Ord. 1386 2009-09-27CERTIFICATE 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 September 28, 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, thus constituting a quorum. Whereupon, among other business, the
following was transacted at said meeting: a written
AN ORDINANCE AUTHORIZING AND ORDERING THE ISSUANCE OF CITY OF
PEARLAND, TEXAS PERMANENT IMPROVEMENT AND REFUNDING BONDS, SERIES
2009; PRESCRIBING THE TERMS AND FORM THEREOF; MAKING OTHER
PROVISIONS REGARDING SUCH BONDS, INCLUDING USE OF THE PROCEEDS
THEREOF, AUTHORIZING THE DEFEASANCE AND DISCHARGE OF CERTAIN
OUTSTANDING OBLIGATIONS, AND MATTERS INCIDENT 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: 5 NAYS: 0 ABSTENTIONS:O
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:2960681.1
SIGNED AND SEALED this September 28, 2009.
Mayor
CITY OF PEARLAND, TEXAS
HOU:2960681.1
ORDINANCE NO. 1386
AN ORDINANCE AUTHORIZING AND ORDERING THE ISSUANCE OF CITY OF
PEARLAND, TEXAS PERMANENT IMPROVEMENT AND REFUNDING BONDS, SERIES
2009; PRESCRIBING THE TERMS AND FORM THEREOF; MAKING OTHER
PROVISIONS REGARDING SUCH BONDS, INCLUDING USE OF THE PROCEEDS
THEREOF, AUTHORIZING THE DEFEASANCE AND DISCHARGE OF CERTAIN
OUTSTANDING OBLIGATIONS, AND MATTERS INCIDENT THERETO; AND
DECLARING AN EMERGENCY
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS:
ARTICLE I
FINDINGS AND DETERMINATIONS
Section 1.1: Findings and Determinations The City Council hereby officially finds and
determines that:
(a) The City of Pearland, Texas (the "City acting through its City Council, is
authorized by Section 3.07 of its Home Rule Charter and the Constitution and laws of the State
of Texas, particularly Chapters 1331 and 1207 of the Texas Government Code, as amended, to
issue bonds for the purpose of making needed public improvements and refunding the Refunded
Obligations (hereinafter defined);
(b) The issuance of the new money portion of the bonds herein authorized was
approved by the voters of the City at an election held for such purpose on May 12, 2007 (the
"Election which was called by the City Council pursuant to Resolution No. R2007 -35 adopted
March 5, 2007, and which authorized the issuance of: (i) $84,190,000 in bonds for purchasing
and otherwise acquiring land for and constructing, repairing and improving streets, bridges and
sidewalks of the City with first priority to be given to the construction, repair and improvement
of Bailey Road, Cullen Boulevard, Dixie Farm Road and McHard Road "Proposition 1 (ii)
$35,305,000 in bonds for purchasing, acquiring, enlarging, extending, equipping and
constructing drainage improvements and facilities at various locations within the City, including
acquiring lands and rights -of -way for any of such purposes "Proposition 2 (iii) $2,895,000 in
bonds for purchasing, acquiring, constructing, repairing and improving land, facilities and
equipment for public safety purposes (including fire fighting needs) "Proposition 3 (iv)
$19,990,000 in bonds for purchasing, acquiring, constructing, repairing and improving land,
facilities and equipment for park and recreation purposes "Proposition 4 (v) $16,225,000 in
bonds for purchasing, acquiring, constructing, repairing and improving land, facilities and
equipment for park and recreation purposes, with first priority to be given to the construction of
recreation center and the construction of a natatorium "Proposition 5 and (vi) $3,410,000 in
bonds for purchasing and otherwise acquiring land for and constructing, repairing and improving
library facilities "Proposition 6
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(c) The City Council canvassed the returns of the Election and by Ordinance
No. R2007 -86, adopted May 22, 2007 declared the results to be in favor of the issuance of the
Bonds;
(d) The City has previously authorized, issued and delivered a first installment of
such authorized bonds in an aggregate principal amount of $22,835,000, consisting of (i)
$12,575,000 of principal attributable to bonds authorized by Proposition 1; (ii) $7,185,000 of
principal attributable to bonds authorized by Proposition 2; (iii) $2,895,000 of principal
attributable to bonds authorized by Proposition 3; and (iv) $180,000 of principal attributable to
bonds authorized by Proposition 4
(e) The City has now determined that it is necessary and advisable to authorize, issue
and deliver a second installment of such authorized bonds in an aggregate principal amount of
$16,735,000, consisting of (i) $9,650,000 of principal attributable to bonds authorized by
Proposition 1 (which amount includes $130,000 of premium generated on the sale of the bond
and applied against the voted authorization of Proposition 1); (ii) $5,592,500 of principal
attributable to bonds authorized by Proposition 2; (iii) $0 of principal attributable to bonds
authorized by Proposition 3; (iv) $0 of principal attributable to bonds authorized by Proposition
4; (v) $1,622,500 of principal attributable to Proposition 5; and (vi) $0 of principal attributable to
Proposition 6.
(f) Following the issuance of the Bonds, the City will have; (i) $61,965,000
authorized but unissued bonds remaining pursuant to the Proposition 1; (ii) $22,527,500
authorized but unissued bonds remaining pursuant to the Proposition 2; (iii) $0 authorized but
unissued bonds remaining pursuant to the Proposition 3; (iv) $19,810,000 authorized but
unissued bonds remaining pursuant to the Proposition 4; (v) $14,602,500 authorized but unissued
bonds remaining pursuant to the Proposition 5; and (vi) $3,410,000 authorized but unissued
bonds remaining pursuant to the Proposition 6;
(g) The City, acting through its City Council, has heretofore issued, assumed or
undertaken and there remain outstanding the obligations described in Exhibit G attached hereto
(the "Refunded Obligations
(h) The City desires to refund the Refunded Obligations in advance of their maturities
which will benefit the City by reducing total debt service;
G) The City is authorized by Chapter 1207, Texas Government Code, as amended, to
accomplish such refunding by depositing with an escrow agent a portion of the proceeds from
the sale of the refunding bonds authorized herein, together with any other legally available funds,
which shall be sufficient to provide for the payment of the Refunded Obligations on their date of
redemption, and such deposit shall constitute the making of firm banking and financial
arrangements for the discharge and final payment of the Refunded Obligations;
0) The City desires to enter into an escrow deposit agreement (the "Escrow Deposit
Agreement with Wells Fargo Bank, N.A.., Houston, Texas, as escrow agent, as authorized in
Chapter 1207, pursuant to which a portion of the proceeds of the refunding bonds herein
authorized, and other legally available funds of the City, if any, will be deposited and applied in
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a manner sufficient to provide for the full and timely payment of all principal of, premium, if
any, and interest on the Refunded Obligations;
(k) Upon the issuance of the refunding bonds herein authorized and the creation of
the escrow referred to above, the Refunded Obligations shall no longer be regarded as being
outstanding, except for the purpose of being paid pursuant to such Escrow Deposit Agreement,
and the pledges, liens, trusts and all other covenants, provisions, terms and conditions of the
ordinances authorizing the issuance of the Refunded Obligations shall be, with respect to the
Refunded Obligations, discharged, terminated and defeased; and
(1) The City Council is of the opinion and hereby affirmatively finds that it is in the
best interest of the City to issue the bonds in the amounts and for the purposes herein stated.
ARTICLE II
DEFINITIONS AND INTERPRETATIONS
Section 2.1: Definitions As used herein, the following terms shall have the meanings
specified, unless the context clearly indicates otherwise:
"Act" shall mean Chapters 1331 and 1207, Texas Government Code, as amended.
"Attorney General" shall mean the Attorney General of the State of Texas.
"Bond" or "Bonds" shall mean any or all of the City of Pearland, Texas Permanent
Improvement Bonds, Series 2009, authorized by this Ordinance.
"City" shall mean the City of Pearland, Texas and, where appropriate, its City Council.
"City Council" shall mean the governing body of the City.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Comptroller" shall mean the Comptroller of Public Accounts of the State of Texas.
"Construction Fund" shall mean the Permanent Improvement Bonds, Series 2009
Construction Fund established by the City and described in section 5.3 of this Ordinance.
"Debt Service Fund" shall mean the Permanent Improvement and Refunding Bonds,
Series 2009 Debt Service Fund established by the City and described in section 5.2 of this
Ordinance.
"DTC" shall mean The Depository Trust Company, New York, New York, or any
successor securities depository.
"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.
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"Escrow Agent" shall mean Wells Fargo Bank, N.A., Houston, Texas, and its successors
in that capacity.
"Escrow Deposit Agreement" shall mean the agreement between the City and the Escrow
Agent relating to the deposit of funds to pay the Refunded Obligations.
"Election" shall mean the election held May 12, 2007 and described in Section 1.1(b) of
this Ordinance.
"Fiscal Year" shall mean the City's then designated fiscal year, which currently is the
twelve -month period beginning on the first day of October of a calendar year and ending on the
last day of September of the next succeeding calendar year and each such period may be
designated with the number of the calendar year in which such period ends.
