The URL can be used to link to this page

Ord. 0548 03-14-88ORDINANCE NO. 548 ORDINANCE AUTHORIZING THE ISSUANCE OF $250,000 CITY OF PEARLAND, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1988; AND DECLARING THAT AN EMERGENCY EXISTS RELATING TO THE IMMEDIATE PRE- SERVATION OF THE PUBLIC PEACE, HEALTH, SAFETY AND WEL- FARE, BECAUSE THE PROCEEDS FROM THE SALE OF THE CERTIFICATES ARE REQUIRED AS SOON AS POSSIBLE FOR THE CONSTRUCTION OF THE FINAL LANDFILL COVER. THE STATE OF TEXAS COUNTIES OF BRAZORIA AND HARRIS CITY OF PEARLAND WHEREAS, the City Council of the CITY OF PEARLAND, TEXAS, (the "City"), authorized the publication of a notice of intention to issue certificates of obligation to the effect that the City Council would meet on March 14, 1988, to adopt an ordinance and take such other action as may be deemed necessary to authorize the issuance of certificates of obligation payable from City ad valorem taxes and certain revenues of the waterworks system of the City, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of construction of public works including a final landfill cover; purchasing materials, supplies, equipment, machinery; and the cost of professional services incurred in connection therewith; and WHEREAS, such notice was published at the times and in the manner required by the Constitution and laws of the State of Texas and of the United States of America, respectively, particularly Sections- 271.041-271.063, Texas Local Government Code, as amended; and WHEREAS, no petition or other request has been filed with or presented to any official of the City requesting that any of the proceedings authorizing such certificates of obligation be submitted to a referendum or other election; THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: 1. Definitions. Throughout this ordinance the following terms and expressions as used herein shall have the meanings set forth below: The term "Certificates" or "Series 1988 Certificates" shall mean the Series 1988 Certificates of Obligation authorized in this Ordinance, unless the context clearly indicates otherwise. The term "City" shall mean the City of Pearland, Texas. The term "Interest and Sinking Fund" shall mean the interest and sinking fund established by the City pursuant to Section 18 of this Ordinance. The term "Interest Payment Date", when used in connec- tion with any Certificate, shall mean September 1, 1988, and each March 1 and September 1 thereafter until maturity. The term "Ordinance" as used herein and in the Certifi- cates shall mean this ordinance authorizing the Certifi- cates. The term "Owner" shall mean any person who shall be the registered owner of any outstanding Certificates. The term "Paying Agent" shall mean the Registrar. The term "Record Date" shall mean, for any Interest Payment Date, the 15th calendar day of the month next pre- ceding such Interest Payment Date. The term "Register" shall mean the books of registra- tion kept by the Registrar in which are maintained the names and addresses of and the principal amounts registered to each Owner. The term "Registrar" shall mean MTrust Corp, National Association, Houston, Texas, and its successors in that capacity. 2. Authorization. The Certificates shall be issued in fully registered form, without coupons, in the total authorized aggregate amount of Two Hundred Fifty Thousand Dollars ($250,000) for the purpose of evidencing the indebtedness of the City for all or any part of the cost of construction of public works including a final landfill cover; purchasing materials, supplies, equipment, machinery; and the cost of professional services incurred in connection therewith. 3. Designation, Date, and Interest Payment Dates. The Certificates shall be designated as the "CITY OF PEARLAND, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1988", and shall be dated April 1, 1988. The Certificates shall bear interest from the later of April 1, 1988, or the most recent Interest Payment Date to which interest has been paid or duly provided for, calculated on -2- the basis of a 360-day year of twelve 30-day months, interest payable on September 1, 1988, and semiannually thereafter on March 1 and September 1 of each year until maturity. 4. Initial Certificates; Numbers and Denominations. The Certificates shall be issued bearing the numbers, in the principal amounts, and bearing interest at the rates set forth in the following schedule, and may be transferred and exchanged as set out in this Ordinance. The Certificates shall mature on March 1 in each of the years and in the amounts set out in such schedule. Certificates delivered on transfer of or in exchange for other Certificates shall be numbered in order of their authentication by the Registrar, shall be in the denomination of $5,000 or integral multiples thereof, and shall mature on the same date and bear interest at the same rate as the Certificate or Certificates in lieu of which they are delivered. Certificate Principal Interest Number Year Amount Rate R- 1 1989 $50,000 6.4% R- 2 1990 50,000 6.4 R- 3 1991 50,000 6.4 R- 4 1992 50,000 6.4 R- 5 1993 50,000 6.4 5. Execution of Certificates; Seal. The Certificates shall be signed by the Mayor of the City and countersigned by the City Secretary of the City, by their manual, litho- graphed, or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Certificates shall have the same effect as if each of the Certificates had been signed manually and in person by each of said officers, and such facsimile seal on the Certificates shall have the same effect as if the official seal of the City had been manually impressed upon each of the Certificates. If any officer of the City whose manual or facsimile signature shall appear on the Certificates shall cease to be such officer before the authentication of such Certificates or before the delivery of such Certificates, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in such office. -3- 6. Approval by Attorney General; Registration by Comptroller. The Certificates to be initially issued shall be delivered to the Attorney General of Texas for approval and shall be registered by the Comptroller of Public Accounts of the State of Texas. The manually executed registration certificate of the Comptroller of Public Accounts substantially in the form provided in Section 15 of this Ordinance shall be attached or affixed to the Certificates to be initially issued. 7. Authentication. Except for the Certificates to be initially issued, which need not be authenticated by the Registrar, only Certificates which bear thereon a certifi- cate of authentication, substantially in the form provided in Section 15 of this Ordinance, manually executed by an authorized representative of the Registrar, shall be en- titled to the benefits of this Ordinance or shall be valid or obligatory for any purpose. Such duly executed certifi- cate of authentication shall be conclusive evidence that the Certificates so authenticated were delivered by the Reg- istrar hereunder. 8. Payment of Principal and Interest. The Registrar is hereby appointed as the paying agent for the Certifi- cates. The principal of the Certificates shall be payable, without exchange or collection charges, in any coin or currency of the United States of America which, on the date of payment, is legal tender for the payment of debts due the United States of America, upon their presentation and surrender, as they become due and payable, at the principal corporate trust office of the Registrar. The interest on each Certificate shall be payable by check payable on the Interest Payment Date, mailed by the Registrar on or before each Interest Payment Date to the Owner of record as of the Record Date, to the address of such Owner as shown on the Register or, at the request of an Owner, and at the Owner's risk and expense, in such other manner as may be acceptable to the Owner and the Registrar. Any accrued interest payable at maturity shall be paid upon presentation and surrender of the Certificate to which such interest appertains. If the date for payment of the principal of or interest on any Certificate is a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the - 4- next succeeding day which is not a holiday, or a day on which banking rized by law or executive order to such date shall have the same force the original date payment was due. 9. Successor Registrars. The City covenants that at all times while any Certificates are outstanding it will provide a bank, trust company, financial institution or other entity duly qualified and duly authorized to act as Registrar for the Certificates. The City reserves the right to change the Registrar on not less than 60 days written notice to the Registrar, so long as any such notice is effective not less than 60 days prior to the next succeeding principal or interest payment date on the Certificates. 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. Saturday, Sunday, legal institutions are autho- close, and payment on and effect as if made on 10. Special Record Date. If interest on any Certif- icate 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 inter- est, 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 inter- est, 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. 11. Ownership; Unclaimed Principal and Interest. The City, the Registrar and any other person may treat the person in whose name any Certificate is registered as the absolute Owner of such Certificate for the purpose of making payment of principal or interest on such Certificate, and for all other purposes, whether or not such Certificate is overdue, and neither the City nor the Registrar shall be -5- bound by any notice or knowledge to the contrary. All payments made to the person deemed to be the Owner of any Certificate in accordance with this Section 11 shall be valid and effectual and shall discharge the liability of the City and the Registrar upon such Certificate to the extent of the sums paid. Amounts held by the Paying Agent and/or Registrar which represent principal. of and interest on the Certificates 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 Paying Agent and/or Registrar in accordance with the provisions of Title 6 of the Texas Property Code, as amended, to the extent that such provisions are applicable to such amounts. 12. Registration, Transfer, and Exchange. So long as any Certificates remain outstanding, the Registrar shall keep the Register at its principal corporate trust office and, subject to such reasonable regulations as it may prescribe, the Registrar shall provide for the registration and transfer of Certificates in accordance with the terms of this Ordinance. Each Certificate shall be transferable only upon the presentation and surrender thereof at the principal corpo- rate 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 Certificate for transfer, the Registrar shall authen- ticate and deliver in exchange therefor, within three (3) business days after such presentation, a new Certificate or Certificates, registered in the name of the transferee or transferees, in authorized denominations and of the same maturity and aggregate principal amount and bearing interest at the same rate as the Certificate or Certificates so presented. All Certificates shall be exchangeable upon presenta- tion and surrender thereof at the principal corporate trust office of the Registrar for a Certificate or Certificates of the same maturity and interest rate and in any authorized denomination, in an aggregate principal amount equal to the unpaid principal amount of the Certificate or Certificates presented for exchange. The Registrar shall be and is hereby authorized to authenticate and deliver exchange -6- Certificates in accordance with the provisions of this Section 12. Each Certificate delivered in accordance with this Section 12 shall be entitled to the benefits and security of this Ordinance to the same extent as the Certif- icate or Certificatesin lieu of which such Certificate is delivered. The City or the Registrar may require the Owner of any Certificate 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 Certificate. Any fee or charge of the Registrar for such transfer or exchange shall be paid by the City. 13. Mutilated, Lost, or Stolen Certificates. Upon the presentation and surrender to the Registrar of a mutilated Certificate, the Registrar shall authenticate and deliver in exchange therefor -a replacement Certificate of like maturity, interest rate and principal amount, bearing a number not contemporaneously outstanding. If any Certificate is lost, apparently destroyed, or wrongfully taken, the City, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Certificate has been acquired by a bona fide purchaser, shall execute and the Registrar shall authenti- cate and deliver a replacement Certificate of like amount, bearing a number not contemporaneously outstanding. The City or the Registrar may require the Owner of a mutilated Certificate 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 Certificate, before any replacement Certificate 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 Certificate; (2) furnish such security or indemnity as may be required by the Registrar and the City to save them harmless; -7- (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 Certificate, a bona fide purchaser of the original Certificate in lieu of which such replacement Certificate was issued presents for payment such original Certificate, the City and the Regis- trar shall be entitled to recover such replacement Certifi- cate 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 there- with. If any such mutilated, lost, apparently destroyed or wrongfully taken Certificate has become or is -about to become due and payable, the City in its discretion may, instead of issuing a replacement Certificate, authorize the Registrar to pay such Certificate. Each replacement Certificate delivered in accordance with this Section 13 shall be entitled to the benefits and security of this Ordinance to the same extent as the Certif- icate or Certificates in lieu of which such replacement Cer- tificate is delivered. 14. Cancellation of Certificates. All Certificates paid in accordance with this Ordinance, and all Certificates in lieu of which exchange Certificates or replacement Certificates 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 Certificates. 15. Forms. The form of the Certificates, including the form of the Registrar's Authentication Certificate, the form of Assignment, and the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas which shall be attached or affixed to the Certificates initialy issued shall be, respectively, substantially as -8- follows, with such additions, deletions and variations as may be necessary or desirable and not prohibited by this Ordinance: (Face of Certificate) UNITED STATES OF AMER ICA STATE OF TEXAS COUNTIES OF BRAZORIA AND HARRIS NUMBER DENOMINATION R- REGISTERED REGISTERED CITY OF PEARLAND, TEXAS Combination Tax and Revenue Certificate of Obligation, Series 1988 INTEREST RATE:, MATURITY DATE: ISSUE DATE: CUSIP: April 1, 1988 - REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS THE CITY OF PEARLAND, TEXAS (the "City"), promises to pay to the Registered Owner identified above, or registered assigns, on the date specified above, upon presentation and surrender of this certificate at the principal corporate trust office of MTrust Corp, National Association, Houston, Texas (the "Registrar"), the principal amount identified above, payable in any coin or currency of the United States of America which on the date of payment of such principal is legal tender for the payment of debts due the United States of America, and to pay interest thereon at the rate shown above, calculated on the basis of a 360-day year of twelve 30-day months, from the later of April 1, 1988, or the most recent interest payment date to which interest has been paid or duly provided for. Interest on this Certificate is payable by check on September 1, 1988, and semiannually thereafter on each March 1 and September 1, mailed to the registered owner as shown on the books of registration kept by the Registrar as of the 15th calendar date of the month -9- next preceding each interest payment date or, at the request and at the risk and expense of the registered owner, in such other manner as may be acceptable to the registered owner and the Registrar. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS CERTIFICATE 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 Certificate has been signed with the manual or facsimile signature of the Mayor of the City and countersigned with the manual or facsimile signa- ture of the City Secretary of the City, and the official seal of the City has been duly impressed, or placed in facsimile, on this Certificate. (AUTHENTICATION CERTIFICATE) (SEAL) CITY OF PEARLAND, TEXAS Mayor City Secretary (Back Panel of Certificate) THIS CERTIFICATE is one of a duly authorized issue of Certificates of Obligation, aggregating $250,000 (the "Certificates"), issued in accordance with the Constitution and laws of the State of Texas, particularly Sections 271.041-271.063, Texas Local Government Code, as amended, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of construction of public works including a final landfill cover; purchasing materials, supplies, equipment, machinery; and the cost of professional services incurred in connection therewith, pursuant to an ordinance duly adopted by the City Council of the City (the "Ordinance"), which Ordinance is of record in the official minutes of the City Council. THIS CERTIFICATE 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 -10- authorized representative, subject to the terms and condi- tions of the Ordinance. THE CERTIFICATES are exchangeable at the principal cor- porate trust office of the Registrar for Certificates in the principal amount of $5,000 or any integral multiple thereof, subject to the terms and conditions of the Ordinance. THIS CERTIFICATE shall not be valid or obligatory for any purpose or be entitled to any benefit under the Ordi- nance unless this Certificate either (i) is registered by the Comptroller of Public Accounts of the State of Texas by registration certificate attached or affixed hereto or (ii) is authenticated by the Registrar by due execution of the authentication certificate endorsed hereon. THE REGISTERED OWNER of this Certificate, 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 Certificates and will cause notice of any change of regis- trar to be mailed to each registered owner. IT IS HEREBY certified, recited and covenanted that this Certificate 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 Certificate have been performed, exist and have been done in accordance with law; and that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate, as such interest comes due and such principal matures, have been levied and ordered to be levied, within the limits prescribed by law, against all taxable property in the City. IT IS FURTHER certified, recited and represented that the revenues to be derived from the operation of the waterworks system of the City, after the payment of all operation and maintenance expenses thereof (the "Net Revenues"), are pledged to the payment of the principal of and interest on this Certificate and the series of Certificates of which it is a part to the extent that taxes may ever be insufficient or unavailable for said purpose; provided, however, that such pledge of Net Revenues is and -11- shall be junior and subordinate in all respects to the pledge of such Net Revenues to the payment of any obligation of the City, whether authorized heretofore or hereafter, which the City designates as having a pledge senior to the pledge of such Net Revenues to the payment of this Certificate and the series of Certificates of which it is a part, and the City also reserves the right to issue, for any lawful purpose at any time, in one or more installments, bonds, certificates of obligation and other obligations of any kind payable in whole or in part from the Net Revenues of the waterworks system, secured by a pledge of the Net Revenues of the waterworks system that may be prior and superior in right to, on a parity with, or junior and subordinate to the pledge of Net Revenues securing this Certificate and the series of Certificates of which it is a part. Form of Registration Certificate of Comptroller of Public Accounts COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this certificate has been exam- ined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this certificate 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 (SEAL) of the State of Texas Form of Registrar's Authentication Certificate AUTHENTICATION CERTIFICATE It is hereby certified that this Certificate has been delivered pursuant to the Ordinance described in the text of this Certificate, in exchange for or in replacement of a Certificate, Certificates or a portion of a Certificate or Certificates of a Series which was originally approved by the Attorney General of the State of Texas and -12- registered by the Comptroller of Public Accounts of the State of Texas. MTrust Corp, National Association Houston, Texas By Authorized Signature Date of Authentication 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 certificate and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer said certificate on the books kept for registra- tion 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 certifi- cate in every particular, without any alteration, enlargement or change whatsoever. 16. Legal Opinion; Cusip. Vinson & Elkins, Houston, Texas, printed on the Certificates, but -13- The approving opinion of and CUSIP Numbers may be errors or omissions in the printing of such opinion or such numbers shall have no effect on the validity of the Certificates. 17. Interest and Sinking Fund; Tax Levy. The proceeds from all taxes levied, assessed and collected for and on account of the Certificates authorized by this Ordinance shall be deposited, as collected, in a special fund to be designated "City of Pearland, Texas, Combination Tax and Revenue Certificates of Obligation, Series 1988, Interest and Sinking Fund". While the Certificates or any part of the principal thereof or interest thereon remain outstanding and unpaid, there is hereby levied and there shall be annually levied, assessed and collected in due time, form and manner within the limits prescribed by law, and at the same time other City taxes are levied, assessed and collected, in each year, beginning with the current year, a continuing direct annual ad valorem tax upon all taxable property in said City sufficient to pay the current interest on said Certificates as the same becomes due, and to provide and maintain a sinking fund adequate to pay the principal of the Certificates as such principal matures but never less than two percent (2%) of the original principal amount of the Certificates each year, full allowance being made for delinquencies and costs of collection, and said taxes when collected shall be applied to the payment of the interest on and principal of said Certificates and to no other purpose. In addition, interest accrued from the date of the Certifi- cates until their delivery, and premium, if any, is to be deposited in such fund. To pay the interest coming due on the Bonds on September 1, 1988, there is hereby appropriated from current funds, which are hereby certified to be on hand and avail- able for such purpose, an amount sufficient to pay such interest, and such amount shall be used for no other pur- pose. 18. Pledge of Revenues. The revenues to be derived from the operation of the waterworks system of the City, after the payment of all operation and maintenance expenses thereof (the "Net Revenues"), are hereby pledged to the payment of the principal of and interest on the Certificates as the same come due, to the extent that the taxes mentioned in Section 17 of this Ordinance may ever be insufficient or unavailable for said purpose; provided, however, that such pledge of such Net Revenues is and shall be junior and subordinate in all respects to the pledge of the Net -14- Revenues to the payment of any obligation of the City, whether authorized heretofore or hereafter, which the City designates as having a pledge senior to the pledge of the Net Revenues to the payment of the Certificates, and the City also reserves the right to issue, for any lawful purpose at any time, in one or more installments, bonds, certificates of obligation and other obligations of any kind payable in whole or in part from the Net Revenues of the waterworks system, secured by a pledge of the Net Revenues of the waterworks system that may be prior and superior in right to, on a parity with, or junior and subordinate to the pledge of Net Revenues securing this series of Certificates. 