BCRUA_R-17-10-18-5B RESOLUTION NO. R-17-10-18-513
A RESOLUTION BY THE BOARD OF DIRECTORS OF THE BRUSHY CREEK
REGIONAL UTILITY AUTHORITY, INC. AUTHORIZING THE ISSUANCE OF
"BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC. CITY OF LEANDER,
TEXAS CONTRACT REVENUE BONDS, (BRUSHY CREEK REGIONAL WATER
TREATMENT AND DISTRIBUTION PROJECT)"; ESTABLISHING THE
PROCEDURES FOR SELLING AND DELIVERING THE BONDS AND RESOLVING
OTHER MATTERS INCIDENT AND RELATING TO THE ISSUANCE, PAYMENT,
SECURITY,SALE,AND DELIVERY OF SUCH BONDS
ADOPTED OCTOBER 18, 2017
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RESOLUTION NO. R-17- I V-11 66
A RESOLUTION BY THE BOARD OF DIRECTORS OF THE BRUSHY CREEK
REGIONAL UTILITY AUTHORITY, INC. AUTHORIZING THE ISSUANCE OF
"BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC. CITY OF LEANDER,
TEXAS CONTRACT REVENUE BONDS, (BRUSHY CREEK REGIONAL WATER
TREATMENT AND DISTRIBUTION PROJECT)"; ESTABLISHING THE
PROCEDURES FOR SELLING AND DELIVERING THE BONDS AND RESOLVING
OTHER MATTERS INCIDENT AND RELATING TO THE ISSUANCE, PAYMENT,
SECURITY, SALE,AND DELIVERY OF SUCH BONDS
TABLE OF CONTENTS
Page
PREAMBLE....................................................................................................................................1
Section 1. DEFINITIONS.........................................................................................................2
Section 2. AMOUNT, PURPOSE AND DESIGNATION OF THE BONDS ........................5
(a) Amount and Designation........................................................................2
(b) Purpose...................................................................................................2
Section 3. DATE, DENOMINATIONS,NUMBERS, MATURITIES, AND TERMS
OFBONDS..............................................................................................................3
(a)Terms of the Bonds ................................................................................3
(b) Award Certificate...................................................................................3
(c) Sale of the Bonds....................................................................................4
(d) In General...............................................................................................4
Section4. INTEREST...............................................................................................................4
Section 5. REGISTRATION, TRANSFER, AND EXCHANGE; AUTHENTICATION
AND BOOK-ENTRY-ONLY SYSTEM.................................................................4
(a) Paying Agent/Registrar..........................................................................4
(b) Registration Books.................................................................................4
(c) Ownership of Bonds...............................................................................5
(d) Payment of Bonds and Interest...............................................................5
(e) Authentication ........................................................................................5
(f) Transfer, Exchange or Replacement.......................................................5
(g) Substitute Paying Agent.-Registrar.........................................................6
(h) Book-Entry-Only System.......................................................................7
(i) Successor Securities Depository; Transfers Outside
Book-Entry-Only System ....................................................................8
�) Payments to Cede & Co..........................................................................8
(k)Notice of Redemption ............................................................................8
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(1) Conditional Notice of Redemption .........................................................9
Section 6. FORM OF BOND....................................................................................................9
Section 7. PLEDGE OF BOND PAYMENTS .........................................................................9
(a) Pledge.....................................................................................................9
(b) Perfection of Pledge.............................................................................10
Section 8. RATES AND CHARGES......................................................................................10
Section 9. DISTRIBUTION OF BOND PAYMENTS...........................................................10
Section 10. DEBT SERVICE FUND; CONSTRUCTION FUND; ESCROW FUND............10
(a) Debt Service Fund ..........................................................................................10
(b) Construction Fund............................................................................................I l
(c) Escrow Fund.....................................................................................................
Section 11. DEFICIENCIES - EXCESS BOND PAYMENTS................................................12
(a) Deficiencies.................................................................................................... 12
(b) Excess Bond Payments.....................................................................................12
Section 12. PAYMENT OF BONDS .......................................................................................12
Section 13. INVESTMENTS....................................................................................................12
Section 14. ISSUANCF, OF ADDITIONAL BONDS .............................................................12
Section 15. SPECIAL PROJECT BONDS...............................................................................13
Section 16. MAINTENANCE OF BCRUA PROJECT- INSURANCE.................................13
Section 17. RECORDS AND ACCOUNTS - ANNUAL AUDIT...........................................14
Section 18. SALE OR ENCUMBRANCE OF BCRUA PROJECT.........................................14
Section 19. COMPETITION ....................................................................................................14
Section 20. SPECIAL COVENANTS......................................................................................15
(a)Title................................................................................................................... 15
(b) Liens................................................................................................................. 15
(c) Performance...................................................................................................... 15
(d) Legal Authority................................................................................................ 15
(e) Budget............................................................................................................... 15
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(f) permits..............................................................................................................15
Section 21. LIMITED OBLIGATIONS OF THE BCRUA......................................................16
Section 22. DEFAULT AND REMEDIES...............................................................................16
(a) Events of Default..............................................................................................16
(b) Remedies for Event of Default.........................................................................16
(c) Remedies Not Exclusive...................................................................................17
Section 23. AMENDMENT OF RESOLUTION .....................................................................17
(a) Amendments Without Consent.........................................................................17
(b) Amendments With Consent .............................................................................18
(c)Notice ...............................................................................................................18
(d) Receipt of Consents..........................................................................................19
(e) Effect of Amendments......................................................................................19
(f) Consent Irrevocable..........................................................................................19
(g) Ownership ........................................................................................................19
(h) Insurer Consent ................................................................................................19
Section 24. COVENANTS REGARDING TAX-EXEMPTION OF INTEREST
ONTHE BONDS ..................................................................................................20
(a) Covenants.........................................................................................................20
(b) Rebate Fund......................................................................................................21
(c) Proceeds............................................................................................................21
(d) Allocation Of and Limitation On, Expenditures for the Project......................22
(e) Disposition of Project.......................................................................................22
Section 25. RESOLUTION TO CONSTITUTE A CONTRACT; EQUAL SECURITY........22
Section 26. SEVERABILITY OF INVALID PROVISIONS...................................................23
Section 27. PAYMENT AND PERFORMANCE ON BUSINESS DAYS .............................23
Section 28. LIMITATION OF BENEFITS WITH RESPECT TO THE RESOLUTION .......23
Section 29. CUSTODY, APPROVAL, BOND COUNSEL'S OPINION, CUSIP
NUMBERS, PREAMBLE AND INSURANCE...................................................23
Section 30. COMPLIANCE WITH RULE 15c2-12.................................................................24
(a) Annual Reports.................................................................................................24
(b) Event Notices ...................................................................................................24
(c) Limitations, Disclaimers,and Amendments ....................................................25
(d) Format, Identifying Information, and Incorporation by Reference..................26
Section 31. APPLICATION OF BOND PROCEEDS .............................................................27
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Section 32. DEFEASANCE PROVISIONS.............................................................................27
Section 33. COMPLIANCE WITH THE TEXAS WATER DEVELOPMENT BOARD'S
RULES AND REGULATIONS............................................................................28
Section 34. FURTHER PROCEDURES ..................................................................................29
Section 35. DTC LETTER OF REPRESENTATION..............................................................30
Section 36. BOND INSURANCE............................................................................................30
Section 37. REPEAL OF CONFLICTING RESOLUTIONS ..................................................30
Section 38. PUBLIC NOTICE..................................................................................................30
Section 39. NO PERSONAL LIABILITY ...............................................................................30
Section 40. CREDIT AGREEMENTS.....................................................................................31
EXHIBIT A DEFINITIONS....................................................................................................A-1
EXHIBIT B FORM OF AWARD CERTIFICATE.................................................................B-1
EXHIBIT C FORM OF BOND................................................................................................C-I
EXHIBIT D PAYING AGENT/REGISTRAR AGREEMENT.............................................. D-1
EXHIBIT E ESCROW AGREEMENT...................................................................................E-1
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RESOLUTION NO. R-17-
A RESOLUTION BY THE BOARD OF DIRECTORS OF THE BRUSHY CREEK
REGIONAL UTILITY AUTHORITY, INC. AUTHORIZING THE ISSUANCE OF
"BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC. CITY OF LEANDER,
TEXAS CONTRACT REVENUE BONDS, (BRUSHY CREEK REGIONAL WATER
TREATMENT AND DISTRIBUTION PROJECT)"; ESTABLISHING THE
PROCEDURES FOR SELLING AND DELIVERING THE BONDS AND RESOLVING
OTHER MATTERS INCIDENT AND RELATING TO THE ISSUANCE,PAYMENT,
SECURITY, SALE,AND DELIVERY OF SUCH BONDS
WHEREAS, the Brushy Creek Regional Utility Authority, Inc. (the "BCRUA") is a non-
profit corporation of the State of Texas(the "State"), created by the Cities of Cedar Park, Leander
and Round Rock, Texas (collectively, the "Cities" or singularly, a "City") and existing under the
laws of the State, including Subchapter D of Chapter 431,as amended,Texas Transportation Code
(the "Authority Act"); and
WHEREAS, pursuant to the Authority Act, the BCRUA, is empowered to acquire and
construct water facilities including water conservation, storage, transportation, treatment and
distribution facilities and to deliver this water to the Cities; and
WHEREAS, the Authority Act also authorizes the BCRUA acting through its Board of
Directors(the"Board")to issue revenue bonds to finance such water projects, payable solely from
the revenues derived from payments to be made to the BCRUA by each respective City for which
a series of bonds are issued for the purpose of defraying such City's share of the cost of financing,
acquiring, and constructing the BCRUA Project (as hereinafter defined); and
WHEREAS, the BCRUA expects to issue separate series of such revenue bonds for the
City of Round Rock,Texas ("Round Rock"),the City of Leander, Texas ("Leander") and the City
of Cedar Park, Texas ("Cedar Park")to finance their share of the BCRUA Project, with each such
series payable from and secured solely by payments made by each respective City under the
Contract (as hereinafter defined); and
WHEREAS, pursuant to the Authority Act, the BCRUA and the Cities have entered into
a"Master Contract for the Financing, Construction and Operation of the BCRUA Regional Water
Treatment and Distribution Project," dated as of September 2, 2008 as amended by a "First
Amendment to the Master Contract for the Financing, Construction and Operation of the BCRUA
Regional Water Treatment and Distribution Project" dated as of January 22, 2009 and by a
"Second Amendment to the Master Contract for the Financing, Construction and Operation of the
BCRUA Regional Water Treatment and Distribution Project" dated as of October 20, 2010
(collectively, the "Contract") pursuant to which the BCRUA has agreed to design, finance,
construct, own, acquire, maintain and operate the BCRUA Project in a manner that will allow the
BCRUA to deliver potable water to the Cities on a regional basis and under which each of the
Cities agree to pay their share of the BCRUA Project and to make payments to or on behalf of the
BCRUA in amounts sufficient to meet all of the BCRUA's obligations under the Contract
including relating to a City's respective series of bonds issued to finance and refinance a City's
share of the BCRUA Project and to own, operate and maintain the BCRUA Project; and
WHEREAS, Leander has requested that the BCRUA issue a separate series of revenue
bonds in an aggregate principal amount not to exceed $8,130,000 pursuant to the Contract to
finance Leander's share of the BCRUA Project (the "Bonds"); and
WHEREAS, Round Rock and Cedar Park have also requested the BCRUA issue separate
series of contract revenue bonds pursuant to the Contract to finance their respective share of the
BCRUA Project Costs and the three separate series of contract revenue bonds for the Cities are
expected to be issued and delivered simultaneously; and
WHEREAS, the Cities and the BCRUA have approved the Contract; and
WHEREAS, this Resolution constitutes a Bond Resolution as that term is defined in the
Contract; and
WHEREAS, the principal of the Bonds and the interest thereon are and shall be solely
payable from and secured by a lien on and pledge of the portion of the Annual Payments designated
as "Bond Payments" to be made by Leander pursuant to the Contract in amounts sufficient to pay
and redeem, and provide for the payment of the principal of, premium, if any, and interest on the
Bonds, when due, and the fees and expenses of the Paying Agent/Registrar for the Bonds, all as
required by this Resolution.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF
THE BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC. THAT:
Section 1. DEFINITIONS. In addition to the definitions set forth in the preamble of
this Resolution, the terms used in this Resolution (except as may be otherwise indicated in the
FORM OF BOND)and not otherwise defined shall have the meanings given in Exhibit"A"to this
Resolution attached hereto and made a part hereof.
Section 2. AMOUNT, PURPOSE AND DESIGNATION OF THE BONDS. (a)
Amount and Designation. The BCRUA's bonds issued pursuant to this Resolution shall each be
entitled "BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC. CITY OF LEANDER,
TEXAS CONTRACT REVENUE BONDS (BRUSHY CREEK REGIONAL WATER
TREATMENT AND DISTRIBUTION PROJECT), SERIES 2017" and are hereby authorized to
be issued and delivered in an aggregate maximum principal amount not to exceed $8,130,000.
The title of the Bonds shall be designated by the year in which such Bonds are awarded pursuant
to Section 3 below. The authority of the BCRUA Representative to execute and deliver an Award
Certificate for the Bonds shall expire at 5:00 p.m., C.D.T., on December 31, 2017. Bonds priced
on or before December 31, 2017 may close after such date.
(b)Purpose. The Bonds are to be issued for the following purposes to pay: (i)
LEANDER'S SHARE OF THE COSTS OF CONSTRUCTING, ACQUIRING, IMPROVING
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ANDiOR EXPANDING THE BCRUA PROJECT INCLUDING BUT NOT LIMITED TO
EXPANDING THE FLOATING RAW WATER INTAKE AND THE WATER TREATMENT
PLANT, RIGHTS-OF-WAY AND OTHER INTERESTS IN LAND OR OTHER FACILITIES
NECESSARY FOR THE WITHDRAWAL, DIVERSION DELIVERY, TRANSMISSION AND
TREATMENT OF RAW WATER ALL AS DESCRIBED IN THE PRELIMINARY DESIGN
REPORT AND (ii)THE COSTS OF ISSUANCE OF THE BONDS.
Section 3. DATE, DENOMINATIONS, NUMBERS, MATURITIES AND
TERMS OF BONDS. (a) Terms of the Bonds. The Bonds shall initially be issued, sold, and
delivered hereunder as fully registered bonds, without interest coupons, numbered consecutively
from R-1 upward (except the initial Bond delivered to the Attorney General of the State which
shall be numbered T-1), payable to the respective initial Registered Owners thereof in an
Authorized Denomination, maturing not later than August 1, 2037, serially or otherwise on the
dates, in the years and in the principal amounts, respectively, dated, all as set forth in the Award
Certificate executed by the BCRUA Representative in substantially the form attached hereto as
Exhibit "B".
(b)Award Certificate. As authorized by the Authority Act,the BCRUA Representative is
hereby authorized,appointed,and designated to act on behalf of the Board in selling and delivering
the Bonds and carrying out the other procedures specified in this Resolution, including determining
and fixing the date the Bonds, any additional or different designation or title by which the Bonds
shall be known,the price at which the Bonds will be sold,the years in which the Bonds will mature,
the principal amount to mature in each of such years,the aggregate principal amount of the Bonds,
the rate or rates of interest to be borne by each maturity, the interest payment periods, the dates,
price, and terms upon and at which the Bonds shall be subject to redemption prior to maturity at
the option of the Board,as well as any mandatory sinking fund redemption provisions for the Bonds
and all other matters relating to the issuance, sale, and delivery of the Bonds, all of which shall be
specified in a certificate of the BCRUA Representative(the"Award Certificate")the form of which
is attached hereto as Exhibit "B'; provided that (i) the price to be paid for the Bonds shall not be
less than 98% of the aggregate original principal amount thereof plus accrued interest, if any,
thereon from its date to its delivery and (ii) the Bonds shall not bear interest at a net effective
interest rate in excess of the maximum rate allowed bylaw. In establishing the aggregate principal
amount of the Bonds, the BCRUA Representative shall establish an amount not to exceed the
amount authorized in Section 2,which shall be sufficient to provide for the purposes for which the
Bonds are authorized and to pay the costs of issuing the Bonds.
It is further provided, however, that, notwithstanding the foregoing provisions, the Bonds
shall not be delivered unless prior to delivery of the Bonds the Award Certificate has been executed
and delivered as required by this Resolution. No such Award Certificate shall be executed and
delivered under this Resolution, unless and until the City Council of the City of Leander approves
this Resolution.
In satisfaction of Section 1201.022(a)(3), Texas Government Code, the Board hereby
determines that the delegation of the authority to the BCRUA Representative to approve the final
terms and conditions of the Bonds as set forth in this Resolution is, and the decisions made by the
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BCRUA Representative pursuant to such delegated authority and incorporated in the Award
Certificate will be, in the BCRUA's best interest and shall have the same force and effect as if such
determination were made by the Board, and the BCRUA Representative is hereby authorized to
make and include in the Award Certificate an appropriate finding to that effect. The Award
Certificate is hereby incorporated by reference into and made a part of this Resolution.
(c) Sale of the Bonds. To achieve advantageous borrowing costs for the BCRUA, the
Bonds shall be sold to the Texas Water Development Board (the "Purchaser") at the price as set
forth in the Award Certificate. The Private Placement Memorandum prepared in connection with
the sale of the Bonds to the Purchaser in substantially the form attached to this Resolution is
approved.
(d)In General. The Bonds(i)may and shall be redeemed prior to the respective scheduled
maturity dates, (ii) may be assigned and transferred, (iii) may be exchanged for other Bonds, (iv)
shall have the characteristics, (v) shall be signed and sealed, and the principal of and interest on
the Bonds shall be payable, all as provided, and in the manner required or indicated, in the FORM
OF BOND set forth in Exhibit "C" to this Resolution and as determined by the BCRUA
Representative as provided herein, with such changes and additions as are required to be consistent
with the terms and provisions shown in the Award Certificate.
Section 4. INTEREST. The Bonds shall bear interest, calculated on the basis of a
360-day year composed of twelve 30-day months, from their date of delivery as set forth in the
Award Certificate, until maturity or redemption, at the rate or rates set forth in the Award
Certificate. Interest shall be payable to the Registered Owner of any such Bond in the manner
provided and on the dates stated in the FORM OF BOND set forth in Exhibit"C"to this Resolution
and the Award Certificate.
Section S. REGISTRATION, TRANSFER, AND EXCHANGE;
AUTHENTICATION; BOOK-ENTRY-ONLY SYSTEM. (a) Paying Agent/Registrar. The
BCRUA Representative in the Award Certificate shall select an eligible institution to serve as
paying agent/registrar for the Bonds (the "Paying Agent/Registrar"). The BCRUA Representative
is authorized to enter into and carry out a Paying Agent/Registrar Agreement with the Paying
Agent/Registrar with respect to the Bonds in substantially the form and substance presented to the
Board set forth in Exhibit"D"in connection with the approval of this Resolution with such changes
as are acceptable to the BCRUA Representative.
(b) Registration Books. The Board shall keep or cause to be kept at the designated
corporate trust office of the Paying Agent.-Registrar (the "Designated Trust Office") the
Registration Books and the Board hereby appoints the Paying Agent/Registrar as its registrar and
transfer agent to keep such books or records and make such registrations of transfers, exchanges,
and replacements under such reasonable regulations as the Board and Paying Agent/Registrar may
prescribe; and the Paying Agent.,-'Registrar shall make such registrations,transfers, exchanges, and
replacements as herein provided. The Paying Agent/Registrar shall obtain and record in the
Registration Books the address of the Registered Owner of each Bond to which payments with
respect to the Bonds shall be mailed, as herein provided; but it shall be the duty of each Registered
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Owner to notify the Paying Agent/Registrar in writing of the address to which payments shall be
mailed, and such interest payments shall not be mailed unless such notice has been given. The
Board shall have the right to inspect the Registration Books at the Designated Trust Office of the
Paying Agent/Registrar during regular business hours, but otherwise the Paying Agent/Registrar
shall keep the Registration Books confidential and, unless otherwise required by law, shall not
permit their inspection by any other entity. A copy of the Registration Books shall be maintained
in the State.
