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RDAP-2009-08 - 2009-11-23RESOLUTION NO. RDAP-2009-08 A RESOLUTION OF THE DEVELOPMENT AUTHORITY OF PEARLAND (DAP), TEXAS APPROVING A CASH PAYMENT TO SHADOW CREEK RANCH DEVELOPMENT COMPANY LTD TO REIMBURSE FOR TIRZ INFRASTRUCTURE IMPROVEMENTS BE IT RESOLVED BY DAP BOARD OF DIRECTORS: Section 1. That the Board of Directors approves a cash payment in the amount of $4,500,000 to Shadow Creek Ranch Development Company LTD to reimburse for TIRZ infrastructure improvements. PASSED, APPROVED, AND ADOPTED this 23rd day of November, A.D., 2009. TOM REID DAP CHAIRMAN ATTEST: ED BAKER SECRETARY RESOLUTION NO. RDAP-2009-08 RESOLUTION AUTHORIZING THE ISSUANCE OF $7,905,000 DEVELOPMENT AUTHORITY OF PEARLAND TAX INCREMENT CONTRACT REVENUE BONDS, SERIES 2009; APPROVING DOCUMENTS RELATING TO THE SERIES 2009 BONDS; AND CONTAINING OTHER PROVISIONS RELATED THERETO BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE DEVELOPMENT AUTHORITY OF PEARLAND: ARTICLE I RECITALS WHEREAS, by Ordinance No. 891, adopted on December 21, 1998, the City of Pearland (the "City") created Reinvestment Zone Number Two, City of Pearland, Texas (the "TIRZ") pursuant to Chapter 311, Texas Tax Code, and by Ordinance No. 1276, adopted on July 10, 2006, the City approved an annexation of land into the TIRZ; and WHEREAS, by Ordinance No. 918, adopted on August 23, 1999, the City approved a preliminary project plan for the TIRZ and a preliminary reinvestment zone financing plan for the TIRZ, which it amended by Ordinance No. 1276, adopted on July 10, 2006, by Ordinance No. 1312 adopted on November 13, 2006, and by Ordinance No. 1314, adopted on November 13, 2006; and WHEREAS, by Resolution No. 2004-107, adopted on June 28, 2004, the City authorized the creation of the Development Authority of Pearland (the "Authority") to aid, assist and act on behalf of the City in the performance of the City's governmental and proprietary functions with respect to, and to provide financing for the TIRZ; and WHEREAS, by Ordinance No. R2004-17, adopted on October 11, 2004, the City approved and on October 5, 2004, the Boards of Directors of the TIRZ and the Authority approved that certain Agreement by and between the City, the TIRZ, and the Authority, as amended by Amendment No. 1 to the Tri-Party Agreement, dated September 17, 2007 (collectively, the "Tri-Party Agreement"), pursuant to which the City delegated to the Authority the power and authority to issue, sell or deliver its bonds, notes or other obligations in accordance with the terms of the Tri-Party Agreement; and WHEREAS, the Authority has issued its $13,995,000 Tax Increment Contract Revenue Bonds, Series 2004, (the "Series 2004 Bonds"), its $9,775,000 Tax Increment Contract Revenue Bonds, Series 2005 (the "Series 2005 Bonds"), its $9,970,000 Tax Increment Contract Revenue Bonds, Series 2006 (the "Series 2006 Bonds"), and its $15,950,000 Tax Increment Contract Revenue Bonds, Series 2007 (the "Series 2007 Bonds"); and 236630 1 WHEREAS, by Resolution No. R-2009- adopted on May 18, 2009, the City authorized the Authority to issue, sell, or deliver its Tax Increment Contract Revenue Bonds, Series 2009; and WHEREAS, as permitted by the Act, the Authority desires to issue its Tax Increment Contract Revenue Bonds, Series 2009 upon the terms and conditions and for the purposes herein provided. ARTICLE II DEFINITIONS AND INTERPRETATIONS Section 2.1: Definitions. In this Resolution, the following terms shall have the following meanings, unless the context clearly indicates otherwise. Terms not defined herein shall have the meanings assigned to such terms in the Indenture: The term "Audit" shall mean the audited annual financial statements of the Authority prepared by an independent auditor. The term "Business Day" shall mean any day which is not a Saturday, Sunday, or a day on which banking institutions in the city where the designated payment office of the Paying Agent/Registrar is located are authorized by law or executive order to close, or a legal holiday. The term "Comptroller" shall mean the Comptroller of Public Accounts of the State of Texas. The term "DTC" shall mean The Depository Trust Company of New York, New York, or any successor securities depository. The term "DTC Participant" shall mean brokers and dealers, banks, trust companies, clearing corporations and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. The term "Initial Series 2009 Bond" shall mean the Initial Series 2009 Bond authorized by Section 3.4(d). The term "Indenture" shall mean the Indenture of Trust dated as of November 15, 2004, as amended and supplemented by the First Supplemental Trust Indenture, dated October 24, 2005, the Second Supplemental Trust Indenture dated October 2, 2006, and the Third Supplemental Trust Indenture, dated May 18, 2009, between the Authority and Wells Fargo Bank, National Association, as Trustee. 236630 2 The term "Interest Payment Date" shall mean, with respect to the Series 2009 Bonds, September 1, 2009, and each March 1 and September 1 thereafter until maturity or redemption. The term "Issuance Date" shall mean the date on which each such Series 2009 Bond is authenticated by the Paying Agent/Registrar and delivered to and paid for by the Underwriter. The term "Paying Agent/Registrar" shall mean Wells Fargo Bank, National Association, and its successors in that capacity. The term "Record Date" shall mean, for any Interest Payment Date, the fifteenth (15th) calendar day of the month next preceding each Interest Payment Date. The term "Resolution" or "Bond Resolution" shall mean this Resolution Authorizing the Issuance of $7,905,000 Development Authority of Pearland Tax Increment Contract Revenue Bonds, Series 2009, and all amendments hereof and supplements hereto. The term "Series 2009 Bond" or "Series 2009 Bonds" shall mean the Authority's Tax Increment Contract Revenue Bonds, Series 2009 authorized by this Resolution. The term "Underwriter" shall mean First Southwest Company. Section 2.2: Interpretations. All terms defined herein and all pronouns used in this Resolution shall be deemed to apply equally to singular and plural and to all genders. The titles and headings of the articles and sections of this Resolution have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof. This Resolution and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to sustain the validity of the Parity Bonds and the validity of the lien on and pledge of the Pledged Revenues to secure the payment of the Parity Bonds. ARTICLE III TERMS OF THE BONDS Section 3.1: Amount, Purpose, Authorization. The Series 2009 Bonds shall be issued in the aggregate principal amount of $7,905,000 for the purpose of (1) paying Project Costs, (2) funding the Debt Service Reserve Fund Reserve Requirement for the Series 2009 Bonds; and (3) paying Costs of Issuance, all under and pursuant to the authority of the Act and all other applicable law. None of the proceeds of the Series 2009 Bonds shall be used for the purpose of paying or otherwise providing for educational facilities. 236630 3 Section 3.2: Name, Designation, Date, and Interest Payment Dates. The Series 2009 Bonds shall be designated as the "DEVELOPMENT AUTHORITY OF PEARLAND TAX INCREMENT CONTRACT REVENUE BONDS, SERIES 2009," shall be issued in fully registered form, without coupons and shall be dated June 1, 2009 (the "Dated Date"). The Series 2009 Bonds shall bear interest at the rates set forth in Section 3.3 from the later of the Dated Date, or the most recent Interest Payment Date to which interest has been paid or duly provided for, calculated on the basis of a 360-day year of twelve 30-day months, payable, semiannually on March 1 and September 1, commencing September 1, 2009, until maturity or earlier redemption. Section 3.3: Principal Amounts and Interest Rates; Numbers and Denomination. The Series 2009 Bonds shall be initially issued in the principal amounts and bearing interest at the rates set forth below, and may be transferred and exchanged as set out in this Resolution. The Series 2009 Bonds shall mature, subject to prior redemption in accordance with this Resolution, on September 1 in each of the years and in the amounts set out in the following schedule. The Initial Bond shall be numbered I- 1 and all other Series 2009 Bonds shall be numbered in sequence beginning with R-1. Series 2009 Bonds delivered on transfer of or in exchange for other Series 2009 Bonds shall be numbered in the order of their authentication by the Paying Agent/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 Series 2009 Bond or Series 2009 Bonds in lieu of which they are delivered. Principal Maturity Date Interest Amount September 1 Rate $ 95,000 2010 230,000 2011 245,000 2012 260,000 2013 280,000 2014 295,000 2015 315,000 2016 335,000 2017 355,000 2018 385,000 2019 380,000 2020 405,000 2021 425,000 2022 460,000 2023 485,000 2024 520,000 2025 550,000 2026 585,000 2027 236630 4 630,000 2028 670,000 2029 Section 3.4: Execution and Registration of Series 2009 Bonds. (a) The Series 2009 Bonds shall be signed by the Chair or Vice Chair or Director of the Board and countersigned by the Secretary or Director of the Board, by their manual, lithographed, or facsimile signatures. Such facsimile signatures on the Series 2009 Bonds shall have the same effect as if each of the Series 2009 Bonds had been signed manually and in person by each of said Directors or officers. (b) If any Director or officer of the Authority whose manual or facsimile signature shall appear on the Series 2009 Bonds shall