BCURA_R-17-02-15-8A RESOLUTION NO. R-17-02-15-8A
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 REFUNDING 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 FEBRUARY 15, 2017
00970513;1
RESOLUTION NO. R-17-02-1"A
RESOLUTION BY THE BOARD OF DIRECTORS OF THE BRUSHY
CREEK REGIONAL UTILITY AUTHORITY, INC. AUTHORIZING THE
ISS( ANCE OF -BRUSHY CREEK REGIONAL UTILITY AUTHORITY,
INC. CITY OF LEANDER, TEXAS CONTRACT REVENUE REFUNDING
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,AICD DELIVERY OF SUCH BONDS
TABLE OF CONTENTS
Page
PREAMBLE ..................................................... . ..................... . . .. . . .. . ... ... ... ...... .... .... ......1
Section 3. DEFINITION .........................................................................................................3
Section 2, AMOUNT, PURPOSE ATPD DESIGN ATION OF THE BONDS .........................3
(a) Amount and Designation.............................. ... ........ .. .... ... ...... .... . .......3
(b) Purpose......................................................................................................... ..3
Section 3. DATE, DENOMINATIONS, NUMBERS, MATURITIES, AND
TERMS OF BONDS--....... . . . ... .... .......................... .. . . ... . .. ...........
(a) Terms of the Bonds.........................................................................................3
(b) Award Certificate....................................... ............... ...................................3
(c) Sale of(he Bonds ............................................................................................4
(d) In General............... . .. .. .. ... ....... .. . .. .. ... ... . .. . ... ... .... ..... ..... ...........5
Section4. rNTERE T...............................................................................................................5
Section 5. REGISTRATION, TRANSFER, AND EXCHANGE; AUTHENTICATION
AND B OOK-EN TR Y-ON L Y SYSTEM................ ................................................5
(a) Paying Agent/Registrar..................... . . . ........... . .. . . .. .... .... ................_
(b) Registration Books...... . . .. . ... . .. .... ... ... ... ... .......................................5
(c) Ownership of Bonds . .... ................ ...............................................................
(d) Payment of Bonds and Interest.......................................................................
(e) Authentication............................................................ ............. ....... . . .........
(0 Transfer, Exchange or Replacement,..............,. . .. ..... ............. .... .... .........6
(g) Substitute Paying gent/Registrar.. . . ... . ... . . .. . .......................................
(h) Book-Entry-Only System—... .. ... ... ... ....................................,....
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(i) Successor Securities Depository; Transfers Outside
Book-Entry-Only ......................................................................
{1) Payments to Cede & Co. .... .......... ...............................................................
(k) Notice of Redemption.....................................................................................9
1) Conditional Notice of Redemption...............................................................10
Section 6. FORA OF BOND_....... .............. ........... ..........................10
Section 7. PLEDGE OF BOND PAYMENTS . ..... ..... ................... .....................................10
(a) Pledge....................................................................... ......___...... . . .... ...10
(b) Perfection of Pledge......................................................................................11
Section 8, RATES AND CHARGES .....................................................................................11
Section 9. DISTRIBUTION OF BOND PAYMENTS...........................................................1 I
Section 10. RESERVE FUND; [DEBT SER ICE FUN D........................................................11
(a) E1 mrve Fund ........................................................................... .......... .........l 1
(b) Required Reserve Amount............................................................................12
(c) Principal and Interest ....................................................................................1'2
(d) Additional Deposit......... ..................... .......... .......... ...... .......1
(e) Substitution . . ... .... ... ... ... . . . . ... . .. .. . .. . .. .... .. ... . .. .. . ... . . . . ..13
(f) Credit Agreernent..........................................................................................13
(8) Excess Funds.............................................................................. ..................15
(h) Debt Service Fund...........................................................,,............................15
