Loading...
Ord. 1397 2009-07-13CERTIFICATE FOR ORDINANCE THE STATE OF TEXAS COUNTIES OF BRAZORIA AND HARRIS CITY OF PEARLAND follows: I, the undersigned officers of the City of Pearland, Texas (the "City hereby certify as 1. The City Council of the City convened in a regular meeting on July 13, 2009, 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 Steve Saboe Woodrow Owens Scott Sherman Felicia Kyle Kevin Cole Mayor Councilmember Councilmember Councilmember Councilmember Councilmember and all of such persons were present except Steve Saboe and Felicia Kyle, thus constituting a quorum. Whereupon, among other business, the following was transacted at said meeting: a written ORDINANCE AUTHORIZING SECOND AMENDMENT OF ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF PEARLAND, TEXAS WATER AND SEWER SYSTEM ADJUSTABLE RATE REVENUE BONDS, SERIES 1999; PROVIDING FOR THE CONVERSION TO FIXED RATE OF CERTAIN OF SUCH BONDS; AUTHORIZING AND RATIFYING CERTAIN ACTIONS OF CITY OFFICIALS WITH REGARD TO SUCH CONVERSION; AND ENACTING OTHER PROVISIONS RELATING THERETO; AND DECLARING AN EMERGENCY (the "Ordinance was duly introduced for the consideration of the City Council and read in full. It was then duly moved and seconded that the Ordinance be adopted; and, after due discussion, such motion, carrying with it the adoption of the Ordinance, prevailed and carried by the following vote: AYES: 3 NAYS: 0 ABSTENTIONS: 0 2. That a true, full and correct copy of the Ordinance adopted at the meeting described in the above and foregoing paragraph is attached to and follows this certificate; that the Ordinance has been duly recorded in the City Council's minutes of such meeting; that the above and foregoing paragraph is a true, full and correct excerpt from the City Council's minutes of such meeting pertaining to the adoption of the Ordinance; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of the City Council as indicated therein; that each of the officers and members of the City Council was duly and sufficiently notified officially and personally, in advance, of the date, hour, place and subject of the aforesaid meeting, and that the Ordinance would be introduced and considered for adoption at such meeting, and each of such officers and members consented, in advance, to the holding of such meeting for such purpose; that such meeting was open to the public as required by law; and that public notice of the date, hour, place and subject of such meeting was given as required by the Open Meetings Law, Chapter 551, Texas Government Code. HOU:2939920.1 SIGNED AND SEALED this July 13, 2009. 0y.]WI 'wr Cit �ret,4 Z If C IWARLAND Mayor CITY OF PEARLAND, TEXAS HOU:2939920.1 CITY OF PEARLAND ORDINANCE NO. 1397 ORDINANCE AUTHORIZING SECOND AMENDMENT OF ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF PEARLAND, TEXAS WATER AND SEWER SYSTEM ADJUSTABLE RATE REVENUE BONDS, SERIES 1999; PROVIDING FOR THE CONVERSION TO FIXED RATE OF CERTAIN OF SUCH BONDS; AUTHORIZING AND RATIFYING CERTAIN ACTIONS OF CITY OFFICIALS WITH REGARD TO SUCH CONVERSION; AND ENACTING OTHER PROVISIONS RELATING THERETO; AND DECLARING AN EMERGENCY BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. Findings and Determinations. (a) Pursuant to Chapter 1502, Texas Government Code, and an ordinance adopted by the City Council (the "City Council") of the City of Pearland, Texas (the "City") adopted on October 11, 1999 (the "Bond Ordinance"), the City Council of the City authorized the issuance of the City's Water and Sewer System Adjustable Rate Revenue Bonds, Series 1999 (the "Series 1999 Bonds"); (b) The City on September 4, 2007, amended the Bond Ordinance pursuant to an Ordinance dated August 6, 2007 (the "Amending Ordinance") and converted a portion of the Series 1999 Bonds in the amount of $3,395,000 from the Long Rate to a Fixed Rate, and; (c) Series 1999 Bonds in the principal amount of $3,180,000 currently bear interest pursuant to the Bond Ordinance at a Long Rate whose term is scheduled to expire on September 1, 2009 (the "Conversion Bonds"); (d) The City has determined that it is in the City's best interest to convert the Conversion Bonds on September 1, 2009 from the Long Rate to a Fixed Rate (the "Fixed Rate Bonds"); (e) In connection with the conversion of the Conversion Bonds to a Fixed Rate, the City desires to amend the Bond Ordinance to facilitate such conversion; (f) The amendments to the Bond Ordinance authorized herein shall become effective as provided herein, subject to the City's receipt of the written consents (the "Consents") to the amendment of the Bond Ordinance by the owner of 100% of the outstanding Series 1999 Bonds and the Bank; (g) Upon the conversion of the Conversion Bonds to a Fixed Rate, there will be no remaining Series 1999 Bonds bearing interest