"Interest Payment Date," when used in connection with any Bond, shall mean March 1,
2010, and each September 1 and March 1 thereafter until maturity or earlier redemption of such
Bond.
"MSRB" means the Municipal Securities Rulemaking Board.
"Ordinance" shall mean this Ordinance and all amendments hereof and supplements
hereto.
"Outstanding when used with reference to the Bonds, shall mean, as of a particular date,
all Bonds theretofore and thereupon delivered pursuant to this Ordinance except: (a) any Bonds
canceled by or on behalf of the City at or before such date; (b) any Bonds defeased pursuant to
the defeasance provisions of this Ordinance or otherwise defeased as permitted by applicable
law; and (c) any Bonds in lieu of or in substitution for which a replacement Bond shall have been
delivered pursuant to this Ordinance.
"Paying Agent/Registrar" shall mean Wells Fargo Bank Texas, N.A., Houston, Texas,
and its successors in that capacity.
"Paying Agent/Registrar Agreement" shall mean the agreement between the City and the
Paying Agent/Registrar as described more particularly in Section 6.1 hereof.
"Record Date" shall mean the close of business on the 15` day of the calendar month
immediately preceding the applicable Interest Payment Date.
"Refunded Obligations" shall mean those obligations described in Exhibit G attached
hereto, which are being refunded and defeased with the proceeds of the Bonds and other legally
available funds of the City, if any.
"Register" shall mean the registration books for the Bonds kept by the Paying
Agent/Registrar in which are maintained the names and addresses of, and the principal amounts
registered to, each Registered Owner of Bonds.
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"Registered Owner" shall mean the person or entity in whose name any Bond is
registered in the Register.
"Report" shall mean the verification report prepared by Grant Thornton LLP, Certified
Public Accountants, verifying the accuracy of certain mathematical computations relating to the
Bonds and the refunding of the Refunded Obligations.
"Rule" means SEC Rule 15c2 12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"Underwriter" shall mean First Southwest Company, BOSC, Inc. Jefferies and Company,
Inc.
Section 2.2: Interpretations All terms defined herein and all pronouns used in this
Ordinance 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 Ordinance 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 Ordinance 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 Bonds and the validity of the levy of ad valorem taxes to pay the principal of and
interest on the Bonds.
ARTICLE III
TERMS OF THE BONDS
Section 3.1: Amount, Purpose and Authorization (a) The Bonds shall be issued in
fully registered form, without coupons, under and pursuant to the authority of the City's Home
Rule Charter and the Act in the total authorized aggregate principal amount of TWENTY EIGHT
MILLION THREE HUNDRED NINETY FIVE THOUSAND AND NO /100 DOLLARS
($28,395,000) for the purpose of providing all or part of the funds for the following purposes: (i)
$9,650,000 for purchasing and otherwise acquiring land for and constructing, repairing and
improving streets, bridges and sidewalks of the City with first priority to be given to the
construction, repair and improvement of Bailey Road, Cullen Boulevard, Dixie Farm Road and
McHard Road (which amount includes $130,000 of premium generated on the sale of the Bonds
and applied against voted authorization); (ii) $5,592,500 for purchasing, acquiring, enlarging,
extending, equipping and constructing drainage improvements and facilities at various locations
within the City, including acquiring lands and rights -of -way for any of such purposes; (iii)
$1,622,500 for purchasing, acquiring, constructing, repairing and improving land, facilities and
equipment for park and recreation purposes, with first priority to be given to the construction of
recreation center and the construction of a natatorium; and (v) $11,660,000 to refund the
Refunded Obligations. Proceeds from the sale of the Bonds will also be used for paying costs of
issuance of the Bonds and other professional services related thereto.
(b) It is hereby found and determined that the refunding of the Refunded Obligations
and the issuance of the Bonds will benefit the City by reducing total debt service, and that such
benefit is sufficient consideration for the issuance of the Bonds.
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(c) It is hereby found and determined that the refunding of the Refunded Obligations
will result in a gross savings of $556,571.80 and a present value savings of $521,024.69 to the
City.
Section 3.2: Designation Date and Interest Payment Dates The Bonds shall be
designated as the "City of Pearland, Texas Permanent Improvement and Refunding Bonds,
Series 2009," and shall be dated October 1, 2009. The Bonds shall bear interest at the rates set
forth in Section 3.3 below, from the later of October 1, 2009 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 on March 1, 2010, and each September 1 and March 1
thereafter until maturity or earlier redemption.
If interest on any 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 City. Such Special Record Date shall be fifteen (15) days prior to the
date fixed for payment of such past due interest, and notice of the date of payment and the
Special Record Date shall be sent by United States mail, first class, postage prepaid, not later
than five (5) days prior to the Special Record Date, to each affected Registered Owner as of the
close of business on the day prior to mailing of such notice.
Section 3.3: Numbers Denomination Interest Rates and Maturities The Bonds shall
be initially issued bearing the numbers, in the principal amounts and bearing interest at the rates
set forth in the following schedule, and may be transferred and exchanged as set out in this
Ordinance. The Bonds shall mature on March 1 in each of the years and in the amounts set out in
such schedule. Bonds delivered in transfer of or in exchange for other Bonds shall be numbered
in 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 Bond or Bonds in lieu of which they are delivered.
Bond
Year of
Principal
Interest
Number
Maturity
Amount
Rate
R -1
2010
$1,400,000
2.000%
R -2
2011
1,200,000
2.000
R -3
2012
1,140,000
2.000
R -4
2013
1,490,000
2.000
R -5
2014
1,545,000
5.000
R -6
2015
1,600,000
2.500
R -7
2016
1,640,000
2.750
R -8
2017
2,500,000
5.000
R -9
2018
1,610,000
4.500
R -10
2018
1,000,000
4.000
R -11
2019
590,000
3.400
R -12
2020
615,000
3.250
Represents a bifurcated maturity.
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Bond
Year of
Principal
Interest
Number
Maturity
Amount
Rate
R -13
2021
635,000
3.400
R -14
2022
655,000
3.600
R -15
2023
680,000
3.700
R -16
2024
705,000
3.750
R -17
2025
735,000
3.850
R -18
2026
765,000
4.000
R -19
2027
795,000
4.000
R -20
2028
825,000
4.100
R -21
2029
865,000
4.200
2020
615,000
615,000
R -22
2034
5,405,000
5.000
The premium in the amount of $336,523.25 generated on the sale of the Bonds
shall be designated as being applied for the refunding of the Refunded Obligations, and
$694,454.40 of the premium generated on the sale of the Bonds shall be designated as being
applied for the permanent improvements. principal amount of the Bonds shall be allocated
between and designated as being applied for the purposes of refunding the Refunded Obligations
and for the permanent improvements as more fully described in section 3.1(a) of this Ordinance
as follows:
Year
Improvements
Refunding
Total
2010
$280,000
$1,120,000
1,400,000
2011
390,000
810,000
1,200,000
2012
310,000
830,000
1,140,000
2013
380,000
1,110,000
1,490,000
2014
390,000
1,155,000
1,545,000
2015
405,000
1,195,000
1,600,000
2016
420,000
1,220,000
1,640,000
2017
435,000
2,065,000
2,500,000
2018
455,000
2,155,000
2,610,000
2019
590,000
590,000
2020
615,000
615,000
2021
635,000
635,000
2022
655,000
655,000
2023
680,000
680,000
2024
705,000
705,000
2025
735,000
735,000
2026
765,000
765,000
2027
795,000
795,000
2028
825,000
825,000
2029
865,000
865,000
2030
835,000
835,000
2031
945,000
945,000
Represents mandatory sinking fund redemption amounts.
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2032 1,090,000
1,090,000
2033 1,235,000
1,235,000
2034 1,300,000
1,300,000
$16,735,000
$11,660,000 $28,395,000
Section 3.4: Redemption Prior to Maturity (a) Optional Redemption. The Bonds
maturing on and after March 1, 2020 are subject to redemption prior to maturity, at the option of
the City, in whole or in part, on March 1, 2019, or any date thereafter, at par plus accrued interest
to the date fixed for redemption.
(b) The Bonds maturing on March 1, 2034 (the "Term 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 March 1, 2034 March 1, 2030 $835,000
March 1, 2031 945,000
March 1, 2032 1,090,000
March 1, 2033 1,235,000
March 1, 2034 (maturity) 1,300,000
The particular Term Bonds to be redeemed shall be selected by the Registrar by lot or other
customary random selection method, on or before January 15 of each year in which Term Bonds
are to be mandatorily redeemed. The principal amount of Term 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 January 15 of such year and which have not been made
the basis for a previous reduction.
(c) Bonds may be redeemed in part only in integral multiples of $5,000. If a Bond
subject to redemption is in a denomination larger than $5,000, a portion of such Bond may be
redeemed, but only in integral multiples of $5,000. In selecting portions of Bonds for
redemption, each Bond shall be treated as representing that number of Bonds of $5,000
denomination which is obtained by dividing the principal amount of such Bond by $5,000. Upon
presentation and surrender of any Bond for redemption in part, the Paying Agent/Registrar, in
accordance with the provisions of this Ordinance, shall authenticate and deliver in exchange
therefor a Bond or Bonds of like maturity and interest rate in an aggregate principal amount
equal to the unredeemed portion of the Bond so surrendered.
