay the Refunded Bonds, and WHEREAS, upon the issuance of the refunding bonds herein authonzed and the deposit of funds referred to above, the Refunded Bonds shall no longer be regarded as bemg outstanding, except for the purpose of being paid pursuant to such deposit, and the pledges, liens, trusts and all other covenants,provisions, teens and conditions of the ordinances authonzmg the issuance of the Refunded Bonds shall be, with respect to the Refunded Bonds, discharged, terminated and defeased, WHEREAS,the City is an"Issuer"within the meaning of Chapter 1371,Texas Government Code ("Chapter 1371"), and Chapter 1371 and Chapter 1207 authorize the City to delegate the authority to effect the sale of the Bonds to a Pricing Officer, as defined herein.Now,therefore BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND• 1 Recitals,Consideration. It is hereby found and determined that the matters and facts set out in the preamble to this Ordinance are true and correct. It is hereby found and determined that the refunding contemplated in this Ordinance will benefit the City by providing a present value savings in the debt service payable by the City, that such benefit is sufficient consideration for the refunding of the Refunded Bonds, and that the issuance of the refunding bonds is in the best interests of the City 2. Definitions. Throughout this Ordinance the following terms and expressions as used herein shall have the meanings set forth below "Blanket Issuer Letter of Representations" means the Blanket Issuer Letter of Representations between the City, the Registrar and DTC "Bond Purchase Agreement" means an agreement between the City and the Underwriter described in Section 23 of this Ordinance "Bonds"means the means one or more series of Bonds issued by the City of Pearland,Texas authorized in this Ordinance, as designated in an Officer's Pricing Certificate. "Business Day" means any day which is not a Saturday, Sunday, or a day on which the Registrar is authorized by law or executive order to close, or a legal holiday "City"means the City of Pearland, Texas. "Closing Date"means the date of the initial delivery of and payment any series of Bonds. "Code"means the Internal Revenue Code of 1986, as amended. "Comptroller"means the Comptroller of Public Accounts of the State of Texas. "Debt Service Fund"means the debt service fund for payment of the Bonds established by the City in Section 20 of this Ordinance. "DTC"means The Depository Trust Company of New York,New York, or any successor securities depository "DTC Participant"means brokers and dealers,banks,trust compames,clearing corporations and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. "Escrow Agent"means Wells Fargo Bank,N.A. "Escrow Agreement"means an agreement between the City and the Escrow Agent relating to the escrow of funds to pay the Refunded Bonds. "Imtial Bond"means the Initial Bond authorized by Section 6(d) "Interest Payment Date", when used in connection with any Current Interest Bond,means shall mean the date(s) determined by a Pricing Officer and set forth in the Officer's Pricing Certificate. "MSRB"means the Municipal Securities Rulemaking Board. "Officer's Pricing Certificate"means a certificate signed by the Pricing Officer pursuant to Section 5 hereof. "Ordinance" as used herein and in the Bonds means this ordinance authorizing the Bonds. "Owner"means any person who shall be the registered owner of any outstanding Bond. "Pricing Officer"means the Mayor,City Manager,Deputy City Manager or the Director of Finance. "Record Date"means,with respect to the Bonds,the close of business on the 15th calendar day of the month preceding such Interest Payment Date. "Refunded Bonds"means any of the obligations described on Exhibit A attached hereto and as more specifically described in the Officer's Pricing Certificate. "Register"means the books of registration kept by the Registrar,in which are maintained the names and addresses of, and the principal amounts of the Bonds registered to, each Owner "Registrar"means Wells Fargo Bank,N.A., and its successors in that capacity "Report" means the report of Grant Thornton LLP, verifying the accuracy of certain mathematical computations relating to the Bonds and the Refunded Bonds. "Rule"means SEC Rule 15c2-12, as amended from time to time. "SEC"means the Umted States Secunties and Exchange Commission. "Underwriters"means the firms listed in the Officer's Pricing Certificate as the underwriters or initial purchasers of the Bonds. 3 Authorization. The Bonds shall be issued in fully registered form in a maximum principal amount not to exceed $120,000,000 for the purpose of refunding the Refunded Bonds, under and in strict conformity with the Constitution and laws of the State of Texas, particularly Chapter 1207, Texas Government Code and the costs of issuing the Bonds. The Bonds may be issued in one or more serves/installments. 4 Date,Denomination,Interest Rates,and Maturities. The Bonds shall be designated as City of Pearland,Texas Permanent Improvement Refunding Bonds 1 and shall be dated the date set forth in the Officer's Pricing Certificate, shall mature on March 1 m each of the years and m the amounts set out in the Officer's Pricing Certificate,shall be subject to prior optional and mandatory redemption on the dates,for the redemption prices and in the amounts set out m the Officer's Pricing Certificate and shall bear interest from their issuance date at the rates set forth in the Officer's Pricing Certificate payable on each March 1 and September 1 commencmg on the date set forth in the Officer's Pricing Certificate. The Bonds may be transferred and exchanged as set out in this Ordinance. The Initial Bond shall be numbered I-1 and all other Bonds shall be numbered in sequence beginning with R-1 Bonds delivered on transfer of or m 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 on the same rate as the Bond or Bonds in lieu of which they are delivered. 5 Selling and Delivering the Bonds. As authorized by Section 1207 Texas Government Code,as amended,the Pricing Officer is hereby authorized to act on behalf of the City m selling and delivering the Bonds, in one or more series of bonds/installments, and carrying out the other procedures specified in this Ordinance, including without limitation determining the price at which the Bonds will be sold,the issuance date for the Bonds,the form m which the Bonds shall be issued (whether as current interest bonds or as any combination of current interest bonds and compound interest bonds),the years in which the Bonds will mature,the principal amount to mature in each of such years, the rate of interest to be borne by each such maturity, the dates,prices and terms upon and at which the Bonds shall be subject to redemption prior to maturity at the option of the City, as well as any mandatory redemption provisions for the Bonds, and all other matters not expressly provided in this Ordinance, relating to the issuance, sale and delivery of the Bonds, and the refunding of the Refunded Bonds,all of which shall be specified m the Officer's Pricing Certificate; provided that: (i) none of the Bonds shall bear interest at a rate in excess of the maximum rate allowed by Chapter 1204,Texas Government Code, as amended, (ii) the aggregate principal amounts of the Bonds may not exceed the maximum principal amounts authorized in Section 3 hereof; and the proceeds from the sale of the Bonds,along with any available funds of the City to be used in the refunding,must be sufficient to provide, after all original issue discount and underwriter's discount,amounts necessary to fund the costs and expenses of refunding the Refunded Bonds and the estimated costs of issuance of the Bonds, Insert from Pricing Certificate. (iii) the net present value savings in debt service resulting from the refunding of the Refunded Bonds shall be at least 5% of the principal amount of the Refunded Bonds, as shown by a table of calculations prepared by the City's financial advisor and attached to the Officer's Pricing Certificate; and (iv) none of the Bonds shall have a the maximum maturity date later than 2034 6 Execution of Bonds, Seal. (a) The Bonds shall be signed on behalf of the City by the Mayor and countersigned by the City Secretary, by their manual, lithographed, or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Bonds shall have the same effect as if each of the Bonds had been signed manually and m person by each of said Officer's, and such facsimile seal on the Bonds shall have the same effect as if the official seal of the City had been manually impressed upon each of the Bonds. (b) 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. (c) Except as provided below,no Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the Registrar's Authentication Bond substantially in the form