cease to be such Director or officer before the authentication of such Series 2009 Bonds or before the delivery of such Series 2009 Bonds, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if such Director or officer had remained in such office. (c) Except as provided below, no Series 2009 Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit of this Resolution unless and until there appears thereon the Paying Agent/Registrar's Authentication Certificate substantially in the form provided herein, duly authenticated by manual execution by an officer or duly authorized signatory of the Paying Agent/Registrar. In lieu of the executed Paying Agent/Registrar's Authentication Certificate described above, the Initial Series 2009 Bond delivered at the Issuance Date shall have attached thereto the Comptroller's Registration Certificate substantially in the form provided herein, manually executed by the Comptroller, or by his duly authorized agent, which certificate shall be evidence that the Initial Series 2009 Bond has been duly approved by the Attorney General of the State of Texas and that it is a valid and binding obligation of the Authority, and has been registered by the Comptroller. (d) On the Issuance Date, the Initial Series 2009 Bond, being a single bond representing the entire principal amount of the Series 2009 Bonds, payable in stated installments to the Underwriter or their designee, executed by manual or facsimile signature of the Chair or Vice Chair and Secretary or Director of the Board, approved by the Attorney General, and registered and manually signed by the Comptroller of Public Accounts, shall be delivered to the Underwriter or their designee. Upon payment for the Initial Series 2009 Bond, the Paying Agent/ Registrar shall cancel the Initial Series 2009 Bond and deliver Series 2009 Bonds to DTC in accordance with Section 3.12. Section 3.5: Payment of Principal and Interest. The Paying Agent/Registrar is hereby appointed as the registrar and paying agent for the Series 2009 Bonds. The principal of the Series 2009 Bonds shall be payable, without exchange or collection charges, in any coin or currency of the United States of America which, on the date of payment, is legal tender for the payment of debts due the United States of America, upon their presentation and surrender as they respectively become due and payable, 236630 5 whether at maturity or by prior redemption, at the designated office of the Paying Agent/Registrar. The interest on each Series 2009 Bond shall be payable by check on the Interest Payment Date, mailed by the Paying Agent/Registrar on or before each Interest Payment Date to the Owner of record as of the Record Date, to the address of such Owner as shown on the Register, or by such other method, acceptable to the Paying Agent/Registrar, requested by and at the risk and expense of the Owner. If the date for the payment of principal or interest on any Series 2009 Bond is not a Business Day, then the date for such payment shall be the next succeeding Business Day, and payment on such date shall have the same force and effect as if made on the original date such payment was due. Section 3.6: Successor Paying Agent/ Registrars. The Authority covenants that at all times while any Series 2009 Bonds are Outstanding it will provide a commercial bank, or trust company or other entity duly qualified and legally authorized to act as Paying Agent/Registrar for the Series 2009 Bonds. The Authority reserves the right to change the Paying Agent/Registrar for the Series 2009 Bonds on not less than sixty (60) days written notice to the Paying Agent/Registrar, so long as any such notice is effective not less than sixty (60) days prior to the next succeeding principal or interest payment date on the Series 2009 Bonds. Promptly upon the appointment of any successor Paying Agent/Registrar, the previous Paying Agent/Registrar shall deliver the Register or a copy thereof to the new Paying Agent/Registrar, and the new Paying Agent/Registrar shall notify each Owner, by United States mail, first class postage prepaid, of such change and of the address of the new Paying Agent/Registrar. Each Paying Agent/Registrar hereunder, by acting in that capacity, shall be deemed to have agreed to the provisions of this Section. Section 3.7: Special Record Date. If interest on any Series 2009 Bond is not paid on any Interest Payment Date and continues unpaid for thirty (30) days thereafter, the Paying Agent/Registrar shall establish a new record date for the payment of such interest, to be known as a "Special Record Date." The Paying Agent/Registrar shall establish a Special Record Date when funds to make such interest payment are received from or on behalf of the Authority. Such Special Record Date shall be fifteen (15) days prior to the date fixed for payment of such past due interest, and notice of the date of payment and the Special Record Date shall be sent by United States mail, first class, postage prepaid, not later than five (5) days prior to the Special Record Date, to each Owner of record of an affected Series 2009 Bond as of the close of business on the day prior to the mailing of such notice. Section 3.8: Ownership; Unclaimed Principal and Interest. Subject to the further provisions of this Section, the Authority, the Paying Agent/Registrar and any other person may treat the person in whose name any Series 2009 Bond is registered as the absolute Owner of such Series 2009 Bond for the purpose of making and receiving payment of the principal of or interest on such Series 2009 Bond, and for all other 236630 purposes, whether or not such Series 2009 Bond is overdue, and neither the Authority nor the Paying Agent/ Registrar shall be bound by any notice or knowledge to the contrary. All payments made to the person deemed to be the Owner of any Series 2009 Bond in accordance with this Section 3.8 shall be valid and effectual and shall discharge the liability of the Authority and the Paying Agent/ Registrar upon such Series 2009 Bond to the extent of the sums paid. Amounts held by the Paying Agent/Registrar which represent principal of and interest on the Series 2009 Bonds remaining unclaimed by the Owner after the expiration of three (3) years from the date such amounts have become due and payable shall be remitted to the Authority, except to the extent that they are required by law to be reported and disposed of by the Paying Agent/Registrar in accordance with the applicable provisions of Texas law including, to the extent applicable, Title 6 of the Texas Property Code, as amended. Section 3.9: Book -Entry OnlyS, sue. (a) The Initial Series 2009 Bond shall be registered in the name of First Southwest Company. Except as provided in Section 3.10 hereof, all other Series 2009 Bonds shall be registered in the name of Cede & Co., as nominee of DTC. (b) With respect to Series 2009 Bonds registered in the name of Cede & Co., as nominee of DTC, the Authority and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such DTC Participant holds an interest in the Series 2009 Bonds, except as provided in this Resolution. Without limiting the immediately preceding sentence, the Authority and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Series 2009 Bonds, (ii) the delivery to any DTC Participant or any other person, other than an Owner, as shown on the Register, of any notice with respect to the Series 2009 Bonds, including any notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than an Owner, as shown on the Register, of any amount with respect to principal of, premium, if any, or interest on the Series 2009 Bonds. Notwithstanding any other provision of this Resolution to the contrary, the Authority and the Paying Agent/ Registrar shall be entitled to treat and consider the person in whose name each Series 2009 Bond is registered in the Register as the absolute Owner of such Series 2009 Bond for the purpose of payment of principal of and interest on the Series 2009 Bonds, for the purpose of giving notices of redemption and other matters with respect to such Series 2009 Bond, for the purpose of registering transfer with respect to such Series 2009 Bond, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of, premium, if any, and interest on the Series 2009 Bonds only to or upon the order of the respective Owners, as shown in the Register as provided in this Resolution, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the Authority's obligations with 236630 7 respect to payments of principal, premium, if any, and interest on the Series 2009 Bonds to the extent of the sum or sums so paid. No person other than an Owner, as shown in the Register, shall receive a Series 2009 Bond certificate evidencing the obligation of the Authority to make payments of amounts due pursuant to this Resolution. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions of this Resolution with respect to interest checks being mailed to the Owner of record as of the Record Date, the phrase "Cede & Co." in this Resolution shall refer to such new nominee of DTC. Section 3.10: Successor Securities Depository; Transfer Outside Book -Entry Only System. In the event that the Authority, in its sole discretion, determines that the beneficial owners of the Series 2009 Bonds shall be able to obtain certificated Series 2009 Bonds, or in the event DTC discontinues the services described herein, the Authority shall (i) appoint a successor securities depository, qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants, as identified by DTC, of the appointment of such successor securities depository and transfer one or more separate Series 2009 Bonds to such successor securities depository or (ii) notify DTC and DTC Participants, as identified by DTC, of the availability through DTC of Series 2009 Bonds and transfer one or more separate Series 2009 Bonds to DTC Participants having Series 2009 Bonds credited to their DTC accounts, as identified by DTC. In such event, the Series 2009 Bonds shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Series 2009 Bonds shall designate, in accordance with the provisions of this Resolution. Section 3.11: Payments to Cede & Co. Notwithstanding any other provision of this Resolution to the contrary, so long as any Series 2009 Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on such Series 2009 Bonds, and all notices with respect to such Series 2009 Bonds, shall be made and given, respectively, in the manner provided in the Blanket Letter of Representations. Section 3.12: Registration, Transfer, and Exchange. So long as any Series 2009 Bonds remain Outstanding, the Paying Agent/Registrar shall keep the Register at its designated office and, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of Series 2009 Bonds in accordance with the terms of this Resolution. Each Series 2009 Bond shall be transferable only upon the presentation and surrender thereof at the designated office of the Paying Agent/Registrar, duly endorsed for transfer, or accompanied by an assignment duly executed by the Registered Owner or his authorized representative in form satisfactory to the Paying Agent/Registrar. 236630 8 Upon due presentation of any Series 2009 Bond in proper form for transfer, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor, a new Series 2009 Bond or Series 2009 Bonds, registered in the name of the transferee or transferees, in authorized denominations and of the same maturity, aggregate principal amount, and Dated Date, and bearing interest at the same rate as the Series 2009 Bond or Series 2009 Bonds so presented. All Series 2009 Bonds shall be exchangeable upon presentation and surrender thereof at the designated office of the Paying Agent/Registrar for a Series 2009 Bond or Series 2009 Bonds of the same maturity, Dated Date, and interest rate and in any authorized denomination, in an aggregate amount equal to the unpaid principal amount of the Series 2009 Bond or Series 2009 Bonds presented for exchange. The Paying Agent/Registrar shall be and is hereby authorized to authenticate and deliver exchange Series 2009 Bonds in accordance with the provisions of this Section 3.12. Each Series 2009 Bond delivered in accordance with this Section 3.12 shall be entitled to the benefits and security of this Resolution to the same extent as the Series 2009 Bond or Series 2009 Bonds in lieu of which such Series 2009 Bond is delivered. The Authority or the Paying Agent/Registrar may require the Owner of any Series 2009 Bond to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with the transfer or exchange of such Series 2009 Bond. Any fee or charge of the Paying Agent/Registrar for such transfer or exchange shall be paid by the Authority. The Paying Agent/Registrar shall not be required to transfer or exchange any Series 2009 Bond during the period beginning on a Record Date or a Special Record Date and ending on the next succeeding Interest Payment Date or to transfer or exchange any Series 2009 Bond called for redemption during the period beginning thirty days prior to the date fixed for redemption and ending on the date fixed for redemption; provided, however, that this limitation shall not apply to the exchange by the Owner of the unredeemed portion of a Series 2009 Bond called for redemption in part. Section 3.13: Cancellation of Series 2009 Bonds. All Series 2009 Bonds paid or redeemed in accordance with this Resolution, and all Series 2009 Bonds in lieu of which exchange Series 2009 Bonds or replacement Series 2009 Bonds are authenticated and delivered in accordance herewith, shall be cancelled upon the making of proper records regarding such payment or redemption and retained in accordance with the Paying Agent/Registrar's document retention policy. Upon request of the Authority therefore, the Paying Agent/Registrar shall furnish the Authority with appropriate certificates of cancellation of such Series 2009 Bonds. Section 3.14: Mutilated, Lost, or Stolen Series 2009 Bonds. Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated Series 2009 236630 9 Bond, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a replacement Series 2009 Bond of like maturity, Dated Date, interest rate and principal amount, bearing a number not contemporaneously Outstanding. The Authority or the Paying Agent/Registrar may require the Owner of such Series 2009 Bond to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith and any other expenses connected therewith, including the fees and expenses of the Paying Agent/ Registrar. If any Series 2009 Bond is lost, apparently destroyed, or wrongfully taken, the Authority, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Series 2009 Bond has been acquired by a bona fide purchaser, shall execute and the Paying Agent/Registrar shall authenticate and deliver a replacement Series 2009 Bond of like maturity, Dated Date, interest rate and principal amount, bearing a number not contemporaneously Outstanding, provided that the Owner thereof shall have: (1) furnished to the Authority and the Paying Agent/Registrar satisfactory evidence of the ownership of and the circumstances of the loss, destruction or theft of such Series 2009 Bond; (2) furnished such security or indemnity as may be required by the Paying Agent/ Registrar and the Authority to save them harmless; (3) paid all expenses and charges in connection therewith, including, but not limited to, printing costs, legal fees, fees of the Paying Agent/Registrar and any tax or other governmental charge that may be imposed; and (4) met any other reasonable requirements of the Authority and the Paying Agent/ Registrar. If, after the delivery of such replacement Series 2009 Bond, a bona fide purchaser of the original Series 2009 Bond in lieu of which such replacement Series 2009 Bond was issued presents for payment such original Series 2009 Bond, the Authority and the Paying Agent/Registrar shall be entitled to recover such replacement Series 2009 Bond from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Authority or the Paying Agent/ Registrar in connection therewith. If any such mutilated, lost, apparently destroyed or wrongfully taken Series 2009 Bond has become or is about to become due and payable, the Authority in its discretion may, instead of issuing a replacement Series 2009 Bond, authorize the Paying Agent/ Registrar to pay such Series 2009 Bond. 236630 10 Each replacement Series 2009 Bond delivered in accordance with this Section 3.14 shall be entitled to the benefits and security of this Resolution to the same extent as the Series 2009 Bond or Series 2009 Bonds in lieu of which such replacement Series 2009 Bond is delivered. Section 3.15: Redemption. The Series 2009 Bonds are subject to optional and mandatory sinking fund redemption on the dates and for the redemption prices set forth in the form of the Series 2009 Bond in this Resolution. Principal amounts may be redeemed only in integral multiples of $5,000. If a Series 2009 Bond subject to redemption is in a denomination larger than $5,000, a portion of such Series 2009 Bond may be redeemed, but only in integral multiples of $5,000. In selecting portions of Series 2009 Bonds for redemption, the Paying Agent/ Registrar shall treat each Series 2009 Bond as representing that number of Series 2009 Bonds of $5,000 denomination which is obtained by dividing the principal amount of such Series 2009 Bond by $5,000. The Paying Agent/ Registrar shall select the particular Series 2009 Bonds to be redeemed within any given maturity by lot or other random selection method. Upon surrender of any Series 2009 Bond for redemption in part, the Paying Agent/Registrar, in accordance with this Resolution, shall authenticate and deliver in exchange therefor a Series 2009 Bond or Series 2009 Bonds of like maturity and interest rate in an aggregate principal amount equal to the unredeemed portion of the Series 2009 Bond so surrendered. Unless waived by the Owner, notice of any redemption identifying the Series 2009 Bonds to be redeemed shall be given as provided in the form of Series 2009 Bond in this Resolution. Any notice given as provided in this Section 3.15 shall be conclusively presumed to have been duly given, whether or not the Owner receives such notice. By the date fixed for redemption, due provision shall be made with the Paying Agent/Registrar for payment of the redemption price of the Series 2009 Bonds or portions thereof to be redeemed, plus accrued interest to the date fixed for redemption. When Series 2009 Bonds have been called for redemption in whole or in part and due provision has been made to redeem the same as herein provided, the Series 2009 Bonds or portions thereof so redeemed shall no longer be regarded as Outstanding except for the purpose of receiving payment solely from the funds so provided for redemption, and the rights of the Owners to collect interest which would otherwise accrue after the redemption date on any Series 2009 Bond or portion thereof called for redemption shall terminate on the date fixed for redemption. Section 3.16: Limited Obligations. THE SERIES 2009 BONDS AND ALL PARITY BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY, PAYABLE