(d) Notice of any redemption, identifying the Bonds or portions thereof to be
redeemed, shall be sent by United States mail, first class, postage prepaid, to the Registered
Owners thereof at their addresses as shown on the Register, not less than thirty (30) days before
the date fixed for such redemption. By the date fixed for redemption, due provision shall be
made with the Paying Agent/Registrar for the payment of the redemption price of the Bonds
called for redemption. If such notice of redemption is given, and if due provision for such
payment is made, all as provided above, the Bonds which are to be so redeemed thereby
automatically shall be redeemed prior to their scheduled maturities, they shall not bear interest
HOU:2956607.6
after the date fixed for redemption, and they shall not be regarded as being Outstanding except
for the purpose of being paid with the funds so provided for such payment.
Section 3.5: Manner of Payment, Characteristics, Execution and Authentication The
Paying Agent/Registrar is hereby appointed the paying agent for the Bonds. The Bonds shall be
payable, shall have the characteristics and shall be executed, sealed, registered and authenticated,
all as provided and in the manner indicated in the FORM OF BONDS set forth in Article IV of
this Ordinance. If any officer of the City whose manual or facsimile signature shall appear on the
Bonds shall cease to be such officer before the authentication of the Bonds or before the delivery
of the Bonds, such manual or facsimile signature shall nevertheless be valid and sufficient for all
purposes as if such officer had remained in such office.
The approving legal opinion of Andrews Kurth LLP, Houston, Texas, Bond Counsel,
may be printed on the back of the Bonds over the certification of the City Secretary, which may
be executed in facsimile. CUSIP numbers also may be printed on the Bonds, but errors or
omissions in the printing of either the opinion or the numbers shall have no effect on the validity
of the Bonds.
Section 3.6: Authentication Except for the Bonds to be initially issued, which need not
be authenticated by the Paying Agent/Registrar, only such Bonds as shall bear thereon a
certificate of authentication, substantially in the form provided in Article IV of this Ordinance,
manually executed by an authorized representative of the Paying Agent /Registrar, shall be
entitled to the benefits of this Ordinance or shall be valid or obligatory for any purpose. Such
duly executed certificate of authentication shall be conclusive evidence that the Bond so
authenticated was delivered by the Paying Agent/Registrar hereunder.
Section 3.7: Ownership The City, the Paying Agent/Registrar and any other person
may treat the person in whose name any Bond is registered as the absolute owner of such Bond
for the purpose of making and receiving payment of the principal thereof and interest thereon
and for all other purposes, whether or not such Bond is overdue, and neither the City 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 Registered Owner of any Bond in accordance with this
Section shall be valid and effective and shall discharge the liability of the City and the Paying
Agent/Registrar upon such Bond to the extent of the sums paid.
Section 3.8: Registration. Transfer and Exchange The Paying Agent/Registrar is
hereby appointed the registrar for the Bonds. So long as any Bond remains Outstanding, the
Paying Agent/Registrar shall keep the Register at its office in Houston, Texas in which, subject
to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for
the registration and transfer of the Bonds in accordance with the terms of this Ordinance.
Each Bond shall be transferable only upon the presentation and surrender thereof at the
office of the Paying Agent/Registrar, accompanied by an assignment duly executed by the
Registered Owner or his authorized representative in form satisfactory to the Paying
Agent/Registrar. Upon due presentation of any Bond for transfer, the Paying Agent/Registrar
shall authenticate and deliver in exchange therefor, within seventy -two (72) hours after such
presentation, a new Bond or Bonds, registered in the name of the transferee or transferees, in
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HOU:2956607.6
authorized denominations and of the same maturity and aggregate principal amount and bearing
interest at the same rate as the Bond or Bonds so presented and surrendered.
All Bonds shall be exchangeable upon the presentation and surrender thereof at the office
of the Paying Agent/Registrar for a Bond or Bonds, maturity and interest rate and in any
authorized denomination, in an aggregate principal amount equal to the unpaid principal amount
of the Bond or Bonds presented for exchange. The Paying Agent/Registrar shall be and is hereby
authorized to authenticate and deliver exchange Bonds in accordance with the provisions of this
Section. Each Bond delivered by the Paying Agent/Registrar in accordance with this Section
shall be entitled to the benefits and security of this Ordinance to the same extent as the Bond or
Bonds in lieu of which such Bond is delivered.
All Bonds issued in transfer or exchange shall be delivered to the Registered Owners
thereof at the office of the Paying Agent/Registrar or sent by United States mail, first class,
postage prepaid.
The City or the Paying Agent/Registrar may require the Registered Owner of any Bond to
pay a sum sufficient to cover any tax or other governmental charge that may be imposed in
connection with the transfer or exchange of such Bond. Any fee or charge of the Paying
Agent/Registrar for such transfer or exchange shall be paid by the City.
The Paying Agent/Registrar shall not be required to transfer or exchange any Bond called
for redemption in whole or in part during the forty -five (45) day period immediately prior to the
date fixed for redemption; provided, however, that this restriction shall not apply to the transfer
or exchange by the Registered Owner of the unredeemed portion of a Bond called for redemption
in part.
Section 3.9: Book -Entry Only System The definitive Bonds shall be initially issued in
the form of a separate single fully registered Bond for each of the maturities thereof. Upon
initial issuance, the ownership of each such Bond shall be registered in the name of Cede Co.,
as nominee of DTC, and except as provided in Section 3.11 hereof, all of the Outstanding Bonds
shall be registered in the name of Cede Co., as nominee of DTC. 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 in this Ordinance with
respect to interest checks being mailed to the Owner at the close of business on the Record Date,
the word "Cede Co." in this Ordinance shall refer to such new nominee of DTC.
With respect to Bonds registered in the name of Cede Co., as nominee of DTC, the
City and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC
Participant or to any person on behalf of whom such a DTC Participant holds an interest in the
Bonds. Without limiting the immediately preceding sentence, the City and the Paying
Agent/Registrar shall have no responsibility or obligation with respect to (a) the accuracy of the
records of DTC, Cede Co. or any DTC Participant with respect to any ownership interest in
the Bonds, (b) the delivery to any DTC Participant or any other person, other than a Bondholder,
as shown on the Register, of any notice with respect to the Bonds, including any notice of
redemption or (c) the payment to any DTC Participant or any other person, other than a
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Bondholder as shown in the Register, of any amount with respect to principal of Bonds,
premium, if any, or interest on the Bonds.
Except as provided in Section 3.10 of this Ordinance, the City and the Paying
Agent /Registrar shall be entitled to treat and consider the person in whose name each Bond is
registered in the Register as the absolute owner of such Bond for the purpose of payment of
principal of, premium, if any, and interest on Bonds, for the purpose of giving notices of
redemption and other matters with respect to such Bond, for the purpose of registering transfer
with respect to such Bond, and for all other purposes whatsoever. The Paying Agent/Registrar
shall pay all principal of Bonds, premium, if any, and interest on the Bonds only to or upon the
order of the respective owners, as shown in the Register as provided in this Ordinance, or their
respective attorneys duly authorized in writing, and all such payments shall be valid and
effective to fully satisfy and discharge the City's obligations with respect to payment of principal
of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No
person other than an owner shall receive a Bond evidencing the obligation of the City to make
payments of amounts due pursuant to this Ordinance.
Section 3.10: Payments and Notices to Cede Co. Notwithstanding any other
provision of this Ordinance to the contrary, as long as any 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 the Bonds, and all notices with respect to such Bonds shall be made and given,
respectively, in the manner provided in the representation letter of the City to DTC.
Section 3.11: Successor Securities Depository, Transfer Outside Book -Entry Only
System. In the event that the City or the Paying Agent/Registrar determines that DTC is
incapable of discharging its responsibilities described herein and in the representation letter of
the City to DTC, and that it is in the best interest of the beneficial owners of the Bonds that they
be able to obtain certificated Bonds, the City or the Paying Agent/Registrar shall (a) 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 of the appointment of such successor securities
depository and transfer one or more separate Bonds to such successor securities depository or (b)
notify DTC of the availability through DTC of Bonds and transfer one or more separate Bonds to
DTC Participants having Bonds credited to their DTC accounts. In such event, the Bonds shall
no longer be restricted to being registered in the Register in the name of Cede Co., as nominee
of DTC, but may be registered in the name of the successor securities depository, or its nominee,
or in whatever name or names Bondholders transferring or exchanging Bonds shall designate, in
accordance with the provisions of this Ordinance.
Section 3.12: Replacement Bonds Upon the presentation and surrender to the Paying
Agent /Registrar of a damaged or mutilated Bond, the Paying Agent/Registrar shall authenticate
and deliver in exchange therefor a replacement Bond, of the same maturity, interest rate and
principal amount, bearing a number not contemporaneously outstanding. The City or the Paying
Agent/Registrar may require the Registered Owner of such 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
and the City.
