The URL can be used to link to this page

Ord. 0601 09-12-90ORDINANCE NO. 601 ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF PEARLAND, TEXAS, REFUNDING BONDS, SERIES 1990; AUTHORIZING THE REDEMPTION PRIOR TO MATURITY OF CERTAIN OUTSTANDING BONDS; AUTHORIZING THE ADVANCE REFUNDING OF CERTAIN OUTSTANDING OBLIGATIONS AND THE EXECUTION AND DELIVERY OF AN ESCROW AGREEMENT AND THE SUBSCRIPTION FOR AND PURCHASE OF CERTAIN ESCROWED SECURITIES; AND DECLARING THAT AN IMMEDIATE PUBLIC EMERGENCY EXISTS BECAUSE THE PROCEEDS OF SUCH BONDS ARE NEEDED AS SOON AS POSSIBLE FOR THE PROTECTION OF LIFE, HEALTH, PROPERTY AND THE PUBLIC PEACE THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § CITY OF PEARLAND § WHEREAS, the City of Pearland, Texas (the "City") has heretofore issued its Refunding Bonds, Series 1985 (the "Outstanding Bonds"); and WHEREAS, the City desires to refund a portion of the Outstanding Bonds (the "Refunded Bonds"), in advance of their maturities; and WHEREAS, Article 717k, Vernon's Texas Civil Statutes, as amended, 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 maturities, and to accomplish such refunding by depositing directly with any paying agent for the Refunded Bonds 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 authorize the execution of an escrow agreement and provide for the deposit of proceeds of the refunding bonds, together with other funds, to pay the Refunded Bonds; and WHEREAS, the issuance of the refunding bonds herein authorized will result in increased debt service for the City of $7,115,768.05 and an increase in the present value of such debt service of $207,236.11, and the City believes that the issuance of such bonds is needed to restructure the City's debt to allow payment of such debt without increasing taxes; and WHEREAS, upon the issuance of the refunding bonds herein authorized and the deposit of funds referred to above, the Refunded The term "Comptroller" shall mean the Comptroller of Public Accounts of the State of Texas. The term "Current Interest Bonds" shall mean those Bonds maturing on March 1 in each of the years 2002 through 2007, issued in the principal amount of $6,415,000. The term "Escrow Agent" shall mean First City, Texas -Houston, N.A., Houston, Texas, and any successor in that capacity. The term "Escrow Agreement" shall mean the agreement between the City and the Escrow Agent relating to the escrow of funds to pay the Refunded Bonds. The term "Interest and Sinking Fund" shall mean the interest and sinking fund for payment of the Bonds established by the City in Section 19 of this Ordinance. The term "Interest Payment Date", when used in connection with any Current Interest Bond, shall mean March 1, 1991, and each September 1 and March 1 thereafter until maturity or prior redemption. The term "Issuance Date" shall mean the date on which the Bonds are delivered to and paid for by the Underwriter. The term "Maturity Amount" with respect to any Capital Appreciation Bond shall mean the amount payable to the Owner thereof at maturity, which shall include both principal and accrued interest. The term "Ordinance" as used herein and in the Bonds shall mean this ordinance authorizing the Bonds. The term "Owner" shall mean any person who shall be the registered owner of any outstanding Bond. The term "Paying Agent" shall mean the Registrar. The term "Record Date" shall mean, with respect to Current Interest Bonds, the close of business on the 15th day of the calendar month next preceding each Interest Payment Date. The term "Refunded Bonds" shall mean the City's Refunding Bonds, Series 1985, dated August 15, 1985, in the aggregate principal amount of $6,795,000, maturing on March 1 in the following years and amounts: 5. Initial Bonds; Numbers and Denominations. (a) The Current Interest Bonds shall be initially 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 Current Interest Bonds shall mature on March 1 in each of the years and in the amounts set out in such schedule. Current Interest Bonds delivered on transfer of or in exchange for other Current interest Bonds shall be numbered (with appropriate prefix) in order of their authentication by the Registrar, shall be in the denomination of $5,000 or integral multiples thereof, and shall mature on the same date and bear interest at the same rate as the Bond or Bonds in lieu of which they are delivered. CURRENT INTEREST BONDS Bond Principal Interest Number Year Amount Rate R-1 2002 $ 315,000 7.10% R-2 2003 390,000 7.15% R-3 2004 1,220,000 7.20% R-4 2005 1,315,000 7.25% R-5 2006 1,415,000 7.30% R-6 2007 1,760,000 7.35% (b) The Capital Appreciation Bonds shall be initially 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 Capital Appreciation Bonds shall mature on March 1 in each of the years and in the Maturity Amounts set out in such schedule. Capital Appreciation Bonds delivered on transfer of or in exchange for other Capital Appreciation Bonds shall be numbered (with appropriate prefix) in order of their authentication by the Registrar, shall be in the Maturity Amount of $5,000 or integral multiples thereof, and shall mature on the same date and bear interest at the same rate as the Bond or Bonds in lieu of which they are delivered. CAPITAL APPRECIATION BONDS Bond Principal Interest Maturity Number Year Amount Rate Amount CR-1 2008 $501,646.60 7.55% $1,820,000 CR-2 2009 447,745.20 7.60% 1,765,000 -5- be the next succeeding Business Day with the same force and effect as if made on the date payment was originally due. 10. 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 State of Texas or other entity duly qualified and legally authorized to act as Registrar for the Bonds. The City reserves the right to change the Registrar for the Bonds 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. 11. Special Record Date. If interest on any Current Interest 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 United States mail, first class, postage prepaid, not later than five (5) days prior to the Special Record Date, to each affected Owner of record as of the close of business on the day prior to the mailing of such notice. 12. 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 12 shall be valid and effectual and shall dis- charge 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 -7- wrongfully taken, the City, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall authorize and the Registrar shall authenticate and deliver a replacement Bond of like maturity, interest rate and principal amount or Maturity 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, printing 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 original Bond in lieu of which such replacement Bond was issued presents for payment such original Bond,, the City and the Registrar shall be entitled to recover such replacement Bond from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the City or the Registrar,in connection therewith. If any such mutilated, lost, 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 14 shall be entitled to the benefits and security of this -9- 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. 17. Forms. The form of the Bonds, including the form of the Registrar's Authentication Certificate, the form of Assignment, the form of legend regarding bond insurance, and the form of Registration Certificate of the Comptroller, which shall be attached or affixed to the Bonds initially issued, shall be, respectively, substantially as follows, with such additions, deletions and variations as may be necessary or desirable and not prohibited by this Ordinance: FORM OF CURRENT INTEREST BONDS United States of America State of Texas NUMBER DENOMINATION REGISTERED REGISTERED CITY OF PEARLAND, TEXAS REFUNDING BOND SERIES 1990 INTEREST RATE: MATURITY DATE: REGISTERED OWNER: PRINCIPAL AMOUNT: ISSUE DATE: CUSIP: October 1, 1990 DOLLARS The City of Pearland, Texas (the "City") promises to pay to the registered owner identified above, or registered assigns, on the date specified above, upon presentation and surrender of this Bond at the principal corporate trust office of First City, Texas - Houston, N.A., 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 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 October 1, 1990, 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 March 1, 1991, mailed to the registered owner of record as of -11- called for redemption, and due provision has been made to redeem the same, the amounts so redeemed shall be payable solely from the funds provided for redemption, and interest which would otherwise accrue on the amounts called for redemption shall terminate on the date fixed for redemption. 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 conditions of the Ordinance. THE CURRENT INTEREST 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. 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, within the limits prescribed by law, sufficient to provide for the payment of the interest on and principal of this Bond, as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in the City, and have been pledged irrevocably for such payment. -13- (AUTHENTICATION CERTIFICATE) (SEAL) CITY OF PEARLAND, TEXAS Mayor City Secretary (Back Panel of Bond) THIS BOND is one of a duly authorized issue of Bonds, aggregating $7,364,391.80 (the "Bonds"), issued for the purpose of refunding a portion of the City's outstanding Refunding Bonds, Series 1985, and pursuant to an ordinance adopted by the City Council on September 12, 1990 (the "Ordinance"). The Bonds are issued as (i) Bonds in the aggregate principal amount of $949,391.80 which pay interest only at maturity or prior redemption (the "Capital Appreciation Bonds") and (ii) Bonds in the aggregate principal amount of $6,415,000 which pay interest semiannually until maturity or prior redemption (the "Current Interest Bonds"). THE CITY RESERVES THE RIGHT, at its option, to redeem Bonds prior to their scheduled maturities, in whole or from time to time in part, in integral multiples of $5,000, on September 1, 2000, or any date thereafter, at a price of, with respect to Current Interest Bonds, par plus accrued interest to the date fixed for redemption and, with respect to CapitalAppreciationBonds, 103% of the Accreted Value on the date fixed for redemption. Reference is made to the Ordinance for complete details concerning the manner of redeeming Bonds. NOTICE OF ANY REDEMPTION shall be given at least thirty (30) days prior to the date fixed for redemption by first class mail, addressed to the registered owners of each Bond to be redeemed in whole or in part at the address shown on the books of registration kept by the Registrar. When Bonds or portions thereof have been called for redemption, and due provision has been made to redeem the same, the amounts so redeemed shall be payable solely from the funds provided for redemption, and interest which would otherwise accrue on the amounts called for redemption shall terminate on the date fixed for redemption. 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 conditions of the Ordinance. -15- TABLE OF ACCRETED VALUES The Accreted Value and principal amount (per $5,000 of Maturity Amount), together with the interest rate are as follows: MATURITY (MARCH 1) 2008 2009 PRINCIPAL AMOUNT $1,378.15 $1,268.40 INTEREST RATE 7.55% 7.60% October 11, 1990 1,378.15 1,268.40 March 1, 1991 1,418.46 1,305.77 September 1, 1991 1,472.01 1,355.38 March 1, 1992 1,527.57 1,406.89 September 1, 1992 1,585.24 1,460.35 March 1, 1993 1,645.08 1,515.84 September 1, 1993 1,707.18 1,573.45 March 1, 1994 1,771.63 1,633.24 September 1, 1994 1,838.51 1,695.30 March 1, 1995 1,907.91 1,759.72 September 1, 1995 1,979.94 1,826.59 March 1, 1996 2,054.68 1,896.00 September 1, 1996 2,132.24 1,968.05 March 1, 1997 2,212.74 2,042.84 September 1, 1997 2,296.27 2,120.46 March 1, 1998 2,382.95 2,201.04 September 1, 1998 2,472.91 2,284.68 March 1, 1999 2,566.26 2,371.50 September 1, 1999 2,663.14 2,461.62 March 1, 2000 2,763.67 2,555.16 September 1, 2000 2,868.00 2,652.25 March 1, 2001 2,976.27 2,753.04 September 1, 2001 3,088.62 2,857.65 March 1, 2002 3,205.21 2,966.25 September 1, 2002 3,326.21 3,078.96 March 1, 2003 3,451.78 3,195.96 September 1, 2003 3,582.08 3,317.41 March 1, 2004 3,717.30 3,443.47 September 1, 2004 3,857.63 3,574.32 March 1, 2005 4,003.26 3,710.15 September 1, 2005 4,154.38 3,851.13 March 1, 2006 4,311.21 3,997.48 September 1, 2006 4,473.96 4,149.38 March 1, 2007 4,642.85 4,307.06 September 1, 2007 4,818.12 4,470.72 March 1, 2008 5,000,00 4,640.61 September 1, 2008 4,816.96 March 1, 2009 5,000.00 -17- Form of Assianment 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: 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. Form of Bond Insurance Legend STATEMENT OF INSURANCE Financial Guaranty Insurance Company ("Financial Guaranty") has issued a policy containing the following provisions with respect to the City of Pearland, Texas Refunding Bonds, Series 1990 (the "Bonds"), such policy being on file at the principal office of the Registrar, as paying agent (the "Paying Agent"): Financial Guaranty hereby unconditionally and irrevocably agrees to pay for disbursement to the Bondholders that portion of the principal (or the Accreted Value in the case of Capital Appreciation Bonds) of and interest on the Bonds which is then due for payment and which the issuer of the Bonds (the "Issuer") shall have failed to provide. Due for payment means, with respect to the principal (or the Accreted Value in the Case of Capital Appreciation Bonds), the stated maturity date thereof, or the date on which the same shall have been duly called for mandatory sinking fund redemption, but not any earlier date on which the payment of principal (or the Accreted Value in the case of Capital -19- the City, sufficient to pay the current interest on the Bonds as the same becomes due and to provide and maintain a sinking fund of not less than two percent of the principal amount of the Bonds or the amount required to pay each installment of principal of the Bonds as the same matures, whichever is greater, full allowance being made for delinquencies and costs of collection, and said taxes are hereby irrevocably pledged to the payment of the interest on and principal of the Bonds and to no other purpose. To pay the interest, coming due on the Bonds on March 1, 1991, there is hereby appropriated from current funds, which are hereby certified to be on hand and available for such purpose, an amount sufficient to make such payment, and such amount shall be used for no other purpose. 20. Further Proceedings. After the Bonds to be initially issued shall have been executed, it shall be the duty of the Mayor and other appropriate officials and agents of the City to deliver the Bonds to be initially issued and all pertinent records and proceedings to the Attorney General of the State of Texas, for examination and approval. After the Bonds to be initially issued shall have been approved by the Attorney General, they shall be delivered to the Comptroller for registration. Upon registration of the Bonds to be initially issued, the Comptroller (or the Comp- troller'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. 21. Sale; Bond Purchase Agreement. The Bonds are hereby sold and shall be delivered to the Underwriter at a price of $7,231,832.75 plus accrued interest to the date of delivery, in accordance with the terms of a bond purchase agreement of even date herewith, presented to and hereby approved by the City Council, which price and terms are hereby found and determined to be the most advantageous reasonably obtainable by the City. The Mayor and other appropriate officials of the City are hereby authorized and directed to execute such bond purchase agreement on behalf of the City, and the Mayor and all other officers, agents and rep- resentatives 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. 22. Tax Exemption. (a) General Tax Covenant. The City intends that the interest on the Bonds shall be excludable from gross income for purposes of federal income taxation pursuant to sections 103 and 141 through 150 of the Code, and applicable regulations. The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that if -21- the use of such proceeds in the trade or business of one who is not a governmental unit; (ii) The City has not permitted and will not permit more than five percent of the Net Proceeds of the Refunded Bonds to be used in the trade or business of any person other than a governmen- tal unit if such use is unrelated to the governmental purpose of such Refunded Bonds. Further, the amount of private -use proceeds of the Refunded Bonds in excess of five percent of the Net Proceeds of the Refunded Bonds ("excess private -use proceeds") did not and will not exceed the proceeds of the Refunded Bonds expended for the governmental purpose of the Refunded Bonds to which such excess private -use proceeds relate; (iii) The City has not permitted and will not permit an amount of proceeds of the Refunded Bonds exceeding the lesser of (a) $5,000,000 or (b) five percent of the Net Proceeds of the Refunded Bonds to be used, directly or indi- rectly, to finance loans to persons other than governmental units. When used in this Section 22, and the Refunded Bonds shall each issue of the Bonds and including investment earnings accrued interest with respect the term Net Proceeds of the Bonds mean the proceeds from the sale of the Refunded Bonds, respectively, on the proceeds of such issue, less to such issue. (c) No Federal Guaranty. The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that, if taken or omitted, respectively, would cause the Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Code and applicable regulations thereunder, except as permitted by section 149(b)(3) of the Code and such regulations. (d) Bonds are not Hedge Bonds. The City covenants and agrees that not more than 50 percent of the proceeds of the Bonds will be invested in nonpurpose investments (as defined in section 148(f)(6)(A) of the Code) having a substantially guaranteed yield for four years or more within the meaning of section 149(g)(3)(A)(ii) of the Code, and the City reasonably expects that at least 85 percent of the spendable proceeds of the Bonds will be used to carry out the governmental purposes of the Bonds within the three-year period beginning on the date the Bonds are issued. -23- 23. 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 1990, 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 1990, including the Bonds, will not exceed $10,000,000. For purposes of this Section 23, 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 23, the City includes all governmental units which are aggregated with the City under the Code. 24. Selection of Refunded Bonds. The Escrow Agent is hereby designated as the City's agent to select bonds to be refunded and is hereby authorized and directed to select the particular bonds to be refunded by lot or by such other random method determined by the Escrow Agent, from each maturity in which the Refunded Bonds constitute less than all of the bonds of such maturity. The Escrow Agent is further authorized and directed to give and publish notices identifying the Refunded Bonds in the same manner and at the same times required for the redemption of bonds by the ordinance authorizing the issuance of the Refunded Bonds. 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 shall be deposited into the Interest and Sinking Fund. (b) The remaining proceeds from the sale of the Bonds shall be applied to establish an escrow fund to refund the Refunded Bonds, as more fully provided below, and, to the extent not otherwise provided for, to pay all expenses arising in connection with the issuance of the Bonds, the establishment of such escrow fund and the refunding of the Refunded Bonds. Any proceeds of the Bonds remaining after making all such deposits and payments shall be deposited into the Interest and Sinking Fund. 26. Escrow Agreement. 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 First City, Texas -Houston, N.A., Houston, Texas, as Escrow Agent, which shall be substantially in the form attached hereto as Exhibit A, the terms and provisions of which are hereby -25- 29. 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 Tem, the City Manager, the City Secretary or an Assistant City Secretary, 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 such Escrow Agreement and this Ordinance. 30. 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. 31. Official Statement. The City Council ratifies and confirms its prior approval of the form and content of the Preliminary Official Statement prepared in the initial offering and sale of the Bonds and hereby authorizes the preparation of a final Official Statement reflecting the terms of the bond purchase agreement with the Underwriter and other relevant matters. The use of such Official Statement in the reoffering of the Bonds by the Underwriter 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. 32. 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. 33. Onen Meeting. It is hereby officially found and determined that the meeting at which this Ordinance was adopted was open to the public, and that public notice of the time, place and purpose of said meeting was given, all as required by Article 6252-17, Vernon's Texas Civil Statutes, as amended. 34. Emergency. 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 exists, the specific emergency being that the proceeds of the Bonds are needed as soon as possible to restructure -27- EXHIBIT "A" ESCROW AGREEMENT THIS ESCROW AGREEMENT (the "Escrow Agreement") dated for convenience September 12, 1990, but effective on the Escrow Funding Date described herein, is made and entered into by and between the City of Pearland, Texas, an incorporated city of the State of Texas (the "City"), and First City, Texas -Houston, N.A., Houston, Texas (the "Escrow Agent"). WHEREAS, the City has heretofore issued and there remain outstanding the City's Refunding Bonds Series 1985, dated August 15, 1985; and WHEREAS, the City desires to refund in advance of maturity a portion of such bonds in the total aggregate principal amount of $6,795,000 (the "Refunded Bonds"); and WHEREAS, Article 717k, Vernon's Texas Civil Statues, as amended, authorizes and empowers the City to deposit the proceeds of refunding bonds payable from ad valorem taxes of the City, together with other available funds or resources, with any place of payment for the Refunded Bonds in an amount which is sufficient to provide for the payment or redemption of the principal of and interest on the Refunded Bonds; and WHEREAS, the City Council of the City has adopted an ordinance authorizing the issuance of the City's Refunding Bonds, Series 1990, in the aggregate principal amount of $7,364,391.80 (the "Refunding Bonds"), for the purpose of providing the funds necessary to refund the Refunded Bonds; and WHEREAS, the City Council of the City has further determined to effectuate the advance refunding of the Refunded Bonds pursuant to this Escrow Agreement, under which provision is made for the safekeeping, investment, reinvestment, administration and disposition of the proceeds of the Refunding Bonds, so as to provide firm banking and financial arrangements for the discharge and final payment or redemption of the Refunded Bonds; NOW, THEREFORE, in consideration of the mutual undertakings, promises and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to secure the full and timely payment of the principal of and the interest on the Refunded Bonds, the City and the Escrow Agent contract and agree as follows: 1991 $ 260,000 1992 565,000 1993 575,000 1994 525,000 1995 1,120,000 1996 1,190,000 1997 1,280,000 1998 415,000 1999 345,000 2000 295,000 2001 225,000 "Refunding Bonds" shall mean the City's Refunding Bonds, Series 1990, dated October 1, 1990, in the initial aggregate principal amount of $7,364,391.80. "Refunding Bond Ordinance" shall mean the City's Ordinance adopted September 12, 1990, authorizing the issuance, sale and delivery of the Refunding Bonds. "Report" shall mean the verification report prepared by KPMG Peat Marwick relating to the advance refunding of the Refunded Bonds, a copy of which is attached hereto as Exhibit A, and any subsequent report required by Section 4.02. Section 1.02. Interpretations. The titles and headings of the articles and sections of this Escrow Agreement have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict the terms hereof. This Escrow Agreement and all of the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to achieve the intended purpose of providing for the refunding of the Refunded Bonds in accordance with applicable law. ARTICLE II DEPOSIT OF FUNDS AND ESCROWED SECURITIES Section 2.01. Deposits with Escrow Agent; Acquisition of Escrowed Securities. On the Escrow Funding Date there will be deposited, with the Escrow Agent the following: (a) Escrowed Securities in the principal amount of S , purchased with proceeds of the Refunding Bonds; and (b) A beginning cash balance of $ -3- Bonds at the times and in the amounts required to pay the interest on the Refunded Bonds as such interest comes due and to pay the principal of the Refunded Bonds as the Refunded Bonds mature or are redeemed. Section 3.04. Escrow Fund. The Escrow Agent at all times shall hold the Escrow Fund, the Escrowed Securities and all other assets of the Escrow Fund wholly segregated from all other funds and securities on deposit with the Escrow Agent; it shall never allow the Escrowed Securities or any other assets of the Escrow Fund to be commingled with any other funds or securities of the Escrow Agent; and it shall hold and dispose of the assets of the Escrow Fund only as set forth herein. The Escrowed Securities and other assets of the Escrow Fund always shall be maintained by the Escrow Agent for the benefit of the holders of the Refunded Bonds; and a special account therefor evidencing such fact shall be maintained at all times on the books of the Escrow Agent. The holders of the Refunded Bonds shall be entitled to the same preferred claim and first lien upon the Escrowed Securities, the proceeds thereof and all other assets of the Escrow Fund as are enjoyed by other beneficiaries of similar accounts. The amounts received by the Escrow Agent under this Escrow Agreement shall not be considered as a banking deposit by the City, and the Escrow Agent shall have no right or title with respect thereto except as escrow agent under the terms hereof. The amounts received by the Escrow Agent hereunder shall not be subject to warrants, drafts or checks drawn by the City. Section 3.05. Security for Cash Balances. Cash balances from time to time on deposit in the Escrow Fund, to the extent not insured by the Federal Deposit Insurance Corporation or its successor, shall be continuously secured by a pledge of direct obligations of, or obligations unconditionally guaranteed by, the United States of America, held by an independent third party, and having a market value at least equal to such cash balances. ARTICLE IV REDEMPTION OF CERTAIN REFUNDED BONDS PRIOR TO MATURITY Section 4.01. Optional Redemption. The City has irrevocably exercised its option to call the Refunded Bonds described below for redemption prior to maturity on March 1, 1995, at a price of par plus accrued interest to the date fixed for redemption, as set forth below. Such optional redemption shall be carried out by the Paying Agent for the Refunded Bonds in accordance with the Refunded Bond Ordinance. The Escrow Agent is hereby authorized to provide funds therefor as set forth in Section 3.02(a) hereof. -5- allocations and application of the money and Escrowed Securities deposited to the Escrow Fund and all proceeds thereof, and such books shall be available for inspection at reasonable hours and under reasonable conditions by the City and the holders of the Refunded Bonds. Section 6.02. Reports. For the period beginning on the Escrow Funding Date and ending on March 1, 1991, and for each twelve (12) month period thereafter while this Agreement remains in effect, the Escrow Agent shall prepare and send to the City, at the City's request, within thirty (30) days following the end of such period a written report summarizing all transactions relating to the Escrow Fund during such period, including, without limitation, credits to the Escrow Fund as a result of interest payments on or maturities of the Escrowed Securities and transfers from the Escrow Fund to the Paying Agent for the Refunded Bonds or otherwise, together with a detailed statement of all Escrowed Securities and the cash balance on deposit in the Escrow Fund as of the end of such period. Section 6.03. Notification. The Escrow Agent shall notify the City immediately if at any time during the term of this agreement it determines that there is insufficient cash and Escrowed Securities in the Escrow Fund to provide for the transfer to the Paying Agents for the Refunded Bonds for timely payment of all interest on and principal of the Refunded Bonds. ARTICLE VII CONCERNING THE ESCROW AGENT Section 7.01. Representations. The Escrow Agent hereby represents that it has all necessary power and authority to enter into this Escrow Agreement and undertake the obligations and responsibilities imposed upon it herein, and that it will- carry out all of its obligations hereunder. Section 7.02. Limitation on Liability. The Escrow Agent shall not be liable for any action taken or neglected to be taken in good faith in the exercise of reasonable care and believed to be within the discretion or power conferred by this Escrow Agreement, nor shall it be responsible for the consequences of any error of judgment; and it shall not be answerable except for its own neglect or default, nor for any loss unless the same shall have been through its negligence or want of good faith. The liability of the Escrow Agent to transfer funds to the Paying Agent for the Refunded Bonds for the payments of the principal of and interest on the Refunded Bonds shall be limited to the proceeds of the Escrowed Securities and the cash balances -7- by the Escrow Agent in the administration of this Escrow Agreement, and for its services in its capacity as a Paying Agent for the Refunded Bonds, the sum of $ . If the Escrow Agent is requested to perform any extraordinary services hereunder, the City hereby agrees to pay reasonable fees to the Escrow Agent for such extraordinary services and to reimburse the Escrow Agent for all expenses incurred by the Escrow Agent in performing such extraordinary services. It is expressly provided that the Escrow Agent shall look only to the City for the payment of such additional fees and reimbursement of such additional expenses. The Escrow Agent hereby agrees that in no event shall it ever assert any claim or lien against the Escrow Fund for any fees for its services, whether regular, additional or extraordinary, as Escrow Agent, or in any other capacity, or for reimbursement for any of its expenses. Section 7.04. Successor Escrow Agents. If at any time the Escrow Agent or its legal successor or successors should cease to be the Escrow Agent hereunder, a vacancy shall forthwith exist hereunder in the office of the Escrow Agent. Any successor Escrow Agent appointed by the City shall succeed, without further act, to all the rights, immunities, powers and trusts of the predecessor Escrow Agent hereunder. Upon the request of any such successor Escrow Agent, the City shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor Escrow Agent all such immunities, rights, powers and duties. The Escrow Agent shall pay over to its successor Escrow Agent a proportional part of the Escrow Agent's fee hereunder equal to the portion of such fee attributable to duties to be performed after the date of succession. The Escrow Agent at the time acting hereunder may at any time resign and be discharged from the trust hereby created by giving not less than sixty (60) days written notice to the City and publishing notice thereof, specifying the date when such resignation will take effect, in a newspaper printed in the English language and with general circulation in New York, New York, such publication to be made at least once a week for three (3) consecutive calendar weeks prior to the date when the resignation is to take effect. No such resignation shall take effect unless a successor Escrow Agent shall have been appointed by the holders of the Refunded Bonds or by the City as herein provided and such successor Escrow Agent shall have accepted such appointment, in which event such resignation shall take effect immediately upon the appointment and acceptance of a successor Escrow Agent. -9- Section 8.05. Governing Law. This Escrow Agreement shall be governed exclusively by the provisions hereof and by the applicable laws of the State of Texas. Section 8.06. Time of Essence. Time shall be of the essence in the performance of obligations from time to time imposed upon the Escrow Agent by this Escrow Agreement. Executed as of September 12, 1990, but effective as set forth herein. CITY OF PEARLAND, TEXAS ATTEST: City Secretary (SEAL) FIRST CITY, TEXAS-HOUSTON, N.A. as Escrow Agent By: Title: ATTEST: By: Title: (SEAL) ARTICLE VIII MISCELLANEOUS Section 8.01. Notices. Any notice, authorization, request, or demand required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when mailed by registered or certified mail, postage prepaid addressed as follows: To the Escrow Agent: First City, Texas -Houston, N.A. P. O. Box 809 Houston, TX 77001 Attention: Corporate Trust Department To the City: City of Pearland P. O. Box 2068 Pearland, TX 77588-2068 Attention: Mayor The United States Post Office registered or certified mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date and fact of delivery. Any party hereto may change the address to which notices are to be delivered by giving to the other parties not less than ten days prior notice thereof. Section 8.02. Termination of Escrow Agent's Obligations. Upon the taking by the Escrow Agent of all the actions as described herein, the Escrow Agent shall have no further obligations or responsibilities hereunder to the City, the holders of the Refunded Bonds or to any other person or persons in connection with this Escrow Agreement. Section 8.03. Binding Agreement. This Escrow Agreement shall be binding upon the City, and the Escrow Agent and their respective successors and legal representatives, and shall inure solely to the benefit of the holders of the Refunded Bonds, the City, the Escrow Agent and their respective successors and legal representatives. Section 8.04. Severability. In case any one or more of the provisions contained in this Escrow Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Escrow Agreement, but this Escrow Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. from time to time on deposit in the Escrow Fund. Notwithstanding any provision contained herein to the contrary, the Escrow Agent shall have no liability whatsoever for the insufficiency of funds from time to time in the Escrow Fund or any failure of the obligor of the Escrowed Securities to make timely payment thereon, except for the obligation to notify the City promptly of any such occurrence. The recitals herein and in the proceedings authorizing the Refunding Bonds shall be taken as the statements of the City and shall not be considered as made by, or imposing any obligation or liability upon, the Escrow Agent. In its capacity as Escrow Agent, it is agreed that the Escrow Agent need look only to the terms and provisions of this Escrow Agreement. The Escrow Agent makes no representation as to the value, condition or sufficiency of the Escrow Fund, or any part thereof, or as to the title of the City thereto, or as to the security afforded thereby or hereby, and the Escrow Agent shall incur no liability or responsibility with respect to any of such matters. It is the intention of the City and the Escrow Agent that the Escrow Agent shall never be required to use or advance its own funds or otherwise incur personal financial liability in the performance of any of its duties or the exercise of any of its rights and powers hereunder. Unless it is specifically provided otherwise herein, the Escrow Agent has no duty to determine or inquire into the happening or occurrence of any event or contingency or the performance or failure of performance of the City with respect to arrangements or contracts with others, with the Escrow Agent's sole duty hereunder being to safeguard the Escrow Fund and to dispose of and deliver the same in accordance with this Escrow Agreement. If, however, the Escrow Agent is called upon by the terms of this Escrow Agreement to determine the occurrence of any event or contingency, the Escrow Agent shall be obligated, in making such determination, only to exercise reasonable care and diligence, and in event of error in making. such determination the Escrow Agent shall be liable only for its own misconduct or its negligence. In determining the occurrence of any such event or contingency the Escrow Agent may request from the City or any other person such reasonable additional evidence as the Escrow Agent in its discretion may deem necessary to determine any fact relating to the occurrence of such event or contingency, and in this connection may make inquiries of, and consult with the City, among others, at any time. Section 7.03. Compensation. (a) On the Escrow Funding Date the City will pay the Escrow Agent, as a fee for performing the services hereunder and for all expenses incurred or to be incurred Maturity Date March 1, 1996 March 1, 1997 March 1, 1998 March 1, 1999 March 1, 2000 March 1, 2001 ARTICLE V Amount Redeemed $1,190,000 1,280,000 415,000 345,000 295,000 225,000 LIMITATION ON INVESTMENTS Section 5.01. General. Except as herein otherwise expressly provided, the Escrow Agent shall not have any power or duty to invest any money held hereunder; or to make substitutions of the Escrowed Securities; or to sell, transfer or otherwise dispose of the Escrowed Securities. Section 5.02. Substitution of Securities. At the written request of the City, and upon compliance with the conditions hereinafter stated, the Escrow Agent shall sell, transfer, otherwise dispose of or request the redemption of all or any portion of the Escrowed Securities and apply the proceeds therefrom to purchase non -callable direct obligations of the United States of America and which do not permit the redemption thereof at the option of the obligor. Any such transaction may be effected by the Escrow Agent only if (1) the Escrow Agent shall have received a written opinion from a nationally recognized firm of certified public accountants acceptable to the City and the Escrow Agent that such transaction will not cause the amount of money and securities in the Escrow Fund to be reduced below an amount which will be sufficient, when added to the interest to accrue thereon, to provide for the payment of principal and interest on the remaining Refunded Bonds as they become due, and (2) the Escrow Agent shall have received the unqualified written legal opinion of nationally recognized bond counsel or tax counsel acceptable to the City and the Escrow Agent to the effect that (i) such transaction will not adversely affect the tax-exempt status of the Bonds or the Refunded Bonds, and (ii) that such transaction complies with the Constitution and laws of the State of Texas and with all relevant documents relating to the issuance of the Refunded Bonds and the Refunding Bonds. ARTICLE VI RECORDS AND REPORTS Section 6.01.. Records. The Escrow Agent shall keep books of record and account in which complete and correct entries shall be made of all transactions relating to the receipts, disbursements, -6- ARTICLE III CREATION AND OPERATION OF ESCROW FUND Section 3.01. Escrow Fund. On the Escrow Funding Date the Escrow Agent will create on its books a special fund and irrevocable escrow to be known as the City of Pearland, Texas, Refunding Bonds, Series 1990 Escrow Fund, into which will be deposited the Escrowed Securities described in Section 2.01. The Escrowed Securities, all proceeds therefrom and all cash balances from time to time on deposit in the Escrow Fund shall be the property of the Escrow Fund, and shall be applied only in strict conformity with the terms and conditions hereof. The Escrowed Securities, all proceeds therefrom and all cash balances from time to time on deposit in the Escrow Fund are hereby irrevocably pledged to the payment of the principal of and interest on the Refunded Bonds, which payment shall be made by timely transfers to the Paying Agent for the Refunded Bonds of such amounts at such times as are provided in Section 3.02 hereof. When the final transfers have been made to the Paying Agent for the Refunded Bonds for the payment of such principal of and interest on the Refunded Bonds, any balance then remaining in the Escrow Fund shall be transferred to the City, and the Escrow Agent shall thereupon be discharged from any further duties hereunder. Section 3.02. Payment of Principal of and Interest on Refunded Bonds. (a) The Escrow Agent is hereby irrevocably instructed to transfer to the Paying Agent for the Refunded Bonds from the cash balance from time to time on deposit in the Escrow Fund the amounts required to pay the principal of and interest on the Refunded Bonds as the same become due and payable, all as. provided in the Report. (b) Money transferred to and held by the Paying Agent for the Refunded Bonds in accordance with the provisions hereof shall be held by the Paying Agent for the Refunded Bonds as a separate trust fund for the account of the respective holders of the Refunded Bonds in connection with which such money is held; provided, however, that money so held remaining unclaimed by the owners of such Refunded Bonds for three (3) years after the dates on which payment thereon was due, shall be reported and disposed of in accordance with the provisions of Texas law including, to the extent applicable, Title 6 of the Texas Property Code, as amended. Section 3.03. Sufficiency of Escrow Fund. The City represents (based solely upon the Report) that the successive receipts of the principal of and interest on the Escrowed Securities will assure that the cash balance on deposit from time to time in the Escrow Fund will be at all times sufficient to provide money for transfer to the Paying Agent for the Refunded ARTICLE I DEFINITIONS AND INTERPRETATIONS Section 1.01. Definitions. Unless otherwise expressly provided or unless the context clearly requires otherwise, the following terms shall have the respective meanings specified below for all purposes of this Escrow Agreement: "City" shall mean the City of Pearland, Texas, and any successor to its duties and functions. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the applicable regulations thereunder and under the Internal Revenue Code of 1954. "Escrow Agent" shall mean First City, Texas -Houston, N.A., in its capacity as escrow agent hereunder, and any successor or assign in such capacity. "Escrow Agreement" shall mean this escrow agreement by and between the City and the Escrow Agent. "Escrow Fund" shall mean the fund created in Section 3.01 of this Escrow Agreement to be administered by the Escrow Agent pursuant to the provisions of this Escrow Agreement. "Escrow Funding Date" shall mean the date on which the City deposits with the Escrow Agent the cash and Escrowed Securities described in Section 2.01. "Escrowed Securities" shall mean the United States Treasury Securities, State and Local Government Series, initially purchased with proceeds of the Refunding Bonds, all as more fully- described in the Report. "Paying Agent for the Refunded Bonds" shall mean First City, Texas -Houston, N.A., Houston, Texas (formerly First City National Bank of Houston, Houston, Texas). "Refunded Bond Ordinance" shall mean the City's ordinance authorizing the issuance, sale and delivery of the Refunded Bonds. "Refunded Bonds" shall mean the City's Refunding Bonds, Series 1985, dated August 15, 1985, in the aggregate principal amount of $6,795,000, maturing on March 1 in the following years and amounts: the City's debt service, and that this Ordinance be passed and approved on the date of its introduction. PASSED AND APPROVED on first reading pursuant to Section 3.10 of the City Charter this 12th day of September, 1990. Mayor City of Pearland, Texas ATTEST: >1(IfSecta City ry City of Pearland, Texas (SEAL) approved, subject to such insertions, additions and modifications as shall be necessary (a) to carry out the program designed for the City by Rauscher Pierce Refsnes, Inc., and which shall be certified as to mathematical accuracy by KPMG Peat Marwick, Certified Public Accountants, whose Report shall be attached to the Escrow Agreement (b) to maximize the City's present value savings and/or to minimize the City's costs of refunding, (c) to comply with all applicable laws and regulations relating to the refunding of the Refunded Bonds and (d) to carry out the other intents and purposes of this Ordinance, and the Mayor or Mayor Pro Tem 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 hereby irrevocably exercises its option to call Refunded Bonds for redemption prior to maturity on March 1, 1995, at a price of par plus accrued interest to the date fixed for redemption. The amounts and maturities of the bonds to be so redeemed shall be as follows: Maturity Date March 1, 1996 March 1, 1997 March 1, 1998 March 1, 1999 March 1, 2000 March 1, 2001 Amount Redeemed $1,190,000 1,280,000 415,000 345,000. 295,000 225,000 The City hereby designates the Escrow Agent as the City's. agent for the purpose of selecting the particular bonds within each of the above maturities to be redeemed, and authorizes and directs the Escrow Agent to make such selection by lot or other random method and to give and publish notices of such redemption in the manner and at the times required by the ordinance authorizing the issuance of the Refunded Bonds. 28. Purchase of United States Treasury Obligations. To assure the purchase of the Escrowed Securities referred to in the Escrow Agreement, the Mayor or Mayor Pro Tem, the City Manager, and the Escrow Agent are hereby authorized to subscribe for, agree to purchase, and purchase non -callable obligations of the United States of America, in such amounts and maturities and bearing interest at such rates as may be providedfor 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. (e) No -Arbitrage Covenant. The City shall certify, through an authorized officer, employee or agent, that based upon all facts and estimates known or reasonably expected to be in existence on the date the Bonds are delivered, the City will reasonably expect that the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of section 148(a) of the Code and applicable regulations thereunder. Moreover, the City covenants and agrees that it will make such use of the proceeds of the Bonds including interest or other investment income derived from Bond proceeds, regulate investments of proceeds of the Bonds, and take such other and further action as may be required sothatthe Bonds will not be "arbitrage bonds" within the meaning of section 148(a) of the Code and applicable regulations thereunder. (f) Arbitrage Rebate. 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 (within the meaning of section. 148 (f) (6) (B) of the Code) , be rebated to the federal government. Specifically, the City will (i) maintain records regarding the investment of the gross proceeds of the Bonds as may be required to calculate the amount earned on the investment of the gross proceeds of the Bonds separately from records of amounts on deposit in the funds and accounts of the City allocable to other obligations of the City or moneys which do not represent gross proceeds of any obligations of the City, (ii) calculate at such times as are required by applicable regulations, the amount earned from the investment of the gross proceeds of the Bonds which is required to be rebated to the federal government, and (iii) pay, not less often than every fifth anniversary date of the delivery of the Bonds, or on such other dates as may be permitted by applicable regulations, all amounts required to be rebated to the federal government. Further, the City will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the gross proceeds of the Bonds that might result in a reduction in the amount required to be paid to the federal government because such arrangement results in a smaller profit or larger loss than would have resulted if the arrangement had been at arms length and had the yield on the issue not been relevant to either party. (g) Information Reporting. The City covenants and agrees to file or cause to be filed with the Secretary of the Treasury, not later than the 15th day .of the second calendar month after the close of the calendar quarter in which the Bonds are issued, an information statement concerning the Bonds, all under and in accordance with section 149(e) of the. Code and applicable regulations thereunder. taken or omitted, respectively, would cause the interest on the Bonds to be includable in gross income, as defined in section 61 of the Code, of the Owners thereof for purposes of federal income taxation. In particular, the City covenants and agrees to comply with each requirement of this Section 22; provided, however, that the City shall not be required to comply with any particular requirement of this Section 22 if the City has received an opinion of nationally recognized bond counsel- ("Counsel's Opinion") that such noncompliance will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or if the City has received a Counsel's Opinion to the effect that compliance with some otherrequirement set forth in this Section 22 will satisfy the applicable requirements of the Code, in which case compliance with such other requirement specified in such Counsel's Opinion shall constitute compliance with the corresponding requirement specified in this Section 22. (b) Use of Proceeds. The City covenants and agrees that its use of the Net Proceeds of the Bonds and the Refunded Bonds will at all times satisfy the following requirements: (i) .The City will use all of the Net Proceeds of the Bonds to (A) acquire Escrowed Securities (as hereinafter defined) sufficient to pay the principal of and interest on the Refunded Bonds, and (B) to pay the costs of issuing the Bonds, except for amounts, if any, described in the Report as the rounding amount and the ending cash balance in the Escrow Fund (as hereinafter defined). The City has limited and will limit the amount of original or investment proceeds of the Refunded Bonds to be used (other than use as a member of the general public) in the trade or business of any person other than a governmental unit to an amount aggregating no more than ten percent of the Net Proceeds of the Refunded Bonds ("private -use proceeds"). For purposes of this Section, the term "person" includes any individual, corporation, partnership, unincorporated 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, any activity other than an activity carried on by a governmental unit. Any use of proceeds of the Refunded Bonds in any manner contrary to the guide- lines set forth in Revenue Procedures 82-14, 1982-1 C.B. 459, and 82-15, 1982-1 C.B. 460, including any revisions or amendments thereto, shall constitute Appreciation Bonds) of the Bonds is due, by reason of acceleration, and with respect to interest, the stated date for payment of such interest. Upon receipt of telephonic or telegraphic notice, subsequently confirmed in writing, or written notice by registered or certified mail, from a Bondholder or the Paying Agent to Financial Guaranty that the required payment of principal (or the Accreted Value in the case of Capital Appreciation Bonds) or interest has not been made by the Issuer to the Paying Agent, Financial Guaranty on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with Citibank, N.A., or its successor as its agent (the "Fiscal Agent"), sufficient to make the portion of such payment not paid by the Issuer. Upon presentation to the Fiscal Agent of evidence satisfactory to it of the Bondholder's right to receive such payment and any appropriate instruments of assignment required to vest all of such Bondholder's right to such payment in Financial Guaranty, the Fiscal Agent will disburse such amount to the Bondholder. As used herein the term "Bondholder" means the person other than the Issuer who at the time of nonpayment of a Bond is entitled under the terms of such Bond to payment thereof. The policy is non -cancellable for any reason. FINANCIAL GUARANTY INSURANCE COMPANY 18. Legal Opinion; Cusip Numbers. 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. 19. Interest and Sinking Fund; Tax Levy. There is hereby established a separate fund of the City to be known as the Series 1990 Refunding Bonds Interest and Sinking Fund (the "Interest and Sinking 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, in the Interest and Sinking 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 time as other City taxes are assessed, levied and collected, in each year, beginning with the current year, a continuing direct annual ad valorem tax, within the limits prescribed by law, upon all taxable property in 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 (SEAL) xxxxxxxxxx Comptroller of Public Accounts of the State of Texas 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, 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. First City, Texas -Houston, N.A. By Authorized Signature Date of Authentication THE CAPITAL APPRECIATION BONDS ARE EXCHANGEABLE at the principal corporate trust office of the Registrar for Bonds in the maturity 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, within the limits prescribed by law, sufficient to provide for the payment of the interest on and principal of this Bond, as such interest comes due and such principal matures, have been levied and ordered to be. levied against all taxable property in the City, and have been pledged irrevocably for such payment. FORM OF CAPITAL APPRECIATION BONDS United States of America State of Texas NUMBER DENOMINATION REGISTERED • REGISTERED CITY OF PEARLAND, TEXAS REFUNDING BOND SERIES 1990 MATURITY DATE: REGISTERED OWNER: ISSUANCE DATE: CUSIP: October 11, 1990 MATURITY AMOUNT: DOLLARS The City of Pearland, Texas (the "City") promises to pay to the registered owner identified above, or registered assigns, on the date specified above, upon presentation and surrender of this Bond at the principal corporate trust office of First City, Texas - Houston, N.A., Houston, Texas (the "Registrar"), the Maturity Amount identified above, representing the principal amount hereof and accrued and compounded interest hereon (both as shown in the table on the reverse of this Bond), in any coin or currency of the United States of America which on the date of payment is legal tender for the payment of debts due the United States of America. The date of this Bond is October 1, 1990,.but interest shall accrue on the _principal amount hereof from the Issuance Date at the per annum rate specified on the Table of Accreted Values on the reverse hereof. The Accreted Value (per $5,000 of Maturity Amount) of this Bond, as of the Issuance Date and as of each March 1 and'. September 1 is set forth on the reverse hereof. Such value as of any other date shall be determined by straight-line interpolation between such values. 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 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. the close of business on the 15th day of the calendar month next preceding each interest payment date (the "Record 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 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 CERTIFICATE) (SEAL) CITY OF PEARLAND, TEXAS Mayor City Secretary (Back Panel of Bond) THIS BOND is one of a duly authorized issue of Bonds, aggregating $7,364,391.80 (the "Bonds"), issued for the purpose of refunding a portion of the City's outstanding Refunding Bonds, Series 1985, and pursuant to an ordinance adopted by the City Council on September 12, 1990 (the "Ordinance"). The Bonds are issued as (i) Bonds in the aggregate principal amount of $949,391.80 which pay interest only at maturity or prior redemption (the "Capital Appreciation Bonds") and (ii) Bonds in the aggregate principal amount of $6,415,000 which pay interest semiannually until maturity or prior redemption (the "Current Interest Bonds"). THE CITY RESERVES THE RIGHT, at its option, to redeem Bonds prior to their scheduled maturities,. in whole or from time to time in part, in integral multiples of $5,000, on September 1, 2000, or any date thereafter, at a price of, with respect to Current Interest Bonds, par plus accrued interest to the date fixed for redemption and, with respect to Capital Appreciation Bonds, 103% of the Accreted Value on the date fixed for redemption. Reference is made to the Ordinance for complete details concerning the manner of redeeming Bonds. NOTICE OF ANY REDEMPTION shall be given at least thirty (30) days prior to the date fixed for redemption by first class mail, addressed to the registered owners of each Bond to be redeemed in whole or in part at the address shown on the books of registration kept by the Registrar. When Bonds or portions thereof have been Ordinance to the same extent as the Bond or Bonds in lieu of which such replacement Bond is delivered. 15. 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 cancelled 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. 16. Optional Redemption. The City reserves the right, at its option, to redeem Bonds prior to maturity, in whole or from time to time in part, on September 1, 2000, or any date thereafter, at a price of, with respect to Current Interest Bonds, par plus accrued interest to the date fixed for redemption and, with respect toCapitalAppreciation Bonds, 103% of the Accreted Value on the date fixed for redemption. Bonds 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 13 hereof, shall authenticate and deliver in exchange therefor a Bond or Bonds of like maturity and interest rate in an aggregate principal amount or Maturity Amount equal to the unredeemed portion of the Bond so surrendered. If less than all of the Bonds are to be redeemed, the City shall determine the amounts and maturities to be redeemed. Notice of any redemption identifying the Bonds to be redeemed 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 are to beredeemed, the numbers of the Bonds or portions thereof to be redeemed. Any notice given, as provided in this Section 16 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 any 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 including, to the extent applicable, Title 6 of the Texas Property Code, as amended. 13. Registration. Transfer. and Exchange. So long as any Bonds remain outstanding, the Registrar shall keep the Register at its principal corporate trust office and, subject to such reason- able 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 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 transfer, the Registrar shall authenticate and deliver in exchange therefor, within 72 hours after such presentation, a new Bond or Bonds of the same type (Current Interest or Capital Appreciation), registered in the name of the transferee or transferees, in authorized denominations and of the same maturity and aggregate principal amount (for Current Interest Bonds) or Maturity Amount (for Capital Appreciation Bonds) and bearing interest at the same rate as the Bond or Bonds so pre- sented. 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 type (Current Interest or. Capital Appreciation), maturity and interest rate and in any authorized denomination or Maturity Amount, in an aggregate amount equal to the unpaid principal amount or Maturity Amount of the Bond or Bonds presented for exchange. The Registrar shall be and is hereby authorized to authenticate and deliver exchange Bondsin accordance with the provisions of this Section 13. Each Bond delivered in accordance with this Section 13 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. 14. Mutilated. Lost. or Stolen Bonds.. Upon the presentation and surrender to the Registrar of a mutilated Bond, the Registrar shall authenticate and deliver inexchange therefor a replacement Bond of like maturity, interestrate, and principal amount or Maturity Amount, bearing a number not contemporaneously outstanding. If any Bond is lost, apparently destroyed, or -8- 6. Zxecution of Bonds; Seal. The Bonds shall be signed by the Mayor and countersigned by the City Secretary, by their manual, lithographed, or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Bonds shall have the same effect as if each of the Bonds had been signed manually and in person by each of said officers, and such facsimile seal on the Bonds shall have the same effect as if the official seal of the City had been manually impressed upon each of the Bonds. 