at a Variable Rate; and (h) As a result of the conversion of all of the Series 1999 Bonds to a Fixed Rate, the Bond Ordinance allows and the City desires to terminate the Liquidity Agreement. HOU:2937480.4 Section 2. Definitions. Terms not otherwise defined in this Ordinance shall have the same meanings set forth in the Bond Ordinance. Section 3. Amendment of Bond Ordinance. Pursuant to the findings and determinations of the City Council set forth in Section I of this Ordinance and subject to the City's receipt of the Consents, the City Council hereby authorizes, approves and directs (a) The definition of "Fixed Rate" in Section I of the Bond Ordinance is hereby amended to read as follows: "Fixed Rate" shall mean the rate of interest certified to the City by the Remarketing Agent no fewer than five (5) Business Days prior to the Conversion Date as the minimum rate of interest which, in the opinion of the Remarketing Agent, is necessary to sell the Series 1999 Bonds converted to the Fixed Rate in a secondary sale on the Conversion Date at a price equal to 100% of the principal amount thereof plus, to the extent permitted by law, any amount of premium deemed necessary to pay the costs associated with such conversion, but not in excess of the Maximum Rate. In determining the Fixed Rate, the Remarketing Agent shall take into account to the extent applicable (1) market interest rates for comparable securities which are held by institutional and private investors with substantial portfolios (a) with a term equal to the period to maturity remaining on the Bonds, (b) the interest on which is exempt from federal income taxation, (c) rated, if the Bonds are rated, by a national credit rating agency in the same rating category as the Bonds, (d) with security or credit support similar to the Bonds, and (e) with redemption provisions similar to those of the Bonds; (2) other financial market rates and indices which have a bearing on the fixed rate (including but not limited to rates home by industrial development bonds, pollution control revenue bonds, public power bonds, housing bonds, hospital revenue bonds, other revenue bonds, general obligation bonds, United States Treasury obligations, commercial bank prime rates, certificate of deposit rates, federal funds rates, indices maintained by The Bond Buyer, and other publicly available tax-exempt interest rate indices); (3) general financial market conditions (including current forward supply); and (4) industry, economic, or financial conditions which may affect or be relevant to the Bonds." (b) The definition of "Rate Setting Agent" in Section I of the Bond Ordinance is hereby amended to read as follows: "Rate Setting Agent" shall mean the Remarketing Agent and its successors and assigns." (c) Section 3.12 of the Bond Ordinance be amended to include a new third paragraph of such Section to read as follows: "The Remarketing Agent shall determine the form, serial maturities, redemption provisions and other terms which shall be applicable to the pricing of the Bonds 2 HOU:2937480.4 on and after the Conversion Date. Following the Conversion Date, the Bonds which have been converted to a Fixed Rate shall be subject to optional redemption as described in Section 3.6 hereof" Section 4. Conversion to Fixed Rate. Pursuant to Section 3.12 of the Bond Ordinance, as amended, and subject to the provisions of this Ordinance, the Conversion Bonds in the principal amount of $3,180,000, representing those Series 1999 Bonds currently outstanding and paying interest at the Long Rate scheduled to expire on September 1, 2009, shall be converted to Fixed Rate. Pursuant to and in conformity with the authority conferred in the Bond Ordinance and Chapter 1371, Texas Government Code, as amended, the City hereby authorizes the Remarketing Agent to determine the form, serial maturities, interest rates, redemption provisions and other terms which shall be applicable to the pricing of the Conversion Bonds on and after the Conversion Date, which terms shall be confirmed by the Mayor, the City Manager or the City's Director of Finance (each a "Pricing Officer") in the remarketing certificate (the "Remarketing Certificate"), in the form attached hereto as Exhibit A, with such changes in such form as a Pricing Officer shall determine. The Remarketing Agent is hereby directed to remarket the Conversion Bonds in conformity with and pursuant to the provisions of the Bond Ordinance. Any finding or determination by a Pricing Officer relating to the conversion of the Conversion Bonds to a Fixed Rate and the remarketing thereof shall have the same force and effect as a finding or determination made by City Council. Section 5. Sale of Fixed Rate Bonds to Purchaser. The Conversion Bonds shall be sold at interest rates determined by the