HomeMy WebLinkAboutRes 04-2002 Authorizing the Mayor to Sign Documents Necessary Authorizing GTUA to Secure Funds- Wastewater Treatment Facility ImprovementsRamat UAIRMINE
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bhereas, the City of Anna is experiencing significant growth and expects significanfily
higher growth rates over the next several years; and
3hereas, the City of Anna's existing sanitary sewer treatment plant is limited to a
treatment capacity of approximately 250,000 gallons per day; and
Whereas, the growth of the community is expected to significantEy exceed the treatment
capacity of the existing treatment plant; and
�'��hereas, the City has 1988 Series Cer'tificafies of Ota{igafiion with a variable interest
rate considerably exceeding existing available rates; and
hereads, the City has the ability fio refinance the existing 1980 Series debt at a io°ever
interest rate; and
'whereas, the City has an existing agreement with Greater Texoma Utility Authori#y to
utilize the Authority's services to secure funds for purposes of making capital
improvements in the City and refinancing debt;
4 � i
The Ci#y of Anna hereby authorizes the i+Jlayor to sign any and all documents required to
authorize the Greater Texoma Utility Authority to secure funds in an amount not to
exceed two million dollars ($2,000,000) for purposes of making wastewater treatment
facility improvements and refinancing an existing bond issue at a lower interest rate.
R
esolved this day the 8th day of January, 2002, by the City Council of the City of Anna,
Texas, by 'the fo{lowing vote:
Ayes:
days:
Abstentions: t�
City Seeretary
Mayor
HP OfficeJet
Personal Printer/Fax/Copier/Scanner
Last 30 Faxes
Date Time Twe Identification
Fax History Report for
City of Anna
972-924-2620
Jan 09 2002 2:51pm
Duration Pales Result
Jan 7 12:SSpm Sent 19724421786 5:14 12 OK
Jan 7 1:01pm Sent 19724421.786 5:29 14 OK
Jan 7 1:22pm Sent 9725291684 0:39 2 OK
Jan 7 2:31pm Received 0*36 0 No fax
Jan 7 3:44pm Sent 19726800003 0:28 1 OK
Jan 7 4:33pm Received (818) 67&6955 0:34 1 OK
Jan 7 8:23pm Received 0:36 0 No fax
Jan 7 8:46pm Received 0 0:49 1 OK
Jan 8 7:49am Received 9038910191 0*39 0 Error 232
Jan 8 7:55am Received 9038910191 0054 1 OK
Jan 8 8:06am Sent 9034825656 0:48 2 OK
Jan 8 8:47am Sent 2146380447 0*00 0 No answer
Jan 8 8:53am Sent 12146380447 0:38 2 OK
Jan 8 9:19am Received 0036 0 No fax
Jan 8 1:18pm Received 0:36 0 No fax
Jan 8 1:19pm Sent 2145442630 1:28 6 OK
Jan 8 1:21pm Sent 9728374104 1:41 6 OK
Jan 8 1:25pm Sent 19727699504 2:01 6 OK
Jan 8 8:23pm Received 0:36 0 No fax
Jan 9 9:01am Received 972+680+0003 1 *07 3 OK
Jan 9 9:23am Sent 19726800003 0*30 1 OK
Jan 9 9:26am Received 0*37 0 No fax
Jan 9 10:25am Sent 19726800003 0:32 1 OK
Jan 9 l l :11am Received 972+680+0003 0*52 2 OK
Jan 9 11:22am Sent 19724841479 0:38 1 OK
Jan 9 12:00pm Received 9725482805 0:54 2 OK
Jan 9 12:31pm Received 972442786 0:38 1 OK
Jan 9 12:38pm Sent 9729243284 0:56 4 OK
Jan 9 1:22pm Received 0:36 0 No fax
Jan 9 2:50pm Sent 19037868211 0:46 3 OK* -
Result:
OK -black and white fax
OK color - color fax
CERTIFICATE OF SECRETARY
THE STATE OF TEXAS §
COUNTIES OF COOKE, FANNIN §
AND GRAYSON
I, the undersigned, Secretary of the Board of Directors of Greater Texoma Utility Authority'
DO HEREBY CERTIFY as follows:
1. That on the 15th day of July, 2002, the Board of Directors of the Greater Texoma
Utility Authority (the "Board"), convened in regular session at its regular meeting place; the duly
constituted members of the Board being as follows:
DAVID WRIGHT
DONALD SKELTON
GEORGE ROWLAND
MARK KUNEMAN
EVERETT GRANTHAM
BILL JOHNSON
JOE HENDERSON
HERSHELHOGENSON
PRESIDENT
VICE-PRESIDENT
SE CRETARY/TREASURER
MEMBER
MEMBER
MEMBER
MEMBER
MEMBER
all of said persons were present at said meeting, except the following: Rowland
other business considered at said meeting, the attached resolution entitled:
Among
A RESOLUTION by the Board of Directors of the Greater Texoma Utility Authority
authorizing the issuance of "Greater. Texoma Utility Authority Contract
Revenue Bonds, Series 2002 (City of Anna Project)" for the construction,
acquisition and improvement of wastewater system facilities and necessary
appurtenances for use. by the City of Anna, Texas, and the payment of all
costs incident and related to the construction, acquisition, improvement and
financing thereof; prescribing the form, terms, conditions, and resolving other
matters incident and related to the issuance, sale, and delivery of said
bonds; including the pledge of certain revenues to pay the principal of and
interest on such bonds; resolving provisions incident and related to the
subject and purpose of this resolution; and repealing the resolution adopted
March 25, 2002.
was submitted to the Board for passage and adoption. After presentation and due consideration of
the resolution, and a motion being made by Johnson and seconded by Grantham the
resolution was finally passed to be effective immediately upon its adoption by the following vote:
7 „ 0 0
— voted .For" voted Against" abstained
all as shown in the official Minutes of the Board for the meeting held on the aforesaid date.
2. That the attached resolution is a true and correct copy of the original on file in the official
records of the Board; the duly qualified and acting members of the Board on the date of the
aforesaid meeting are those persons shown above and, according to the records of my office, each
member of the Board was given actual notice that the matter would be considered; and that said
meeting, and deliberation of the aforesaid public business, was open to the public and written
notice of said meeting, including the subject of the entitled resolution, was posted and given in
advance thereof in compliance with the provisions of Chapter 551 of the Texas Government Code.
45200322.1/10202579
IN WITNESS WHEREOF, I have hereunto signed my name officially and affixed the seal
of said Authority, this the 15th day of July, 2002. '
(Authority Seal)
Secretary, Boar of Directors
Greater Texoma Utility Authority
45200322.1/10202579
A RESOLUTION by the Board of Directors of the Greater Texoma Utility
Authority authorizing the issuance of "Greater Texoma Utility Authority
Contract Revenue Bonds, Series 2002 (City of Anna Project)" for the
construction, acquisition and improvement of wastewater system facilities
and necessary appurtenances for use by the City of Anna, Texas, and the
payment of all costs incident and related to the construction, acquisition,
improvement and financing thereof; prescribing the form, terms,
conditions, and resolving other matters incident and related to the
issuance, sale, and delivery of said bonds; including the pledge of certain
revenues to pay the principal of and interest on such bonds; resolving
provisions incident and related to the subject and purpose of this
resolution; and repealing the resolution adopted March 25, 2002.
WHEREAS, the Board of Directors of the Greater Texoma Utility Authority (the
'Authority") has determined that $1,965,000 in principal amount of bonds should be issued at
this time to provide funding for the Series 2002 Project more fully described in Exhibit B
attached hereto and incorporated herein by this reference as though set out in full;
WHEREAS, the Board of Directors of the Authority has determined that the bonds herein
authorized may and shall be issued as additional bonds on a parity with the Outstanding
Previously Issued Bonds (herein defined) in that:
(a) The Authority is not now in default as to any covenant, condition or obligation
prescribed in a resolution authorizing the issuance of the Outstanding Bonds Similarly Secured
or the Contract (including any amendment or supplement thereto).
(b) A consulting engineer has certified to the Authority the need for an estimated
amount of additional financing required for completion, expansion, enlargement or improvement
of the Project. The requirement that a certified public accountant certify to the Authority that the
net revenues of the City's utility system for the last completed Fiscal Year or a 12 consecutive
calendar month period ending no more than ninety (90) days preceding the adoption of the
resolution authorizing the Bonds were at least 1.25 times the average annual debt service
requirements after giving effect to the issuance of the Bonds shall be eliminated with the
consent of the single holder of all of the Previously Issued Bonds, and a copy of such waiver
shall be attached hereto as Exhibit A.
(c) The City of Anna, Texas, has approved this resolution authorizing the issuance of
the Bonds as to form and content and acknowledged that the payment of principal of and
interest on. such Bonds is payable, in whole or in part, from payments to be made by the City of
Anna, Texas, under and pursuant to the Contract.
(d) The Bonds mature on May 1 in each of the years in which. they are scheduled to
mature.
(e) This resolution authorizing the issuance of the Bonds provides for deposits to be
made to the Bond Fund in amounts sufficient to pay the principal of and interest on such Bonds
as the same become due.
(f) This resolution authorizing the issuance of the Bonds provides that the amount to
be accumulated and maintained in the Reserve Fund shall be in an amount equal to not less
than the average annual requirement (calculated on a Fiscal Year basis on the Outstanding
45156027.8/10202579
Bonds Similarly Secured as of the date of the last series of Bonds Similarly Secured after giving
effect to the issuance of the Bonds) for the payment of principal of and interest on all obligations
to be secured by a first lien on and pledge of the Pledged Revenue, and provides that any
additional amount to be maintained in the Reserve Fund shall be accumulated within not more
than 60 months from the date of the passage of the resolution authorizing the issuance of the
proposed Bonds.
WHEREAS, the Board of Directors of the Authority has determined that that resolution of
the Authority, dated March 25, 2002, which authorized "Greater Texoma Utility Authority
Contract Revenue Bonds, Series 2002 (City of Anna Project)" should be repealed and no longer
be of any force or effect except as may be stated herein; now, therefore:
BE IT RESOLVED AND ORDERED BY THE BOARD OF DIRECTORS OF THE
GREATER TEXOMA UTILITY AUTHORITY:
SECTION 1: Authorization -Designation -Principal Amount -Purpose. Revenue
bonds of the Authority shall be and are hereby authorized to be issued as a series in the
aggregate principal amount of $1,965,000 to be designated and bear the title "Greater Texoma
Utility Authority Contract Revenue Bonds, Series 2002 (City of Anna Project)," (hereinafter
referred to as the "Bonds"), for the construction, acquisition and improvement of wastewater
system facilities and necessary appurtenances for use by the City of Anna, Texas (the "City'),
all as set forth in Exhibit B hereto, and the payment of all costs incident and related to the
acquisition and financing thereof, pursuant to authority conferred by and in conformity with. the
Constitution and the Laws of the State of Texas, including Chapter 97, Acts of the 66th
Legislature,. Regular Session 1979 as amended by Chapter 398, Acts of the 68th Legislature,
Regular Session 1983,
SECTION 2: Interest Rates - Payment Dates —Fully Registered Obligations -Bond
Date -Authorized Denominations - Stated Maturities.
(a) The following definitions relate to the interest rat(s) on the Bonds and the
payment of principal of and interest on the Bonds:
(i) "(ost of Funds" means TAFA's cost of capital, including costs of issuance of
TAFA's capital, calculated at the inception of the loan commitment, and which shall be
recalculated and adjusted on the Rate Determination Date.
(ii) "Fixed Rate" means the per annum rate or rates of interest the Bonds shall
bear during the Fixed Rate Period.
(iii) "Fixed Rate Conversion Date" means the date on which the Bonds begin to
bear interest at the Fixed Rate pursuant to this Section, and the Fixed Rate Conversion
Date shall be a Principal Payment Date.
(iv) "Fixed Rate Period" means the period beginning on the Fixed Rate
Conversion Date and ending at the stated maturity or maturities of the Bonds, during
which the Bonds bear interest at one or more Fixed Rates.
(v) "Initial Interest Payment Date" means May 13 2003.
45156027.8/10202579 2
(vi) "Initial Rate Period" means the period from the Issuance Date through the
first Principal Payment Date, during which period the Bonds bear interest at the single
rate of interest set forth in this Section.
(vii) "Interest Payment Date" means, in each year while any Bond remains
outstanding; each Principal Payment Date, the first day of that month which is six (6)
months prior to each Principal Payment Date not inclusive of the first Principal Payment
Date, and the date of redemption of any Bond prior to its maturity.
(viii) "issuance Date" means the date the Bonds are delivered to and paid for by
TAFA.
(ix) "Principal Payment Date" means, with respect to the first Principal Payment
Date, May 11 2003, and thereafter: (A) the first day of that month which follows the Rate
Determination Date during each Variable Rate Period;. (B) the Fixed Rate Conversion
Date, which commences the Fixed Rate Period; and (C) the same first day of such
month as the Fixed Rate Conversion Date in each subsequent year during the Fixed
Rate Period. The Principal Payment Date for any Bond shall not change in the event
TAFA ceases to be the Holder of that Bond or any other Bond.
(x) "Rate Determination Date" means the last business day that is at least ten
(10) days prior to the first day of May in each year prior to the Fixed Rate Conversion
Date.
(xi) "TAFA" means the Texas Agricultural Finance Authority.
(xii) "Variable Rate" means the fluctuating interest rate determined annually on
each Rate Determination Date which is not that Rate Determination Date upon which
TAFA has determined that the Bonds shall bear interest at a Fixed Rate.
(xiii) "Variable Rate Period" means the Initial Rate Period and each. year
thereafter, if any, during which the Bonds bear interest at a Variable Rate.
All other capitalized terms not defined in this Section are primarily defined. in Section 10
of this Resolution or otherwise within the context of this Resolution.