provided herein, duly authenticated by manual execution by an officer or duly authorized signatory of the Registrar In lieu of the executed Registrar's Authentication Bond described above, the Initial Bond delivered at the Closing Date shall have attached hereto the Comptroller's Registration Certificate substantially in the form provided herein, manually executed by the Comptroller, or by his duly authorized agent, which certificate shall be evidence that the Initial Bond has been duly approved by the Attorney General of the State of Texas and that it is a valid and binding obligation of the City,and has been registered by the Comptroller (d) On the Closing Date, the Initial Bond, being a smgle bond representing the entire principal amount of the Bonds, payable in stated installments to the Underwriter or its designee, executed by manual or facsimile signature of the Mayor and City Secretary of the City,approved by the Attorney General, and registered and manually signed by the Comptroller, shall be delivered to the Underwriter or its designee Upon payment for the Initial Bond,the Registrar shall cancel the Initial Bond and deliver definitive Bonds to DTC 7 Payment of Principal and Interest. The Registrar is hereby appointed as the paying agent and registrar for the Bonds. The principal of the Bonds shall be payable,without exchange or collection charges, in any coin or currency of the United States of Amenca which, on the date of payment, is legal tender for the payment of debts due the United States of Amenca, upon their presentation and surrender as they respectively become due and payable at the principal payment office of the Registrar The interest on each Bond shall be payable on each Interest Payment Date, by check mailed by the Registrar on or before the Interest Payment Date to the Owner of record as of the Record Date. If the date for payment of the prmcipal of or interest on any Bond is not a Busmess Day,then the date for such payment shall be the next succeedmg Business Day with the same force and effect as if made on the date payment was originally due. 8 Successor Registrars. The City covenants that at all times while any Bonds are outstanding it will provide a commercial bank or trust company, organized under the laws of the United States or any state, and duly qualified and legally authorized to serve as Registrar for the Bonds. The City reserves the right to change the Registrar on not less than 60 days written notice to the Registrar, so long as any such notice is effective not less than 60 days prior to the next succeeding principal or interest payment date on the Bonds. Promptly upon the appointment of any successor Registrar, the previous Registrar shall deliver the Register or copies thereof to the new Registrar, and the new Registrar shall notify each Owner,by United States mail, first class postage prepaid, of such change and of the address of the new Registrar Each Registrar hereunder, by acting in that capacity, shall be deemed to have agreed to the provisions of this Section. 9 Special Record Date. If interest on any Bond is not paid on any Interest Payment Date and continues unpaid for thirty(30)days thereafter,the Registrar shall establish a new record date for the payment of such interest, to be known as a Special Record Date. The Registrar shall establish a Special Record Date when funds to make such interest payment are received from or on behalf of the City Such Special Record Date shall be fifteen(15) days prior to the date fixed for payment of such past due interest, and notice of the date of payment and the Special Record Date shall be sent by Umted States mail, first class,postage prepaid,not later than five(5)days prior to the Special Record Date, to each affected Owner of record as of the close of business on the day pnor to the mailing of such notice. 10 Ownership,Unclaimed Principal and Interest. The City,the Registrar and any other person may treat the person in whose name any Bond is registered as the absolute owner of such Bond for the purpose of making and receiving payment of the principal of or interest on such Bond, and for all other purposes, whether or not such Bond is overdue, and neither the City nor the Registrar shall be bound by any notice or knowledge to the contrary All payments made to the person deemed to be the Owner of any Bond in accordance with this Section shall be valid and effectual and shall discharge the liability of the City and the Registrar upon such Bond to the extent of the sums paid. Amounts held by the 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. 11 Registration,Transfer,and Exchange. So long as any Bonds remain outstanding,the Registrar shall keep the Register at its principal payment office, and, subject to such reasonable regulations as it may prescribe,the Registrar shall provide for the registration and transfer of Bonds in accordance with the terms of this Ordinance. Each Bond shall be transferable only upon the presentation and surrender thereof at the principal payment office of the Registrar, duly endorsed for transfer, or accompamed 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 transfer, the Registrar shall authenticate and deliver in exchange therefor,within three Business Days after such presentation,a new Bond or Bonds registered in the name of the transferee or transferees, in authorized denominations and of the same maturity and aggregate principal amount and bearing interest at the same rate as the Bond or Bonds so presented. All Bonds shall be exchangeable upon presentation and surrender thereof at the principal payment office of the Registrar, for a Bond or Bonds of like maturity and interest rate and in any authorized denomination,in an aggregate amount equal to the unpaid principal amount of the Bond or Bonds presented for exchange. The Registrar shall be and is hereby authorized to authenticate and deliver exchange Bonds in accordance with the provisions of this Section. Each Bond delivered m accordance with this Section shall be entitled to the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such Bond is delivered. The City or the 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 12. Mutilated, Lost, or Stolen Bonds. Upon the presentation and surrender to the Registrar of a mutilated Bond, the Registrar shall authenticate and deliver in exchange therefor a replacement Bond of like maturity, interest rate, and principal amount, bearing a number not contemporaneously outstanding. If any Bond is lost,apparently destroyed,or wrongfully taken,the City,pursuant to the applicable laws of the State of Texas and m the absence of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall authorize and the Registrar shall authenticate and deliver a replacement Bond of like maturity, mterest rate and prmcipal amount, bearing a number not contemporaneously outstanding. The City or the Registrar may require the Owner of a mutilated Bond to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith and any other expenses connected therewith, including the fees and expenses of the Registrar The City or the Registrar may require the Owner of a lost, apparently destroyed or wrongfully taken Bond, before any replacement Bond is issued,to (1) furnish to the City and the Registrar satisfactory evidence of the ownership of and the circumstances of the loss, destruction or theft of such Bond, (2) furnish such security or indemnity as may be required by the Registrar and the City to save them harmless, (3) pay all expenses and charges in connection therewith, including, but not limited to,pnntmg costs,legal fees,fees of the Registrar and any tax or other governmental charge that may be imposed, and (4) meet any other reasonable requirements of the City and the Registrar If,after the delivery of such replacement Bond,a bona fide purchaser of the onginal Bond in lieu of which such replacement Bond was issued presents for payment such original Bond,the City and the Registrar shall be entitled to recover such replacement Bond from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the City or the Registrar in connection therewith. If any such mutilated,lost,apparently destroyed or wrongfully taken Bond has become or is about to become due and payable, the City in its discretion may, instead of issuing a replacement Bond, authorize the Registrar to pay such Bond. Each replacement Bond delivered in accordance with this Section shall be entitled to the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such replacement Bond is delivered. 13 Cancellation of Bonds. All Bonds paid 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 canceled and destroyed upon the making of proper records regarding such payment. The Registrar shall furnish the City with appropriate certificates of destruction of such Bonds. 