RDAP 2015-09- 2015-10-12 •
RESOLUTION NO. RDAP-2015-09
RESOLUTION AUTHORIZING THE ISSUANCE OF $66,030,000 DEVELOPMENT
AUTHORITY OF PEARLAND TAX INCREMENT CONTRACT REVENUE AND
REFUNDING BONDS, SERIES 2015; APPROVING DOCUMENTS RELATING TO
THE SERIES 2015 BONDS; AUTHORIZING THE REDEMPTION PRIOR TO
MATURITY OF CERTAIN OUTSTANDING BONDS; AND CONTAINING OTHER
PROVISIONS RELATED THERETO
BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE DEVELOPMENT
AUTHORITY OF PEARLAND:
ARTICLE I
RECITALS
WHEREAS, by Ordinance No. 891, adopted on December 21, 1998, the City of
Pearland (the "City") created Reinvestment Zone Number Two, City of Pearland, Texas
(the "TIRZ") pursuant to Chapter 311, Texas Tax Code, and by Ordinance No. 1276,
adopted on July 10, 2006, the City approved an annexation of land into the TIRZ; and
WHEREAS, by Ordinance No. 918, adopted on August 23, 1999, the City
approved a preliminary project plan for the TIRZ and a preliminary reinvestment zone
financing plan for the TIRZ, which it amended by Ordinance No. 1276, adopted on July
10, 2006, by Ordinance No. 1312 adopted on November 13, 2006, and by Ordinance No.
1314, adopted on November 13, 2006; and
WHEREAS, by Resolution No. 2004-107, adopted on June 28, 2004, the City
authorized the creation of the Development Authority of Pearland (the "Authority") to
aid, assist and act on behalf of the City in the performance of the City's governmental
and proprietary functions with respect to, and to provide financing for the TIRZ; and
WHEREAS, by Ordinance No. R2004-17, adopted on October 11, 2004, the City
approved and on October 5, 2004, the Boards of Directors of the TIRZ and the Authority
approved that certain Agreement by and between the City, the TIRZ, and the Authority,
as amended by Amendment No. 1 to the Tri-Party Agreement, dated September 17,
2007 (collectively, the "Tri-Party Agreement"), pursuant to which the City delegated to
the Authority the power and authority to issue, sell or deliver its bonds, notes or other
obligations in accordance with the terms of the Tri-Party Agreement; and
WHEREAS, the Authority has previously issued its $56,915,000 Tax Increment
Contract Revenue and Refunding Bonds, Series 2012 of which $45,830,000 remain
outstanding (the"Refunded Bonds");
WHEREAS, the Authority now desires to issue bonds to refund the Refunded
Bonds and to pay Project Costs;
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WHEREAS, the Authority wishes to refund the Refunded Bonds for debt service
savings and that such refunding is in the best interests of the Authority.
WHEREAS, the Authority is authorized to issue refunding bonds for the purpose
of refunding the Refunded Bonds in advance of their maturities, and to accomplish such
refunding by depositing directly with a paying agent for the Refunded Bonds the
proceeds of such refunding bonds, together with other available funds, in an amount
adequate to provide for the payment or redemption of the Refunded Bonds, and that
such deposit shall constitute the making of firm banking and financial arrangements for
the discharge and final payment or redemption of the Refunded Bonds; and
WHEREAS, upon the issuance of the refunding bonds herein authorized, the
Refunded Bonds shall no longer be regarded as being outstanding, and the pledges,
liens, trusts and all other covenants, provisions, terms and conditions of the resolutions
authorizing the issuance of the Refunded Bonds shall be, with respect to the Refunded
Bonds, discharged, terminated and defeased;
WHEREAS by Resolution No. R2015-183 adopted on October 12, 2015, the City
authorized the Authority to issue, sell, or deliver its Tax Increment Contract Revenue
and Refunding Bonds,Series 2015; and
WHEREAS, as permitted by the Act, the Authority desires to issue its Tax
Increment Contract Revenue and Refunding Bonds, Series 2015 upon the terms and
conditions and for the purposes herein provided.
ARTICLE II
DEFINITIONS AND INTERPRETATIONS
Section 2.1: Definitions. In this Resolution, the following terms shall have
the following meanings, unless the context clearly indicates otherwise. Terms not
defined herein shall have the meanings assigned to such terms in the Indenture:
The term "Business Day" shall mean any day which is not a Saturday, Sunday, or
a day on which banking institutions in the city where the designated payment office of
the Paying Agent/Registrar is located are authorized by law or executive order to close,
or a legal holiday.
The term "Code" means the Internal Revenue Code of 1986, as amended.
The term "Compass Term Bond" has the meaning given to such term in Section
3.2 hereof.
The term "Comptroller" shall mean the Comptroller of Public Accounts of the
State of Texas.
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The term"Highest Lawful Rate" shall mean with respect to the Series 2015 Bonds
the maximum net effective interest rate permitted by law to be paid thereon as
provided by Chapter 1204, Texas Government Code, as amended, or any successor
thereto.
The term "Indenture" shall mean the Indenture of Trust dated as of May 1, 2012,
between the Authority and Regions Bank, as Trustee.
The term "Initial Series 2015 Bonds" shall mean the two Initial Series 2015 Bonds
authorized by Section 3.4(d) of which one shall be payable to Compass Mortgage
Corporation and one shall be payable to Regions Capital Advantage.
The term "Interest Payment Date" shall mean, with respect to the Series 2015
Bonds, March 1, 2016, and each September 1 and March 1 thereafter until maturity or
redemption, or such other Interest Payment Date that is set forth in the Resolution.
The term "Issuance Date" shall mean the date on which each such Series 2015
Bond is authenticated by the Paying Agent/Registrar and delivered to and paid for by
the Purchaser.
The term "Purchasers" shall mean the Compass Mortgage Corporation, an
Alabama Corporation and Regions Capital Advantage, Inc. as the initial purchasers of
the Series 2015 Bonds (each a "Purchaser").
The term "Paying Agent/Registrar" shall mean Regions Bank, and its successors
in that capacity.
The term "Record Date" shall mean, for any Interest Payment Date, the fifteenth
(15th) calendar day of the month next preceding each Interest Payment Date.
The term "Resolution" or "Bond Resolution" shall mean this Resolution
Authorizing the Issuance of $66,030,000 Development Authority of Pearland Tax
Increment Contract Revenue and Refunding Bonds, Series 2015, and all amendments
hereof and supplements hereto.
The term "Regions Term Bond" has the meaning given to such term in Section 3.2
hereof.
The term "Series 2015 Bond" or "Series 2015 Bonds" shall mean the Authority's
Tax Increment Contract Revenue and Refunding Bonds, Series 2015 authorized by this
Resolution.
Section 2.2: Interpretations. All terms defined herein and all pronouns used
in this Resolution shall be deemed to apply equally to singular and plural and to all
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RESOLUTION NO. RDAP-2015-09
genders. The titles and headings of the articles and sections of this Resolution have
been inserted for convenience of reference only and are not to be considered a part
hereof and shall not in any way modify or restrict any of the terms or provisions hereof.
This Resolution and all the terms and provisions hereof shall be liberally construed to
effectuate the purposes set forth herein and to sustain the validity of the Parity Bonds
and the validity of the lien on and pledge of the Pledged Revenues to secure the
payment of the Parity Bonds.
ARTICLE III
TERMS OF THE SERIES 2015 BONDS
Section 3.1: Amount, Purpose, Authorization. The Series 2015 Bonds shall
be issued in the aggregate principal amount of$66,030,000 for the purpose of (1) paying
Project Costs, (2) refunding the Refunded Bonds shown in Exhibit D hereto, and (3)
paying costs of issuance of the Bonds, all under and pursuant to the authority of the Act
and all other applicable law. None of the proceeds of the Series 2015 Bonds shall be
used for the purpose of paying or otherwise providing for educational facilities.
It is hereby found and determined that such refunding will benefit the Authority
by providing a gross savings of $1,821,227.00, and a net present value savings of
$1,506,357.71, in the debt service payable by the Authority, that such benefit is sufficient
consideration for the refunding of the Refunded Bonds, and that the refunding of the
Refunded Bonds is in the best interest of the Authority.
Section 3.2: Name, Designation, Date, and Interest Payment Dates. The
Series 2015 Bonds shall be designated as the "DEVELOPMENT AUTHORITY OF
PEARLAND TAX INCREMENT CONTRACT REVENUE AND REFUNDING BONDS,
SERIES 2015," shall be issued in fully registered form, without coupons and shall be
dated October 1, 2015 (the "Dated Date"). The Series 2015 Bonds shall be issued as two
(2) Term Bonds each in the amount of $33,015,000. One Term Bond shall be purchased
by Compass Mortgage Corporation (the "Compass Term Bond") and one Term Bond
shall be purchased by Regions Capital Advantage ("Regions Term Bond"). The Series
2015 Bonds shall bear interest at the rates set forth in Section 3.3 from the later of the
date of delivery, or the most recent Interest Payment Date to which interest has been
paid or duly provided for, calculated on the basis of a 360-day year of twelve 30-day
months, payable, semiannually on March 1 and September 1, commencing March 1,
2016, until maturity or earlier redemption.
Section 3.3: Principal Amounts and Interest Rates; Numbers and
Denomination. The Series 2015 Bonds shall be initially issued in the principal amounts
and bearing interest at the rates set forth below, and may be transferred and exchanged
as set out in this Resolution. The Series 2015 Bonds shall mature, subject to prior
redemption in accordance with this Resolution, on September 1 , 2029. The Series 2015
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RESOLUTION NO. RDAP-2015-09
Bonds shall accrue interest from the date of delivery until maturity or earlier
redemption at an interest rate of 2.74%. The Initial Bonds shall be numbered I-1
(Compass Term Bond) and I-2 (Regions Term Bond) and the definitive Series 2015
Bonds shall be numbered with R-1 (Compass Term Bond) and R-2 (Regions Term
Bond). Series 2015 Bonds delivered on transfer of or in exchange for other Series 2015
Bonds shall be numbered in the order of their authentication by the Paying
Agent/Registrar, shall be in the denomination of$100,000 or $5,000 increments thereof,
and shall mature on the same date and bear interest at the same rate as the Series 2015
Bond or Series 2015 Bonds in lieu of which they are delivered. The Compass Term
Bond and the Regions Term Bond shall be subject to principal payment installments
according to the following schedule:
$33,015,000 Compass Term Bond
Principal Maturity Date Interest
Amount September 1 Rate %
$2,160,000 2016 2.74
2,177,500 2017 2.74
2,232,500 2018 2.74
2,295,000 2019 2.74
2,197,500 2020 2.74
2,255,000 2021 2.74
2,190,000 2022 2.74
2,352,500 2023 2.74
2,400,000 2024 2.74
2,450,000 2025 2.74
2,502,500 2026 2.74
2,555,000 2027 2.74
2,607,500 2028 2.74
2,660,000 2029 2.74
$33,015,000 Regions Term Bond
Principal Maturity Date Interest
Amount September 1 Rate %
$2,160,000 2016 2.74
2,177,500 2017 2.74
2,232,500 2018 2.74
2,295,000 2019 2.74
2,197,500 2020 2.74
2,255,000 2021 2.74
2,190,000 2022 2.74
2,352,500 2023 2.74
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2,400,000 2024 2.74
2,450,000 2025 2.74
2,502,500 2026 2.74
2,555,000 2027 2.74
2,607,500 2028 2.74
2,660,000 2029 2.74
Section 3.4: Execution and Registration of Series 2015 Bonds. (a) The Series
2015 Bonds shall be signed by the Chair or Vice Chair or Director of the Board and
countersigned by the Secretary or Director of the Board, by their manual, lithographed,
or facsimile signatures. Such facsimile signatures on the Series 2015 Bonds shall have
the same effect as if each of the Series 2015 Bonds had been signed manually and in
person by each of said Directors or officers.
(b) If any Director or officer of the Authority whose manual or facsimile
signature shall appear on the Series 2015 Bonds shall cease to be such Director or officer
before the authentication of such Series 2015 Bonds or before the delivery of such Series
2015 Bonds, such manual or facsimile signature shall nevertheless be valid and
sufficient for all purposes as if such Director or officer had remained in such office.