Remarketing Agent in consultation with and subject to the approval of the City, as set forth in the Remarketing Certificate, and in accordance with the terms of the purchase agreement (the "Purchase Agreement"), which an Pricing Officer is hereby authorized and directed to execute on behalf of the City. Such Purchase Agreement shall be substantially in the form and substance of other bond purchase agreements or purchase letters previously approved by City Council in connection with the remarketing or issuance of unlimited tax bonds with such changes as are acceptable to the Pricing Officer. The Pricing Officers and all other officers, agents and representatives of the City are hereby authorized to do any and all things necessary or desirable to satisfy the conditions set out therein and to provide for the conversion of the Conversion Bonds to a Fixed Rate and the remarketing of the Conversion Bonds. If applicable, a Pricing Officer is hereby authorized to approve, in the name and on behalf of the City, in connection with the sale of the Conversion Bonds, the preparation and distribution of a Tenn Sheet, Preliminary Official Statement or Reoffering Memorandum and a final Official Statement or Reoffering Memorandum (the "Offering Documents") relating to the Conversion Bonds to be used by the Remarketing Agent in remarketing the Conversion Bonds. The appropriate officials of the City are hereby authorized to sign such Offering Documents and/or to deliver a certificates pertaining to such Offering Documents as prescribed therein, dated as of the date of payment for and delivery of the Conversion Bonds. Section 6. Form of Fixed Rate Bonds; Delivery to Owners. (a) Once Remarketed to a Fixed Rate, definitive Conversion Bonds shall be prepared in appropriate principal amounts and delivered to the Paying Agent/Registrar for distribution to the purchaser thereof pursuant to this Ordinance and the Bond Ordinance. Upon the Conversion Date, the Paying Agent/Registrar 3 I IOU:2937480.4 shall authenticate and deliver to the purchaser of the Conversion Bonds, a Fixed Rate Bond or Fixed Rate Bonds, as applicable, substantially in the form set forth as Exhibit B hereto. Section 7. Additional Actions Authorized; Prior Actions Ratified. The Mayor, City Secretary, City Manager, Director of Finance and all other appropriate officers, agents and representatives of the City are hereby authorized and directed to take all other actions that are necessary to provide for the amendment of the Bond Ordinance and the conversion of Conversion Bonds to Fixed Rate as contemplated by this Ordinance, including, without limitation, the employment of appropriate consultants and advisors and the execution and delivery on behalf of the City of all agreements, certificates, consents, waivers, receipts, notices, requests and other documents (in connection with both the amendment of the Bond Ordinance and the conversion of the Conversion Bonds to a Fixed Rate) as may be reasonably necessary to carry out the actions contemplated by this Ordinance and the Bond Ordinance. The actions of the Mayor, City Secretary, City Manager, Director of Finance and all other appropriate officers, agents and representatives taken prior to the date of this Ordinance to accomplish the conversion of Conversion Bonds to Fixed Rate, are hereby ratified, confirmed and approved. Section 8. Open Meeting. It is hereby officially found and determined that the meeting at which this Ordinance was adopted was open to the public, and public notice of the time, place and purpose of the meeting was given, all as required by the Texas Open Meetings Act. Section 9. Effective Date. This Ordinance shall be in full force and effect from and upon its adoption. The amendment authorized hereby shall be effective as of September 1, 2009 upon receipt of the Consents not later than September 1, 2009, or at such time prior to September 1, 2009 as all Consents have been received. Section 10. Severability. If any section, paragraph, clause or provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Ordinance. Section 11. Declaration of Emergency. It is hereby officially found and determined that this Ordinance relates to an immediate public emergency affecting life, health, property and public peace, and that such emergency exists, the specific emergency being that the proceeds from the sale of the Conversion Bonds are required as soon as possible for the repayment of the original owners of such Conversion Bonds and for the continued financial well being of the City, and that this Ordinance be passed and approved on the date of its introduction. [signature page, follows] El HOU:2937480.4 Section 12. Repealer. All Ordinances, resolutions and ordinances, or parts thereof, inconsistent herewith are hereby repealed to the