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. 7. Approval by Attorney General; Registration by_ Comptroller. The Bonds to be initially issued shall be delivered to the Attorney General of Texas for approval and shall be registered by the Comptroller. The manually executed registration certificate of the Comptroller substantially in the form provided in Section 17 of this Ordinance shall be attached or affixed to the Bonds to be initially issued. 8. Authentication. Except for the Bonds to be initially issued, which need not be authenticated by the Registrar, only such Bonds which bear thereon a certificate of authentication, substantially in the form provided in Section 17 of this Ordinance, manually executed by an authorized representative of the Registrar, shall be entitled to the benefits of this Ordinance or shall be valid or obligatory for any. purpose. Such duly executed certificate of authentication shall be conclusive evidence that the Bonds so authenticated were delivered by the Registrar hereunder. 9. Payment of Principal and Interest. The Registrar is hereby appointed as the paying agent and registrar for the Bonds. The principal of the Current Interest Bonds and the Maturity Amount of the Capital Appreciation Bonds shall be payable, without exchange or collection charges, in any coin or currency of the United States of America which on the date of payment is legal ten- der for the payment of debts due the United States of America, upon their presentation and surrender as they respectively become due and payable, whether at maturity or by prior redemption, at the principal corporate trust office of the Registrar. The interest on each Current Interest Bond shall be payable on each Interest Payment Date, by check mailed by the Registrar on or before the Interest Payment Date to the Owner of record as of the Record Date, to the address of such Owner as shown on the Register. If the date for payment of the principal of or interest on any Bond is not a Business Day, then the date for such payment shall 1991 $ 260,000 1992 _ 565,000 1993 575,000 1994 525,000 1995 1,120,000 1996 1,190,000 1997 1,280,000 1998 415,000 1999 345,000 2000 295,000 2001 225,000 The particular bonds being refunded shall be selected by the Escrow Agent in accordance with Section 24 of this Ordinance. The term "Register" shall mean 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. The term "Registrar" shall mean First City, Texas -Houston, N.A., Houston, Texas, and its successors in that capacity. The term "Report" shall mean the report of KPMG Peat Marwick, Certified Public Accountants, verifying the accuracy of certain mathematical computations relating to the Bonds and the Refunded Bonds. The term "Underwriter" shall mean Rauscher Pierce Refsnes, Inc. 3. Authorization. The Bonds shall be issued in fully registered form in the principal amount of Seven Million Three Hundred Sixty -Four Thousand Three Hundred Ninety -One Dollars and Eighty Cents ($7,364,391.80) for the purpose of refunding the Refunded Bonds. 4. Designation. Date. and Interest Payment Dates. The Bonds shall be designated as "CITY OF PEARLAND, TEXAS, REFUNDING BONDS, SERIES 1990" and shall be dated October 1, 1990. The Current Interest Bonds shall bear interest at the rates set forth in Section 5(a) of this Order from the later of October 1, 1990, or the most recent Interest Payment Date to which such interest has been paid or duly provided for, calculated on the basis of a 360 day year of twelve 30 day months. The Capital Appreciation Bonds shall bear interest from the Issuance Date at the rates set forth in Section 5(b), calculated on the basis of a 360 day year of twelve 30 day months. Bonds shall no longer be regarded as being outstanding, except for the purpose of being paid pursuant to such deposit, and the pledges, liens, trusts and all other covenants, provisions, terms and conditions of the ordinance authorizing the issuance of the Refunded Bonds shall be, with respect to the Refunded Bonds, discharged, terminated and defeased; Now, Therefore BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND,. TEXAS: 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 transactions contemplated in this Ordinance will benefit the City by restructuring the debt service payable by the City to allow the payment of such debt service without increasing taxes and to permit the issuance of future tax supported debt on terms advantageous to the City, and that such benefits are sufficient consideration for the refunding of the Refunded Bonds. 2. Definitions. Throughout this Ordinance the following terms and expressions as used herein shall have the meanings set forth below: The term "Accreted Value" with respect to one or more Capital Appreciation Bonds, shall mean the value thereof from time to time, which value (per $5,000 of Maturity Amount) is set forth on the form of Capital Appreciation Bond herein for the Issuance Date and for each March 1 and September 1. For any other date, the Accreted Value shall be determined by a straight-line interpolation between the values set forth on the form of Capital Appreciation Bond. The term "Bonds" shall mean the $7,364,391.80 City of Pearland, Texas, Refunding Bonds, Series 1990, authorized in this Ordinance, unless the context clearly indicates otherwise. The term "Business Day" shall mean 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. The term "Capital Appreciation Bonds" shall mean those Bonds maturing on March 1 in the years 2008 and 2009, issued in the principal amount of $949,391.80. The term "City" shall mean the City of Pearland, Texas. The term "Code" shall mean the Internal Revenue Code of 1986, as amended. -2- CITY OF PEARLAND, TEXAS REFUNDING BONDS SERIES 1990 * * * * * * * * * * $7,364,391.80 * * * * * * * * w * VINSON 8 ELKINS ATTORNEYS AT LAW 3300 FIRST CITY TOWER 1001 FANNIN HOUSTON, TEXAS 77002-6760 CITY OF PEARLAND, TEXAS REFUNDING BONDS, SERIES 1990 $7,364,391.80 1. Vinson & Elkins Opinion 2. General Certificate 3. Certificate of Assessed Valuation 4. Bond Purchase Agreement 5. Ordinance Authorizing Issuance of Bonds 6. Escrow Agreement with Report Attached 7. Certificate of Escrow Agent 8. Subscription for United States Treasury Obligations State and Local Government Series 9. Notice of Bond Redemption-First City, Texas-Houston, N.A. 10. Affidavit of Publication in the Texas Bond Reporter 11. Signature Identification and No-Litigation Certificate 12. Attorney General's Opinion and Comptroller's Registration Certificate 13. Receipt 14. Receipt and No-Litigation Certificate 15. Closing Certificate of Mayor and City Manager 16. Closing Certificate of City Manager 17. Official Statement Certificate 18. No Arbitrage Certificate and Form 8038-G 19. Paying Agent/Registrar Agreement 20. Registrar's Receipt 21. Escrow Agent's Receipt 22. Preliminary Official Statement 23. Final Official Statement 24. Closing Letter Opinion of Vinson & Elkins 25. FGIC Insurance Policy; Opinion Letter; Rating Agency Letters 26. Specimen Bonds -2- .�i - .��.- ,�,•• ---- - w VINSON & ELKINS ATTORNEYS AT LAW THE WILLARD OFFICE BUILDING 3300 FIRST CITY TOWER FIRST CITY CENTRE 14SS PENNSYLVANIA AVE.,N.W 816 CONGRESS AVENUE WASHINGTON,D.C. 20004-1007 1001 FANNIN AUSTIN,TEXAS 78701-2496 TELEPHONE(202)639 6500 TELEX 89680 HOUSTON,TEXAS 77002-6760 TELEPHON E(512495-8400 FAX(202)639-6604 FAX(S 12)495-8612 TELEPHONE(7131758-2222 TELEX 762146 47 CHARLES ST..BERKELEY SQUARE FAX(713)758-2346 3700 TRAMMELL CROW CENTER LONDON WIX 7PB, ENGLAND 2001 ROSS AVENUE TELEPHONE OII 4471491-7236 October 11 1990 DALLAS,TEXAS 752 01-2 9 1 6 FAX TELEPHONE(214;220-7700 AX 011 44 71 499-5320 CABLE VINELKINS LONDON WI-TELEX 24140 FAX(214)220-7716 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, REFUNDING BONDS, SERIES 1990, dated October 1, 1990, in the principal amount of $7, 364 , 391. 80. The Bonds mature, 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, 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, and the bonds being refunded, on which we have relied in giving our opinion. The transcript contains certified copies of certain proceedings of the City, First City, Texas-Houston, N.A. , Houston, Texas (the "Escrow Agent") ; the report of KPMG Peat Marwick, Certified Public Accountants, verifying the sufficiency of the deposits made with the Escrow Agent for defeasance of the bonds being refunded and the mathematical accuracy of certain computations of the yield on the Bonds and obligations acquired with the proceeds of the Bonds; customary certificates of officers, agents and representatives of Page 1 of 3 pages the Escrow Agent, the City, and other public officials; and other certified showings relating to the authorization and issuance of the Bonds and the firm banking and financial arrangements for the discharge and final payment of the bonds being refunded. We have also examined executed Bond Nos. R-1 and CR-1 of this issue. BASED ON SUCH EXAMINATION, IT IS OUR OPINION that: (1) 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 presently effective and that therefore the Bonds constitute valid and legally binding obligations of the City; (2) Firm banking and financial arrangements have been made for the discharge and final payment of the bonds being refunded pursuant to an Escrow Agreement entered into between the City and the Escrow Agent on the date of delivery of the Bonds, and that therefore such bonds are deemed to be fully paid and no longer outstanding except for the purpose of being paid from the funds provided therefor in such Escrow Agreement; and (3) Taxable property in the City is subject to the levy of ad valorem taxes, within the limits prescribed by law, to pay the Bonds and the interest thereon. 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 generally, 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 owners for federal income tax purposes under existing law; and (2) The Bonds are not "private activity bonds" within the meaning of the Internal Revenue Code of 1986 (the "Code") , and interest on the Bonds is not subject to the alternative minimum tax on individuals and corporations under existing law, except that such interest will be included in a corporate taxpayer' s "adjusted net book income" or "adjusted current earnings" for purposes of computing its alternative minimum tax and its Superfund "environmental tax" liability. Page 2 of 3 pages In providing such opinions, we have relied on representations 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 provisions of the Ordinance, interest on the Bonds could become includable in gross income from the date of original delivery, regardless of the date on which the event causing such inclusion occurs. 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, 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 U.S. may be subject to the "branch profits tax" on their effectively-connected earnings and profits (including tax-exempt interest such as interest on the Bonds) . Page 3 of 3 pages GENERAL CERTIFICATE THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § CITY OF BRAZORIA § We, the undersigned, Mayor and City Secretary of the CITY OF PEARLAND, TEXAS (the "City") , hereby make and execute this certificate for the benefit of all persons interested in the City' s $7 , 364 , 391. 80 REFUNDING BONDS, SERIES 1990, dated October 1, 1990, now in process of issuance. We certify that: 1. The following persons are the members of the City Council of the City: C. V. Coppinger Mayor David L. Smith, Jr. Mayor Pro Tem Richard F. Tetens Council Member D. A. Miller, Jr. Council Member William E. Wolff Council Member Randy Weber Council Member 2 . Kay Krouse is City Secretary, James O. DeShazer is the City Manager, Janet S. Eastburn is the Director of Finance and Barbara J. Lenamon is Tax Assessor-Collector of the City. 3 . 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 , except as amended at an election held in the City on May 5, 1990. Copies of such amendments are attached hereto as Exhibit A. 4 . None of the bonds being refunded by the Bonds have ever been held in or purchased by the account of any of the interest and sinking funds created and maintained for the payment and security of said Refunded Bonds and, none of the Refunded Bonds are currently owned nor have any of the same ever been purchased or held for any account or fund of the City. 5. A true and correct copy of the Debt Service Schedule for the Bonds now in process of issuance is attached hereto as Exhibit B. 6. The following is a true, correct and complete statement of all indebtedness of the City payable from taxation: Purpose Date Interest Maturities Amt. Outst. WW & San. SS Imp. , Ser. ' 64 12-1-64 3 . 80% $ 50M 6-1-1991 3 . 90% 55M 1992/94 $ 215, 000 WW & San. SS Imp. , Ser. ' 66 6-1-66 4 . 35% 35M 6-1-1991 4 . 40% 35M 1992/93 40M 1994 100M 1995 245,000 G. O. , Ser. ' 68 8-1-68 5. 10% 40M 2-1-1991 5 . 25% 40M 1992 50M 1993/95 230,000 G. O. , Ser. ' 75 6-1-75 6. 25% 60M 2-1-1991 6. 40% 65M 1992 6. 50% 65M 1993 190,000 Perm. Imp. , Ser. ' 78 9-1-78 5. 10% 125M 3-1-1991 5 . 20% 125M 1992 5. 25% 125M 1993 5. 30% 200M 1994 5. 40% 200M 1995 5. 50% 250M 1996/97 1,275,000 WW Sys. C. O. , Ser. ' 81 6-1-81 9 . 40% 100M 3-1-1991 9 . 75% 100M 1992/93 300,000 Ref. , Ser. ' 85 8-15-85 7 . 25% 770M 3-1-1991* 7 . 50% 830M 1992* 7 . 75% 915M 1993* 8 . 00% 1095M 1994* 8 . 10% 1190M 1995* 8 . 25% 1285M 1996* 8 . 40% 1280M 1997* 8 . 50% 510M 1998* 8 . 60% 500M 1999* 8 . 70% 490M 2000* 8 . 80% 485M 2001* 9, 350,000 *The following amounts for the following years are in the process of being refunded: 1991 $ 260, 000 1992 565, 000 1993 575, 000 1994 525, 000 1995 1, 120, 000 1996 1, 190, 000 1997 1, 280, 000 1998 415, 000 1999 345, 000 2000 295, 000 2001 225, 000 Purpose Date Interest Maturities Amt. Outst. Pub. Imp. , Ser. ' 86 4-1-86 8 . 50% $ 100M 3-1-1991 125M 1992/93 150M 1994 175M 1995 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 $ 4,250,000 C. O. , Ser. ' 88 4-1-88 6. 40% 50M 3-1-1991/93 150,000 Pub. Imp. , Ser. ' 88 5-1-88 8 . 80% 50M 3-1-1991/96 8% 100M 1997 6. 80% 250M 1998 6 .90% 250M 1999 7% 250M 2000 7 . 10% 250M 2001 7 . 25% 250M 2002/03 1,900,000 BONDS IN PROCESS OF ISSUANCE Purpose Date Interest Maturities Amt. Outst. REFUNDING BONDS, SERIES 1990 Current 10-1-90 7 . 10% $ 315M 3-1-2002 Interest 7 . 15% 390M 2003 Bonds 7 . 20% 1220M 2004 7 . 25% 1315M 2005 7 . 30% 1415M 2006 7. 35% 1760M 2007 6,415,000 Principal Purpose Date Interest Maturities Amount Capital 10-11-90 7 . 55% $1820M 3-1-2008 $501,646.60 Apprec. 7 . 60% 1765M 3-1-2009 447,745.20 Bonds Total Capital Appreciation Bonds: $949, 391. 80 WITNESS OUR HANDS AND THE OFFICIAL SEAL OF THE CITY, this 12th day of September, 1990. Mayor CITY OF PEARLAND, TEXAS ZeL City Secretary CITY OF PEARLAND, TEXAS (SEAL) .�i limirmft- ~Si IMi EXHIBIT A RESOLUTION NO. R90-14 A RESOLUTION AND ORDER OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, CANVASSING THE RETURNS AND DECLAR- ING THE RESULTS OF THE CITY OFFICERS* AND SPECIAL ELECTIONS HELD IN THE CITY OF PEARLAND, TEXAS, ON MAY 5, 1990. On this the 7th day of May, 1990, the City Council of the City of Pearland, Texas, convened in Special Session open to the public at the regular meeting place thereof with the following members present, to-wit: Tom Reid Mayor D. A. Miller Council Position One Richard Tetens Council Position Two James Bost Council Position Three David Smith Council Position Four William Wolff Council Position Five Kay Krouse City Secretary and the following absent: None consti- tuting a quorum, and among other proceedings had were the follow- ing: Councilmember Tetens introduced a Resolution and Order and moved its adoption. The mo'-ion was seconded by Councilmember Bost , and the motion carried with the adoption of the Resolution and Order prevailed by the following vote: AYES Councilmembers Bost, Smith, Wolff, Tetens and Miller NAYS None ABSTENTIONS None The Resolution is as follows: WHEREAS, there were held in the City of Pearland, Texas, on the 5th day of May, 1990, Regular and Special Municipal Elections at which the filling of the offices of Mayor and Member of the ' Council, Position No. Three (3) were submitted to a vote of the duly qualified resident electors of said City, and at which eight (8) proposed amendments to the Home Rule Charter of the City of 1 Pearland, Texas, were submitted to a vote of the duly qualified resident electors of said City. WHEREAS, at this Special Meeting of the City Council of the City of Pearland, on May 7, 1990, after date of said elections, being the first meeting of the City Council to be held since said elections at which returns of said elections could be considered and final results declared. NOW THEREFORE, BE IT RESOLVED AND ORDERED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section I. That the elections described were duly called and notice thereof given in accordance with law; that said elections were held in the manner required by law; that due returns of said elections have been made by the proper officers; and it appeared from said returns, duly and legally made, that there were cast at such elections 1,774 valid and legal votes; and that said elec- tions resulted in the following vote totals: FOR MAYOR NAME OF THE CANDIDATE TOTAL VOTES CAST VIC COPPINGER 1,054 BARCLAY V. BARNETT 132 CARLTON MCCOMB 555 FOR MEMBER OF THE COUNCIL POSITION NUMBER THREE NAME OF THE CANDIDATE TOTAL VOTES CAST RANDY K. WEBER 1.158 JAMES M. SUDELA 550 2 PROPOSED CHARTER AMENUMMNTS AMENDMENT NO. 1 ADDING SENTENCE TO END OF PARAGRAPH IN SECTION 3.02 FOR 1.387 AGAINST 162 AMENDMENT NO. 2 AMENDING SECTION 3.10 BY CHANGING THE TITLE AND PARAGRAPHS TWO AND THREE FOR 990 AGAINST 325 AMENDMENT NO. 3 AMENDING SECTION 4.06, SUBSECTIONS (B) AND (C) FOR 989 AGAINST 205 AMENDMENT NO. 4 AMENDING SECTION 4.08, SUBSECTIONS (A) , (B), AND (C) FOR 1,354 AGAINST 114 AMENDMENT NO. 5 AMENDING SECTION 5.01 FOR 1,353 AGAINST 45 AMENDMENT NO. 6 AMENDING SECTION 5.04, LAST SENTENCE FOR 1.402 AGAINST §� AMENDMENT NO. 7 AMENDING SECTION 5.06, LAST SENTENCE FOR 1,325 AGAINST 42 3 AMENDMENT NO. 8 AMENDING ENTIRE CHARTER, CHANGING GENDER TERMS FOR 1.248 AGAINST 246 Section II. That the City Council of the City of Pearland, Texas, hereby officially and affirmatively declares that the results as shown above are the real and true results of the elections held on May 5, 1990, within the City of Pearland, Texas, that the candidate elected for Mayor is declared to be Vic Coppinger, and that the candidate elected for Member of the Council, Posi- tion Number Three is declared to be Randy Weber, and said above parties are hereby declared duly elected to said respective offices, subject to taking of their oaths and Statement of Offi- cers and filing bond as provided by the laws of the State of Texas. Section III. The City Council of the City of Pearland, Texas, hereby officially and affirmatively declares the adoption of the follow- ing Amendments to the Home Rule Charter of the City of Pearland, as a result of said election, and that the following Articles so adopted and/or amended shall hereafter read as follows: ARTICLE 3, SECTION 3.02 QUALIFICATIONS Each member of the City Council shall be a resident citizen of the City of Pearland, shall be a qualified voter of the State of Texas, shall have been such resident citizen of the City of Pearland for a period of not less than six months immediately preceding his/her election, and shall not be indebted to the City of Pearland. If the Mayor or any Councilmember fails to maintain the foregoing qualifications or shall be absent from two regular scheduled meetings within any 6 month period without 4 valid excuse, the City Council must, at its next regular meeting, declare a vacancy as set forth in Section 3.06 of this Charter. No member of the City Council of the City of Pearland shall hold any paid position under the City Government during their term of office. ARTICLE 3, SECTION 3.10 PROCEDURES FOR PASSING OF ORDINANCES OR RESOLUTIONS Every ordinance shall be introduced in written or printed form and, upon passage, shall take effect at the time indicated therein, provided that any ordinance imposing a penalty, fine or forfeiture for a violation of its provisions shall become effec- tive not less than ten days from its publication in the official city newspaper of the City of Pearland. The City Secretary shall give notice of the passage of every ordinance imposing a penalty, fine or forfeiture for a violation of the provisions thereof, by causing the caption or title, including the penalty, of any such ordinance to be published in the official newspaper of the City of Pearland at least once within ten (10) days after the passage of said ordinance. He/She shall note on every ordinance the caption of which is hereby required to be published and on the record thereof, the fact that the same has been published as required by this Charter and date of such publication, which shall be prima facie evidence of the legal publication and pro- mulgation of such ordinance, provided that the provisions of this section shall not apply to the correction, amendment, revisions and modification of the ordinances of the City for publication in book or pamphlet form. Except as otherwise provided by this Charter, it shall be necessary to the validity of any ordinance that it shall be read and considered at two regular sessions of the City Council. The requirement of consideration and favorable action on an ordinance at two regular sessions of the City Coun- cil shall not apply, and only one reading at one regular or special meeting shall be required, for the final passage and approval of an ordinance relating to an immediate public emergen- cy affecting life, health, property or the public peace. In the 5 event an ordinance is adopted as an emergency measure, a declara- tion of the specific emergency shall be expressed in the caption and body of such ordinance, and such ordinance shall not be adopted without the affirmative vote of at least three-fourths of all members of the City Council. The reading aloud of the title and caption of the ordinance or resolution shall suffice as a reading, provided printed copies of the ordinance or resolution in the form required for adoption are available to all members of the City Council and a reasonable number of additional copies are available to all interested citizens present at the session. Ordinances or resolutions say be read in their entirety at the discretion of a majority of the City Council. Every ordinance or resolution shall be authenticated by the signature of the Mayor and City Secretary and shall be systemati- cally recorded and indexed in an ordinance or resolution book in a manner approved by the Council. It shall only be necessary to record the caption or title of ordinances or resolutions in the minutes or journal of Council meetings. The City Council shall have power to cause the ordinances or resolutions of the City to be corrected, amended, revised, and modified; and the ordinances printed in code form as often as the Council deems advisable, and such printed code, when adopted by the Council, shall be in full force and effect. Such printed code shall be admitted in evi- dence in all courts and places without further proof. ARTICLE 4, SECTION 4.06 MUNICIPAL COURT There shall be established and maintained a Court designated as a "Municipal Court" for the trial of misdemeanor offenses, with all such powers and duties as are now or hereafter may be prescribed by the laws of the State of Texas relative to Munici- pal or Recorder's Court. 6 (a) The Judge of said Court shall be appointed by the City Council, and shall be a licensed attorney; and shall receive such salary as may be fixed by the City Coun- cil. The Judge of said Court shall hold office at the pleasure of the City Council. (b) There shall be a Court Clerk appointed by the City Manager with the approval of the City Council. (c) The Clerk and the deputy clerks shall have the power to administer oaths and affidavits, make certificates, affix the seal of the Court, and perform all acts usual and necessary by the Court Clerk in issuing processes and conducting business of the Court. (d) The City Council shall appoint other licensed attorneys to act as Temporary Judges of said Court in case of disability or absence of the Judge of the Municipal Court. The salary of these temporary judges are to be fixed by City Council. ARTICLE 4, SECTION 4.08 DEPARTMENT OF HEALTH AND SANITATION There shall be established and maintained a Department of Health and Sanitation to administer health and sanitation stand- ards in the City of Pearland. (a) Appointment and Qualifications: The City Manager, with the approval of the City Coun- cil, shall appoint a City Health Authority who shall be a licensed physician qualified to practice medicine in the State of Texas. The City Health Authority shall be the Director of the Department of Health and Sanita- tion. (b) Administration: The City Health Authority shall be responsible to the City Manager for the general administration of the Department of Health and Sanitation and the supervision of the employees thereof. (c) Duties of the Health Authority: The City Health Authority shall advise the City Manager on a program of public health; shall cooperate in the preparation of a Sanitary Code; shall cooperate with nearby cities on problems of health and sanitation; shall cooperate with the Commissioner's Court of Brazo- ria County and its agencies, and with the State Health Department and other departments of the state govern- ment in matters pertaining to health and sanitation. (d) Air and Water Pollution: The City Manager, with the approval of the City Coun- cil, shall appoint a competent sanitation engineer to establish air and water pollution standards for the City of Pearland and determine if such standards have been violated pursuant to existing Texas laws. 7 ARTICLE 5, SECTION 5.01 REGULAR ELECTIONS The annual City election shall be held on the first Saturday in May. ARTICLE 5, SECTION 5.04 FILING FOR OFFICE Any qualified citizen who desires to become a candidate for City office shall file with the Mayor or, if designated by the Mayor, the City Secretary, a signed application and oath for his/her name to appear on the ballot. The application must be filed at least forty-five (45) days prior to the election. ARTICLE 5, SECTION 5.06 ELECTION BY MAJORITY At any general or special municipal election, the candidate for each office who has received a majority of all votes cast for his/her particular office shall be declared elected. A runoff election shall be ordered by the Mayor, or if he/she fails to do so, by the Council in the event any candidate fails to receive a majority of all votes cast for his/her particular office. The election shall be ordered on the first day following the comple- tion of the official count of ballots cast at the first election. The runoff election shall be held on the second Saturday in May. The two candidates who receive the largest number of votes cast for each particular office requiring a runoff election shall again be voted for. The candidate receiving the largest number of votes in the runoff election shall be declared elected. The City Secretary shall give notice of such runoff election by causing said notice to be published in accordance with Texas Election Laws. ENTIRE CHARTER The entire Charter shall be amended to change the terms "he" and "his" to read as "he/she" or "his/hers", and the term "Coun- 8 Gilman" to read as "Councilmember." Section IV. It is further found and determined that in accordance with the Order of this governing body, the City Secretary posted written notice of the date, place and subject of this meeting on the bulletin board located in the City Hall, a place convenient to the public, and said notice having been so posted and remain- ing posted continuously for at least 72 hours preceding the date of this meeting. A copy of said posting shall be attached to the minutes of this meeting and shall be made a part thereof for all intents and purposes. Section V. The following Exhibits A, B and C (Election Results) are attached hereto and made a part hereof by reference. PASSED, APPROVED and ADOPTED this 7th day of May, A. D. , 1990. �f r Mayor ATTEST: 4 City Secretary APPROVED AS TO FORM: City Attorney 9 1 I I I . ACCUMULATED TOTAL:PEARLAND CITY ELECTION Page 1 21:49:12 5-Nay-1990 I CITY, SCHOOL, HOSPITAL, DRAINAGE DISTRICT ELECTION MAY 5, 1990 - BRA20RIA COUNTY, TEXAS • Count Percent Count Percent Precincts Counted - TOTAL 2 2.38 PEARLAND CITY CHARTER AMENDMENT ELECTION AMENDMENT NO.7-AMEND SECTION 5.06.. Ballots Cast - TOTAL 1,774 FOR 1,325 96.43 AGAINST 49 3.57 PEARLAND CITY MUNICIPAL OFFICERS ELECTION Total 1,374 100.00 MAYOR VIC COPPINGER 1,054 60.54 PEARLAND CITY CHARTER AMENDMENT ELECTION BARCLAY V. BARNETT 132 7.58 AMENDMENT NO.8-AMEND ENTIRE CHARTER.. CARLTON MCCOMB 555 31.88 FOR 1,248 83.53 Total 1,741 100.00 AGAINST 246 16.47 Total 1,494 100.00 PEARLAND CITY MUNICIPAL OFFICERS ELECTION MEMBER OF THE COUNCIL, POSITION 3 RANDY K. WEBER 1,158 67.80 We, the undersigned, certify that the above results JAMES M. SUDELA 550 32.20 Total 1,708 100.00 are true and correct. PEARLAND CITY CHARTER AMENDMENT ELECTION rg,,,,,,) Siayd: AMENDMENT N0.1-NO MEMBER SHALL HOLD... FOR 1,387 89.54 AGAINST 162 10.46 Total 1,549 100.00 PEARLAND CITY CHARTER AMENDMENT ELECTION Do AMENDMENT 110.2-PROCEDURE FOR PASSING.. FOR 990 75.29 AGAINST 325 24.71 Total 1,315 100.00 PEARLAND CITY CHARTER AMENDMENT ELECTION AMENDMENT NO.3-AMEND SECTION 4.06.. FOR 989 82.83 AGAINST 205 17.17 Total 1,194 100.00 PEARLANO CITY CHARTER AMENDMENT ELECTION AMENDMENT NO.4-AMEND SECTION 4.08.. - FOR 1,354 92.23 AGAINST 114 7.77 Total 1,468 100.00 PEARLAND CITY CHARTER AMENDMENT ELECTION AMENDMENT NO.5-AMEND SECTION 5.01.. FOR 1,353 96.78 AGAINST 45 3.22 Total 1,398 100.00 PEARLAND CITY CHARTER AMENDMENT ELECTION AMENDMENT NO.6-AMEND SECTION 5.04.. FOR 1,402 95.44 AGAINST 67 4.56 Total 1,469 100.00 I I I I I • 0546 ABSENTEE-PEARLAND CTT-SO GRAND Pape 1 21:42:07 5-May-1990 CITY, SCHOOL, HOSPITAL, DRAINAGE DISTRICT ELECTION MAY 5, 1990 - BRA2ORIA COUNTY, TEXAS Posn Count Percent Poen Count Percent Ballots Cast - TOTAL 288 PEARLANO CITY CHARTER AMENDMENT ELECTION AMENDMENT N0.7-AMENO SECTION 5.06.. PEARLAND CITY MUNICIPAL OFFICERS ELECTION FOR 112 . . 209 96.76 MAYOR AGAINST 113 7 3.24 VIC COPPINGER 6 201 71.02 Total 216 100.00 BARCLAY V. BARNETT . . . . . 7 . . 8 2.83 CARLTON MCCOMB 8 74 26.15 PEARLANO CITY CHARTER AMENDMENT ELECTION Total 283 100.00 AMENDMENT N0.8-AMEND ENTIRE CHARTER.. I FOR 120 . . 210 90.13 PEARLAND CITY MUNICIPAL OFFICERS ELECTION AGAINST 121 . . 23 9.87 MEMBER OF THE COUNCIL, POSITION 3 Total 233 100.00 RANDY K. WEBER 11 . . 145 53.90 JAMES N. SUDELA 12 . . 124 46.10 Total 269 100.00 Ye, the undersigned, certify that the above results I PEARLAND CITY CHARTER AMENDMENT ELECTION are true and correct. AMENDMENT NO.1-NO MEMBER SHALL HOLD... FOR 27 . . 220 93.22 Si AGAINST 28 16 6.78 Total 236 1000.0000 9.------ni)---u 1:7-1-72-2} I PEARLAND CITY CHARTER AMENDMENT ELECTION AMENDMENT N0.2-PROCEDURE FOR PASSING.. FOR 61 . . 178 82.41 W AGAINST 62 . . 38 17.59 Total 216 100.00 PEARLANO CITY CHARTER AMENDMENT ELECTION AMENDMENT NO.3-AMEND SECTION 4.06.. FOR 75 . . 165 84.62 AGAINST 76 . . 30 15.38 Total 195 100.00 PEARLAND CITY CHARTER AMENDMENT ELECTION AMENDMENT NO.4-AMEND SECTION 4.08.. FOR 83 . . 210 92.92 - AGAINST 84 . . 16 7.08 Total 226 100.00 PEARLAND CITY CHARTER AMENDMENT ELECTION AMENDMENT NO.5-AMEND SECTION 5.01.. FOR 92 . . 208 96.74 AGAINST 93 . . 7 3.26 Total 215 100.00 PEARLANO CITY CHARTER AMENDMENT ELECTION AMENDMENT NO.6-AMEND SECTION 5.04.. FOR 102 . . 224 96.97 AGAINST 103 . . 7 3.03 I Total 231 100.00 l I I 0046 PEARLAND CITY-SO GRAND CENTER Page 1 21:48:09 5-May-1990 I CITY, SCHOOL, HOSPITAL, DRAINAGE DISTRICT ELECTION MAY 5, 1990 - BRAZORIA COUNTY, TEXAS Posn Count Percent Poen Count Percent Ballots Cast - TOTAL 1,486 PEARLAND CITY CHARTER AMENDMENT ELECTION AMENDMENT M0.7-AMEND SECTION 5.06.. PEARLAND CITY MUNICIPAL OFFICERS ELECTION FOR 112 . 1,116 96.37 MAYOR AGAINST 113 42 3.63 VIC COPPINGER 6 853 58.50 Tots( 1,158 100.00 BARCLAY V. BARNETT . . . . . 7 . . 124 8.50 CARLTON MCCOMB 8 481 32.99 PEARLAND CITY CHARTER AMENDMENT ELECTION Total 1,458 100.00 AMENDMENT NO.8-AMEND ENTIRE CHARTER.. FOR 120 . 1,038 82.32 PEARLAND CITY MUNICIPAL OFFICERS ELECTION AGAINST 121 . . 223 17.68 MEMBER OF THE COUNCIL, POSITION 3 Total 1,261 100.00 RANDY K. WEBER 11 . 1,013 70.40 DAMES M. SWELA 12 . . 426 29.60 Total 1,439 100.00 We, the undersigned, certify that the above results _ PEARLAND CITY CHARTER AMENDMENT ELECTION are true end correct. AMENDMENT M0.1-NO MEMBER SHALL HOLD... FOR 27 . 1,167 88.88 Signed: AGAINST 28 . 1 11.12 Total 1,313 13 100.0000 9C4122ell I PEARLANO CITY CHARTER AMENDMENT ELECTION AMENDMENT 110.2-PROCEDURE FOR PASSING.. FOR 61 . . 812 73.89 A AGAINST 62 . . 287 26.11 2 Total 1,099 100.00 PEARLAND CITY CHARTER AMENDMENT ELECTION AMENDMENT NO.3-AMEND SECTION 4.06.. FOR 75 . . 824 82.48 AGAINST 76 . . 175 17.52 Total 999 100.00 PEARLAND CITY CHARTER AMENDMENT ELECTION AMENDMENT NO.4-AMEND SECTION 4.08.. FOR 83 . 1,144 92.11 -- AGAINST 84 . . 98 7.89 Total 1,242 100.00 PEARLAND CITY CHARTER AMENDMENT ELECTION AMENDMENT NO.5-AMEND SECTION 5.01.. FOR 92 . 1,145 96.79 AGAINST 93 . . 38 3.21 Total 1,183 100.00 PEARLAND CITY CHARTER AMENDMENT ELECTION AMENDMENT NO.6-AMEND SECTION 5.04.. FOR 102 . 1,178 95.15 AGAINST 103 . . 60 4.85 Total 1,238 100.00 I EXHIBIT B CITY OF PEARLANO LESS: DEBT PLUS. REFUNDING BONDS SER. 90 TOTAL YEAR SERVICE ON NEW ENDING CURRENT TOTAL REFUNDED CURRENT INTEREST BONDS COMPOUND DEBT 09/30 DEBT SERVICE BONDS PRINCIPAL INTEREST INT BONDS SERVICE 1991 2,726,810 , 805,188 427,242 2,348,864 1992 2,720,151 1,079,575 466,083 2,106,659 1993 2,703,823 1,046,106 466,083 2,123,800 1994 2,610,138 952,825 466,083 2,123,396 1995 2,607,700 1,481,465 466,083 1,592,318 1996 2,583,924 1,457,018 466,083 1,592,989 1997 2,600,645 1,444,170 466,083 1,622,558 1998 1,632,173 507,773 466,083 1,590,483 1999 1,532,173 405,300 466,083 1,592,956 2000 1,456,220 327,633 466,083 1,594,670 2001 1,358,996 234,900 466,083 1,590,179 2002 826,688 315,000 454,900 1,596,588 2003 775,313 390,000 429,775 1,595,088 2004 1,220,000 371,913 1,591,913 2005 1,315,000 280,324 1,595,324 2006 1,415,000 181,008 1,596,008 2007 1,760,000 64,680 1,824,680 2008 1,820,000 1,820,000 2009 1,765,000 1,765,000 26,134,754 9,741,953 6,415,000 6,870,672 3,585,000 33,263,473 Prepared by: Rauscher Pierce Refsnes, Inc. 09/11/90 16:07:04 AGG89 0LD85R NEW90B ...... CERTIFICATE OF ASSESSED VALUATION THE STATE OF TEXAS § COUNTIES OF BRAZORIA 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 the City as shown by the duly approved tax rolls for the year 1989 , which are the last approved tax rolls for the City on file in my office, to-wit: $ WITNESS MY HAND AND THE OFFICIAL SEAL OF THE CITY, this /36 day of September, 1990. ,/? /X: ') Tax Assessor- liedtor� CITY OF PEARLAND, TEXAS (SEAL) CITY OF PEARLAND, TEXAS $7 ,364 , 391 .80 Refunding Bonds Series 1990 BOND PURCHASE AGREEMENT September 12 , 1990 THE HONORABLE MAYOR AND CITY COUNCIL MEMBERS City of Pearland City Hall P. 0. Box 2068 Pearland, Texas 77588-2068 Dear Mayor and City Council Members : The undersigned, Rauscher Pierce Refsnes , Inc . , (the "Underwriter") , offers to enter into this Bond Purchase Agreement with the City of Pearland, Texas (the "City" ) . This offer is made' subject to the City' s acceptance of this Bond Purchase Agreement on or before 10 : 00 p.m. , on the date set out above . 1 . Purchase and Sale of the Bonds . Upon the terms and conditions and upon the basis of the representations set forth herein, the Underwriter hereby agrees to purchase from the City, and the City hereby agrees to sell and deliver to the Underwriter on the closing date, October 11 , 1990 , and as further defined in Paragraph 6 . ( "Closing" ) , $7 , 364 , 391 . 80 principal amount of City of Pearland, Texas Refunding Bonds, Series 1990 (the "Bonds , " including both Current Interest Bonds and the Capital Appreciation Bonds) . The Bonds shall be dated October 1 , 1990 , and shall have the maturities and bear interest (from October 1 , 1990 for the Current Interest Bonds, and from the date of delivery for the Capital Appreciation Bonds) , at the rate or rates per annum as shown on the maturity schedule on the cover page of the Official Statement, a copy of which is attached hereto as Exhibit A. The purchase price for all of the Bonds will be $7 , 244 , 779 .49 , which reflects the aggregate principal amount of the Current Interest Bonds of $6 , 415 , 000 , plus the aggregate principal amount of the Capital Appreciation Bonds of $949 , 391 . 80 , less an underwriter' s discount of $132 ,559 . 05 , plus $12 , 946 . 74 of interest accrued on the Current Interest Bonds from October 1 , 1990 to October 11 , 1990 , the date of the payment for and delivery of the Bonds. .r.r 2 . Ordinance. The Bonds shall be as described in and shall be issued and secured under the provisions of an ordinance to be adopted by the City on September 12 , 1990 as further described in the Official Statement (the "Ordinance" ) . The Bonds shall be subject to redemption as described in the Official Statement. 3 . Public Offering. It shall be a condition of the obligation of the City to sell and deliver the Bonds to the Underwriter, and of the obligation of the Underwriter to purchase and accept delivery of the Bonds , that the entire principal amount of the Bonds authorized by the Ordinance shall be sold and delivered by the City and accepted and paid for by the Underwriter at the Closing. The Underwriter agrees to make a bona fide public offering of all of the Bonds , at not in excess of the initial public offering prices, as set forth on the cover page of the Official Statement, plus accrued interest on the Current Interest Bonds from the date of the Bonds, and confirm in writing to the City the principal amount (or percentage of principal amount) of each maturity and the corresponding price for each maturity (or the yield from each maturity resulting from such price) at which the Bonds were sold pursuant to such bona fide public offering. 4 . Official Statement. The Preliminary Official Statement, dated September 5 , 1990 and the Official Statement, dated September 12 , 1990 , including the cover page and Appendices thereto, as further amended only in the manner hereinafter provided, are hereinafter called the "Official Statement. " The City hereby authorizes the Escrow Agreement, hereinafter defined, the Ordinance and the Official Statement and the information therein contained to be used by the Underwriter in connection with the public offering and sale of the Bonds . The City hereby ratifies the use by the Underwriter in the offering of the Bonds prior to the date hereof of the Preliminary Official Statement for the Bonds dated September 5 , 1990 . The City agrees to cooperate with the Underwriter to provide a supply of final Official Statements within seven business days of the date hereof in sufficient quantities to comply, and the Underwriter agrees to comply, with the Underwriter ' s obligations under applicable MSRB Rules and Rule 15c2-12 of the Securities Exchange Commission. The Underwriter will use its best efforts to assist the City in the preparation of the final Official Statement in order to comply with the aforementioned rules . 5 . Representation, Warranties and Agreements of City. On the date hereof, the City represents, warrants and agrees as follows : A. The City is a duly organized and existing municipal corporation of the State of Texas and a body politic and corporate, duly created, existing and acting as a Home Rule City under the provisions of the Constitution -2- and laws of the State of Texas, and has full legal right, power and authority (i) to issue the Bonds and to enter into this Bond Purchase Agreement and the Escrow Agreement between the City and the Escrow Agent described in the Ordinance (the "Escrow Agreement") , (ii) to authorize and approve the Preliminary Official Statement and the Official Statement and to authorize their distribution by the Underwriter, (iii) to adopt the Ordinance, and to issue and deliver the Bonds to the Underwriter as provided herein, and (iv) to carry out and consummate all other transactions contemplated by the Ordinance, the Escrow Agreement and this Bond Purchase Agreement; B. By official action of the City prior to or concurrently with the acceptance hereof, the City has duly adopted the Ordinance, has duly authorized and approved the execution and delivery of the Bonds , the Escrow Agreement and this Bond Purchase Agreement, and has duly authorized and approved the performance by the City of its obligations contained in the Ordinance, the Bonds , the Escrow Agreement and in this Bond Purchase Agreement; C. The City has complied, and will be at the date of closing in compliance, in all material respects , with the Constitution and laws of the State of Texas in connection with the authorization, issuance and sale of the Bonds; D. The City is not in breach of or default under any applicable law or administrative regulation of the State of Texas or the United States or any applicable judgment or decree or any loan agreement, note, resolution, agreement or other instrument, except as may be disclosed in the Official Statement, to which the City is a party or is otherwise subject, which would have a material and adverse effect upon the business or financial condition of the City; and the execution and delivery of the Escrow Agreement and' this Bond Purchase Agreement by the City, and the execution and delivery of the Bonds and the adoption of the Ordinance by the City and compliance with the provisions of each thereof will not violate or constitute a breach of or default under any existing law, administrative regulation, judgment, decree or any agreement or other instrument to which the City is a party or is otherwise subject; E. All approvals , consents and orders of any governmental authority or agency having jurisdiction of any matter which would constitute a condition precedent to the performance by the City of its obligations to sell and deliver the Bonds hereunder will have been obtained prior to the Closing; F. At the time of the City' s acceptance hereof and at the time of the Closing, the Official Statement does not and -3- armilb anima. will not contain any 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; G. The audited financial statements of the City contained in the Official Statement present fairly the financial position of the City as of September 30 , 1989, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles; H. Between the date of this Bond Purchase Agreement and Closing, the City will not, without the prior written consent of the Underwriter, issue any additional bonds or other obligations for borrowed money payable in whole or in part from taxes , and the City will not incur any material liabilities, direct or contingent, relating to, nor will there be any adverse change of a material nature in the financial position of, the City. I . Except as described in the Official Statement, to the knowledge of the City, no litigation is pending or threatened in any court affecting the corporate existence of the City, the title of its officers to their respective offices , or seeking to restrain or enjoin the issuance or delivery of the Bonds, or the collection of the taxes pledged or to be pledged to pay the principal of and interest on the Bonds , or in any way contesting or affecting the issuance, execution, delivery, payment, security or validity of the Bonds, or in any way contesting or affecting the validity or enforceability of the Ordinance, the Escrow Agreement or this Bond Purchase Agreement, or contesting the powers of the City, or any authority for the Bonds , the Ordinance, the Escrow Agreement, or this Bond Purchase Agreement, or contesting in any way the completeness, accuracy or fairness of the Preliminary Official Statement or the Official Statement, or materially and adversely affecting the financial condition of the City. J. The City will cooperate with the Underwriter in arranging for the qualification of the Bonds for sale and the determination of their eligibility for investment under the laws of such jurisdictions as the Underwriter designates , and will use its best efforts to continue such qualifications in effect so long as required for distribution of the Bonds; provided, however, that the City will not be required to execute a general consent to service of process or to qualify to do business in connection with any such qualification in any jurisdiction; K. The descriptions contained in the Official Statement of the Bonds, the Escrow Agreement and the -4- Ordinance accurately reflect the provisions of such instruments, and the Bonds, when validly executed, authenticated and delivered in accordance with the Ordinance and sold to the Underwriter as provided herein, will be validly issued and outstanding obligations of the City entitled to the benefits of, and subject to the limitations contained in, the Ordinance; and L. If prior to the Closing an event occurs affecting the City which is materially adverse for the purpose for which the Official Statement is to be used and is not disclosed in the Official Statement, the City shall notify the Underwriter, and if in the opinion of the Underwriter such event requires a supplement or amendment to the Official Statement, the City will supplement or amend the Official Statement in a form and in a manner approved by the Underwriter and the Underwriter ' s Counsel . 6 . Closing. At 10 : 00 A.M. , on October 11 , 1990 (the "Closing") , the City will deliver the initial bonds (as required by the Ordinance) to the Underwriter and will have available for immediate exchange the Bonds in definitive form, duly executed and authenticated, together with the other documents hereinafter mentioned, and the Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in Paragraph 1 . hereof in immediately available funds . Delivery and payment as aforesaid shall be made at the offices of First City, Texas-Houston, N. A. , Houston, Texas, or such other place as shall have been mutually agreed upon by the City and the Underwriter. The definitive Bonds shall be printed or lithographed; shall be prepared and delivered as fully registered bonds in the denomination or maturity amount of $5 , 000 or any integral multiple thereof; shall be registered in the names as shall be requested by the Underwriter at least five days prior to the Closing; and, if the Underwriter shall so request, shall be made available to the Underwriter at least one business day before the Closing for purpose of inspection in New York, New York. 7 . Conditions . The Underwriter has entered into this Bond Purchase Agreement in reliance upon the representations and warranties of the City contained herein and to be contained in the documents and instruments to be delivered at the Closing, and upon the performance by the City of its obligations hereunder, both as of the date hereof and as of the date of Closing. Accordingly, the Underwriter' s obligations under this Bond Purchase Agreement to purchase and pay for the Bonds shall be subject to the performance by the City of its obligations to be performed hereunder and under such documents and instruments at or prior to the Closing, and shall also be subject to the following conditions : -5- A. The representations and warranties of the City contained herein shall be true, complete and correct in all material respects on the date hereof and on and as of the date of Closing, as if made on the date of Closing; B. As of the time of the Closing, the Ordinance and the Escrow Agreement shall be in full force and effect, and the Ordinance and the Escrow Agreement shall not have been amended or supplemented, and the Official Statement shall not have been amended, modified or supplemented, except as may have been agreed to by the Underwriter; C. At the time of the Closing, all official actions of the City related to the Ordinance and the Escrow Agreement shall be in full force and effect and shall not have been amended, modified or supplemented; D. The City shall not have failed to pay principal or interest when due on any of its outstanding obligations for borrowed money; E. At or prior to the Closing, the City shall have subscribed to the United States Treasury for the purchase of State and Local Government Treasury Obligations required to be deposited with the Escrow Agent pursuant to and as defined in the Escrow Agreement; and F. At or prior to the Closing, the Underwriter shall have received two copies of each of the following documents : (1) The Official Statement of the City executed on behalf of the City by the Mayor and City Secretary of the City; (2) The Ordinance, certified by the City Secretary under the City ' s seal as having been duly adopted by the City and as being in effect, with such changes or amendments as may have been agreed to by the Underwriter; (3) An opinion, dated the date of Closing, of Vinson & Elkins , Bond Counsel to the City, in form and substance acceptable to the Underwriter concerning the validity of the Bonds under Texas law and the excludability from gross income for federal tax purposes, of interest on the Bonds ; (4) An opinion or certificate, dated on or prior to the date of Closing, of the Attorney General of Texas, approving the Bonds as required by law and a certificate of the Comptroller of Public Accounts of the State of Texas regarding the registration of the Bonds as required by law; -6- (5) A supplemental opinion, dated the date of Closing, of Vinson & Elkins , Bond Counsel to the City, addressed to the City and the Underwriter, to the effect that (a) in its capacity as Bond Counsel , such firm has reviewed the information in the Official Statement under the captions, "THE BONDS" , "LEGAL MATTERS, " LEGAL OPINIONS, " (insofar as such section relates to the opinion of Bond Counsel) , and "TAX MATTERS - Tax Exemption and Tax Accounting Treatment of Original Issue Discount Bonds and Capital Appreciation Bonds, " and such firm is of the opinion that the information relating to the Bonds and the Ordinance contained under such captions in all respects accurately and fairly reflects the provisions thereof and, insofar as such information relates to matters of law, is true, accurate, and complete; (b) the Bonds are exempt from registration pursuant to the Securities Act of 1933 , as amended, and the Ordinance is exempt from qualification as an indenture pursuant to the Trust Indenture Act of 1939 , as amended; (c) in the performance of their duties as Bond Counsel for the City, without having undertaken to determine independently the accuracy and completeness of all the statements contained in the Official Statement, nothing has come to the attention of such counsel which would lead them to believe that the Official Statement (excluding the financial statements and other financial statistical data included therein, as to all of which no view need be expressed) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (6) A certificate, dated the date of Closing, signed by the Mayor and the City Manager of the City, to the effect that (a) the representations and warranties of the City contained herein are true and correct in all material respects on and as of the date of Closing as if made on the date of Closing; (b) except to the extent disclosed in the Official Statement, to the knowledge of such persons , no litigation is pending or threatened in any court to restrain or enjoin the issuance or delivery of the Bonds , or the collection of the ad valorem taxes pledged or to be pledged to pay the principal of and interest on the Bonds , or the pledge thereof, or in any way contesting or affecting the validity of the Bonds , the Ordinance, the Escrow Agreement or this Bond Purchase Agreement, or contesting the powers of the City or contesting the authorization of the Bonds or the Ordinance , or contesting in any way the accuracy, completeness or fairness of the Preliminary Official -7- Statement or the Official Statement (but in lieu of or in conjunction with such certificate, the Underwriter may, in its sole discretion, accept certificates or opinions of the City Attorney that, in his or her opinion, the issues raised in any such pending or threatened litigation are without substance or that the contentions of all plaintiffs therein are without merit) ; and (c) to the best of their knowledge, no event affecting the City has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used, or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any respect; (7) A certificate, dated the date of Closing, of the City Manager of the City to the effect that, other than as reflected in the Official Statement, there has not been any material and adverse change in the affairs or financial condition of the City since September 30, 1989 , the latest date as to which audited financial information is available; (8) A certificate, dated the date of the Closing, of an appropriate official of the City to the effect that, on the basis of the facts, estimates and circumstances in effect on the date of delivery of the Bonds, 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 Internal Revenue Code of 1986 , as amended; (9) A copy of a special report prepared by the independent certified public accountants named in the Official Statement, addressed to the City, Bond Counsel, the Underwriter and Underwriter ' s Counsel verifying the arithmetical computations of the adequacy of the maturing principal and interest on the escrowed securities and uninvested cash on hand under the Escrow Agreement to pay, when due, the principal of and interest on the bonds being refunded by the Bonds and the computation of the yield with respect to such securities and the Bonds; (10) A copy of the Financial Guaranty Insurance Company policy of municipal insurance insuring the payment of the principal of and interest on the Bonds , and evidence of the rating of Moody' s Investor' s Service, Inc . , of "Aaa" and of Standard & Poor ' s Corporation of "AAA" on the Bonds delivered in a form acceptable to the Underwriter; and -8- (11) Such additional legal opinions , certificates, instruments and other documents as Bond Counsel or the Underwriter may reasonably request to evidence the truth, accuracy and completeness , as of the date hereof and as of the date of Closing, of the City' s representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance and satisfaction by the City at or prior to the date of Closing of all agreements then to be performed and all conditions then to be satisfied by the City. All of the opinions, letters , certificates , instruments and other documents mentioned above or elsewhere in this Bond Purchase Agreement shall be deemed to be in compliance with the provisions hereof if, but only if, they are satisfactory to the Underwriter. 8 . Termination. A. If the City shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, to accept delivery of, and to pay for the Bonds as set forth in this Bond Purchase Agreement, or if the obligations of the Underwriter to purchase, to accept delivery of, and to pay for the Bonds shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate , and neither the Underwriter nor the City shall be under further obligation hereunder, except that the respective obligations of the City and the Underwriter set forth in Paragraphs 9 . and 11 . shall continue in full force and effect. B. The Underwriter may terminate its obligation to purchase at any time before the Closing if any of the following should occur: (1) (a) Legislation (including any amendment thereto) shall have been introduced in or adopted by either House of the Congress of the United States, or recommended to the Congress for passage by the President of the United States or favorably reported for passage to either House of the Congress by any Committee of such House, or (b) a decision shall have been rendered by a court established under Article III of the Constitution of the United States or by the United States Tax Court, or (c) an order, ruling or regulation shall have been issued or proposed by or on behalf of the Treasury Department of the United States , or by the Internal Revenue Service, the effect of which, in any such case described in clause (a) , (b) or (c) , would be to impose, directly or indirectly, federal income taxation upon interest received on -9- obligations of the general character of the Bonds or upon income of the general character to be derived by the City, other than as imposed on the Bonds and income therefrom under the federal tax laws in effect on the date hereof, in such a manner as in the judgment of the Underwriter would materially impair the marketability or materially reduce the market price of obligations of the general character of the Bonds. (2) Any action shall have been taken by the Securities and Exchange Commission or by a court which would require registration of any security under the Securities Act of 1933 , as amended, or qualification of any indenture under the Trust Indenture Act of 1939, as amended, in connection with the public offering of the Bonds , or any action shall have been taken by any court or by any governmental authority suspending the use of the Official Statement or any amendment or supplement thereto, or any proceeding for that purpose shall have been initiated or threatened in any such court or by any such authority. (3) (a) The Constitution of the State of Texas shall be amended or an amendment shall be proposed, or (b) legislation shall be enacted, or (c) a decision shall have been rendered as to matters of Texas law, or (d) any order, ruling or regulation shall have been issued or proposed by or on behalf of the State of Texas by an official, agency or department thereof, affecting the tax status of the City, its property or income, its bonds (including the Bonds) or the interest thereon, which in the judgment of the Underwriter would materially affect the market price of the Bonds . (4) (a) A general suspension of trading in securities shall have occurred on the New York Stock Exchange, or (b) the United States shall have become engaged in hostilities which have resulted in the declaration, on or after the date of this Bond Purchase Agreement, of a national emergency or war, the effect of which, in either case described in clause (a) and (b) , is, in the judgment of the Underwriter, so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Bonds on the terms and in the manner contemplated in this Bond Purchase Agreement and the Official Statement. (5) An event described in Paragraph S .L. hereof occurs which, in the opinion of the Underwriter, requires a supplement or amendment to the Official Statement. -10- (6) A general banking moratorium shall have been declared by authorities of the United States, the State of New York or the State of Texas . (7) A lowering of the ratings of "Aaa" and "AAA" initially assigned to the Bonds by Moody' s Investors Service, Inc . and Standard & Poor ' s Corporation, respectively, shall occur prior to Closing. (8) Any event occurs which prevents the United States Treasury Department from delivering on the Closing Date the State and Local Government Securities subscribed for by the City to fund the Escrow Fund pursuant to the Escrow Agreement in connection with the issuance of the Bonds . (9) Failure to provide, within seven business days of the date hereof, an Official Statement in form and substance satisfactory to the Underwriter. 9 . Expenses . A. The Underwriter shall be under no obligation to pay, and the City shall pay, any expenses incident to the performance of the City' s obligations hereunder, including but not limited to: (1) the cost of the preparation, printing and distribution of the Official Statement; (2) the cost of the preparation and printing of the Bonds; (3) the fees and expenses of Bond Counsel to the City; (4) the fees and disbursements of the City' s accountants , advisors , and of any other experts or consultants retained by the City; and (5) fees and premiums for the policy of municipal bond insurance and for bond ratings and any travel or other expenses incurred incident thereto. B. The Underwriter shall pay: (1) all advertising expenses of the Underwriter in connection with the offering of the Bonds; (2) the cost of the preparation and printing of all the underwriting documents, including this Bond Purchase Agreement and (3) all other expenses incurred by them in connection with their offering and distribution of the Bonds, including the fees of Counsel to the Underwriter. 