SOLELY OUT OF THE PLEDGED REVENUES, WHICH IS THE SOLE ASSET OF THE AUTHORITY PLEDGED THEREFOR. THE SERIES 2009 BONDS ARE OBLIGATIONS SOLELY OF THE AUTHORITY AND DO NOT CONSTITUTE, WITHIN THE MEANING OF ANY STATUTORY OR CONSTITUTIONAL PROVISION, AN 236630 11 INDEBTEDNESS, AN OBLIGATION OR A LOAN OF CREDIT OF THE CITY OF PEARLAND, THE STATE OF TEXAS, ALVIN INDEPENDENT SCHOOL DISTRICT, BRAZORIA COUNTY, FORT BEND COUNTY OR ANY OTHER MUNICIPALITY, COUNTY, OR OTHER MUNICIPAL OR POLITICAL CORPORATION OR SUBDIVISION OF THE STATE OF TEXAS. NEITHER THE CITY OF PEARLAND, ALVIN INDEPENDENT SCHOOL DISTRICT, BRAZORIA COUNTY NOR FORT BEND COUNTY IS OBLIGATED TO MAKE PAYMENTS ON THE SERIES 2009 BONDS. ARTICLE IV FORM OF SERIES 2009 BONDS AND CERTIFICATES Section 4.1: Forms. The form of the Series 2009 Bonds, including the form of the Paying Agent/ Registrar's authentication certificate, the form of assignment, and the form of the Comptroller's Registration Certificate for the Series 2009 Bonds to be initially issued, shall be substantially as follows, with such additions, deletions and variations, as may be necessary or desirable and not prohibited by this Resolution, including any legend regarding bond insurance if such insurance is obtained by the Underwriter: (aa) Form of Bond United States of America State of Texas Number Registered DEVELOPMENT AUTHORITY OF PEARLAND TAX INCREMENT CONTRACT REVENUE BOND SERIES 2009 INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP: June 1, 2009 REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS The DEVELOPMENT AUTHORITY OF PEARLAND (the "Authority'), a not - for -profit local government corporation created by the City of Pearland (the "City"), in the Counties of Brazoria and Fort Bend, in the State of Texas, for value received, promises to pay, but solely from certain Pledged Revenues as hereinafter provided, to 236630 12 the Registered Owner identified above or registered assigns, on the Maturity Date specified above, upon presentation and surrender of this Series 2009 Bond at the designated office of the Paying Agent/Registrar (the "Paying Agent/Registrar"), initially, Wells Fargo Bank, National Association, the principal amount identified above, in any coin or currency of the United States of America which on the date of payment of such principal is legal tender for the payment of debts due the United States of America, and to pay, solely from such Pledged Revenues, interest thereon at the rate shown above, calculated on the basis of a 360-day year of twelve 30-day months, from the later of the Dated Date identified above, or the most recent interest payment date to which interest has been paid or duly provided for. Interest on this Series 2009 Bond is payable by check on March 1 and September 1, beginning on September 1, 2009, mailed to the Registered Owner as shown on the books of registration kept by the Paying Agent/Registrar as of the fifteenth (15th) calendar day of the month next preceding each interest payment date, or by such other method, acceptable to the Paying Agent/ Registrar, requested by and at the risk and expense of the Registered Owner. THE SERIES 2009 BONDS AND ALL PARITY BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY, PAYABLE SOLELY OUT OF THE PLEDGED REVENUES, WHICH IS THE SOLE ASSET OF THE AUTHORITY PLEDGED THEREFOR. THE SERIES 2009 BONDS ARE OBLIGATIONS SOLELY OF THE AUTHORITY AND DO NOT CONSTITUTE, WITHIN THE MEANING OF ANY STATUTORY OR CONSTITUTIONAL PROVISION, AN INDEBTEDNESS, AN OBLIGATION OR A LOAN OF CREDIT OF THE CITY OF PEARLAND, THE STATE OF TEXAS, ALVIN INDEPENDENT SCHOOL DISTRICT, BRAZORIA COUNTY, FORT BEND COUNTY OR ANY OTHER MUNICIPALITY, COUNTY, OR OTHER MUNICIPAL OR POLITICAL CORPORATION OR SUBDIVISION OF THE STATE OF TEXAS. NEITHER THE CITY OF PEARLAND, ALVIN INDEPENDENT SCHOOL DISTRICT, BRAZORIA COUNTY NOR FORT BEND COUNTY IS OBLIGATED TO MAKE PAYMENTS ON THE SERIES 2009 BONDS. THIS SERIES 2009 BOND IS ONE OF A DULY AUTHORIZED SERIES OF SERIES 2009 BONDS aggregating $7,905,000 issued for the purpose of (1) paying Project Costs, (2) funding the Debt Service Reserve Fund Reserve Requirement for the Series 2009 Bonds; and (3) paying Costs of Issuance, all under and pursuant to the authority of the Act and all other applicable laws, and a resolution adopted by the Authority on May 18, 2009 (the "Resolution"). None of the proceeds of the Series 2009 Bonds shall be used for the purpose of paying or otherwise providing for educational facilities. THIS SERIES 2009 BOND AND THE SERIES OF WHICH IT IS A PART are limited obligations of the Authority that are together with all other Parity Bonds heretofore or hereafter issued under the Indenture described below, payable from, and are equally and ratably secured by a lien on the Pledged Revenues, which include the Contract Tax Increments, moneys on deposit in the Pledged Revenue Fund, the Debt Service Fund, and the Debt Service Reserve Fund, and interest earned on moneys 236630 13 deposited therein, as defined and more fully provided in the Indenture of Trust dated as of November 15, 2004, as amended and supplemented by the First Supplemental Trust Indenture, dated October 24, 2005, the Second Supplemental Trust Indenture, dated October 2, 2006, and the Third Supplemental Trust Indenture, dated May 18, 2009, between the Authority and Wells Fargo Bank, National Association, as Trustee (the "Indenture"). This Series 2009 Bond and the series of which it is a part and all other Parity Bonds, together with the interest thereon, are payable solely from such Pledged Revenues. THE AUTHORITY RESERVES THE RIGHT to redeem Series 2009 Bonds maturing on or after September 1, 2019, in whole or in part from time to time, in integral multiples of $5,000, on September 1, 2018, or any date thereafter at par plus accrued interest on the principal amounts called for redemption to the date fixed for redemption. Reference is made to the Resolution for complete details concerning the manner of redeeming the Series 2009 Bonds. IN ADDITION TO BEING SUBJECT TO OPTIONAL REDEMPTION, THE BONDS ISSUED AS TERM BONDS maturing on September 1, (collectively, the "Term Bonds") are subject to mandatory redemption prior to maturity in the following amounts (subject to reduction as hereinafter provided), on the following dates ("Mandatory Redemption Dates"), at a price equal to the principal amount redeemed plus accrued interest to each Mandatory Redemption Date, subject to the conditions set forth below: TERM BOND Mandatory Redemption Principal Amount ON OR BEFORE 30 days prior to each Mandatory Redemption Date set forth above, the Registrar shall (i) determine the principal amount of such Term Bond that must be mandatorily redeemed on such Mandatory Redemption Date, after taking into account deliveries for cancellation and optional redemptions as more fully provided for below, (ii) select, by lot or other customary random method, the Term Bond or portions of the Term Bond of such maturity to be mandatorily redeemed on such Mandatory Redemption Date, and (iii) give notice of such redemption as provided in the Bond Resolution. The principal amount of any Term Bond to be mandatorily redeemed on such Mandatory Redemption Date shall be reduced by the principal amount of such Term Bond which, by the 45th day prior to such Mandatory Redemption Date, either has been purchased in the open market and delivered or tendered for cancellation by or on behalf of the Authority to the Paying Agent/Registrar or optionally redeemed and 236630 14 which, in either case, has not previously been made the basis for a reduction under this sentence. UNLESS WAIVED BY THE OWNER, NOTICE OF ANY REDEMPTION shall be given at least thirty (30) days prior to the date fixed for redemption by first class mail, addressed to the Registered Owners of each Series 2009 Bond to be redeemed in whole or in part at the address shown on the books of registration kept by the Paying Agent/Registrar. Such notices shall state the redemption date, the redemption price, the place at which Series 2009 Bonds are to be surrendered for payment and, if less than all Series 2009 Bonds Outstanding of a particular maturity are to be redeemed, the numbers of the Series 2009 Bonds or portions thereof of such maturity to be redeemed. When Series 2009 Bonds or portions thereof have been called for redemption, and due provision has been made to redeem the same, the principal amounts so redeemed shall be payable solely from the funds provided for redemption, and interest which would otherwise accrue on the amounts called for redemption shall terminate on the date fixed for redemption. THIS SERIES 2009 BOND IS TRANSFERABLE only upon presentation and surrender at the designated office of the Paying Agent/Registrar, duly endorsed for transfer or accompanied by an assignment duly executed by the Registered Owner or his authorized representative, subject to the terms and conditions of the Resolution. THIS SERIES 2009 BOND IS EXCHANGEABLE at the designated office of the Paying Agent/Registrar for Series 2009 Bonds in the principal amount of $5,000 or any integral multiple thereof, subject to the terms and conditions of the Resolution. NEITHER THE AUTHORITY NOR THE PAYING AGENT/REGISTRAR shall be required to transfer or exchange any Series 2009 Bond during the period beginning on the fifteenth calendar day of the month next preceding any interest payment date and ending on such interest payment date or to transfer any Series 2009 Bond called for redemption during the 30 day period prior to the redemption date. THIS SERIES 