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HomeMy WebLinkAbout420 02-08-1972ORDINANCE NO. 420 AN ORDINANCE APPROVING A RESOLUTION BY TRINITY RIVER AUTHORITY OF TEXAS AUTHORIZING THE ISSUANCE OF TRINITY RIVER AUTHORITY OF TEXAS (TARRANT COUNTY WATER PROJECT) REVENUE BONDS, SERIES 1972, $575,000, AND DECLARING AN EMERGENCY WHEREAS, Trinity River Authority of Texas is about to Z adopt a resolution in the form attached hereto; and WHEREAS, said resolution should be approved by the City of Euless, Texas; and WHEREAS, this ordinance must be passed as an emergency measure; THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF EULESS: Section 1. That the proposed resolution authorizing the Trinity River Authority of Texas (Tarrant County Water Project) Revenue Bonds, Series 1972, in the principal amount of $575,000, in the form attached, is hereby in all things approved.': Section 2. That this ordinance is hereby declared to ' be an emergency measure and is passed as such for the immediate preservation of the public peace, health or safety of the citizens of the City of Euless, Texas. Section 3. All ordinances or resolutions in conflict herewith are hereby expressly repealed. PASSED AND APPROVED this 8th day of February, 1972. Mayor, City of Euless, Texas ATTEST: City Secretary, City of Euless, Texas ( SEAL) City; 0'TO FORM - C 7 T'r ' .. =ate Y) City of Euless, exas RESOLUTION N0. R -130 THE STATE OF TEXAS TRINITY RIVER AUTHORITY OF TEXAS On this the 11th day of February, 1972, the Board of Directors of Trinity River Authority of Texas convened in Special BHX Meeting, with the following members thereof, to -wit, being present: John M. Scott, President, James L. Browder, Guy C. Jackson III, Joe E. Butler, Avery Mays, P. H. Cauthan, Jr., J. C. McSpadden, James Philip Gibbs, Edward Nash, Gilbert Gresham, Jr., Roy E. Pitts, Directors, Lynn B. Griffith, Bruce Smith, Charles F. Hawn, A. C. Spencer, Dr. J. B. Heath, Charles W. Wooldridge, : Suel Hill, . George D. Janning, Secretary, David H. Brune, General Manager, with the following absent: Ben H. Carpenter, Amon G. Carter, Jr., Charles W. Fisher, W. Lamar Hamilton, 0. P. Leonard, W. A. Story, constituting a quorum. The following proceedings were had at said meeting, which was open to the public, and public notice of the time, place and purpose of said meeting was given, all as required by Vernon's Ann. Civ. St. Article 6252 -17; Mr. Hawn introduced a resolution and moved that it be adopted. The motion was seconded by Mr. Hill The motion carrying with it the adoption of the resolution prevailed by the following vote: AYES: All members of said Board of Directors present voted "Aye," NOES: None. The resolution as adopted is as follows: RESOLUTION N0. R -130 RESOLUTION DIRECTING THE ISSUANCE OF TRINITY RIVER AUTHORITY OF TEXAS REVENUE BONDS (TARRANT COUNTY WATER PROJECT), SERIES 1972; PRE- SCRIBING THE FORM AND TERMS OF SAID BONDS; PROVIDING FOR THE SECURITY AND PAYMENT THEREOF; AND RESOLVING OTHER MATTERS RELATING TO THE SUBJECT. WHEREAS, Trinity River Authority of Texas was created by Chapter 518, Acts of the 54th Legislature, as amended, under Section 59 of Article 16 of the Constitution of the State of Texas; and WHEREAS, in order to provide a water supply to Cities and others, revenue bonds of Trinity River Authority of Texas should be authorized; BE IT RESOLVED BY THE BOARD OF DIRECTORS OF TRINITY RIVER AUTHORITY OF TEXAS: AUTHORIZATION OF THE BONDS To provide funds for the acquisition and construction of facilities to provide a water supply for Cities and others, there shall be issued negotiable bonds designated "Trinity River Authority of Texas (Tarrant County Water Project) Revenue Bonds, Series 1972," in the amount of $575,000. Said Bonds shall be issued in the manner and with the security hereinafter provided. DEFINITION OF TERMS Section 1.01. In each place throughout this Resolu- tion wherein the following terms, or any of them, are used, the same, unless the context shall indicate another or different meaning or intent, shall be construed and are intended to have meanings as follows: (a) "Authority" means Trinity River Authority of Texas and any other public body or agency at any time succeed- ing to the property and principal rights, power and obligations of said Authority. (b) "Resolution" means this resolution and any amendments hereto. (c) 'Certified Public Accountant's means any certi- fied public accountant, licensed public accountant or firm of such public accountants of suitable experience and qualifica- tions not regularly in the employ of the Authority, selected by the Authority. (d) "Cities" means the Cities of Euless and Bedford in Tarrant County, Texas. (e) "Act" means Chapter 518, Acts of the Fifty - Fourth Legislature of the State of Texas, as amended. 2 (f) "System" means the facilities of Authority to be acquired with proceeds of the Bonds for providing a water supply to Cities and others. (g) "Board of Authority" means the Board of Directors of the Authority. (h) "Independent Consulting Engineer" means the Engineer or engineering firm or corporation at the time employed by the Authority under the provisions of Section 5.13 of this Resolution. (i) "Fiscal Year" means each twelve month period beginning December 1 of each year. (j) "Depository" means the bank or banks which the Authority selects (whether one or more), in accordance with law, as its depository. (k) "Contracts" means the contracts between the Authority and the Cities, dated as of January 21, 1972, and any amendments thereto. (1) "Bond" or "Bonds" means the bonds authorized by this Resolution. (m) "Paying Agent" means The First National Bank of Fort Worth, Fort Worth, Texas, or its successor. 