(c)Ownership of Bonds. The entity or person in whose name any Bond shall be registered
in the Registration Books at any time shall be deemed and treated as the absolute owner thereof
for all purposes of this Resolution, whether or not such Bond shall be overdue, and, to the extent
permitted by law, the Board and the Paying Agent/Registrar shall not be affected by any notice to
the contrary; and payment of, or on account of, the principal of, premium, if any, and interest on
any such Bond shall be made only to such Registered Owner. All such payments shall be valid and
effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so
paid.
(d) Payment of Bonds and Interest. The Paying Agent/Registrar shall further act as the
paying agent for paying the principal of,premium, if any,and interest on the Bonds,all as provided
in this Resolution.The Paying Agent/Registrar shall keep proper records of all payments made by
the Board and the Paying Agent/Registrar with respect to the Bonds.
(e)Authentication. The Bonds initially issued and delivered pursuant to this Resolution
shall be authenticated by the Paying Agent/Registrar by execution of the Paying Agent/Registrar's
Authentication Certificate unless they have been approved by the Attorney General of the State
and registered by the Comptroller of Public Accounts of the State, and on each substitute Bond
issued in exchange for any Bond or Bonds issued under this Resolution the Paying Agent/Registrar
shall execute the PAYING AGENTIREGISTRAR'S AUTHENTICATION CERTIFICATE (the
"Authentication Certificate"). The Authentication Certificate shall be in the form set forth in the
FORM OF BOND in Exhibit"C" attached hereto.
(f) Transfer, Exchange, or Replacement. Each Bond issued and delivered pursuant to
this Resolution, to the extent of the unpaid or unredeemed principal amount thereof, may, upon
surrender of such Bond at the Designated Trust Office of the Paying Agent/Registrar,together with
a written request therefor duly executed by the Registered Owner or the assignee or assignees
thereof, or its or their duly authorized attorneys or representatives, with guarantee of signatures
satisfactory to the Paying Agent,Registrar, may, at the option of the Registered Owner or such
assignee or assignees, as appropriate, be exchanged for fully registered Bonds, without interest
coupons, in the appropriate form prescribed in the FORM OF BOND set forth in Exhibit "C" to
this Resolution, in any Authorized Denomination(subject to the requirement hereinafter stated that
each substitute Bond shall be of the same Series and have a single stated maturity date), as
requested in writing by such Registered Owner or such assignee or assignees, in an aggregate
principal amount equal to the unpaid or unredeemed principal amount of any Bond or Bonds so
surrendered, and payable to the appropriate Registered Owner, assignee, or assignees, as the case
may be. If a portion of any Bond shall be redeemed prior to its scheduled maturity as provided
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herein, a substitute Bond or Bonds having the same series designation and maturity date, bearing
interest at the same rate, and payable in the same manner, in Authorized Denominations at the
request of the Registered Owner, and in aggregate principal amount equal to the unredeemed
portion thereof, will be issued to the Registered Owner upon surrender thereof for cancellation. If
any Bond or portion thereof is assigned and transferred, each Bond issued in exchange therefor
shall have the same series designation and maturity date and bear interest at the same rate and
payable in the same manner as the Bond for which it is being exchanged. Each substitute Bond
shall bear a letter and/or number to distinguish it from each other Bond. The Paying
Agent.,-'Registrar shall exchange or replace Bonds as provided herein, and each fully registered
Bond delivered in exchange for or replacement of any Bond or portion thereof as permitted or
required by any provision of this Resolution shall constitute one of the Bonds for all purposes of
this Resolution, and may again be exchanged or replaced. On each substitute Bond issued in
exchange for or replacement of any Bond or Bonds issued under this Resolution there shall be
printed an Authentication Certificate, in the form set forth in Exhibit "C" to this Resolution. An
authorized representative of the Paying Agent/Registrar shall, before the delivery of any such
Bond, date and manually sign the Authentication Certificate, and, except as provided in (e)above,
no such Bond shall be deemed to be issued or outstanding unless the Authentication Certificate is
so executed. The Paying Agent/Registrar promptly shall cancel all Bonds surrendered for transfer,
exchange, or replacement. No additional orders or resolutions need be passed or adopted by the
Board or any other body or person so as to accomplish the foregoing transfer, exchange, or
replacement of any Bond or portion thereof, and the Paying Agent/Registrar shall provide for the
printing, execution, and delivery of the substitute Bonds in the manner prescribed herein,and said
Bonds shall be in typed or printed form as determined by the BCRUA Representative. Pursuant to
Subtitle D, Texas Government Code and particularly Section 1201.063, thereof, the duty of
transfer, exchange, or replacement of Bonds as aforesaid is hereby imposed upon the Paying
Agent.Registrar, and, upon the execution of the Authentication Certificate, the exchanged or
replaced Bond shall be valid, incontestable,and enforceable in the same manner and with the same
effect as the Bonds which were originally issued pursuant to this Resolution. The Board shall pay
the Paying Agent/Registrar's standard or customary fees and charges, if any, for transferring, and
exchanging any Bond or any portion thereof,but the one requesting any such transfer and exchange
shall pay any taxes or governmental charges required to be paid with respect thereto as a condition
precedent to the exercise of such privilege. The Paying Agent.`Registrar shall not be required to
make any such transfer, exchange, or replacement of Bonds or any portion thereof(i) during the
period commencing with the close of business on any Record Date and ending with the opening of
business on the next following interest payment date, or (ii) with respect to any Bond or portion
thereof called for redemption prior to maturity, within 45 days prior to its redemption date. To the
extent possible, any new Bond issued in an exchange, replacement, or transfer of a Bond will be
delivered to the Registered Owner or assignee of the Registered Owner not more than three
business days after the receipt of the Bonds to be canceled and the written request as described
above.
(g)Substitute Paying Agent/Registrar. The Board covenants with the Registered Owners
of the Bonds that at all times while the Bonds are outstanding the Board will provide a competent
and legally qualified bank, trust company, financial institution, or other agency to act as and
perform the services of Paying Agent/Registrar for the Bonds under this Resolution, and that the
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Paying Agent/Registrar will be one entity. The Board reserves the right to, and may, at its option,
change the Paying Agent/Registrar upon not less than ninety(90)days written notice to the Paying
Agent/Registrar, to be effective not later than sixty (60) days prior to the next principal or interest
payment date after such notice. In the event that the entity at any time acting as Paying
Agent.Registrar (or its successor by merger, acquisition, or other method) should resign or
otherwise cease to act as such, the Board covenants that promptly it will appoint a competent and
legally qualified bank, trust company, financial institution, or other agency to act as Paying
Agent.Registrar under this Resolution. Upon any change in the Paying Agent/Registrar, the
previous Paying AgenteRegistrar promptly shall transfer and deliver the Registration Books (or a
copy thereof), along with all other pertinent books and records relating to the Bonds, to the new
Paying Agent/Registrar designated and appointed by the Board. Upon any change in the Paying
Agent/Registrar, the Board promptly will cause a written notice thereof to be sent by the new
Paying Agent/Registrar to each Registered Owner of the Bonds, by United States mail, first-class
postage prepaid, which notice also shall give the address of the new Paying Agent/Registrar. By
accepting the position and performing as such, each Paying Agent/Registrar shall be deemed to
have agreed to the provisions of this Resolution, and a certified copy of this Resolution shall be
delivered to each Paying Agent/Registrar.
(h)Book-Entry-Only System. The Bonds issued in exchange for the Bonds initially issued
and delivered to the Purchaser shall be issued in the form of a separate single fully registered Bond
for each of the maturities thereof registered in the name of Cede & Co., as nominee of DTC, and
except as provided in subsection (i) hereof, all of the Outstanding Bonds shall be registered in the
name of Cede & Co., as nominee of DTC. With respect to Bonds registered in the name of Cede
& Co., as nominee of DTC, the Board and the Paying Agent/Registrar shall have no responsibility
or obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant
holds an interest on the Bonds. Without limiting the immediately preceding sentence, the Board
and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the
accuracy of the records of DTC,Cede&Co.or any DTC Participant with respect to any ownership
interest in the Bonds, (ii) the delivery to any DTC Participant or any other person, other than a
Registered Owner, as shown on the Registration Books, of any notice with respect to the Bonds,
including any notice of redemption,or(iii)the payment to any DTC Participant or any other person,
other than a Registered Owner, as shown in the Registration Books of any amount with respect to
principal of,premium, if any,or interest on the Bonds.Notwithstanding any other provision of this
Resolution to the contrary but to the extent permitted by law, the Board and the Paying
Agent"Registrar shall be entitled to treat and consider the person in whose name each Bond is
registered in the Registration Books as the absolute owner of such Bond for the purpose of payment
of principal, premium, if any, and interest, with respect to such Bond, for the purpose of giving
notices of redemption and other matters with respect to such Bond, for the purpose of registering
transfers with respect to such Bond, and for all other purposes whatsoever. The Paying
Agent:Registrar shall pay all principal of, premium, if any, and interest on the Bonds only to or
upon the order of the respective Registered Owners, as shown in the Registration Books as
provided in this Resolution, or their respective attorneys duly authorized in writing, and all such
payments shall be valid and effective to fully satisfy and discharge the Board's obligations with
respect to payment of principal of, premium, if any, and interest on the Bonds to the extent of the
sum or sums so paid.No person other than a Registered Owner,as shown in the Registration Books,
01035832;3
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shall receive a Bond certificate evidencing the obligation of the Board to make payments of
principal, premium, if any, and interest pursuant to this Resolution. Upon delivery by DTC to the
Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new
nominee in place of Cede & Co., and subject to the provisions in this Resolution with respect to
interest checks being mailed to the Registered Owner at the close of business on the Record Date,
the word "Cede& Co." in this Resolution shall refer to such new nominee of DTC.
(i)Successor Securities Depository; Transfers Outside Book-Entry-Only System. In the
event that the Board or the Paying Agent/Registrar determines that DTC is incapable of discharging
its responsibilities described herein and in the representation letter of the Board to DTC (as
described in Section 35 of this Resolution)or DTC determines to discontinue providing its services
with respect to the Bonds, the Board shall (i) appoint a successor securities depository, qualified
to act as such under Section 17A of the Securities and Exchange Act of 1934, as amended, notify
DTC and DTC Participants of the appointment of such successor securities depository and transfer
one or more separate Bonds to such successor securities depository or (ii) notify DTC and DTC
Participants of the availability through DTC of Bonds and transfer one or more separate Bonds to
DTC Participants having Bonds credited to their DTC accounts. In such event, the Bonds shall no
longer be restricted to being registered in the Registration Books in the name of Cede & Co., as
nominee of DTC, but may be registered in the name of the successor securities depository, or its
nominee,or in whatever name or names Registered Owners transferring or exchanging Bonds shall
designate, in accordance with the provisions of this Resolution.
O)Payments to Cede& Co. Notwithstanding any other provision of this Resolution to the
contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all
payments with respect to principal of, premium, if any, and interest on such Bond and all notices
with respect to such Bond shall be made and given, respectively, in the manner provided in the
representation letter of the BCRUA to DTC.
(k)Notice of Redemption. In addition to the method of providing a notice of redemption
set forth in the FORM OF BOND, the Paying Agent/Registrar shall give notice of redemption of
Bonds by mail, first-class postage prepaid at least thirty (30) days prior to a redemption date to
each registered securities depository and to any national information service that disseminates
redemption notices. In addition, in the event of a redemption caused by an advance refunding of
the Bonds, the Paying Agent/Registrar shall send a second notice of redemption to the persons
specified in the immediately preceding sentence at least thirty (30) days but not more than ninety
(90) days prior to the actual redemption date. Any notice sent to the registered securities
depositories or such national information services shall be sent so that they are received at least
two (2) days prior to the general mailing or publication date of such notice. The Paying
AgenvRegistrar shall also send a notice of prepayment or redemption to the Registered Owner of
any Bond who has not sent the Bonds in for redemption sixty (60) days after the redemption date.
Each notice of redemption, whether required in the FORM OF BOND or in this Section, shall
contain a description of the Bonds to be redeemed including the complete name of the Bonds, the
Series,the date of issue,the interest rate or rates,the maturity date, the CUSIP number,a reference
to the certificate numbers and the amounts called of each certificate, the publication and mailing
date for the notice, the date of redemption, the redemption price, the name of the Paying
01035832,3
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Agent/Registrar and the address at which the Bonds may be redeemed, including a contact person
and telephone number. All redemption payments made by the Paying Agent/Registrar to the
registered owners of the Bonds shall include a CUSIP number relating to each amount paid to such
Registered Owner.
(I) Conditional Notice of Redemption. With respect to any optional redemption of the
Bonds, unless certain prerequisites to such redemption required by the Resolution have been met
and moneys sufficient to pay the principal of and premium, if any, and interest on the Bonds to be
redeemed shall have been received by the Paying Agent/Registrar prior to the giving of such notice
of redemption, such notice shall state that said redemption may, at the option of the BCRUA, be
conditional upon the satisfaction of such prerequisites and receipt of such moneys by the Paying
Agent/Registrar on or prior to the date fixed for such redemption,or upon any prerequisite set forth
in such notice of redemption. If a conditional notice of redemption is given and such prerequisites
to the redemption and sufficient moneys are not received, such notice shall be of no force and
effect,the BCRUA shall not redeem such Bonds and the Paying Agent/Registrar shall give notice,
in the manner in which the notice of redemption was given, to the effect that the Bonds have not
been redeemed.
Section 6. FORM OF BOND. The form of the Bond, including the form of the
Authentication Certificate, the form of Assignment and the form of Registration Certificate of the
Comptroller of Public Accounts of the State,with respect to the Bonds initially issued and delivered
pursuant to this Resolution, shall be, respectively, substantially as set forth in Exhibit "C", with
such appropriate variations,omissions,or insertions as are permitted or required by this Resolution
and any Award Certificate including specifically information relating to payment dates, the Bond
date and redemption provisions.
Section 7. PLEDGE OF BOND PAYMENTS. (a) Pledge. The BCRUA hereby
covenants and agrees that the Bond Payments are hereby irrevocably pledged to the payment and
security of the Bonds Similarly Secured including the establishment and maintenance of the special
funds or accounts created and established on the books and records of the BCRUA for the payment
and security thereof, all as hereinafter provided; and it is hereby resolved that the Bonds Similarly
Secured, and the interest thereon, shall constitute a lien on and pledge of the Bond Payments and
be valid and binding without any physical delivery thereof or further act by the BCRUA, and the
lien created hereby on the Bond Payments for the payment and security of the Bonds Similarly
Secured shall be prior in right and claim as to any other indebtedness, liability, or obligation of the
BCRUA or the BCRUA Project payable pursuant to the terms of the Contract. The BCRUA shal
deposit the Bond Payments, as collected and received, into a separate fund and account on the
books and records of the BCRUA known as the "Leander Debt Service Fund," which has
previously been created and is hereby confirmed, to be utilized pursuant to the Contract and
Sections 9 and 12 hereof to pay the Bonds; provided, however, that the Board of the BCRUA may
utilize any revenues, including those generated by the Contract, in excess of the Debt Service
Requirements on the Bonds Similarly Secured for any lawful purpose in accordance with this
Resolution and the Contract.
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(b)Perfection of Pledge. Chapter 1208, as amended,Texas Government Code, applies to
the issuance of the Bonds Similarly Secured and the lien on and pledge of Bond Payments granted
by the BCRUA under subsection (a) of this Section, and such pledge is therefore valid, effective,
and perfected. If State law is amended at any time while the Bonds Similarly Secured are
outstanding and unpaid such that the pledge of the Bond Payments granted by the BCRUA is to be
subject to the filing requirements of Chapter 9, Texas Business & Commerce Code, then in order
to preserve to the Registered Owners of the Bonds Similarly Secured the perfection of the security
interest in this pledge, the Board agrees to take such measures as it determines are reasonable and
necessary under State law to comply with the applicable provisions of Chapter 9, as amended,
Texas Business&Commerce Code and enable a filing to perfect the security interest in this pledge
to occur.
Section 8. RATES AND CHARGES. For the benefit of the Registered Owners of
the Bonds Similarly Secured and in addition to all provisions and covenants in the laws of the State
and in this Resolution, the Contract between the BCRUA and Leander expressly stipulates and
agrees, while any of the Bonds Similarly Secured are Outstanding, Leander will fix and collect
such rates and charges for services to be supplied by the Leander System as will produce gross
revenues at all times during the term of the Contract in an amount equal to pay all of the expenses
of operation and maintenance of the Leander System including Annual Payments and Bond
Payments under the Contract and all other amounts required by the laws and the provisions of the
ordinances or resolutions authorizing the Leander Utility Bonds or other obligations now or
hereafter outstanding payable, in whole or in part, from the net revenues of the Leander System,
including the amounts required to pay all principal of and interest on such Leander Utility Bonds
and other obligations. The BCRt;A hereby expressly stipulates that it will maintain rates and
charges through the Bond Payments to meet the debt service requirements on the Bond Similarly
Secured and agrees that it will take all appropriate action to enforce such terms of the Contract
while any of the Bonds Similarly Secured are Outstanding.
The Registered Owners shall never have the right to demand payment for the Bonds out of
any funds raised or to be raised from taxation by Leander or the BCRUA.
Section 9. DISTRIBUTION OF BOND PAYMENTS. After the Bond Payments
have been received by the BCRIJA such payments shall be further deposited into the Debt Service
Fund as required by this Resolution.
Section 10. DEBT SERVICE FUND; CONSTRUCTION FUND; ESCROW
FUND. (a) Debt Service Fund. For purposes of providing funds to pay the principal of and
interest on the Bonds Similarly Secured as the same become due and payable, the BCRUA agrees
to maintain, at the Depository, a separate and special fund or account to be created and known as
the "Brushy Creek Regional Utility Authority, Inc. City of Leander, Texas Contract Revenue
Bonds (Brushy Creek Regional Water Treatment and Distribution Project), Debt Service Fund"
(the "Debt Service Fund"). The BCRUA covenants that there shall be deposited into the Debt
Service Fund prior to each principal and interest payment date solely from the available Bond
Payments made by Leander pursuant to Section 9 of this Resolution an amount equal to one
hundred per cent (100%) of the amount required to fully pay the interest on and the principal of
01035&32;3
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the Bonds Similarly Secured then falling due and payable, such deposits to pay maturing principal
and accrued interest on the Bonds Similarly Secured to be made in substantially equal monthly
installments on or before the first day of each month. If the Bond Payments in any month are
insufficient to make the required payments into the Debt Service Fund, then the amount of any
deficiency in such payment shall be added to the amount otherwise required to be paid into the
Debt Service Fund in the next month.
The required monthly deposits to the Debt Service Fund for the payment of principal of
and interest on the Bonds Similarly Secured shall continue to be made as hereinabove provided
until such time as (i) the total amount on deposit in the Debt Service Fund is equal to the amount
required to fully pay and discharge all Outstanding Bonds Similarly Secured (principal and
interest) or, (ii) the Bonds Similarly Secured are no longer Outstanding.
Any surplus proceeds from the sale of the Bonds, including investment income therefrom,
not expended for authorized purposes shall be deposited into the Debt Service Fund, and such
amounts(i.e.,accrued and investment interest)so deposited into the Debt Service Fund shall reduce
the sum otherwise required to be deposited in the Debt Service Fund from Bond Payments.
(b) Construction Fund. The BCRUA hereby creates and establishes and shall maintain
on the books and records of the BCRUA a separate fund or account to be entitled the "Brushy
Creek Regional Utility Authority, Inc. City of Leander, Texas Contract Revenue Bonds (Brushy
Creek Regional Water Treatment and Distribution Project), Construction Fund" for use by the
BCRC'A for payment of Leander's share of the BCRUA Project. The BCRUA shall deposit the
net proceeds from the sale of the Bonds released from escrow as provided in Section 10(c) below
into the Construction Fund as provided in this Resolution. Funds in the Construction Fund shall be
used for payment of Leander's share of BCRUA Project Costs. Upon payment of all such costs,
any moneys remaining on deposit in the Construction Fund shall be transferred to the Debt Service
Fund.