14 Book-Entry Only System. (a) The Initial Bond shall be registered in the name of the Underwriters. Except as provided in Section 15 hereof, all other Bonds shall be registered in the name of Cede&Co , as nominee of DTC (b) With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the City and the Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such DTC Participant holds an interest in the Bonds, except as provided in this Ordinance. Without limiting the immediately preceding sentence,the City and the Registrar shall have no responsibility or obligation with respect to (i)the accuracy of the records of DTC, Cede& Co or any DTC Participant with respect to any ownership interest in the Bonds, (ii)the delivery to any DTC Participant or any other person,other than an Owner,as shown on the Register, of any notice with respect to the Bonds,including any notice of redemption, or(iii)the payment to any DTC Participant or any other person, other than an Owner, as shown on the Register, of any amount with respect to principal of,premium,if any,or interest on the Bonds. Notwithstanding any other provision of this Ordinance to the contrary,the City and the Registrar shall be entitled to treat and consider the person in whose name each Bond is registered in the Register as the absolute Owner of such Bond for the purpose of payment of principal of and interest on the Bonds, for the purpose of givmg notices of redemption and other matters with respect to such Bond,for the purpose of registering transfer with respect to such Bond, and for all other purposes whatsoever The Registrar shall pay all principal of,premium, if any, and interest on the Bonds only to or upon the order of the respective Owners, as shown in the Register as provided in this Ordinance, or their respective attorneys duly authorized m writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payments of principal,premium,if any, and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner, as shown in the Register, shall receive a Bond certificate evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede &Co , and subject to the provisions of this Ordinance with respect to interest checks being mailed to the Owner of record as of the Record Date, the phrase "Cede & Co " in this Ordinance shall refer to such new nominee of DTC 15 Successor Securities Depository;Transfer Outside Book-Entry Only System. In the event that the City in its sole discretion, determines that the beneficial owners of the Bonds be able to obtain certificated Bonds,or m the event DTC discontinues the services described herein,the City shall(i) appoint a successor securities depository,qualified to act as such under Section 17(a)of the Securities and Exchange Act of 1934, as amended,notify DTC and DTC Participants, as identified by DTC, of the appointment of such successor securities depository and transfer one or more separate Bonds to such successor securities depository or(ii)notify DTC and DTC Participants, as identified by DTC, of the availability through DTC of Bonds and transfer one or more separate Bonds to DTC Participants having Bonds credited to their DTC accounts,as identified by DTC In such event,the Bonds shall no longer be restricted to being registered in the Register in the name of Cede & Co , as nominee of DTC, but may be registered in the name of the successor securities depository, or its nommee, or in whatever name or names Owners transfemng or exchanging Bonds shall designate, in accordance with the provisions of this Ordinance. 16 Payments to Cede&Co. Notwithstanding any other provision of this Ordinance to the contrary, so long as any Bonds are registered in the name of Cede&Co.,as nommee of DTC,all payments with respect to principal of,premium, if any, and interest on such Bonds, and all notices with respect to such Bonds, shall be made and given, respectively, m the manner provided in the Blanket Letter of Representations. 17 Optional and/or Mandatory Redemption, Defeasance. The Bonds are subject to optional and/or mandatory redemption as set forth m the Form of Bond in this Ordinance and in the Officer's Pricing Certificate. 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 maybe redeemed,but only in integral multiples of $5,000 Upon surrender of any Bond for redemption in part, the Registrar,in accordance with Section 11 hereof,shall authenticate and deliver in exchange therefor a Bond or Bonds of like maturity and interest rate in an aggregate principal amount equal to the unredeemed portion of the Bond so surrendered. Notice of any redemption identifying the Bonds to be redeemed in whole or in part shall be given by the Registrar at least thirty days prior to the date fixed for redemption by sending written notice by first class mail to the Owner of each Bond to be redeemed in whole or in part at the address shown on the Register Such notices shall state the redemption date,the redemption price, the place at which Bonds are to be surrendered for payment and,if less than all Bonds outstanding of a particular maturity are to be redeemed, the numbers of the Bonds or portions thereof of such maturity to be redeemed. Any notice given as provided m this Section shall be conclusively presumed to have been duly given,whether or not the Owner receives such notice. By the date fixed for redemption,due provision shall be made with the Registrar for payment of the redemption price of the Bonds or portions thereof to be redeemed, plus accrued interest to the date fixed for redemption. When Bonds have been called for redemption in whole or in part and due provision has been made to redeem same as herein provided,the Bonds or portions thereof so redeemed shall no longer be regarded as outstanding except for the purpose of receivmg payment solely from the funds so provided for redemption, and the rights of the Owners to collect interest which would otherwise accrue after the redemption date on any Bond or portion thereof called for redemption shall terminate on the date fixed for redemption. The City reserves the right to give notice of its election or direction to optionally redeem Bonds conditioned upon the occurrence of subsequent events. Such notice may state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption date or (ii) that the City retains the right to rescind such notice at any time prior to the scheduled redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar instructing the Paying Agent /Registrar to rescind the redemption notice, and such notice of redemption shall be of no effect if such moneys and/or authorized securities are no so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice of redemption to the affected owners. Any Bonds subject to conditional redemption where redemption has been rescinded shall remam Outstanding. The Bonds may be discharged, defeased, redeemed or refunded in any manner now or hereafter permitted by law 18 Forms. The form of the Bond, including the form of Registration Certificate of the Comptroller,which shall be attached or affixed to the Initial Bond,the form of Assignment and the form of the Registrar's Authentication Certificate, shall be, respectively, substantially as follows, with such additions,deletions and variations as may be necessary to conform to the terms specified in the Officer's Pricing Certificate: (a) Form of Bond. UNITED STATES OF AMERICA STATE OF TEXAS COUNTIES OF BRAZORIA, FORT BEND AND HARRIS REGISTERED REGISTERED NUMBER DENOMINATION CITY OF PEARLAND,TEXAS PERMANENT IMPROVEMENT 1 INTEREST RATE. MATURITY DATE. DATED DATE. CUSIP March 1, 20_ 1 REGISTERED OWNER. PRINCIPAL AMOUNT DOLLARS The City of Pearland,Texas (the"City")promises to pay to the registered owner identified above, or registered assigns,on the maturity date specified above,upon presentation and surrender of this Bond at the principal payment office of Wells Fargo Bank, N.A. (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 is legal tender for the payment of debts due the United States of Amenca, 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 1 , or the most recent interest payment date to which interest has been paid or duly provided for Interest on this Bond is payable by check on March 1 and September 1 beginning on 1 ,mailed to the registered owner of record as of the close of business on the 15th day of the month preceding each interest payment date THIS BOND is one of a duly authorized issue of Bonds, aggregating $ 2 (the "Bonds"),issued for the purpose of refunding a portion of the City's outstanding obligations,under and m strict conformity with the Constitution and laws of the State of Texas, particularly Chapter 1207 Texas Government Code, as amended, and pursuant to an ordinance adopted by the City Council (the"Ordinance"), which Ordinance is of record in the official minutes of the City THE CITY RESERVES THE RIGHT, at its