10 . Notices . Any notice or other communication to be given to the City under this Bond Purchase Agreement may be given by delivering the same in writing at the address for the City set forth above, and any notice or other communication to be given to the Underwriter under this Bond Purchase Agreement may be given by delivering the same in writing to Rauscher Pierce Refsnes , Inc. , 1001 Fannin, Suite 700 , Houston, Texas 77002 , Attention: Frank S. Ildebrando. -11- 11 . Parties in Interest. This Bond Purchase Agreement is made solely for the benefit of the City and the Underwriter (including the successors or assigns of any Underwriter) , and no other person shall acquire or have any right hereunder or by virtue hereof. The City' s representations , warranties and agreements contained in this Bond Purchase Agreement shall remain operative and in full force and effect, regardless of (a) any investigations made by or on behalf of the Underwriter and (b) delivery of any payment for the Bonds hereunder; and the City' s representations and warranties contained in Paragraph 6 . of this Bond Purchase Agreement shall remain operative and in full force and effect, regardless of any termination of this Bond Purchase Agreement. 12 . Effective Date. This Bond Purchase Agreement shall become effective upon the execution of the acceptance hereof by the Mayor of the City and shall be valid and enforceable as of the time of such acceptance. Very truly yours, RAUSCHER PIERCE REFSNES , INC. Title• Senior Vice President Accepted: - This day of September, 1990 By: /.Z� Mayor City of Pearland, Texas (SEAL) Attest: City Secr tary City of Pearland, Texas 90007A/A -12- cnrIIBI i , OFFICIAL STATEMENT DATED SEPTEMBER 12. 1990 Ratings: Standard & Poor's Corporation (FGIC) ... "AAA" Moody's Investors Service, Inc. (FGIC) .."Aaa" See "Municipal Bond Insurance" herein IN THE OPINION OF BOND COUNSEL, INTEREST ON THE BONDS IS EXCLUDABLE FROM GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES UNDER EXISTING LAW AND THE BONDS ARE NOT PRIVATE ACTIVITY BONDS. SEE "TAX MATTERS" FOR A DISCUSSION OF THE OPINION OF BOND COUNSEL,INCLUDING A DESCRIPTION OF ALTERNATIVE MINIMUM TAX CONSEQUENCES FOR CORPORATIONS. NEW ISSUE $7,364,391.80 CITY OF PEARLAND (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) REFUNDING BONDS, SERIES 1990 Interest Accrues from: October 1, 1990 on the Current Interest Bonds Date of delivery on the Capital Appreciation Bonds Interest on the Bonds maturing in the years 2002 through 2007, both inclusive (the "Current Interest Bonds") will accrue from October 1, 1990,and will be payable March 1 and September 1 of each year,commencing March 1, 1991. Interest on the Bonds maturing in the years 2008 and 2009, both inclusive (the "Capital Appreciation Bonds") will accrue from the date of delivery,will be compounded March 1, 1991 and each September 1 and March 1 thereafter, and will be payable only upon maturity or prior redemption.The Current Interest Bonds and the Capital Appreciation Bonds are collectively referred to herein as the "Bonds" or the "Series 1990 Refunding Bonds". Principal of the Current Interest Bonds and both principal of and interest on the Capital Appreciation Bonds are payable at the corporate trust office of First City,Texas-Houston NA.,Houston,Texas,the paying agent/registrar(the"Registrar"), upon surrender of the Bonds for payment. Interest on the Current Interest Bonds is payable by check dated as of the interest payment date,and mailed by the Registrar to registered owners as shown on the records of the Registrar on the close of business as of the 15th day of the calendar month next preceding each interest payment date (the "Record Date"). The Bonds will be issued only in fully registered form. The Current Interest Bonds will be issued in denominations of $5,000 of principal amount or any integral multiple thereof. Capital Appreciation Bonds will be issued in denominations of $5,000 of maturity amount, including both principal and accrued and compounded interest, or any integral multiples thereof. The Bonds are subject to redemption, in whole or in part, prior to their scheduled maturities on September 1, 2000, or on any date thereafter, at the option of the City. Upon redemption, the Current Interest Bonds will be payable at a price equal to the principal amount of the Current Interest Bonds or the portions thereof so called for redemption, plus accrued interest to the date of redemption, and the Capital Appreciation Bonds will be payable at 103% of their accreted value on their redemption date. See "APPENDIX C - Table of Accreted Values of Capital Appreciation Bonds." A Municipal Bond New Issue Insurance Policy guaranteeing payment of the principal of and interest on the Obligations described herein on the stated payment dates will be issued by Financial Guaranty Insurance Company. PRINCIPAL AMOUNTS, MATURITIES, INTEREST RATES AND PRICES $6,415,000 CURRENT INTEREST BONDS Principal Maturity Interest Yield to Amount March 1 Rate Maturity(a) $ 315,000 2002(b) 7.10% 7.10% 390,000 2003(b) 7.15 7.15 1,220,000 2004(b) 7.20 7.20 1,315,000 2005(b) 7.25 7.25 1,415,000 2006(b) 7.30 7.30 1,760,000 2007(b) 7.35 7.35 $949,391.80 CAPITAL APPRECIATION BONDS Value Total Maturity Yield to at Issue Payment at March 1 Maturity(c) Date Maturity 2008(b) 7.55% $501,646.60 1,820,000 2009(b) 7.60 447,745.20 1,765,000 RAUSCHER PIERCE REFSNES, INC. S (a) The initial yields and prices are established by, and are the sole responsibility of the Underwriter (hereinafter defined) and may subsequently be changed. (b) Subject to optional redemption as described above. (c) Interest compounded semiannually and payable only at maturity or upon prior redemption. The proceeds of the Bonds will be applied to refund certain outstanding bonds of the City of Pearland, Texas (the "City"), and to pay certain costs incurred in connection with the issuance of the Bonds (See "THE BONDS - Sources and Uses of Funds"). The Bonds, when issued, will constitute valid and binding obligations of the City and will be payable solely from the proceeds of an annual ad valorem tax, levied within the limits prescribed by law against taxable property within the City. The Bonds are offered when, as and if issued by the City and accepted by the Underwriter, subject to the approval of the Attorney General of Texas and the approval of certain legal matters by Vinson & Elkins, Houston, Texas, Bond Counsel. Certain legal matters will be passed upon for the Underwriter by Smith, Murdaugh, Little & Bonham, Houston, Texas. See "LEGAL MATTERS." CERTIFICATE FOR ORDINANCE THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § CITY OF BRAZORIA § We, the undersigned officers of the CITY OF PEARLAND, TEXAS (the "City") , hereby certify as follows: 1. The City Council of the City convened in special meeting on the 12th day of September, 1990, 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 and the City Secretary, to-wit: C. V. Coppinger Mayor David L. Smith, Jr. Mayor Pro Tem Richard F. Tetens Council Member D. A. Miller, Jr. Council Member William E. Wolff Council Member Randy Weber Council Member Kay Krouse City Secretary and all of said persons ,were present, except the following absentee(s) : IYOAh � , constituting a quorum. Whereupon, among other business, the following was transacted at said meeting: a written ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF PEARLAND, TEXAS, REFUNDING BONDS, SERIES 1990; AUTHORIZING THE REDEMPTION PRIOR TO MATURITY OF CERTAIN OUTSTANDING BONDS ; AUTHORIZING THE ADVANCE REFUNDING OF CERTAIN OUTSTANDING OBLIGATIONS AND THE EXECUTION AND DELIVERY OF AN ESCROW AGREEMENT AND THE SUBSCRIPTION FOR AND PURCHASE OF CERTAIN ESCROWED SECURITIES; AND DECLARING THAT AN IMMEDIATE PUBLIC EMERGENCY EXISTS BECAUSE THE PROCEEDS OF SUCH BONDS ARE NEEDED AS SOON AS POSSIBLE FOR THE PROTECTION OF LIFE, HEALTH, PROPERTY AND THE PUBLIC PEACE (the "Ordinance") was duly introduced for the consideration of the City Council and read in full . It was then duly moved and seconded that the 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 the City Council shown present above voted "Aye. " NAYS: None. 2 . That a true, full and correct copy of the 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 subject of the aforesaid meeting, and that the Ordinance would be intro- duced and considered for adoption at said meeting, and each of said officers and members consented, in advance, to the holding of such 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 Article 6252-17, as amended. SIGNED AND SEALED this 12th day of September, 1990. City Secretary Mayor (SEAL) ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF PEARLAND, TEXAS, REFUNDING BONDS, SERIES 1990 ; AUTHORIZING THE REDEMPTION PRIOR TO MATURITY OF CERTAIN OUTSTANDING BONDS ; AUTHORIZING THE ADVANCE REFUNDING OF CERTAIN OUTSTANDING OBLIGATIONS AND THE EXECUTION AND DELIVERY OF AN ESCROW AGREEMENT AND THE SUBSCRIPTION FOR AND PURCHASE OF CERTAIN ESCROWED SECURITIES ; AND DECLARING THAT AN IMMEDIATE PUBLIC EMERGENCY EXISTS BECAUSE THE PROCEEDS OF SUCH BONDS ARE NEEDED AS SOON AS POSSIBLE FOR THE PROTECTION OF LIFE, HEALTH, PROPERTY AND THE PUBLIC PEACE THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § CITY OF PEARLAND § WHEREAS, the City of Pearland, Texas (the "City") has heretofore issued its Refunding Bonds, Series 1985 (the "Outstanding Bonds") ; and WHEREAS, the City desires to refund a portion of the Outstanding Bonds (the "Refunded Bonds") , in advance of their maturities; and WHEREAS, Article 717k, Vernon' s Texas Civil Statutes, as amended, 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 maturities, and to accomplish such refunding by depositing directly with any paying agent for the Refunded Bonds 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 authorize the execution of an escrow agreement and provide for the deposit of proceeds of the refunding bonds, together with other funds, to pay the Refunded Bonds; and WHEREAS, the issuance of the refunding bonds herein authorized will result in increased debt service for the City of $7 , 115, 768 . 05 and an increase in the present value of such debt service of $207 , 236 . 11, and the City believes that the issuance of such bonds is needed to restructure the City' s debt to allow payment of such debt without increasing taxes; and WHEREAS, upon the issuance of the refunding bonds herein authorized and the deposit of funds referred to above, the Refunded Bonds shall no longer be regarded as being outstanding, except for the purpose of being paid pursuant to such deposit, and the pledges, liens, trusts and all other covenants, provisions, terms and conditions of the ordinance authorizing the issuance of the Refunded Bonds shall be, with respect to the Refunded Bonds, discharged, terminated and defeased; Now, Therefore BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: 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 transactions contemplated in this Ordinance will benefit the City by restructuring the debt service payable by the City to allow the payment of such debt service without increasing taxes and to permit the issuance of future tax supported debt on terms advantageous to the City, and that such benefits are sufficient consideration for the refunding of the Refunded Bonds. 2 . Definitions. Throughout this Ordinance the following terms and expressions as used herein shall have the meanings set forth below: The term "Accreted Value" with respect to one or more Capital Appreciation Bonds, shall mean the value thereof from time to time, which value (per $5, 000 of Maturity Amount) is set forth on the form of Capital Appreciation Bond herein for the Issuance Date and for each March 1 and September 1 . For any other date, the Accreted Value shall be determined by a straight-line interpolation between the values set forth on the form of Capital Appreciation Bond. The term "Bonds" shall mean the $7 , 364 , 391 . 80 City of Pearland, Texas, Refunding Bonds, Series 1990, authorized in this Ordinance, unless the context clearly indicates otherwise. The term "Business Day" shall mean 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. The term "Capital Appreciation Bonds" shall mean those Bonds maturing on March 1 in the years 2008 and 2009, issued in the principal amount of $949 , 391. 80. The term "City" shall mean the City of Pearland, Texas. The term "Code" shall mean the Internal Revenue Code of 1986, as amended. -2- The term "Comptroller" shall mean the Comptroller of Public Accounts of the State of Texas. The term "Current Interest Bonds" shall mean those Bonds maturing on March 1 in each of the years 2002 through 2007 , issued in the principal amount of $6, 415, 000. The term "Escrow Agent" shall mean First City, Texas-Houston, N.A. , Houston, Texas, and any successor in that capacity. The term "Escrow Agreement" shall mean the agreement between the City and the Escrow Agent relating to the escrow of funds to pay the Refunded Bonds. The term "Interest and Sinking Fund" shall mean the interest and sinking fund for payment of the Bonds established by the City in Section 19 of this Ordinance. The term "Interest Payment Date" , when used in connection with any Current Interest Bond, shall mean March 1, 1991, and each September 1 and March 1 thereafter until maturity or prior redemption. The term "Issuance Date" shall mean the date on which the Bonds are delivered to and paid for by the Underwriter. The term "Maturity Amount" with respect to any Capital Appreciation Bond shall mean the amount payable to the Owner thereof at maturity, which shall include both principal and accrued interest. The term "Ordinance" as used herein and in the Bonds shall mean this ordinance authorizing the Bonds. The term "Owner" shall mean any person who shall be the registered owner of any outstanding Bond. The term "Paying Agent" shall mean the Registrar. The term "Record Date" shall mean, with respect to Current Interest Bonds, the close of business on the 15th day of the calendar month next preceding each Interest Payment Date. The term "Refunded Bonds" shall mean the City' s Refunding Bonds, Series 1985, dated August 15, 1985, in the aggregate principal amount of $6, 795, 000, maturing on March 1 in the following years and amounts: -3- 1991 $ 260, 000 1992 565, 000 1993 575, 000 1994 525, 000 1995 1, 120, 000 1996 1, 190, 000 1997 1, 280, 000 1998 415, 000 1999 345, 000 2000 295, 000 2001 225, 000 The particular bonds being refunded shall be selected by the Escrow Agent in accordance with Section 24 of this Ordinance. The term "Register" shall mean 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. The term "Registrar" shall mean First City, Texas-Houston, N.A. , Houston, Texas, and its successors in that capacity. The term "Report" shall mean the report of KPMG Peat Marwick, Certified Public Accountants, verifying the accuracy of certain mathematical computations relating to the Bonds and the Refunded Bonds. The term "Underwriter" shall mean Rauscher Pierce Refsnes, Inc. 3 . Authorization. The Bonds shall be issued in fully registered form in the principal amount of Seven Million Three Hundred Sixty-Four Thousand Three Hundred Ninety-One Dollars and Eighty Cents ($7 , 364 , 391. 80) for the purpose of refunding the Refunded Bonds. 4 . Designation, Date, and Interest Payment Dates. The Bonds shall be designated as "CITY OF PEARLAND, TEXAS, REFUNDING BONDS, SERIES 1990" and shall be dated October 1, 1990. The Current Interest Bonds shall bear interest at the rates set forth in Section 5 (a) of this Order from the later of October 1, 1990, or the most recent Interest Payment Date to which such interest has been paid or duly provided for, calculated on the basis of a 360 day year of twelve 30 day months. The Capital Appreciation Bonds shall bear interest from the Issuance Date at the rates set forth in Section 5 (b) , calculated on the basis of a 360 day year of twelve 30 day months. -4- 5. Initial Bonds; Numbers and Denominations. (a) The Current Interest Bonds shall be initially 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 Current Interest Bonds shall mature on March 1 in each of the years and in the amounts set out in such schedule. Current Interest Bonds delivered on transfer of or in exchange for other Current Interest Bonds shall be numbered (with appropriate prefix) in order of their authentication by the Registrar, shall be in the denomination of $5, 000 or integral multiples thereof, and shall mature on the same date and bear interest at the same rate as the Bond or Bonds in lieu of which they are delivered. CURRENT INTEREST BONDS Bond Principal Interest Number Year Amount Rate R-1 2002 $ 315, 000 7 . 10% R-2 2003 390, 000 7 . 15% R-3 2004 1, 220, 000 7 . 20% R-4 2005 1, 315, 000 7 . 25% R-5 2006 1, 415, 000 7 . 30% R-6 2007 1, 760, 000 7 . 35% (b) The Capital Appreciation Bonds shall be initially 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 Capital Appreciation Bonds shall mature on March 1 in each of the years and in the Maturity Amounts set out in such schedule. Capital Appreciation Bonds delivered on transfer of or in exchange for other Capital Appreciation Bonds shall be numbered (with appropriate prefix) in order of their authentication by the Registrar, shall be in the Maturity Amount of $5, 000 or integral multiples thereof, and shall mature on the same date and bear interest at the same rate as the Bond or Bonds in lieu of which they are delivered. CAPITAL APPRECIATION BONDS Bond Principal Interest Maturity Number Year Amount Rate Amount CR-1 2008 $501, 646. 60 7 . 55% $1, 820, 000 CR-2 2009 447 , 745. 20 7 . 60% 1, 765, 000 -5- 6. Execution of Bonds; Seal. The Bonds shall be signed by the Mayor and countersigned by the City Secretary, by their manual, lithographed, or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Bonds shall have the same effect as if each of the Bonds had been signed manually and in person by each of said officers, and such facsimile seal on the Bonds shall have the same effect as if the official seal of the City had been manually impressed upon each of the Bonds. 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. 7 . Approval by Attorney General ; Registration by Comptroller. The Bonds to be initially issued shall be delivered to the Attorney General of Texas for approval and shall be registered by the Comptroller. The manually executed registration certificate of the Comptroller substantially in the form provided in Section 17 of this Ordinance shall be attached or affixed to the Bonds to be initially issued. 8 . Authentication. Except for the Bonds to be initially issued, which need not be authenticated by the Registrar, only such Bonds which bear thereon a certificate of authentication, substantially in the form provided in Section 17 of this Ordinance, manually executed by an authorized representative of the Registrar, shall be entitled to the benefits of this Ordinance or shall be valid or obligatory for any purpose. Such duly executed certificate of authentication shall be conclusive evidence that the Bonds so authenticated were delivered by the Registrar hereunder. 9 . Payment of Principal and Interest. The Registrar is hereby appointed as the paying agent and registrar for the Bonds. The principal of the Current Interest Bonds and the Maturity Amount of the Capital Appreciation Bonds shall be payable, without exchange or collection charges, in any coin or currency of the United States of America which on the date of payment is legal ten- der for the payment of debts due the United States of America, upon their presentation and surrender as they respectively become due and payable, whether at maturity or by prior redemption, at the principal corporate trust office of the Registrar. The interest on each Current Interest Bond shall be payable on each Interest Payment Date, by check mailed by the Registrar on or before the Interest Payment Date to the Owner of record as of the Record Date, to the address of such Owner as shown on the Register. If the date for payment of the principal of or interest on any Bond is not a Business Day, then the date for such payment shall -6- be the next succeeding Business Day with the same force and effect as if made on the date payment was originally due. 10. 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 State of Texas or other entity duly qualified and legally authorized to act as Registrar for the Bonds. The City reserves the right to change the Registrar for the Bonds 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. 11. Special Record Date. If interest on any Current Interest 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 United States mail, first class, postage prepaid, not later than five (5) days prior to the Special Record Date, to each affected Owner of record as of the close of business on the day prior to the mailing of such notice. 12 . 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 12 shall be valid and effectual and shall dis- charge 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 -7- including, to the extent applicable, Title 6 of the Texas Property Code, as amended. 13 . Registration, Transfer, and Exchange. So long as any Bonds remain outstanding, the Registrar shall keep the Register at its principal corporate trust office and, subject to such reason- able 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 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 transfer, the Registrar shall authenticate and deliver in exchange therefor, within 72 hours after such presentation, a new Bond or Bonds of the same type (Current Interest or Capital Appreciation) , registered in the name of the transferee or transferees, in authorized denominations and of the same maturity and aggregate principal amount (for Current Interest Bonds) or Maturity Amount (for Capital Appreciation Bonds) and bearing interest at the same rate as the Bond or Bonds so pre- sented. 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 type (Current Interest or Capital Appreciation) , maturity and interest rate and in any authorized denomination or Maturity Amount, in an aggregate amount equal to the unpaid principal amount or Maturity 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 13 . Each Bond delivered in accordance with this Section 13 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. 14 . 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 or Maturity Amount, bearing a number not contemporaneously outstanding. If any Bond is lost, apparently destroyed, or -8- wrongfully taken, the City, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall authorize and the Registrar shall authenticate and deliver a replacement Bond of like maturity, interest rate and principal amount or Maturity 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, printing 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 original Bond in lieu of which such replacement Bond was issued presents for payment such original Bond, the City and the Registrar shall be entitled to recover such replacement Bond from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the City or the Registrar in connection therewith. If any such mutilated, lost, 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 14 shall be entitled to the benefits and security of this -9- Ordinance to the same extent as the Bond or Bonds in lieu of which such replacement Bond is delivered. 15. 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 cancelled 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. 16. Optional Redemption. The City reserves the right, at its option, to redeem Bonds prior to maturity, in whole or from time to time in part, on September 1, 2000, or any date thereafter, at a price of, with respect to Current Interest Bonds, par plus accrued interest to the date fixed for redemption and, with respect to Capital Appreciation Bonds, 103% of the Accreted Value on the date fixed for redemption. Bonds 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 13 hereof, shall authenticate and deliver in exchange therefor a Bond or Bonds of like maturity and interest rate in an aggregate principal amount or Maturity Amount equal to the unredeemed portion of the Bond so surrendered. If less than all of the Bonds are to be redeemed, the City shall determine the amounts and maturities to be redeemed. Notice of any redemption identifying the Bonds to be redeemed 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 are to be redeemed, the numbers of the Bonds or portions thereof to be redeemed. Any notice given as provided in this Section 16 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 any 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 -10- 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. 17 . Forms. The form of the Bonds, including the form of the Registrar' s Authentication Certificate, the form of Assignment, the form of legend regarding bond insurance, and the form of Registration Certificate of the Comptroller, which shall be attached or affixed to the Bonds initially issued, shall be, respectively, substantially as follows, with such additions, deletions and variations as may be necessary or desirable and not prohibited by this Ordinance: FORM OF CURRENT INTEREST BONDS United States of America State of Texas NUMBER DENOMINATION $ REGISTERED REGISTERED CITY OF PEARLAND, TEXAS REFUNDING BOND SERIES 1990 INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP: October 1, 1990 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 date specified above, upon presentation and surrender of this Bond at the principal corporate trust office of First City, Texas - Houston, N.A. , 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 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 October 1, 1990, 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 March 1, 1991, mailed to the registered owner of record as of -11- the close of business on the 15th day of the calendar month next preceding each interest payment date (the "Record 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 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 (Back Panel of Bond) THIS BOND is one of a duly authorized issue of Bonds, aggregating $7 , 364 , 391. 80 (the "Bonds") , issued for the purpose of refunding a portion of the City' s outstanding Refunding Bonds, Series 1985, and pursuant to an ordinance adopted by the City Council on September 12 , 1990 (the "Ordinance") . The Bonds are issued as (i) Bonds in the aggregate principal amount of $949 , 391. 80 which pay interest only at maturity or prior redemption (the "Capital Appreciation Bonds") and (ii) Bonds in the aggregate principal amount of $6, 415, 000 which pay interest semiannually until maturity or prior redemption (the "Current Interest Bonds") . THE CITY RESERVES THE RIGHT, at its option, to redeem Bonds prior to their scheduled maturities, in whole or from time to time in part, in integral multiples of $5, 000, on September 1, 2000, or any date thereafter, at a price of, with respect to Current Interest Bonds, par plus accrued interest to the date fixed for redemption and, with respect to Capital Appreciation Bonds, 103% of the Accreted Value on the date fixed for redemption. Reference is made to the Ordinance for complete details concerning the manner of redeeming Bonds. NOTICE OF ANY REDEMPTION shall be given at least thirty (30) days prior to the date fixed for redemption by first class mail, addressed to the registered owners of each Bond to be redeemed in whole or in part at the address shown on the books of registration kept by the Registrar. When Bonds or portions thereof have been -12- called for redemption, and due provision has been made to redeem the same, the amounts so redeemed shall be payable solely from the funds provided for redemption, and interest which would otherwise accrue on the amounts called for redemption shall terminate on the date fixed for redemption. 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 conditions of the Ordinance. THE CURRENT INTEREST 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. 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, within the limits prescribed by law, sufficient to provide for the payment of the interest on and principal of this Bond, as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in the City, and have been pledged irrevocably for such payment. -13- FORM OF CAPITAL APPRECIATION BONDS United States of America State of Texas NUMBER DENOMINATION $ REGISTERED REGISTERED CITY OF PEARLAND, TEXAS REFUNDING BOND SERIES 1990 MATURITY DATE: ISSUANCE DATE: CUSIP: October 11, 1990 REGISTERED OWNER: MATURITY AMOUNT: DOLLARS The City of Pearland, Texas (the "City") promises to pay to the registered owner identified above, or registered assigns, on the date specified above, upon presentation and surrender of this Bond at the principal corporate trust office of First City, Texas- Houston, N.A. , Houston, Texas (the "Registrar") , the Maturity Amount identified above, representing the principal amount hereof and accrued and compounded interest hereon (both as shown in the table on the reverse of this Bond) , in any coin or currency of the United States of America which on the date of payment is legal tender for the payment of debts due the United States of America. The date of this Bond is October 1, 1990, but interest shall accrue on the principal amount hereof from the Issuance Date at the per annum rate specified on the Table of Accreted Values on the reverse hereof. The Accreted Value (per $5, 000 of Maturity Amount) of this Bond, as of the Issuance Date and as of each March 1 and September 1 is set forth on the reverse hereof. Such value as of any other date shall be determined by straight-line interpolation between such values. 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 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. -14- (AUTHENTICATION (SEAL) CITY OF PEARLAND, TEXAS CERTIFICATE) Mayor City Secretary (Back Panel of Bond) THIS BOND is one of a duly authorized issue of Bonds, aggregating $7 , 364 , 391. 80 (the "Bonds") , issued for the purpose of refunding a portion of the City's outstanding Refunding Bonds, Series 1985, and pursuant to an ordinance adopted by the City Council on September 12 , 1990 (the "Ordinance") . The Bonds are issued as (i) Bonds in the aggregate principal amount of $949, 391. 80 which pay interest only at maturity or prior redemption (the "Capital Appreciation Bonds") and (ii) Bonds in the aggregate principal amount of $6, 415, 000 which pay interest semiannually until maturity or prior redemption (the "Current Interest Bonds") . THE CITY RESERVES THE RIGHT, at its option, to redeem Bonds prior to their scheduled maturities, in whole or from time to time in part, in integral multiples of $5, 000, on September 1, 2000, or any date thereafter, at a price of, with respect to Current Interest Bonds, par plus accrued interest to the date fixed for redemption and, with respect to Capital Appreciation Bonds, 103% of the Accreted Value on the date fixed for redemption. Reference is made to the Ordinance for complete details concerning the manner of redeeming Bonds. NOTICE OF ANY REDEMPTION shall be given at least thirty (30) days prior to the date fixed for redemption by first class mail, addressed to the registered owners of each Bond to be redeemed in whole or in part at the address shown on the books of registration kept by the Registrar. When Bonds or portions thereof have been called for redemption, and due provision has been made to redeem the same, the amounts so redeemed shall be payable solely from the funds provided for redemption, and interest which would otherwise accrue on the amounts called for redemption shall terminate on the date fixed for redemption. 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 conditions of the Ordinance. -15- THE CAPITAL APPRECIATION BONDS ARE EXCHANGEABLE at the principal corporate trust office of the Registrar for Bonds in the maturity 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, within the limits prescribed by law, sufficient to provide for the payment of the interest on and principal of this Bond, as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in the City, and have been pledged irrevocably for such payment. -16- TABLE OF ACCRETED VALUES The Accreted Value and principal amount (per $5, 000 of Maturity Amount) , together with the interest rate are as follows: MATURITY (MARCH 1) 2008 2009 PRINCIPAL AMOUNT $1, 378. 15 $1, 268 . 40 INTEREST RATE 7. 55% 7 . 60% October 11, 1990 1, 378. 15 1, 268 . 40 March 1, 1991 1, 418 .46 1, 305. 77 September 1, 1991 1, 472 . 01 1, 355. 38 March 1, 1992 1, 527. 57 1, 406. 89 September 1, 1992 1, 585. 24 1, 460. 35 March 1, 1993 1, 645. 08 1, 515. 84 September 1, 1993 1, 707 . 18 1, 573 . 45 March 1, 1994 1, 771. 63 1, 633 . 24 September 1, 1994 1, 838. 51 1, 695. 30 March 1, 1995 1, 907 . 91 1, 759 . 72 September 1, 1995 1, 979. 94 1, 826. 59 March 1, 1996 2 , 054 . 68 1, 896. 00 September 1, 1996 2 , 132 . 24 1, 968 . 05 March 1, 1997 2 , 212 . 74 2 , 042 . 84 September 1, 1997 2 , 296. 27 2 , 120. 46 March 1, 1998 2 , 382 .95 2 , 201. 04 September 1, 1998 2 , 472 . 91 2 , 284 . 68 March 1, 1999 2 , 566. 26 2 , 371. 50 September 1, 1999 2 , 663 . 14 2 , 461. 62 March 1, 2000 2 , 763 . 67 2 , 555 . 16 September 1, 2000 2 , 868 . 00 2 , 652 . 25 March 1, 2001 2 , 976. 27 2 , 753 . 04 September 1, 2001 3 , 088 . 62 2 , 857 . 65 March 1, 2002 3 , 205. 21 2 , 966 . 25 September 1, 2002 3 , 326. 21 3 , 078 . 96 March 1, 2003 3 , 451. 78 3 , 195. 96 September 1, 2003 3 , 582 . 08 3 , 317 . 41 March 1, 2004 3 , 717 . 30 3 , 443 . 47 September 1, 2004 3 , 857 . 63 3 , 574 . 32 March 1, 2005 4 , 003 . 26 3 , 710. 15 September 1, 2005 4 , 154 . 38 3 , 851. 13 March 1, 2006 4 , 311. 21 3 , 997 . 48 September 1, 2006 4 , 473 . 96 4 , 149 . 38 March 1, 2007 4 , 642 . 85 4 , 307 . 06 September 1, 2007 4 , 818 . 12 4 , 470. 72 March 1, 2008 5, 000, 00 4 , 640. 61 September 1, 2008 4 , 816. 96 March 1, 2009 5, 000. 00 -17- 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 . xxxxxxxxxx Comptroller of Public Accounts of the State of Texas (SEAL) 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, 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. First City, Texas-Houston, N.A. By Authorized Signature Date of Authentication -18- 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 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. Form of Bond Insurance Legend STATEMENT OF INSURANCE Financial Guaranty Insurance Company ("Financial Guaranty") has issued a policy containing the following provisions with respect to the City of Pearland, Texas Refunding Bonds, Series 1990 (the "Bonds") , such policy being on file at the principal office of the Registrar, as paying agent (the "Paying Agent") : Financial Guaranty hereby unconditionally and irrevocably agrees to pay for disbursement to the Bondholders that portion of the principal (or the Accreted Value in the case of Capital Appreciation Bonds) of and interest on the Bonds which is then due for payment and which the issuer of the Bonds (the "Issuer") shall have failed to provide. Due for payment means, with respect to the principal (or the Accreted Value in the Case of Capital Appreciation Bonds) , the stated maturity date thereof, or the date on which the same shall have been duly called for mandatory sinking fund redemption, but not any earlier date on which the payment of principal (or the Accreted Value in the case of Capital -19- Appreciation Bonds) of the Bonds is due by reason of acceleration, and with respect to interest, the stated date for payment of such interest. Upon receipt of telephonic or telegraphic notice, subsequently confirmed in writing, or written notice by registered or certified mail, from a Bondholder or the Paying Agent to Financial Guaranty that the required payment of principal (or the Accreted Value in the case of Capital Appreciation Bonds) or interest has not been made by the Issuer to the Paying Agent, Financial Guaranty on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with Citibank, N.A. , or its successor as its agent (the "Fiscal Agent") , sufficient to make the portion of such payment not paid by the Issuer. Upon presentation to the Fiscal Agent of evidence satisfactory to it of the Bondholder' s right to receive such payment and any appropriate instruments of assignment required to vest all of such Bondholder' s right to such payment in Financial Guaranty, the Fiscal Agent will disburse such amount to the Bondholder. As used herein the term "Bondholder" means the person other than the Issuer who at the time of nonpayment of a Bond is entitled under the terms of such Bond to payment thereof. The policy is non-cancellable for any reason. FINANCIAL GUARANTY INSURANCE COMPANY 18 . Legal Opinion; Cusip Numbers. 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. 19 . Interest and Sinking Fund; Tax Levy. There is hereby established a separate fund of the City to be known as the Series 1990 Refunding Bonds Interest and Sinking Fund (the "Interest and Sinking 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, in the Interest and Sinking 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 time as other City taxes are assessed, levied and collected, in each year, beginning with the current year, a continuing direct annual ad valorem tax, within the limits prescribed by law, upon all taxable property in -20- the City, sufficient to pay the current interest on the Bonds as the same becomes due and to provide and maintain a sinking fund of not less than two percent of the principal amount of the Bonds or the amount required to pay each installment of principal of the Bonds as the same matures, whichever is greater, full allowance being made for delinquencies and costs of collection, and said taxes are hereby irrevocably pledged to the payment of the interest on and principal of the Bonds and to no other purpose. To pay the interest, coming due on the Bonds on March 1, 1991, there is hereby appropriated from current funds, which are hereby certified to be on hand and available for such purpose, an amount sufficient to make such payment, and such amount shall be used for no other purpose. 20. Further Proceedings. After the Bonds to be initially issued shall have been executed, it shall be the duty of the Mayor and other appropriate officials and agents of the City to deliver the Bonds to be initially issued and all pertinent records and proceedings to the Attorney General of the State of Texas, for examination and approval. After the Bonds to be initially issued shall have been approved by the Attorney General, they shall be delivered to the Comptroller for registration. Upon registration of the Bonds to be initially issued, the Comptroller (or the Comp- troller' 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. 21. Sale; Bond Purchase Agreement. The Bonds are hereby sold and shall be delivered to the Underwriter at a price of $7 , 231, 832 . 75 plus accrued interest to the date of delivery, in accordance with the terms of a bond purchase agreement of even date herewith, presented to and hereby approved by the City Council, which price and terms are hereby found and determined to be the most advantageous reasonably obtainable by the City. The Mayor and other appropriate officials of the City are hereby authorized and directed to execute such bond purchase agreement on behalf of the City, and the Mayor and all other officers, agents and rep- resentatives 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. 22 . Tax Exemption. (a) General Tax Covenant. The City intends that the interest on the Bonds shall be excludable from gross income for purposes of federal income taxation pursuant to sections 103 and 141 through 150 of the Code, and applicable regulations. The City covenants and agrees not to take any action, or knowingly omit to take any action within its control , that if -21- taken or omitted, respectively, would cause the interest on the Bonds to be includable in gross income, as defined in section 61 of the Code, of the Owners thereof for purposes of federal income taxation. In particular, the City covenants and agrees to comply with each requirement of this Section 22 ; provided, however, that the City shall not be required to comply with any particular requirement of this Section 22 if the City has received an opinion of nationally recognized bond counsel ("Counsel ' s Opinion") that such noncompliance will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or if the City has received a Counsel 's Opinion to the effect that compliance with some other requirement set forth in this Section 22 will satisfy the applicable requirements of the Code, in which case compliance with such other requirement specified in such Counsel ' s Opinion shall constitute compliance with the corresponding requirement specified in this Section 22 . (b) Use of Proceeds. The City covenants and agrees that its use of the Net Proceeds of the Bonds and the Refunded Bonds will at all times satisfy the following requirements: (i) The City will use all of the Net Proceeds of the Bonds to (A) acquire Escrowed Securities (as hereinafter defined) sufficient to pay the principal of and interest on the Refunded Bonds, and (B) to pay the costs of issuing the Bonds, except for amounts, if any, described in the Report as the rounding amount and the ending cash balance in the Escrow Fund (as hereinafter defined) . The City has limited and will limit the amount of original or investment proceeds of the Refunded Bonds to be used (other than use as a member of the general public) in the trade or business of any person other than a governmental unit to an amount aggregating no more than ten percent of the Net Proceeds of the Refunded Bonds ("private-use proceeds") . For purposes of this Section, the term "person" includes any individual, corporation, partnership, unincorporated 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, any activity other than an activity carried on by a governmental unit. Any use of proceeds of the Refunded Bonds in any manner contrary to the guide- lines set forth in Revenue Procedures 82-14 , 1982-1 C. B. 459, and 82-15, 1982-1 C.B. 460, including any revisions or amendments thereto, shall constitute -22- the use of such proceeds in the trade or business of one who is not a governmental unit; (ii) The City has not permitted and will not permit more than five percent of the Net Proceeds of the Refunded Bonds to be used in the trade or business of any person other than a governmen- tal unit if such use is unrelated to the governmental purpose of such Refunded Bonds. Further, the amount of private-use proceeds of the Refunded Bonds in excess of five percent of the Net Proceeds of the Refunded Bonds ("excess private-use proceeds") did not and will not exceed the proceeds of the Refunded Bonds expended for the governmental purpose of the Refunded Bonds to which such excess private-use proceeds relate; (iii) The City has not permitted and will not permit an amount of proceeds of the Refunded Bonds exceeding the lesser of (a) $5, 000, 000 or (b) five percent of the Net Proceeds of the Refunded Bonds to be used, directly or indi- rectly, to finance loans to persons other than governmental units. When used in this Section 22 , the term Net Proceeds of the Bonds and the Refunded Bonds shall mean the proceeds from the sale of each issue of the Bonds and the Refunded Bonds, respectively, including investment earnings on the proceeds of such issue, less accrued interest with respect to such issue. (c) No Federal Guaranty. The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that, if taken or omitted, respectively, would cause the Bonds to be "federally guaranteed" within the meaning of section 149 (b) of the Code and applicable regulations thereunder, except as permitted by section 149 (b) (3) of the Code and such regulations. (d) Bonds are not Hedge Bonds. The City covenants and agrees that not more than 50 percent of the proceeds of the Bonds will be invested in nonpurpose investments (as defined in section 148 (f) (6) (A) of the Code) having a substantially guaranteed yield for four years or more within the meaning of section 149 (g) (3) (A) (ii) of the Code, and the City reasonably expects that at least 85 percent of the spendable proceeds of the Bonds will be used to carry out the governmental purposes of the Bonds within the three-year period beginning on the date the Bonds are issued. -23- (e) No-Arbitrage Covenant. The City shall certify, through an authorized officer, employee or agent, that based upon all facts and estimates known or reasonably expected to be in existence on the date the Bonds are delivered, the City will reasonably expect that the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of section 148 (a) of the Code and applicable regulations thereunder. Moreover, the City covenants and agrees that it will make such use of the proceeds of the Bonds including interest or other investment income derived from Bond proceeds, regulate investments of proceeds of the Bonds, and take such other and further action as may be required so that the Bonds will not be "arbitrage bonds" within the meaning of section 148 (a) of the Code and applicable regulations thereunder. (f) Arbitrage Rebate. 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 (within the meaning of section 148 (f) (6) (B) of the Code) , be rebated to the federal government. Specifically, the City will (i) maintain records regarding the investment of the gross proceeds of the Bonds as may be required to calculate the amount earned on the investment of the gross proceeds of the Bonds separately from records of amounts on deposit in the funds and accounts of the City allocable to other obligations of the City or moneys which do not represent gross proceeds of any obligations of the City, (ii) calculate at such times as are required by applicable regulations, the amount earned from the investment of the gross proceeds of the Bonds which is required to be rebated to the federal government, and (iii) pay, not less often than every fifth anniversary date of the delivery of the Bonds, or on such other dates as may be permitted by applicable regulations, all amounts required to be rebated to the federal government. Further, the City will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the gross proceeds of the Bonds that might result in a reduction in the amount required to be paid to the federal government because such arrangement results in a smaller profit or larger loss than would have resulted if the arrangement had been at arms length and had the yield on the issue not been relevant to either party. (g) Information Reporting. The City covenants and agrees to file or cause to be filed with the Secretary of the Treasury, not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Bonds are issued, an information statement concerning the Bonds, all under and in accordance with section 149 (e) of the Code and applicable regulations thereunder. -24- 23 . 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 1990, 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 1990, including the Bonds, will not exceed $10, 000, 000. For purposes of this Section 23 , 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 23 , the City includes all governmental units which are aggregated with the City under the Code. 24 . Selection of Refunded Bonds. The Escrow Agent is hereby designated as the City' s agent to select bonds to be refunded and is hereby authorized and directed to select the particular bonds to be refunded by lot or by such other random method determined by the Escrow Agent, from each maturity in which the Refunded Bonds constitute less than all of the bonds of such maturity. The Escrow Agent is further authorized and directed to give and publish notices identifying the Refunded Bonds in the same manner and at the same times required for the redemption of bonds by the ordinance authorizing the issuance of the Refunded Bonds. 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 shall be deposited into the Interest and Sinking Fund. (b) The remaining proceeds from the sale of the Bonds shall be applied to establish an escrow fund to refund the Refunded Bonds, as more fully provided below, and, to the extent not otherwise provided for, to pay all expenses arising in connection with the issuance of the Bonds, the establishment of such escrow fund and the refunding of the Refunded Bonds. Any proceeds of the Bonds remaining after making all such deposits and payments shall be deposited into the Interest and Sinking Fund. 26. Escrow Agreement. 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 First City, Texas-Houston, N.A. , Houston, Texas, as Escrow Agent, which shall be substantially in the form attached hereto as Exhibit A, the terms and provisions of which are hereby -25- approved, subject to such insertions, additions and modifications as shall be necessary (a) to carry out the program designed for the City by Rauscher Pierce Refsnes, Inc. , and which shall be certified as to mathematical accuracy by KPMG Peat Marwick, Certified Public Accountants, whose Report shall be attached to the Escrow Agreement (b) to maximize the City' s present value savings and/or to minimize the City' s costs of refunding, (c) to comply with all applicable laws and regulations relating to the refunding of the Refunded Bonds and (d) to carry out the other intents and purposes of this Ordinance, and the Mayor or Mayor Pro Tem 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 hereby irrevocably exercises its option to call Refunded Bonds for redemption prior to maturity on March 1, 1995, at a price of par plus accrued interest to the date fixed for redemption. The amounts and maturities of the bonds to be so redeemed shall be as follows: Maturity Date Amount Redeemed March 1, 1996 $1, 190, 000 March 1, 1997 1, 280, 000 March 1, 1998 415, 000 March 1, 1999 345, 000 March 1, 2000 295, 000 March 1, 2001 225, 000 The City hereby designates the Escrow Agent as the City' s agent for the purpose of selecting the particular bonds within each of the above maturities to be redeemed, and authorizes and directs the Escrow Agent to make such selection by lot or other random method and to give and publish notices of such redemption in the manner and at the times required by the ordinance authorizing the issuance of the Refunded Bonds. 28 . Purchase of United States Treasury Obligations. To assure the purchase of the Escrowed Securities referred to in the Escrow Agreement, the Mayor or Mayor Pro Tem, the City Manager, and the Escrow Agent are hereby authorized to subscribe for, agree to purchase, and purchase non-callable obligations of the United States of America, 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. -26- 29 . 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 Tem, the City Manager, the City Secretary or an Assistant City Secretary, 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 such Escrow Agreement and this Ordinance. 30. 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. 31. Official Statement. The City Council ratifies and confirms its prior approval of the form and content of the Preliminary Official Statement prepared in the initial offering and sale of the Bonds and hereby authorizes the preparation of a final Official Statement reflecting the terms of the bond purchase agreement with the Underwriter and other relevant matters. The use of such Official Statement in the reoffering of the Bonds by the Underwriter 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. 32 . 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. 33 . Open Meeting. It is hereby officially found and determined that the meeting at which this Ordinance was adopted was open to the public, and that public notice of the time, place and purpose of said meeting was given, all as required by Article 6252-17, Vernon' s Texas Civil Statutes, as amended. 34 . Emergency. 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 exists, the specific emergency being that the proceeds of the Bonds are needed as soon as possible to restructure -27- the City's debt service, and that this Ordinance be passed and approved on the date of its introduction. PASSED AND APPROVED on first reading pursuant to Section 3 . 10 of the City Charter this 12th day of September, 1990. /s/ C. V. Coppinger Mayor City of Pearland, Texas ATTEST: /s/ Kay Krouse City Secretary City of Pearland, Texas (SEAL) -28- EXHIBIT "A" ESCROW AGREEMENT THIS ESCROW AGREEMENT (the "Escrow Agreement") dated for convenience September 12 , 1990, but effective on the Escrow Funding Date described herein, is made and entered into by and between the City of Pearland, Texas, an incorporated city of the State of Texas (the "City") , and First City, Texas-Houston, N.A. , Houston, Texas (the "Escrow Agent") . WHEREAS, the City has heretofore issued and there remain outstanding the City' s Refunding Bonds Series 1985, dated August 15, 1985 ; and WHEREAS, the City desires to refund in advance of maturity a portion of such bonds in the total aggregate principal amount of $6, 795, 000 (the "Refunded Bonds") ; and WHEREAS, Article 717k, Vernon's Texas Civil Statues, as amended, authorizes and empowers the City to deposit the proceeds of refunding bonds payable from ad valorem taxes of the City, together with other available funds or resources, with any place of payment for the Refunded Bonds in an amount which is sufficient to provide for the payment or redemption of the principal of and interest on the Refunded Bonds; and WHEREAS, the City Council of the City has adopted an ordinance authorizing the issuance of the City' s Refunding Bonds, Series 1990, in the aggregate principal amount of $7 , 364 , 391. 80 (the "Refunding Bonds") , for the purpose of providing the funds necessary to refund the Refunded Bonds; and WHEREAS, the City Council of the City has further determined to effectuate the advance refunding of the Refunded Bonds pursuant to this Escrow Agreement, under which provision is made for the safekeeping, investment, reinvestment, administration and disposition of the proceeds of the Refunding Bonds, so as to provide firm banking and financial arrangements for the discharge and final payment or redemption of the Refunded Bonds; NOW, THEREFORE, in consideration of the mutual undertakings, promises and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to secure the full and timely payment of the principal of and the interest on the Refunded Bonds, the City and the Escrow Agent contract and agree as follows: ARTICLE I DEFINITIONS AND INTERPRETATIONS Section 1. 01. Definitions. Unless otherwise expressly provided or unless the context clearly requires otherwise, the following terms shall have the respective meanings specified below for all purposes of this Escrow Agreement: "City" shall mean the City of Pearland, Texas, and any successor to its duties and functions. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the applicable regulations thereunder and under the Internal Revenue Code of 1954 . "Escrow Agent" shall mean First City, Texas-Houston, N.A. , in its capacity as escrow agent hereunder, and any successor or assign in such capacity. "Escrow Agreement" shall mean this escrow agreement by and between the City and the Escrow Agent. "Escrow Fund" shall mean the fund created in Section 3 . 01 of this Escrow Agreement to be administered by the Escrow Agent pursuant to the provisions of this Escrow Agreement. "Escrow Funding Date" shall mean the date on which the City deposits with the Escrow Agent the cash and Escrowed Securities described in Section 2 . 01. "Escrowed Securities" shall mean the United States Treasury Securities, State and Local Government Series, initially purchased with proceeds of the Refunding Bonds, all as more fully described in the Report. "Paying Agent for the Refunded Bonds" shall mean First City, Texas-Houston, N.A. , Houston, Texas (formerly First City National Bank of Houston, Houston, Texas) . "Refunded Bond Ordinance" shall mean the City' s ordinance authorizing the issuance, sale and delivery of the Refunded Bonds. "Refunded Bonds" shall mean the City's Refunding Bonds, Series 1985, dated August 15, 1985, in the aggregate principal amount of $6, 795, 000, maturing on March 1 in the following years and amounts: -2- 1991 $ 260, 000 1992 565, 000 1993 575, 000 1994 525, 000 1995 1, 120, 000 1996 1, 190, 000 1997 1, 280, 000 1998 415, 000 1999 345, 000 2000 295, 000 2001 225, 000 "Refunding Bonds" shall mean the City' s Refunding Bonds, Series 1990, dated October 1, 1990, in the initial aggregate principal amount of $7, 364 , 391. 80. "Refunding Bond Ordinance" shall mean the City' s Ordinance adopted September 12 , 1990, authorizing the issuance, sale and delivery of the Refunding Bonds. "Report" shall mean the verification report prepared by KPMG Peat Marwick relating to the advance refunding of the Refunded Bonds, a copy of which is attached hereto as Exhibit A, and any subsequent report required by Section 4 . 02 . Section 1. 02 . Interpretations. The titles and headings of the articles and sections of this Escrow Agreement have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict the terms hereof. This Escrow Agreement and all of the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to achieve the intended purpose of providing for the refunding of the Refunded Bonds in accordance with applicable law. ARTICLE II DEPOSIT OF FUNDS AND ESCROWED SECURITIES Section 2 . 01. Deposits with Escrow Agent; Acquisition of Escrowed Securities. On the Escrow Funding Date there will be deposited, with the Escrow Agent the following: (a) Escrowed Securities in the principal amount of $ , purchased with proceeds of the Refunding Bonds; and (b) A beginning cash balance of $ -3- ARTICLE III CREATION AND OPERATION OF ESCROW FUND Section 3 . 01. Escrow Fund. On the Escrow Funding Date the Escrow Agent will create on its books a special fund and irrevocable escrow to be known as the City of Pearland, Texas, Refunding Bonds, Series 1990 Escrow Fund, into which will be deposited the Escrowed Securities described in Section 2 . 01. The Escrowed Securities, all proceeds therefrom and all cash balances from time to time on deposit in the Escrow Fund shall be the property of the Escrow Fund, and shall be applied only in strict conformity with the terms and conditions hereof. The Escrowed Securities, all proceeds therefrom and all cash balances from time to time on deposit in the Escrow Fund are hereby irrevocably pledged to the payment of the principal of and interest on the Refunded Bonds, which payment shall be made by timely transfers to the Paying Agent for the Refunded Bonds of such amounts at such times as are provided in Section 3 . 02 hereof. When the final transfers have been made to the Paying Agent for the Refunded Bonds for the payment of such principal of and interest on the Refunded Bonds, any balance then remaining in the Escrow Fund shall be transferred to the City, and the Escrow Agent shall thereupon be discharged from any further duties hereunder. Section 3 . 02 . Payment of Principal of and Interest on Refunded Bonds. (a) The Escrow Agent is hereby irrevocably instructed to transfer to the Paying Agent for the Refunded Bonds from the cash balance from time to time on deposit in the Escrow Fund the amounts required to pay the principal of and interest on the Refunded Bonds as the same become due and payable, all as provided in the Report. (b) Money transferred to and held by the Paying Agent for the Refunded Bonds in accordance with the provisions hereof shall be held by the Paying Agent for the Refunded Bonds as a separate trust fund for the account of the respective holders of the Refunded Bonds in connection with which such money is held; provided, however, that money so held remaining unclaimed by the owners of such Refunded Bonds for three (3) years after the dates on which payment thereon was due, shall be reported and disposed of in accordance with the provisions of Texas law including, to the extent applicable, Title 6 of the Texas Property Code, as amended. Section 3 . 03 . Sufficiency of Escrow Fund. The City represents (based solely upon the Report) that the successive receipts of the principal of and interest on the Escrowed Securities will assure that the cash balance on deposit from time to time in the Escrow Fund will be at all times sufficient to provide money for transfer to the Paying Agent for the Refunded -4- Bonds at the times and in the amounts required to pay the interest on the Refunded Bonds as such interest comes due and to pay the principal of the Refunded Bonds as the Refunded Bonds mature or are redeemed. Section 3 . 