2009 BOND shall not be valid or obligatory for any purpose or be entitled to any benefit under the Resolution unless this Series 2009 Bond is either (i) registered by the Comptroller of Public Accounts of the State of Texas by registration certificate attached or affixed hereto or (ii) authenticated by the Paying Agent/Registrar by due execution of the authentication certificate endorsed hereon. THE AUTHORITY HAS RESERVED THE RIGHT to issue Additional Parity Bonds, subject to the restrictions contained in the Resolution and the Indenture, which may be equally and ratably payable from, and secured by a lien on and pledge of, the Pledged Revenues in the same manner and to the same extent as the Parity Bonds and this Series 2009 Bond and the series of which it is a part. 236630 15 IT IS HEREBY DECLARED AND REPRESENTED that this Series 2009 Bond has been duly and validly issued and delivered; that all acts, conditions, and things required or proper to be performed, exist, and be done precedent to or in the issuance and delivery of this Series 2009 Bond have been performed, existed, and been done in accordance with law; that the Series 2009 Bonds do not exceed any statutory limitation; and that provision has been made for the payment of the principal of and interest on this Series 2009 Bond and all of the Parity Bonds by the creation of the aforesaid lien on and pledge of the Pledged Revenues as provided in the Indenture. IN WITNESS WHEREOF, the Authority has caused this Series 2009 Bond to be executed by the manual or facsimile signatures of the Chair and Director. DEVELOPMENT AUTHORITY OF PEARLAND Chair, Board of Directors Director, Board of Directors 236630 16 (b) Form of Registration Certificate of Comptroller of Public Accounts. COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this Series 2009 Bond has been examined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this Series 2009 Bond has been registered by the Comptroller of Public Accounts of the State of Texas. WITNESS MY SIGNATURE AND SEAL this Comptroller of Public Accounts of the State of Texas (SEAL) (c) Form of Paying Agent/ Registrar's Authentication Certificate AUTHENTICATION CERTIFICATE It is hereby certified that this Series 2009 Bond has been delivered pursuant to the Bond Resolution described in the text of this Series 2009 Bond. , as Trustee By: Authorized Signature Date of Authentication: 2M630 17 (d) Form of Assignment Assignment For value received, the undersigned hereby sells, assigns, and transfers unto (Please print or type name, address, and zip code of Transferee) (Please insert Social Security or Taxpayer Identification Number of Transferee) the within Series 2009 Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer said Series 2009 Bond on the books kept for registration thereof, with full power of substitution in the premises. DATED: Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by an institution which is a participant in the Securities Transfer Agent Medallion Program ("STAMP") or similar program. Registered Owner NOTICE: The signature above must correspond to the name of the Registered Owner as shown on the face of this Bond in every particular, without any alteration, enlargement or change whatsoever. (e) The Initial Series 2009 Bond shall be in the form set forth in paragraphs (a), (b) and (d) of this Section, except for the following alterations: (i) immediately under the name of the Bond, the headings "INTEREST RATE" and "MATURITY DATE" shall both be completed with the words "As Shown Below" and the word "CUSIP" deleted; (ii) in the first paragraph of the Series 2009 Bond, the words "on the maturity date specified above, " "the principal amount identified above," and "at the rate shown above" shall be deleted and the following shall be inserted at the end of the first sentence with such principal to be paid in installments on September 1 in each of the years and in the principal amounts identified in the following schedule and with such installments bearing interest at the per annum rates set forth in the following schedule: 236630 18 [Information to be inserted from schedule in Section 3.3] (iii) the Initial Series 2009 Bond shall be numbered I-1 Section 4.2: Legal Opinion; Cusip Numbers; Bond Insurance. The approving opinion of Co -Bond Counsel and CUSIP Numbers may be printed on the Bonds, but errors or omissions in the printing of such opinion or such numbers shall have no effect on the validity of the Bonds. If bond insurance is obtained by the Underwriter, the Bonds may bear an appropriate legend as provided by the insurer. ARTICLE V W 9311c��.r_��r Section 5.1: Additional Parity Bonds. The Authority reserves the right to issue, for any lawful purpose (including the refunding of any previously issued Parity Bonds), one or more series of Additional Parity Bonds payable from and secured by a lien on the Pledged Revenues, on a parity with the Series 2009 Bonds, and any previously issued Parity Bonds; provided, however, that Additional Parity Bonds may be issued only in accordance with the provisions of Article III of the Indenture. Section 5.2: Subordinate Lien Obligations. The Authority reserves the right to issue, for any lawful purpose, bonds, notes or other obligations secured in whole or in part by liens on the Pledged Revenues that are junior and subordinate to the lien on Pledged Revenues securing payment of the Parity Bonds. Such subordinate lien obligations may be further secured by any other source of payment lawfully available for such purposes. ARTICLE VI COVENANTS AND PROVISIONS RELATING TO ALL PARITY BONDS Reference is made to Article V of the Indenture. All covenants made by the Authority therein are hereby incorporated into this Resolution. ARTICLE VII PROVISIONS CONCERNING SALE AND APPLICATION OF PROCEEDS OF SERIES 2009 BONDS Section 7.1: Sale. The Series 2009 Bonds are hereby sold and shall be delivered to the Underwriter at a price of $ (representing the par amount of the Series 2009 Bonds, less an Underwriter's discount of $ , less an 236630 19 original issue discount of $ plus an original issue premium of $ ) and plus accrued interest thereon to the date of delivery all in accordance with the Bond Purchase Agreement dated as of May 18, 2009, which has been presented to and is hereby approved by the Authority, subject to the approval of the Attorney General of Texas and Co -Bond Counsel, and such price and terms are hereby found and determined to be the most advantageous reasonably obtainable by the Authority. The Chair and other appropriate officers, agents and representatives of the Authority are hereby authorized to do any and all things necessary or desirable to provide for the issuance and delivery of the Series 2009 Bonds. Section 7.2: Application of Proceeds. Proceeds from the sale of the Series 2009 Bonds shall, promptly upon receipt by the Trustee, be applied as follows: (a) $ to the Debt Service Fund to satisfy the Reserve Requirement of the Series 2009 Bonds. (b) The Debt Service Fund shall be credited with the amount of accrued interest on the Series 2009 Bonds. (c) All remaining proceeds from the sale of the Series 2009 Bonds shall be deposited into the Project Fund. The remaining proceeds in the Project Fund may be used to pay or reimburse the Authority for Project Costs including Costs of Issuance. ARTICLE VIII TAX EXEMPTION Section 8.1: Tax Covenants. The Authority intends that the interest on the Bonds shall be excludable from gross income of the owners thereof for federal income tax purposes pursuant to Sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended (the "Code"), and all applicable temporary, proposed and final regulations (the "Regulations") and procedures promulgated thereunder and applicable to the Bonds. For this purpose, the Authority covenants that it will monitor and control the receipt, investment, expenditure and use of all gross proceeds of the Bonds (including all property the acquisition, construction or improvement of which is to be financed directly or indirectly with the proceeds of the Bonds) and take or omit to take such other and further actions as may be required by Sections 103 and 141 through 150 of the Code and the Regulations to cause interest on the Bonds to be and remain excludable from the gross income, as defined in Section 61 of the Code, of the owners of the Bonds for federal income tax purposes. Without limiting the generality of the foregoing, the Authority shall comply with each of the following covenants: (a) The Authority will use all of the proceeds of the Bonds for the governmental purposes set forth in Section 3.1 above. The Authority will 236630 20 not use any portion of the proceeds of the Bonds to pay the principal of or interest or redemption premium on, any other obligation of the Authority or a related person. (b) The Authority will not directly or indirectly take any action, or omit to take any action, which action or omission would cause the Bonds to constitute "private activity bonds' within the meaning of Section 141(a) of the Code. (c) Principal of and interest on the Bonds will be paid solely from certain ad valorem taxes resulting from the increase in appraised value of real property located in the Reinvestment Zone Number Two, City of Pearland, Texas collected by the City of Pearland, Texas for the account of the Authority, investment earnings on such collections, and as available, proceeds of the Bonds. (d) Based upon all facts and estimates now known or reasonably expected to be in existence on the date the Bonds are delivered, the Authority