Section 11. DEFICIENCIES - EXCESS BOND PAYMENTS.......................... ......... ........16
(a) Deficiencies...................................................................................................1
(b) Excess Bond Payments.-.. .................................. .. ... . .. ........................ .. .16
Section 12. PA YM ENT OF BONDS............................................................. ..........................16
Section 13. INVESTMENTS....................................................................................................16
Section 14, ISSUANCE OF ADDITIONAL BONDS ... .. . .. .. . .. . ..... .. .................. .........1
Section 15. SPECIAL PROJECT 13ONDS...............................................................................17
Section 16. MAINTENANCE OF BCRUA PROJECT—INSURANCE.................................17
Section 17. RECORDS ATT ACCOUNTS — ANNUAL AUDIT...........................................1
Section 18. SALE OR ENCUMBRANCE OF BCRUA PROJECT ........................................11�
Section 19. COMPETITION ...................................................................... . . ............ .... ....19
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Section 20. SPECIAL COVENANTS.....-....._...., 19
(a) Title............... ........... ................... ............... ...................... ...... ........... .....19
(b) Liens. ... . ..... . ....... .... . . ........................................... . .... .................... ....19
(c) Performance..................................................................................................19
(d) I,egal Authority.............................................................................................19
(e) Rudget...........................................................................................................1
(1) Permits.......................................................................................................... 0
Section 21. 1,1M1TFD OBL1 AT[ON S OF THF, Bc'RUA........................................ ..... .......20
Section 22. DEFAULT AND REMEDIES............................. ................ ..... .... ..... ..... .... ...20
(a) Events of Default ........................................... ..............................................20
b) Remedies for Event of Default .....................................................................20
(c) Remedies Not Exclusive........._._....-.............. ...... ..... ......... ..... .... ......21
Section 23. AMENDMENT OF RESOLUTION .....................................................................21
(a) Amendments Without Consent.—___............................__...............__ 1
(b) Amendments With Consent................................................................. ... ...22
(c) Notice...................................................................................... ........... .... ...22
(d) Receipt of Consents................ .............. ......_._.... ................ ................_23
(e) Effect of Amendments..................................................................................23
(0 Consent Irrevocable.. .... ..... .. . .................................................................23
(g) Ownership.-..................................... .. . .. ...................... . ...........................23
(h) Insurer Consent............................................................................................. 3
Section 24. COVENANTS REGARDrNG TAX-EXEMPTION N F INTEREST
ON THE TAS{-I:XEMPT BONDS........................................................................24
(a) Covenants......................................................................................................24
(b) Rebate Account..... ........_ ......____2
(c) Proceeds.......................................... .......... ..... ......... . ... ..... .... ... ....25
(d) Disposition of Project ...............................................................
............,...,..,2C
(e) Taxable Bonds ..............................................................................................26
Section 25. RESOLUTION TO CONSTITUTE A CONTRACT; EQUAL SECURITY........26
Section 26. SEVERABILITY OF INVALID PROVISIONS...................................................2
Section 27. PAYMENT AND PERFOR2�,I N E ON BUSINESS DAMS .26
Section 28, LIMITATION OF BENEFITS WITH RESPECT TO THE RESOLUTI ON......_27
Section 29. CUSTODY, APPROVAL, BOND COUNSEL'S OPINION, CUSIP NUMBERS,
PREAMBLE AND INSURANCE........................................................................ 27
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Section 30. COMPLIANCE WITH RULE 15 c2-12.................................................................27
(a) Annual Reports.............................................................................................27
(b) Certain Event Notices.......................................................................—.........