04 . Escrow Fund. The Escrow Agent at all times shall hold the Escrow Fund, the Escrowed Securities and all other assets of the Escrow Fund wholly segregated from all other funds and securities on deposit with the Escrow Agent; it shall never allow the Escrowed Securities or any other assets of the Escrow Fund to be commingled with any other funds or securities of the Escrow Agent; and it shall hold and dispose of the assets of the Escrow Fund only as set forth herein. The Escrowed Securities and other assets of the Escrow Fund always shall be maintained by the Escrow Agent for the benefit of the holders of the Refunded Bonds; and a special account therefor evidencing such fact shall be maintained at all times on the books of the Escrow Agent. The holders of the Refunded Bonds shall be entitled to the same preferred claim and first lien upon the Escrowed Securities, the proceeds thereof and all other assets of the Escrow Fund as are enjoyed by other beneficiaries of similar accounts. The amounts received by the Escrow Agent under this Escrow Agreement shall not be considered as a banking deposit by the City, and the Escrow Agent shall have no right or title with respect thereto except as escrow agent under the terms hereof. The amounts received by the Escrow Agent hereunder shall not be subject to warrants, drafts or checks drawn by the City. Section 3 . 05. Security for Cash Balances. Cash balances from time to time on deposit in the Escrow Fund, to the extent not insured by the Federal Deposit Insurance Corporation or its successor, shall be continuously secured by a pledge of direct obligations of, or obligations unconditionally guaranteed by, the United States of America, held by an independent third party, and having a market value at least equal to such cash balances. ARTICLE IV REDEMPTION OF CERTAIN REFUNDED BONDS PRIOR TO MATURITY Section 4 . 01. Optional Redemption. The City has irrevocably exercised its option to call the Refunded Bonds described below for redemption prior to maturity on March 1, 1995, at a price of par plus accrued interest to the date fixed for redemption, as set forth below. Such optional redemption shall be carried out by the Paying Agent for the Refunded Bonds in accordance with the Refunded Bond Ordinance. The Escrow Agent is hereby authorized to provide funds therefor as set forth in Section 3 . 02 (a) hereof. -5- Maturity Date Amount Redeemed March 1, 1996 $1, 190, 000 March 1, 1997 1, 280, 000 March 1, 1998 415, 000 March 1, 1999 345, 000 March 1, 2000 295, 000 March 1, 2001 225, 000 ARTICLE V LIMITATION ON INVESTMENTS Section 5 . 01. General. Except as herein otherwise expressly provided, the Escrow Agent shall not have any power or duty to invest any money held hereunder; or to make substitutions of the Escrowed Securities; or to sell, transfer or otherwise dispose of the Escrowed Securities. Section 5 . 02 . Substitution of Securities. At the written request of the City, and upon compliance with the conditions hereinafter stated, the Escrow Agent shall sell , transfer, otherwise dispose of or request the redemption of all or any portion of the Escrowed Securities and apply the proceeds therefrom to purchase non-callable direct obligations of the United States of America and which do not permit the redemption thereof at the option of the obligor. Any such transaction may be effected by the Escrow Agent only if (1) the Escrow Agent shall have received a written opinion from a nationally recognized firm of certified public accountants acceptable to the City and the Escrow Agent that such transaction will not cause the amount of money and securities in the Escrow Fund to be reduced below an amount which will be sufficient, when added to the interest to accrue thereon, to provide for the payment of principal and interest on the remaining Refunded Bonds as they become due, and (2) the Escrow Agent shall have received the unqualified written legal opinion of nationally recognized bond counsel or tax counsel acceptable to the City and the Escrow Agent to the effect that (i) such transaction will not adversely affect the tax-exempt status of the Bonds or the Refunded Bonds, and (ii) that such transaction complies with the Constitution and laws of the State of Texas and with all relevant documents relating to the issuance of the Refunded Bonds and the Refunding Bonds. ARTICLE VI RECORDS AND REPORTS Section 6. 01. Records. The Escrow Agent shall keep books of record and account in which complete and correct entries shall be made of all transactions relating to the receipts, disbursements, -6- allocations and application of the money and Escrowed Securities deposited to the Escrow Fund and all proceeds thereof, and such books shall be available for inspection at reasonable hours and under reasonable conditions by the City and the holders of the Refunded Bonds. Section 6. 02 . Reports. For the period beginning on the Escrow Funding Date and ending on March 1, 1991, and for each twelve (12) month period thereafter while this Agreement remains in effect, the Escrow Agent shall prepare and send to the City, at the City' s request, within thirty (30) days following the end of such period a written report summarizing all transactions relating to the Escrow Fund during such period, including, without limitation, credits to the Escrow Fund as a result of interest payments on or maturities of the Escrowed Securities and transfers from the Escrow Fund to the Paying Agent for the Refunded Bonds or otherwise, together with a detailed statement of all Escrowed Securities and the cash balance on deposit in the Escrow Fund as of the end of such period. Section 6. 03 . Notification. The Escrow Agent shall notify the City immediately if at any time during the term of this agreement it determines that there is insufficient cash and Escrowed Securities in the Escrow Fund to provide for the transfer to the Paying Agents for the Refunded Bonds for timely payment of all interest on and principal of the Refunded Bonds. ARTICLE VII CONCERNING THE ESCROW AGENT Section 7 . 01. Representations. The Escrow Agent hereby represents that it has all necessary power and authority to enter into this Escrow Agreement and undertake the obligations and responsibilities imposed upon it herein, and that it will carry out all of its obligations hereunder. Section 7 . 02 . Limitation on Liability. The Escrow Agent shall not be liable for any action taken or neglected to be taken in good faith in the exercise of reasonable care and believed to be within the discretion or power conferred by this Escrow Agreement, nor shall it be responsible for the consequences of any error of judgment; and it shall not be answerable except for its own neglect or default, nor for any loss unless the same shall have been through its negligence or want of good faith. The liability of the Escrow Agent to transfer funds to the Paying Agent for the Refunded Bonds for the payments of the principal of and interest on the Refunded Bonds shall be limited to the proceeds of the Escrowed Securities and the cash balances -7- from time to time on deposit in the Escrow Fund. Notwithstanding any provision contained herein to the contrary, the Escrow Agent shall have no liability whatsoever for the insufficiency of funds from time to time in the Escrow Fund or any failure of the obligor of the Escrowed Securities to make timely payment thereon, except for the obligation to notify the City promptly of any such occurrence. The recitals herein and in the proceedings authorizing the Refunding Bonds shall be taken as the statements of the City and shall not be considered as made by, or imposing any obligation or liability upon, the Escrow Agent. In its capacity as Escrow Agent, it is agreed that the Escrow Agent need look only to the terms and provisions of this Escrow Agreement. The Escrow Agent makes no representation as to the value, condition or sufficiency of the Escrow Fund, or any part thereof, or as to the title of the City thereto, or as to the security afforded thereby or hereby, and the Escrow Agent shall incur no liability or responsibility with respect to any of such matters. It is the intention of the City and the Escrow Agent that the Escrow Agent shall never be required to use or advance its own funds or otherwise incur personal financial liability in the performance of any of its duties or the exercise of any of its rights and powers hereunder. Unless it is specifically provided otherwise herein, the Escrow Agent has no duty to determine or inquire into the happening or occurrence of any event or contingency or the performance or failure of performance of the City with respect to arrangements or contracts with others, with the Escrow Agent ' s sole duty hereunder being to safeguard the Escrow Fund and to dispose of and deliver the same in accordance with this Escrow Agreement. If, however, the Escrow Agent is called upon by the terms of this Escrow Agreement to determine the occurrence of any event or contingency, the Escrow Agent shall be obligated, in making such determination, only to exercise reasonable care and diligence, and in event of error in making such determination the Escrow Agent shall be liable only for its own misconduct or its negligence. In determining the occurrence of any such event or contingency the Escrow Agent may request from the City or any other person such reasonable additional evidence as the Escrow Agent in its discretion may deem necessary to determine any fact relating to the occurrence of such event or contingency, and in this connection may make inquiries of, and consult with the City, among others, at any time. Section 7 . 03 . Compensation. (a) On the Escrow Funding Date the City will pay the Escrow Agent, as a fee for performing the services hereunder and for all expenses incurred or to be incurred -8- by the Escrow Agent in the administration of this Escrow Agreement, and for its services in its capacity as a Paying Agent for the Refunded Bonds, the sum of $ . If the Escrow Agent is requested to perform any extraordinary services hereunder, the City hereby agrees to pay reasonable fees to the Escrow Agent for such extraordinary services and to reimburse the Escrow Agent for all expenses incurred by the Escrow Agent in performing such extraordinary services. It is expressly provided that the Escrow Agent shall look only to the City for the payment of such additional fees and reimbursement of such additional expenses. The Escrow Agent hereby agrees that in no event shall it ever assert any claim or lien against the Escrow Fund for any fees for its services, whether regular, additional or extraordinary, as Escrow Agent, or in any other capacity, or for reimbursement for any of its expenses. Section 7 . 04 . Successor Escrow Agents. If at any time the Escrow Agent or its legal successor or successors should cease to be the Escrow Agent hereunder, a vacancy shall forthwith exist hereunder in the office of the Escrow Agent. Any successor Escrow Agent appointed by the City shall succeed, without further act, to all the rights, immunities, powers and trusts of the predecessor Escrow Agent hereunder. Upon the request of any such successor Escrow Agent, the City shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor Escrow Agent all such immunities, rights, powers and duties. The Escrow Agent shall pay over to its successor Escrow Agent a proportional part of the Escrow Agent ' s fee hereunder equal to the portion of such fee attributable to duties to be performed after the date of succession. The Escrow Agent at the time acting hereunder may at any time resign and be discharged from the trust hereby created by giving not less than sixty (60) days written notice to the City and publishing notice thereof, specifying the date when such resignation will take effect, in a newspaper printed in the English language and with general circulation in New York, New York, such publication to be made at least once a week for three (3) consecutive calendar weeks prior to the date when the resignation is to take effect. No such resignation shall take effect unless a successor Escrow Agent shall have been appointed by the holders of the Refunded Bonds or by the City as herein provided and such successor Escrow Agent shall have accepted such appointment, in which event such resignation shall take effect immediately upon the appointment and acceptance of a successor Escrow Agent. -9- ARTICLE VIII MISCELLANEOUS Section 8 . 01. Notices. Any notice, authorization, request, or demand required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when mailed by registered or certified mail, postage prepaid addressed as follows: To the Escrow Agent: First City, Texas-Houston, N.A. P. O. Box 809 Houston, TX 77001 Attention: Corporate Trust Department To the City: City of Pearland P. O. Box 2068 Pearland, TX 77588-2068 Attention: Mayor The United States Post Office registered or certified mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date and fact of delivery. Any party hereto may change the address to which notices are to be delivered by giving to the other parties not less than ten days prior notice thereof. Section 8 . 02 . Termination of Escrow Agent ' s Obligations. Upon the taking by the Escrow Agent of all the actions as described herein, the Escrow Agent shall have no further obligations or responsibilities hereunder to the City, the holders of the Refunded Bonds or to any other person or persons in connection with this Escrow Agreement. Section 8 . 03 . Binding Agreement. This Escrow Agreement shall be binding upon the City, and the Escrow Agent and their respective successors and legal representatives, and shall inure solely to the benefit of the holders of the Refunded Bonds, the City, the Escrow Agent and their respective successors and legal representatives. Section 8 . 04 . Severability. In case any one or more of the provisions contained in this Escrow Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Escrow Agreement, but this Escrow Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. -10- Section 8 . 05. Governing Law. This Escrow Agreement shall be governed exclusively by the provisions hereof and by the applicable laws of the State of Texas. Section 8 . 06. Time of Essence. Time shall be of the essence in the performance of obligations from time to time imposed upon the Escrow Agent by this Escrow Agreement. Executed as of September 12 , 1990, but effective as set forth herein. CITY OF PEARLAND, TEXAS Mayor ATTEST: City Secretary (SEAL) FIRST CITY, TEXAS-HOUSTON, N.A. as Escrow Agent By: Title: ATTEST: By: Title: (SEAL) ESCROW AGREEMENT THIS ESCROW AGREEMENT (the "Escrow Agreement") dated for convenience September 12 , 1990, but effective on the Escrow Funding Date described herein, is made and entered into by and between the City of Pearland, Texas, an incorporated city of the State of Texas (the "City") , and First City, Texas-Houston, N.A. , Houston, Texas (the "Escrow Agent") . WHEREAS, the City has heretofore issued and there remain outstanding the City' s Refunding Bonds Series 1985 , dated August 15, 1985 ; and WHEREAS, the City desires to refund in advance of maturity a portion of such bonds in the total aggregate principal amount of $6, 795, 000 (the "Refunded Bonds") ; and WHEREAS, Article 717k, Vernon' s Texas Civil Statues, as amended, authorizes and empowers the City to deposit the proceeds of refunding bonds payable from ad valorem taxes of the City, together with other available funds or resources, with any place of payment for the Refunded Bonds in an amount which is sufficient to provide for the payment or redemption of the principal of and interest on the Refunded Bonds; and WHEREAS, the City Council of the City has adopted an ordinance authorizing the issuance of the City' s Refunding Bonds, Series 1990 , in the aggregate principal amount of $7 , 364 , 391. 80 (the "Refunding Bonds") , for the purpose of providing the funds necessary to refund the Refunded Bonds; and WHEREAS , the City Council of the City has further determined to effectuate the advance refunding of the Refunded Bonds pursuant to this Escrow Agreement, under which provision is made for the safekeeping, investment, reinvestment, administration and disposition of the proceeds of the Refunding Bonds, so as to provide firm banking and financial arrangements for the discharge and final payment or redemption of the Refunded Bonds; NOW, THEREFORE, in consideration of the mutual undertakings, promises and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to secure the full and timely payment of the principal of and the interest on the Refunded Bonds, the City and the Escrow Agent contract and agree as follows: ARTICLE I DEFINITIONS AND INTERPRETATIONS Section 1. 01. Definitions. Unless otherwise expressly provided or unless the context clearly requires otherwise, the following terms shall have the respective meanings specified below for all purposes of this Escrow Agreement: "City" shall mean the City of Pearland, Texas, and anv successor to its duties and functions. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the applicable regulations thereunder and under the Internal Revenue Code of 1954 . "Escrow Agent" shall mean First City, Texas-Houston, N.A. , in its capacity as escrow agent hereunder, and any successor or assign in such capacity. "Escrow Agreement" shall mean this escrow agreement by and between the City and the Escrow Agent. "Escrow Fund" shall mean the fund created in Section 3 . 01 of this Escrow Agreement to be administered by the Escrow Agent pursuant to the provisions of this Escrow Agreement. "Escrow Funding Date" shall mean the date on which the City deposits with the Escrow Agent the cash and Escrowed Securities described in Section 2 . 01. "Escrowed Securities" shall mean the United States Treasury Securities, State and Local Government Series, initially purchased with proceeds of the Refunding Bonds, all as more fully described in the Report. "Paying Agent for the Refunded Bonds" shall mean First City, Texas-Houston, N.A. , Houston, Texas (formerly First City National Bank of Houston, Houston, Texas) . "Refunded Bond Ordinance" shall mean the City' s ordinance authorizing the issuance, sale and delivery of the Refunded Bonds. "Refunded Bonds" shall mean the City' s Refunding Bonds, Series 1985, dated August 15, 1985, in the aggregate principal amount of $6, 795, 000, maturing on March 1 in the following years and amounts: -2- 1991 $ 260, 000 1992 565, 000 1993 575, 000 1994 525, 000 1995 1, 120, 000 1996 1, 190, 000 1997 1, 280, 000 1998 415, 000 1999 345, 000 2000 295, 000 2001 225, 000 "Refunding Bonds" shall mean the City's Refunding Bonds, Series 1990, dated October 1, 1990, in the initial aggregate principal amount of $7 , 364 , 391. 80. "Refunding Bond Ordinance" shall mean the City' s Ordinance adopted September 12 , 1990, authorizing the issuance, sale and delivery of the Refunding Bonds. "Report" shall mean the verification report prepared by KPMG Peat Marwick relating to the advance refunding of the Refunded Bonds, a copy of which is attached hereto as Exhibit A, and any subsequent report required by Section 4 . 02 . Section 1 . 02 . Interpretations. The titles and headings of the articles and sections of this Escrow Agreement have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict the terms hereof. This Escrow Agreement and all of the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to achieve the intended purpose of providing for the refunding of the Refunded Bonds in accordance with applicable law. ARTICLE II DEPOSIT OF FUNDS AND ESCROWED SECURITIES Section 2 . 01. Deposits with Escrow Agent; Acquisition, of Escrowed Securities. On the Escrow Funding Date there will be deposited, with the Escrow Agent the following: (a) Escrowed Securities in the principal amount of $7, 104 , 900, purchased with proceeds of the Refunding Bonds; and (b) A beginning cash balance of $31. 08 . -3- ARTICLE III CREATION AND OPERATION OF ESCROW FUND Section 3 . 01. Escrow Fund. On the Escrow Funding Date the Escrow Agent will create on its books a special fund and irrevocable escrow to be known as the City of Pearland, Texas, Refunding Bonds, Series 1990 Escrow Fund, into which will be deposited the Escrowed Securities described in Section 2 . 01. The Escrowed Securities, all proceeds therefrom and all cash balances from time to time on deposit in the Escrow Fund shall be the property of the Escrow Fund, and shall be applied only in strict conformity with the terms and conditions hereof. The Escrowed Securities, all proceeds therefrom and all cash balances from time to time on deposit in the Escrow Fund are hereby irrevocably pledged to the payment of the principal of and interest on the Refunded Bonds, which payment shall be made by timely transfers to the Paying Agent for the Refunded Bonds of such amounts at such times as are provided in Section 3 . 02 hereof. When the final transfers have been made to the Paying Agent for the Refunded Bonds for the payment of such principal of and interest on the Refunded Bonds, any balance then remaining in the Escrow Fund shall be transferred to the City, and the Escrow Agent shall thereupon be discharged from any further duties hereunder. Section 3 . 02 . Payment of Principal of and Interest on Refunded Bonds. (a) The Escrow Agent is hereby irrevocably instructed to transfer to the Paying Agent for the Refunded Bonds from the cash balance from time to time on deposit in the Escrow Fund the amounts required to pay the principal of and interest on the Refunded Bonds as the same become due and payable, all as provided in the Report. (b) Money transferred to and held by the Paying Agent for the Refunded Bonds in accordance with the provisions hereof shall be held by the Paying Agent for the Refunded Bonds as a separate trust fund for the account of the respective holders of the Refunded Bonds in connection with which such money is held; provided, however, that money so held remaining unclaimed by the owners of such Refunded Bonds for three (3) years after the dates on which payment thereon was due, shall be reported and disposed of in accordance with the provisions of Texas law including, to the extent applicable, Title 6 of the Texas Property Code, as amended. Section 3 . 03 . Sufficiency of Escrow Fund. The City represents (based solely upon the Report) that the successive receipts of the principal of and interest on the Escrowed Securities will assure that the cash balance on deposit from time to time in the Escrow Fund will be at all times sufficient to provide money for transfer to the Paying Agent for the Refunded -4- Bonds at the times and in the amounts required to pay the interest on the Refunded Bonds as such interest comes due and to pay the principal of the Refunded Bonds as the Refunded Bonds mature or are redeemed. Section 3 . 04 . Escrow Fund. The Escrow Agent at all times shall hold the Escrow Fund, the Escrowed Securities and all other assets of the Escrow Fund wholly segregated from all other funds and securities on deposit with the Escrow Agent; it shall never allow the Escrowed Securities or any other assets of the Escrow Fund to be commingled with any other funds or securities of the Escrow Agent; and it shall hold and dispose of the assets of the Escrow Fund only as set forth herein. The Escrowed Securities and other assets of the Escrow Fund always shall be maintained by the Escrow Agent for the benefit of the holders of the Refunded Bonds; and a special account therefor evidencing such fact shall be maintained at all times on the books of the Escrow Agent. The holders of the Refunded Bonds shall be entitled to the same preferred claim and first lien upon the Escrowed Securities, the proceeds thereof and all other assets of the Escrow Fund as are enjoyed by other beneficiaries of similar accounts. The amounts received by the Escrow Agent under this Escrow Agreement shall not be considered as a banking deposit by the City, and the Escrow Agent shall have no right or title with respect thereto except as escrow agent under the terms hereof. The amounts received by the Escrow Agent hereunder shall not be subject to warrants, drafts or checks drawn by the City. Section 3 . 05 . Security for Cash Balances. Cash balances from time to time on deposit in the Escrow Fund, to the extent not insured by the Federal Deposit Insurance Corporation or its successor, shall be continuously secured by a pledge of direct obligations of, or obligations unconditionally guaranteed by, the United States of America, held by an independent third party, and having a market value at least equal to such cash balances. ARTICLE IV REDEMPTION OF CERTAIN REFUNDED BONDS PRIOR TO MATURITY Section 4 . 01. Optional Redemption. The City has irrevocably exercised its option to call the Refunded Bonds described below for redemption prior to maturity on March 1, 1995, at a price of par plus accrued interest to the date fixed for redemption, as set forth below. Such optional redemption shall be carried out by the Paying Agent for the Refunded Bonds in accordance with the Refunded Bond Ordinance. The Escrow Agent is hereby authorized to provide funds therefor as set forth in Section 3 . 02 (a) hereof. -5- Peat Marwick c $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds, Series 1990 No — PPM Peat Marwick 700 Louisiana Telephone 713 224 4262 Telecopier 713 224 4566 P.O. Box 4545 Telex 286705 PMMT UR(RCA) Houston,TX 77210-4545 4, October 11, 1990 City of Pearland,Texas Smith,Murdaugh,Little &Bonham Houston,Texas Vinson&Elkins Houston,Texas Rauscher Pierce Refsnes, Inc. Houston,Texas $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties,Texas) Refunding Bonds, Series 1990 The City of Pearland, Texas (the "City") proposes to issue the above referenced bonds (the "Refund- ing Bonds") on October 11, 1990. The Refunding Bonds consist of $6,415,000.00 Current Interest Bonds dated October 1, 1990 and $949,391.80 Capital Appreciation Bonds dated October 1, 1990 and will accrue interest as of October 11, 1990. A portion of the proceeds of the Refunding Bonds will be used to purchase United States Treasury Securities -- State and Local Government Series (the "Restricted Acquired Obligations") which will be placed in an irrevocable escrow along with an initial cash deposit to be used solely to refund that portion of the City's Series 1985 Bonds (the "Refunded Bonds")described below: City of Pearland (A home rule city of the State of Texas located within Brazoria and Harris Counties) Refunding Bonds Series 1985 Maturities Optional Original Amount Subject to Redemption Amount to be Optional Date and Issued Dated Date Refunded Redemption Price $12,060,000 8-15-1985 $6,795,000 3-01-1996- 3-01-1995 3-01-2001, @ 100.00% Inclusive .... Member rm of nv Klveld Peat Marwick Goerdeler 1011Peat Marwick .. City of Pearland,Texas October 11, 1990 Page 2 At your request, we have independently verified the arithmetical accuracy of the computations provided to us by Rauscher Pierce Refsnes, Inc. which indicate: (1) the sufficiency of the receipts from the Restricted Acquired Obligations together with an initial cash deposit to pay at scheduled maturity or at early redemption the principal and interest on the Refunded Bonds; and, (2)the "yields" considered by bond counsel in its determination that the Refunding Bonds are not "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended. The term "yield", as used herein, means that yield which, when used in computing the present worth of all payments of principal and interest on an obligation compounded semiannually using a 360-day year basis, produces an amount equal to: in the case of the Restricted Acquired Obligations, the Purchase Price of such securities after adjustment for transferred proceeds; and, in the case of the Refunding Bonds,the Issue Price to the Public less the cost of bond insurance. The original computations, along with certain assumptions and information, were furnished to us by Rauscher Pierce Refsnes, Inc. on behalf of the City. We have relied solely on the assumptions and information provided to us and have not made any study or evaluation of them,except as noted below. We express no opinion on the reasonableness of the assumptions, or the likelihood that the principal and interest on the Refunded Bonds will be paid as described in the accompanying Exhibits. In the course of our engagement, we were furnished by Vinson & Elkins with the Official Statement for the Refunding Bonds and were furnished by Rauscher Pierce Refsnes, Inc. with excerpts of the Official Statement, the Verification Report for the Refunded Bonds and the Subscription Forms for the • purchase of the Restricted Acquired Obligations. We compared the information contained in the 11 schedules provided by Rauscher Pierce Refsnes, Inc. with certain information set forth in such documents with respect to principal payment dates and amounts, interest payment dates and rates, yields, and redemption dates and prices. We found that the information contained in such schedules provided to us by Rauscher Pierce Refsnes, Inc. was in agreement with the above-mentioned information set forth in such documents. In addition, we have verified that, based upon the table of interest rates payable on United States Treasury Securities -- State and Local Government Series for use on September 12, 1990,the interest rates payable on the Restricted Acquired Obligations are at or below the maximum allowable interest rate for each maturity date. In our opinion, based on the assumptions and information provided by Rauscher Pierce Refsnes, Inc. on behalf of the City, the computations in the accompanying schedules prepared by us and comparable schedules provided to us are arithmetically accurate and indicate that: (1) the receipts from the Restricted Acquired Obligations together with an initial cash deposit of $31.08 will be sufficient to pay at scheduled maturity or at early redemption the principal and interest on the Refunded Bonds; and, (2) the yield of the Refunding Bonds is 7.41277% (Exhibit E), and the yield of the Restricted Acquired Obligations is 7.41250% (Exhibit D) after adjustment for transferred proceeds (Exhibit G). IIIIMPeat Marwick City of Pearland,Texas October 11, 1990 Page 3 The terms of our engagement are such that we have no obligation to update this report or to verify any revised computation because of events and transactions occurring subsequent to the date of this report. This report is issued solely for your information and assistance in connection with the issuance of the Refunding Bonds. This report is not to be quoted or referred to without our prior written consent. Very truly yours, 44,i- A144.14;(4.4d a .4 EXHIB ITS A. Sources and Uses of Funds B. Escrow Cash Flow C-1. Debt Service Requirements of the Refunded Bonds to Maturity a C-2. Debt Service Requirements of the Refunded Bonds to Early Redemption D. Receipts From Restricted Acquired Obligations and Proof of Yield E. Debt Service Requirements and Proof of Yield on the Refunding Bonds F. Computation of Issue Price on the Capital Appreciation Bonds G. Calculation of Transferred Proceeds a a a Exhibit A SOURCES AND USES OF FUNDS —L $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 SOURCES: Principal Amount of the Refunding Bonds Current Interest Bond Proceeds $6,415,000.00 Capital Appreciation Bonds 949,391.80 Accrued Interest 12,946.74 $7,377,338.54 USES: Purchase Price of Restricted Acquired Obligations $7,104,900.00 Cash Deposit 31.08 Costs of Issuance 72,900.00 Insurance Premium 53,986.13 Underwriter's Discount 132,559.05 Accrued Interest 12,946.74 Contingency 15.54 $7,377,338.54 Exhibit B ESCROW CASH FLOW $7,364,391.80 City of Pearland (A political subdivision of the State of Texas -• located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 Receipts from Debt Service Beginning Restricted Requirements Ending Cash Acquired to be Cash Date Balance Obligations Refunded Balance 03/01/91 $31.08 $537,359.40 $537,306.25 $84.23 09/01/91 $84.23 267,807.46 267,881.25 $10.44 03/01/92 $10.44 832,907.46 832,881.25 $36.65 _ 09/01/92 $36.65 246,707.46 246,693.75 $50.36 03/01/93 $50.36 821,707.46 821,693.75 $64.07 09/01/93 $64.07 224,407.46 224,412.50 $59.03 03/01/94 $59.03 749,407.46 749,412.50 $53.99 09/01/94 $53.99 203,448.00 203,412.50 $89.49 03/01/95 $89.49 5,073,328.00 5,073,412.50 $4.99 — $8,957,080.16 $8,957,106.25 Exhibit C-1 DEBT SERVICE REQUIREMENTS OF THE REFUNDED BONDS TO MATURITY $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 $12,060,000 City of Pearland (A home rule city of the State of Texas located within Brazoria and Harris Counties) Refunding Bonds Series 1985 Debt Service Requirements of the Series 1985 Coupon Refunded Bonds Date Principal Rate Interest to Maturity 03/01/91 $260,000.00 7.250% $277,306.25 $537,306.25 09/01/91 267,881.25 267,881.25 _ 03/01/'92 565,000.00 7.500% 267,881.25 832,881.25 09/01/92 246,693.75 246,693.75 03/01/93 575,000.00 7.750% 246,693.75 821,693.75 09/01/93 224,412.50 224,412.50 03/01/94 525,000.00 8.000% 224,412.50 749,412.50 09/01/94 203,412.50 203,412.50 03/01/95 1,120,000.00 8.100% 203,412.50 1,323,412.50 _ 09/01/95 158,052.50 158,052.50 03/01/96 1,190,000.00 8.250% 158,052.50 1,348,052.50 09/01/96 108,965.00 108,965.00 03/01/97 1,280,000.00 8.400% 108,965.00 1,388,965.00 09/01/97 55,205.00 55,205.00 03/01/98 415,000.00 8.500% 55,205.00 470,205.00 09/01/98 37,567.50 37,567.50 03/01/99 345,000.00 8.600% 37,567.50 382,567.50 09/01/99 22,732.50 22,732.50 03/01/00 295,000.00 8.700% 22,732.50 317,732.50 _ 09/01/00 9,900.00 9,900.00 03/01/01 225,000.00 8.800% 9,900.00 234,900.00 $6,795,000.00 $2,946,951.25 $9,741,951.25 Exhibit C-2 DEBT SERVICE REQUIREMENTS OF THE REFUNDED BONDS TO EARLY REDEMPTION $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 $12,060,000 _ City of Pearland (A home rule city of the State of Texas located within Brazoria and Harris Counties) Refunding Bonds Series 1985 Debt Service Requirements of the Series 1985 Coupon Refunded Bonds Date Principal Rate Interest to Early Redemption 03/01/91 $260,000.00 7.250% $277,306.25 $537,306.25 09/01/91 267,881.25 267,881.25 03/01/92 565,000.00 7.500% 267,881.25 832,881.25 09/01/92 246,693.75 246,693.75 03/01/93 575,000.00 7.750% 246,693.75 821,693.75 09/01/93 224,412.50 224,412.50 03/01/94 525,000.00 8.000% 224,412.50 749,412.50 09/01/94 203,412.50 203,412.50 03/01/95 4,870,000.00 * 203,412.50 5,073,412.50 $6,795,000.00 $2,162,106.25 $8,957,106.25 * Coupon rates are as shown in the Schedule of Debt Service Requirements of the Series 1985 Refunded Bonds to Maturity. Exhibit D RECEIPTS FROM RESTRICTED ACQUIRED OBLIGATIONS AND PROOF OF YIELD $7,364,391.80 City of Pearland (A political subdivision of the State of Texas — located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 Present Value of Receipts from Future Receipts — Restricted at 10/11/90 Using Coupon Acquired a Rate of Date Principal Rate Interest Obligations 7.41250% 03/01/91 $369,400.00 0.000000% $167,959.40 $537,359.40 $522,362.67 09/01/91 52,200.00 0.000000% 215,607.46 267,807.46 251,029.65 03/01/92 617,300.00 0.000000% 215,607.46 832,907.46 752,825.27 —. 09/01/92 31,100.00 0.000000% 215,607.46 246,707.46 215,017.99 03/01/93 606,100.00 0.000000% 215,607.46 821,707.46 690,565.41 09/01/93 8,800.00 0.000000% 215,607.46 224,407.46 181,852.78 03/01/94 533,800.00 7.553190% 215,607.46 749,407.46 585,592.84 09/01/94 8,000.00 8.000000% 195,448.00 203,448.00 153,294.38 03/01/95 4,878,200.00 8.000000% 195,128.00 5,073,328.00 3,686,046.73 $7,104,900.00 $1,852,180.16 $8,957,080.16 $7,038,587.72 Purchase Price of Restricted Acquired Obligations $7,104,900.00 Transferred Proceeds Adjustment ($66,312.28) $7,038,587.72 - Exhibit E DEBT SERVICE REQUIREMENTS AND PROOF OF YIELD ON THE REFUNDING BONDS $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 Present Value $6,415,000.00 $949,391.80 of Future Current Interest Bonds Capital Appreciation Bonds Debt Service Payments at Requirements 10/11/90 Using Coupon of the a Rate of Date Principal Rate Interest Principal Interest Refunding Bonds 7.41277% 03/01/91 $194,201.04 $194,201.04 $188,781.05 09/01/91 233,041.25 233,041.25 218,440.99 -. 03/01/92 233,041.25 233,041.25 210,634.08 09/01/92 233,041.25 233,041.25 203,106.19 03/01/93 233,041.25 233,041.25 195,847.33 _ 09/01/93 233,041.25 233,041.25 188,847.90 03/01/94 233,041.25 233,041.25 182,098.62 09/01/94 233,041.25 233,041.25 175,590.56 03/01/95 233,041.25 233,041.25 169,315.09 09/01/95 233,041.25 233,041.25 163,263.90 03/01/96 233,041.25 233,041.25 157,428.98 09/01/96 233,041.25 233,041.25 151,802.59 03/01/97 233,041.25 233,041.25 146,377.29 09/01/97 233,041.25 233,041.25 141,145.88 03/01/98 233,041.25 233,041.25 136,101.43 09/01/98 233,041.25 233,041.25 131,237.27 03/01/99 233,041.25 233,041.25 126,546.96 09/01/99 233,041.25 233,041.25 122,024.27 03/01/00 233,041.25 233,041.25 117,663.22 09/01/00 233,041.25 233,041.25 113,458.03 03/01/01 233,041.25 233,041.25 109,403.12 09/01/01 233,041.25 233,041.25 105,493.14 _ 03/01/02 $315,000.00 7.100% 233,041.25 548,041.25 239,220.93 09/01/02 221,858.75 221,858.75 93,380.67 03/01/03 390,000.00 7.150% 221,858.75 611,858.75 248,328.24 09/01/03 207,916.25 207,916.25 81,368.79 -- 03/01/04 1,220,000.00 7.200% 207,916.25 1,427,916.25 538,848.51 09/01/04 163,996.25 163,996.25 59,674.99 03/01/05 1,315,000.00 7.250% 163,996.25 1,478,996.25 518,943.45 — 09/01/05 116,327.50 116,327.50 39,357.71 03/01/06 1,415,000.00 7.300% 116,327.50 1,531,327.50 499,585.76 09/01/06 64,680.00 64,680.00 20,347.29 Exhibit E DEBT SERVICE REQUIREMENTS AND PROOF OF YIELD ON THE REFUNDING BONDS $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 Present Value $6,415,000.00 $949,391.80 of Future Current Interest Bonds Capital Appreciation Bonds Debt Service Payments at Requirements 10/11/90 Using Coupon of the a Rate of Date Principal Rate Interest Principal Interest Refunding Bonds 7.41277% 03/01/07 1,760,000.00 7.350% 64,680.00 1,824,680.00 553,500.08 03/01/08 $501,646.60 $1,318,353.40 1,820,000.00 513,323.77 03/01/09 447,745.20 1,317,254.80 1,765,000.00 462,864.32 $6,415,000.00 $6,870,666.04 $949,391.80 $2,635,608.20 $16,870,666.04 $7,323,352.40 Principal Amount of the Refunding Bonds $7,364,391.80 Accrued Interest 12,946.73 Insurance Premium (53,986.13) $7,323,352.40 a Exhibit F COMPUTATION OF ISSUE PRICE ON THE CAPITAL APPRECIATION BONDS $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 Maturity Stated Stated Stated Date Value Coupon Yield Price Principal 03/01/08 $1,820,000.00 0.000% 7.550% 27.563% $501,646.60 03/01/09 1,765,000.00 0.000% 7.600% 25.368% 447,745.20 $3,585,000.00 $949,391.80 Exhibit G CALCULATION OF TRANSFERRED PROCEEDS 1 $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 1.Debt Service to be Refunded with Refunding Bond Proceeds Series 1985 Debt Service to be Refunded with Refunding Date Bond Proceeds 03/01/91 $537,306.25 09/01/91 267,881.25 03/01/92 832,881.25 09/01/92 246,693.75 03/01/93 821,693.75 09/01/93 224,412.50 03/01/94 749,412.50 09/01/94 203,412.50 $3,883,693.75 Exhibit G CALCULATION OF TRANSFERRED PROCEEDS _ $7,364,391.80 City of Pearland (A political subdivision of the State of Texas — located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 — 2.Present Value of the Debt Service on the Refunding Bonds — Present Value Present Value Present Value Present Value Present Value Debt Service of Future of Future of Future of Future of Future Requirements Payments at Payments at Payments at Payments at Payments at — on the 03/01/91 Using 09/01/91 Using 03/01/92 Using 09/01/92 Using 03/01/93 Using Refunding a Rate of a Rate of a Rate of a Rate of a Rate of Date Bonds 7.41277% 7.41277% 7.41277% 7.41277% 7.41277% 03/01/91 $194,201.04 09/01/91 233,041.25 $224,712.54 03/01/92 233,041.25 216,681.49 $224,712.54 09/01/92 233,041.25 208,937.46 216,681.49 $224,712.54 03/01/93 233,041.25 201,470.20 208,937.46 216,681.49 $224,712.54 09/01/93 233,041.25 194,269.81 201,470.20 208,937.46 216,681.49 $224,712.54 03/01/94 233,041.25 187,326.76 194,269.81 201,470.20 208,937.46 216,681.49 09/01/94 233,041.25 180,631.85 187,326.76 194,269.81 201,470.20 208,937.46 03/01/95 233,041.25 174,176.21 180,631.85 187,326.76 194,269.81 201,470.20 09/01/95 233,041.25 167,951.29 174,176.21 180,631.85 187,326.76 194,269.81 — 03/01/96 233,041.25 161,948.84 167,951.29 174,176.21 180,631.85 187,326.76 09/01/96 233,041.25 156,160.92 161,948.84 167,951.29 174,176.21 180,631.85 03/01/97 233,041.25 150,579.85 156,160.92 161,948.84 167,951.29 174,176.21 — 09/01/97 233,041.25 145,198.24 150,579.85 156,160.92 161,948.84 167,951.29 03/01/98 233,041.25 140,008.97 145,198.24 150,579.85 156,160.92 161,948.84 09/01/98 233,041.25 135,005.16 140,008.97 145,198.24 150,579.85 156,160.92 — 03/01/99 233,041.25 130,180.18 135,005.16 140,008.97 145,198.24 150,579.85 09/01/99 233,041.25 125,527.64 130,180.18 135,005.16 140,008.97 145,198.24 03/01/00 233,041.25 121,041.38 125,527.64 130,180.18 135,005.16 140,008.97 09/01/00 233,041.25 116,715.46 121,041.38 125,527.64 130,180.18 135,005.16 03/01/01 233,041.25 112,544.14 116,715.46 121,041.38 125,527.64 130,180.18 09/01/01 233,041.25 108,521.90 112,544.14 116,715.46 121,041.38 125,527.64 03/01/02 548,041.25 246,089.08 255,210.09 264,669.15 274,478.81 284,652.05 .. 09/01/02 221,858.75 96,061.68 99,622.09 103,314.47 107,143.70 111,114.86 03/01/03 611,858.75 255,457.86 264,926.11 274,745.30 284,928.41 295,488.96 09/01/03 207,916.25 83,704.93 86,807.36 90,024.77 93,361.44 96,821.77 _ 03/01/04 1,427,916.25 554,319.10 574,864.30 596,170.98 618,267.38 641,182.75 09/01/04 163,996.25 61,388.29 63,663.58 66,023.19 68,470.27 71,008.04 03/01/05 1,478,996.25 533,842.55 553,628.81 574,148.43 595,428.58 617,497.45 Exhibit G CALCULATION OF TRANSFERRED PROCEEDS $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 2.Present Value of the Debt Service on the Refunding Bonds Present Value Present Value Present Value Present Value Present Value Debt Service of Future of Future of Future of Future of Future Requirements Payments at Payments at Payments at Payments at Payments at on the 03/01/91 Using 09/01/91 Using 03/01/92 Using 09/01/92 Using 03/01/93 Using Refunding a Rate of a Rate of a Rate of a Rate of a Rate of Date Bonds 7.41277% 7.41277% 7.41277% 7.41277% 7.41277% 09/01/05 116,327.50 40,487.69 41,988.32 43,544.57 45,158.50 46,832.25 03/01/06 1,531,327.50 513,929.10 532,977.29 552,731.48 573,217.83 594,463.49 09/01/06 64,680.00 20,931.47 21,707.27 22,511.82 23,346.20 24,211.50 03/01/07 1,824,680.00 569,391.32 590,495.16 612,381.18 635,078.38 658,616.83 03/01/08 1,820,000.00 528,061.53 547,633.52 567,930.93 588,980.63 610,810.52 03/01/09 1,765,000.00 476,153.37 493,801.44 512,103.62 531,084.16 550,768.18 $16,870,666.04 $7,339,408.26 $7,378,393.73 $7,418,824.14 $7,460,753.08 $7,504,236.06 Exhibit G CALCULATION OF TRANSFERRED PROCEEDS $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 2.Present Value of the Debt Service on the Refunding Bonds Present Value Present Value Present Value Debt Service of Future of Future of Future Requirements Payments at Payments at Payments at on the 09/01/93 Using 03/01/94 Using 09/01/94 Using Refunding a Rate of a Rate of a Rate of Date Bonds 7.41277% 7.41277% 7.41277% 03/01/91 $194,201.04 09/01/91 233,041.25 03/01/92 233,041.25 09/01/92 233,041.25 03/01/93 233,041.25 09/01/93 233,041.25 03/01/94 233,041.25 $224,712.54 09/01/94 233,041.25 216,681.49 $224,712.54 03/01/95 233,041.25 208,937.46 216,681.49 $224,712.54 09/01/95 233,041.25 201,470.20 208,937.46 216,681.49 03/01/96 233,041.25 194,269.81 201,470.20 208,937.46 • 09/01/96 233,041.25 187,326.76 194,269.81 201,470.20 03/01/97 233,041.25 180,631.85 187,326.76 194,269.81 09/01/97 233,041.25 174,176.21 180,631.85 187,326.76 03/01/98 233,041.25 167,951.29 174,176.21 180,631.85 09/01/98 233,041.25 161,948.84 167,951.29 174,176.21 03/01/99 233,041.25 156,160.92 161,948.84 167,951.29 09/01/99 233,041.25 150,579.85 156,160.92 161,948.84 03/01/00 233,041.25 145,198.24 150,579.85 156,160.92 09/01/00 233,041.25 140,008.97 145,198.24 150,579.85 03/01/01 233,041.25 13 5,005.16 140,008.97 145,198.24 09/01/01 233,041.25 130,180.18 135,005.16 140,008.97 03/01/02 548,041.25 295,202.36 306,143.69 317,490.56 09/01/02 221,858.75 115,233.20 119,504.19 123,933.48 03/01/03 611,858.75 306,440.92 317,798.80 329,577.64 09/01/03 207,916.25 100,410.36 104,131.95 107,991.48 03/01/04 1,427,916.25 664,947.45 689,592.96 715,151.93 09/01/04 163,996.25 73,639.87 76,369.25 79,199.78 03/01/05 1,478,996.25 640,384.29 664,119.39 688,734.22 Exhibit G CALCULATION OF TRANSFERRED PROCEEDS _ $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 2.Present Value of the Debt Service on the Refunding Bonds Present Value Present Value Present Value Debt Service of Future of Future of Future Requirements Payments at Payments at Payments at on the 09/01/93 Using 03/01/94 Using 09/01/94 Using Refunding a Rate of a Rate of a Rate of Date Bonds 7.41277% 7.41277% 7.41277% 09/01/05 116,327.50 48,568.03 50,368.15 52,234.99 03/01/06 1,531,327.50 616,496.60 639,346.34 663,042.97 09/01/06 64,680.00 25,108.87 26,039.50 27,004.62 03/01/07 1,824,680.00 683,027.71 708,343.35 734,597.28 03/01/08 1,820,000.00 633,449.51 656,927.59 681,275.86 03/01/09 1,765,000.00 571,181.77 592,351.96 614,306.81 $16,870,666.04 $7,549,330.71 $7,596,096.71 $7,644,596.05 a a a Exhibit G CALCULATION OF TRANSFERRED PROCEEDS $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 3.Present Value of the Receipts from Restricted Acquired Obligations Present Value Present Value Present Value Present Value Present Value of Future of Future of Future of Future of Future Receipts at Receipts at Receipts at Receipts at Receipts at Receipts from 03/01/91 Using 09/01/91 Using 03/01/'92 Using 09/01/92 Using 03/01/'93 Using Restricted a Rate of a Rate of a Rate of a Rate of a Rate of Date Acquired Obligations 7.41277% 7.41277% 7.41277% 7.41277% 7.41277% 03/01/91 $537,359.40 09/01/91 267,807.46 $258,236.23 03/01/92 832,907.46 774,436.40 $803,140.00 09/O1/92 246,707.46 221,190.16 229,388.31 $237,890.33 03/01/93 821,707.46 710,387.39 736,717.09 764,022.66 $792,340.28 09/01/93 224,407.46 187,072.44 194,006.06 201,196.68 208,653.80 $216,387.31 03/01/94 749,407.46 602,400.10 624,727.37 647,882.17 671,895.18 696,798.20 09/01/94 203,448.00 157,693.92 163,538.67 169,600.04 175,886.07 182,405.08 03101195 5,073,328.00 3,791,831.01 3,932,370.87 4,078,119.67 4,229,270.49 4,386,023.53 a $8,957,080.16 $6,703,247.65 $6,683,888.37 $6,098,711.55 $6,078,045.82 $5,481,614.12 a a a i voa Exhibit G CALCULATION OF TRANSFERRED PROCEEDS $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 3.Present Value of the Receipts from Restricted Acquired Obligations Present Value Present Value Present Value of Future of Future of Future Receipts at Receipts at Receipts at Receipts from 09/01/93 Using 03/01/94 Using 09/01/94 Using Restricted a Rate of a Rate of a Rate of Date Acquired Obligations 7.41277% 7.41277% 7.41277% 03/01/91 $537,359.40 09/01/91 267,807.46 03/01/92 832,907.46 09/01/92 246,707.46 03/01/93 821,707.46 09/01/93 224,407.46 03/01/94 749,407.46 $722,624.22 09/01/94 203,448.00 189,165.72 $196,176.93 03/01/95 5,073,328.00 4,548,586.45 4,717,174.58 $4,892,011.23 $8,957,080.16 $5,460,376.39 $4,913,351.51 $4,892,011.23 a a I I I I I I i I I 1 I I I 1 I 1 I 1 I Exhibit G CALCULATION OF TRANSFERRED PROCEEDS $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 4.Calculation of Transfer Ratio Present Value Present Value of Present Value of Receipts from Debt Service Series 1985 Escrow of the the Restricted Maximum Amount To Be Refunded at Transfer Date Transfer Refunding Bonds Acquired Obligations Cumulative Available with Refunding Minimum for Using a Rate of Date at Transfer Date at Transfer Date Transfers for Transfer Bond Proceeds Transfer Ratio 8.58690% 03/01/91 $7,339,408.26 $6,703,247.65 $636,160.61 $537,306.25 $537,306.25 $3,768,332.68 09/01/91 7,378,393.73 6,683,888.37 $512,307.26 182,198.10 267,881.25 182,198.10 3,212,966.28 03/01/92 7,418,824.14 6,098,711.55 626,094.05 694,018.54 832,881.25 694,018.54 2,849,533.29 09/01/92 7,460,753.08 6,078,045.82 1,257,299.34 125,407.92 246,693.75 125,407.92 2,141,094.09 03/01/93 7,504,236.06 5,481,614.12 1,221,344.16 801,277.78 821,693.75 801,277.78 1,856,896.84 09/01/93 7,549,330.71 5,460,376.39 1,924,439.02 164,515.30 224,412.50 164,515.30 1,047,499.22 03/01/94 7,596,096.71 4,913,351.51 1,767,732.54 915,012.66 749,412.50 749,412.50 779,287.02 09/01/94 7,644,596.05 4,892,011.23 2,392,379.09 360,205.73 203,412.50 203,412.50 29,612.82 Exhibit G CALCULATION OF TRANSFERRED PROCEEDS $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 5.Transfer Dates — Present Value of Present Value Present Value Series 1985 Escrow of Transfer of Transfer at 03/01/91 Using at 03/01/91 Using at 03/01/91 Using a Rate of Transfer Percentage a Rate of a Rate of Difference Date Series 1985 Escrow 8.58690% 14.25846% 8.58690% 7.41277% (Old-New) .. 09/01/91 $182,855.00 $175,327.40 $26,072.31 $24,998.99 $25,140.51 ($141.52 03/01/92 384,967.61 353,924.08 54,890.46 50,464.13 51,037.09 (572.9( 09/01/92 174,836.93 154,121.08 24,929.06 21,975.30 22,350.61 (375.31 _ 03/01/93 425,943.20 360,017.44 60,732.95 51,332.95 52,505.21 (1,172.26 09/01/93 163,216.38 132,275.24 23,272.14 18,860.41 19,400.32 (539.91 03/01/94 513,056.38 398,678.54 73,153.94 56,845.42 58,803.71 (1,958.29 09/01/94 145,955.85 108,748.24 20,811.06 15,505.83 16,130.79 (624.96 03/01/95 2,918,854.80 2,085,240.66 416,183.78 297,323.23 311,057.86 (13,734.63 $4,909,686.15 $3,768,332.68 $700,045.70 $537,306.26 $556,426.10 ($19,119.84 Exhibit G CALCULATION OF TRANSFERRED PROCEEDS $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 5.Transfer Dates Present Value of Present Value Present Value Series 1985 Escrow of Transfer of Transfer at 09/01/91 Using at 09/01/91 Using at 09/01/91 Using — a Rate of Transfer Percentage a Rate of a Rate of Difference Date Series 1985 Escrow 8.58690% 5.67071% 8.58690% 7.41277% (Old-New) 03/01/92 $330,077.15 $316,488.86 $18,717.73 $17,947.18 $18,048.77 ($101.59) 09/01/92 149,907.87 137,819.40 8,500.85 7,815.35 7,904.08 (88.73) 03/01/93 365,210.25 321,937.70 20,710.03 18,256.17 18,567.96 (311.79) 09/01/93 139,944.24 118,284.24 7,935.84 6,707.56 6,860.74 (153.18) "' 03/01/94 439,902.44 356,509.56 24,945.61 20,216.64 20,795.37 (578.73) 09/01/94 125,144.79 97,245.73 7,096.60 5,514.52 5,704.50 (189.98) 03/01/95 2,502,671.02 1,864,680.79 141,919.29 105,740.70 110,002.60 (4,261.90) $4,052,857.76 $3,212,966.28 $229,825.95 $182,198.12 $187,884.02 ($5,685.90) S Exhibit G CALCULATION OF TRANSFERRED PROCEEDS $7,364,391.80 City of Pearland (A political subdivision of the State of Texas . located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 5.Transfer Dates Present Value of Present Value Present Value Series 1985 Escrow of Transfer of Transfer at 03/01/'92 Using at 03/01/92 Using at 03/01/92 Using — a Rate of Transfer Percentage a Rate of a Rate of Difference Date Series 1985 Escrow 8.58690% 24.35552% 8.58690% 7.41277% (Old-New) 09/01/92 $141,407.02 $135,585.71 $34,440.41 $33,022.60 $33,209.54 ($186.94 03/01/93 344,500.22 316,719.96 83,904.81 77,138.78 78,014.60 (875.82 09/01/93 132,008.40 116,367.16 32,151.33 28,341.83 28,825.87 (484.04 03/01/94 414,956.83 350,731.49 101,064.88 85,422.47 87,373.21 (1,950.74 "" 09/01/94 118,048.19 95,669.64 28,751.25 23,300.84 23,967.86 (667.02 03/01/95 2,360,751.73 1,834,459.33 574,973.27 446,792.04 462,183.76 (15,391.72 $3,511,672.39 $2,849,533.29 $855,285.95 $694,018.56 $713,574.84 ($19,556.28 a i Exhibit G CALCULATION OF TRANSFERRED PROCEEDS $7,364,391.80 City of Pearland (A political subdivision of the State of Texas .. located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 5.Transfer Dates # Present Value of Present Value Present Value Series 1985 Escrow of Transfer of Transfer at 09/01/92 Using at 09/01/92 Using at 09/01/92 Using — a Rate of Transfer Percentage a Rate of a Rate of Difference Date Series 1985 Escrow 8.58690% 5.85719% 8.58690% 7.41277% (Old-New) 03/01/93 $260,595.41 $249,867.47 $15,263.56 $14,635.20 $14,718.05 ($82.85) 09/01/93 99,857.07 91,804.66 5,848.82 5,377.18 5,438.23 (61.05) 03/01/94 313,891.95 276,699.94 18,385.24 16,206.83 16,483.63 (276.80) 09/01/94 89,296.94 75,475.92 5,230.29 4,420.77 4,521.72 (100.95) 03/01/95 1,785,778.46 1,447,246.10 104,596.41 84,767.93 87,194.54 (2,426.61) $2,549,419.83 $2,141,094.09 $149,324.32 $125,407.91 $128,356.17 ($2,948.26) 4 r i Exhibit G CALCULATION OF TRANSFERRED PROCEEDS $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 5.Transfer Dates Present Value of Present Value Present Value Series 1985 Escrow of Transfer of Transfer at 03/01/93 Using at 03/01/'93 Using at 03/01/93 Using a Rate of Transfer Percentage a Rate of a Rate of Difference Date Series 1985 Escrow 8.58690% 43.15144% 8.58690% 7.41277% (Old-New, 09/01/93 $94,008.25 $90,138.21 $40,565.92 $38,895.94 $39,116.13 ($220.1.c 03/O1/94 295,506.71 271,677.25 127,515.41 117,232.65 118,563.68 (1,331.03 09/01/94 84,066.65 74,105.87 36,275.97 31,977.75 32,523.89 (546.14 — 03/01/95 1,681,182.05 1,420,975.51 725,454.31 613,171.43 627,174.05 (14,002.62 $2,154,763.66 $1,856,896.84 $929,811.61 $801,277.77 $817,377.75 ($16,099.9f — -• Exhibit G CALCULATION OF TRANSFERRED PROCEEDS $7,364,391.80 City of Pearland (A political subdivision of the State of Texas — located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 5.Transfer Dates Present Value of Present Value Present Value Series 1985 Escrow of Transfer of Transfer at 09/01/93 Using at 09/01/93 Using at 09/01/93 Using a Rate of Transfer Percentage a Rate of a Rate of Difference Date Series 1985 Escrow 8.58690% 15.70553% 8.58690% 7.41277% (Old-New) 03/01/94 $167,991.30 $161,075.60 $26,383.92 $25,297.77 $25,440.98 ($143.21) 09/01/94 47,790.68 43,936.87 7,505.78 6,900.52 6,978.87 (78.35) 03/01/95 955,727.74 842,486.75 150,102.10 132,317.00 134,576.83 (2,259.83) $1,171,509.72 $1,047,499.22 $183,991.80 $164,515.29 $166,996.68 ($2,481.39) a a Exhibit G CALCULATION OF TRANSFERRED PROCEEDS $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 5.Transfer Dates Present Value of Present Value Present Value Series 1985 Escrow of Transfer of Transfer at 03/01/94 Using at 03/01/94 Using at 03/01/94 Using a Rate of Transfer Percentage a Rate of a Rate of Difference Date Series 1985 Escrow 8.58690% 96.16643% 8.58690% 7.41277% (Old-New) 09/01/94 $40,284.90 $38,626.49 $38,740.55 $37,145.72 $37,355.99 ($210.27) 03/01/95 805,625.64 740,660.53 774,741.41 712,266.79 720,353.68 (8,086.89) $845,910.54 $779,287.02 $813,481.96 $749,412.51 $757,709.67 ($8,297.16) a Exhibit G CALCULATION OF TRANSFERRED PROCEEDS $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 5.Transfer Dates Present Value of Present Value Present Value Series 1985 Escrow of Transfer of Transfer at 09/01/94 Using at 09/01/94 Using at 09/01/94 Using a Rate of Transfer Percentage a Rate of a Rate of Difference Date Series 1985 Escrow 8.58690% 100.00000% 8.58690% 7.41277% (Old-New) 03/01/95 $30,884.23 $29,612.82 $30,884.23 $29,612.82 $29,780.45 ($167.63) $30,884.23 $29,612.82 $30,884.23 $29,612.82 $29,780.45 ($167.63) — a Exhibit G CALCULATION OF TRANSFERRED PROCEEDS $7,364,391.80 City of Pearland (A political subdivision of the State of Texas located within Brazoria and Harris Counties, Texas) Refunding Bonds,Series 1990 6.Calculation of Transferred Proceeds Adjustment Present Value of the Difference at a Rate of ._ Transfer 7.41277% Date Difference to 10/11/90 03/01/91 ($19,119.84) ($18,586.22) 09/01/91 (5,685.90) (5,329.67) 03/01/92 (19,556.28) (17,675.92) 09/01/92 (2,948.26) (2,569.54) 03/01/93 (16,099.98) (13,530.39) 09/01/93 (2,481.39) (2,010.83) 03/01/94 (8,297.16) (6,483.41) 09/01/94 (167.63) (126.30) ($74,356.44) ($66,312.28) w.�w. .ram IN WITNESS WHEREOF, I have hereunto setjny hand and affixed the corporate seal of the Bank as of the /9� day of September, 1990. FIRST CITY, TEXAS-HOUSTON, N.A. By Title Zr h2Q.Lid ALal5#6(111/11 ATTEST: MARIO DURHAM CORPORATE TRUST OFFICER Title (SEAL) STATE OF TEXAS § COUNTY OF HARRIS § I, Melinda D. Meyers, in my official capacity, hereby certify, That I am an officer, namely, Assistant Cashier of FIRST CITY, TEXAS - HOUSTON, N. A. , (Houston, Texas) a National bank; that at a meeting of the Board of Directors of this bank, duly and regularly convened and held on the 16th day of March 1989, at which a quorum for the transaction of business was present and acting throughout, the following resolution was duly and regularly adopted, and is still in full force and effect, and appears as follows in the Minutes of said meeting: "BE IT RESOLVED, That the Chairman of the Board, the Vice Chairman President and all Executive Vice Presidents, Senior Vice Presidents, Senior Vice Presidents and Trust Officers, Vice Presidents, Vice Presidents and Trust Officers, Vice Presidents and Trust Investment Officers, Assistant Vice Presidents, Trust Officers, Assistant Trust Officers, Trust Investment Officers, Assistant Trust Investsment Officer, Trust Development Officers, Pension Trust Officers, Trust Real Estate Officers, Trust Operations Officers, Trust Petroleum Officers, Corporate Trust Officers, Personal Trust Officers, Trust Administrative Officer and Trust Safekeeping Officers of FIRST CITY, TEXAS - HOUSTON, N.A., (hereinafter called 'this bank') , and any one of them acting without another, shall be and hereby are fully authorized, to represent and act for this bank in all matters related to the designation, appointment, qualifying, and acting of this all matters related to the designation appointment, qualifying, and acting of this bank (whether as sole or co-fiduciary) as Trustee, Successor Trustee, Substitute Trustee, Receiver, Executor, Administrator, Temporary Administrator, Guardian, Temporary Guardian, Agent, Escrow Agent, Custodian, Registrar, Transfer Agent, Dividend or Interest Disbursing Agent, and/or in any fiduciary capacity, be it under any deed of trust, will, court order, proceeding, and/or any other instrument or transaction, and in the performance of its duties in any or all such capacities; and without in anywise limiting any of the general provisions hereof that any of said officers be and are fully authorized for this bank to: (a) Execute and deliver petitions, applications, oaths, bonds, reports, certificates, and all other instruments and perform all acts desired, required, or deemed advisable in connection with the appointment, qualifying, and acting in any such capacity and the performance of duties and exercise of rights in any of such capacities or under and in connection with any of such capacities or under and in connection with any such orders, proceedings and instruments; (b) Handle, manage, operate, control, exchange, mortgage, pledge, sell, and/or dispose of any or all interests, properties, assets, claims, and things of value at any time involved in or connected with any of said appointments, designations, orders, proceedings, instruments, and/or matters connected therewith to the extent and as may be permitted or authorized by governing laws, statutes, or under any orders, proceedings, instruments, or transactions; (c) Receive, receipt for, handle, and disburse funds, monies, and properties which might be realized, payable, or result fram any matters and transactions herein mentioned; and (d) Post and give notices (including notices of sale) ; conduct and conclude foreclosures and sales; execute, forward, file and deliver all such deeds, assignments, and instruments; exercise and enforce all rights and powers; and perform or cause to be performed all such acts and duties at any time permitted, necessary, required, desired, requested, or deemed advisable in connection with or in anywise related to any or all of the matters hereinbefore mentioned, or the acting by this bank or the performance and discharge of its duties as or in any of the capacities hereinbefore mentioned." I further certify that the foregoing resolutions are not contrary to any provisions in the charter or bylaws of this bank; that I am authorized to make this certificate on behalf of FIRST CITY, TEXAS - HOUSTON, N. A. ; and that the title(s) and signature(s) appearing opposite the name(s) of the officer(s) below are the authentic title(s) and signature(s) respectively of such officer(s) : NAME TITLE SIGNA S. Whitten Rusk III Vice President & Trust Officer Margaret P. Mata Vice President &,Trust Officer Assistant Vice President & Josie L. Hixon Trust Officer c� Assistant Vice President & (7 Richard R. Cartwright Trust Officer Susan K. Brem Corporate Trust Officer 64a �._ Mario Durham Corporate Trust Officer C Deirdre H. Ward Corporate Trust Officer & LJ2 ( (LP Ci IN WITNESS WHEREOF, I her- u to set my d and affix the corporate seal of this bank of this plipn, day of 4 ,, %p 1990. Assistant Cashier (SEAL) Fmk re rob � ..... r..at gra" rs1 FRB ALAS PD F 4144 OMB NO.1535.0092 Bur. of the Treasury SUBSCRIPTION FOR Pll��1 ,�1� I $UE OF EXP.2192 Bur.of the Public Debt �+`U' �1 (Rev.8/89) U.S. TREASURY E 1 STATE AND LOCAL GOVERNMENT SERIES TIME DEPOSIT SECURITIES x INITIAL LI FINAL [.1 AMENDED To: Federal Reserve Bank or Branch at Dallas 1. Pursuant to the provisions of Department of the Treasury Circular, Public Debt Series Na3.72, current revision(31 CFR Part 344), the undersigned hereby subscribes for the purchase of the following securities: a. United States Treasury Certificates of Indebtedness—State and Local Government Series 421,600 (PD F 4144-2) TOTAL AMOUNT$ b. United States Treasury Notes—State and Local Government Series 6,683,300 (PD F 4144-3) TOTAL AMOUNT $— c. United States Treasury Bonds—State and Local Gov=rnment Series —0— (PD F 4144-4) TOTAL AMOUNT$ ' GRAND TOTAL $ 7, 104 ,900 as described on the attached schedules, accompanied by °D F 4144.1,which are incorporated by reference in this subscription, to be issued as entries on the books of the Bureau of the Public Debt, Department of the Treasury. 