19. Further Proceedings. After the Certificates to be initially issued shall have been executed, it shall be the duty of the Mayor of the City to deliver the Certificates to be initially issued and all pertinent records and proceed- ings to the Attorney General of Texas, for examination and approval. After the Certificates to be initially issued shall have been approved by the Attorney General, they shall be delivered to the Comptroller of Public Accounts of the State of Texas for registration. Upon registration of the Certificates to be initially issued, the Comptroller of Public Accounts (or a deputy lawfully designated in writing to act for the Comptroller) shall manually sign the Comptroller's Registration Certificate prescribed herein to be affixed or attached to the Certificates to be initially issued, and the seal of said Comptroller shall be impressed, or placed in facsimile, thereon. 20. Sale. The sale of the Certificates to Underwood, Neuhaus & Co., Inc. (the "Purchaser"), at the price of $250,000 plus accrued interest on the Certificates to date of delivery, is hereby authorized, approved, ratified and confirmed, and the City Council hereby finds and determines that such price is the best reasonably obtainable by the City for the Certificates issued in accordance with this Ordinance. 21. Books and Records. So long as any of the Certifi- cates are outstanding the City covenants and agrees that it will keep proper books of record and account in which full, true and correct entries will be made of all dealings, activities and transactions relating to the Certificates and the funds created pursuant to this Ordinance, and all books, documents and vouchers relating thereto shall at all -15- reasonable times be made available for inspection upon request of any Owner. 22. Tax Exemption. The City covenants that it shall make such use of the proceeds of the Certificates, regulate investments of proceeds thereof and take such other and further actions as may be required by Sections 103 and 141-150 of the Internal Revenue Code of 1986 (the "Code") and all applicable temporary, proposed and final regulations and procedures promulgated thereunder or promulgated under the Internal Revenue Code of 1954, to the extent applicable to the Code ("Regulations"), necessary to assure that inter- est on the Certificates is excludable from gross income for federal income tax purposes. Without limiting the general- ity of the foregoing covenant, the City hereby covenants as follows: (a) The City will not use, nor permit to be used, more than 10 percent of the net proceeds of the Certificates in the trade or business of any person (other than use as a member of the general public) other than a governmental unit ("pri- vate -use proceeds"). For purposes of this Sec- tion, the term "net proceeds" means the proceeds derived from the sale of the Certificates, plus interest earnings thereon, less any amounts deposited in a reasonably required reserve or re- placement fund; the term "person" includes any individual, corporation, partnership, unincor- porated association or any other entity capable of carrying on a trade or business; and the term "trade or business" means, with respect to any natural person, any activity regularly carried on for profit and, with respect to persons other than natural persons, means any activity other than an activity carried on by a governmental unit; (b) The City will not use, nor permit to be used, more than 5 percent of the net proceeds of the Certificates in the trade or business of any person other than a governmental unit if such use is unrelated to the governmental purpose of the Certificates. Further, the amount of private -use proceeds of the Certificates ("excess private -use proceeds") will not exceed the proceeds of the Certificates expended for the governmental purpose -16- of the Certificates to which such excess private -use proceeds relate; (c) Principal and interest on the Certificates will be paid solely out of ad valorem taxes received by the City and Net Revenues of the City's waterworks system. Further, no person using more than 10 percent of the net proceeds of the Certificates in a trade or business, other than a governmental unit, shall make payments (other than as a member of the general public), directly or indirectly, accounting for more than 10 percent of such principal and interest; (d) The City will not use, or permit to be used, an amount exceeding the lesser of (i) $5,000,000 or (ii) 5 percent of the net proceeds of the Certificates to finance loans to persons other than governmental units, directly or indirectly; (e) Based upon all facts and estimates now known or reasonably expected to be in existence on the date the Certificates are delivered, the City reasonably expects that the proceeds of the Certificates will not be used in a manner that would cause the Certificates or any portion thereof to be an "arbitrage bond" within the meaning of Section 148 of the Code; (f) The City will monitor the yield on the in- vestment of the proceeds of the Certificates and moneys pledged to the repayment of the Certifi- cates and will restrict the yield on such invest- ments to the extent required by the Code or the Regulations. Without limiting the generality of the foregoing, the City will take appropriate steps to restrict the yield on all proceeds of the Certificates on hand on a date that is three years from the date of delivery of the Certificates to a yield which is not materially higher than the yield on the Certificates (in both cases calcu- lated in accordance with the Code and Regula- tions); (g) The City will not cause the Certificates to be treated as "federally guaranteed" obligations for purposes of Section 149(b) of the Code (as may -17- be modified in any applicable rules, rulings, policies, procedures, regulations or other official statements promulgated or proposed by the Department of the Treasury or the Internal Revenue Service with respect to "federally guaranteed" obligations described in Section 149(b) of the Code); and (h) The City will take all necessary steps to comply with the requirement that "excess arbitrage profits" earned on the investment of the "gross proceeds" of the Certificates (within the meaning of Section 148(f)(6)(B) of the Code), if any, be rebated to the federal government. Specifically, the City will (i) maintain records regarding the investment of the gross proceeds of the Certifi- cates as may be required to calculate such "excess arbitrage profits" separately from records of amounts on deposit in the funds and accounts of the City allocable to other certificate issues of the City or moneys which do not represent gross proceeds of any certificate of the City, (ii) calculate, not less often than annually, the amount of "excess arbitrage profits," if any, earned from the investment of the gross proceeds of the Certificates and (iii) pay, not less often than every fifth anniversary date of the delivery of the Certificates, 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 in- vestment arrangement with respect to the gross proceeds of the Certificates that might result in a "prohibited payment" within the meaning of Temp. Treas. Reg. §1.103-15AT. (i) The City will timely file a statement with the federal government setting forth the informa- tion required pursuant to Section 149(e) of the Code. All officers, employees and agents of the City are autho- rized and directed to provide certifications of facts and estimates that are material to the reasonable expectations of the City regarding the foregoing as of the date the -18- Certificates are delivered. In complying with the foregoing covenants, the City may rely from time to time upon an opinion issued by nationally -recognized bond counsel to the effect that any action by the City in reliance upon any interpretation of the. Code or Regulations contained in such opinion will not cause interest on the Certificates to be includable in gross income for federal income tax purposes under existing law. 23. 9ualified Tax -Exempt Obligations. The City hereby designates the Certificates as "qualified tax-exempt obliga- tions" as that term is used in Section 265(b) of the Code. It is hereby found, determined and represented that the City and all entities subordinate to the City have not issued tax-exempt obligations (excluding obligations which are "private activity bonds" within the meaning of Section 141 of the Code other than a "qualified 501(c)(3) bond" within the meaning of Section 145 of the Code) during calendar year 1988 with an aggregate principal amount of more than $10,000,000, including the Certificates, and that the aggregate amount of tax-exempt obligations (excluding obligations which are "private activity bonds" within the meaning of Section 141 of the Code other than a "qualified 501(c)(3) bond" within the meaning of Section 145 of the Code), including the Certificates, reasonably anticipated to be issued by the City and all entities subordinate to the City during calendar year 1988 will not exceed $10,000,000. 24. Rebate Exception. It is hereby found and de- termined by the City Council of the City that the City will use at least 95°%, of the net proceeds of the Certificates for local governmental activities of the City (including govern- mental units the jurisdiction of which is entirely within the jurisdiction of the City) and reasonably expects that the aggregate amount of all tax-exempt obligations (other than "private activity bonds" within the meaning of Sec- tion 141 of the Code) issued by the City (and all subordi- nate entities of the City) during calendar year 1988. will not exceed $5,000,000. Accordingly, the City expects to qualify for an exception to the requirements of Sec- tion 148(f) of the Code relating to the required rebate to the United States. If the City does not qualify for such exception, the City has covenanted in this 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 Certificates, within the meaning of -19- Section 148(f) of the Code, if any, be rebated to the federal government. 25. Emergency; Open Meeting. It is hereby officially found and determined that an emergency exists relating to the immediate preservation of the public peace, health, safety and welfare, because the proceeds from the sale of the Certificates are required as soon as possible for necessary and urgently needed improvements; that such emer- gency requires the adoption of this Ordinance and the holding of the meeting, or meetings, at which this Ordinance is adopted at the time or times and place held; the meeting, or meetings, at which this Ordinance was adopted was or were open to the public, and public notice of the time, place and purpose of said meeting, or meetings, was given, all as required by Vernon's Ann. Tex. Civ. Stat. Article 6252-17, as amended; and that such notice or notices as given are hereby authorized, approved, adopted and ratified. 26. Effective Date. This Ordinance shall be in force and effect from and after its final passage, and it is so ordered. 27. 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. PASSED AND APPROVED this 14th day of March, 1988. ATTEST: City ecretary CITY OF PEARLAND, TEXAS (SEAL) Mayor CITY OF PEARLAND, TEXAS -20- PASSED and APPROVED on first and only required reading as an emergency ordinance pursuant to Section 3.10 of the City Charter on this 14th day of March, 1988. ATTEST: City Scretary APPROVED AS TO FORM: -21- cm5ani Mayor ORDINANCE NO. 548 ORDINANCE AUTHORIZING THE ISSUANCE OF $250,000 CITY OF PEARLAND, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1988 THE STATE OF TEXAS § COUNTIES OF BRAZORIA § AND HARRIS § CITY OF PEARLAND § WHEREAS, the City Council of the CITY OF PEARLAND, TEXAS (the "City"), authorized the publication of a notice of intention to issue certificates of obligation to the effect that the City Council would meet on March 14, 1988, to adopt an ordinance and take such other action as may be deemed necessary to authorize the issuance of certificates of obligation payable from City ad valorem taxes and certain revenues of the waterworks system of the City, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of construction of public works including a final landfill cover; purchasing materials, supplies, equipment, machinery; and the cost of professional services incurred in connection therewith; and WHEREAS, such notice was published at the times and in the manner required by the Constitution and laws of the State of Texas and of the United States of America, respec- tively, particularly Sections 271.041-271.063, Texas Local Government Code, as amended; and WHEREAS, no petition or other request has been filed with or .presented to any official of the City requesting that any of the proceedings authorizing such certificates of obligation be submitted to a referendum or other election; THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: 1. Definitions. Throughout this ordinance the following terms and expressions as used herein shall have the meanings set forth below: The term "Certificates" or "Series 1988 Certificates" shall mean the Series 1988 Certificates of Obligation authorized in this Ordinance, unless the context clearly indicates otherwise. The term "City" shall mean the City of Pearland, Texas. The term "Interest and Sinking Fund" shall mean the interest and sinking fund established by the City pursuant to Section 18 of this Ordinance. The term "Interest Payment Date", when used in connec- tion with any Certificate, shall mean September 1, 1988, and each March 1 and September 1 thereafter until maturity. The term "Ordinance" as used herein and in the Certifi- cates shall mean this ordinance authorizing the Certifi- cates. The term "Owner" shall mean any person who shall be the registered owner of any outstanding Certificates. The term "Paying Agent" shall mean the Registrar. The term "Record Date" shall mean, for any Interest Payment Date, the 15th calendar day of the month next pre- ceding such Interest Payment Date. The term "Register" shall mean the books of registra- tion kept by the Registrar in which are maintained the names and addresses of and the principal amounts registered to each Owner. The term "Registrar" shall mean MTrust Corp, National Association, Houston, Texas, and its successors in that capacity. 2. Authorization. The Certificates shall be issued in fully registered form, without coupons, in the total authorized aggregate amount of Two Hundred Fifty Thousand Dollars ($250,000) for the purpose of evidencing the indebtedness of the City for all or any part of the cost of construction of public works including a final landfill cover; purchasing materials, supplies, equipment, machinery; and the cost of professional services incurred in connection therewith. 3. Designation, Date, and Interest Payment Dates. The Certificates shall be designated as the "CITY OF PEARLAND, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1988", and shall be dated April 1, 1988. The Certificates shall bear interest from the later of April 1, 1988, or the most recent Interest Payment Date to which interest has been paid or duly provided for, calculated on -2- the basis of a 360-day year of twelve 30-day months, interest payable on September 1, 1988, and semiannually thereafter on March 1 and September 1 of each year until maturity. 4. Initial Certificates; Numbers and Denominations. The Certificates shall be issued bearing the numbers, in the principal amounts, and bearing interest at the rates set forth in the following schedule, and may be transferred and exchanged as set out in this Ordinance. The Certificates shall mature on March 1 in each of the years and in the amounts set out in such schedule. Certificates delivered on transfer of or in exchange for other Certificates shall be numbered in order of their authentication by the Registrar, shall be in the denomination of $5,000 or integral multiples thereof, and shall mature on the same date and bear interest at the same rate as the Certificate or Certificates in lieu of which they are delivered. Certificate Principal Interest Number Year Amount Rate' R- 1 1989 $50,000 6.4°%, R- 2 1990 50,000 6.4 R 3 1991 50,000 6.4 R- 4 1992 50,000 6.4 R 5 1993 50,000 6.4 5. Execution of Certificates; Seal. The Certificates shall be signed by the Mayor of the City and countersigned by the City Secretarry of the City, by their manual, litho- graphed, or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Certificates shall have the same effect as if each of the Certificates had been signed manually and in person by each of said officers, and such facsimile seal on the Certificates shall have the same effect as if the official seal of the City had been manually impressed upon each of the Certificates. If any officer of the City, whose manual or facsimile signature shall appear on the Certificates shall cease to be such officer before the authentication of such Certificates or before the delivery of such Certificates, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in such office. -3- 6. Approval by Attorney General; Registration by Comptroller. The Certificates to be initially issued shall be delivered to the Attorney General of Texas for approval and shall be registered by the Comptroller of Public Accounts of the State of Texas. The manually executed registration certificate of the Comptroller of Public Accounts substantially in the form provided in Section 15 of this Ordinance shall be attached or affixed to the Certificates to be initially issued. 7. Authentication. Except for the Certificates to be initially issued, which need not be authenticated by the Registrar, only Certificates which bear thereon a certifi- cate of authentication, substantially in the form provided in Section 15 of this Ordinance, manually executed by an authorized representative of the Registrar, shall be en- titled to the benefits of this Ordinance or shall be valid or obligatory for any purpose. Such duly executed certifi- cate of authentication shall be conclusive evidence that the Certificates so authenticated were delivered by the Reg- istrar hereunder. 8. Payment of Principal and Interest. The Registrar is hereby appointed as the paying agent for the Certifi- cates. The principal of the Certificates shall be payable, without exchange or collection charges, in any coin or currency of the United States of America which, on the date of payment, is legal tender for the payment of debts due the United States of America, upon their presentation and surrender, as they become due and payable, at the principal corporate trust officeof the Registrar. The interest on each Certificate shall be payable by check payable on the Interest Payment Date, mailed by the Registrar on or before each Interest Payment Date to the Owner of record as of the Record Date, to the address of such Owner as shown on the Register or, at the request of an Owner, and at the Owner's risk and expense, in such other manner as may be acceptable to the Owner and the Registrar. Any accrued interest payable at maturity shall be paid upon presentation and surrender of the Certificate to which such interest appertains. If the date for payment of the principal of or interest on any Certificate is a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the Registrar is located are authorized by law or executive -4- order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday, or a day on which banking institutions are autho- rized by law or executive order to close, and payment on such date shall have the same force and effect as if made on the original date payment was due. 9. Successor Registrars. The City covenants that at all times while any Certificates are outstanding it will provide a bank, trust company, financial institution or other entity duly qualified and duly authorized to act as Registrar for the Certificates. The City reserves the right to change the Registrar on not less than 60 days written notice_ to the Registrar, so long as any such notice is effective not less than 60 days prior to the next succeeding principal or interest payment date on the Certificates. 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. 10. Special Record Date. If interest on any Certificate 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. 11. Ownership; Unclaimed Principal and Interest. The City, the, Registrar and any other person may treat the person in whose name any Certificate is registered as the absolute Owner of such Certificate for the purpose of making payment of principal or interest on such Certificate, and -5- for all other purposes, whether or not such Certificate 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 Certificate in accordance with this Section 11 shall be valid and effectual and shall discharge the liability of the City and the Registrar upon such Certificate to the extent of the sums paid. Amounts held by the Paying Agent and/or Registrar which represent principal of and interest on the Certificates 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 Paying Agent and/or Registrar in accordance with the provisions of Title 6 of the Texas Property Code, as amended, to the extent that such provisions are applicable to such amounts. 