extent of such inconsistency. PASSED AND APPROVED on first reading pursuant to Section 3.10 of the City Charter this July 13, 2009. Mayor, City of Pearland, Texas ATTEST: I O r- ind, Txas S cr i e Exhibit A Form of Remarketing Certificate Exhibit B Form of Conversion Bond S-1 HOU:2937480.4 EXHIBIT A Form of Remarketing Certificate CITY OF PEARLAND, TEXAS WATER AND SEWER SYSTEM ADJUSTABLE RATE REVENUE BONDS, SERIES 2009 THIS REMARKETING CERTIFICATE is executed as of 2009 by the [Pricing Officer] of the City of Pearland, Texas (the "City") pursuant to the authorization contained in an Ordinance of the City Council, acting as the governing body of the City, adopted on July 13, 2009 (the "Conversion Ordinance"), authorizing the conversion to Fixed Rate and remarketing of $3,180,000 aggregate principal amount of the captioned series of bonds (the "Bonds") and delegating to the undersigned the authority to agree to and stipulate certain terms and provisions thereof, all of which are set forth herein. The Bonds were initially authorized and issued, and are converted and remarketed pursuant to an Ordinance adopted on October 11, 1999 (the "Bond Ordinance,"). Bonds in the principal amount of $3,395,00 were previously converted to Fixed Rate pursuant to an Ordinance dated August 6, 2007 (the "Amending Ordinance," and collectively with the Bond Ordinance and the Conversion Ordinance, the "Ordinances"), by the City Council of the City. Capitalized terms used in this Remarketing Certificate shall have the meanings assigned to them in the Ordinances. 1. Principal Amount, Maturity Amount, Numbers, Interest Rates, Interest PanDent Dates and Maturities. The Fixed Rate Bonds shall be issued in the denomination of $5,000 and integral multiples thereof, bearing the numbers, maturing serially on September I in each of the years and in the principal amounts, and bearing interest at the rates set forth in the following schedule: Number Year Conversion R-1 Conversion R-2 Conversion R-3 Conversion R-4 Conversion R-5 Conversion R-6 Conversion R-7 Conversion R-8 Conversion R-9 Conversion R -10 Conversion R -11 Conversion R-12 Conversion R -13 Conversion R-14 Conversion R -1 Conversion R -16 Conversion R -17 Amount Interest Rate HOU:2937480.4 Number Year Amount Interest Rate Conversion R -18 Conversion R -19 2. Redempfion. (a) Optional. The City reserves the right to redeem prior to maturity the Fixed Rate Bonds maturing on or after September 1, 2010, in whole or in part (but if in part in the principal amount of $5,000 or any integral multiple thereof), on September 1, 2010, or on any date thereafter, at a price equal to par plus accrued interest to the date of redemption. (b) Mandator The Bonds maturing in the years and will be issued as term bonds and shall be subject to the following mandatory redemption requirements: TERM BONDS MATURING SEPTEMBER 1, Mandatory Redemption Date (September 1) Principal Amount Redemption Price 100% 100 To the extent that such Term Bonds have been previously called for redemption or purchased by, or at the direction of, the City and retired in part and otherwise than from scheduled mandatory redemption payments, future mandatory redemption payments may be reduced by the principal amount of such Term Bonds so redeemed or purchased. The Paying Agent/Registrar will select by lot the specific Term Bonds (or with respect to Term Bonds having a denomination in excess of $5,000, each $5,000 portion thereof) to be redeemed by mandatory redemption. The principal amount of Term Bonds required to be redeemed on any redemption date pursuant to the foregoing mandatory redemption provisions may be reduced, at the option of the City, by the principal amount of any Bonds having the same maturity which have been purchased or redeemed by the City. 3. Purchase Price. The sale of the Bonds is authorized pursuant to the Ordinances and the Purchase Agreement at a price equal to (representing the par value thereof plus a premium of It is hereby found and declared that the sale of the Bonds pursuant to the Purchase Agreement at such price is on the best terms and at the best prices reasonably obtainable by the City. 4. Pursuant to Section 4 of the Conversion Ordinance and Section 3.12 of the Bond Ordinance, the undersigned hereby further finds and determines that: FJOU:2937480.4 (a) The conversion of the Bonds to a Fixed Rate and the remarketing of the Bonds conforms in all material respects with the requirements and limitations of the Bond Ordinance; (b) The true interest rate of the Bonds does not exceed the Maximum Rate; (c) On the Conversion Date, the City has delivered to the Owners, the Paying Agent/Registrar and the Remarketing Agent an Opinion of Bond Counsel as described in Section 3.12 of the Bond Ordinance; (d) The notification requirements