3 ARTICLE II FORM, EXECUTION AND DELIVERY OF BONDS Section 2.O1, THE BONDS. The Trinity River Authority of Texas (Tarrant County Water Project) Revenue Bonds, Series 1972, shall be issued in the amount of $575,000, dated March 1, 19722 numbered from 1 through 115, of the denomination of $5,000 each, and mature on March 1, 2,000, Section 2.02. OPTION OF PRIOR REDEMPTION, The Bonds of this Series shall be optional for redemption prior to their scheduled maturity in whole, or in part, at the option of the Authority, at any time, for the principal amount thereof plus accrued interest to the date fixed for redemption, At least thirty days before the date fixed for redemption, the Authority shall cause a written notice of such redemption to be delivered to the Paying Agent. By the date fixed for any such redemption, due provision shall be made with the Paying Agent for the payment of the principal amount of the bonds to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If the written notice of redemption is given, and if due provision for payment is made, all as pro- vided above, the bonds which are to be so redeemed thereby 4 automatically shall be redeemed prior to maturity, and they shall not be regarded as being outstanding except for the purpose of receiving the funds so provided for such payment. Section 2.03. INTEREST. The Bonds of this Series shall bear interest from their date at the rate of 5% per annum to and until September 1, 1972; at the rate of 5 -1/2% per annum from and after September 1, 1972, to and until March 1, 1973; at the rate of 6% per annum from and after March 11 19731 to and until September 1, 1973; at the rate of 6 -1/2% per annum from and after September 1, 1973, to and until March 1, 1974; and at the rate of 7% per annum from and after March 12 1974. Such interest shall be evidenced by attached coupons due September 1, 1972, and semi - annually thereafter on March 1 and September 1 of each year. The Bonds and the interest thereon shall be payable in lawful money of the United States of America, without exchange or collection charges to the holder thereof, at The First National Bank of Fort Worth, Fort Worth, Texas, which place shall be the paying agent for said Bonds, Section 2.04. FORM. The Bonds, the Certificate of the Comptroller of Public Accounts to appear thereon, and the interest coupons shall be in substantially the following form: 5 NO. (FORM OF BOND) UNITED STATES STATE OF TRINITY RIVER AU' (TARRANT COUNTY REVENUE SERIES OF AMERICA TEXAS rHORITY OF TEXAS WATER PROJECT) BOND 1972 $5,000 Trinity River Authority of Texas, a governmental agency and a body politic and corporate and a political subdivision of the State of Texas (herein called "Authority "), for value received hereby promises to pay to bearer, out of revenues hereinafter specified, on the 1st day of March, 2000, the sum of FIVE THOUSAND DOLLARS and to pay interest thereon from their date at the rate of 5% per annum to and until September 1, 1972; at the rate of 5 -1/2% per annum from and after September 1, 1972, to and until March ], 1973; at the rate of 6% per annum from and after March 1, 1973,' to and until September 1, 1973; at the rate of 6 -1/2% per annum from and after September 1, 1973, to and until March 1, 1974; and at the rate of 7% per annum from and after March 1, 1974. Said interest shall be evidenced by coupons payable September 1, 1972, and semi- annually thereafter on March 1 and September 1 of each year, until the principal shall, be paid. Both principal and interest are payable in lawful 6 money of the United States of America, upon presentation and surrender of bond or proper coupon as they severally become due, at The First National Bank of Fort Worth, Fort Worth, Texas (herein called "Paying Agent "), without exchange or collection charges to the holder hereof. The Bonds of this Series may be redeemed prior to their scheduled maturity, in whole, or in part, at the option of the Authority, at any time, for the principal amount thereof plus accrued interest to the date fixed for redemption, At least thirty days before the date fixed for any such redemption, the Authority shall cause a written notice of such redemption to be delivered to the Paying Agent. By the date fixed for any such redemption, due provision shall be made with the Paying Agent for the payment of the principal amount of the Bonds to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If the written notice of redemption is delivered, and if due provision for payment is made, all as provided above, the bonds, which are to be so redeemed, thereby automatically shall be redeemed prior to maturity, and they shall not bear interest after the date fixed for redemption, and shall not be regarded as being outstanding except for the purpose of receiving the funds so provided for such payment. 