option,to redeem Bonds matunng on and after March 1,20 3 , in whole or from time to time in part, m integral multiples of$5,000, on March 1, 20 4 , or any date thereafter at par plus accrued interest on the principal amounts called for redemption to the date fixed for redemption. If less than all the Bonds are to be redeemed,the City shall select the Bonds to be redeemed. [If applicable, mandatory redemption language] NOTICE OF ANY REDEMPTION shall be given by the Registrar at least thirty(30)days pnor to the date fixed for redemption by first class mail,addressed to the registered owners of each Bond to be redeemed in whole or in part at the address shown on the books of registration kept by the Registrar When Bonds or portions thereof have been called for redemption, and due provision has been made to redeem the same,the principal amounts so redeemed shall be payable solely from the funds provided for redemption,and interest which would otherwise accrue on the amounts called for redemption shall terminate on the date fixed for redemption. THIS BOND IS TRANSFERABLE only upon presentation and surrender at the principal payment office of the Registrar, duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or his authonzed representative, subject to the terms and conditions of the Ordinance. THE BONDS ARE EXCHANGEABLE at the principal payment 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. THIS BOND shall not be valid or obligatory for any purpose or be entitled to any benefit under the Ordinance unless this Bond is either(i)registered by the Comptroller of Public Accounts of the State of Texas by registration certificate attached or affixed hereto or(ii) authenticated by the Registrar by due execution of the authentication certificate endorsed hereon. THE REGISTERED OWNER of this Bond,by acceptance hereof,acknowledges and agrees to be bound by all the terms and conditions of the Ordinance. THE CITY has covenanted in the Ordinance that it will at all times provide a legally qualified registrar for the Bonds and will cause notice of any change of registrar to be mailed to each registered owner IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly issued and delivered,that all acts,conditions and things required or proper to be performed,to exist and to be done precedent to or in the issuance and delivery of this Bond have been performed, exist and have been done in accordance with law; and that annual ad valorem taxes, withm the limits prescribed by law,sufficient to provide for the payment of the mterest on and principal of this Bond, as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in the City, and have been pledged irrevocably for such payment. IN WITNESS WHEREOF,this Bond has been signed with the manual or facsimile signature of the Mayor and countersigned with the manual or facsimile signature of the City Secretary,and the official seal of the City has been duly impressed, or placed in facsimile, on this Bond. (AUTHENTICATION (SEAL) CITY OF PEARLAND, TEXAS CERTIFICATE) Mayor City Secretary (b) Form of Registration Certificate of Comptroller of Public Accounts. COMPTROLLER'S REGISTRATION CERTIFICATE. REGISTER NO I hereby certify that this Bond has been examined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller of Public Accounts of the State of Texas. WITNESS MY SIGNATURE AND SEAL this Comptroller of Public Accounts of the State of Texas (SEAL) (c) Form of Registrar's Authentication Certificate. AUTHENTICATION CERTIFICATE It is hereby certified that this Bond has been delivered pursuant to the Bond Ordinance described in the text of this Bond. Wells Fargo Bank,N.A. As Paying Agent/Registrar By Authorized Signature Date of Authentication (d) Form of Assignment. ASSIGNMENT For value received, the undersigned hereby sells, assigns, and transfers unto (Please print or type name, address, and zip code of Transferee) (Please insert Social Security or Taxpayer Identification Number of Transferee) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer said Bond on the books kept for registration thereof, with full power of substitution in the premises. DATED- Signature Guaranteed. Registered Owner NOTICE. The signature above must correspond to the name of the registered owner as shown on the face of this Bond in NOTICE. Signature must be guaranteed every particular, without any alteration, by a member firm of the New York Stock enlargement or change whatsoever Exchange or a commercial bank or trust company (e) The Imtial Bond shall be in the form set forth in paragraphs (a), (b) and (d) of this Section, except for the following alterations. (i) immediately under the name of the Bond,the headings"INTEREST RATE" and "MATURITY DATE" shall both be completed with the words "As Shown Below" and the word"CUSIP" deleted, (ii) in the first paragraph of the Bond, the words "on the maturity date specified above" and "at the rate shown above" shall be deleted and the following shall be inserted at the end of the first sentence " ., with such principal to be paid in installments on March 1 in each of the years and in the principal amounts identified in the following schedule and with such installments bearing mterest at the per annum rates set forth in the following schedule: [Information to be inserted from the Officer's Pncmg Certificate] (iii) the Initial Bond shall be numbered I-1 19 CUSIP Numbers. CUSIP numbers also may be printed on the Bonds,but errors or omissions in the printing of either the opinion or the numbers shall have no effect on the validity of the Bonds. 20 Debt Service Fund,Tax Levy There is hereby established a separate fund of the City to be known as the City of Pearland, Texas, Permanent Improvement Refunding Bonds 5 Debt Service Fund(the"Debt Service Fund"),which shall be kept separate and apart from all other funds of the City The proceeds from all taxes levied,assessed and collected for and on account of the Bonds authorized by this Ordinance shall be deposited,as collected,m the Debt Service Fund. While the Bonds or any part of the principal thereof or interest thereon remain outstanding and unpaid,there is hereby levied and there shall be annually assessed and collected in due time, form and manner, and at the same tune as other City taxes are assessed, levied and collected, in each year, a continuing direct annual ad valorem tax, within the limits prescribed by law,upon all taxable property in the City, sufficient to pay the current interest on the Bonds as the same becomes due and to provide and maintain a debt service fund of not less than two percent of the principal amount of the Bonds or the amount required to pay each installment of principal of the Bonds as the same matures,whichever is greater,full allowance being made for delinquencies and costs of collection, and said taxes are hereby irrevocably pledged to the payment of the interest on and principal of the Bonds and to no other purpose. To pay the debt service coming due on the Bonds prior to receipt of the taxes levied to pay such debt service, there is hereby appropriated from current funds on hand, which are hereby certified to be on hand and available for such purpose,an amount sufficient to pay such debt service, and such amount shall be used for no other purpose. 21 Application of Chapter 1208,Government Code. Chapter 1208,Government Code, applies to the issuance of the Bonds and the pledge of the taxes granted by the City under Section 20 of this Ordinance, and such pledge is therefore valid, effective and perfected. If Texas law is 5 Insert from Officers Pricing Certificate. amended at any time while the Bonds are outstanding an unpaid such that the pledge of the taxes granted by the City under Section 20 of this Ordinance is to be subject to the filing requirements of Chapter 9, Business & Commerce Code, then in order to preserve to the registered owners of the Bonds the perfection of the security interest m said pledge,the City agrees to take such measures as it determmes are reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9,Business&Commerce Code and enable a filing to perfect the security interest in said pledge to occur 22. Further Proceedings. After the Initial Bond has been executed,it shall be the duty of the Mayor and other appropriate officials and agents of the City to deliver the Imtial Bond and all pertinent records and proceedings to the Attorney General of the State of Texas,for examination and approval. After the Initial Bond has been approved by the Attorney General,it shall be delivered to the Comptroller for registration. Upon registration of the Imtial Bond, the Comptroller (or the Comptroller's bond clerk or an assistant bond clerk lawfully designated in writing to act for the Comptroller) shall manually sign the Comptroller's Registration Certificate prescribed herein and the seal of said Comptroller shall be impressed, or placed in facsimile,thereon. 