12. Registration, Transfer, and Exchange. So long as any Certificates remain outstanding, the Registrar shall keep the Register at its principal corporate trust office and, subject to such reasonable regulations as it may prescribe, the Registrar shall provide for the registration and transfer of Certificates in accordance with the terms of this Ordinance. Each Certificate shall be transferable only upon the presentation and surrender thereof at the principal corpo- rate 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 Re,gistrar. Upon due presentation of any Certificate for transfer, the Registrar shall authen- ticate and deliver in exchange therefor, within three (3) business days after such presentation, a new Certificate or Certificates, registered in the name of the transferee or transferees, in authorized denominations and of the same maturity and aggregate principal amount and bearing interest at the same rate as the Certificate or Certificates so presented. All Certificates shall be exchangeable upon presenta- tion and surrender thereof at the principal corporate trust office of the Registrar for a Certificate or Certificates of the same maturity and interest rate and in any authorized denomination, in an aggregate principal amount equal to the -6- unpaid principal amount of the Certificate or Certificates presented for exchange. The Registrar shall be and is hereby authorized to authenticate and deliver exchange Certificates in accordance with the provisions of this Section 12. Each Certificate delivered in accordance with this Section 12 shall be entitled to the benefits and security of this Ordinance to the same extent as the Certif- icate or Certificates in lieu of which such Certificate is delivered. The City or the Registrar may require the Owner of any Certificate 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 Certificate. Any fee or charge of the Registrar for such transfer or exchange shall be paid by the City. 13. Mutilated, Lost, or Stolen Certificates. Upon the presentation and surrender to the Registrar of a mutilated Certificate, the Registrar shall authenticate and deliver in exchange therefor a replacement Certificate of like maturity, interest rate and principal amount, bearing a number not contemporaneously outstanding. If any Certificate is lost, apparently destroyed, or wrongfully taken, the City, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Certificate has been acquired by a bona fide purchaser, shall execute and the Registrar shall authenti- cate and deliver a replacement Certificate of like amount, bearing a number not contemporaneously outstanding. The City or the Registrar may require the Owner of a mutilated Certificate to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith and anyother 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 Certificate, before any replacement Certificate 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 Certificate; -7- (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 Certificate, a bona fide purchaser of the original Certificate in lieu of which such replacement Certificate was issued presents for payment such original Certificate, the City and the Regis- trar shall be entitled to recover such replacement Certifi- cate 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 there- with. If any such mutilated, lost, apparently destroyed or wrongfully taken Certificate has become or is about to become due and payable, the City in its discretion may, instead of issuing a replacement Certificate, authorize the Registrar to pay such Certificate. Each replacement Certificate delivered in accordance with this Section 13 shall be entitled to the benefits and security of this Ordinance to the -same extent as the Certif- icate or Certificates in lieu of which such replacement Cer- tificate is delivered. 14. Cancellation of Certificates. All Certificates paid in accordance with this Ordinance, and all Certificates in lieu of which exchange Certificates or replacement Certificates 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 Certificates. -8- 15. Forms. The form of the Certificates, including the form of the Registrar's Authentication Certificate, the form of Assignment, and the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas which shall be attached or affixed to the Certificates initialy 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: (Face of Certificate) UNITED STATES OF AMERICA STATE OF TEXAS COUNTIES OF BRAZORIA AND HARRIS NUMBER DENOMINATION R- REGISTERED REGISTERED CITY OF PEARLAND, TEXAS Combination Tax and Revenue Certificate of Obligation, Series 1988 INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP: April 1, 1988 REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS THE CITY OF PEARLAND, TEXAS (the "City"), promises to pay to the Registered Owner identified above, or registered assigns, on the date specified above, upon presentation and surrender of this certificate at the principal corporate trust office of MTrust Corp, National Association, Houston, Texas (the "Registrar"), the principal amount identified above, payable in any coin or currency of the United States of America which on the date of payment of such principal is legal tender for the payment of debts due the United States of America, and to pay interest thereon at the rate shown above, calculated on the basis of a 360-day year of twelve -9- 30-day months, from the later of April 1, 1988, or the most recent interest payment date to which interest has been paid or duly provided for. Interest on this Certificate is payable by check on September 1, 1988, and semiannually thereafter on each March 1 and September 1, mailed to the registered owner as .shown on the books of registration kept by the Registrar as of the 15th calendar date of the month next preceding each interest payment date or, at the request and at the risk and expense of the registered owner, in such other manner as may be acceptable to the registered owner and the Registrar. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS CERTIFICATE 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 Certificate has been signed with the manual or facsimile signature of the Mayor of the City and countersigned with the manual or facsimile signa- ture of the City Secretary of the City, and the official seal of the City has been duly -impressed, or placed in facsimile, on this Certificate. (AUTHENTICATION CERTIFICATE) (SEAL) CITY OF PEARLAND, TEXAS Mayor City Secretary (Back Panel of Certificate) THIS CERTIFICATE is one of a duly authorized issue of Certificates of Obligation, aggregating $250,000 (the "Certificates"), issued in accordance with the Constitution and laws of the State of Texas, particularly Sections 271.041-271.063, Texas Local Government Code, as amended, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of construction of public works including a final landfill cover; purchasing materials, supplies, equipment, machinery; and the cost of professional services incurred in connection therewith, pursuant to an ordinance duly adopted by the City Council of -10- the City (the "Ordinance"), which Ordinance is of record in the official minutes of the City Council. THIS CERTIFICATE 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 au- thorized representative, subject to the terms and conditions of the Ordinance. THE CERTIFICATES are exchangeable at the principal cor- porate trust office of the Registrar for Certificates in the principal amount of $5,000 or any integral multiple thereof, subject to the terms and conditions of the Ordinance. THIS CERTIFICATE shall not be valid or obligatory for any purpose or be entitled to any benefit under the Ordi- nance unless this Certificate either (i) is registered by the Comptroller of Public Accounts of the State of Texas by registration certificate attached or affixed hereto or (ii) is authenticated by the Registrar by due execution of the authentication certificate endorsed hereon. THE REGISTERED OWNER of this Certificate, 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 Certificates and will cause notice of any change of regis- trar to be mailed to each registered owner. IT IS HEREBY certified, recited and covenanted that this Certificate 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 Certificate have been performed, exist and have been done in accordance with law; and that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate, as such interest comes due and such principal matures, have been levied and ordered to be levied, within the limits prescribed by law, against all taxable property in the City. -11- IT IS FURTHER certified, recited and represented that. the revenues to be derived from the operation of the waterworks system of the City, after the payment of all operation and maintenance expenses thereof (the "Net Revenues"), are pledged to the payment of the principal of and interest on this Certificate and the series of Certificates of which it is a part to the extent that taxes may ever be insufficient or unavailable for said purpose; provided; however, that such pledge of Net Revenues is and shall be junior and subordinate in all respects to the pledge of such Net Revenues to the payment of any obligation of the City, whether authorized heretofore or hereafter, which the City designates as having a pledge senior to the pledge of such Net Revenues to the payment of this Certificate and the series of Certificates of which it is a part, and the City also reserves the right to issue, for any lawful purpose at any time, in one or more installments, bonds, certificates of obligation and other obligations of any kind payable in whole or in part from the Net Revenues of the waterworks system, secured by a pledge of the Net Revenues of the waterworks system that may be prior and superior in right to, on a parity with, or junior and subordinate to the pledge of Net Revenues securing this Certificate and the series of Certificates of which it is a part. Form of Registration Certificate of Comptroller of Public Accounts COMPTROLLER' S REGISTRATION CERTIFICATE: REGISTER NO, I hereby certify_ that this certificate has been exam- ined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this certificate 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 (SEAL) of the State of Texas -12- Form of Registrar's Authentication Certificate AUTHENTICATION CERTIFICATE It is hereby certified that this Certificate has been delivered pursuant to the Ordinance described in the text of this Certificate, in exchange for or in replacement of a Certificate, Certificates or a portion of a Certificate or Certificates of a Series which was originally approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. MTrust Corp, National Association Houston, Texas By Authorized Signature Date of Authentication 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 certificate and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer said certificate on the books kept for registra- tion thereof, with full power of substitution in the premises. DATED: -13- 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 certifi- cate in every particular, without any alteration, enlargement or change whatsoever. Legal Opinion; Cusip. The approving opinion of Vinson & Elkins, Houston, Texas, and CUSIP Numbers may be printed on the Certificates, but errors or omissions in the printing of such opinion or such numbers shall have no effect on the validity of the Certificates. 16. Interest and Sinking Fund; Tax Levy. The proceeds from all taxes levied, assessed and collected for and on account of the Certificates authorized by this Ordinance shall be deposited, as collected, in a special fund to be designated "City of Pearland, Texas, Combination Tax and Revenue Certificates of Obligation, Series 1988, Interest and Sinking Fund". While the Certificates or any part of the principal thereof or interest thereon remain outstanding and unpaid, there is hereby levied and there shall be annually levied, assessed and collected in due time, form and manner within the limits prescribed by law, and at the same time other City taxes are levied, assessed and collected, in each year, beginning with the current year, a continuing direct annual ad valorem tax upon all taxable property in said City sufficient to pay the current interest on said Certificates as the same becomes due, and to provide and maintain a sinking fund adequate to pay the principal of the Certificates as such principal matures but never less than two percent (2%) of the original principal amount of the Certificates each year, full allowance being made for delinquencies and costs of collection, and said taxes when collected shall be applied to the payment of the interest on and principal of said Certificates and to no other purpose. In addition, interest accrued from the date of the Certifi- cates until their delivery, and premium, if any, is to be deposited in such fund. 17. Pledge of Revenues. The revenues to be derived from the operation of the waterworks system of the City, -14- after the payment of all operation and maintenance expenses thereof (the "Net Revenues"), are hereby pledged to the payment of the principal of and interest on the Certificates as the same come due, to the extent that the taxes mentioned in Section 17 of this Ordinance may ever be insufficient or unavailable for said purpose; provided, however, that such pledge of such Net Revenues is and shall be junior and subordinate in all respects to the pledge of the Net Revenues to the payment of any obligation of the City, whether authorized heretofore or hereafter, which the City designates as having a pledge senior to the pledge of the Net Revenues to the payment of the Certificates, and the City also reserves the right to issue, for any lawful purpose at any time, in one or more installments, bonds, certificates of obligation and other obligations of any kind payable in whole or in part from the Net Revenues of the waterworks system, secured by a pledge of the Net Revenues of the waterworks system that may be prior and superior in right to, on a parity with, or junior and subordinate to the pledge of Net Revenues securing this series of Certificates. 18. Further Proceedings. After the Certificates to be initially issued shall have been executed, it shall be the duty of the Mayor of the City to deliver the Certificates to be initially issued and all pertinent records and proceed- ings to the Attorney General of Texas, for examination and approval. After the Certificates to be initially issued shall have been approved by the Attorney General, they shall be delivered to the Comptroller of Public Accounts of the State of Texas for registration. Upon registration of the Certificates to be initially issued, the Comptroller of Public Accounts (or a deputy lawfully designated in writing to act for the Comptroller) shall manually sign the Comptroller's Registration Certificate prescribed herein to be affixed or attached to the Certificates to be initially issued, and the seal of said Comptroller shall be impressed, or placed in facsimile, thereon. 19. Sale. The sale of the Certificates to Underwood, Neuhaus & Co., Inc. (the "Purchaser"), at the price of $250,000 plus accrued interest on the Certificates to date of delivery, is hereby authorized, approved, ratified and confirmed, and the City Council hereby finds and determines that such price is the best reasonably obtainable by the City for the Certificates issued in accordance with this Ordinance. -15- 20. Books and Records. So long as any of the Certifi- cates are outstanding the City covenants and agrees that it will keep proper books of record and account in which full, true and correct entries will be made of all dealings, activities and transactions relating to the Certificates and the funds created pursuant to this Ordinance, and all books, documents and vouchers relating thereto shall at all reason- able times be made available for inspection upon request of any Owner. 21. Tax Exemption. The City covenants that it shall make such use of the proceeds of the Certificates, regulate investments of proceeds thereof and take such other and further actions as may be required by Sections 103 and 141-150 of the Internal Revenue Code of 1986 (the "Code") and all applicable temporary, proposed and final regulations and procedures promulgated thereunder or promulgated under the Internal Revenue Code of 1954, to the extent applicable to the Code ("Regulations"), necessary to assure that inter- est on the Certificates is excludable from gross income for federal income tax purposes. Without limiting the generality of the foregoing covenant, the City hereby covenants as follows: (a) The City will not use, nor permit to be used, more than 10 percent of the net proceeds of the Certificates in the trade or business of any person (other than use as a member of the general public) other than a governmental unit ("pri- vate -use proceeds"). For purposes of this Sec- tion, the term "net procee-ds" means the proceeds derived from the sale of the Certificates, plus interest earnings thereon, less any amounts deposited in a reasonably required reserve or re- placement fund; the term "person" includes any individual, corporation, partnership, unincor- porated association or any other entity capable of carrying on a trade or business; and the term "trade or business" means, with respect to any natural person, any activity regularly carried on for profit and, with respect to persons other than natural persons, means any activity other than an activity carried on by a governmental unit; -16- Certificates on hand on a date that is three years from the date of delivery of the Certificates to a yield which is not materially higher than the yield on the Certificates (in both cases calcu- lated in accordance with the Code and Regula- tions); (g) The City will not cause the Certificates to be treated as "federally guaranteed" obligations for purposes of Section 149(b) of the Code (as may be modified in any applicable rules, rulings, policies, procedures, regulations or other official statements promulgated or proposed by the Department of the Treasury or the Internal Revenue Service with respect to "federally guaranteed" obligations described in Section 149(b) of the Code); and (h) The City will take all necessary steps to comply with the requirement that "excess arbitrage profits" earned on the investment of the "gross proceeds" of the Certificates (within the meaning of Section 148(f)(6)(B) of the Code), if any, be rebated to the federal government. Specifically, the City will (i) maintain records regarding the investment of the gross proceeds of the Certifi- cates as may be required to calculate such "excess arbitrage profits" separately from records of amounts on deposit in the funds and accounts of the City allocable to other certificate issues of the City or moneys which dor not represent gross proceeds of any certificate of the City, (ii) calculate, not less often than annually, the amount of "excess arbitrage profits," if any, earned from the investment of the gross proceeds of the Certificates and (iii) pay, not less often than every fifth anniversary date of the delivery of the Certificates, 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 in- vestment arrangement with respect to the gross proceeds of the Certificates that might result in a "prohibited payment" within the meaning of Temp. -18- Treas. Reg. §1.103-15AT. (i) The City will timely file a statement with the federal government setting forth the informa- tion required pursuant to Section 149(e) of the Code. All officers, employees and agents of the City are autho- rized and directed to provide certifications of facts and estimates that are material to the reasonable expectations of the City regarding the foregoing as of the date the Certificates are delivered. In complying with the foregoing covenants, the City may rely from time to time upon an opinion issued by nationally -recognized bond counsel to the effect that any action by the City in reliance upon any interpretation of the Code or Regulations contained in such opinion will not cause interest on the Certificates to be includable in gross income for federal income tax purposes under existing law. 22. pualified Tax -Exempt Obligations. The City hereby designates the Certificates as "qualified tax-exempt obliga- tions" as that term is used in Section 265(b) of the Code. It is hereby found, determined and represented that the City and all entities subordinate to the City have not issued tax-exempt obligations (excluding obligations which are "private activity bonds" within the meaning of Section 141 of the Code other than a "qualified 501(c)(3) bond" within the meaning of Section 145 of the Code) during calendar year 1988 with an aggregate principal amount of more than $10,000,000, including the Certificates, and that the aggregate amount of tax-exempt (obligations (excluding obligations which are "private activity bonds" within the meaning of Section 141 of the Code other than a "qualified 501(c)(3) bond" within the meaning of Section 145 of the Code), including the Certificates, reasonably anticipated to be issued by the City and all entities subordinate to the City during calendar year 1988 will not exceed $10,000,000. 23. Rebate Exception. It is hereby found and de- termined by the City Council of the City that the City will use at least 95% of the net proceeds of the Certificates for local governmental activities of the City (including govern- mental units the jurisdiction of which is entirely within the jurisdiction of the City) and reasonably expects that the aggregate amount of all tax-exempt obligations (other than "private activity bonds" within the meaning of Sec- -19- tion 141 of the Code) issued by the City (and all subordi- nate entities of the City) during calendar year 1988. will not exceed $5,000,000. Accordingly, the City expects to qualify for an exception to the requirements of Sec- tion 148(f) of the Code relating to the required rebate to the United States. If the City does not qualify for such exception, the City has covenanted in this 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 Certificates, within the meaning of Section 148(f) of the Code, if any, be rebated to the federal government. 24. Emergency; Open Meeting. It is hereby officially found and determined that an emergency exists relating to the immediate preservation of the public peace, health, safety and welfare, because the proceeds from the sale of the Certificates are required as soon as possible for necessary and urgently needed improvements; that such emer- gency requires the adoption of this Ordinance and the holding of the meeting, or meetings, at which this Ordinance is adopted at the time or time and place held; the meeting, or meetings, at which this Ordinance was adopted was or were open to the public, and public notice of the time, place and purpose of said meeting, or meetings, was given, all as required by Vernon's Ann. Tex. Civ. Stat. Article 6252-17, as amended; and that such notice or notices as given are hereby authorized, approved, adopted and ratified. 25. Effective Date. This Ordinance shall be in force and effect from and after its final passage, and it is so ordered. 26. 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. -20- amt. _,.