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R-09-02-12-10D1 - 2/12/2009RESOLUTION NO. R -09-02-12-10D1 WHEREAS, the City of Round Rock, Texas (the "City") as a participating member of the Brushy Creek Regional Utility Authority, Inc, (the "BCRUA") has previously approved the BCRUA executing a financing agreement with the Texas Water Development Board ("TWDB") regarding the purchase of a series of bonds to be issued by the BCRUA for the City related to the BCRUA Project; and WHEREAS, due to the delay of the BCRUA Project, the TWDB has submitted a new Financing Agreement for approval; and WHEREAS, it is hereby further officially found and determined that public notice of the time, place, and purpose of this meeting was given, all as required by Texas Government Code, Chapter 551; Now Therefore BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, THAT: SECTION 1. FINANCING AGREEMENT. The City approves the BCRUA executing a financing agreement with the TWDB in substantially the form and substance attached hereto as Exhibit "A" with such changes as may be approved by the City Attorney and bond counsel to the BCRUA in connection with the BCRUA issuing one or more series of bonds to finance the BCRUA Project as described in the Master Contract. The City Manager is hereby delegated the authority to confer with the BCRUA General Manager regarding approval of TWDB financing rates in accordance with the financing agreement. SECTION 2. IMMEDIATE EFFECT. This Resolution shall take effect immediately from and after its adoption in accordance with the law. 0:\WDOX\RESOLUTI\R90212D1.DOC/sls The City Manager is authorized to take such actions as necessary to implement this Resolution. The City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Resolution was adopted was posted and that such meeting was open to the public as required by law at all times during which this Resolution and the subject matter hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended. RESOLVED this 12th day of February, 2009. ATTEST: vtivLMAAte- SARA L. WHITE, City Secretary 2 af be/ ALAN MCGRAW, Mayor City of Round Rock, Texas a a EXHIBIT "A" AMENDED AND RESTATED FINANCING AGREEMENT THIS AMENDED AND RESTATED FINANCING AGREEMENT (Agreement) is entered into between the TEXAS WATER DEVELOPMENT BOARD (Board), an agency of the State of Texas, and the BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC., a local government corporation created and acting on behalf of the cities of Cedar Park, Leander, and Round Rock, Texas (the "Cities" or individually a "City") under Texas Transportation Code, Chapter 431, Subchapter D (Borrower). RECITALS WHEREAS, the Board adopted Resolution No. 08-03 on January 28, 2008, making a commitment to the Borrower for financial assistance in the amount of $309,755,000 from the Financial Assistance Account of the Development Fund II (DFund II) administered by the Board. WHEREAS, the Borrower intends to sell the Board the Borrower's $182,020,000 Contract Revenue Bonds, proposed Series 2009 A, B, and C (collectively, Borrower Bonds), described on Attachment A attached hereto, to fund Phase I of the Borrower's regional water supply project described in Borrower's application, as amended, and in Board Resolution No. 08-03 (Attachment B) and the associated Memorandum to the Board (Attachment C), and as described as the "first phase" in the "Master Contract for the Financing, Construction and Operation of the BCRUA Regional Water Treatment and Distribution Project Among Brushy Creek Regional Utility Authority, Inc, City of Cedar Park, City of Leander and City of Round Rock, dated September 2, 2008, as amended by the First Amendment (the "Master Contract"); and WHEREAS, the Borrower and the Board previously executed a Financing Agreement as of September 10, 2008, which the parties desire to amend and restate in its entirety to reflect the new delivery date of the Borrower Bonds and revise the damages provision; and WHEREAS, DFund II is funded, in part, with proceeds of the Board's Water Financial Assistance Bonds, and is used to provide financial assistance under Texas Water Code § 17.959 and Texas Constitution Article III, Section 49-d-8; and WHEREAS, DFund II is funded, in part, with money received as repayment of financial assistance provided from DFund II, which is used to pay the principal and interest on the Board's Water Financial Assistance Bonds, under Texas Constitution, Article III, Section 49 -d -8(e); and WHEREAS, Condition No. 13 of Board Resolution 08-03 provides that the commitment is contingent on a future sale of bonds or on the availability of funds on hand; and WHEREAS, the Board intends to issue Water Financial Assistance Bonds in order to enable it to provide financial assistance from DFund II to the Borrower; and WHEREAS, the Board and the Borrower desire to enter into this Agreement to set forth the obligations of the parties with respect to the Board's