(c) Except as provided below, no Series 2015 Bond shall be valid or obligatory
for any purpose or be entitled to any security or benefit of this Resolution unless and
until there appears thereon the Paying Agent/Registrar's Authentication Certificate
substantially in the form provided herein, duly authenticated by manual execution by
an officer or duly authorized signatory of the Paying Agent/Registrar. In lieu of the
executed Paying Agent/Registrar's Authentication Certificate described above, the
Initial Series 2015 Bond delivered at the Issuance Date shall have attached thereto the
Comptroller's Registration Certificate substantially in the form provided herein,
manually executed by the Comptroller, or by his duly authorized agent, which
certificate shall be evidence that the Initial Series 2015 Bond has been duly approved by
the Attorney General of the State of Texas and that it is a valid and binding obligation of
the Authority, and has been registered by the Comptroller.
(d) On the Issuance Date, the Initial Series 2015 Bonds, being a two bonds
each representing fifty percent of the entire principal amount of the Series 2015 Bonds,
payable in stated installments to the respective Purchaser or their designee as shown in
Section 3.3 hereof, executed by manual or facsimile signature of the Chair or Vice Chair
and Secretary or Director of the Board, approved by the Attorney General, and
registered and manually signed by the Comptroller of Public Accounts, shall be
delivered to the respective Purchaser or their designee. Upon payment for the Initial
Series 2015 Bonds, the Paying Agent/Registrar shall cancel the Initial Series 2015 Bonds
and deliver the definitive Series 2015 Bonds to the Purchasers in accordance with
Section 3.12.
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Section 3.5: Payment of Principal and Interest. The Paying Agent/Registrar
is hereby appointed as the registrar and paying agent for the Series 2015 Bonds. The
principal of the Series 2015 Bonds shall be payable, without exchange or collection
charges, in any coin or currency of the United States of America which, on the date of
payment, is legal tender for the payment of debts due the United States of America,
upon their presentation and surrender as they respectively become due and payable,
whether at maturity or by prior redemption, at the designated office of the Paying
Agent/Registrar. The interest on each Series 2015 Bond shall be payable by check on
the Interest Payment Date, mailed by the Paying Agent/Registrar on or before each
Interest Payment Date to the Owner of record as of the Record Date, to the address of
such Owner as shown on the Register, or by such other method, acceptable to the
Paying Agent/Registrar, requested by and at the risk and expense of the Owner.
If the date for the payment of principal or interest on any Series 2015 Bond is not
a Business Day, then the date for such payment shall be the next succeeding Business
Day, and payment on such date shall have the same force and effect as if made on the
original date such payment was due.
Section 3.6: Successor Paying Agent/Registrars. The Authority covenants
that at all times while any Series 2015 Bonds are Outstanding it will provide a
commercial bank, or trust company or other entity duly qualified and legally
authorized to act as Paying Agent/Registrar for the Series 2015 Bonds. The Authority
reserves the right to change the Paying Agent/Registrar for the Series 2015 Bonds on
not less than sixty (60) days written notice to the Paying Agent/Registrar, so long as
any such notice is effective not less than sixty (60) days prior to the next succeeding
principal or interest payment date on the Series 2015 Bonds. Promptly upon the
appointment of any successor Paying Agent/Registrar, the previous Paying
Agent/Registrar shall deliver the Register or a copy thereof to the new Paying
Agent/Registrar, and the new Paying Agent/Registrar shall notify each Owner, by
United States mail, first class postage prepaid, of such change and of the address of the
new Paying Agent/Registrar. Each Paying Agent/Registrar hereunder, by acting in
that capacity, shall be deemed to have agreed to the provisions of this Section.
Section 3.7: Special Record Date. If interest on any Series 2015 Bond is not
paid on any Interest Payment Date and continues unpaid for thirty (30) days thereafter,
the Paying Agent/Registrar shall establish a new record date for the payment of such
interest, to be known as a "Special Record Date." The Paying Agent/Registrar shall
establish a Special Record Date when funds to make such interest payment are received
from or on behalf of the Authority. Such Special Record Date shall be fifteen (15) days
prior to the date fixed for payment of such past due interest, and notice of the date of
payment and the Special Record Date shall be sent by United States mail, first class,
postage prepaid, not later than five (5) days prior to the Special Record Date, to each
Owner of record of an affected Series 2015 Bond as of the close of business on the day
prior to the mailing of such notice.
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Section 3.8: Ownership; Unclaimed Principal and Interest. Subject to the
further provisions of this Section, the Authority, the Paying Agent/Registrar and any
other person may treat the person in whose name any Series 2015 Bond is registered as
the absolute Owner of such Series 2015 Bond for the purpose of making and receiving
payment of the principal of or interest on such Series 2015 Bond, and for all other
purposes, whether or not such Series 2015 Bond is overdue, and neither the Authority
nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the
contrary. All payments made to the person deemed to be the Owner of any Series 2015
Bond in accordance with this Section 3.8 shall be valid and effectual and shall discharge
the liability of the Authority and the Paying Agent/Registrar upon such Series 2015
Bond to the extent of the sums paid.
Amounts held by the Paying Agent/Registrar which represent principal of and
interest on the Series 2015 Bonds remaining unclaimed by the Owner after the
expiration of three (3) years from the date such amounts have become due and payable
shall be remitted to the Authority, except to the extent that they are required by law to
be reported and disposed of by the Paying Agent/Registrar in accordance with the
applicable provisions of Texas law including, to the extent applicable, Title 6 of the
Texas Property Code, as amended.
Section 3.9: Registration of Bonds. (a) The Series 2015 Bonds issued as two
(2) Term Bonds shall be registered to Compass Mortgage Corporation, an Alabama
Corporation and Regions Capital Advantage, Inc, respectively.
(b) Notwithstanding any other provision of this Resolution to the contrary,
the Authority and the Paying Agent/Registrar shall be entitled to treat and consider the
person in whose name each Series 2015 Bond is registered in the Register as the absolute
Owner of such Series 2015 Bond for the purpose of payment of principal of and interest
on the Series 2015 Bonds, for the purpose of giving notices of redemption and other
matters with respect to such Series 2015 Bond, for the purpose of registering transfer
with respect to such Series 2015 Bond, and for all other purposes whatsoever. The
Paying Agent/Registrar shall pay all principal of, premium, if any, and interest on the
Series 2015 Bonds only to or upon the order of the respective Owners, as shown in the
Register as provided in this Resolution, or their respective attorneys duly authorized in
writing, and all such payments shall be valid and effective to fully satisfy and discharge
the Authority's obligations with respect to payments of principal, premium, if any, and
interest on the Series 2015 Bonds to the extent of the sum or sums so paid. No person
other than an Owner, as shown in the Register, shall receive a Series 2015 Bond
certificate evidencing the obligation of the Authority to make payments of amounts due
pursuant to this Resolution.
Section 3.10: Reserved.
Section 3.11: Reserved.
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RESOLUTION NO. RDAP-2015-09
Section 3.12: Registration, Transfer, and Exchange. So long as any Series
2015 Bonds remain Outstanding, the Paying Agent/Registrar shall keep the Register at
its designated office and, subject to such reasonable regulations as it may prescribe, the
Paying Agent/Registrar shall provide for the registration and transfer of Series 2015
Bonds in accordance with the terms of this Resolution.
Each Series 2015 Bond shall be transferable only upon the presentation and
surrender thereof at the designated office of the Paying Agent/Registrar, duly endorsed
for transfer, or accompanied by an assignment duly executed by the Registered Owner
or his authorized representative in form satisfactory to the Paying Agent/Registrar.
Upon due presentation of any Series 2015 Bond in proper form for transfer, the Paying
Agent/Registrar shall authenticate and deliver in exchange therefor, a new Series 2015
Bond or Series 2015 Bonds, registered in the name of the transferee or transferees, in
authorized denominations and of the same maturity, aggregate principal amount, and
Dated Date, and bearing interest at the same rate as the Series 2015 Bond or Series 2015
Bonds so presented.
All Series 2015 Bonds shall be exchangeable upon presentation and surrender
thereof at the designated office of the Paying Agent/Registrar for a Series 2015 Bond or
Series 2015 Bonds of the same maturity, Dated Date, and interest rate and in any
authorized denomination, in an aggregate amount equal to the unpaid principal
amount of the Series 2015 Bond or Series 2015 Bonds presented for exchange. The
Paying Agent/Registrar shall be and is hereby authorized to authenticate, deliver and
exchange Series 2015 Bonds in accordance with the provisions of this Section 3.12. Each
Series 2015 Bond delivered in accordance with this Section 3.12 shall be entitled to the
benefits and security of this Resolution to the same extent as the Series 2015 Bond or
Series 2015 Bonds in lieu of which such Series 2015 Bond is delivered.
The Authority or the Paying Agent/Registrar may require the Owner of any
Series 2015 Bond to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with the transfer or exchange of such Series 2015
Bond. Any fee or charge of the Paying Agent/Registrar for such transfer or exchange
shall be paid by the Authority.
The Paying Agent/Registrar shall not be required to transfer or exchange any
Series 2015 Bond during the period beginning on a Record Date or a Special Record
Date and ending on the next succeeding Interest Payment Date or to transfer or
exchange any Series 2015 Bond called for redemption during the period beginning
thirty days prior to the date fixed for redemption and ending on the date fixed for
redemption; provided, however, that this limitation shall not apply to the exchange by
the Owner of the unredeemed portion of a Series 2015 Bond called for redemption in
part.
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Section 3.13: Cancellation of Series 2015 Bonds. All Series 2015 Bonds paid or
redeemed in accordance with this Resolution, and all Series 2015 Bonds in lieu of which
exchange Series 2015 Bonds or replacement Series 2015 Bonds are authenticated and
delivered in accordance herewith, shall be cancelled upon the making of proper records
regarding such payment or redemption and retained in accordance with the Paying
Agent/Registrar's document retention policy. Upon request of the Authority therefore,
the Paying Agent/Registrar shall furnish the Authority with appropriate certificates of
cancellation of such Series 2015 Bonds.
Section 3.14: Mutilated, Lost, or Stolen Series 2015 Bonds. Upon the
presentation and surrender to the Paying Agent/Registrar of a mutilated Series 2015
Bond, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a
replacement Series 2015 Bond of like maturity, Dated Date, interest rate and principal
amount, bearing a number not contemporaneously Outstanding. The Authority or the
Paying Agent/Registrar may require the Owner of such Series 2015 Bond to pay a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith and any other expenses connected therewith, including the fees
and expenses of the Paying Agent/Registrar.
If any Series 2015 Bond is lost, apparently destroyed, or wrongfully taken, the
Authority, pursuant to the applicable laws of the State of Texas and in the absence of
notice or knowledge that such Series 2015 Bond has been acquired by a bona fide
purchaser, shall execute and the Paying Agent/Registrar shall authenticate and deliver
a replacement Series 2015 Bond of like maturity, Dated Date, interest rate and principal
amount, bearing a number not contemporaneously Outstanding, provided that the
Owner thereof shall have:
(1) furnished to the Authority and the Paying Agent/Registrar satisfactory
evidence of the ownership of and the circumstances of the loss,
destruction or theft of such Series 2015 Bond;
(2) furnished such security or indemnity as may be required by the Paying
Agent/Registrar and the Authority to save them harmless;
(3) paid all expenses and charges in connection therewith, including, but not
limited to, printing costs, legal fees, fees of the Paying Agent/Registrar
and any tax or other governmental charge that may be imposed; and
(4) met any other reasonable requirements of the Authority and the Paying
Agent/Registrar.
If, after the delivery of such replacement Series 2015 Bond, a bona fide purchaser of the
original Series 2015 Bond in lieu of which such replacement Series 2015 Bond was
issued presents for payment such original Series 2015 Bond, the Authority and the
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Paying Agent/Registrar shall be entitled to recover such replacement Series 2015 Bond
from the person to whom it was delivered or any person taking therefrom, except a
bona fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by the
Authority or the Paying Agent/Registrar in connection therewith.