2.The undersigned certifies that this subscription complies with the certification requirements in 31 CFR Sec 344.3. 3.The undersigned requests that book-entry accounts be established for: Name of owner First City, Texas - Houston N.A. Escrow Account for the City of Pearland, Texas 4. The undersigned: a. C submits payment in full herewith for the above securities,as shown below. b. a requests that issuance be deferred until 10/11/90 (riot to exceed by mole than CU days the date cn .'hich this subscription is received at a Federal Reserve Bank or Branch or,where mailed, by the postmark date on the envelope in which it is received), and agrees to make payment on that date. 5. The undersigned agrees that interest and redemption payments made to the subscriber will he by Automated Clearing House(ACH)method. 6. The undersigned further certifies that the following official(s), by title(s),are authorized, subject to the provisions of the above refe•enced circular. to request redemption prior to maturity of the securities. (It no one has been so authorized, enter the word "none.") non P 7. If the undersigned is a financial institution, it certifies that it has received the specific authorization of the government body to submit this sub- scription. Subscriptions submitted by an agent other than a commercial bank must be accompanied by evidence of the agent's authority to act. Such evidence must describe the nature and scope of the agent's authorization, specify the legal authority under which the agenr was designated. and relate by its terms to the investment action being undertaken. Subscriptions unsupported by such evidence will not be accepted. Dated this 13thiay of Sept. 19 90 City of Pearl d, Texas (Nam S to r La overnment Body or Other Eligible Entity) (713) 485-2411 By--- - (Telephone—include Area Code) Si attire and Ti ) FOR USE OF FINANCIAL INStItUTI s N IN TRANSMITTING PAYMENT EOM ABOVE SECURI ' (The issue date of the account will be the date specified in this subscription, provided paym-• er:or in readily available fu J received here- with or within the time limitation specified above. Where payment is submitted separately, it should b• accompanied by a copy of uis subscription.) ❑ Check enclosed me of Institution First City"exas — Hou-• Char reserve clearingaccount on 10/11/ `' St. :9 f - ❑ Other (Date) y , �/j �. Authorized signature and title -_� •-• YiiC-i • • POP USE OF FEDERAL RESERVE BANK ACCOUNT NUMBERS APPLICABLE ISSUE I Date Credited C OF I'S: From: Through: INTEREST DATE to Trees Acct. RATE TABLE (Cannot be NQ Subsequent to NOTES: Frc Through: Issue Date) BONDS: From: Through: - FOR USE OF THE BUREAU OF THE PUBLIC DEBT Approved By Date Signature and Title Computer Run For the notice required under the Privacy and Paperwork Reduction Acts, see the reverse side of this form. PD F 41444 OMB NO.1535-0092 Dept ofthe Treasury ACCOUNT INFORMATION FOR EXP.2r92 x.oft Bur Public Debt (Rev.8/89) U.S. TREASURY SECURITIES STATE AND LOCAL GOVERNMENT SERIES TIME DEPOSIT SECURITIES The United States Treasury Securities—State and Local Government Series subscribed for on PD F 4144 to which this form is attached and incorporated, are requested to be issued and held in book-entry accounts on the books of the Department of the Treasury, as follows: NAME OF OWNER i EMPLOYER IDENTIFICATION NUMBER IIIa 1111111111111 ADDRESS OF OWNER ' i i t a CITY STATE ZIP CODE NAME OF SUBSCRIBER'S FINANCIAL INSTITUTION AND OFFICER TO CONTACT 1 ADDRESS OF SUBSCRIBER'S FINANCIAL INSTITUTION I i t CITY STATE ZIP CODE DIRECT DEPOSIT(ACH)INFORMATION To be Completed by the Financial institution ACCOUNT NAME 1111111111111111111111111/1111111111111111111111 ACCOUNT NUMBER ROUTING NUMBER ACCOUNT TYPE CHECKING I SAVINGS I A. Bureau of the Public Debt Copy - imo. PD F 4144.2 SCHEDULE OF U.S.. TREASURY OMB NO.1535-0092 of the Treasury EXP.2/92 Bureau of the Publ c Debt CERTIFICATES OF INDEBTEDNESS— (Rev. 8/89) STATE AND LOCAL GOVERNMENT SERIES TIME DEPOSIT SECURITIES The United States Treasury Certificates of Indebtedness—State and Local Government Series subscribed for on PD F 4144 and account information furnished on PD F 41441 to which this schedule is attached and incorporated, are requested to be issued and held in book-entry accounts on the books of the Department of the Treasury,as follows: ACCOUNT NUMBERS PRINCIPAL INTEREST ISSUE MATURITY FOR TREASURY assigned by FRB AMOUNT RATE DATE DATE DEPT.USE ONLY 369,400 0 _ 10-11-90 3-1-91 52,200 0_ 10-11-90 9-1-91 TOTAL 421,600 NOTE The interest rate on each certificate may not exceed the maximum interest rate for Treasury securities of comparable terms of maturity,as shown in the Treasury rate table applicable to this issuance.The maturity dates specified must be at least 30 days but not greater than one year from date of issue. Interest will be paid at maturity with the principal. FRB CERTIFICATION The undersigned certifies that this form has been NAME OF STATE OR LOCAL GOVERNMENT BODY: reviewed and is in compliance with regulations govern- City of Pearland, Texas ing U.S.Treasury securities—State and Local Govern- ment des. SIGNATURE: /�� j Signature TITLE: _ T'fayor / / FRB Date Phone FOR BUREAU USE ONLY: ACCOUNTS ESTABLISHED BY: ON A. Bureau of the Public Debt Copy Date PD F 4144.3 SCHEDULE OF U.S. TREASURY NOTES— OMB Na 1535 DD82 Dept.of the Treasury E(P.2192 Bureau of the Public Debt STATE AND LOCAL GOVERNMENT SERIES (Rey.8/89) TIME DEPOSIT SECURITIES The United States Treasury Notes—State and Local Government Series subscribed for on PD F 4144 and account information furnished on PD F 41441 to which this schedule is attached and incorporated, are requested to be issued and held in book-entry accounts on the books of the Department of the Treasury, as follows: ACCOUNT NUMBERS PRINCIPAL INTEREST ISSUE MATURITY FIRST INTEREST FOR TREASURY assigned by FRB AMOUNT RATE DATE DATE PAYMENT DATE DEPT.USE ONLY 617 ,300 0 10-11-90 3-1-92 3-1-91 31,100 0 10-11-90 9-1-92 3-1-91 606,100 0 10-11-90 3-1-93 3-1-91 8,800 0 10-11-90 9-1-93 3-1-91 533,800 7 .55319 10-11-90 3-1-94 3-1-91 8,000 8 10-11-90 9-1 94 3-1-91 4,878,200 8 10-11-90 3-1-95 3-1-91 - - i • 1 TOTAL $6,683,300 , NOTE The interest rate on each note may not exceed the maximum interest rate for Treasury securities of comparable terms of maturity,as shown in the Treasury rate table applicable to this issuance The maturity dates specified must be at least one year and one day but not greater than ten years from date of issue Interest will be paid on the designated first interest payment date and semi-annually thereafter, the final six months interest to be paid at maturity with the principal. FRB CERTIFICATION NAME OF STATE OR LOCAL GOVERNMENT BOCK: The undersigned certifies that this form has been City of Pearland, Texas reviewed and is in compliance with regulations govern- ing U.S.Treasury securities—State and Local Govern- SIGNATURE ment Series. TITLE Signature FRB___ - Date Phone FOR BUREAU USE ONLY: ACCOUNTS ESTABLISHED BY: *U.S.GPO:198a-o-717-377'10oi 2 ON Date A. Bureau of the Public Debt Copy October 11, 1990 First City, Texas-Houston, N.A. P. O. Box 809 Houston, TX 77001 Attention: Corporate Trust Gentlemen: The bonds described below have been called for redemption prior to scheduled maturities on the redemption date set out below, at the redemption price of par plus accrued interest to the date fixed for redemption, by ordinance adopted on September 12 , 1990, by the City Council of the City of Pearland, Texas. As registrar for such bonds, you are hereby directed to give notice of redemption of such bonds in accordance with the provisions of the ordinance authorizing their issuance. Such notice is to be given at least thirty days prior to the redemption date by United States Mail, first class, postage prepaid, addressed to each owner of bonds to be redeemed in whole or in part at the address shown on the Register, and by publication one time in The Texas Bond Reporter at least thirty days prior to the redemption date (a copy of the notice of prior redemption attached) . The notice must identify the bonds to be redeemed and must set out the following information: (A) Redemption Date (shown below) . (B) Redemption Price (par plus accrued interest) . (C) Place at which bonds are to be surrendered for payment (First City, Texas-Houston) . Bonds to be Redeemed Redemption Date Refunding Bonds, Series 1985 Maturities 1996 through 2001 March 1, 1995 Please have affidavits of the publication of such notices furnished to the undersigned and to Mr. Clifford W. Youngblood, Vinson & Elkins, 2835 First City Tower, 1001 Fannin, Houston, TX 77002-6760. Very truly yours, Mayor City of Pearland, Texas Received this llth day of October, 1990. FIRST CITY, TEXAS-HOUSTON, N.A. By /VU' `k ULJJ Title NOTICE OF PRIOR REDEMPTION CITY OF PEARLAND, TEXAS, REFUNDING BONDS, SERIES 1985, dated August 15, 1985, in the principal amount of $6, 795, 000, and maturing on March 1 in the following years and amounts: Year Amount Redeemed 1996 $1, 190, 000 1997 1, 280, 000 1998 415, 000 1999 345, 000 2000 295, 000 2001 225, 000 NOTICE IS HEREBY GIVEN that the City of Pearland, Texas, has called the above bonds for redemption on March 1, 1995. Such bonds will be redeemed at First City, Texas-Houston, N.A. , Houston, Texas (formerly First City National Bank of Houston, Houston, Texas) , where due provision shall be made to pay the redemption price of par plus accrued interest to March 1, 1995, the date fixed for redemption. Such bonds shall not bear interest after March 1, 1995. BY ORDINANCE of the City Council of the City of Pearland, Texas, adopted September 12 , 1990. c C. V. Coppinger Mayor City of Pearland, Texas X THE STATE OF TEXAS X X X COUNTY OF TRAVIS X X Before me, the undersigned authority, on this date personally appeared Gloria P. Carter, who, having been by me duly sworn, upon her oath deposes and says; That she is editor of TEXAS BOND REPORTER, an official publication of Municipal Advisory Council of Texas, and is authorized to make this affidavit; that the attached is a true and correct copy of NOTICE OF PARTIAL AND FULL REFUNDING OF MATURITIES - THE CITY OF PEARLAND, TEXAS REFUNDING BONDS, SERIES 1985 was published in TEXAS BOND REPORTER on each of the following date( s) , to wit: September 28, 1990. Sworn to and subscribed before me this the 28th day of September, A.D. 1990. • Notary Public in and for the State of Texas My commission expires 11-10-94. rem :1116 September 28, 1990 p""3�� V - � v"`" i 35 October 11, 1990 TO: All Registered Holders of The City of Pearland, Texas Refunding Bonds, Series 1985 SUBJECT: Notice of Partial and Full Refunding of Maturities The City of Pearland, Texas will be partially refunding the maturities of 1991 through 1996, 1998 thru 2001 and fully refunding the 1997 of the above Bonds, Series 1985. As a result, the refunded portions of each maturity are secured under the terms of an Escrow Agreement between The City of Pearland, Texas and First City, Texas - Houston, N.A. and the remaining unrefunded portions of the applicable maturity will continue to be obligations of The City of Pearland, Texas. In order to distinguish the refunded portions of each maturity fran the unrefunded portion of each maturity, new CUSIP Numbers have been assigned to both the refunded bonds and the unrefunded bonds. The new CUSIP numbers are as follows: Interest Original New CUSIP Number New CUSIP Number Maturity Rate CUSIP Refunded Portion Unrefunded Portion 3/1/91 7.25% 704862FU0 704862JC6 704862JD4 3/1/92 7.5% 704862FV8 704862JE2 704862JF9 3/1/93 7.75% 704862FW6 704862JG7 704862JH5 3/1/94 8.0% 704862FX4 704862JJ1 704862JK8 3/1/95 8.1% 704862FY2 704862JL6 704862JM4 3/1/96 8.25% 704862FZ9 704862JN2 704862JP7 3/1/97 8.4% 704862GP3 704862JQ5 Not Applicable 3/1/98 8.5% 704862GB1 704862JS1 704862JT9 3/1/99 8.6% 704862GC9 704862JU6 704862JV4 3/1/00 8.7% 704862GD7 704862JW2 704862JX0 3/1/01 8.8% 704862GE5 704862JY8 704862JZ5 The City has irrevocably exercised its option to call the Refunded Bonds maturing in 1996 through 2001 for redemption prior to their stated maturity on March 1, 1995 at a price of par plus accrued interest to the date fixed for redemption. The applicable Unrefunded portion will continue to maintain the optional redemption provisions in accordance with the Series 1985 Bond Ordinance. Pursuant to a lottery conducted on September 12, 1990, Bond numbers below in the above maturities were segregated to be secured by the Escrow fund and constitute the refunded portion of the outstanding Bonds. R 59 R 60 R 62 R 63 R 64 R 65 R 66 R 67 R 68 R 69 R 70 R 71 R 72 R 73 R 74 R 75 R 76 R 77 R 78 R 79 R 80 R 82 R 84 R 710 R 711 R 712 R 713 R 714 R 715 R 716 R 717 R 718 R 719 R 720 R 721 R 758 R 759 R 760 R 761 R 763 R 768 R 935 R 936 R 937 R1055 R1056 R1061 R1062 R1079 R1097 R1098 R1100 R1268 R1270 R1288 R1453 R1455 R1456 R1457 R1460 R1477 R1478 R1480 R1483 R1662 R1663 R1680 R1681 R1682 R1683 R1684 R1800 R1830 R1831 R1837 R1848 R1849 (Continued) . ammo' ammo _ammo' Immo mums, =mom .m.mmi. =mom ..... 736 �cpe ° ii. September 28, 1990 PEARLAND, CITY OF - Continued R1850 R1851 R1862 R1863 R1864 R1865 R1866 R1867 R1868 R1869 R1870 R1871 R1872 R1873 R1875 R1877 R1879 R1880 R1881 R1886 R1887 R1888 R1889 R1890 R1891 R1892 R1893 R1894 R1895 R1971 R1982 R1983 R1984 R1986 R1987 R1988 R1990 R1991 R1993 R1997 R1998 R1999 R2000 R2001 R2002 R2003 R2093 R2094 R2095 R2096 R2101 R2110 R2111 R2118 R2119 R2120 R2121 R2122 R2123 R2124 R2127 R2128 R2129 R2130 R2131 R2132 R2134 R2135 R2136 R2137 j R2138 R2139 R2140 R2141 R2142 R2233 R2238 R2241 R2242 R2244 R2245 R2246 R2247 R2248 R2249 R2250 R2251 R2252 R2254 R2255 R2256 R2257 R2261 R2262 R2263 R2265 R2266 R2267 R2342 R2343 R2344 R2345 R2357 R2361 R2367 R2369 R2388 R2389 R2390 R2391 R2392 R2393 R2394 R2396 P2397 R2458 R2459 R2460 R2461 R2462 R2463 R2464 R2465 R2482 R2483 R2484 R2487 R2488 R2489 R2490 R2491 R2492 R2494 R2495 R2496 R2497 R6754 R6756 R6757 R6758 P6759 R6760 R6761 R6762 R6763 R6764 R6766 R6767 R6851 R6852 R6853 R6854 R6855 R6856 R6857 R6858 R6859 R6860 R6861 R6862 R6863 R6864 R6865 R6866 R7006 R7007 R7011 R7012 R7014 R7015 R7020 R7023 R7024 R7025 R7026 R7027 R7028 R7030 R7033 R7034 R7037 R7038 R7039 R7103 R7109 R7110 R7112 R7119 R7122 R7123 R7124 R7125 R7126 R7127 R7128 R7129 R7130 R7131 R7132 R7133 R7134 R7136 R7137 R7138 R7140 PLEASE NOTE THAT ALL CERTIFICATES ISSUED UNDER THE ORIGINAL CUSIP NUMBERS, WHETHER SELECTED FOR REFUNDING OR NOT, MUST BE PRESENTED TO THE PAYING AGENT/REGISTRAR FOR REISSUANCE. Please present certificates of the original CUSIP to: First City, Texas - Houston, N.A. 1301 Fannin, Suite 2215 Houston, TX 77002 Attention: Reorg. Department No transfer forms, bond powers or other forms need be presented to the Paying Agent for reissuance. Please do not attempt to change any name or address information or transfer registration of your certificate as part of this process. If you have any questions, please contact Pam Blanco or the undersigned at (713) 658-7419. Deirdre H. Ward First City, Texas - Houston, N.A. Corporate Trust Department PAID ADV. 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, REFUNDING BONDS, SERIES 1990, dated October 1, 1990, in the aggregate principal amount of $7 , 364 , 391. 80, 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 respectively adopt the same as our own signatures. We further certify that, to our knowledge, no litigation 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 impressed, or placed in facsimile, upon the Bonds is the legally adopted, proper and only official seal of the issuer of the Bonds, said official seal being impressed on this certificate. 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 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 September 12 , 1990, are still true and correct as of this date. WITNESS OUR HANDS this 02 day of , 1990. SIGNATURES TITLE OF OFFICE "//Z Mayor C. V. Coppir( i s / City Secretary Kay Krou (SEAL) The signatures of the above officers are hereby certified to be genuine. ad5e Name of Bank ignatu of B Officer Pe,6 r A-01 (164.er- City Title of Bank Officer (BANK SEAL) -� MENEM rex x .,: THE ATTORNEY GENERA!. !. OF TEXAS JIJI M ATTOY October 2 , 1990 TTOR\EY (;ENN:R THIS IS TO CERTIFY that the City of Pearland, Texas (the "Issuer") , has submitted to me City of Pearland, Texas. Refunding Bonds, Series 1990 (the "Bonds") , in the aggregate principal amount of $7, 364, 391.80 for approval. The Bonds, issued as Current Interest Bonds numbered R-1 through R-6 in the aggregate principal amount of $6,415, 000 and as Capital Appreciation Bonds numbered CR-1 and CR-2 in the aggregate principal amount of $949, 391.80, are dated October 1, 1990, and were authorized by an Ordinance of the Issuer passed on September 12 , 1990. 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 investigation. 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) In accordance with the provisions of the law, including an Escrow Agreement dated September 12, 1990, firm banking arrangements have been made for the discharge and final payment or redemption of the obligations being refunded upon deposit of an amount sufficient to pay said obligations when due. (3) The Bonds are payable from the proceeds of an annual ad valorem tax levied, within the limit prescribed by law, upon all taxable property within the Issuer. i12/•1l 3m 100 SI'I RIB:?II. (7OI"RT I3I"ILI)I\(: _us-r \, 1"A:S.1ti 34.4711-'375•1t4 City of Pearland, Texas, Refunding Bonds, Series 1990 - $7, 364, 391.80 Page Two Therefore, the Bonds are approved. The Comptroller is instructed that he may register the Bonds without the cancellation of the underlying securities being refunded thereby. Att aY a o Generf theat Ste of Texas No. 24371 Book No. 88 spc OFFICE OF COMPTROLLER I OF THE STATE OF TEXAS 1, 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 General approving the City of Pearl and, Texas _ RPfiinriing 6a�dt Series 1990 R-1/R-6 and CR-1/CR-2 of the denomination of numbered S various dated October 1 , 19 90 as authorized by issuer, various interest percent, under and by authority of which said bonds were registered 3 dayof October 19 90 , as the same appears of in this office, on the 131 record on page Bond Register of the Comptrollers Office, Vol. 92 52551 Register Number 3 Given under my hand and seal of office, at Austin, Texas, the October day of , 19 au. « BOB BULLOCK Comptroller of Public Accounts State of Texas 73-116 13•v. 945/4) $7 , 364 , 391. 80 CITY OF PEARLAND, TEXAS, REFUNDING BONDS, SERIES 1990 RECEIPT I, the undersigned, a duly authorized representative of First City, Texas-Houston, N.A. , hereby acknowledge receipt on behalf of the City of $7 , 244 , 779 . 49 for disbursement in accordance with instructions received by or on behalf of the City. FIRST CITY, TEXAS-HOUSTON, N.A. BY ---W i .Fil.4c - •..T Title nC� . .:. -_;�,^ER RECEIPT AND NO-LITIGATION CERTIFICATE THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § CITY OF BRAZORIA § 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 October 11, 1990, we delivered, or caused to be delivered, to the purchaser thereof the following bonds (the "Bonds") : CITY OF PEARLAND, TEXAS, REFUNDING BONDS, SERIES 1990, dated October 1, 1990, in the principal amount of $7 , 364 , 391. 80. 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 $7, 231, 832 .75 plus accrued interest, from the date of the Bonds to the date of delivery. 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 proceedings or authority concerning the issuance of the Bonds; and so far as we know and believe no such litigation is threatened; (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 Certificate submitted to the Attorney General of Texas in connection with the approval of the Bonds. SIGNED AND SEALED as of, and delivered on, the date of delivery of the Bonds set forth above. Mayor CITY OF PEARLAND, TEXAS City Secretary CITY OF PEARLAND, TEXAS (CITY SEAL) CERTIFICATE OF MAYOR AND CITY MANAGER We, the undersigned, Mayor and City Manager of the City of Pearland, Texas (the "City") , acting solely in our official capacities, hereby certify with respect to the City's $7 , 364 , 391. 80 Refunding Bonds, Series 1990 (the "Bonds") , as follows: 1. This certificate is being given pursuant to Section 7 (F) (6) of that certain Bond Purchase Agreement (the "Bond Purchase Agreement") dated September 12, 1990 between the City and Rauscher Pierce Refsnes, Inc. (the "Underwriter") . Capitalized terms herein are used as defined in the Bond Purchase Agreement. 2 . We certify that: (i) the representations and warranties of the City contained in the Bond Purchase Agreement are true and correct in all material respects on and as of the date of Closing as if made on the date of Closing; (ii) except to the extent disclosed in the Official Statement, to our knowledge, no litigation is pending or threatened in any court to restrain or enjoin the issuance or delivery of the Bonds, or the levy or collection of the ad valorem taxes pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity of the Bonds, the Ordinance, the Escrow Agreement or the Bond Purchase Agreement, or contesting the powers of the City or contesting the authorization of the bonds or the Ordinance, or contesting in any way the accuracy, completeness or fairness of the Preliminary Official Statement or the Official Statement; and (iii) to the best of our knowledge, no event affecting the City has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used, or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any respect. SIGNED AND SEALED as of October 11, 1990, the date of payment for and delivery of the Bonds. a CITY OF PEARLAND, TEXAS Mayor 'I ty Manager (SEAL) CERTIFICATE OF CITY MANAGER I, the undersigned, City Manager of the City of Pearland, Texas (the "City") , acting solely in my official capacity, hereby certify with respect to the City' s $7, 364 , 391 . 80 Refunding Bonds, Series 1990 (the "Bonds") , as follows: 1. This certificate is being given pursuant to Section 7 (F) (7) of that certain Bond Purchase Agreement (the "Bond Purchase Agreement") dated September 12 , 1990 between the City and Rauscher Pierce Refsnes, Inc. (the "Underwriter") . Capitalized terms herein are used as defined in the Bond Purchase Agreement. 2 . I certify that other than as reflected in the Official Statement, there has not been any material and adverse change in the affairs or financial condition of the City since September 30, 1989, the latest date as to which audited financial information is available. SIGNED AND SEALED as of October 11, 1990, the date of payment for and delivery of the Bonds. CITY OF PEARLAND, TEXAS ,AA{ ti ity Manager (SEAL) OFFICIAL STATEMENT CERTIFICATE THE STATE OF TEXAS COUNTIES OF BRAZORIA AND HARRIS § We, the undersigned, Mayor and City Secretary, respectively, of the City of Pearland, Texas (the "City") acting in our official capacity as such, hereby certify with respect to that issue of "City of Pearland, Texas, Refunding Bonds, Series 1990" , in the principal amount of $7, 364 , 391.80 (the "Bonds") , as follows: That, to the best of our knowledge and belief: (a) the descriptions and statements of or pertaining to the City contained in its Official Statement, on the date thereof and on the date of delivery were and are true and correct in all material respects; (b) insofar as the City and its affairs, including 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; and (c) insofar as the descriptions and statements, in- cluding financial data contained in such Official Statement, of or pertaining to entities other than the City and their activities 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. EXECUTED this October 11, 1990, the date of payment for and delivery of the Bonds. CITY OF PEARLAND, TEXAS BY: Mayor 2/"17-7 ----2 City Sectetary (SEAL) (b) Issuance and Insurance Costs. It is expected that the amounts described in paragraphs 8(c) and 8(d) will be disbursed within one year of the date hereof for costs of issuing and insuring the Bonds; therefore, such amounts will be invested for an allowable temporary period. (c) Rounding Amount. The amount described in paragraph 8(e) does not exceed the lesser of$10,000 or one percent of the original proceeds of the Bonds; therefore, such amount will be invested for an allowable temporary period. To the extent any of the amounts described in paragraphs 8(b) through 8(e) are not expended as described herein, the City will take steps to restrict the investment of such amounts to a yield which is not materially higher than the yield on the Bonds. 13. Transferred Proceeds. On the dates that amounts on deposit in the Escrow Fund are used to pay principal and/or interest on the Prior Bonds (the "transfer dates"), an amount of the proceeds in the Series 1985 Escrow Fund on hand will cease to be proceeds of the Prior Bonds and will become transferred proceeds (the "transferred proceeds") of the Bonds. The amount of the Series 1985 Escrow Fund which becomes transferred proceeds on each transfer date is an amount equal to the amount of principal and/or interest paid on such Prior Bonds on such date, provided such transferred proceeds do not cause the total value of investments allocable to the Bonds to exceed the value of the outstanding Bonds. The Report includes a schedule of transfer dates and the amount of the Series 1985 Escrow Fund which is subject to becoming transferred proceeds of the Bonds on each such transfer date. The schedule in the Report sets forth computations as of each transfer date of (i) the amount of transferred proceeds, (ii) the amount of future receipts from the investment in the Series 1985 Escrow Fund allocable to each such transferred proceeds amount based on the relative values on such transfer date of the amount of the transferred proceeds on such date and the total value of the unspent proceeds on such date (which value is the present value on such transfer date of the remaining receipts in the Series 1985 Escrow Fund) and (b) the value of the outstanding Bonds on such transfer date reduced by the value of all other investments allocable to proceeds of the Bonds (which values are determined in accordance with section 1.148- 4T(e)(2) of the Regulations), (iii) the difference between the present value of such receipts as of each transfer date using (a) 8.58690 percent, the yield on the Series 1985 Escrow Fund, as the discount rate, and (b) 7.41277 percent, a yield which is not materially higher than the yield on the Bonds, as the discount rate, and (iv) the present value of such differences on the date hereof using 7.41277 percent as the discount rate (the "transferred proceeds penalty amount"). Performing the computations set forth above, the Report shows that the transferred proceeds penalty amount is $66,312.28. The transferred proceeds penalty amount of $66,312.28 was treated in the Report as a discount in -6- computing the composite yield on the Escrowed Securities as described in paragraph 15 below. 14. Yield on the Bonds. For the purpose of this certificate, 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 the obligation, produces an amount equal to the purchase price of such obligation. For purposes hereof, yield is and shall be calculated on a 360-day year basis with interest compounded semiannually. 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 to the date of issue only, at which price a substantial amount of each maturity of the Bonds was to be sold, based (except as described in Exhibit A hereto) on the actual facts and reasonable estimates on the date the Bonds were sold to the Underwriters. Based upon the representation of the Underwriters, set forth in Exhibit A hereto, the initial offering prices of the Bonds (including accrued interest to the date of issue only) aggregated $7,377,338.54. Any Underwriters' discount, issuance costs or costs of carrying or repaying the Bonds or the Refunded Bonds will not be taken into account as an adjustment to the purchase price, except that the cost of the insurance premium on the Bonds paid to Financial Guaranty Insurance Co. ("FGIC') in the amount of $53,986.13 will be treated as a reduction of the purchase price of the Bonds. The insurance premium is separately stated from all other fees or charges payable to FGIC. It is reasonably expected the FGIC, as guarantor, will not be called upon to make any payment with respect to the Bonds for which FGIC will not be reimbursed immediately or upon commercially reasonable repayment terms (during a workout period that is not unreasonably long) for any payment under the FGIC guarantee. FGIC is reasonably assured that sufficient funds will be available in the event that none (or an insubstantial portion) of the proceeds of the Bonds are expended to fund the Project. All payments to FGIC for any nonguarantee service performed by the guarantor will be fully and adequately compensated separate and apart from the guarantee fees described above based on a comparison to payments that would be charged for the nonguarantee service if such service was performed by a person other than a guarantor. Based upon a representation of the Underwriters set forth on Exhibit A hereto, (a) the insurance premium does not exceed a reasonable charge for the transfer of credit risk taking into account payments charged by guarantors in comparable transactions (including transactions in which a guarantor has no involvement other than as a guarantor) and (b) the present value of the debt service savings expected to be realized as a result of such insurance exceeds the present value of the insurance premium discounted at a rate equal to the yield on the Bonds assuming recovery of the insurance premium. -7- Yield on the Bonds is calculated on the basis of the final maturity date because (a) the City has no present intention to call the Bonds for optional redemption (b) no Current Interest Bond is callable at any time for a price less than par plus accrued interest, (c) the Compound Interest Bonds are callable at a price not less than the accreted value on the date fixed for redemption of such Compound Interest Bonds, and (d) the Underwriters have represented on Exhibit A hereto that the issue price of each such callable Bond is not greater than par, plus accrued interest. Therefore, no Bond has a yield calculated to any redemption date for such Bond more than one-fourth of one percent less than the yield produced on such Bond calculated to the date of final maturity of such Bond. In addition, none of the Bonds is subject to mandatory early redemption. The yield on the Bonds calculated in this manner, as shown in the Report, is 7.41277 percent. 15. Yield on the Escrowed Securities. As shown in the Report, the yield on the Escrowed Securities is 7.41250 percent, a yield that is not higher than the yield on the Bonds. The City has covenanted in the Ordinance to comply with, among other things, the requirements of section 148(f) of the Code and, if required, the City will satisfy this requirement with respect to earnings on the Escrowed Securities out of funds other than those in the Escrow Fund. 16. Issue. There are no other obligations which (a) are issued at substantially the same time as the Bonds (i.e., within 31 days of the date hereof), (b) are sold pursuant to a common plan of financing with the Bonds, and (c) will be paid out of substantially the same source of funds or will have substantially the same claim to be paid out of substantially the same source of funds as the Bonds. 17. The Series 1990 Refunding Bonds Interest and Sinking Fund. Pursuant to the Ordinance, the City has created a new debt service fund designated the "Series 1990 Refunding Bonds Interest and Sinking Fund" and the proceeds from all taxes levied, assessed and collected for and on account the Bonds are to be deposited in such Fund. The Interest and Sinking Fund will be used primarily to achieve a proper matching of revenues and debt service on the Bonds and the City expects that taxes levied, assessed and collected for and on account of the Bonds will be sufficient each year to pay such debt service. All amounts which will be used to pay principal of and interest on the Bonds within 13 months of the date of deposit in the Series 1990 Refunding Bonds Interest and Sinking Fund and which will be depleted annually except for a reasonable carryover amount not -8- r.w in excess of the greater of one year's earnings on the Fund or one-twelfth of the annual debt service on the Bonds will constitute a bona fide debt service fund component of the Interest and Sinking Fund (the "Bona Fide Portion"); the remaining portion of the Interest and Sinking Fund (the "Reserve Portion") will be treated separately for purposes of this certificate. Amounts on deposit from time to time in the Bona Fide Portion and the Reserve Portion are allocable between the Bonds and any other obligations of the City secured by the Series 1990 Refunding Bonds Interest and Sinking Fund on the basis of the relative original principal amounts of such issues. The portion of the Reserve Portion allocable to the Bonds at any time (100 percent on the date hereof) is not expected to exceed $736,439.18 so long as any of the Bonds is outstanding. To the extent the amount on deposit in the Reserve Portion exceeds $736,439.18 at any time, such excess shall be invested at a yield not in excess of the yield on the Bonds. 18. No Sinking Funds. Except for and to the extent of the Series 1990 Refunding Bonds Interest and Sinking Fund, there is and will be no other fund or account comprised of any securities, evidences of indebtedness or other obligations and established, or to be established, by or on behalf of the City which is reasonably expected to be used, or to generate earnings to be used, to pay debt service on the Bonds or which is 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. Furthermore, no portion of the annual debt service savings resulting from the issuance of the Bonds will be accumulated in a sinking fund for the payment of debt service on the Unrefunded Bonds payable after the scheduled callable maturity of the Refunded Bonds. 19. Compliance With Rebate Requirements. 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, including the Reserve Portion of the Interest and Sinking Fund, be rebated to the federal government. Specifically, the City will (a) 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, (b) calculate at such intervals as may be required by applicable Regulations, the amount of "rebatable arbitrage earnings," if any, earned from the investment of the "gross proceeds" of the Bonds and (c) pay, not less often than every fifth anniversary date of the delivery of the Bonds and within 60 days following the final maturity of the Bonds, or on such other dates permitted by applicable Regulations, all amounts required to be rebated to the federal government. Further, the City will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to -9- WITNESS MY HAND, this 11th day of October, 1990. CITY OF PEARLAND, TEXAS By: Title: Mayor 503\4093(9/11/90) c:\w/p501shepea270\advref90.arb -11- EXHIBIT A CERTIFICATE OF UNDERWRITERS We, the undersigned, have acted as underwriters in connection with the sale and delivery of the City of Pearland Refunding Bonds, Series 1990, in the aggregate principal amount of $7,364,391.80 (the "Bonds"). In our capacity as underwriters, we hereby certify as follows: (A) The aggregate initial offering price (including bond premium and accrued interest to the date of issue only) of the Bonds to the public (excluding bond houses, brokers and other intermediaries acting in the capacity of wholesalers or underwriters) at which price a substantial amount of each maturity of the Bonds was to be sold is $7,377,338.54. Each of the Bonds was actually offered to the general public in a bona fide public offering for the issue price of the Bond (determined as set forth below). In no event did such issue price for a Bond exceed the fair market value of such Bond on the date the Bonds were sold. Such initial offering prices were determined as follows: (a) In the case of each maturity of Bonds none of which was offered prior to the issue date to an institutional or other investor at a price which is less than the price at which such Bonds were initially offered to the general public, such offering prices were determined on the basis of actual facts and reasonable expectations as of the sale date and have not been adjusted to take into account actual facts after such date; (b) In the case of any maturity of Bonds initially offered at one price to the general public and at a discount from that price to institutional or other investors, the initial reoffering price set forth above is (i) the price at which such Bonds were sold prior to the issue date to such institutional or other investors and (ii) the initial offering price to the general public of the remaining Bonds of such maturity at which price a substantial amount of such Bonds sold. The term "sale date," as used herein, is the first date on which the Bonds were sold by the City pursuant to a binding, written contract. The term "issue date" is the first day on which there is a physical delivery of the written evidence of the Bonds in exchange for the purchase price (but not earlier than the date interest on the Bonds begins to accrue for federal income tax purposes). The issue price of each callable Current Interest Bond is not greater than par, plus accrued interest; therefore, because, pursuant to Section 16 of the Ordinance, no Current Interest Bond is callable at any time at a price less than par, and no Compound Interest Bond is callable at any time at a price less than its accreted value, the yield on each Bond computed to any call date therefor is not more than 1/4 percent less than the yield on such Bond computed to the final maturity date. (B) Based upon the scheduled debt service on the Bonds, an amount of not less than $288,980 should be maintained as of the end of the current fiscal year as a balance allocable to the Unrefunded Bonds in the Series 1990 Refunding Bonds Interest and Sinking Fund consistent with accepted standards of prudent fiscal management for similar governmental districts and in order to provide a reserve against periodic fluctuations in the amount and timing of ad valorem tax collections for debt service purposes. (C) The amount of the cost of insurance for the Bonds is set forth in FGIC's commitment and is separately stated from all other fees or charges payable to FGIC. The cost of such insurance does not include any amount which is intended to compensate the insurer as part of an arrangement for multiple services between the City and FGIC. Furthermore, the amount of the insurance premium has not been increased by any amount to reflect indirect payments of additional costs of issuance (i.e., costs in addition to a charge for transfer of credit risk). The premium does not exceed a reasonable charge for the transfer of credit risk taking into account payments charged by guarantors in comparable transactions (including transactions in which a guarantor has no involvement other than as guarantor). The present value of debt service savings expected to be realized as a result of such insurance exceeds the insurance premium, discounted at a rate equal to the yield on the Bonds which results assuming recovery of the insurance premium. The undersigned understands that the statements made herein will be relied upon by the City in its efforts to comply with the conditions imposed by the Code on the exclusion of interest on the Bonds from the gross income of their owners. Capitalized terms used herein and not otherwise defined have the meaning ascribed to such terms in the No-Arbitrage Certificate to which this certificate is attached. RAUSCHER PIERCE REFSNES, INC. By: C Title: Senior Vice President 503\4093(9/11/90) c:1wp50\ahg\pea2704refadv90.aib Form 8038-G information Return for Tax-Exempt Governmental Obligations (Rev.October 1989) P.Under Section 149(e) OMB No.1545-0720 Department of the Treasury ►See separate Instructions Expires 5-31-92 Internal Revenue Service (Use Form 8038-GC if the issue price is under$100,000) Reporting Authority Check box if Amended Return ► ❑ I Issuer's name 2 Issuer's employer identification number City of Pearland 1-746028909-7 3 Number and street 4 Report number 3519 Liberty Drive G1990 - 1 5 City or town,state,and ZIP code 6 Date of issue Pearland, Texas 77581 October 11, 1990 7 Name of Issue 8 CUSIP Number Refunding Bonds, Series 1990 704862JB8 Part II Type of Issue(check box(es)that applies and enter the Issue Price) 9 Check box if obligations are tax or other revenue anticipation bonds► ❑ Issue price 10 Check box if obligations are in the form of a lease or installment sale► ❑ 11 0 Education $ 12 ❑ Health and hospital 13 0 Transportation 14 0 Public safety 15 0 Environment(including sewage bonds) 16 0 Housing 17 0 Utilities 18 0 Other. Describe(see Instructions)► Part III Description of Obligations (a) (b) (c) Stated redemption Weighted (f) Net interest Maturity date ld cost 19 Final maturity 3 1-2009 Interest rate Issue pri0 % ceprice 5.20 765,aturity averaie 000 War J/J�farj/////////, y ////l//%%%/%Q%%//% %%%///%///%/,, 7,364,391.80 10,000,000 l�/11 .567 years 7,,4128` 11.16 % 20 Entire issue . Part IV Uses of Original Proceeds of Bond Issues(including underwriters'discount) 21 Proceeds used for accrued interest 21 12,946.74 22 Issue price of entire issue(enter line 20c) 22 7 364 391 .80 23 Proceeds used for bond issuance costs(including underwriters'discount). ! 23 205,459.05r 24 Proceed?.used for credit enhancement 24 53,986.13 25 Proceeds allocated to reasonably required reserve or replacement fund . 25 --0-- 26 Proceeds used to refund prior issues 26 7,104,931 .08 27 Total(add lines 23,24, 25,and 26) 27 7,364,376.26 28 Nonrefunding proceeds of the issue(subtract line 27 from line 22 and enter amount here) 28 _ 15.54 Part V Description of Refunded Bonds(complete this part only for refunding bonds) 29 Enter the remaining weighted average maturity of the bonds to be refunded ► 3.737 years 30 Enter the last date on which the refunded bonds will be called ► March 1, 1995 31 Enter the date(s)the refunded bonds were issued ► August 15, 1985 Part VI Miscellaneous 32 Enter the amount of the state volume cap allocated to the issue ► --0-- 33 Enter the amount of the bonds designated by the issuer under section 265(b)(3)(B)(i)(III) (small issuer exception) ► $7,364,391 .80 34 Pooled financings: a Enter the amount of the proceeds of this issue that are to be used to make loans to other governmental units► 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 ► and the date of the issue ► Under penalties of perjury.I declare tha: ia,e examined this return and accompanying schedules and statements.and to the best of my knowledge and belief. they are true.correct,and complete Please Sign �/V �1 10/11/90 C.V. Coppinger, Mayor Here Signature nicer Date Type or print name and title - For Paperwork Reduction Act Notice, see page 1 of the Instructions. Form 8038-G (Rev 10-89) *U.S. Government Printing Office, 19$9-262-tst/00019 any person other than the federal government by entering into any investment arrange- ment with respect to the "gross proceeds" of the Bonds that might result in a reduction in the amount required to be paid to the federal government because such arrangement results in a smaller profit or a larger loss than would have resulted if the arrangement had been at arm's-length and had the yield on the issue not been relevant to either party. 20. No Other Refunding. No portion of the proceeds of the Bonds is expected to be used to pay any interest on or principal of any issue of governmental obligations other than the Bonds and the Refunded Bonds. 21. No Artifice of 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 and the Regulations by (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. 22. Not an Abusive Transaction. A device has not been and will not be employed in connection with the issuance of the Bonds to obtain a material financial advantage (based on arbitrage) apart from savings attributable to lower interest rates. 23. No Arbitrage. On the basis of the foregoing facts, estimates and circumstances, it is expected that the proceeds of the Bonds will not be used in a manner that would cause any of the Bonds to be an "arbitrage bond" 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 no other facts, estimates or circumstances that would materially change such expectations. 24. Right to Certify. Although no examination has been made, the undersigned is neither aware of any listing or proposed listing of the City by the Commissioner of Internal Revenue, by publication in the Internal Revenue Bulletin or otherwise, to the effect that it may not certify the Bonds, nor has the City been notified of any such listing or proposed listing of it by the Commissioner of Internal Revenue, by publication in the Internal Revenue Bulletin or otherwise, to the effect that it may not certify the Bonds. -10- PAYING AGENT/REGISTRAR AGREEMENT THIS AGREEMENT (this "Agreement") , is entered into as of September 12 , 1990, by and between the City of Pearland, Texas (the "Issuer") , and First City, Texas-Houston, N.A. , Houston, Texas (the "Bank") . RECITALS OF THE ISSUER The Issuer has duly authorized and provided for the issuance of its bonds, entitled "City of Pearland, Texas, Refunding Bonds, Series 1990" (the "Bonds") in an aggregate principal amount of $7, 364 , 391. 80 to be issued as fully registered bonds; All things necessary to make the Bonds the valid obligations of the Issuer, in accordance with their terms, will be done upon the issuance and delivery thereof; The Issuer and the Bank wish to provide the terms under which the Bank will act as Paying Agent to pay the principal, redemption premium (if any) and interest on the Bonds, in accordance with the terms thereof, and under which the Bank will act as Registrar for the Bonds; The Issuer and the Bank have duly authorized the execution and delivery of this Agreement; and all things necessary to make this Agreement the valid agreement of the parties, in accordance with its terms, have been done. NOW, THEREFORE, it is mutually agreed as follows: ARTICLE ONE APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 1. 01. Appointment. The Issuer hereby appoints the Bank to act as Paying Agent with respect to the Bonds, to pay to the Registered Owners of the Bonds in accordance with the terms and provisions of this Agreement and the Bond Ordinance, the principal of, redemption premium (if any) , and interest, on all or any of the Bonds. The Issuer hereby appoints the Bank as Registrar with respect to the Bonds. The Bank hereby accepts its appointment, and agrees to act as Paying Agent and Registrar. Retirement of Bonds For retirement of maturity, or by call as a whole: Per Bond $ 5.20 Extraordinary Services Charges for performing any service not specifically covered in this schedule will be determined by an appraisal of the services rendered. Additional Charges The fees shown in this schedule do not include counsel fees or any other expenses or disbursements. All out-of-pocket expenses such as stationery, binders, checks, forms, printing, and envelopes will be added at cost, to the regular fee for services. Postage, registered mail and insurance charges will be billed in addition to all other fees and charges. Billing Accounts are billed on a semi-annual basis. Amounts billed are considered due on receipt. -2- "Person" means any individual, corporation, partnership, joint venture, associations, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of a government or any entity whatsoever. "Registrar" means the Bank when it is performing the function of registrar. All other capitalized terms shall have the meanings assigned in the Ordinance. ARTICLE THREE DUTIES OF THE BANK Section 3 . 01. Initial Delivery of Bonds. The Bonds will be initially registered and delivered to the purchaser designated by the Issuer as set forth in the Ordinance. If such purchaser delivers a written request to the Bank not later than five business days prior to the date of initial delivery, the Bank will, on the date of initial delivery, exchange the Bonds initially delivered for Bonds of authorized denominations, registered in accordance with the instructions in such request and the Ordinance. Section 3 . 02 . Duties of Paying Agent. As Paying Agent, the Bank shall, provided adequate funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of, redemption premium, if any, and interest, on each Bond in accordance with the provisions of the Ordinance. Section 3 . 03 . Duties of Registrar. The Bank shall provide for the proper registration of the Bonds and the exchange, replacement and registration of transfer of the Bonds, in accordance with the provisions of the Ordinance. The Bank will maintain the books of registration in accordance with the Bank's general practices and procedures in effect from time to time. Section 3 . 04 . Unauthenticated Bonds. The Issuer shall provide an adequate inventory of unauthenticated Bonds to facilitate transfers. The Bank covenants that it will maintain such unauthenticated Bonds in safekeeping and will use reasonable care in maintaining such Bonds in safekeeping, which shall be not less than the care it maintains for debt -3- securities of other government entities or corporations for which it serves as registrar, or which it maintains for its own bonds. Section 3 . 05. Reports. The Bank will provide the Issuer reports not less often than once each three months, which reports will describe in reasonable detail all transactions pertaining to the Bonds and the books of registration. The Issuer may also inspect and make copies of the information in the books of registration at any time the Bank is customarily open for business, provided that reasonable time is allowed the Bank to provide an up-to-date listing or to convert the information into written form. The Bank will not release or disclose the content of the books of registration to any person other than to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a subpoena, court order or as otherwise required by law. Upon receipt of a subpoena, court order or other lawful request, the Bank will notify the Issuer immediately so that the Issuer may contest the subpoena, court order or other request. Section 3 . 06. Cancelled Bonds. All Bonds surrendered for payment, redemption, transfer, exchange, or replacement, if surrendered to the Bank, shall be promptly cancelled by it and, if surrendered to the Issuer, shall be delivered to the Bank and, if not already cancelled, shall be promptly cancelled by the Bank. The Issuer may at any time deliver to the Bank for cancellation any Bonds previously authenticated and delivered which the Issuer may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Bank. All cancelled Bonds held by the Bank shall be destroyed and evidence of such destruction furnished to the Issuer. Section 3 . 07. Reliance on Documents, Etc. (a) The Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions furnished to the Bank by the Issuer. (b) The Bank shall not be liable to the Issuer for actions taken under this Agreement so long as it acts in good faith and exercises due diligence, reasonableness and care, as prescribed by law, with regard to its duties hereunder. (c) This Agreement is not intended to require the Bank to expend its own funds for performance of any of its duties hereunder. -4- (d) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys. Section 3 . 08 . Money Held by Bank. Money held by the Bank hereunder shall be held in trust for the benefit of the Registered Owners of the Bonds. The Bank shall be under no obligation to pay interest on any money received by it hereunder. All money deposited with the Bank hereunder shall be secured in the manner and to the fullest extent required by law for the security of funds of the Issuer. Any money deposited with the Bank for the payment of the principal, redemption premium (if any) or interest on any Bond and remaining unclaimed by the Registered Owner after the expiration of three years from the date such funds have become due and payable shall be reported and disposed of by the Bank in accordance with the provisions of Texas law including, to the extent applicable, Title 6 of the Texas Property Code, as amended. The Bank shall have no liability to the Registered Owners of the Bonds by virtue of actions taken in compliance with the foregoing provision. ARTICLE FOUR MISCELLANEOUS PROVISIONS Section 4 . 01. May Own Bonds. The Bank, in its individual or any other capacity, may become the owner or pledgee of Bonds with the same rights it would have if it were not the Paying Agent and Registrar for the Bonds. Section 4 . 02 . Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereof. Section 4 .03. Assignment. This Agreement may not be assigned by either party without the prior written consent of the other. Section 4 . 04 . Notices. Any request, demand, authorization, direction, notice, consent, waiver or other document provided or permitted hereby to -5- be given or furnished to the Issuer or the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown herein, or such other address as may have been given by one party to the other by 15 days written notice. Section 4 . 05. Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. Section 4 . 06 . Successors and Assigns. All covenants and agreements herein by the Issuer and the Bank shall bind their successors and assigns, whether so expressed or not. Section 4 . 07 . Severability. If any provision of this Agreement shall be invalid or unenforceable, the validity and enforceability of the remaining provisions hereof shall not in any way be affected or impaired. Section 4 . 08 . Benefits of Agreement. Nothing herein, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy or claim hereunder. Section 4 . 09 . Ordinance Governs Conflicts. This Agreement and the Ordinance constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent and Registrar and if any conflict exists between this Agreement and the Ordinance, the Ordinance shall govern. Section 4 . 10. Term and Termination. This Agreement shall be effective from and after its date and may be terminated for any reason by the Issuer or the Bank at any time upon 60 days written notice; provided, however, that no such termination shall be effective until a successor has been appointed and has accepted the duties of the Bank hereunder. In the event of early termination regardless of circumstances, the Bank shall deliver to the Issuer or its designee all funds, Bonds and all books and records pertaining to the Bank' s role as Paying Agent and Registrar with respect to the Bonds, including, but not limited to, the books of registration. -6- Section 4 . 11. Governing Law. This Agreement shall be construed in accordance with and shall be governed by the laws of the State of Texas. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. -7- CITY OF PEARLAND, TEXAS By ie/,� Mayor 1 ADDRESS: P. O. Box 2068 Pearland, TX 77588 ATTEST: City Secretary (SEAL) FIRST CITY, TEXAS-HOUSTON, N.A. By ' 1J LL.e O Title ADDRESS: Corporate Trust Department P. O. Box 809 Houston, TX 77001 ATT ST (SEAL) -8- SL'T $ :uoT4PagsTbaa pue aajsueax aad abam0 OS'T $ :uoTgeagsTbaa pue 93uenssT TeuTbTao aad abagg) aEagsTbag pue aagsueay PuOg TEdTOTum4 2aPTOupuoq pup S2iI 04 bu q xodaz xe4 pup buTpTogggTM pup 's0ag0 gsaaequr TEnuue-Tows 3o aouenssT 'sgaOdaa aaJsueaq ATM) 3o buzuSTuzn3 '109TTaoueo penssT sagepT3T4xao TTE 30 buTpsod 'sdogs oq TEnauaa pue quauBoeTd 'sx3ploq 3o sassaappe 3o buTuTequTEuu sapnTOur abargo sTgy 00'00Z $ :anssl aad ulnucuTw TEnuuv 00'S $ :pouTEquTew qun000v aad aDueuaquTEW quno3DV aaPTogpuog snTd STSEq TEnUUE-TUBS a 110 pabaego ST 4' •parro3 -aad saOTnaas anT3eagsTunllpe Tuwaou .zanOo abaeg0 STL6L 00'0SL $ :anssl aed uOTquaqSTuTUW TenuuV .spuoq age 3o uoTquoTquagfne pup quno3OE au; 3o aouegdaooP eq3 'spuoq 3o aDuenssT au; buT4..zoddns pup buTzTaomne squaumaop Tenn Tie 3o uoTquaapTsuo3 pup Apngs agaTduno Sa3ADO abaego sTLLL (buTsoTO 4E aTgeAEd @ea aunts-au0) -0- :paadao0v anssl aad aoue.deoav TeTgTul 0661 SEMIS 'werluvaa 30 AIM Saa3 3O BIOS SSOI&Ias EVEISIDSHAINEW OIIfidd TddIOINf1W 0661 '1T legwagdaS uo9-859(£IL) T00L suxaJ`uoisnoH 608 xog'Od z SV)G LAO N0LEVIKM&OJnV £LID.�sin3 w.SUXUX1.1) 1ILII� REGISTRAR'S RECEIPT The undersigned duly authorized representative of First City, Texas-Houston, N.A. , Houston, Texas, the registrar of the following described bonds: CITY OF PEARLAND, TEXAS, REFUNDING BONDS, SERIES 1990, dated October 1, 1990, in the total authorized aggregate amount of $7, 364 , 391. 80, certifies that it has duly registered the above mentioned bonds in accordance with the Bond Ordinance, dated September 12 , 1990, and that said bonds have been delivered to the purchaser. EXECUTED AND DELIVERED this llth day of October, 1990. Byi/S, l�� ( cju Title CORPORATE TRUST OFFICEK N rim relit raft ring east _, Am" Financial Guaranty Insurance Company FG�C 175 Water Street New York.NY 10038-4972 (212 607-3000 800)352-0001 A GE Capital Company Municipal Bond New Issue Insurance Policy Issuer: City of Pearland, Texas Policy Number: 90010204 Control Number: 0010001 Bonds: $7 , 364 , 391 . 80 in initial Premium: $74 , 230 . 