(b) The Bonds shall be issued as fully registered obligations only, shall be da4-
7 shall be in denominations of $51000 or any integral multiple
(within a Stated Maturity) thereof,. and shall become due and. payable on their Principal Payment
Dates in each year, with the first such Principal Payment Date occurring in 2003, and in such
principal amounts (the "Stated Maturities") in accordance with. the following schedule:
PRINCIPAL PAYMENT DATE PRINCIPAL AMOUNT
May 1, 2003 $ 40,000
May 1, 2004 45,000
May 1, 2005 507000
May 1, 2006 507000
May 17 2007 55,000
May 1, 2008 40,000
45156027.8/10202579 3
May 1, 2009 35,000
May 1, 2010 40,000
May 1, 2011 45,000
May 11 2012 457000
May 12 2013 507000
May 1, 2014 457000
May 1, 2015 40,000
May 1, 2016 45,000
May 17 2017 45,000
May 1, 2018 457000
May 1, 2019 451000
May 1, 2020 507000
May 11 2021 170,000
May 1, 2022 1807000
May 1, 2023 1907000
May 1, 2024 1957000
May 1, 2025 205,000
May 1, 2026 2157000
The Bonds shall bear interest on the unpaid principal amounts from the Issuance Date,
and interest shall be calculated upon the basis of a 360-day year of twelve 30-day months. The
Bonds shall initially bear interest at the rate of 4.43% per annum from the Issuance Date
through the first Principal Payment Date, and such interest accruing during this Initial Rate
Period shall be paid on the Initial Interest Payment Date and the first Principal Payment Date.
Thereafter,. the Bonds shall bear interest at the Variable Rate determined in accordance with the
provisions of this Section, except that the interest rate applicable to the Bonds owned. by TAFA
may be converted one time to a Fixed Rate at the direction of TAFA. After conversion of the
interest rate on the Bonds to a Fixed Rate the interest rate is not subject to conversion. In each
case, the Variable Rate for the Variable Rate Period in question shall be determined by TAFA
and shall be TAFA's Cost of Funds plus 150 basis points.. In each case, the. Variable Rate for
the Variable Rate Period in question shall be determined by TAFA on the Rate Determination
Date and shall go into effect the first day following the corresponding Principal Payment Date.
A Fixed Rate shall be determined by TAFA on a Rate Determination Date and shall go
into effect the first day following the con esponding. Principal Payment Date, which is also the
Fixed Rate Conversion Date. The Fixed Rate shall be effective ,from and including the
commencement date of such Fixed Rate Period and shall remain •in effect through and including
the last day thereof. The Fixed Rate shall be made available by TAFA to the Paying
Agent/Registrar by the close of business on that Rate Determination Date.
Notwithstanding the foregoing, the interest rate on any Bond which ceases to be owned
by TAFA prior to the Fixed Rate Conversion Date shall be 5.01 %per annum from the date such
Bond ceases to be owned by TAFA to the stated maturity or maturities of such Bond or Bonds.
The interest rate on any Bond which ceases to be owned by TAFA is not subject to conversion
or adjustment as described in the preceding paragraphs.
Notwithstanding anything. in this Resolution to the contrary, in no event shall the
aggregate of the interest on any Bond plus any other amounts paid in connection therewith
which are deemed "interest" under the laws of the State of Texas, including specifically,
V.T.C.A., Chapter 1204, Government Code, (hereinafter referred to as "Applicable Law") ever
exceed the lesser of fifteen percent (15.00 %) or the maximum amount of interest which could
45156027.8/10202579 4
be charged and paid on such Bond under Applicable Law, and if any amount of interest taken or
received by any Holder shall be in excess of the maximum amount of interest which, under
Applicable Law, could lawfully have been collected and paid thereon, then the excess shall be
deemed a mathematical error by the Authority and such Holder and shall be refunded promptly
to the Authority. All amounts paid or agreed to be paid in connection with the indebtedness
evidenced by the Bonds which under Applicable Law would be deemed "interest" shall, to the
extent permitted by Applicable Law, be amortized, prorated, allocated, and spread throughout
the full term of such obligation.
SECTION 3: Terms of Payment - PaVinq Agent/Registrar. The principal of, premium, if
any, and the interest on the Bonds, due and payable by reason of maturity, redemption or
otherwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter
called the "Holders") appearing on the registration and transfer books (the "Security Register")
maintained by the Paying Agent/Registrar, and the payment thereof shall be in any coin or
currency of the United States of America, which at the time of payment is legal tender for the
payment of public and private debts, and shall be without exchange or collection charges to the
Holders. A copy of the Security Register shall be maintained within the State of Texas at all
times.
The selection and appointment of Bank of Texas. N.A., as Paying Agent/Registrarfnr the
Bonds is hereby approved and confirmed, and the Authority agrees and covenants to cause to
be kept and maintained at the principal office of the Paying Agent/Registrar books and records
the "Security Register") for the registration, payment and transfer of the Bonds, all as provided
herein, in accordance with the terms and provisions of a "Paying Agent/Registrar Agreement",
substantially in the form attached hereto as Exhibit C. and such reasonable. rules and
regulations as the Paying Agent/Registrar and Authority may prescribe;, and the President,
Secretary, and/or Assistant Secretary of the Board of Directors of the Authority are authorized to
execute and deliver such Agreement in connection with the delivery of the Bonds.. The Authority
covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds are paid
and discharged, and. any successor Paying Agent/Registrar shall be a commercial bank, trust
company, financial institution or other entity qualified and authorized to serve in such capacity
and perform the duties and services of Paying. Agent/Registrar. Upon any change in the Paying
Agent/Registrar for the Bonds, the Authority agrees to promptly cause a written notice thereof to
be sent to each Holder by United States mail, first class postage prepaid,. which notice shall also
give the address of the new Paying Agent/Registrar.
Principal of and premium, if any,. on the Bonds shall be payable at the Stated Maturities
or the redemption thereof, only upon presentation and surrender of the Bonds to the Paying
Agent/Registrar at its principal office in Tulsa, Oklahoma (the "Designated Payment/Transfer
Office"). Interest on each Bond shall be paid to the Holder whose name appears in the Security
Register at the close of business on the Record Date (the fifteenth (15t') day of the month next
preceding each interest payment date) and shall be paid by the Paying Agent/Registrar (i) by
Federal Funds wire transfer to a bank account to be designated by the Holder, such wire
transfer to be at the expense of the Authority or (ii) by such other method, acceptable to the
Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for
the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal
holiday, or a day on which banking institutions in the city where the Paying Agent/Registrar is
located are authorized by law or executive order to close, then the date for such payment shall
be the next succeeding day that is not such a Saturday, Sunday, legal holiday, or day on which
banking institutions are authorized to close; and payment on such date shall have the same
force and effect as if made on the original date payment was due.
45156027.8/10202579 5
In the event of a nonpayment of interest on a scheduled payment date, and for thirty (30)
days thereafter, a new record date for such interest payment (a "Special Record Date") will be
established by the Paying Agent/Registrar, if and when funds for the payment of such interest
have been received from the Authority. Notice of the Special Record Date and of the scheduled
payment date of the past due interest (which shall be fifteen (15).days after the Special Record
Date) shall be sent at least five (5) business days prior to the Special Record Date by United
States mail, first class postage prepaid, to the address of each Holder appearing on the Security
Register at the close of business on the last business day next preceding the date of mailing of
such notice.
SECTION 4: Redemption. (a) Optional Redemption.
(i) Upon the occurrence of a Redemption Event (defined in Section 10 hereof)
the Bonds shall be subject to redemption prior to maturity, at the option of the Authority,
in whole or in part, in inverse order of maturity if fewer than all, in principal amounts of
$5,000 or any integral multiple thereof (and if within a Stated Maturity selected by lot by
the Paying Agent/Registrar), on any date during the continuance of the Redemption
Event, at the redemption price of par plus accrued interest to the date of redemption.
(ii) The Bonds having Stated Maturities on and after May 1, 2013, shall be
subject to redemption prior to maturity, at the option of the Authority, in whole or in part,
in inverse order of maturity if fewer than all, in principal amounts of $5,000 or any
integral multiple thereof (and if within a Stated Maturity selected by lot by the Paying
Agent/Registrar), on May 1, 2012, or on any date thereafter at the redemption price of
par plus accrued interest to the date of redemption.
(b) Exercise of Redemption Option. At least forty-five (45) days. prior to a
redemption date for the Bonds (unless a shorter notification period shall be satisfactory to the
Paying Agent/Registrar),. the Authority shall notify the Paying Agent/Registrar of the decision to
redeem Bonds, the principal amount of each Stated Maturity to be redeemed, and the date of
redemption therefor. The decision of the Authority to exercise the right to redeem Bonds shall
be entered in the minutes of the governing body of the Authority.
(c) Selection of Bonds for Redemption. If fewer than all Outstanding Bonds of the
same Stated Maturity are to be redeemed on a redemption date, the Paying. Agent/Registrar
shall treat such Bonds as representing the number of Bonds Outstanding, which is obtained by
dividing the principal amount of such Bonds by $5,000, and shall select the Bonds to be
redeemed within such Stated Maturity by lot.
(d) Notice of Redemption. Not fewer than thirty (30) days prior to a redemption date
for the Bonds, a notice of redemption shall be sent by United States mail, first class postage
prepaid, in the name of the Authority and at the Authority's expense, to each. Holder of a Bond
to be redeemed in whole or in part at the address of the Holder appearing on the Security
Register at the close of business on the business day next preceding the date of mailing such
notice, and any notice of redemption so mailed shall be conclusively presumed to have been
July given irrespective of whether received by the Holder.
All notices of redemption shall (i) specify the date of redemption for the Bonds,
(ii) identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be
redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price,
(iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall
45158027.8/10202579 6
become due and payable on the redemption date specified, and the interest thereon, or on the
portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the
redemption date, and (v) specify that payment of the redemption price for the Bonds, or the
principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer
Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the
Holder. If a Bond is subject by its terms to prior redemption and has been called for redemption
and notice of redemption thereof has been duly given as hereinabove provided, such Bond (or
the principal amount thereof to be redeemed) shall become due and payable and interest
thereon shall cease to accrue from and after the redemption date therefor; provided moneys
sufficient for the payment of such Bond (or of the principal amount thereof to be redeemed) at
the then applicable redemption price are held for the purpose of such payment by the Paying
Agent/Registrar.
SECTION 5: Registration -Transfer -Exchange of Bonds -Predecessor Bonds.. A
Security Register relating to the registration, payment, and transfer or exchange of the Bonds
shall at all times be kept and maintained by the Authority at the Designated Payment/Transfer
Office of the Paying Agent/Registrar, as provided herein and in accordance with rules and
regulations as the Paying Agent/Registrar and the Authority may prescribe. The Paying
Agent/Registrar shall obtain, record, and maintain in the Security Register the name and
address of each and every Holder of the Bonds issued under and pursuant to the provisions of
this Resolution, or if appropriate, the nominee thereof. Any Bond may be transferred or
exchanged for Bonds of other authorized denominations by the Holder, in person or by his duly
authorized agent, upon surrender of such Bond to the Paying Agent/Registrar for cancellation,
accompanied by a written instrument of transfer or request for exchange duly executed by the
Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar.
Upon surrender of any Bond (other than the Initial Bonds authorized. in Section 8 hereof)
for transfer at the Designated Payment/ I ransfer Office of the Paying Agent/Registrar, the
Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or
transferees, one or more new Bonds of like series and authorized denominations and having the
same Stated Maturity and being of a like aggregate principal amount as the Bond or Bonds
surrendered for transfer.
At the option of the Holder, Bonds (other than the Initial Bonds authorized in Section 8
hereof) may be exchanged for other Bonds of like series and authorized denominations and
having the same Stated Maturity, bearing the same rate of interest and being of a like aggregate
principal amount as the Bonds surrendered for exchange, upon surrender of the Bonds to be
exchanged at the Designated Payment/Transfer Office of the Paying Agent/Registrar.
Whenever any Bonds are surrendered for exchange, the Paying Agent/Registrar shall register
and deliver new Bonds to the Holder requesting the exchange.
All Bonds issued in any:transfer or exchange of Bonds shall be delivered to the Holders
at the Designated Payment/Transfer Office of the Paying Agent/Registrar or sent by United
States mail, first class postage prepaid, to the Holders, and, upon the registration and delivery
thereof, the same shall be the valid obligations of the Authority, evidencing the same obligation
to pay, and entitled to the same benefits under this Resolution, as the Bonds surrendered in
such transfer or exchange.
All transfers or exchanges of Bonds pursuant to this Section shall be made without
expense or service charge to the Holder, except as otherwise herein provided, and except that
the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or
45156027.8/10202579 7
exchange of any tax or other governmental charges required to be paid with respect to such
transfer or exchange.
Bonds canceled by reason of an exchange or transfer pursuant to the provisions hereof
are hereby defined to be "Predecessor Bonds," evidencing all or a portion, as the case may be,
of the same obligation to pay evidenced by the new Bond or Bonds registered and delivered in
the exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any
Mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued,
registered and delivered in lieu thereof pursuant to the provisions of Section 29 hereof, and
such new replacement Bond shall be deemed to evidence the same obligation as the mutilated,
lost, destroyed, or stolen Bond.
Neither the Authority nor the Paying Agent/Registrar shall be required to issue or
transfer to an assignee of a Holder any Bond called for redemption, in whole or in part, within
forty-five (45) days of the date fixed for the redemption of such Bond; provided, however, such
limitation on transferability shall not be applicable to an exchange by the Holder of the
unredeemed balance of a Bond called for redemption in part.
SECTION 6: Book Entry Only Transfers and Transactions. Notwithstanding the
provisions contained in this Resolution relating to the payment, and transfer/exchange of the
Bonds, the Authority hereby approves and authorizes the use of "Book -Entry Only" securities
clearance, settlement and transfer system provided by The Depository Trust Company ("DTC"),
a limited purpose trust company organized under the laws of the State of New York, in
accordance with the requirements and procedures identified in the current DTC Operational
Arrangements memorandum, as amended, the Blanket Issuer Letter of Representation, by and
between the Authority and DTC, and the Letter of Representation from the Paying
Agent/Registrar to DTC (collectively, the "Depository Agreement") relating to the Bonds.