If any such mutilated, lost, apparently destroyed or wrongfully taken Series 2015
Bond has become or is about to become due and payable, the Authority in its discretion
may, instead of issuing a replacement Series 2015 Bond, authorize the Paying
Agent/Registrar to pay such Series 2015 Bond.
Each replacement Series 2015 Bond delivered in accordance with this Section 3.14
shall be entitled to the benefits and security of this Resolution to the same extent as the
Series 2015 Bond or Series 2015 Bonds in lieu of which such replacement Series 2015
Bond is delivered.
Section 3.15: Redemption. The Series 2015 Bonds are subject to optional and
mandatory sinking fund redemption on the dates and for the redemption prices set
forth in the form of the Series 2015 Bond in this Resolution.
Principal amounts may be redeemed only in integrals of $100,000. If a Series
2015 Bond subject to redemption is in a denomination larger than$100,000, a portion of
such Series 2015 Bond may be redeemed, but only in integral multiples of $5,000. In
selecting portions of Series 2015 Bonds for redemption, the Paying Agent/ Registrar
shall treat each Series 2015 Bond as representing that number of Series 2015 Bonds of
$100,000 denomination or any integral multiple of $5,000 in excess thereof. The Paying
Agent/Registrar shall select the particular Series 2015 Bonds to be redeemed within any
given maturity by lot or other random selection method on a pro-rata basis from the
Compass Term Bond and the Regions Term Bond. Upon surrender of any Series 2015
Bond for redemption in part, the Paying Agent/Registrar, in accordance with this
Resolution, shall authenticate and deliver in exchange therefor a Series 2015 Bond or
Series 2015 Bonds of like maturity and interest rate in an aggregate principal amount
equal to the unredeemed portion of the Series 2015 Bond so surrendered.
Unless waived by the Owner, notice of any redemption identifying the Series
2015 Bonds to be redeemed shall be given as provided in the form of Series 2015 Bond
in this Resolution. Any notice given as provided in this Section 3.15 shall be
conclusively presumed to have been duly given, whether or not the Owner receives
such notice. By the date fixed for redemption, due provision shall be made with the
Paying Agent/Registrar for payment of the redemption price of the Series 2015 Bonds
or portions thereof to be redeemed, plus accrued interest to the date fixed for
redemption. When Series 2015 Bonds have been called for redemption in whole or in
part and due provision has been made to redeem the same as herein provided, the
Series 2015 Bonds or portions thereof so redeemed shall no longer be regarded as
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Outstanding except for the purpose of receiving payment solely from the funds so
provided for redemption, and the rights of the Owners to collect interest which would
otherwise accrue after the redemption date on any Series 2015 Bond or portion thereof
called for redemption shall terminate on the date fixed for redemption.
The Authority reserves the right to give notice of its election or direction to
optionally redeem Bonds conditioned upon the occurrence of subsequent events. Such
notice may state (i) that the redemption is conditioned upon the deposit of moneys
and/or authorized securities, in an amount equal to the amount necessary to effect the
redemption, with the Paying Agent/Registrar, or such other entity as may be
authorized by law, no later than the redemption date or (ii) that the Authority retains
the right to rescind such notice at any time prior to the scheduled redemption date if the
Authority delivers a certificate of the Authority to the Paying Agent/Registrar
instructing the Paying Agent/Registrar to rescind the redemption notice, and such
notice of redemption shall be of no effect if such moneys and/or authorized securities
are no so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give
prompt notice of any such rescission of a conditional notice of redemption to the
affected owners. Any Bonds subject to conditional redemption where redemption has
been rescinded shall remain outstanding.
ARTICLE IV
Section 4.1: Limited Obligations. THE SERIES 2015 BONDS AND ALL
PARITY BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY, PAYABLE
SOLELY OUT OF THE PLEDGED REVENUES, WHICH IS THE SOLE ASSET OF THE
AUTHORITY PLEDGED THEREFOR. THE SERIES 2015 BONDS ARE OBLIGATIONS
SOLELY OF THE AUTHORITY AND DO NOT CONSTITUTE, WITHIN THE
MEANING OF ANY STATUTORY OR CONSTITUTIONAL PROVISION, AN
INDEBTEDNESS, AN OBLIGATION OR A LOAN OF CREDIT OF THE CITY OF
PEARLAND, THE STATE OF TEXAS, ALVIN INDEPENDENT SCHOOL DISTRICT,
BRAZORIA COUNTY, FORT BEND COUNTY OR ANY OTHER MUNICIPALITY,
COUNTY, OR OTHER MUNICIPAL OR POLITICAL CORPORATION OR
SUBDIVISION OF THE STATE OF TEXAS. NEITHER THE CITY OF PEARLAND,
ALVIN INDEPENDENT SCHOOL DISTRICT, BRAZORIA COUNTY NOR FORT
BEND COUNTY IS OBLIGATED TO MAKE PAYMENTS ON THE SERIES 2015
BONDS.
ARTICLE V
FORM OF SERIES 2015 BONDS AND CERTIFICATES
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RESOLUTION NO. RDAP-2015-09
Section 5.1: Forms. The form of the Series 2015 Bonds, including the form of
the Paying Agent/Registrar's authentication certificate, the form of assignment, and the
form of the Comptroller's Registration Certificate for the Series 2015 Bonds to be
initially issued, shall be substantially as follows, with such additions, deletions and
variations, as may be necessary or desirable and not prohibited by this Resolution:
(a) Form of Bond
United States of America
State of Texas
Number Registered
DEVELOPMENT AUTHORITY OF PEARLAND
TAX INCREMENT CONTRACT REVENUE AND REFUNDING BOND
SERIES 2015
INTEREST RATE: MATURITY DATE: DATED DATE: October 1, 2015
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
The DEVELOPMENT AUTHORITY OF PEARLAND (the "Authority"), a not-
for-profit local government corporation created by the City of Pearland (the "City"), in
the Counties of Brazoria and Fort Bend, in the State of Texas, for value received,
promises to pay, but solely from certain Pledged Revenues as hereinafter provided, to
the Registered Owner identified above or registered assigns, on the Maturity Date
specified above, upon presentation and surrender of this Series 2015 Bond at the
designated office of the Paying Agent/Registrar (the "Paying Agent/Registrar"),
initially, Regions Bank, the principal amount identified above, such principal is legal
tender for the payment of debts due the United States of America, and to pay, solely
from such Pledged Revenues, interest thereon to be paid as described herein, calculated
on the basis of a 360-day year of twelve 30-day months, from the later of the date of
delivery to the Purchasers, or the most recent interest payment date to which interest
has been paid or duly provided for. Interest on this Series 2015 Bond is payable by
check on March 1 and September 1, beginning on March 1, 2016, mailed to the
Registered Owner as shown on the books of registration kept by the Paying
Agent/Registrar as of the fifteenth (15th) calendar day of the month next preceding
each interest payment date, or by such other method, acceptable to the Paying
Agent/Registrar, requested by and at the risk and expense of the Registered Owner.
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RESOLUTION NO. RDAP-2015-09
THIS SERIES 2015 BOND shall be subject to mandatory sinking fund redemption
in installments according the following schedule (insert schedule from Section 3.3):
THE SERIES 2015 BONDS AND ALL PARITY BONDS ARE LIMITED
OBLIGATIONS OF THE AUTHORITY, PAYABLE SOLELY OUT OF THE PLEDGED
REVENUES, WHICH IS THE SOLE ASSET OF THE AUTHORITY PLEDGED
THEREFOR. THE SERIES 2015 BONDS ARE OBLIGATIONS SOLELY OF THE
AUTHORITY AND DO NOT CONSTITUTE, WITHIN THE MEANING OF ANY
STATUTORY OR CONSTITUTIONAL PROVISION, AN INDEBTEDNESS, AN
OBLIGATION OR A LOAN OF CREDIT OF THE CITY OF PEARLAND, THE STATE
OF TEXAS, ALVIN INDEPENDENT SCHOOL DISTRICT, BRAZORIA COUNTY,
FORT BEND COUNTY OR ANY OTHER MUNICIPALITY, COUNTY, OR OTHER
MUNICIPAL OR POLITICAL CORPORATION OR SUBDIVISION OF THE STATE OF
TEXAS. NEITHER THE CITY OF PEARLAND, ALVIN INDEPENDENT SCHOOL
DISTRICT, BRAZORIA COUNTY NOR FORT BEND COUNTY IS OBLIGATED TO
MAKE PAYMENTS ON THE SERIES 2015 BONDS.
THIS SERIES 2015 BOND IS ONE OF A DULY AUTHORIZED SERIES OF
SERIES 2015 BONDS aggregating $66,030,000 issued for the purpose of (1) paying
Project Costs, (2) refunding the Refunded Bonds, and (3) paying costs of issuance of
issuance of the Bonds, all under and pursuant to the authority of the Act and all other
applicable laws, and a resolution adopted by the Authority on October 12, 2015 (the
"Resolution"). None of the proceeds of the Series 2015 Bonds shall be used for the
purpose of paying or otherwise providing for educational facilities. Terms not
otherwise defined herein shall have the meaning ascribed thereto in the Resolution
THIS BOND shall accrue interest from the date of delivery at a rate of 2.74 %
until the date of final maturity or prepayment prior to maturity.
THIS SERIES 2015 BOND AND THE SERIES OF WHICH IT IS A PART are
limited obligations of the Authority that are together with all other Parity Bonds
heretofore or hereafter issued under the Indenture described below, payable from, and
are equally and ratably secured by a lien on the Pledged Revenues, which include the
Contract Tax Increments, moneys on deposit in the Pledged Revenue Fund, the Debt
Service Fund, and interest earned on moneys deposited therein, as defined and more
fully provided in the Indenture of Trust dated as of May 1, 2012, between the Authority
and Regions Bank, as Trustee (the "Indenture"). This Series 2015 Bond and the series of
which it is a part and all other Parity Bonds, together with the interest thereon, are
payable solely from such Pledged Revenues.
THE AUTHORITY RESERVES THE RIGHT at its option, to redeem in whole or
in part the Series 2015 Bonds on any date on or after September 1, 2025, at par plus
accrued interest on the amounts called for redemption to the date fixed for redemption.
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RESOLUTION NO. RDAP-2015-09
UNLESS WAIVED BY THE OWNER, NOTICE OF ANY REDEMPTION shall be
given at least thirty (30) days prior to the date fixed for redemption by first class mail,
addressed to the Registered Owners of each Series 2015 Bond to be redeemed in whole
or in part at the address shown on the books of registration kept by the Paying
Agent/Registrar. Such notices shall state the redemption date, the redemption price,
the place at which Series 2015 Bonds are to be surrendered for payment and, if less than
all Series 2015 Bonds Outstanding of a particular maturity are to be redeemed, the
numbers of the Series 2015 Bonds or portions thereof of such maturity to be redeemed.
When Series 2015 Bonds or portions thereof have been called for redemption, and due
provision has been made to redeem the same, the principal amounts so redeemed shall
be payable solely from the funds provided for redemption, and interest which would
otherwise accrue on the amounts called for redemption shall terminate on the date fixed
for redemption.
THIS SERIES 2015 BOND IS TRANSFERABLE only upon presentation and
surrender at the designated office of the Paying Agent/Registrar, duly endorsed for
transfer or accompanied by an assignment duly executed by the Registered Owner or
his authorized representative, subject to the terms and conditions of the Resolution.
THIS SERIES 2015 BOND IS EXCHANGEABLE at the designated office of the
Paying Agent/Registrar for Series 2015 Bonds in the principal amount of $5,000 or any
integral multiple thereof, subject to the terms and conditions of the Resolution.
NEITHER THE AUTHORITY NOR THE PAYING AGENT/REGISTRAR shall be
required to transfer or exchange any Series 2015 Bond during the period beginning on
the fifteenth calendar day of the month next preceding any interest payment date and
ending on such interest payment date or to transfer any Series 2015 Bond called for
redemption during the 30 day period prior to the redemption date.
THIS SERIES 2015 BOND shall not be valid or obligatory for any purpose or be
entitled to any benefit under the Resolution unless this Series 2015 Bond is either (i)
registered by the Comptroller of Public Accounts of the State of Texas by registration
certificate attached or affixed hereto or (ii) authenticated by the Paying Agent/Registrar
by due execution of the authentication certificate endorsed hereon.