-- AMR - AIM G__._,111M111_. a _ _s _ -- _ 4.111 • I CITY OF PEARLAND, TEXAS COMBINATION TAX AND REVENUE • CERTIFICATES OF OBLIGATION SERIES 1988 ,r * * * * * * * $250, 000 * * * * * * * * * * VINSON& ELKINS ATTORNEYS AT LAW 3300 FIRST CITY TOWER 1001 FANNIN HOUSTON,TEXAS 77002.6760 VINSON & ELKINS ATTORNEYS AT LAW THE WILLARD OFFICE BUILDING FIRST CITY CENTRE 1455 PENNSYLVANIA AVE. N.W. 3300 FIRST CITY TOWER 816 CONGRESS AVENUE WASHINGTON,D.C.20004.1007 1001 FANNIN AUSTIN,TEXAS 78701-2496 TELEPHONE 2O2639-6500 TELEx 89680 HOUSTON,TEXAS 77002-6760 TELEPHONE 512495-8400 TELEPHONE 713 651-2222 TELEx 762146 47 CHARLES ST. BERKELEY SQUARE 3700 TRAMMELL CROW CENTER LONDON W1X 7PB,ENGLAND 2001 ROSS AVENUE TELEPHONE 01 441 491-7236 DALLAS,TEXAS 75201-2916 CABLE VINELKINS LONDON WI-TELEX 24140 TELEPHONE 214 220-7700 May 24, 1988 Mr. David ox Underwo , Neuhaus & Co. , Inc. 909 F nin at McKinney, 7th Floor Two ouston Center Houston, Texas 77010 Re: $250, 000 City of Pearland, Texas, Combination Tax and Revenue Certificates of Obligation, Series 1988 Dear David: Enclosed is a copy of the transcript relating to the captioned certificates. If you have any questions or if I can be of further assistance, please give me a call at 651- 2907. Respectfully, James L. Shepherd 0830:3841 Enclosure ' cc: Beth Bradford, MTrust Corp Kay Krouse, City of Pearland \Pear3\Al CITY OF PEARLAND, TEXAS COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION SERIES 1988 $250, 000 1 . Vinson & Elkins Opinion 2. General Certificate 3 . Resolution Authorizing Publication of Notice of Intention to Issue 4 . Affidavit of Publication 5 . Ordinance Authorizing Issuance of Certificates 6 . Certificate of Assessed Valuation 7 . Signature Identification and No-Litigation Certificate 8 . Attorney General ' s Opinion & Comptroller' s Registration Certificate 9 . No Arbitrage Certificate 10 . Paying Agent/Registrar Agreement 11 . Registrar' s Receipt 12 . Purchaser' s Receipt 13. Receipt and No-Litigation Certificate 14 . Specimen Certificate VINSON & ELKINS ATTORNEYS AT LAW THE WILLARD OFFICE BUILDING FIRST CITY CENTRE 3300 FIRST CITY TOWER 1455 PENNSYLVANIA AVE. N.W. 816 CONGRESS AVENUE WASHINGTON,D.C. 20004-1007 1001 FANNIN AUSTIN,TEXAS 78701-2496 TELEPHONE 202639-6500 TELEX 89680 HOUSTO N, TEXAS 77002-6760 TELEPHONE 512495-8400 TELEPHONE 713 651-2222 TELEX 762146 47 CHARLES ST.. BERKELEY SQUARE 2020 LTV CENTER LONDON W1X 7PB,ENGLAND 2001 ROSS AVENUE TELEPHONE 01 441 491-7236 April 15, 1988 DALLAS,TEXAS 75201-2916 CABLE VINELKINS LONDON WI-TELEX 24140 TELEPHONE 214 979-6600 WE HAVE ACTED as bond counsel for the City of Pearland, Texas (the "City" ) , in connection with an issue of certifi- cates of obligation (the "Certificates" ) described as follows: CITY OF PEARLAND, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1988, dated April 1, 1988, in the total authorized aggregate amount of $250, 000. The Certificates mature, bear interest and may be transferred and exchanged as set out in the Certificates 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 Certificates under the Constitution and laws of the State of Texas, under which the City is acting as a home-rule city of the State of Texas, and with respect to the exclusion of interest on the Certificates 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 tran- script 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 Certificates. IN OUR CAPACITY as bond counsel, we have participated in the preparation of and have examined a transcript of certified proceedings pertaining to the Certificates which contains certified copies of certain proceedings of the City, customary certificates of officers, agents and Page 1 of 4 pages Holders of the Certificates 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 compa- nies, certain S corporations with Subchapter C earnings and profits, individual recipients of Social Security or Rail- road Retirement benefits and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations. In addition, certain foreign corporations doing business in the United States may be subject to the new "branch profits tax" on their effectively-connected earnings and profits ( including tax-exempt interest such as interest on the Certificates) . V I'AJ SO&J $ E; ILI Ars Page 4 of 4 pages 5 . That the following is a true, correct and complete statement of the outstanding indebtedness of the City payable from ad valorem taxes: Purpose Date Interest Maturities Amt. Outst. WW & San. 12-1-64 3 . 80% $ 45M 6-1-1988 $ 360 , 000 SS Imp. 3 . 80% 50M 1989/91 Ser. ' 64 3 . 90% 55M 1992/94 WW & San. 6/1/66 4 . 30% 30M 6-1-1988 335 ,000 SS Imp. , 4 . 35% 30M 1989/90 Ser. ' 66 4 . 35% 35M 1991 4. 40% 35M 1992/93 4 . 40% 40M 1994 4 . 40% 100M 1995 G. O. , 8/1/68 5 . 00% 35M 2-1-89 305 ,000 Ser. ' 68 5. 10% 40M 1990/91 5 .25% 40M 1992 5 . 25% 50M 1993/95 G. O. , 6/1/75 6 . 00% 50M 2/1/1989 295,000 Ser. ' 75 6 . 10% 55M 1990 6 . 25% 60M 1991 6. 40% 65M 1992 6 . 50% 65M 1993 C/0, 8/1/77 6 . 25% 35M 8-1-1988 76 , 000 Ser. ' 76-A 6 .25% 40M 1989 1M 1990 Perm.Imp. , 9/1/78 5 . 00% 125M 3-1-1989/90 1 ,525 ,000 Ser. ' 78 5 . 10% 125M 1991 5. 20% 125M 1992 5 . 25% 125M 1993 5 . 30% 200M 1994 5 . 40% 200M 1995 5 . 50% 250M 1996/97 WW Sys. 9/1/80 6 . 50% 55M 3-1-1989 55 ,000 C/O, Ser. ' 80 �_ .... ...i +.r. ..w. . .- — WW Sys. 6/1/81 9 . 25% 100M 3-1-1990 400 ,000 C/O, 9 . 40% 100M 1991 Ser. ' 81 9 . 75% 100M 1992/93 Ref. , 8/15/85 6 . 70% 645M 3-1-1989 10 ,700 ,000 Ser. ' 85 7 . 00% 705M 1990 7. 25% 770M 1991 7 . 50% 830M 1992 7 . 75% 915M 1993 8 . 00% 1 , 095M 1994 8 . 10% 1 , 190M 1995 8 . 25% 1 ,285M 1996 8 . 40% 1 , 280M 1997 8 . 50% 510M 1998 8. 60% 500M 1999 8 . 70% 490M 2000 8 . 80% 485M 2001 Pub.Imp. , 4-1-86 8 . 50% 75M 3-1-1989/90 4 ,400 , 000 Ser. ' 86 8 . 50% 100M 1991 8 . 50% 125M 1992/93 8. 50% 150M 1994 8 . 50% 175M 1995 8.50% 300M 1996 6 . 50% 425M 1997 6. 60% 450M 1998/99 6 . 70% 475M 2000 6. 75% 475M 2001 6.80% 500M 2002 6 . 50% 500M 2003 CERTIFICATES IN PROCESS OF ISSUANCE: C/O, 04-1-88 50M 3-1-1989/93 250, 000 Ser. ' 88 TOTAL $18, 701 , 000 6. That the following are the revenues derived from the operation of the waterworks system of the City for the previous three years: 1985 - $1 ,539 , 346 1986 - $2,219, 437 1987 - $2, 193 , 201 WITNESS MY HAND AND THE OFFICIAL SEAL OF THE CITY, this the 14th day of March, 1988 . City Se-etary City of Pearland, Texas (SEAL) CERTIFICATE FOR RESOLUTION THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § We, the undersigned officers of the City Council of the CITY OF PEARLAND, TEXAS, hereby certify as follows : 1 . That the City Council of the CITY OF PEARLAND, TEXAS, convened in regular session on February 22 , 1988 , at the regular meeting place thereof, within the City and the roll was called of the duly constituted officers and members of the City Council, to-wit: Tom Reid Mayor Stella Roberts Councilmember Richard F. Tetens Councilmember James E. Bost Councilmember Dennis Frauenberger Councilmember William E. Wolff Councilmember Kay Krouse City Secretary and all of said persons were present, except the following absentee (s) : None thus constituting a quorum. Whereupon, among other business, the following was transacted at said meeting: a written RESOLUTION AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO ISSUE CITY OF PEARLAND, TEXAS, CERTIFICATES OF OBLIGATION, SERIES 1988 was duly introduced for the consideration of the City Council and read in full. It was then duly moved and seconded that said resolution be adopted; and, after due discussion, said motion, carrying with it the adoption of the resolution, prevailed and carried by the following vote: AYES: All members of said City Council shown present above voted "Aye" . NOES: None. 2 . A true, full and correct copy of the aforesaid resolu- tion adopted at the meeting described in the above and foregoing paragraph is attached to and follows this certificate; that the resolution 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 resolution; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of the City Council as indicated therein; that each of the officers and members of the City Council was duly and sufficiently notified officially and personally, in advance , of the date , hour, place and purpose of the aforesaid meeting, and that the resolution would be introduced and considered for adoption at said meeting, and each of said officers and members consented, in advance , to the holding of said meeting for such purpose; that said meeting was open to the public as required by law; and that public notice of the date, hour, place and subject of said meeting was given as required by Vernon' s Texas Civil Statutes, Article 6252-17 , as amended. SIGNED AND SEALED this 02 0t• day of Februar , 1988 . CI y Secretary Mayor (SEAL) RESOLUTION NO. R88-8 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION FOR FINAL COVER OF LANDFILL. THE STATE OF TEXAS X COUNTIES OF BRAZORIA AND HARRIS X CITY OF PEARLAND X WHEREAS, the City Council of the City of Pearland, Texas (the "City" ) , deems it advisable to issue Certificates of Obligation of the City in accordance with the notice hereinafter set forth; Now, Therefore BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. The facts and recitations contained in the preamble of this resolution are hereby found and declared to be true and correct. Section 2. The City Secretary is hereby authorized and directed too- cause to be published in the manner required by law and in substantially the following form, a notice of intention to issue Certificates of Obligation: NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION NOTICE IS HEREBY GIVEN that the City Council of the City of Pearland, Texas (the "City") , will meet in the City Hall, City of Pearland, Texas, at 7: 30 p.m. on the 14th day of March, 1988 , to adopt an ordinance and take such other action as may be deemed necessary to authorize the issuance of the City' s Combination Tax and Revenue Certificates of Obligation, Series 1988 , payable from City ad valorem taxes and certain revenues of the waterworks system of the City, in the maximum aggregate principal amount of $250, 000, bearing interest at a rate or rates not in excess of that prescribed by Article 717k-2 , Vernon' s Texas Civil Statutes, as now or hereafter amended, and maturing over a period of years not to exceed forty (40) years from the date thereof, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of construction of public works; purchasing materials, supplies, equipment, machinery; and the cost of professional services incurred in connection therewith. WITNESS MY HAND AND THE OFFICIAL SEAL OF THE CITY, this 22 day of February , 1988 . /s/ Kay Krouse City Secretary CITY OF PEARLAND, TEXAS (SEAL) Section 3 . The notice set forth in Section 2 above shall be published in both English and Spanish once a week for two (2) consecutive weeks in a newspaper which is of general circulation in the City, the date of the first publication to be not less than fourteen (14) days prior to the date tentatively set in said notice for the passage of the ordinance authorizing the issuance of such Certificates of Obligation. Section 4 . The Mayor, City Secretary, and other officers of the City are hereby authorized and directed to do any and all things necessary or desirable to carry out the provisions of this resolution. Section 5 . This resolution shall take effect immedi- ately upon its passage. Section 6 . It is hereby officially found and de- termined that the need of the City for such financing creates an emergency and an urgent public necessity for the holding, at the scheduled time, of the meeting of the City Council at which this resolution is adopted and for the- adoption of this resolution; and the NOTICE OF MEETING relating to said meeting and heretofore posted by the City Secretary, and the posting thereof, are hereby authorized, approved, and ratified. PASSED AND APPROVED this 22 day of February, 1988 . /s/ Tom Reid Mayor ATTEST: CITY OF PEARLAND, TEXAS /s/ Kay Krouse City Secretary CITY OF PEARLAND, TEXAS (SEAL) APPROVED AS TO FORM AND LEGALITY: /s/ Luke L. Daniel City Attorney CITY OF PEARLAND, TEXAS A epee \ ......— 44— O OA01 eb1.0 C� 79.8 �� s . d9 ,._ 'I� b /e-ate ett, Oe i/tp�'oci s ? ss er t t �� h � hero °f tha es at a`/iou ' er o t a o F�,eod RFPI/ �a�,� -• per;/aNer a s jexa`escrb We�t°t SZS R FCHAsw00d FSl FO yeas d°f y'�eode C�vr/S d byA`aces on • 1 d,/ N;CA !sp RBI �o°ri0o frog ars o a an 17leta es/l o , �� 19/ads�!' q / acce p cOhe Cif°feke the d t to e mat°rtatotes as o •0,• F/S tract e ao //be S a . ostroc for a//deocio ate t xceed °B ov w or �a p,�b 6,6, d 0,..., No Fp S bads of ater• iaf ti°j„o f or ao B the here0 f fay, Yet a 9p y oo fe a aw re ked o it, •oo a se,.. /oe . AUb 0 part /debt for f :. ? obi_ °ar and at /ti/ FP se,,.. ,-. so tor °f co th t 1 �aor i_.- do, eda 10 Ma, l ',ices and pp/; wOr the /ess e — a/esej�e roe in_..,pf l�0jr�eti/�at Ma M lhch s �yflN Corr the c0 s P• pore,' . off /bids s the .1 /re, M� Fpeeifc ch??e 19E9!O,cFSS�y /c°//st of p 9°,prr�asr/B THE STA olds on a °/toa 1492 m * ryeio%,�s 88 THF�YHANp c°et'o/the°�esso�/t COUNANI- ceotor eeasstd lSSps TY•th�s• d�IyFOFFew/t aINGLE PLY T �# 10 AM. The a/y0r �siA, °f,..e fC/A! until March Per NOTjC C�t4 C/ry0yRr0Use Vary. the March 22 Npll CFRj Cqot l FNrI �C FRS F/ FP !qN et j. Specifications (F /Fj NT €\ C 00 �R Seer dr. Fred Nelson, w CoUoc;/CF/S FSpF ONl \ SF /FfCA�TFiyC TF arY wood, TX 77546, dpea'),, wi/Uf the 0/4. " /`OB!/pAT/p�F ep Cab,/ OAF/CA p0 OSpFOB�FFM/T/ ccept tor reject any I.S.O.r a yo f a IA 'feet .ofp Fey t /e/ /d I. eicr R F! ACjO R deed to Ma`cb xas at rp theear/a/d hat the c1y88 �S�p xas(aa/ de PRFSF 'sso Died ke sochl y88 t°3Cp.Crty ya/Texas Cif / °a/9Uje ara ad de/ COjd /a CNTF QU .L=OT Re aoce °ec °th ad of 0 C; (the `�'esar e, otr 'Dtar dia a0) 'dad a e/ . 1 y seieo °fth essa e`a ebta /the ty°f leip fic 'a gar a ac o/a or 1 cke se re de INTENTION TO ISSUE a/d88 pay Certrfc C' C t0 ct 0o as/o`cia .1th 1 6,eeste aos dea eeto 64./Y ar 9ode/aor oiarl/. , CATES OF OBLIGATION sys1 cot Ce fr aces of°° $ th 47s /77 i be ,yo/;e• p e%,fre a/0 /a ee se co ytiet de S HEREBY GIVEN that txas City of thbev%City 0606/;• booTa the /de/ss't'pa/es aeeae 0s°s de°/C°rl bsioo/silos `, the City of hearland, Texas(the e Cityes of 1h�a/,e� Sea/d p'&CiOdaa adeaike/o°s d/a Cilia /os will meet in the City Hall, City i/ th e yat of taxees i/tej cipg/a e/ /baste y de c; ;,o ad, Settee de ,d Texas, at 7:30 p.m. on the 14th 421. e oorize the la �w0r�ss Xcede�a c�`e�ada ceotd ie/t0e`t0a lop.UPstOse table rch,such 1988,to act an ordinance ``! 00o �e�lk2d a9ue//9a'erad i?S,00:41 Bor s0s, y med necessary to�i, fot°o°? seeiesec,; Prescr,-asa o tDO• /ev t°tade nuance of the City's Combination Obligation, Tax and et►,0glq cs06`e a see o sea ok, ,,,a por anon aodo revenue Certificates of Obligation, Series File Chi, the maximum /o s°6teao pej;/dad0 eo si'fesoeefgrt/ n0 1988, payable from City ad valorem taxes retry°�ri `��'. • ,, evade ,ois�(4pJa; Gee e y c0/e,�ote Texas of° s stem and certain revenues he City, iofn the waterworks reiaxenro�wit-irk, ot0te/o c�a`et pay apa7�°s a,k%i�,eo 8/d@ aggregate of principal al amount of 250,000, eotoga Q'41 -•ot tak sob`as a/qo/a adeoaa e/ de/a°excee°to bearing in Brest at a rate or ra es not in °4'�eke err/Iessl1 be ecosto�stroob/icapa`1e dede/a CpUop°s�focha/Or 2excess of that prescribed by Article 717k PasVirg got"'fro r S.If'kw o'e/ac a sery;e9o;p0 c-00" esto dedad po de hereafter amended,)and t maturing over a Ala tertL °�?I e ery pT �0oa/°ci0s,orOf • ar r0at°/strre/.< period of �4y pow/key get it f��/C/q�CgpO 01's/i° es/0/aes'oar;a.ya/°so` years fromethe ndateo theeeof,f for (the ,„ wai�est erOde� � CNUF M; °corr'dos the Cityse for alldor any• k part of the costs of construction of public works; purchasing Bate di`2 F!!0 L,�jbta materials, supplies, equipment, ? machinery; and the cost of professional f de Stat services incurred in connectio,i therewith. C/t/o, Secretd0--4, FpE9R r'0M��`Do WITNESS MY HAND AND THE OFFICIAL (NOTARY SEAL) �N�TFc'pa/e SEAL OF THE CITY,this 22 day of February, �S 1988. /s/ Kay Krouse City Secretary CITY OF PEARLLAND,TEXAS (See page 8f r...■ r r� — . CERTIFICATE FOR ORDINANCE THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § We , the undersigned officers of the City Council of the CITY OF PEARLAND, TEXAS , hereby certify as follows : 1 . That the City Council of the CITY OF PEARLAND, TEXAS, convened in regular session on March 14 , 1988 , at the regular meeting place thereof, within the City and the roll was called of the duly constituted officers and members of the City Council, to-wit: Tom Reid Mayor Stella Roberts Councilmember Richard F. Tetens Councilmember James E. Bost Councilmember Dennis Frauenberger Councilmember William E. Wolff Councilmember Kay Krouse City Secretary and all of said persons were present, except the following absentee (s) : None thus constituting a quorum. Whereupon, among other business , the following was transacted at said meeting: a written ORDINANCE AUTHORIZING THE ISSUANCE OF $250 , 000 CITY OF PEARLAND, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1988 was duly introduced for the consideration of the City Council and read in full . It was then duly moved and seconded that said ordinance be adopted; and, after due discussion, said motion, carrying with it the adoption of the ordinance, prevailed and carried by the following vote: AYES: All members of said City Council shown present above voted "Aye" . NOES : None. 2 . A true, full and correct copy of the aforesaid ordinance adopted at the meeting described in the above and foregoing paragraph is attached to and follows this certificate; that the ordinance has been duly recorded in the City Council' s minutes of said meeting; that the above and foregoing paragraph is a true, full and correct excerpt from the City Council' s minutes of said meeting pertaining to the adoption of the ordinance; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of the City Council as indicated therein; that each of the officers and members of the City Council was duly and sufficiently notified officially and personally, in advance, of the date, hour, place and purpose of the aforesaid meeting, and that the ordinance would be introduced and considered for adoption at said meeting, and each of said officers and members consented, in advance , to the holding of said meeting for such purpose; that said meeting was open to the public as required by law; and that public notice of the date, hour, place and subject of said meeting was given as required by Vernon' s Texas Civil Statutes, Article 6252-17 , as amended. SIGNED AND SEALED this 14th day of March, 88 . Ci#y Secretary Mayor (SEAL) ORDINANCE NO. 548 ORDINANCE AUTHORIZING THE ISSUANCE OF $250, 000 CITY OF PEARLAND, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1988 THE STATE OF TEXAS § COUNTIES OF BRAZORIA § AND HARRIS § CITY OF PEARLAND § WHEREAS, the City Council of the CITY OF PEARLAND, TEXAS (the "City" ) , authorized the publication of a notice of intention to issue certificates of obligation to the effect that the City Council would meet on March 14, 1988, to adopt an ordinance and take such other action as may be deemed necessary to authorize the issuance of certificates of obligation payable from City ad valorem taxes and certain revenues of the waterworks system of the City, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of construction of public works including a final landfill cover; purchasing materials, supplies, equipment, machinery; and the cost of professional services incurred in connection therewith; and WHEREAS, such notice was published at the times and in the manner required by the Constitution and laws of the State of Texas and of the United States of America, respec- tively, particularly Sections 271. 041-271 .063 , Texas Local Government Code, as amended; and WHEREAS, no petition or other request has been filed with or presented to any official of the City requesting that any of the proceedings authorizing such certificates of obligation be submitted to a referendum or other election; THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS : 1 . Definitions. Throughout this ordinance the following terms and expressions as used herein shall have the meanings set forth below: The term "Certificates" or "Series 1988 Certificates" shall mean the Series 1988 Certificates of Obligation authorized in this Ordinance, unless the context clearly indicates otherwise. The term "City" shall mean the City of Pearland, Texas. The term "Interest and Sinking Fund" shall mean the interest and sinking fund established by the City pursuant to Section 18 of this Ordinance . The term "Interest Payment Date" , when used in connec- tion with any Certificate, shall mean September 1, 1988, and each March 1 and September 1 thereafter until maturity. The term "Ordinance" as used herein and in the Certifi- cates shall mean this ordinance authorizing the Certifi- cates. The term "Owner" shall mean any person who shall be the registered owner of any outstanding Certificates. The term "Paying Agent" shall mean the Registrar. The term "Record Date" shall mean, for any Interest Payment Date, the 15th calendar day of the month next pre- ceding such Interest Payment Date . The term "Register" shall mean the books of registra- tion kept by the Registrar in which are maintained the names and addresses of and the principal amounts registered to each Owner. The term "Registrar" shall mean MTrust Corp, National Association, Houston, Texas, and its successors in that capacity. 2 . Authorization. The Certificates shall be issued in fully registered form, without coupons, in the total authorized aggregate amount of Two Hundred Fifty Thousand Dollars ($250, 000) for the purpose of evidencing the indebtedness of the City for all or any part of the cost of construction of public works including a final landfill cover; purchasing materials, supplies, equipment, machinery; and the cost of professional services incurred in connection therewith. 3 . Designation, Date, and Interest Payment Dates. The Certificates shall be designated as the "CITY OF PEARLAND, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1988" , and shall be dated April 1, 1988. The Certificates shall bear interest from the later of April 1 , 1988, or the most recent Interest Payment Date to which interest has been paid or duly provided for, calculated on -2- 6 . Approval by Attorney General; Registration by Comptroller. The Certificates to be initially issued shall be delivered to the Attorney General of Texas for approval and shall be registered by the Comptroller of Public Accounts of the State of Texas . The manually executed registration certificate of the Comptroller of Public Accounts substantially in the form provided in Section 15 of this Ordinance shall be attached or affixed to the Certificates to be initially issued. 7 . Authentication. Except for the Certificates to be initially issued, which need not be authenticated by the Registrar, only Certificates which bear thereon a certifi- cate of authentication, substantially in the form provided in Section 15 of this Ordinance, manually executed by an authorized representative of the Registrar, shall be en- titled to the benefits of this Ordinance or shall be valid or obligatory for any purpose. Such duly executed certifi- cate of authentication shall be conclusive evidence that the Certificates so authenticated were delivered by the Reg- istrar hereunder. 8 . Payment of Principal and Interest. The Registrar is hereby appointed as the paying agent for the Certifi- cates . The principal of the Certificates shall be payable, without exchange or collection charges, in any coin or currency of the United States of America which, on the date of payment, is legal tender for the payment of debts due the United States of America, upon their presentation and surrender, as they become due and payable, at the principal corporate trust office of the Registrar. The interest on each Certificate shall be payable by check payable on the Interest Payment Date, mailed by the Registrar on or before each Interest Payment Date to the Owner of record as of the Record Date, to the address of such Owner as shown on the Register or, at the request of an Owner, and at the Owner' s risk and expense, in such other manner as may be acceptable to the Owner and the Registrar. Any accrued interest payable at maturity shall be paid upon presentation and surrender of the Certificate to which such interest appertains. If the date for payment of the principal of or interest on any Certificate is a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the -4- next succeeding day which is not a Saturday, Sunday, legal holiday, or a day on which banking institutions are autho- rized by law or executive order to close, and payment on such date shall have the same force and effect as if made on the original date payment was due . 