93 principal amount of Refunding Bonds, Series 1990 Financial Guaranty Insurance Compan% 'Financial Guaranty-' . a New York stock insurance company, in consideration of the payment of the premium and subject to the terms of this Policy, hereby unconditionally and irrevocably agrees to pay to Citibank, N.A., or its successor, as its agent (the "Fiscal Agent"), for the benefit of Bondholders, that portion of the principal and interest on the above-described debt obligations (the "Bonds") which shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer. Financial Guaranty will make such payments to the Fiscal Agent on the date such principal or interest becomes Due for Payment or on the Business Day next following the day on which Financial Guaranty shall have received Notice of Nonpayment, whichever is later. The Fiscal Agent will disburse to the Bondholder the face amount of principal and interest which is then Due for Payment but is unpaid by reason of Nonpayment by the Issuer but only upon receipt by the Fiscal Agent, in form reasonably satisfactory to it,of (i) evidence of the Bondholder's right to receive payment of the principal or interest Due for Payment and (ii) evidence, including any appropriate instruments of assignment, that all of the Bondholder's rights to payment of such principal or interest Due for Payment shall thereupon vest in Financial Guaranty. Upon such disbursement, Financial Guaranty shall become the owner of the Bond, appurtenant coupon or right to payment of principal or interest on such Bond and shall be fully subrogated to all of the Bondholder's rights thereunder, including the Bondholder's right to payment thereof. This Policy is non-cancellable for any reason. The premium on this Policy is not refundable for any reason. including the'payment of the Bonds prior to their maturity. This Policy does not insure against loss of any prepayment premium which may at any time he payable with respect to any Bond. As used herein, the term "Bondholder" means, as to a particular Bond, the person other than the Issuer who, at the time of Nonpayment, is entitled under the terms of such Bond to payment thereof. `'Due for Payment" means, when referring to the principal of a Bond, the stated maturity date thereof or the date on which the same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity and means, when referring to interest on a SM: Service mark used by Financial Guaranty Insurance Company under license from its parent company, FGIC Corporation Form 9000(8/90) Page 1 of 2 VI. rS ."" roma r ma rl - r owl r•. '--, Financial Guaranty Insurance IMMO Company FCC. 175 Water Street / lJ New York.NY 10038-4972 212 607-3000 800 352-0001 A GE Capital Company Municipal Bond New Issue Insurance Policy Bond. the stated date for payment of interest. "Nonpayment" in respect of a Bond means the failure of the Issuer to have provided sufficient funds to the paying agent for payment in full of all principal and interest Due for Payment on such Bond. "Notice" means telephonic or telegraphic notice. subsequently confirmed in writing,or written notice by registered or certified mail. from a Bondholder or a paving agent for the Bonds to Financial Guaranty. "Business Day" means any day other than a Saturday. Sunday or a day on which the Fiscal Agent is authorized by law to remain closed. In Witness Whereof, Financial Guaranty has caused this Policy to be affixed with its corporate seal and to be signed by its duly authorized officers in facsimile to become effective and binding upon Financial Guaranty by virtue of the countersignature of its duly authorized representative. President Senior Vice President yx, r Effective Date: October 11 , 199 0 orized Representative Citibank. N.A.. acknowledges that it has agreed to perform the duties of Fiscal Agent under this Policy. Authorized Officer Countersignature: i 4Aget SM: Service mark used by Financial Guaranty Insurance Company under license from its parent company, FGIC Corporation Form 9000 (8/90) Page 2 of 2 Financial Guaranty insurance Company TR!. 1751L'ater Street New York.NY 10038-4972 (212)607-3000 (800)352-0001 • A GE Capital Company Endorsement To Financial Guaranty Insurance Company Insurance Policy Policy Number: 90010204 Control Number: 0010001 4 It is further understood that, with respect to the Bonds maturing on March 1 in the years 2008 and 2009 , the amount insured under this Policy is that portion of the Accreted Value (as set forth in the bond documents under which the Bonds are issued) of said Bonds which shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer. IN WITNESS WHEREOF, Financial Guaranty has caused this Endorsement to be affixed with its corporate seal and to be signed by its duly authorized officers in facsimile to become effective and binding upon Financial Guaranty by virtue of the countersignature of its duly authorized representative. IIF President Senior Vice President Effective Date: October 11 , 1990 A Representative 4 Acknowledged as of the Effective Date written above: Authorised Officer Citibank. N.A..as Fiscal Agent SA1' Service by Financial(•I uin,iii l' (A111111N11y 111141er IN'1•II:W(null 11s lumina 1'IN11i NIIIV: (AN'1N 1ri11N NI E-0 014 pi* ria poi rim rm. A Financial Guaranty Insurance MINEW Company FG1C s. 175 Water Street New York.NY 10038-4972 212 607-3000 800):352-0001 A GE Capital Company Endorsement To Financial Guaranty Insurance Company Insurance Policy Policy Number: 90010204 Control Number: 0 010 0 01 It is further understood that the term "Nonpayment- in respect of a Bond includes any payment of principal or interest made to a Bondholder by or on behalf of the issuer of such Bond which has been recovered from such Bondholder pursuant to the United States I3ankruptcy Code by a trustee in hankruptcy in accordance with a final, nonappealable order of a court having competent jurisdiction. . In Witness Whereof, Financial Guaranty has caused this Endorsement to be affixed with its corporate seal and to be signed by its duly authorized officers in facsimile to become effective and binding upon Financial Guaranty by virtue of the countersignature of its duly authorized representative. President Senior Vice President Effective Date: October 11 , 1990 thorized Representative Acknowledged as of the Effective Date written above: Authorized Officer Citibank. N.A., as Fiscal Agent Count r • gnature : Lic nsed esident Age SM: Service markr. I by Financial Guarani Insurance Company under license from as parent company;FCC(:Cotpnrattort Form E-00028/90) Page 1of1 vim Ira roe r— rim Financial Guaranty Insurance Company mom FGICSM 175 Water Street New York,NY 10038-4972 (212) 607-3000 (800)352-0001 A GE Capital Company Joan E.Kinunelman First Vice President Associate General Counsel October 11, 1990 City of Pearland, Texas Rauscher Pierce Refsnes, Inc. Houston, Texas Gentlemen: I am First Vice President and Associate General Counsel of Financial Guaranty Insurance Company ("Financial Guaranty") , and have been requested to render an opinion in connection with the issuance by Financial Guaranty of its Municipal Bond New Issue Insurance Policy (the "Policy") delivered to First City, Texas-Houston, N.A. , Houston, Texas, as paying agent for $7, 364 , 391. 80 in initial principal amount of City of Pearland, Texas Refunding Bonds, Series 1990 (the "Bonds") . I have examined such documents and records as I have deemed relevant for purposes of this opinion, including (i) the Certificate of Incorporation of Financial Guaranty, including all amendments thereto, (ii) the amended By-laws of Financial Guaranty as in effect on the date hereof, (iii) the certificate of authority issued to Financial Guaranty by the Superintendent of Insurance of the State of New York, (iv) the certificate of authority issued to Financial Guaranty by the Commissioner of Insurance of the State of Texas, (v) the executed Policy and (vi) the statements in the Official Statement dated September 12, 1990 relating to the Bonds (the "Official Statement") in the first three paragraphs under the caption "Municipal Bond Insurance" . On the basis of the foregoing, it is my opinion that: (1) Financial Guaranty is a stock insurance corporation validly existing and in good standing under the laws of the State of New York and qualified to do business therein and is licensed and authorized to issue the Policy under the laws of the State of Texas. h , , r , , ` ' :' ' Zh, 4.':k . . tI�ED Sm31PESoff ERI A - , , q -- ' t. ' at" . ') . . • - -- - ---- ---- ----,--------- % REGISTERED REGISTERED I :4(tutal DENOMINATION • - STATE OF TEXAS g 1 af+ der — :YIT01111 E98 DOLLARS ( `m. �*" �.- . , ��CR- _ C�itU of Jearlanb, Ze tts $ ��'. a • ,,, :,, } , `" + efunbing None , it«Ik. •r SERIES 1990 { MATURITY DATE: ISSUANCE DATE: '- ,_ a CUSIP: • I October 11, 1990 , `,!: 4n , Iitnnli: REGISTERED OWNER: 1 a;,," ,. ' v " 4.#'p' •, ; e0. , .tr'i l' u e r11 „ t 'molt• 1 MATURITY AMOUNT: DOLLARS + r• e , p The City of Pearland,Texas(the"City")promises to pay to the registered owner identified above,or registered Table of Accreted Values on the reverse hereof.The Accreted Value(per$5,000 of Maturity Amount)of this Bond, `' assigns,on the date specified above,upon presentation and surrender of this Bond at the principal corporate trust office as of the Issuance Date and as of each March I and September I is set forth on the reverse hereof. Such value as 7 „, sR' t of First City, Texas—Houston, N.A., Houston, Texas (the "Registrar"), the Maturity Amount identified above, of any other date shall be determined by straight-line interpolation between such values. ; :*''94 4* y representing the principal amount hereof and accrued and compounded interest hereon(both as shown in the table on REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON • MO ,f the reverse of this Bond),in any coin or currency of the United States of America which on the date of payment is THE REVERSE HEREOF,WHICH PROVISIONS SHALL HAVE THE SAME FORCE AND EFFECT AS IF SET ' Hitt ! '' yt ; legal tender for the payment of debts due the United States of America.The date of this Bond is October 1, 1990, FORTH AT THIS PLACE. "iv; #3• but interest shall accrue on the principal amount hereof from the Issuance Date at the per annum rate specified on the 7s a ••0 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 t:14;'11 duly impressed,or placed in facsimile,on this Bond. 1 I 1 AUTHENTICATION CERTIFICATE a *• , It is hereby certified that this Bond has been delivered pursuant to the Bond Ordinance described ••• ...• : :, : ••• . •',•s- st, ; i in the text of this Bond,in exchange for or in replacement of a Bond,Bonds or a portion of a Bond or ,�,,,nu,,,�r •••• +' Bonds o a Series which was originally a roved the AttorneyGeneral of the State ofTexas and registered hp I A ., • CLI Y •F.1 11R AIiID��6}(AS ut1}�} PP by 8 `��E MO�' Q {(111 11: by the Comptroller of Public Accounts of the State of Texas. :ao�...••"•'•" .,1e.' ••'•• • :•. 4 2 :i Date of Authentication First City, Texas—Houston,N.A. _<:: J` .«c �/ .�� 4 • J,j ••• • ••• • •'.• •. ••, !4:.>lt •• . ••• City Seer'lary.:.• :.. •'• Mayoj..: �{iN a> WO aq By '•��''•nnnn.,`•s'� •• :•• Si• i• ••• • i'•• ••• •• • I r ;` , Authorized Signature • • • • • • • •• • • • ••� �• • • • • • • • • •• 1 , • , j .• • •• ••• •S . • ••• • • " I mot vow . ._ - . - . . - - off, _ � 3 o..; : 1 ,,•;.., ,;, M a.,r. ,, .t O ' � 1 v� r. `fir.M, ,r� ''•' a „ :.� ': 1;.. :. i..... A ,,.r •,1 /•"�,:. ✓'1,, i, ""`,.:: r..��''r, \. r l:� `", , "�,.. .M.. i1 A^� 1, M. ",�' �r� 1 , ..'I,,'..,"1. r "�. 'M ,.�`.. M ,i'r. �.. :.1,r r, . , �1� THIS BOND Is one of a dub authanleed tstuc of Bonds.aggregating$7.164.391 B0 Mc"Bola-1.tmued for the prpoW oI THE CAPITAL APPRECIATION BONDS ARE EXCHANGEABLE at the plreipal mrp.rae trust office of the Registrar lot refunding a p rton of the Cay'(outstanding Refunding Bonds.Series 1985.and pursuant to an ordinance adopted by the Coy Council Bonds in the muttony amount of$5.000 or any integral multiple thereof.subject to the terms and conditions of the Ordmane on September 12,1990(Mc"Ordtmncc"1.Tee.ids arc issued as 111 Binds in the aggregate pnnctpal amount of 5949.391.80 which THIS BOND shall tan be yak]or obligatory for any purpose or be entitled to any benefit under the Ordinance unless this Bond pay interest only a maturity or pm redempton Pk"Caput Appreclamn Bonds")and lint Bonds m the aggrcgae primtpal amount p caber lit registered by the Comptroller of RM.Attuunea of the Sue of Texas by regowoo n certificate attached or affixed'wrest, of 46,415,000 which pay Intertst wmannualls until maturity or pot reakmpkm Mc"Current Interest Bonds"I or MI authenticated by Ow Registrar by due execution of Be authentication centric-ate endorsed tram. THE CITY RESERVES THE RIGHT.a is moon,to redeem Bonds pram to their scheduled maturities.in hot or from or. THE REGISTERED OWNER of Om Brad.by acceptance Ierno(.akn.wd.ps and agrees to bebwnd by all Mr tam.end ctadni(as BaMIR n pan, mega multiples of 55.1100.on'September I.2000.t any date dherealte a pre respect o Current rot col the Ordinance. nda,par plus accrual merest Vi the date axed for rdemptlm and.with ITspn.to('apiul Appreciation Bonds.103K of the Aacret6 THE CITY has covenanted In Ordinance that n will at all tomes provide legally qualified registrar for N<Bond,and will on the date fixed for redemption Rekrerceu met to the Ordimncefor complete deuilseonernimg the manner of redeeming Bonds air onds cat eof any change of registrar it.mat.to each'epodes..owner NOTICE(IF ANY REDEMPTION shall he given at least thirty 1301 days pour to the date fix.for redemption b E y nt class IT r IS HEREBY tend),recited and covenanted nut Moats.has been duly and validly pm.and Mkserd.that all acts.coadrtmm mail.addressed to the'canster.owners of each Bond to he redeem.in*Mar or in pan at the address shown on the books ofdewstratton and things reyared or proper to be performed.to cost and In he none precedent to or In the issuance end&laces of this Bad have kept es the Reglsnar When Binds or pommy thereof have been called for redemption.and due provision has been made to(edam been perfumed.(,UI and have b,1 done in accordus:with law,and that annual ad vdoorn taxes.wahn the limits prern[ed icy the same.the amtwnts so redeemari shall be payable solely from the funds provided for redemptioq,and interest wfich wm1J otherwise law.suffaknt to provide for the payment of the merest on and principal of this Bond,as such merest comes due and such principal accrue n the amounts called for redemption shall terminate on the date fixed Mr retie ption res.has been tested and order.to.Icvid against MI taxable property 1n the City.and hays been pledged Irrevocably for such THIS BIND IS TRANSFERABLE My upon prcsentatron and surrender at the principal corporate trust office of the Registrar. payment duly endorsed for transferor accom prsed by an aagnmcnt duly executed 6y the registered owner or his audwmed representative,sub.,' to the temps and conditions of the Ordinance. • TABLE OF ACCRETED VALUES The Accreted Value and principal amount(per 55.7300 of Maturity Amount,.together with the interest rate arc as follows: MATURITY(MARCH 1) 2008 2009 MATURITY(MARCH H 2O08 2009 PRINCIPAL AMOUNT 81J78.IS 51.268.40 PRINCIPAL AMOUNT 51.378 IS $1,248.40 INTEREST RATE 7.55% 7.60% INTEREST RATE 7.53% 7,60% October II.1990 .378.15 1.268.40 March I.2000 2 763.67 2.555.16 March I.1991 .418.46 1.305.71 September I.2000 2.86800 2,652.25 September 1.1991 .4'n.01 1.355.38 March I.2001 2,976.27 2.753.04 March I.1992 .527.57 1.406.89 September I.2001 3.048.62 2.857.65 September I.1992 .585.24 1.460.35 hearth I.21202 3.205.21 2.966.25 March I.1993 .645.08 1.515.84 September 1.2012 7,326.21 3.078% September I,1993 .707 18 1.573.45 March I.2003 3,451 78 3.195.96 March I.1994 .771.63 1.63324 September I.2011.3 3,58208 3.317.41 September I.1994 .638.51 1,695.30 March 1.20. 3.717.30 3,443.47 March I.1995 .907.91 1.759.72 September I.2014 3.957.63 3.574.32 September I,1993 ,979.94 1.626.59 Much I.2035 4E03.26 3,710.15 Marsh I.1996 ,034.68 1.896.00 September I.2005 4.154.38 3,851.13 September 1.19% .132.24 1.968.05 March 1.2006 4.311.21 3.997.46 March I.1997 ,21274 2.042.84 September I.2016 4,47396 4.149.38 September I,1997 ,2%.27 2.120.46 March I.2007 4.662.85 4,307.06 March I.1998 .342.95 2,201.04 September I.2U17 4.919.12 4.470.72 September I,1998 ,472.91 2,284.68 March I.2038 3030.00 4,640.61 March I.1999 .566.26 2.371.50 September I.2008 4.816.96 September I.1999 .663.14 2.461.62 March I.2009 5.000.00 VINSON a EUIINS ATTORNEYS AT LAW .00 FIRST CITY TOWER 001 FANNIN HOUSTON.TEXAS 77003-0780 WE HAVE ACTED as bad counsel for the City of Peerland.Texas Ithc-City").n mn¢Tion with an rave of hods 10e"Bonds"I 131 Taxabk papery(n the City is subjen to the levy of ad valorem taxes,within the limns pre5Tfi1J by law.to pay described as follows: the Bonds and the interest 0emm. CITY OF PEARLAND.TEXAS.REFUNDING BONDS,SERIES 1990.dated Ocober I.1990.In a-min:ipal amount THE RIGHTS OF THE OWNERS of the Soda are whims to isle applraM1 pnviamm of the federal hankmpdc,laws and any of$7,364.391.80. oaer similar laws affecting the rights of creditors of political suhdolsiona generally a.maybe limited by generally principles of equity which permit the exercise of j.icid discretion. The Bonds mature.bear interest.arc subteen to redemption prior to maturity and may be transferrd a.exchanged as "out in the Bonds and m the ordinance adopted by the City Council of the Cory authorizing their issuance Me IT IS O(IR FURTHER OPINION dueOrdinrc<"1. adopted i l i Interest on 6K Bads is eaclradr tram gross ircoue of the owners for federal income tax purposes under cawing WE HAVE ACTED as Mod counsel fog the rot end it tendering an exclusion with input to the kBlidy oil sanctity of the Una.and Bonds under 0e a tat2p rp a.laws of the State of estigat Texas,end with'expect no Hoc exclusion or interest on the Boss from gross mom for federal income he purposes.We have rpr im<stias de or verified original pnpadinap ecod1,data or niter stater..but have III Ter Bonds an not"private activity Bute'within the meaning afar Internal Revenue Code of 1986 oho''Code"), relied spy upon the transcriptil of or peonies of d,Ciy o In 16c sc losure t paragraph c We havr rot thence any a Bonds.Our u.(except(ha the Bvtd1 is not whjem to the altco pout minimum tax d Individual,netala and cor e-or under current with in to the with financialCty'scondition o ial Staefks of the City or the disclosure thereof in ctnmson with the axle of the lime Our law.except that wee 1n0511(1 wall ti included n a the mini uxpayer s"dfuupe net bone intone-'ter"W1uala mire, dot in one the Cav's Official 9afrment prepared for use on connection with the sale o!the Bonds ens 6eem limited u ecologic for patP•!<s of computing in alderratoe minimum tax and rat Superfu.-ens rronmenul us--liability described therein m IN OUR CAPACITY as bond d the h,we have penicqud in fhe preparation of and have examined a MM.,of certified In which weg such motions.en have relied an rhave assumed of the City with respect to a cove solely wahine the knowledge enam of proceedings fcingmfheHondvand the hoods being refunded.yTerns-H6icewehaverclied in giving Toureas ogimian.wAgentcriptrorepot the Citysec.wehav11Ctindepe.c.yvnif..lasso ongronmenumgcompliant,whe Bhecos for emdheOrdivrce prposesg enfid copes of certain proceedings of the City,Finis City,Te.-Houency of epo son.Texas h the "Escrow gentf or,the repot o such anmxns of t.ns Cede admit affect the accurate ream grass iSaome of interest on the Boss for fed mime tax purposes the of KPMG Rat Mawek.Certified t Pudic Acnwcal accuracy verifying.f am comes of the depths rta&with tle E aw Agent for&acquired If such representations on are Bonds could to 6c mete Incomplete I or the City fads to comply nub the foregoing prmtsthe of the of the bonds pro being refunded theBo a.IT.ma(M1emehcal of imam mmpdnam en the yield ton the Bede a.nMi City.acquired Odieathe.lodes on Ibe Bonds(sad become incliuLMc in grins income from the Jae of unglml&livery.regardless of the doe on with the purls a of 0e Bonds:neaovry certificates re of eofficers.agents and representatives of the Escrow Agent,the Ciry,and mher which the evens stated a such we express occurs. public officials and ter discharge an showings elating to the ndsbei g re and issuance.Weh of(a Bads and the firm Making a.fR I and Except re sued above.we e.pess no opinion es to any feJrral.uur or local tax cnnscyucnces resulting drain the ownership of. arrangements tiss for the dns'lurge a.final payment of the bonds being refunded.We love also examined executed Bond Nos R T a. receipt of interest ism,o disposition or the a that. CR-a of 01 issue. Owners of the Buds abw1J be aware that e a d property of tax-exempt(1gamu may ew11 in collateral federal more tax onangs and to financial idutluriom.life insurance and Security or R air casualty ip vinpanax Sers who % with a.toha C BASED ON SUCH EXAMINATION.IT IS OUR OPINION that. mines and continued individual recipients of Berl rry tax-exempt or RatoW Retirement benefits a.taxpayers wed.may he decnnd to have purred of confined sect t.ne1.a to purcpo is corn nt exempt obligations.In amino,canon foreign cnryonfit x-doing bi nirest (I) The transcript of ttnifd proceedingsla od evidences complete legal authority for t he issuance d the Bands in full in the U.S.may be subject 6.ihe-branch polio Al"on their effectively conned.[aminga and profits lionising tax-exempt interest ntndmdlglltlbi Cwrmuomand laws the City] Sate of Texas presently effective and 146 therefore fee Bundy cowinf< such as loamy on the Bonds] veld and legally binding obligations of die Cory, (2) Form banking and financial arrangements have been made for the discharge and final payment of the bonds being refunded puraan to an&row Agreement entered into between the City a.the Escrow Agent on the due of delivery of the Bonds.and Wm MMerekwe such bands are deemed to he fully paal and no longer outstanding cxapt for the purpose VINSON a ELKINS of being paid Imo the funds pdovdd therefor in such Escrow Agreement.and I HEREBY CERTIFY that the a6nse and foregoing is a foe and mama copy of the legal opinion upon the tors thereon described which wu ethereally soiled by Vinson a Elkins,Houston.Texas.and was dated as tt the date of .every of and paymaw for and buds O Ciry Secretary Cory of Pearls.,Texas STATEMENT OF INSURANCE Financial Guaranty Insurance Canpny C'Financial Gmrandy"1 has ism.a policy omraining the lsykwing pros tom woe reopen to I5e Coy of PearIa..Texas Rebinding Bads.Series 19911 ahc'-B.SE'i.such pixy being on fit at the principal office of the Registrar,as paying agent 1Ne"hying Agenf'1 First Cm.Texas-Houston.N.A Fmrofcul Guaranty hereby unconditionally and Irrevocably agrees to pay Mr 0shursement to nhe Bmdaden that p.nan of the principal for d6c Acrrad Value in the case or now Appreciation B nds1 of and m on MM interest c Brads which is den due for payment and wi,t ehe "at issuer of 6te Bonds(the ler")shell have failed to provide.Due for plyoienf means,web 0spl to the pimtpal for the Accreted Value in the case of Capital Appreciation B.ndsa,the stated maturity date thereof.or the date an which the same shall Rise been duly called for mandatory sinking hind rdc11•dion.but not any earlier date an which the payment of principal for the Accreted Value to 1e case of Capital Appm:u ion Bond1 of the Bads o due by reason or acceteran..and with respect to interest,the mated date for payment of such interest. Upon receipt of telephonic or Megraphg nonce.subsequemly confirmed in wroing. written make by'canter.to teen did nail.from a Bondholder or the Paying Agent to Financial Guaranty that the required payment of principal for dig Accreted Value in t e case of Capital Appreciation Bonds/or interest his not Aeon made by the Issuer to the Paving Agent.Einanctal Guaranty on ice due date of such payment or within me bea1ress day after recede to notice of such nogaymem wluc.ver w hater will make a r I fus m an swot.wed Citibank. N.A. successor as 4 agent(We F 1 gees sufficient to nuke fhe gin- h pay pad Upon by the Issuer Un presentation to the Fiscal Agent of cycle satisfactory story to t col the Bondholder's nghd to rece1ve such Po rmo many mpp1op1am 1avrems of assignment required to vest all of such Bo.hdder s rigll to such payment in Financial Gvranty.Me Fiscal Agent will disburse such amount to the Bondholder. As used herein the term"B9d1older"means the person other than the Issuer who at the time of nonpayment of a Boil is mill.under the terms or wch Bad to payment thereof. • • The policy is rm.0am<llabhe for any reason. FINANCIAL GUARANTY INSURANCE COMPANY •CI ••••• ••• •s, 1 • • O. ASSIGNMENT • • • • •• • • • • • For miter remnant.the undersiered hereby sells.asstd.".and transfers moo _ •••• ••••• ••••• • • • •• ••• • I ••••• ••••• ••IL. I0/rase pram or pope mar.address,and Sy rode of Trauferee) • •• : • • ••••• • • -- -- -- - - _ - ----— linens,omen Social Sermon,'or Taxpayer f&mi1(ra n.Named.of Tra•feerri •••• • • the.thin Bard and all rights'hereunder.and here rs oreor'a6A commutes and unman a • ••• S.• • • I•••• •▪•• • • • • adorns,II transfer sod Bard on the/u{r tem for regosransen thereof air&fill pw r If minnow..in 0he premises. • •• •• •• • • • • D4TFD.• _.. •• • &Rmaurr Guaranteed. NOTICE.Sienalde mow be guaranteed IN a mender fra of the New York Stork ENAaed<or a nnmmrroaf bank or fr.n romping Registered Owner NOTICE The aanann abet.,owl rorrespmd to the name of the registered Emmet-as Ammon the frugal'Mis Bad as every particular. 4, • ° y - y� ' u O •• ' ITED 0 ERI r x� `.• S I .? V i ' y �: 4� r � �h Sm DES f�� GA ° �� ' z � . REGISTERED REGISTERED ' DENOMINATION .. - � �. �� NUMBER STATE OF TEXAS _.. - �,;:rr� C�itu of 1IEttrlttnb, OEXtto • 1'_ i, ►ilr. sa„ - �- ISEfunding +,�nnb — , r all, dINtH��7 c: ` SERIES 1990 • i s INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP: ,. ,!,- INTEREST RATE: October 1, 1990 •" %+r` �r a �,{ REGISTERED OWNER: v. -tea ,IA x IrJ°i.4 ;iitltl • r ; $r ▪ ,owe AMOUNT: D O L L A R S , •ce,, ;0;q s C The City of Pearland,Texas(the"City")promises to pay to the registered owner identified above,or registered date to which interest has been paid or duly provided for.Interest on this Bond is payable by check on March 1 and + q�� assigns,on the date specified above,upon presentation and surrender of this Bond at the principal corporate trust office September 1,beginning on March 1, 1991,mailed to the registered owner of record as of the close of business on , i- y ' 1 of First City,Texas—Houston,N.A.,Houston,Texas(the"Registrar"),the principal amount identified above,payable the 15th day of the calendar month next preceding each interest payment date(the"Record Date"). } in any coin or currency of the United States of America which on the date of payment is legal tender for the payment REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON v,,,4 i 4M* of debts due the United States of America,and to pay interest thereon at the rate shown above,calculated on the basis THE REVERSE HEREOF,WHICH PROVISIONS SHALL HAVE THE SAME FORCE AND EFFECT AS IF SET •, OH } of a 360 day year of twelve 30 day months,from the later of October I, 1990,or the most recent interest payment FORTH AT THIS PLACE. �+ ‘ r�r ttiy»�pM1 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 ;i, _ "r y - duly impressed,or placed in facsimile,on this Bond. { k f y` OM* 4a ;! I �'ti4 AUTHENTICATION CERTIFICATE . •• ;•• • ;• a •`I"d '+#y It is hereby certified that this Bond has been delivered pursuant to the Bond Ordinance described ••• ▪ •••• • i s rt`} i/!j a • . . • • ijr in the text of this Bond,in exchange for or in replacement of a Bond,Bonds or a portion of a Bond or ▪••••••• %• •' iiMi i Bonds of a Series which was originally approved by the Attorney General of the State of Texas and registered �,•f E 1l�N.,� •• ••••• •• •• .•• •• �Q Nip, ylv`Y !+�@ ` by the Comptroller of Public Accounts of the State of Texas, ,,.,`�t Q 0 '' • CITY OF PEARLAND,TESC�5�. • eMlr ,• I a�•••........ :,aft'. • ••• • • • �i • Date of Authentication First City, Texas—Houston,N.A. f' J�- s- •-• • •• •• ••� .Y`/!/ r7 •_ �7•� .. •• • k 0000 Ci Srecr • • • •• • • : Mayor ley++ °% Authorized Signature ,,,'''''au I,I.10°'`,,, •• • ••• ••• i • • . i•• • •• : .fi, - --- _ ,' • • • 1.. :.,-,. . , ,, . .,,,. N 1 .. w - .„a�.. _ '1 .�. -'Y ✓ y. ..yNy dry¢ >$. J'. , ...�.I :�'�, .:�1 1'' .'S�"". •.:��1•' ,.+i',,,...., .::. �".'f 'ti �"•::f „'„' ---;;ILO--..�., Y .y � _ ° W� �.` a � $ +" '� � — �r � f � , �. '� , ft I"i 'w al.-.:� �"/ � .. �.:,�� .. fw. �.� , �f• d�x�:, .:.� f�,.`� i�/:"fy � ...:4"�r fr� ,. � I,', THIS BOND ls one of a duly authorized issue of Bonds aggregating 57 364,391 80(the Bob. 1 issued for tk,pose of THE CURRENT INTEREST BONDS ARE EXCHANGEABLE a Incprumtpal corporate oustMike f the Registrar for Bonds refunding a pmim of the CitY s outstanding Refunding Bonds,Series 1985 and pursuant to an ordinance adopted by the City Council M the pr peel arn.nt of$5.000 or any integral muhWle thereof subyect to the terms and conditions of the Ordinance. on September 12.1990(the'Odinane I-The Bonds are issued as In Bonds in the aggregate principal amount of S999.391.80 which THIS BOND shall not be valid or obligatory for any Wnpose or be entitled to any benefit nde the Ordinance uncle.this Bond pay Interest only at maturiy or prig redemption(the"Capital Appreeldion Bonds 1 and fin Bond:in the aggregate principal anawnt is eitherIII registered b_-the C mptmlkn of Public Accounts of the Star of'Texas by registratron certificate attached or affixed hereto of S6.413.000 whrch pay Merest semiannually until maturity or prior redemption(the Current Inter,Bonds"). or 1'I authenticated by the Registrar by due execution of the authentication c nifcate endorsed hereon. THE CITY RESERVES THE RIGHT at its option to redeem Bonds prier to their scheduled *Me or from time THE REGISTERED OWNER dn.Bond by accepune hereof.ack IwltlpI and agrees to be bound by all the tee,and codawms to time in pan in integral multiples of$5.000.on September 1,2000 or any date thereafter at a price of. -n resmet to C !merest of the Ordinance. Bond.,par plus accrued interest to the date fixed for redemptton and. -heat to Capital Appreciatton Bonds.l03%of the Accreted THE CITY has covenanted in the Ordinance that it will at all times provide a legally q ffd registrar for the Bonds and will Value my the dale fixed for red.nptko.References made to the Ordinance for complete details concerning the manner of redeeming Bunts. cause mace of my ehange of registrar to be mailed to each registered ow ner NOTICE OF ANY REDEMPTION shall h pleat 1 U sty 1301 days prior to the date fixed for redempt by first class IT IS HEREBY ten fed,recited and covenanted that this Bad hn been duly and validly issued and deliver.,the all acts.cendnions mail,addnssad to th registered owners of each Bond to be redeemed in whole or In pan at Ihe address s hu m the books -registration and things required or proper to he perfor ed In crest and to be don precedent to or in the issuance and delivery of thts BIM have kept by Se Registrar.When Bonds or port cos thereof have been called for redemption and due provision has been made to nedcem been performed exist and have ben don in accordance with law and that annual ad valorem K he limits prescribed by the same,the amounts so redeemed shall be payable solely from the funds presided for redemption,and Interest which woad otherwise law.suffnenl te pros tde for the payment of the listened on and prim pal of this Bond as such interest comes d such h principal ace an the amunamountscalled for redemption shall terminate 9n the date fixed for redemption_ matures..have been levied and ordered m be levied against all taxable progeny in de C'ry and have been pledged irrevocably for such THIS BOND IS TRANSFERABLE only upon presenulk,n and surrender at the principal corporate trust office of the Registrar. payment. duly endorsed for transfer or accompanied by an assignment duly esecutd by the registered owner or his aulMrued replesenallee.sank to the terms and cadmium of the Ordinance. VINSON a ELKINS ATTORNEYS AT LAW 3300 FIRST CITY TOWER 1001 FANNIN HOUSTON,TEXAS 77002-6790 WE HAVE ACTED as bond counsel for dw City of Pearls.,Texas Ire"City"1....ear.whiten-issue of lames Ilk"Bonds"I Ill Taxable property in the City is subject tone levy of ad valorem lazes.within the limits prescrhd by law,to pay described as follows: the Bonds and th interest thereon. CITY OF PEARLAND.TEXAS.REFUNDING BONDS.SERIES 1990,dated October I.1990.In Jx pnmgal amount THE RIGHTS OF THE OWNERS of the Band are subject to the applicable provisions of the federil bankruptcy laws and any Id S7.161.391.80. aher similar law,aifenling the nights of crdimn of political...visions generally,and may be limbad by generally principles of equity whkh permit the exercise of judicial dlurerion The Bonds nature.bear merest.are subject m redemption prior to maturity and may be transferred and exchanged as n the Read and In he ordinance adopted by then Council of the City authorizing their issuance ilk IT IS OUR FURTHER OPINION that ':tree out I I t Inters,ran the Bonds is excludable from gross Income of the owners fir federal intnme tax purposes under esis0ag WE HAVE ACTED as bad counsel for BIe see purpose of rendering all opnionh respect to the legality M val.,of the law:and Bonds under the Corktution and la.of the State of Texas,nd with respect to de exclusion of' he Bond-from g for federal income tax purposes We ham na investigated or verkd ongtnal p end gs,record:dam he I but have t2t The Floods are not"pnvate activity binds"within the meaning of tIse Internal Revenue Code of 19861 he Code 1 relied solely upon the tranmrip f cenift.peed'g n d dbd in the following paragraph.We have not dammed any res,nsibility and interest he Bonds is not suhject to the alternative minimum tax on nd''duals and corporations underexisting with respect to the finance il condition or capabilities of the C y or the disclosure he f in connection with Ind.sale of dr Bond..Our law except that such interest will he included in a corporatepo I••adjusted net book income or'adjusted current role in connection with the CIty s Off ial Statement prepared for use In tonnn con with the sate of the Bonds has been limited as tlm pro mgx for poses of computing its alnmati a mnimum tax and iu Supnfund'envummental tax liability descrtbed therein. IN OUR CAPACITY as bond counsel.we have panleyaud in the preparation of and have 'red a transcript of tended A providing arch op- we have Id on representationsf the City with respect to matterssolely within the knowledge of proceedings pertaining to the Bads,and the bonds being refunded.on which we have relied in giving our Amnion The transcript contains the City wh h we have n.indepenkntly 'fed.and have assumed conunuim carnelmnce with i.covenants tri the Ordinance pertainik certified copies of certain proceedIngs tithe City.First City.Texas Houston,N.A Houslm Te (the F co Agent",he reke to those sections rd tk Code which affect the1 from 8 f interest on the Bond:for federal i purposes. of KPMG Peat M tit k Certified Public Accountants.verifying the sufficiency of the deposits made wIth the Escrow teemAeCIllfor kfeasance If such repre.scntdions are determined to be inaccun¢or incomplete or the City fails to comply with the foregoing prosier.01 the of the bonds be g refunded and the mathematiml acmracy of certain computationsf tk odd on he Bond:and obligations acquired Ordinance.interest on the Bonds could become I dabl gross 114,0111<from the date of origrnal delivery.regardlessf de dale on with the proceeds of de Bonds.customary centficates of officers.agentsad representattves of the Escrow Agent he Ctty.and otkr which the event mustng. h- 1 public ii Iand other certified she-rags relating to be authorization and issmnce f the Bonds and the firm banking and financial EXCtpl assuited akve.we expressopinion as y federal.kw local tax consequences resuhing film the ownership of. arrangements for the discharge and final payment of the dads being refunded.We have also examined executed Weal Nos R.I and deem.of Interest or disposition f the Bonds.aware CR.I of this issue. Owners ill the Bond'should heh te I ownership of mit-exempt obligations s result In collateral federal income ten osnsenuences finannal . i life and property nd casualty insurake companies.S cormrations with Subchapter C BASED ON SUCH EXAMINATION.IT IS OUR OPINION that mmings a.molits.individual rktpients of Social Security or Railroad Retirement benefits and taxpayers who may Ix demised to have carrell or A.m.Indebtedness a purchase or carry tax—exempt obl iga ons.In addition.certain foreign corporations doing business (I) The transcript of certified proceedings evderces complete legal authority for the issuance of the&ads in full In the U.S.may be sub%ct to the-branch profits tax'-on Iheu erfatively-ronrcsvd earnings and profits(includingaxcumpt imercd compliance with the Constit on end laws of the State of Texas pre only effective and that therefore de Bonds constitute in as interest on the Buds/. valid and legally binding ocligalions of the Cny, (2) Firm banking and kennel arrangements have been made for de discharge ad final paynrnt of the bonds being refunded peasant III an Escrow Agreement entered into between the City and the Eumw Agent on the date of delivery of the Bads.and that Iberelore such heads are deemed to be fully laid and no longer outstanding euept for the wrpete VINSON a ELKINS of being paid from the funds provided therefor in such Escrow Agreement:and I HEREBY CERTIFY that the above and foregoing is a true and correct copy of the legal Ipmilm upon the bonds therein Jewelled which was manually signed by Vinson&Elkins.Houston.Texas.and was dated as of the date of delivery of and payment for sent dwdn. ea,r o City Secretary City of PradaM.Texas STATEMENT OF INSURANCE Financial Guaranty Insurance Company I'Finannal Guaranty")hm insod a polity nrnaining the diIllowing provisions with aspen to the Cm of Pearland.Texas Refunding Bonds.Series 1490 Ilk•-Bonds"1,.suds policy being on file at the principal off of the Regiptar.as paying agent oh'Paying',FM")F -City.Texas—Houston Texas—Houston N_A. Financial Guaranty hereby ncond lly and erevccably agrees to pay for disbursement to the Bondholders that portion of the principal lor the Accreted Value in the case of Cap a I Apprenation gond:1 ol and interest on the Bond:which Is den due for myment and which the issuer of the Bonds(de Issuer 1 shall have faded to provide.Due for payment means,with respect to the principal for the Accreted Valk the case of Capital Appreciation Bo nd:1.the stated maturity date be I he date on which the mme shall have been duly called for mandatory sinking fund adempiun but net any earlier date on whkh the payment of principal(or the Accreted Value In the case of Caudal Appreciation Bendsl of the Bads is due by reason of acceleration.and atth res.,to tnterest,tk dated date for payment of such interest. Ceea receipt of telephonic or telegraphic mice.subsequently confirmed in mr ing or written neen to by registered a cent fed mail from a Bondholder or the Paying AgentFinancial Guaranty that he required paymentf principal for de Acerete Val the f Capital c Bonds de by Appr rest has not been ma the Issuer to the Paying Agent.F aarcial Guaranty on the due date of such payment or within the business day after receipt of mni a of such.npayment.whichever Is later. make a deposit of funds in an acc.nt soth Citibank. N.A..or s successor age.Idle'Fecal Agent'').sufficient to'Take the portion of such payment no you'd by he Issuer Upon presentation to the Fiscal Agent of evidence aafaetory to it of the Bondholder's right to receive such payment and any approprue in struments assignment s of i required to vest Alall of Bondholder's right to such payment in Financial Guaranty.the Fiscal Agent wall dishurse such amount to Ilse&ondhdller. As used herein the term"Btadholder"means the person other than the Issuer wed at the time of mnpayn0nt of a Bed is enald under the terms of'h Bond to payment theme The policy is non-cancellable for any reason FINANCIAL GUARANTY INSURANCE COMPANY ASSIGNMENT For saute reeeoed,the wdersigned hereby sells.assigns.and transfers win ••••%• • (Please print or type name.address.and:i➢rode ofTTransferee) • . ••• ••• ••• •• ••• • I• • ;•• • (Please insert Social Security or Dopey,Identification Number of Transferee) ••-•• • •••'•• • ••• •• •• •• ••• • ate within Band and all 0gh1s thereunder,and hereby irrevocably ronsriale1 and appoints • ••••• • • • ••• • •••• m 'neuter said Bond on the bads kept for registration thereof with fill power ofaabarindion in the premises. •••• • •• • • • • • •• � DATED: ••• •• ••••• •••• ••• ••••• •••• • Sgnalre Gaormureek • •• • •• • •••••* ••••••• • • ••i••• • ••• • • NOTICE-Signature must be guaranteed by a member farm of the Mat York Sloth&Mange or a rfwumreial bank or than company. Registered Owaa• • • NOTICE The signature above mastanmapond to the none of the registered owner shnem the of this Byrd in nxrypanmWar. without any alterman.enlargement nr change whatsoever •• CITY OF PEARLAND Refunding Analysis July 30, 1990 Section Outstanding Bonds (9/30/90) A $1,500,000 Series 1991 $5,000,000 Series 1995 Refunded Bonds (Series 1985) B Alternative 1 ($2,510,000 Maximum Debt Service) C 1990 Refunding Bonds (1991-2005) 1991 Public Improvement Bonds (1992-2006) 1995 Public Improvement Bonds (1995-2010) Alternative 2 ($2,430,000 Maximum Debt Service) D 1990 Refunding Bonds (1991-2006) 1991 Public Improvement Bonds (1992-2006) 1995 Public Improvement Bonds (1995-2010) CITY OF PEARLAND Outstanding Debt Millions (000) 3,000 2,750 2,500 2,250 y s 2,000 y 1,750 1,500 1,250 I 1,000 y y I I I I 750 500 y I FI 0 250 J J J J J J J J J J J J 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Years ■ Outstanding Debt A-1 CITY OF PEARLAND 10/01 DATES PRINCIPAL INTEREST TOTAL FY TOTAL 1991 1,380,000.00 1,301,947.50 2,681,947.50 2,681,947.50 1992 1,475,000.00 1,200,287.50 2,675,287.50 2,675,287.50 1993 1,570,000.00 1,088,960.00 2,658,960.00 2,658,960.00 1994 1,640,000.00 970,137.50 2,610,137.50 2,610,137.50 1995 1,765,000.00 842,700.00 2,607,700.00 2,607,700.00 1996 1,885,000.00 698,923.75 2,583,923.75 2,583,923.75 1997 2,055,000.00 545,645.00 2,600,645.00 2,600,645.00 1998 1,210,000.00 422,172.50 1,632,172.50 1,632,172.50 1999 1,200,000.00 332,172.50 1,532,172.50 1,532,172.50 2000 1,215,000.00 241,220.00 1,456,220.00 1,456,220.00 2001 1,210,000.00 148,996.25 1,358,996.25 1,358,996.25 2002 750,000.00 76,687.50 826,687...0 826,687.50 2003 750,000.00 25,312.50 775,312.50 775,312.50 Totals 18,105,000.00 7,895,162.50 26,000,162.50 26,000,162.50 Average Life = 6.096 yrs 0LD64 215,000.00 WW/SS IMPROV BONDS SER 1964 0LD66 245,000.00 WW/SS IMPROV BONDS SER 1966 OLD68 230,000.00 G.O. BONDS SER. 1968 0LD75 190,000.00 G.O. BONDS SER 1975 0LD78 1,275,000.00 PERM 1MPROV BONDS SER 1978 0LD85 9,350,000.00 REFUNDING BONDS SER. 85 0LD86 4,250,000.00 PUB IMPROV BONDS SER 1986 0LD88 1,900,000.00 PUB IMPROV BONDS SER 1988 OLD81 300,000.00 WW SYS C.O. SER 1981 OLD88A 150,000.00 COMB TAX AND REV C.O. SER 1988 Total 18,105,000.00 PEAR 07/24/90 AGG89 11:49:50 A-2 CITY OF PEARLAND Total Future Debt Service Millions C000) 3,500 3,250 3,000 2,750 — ! ' :: ::: ws 2,500 2,250 2,000 y 1,750 A li 1,500 �� 1,250 y %� r� 750 l 1,000 1j ' j _ 500 y � 250 y 1 I %I I I I I I l o J J J J J J J J J J J d J J 'J J J - J $J J 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Years • Outstanding Debt D Series 91 • Series 95 A-3 CITY OF PEARLAND PUBLIC IMPROVMENT BONDS SER 91 INTEREST INTEREST PRESENT PRINCIPAL a 7.250% a 7.250% TOTAL TOTAL NEW TOTAL DEBT YEAR ENDING DEBT DUE DUE DUE NEW PRINCIPAL SERVICE TAX RATE TAX RATE 09/30 REQUIREMENT 03/01 03/01 09/01 INTEREST & INTEREST REQUIREMENT NEW TOTAL 1991 2,681,948 2,681,948 0.00000 0.48035 1992 2,675,288 126,875 54,375 181,250 181,250 2,856,538 0.03246 0.51162 1993 2,658,960 65,000 54,375 52,019 106,394 171,394 2,830,354 0.03070 0.50693 1994 2,610,138 70,000 52,019 49,481 101,500 171,500 2,781,638 0.03072 0.49821 1995 2,607,700 75,000 49,481 46,763 96,244 171,244 2,778,944 0.03067 0.49772 1996 2,583,924 80,000 46,763 43,863 90,625 170,625 2,754,549 0.03056 0.49335 1997 2,600,645 85,000 43,863 40,781 84,644 169,644 2,770,289 0.03038 0.49617 1998 1,632,173 90,000 40,781 37,519 78,300 168,300 1,800,473 0.03014 0.32247 1999 1,532,173 100,000 37,519 33,894 71,413 171,413 1,703,585 0.03070 0.30512 2000 1,456,220 105,000 33,894 30,088 63,981 168,981 1,625,201 0.03027 0.29108 2001 1,358,996 115,000 30,088 25,919 56,006 171,006 1,530,003 0.03063 0.27403 2002 826,688 125,000 25,919 21,388 47,306 172,306 998,994 0.03086 0.17892 2003 775,313 130,000 21,388 16,675 38,063 168,063 943,375 0.03010 0.16896 2004 140,000 16,675 11,600 28,275 168,275 168,275 0.03014 0.03014 2005 155,000 11,600 5,981 17,581 172,581 172,581 0.03091 0.03091 2006 165,000 5,981 5,981 170,981 170,981 0.03062 0.03062 S26,000,166 S1,500,000 $597,221 S470,346 S1,067,563 S2,567,563 $28,567,728 DATED: 1/01/91 DUE: 3/01/92 - 3/01/06 FIRST COUPON: 3/01/92 Assessed Valuation = 575,600,000 Tax Collection Rate = 97.000% Assessed Valuation Growth = 0.000% Prepared by: Rauscher Pierce Refsnes, Inc. 07/30/90 NEW91 AGG89 A- 4 CITY OF PEARLAND PUBLIC IMPROVMENT BONDS SER 95 INTEREST INTEREST PRESENT PRINCIPAL a 7.250% @7.250% TOTAL TOTAL NEW TOTAL DEBT YEAR ENDING DEBT DUE DUE DUE NEW PRINCIPAL SERVICE TAX RATE TAX RATE 09/30 REQUIREMENT 03/01 03/01 09/01 INTEREST & INTEREST REQUIREMENT NEW TOTAL 1991 2,681,948 2,681,948 0.00000 0.48035 1992 2,856,538 2,856,538 0.00000 0.51162 1993 2,830,354 2,830,354 0.00000 0.50693 1994 2,781,638 2,781,638 0.00000 0.49821 1995 2,778,944 170,000 181,250 175,088 356,338 526,338 3,305,281 0.09427 0.59199 1996 2,754,549 185,000 175,088 168,381 343,469 528,469 3,283,018 0.09465 0.58800 1997 2,770,289 200,000 168,381 161,131 329,513 529,513 3,299,801 0.09484 0.59101 1998 1,800,473 215,000 161,131 153,338 314,469 529,469 2,329,941 0.09483 0.41730 1999 1,703,585 230,000 153,338 145,000 298,338 528,338 2,231,923 0.09463 0.39975 2000 1,625,201 245,000 145,000 136,119 281,119 526,119 2,151,320 0.09423 0.38531 2001 1,530,003 265,000 136,119 126,513 262,631 527,631 2,057,634 0.09450 0.36853 2002 998,994 285,000 126,513 116,181 242,694 527,694 1,526,688 0.09451 0.27344 2003 943,375 305,000 116,181 105,125 221,306 526,306 1,469,681 0.09426 0.26323 2004 168,275 330,000 105,125 93,163 198,288 528,288 696,563 0.09462 0.12476 2005 172,581 355,000 93,163 80,294 173,456 528,456 701,038 0.09465 0.12556 2006 170,981 380,000 80,294 66,519 146,813 526,813 697,794 0.09435 0.12498 2007 410,000 66,519 51,656 118,175 528,175 528,175 0.09460 0.09460 2008 440,000 51,656 35,706 87,363 527,363 527,363 0.09445 0.09445 2009 475,000 35,706 18,488 54,194 529,194 529,194 0.09478 0.09478 2010 510,000 18,488 18,488 528,488 528,488 0.09465 0.09465 $28,567,728 $5,000,000 $1,813,952 $1,632,702 $3,446,654 $8,446,654 $37,014,380 DATED: 9/01/94 DUE: 3/01/95 - 3/01/10 FIRST COUPON: 3/01/95 Assessed Valuation = 575,600,000 Tax Collection Rate = 97.000% Assessed Valuation Growth = 0.000% Prepared by: Rauscher Pierce Refsnes, Inc. 07/30/90 NEW95 AGG99A A- 5 CITY OF PEARLAND Refunded Bonds Millions (000) 3,000 2,750 2,500 2 25 -0 :ii : f 0 ::?O. ivi:ii •v$:: is :�:l'fi: v:C1 ;Y.f 17 50 ...r :2: tie .f. v:Y.w:. n `i�i a: '•f? .'-i\. i-v.Nv. 1 50 .��0 r}t.:4. v-0 f v 4:• - ) ..r{: 1 250 : ':: IY I.. / {�{•iris-. .�'�ti::i / / Jiji:/ {i 750 yII it I it I 500 / / sII ylI fJJ i J P JJ J 91 92 93 94 95 96 97J 98J 99 00J 01 02 03 04 05 06 07 08 09 10 Years • Non Refunded Bonds : Refunded Bonds CITY OF PEARLAND REFUNDING BONDS SER. 85 ISSUE DATE: 9/01/90 DELIVERY DATE: 9/01/90 MATURING STATED TOTAL TOTAL DATES AMOUNT COUPON YIELD INTEREST to MATY to CALL FY TOTAL 9/01/90 3/01/91 770,000 7.250 7.250000 379,085.00 1,149,085.00 1,149,085.00 9/01/91 351,172.50 351,172.50 351,172.50 1,500,257.50 3/01/92 830,000 7.500 7.500000 351,172.50 1,181,172.50 1,181,172.50 9/01/92 320,047.50 320,047.50 320,047.50 1,501,220.00 3/01/93 915,000 7.750 7.750000 320,047.50 1,235,047.50 1,235,047.50 9/01/93 284,591.25 284,591.25 284,591.25 1,519,638.75 3/01/94 1,095,000 8.000 8.000000 284,591.25 1,379,591.25 1,379,591.25 9/01/94 240,791.25 240,791.25 240,791.25 1,620,382.50 3/01/95 1,190,000 8.100 8.100000 240,791.25 1,430,791.25 5,980,791.25 9/01/95 192,596.25 192,596.25 1,623,387.50 3/01/96 1,285,000* 8.250 8.250000 192,596.25 1,477,596.25 9/01/96 139,590.00 139,590. 10 1,617,186.25 3/01/97 1,280,000* 8.400 8.400000 139,590.00 1,419,590.00 9/01/97 85,830.00 85,830.00 1,505,420.00 3/01/98 510,000* 8.500 8.500000 85,830.00 595,830.00 9/01/98 64,155.00 64,155.00 659,985.00 3/01/99 500,000* 8.600 8.600000 64,155.00 564,1c5.00 9/01/99 42,655.00 42,6)5.00 606,810.00 3/01/00 490,000* 8.700 8.700000 42,655.00 532,655.00 9/01/00 21,340.00 21,340.00 553,995.00 3/01/01 485,000* 8.800 8.800000 21,340.00 506,340.00 506,340.00 9,350,000 3,864,622.50 13,214,622.50 12,122,290.00 13,214,622.50 Acc Int 0.00 0.00 0.00 3,864,622.50 13,214,622.50 13,214,622.50 * - These bonds may be called on 3/01/95 a 100.000 NIC = 8.344214% PEAR 07/24/90 0LD85 15:29:12 li-2 CITY OF PEARLAND Refunding Analysis Alternative 1 Millions (000) 3,000 2,750 2,500 :: 2,250 - 2,000 ::} i;: 1,750 :i: :vC+r: +r i'�i, 1,500MM 1,25° }v}' i - :v / :::::. 1,000 • r • 750 .: 500 250 J J J J J J J J J J J J 0 J = h: 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Years ■ Non Refunded Bonds LI Refunding Bonds (:- l I i 1 1 1 1 i I 1 I 1 1 1 I I 1 I i i CITY OF PEARLAND LESS: DEBT PLUS. REFUNDING BONDS SER. 90 TOTAL YEAR SERVICE ON NEW ENDING CURRENT TOTAL REFUNDED CURRENT INTEREST BONDS COMPOUND DEBT TAX RATE TAX RATE 09/30 DEBT SERVICE BONDS PRINCIPAL INTEREST INT BONDS SERVICE NEW TOTAL 1991 2,681,948 1,500,258 765,000 565,100 2,511,790 0.23823 0.44987 1992 2,675,288 1,501,220 630,000 522,935 2,327,003 0.20650 0.41678 1993 2,658,960 1,519,639 720,000 481,400 2,340,721 0.21518 0.41923 1994 2,610,138 1,620,383 920,000 430,100 2,339,855 0.24181 0.41908 1995 2,607,700 1,623,388 440,000 387,040 1,811,352 0.14813 0.32442 1996 2,583,924 1,617,186 485,000 357,198 1,808,936 0.15084 0.32399 1997 2,600,645 1,505,420 385,000 328,730 1,808,955 0.12783 0.32399 1998 1,632,173 659,985 540,000 297,935 1,810,123 0.15008 0.32420 1999 1,532,173 606,810 625,000 258,595 1,808,958 0.15826 0.32399 2000 1,456,220 553,995 700,000 213,195 1,815,420 0.16356 0.32515 2001 1,358,996 506,340 795,000 161,220 1,808,876 0.17126 0.32398 2002 826,688 880,000 102,375 1,809,063 0.17595 0.32401 2003 775,313 1,005,000 35,678 1,815,991 0.18639 0.32525 2004 1,815,000 1,815,000 0.32508 0.32508 2005 1,225,000 1,225,000 0.21940 0.21940 26,000,166 13,214,624 8,890,000 4,141,501 3,040,000 28,857,043 Prepared by: Rauscher Pierce Refsnes, Inc. 07/30/90 11:40:12 AGG89 0LD85 NEW90B C-2 CITY OF PEARLAND Refunding Analysis Alternative 1 Millions (000) 3,000 2,750 2,500 :: : : :;! 2,250 le ign let [.,::1 ,•::.:„::: .4:::i 4:......-..,• •,.. x:::: r...i.::: : 2,000 :r4 w: zsg,...' r3...?", i':-::-s-- 5i.;:-.-:': --, :- -..--5 . :i:':::i:: :::: :..i:: .• :::: ii, ..• . I..:::::'....'.4 ....'.....]..:::::.: ::'....':::::]4 .......':::::'..g ::'::-.':::::. 1,750 111 :::S4 Pat i 198 iiME FON inn skai min EN gin lin migiii Rai Aaiii 01 at Egs 1500 stigiiii iiff . fel. -.E. gglit gigs igo lati mis idg tits. ma Nur mig so Iwo :1,),.....:;: n ••:•::":"E•:•":1:1:"""i" .-i1-10:.-*_:: Eit..0.„1.}, t. i;iiiii::i M::::::E; ::::-::::;',.iMi. E:::M :" ::':ii:::::igii :a::?':?.gi ::].:A6 iEE :.] i:M]::::: :'::::•;i: 1 25v Ai::::::::::::', ::'::,:::::::::: :..:::::m::::: •::.-Ey: :::::::.0::::: ' -.-• ----:, 1:31M Egl ME :::.:-.]::n: x I ilg: ii]ii::: ::i: I:EE;i---;:• 1 ,000 -----.-- ........- ---.---- .......... .......... ........... :-:-:-:-:-.....--.-: ...x.:-...:- .tx .......,:..,..... .,:.:::::.:.:4: .• ....,:: ::::::::f.:::::::: .?x,::,:::. *::::::::::::::: • ,.:K. ;K:f::.K:-.i a:::sf 0 i 750 I ::: E:: 500 I 250 JI I .....,.... ....,... .---- --ye- - I ..„„„„„„ ,...r—Ipuompli I tl J J J J II d d J J J Ja::,,, ma :::::::::: . ......... .. ... . . ... 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Years • Non Refunded Bonds Ej Refunding Bonds 111 Series 91 k r ! i CITY OF PEARLAND PUBLIC IMPROVMENT BONDS SER 91 INTEREST INTEREST PRESENT PRINCIPAL a 7.250% a 7.250% TOTAL TOTAL NEW TOTAL DEBT YEAR ENDING DEBT DUE DUE DUE NEW PRINCIPAL SERVICE TAX RATE TAX RATE 09/30 REQUIREMENT 03/01 03/01 09/01 INTEREST & INTEREST REQUIREMENT NEW TOTAL 1991 2,511,790 2,511,790 0.00000 0.44987 1992 2,327,003 126,875 54,375 181,250 181,250 2,508,253 0.03246 0.44924 1993 2,340,721 65,000 54,375 52,019 106,394 171,394 2,512,115 0.03070 0.44993 1994 2,339,855 70,000 52,019 49,481 101,500 171,500 2,511,355 0.03072 0.44980 1995 1,811,353 75,000 49,481 46,763 96,244 171,244 1,982,596 0.03067 0.35509 1996 1,808,935 80,000 46,763 43,863 90,625 170,625 1,979,560 0.03056 0.35455 1997 1,808,955 85,000 43,863 40,781 84,644 169,644 1,978,599 0.03038 0.35438 1998 1,810,123 90,000 40,781 37,519 78,300 168,300 1,978,423 0.03014 0.35435 1999 1,808,958 100,000 37,519 33,894 71,413 171,413 1,980,370 0.03070 0.35469 2000 1,815,420 105,000 33,894 30,088 63,981 168,981 1,984,401 0.03027 0.35542 2001 1,808,876 115,000 30,088 25,919 56,006 171,006 1,979,883 0.03063 0.35461 2002 1,809,063 125,000 25,919 21,388 47,306 172,306 1,981,369 0.03086 0.35487 2003 1,815,990 130,000 21,388 16,675 38,063 168,063 1,984,053 0.03010 0.35535 2004 1,815,000 140,000 16,675 11,600 28,275 168,275 1,983,275 0.03014 0.35521 2005 1,225,000 155,000 11,600 5,981 17,581 172,581 1,397,581 0.03091 0.25031 2006 165,000 5,981 5,981 170,981 170,981 0.03062 0.03062 $28,857,042 $1,500,000 $597,221 $470,346 $1,067,563 $2,567,563 $31,424,604 DATED: 1/01/91 DUE: 3/01/92 - 3/01/06 FIRST COUPON: 3/01/92 Assessed Valuation = 575,600,000 Tax Collection Rate = 97.000% Assessed Valuation Growth = 0.000% Prepared by: Rauscher Pierce Refsnes, Inc. 07/30/90 NEW91 AGG99A C-4 I I I i I . I I 1 I I i I CITY OF PEARLAND :...,,,,::::::::,:::: i:::.:::::::..,..::: :,....:,..:,:,::: : .::::.:::: 1 :.: :: :::::.:::::::':::::::::.::::: Refunding Analysis Alternative 1 Millions (000) 3,000 2,750 ....._ ............. I- :: - „ .:•:. .....:.:.::•: ::: 1...:::::.•:::,:::.•:•:: :::::.:::::::::,::. 2,500 K :.:Hi :::: ::. .: , : -.:.:„:,:•.::-.. .:.......:::..:::..:,:.:, ::::::...::„.:,.:,:: .•:-:,,:.::..:,:::.:.: ::,:::..::„,:„: ,.,•:.:..•.::..:.::..::... „„::„::,::: :.:::..•..::•::::..::„: :::..:::..:..::..:...•..:... ..:,:..:..:......:.....:..:,:.:..:•.: 2,250 1:11 : plifi 1•41111 Oh :.:..:.. 2,000 ME :: EM log III :'...:.:.: 4..-i-, :-.-: .: :-.:.:. 1::.:: i?:. ::.::: i:, .:::: 1 ::.::-: ::::: :i .. ]:] - ......„.... .....,.....• , :: „ :::. ,: :: : • :".....,..: :: 1,750 :i:E: :: ,*:: if.,;:i::::K:FE: !ATI I 350.11:3- :S•ii."2"::E KEK:K:K:; I ..:;•§*-4.'`iiK- I ":•;i:" ""V •iiiiiiiSEKE:i::: f*:e6:':•t" 0•::: - ::::.:::::..::'::: I ..,,i, 4,...::.::: ....m I* :14 ?4::44444E I E:ME::KV : :EE:4::: i:444M4 *.?:4M,. 440,1 4444,.$;:k4 ::4-0: .",44i." K:...§:..i'i.: ::.4,--1:4i 4...::§..,:1";Ii* 14 1,500 *.1:,:.*:::. :: amo fro.i: us atiga you ggai: vs IN:v -::-.-.-.1:: :.!i• Igt:..& :ii:Ewii- N.is, • .......:....::::.:.:.::::.::•:: :::1.1:::, ,ipiiiiiii :.: w,I.::: iiEii:?K:::: ::::::::iii.:E.::E: :5,F4:0t-E: oc. ..; : .:ISI :'1E:::::,%.? K::A":'-E•t::.:: :ii-5."a zEE:" .Iiiii ;:l:alii In : :: ? k VW iiiiiiii::':::i. :::3142 i':::"E. .."'W''':. iEEEEERg i#,V. :4W.• M.44 'ft: „:•:-.U.::::: :k..4..:?::4 - :::: 1125° '"":'::::"r./ """::'::**ri . POI lit. ilfe w:c !!!!!!!!! irAit .I.':'ff5i 911if I2 / ::::Eae, ........,,.. AA:Kt:- 1,000 i I ::,:::::::::::::„;::::::i•-;5::55:.: :::.::::55: :::M : ...Z:: ..:4444::1: 44;;.%:4:::: : :4:::::•:•::. I / ' *::::: '/I.M:::::!::::, ;R:Mii ta : 14A:El: "- *4E:::4-::::: 750 :"w "K'''''. .' , --- ___ 500 I I I I :•-•flEd --....f,,.:pj •:.•::..:.;:.•::::,:,: ... . ,,.... .... . . •• . I I I I -.04: • :‘,...0:-: :.::::::::::::::::::::::::::•::: ::.::.:::::.::::::::::.:::::: ::::•::::::•:::::.::::::::::::::, :::::::::::::::::::•:::::::: :::::.:y.::::::::::•::::::•:. / -,,,- •:0,-%,- 1:.:.....:,•:.•:,•::,:. 1::.:•::::.:,::-... 1,..,:,:,,,,, I.,,,,,,, I,,,,,,, 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Years • Non Refunded Bonds Ei Refunding Bonds III Series 91 0 Series 95 C-5 i t 1 1 CITY OF PEARLAND PUBLIC 1MPROVMENT BONDS SER 95 INTEREST INTEREST PRESENT PRINCIPAL a 7.250% a 7.250% TOTAL TOTAL NEW TOTAL DEBT YEAR ENDING DEBT DUE DUE DUE NEW PRINCIPAL SERVICE TAX RATE TAX RATE 09/30 REQUIREMENT 03/01 03/01 09/01 INTEREST & INTEREST REQUIREMENT NEW TOTAL 1991 2,511,790 2,511,790 0.00000 0.44987 1992 2,508,253 2,508,253 0.00000 0.44924 1993 2,512,115 2,512,115 0.00000 0.44993 1994 2,511,355 2,511,355 0.00000 0.44980 1995 1,982,596 170,000 181,250 175,088 356,338 526,338 2,508,934 0.09427 0.44936 1996 1,979,560 185,000 175,088 168,381 343,469 528,469 2,508,029 0.09465 0.44920 1997 1,978,599 200,000 168,381 161,131 329,513 529,513 2,508,111 0.09484 0.44921 1998 1,978,423 215,000 161,131 153,338 314,469 529,469 2,507,891 0.09483 0.44918 1999 1,980,370 230,000 153,338 145,000 298,338 528,338 2,508,708 0.09463 0.44932 2000 1,984,401 245,000 145,000 136,119 281,119 526,119 2,510,520 0.09423 0.44965 2001 1,979,883 265,000 136,119 126,513 262,631 527,631 2,507,514 0.09450 0.44911 2002 1,981,369 285,000 126,513 116,181 242,694 527,694 2,509,063 0.09451 0.44939 2003 1,984,053 305,000 116,181 105,125 221,306 526,306 2,510,359 0.09426 0.44962 2004 1,983,275 330,000 105,125 93,163 198,288 528,288 2,511,563 0.09462 0.44983 2005 1,397,581 355,000 93,163 80,294 173,456 528,456 1,926,038 0.09465 0.34496 2006 170,981 380,000 80,294 66,519 146,813 526,813 697,794 0.09435 0.12498 2007 410,000 66,519 51,656 118,175 528,175 528,175 0.09460 0.09460 2008 440,000 51,656 35,706 87,363 527,363 527,363 0.09445 0.09445 2009 475,000 35,706 18,488 54,194 529,194 529,194 0.09478 0.09478 2010 510,000 18,488 18,488 528,488 528,488 0.09465 0.09465 $31,424,604 $5,000,000 $1,813,952 $1,632,702 $3,446,654 $8,446,654 $39,871,257 DATED: 9/01/94 DUE: 3/01/95 - 3/01/10 FIRST COUPON: 3/01/95 Assessed Valuation = 575,600,000 Tax Collection Rate = 97.000% Assessed Valuation Growth = 0.000% Prepared by: Rauscher Pierce Refsnes, Inc. 07/30/90 NEW95 AGG99A C-6 CITY OF PEARLAND Refunding Analysis Alternative 2 Millions (000) 3,000 2,750 2,500 , 2,250 la 2,000 al al! Riff tRi �-i:+-iiii>: - -v;{.t �-ice:+•��?: .n4 1 50 4'• i - ag .4• ..tr•.r. I•n 1,250 - r rt. r r r - r r r r r r y r - 1,000 r r r r r r r r r Y r r r r .rY.... r r r r r r r r r r r r r r r r r r r ..,.r r y r r r r r r r I r r r I i �I i i i it / i r $, _ :r#> " fi 500 rite Leo o J J J J J J J J J 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Years • Non Refunded Bonds D Refunding Bonds D-1 1 1 1 1 1 1 1 I 1 I 1 1 1 I I 1 1 1 1 CITY OF PEARLAND LESS: DEBT PLUS. REFUNDING BONDS SER. 90 TOTAL YEAR SERVICE ON NEW ENDING CURRENT TOTAL REFUNDED CURRENT INTEREST BONDS COMPOUND DEBT TAX RATE TAX RATE 09/30 DEBT SERVICE BONDS PRINCIPAL INTEREST INT BONDS SERVICE NEW TOTAL 1991 2,681,948 1,500,258 725,000 519,260 2,425,950 0.22285 0.43450 1992 2,675,288 1,501,220 595,000 479,363 2,248,431 0.19242 0.40270 1993 2,658,960 1,519,639 675,000 440,290 2,254,611 0.19975 0.40381 1994 2,610,138 1,620,383 875,000 391,803 2,256,558 0.22689 0.40416 1995 2,607,700 1,623,388 395,000 351,600 1,730,912 0.13372 0.31002 1996 2,583,924 1,617,186 440,000 324,660 1,731,398 0.13695 0.31010 1997 2,600,645 1,505,420 335,000 299,305 1,729,530 0.11361 0.30977 1998 1,632,173 659,985 485,000 272,003 1,729,191 0.13558 0.30971 1999 1,532,173 606,810 570,000 236,375 1,731,738 0.14443 0.31016 2000 1,456,220 553,995 630,000 195,260 1,727,485 0.14781 0.30940 2001 1,358,996 506,340 730,000 147,975 1,730,631 0.15725 0.30996 2002 826,688 810,000 93,873 1,730,561 0.16189 0.30995 2003 775,313 920,000 32,660 1,727,973 0.17063 0.30949 2004 1,730,000 1,730,000 0.30985 0.30985 2005 1,730,000 1,730,000 0.30985 0.30985 2006 1,675,000 1,675,000 0.30000 0.30000 26,000,166 13,214,624 8,185,000 3,784,427 5,135,000 29,889,969 Prepared by: Rauscher Pierce Refsnes, Inc. 07/30/90 13:48:39 AGG89 0LD85 NEW90B D-2 CITY OF PEARLAND Refunding Analysis Alternative 2 Millions (000) 3,000 2,750 2,500 2,250 1,750 ill II II II r::.. .. ....01..... 17.7ors.'. .J ,.:.-.•..11177:71.1T:7..::.....:!..:or.!..7. 1.if:....Hif ,f, rniumili. 1,500 Illi la El lig 111 FOE inVil Iiiiii in El 1111 Fa 11,1 lit, . cm= ,:ama; mga :igim ma IRE !!!!!!!! I]-Mi!i!i!.i O.0!i!i E.Eiiglii:ii!i EN: MR gag I Fer Ing Migi I 1,250 MEE, iiiiI]Til';', 111, IN RE 1 i= = E-E,-'-'::,, = I fie'-'!'-' ',,,E,,":", 1,* •........ -....,--- -_-_-_-_-_-_-_- --- — — --------- — ---- ---- illi, /Iii 1 iiiiii I III ill fill 1,000 /I ' I ' ::-:::::-::::::::::/ ''"'"'"""'' milk 1111,11iiiii Ili iiii 750 500 I I 11111 111 111 250 I I I I III II III . 0 Jjj diii . id a d a 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Years • Non Refunded Bonds El Refunding Bonds Mi Series 91 D_3 , CITY OF PEARLAND PUBLIC IMPROVMENT BONDS SER 91 INTEREST INTEREST PRESENT PRINCIPAL a1 7.250% a1 7.250% TOTAL TOTAL NEW TOTAL DEBT YEAR ENDING DEBT DUE DUE DUE NEW PRINCIPAL SERVICE TAX RATE TAX RATE 09/30 REQUIREMENT 03/01 03/01 09/01 INTEREST & INTEREST REQUIREMENT NEW TOTAL 1991 2,425,950 2,425,950 0.00000 0.43450 1992 2,248,430 126,875 54,375 181,250 181,250 2,429,680 0.03246 0.43517 1993 2,254,611 65,000 54,375 52,019 106,394 171,394 2,426,005 0.03070 0.43451 1994 2,256,558 70,000 52,019 49,481 101,500 171,500 2,428,058 0.03072 0.43488 1995 1,730,913 75,000 49,481 46,763 96,244 171,244 1,902,156 0.03067 0.34069 1996 1,731,398 80,000 46,763 43,863 90,625 170,625 1,902,023 0.03056 0.34066 1997 1,729,530 85,000 43,863 40,781 84,644 169,644 1,899,174 0.03038 0.34015 1998 1,729,190 90,000 40,781 37,519 78,300 168,300 1,897,490 0.03014 0.33985 1999 1,731,738 100,000 37,519 33,894 71,413 171,413 1,903,150 0.03070 0.34086 2000 1,727,485 105,000 33,894 30,088 63,981 168,981 1,896,466 0.03027 0.33967 2001 1,730,631 115,000 30,088 25,919 56,006 171,006 1,901,638 0.03063 0.34059 2002 1,730,560 125,000 25,919 21,388 47,306 172,306 1,902,866 0.03086 0.34081 2003 1,727,973 130,000 21,388 16,675 38,063 168,063 1,896,035 0.03010 0.33959 2004 1,730,000 140,000 16,675 11,600 28,275 168,275 1,898,275 0.03014 0.33999 2005 1,730,000 155,000 11,600 5,981 17,581 172,581 1,902,581 0.03091 0.34076 2006 1,675,000 165,000 5,981 5,981 170,981 1,845,981 0.03062 0.33062 $29,889,967 $1,500,000 $597,221 $470,346 $1,067,563 $2,567,563 $32,457,528 DATED: 1/01/91 DUE: 3/01/92 - 3/01/06 FIRST COUPON: 3/01/92 Assessed Valuation = 575,600,000 Tax Collection Rate = 97.000% Assessed Valuation Growth = 0.000% Prepared by: Rauscher Pierce Refsnes, Inc. 07/30/90 NEW91 AGG99A 1)-4 CITY OF PEARLAND Refunding Analysis Alternative 2 Millions (000) 3,000 2,750 2,500 2,250 —71-7-r---rimmilliiiiii- II- II- l''''' '';'::'''..: '"-;''''. g'„ k •.:.11. :•:— ''''' '. . . - 2,000 1111 yr:r{. l w.v }:. sv 1 500 ,. .<� KtSi4il?ice ?{-.f n di:.. rliatii: }:++Yr. :y } .r 1,750 ilil 1011 it .;4i-t;-- i!:i-i::A-.niiiii-g::i:.. .r. ::v.vY-: / / � I , I I I I:::: Ir / 750 i i i i i i i i »� :: / / / / ?