The Initial Bond shall be delivered against payment to TAFA. TAFA is authorized to
surrender the Initial Bond to the Paying/Agent Registrar for exchange. Bonds issued in
exchange shall be registered in the name of Cede & Co., as nominee of DTC, as Holder of the
Bonds, and held in the custody of DTC. Unless otherwise requested by DTC, a single certificate
will be issued and delivered to DTC for each maturity of the Bonds. Beneficial owners of Bonds
will not receive physical delivery of Bond certificates except as provided hereinafter. For so long
as DTC shall continue to serve as securities depository for the Bonds as provided herein, all
transfers of beneficial ownership interests will be made by book -entry only, and no investor or
other party purchasing, selling or otherwise transferring beneficial ownership of Bonds is to
receive, hold or deliver any Bond certificate.
With respect to Bonds registered in the name of Cede & Co., as nominee of DTC,. the
Authority and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC
Participant or to any person on whose behalf a DTC Participant holds an interest in the Bonds.
Without limiting the immediately preceding sentence, the Authority and the Paying
Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the
records of DTC, Cede & Co., or any DTC Participant with respect to any ownership interest in
the Bonds, (ii) the delivery to any DTC Participant or any other person, other than a Holder of
the Bonds, as shown on the Registration Books, of any notice with respect to the Bonds,
including any notice of redemption, and (iii) the payment to any DTC Participant or any other
person, other than a Holder of the Bonds, as shown in the Registration Books, of any amount
with respect to principal of or premium, if any, or interest on the Bonds.
45156027.8/10202579 8
Replacement Bonds may be issued directly to beneficial owners of Bonds other than
DTC, or its nominee, but only in the event that (i) DTC determines not to continue to act as
securities depository for the Bonds (which determination shall become effective no less than
ninety (90) days after written notice to such effect to the Authority and the Paying
Agent/Registrar); or (ii) the Authority, subject to prior notice to and the prior written consent of
TAFA (so long as it holds any of the Bonds) has advised DTC of its determination (which
determination is conclusive as to DTC and the beneficial owners of the Bonds) that the interests
of the beneficial owners of the Bonds might be adversely affected if such book -entry only
system of transfer is continued. Upon occurrence of any of the foregoing events, the Authority
shall use its best efforts to attempt to locate another qualified securities depository. If the
Authority fails to locate another qualified securities depository to replace DTC, the Authority
shall cause to be authenticated and delivered replacement Bonds, in certificate form, to the
beneficial owners of the Bonds. In the event that the Authority makes the determination noted
in (ii) or (iii) above (provided that the Authority undertakes no obligation to make any
investigation to determine the occurrence of any events that would permit the Authority to make
any such determination), and has made provisions to notify the beneficial owners of Bonds of
such determination by mailing an appropriate notice to DTC, it shall cause to be issued
replacement Bonds in certificate form to beneficial owners of the Bonds as shown on the
records of DTC provided to the Authority.
Whenever, during the term of the Bonds, the beneficial ownership thereof is determined
by a book entry at DTC, the requirements in this Resolution of holding, delivering or transferring
Bonds shall be deemed modified to require the appropriate person or entity to meet the
requirements of DTC as to registering or transferring the book entry to produce the same effect.
If at any time, DTC ceases to hold the Bonds as securities depository, all references
herein to DTC shall be of no further force or effect.
SECTION 7: Execution -Registration. The Bonds shall be executed. on behalf of the
Authority by the President of the Board of Directors under its seal reproduced or impressed
thereon and attested by the Secretary or Assistant Secretary of the Board of Directors. The
signature of said officers on the Bonds may be manual or facsimile. Bonds bearing the manual
or facsimile signatures of individuals who are or were the proper officers of the Authority on the
Bond Date shall be deemed to be duly executed on behalf of the Authority, notwithstanding that
such individuals or either of them shall cease to hold such offices at the time of delivery of the
Bonds to the initial Holders and with respect to Bonds delivered in subsequent exchanges and
transfers, all as authorized and provided in V.T.C.A., Govemment Code, Chapter 1201, as
amended.
No Definitive Bond shall be entitled to any right or benefit under this Resolution, or be
valid or obligatory for any purpose,. unless there appears on such Bond a certificate of
registration substantially in the form provided in 9D, manually executed by an authorized officer,
employee or representative of the Paying Agent/Registrar, and such certificate duly signed upon
any Bond shall be conclusive evidence, and the only evidence, that such Bond has been duly
certified, registered and delivered.
No Initial Bond shall be entitled to any right or benefit under this Resolution or be valid or
obligatory for any purpose unless there appears on such. Initial Bond a certificate of registration
substantially in the form provided in Section 9C, manually executed by the Comptroller of Public
Accounts of the State of Texas, or his duly authorized agent.
45156027.8/10202579 9
SECTION 8: Initial Bonds. The Bonds herein authorized shall be initially issued either
(i) as a single fully registered Bond in the total principal amount of $1,965,000 with principal
installments to become due and payable as provided in Section 2 hereof and numbered T-1, or
(ii) as twenty-four (24) fully registered Bonds, being one bond for each year of maturity in the
applicable principal amount and numbered consecutively from. T-1 and upward (hereinafter
called the "Initial Bond") and, in either case, the Initial Bond shall be registered in the name of
the initial purchaser(s) or designee thereof. The'lnitial Bond shall be the Bonds submitted to the
Office of the Attorney General of the State of Texas for approval, certified and registered by the
Office of the Comptroller of Public Accounts of the State of Texas. and delivered to the initial
purchaser(s). Any time after the delivery of the Initial Bond, the Paying Agent/Registrar,
pursuant to written instructions from the initial purchaser(s), or the designee thereof, shall
cancel the Initial Bond delivered hereunder and exchange therefor definitive Bonds of
authorized denominations, Stated Maturities, principal amounts and bearing applicable interest
rates for transfer and delivery to the Holders named at the addresses identified therefor; all
pursuant to and in accordance with such written instructions from the initial purchaser(s), or the
designee thereof, and such other information and documentation as the Paying Agent/Registrar
may reasonably require.
SECTION 9: Forms. (a) Forms Generally. The Bonds, the Registration Certificate.
of the Comptroller of Public Accounts of the State of Texas to appear on the Initial Bond, the
Registration Certificate of Paying Agent/Registrar to appear on the definitive Bonds, and the
form of Assignment to appear on each of the Bonds shall be substantially in the forms set forth
in this Section with such appropriate insertions, omissions, substitutions, and other variations as
are permitted or required by this Resolution, and the Bonds may have such letters, numbers, or
other marks of identification (including identifying numbers and letters of the Committee on
Uniform Securities Identification Procedures of the American Bankers Association) and such
legends and endorsements (including insurance legends in the event the Bonds are purchased
with insurance and any reproduction of an opinion of counsel) thereon as may, consistently
herewith, be established by the Authority or determined by the officers executing. such Bonds as
evidenced by their execution. Any portion of the text of any Bond may be set forth on the
reverse thereof, with an appropriate reference thereto on the face of the Bond.
The definitive Bonds, and the Initial Bond, shall be printed, lithographed, engraved,
typewrittenI photocopied or otherwise reproduced in any other similar manner, all as determined
by the officers executing such Bonds as evidenced by their execution thereof.
(b) Form of Bond.
REGISTERED
NO.
45156027.8/10202579
United States of America
State of Texas
Counties of Cooke, Fannin, and Grayson
Greater Texoma Utility Authority
Contract Revenue Bonds, Series 2002
(City of Anna Project)
10
REGISTERED
Bond Date_ Interest Rate: Principal Payment Date: CUSIP NO.
August 1, 2002 As Described Below
Registered Owner:
Principal Amount:
DOLLARS
The Greater Texoma Utility Authority (hereinafter referred to as the "Authority"), for value
received, hereby promises to pay to the Registered Owner of this Bond (or its Predecessor
Bond) named above (the "Holder") or the registered assigns thereof, solely from the revenues
hereinafter identified, on the Principal Payment Date specified above, the Principal Amount
hereinabove stated (or so much thereof as shall not have been paid upon prior redemption) and
to pay interest accrued on this Bond (or its Predecessor Bond), all in accordance with the
following terms and at the rate or rates of interest computed as follows: This Bond shall bear
interest on the unpaid principal amount from the Issuance Date, and interest shall be calculated
upon the basis of a 360-day year of twelve 30-day months. This Bond shall initially bear interest
at the rate of 4.43% per annum from the Issuance Date through the first Principal Payment
Date, which is May 1, 2003, and such interest accruing during this Initial Rate Period shall be
paid on the Initial Interest Payment Date, May 1, 2003. Thereafter, this Bond shall bear interest
at the Variable Rate determined as stated herein (and as set forth in the Resolution authorizing
the issuance and sale of the Bonds (the "Resolution"), to which reference is made for definitions
of capitalized terms not defined herein and for other full and complete particulars), except that
the interest rate applicable to the Bonds may be converted one time to a Fixed Rate at the
direction of the Texas Agricultural Finance Authority ("TAFA"). After conversion of the interest
rate on the Bonds to a Fixed Rate the interest rate is not subject to conversion. In each case,
the Variable Rate for the Variable Rate Period in question shall be determined by TAFA and
shall be TAFA's Cost of Funds plus 150 basis points. In each case, the Variable Rate for the
Variable Rate Period in question shall be determined by TAFA on the Rate Determination Date
and shall go into effect the first day following the corresponding Principal Payment Date.
A Fixed Rate shall be determined by TAFA on a Rate Determination Date and shall go
into effect the first day following the corresponding Principal Payment Date, which is also the
Fixed Rate Conversion Date. The Fixed Rate shall be effective from and including the
commencement date of such Fixed Rate Period and shall remain in effect through and including
the last day thereof. The Fixed Rate shall be made available by TAFA to the Paying
Agent/Registrar by the close of business on that Rate Determination Date.
Notwithstanding the foregoing, the interest rate on any Bond which ceases to be owned
by TAFA prior to the Fixed Rate Conversion Date shall be 5.01 % per annum from the date such
Bond ceases to be owned by TAFA to the Stated Maturity or maturities of such Bond or Bonds.
The interest rate on any Bond which ceases to be owned by TAFA is not subject to conversion
or adjustment as described in the preceding paragraphs.
Notwithstanding anything in this Resolution to the contrary, in no event shall the
aggregate of the interest on any Bond plus any other amounts paid in connection therewith
which are deemed "interesf under the laws of the State of Texas, including specifically,
V.T.C.A., Chapter 1204, Government Code (hereinafter referred to as "Applicable Law") ever
exceed the lesser of fifteen percent (15.00 %) or the maximum amount of interest which could
be charged and paid on such Bond under Applicable Law, and if any amount of interest taken or
received by any Holder shall be in excess of the maximum amount of interest which, under
Applicable Law, could lawfully have been collected and paid thereon, then the excess shall be
45156027.8/10202579 11
deemed a mathematical error by the Authority and such Holder and shall be refunded promptly
to the Authority: All amounts paid or agreed to be paid in connection with the indebtedness
evidenced by the Bonds which under Applicable Law would be deemed "interest" shall, to the
extent permitted by Applicable Law, be amortized, prorated, allocated, and spread throughout
the full term of such obligation.
Interest on this Bond is payable on the Initial Interest Payment Date as stated above and
on each Interest Payment Date as defined in the Resolution. Principal of this Bond is payable at
its Stated Maturity or redemption to the Holder hereof, upon presentation and surrender, at the
Designated Payment/Transfer Office of Bank of Texas N.A., Tulsa, Oklahoma, the Paying
Agent/Registrar, or its successor. Interest is payable to the Holder of this Bond (or one or more
Predecessor Bonds, as defined in the Resolution) whose name appears on the "Security
Register" maintained by the Paying Agent/Registrar at the close of business on the "Record
Date", which is the fifteenth (15th) day of the month next preceding each Interest Payment Date,
and interest shall be paid by the Paying Agent/Registrar by Federal Funds wire transfer at the
expense of the Authority or by such other method acceptable to the Paying Agent/Registrar,
requested by, and at the risk and expense of the Holder. All payments of principal of, premium,
if any, and interest on this Bond shall be in any coin or currency of the United States of America,
which at the time of payment is legal tender for the payment of public and private debts.
If the date for payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, a legal holiday, or a day on which banking institutions in the city where the Designated
Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by law or
executive order to close, then the date for such payment shall be the next succeeding day that
is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are
authorized to close; and payment on such date shall have the same force and effect as if made
on the original date payment was due.
In the event of nonpayment of interest on a scheduled payment date, and. for thirty (30)
days thereafter, a new record date for such interest payment (a "Special Record Date") will be
established by the Paying Agent/Registrar, if and when funds for the payment of such interest
have been received from the Authority. Notice of the Special Record. Date and of the scheduled
payment date of the past due interest (which shall be fifteen (15) days after the Special Record
Date) shall be sent at least five (5) business days prior to the Special Record Date by United
States mail, first class postage prepaid, to the address of each Holder appearing on the Security
Register at the close of business on the last business day next preceding the date of mailing of
such notice.
This Bond is one ofi the series specified in its title issued in the aggregate principal
amount of $1,965,000 (herein referred to as the "Bonds") pursuant to a Resolution adopted by
the governing body of the Authority (herein referred to as the "Resolution"), for the construction,
acquisition, and improvement of wastewater system facilities and necessary appurtenances for
use by the City of Anna, Texas, and the payment of all costs incident and related to the
acquisition and financing thereof, under and in strict conformity with the Constitution and laws of
the State of Texas.