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If any Bond is lost, apparently destroyed or wrongfully taken, the City, pursuant to the
applicable laws of the State of Texas and ordinances of the City, and in the absence of notice or
knowledge that such Bond has been acquired by a bona fide purchaser, shall execute, and the
Paying Agent/Registrar shall authenticate and deliver, a replacement Bond of the same maturity,
interest rate and principal amount, bearing a number not contemporaneously outstanding, pro-
vided that the Registered Owner thereof shall have:
(a) furnished to the City and the Paying Agent/Registrar satisfactory evidence of the
ownership of and the circumstances of the loss, destruction or theft of such Bond;
(b) furnished such security or indemnity as may be required by the Paying
Agent /Registrar and the City to save and hold them harmless;
(c) 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
(d) met any other reasonable requirements of the City and the Paying
Agent/Registrar.
If, after the delivery of such replacement Bond, a bona fide purchaser of the original Bond in lieu
of which such replacement Bond was issued presents for payment such original Bond, the City
and the Paying Agent/Registrar shall be entitled to recover such replacement Bond from the
person to whom it was delivered or any person taking therefrom, except a bona fide purchaser,
and shall be entitled to recover upon the security or indemnity provided therefor to the extent of
any loss, damage, cost or expense incurred by the City or the Paying Agent/Registrar in
connection therewith.
If any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or
is about to become due and payable, the City in its discretion may, instead of issuing a
replacement Bond, authorize the Paying Agent/Registrar to pay such Bond.
Each replacement Bond delivered in accordance with this Section shall be entitled to the
benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which
such replacement Bond is delivered.
Section 3.13: Cancellation All Bonds paid or redeemed in accordance with this
Ordinance, and all Bonds in lieu of which exchange Bonds or replacement Bonds are
authenticated and delivered in accordance herewith, shall be canceled and destroyed upon the
making of proper records regarding such payment or redemption. The Paying Agent/Registrar
shall periodically furnish the City with certificates of destruction of such Bonds.
ARTICLE IV
FORM OF BONDS
The Bonds, including the Form of Comptroller's Registration Certificate, Form of Paying
Agent/Registrar Authentication Certificate, Form of Statement of Insurance, if any, and Form of
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Assignment, shall be in substantially the form set forth in Exhibit A hereto, with such omissions,
insertions and variations as may be necessary or desirable, and not prohibited by this Ordinance.
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ARTICLE V
SECURITY FOR THE BONDS
Section 5.1: Pledge and Levy of Taxes (a) To provide for the payment of principal of
and interest on the Bonds, there is hereby levied, within the limits prescribed by law, for the
current year and each succeeding year thereafter, while the Bonds or any part of the principal
thereof and the interest thereon remain outstanding and unpaid, an ad valorem tax upon all
taxable property within the City sufficient to pay the interest on the Bonds and to create and
provide a sinking fund of not less than 2% of the principal amount of the Bonds or not less than
the principal payable out of such tax, whichever is greater, with full allowance being made for
tax delinquencies and the costs of tax collection, and such taxes, when collected, shall be applied
to the payment of principal of and interest on the Bonds by deposit to the Debt Service Fund and
to no other purpose.
(b) The City hereby declares its purpose and intent to provide and levy a tax legally
sufficient to pay the principal of and interest on the Bonds, it having been determined that the
existing and available taxing authority of the City for such purpose is adequate to permit a
legally sufficient tax. As long as any Bonds remain outstanding, all moneys on deposit in, or
credited to, the Debt Service Fund shall be secured by a pledge of security, as provided by law
for cities in the State of Texas.
(c) The City hereby appropriates from current funds on hand and legally available
therefor, funds sufficient, when added to the accrued interest received from the sale of the Bonds,
to pay the interest on the Bonds payable on March 1, 2010 and September 1, 2010.
Section 5.2: Debt Service Fund The Permanent Improvement and Refunding Bonds,
Series 2009 Debt Service Fund (the "Debt Service Fund is hereby created as a special fund
solely for the benefit of the Bonds. The City shall establish and maintain such fund at an official
City depository and shall keep such fund separate and apart from all other funds and accounts of
the City. Any amount on deposit in the Debt Service Fund shall be maintained by the City in
trust for the Registered Owners of the Bonds. Such amount, plus any other amounts deposited by
the City into such fund and any and all investment earnings on amounts on deposit in such fund,
shall be used only to pay the principal of, premium, if any, and interest on the Bonds.
Section 5.3: Construction Fund The Permanent Improvement and Refunding Bonds,
Series 2009 Construction Fund (the "Construction Fund is hereby created as a special fund of
the City. Money on deposit in the Construction Fund shall be used only for the purposes set
forth in Section 3.1 of this Ordinance. Money on deposit in the Construction Fund may, at the
option of the City, be invested as permitted by Texas law, provided that all such deposits and
investments shall be made in such manner that the money required to be expended from the
Construction Fund will be available at the proper time or times.
All interest and income derived from such deposits and investments shall remain in the
Construction Fund, except that, to the extent required by law, such interest and income may be
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applied to make such payments to the United States of America as shall be required to assure that
interest on the Bonds is exempt from federal income taxation. Upon the completion of the
purposes set forth in Section 3.1 of this Ordinance, any surplus funds on deposit in the
Construction Fund shall be transferred into the Debt Service Fund.
Section 5.4: Further Proceedings After the Bonds to be initially issued have been
executed, it shall be the duty of the Mayor to deliver the Bonds to be initially issued and all
pertinent records and proceedings to the Attorney General for examination and approval. After
the Bonds to be initially issued shall have been approved by the Attorney General, they shall be
delivered to the Comptroller for registration. Upon registration of the Bonds to be initially
issued, the Comptroller (or a deputy lawfully designated in writing to act for the Comptroller)
shall manually sign the Comptroller's registration certificate prescribed herein to be affixed or
attached to the Bonds to be initially issued, and the seal of said Comptroller shall be impressed,
or placed in facsimile, thereon.
ARTICLE VI
CONCERNING THE PAYING AGENT/REGISTRAR
Section 6.1: Acceptance Wells Fargo Bank Texas, N.A., Houston, Texas, is hereby
appointed as the initial Paying Agent /Registrar for the Bonds pursuant to the terms and
provisions of the Paying Agent/Registrar Agreement by and between the City and the Paying
Agent/Registrar. The Paying Agent/Registrar Agreement shall be substantially in the form
attached hereto as Exhibit B the terms and provisions of which are hereby approved, and the
Mayor is hereby authorized to execute and deliver such Paying Agent/Registrar Agreement on
behalf of the City in multiple counterparts and the City Secretary is hereby authorized to attest
thereto and affix the City's seal. Such initial Paying Agent/Registrar and any successor Paying
Agent/Registrar, by undertaking the performance of the duties of the Paying Agent/Registrar
hereunder, and in consideration of the payment of any fees pursuant to the terms of any contract
between the Paying Agent /Registrar and the City and/or the deposits of money pursuant to this
Ordinance, shall be deemed to accept and agree to abide by the terms of this Ordinance.
Section 6.2: Trust Funds All money transferred to the Paying Agent/Registrar in its
capacity as Paying Agent/Registrar for the Bonds under this Ordinance (except any sums
representing Paying Agent/Registrar's fees) shall be held in trust for the benefit of the City, shall
be the property of the City and shall be disbursed in accordance with this Ordinance.
Section 6.3: Bonds Presented Subject to the provisions of Section 6.4, all matured
Bonds presented to the Paying Agent/Registrar for payment shall be paid without the necessity of
further instructions from the City. Such Bonds shall be canceled as provided herein.
Section 6.4: Unclaimed Funds Held by the Paying A eg nt/Registrar Funds held by the
Paying Agent/Registrar that represent principal of and interest on the Bonds remaining
unclaimed by the Registered Owner thereof after the expiration of three years from the date such
funds have become due and payable (a) shall be reported and disposed of by the Paying
Agent/Registrar in accordance with the provisions of Title 6 of the Texas Property Code, as
amended, to the extent such provisions are applicable to such funds, or (b) to the extent such
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provisions do not apply to the funds, such funds shall be paid by the Paying Agent /Registrar to
the City upon receipt by the Paying Agent/Registrar of a written request therefor from the City.
The Paying Agent /Registrar shall have no liability to the Registered Owners of the Bonds
by virtue of actions taken in compliance with this Section.
Section 6.5: Pang Agent/Registrar May Own Bonds The Paying Agent/Registrar in
its individual or any other capacity, may become the owner or pledgee of Bonds with the same
rights it would have if it were not the Paying Agent/Registrar.
Section 6.6: Successor Paying Agents/Registrars The City covenants that at all times
while any Bonds are Outstanding it will provide a legally qualified bank, trust company,
financial institution or other agency to act as Paying Agent/Registrar for the Bonds. The City
reserves the right to change the Paying Agent/Registrar for the Bonds on not less than sixty (60)
days' written notice to the Paying Agent /Registrar, as long as any such notice is effective not less
than 60 days prior to the next succeeding principal or interest payment date on the Bonds.