9 . Successor Registrars . The City covenants that at all times while any Certificates are outstanding it will provide a bank, trust company, financial institution or other entity duly qualified and duly authorized to act as Registrar for the Certificates. The City reserves the right to change the Registrar on not less than 60 days written notice to the Registrar, so long as any such notice is effective not less than 60 days prior to the next succeeding principal or interest payment date on the Certificates . 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. 10. Special Record Date . If interest on any Certif- icate 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 inter- est, 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 inter- est, 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. 11 . Ownership; Unclaimed Principal and Interest. The City, the Registrar and any other person may treat the person in whose name any Certificate is registered as the absolute Owner of such Certificate for the purpose of making payment of principal or interest on such Certificate, and for all other purposes, whether or not such Certificate is overdue, and neither the City nor the Registrar shall be -5- bound by any notice or knowledge to the contrary. All payments made to the person deemed to be the Owner of any Certificate in accordance with this Section 11 shall be valid and effectual and shall discharge the liability of the City and the Registrar upon such Certificate to the extent of the sums paid. Amounts held by the Paying Agent and/or Registrar which represent principal of and interest on the Certificates 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 Paying Agent and/or Registrar in accordance with the provisions of Title 6 of the Texas Property Code, as amended, to the extent that such provisions are applicable to such amounts . 12 . Registration, Transfer, and Exchange. So long as any Certificates remain outstanding, the Registrar shall keep the Register at its principal corporate trust office and, subject to such reasonable regulations as it may prescribe, the Registrar shall provide for the registration and transfer of Certificates in accordance with the terms of this Ordinance . Each Certificate shall be transferable only upon the presentation and surrender thereof at the principal corpo- rate 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 Certificate for transfer, the Registrar shall authen- ticate and deliver in exchange therefor, within three (3 ) business days after such presentation, a new Certificate or Certificates, registered in the name of the transferee or transferees, in authorized denominations and of the same maturity and aggregate principal amount and bearing interest at the same rate as the Certificate or Certificates so presented. All Certificates shall be exchangeable upon presenta- tion and surrender thereof at the principal corporate trust office of the Registrar for a Certificate or Certificates of the same maturity and interest rate and in any authorized denomination, in an aggregate principal amount equal to the unpaid principal amount of the Certificate or Certificates presented for exchange. The Registrar shall be and is hereby authorized to authenticate and deliver exchange -6- S Certificates in accordance with the provisions of this Section 12 . Each Certificate delivered in accordance with this Section 12 shall be entitled to the benefits and security of this Ordinance to the same extent as the Certif- icate or Certificates in lieu of which such Certificate is delivered. The City or the Registrar may require the Owner of any Certificate 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 Certificate . Any fee or charge of the Registrar for such transfer or exchange shall be paid by the City. 13 . Mutilated, Lost, or Stolen Certificates . Upon the presentation and surrender to the Registrar of a mutilated Certificate, the Registrar shall authenticate and deliver in exchange therefor a replacement Certificate of like maturity, interest rate and principal amount, bearing a number not contemporaneously outstanding. If any Certificate is lost, apparently destroyed, or wrongfully taken, the City, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Certificate has been acquired by a bona fide purchaser, shall execute and the Registrar shall authenti- cate and deliver a replacement Certificate of like amount, bearing a number not contemporaneously outstanding. The City or the Registrar may require the Owner of a mutilated Certificate 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 Certificate, before any replacement Certificate 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 Certificate; • (2 ) furnish such security or indemnity as may be required by the Registrar and the City to save them harmless; -7- (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 Certificate, a bona fide purchaser of the original Certificate in lieu of which such replacement Certificate was issued presents for payment such original Certificate, the City and the Regis- trar shall be entitled to recover such replacement Certifi- cate 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 there- with. If any such mutilated, lost, apparently destroyed or wrongfully taken Certificate has become or is about to become due and payable, the City in its discretion may, instead of issuing a replacement Certificate, authorize the Registrar to pay such Certificate. Each replacement Certificate delivered in accordance with this Section 13 shall be entitled to the benefits and security of this Ordinance to the same extent as the Certif- icate or Certificates in lieu of which such replacement Cer- tificate is delivered. 14. Cancellation of Certificates . All Certificates paid in accordance with this Ordinance, and all Certificates in lieu of which exchange Certificates or replacement Certificates 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 Certificates. 15 . Forms. The form of the Certificates, including the form of the Registrar' s Authentication Certificate, the form of Assignment, and the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas which shall be attached or affixed to the Certificates initialy issued shall be, respectively, substantially as -8- follows, with such additions, deletions and variations as may be necessary or desirable and not prohibited by this Ordinance: (Face of Certificate ) UNITED STATES OF AMERICA STATE OF TEXAS COUNTIES OF BRAZORIA AND HARRIS NUMBER DENOMINATION R- $ REGISTERED REGISTERED CITY OF PEARLAND, TEXAS Combination Tax and Revenue Certificate of Obligation, Series 1988 INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP: April 1, 1988 REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS THE CITY OF PEARLAND, TEXAS (the "City" ) , promises to pay to the Registered Owner identified above, or registered assigns, on the date specified above, upon presentation and surrender of this certificate at the principal corporate trust office of MTrust Corp, National Association, Houston, Texas (the "Registrar" ) , the principal amount identified above, payable in any coin or currency of the United States of America which on the date of payment of such principal is legal tender for the payment of debts due the United States of America, and to pay interest thereon at the rate shown above, calculated on the basis of a 360-day year of twelve 30-day months, from the later of April 1 , 1988, or the most recent interest payment date to which interest has been paid or duly provided for. Interest on this Certificate is payable by check on September 1, 1988, and semiannually thereafter on each March 1 and September 1, mailed to the registered owner as shown on the books of registration kept by the Registrar as of the 15th calendar date of the month -9- next preceding each interest payment date or, at the request and at the risk and expense of the registered owner, in such other manner as may be acceptable to the registered owner and the Registrar. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS CERTIFICATE 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 Certificate has been signed with the manual or facsimile signature of the Mayor of the City and countersigned with the manual or facsimile signa- ture of the City Secretary of the City, and the official seal of the City has been duly impressed, or placed in facsimile, on this Certificate . (AUTHENTICATION CERTIFICATE) (SEAL) CITY OF PEARLAND, TEXAS Mayor City Secretary (Back Panel of Certificate) THIS CERTIFICATE is one of a duly authorized issue of Certificates of Obligation, aggregating $250, 000 ( the "Certificates" ) , issued in accordance with the Constitution and laws of the State of Texas, particularly Sections 271 . 041-271 .063 , Texas Local Government Code, as amended, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of construction of public works including a final landfill cover; purchasing materials, supplies, equipment, machinery; and the cost of professional services incurred in connection therewith, pursuant to an ordinance duly adopted by the City Council of the City (the "Ordinance" ) , which Ordinance is of record in the official minutes of the City Council . THIS CERTIFICATE 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 -10- authorized representative, subject to the terms and condi- tions of the Ordinance . THE CERTIFICATES are exchangeable at the principal cor- porate trust office of the Registrar for Certificates in the principal amount of $5, 000 or any integral multiple thereof, subject to the terms and conditions of the Ordinance. THIS CERTIFICATE shall not be valid or obligatory for any purpose or be entitled to any benefit under the Ordi- nance unless this Certificate either ( i ) is registered by the Comptroller of Public Accounts of the State of Texas by registration certificate attached or affixed hereto or ( ii ) is authenticated by the Registrar by due execution of the authentication certificate endorsed hereon. THE REGISTERED OWNER of this Certificate, 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 Certificates and will cause notice of any change of regis- trar to be mailed to each registered owner. IT IS HEREBY certified, recited and covenanted that this Certificate 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 Certificate have been performed, exist and have been done in accordance with law; and that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate, as such interest comes due and such principal matures, have been levied and ordered to be levied, within the limits prescribed by law, against all taxable property in the City. IT IS FURTHER certified, recited and represented that the revenues to be derived from the operation of the waterworks system of the City, after the payment of all operation and maintenance expenses thereof (the "Net Revenues" ) , are pledged to the payment of the principal of and interest on this Certificate and the series of Certificates of which it is a part to the extent that taxes may ever be insufficient or unavailable for said purpose; provided, however, that such pledge of Net Revenues is and -11- eMMINID shall be junior and subordinate in all respects to the pledge of such Net Revenues to the payment of any obligation of the City, whether authorized heretofore or hereafter, which the City designates as having a pledge senior to the pledge of such Net Revenues to the payment of this Certificate and the series of Certificates of which it is a part, and the City also reserves the right to issue, for any lawful purpose at any time, in one or more installments, bonds, certificates of obligation and other obligations of any kind payable in whole or in part from the Net Revenues of the waterworks system, secured by a pledge of the Net Revenues of the waterworks system that may be prior and superior in right to, on a parity with, or junior and subordinate to the pledge of Net Revenues securing this Certificate and the series of Certificates of which it is a part. Form of Registration Certificate of Comptroller of Public Accounts COMPTROLLER' S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this certificate has been exam- ined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this certificate 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 ( SEAL) of the State of Texas Form of Registrar' s Authentication Certificate AUTHENTICATION CERTIFICATE It is hereby certified that this Certificate has been delivered pursuant to the Ordinance described in the text of this Certificate, in exchange for or in replacement of a Certificate, Certificates or a portion of a Certificate or Certificates of a Series which was originally approved by the Attorney General of the State of Texas and -12- fms- illammomm . . . . . registered by the Comptroller of Public Accounts of the State of Texas. MTrust Corp, National Association Houston, Texas By Authorized Signature Date of Authentication 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 certificate and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer said certificate on the books kept for registra- tion 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 certifi- guaranteed by a member firm cate in every particular, of the New York Stock without any alteration, Exchange or a commercial enlargement or change bank or trust company. whatsoever. 16. Legal Opinion; Cusip. The approving opinion of Vinson & Elkins, Houston, Texas, and CUSIP Numbers may be printed on the Certificates, but errors or omissions in the -13- printing of such opinion or such numbers shall have no effect on the validity of the Certificates . 17. Interest and Sinking Fund; Tax Levy. The proceeds from all taxes levied, assessed and collected for and on account of the Certificates authorized by this Ordinance shall be deposited, as collected, in a special fund to be designated "City of Pearland, Texas, Combination Tax and Revenue Certificates of Obligation, Series 1988, Interest and Sinking Fund" . While the Certificates or any part of the principal thereof or interest thereon remain outstanding and unpaid, there is hereby levied and there shall be annually levied, assessed and collected in due time, form and manner within the limits prescribed by law, and at the same time other City taxes are levied, assessed and collected, in each year, beginning with the current year, a continuing direct annual ad valorem tax upon all taxable property in said City sufficient to pay the current interest on said Certificates as the same becomes due, and to provide and maintain a sinking fund adequate to pay the principal of the Certificates as such principal matures but never less than two percent (2%) of the original principal amount of the Certificates each year, full allowance being made for delinquencies and costs of collection, and said taxes when collected shall be applied to the payment of the interest on and principal of said Certificates and to no other purpose . In addition, interest accrued from the date of the Certifi- cates until their delivery, and premium, if any, is to be deposited in such fund. To pay the interest coming due on the Fonds on September 1, 1988, there is hereby appropriated from current funds, which are hereby certified to be on hand and avail- able for such purpose, an amount sufficient to pay such interest, and such amount shall be used for no other pur- pose . 18. Pledge of Revenues. The revenues to be derived from the operation of the waterworks system of the City, after the payment of all operation and maintenance expenses thereof (the "Net Revenues" ) , are hereby pledged to the payment of the principal of and interest on the Certificates as the same come due, to the extent that the taxes mentioned in Section 17 of this Ordinance may ever be insufficient or unavailable for said purpose; provided, however, that such pledge of such Net Revenues is and shall be junior and subordinate in all respects to the pledge of the Net -14- Revenues to the payment of any obligation of the City, whether authorized heretofore or hereafter, which the City designates as having a pledge senior to the pledge of the Net Revenues to the payment of the Certificates, and the City also reserves the right to issue, for any lawful purpose at any time, in one or more installments, bonds, certificates of obligation and other obligations of any kind payable in whole or in part from the Net Revenues of the waterworks system, secured by a pledge of the Net Revenues of the waterworks system that may be prior and superior in right to, on a parity with, or junior and subordinate to the pledge of Net Revenues securing this series of Certificates. 19 . Further Proceedings. After the Certificates to be initially issued shall have been executed, it shall be the duty of the Mayor of the City to deliver the Certificates to be initially issued and all pertinent records and proceed- ings to the Attorney General of Texas, for examination and approval . After the Certificates to be initially issued shall have been approved by the Attorney General, they shall be delivered to the Comptroller of Public Accounts of the State of Texas for registration. Upon registration of the Certificates to be initially issued, the Comptroller of Public Accounts (or a deputy lawfully designated in writing to act for the Comptroller) shall manually sign the Comptroller' s Registration Certificate prescribed herein to be affixed or attached to the Certificates to be initially issued, and the seal of said Comptroller shall be impressed, or placed in facsimile, thereon. 20. Sale. The sale of the Certificates to Underwood, Neuhaus & Co. , Inc . (the "Purchaser" ) , at the price of $250, 000 plus accrued interest on the Certificates to date of delivery, is hereby authorized, approved, ratified and confirmed, and the City Council hereby finds and determines that such price is the best reasonably obtainable by the City for the Certificates issued in accordance with this Ordinance. 21 . Books and Records. So long as any of the Certifi- cates are outstanding the City covenants and agrees that it will keep proper books of record and account in which full , true and correct entries will be made of all dealings, activities and transactions relating to the Certificates and the funds created pursuant to this Ordinance, and all books, documents and vouchers relating thereto shall at all -15- reasonable times be made available for inspection upon request of any Owner . 22 . Tax Exemption. The City covenants that it shall make such use of the proceeds of the Certificates, regulate investments of proceeds thereof and take such other and further actions as may be required by Sections 103 and 141-150 of the Internal Revenue Code of 1986 (the "Code" ) and all applicable temporary, proposed and final regulations and procedures promulgated thereunder or promulgated under the Internal Revenue Code of 1954, to the extent applicable to the Code ( "Regulations" ) , necessary to assure that inter- est on the Certificates is excludable from gross income for federal income tax purposes. Without limiting the general- ity of the foregoing covenant, the City hereby covenants as follows : ( a) The City will not use, nor permit to be used, more than 10 percent of the net proceeds of the Certificates in the trade or business of any person (other than use as a member of the general public ) other than a governmental unit ( "pri- vate-use proceeds" ) . For purposes of this Sec- tion, the term "net proceeds" means the proceeds derived from the sale of the Certificates, plus interest earnings thereon, less any amounts deposited in a reasonably required reserve or re- placement fund; the term "person" includes any individual, corporation, partnership, unincor- porated association or any other entity capable of carrying on a trade or business; and the term "trade or business" means, with respect to any natural person, any activity regularly carried on for profit and, with respect to persons other than natural persons, means any activity other than an activity carried on by a governmental unit; (b) The City will not use, nor permit to be used, more than 5 percent of the net proceeds of the Certificates in the trade or business of any person other than a governmental unit if such use is unrelated to the governmental purpose of the Certificates . Further, the amount of private-use proceeds of the Certificates ( "excess private-use proceeds" ) will not exceed the proceeds of the Certificates expended for the governmental purpose -16- of the Certificates to which such excess private-use proceeds relate; (c ) Principal and interest on the Certificates will be paid solely out of ad valorem taxes received by the City and Net Revenues of the City' s waterworks system. Further, no person using more than 10 percent of the net proceeds of the Certificates in a trade or business, other than a governmental unit, shall make payments (other than as a member of the general public) , directly or indirectly, accounting for more than 10 percent of such principal and interest; (d) The City will not use, or permit to be used, an amount exceeding the lesser of ( i ) $5, 000, 000 or ( ii ) 5 percent of the net proceeds of the Certificates to finance loans to persons other than governmental units, directly or indirectly; (e) Based upon all facts and estimates now known or reasonably expected to be in existence on the date the Certificates are delivered, the City reasonably expects that the proceeds of the Certificates will not be used in a manner that would cause the Certificates or any portion thereof to be an "arbitrage bond" within the meaning of Section 148 of the Code; ( f) The City will monitor the yield on the in- vestment of the proceeds of the Certificates and moneys pledged to the repayment of the Certifi- cates and will restrict the yield on such invest- ments to the extent required by the Code or the Regulations. Without limiting the generality of the foregoing, the City will take appropriate steps to restrict the yield on all proceeds of the Certificates on hand on a date that is three years from the date of delivery of the Certificates to a yield which is not materially higher than the yield on the Certificates ( in both cases calcu- lated in accordance with the Code and Regula- tions) ; (g) The City will not cause the Certificates to be treated as "federally guaranteed" obligations for purposes of Section 149(b) of the Code ( as may -17- be modified in any applicable rules, rulings, policies, procedures, regulations or other official statements promulgated or proposed by the Department of the Treasury or the Internal Revenue Service with respect to "federally guaranteed" obligations described in Section 149 (b) of the Code) ; and (h) The City will take all necessary steps to comply with the requirement that "excess arbitrage profits" earned on the investment of the "gross proceeds" of the Certificates (within the meaning of Section 148( f) (6) (B) of the Code ) , if any, be rebated to the federal government. Specifically, the City will ( i ) maintain records regarding the investment of the gross proceeds of the Certifi- cates as may be required to calculate such "excess arbitrage profits" separately from records of amounts on deposit in the funds and accounts of the City allocable to other certificate issues of the City or moneys which do not represent gross proceeds of any certificate of the City, ( ii ) calculate, not less often than annually, the amount of "excess arbitrage profits, " if any, earned from the investment of the gross proceeds of the Certificates and ( iii ) pay, not less often than every fifth anniversary date of the delivery of the Certificates, 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 in- vestment arrangement with respect to the gross proceeds of the Certificates that might result in a "prohibited payment" within the meaning of Temp. Treas. Reg. §1 . 