of Section 3.12 of the Bond Ordinance have been fulfilled pursuant to the terms listed therein; and (c) The maturities and redemption provision of the Bonds converted to Fixed Rate conform with the requirements relating to maturities and redemption provisions contained in Sections 3.3, 3.6 and 3.12 of the Bond Ordinance as amended by the Amending Ordinance and the Conversion Ordinance. S. The undersigned hereby finds, determines and declares, that in accordance with the requirements of the Ordinances, this Remarketing Certificate complies with and satisfies the terms and provisions of the Ordinances in accordance with the delegation contained therein. WITNESS MY HAND this 2009. Authorized Representative HOU:2937480A Form of Conversion Bonds United States of America State of Texas NUMBER Conversion R- REGISTERED DENOMINATION S REGISTERED CITY OF PEARLAND, TEXAS WATER AND SEWER SYSTEM ADJUSTABLE RATE REVENUE BONDS SERIES 1999 Fixed Rate Interest Rate: Interest Rate Mode: Issue Date: Conversion Date: Maturity Date: Fixed September 1, 2009 September 1, 2009 REGISTERED OWNER: THE CITY OF PEARLAND, TEXAS (the "City"), a municipal corporation duly incorporated under the laws of the State of Texas, for value received hereby promises to pay, but solely from certain Net Revenues as hereinafter provided, to the Registered Owner identified above or registered assigns, on the Maturity Date specified above, upon presentation and surrender of this Series 1999 Bond (hereinafter defined) at the designated payment office of The Bank of New York Mellon Trust Company, National Association in Houston, Texas (the "Paying Agent/Registrar"), 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 Net Revenues, interest thereon at the rate described above, calculated on the basis of a 360-day year, composed of twelve 30-day months, from the Fixed Rate Conversion Date or the most recent interest payment date to which interest has been paid or duly provided for. Interest on this Series 1999 Bond is payable by check sent by United States mail, first class, postage prepaid, payable on March I and September 1, beginning on March 1, 2010, mailed to the Registered Owner as shown on the books of registration kept by the Paying Agent/Registrar as of the fifteenth 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; provided, however, that so long as this Series 1999 Bond remains Outstanding in the denomination listed above, interest on this Series 1999 Bond shall be payable by wire transfer to a bank account designated by the Owner hereof, unless otherwise specified in writing. Any accrued interest payable at maturity or earlier redemption shall be paid upon presentation and surrender of this Series 1999 Bond at the principal corporate trust office of the Paying Agent/Registrar. This Series 1999 Bond shall be dated as of the Issue Date specified HOU:2937480.4 above, but interest shall accrue on the principal amount hereof from the Fixed Rate Conversion Date specified above. THIS SERIES 1999 BONDS SHALL BEAR INTEREST (i) unless and until a Determination of Taxability shall have occurred, at a rate or rates specified above; (ii) if a Determination of Taxability shall occur, then after the event giving rise to the Determination of Taxability, at a rate per annum equal to the Interest Rate otherwise applicable to the Series 1999 Bonds plus 5% per annum (but not in excess of the maximum interest rate permitted under the laws of the State of Texas), during such periods as interest on the Series 1999 Bonds is found to be includable in gross income for federal income tax purposes; provided, however, that if the Internal Revenue Service determines that interest on the Series 1999 Bonds is subject to federal income taxation, the City shall be entitled, at its own expense, to take an appeal to or initiate an action in a federal Tax Court or a federal City Court of initial jurisdiction and no additional interest, over and above the otherwise applicable interest rates, shall be payable on the Series 1999 Bonds until a decision from such proceeding is issued; and (iii) if payment of principal of or interest on any Series 1999 Bond is overdue, each such overdue Series 1999 Bond shall bear interest on overdue principal and, to the extent permitted by law, on overdue interest, at the annual percentage rate announced from time to time by Morgan Guaranty Trust Company of New York, or its successors and assigns, as its prime or reference or similar rate. THIS SERIES 1999 BOND IS ONE OF A DULY AUTHORIZED SERIES OF BONDS (the "Series 1999 Bonds") aggregating $8,000,000, issued for the purpose of constructing certain repairs, improvements, additions and extensions to the City's waterworks and sanitary sewer system, including particularly the design, construction and property acquisition