Upon the occurrence of a Redemption Event (defined in the Resolution) the Bonds shall
be subject to redemption prior to maturity, at the option of the Authority, in whole or in part, in
inverse order of maturity if fewer than all, in principal amounts of $5,000 or any integral multiple
thereof (and if within a Stated Maturity selected by lot by the Paying Agent/Registrar), on any
date during the continuance of the Redemption Event, at the redemption price of par plus
45156027.8/10202579 12
accrued interest to the date of redemption. The Bonds maturing on and after the May 1, 2013;
may be redeemed prior to their Stated Maturities, at the option of the Authority, in whole or in
part, in inverse order of maturity if less than all, in principal amounts of $5,000 or any integral
multiple thereof (and if within a Stated Maturity selected by lot by the Paying Agent/Registrar) on
May 1, 2012, or on any date thereafter, at the redemption price. of par, together with accrued
interest to the date of redemption and upon thirty (30) days prior written notice being sent by
United States mail, first class postage prepaid, to the Holders of the Bonds to be redeemed and
subject to the terms and provisions relating thereto contained in the Resolution.. If this Bond. (or
any portion of the principal sum hereof) shall have been duly called for redemption and notice of
such redemption duly given, then upon such redemption date this Bond (or the portion of the
principal sum hereof to be redeemed) shall become due and payable, and, if moneys for the
payment of the redemption price and the interest accrued on the principal amount to be
redeemed to the date of redemption are held for the purpose of such payment by the Paying
Agent/Registrar, interest shall cease to accrue and be payable hereon from and after the
redemption date on the principal amount hereof to be redeemed.
In the event of a partial redemption of the principal amount of this Bond, payment of the
redemption price of such principal amount shall be made to the Holder only upon presentation
and surrender of this Bond to the Paying Agent/Registrar at the Designated Payment/Transfer
Office and there shall be issued, without charge therefor to the Holder hereof, a new Bond or
Bonds of like maturity and interest rate in any authorized denominations provided by the
Resolution for the then unredeemed balance of the principal sum hereof. If this Bond is selected
for redemption, in whole or in part, the Authority and the Paying Agent/Registrar shall not be
required to transfer this Bond to an assignee of the Holder within thirty (30) days of the
redemption date therefor; provided, however, such limitation on transferability shall not be
applicable to an exchange by the Holder of the unredeemed balance hereof in the event of its
redemption in part.
The Bonds constitute special obligations of the Authority, and, together with any
Additional Bonds, if issued, and the Previously Issued Bonds, are payable as to principal and
interest solely from and equally secured by a lien on the Pledged Revenue of the Authority
(identified and defined in the Resolution,. and including revenues to be received under and
pursuant to a Contract For Water Supply and Sewer Service between the Authority and the City
of Anna, Texas, dated as of December 10, 1996, together with all amendments thereto).
Reference is hereby made to the Resolution, copies of which are on file in the Designated
Payment/Transfer Office of the Paying Agent/Registrar, and to all of the provisions of which the
Holder by his acceptance hereof hereby assents, for definitions of terms; the description of and
the nature and extent of the revenues pledged for the payment of this Bond; the terms and
conditions relating .to the transfer or exchange of this Bond; the conditions upon which the
Resolution may be amended or supplemented with or without the consent of the Holders; the
rights, duties, and obligations of the Authority and the Paying Agent/Registrar; the terms and
provisions upon which this Bond may be discharged at or prior to its maturity or redemption, and
deemed to be no longer Outstanding thereunder; and for the other terms and provisions thereof.
Capitalized terms used herein have the same meanings assigned in the Resolution.
The Authority expressly reserves the right to issue further and additional revenue bond
obligations in all things on a parity with the Bonds, payable solely from and equally secured. by a
lien on the Pledged Revenue described above; provided, however, that any and all such
Additional Bonds may be so issued only in accordance with and subject to the covenants,
conditions, limitations and restrictions relating thereto which are set out and contained in the
Resolution, to which reference is hereby made for more complete and full particulars.
45156027.8/10202579 13
The Holder hereof shall never have the right to demand payment of this obligation out of
any funds raised or to be raised by taxation.
This Bond, subject to certain limitations contained in the Resolution, may be transferred
on the Security Register only upon its presentation and surrender at the Designated
Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the
Paying Agent/Registrar duly executed by, the Holder hereof, or his duly authorized agent. When
a transfer on the Security Register occurs, one or more new fully registered Bonds of the same
Stated Maturity, of authorized denominations, bearing the same rate of interest, and being of the
same aggregate principal amount will be issued by the Paying Agent/Registrar to the
designated transferee or transferees.
The Authority and the Paying Agent/RegistrarI and any agent of either, shall treat the
Holder whose name appears on the Security Register (i) on the Record Date as the owner
entitled to payment of interest hereon, (ii) on the date of surrender of this Bond as the owner
entitled to payment of principal hereof at its Stated Maturity or its redemption, in whole or in part,
and (iii) on any other date as the owner for all other purposes, and neither the Authority nor the
Paying Agent/Registrar, or any agent of either, shall be affected by notice to the contrary.. In the
event of nonpayment of interest on a scheduled payment date and for thirty (30) days thereafter,
a new record date for such interest payment (a "Special Record Date") will be established by
the Paying Agent/Registrar, if and when funds for the payment of such interest have been
received from. the Authority. Notice of the Special Record Date and of the scheduled payment
date of the past due interest (which shall be fifteen (15) days after the Special Record Date)
shall be sent at least five (5) business days prior to the Special Record Date by United States
mail, first class postage prepaid, to the address of each Holder appearing on the Security
Register at the close of business on the last business day next preceding the date of mailing of
such notice.
It is hereby certified, covenanted, and represented that all acts,. conditions, and things
required to be performed, exist, and. be done precedent to or in the issuance of this Bond in
order to render the same a legal, valid and binding obligation of the Authority have been
performed, exist, and have been done, in regular and .due time, form, and manner, as required
by law, and that the issuance of the Bonds does not exceed any constitutional or statutory
limitation. In case any provision in. this Bond or any application thereof shall be invalid, illegal,
or unenforceable, the validity, legality, and enforceability of the remaining provisions and
applications shall not in any way be affected or impaired thereby. The terms and provisions of
this Bond and the Resolution shall be construed in accordance with and shall be governed by
the laws of the State of Texas.
IN WITNESS WHEREOF, the Board of Directors of the Authority has caused this Bond
to be duly executed under the official seal of the Authority as of the Bond Date.
GREATER TEXOMA UTILITY AUTHORITY
President, Board of Directors
ATTEST:
45156027.8/10202579 14
Secretary, Board of Directors
(SEAL)
(c) *Form of Registration Certificate of Comptroller of Public Accounts to appear on
Initial Bonds only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS
( REGISTER NO.
THE STATE OF TEXAS
1 HEREBY CERTIFY that this Bond has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and duly registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
[*NOTE TO PRINTER: Do not print on Definitive Bonds.]
(d) Form of Certificate of Paying Agent/Registrar to appear on the definitive Bonds.
CERTIFICATE OF PAYING AGENT/REGISTRAR
This Bond -has been duly issued under the provisions of the within -mentioned
Resolution; the bond or bonds of the above entitled and designated series originally delivered
having been approved by the Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts, as shown by the records of the Paying Agent/Registrar.
The principal office of the Paying Agent/Register in Tulsa, Oklahoma is the "Designated
Payment/Transfer Office" for this Bond.
45150027.8/10202579
15
Registration Date:
(e) Form of Assignment.
BANK OF TEXAS N.A.,
as Paying Agent/Registrar
By:
Authorized Signature
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto
(Print or typewrite name, address, and zip code of transferee:)
(Social Security or other identifying number: )the within Bond and all rights
thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration thereof, with full power of
substitution in the premises.
DATED:
Signature Guaranteed:
NOTICE: The signature on this
assignment must correspond with the
name of the registered owner as it
appears on the face of the within Bond in
every pafticular
(f) The Initial Bond shall be in the form set forth in paragraph B of this Section,
except that the form of a single fully registered Inal Bond shall be modified as follows:
(i) immediately under the name of the bond the headings "Interest Rate",
"Stated Maturity" and "CUSIP NO" shall be omitted;
paragraph one shall read as follows:
The Greater Texoma Utility Authority (hereinafter referred to as the "Authority"), for value
received, hereby promises to pay to the Registered Owner named above (the "Holder") or the
registered assigns thereof, solely from the revenues hereinafter identified, on each Principal
Payment Date and in principal amounts in accordance with the following schedule:
PRINCIPAL PAYMENT DATE
PRINCIPAL PAYMENT AMOUNT
(Information to be inserted from schedule in
Section 2 hereof.)
45156027.8/10202579 'i 6
(or so much thereof as shall not have been paid upon prior redemption) and to pay interest
accrued on the Bonds (or their Predecessor Bonds), all in accordance with the following terms
and at the rate or rates of interest computed as follows: The Bonds shall bear interest on the
unpaid principal amount from the Issuance Date, and interest shall be calculated upon the basis
of a 360-day year of twelve 30-day months. The Bonds shall .initially bear interest at the rate of
4.43% per annum from the Issuance Date through the Initial Interest Payment Date, May 1,
2003, and such interest accruing during this Initial Rate Period shall be paid on the Initial
Interest Payment Date, May 11 2003. Thereafter, the Bonds shall bear interest at the Variable
Rate determined as stated herein (and as set forth in the Resolution authorizing the issuance
and sale of the Bonds (the "Resolution"), to which reference is made for definitions of capitalized
terms not defined herein and for other full and complete particulars), except that the interest rate
applicable to the Bonds may be converted one time to a Fixed Rate at the direction of the Texas
Agricultural Finance Authority ("TAFA"). After conversion of the interest rate on the Bonds to a
Fixed Rate the interest rate is not subject to conversion. In each case, the Variable Rate for the
Variable Rate Period in question shall be determined by TAFA and shall be TAFA's Cost of
Funds plus 150 basis points. In each case,. the Variable Rate for the Variable Rate Period in
question shall be determined by TAFA on the Rate Determination Date and shall go into effect
the.first day following the corresponding Principal Payment Date.
SECTION 10: Certain Definitions. In addition to terms defined elsewhere in this
Resolution, for all purposes of this Resolution and in particular for clarity with respect to the
issuance of the Bonds and the pledge and appropriation of the Pledged Revenues therefor, the
following definitions are provided:
(a) The term "Additional Bonds" shall mean parity revenue bonds issued in
accordance with the terms and conditions prescribed in Section 19 hereof.
(b) The term "Authorized Investments" shall mean the obligations identified in the
"Public Funds Investment act" kV. I C.A., Government Code, Chapter 2256), as amended.
(c) The term "Bonds Similarly Secured" shall mean Previously Issued Bonds, the
Bonds, and Additional Bonds.
(d) The term "Contract" or "Contract For Water Supply and Sewer Service" shall
mean that certain contract, dated as of the 10th day of December, 1996, by and between the
Authority and the City of Anna, Texas, together with amendments and supplements thereto
(which by the term of such instrument is designated as a supplement to such Contract), a
conformed copy of such Contract being attached hereto as Exhibit D for the purposes of
identification.
(e) The term "Cost of the Project" shall have the meaning assigned. such term in
Section 1.01 of the Contract.
(f) .The term "Depository Bank" means, currently, Bank of America, N.A., Denison,
Texas. The Authority reserves- its right to change from time to time its depository bank to any
other bank having trust powers. In the event of any change in the Authority's depository bank,
the Authority shall timely notify any parties affected by such change.
(g) The term "Fiscal Year" shall mean the twelve month operational period of the
Authority commencing October 1, of each year; provided, however, the Authority may change
45156027.8/10202579 17
the fiscal year to another period of not less than twelve (12) calendar months but in no event
may the fiscal year be changed more than one time in any three calendar year period:
(h) The term "Government Obligations" shall mean direct obligations of the United
States of America, including obligations the principal of and interest on which are
unconditionally guaranteed by the United States of America, and United States Treasury
obligations such as its State and Local Government Series in book -entry form.
(i} The term "Maintenance and Operation Expense of the Project" shall have the
meaning assigned such term in Section 1.01 of the Contract.
(j) The term "Outstanding" shall mean when used in this Resolution with respect to
Bonds or Bonds Similarly Secured, as of the date of determination, all Bonds theretofore issued
and delivered, except:
(i) those Bonds or' Bonds Similarly Secured canceled by .the Paying
Agent/Registrar or delivered to the Paying Agent/Registrar for cancellation;
(ii) those Bonds or Bonds Similarly Secured paid or deemed to be paid in
accordance with the provisions of Section 34 hereof, or substantially similar provisions
with respect to Bonds Similarly Secured, by the irrevocable deposit with the Paying
AgentlRegistrar, or an authorized escrow agent, of money or Government Obligations,
or both, in the amount necessary to fully pay the principal of, premium, if any, and
interest thereon to maturity or redemption, as the case may be, provided that, if such
Bonds or Bonds Similarly Secured are to be redeemed, notice of redemption thereof
shall have been duly given in accordance with the provisions therefor or irrevocably
provided to be given to the satisfaction of the Paying Agent/Registrar, or waived; and
(iii) those Bonds. or Bonds Similarly Secured that have been mutilated, destroyed, -
lost, or stolen and replacement Bonds have been registered and. delivered in. lieu thereof
as provided in Section 29 hereof or similar provisions with respect to Bonds Similarly
Secured.
(k) The term "Pledged Revenue" shall. mean (i) the amount received by the Authority
as monthly amortization payments by reason of Section 3.01(a) of the Contract, less the fees
and charges of the Paying Agent/Registrar with respect to Bonds Similarly Secured; plus (ii) the
amounts deposited into the Bond Fund created by Section 12(b) of this Resolution and the
amounts described in Section 3.01(b) of the Contract and deposited into the Reserve Fund
created by Section ,12(c) of'this Resolution; plus (iii) any amounts on deposit in the Proceeds
Fund, created and established by Section 26 of this Resolution, pending the application of such
money for the payment of the Cost of the Project.
(I) The term "Previously Issued Bonds" shall mean the "Greater Texoma Utility
Authority Contract Revenue Bonds, Series 1997 (City of Anna Project)" and the "Greater
Texoma Utility Authority Contract Revenue Bonds, Series, 2000 (City of Anna Project)".
(m) The term "Project" shall mean, with respect to the Bonds, the project described in
Exhibit 13, and, with respect to the Bonds Similarly Secured, collectively, the Projects described
as such in the exhibits attached to the Contract.
(n) The term "Redemption Event" with respect to the Bonds means:
45156027.8/10202579
m
_(i) Any point in time at which the Authority has deemed it proper to issue
Additional Bonds in accordance with Section 19 hereof and all of the conditions to
issuance set forth in such Section have been satisfied except that TAFA has failed to
provide and deliver to the Authority its written consent to the issuance of Additional
Bonds within thirty (30) days of such consent having been requested by the Authority.