Promptly upon the appointment of any successor 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 Registered 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 Ordinance.
ARTICLE VII
PROVISIONS CONCERNING SALE AND
APPLICATION OF PROCEEDS OF BONDS
Section 7.1: Sale of Bonds, The sale of the Bonds to the Underwriter at a
price of $29,255,607.65 (representing the principal amount of the Bonds, plus an original issue
premium on the Bonds of $1,030,977.65 and less an underwriting discount of $170,370), plus
accrued interest on the Bonds to the date of delivery of the Certificates, is hereby approved; and
delivery of the Bonds to the Underwriter shall be made upon payment therefor in accordance
with the terms of the Bond Purchase Agreement presented to and hereby approved by the Board,
in substantially the form attached hereto as Exhibit C, which price and terms are hereby found
and determined to be the most advantageous reasonably obtainable by the City. The Mayor or
the City Secretary and other appropriate officials of the City are hereby authorized and directed
to execute such Bond Purchase Agreement on behalf of the City, and the Mayor and the City
Secretary and all other officials, agents and representatives of the City are hereby authorized to
do any and all things necessary or desirable to satisfy the conditions set out therein and to
provide for the issuance and delivery of the Bonds.
Section 7.2: Approval, Registration and Delivery The Mayor is hereby authorized to
have control and custody of the Bonds and all necessary records and proceedings pertaining
thereto pending their delivery, and the Mayor and other officers and employees of the City are
hereby authorized and directed to make such certifications and to execute such instruments as
may be necessary to accomplish the delivery of the Bonds and to assure the investigation,
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examination and approval thereof by the Attorney General and the registration of the initial
Bonds by the Comptroller. Upon registration of the Bonds, the Comptroller (or the Comptroller's
certificates clerk or an assistant certificates clerk lawfully designated in writing to act for the
Comptroller) shall manually sign the Comptroller's Registration Certificates prescribed herein to
be attached or affixed to each Bond initially delivered and the seal of the Comptroller shall be
impressed or printed or lithographed thereon.
Section 7.3: Offering Documents; Ratings The City hereby approves the form and
contents of the Preliminary Official Statement and the final Official Statement, dated as of the
date hereof, relating to the Bonds, and any addenda, supplement or amendment thereto, and
ratifies and approves the distribution of such Preliminary Official Statement and Official
Statement in the offer and sale of the Bonds and in the reoffering of the Bonds by the
Underwriters, with such changes therein or additions thereto as the officials executing same may
deem advisable, such determination to be conclusively evidenced by their execution thereof.
The Mayor is hereby authorized and directed to execute, and the City Secretary is hereby
authorized and directed to attest, the final Official Statement. It is further hereby officially
found, determined and declared that the statements and representations contained in the
Preliminary Official Statement and final Official Statement are true and correct in all material
respects, to the best knowledge and belief of the City Council, and that, as of the date thereof, the
Preliminary Official Statement was an official statement of the City with respect to the Bonds
that was deemed "final" by an authorized official of the City except for the omission of no more
than the information permitted by subsection (b)(1) of Rule 15c2 -12 of the Securities and
Exchange Commission. Copies of the Preliminary Official Statement and the Official Statement
are attached hereto as Exhibit D and Exhibit E respectively.
Further, the City Council hereby ratifies, authorizes and approves the actions of the
Mayor, the City's financial advisor and other consultants in seeking ratings on the Bonds from
Standard Poor's Ratings Services and Fitch Ratings, Inc., and such actions are hereby ratified
and confirmed.
Section 7.4: Application of Proceeds of Bonds; Appropriation (a) Proceeds from the
sale of the Bonds shall, promptly upon receipt by the City, be applied as follows:
(1) Accrued interest shall be deposited into the Debt Service Fund created in Section
5.2 of this Ordinance;
(2) A portion of the proceeds shall be applied to pay expenses arising in connection
with the issuance of the Bonds and the refunding of the Refunded Obligations;
(3) The remaining proceeds shall be (i) used to establish an escrow fund to refund the
Refunded Obligations, as more fully provided below and (ii) deposited into the Construction
Fund created in Section 5.3 of this Ordinance.
(b) From the existing debt service fund for the Refunded Obligations there shall be
transferred to the escrow fund established pursuant to the Escrow Deposit Agreement the amount
of $0.00 and to the Debt Service Fund the amount of $0.0o.
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Section 7.5: Escrow Agreement or Deposit with Paving Agent for Refunded
Bonds The discharge and defeasance of the Refunded Bonds shall be effectuated r pursuant to
the terms and provisions of the Escrow Deposit Agreement, the terms and provisions of which
are hereby approved, subject to such insertions, additions and modifications required to:
(a) :to minimize the District's costs of refunding;
(b) to comply with all applicable laws and regulations relating to the refunding of the
Refunded Bonds; and
(c) to carry out the other intents Mayor or President or Vice President of the City
Council is hereby authorized to execute and deliver such Escrow Deposit
Agreement on behalf of the City in multiple counterparts and the City Secretary is
hereby authorized to attest thereto and affix the City's seal.
Section 7.6: Tax Exemption The City intends that the interest on the Bonds shall be
excludable from gross income of the owners thereof for federal income tax purposes pursuant to
Sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended (the
"Code and all applicable temporary, proposed and final regulations (the "Regulations and
procedures promulgated thereunder and applicable to the Bonds. For this purpose, the City
covenants that it will 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 City shall comply
with each of the following covenants:
(a) The City will use all of the proceeds of the Bonds to (i) make a cash deposit
sufficient to pay the principal of, premium, if any, and interest on the Refunded
Obligations, (ii) provide funds for improvements described in Section 3.1 hereof,
which will be owned and operated by the City and (iii) to pay the costs of issuing
the Bonds except for amounts, if any, described in the Report (as defined in the
Escrow Deposit Agreement) as the rounding amount and the ending cash balance
in the Escrow Fund (as defined in the Escrow Deposit Agreement). The City will
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 City or a related person.
(b) The City will not directly or indirectly take any action, or omit to take any action,
which action or omission would cause the Bonds or the Refunded Obligations 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 ad valorem taxes
collected by the City, investment earnings on such collections, and as available,
proceeds of the Bonds.
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(d) Based upon all facts and estimates now known or reasonably expected to be in
existence on the date the Bonds are delivered, the City reasonably expects that the
proceeds of the Bonds and the Refunded Obligations (to the extent such proceed
remain unexpended) will not be used in a manner that would cause the Bonds or
the Refunded Obligations 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 City will identify and properly
account for all amounts constituting gross proceeds of the Bonds in accordance
with the Regulations. The City 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 City will make such payments as are necessary
to cause the yield on all yield restricted nonpurpose investments allocable to the
Bonds to be less than the yield that is materially higher than the yield on the
Bonds.
(f) The City will not take any action or knowingly omit to take any action that, 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 City represents that not more than fifty percent (50 of the proceeds of the
proceeds of any new money portion of the Bonds or any new money issue
refunded by the Refunded Obligations was invested in nonpurpose investments (as
defined in Section 148(f)(b)(A) of the Code) having a substantially guaranteed
yield for four years or more within the meaning of Section 149(g)(3)(A)(ii) of the
Code, and the City reasonably expected at the time each issue of the Refunded
Obligations was issued that at least eighty -five percent (85 of the spendable
proceeds of the Refunded Obligations would be used to carry out the governmental
purpose of such Bonds within the corresponding three -year period beginning on
the respective dates of the Bonds or the Refunded Obligations.
(h) The City will take all necessary steps to comply with the requirement that certain
amounts earned by the City on the investment of the gross proceeds of the Bonds,
if any, be rebated to the federal government. Specifically, the City will
(i) 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
City allocable to other obligations of the City or moneys which do not represent
gross proceeds of any obligations of the City and retain such records for at least six
years after the day on which the last outstanding Bond is discharged, (ii) account
for all gross proceeds under a reasonable, consistently applied method of
accounting, not employed as an artifice or device to avoid in whole or in part, the
requirements of Section 148 of the Code, including any specified method of
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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 City 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 City 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 City will timely file or cause to be filed with the Secretary of the Treasury of
the United States the information required by Section 149(e) of the Code with
respect to the Bonds on such form and in such place as the Secretary may
prescribe.
(k) The City will not issue or use the Bonds as part of an "abusive arbitrage device"
(as defined in Section 1.148 -10(a) of the Regulations). Without limiting the
foregoing, the Bonds are not and will not be a part of a transaction or series of
transactions that attempts to circumvent the provisions of Section 148 of the Code
and the Regulations, by (i) enabling the City to exploit the difference between tax
exempt and taxable interest rates to gain a material financial advantage, or
(ii) increasing the burden on the market for tax exempt obligations.
(1) Proper officers of the City charged with the responsibility for issuing the Bonds
are hereby directed to make, execute and deliver certifications as to facts,
estimates or circumstances in existence as of the date of issuance of the Bonds and
stating whether there are facts, estimates or circumstances that would materially
change the City's expectations. On or after the date of issuance of the Bonds, the
City 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 City.
