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BCRUA_R-09-02-11-5B Resolution No. 61-02-11-66 RESOLUTION APPROVING AN AMENDED AND RESTATED FINANCING AGREEMENT BETWEEN THE BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC.,AND THE TEXAS WATER DEVELOPMENT BOARD, AND OTHER MATTERS IN CONNECTION THEREWITH. WHEREAS, there has been presented to the BCRUA an amended and restated financing agreement with the Texas Water Development Board ("TWDB"), attached hereto as Attachment A, in connection with the issuance of a separate series of contract revenue bonds for each Member City; and, WHEREAS, the City of Leander, Texas, the City of Round Rock, and the City of Cedar Park (individually, the "City" and together, the "Cities") as participating members of the Brushy Creek Regional Utility Authority, Inc. (the "BCRUA"), have previously approved the execution by of 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 benefit of the Cities related to the BCRUA Project; and WHEREAS, due to the delay in the construction and beginning of operation of the BCRUA Project, the TWDB has submitted an amended and restated Financing Agreement for approval by the BCRUA; and WHEREAS, due to the deadlines for the submission of the executed amended and restated financing agreement, which must be submitted by the BCRUA to the TWDB no later that February 15, 2009; the BCRUA is hereby presented with the amended and restated financing agreement for its approval, which approval shall be subject to the approval of same by the City Councils of Leander, Round Rock, and Cedar Park (which are all considering the amended and restated financing agreement for approval on February 12, 2009); and WHEREAS, it is hereby found and determined that it is necessary and in the best interests of the BCRUA and the Member Cities for BCRUA to approve the amended and restated financing agreement with the TWDB, which approval shall be subject to the approvals of the aforementioned three City Councils; 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, THEREFOR,BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE BRUSHY CREEK REGIONAL UTILITY AUTHORITY,INC.: SECTION 1. RECITALS. The recitals set forth in the preamble hereof are incorporated herein and shall have the same force and effect as if set forth in this Section. SECTION 2. FINANCING AGREEMENT. The amended and restated financing agreement is hereby approved and the President and Secretary of the Board are hereby authorized and directed to execute the amended and restated financing agreement in substantially the form and substance attached hereto as Exhibit "C" with such changes as may be approved by general counsel and bond counsel to the BCRUA. The General Manager is hereby delegated the authority to confer with the City Manager of each Member City regarding approval of TWDB financing rates in accordance with the amended and restated financing agreement. SECTION 3. OPEN MEETINGS. It is hereby officially found and determined that the meeting at which this ordinance is passed was open to the public as required and that public notice of the time, place, and purpose of said meeting was given as required by the Open Meetings Act, Chapt. 551, Tex. Gov't. Code. SECTION 4. IMMEDIATE EFFECT. This Resolution shall take effect immediately from and after its adoption by the City Councils of the City of Leander, the City of Round Rock and the City of Cedar Park, in accordance with the law. The General Manager is authorized to take such actions as necessary to implement this Resolution. PASSED AND APPROVED THIS Z-- resident Brushy Creek Regional Utility Authority, Inc. ATTEST: S c etary shy Creek Regional Utility Authority, Inc. [SEAL] 2 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 61 st 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 parry or parties set forth below: Texas Water Development Board Brushy Creek Regional Utility Authority, Inc. Piper Montemayor Chris Lippe Team Lead,Debt and Portfolio Management 221 E. Main Street P.O. Box 13231 Round Rock,Texas 78664 Austin,Texas 78711-3231 Telephone (512) 218-5401 Telephone(512) 475-2117 Facsimile (512)218-7097 Facsimile(512)475-2053 Section 7. Severabilitv. 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 parry 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 CRF,�K REGIONAL UTILITY AUTHORITY,INC. Na e: o t tle: President Date: STATE OF TEXAS COUNTY OF J k 1 /4p,Satl This Inst ent was acknowledged before me on the `( day ofn�-�'�/ ,2 by � � �� Cr in his/her capacity as 1�( ct i- ,on beha of olf f the Brushy Creek Regional Utility Authority,Inc. (SEAL) , -, MONIQUE G.ADAMS��� �a Z *' My cOMMiSSI%l EXPIHfs NotaryPu i ,Sta of Texas September 18,2011 TEXAS WATER DEVELOPMENT BOARD By: NameKevin Ward Title: Executive Administrator Date: QZ STATE OF TEXAS COUNTY OF TRAVIS This instrument was acknowledged before me on the 11 day of Fe rvar ,20dq,by . Ki .y h'"*Jin his capacity as Executive Administrator of the Texas Water Development Board,an agency of the State of Texas, on behalf of said agency. `(SEIAWua,,�, . J�t.. \5 pAVIO .. !��''� NotaryPublic, State of Texas C) 6 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 Phase 1, Regional Water Supply Project Project Number 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