(c) Escrow Fund. The Escrow Agreement between the BCRUA and the escrow agent
named therein(the"Escrow Agent")substantially in the form and content presented at this meeting
and shown on Exhibit"E"attached hereto,specifying the duties and responsibilities of the BCRUA
and the Escrow Agent, is hereby approved and the BCRUA Representative is hereby authorized
and directed to execute the Escrow Agreement on behalf of the BCRUA. The Escrow Agent
named in the Escrow Agreement is hereby appointed as the Escrow Agent pursuant to such Escrow
Agreement.
On the closing date, the BCRUA shall cause the proceeds from the sale of the Bonds to be
deposited into the Escrow Fund or, if agreed to by the Purchaser, all or a portion of the proceeds
of the Bonds may be deposited into the Construction Fund.
Moneys disbursed from the Escrow Fund established pursuant to the Escrow Agreement
shall be applied only for the costs of issuance of the Bonds or the BCRUA Project Costs.
01035832,3
tl
The security for, and the investment of, funds on deposit in the Escrow Fund shall be
governed by the provisions of the Escrow Agreement.
Section 11. DEFICIENCIES - EXCESS BOND PAYMENTS. (a) Deficiencies. If
on any occasion there shall not be sufficient Bond Payments to make the required deposits into the
Debt Service Fund, then such deficiency shall be cured as soon as possible from the next available
unallocated Bond Payments and such payments shall be in addition to the amounts required to be
paid into these funds or accounts during such month or months.
(b) Excess Bond Payments. Subject to making the required deposits to the Debt Service
Fund when and as required by this Resolution, any resolution authorizing the issuance of any
currently Outstanding Bonds Similarly Secured or any resolution authorizing the issuance of
Additional Bonds,any excess Bond Payments may be used by the BCRUA for any lawful purpose
including, but not limited to,the redemption of any Bonds Similarly Secured.
Section 12. PAYMENT OF BONDS. While any of the Bonds Similarly Secured are
Outstanding, the General Manager or other authorized BCRUA official, shall cause to be
transferred to the Paying Agent/Registrar therefor,from funds on deposit in the Debt Service Fund,
if necessary,amounts sufficient to fully pay and discharge promptly each installment of interest on
and principal of the Bonds Similarly Secured as such installment accrues or matures; such transfer
of funds must be made in such manner as will cause immediately available funds to be deposited
with the Paying Agent/Registrar for the Bonds at the close of the Business Day next preceding the
date a debt service payment is due on the Bonds Similarly Secured.
Section 13. INVESTMENTS. Funds held in any fund or account created,established,
or maintained pursuant to this Resolution shall be invested as permitted by the provisions of the
BCRUA investment policy and the Public Funds Investment Act,as amended,Chapter 2256,Texas
Government Code and secured (to the extent not insured by the Federal Deposit Insurance
Corporation)to the fullest extent required by the Public Funds Collateral Act,as amended,Chapter
2257, Texas Government Code. All interest and income derived from deposits and investments
in any fund shall immediately be credited to, and any losses debited from, the fund from which
such funds were derived. All such investments shall be sold promptly when necessary to prevent
any default in connection with the Bonds.
Section 14. ISSUANCE OF ADDITIONAL BONDS. In addition to the right to issue
bonds of inferior lien as authorized by the laws of this State, the BCRUA reserves the right
hereafter to issue Additional Bonds. The Additional Bonds, when issued, shall be payable from
and secured by a lien on and pledge of the Bond Payments in the same manner and to the same
extent as the Bonds and the other Bonds Similarly Secured, and shall in all respects be of equal
dignity. The Additional Bonds may be issued in one or more series provided, however, that no
Additional Bonds, shall be issued unless and until the following conditions have been met:
(i) The BCR[.--A has demonstrated to the satisfaction of the Executive Administrator
of the Texas Water Development Board that the pledged Bond Payments will be sufficient for the
repayment of all of the Bonds and additional parity obligations;
01035832,3
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(ii) Except for a refunding to cure a default, the BCRUA is not then in default as to any
covenant, condition or obligation prescribed in the resolutions authorizing the issuance of the
Bonds Similarly Secured or the Contract (including any amendment or supplement thereto) and
the funds under the resolution authorizing the same contains the amounts then required to be
therein;
(ii) A consulting engineer certifies to the BCRUA the need for an estimated amount of
additional financing required for completion, expansion, enlargement or improvement of the
BCRUA Project as now or hereafter defined in the Contract; provided, however this certification
shall not be necessary for the issuance of any refunding bonds;
(iv) Leander, shall have approved the resolution(s) authorizing the issuance of the
Additional Bonds as to form and content and acknowledged that the payment of principal of and
interest on such Additional Bonds is payable, in whole or in part, from the Bond Payments to be
made to the BCRUA under and pursuant to the Contract;
(v) The resolution authorizing the issuance of the Additional Bonds provides for
deposits to be made to the Debt Service Fund in amounts sufficient to pay the principal of and
interest on such Additional Bonds as the same become due; and
(vi) Based upon an opinion of legal counsel to the BCRUA that there are legal, valid
and bindings contracts then in effect pursuant to which Leander and others, if any,which are parties
to such contracts are obligated to make payments to the BCRUA during each fiscal year(including
periods when services of the BCRUA Project may not be available to such contracting parties and
others) in such amounts as shall be necessary to provide to the BCRUA sufficient funds to pay
when due all principal and interest on all Bonds, Additional Bonds and other Bonds Similarly
Secured to be Outstanding after the issuance of the proposed Additional Bonds.
The Bonds Similarly Secured may be refunded (pursuant to any law then available) upon
such terms and conditions as the Board of the BCRUA may deem to be in the best interest of the
BCRUA; provided, however, such refunding bonds do not have to comply with paragraph (ii) of
this Section 14.
Section 15. SPECIAL PROJECT BONDS. The BCRUA further reserves the right to
issue bonds in one or more installments for the purchase, construction, improvement, extension,
replacement, enlargement or repair of utility facilities necessary under a contract or contracts with
persons,corporations,municipal corporations,political subdivisions,or entities including Leander,
such bonds to be payable from and secured by the proceeds of such contract or contracts (other
than the Contract). The BCRUA further reserves the right to refund such bonds and secure the
payment of the debt service requirements on the refunding bonds in the same manner or as
otherwise permitted by the laws of the State.
Section 16. MAINTENANCE OF BCRUA PROJECT - INSURANCE. The
BCRUA covenants, agrees, and affirms its covenants that while the Bonds Similarly Secured
01035832;3
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remain outstanding it will maintain and operate the BCRUA Project with all possible efficiency
and maintain casualty and other insurance on the properties of the BCRUA Project and its
operations of a kind and in such amounts customarily carried by municipal corporations in the
State engaged in a similar type of business (which must be in an amount sufficient to protect the
interests of the Registered Owners of the Bonds Similarly Secured in the BCRUA Project); and
that it will faithfully and punctually perform all duties with reference to the BCRUA Project
required by the laws of the State. All money received from losses under such insurance policies,
other than public liability policies, shall be retained for the benefit of the Registered Owners of the
Bonds Similarly Secured until and unless the proceeds are paid out in making good the loss or
damage in respect of which such proceeds are received, either by replacing the property destroyed
or repairing the property damaged, and adequate provision for making good such loss or damage
must be made within ninety (90) days after the date of loss. The payment of premiums for all
insurance policies required under the provisions hereof shall be considered Maintenance and
Operating Expenses of the BCRUA Project. Nothing in this Resolution shall be construed as
requiring the BCRUA to expend any funds which are derived from sources other than the operation
of the BCRUA Project but nothing herein shall be construed as preventing the BCRUA from doing
so.
Section 17. RECORDS AND ACCOUNTS - ANNUAL AUDIT. The BCRUA
covenants, agrees, and affirms its covenants that so long as any of the Bonds Similarly Secured
remain Outstanding, it will keep and maintain separate and complete records and accounts
pertaining to the operations of the BCRUA Project in which complete and correct entries shall be
made of all transactions relating thereto as provided by applicable law. The Registered Owners of
any Bonds Similarly Secured or any duly authorized agent or agents of such Registered Owners
shall have the right to inspect the BCRLJrA Project and all properties comprising the same. The
BCRUA further agrees that following (and in no event later than six (6) months after) the close of
each Fiscal Year, it will cause an audit of such books and accounts to be made by an independent
firm of Certified Public Accountants. The BCRUA will provide such the annual audit performed
by an independent firm of Certified Public Accountants as set forth in Section 30 of this Resolution.
Expenses incurred in making the annual audit of the operations of the BCRUA Project are to be
regarded as Maintenance and Operating Expenses of the BCRt1A Project.
Section 18. SALE OR ENCUMBRANCE OF BCRUA PROJECT. While any
Bonds remain Outstanding, the BCRUA will not sell, dispose of or further encumber the BCRUA
Project or any substantial part thereof; provided, however, that this provision shall not prevent the
BCRUA from (i)pledging the Bond Payments to Additional Bonds or Special Project Bonds as set
forth in Sections 14 and 15 of this Resolution or(ii) disposing of any part of the BCRUA Project
which is being replaced or is deemed by the BCRUA to be obsolete,worn out, surplus or no longer
needed for the proper operation of the BCRUA Project. Any agreement pursuant to which the
BCRUA contracts with a person, corporation, municipal corporation or political subdivision to
operate the BCR[.JA Project or to lease and/or operate all or part of the BCRUA Project shall not
be considered as an encumbrance of the BCRUA Project; provided, however, no such agreement
shall impair the pledge and lien on the Bond Payments.
01035832,3
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Section 19. COMPETITION. To the extent it legally may,the BCRUA will not grant
any franchise or permit for the acquisition, construction or operation of any competing facilities
which might be used as a substitute for the BCRUA Project and will prohibit the operation of any
such competing facilities.
Section 20. SPECIAL COVENANTS. The BCRUA further covenants and agrees
that: (a) Title. The BCRUA lawfully owns or will own and is or will be lawfully possessed of
the lands or easements upon which its BCRUA Project is and will be located, and has or will
purchase good and indefeasible estate in such lands in fee simple, or has or will lawfully obtain
any necessary easements to operate the BCRUA Project, and it warrants that it has or will obtain
and will defend, the title to all the aforesaid lands and easements for the benefit of the Registered
Owners of the Bonds against the claims and demands of all persons whomsoever,that it is lawfully
qualified to pledge the Bond Payments to the payment of the Bonds Similarly Secured, in the
manner prescribed herein, and that it has lawfully exercised such rights.
(b) Liens. The BCRUA will from time to time and before the same become delinquent
pay and discharge all taxes,assessments,and governmental charges,if any,which shall be lawfully
imposed upon it,or its BCRUA Project,and it will pay all lawful claims for rents, royalties, labor,
materials, and supplies which if unpaid might by law become a lien or charge upon its BCRUA
Project, provided, however,that no such tax,assessment, or charge,and that no such claims which
might be or other lien or charge, shall be required to be paid while the validity of the same shall be
contested in good faith by the BCRUA.
(c) Performance. The BCRUA will faithfully perform at all times any and all covenants,
undertakings, stipulations, and provisions contained in the resolutions authorizing the issuance of
Bonds Similarly Secured, and in each and every Bond Similarly Secured and pay from the Bond
Payments the principal of and interest on every Bond Similarly Secured on the dates and in the
places and manner prescribed in such resolutions and Bonds Similarly Secured; and that it will, at
the times and in the manner prescribed, or cause to be deposited from the Bond Payments the
amounts required to be deposited into the Debt Service Fund; and the Registered Owners of the
Bonds Similarly Secured may require the BCRUA, its officials, agents, and employees to carry
out, respect, or enforce the covenants and obligations of this Resolution or any resolution
authorizing the issuance of Bonds Similarly Secured, as the case may be, including, but without
limitation, the use and filing of mandamus proceedings, in any court of competent jurisdiction,
against the BCRUA, its officials, agents, and employees.
(d) Legal Authority. The BCRUA is duly authorized under the laws of the State to issue
the Bonds Similarly Secured; that all action on its part for the authorization and issuance of the
Bonds Similarly Secured has been duly and effectively taken, and the Bonds Similarly Secured in
the hands of the Registered Owners thereof are and will be valid and enforceable special
obligations of the BCR[!A in accordance with their terms payable solely from the Bond Payments.
(e) Budget. The BCRUA will prepare,adopt, and place into effect an annual budget(the
"Annual Budget")for Maintenance and Operation Expenses of the BCRUA Project for each Fiscal
01035832,3
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Year, including in each Annual Budget such items as are customarily and reasonably contained in
a utility system budget under generally accepted accounting procedures.
(f) Permits. The BCRUA will comply with all of the terms and conditions of any and all
franchises, permits, and authorizations applicable to or necessary with respect to the BCRUA
Project and which have been obtained from any governmental agency; and the BCRUA has or will
obtain and Keep in full force and effect all franchises, permits, authorizations, and other
requirements applicable to or necessary with respect to the acquisition, construction, equipment,
operation, and maintenance of the BCRUA Project.
Section 21. LIMITED OBLIGATIONS OF THE BCRUA. The Bonds Similarly
Secured are limited, special obligations of the BCRUA payable from and equally and ratably
secured solely by a lien on and pledge of the Bond Payments, and the Registered Owners thereof
shall never have the right to demand payment of the principal or interest on the Bonds Similarly
Secured from any funds raised or to be raised through taxation by Leander or the BCRUA.
Section 22. DEFAULT AND REMEDIES. (a) Events of Default. Each of the
following occurrences or events for the purpose of this Resolution is hereby declared to be an Event
of Default:
(i) the failure to make payment of the principal of or interest on any of the Bonds
when the same becomes due and payable; or
(ii) default in the performance or observance of any other covenant, agreement or
obligation of the BCRUA, the failure to perform which materially, adversely affects the
rights of the Registered Owners of the Bonds, including, but not limited to, their prospect
or ability to be repaid in accordance with this Resolution, and, if such default is capable of
cure, the continuation thereof for a period of sixty (60) days after notice of such default is
given by any Registered Owner to the BCRUA; or
(iii) a default by Leander under the Contract.
(b) Remedies far Event of Default.
(i) Upon the happening of any Event of Default, then and in every case, any
Registered Owner or an authorized representative thereof, including, but not limited to, a
trustee or trustees therefor, may proceed against the BCRUA, or any official, officer or
employee of the BCRUA in their official capacity, for the purpose of protecting and
enforcing the rights of the Registered Owners under this Resolution, by mandamus or other
suit, action or special proceeding in equity or at law, in any court of competent jurisdiction,
for any relief permitted by law, including the specific performance of any covenant or
agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in
violation of any right of the Registered Owners hereunder or any combination of such
remedies. The Registered Owners are third party beneficiaries to the Contract with the
01035832,3
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ability to enforce the provisions of the Contract for such period that a default exists under
the Contract.
(ii) Upon the happening of any Event of Default, then and in every case the
Purchaser may exercise all remedies available to it in law or equity, and any provision of
the this Resolution or the Bonds that restricts or limits the Purchaser's full exercise of these
remedies shall be of no force and effect.
(iii) It is provided that all such proceedings shall be instituted and maintained for
the equal benefit of all Registered Owners of Bonds then Outstanding.
(iv) As long as an Insurer is not in payment default on the related Insurance Policy
for the Bonds, the Insurer shall be deemed to be the sole Registered Owner of such Bonds
insured by it for purposes of enforcing remedies in the Event of Default under this
Resolution.
(c) Remedies Not Exclusive.
(i) No remedy herein conferred or reserved 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 given hereunder or under the Bonds or now or
hereafter existing at law or in equity; provided, however, that notwithstanding any other
provision of this Resolution, the right to accelerate the debt evidenced by the Bonds shall
not be available as a remedy under this Resolution.
(ii) The exercise of any remedy herein conferred or reserved shall not be deemed
a waiver of any other available remedy.
(iii) By accepting the delivery of a Bond authorized under this Resolution, such
Registered Owner agrees that the certifications required to effectuate any covenants or
representations contained in this Resolution do not and shall never constitute or give rise
to a personal or pecuniary liability or charge against the officers, employees or trustees of
the BCRUA or the Board.
(iv) None of the members of the Board of Directors, nor any other official or
officer, agent, or employee of the BCRUA, shall be charged personally by the Registered
Owners with any liability,or be held personally liable to the Registered Owners under any
term or provision of this Resolution, or because of any Event of Default or alleged Event
of Default under this Resolution.
Section 23. AMENDMENT OF RESOLUTION. (a) Amendments Without
Consent. This Resolution and the rights and obligations of the Board and of the Registered
Owners of the Bonds may be modified or amended at any time without notice to or the consent of
01035832;3
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any Registered Owner of the Bonds or any Bond Similarly Secured, solely for any one or more of
the following purposes:
(i) To add to the covenants and agreements of the Board contained in this
Resolution, other covenants and agreements thereafter to be observed, or to surrender any
right or power reserved to or conferred upon the Board in this Resolution;
(ii) To cure any ambiguity or inconsistency, or to cure or correct any defective
provisions contained in this Resolution, upon receipt by the Board of an opinion of counsel,
that the same is needed for such purpose, and will more clearly express the intent of this
Resolution;
(iii) To supplement the security for the Bonds, replace or provide additional Credit
Agreement, or change the form of the Bonds or make such other changes in the provisions
hereof as the Board may deem necessary or desirable and which shall not, in the judgment
of the Board, materially adversely affect the interests of the owners of the Outstanding
Bonds;
(iv)To make any changes or amendments requested by any bond rating agency then
rating or requested to rate the Bonds, as a condition to the issuance or maintenance of a
rating, which changes or amendments do not, in the judgment of the Board, materially
adversely affect the interests of the owners of the Outstanding Bonds;
(v) To make such changes, modifications or amendments as are permitted by
Section 30(c)of this Resolution;
(vi) To make such other changes in the provisions hereof as the Board may deem
necessary or desirable and which shall not, in the judgment of the Board, materially
adversely affect the interests of the owners of the Outstanding Bonds; or
(vii)To assign the Contract to a trustee.
(b) Amendments With Consent. Subject to the other provisions of this Resolution, the
Registered Owners of Outstanding Bonds aggregating S 1% in Outstanding principal amount shall
have the right from time to time to approve any amendment, other than amendments described in
Subsection (a) of this Section, to this Resolution which may be deemed necessary or desirable by
the Board; provided, however,that nothing herein contained shall permit or be construed to permit,
without the approval of the owners of all of the Outstanding Bonds, the amendment of the terms
and conditions in this Resolution or in the Bonds so as to:
(1) Make any change in the maturity of the Outstanding Bonds;
(2) Reduce the rate of interest borne by the Outstanding Bonds;
(3) Reduce the amount of the principal payable on the Outstanding Bonds;
U:C3S83?,3
18
(4) Modify the terms of payment of principal of or interest on the Outstanding Bonds,
or impose any conditions with respect to such payment;
(5) Affect the rights of the owners of less than all Bonds then Outstanding; or
(6) Change the minimum percentage of the Outstanding principal amount of Bonds
necessary for consent to such amendment.
(c) Notice. (i) If at any time the Board shall desire to amend this Resolution other than
pursuant to subsection (a) above, the Board shall cause notice of the proposed amendment to be
published in a financial newspaper or journal of general circulation in The City of New York,New
York or the State including in the Texas Bond Reporter once during each calendar week for at least
two (2) 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 at the principal office of the Paying
Agent/Registrar for inspection by all owners of Bonds. Such publication is not required, however,
if the Board gives or causes to be given such notice in writing to each Registered Owner of Bonds.
(ii) In the event S&P and/or Moody's maintains a rating on the Bonds, copies of any
modification or amendment to this Resolution shall be sent to S&P and.--'or Moody's,as applicable,
at least ten (10) days prior to the effective date thereof.
(d) Receipt of Consents. Whenever at any time not less than thirty (30) days, and within
one (1)year, from the date of the first publication of said notice or other service of written notice
of the proposed amendment the Board shall receive an instrument or instruments executed by all
of the owners or the owners of at least 51% in Outstanding principal amount of Bonds, as
appropriate, which instrument or instruments shall refer to the proposed amendment described in
said notice and which specifically consent to and approve such amendment in substantially the
form of the copy thereof on file as aforesaid, the Board may adopt the amendatory resolution in
substantially the same form.