28
(c) Limitations, Disclaimers, and Amendments,................................................29
(d) Subsequent Amendments........... ......... .....................................30
Section 31. APPLICAT[ N OF BOND PROCEEDS ... .... .... ................................ ..............30
Section 32. DEFEASANCE PROVIS .............................................................................31
Section 33. ESCROW AGREEMENT; RLDEM PTION OF REFUNDED BLIGAT'IONS;
OFFICIAL STATEMENT............... ...----................ ............--.....................32
(a) Escrow Agreement........................................................................................3
(b) Redemption Prior to Maturity of Refunded Obligations..............................32
(c) Purchase of Escrow gecuri#ies.. . ... . ... . .......................................-----32
(J) Offiscial #atement.........................................................................................33
Section 34. FURTHER ................33
Section 35. APPROVAL OF PROFESSIONAL CONTRACT ...............................................33
Section 36. DTC LETTER.OF RFPRE ENTATION.. ......---. . . . . .... . ... .. ....... . ... . ......33
Section 37. BOND INSURANCE............................................................................................33
Section A REPEAL OF CONFLICTING RESOLUTIONS ..................................................34
Section 39. PUBLIC NOTICE..................................................................................................34
Section 40. NO PERSONAL LIABILITY ...... ............ .... .... ................ . ...................... .......34
Section 41. CREDITAGREEMENTS.....................................................................................34
EXHIBIT A DEFINITIONS ....................................................................................................A-1
EXHIBIT B FORA OF BOND................................................................................................B-1
EXHIBIT C PAYING AGENTIREGISTRAR AGREEMENT................................... ...... ....C-1
EXHIBIT D ESCROW AGREEMENT...................................................................................D-1
EX141BIT E CONTINUTNG DISCLOSURE OF INFORMATION........... ............................E-1
EXHIBIT F FORM OF AWARD CERT1F[CATE ... . ... .... .... ............................................F-1
00970513,1 iv
RESOLUTION NO. R-17-02-15-8A
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 REFUNDING
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 has previously issued 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 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 February 12, 2009
(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
009705 k 3A 1
WHEREAS, the BCRUA has previously issued its "Brushy Creek Regional Utility
Authority, Inc. City of Leander, Texas Contract Revenue Bonds (Brushy Creek Regional Water
Treatment and Distribution Project), Series 2009," in the aggregate original principal amount of
$91,180,000 (the "Series 2009 Bonds") pursuant to the Contract to finance Leander's share of
the first phase of the BCRUA Project; and
WHEREAS, the BCRUA deems it advisable and in the best interest of the BCRUA to
refund those Series 2009 Bonds designated by the BCRUA Representative (as defined in Exhibit
"A" attached hereto) to be refunded (the "Refunded Obligations"), in order to achieve a net
present value debt service savings of not less than 3.0% of the principal amount of the Refunded
Obligations net of any contribution with such savings, among other information and terms to be
included in an award certificate to be executed by the BCRUA Representative, all in accordance
with the provisions of the Authority Act; and
WHEREAS, the Authority Act authorizes the BCRUA to issue refunding bonds and to
deposit the proceeds from the sale thereof together with any other available funds or resources,
directly with a place of payment (paying agent) for the Refunded Obligations or with a trust
company or commercial bank that does not act as depository for the BCRUA, and such deposit,
if made before such payment dates, shall constitute the making of firm banking and financial
arrangements for the discharge and final payment of the Refunded Obligations; and
WHEREAS, the BCRUA is further authorized to enter into an escrow agreement with a
paying agent for the Refunded Obligations or with a trust company or commercial bank that does
not act as depository for the BRUA with respect to the safekeeping, investment, reinvestment,
administration and disposition of any such deposit, upon such terms and conditions as the
BCRUA and such escrow agent may agree, provided that such deposits may be invested and
reinvested in authorized escrow securities pursuant to the terms of the resolution authorizing the
Refunded Obligations and State law; and
WHEREAS, all the Refunded Obligations mature or are subject to redemption prior to
maturity within 20 years of the date of the bonds hereinafter authorized: 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:
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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 REFUNDING BONDS, SERIES 2017 (BRUSHY CREEK
REGIONAL WATER TREATMENT AND DISTRIBUTION PROJECT)" and are hereby
authorized to be issued and delivered in an aggregate maximum principal amount not to exceed
$88,175,000. 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 February 15,
2018. Bonds priced on or before February 15, 2018 may close after such date.
(b) Purpose. The Bonds are to be issued for the purpose of: (i) refunding the Refunded
Obligations and (ii) paying 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, which may be in the form of
Current Interest Bonds or Premium Compound interest Bonds, numbered consecutively from R-
1 upward, in the case of Current Interest Bonds, and from PC-1 upward, in the case of Premium
Compound Interest Bonds (except the initial Bond delivered to the Attorney General of the State
of Texas which shall be numbered T -1 and TPC-1 respectively), payable to the respective initial
Registered Owners thereof in an Authorized Denomination, maturing not later than August 1,
2038, 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 pursuant
to subsection (b) below.
