HomeMy WebLinkAbout22-1628 09-27-2022RESOLUTION NO. 22-1628
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EULESS,
TEXAS, APPROVING A RESOLUTION AUTHORIZING THE ISSUANCE,
SALE, AND DELIVERY OF TRINITY RIVER AUTHORITY OF TEXAS
(TARRANT COUNTY WATER PROJECT) IMPROVEMENT REVENUE
BONDS, AND APPROVING AND AUTHORIZING INSTRUMENTS AND
PROCEDURES RELATING THERETO.
WHEREAS, it is necessary and advisable that the City of Euless (the "City")
approve a resolution adopted by the Board of Directors of Trinity River Authority of Texas
authorizing the issuance, sale, and delivery of Trinity River Authority of Texas (Tarrant
County Water Project) Improvement Revenue Bonds, and approving and authorizing
instruments and procedures relating thereto hereinafter described.
THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
EULESS, THAT:
SECTION 1.
A "RESOLUTION AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF
TRINITY RIVER AUTHORITY OF TEXAS (TARRANT COUNTY WATER PROJECT)
IMPROVEMENT REVENUE BONDS, AND APPROVING AND AUTHORIZING
INSTRUMENTS AND PROCEDURES RELATING THERETO" (the "Bond Resolution")
which was adopted by the Board of Directors of Trinity River Authority of Texas (the
"Authority") on June 22, 2022, has been submitted to the City in the form attached hereto,
and made a part hereof for all purposes. Said resolution is hereby approved by the City
as to form and substance, and the bonds (the "Bonds") described therein may be issued
by the Authority in accordance with the terms and provisions set forth therein and herein.
SECTION 2.
The principal amount and maturities of the Bonds, the interest rates for the Bonds,
the purchaser of the Bonds, and other details and provisions for the Bonds, and the price
to be paid for the Bonds, shall be determined by the General Manager of the Authority in
accordance with the procedures and parameters set forth in the Bond Resolution in the
manner determined by the Board of Directors of Authority. All such matters and
procedures are hereby approved by the City so long as the issuance of the Bonds does
not produce an amount greater than $35,935,000 for purposes of constructing
improvements to the Tarrant County Water Project system (which amount does not
include necessary funds for funding of the debt service reserve fund and costs of issuance
of the Bonds).
SECTION 3.
It is acknowledged and agreed by the City that the Bonds authorized pursuant to
said Bond Resolution will be issued in strict conformance and compliance with the water
supply contract dated as of January 21, 1972, executed between the Authority and the
City, and amended as of January 22, 1975, and further amended as of December 5, 1979
(the "Contract"), relating to the project as defined in said Contract and described in said
Bond Resolution, and that the City will be fully bound by the provisions of said Bond
Resolution insofar as they pertain to the City, and the City will be unconditionally obligated
to make the payments with respect to said Bonds as required by the Contract and said
Bond Resolution.
SECTION 4.
In accordance with the Contract, and as a prerequisite to the issuance of the
Bonds, the City finds that a case of emergency exists which requires the City to request
the Authority to issue the Bonds in order to obtain funds to acquire and construct
improvements and extensions to the Tarrant County Water Project for the benefit of the
City, and the City requests the Authority to proceed with such improvements.
SECTION 5.
All ordinances and resolutions of the City in conflict or inconsistent with this
Resolution are hereby repealed to the extent of such conflict or inconsistency.
APPROVED AND ADOPTED at a regular meeting of the Euless City Council on
September 27, 2022, by a vote of 6 ayes, 0 nays, and 0 abstentions.
APPROVED:
Li ncraM a- hH, ayor
ATTE'; T:
utter, RMC, CMC, City Secretary
Resolution No. 22-1628, Page 2 of 47
CERTIFICATE FOR RESOLUTION APPROVING A RESOLUTION AUTHORIZING THE
ISSUANCE, SALE, AND DELIVERY OF TRINITY RIVER AUTHORITY OF TEXAS
(TARRANT COUNTY WATER PROJECT) IMPROVEMENT REVENUE BONDS, AND
APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING
THERETO
THE STATE OF TEXAS
COUNTY OF TARRANT
CITY OF EULESS
I, the undersigned City Secretary of the City of Euless, Texas, hereby certify as
follows:
1. The City Council of said City convened in a regular meeting on September
27, 2022, and the roll was called of the duly constituted officers and members of said City
Council, to -wit:
Mayor: Linda Martin
Place 1: Tim Stinneford
Place 2: Jeremy Tompkins
Place 3: Eddie Price, Mayor Pro Tem
Place 4: Perry Bynum
Place 5: Harry Zimmer
Place 6: Tika Paudel
and all of said persons except Mayor Pro Tem Eddie Price thus constituting a
quorum. Whereupon, among other business, the following was transacted at said
Meeting: a written
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EULESS, TEXAS,
APPROVING A RESOLUTION AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY
OF TRINITY RIVER AUTHORITY OF TEXAS (TARRANT COUNTY WATER PROJECT)
IMPROVEMENT REVENUE BONDS, AND APPROVING AND AUTHORIZING
INSTRUMENTS AND PROCEDURES RELATING THERETO
was duly introduced for the consideration of said City Council and duly read. It was then
duly moved and seconded that said Resolution be adopted; and, after due discussion,
said motion, carrying with it the adoption of said Resolution, prevailed and carried with all
members present voting "AYE" except the following:
NAY: 0 ABSTAIN: 0
Resolution No. 22-1628, Page 3 of 47
2. That a true, full, and correct copy of the aforesaid Resolution adopted at the
Meeting described in the above and foregoing paragraph is attached to and follows this
Certificate; that said Resolution has been duly recorded in said City Council's minutes of
said Meeting; that the above and foregoing paragraph is a true, full, and correct excerpt
from said City Council's minutes of said Meeting pertaining to the adoption of said
Resolution; that the persons named in the above and foregoing paragraph are the duly
chosen, qualified, and acting officers and members of said City Council as indicated
therein; and that each of the officers and members of said City Council was duly and
sufficiently notified officially and personally, in advance, of the time, place, and purpose
of the aforesaid Meeting, and that said Resolution would be introduced and considered
for adoption at said Meeting; and that said Meeting was open to the public, and public
notice of the time, place, and purpose of said Meeting was given, all as required by
Chapter 551, Texas Government Code.
SIGNED AND SEALED the 27th day of September 2022.
r
Ai Sutter, TRMC, CIVIC, City Secretary
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Resolution No. 22-1628, Page 4 of 47
RESOLUTION NO. R-1600
RESOLUTION AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF TRINITY
RIVER AUTHORITY OF TEXAS (TARRANT COUNTY WATER PROJECT)
IMPROVEMENT REVENUE BONDS, AND APPROVING AND AUTHORIZING
INSTRUMENTS AND PROCEDURES RELATING THERETO
THE STATE OF TEXAS
TRINITY RIVER AUTHORITY OF TEXAS
WHEREAS, water supply contracts, each dated as of January 21, 1972, and
amended as of January 22, 1975, and as of December 5, 1979 (with respect to the City
of Euless) and December 11, 1979 (with respect to the City of Bedford), have been duly
executed between the Trinity River Authority of Texas (the "Issuer" or the "Authority') and
the Cities of Bedford and Euless, Texas, respectively, and water supply contracts, each
dated as of April 25, 1979, and amended as of December 5, 1979, and as of April 23,
1980, have been duly executed between the Authority and the Cities of Colleyville,
Grapevine, and North Richland Hills, Texas, with all of the above named cities being
hereinafter collectively called and defined as the "Cities", and with all of the above
contracts, as amended, being hereinafter collectively called and defined as the
"Contracts";
WHEREAS, the Contracts are hereby referred to and adopted by reference for all
purposes, with the same effect as if they had been set forth in their entirety in this
Resolution;
WHEREAS, the Contracts relate to the financing of the acquisition and
construction of the Project, as defined therein, being water supply facilities to serve the
Cities and others, as described in the engineering report entitled "Report on Proposed
Bedford -Euless Water System to Trinity River Authority of Texas", dated July 1, 1971,
and as such report has been amended and supplemented to provide expanded service
(the "Engineering Report"), including the supplement thereto entitled "Trinity River
Authority of Texas Tarrant County Water Project Master Plan Modification to serve
Bedford, Euless, Colleyville, Grapevine, and North Richland Hills", dated October, 1976,
prepared by Knowlton -English -Flowers, Inc. (the "Consulting Engineers"), and including
all additional amendments and supplements thereto made thereafter;
WHEREAS, pursuant to the Contracts and appropriate bond resolutions, the Issuer
issued and has outstanding the following series of bonds:
Trinity River Authority of Texas (Tarrant County Water Project)
Improvement Revenue Bonds, Series 2013 (the "Series 2013 Bonds");
Trinity River Authority of Texas (Tarrant County Water Project) Revenue
Refunding Bonds, Series 2015 (the "Series 2015 Bonds");
Resolution No. 22-1628, Page 5 of 47
Trinity River Authority of Texas (Tarrant County Water Project) Refunding
Revenue Bonds, Series 2016 (the "Series 2016 Bonds");
Trinity
River Authority of Texas (Tarrant
County Water Project)
Improvement
Revenue Bonds, Series 2017 (the "Series
2017 Bonds");
Trinity
River Authority of Texas (Tarrant
County Water Project)
Improvement
Revenue Bonds, Series 2018 (the "Series
2018 Bonds")
Trinity
River Authority of Texas (Tarrant
County Water Project)
Improvement
Revenue Bonds, Series 2019 (the "Series
2019 Bonds");
Trinity
River Authority of Texas (Tarrant
County Water Project)
Improvement
Revenue Bonds, Series 2020 (the "Series
2020 Bonds");
WHEREAS, the Series 2013 Bonds, the Series 2015 Bonds, the Series 2016
Bonds, the Series 2017 Bonds, the Series 2018 Bonds, the Series 2019 Bonds and the
Series 2020 Bonds are collectively referred to herein as the "Outstanding Bonds";
WHEREAS, the Outstanding Bonds and any bonds issued on a parity therewith
are secured by a first lien on and pledge of the Net Revenues under the Contracts and
certain other revenues;
WHEREAS, the Issuer has determined to issue the bonds (the "Bonds")
hereinafter authorized to obtain funds to acquire and construct improvements and
extensions to the Tarrant County Water Project and fund any amounts required to be
deposited to the Reserve Fund and to pay costs of issuance of the Bonds;
WHEREAS, the Bonds shall be issued and delivered pursuant to Chapter 518,
Acts of the 54th Legislature of the State of Texas, Regular Session, 1955, as amended
(the "Act' creating the Authority), Chapter 1371, Texas Government Code, as amended,
and other applicable laws.
THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF TRINITY
RIVER AUTHORITY OF TEXAS THAT:
Section 1. RECITALS, AMOUNT AND PURPOSE OF THE BONDS;
DEFINITIONS.
(a) The Board of Directors hereby incorporates the recitals set forth in the preamble
hereto as if set forth in full at this place and further finds and determines that said recitals
are true and correct. In order to obtain funds to pay for the acquisition and construction
of improvements, betterments, extensions and replacements of the Trinity River Authority
of Texas Tarrant County Water Project and fund any amounts required to be deposited
to the Reserve Fund and to pay costs of issuance of the Bonds, the Board of Directors
hereby authorizes and directs the issuance of revenue bonds of the Issuer, in one or more
Resolution No. 22-1628, Page 6 of 47
series, in the aggregate principal amount not to exceed $35,935,000.
(b) Definitions. In each place throughout this Resolution wherein the following
terms, or any of them, are used, the same, unless the text shall indicate another or
different meaning or intent, shall be construed and are intended to have meanings as
follows:
(1) "Act' and "Authority Act" mean Chapter 518, Acts of the Fifty -Fourth
Legislature of the State of Texas, Regular Session, 1955, as amended.
(2) "Additional Bonds" means the additional parity revenue bonds as
defined and permitted in Sections 36 and 37 of this Resolution.
(3) "Authority' and "Issuer" mean Trinity River Authority of Texas and
any other public body or agency at any time succeeding to the property and
principal rights, power and obligations of said Authority.
(4) "Board" mean the Board of Directors of the Authority.
(5) "Bonds" means collectively the Bonds as described and defined
herein, and all substitute bonds exchanged therefor, as well as all other substitute
and replacement bonds, issued as provided in this Resolution.
(6) "Certified Public Accountant" means any certified public accountant,
licensed public accountant or firm of such public accountants of suitable
experience and qualifications not regularly in the employ of the Authority, selected
by the Authority.
(7) "Cities" means the Cities of Bedford, Euless, Colleyville, Grapevine,
and North Richland Hills, Texas.
(8) "Code" means the United States Internal Revenue Code and any
regulations or rulings promulgated by the U.S. Department of the Treasury
pursuant thereto.
(9) "Contracts" means the contracts between the Authority and the Cities
as described and defined in the preamble to this Resolution.
(10) "Credit Facility' shall mean a policy of municipal bond insurance, a
surety bond or a letter or line of credit, or any other agreement, commitment or
contract authorized by the Authority as a Credit Facility issued by a Credit Facility
Provider in support of any Parity Bonds.