7 This bond is one of a duly authorized issue of bonds numbered from 1 through 115, of the denomination of $5,000 each, aggregating $575,000, issued by Trinity River Authority of Texas for the purpose of providing funds for the construction and acquisition of facilities to provide a water supply to Cities and others. As used herein, "Bonds" means the series of Bonds of which this bond is one. This issue of Bonds is authorized by a resolution of the Board of Directors of the Authority. Said resolution, including any amendment thereof or supplement thereto, is herein called "Resolution." For the purpose of providing for the payment and security of this issue of Bonds, the Authority has pledged certain net revenues to be received by the Authority for providing a water supply under contracts with the Cities of Euless and Bedford in Tarrant County, Texas. Such pledge of revenues is fully set forth in the Resolution. The Resolution provides that, to the extent and in the manner permitted by the terms of the Resolution, the Resolution may be amended with the consent of the holders of at least two - thirds in principal amount of all outstanding Bonds, provided that no amendment shall: (a) Make any change in the maturity of the Bonds; (b) Reduce the rate of interest borne by any of the Bonds; (c) Reduce the amount of the principal payable on the Bonds; (d) Modify the terms of payment of principal of or interest on the Bonds, or any of them, or impose any conditions with respect to such payment; (e) Affect the rights of the holders of less than all of the outstanding Bonds; (f) Change the minimum percentage of the principal amount of Bonds necessary for consent to such amendment. The Resolution provides for the creation of an Interest and Sinking Fund and for the payment into said Fund of a sufficient amount to pay the interest on and the principal of the Bonds as the same become due and payable. The revenues specified in the Resolution have been and are hereby pledged to and charged with the payment of the interest on and the prin- cipal of the Bonds, without preference, priority or distinction 9 as to lien or otherwise of any one Bond over any other Bond, The date of this Bond in conformity with the resolution above mentioned is March 1, 1972. Under the terms and conditions as provided in the Resolution, the Authority reserves the right to issue completion bonds, improvement bonds and refunding bonds which will be on a parity with the Bonds of this issue and which will be payable from revenues under the Contracts and any amendments thereto. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Texas to happen, exist and be performed precedent to and in the issuance of this issue of Bonds, the adoption of the Resolution, the making of the Contracts and the pledge of said revenues and funds have happened, exist and have been performed as so required. IN WITNESS WHEREOF, Trinity River Authority of Texas has caused this Bond to be signed by the imprinted or litho- graphed facsimile signature of the President of the Authoritf and attested by the facsimile signature of its Secretary and the corporate seal of the Authority to be duly impressed, or printed, or lithographed on this Bond, and has caused the 10 coupons hereto attached to be executed with the facsimile signatures of said officials. ATTEST: Secretary NO. President (FORM OF COUPON) ON THE 1ST DAY OF ell , 19^ Trinity River Authority of Texas will pay to bearer, out of revenues specified in the Bond to which this coupon is attached (unless the Bond to which this coupon is attached shall have been previously called for redemption and provision for the redemption thereof made in accordance with its terms), at The First National Bank of Fort Worth, Fort Worth, Texas, without exchange or collection charges to the owner or holder hereof,the sum shown on this coupon, in lawful money of the United States of America, for interest then due on its Trinity River Authority of Texas (Tarrant County Water Project) Revenue Bond, Series 1972, dated March 1, 1972, numbered ATTEST: Secretary 11 President (FORM OF STATE COMPTROLLER'S CERTIFICATE) OFFICE OF COMPTROLLER . STATE OF TEXAS I HEREBY CERTIFY that there is on file and of record in my office a certificate of the Attorney General of the State of Texas to the effect that this Bond has been examined by him as required by law, and that he finds that it has been issued in conformity with the Constitution and laws of the State of Texas, and that it is a valid and binding special obligation of Trinity River Authority of Texas and that the Contracts therein mentioned are valid and have been approved, and said Bond has this day been registered by me. WITNESS MY HAND and seal of office at Austin, Texas, Comptroller of Public Accounts of the State of Texas Section 2.05. EXECUTION OF BONDS. The Bonds and interest coupons shall be signed by the imprinted or litho- graphed facsimile signature of the President of the Authority and attested by the facsimile signature of the Secretary of the Authority, and the official seal of the Authority shall be affixed thereto, or a facsimile of such seal shall be printed or lithographed thereon. All facsimile signatures shall have the same effect as though they were manual signatures. 12 In case any officer whose signature or facsimile signature shall appear on any Bond or coupons shall cease to be such officer before the delivery of such Bonds, such signature or facsimile signature shall nevertheless be valid and sufficient for all purposes the same as if he had remained in office until such delivery. Section 2.06. COMPTROLLER'S REGISTRATION. Before the delivery of the Bonds, there shall be endorsed on each of them a certificate of registration duly executed by or on behalf of the Comptroller of Public Accounts of the State of Texas. Section 2.07. NEGOTIABILITY. The Bonds shall constitute negotiable instruments. Nothing contained in the Bonds or in this Resolution shall affect or impair the negotiability of the Bonds. Section 2.08. MUTILATED OR LOST BONDS. In case any Bond shall become mutilated or destroyed or lost, the Authority may cause to be executed and delivered a new bond of like date, number, maturity and tenor with appropriate interest coupons