(e) Effect of Amendments. Upon the adoption by the Board of any resolution to amend
this Resolution pursuant to the provisions of this Section, this Resolution shall be deemed to be
amended in accordance with the amendatory resolution, and the respective rights, duties, and
obligations of the Board and all the owners of then Outstanding Bonds and all future Bonds shall
thereafter be determined, exercised, and enforced under the resolution and this Resolution, as
amended.
(f) Consent Irrevocable. Any consent given by any owner of Bonds pursuant to the
provisions of this Section shall be irrevocable for a period of six (6) months from the date of the
first publication or other service of the notice provided for in this Section, and shall be conclusive
and binding upon all future owners of the same Bonds during such period. Such consent may be
revoked at any time after six(6)months from the date of the first publication of such notice by the
owner who gave such consent, or by a successor in title, by filing notice thereof with the Registrar
and the Board, but such revocation shall not be effective if the owners of 51% in Outstanding
01035832,3
19
principal amount of Bonds, prior to the attempted revocation, consented to and approved the
amendment.
(g) Ownership. For the purpose of this Section, the ownership and other matters relating
to all Bonds registered as to ownership shall be determined from the Registration Books kept by
the Paying Agent/Registrar therefor. The Paying Agent/Registrar may conclusively assume that
such ownership continues until written notice to the contrary is served upon the Paying
Agent/Registrar.
(h)Insurer Consent. Notwithstanding the foregoing provisions of this Section,so long as
any Insurer is not in payment default under its policy, no amendment or supplement to this
Resolution may become effective except upon obtaining the prior written consent of any such
Insurer.
Section 24. COVENANTS REGARDING TAX-EXEMPTION OF INTEREST ON
THE BONDS. (a) Covenants. The Board covenants to take any action necessary to assure, or
refrain from any action which would adversely affect, the treatment of the Bonds as obligations
described in section 103 of the Internal Revenue Code of 1986, as amended (the "IRS Code"), the
interest on which is not includable in the "gross income" of the holder for purposes of federal
income taxation. In furtherance thereof, the Board covenants as follows:
(1) to take any action to assure that no more than 10 percent of the proceeds of the
Bonds or the projects financed or refinanced therewith (less amounts deposited to a reserve
fund, if any)are used for any "private business use,"as defined in section 141(6)(6) of the
IRS Code or, if more than 10 percent of the proceeds of the Bonds or the projects financed
or refinanced therewith are so used, such amounts, whether or not received by the Board,
with respect to such private business use, do not, under the terms of this Resolution or any
underlying arrangement, directly or indirectly, secure or provide for the payment of more
than 10 percent of the debt service on the Bonds, in contravention of section 141(b)(2) of
the IRS Code;
(2) to take any action to assure that in the event that the "private business use"
described in subsection (1) hereof exceeds 5 percent of the proceeds of the Bonds or the
projects financed or refinanced therewith (less amounts deposited into a reserve fund, if
any) then the amount in excess of 5 percent is used for a "private business use" which is
"related" and not "disproportionate," within the meaning of section 141(b)(3) of the IRS
Code, to the governmental use;
(3) to take any action to assure that no amount which is greater than the lesser of
$5,000,000,or 5 percent of the proceeds of the Bonds(less amounts deposited into a reserve
fund, if any) is directly or indirectly used to finance loans to persons, other than state or
local governmental units, in contravention of section 141(c) of the IRS Code;
01035832,3
20
(4) to refrain from taking any action which would otherwise result in the Bonds
being treated as "private activity bonds" within the meaning of section 141(b) of the IRS
Code;
(5)to refrain from taking any action that would result in the Bonds being"federally
guaranteed" within the meaning of section 149(b) of the IRS Code;
(6) to refrain from using any portion of the proceeds of the Bonds, directly or
indirectly, to acquire or to replace funds which were used, directly or indirectly,to acquire
investment property (as defined in section 148(b)(2) of the IRS Code) which produces a
materially higher yield over the term of the Bonds,other than investment property acquired
with:
(A) proceeds of the Bonds invested for a reasonable temporary period of 3
years or less or, in the case of a refunding bond, for a period of 90 days or less for
current refundings and 30 days or less for advance refundings until such proceeds
are needed for the purpose for which the Bonds are issued,
(B) amounts invested in a bona fide debt service fund, within the meaning
of section 1.148-1(b) of the Treasury Regulations, and
(C) amounts deposited in any reasonably required reserve or replacement
fund to the extent such amounts do not exceed ten (10) percent of the proceeds of
the Bonds;
(7) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as
proceeds of the Bonds, as may be necessary, so that the Tax-Exempt Bonds do not
otherwise contravene the requirements of section 148 of the IRS Code(relating to arbitrage)
and, to the extent applicable, section 149(d) of the IRS Code (relating to advance
refundings); and
(8)to pay to the United States of America at least once during each five-year period
(beginning on the date of delivery of the Bonds) an amount that is at least equal to 90
percent of the "Excess Earnings," within the meaning of section 148(f) of the IRS Code
and to pay to the United States of America, not later than sixty (60) days after the Bonds
have been paid in full, 100 percent of the amount then required to be paid as a result of
Excess Earnings under section 148(f)of the IRS Code;
(9) to file or cause to be filed with the Secretary of the Treasury,not later than the
15'h day of the second calendar month after the close of the calendar quarter in which the
Bonds are issued, an information statement concerning the Bonds, all under and in
accordance with Section 149(e) of the Code and the applicable Regulations promulgated
thereunder; and
01035832,3
21
(10) to assure that the proceeds of the Bonds will be used solely for new money
projects.
(b)Rebate Fund. In order to facilitate compliance with the above covenant(8),a"Rebate
Fund" is hereby established by the Board for the sole benefit of the United States of America, and
such fund shall not be subject to the claim of any other person, including without limitation the
bondholders. The Rebate Fund is established for the additional purpose of compliance with
section 148 of the IRS Code.
(c) Proceeds. The Board understands that the term "proceeds" includes "disposition
proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds, transferred
proceeds (if any) and proceeds of the refunded bonds expended prior to the date of issuance of the
Bonds. It is the understanding of the Board that the covenants contained herein are intended to
assure compliance with the IRS Code and any regulations or rulings promulgated by the U.S.
Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter
promulgated which modify or expand provisions of the IRS Code, as applicable to the Bonds, the
BCRUA will not be required to comply with any covenant contained herein to the extent that such
failure to comply, in the opinion of nationally recognized bond counsel, will not adversely affect
the exemption from federal income taxation of interest on the Bonds under section 103 of the IRS
Code. In the event that regulations or rulings are hereafter promulgated which impose additional
requirements which are applicable to the Bonds,the BCRUA agrees to comply with the additional
requirements to the extent necessary, in the opinion of nationally recognized bond counsel, to
preserve the exemption from federal income taxation of interest on the Bonds under section 103 of
the IRS Code. In furtherance of such intention, the BCRUA hereby authorizes and directs the
BCRUA Representative to execute any documents,certificates or reports required by the IRS Code
and to make such elections,on behalf of the BCRt:A,which may be permitted by the IRS Code as
are consistent with the purpose for the issuance of the Bonds. This Resolution is intended to satisfy
the official intent requirements set forth in Section 1.150-2 of the Treasury Regulations.
(d) Allocation Of, and Limitation On, Expenditures for the Project. The BCRUA
covenants to account for the expenditure of sale proceeds and investment earnings to be used for
the purposes described in Section 2 of this Resolution (the "Project") on its books and records in
accordance with the requirements of the IRS Code. The Board recognizes that in order for the
proceeds to be considered used for the reimbursement of costs, the proceeds must be allocated to
expenditures within 18 months of the later of the date that (1) the expenditure is made, or (2) the
Project is completed; but in no event later than three years after the date on which the original
expenditure is paid. The foregoing notwithstanding, the Board recognizes that in order for
proceeds to be expended under the IRS Code, the sale proceeds or investment earnings must be
expended no more than sixty (60) days after the earlier of(1) the fifth (51h) anniversary of the
delivery of the Bonds, or(2) the date the Bonds are retired. The Board agrees to obtain the advice
of nationally-recognized bond counsel if such expenditure fails to comply with the foregoing to
assure that such expenditure will not adversely affect the tax-exempt status of the Bonds. For
purposes of this subsection, the Board shall not be obligated to comply with this covenant if it
obtains an opinion of nationally-recognized bond counsel to the effect that such failure to comply
01035832.3
22
will not adversely affect the excludability for federal income tax purposes from gross income of
the interest.
(e) Disposition of Project. The BCRUA covenants that the property constituting the
BCRUA Project will not be sold or otherwise disposed in a transaction resulting in the receipt by
the Board of cash or other compensation, unless the Board obtains an opinion of nationally-
recognized bond counsel that such sale or other disposition will not adversely affect the tax-exempt
status of the Bonds. For purposes of this subsection, the portion of the property comprising
personal property and disposed of in the ordinary course shall not be treated as a transaction
resulting in the receipt of cash or other compensation. For purposes of this subsection,the Board
shall not be obligated to comply with this covenant if it obtains an opinion of nationally-recognized
bond counsel to the effect that such failure to comply will not adversely affect the excludability for
federal income tax purposes from gross income of the interest.
Section 25. RESOLUTION TO CONSTITUTE A CONTRACT; EQUAL
SECURITY. In consideration of the acceptance of the Bonds,the issuance of which is authorized
hereunder, by those who shall hold the same from time to time, this Resolution shall be deemed to
be and shall constitute a contract between the Board and the Registered Owners from time to time
of the Bonds and the pledge made in this Resolution by the Board and the covenants and
agreements set forth in this Resolution to be performed by the Board shall be for the equal and
proportionate benefit, security, and protection of all Registered Owners, without preference,
priority, or distinction as to security or otherwise of any of the Bonds authorized hereunder over
any of the others by reason of time of issuance, sale,or maturity thereof or otherwise for any cause
whatsoever,except as expressly provided in or permitted by this Resolution.
Section 26. SEVERABILITY OF INVALID PROVISIONS. If any one or more of
the covenants, agreements, or provisions herein contained shall be held contrary to any express
provisions of law or contrary to the policy of express law, though not expressly prohibited, or
against public policy, or shall for any reason whatsoever be held invalid, then such covenants,
agreements,or provisions shall be null and void and shall be deemed separable from the remaining
covenants, agreements, or provisions and shall in no way affect the validity of any of the other
provisions hereof or of the Bonds issued hereunder.
Section 27. PAYMENT AND PERFORMANCE ON BUSINESS DAYS. Except as
provided to the contrary in the FORM OF BOND, whenever under the terms of this Resolution or
the Bonds, the performance date of any provision hereof or thereof, including the payment of
principal of or interest on the Bonds, shall occur on a day other than a Business Day, then the
performance thereof, including the payment of principal of and interest on the Bonds, need not be
made on such day but may be performed or paid, as the case may be, on the next succeeding
Business Day with the same force and effect as if made on the date of performance or payment.
Section 28. LIMITATION OF BENEFITS WITH RESPECT TO THE
RESOLUTION. With the exception of the rights or benefits herein expressly conferred, nothing
expressed or contained herein or implied from the provisions of this Resolution or the Bonds is
intended or should be construed to confer upon or give to any person other than the Board, the
01035832,3
Registered Owners,and the Paying Agent/Registrar,any legal or equitable right, remedy, or claim
under or by reason of or in respect to this Resolution or any covenant, condition, stipulation,
promise, agreement, or provision herein contained. This Resolution and all of the covenants,
conditions, stipulations, promises, agreements, and provisions hereof are intended to be and shall
be for and inure to the sole and exclusive benefit of the Board, the Registered Owners, and the
Paying Agent/Registrar as herein and therein provided.
Section 29. CUSTODY, APPROVAL, BOND COUNSEL'S OPINION, CUSIP
NUMBERS, PREAMBLE AND INSURANCE. The BCRUA Representative is hereby
authorized to have control of the Bonds issued hereunder and all necessary records and proceedings
pertaining to the Bonds pending their delivery and approval by the Attorney General of the State.
The BCRUA Representative is hereby authorized, to the extent deemed necessary or advisable
thereby, in the discretion thereof, to request that the Attorney General approve the Bonds as
permitted by Chapter 1202, Texas Government Code, in which case the BCRUA Representative
also is authorized to request the Comptroller of Public Accounts register the Bonds, and to cause
an appropriate legend reflecting such approval and registration to appear on the Bonds and the
substitute Bonds. The approving legal opinion of the Board's Bond Counsel and the assigned
CUSIP numbers may,at the option of the Board, be printed on the Bonds and on any Bonds issued
and delivered in exchange or replacement of any Bond, but neither shall have any legal effect, and
shall be solely for the convenience and information of the Registered Owners of the Bonds. The
preamble to this Resolution is hereby adopted and made a part of this Resolution for all purposes.
If insurance is obtained on any of the Bonds, the Bonds shall bear, as appropriate and applicable,
a legend concerning insurance as provided by the municipal bond insurance company issuing any
such insurance.
Section 30. COMPLIANCE WITH RULE 15c2-12. (a) Annual Reports. The
Board shall provide annually to the MSRB, (1) within six months after the end of each fiscal year
of the Board ending in or after 2017, financial statements of the Board if audited financial
statements of the Board are then available, and (2) if not available by such time, audited financial
statements of the Board, when and if available. Any financial statements to be provided shall be
(i) prepared by a certified public accountant or licensed public accountant in accordance with
generally accepted auditing standards or such other accounting principles as the Board may be
required to employ from time to time pursuant to state law or regulation, and (ii) audited, if the
Board commissions an audit of such financial statements and the audit is completed within the
period during which they must be provided. If the audit of such financial statements is not
complete within 12 months after any such fiscal year end, then the Board shall file unaudited
financial statements within such 12-month period and audited financial statements for the
applicable fiscal year, when and if the audit report on such statements becomes available.
If the Board changes its fiscal year, it will file notice of the change (and of the date of the
new fiscal year end) with the MSRB prior to the next date by which the Board otherwise would be
required to provide financial information and operating data pursuant to this Section.
(b) Event Notices. The Board shall file notice of any of the following events with respect
to the Bonds with the MSRB in a timely manner and not more than 10 business days after the
occurrence of the event:
01035832,3
24
(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults, if material;
(3) Unscheduled draws on debt service reserves reflecting financial difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial difficulties;
(5) Substitution of credit or liquidity providers, or their failure to perform;
(6) Adverse tax opinions, the issuance by the internal Revenue Service of proposed or
final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB), or other
material notices or determinations with respect to the tax status of the Bonds, or other material
events affecting the tax status of the Bonds;
(7) Modifications to rights of holders of the Bonds, if material;
(8) Bond calls, if material, and tender offers;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the Bonds, if
material;
(11) Rating changes;
(12) Bankruptcy, insolvency, receivership, or similar event of the Board;
(13) The consummation of a merger, consolidation, or acquisition involving the Board
or the sale of all or substantially all of the assets of the Board, other than in the ordinary course of
business, the entry into a definitive agreement to undertake such an action or the termination of a
definitive agreement relating to any such actions, other than pursuant to its terms, if material; and
(14) Appointment of a successor or additional trustee or the change of name of a trustee,
if material.
For these purposes, any event described in the immediately preceding paragraph (12) is
considered to occur when any of the following occur: the appointment of a receiver, fiscal agent,
or similar officer for the Board in a proceeding under the United States Bankruptcy Code or in any
other proceeding under state or federal law in which a court or governmental authority has assumed
jurisdiction over substantially all of the assets or business of the Board, or if such jurisdiction has
been assumed by leaving the existing governing body and officials or officers of the Board in
possession but subject to the supervision and orders of a court or governmental authority, or the
entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or
governmental authority having supervision or jurisdiction over substantially all of the assets or
business of the Board.
01035832,3
25
The Board shall file notice with the MSRB, in a timely manner, of any failure by the Board
to provide financial information or operating data in accordance with subsection(a)of this Section
by the time required by such subsection.
(c)Limitations,Disclaimers, and Amendments. The Board shall be obligated to observe
and perform the covenants specified in this Section for so long as,but only for so long as,the Board
remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except
that the Board in any event will give notice of any deposit that causes the Bonds to be no longer
Outstanding.
The provisions of this Section are for the sole benefit of the holders and beneficial owners
of the Bonds, and nothing in this Section,express or implied, shall give any benefit or any legal or
equitable right, remedy,or claim hereunder to any other person. The Board undertakes to provide
only the financial information, operating data, financial statements, and notices which it has
expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any
other information that may be relevant or material to a complete presentation of the Board's
financial results, condition, or prospects or hereby undertake to update any information provided
in accordance with this Section or otherwise, except as expressly provided herein. The Board
makes no representation or warranty concerning such information or its usefulness to a decision to
invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE BOARD BE LIABLE TO THE HOLDER
OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY
THE BOARD, WHETHER NEGLIGENT OR WITH OR WITHOUT FAULT ON ITS PART,OF
ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF
ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
No default by the Board in observing or performing its obligations under this Section shall
constitute a breach of or default under this Resolution for purposes of any other provision of this
Resolution.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the Board under federal and state securities laws.
The provisions of this Section may be amended by the Board from time to time to adapt to
changed circumstances that arise from a change in legal requirements,a change in law,or a change
in the identity, nature, status, or type of operations of the Board, but only if(1) the provisions of
this Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in the
primary offering of the Bonds in compliance with the Rule, taking into account any amendments
or interpretations of the Rule to the date of such amendment as well as such changed circumstances,
and(2) either(a) the holders of a majority in aggregate principal amount of the Outstanding Bonds
consent to such amendment or (b) a person that is unaffiliated with the Board (such as nationally
recognized bond counsel) determines that such amendment will not materially impair the interests
01035832,3
26
of the holders and beneficial owners of the Bonds. The Board may also repeal or amend the
provisions of this Section if the SEC amends or repeals the applicable provisions of the Rule or
any court of final jurisdiction enters judgment that such provisions of the Rule are invalid, and the
Board also may amend the provisions of this Section in its discretion in any other manner or
circumstance, but in either case only if and to the extent that the provisions of this sentence would
not have prevented an underwriter from lawfully purchasing or selling Bonds in the primary
offering of the Bonds, giving effect to (i) such provisions as so amended and (ii)any amendments
or interpretations of the Rule. If the Board so amends the provisions of this Section, the Board
shall include with any amended financial information or operating data next provided in
accordance with this subsection(a)of this Section an explanation, in narrative form,of the reasons
for the amendment and of the impact of any change in the type of financial information or operating
data so provided.
(d) Format IdentifyingInformation and Incor2oration-by Reference. All financial
information, operating data, financial statements, and notices required by this Section to be
provided to the MSRB shall be provided in an electronic format and be accompanied by identifying
information prescribed by the MSRB.
Financial information and operating data to be provided pursuant to subsection (a) of this
Section may be set forth in full in one or more documents or may be included by specific reference
to any document(including an official statement or other offering document)available to the public
on the MSRB's Internet Web site or filed with the SEC.
Section 31. APPLICATION OF BOND PROCEEDS. Proceeds from the sale of the
Bonds shall, promptly upon receipt thereof, be applied by the BCRUA Representative as follows
an amount sufficient to accomplish the purposes of Section 2 shall be deposited in the Escrow Fund
or Construction Fund as authorized by the Texas Water Development Board.
Any sale proceeds of the Bonds remaining after making all deposits and payments provided
for above shall be deposited to the Debt Service Fund as provided in Section 10 and applied to the
payment of interest on the Bonds.