reasonably expects that the proceeds of the Bonds will not be used in a manner that would cause the Bonds or any portion thereof to be an "arbitrage bond" within the meaning of Section 148 of the Code. (e) At all times while the Bonds are outstanding, the Authority will identify and properly account for all amounts constituting gross proceeds of the Bonds in accordance with the Regulations. The Authority will monitor the yield on the investments of the proceeds of the Bonds and, to the extent required by the Code and the Regulations, will restrict the yield on such investments to a yield which is not materially higher than the yield on the Bonds. To the extent necessary to prevent the Bonds from constituting "arbitrage bonds," the Authority will make such payments as are necessary to cause the yield on all yield restricted nonpurpose investments allocable to the Bonds to be less than the yield that is materially higher than the yield on the Bonds. (f) The Authority will not take any action or knowingly omit to take any action, if taken or omitted, would cause the Bonds to be treated as "federally guaranteed" obligations for purposes of Section 149(b) of the Code. (g) The Authority represents that not more than fifty percent (50%) of the proceeds of the Bonds will be invested in nonpurpose investments (as defined in Section 148(f)(6)(A) of the Code) having a substantially guaranteed yield for four years or more within the meaning of Section 149(g) (3) (A) (ii) of the Code, and the Authority reasonably expects that at 236630 21 least eighty-five percent (85%) of the spendable proceeds of the Bonds will be used to carry out the governmental purpose of the Bonds within the three-year period beginning on the date of issue of the Bonds. (h) The Authority will take all necessary steps to comply with the requirement that certain amounts earned by the Authority on the investment of the gross proceeds of the Bonds, if any, be rebated to the federal government. Specifically, the Authority will (i) maintain records regarding the receipt, investment, and expenditure of the gross proceeds of the Bonds as may be required to calculate such excess arbitrage profits separately from records of amounts on deposit in the funds and accounts of the Authority allocable to other obligations of the Authority or moneys which do not represent gross proceeds of any obligations of the Authority and retain such records for at least six years after the day on which the last outstanding Bond is discharged, (ii) account for all gross proceeds under a reasonable, consistently applied method of accounting, not employed as an artifice or device to avoid in whole or in part, the requirements of Section 148 of the Code, including any specified method of accounting required by applicable Regulations to be used for all or a portion of any gross proceeds, (iii) calculate, at such times as are required by applicable Regulations, the amount of excess arbitrage profits, if any, earned from the investment of the gross proceeds of the Bonds and (iv) timely pay, as required by applicable Regulations, all amounts required to be rebated to the federal government. In addition, the Authority will exercise reasonable diligence to assure that no errors are made in the calculations required by the preceding sentence and, if such an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter, including payment to the federal government of any delinquent amounts owed to it, interest thereon and any penalty. (i) The Authority will not directly or indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the gross proceeds of the Bonds that might result in a reduction in the amount required to be paid to the federal government because such arrangement results in a smaller profit or a larger loss than would have resulted if such arrangement had been at arm's length and had the yield on the Bonds not been relevant to either party. (j) The Authority will timely file or cause to be filed with the Secretary of the Treasury of the United States the information required by Section 149(e) of the Code with respect to the Bonds on such form and in such place as the Secretary may prescribe. 236630 22 (k) The Authority will not issue or use the Bonds as part of an "abusive arbitrage device" (as defined in Section 1.14810(a) of the Regulations). Without limiting the foregoing, the Bonds are not and will not be a part of a transaction or series of transactions that attempts to circumvent the provisions of Section 148 of the Code and the Regulations, by (i) enabling the Authority to exploit the difference between tax-exempt and taxable interest rates to gain a material financial advantage, or (ii) increasing the burden on the market for tax-exempt obligations. (1) Proper officers of the Authority charged with the responsibility for issuing the Bonds are hereby directed to make, execute and deliver certifications as to facts, estimates or circumstances in existence as of the date of issuance of the Bonds and stating whether there are facts, estimates or circumstances that would materially change the Authority's expectations. On or after the date of issuance of the Bonds, the Authority will take such actions as are necessary and appropriate to assure the continuous accuracy of the representations contained in such certificates. (m) The covenants and representations made or required by this Section are for the benefit of the Bond holders and any subsequent Bond holder, and may be relied upon by the Bond holders and any subsequent Bond holder and bond counsel to the Authority. In complying with the foregoing covenants, the Authority may rely upon an unqualified opinion issued to the Authority by nationally recognized bond counsel that any action by the Authority or reliance upon any interpretation of the Code or Regulations contained in such opinion will not cause interest on the Bonds to be includable in gross income for federal income tax purposes under existing law. Section 8.2: Continuing Obligation. Notwithstanding any other provision of this Resolution, the Authority's representations and obligations under the covenants and provisions of this Article VIII shall survive the defeasance and discharge of the Bonds for as long as such matters are relevant to the exclusion of interest on the Bonds from the gross income of the owners for federal income tax purposes. ARTICLE IX CONTINUING DISCLOSURE UNDERTAKING Section 9.1: Annual Reports. The Authority shall provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year of the Authority ending in or after 2009, Annual Financial Information and Operating Data. Beginning July 1, 2009, the Authority will provide this updated financial information and operating data annually free of charge via the Electronic Municipal Market Access 236630 23 ("EMMA") system. The Authority is considered a component unit of the City and as such, the financial statements of the Authority are not currently separately audited, but included in the City's audit. Any financial statements so provided shall be (1) prepared in accordance with the Accounting Principles described in this Resolution and (2) audited, if the Authority or the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If the audit of such financial statements is not complete within such period, then the Authority shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID (or EMMA as applicable) within such six month period, and audited financial statements, when the audit report on such statements becomes available. If the Authority changes its fiscal year, the Authority will notify each NRMSIR and any SID (or EMMA as applicable) of the change (and of the date of the new fiscal year end) prior to the next date by which the Authority otherwise would be required to provide financial information and operating data pursuant to this Article IX. The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID (or EMMA as applicable) or filed with the SEC. Section 9.2: Material Event Notices. The Authority shall notify any SID and either each NRMSIR or EMMA, in a timely manner, of any of the following events with respect to the Series 2009 Bonds, if such event is material within the meaning of the federal securities laws: (a) Principal and interest payment delinquencies; (b) Non-payment related defaults; (c) Unscheduled draws on debt service reserves reflecting financial difficulties; (d) Unscheduled draws on credit enhancements reflecting financial difficulties; (e) Substitution of credit or liquidity providers, or their failure to perform; (f) Adverse tax opinions or events affecting the tax-exempt status of the Series 2009 Bonds; (g) Modifications to rights of holders of the Series 2009 Bonds; (h) Series 2009 Bond calls; (i) Defeasances; (j) Release, substitution, or sale of property securing repayment of the Series 2009 Bonds; and (k) Rating changes. 