in exchange and substitution for and upon the cancellation of the mutilated Bond and its interest coupons, or in lieu of and in substitution for the Bonds and its coupons destroyed or lost, upon the holder's filing with 13 the Authority evidence satisfactory to it of such destruction or loss and, if the Authority shall so require, indemnity satisfactory to it, and upon paying all reasonable expenses and charges in connection with such exchange or substitution, ARTICLE III REVENUES AND APPLICATION THEREOF Section 3.01. FUNDS. There are hereby created the following funds: (a) "Trinity River Authority of Texas (Tarrant County Water Project) Revenue Fund 1972," hereinafter called "Revenue Fund," This Fund shall be kept in the Depository, (b) "Trinity River Authority of Texas (Tarrant County Water Project) Interest and Sinking Fund 1972," here- inafter called "Interest and Sinking Fund." This Fund shall be kept with the Paying Agent. (c) "Trinity River Authority of Texas (Tarrant County Water Project) Construction Fund 1972," hereinafter called "Construction Fund." This Fund shall be kept with the Depository. 14 The Interest and Sinking Fund shall constitute a trust fund and be held in trust by the Paying Agent for the benefit of the holders of the Bonds and additional bonds permitted hereunder. Section 3.02. PAYMENTS BY CITIES, In the Contracts, it is provided that the Cities shall make monthly payments to Authority, for services rendered, commencing December 1, 1973, which will equal: (a) All Operation and Maintenance Expense; (b) the principal of and the interest on the Bonds, as such principal and interest become due, less interest to be paid out of Bond proceeds as per- mitted by the Bond Resolution; (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 the Bond Resolution; (d) an amount in addition thereto sufficient to re- store any deficiency in any of such funds or accounts required to be accumulated and main- tained by the provisions of the Bond Resolution; and (e) the fees of the banks interest on the Bonds received by Authority be deposited in the R from said Fund in the hereinafter provided. where principal of and are payable, All payments under the Contracts shall avenue Fund and dispersed manner and at the times Section 3.03. MAINTENANCE AND OPERATION EXPENSES DEFINED. Maintenance and Operation Expenses include the annual cost of administration, labor, power, chemicals, 15 laboratory service, engineering, auditing and legal expense and any supplies and services necessary for the proper operation and maintenance of the System and other items specified in the Contracts. The term does not include depreciation. Sect =ion 3.04. PAYMENT OF OPERATION EXPENSES. Payment of Maintenance and Operation Expenses shall be made from the Revenue Fund only upon checks stating the purpose of the payment (which shall be in accordance with the Annual Budget as prescribed in this Resolution) signed by the President of the Authority and countersigned by its Treasurer, or signed and countersigned by such officers or employees of the Authority as may from time to time be designated by resolution of the Board of Authority. Section 3.05. PAYMENT OF PRINCIPAL AND INTEREST. Not less than five (5) days prior to March 1, 1974, and not less than five (5) days prior to each September 1 and March 1 thereafter, there shall be transferred from the Revenue Fund to the Interest and Sinking Fund sufficient money to pay the next maturing interest as it is scheduled to come due and the fees of the Paying Agent. The amounts payable under the Contracts attributable to debt service shall be deposited monthly to the Interest and Sinking Fund. Monies in the Interest and Sinking Fund shall be kept invested in securities FU: permitted by Section 8 -B of Article 8280 -188, V.C.S. which mature on dates which will coincide as nearly as practicable to the dates when money will be needed to pay interest on and the principal of the Bonds. Interest and profits resulting from such investments shall be deposited in the Construction Fund until the System is completed, and thereafter in the Interest and Sinking Fund, Section 3.06. SECURITY OF FUNDS. The Authority will cause the Depository to secure and keep secured, in the manner required by law, all funds on deposit with it, and will cause the Paying Agent to secure all funds deposited with it as other trust funds are secured. The Authority covenants and agrees that no money will be allowed to be or remain deposited with the Paying Agent or Depository unless secured as above provided. Section 3.07. PLEDGE. The Interest and Sinking Fund and all income hereby required to be deposited into said Fund are hereby pledged for the payment and security of the Bonds. ARTICLE IV BUDGETS AND ACCOUNTING Section 4,01. PREPARATION OF BUDGET. Not less than forty days before the commencement of the first Fiscal Year 17 after delivery of the Bonds herein authorized and not less than forty days before the commencement of each Fiscal Year thereafter while any of the Bonds or interest thereon is outstanding and unpaid, the Authority will prepare and file with the Cities the annual budget (herein called 'Annual Budget ") of maintenance and operating expenses for the ensuing Fiscal Year, and, except as otherwise provided in Section 4002 of this Resolution, the total expenditures in any division thereof will not exceed the total expenditures in the corres- ponding division in the Annual Budget, Section 4,02, AMENDMENT, The Authority covenants that the current Maintenance and Operation Expenses incurred in any Fiscal Year will not exceed