Section 32. DEFEASANCE PROVISIONS. (a) Any Bond and the interest thereon
shall be deemed to be paid, retired and no longer outstanding (a "Defeased Bond") within the
meaning of this Resolution,except to the extent provided in subsections(c) and (e)of this Section,
when payment of the principal of such Bond,plus interest thereon to the due date or dates(whether
such due date or dates be by reason of maturity, upon redemption, or otherwise) either (i) shall
have been made or caused to be made in accordance with the terms thereof(including the giving
of any required notice of redemption or the establishment of irrevocable provisions for the giving
of such notice) or (ii) shall have been provided for on or before such due date by irrevocably
depositing with or making available to the Paying Agew Registrar or an eligible trust company or
commercial bank for such payment (l) lawful money of the United States of America sufficient to
make such payment, (2) Defeasance Securities,certified by an independent public accounting firm
of national reputation to mature as to principal and interest in such amounts and at such times as
will ensure the availability,without reinvestment, of sufficient money to provide for such payment
nl C35832,1
27
and when proper arrangements have been made by the BCRUA with the Paying Agent/Registrar
or an eligible trust company or commercial bank for the payment of its services until all Defeased
Bonds shall have become due and payable or(3)any combination of(1)and (2). At such time as
a Bond shall be deemed to be a Defeased Bond hereunder,as aforesaid, such Bond and the interest
thereon shall no longer be secured by, payable from, or entitled to the benefits of, the Bond
Payments as provided in this Resolution, and such principal and interest shall be payable solely
from such money or Defeasance Securities, and thereafter the BCRUA will have no further
responsibility with respect to amounts available to such Paying Agent/Registrar(or other financial
institution permitted by applicable law) for the payment of such Defeased Bond, including any
insufficiency therein caused by the failure of the Paying Agent/Registrar (or other financial
institution permitted by law)to receive payment when due on the Defeasance Bond.
(b) The deposit under clause (ii) of subsection (a) shall be deemed a payment of a Bond
as aforesaid when proper notice of redemption of such Bonds shall have been given or upon the
establishment of irrevocable provisions for the giving of such notice, in accordance with this
Resolution. Any money so deposited with the Paying Agent/Registrar or an eligible trust
company or commercial bank as provided in this Section may at the discretion of the BCRUA also
be invested in Defeasance Securities, maturing in the amounts and at the times as hereinbefore set
forth, and all income from all Defeasance Securities in possession of the Paying Agent/Registrar
or an eligible trust company or commercial bank pursuant to this Section which is not required for
the payment of such Bond and premium, if any, and interest thereon with respect to which such
money has been so deposited, shall be remitted to the BCRUA.
(c) Notwithstanding any provision of any other Section of this Resolution which may be
contrary to the provisions of this Section, all money or Defeasance Securities set aside and held in
trust pursuant to the provisions of this Section for the payment of principal of the Bonds and
premium, if any, and interest thereon, shall be applied to and used solely for the payment of the
particular Bonds and premium, if any, and interest thereon, with respect to which such money or
Defeasance Securities have been so set aside in trust. Until all Defeased Bonds shall have become
due and payable, the Paying AgenL'Registrar shall perform the services of Paying Agent/Registrar
for such Defeased Bonds the same as if they had not been defeased, and the BCRUA shall make
proper arrangements to provide and pay for such services as required by this Resolution.
(d) Notwithstanding anything elsewhere in this Resolution, if money or Defeasance
Securities have been deposited or set aside with the Paying Agent/Registrar or an eligible trust
company or commercial bank pursuant to this Section for the payment of Bonds and such Bonds
shall not have in fact been actually paid in full, no amendment of the provisions of this Section
shall be made without the consent of the registered owner of each Bond affected thereby.
(e) Notwithstanding the provisions of subsection(a) immediately above,to the extent that,
upon the defeasance of any Defeased Bond to be paid at its maturity, the BCRUA retains the right
under State law to later call that Defeased Bond for redemption in accordance with the provisions
of this Resolution,the BCRUA may call such Defeased Bond for redemption upon complying with
the provisions of State law and upon the satisfaction of the provisions of subsection(a)immediately
above with respect to such Defeased Bond as though it was being defeased at the time of the
(11035837,3
28
exercise of the option to redeem the Defeased Bond and the effect of the redemption is taken into
account in determining the sufficiency of the provisions made for the payment of the Defeased
Bond.
Section 33. COMPLIANCE WITH THE TEXAS WATER DEVELOPMENT
BOARD'S RULES AND REGULATIONS. The provisions of this Section shall apply so long
as the Bonds, or any of them, are owned by the Texas Water Development Board (the "TWDB").
The BCRUA will comply with all of the requirements contained in the resolution or resolutions
adopted by the TWDB with respect to the issuance of the Bonds. In addition, in compliance with
the TWDB's State Water Implementation Fund for Texas Loan Program Rules,the BCRUA agrees
and covenants:
(a) Any loan proceeds from the Bonds that are determined to be surplus proceeds
remaining after completion of one or more of the projects described in Section 2 hereof shall be
used for the following purposes as approved by the Executive Administrator: (1) deposit into the
Debt Service Fund or other debt service account for the payment of interest or principal on the
Bonds owned by the TWDB; or (2) eligible costs for a project as authorized by the Executive
Administrator.
(b) The BCRUA shall indemnify, hold harmless and protect the TWDB from any and all
claims, causes of action or damages to the person or property of third parties arising from the
sampling, analysis, transport, storage, treatment, recycling and disposition of any contaminated
sewage sludge, contaminated sediments and/or contaminated media that may be generated by the
BCRUA, its contractors, consultants, agents, officials and employees as a result of activities
relating to the project, to the extent permitted by law.
(c) BCRUA shall report to the TWDB the amounts of project funds, if any,that were used
to compensate historically underutilized businesses that worked on the project, in accordance with
31 TAC § 363.1312.
(d) The TWDB will purchase the Bonds, acting through the TWDB's designated trustee,
and the Bonds shall be registered in the name of Cede & Co. and closed in book-entry form in
accordance with 31 TAC § 363.42(c)(1 ).
(e) Neither the BCRUA nor a related party thereto will acquire any of the TWDB's source
series bonds in an amount related to the amount of the Bonds to be acquired from the BCRUA by
the TWDB.
(f) Payments of principal and interest on the Bonds will be made to the TWDB via wire
transfer at no cost to the TWDB.
(g) The BCRUA will provide the TWDB with copies of"as built plans" pertaining to the
projects financed, in whole or in part,with any funds of the TWDB.
01035832;3
29
(h) Within 60 days of completion of the construction of the projects financed, in whole or
in part,by the loan evidenced by the Bonds, BCRUA will provide a final accounting to the TWDB
of the total costs of the projects;any surplus shal I be used in a manner as approved by the Executive
Administrator.
(i) So long as any Bonds are held by the TWDB, BCRUA will provide to the TWDB's
Executive Administrator, within 180 days of the end of BCRUA fiscal year, a copy of each of its
annual audited financial statements, to be submitted without charge.
0) The BCRUA will maintain the records and accounts described in Section 17 hereof in
accordance with generally accepted accounting principles necessary to demonstrate compliance
with the TWDB's financial assistance-related legal and contractual provisions.
(k) Upon request by the Executive Administrator, the BCRUA shall submit annual audits
of contracting parties for the Executive Administrator's review.
Section 34. FURTHER PROCEDURES. The President of the Board, the BCRUA
Representative, and all other officers, employees,and agents of the Board, 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 Board 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, the Bonds, the sale and delivery of the Bonds and fixing all details
in connection therewith. The BCRUA Representative is authorized to sign this Resolution.
Section 35. DTC LETTER OF REPRESENTATION. The Board approves
execution by the BCR[lA Representative and delivery to DTC of a "Blanket Letter of
Representations"with respect to the utilization by the Board of DTC's book-entry-only system and
the Board intends to utilize such book-entry-only system in connection with the Bonds.
Section 36. BOND INSURANCE. (a) In connection with the sale of the Bonds, the
Board may obtain municipal bond insurance policies from one or more municipal bond insurers
(the "Insurer") to guarantee the full and complete payment required to be made by or on behalf of
the Board on some or all of the Bonds as determined by the BCRUA Representative. The BCRUA
Representative is hereby authorized to sign a commitment letter with the Insurer and to pay the
premium for the bond insurance policies at the time of the delivery of the Bonds out of the proceeds
of sale of the Bonds or from other available funds and to execute such other documents and
certificates as necessary in connection with the bond insurance policies as he or she may deem
appropriate. Printing on Bonds covered by the bond insurance policies a statement describing
such insurance, in form and substance satisfactory to the Insurer and the BCRUA Representative,
is hereby approved and authorized. The Award Certificate may contain provisions related to the
bond insurance policies, including payment provisions thereunder, and the rights of the Insurer or
Insurers,and any such provisions shall be read and interpreted as an integral part of this Resolution.
01035832,3
30
(b) As long as an Insurer is not in default on the related Insurance Policy for the Bonds,the
Insurer of a Series shall be deemed to be the sole Registered Owner of such Bonds insured by it
for all purposes of this Resolution.
Section 37. REPEAL OF CONFLICTING RESOLUTIONS. All resolutions and
all parts of any resolutions which are in conflict or inconsistent with this Resolution are hereby
repealed and shall be of no further force or effect to the extent of such conflict or inconsistency.
Section 38. PUBLIC NOTICE. It is hereby found and determined that each of the
officers and members of the Board was duly and sufficiently notified officially and personally, in
advance,of the time, place, and purpose of the Meeting at which this Resolution was adopted; that
this Resolution would be introduced and considered for adoption at said meeting; and that said
meeting was open to the public, and public notice of the time, place, and purpose of said meeting
was given, all as required by Chapter 551, Texas Government Code.
Section 39. NO PERSONAL LIABILITY. No covenant or agreement contained in
the Bonds, this Resolution or any corollary instrument shall be deemed to be the covenant or
agreement of any member of the Board or any officer, agent, employee or representative of the
Board in his individual capacity, and neither the directors, officers, agents, employees or
representatives of the Board nor any person executing the Bonds shall be personally liable thereon
or be subject to any personal liability for damages or otherwise or accountability by reason of the
issuance thereof, or any actions taken or duties performed, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty, or otherwise, all such
liability being expressly released and waived as a condition of and in consideration for the issuance
of the Bonds.
Section 40. CREDIT AGREEMENTS. To the extent permitted by law, the BCRUA
reserves the right to enter into Credit Agreements in connection with the Bonds, upon the written
opinion of the BCRUA Representative that such Credit Agreements are in the best interest of the
BCRt IA given the market conditions at the time. The Credit Agreements will constitute a Credit
Agreement as defined in this Resolution. Credit Agreements and the obligations thereunder may,
pursuant to their terms,constitute(i)debt secured by a pledge of the Bond Payments on parity with
the Bonds Similarly Secured (ii) debt secured by an inferior lien secured by a pledge of the Bond
Payments subordinate to the Bonds Similarly Secured or(iii) partially parity and partially inferior
lien.
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01035832,3
3l
PASSED AND ADOPTED on the 18th day of October, 2017.
BRUSHY CREEK REGIONAL
UTILITY AUTHORITY, INC.
BCRUA Representative
EXHIBIT A Definitions
EXHIBIT B— Form of Award Certificate
EXHIBIT C - Form of Bond
EXHIBIT D - Paying Agent/Registrar Agreement
EXHIBIT E - Escrow Agreement
01035832,3
[Signature Page]
EXHIBIT A
DEFINITIONS
As used in this Resolution, the following terms and expressions shall have the meanings set forth
below, unless the text in this Resolution specifically indicates otherwise.
The term Additional Bonds shall mean the obligations issued in accordance with the terms and
conditions prescribed in Section 14 hereof.
The term Annual Payments shall have the meaning given in the Contract.
The term Authorized Denominations shall mean with respect to the Bonds the denomination of
$5,000 or any integral multiple thereof.
The term Average Annual Debt Service Requirements shall mean that average amount which, at
the time of computation,will be required to pay the Debt Service Requirements on all outstanding
Bonds Similarly Secured when due (either at Stated Maturity or mandatory redemption) and
derived by dividing the total of such Debt Service Requirement by the number of Fiscal Years then
remaining before Stated Maturity of such Bonds Similarly Secured. For purposes of this
definition,a fractional period of a Fiscal Year shall be treated as an entire Fiscal Year. Capitalized
interest payments provided from Bond proceeds shall be excluded in making the aforementioned
computation.
The term Award Certificate shall mean the Certificate executed by the BCRUA Representative in
connection with the Bonds that establishes the terms of the Bonds issued pursuant to Section 3 of
this Resolution.
The term BCRUA shall mean Brushy Creek Regional Utility Authority, Inc. and any other public
agency succeeding to the powers, rights, privileges and functions of the BCRUA and, when
appropriate, the Board of Directors of the BCRUA.
The term BCRUA Project shall mean, collectively, the Land Interests and the improvements
described in the recitals to the Contract and further described in the Preliminary Design Report,
and as shown on Exhibit "D" to the Contract. Without limitation the BCRUA Project includes
the facilities, lines, intake structures, storage tanks, booster pumps and other appurtenances in the
BCRUA Project as described in the Preliminary Design Report and owned by the BCRUA
sufficient to treat the raw water and deliver the treated water to which the Cities, respectively, are
entitled under the Contract.
The term BCRUA Project Costs means and includes, without limitation, the following costs
incurred for the BCRUA Project by or on behalf of the BCRUA or the Cities: (i) the cost of
acquisition of the Land Interests, including appraisals, closing costs and title insurance policies;
(ii) the cost of acquisition, construction, repair, replacement, improvement or decommissioning of
the Facilities, and any structure, item of equipment, or other item, used for, or in connection with,
01035832,3
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the BCRUA Project; (iii) the cost of site preparation of the Land Interests, including demolition or
removal of structures and improvements as necessary or incident to accomplishing the BCRUA
Project;(iv)the cost of engineering,legal,architectural or other related services;(v)the preparation
cost of plans, specifications, studies, surveys, cost estimates, and other expenses necessary or
incident to planning, providing, or financing the BCRUA Project; (vi) the cost of machinery,
equipment, furnishings, and facilities necessary or incident to placing the BCRUA Project in
operation; (vii) finance charges and interest before, during, and after construction as permitted by
the laws of the State; (viii) costs incurred in connection with financing the BCRUA Project,
including, without limitation: (1) financing, legal, accounting, financial advisory, rating agency,
and auditing fees, expenses an disbursements; (2)the cost of printing,engraving,and reproduction
services; and (3) the cost of a trustee's or paying agent's initial or acceptance fee and subsequent
fees; (ix) all costs, fees and expenses of litigation of all kinds; (x) the cost of property casualty and
public liability insurance; (xi) the fees and costs of the Purchaser as the anticipated purchasers of
the Bonds; (xii) reimbursement of the costs previously incurred by the Cities with respect to the
BCRUA Project;and(xiii)other costs generally recognized as part of BCRUA Project construction
costs.
The term BCRUA Representative shall mean the General Manager of the BCRUA or in his or her
absence the President of the Board of BCRUA or such other person authorized by the Board to act
as a BCRUA Representative.
The term Bond Payments shall mean the payments defined as "Bond Payments" within the
Contract that the BCRUA expects to receive from the City of Leander,Texas pursuant to the terms
of the Contract.
The term Bonds shall mean and include collectively the Bonds issued and delivered pursuant to
this Resolution and the Award Certificate for the Bonds and all substitute Bonds exchanged
therefor, as well as all other substitute bonds and replacement bonds issued pursuant hereto, and
the term Bond shall mean any of the Bonds.
The term Bonds Similarly Secured shall mean the Outstanding Series 2009 Bonds,the Outstanding
Series 2017 Bonds, the Bonds issued pursuant to this Resolution and any Additional Bonds
hereafter issued by the BCRUA or bonds issued to refund any of the foregoing if issued in a manner
that provides that the refunding bonds are payable from and equally and ratably secured by a lien
on and pledge of the Bond Payments.
The term Business Day shall mean any day which is not a Saturday, Sunday, legal holiday, or a
day on which banking institutions in The City of New York, New York or in the city where the
Designated Trust Office of the Paying Agent/Registrar is located are authorized by law or executive
order to close.
The term Certified Public Accountant shall mean an independent certified public accountant or
firm of independent certified public accountants.
01035832,3
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The term Closing Date shall mean the date of physical delivery of the Bonds issued pursuant to
this Resolution for the payment in full by the Purchaser.
The term Contract shall mean the Master Contract for the Financing, Construction and Operation
of the BCRUA Regional Water Treatment and Distribution Project,dated as of September 2,2008,
as amended by the First Amendment to the Master Contract for the Financing, Construction and
Operation of the BCRUA Regional Water Treatment and Distribution Project dated as of January
22, 2009 and by the Second Amendment to the Master Contract for the Financing, Construction
and Operation of the BCRUA Regional Water Treatment and Distribution Project dated as of
October 20, 2010, and together with any additional amendments and supplements thereto (which
by the term of such instrument is designated as a supplement or amendment to such Contract).
The term Credit Agreement shall mean an insurance policy, a surety bond (including any
supporting insurance agreement), a letter or line of credit or other type of enhancement issued in
support of any Bonds Similarly Secured by a Credit Agreement Provider at the request of the
BCRUA.
The term Credit Agreement Provider shall mean (i) with respect to any Credit Agreement
consisting of a policy of municipal bond insurance or a surety bond, an issuer of policies of
insurance insuring the timely payment of scheduled debt service on governmental obligations such
as the Bonds Similarly Secured, provided that a Rating Agency having an outstanding rating on
the Bonds Similarly Secured would rate the Bonds Similarly Secured upon delivery of the Bonds
Similarly Secured fully insured by a standard policy issued by the issuer in its highest generic
rating category for such obligations; and (ii) with respect to any Credit Agreement consisting of a
letter or line of credit, any financial institution, provided that a Rating Agency having an
outstanding rating on the Bonds Similarly Secured would rate the Bonds Similarly Secured in one
of its two highest generic rating categories for such obligations if the letter or line of credit
proposed to be issued by such financial institution secured the timely payment of the entire
principal amount of the Bonds Similarly Secured and the interest thereon.
The term Debt Service Fund shall mean the special fund or account created and established by the
provisions of Section 10(a) of this Resolution.
The term Debt Service Requirements shall mean as of any particular date of computation, with
respect to any obligations and with respect to any period, the aggregate of the amounts to be paid
or set aside by the BCRUA as of such date or in such period for the payment of the principal of,
premium, if any, and interest (to the extent not capitalized) on such obligations; assuming, in the
case of obligations without a fixed numerical rate,that such obligations bear interest calculated by
(a) either(i)an interest rate equal to the average rate borne by such Bonds (or by comparable debt
in the event that such Bonds have not been outstanding during the preceding 24 months) for any
24 month period ending within 30 days prior to the date of calculation,(ii)if the Bonds bear interest
at tax-exempt rates, an interest rate equal to the 24 month average of the Index (as most recently
published in The Bond Bu er , unless such index is no longer published in The Band Buyer, in
which case the index to be used in its place shall be that index which the BCRUA Representative
determines most closely replicates such index as set forth in a certificate of a BCRUA
01035832,3
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Representative, (iii) if the Bonds bear interest at taxable rates, an interest rate equal to the rate of
the 30 day London Interbank Offered Rate, (iv) that interest rate which, in the judgment of the
BCRUA Representative, based, to the extent possible, upon an accepted market index which
corresponds with the provisions of the subject Bonds, is the average rate anticipated to be in effect
with respect to such Bonds or (v) that interest rate which, in the judgment of the BCRUA
Representative, based upon the interest rate methodology in the applicable Credit Agreement if
calculating payments under a Credit Agreement, is the average rate anticipated to be in effect; and
(b) that the debt service of such bonds is amortized such that annual debt service is substantially
level over the remaining stated life of such bonds, and further assuming in the case of obligations
required to be redeemed or prepaid as to principal prior to Stated Maturity, the principal amounts
thereof will be redeemed prior to Stated Maturity in accordance with the mandatory redemption
provisions applicable thereto.
The term Defeasance Securities shall mean(i)Federal Securities,(ii) noncallable obligations of an
agency or instrumentality of the United States of America, including obligations that are
unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the
Board adopts or approves proceedings authorizing the issuance of refunding bonds or otherwise
provides for the funding of an escrow to effect the defeasance of Bonds are rated as to investment
quality by a nationally recognized investment rating firm not less than "AAA" or its equivalent,
(iii) noncallable obligations of a state or an agency or a county, municipality, or other political
subdivision of a state that have been refunded and that, on the date the Board adopts or approves
proceedings authorizing the issuance of refunding bonds or otherwise provides for the funding of
an escrow to effect the defeasance of Bonds, are rated as to investment quality by a nationally
recognized investment rating firm no less than "AAA" or its equivalent, and (iv) any other then
authorized securities or obligations under applicable State law in existence at the time of such
defeasance that may be used to defease obligations such as the Bonds. The foregoing
notwithstanding, the BCRUA Representative may elect in the Award Certificate to modify this
definition of"Defeasance Securities" by eliminating any securities or obligations set forth in the
preceding sentence upon determining that it is in the best interests of the BCRUA to do so.