THE AUTHORITY HAS RESERVED THE RIGHT to issue Additional Parity
Bonds, subject to the restrictions contained in the Resolution and the Indenture, which
may be equally and ratably payable from, and secured by a lien on and pledge of, the
Pledged Revenues in the same manner and to the same extent as the Parity Bonds and
this Series 2015 Bond and the series of which it is a part.
IT IS HEREBY DECLARED AND REPRESENTED that this Series 2015 Bond has
been duly and validly issued and delivered; that all acts, conditions, and things
required or proper to be performed, exist, and be done precedent to or in the issuance
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HOU:3597274.2
RESOLUTION NO. RDAP-2015-09
and delivery of this Series 2015 Bond have been performed, existed, and been done in
accordance with law; that the Series 2015 Bonds do not exceed any statutory limitation;
and that provision has been made for the payment of the principal of and interest on
this Series 2015 Bond and all of the Parity Bonds by the creation of the aforesaid lien on
and pledge of the Pledged Revenues as provided in the Indenture.
IN WITNESS WHEREOF, the Authority has caused this Series 2015 Bond to be
executed by the manual or facsimile signatures of the Chair and Director.
DEVELOPMENT AUTHORITY OF
PEARLAND
Chair, Board of Directors
Director, Board of Directors
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RESOLUTION NO. RDAP-2015-09
(b) Form of Registration Certificate of Comptroller of Public Accounts.
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Series 2015 Bond has been examined, certified as to
validity, and approved by the Attorney General of the State of Texas, and that this
Series 2015 Bond has been registered by the Comptroller of Public Accounts of the State
of Texas.
WITNESS MY SIGNATURE AND SEAL this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
(c) Form of Paying Agent/Registrar's Authentication Certificate
AUTHENTICATION CERTIFICATE
It is hereby certified that this Series 2015 Bond
has been delivered pursuant to the Bond
Resolution described in the text of this
Series 2015 Bond.
Regions Bank, as Trustee
By:
Authorized Signature
Date of Authentication:
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RESOLUTION NO. RDAP-2015-09
(d) Form of Assignment
Assignment
For value received, the undersigned hereby sells, assigns, and transfers unto
(Please print or type name, address, and zip code of Transferee)
(Please insert Social Security or Taxpayer Identification Number of Transferee)
the within Series 2015 Bond and all rights thereunder, and hereby irrevocably
constitutes and appoints
attorney to transfer said Series 2015 Bond on the books kept for registration thereof,
with full power of substitution in the premises.
DATED:
Signature Guaranteed:
Registered Owner
NOTICE: Signature(s) must be guaranteed NOTICE: The signature above must
by an institution which is a participant in correspond to the name of the Registered
the Securities Transfer Agent Medallion Owner as shown on the face of this Bond
Program("STAMP") or similar program. in every particular, without any alteration,
enlargement or change whatsoever.
(e) The Initial Series 2015 Bond shall be in the form set forth in paragraphs
(a), (b) and (d) of this Section, except for the following alterations:
(i) the Initial Series 2015 Bond shall be numbered I-1
Section 5.2: Legal Opinion. The approving opinion of Bond Counsel may be
printed on the Series 2015 Bonds, but errors or omissions in the printing of such opinion
or such numbers shall have no effect on the validity of the Series 2015 Bonds.
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HOU:3597274.2
RESOLUTION NO. RDAP-2015-09
ARTICLE VI
ADDITIONAL BONDS
Section 6.1: Additional Parity Bonds. The Authority reserves the right to
issue, for any lawful purpose (including the refunding of any previously issued Parity
Bonds), one or more series of Additional Parity Bonds payable from and secured by a
lien on the Pledged Revenues, on a parity with the Series 2015 Bonds, and any
previously issued Parity Bonds; provided, however, that Additional Parity Bonds may
be issued only in accordance with the provisions of Article III of the Indenture.
Section 6.2: Subordinate Lien Obligations. The Authority reserves the right
to issue, for any lawful purpose, bonds, notes or other obligations secured in whole or
in part by liens on the Pledged Revenues that are junior and subordinate to the lien on
Pledged Revenues securing payment of the Parity Bonds. Such subordinate lien
obligations may be further secured by any other source of payment lawfully available
for such purposes.
ARTICLE VII
COVENANTS AND PROVISIONS
RELATING TO ALL PARITY BONDS
Reference is made to Article V of the Indenture. All covenants made by the
Authority therein are hereby incorporated into this Resolution.
ARTICLE VIII
PROVISIONS CONCERNING SALE AND
APPLICATION OF PROCEEDS OF SERIES 2015 BONDS
Section 8.1: Sale. The Series 2015 Bonds are hereby sold to the Purchasers
by means of a private placement with each Purchaser, and the price at the par value
thereof, is hereby approved and delivery of the Series 2015 Bonds to the Purchasers
shall be made upon payment therefor in accordance with the terms of sale and the
terms and conditions of the Private Placement Letters, which are attached hereto as
Exhibits A and B, and are hereby approved, and such price and terms are hereby found
and determined to be the most advantageous reasonably obtainable by the Authority.
The Chair and other appropriate officers, agents and representatives of the Authority
are hereby authorized to do any and all things necessary or desirable to provide for the
issuance and delivery of the Series 2015 Bonds.
Section 8.2: Application of Proceeds. Proceeds from the sale of the Series
2015 Bonds shall, promptly upon receipt by the Trustee, be applied as follows:
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HOU:3597274.2
RESOLUTION NO. RDAP-2015-09
(a) $46,111,397.20 from proceeds shall be deposited with the Paying
Agent/Register for the Refunded Bonds.
(b) $19,575,000.00 from proceeds shall be deposited in the Project Fund.
(c) $343,602.80 from proceeds shall be used to pay Cost of Issuance.
(d) All remaining proceeds from the sale of the Series 2015 Bonds shall be
deposited into the Debt Service Fund.
Section 8.3: Redemption of Refunded Bonds. To create a debt service
savings, the Authority hereby authorizes and directs that the Refunded Bonds be called
for redemption prior to maturity (or, if applicable, escrowed to their respective
maturities) in the amounts, at the dates and at the redemption prices set forth in Exhibit
C attached hereto, and the Chair 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 Bonds.
Section 8.4: Discharge of Refunded Bonds. The discharge and defeasance of
the Refunded Bonds shall be effectuated by depositing funds with the Paying Agent for
the Refunded Bonds (a) to carry out the program designed for the Authority by its
financial advisor, which shall be certified as to mathematical accuracy by Grant
Thornton LLP, or by the Paying Agent for the Refunded Bonds or the Authority's
financial advisor, (b) to comply with all applicable laws and regulations relating to the
refunding of the Refunded Bonds (c) to minimize the Authority's cost of refunding and
(d) to carry out the other intents and purposes of this Resolution, and the Chair is
hereby authorized to take such actions necessary to complete the refunding of the
Refunded Bonds..
Section 8.5: Reserved.
ARTICLE IX
TAX EXEMPTION
Section 9.1: Federal Income Tax Exclusion. (a) General. The Authority
intends that the interest on the Series 2015 Bonds shall be excludable from gross income
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 the applicable Income Tax
Regulations (the "Regulations"). The Authority covenants and agrees not to take any
action, or knowingly omit to take any action within its control, that if taken or omitted,
respectively, would cause the interest on the Series 2015 Bonds to be includable in gross
income, as defined in section 61 of the Code, for federal income tax purposes. In
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HOU:3597274.2
RESOLUTION NO. RDAP-2015-09
particular, the Authority covenants and agrees to comply with each requirement of this
Section 8.1; provided, however, that the Authority shall not be required to comply with
any particular requirement of this Section 8.1 if the Authority has received an opinion of
nationally recognized bond counsel ("Counsel's Opinion") that such noncompliance
will not adversely affect the exclusion from gross income for federal income tax
purposes of interest on the Series 2015 Bonds or if the Authority has received a
Counsel's Opinion to the effect that compliance with some other requirement set forth
in this Section 8.1 will satisfy the applicable requirements of the Code and the
Regulations, in which case compliance with such other requirement specified in such
Counsel's Opinion shall constitute compliance with the corresponding requirement
specified in this Section 8.1.
(b) No Private Use or Payment and No Private Loan Financing. The
Authority shall certify, through an authorized officer, employee or agent that based
upon all facts and estimates known or reasonably expected to be in existence on the
date the Series 2015 Bonds are delivered, that proceeds of the Series 2015 Bonds will not
be used, in a manner that would cause the Series 2015 Bonds to be "private activity
bonds" within the meaning of section 141 of the Code and the Regulations promulgated
thereunder. Moreover, the Authority covenants and agrees that it will make such use of
the proceeds of the Series 2015 Bonds including interest or other investment income
derived from Bond proceeds, regulate the use of property financed, directly or
indirectly, with such proceeds, and take such other and further action as may be
required so that the Series 2015 Bonds will not be "private activity bonds" within the
meaning of section 141 of the Code and the Regulations promulgated thereunder.
(c) No Federal Guarantee. The Authority covenants and agrees that it has not
and will not take any action, and has not knowingly omitted and will not knowingly
omit to take any action within its control, that, if taken or omitted, respectively, would
cause the Series 2015 Bonds to be federally guaranteed within the meaning of section
149(b) of the Code and the applicable Regulations thereunder, except as permitted by
section 149(b)(3) of the Code and such Regulations.
(d) No Hedge Bonds. The Authority covenants and agrees that it has not and
will not take any action, and has not knowingly omitted and will not knowingly omit to
take any action, within its control, that, if taken or omitted, respectively, would cause
the Series 2015 Bonds to be hedge bonds within the meaning of section 149(g) of the
Code and the applicable Regulations thereunder.
(e) No Arbitrage. The Authority shall certify, through an authorized officer,
employee or agent that based upon all facts and estimates known or reasonably
expected to be in existence on the date the Series 2015 Bonds are delivered, the
Authority will reasonably expect that the proceeds of the Series 2015 Bonds will not be
used in a manner that would cause the Series 2015 Bonds to be "arbitrage bonds"
within the meaning of section 148(a) of the Code and the applicable Regulations
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HOU:3597274.2
RESOLUTION NO. RDAP-2015-09
promulgated thereunder. Moreover, the Authority covenants and agrees that it will
make such use of the proceeds of the Series 2015 Bonds including interest or other
investment income derived from Bond proceeds, regulate investments of proceeds of
the Series 2015 Bonds, and take such other and further action as may be required so that
the Series 2015 Bonds will not be "arbitrage bonds" within the meaning of section 148(a)
of the Code and the applicable Regulations promulgated thereunder.
(f) Arbitrage Rebate. If the Authority does not qualify for an exception to the
requirements of Section 148(f) of the Code relating to the required rebate to the United
States, the Authority will take all necessary steps to comply with the requirement that
certain amounts earned by the Authority on the investment of the "gross proceeds" of
the Series 2015 Bonds (within the meaning of section 148(f)(6)(B) of the Code), be
rebated to the federal government. Specifically, the Authority will (i) maintain records
regarding the investment of the gross proceeds of the Series 2015 Bonds as may be
required to calculate the amount earned on the investment of the gross proceeds of the
Series 2015 Bonds separately from records of amounts on deposit in the funds and
accounts of the Authority allocable to other bond issues of the Authority or moneys
which do not represent gross proceeds of any bonds of the Authority, (ii) calculate at
such times as are required by applicable Regulations, the amount earned from the
investment of the gross proceeds of the Series 2015 Bonds which is required to be
rebated to the federal government, and (iii) pay, not less often than every fifth
anniversary date of the delivery of the Series 2015 Bonds or on such other dates as may
be permitted under applicable Regulations, all amounts required to be rebated to the
federal government. Further, the Authority will not indirectly pay any amount
otherwise payable to the federal government pursuant to the foregoing requirements to
any person other than the federal government by entering into any investment
arrangement with respect to the gross proceeds of the Series 2015 Bonds that might
result in a reduction in the amount required to be paid to the federal government
because such arrangement results in a smaller profit or a larger loss than would have
resulted if the arrangement had been at arm's length and had the yield on the issue not
been relevant to either party.