�' 500 /JII/ ii / EiJ J J J _. J fii1IriJ 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Years • Non Refunded Bonds rim Refunding Bonds ® Series 91 El Series 95 D-5 CITY OF PEARLAND PUBLIC IMPROVMENT BONDS SER 95 INTEREST INTEREST PRESENT PRINCIPAL @7.250% a 7.250% TOTAL TOTAL NEW TOTAL DEBT YEAR ENDING DEBT DUE DUE DUE NEW PRINCIPAL SERVICE TAX RATE TAX RATE 09/30 REQUIREMENT 03/01 03/01 09/01 INTEREST & INTEREST REQUIREMENT NEW TOTAL 1991 2,425,950 2,425,950 0.00000 0.43450 1992 2,429,680 2,429,680 0.00000 0.43517 1993 2,426,005 2,426,005 0.00000 0.43451 1994 2,428,058 2,428,058 0.00000 0.43488 1995 1,902,156 170,000 181,250 175,088 356,338 526,338 2,428,494 0.09427 0.43496 1996 1,902,023 185,000 175,088 168,381 343,469 528,469 2,430,491 0.09465 0.43531 1997 1,899,174 200,000 168,381 161,131 329,513 529,513 2,428,686 0.09484 0.43499 1998 1,897,490 215,000 161,131 153,338 314,469 529,469 2,426,959 0.09483 0.43468 1999 1,903,150 230,000 153,338 145,000 298,338 528,338 2,431,488 0.09463 0.43549 2000 1,896,466 245,000 145,000 136,119 281,119 526,119 2,422,585 0.09423 0.43390 2001 1,901,638 265,000 136,119 126,513 262,631 527,631 2,429,269 0.09450 0.43509 2002 1,902,866 285,000 126,513 116,181 242,694 527,694 2,430,560 0.09451 0.43533 2003 1,896,035 305,000 116,181 105,125 221,306 526,306 2,422,341 0.09426 0.43385 2004 1,898,275 330,000 105,125 93,163 198,288 528,288 2,426,563 0.09462 0.43461 2005 1,902,581 355,000 93,163 80,294 173,456 528,456 2,431,038 0.09465 0.43541 2006 1,845,981 380,000 80,294 66,519 146,813 526,813 2,372,794 0.09435 0.42498 2007 410,000 66,519 51,656 118,175 528,175 528,175 0.09460 0.09460 2008 440,000 51,656 35,706 87,363 527,363 527,363 0.09445 0.09445 2009 475,000 35,706 18,488 54,194 529,194 529,194 0.09478 0.09478 2010 510,000 18,488 18,488 528,488 528,488 0.09465 0.09465 $32,457,528 $5,000,000 $1,813,952 $1,632,702 $3,446,654 $8,446,654 $40,904,181 DATED: 9/01/94 DUE: 3/01/95 - 3/01/10 FIRST COUPON: 3/01/95 Assessed Valuation = 575,600,000 Tax Collection Rate = 97.000% Assessed Valuation Growth = 0.000% Prepared by: Rauscher Pierce Refsnes, Inc. 07/30/90 NEW95 AGG99A I)-6 GL 47c,„z i -t E7IRL L29/RSON 8 CO. A PROFESSIONAL CORPORATION CERTIFIED PUBLIC ACCOUNTANTS TEL.713-681-8500 • FAX 713-681-9043 P.O. BOX 500017 1716 MANGUM, SUITE 300 HOUSTON,TEXAS 7725 0-0017 HOUSTON,TEXAS 77092 September 12, 1990 Honorable C.V. Coppinger Mayor, City of Pearland, Texas Mr. Frank Ildebrando Senior Vice President Rauscher Pierce Refsnes, Inc. 1001 Fannin, Suite 700 Houston, Texas 77002 Re: City of Pearland, Texas, Refunding Bonds, Series 1990 We are the auditors for City of Pearland, Texas (the "City") and are duly licensed to practice as Certified Public Accountants in the State of Texas. We have furnished the City with our opinion on the general purpose financial statements of the City as of September 30, 1989, which opinion is contained in Appendix B to the Preliminary Official Statement, dated September 5, 1990 and the Official Statement, dated September 12, 1990 (the "Official Statement") . We consent to the incorporation in the Official Statement relating to the City of Pearland, Texas, Refunding Bonds, Series 1990, of our opinion and financial statement of the City for the fiscal year ended September 30, 1989. Financial statements as used in this letter of consent shall be deemed to include those notes to the statements, related schedules and supplemental information as such is presented in Appendix B of the Official Statement. The undersigned further consents and agrees to the use of the name of Earl Lairson & Co. , in the Official Statement as auditor of the City' s financial statements for the year ended September 30, 1989, and as certified public accountants. A:$11 A1111:41344' Houston, Texas September 12, 1990 • VINSON & ELKINS ATTORNEYS AT LAW THE WILLARD OFFICE BUILDING 3300 FIRST CITY TOWER FIRST CITY CENTRE 1455 PENNSYLVANIA AVE.,N.W. BIB CONGRESS AVENUE WASHINGTON,D.C.20004-1007 1001 FANNIN AUSTIN,TEXA$ 78701-2406 TELEPHONE(202)639-6500 TELEX 89680 HOUSTON,TEXAS 77002-6760 TELEPHONE(512)495-8400 FAX(202)639-6804 FAX(512)495-8612 TELEPHONE(713)758-2222 TELEX 762146 47 CHARLES ST.,BERKELEY SQUARE FAX(713)758-2346 3700 TRAMMELL CROW CENTER LON DON W1X 7PB, ENGLAND 2001 ROSS AVENUE TELEPHONE 011 44 71 491-7236 DALLAS,TEXAS 75201-2916 FAX 011 44 71 499-5320 TELEPHON E(214)220-7700 CABLE VINELKINS LONDON WI-TELEX 24140 MEMORANDUM FAX(214)220-7716 September 19, 1990 TO: James O. DeShazer City Manager 3519 Liberty Drive Pearland, Texas 77581 Frank J. Ildebrando Rauscher Pierce Refsnes, Inc. First City Tower, Suite 700 Houston, Texas 77002 FROM: Steven H. Gerdes RE: City of Pearland, Texas Refunding Bonds, Series 1990 Enclosed for your review and comment, please find a draft of the No-Arbitrage Certificate and Form 8038-G for the captioned Bonds. Please do not hesitate to call me at 758-4516 with your questions and comments. SHG cc: Clifford W. Youngblood RSVIIIVIEM SEP 21 1990 CITY MANA R 503\4093 c:twp508hg\pea270\caver.mes DRAFT 9/19/90 NO-ARBITRAGE CERTIFICATE I, the undersigned officer of the City of Pearland (the "City"), make this certification for the benefit of all persons interested in the exclusion from gross income for federal l � 3t97'�, income tax purposes of the interest to be paid on the City's Refunding Bonds Series 1990 / / (the "Bonds"), which are being issued in the aggregate principal amount of($7,364,391.80 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 executed as of September 12, 1990 (the "Ordinance"). I do hereby certify as follows: 1. Authorized Representative. I am the duly chosen, qualified, and elected 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 the Treasury Regulations (the "Regulations") heretofore promulgated under the Code and section 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 sections 1.103-13, 1.103-14, 1.103-15, 1.148-1T through 1.148-9T, 1.149(d)-1T and 1.150-1T of the Regulations and certain terms used herein have the same meaning as given to those terms in the Regulations. 3. Reasonable Expectations. This certification is based on the facts and estimates in existence on the date of issue of the Bonds or the date the Bonds were sold to the underwriters, 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 City is issuing the Bonds pursuant to the Ordinance (a) to provide funds which will be used to advance refund and defease a portion of the City's $12,060,000 Refunding Bonds, Series 1985 (the "Prior Bonds"), pursuant to an Escrow Agreement dated as of September 12, 1990 (the "Escrow Agreement"), between the City and First City, Texas - Houston, N. A. and (b) to pay the costs of issuance of the Bonds. Specifically, all of the Prior Bonds maturing on March 1, 1991, through March 1, 1995, will be paid as they mature and all of the Prior Bonds maturing between March 1, 1996, and March 1, 2001, inclusive (the "Refunded Bonds"), will be called on March 1, 1995, and redeemed. The callable Refunded Bonds are being defeased in order to achieve a present-value savings in the debt service payable by the City and the non-callable Refunded Bonds are being defeased to achieve a restructuring of the debt service payable by the City. A restructuring of the debt service payable by the City is necessary at this time because of a decline in the assessed valuation of property within the City which would, but for the issuance of the Bonds, result in an unacceptable ad valorem tax rate in order to meet its pre-existing debt service obligations. On the earliest call date for the Prior Bonds on which such Refunded Bonds are callable at a price of par, or par plus a premium not in excess of three percent, all of the callable Refunded Bonds will be called in advance of their scheduled maturities and repaid. The City has no present intent to issue any additional bonds within 12 months of the date hereof. 5. Accountants' Report. At the request of the City, Peat Marwick Main & Co., certified public accountants, has prepared a series of schedules and a report based thereon dated as of October 11, 1990 (the "Report"), detailing all relevant aspects of the application of the proceeds of the Bonds and the City's program to refund the Refunded Bonds. 6. The Prior Bonds. The Prior Bonds were issued on August 15, 1985, in accordance with the provisions of the Ordinance adopted on July 22, 1985, by the City (the "Prior Bond Ordinance"). All of the original and investment proceeds allocable to the Prior Bonds have been expended in accordance with the Prior Bond Ordinance, except for certain proceeds of the Prior Bonds which remain on deposit in the escrow fund created with respect to the Prior Bonds (the "Series 1985 Escrow Fund"). The proceeds of the Prior Bonds were used to advance refund and defease a portion of the City's Series 1982 and 1984 Bonds (the "Prior Refunded Bonds") and to pay costs of issuance thereof. All of the original and investment proceeds allocable to the Prior Refunded Bonds have been expended. No portion of the proceeds of the Prior Bonds was used to pay the principal of, or interest on, any other issue of governmental obligations. Under the Prior Bond Ordinance, the City created and continued a debt service fund (the "Prior Interest and Sinking Fund") and has on hand in such Prior Interest and Sinking Fund certain amounts to be used for the payment of debt service on the Prior Bonds. Although the Prior Interest and Sinking Fund will be continued for the payment of debt service on the Unrefunded Bonds (as hereinafter defined), the City has created a new debt service fund (the "Series 1990 Refunding Bonds Interest and Sinking Fund") under the Ordinance for purposes of the payment of debt service on the Bonds as described in paragraph 17 below. -2- As of the date hereof, the balance in the Interest and Sinking Fund is $800,000, of which $288,980 ("Available Cash") is allocable to the Refunded Bonds, such allocation being based on the relationship of the original principal amounts of the Refunded Bonds to the City's other outstanding bond issues secured by the Prior Interest and Sinking Fund as reduced by the amount of the Refunded Bonds (the "Unrefunded Bonds") ($6,795,000/$18,811,000 or 36.1225 percent). None of the Available Cash would have been used to pay debt service on the Refunded Bonds because prior to the next debt service payment date for the Refunded Bonds, the City expects to receive tax revenues in an amount sufficient to pay debt service; therefore, no portion of the Available Cash is part of a bona fide debt service fund under the Regulations because such portion is depleted at least once annually to pay debt service on the Refunded Bonds. The amount of $67,098.96 of the Available Cash (the "Carryover"), however, equals one-twelfth of the annual debt service on the Refunded Bonds and represents a reasonable Carryover as part of a bona fide debt service fund under the Regulations. 7. Use of Amounts Allocable to Prior Bonds. Other than proceeds in the Series 1985 Escrow Fund and the moneys in the Prior Interest and Sinking Fund, there are no amounts on hand which represent proceeds of the Prior Bonds, amounts treated as proceeds of the Prior Bonds or accumulated earnings on such proceeds. Proceeds in the Series 1985 Escrow Fund will be retained therein as required by the governing escrow agreement for the purpose of paying debt service on the Prior Refunding Bonds. The carryover amount of $67,098.96 of the Available Cash will be used on March 1, 1991, to pay debt service on the Bonds a date which is not later than the first date on which proceeds of the Bonds will be expended to pay debt service on the Prior Bonds. The remainder of the Available Cash will be transferred by the City to the Series 1990 Refunding Bonds Interest and Sinking Fund based on the recommendation of Rauscher Pierce Refsnes, Inc. (the "Underwriters"), set forth in Exhibit A hereto, that such balance should be maintained in the City's Series 1990 Refunding Bonds Interest and Sinking Fund with respect to the Bonds to provide a reserve for periodic fluctuations in the amount and timing of ad valorem tax collections. 8. Use of Proceeds of the Bonds. The net proceeds received by the City from the sale of the Bonds will be $7,244,779.49. Such amount represents the principal amount of the Bonds, equal to $7,364,391.80, plus accrued interest in the amount of $12,946.74, less the underwriter's discount in the amount of $132,559.05. The net proceeds received by the City from the sale of the Bonds will be expended as follows: (a) The amount of$7,104,900 will be deposited in the escrow fund established pursuant to the Escrow Agreement (the "Escrow Fund") and used on the date hereof to purchase United States Treasury Obligations, State and Local Government Series (the "Escrowed Securities"), the proceeds -3- of which will be used as described in the Report to pay principal, interest and redemption premium, if any, on the Refunded Bonds. (b) The amount of $12,946.74, representing accrued interest on the Bonds from October 1, 1990, through the date of delivery, will be deposited in the Series 1990 Refunding Bonds Interest and Sinking Fund, and will be disbursed on March 1, 1991, to pay interest on the Bonds. (c) The amount of $72,900 will be disbursed to pay the costs of issuance on the Bonds (including any rating agency fees charged to the City by the Bond insurer). (d) The amount of $53,986.13 will be disbursed to pay the insurance premium on the Bonds (net of any rating agency fees). (e) The amount of $15.54 represents a rounding amount and will be deposited in the Series 1990 Refunding Bonds Interest and Sinking Fund and used to pay debt service on the Bonds on the first interest payment date. (f) The amount of $31.08 will be deposited as the initial cash balance in the Escrow Fund and disbursed on March 1, 1991, to pay debt service on the Refunded Bonds. Pending disbursement, such amount will not be invested. 9. Investment Proceeds. Except for earnings on the amounts described in paragraphs 8(b) through 8(e), and the amount of $4.99 set forth in the Report as the amount expected to be remaining in the Escrow Fund following the final debt service payment with respect to the Refunded Bonds on March 1, 1995, all amounts received by the City, such as interest and dividends, resulting from the investment of any original pro- ceeds or investment proceeds of the Bonds will be deposited in the Escrow Fund for the Refunded Bonds and used to pay principal, interest and redemption premium, if any, on the Refunded Bonds. Earnings on the amounts described in paragraphs 8(b) through 8(e) will be used for one of the purposes described in such paragraphs. 10. No Overissuance. The amount of proceeds received by the City from the sale of the Bonds, after payment of costs of issuance, does not exceed the amount necessary to fund the Escrow Fund and to pay issuance and refunding costs and accrued interest on the Bonds. Except for earnings on the amounts described in paragraphs 8(b) through 8(e) and the amount of $4.99 described in paragraph 9, all investment earnings on the original proceeds of the Bonds will be retained in the Escrow Fund and used for -4- the governmental purpose of the Bonds. The timing of receipt of the investment earnings on the amounts described in paragraphs 8(b) through 8(e), which are expected to be de minimis, does not permit their use for the governmental purpose of the issue. The amount described in paragraph 8(e) could not be eliminated other than by reducing the principal amount of the Bonds to an amount which would be insufficient to repay the Refunded Bonds, the amount necessary for the governmental purpose of the Bonds. 11. No Excess Proceeds. All of the amounts received from the sale of the Bonds, except for (i) the amount of $12,946.74 described in paragraph 8(b), (ii) the amount of $72,900 described in paragraph 8(c), (iii) the amount of $53,986.13 described in paragraph 8(d), (iv) the amount of $15.54 described in paragraph 8(e) and (v) investment earnings accruing on the amounts described in paragraphs 8(b) through 8(e) will be deposited in or transferred to the Escrow Fund. Except for the amount of $4.99 described in paragraph 9, all proceeds of the Bonds deposited in or transferred to the Escrow Fund will be used to make payments of principal and interest on the Refunded Bonds. All other proceeds of the Bonds, except for the amount described in paragraph 8(e) and the investment earnings accruing on the amounts described in paragraphs 8(b) through 8(e), will be used to pay interest accruing on the Bonds from October 1, 1990, until the date hereof or costs of issuing and insuring the Bonds. The proceeds in the Series 1985 Escrow Fund will be retained therein as discussed in paragraph 7 above. In addition, there are no other amounts which constitute original or investment proceeds of the Prior Bonds, original or transferred proceeds of the Bonds, or investment earnings on such original proceeds. Investment earnings on the amounts described in paragraphs 8(b) through 8(e) are expected to be de minimis; therefore, the sum of the investment earnings on the amounts described in paragraphs 8(b) through 8(e), the amount described in paragraph 8(e) and the amount described in paragraph 9 will be less than one percent of the original proceeds of the Bonds. 12. Temporary Periods. Except for the amounts described in paragraphs 8(b) through 8(e), all of the amounts received from the sale of the Bonds, to the extent invested, will be invested in obligations the yield on which is not in excess of the yield on the Bonds. (a) Accrued Interest. The amount described in paragraph 8(b) represents accrued interest on the Bonds for a period not in excess of six months and will be expended within one year; therefore, such amount will be invested for an allowable temporary period. -5- (b) Issuance and Insurance Costs. It is expected that the amounts described in paragraphs 8(c) and 8(d) will be disbursed within one year of the date hereof for costs of issuing and insuring the Bonds; therefore, such amounts will be invested for an allowable temporary period. (c) Rounding Amount. The amount described in paragraph 8(e) does not exceed the lesser of$10,000 or one percent of the original proceeds of the Bonds; therefore, such amount will be invested for an allowable temporary period. To the extent any of the amounts described in paragraphs 8(b) through 8(e) are not expended as described herein, the City will take steps to restrict the investment of such amounts to a yield which is not materially higher than the yield on the Bonds. 13. Transferred Proceeds. On the dates that amounts on deposit in the Escrow Fund are used to pay principal and/or interest on the Prior Bonds (the "transfer dates"), an amount of the proceeds in the Series 1985 Escrow Fund on hand will cease to be proceeds of the Prior Bonds and will become transferred proceeds (the "transferred proceeds") of the Bonds. The amount of the Series 1985 Escrow Fund which becomes transferred proceeds on each transfer date is an amount equal to the amount of principal and/or interest paid on such Prior Bonds on such date, provided such transferred proceeds do not cause the total value of investments allocable to the Bonds to exceed the value of the outstanding Bonds. The Report includes a schedule of transfer dates and the amount of the Series 1985 Escrow Fund which is subject to becoming transferred proceeds of the Bonds on each such transfer date. The schedule in the Report sets forth computations as of each transfer date of (i) the amount of transferred proceeds, (ii) the amount of future receipts from the investment in the Series 1985 Escrow Fund allocable to each such transferred proceeds amount based on the relative values on such transfer date of the amount of the transferred proceeds on such date and the total value of the unspent proceeds on such date (which value is the present value on such transfer date of the remaining receipts in the Series 1985 Escrow Fund) and (b) the value of the outstanding Bonds on such transfer date reduced by the value of all other investments allocable to proceeds of the Bonds (which values are determined in accordance with section 1.148- 4T(e)(2) of the Regulations), (iii) the difference between the present value of such receipts as of each transfer date using (a) 8.58690 percent, the yield on the Series 1985 Escrow Fund, as the discount rate, and (b) 7.41277 percent, a yield which is not materially higher than the yield on the Bonds, as the discount rate, and (iv) the present value of such differences on the date hereof using 7.41277 percent as the discount rate (the "transferred proceeds penalty amount"). Performing the computations set forth above, the Report shows that the transferred proceeds penalty amount is $19,119.84. The transferred proceeds penalty amount of $19,119.84 was treated in the Report as a discount in -6- computing the composite yield on the Escrowed Securities as described in paragraph 15 below. 14. Yield on the Bonds. For the purpose of this certificate, 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 the obligation, produces an amount equal to the purchase price of such obligation. For purposes hereof, yield is and shall be calculated on a 360-day year basis with interest compounded semiannually. 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 to the date of issue only, at which price a substantial amount of each maturity of the Bonds was to be sold, based (except as described in Exhibit A hereto) on the actual facts and reasonable estimates on the date the Bonds were sold to the Underwriters. Based upon the representation of the Underwriters, set forth in Exhibit A hereto, the initial offering prices of the Bonds (including accrued interest to the date of issue only) aggregated $7,377,338.54. Any Underwriters' discount, issuance costs or costs of carrying or repaying the Bonds or the Refunded Bonds will not be taken into account as an adjustment to the purchase price, except that the cost of the insurance premium on the Bonds paid to Financial Guaranty Insurance Co. ("FGIC') in the amount of $53,986.13 will be treated as a reduction of the purchase price of the Bonds. The insurance premium is separately stated from all other fees or charges payable to FGIC. It is reasonably expected the FGIC, as guarantor, will not be called upon to make any payment with respect to the Bonds for which FGIC will not be reimbursed immediately or upon commercially reasonable repayment terms (during a workout period that is not unreasonably long) for any payment under the FGIC guarantee. FGIC is reasonably assured that sufficient funds will be available in the event that none (or an insubstantial portion) of the proceeds of the Bonds are expended to fund the Project. All payments to FGIC for any nonguarantee service performed by the guarantor will be fully and adequately compensated separate and apart from the guarantee fees described above based on a comparison to payments that would be charged for the nonguarantee service if such service was performed by a person other than a guarantor. Based upon a representation of the Underwriters set forth on Exhibit A hereto, (a) the insurance premium does not exceed a reasonable charge for the transfer of credit risk taking into account payments charged by guarantors in comparable transactions (including transactions in which a guarantor has no involvement other than as a guarantor) and (b) the present value of the debt service savings expected to be realized as a result of such insurance exceeds the present value of the insurance premium discounted at a rate equal to the yield on the Bonds assuming recovery of the insurance premium. -7- Yield on the Bonds is calculated on the basis of the final maturity date because (a) the City has no present intention to call the Bonds for optional redemption (b) no Current Interest Bond is callable at any time for a price less than par plus accrued interest, (c) the Compound Interest Bonds are callable at a price not less than the accreted value on the date fixed for redemption of such Compound Interest Bonds, and (d) the Underwriters have represented on Exhibit A hereto that the issue price of each such callable Bond is not greater than par, plus accrued interest. Therefore, no Bond has a yield calculated to any redemption date for such Bond more than one-fourth of one percent less than the yield produced on such Bond calculated to the date of final maturity of such Bond. In addition, none of the Bonds is subject to mandatory early redemption. The yield on the Bonds calculated in this manner, as shown in the Report, is 7.41277 percent. 15. Yield on the Escrowed Securities. As shown in the Report, the yield on the Escrowed Securities is 7.41250 percent, a yield that is not higher than the yield on the Bonds. The City has covenanted in the Ordinance to comply with, among other things, the requirements of section 148(f) of the Code and, if required, the City will satisfy this requirement with respect to earnings on the Escrowed Securities out of funds other than those in the Escrow Fund. 16. Issue. There are no other obligations which (a) are issued at substantially the same time as the Bonds (i.e., within 31 days of the date hereof), (b) are sold pursuant to a common plan of financing with the Bonds, and (c) will be paid out of substantially the same source of funds or will have substantially the same claim to be paid out of substantially the same source of funds as the Bonds. 17. The Series 1990 Refunding Bonds Interest and Sinking Fund. Pursuant to the Ordinance, the City has created a new debt service fund designated the "Series 1990 Refunding Bonds Interest and Sinking Fund" and the proceeds from all taxes levied, assessed and collected for and on account the Bonds are to be deposited in such Fund. The Interest and Sinking Fund will be used primarily to achieve a proper matching of revenues and debt service on the Bonds and the City expects that taxes levied, assessed and collected for and on account of the Bonds will be sufficient each year to pay such debt service. All amounts which will be used to pay principal of and interest on the Bonds within 13 months of the date of deposit in the Series 1990 Refunding Bonds Interest and Sinking Fund and which will be depleted annually except for a reasonable carryover amount not -8- in excess of the greater of one year's earnings on the Fund or one-twelfth of the annual debt service on the Bonds will constitute a bona fide debt service fund component of the Interest and Sinking Fund (the "Bona Fide Portion"); the remaining portion of the Interest and Sinking Fund (the "Reserve Portion") will be treated separately for purposes of this certificate. Amounts on deposit from time to time in the Bona Fide Portion and the Reserve Portion are allocable between the Bonds and any other obligations of the City secured by the Series 1990 Refunding Bonds Interest and Sinking Fund on the basis of the relative original principal amounts of such issues. The portion of the Reserve Portion allocable to the Bonds at any time (100 percent on the date hereof) is not expected to exceed $7,364,391.80 so long as any of the Bonds is outstanding. To the extent the amount on deposit in the Reserve Portion exceeds $7,364,391.80 at any time, such excess shall be invested at a yield not in excess of the yield on the Bonds. 18. No Sinking Funds. Except for and to the extent of the Series 1990 Refunding Bonds Interest and Sinking Fund, there is and will be no other fund or account comprised of any securities, evidences of indebtedness or other obligations and established, or to be established, by or on behalf of the City which is reasonably expected to be used, or to generate earnings to be used, to pay debt service on the Bonds or which is 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. Furthermore, no portion of the annual debt service savings resulting from the issuance of the Bonds will be accumulated in a sinking fund for the payment of debt service on the Unrefunded Bonds payable after the scheduled callable maturity of the Refunded Bonds. 19. Compliance With Rebate Requirements. 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, including the Reserve Portion of the Interest and Sinking Fund, be rebated to the federal government. Specifically, the City will (a) 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, (b) calculate at such intervals as may be required by applicable Regulations, the amount of "rebatable arbitrage earnings," if any, earned from the investment of the "gross proceeds" of the Bonds and (c) pay, not less often than every fifth anniversary date of the delivery of the Bonds and within 60 days following the final maturity of the Bonds, or on such other dates permitted by applicable Regulations, all amounts required to be rebated to the federal government. Further, the City will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to -9- any person other than the federal government by entering into any investment arrange- ment with respect to the "gross proceeds" of the Bonds that might result in a reduction in the amount required to be paid to the federal government because such arrangement results in a smaller profit or a larger loss than would have resulted if the arrangement had been at arm's-length and had the yield on the issue not been relevant to either party. 20. No Other Refunding. No portion of the proceeds of the Bonds is expected to be used to pay any interest on or principal of any issue of governmental obligations other than the Bonds and the Refunded Bonds. 21. No Artifice of 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 and the Regulations by (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. 22. Not an Abusive Transaction. A device has not been and will not be employed in connection with the issuance of the Bonds to obtain a material financial advantage (based on arbitrage) apart from savings attributable to lower interest rates. 23. No Arbitrage. On the basis of the foregoing facts, estimates and circumstances, it is expected that the proceeds of the Bonds will not be used in a manner that would cause any of the Bonds to be an "arbitrage bond" 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 no other facts, estimates or circumstances that would materially change such expectations. 24. Right to Certify. Although no examination has been made, the undersigned is neither aware of any listing or proposed listing of the City by the Commissioner of Internal Revenue, by publication in the Internal Revenue Bulletin or otherwise, to the effect that it may not certify the Bonds, nor has the City been notified of any such listing or proposed listing of it by the Commissioner of Internal Revenue, by publication in the Internal Revenue Bulletin or otherwise, to the effect that it may not certify the Bonds. -10- WITNESS MY HAND, this 11th day of October, 1990. CITY OF PEARLAND, TEXAS By: Title: 503\4093(9/11/90) c:hvp50\ahepea2701rcfadv90.arb -11- EXHIBIT A CERTIFICATE OF UNDERWRITERS We, the undersigned, have acted as underwriters in connection with the sale and delivery of the City of Pearland Refunding Bonds, Series 1990, in the aggregate principal amount of $7,364,391.80 (the "Bonds"). In our capacity as underwriters, we hereby certify as follows: (A) The aggregate initial offering price (including bond premium and accrued interest to the date of issue only) of the Bonds to the public (excluding bond houses, brokers and other intermediaries acting in the capacity of wholesalers or underwriters) at which price a substantial amount of each maturity of the Bonds was to be sold is $7,377,338.54. Each of the Bonds was actually offered to the general public in a bona fide public offering for the issue price of the Bond (determined as set forth below). In no event did such issue price for a Bond exceed the fair market value of such Bond on the date the Bonds were sold. Such initial offering prices were determined as follows: (a) In the case of each maturity of Bonds none of which was offered prior to the issue date to an institutional or other investor at a price which is less than the price at which such Bonds were initially offered to the general public, such offering prices were determined on the basis of actual facts and reasonable expectations as of the sale date and have not been adjusted to take into account actual facts after such date; (b) In the case of any maturity of Bonds initially offered at one price to the general public and at a discount from that price to institutional or other investors, the initial reoffering price set forth above is (i) the price at which such Bonds were sold prior to the issue date to such institutional or other investors and (ii) the initial offering price to the general public of the remaining Bonds of such maturity at which price a substantial amount of such Bonds sold. The term "sale date," as used herein, is the first date on which the Bonds were sold by the City pursuant to a binding, written contract. The term "issue date" is the first day on which there is a physical delivery of the written evidence of the Bonds in exchange for the purchase price (but not earlier than the date interest on the Bonds begins to accrue for federal income tax purposes). The issue price of each callable Current Interest Bond is not greater than par, plus accrued interest; therefore, because, pursuant to Section 16 of the Ordinance, no Current Interest Bond is callable at any time at a price less than par, and no Compound Interest Bond is callable at any time at a price less than its accreted value, the yield on each Bond computed to any call date therefor is not more than 1/4 percent less than the yield on such Bond computed to the final maturity date. (B) Based upon the scheduled debt service on the Bonds, an amount of not less than $288,980 should be maintained as of the end of the current fiscal year as a balance allocable to the Unrefunded Bonds in the Series 1990 Refunding Bonds Interest and Sinking Fund consistent with accepted standards of prudent fiscal management for similar governmental districts and in order to provide a reserve against periodic fluctuations in the amount and timing of ad valorem tax collections for debt service purposes. (C) The amount of the cost of insurance for the Bonds is set forth in FGIC's commitment and is separately stated from all other fees or charges payable to FGIC. The cost of such insurance does not include any amount which is intended to compensate the insurer as part of an arrangement for multiple services between the City and FGIC. Furthermore, the amount of the insurance premium has not been increased by any amount to reflect indirect payments of additional costs of issuance (i.e., costs in addition to a charge for transfer of credit risk). The premium does not exceed a reasonable charge for the transfer of credit risk taking into account payments charged by guarantors in comparable transactions (including transactions in which a guarantor has no involvement other than as guarantor). The present value of debt service savings expected to be realized as a result of such insurance exceeds the insurance premium, discounted at a rate equal to the yield on the Bonds which results assuming recovery of the insurance premium. The undersigned understands that the statements made herein will be relied upon by the City in its efforts to comply with the conditions imposed by the Code on the exclusion of interest on the Bonds from the gross income of their owners. Capitalized terms used herein and not otherwise defined have the meaning ascribed to such terms in the No-Arbitrage Certificate to which this certificate is attached. RAUSCHER PIERCE REFSNES, INC. By: Title: Form 8038-G Information Return for Tax-Exempt Governmental Obligations (Rev.October 1989) to.Under Section 149(e) OMB No. 1545 0720 Department of the Treasury ►See separate Instructions Expires 5-31-92 Internal Revenue Service (Use Form 8038•GC if the issue price is under$100.000) Part I Reporting Authority Check box if Amended Return ► ❑1 Issuer's name 2 Issuer's employer identification number City of Pearland 1-746028909-7 3 Number and street 4 Report number 3519 Liberty Drive G1990 - 1 5 City or town,state,and ZIP code 6 Date of issue Pearland, Texas 77581 October 11, 1990 7 Name of Issue 8 CUSIP Number Refunding Bonds, Series 1990 Part II Type of Issue(check box(es)that applies and enter the Issue Price) 9 Check box if obligations are tax or other revenue anticipation bonds► ❑ I Issue price 10 Check box if obligations are in the form of a lease or installment sale► ❑ 11 ❑ Education IS 12 ❑ Health and hospital 13 ❑ Transportation 14 0 Public safety 15 0 Environment(including sewage bonds) 16 ❑ Housing 17 0 Utilities 18 0 Other. Describe(see Instructions)P. Part III Description of Obligations (a) (b) (c) (d) (e) (f) (d Stated redemption Weighted Net interest Maturity date Interest rate I Issue price price at maturity avera a;ratio; Yield cost 19 Final maturity . 3-1-2009 0 % 447,745.20 1,765,000 ��%%% 20 Entire issue . / // 7,364,391 .80 10,000,000 11 .567 years 7.41_2_8% 11 .16 % Part IV Uses of Original Proceeds of Bond Issues(including underwriters' discount) 21 Proceeds used for accrued interest 21 12,946.74 22 Issue price of entire issue(enter line 20c) 22 7 364 391 .80 23 Proceeds used for bond issuance costs(including underwriters'discount). 23 205,459.05 24 Proceeds used for credit enhancement 24 53,986. 13 25 Proceeds allocated to reasonably required reserve or replacement fund 25 --0-- 26 Proceeds used to refund prior issues. . . . . . . . . . . . . 26 1 7, 104,931.08 27 Total(add lines 23, 24, 25,and 26) . . . . . . . . . . . . . . . 27 7,364,376.26 28 Nonrefunding proceeds of the issue(subtract line 27 from line 22 and enter amount here) ' 28 15.54 Part V Description of Refunded Bonds(complete this part only for refunding bonds) 29 Enter the remaining weighted average maturity of the bonds to be refunded . . . ► 3.737 years 30 Enter the last date on which the refunded bonds will be called . . . . . . . . N. March 1 , 1995 31 Enter the date(s)the refunded bonds were issued P. August 15, 1985 Part VI Miscellaneous 32 Enter the amount of the state volume cap allocated to the issue . . . . . . . . . ► --0-- 33 Enter the amount of the bonds designated by the issuer under section 265(b)(3)(B)(i)(III) (small issuer exception) ► 7,364,391 .80 34 Pooled financings: a Enter the amount of the proceeds of tnis ss,e that are to be used to make loans to other governmental units► --0-- - — b Check box if this issue is a loan made frog the proceeds of another tax-exempt issue ► ❑ and enter the name of the issuer P. and the date of the issue ► Under penalties of perjury. Cec a' . - -eC tr s arc accompany;ng sched.,es aria statements.and to the best of my knowledge and beret they are true.Correct.and comve'= Please Sign Here Signature of officer Date Type or print name and title For Paperwork Reduction Act Notice, see page 1 of the Instructions. Form 8038•G (Rev 10-89 ec.s. cov.tn.ent Printing Office: 1909-262-151/OOo79 VINSON & ELKINS ATTORNEYS AT LAW THE WILLARD OFFICE BUILDING 3300 FIRST CITY TOWER FIRST CITY CENTRE 1455 PENNSYLVANIA AVE.,N.W. BIB CONGRESS AVENUE WASHINGTON,D.C.20004-1007 1001 FANNIN AUSTIN,TEXAS 781701-2490 TELEPHONE20216 39-6 5 00 TELEX 89680 HOUSTO N,TEXAS 77002-6760 TELEPHONE(5121495-8400 FAX(202)639-6604 FAX(512)495-8612 TELEPHONEl7131758-2222 TELEX 762146 47 CHARLES ST.,BERKELEY SQUARE FAX(713)758-2346 3700 TRAMMELL CROW CENTER LONDON W1X 71.111, ENGLANO 2001 ROSS AVENUE TELEPHONE OII 4471491.7236 September 28, 1990 DALLAS,TEXAS 76201-2916 FAX 011 44 71 499-5320 P TELEPHONE(214)220-7700 CABLE VINELXINS LONDON WI-TELEX 24140 FAX(214)220-7716 TO: Distribution List FROM: Clifford W. Youngblood RE: Closing for $7, 364, 591.80 City of Pearland, Texas, Refunding Bonds, Series 1990 The delivery of the captioned issue is scheduled for 10: 00 A.M. on Thursday, October 11, 1990. This letter is intended to set out the preliminary steps to be taken at a preclosing scheduled for 2: 00 P.M. on Wednesday, October 10, as well as at the closing on Thursday. PRECLOSING 1. 2 :00 P.M. , Wednesday, October 10, First City, Texas- Houston, N.A. , 21st Floor Financial Center, 1301 Fannin, Houston, TX 77002. 2 . Persons attending: r� A. Rauscher Pierce Refsnes, Inc. D 1°11.1Frank Ildebrando B. First City, Texas-Houston, N.A. r .T Deri Ward CITY �A iA cfl C. City of Pearland Mr. DeShayer or Ms. Eastburn may wish to attend D. Vinson & Elkins Clifford W. Youngblood E. Smith, Murdaugh, Little & Bonham Jennifer Goldberg Closing Memorandum September 28, 1990 Page 2 3 . At the preclosing, the following actions should be taken: A. Mr. Youngblood will proofread Bond No. R-1 and CR-1. B. All parties will examine the closing documents and verify the arrangements for closing. CLOSING 1. Persons attending are same as those attending preclosing. 2. Documents for closing are listed below. Those designated by asterisk have been received by and will be brought to the closing by Vinson & Elkins. A. First City, Texas-Houston, N.A. * 1. Executed Escrow Agreement with KPMG Peat Marwick Report attached. * 2 . Executed Certificate of Escrow Agent relating to authority of officers and signature identification, with certified bank resolution authorizing execution of Escrow Agreement. * 3 . Executed Paying Agent/Registrar Agreement. 4 . Registrar's Receipt. 5. Escrow Agent's Receipt. 6. Notices of Redemption. NOTE: The KPMG Peat Marwick Report and Items 4, 5, and 6 will be available at preclosing. B. Attorney General 1. Executed opinion. 2. Comptroller's Registration Certificate. NOTE: These will be delivered at closing. Closing Memorandum September 28, 1990 Page 3 C. City of Pearland * 1. General Certificate. * 2. Copies of ordinance authorizing issuance of the Bonds. * 3. Signature Identification and No-Litigation Certificate. 4. Instruction letter re notices of redemption. * 5. Closing Certificate of Mayor and City Manager required by BPA. * 6. Certificate of City Manager required by BPA. 7. No-Arbitrage Certificate and Form 8038G. 8. Receipt. * 9. Receipt and No-Litigation Certificate. 10. Insurance Policy, Rating Letters, and opinion of FGIC Counsel. NOTE: Items 4 and 7 are being furnished to the City by Vinson & Elkins for signature and will be available at preclosing. Item 8 will be available at preclosing. Item 10 will be brought to closing by Mr. Youngblood. D. Underwriter * 1. Copies of SLG Subscriptions. 2. Copies of Debt Service Schedule. * 3. Copies of Bond Purchase Agreement. 4. Copies of Final Official Statement. 5. Certification Regarding Costs. NOTE: Item 5 is an exhibit to the No-Arbitrage Certificate and will be available at preclosing for execution. Closing Memorandum September 28, 1990 Page 4 E. Vinson & Elkins * 1. Bond Opinion. * 2 . Supplemental opinion required by BPA. 3 . A. At or prior to closing, First City will receive from the Underwriter, in immediately available funds, $7, 244,779.49 representing the purchase price for the 1990 bonds, including $12,946.74 of accrued interest. B. SLG Subscriptions in the total amount of $7, 104,900. 4 . Immediately upon closing, First City will disburse funds as follows: A. To the Federal Reserve Bank, Dallas, $7, 104 ,900 as the purchase price of the SLG's. B. $31. 08 to the Escrow Fund as the beginning cash balance. C. $19, 000 to First City as the Escrow Agent's fee and Paying Agent's fee for the Refunded Bonds. D. $12 , 946.74 to the City as accrued interest, for deposit in the City's Interest and Sinking Fund. E. $53 , 986. 13 to FGIC as the insurance premium. F. $12, 500 to pay rating agency fees. G. $41, 415. 54 to the City as a fund to pay the remaining costs of issuance. Any money remaining after costs are paid will be deposited into the Interest and Sinking Fund. NOTE: Ms. Eastburn is requested to furnish to Ms. Ward the appropriate information for the transfers set out in Items D and G. Mr. Ildebrando is requested to furnish the appropriate information for the transfer set out in Item F. If there are any changes that should be made to the above, please call me at 758-2468 or Joetta Bowie at 758-2485. Clifford W. Youngblood 0235/2061 Distribution List City of Pearland, Texas Refunding Bonds, Series 1990 Mr. James 0. DeShazer Ms. Janet S. Eastburn City Manager Director of Finance City of Pearland City of Pearland P. 0. Box 2068 P. 0. Box 2068 Pearland, TX 77588 Pearland, TX 77588 Mr. Frank Ildebrando Ms. Jennifer Goldberg Rauscher Pierce Refsnes, Inc. Smith, Murdaugh, Little 700 First City Tower & Bonham 1001 Fannin 1200 Travis, Suite 1800 Houston, TX 77002 Houston, TX 77002-6098 Ms. Deri Ward First City, Texas-Houston, N.A. 21st Floor Financial Center 1301 Fannin Houston, TX 77002 ,3 t CITY OF PEARLAND, TEXAS $7 , 364 ,391 . 80 Refunding Bonds Series 1990 BOND PURCHASE AGREEMENT September 12 , 1990 THE HONORABLE MAYOR AND CITY COUNCIL MEMBERS City of Pearland City Hall P. O. Box 2068 Pearland, Texas 77588-2068 Dear Mayor and City Council Members : The undersigned, Rauscher Pierce Refsnes , Inc . , (the "Underwriter") , offers to enter into this Bond Purchase Agreement with the City of Pearland, Texas (the "City" ) . This offer is made' subject to the City' s acceptance of this Bond Purchase Agreement on or before 10 : 00 p.m. , on the date set out above . 1 . Purchase and Sale of the Bonds . Upon the terms and conditions and upon the basis of the representations set forth herein, the Underwriter hereby agrees to purchase from the City, and the City hereby agrees to sell and deliver to the Underwriter on the closing date, October 11 , 1990 , and as further defined in Paragraph 6 . ( "Closing") , $7 , 364 ,391 . 80 principal amount of City of Pearland, Texas Refunding Bonds, Series 1990 (the "Bonds , " including both Current Interest Bonds and the Capital Appreciation Bonds) . The Bonds shall be dated October 1 , 1990 , and shall have the maturities and bear interest (from October 1 , 1990 for the Current Interest Bonds , and from the date of delivery for the Capital Appreciation Bonds) , at the rate or rates per annum as shown on the maturity schedule on the cover page of the Official Statement, a copy of which is attached hereto as Exhibit A. The purchase price for all of the Bonds will be $7 , 244 , 779 .49 , which reflects the aggregate principal amount of the Current Interest Bonds of $6 ,415 , 000 , plus the aggregate principal amount of the Capital Appreciation Bonds of $949,391 .80 , less an underwriter' s discount of $132 , 559 . 05 , plus $12 , 946 . 74 of interest accrued on the Current Interest Bonds from October 1 , 1990 to October 11 , 1990 , the date of the payment for and delivery of the Bonds. 2 . Ordinance . The Bonds shall be as described in and shall be issued and secured under the provisions of an ordinance to be adopted by the City on September 12 , 1990 as further described in the Official Statement (the "Ordinance") . The Bonds shall be subject to redemption as described in the Official Statement. 3 . Public Offering. It shall be a condition of the obligation of the City to sell and deliver the Bonds to the Underwriter, and of the obligation of the Underwriter to purchase and accept delivery of the Bonds, that the entire principal amount of the Bonds authorized by the Ordinance shall be sold and delivered by the City and accepted and paid for by the Underwriter at the Closing. The Underwriter agrees to make a bona fide public offering of all of the Bonds , at not in excess of the initial public offering prices, as set forth on the cover page of the Official Statement, plus accrued interest on the Current Interest Bonds from the date of the Bonds, and confirm in writing to the City the principal amount (or percentage of principal amount) of each maturity and the corresponding price for each maturity (or the yield from each maturity resulting from such price) at which the Bonds were sold pursuant to such bona fide public offering. 4 . Official Statement. The Preliminary Official Statement, dated September 5 , 1990 and the Official Statement, dated September 12 , 1990 , including the cover page and Appendices thereto, as further amended only in the manner hereinafter provided, are hereinafter called the "Official Statement. " The City hereby authorizes the Escrow Agreement, hereinafter defined, the Ordinance and the Official Statement and the information therein contained to be used by the Underwriter in connection with the public offering and sale of the Bonds. The City hereby ratifies the use by the Underwriter in the offering of the Bonds prior to the date hereof of the Preliminary Official Statement for the Bonds dated September 5 , 1990 . The City agrees to cooperate with the Underwriter to provide a supply of final Official Statements within seven business days of the date hereof in sufficient quantities to comply, and the Underwriter agrees to comply, with the Underwriter' s obligations under applicable MSRB Rules and Rule 15c2-12 of the Securities Exchange Commission. The Underwriter will use its best efforts to assist the City in the preparation of the final Official Statement in order to comply with the aforementioned rules . 5 . Representation, Warranties and Agreements of City. On the date hereof, the City represents, warrants and agrees as follows : A. The City is a duly organized and existing municipal corporation of the State of Texas and a body politic and corporate, duly created, existing and acting as a Home Rule City under the provisions of the Constitution -2- and laws of the State of Texas, and has full legal right, power and authority (i) to issue the Bonds and to enter into this Bond Purchase Agreement and the Escrow Agreement between the City and the Escrow Agent described in the Ordinance (the "Escrow Agreement") , (ii) to authorize and approve the Preliminary Official Statement and the Official Statement and to authorize their distribution by the Underwriter, (iii) to adopt the Ordinance, and to issue and deliver the Bonds to the Underwriter as provided herein, and (iv) to carry out and consummate all other transactions contemplated by the Ordinance, the Escrow Agreement and this Bond Purchase Agreement; B. By official action of the City prior to or concurrently with the acceptance hereof, the City has duly adopted the Ordinance, has duly authorized and approved the execution and delivery of the Bonds , the Escrow Agreement and this Bond Purchase Agreement, and has duly authorized and approved the performance by the City of its obligations contained in the Ordinance, the Bonds , the Escrow Agreement and in this Bond Purchase Agreement; C. The City has complied, and will be at the date of closing in compliance, in all material respects , with the Constitution and laws of the State of Texas in connection with the authorization, issuance and sale of the Bonds; D. The City is not in breach of or default under any applicable law or administrative regulation of the State of Texas or the United States or any applicable judgment or decree or any loan agreement, note, resolution, agreement or other instrument, except as may be disclosed in the Official Statement, to which the City is a party or is otherwise subject, which would have a material and adverse effect upon the business or financial condition of the City; and the execution and delivery of the Escrow Agreement and this Bond Purchase Agreement by the City, and the execution and delivery of the Bonds and the adoption of the Ordinance by the City and compliance with the provisions of each thereof will not violate or constitute a breach of or default under any existing law, administrative regulation, judgment, decree or any agreement or other instrument to which the City is a party or is otherwise subject; E. All approvals , consents and orders of any governmental authority or agency having jurisdiction of any matter which would constitute a condition precedent to the performance by the City of its obligations to sell and deliver the Bonds hereunder will have been obtained prior to the Closing; F. At the time of the City' s acceptance hereof and at the time of the Closing, the Official Statement does not and -3- will not contain any 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; G. The audited financial statements of the City contained in the Official Statement present fairly the financial position of the City as of September 30 , 1989, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles; H. Between the date of this Bond Purchase Agreement and Closing, the City will not, without the prior written consent of the Underwriter, issue any additional bonds or other obligations for borrowed money payable in whole or in part from taxes , and the City will not incur any material liabilities, direct or contingent, relating to, nor will there be any adverse change of a material nature in the financial position of, the City. I . Except as described in the Official Statement, to the knowledge of the City, no litigation is pending or threatened in any court affecting the corporate existence of the City, the title of its officers to their respective offices , or seeking to restrain or enjoin the issuance or delivery of the Bonds, or the collection of the taxes pledged or to be pledged to pay the principal of and interest on the Bonds , or in any way contesting or affecting the issuance, execution, delivery, payment, security or validity of the Bonds, or in any way contesting or affecting the validity or enforceability of the Ordinance, the Escrow Agreement or this Bond Purchase Agreement, or contesting the powers of the City, or any authority for the Bonds, the Ordinance, the Escrow Agreement, or this Bond Purchase Agreement, or contesting in any way the completeness, accuracy or fairness of the Preliminary Official Statement or the Official Statement, or materially and adversely affecting the financial condition of the City. J. The City will cooperate with the Underwriter in arranging for the qualification of the Bonds for sale and the determination of their eligibility for investment under the laws of such jurisdictions as the Underwriter designates, and will use its best efforts to continue such qualifications in effect so long as required for distribution of the Bonds; provided, however, that the City will not be required to execute a general consent to service of process or to qualify to do business in connection with any such qualification in any jurisdiction; K. The descriptions contained in the Official Statement of the Bonds, the Escrow Agreement and the -4- Ordinance accurately reflect the provisions of such instruments, and the Bonds, when validly executed, authenticated and delivered in accordance with the Ordinance and sold to the Underwriter as provided herein, will be validly issued and outstanding obligations of the City entitled to the benefits of, and subject to the limitations contained in, the Ordinance; and L. If prior to the Closing an event occurs affecting the City which is materially adverse for the purpose for which the Official Statement is to be used and is not disclosed in the Official Statement, the City shall notify the Underwriter, and if in the opinion of the Underwriter such event requires a supplement or amendment to the Official Statement, the City will supplement or amend the Official Statement in a form and in a manner approved by the Underwriter and the Underwriter ' s Counsel. 6 . Closing. At 10 : 00 A.M. , on October 11 , 1990 (the "Closing") , the City will deliver the initial bonds (as required by the Ordinance) to the Underwriter and will have available for immediate exchange the Bonds in definitive form, duly executed and authenticated, together with the other documents hereinafter mentioned, and the Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in Paragraph 1 . hereof in immediately available funds . Delivery and payment as aforesaid shall be made at the offices of First City, Texas-Houston, N. A. , Houston, Texas, or such other place as shall have been mutually agreed upon by the City and the Underwriter. The definitive Bonds shall be printed or lithographed; shall be prepared and delivered as fully registered bonds in the denomination or maturity amount of $5 , 000 or any integral multiple thereof; shall be registered in the names as shall be requested by the Underwriter at least five days prior to the Closing; and, if the Underwriter shall so request, shall be made available to the Underwriter at least one business day before the Closing for purpose of inspection in New York, New York. 7 . Conditions . The Underwriter has entered into this Bond Purchase Agreement in reliance upon the representations and warranties of the City contained herein and to be contained in the documents and instruments to be delivered at the Closing, and upon the performance by the City of its obligations hereunder, both as of the date hereof and as of the date of Closing. Accordingly, the Underwriter' s obligations under this Bond Purchase Agreement to purchase and pay for the Bonds shall be subject to the performance by the City of its obligations to be performed hereunder and under such documents and instruments at or prior to the Closing, and shall also be subject to the following conditions : -5- A. The representations and warranties of the City contained herein shall be true, complete and correct in all material respects on the date hereof and on and as of the date of Closing, as if made on the date of Closing; B. As of the time of the Closing, the Ordinance and the Escrow Agreement shall be in full force and effect, and the Ordinance and the Escrow Agreement shall not have been amended or supplemented, and the Official Statement shall not have been amended, modified or supplemented, except as may have been agreed to by the Underwriter; C. At the time of the Closing, all official actions of the City related to the Ordinance and the Escrow Agreement shall be in full force and effect and shall not have been amended, modified or supplemented; D. The City shall not have failed to pay principal or interest when due on any of its outstanding obligations for borrowed money; E. At or prior to the Closing, the City shall have subscribed to the United States Treasury for the purchase of State and Local Government Treasury Obligations required to be deposited with the Escrow Agent pursuant to and as defined in the Escrow Agreement; and F. At or prior to the Closing, the Underwriter shall have received two copies of each of the following documents: (1) The Official Statement of the City executed on behalf of the City by the Mayor and City Secretary of the City; (2) The Ordinance, certified by the City Secretary under the City' s seal as having been duly adopted by the City and as being in effect, with such changes or amendments as may have been agreed to by the Underwriter; (3) An opinion, dated the date of Closing, of Vinson & Elkins, Bond Counsel to the City, in form and substance acceptable to the Underwriter concerning the validity of the Bonds under Texas law and the excludability from gross income for federal tax purposes, of interest on the Bonds; (4) An opinion or certificate, dated on or prior to the date of Closing, of the Attorney General of Texas, approving the Bonds as required by law and a certificate of the Comptroller of Public Accounts of the State of Texas regarding the registration of the Bonds as required by law; -6- (5) A supplemental opinion, dated the date of Closing, of Vinson & Elkins, Bond Counsel to the City, addressed to the City and the Underwriter, to the effect that (a) in its capacity as Bond Counsel , such firm has reviewed the information in the Official Statement under the captions , "THE BONDS" , "LEGAL MATTERS, " LEGAL OPINIONS, " (insofar as such section relates to the opinion of Bond Counsel) , and "TAX MATTERS - Tax Exemption and Tax Accounting Treatment of Original Issue Discount Bonds and Capital Appreciation Bonds, " and such firm is of the opinion that the information relating to the Bonds and the Ordinance contained under such captions in all respects accurately and fairly reflects the provisions thereof and, insofar as such information relates to matters of law, is true, accurate, and complete; (b) the Bonds are exempt from registration pursuant to the Securities Act of 1933 , as amended, and the Ordinance is exempt from qualification as an indenture pursuant to the Trust Indenture Act of 1939 , as amended; (c) in the performance of their duties as Bond Counsel for the City, without having undertaken to determine independently the accuracy and completeness of all the statements contained in the Official Statement, nothing has come to the attention of such counsel which would lead them to believe that the Official Statement (excluding the financial statements and other financial statistical data included therein, as to all of which no view need be expressed) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (6) A certificate, dated the date of Closing, signed by the Mayor and the City Manager of the City, to the effect that (a) the representations and warranties of the City contained herein are true and correct in all material respects on and as of the date of Closing as if made on the date of Closing; (b) except to the extent disclosed in the Official Statement, to the knowledge of such persons , no litigation is pending or threatened in any court to restrain or enjoin the issuance or delivery of the Bonds, or the collection of the ad valorem taxes pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity of the Bonds, the Ordinance, the Escrow Agreement or this Bond Purchase Agreement, or contesting the powers of the City or contesting the authorization of the Bonds or the Ordinance, or contesting in any way the accuracy, completeness or fairness of the Preliminary Official -7- Statement or the Official Statement (but in lieu of or in conjunction with such certificate, the Underwriter may, in its sole discretion, accept certificates or opinions of the City Attorney that, in his or her opinion, the issues raised in any such pending or threatened litigation are without substance or that the contentions of all plaintiffs therein are without merit) ; and (c) to the best of their knowledge, no event affecting the City has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used, or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any respect; (7) A certificate, dated the date of Closing, of the City Manager of the City to the effect that, other than as reflected in the Official Statement, there has not been any material and adverse change in the affairs or financial condition of the City since September 30, 1989 , the latest date as to which audited financial information is available; (8) A certificate, dated the date of the Closing, of an appropriate official of the City to the effect that, on the basis of the facts, estimates and circumstances in effect on the date of delivery of the Bonds, 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 Internal Revenue Code of 1986 , as amended; (9) A copy of a special report prepared by the independent certified public accountants named in the Official Statement, addressed to the City, Bond Counsel, the Underwriter and Underwriter ' s Counsel verifying the arithmetical computations of the adequacy of the maturing principal and interest on the escrowed securities and uninvested cash on hand under the Escrow Agreement to pay, when due, the principal of and interest on the bonds being refunded by the Bonds and the computation of the yield with respect to such securities and the Bonds; (10) A copy of the Financial Guaranty Insurance Company policy of municipal insurance insuring the payment of the principal of and interest on the Bonds, and evidence of the rating of Moody' s Investor ' s Service, Inc. , of "Aaa" and of Standard & Poor' s Corporation of "AAA" on the Bonds delivered in a form acceptable to the Underwriter; and -8- (11) Such additional legal opinions, certificates, instruments and other documents as Bond Counsel or the Underwriter may reasonably request to evidence the truth, accuracy and completeness , as of the date hereof and as of the date of Closing, of the City' s representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance and satisfaction by the City at or prior to the date of Closing of all agreements then to be performed and all conditions then to be satisfied by the City. All of the opinions, letters, certificates , instruments and other documents mentioned above or elsewhere in this Bond Purchase Agreement shall be deemed to be in compliance with the provisions hereof if, but only if, they are satisfactory to the Underwriter. 