23 Sale, Bond Purchase Agreement. The Bonds shall be sold and delivered to the Underwriter,who shall be designated in the Pricing Officer's Certificate,at the price set forth in the Pricing Officer's Certificate and in accordance with the terms of the Bond Purchase Contract which the Pricing Officer is hereby authorized and directed to execute on behalf of the District. The Pncmg Officer and all other officers,agents and representatives of the District are hereby authorized to do any and all things necessary or desirable to satisfy the conditions set out therein and to provide for the issuance and delivery of the Bonds. The Pricing Officer is hereby authorized and directed to execute the Bond Purchase Agreement on behalf of the City,and the Mayor,City Manager,Deputy City Manager, Director of Finance and all other officers, agents and representatives of the City are hereby authorized to do any and all things necessary or desirable to satisfy the conditions set out therein and to provide for the issuance and delivery of the Bonds. In the event the Bond Purchase Agreement shall not be executed by the one year anniversary of the date of this Ordinance (the `Expiration Date"),the delegation to the Pricing Officer pursuant to this Ordinance shall cease to be effective unless the City shall act to extend such delegation. Bonds sold pursuant to a Bond Purchase Agreement or winning bid form executed on or before the Expiration Date may be delivered after such date. 24 Federal Income Tax Exclusion. The City intends that the interest on the Bonds shall be excludable from gross income of the owners thereof for federal income tax purposes pursuant to Sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended, (the"Code") and all applicable temporary,proposed and final regulations(the"Regulations")and procedures promulgated thereunder and applicable to the Bonds. For this purpose, the City covenants that it will momtor and control the receipt, investment, expenditure and use of all gross proceeds of the Bonds (including all property, the acquisition, construction or improvement of which is to be financed directly or indirectly with the proceeds of the Bonds)and take or omit to take such other and further actions as may be required by Sections 103 and 141 through 150 of the Code and the Regulations to cause the interest on the Bonds to be and remain excludable from the gross income,as defined m Section 61 of the Code,of the owners of the Bonds for federal income tax purposes. Without limiting the generality of the foregoing, the City shall comply with each of the following covenants. (a) The City shall not use,permit the use of or omit to use Gross Proceeds or any other amounts(or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross Proceeds)in a manner which,if made or omitted,respectively,would cause the interest on any Bond to become includable in the gross income, as defined in Section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing,unless and until the City shall have received a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the exemption from federal income tax of the interest on any Bond,the City shall comply with each of the specific covenants in this Section. (b) Except as permitted by Section 141 of the Code and the regulations and rulings thereunder,the City shall, at all times prior to the last stated matunty of the Bonds, (1) exclusively own, operate, and possess all property the acquisition, construction, or improvement of which is to be financed directly or indirectly with Gross Proceeds of such senes of the Bonds (includmg property financed with Gross Proceeds of the Refunded Obligations or notes or bonds refunded by the Refunded Obligations and not use or permit the use of such Gross Proceeds or any property acquired, constructed, or improved with such Gross Proceeds in any activity carved on by any person or entity other than a state or local government,unless such use is solely as a member of the general public, or (2) not directly or indirectly impose or accept any charge or other payment for use of Gross Proceeds of such series of the Bonds or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with such Gross Proceeds(including property financed with Gross Proceeds of the Refunded Obligations or notes or bonds refunded by the Refunded Obligations other than taxes of general application and interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. (c) Except to the extent permitted by Section 141 of the Code and the regulations and rulings thereunder, the City shall not use Gross Proceeds of the Bonds to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant,Gross Proceeds are considered to be"loaned"to a person or entity if (1) property acquired, constructed or improved with Gross Proceeds (including property financed with Gross Proceeds of the Refunded Obligations or notes or bonds refunded by the Refunded Obligations is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes,(2)capacity m or service from such property is committed to such person or entity under a take-or-pay, output, or similar contract or arrangement, or(3)indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or such property are otherwise transferred in a transaction which is the economic equivalent of a loan. (d) Except to the extent permitted by Section 148 of the Code and the regulations and rulings thereunder,the City shall not,at any time prior to the earlier of the final stated maturity or final payment of the Refunded Obligations, directly or indirectly invest Gross Proceeds of such Bonds in any Investment (or use such Gross Proceeds to replace money so invested), if as a result of such investment the Yield of all Investments allocated to such Gross Proceeds whether then held or previously disposed of, exceeds the Yield on the Refunded Obligations. (e) Based on all of the facts and estimates now known or reasonably expected to be m existence on the date the Bonds are delivered, the City reasonably expects that the proceeds of the Bonds and the Refunded Obligations (to the extent any of such proceeds remain unexpended) will not be used in a manner that would cause the Bonds or the Refunded Obligations or any portion thereof to be "arbitrage bonds" within the meamng of Section 148 of the Code. (f) At all times while the Bonds are outstanding, the City will identify and properly account for all amounts constituting gross proceeds of the Bonds in accordance with the Regulations.The City will momtor the yield on the investments of the proceeds of the Bonds and, to the extent required by the Code and the Regulations, will restnct the yield on such investments to a yield which is not materially higher than the yield on the Bonds. To the extent necessary to prevent the Bonds from constituting "arbitrage bonds," the City will make such payments as are necessary to cause the yield on all yield restricted nonpurpose investments allocable to the Bonds to be less than the yield that is materially higher than the yield on the Bonds. (g) The City will not take any action or knowingly omit to take any action, if taken or omitted,would cause the Bonds to be treated as"federally guaranteed"obligations for purposes of Section 149(b) of the Code. (h) The City represents that not more than fifty percent(50%)of the proceeds of any new money portion of the Bonds or any new money issue refunded by, the Refunded Bonds was invested in nonpurpose investments(as defined in Section 148(f)(b)(A)of the Code) having a substantially guaranteed yield for four years or more within the meamng of Section 149(g)(3)(A)(ii)of the Code,and the City reasonably expected at the time each issue of the Refunded Bonds was issued that at least eighty-five percent (85%)of the spendable proceeds of the Bonds or the Refunded Bonds would be used to carry out the governmental purpose of such Bonds within the correspondmg three- year period beginning on the respective dates of the Bonds or the Refunded Bonds. (i) The City will take all necessary steps to comply with the requirement that certain amounts earned by the City on the investment of the gross proceeds of the Bonds, if any, be rebated to the federal government. Specifically, the City will (i) mamtain records regarding the receipt,investment and expenditure of the gross proceeds of the Bonds as may be required to calculate such excess arbitrage profits separately from records of amounts on deposit in the funds and accounts of the City allocable to other obligations of the City or moneys which do not represent gross proceeds of any obligations of the City and retain such records for at least six years after the day on which the last outstanding Bond is discharged, (ii) account for all gross proceeds under a reasonable, consistently