(11) "Credit Facility Provider" shall mean (i) with respect to any Credit
Facility consisting of a policy of municipal bond insurance or a surety bond, an
issuer of policies of insurance insuring the timely payment of debt service on
Resolution No. 22-1628, Page 7 of 47
governmental obligations such as the Parity Bonds, provided that a Rating Agency
having an outstanding rating on the Parity Bonds would rate the Parity Bonds fully
insured by a standard policy issued by the issuer in its highest generic rating
category for such obligations; and (ii) with respect to any other Credit Facility, any
financial institution, provided that a Rating Agency having an outstanding rating on
the Parity Bonds would rate the Parity Bonds in its two highest generic rating
categories for such obligations if the Credit Facility proposed to be issued by such
financial institution secured the timely payment of the entire principal amount of
the series of Parity Bonds and the interest thereon.
(12) "Depository" means the bank or banks which the Authority selects
(whether one or more), in accordance with law, as its depository.
(13) "Eligible Investments" shall mean those investments in which the
Authority is authorized by law, including, but not limited to, the Public Funds
Investment Act of 1987 (Chapter 2256, Texas Government Code), as amended,
to purchase, sell and invest its funds and funds under its control; and provided
further that Eligible Investments shall specifically include, with respect to the
investment of proceeds of any Parity Bonds, guaranteed investment contracts fully
collateralized by Government Obligations.
(14) "Engineering Report' means the Report dated July 1, 1971, and the
supplements thereto with respect to the Authority's Tarrant County Water Project,
all as described and defined in the preamble to this Resolution, as such
Engineering Report may be further amended or supplemented prior to the
execution of construction contracts and changed by change orders entered after
construction contracts have been executed, or as such report may be amended or
supplemented to provide expanded service in the future.
(15) "Fiscal Year" means the twelve-month period beginning December I
of each year, or such other twelve month period as may in the future be designated
as the Fiscal Year of Authority.
(16) "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.
(17) "Independent Consulting Engineer" means the Engineer or
engineering firm or corporation at the time employed by the Authority under the
provisions of Section 31 of this Resolution.
(18) "Net Revenues" means all of the gross revenues or payments
received by the Authority (i) from the Cities under the Contracts and (ii) from the
parties, if any, with whom the Authority may contract in the future for supplying
treated water from the System, after deducting therefrom the amounts paid to the
Authority for the purpose of paying Operation and Maintenance Expenses, with the
S
Resolution No. 22-1628, Page 8 of 47
result that the Net Revenues shall consist of the amounts necessary to pay all
principal and/or interest coming due on the Parity Bonds on each principal and/or
interest payment date, and any amounts payable as descried in Section 15.
(19) "Operation and Maintenance Expenses" means all costs of operation
and maintenance of the System including, but not limited to, repairs and
replacements for which no special fund is created in any bond resolution, the cost
of utilities, supervision, engineering, accounting, auditing, legal services, and any
other supplies, services, administrative costs and equipment necessary for proper
operation and maintenance of the System, and payments made by Authority in
satisfaction of judgments resulting from claims not covered by Authority's
insurance or not paid by one of the Cities arising in connection with the operation
and maintenance of the System. The term also includes the fees of the bank or
banks where the Parity Bonds are payable. Depreciation shall not be considered
an item of Operation and Maintenance Expense.
(20) "Outstanding Bonds" shall have the meaning set forth in the
preamble.
(21) "Parity Bonds" means collectively the Outstanding Bonds, the Bonds
and bonds hereafter issued on a parity therewith.
(22) "Paying Agents" means collectively the banks where the principal of
and interest on the Parity Bonds are payable.
(23) "Pricing Certificate" means a certificate of the General Manager or
the Chief Financial Officer setting forth the terms of sale of the Bonds including the
method of sale, principal amount, maturity dates, interest payment dates, dated
date, interest rates, yields, redemption provisions and other matters related to the
sale of the Bonds.
(24) "Rating Agency" shall mean any nationally recognized securities
rating agency which has assigned a rating to the Parity Bonds.
(25) "Required Amount" shall mean the amount so designated in Section
10 of this Resolution.
(26) "Reserve Fund" shall mean the Fund so designated in Section 10 of
this Resolution.
(27) "Reserve Fund Obligations" shall mean cash, Eligible Investments,
any Credit Facility, or any combination of the foregoing.
(28) "Resolution" means this Resolution authorizing the Bonds.
5
Resolution No. 22-1628, Page 9 of 47
(29) "System" means all of Authority's facilities constructed pursuant to
the Engineering Report, as supplemented or amended.
Section 2. DESIGNATION, DATE, DENOMINATIONS, NUMBERS, MATURITIES
AND SALE OF BONDS.
(a) Each Bond issued pursuant to this Resolution shall, subject to paragraph (b)
of this section, be designated: "TRINITY RIVER AUTHORITY OF TEXAS (TARRANT
COUNTY WATER PROJECT) IMPROVEMENT REVENUE BOND, SERIES 2022."
Except as specified in the Pricing Certificate, initially there shall be issued, sold and
delivered hereunder fully registered Bonds, without interest coupons, dated the Dated
Date, in denomination of any integral $5,000 in principal amount, with the Bonds being
numbered consecutively R-1 upward, except that the initial Bond shall be numbered T-1
and be in the aggregate principal amount of the Bonds, with Bonds issued in replacement
thereof being in the respective Principal Amounts and Maturity Amounts as specified in
the Pricing Certificate, payable to the respective Registered Owner thereof (with the initial
Bonds being made payable to the Purchaser), or to the registered assignee or assignees
of said Bonds.
(b) As authorized by Chapter 1371, Texas Government Code, as amended, the
General Manager and the Chief Financial Officer of the Issuer are each hereby
designated as the "Authorized Office" of the Issuer, and is hereby authorized, appointed,
and designated as the officer or employee of the Issuer authorized to act on behalf of the
Issuer in the selling and delivering of the Bonds and carrying out the other procedures
specified in this Resolution, including the use of a book -entry -only system with respect to
the Bonds and the execution of an appropriate letter of representations if deemed
appropriate, the determining and fixing of the date of the Bonds, any additional or different
designation or title by which the Bonds shall be known, the price at which the Bonds will
be sold, the aggregate principal amount of the Bonds and the amount of each maturity of
principal thereof, the due date of each such maturity (not exceeding forty years from the
date of the Bonds), the rate of interest to be borne by each such maturity, the interest
payment dates and periods, the dates, price and terms upon and at which the Bonds shall
be subject to redemption prior to due date or maturity at the option of the Issuer, any
mandatory sinking fund redemption provisions, procuring municipal bond insurance,
including the execution of any commitment agreements, membership agreements in
mutual insurance companies, and other similar agreements, and approving modifications
to this Resolution and executing such instruments, documents and agreements as may
be necessary with respect thereto, if it is determined that such insurance would be
financially desirable and advantageous, modifying the securities that are eligible as
Defeasance Securities, and all other matters relating to the issuance, sale and delivery
of the Bonds. The Authorized Officer, acting for and on behalf of the Issuer, is authorized
to arrange for the Bonds to be sold at a private placement, negotiated or competitive sale,
at such price, in the aggregate principal amount not exceeding the maximum amount set
forth in Section 1 hereof, with such maturities of principal, with such interest rates, and
with such optional and mandatory sinking fund redemption provisions, if any, and other
matters, as shall be set forth in a certification by the Authorized Officer. The Bonds shall
0
Resolution No. 22-1628, Page 10 of 47
not be sold at a price less than 95% of the initial aggregate principal amount thereof plus
accrued interest thereon from their date to their delivery and no Bond shall bear interest
at a rate greater than 10% per annum. The Authorized Officer shall determine if the
provisions of Rule 15c2-12 of the United States Securities and Exchange Commission
are required to be complied with and, if required, the information to be provided by the
Issuer. It is further provided, however, that, notwithstanding the foregoing provisions,
the Bonds shall not be delivered unless, prior to their delivery, the Bonds have been rated
by a nationally recognized rating agency for municipal long-term obligations, as required
by said Chapter 1371, Texas Government Code, as amended.
(c) Sale Parameters. In establishing the aggregate principal amount of the Bonds,
the Authorized Officer shall establish an amount within the amount authorized in Section
1 hereof, which amount shall be sufficient to provide for (i) the funding of the Reserve
Fund, if any, as hereinafter required or permitted, as deemed appropriate, (ii) the payment
of the costs of issuance of the Bonds and (iii) the funding of the costs of acquisition and
construction of improvements, betterments, extensions and replacements of the Trinity
River Authority of Texas Tarrant County Water Project (with a maximum principal amount
of Bonds of $35,935,000).
(d) If the Authorized Officer determines that the Bonds should be sold by private
placement, the Authorized Officer shall select the purchaser which, after due
consideration and investigation, is willing to buy the Bonds on the most advantageous
terms to the Issuer as determined by the Authorized Officer.
(e) If the Authorized Officer determines that the Bonds should be sold by a
negotiated sale, the Authorized Officer shall designate the senior managing underwriter
for the Bonds and such additional investment banking firms as deemed appropriate to
assure that the Bonds are sold on the most advantageous terms to the Issuer. The
Authorized Officer, acting for and on behalf of the Issuer, is authorized to enter into and
carry out the terms of a bond purchase contract for the Bonds to be sold by negotiated
sale, with the underwriter(s) thereof at such price, with and subject to such terms as
determined by the Authorized Officer subject to the parameters set forth in this
Resolution. The Authorized Officer shall cause to be prepared an official statement in
such manner as the Authorized Officer deems appropriate.
(f) If the Authorized Officer determines that the Bonds should be sold at a
competitive sale, the Authorized Officer shall cause to be prepared a notice of sale and
official statement in such manner as the Authorized Officer deems appropriate, to make
the notice of sale and official statement available to those institutions and firms wishing
to submit a bid for the Bonds, to receive such bids, and to award the sale of the Bonds to
the bidder submitting the best bid in accordance with the provisions of the notice of sale.
(g) The authority of the Authorized Officer to sell the Bonds as described in Section
2 of this Resolution shall expire on the one-year anniversary date of the adoption of this
Resolution by the Board.
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Resolution No. 22-1628, Page 11 of 47
Section 3. CHARACTERISTICS OF THE BONDS.
(a) Registration, Transfer, Conversion and Exchange; Authentication. The Issuer
shall keep or cause to be kept at the principal corporate trust office of BOKF, NA, Dallas,
Texas, or other entity designated in the Pricing Certificate (the "Paying Agent/Registrar")
books or records for the registration of the transfer, conversion and exchange of the
Bonds (the "Registration Books"), and the Issuer hereby appoints the Paying
Agent/Registrar as its registrar and transfer agent to keep such books or records and
make such registrations of transfers, conversions and exchanges under such reasonable
regulations as the Issuer and Paying Agent/Registrar may prescribe; and the Paying
Agent/Registrar shall make such registrations, transfers, conversions and exchanges as
herein provided. The Paying Agent/Registrar shall obtain and record in the Registration
Books the address of the registered owner of each Bond to which payments with respect
to the Bonds shall be mailed, as herein provided; but it shall be the duty of each registered
owner to notify the Paying Agent/Registrar in writing of the address to which payments
shall be mailed, and such interest payments shall not be mailed unless such notice has
been given. The Issuer shall have the right to inspect the Registration Books during
regular business hours of the Paying Agent/Registrar, but otherwise the Paying
Agent/Registrar shall keep the Registration Books confidential and, unless otherwise
required by law, shall not permit their inspection by any other entity. The Issuer shall
pay the Paying Agent/Registrar's standard or customary fees and charges for making
such registration, transfer, conversion, exchange and delivery of a substitute Bond or
Bonds. Registration of assignments, transfers, conversions and exchanges of Bonds
shall be made in the manner provided and with the effect stated in the FORM OF BOND
set forth in this Resolution. Each substitute Bond shall bear a letter and/or number to
distinguish it from each other Bond.
Except as provided in Section 3(c) hereof, an authorized representative of the
Paying Agent/Registrar shall, before the delivery of any such Bond, date and manually
sign said Bond, and no such Bond shall be deemed to be issued or outstanding unless
such Bond is so executed. The Paying Agent/Registrar promptly shall cancel all paid
Bonds and Bonds surrendered for conversion and exchange. No additional ordinances,
orders, or resolutions need be passed or adopted by the governing body of the Issuer or
any other body or person so as to accomplish the foregoing conversion and exchange of
any Bond or portion thereof, and the Paying Agent/Registrar shall provide for the printing,
execution, and delivery of the substitute Bonds in the manner prescribed herein, and said
Bonds shall be of type composition printed on paper with lithographed or steel engraved
borders of customary weight and strength. Pursuant to Subchapter D, Chapter 1201,
Texas Government Code, the duty of conversion and exchange of Bonds as aforesaid is
hereby imposed upon the Paying Agent/Registrar, and, upon the execution of said
Certificate, the converted and exchanged Bond shall be valid, incontestable, and
enforceable in the same manner and with the same effect as the Bonds which initially
were issued and delivered pursuant to this Resolution, approved by the Attorney General,
and registered by the Comptroller of Public Accounts.
(b) Payment of Bonds and Interest. The Issuer hereby further appoints the
Resolution No. 22-1628, Page 12 of 47
Paying Agent/Registrar to act as the paying agent for paying the principal of and interest
on the Bonds, all as provided in this Resolution. The Paying Agent/Registrar shall keep
proper records of all payments made by the Issuer and the Paying Agent/Registrar with
respect to the Bonds, and of all conversions and exchanges of Bonds, and all
replacements of Bonds, as provided in this Resolution. However, 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 Issuer. Notice of the Special Record Date and of the scheduled
payment date of the past due interest (which shall be 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 registered owner
appearing on the Registration Books at the close of business on the last business day
next preceding the date of mailing of such notice.