intent to issue Water Financial Assistance Bonds to provide financial assistance from DFund II solely to the Borrower, and the Borrower's intent to issue its Borrower Bonds to the Board; NOW, THEREFORE, for and in consideration of the premises and the mutual covenants herein contained, the Board and the Borrower hereby agree as follows: AGREEMENT Section 1. Loan Commitment; Schedule. The Board, pursuant to its commitment to provide financial assistance in Resolution 08-03, will provide $182,020,000 in financial assistance to the Borrower from DFund II under the terms and conditions in Resolution 08-03, which is incorporated herein for all purposes by reference. The Board's financial assistance will be evidenced by the Board's purchase of the Borrower Bonds identified in Attachment A. The Borrower hereby commits to borrow $182,020,000 from DFund II, which loan will be evidenced by the Borrower's sale of the Borrower Bonds identified in Attachment A. Each party agrees to use its best efforts to take actions as may be required by such party in order to effectuate the purchase and sale of the Borrower Bonds by July 15, 2009. Section 2. Interest Rates. The financial assistance to be provided from Water Financial Assistance Bonds specifically issued for the Borrower will be made at a yield similar to the rate the Board received in the open market the day the Board sold the Water Financial Assistance Bonds, but which also recovers the Board's costs of issuance associated with the issuance of such bonds. The parties agree that the Board will include an extraordinary redemption provision in its bond documents, and the Borrower agrees to pay all costs or increased interest rates associated with the extraordinary redemptions provision. Section 3. Closing and Damages. By its execution of this Agreement, the Borrower represents that it has a current need for the financial assistance that is the subject of this Agreement and acknowledges that the Board will incur significant costs in reliance upon the Borrower's commitment to borrow such funds. The Borrower agrees to timely submit appropriate closing documents to the Office of the Attorney General of Texas for approval and to close on the Borrower Bonds described in Attachment A within 60 days after the Water Financial Assistance Bond proceeds are delivered to the Board by the underwriters thereof (Underwriters), subject to the receipt of Attorney General approval of the Borrower Bonds. The failure of the Borrower to close on the Borrower Bonds in a timely manner will result in damages to the Board, and the amount of such damages is currently difficult to ascertain. If the Borrower fails to close on the sale of its Borrower Bonds within 60 days after Water Financial Assistance Bond proceeds are delivered to the Board by the Underwriters, the Borrower agrees to pay the Board, as damages, the Borrower's pro rata share of the reasonable actual costs of issuance incurred by the Board in the issuance of the Water Financial Assistance Bonds. The Borrower represents that it has executed the Master Contract with the Cities and each City has pledged its gross revenues of its City System (as defined and provided in the Master Contract) to 2 pay the Borrower all of the project costs, including financing and other related costs, which pledge is sufficient and legally available to pay the damages in the event Borrower fails to close in the time required by this section, and Borrower pledges these funds to the payment of all damages under this Agreement. In addition to the foregoing, in the event the Borrower does not close on the Borrower Bonds within 60 days after the Water Financial Assistance Bond proceeds are delivered to the Board, beginning the 61st day after the Water Financial Assistance Bond proceeds are delivered to the Board by the Underwriters, the Board, at its option, may use the Water Financial Assistance Bond proceeds to provide financial assistance to other entities. The Board may also, at its option, elect to defease or redeem all or a portion of the Water Financial Assistance Bonds, and, provided the Board's election is made within one year after the Water Financial Assistance Bond proceeds are delivered to the Board by the Underwriters, the Borrower agrees to pay the Board from funds made available under the Master Contract all costs associated with the portion of such defeasance or redemption attributable to the Borrower's failure to close on the Borrower Bonds, it being understood that the Board will apply the proceeds of its Water Financial Assistance Bonds that are set aside to purchase the Borrower Bonds, including investment income, to the defeasance or redemption. All damages under this Agreement are due within 45 days of the Board's written notification to the Borrower of such damages. Section 4. Termination. A. The parties hereto agree that the Board's obligation to lend money to the Borrower from DFund II is contingent upon