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In complying with the foregoing covenants, the City may rely upon an unqualified
opinion issued to the City by nationally recognized bond counsel that any action by the City or
reliance upon any interpretation of the Code or Regulations contained in such opinion will not
cause interest on the Bonds to be includable in gross income for federal income tax purposes
under existing law.
Notwithstanding any other provision of this Ordinance, the City's representations and
obligations under the covenants and provisions of this Section 7.5 shall survive the defeasance
and discharge of the Bonds for as long as such matters are relevant to the exclusion of interest on
the Bonds from the gross income of the owners for federal income tax purposes.
Section 7.7: Escrow Deposit Agreement The discharge and defeasance of the
Refunded Obligations shall be effectuated pursuant to the terms and provisions of the Escrow
Deposit Agreement to be entered into by and between the City and the Escrow Agent, which
shall be substantially in the form attached hereto as Exhibit F the terms and provisions of which
are hereby approved, subject to such insertions, additions and modifications as shall be necessary
(a) to carry out the program designed for the City by the Underwriters and the City's Financial
Advisor, (b) to minimize the City's costs of refunding, (c) to comply with all applicable laws and
regulations relating to the refunding of the Refunded Obligations and (d) to carry out the other
intents and purposes of this Ordinance, and the Mayor is hereby authorized to execute and
deliver such Escrow Deposit Agreement on behalf of the City in multiple counterparts and the
City Secretary is hereby authorized to attest thereto and affix the City's seal.
Section 7.8: Redemption Prior to Maturity of Refunded Obligations To minimize the
City's costs of refunding, the City hereby authorizes and directs that certain of the Refunded
Obligations shall be called for redemption prior to maturity in the amounts, at the dates and at the
redemption prices set forth in Exhibit G attached hereto, and the Mayor is hereby authorized and
directed to take all necessary and appropriate action to give or cause to be given a notice of
redemption and/or a notice of defeasance to the holders or paying agent/ registrars, as
appropriate, of such bonds, and, if required, to publish such notices, all in the manner required by
the documents authorizing the issuance of such Refunded Obligations.
Section 7.9: Cash Deposit to Escrow Fund The Mayor and other officers and
employees of the City are hereby authorized to deposit cash, in such amounts as may be provided
for in the Report to be attached to the Escrow Deposit Agreement, and to execute any and all
agreements and other documents necessary to effectuate the foregoing. Any actions heretofore
taken for such purpose are hereby ratified and approved.
Section 7.10: Related Matters In order that the City shall satisfy in a timely manner all
of its obligations under this Ordinance, the Mayor, City Secretary and all other appropriate
officers, agents, representatives and employees of the City are hereby authorized and directed to
take all other actions that are reasonably necessary to provide for the issuance and delivery of the
Bonds, including, without limitation, executing and delivering on behalf of the City all
certificates, consents, receipts, requests, notices, and other documents as may be reasonably
necessary to satisfy the City's obligations under this Ordinance and to direct the transfer and
application of funds of the City consistent with the provisions of this Ordinance.
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ARTICLE VIII
CONTINUING DISCLOSURE UNDERTAKING
Section 8.1: Annual Reports The City shall provide annually to the MSRB, within six
(6) months after the end of each fiscal year and in an electronic format prescribed by the MSRB,
financial information and operating data with respect to the City of the general type described in
the Official Statement, being the information described in Exhibit H attached hereto. Any
financial statements so to be provided shall be (a) prepared in accordance with generally
accepted accounting principles for governmental units as prescribed by the Government
Accounting Standards Board from time to time, as such principles may be changed from time to
time to comply with state or federal law or regulation and (b) audited, if the City commissions an
audit of such statements and the audit is completed within the period during which they must be
provided. If audited financial statements are not available at the time the financial information
and operating data must be provided, then the City shall provide unaudited financial statements
for the applicable fiscal year to the MSRB and shall provide to the MSRB audited financial
statements, when and if the same become available.
If the City changes its Fiscal Year, it will notify the MSRB of the change (and of the date
of the new fiscal year end) prior to the next date by which the City otherwise would be required
to provide financial information and operating data pursuant to this Article.
The financial information and operating data to be provided pursuant to this Article may
be set forth in full in one or more documents or may be included by specific reference to
documents (i) available to the public on the MSRB's internet web site or (ii) filed with the SEC.
Section 8.2: Material Event Notice The City shall notify the MSRB in an
electronic format prescribed by the MSRB, in a timely manner, of any of the following events
with respect to the 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 Bonds;
(g) Modifications to rights of holders of the Bonds;
(h) Bond calls;
(i) Defeasances;
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HOU:2956607.6
0) Release, substitution, or sale of property securing repayment of the Bonds;
(k) Rating changes.
The City shall notify the MSRB in an electronic format prescribed by the MSRB, in a
timely manner, of any failure by the City to provide financial information or operating data in
accordance with Section 8.1 of this Order by the time required by such Article
Section 8.3: Identifying Information All documents provided to the MSRB shall be
accompanied by identifying information, as prescribed by the MSRB.
Section 8.4: Limitations Disclaimers and Amendments The City shall be obligated to
observe and perform the covenants specified in this Article for so long as, but only for so long as,
the City remains an "obligated person" with respect to the Bonds within the meaning of the Rule,
except that the City in any event will give the notice required by Section 7.2 of any Bond calls
and defeasance that cause the City to be no longer such an "obligated person."
The provisions of this Article are for the sole benefit of the Holders and beneficial
owners of the Bonds, and nothing in this Article, express or implied, shall give any benefit or any
legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to
provide only the financial information, operating data, principal statements, and notices which it
has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide
any other information that may be relevant or material to a complete presentation of the City's
financial results, condition, or prospects or hereby undertake to update any information provided
in accordance with this Article or otherwise, except expressly provided herein. The City does not
make any representation or warranty concerning such information or its usefulness to a decision
to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER
OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY
THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY
COVENANT SPECIFIED IN THIS ARTICLE, 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 City in observing or performing its obligations under this Article shall
constitute a breach of or default under the Order for purposes of any other provision of this
Order.
Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities law.
The provisions of this Article may be amended by the City from time to time to adapt to
changed circumstances that arise from a change, legal requirements, a change in law, or a change
in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of
this Article, as so amended, would have permitted an underwriter to purchase or sell Bonds in the
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HOU:2956607.6
primary offering of the Bonds in compliance with the Rule, taking into account any amendments
or interpretations of the Rule to the date of such amendment, as well as such changed
circumstances and (2) either (a) the Holders of a majority in aggregate principal amount (or any
greater amount required by any other provision of this Order that authorizes such an amendment)
of the Outstanding Bonds consent to such amendment or (b) a person that is unaffiliated with the
City (such as nationally recognized bond counsel) determines that such amendment will not
materially impair the interest of the Holders and beneficial owners of the Bonds. If the City so
amends the provisions of this Article it shall include with any amended financial information or
operating data next provided in accordance with Section 7.1 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 City may also amend or repeal the provisions of
this continuing disclosure agreement if the SEC amends or repeals the applicable provision of the
Rule or a court of final jurisdiction enters judgment that such provisions of the Rule are invalid,
but only if and to the extent that the provisions of this sentence would not prevent an underwriter
from lawfully purchasing or selling Bonds in the primary offering of the Bonds.
ARTICLE IX
MISCELLANEOUS
Section 9.1: Defeasance The City may defease the provisions of this Ordinance and
discharge its obligations to the Registered Owners of any or all of the Bonds to pay the principal
of and interest thereon in any manner permitted by law, including by depositing with the Paying
Agent/Registrar or with the Comptroller of Public Accounts of the State of Texas either:
(a) cash in an amount equal to the principal amount of such Bonds plus interest
thereon to the date of maturity or redemption; or
(b) pursuant to an escrow or trust agreement, cash and/or (i) direct noncallable
obligations of United States of America, including obligations that are unconditionally
guaranteed by the United States of America; (ii) noncallable obligations of an agency or
instrumentality of the United States, including obligations that are unconditionally guaranteed or
insured by the agency or instrumentality and that, on the date the governing body of the issuer
adopts or approves the proceedings authorizing the issuance of refunding bonds, are rated as to
investment quality by a nationally recognized investment rating firm not less than AAA or its
equivalent; or (iii) noncallable obligations of a state or an agency or a county, municipality, or
other political subdivision of a state that have been refunded and that, on the date the governing
body of the issuer adopts or approves the proceedings authorizing the issuance of refunding
bonds, are rated as to investment quality by a nationally recognized investment rating firm not
less than AAA or its equivalent, which, in the case of (i), (ii) or (iii), may be in book -entry form,
and the principal of and interest on which will, when due or redeemable at the option of the
holder, without further investment or reinvestment of either the principal amount thereof or the
interest earnings thereon, provide money in an amount which, together with other moneys, if
any, held in such escrow at the same time and available for such purpose, shall be sufficient to
provide for the timely payment of the principal of and interest thereon to the date of maturity or
earlier redemption; provided, however, that if any of the Bonds are to be redeemed prior to their
respective dates of maturity, provision shall have been made for giving notice of redemption as
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HOU:2956607.6
provided in this Ordinance. Upon such deposit, such Bonds shall no longer be regarded to be
Outstanding or unpaid. Any surplus amounts not required to accomplish such defeasance shall
be returned to the City.