(c) In General. The Bonds (i) shall be issued in fully registered form, without
interest coupons, with the principal of and interest on such Bonds to be payable only to
the registered owners thereof, (ii) may or shall be redeemed prior to their scheduled
maturities (notice of which shall be given to the Paying Agent/Registrar by the Issuer at
least 50 days prior to any such redemption date), (iii) transferred and assigned, (iv) may
be converted and exchanged for other Bonds, (v) shall have the characteristics, (vi) shall
be signed, sealed, executed and authenticated, (vii) the principal of and interest on the
Bonds shall be payable, and (viii) shall be administered and the Paying Agent/Registrar
and the Issuer shall have certain duties and responsibilities with respect to the Bonds, all
as provided, and in the manner and to the effect as required or indicated, in the FORM
OF BOND set forth in this Resolution. The Bonds initially issued and delivered pursuant
to this Resolution are not required to be, and shall not be, authenticated by the Paying
Agent/Registrar, but on each substitute Bond issued in conversion of and exchange for
any Bond or Bonds issued under this Resolution the Paying Agent/Registrar shall execute
the PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE, in the form set
forth in the FORM OF BOND.
(d) Substitute Paying Agent/Registrar. The Issuer covenants with the registered
owners of the Bonds that at all times while the Bonds are outstanding the Issuer will
provide a competent and legally qualified bank, trust company, financial institution, or
other agency to act as and perform the services of Paying Agent/Registrar for the Bonds
under this Resolution, and that the Paying Agent/Registrar will be one entity. The Issuer
reserves the right to, and may, at its option, change the Paying Agent/Registrar upon not
less than 120 days written notice to the Paying Agent/Registrar, to be effective not later
than 60 days prior to the next principal or interest payment date after such notice. In the
event that the entity at any time acting as Paying Agent/Registrar (or its successor by
merger, acquisition, or other method) should resign or otherwise cease to act as such,
the Issuer covenants that promptly it will appoint a competent and legally qualified bank,
trust company, financial institution, or other agency to act as Paying Agent/Registrar
under this Resolution. Upon any change in the Paying Agent/Registrar, the previous
Paying Agent/Registrar promptly shall transfer and deliver the Registration Books (or a
Resolution No. 22-1628, Page 13 of 47
copy thereof), along with all other pertinent books and records relating to the Bonds, to
the new Paying Agent/Registrar designated and appointed by the Issuer. Upon any
change in the Paying Agent/Registrar, the Issuer promptly will cause a written notice
thereof to be sent by the new Paying Agent/Registrar to each registered owner of the
Bonds, by United States mail, first-class postage prepaid, which notice also shall give the
address of the new Paying Agent/Registrar. By accepting the position and performing
as such, each Paying Agent/Registrar shall be deemed to have agreed to the provisions
of this Resolution, and a certified copy of this Resolution shall be delivered to each Paying
Agent/Registrar.
(e) Notice of Redemption.
(i) In addition to the notice of redemption set forth in the FORM OF BOND,
the Paying Agent/Registrar shall give notice of redemption of the Bonds by first
class mail, postage prepaid at least thirty (30) days prior to a redemption date to
each registered securities depository and to any national information service that
disseminates redemption notices. In addition, in the event of a redemption
caused by an advance refunding of the Bonds, the Paying Agent/Registrar shall
send a second notice of redemption to the persons specified in the immediately
preceding sentence at least thirty (30) days but not more than ninety (90) days
prior to the actual redemption date. Any notice sent to the registered securities
depositories or such national information services shall be sent so that they are
received at least two (2) days prior to the general mailing or publication date of
such notice. The Paying Agent/Registrar shall also send a notice of prepayment
or redemption to the Registered Owner of any Bond who has not sent the Bonds
in for redemption sixty (60) days after the redemption date.
(ii) Each notice of redemption given by the Paying Agent/Registrar,
whether required in the FORM OF BOND or in this Section, shall contain a
description of the Bonds to be redeemed including the complete name of the
Bonds, the Series, the date of issue, the interest rate, the maturity date, the CUSIP
number, the certificate numbers, the amounts called of each certificate, the
publications and mailing date for the notice, the date of redemption, the redemption
price, the name of the Paying Agent/Registrar and the address at which the Bonds
may be redeemed, including a contact person and telephone number.
(iii) All redemption payments made by the Paying Agent/Registrar to the
Registered Owners shall include a CUSIP number relating to each amount paid to
such Registered Owner.
Section 4. BOOK -ENTRY ONLY SYSTEM.
(a) The Bonds issued in exchange for the Bonds initially issued to the purchaser
specified herein shall be initially issued in the form of a separate single fully registered
Bond for each of the maturities thereof. Upon initial issuance, the ownership of each
In
Resolution No. 22-1628, Page 14 of 47
such Bond shall be registered in the name of Cede & Co., as nominee of The Depository
Trust Company of New York ("DTC"), and except as provided in subsection (f) hereof, all
of the outstanding Bonds shall be registered in the name of Cede & Co., as nominee of
DTC.
(b) With respect to Bonds registered in the name of Cede & Co., as nominee of
DTC, the Issuer and the Paying Agent/Registrar shall have no responsibility or obligation
to any securities brokers and dealers, banks, trust companies, clearing corporations and
certain other organizations on whose behalf DTC was created ("DTC Participane') to hold
securities to facilitate the clearance and settlement of securities transactions among DTC
Participants or to any person on behalf of whom such a DTC Participant holds an interest
in the Bonds. Without limiting the immediately preceding sentence, the Issuer 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 registered owner of Bonds, as shown on the Registration Books, of
any notice with respect to the Bonds, or (iii) the payment to any DTC Participant or any
other person, other than a registered owner of Bonds, as shown in the Registration Books
of any amount with respect to principal of or interest on the Bonds. Notwithstanding any
other provision of this Resolution to the contrary, the Issuer and the Paying
Agent/Registrar shall be entitled to treat and consider the person in whose name each
Bond is registered in the Registration Books as the absolute owner of such Bond for the
purpose of payment of principal and interest with respect to such Bond, for the purpose
of registering transfers with respect to such Bond, and for all other purposes whatsoever.
The Paying Agent/Registrar shall pay all principal of and interest on the Bonds only to or
upon the order of the registered owners, as shown in the Registration Books as provided
in this Resolution, or their respective attorneys duly authorized in writing, and all such
payments shall be valid and effective to fully satisfy and discharge the Issuer's obligations
with respect to payment of principal of and interest on the Bonds to the extent of the sum
or sums so paid. No person other than a registered owner, as shown in the Registration
Books, shall receive a Bond certificate evidencing the obligation of the Issuer to make
payments of principal and interest pursuant to this Resolution. Upon delivery by DTC to
the Paying Agent/Registrar of written notice to the effect that DTC has determined to
substitute a new nominee in place of Cede & Co., and subject to the provisions in this
Resolution with respect to interest checks being mailed to the registered owner at the
close of business on the Record date, the words "Cede & Co." in this Resolution shall
refer to such new nominee of DTC.
(c) Successor Securities Depository' Transfers Outside Book -Entry OnIV SVstem.
In the event that the Issuer determines that DTC is incapable of discharging its
responsibilities described herein and in the representation letter of the Issuer to DTC or
that it is in the best interest of the beneficial owners of the Bonds that they be able to
obtain certificated Bonds, the Issuer shall (i) appoint a successor securities depository,
qualified to act as such under Section 17A of the Securities and Exchange Act of 1934,
as amended, notify DTC and DTC Participants of the appointment of such successor
securities depository and transfer one or more separate Bonds to such successor
11
Resolution No. 22-1628, Page 15 of 47
securities depository or (ii) notify DTC and DTC Participants of the availability through
DTC of Bonds and transfer one or more separate Bonds to DTC Participants having
Bonds credited to their DTC accounts. In such event, the Bonds shall no longer be
restricted to being registered in the Registration Books in the name of Cede & Co., as
nominee of DTC, but may be registered in the name of the successor securities
depository, or its nominee, or in whatever name or names registered owners transferring
or exchanging Bonds shall designate, in accordance with the provisions of this
Resolution.
(d) Payments to Cede & Co. Notwithstanding any other provision of this
Resolution to the contrary, so long as any Bond is registered in the name of Cede & Co.,
as nominee of DTC, all payments with respect to principal of and interest on such Bond
and all notices with respect to such Bond shall be made and given, respectively, in the
manner provided in the representation letter of the Issuer to DTC.
Section 5. FORM OF BONDS. The form of the Bonds, including the form of
Paying Agent/Registrar's Authentication Certificate, the form of Assignment and the form
of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to
be attached to the Bonds initially issued and delivered pursuant to this Resolution, shall
be, substantially in the form provided in Exhibit A, with such appropriate variations,
omissions, or insertions as are permitted or required by this Resolution. The Form of
Bond as it appears in Exhibit A shall be completed, amended and modified by Bond
Counsel to incorporate the information set forth in the Pricing Certificate but it is not
required for the Form of Bond to be reproduced as an exhibit to the Pricing Certificate.
Section 6. BONDS AND SECURITY THEREFOR. The Parity Bonds are and shall
be secured by and payable from a first lien on and pledge of the Net Revenues, as
hereinafter defined, and the funds and accounts hereinafter confirmed or created in this
Resolution; and the Net Revenues are further pledged to the establishment and
maintenance of said funds and accounts as hereinafter provided. The Parity Bonds are
and will be secured by and payable only from the Net Revenues, and are not secured by
or payable from a mortgage or deed of trust on any properties, whether real, personal, or
mixed, constituting the System.
Section 7. REVENUE FUND. All revenues of the System received by the
Authority, including the net proceeds to the Authority of the Contracts with the Cities shall
be collected and paid over promptly upon collection to the Depository and the Authority
hereby covenants and agrees so to do. Such revenues shall be held by the Depository
in a special fund known as the "Trinity River Authority of Texas (Tarrant County Water
Project) Revenue Bonds Revenue Fund" (hereinafter called the "Revenue Fund"), and
shall be disbursed or applied for the purpose of paying Operation and Maintenance
Expenses of the System, and for the making of transfers hereinafter required and in the
order listed.
Section 8. OPERATION AND MAINTENANCE EXPENSES.
12
Resolution No. 22-1628, Page 16 of 47
(a) The term "Operation and Maintenance Expenses" shall mean all costs of
operation and maintenance of the System including, but not limited to, repairs and
replacements for which no special fund is created in any bond resolution, the cost of
utilities, supervision, engineering, accounting, auditing, legal services, and any other
supplies, services, administrative costs and equipment necessary for proper operation
and maintenance of the System, and payments made by Authority in satisfaction of
judgments resulting from claims not covered by Authority's insurance or not paid by one
of the Cities arising in connection with the operation and maintenance of the System.
The term also includes the fees of the bank or banks where the Parity Bonds are payable.
Depreciation shall not be considered an item of Operation and Maintenance Expense.
(b) Except for other transfers herein required, the moneys in the Revenue Fund
shall be subject to withdrawal by the Authority for the payment of Operation and
Maintenance Expenses only upon checks and vouchers or other method of transfer,
stating the purpose of the payment (which shall be in accordance with the current Annual
Budget of the Authority) signed by the President of the Authority or by its Treasurer, or
signed by such officers or employees of the Authority as may from time to time be
designated by resolution of the Board. At the end of each Authority Fiscal Year any
surplus funds remaining in the Revenue Fund shall be transferred to the Interest and
Sinking Fund.
Section 9. INTEREST AND SINKING FUND.
(a) For the sole purpose of paying the principal of and interest on the Parity
Bonds, and any Additional Bonds, as the same come due, there has been created and
established, and there shall be maintained at a Depository, a separate fund entitled the
"Trinity River Authority of Texas (Tarrant County Water Project) Revenue Bonds Interest
and Sinking Fund" (hereinafter called the "Interest and Sinking Fund").
(b) The Issuer shall, immediately after the delivery of the Bonds, deposit into the
Interest and Sinking Fund, from the proceeds of sale of the Bonds, all accrued interest
received upon sale of the Bonds, plus an amount sufficient to pay the interest coming due
on the Bonds during construction, as required and determined by the Authorized Officer,
if any. Said deposit shall be held and applied solely to pay interest on the Bonds as it
becomes due and payable.
(c) It shall be the duty of the Authority to transfer from Net Revenues in the
Revenue Fund to the credit of the Interest and Sinking Fund the amounts and at times as
follows:
(1) such amounts, in equal monthly installments, made on or before the
15th day of each month hereafter, as will be sufficient, together with any other
amounts on deposit therein and available for such purpose, to pay the interest
scheduled to come due on all Parity Bonds and any Additional Bonds on the next
interest payment date; and
13
Resolution No. 22-1628, Page 17 of 47
(2) such amounts, in equal monthly installments, made on or before the
15th day of each month hereafter, as will be sufficient, together with any other
amounts on deposit therein and available for such purpose, to pay the principal of
all Parity Bonds and any Additional Bonds coming due and maturing or required to be
redeemed on the next interest payment date.
(d) The Authority shall make such arrangements as are necessary to insure that
sufficient funds from the Interest and Sinking Fund are available at each Paying Agent to
pay the principal of and interest on all Parity Bonds and Additional Bonds when due.
Section 10. RESERVE FUND.