the purchase of the Board's Water Financial Assistance Bonds by the underwriters thereof (Underwriters) pursuant to the Bond Purchase Agreement. Accordingly, if the Underwriters fail to purchase the Board's Water Financial Assistance Bonds pursuant to the Bond Purchase Agreement, the Board, upon delivery of written notice thereof to the Borrower, may extend or terminate this Agreement together with all of its obligations and duties hereunder without incurring any cost, fee or penalty therefor. B. The Borrower may terminate this Agreement by delivery of written notice to the Board at any time prior to 5:00 p.m. (Central Standard Time) twelve business days preceding the date on which the Board intends to execute the Bond Purchase Agreement, provided that the Borrower agrees to compensate the Board for its pro rata share of reasonable actual costs related to the preparations for bond issuance within 60 days of the Board's written notification to the Borrower of such costs. The Board will provide the Borrower 15 business days written notice of the date the Board intends to execute the Bond Purchase Agreement together with: (i) an indication of the estimated interest rate for the Borrower Bonds; and (ii) a copy of the draft Preliminary Official Statement for the Board's Water Financial Assistance Bonds. The Board will provide the Borrower a copy of the Preliminary Official Statement when it is officially released. The Board covenants and agrees that it will not execute the Bond Purchase Agreement prior to May 11, 2009. Each party agrees to timely communicate to the other party any changes or updates relating to the project and the debt issuance by telephone, or in writing under Section 6 of this Agreement when appropriate. 3 Section 5. Redemption of Outstanding Debt. If proceeds of the Borrower Bonds are to be used, in whole or in part, to redeem outstanding bonds, commercial paper, or other interim financing issued by the Borrower, the Borrower agrees that it will not take or fail to take any action that will cause the Board's Water Financial Assistance Bonds to be considered to be advance refunding bonds under Section 148 of the Internal Revenue Code of 1986, as amended. Specifically, the Borrower agrees to redeem any such outstanding bonds, commercial paper, or other interim financing within ninety (90) days of the date of delivery of the Board's Water Financial Assistance Bonds and to take such other action as shall be required to comply with this Section. Section 6. Notices. All notices, agreements or other communications required hereunder shall be given, and shall be deemed given, when delivered in writing to the address or telecopier number of the identified party or parties set forth below: Texas Water Development Board Piper Montemayor Team Lead, Debt and Portfolio Management P.O. Box 13231 Austin, Texas 78711-3231 Telephone (512) 475-2117 Facsimile (512) 475-2053 Brushy Creek Regional Utility Authority, Inc. Chris Lippe 221 E. Main Street Round Rock, Texas 78664 Telephone (512) 218-5401 Facsimile (512) 218-7097 Section 7. Severability. In the event any provision of this Agreement shall be held illegal, invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate, render unenforceable or otherwise affect any other provisions hereof. Section 8. Amendments, Supplements and Modifications. This Agreement shall not be amended, supplemented or modified except by a written instrument executed by the Board and the Borrower. Section 9. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. Section 10. State Audit. By executing this Agreement, the Borrower accepts the authority of the State Auditor's Office, under direction of the legislative audit committee, to conduct audits and investigations in connection with any and all state funds received pursuant to this Agreement. The Borrower shall comply with and cooperate in any such investigation or audit. The Borrower agrees to provide the State Auditor with access to any information the State Auditor considers relevant to the investigation or audit. The Borrower also agrees to include a provision in any subcontract related to this Agreement that requires the subcontractor to submit to audits and investigation by the State Auditor's Office in connection with any and all state funds received pursuant to the subcontract. Section 11. Force Majeure. Either party may be excused from performance under this 4 contract for any period when performance is prevented as the result of an act of God, strike, war, civil disturbance, epidemic, or court order, provided that the party experiencing the event of Force Majeure has prudently and promptly acted to take any and all steps that are within the party's control to ensure performance and to shorten the duration of the event of Force Majeure. The party suffering an event of Force Majeure shall provide notice of the event to the other party as soon as practicable but not later than 36 hours after the termination of the event. Subject to this provision, such nonperformance shall not be deemed a default or a ground for termination. Section 12. Effective Date. This Agreement shall be effective as of the date of the last signature below. Section 13. Binding Agreement. The respective commitments of the Board and the Borrower set forth above shall be binding upon the Board and the Borrower upon both parties' execution of this Agreement. Section 14. Amendment and Restatement. This Agreement is an amendment and restatement of the Financing Agreement executed as of September 10, 2008. This Agreement supersedes the September 10, 2008, Financing Agreement which, upon execution of this Agreement is no longer effective. 