The term Depository shall mean an official depository bank of the BCRUA.
The term Designated Trust Office shall have the meaning ascribed to said term in Section 5(b) of
this Resolution.
The term DTC shall mean The Depository Trust Company,New York,New York,or any successor
securities depository.
The term DT(: Participant shall mean securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations on whose behalf DTC was created to hold
securities to facilitate the clearance and settlement of securities transactions among DTC
Participants.
01035832,3
A-a
The term Federal Securities shall mean direct, noncallable obligations of the United States of
America, including obligations that are unconditionally guaranteed by the United States of
America.
The term Fiscal Year shall mean the twelve month accounting period used by the BCRUA in
connection with the operation of the BCRUA Project,currently ending on September 30th of each
year, which may be any twelve consecutive month period established by the BCRUA, but in no
event may the Fiscal Year be changed more than one time in any three calendar year period.
The term Fitch shall mean Fitch Investors Service, L.P., its successors and their assigns, and, if
such corporation shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, Fitch shall be deemed to refer to any other nationally recognized securities
rating agency designated by the BCRUA.
The term Interest Payment Date shall mean the date semiannual interest is payable on the Bonds,
while any of the Bonds remain Outstanding as established in the Award Certificate.
The term IRS Code shall mean the Internal Revenue Code of 1986, as amended.
The term Land Interests shall mean the fee simple interests and/or the easements, right-of-way and
other interests in real property necessary for the acquisition, construction and operation of the
BCRUA Project.
The term Leander or City means the City of Leander, Texas, a home-rule municipality.
The term Leander System shall mean the combined water and wastewater system of Leander
together with all future extensions, improvements, enlargements, and additions thereto, including,
to the extent permitted by law, storm sewer and drainage and./or reclaimed water systems which
are integrated with the waterworks or wastewater disposal system, and all replacements thereof,
provided that, notwithstanding the foregoing, and to the extent now or hereafter authorized or
permitted by law, the term Leander System shall not include any waterworks or wastewater
facilities which are declared by Leander not to be a part of the Leander System and which are
hereafter acquired or constructed by Leander with the proceeds from the issuance of "Special
Facilities Bonds," which are not secured by or payable from the net revenues of the Leander
System, but which are secured by and are payable solely from special contract revenues, or
payments received from Leander or any other legal entity, or any combination thereof, in
connection with such facilities; and such revenues or payments shall not be considered as or
constitute gross revenues of the Leander System, unless and to the extent otherwise provided in
the ordinance or ordinances authorizing the issuance of such "Special Facilities Bonds."
The term Leander Utility Bonds shall mean the bonds, notes or other obligations issued by Leander
secured by a lien on and pledge of the net revenues of the Leander System or any part thereof
regardless of lien priority including such bonds, notes or other obligations now or hereafter
outstanding.
01035832;#
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The term Maintenance and Operation Expenses shall mean the expenses necessary to provide for
the administration, efficient operation and adequate maintenance of the BCRUA's System,
including the cost of purchasing water, paying necessary wages, salaries, and benefits, the
acquisition of property and materials necessary to maintain the System in good condition and to
operate it efficiently, together with such other costs and expenses as may now or hereafter be
defined by law as proper maintenance and operation expenses of the System, including Operation
and Maintenance Expenses (as defined in the Contract).
The term Maturity shall mean the date on which the principal of a Bond becomes due and payable
as therein and herein provided, whether at Stated Maturity, by redemption or otherwise.
The term Moody's shall mean Moody's Investors Service, Inc., its successors and their assigns,
and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of
a securities rating agency, Moody's shall be deemed to refer to any other nationally recognized
securities rating agency designated by the BCRUA.
The term MSRB shall mean the Municipal Securities Rulemaking Board.
The term Outstanding shall mean when used in this Resolution with respect to Bonds Similarly
Secured means, as of the date of determination, all Bonds Similarly Secured of any series issued
and delivered pursuant to this Resolution or the resolution authorizing such Bonds Similarly
Secured, as the case may be, except:
(1) those Bonds Similarly Secured canceled by the applicable Paying Agent/Registrar or
delivered to the applicable Paying AgentrRegistrar for cancellation;
(2) those Bonds Similarly Secured for which payment has been duly provided by the BCRUA
in accordance with the provisions of Section 32 of this Resolution (or similar provisions of a
resolution authorizing other Bonds Similarly Secured) by the irrevocable deposit with the Paying
Agent/Registrar, or an authorized escrow agent,of money or Defeasance Securities,or both, in the
amount necessary to fully pay the principal of,premium, if any,and interest thereon to maturity or
redemption,as the case may be,provided that, if such Bonds Similarly Secured are to be redeemed,
notice of redemption thereof shall have been duly given pursuant to this Resolution or irrevocably
provided to be given to the satisfaction of the applicable Paying Agent/Registrar, or waived; and
(3) those Bonds Similarly Secured that have been mutilated, destroyed, lost, or stolen and
replacement Bonds Similarly Secured have been registered and delivered in lieu thereof as
provided in Section 5(f) of this Resolution (or similar provisions of a resolution authorizing other
Bonds Similarly Secured).
The terms Paying AgentlRegistrar, Paying Agent or Registrar shall mean the agent selected by the
BCRUA Representative to perform such function in the Award Certificate or any successor agent
under the Paying Agent/Registrar Agreement
The term Preliminary Design Report shall mean,collectively,the following described documents:
01035832,3
A-b
(i) Treatment Plant PDR, "Brushy Creek Regional Water Treatment Plant; Preliminary Design
Report" prepared by Camp Dresser& McKee, Inc., dated July, 2008;
(ii)Raw Water PDR,"Brushy Creek Regional Water Supply Project-Phase 1 Raw Water Facilities
- Floating Intake and Raw Water Pipeline; Preliminary Design Report" prepared by Carter &
Burgess, Inc., dated October 2007;
(iii) Treated Transmission Main, Segment I PDR, "Brushy Creek Regional Utility Authority 78
inch Water Transmission Main Preliminary Engineering Report"prepared by Lockwood,Andrews
&Newman, Inc., dated May 24, 2007; and
(iv) Treated Transmission Main, Segment 2C PDR, "Preliminary Engineering Report - Treated
Water Transmission Line Segment 2C"prepared by K. Friese& Associates, Inc.,dated September
2007.
The term Purchaser shall mean the Texas Water Development Board.
The term Rating Agencies shall mean S&P,Moody's and/or Fitch according to which of such rating
agencies then rates the Bonds Similarly Secured of the applicable series; and provided that if no
such rating agency then rates any series of Bonds Similarly Secured of such series,the term"Rating
Agency" shall refer to any national rating agency (if any) which provides such rating.
The term Record Date shall mean, with respect to the Bonds, the Business Day of each month as
set forth in the Award Certificate.
The term Registration Books shall mean the books or records relating to the registration, payment
and transfer or exchange of the Bonds maintained by the Paying Agent/Registrar pursuant to
Section 5 of this Resolution.
The term Registered Owner shall mean the entity or person in whose names any of the Bonds are
registered in the Registration Books.
The term Resolution shall mean this resolution adopted by the Board on , 2017.
The term Rule shall mean SEC Rule 15c2-12, as amended from time to time.
The term S&P shall mean S&P Global Ratings, its successors and their assigns, and, if such
corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities
rating agency, S&P shall be deemed to refer to any other nationally recognized securities rating
agency designated by the BCW 'A.
The term SEC.'shall mean the[United States Securities and Exchange Commission.
01035832,3
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The term Series 2009 Bonds shall mean the "Brushy Creek Regional Utility Authority, Inc. City
of Leander, Texas Contract Revenue Bonds, (Brushy Creek Regional Water Treatment and
Distribution Project), Series 2009"
The term Series 2017 Bonds shall mean the "Brushy Creek Regional Utility Authority, Inc. City
of Leander, Texas Contract Revenue Bonds, (Brushy Creek Regional Water Treatment and
Distribution Project), Series 2017"
The term Special Project Bonds shall mean obligations which the BCRUA expressly reserves the
right to issue in Section 15 of this Resolution.
The term State shall mean the State of Texas.
The term Stated Maturity shall mean,when used with respect to the Bonds, the scheduled maturity
or mandatory sinking fund redemption date of a series of the Bonds.
01035$32,3
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EXHIBIT B
AWARD CERTIFICATE
01035832;3
AWARD CERTIFICATE OF THE BCRUA REPRESENTATIVE
COUNTIES OF WILLIAMSON AND TRAVIS §
STATE OF TEXAS §
The undersigned, Tom Gallier, General Manager, acting as the BCRUA Representative of
the Board of Directors of the Brushy Creek Regional Utility Authority, Inc. (the "BCRUA"), in
connection with "A Resolution by the Board of Directors of the Brushy Creek Regional Utility
Authority, Inc.Authorizing the Issuance of"Brushy Creek Regional Utility Authority, Inc. City of
Leander, Texas Contract Revenue Bonds (Brushy Creek Regional Water Treatment and
Distribution Project)"; Establishing the Procedures for Selling and Delivering the Bonds and
Resolving Other Matters Incident and Relating to the Issuance, Payment, Security, Sale, and
Delivery of Such Bonds" (the "Bond Resolution") adopted by the BCRUA on October 18, 2017,
do hereby certify the following:
I. Capitalized terms not otherwise defined herein have the meaning assigned in the
Bond Resolution.
2. This certificate is executed for and on behalf of the BCRUA and for the benefit of
the Attorney General of the State of Texas and the Texas Water Development Board (the
"Purchaser")as the purchaser of the bonds entitled "Brushy Creek Regional Utility Authority, Inc.
City of Leander, Texas Contract Revenue Bonds (Brushy Creek Regional Water Treatment and
Distribution Project), Series 2017," in the aggregate principal amount of$8,130,000 (the "Series
2017 Bonds") authorized by the Bond Resolution.
3. This certificate is the Award Certificate of the BCRUA Representative as required
by Section 3 of the Bond Resolution.The City Council of the City of Leander,Texas has approved
the Bond Resolution in accordance with Section 3(b)of the Bond Resolution.
4. The Series 2017 Bonds are hereby sold to the Purchaser at a purchase price of
$8,130,000. Pursuant to Section 3(c)of the Bond Resolution,the Series 2017 Bonds are being sold
on a private placement basis pursuant to a loan commitment received from the Purchaser to assure
that the Series 2017 Bonds are sold on the terms most advantageous for the BCRUA. The terms
of the Series 2017 Bonds are in the BCRUA's best interest. The terms of the Series 2017 Bonds
are further shown in Exhibit "A".
5. Proceeds of the Series 2017 Bonds are collectively in an amount sufficient to
finance the City's contribution to the construction and equipment of the BCRUA Project (as
defined in the Bond Resolution) and to pay the costs of issuing the Series 2017 Bonds.
6. In consultation with, and reliance upon the advice of the financial advisor for the
BCRUA, I hereby find that the terms of sale are the most advantageous reasonably available on
the date and time of the pricing of the Series 2017 Bonds given the then existing market conditions
and the terms of sale on such date and time.
01035832,3
7. The price to be paid by the Purchaser of the Series 2017 Bonds is not less than 98%
of the aggregate original principal amount thereof plus accrued interest to the date of delivery of
the Series 2017 Bonds.None of the Series 2017 Bonds bear interest at an interest rate greater than
the maximum authorized by law. Additionally,all of the requirements of Sections 2(a)and 2(b) of
the Bond Resolution have been met.
8. The Series 2017 Bonds shall (i) mature in the years and in the principal amounts
and be subject to redemption as set forth in Exhibit "A", (ii) bear interest at the rates for each such
maturity and such interest shall be payable on the dates set forth in Exhibit "A" and in the Bond
Resolution, and (iii) have the other terms and provisions,all as provided in Exhibit "A" and in the
Bond Resolution. Each Series 2017 Bond shall reflect the terms set forth in Exhibit "A" and the
provisions in the Form of Bond set forth in the Bond Resolution.
9. The Record Date for the interest payable on the Series 2017 Bonds on any interest
payment date means the close of business on the fifteenth day of the month preceding such interest
payment date.
10. The Private Placement Memorandum, dated October , 2017, has been received
by the undersigned and is hereby approved and deemed final as of its date (subject to the
permissible omissions described in Rule 15c2-12) and the preparation and distribution of the final
Private Placement Memorandum is hereby approved.
11. Pursuant to Section 30 of the Bond Resolution, the BCRUA agrees to provide
annually to the MSRB, in an electronic format as prescribed by the MSRB, the updated financial
information and operating data to the extent specified,by the times,subject to the exceptions noted,
and as provided in the Bond Resolution and the Private Placement Memorandum under the caption
"CONTINUING DISCLOSURE OF INFORMATION."
12. Pursuant to Section 5(a) of the Bond Resolution, The Bank of New York Mellon
Trust Company, N.A., Dallas, Texas, has been selected as the Paying Agent/Registrar for the
Series 2017 Bonds. Pursuant to Section 10(c) of the Bond Resolution, The Bank of New York
Mellon Trust Company,N.A., Dallas, Texas, has been selected as the Escrow Agent for the Series
2017 Bonds.
13. The Initial Bond will be registered in the name of Cede & Co.
[The Remainder of this Page is Intentionally Left Blank]
01035832,3 2
EXECUTED this 0J bV- a-7 12017.
BRUSHY CREEK REGIONAL UTILITY
AUTHORITY, INC.
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BCRUA Representative
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Signature Page
EXHIBIT A
TERMS OF THE SERIES 2017 BONDS
$8,130,000
BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC.
CITY OF LEANDER, TEXAS CONTRACT REVENUE BONDS
(BRUSHY CREEK REGIONAL WATER TREATMENT
AND DISTRIBUTION PROJECT),
SERIES 2017
GENERAL DESCRIPTION OF SERIES 2017 BONDS
The Series 2017 Bonds in the aggregate original principal amount of$8,130,000 will be
issued as serial bonds dated November 16, 2017, in the original principal amounts for each
maturity, maturing on the dates, bearing interest at the rates as set forth in the following Maturity
Schedule.
MATURITY SCHEDULE
Interest accrues from: Issuance Date
Interest payable: February 1 and August I until maturity or redemption commencing February 1, 2018
Principal Maturity Interest Principal Maturity Interest
Amount (August 1 Rate Amount (August 1 Rate
$400,000 2018 0.580% $400,000 2028 1.510%
$365,000 2019 0.630% $405,000 2029 1.680%
$370,000 2020 0.700% $410,000 2030 1.830%
$370,000 2021 0.780% $420,000 2031 1.980%
$375,000 2022 0.900% $425,000 2032 2.060%
$375,000 2023 1.010% $435,000 2033 2.130%
$380,000 2024 1.100% $445,000 2034 2.180%
$385,000 2025 1.210% $455,000 2035 2.220%
$385,000 2026 1.290% $465,000 2036 2.260%
$390,000 2027 1.370% $475,000 2037 2.290%
REDEMPTION PROVISIONS
Optional Redemption. On August 1,2027,or on any date thereafter,the Series 2017 Bonds
maturing on or after August 1, 2028 may be redeemed prior to their scheduled maturities, at the
option of the BCRUA,with funds derived from any available and lawful source,at par plus accrued
A-t
interest to the date fixed for redemption in whole or in part, only in inverse order of the maturities
outstanding at the time of such redemption, and if less than all of a maturity is to be redeemed the
Paying Agent/Registrar shall determine by lot the Bonds, or portions thereof within such maturity
to be redeemed (provided that a portion of a Bond may be redeemed only in integral multiples of
$5,000 of principal amount).
A-2
EXHIBIT C
FORM OF BOND
All blanks and any appropriate or necessa insertions or deletions to be completed as
determined by the BCRUA Representative in the Award Certificate.)
REGISTERED REGISTERED
NO. AMOUNT
UNITED STATES OF AMERICA
STATE OF TEXAS
BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC.
CITY OF LEANDER,TEXAS CONTRACT REVENUE BONDS
(BRUSHY CREEK REGIONAL WATER TREATMENT AND DISTRIBUTION
PROJECT)
SERIES
ISSUANCE DATE: STATED MATURITY INTEREST RATE: CUSIP No.:
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
The Brushy Creek Regional Utility Authority, Inc. (the"BCRUA"),a non-profit corporation of the
State of Texas, with its principal office in Round Rock,Texas, for value received, hereby promises
to pay to the order of the Registered Owner specified above, or the registered assigns thereof, on
the Stated Maturity date specified above,the Principal Amount specified above(or so much thereof
as shall not have been paid upon prior redemption), and to pay interest on the unpaid principal
amount hereof from the Issuance Date, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, to the earlier of redemption or Stated Maturity, at the
per annum rate of interest specified above computed on the basis of a 360-day year of twelve
30-day months; such interest being payable on and • of each year
commencing __. ___ .._
Principal and premium, if any, of this Bond shall be payable to the Registered Owner hereof(the
"Holder")upon presentation and surrender,at a corporate trust office of the Paying Agent/Registrar
As provided in the Award Certificate To the extent that the Award Certificate relating to the Bonds is inconsistent with any provisions in this
Form of Bond or contains information to complete missing information in this Form of Bond,the language in the Award Certificate shall be used
to the executed Bonds
01035832,3
C`-]
executing the registration certificate appearing hereon or a successor thereof. Interest shall be
payable to the Holder of this Bond(or one or more Predecessor Bonds,as defined in the Resolution
hereinafter referenced) whose name appears on the Security Register maintained by the Paying
Agent/Registrar at the close of business on the Record Date, which is the * day of the
month next preceding each interest payment date. All payments of principal of and interest on
this Bond shall be in any coin or currency of the United States of America which at the time of
payment is legal tender for the payment of public and private debts. In addition, interest may be
paid by such other method, acceptable to the Texas Water Development Board, or such other
Registered Owner, requested by, and at the risk and expense, of the Registered Owner; provided,
however, that if this Bond is owned by the Texas Water Development Board, interest will be paid
by wire transfer or other method acceptable to the Texas Water Development Board,and there will
be no charge.
This Bond is one of the series specified in its title issued in the aggregate principal amount of
$ * (the "Bonds") pursuant to a resolution adopted by the governing body of the
BCRUA (the "Resolution"), to pay: (i) LEANDER'S SHARE OF THE COSTS OF
CONSTRUCTING, ACQUIRING, IMPROVING AND�OR EXPANDING THE BCRUA
PROJECT INCLUDING BUT NOT LIMITED TO EXPANDING THE FLOATING RAW
WATER INTAKE AND THE WATER TREATMENT PLANT, RIGHTS-OF-WAY AND
OTHER INTERESTS IN LAND OR OTHER FACILITIES NECESSARY FOR THE
WITHDRAWAL, DIVERSION DELIVERY, TRANSMISSION AND TREATMENT OF RAW
WATER ALL AS DESCRIBED IN THE PRELIMINARY DESIGN REPORT AND (ii) THE
COSTS OF ISSUANCE OF THE BONDS.
The Bonds stated to mature on and after may be redeemed prior to their Stated
Maturities,at the option of the BCRUA, on or on any date thereafter, in whole or in
part, and, if in part,the BCRUA shall in inverse order of maturity select and designate the maturity
or maturities in principal amounts of$5,000 or any integral multiple thereof(and if within a Stated
Maturity selected at random and by lot by the Paying Agemilkegistrar) at the redemption price of
par,together with accrued interest to the date of redemption,and upon thirty(30)days prior written
notice being given by United States mail, first-class postage prepaid,to Holders of the Bonds to be
redeemed, and subject to the terms and provisions relating thereto contained in the Resolution.
If this Bond is subject to redemption prior to Stated Maturity and is in a denomination in excess of
$5,000, portions of the principal sum hereof in installments of $5,000 or any integral multiple
thereof may be redeemed, and, if less than all of the principal sum hereof is to be redeemed, there
shall be issued, without charge therefor, to the Holder hereof, upon the surrender of this Bond to
the Paying Agent,'Registrar at its corporate trust office, a new Bond or Bonds of like Stated
Maturity and interest rate in any authorized denominations provided in the Resolution for the then
unredeemed balance of the principal sum hereof.