(a) There is hereby confirmed and there shall be maintained on the books of
the Authority a special Fund entitled the "Trinity River Authority of Texas Tarrant County
Water Project New Reserve Fund" (the "Reserve Fund"), within which there may be
established separate accounts to be held for the benefit of specific issues of Parity Bonds
and not for the benefit of all Parity Bonds. Except for Additional Bonds that are not
secured by the Reserve Fund, the Reserve Fund shall be used only for (i) paying principal
of or interest on the Bonds, Parity Bonds or Additional Bonds when there is not sufficient
money available in the Interest and Redemption Fund for such payments, and (ii) to finally
to pay, redeem or retire the last of the outstanding Bonds, Parity Bonds or Additional
Bonds. There shall be deposited into the Reserve Fund any Reserve Fund Obligations
so designated by the Authority. Reserve Fund Obligations in the Reserve Fund shall be
deposited and maintained in a Depository. Reserve Fund Obligations in the Reserve
Fund shall be used solely for the purpose of retiring the last of any Parity Bonds for which
the Reserve Fund, or an account within the Reserve Fund, is held as they become due
or paying principal of and interest on any such Parity Bonds when and to the extent the
amounts in the Interest and Sinking Fund are insufficient for such purpose. Any specific
Reserve Fund account shall be maintained in an amount equal to the average annual
principal and interest requirements of the specific Parity Bonds to which it relates (the
"Required Amount').
(b) The Authority may, at its option, withdraw and transfer to the Revenue Fund,
all surplus in the Reserve Fund over the Required Amount. The foregoing
notwithstanding, with respect to the issuance of the Bonds, the Authorized Officer may
direct the transfer of any surplus in the Reserve Fund to be deposited into the
Construction and Acquisition Fund.
(c) The Authority may replace or substitute a Credit Facility for cash or Eligible
Investments on deposit in the Reserve Fund or in substitution for or replacement of any
existing Credit Facility. Upon such replacement or substitution, cash or Eligible
Investments on deposit in the Reserve Fund which, taken together with the face amount
of any existing Credit Facilities, are in excess of the Required Amount may be withdrawn
by the Authority, at its option, and transferred to the Revenue Fund; provided that the face
amount of any Credit Facility may be reduced at the option of the Authority in lieu of such
transfer.
14
Resolution No. 22-1628, Page 18 of 47
(d) If the Authority is required to make a withdrawal from the Reserve Fund for
any of the purposes described in subsection (a), the Authority shall promptly notify any
applicable Credit Facility Provider of the necessity for a withdrawal from the Reserve Fund
for any such purposes, and shall make such withdrawal first from available moneys or
Eligible Investments then on deposit in the Reserve Fund, and next from a drawing under
any Credit Facility to the extent of such deficiency.
(e) In the event of a deficiency in the Reserve Fund, or in the event that on the
date of termination or expiration of any Credit Facility there is not on deposit in the
Reserve Fund sufficient Reserve Fund Obligations, all in an aggregate amount at least
equal to the Required Amount, then the Authority shall satisfy the Required Amount by
depositing Reserve Fund Obligations into the Reserve Fund in monthly installments of
not less than 1/60 of the Required Amount made on or before the 15th day of each month
following such termination or expiration.
(f) In the event of the redemption or defeasance of any Parity Bonds, any Reserve
Fund Obligations on deposit in the Reserve Fund in excess of the Required Amount may
be withdrawn and transferred, at the option of the Authority, to the Revenue Fund, as a
result of (i) the redemption of any Parity Bonds or (ii) funds for the payment of any Parity
Bonds having been deposited irrevocably with the paying agent or place of payment
therefor in the manner described in any resolution authorizing the issuance of Parity
Bonds, the result of such deposit being that such Parity Bonds no longer are deemed to
be Outstanding under the terms of any such resolution.
(g) In the event there is a draw upon the Credit Facility, the Authority shall
reimburse the Credit Facility Provider for such draw, in accordance with the terms of any
agreement pursuant to which the Credit Facility is issued, from Net Revenues, however,
such reimbursement from Net Revenues shall be subordinate and junior in right of
payment to the payment of principal of and premium, if any, and interest on the Parity
Bonds.
(h) Upon the issuance of Additional Bonds the monies in the Reserve Fund shall,
to the extent necessary, be increased to the newly -established Required Amount. If any
series of Additional Bonds is issued and not secured by the Reserve Fund, the debt
service on such series shall not be taken into account when calculating the Required
Amount.
Section 11. CONSTRUCTION AND ACQUISITION FUND. There has been
created and there shall be established and maintained at the Depository a separate fund
to be entitled the "Trinity River Authority of Texas (Tarrant County Water Project)
Revenue Bonds Construction and Acquisition Fund" (hereinafter called the "Construction
and Acquisition Fund"). The net proceeds (after paying costs of issuance and making
other required deposits) from the sale of all "Improvement Bonds" in the future shall be
deposited in the Construction and Acquisition Fund and such Fund shall be subject to
and charged with a lien in favor of the holders of all such "Improvement Bonds" until the
15
Resolution No. 22-1628, Page 19 of 47
money in said Fund has been paid out as herein provided. Interest earnings derived
from investment of the Construction and Acquisition Fund shall become part thereof for
all purposes; provided, however, that any such earnings required to be rebated to the
United States shall not be considered as interest earnings for the purposes of this
Resolution. The Depository shall be required to secure the Construction and Acquisition
Fund in its possession by pledging obligations of or obligations unconditionally
guaranteed by the United States; such obligations at all times shall be at least equal in
market value to the amount in the Construction and Acquisition Fund in its possession.
Section 12. DISBURSEMENTS FROM CONSTRUCTION AND ACQUISITION
to]01�
(a) Money in the Construction and Acquisition Fund shall be subject to
disbursement by the Authority for payment of Project Costs to be incurred in the
acquisition and construction of any project for which "Improvement Bonds" are issued.
Such disbursements shall be made only upon checks stating the purpose of the payment
signed and countersigned by such officers of the Authority as may from time to time be
designated by the Authority by resolution, and duly certified to the Depository.
Disbursements for payments to construction contractors and disbursements for
construction material, supplies, and equipment shall be approved by a registered
professional engineer.
(b) "Project Costs" as used herein includes all acquisition costs and construction
costs as those terms are generally understood in standard accounting practice as applied
to projects of this nature, and without limiting the generality of the foregoing, it shall
include purchase of equipment, property, rights in property, capitalized interest, costs of
land, easements, and rights of way, including damages to land and property, engineering,
financing, financial consultants, administrative, auditing, and legal expenses incurred in
connection with the performance of the Contracts. The costs for engineering, financial
consultants, administrative, and legal expense paid from bond proceeds incurred by the
Authority shall be reasonable and at usual and customary rates. Damages to land and
property, whenever accruing, adjusted under Article I, Section 17 of the Constitution of
Texas shall constitute a part of Project Costs. After completion of any Project
improvements, any residue remaining in the Construction and Acquisition Fund shall be
deposited in the Interest and Sinking Fund.
Section 13. TRUST FUNDS. The Interest and Sinking Fund and the Reserve
Fund shall constitute trust funds and shall be held in trust by a Depository for the benefit
of the holders of the Parity Bonds and Additional Bonds permitted hereunder.
Section 14. SECURITY OF FUNDS. The Authority shall cause the Depository
to secure and keep secured, in the manner required by law, all funds on deposit with it,
and will cause each paying agent to secure all funds deposited with it or them as other
trust funds are secured. The Authority covenants and agrees that no money will be
allowed to be or remain deposited with the Depository unless secured as above provided.
E
Resolution No. 22-1628, Page 20 of 47
Section 15. PLEDGE. (a) The Contracts provide for the payment by the Cities
to the Authority (a) an amount equal to all Operation and Maintenance Expenses, (b) the
amount necessary to pay all the principal of and the interest coming due on "Bonds" (as
defined in the Contracts) on each principal and/or interest payment date, (c) during each
Fiscal Year, the proportionate part of any special or reserve funds required to be
established and/or maintained by the provisions of any "Bond Resolutions", and (d) an
amount in addition thereto sufficient to restore any deficiency in any of such funds or
accounts required to be accumulated and maintained by the provisions of any "Bond
Resolutions."
(b) The term "Net Revenues" as used in this Resolution shall mean and be
defined as all of the gross revenues or payments received by the Authority (i) from the
Cities under the Contracts and (ii) from the parties, if any, with whom the Authority may
contract in the future for supplying treated water from the System, after deducting
therefrom the amounts paid to the Authority for the purpose of paying Operation and
Maintenance Expenses, with the result that the Net Revenues shall consist of the
amounts necessary to pay all principal and/or interest coming due on the Parity Bonds on
each principal and/or interest payment date, and any amounts payable under (c) and (d)
above. The Parity Bonds and the interest thereon are and shall be payable from and
secured by a first lien on and pledge of said Net Revenues, and said Net Revenues are
hereby pledged for such purpose and to the establishment and maintenance of the
Interest and Sinking Fund and the Reserve Fund.
Section 16. INVESTMENT OF FUNDS. The money in all Funds maintained
hereunder shall be invested and reinvested in Eligible Securities which mature in not more
than fifteen (15) years from the date of their purchase. The foregoing notwithstanding,
the Reserve Fund and Construction and Acquisition Fund may be invested as described
in Sections 10 and 11, respectively. All income and profits from the investment of all
funds hereunder shall be deposited in the Interest and Sinking Fund not later than the
January 15 or July 15 next following the receipt thereof.
Section 17. PREPARATION OF BUDGET. Not less than forty (40) days before
the commencement of each Fiscal Year while any of the Parity Bonds are outstanding
and unpaid, the Authority will prepare and file with the Cities the annual budget (herein
called "Annual Budget") of Operation and Maintenance Expenses for the ensuing Fiscal
Year, and, except as otherwise provided, the total expenditures in any division thereof will
not exceed the total expenditures in the corresponding division in the Annual Budget.
The Authority covenants that the current Operation and Maintenance Expenses incurred
in any Fiscal Year will not exceed the reasonable and necessary amount of such
expenses, and that it will not expend any amount or incur any obligation for maintenance,
repair, and operation in excess of the amounts provided for current Operation and
Maintenance Expenses in the Annual Budget; provided, however, that if at any time the
Board shall determine that the amount of the appropriation for any item in the Annual
Budget is in excess of the amount which will be required for such term, the Board may
reduce such appropriation and make appropriation for any item or items not covered by
the Annual Budget or increase the appropriation for any other item or items by an amount
[GI
Resolution No. 22-1628, Page 21 of 47
not exceeding the amount of such reduction; and provided further, that the Board may at
any time adopt an amended or supplemental budget for the remainder of the then current
Fiscal Year in case of an emergency caused by some extraordinary occurrence which
shall be clearly defined in such resolution. Any such supplemental budget shall be filed
immediately with the Cities.
Section 18. ACCOUNTING AND REPORTING. The Authority covenants that
proper books of record and account will be kept in which true, full, and correct entries will
be made of all income, expense, and transactions of and in relation to the System, and
each and every part thereof. Within six months after each full Fiscal Year, a statement
certified as correct by a Certified Public Accountant showing the Gross Revenues and the
Operation and Maintenance Expenses for such Fiscal Year, shall be furnished to the
Cities, and to the original purchasers of the Bonds. Each such audit will be available
during regular office hours at the administration offices of the Authority for inspection by
any holder of any of the Bonds.
Section 19. PUBLIC INSPECTION. The Authority further covenants and agrees
that the System, and each and every part thereof, and all books, records, accounts,
documents, and vouchers relating to the construction, operation, maintenance, repair,
improvement, and extension thereof, will at all times be open to inspection by the Cities.
Section 20. PAYMENT OF PARITY BONDS AND INTEREST THEREON. The
Authority covenants and agrees that, out of the pledged Net Revenues, it will duly and
punctually pay, or cause to be paid, the principal of every Parity Bond and the interest
thereon, on the date and at the place and in the manner specified in the Parity Bonds,
and that it will faithfully do and perform and at all times fully observe any and all
covenants, undertakings, and provisions contained herein or in any Parity Bond.
Section 21, LEGAL ABILITY. The Authority represents that it is a conservation
and reclamation district, a political subdivision of the State of Texas, and a governmental
agency and body politic and corporate, duly created, organized, and existing under the
Constitution and laws of the State of Texas and has proper authority from all other public
bodies and authorities, if any, having jurisdiction thereof to construct, acquire, operate,
maintain, improve, extend, better, repair, renew, and replace the System as herein
described, and to levy and collect rates, tolls, rents, fees, and other charges, and to
pledge its revenues in the manner and form as herein done or intended, and that all
corporate action on its part to that end has been duly and validly taken. The Authority
covenants and agrees that it will at all times maintain its corporate existence and maintain
a lawful Board of Directors, and at all times function and act in the best interest of the
System and the owners and holders of the Parity Bonds.
Section 22. CONSTRUCTION AND OPERATION. The Authority further
covenants that it will forthwith proceed to acquire and construct the improvements,
betterments, extensions, and replacements to the System for which the Bonds are being
issued as soon as practicable in accordance with plans and specifications which have
been prepared by the Independent Consulting Engineer, and thereafter each and every
18
Resolution No. 22-1628, Page 22 of 47
part of the System will be continuously operated by the Authority in an efficient and
economical manner and will be kept in thorough repair and maintained in a high state of
operating efficiency and in such manner that the interest of the Cities, the people of the
State of Texas, the bondholders or owners, and the Authority will be promoted.
Section 23. OPERATION OF THE SYSTEM. The Authority shall use its best
efforts to see that the System is properly and efficiently operated.