103-15AT. ( i ) The City will timely file a statement with the federal government setting forth the informa- tion required pursuant to Section 149(e) of the Code. All officers, employees and agents of the City are autho- rized and directed to provide certifications of facts and estimates that are material to the reasonable expectations of the City regarding the foregoing as of the date the -18- Certificates are delivered. In complying with the foregoing covenants, the City may rely from time to time upon an opinion issued by nationally-recognized bond counsel to the effect that any action by the City in reliance upon any interpretation of the Code or Regulations contained in such opinion will not cause interest on the Certificates to be includable in gross income for federal income tax purposes under existing law. 23 . Qualified Tax-Exempt Obligations. The City hereby designates the Certificates as "qualified tax-exempt obliga- tions" as that term is used in Section 265(b) of the Code . It is hereby found, determined and represented that the City and all entities subordinate to the City have not issued tax-exempt obligations (excluding obligations which are "private activity bonds" within the meaning of Section 141 of the Code other than a "qualified 501 (c) (3 ) bond" within the meaning of Section 145 of the Code) during calendar year 1988 with an aggregate principal amount of more than $10, 000, 000, including the Certificates, and that the aggregate amount of tax-exempt obligations (excluding obligations which are "private activity bonds" within the meaning of Section 141 of the Code other than a "qualified 501 (c) ( 3 ) bond" within the meaning of Section 145 of the Code) , including the Certificates, reasonably anticipated to be issued by the City and all entities subordinate to the City during calendar year 1988 will not exceed $10, 000, 000. 24 . Rebate Exception. It is hereby found and de- termined by the City Council of the City that the City will use at least 95% of the net proceeds of the Certificates for local governmental activities of the City ( including govern- mental units the jurisdiction of which is entirely within the jurisdiction of the City) and reasonably expects that the aggregate amount of all tax-exempt obligations (other than "private activity bonds" within the meaning of Sec- tion 141 of the Code) issued by the City ( and all subordi- nate entities of the City) during calendar year 1988. will not exceed $5, 000, 000 . Accordingly, the City expects to qualify for an exception to the requirements of Sec- tion 148( f) of the Code relating to the required rebate to the United States . If the City does not qualify for such exception, the City has covenanted in this 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 Certificates, within the meaning of -19- Section 148( f) of the Code, if any, be rebated to the federal government. 25 . Emergency; Open Meeting. It is hereby officially found and determined that an emergency exists relating to the immediate preservation of the public peace, health, safety and welfare, because the proceeds from the sale of the Certificates are required as soon as possible for necessary and urgently needed improvements; that such emer- gency requires the adoption of this Ordinance and the holding of the meeting, or meetings, at which this Ordinance is adopted at the time or times and place held; the meeting, or meetings, at which this Ordinance was adopted was or were open to the public, and public notice of the time, place and purpose of said meeting, or meetings, was given, all as required by Vernon' s Ann. Tex. Civ. Stat. Article 6252-17, as amended; and that such notice or notices as given are hereby authorized, approved, adopted and ratified. 26. Effective Date . This Ordinance shall be in force and effect from and after its final passage, and it is so ordered. 27 . 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. PASSED AND APPROVED this 14th day of March, 1988. G7n 4:4 Mayor CITY OF PEARLAND, TEXAS ATTEST: 1 City S retary CITY OF PEARLAND, TEXAS ( SEAL) -20- 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 said City as shown by the duly approved tax rolls for the year 1987, which are the last approved tax rolls for said City on file in my office, to-wit: $ ss 9 /,f, 9?v. WITNESS MY HAND AND THE OFFICIAL SEAL OF SAID CITY, this /7`-4 day of March, 1988 . 4440!/ Tax Assesso of ector City of Pearland, Texas (SEAL) SIGNATURE IDENTIFICATION AND NO-LITIGATION CERTIFICATE THE STATE OF TEXAS § COUNTIES OF BRAZORIA § AND HARRIS We, the undersigned officers of the City of Pearland, Texas , certify that we officially signed, by our facsimile signatures, on behalf of said City, the following described certificates of obligation, hereinafter called the "Certificates" , to-wit: CITY OF PEARLAND, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1988 , dated April 1 , 1988 , aggregating $250 ,000 , and maturing on March 1 in each of the years 1989 through 1993 , both inclusive, being on the date of such signing and on the date hereof the duly chosen, qualified and acting officers authorized to execute the Certificates, and holding the official titles set forth below opposite such signatures. We further certify that said facsimile signatures have been affixed to the Certificates 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 liti- gation of any nature is now pending or threatened, either in the State or Federal courts contesting or attacking the Certificates 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 Certificates are payable, or in any manner questioning the authority or proceedings for the issuance, execution or delivery of the Certificates, or affecting the title of the present officials , and that no proceedings or authority for the issuance, execution or delivery of the Certificates have been repealed, rescinded or revoked. We further certify that the seal which has been im- pressed, or placed in facsimile, upon the Certificates is the legally adopted, proper and only official seal of the issuer of the Certificates . wom= 1. m..+ "mom t+M ate. ..... ...... ..r w ... .... ...... ... ... 'I.mom. We further certify that no petition or other request has been filed with or presented to any official of the issuer of the Certificates requesting that any of the proceedings authorizing the Certificates be submitted to a referendum or other election. We further certify that the information and data contained in the General Certificate dated March 14 , 1988 , are still true and correct as of this date. WITNESS OUR HANDS this /soh day of irst , 1988 . SIGNATUR rr. TITLE OF OFFICE ---ilm., Mayor Tom Reid iti7-4-4--e--- City Secretary Kay Kro e The signatures of the above officers are hereby cer- tified to be genuine. I State Bank , njl- PearlandA) Name of Bank Signature o Bank Officer Pearland, Texas V.P. Cashier City Title of Bank Officer (BANK SEAL) O.m amm �4iNEc-N E. ATTORNEY GENERAL IF `TEXAS JIM MATTOX ATTORNEY GENERAL April 13 , 1988 THIS IS TO CERTIFY that the City of Pearland, Texas (the "Issuer") , has submitted to me City of Pearland, Texas, Combination Tax and Revenue Certificates of Obligation, Series 1988 (the "Certificates") , in the aggregate principal amount of $250, 000 for approval. The Certificates are dated April 1, 1988, numbered R-1 through R-5, in denominations of $50, 000 each, and were authorized by an Ordinance of the Issuer passed on March 14, 1988 (the "Ordinance") . I have examined the law and such certified proceedings and other papers as I deem necessary to render this opinion. As to questions of fact material to my opinion, I have relied upon representations of the Issuer contained in the certified proceedings and other certifications of public officials furnished to me without undertaking to verify the same by independent investi- gation. I express no opinion relating to any Official Statement or other offering material relating to the Certificates. Based on my examination, I am of the opinion, as of the date hereof and under existing law, as follows (capitalized terms, except as herein defined, have the meaning given to them in the Ordinance) : (1) The Certificates have been issued in accordance with law and are valid and binding obligations of the Issuer. (2) The Certificates are payable from annual ad valorem taxes levied, within the limits prescribed by law, against all taxable property within the Issuer and are further payable from a pledge of the Net Revenues derived from the operation of the Issuer's Waterworks System provided, however, that such pledge of Net Revenues is and shall be junior and subordinate in all respects to the pledge of Net Revenues designated as having a pledge senior to the pledge of Net Revenues to the payment of the Certificates. Therefore, the Certificates are approved. A rney General of the State of Texas No. 22310 Book No. 83 nib 512/.463..2100 SUPREME COURT BUILDING AUSTIN, TEXAS 78711-234M OFFICE OF COMPTROLLER OF THE STATE OF TEXAS I I, Bob Bullock, Comptroller of Public Accounts of the State of Texas, do hereoy certify that the attachment is a true and correct copy of the opinion of the Attorney General approving tre City of Pearland Texas, Combination Tax and Revenue Certificates of Obligation, Series 1988 numbered R-l/R-5 of the denomination of S 50,000 dated April 1 , 19 $$_, as authorized by issuer, interest 6'4 percent, under and by authority of which said bonds were registered in this office, on the 13th day of April 19 la_ , as the same appears of record on page 247 Bond Register of the Comptroller's Office, Vol. 89 Register Number 50567 Given under my hand and seal of office, at Austin, Texas, the 13th April 88 day of , 19 . (6. BOB BULLOCK Comptroller of Public Accounts State of Texas 0:"( -iie r. ¢esia) a NO-ARBITRAGE CERTIFICATE I, the undersigned officer of the City of Pearland, Texas (the "City") , make this certificate for the benefit of all persons interested in the exclusion from gross income for federal income tax purposes of the interest to be paid on the City' s Combination Tax and Revenue Certificates of Obligation, Series 1988 (the "Certificates") , which are being issued in the aggregate principal amount of $250 ,000 and delivered simultaneously with the delivery of this certificate. The capitalized terms used in this certificate (unless otherwise defined) are defined in the Ordinance authorizing the issuance of the Certificates dated March 14 , 1988 (the "Ordinance") . I do hereby certify as follows: 1 . Authorized Representative. I am the duly chosen, qualified, and acting officer of the City for the office shown below my signature; as such, I am familiar with the facts herein certified and I am duly authorized to execute and deliver this certificate. 2 . Qualification of Official. I am charged, along with others, with responsibility for issuing the Certifi- cates. I am aware of the provisions of Section 148 of the Internal Revenue Code of 1986 , as amended (the "Code") , and, to the extent applicable under the Code, the Treasury Regulations (the "Regulations") heretofore promulgated under 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 Section 1 . 103-13 and 1 . 103-14 of the Regulations. 3 . Reasonable Expectations. This certification is based on the facts and estimates in existence on the date of issue of the Certificates, 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 Certifi- cates are being issued to provide funds to finance a final landfill cover (the "Project") and the costs of issuance of the Certificates. 5 . Amount and Use of Original Proceeds of Certifi- cates. The amount of original proceeds of the Certificates is approximately $247 ,422 . 22, which amount represents the a original principal amount of the Certificates in the amount of $250 ,000, plus accrued interest in the amount of $622 . 22, less issuance costs in the amount of $3, 200. Proceeds of the Certificates will be deposited and disbursed as follows: a. The amount of $622 . 22 will be deposited in the Interest and Sinking Fund as accrued interest and disbursed on the first interest payment date for the Certificates to pay interest. b. The amount of $3,200 is expected to be disbursed to pay legal fees, fiscal agent fees and adminis- trative and organizational fees relating to the issuance of the Certificates. c. The amount of $247,422 . 22 will be deposited in the Construction Fund and is expected to be disbursed to pay or reimburse the costs of acquisition and construction of the Project. The aggregate amount of the costs of acquisition and construction of the Project is anticipated to be not less than such amount. Any costs of the Project not financ- ed out of original or investment proceeds of the Certificates will be financed out of the City ' s available funds. 6 . Amount and Use of Investment Proceeds . The best estimate of the City is that investment proceeds resulting from the investment of any proceeds of the Certificates pending expenditure of such proceeds for costs of the Project will be in the approximate amount of $4 , 500 . All such investment proceeds will be used to pay or reimburse Project costs in addition to those described in paragraph 5 above. 7 . No Overissuance. Based upon the expectations set forth in the preceding paragraphs, the proceeds of the Certificates (together with any earnings from investments of such proceeds pending their expenditure) are not expected to exceed the amount necessary for the governmental purpose of the Certificates by more than five percent of such amount. 8 . Temporary Period for Original Proceeds . (a) The City will incur within six months of the date hereof substantially binding contracts to commence acquisition or construction of the Project pursuant to which the City is obligated to expend at least $6 , 185 . 55 . (b) The City reasonably expects that work on or acquisition of the Project will proceed with due diligence to completion and that the proceeds of the Certificates will be expended on the Project with reasonable dispatch. (c) The City reasonably expects that all of the original proceeds of the Certificates will have been expended on the Project prior to April 15 , 1991 . Any Original Proceeds not expended prior to April 15, 1991 , will be invested at a yield not "materially higher" than the yield on the Certificates, except as set forth in Paragraph 13 below. 9 . Temporary Period for Investment Proceeds . The City reasonably expects that any amount derived from the investment of moneys received from the sale of the Certi- ficates and from the investment of such investment income will be expended prior to April 15 , 1991 , or one year after receipt of such investment income, whichever is later. Any such investment proceeds not expended prior to such date will be invested at a yield not "materially higher" than the yield on the Certificates, except as set forth in Para- graph 13 below. 10 . Flow of Funds . Under the Ordinance the City is obligated to levy, assess and collect taxes in an amount sufficient to pay debt service on the Certificates . All taxes levied, assessed and collected by the City for and on account of the Certificates will be deposited into the Interest and Sinking Fund. 11 . Interest and Sinking Fund. The Interest and Sinking Fund established in the Ordinance will be used primarily to achieve a proper matching of revenues and debt service on the Certificates within each bond year. The City expects that the taxes levied, assessed and collected each year, and amounts received from investment of moneys held in the Interest and Sinking Fund, will be sufficient to pay debt service each year on the Certificates . The City will adjust the annual tax rates as necessary, taking into account other moneys available or to be available for the payment of debt service. The portion of the Interest and Sinking Fund which will be depleted at least once a year except for a reasonable carryover amount not to exceed the greater of (a) one year' s earnings on the Interest and Sinking Fund or (b) one-twelfth of annual debt service, will be treated as a separate fund (the "Debt Service Portion" ) for purposes of this certificate. Amounts, other than original and investment proceeds of the Certificates, remaining in the Interest and Sinking Fund after the annual payment of all principal of and interest and premium, if any, on the Certificates, other than such reasonable carry- over amount will be treated for purposes of this certificate as a separate fund (the "Reserve Portion") . The City reasonably expects that the sum of any amounts which (i) are allocable to such Reserve Portion or (ii) remain part of the Debt Service Portion for more than 13 months after the date of receipt of such amount, will not exceed $24 , 742 . 22 at any time so long as any of the Certificates are outstanding. To the extent any such accumulations exceed $24 , 742 .22 , such excess amount shall be invested at a yield not in excess of the yield on the Certificates, except as set forth in paragraph 13 below. 12 . No Other Funds . Other than the Interest and Sinking Fund, there are and will be no other funds or accounts comprised of securities (within the meaning of Section 165 (g) (2) (A) or (B) of the Code) , obligations, annuity contracts or investment-type property and estab- lished by or on behalf of the City which are reasonably expected to be used or generate earnings to be used, to pay debt service on the Certificates or which are reserved or pledged as collateral for payment of debt service on the Certificates and for which there is reasonable assurance that amounts therein will be available to pay such debt service if the City encounters financial difficulties . Uses of amounts in the Interest and Sinking Fund are described above and, therefore, there is no other fund created or established, or to be created or established, which would be treated as a sinking fund in connection with the Certifi- cates. 13 . Minor Portion. The City expects that all proceeds received from the sale of the Certificates and all invest- ment proceeds received on such amounts , and all other amounts pledged or anticipated to be used to pay principal of and interest on the Certificates, other than amounts on deposit in the Interest and Sinking Fund, will be expended in accordance with paragraphs 7 , 8 or 11 above. To the extent such amounts remain unexpended or are otherwise on hand following the periods set forth in paragraphs 7 , 8 or 11 above, the City will invest such amounts at a restricted yield as set forth in such paragraphs; provided, however, that a portion of such amounts, not to exceed in the aggre- gate $12 , 371 . 11 , may be invested at a yield which is mater- ially higher than the yield on the Certificates. 14 . Compliance With Rebate Requirements . The City will use at least 95% of the net proceeds of the Certifi- cates for local governmental activities of the City (includ- ing governmental units the jurisdiction of which is entirely within the jurisdiction of the city) and reasonably expects that the aggregate amount of all tax-exempt obligations (other than "private activity bonds" within the meaning of Section 141 of the Code) issued by the City (and all subor- dinate entities of the City and entities to which the City is subordinate within the meaning of Section 148 of the Code) during the 1988 calendar year will not exceed $5 , 000 ,000 . Accordingly, the City expects to qualify for an expection to the requirements of Section 148 (f) of the Code relating to the required rebate to the United States . In the event the City does not qualify for such exception, the City has covenanted in the Ordinance that it will take all necessary steps to comply with the requirement that "rebat- able arbitrage earnings" on the investment of the "gross proceeds" of the Certificates, within the meaning of Section 148 (f) of the Code, if any, be rebated to the federal government. Specifically, the City will (1) main- tain records regarding the investment of the "gross pro- ceeds" of the Certificates as may be required to calculate such "rebatable arbitrage earnings" separately from records of amounts on deposit in the funds and accounts of the City which are allocable to other bond issues of the City or moneys which do not represent "gross proceeds" of any bonds of the City, (ii) calculate at such intervals as may be required by applicable Treasury Regulations , the amount of "rebatable arbitrage earnings, " if any, earned from the investment of the "gross proceeds" of the Certificates and (iii) pay, not less often than every fifth anniversary date of the delivery of the Certificates, 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 Certificates that might result in a "prohibited payment" within the meaning of Section 1 . 103-15AT of the Regulations. 15 . Yield on the Certificates. For purposes of this certificate, the term "yield" shall have the meaning as- cribed in Section 148(h) of the Code and means that yield which when used in computing the present worth of all payments of principal and interest to be paid on an obli- gation produces an amount equal to the purchase price of such obligation. The yield on both the Certificates and any investments allocable to the Certificates ( "Nonpurpose Investments" ) shall be calculated by the same frequency • interval of compounding interest. In the case of the Certificates, "purchase price" means the initial offering price of the Certificates to the public (excluding all bond houses, brokers and other intermediaries) plus accrued interest. Based upon the representation of the initial purchaser, Underwood, Neuhaus & Co. , Inc . , set forth in Exhibit A hereto, the initial offering price ( including accrued interest) of the Certificates to the public at which a substantial number of each maturity of the Certificates were sold aggregated $253 , 836.22 . The yield on the Certi- ficates calculated in this manner by the initial purchaser, as set forth on Exhibit A hereto, is not less than 5 . 9001 percent. As used herein, the term "Nonpurpose Investment does not include obligations described in Section 103(a) of the Code. 16. No Artifice or Device . The Certificates are not and will not be a part of a transaction or series of trans- actions that attempts to circumvent the provisions of Section 148 of the Code (a) enabling the City to exploit the difference between tax-exempt and taxable interest rates to gain a material financial advantage, and (b) increasing the burden on the market for tax-exempt obligations . 17 . No Common Issue. There are no other obligations of the City which (a) are to be issued at substantially the same time as the Certificates, (b) are to be sold pursuant to a common plan of financing together with the Certifi- cates, 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 Certificates. �.