(g) Information Reporting. The Authority covenants and agrees to file or
cause to be filed with the Secretary of the Treasury, not later than the 15th day of the
second calendar month after the close of the calendar quarter in which the Series 2015
Bonds are issued, an information statement concerning the Series 2015 Bonds, all under
and in accordance with section 149(e) of the Code and the applicable Regulations
promulgated thereunder.
(h) Continuing Obligation. Notwithstanding any other provision of this
Resolution, the Authority's obligations under the covenants and provisions of this
Section 8.1 shall survive the defeasance and discharge of the Series 2015 Bonds.
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HOU:3597274.2
RESOLUTION NO. RDAP-2015-09
Section 9.2: Continuing Obligation. Notwithstanding any other provision of
this Resolution, the Authority's representations and obligations under the covenants
and provisions of this Article VIII shall survive the defeasance and discharge of the
Series 2015 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 9.3: Qualified Tax-Exempt Obligations. The Series 2015 Bonds are
NOT Qualified Tax-Exempt Obligations for financial institutions.
ARTICLE X
AUTHORIZATION AND CONFIRMATION OF AGREEMENTS
Section 10.1: Agreements. The Board hereby approves issuance of the Series
2015 Bonds and all reasonable agreements necessary or convenient in connection with
the issuance of the Series 2015 Bonds, including without limitation the following: the
Private Placement Letter by and between the Authority and Compass Mortgage
Corporation, a Purchaser, in the form attached hereto as Exhibit A, and the Private
Placement Letter by and between the Authority and Regions Capital Advantage Inc., a
Purchaser in the form attached hereto as Exhibit B and the Paying/Agent Agreement
with Regions Bank in the form attached hereto as Exhibit C (collectively, the
"Agreements"). The Board, by a majority vote of its members, at a regular meeting,
hereby approves the form, terms, and provisions of the Agreements and authorizes the
execution and delivery of the Agreements.
ARTICLE XI
MISCELLANEOUS
Section 11.1: Further Proceedings. The Chair, Vice Chair, Secretary,
Directors, and other appropriate officials of the Authority are hereby authorized and
directed to do any and all things necessary and/or convenient to carry out the intent,
purposes and terms of this Resolution, including the execution and delivery of such
certificates, documents or papers necessary and advisable.
Section 11.2: Severability. If any Section, paragraph, clause or provision of
this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity
or unenforceability of such Section, paragraph, clause or provision shall not affect any
of the remaining provisions of this Resolution.
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HOU:3597274.2
RESOLUTION NO. RDAP-2015-09
Section 11.3: Open Meeting. It is hereby officially found and determined that
the meeting at which this Resolution was adopted was open to the public, and that
public notice of the time, place and purpose of said meeting was given, all as required
by the Texas Open Meetings Act.
Section 11.4: Parties Interested. Nothing in this Resolution expressed or
implied is intended or shall be construed to confer upon, or to give to, any person or
entity, other than the Authority, the Paying Agent/Registrar, the Trustee and the
Owners of the Series 2015 Bonds, any right, remedy or claim under or by reason of this
Resolution or any covenant, condition or stipulation hereof, and all covenants,
stipulations, promises and agreements in this Resolution shall be for the sole and
exclusive benefit of the Authority, the Paying Agent/Registrar, the Trustee and the
Owners of the Series 2015 Bonds.
Section 11.5: Repealer. All orders, resolutions and ordinances, or parts
thereof, inconsistent herewith are hereby repealed to the extent of such inconsistency.
Section 11.6: Effective Date. This Resolution shall become effective
immediately upon passage by this Authority and signature of the Chair, Vice Chair, or
Director of the Authority.
[Execution Page Follows]
24
HOU:3597274.2
RESOLUTION NO. RDAP-2015-09
PASSED AND APPROVED this 12th day of October, 2015.
By:
Chair, Board of Directors
ATTEST:
By: 7/40t�fu�
Secretary, Board of Directors
HOU:3597274.2
Exhibit A
Private Placement Letter with Compass Mortgage Corporation (Tab_)
HOU:3597274.2
RESOLUTION NO. RDAP-2015-09
Exhibit B
Private Placement Letter with Regions Capital Advantage
HOU:3597274.2
RESOLUTION NO. RDAP-2015-09
Exhibit C
Paying Agent Agreement (Tab )
HOU:35972742
RESOLUTION NO. RDAP-2015-09
Exhibit D
Refunded Bonds
Tax Increment Contract Revenue and Refunding Bonds, Series 2012
J BOSC,Inc.
FORIS1 S038 STATISTICS
DEVELOPMENT AUTHORITY OF PEARLAND
TAX INCREMENT CONTRACT REVENUE&REFUNDING BONDS.SERIFS 2015
FINAL NUMBERS
[COMBINED ISSUE)
Refunded Bonds
Band
C ampcmeat Date Pnonpal Coupon Puce Isme Puce
Tax Increment Contract Rev&Ref Bds Sec_'012-
TERM 29 09.01 2016 2.970_000 00 000'. 100 000 2 970.000 00
TERM_29 09 01 2017 3.070.00000 .000r. 100000 3.07000000
TERM_29 09:01 2018 3,160 000 00 000•. 100 000 3.160.000 00
TERM 29 09 01.2019 3.255 000.00 000% 100 000 3 255.000 00
TERM_29 090172020 3,120000.00 000% 100.000 3.120.000.00
TERM 29 0901'2011 3215.000.00 000% 100 000 3.215.000 00
TERM_29 0901 2022 3.030.000 00 .000% 100.000 3.030.000.00
TERM_29 09 01 2023 3,130,000.00 .000% 100.000 3.130.000.00
TERM_29 0901 2024 3.225 000 00 000% 300 000 3.225.000 00
TERM 29 0901'2025 3.320.000.00 000% 100000 3.320.000.00
TERM_29 0901'2026 3,425,000.00 000% 100.000 3,425,000.00
TERM_29 09.01'2027 3.530.000.00 000% 100000 3,530,000.00
TERM_29 09,01'2023 3.63500000 000% 100 000 3,635.00000
TERM_29 09012029 3.745.000.00 .000% 100000 3.745,000.00
45.830.000 00 45 830 000.00
Remaining
Last Weighted
Call Issue Average
Date Date Maturity
Ta:Incremem Contract Rev-&Ref 13d:Ser 2012 11 13 2_015 09 01'_'034 '3421
All Refunded Lunn 1113 2015 ?5421
Oct 9.2015 11 36 am Prepared by BOSC.Inc(DGR) (s bow public finance dbc Pemlm d.Devrbpeamt:Maurits ufCOMB1N) Page 8
HOU:3597274.2
CERTIFICATE FOR RESOLUTION
THE STATE OF TEXAS §
COUNTIES OF BRAZORIA, FORT BEND AND HARRIS §
CITY OF PEARLAND §
I, the undersigned officer of the Board of Directors of the Development Authority of
Pearland(the"Authority"),hereby certify as follows:
1. The Board of Directors of the Authority convened in a special meeting on October 12,
2015, at the special meeting place of the Authority; and the roll was called of the duly constituted officers
and members of the Authority,to wit:
Tom Reid Chair
Bill Sloan Alternate Chair
Ed Baker Secretary
Tom Pool Director
Anthony D. Carbone Director
and all of such persons were present, except Anthony D. Carbone, thus constituting a quorum.
Whereupon,among other business,the following was transacted at said meeting: a written
RESOLUTION AUTHORIZING THE ISSUANCE OF $66,030,000 DEVELOPMENT
AUTHORITY OF PEARLAND TAX INCREMENT CONTRACT REVENUE AND
REFUNDING BONDS, SERIES 2015; APPROVING DOCUMENTS RELATING TO
THE SERIES 2015 BONDS; AUTHORIZING THE REDEMPTION PRIOR TO
MATURITY OF CERTAIN OUTSTANDING BONDS; AND CONTAINING OTHER
PROVISIONS RELATED THERETO
(the "Resolution") was duly introduced for the consideration of the City Council and read in full. It was
then duly moved and seconded that the Resolution be adopted; and, after due discussion, such motion,
carrying with it the adoption of the Resolution,prevailed and carried by the following vote:
AYES: I NAYS: Q ABSTENTIONS: I
2. That a true, full and correct copy of the Resolution adopted at the meeting described in
the above and foregoing paragraph is attached to and follows this certificate; that the Resolution has been
duly recorded in the 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 Resolution; that the persons named in the above and foregoing paragraph are the duly chosen,
qualified and acting officers and members of the City Council as indicated therein; that each of the
officers and members of the City Council was duly and sufficiently notified officially and personally, in
advance, of the date, hour, place and subject of the aforesaid meeting, and that the Resolution 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:3599755.2
SIGNED this October (2, 2015.
Secretary Chair
Board of Directors Board of Directors
HOU:3599755.2
CERTIFICATE FOR RESOLUTION
THE STATE OF TEXAS §
COUNTIES OF BRAZORIA, FORT BEND AND HARRIS §
CITY OF PEARLAND §
I, the undersigned officer of the Board of Directors of the Development Authority of
Pearland(the"Authority"),hereby certify as follows:
1. The Board of Directors of the Authority convened in a special meeting on October 12,
2015, at the special meeting place of the Authority; and the roll was called of the duly constituted officers
and members of the Authority, to wit:
Tom Reid Chair
Bill Sloan Alternate Chair
Ed Baker Secretary
Tom Pool Director
Anthony D. Carbone Director
and all of such persons were present, except Anthony D. Carbone, thus constituting a quorum.
Whereupon, among other business, the following was transacted at said meeting: a written
RESOLUTION AUTHORIZING THE ISSUANCE OF $66,030,000 DEVELOPMENT
AUTHORITY OF PEARLAND TAX INCREMENT CONTRACT REVENUE AND
REFUNDING BONDS, SERIES 2015; APPROVING DOCUMENTS RELATING TO
THE SERIES 2015 BONDS; AUTHORIZING THE REDEMPTION PRIOR TO
MATURITY OF CERTAIN OUTSTANDING BONDS; AND CONTAINING OTHER
PROVISIONS RELATED THERETO
(the "Resolution") was duly introduced for the consideration of the City Council and read in full. It was
then duly moved and seconded that the Resolution be adopted; and, after due discussion, such motion,
carrying with it the adoption of the Resolution,prevailed and carried by the following vote:
AYES:it NAYS: 0 ABSTENTIONS: .
2. That a true, full and correct copy of the Resolution adopted at the meeting described in
the above and foregoing paragraph is attached to and follows this certificate; that the Resolution has been
duly recorded in the 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 Resolution; that the persons named in the above and foregoing paragraph are the duly chosen,
qualified and acting officers and members of the City Council as indicated therein; that each of the
officers and members of the City Council was duly and sufficiently notified officially and personally, in
advance, of the date, hour, place and subject of the aforesaid meeting, and that the Resolution 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:3599755.2
SIGNED this October12 ,2015.
1.()
Secretary Chair
Board of Directors Board of Directors
HOU:3599755.2
FEDERAL TAX CERTIFICATE
I, the undersigned officer of the Development Authority of Pearland (the
"Authority"), make this certification for the benefit of all persons interested in the
exclusion from gross income for federal income tax purposes of the interest to be paid
on the Authority's Tax Increment Contract Revenue and Refunding Bonds, Series 2015
(the "Bonds"), which are being issued in the aggregate principal amount of $66,030,000
and delivered simultaneously with the delivery of this certificate. I do hereby certify as
follows in good faith on the date of issue of the Bonds:
1. Responsible Officer. I am the duly chosen, qualified and acting officer of
the Authority for the office shown below my signature; as such, I am familiar with the
facts herein certified and I am duly authorized to execute and deliver this certificate on
behalf of the Authority. I am the officer of the Authority charged, along with other
officers of the Authority, with responsibility for issuing the Bonds.