the reasonable and necessary amount of such expense, 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 maintenance and operating expenses in the Annual Budget; provided, however, that if at any time the Board of Authority 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 of Authority may reduce such appro- priation 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 not exceeding the amount of such reduction; and provided further, that the Board of Authority may at any time adopt an amended or supple- mental budget for the remainder of the then current Fiscal Year in case of an emergency caused by some extraordi- nary occurrence which shall be clearly defined in such resolution., Any such supplemental budget shall be filed immediately with the Cities. Section 4003. ACCOUNTING AND REPORTING, The Authority covenants that proper books of record and account_ will be kept in which true, full and correct entries will he made of all income, expense and transactions of and in relation to the System, and each and every part thereof, Within three months after each full Fiscal Year, a statement certified as correct by a Certified Public Accountant showing the Gross Revenues and the Maintenance and Operation Expenses for such Fiscal Year, shall be furnished to the original purchaser of the Bonds and to the Cities. Section 4004, PUBLIC INSPECTION. The Authority further covenants and agrees that the System, and each and every part thereof, and all books, records, accounts, docu- ments and vouchers relating to the construction, operation, maintenance, repair, improvement and extension thereof, will 19 at all times be open to inspection by the Cities, and the holders of Bonds and their representatives, A D'TT PT A IT GENERAL COVENANTS Section 5001, PAYMENT OF BONDS AND INTEREST. T,Ze Authority covenants and agrees that, out of pledged revenues to be received under the Contracts, it will duly and punctually pay, or cause to be paid, the principal of every Bond and !=he interest thereon, on the date and at the place and in the manner specified in the Bonds and in the coupons thereto appertaining, and that it will faithfully de and perform and at all times fully observe any and all covenants, undertakings and provisions contained herein or in any Bond. Section 5002, LEGAL ABILITY, The Authority repre- sents that it is a conservation and reclamation district, a,-id 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, repair, renew and replace the System and facilities 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 20 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 bondholders. Section 5003. CONSTRUCTION AND OPERATION, The Authority further covenants that it will forthwith proceed to acquire, construct and complete, or cause to be constructed and completed, the System as provided in the Contracts in accordance with plans and specifications which have been ap- proved by its Independent Consulting Engineer, and thereafter each and every part thereof will be continuously operated, or caused to be 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 Board, the people of the State of Texas, the bondholders and the Authority will be promoted. Section 5004. SUPERINTENDENT. The Authority shall keep in its employ a competent Superintendent of the System, who, as agent of the Authority, shall use his best efforts to see that the System is properly and efficiently operated, 21 Section 5.05. ENGINEERS; CONTRACTS, The Authority further covenants and agrees that before entering into any contract for acquisition or construction or for purchase of equipment or material in connection with the System it will procure the advice and recommendation in writing of the Inde- pendent Consulting Engineer concerning such contract and of the plans and specifications referred to therein. 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 con- tract 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 appro- priate 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 5.06. COVENANT TO MAINTAIN SUFFICIENT INCOME. To the end that Authority income will be sufficient to pay the W Bonds and the interest thereon as they become 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 Bonds and the interest thereon and the fees of the Paying Agent. The Authority will not voluntarily consent to any amendment thereto 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 of the Bonds from time to time. If the Cities fail to make payments as required by the Contracts and if it shall appear that enforcement of the Contracts has be- come ineffective or will be ineffective to the extent that a default in payment of principal of or interest on the Bonds occurs or is threatened, the Authority will take all necessary action to preserve and protect the rights of the holders of the Bonds and to assure payment of the principal thereof and the interest thereon. Section 5.07. NO OTHER LIENS. The Authority further covenants that there is not now outstanding and that the 23 Authority will not at any time create or allow to accrue cr to exist any lien upon the System, or any rights owned, ox the revenues pledged herein to the payment of the principal of and interest on the Bonds, at any time derived from the operation thereof, or any of its Funds, except as authorized by Article VII of this Resolution; that the security of the 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. Section 5.08, KEEP FRANCHISES AND PERMITS IN EFFECT, The Authority further covenants that no franchises, permits, privileges, or easements will be allowed to lapse or be for- feited so long as the same shall be necessary for the proper operation of the System. Section 5009. 