Section 9.2: Application of Chapter 1208, Government Code Chapter 1208,
Government Code, applies to the issuance of the Bonds and the pledge of the taxes granted by
the City under Section 5.1 of this Ordinance, and such pledge is therefore valid, effective and
perfected. If Texas law is amended at any time while the Bonds are outstanding and unpaid such
that the pledge of the taxes granted by the City under Section 5.1 of this Ordinance is to be
subject to the filing requirements of Chapter 9, Business Commerce Code, then in order to
preserve to the Registered Owners of the Bonds the perfection of the security interest in said
pledge, the City agrees to take such measures as it determines are reasonable and necessary
under Texas law to comply with the applicable provisions of Chapter 9, Business Commerce
Code and enable a filing to perfect the security interest in said pledge to occur.
Section 9.3: Ordinance a Contract Amendments This Ordinance shall constitute a
contract with the Registered Owners from time to time, be binding on the City, and shall not be
amended or repealed by the City so long as any Bond remains Outstanding except as permitted in
this Section. The City may, without the consent of or notice to any Registered Owners, from time
to time and at any time, amend this Ordinance in any manner not detrimental to the interests of
the Registered Owners, including the curing of any ambiguity, inconsistency, or formal defect or
omission herein. In addition, the City may, with the consent of Registered Owners who own in
the aggregate 51 of the principal amount of the Bond then Outstanding, amend, add to, or
rescind any of the provisions of this Ordinance; provided that, without the consent of all
Registered Owners of Outstanding Bonds, no such amendment, addition, or rescission shall
(i) extend the time or times of payment of the principal of and interest on the Bonds, reduce the
principal amount thereof, the redemption price, or the rate of interest thereon, or in any other
way modify the terms of payment of the principal of or interest on the Bonds, (ii) give any
preference to any Bond over any other Bond, or (iii) reduce the aggregate principal amount of
Bonds required to be held by Registered Owners for consent to any such amendment, addition,
or rescission.
Section 9.4: Legal Holidays In any case where the date interest accrues and becomes
payable on the Bonds or principal of the Bonds matures or the date fixed for redemption of any
Bonds or a Record Date shall be in the City a Saturday, Sunday, legal holiday or a day on which
banking institutions are authorized by law to close, then payment of interest or principal need not
be made on such date, or the Record Date shall not occur on such date, but payment may be
made or the Record Date shall occur on the next succeeding day which is not in the City a
Saturday, Sunday, legal holiday or a day on which banking institutions are authorized by law to
close with the same force and effect as if (i) made on the date of maturity or the date fixed for
redemption and no interest shall accrue for the period from the date of maturity or redemption to
the date of actual payment or (ii) the Record Date had occurred on the fifteenth day of that
calendar month.
Section 9.5: No Recourse Against City Officials No recourse shall be had for the
payment of principal of or interest on any Bonds or for any claim based thereon or on this
Ordinance against any official of the City or any person executing any Bonds.
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Section 9.6: Further Proceedings The Mayor, City Secretary and other appropriate
officials of the City are hereby authorized and directed to do any and all things necessary and/or
convenient to carry out the terms of this Ordinance.
Section 9.7: 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 9.8: Power to Revise Form of Documents Notwithstanding any other
provision of this Ordinance, the Mayor is hereby authorized to make or approve such revisions,
additions, deletions, and variations to this Ordinance and in the form of the documents attached
hereto as exhibits as, in the judgment of the Mayor, and in the opinion of Bond Counsel to the
City, may be necessary or convenient to carry out or assist in carrying out the purposes of this
Ordinance, or as may be required for approval of the Bonds by the Attorney General of Texas;
provided, however, that any changes to such documents resulting in substantive amendments to
the terms and conditions of the Bonds or such documents shall be subject to the prior approval of
the City Council.
Section 9.9: Open Meeting It is hereby found, determined and declared that a
sufficient written notice of the date, hour, place and subject of the meeting of the City Council at
which this Ordinance was adopted was posted at a place convenient and readily accessible at all
times to the general public at City Hall for the time required by law preceding this meeting, as
required by the Open Meetings Law, Chapter 551, Texas Government Code, and that this
meeting has been open to the public as required by law at all times during which this Ordinance
and the subject matter thereof has been discussed, considered and formally acted upon. The City
Council further ratifies, approves and confirms such written notice and the contents and posting
thereof.
Section 9.10: Repealer All orders, resolutions and ordinances, or parts thereof,
inconsistent herewith are hereby repealed to the extent of such inconsistency.
Section 9.11: Declaration of Emer eg ncy It is hereby officially found and determined
that a case of emergency and urgent public necessity exists that requires that this Ordinance be
passed finally and take effect immediately on the date of its introduction, such emergency and
urgent public necessity being that the proceeds from the sale of the Bonds are required as soon as
possible and without delay for the purposes set forth herein.
Section 9.12: Effective Date This Ordinance shall be in force and effect from and after
its passage on the date shown below.
[signature page follows]
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PASSED AND APPROVED on first reading pursuant to Section 3.10 of the City Charter
this September 2009.
CITY OF PEARLAND, T
Mayor
ATTEST
Exhibit A
Form of Bond
Exhibit B
Paying Agent/Registrar Agreement
Exhibit C
Bond Purchase Agreement
Exhibit D
Preliminary Official Statement
Exhibit E
Official Statement
Exhibit F
Escrow Deposit Agreement
Exhibit G
Refunded Obligations
Exhibit F
Continuing Disclosure
S -1
HOU:2956607.4
EXHIBIT A
FORM OF BOND
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF PEARLAND, TEXAS
PERMANENT IMPROVEMENT AND REFUNDING BONDS, SERIES 2009
NUMBER DENOMINATION
I R-
REGISTERED
REGISTERED
'INTEREST RATE: DATED DATE: 2 MATURITY DATE: 2 CUSIP:
October 1, 2009 March 1,
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS
'THE CITY OF PEARLAND, TEXAS, a municipal corporation of the State of Texas
(the "City for value received, hereby promises to pay to the Registered Owner identified above
or its registered assigns, on the maturity date specified above (or on earlier redemption as herein
provided), upon presentation and surrender of this Bond at the office of Wells Fargo Bank Texas,
N.A., Houston, Texas or its successor (the "Paying Agent/Registrar the principal amount
identified above (or so much thereof as shall not have been paid or deemed to have been paid
upon prior redemption) payable in any coin or currency of the United States of America which
on the date of payment of such principal is legal tender for the payment of debts due to the
United States of America, and to pay interest thereon at the rate shown above, calculated on a
basis of a 360 -day year composed 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 Bond is payable on March 1, 2010, and each September 1 and
Initial Bond shall be numbered T -1.
2 Omitted from Initial Bond.
3 The first sentence of the initial Bond shall read as follows:
THE CITY OF PEARLAND, TEXAS, a municipal corporation of the State of Texas (the "City for value
received, hereby promises to pay to the Registered Owner identified above or its registered assigns, on
March 1 of the year of maturity specified below (or on earlier redemption as herein provided), upon
presentation and surrender of this Bond at the office of Wells Fargo Bank Texas, N.A., Houston, Texas or
its successor (the "Paying Agent/Registrar the principal amount identified set forth in the following
schedule: [Insert information regarding years of maturity, principal amounts and interest rates from the
Section 3.3 of the Bond Order] (or so much thereof as shall not have been paid or deemed to have been
paid upon prior redemption) payable in any coin or currency of the United States of America which on the
date of payment of such principal is legal tender for the payment of debts due to the United States of
America, and to pay interest thereon at the rate shown above, calculated on a basis of a 360 -day year
composed 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.
A -1
HOU:2956607.5
March 1 thereafter until maturity or earlier redemption of this Bond, by check sent by United
States mail, first class, postage prepaid, by the Paying Agent/Registrar to the Registered Owner
of record as of the close of business on the 15 day of the calendar month immediately preceding
the applicable interest payment date, as shown on the registration books kept by the Paying
Agent/Registrar. Any accrued interest payable at maturity or earlier redemption shall be paid
upon presentation and surrender of this Bond at the office of the Paying Agent/Registrar.
THIS BOND IS ONE OF A DULY AUTHORIZED SERIES OF BONDS (the "Bonds
in the aggregate principal amount of $28,395,000 issued pursuant to an ordinance adopted by the
City Council of the City on September 28, 2009 (the "Ordinance for the purpose of providing
funds for public improvements in the City and refunding certain outstanding obligations of the
City, under and pursuant to the authority of Chapters 1207 and 1331, Texas Government Code,
as amended, the City's Home Rule Charter, and an election held on May 12, 2007. Proceeds of
the Bonds will also be used to pay costs of issuance of the Bonds and other professional services
related thereto.