2. Code and Regulations. The Bonds are subject to the provisions of sections
141, 148, 149 and 150 of the Internal Revenue Code of 1986, as amended (the "Code"),
and the Treasury Regulations (the "Regulations") heretofore promulgated under
sections 141, 148, 149 and 150 of the Code. These provisions of the Code and
Regulations impose restrictions on the use of bond -financed facilities and on the
investment of bond proceeds. This certificate is being executed and delivered pursuant
to sections 1.141-1 through 1.141-15, 1.148-0 through 1.148-11, 1.149(b)-1, 1.149(d)-1,
1.149(g)-1, 1.150-1 and 1.150-2 of the Regulations.
3. Definitions. The capitalized terms used in this certificate (unless
otherwise defined) that are defined in the Resolution authorizing the issuance of the
Bonds dated October 12, 2015 and the Indenture of Trust dated as of May 1, 2012
between the Authority and Regions Bank, as Trustee (the "Indenture" and, together
with the Resolution, the "Bond Documents") shall for all purposes hereof have the
meanings therein specified. All such terms defined in the Code or Regulations shall for
all purposes hereof have the same meanings as given to those terms in the Code and
Regulations unless the context clearly requires otherwise.
4. Reasonable Expectations. The facts and estimates that are set forth in this
certificate are accurate. The expectations that are set forth in this certificate are
reasonable in light of such facts and estimates. There are no other facts or estimates that
would materially change such expectations. In connection with this certificate, the
undersigned has to the extent necessary reviewed the certifications set forth herein with
other representatives of the Authority as to such accuracy and reasonableness. The
undersigned has also relied, to the extent appropriate, on representations set forth in
the certificate of Compass Mortgage Corporation and Regions Capital Advantage, Inc.,
the Initial Purchasers of the Bonds (the "Initial Purchasers"), attached hereto as Exhibits
A-1 and A-2, the certificate of BOSC, Inc., the Authority's financial advisor, attached
hereto as Exhibit B, and the report (the "Report") of Grant Thornton LLP, certified
public accountants. The undersigned is aware of no fact, estimate or circumstance that
would create any doubt regarding the accuracy or reasonableness of all or any portion
of such documents.
5. Description of Governmental Purpose. The Authority is issuing the Bonds
pursuant to the Bond Documents (a) to provide funds that will be used to refund
currently and redeem the entire outstanding principal amount of the Authority's Tax
Increment Contract Revenue Bonds, Series 2012, originally issued in the amount of
$56,915,000 (the "Prior Bonds"), (b) to pay costs of water, wastewater and storm sewer
improvements, streets, drainage, parks and sidewalks within Shadow Creek Ranch, as
set forth in the Project Plan (the "New Money Project") and (c) to pay the costs of
issuance of the Bonds. The Report details all relevant aspects of the application of the
proceeds of the Bonds and the Authority's program to refund the Prior Bonds.
Specifically, all of the Prior Bonds maturing on September 1, 2029 in the amount of
$45,830,000 (collectively, the "Refunded Bonds") will be called for redemption and
retired with proceeds of the Bonds. The Refunded Bonds are being refunded in order to
achieve a present -value savings in the debt service payable by the Authority.
6. The Prior Bonds. No portion of the purchase price of any of the Prior
Bonds was provided by the issuance of any other issue of obligations. All of the
original and investment proceeds allocable to the Prior Bonds have been expended. No
portion of the proceeds of the Prior Bonds was used to pay the principal of, or interest
on, any other issue of governmental obligations. In addition, other than to the extent of
preliminary expenditures (i.e., architectural, engineering, surveying, soil testing,
reimbursement bond issuance, and similar costs that are incurred prior to
commencement of acquisition, construction, or rehabilitation of a project, other than
land acquisition, site preparation, and similar costs incident to commencement of
construction), no portion of the proceeds of the Prior Bonds was used to reimburse the
Authority for any expenditures made by the Authority prior to the respective issuance
dates of the Prior Bonds.
7. Use of Amounts Allocable to Prior Bonds. Other than amounts described
in paragraph 6 above, there are no amounts on hand that represent proceeds of the
Prior Bonds, replacement proceeds of the Prior Bonds or accumulated earnings on such
proceeds.
8. Expenditure of Proceeds of the Bonds. The sale proceeds from the
issuance of the Bonds will be $66,030,000.00. Such amount represents the stated
redemption price at maturity (excluding accrued interest for those Bonds the interest on
which is paid at least once annually) of the Bonds, equal to $66,030,000.00. No portion of
the purchase price of any of the Bonds is provided by the issuance of any other issue of
obligations. The sale proceeds will be expended as follows:
-2-
(a) The amount of $46,111,397.20 will be used as described in the Report to
pay the principal of, and interest and redemption premium, if any, on, the Refunded
Bonds. No portion of the proceeds of the Bonds is expected to be used to pay any
interest on, or principal of, any issue of governmental obligations other than the Bonds
and the Refunded Bonds.
(b)
the Bonds.
The amount of $343,602.80 will be disbursed to pay costs of issuance on
(c) The amount of $19,575,000.00 will be deposited in the Project Fund and
used to pay the costs of the New Money Project. The aggregate amount of the costs of
acquisition and construction of the New Money Project is anticipated to be not less than
such amount. Any costs of the New Money Project not financed out of original or
investment proceeds of the Bonds will be financed out of the Authority's available
funds.
9. Pre -issuance Accrued Interest. Interest on the Bonds begins to accrue
from the date of delivery. Accordingly, the Authority will not receive any amount
representing accrued interest on the Bonds.
10. Investment Proceeds. All amounts received by the Authority, such as
interest and dividends, resulting from the investment of any original proceeds or
investment proceeds of the Bonds will be deposited into the Project Fund and used to
pay additional costs of the New Money Project.
11. Transferred Proceeds. There are no transferred proceeds with respect to
the Bonds because all of the proceeds of Refunded Bonds have been or will be expended
prior to the first dates on which amounts are disbursed from the Escrow Fund to pay
principal of the Refunded Bonds.
12. No Replacement Proceeds. Other than amounts described herein, there
are no amounts that have a sufficiently direct nexus to the Bonds or to the governmental
purposes of the Bonds, including the expected use of amounts to pay debt service on
the Refunded Bonds, that the amounts would have been used for such purpose if the
proceeds of the Bonds were not used or to be used for such purpose.
(a) No Sinking Funds. Other than to the extent described herein, there is no
debt service fund, redemption fund, reserve fund, replacement fund, or similar fund
reasonably expected to be used directly or indirectly to pay principal or interest on the
Bonds.
(b) No Pledged Funds. Other than amounts described herein, there is no
amount that is directly or indirectly, other than solely by reason of the mere availability
or preliminary earmarking, pledged to pay principal or interest on the Bonds, or to a
guarantor of part or all of the Bonds, such that such pledge provides reasonable
-3-
assurance that such amount will be available to pay principal or interest on the Bonds if
the Authority encounters financial difficulty. For purposes of this certification, an
amount is treated as so pledged if it is held under an agreement to maintain the amount
at a particular level for the direct or indirect benefit of the holders or the guarantor of
the Bonds.
(c) No Other Replacement Proceeds. There are no other replacement
proceeds allocable to the Bonds because the Authority reasonably expects that the term
of the Bonds will not be longer than is reasonably necessary for the governmental
purposes of the Bonds. Furthermore, if the term of the Bonds is longer than is
reasonably necessary for the governmental purposes of the Bonds, the Authority does
not reasonably expect to have available amounts during the portion of such period that
is longer than is reasonably necessary. The Bonds would be issued to achieve a debt
service savings independent of any arbitrage benefit as evidenced by the expectation
that the Bonds reasonably would have been issued if the interest on the Bonds were
included in gross income (assuming that the hypothetical taxable interest rate would be
the same as the actual tax-exempt interest rate).
(d) Weighted Average Maturity. The weighted average maturity of the Bonds
does not exceed the remaining weighted average maturity of the Refunded Bonds and
the weighted average maturity of the Refunded Bonds is not greater than 120 percent of
the weighted average estimated economic life of the portion of the project financed by
the Refunded Bonds, determined in accordance with section 147(b) of the Code. Such
weighted average estimated economic life is determined in accordance with the
following assumptions: (a) The weighted average was determined by taking into
account the respective costs of each of the assets financed by the Refunded Bonds; (b)
the reasonably expected economic life of an asset was determined as of the later of the
date hereof or the date on which such asset is expected to be placed in service (i.e.,
available for use for the intended purposes of such asset); (c) the economic lives used in
making this determination are not greater than the useful lives used for depreciation
under section 167 of the Code prior to the enactment of the current system of
depreciation in effect under section 168 of the Code (i.e., the "mid -point lives") under
the asset depreciation range ("ADR") system of section 167(m) of the Code, as set forth
in Revenue Procedure 83-35, 1983-1 C.B. 745, where applicable, and the "guideline
lives" under Revenue Procedure 62-21,1962-2 C.B. 418, in the case of structures; and (d)
land or any interest therein has not been taken into account in determining the average
reasonably expected economic life of such Project, unless 25 percent or more of the net
proceeds of any issue is to be used to finance land.
13. Yield on the Bonds. For the purposes of this certificate, the yield on the
Bonds is the discount rate that, when used in computing the present value as of the
issue date of the Bonds, of all unconditionally payable payments of principal, interest
and fees for qualified guarantees on the Bonds, produces an amount equal to the
present value, using the same discount rate, of the aggregate issue price of the Bonds as
-4-
of the issue date. For purposes of determining the yield on the Bonds, the issue price of
the Bonds is the sum of the issue prices for each group of substantially identical Bonds.
For each group of substantially identical Bonds, the issue price is the first price at which
the Bond was sold to the Purchaser. The Purchaser intends to hold the Bonds as
evidence of a loan. The Bonds are not being offered to the public and are not being
issued in exchange for property.
The Yield with respect to that portion of the Bonds subject to optional
redemption is computed by treating such Bonds as retired at the stated redemption
price at the final maturity date because (a) the District has no present intention to
redeem prior to maturity the Bonds that are subject to optional redemption; (b) no Bond
is subject to optional redemption at any time for a price less than the retirement price at
final maturity plus accrued interest; (c) no Bond is subject to optional redemption
within five years of the issue date of the Bonds; (d) no Bond subject to optional
redemption is issued at an issue price that exceeds the stated redemption price at
maturity of such Bond by more than one-fourth of one percent multiplied by the
product of the state redemption price at maturity of such Bond and the number of
complete years to the first optional redemption date for such Bond; and (e) no Bond
subject to optional redemption bears interest at a rate that increases during the term of
the Bond.
The yield on the Bonds, as shown in the Report, is 2.740334 percent.
14. Temporary Periods and Yield Restriction.
(a) New Money Project. The Authority has incurred or will incur within six
months of the date hereof a binding obligation to a third party which is not subject to
any contingencies within the control of the Authority or a related party pursuant to
which the Authority is obligated to expend at least five percent of the sale proceeds of
the Bonds on the New Money Project. The Authority reasonably expects that work on
or acquisition of the New Money Project will proceed with due diligence to completion
and that the proceeds of the Bonds will be expended on the New Money Project with
reasonable dispatch. The Authority reasonably expects that 85 percent of the sale
proceeds of the Bonds will have been expended on the New Money Project prior to the
date that is three years after the issue date. Any sale proceeds not expended prior to the
date that is three years after the issue date, will be invested at a yield not "materially
higher" than the yield on the Bonds, except as set forth in paragraph 16 below. The
Authority reasonably expects that any amount derived from the investment of moneys
received from the sale of the Bonds and from the investment of such investment income
will not be commingled with substantial other receipts or revenues of the Authority and
will be expended prior to the date that is three years after the issue date, or one year
after receipt of such investment income, whichever is later. Any such investment
proceeds not expended prior to such date will be invested at a yield not "materially
higher" than the yield on the Bonds, except as set forth in paragraph 16 below.
-5-
(b) Issuance Costs. It is expected that the amount described in paragraph 8(b)
will be disbursed within 13 months of the date hereof for costs of issuing the Bonds;
therefore, such amount will be invested for an allowable temporary period. To the
extent any portion of the amount described in paragraph 8(b) is not expended as
described herein, the Authority will take steps to restrict the investment of such
amounts to a yield which is not materially higher than the yield on the Bonds.
(c) Current Refunding. The amount described in paragraph 8(a) will be used
within 90 days of date hereof to pay principal of and interest on the Refunded Bonds.