applied method of accounting, not employed as an artifice or device to avoid,in whole or in part,the requirements of Section 148 of the Code, including any specified method of accounting required by applicable Regulations to be used for all or a portion of the gross proceeds,(iii)calculate,at such times as are required by applicable Regulations, the amount of excess arbitrage profits,if any,earned from the investment of the gross proceeds of the Bonds and(iv) timely pay,as required by applicable Regulations, all amounts required to be rebated to the federal government. In addition,the City will exercise reasonable diligence to assure that no errors are made m the calculations required by the preceding sentence and, if such an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter,including payment to the federal government of any delinquent amounts owed to it, including interest thereon and penalty (j) 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 entenng into any investment arrangement with respect to the gross proceeds of the Bonds that might result m a reduction in the amount required to be paid to the federal government because such arrangement results in smaller profit or a larger loss than would have resulted if such arrangement had been at arm's length and had the yield on the issue not been relevant to either party (k) The City will timely file or cause to be filed with the Secretary of the Treasury of the United States the information required by Section 149(e)of the Code with respect to the Bonds on such form and in such place as the Secretary may prescribe. (1) The City will not issue or use the Bonds as part of an"abusive arbitrage device" (as defined in Section 1 148 10(a) of the Regulations) Without limiting the foregoing, the Bonds are not and will not be a part of a transaction or series of transactions that attempts to circumvent the provisions of Section 148 of the Code and the Regulations, by (i) enabling the City to exploit the difference between tax exempt and taxable interest rates to gain a matenal financial advantage, or(ii) increasing the burden on the market for tax-exempt obligations. (m) Proper officers of the City charged with the responsibility for issuing the Bonds are hereby directed to make, execute and deliver certifications as to facts, estimates or circumstances in existence as of the Issue Date and stating whether there are facts, estimates or circumstances that would matenally change the City's expectations. On or after the Issue Date, the City will take such actions as are necessary and appropnate to assure the contmuous accuracy of the representations contained m such certificates. (n) The covenants and representations made or required by this Section are for the benefit of the Bond holders and any subsequent Bond holder,and may be relied upon by the Bond holder and any subsequent Bond holder and bond counsel to the City In complying with the foregoing covenants,the City may rely upon an unqualified opinion issued to the City by nationally recognized bond counsel that any action by the City or reliance upon any interpretation of the Code or Regulations contained in such opinion will not cause interest on the Bonds to be includable in gross income for federal income tax purposes under existing law Notwithstanding any other provision of this Ordinance, the City's representations and obligations under the covenants and provisions of this Section 7 5 shall survive the defeasance and discharge of the Bonds for as long as such matters are relevant to the exclusion of interest on the Bonds from the gross income of the owners for federal income tax purposes. 25 Use of Proceeds. Proceeds from the sale of the Bonds shall,promptly upon receipt by the City,be applied as follows. (a) Accrued interest m the amount of$ 6 and,if necessary,net premium on the Bonds in the amount of$ 7 , shall be deposited into the Debt Service Fund. (b) Premium in the amount of$ 8 shall be used to pay the underwriter's discount. (c) Net premium m the amount of$ 9 shall be used to pay the costs of issuance. (d) Bond proceeds in the amount of$ shall be used for the purposes described in Section 3(i) (d) The remaining proceeds from the sale of the Bonds, together with other available funds of the City(in the amount of$ 10 ),shall be applied to establish an escrow fund to refund the Refunded Bonds or a deposit with the paying agent for the Refunded Bonds, as more fully provided in Section 26 below, and, to the extent not otherwise provided for,to pay all expenses ansmg m connection with the issuance of the Bonds, the establishment of such escrow fund and the refunding of the Refunded Bonds. 6 Insert from Officer's Pricing Certificate. 7 Insert from Officer's Pricing Certificate. 8 Insert from Officer's Pricing Certificate. 9 Insert from Officer's Pricing Certificate. 1°Insert from Officers Pricing Certificate. (e) Any proceeds of the Bonds remaining after making all such deposits and payments shall be deposited into the Debt Service Fund. 26 Escrow Agreement/Deposit with Paying Agent for Refunding Bonds. The discharge and defeasance of the Refunded Bonds shall be effectuated pursuant to the terms and provisions of an Escrow Agreement to be entered into by and between the City and the Escrow Agent or pursuant to a deposit of funds with the paying agent for the Refunded Bonds.The terms and provisions of an Escrow Agreement or other deposit agreement, if needed, are hereby approved, subject to such insertions,additions and modifications as shall be necessary to carry out the terms of this Ordinance and the Pncmg Certificate. The mathematical accuracy of the terms of the refunding shall be certified to by Grant Thornton,LLP Certified Public Accountants or by a certificate of sufficiency of deposit executed by the City's financial advisor or the paying agent for the Refunded Bonds, and the Mayor or Mayor Pro Tern is hereby authorized to execute and deliver such Escrow Agreement on behalf of the City in multiple counterparts and the City Secretary or an Assistant City Secretary is hereby authorized to attest thereto and affix the City's seal. 27 Redemption of Refunded Bonds. The City has irrevocably exercised its option to call the bonds of the City for redemption prior to maturity on the dates and at the prices shown on Exhibit B to the Officer's Pricing Certificate,and authonzed and directed notice of such redemption to be given in accordance with the ordinances authorizing the issuance of such bonds. 28 Purchase of Escrowed Securities. If an Escrow Agreement is utilized,to assure the purchase of the Escrowed Secunties referred to in the Escrow Agreement, if required, the Pricing Officer is hereby authorized to subscribe for,agree to purchase,and purchase obligations which are authorized investments for escrow accounts pursuant to Section 1207 062,Texas Government Code, in such amounts and maturities and bearing interest at such rates as may be provided for in the Report, and to execute any and all subscriptions, purchase agreements, commitments, letters of authorization and other documents necessary to effectuate the foregoing,and any actions heretofore taken for such purpose are hereby ratified and approved. 29 Continuing Disclosure Undertaking. (a) Annual Reports. The City will provide certain updated financial information and operating data to the MSRB annually in an electronic format as prescribed by the MSRB and available via the Electronic Municipal Market Access ("EMMA") system at www emma.msrb org. Unless provided for m the Pricing Certificate, the information to be updated includes all quantitative financial information and operating data with respect to the City of the general type included in the final Official Statement authorized by Section 31 of this Ordinance in Tables 1-3 and 5-13 and in APPENDIX "B " The City will update and provide this information within six months after the end of each fiscal year If the City changes its fiscal year, it will submit a notice of such change to the MSRB, and the date of the new fiscal year end prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. The financial information and operating data to be provided may be set forth in full in one or more documents or may be included by specific reference to any document available to the public on the MSRB's Internet Web site or filed with the SEC, as permitted by the SEC Rule. The updated information will include audited financial statements, if the City commissions an audit and it is completed by the required time. If audited financial statements are not available by the required time,the City will provide unaudited financial statements by the required time and audited financial statements when and if such audited statements become available. Any such financial statements will be prepared in accordance with the