As provided in the Award Certificate To the extent that the Award Certificate relating to the Bonds is inconsistent with any provisions in this
Form of Bond or contains information to complete missing mformat.on to this Form of Bond,the language in the Award Certificate shall be used
in the executed Bonds
01035832;3
C-7.
If this Bond(or any portion of the principal sum hereof)shall have been duly called for redemption
and notice of such redemption duly given,then upon such redemption date this Bond(or the portion
of the principal sum hereof to be redeemed) shall become due and payable, and, if money for the
payment of the redemption price and the interest accrued on the principal amount to be redeemed
to the date of redemption is held for the purpose of such payment by the Paying Agent/Registrar,
interest shall cease to accrue and be payable hereon from and after the redemption date on the
principal amount hereof to be redeemed. If this Bond is called for redemption, in whole or in part,
the BCRUA or the Paying Agent/Registrar shall not be required to issue,transfer,or exchange this
Bond within forty-five (45) days of the date fixed for redemption; provided, however, such
limitation of transfer shall not be applicable to an exchange by the Holder of the unredeemed
balance hereof in the event of its redemption in part.
The Bonds of this series are special obligations of the BCRUA payable from and equally and
ratably secured solely by a lien on and pledge of the Bond Payments received by the BCRUA from
the City of Leander, Texas pursuant to the provisions of the Contract. In the Resolution, the
BCRUA reserves and retains the right to issue Additional Bonds, without limitation as to principal
amount but subject to any terms,conditions, or restrictions set forth in the Resolution or as may be
applicable thereto under law or otherwise. The Bonds do not constitute a legal or equitable pledge,
charge, lien, or encumbrance upon any property of the BCRUA or BCRUA Project, except with
respect to the Bond Payments. The Bonds are not obligations of the State of Texas.
The Holder hereof shall never have the right to demand payment of this obligation out of any funds
raised or to be raised by taxation.
Reference is hereby made to the Resolution,copies of which are on file in the corporate trust office
of the Paying Agent/Registrar, and to all of the provisions of which the Holder by his acceptance
hereof hereby assents, for definitions of terms; the description and nature of the Special Payments
pledged for the payment of the Bonds; the terms and conditions under which the BCRUA may
issue Additional Bonds;the terms and conditions relating to the transfer or exchange of the Bonds;
the conditions upon which the Resolution may be amended or supplemented with or without the
consent of the Holders; the rights, duties, and obligations of the BCRUA and the Paying
AgentiRegistrar; the terms and provisions upon which this Bond may be redeemed or discharged
at or prior to the Stated Maturity thereof,and deemed to be no longer Outstanding thereunder; and
for the other terms and provisions specified in the Resolution. Capitalized terms used herein have
the same meanings assigned in the Resolution.
This Bond, subject to certain limitations contained in the Resolution, may be transferred on the
Registration Books upon presentation and surrender at a corporate trust office of the Paying
Agent'Registrar, duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Paying Agent/Registrar duly executed by the Holder hereof, or his duly
authorized agent, and thereupon one or more new fully registered Bonds of the same Stated
Maturity,of authorized denominations, bearing the same rate of interest,and of the same aggregate
principal amount will be issued to the designated transferee or transferees.
01035832,3
C-3
The BCRUA and the Paying Agent/Registrar,and any agent of either, shall treat the Holder hereof
whose name appears on the Security Register (i) on the Record Date as the owner hereof for
purposes of receiving payment of interest hereon, (ii) on the date of surrender of this Bond as the
owner hereof for purposes of receiving payment of principal hereof at its Stated Maturity, or its
redemption, in whole or in part, and (iii) on any other date as the owner hereof for all other
purposes, and neither the BCRUA nor the Paying Agent/Registrar, or any such agent of either,
shall be affected by notice to the contrary. In the event of a non-payment of interest on a scheduled
payment date, and for thirty (30) days thereafter, a new record date for such interest payment (a
"Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for
the payment of such interest have been received from the BCRUA. Notice of the Special Record
Date and of the scheduled payment date of the past due interest (the "Special Payment Date" -
which shall be fifteen(15)days after the Special Record Date)shall be sent at least five(5)business
days prior to the Special Record Date by United States mail, first-class postage prepaid, to the
address of each Holder appearing on the Security Register at the close of business on the last
business day next preceding the date of mailing of such notice.
It is hereby certified, covenanted, and represented that all acts, conditions, and things required to
be performed,exist, and be done precedent to the issuance of this Bond in order to render the same
a legal, valid, and binding special obligation of the BCRUA have been performed, exist, and have
been done, in regular and due time, form, and manner, as required by law, and that issuance of the
Bonds does not exceed any constitutional or statutory limitation; and that due provision has been
made for the payment of the principal of and interest on the Bonds by a lien on and pledge of the
Bond Payments and as otherwise provided in this Resolution. In case any provision in this Bond
or any application thereof shall be deemed invalid, illegal, or unenforceable, the validity, legality,
and enforceability of the remaining provisions and applications shall not in any way be affected or
impaired thereby. The terms and provisions of this Bond and the Resolution shall be construed in
accordance with and shall be governed by the laws of the State of Texas.
IN WITNESS WHEREOF, the Board of the BCRUA has caused this Bond to be duly executed
with the manual or facsimile signature of the President of the Board and countersigned with the
manual or facsimile signature of the Secretary of the Board, and has caused the official seal of the
BCRUA to be duly impressed, or placed in facsimile, on this Bond.
BRUSHY CREEK REGIONAL
UTILITY AUTHORITY, INC.
President, Board of Directors
ATTESTED:
Secretary, Board of Directors
01035$32;#
CA
(SEAL)
C. Form of Registration Certificate of Comptroller of Public Accounts to Appear on Initial
Bond Only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER OF § REGISTER NO.
PUBLIC ACCOUNTS §
THE STATE OF TEXAS §
I HEREBY CERTIFY that this Bond has been examined, certified as to validity and approved by
the Attorney General of the State of Texas, and duly registered by the Comptroller of Public
Accounts of the State of Texas.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
D. Form of Certificate of Paying Agent/Registrar to Appear on Definitive Bonds Only.
This Bond has been duly issued under the provisions of the within-mentioned Resolution;the Bond
or Bonds of the above-entitled and designated series originally delivered having been approved by
the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts,
as shown by the records of the Paying Agent/Registrar.
Registered this date:
as Paying Agent/Registrar
As provided in the Award Certificate. To the extent that the Award Certificate relating to the Bonds is inconsistent with any provisions in this
Form of Bond or contains information to complete missing information in this Form of Bond,the language in the Award Certificate shall be used
in the executed Bonds
01035832;3
By:
Authorized Signature
E. Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto
(Print or typewrite name, address, and zip code of transferee):
(Social Security or other identifying number):
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration
thereof, with full power of substitution in the premises.
DATED:
NOTICE: The signature on this assignment must correspond with the name of the registered
owner as it appears on the face of the within Bond in every particular.
Signature guaranteed:
F. The Initial Bond of each series shall be in the form set forth-in paragraph B of this Section,
except that the form of a single fully registered Initial Bond shall.be.modified as follows:
i) immediately under the name of the Bond(s) the headings "Interest Rate" and "Stated
Maturity" shall both be completed "as shown below";
ii) the first two paragraphs shall read as follows:
Registered Owner:
Principal Amount: _
The Brushy Creek Regional Utility Authority, Inc.(the"BCRUA"),a non-profit corporation of the
State of Texas, with its principal office located in Round Rock, Texas, for value received, hereby
promises to pay to the order of the Registered Owner named above, or the registered assigns
thereof, the Principal Amount specified above on the . ` day of • in each of the
As provided in the Award Certificate To the extent that the Award Certificate relating to the Bonds is inconsistent with any provisions in this
Form of Bond or contains information to complete missing information in this Form of Bond,the language in the Award Certificate shall he used
in the executed Bonds.
01035$32,3
C-b
years and in principal installments and bearing interest at per annum rates in accordance with the
following schedule:
ISSUANCE STATED INTEREST
DATE: MATURITY: RATE:
(Information to be inserted from Award Certificate).
(or so much thereof as shall not have been paid upon prior redemption) and to pay interest on the
unpaid Principal Amount hereof from the •, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, to Stated Maturity or prior
redemption, at the per annum rates of interest specified above computed on the basis of a 360-day
year of twelve 30-day months; such interest being payable on • and +,
commencing • (the"Interest Payment Date").
Principal and premium, if any, of this Bond shall be payable to the Registered Owner hereof(the
Holder), upon its presentation and surrender, at a corporate trust office of *,
*, * (the "Paying Agent/Registrar"). Interest shall be payable to the
Holder of this Bond whose name appears on the Security Register maintained by the Paying
Agent/Registrar at the close of business on the Record Date,which is the fifteenth day of the month
next preceding each interest payment date. All payments of principal of and interest on this Bond
shall be in any coin or currency of the United States of America which at the time of payment is
legal tender for the payment of public and private debts. Interest shall be paid by the Paying
Agent/Registrar by check sent on or prior to the appropriate date of payment by United States mail,
first-class postage prepaid, to the Holder hereof at the address appearing in the Security Register
or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk
and expense of, the Holder hereof.
iii) initial Bond shall be numbered "T-1."
G. insurance Legend. If an insurance policy is obtained by the Purchaser or the BCRUA for
any Bonds, the definitive Bonds and the Initial Bond shall bear an appropriate legend as provided
by the Insurer.
As provided in the Award Certificate To the extent that the Award Certificate relating to the Bonds is inconsistent with any provisions in this
Form of Bond or contains information to complete missing information in this Form of Bond,the language to the Award Certificate shall be used
in the executed Bonds
01035832,3
C-7
EXHIBIT D
PAYING AGENTIREGISTRAR AGREEMENT
01035832;3
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of November 16, 2017 (this "Agreement"), by and
between the Brushy Creek Regional Utility Authority, Inc. (the"Issuer"), a non-profit corporation
created by and acting on behalf of the Cities of Cedar Park, Texas, Leander, Texas and Round
Rock, Texas, and The Bank of New York Mellon Trust Company, N.A., a banking corporation
duly organized and existing under the laws of the United States of America (the "Bank").
RECITALS
WHEREAS,the Issuer has duly authorized and provided for the issuance of its$1,830,000
Brushy Creek Regional Utility Authority, Inc. City of Leander, Texas Contract Revenue Bonds
(Brushy Creek Regional Water Treatment and Distribution Project),Series 2017(the"Securities"),
such Securities to be issued in fully registered form only as to the payment of principal and interest
thereon; and
WHEREAS, the Securities are scheduled to be delivered to the initial purchasers thereof
on or about November 16, 2017; and
WHEREAS, the Issuer has selected the Bank to serve as Paying Agent/Registrar in
connection with the payment of the principal of, premium, if any, and interest on the Securities
and with respect to the registration,transfer and exchange thereof by the registered owners thereof;
and
WHEREAS,the Bank has agreed to serve in such capacities for and on behalf of the Issuer
and has full power and authority to perform and serve as Paying Agent/Registrar for the Securities;
NOW,THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01. Appointment.
The Issuer hereby appoints the Bank to serve as Paying Agent with respect to the Securities.
As Paying Agent for the Securities,the Bank shall be responsible for paying on behalf of the Issuer
the principal,premium(if any), and interest on the Securities as the same become due and payable
to the registered owners thereof, all in accordance with this Agreement and the "Resolution"
(hereinafter defined).
The Issuer hereby appoints the Bank as Registrar with respect to the Securities. As
Registrar for the Securities, the Bank shall keep and maintain for and on behalf of the Issuer books
and records as to the ownership of the Securities and with respect to the transfer and exchange
thereof as provided herein and in the "Resolution."
O W35043
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and
Registrar for the Securities.
Section 1.02. Compensation.
As compensation for the Bank's services as Paying Agent/Registrar, the Issuer hereby
agrees to pay the Bank the fees and amounts set forth in Schedule A attached hereto for the first
year of this Agreement and thereafter the fees and amounts set forth in the Bank's current fee
schedule then in effect for services as Paying Agent/Registrar for political subdivisions, which
shall be supplied to the Issuer on or before 90 days prior to the close of the Fiscal Year of the
Issuer,and shall be effective upon the first day of the following Fiscal Year.
In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Bank in accordance with any of
the provisions hereof(including the reasonable compensation and the expenses and disbursements
of its agents and counsel).
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions.
For all purposes of this Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
"Bank Office" means the designated office for payment of the Bank as indicated on the
signature page hereof. The Bank will notify the Issuer in writing of any change in location of the
Bank Office.
"Financial Advisor" is FirstSouthwest, a Division of Hilltop Securities Inc.
"Fiscal Year" means the fiscal year of the Issuer, ending September 30.
"Holder" and "Security Holder" each means the Person in whose name a Security is
registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written request or order signed in the name
of the Issuer by an authorized representative, delivered to the Bank.
"Legal Holiday" means a day on which the Bank is required or authorized to be closed.
"Person" means any individual, corporation, partnership,joint venture, association,joint
stock company, trust, unincorporated organization or government or any agency or political
subdivision of a government.
01035832.3 2
"Predecessor Securities" of any particular Security means every previous Security
evidencing all or a portion of the same obligation as that evidenced by such particular Security
(and,for the purposes of this definition,any mutilated, lost,destroyed,or stolen Security for which
a replacement Security has been registered and delivered in lieu thereof pursuant to Section 4.06
hereof and the Resolution).
"Redemption Date" when used with respect to any Bond to be redeemed means the date
fixed for such redemption pursuant to the terms of the Resolution.
"Resolution"means the Resolutions of the governing body of the Issuer pursuant to which
the Securities are issued, certified by the Secretary of the Board or any other officer of the Issuer
and delivered to the Bank.
"Responsible Officer" when used with respect to the Bank means the Chairman or Vice-
Chairman of the Board of Directors, the Chairman or Vice-chairman of the Executive Committee
of the Board of Directors,the President,any Vice President,the Secretary,any Assistant Secretary,
the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or
Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar
to those performed by any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Security Register" means a register maintained by the Bank on behalf of the Issuer
providing for the registration and transfer of the Securities.
"Stated Maturity" means the date specified in the Resolution on which the principal of a
Security is scheduled to be due and payable.
Section 2.02. Other Definitions.
The terms"Bank," Issuer,"and"Securities(Security)"have the meanings assigned to them
in the recital paragraphs of this Agreement.
The term "Paying Agent'Registrar" refers to the Bank in the performance of the duties and
functions of this Agreement.
ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Paving Agent.
As Paying Agent, the Bank shall, provided adequate collected funds have been provided to
it for such purpose by or on behalf of the Issuer no later than 10:00 a.m. Central Time on the
applicable payment date, pay on behalf of the Issuer the principal of each Security at its Stated
W 035837._3 3
Maturity or Redemption Date,to the Holder upon surrender of the Security to the Bank at the Bank
Office,
As Paying Agent, the Bank shall, provided adequate collected funds have been provided to
it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer no later than 10:00
a.m. Central Time on the applicable payment date, the interest on each Security when due, by
computing the amount of interest to be paid each Holder and preparing and sending checks by
United States Mail, first-class postage prepaid, on each payment date, to the Holders of the
Securities(or their Predecessor Securities)on the respective Record Date,to the address appearing
on the Security Register or by such other method, acceptable to the Bank, requested in writing by
the Holder at the Holder's risk and expense.
Principal and interest payments made pursuant to this Section 3.01 shall be made by wire
transfer.
Section 3.02. Payment Dates.
The Issuer hereby instructs the Bank to pay the principal of and interest on the Securities
on the dates specified in the Resolution.
Section 3.03 Reporting Requirements.
To the extent required by the internal Revenue Code of 1986, as amended, or the Treasury
Regulations, the Bank shall report to or cause to be reported to the Holders and the Internal
Revenue Service the amount of interest paid or the amount treated as interest accrued on the
Securities which is required to be reported by the Holders on their returns of federal income tax.
ARTICLE FOUR
REGISTRAR
Section 4.01. Security Register-Transfers and Exchanges.
The Bank agrees to keep and maintain for and on behalf of the Issuer at the Bank Office
books and records (herein sometimes referred to as the "Security Register"), and, if the Bank
Office is located outside the State of Texas, a copy of such books and records shall be kept in the
State of Texas, for recording the names and addresses of the Holders of the Securities,the transfer,
exchange and replacement of the Securities and the payment of the principal of and interest on the
Securities to the Holders and containing such other information as may be reasonably required by
the Issuer and subject to such reasonable regulations as the Issuer and the Bank may prescribe.
The Bank also agrees to keep a copy of the Security Register within the State of Texas. All
transfers, exchanges and replacement of Securities shall be noted in the Security Register.
Every Security surrendered for transfer or exchange shall be duly endorsed or be
accompanied by a written instrument of transfer, the signature on which has been guaranteed by
an officer of a federal or state bank or a member of the National Association of Securities Dealers,
01035832;3 4
in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly authorized
in writing.
The Bank may request any supporting documentation it feels necessary to effect a re-
registration, transfer or exchange of the Securities.
To the extent possible and under reasonable circumstances,the Bank agrees that, in relation
to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof will be
completed and new Securities delivered to the Holder or the assignee of the Holder in not more
than three (3) business days after the receipt of the Securities to be cancelled in an exchange or
transfer and the written instrument of transfer or request for exchange duly executed by the Holder,
or his duly authorized agent, in form and manner satisfactory to the Paying Agent/Registrar.
Section 4.02. Certificates.
The Issuer shall provide an adequate inventory of printed Securities certificates to facilitate
transfers or exchanges thereof. The Bank covenants that the inventory of printed Securities
certificates will be kept in safekeeping pending their use, and reasonable care will be exercised by
the Bank in maintaining such Securities certificates in safekeeping, which shall be not less than
the level of care maintained by the Bank for debt securities of other political subdivisions or
corporations for which it serves as registrar, or that it maintains for its own securities.
Section 4.03. Form of Security Register.
The Bank, as Registrar, will maintain the Security Register relating to the registration,
payment, transfer and exchange of the Securities in accordance with the Bank's general practices
and procedures in effect from time to time. The Bank shall not be obligated to maintain such
Security Register in any form other than those which the Bank has currently available and currently
utilizes at the time.
The Security Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
Section 4.04. List of Securily Holders.
The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the
required fee, a copy of the information contained in the Security Register. The Issuer may also
inspect the information contained in the Security Register at any time the Bank is customarily open
for business, provided that reasonable time is allowed the Bank to provide an up-to-date listing or
to convert the information into written form.
The Bank will not release or disclose the contents of the Security Register to any person
other than to, or at the written request of, an authorized officer or employee of the Issuer, except
upon receipt of a court order or as otherwise required by law. Upon receipt of a court order or
other notice of a legal proceeding and prior to the release or disclosure of any of the contents of
01035832,3 5
the Security Register, the Bank will notify the Issuer so that the Issuer may contest the same or
such release or disclosure of the contents of the Security Register.
Section 4.05. Return of Cancelled Certificates.
The Bank will, at such reasonable intervals as it determines, surrender to the Issuer,
Securities in lieu of which or in exchange for which other Securities have been issued, or which
have been paid.
Section 4.06. Mutilated, Destroyed, Lost or Stolen Securities.
The Issuer hereby instructs the Bank,subject to the applicable provisions of the Resolution,
to deliver and issue Securities certificates in exchange for or in lieu of mutilated, destroyed, lost,
or stolen Securities certificates as long as the same does not result in an overissuance.
In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank, in its
discretion, may execute and deliver a replacement Security of like form and tenor, and in the same
denomination and bearing a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or
stolen Security,only after(i)the filing by the Holder thereof with the Bank of evidence satisfactory
to the Bank of the destruction, loss or theft of such Security, and of the authenticity of the
ownership thereof and (ii) the furnishing to the Bank of indemnification in an amount satisfactory
to hold the Issuer and the Bank harmless. All expenses and charges associated with such
indemnity and with the preparation, execution and delivery of a replacement Security shall be
borne by the Holder of the Security mutilated,or destroyed, lost or stolen.
Section 4.07. Transaction Information to Issuer.
The Bank will, within a reasonable time after receipt of written request from the Issuer,
furnish the Issuer information as to the Securities certificates it has paid pursuant to Section 3.01,
Securities certificates it has delivered upon the transfer or exchange of any Securities certificates
pursuant to Section 4.01, and Securities certificates it has delivered in exchange for or in lieu of
mutilated, destroyed, lost, or stolen Securities certificates pursuant to Section 4.06.