Therefore, such amount may be invested for an allowable temporary period.
15. Debt Service Fund. Pursuant to the Indenture, the Authority has
confirmed the debt service fund designated the "Debt Service Fund," which will be
used primarily to achieve a proper matching of revenues and debt service on the Bonds,
within each Bond Year. The revenues are anticipated to be sufficient to pay debt service
each year on the Bonds. The Debt Service Fund will be depleted at least once each year
except for a reasonable carryover amount not to exceed the greater of (a) one year's
earnings on the Debt Service Fund or (b) one -twelfth of annual debt service. The
Authority reasonably expects that any such revenues deposited in the Debt Service
Fund will be disbursed within 13 months of the date of receipt of such revenues by the
Authority. Amounts on deposit in the Debt Service Fund may be invested for an
allowable temporary period of 13 months from the date such amount are deposited into
the Debt Service Fund. Any such amount not expended within such period will be
invested at a yield not "materially higher" than the yield on the Bonds, except as set
forth in paragraph 16 below.
16. Minor Portion. All gross proceeds will be invested in accordance with
paragraphs 13 and 14 above. To the extent such amounts remain on hand following the
periods set forth in paragraphs 13 and 14 above or exceed the limits set forth in
paragraph 14 above, the Authority will invest such amounts at a restricted yield as set
forth in such paragraphs; provided, however, that a portion of such amounts, not to
exceed in the aggregate the lesser of $100,000 or five percent of the sale proceeds of the
Bonds, may be invested at a yield that is higher than the yield on the Bonds.
17. Issue. There are no other obligations which (a) are sold at substantially
the same time as the Bonds (i.e., within 15 days), (b) are sold pursuant to the same plan
of financing with the Bonds, and (c) will be paid out of substantially the same source of
funds as the Bonds.
-6-
18. Compliance With Rebate Requirements.
(a) General. The Authority has covenanted in the Bond Documents that it
will take all necessary steps to comply with the requirement that "rebatable arbitrage
earnings" on the investment of the "gross proceeds" of the Bonds, within the meaning
of section 148(d) of the Code be rebated to the federal government. Specifically, the
Authority will (a) maintain records regarding the investment of the "gross proceeds" of
the Bonds as may be required to calculate such "rebatable arbitrage earnings"
separately from records of amounts on deposit in the funds and accounts of the
Authority which are allocable to other bond issues of the Authority or moneys which
do not represent "gross proceeds" of any bonds of the Authority, (b) calculate at such
intervals as may be required by applicable Regulations, the amount of "rebatable
arbitrage earnings," if any, earned from the investment of the "gross proceeds" of the
Bonds and (c) pay, not less often than every fifth anniversary date of the delivery of the
Bonds and within 60 days following the final maturity of the Bonds, or on such other
dates required or permitted by applicable Regulations, all amounts required to be
rebated to the federal government. Further, the Authority will not indirectly pay any
amount otherwise payable to the federal government pursuant to the foregoing
requirements to any person other than the federal government by entering into any
investment arrangement with respect to the "gross proceeds" of the Bonds that might
result in a reduction in the amount required to be paid to the federal government
because such arrangement results in a smaller profit or a larger loss than would have
resulted if the arrangement had been at arm's-length and had the yield on the issue not
been relevant to either party.
(b) Two -Year Spending Exception. The Authority hereby makes the elections,
if any, set forth below for purposes of the two-year spending exception from arbitrage
rebate:
DO NOT
ELECT ELECT N/A
❑ ❑ 1. To use actual facts to apply the provisions of
paragraphs (e) through (m) of section 1.148-7 of the
Regulations. Section 1.148-7(0 (2) of the Regulations.
❑ ® ❑ 2. To exclude earnings on a reasonably required
reserve or replacement fund from the definition of
"available construction proceeds" for purposes of the
spending requirements. Section 1.148-7(i) (2) of the
Regulations.
❑ ® ❑ 3. To treat the portion of the Tax -Exempt Bonds
that is not a refunding issue as two, and only two,
separate issues, one of which (a) meets the definition
-7-
of a construction issue and (b) is reasonably expected
as of the date hereof to finance all of the construction
expenditures to be financed by the Tax -Exempt Bonds.
Section 1.148-70) (1) of the Regulations.
❑ ® ❑ 4. To pay a penalty (the "1-1/2% penalty") to the
United States in lieu of the obligation to pay arbitrage
rebate on available construction proceeds in the event
that the Tax -Exempt Bonds fail to satisfy any of the
semiannual spending requirements for the two-year
rebate exception. Section 1.148-7(k) (1) of the
Regulations.
The Authority reasonably expects that at least 75 percent of the "available
construction proceeds" of the Bonds, within the meaning of section 1.148-7(i) of the
Regulations, will be allocated to "construction expenditures," within the meaning of
section 1.148-7(g) of the Regulations, for property owned by the Authority.
19. Not an Abusive Transaction.
(a) General. No action taken in connection with the issuance of the Bonds is
or will have the effect of (a) enabling the Authority to exploit, other than during an
allowable temporary period, the difference between tax-exempt and taxable interest
rates to obtain a material financial advantage (including as a result of an investment of
any portion of the gross proceeds of the Bonds over any period of time,
notwithstanding that, in the aggregate, the gross proceeds of the Bonds are not invested
in higher yielding investments over the term of the Bonds), and (b) overburdening the
tax-exempt bond market by issuing more bonds, issuing bonds earlier, or allowing
bonds to remain outstanding longer than is otherwise reasonably necessary to
accomplish the governmental purposes of the Bonds, based on all the facts and
circumstances. Specifically, (i) the primary purpose of each transaction undertaken in
connection with the issuance of the Bonds is a bona fide governmental purpose; (ii) each
action taken in connection with the issuance of the Bonds would reasonably be taken to
accomplish the governmental purposes of the Bonds if the interest on the Bonds were
not excludable from gross income for federal income tax purposes (assuming the
hypothetical taxable interest rate would be the same as the actual tax-exempt interest
rate on the Bonds); (iii) the proceeds of the Bonds will not exceed by more than a minor
portion the amount necessary to accomplish the governmental purposes of the Bonds
and will in fact not be substantially in excess of the amount of proceeds allocated to
expenditures for the governmental purposes of the Bonds.
(b) No Re -refunding. No portion of the Refunded Bonds has been refunded
or defeased other than by reason of the issuance of the Bonds.
-8-
(c) No Sinking Fund. No portion of the Bonds has a term that has been
lengthened primarily for the purpose of creating a sinking fund or similar fund with
respect to the Bonds and thereby eliminating significant amounts of negative arbitrage
in the Escrow Fund.
(d) No Noncallable Bonds. The Refunded Bonds do not include any
noncallable Prior Bonds that have been refunded in order to invest proceeds in the
Escrow Fund allocable to the noncallable Refunded Bonds at a yield that is higher than
the yield on the Bonds and thereby eliminate significant amounts of negative arbitrage
in the Escrow Fund.
(e) No Window Refunding. No portion of the Bonds has been structured
with maturity dates the primary purpose of which is to make available released
revenues that will enable the Authority to avoid transferred proceeds or to make
available revenues that may be invested to be ultimately used to pay debt service on
another issue of obligations.
(f) No Sale of Conduit Loan. No portion of the gross proceeds of the Prior
Bonds or the Bonds has been or will be used to acquire, finance, or refinance any
conduit loan.
20. No Arbitrage. On the basis of the foregoing facts, estimates and
circumstances, it is expected that the gross proceeds of the Bonds will not be used in a
manner that would cause any of the Bonds to be an "arbitrage bond" within the
meaning of section 148 of the Code and the Regulations. To the best of the knowledge
and belief of the undersigned, there are no other facts, estimates or circumstances that
would materially change such expectations.
21. No Private Use, Payments or Loan Financing.
(a) General. The Authority reasonably expects, as of the date hereof, that no
action or event during the entire stated term of the Bonds will cause either the "private
business tests" or the "private loan financing test," as such terms are defined in the
Regulations, to be met. Specifically,
(i) Not more than 10 percent of the proceeds of the Bonds will be used
and no portion of the proceeds of the Prior Bonds has been used in a trade or business
of a nongovernmental person. For purposes of determining use, the Authority will
apply rules set forth in applicable Regulations and Revenue Procedures promulgated
by the Internal Revenue Service, including, among others, the following rules: (A) Any
activity carried on by a person other than a natural person or a state or local
governmental unit will be treated as a trade or business of a nongovernmental person;
(B) the use of all or any portion of the New Money Project financed by the Prior Bonds
is treated as the direct use of proceeds; (C) a nongovernmental person will be treated as
-9-
a private business user of proceeds of the Bonds or the Prior Bonds as a result of
ownership, actual or beneficial use of the proceeds pursuant to a lease, or a
management or incentive payment contract, or certain other arrangements such as a
take -or -pay or other output -type contract; and (D) the private business use test is met if
a nongovernmental person has special legal entitlements to use directly or indirectly the
New Money Project.
(ii) The Authority has not taken and will not take any deliberate action
that would cause or permit the use of any portion of the New Money Project to change
such that such portion will be deemed to be used in the trade or business of a
nongovernmental person for so long as any of the Bonds remains outstanding (or until
an opinion of nationally recognized bond counsel is received to the effect that such
change in use will not adversely affect the excludability from gross income for federal
income tax purposes of interest payable on the Bonds). For this purpose any action
within the control of the Authority is treated as a deliberate action. A deliberate action
occurs on the date the Authority enters into a binding contract with a nongovernmental
person for use of the New Money Project that is not subject to any material
contingencies.
(iii) No portion of the proceeds of the Bonds will be directly or
indirectly used to make or finance a loan to any person other than a state or local
governmental unit.
(b) Dispositions of Personal Property in the Ordinary Course. The Authority
does not reasonably expect that it will sell or otherwise dispose of personal property
components of the New Money Project financed with the Bonds other than in the
ordinary course of an established governmental program that satisfies the following
requirements:
(i) The weighted average maturity of the portion of the Bonds
financing personal property is not greater than 120 percent of the reasonably expected
actual use of such personal property for governmental purposes;
(ii) The reasonably expected fair market value of such personal
property on the date of disposition will be not greater than 25 percent of its cost;
(iii) Such personal property will no longer be suitable for its
governmental purposes on the date of disposition; and
(iv) The Authority is required to deposit amounts received from such
disposition in a commingled fund with substantial tax or other governmental revenues
and the Authority reasonably expects to spend such amounts on governmental
programs within 6 months from the date of commingling.
-10-
(c) Other Agreements. The Authority will not enter into any agreement with
any nongovernmental person regarding the use of all or any portion of the New Money
Project during the stated term of the Bonds unless such agreement will not adversely
affect the treatment of interest on the Bonds as excludable from gross income for federal
income tax purposes.
22. Weighted Average Maturity. The Weighted Average Maturity of the
Bonds set forth on Exhibit B attached to this Certificate is the sum of the products of the
Issue Price of each group of identical Bonds and the number of years to maturity
(determined separately for each group of identical Bonds and taking into account
mandatory redemptions), divided by the aggregate Sale Proceeds of the Bonds.
23. Bonds are not Hedge Bonds. Not more than 50 percent of the proceeds of
the new money portion of the Bonds will be invested in nonpurpose investments (as
defined in section 148(d)(6)(A) of the Code) having a substantially guaranteed yield for
four years or more within the meaning of section 149(g)(3)(A)(ii) of the Code, and the
Authority reasonably expects that at least 85 percent of the spendable proceeds of the
new money portion of the Bonds will be used to carry out the governmental purposes
of the Bonds within the three-year period beginning on the date the Bonds are issued.
Furthermore, the Authority represents that not more than 50 percent of the proceeds of
each issue of which the Refunded Bonds are a part was invested in nonpurpose
investments (as defined in section 148(d)(6)(A) of the Code) having a substantially
guaranteed yield for four years or more within the meaning of section 149(g)(3)(A)(ii) of
the Code, and the Authority reasonably expected at the time each issue of which the
Refunded Bonds are a part was issued that at least 85 percent of the spendable proceeds
of each such issue would be used to carry out the governmental purposes of such issues
within the corresponding three-year period beginning on the respective dates of issue of
such Refunded Bonds.