'THIS BOND SHALL NOT BE VALID OR OBLIGATORY for any purpose or be
entitled to any benefit under the Ordinance unless this Bond is authenticated by the Paying
Agent/Registrar by due execution of the authentication certificate endorsed hereon.
THE CITY RESERVES THE RIGHT, at its option, to redeem, prior to their maturity,
Bonds maturing on and after March 1, 2020, in whole or in part, on March 1, 2019, or any date
thereafter, at par plus accrued interest to the date fixed for redemption.
THE BONDS MATURING on March 1, 2034 (the "Term 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 March 1, 2034 March 1, 2030 $835,000
March 1, 2031 945,000
March 1, 2032 1,090,000
March 1, 2033 1,235,000
March 1, 2034 (maturity) 1,300,000
The particular Term Bonds to be redeemed shall be selected by the Registrar by lot or other
customary random selection method, on or before January 15 of each year in which Term Bonds
are to be mandatorily redeemed. The principal amount of Term 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 January 15 of such year and which have not been made
the basis for a previous reduction.
In the Initial Bond, this paragraph shall read:
THIS BOND SHALL NOT BE VALID OR OBLIGATORY for any purpose or be entitled to any benefit under the
Ordinance unless this Bond is registered by the Comptroller of Public Accounts of the State of Texas by due
execution of the registration certificate endorsed hereon.
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HOU:2956607.5
BONDS MAY BE REDEEMED IN PART only in integral multiples of $5,000. If a Bond
subject to redemption is in a denomination larger than $5,000, a portion of such Bond may be
redeemed, but only in integral multiples of $5,000. In selecting portions of Bonds for
redemption, each Bond shall be treated as representing that number of Bonds of $5,000
denomination which is obtained by dividing the principal amount of such Bond by $5,000. Upon
surrender of any Bond for redemption in part, the Paying Agent/Registrar, in accordance with the
provisions of the Ordinance, shall authenticate and deliver in exchange therefor a Bond or Bonds
of like maturity and interest rate in an aggregate principal amount equal to the unredeemed
portion of the Bond so surrendered.
NOTICE OF ANY SUCH REDEMPTION, identifying the Bonds or portions thereof to
be redeemed, shall be sent by United States mail, first class, postage prepaid, to the Registered
Owners thereof at their addresses as shown on the books of registration kept by the Paying
Agent/Registrar, not less than thirty (30) days before the date fixed for such redemption. By the
date fixed for redemption, due provision shall be made with the Paying Agent/Registrar for the
payment of the redemption price of the Bonds called for redemption. If such notice of
redemption is given, and if due provision for such payment is made, all as provided above, the
Bonds which are to be so redeemed thereby automatically shall be redeemed prior to their
scheduled maturities, they shall not bear interest after the date fixed for redemption, and they
shall not be regarded as being outstanding except for the purpose of being paid with the funds so
provided for such payment.
THIS BOND IS TRANSFERABLE only upon presentation and surrender at the office of
the Paying Agent/Registrar, accompanied by an assignment duly executed by the Registered
Owner or its authorized representative, subject to the terms and conditions of the Ordinance.
THIS BOND IS EXCHANGEABLE at the office of the Paying Agent/Registrar for a
Bond or Bonds of the same maturity and interest rate and in the principal amount of $5,000 or
any integral multiple thereof, subject to the terms and conditions of the Ordinance.
THE PAYING AGENT/REGISTRAR is not required to accept for transfer or exchange
any Bond called for redemption, in whole or in part, during the forty -five (45) day period
immediately prior to the date fixed for redemption; provided, however, that such limitation shall
not apply to the transfer or exchange by the Registered Owner of an unredeemed portion of a
Bond called for redemption in part.
THE CITY OR PAYING AGENT/REGISTRAR may require the Registered Owner of
any Bond to pay a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with the transfer or exchange of a Bond. Any fee or charge of the Paying
Agent/Registrar for a transfer or exchange shall be paid by the City.
THE REGISTERED OWNER of this Bond by acceptance hereof, acknowledges and
agrees to be bound by all the terms and conditions of the Ordinance.
IT IS HEREBY DECLARED AND REPRESENTED that this Bond has been duly and
validly issued and delivered; that all acts, conditions and things required or proper to be
A -3
HOU:2956607.5
performed, exist and to be done precedent to or in the issuance and delivery of this Bond have
been performed, exist and have been done in accordance with law; that the Bonds do not exceed
any constitutional or statutory limitation; and that annual ad valorem taxes sufficient to provide
for the payment of the interest on and principal of this Bond, as such interest comes due and such
principal matures, have been levied and ordered to be levied, within the limits prescribed by law,
against all taxable property in the City and have been irrevocably pledged for such payment.
REFERENCE IS HEREBY MADE TO THE ORDINANCE, a copy of which is filed
with the Paying Agent/Registrar, for the full provisions thereof, to all of which the Registered
Owners of the Bonds assent by acceptance of the Bonds.
IN WITNESS WHEREOF, the City has caused its corporate seal to be impressed or
placed in facsimile hereon and this Bond to be signed by the Mayor and countersigned by the
City Secretary by their manual, lithographed or printed facsimile signatures.
(AUTHENTICATION OR CITY OF PEARLAND, TEXAS
REGISTRATION CERTIFICATE)
Mayor
(SEAL)
COUNTERSIGNED:
City Secretary
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HOU:2956607.5
FORM OF COMPTROLLER'S REGISTRATION CERTIFICATE
The following form of Comptroller's Registration Certificate shall be attached or affixed
to each of the Bonds initially delivered:
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS REGISTER NO.
THE STATE OF TEXAS
I hereby certify that this bond has been examined, certified as to validity and approved by
the Attorney General of the State of Texas, and that this bond has been registered by the
Comptroller of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL OF OFFICE this
(SEAL)
Comptroller of Public Accounts
of the State of Texas
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
The following form of authentication certificate shall be printed on the face of each of the
Bonds other than those initially delivered:
AUTHENTICATION CERTIFICATE
This Bond is one of the Bonds described in and delivered pursuant to the within
mentioned Ordinance; and, except for the Bonds initially delivered, this Bond has been issued in
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.
WELLS FARGO BANK, N.A.
as Paying Agent/Registrar
:J
Authorized Signature
Date of Authentication:
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HOU:2956607.5
FORM OF ASSIGNMENT
The following form of assignment shall be printed on the back of each of the Bonds:
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
(Please print or type name, address, and zip code of Transferee)
(Please insert Social Security or Taxpayer Identification Number of Transferee)
the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer such bond on the books kept for
registration thereof, with full power of substitution in the premises.
Signature Guaranteed:
NOTICE: Signature must be guaranteed
by a member firm of the New York Stock
Exchange or a commercial bank or trust
company.
Registered Owner
NOTICE: The signature above must
correspond to the name of the Registered
Owner as shown on the face of this bond in
every particular, without any alteration,
enlargement or change whatsoever.
W
HOU:2956607.5
EXHIBIT B
PAYING AGENUREGISTRAR AGREEMENT
See Tab
I:
HOU:2956607.5
EXHIBIT C
BOND PURCHASE AGREEMENT
See Tab No._
C -1
HOU:2956607.5
rov. "4_
PRELIMINARY OFFICIAL STATEMENT
See Tab No.
HOU:2956607.5
EXHIBIT E
OFFICIAL STATEMENT
See Tab No.
E -1
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EXHIBIT F
ESCROW DEPOSIT AGREEMENT
See Tab No.
F -1
HOU:2956607.5
EXHIBIT G
REFUNDED OBLIGATIONS
Certificates of Obligation, Series 1998
Maturity Date
Interest Rate
Par Amount
Call Date
Price
03/01/2010
3.35%
$1,115,000
10/30/2009
100%
03/01/2011
3.45
1,050,000
10/30/2009
100%
03/01/2012
3.55
1,090,000
10/30/2009
100%
03/01/2013
3.60
1,125,000
10/30/2009
100%
03/01/2014
3.65
1,170,000
10/30/2009
100%
03/01/2015
3.70
1,210,000
10/30/2009
100%
03/01/2016
3.75
1,250,000
10/30/2009
100%
03/01/2017
3.80
2,090,000
10/30/2009
100%
03/01/2018
3.80
2,160,000
10/30/2009
100%
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EXHIBIT H
CONTINUING DISCLOSURE
The following information is referred to in Section 8.1 of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified (and included in the Appendix or
under the headings of the Official Statement referred to) below:
1. The audited information found in the Official Statement under the headings
"INVESTMENT AUTHORITY AND INVESTMENT OBJECTIVES OF THE CITY- Current
Investments," "CITY TAX DEBT," "TAX DATA" (except under the subheading estimated
overlapping taxes), "SELECTED FINANCIAL DATA" and in Appendix B.
Accounting Principles
The accounting principles referred to in such Section are the accounting principles
described in the notes to the financial statements referred to in paragraph 1 above.
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