5 BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC. By: Name: Title: President Date: STATE OF TEXAS COUNTY OF This instrument was acknowledged before me on the — day of 20_, by in his/her capacity as , on behalf of the Brushy Creek Regional Utility Authority, Inc. (SEAL) Notary Public, State of Texas TEXAS WATER DEVELOPMENT BOARD By: Name: J. Kevin Ward Title: Executive Administrator Date: STATE OF TEXAS COUNTY OF TRAVIS This instrument was acknowledged before me on the _ day of , 20_ , by in his capacity as Executive Administrator of the Texas Water Development Board, an agency of the State of Texas, on behalf of said agency. (SEAL) 6 Notary Public, State of Texas ATTACHMENT A DESCRIPTION OF BORROWER BONDS Title of Borrower Bonds Brushy Creek Regional Utility Authority, Inc. Contract Revenue Bonds, Series 2009 A, B, and C as set forth below Project Name Project Number Phase I, Regional Water Supply Project Aggregate Principal Amount of Borrower Bonds $182,020,000 Consisting of: Brushy Creek Regional Utility Authority, Inc. City of Cedar Park Contract Revenue Bonds (Brushy Creek Regional Water Treatment and Distribution Project), Series 2009A, $24,970,000 Brushy Creek Regional Utility Authority, Inc. City of Leander Contract Revenue Bonds (Brushy Creek Regional Water Treatment and Distribution Project), Series 2009B, $91,180,000 Brushy Creek Regional Utility Authority, Inc. City of Round Rock Contract Revenue Bonds (Brushy Creek Regional Water Treatment and Distribution Project), Series 2009C, $65,870,000 Anticipated Closing Date July 15, 2009 Maturity Schedule: [To Come] Maturity Principal Amount 7 DATE: February 4, 2009 SUBJECT: City Council Meeting — February 12, 2009 ITEM: 10D1. Consider a resolution authorizing the Mayor to execute an Amended and Restated Financing Agreement between the Brushy Creek Regional Utility Authority and the Texas Water Development Board for the Regional Water System Project. Department: Staff Person: Justification: Water and Wastewater Utilities Michael Thane, P.E., Director of Utilities The BCRUA and TWDB previously executed this Financing Agreement on September 10, 2008. The parties desire to amend and restate the Finance Agreement to reflect the new delivery date of the BCRUA bonds, and revise the damage provisions to the BCRUA for failure to close on the BCRUA bonds within 60 days after Water Financial Assistance Bond proceeds are delivered to the TWDB. The date in which the BCRUA must sell bonds, or any City must provide funding for its total allocations of the project cost through a separate bond issue, is being amended to on or before July 15, 2009. Funding: Cost: N/A Source of funds: N/A Outside Resources: City of Cedar Park and City of Leander Background Information: In August 2007, the BCRUA submitted an application to the TWDB for financial assistance from the Financial Assistance Account of the Development Fund II (DFund II) administered by the TWDB for the regional water project. In January of 2008, the TWDB adopted Resolution No. 08- 03, making a commitment to the Borrower for financial assistance in the total amount of $309,755,000 (phases I & II). The BCRUA is now ready to issue Contract Revenue Bonds to the TWDB in the total amount of $182,020,000 for the first phase of the project. In order for this to occur, the TWDB must issue Water Financial Assistance Bonds to provide for funding for the financial assistance from the DFund II. This financing agreement sets forth the obligations of the parties and establishes the formal intent of the TWDB to issue Water Financial Assistance Bonds solely for BCRUA, and the BCRUA's intent to issue its Contract Revenue Bonds to the TWDB. Round Rock's Portion of the issuance is $65,870,000. Public Comment: N/A EXECUTED DOCUMENT FOLLOWS AMENDED AND RESTATED FINANCING AGREEMENT THIS AMENDED AND RESTATED FINANCING AGREEMENT (Agreement) is entered into between the TEXAS WATER DEVELOPMENT BOARD (Board), an agency of the State of Texas, and the BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC., a local government corporation created and acting on behalf of the cities of Cedar Park, Leander, and Round Rock, Texas (the "Cities" or individually a "City") under Texas Transportation