Section 24. CONTRACTORS. Authority shall require each person, firm, or
corporation with whom (or which) it may contract for construction in connection with the
System to furnish a performance bond in the full amount of any contract and a payment
bond as required by law, and to carry such workmen's compensation or employers' liability
insurance as may be required by law and such public liability, property damage, and
builders' risk insurance, if any, as may be appropriate and necessary. The Authority
further covenants and agrees that the proceeds of any such performance bond will
forthwith, upon receipt of such proceeds, be applied toward the completion of the contract
in connection with which such performance bond shall have been furnished.
Section 25. COVENANT TO MAINTAIN SUFFICIENT INCOME. To the end that
Authority income will be sufficient to pay the Parity Bonds and the interest thereon when
due, the Authority will keep in effect and enforce the Contracts, and will cause the System
to be operated and maintained at an annual cost that will be within its income other than
the income required to pay the Parity Bonds and the interest thereon and the fees of each
paying agent and Paying Agent/Registrar. The Authority will not voluntarily consent to
any amendment to the Contracts which would reduce the amounts payable thereunder or
extend the time of the payment of such amounts or which would in any manner impair or
adversely affect the rights of the holders or owners of the Parity Bonds from time to time.
If any of the Cities fails to make payments as required by the Contracts and if it shall
appear that enforcement of the Contracts has become ineffective or will be ineffective to
the extent that a default in payment of principal of or interest on the Parity Bonds occurs
or is threatened, the Authority will take all necessary action to preserve and protect the
rights of the holders or owners of the Parity Bonds and to assure payment of the principal
thereof and the interest thereon.
Section 26. NO OTHER LIENS. The Authority further covenants that there is
not now outstanding, except as regards any Parity Bonds, and that the Authority will not
at any time while the Parity Bonds are outstanding, create or allow to accrue or to exist
any lien upon the System, or any rights owned, or the revenues pledged herein to the
payment of the principal of and interest on the Parity Bonds, at any time derived from the
operation thereof, or any of its Funds, except as authorized by Sections 36 and 37 of this
Resolution in connection with Additional Bonds and other bonds; that the security of the
Parity Bonds will not be impaired in any way as a result of any action or any non -action
on the part of the Authority, its Board of Directors, or officers, or any thereof, and that the
Authority has, and will, subject to the provisions hereof, continuously preserve good and
indefeasible title to the System and each and every part thereof.
19
Resolution No. 22-1628, Page 23 of 47
Section 27. KEEP FRANCHISES AND PERMITS IN EFFECT, The Authority
further covenants that no franchises, permits, privileges, or easements will be allowed to
lapse or be forfeited so long as the same shall be necessary for the proper operation of
the System.
Section 28. GOVERNMENTAL REQUIREMENTS; LIENS; CLAIMS. The
Authority covenants that it will duly observe and comply with all valid requirements of any
governmental authority relative to the System or any part thereof, and that it will pay or
cause to be discharged, or will make adequate provision to satisfy and discharge, all
lawful claims and demands for labor, materials, supplies, or other objects which if unpaid,
might by law become a lien upon such System or any part thereof or the revenue
therefrom; provided, however, that nothing in this Section contained shall require the
Authority to pay or cause to be discharged, or make provision for, any such lien or charge,
so long as the validity thereof shall be contested in good faith and by appropriate legal
proceedings.
Section 29. FURTHER ASSURANCE. The Authority covenants that it will take
such further action as may be required to carry out the purposes of this Resolution and
to assure its validity.
Section 30. SALE AND LEASE OF PROPERTY.
(a) The Authority covenants that so long as any of the Parity Bonds or interest
payable thereon shall be outstanding, and except as in this Section otherwise permitted,
it will not sell, lease, or otherwise dispose of or encumber any part of the System except
as provided herein.
(b) The Authority may from time to time dispose of any rights, machinery, fixtures,
apparatus, tolls, instruments, or other movable property and any materials used in
connection therewith, if the Authority shall determine that such are no longer needed or
are no longer useful in connection with the operation and maintenance of the System.
The Authority may from time to time sell such real estate that is not needed or serves no
useful purposes in connection with the maintenance and operation of the System. The
proceeds of any sale of real or personal property acquired from the proceeds of the Parity
Bonds shall be deposited in the Revenue Fund.
(c) The Authority may lease any of its lands for any purpose, if such lease or the
use of such lands will not be detrimental to the operation and maintenance of the System.
It may also lease any of its real property for oil, gas, and mineral purposes. No lease
shall be made which will result in any damage to or substantial diminution of the value of
other property of the Authority. The rental to be charged under all such leases shall be
not less than the fair and reasonable rental in relation to the character and value of the
property leased. All rentals, revenues, receipts, and royalties derived by the Authority
from any and all leases so made, shall be deposited in the Revenue Fund.
(d) It is covenanted and agreed by Authority that no such property of any nature
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shall be sold or leased by Authority unless, prior to any action taken by Authority
concerning such sale or leasing, Authority shall procure the advice and recommendation
in writing of a registered professional engineer concerning such proposed sale or leasing.
Section 31. INDEPENDENT ENGINEER.
(a) The Authority covenants that, until the Parity Bonds and the interest thereon
shall have been paid or provision for such payment shall have been made, it will, for the
purpose of performing and carrying out the duties imposed on the Independent Consulting
Engineer by this Resolution, employ an independent engineer or engineering firm or
corporation having a favorable repute for skill and experience in such work.
(b) The Authority covenants that it will at all appropriate times cause the
Independent Consulting Engineer to submit and give all necessary or desirable advice
and recommendations concerning renewals, replacements, extensions, betterments, and
improvements for the System, to the end that the System shall be operated and
maintained in the most efficient and satisfactory manner. Further, Authority shall cause
the Independent Consulting Engineer to make in writing a full survey, review, and report
on the physical condition of the System once every three years.
(c) Authority further covenants that it will cause the Independent Consulting
Engineer to make an annual report to it which shall set forth such Engineer's
recommendations and advice as to (1) the proper maintenance, repair, and operation of
the System, including their findings as to whether or not the properties of the System have
been maintained in good repair and sound operating condition; (2) the extensions,
improvements, renewals, and replacements which should be made during the ensuing
Fiscal Year; (3) the amounts and types of insurance which should be carried by the
Authority on the properties; and (4) any revisions or changes of rates, fees, and charges.
(d) The expense incurred under this Section 31 shall constitute Operation and
Maintenance Expenses.
Section 32. PARITY BONDS AND INTEREST NOT PAYABLE FROM TAXES.
The holders and owners of the Parity Bonds and the interest payable thereon shall never
have the right to demand payment thereof out of funds raised or to be raised by taxation,
or from any source other than the Net Revenues as defined and described herein.
Section 33. INSURANCE COVERAGE. The Authority covenants that it will at all
times keep insured such of the System's plants, structures, buildings, stations, machinery,
equipment, apparatus, 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 workmen's
compensation insurance and insurance against public liability and property damages, in
a reasonable amount with responsible insurance companies; provided, however, that at
any time while any contractor engaged in construction work shall be fully responsible
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Resolution No. 22-1628, Page 25 of 47
therefor, the Authority shall not be required to carry such insurance. All such policies
shall be open to the inspection of the bondholders and their representatives at all
reasonable times.
Section 34. INSURANCE PROCEEDS. In the event of any loss of or damage to
the System the Authority covenants that it will reconstruct or repair the destroyed or
damaged portion of the property and will apply the proceeds of the insurance policies
covering such loss or damage solely for that purpose. The Authority covenants that it
will begin such work of reconstruction or repair promptly after such loss or damage shall
occur and will continue and properly complete the same as expeditiously as possible and
will pay or cause to be paid all costs and expenses in connection therewith so that the
same shall be so completed and the property be free and clear of all mechanics' and other
liens and claims. The Authority agrees that it will procure the advice and
recommendation in writing of a registered professional engineer concerning such
reconstruction before it is undertaken.
Section 35. UNUSED INSURANCE PROCEEDS. Any insurance proceeds
remaining after the completion of and payment for any such reconstruction or repair shall
be deposited in the Revenue Fund.
Section 36. ADDITIONAL BONDS. As used in this resolution, the following
additional definitions shall apply:
(a) "Completion Bonds" means any bonds issued to complete construction of the
System to enable the Authority to provide water supply services to the Cities and to
others, as the System is described in the Engineering Report defined in the Contracts.
(b) "Improvement Bonds" means bonds issued for improvements, betterments,
extensions, and replacements of the System.
(c) "Special Project Bonds" means any bonds issued to finance construction
and/or acquisition of facilities which will not constitute a part of the System and which will
not be paid out of revenues from the Contracts.
(d) "Refunding Bonds" means any bonds issued for the purpose of refunding all
or a part of the Prior Lien Bonds, Parity Bonds or Additional Bonds.
(e) "Additional Bonds" means and includes Completion Bonds, Improvement
Bonds, and Refunding Bonds.
Section 37. COMPLETION BONDS AND IMPROVEMENT BONDS. The
Authority reserves the right to issue Completion Bonds and Improvement Bonds payable
from and secured by a pledge of the Net Revenues, on a parity of lien with the Parity
Bonds, or junior to the Parity Bonds, or a portion of them may be such first lien bonds and
a portion may such junior lien bonds. The Completion Bonds and Improvement Bonds
may be issued in one or more series or installments, and from time to time as authorized
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by the Board, provided, however, that no installment or series of Completion Bonds or
Improvement Bonds, if it is on a parity with the lien of the Parity Bonds, shall be issued
unless:
(a) A certificate is executed by the President and Secretary of the Board to the
effect that no default exists in connection with any of the covenants or requirements of
the resolutions authorizing the issuance of all then outstanding bonds which are secured
by and payable from the Net Revenues;
(b) A certificate is executed by the President and the Secretary of the Board to
the effect that the Interest and Sinking Fund and the Reserve Fund contain the amounts
then required to be on deposit;
(c) The then proposed Completion Bonds or Improvement Bonds are made to
mature on August 1 and/or February 1 of each of the years in which they are scheduled
to mature.
Section 38. SPECIAL PROJECT BONDS. Special Project Bonds payable from
and secured by revenues may be issued by the Authority for the purpose of providing
additional facilities to enable the Authority to render service to other users, provided that
such Special Project Bonds are not payable from or secured by a pledge of Net
Revenues, Special Project Bonds may be additionally secured by a mortgage or deed
of trust lien upon only the physical properties of the project purchased or constructed with
the proceeds of such bonds.
Section 39. INCREASE IN RESERVE FUND.
(a) Except as provided in subsection (b), if Additional Bonds are issued as Parity
Bonds, the amount required to be deposited and maintained in the Reserve Fund shall, if
necessary to maintain the Required Amount in the Reserve Fund, be increased so that
the aggregate amount to be accumulated in the Reserve Fund shall be no less than the
Required Amount for all then outstanding Parity Bonds and for the installment or series
of parity Additional Bonds then proposed to be issued. Such average annual
requirements shall be calculated as of the date of any such Additional Bonds. Provided,
as of the date of any such Additional Bonds, it shall be sufficient if the aggregate amount
in the Reserve Fund is equal to the average annual requirement on the Parity Bonds and
Additional Bonds outstanding and to be outstanding, and if the amount exceeds such
average annual requirement, any surplus in the Reserve Fund may be transferred to the
Revenue Fund, unless otherwise required by any bond resolution.
(b) Notwithstanding subsections (a) of this Section, the resolution authorizing a
future issue of Additional Bonds may provide that such series shall not be secured by the
Reserve Fund. Such series of Additional Bonds shall nevertheless be secured by and
made payable equally and ratably on a parity with the Parity Bonds from a first lien on
and pledge of the Net Revenues. The Interest and Sinking Fund shall also secure and
be used to pay such proposed series of Additional Bonds. If such series of Additional
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Resolution No. 22-1628, Page 27 of 47
Bonds is issued and not secured by the Reserve Fund, the debt service on such series
shall not be taken into account when calculating the average annual principal and interest
requirements of the Parity Bonds to determine the Required Amount.
Section 40. TAX BONDS. No provisions in this Resolution shall in any way
affect the statutory right of the Authority to issue bonds supported wholly by ad valorem
taxes.
Section 41. REFUNDING BONDS. The Authority reserves the right to issue
Refunding Bonds to refund any outstanding bonds secured by a pledge of the Net
Revenues from the Contracts and any amendments thereof.
Section 42. DEFAULT PROVISIONS AND REMEDIES. In the event of a default
or a threatened default in the payment of principal of or interest on the Parity Bonds, any
court of competent jurisdiction may, upon petition of holders or owners of twenty-five per
cent of the outstanding Parity Bonds, appoint a receiver with authority to collect and
receive all income from the System, employ, and discharge agents, employees, and
consultants of the Authority, take charge of pledged funds on hand and manage the
proprietary affairs of the Authority without consent or hindrance by the Board. Such
receiver may also be authorized to make contracts for providing water treatment services
or renew such contracts with the approval of the court appointing him. The Court may
vest the receiver with such other powers and duties as the court may find necessary for
the protection of the holders or owners of the Parity Bonds.
Section 43. OTHER REMEDIES; REMEDIES NOT WAIVED. No remedy herein
specified is intended to be exclusive of any other available remedy or remedies, but each
and every such remedy shall be cumulative and shall be in addition to every other remedy
available to the holders or owners of the said Parity Bonds, or now or hereafter existing
at law or in equity, or by statute. No delay or omission to exercise any right or power
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 and power may be exercised from
time to time and so often as may be deemed expedient.