(ii) Any time at which the fluctuating interest rate for the Bonds rises to 5.00%
APR or above, and while such effective interest rate of 5.00% APR or higher remains in
effect.
SECTION 11: Pledge. The Authority hereby covenants and agrees that all of the
Pledged Revenue is hereby irrevocably pledged for the payment of the Bonds Similarly
Secured, and the interest thereon, and it is hereby declared and resolved that the Bonds
Similarly Secured and the interest thereon shall constitute a lien upon said Pledged Revenue.
SECTION 12: Fund Designations: The Authority hereby covenants and agrees with. the
Holders of the Bonds Similarly Secured that all income, receipts and revenues derived from the
operation and ownership of the Project shall be kept separate from other funds or accounts of
the Authority. To that end the following special Funds (herein so called) are created and
established and maintained and continued by the resolution's authorizing the Previously Issued
Bonds shall exist and govern the application of the Pledged Revenue while the Bonds Similarly
Secured are Outstanding, to wit:
(a) Greater Texoma Utility Authority Revenue Fund, hereinafter called "Revenue
Fund". This Fund shall be kept in the Authority's Depository Bank.
(b) Greater Texoma Utility Authority Bond Interest and Sinking Fund,. hereinafter
called "Bond Fund". This Fund shall be deposited with the Depository Bank of the Authority as
trustee of the Pledged Revenue, and moneys deposited therein shall be used to pay principal of
and interest on Bonds Similarly Secured when and as the same shall become due and payable.
(c) Greater Texoma Utility Authority Bond Reserve Fund, hereinafter called "Reserve
Fund". This Fund shall be deposited with the Depository Bank of the Authority and money
deposited therein shall be used to pay the principal of and interest on Bonds Similarly Secured
falling due at any time when there is insufficient money available in the Bond Fund.
SECTION 13: Revenue Fund. .All revenues and income of any kind or character
received by the Authority by reason of (i) its ownership of all or a part of the Project, (ii) the
operation of the Project, or (iii) the Contract, shall be deposited in the Revenue Fund.
In the event money is deposited in the Revenue Fund from sources other than those
specified in Section 3.01 of the Contract, then such money may be invested or reinvested or
placed on time deposit in the same manner as the Reserve Fund pending its application to the
reduction of payments that would otherwise be required to be made by the District under
Section 3.01 of the Contract. Investment income and profits from the investment of the
Revenue Fund shall be retained therein until used as provided in this Section 13.
Money in the Revenue Fund shall be used in the following order of priority:
(1) Payments into the Bond Fund, as provided by Section 14;
45156027.8/10202579
19
(2) _ Payments into the Reserve Fund, as provided by Section 15;
(3) The curing of any deficiencies, as provided by Section 16;
(4) The payment of other costs of the Project including maintenance and operation
expenses not paid by the Authority and those purposes for which provision is made by
Section 3.01(c) through 3.01(e) of the Contract; and
(5) Applied as provided in Section 17.
SECTION 14: Bond Fund. The Authority hereby covenants and agrees to deposit into
the Bond Fund amounts sufficient to pay the principal of and interest on the Outstanding Bonds
Similarly Secured as the same becomes due. There shall be deposited in the Bond Fund, by
reason of the issuance of the Bonds, the following amounts:
From the Pledged Revenue on deposit in the Revenue Fund there shall be deposited in
the Bond Fund (i) beginning on or before the fifteenth day of the month next following delivery of
the Bonds and on or before the 15th day of each following month until and including the Initial
Interest Payment Date, an amount equal to not less than the fractional amount required in order
to have the amount of the first installment of interest on deposit by the fifteenth (15th) day of the
month next preceding the Initial Interest Payment Date, and thereafter on the fifteenth (15th) day
of each following month, an amount equal to not less than one -sixth (1/6) of the next installment
of interest; (ii) beginning on or before the fifteenth (15th) day of the month next following delivery
of the Bonds, and on or before the fifteenth (15) day of each following month until and including
the first Principal Payment Date, an amount equal to not less than the fractional amount
required in order to have the amount of the first installment of principal on deposit by the
fifteenth (15th) day of the month preceding the first Principal Payment Date, and thereafter on or
before the fifteenth (15th) day of each month, an amount equal to one -twelfth (1/12) of the next
annual principal payment to become due on the Bonds.
No Bond proceeds will be deposited to the Bond Fund.
The monthly deposits to the Bond Fund for the payment of principal and interest on the
Bonds shall continue to be made as herei"Cl bove provided until such time as (i) the total amount
on deposit in the Bond Fund is equal to the amount required to pay all Outstanding obligations
(principal and interest) for which said Fund was created and established or (ii) the obligations
payable therefrom are no longer Outstanding.
Moneys on deposit in the Bond Fund may be invested, to the extent such investments
are Authorized Investments, in United States Treasury bills, similar direct obligations of the
United States of America or in certificates of deposit of any bank that is a member of the
Federal Deposit Insurance Corporation (which are fully secured by a pledge of direct obligations
of, or obligations of which the principal and interest are guaranteed by the United States of
America to the extent such certificates are not insured) maturing at such dates and in such
manner as will provide cash to discharge interest and/or principal payments on Bonds Similarly
Secured when and as the same becomes due.
Investment income and profits realized from the investment of the Bond Fund shall be
retained therein until used as provided in this Section 14.
45156027.8/10202579 20
SECTION 15: Reserve Fund. The Authority hereby covenants and agrees with the
Holders of the Bonds Similarly Secured that it will provide for the accumulation of, and when
accumulated, will thereafter continuously maintain in the Reserve Fund an amount equal to 1.10
times the average annual principal and interest requirement of all Bonds Similarly Secured (the
Required Reserve Fund Amount). For purposes of calculating the interest requirement on any
Bonds Similarly Secured bearing interest at a variable rate, the interest rate shall be calculated
at 5.00%. The average annual requirement shall be calculated on a Fiscal Year basis on the
Outstanding Bonds Similarly Secured on the date of the last series of Bonds Similarly Secured
(after giving effect to the issuance of such last series). If any Bonds Similarly Secured are
subject to mandatory redemption, the amount required to be redeemed in any Fiscal Year shall
be treated as if it matured in that Fiscal Year. Any amounts on deposit in the Reserve Fund in
excess of such requirement shall be transferred to the Revenue Fund.
In addition, beginning on or before the fifteenth day of the first month following the
delivery the issuance of the Bonds, and on or before the fifteenth day of each month thereafter,
there .shall be deposited in the Reserve Fund an amount equal to not less than one -sixtieth
(1/60) of the Required Reserve Fund Amount, and such monthly deposits shall take into
account the amounts already on deposit in said Reserve Fund.
When the Required Reserve Fund Amount has been fully accumulated, said monthly
payments to said Fund may be terminated; provided, however, should the amount in such fund
be reduced, after the Required Reserve Fund Amount has been accumulated, monthly deposits
shall be resumed and continued to be made in an amount not less than one -twelfth (1/12) of the
amount of the deficiency, on or before the fifteenth day of each month until the Required
Reserve Fund Amount has been fully restored. -
Money in the Reserve Fund may be, at the option of the Authority, invested or reinvested
from time to time in Government Obligations or of direct obligations the principal and interest of
which are guaranteed by the United States of America or invested in direct obligations of or
participation certificates guaranteed by the Federal Intermediate Credit Banks,. Federal Land
Banks, in certificates of deposit of any bank that is a member of the Federal Deposit Insurance
Corporation and such certificates of deposit are fully insured and/or secured by a pledge of the
securities of any of the kind hereinabove specified, such obligations or securities to mature in
not more than ten (10) years from the date of such investment or not later than the final maturity
of the Bonds Similarly Secured Outstanding for which the Reserve Fund is established,
whichever is shorter. Any obligations in which money is so invested shall be kept in escrow with
the custodian of said Fund, and shall be promptly sold when • notified by the Authority that
moneys on deposit in the Bond Fund are insufficient to make a current interest and/or principal
payment on Bonds. Similarly Secured, and the proceeds of sale of such investments and/or
moneys on deposit in the Reserve Fund in an amount sufficient to meet the deficiency in the
Bond Fund shall be immediately transferred to the Bond Fund, without further notice or
authorization. The Authority shall direct the investment or moneys on deposit in the Reserve
Fund.
Investment income and profits realized from the investment of the Reserve Fund shall be
retained therein as may be necessary to fully fund or restore the Required Reserve Fund
Amount and thereafter shall be transferred to the Revenue Fund.
SECTION 16: Deficiencies in Funds. If in any month the Authority shall, for any reason,
fail to pay into the Bond Fund and Reserve Fund the full amounts above stipulated, amounts
equivalent to such deficiencies shall be set apart and paid into said Funds from the first
45156027.8/10202579 21
available and unallocated Pledged Revenue of the following month or months and such
payments shall be in addition to the amount hereinabove provided to be otherwise paid into said
Funds during such month or months.
SECTION 17: Remainder of Revenues. Money remaining in the Revenue Fund, after
making the payments required in items (1) through (4) of the last paragraph of Section 13, shall
be transferred to any other fund created by this Resolution and used as a credit to the amount
that would otherwise be required to be paid by the District under Section 3.01 of the Contract.
SECTION 18: Security of Funds and Their Transfer. All moneys on deposit in the
special Funds for which this Resolution makes provision (except any portions thereof as may be
at any time properly invested) shall be secured in the manner and to the fullest extent required
by the laws of the State of Texas for the security of public funds, and moneys in such special
Funds shall be used only for the purposes permitted by this Resolution.
While any of the Bonds are Outstanding, the Board of Directors shall cause to be
transferred to the Paying Agent/Registrar therefor, from funds on deposit in the Bond Fund and,
if necessary, in the Reserve Fund, amounts sufficient to fully pay and discharge promptly as
each installment of interest and principal of the Bonds accrues or matures or comes due by
reason of redemption prior to maturity, such transfer of funds to be made in such manner as will
cause immediately available funds to be deposited with the Paying Agent/Registrar for the
Bonds at the close of the business day next preceding the date of payment for the Bonds.
SECTION 19: Issuance of Additional Parity Bonds. In addition to the right, to issue
bonds of inferior lien as authorized by the laws of this State, the Authority reserves the right
hereafter to issue Additional Bonds. The Additional Bonds, when. issued, shall be payable from
and secured by a lien on and pledge of the Pledged Revenue in the same manner and to the
same extent as are the Bonds, and the Bonds and Additional Bonds shall in all respects be of
equal dignity. The Additional Bonds may be issued in one or more installments provided,
however, that no Additional Bonds, shall be issued unless and until the following conditions
have been met:
(a) The Authority is not then in default as to any covenant, condition or obligation
prescribed in a resolution authorizing the issuance of the Outstanding Bonds Similarly Secured
or the Contract (including any amendment or supplement thereto).
(b) A consulting engineer certifies to the Authority the.need for an estimated amount
of additional fnancing required for completion, expansion, enlargement or improvement of the
Project. The requirement that a certified. public accountant certify to the Authority that net
revenues of the City's utility system for the last completed Fiscal Year or a 12 consecutive
calendar month period ending no more than ninety (90) days preceding the adoption of the
resolution authorizing such Additional Bonds were at least 1.25 times the average annual debt
service requirements after giving effect to the issuance of the Additional Bonds is eliminated, as
such condition has been waived by the Texas Water Development Board, the single holder of
the Previously Issued Bonds. A copy of such waiver is attached hereto as Exhibit A.
(c) The City of Anna, Texas shall have approved the resolution(s) authorizing the
issuance of the Additional Bonds as to form and content and acknowledged that the payment of
principal of and interest on such Additional Bonds is payable, in whole or in part, from payments
to be made by the City of Anna, Texas, under and pursuant to the Contract.
45156027.8/10202579 22
. (d)_ The Additional Bonds are made to mature on May 1 or November 1 in each of
the years in which they are scheduled to mature.
(e) While TAFA is the Holder of any Outstanding Bonds Similarly Secured, The
Authority has requested and TAFA has provided its written consent to the issuance of the
Additional Bonds.
(f) The resolution authorizing the issuance of the Additional Bonds provides for
deposits to be made to the Bond Fund in amounts sufficient to pay. the principal of and interest
on such Additional Bonds as the same become due.
(g) The resolution authorizing the issuance of the Additional Bonds provides that the
amount to be accumulated and maintained in the Reserve Fund shall be in an amount equal to
not less than the average annual requirement (calculated on a Fiscal Year basis on the
Outstanding Bonds Similarly Secured as of the date of the last series of Bonds Similarly
Secured after giving effect to the issuance of the Additional Bonds) for the payment of principal
of and interest on all obligations to be secured by a lien on and pledge of the Pledged Revenue,
and provides that any . additional amount to be maintained in the Reserve Fund shall be
accumulated within not more than sixty (60) months from the date of the passage of the
resolution authorizing the issuance, of the proposed Additional Bonds. For purposes of
calculating the interest requirement on any Bonds Similarly Secured bearing interest at a
variable rate, the interest rate shall be calculated at 5.00%.
Bonds Similarly Secured may be refunded (pursuant to any law then available) upon
such terms and conditions as the governing body of the Authority may deem to the best interest
of the Authority, and if fewer than all such Outstanding Bonds Similarly Secured are refunded
the proposed refunding bonds shall be considered as "Additional Bonds" under the provisions of
this Section, but the certificate required in subdivision (b) shall not be required or be applicable
to the issuance of such refunding bonds.
In light of the consent of a!I holders of the Outstanding Previously Issued Bonds to the
deletion of the It:% to the issuance of Additional Bonds in the resolutions authorizing the
Outstanding Previously Issued Bonds for a certificate of a Certified Public Accountant showing
coverage of 1.25 times debt service, the Board finds that deletion of such requirement is not
detrimental to the holders of the Outstanding Previously Issued Bonds and such resolutions
shall be, and are hereby, amended to delete such requirement. It shall not be necessary to
restate .such resolutions. This resolution is sufficient evidence of the amendment to such
resolutions.