Code, Chapter 431, Subchapter D (Borrower). RECITALS WHEREAS, the Board adopted Resolution No. 08-03 on January 28, 2008, making a commitment to the Borrower for financial assistance in the amount of $309,755,000 from the Financial Assistance Account of the Development Fund II (DFund II) administered by the Board. WHEREAS, the Borrower intends to sell the Board the Borrower's $182,020,000 Contract Revenue Bonds, proposed Series 2009 A, B, and C (collectively, Borrower Bonds), described on Attachment A attached hereto, to fund Phase I of the Borrower's regional water supply project described in Borrower's application, as amended, and in Board Resolution No. 08-03 (Attachment B) and the associated Memorandum to the Board (Attachment C), and as described as the "first phase" in the "Master Contract for the Financing, Construction and Operation of the BCRUA Regional Water Treatment and Distribution Project Among Brushy Creek Regional Utility Authority, Inc, City of Cedar Park, City of Leander and City of Round Rock, dated September 2, 2008, as amended by the First Amendment (the "Master Contract"); and WHEREAS, the Borrower and the Board previously executed a Financing Agreement as of September 10, 2008, which the parties desire to amend and restate in its entirety to reflect the new delivery date of the Borrower Bonds and revise the damages provision; and WHEREAS, DFund II is funded, in part, with proceeds of the Board's Water Financial Assistance Bonds, and is used to provide financial assistance under Texas Water Code § 17.959 and Texas Constitution Article III, Section 49-d-8; and WHEREAS, DFund II is funded, in part, with money received as repayment of financial assistance provided from DFund II, which is used to pay the principal and interest on the Board's Water Financial Assistance Bonds, under Texas Constitution, Article III, Section 49 -d -8(e); and WHEREAS, Condition No. 13 of Board Resolution 08-03 provides that the commitment is contingent on a future sale of bonds or on the availability of funds on hand; and WHEREAS, the Board intends to issue Water Financial Assistance Bonds in order to enable it to provide financial assistance from DFund II to the Borrower; and b-7, VZ- -S" WHEREAS, the Board and the Borrower desire to enter into this Agreement to set forth the obligations of the parties with respect to the Board's intent to issue Water Financial Assistance Bonds to provide financial assistance from DFund II solely to the Borrower, and the Borrower's intent to issue its Borrower Bonds to the Board; NOW, THEREFORE, for and in consideration of the premises and the mutual covenants herein contained, the Board and the Borrower hereby agree as follows: AGREEMENT Section 1. Loan Commitment; Schedule. The Board, pursuant to its commitment to provide financial assistance in Resolution 08-03, will provide $182,020,000 in financial assistance to the Borrower from DFund II under the terms and conditions in Resolution 08-03, which is incorporated herein for all purposes by reference. The Board's financial assistance will be evidenced by the Board's purchase of the Borrower Bonds identified in Attachment A. The Borrower hereby commits to borrow $182,020,000 from DFund II, which loan will be evidenced by the Borrower's sale of the Borrower Bonds identified in Attachment A. Each party agrees to use its best efforts to take actions as may be required by such party in order to effectuate the purchase and sale of the Borrower Bonds by July 15, 2009. Section 2. Interest Rates. The financial assistance to be provided from Water Financial Assistance Bonds specifically issued for the Borrower will be made at a yield similar to the rate the Board received in the open market the day the Board sold the Water Financial Assistance Bonds, but which also recovers the Board's costs of issuance associated with the issuance of such bonds. The parties agree that the Board will include an extraordinary redemption provision in its bond documents, and the Borrower agrees to pay all costs or increased interest rates associated with the extraordinary redemptions provision. Section 3. Closing and Damages. By its execution of this Agreement, the Borrower represents that it has a current need for the financial assistance that is the subject of this Agreement and acknowledges that the Board will incur significant costs in reliance upon the Borrower's commitment to borrow such funds. The Borrower agrees to timely submit appropriate closing documents to the Office of the Attorney General of Texas for approval and to close on the Borrower Bonds described in Attachment A within 60 days after the Water Financial Assistance Bond proceeds are delivered to the Board by the underwriters thereof (Underwriters), subject to the receipt of Attorney General approval of the Borrower Bonds. The failure of the Borrower to close on the Borrower Bonds in a timely manner will result in damages to the Board, and the