� . 18 . No Disposition. The City does not expect to dispose of any portion of the Project while any of the Certificates are outstanding. 19 . No Arbitrage. On the basis of the foregoing facts, estimates and circumstances, it is not expected that the proceeds of the Certificates will be used in a manner that would cause the Certificates to be "arbitrage bonds" within the meaning of Section 148 of the Code and the Regulations. To the best of the knowledge and belief of the undersigned, there are not other facts, estimates or circum- stances that would materially change such expectations. 20 . Right to Certify. The City has not been notified of nor is the City aware of any listing or proposed listing of it by the Commissioner of Internal Revenue, by publica- tion in the Internal Revenue Bulletin or otherwise, to the effect that it may not certify its Certificates. WITNESS MY HAND and the official seal of the City this 2 day of April, 1988 . Mayor City of Pearland, Texas (SEAL) EXHIBIT A CERTIFICATE OF INITIAL PURCHASER WITH RESPECT TO PRICE The undersigned initial purchaser hereby certifies as follows with respect to the sale of the City of Pearland, Texas, Combination Tax and Revenue Certificates of Obliga- tion, Series 1988 , in the aggregate principal amount of $250 , 000 (the "Certificates") : 1 . The undersigned is the initial purchaser of the Certificates from the City of Pearland, Texas (the "City" ) . 2 . The undersigned has made a bona fide offering of the Certificates of each maturity to the public. 3 . The initial offering yield for the Certificates of each maturity at which a substantial amount of the Certifi- cates of such maturity was sold to the public is as set forth below: Year of Maturing Maturity Principal Amount Yield 1989 $50 , 000 5 . 00 % 1990 50 , 000 5 . 50 1991 50 , 000 5 . 75 1992 50 ,000 6 . 00 1993 50 ,000 6 . 25 4 . The term "public" , as used herein, means persons other than bondhouses, brokers, dealers, and similar persons or organizations acting in the capacity of underwriters or wholesalers. 5 . The yields described above reflect current market prices at the time of such sales. 6 . That the initial yield on the Certificates, based on a purchase price of $250 , 000, is not less than 5 . 9001 percent. For purposes of this certificate, the term "yield" means that yield which when used as a discount factor in computing the present value of an obligation produces the purchase price thereof. No underwriter' s discount, issuance costs, or costs of carrying or repaying the Certificates has been taken into account for purposes of computing the yield on the Certificates. 7 . The undersigned understand that the statements made herein will be relied upon by the City in its effort to comply with the conditions imposed by the Internal Revenue Code of 1986 on the exclusion of interest on the Certifi- cates from the gross income of their owners for federal income tax purposes. EXECUTED and DELIVERED this IS— day of April, 1988 . UNDERWOOD, NEUHAUS & CO. , INC. Houston, Texas BY 'U" I Title aWt-wig ram Form 8038-G Information Return for Tax-Exempt (December 1986) Governmental Bond Issues OMB No 1545 0720 Department of the Treasury D. Under Section 149(e) Expires 12-31-89 Internal Revenue Service (Use Form 8038-GC if issue price is under S100,000.) 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 Glgg 8 _ 1 5 City or town,state.and 2IP code 6 Date of issue Pearland, Texas 77581 April 15 , 1988 • Part II Type of Issue(check box(es)that applies) 7 Check box if bonds are tax or other revenue anticipation bonds► ❑ Issue Price 8 Check box if bonds are in the form of a lease or installment sale► ❑ 9 ❑ Education 10 ❑ Health and hospital 11 ❑ Transportation 12 E Public safety • 13 E Environment(including sewage bonds) 14 E Housing - 15 ® Utilities $2 5 3 , 214 16 ❑ Other. Describe(see instructions)► Part III Description of Bonds (a) (b) (c) (d) (a) (v Stated redemption Weighted (n Net interest Maturity date Interest rate Issue price price at maturity average matunt Yield cost 17 Final maturity . 3—1—9 3 6 . 4 0 % $ 50, 313 $ 50 , 000 %�f/�%/��1��/ ff��/eff�� 18 Entire issue . fglifff $253 , 214 $250, 000 2 . 92 years 5 . 9001 5 . 7927 Part IV Uses of Original Proceeds of Issue(including underwriters'discount) 19 Proceeds used for accrued interest 19 $ 622 . 22 20 Proceeds used for bond issuance costs(including underwriters'discount) 20 $ 3, 2 0 0 . 0 0 21 Proceeds used for credit enhancement 21 —0— 22 Proceeds allocated to reasonably required reserve or replacement fund 22 —0— 23 Proceeds used to refund prior issues 23 —0— 24 Nonrefunding proceeds of the issue(subtract lines 20,21,22,and 23 from line 18,column(c)) . 24 $2 5 0 , 014 . 0 0 Part V Description of Refunded Bonds(complete this part only for refunding bonds) N/A 25 Enter the remaining weighted average maturity of the bonds to be refunded ► years 26 Enter the last date on which the refunded bonds will be called ► 27 Enter the date(s)the refunded bonds were issued ► Part VI Miscellaneous 28 Enter the amount(if any)of the state volume cap allocated to this issue ► N/A 29 Arbitrage rebate: a Check box if the small governmental unit exception to the arbitrage rebate requirement applies b Check box if the 6-month temporary investment exception to the arbitrage rebate requirement is expected to apply ❑ c Check box if you expect to earn and rebate arbitrage profits to the U.S. ❑ 30 Enter the amount of the bonds designated by the issuer under section 265(bX3XB)(ii) ► $2 5 3, 214 31 Pooled financings'. a Check box if any of the proceeeds of this issue are to be used to make loans to other governmental u^its ► ❑ and A enter the amount ► INV// 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 ► N/A , and the date of the issue ► Under penalties of perjury.I ecl re that I have e■amrned this return and accompanying schedules and statements.and to the best of my knowledge and belief, Please they are tr e.correct,and c o to Sign ` � Mayor Here Signature of officer Date ,Tale For Paperwork Reduction Act Notice,see page 1 of the Instructions. Form 8038-G (12-86) PAYING AGENT/REGISTRAR AGREEMENT entered into as of (this "Agreement"), by and between MTrust Corp, National Association, organized and existing under the laws of the United States of America ("MTrust") and the City of Pearland, a political subdivision of the State of Texas located within Brazoria and Harris Counties organized and existing under the Constitution and laws of the State of Texas (the "Issuer"). RECITALS WHEREAS, the Issuer has duly authorized and provided for the issuance of its securities to be issued only in registered form, as to the payment of principal and interest thereon in an aggregate principal amount of $250,000 and titled City of Pearland Texas, Combination Tax and Revenue Certificates of Obligation, Series 1988 (the "Securities"); and WHEREAS, the Issuer has selected MTrust to serve as Paying Agent/Registrar in connection with the payment of the principal of, premium, if any, and interest on said Securities and with respect to the registration, transfer and exchange thereof by the registered owners thereof; and WHEREAS, MTrust has agreed to serve in such capacities for and on behalf of the Issuer and has full power and authority to perform and serve as Paying Agent/Registrar for the Securities; NOW, THEREFORE, it is mutually agreed as follows: ARTICLE ONE APPOINTMENT OF MTRUST AS PAYING AGENT AND REGISTRAR Section 1.01 Appointment. The Issuer hereby appoints MTrust to serve as Paying Agent with respect to the Securities, to pay to the registered owner of the Securities the principal, premium (if any) and interest on the Securities as the same become due and payable to the registered owners thereof; all in accordance with this Agreement and the Security Resolution (hereinafter defined). The Issuer hereby appoints MTrust as Registrar with respect to the Securities and, as Registrar for the Securities, MTrust shall keep and maintain for and on behalf of the Issuer, books and records as to the ownership of said Securities and with respect to the transfer and exchange of said Securities as provided herein and in the Security Resolution. MTrust hereby accepts its appointment and agrees to serve as the Paying Agent and Registrar for the Securities. Section 1.02 Compensation. As compensation for MTrust's services as Paying Agent/Registrar, the Issuer hereby agrees to pay MTrust the fees and amounts set forth in Annex A attached hereto for the remainder of the Fiscal Year during which this Agreement is executed and thereafter the fees and amounts set forth in MTrust's current fee schedule then in effect for services as Paying Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close of the Fiscal year of the Issuer, and shall be effective upon the first day of the following Fiscal Year. -- - In addition, the Issuer agrees to reimburse MTrust upon its request for all reasonable expenses, disbursements and advances (including the reasonable compensation and expenses and disbursements of its agents and counsel) incurred or made by MTrust pursuant to or as a result of, any of the provisions hereof. ARTICLE TWO DEFINITIONS Section 2.01 Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: "Acceleration Date" on any Security means the date on and after which the principal or any or all installments of interest, or both, are due and payable on any Security which has become accelerated pursuant to the terms of the Security. "MTrust Office" means the corporate trust office of MTrust as indicated on page 10. MTrust will notify the Issuer in writing of any change in location of MTrust Office. "Security Resolution" means the resolution, order or ordinance of the governing body of the Issuer pursuant to which the Securities are issued certified by the secretary or any other officer of the Issuer and delivered to MTrust. "Fiscal Year" means the fiscal year of the Issuer ending September 31. "Holder" and "Security Holder" each means a Person in whose name a Security is registered in the Security Register. "Issuer Request" and "Issuer Order" means a written request or order signed in the name of the Issuer by an officer of the governing body of the Issuer or such other person named, or appointed by virtue of holding a particular position with the Issuer, in the Security Resolution as authorized to sign, and delivered to MTrust. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of a government. "Predecessor Securities" of any particular Security means every previous Security evidencing all or a portion of the same obligation as that evidenced by such particular Security (and, for the purposes of this definition, any Security registered and delivered under Section 4.06 in lieu of a mutilated, lost, destroyed or stolen Security shall be deemed to evidence the same obligation as the mutilated, lost, destroyed or stolen Security. "Redemption Date" when used with respect to any Security to be redeemed means the date fixed for such redemption pursuant to the terms of the Security Resolution. "Responsible Officer" when used with respect to MTrust means the Chairman or Vice-Chairman of the Board of Directors, the Chairman or Vice-Chairman of the Executive Committee of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of MTrust customarily performing functions similar to those performed by any of the -2- above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Security Register" means the books and records to be maintained by MTrust on behalf of the Issuer relating to the registration, transfer, exchange, and payment of the Securities. "Stated Maturity" means the date specified in the Security Resolution as the fixed date on which the principal of the Security is scheduled to be due and payable. Section 2.02. Other Definitions. The terms "MTrust," "Issuer" and "Security" have the meanings assigned to them in the recital paragraphs of this Agreement. The term "Paying Agent/Registrar" refers to MTrust when it is performing the functions associated with such terms in this Agreement. Section 2.03. Construction of Terms. If appropriate in the context of this Agreement, words of the singular number shall be considered to include the plural, words of the plural shall be considered to include the singular, and words of the masculine, feminine, or neuter gender shall be considered to include the other genders. ARTICLE THREE PAYING AGENT Section 3.01. Duties of Paying Agent. As Paying Agent, MTrust shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of each Security at its Stated Maturity, Redemption Date, or Acceleration Date to the holder upon surrender of the Security certificate to MTrust at the MTrust Office. As Paying Agent, MTrust shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each Security when due. MTrust shall compute the amount of interest to be paid each Holder, and shall prepare and send a check in such amount by United States mail (first class postage prepaid) on or prior to each interest payment date, to the Holder of each Security (or Predecessor Securities) whose name appears in the Security Register on the record date. Such checks shall be mailed in such manner to such Holder the address for each such Holder appearing on the Security Register, or shall be transmitted to such Holder on each interest payment date by such other method acceptable to MTrust, requested in writing by, and at the risk and expense of, the Holder. Section 3.03 Payment Dates. The Issuer hereby instructs MTrust to pay the principal of and interest on the Securities at the dates specified in the Security Resolution. -3- ARTICLE FOUR REGISTRAR Section 4.01 Transfer and Exchange. MTrust agrees to keep and maintain for and on behalf of the Issuer at the MTrust Office, books and records (herein sometimes referred to as the "Security Register") for recording the names and addresses of the Holders of the Securities, the transfer, exchange and replacement of the Securities and the payment of the principal of and interest on the Securities to the Holders and containing such other information as may be reasonably required by the Issuer and subject to such reasonable regulations as the Issuer and MTrust may prescribe. All transfers, exchanges and replacement of Securities shall be noted in the Security Register. Every Security certificate surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument or transfer, the signature on which has been guaranteed by an officer of a federal or state bank or a member of the National Association of Securities Dealers, in form satisfactory to MTrust, duly executed by the Holder or his attorney duly authorized in writing. As a condition to effecting a re-registration, transfer or exchange of the Securities, the Registrar may request any supporting documentation it feels necessary to effect a re- registration, transfer or exchange of the Securities. To the extent possible and under reasonable circumstances, MTrust agrees that, in relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof will be completed and new Securities delivered to the Holder or the assignee of the Holder in not more than three (3) business days after the receipt of the Securities to be cancelled in an exchange or transfer and the written instrument of transfer or request for exchange duly executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the Paying Agent/Registrar. Section 4.02. Certificates. The Issuer shall provide the Registrar with an adequate inventory of Securities certificates to facilitate transfers. MTrust covenants that it will maintain the Securities certificates in safekeeping and will use reasonable care in maintaining such Securities certificates in safekeeping, which shall be not less than the level of care it maintains for debt securities of other governments or corporations for which it serves as registrar, or which it maintains for its own securities. Section 4.03. Form of Security Register. MTrust as Registrar will maintain the records of the Security Register in accordance with MTrust's general practices and procedures in effect from time to time. MTrust shall not be obligated to maintain such Register in any form other than those which MTrust has currently available and currently utilizes at the time. The Security Register may be maintained in written form or in any other form capable of being converted into written form within a reasonable time. -4- Section 4.04 List of Security Holders. MTrust will provide the Issuer at any time requested by the Issuer, upon payment of the required fee, a copy of the information contained in the Security Register. The Issuer may also inspect the information in the Security Register at any time MTrust is customarily open for business, provided that reasonable time is allowed MTrust to provide an up-to-date listing or to convert the information into written form. MTrust will not release or disclose the content of the Security Register to any Person other than to, or at the written request of, an authorized officer or employee of the Issuer as specified in an Issuer Order, except upon receipt of a subpoena or court order. Upon receipt of a subpoena or court order MTrust will notify the Issuer so that the Issuer may contest the subpoena or court order. Section 4.05 Return of Cancelled Certificates. MTrust will, at such reasonable intervals as it determines, surrender to the Issuer those Securities certificates in lieu of which or in exchange for which other Securities certificates have been issued, or which have been paid. Section 4.06 Mutilated, Destroyed, Lost, or Stolen Securities Certificates. The Issuer hereby instructs MTrust to deliver and issue Securities certificates in exchange for or in lieu of mutilated, destroyed, lost or stolen Securities certificates as long as the same does not result in an overissuance. MTrust will issue and deliver a new Security certificate in exchange for a mutilated Security certificate surrendered to it. MTrust will issue a new Security certificate in lieu of a Security certificate for which it received written representation from the Holder that the certificate representing such Security is destroyed, lost, or stolen; without the surrender or production of the original certificate. MTrust will pay on behalf of the Issuer the unpaid principal and premium, if any, of a Security at the Stated Maturity or on the Redemption Date or Acceleration Date, for which it receives written representation that the certificate representing such Security is destroyed, lost or stolen without the surrender or production of the original certificate. MTrust will not issue a replacement Security certificate or pay such replacement Security certificate unless there is delivered to MTrust such security or indemnity as it may require (which may be by MTrust's blanket bond) to save both MTrust and the Issuer harmless. On satisfaction of MTrust and the Issuer that a Security certificate has been mutilated, destroyed, lost, or stolen, the certificate number on the mutilated, destroyed, lost, or stolen Security certificate will be cancelled with a notation that it has been mutilated, destroyed, lost or stolen and a new Security certificate will be issued of the same series and of like tenor and principal amount bearing a number (according to the Security Register) not contemporaneously outstanding. MTrust may charge the Holder MTrust's fees and expense in connection with issuing a new Security certificate in lieu of or exchange for a mutilated, destroyed, lost or stolen Security certificate. -5- The Issuer hereby accepts MTrust's current blanket bond for lost, stolen, or destroyed certificates and any future substitute blanket bond for lost, stolen, or destroyed certificates that MTrust may arrange, and agrees that the coverage under any such blanket bond is acceptable to it and meets the Issuer's requirements as to security or indemnity. MTrust need not notify the Issuer of any changes in the security or other company giving such bond or the terms of any such bond. An any time MTrust is customarily open for business, the blanket bond then utilized for the purpose of lost, stolen or destroyed certificates by MTrust shall be available for inspection by the Issuer on request. Section 4.07 Transaction Information to Issuer. MTrust will, within a reasonable time after receipt of an Issuer Request; furnish the Issuer information as to the Securities it has paid pursuant to 3.01, Security certificate it has delivered upon the transfer or exchange of any Security certificates pursuant to Section 4.01 and Security certificates it has delivered in exchange for or in lieu of mutilated, destroyed, lost or stolen Security certificates pursuant to Section 4.06. ARTICLE FIVE MTRUST Section 5.01 Duties of MTrust MTrust undertakes to perform the duties set forth herein and agrees to use reasonable care in the performance thereof. Section 5.02 Reliance on Documents. Etc. (a) MTrust may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions furnished to MTrust by the Issuer. (b) MTrust shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved in a court of competent jurisdiction that MTrust was negligent in ascertaining the pertinent facts. (c) No provision of this Agreement shall require MTrust to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risk or liability is not assured to it. (d) MTrust may rely and shall be protected by the Issuer against any claim by the Issuer or any other Person in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Without limiting the generality of the foregoing statement, MTrust need not examine the ownership of any Securities, but is protected in acting upon receipt of a Security certificate containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Holder or an agent of the Holder. MTrust shall not be bound to make any investigation into the facts or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security or other paper or document supplied by Issuer. -6- (e) MTrust may consult with legal counsel, and the written advice of such counsel or any opinion of counsel shall be full and complete authorization and protection with respect to any action taken, suffered or omitted by it hereunder in good faith and in reliance therein; provided that any such written advice or opinion is supplied to the Issuer by MTrust. (f) MTrust may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys of MTrust. Section 5.03 Recitals of Issuer. The recitals contained herein other than any recital relating to the power and authority of MTrust under this Agreement and in the Securities shall be taken as the statements of the Issuer, and MTrust assumes no responsibility for their correctness. MTrust shall in no event be liable to the Issuer, any Holder or Holders of any Security or any other Person for any amount due on any Security from its own funds. Section 5.04 May Hold Securities. MTrust, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the same rights it would have if it were not the Paying Agent/Registrar, or any other agent; provided that such dealings do not result in a breach of any duties or agreements imposed by this Agreement. Section 5.05 Moneys Held by MTrust. Funds held by MTrust hereunder need not be segregated from any other funds provided appropriate accounts are maintained in the name and for the benefit of the Issuer. MTrust shall be under no liability for interest on any money received by it hereunder. Any money deposited with MTrust for the payment of the principal, premium (if any) or interest on any Security and remaining unclaimed for three years after the Security has become due and payable at the stated maturity will be reported and turned over to the State of Texas pursuant to Senate Bill 581, Title 6, Chapter 72, Abandonment of Personal Property. Section 5.06. Interpleader. The Issuer and MTrust agree that MTrust may seek adjudication of any adverse claim, demand or controversy over its person as well as funds on deposit, in any Federal or State District Court located in the State and County where either the MTrust Office or the Administrative Office of the Issuer is located, and agree that service of process by certified or registered mail, return receipt requested, to the address referred to in section 6.03 of this Agreement shall constitute adequate service. The Issuer and MTrust further agree that MTrust has the right to file a Bill of Interpleader in any court of competent jurisdiction to determine the rights of any Person claiming any interest herein. Section 5.07 Depository Services. It is hereby represented and warranted that, in the event the Securities are otherwise qualified and accepted for Depository Trust Company or equivalent depository trust service by other organizations, MTrust has the capability and, to the extent within -7- Section 6.09 Counterparts. This Agreement may be executed in any number of counterparts, each which shall be deemed an original and all of which shall constitute one and the same Agreement. Section 6.10 Termination. This Agreement will terminate (i) on the date of final payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be earlier terminated by either party upon sixty (60) days written notice; provided, however, an early termination of this Agreement by either party shall not be effective until (a) a successor Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and (b) notice given to the Holders of the Securities of the appointment of a successor Paying/Agent/Registrar. Furthermore, MTrust and Issuer mutually agree that the effective date of an early termination of this Agreement shall not occur at any time which would disrupt, delay or otherwise adversely affect the payment of the Securities. Upon an early termination of this Agreement, MTrust agrees to promptly transfer and deliver the Security Register (or a copy therefore), together with other pertinent books and records relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by the Issuer. The provisions of Section 1.02 and of Article Five shall survive, and remain in full force and effect following the termination of this Agreement. Section 6.11 Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. CITY OF PEARL NP, TEXAS By: . �Gv1-z- ,(e....." Title: Mayor, City of Pearland, Texas [SEAL] Attest: Address: City of Pearland I&A3519 Liberty Pearland, Texas 77581 Title: Cit Secretary (9) MTRUST CORP, NATIONAL ASSOCIATION BY: 7Jo--Q27&_p_ , } Assistant Vice Pre ent [SEAL] Attest: Mailing Address: f` MTrust Corp, National Association Debt Administration Division Tit, First Vice President PO Box 3285 Houston, Texas 77253 Delivery Address: MTrust Corp, National Association Debt Administration Division 333 Clay, 3 Allen Center 5th Floor Houston, Texas 77002 (10) �1MM ...Mrs -- - - a11� .