EXECUTION PAGE FOLLOWS
-11-
DEVELOPMENT AUTHORITY OF
PEARLAND
By: OYn V Sa
Tom Reid, Chair
Date: November 12, 2015
-12-
EXHIBIT A-1
CERTIFICATE OF INITIAL PURCHASERS
Compass Mortgage Corporation is the Initial Purchaser (the "Initial Purchaser")
of a fifty percent share of the Development Authority of Pearland (the "Authority") Tax
Increment Contract Revenue and Refunding Bonds, Series 2015 in the principal amount
of $66,030,000 (the "Bonds"). I, the undersigned, hereby certify as follows on behalf of
the Initial Purchaser:
1. I am the duly chosen, qualified and acting officer of the Initial
Purchasers for the office shown below my signature; as such, I am familiar with
the facts herein certified and I am duly authorized to execute and deliver this
certificate on behalf of the Initial Purchaser. I am the officer of the Initial
Purchaser charged with responsibility for the Bonds.
2. The Initial Purchaser has purchased a fifty percent share of the
Bonds from the Authority for an aggregate purchase price of $33,015,000.00,
which price includes no amount of accrued interest. The Initial Purchaser
intends to hold the Bonds for investment purposes and not in the capacity of
bondhouse, broker, dealer, or similar person or organization acting in the
capacity of underwriter or wholesaler. The Bonds are not being offered to the
public and is not being issued in exchange for property. The issue price
described above is equal to the fair market value of the Bonds on the sale date.
For this purpose, the sale date is the first date on which there is a binding
contract for the sale or exchange of the Bonds.
The Initial Purchaser hereby authorizes the Authority to rely on the statements
made herein in connection with making the representations set forth in the Federal Tax
Certificate to which this certificate is attached and in its efforts to comply with the
conditions imposed by the Code on the exclusion of interest on the Bonds from the
gross income of their owners. The Initial Purchaser hereby authorizes Allen Boone
Humphries Robinson LLP and Andrews Kurth LLP to rely on this certificate for
purposes of its opinion regarding the treatment of interest on the Bonds as excludable
from gross income for federal income tax purposes. Capitalized terms used herein and
not otherwise defined have the meaning ascribed to such terms in the Federal Tax
Certificate to which this certificate is attached.
COMPASS MORTGAGE CORPORATION
BV:
Title:
Date: November 12, 2015
EXHIBIT A-2
CERTIFICATE OF INITIAL PURCHASERS
Regions Capital Advantage, Inc. is the Initial Purchaser (the "Initial Purchaser")
of a fifty percent share of the Development Authority of Pearland (the "Authority") Tax
Increment Contract Revenue and Refunding Bonds, Series 2015 in the principal amount
of $66,030,000 (the "Bonds"). I, the undersigned, hereby certify as follows on behalf of
the Initial Purchaser:
3. I am the duly chosen, qualified and acting officer of the Initial
Purchasers for the office shown below my signature; as such, I am familiar with
the facts herein certified and I am duly authorized to execute and deliver this
certificate on behalf of the Initial Purchaser. I am the officer of the Initial
Purchaser charged with responsibility for the Bonds.
4. The Initial Purchaser has purchased a fifty percent share of the
Bonds from the Authority for an aggregate purchase price of $33,015,000.00,
which price includes no amount of accrued interest. The Initial Purchaser
intends to hold the Bonds for investment purposes and not in the capacity of
bondhouse, broker, dealer, or similar person or organization acting in the
capacity of underwriter or wholesaler. The Bonds are not being offered to the
public and is not being issued in exchange for property. The issue price
described above is equal to the fair market value of the Bonds on the sale date.
For this purpose, the sale date is the first date on which there is a binding
contract for the sale or exchange of the Bonds.
The Initial Purchaser hereby authorizes the Authority to rely on the statements
made herein in connection with making the representations set forth in the Federal Tax
Certificate to which this certificate is attached and in its efforts to comply with the
conditions imposed by the Code on the exclusion of interest on the Bonds from the
gross income of their owners. The Initial Purchaser hereby authorizes Allen Boone
Humphries Robinson LLP and Andrews Kurth LLP to rely on this certificate for
purposes of its opinion regarding the treatment of interest on the Bonds as excludable
from gross income for federal income tax purposes. Capitalized terms used herein and
not otherwise defined have the meaning ascribed to such terms in the Federal Tax
Certificate to which this certificate is attached.
REGIONS CAPITAL ADVANTAGE, INC.
By:
Title:
Date: November 12, 2015
EXHIBIT B
CERTIFICATE OF FINANCIAL ADVISOR
BOSC, Inc. has acted as financial advisor (the "Financial Advisor") to the
Development Authority of Pearland (the "Authority"), in connection with the sale and
delivery of the Tax Increment Contract Revenue and Refunding Bonds, Series 2015, in
the aggregate amount of $66,030,000.00 (the "Bonds"). In addition, the Financial
Advisor has acted as bidding agent (the "Bidding Agent") in connection with the
purchase of certain investment agreements on behalf of the Authority. I, the
undersigned, hereby certify as follows:
1. I am the duly chosen, qualified and acting officer of the Financial
Advisor for the office shown below my signature; as such, I am familiar with the
facts herein certified and I am duly authorized to execute and deliver this
certificate on behalf of the Financial Advisor. I am the officer of the Financial
Advisor charged, along with other officers of the Financial Advisor, with
responsibility for issuing the Bonds.
2. The Financial Advisor computed the Weighted Average Maturity
of the Bonds to be 7.5709 years, as set forth in paragraph 22 of the Federal Tax
Certificate.
3. I have worked closely with representatives of the Authority in
structuring the financial terms of the Bonds and the refunding of the Refunded
Bonds. The Financial Advisor has also performed certain computations that are
the subject of the Report. I hereby confirm that the assumptions that are
described in the Report as provided by the Financial Advisor are true, accurate
and complete. I further hereby represent that to the best of my knowledge the
statements set forth in paragraph 19 of the Federal Tax Certificate, to which this
certificate is attached, are true.
The Financial Advisor hereby authorizes the Authority to rely on the statements made
herein in connection with making the representations set forth in the Federal Tax
Certificate to which this certificate is attached and in its efforts to comply with the
conditions imposed by the Code on the exclusion of interest on the Bonds from the
gross income of their owners. The Financial Advisor hereby authorizes Allen Boone
Humphries Robinson LLP and Andrews Kurth LLP to rely on this certificate for
purposes of its opinion regarding the treatment of interest on the Bonds as excludable
from gross income for federal income tax purposes. Capitalized terms used herein and
not otherwise defined have the meaning ascribed to such terms in the Federal Tax
Certificate to which this certificate is attached.
BOSC, INC.
By:
Name:
Title:
Date: November 12, 2015
Form 8038-G
(Rev. September 2011)
Department of the Treasury
Internal Revenue Service.
Part I
Information Return for Tax -Exempt Governmental Obligations
► Under Internal Revenue Code section 149(e)
P. See separate instructions.
Caution: If the issue price is under$100,000, use Form 8038 -GC.
OMB No. 1545-0720
Reporting Authority
If Amended Return, check here P. ❑
1 Issuer's name
Development Authority of Pearland, Texas
2 Issuer's employer identification number (EIN)
20-1677972
3a Name of person (other than issuer) with whom the IRS may communicate about this
return (see instructions)
3b Telephone number of other person shown on 3a
4 Number and street (or P.O. box if mail is not delivered to street address)
3919 Liberty Drive
Room/suite
5 Report number (For IRS Use Only)
13 1
6 City. town. or post office. state. and ZIP code
Pearland, Texas 77581
13 Transportation
7 Date of issue
November 12, 2015
8 Name of issue
Tax Increment Contract Revenue and Refunding Bonds, Series 2015
9 CUSIP number
N/A
10a Name and title of officer or other employee of the issuer whom the IRS may call for
instructions)
Clay Pearson, City Manager
more information (see
10b Telephone number of officer or other
employee shown on 10a
281-652-1663
Part 1I
Type of Issue (enter the issue price). See the instructions and attach schedule.
11 Education
11
12 Health and hospital
12
13 Transportation
13
14 Public safety
14
15 Environment (including sewage bonds)
15
16 Housing
16
17 Utilities
17
18
Other. Describe ► streets, sidewalks, utilities, parks
18
66,030,000
00
19 If
obligations are TANs or RANs, check only box 19a
► ❑
If obligations are BANs, check only box 19b
► ■
20 If obligations are in the form of a lease or installment sale, check
box P. ■
Part III Description of Obligations. Complete for the entire issue for which this form is being filed.
(a) Final maturity date
(b) Issue price
(c) Stated redemption
price at maturity
(d) Weighted
average maturity
(e) Yield
21
9/1/2029
$ 66,030,000.00
$ 66,030,000.00
7.5709 years
2.7403 %
Part IV
Uses of Proceeds of Bond Issue (including underwriters' discount)
22 Proceeds used for accrued interest
23 Issue price of entire issue (enter amount from line 21, column (b))
24 Proceeds used for bond issuance costs (including underwriters' discount) .
25 Proceeds used for credit enhancement
26 Proceeds allocated to reasonably required reserve or replacement fund
27 Proceeds used to currently refund prior issues
28 Proceeds used to advance refund prior issues
29 Total (add lines 24 through 28)
30
24
343,602 80
22
0
00
25
0
00
26
0
00
27
46,111,397
20
28
0
00
Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here)
Part V
31
32
33
34 Enter the date(s) the refunded bonds were issued ► (MM/DD/YYYY)
23
29
66,030,000
00
46,455,000
00
30
19, 575,000
00
Description of Refunded Bonds. Complete this part only for refunding bonds.
Enter the remaining weighted average maturity of the bonds to be currently refunded .
Enter the remaining weighted average maturity of the bonds to be advance refunded .
Enter the last date on which the refunded bonds will be called (MM/DD/YYYY)
5/22/2012
7.5421 years
N/A years
1 111 3/201 5
For Paperwork Reduction Act Notice, see separate instructions.
Cat. No. 63773S
Form 8038-G (Rev. 9-2011)
Form 8038-G (Rev. 9-2011)
Part VI
Page 2
Miscellaneous
35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . .
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract
(GIC) (see instructions)
b Enter the final maturity date of the GIC ►
c Enter the name of the GIC provider ►
37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans
to other governmental units 37 0 00
If this issue is a loan made from the proceeds of another tax-exempt issue, check box ► ❑ and enter the following information:
Enter the date of the master pool obligation ►
Enter the EIN of the issuer of the master pool obligation ►
Enter the name of the issuer of the master pool obligation ►
38a
b
c
d
39 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box ► ❑
40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box ► ❑
41a If the issuer has identified a hedge, check here ► ❑ and enter the following information:
b Name of hedge provider ►
c Type of hedge ►
d Term of hedge ►
42 If the issuer has superintegrated the hedge, check box ► ❑
43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated
according to the requirements under the Code and Regulations (see instructions). check box ►
44 If the issuer has established written procedures to monitor the requirements of section 148, check box ►
45a If some portion of the proceeds was used to reimburse expenditures, check here ► ❑ and enter the amount
of reimbursement ►
b Enter the date the official intent was adopted ►
Signature
and
Consent
Paid
Preparer
Use Only
Under penalties of perjury. I declare that I have examined this return and accompanying schedules and statements. and to the best of my knowledge
and belief, they are true. corrE(ct�nct complete. I further declare that I consent to the IRS's disclosure of the issuer's return information, as necessary to
process this ret to the per on that I ave authorized above.
l/Yly /11 J // -/C-6
' Signature of issuer's authorized representative Date
Pnntflype preparer's name
Tina M. Kyle
Preparer's signature
Firm's name ► Allen Boone Humphries Robinson LLP
Tom Reid, Chairman of the Board
Type or print name and title
Date
Firm's address ► 3200 Southwest Fwy, Ste 2600, Houston, TX 77027
Check ❑ if
self-employed
Firm's EIN ►
Phone no.
PTIN
P01066476
74-3091731
713-860-6400
Form 8038-G (Rev. 9-2011)