SECTION 20: Insurance. The Authority covenants that it wi!I at all times keep insured
such of its plants, structures, buildings, stations, machinery, equipment, apparatus, distribution
Pipelines and equipment, as are usually insured by corporations operating like properties, with a
responsible insurance company or companies, against risks, accidents or casualties against
which and to the extent insurance is usually carried by corporations operating like properties,
and will also at all times maintain worker's compensation insurance and insurance against
public liability and property damages to the extent permitted by law, in a reasonable amount
with a responsible insurance company or companies;. provided, however, that any time while
any contractor engaged in construction work shall be fully responsible therefor, or the Authority
has assumed such responsibility, the Authority shall not be required to carry such insurance.
45156027.8l10202579 23
SECTION 21: Records - Accounts - Accountin 6 Reports: The Authority hereby
covenants and agrees* that so long as any of the Bonds Similarly Secured or any interest
thereon remain Outstanding and unpaid, it will keep and maintain a proper and complete system
of records and accounts on a Fiscal Year basis pertaining to the operation of the Project
separate and apart from all other records and accounts of the. Authority in accordance with
accepted accounting practices and complete and correct entries shall be made of all
transactions relating to said Project. The Holder or Holders of any Bonds Similarly Secured, or
any duly authorized agent or agents of such Holders, shall have the right at all reasonable times
to inspect all such records, accounts and data relating thereto and to inspect the Project and all
properties comprising same. The Authority further agrees that within ninety (90) days following
the close of each Fiscal Year, or as soon thereafter as possible, it will cause an audit of such
books and accounts to be made by an independent firm of Certified Public Accountants or
Licensed Public Accountants. Each such audit, in addition to whatever other matters may be .
thought proper by the Accountant shall particularly include the following:
(a) A detailed statement of the receipts and disbursements from the Revenue Fund.
(b) A balance sheet as of the end of such Fiscal Year.
(c) The Accountant's comments regarding the manner in which the Authority and the
District have complied with the covenants and requirements of this Resolution and the Contract
and his recommendations for any changes or improvements in the operation, records and
accounts of the Authority.
(d) A list of the. insurance policies in force (if obtained by the Authority) at the end of
the Fiscal Year on the Project properties, setting out as to each policy the amount thereof, the
risk covered, the name of the insurer, and the policy's expiration date.
(e) A list of the securities that have been on. deposit as security for money in the
Bond Fund and Reserve Fund throughout the Fiscal Year, a list of the securities, if any, in which
money in the Bond Fund and Reserve Fund has been invested, and a statement of the manner
in which money in the Revenue Fund has been secured in. such Fiscal Year.
Expenses incurred in making the audits referred to above are to be regarded as
Maintenance and .Operating Expenses of the Project and paid as such. Copies of the aforesaid
annual audit shall be immediately furnished. -to the Executive Director of the Municipal Advisory
Council of Texas at his or her office in .Austin, Texas, the Texas Agricultural Finance Authority,
Attention: Executive Director, and, upon written request, to the initial Holder and any
subsequent Holder of the Bonds Similarly Secured.
By its approval of this Resolution, evidenced by an ordinance or resolution, the City
agrees and by the approval of this Resolution the Authority agrees (a) to provide TAFA with (i)
monthly financial statements, to be submitted within ten (10) days after the close of the each
month until the requirement is waived in writing by the Executive Director or TAFA's Bonds are
paid in full, whichever comes first, and (ii) annual audit reports, to be submitted without charge,
within one hundred twenty 120 days of the close of each fiscal year and (b) in order to secure
the City's obligations under the Contract, the City will maintain rates and changes for its
waterworks and sewer system sufficient to pay all its obligations secured by and made payable
fTOM the revenues derived from the operation of its waterworks and sewer system.
45156027.8/10202579 24
SECTION 22: Remedies in Event of Default. In addition to all the rights and remedies
provided by the laws of the State of Texas, the Authority covenants and agrees particularly that
in the event the Authority (a) defaults in payments to be made to the Bond Fund or Reserve
Fund as required by this Resolution, or (b) defaults in the observance or performance of any
other of the covenants, conditions or obligations set forth in this Resolution, any Holder shall be
entitled to a writ of mandamus issued by a court of proper jurisdiction compelling and requiring
the Board of Directors and other officers of the Authority to observe and perform any covenant,
condition or obligation prescribed in this Resolution.
No delay or omission to exercise any right or power accruing upon any default shall
impair any such right or power, or shall be construed to be a waiver of any such default or
acquiescence therein, and every such right or power may be exercised from time to time and as
often as may be deemed expedient. The specific remedy herein provided shall be cumulative of
all other existing remedies and the specification of such remedies shall not be deemed to be
exclusive.
SECTION 23: Special Covenants. The Authority hereby further covenants as follows:
(a) That it has the lawful power to pledge the revenues supporting this issue of
Bonds and has lawfully exercised said power under the Constitution and laws of the State of
Texas; that the Bonds and the Additional Bonds, when issued, shall be ratably secured under
said pledge of the Pledged Revenue in such manner that one bond shall have no preference
over any other bond of said issues.
(b) That other than for the Bonds, the Pledged Revenue has in no manner been
committed or pledged to the payment of any debt or obligation of the Authority.
(c) That, so long as any of the Bonds or any interest thereon remain Outstanding,
the Authority will not sell or encumber the Project or any substantial part thereof; provided,
however, this covenant shall not be construed to prohibit the sale of such machinery, or other
properties or equipment which has become obsolete or otherwise unsuited to the efficient
operation of the Project, and, also, with the exception of the Additional Bonds expressly
permitted by this Resolution to be issued, it will not encumber the Pledged Revenue unless
such encumbrance is made junior and subordinate to all of the provisions of this Resolution.
(d) The Authority will maintain rates and charges to the City sufficient to meet the
debt service requirements on the outstanding. obligations of the Authority that are supported by
such revenues.
None of the special covenants herein appearing shall be construed in any manner that
would deprive the Authority of its right- to' pledge any revenues produced by modification of the
Contract and specifically designated to meet obligations incurred in providing the Authority with
enlarged or additional facilities; further, that none of said covenants shall be construed in any
manner that would deprive the Authority of its right to pledge that part of any revenue or income
derived by it from other future contracts with other cities, towns or villages or the Authority or
others and required to satisfy conditions for payment of other bonds or obligations issued by the
Authority and such right is especially reserved.
SECTION 24: Bonds are Special Obligations. The Bonds are special. obligations of the
Authority payable from the Pledged Revenue, and the Holders thereof shall never have the right
to demand payment thereof out of funds raised or to be raised by taxation.
45156027.&10202579 25
SECTION 25: Bonds are Negotiable Instruments. Each of the Bonds herein authorized
shall be deemed and construed to be a "Security" and as such a negotiable instrument, within
the meaning of Chapter 8 of the Texas Business and Commerce Code.
SECTION 26: Proceeds Fund. The Authority hereby creates a proceeds fund account
in the Authority's Depository Bank, which is known as the "Proceeds Fund", into which shall be
deposited all remaining proceeds derived from the sale of the Bonds in accordance with Section
34 of this Resolution and this rSection. To the extent of conflict between this Section and
Section 34, Section 34 controls. In this Section when the term "Cost(s) of the Project" is used,
the reference is to the Series 2002 Project,
tiloneys on deposit in the Proceeds Fund shall be disbursed only for payment of the
respective Costs of the Project financed. All expenditures for construction, labor and materials
shall be disbursed only upon receipt of a certificate of the engineer (as defined in the Contract)
based upon estimates of work and material furnished as approved by them and submitted to the
Authority and the City's Engineer for approval prior to payment. The Authority shall keep
records of the nature and amount of all Proceeds Fund expenditures and make the same
available to the City and the engineers at all reasonable times. Should there be any balance in
the Proceeds Fund after all such Costs of the Project have been paid, such balance shall be
deposited to the Bond Fund.
Moneys in the Proceeds Fund may be invested, to the extent such investments are
Authorized Investments, in one or more of the following (a) Government Obligations,
(b) certificates of deposit of any bank or trust company that are fully secured by a pledge of
direct obligations of, or obligations of which the principal and interest are guaranteed by, the
United States of America to the extent such certificates are not insured, which obligations shall
mature on dates that coincide as closely as practicable to the dates when money will be needed
to pay construction costs as such dates. are estimated in schedules prepared by the engineer
and furnished the Authority. All earnings realized from these investments shall be retained in
the Proceeds Fund until completion of the Series 2002 Project and shall be treated in the same
manner as other moneys in the Proceeds Fund are treated as pursuant to this Resolution.
SECTION 27: Notices to Holders -Waiver. Wherever this Resolution provides for notice
to Holders of any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and sent by United States mail, first class postage prepaid, to
the address of each Holder as it appears in the Security Register.
In any case in which notice to Holders is given by mail, neither the failure to mail such
notice to any particular Holders, nor any defect in any notice so mailed, shall affect the
sufficiency of such notice with respect to all other Bonds. Where this Resolution provides for
notice in any manner, such notice may be waived in writing by the Holder entitled to receive
such notice, either before or after the event with respect to which such notice is given, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 28: Cancellation. All Bonds
exchange, or replacement, if surrendered to
canceled by it and, if surrendered to the
Agent/Registrar and, if not already cancele+
Agent/Registrar. The Authority may at any
45156027.8/10202579
surrendered for payment, redemption, transfer,
the Paying Agent/Registrar, shall be promptly
Authority, shall be delivered to the Paying
shall be promptly canceled by the Paying
:ime deliver to the Paying Agent/Registrar for
26
cancellation any Bonds previously certified or registered and delivered that the Authority may
have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly
canceled by the Paying Agent/Registrar. All canceled Bonds held by the Paying
Agent/Registrar shall be destroyed as directed by the Authority.
SECTION 29: Mutilated -Destroyed - Lost and Stolen Bonds. • in case any Bond shall
be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a
replacement Bond of like form and tenor, and in the same denomination and bearing a number
not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in
lieu of and in substitution for such destroyed, lost or stolen Bond, only upon the approval of the
Authority and after (i) the filing by the Holder thereof with the Paying Agent/Registrar of
evidence satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such
Bond, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying
Agent/Registrar of indemnification in an amount satisfactory to hold the Authority and the Paying
Agent/Registrar harmless. All expenses and charges associated with such indemnity and with
the preparation, execution and delivery of a replacement Bond shall be borne by the Holder of
the Bond mutilated, or destroyed, lost or stolen.
Every replacement Bond issued pursuant to this Section shall be a valid and binding
obligation, and shall be entitled to all the benefits of this Resolution equally and ratably with all
other Outstanding Bonds; notwithstanding the enforceability of payment by anyone of the
destroyed, lost, or stolen Bonds.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement and payment of mutilated, destroyed,
lost or stolen Bonds.
SECTION 30: Sale of the Bonds. The sale of the Bonds to the Texas Agricultural
Finance Authority (herein referred to as the "Purchaser" and the "initial Holder') pursuant to a
loan commitment received from said Finance Authority, at the price of par, to provide for the
Bonds to bear interest at an effective interest rate equivalent to the Purchaser's lending rate
therefor, is hereby confirmed.. The Purchaser's lending rate as applicable to the Bonds shall be
determined as set forth in Section 2(b) hereof. Delivery of the Bonds to said Purchaser shall
occur as soon as possible upon payment being made therefor in accordance with the terms of
sale.
SECTION 31: Covenants to Maintain Tax -Exempt Status.
(a) Definitions. When used in this Section, the following terms shall have the
following meanings:
"Closing Date" means the date on which the Bonds are first authenticated and delivered
to the initial purchasers against payment therefor.
"Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any,
effective on or before the Closing Date.
"Computation Date" has the meaning set forth in Section 1.148-1(b) of the Regulations.
45156027.8/10202579 27
"Gross Proceeds" means any proceeds as defined in Section 1.148-1(b) of the
Regulations, and any replacement proceeds as defined in Section 1.148-1(c) of the
Regulations, of the Bonds.
"Investment" has the meaning set forth in Section 1.148-1(b) of the Regulations.
"Nonpurpose Investment" means any investment property, as defined in section 148(b)
of the Code, in which Gross Proceeds of the Bonds are invested and which is not acquired to
carry out the governmental purposes of the Bonds.
"Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the Regulations.
"Regulations" means any proposed, temporary, or final Income Tax Regulations issued
pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue
Code of 1954, which are applicable to the Bonds. Any reference to any specific Regulation
shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation
designed to supplement, amend or replace the specific Regulation referenced.
"Yield" of (i) any Investment has the meaning set forth in Section 1.148-5 of the
Regulations; and (ii) the Bonds has the. meaning set forth in Section 1.1484 of the Regulations.
(b) Not to Cause Interest to Become Taxable. The Authority shall not use, permit
the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross
Proceeds) in a manner which if made or omitted, respectively,. would cause the interest on any
Bond. to become includable in the gross income, as defined in section 61 of the Code, of the
owner thereof for federal income tax purposes. Without limiting the generality of the foregoing,
unless and until the Authority receives a written opinion of counsel nationally recognized in the
field of municipal bond law to the effect that failure tocomply with such covenant will not
adversely affect the exemption from federal income tax of the interest on any Bond, the
Authority shall comply with each of the specific covenants in this Section.
(c) No Private Use or Private Payments. Except as permitted by section 141 of the
Code and the Regulations and rulings thereunder, the Authority shall at all times prior to the last
Stated Maturity of Bonds:
(i) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or indirectly
with Gross Proceeds of the Bonds (including property financed with Gross Proceeds of
the Refunded Obligations), and not use or permit the use of such Gross Proceeds
(including all contractual arrangements with terms different than those applicable to the
general public) or any property acquired, constructed or improved. with such Gross
Proceeds in any activity carried on by any person or entity (including the United States
or any agency, department and instrumentality thereof) other than a state or local
government, unless such use is solely as a member of the general public; and
(ii) not directly or indirectly impos
e or accept any charge or other payment by
45156027.8/10202579 28
application within the Authority or interest earned on investments acquired with such
Gross Proceeds pending application for their intended purposes.