amount of such damages is currently difficult to ascertain. If the Borrower fails to close on the sale of its Borrower Bonds within 60 days after Water Financial Assistance Bond proceeds are delivered to the Board by the Underwriters, the Borrower agrees to pay the Board, as damages, the Borrower's pro rata share of the reasonable actual costs of issuance incurred by the Board in the issuance of the Water Financial Assistance Bonds. The Borrower represents that it has executed the Master Contract with the Cities and each City has pledged its gross revenues of its City System (as defined and provided in the Master Contract) to 2 pay the Borrower all of the project costs, including financing and other related costs, which pledge is sufficient and legally available to pay the damages in the event Borrower fails to close in the time required by this section, and Borrower pledges these funds to the payment of all damages under this Agreement. In addition to the foregoing, in the event the Borrower does not close on the Borrower Bonds within 60 days after the Water Financial Assistance Bond proceeds are delivered to the Board, beginning the 61st day after the Water Financial Assistance Bond proceeds are delivered to the Board by the Underwriters, the Board, at its option, may use the Water Financial Assistance Bond proceeds to provide financial assistance to other entities. The Board may also, at its option, elect to defease or redeem all or a portion of the Water Financial Assistance Bonds, and, provided the Board's election is made within one year after the Water Financial Assistance Bond proceeds are delivered to the Board by the Underwriters, the Borrower agrees to pay the Board from funds made available under the Master Contract all costs associated with the portion of such defeasance or redemption attributable to the Borrower's failure to close on the Borrower Bonds, it being understood that the Board will apply the proceeds of its Water Financial Assistance Bonds that are set aside to purchase the Borrower Bonds, including investment income, to the defeasance or redemption. All damages under this Agreement are due within 60 days of the Board's written notification to the Borrower of such damages. Section 4. Termination. A. The parties hereto agree that the Board's obligation to lend money to the Borrower from DFund II is contingent upon the purchase of the Board's Water Financial Assistance Bonds by the underwriters thereof (Underwriters) pursuant to the Bond Purchase Agreement. Accordingly, if the Underwriters fail to purchase the Board's Water Financial Assistance Bonds pursuant to the Bond Purchase Agreement, the Board, upon delivery of written notice thereof to the Borrower, may extend or terminate this Agreement together with all of its obligations and duties hereunder without incurring any cost, fee or penalty therefor. B. The Borrower may terminate this Agreement by delivery of written notice to the Board at any time prior to 5:00 p.m. (Central Standard Time) twelve business days preceding the date on which the Board intends to execute the Bond Purchase Agreement, provided that the Borrower agrees to compensate the Board for its pro rata share of reasonable actual costs related to the preparations for bond issuance within 60 days of the Board's written notification to the Borrower of such costs. The Board will provide the Borrower 15 business days written notice of the date the Board intends to execute the Bond Purchase Agreement together with: (i) an indication of the estimated interest rate for the Borrower Bonds; and (ii) a copy of the draft Preliminary Official Statement for the Board's Water Financial Assistance Bonds. The Board will provide the Borrower a copy of the Preliminary Official Statement when it is officially released. The Board covenants and agrees that it will not execute the Bond Purchase Agreement prior to May 11, 2009. Each party agrees to timely communicate to the other party any changes or updates relating to the project and the debt issuance by telephone, or in writing under Section 6 of this Agreement when appropriate. 3 Section 5. Redemption of Outstanding Debt. If proceeds of the Borrower Bonds are to be used, in whole or in part, to redeem outstanding bonds, commercial paper, or other interim financing issued by the Borrower, the Borrower agrees that it will not take or fail to take any action that will cause the Board's Water Financial Assistance Bonds to be considered to be advance refunding bonds under Section 148 of the Internal Revenue Code of 1986, as amended. Specifically, the Borrower agrees to redeem any such outstanding bonds, commercial paper, or other interim financing within ninety (90) days of the date of delivery of the Board's Water Financial Assistance Bonds and to take such other action as shall be required to comply with this Section. Section 6. Notices. All notices, agreements or other communications required hereunder