associated with certain new water and sewer lines at certain locations in the City and a new pump station, storage facility and related facilities located near FM 521 and Clear Creek, and payment of costs of issuance of the Series 1999 Bonds, all under and pursuant to an ordinance adopted by the City on October 11, 1999 (the "Ordinance"), and other applicable law. Capitalized terms used herein without definition are defined in the Ordinance. Portions of the Series 1999 Bonds may remain outstanding in an interest payment structure other than a Fixed Rate. THE CITY RESERVES THE RIGHT to redeem prior to maturity the Fixed Rate Bonds maturing on or after September 1, 2010, in whole or in part (but if in part in the principal amount of $5,000 or any integral multiple thereof), on September 1, 2010, or on any date thereafter, at a price equal to par plus accrued interest to the date of redemption. THE BONDS MATURING ON September I in the year _(the "Tenn Bonds") are subject to mandatory sinking fund redemption in the following amounts (subject to reduction as hereinafter provided), on the following dates, in each case at a redemption price equal to the principal amount of the Bonds or the portions thereof so called for redemption plus accrued interest to the date fixed for redemption: Mandatory Redemption Dates Principal Amounts Term Bonds Maturing September 1, HOU:2937480A THE PARTICULAR TERM BONDS to be redeemed shall be selected by the Registrar by lot or other customary random selection method, on or before July 15 of each year in which Tenn Bonds are to be mandatorily redeemed. The principal amount of Tenn Bonds to be mandatorily redeemed in each year shall be reduced by the principal amount of such Term Bonds that have been optionally redeemed on or before July 15 of such year and which have not been made the basis for a previous reduction. To the extent that such Term Bonds have been previously called for redemption or purchased by, or at the direction of, the City and retired in part and otherwise than from scheduled mandatory redemption payments, future mandatory redemption payments may be reduced by the principal amount of such Term Bonds so redeemed or purchased. The principal amount of Term Bonds required to be redeemed on any redemption date pursuant to the foregoing mandatory redemption provisions may be reduced, at the option of the City, by the principal amount of any Bonds having the same maturity which have been purchased or redeemed by the City. THE SERIES 1999 BONDS are also subject to optional redemption by the City, prior to maturity, in whole (or, if in the opinion of bond counsel, interest on the Series 1999 Bonds remaining Outstanding after a partial redemption will be excluded from gross income for federal income tax purposes, in part) at any time after a Determination of Taxability, by payment of a redemption price of the principal amount of each Series 1999 Bond called for redemption plus interest accrued to the date fixed for redemption, without premium (such interest to accrue at the Taxable Rate during the period for which interest on the Series 1999 Bonds is includable in gross income of the Owners for federal income tax purposes). IN THE EVENT OF ANY PARTIAL REDEMPTION of the Bonds as provided above, Bonds to be redeemed shall be selected by the Paying Agent/Registrar by lot and the Paying Agent/Registrar shall provide to each Owner of Bonds to be redeemed notice of the selection thereof not less than thirty (30) days prior to the date of redemption. Payment of the redemption price of Bonds shall be made by the Paying Agent/Registrar by check mailed on the redemption date to the Owners at their addresses appearing on the Register maintained by the Paying Agent/Registrar in accordance with the Ordinance or, at the written direction of any Owner and in the case of Bonds registered in the name of the Purchaser (or its nominee), by wire transfer of immediately available funds to the bank account specified by the Purchaser or other Owner. Except in the event of the redemption of any Bond in its entirety, while the Bonds are Outstanding in a single denomination, any such redemption may be made without surrender of any Bonds by the Owner thereof for payment, provided that the Paying Agent/Registrar's records of such payment shall be conclusive and binding on each Owner, absent manifest error; and further provided that so long as the Bonds are registered and Outstanding in a single denomination, the Owner shall note receipt of such payment on the grid attached to the Bonds. NOTICE OF ANY REDEMPTION shall be given at least thirty (30) days prior to the date fixed for redemption by first class mail, postage prepaid, addressed to the Registered Owner of each Series 1999 Bond to be redeemed in whole or in part at the