(d) No Private Loan. Except to the extent permitted by section 141 of the Code and
the Regulations and rulings thereunder, the Authority shall "not use Gross Proceeds of the
Bonds to make or finance loans to any person or entity other than a state or local government.
For purposes of the foregoing covenant, such Gross Proceeds are considered to be 'loaned" to
a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is
sold or leased to such person or entity in a transaction which creates a debt for federal income
tax purposes; (2) capacity in or service from such property is committed to such person or entity
under a take -or -pay, output or similar contract or arrangement; or (3) indirect benefits, or
burdens and benefits of ownership, of such Gross Proceeds or any property acquired,
constructed or improved with such Gross Proceeds are otherwise transferred in a transaction
which is the economic equivalent of a loan.
(e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the Authority shall. not at any time prior to
the final Stated Maturity of the Bonds directly or& indirectly invest Gross Proceeds in any
Investment (or use Gross Proceeds to replace money so invested), if as a result of such
investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or
with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of
the Bonds.
(f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of
the Code and the Regulations and rulings thereunder, the Authority shall not take or omit to take
any action which would cause the Bonds to be federally guaranteed within the meaning of
section 149(b) of the Code and the Regulations and rulings thereunder.
(g) Information Report. The Authority shall. timely file the information required by
section 149(e) of the Code with the Secretary of the Treasury on Form 8038- or such other
form and in such place as the Secretary may prescribe.
(
h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in section
148{f) of the Code and the Regulations and rulings thereunder.
(i) The Authority shall account for all. Gross Proceeds (including all receipts,
expenditures and investments thereof) on its books of account separately and apart from
all other funds (and receipts, expenditures and investments thereof) and shall retain all
records of accounting for at least six (6) years after the day on which the last
Outstanding Bond is discharged. However, to the extent permitted by law, the Authority
may commingle Gross Proceeds of the Bonds with other money of the Authority,
provided that the Authority separately accounts for each receipt and expenditure of
Gross Proceeds and the obligations acquired therewith.
(ii) Not less frequently than each Computation Date, the Authority shall calculate
the Rebate Amount in accordance with rules set forth in section 148(f) of the Code and
the Regulations and rulings thereunder. The Authority shall maintain such calculations
with its official transcript of proceedings relating to the issuance of the Bonds until six (6)
years after the final Computation Date.
45156027.8/10202579 29
(ii) As additional consideration for the purchase of the Bonds by the Purchasers
and the loan of the money represented thereby and in order to induce such purchase by
measures designed to insure the excludability of the interest thereon from the gross
income of the owners thereof for federal income tax purposes, the Authority shall pay to
the United States out of the Bond Fund or its general fund, as permitted by applicable
Texas statute, regulation or opinion of the Attorney General of the State of Texas, the
amount that when added to the future value of previous rebate payments made for the
Bonds equals (i) in the case of a Final Computation. Date as defined in Section 1.148.
3(e)(2) of the Regulations, one hundred percent (100%) of the Rebate Amount on such
date; and (ii) in the case of any other Computation Date, ninety percent (90%) of the
Rebate Amount on such date. In all cases, the rebate payments shall be made at the
times, in the installments, to the place and in the manner as is or may be required by
section 148(f) of the Code and the Regulations and rulings thereunder, and shall be
accompanied by Form 8038-T or such other forms and information as is or may be
required by Section 148(f) of the Code and the Regulations and rulings thereunder.
(iv) The Authority shall exercise reasonable diligence to assure that no errors are
made in the calculations and payments required by paragraphs (2) and (3), and if an
error is made, to discover and promptly correct such error within a reasonable amount of
time thereafter (and in all events within one hundred eighty (180) days after discovery of
the error), including payment to the United States of any additional Rebate Amount owed
to it, interest thereon, and any penalty imposed under Section 1.14&3(h) of the
Regulations.
(i) Elections. The Authority hereby directs and authorizes the President, Secretary
and/or Assistant Secretary of the Board of Directors of the Authority, and. the General Manager
of the Authority, individually or jointly, to make elections permitted or required pursuant to the
provisions of the Code or the Regulations, as they deem necessary or appropriate in connection
with the Bonds, in the Certificate as to Tax Exemption or similar or other appropriate certificate,
form or document.
SECTION 32: Authority to Notify City of Debt Service Requirements.. The Authority will
notify the City in writing, on the date of the issuance of the Bonds, the amount of debt service
coming due on the Bonds during the Initial Rate Period (through the first Principal Payment
)ate), and, on or before each Principal Payment Date, the Authority will notify the City in writing
of the debt service coming due on the Bonds in the next twelve (12) months (through the
corresponding Principal Payment Date).
SECTION 33: Control and Custody of Bonds. The President of the Board of Directors of
the Authority shall be and is hereby authorized to take and have charge of all necessary orders
and records pending investigation by the Attorney General of the State of Texas, including the
printing and supply of definitive Bonds, and shall take and have charge and control of the Initial
Bonds pending approval by the Attorney General, the registration thereof by the Comptroller of
Public Accounts and the delivery thereof to the Purchaser.
Furthermore, the President, Secretary, and/or Assistant Secretary of the Board of
Directors of the Authority, and the General Manager of the Authority, are hereby authorized and
directed to furnish and execute such documents relating to the Authority and its financial affairs
as may be necessary for the issuance of the Bonds, the approval of the Attorney General and
their registration by the Comptroller of Public Accounts and, together with the Authority's
financial advisor, bond counsel and the Paying Agent/Registrar, make the necessary
45156027.8/10202579 30
arrangements for printing of the definitive Bonds and the delivery of the Initial Bonds to the initial
Purchaser(s) and the exchange thereof for definitive Bonds.
SECTION 34: Rules and Regulations of Texas Agricultural Finance Authority. While
TAFA is the Holder of the Bonds, the Authority agrees and covenants that upon completion of
the project to be financed with the proceeds of the Bonds, the proper officials of the Authority
shall cause to be prepared and submitted to TAFA any and all accounting, financial, and
construction information, and any other information required by TAFA.
The Authority furiher agrees and covenants to comply with all applicable laws of the
State of Texas and all applicable rules and policies of the TAFA with respect to the acquisition
of the Project and the loan of funds to the Authority by the TAFA evidenced by the Bonds.
SECTION 35: Satisfaction of Obligation of Authority. If the Authority shall pay or cause
to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and
interest on the Bonds, at the times and in the manner stipulated in this Resolution, then the
pledge of the Pledged Revenue under this Resolution and all other obligations of the Authority
to the Holders shall thereupon cease, terminate, and become void and be discharged and
satisfied.
Bonds or any principal amounts) thereof shall be deemed to have been paid within the
meaning and with the effect expressed above in this Section when (i) money sufficient to pay in
full such Bonds or the principal amount(s) thereof at maturity or to the redemption date therefor,
together with all interest due thereon, shall have been irrevocably deposited with and held in
trust by the Paying Agent/Registrar, or an authorized escrow agent, or (ii) Government
Obligations shall have been irrevocably deposited in trust with the Paying Agent/Registrar,. or an
authorized escrow agent, which Government Obligations have been certified by an independent
accounting firm to mature as to principal and interest in such amounts and at such times as will
insure the availability, without reinvestment, of sufficient money, together with any moneys
deposited therewith, if any, to pay when due the principal of and interest on such Bonds, or the
principal amount(s) thereof, on and, prior to the Stated Maturity thereof or (if notice of
redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to
the Paying Agent/Registrar have been made) the redemption date thereof. The Authority
covenants that no deposit of moneys or Government Obligations will be made under this
Section and no use made of any such deposit that would cause the Bonds to be treated as
"arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as
amended, or regulations adopted pursuant thereto,
Any moneys so deposited with the Paying Agent/Registrar, or an authorized escrow
agent, and all income from Government Obligations held in trust by the Paying Agent/Registrar
or an authorized escrow agent, pursuant to this Section that is not required for the payment of
the Bonds, or any principal amount(s) thereof, or interest thereon with respect to which such
moneys have been so deposited shall be remitted to the Authority or deposited as directed by
the Authority. Furthermore, any money held by the Paying Agent/Registrar for the payment of
the principal of and interest on the Bonds and remaining unclaimed for a period of four (4) years
after the Stated Maturity, or applicable redemption date, of the Bonds such moneys were
deposited and are held in trust to pay shall, upon the request of the Authority, be remitted to the
Authority against a written receipt therefor. Notwithstanding the above and foregoing, any
remittance of funds from the Paying Agent/Registrar to the Authority shall be subject to any
applicable unclaimed property laws of the State of Texas.
45156027.8/10202579 31
SECTION 36: Legal Opinion. The Purchaser's obligation to accept delivery of the
Bonds is subject to its being furnished a final opinion of Fulbright & Jaworski L.L.P., Attorneys,
approving such Bonds as to their validity, said opinion to be dated and delivered as of the date
of delivery and payment for the Bonds by the initial purchasers. A true and correct reproduction
of said opinion is hereby authorized to be printed on the definitive Bonds or an executed
counterpart thereof shall accompany the global Bonds deposited with the Depository Trust
Company,
SECTION 37: CUSIP Numbers. CUSIP numbers may be printed or typed on the Bonds.
It is expressly provided, however, that the presence or absence of CUSIP numbers on the
Bonds shall be of no significance or effect as regards the legality thereof and neither the
Authority nor attorneys approving said Bonds as to legality are to be held responsible for CUSIP
numbers incorrectly printed or typed on the Bonds.
SECTION 38: Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
SECTION 39: Resolution aContract -Amendments. This Resolution shall constitute a
contract with the Holders from time to time, be binding on the Authority, and shall not be
amended or repealed by the Authority so long as any Bond remains Outstanding except as
permitted in this Section. The Authority, may, without the consent of or notice to any Holders,
from time to time and at any time, amend this Resolution in any manner not detrimental to the
interests of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or
omission herein.
(a) In addition, the Authority may, with the written consent of Holders of Bonds
Similarly Secured aggregating in principal amount fifty-one percent (51 %) of the aggregate
principal amount of then Outstanding Bonds Similarly. Secured from time to time approve any
amendment to this Resolution that may be deemed necessary or desirable by the Authority,
provided, however, that nothing herein contained shall permit or be construed to permit the
amendment of the terms and conditions of this Resolution or in the Bonds or Bonds Similarly
Secured so as to:
(i) Make any change in the maturity of the Outstanding Bonds;
Reduce the rate of interest borne by any of the Outstanding Bonds;
Reduce the amount of the principal payable on the Outstanding Bonds;
(iv) Modify the terms of payment of principal of or interest on the Outstanding
Bonds;
(v) Affect the rights of the Holders of less than all of the Bonds then Outstanding;
or
(vi) Change the minimum percentage of the principal amount of Bonds Similarly
Secured necessary for consent to such amendment.
(b) If at any time the Authority shall desire to amend this Resolution under this
Section, the Authority sha!! cause notice of the proposed amendment (i) to be published in a
financial newspaper or journal published in the State of Texas, and in a newspaper of general
45156027.8/10202579
32
circulation in the Authority once during each calendar week for at least two successive calendar
weeks and (ii) sent by United States mail, first class postage prepaid, to the Holders of Bonds at
the address appearing in the Security Register. Such notice shall briefly set forth the nature of
the proposed amendment and shall state that a copy thereof is on file at the principal office of
the Paying Agent/Registrar-for inspection by all Holders of Bonds Similarly Secured.
(c) Whenever at any time the Authority shall receive an instrument or instruments
executed by the Holders of at least fifty-one percent (51 %) in aggregate principal amount of all
Bonds Similarly Secured then Outstanding, which instrument or instruments shall refer to the
proposed amendment described in said notice and which specifically consent to and approve
such amendment in substantially the form of the copy thereof on file with the Paying
Agent/Registrar, the governing body of the Authority may pass an amendatory resolution in
substantially the same form.
(d) Upon the passage of any amendatory resolution pursuant to the provisions of this
Section, this Resolution shall be deemed to be amended. in accordance with such amendatory
resolution, and the respective rights, duties and obligations under this Resolution of the
Authority and the Holders of then Outstanding Bonds Similarly Secured shall thereafter be
determined, exercised and enforced hereunder, subject in all respects to such amendments.
(e) Any consent given by the Holder of a Bond pursuant to the provisions of this
Section shall be irrevocable for a period of six (6) months from the date of the first publication of
the notice provided for in this Section or the date of such consent, whichever is later, and shall
be conclusive and binding upon all future Holders of the same Bond during such period. After
the applicable period of time a consent is irrevocable has expired,. the Holder who gave consent,
or a successor in title, may revoke such consent by filing notice thereof with the Paying
Agent/Registrar and the Authority, but such revocation shall not be effective if the Holders of
fifty-one percent (51 %) in aggregate principal amount of the then Outstanding Bonds Similarly
Secured have, prior to the attempted revocation, consented to and approved the amendment.
(f) For the purpose of this Section, the fact of the holding of Bonds by any Holder
and the amount and numbers of such Bonds and the date of their holding same, may be proved
by the Security Register maintained by the Paying Agent/Registrar or by affidavit of the person
claiming to be such Holder, or by a certificate executed by any trust company, bank, banker or
any other depository wherever situated showing that at the date therein mentioned such person
had on deposit with such trust company, bank, banker or other depository, the Bonds described
in such certificate. The Authority may conclusively assume that such ownership continues until
written notice to the contrary is served upon the Authority.
SECTION 40: Continuing Disclosure Undertaking.
(a) Definitions. As used in this Section, the following terms have the meanings
ascribed to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each. person whom the SEC or its staff has determined to be a
nationally recognized municipal securities information repository within the meaning of the Rule
from time to time.
45156027.8/10202579
33
"Rule" means SEC Rule 15c2-12, as amended from time to time or officially interpreted
by the SEC.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or -its staff to be, a state information
depository within the meaning of the Rule from time to time.