shall be given, and shall be deemed given, when delivered in writing to the address or telecopier number of the identified party or parties set forth below: Texas Water Development Board Piper Montemayor Team Lead, Debt and Portfolio Management P.O. Box 13231 Austin, Texas 78711-3231 Telephone (512) 475-2117 Facsimile (512) 475-2053 Brushy Creek Regional Utility Authority, Inc. Chris Lippe 221 E. Main Street Round Rock, Texas 78664 Telephone (512) 218-5401 Facsimile (512) 218-7097 Section 7. Severability. In the event any provision of this Agreement shall be held illegal, invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate, render unenforceable or otherwise affect any other provisions hereof. Section 8. Amendments, Supplements and Modifications. This Agreement shall not be amended, supplemented or modified except by a written instrument executed by the Board and the Borrower. Section 9. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. Section 10. State Audit. By executing this Agreement, the Borrower accepts the authority of the State Auditor's Office, under direction of the legislative audit committee, to conduct audits and investigations in connection with any and all state funds received pursuant to this Agreement. The Borrower shall comply with and cooperate in any such investigation or audit. The Borrower agrees to provide the State Auditor with access to any information the State Auditor considers relevant to the investigation or audit. The Borrower also agrees to include a provision in any subcontract related to this Agreement that requires the subcontractor to submit to audits and investigation by the State Auditor's Office in connection with any and all state funds received pursuant to the subcontract. Section 11. Force Majeure. Either party may be excused from performance under this 4 contract for any period when performance is prevented as the result of an act of God, strike, war, civil disturbance, epidemic, or court order, provided that the party experiencing the event of Force Majeure has prudently and promptly acted to take any and all steps that are within the party's control to ensure performance and to shorten the duration of the event of Force Majeure. The party suffering an event of Force Majeure shall provide notice of the event to the other party as soon as practicable but not later than 36 hours after the termination of the event. Subject to this provision, such nonperformance shall not be deemed a default or a ground for termination. Section 12. Effective Date. This Agreement shall be effective as of the date of the last signature below. Section 13. Binding Agreement. The respective commitments of the Board and the Borrower set forth above shall be binding upon the Board and the Borrower upon both parties' execution of this Agreement. Section 14. Amendment and Restatement. This Agreement is an amendment and restatement of the Financing Agreement executed as of September 10, 2008. This Agreement supersedes the September 10, 2008, Financing Agreement which, upon execution of this Agreement is no longer effective. 5 BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC. By: 9'.4 Name.`` _ �SCDff �kf& Tim: President ate: 7.4 (-D STATE OF TEXAS/ COUNTY OF !e-y�l i1349\- This instrument was acknowledged before me on tl 1 day of Ph ••SC � ��� in his/her capacity as �-/'�- ,2 by �� , on ehalf of the Brushy Creek Regional Utility Authority, Inc. (SEAL) MONIQUE G, P nS. MY COMMISSIOl4EXPIRES September 18. ?Pi 1 TEXAS WATER DEVELOPMENT BOARD By: l Nam . J. Kevin Ward Title: Executive Administrator Date: 1-65, STATE OF TEXAS COUNTY OF TRAVIS This instrument was acknowledged before me on the 11k4' day of Ge, poiar, 2009, by S • Y...v . h Vvortik in his capacity as Executive Administrator of the Texas Water Development Board, an agency of the State of Texas, on behalf of said agency. (SEAL) .EXP•1��' •�"\ 'i.9/02"• \\ 08 2 \\\\\ `! \\\\\\01111"11/0/, U- PBo ... • °, <<,• k • srgTE OF 1• 6 Notary Public, State of Texas ATTACHMENT A DESCRIPTION OF BORROWER BONDS Title of Borrower Bonds Brushy Creek Regional Utility Authority, Inc. Contract Revenue Bonds, Series 2009 A, B, and C as set forth below Project Name Project Number Phase I, Regional Water Supply Project Aggregate Principal Amount of Borrower Bonds $182,020,000 Consisting of: Brushy Creek Regional Utility Authority, Inc. City of Cedar Park Contract Revenue Bonds (Brushy Creek Regional Water Treatment and Distribution Project), Series 2009A, $24,970,000 Brushy Creek Regional Utility Authority, Inc. City of Leander Contract Revenue Bonds (Brushy Creek Regional Water Treatment and Distribution Project), Series 2009B, $91,180,000 Brushy Creek Regional Utility Authority, Inc. City of Round Rock Contract Revenue Bonds (Brushy Creek Regional Water Treatment and Distribution Project), Series 2009C, $65,870,000 Anticipated Closing Date July 15, 2009 Maturity Schedule: [To Come] Maturity Principal Amount 7