�� w� ��wr �� r /u ANNEX A CORPORATE SERVICES PAYING AGENT/REGISTRAR FEES FOR BOND ISSUES $2,000,000 OR LESS We offer comprehensive Paying Agent/Registrar services for Municipalities issuing tax exempt debt securities. Through our commitment to excellence and controlled growth philosophy, we can assure you a consistently high level of service and responsiveness. CLOSING AND ACCOUNT SET-UP CERTIFICATE ISSUANCE We review the documents, work closely with the Issuer, Financial We provide for the safekeeping of blank and cancelled certificates, Advisor, Underwriter, Bond Counsel, and Bond Printer to establish cancellation and reregistration of certificates on a timely basis, the necessary records and to achieve the proper distribution at immediate updating of records, legal transfers. and the replace- closing. In addition, we provide facilities for closing and the ment of lost,stolen,and mutilated certificates. transfer of funds if requested. Closing(one-time fee) $300.00 Certificate Issuance Fee is included in Account Maintenance Includes Initial Certificate Issuance ACCOUNT MAINTENANCE REDEMPTIONS We maintain all Issuer and Bondholder records (which include We provide for the receipt and cancellation of certificates on the name, address, tax identification, account types, and certificate matured or called bonds, timely issuance of checks and updating detail). In addition, we provide timely notices of payment, timely of records,and response to Issuer and Bondholder inquiries. updating of Bondholder records, issuance of semiannual interest payments, response to all Issuer and Bondholder inquiries, and Cancellation of Certificates and Checks Issued are included in appropriate tax reporting. Account Maintenance Semiannual Charge ADDITIONAL SERVICES Base Fee(includes the first 30 Accounts) 250.00 Fees are based upon time and project responsibility. Bond Calls 1. Lottery(selection of Bonds to be called) 2. Publication of call 3. Mailing of Call Notices to Bondholders ADDITIONAL SERVICES(Continued) MISCELLANEOUS Bondholder List Special Services Printing of names,each $ .03 Services not anticipated at the time of issuance, but deemed Minimum printing fee $100.00 necessary or desirable by the customer will be subject to additional charges based upon the services performed and responsibilities assumed. Gummed Labels Out-of-Pocket Expenses Label preparation,each $ .05 The costs for professional services (such as attorneys and Minimum preparation fee $100.00 accountants), postage, courier services, insurance, stationery, telephone,travel to closing,etc.will be billed at cost. Transfer Sheets Billing Period Semiannual $200.00 Fees and expenses will be billed semiannually and will be included on the statement requesting funds for interest and principal payment. List and labels can be requested in various formats such as: By State By Zip Code By Size By Type(Individuals,Brokers,Nominees,etc.) By Maturity of any of the above ACCEPTED: IL MustA Momentum Company DATE: Austin/San Antonio Dallas Fort Worth Houston P.O.Box 2266 P.O.Box 655415 P.O.Box 910 P.O.Box 3285 Austin,TX 78780 Dallas,TX 75265 Fort Worth,TX 76101 Houston,TX 77253 (512)479-5132 (214)698-6987 (817)334-9310 (713)751-7237 Effective 1/1/87 ommir Gomm mom' REGISTRAR' S RECEIPT The undersigned duly authorized representative of MTrust Corp, the registrar of the following described certificates: CITY OF PEARLAND, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1988 , in the total authorized aggregate amount of $250 , 000 , certifies that it has duly registered the above mentioned certificates in accordance with the Ordinance, dated March 14 , 1988 , and that said certificates have been delivered to the purchaser. EXECUTED AND DELIVERED this 15th day of April, 1988 . BY £ )IL / dji Title Iru f try 1 PURCHASER'S RECEIPT THE STATE OF TEXAS 5 COUNTY OF HARRIS § The undersigned duly authorized representative of Underwood, Neuhaus & Co. , Inc. , the purchaser of the following described certificates: CITY OF PEARLAND, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1988 , dated April 1 , 1988 , in the total aggregate amount of $250 , 000 , acknowledges that the certificate have been delivered and received in the proper form and in accordance with the terms of issuance of said certificates; and certifies that the certificates have been paid for in full at a price equal to the principal amount of the certifi- cates, plus accrued interest to the date of delivery. EXECUTED AND DELIVERED this 15th day of April, 1988 . UNDERWOOD, NEUHAUS & CO. , INC. BY C Title CR 'GJ� RECEIPT AND NO-LITIGATION CERTIFICATE THE STATE OF TEXAS § COUNTIES OF BRAZORIA § AND HARRIS CITY OF PEARLAND § We, the undersigned officers of the CITY OF PEARLAND, TEXAS (the "City") , do hereby certify, as of the date set forth below, then following: 1 . On Aril IS- ' M9 r , we delivered, or caused to be delivered, to the purchaser thereof the following certificates (the "Certificates") : CITY OF PEARLAND, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1988 , dated April 1 , 1988 , in the principal amount of $250 ,000 . 2 . At the time of such delivery, the City received from the purchaser full payment for the Certificates in keeping with the ordinance authorizing the issuance thereof, such full purchase price being $250, 000 , plus accrued interest on the Certificates to the date of delivery. 3 . At the time of delivery of the Certificates, (a) no litigation of any nature has been filed or is now pending which contests or attacks the validity of the Certificates, which would restrain or enjoin the issuance or delivery of the Certificates; which would restrain or enjoin the collection or pledge of funds from which the Certificates 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 Certificates; 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 Certificates 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 Certificates have been repealed, rescinded or revoked; and (c) no additional bonds, warrants or other indebtedness payable from the same source as the Certificates have been issued since the date of the General Certificate submitted to the Attorney General of Texas in connection with the approval of the Certificates. Omm SIGNED AND SEALED as of, and delivered on, the date of delivery of the Certificates set forth above. K __>--)47}1-‘-' ,-5:-29/ Mayor CITY OF PEARLAND, TEXAS Atl �.c.�e.� City S cretary CITY OF PEARLAND, TEXAS (CITY SEAL) E fflE I - o = o :•- a - � 0 : t ..� q o Ziltl� D STRIPES_ RIBA � ° � �°', ° .' a _ o o� o f - 4 Jdi '4 4•1 1 r4 4.c _ 't, -c 1 :_i;is,4 Y 4 4 4 �. _ `4 4 1�{:4-- . --- 4- -s 4 i.-- 1 k,p :- � REGISTERED REGISTERED i ' two i°. 1 `.tom NUMBER I STATE OF TEXAS DI)'L:L,.A'K ;� �, po �i� COUNTIES OF BRAZORIA AND HARRIS 1 ,,...;„,„,,,. 1 1 4• . a (Situ of j1earlttnb, earn , ,4,. _____ ,,.. Cnumbinatiun Oax and ittruenut „....t„x ,,` ` C1ertif sate of (@bligation '" 17-- , # 1 -•, , SERIES 1988 • `"''',.;,4 INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP: *� a�" "c l April 1, 1988 i ,,. I . , f •( ' REGISTERED OWNER: io,,-,-.. !i a1 J 1fi J I , I c V3('., 1 t' /- tO ' I816 `/ PRINCIPAL AMOUNT: DOLLARS ; ,,� IC THE CITY OF PEARLAND,TEXAS(the"City"),promises to pay to the Registered Owner identified above, Certificate is payable by check on September I, 1988,and semiannually thereafter on each March 1 and September I, ; or registered assigns,on the date specified above,upon presentation and surrender of this certificate at the principal mailed to the registered owner as shown on the books of registration kept by the Registrar as of the 15th calendar i' '.(s cI ^'r corporate trust office of MTrust Corp,National Association,Houston,Texas(the"Registrar''),the principal amount date of the month next preceding each interest payment date or,at the request and at the risk and expense of the registered i�p z identified above,payable in any coin or currency of the United States of America which on the date of payment of owner, in such other manner as may be acceptable to the registered owner and the Registrar. I , such principal is legal tender for the payment of debts due the United States of America,and to pay interest thereon REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS CERTIFICATE SET FORTH 1 .4 at the rate shown above,calculated on the basis of a 360-day year of twelve 30-day months,from the later of April I, ON THE REVERSE HEREOF,WHICH PROVISIONS SHALL HAVE THE SAME FORCE AND EFFECT AS IF I. F(',.,V .e(I,:,, 1988,or the most recent interest payment date to which interest has been paid or duly provided for. Interest on this SET FORTH AT THIS PLACE. `<.. - IN WITNESS WHEREOF,this Certificate has been signed with the manual or facsimile signature of the Mayor of the City and countersigned with the manual or facsimile signature of the City Secretary of the City,and the official ,r: 4 seal of the City has been duly impressed,or placed in facsimile,on this Certificate. , "'. AUTHENTICATION CERTIFICATE t ") 4 . •.• It is hereby certified that this Certificate has been delivered pursuant to the Ordinance described I . • • :•" • .: •• • • in the text of this Certificate,in exchange for or in replacement of a Certificate,Certificates or a portion " ^ • • • ••. • ; °• • of a Certificate or Certificates 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.I I CITI•CePE4>,'RLAND,TEXAS • ��unurrr • •'• •;•• •• •; , ?0E."' I. rc„'.0.� MTrust Corp,National Association 1 I • .,tea • 1 ' �'. Houston, Texas I ' Imo' ,o // •,•. •• • ="' �` '1O' Date of Authentication: :,l '' I City Secretary • • • • ••• ••• ¢Isr•• • •• • i ^"" S'hc' per ; •• ••• •• • • • • • •• • • ...• t bd' • • • • • • • • • •• e, I . �nunicc By I Ihf io,, Authorized Signature 1 Slagi i Io : f. � 4r.: .c..� _� �. r ., ,.. ...; ,. . . . ... , ,.,._ A ,s v. _: :c � �� cv. . � �' - � � C � v � � : � C�� < r.: ...4,,„ oit , ' �� . .: THIS CERTIFICATE a one of a duly authorised issue of Cern(cates of Oblegalnn.aggrega1eng S230.000 Wye"Cenilicates"1. IT IS HEREBY tenth..ecnt a.covenanted that this Certificate has been duly awl validly trued a.delivered:that all acts. ssued in accordance with the Constitution and laws of the Slate of Texas,particularly Sections 271.a 1-271.OFT,Texas Local Govern- conditions and thugs required or proper to be performed.to exia and to he done precedent to w in Id Iasunse aNd delevery of this w m Code.maW evden e. amended,for the purpose of ring de endebrd tm ness of the City for all or any pan of the cost of cwuaion of public C.a..have been performed.cold and have been done N rconiNte ode law;and that annual ad valorem taxes auR eem to provide orts nulling a final landfill ewer:wrebning materials,..pplrs.cqu9atent,machenen.and ate thin of pink.,,S.mica...rrtd for the payment of to interest on and principal of Nis Certificate.as such enterer tames due and such pnneipal manor.have been month.en therewith,pursuant to an ord.aac duly adopted by dr City Carnal of the City Idr"Ordinance"),which Ordinance levied a.ordered to he leveed.within the harts prescribed M law.agonise all laubk popeny in the Coy ea of record in the office.minutes of the Cl!)CuurciI. IT IS FURTHER cerf.d,recited a.represented that the revenues to be dented from the operation of the waterworks system THIS CERTIFICATE o transferable only upon presentation and wrneder at the principal corporate nun office of the Resew.. of the City.afar Ur payment of all operation and maintmrn¢expenses thereof Ithe"Net Revenues',areedged to the pair.ofendorseddulyendorsedfor h r onorer or compamed by an•ssigrla ta duly executed by the register.owner a stir ran authorised representative.s tie praxis.of and Intercernd O,. Nu Certificate a the rm.of C.. b tee s Alof which his•pan to o pledged ext.that taxes may ever. 1t tod the terms a eod rredeteons of the Ordenee. Insufficient or unavailable for r purpose:proved.. ..bow that such pledge of Na d Revenues is a Nall be janor and duule rubor THE CERTIFICATES are exchangeable•to pnnnpal mrpwale oust office of to Reg,drar for Coldfrolt.in de ponce.armua in all respects to the pledge of such Na Revewes to the payment of any obligation of the City,whether author..heretofore or hereafter. of SS.000 ter any integral mahpk thereof.Ns.to to toms and conditions of the OSmaae which the Cry deugnres as haveng a pledge senor to the pledge of such Na Revenue,to to paymee of der,Certif..and the lria THIS CERTIFICATE shall no be sand a obligatory for any purpose or be malled to any benefit under the Ordaurce unless of Cenilola of which n Is a pan,and the City also reserves tie nest to issue.for any lawful purpose at any time,in mew more this Certificate either lie is registered by the Comptroller of Publ.Accounts of the Sue of Team by registration tern..aeached installments.bonds.eeneficata of obligation a.other ablegwms of any kind payable N whole or.pan from the Na Revenues of or affixed hereto or lit)•authenticated by the Registrar by due execution of the•utleeraian aw.f endorsed heron. the waterworks system.secured by a pledge of tie Net Revenues of the waterworks system tat may be poor and opener en right to, THE REGISTERED OWNER of Nu Cenif e.by acceptance hereof,acknowledges and agrees to be brad by all the temps on a panty with.II tumor and subordinate to the pledge of Net Revenues securing this Coln-Kate and the sews of Cenlfx-aI4 of worth and conditions of the OMnance. it es a ion. THE CRY b.mvenantetl in the Ordinance that d will at all lima provide a legally qualified registrar for the Certificates ad will cause nonce of any change of egianr to be mail.to each register.owner. VINSON a EUONS ATTORNEYS AT lAW ]lad FIRST CRY TOWER • ION FANNN HOUSTON.TEXAS Tr002-07B0 • • WE HAVE ACTED as food counsel for the CIry of Parlend.Team Ithe"CIry"1.In emnelnn wile en Item M ceni.Ia of THE RIGHTS OF THE HOLDERS of the Centric..are subject to De applicably provisions of the federal barrkmpcy laws and obligation Ire"Certif..",described as follows: any other similar law,affecting the rights of creditors of political subliver..geTINIly. •• • •• CITY OF PEARLAND,TEXAS.COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION.SERIES IT IS OUR FURTHER OPINION that. •r •• •••• 1988.dated April I.1988,in the toad authwued aggregate amount of$230.1J00. •. III Interest on the Certificate,is excludable from grOais,Mh.c n de holders for federal Income tax purposes under TT Corr more.bar Seat and may be wander.and exchanged as vn sot in tte Cenif and in the Ord... costing law. • •••_ ••••• adopted by the Cry Council of to CCityguru-ulna tetr Nance Me-Oedema."I • •• ` • • 12) Tie Co iftates are not"privre Nevin bad:'est.Ihrmmng 8f SoNtl oTW Revenge Clic of 1980.r Nmed. WE HAVE ACTED as bad counsel far the rule purpose of rendering an opinion w oh respect to the legality and validity of to Ito"Code").and entered on to Certif..a not subjhs•the alerauese miimmm tax orrndotluals tad corpan- Cernfales under to Cauumlion And laws of the Sur of Texas.under which the City rop is acing as a Mane-ode city of the State of Tows. eacepr tut entered on the C.d..C.d..will be awl..en re',MLitt.M both income"and"adjusted canes andwednapect to to excl...of entered on the Certifies.(meagre.aro.for..enterer.Al pose, 'e have not',roar. am trigs"of a....ran.a ether than any 5 corporation.regulated ins eminent cappany,RtfRo•ilma I for purposes or mfed o ngnul proceedings.records.data or other morn.but have third solely ewer the tearer.of cenaka one:ma. .sto b. of cmlpamg as alter-Now minimum tax a..It/ 4rMu Sd"eon ornunt.1st labile. • • •e 10110 not ed g paragraph.We love arum any responsibility with respect.Inc finer-.voodoos or capabllerles of Or Coy • in Ne r a the disclosure thereof en connection wed tie sale en dr Cen1fcates In portals such open...we have relied on e8nsentaums of Ne Cny wit l.001 t to ratters sokly'Min the knowl.ge of IN OUR CAPACITY as bond counsel.we have pan.o o en the prepare,.l1 end have examen.a namcrept oft of pm. the City which we have nut edepedently verified,ao•hgvg revert,c.rinu.n`a. Iuae...I'.0 81 m tht OMwc!aru.- ceed1ngs...IngtotteC T which commafuel op d f -proceeding,1 h Coy.customary cent . f officers. mg those: suns of Ne Cedenice affectthe ystee from gner Income 1I..C,Y .the Celt flirt.f•'federal incomeotax pan agents and representative. f Ne City and ale aM. office...ether fi..h g. ling to Ole...rarer J ,nee posesIf such repo dote -. be 4areg:rrr mcomplae or the CioYails to•w�m/ps Nth.,foegmng covenants of the CAS faOs.We have drown..executed Cenif ate o.R•1 of this owe of the Ordinance.one e. the C'en li a e:mud become includable in gross ewome frog,the date•their owenal denvlry regardless BASED ON SUCH EXAMINATION,IT IS OUR OPINION that the transcript of certelied proceedings ndemes complete legal of the date m which Ne them causing such inelusair Ile•I•.a authority for Ili Nuance of the certificates in roll compliance with the Consoluthen and law,or the State of Texas presently ellectne In the ON naee the City huts designated the CggrM1ti ll Y gwlified tax-exempt 4Iigatioks wrier the Code a.hks male dr and Net therefore the Cuti.rs conmtme Id and legallybe de g obligations f tee City.and that unable properly h h City representations and covenants which we have not e.klj1e l ly fd.no- ry to mastery div ib•i•s qualified Lax-exempt is subject.tee levy of ad valorem taxes th ha limns D abed by pay the( ifoam and the nitre. h obliges ..Bard m such epesematiom a.coverer ANON goner Clot Ne C ificala ai quJmfid uaeaemp obligations IT IS OUR FURTHER OPINION the the net revenue,Ire Net Revenues")to be derived from the eoperalon of the waterer.. under existing la •••• system of the City,after the payment of all operate.and maentewna expenses[hereof,art also pledged.Ne payment of the principal Except as dated above,we express w.e on a,to any lelgral•date orlt al l ship tH comeymelsilhmg from the owner of of and he Ceni.tes to Ne extent Nat Ne uses levied and coffee.f 'yes Anla ffceent or as sh e op a for receipt f on,or dispot of the C ( e a sad Was re p d.fisher.That such pledge of the Na Revenues es a. b shall ) whir.. all II respects to he pledge H Irk to d C 1 -.old. Net I,4c 1?),ol or-exempt obi games tivyfe0llt+n'`la I federal ireemr of the N R to.payment of any oblegatim of to Coy wheNcr authorized heretofore a h he which dr Coy des grates ta - sryu Nano. if and flQood ty and.111�1 utd0 RI ergm e companies. tea with Sub- m Noma a pledge seller to Me pledge of the Na Revenues to the payment of he Cc ebante C g d pie..Nettle.' p Se-fen W01'r Roll 1 R ny+et bent tayp•c. . y fix deem. THE CITY has earned the right to ssue,for any lawful purpose at any lime one or mare lb installments.Ninth.an Icam to has.incurred 01...mowed ndcbedness to purchase or Ajax empt ohllll gat:Win addcertain-Ocean wrarauom doing of obligato n and other drew/nom of any land p•yabk.whole a In pan Imm t.pNo Revenues of lb waterworks system.sear. business m the l need Stars may be auben to the new"bnRsh p �rr on the,effmivelywo•rareeami�s and piths lincldeng by a pledge of to Net Resemws of Ne waterworks system that maybe prior and captor in reghe to,on a Dunn wed.or runny and as exempt Imeest wen as ever!.on the Certificates) • • subordinate Io the pledge of Net Revenues semnng to Certificates. VIN.SON&ECXINS • ••r• I HEREBY CERTIFY Nat the above and foregoing es a rue and correct copy of the legal opinion upon the certificates therm described which was,.rally waned by V rote.&Elkin.Houston.Teaks,and was dated as of the da4 9 detliatrl_a,.M payment for otl anifates. /{-try 7 i.4W4Y C ay Secretary City of Peula..Texas ASSIGNMENT For name received,rho undersigned hereby.rein.aaigm,and iransfers sum IP1mr prim or rime cone.address,ad Tip mar of Transferee) [Plow wen Saul Sermon or Tarpater Mom-keine Number of Transferee) Me...Ain renlfrwe and all nano'herniate,and hereby irreoncobly corms ors and appoinrs anon,so transfer said ceN ficae on the boob kip for eersOor0n thereof,with MI power of s,D.varion in fir premises. DATED Sena:err Gwmme.: NOTICE:Sigma,oust for dwrwteed by a wrestler fine Ado New Yoh.Suet Fir#aagr or a commercial fish or recut cowpony. NOTICE:Then o ere date soar correspond as rho wino tfhr...porn,owur to shoon tin red for.atlus emferare in hen-/wnoular. Manna any Moranae,edarp1rnt or rhaner whaearrer.