Section 44. AMENDMENTS OF RESOLUTION BY AUTHORITY. Without any
prior action by or notice to the holders or owners of the Parity Bonds, Authority may, from
time to time, and at any time, amend this Resolution:
(a) to add to the covenants and undertakings of the Authority contained in this
Resolution such additional covenants and undertakings as may be authorized or
permitted by law; and
(b) to cure any ambiguous, defective, or inconsistent provisions of this Resolution
and to accomplish any other purposes not inconsistent with the provisions of this
Resolution and which shall not impair the security afforded hereby.
Section 45. AMENDMENTS BY CONSENT. The holders and owners of Parity
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Resolution No. 22-1628, Page 28 of 47
Bonds and Additional Bonds aggregating in principal amount two-thirds of the aggregate
principal amount of the Parity Bonds and Additional Bonds at the time outstanding (but
not including in any case any Parity Bonds or Additional Bonds which may then be held
or owned by or for the account of the Authority) shall have the right from time to time to
approve an amendment of this Resolution which may be deemed necessary or desirable
by the Authority; provided, however, that no amendment, without the consent of the
holders and owners of all of the outstanding Parity Bonds and Additional Bonds, shall:
:• •
(a) Make any change in the maturity of the Parity Bonds or Additional Bonds;
(b) Reduce the rate of interest borne by any of the Parity Bonds or Additional
(c) Reduce the amount of the principal payable on the Parity Bonds or Additional
(d) Modify the terms of payment of principal of or interest on the Parity Bonds or
Additional Bonds, or any of them, or impose any conditions with respect to such payment;
(e) Affect the rights of the holders or owners of less than all of the Parity Bonds
and Additional Bonds then outstanding; or
(f) Change the minimum percentage of the principal amount of Parity Bonds and
Additional Bonds necessary for consent to such amendment.
Section 46. NOTICE REQUIRED. If at any time the Authority shall desire to
amend this Resolution under Section 45, the Authority shall cause notice of the proposed
amendment to be published in a financial newspaper or journal published in the City of
New York, New York, once during each calendar week for at least four successive
calendar weeks. Such notice shall briefly set forth the nature of the proposed
amendment and shall state that a copy thereof is on file with each paying agent for the
Parity Bonds and Additional Bonds and with the Secretary of the Board for inspection by
all holders or owners of Parity Bonds and Additional Bonds. Such publication is not
required, however, if notice in writing is given to each holder and owner of Parity Bonds
and Additional Bonds.
Section 47. ADOPTION OF AMENDMENT. Whenever at anytime not less than
thirty (30) days and within one year from the date of the first publication of said notice or
other service of written notice the Authority shall receive an instrument or instruments
executed by the holders and owners of at least two-thirds in aggregate principal amount
of Parity Bonds and Additional Bonds 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 agents and Authority, the Authority may adopt the amendatory
resolution in substantially the same form.
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Section 48. EFFECTIVE UPON ADOPTION. Upon the adoption of any
amendatory resolution pursuant to the provisions hereof, 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 all the holders or owners
of outstanding Parity Bonds and Additional Bonds shall thereafter be determined,
exercised, and enforced hereunder, subject in all respects to such amendments.
Section 49. REVOCATION OF CONSENT. Any consent given by the holder or
owner of a Parity Bond or Additional Bond pursuant to the provisions hereof shall be
irrevocable for a period of six months from the date of the first publication of the notice
provided for herein, and shall be conclusive and binding upon all future holders and
owners of the same Parity Bond or Additional Bond during such period. Such consent
may be revoked at any time after six months from the date of the first publication of such
notice by the holder or owner who gave such consent, or by a successor in title, by filing
notice thereof with the paying agent and the Authority, but such revocation shall not be
effective if the holders or owners of two-thirds aggregate principal amount of the Parity
Bonds and Additional Bonds outstanding as herein defined have, prior to the attempted
revocation, consented to and approved the amendment.
Section 50. PROOF OF OWNERSHIP. The fact of the holding of Parity Bonds
and Additional Bonds by any Bondholder and the amount and numbers of such Parity
Bonds and Additional Bonds, and the date of his holding same may be proved by the
affidavit of the person claiming to be such holder or owner, or by a certificate executed
by any trust company, bank, banker, or any other depository, wherever situated showing
that on the date therein mentioned such person had on deposit with such trust company,
bank, banker, or other depository, the Parity Bonds or Additional 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. All matters relating to the
ownership of fully registered Parity Bonds and Additional Bonds shall be ascertained from
the registration books therefor kept by the registrar.
Section 51. DEFEASANCE OF BONDS. (a) Any Bond and the interest thereon
shall be deemed to be paid, retired, and no longer outstanding (a "Defeased Bond") within
the meaning of this Resolution, except to the extent provided in subsection (d) of this
Section, when payment of the principal of such Bond, plus interest thereon to the due
date (whether such due date be by reason of maturity or otherwise) either (i) shall have
been made or caused to be made in accordance with the terms thereof, or (ii) shall have
been provided for on or before such due date by irrevocably depositing with or making
available to the Paying Agent/Registrar in accordance with an escrow agreement or other
instrument (the "Future Escrow Agreement") for such payment (1) lawful money of the
United States of America sufficient to make such payment or (2) Defeasance Securities
that mature as to principal and interest in such amounts and at such times as will insure
the availability, without reinvestment, of sufficient money to provide for such payment,
and when proper arrangements have been made by the Issuer with the Paying
Agent/Registrar for the payment of its services until all Defeased Bonds shall have
become due and payable. At such time as a Bond shall be deemed to be a Defeased
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Resolution No. 22-1628, Page 30 of 47
Bond hereunder, as aforesaid, such Bond and the interest thereon shall no longer be
secured by, payable from, or entitled to the benefits of, the Net Revenues as provided in
this Resolution, and such principal and interest shall be payable solely from such money
or Defeasance Securities. Notwithstanding any other provision of this Resolution to the
contrary, it is hereby provided that any determination not to redeem Defeased Bonds that
is made in conjunction with the payment arrangements specified in subsection 51(a)(i) or
(ii) shall not be irrevocable, provided that: (1) in the proceedings providing for such
payment arrangements, the Issuer expressly reserves the right to call the Defeased
Bonds for redemption; (2) gives notice of the reservation of that right to the owners of the
Defeased Bonds immediately following the making of the payment arrangements; and (3)
directs that notice of the reservation be included in any redemption notices that it
authorizes.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written
direction of the Issuer also be invested in Defeasance Securities, maturing in the amounts
and times as hereinbefore set forth, and all income from such Defeasance Securities
received by the Paying Agent/Registrar that is not required for the payment of the Bonds
and interest thereon, with respect to which such money has been so deposited, shall be
turned over to the Issuer, or deposited as directed in writing by the Issuer. Any Future
Escrow Agreement pursuant to which the money and/or Defeasance Securities are held
for the payment of Defeased Bonds may contain provisions permitting the investment or
reinvestment of such moneys in Defeasance Securities or the substitution of other
Defeasance Securities upon the satisfaction of the requirements specified in subsection
51(a)(i) or (ii). All income from such Defeasance Securities received by the Paying
Agent/Registrar which is not required for the payment of the Defeased Bonds, with
respect to which such money has been so deposited, shall be remitted to the Issuer or
deposited as directed in writing by the Issuer.
(c) The term "Defeasance Securities" means any securities and obligations now or
hereafter authorized by State law that are eligible to discharge obligations such as the
Bonds.
(d) Until all Defeased Bonds shall have become due and payable, the Paying
AgenvRegistrar shall perform the services of Paying Agent/Registrar for such Defeased
Bonds the same as if they had not been defeased, and the Issuer shall make proper
arrangements to provide and pay for such services as required by this Resolution.
(e) In the event that the Issuer elects to defease less than all of the principal
amount of Bonds of a maturity, the Paying Agent/Registrar shall select, or cause to be
selected, such amount of Bonds by such random method as it deems fair and appropriate.
Section 52. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
BONDS. (a) Replacement Bonds. In the event any outstanding Bond is damaged,
mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed,
executed, and delivered, a new bond of the same principal amount, maturity, and interest
rate, as the damaged, mutilated, lost, stolen, or destroyed Bond, in replacement for such
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Resolution No. 22-1628, Page 31 of 47
Bond in the manner hereinafter provided.
(b) Application for Replacement Bonds. Application for replacement of
damaged, mutilated, lost, stolen, or destroyed Bonds shall be made by the registered
owner thereof to the Paying Agent/Registrar. In every case of loss, theft, or destruction
of a Bond, the registered owner applying for a replacement bond shall furnish to the Issuer
and to the Paying Agent/Registrar such security or indemnity as may be required by them
to save each of them harmless from any loss or damage with respect thereto. Also, in
every case of loss, theft, or destruction of a Bond, the registered owner shall furnish to
the Issuer and to the Paying Agent/Registrar evidence to their satisfaction of the loss,
theft, or destruction of such Bond, as the case may be. In every case of damage or
mutilation of a Bond, the registered owner shall surrender to the Paying Agent/Registrar
for cancellation the Bond so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this
Section, in the event any such Bond shall have matured, and no default has occurred
which is then continuing in the payment of the principal of, redemption premium, if any,
or interest on the Bond, the Issuer may authorize the payment of the same (without
surrender thereof except in the case of a damaged or mutilated Bond) instead of issuing
a replacement Bond, provided security or indemnity is furnished as above provided in this
Section.
(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any
replacement bond, the Paying Agent/Registrar shall charge the registered owner of such
Bond with all legal, printing, and other expenses in connection therewith. Every
replacement bond issued pursuant to the provisions of this Section by virtue of the fact
that any Bond is lost, stolen, or destroyed shall constitute a contractual obligation of the
Issuer whether or not the lost, stolen, or destroyed Bond shall be found at any time, or be
enforceable by anyone, and shall be entitled to all the benefits of this Resolution equally
and proportionately with any and all other Bonds duly issued under this Resolution.
(e) Authority for Issuing Replacement Bonds. In accordance with Subchapter B,
Chapter 1206, Texas Government Code, this Section shall constitute authority for the
issuance of any such replacement bond without necessity of further action by the
governing body of the Issuer or any other body or person, and the duty of the replacement
of such bonds is hereby authorized and imposed upon the Paying Agent/Registrar, and
the Paying Agent/Registrar shall authenticate and deliver such Bonds in the form and
manner and with the effect, as provided in Section 4 for Bonds issued in conversion and
exchange for other Bonds.
Section 53. FEDERAL TAX COVENANTS. (a) General Tax Covenants
Regarding Tax Exemption of Interest on the Bonds. The Issuer covenants to take any
action necessary to assure, or refrain from any action which would adversely affect, the
treatment of the Bonds as obligations described in section 103 of the Code, the interest
on which is not includable in the "gross income" of the holder for purposes of federal
income taxation. In furtherance thereof, the Issuer covenants as follows:
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Resolution No. 22-1628, Page 32 of 47
(a) to take any action to assure that no more than 10 percent of the
proceeds of the Bonds or the projects financed therewith (less amounts deposited
to a reserve fund, if any) are used for any "private business use," as defined in
section 141(b)(6) of the Code or, if more than 10 percent of the proceeds or the
projects financed therewith are so used, such amounts, whether or not received
by the Issuer, with respect to such private business use, do not, under the terms
of this Resolution or any underlying arrangement, directly or indirectly, secure or
provide for the payment of more than 10 percent of the debt service on the Bonds,
in contravention of section 141(b)(2) of the Code;
(b) to take any action to assure that in the event that the "private business
use" described in subsection (a) hereof exceeds 5 percent of the proceeds of the
Bonds or the projects financed therewith (less amounts deposited into a reserve
fund, if any) then the amount in excess of 5 percent is used for a "private business
use" which is "related" and not "disproportionate," within the meaning of section
141(b)(3) of the Code, to the governmental use;
(c) to take any action to assure that no amount which is greater than the
lesser of $5,000,000, or 5 percent of the proceeds of the Bonds (less amounts
deposited into a reserve fund, if any) is directly or indirectly used to finance loans
to persons, other than state or local governmental units, in contravention of section
141(c) of the Code;
(d) to refrain from taking any action which would otherwise result in the
Bonds being treated as "private activity bonds" within the meaning of section
141(b) of the Code;
(e) to refrain from taking any action that would result in the Bonds being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(f) to refrain from using any portion of the proceeds of the Bonds, directly
or indirectly, to acquire or to replace funds which were used, directly or indirectly,
to acquire investment property (as defined in section 148(b)(2) of the Code) which
produces a materially higher yield over the term of the Bonds, other than
investment property acquired with --
(1) proceeds of the Bonds invested for a reasonable temporary
period until such proceeds are needed for the purpose for which the bonds
are issued,
(2) amounts invested in a bona fide debt service fund, within the
meaning of section 1.148-1(b) of the Treasury Regulations, and
(3) amounts deposited in any reasonably required reserve or
replacement fund to the extent such amounts do not exceed 10 percent of
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Resolution No. 22-1628, Page 33 of 47
the proceeds of the Bonds;
(g) to otherwise restrict the use of the proceeds of the Bonds or amounts
treated as proceeds of the Bonds, as may be necessary, so that the Bonds do not
otherwise contravene the requirements of section 148 of the Code (relating to
arbitrage) and;
(h) to pay to the United States of America at least once during each five-
year period (beginning on the date of delivery of the Bonds) an amount that is at
least equal to 90 percent of the "Excess Earnings," within the meaning of section
148(f) of the Code and to pay to the United States of America, not later than 60
days after the Bonds have been paid in full, 100 percent of the amount then
required to be paid as a result of Excess Earnings under section 148(f) of the Code;
and
(i) to ensure the proceeds of the Bonds are used solely for "new money
projects."