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, within sixty 24 (60) days after the same shall accrue, 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 pro- vision for, any such lien or charge, so long as the validity thereof shall be contested in good faith and by appropriate legal proceedings. Section 5.10. 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 5.11. SALE AND LEASE OF PROPERTY. The Authority covenants that so long as the Bonds or any of them 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 pro- vided herein. 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 25 longer needed or are no longer useful in connection with the operation and maintenance of the System, subject to the terms of the Contracts. Section 5012, SUCCESSOR PAYING AGENT, If the Paying Agent herein named, or its successors, become unable for any reason to act as Paying Agent hereunder, Authority covenants that it will appoint a bank in the same city as the Paying Agent initially appointed, where the Bonds and coupons may be presented and paid. Section 5013, INDEPENDENT ENGINEER. (a) The Authority covenants that, until the 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 Con- sulting 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) 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 recommenda- tions 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 main- tained in good repair and sound operating condition; (2) the 26 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. The first such report shall be made one year after completion of the System and in each year thereafter. (c) The expense incurred under this Section 5013 shall constitute Maintenance and Operation Expenses. ARTICLE VI INSURANCE Section 6001, INSURANCE COVERAGE, The Authority covenants that it will at all times keep insured such of its 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 there- for, the Authority shall not be required to carry such insurance. 27 All such policies shall be open to the inspection of the bondholders and their representatives at all reasonable times, Section 6.02. INSURANCE PROCEEDS. In the event of any loss or damage 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 reconstruc- tion or repair promptly after such loss or damage shall occur and will continue and properly complete the same as expedi- tiously 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 the Independent Consulting Engineer concerning such reconstruction before it is undertaken. Section 6.03. UNUSED INSURANCE PROCEEDS. Any insurance proceeds remaining after the completion of and payment for any such reconstruction or repair shall be deposited to the credit of the Interest and Sinking Fund, ARTICLE VII ADDITIONAL BONDS AND REFUNDING BONDS Section 7.01. DEFINITIONS. For the purpose of : this Article VII, the following definitions shall apply: (a) "Completion Bonds" means any bonds issued to complete acquisition and construction of the System to enable the Authority to supply water to the Cities. (b) "Improvement Bonds" means bonds issued for improvements, betterments, extensions and replacements of the System. Section 7.02. COMPLETION BONDS AND IMPROVEMENT BONDS. The Authority reserves the right to issue Completion Bonds and Improvement Bonds which, in the discretion of the Authority, may be first lien bonds on a parity with or junior to the Bonds, or a portion of them may be such first lien bonds and a portion may be such junior lien bonds. Section 7.03. REFUNDING BONDS. The Authority reserves the right to issue Refunding Bonds to refund any outstanding bonds secured by a pledge of revenues from the Contracts and any amendments thereof. Provided, that if less than all of such bonds at any time outstanding are refunded the principal and interest requirements shall not be increased in any year in which any of the bonds not being refunded are scheduled to mature. Section 7.04. AUTHORIZATION. Completion Bonds and Improvement Bonds permitted by this Article to be issued shall 29 be authorized by resolutions of the Board of Authority which shall prescribe the form and terms of such bonds, All such bonds shall be as fully secured by this Resolution as though initially issued hereunder. Section 7005, MATURITIES. Bonds issued under this Article VII shall mature on March 1 or September 1, or both, of each of the years in which they are scheduled to mature, ARTICLE VIII DEFAULT PROVISIONS Section 8.01, REMEDIES. In the event of a default or a threatened default in the payment of principal of or interest on the Bonds, any court of competent jurisdiction may, upon petition of holders of twenty -five per cent of the outstanding Bonds, appoint a receiver with authority to collect and receive all pledged income of the Authority, employ and discharge agents and employees 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 of Authority. Such receiver may also be authorized to make contracts for providing a water supply 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 of the Bonds. 30 Section 8,02. 