236630 24 The Authority shall notify any SID and either each NRMSIR or EMMA, in a timely manner, of any failure by the Authority to provide financial information or operating data in accordance with Section 9.1 by the time required. Section 9.3: Limitations, Disclaimers, and Amendments. The Authority shall be obligated to observe and perform the covenants specified in this Article IX for so long as, but only for so long as, the Authority remains an "obligated person' with respect to the Series 2009 Bonds within the meaning of the Rule, except that the Authority in any event will give the notice required by Section 9.2 of any Series 2009 Bond calls and defeasance that cause the Authority to be no longer such an "obligated person." The provisions of this Article IX are for the sole benefit of the Registered Owners and beneficial owners of the Series 2009 Bonds, and nothing in this Article IX, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The Authority undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Article IX and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the Authority's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Article IX or otherwise, except as expressly provided herein. The Authority does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Series 2009 Bonds at any future date. UNDER NO CIRCUMSTANCES SHALL THE AUTHORITY BE LIABLE TO THE REGISTERED OWNER OR BENEFICIAL OWNER OF ANY SERIES 2009 BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE AUTHORITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS ARTICLE IX, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. No default by the Authority in observing or performing its obligations under this Article IX shall constitute a breach of or default under this Resolution for purposes of any other provision of this Resolution. Nothing in this Article IX is intended or shall act to disclaim, waive, or otherwise limit the duties of the Authority under federal and state securities laws. The provisions of this Article IX may be amended by the Authority from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the 236630 25 Authority or the Participants but only if (1) the provisions of this Article IX, as so amended, would have permitted the Underwriter to purchase or sell Series 2009 Bonds in the original primary offering of the Series 2009 Bonds in compliance with the Rule, taking into account any amendments and interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (2) either (a) the Registered Owners of a majority in aggregate principal amount (or any greater amount required by any other provision of this Resolution that authorizes such an amendment) of the Outstanding Series 2009 Bonds consent to such amendment or (b) a person that is unaffiliated with the Authority (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the Registered Owners and beneficial owners of the Series 2009 Bonds. If the Authority so amends the provisions of this Article IX, it shall include with any amended financial information or operating data next provided in accordance with Section 9.1 an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided. The Authority may also repeal or amend the provisions of this Article IX if the SEC amends or repeals the applicable provisions of the Rule or any court of final jurisdiction enters judgment that such provisions of the Rule are invalid, but in either case only if and to the extent that its right to do so would not prevent the Underwriter from lawfully purchasing or selling Series 2009 Bonds in the primary offering of the Series 2009 Bonds. Section 9.4: Definitions. The term "Annual Financial Information and Operating Data' shall mean the financial information and operating data with respect to the Authority and the Participants in the final Official Statement authorized by this Resolution in the tables and schedules under the headings "SELECTED FINANCIAL INFORMATION," "TAX INCREMENT COLLECTIONS," "PRINCIPAL TAXPAYERS IN THE TIRZ," "PLAN OF FINANCING -- Debt Service Requirements, " and APPENDIX F - EXCERPTS OF THE AUDITED FINANCIAL STATEMENTS OF THE CITY OF PEARLAND RELATING TO THE AUTHORITY." The term "Accounting Principles" shall mean the accounting principles described in the notes to the Audit as such principles may be changed from time to time to comply with State laws or regulations. The term "EMMA" shall mean the MSRB's Electronic Municipal Market Access system. The term "MSRB" shall mean the Municipal Securities Rulemaking Board. The term "NRMSIR" means each person whom the SEC or its staff has determined to be a nationally recognized municipal securities information repository within the meaning of the Rule from time to time. 236630 26 The term "Rule" shall mean SEC Rule 15c2-12, as amended from time to time. The term "SEC' shall mean the United States Securities and Exchange Commission. The term "SID" shall mean any person designated by the State of Texas or an authorized department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state information depository within the meaning of the Rule from time to time. ARTICLE X AUTHORIZATION AND CONFIRMATION OF AGREEMENTS Section 10.1: Agreements. The Board hereby approves issuance of the Series 2009 Bonds and all reasonable agreements necessary or convenient in connection with the issuance of the Series 2009 Bonds, including without limitation the following: the Purchase Contract by and between the Authority and First Southwest Company, the Underwriter, in the form attached hereto as Exhibit A; the Preliminary Official Statement, in the form attached hereto as Exhibit B; the preparation of the Final Official Statement reflecting the terms and provisions of this Bond Resolution; and any and all other documents and agreements reasonable and necessary to issue the Series 2009 Bonds (collectively, the "Agreements"). The Board, by a majority vote of its members, at a regular meeting, hereby approves the form, terms, and provisions of the Agreements and authorizes the execution and delivery of the Agreements. ARTICLE XI MISCELLANEOUS Section 11.1: Further Proceedings. The Chair, Vice Chair, Secretary, Directors, and other appropriate officials of the Authority are hereby authorized and directed to do any and all things necessary and/or convenient to carry out the intent, purposes and terms of this Resolution, including the execution and delivery of such certificates, documents or papers necessary and advisable. Section 11.2: Severability. If any Section, paragraph, clause or provision of this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such Section, paragraph, clause or provision shall not affect any of the remaining provisions of this Resolution. 236630 27 Section 11.3: Open Meeting. It is hereby officially found and determined that the meeting at which this Resolution was adopted was open to the public, and that public notice of the time, place and purpose of said meeting was given, all as required by the Texas Open Meetings Act. Section 11.4: Parties Interested. Nothing in this Resolution expressed or implied is intended or shall be construed to confer upon, or to give to, any person or entity, other than the Authority, the Paying Agent/ Registrar, the Trustee and the Owners of the Series 2009 Bonds, any right, remedy or claim under or by reason of this Resolution or any covenant, condition or stipulation hereof, and all covenants, stipulations, promises and agreements in this Resolution shall be for the sole and exclusive benefit of the Authority, the Paying Agent/ Registrar, the Trustee and the Owners of the Series 2009 Bonds. Section 11.5: Repealer. All orders, resolutions and ordinances, or parts thereof, inconsistent herewith are hereby repealed to the extent of such inconsistency. Section 11.6: Effective Date. This Resolution shall become effective immediately upon passage by this Authority and signature of the Chair, Vice Chair, or Director of the Authority. 236630 28 ARTICLE XII INSURANCE PROVISIONS [Execution Page Follows] 236630 29 PASSED AND APPROVED this 181h day of May, 2009. ATTEST: Ed Baker Secretary, Board of Directors 236630 m Tom Reid Chair, Board of Directors Exhibits A. Purchase Contract (Tab) C. Preliminary Official Statement (Tab) 236630 CERTIFICATE FOR RESOLUTION THE STATE OF TEXAS § COUNTY OF BRAZORIA § I, the undersigned officer of the Board of Directors of Development Authority of Pearland (the "Authority"), do hereby certify as follows: 1. The Board of Directors of the Authority convened in special session on the 17th day of May, 2009, at the regular meeting place of the Authority; and the roll was called of the duly constituted officers and members of said Board, to -wit: Tom Reid Chair Bill Sloan Vice -Chair Ed Baker Secretary Tom Pool Director Vacant Director and all of said persons were present except , thus constituting a quorum. Whereupon, among other business, the following was transacted at said meeting: a written RESOLUTION AUTHORIZING THE ISSUANCE OF $7,905,000 DEVELOPMENT AUTHORITY OF PEARLAND TAX INCREMENT CONTRACT REVENUE BONDS, SERIES 2009; APPROVING CONTRACT DOCUMENTS RELATING TO THE SERIES 2009 BONDS; AND CONTAINING OTHER PROVISIONS RELATED THERETO was introduced for the consideration of the Board. It was then duly moved and seconded that the resolution be adopted, and, after due discussion, the motion, carrying with it the adoption of the resolution, prevailed and carried unanimously. 