ARTICLE FIVE
THE BANK
Section 5.01. Duties of Bank.
The Bank undertakes to perform the duties set forth herein and agrees to use reasonable
care in the performance thereof.
The Bank is authorized to transfer funds relating to the closing and initial delivery of the
Securities in the manner disclosed in the closing memorandum as prepared by the Issuer's
Financial Advisor or other agent. The Bank may act on a facsimile or e-mail transmission of the
W.C.358R,3 6
closing memorandum acknowledged by the Issuer, the Issuer's Financial Advisor or other agent
as the final closing memorandum. The Bank shall not be liable for any losses, costs or expenses
arising directly or indirectly from the Bank's reliance upon and compliance with such instructions.
Section 5.02. Reliance on Documents, Etc.
(a) The Bank may conclusively rely, as to the truth of the statements and correctness
of the opinions expressed therein, on certificates or opinions furnished to the Bank by the Issuer.
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proven that the Bank was negligent in ascertaining the
pertinent facts.
(c) No provisions of this Agreement shall require the Bank to expend or risk its own funds
or otherwise incur any financial liability for performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is
not assured to it.
(d) The Bank may rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, note, security, or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties. Without limiting the generality of the
foregoing statement, the Bank need not examine the ownership of any Securities, but is protected
in acting upon receipt of Securities certificates containing an endorsement or instruction of transfer
or power of transfer which appears on its face to be signed by the Holder or an agent of the Holder.
The Bank shall not be bound to make any investigation into the facts or matters stated in a
resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, note, security, or other paper or document supplied by the Issuer.
(e) The Bank may consult with legal counsel, and the written advice of such counsel or
any opinion of counsel shall be full and complete authorization and protection with respect to any
action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon, provided
that any such written advice or opinion is supplied to the Issuer by the Bank.
(f) The Bank may exercise any of the powers hereunder and perform any duties hereunder
either directly or by or through agents or attorneys of the Bank.
Section 5.03. Recitals of Issuer.
The recitals contained herein with respect to the Issuer and in the Securities shall be taken
as the statements of the Issuer, and the Bank assumes no responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security,
or any other Person for any amount due on any Security from its own funds.
G:05833,3 7
Section 5.04. May Hold Securities.
The Bank, in its individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with the Issuer with the same rights it would have if it were not
the Paying Agent/Registrar, or any other agent.
Section 5.05. Moneys Held by Bank.
The Bank shall deposit any moneys received from the Issuer into a segregated account to
be held by the Bank solely for the benefit of the owners of the Securities to be used solely for the
payment of the Securities, with such moneys in the account that exceed the deposit insurance
available to the Issuer by the Federal Deposit Insurance Corporation,to be fully collateralized with
securities or obligations that are eligible under the laws of the State of Texas to secure and be
pledged as collateral for such accounts until the principal and interest on such securities have been
presented for payment and paid to the owner thereof. Payments made from such account shall be
made by check drawn on such account unless the owner of such Securities shall,at its own expense
and risk, request such other medium of payment.
Subject to the Unclaimed Property Law of the State of Texas, any money deposited with
the Bank for the payment of the principal, premium (if any), or interest on any Security and
remaining unclaimed for three years after the final maturity of the Security has become due and
payable will be paid by the Bank to the Issuer if the Issuer so elects,and the Holder of such Security
shall hereafter look only to the Issuer for payment thereof,and all liability of the Bank with respect
to such monies shall thereupon cease. If the Issuer does not elect, the Bank is directed to report
and dispose of the funds in compliance with Title Six of the Texas Property Code, as amended.
Section 5.06. Indemnification.
To the extent permitted by law, the Issuer agrees to indemnify the Bank for, and hold it
harmless against, any loss, liability, or expense incurred without negligence or bad faith on the
Bank's part, arising out of or in connection with the Bank's acceptance or administration of its
duties hereunder, including the cost and expense incurred by the Bank in defending against any
claim or from liability imposed on the Bank in connection with the Bank's exercise or performance
of any of its powers or duties under this Agreement.
Section 5.07. Interpleader.
The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim,
demand, or controversy over its person as well as funds on deposit, in either a Federal or State
District Court located in the Travis County, Texas, and agree that service of process by certified
or registered mail, return receipt requested, to the address referred to in Section 6.03 of this
Agreement shall constitute adequate service. The Issuer and the Bank further agree that the Bank
has the right to file a Bill of Interpleader in any court of competent jurisdiction in Travis County,
Texas to determine the rights of any Person claiming any interest herein.
010358323 8
Section 5.08. Depository Trust Company Services.
It is hereby represented and warranted that, in the event the Securities are otherwise
qualified and accepted for "Depository Trust Company" services or equivalent depository trust
services by other organizations, the Bank has the capability and, to the extent within its control,
will comply with the "Operational Arrangements," effective August I, 1987, which establishes
requirements for securities to be eligible for such type depository trust services, including, but not
limited to, requirements for the timeliness of payments and funds availability, transfer turnaround
time, and notification of redemptions and calls.
Attached hereto is a copy of the Blanket Issuer letter of Representations between the Issuer
and The Depository Trust Company,New York,New York, providing for the Bonds to be issued
in a Book-Entry Only System. The Bank and the Issuer hereby confirm their obligations under
such Letter of Representation.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01. Amendment.
This Agreement may be amended only by an agreement in writing signed by both of the
parties hereto.
Section 6.02. Assignment.
This Agreement may not be assigned by either party without the prior written consent of
the other.
Section 6.03. Notices.
Any request, demand, authorization, direction, notice, consent, waiver, or other document
provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed or
delivered to the Issuer or the Bank, respectively, at the addresses shown on the signature page of
this Agreement.
Section 6.04. Effect of Headings.
The Article and Section headings herein are for convenience only and shall not affect the
construction hereof.
Section 6.05. Successors and Assigns.
All covenants and agreements herein by the Issuer and the Bank shall bind their respective
successors and assigns, whether so expressed or not.
01 A35832.3 9
Section 6.06. Severability.
In case any provision herein shall be invalid, illegal,or unenforceable,the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 6.07. Benefits of Agreement.
Nothing herein, express or implied, shall give to any Person, other than the parties hereto
and their successors hereunder, any benefit or any legal or equitable right, remedy, or claim
hereunder.
Section 6.05. Entire Agreement.
This Agreement and the Resolution constitute the entire agreement between the parties
hereto relative to the Bank acting as Paying Agent/Registrar and if any conflict exists between this
Agreement and the Resolution, the Resolution shall govern.
Section 6.09. Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be
deemed an original and all of which shall constitute one and the same Agreement.
Section 6.10. Termination.
This Agreement will terminate on the date of final payment by the Bank of the principal of
and interest on the Securities to the Holders thereof.
This Agreement may be earlier terminated upon 30 days written notice by either party;
provided, however, that this Agreement may not be terminated (i) by the Bank until a successor
Paying AgentiRegistrar that is a national or state banking institution and a corporation or
association organized and existing under the laws of the United States of America or of any state
which possesses trust powers and is subject to supervision or examination by a federal or state
regulatory agency has been appointed by the Issuer and has accepted such appointment, or(ii) at
any time during which such termination might, in the judgment of the Issuer, disrupt, delay, or
otherwise adversely affect the payment of the principal, premium, if any, or interest on the
Securities. Prior to terminating this Agreement, the Issuer may reasonably require the Bank to
show that such termination will not occur during a period described in (ii) above.
The resigning Paying Agent/Registrar may petition any court of competent jurisdiction for
the appointment of a successor Paying Agent/Registrar if an instrument of acceptance by a
successor Paying Agent/Registrar has not been delivered to the resigning Paying Agent/Registrar
within 30 days after the giving of such notice of resignation.
01035832,3 10
Upon an early termination of this Agreement, the Bank agrees to promptly transfer and
deliver the Security Register (or a copy thereof), together with other pertinent books and records
relating to the Securities,to the successor Paying Agent/Registrar designated and appointed by the
Issuer. The Bank agrees that no termination fee or other charge not specifically provided for in
this Agreement will be due or payable by the Issuer in connection with any early termination of
this Agreement.
Section 6.11. Governing Law.
This Agreement shall be construed in accordance with and governed by the laws of the
State of Texas.
[The remainder of this page is intentionally left blank.]
01035832,3 11
IN WITNESS WHEREOF,the parties hereto have executed this Agreement as of the day
and year first above written.
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.
By: _
Title:
Mailing Address: The Bank of New York Mellon
Trust Company, N.A.
2001 Bryan Street, 10`h Floor
Dallas, Texas 75201
01035832,3 [SIGNATURE PAGE]
BRUSHY CREEK REGIONAL
UTILITY AUTHORITY, INC.
By:
Title: BCRUA Representative
Address:
221 East Main Street
Round Rock, Texas 78664
01035832,3 [SIGNATURE PAGE]
SCHEDULE A
Paying Agent/Registrar Fee Schedule
01035632,3
EXHIBIT E
ESCROW AGREEMENT
01035832;3
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (Agreement), made by and between Brushy Creek
Regional Utility Authority, a political subdivision of the State of Texas in Travis and Williamson
Counties, Texas, (Authority), acting by and through its General Manager and The Bank of New
York Mellon Trust Company,N.A.,as Escrow Agent together with any successor in such capacity;
WITNESSETH:
WHEREAS, pursuant to a Resolution finally adopted on October 18, 2017 (Resolution),
the Brushy Creek Regional Utility Authority authorized the issuance of$8,130,000 Brushy Creek
Regional Utility Authority, Inc., City of Leander, Texas Contract Revenue Bonds (Brushy Creek
Regional Water Treatment and Distribution Project), Series 2017, dated November 16, 2017
(Obligations) to obtain financial assistance from the Texas Water Development Board (TWDB)
for the purpose of funding water or wastewater system improvements (Project); and
WHEREAS, the Escrow Agent is a state or national bank designated by the Texas
Comptroller as a state depository institution in accordance with Texas Government Code,Chapter
404, Subchapter C,or is a designated custodian of collateral in accordance with Texas Government
Code, Chapter 404, Subchapter D and is otherwise qualified and empowered to enter into this
Agreement, and hereby acknowledges its acceptance of the terms and provisions hereof; and
WHEREAS,a condition of the Obligations is the deposit of the proceeds of the Obligations
(Proceeds) in escrow subject to being withdrawn only with the approval of the Executive
Administrator or another designated representative; provided, however, the Proceeds can be
transferred to different investments so long as all parties hereto consent to such transfer;
NOW, THEREFORE, in consideration of the mutual agreements herein contained and in
consideration of the amount of fees to be paid by the Authority to the Escrow Agent, as set forth
on EXHIBIT A, the receipt of which is hereby acknowledged, and in order to secure the delivery
of the Obligations, the parties hereto mutually undertake, promise and agree for themselves, their
respective representatives and successors, as follows:
SECTION 1: ESCROW ACCOUNT(S). Upon the delivery of the Obligations
described above, the Proceeds identified under TWDB Commitment Number(s) L17081 shall be
deposited to the credit of special escrow account(s)or escrow subaccount(s)(Escrow Account(s))
maintained at the Escrow Agent on behalf of the Authority and the TWDB and shall not be
commingled with any other accounts or with any other proceeds or funds. The Proceeds received
by the Escrow Agent under this Agreement shall not be considered as a banking deposit by the
Authority, and the Escrow Agent shall have no right to title with respect thereto except as Escrow
Agent under the terms of this Agreement.
The Escrow Account(s) shall be entitled "Brushy Creek Regional Utility Authority, City
of Leander Contract Revenue Bonds,Texas Water Development Board L17081 Escrow Account"
01035832,3
and shall not be subject to warrants,drafts,or checks drawn by the Authority but shall be disbursed
or withdrawn to pay the costs of the Project for which the Obligations were issued or other
purposes in accordance with the Resolution and solely upon written authorization from the
Executive Administrator or his/her designated representative. The Escrow Agent shall provide to
the Authority and to the TWDB the Escrow Account(s) bank statements upon request.
SECTION 2: COLLATERAL. All cash deposited to the credit of such Escrow
Account(s) and any accrued interest in excess of the amounts insured by the FDIC and remaining
uninvested under the terms of this Agreement shall be continuously secured by a valid pledge of
direct obligations of the United States of America or other collateral meeting the requirements of
the Public Funds Collateral Act, Texas Government Code, Chapter 2257.
SECTION 3: INVESTMENTS. While the Proceeds are held in escrow,the Escrow Agent
shall only invest escrowed Proceeds in investments that are authorized by the Public Funds
Investment Act, Texas Government Code, Chapter 2256 (PFIA). It is the Authority's
responsibility to direct the Escrow Agent to invest all public funds in a manner that is consistent
not only with the PFIA but also with its own written investment policy.
SECTION 4: DISBURSEMENTS. The Escrow Agent shall not honor any disbursement
from the Escrow Account(s), or any portion thereof, unless and until it has been supplied with
written approval and consent by the Executive Administrator or his/her designated representative.
However, no written approval and consent by the Executive Administrator shall be required if the
disbursement involves transferring Proceeds from one investment to another within the Escrow
Account(s) provided that all such investments are consistent with the PFIA requirements.
SECTION 5: UNEXPENDED FUNDS. Any Proceeds remaining unexpended in the
Escrow Account(s) after completion of the Project and after the final accounting has been
submitted to and approved by the TWDB shall be disposed of pursuant to the provisions of the
Resolution. The Authority shall deliver a copy of such TWDB approval of the final accounting
to the Escrow Agent together with instructions concerning the disbursement of unexpended
Proceeds hereunder. The Escrow Agent shall have no obligation to ensure that such unexpended
Proceeds are used as required by the provisions of the Resolution,that being the sole obligation of
the Authority.
SECTION 6: CERTIFICATIONS. The Escrow Agent shall be authorized to accept and
rely upon the certifications and documents furnished to the Escrow Agent by the Authority and
shall not be liable for the payment of any funds made in reliance in good faith upon such
certifications or other documents or approvals, as herein recited.
SECTION 7: LIABILITY OF ESCROW AGENT. To the extent permitted by law,the
Escrow Agent shall not be liable for any act done or step taken or omitted by it or any mistake of
fact or law, except for its negligence or default or failure in the performance of any obligation
imposed upon it hereunder. The Escrow Agent shall not be responsible in any manner for any
proceedings in connection with the Obligations or any recitation contained in the Obligations.
01o3583z;3
2
SECTION 8: RECORDS. The Escrow Agent will keep complete and correct books of
record and account relating to the receipts,disbursements,allocations and application of the money
deposited to the Escrow Account,and investments of the Escrow Account and all proceeds thereof.
The records shall be available for inspection and copying at reasonable hours and under reasonable
conditions by the Authority and the TWDB.
SECTION 9: MERGER/CONSOLIDATION. In the event that the Escrow Agent
merges or consolidates with another bank or sells or transfers substantially all of its assets or
corporate trust business, then the successor bank shall be the successor Escrow Agent without the
necessity of further action as long as the successor bank is a state or national bank designated by
the Texas Comptroller as a state depository institution in accordance with Texas Government
Code, Chapter 404, Subchapter C, or is a designated custodian of collateral in accordance with
Texas Government Code Chapter 404, Subchapter D. The Escrow Agent must provide the
TWDB with written notification within 30 days of acceptance of the merger, consolidation, or
transfer. If the merger, consolidation or other transfer has occurred between state banks, the
newly-created entity shall forward the certificate of merger or exchange issued by the Texas
Department of Banking as well as the statement filed with the pertinent chartering authority, if
applicable, to the TWDB within five business days following such merger, consolidation or
exchange.
SECTION 10: AMENDMENTS. This Agreement may be amended from time to time
as necessary with the written consent of the Authority and the TWDB, but no such amendments
shall increase the liabilities or responsibilities or diminish the rights of the Escrow Agent without
its consent.
SECTION 11: TERMINATION. In the event that this Agreement is terminated by
either the Authority or by the Escrow Agent, the Escrow Agent must report said termination in
writing to the TWDB within five business days of such termination. The Authority is responsible
for ensuring that the following criteria are satisfied in selecting the successor escrow agent and
notifying the TWDB of the change in escrow agents: (a) the successor escrow agent must be an
FDIC-insured state or national bank designated by the Texas Comptroller as a state depository;(b)
the successor escrow agent must be retained prior to or at the time of the termination; (c)an escrow
agreement must be executed by and between the Authority and the successor escrow agent and
must contain the same or substantially similar terms and conditions as are present in this
Agreement; and (d)the Authority must forward a copy of the executed escrow agreement with the
successor escrow agent within five business days of said termination. No funds shall be released
by the TWDB until it has received, reviewed and approved the escrow agreement with the
successor escrow agent. If the Authority has not appointed a successor escrow agent within thirty
(30) days of the notice of termination, the Escrow Agent may petition any court of competent
jurisdiction in Texas for the appointment of a successor escrow agent or for other appropriate
relief, and any such resulting appointment shall be binding upon the Authority. Whether
appointed by the Authority or a court, the successor escrow agent and escrow agreement must be
approved by the TWDB for the appointment to be effective. The Escrow Agent is responsible for
performance under this Agreement until a successor has been approved by the TWDB and has
signed an acceptable escrow agreement.
01035832;3
i
SECTION 12: EXPIRATION. This Agreement shall expire upon final transfer of the
funds in the Escrow Account(s)to the Authority.
SECTION 13: POINT OF CONTACT. The points of contact for the Escrow Agent
and the TWDB are as follows:
The Bank of New York Trust Company Jeff Walker
2001 Bryan Street, 10" Floor Executive Administrator
Dallas, Texas 75201 Texas Water Development Board
(214) 580-1226 1700 North Congress Avenue
Beverly.F:vans(�t'jbrnymellon.com Austin, Texas 78701
Seth,Cron6�bynmeIlon.com
SECTION 14: CHOICE OF LAW. This Agreement shall be governed exclusively by
the applicable laws of the State of Texas. Venue for disputes shall be in the District Court of Travis
County, Texas.
SECTION 15: ASSIGNABILITY. This Agreement shall not be assignable by the
parties hereto, in whole or in part,and any attempted assignment shall be void and of no force and
effect.
SECTION 16: ENTIRE AGREEMENT. This Agreement evidences the entire Escrow
Agreement between the Escrow Agent and the Authority and supersedes any other agreements,
whether oral or written,between the parties regarding the Proceeds or the Escrow Account(s). No
modification or amendment of this Agreement shall be valid unless the same is in writing and is
signed by the Authority and consented to by the Escrow Agent and the TWDB.
SECTION 17: VALIDITY OF PROVISIONS. If any term, covenant, condition or
provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the provisions shall remain in full force and effect and shall in no
way be affected, impaired or invalidated thereby.
SECTION 18: COMPENSATION FOR ESCROW SERVICES. The Escrow Agent
shall be entitled to compensation for its services as stated in Exhibit A, which compensation shall
be paid by the Authority but may not be paid directly from the Escrow Account(s).
0!035832;3
4
IN WITNESS WHEREOF,the parties hereto have executed this Agreement effective upon
signature of both parties.
BRUSHY CREEK REGIONAL UTILITY AUTHORITY
By:
Authorized Representative
Date:
Address: 221 East Main Street
Round Rock, Texas 78664
(SEAL)
THE BANK OF NEW YORK MELLON TRUST COMPANY,N.A.,
as Escrow Agent
By:
Title:
Date:
Address:
(Bank Seal)
01035832,3 [SIGNATURE PAGE]
EXHIBIT A
Fee Schedule
01035832,3
DATE: October 16, 2017
SUBJECT: BCRUA Board Meeting—October 18, 2017
ITEM: 5B. Consideration and action on a Resolution by the Board of Directors of the Brushy Creek
Regional Utility Authority, Inc.,authorizing the issuance of"Brushy Creek Regional Utility
Authority, Inc.City of Leander,Texas Contract Revenue Bonds (Brushy Creek Regional
Water Treatment and Distribution Project)";establishing the procedures for selling and
delivering the Bonds and resolving other matters incident and relating to the issuance,
payment,security,sale and delivery of such Bonds.
PRESENTER: Tom Gallier,General Manager