8 . Termination. A. If the City shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, to accept delivery of, and to pay for the Bonds as set forth in this Bond Purchase Agreement, or if the obligations of the Underwriter to purchase, to accept delivery of, and to pay for the Bonds shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate, and neither the Underwriter nor the City shall be under further obligation hereunder, except that the respective obligations of the City and the Underwriter set forth in Paragraphs 9 . and 11 . shall continue in full force and effect. B. The Underwriter may terminate its obligation to purchase at any time before the Closing if any of the following should occur: (1) (a) Legislation (including any amendment thereto) shall have been introduced in or adopted by either House of the Congress of the United States, or recommended to the Congress for passage by the President of the United States or favorably reported for passage to either House of the Congress by any Committee of such House, or (b) a decision shall have been rendered by a court established under Article III of the Constitution of the United States or by the United States Tax Court, or (c) an order, ruling or regulation shall have been issued or proposed by or on behalf of the Treasury Department of the United States, or by the Internal Revenue Service, the effect of which, in any such case described in clause (a) , (b) or (c) , would be to impose, directly or indirectly, federal income taxation upon interest received on -9- obligations of the general character of the Bonds or upon income of the general character to be derived by the City, other than as imposed on the Bonds and income therefrom under the federal tax laws in effect on the date hereof, in such a manner as in the judgment of the Underwriter would materially impair the marketability or materially reduce the market price of obligations of the general character of the Bonds. (2) Any action shall have been taken by the Securities and Exchange Commission or by a court which would require registration of any security under the Securities Act of 1933 , as amended, or qualification of any indenture under the Trust Indenture Act of 1939 , as amended, in connection with the public offering of the Bonds , or any action shall have been taken by any court or by any governmental authority suspending the use of the Official Statement or any amendment or supplement thereto, or any proceeding for that purpose shall have been initiated or threatened in any such court or by any such authority. (3) (a) The Constitution of the State of Texas shall be amended or an amendment shall be proposed, or (b) legislation shall be enacted, or (c) a decision shall have been rendered as to matters of Texas law, or (d) any order, ruling or regulation shall have been issued or proposed by or on behalf of the State of Texas by an official, agency or department thereof, affecting the tax status of the City, its property or income, its bonds (including the Bonds) or the interest thereon, which in the judgment of the Underwriter would materially affect the market price of the Bonds. (4) (a) A general suspension of trading in securities shall have occurred on the New York Stock Exchange, or (b) the United States shall have become engaged in hostilities which have resulted in the declaration, on or after the date of this Bond Purchase Agreement, of a national emergency or war, the effect of which, in either case described in clause (a) and (b) , is, in the judgment of the Underwriter, so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Bonds on the terms and in the manner contemplated in this Bond Purchase Agreement and the Official Statement. (5) An event described in Paragraph 5 .L. hereof occurs which, in the opinion of the Underwriter, requires a supplement or amendment to the Official Statement. -10- (6) A general banking moratorium shall have been declared by authorities of the United States, the State of New York or the State of Texas. (7) A lowering of the ratings of "Aaa" and "AAA" initially assigned to the Bonds by Moody' s Investors Service, Inc . and Standard & Poor ' s Corporation, respectively, shall occur prior to Closing. (8) Any event occurs which prevents the United States Treasury Department from delivering on the Closing Date the State and Local Government Securities subscribed for by the City to fund the Escrow Fund pursuant to the Escrow Agreement in connection with the issuance of the Bonds. (9) Failure to provide, within seven business days of the date hereof, an Official Statement in form and substance satisfactory to the Underwriter. 9 . Expenses. A. The Underwriter shall be under no obligation to pay, and the City shall pay, any expenses incident to the performance of the City' s obligations hereunder, including but not limited to: (1) the cost of the preparation, printing and distribution of the Official Statement; (2) the cost of the preparation and printing of the Bonds; (3) the fees and expenses of Bond Counsel to the City; (4) the fees and disbursements of the City' s accountants , advisors , and of any other experts or consultants retained by the City; and (5) fees and premiums for the policy of municipal bond insurance and for bond ratings and any travel or other expenses incurred incident thereto. B. The Underwriter shall pay: (1) all advertising expenses of the Underwriter in connection with the offering of the Bonds; (2) the cost of the preparation and printing of all the underwriting documents , including this Bond Purchase Agreement and (3) all other expenses incurred by them in connection with their offering and distribution of the Bonds, including the fees of Counsel to the Underwriter. 10 . Notices . Any notice or other communication to be given to the City under this Bond Purchase Agreement may be given by delivering the same in writing at the address for the City set forth above, and any notice or other communication to be given to the Underwriter under this Bond Purchase Agreement may be given by delivering the same in writing to Rauscher Pierce Refsnes, Inc . , 1001 Fannin, Suite 700 , Houston, Texas 77002 , Attention: Frank S. Ildebrando. -11- 11 . Parties in Interest. This Bond Purchase Agreement is made solely for the benefit of the City and the Underwriter (including the successors or assigns of any Underwriter) , and no other person shall acquire or have any right hereunder or by virtue hereof. The City' s representations, warranties and agreements contained in this Bond Purchase Agreement shall remain operative and in full force and effect, regardless of (a) any investigations made by or on behalf of the Underwriter and (b) delivery of any payment for the Bonds hereunder; and the City' s representations and warranties contained in Paragraph 6 . of this Bond Purchase Agreement shall remain operative and in full force and effect, regardless of any termination of this Bond Purchase Agreement. 12 . Effective Date . This Bond Purchase Agreement shall become effective upon the execution of the acceptance hereof by the Mayor of the City and shall be valid and enforceable as of the time of such acceptance. Very truly yours, RAUSCHER PIERCE REFSNES , INC . Title: Senior Vice President Accepted: This day of September, 1990 By: -�� 72.-0-79 Mayor City of Pearland, Texas (SEAL) Attest71 City Secritary City of Pearland, Texas 90007A/A -12- EXHIBIT A OFFICIAL STATEMENT DATED SEPTEMBER 12. 1990 Ratings: Standard& Poor's Corporation (FGIC) ..."AAA" Moody's Investors Service,Inc. (FGIC) .»"Aaa" See"Municipal Bond Insurance"herein IN THE OPINION OF BOND COUNSEL, INTEREST ON THE BONDS IS EXCLUDABLE FROM GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES UNDER EXISTING LAW AND THE BONDS ARE NOT PRIVATE ACTIVITY BONDS. SEE "TAX MATTERS" FOR A DISCUSSION OF THE OPINION OF BOND COUNSEL,INCLUDING A DESCRIPTION OF ALTERNATIVE MINIMUM TAX CONSEQUENCES FOR CORPORATIONS. NEW ISSUE $7,364,391.80 CITY OF PEARLAND (A political subdivision of the State of Texas located within Brazoria and Harris Counties,Texas) REFUNDING BONDS, SERIES 1990 Interest Accrues from: October 1, 1990 on the Current Interest Bonds Date of delivery on the Capital Appreciation Bonds Interest on the Bonds maturing in the years 2002 through 2007, both inclusive (the "Current Interest Bonds") will accrue from October 1,1990,and will be payable March 1 and September 1 of each year,commencing March 1,1991. Interest on the Bonds maturing in the years 2008 and 2009,both inclusive (the "Capital Appreciation Bonds") will accrue from the date of delivery,will be compounded March 1, 1991 and each September 1 and March 1 thereafter, and will be payable only upon maturity or prior redemption.The Current Interest Bonds and the Capital Appreciation Bonds are collectively referred to herein as the "Bonds" or the "Series 1990 Refunding Bonds". Principal of the Current Interest Bonds and both principal of and interest on the Capital Appreciation Bonds are payable at the corporate trust office of First City,Texas-Houston NA.,Houston,Texas,the paying agent/registrar(the"Registrar"), upon surrender of the Bonds for payment. Interest on the Current Interest Bonds is payable by check dated as of the interest payment date,and mailed by the Registrar to registered owners as shown on the records of the Registrar on the close of business as of the 15th day of the calendar month next preceding each interest payment date (the "Record Date").The Bonds will be issued only in fully registered form. The Current Interest Bonds will be issued in denominations of$5,000 of principal amount or any integral multiple thereof. Capital Appreciation Bonds will be issued in denominations of$5,000 of maturity amount, including both principal and accrued and compounded interest, or any integral multiples thereof. The Bonds are subject to redemption, in whole or in part, prior to their scheduled maturities on September 1,2000, or on any date thereafter, at the option of the City. Upon redemption, the Current Interest Bonds will be payable at a price equal to the principal amount of the Current Interest Bonds or the portions thereof so called for redemption, plus accrued interest to the date of redemption, and the Capital Appreciation Bonds will be payable at 103% of their accreted value on their redemption date. See "APPENDIX C - Table of Accreted Values of Capital Appreciation Bonds." A Municipal Bond New Issue Insurance Policy guaranteeing payment of the principal of and interest on the Obligations described herein on the stated payment dates will be issued by Financial Guaranty Insurance Company. PRINCIPAL AMOUNTS, MATURITIES, INTEREST RATES AND PRICES $6,415,000 CURRENT INTEREST BONDS Principal Maturity Interest Yield to Amount March 1 Rate Maturity(a) $ 315,000 2002(b) 7.10% 7.10% 390,000 2003(b) 7.15 7.15 1,220,000 2004(b) 7.20 7.20 1,315,000 2005(b) 7.25 7.25 1,415,000 2006(b) 7.30 7.30 1,760,000 2007(b) 7.35 7.35 $949,391.80 CAPITAL APPRECIATION BONDS Value Total Maturity Yield to at Issue Payment at March 1 Maturity(c) Date Maturity 2008(b) 7.55% $501,646.60 1,820,000 2009(b) 7.60 447,745.20 1,765,000 RAUSCHER PIERCE REFSNES, INC. (a) The initial yields and prices are established by, and are the sole responsibility of the Underwriter (hereinafter defined) and may subsequently be changed. (b) Subject to optional redemption as described above. (c) Interest compounded semiannually and payable only at maturity or upon prior redemption. The proceeds of the Bonds will be applied to refund certain outstanding bonds of the City of Pearland, Texas (the "City"), and to pay certain costs incurred in connection with the issuance of the Bonds (See "THE BONDS - Sources and Uses of Funds"). The Bonds, when issued, will constitute valid and binding obligations of the City and will be payable solely from the proceeds of an annual ad valorem tax, levied within the limits prescribed by law against taxable property within the City. The Bonds are offered when, as and if issued by the City and accepted by the Underwriter, subject to the approval of the Attorney General of Texas and the approval of certain legal matters by Vinson & Elkins, Houston, Texas, Bond Counsel. Certain legal matters will be passed upon for the Underwriter by Smith, Murdaugh, Little & Bonham, Houston, Texas. See "LEGAL MATTERS." CERTIFICATE OF ASSESSED VALUATION THE STATE OF TEXAS § COUNTIES OF BRAZORIA 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 the City as shown by the duly approved tax rolls for the year 1989 , which are the last approved tax rolls for the City on file in my office, to-wit: WITNESS MY HAND AND THE OFFICIAL SEAL OF THE CITY, this day of September, 1990. :?(C.n/, t) Tax Assessor ollector CITY OF PEARLAND, TEXAS (SEAL) CITY OF PEARLAND REFUNDING BONDS SER. 90 ISSUE DATE: 10/01/90 DELIVERY DATE: 10/11/90 MATURING COUPON INTEREST TOTAL PRESENT VALUE FISCAL YEAR DATES PRINCIPAL PROCEEDS RATE YIELD PRICE AMOUNT DEBT SERVICE @ 7.41276989 TOTAL 3/01/91 6.000 6.000000 100.000000 194,201.04 194,201.04 188,781.05 9/01/91 233,041.25 233,041.25 218,440.99 427,242.29 3/01/92 6.100 6.100000 100.000000 233,041.25 233,041.25 210,634.08 9/01/92 233,041.25 233,041.25 203,106.19 466,082.50 3/01/93 6.200 6.200000 100.000000 233,041.25 233,041.25 195,847.33 9/01/93 233,041.25 233,041.25 188,847.90 466,082.50 3/01/94 6.300 6.300000 100.000000 233,041.25 233,041.25 182,098.62 9/01/94 233,041.25 233,041.25 175,590.56 466,082.50 3/01/95 6.400 6.400000 100.000000 233,041.25 233,041.25 169,315.09 9/01/95 233,041.25 233,041.25 163,263.90 466,082.50 3/01/96 6.500 6.500000 100.000000 233,041.25 233,041.25 157,428.98 9/01/96 233,041.25 233,041.25 151,802.59 466,082.50 3/01/97 6.600 6.600000 100.000000 233,041.25 233,041.25 146,377.29 9/01/97 233,041.25 233,041.25 141,145.88 466,082.50 3/01/98 6.700 6.700000 100.000000 233,041.25 233,041.25 136,101.43 9/01/98 233,041.25 233,041.25 131,237.27 466,082.50 3/01/99 6.800 6.800000 100.000000 233,041.25 233,041.25 126,546.96 9/01/99 233,041.25 233,041.25 122,024.27 466,082.50 3/01/00 6.900 6.900000 100.000000 233,041.25 233,041.25 117,663.22 9/01/00 233,041.25 233,041.25 113,458.03 466,082.50 3/01/01 7.000 7.000000 100.000000 233,041.25 233,041.25 109,403.12 9/01/01 233,041.25 233,041.25 105,493.14 466,082.50 3/01/02 315,000 315,000.00 7.100 7.100000 100.000000 233,041.25 548,041.25 239,220.93 9/01/02 221,858.75 221,858.75 93,380.67 769,900.00 3/01/03 390,000 390,000.00 7.150 7.150000 100.000000 221,858.75 611,858.75 248,328.24 9/01/03 207,916.25 207,916.25 81,368.79 819,775.00 3/01/04 1,220,000 1,220,000.00 7.200 7.200000 100.000000 207,916.25 1,427,916.25 538,848.51 9/01/04 163,996.25 163,996.25 59,674.99 1,591,912.50 3/01/05 1,315,000 1,315,000.00 7.250 7.250000 100.000000 163,996.25 1,478,996.25 518,943.45 9/01/05 116,327.50 116,327.50 39,357.71 1,595,323.75 3/01/06 1,415,000 1,415,000.00 7.300 7.300000 100.000000 116,327.50 1,531,327.50 499,585.76 9/01/06 64,680.00 64,680.00 20,347.29 1,596,007.50 3/01/07 1,760,000 1,760,000.00 7.350 7.350000 100.000000 64,680.00 1,824,680.00 553,500.08 9/01/07 0.00 0.00 0.00 1,824,680.00 3/01/08 1,820,000 501,646.60 7.550000 27.563000 0.00 1,820,000.00 513,323.77 9/01/08 0.00 0.00 0.00 1,820,000.00 3/01/09 1,765,000 447,745.20 7.600000 25.368000 0.00 1,765,000.00 462,864.32 1,765,000.00 10,000,000 7,364,391.80 6,870,666.04 16,870,666.04 7,323,352.41 16,870,666.04 Acc Int -12,946.74 -12,946.74 Totals 10,000,000 7,364,391.80 6,857,719.30 16,857,719.30 TIC (Incl. all expenses) 7.69962690% Average Coupon 6.75141920% TIC (Arbitrage TIC) 7.41276989% Average Life (yrs) 14.08 Bond Years 140,804.09 CITY OF PEARLAND REFUNDING BONDS SER. 85 ISSUE DATE: 9/01/90 DELIVERY DATE: 9/01/90 MATURING STATED TOTAL TOTAL DATES AMOUNT COUPON YIELD INTEREST to MATY to CALL FY TOTAL 9/01/90 3/01/91 260,000 7.250 7.250000 277,306.25 537,306.25 537,306.25 9/01/91 267,881.25 267,881.25 267,881.25 805,187.50 3/01/92 565,000 7.500 7.500000 267,881.25 832,881.25 832,881.25 9/01/92 246,693.75 246,693.75 246,693.75 1,079,575.00 3/01/93 575,000 7.750 7.750000 246,693.75 821,693.75 821,693.75 9/01/93 224,412.50 224,412.50 224,412.50 1,046,106.25 3/01/94 525,000 8.000 8.000000 224,412.50 749,412.50 749,412.50 9/01/94 203,412.50 203,412.50 203,412.50 952,825.00 3/01/95 1,120,000 8.100 8.100000 203,412.50 1,323,412.50 5,073,412.50 9/01/95 158,052.50 158,052.50 1,481,465.00 3/01/96 1,190,000* 8.250 8.250000 158,052.50 1,348,052.50 9/01/96 108,965.00 108,965.00 1,457,017.50 3/01/97 1,280,000* 8.400 8.400000 108,965.00 1,388,965.00 9/01/97 55,205.00 55,205.00 1,444,170.00 3/01/98 415,000* 8.500 8.500000 55,205.00 470,205.00 9/01/98 37,567.50 37,567.50 507,772.50 3/01/99 345,000* 8.600 8.600000 37,567.50 382,567.50 9/01/99 22,732.50 22,732.50 405,300.00 3/01/00 295,000* 8.700 8.700000 22,732.50 317,732.50 9/01/00 9,900.00 9,900.00 327,632.50 3/01/01 225,000* 8.800 8.800000 9,900.00 234,900.00 234,900.00 6,795,000 2,946,951.25 9,741,951.25 8,957,106.25 9,741,951.25 Acc Int 0.00 0.00 0.00 2,946,951.25 9,741,951.25 9,741,951.25 * - These bonds may be called on 3/01/95 is 100.000 NIC = 8.332371% PEAR 09/11/90 OLD85R 13:43:14 CITY OF PEARLAND LESS: DEBT PLUS. REFUNDING BONDS SER. 90 TOTAL YEAR SERVICE ON NEW ENDING CURRENT TOTAL REFUNDED CURRENT INTEREST BONDS COMPOUND DEBT 09/30 DEBT SERVICE BONDS PRINCIPAL INTEREST INT BONDS SERVICE 1991 2,726,810 805,188 427,242 2,348,864 1992 2,720,151 1,079,575 466,083 2,106,659 1993 2,703,823 1,046,106 466,083 2,123,800 1994 2,610,138 952,825 466,083 2,123,396 1995 2,607,700 1,481,465 466,083 1,592,318 1996 2,583,924 1,457,018 466,083 1,592,989 1997 2,600,645 1,444,170 466,083 1,622,558 1998 1,632,173 507,773 466,083 1,590,483 1999 1,532,173 405,300 466,083 1,592,956 2000 1,456,220 327,633 466,083 1,594,670 2001 1,358,996 234,900 466,083 1,590,179 2002 826,688 315,000 454,900 1,596,588 2003 775,313 390,000 429,775 1,595,088 2004 1,220,000 371,913 1,591,913 2005 1,315,000 280,324 1,595,324 2006 1,415,000 181,008 1,596,008 2007 1,760,000 64,680 1,824,680 2008 1,820,000 1,820,000 2009 1,765,000 1,765,000 26,134,754 9,741,953 6,415,000 6,870,672 3,585,000 33,263,473 Prepared by: Rauscher Pierce Refsnes, Inc. 09/11/90 16:07:04 AGG89 OLD85R NEW9OB CITY OF PEARLAND REFUNDING BONDS SER. 90 INTEREST INTEREST PRESENT PRINCIPAL VARIOUS VARIOUS TOTAL TOTAL NEW TOTAL DEBT YEAR ENDING DEBT DUE DUE DUE NEW PRINCIPAL SERVICE TAX RATE TAX RATE 09/30 REQUIREMENT 03/01 03/01 09/01 INTEREST & INTEREST REQUIREMENT NEW TOTAL 1991 1,921,623 194,201 233,041 427,242 427,242 2,348,865 0.07652 0.42069 1992 1,640,576 233,041 233,041 466,083 466,083 2,106,658 0.08348 0.37731 1993 1,657,717 233,041 233,041 466,083 466,083 2,123,799 0.08348 0.38038 1994 1,657,313 233,041 233,041 466,083 466,083 2,123,395 0.08348 0.38031 1995 1,126,235 233,041 233,041 466,083 466,083 1,592,318 0.08348 0.28519 1996 1,126,906 233,041 233,041 466,083 466,083 1,592,989 0.08348 0.28531 1997 1,156,475 233,041 233,041 466,083 466,083 1,622,558 0.08348 0.29061 1998 1,124,400 233,041 233,041 466,083 466,083 1,590,483 0.08348 0.28486 1999 1,126,873 233,041 233,041 466,083 466,083 1,592,955 0.08348 0.28531 2000 1,128,588 233,041 233,041 466,083 466,083 1,594,670 0.08348 0.28561 2001 1,124,096 233,041 233,041 466,083 466,083 1,590,179 0.08348 0.28481 2002 826,688 315,000 233,041 221,859 454,900 769,900 1,596,588 0.13789 0.28596 2003 775,313 390,000 221,859 207,916 429,775 819,775 1,595,088 0.14683 0.28569 2004 1,220,000 207,916 163,996 371,913 1,591,913 1,591,913 0.28512 0.28512 2005 1,315,000 163,996 116,328 280,324 1,595,324 1,595,324 0.28573 0.28573 2006 1,415,000 116,328 64,680 181,008 1,596,008 1,596,008 0.28585 0.28585 2007 1,760,000 64,680 64,680 1,824,680 1,824,680 0.32681 0.32681 2008 1,820,000 1,820,000 1,820,000 0.32597 0.32597 2009 1,765,000 1,765,000 1,765,000 0.31612 0.31612 S16,392,803 S10,000,000 S3,532,431 S3,338,230 $6,870,672 S16,870,672 S33,263,470 DATED: 10/01/90 DUE: 3/01/91 - 3/01/09 FIRST COUPON: 3/01/91 Assessed Valuation = 575,600,000 Tax Collection Rate = 97.000% Assessed Valuation Growth = 0.000% Prepared by: Rauscher Pierce Refsnes, Inc. 09/11/90 NEW9OB AGG99A CITY OF PEARLAND PUBLIC IMPROVMENT BONDS SER 91 INTEREST INTEREST PRESENT PRINCIPAL a 7.250% a 7.250% TOTAL TOTAL NEW TOTAL DEBT YEAR ENDING DEBT DUE DUE DUE NEW PRINCIPAL SERVICE TAX RATE TAX RATE 09/30 REQUIREMENT 03/01 03/01 09/01 INTEREST & INTEREST REQUIREMENT NEW TOTAL 1991 2,348,865 2,348,865 0.00000 0.42069 1992 2,106,658 169,167 72,500 241,667 241,667 2,348,325 0.04328 0.42060 1993 2,123,799 85,000 72,500 69,419 141,919 226,919 2,350,718 0.04064 0.42103 1994 2,123,395 90,000 69,419 66,156 135,575 225,575 2,348,970 0.04040 0.42071 1995 1,592,318 100,000 66,156 62,531 128,688 228,688 1,821,005 0.04096 0.32615 1996 1,592,989 110,000 62,531 58,544 121,075 231,075 1,824,064 0.04139 0.32670 1997 1,622,558 85,000 58,544 55,463 114,006 199,006 1,821,564 0.03564 0.32625 1998 1,590,483 130,000 55,463 50,750 106,213 236,213 1,826,695 0.04231 0.32717 1999 1,592,955 135,000 50,750 45,856 96,606 231,606 1,824,561 0.04148 0.32679 2000 1,594,670 145,000 45,856 40,600 86,456 231,456 1,826,126 0.04145 0.32707 2001 1,590,179 160,000 40,600 34,800 75,400 235,400 1,825,579 0.04216 0.32697 2002 1,596,588 165,000 34,800 28,819 63,619 228,619 1,825,206 0.04095 0.32690 2003 1,595,088 175,000 28,819 22,475 51,294 226,294 1,821,381 0.04053 0.32622 2004 1,591,913 195,000 22,475 15,406 37,881 232,881 1,824,794 0.04171 0.32683 2005 1,595,324 205,000 15,406 7,975 23,381 228,381 1,823,705 0.04090 0.32663 2006 1,596,008 220,000 7,975 7,975 227,975 1,823,983 0.04083 0.32668 2007 1,824,680 1,824,680 0.00000 0.32681 2008 1,820,000 1,820,000 0.00000 0.32597 2009 1,765,000 1,765,000 0.00000 0.31612 $33,263,470 $2,000,000 $800,461 $631,294 $1,431,755 $3,431,755 $36,695,221 DATED: 1/01/91 DUE: 3/01/92 - 3/01/06 FIRST COUPON: 3/01/92 Assessed Valuation = 575,600,000 Tax Collection Rate = 97.000% Assessed Valuation Growth = 0.000% Prepared by: Rauscher Pierce Refsnes, Inc. NEW91 09/11/90 AGG99B CITY OF PEARLAND PUBLIC IMPROVMENT BONDS SER 95 INTEREST INTEREST PRESENT PRINCIPAL a 7.250% a 7.250% TOTAL TOTAL NEW TOTAL DEBT YEAR ENDING DEBT DUE DUE DUE NEW PRINCIPAL SERVICE TAX RATE TAX RATE 09/30 REQUIREMENT 03/01 03/01 09/01 INTEREST & INTEREST REQUIREMENT NEW TOTAL 1991 2,348,865 2,348,865 0.00000 0.42069 1992 2,348,325 2,348,325 0.00000 0.42060 1993 2,350,718 2,350,718 0.00000 0.42103 1994 2,348,970 2,348,970 0.00000 0.42071 1995 1,821,005 170,000 181,250 175,088 356,338 526,338 2,347,343 0.09427 0.42042 1996 1,824,064 185,000 175,088 168,381 343,469 528,469 2,352,533 0.09465 0.42135 1997 1,821,564 200,000 168,381 161,131 329,513 529,513 2,351,076 0.09484 0.42109 1998 1,826,695 215,000 161,131 153,338 314,469 529,469 2,356,164 0.09483 0.42200 1999 1,824,561 230,000 153,338 145,000 298,338 528,338 2,352,899 0.09463 0.42142 2000 1,826,126 245,000 145,000 136,119 281,119 526,119 2,352,245 0.09423 0.42130 2001 1,825,579 265,000 136,119 126,513 262,631 527,631 2,353,210 0.09450 0.42147 2002 1,825,206 285,000 126,513 116,181 242,694 527,694 2,352,900 0.09451 0.42142 2003 1,821,381 305,000 116,181 105,125 221,306 526,306 2,347,688 0.09426 0.42048 2004 1,824,794 330,000 105,125 93,163 198,288 528,288 2,353,081 0.09462 0.42145 2005 1,823,705 355,000 93,163 80,294 173,456 528,456 2,352,161 0.09465 0.42128 2006 1,823,983 380,000 80,294 66,519 146,813 526,813 2,350,795 0.09435 0.42104 2007 1,824,680 410,000 66,519 51,656 118,175 528,175 2,352,855 0.09460 0.42141 2008 1,820,000 440,000 51,656 35,706 87,363 527,363 2,347,363 0.09445 0.42042 2009 1,765,000 475,000 35,706 18,488 54,194 529,194 2,294,194 0.09478 0.41090 2010 510,000 18,488 18,488 528,488 528,488 0.09465 0.09465 $36,695,221 $5,000,000 $1,813,952 $1,632,702 $3,446,654 $8,446,654 $45,141,873 DATED: 9/01/94 DUE: 3/01/95 - 3/01/10 FIRST COUPON: 3/01/95 Assessed Valuation = 575,600,000 Tax Collection Rate = 97.000% Assessed Valuation Growth = 0.000% Prepared by: Rauscher Pierce Refsnes, Inc. 09/11/90 NEW95 AGG99C EXHIBIT "A" ESCROW AGREEMENT THIS ESCROW AGREEMENT (the "Escrow Agreement") dated for convenience September 12, 1990, but effective on the Escrow Funding Date described herein, is made and entered into by and between the City of Pearland, Texas, an incorporated city of the State of Texas (the "City") , and First City, Texas-Houston, N.A. , Houston, Texas (the "Escrow Agent") . WHEREAS, the City has heretofore issued and there remain outstanding the City's Refunding Bonds Series 1985, dated August 15, 1985; and WHEREAS, the City desires to refund in advance of maturity a portion of such bonds in the total aggregate principal amount of $6, 170, 000 (the "Refunded Bonds") ; and WHEREAS, Article 717k, Vernon's Texas Civil Statues, as amended, authorizes and empowers the City to deposit the proceeds of refunding bonds payable from ad valorem taxes of the City, together with other available funds or resources, with any place of payment for the Refunded Bonds in an amount which is sufficient to provide for the payment or redemption of the principal of and interest on the Refunded Bonds; and WHEREAS, the City Council of the City has adopted an ordinance authorizing the issuance of the City's Refunding Bonds, Series 1990, in the aggregate principal amount of $ (the "Refunding Bonds") , for the purpose of providing the funds necessary to refund the Refunded Bonds; and WHEREAS, the City Council of the City has further determined to effectuate the advance refunding of the Refunded Bonds pursuant to this Escrow Agreement, under which provision is made for the safekeeping, investment, reinvestment, administration and disposition of the proceeds of the Refunding Bonds, so as to provide firm banking and financial arrangements for the discharge and final payment or redemption of the Refunded Bonds; NOW, THEREFORE, in consideration of the mutual undertakings, promises and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to secure the full and timely payment of the principal of and the interest on the Refunded Bonds, the City and the Escrow Agent contract and agree as follows: ARTICLE I DEFINITIONS AND INTERPRETATIONS Section 1. 01. Definitions. Unless otherwise expressly provided or unless the context clearly requires otherwise, the following terms shall have the respective meanings specified below for all purposes of this Escrow Agreement: "City" shall mean the City of Pearland, Texas, and any successor to its duties and functions. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the applicable regulations thereunder and under the Internal Revenue Code of 1954 . "Escrow Agent" shall mean First City, Texas-Houston, N.A. , in its capacity as escrow agent hereunder, and any successor or assign in such capacity. "Escrow Agreement" shall mean this escrow agreement by and between the City and the Escrow Agent. "Escrow Fund" shall mean the fund created in Section 3 . 01 of this Escrow Agreement to be administered by the Escrow Agent pursuant to the provisions of this Escrow Agreement. "Escrow Funding Date" shall mean the date on which the City deposits with the Escrow Agent the cash and Escrowed Securities described in Section 2 . 01. "Escrowed Securities" shall mean the United States Treasury Securities, State and Local Government Series, initially purchased with proceeds of the Refunding Bonds, all as more fully described in the Report. "Paying Agent for the Refunded Bonds" shall mean First City, Texas-Houston, N.A. , Houston, Texas (formerly First City National Bank of Houston, Houston, Texas) . "Refunded Bond Ordinance" shall mean the City' s ordinance authorizing the issuance, sale and delivery of the Refunded Bonds. "Refunded Bonds" shall mean the City' s Refunding Bonds, Series 1985, dated August 15, 1985, in the aggregate principal amount of $6, 170, 000, maturing on March 1 in the following years and amounts: -2- 1991 $ 230, 000 1992 520,000 1993 530,000 1994 475,000 1995 1,065,000 1996 1, 130,000 1997 1,250,000 1998 350,000 1999 270, 000 2000 215, 000 2001 135,000 "Refunding Bonds" shall mean the City's Refunding Bonds, Series 1990, dated October 1, 1990, in the initial aggregate principal amount of $ "Refunding Bond Ordinance" shall mean the City's Ordinance adopted September 12, 1990, authorizing the issuance, sale and delivery of the Refunding Bonds. "Report" shall mean the verification report prepared by relating to the advance refunding of the Refunded Bonds, a copy of which is attached hereto as Exhibit A, and any subsequent report required by Section 4 .02 . Section 1. 02. Interpretations. The titles and headings of the articles and sections of this Escrow Agreement have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict the terms hereof. This Escrow Agreement and all of the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to achieve the intended purpose of providing for the refunding of the Refunded Bonds in accordance with applicable law. ARTICLE II DEPOSIT OF FUNDS AND ESCROWED SECURITIES Section 2.01. Deposits with Escrow Agent; Acquisition of Escrowed Securities. On the Escrow Funding Date there will be deposited, with the Escrow Agent the following: (a). Escrowed Securities in the principal amount of $ , purchased with proceeds of the Refunding Bonds; and (b) A beginning cash balance of $ . -3- ARTICLE III CREATION AND OPERATION OF ESCROW FUND Section 3 . 01. Escrow Fund. On the Escrow Funding Date the Escrow Agent will create on its books a special fund and irrevocable escrow to be known as the City of Pearland, Texas, Refunding Bonds, Series 1990 Escrow Fund, into which will be deposited the Escrowed Securities described in Section 2 . 01. The Escrowed Securities, all proceeds therefrom and all cash balances from time to time on deposit in the Escrow Fund shall be the property of the Escrow Fund, and shall be applied only in strict conformity with the terms and conditions hereof. The Escrowed Securities, all proceeds therefrom and all cash balances from time to time on deposit in the Escrow Fund are hereby irrevocably pledged to the payment of the principal of and interest on the Refunded Bonds, which payment shall be made by timely transfers to the Paying Agent for the Refunded Bonds of such amounts at such times as are provided in Section 3. 02 hereof. When the final transfers have been made to the Paying Agent for the Refunded Bonds for the payment of such principal of and interest on the Refunded Bonds, any balance then remaining in the Escrow Fund shall be transferred to the City, and the Escrow Agent shall thereupon be discharged from any further duties hereunder. Section 3 . 02 . Payment of Principal of and Interest on Refunded Bonds. (a) The Escrow Agent is hereby irrevocably instructed to transfer to the Paying Agent for the Refunded Bonds from the cash balance from time to time on deposit in the Escrow Fund the amounts required to pay the principal of and interest on the Refunded Bonds as the same become due and payable, all as provided in the Report. (b) Money transferred to and held by the Paying Agent for the Refunded Bonds in accordance with the provisions hereof shall be held by the Paying Agent for the Refunded Bonds as a separate trust fund for the account of the respective holders of the Refunded Bonds in connection with which such money is held; provided, however, that money so held remaining unclaimed by the owners of such Refunded Bonds for three (3) years after the dates on which payment thereon was due, shall be reported and disposed of in accordance with the provisions of Texas law including, to the extent applicable, Title 6 of the Texas Property Code, as amended. Section 3 . 03 . Sufficiency of Escrow Fund. The City represents (based solely upon the Report) that the successive receipts of the principal of and interest on the Escrowed Securities will assure that the cash balance on deposit from time to time in the Escrow Fund will be at all times sufficient to provide money for transfer to the Paying Agent for the Refunded -4- Bonds at the times and in the amounts required to pay the interest on the Refunded Bonds as such interest comes due and to pay the principal of the Refunded Bonds as the Refunded Bonds mature or are redeemed. Section 3.04 . Escrow Fund. The Escrow Agent at all times shall hold the Escrow Fund, the Escrowed Securities and all other assets of the Escrow Fund wholly segregated from all other funds and securities on deposit with the Escrow Agent; it shall never allow the Escrowed Securities or any other assets of the Escrow Fund to be commingled with any other funds or securities of the Escrow Agent; and it shall hold and dispose of the assets of the Escrow Fund only as set forth herein. The Escrowed Securities and other assets of the Escrow Fund always shall be maintained by the Escrow Agent for the benefit of the holders of the Refunded Bonds; and a special account therefor evidencing such fact shall be maintained at all times on the books of the Escrow Agent. The holders of the Refunded Bonds shall be entitled to the same preferred claim and first lien upon the Escrowed Securities, the proceeds thereof and all other assets of the Escrow Fund as are enjoyed by other beneficiaries of similar accounts. The amounts received by the Escrow Agent under this Escrow Agreement shall not be considered as a banking deposit by the City, and the Escrow Agent shall have no right or title with respect thereto except as escrow agent under the terms hereof. The amounts received by the Escrow Agent hereunder shall not be subject to warrants, drafts or checks drawn by the City. Section 3 .05. Security for Cash Balances. Cash balances from time to time on deposit in the Escrow Fund, to the extent not insured by the Federal Deposit Insurance Corporation or its successor, shall be continuously secured by a pledge of direct obligations of, or obligations unconditionally guaranteed by, the United States of America, held by an independent third party, and having a market value at least equal to such cash balances. ARTICLE IV REDEMPTION OF CERTAIN REFUNDED BONDS PRIOR TO MATURITY Section 4 .01. Optional Redemption. The City has irrevocably exercised its option to call the Refunded Bonds described below for redemption prior to maturity on March 1, 1995, at a price of par plus accrued interest to the date fixed for redemption, as set forth below. Such optional redemption shall be carried out by the Paying Agent for the Refunded Bonds in accordance with the Refunded Bond Ordinance. The Escrow Agent is hereby authorized to provide funds therefor as set forth in Section 3 . 02 (a) hereof. -5- Maturity Date Amount Redeemed March 1, 1996 $1, 130, 000 March 1, 1997 1,250, 000 March 1, 1998 350, 000 March 1, 1999 270,000 March 1, 2000 215, 000 March 1, 2001 135, 000 ARTICLE V LIMITATION ON INVESTMENTS Section 5.01. General. Except as herein otherwise expressly provided, the Escrow Agent shall not have any power or duty to invest any money held hereunder; or to make substitutions of the Escrowed Securities; or to sell, transfer or otherwise dispose of the Escrowed Securities. Section 5. 02 . Substitution of Securities. At the written request of the City, and upon compliance with the conditions hereinafter stated, the Escrow Agent shall sell, transfer, otherwise dispose of or request the redemption of all or any portion of the Escrowed Securities and apply the proceeds therefrom to purchase non-callable direct obligations of the United States of America and which do not permit the redemption thereof at the option of the obligor. Any such transaction may be effected by the Escrow Agent only if (1) the Escrow Agent shall have received a written opinion from a nationally recognized firm of certified public accountants acceptable to the City and the Escrow Agent that such transaction will not cause the amount of money and securities in the Escrow Fund to be reduced below an amount which will be sufficient, when added to the interest to accrue thereon, to provide for the payment of principal and interest on the remaining Refunded Bonds as they become due, and (2) the Escrow Agent shall have received the unqualified written legal opinion of nationally recognized bond counsel or tax counsel acceptable to the City and the Escrow Agent to the effect that (i) such transaction will not adversely affect the tax-exempt status of the Bonds or the Refunded Bonds, and (ii) that such transaction complies with the Constitution and laws of the State of Texas and with all relevant documents relating to the issuance of the Refunded Bonds and the Refunding Bonds. ARTICLE VI RECORDS AND REPORTS Section 6. 01. Records. The Escrow Agent shall keep books of record and account in which complete and correct entries shall be made of all transactions relating to the receipts, disbursements, -6- allocations and application of the money and Escrowed Securities deposited to the Escrow Fund and all proceeds thereof, and such books shall be available for inspection at reasonable hours and under reasonable conditions by the City and the holders of the Refunded Bonds. Section 6.02. Reports. For the period beginning on the Escrow Funding Date and ending on , 199_, and for each twelve (12) month period thereafter while this Agreement remains in effect, the Escrow Agent shall prepare and send to the City, at the City's request, within thirty (30) days following the end of such period a written report summarizing all transactions relating to the Escrow Fund during such period, including, without limitation, credits to the Escrow Fund as a result of interest payments on or maturities of the Escrowed Securities and transfers from the Escrow Fund to the Paying Agent for the Refunded Bonds or otherwise, together with a detailed statement of all Escrowed Securities and the cash balance on deposit in the Escrow Fund as of the end of such period. Section 6.03 . Notification. The Escrow Agent shall notify the City immediately if at any time during the term of this agreement it determines that there is insufficient cash and Escrowed Securities in the Escrow Fund to provide for the transfer to the Paying Agents for the Refunded Bonds for timely payment of all interest on and principal of the Refunded Bonds. ARTICLE VII CONCERNING THE ESCROW AGENT Section 7 .01. Representations. The Escrow Agent hereby represents that it has all necessary power and authority to enter into this Escrow Agreement and undertake the obligations and responsibilities imposed upon it herein, and that it will carry out all of its obligations hereunder. Section 7 .02 . Limitation on Liability. The Escrow Agent shall not be liable for any action taken or neglected to be taken in good faith in the exercise of reasonable care and believed to be within the discretion or power conferred by this Escrow Agreement, nor shall it be responsible for the consequences of any error of judgment; and it shall not be answerable except for its own neglect or default, nor for any loss unless the same shall have been through its negligence or want of good faith. The liability of the Escrow Agent to transfer funds to the Paying Agent for the Refunded Bonds for the payments of the principal of and interest on the Refunded Bonds shall be limited to the proceeds of the Escrowed Securities and the cash balances -7- from time to time on deposit in the Escrow Fund. Notwithstanding any provision contained herein to the contrary, the Escrow Agent shall have no liability whatsoever for the insufficiency of funds from time to time in the Escrow Fund or any failure of the obligor of the Escrowed Securities to make timely payment thereon, except for the obligation to notify the City promptly of any such occurrence. The recitals herein and in the proceedings authorizing the Refunding Bonds shall be taken as the statements of the City and shall not be considered as made by, or imposing any obligation or liability upon, the Escrow Agent. In its capacity as Escrow Agent, it is agreed that the Escrow Agent need look only to the terms and provisions of this Escrow Agreement. The Escrow Agent makes no representation as to the value, condition or sufficiency of the Escrow Fund, or any part thereof, or as to the title of the City thereto, or as to the security afforded thereby or hereby, and the Escrow Agent shall incur no liability or responsibility with respect to any of such matters. It is the intention of the City and the Escrow Agent that the Escrow Agent shall never be required to use or advance its own funds or otherwise incur personal financial liability in the performance of any of its duties or the exercise of any of its rights and powers hereunder. Unless it is specifically provided otherwise herein, the Escrow Agent has no duty to determine or inquire into the happening or occurrence of any event or contingency or the performance or failure of performance of the City with respect to arrangements or contracts with others, with the Escrow Agent's sole duty hereunder being to safeguard the Escrow Fund and to dispose of and deliver the same in accordance with this Escrow Agreement. If, however, the Escrow Agent is called upon by the terms of this Escrow Agreement to determine the occurrence of any event or contingency, the Escrow Agent shall be obligated, in making such determination, only to exercise reasonable care and diligence, and in event of error in making such determination the Escrow Agent shall be liable only for its own misconduct or its negligence. In determining the occurrence of any such event or contingency the Escrow Agent may request from the City or any other person such reasonable additional evidence as the Escrow Agent in its discretion may deem necessary to determine any fact relating to the occurrence of such event or contingency, and in this connection may make inquiries of, and consult with the City, among others, at any time. Section 7 . 03 . Compensation. (a) On the Escrow Funding Date the City will pay the Escrow Agent, as a fee for performing the services hereunder and for all expenses incurred or to be incurred -8- by the Escrow Agent in the administration of this Escrow Agreement, and for its services in its capacity as a Paying Agent for the Refunded Bonds, the sum of $ . If the Escrow Agent is requested to perform any extraordinary services hereunder, the City hereby agrees to pay reasonable fees to the Escrow Agent for such extraordinary services and to reimburse the Escrow Agent for all expenses incurred by the Escrow Agent in performing such extraordinary services. It is expressly provided that the Escrow Agent shall look only to the City for the payment of such additional fees and reimbursement of such additional expenses. The Escrow Agent hereby agrees that in no event shall it ever assert any claim or lien against the Escrow Fund for any fees for its services, whether regular, additional or extraordinary, as Escrow Agent, or in any other capacity, or for reimbursement for any of its expenses. Section 7.04. Successor Escrow Agents. If it any time the Escrow Agent or its legal successor or successors should cease to be the Escrow Agent hereunder, a vacancy shall forthwith exist hereunder in the office of the Escrow Agent. Any successor Escrow Agent appointed by the City shall succeed, without further act, to all the rights, immunities, powers and trusts of the predecessor Escrow Agent hereunder. Upon the request of any such successor Escrow Agent, the City shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor Escrow Agent all such immunities, rights, powers and duties. The Escrow Agent shall pay over to its successor Escrow Agent a proportional part of the Escrow Agent's fee hereunder equal to the portion of such fee attributable to duties to be performed after the date of succession. The Escrow Agent at the time acting hereunder may at any time resign and be discharged from the trust hereby created by giving not less than sixty (60) days written notice to the City and publishing notice thereof, specifying the date when such resignation will take effect, in a newspaper printed in the English language and with general circulation in New York, New York, such publication to be made at least once a week for three (3) . consecutive calendar weeks prior to the date when the resignation is to take effect. No such resignation shall take effect unless a successor Escrow Agent shall have been appointed by the holders of the Refunded Bonds or by the City as herein provided and such successor Escrow Agent shall have accepted such appointment, in which event such resignation shall take effect immediately upon the appointment and acceptance of a successor Escrow Agent. • -9- ARTICLE VIII MISCELLANEOUS Section 8 . 01. Notices. Any notice, authorization, request, or demand required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when mailed by registered or certified mail, postage prepaid addressed as follows: To the Escrow Agent: First City, Texas-Houston, N.A. P. O. Box 809 Houston, TX 77001 Attention: Corporate Trust Department To the City: City of Pearland P. O. Box 1157 Pearland, TX 77581 Attention: Mayor The United States Post Office registered or certified mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date and fact of delivery. Any party hereto may change the address to which notices are to be delivered by giving to the other parties not less than ten days prior notice thereof. Section 8. 02 . Termination of Escrow Agent' s Obligations. Upon the taking by the Escrow Agent of all the actions as described herein, the Escrow Agent shall have no further obligations or responsibilities hereunder to the City, the holders of the Refunded Bonds or to any other person or persons in connection with this Escrow Agreement. Section 8 . 03 . Binding Agreement. This Escrow Agreement shall be binding upon the City, and the Escrow Agent and their respective successors and legal representatives, and shall lure solely to the benefit of the holders of the Refunded Bonds, the City, the Escrow Agent and their respective successors and legal representatives. Section 8 . 04 . Severability. In case any one or more of the provisions contained in this Escrow Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Escrow Agreement, but this Escrow Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. -10- section 8.05. Governing Law. This Escrow Agreement shall be governed exclusively by the provisions hereof and by the applicable laws of the State of Texas. section 8.06. Time of Essence. Time shall be of the essence in the performance of obligations from time to time imposed upon the Escrow Agent by this Escrow Agreement. Executed as of September 12, 1990, but effective as set forth herein. CITY OF PEARLAND, TEXAS - I/ Mayor ATTEST: City Secretary (SEAL) FIRST CITY, TEXAS-HOUSTON, N.A. as Escrow Agent By: Title: ATTEST: By: Title: (SEAL) -11- DRAFT V I N S O N & E L K I N S 8/30/90 ATTORNEYS AT LAW THE WILLARD OFFICE BUILDING 1453 PENN$YLVANIA AV E. N W 3300 FIRST CITY TOWER FIRST CITY CENTRE B16 CONGRESS AVEN_f WASHINGTON,D.C. 20004-1007 1001 FANNIN AUSTIN,TEXAS 78701-2496 :iicGwGv: 'G2539-6ToO TELEx B9660 HOUSTON, TEXAS 7i002-6760 TELEPHONE 512 ♦9S TELEPHONE 713 651-2222 1ELEx 762u6 47 CHA-,LES ST.. BERKELEY SQUARE 3700 TRANMELL CROW CE%-ER LONDON WIX 7PB. ENGLAND 2001 ROSS AVENUE TELEPHONE OII 44 1491 7236 DALLAS,TEXAS 75201-2916 CABLE VINELAINS LONDON WI TELEX 24140 TELEPHONE 214 220-7'00 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, REFUNDING BONDS, SERIES 1990, dated October 1, 1990, in the principal amount of The Bonds mature, 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, 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, and the bonds being refunded, on which we have relied in giving our opinion. The transcript contains certified copies of certain proceedings of the City, First City, Texas-Houston, N.A. , Houston, Texas (the "Escrow Agent") ; the report of , Certified Public Accountants, verifying the sufficiency of the deposits made with the Escrow Agent for defeasance of the bonds being refunded and the mathematical accuracy of certain computations of the yield on the Bonds and obligations acquired with the proceeds of the Bonds; customary certificates of officers, agents and representatives of the Escrow Agent, the City, and other public officials; and other certified showings relating to the authorization and issuance of the Bonds and the firm banking and financial arrangements for the discharge and final payment of the bonds being refunded. We have also examined executed Bond Nos. R-1 and CR-1 of this issue. BASED ON SUCH EXAMINATION, IT IS OUR OPINION that: (1) 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 presently effective and that therefore the Bonds constitute valid and legally binding obligations of the City; (2) Firm banking and financial arrangements have been made for the discharge and final payment of the bonds being refunded pursuant to an Escrow Agreement entered into between the City and the Escrow Agent on the date of delivery of the Bonds, and that therefore such bonds are deemed to be fully paid and no longer outstanding except for the purpose of being paid from the funds provided therefor in such Escrow Agreement; and (3) Taxable property in the City is subject to the levy of ad valorem taxes, within the limits prescribed by law, to pay the Bonds and the interest thereon. 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 generally, 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 owners for federal income tax purposes under existing law; and (2) The Bonds are not "private activity bonds" within the meaning of the Internal Revenue Code of 1986 (the "Code") , and interest on the Bonds is not subject to the alternative minimum tax on individuals and corporations under existing law, except that such interest will be included in a corporate taxpayer's "adjusted net book income" or "adjusted current earnings" for purposes of computing its alternative minimum tax and its Superfund "environmental tax" liability. In providing such opinions, we have relied on representations 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 provisions of the Ordinance, interest on the Bonds could become includable in gross income from the date of original delivery, regardless of the date on which the event causing such inclusion occurs. 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, 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 U.S. may be subject to the "branch profits tax" on their effectively-connected earnings and profits (including tax-exempt interest such as interest on the Bonds) . VINSON & ELKINS I HEREBY CERTIFY that the above and foregoing is a true and correct copy of the legal opinion upon the bonds therein described which was manually signed by Vinson & Elkins, Houston, Texas, and was dated as of the date of delivery of and payment for said bonds. (Facsimile signature) City Secretary City of Pearland, Texas N Fj v/, CIFY OF PEARLAND (/A/J�� j (J LESS: DEBT PLUS. REFUNDING BONDS SER. 90 TOTAL YEAR SERVICE ON NEW I ENDING CURRENT TOTAL REFUNDED CURRENT INTEREST BONDS COMPOUND DEBT 09/30 DEBT SERVICE BONDS PRINCIPAL INTEREST INT BONDS SERVICE1.7 f. 1991 2,726,810 755,545 45,000 329,468 2,345,733 1992 2,720,151 986,620 45,000 326,745 2,105,276 .J1 1993 2,703,823 956,583 45,000 323,978 2,116,218 c 1994 2,610,138 862,045 50,000 321,008 2,119,101 1. 1995 2,607,700 1,389,913 55,000 317,673 1,590,460 1996 2,583,924 1,365,168 55,000 314,125 1,587,881 f' 1997 2,600,645 1,386,055 60,000 310,358 1,584,948 1998 1,632,173 �418,680 65,000 306,200 1,584,693 1 1999 1,532,173 312,195 70,000 301,643 1,591,621 1 2000 1,456,220 236,233 75,000 296,675 1,591,662 2001 1,358,996 140,940 80,000 291,288 1,589,344 2002 826,688 490,000 271,215 1,587,903 2003 775,313 585,000 233,175 1,593,488 2004 1,425,000 161,464 1,586,464 2005 1,535,000 55,260 1,590,260 2006 1,590,000 1,590,000 2007 1,815,000 1,815,000 200B 1,820,000 1,820,000 2009 1,525,000 1,525,000 26,134,754 8,809,977 4,680,000 4,160,275 6,750,000 32,915,052 Prepared by: Rauscher Pierce Refsnes, Inc. 08/02/90 11:26:43 AGG89 OLD85R NEW9OB CITY OF PEARIAND REFUNDING BONDS SER. 90 I INTEREST INTEREST `' PRESENT PRINCIPAL VARIOUS VARIOUS TOTAL TOTAL NEW TOTAL DEBT i YEAR ENDING DEBT DUE DUE DUE NEW PRINCIPAL SERVICE TAX RATE TAX RATE I' 09/30 REQUIREMENT 03/01 03/01 09/01 INTEREST 8 INTEREST REQUIREMENT NEW TOTAL r 1991 1,971,265 45,000 165,409 164,059 329,468 374,468 2,345,733 0.06707 0.42013 1-- 1992 1,733,531 45,000 164,059 162,686 326,745 371,745 2,105,276 0.06658 0.37707 .., 1993 1,747,241 45,000 162,686 161,291 323,978 368,978 2,116,218 0.06609 0.37903 F. ., 1994 1,748,093 50,000 161,291 159,716 321,008 371,008 2,119,100 0.06645 0.37954 q 1995 1,217,788 55,000 159,716 157,956 317,673 372,673 1,590,460 0.06675 0.28486 7 1996 1,218,756 55,000 157,956 156,169 314,125 369,125 1,587,881 0.06611 0.28440 Z 1997 1,214,590 60,000 156,169 154,189 310,358 370,358 1,584,948 0.06633 0.28387 I 1998 1,213,493 65,000 154,189 152,011 306,200 371,200 1,584,693 0.06648 0.28383 1999 1,219,978 • 70,000 152,011 149,631 301,643 371,643 1,591,620 0.06656 0.28507 2000 1,219,988 75,000 149,631 147,044 296,675 371,675 1,591,663 0.06657 0.28507 2001 1,218,056 80,000 147,044 144,244 291,288 371,288 1,589,344 0.06650 0.28466 2002 826,688 490,000 144,244 126,971 271,215 761,215 1,587,903 0.13634 0.28440 2003 775,313 585,000 126,971 106,204 233,175 818,175 1,593,488 0.14654 0.28540 2004 1,425,000 106,204 55,260 161,464 1,586,464 1,586,464 0.28414 0.28414 2005 1,535,000 55,260 55,260 1,590,260 1,590,260 0.28482 0.28482 2006 1,590,000 1,590,000 1,590,000 0.28478 0.28478 2007 1,815,000 1,815,000 1,815,000 0.32508 0.32508 2008 1,820,000 1,820,000 1,820,000 0.32597 0.32597 2009 1,545,000 1,545,000 1,545,000 0.27672 0.27672 2010 0.00000 0.00000 2011 0.00000 0.00000 2012 0.00000 0.00000 S17,324,780 $11,450,000 $2,162,840 S1,997,431 S4,160,275 S15,610,275 $32,935,051 DATED: 9/01/90 DUE: 3/01/91 - 3/01/12 FIRST COUPON: 3/01/91 Assessed Valuation = 575,600,000 Tax Collection Rate = 97.000% Assessed Valuation Growth = 0.000% Prepared by: Rauscher Pierce Refsnes, Inc. 08/02/90 NEW90B AGG89NR 1 CITY OF PEARLAND PUBLIC IMPROVMENT BONDS SER 91 I C FT INTEREST INTEREST G PRESENT PRINCIPAL a 7.250% a 7.250% TOTAL TOTAL NEW TOTAL DEBT P. YEAR ENDING DEBT DUE DUE DUE NEW PRINCIPAL SERVICE TAX RATE TAX RATE 09/30 REQUIREMENT 03/01 03/01 09/01 INTEREST F. INTEREST REQUIREMENT NEW TOTAL if 17 1991 2,345,733 2,345,733 0.00000 0.42013 �- 1992 2,105,276 169,167 72,500 241,667 241,667 2,346,942 0.04328 0.42035 1993 2,116,218 85,000 72,500 69,419 141,919 226,919 2,343,137 0.04064 0.41967 I- 1994 2,119,100 90,000 69,419 66,156 135,575 225,575 2,344,675 0.04040 0.41994 1995 1,590,460 100,000 66,156 62,531 128,688 228,688 1,819,148 0.04096 0.32582 1996 1,587,881 105,000 62,531 58,725 121,256 226,256 1,814,138 0.04052 0.32492 1997 1,584,948 115,000 58,725 54,556 113,281 228,281 1,813,229 0.04089 0.32476 I 1998 1,584,693 125,000 54,556 50,025 104,581 229,581 1,814,274 0.04112 0.32495 1999 1,591,620 130,000 50,025 45,313 95,338 225,338 1,816,958 0.04036 0.32543 2000 1,591,663 140,000 45,313 40,238 85,550 225,550 1,817,213 0.04040 0.32547 2001 1,589,344 155,000 40,238 34,619 74,856 229,856 1,819,200 0.04117 0.32583 2002 1,587,903 165,000 34,619 28,638 63,256 228,256 1,816,159 0.04088 0.32528 2003 1,593,488 175,000 28,638 22,294 50,931 225,931 1,819,419 0.04047 0.32587 2004 1,586,464 190,000 22,294 15,406 37,700 227,700 1,814,164 0.04078 0.32493 2005 1,590,260 205,000 15,406 7,975 23,381 228,381 1,818,641 0.04090 0.32573 2006 1,590,000 220,000 7,975 7,975 227,975 1,817,975 0.04083 0.32561 2007 1,815,000 1,815,000 0.00000 0.32508 2008 1,820,000 1,820,000 0.00000 0.32597 2009 1,545,000 1,545,000 0.00000 0.27672 2010 0.00000 0.00000 2011 0.00000 0.00000 2012 0.00000 0.00000 S32,935,051 $2,000,000 S797,562 $628,395 S1,425,954 $3,425,954 S36,361,005 DATED: 1/01/91 DUE: 3/01/92 - 3/01/06 FIRST COUPON: 3/01/92 Assessed Valuation = 575,600,000 Tax Collection Rate = 97.000% Assessed Valuation Growth = 0.000% Prepared by: Rauscher Pierce Retsnes, Inc. 08/02/90 NEW91 AGG99B -r 1. it CITY OF PFARIANO PUBLIC IMPRUVMLNI boNUS SER 95 INTEREST INTEREST ill PRESENT PRINCIPAL @ 7.250% a 7.250% TOTAL TOTAL NEW TOTAL DEBT 0 YEAR ENDING DEBT DUE DUE DUE NEW PRINCIPAL SERVICE TAX RATE TAX RATE F_i 09/30 REQUIREMENT 03/01 03/01 09/01 INTEREST 8 INTEREST REQUIREMENT NEW TOTAL u) 1991 2,345,733 2,345,733 0.00000 0.42013 1992 2,346,942 2,346,942 0.00000 0.42035 L 1993 2,343,137 2,343,137 0.00000 0.41967 Li) 1994 2,344,675 2,344,675 0.00000 0.41994 1--- 1995 1,819,148 170,000 181,250 175,088 356,338 526,338 2,345,485 0.09427 0.42009 70 1996 1,814,138 185,000 175,088 168,381 343,469 528,469 2,342,606 0.09465 0.41957 To T 1997 1,813,229 200,000 168,381 161,131 329,513 529,513 2,342,741 0.09484 0.41960 1998 1,814,274 215,000 161,131 153,338 314,469 529,469 2,343,743 0.09483 0.41978 1999 1,816,958 230,000 153,338 145,000 298,338 528,338 2,345,295 0.09463 0.42005 2000 1,817,213 245,000 145,000 136,119 281,119 526,119 2,343,331 0.09423 0.41970 2001 1,819,200 265,000 136,119 126,513 262,631 527,631 2,346,831 0.09450 0.42033 2002 1,816,159 285,000 126,513 116,181 242,694 527,694 2,343,853 0.09451 0.41980 2003 1,819,419 305,000 116,181 105,125 221,306 526,306 2,345,725 0.09426 0.42013 2004 1,814,164 330,000 105,125 93,163 198,288 528,288 2,342,451 0.09462 0.41954 2005 1,818,641 355,000 93,163 80,294 173,456 528,456 2,347,098 0.09465 0.42038 2006 1,817,975 380,000 80,294 66,519 146,813 526,813 2,344,788 0.09435 0.41996 2007 1,815,000 410,000 66,519 51,656 118,175 528,175 2,343,175 0.09460 0.41967 2008 1,820,000 440,000 51,656 35,706 87,363 527,363 2,347,363 0.09445 0.42042 2009 1,545,000 475,000 35,706 18,488 54,194 529,194 2,074,194 0.09478 0.37150 2010 510,000 18,488 18,488 528,488 528,488 0.09465 0.09465 2011 0.00000 0.00000 2012 0.00000 0.00000 $36,361,005 $5,000,000 $1,813,952 $1,632,702 $3,446,654 $8,446,654 $44,807,654 DATED: 9/01/94 DUE: 3/01/95 - 3/01/10 FIRST COUPON: 3/01/95 Assessed Valuation = 575,600,000 . • Tax Collection Rate = 97.000% Assessed Valuation Growth = 0.000% Prepared by: Rauscher Pierce Refsnes, Inc. NEW95 08/02/90 AGG99C ii k.n (.1)