(b) Annual Reports. The Authority shall provide annually to any SID, within six (6)
months after the end of each fiscal year financial information and operating data with respect to
the Authority of the general type included in the final Application to Texas Agricultural Finance
Authority (the "Application") being the information described in Exhibit E hereto.. For purposes
of the Rule, the Application is deemed final as of its date and the contents thereof are approved
by the Authority. Any financial statements to be provided shall be (1) prepared in accordance
with the accounting principles described in Exhibit E hereto and (2) audited, if the Authority
commissions an audit of such statements and the audit is completed within the period during
which they must be provided. If audited financial statements are not available at the time the
financial information and operating data must be provided, then the Authority shall provide
unaudited financial statements for the applicable fiscal year to any SID with the financial
information and operating data and will file the annual audit report when and if the same
becomes available.
If the Authority changes its fiscal year, it will notify any SID of the change (and of the
date of the new fiscal year end) prior to the next date by which the Authority otherwise would be
required to provide financial information and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may
be set forth in. full in one or more documents or may be included by specific reference to any
document (including an official statement or other offering document, if it is available from the
MSRB) that theretofore has been provided to any SID or filed with the SEC.
(c) Maternal Event Notices. The Authority .shall notify any SID and either each
NRMSIR or the MSRB2 in a timely manner, of any of the following events with respect to the
Bonds, if such event is material within the meaning of the federal securities laws:
(i) Principal and interest payment delinquencies;
(ii) Non-payment related defaults;
(iii) Unscheduled draws on debt service reserves reflecting financial difficulties;
(iv) Unscheduled draws on credit enhancements reflecting financial difficulties;
(v) Substitution of credit or liquidity providers, or their failure to perform;
(vi) Adverse tax opinions or events affecting the tax-exempt status of the Bonds;
(vii) Modifications to rights of Holders of the Bonds;
(viii) Bond calls;
45156027.8/10202579 34
_(ix) Defeasances;
(x) Release, substitution, or sale of property securing repayment of the Bonds;
and
(xi) Rating changes.
The Authority shall notify any SID, in a timely manner, of any failure by the Authority.to
provide financial information or operating data in accordance with subsection (b) of this Section
by the time required by such Section.
(d) Limitations Disclaimers and Amendments. The Authority- shall be obligated to
observe and perform the covenants specified in this Section with respect to the Authority and
the Bonds while, but only while, the Authority remains an "obligated person" with respect to the
Bonds within the meaning of the Rule, except that the Authority in any event will give the notice
required by subsection (c) hereof of any Bond calls and defeasance that cause the Authority to
be no longer such an "obligated person."
The provisions of this Section are for the sole benefit of TAFA and the beneficial owner
of the Authority's obligations,. if TAFA sells or otherwise transfers such obligations, and the
beneficial owners of TAFA's bonds if the Authority is an obligated person with. respect to such
bonds under the Rule, and nothing in this Section, express or implied, shall give any tbenefit or
any legal or equitable right, remedy, or claim hereunder to any other person. The Authority
undertakes to provide only the financial information, operating data,. financial. statements, and
notices that it has. expressly agreed to provide .pursuant to this Section and does not hereby
undertake to provide any other information. that may be relevant or material to a complete
presentation of the financial results, condition, or prospects of the Authority or the State of
Texas or hereby undertake to update any information provided in accordance with this Section
or otherwise, except as expressly provided herein. The Authority does not make any -
representation or warranty concerning such information or its usefulness to a decision to invest
in or sell Bonds at any future data..
UNDER NO CIRCUMSTANCES SHALL THE AUTHORITY BE LIABLE TO THE
HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN
CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY
BREACH BY THE AUTHORITY, WHETHER NEGLIGENT OR WITHOUT. FAULT ON ITS
PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND
REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF
ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
No default by the Authority in observing or performing its obligations under this Section
shall constitute a breach of or default under this Resolution for purposes of any other provision
of this Resolution.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the Authority under federal and state securities laws.
The provisions of this Section may be amended by the Authority from Time to time to
adapt to changed circumstances resulting from a change in legal requirements, a change in law,
or a change in the identity, nature, status, or type of operations of the Authority, but only if
45156027.8/10202579 35
(1) the provisions of this Section, as so amended, would have permitted an underwriter to
purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking
into account any amendments or interpretations of the Rule to the date of such amendment, as
well as such changed circumstances, and (2) either (a) the Holders of a majority in aggregate
principal amount (or any greater amount required by any other provision of this Resolution. that
authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (b) a
Person that is unaffiliated with the Authority (such as nationally recognized bond counsel)
determines that such amendment will not materially. impair the interests of the Holders and
beneficial owners of the Bonds. The provisions of this Section may also be amended from time
to time or repealed by the Authority if the SEC amends or repeals the applicable provisions of
the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and
to the extent that reservation of the Authority's right to do so would not prevent underwriters of
the initial public. offering of the Bonds from lawfully purchasing or selling Bonds in such offering.
If the Authority so amends the provisions of this Section, it shall include with any amended
financial information or operating data next provided in accordance with subsection (b) an
explanation, in narrative form, of the reasons for the amendment and of the impact of any
change in the type of financial information or operating data so provided.
SECTION 41: Amendment of Contract. The Contract is amended to include the
definition of Project attached hereto as Exhibit B. A copy of Exhibit B shall be attached to the
contract as Exhibit C. In all other respects the Contract is reapproved and shall be and remain
in full force as the agreement of the parties.
SECTION 42: Repeal of Resolution of the Authority Passed March 25, 2002. A
resolution of the Authority, dated March 25, 2002, authorizing the issuance of "Greater Texoma
Utility Authority Contract Revenue Bonds Series 2002, (City of Anna Project) is hereby
repealed and shall no longer be of any force and effect, such bonds therein authorized having
never been issued.
SECTION 43: Benefits of Resolution. Nothing in this Resolution, expressed or implied,
is intended or shall be construed to confer upon any person other than the Authority, the Paying
Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by
reason of this Resolution or any provision hereof, this Resolution and all its provisions being
intended to be and being for the sole and exclusive benefit of the Authority, the Paying
Agent/Registrar and the Holders.
SECTION 44: Inconsistent Provisions. All orders or resolutions, or parts thereof, that
are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the
extent of such conflict and the provisions of this Resolution shall be and remain controlling as to
the matters contained herein.
SECTION 45: Governing Law: This Resolution shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
SECTION 46: Severability. If any provision of this Resolution or the application thereof
to any circumstance shall be held to be invalid, the remainder of this Resolution and the
application thereof to other circumstances shall nevertheless be valid, and this governing body
hereby declares that this Resolution would have been enacted without such invalid provision.
SECTION 47: Effective Date. This Resolution shall be in force and effect from and after
its passage on the date shown below.
45156027.8/10202579
36
«The. Remainder of this Page is Intentionally Left Blank»
45156027.8/10202579 37
PASSED AND ADOPTED, this July 15, 2002.
ATTEST:
Secretary, Board of C
45156027.5/10202579
GREAjCE'� TEXOMA UTILITY AUTHORITY
residentI Board of
37
45156027.8/10202579
EXHIBIT A
Waiver of Additional Bonds
Condition of Certification of Debt Service Coverage
by Certified Public Accountant
A-1
�(�Ies H. Madden, Jr., Chairman Jack taunt, Ycc Chairman
tiVilliam W. Meadows, Member J. Kavin Ward -nomas WcirLab=III, Member.,
Dario Vidal Guerra, Jr., lWernber JDrecurrve Admiriisrrurur E. G. Rod Pittman, Member
Tune 21, 2002
Mr. Jerry W_ Chapman
Genera! Manager
Greater Texoma Uplity Authority
�100 Airport Drive
Denison, Texas 75020.
kd�mtoj i0i
�reaterTexonna Utility Authortry's Reguesi id Rerrrovt the Additional t3onds
Test Provision Contained in Prior Bands resolutions., for debt issued on Behalf
of the City of Anna ( Cabin County)
-�2517,f3U❑ Series 1997
-!P600,000 Series 2000
Dear Mr_ Chapman:
Endosed you ;If find a copy of trie approved resolution, authorizing the removal of the
additional Bonds Test provision from all Greater Texoma Utility Authority (City of Anna) bond
series and to provide authority to the Development Fund Manager to effect this consent. The
r2r1I1P_St was presented to the Texas Water Development Board orl June 18, 2002. We are also
enchosing-a memo presented to the Board.
IT you need more irrFotmation bn this matter, please call Caaren Skrabarcz}rk at (51Z) 443-7835.
Mike Lynn, P.E., Manager
East Texas Region
Northern Project Management Division
LMtrlmn
Ertciosures
cc wjend.: Mr. Mark Westen,�ard, Fulbright � Jaworski
Mr. Ran Qar1c, wnlie, Clark, Henderson & Tldweil
Mr. Garry Krnball, first Southwest Company
Mr. 'that Morris, Mcnis Engineers
cc w/o end.: The Honorable Florence Shapira, Texas Senate
The Honorable Tom Haywood, Texas Senate
Ttte Honorable Mary Denny, Texas House of Represuttatives
our H1::fca
P_O_ Eox 0231 • 17i70 N. Cnn3r:=ss Avawa - Au:;tin, Tomas 737I 1-323I
Telephone (5I2) 4634347 -Fax (S 13) 475-3053 �
URL Acidrr� hapllxwirtwdbsratc.L;.us � r
E41a1 Addr=L info Otwdbst=e..Lt us '
TNRIS The Texas informatiaa Cr..tcway - www.urr's.statccc.uz �..1
A ibferaber of the Terns Crogrnphie InfOnrjW?on CO!lncll (TCICJ
A RESOLUTION OF THE TEAS LATER DEVELOPiyj�ENT L'OAI
CONSENTING TO AN AMENDMENT TO T14E BOND RESOLUTIONS
AUS-HORIZNG 5250,000 GREATER TEX.OMLA UTILITY AUTHORITY
CONTRACT REVENUE BONDS, SERIES 1997 (CITY OF Ai\NI A PROJECT)
AINTD $600,000 GREATER TEXOMA. UTILITY AUTHORITY
CONTRACT REVENUE BON1�)S, SERIES 2000 (CITY OF ANNA PROJECT),
TO REMOVE THE ADDITIONAL BONDS TEST AIN D
AUTHORIZATION OF DEVELOPMENT T FUND N ANA.GER
TO TAKE NECESSARY A QTIONS
WHEREAS, the "'_-exas Wafer Devcic�mcnt I3oarcl (the "Boar"} is th? ��Ie holder of
$250,000 Greater Texoma Utility Authority Contract Revenue Bonds, Series 1997 (City of .Anna
I'rajecc) azid 3600,000 Grcatcr Texoma, Utility A.uthnrity Contract Revenue Bonds, Series 2000
(City of Anna Project) (collectively, the "Outstanding, Obligations"]; and
WHEREAS, the Greater Texoma Utility Authority (the "Authority"), on behaL{ of the
Ciry of A ula, Tfrcas (the "City"), seeks to finance improvements to the City's wastewater system
through a S 1,965,000 loan with th.e Texas Agriculture Finance Authority, to be evidenced by the
sale of contract revenueAgriculture bonds to the Texas Aiculture Finance Authority (the "2002 Bonds' ;
aMCI
WHERIrA.S, section ig{b) orlhc Bond Resolution authoring the issuance of the '
Outstaudins Obligations requires a certified pubLc accountant to certify to the Authority that the
City's net rcvatzurs for -thc last fiscal year are at least 1255 times the average annual debt service
requircments before the Authority can issue additional bonds on behalf of the City (the
'2L ditional Bonds Test' includins the 2002 Bonds; and
WHEREAS, the Additional Borzds Test is not a candirion in the Board commitment for
the 2001 Szties and bas not been a condition for arzy of the Uutstandin� Bonds; and
Tr�tREAS, the Authority requests that the Board coz�eut to an �caendznent to thebond
resolutions authozizin, the Outstmding Oblz� dohs szinereby tzz r'_ddidonal Bonds Testis
removed, so that the 2002 Bonds may lit issucd; and
WHEREAS, the City has sccently raised water and sPwer rates 5uftECieni CO meet debt
service for the Qutstanding Obligations and the 2002 Bords_
- VYHF..REAS, the Board hereby finds:
1. that it is is the public incerest for the Grater I-e�corna Utility Autliutity's rcqucst
to be approved; and
2. that in its opinion the revzrzues pledged by the political subdivision tiv-ilI be
su:Iicienl tc� u:crt all of the abLgation.s assumed by t_he political subdivision_
. NO�jT, THEREFORE, based on said considerations and findings, the Taxas Water
�eveloprz�ent Boaxd resol�Ycs as follows:
1 _ The Tc;t� �1'ater.3�evelopme�nt Board consents to an amendment to the bond
resolu�ons authoriz3.z�.g the Outstanding Obiigatozzs; tivhereby the Additiortal
}3onds T e4t is elir�i.�,ated as a condition. to issuz addidon�l parity bonds; and
2_ The pevelopment Fund itilana;er is authorized to tai�ce a13. necessar}r actions to
. give effect to this consent
APPROVER and ordered o#record this the l�� day of June, 20�2.
'�:X�S tvATFR DEVELOPMENT BO_�RD
Wales B. Madden, Jr., t�airrRan
ATTEST:
in �'`Tard
rive Adui_inistrator
EXHIBIT B
Description of the Series 2002 Project
Proceeds of, the bond issue will be used by the Greater Texoma Utility Authority to
finance the construction of a new wastewater treatment plant for the City of Anna, Texas, on the
site of the existing plant, including a raw sewage lift station, extended aeration activated sludge
treatment, chlorination, wedge wire sludge dewatering beds, and an emergency generator, and
to finance the acquisition of existing facilities owned by the City of Anna, Texas.
45156027.8/10202579
A-1
45156027.8/10202579
EXHIBIT C
Paying Agent Registrar Agreement
(please see Tab 6 of the Transcript)
C-1
EXHIBIT D
Contract For Water Supply and Sewer Service
(please see Tab 3 of the Transcript)
45156027.8/10202579
_ EXHIBIT E
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 40 of this Resolution.
Annual Financial Statements and Operating Data
The financial information and operating data with- respect to the Authority to be provided
annually in accordance with such Section are the financial statements of the Authority.
Accounting Principles
The accounting principles referred to in such Section are generally those described in
the Application for Financial Assistance, as such principles may be changed from time to time to
comply with state law or regulation.
45156027.8/10202579 E-"I