accounting principals described in APPENDIX B or such other accounting principals as the City may require to employ from time to time pursuant to State law or regulation. (b) Material Event Notices. The City shall notify the MSRB in an electronic format prescribed by the MSRB, in a timely manner(not m excess of ten(10)days after the occurrence of the event), of any of the following events with respect to the Bonds. (i) Principal and interest payment delinquencies, (ii) Non-payment related defaults, if material, (iii) Unscheduled draws on debt service reserves reflecting financial difficulties, (iv) Unscheduled draws on credit enhancements reflecting financial difficulties, (v) Substitution of credit or liquidity providers or their failure to perform, (vi) Adverse tax opinions,the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other matenal events affecting the tax status of the Bonds, (vii) Modifications to rights of holders of the Bonds, if matenal, (viii) Bond calls, if material, and tender offers, (ix) Defeasances, (x) Release, substitution, or sale of property securing repayment of the Bonds, if matenal, (xi) Rating changes, (xii) Bankruptcy, insolvency, receivership or similar event of the City; (xii) The consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material, and (xiv) Appointment of a successor Paying Agent/Registrar or change in the name of the Paying Agent/Registrar, if material. For the purposes, any event described in the immediate proceeding paragraph (12) is considered to occur when any of the following occur the appointment of a receiver, fiscal agent or similar officer for the City in a proceeding Under States Bankruptcy Code or any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority,or the entry of order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City The City shall notify the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance this Section by the time required by such Section. (c) Limitations,Disclaimers, and Amendments. The City shall be obligated to observe and perform the covenants specified in this Section for so long as,but only for so long as,the City remains an"obligated person"with respect to the Bonds within the meaning of the Rule,except that the City in any event will give notice of any deposit made in accordance with Texas law that causes Bonds no longer to be outstanding. The provisions of this Section are for the sole benefit of the holders and the beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information,operating data,financial statements,and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided m accordance with this Section or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON,IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE UNLIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. No default by the City in observing or performing its obligations under this Section shall compnse a breach of or default under this Order for purposes of any other provision of this Order Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. The provisions of this Section may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements,a change in law,or a change in the identity,nature, or status or type of principal payment of the City, if(1)the agreement, as so amended, would have permitted an underwriter to purchase or sell Bonds in the imtial primary offering in compliance with the Rule,taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and(2) either(a)the holders of a majority m aggregate amount of the outstanding Bonds consent to such amendment or -23- (b)a person unaffiliated with the City(such as nationally recognized bond counsel)determines that the amendment will not materially impair the interests of the holders and beneficial owners of the Bonds. The City may also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule are invalid,but only if and to the extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing or selling Bonds in the primary offering of the Bonds. If any such amendment is made, the City will include in its next annual update an explanation in narrative form of the reasons for the change and its impact on the type of operating data or financial information being provided. 30 Related Matters. To satisfy in a timely manner all of the City's obligations under this Ordinance, the Bond Purchase Agreement, and the Escrow Agreement, the Mayor or Mayor Pro Tern,the City Secretary or an Assistant City Secretary,the City Manager,the Deputy City Manager and all other appropriate officers and agents of the City are hereby authorized and directed to take all other actions that are reasonably necessary to provide for the refunding of the Refunded Bonds, including, without limitation, executing and delivering on behalf of the City all certificates, consents, receipts, requests, and other documents as may be reasonably necessary to satisfy the City's obligations under the Escrow Agreement,the Bond Purchase Agreement,and this Ordinance and to direct the application of funds of the City consistent with the provisions of the Escrow Agreement and this Ordinance. 31 Power to Revise Form of Documents. Notwithstanding any other provision of this Ordinance, the Pricing Officer is hereby authonzed to make or approve such revisions, additions, deletions, and variations to this Ordinance and in the form of the documents attached hereto as exhibits as, in the judgment of the Pricing Officer, and in the opinion of Bond Counsel to the City, may be necessary or convenient to carry out or assist in carrying out the purposes of this Ordinance, the Preliminary Official Statement,the final Official Statement, or as may be required for approval of the Bonds by the Attorney General of Texas, provided, however, that any changes to such documents resulting in substantive amendments to the terms and conditions of the Bonds or such documents shall be subject to the prior approval of the Board. 32. Amendments. The City may amend this Ordinance without the consent of or notice to any Owner in any manner not detrimental to the interests of the Owners, including the curing of any ambiguity, inconsistency, or formal defect or omission therein. In addition,the City may with the written consent of the holders of a majority of the aggregate principal amount of the Bonds then outstanding affected thereby, amend, add to, or rescind any of the provisions of the Ordinance; except that,without the consent of the Owners of the Bonds affected,no such amendment, addition or rescission may(i)make any change m the maturity of any of the outstandmg Bonds, (ii)reduce the rate of interest borne by any of the outstandmg Bonds,(iii)reduce the amount of the principal of or redemption premium, if any, payable on any outstanding Bonds, (iv) modify the terms of payment of principal or of interest or redemption premium on outstanding Bonds or any of them or impose any condition with respect to such payment; or(v) change the minimum percentage of the principal amount of the Bonds necessary for consent to such amendment. 33 Official Statement. The City Council hereby approves the form and content of the Preliminary Official Statement prepared for the initial offering and sale of the Bonds and hereby authonzes the preparation of a final Official Statement reflecting the terms of the Bond Purchase Agreement and other relevant matters. The use of such Official Statement m the reoffenng of the Bonds by the Underwriter is hereby approved and authonzed. 34 Opinion and Engagement of Bond Counsel.The approving legal opinion of Andrews Kurth Kenyon LLP,Houston,Texas may be printed on the Bonds over the certification of the City Secretary,which may be executed in facsimile.The engagement of Andrews Kurth Kenyon LLP as bond counsel in connection with the issuance, sale and delivery of the Bonds is hereby approved, ratified and confirmed. 35 Registrar The form of agreement setting forth the duties of the Registrar is hereby approved,and the appropriate officials of the City are hereby authorized to execute such agreement for and on behalf of the City 36 No Personal Liability No recourse shall be had for payment of the principal of or interest on any Bonds or for any claim based thereon, or on this Ordinance, against any official or employee of the City or any person executing any Bonds. 