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 of the said 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, ARTICLE IX AMENDMENTS Section 9.01, AMENDMENT. The holders of Bonds aggregating in principal amount two - thirds of the aggregate principal amount of the Bonds at the time outstanding (but not including in any case any 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 nothing herein contained shall permit or be construed to permit the amendment of the terms and conditions contained in this Resolution or in the Bonds so as to: 31 (a) Make any change in the maturity of the Bonds; (b) Reduce the rate of interest borne by any of the Bonds; (c) Reduce the amount of the principal payable on the Bonds; (d) Modify the terms of payment of principal of or interest on the Bonds, or any of them, or impose any conditions with respect to such payment; (e) Affect the rights of the holders of less than all of the Bonds then outstanding; (f) Change the minimum percentage of the principal amount of bonds necessary for consent to such amendment. Section 9.02. NOTICE REQUIRED. If at any time the Authority shall desire to amend the Resolution under this Article, 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 the Paying Agent and with the Secretary of the Board of Author- ity for inspection by all holders of Bonds. Such publication is not required, however, if notice in writing is given to each holder of Bonds. 32 Section 9003. ADOPTION OF AMENDMENT. Whenever at any time 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 of at least two - thirds in aggregate principal amount of Bonds then outstand- ing, which instrument or instruments shall refer to the pro- posed amendment described in said notice and which specifically consent to and approve such amendment in substantially the form of the copy thereof on file with the Paying Agent and Authority, the Authority may adopt the amendatory resolution in substantially the same forma Section 9.04. EFFECTIVE UPON ADOPTION. Upon the adoption of any amendatory resolution pursuant to the provi- sions of this Article, the Resolution shall be deemed to be amended in accordance with such amendatory resolution, and the respective rights, duties and obligations under the Resolution of the Authority and all the holders of outstanding Bonds shall thereafter be determined, exercised and enforced hereunder, subject in all respects to such amendments. Section 9.05. REVOCATION OF CONSENT. Any consent given by the holder of a Bond pursuant to the provisions of this Article shall be irrevocable for a period of six months 33 from the date of the first publication of the notice provided for in this Article, and shall be conclusive and binding upon all future holders of the same 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 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 of two - thirds aggregate principal amount of the Bonds outstanding as in this Section defined have, prior to the attempted revoca- tion, consented to and approved the amendment. Section 9.06. PROOF OF OWNERSHIP. For the purpose of this Article, the fact of the holding of Bonds by any Bondholder and the amount and numbers of such Bonds, and the date of his holding same may be proved by the affidavit of the person claiming to be such holder, or by a certificate executed by any trust company, bank, banker or any other depository, wherever situated showing that on the date therein mentioned such person had on deposit with such trust company, bank, banker or other depository, the Bonds described in such certificate, The Authority may conclusively assume that such ownership continues until written notice to the contrary is served upon the Authority. 34 A7]TTrT T'i X APPLICATION OF BOND PROCEEDS Section 10,01. Upon delivery of and payment for the Bonds, the bank at which such payment is made shall, in accord- ance with a letter to be written by the President or General Manager of the Authority, remit the Bond proceeds as provided in the succeeding Sections, Section 10.02. INTEREST AND SINKING FUND. There shall be deposited in the Interest and Sinking Fund an amount equal to the interest to accrue on the Bonds for twenty -four (24) months from the date of the Bonds. The amount in said Fund shall be kept invested in securities permitted in Section 8 -B of Article 8280 -188, V.C.S. which mature on dates which coincide as nearly as practicable to the dates when money will be needed to make interest payments on the Bonds. Section 10.03. CONSTRUCTION FUND. After the dis- bursement provided for in Section 10.02, the remainder of the Bond proceeds shall be deposited in the Construction Fund. The Construction Fund shall be subject to and charged with a lien in favor of the holders of the Bonds until said Funds are paid out as herein provided. The Depository shall be required to secure the Construction Fund in its possession by pledging obligations of or obligations unconditionally guaranteed by 35 the United States; such obligations at all times shall be at least equal in value to the amount in the Construction Fund in its possession, Section 10.04. INVESTMENT. Money in the Construction Fund shall be kept invested in securities permitted by Section 8 -B of Article 8280 -188, V.C.S. which mature on dates which coincide as nearly as practicable to the dates when money will be needed to pay Project Costs. All interest and profits from such investments shall be deposited into the Construction Fund, Section 10.05. DISBURSEMENTS FROM CONSTRUCTION FUND. (a) Money in the Construction Fund shall be subject to disbursement by the Authority for payment of Project Costs to be incurred in the construction and acquisition of the Sys- tem. 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 Depos- itories, Disbursements for payments to construction contractors and disbursements for construction material, supplies and equip- ment shall be approved by the Consulting Engineers. (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 36 to projects of this nature, and without limiting the generality of the foregoing, it shall include purchase of equipment, capitalized interest, engineering, financing, financial con- sultants, administrative, auditing and legal expenses incurred in connection with the performance of the Contract. 