In order to facilitate compliance with the above covenant (h), a "Rebate Fund" is
hereby established by the Issuer for the sole benefit of the United States of America, and
such fund shall not be subject to the claim of any other person, including without limitation
the bondholders. The Rebate Fund is established for the additional purpose of
compliance with section 148 of the Code.
For purposes of the foregoing (a) and (b), the Issuer understands that the term
"proceeds" includes "disposition proceeds" as defined in the Treasury Regulations and,
in the case of refunding bonds, transferred proceeds (if any) and the proceeds of the
refunded bonds expended prior to the date of issuance of the Bonds. It is the
understanding of the Issuer that the covenants contained herein are intended to assure
compliance with the Code and any regulations or rulings promulgated by the U.S.
Department of the Treasury pursuant thereto. In the event that regulations or rulings are
hereafter promulgated which modify or expand provisions of the Code, as applicable to
the Bonds, the Issuer will not be required to comply with any covenant contained herein
to the extent that such failure to comply, in the opinion of nationally recognized bond
counsel, will not adversely affect the exemption from federal income taxation of interest
on the Bonds under section 103 of the Code. In the event that regulations or rulings are
hereafter promulgated which impose additional requirements which are applicable to the
Bonds, the Issuer agrees to comply with the additional requirements to the extent
necessary, in the opinion of nationally recognized bond counsel, to preserve the
exemption from federal income taxation of interest on the Bonds under section 103 of the
Code. In furtherance of such intention, the Issuer hereby authorizes and directs the
President of the Board, or the Authorized Officer, to execute any documents, certificates
or reports required by the Code and to make such elections, on behalf of the Issuer, which
may be permitted by the Code as are consistent with the purpose for the issuance of the
Bonds. This Resolution is intended to satisfy the official intent requirements set forth in
section 1.150-2 of the Treasury Regulations.
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(b) Interest Earnings on Bond Proceeds. Interest earnings derived from the
investment of proceeds from the sale of the Bonds shall be used along with other bond
proceeds for the purpose for which the Bonds are issued set forth in Section 1 hereof;
provided that after completion of such purpose, if any of such interest earnings remain on
hand, such interest earnings shall by deposited in the Interest and Sinking Fund. It is
further provided, however, that any interest earnings on bond proceeds which are
required to be rebated to the United States of America pursuant to Section 53(a) hereof
in order to prevent the Bonds from being arbitrage bonds shall be so rebated and not
considered as interest earnings for the purposes of this Section 53(b).
(c) Disposition of Project. The Issuer covenants that the property constituting the
Project financed with the proceeds of the Bonds will not be sold or otherwise disposed in
a transaction resulting in the receipt by the Issuer of cash or other compensation, unless
the Issuer obtains an opinion of nationally -recognized bond counsel that such sale or
other disposition will not adversely affect the tax-exempt status of the Bonds. For
purposes of the foregoing, the portion of the property comprising personal property and
disposed in the ordinary course shall not be treated as a transaction resulting in the
receipt of cash or other compensation. For purposes hereof, the Issuer shall not be
obligated to comply with this covenant if it obtains an opinion that such failure to comply
will not adversely affect the excludability for federal income tax purposes from gross
income of the interest.
(d) Allocation of, and Limitation on, Expenditures for the Project. The Issuer
covenants to account for the expenditure of sale proceeds and investment earnings to be
used for the purposes described in Section 1 of this Bond Resolution (the "Project") on
its books and records in accordance with the requirements of the Internal Revenue Code.
The Issuer recognizes that in order for the proceeds to be considered used for the
reimbursement of costs, the proceeds must be allocated to expenditures within 18 months
of the later of the date that (1) the expenditure is made, or (2) the Project is completed;
but in no event later than three years after the date on which the original expenditure is
paid. The foregoing notwithstanding, the Issuer recognizes that in order for proceeds to
be expended under the Internal Revenue Code, the sale proceeds or investment earnings
must be expended no more than 60 days after the earlier of (1) the fifth anniversary of the
delivery of the Bonds, or (2) the date the Bonds are retired. The Issuer agrees to obtain
the advice of nationally -recognized bond counsel if such expenditure fails to comply with
the foregoing to assure that such expenditure will not adversely affect the tax-exempt
status of the Bonds. For purposes hereof, the issuer shall not be obligated to comply
with this covenant if it obtains an opinion that such failure to comply will not adversely
affect the excludability for federal income tax purposes from gross income of the interest.
Section 54. CUSTODY, APPROVAL, BOND COUNSEL'S OPINION, CUSIP
NUMBERS AND INSURANCE. The President of the Board of Directors and the General
Manager of the Issuer are hereby authorized to have control of the Bonds issued
hereunder and all necessary records and proceedings pertaining to the Bonds pending
their delivery and the approval of the Bonds by the Attorney General of the State of Texas.
31
Resolution No. 22-1628, Page 35 of 47
The Comptroller of Public Accounts is requested to cause the Bonds to be registered in
accordance with law. The approving legal opinion of the Issuer's Bond Counsel and the
assigned CUSIP numbers may, at the option of the Issuer, be printed on the Bonds or on
any Bonds issued and delivered in conversion of and exchange or replacement of any
Bond, but neither shall have any legal effect, and shall be solely for the convenience and
information of the registered owners of the Bonds. If insurance is obtained on any of the
Bonds, the Bonds shall bear, as appropriate and applicable, a legend concerning
insurance as provided by the Insurer.
Section 55. FURTHER PROCEDURES. The President, Vice President and
Secretary of the Board of Directors of the Issuer, the General Manager or the Chief
Financial Officer shall be and they are each individually hereby expressly authorized,
empowered and directed from time to time and at any time to do and perform all such
acts and things and to execute, acknowledge and deliver in the name and under the
corporate seal and on behalf of the Issuer a Letter of Representation with DTC regarding
the Book -Entry Only System, the Paying Agent/Registrar Agreement with the Paying
Agent/Registrar and all other instruments, whether or not herein mentioned, as may be
necessary or desirable in order to carry out the terms and provisions of this Resolution,
the Letter of Representation, the Bonds, the sale of the Bonds and the Official Statement.
Notwithstanding anything to the contrary contained herein, while the Bonds are subject
to DTC's Book -Entry Only System and to the extent permitted by law, the Letter of
Representation is hereby incorporated herein and its provisions shall prevail over any
other provisions of this Resolution in the event of conflict. In case any officer whose
signature shall appear on any Bond shall cease to be such officer before the delivery of
such Bond, such signature shall nevertheless be valid and sufficient for all purposes the
same as if such officer had remained in office until such delivery.
Section 56. CONTINUING DISCLOSURE OF INFORMATION. (a) As used in
this Section, the following terms have the meanings ascribed to such terms below:
"Financial Obligation" means a: (a) debt obligation; (b) derivative instrument
entered into in connection with, or pledged as security or a source of payment for, an
existing or planned debt obligation; or (c) a guarantee of the foregoing (a) and (b). The
term Financial Obligation does not include any municipal securities as to which a final
official statement has been provided to the MSRB consistent with the Rule.
"MSRB" means the Municipal Securities Rulemaking Board.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
(b) Pursuant to a Continuing Disclosure Agreement by and between the Issuer
and the individual Contracting Parties, the Issuer and the Contracting Parties have
undertaken for the benefit of the beneficial owners of the Bonds, to the extent set forth
therein, to provide continuing disclosure of financial information and operating data with
32
Resolution No. 22-1628, Page 36 of 47
respect to the Contracting Parties in accordance with the Rule as promulgated by the
SEC.
(c) Annual Reports.
The Authority will provide its audited financial statements with the MSRB through
its EMMA system within six months after the end of the Authority's fiscal year. If audited
financial statements are not available by the required time, the Authority will provide
unaudited financial statements within the required time and audited financial statements
when and if such audited financial statements become available. Any such financial
statements will be prepared in accordance with generally accepted accounting principles
in effect at the time or that the Authority may be required to employ from time to time
pursuant to State law or regulation.
The Authority's fiscal year end is November 30. Accordingly, the Authority must
provide updated information by May 31 in each year beginning with the fiscal year ending
in 2022. If the Authority changes its fiscal year, the Authority will notify the MSRB of the
change (and of the date of the new fiscal year end) prior to the next date by which the
Authority otherwise would be required to provide financial statements pursuant to this
Section.
(d) The Issuer shall notify the MSRB, in a timely manner not in excess of ten
business days after the occurrence of the event, of any of the following events with
respect to the Bonds:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults, if material;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue
(IRS Form 5701-TEB) or other material notices or determinations with
respect to the tax status of the Bonds, or other material events affecting the
tax status of the Bonds;
7. Modifications to rights of holders of the Bonds, if material;
8. Bond calls, if material, and tender offers;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Bonds,
if material;
33
Resolution No. 22-1628, Page 37 of 47
11. Rating changes;
12. Bankruptcy, insolvency, receivership or similar event of the Issuer;
13. The consummation of a merger, consolidation, or acquisition involving the
Issuer or the sale of all or substantially all of the assets of the Issuer, other
than in the ordinary course of business, the entry into a definitive agreement
to undertake such an action or the termination of a definitive agreement
relating to any such actions, other than pursuant to its terms, if material;
14. Appointment of a successor Paying Agent/Registrar or change in the name
of the Paying Agent/Registrar, if material;
15. Incurrence of a Financial Obligation of the Issuer, if material, or agreement
to covenants, events of default, remedies, priority rights, or other similar
terms of a Financial Obligation of the Issuer, any of which affect
Bondholders, if material; and
16. Default, event of acceleration, termination event, modification of terms, or
other similar events under the terms of a Financial Obligation of the Issuer,
any of which reflect financial difficulties.
As used in clause 12 above, the phrase "bankruptcy, insolvency, receivership or
similar event" means the appointment of a receiver, fiscal agent or similar officer for the
Issuer in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under
state or federal law in which a court of governmental authority has assumed jurisdiction
over substantially all of the assets or business of the Issuer, or if jurisdiction has been
assumed by leaving the Board and officials or officers of the Issuer in possession but
subject to the supervision and orders of a court or governmental authority, or the entry of
an order confirming a plan of reorganization, arrangement or liquidation by a court or
governmental authority having supervision or jurisdiction over substantially all of the
assets or business of the Issuer.
(e) The Issuer shall notify the MSRB, in a timely manner, of any failure by the
Issuer to provide information in accordance with subsections (c) and (d) of this Section
by the time required by such subsection.
(f) The financial statements 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 that is available to the public on the MSRB's internet website or filed with the
SEC. All financial statements and notices required to be provided to the MSRB shall be
provided in an electronic format and be accompanied by identifying information
prescribed by the MSRB.
Section 57. SECURITY INTEREST. Chapter 1208, Government Code, applies
to the issuance of the Bonds and the pledge of the Net Revenues granted by the Issuer
under Sections 6 and 15 of this Resolution, and is therefore valid, effective, and perfected.
If Texas law is amended at any time while the Bonds are outstanding and unpaid such
Resolution No. 22-1628, Page 38 of 47
that the pledge of the Net Revenues granted by the Issuer under Sections 6 and 15 of
this Resolution is to be subject to the filing requirements of Chapter 9, Business &
Commerce Code, then in order to preserve to the registered owners of the Bonds the
perfection of the security interest in said pledge, the Issuer agrees to take such measures
as it determines are reasonable and necessary under Texas law to comply with the
applicable provisions of Chapter 9, Business & Commerce Code and enable a filing to
perfect the security interest in said pledge to occur.
Section 58. REPEAL OF CONFLICTING RESOLUTIONS. All resolutions and
all parts of any resolutions which are in conflict or inconsistent with this Resolution are
hereby repealed and shall be of no further force or effect to the extent of such conflict or
inconsistency.
35
Resolution No. 22-1628, Page 39 of 47
• ' ••= 10101011
The form of the Bond, including the form of Paying Agent/Registrar's Authentication
Certificate, the form of Assignment and the form of Registration Certificate of the
Comptroller of Public Accounts of the State of Texas to be attached only to the Bonds
initially issued and delivered pursuant to this Resolution, shall be, respectively,
substantially as follows, with such appropriate variations, omissions, or insertions as are
permitted or required by this Resolution and with the Bonds to be completed with
information set forth in the Pricing Certificate. The Form of Bond as it appears in this
Exhibit A shall be completed, amended and modified by Bond Counsel to incorporate the
information set forth in the Pricing Certificate but it is not required for the Form of Bond to
be reproduced as an exhibit to the Pricing Certificate.
NO. R-_ UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
TRINITY RIVER AUTHORITY OF TEXAS
(TARRANT COUNTY WATER PROJECT) IMPROVEMENT REVENUE BONDS,
SERIES 2022
INTEREST RATE DELIVERY DATE MATURITY DATE CUSIP NO.
[], 2022 February 1,
REGISTERED OWNER: []
PRINCIPAL AMOUNT: ( DOLLARS
ON THE MATURITY DATE specified above, the TRINITY RIVER AUTHORITY OF
TEXAS (the "Issue"), being a governmental agency, and body corporate and politic of
the State of Texas, hereby promises to pay to the Registered Owner set forth above, or
registered assigns (hereinafter called the "registered owner') the principal amount set
forth above, and to pay interest thereon from the Delivery Date as set forth above, on
[August 1, 2022] and semiannually thereafter on each February 1 and August 1 to the
maturity date specified above, or the date of redemption prior to maturity, at the interest
rate per annum specified above; except that if this Bond is required to be authenticated
and the date of its authentication is later than the first Record Date (hereinafter defined),
such principal amount shall bear interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date
but on or before the next following interest payment date, in which case such principal
amount shall bear interest from such next following interest payment date; provided,
however, that if on the date of authentication hereof the interest on the Bond or Bonds, if
any, for which this Bond is being exchanged or converted from is due but has not been
paid, then this Bond shall bear interest from the date to which such interest has been paid
in full.