37 Open Meeting. The meeting at which this Ordinance is adopted was open to the public,and public notice of the time,place and purpose of said meeting was given,all as required by the Texas Open Meetings Act; and such notice as given is hereby authonzed,approved,adopted and ratified. First Reading on the 24th day of October 2016 PASSED AND APPROVED on the Second And Final Reading on this 14th day of November 2016. Mayor City of Pearland, Texas ATTEST Q • c�RLgy� r> , t Secre =` of P and, Texas % (SEAL) EXHIBIT A ALL THE CITY'S OUTSTANDING OBLIGATIONS (including but not limited to the following below) Water and Sewer System Adjustable Rate Revenue Bonds, Senes 1999 Waterworks and Sewer System Revenue and Refunding Bonds, Series 2006 Certificates of Obligation, Series 2007 Waterworks and Sewer System Combined Unlimited Tax and Revenue Bonds, Senes 2007 (Brazona County MUD No 1) Water and Sewer System Revenue Bonds, Senes 2007 Permanent Improvement and Refunding Bonds, Series 2007 Certificates of Obligation, Series 2008 Permanent Improvement Bonds, Series 2008 Water and Sewer System Revenue Bonds, Serves 2008 Certificates of Obligation, Series 2009 Permanent Improvement and Refunding Bonds, Series 2009 Water and Sewer System Revenue Bonds, Series 2009 Certificates of Obligation, Series 2009A Permanent Improvement Bonds, Series 2010A Water and Sewer System Revenue Bonds, Series 2010A Permanent Improvement Refunding Bonds, Series 2010B Water and Sewer System Revenue Refunding Bonds, Series 2010B Certificates of Obligation, Series 2011 Unlimited Tax Bonds, Series 2011 (Brazona County MUD No 4) Permanent Improvement Bonds, Series 2011 Water and Sewer System Revenue and Refunding Bonds, Series 2012 Permanent Improvement Refunding Bonds, Series 2012 Permanent Improvement Bonds, Series 2013 Certificates of Obligation, Series 2013 Certificates of Obligation, Series 2014 Permanent Improvement&Refunding Bonds, Series 2014 Water and Sewer System Revenue Bonds, Series 2014 Permanent Improvement Refunding Bonds, Series 2015 Permanent Improvement Bonds, Series 2015 Certificates of Obligation, Series 2015 Permanent Improvement Refunding Bonds, Series 2015-A Certificates of Obligation, Series 2016 Permanent Improvement and Refundmg Bonds, Senes 2016A Water and Sewer System Revenue Bonds, Senes 2016A Water and Sewer System Revenue Bonds, Senes 2016B Water and Sewer System Revenue Bonds, Senes 2016C j 14- • .F.1 r\LL- " - , City of Pearland, Texas Overview of Schedule of Events and Plan of Finance for: $41,235,000* Permanent Improvement Refunding Bonds, Series 2016B Monday, October 24, 2016 * Preliminary, subject to change. Securities,insurance and advisory services offered through BOKK Financial Securities,Inc.,member.FINRA/SIPC;and a subsidiary of BOK Financial Corporation.Services may be offered under our trade name, BOK Financial Advisors. NOT FDIC INSURED I NO BANK GUARANTEE I MAY LOSE VALUE City of Pearland, Texas Current Market Conditions Bond Buyer Index of 20 Municipal Bonds and 25 Municipal Bonds January 2000 to Present 6.50% - 1 -BBI 20 General Obligation Debt 6.00% -BBI25 Revenue Debt IV\5.50% "1 V` 5.00% i 11, . 14/%11\I i \t i i 4.50% W � N n, )j±::\.:11AA 4.00% - %j'il I� . Bond Buyer Index of 20 Muni. General Obligation Bonds �J 1 3.53 /o 330% High 6.06%/ Low 2.80% /Average 4 47% ill Bond Buyer Index of 25 Muni.Revenue Bonds 3.28% 3.00% High 6.48% / Low 2.98%/Average 4 99% 2.50% I i 000 oo~ Ool' O'o oot% o4 oo4° oo\ oOb oe o10 oN~ oNI' oti� o't�` oti' o�� oti^ ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti The BBI 20 is published every Thursday The rate consists of general obligation bonds maturing in 20 years with an average rating equivalent to Moody's "Aa2" and S&P's "AA."The BBI 25 is also published every Thursday The rate consists of revenue bonds maturing in 30 years with an average rating equivalent to Moody's "Al" and S&P's"A+" r 1 t¢`_ tH, ii _motes' City of Pearland, Texas Nabzif Summary of Bonds to be Refunded The City has an opportunity to refund a portion of its outstanding General Obligation Bonds at a lower interest rate and receive interest cost savings. The refunding is for interest cost savings and is not a restructuring of the City's existing debt. Maturity Principal Interest Call Series Date Amount* Rate(a) Date/Price Permanent Improvement and Refunding 3/1/2018 $2,220,000 5.000% 3/01/2017 @ 100 Bonds,Series 2007 3/1/2019 2,220,000 5.000% 3/01/2017 @ 100 3/1/2020 3,005,000 4.500% 3/01/2017 @ 100 3/1/2021 3,125,000 4.500% 3/01/2017@ 100 3/1/2022 3,250,000 4.500% 3/01/2017 @ 100 3/1/2023 2,900,000 4.500% 3/01/2017 @ 100 3/1/2024 3,030,000 4.500% 3/01/2017 @ 100 3/1/2025 2,220,000 4.375% 3/01/2017 @ 100 3/1/2026 2,225,000 4.375% 3/01/2017 @ 100 3/1/2027 2,320,000 4 750% 3/01/2017 @ 100 3/1/2028 1,325,000 4 750% 3/01/2017 @ 100 3/1/2029 1,370,000 4 750% 3/01/2017 @ 100 3/1/2030 1,500,000 4 750% 3/01/2017 @ 100 3/1/2031 1,515,000 4 750% 3/01/2017 @ 100 Certificates of Obligation, 3/1/2018 1,005,000 5.250% 3/01/2017 @ 100 Series 2007 3/1/2027 1,580,000 3.250% 3/01/2017 @ 100 3/1/2028 1,660,000 3.250% 3/01/2017 @ 100 Permanent Improvement Bonds, 3/1/2019 405,000 5.000% 3/01/2018 @ 100 Series 2008 3/1/2031 4,705,000 4.625% 3/01/2018 @ 100 3/1/2032 4,785,000 4.625% 3/01/2018 @ 100 Totals $46,365,000 * Preliminary,subject to change. (a) Interest estimated at current market rates. 2 9i City of Pearland, Texas • Estimated Sour ces and Uses of Funds City of Pearland, Texas $41,235,000* Permanent Improvement Refunding Bonds, Series 2016A Principal Amount of the Bonds $41,235,000 * Plus Net Premium. 6,658,636 * Less. Expenses (418,808) * Underwriters' Discount 233,808 Rating Agencies 55,000 Bond Counsel 50,000 Financial Advisor 52,500 Attorney General Fee 9,500 Printing/Distribution 3,500 Miscellaneous 4,000 Paying Agent/Trustee 7,000 Verification Agent 3,500 Plus City Contribution. 292,285 Total Proceeds. $47,767,114 Estimated "All Cost" True Interest Rate (a) 2.878% * Average Life 9 476 Years Total Bonds Refunded. $46,365,000 * Average Rate on the Refunded Bonds. 4 496% Total Debt Service Savings (a) $4,715,416 * Present Value Savings 4,224,556 * PV Savings Percentage 9 112% * Opportunity Cost of Advance Refunding ("Negative Arbitrage") $338,906 * Preliminary,subject to change. (a) Includes estimated transaction costs. 3 lisoppla City of Pearland, Texas liwor Estimated Debt Service Requirements Less Debt Plus The Series 2016B Total Fiscal Year Current Total Service on the Refunding Bonds Debt Estimated Ending(9/30) Debt Service Refunded Bonds* Principal* Interest(a) Service Savings (b) 2017 $28,746,322 $2,104,069 $425,000 $1,535,688 $28,602,941 2018 28,441,004 5,247,188 2,890,000 2,041,583 28,125,400 $315,605 2019 28,369,549 4,499,681 2,275,000 1,912,458 28,057,326 312,223 2020 28,256,775 4,7464'1i1 2,645,000 1,789,463 27,944,794 311,981 2021 28,173,223 4,728,519 2,760,000 1,654,333 27,859,038 314,186 2022 28,038,263 4,710,081 2,880,000 1,513,333 27,721,514 316,748 2023 27,923,795 4,221,706 2,530,000 1,378,083 27,610,172 313,623 2024 28,747,925 4,218,281 2,655,000 1,248,458 28,433,102 314,823 2025 28,638,381 3,291,544 1,840,000 1,136,083 28,322,921 315,461 2026 26,879,693 3,199,309 1,840,000 1,044,083 26,564,467 315,226 2027 26,748,678 4,744,863 3,520,000 910,083 26,433,898 314,780 2028 26,621,593 3,690,644 2,620,000 756,583 26,307,532 314,061 2029 26,507,210 1,984,663 1,005,000 665,958 26,193,506 313,705 2030 17,945,127 2,046,500 1,120,000 612,833 17,631,460 313,667 2031 17,828,308 6,586,091 5,830,000 439,083 17,511,301 317,008 2032 17,745,515 4,895,653 4,400,000 183,333 17,433,195 312,320 2033 6,937,275 6,937,275 2034 6,824,384 6,824,384 2035 4,066,597 4,066,597 2036 2,560,672 2,560,672 2037 663,938 663,938 2038 654,800 654,800 Totals $437,319,027 $64,915,234 $41,235,000 $18,821,438 $432,460,230 $4,715,416 * Preliminary,subject to change. (a) Interest estimated at current market rates. (b) Includes estimated transaction costs and any necessary debt service fund transfers. 4 { VrCato-44. City of Pearland, Texas 15 Tentative Schedule of Events $58,080,000* October - 2016 Permanent Improvement Refunding Bonds, Series 2016B SMTWTFS Date Action Role ��• fl Friday, October 7th First Draft of Prelimmary Official Statement (POS) BOKFS ©© 4 ©008 El10 m®m 14 m Monday, October 10th Council Meeting—Presentation and Review BOKFS, City, AK mm18 m 20 EE Plan of Finance and Schedule of Events E 24 E®m 28 ® Monday, October 17th Second Draft of POS BOKFS, AK, City November - 2016 Monday, October 24th Council Meeting-First Reading of Parameter BOKFS, City, AK SMTWTFS Order for the Bonds 30 ®m©© 4 © Monday, October 31st Final Draft of POS BOKFS, AK, City, UW nu8Q10min m 14 ®mm 18 E Week of October 31st Rating Agency Calls BOKFS, City 20 EEE 24 ®® Monday,November 14th Council Meetmg- Second Reading of Parameter BOKFS, City, AK 28 ® 30 MEM Order for the Bonds/Adopt Parameter Order December - 2016 Tuesday,November 15th Print and Distribute Final POS BOKFS,UW SMTWTFS Week of November 28th Pricing of the Permanent Improvement BOKFS, AK, City, UW Refunding Bonds, Series 2016A 4 arm 8 Q 10 mpqm 14 ®mm Tuesday, December 27th Bond Closing BOKFS,AK, City, UW 18 m 20 Emig 24 PARTICIPANTS Kam 28 ® 30 m City- City of Pearland, Texas BOKFS-BOK Financial Securities, Inc AK-Andrews Kurth LLP * Preliminary,subject to change. UW -Underwriters 5