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. Until the System is completed, the Fees of the Paying Agent shall be paid from the Construction Fund, and thereafter from the Interest and Sinking Fund. Damages to land and property, whenever accruing, adjudged under Article I, Section 17 of the Constitution of Texas shall constitute a part of Project Costs. After completion of the System, any residue remaining in the Construction Fund shall be deposited in the Interest and Sinking Fund. Section 10.06, COVENANT TO APPLY PROCEEDS AND RESTRICTION ON INVESTMENT. That the Board covenants that the proceeds from the sale of the Bonds will be used as soon as practicable for the purpose for which the Bonds are issued and will not be used to acquire, or to replace funds which were used directly or indirectly to acquire, securities (within the meaning of Section 165(g)(2)(A) or (B) of the Internal Revenue 37 Code of 1954, as amended, (the "Code ")), or obligations (other than obligations described in subsection (a)(1) of Section 103 of the Code), which produce a yield which is "materially higher" (within the meaning of subsection (d) (2) (A) of Section 103 of the Code) than the yield on the Bonds except for a temporary period pending such use, to the extent permitted by Section 103(d)(4)(A) of the Code, The Board further covenants that such proceeds will not be used directly or indirectly so as to cause all or any part of the bonds to be or become "arbitrage bonds" within the meaning of Section 103(d) of the Internal Revenue Code of 1954, as amended. ARTICLE XI APPROVAL AND DELIVERY; SEVERABILITY Section 11.01. APPROVAL AND REGISTRATION OF BONDS, That the proper officers of the Authority shall prepare and the Secretary of the Authority shall certify a complete transcript of these proceedings, and such transcript, together with a transcript of proceedings had in the Board in authori- zing the Contracts, shall thereupon be submitted to the Attorney General of the State of Texas for his examination with a request that he examine the same and approve the Bonds and the Contracts as recited in the Resolution and in the Bonds, and no such Bonds shall be issued under the terms of this Resolution unless : and until the same shall have been approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas as required by law, Upon registration of said Bonds, the Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's certificate of registration prescribed herein to be printed on the back of each Bond, and the seal of said Comptroller shad be affixed to each of said Bonds. Section 11.02, AWARD OF BONDS. The Bonds are hereby awarded to First Southwest Company at a price of par and accrued interest to date of delivery. It is hereby deter- mined by the Board of Authority that the price and terms of said bid are the most advantageous reasonably obtainable. Section 11.03. FURTHER PROCEDURES. That the officers, employees and agents of the Authority, and each of them, shall be and they are 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 Authority all such instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this Resolution and of the Bonds to be issued hereunder. 39 Section 11.04. REPEAL; SEVERABILITY. That all resolutions or parts thereof, or other corporate action of the Authority or of this Board of Directors, which in any manner or to any extent conflict with any provisions of this Resolution, shall be, and such other resolutions and corporate action are hereby expressly repealed and in case any one or more of the provisions of this Resolution shall be held to be invalid or ineffective by any court of competent jurisdiction as to any person or circumstance, the remainder hereof and the application of such provision or provisions of persons or circumstances other than those as to which it is held invalid shall not be affected thereby. Section 11.055 EMERGENCY. That it is hereby officially found and determined that a case of emergency or urgent public necessity exists which requires the holding of the meeting at which this Resolution is adopted, such emergency or urgent public necessity being that the issuance of said bonds is required as soon as possible and without delay for necessary and urgently needed public improvements; 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 40 required by Vernon's Ann. Civ. St. Article 6252 -17. ADOPTED AND APPROVED this llth day of February, 1972. President, Board of Directors, Trinity River Authority of Texas ATTEST: +' Secretary, /Board of Directors, Trinity River Authority of Texas 41 THE STATE OF TEXAS TRINITY RIVER AUTHORITY OF TEXAS I. the undersigned, Secretary of the Board of Directors of the Trinity River Authority of Texas, do hereby certify that the above and foregoing is a true, full and correct copy of a resolution (and of the minutes pertaining thereto) adopted by the Board of Directors of Trinity River Authority of Texas on the llth day of February, 1972, author - the issuance of Trinity River Authority of Texas (Tarrant County Water Project) Revenue Bonds, Series 1972, and resolv- ing other matters relating to the subject, which resolution is duly of record in the minutes of the Board of Directors. EXECUTED UNDER MY HAND and seal of said Authority, this the 11th day of February, 1972. Secretar , Bo of Dire ors, Trinity er OAithority of Texas ( SEAL)