FRIN
Resolution No. 22-1628, Page 40 of 47
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money
of the United States of America, without exchange or collection charges. The principal
of this Bond shall be paid to the registered owner hereof upon presentation and surrender
of this Bond at maturity or upon the date fixed for its redemption prior to maturity, at the
principal corporate trust office of BOKF, NA, Dallas, Texas, which is the "Paying
Agent/Registrar" for this Bond. The payment of interest on this Bond shall be made by
the Paying Agent/Registrar to the registered owner hereof on each interest payment date
by check or draft, dated as of such interest payment date, drawn by the Paying
Agent/Registrar on, and payable solely from, funds of the Issuer required by the
Resolution authorizing the issuance of this Bond (the "Bond Resolution") to be on deposit
with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check
or draft shall be sent by the Paying Agent/Registrar by United States mail, first-class
postage prepaid, on each such interest payment date, to the registered owner hereof, at
its address as it appeared on the fifteenth calendar day of the month next preceding each
such date (the "Record Date") on the Registration Books kept by the Paying
Agent/Registrar, as hereinafter described. In addition, interest may be paid by such
other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk
and expense of, the registered owner. In the event of a non-payment of interest on a
scheduled payment date, and for 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 Issuer.
Notice of the Special Record Date and of the scheduled payment date of the past due
interest (which shall be 15 days after the Special Record Date) shall be sent at least five
business days prior to the Special Record Date by United States mail, first-class postage
prepaid, to the address of each owner of a Bond appearing on the Registration Books at
the close of business on the last business day next preceding the date of mailing of such
notice.
ANY ACCRUED INTEREST due at maturity or upon the redemption of this Bond
prior to maturity as provided herein shall be paid to the registered owner upon
presentation and surrender of this Bond for redemption and payment at the principal
corporate trust office of the Paying Agent/Registrar. The Issuer covenants with the
registered owner of this Bond that on or before each principal payment date, interest
payment date, and accrued interest payment date for this Bond it will make available to
the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Bond
Resolution, the amounts required to provide for the payment, in immediately available
funds, of all principal of and interest on the Bonds, when due.
IF THE DATE for the 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 principal corporate trust 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 which 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.
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Resolution No. 22-1628, Page 41 of 47
THIS BOND is one of a Series of Bonds dated [], 2022, authorized in accordance
with the Constitution and laws of the State of Texas in the principal amount of $[-], to pay
for the acquisition and construction of improvements, betterments, extensions, and
replacements of the Trinity River Authority of Texas Tarrant County Water Project and to
pay costs of issuance of the Bonds.
ON [FEBRUARY 1, []], or on any date thereafter, the Bonds of this Series may be
redeemed prior to their scheduled maturities, at the option of the Issuer, with funds
derived from any available and lawful source, as a whole, or in part, and, if in part, the
particular Bonds to be redeemed shall be selected and designated by the Issuer, at the
redemption price of the principal amount, plus accrued interest to the date fixed for
redemption.
AT LEAST THIRTY days prior to the date fixed for any redemption of Bonds or
portions thereof prior to maturity a written notice of such redemption shall be sent by the
Paying Agent/Registrar by United States mail, first-class postage prepaid, to the
registered owner of each Bond to be redeemed at its address as it appeared on the
registration books of the Paying Agent/Registrar at the close of business on the business
day next preceding the date of mailing such notice and to major securities depositories,
national bond rating agencies and bond information services; provided, however, that the
failure of the registered owner to receive such notice, or any defect therein or in the
sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings
for the redemption of any Bond. By the date fixed for any such redemption, due provision
shall be made with the Paying Agent/Registrar for the payment of the required redemption
price for the Bonds or portions thereof which are to be so redeemed. If such written
notice of redemption is sent and if due provision for such payment is made, all as provided
above, the Bonds or portions thereof which are to be so redeemed thereby automatically
shall be treated as redeemed prior to their scheduled maturities, and they shall not bear
interest after the date fixed for redemption, and they shall not be regarded as being
outstanding except for the right of the registered owner to receive the redemption price
from the Paying Agent/Registrar out of the funds provided for such payment. If a portion
of any Bond shall be redeemed a substitute Bond or Bonds having the same maturity
date, bearing interest at the same rate, in any denomination or denominations in any
integral multiple of $5,000, at the written request of the registered owner, and in aggregate
amount equal to the unredeemed portion thereof, will be issued to the registered owner
upon the surrender thereof for cancellation, at the expense of the Issuer, all as provided
in the Bond Resolution.
IF AT THE TIME OF MAILING of notice of optional redemption there shall not have
either been deposited with the Paying Agent/Registrar or legally authorized escrow agent
immediately available funds sufficient to redeem all the Bonds called for redemption, such
notice must state that it is conditional, and is subject to the deposit of the redemption
moneys with the Paying Agent/Registrar or legally authorized escrow agent at or prior to
the redemption date, and such notice shall be of no effect unless such moneys are so
deposited on or prior to the redemption date. If such redemption is not effectuated, the
Paying Agent/Registrar shall give notice in the manner in which the notice of redemption
A-3
Resolution No. 22-1628, Page 42 of 47
was given that such moneys were not so received and shall rescind the notice of
redemption.
ALL BONDS OF THIS SERIES are issuable solely as fully registered Bonds,
without interest coupons, in the denomination of any integral multiple of $5,000. As
provided in the Bond Resolution, this Bond, or any unredeemed portion hereof, may, at
the request of the registered owner or the assignee or assignees hereof, be assigned,
transferred, converted into and exchanged for a like aggregate principal amount of fully
registered Bonds, without interest coupons, payable to the appropriate registered owner,
assignee or assignees, as the case may be, having the same denomination or
denominations in any integral multiple of $5,000 as requested in writing by the appropriate
registered owner, assignee or assignees, as the case may be, upon surrender of this
Bond to the Paying Agent/Registrar for cancellation, all in accordance with the form and
procedures set forth in the Bond Resolution. Among other requirements for such
assignment and transfer, this Bond must be presented and surrendered to the Paying
Agent/Registrar, together with proper instruments of assignment, in form and with
guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing
assignment of this Bond or any portion or portions hereof in any integral multiple of $5,000
to the assignee or assignees in whose name or names this Bond or any such portion or
portions hereof is or are to be registered. The form of Assignment printed or endorsed
on this Bond may be executed by the registered owner to evidence the assignment
hereof, but such method is not exclusive, and other instruments of assignment
satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of
this Bond or any portion or portions hereof from time to time by the registered owner.
The Paying Agent/Registrar's reasonable standard or customary fees and charges for
assigning, transferring, converting and exchanging any Bond or portion thereof will be
paid by the Issuer. In any circumstance, any taxes or governmental charges required to
be paid with respect thereto shall be paid by the one requesting such assignment,
transfer, conversion or exchange, as a condition precedent to the exercise of such
privilege. The Paying Agent/Registrar shall not be required to make any such transfer,
conversion or exchange (i) during the period commencing with the close of business on
any Record Date and ending with the opening of business on the next following principal
or interest payment date, or, (ii) with respect to any Bond or any portion thereof called for
redemption prior to maturity, within 45 days prior to its redemption date.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the
Issuer, resigns or otherwise ceases to act as such, the Issuer has covenanted in the Bond
Resolution that it promptly will appoint a competent and legally qualified substitute
therefor, and cause written notice thereof to be mailed to the registered owners of the
Bonds.
IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and
validly authorized, issued, sold, and delivered; that all acts, conditions, and things
required or proper to be performed, exist, and be done precedent to or in the
authorization, issuance, and delivery of this Bond have been performed, existed, and
been done in accordance with law; that this Bond and other parity bonds, are special
A-4
Resolution No. 22-1628, Page 43 of 47
obligations of the Issuer payable from and secured by a first lien on and pledge of (1) the
Issuer's Net Revenues from its water supply contracts, each dated as of January 21,
1972, and amended as of January 22, 1975, and as of December 5, 1979 (with respect
to the City of Euless) and December 11, 1979 (with respect to the City of Bedford), with
the Cities of Bedford and Euless, Texas, and its water supply contracts each dated as of
April 25, 1979, and amended as of December 5, 1979, and as of April 23, 1980, with the
Cities of Colleyville, Grapevine, and North Richland Hills, Texas, all relating to the Issuer's
Tarrant County Water Project described in said contracts, all as more fully described in
said contracts and in the Bond Resolution, to each of which reference is hereby made for
all purposes, and (2) the Net Revenues the Issuer may receive from other parties, if any,
with whom the Issuer may contract in the future for supplying treated water from the
Issuer's Tarrant County Water Project.
THE ISSUER has reserved the right, subject to the restrictions stated or referred
to in the Bond Resolution, to issue additional parity revenue bonds which also may be
made payable from and secured by a first lien on and pledge of the aforesaid Net
Revenues.
THE ISSUER also has reserved the right to amend the Bond Resolution with the
approval of the owners of two-thirds in principal amount of all outstanding bonds secured
by and payable from a first lien on and pledge of the aforesaid Net Revenues, subject to
the restrictions stated in the Bond Resolution,
THE REGISTERED OWNER hereof shall never have the right to demand payment
of this Bond or the interest hereon from taxes or from any source whatsoever other than
specified in the Bond Resolution.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Bond Resolution, agrees to be bound
by such terms and provisions, acknowledges that the Bond Resolution is duly recorded
and available for inspection in the official minutes and records of the governing body of
the Issuer, and agrees that the terms and provisions of this Bond and the Bond Resolution
constitute a contract between each registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the
manual or facsimile signature of the President of the Board of Directors of the Issuer and
countersigned with the manual or facsimile signature of the Secretary of the Board of
Directors of the Issuer, and has caused the official seal of the Issuer to be duly impressed,
or placed in facsimile, on this Bond.
Secretary, Board of Directors President, Board of Directors
Trinity River Authority of Texas Trinity River Authority of Texas
(SEAL)
A-5
Resolution No. 22-1628, Page 44 of 47
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Bond is not accompanied by an executed
Registration Certificate of the Comptroller of Public Accounts of the State of Texas)
It is hereby certified that this Bond has been issued under the provisions of the
Bond Resolution described in the text of this Bond; and that this Bond has been issued in
exchange for a bond or bonds, or a portion of a bond or bonds of a series that originally
was approved by the Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State of Texas.
Dated:
BOKF, NA
Dallas, Texas
Paying Agent/Registrar
Authorized Representative
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto:
Please insert Social Security or Taxpayer Identification Number of Transferee
Please print or type name and address, including zip code of Transferee
the within Bond and all rights thereunder, and hereby irrevocably constitutes and
appoints:
attorney, to register the transfer of the
within Bond on the books kept for registration thereof, with full power of substitution in the
premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be
guaranteed by an eligible guarantor
institution participating in a securities
transfer association recognized
signature guarantee program.
NOTICE: The signature above must
correspond with the name of the
Registered Owner as it appears upon the
front of this Bond in every particular, without
alteration or enlargement or any change
whatsoever.
COMPTROLLER'S REGISTRATION CERTIFICATE:
7Eel &Va:911110[ell
A-6
Resolution No. 22-1628, Page 45 of 47
I hereby certify that this Bond has been examined, certified as to validity, and
approved by the Attorney General of the State of Texas, and that this Bond has been
registered by the Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts of the State of Texas
(COMPTROLLER'S SEAL)
(b) Insertions for the Initial Bond:
The initial Bond shall be in the form set forth in paragraph (a) of this Section, except
that:
(i) immediately under the name of the Bond, the headings "INTEREST
RATE" and "MATURITY DATE" shall both be completed with the words "As shown below"
and "CUSIP NO. " shall be deleted.
(ii) the first paragraph shall be deleted and the following will be inserted:
"TRINITY RIVER AUTHORITY OF TEXAS (the "Issue"), being a governmental
agency, and body corporate and politic of the State of Texas, hereby promises to pay to
the Registered Owner specified above, or registered assigns (hereinafter called the
"Registered Owner"), on the dates, in the Principal Amounts and bearing interest at the
per annum Interest Rates set forth in the following schedule:
Maturity Principal Interest
Date Amount ($) Rate
The Issuer promises to pay interest on the unpaid principal amount hereof
(calculated on the basis of a 360-day year of twelve 30-day months) from the Delivery
Date at the respective Interest Rate per annum specified above. Interest is payable on
[August 1, 2022], and on each February 1 and August 1 thereafter to the date of payment
of the Principal Amounts specified above or the date of redemption prior to maturity;
except, that if this Bond is required to be authenticated and the date of its authentication
is later than the first Record Date (hereinafter defined), such principal amount shall bear
interest from the interest payment date next preceding the date of authentication, unless
such date of authentication is after any Record Date but on or before the next following
interest payment date, in which case such principal amount shall bear interest from such
next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is
being exchanged is due but has not been paid, then this Bond shall bear interest from the
A-7
Resolution No. 22-1628, Page 46 of 47
date to which such interest has been paid in full."
(iii) The initial Bond shall be numbered 7-1."
V
Resolution No. 22-1628, Page 47 of 47