address shown on the Register. When Series 1999 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. I-IOU:2937480.4 THIS SERIES 1999 BOND AND THE SERIES OF WHICH IT IS A PART are special obligations of the City that are payable from and are equally and ratably secured by a first lien on and pledge of the Net Revenues collected and received by the City from the operation and ownership of the City's water and sewer system as defined and provided in the Ordinance, which Net Revenues are required to be set aside and pledged to the payment of the Outstanding Bonds, as described in the Ordinance, the Series 1999 Bonds, and all Additional Bonds issued on a parity therewith, in the Interest and Sinking Fund and the Reserve Fund maintained for the payment of all such Bonds, all as more fully described and provided for in the Ordinance. THIS SERIES 1999 BOND AND THE SERIES OF WHICH IT IS APART ARE PAYABLE SOLELY FROM SUCH NET REVENUES AND NEITHER THE STATE, NOR ANY POLITICAL SUBDIVISION OR AGENCY OF THE STATE, SHALL BE OBLIGATED TO PAY THE SAME OR THE INTEREST THEREON AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE, THE CITY, OR ANY OTHER POLITICAL CORPORATION, SUBDIVISION OR AGENCY THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR THE INTEREST ON THE SERIES 1999 BONDS. THE OWNER HEREOF SHALL NEVER HAVE THE RIGHT TO DEMAND PAYMENT OF THIS SERIES 1999 BOND OUT OF ANY FUNDS RAISED OR TO BE RAISED BY AD VALOREM TAXATION. THIS SERIES 1999 BOND IS TRANSFERABLE only upon presentation and surrender at the designated payment 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 Ordinance. THE REGISTERED OWNER of this Series 1999 Bond, by acceptance hereof, acknowledges and agrees to be bound by all the terms and conditions of the Ordinance. THE CITY has covenanted in the Ordinance that it will at all times provide a legally qualified Paying Agent and Registrar for the Series 1999 Bonds and will cause notice of any change of Registrar to be mailed to each Registered Owner. THE CITY HAS RESERVED THE RIGHT to issue additional parity bonds, subject to the restrictions contained in the Ordinance, which may be equally and ratably payable from, and secured by a first lien on and pledge of, the Net Revenues in the same manner and to the same extent as the Outstanding Bonds, which includes this Series 1999 Bond and the series of which it is a part. IT IS HEREBY DECLARED AND REPRESENTED that this Series 1999 Bond has been duly and validly issued and delivered; that all acts, conditions, and things required or proper to be performed, to exist, and to be done precedent to or in the issuance and delivery of this Series 1999 Bond have been performed, have existed, and have been done in accordance with law; that the Series 1999 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 1999 Bond and all of the Series 1999 Bonds by the creation of the aforesaid lien on and pledge of the Net Revenues. HOU:293 7480.4 IN WITNESS WHEREOF, the City has caused its corporate seal to be impressed or placed in facsimile hereon and has caused this Series 1999 Bond to be executed by the Mayor and countersigned by the City Secretary by manual, lithographed, or printed facsimile signatures. (SEAL) CITY OF PEARLAND, TEXAS Mayor COUNTERSIGNED City Secretary HOU:2937480.4 [FORM OF AUTHENTICATION CERTIFICATE] The following form of Authentication Certificate shall appear on each of the Series 1999 AUTHENTICATION CERTIFICATE Registration Date: This bond is one of the Series 1999 Bonds described in and delivered pursuant to the within- mentioned Ordinance; and, except for the Series 1999 Bonds initially delivered, this bond has been issued in conversion of and exchange for or replacement of a bond, bonds or a portion of a bond or bonds of an issue which originally was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION 0 Authorized Signature [IOU:2937480.4 [FORM OF ASSIGNMENT] The following form of assignment shall appear on each of the Series 1999 Bonds. ASSIGNMENT For value received, the undersigned hereby sells, assigns, and transfers unto (Social Security or Other Identifying Number) (Print or type name, address, and zip code of transferee) the within bond and hereby irrevocably constitutes and appoints attorney to transfer said bond on the books kept for registration thereof, with full power of substitution in the premises. I UNIX a Signature Guaranteed: Registered Owner NOTICE: The signature must be guaranteed by a commercial bank or a member firm of a national securities exchange. Notarized or witnessed signatures are not acceptable. NOTICE: The signature on this assignment must correspond with the name of the Registered Owner as it appears on the face of the within bond in every particular, without alteration or enlargement or any change whatever. HOU2937480A