2. That a true, full and correct copy of the aforesaid Resolution 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 Board's minutes of the meeting; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of the Board as indicated therein; that each of the officers and members of the Board was duly and sufficiently notified officially and personally, in advance, of the time, place and purpose of the aforesaid meeting, and that the Resolution would be introduced and considered for adoption at the meeting, and each of the officers and members consented, in advance, to the holding of the meeting for such purpose; that the meeting was open to the public as required by law; and that public notice of the time, place and subject of the meeting was given as required by Chapter 551, Texas Government Code. 236630 SIGNED the 18th day of May, 2009. Secretary, Board of Directors 236630 AGENDA REQUEST DEVELOPMENT AUTHORITY OF PEARLAND PEARLAND, TEXAS AGENDA OF: 5/18/2009 ITEM NO.: Resolution No. RDAP-2009-08 DATE SUBMITTED: 5/08/09 REPRESENTING: City of Pearland PREPARED BY: Claire Bogard PRESENTOR: Ryan O'Hara SUBJECT: Bond Sale Series 2009 in the amount of $7,905,000 EXHIBITS: Resolution No. RDAP-2009-08 EXPENDITURE REQUIRED: None PROJECT: N/A EXECUTIVE SUMMARY For the past fours years, the Development Authority has issued debt to reimburse the developer for infrastructure improvements within Pearland TIRZ #2, pursuant to the Master Developer agreement and financing plan. To -date, the DAP has issued $49.7 million in debt, including issuance costs, based on supported value on the ground and reimbursed the Developer $48.979 million, including $5.9 million in cash reimbursements. Based on estimated values as of January 1, 2009, it has been determined that the property taxes generated within the TIRZ can support a debt issuance of $7.9 million, of which $6.5 million would be reimbursed to the developer and the remaining would be issuance costs and a reserve fund. Use of Funds: Developer Reimbursement $6,510,000 Reserve Fund $ 742,175 Issuance Costs $ 652,825 Total Bond Issuance $7,905,000 Revised 2007-01-09 The Board approved the bond sale on April 20, 2009 with the bond sale to occur on May 18th with anticipated delivery of the funds on or around June 23, 2009. RBC Capital Markets, the Authority's financial advisor, will be present to discuss the results of the bond sale. RECOMMENDED ACTION Consideration and approval Revised 2007-01-09 ALLEN BOONS HUMPIIRIES ROBINSON LLP ATTORNEYS AT LAW PHOENIX TOWER 3200 SOUTHWEST FREEWAY SUITE 2600 HOUSTON, TEXAS 77027 TEL (713) 860-6400 FAX (713) 860-6401 abhr.com May 18, 2009 Board of Directors Development Authority of Pearland 3519 Liberty Drive Pearland, Texas 77581 Re: Reduction in Fees for Co -Bond Counsel Services for Development Authority of Pearland Tax Increment Contract Revenue Bonds, Series 2009 Dear Board of Directors: As you are aware, Allen Boone Humphries Robinson LLP ("ABHR") currently serves as Co -Bond Counsel to the Development Authority of Pearland (the "Authority"), pursuant to an engagement letter dated July 27, 2004, as supplemented by subsequent letters dated April 12, 2005 and October 29, 2007 (collectively, the "Engagement Letter"). In connection with the issuance of the Authority's Tax Increment Contract Revenue Bonds, Series 2009 (the "Series 2009 Bonds"), we propose that ABHR continue to provide the legal services described in the Engagement Letter, but that, with respect to the Series 2009 Bonds, ABHR reduce its fees to an amount equal to 1.5% of the first $5 million of principal amount of the Series 2009 Bonds and 1 % of such principal amount in excess of $5 million. In addition, ABHR will be reimbursed for its reasonable and actual out-of-pocket expenses and all items paid for by ABHR on behalf of the Authority and incurred in connection with the issuance of the Series 2009 Bonds. ABHR and the Authority agree that this fee reduction shall apply only to Series 2009 Bonds and that, with respect to any future financings by the Authority, the provisions of the Engagement Letter shall govern, unless otherwise agreed to in writing by the Authority and ABHR. If this proposal is satisfactory to the Authority, please evidence your acceptance and approval by executing two copies in the space provided below. Very truly yours, ALLEN BOONE HUMPHRIES ROBINSON LLP 237218.doc APPROVED: DEVELOPMENT AUTHORITY F PEARLAND By: �- / a Chair, Board of Directors ATTEST: m Secretary, Board of Directors 237218.doc - 2 - ALLEN BOONE HUMPHRIES ROBINSON LLP Direct Line: (713) 860-6432 Direct Fax: (713) 860- i632 Ms. Claire Bogard City of Pearland 3519 Liberty Drive Pearland, TX 77581 ATTORNEYS AT LAW PHOENIX TOWER 3200 SOUTHWEST FREEWAY SUITE 2600 HOUSTON, TEXAS 77027 TEL (713) 860-6400 FAX (713) 860-6401 abhr.com shostetler@abhr.com June 18, 2009 Re: Development Authority of Pearland Dear Ms. Bogard: Susan Hostetler Legal Assistant Enclosed for your files is an original of the engagement letter between our firm and the Development Authority of Pearland. Scerely, )"Ppbt4� Susan Hostetler Legal Assistant Enclosure 241454.doc ALLEN BOONE HUMPHRIES ROBINSON LLP ATTORNEYS AT LAW PHOENIX TOWER 3200 SOUTHWEST FREEWAY SUITE 2600 HOUSTON, TEXAS 77027 TEL (713) 860-6400 FAX (713) 860-6401 abhr.com May 18, 2009 Board of Directors Development Authority of Pearland 3519 Liberty Drive Pearland, Texas 77581 Re: Reduction in Fees for Co -Bond Counsel Services for Development Authority of Pearland Tax Increment Contract Revenue Bonds, Series 2009 Dear Board of Directors: As you are aware, Allen Boone Humphries Robinson LLP ("ABHR") currently serves as Co -Bond Counsel to the Development Authority of Pearland (the "Authority"), pursuant to an engagement letter dated July 27, 2004, as supplemented by subsequent letters dated April 12, 2005 and October 29, 2007 (collectively, the "Engagement Letter"). In connection with the issuance of the Authority's Tax Increment Contract Revenue Bonds, Series 2009 (the "Series 2009 Bonds"), we propose that ABHR continue to provide the legal services described in the Engagement Letter, but that, with respect to the Series 2009 Bonds, ABHR reduce its fees to an amount equal to 1.5% of the first $5 million of principal amount of the Series 2009 Bonds and 1 % of such principal amount in excess of $5 million. In addition, ABHR will be reimbursed for its reasonable and actual out-of-pocket expenses and all items paid for by ABHR on behalf of the Authority and incurred in connection with the issuance of the Series 2009 Bonds. ABHR and the Authority agree that this fee reduction shall apply only to Series 2009 Bonds and that, with respect to any future financings by the Authority, the provisions of the Engagement Letter shall govern, unless otherwise agreed to in writing by the Authority and ABHR. If this proposal is satisfactory to the Authority, please evidence your acceptance and approval by executing two copies in the space provided below. Very truly yours, ALLEN BOONE HUMPHRIES ROBINSON LLP M 237218.doc 4_ APPROVED: DEVELOPMENT AUTHORITY OF PEARLAND n By: - 4�;�) C Chair, Board of Directors ATTEST: 0 Secretary, Board of Directors 237218.doc -2- AN D REINS -- ATTORNEYS K U R T H LLP May 12, 2009 Board of Directors Development Authority of Pearland 3519 Liberty Drive Pearland, Texas 77581 600 Travis, Suite 4200 Houston, Texas 77002 713.220.4200 Phone 713.220.4285 Fax andrewskurth.com Re: Engagement of Andrews Kurth LLP to Perform Co -Bond Counsel Services for Development Authority of Pearland Tax Increment Contract Revenue Bonds, Series 2009 Gentlemen: We are pleased to submit to you a proposed agreement for Andrews Kurth LLP, Houston, Texas ("AK") to provide Co -Bond Counsel services for the Development Authority of Pearland (the "Authority"), in connection with the issuance of Development Authority of Pearland Tax Increment Contract Revenue Bonds, Series 2009. We direct you to our engagement letter dated July 27, 2004 (the "Original Engagement Letter"), in which the Authority and AK agreed on certain legal services provided to the Authority by AK. While we would anticipate that the provisions of the Original Engagement Letter would remain effective for future transactions between the Authority and AK, with respect only to the issuance of the Development Authority of Pearland Tax Increment Contract Revenue Bonds, Series 2009 (the "Bonds"), we propose that AK bill the Authority 1.5% of the principal amount of the first $5 million of principal amount of the Bonds and 1% of the principal amount exceeding $5 million. In addition, AK will be reimbursed for its reasonable and actual out-of- pocket expenses and all items paid for by AK on behalf of the Authority and incurred in connection with the issuance of the Bonds. As we have discussed, you are aware that AK represents many other governmental entities, companies and individuals. It is possible that during the time that we are representing you, some of our present or future clients will have disputes or transactions with you. In particular, as we have advised you, we represent the City of Pearland, Texas (the "City") as their bond counsel and in connection with certain City finance matters and you have agreed and confirmed that such representation does not interfere with our representation of you. You agree that we may continue to represent or may undertake in the future to represent existing or new clients in any matter that is not substantially related to our work for you even if the interests of such clients in those other matters are directly adverse. We agree, however, that your prospective consent to conflicting representation contained in the preceding sentence shall not apply in any instance where, as a result of our representation of you, we have obtained HOU:2924222.1 Austin Dallas Houston London Los Angeles New York The Woodlands Washington, DC proprietary or other confidential information of a nonpublic nature, that if known to such other client, could be used in any other matter by such client to your material disadvantage. If this proposed agreement for the engagement of AK to provide legal services to the Authority is satisfactory, please evidence your acceptance and approval by executing two copies in the space provided below. Very truly yours, Rick A. Witte APPROVED: DEVELOPMENT AUTHORITY OF PEARLAND By: President, Board of Directors ATTEST: �lv� Secretary, Board of Directors HOU:2924222.1