(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, determining which of the Refundable Obligations shall be refunded and
constitute Refunded Obligations under this Resolution and carrying out the other procedures
specified in this Resolution, including determining and fixing the Bonds as Taxable Bonds or
Tax-Exempt Bonds, 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 Current Interest Bonds and Premium Compound Interest 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 and the refunding of the Refunded
Obligations, 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 "F"; provided that (i) the
40970513,1 3
price to be paid for the Bonds shall not be less than 90% of the aggregate original principal
amount thereof plus accrued interest, if any, thereon from its date to its delivery, (ii) none of the
Bonds shall bear interest at a rate, or yield in the case of Premium Compound Interest Bonds,
greater than the maximum authorized by law and (iii) the refunding must produce a net present
value debt service savings of at least 3.0% of the principal amount of the Refunded Obligations,
net of any contribution. 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
method of sale and final terms and conditions of the Bonds as set forth in this Resolution is, and
the decisions made by the 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 on a negotiated, placement or competitive basis as determined by the
BCRUA Representative in the Award Certificate. In determining whether to sell the Bonds by a
negotiated, placement or competitive sale, the BCRUA Representative shall take into account the
financial condition of the BCRUA, any material disclosure issues which might exist at the time,
the market conditions expected at the time of the sale and any other matters which, in the
judgment of the BCRUA Representative, might affect the net borrowing costs on the Bonds.
If the BCRUA Representative determines that the Bonds should be sold at a competitive
sale, the BCRUA Representative shall cause to be prepared a notice of sale and official statement
in such manner as the BCRUA Representative deems appropriate, to make the notice of sale and
official statement available to those institutions and firms wishing to submit a bid for the Bonds,
to receive such bids, and to sell the Bonds to the bidder submitting the best bid in accordance
with the provisions of the notice of sale.
If the BCRUA Representative determines that the Bonds should be sold by a negotiated
sale or placement, the BCRUA Representative shall designate the placement purchaser or the
senior managing underwriter for the Bonds and such additional investment banking firms as the
BCRUA Representative deems appropriate to assure that the Bonds are sold on the most
advantageous terms. The BCRUA Representative, acting for and on behalf of the Board, is
00970513,1 4
authorized to enter into and carry out a bond purchase contract or other agreement for the Bonds
to be sold by negotiated sale or placement at such price, with and subject to such terms as
determined by the BCRUA Representative pursuant to subsection (b) above.
(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 scaled, 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 "B" 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 Current Interest 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 Current Interest
Bond in the manner provided and on the dates stated in the FORM OF BOND set forth in Exhibit
"B" to this Resolution and the Award Certificate.
The Premium Compound Interest Bonds shall bear interest from the Issuance Date,
calculated on the basis of a 360-day year composed of twelve 30-day months (subject to
rounding to the Compounded Amounts thereof), compounded on the Compounding Dates as set
forth in the Award Certificate, and payable, together with the principal amount thereof, in the
manner provided in the Form of Bonds at the rates set forth in the Award Certificate. Attached to
the Award Certificate, if Premium Compound Interest Bonds are to be issued, shall be the
Accretion Table. The Accreted Value with respect to any date other than a Compounding Date is
the amount set forth on the Accretion Table with respect to the last preceding Compounding
Date, plus the portion of the difference between such amount and the amount set forth on the
Accretion Table with respect to the next succeeding Compounding Date that the number of days
(based on 30-day months) from such last preceding Compounding Date to the date for which
such determination is being calculated bears to the total number of days (based on 30-day
months) from such last preceding Compounding Date to the next succeeding Compounding
Date.
Section 5. REGISTRATION,TRANSFER, AND EXCHANGE; AUTHENTICATION;
BOOK-ENTRY-ONLY SYSTEM. (a) Paying AgentlRegistrar. 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 "C" 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
00470513.1 5
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 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 AGENT/REGIS'I RAR'S
AUTHENTICATION CERTIFICATE (the "Authentication Certificate"). The Authentication
Certificate shall be in the form set forth in the FORM OF BOND in Exhibit"B" 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 AgeWRegistrar, 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
"B" to this Resolution, in any Authorized Denomination (subject to the requirement hereinafter
00970513;1
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 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 "B" 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 1241.063, 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.
00970513;1 7
(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 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 Agent/Registrar 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 initial purchasers thereof 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
AgentlRegistrar 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
AgentlRegistrar 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
009'..-05 1.5;1 8
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, 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 36 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.
0) 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
Agent/Registrar shall also send a notice of prepayment or redemption to the Registered Owner of
any Bond who has not sent the Bonds in for redemption sixty (60) days after the redemption
00970513;1 9
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 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.
(1) 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
"B", 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 shall 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 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
00970513;I 10
the Debt Service Requirements on the Bonds Similarly Secured for any lawful purpose in
accordance with this Resolution and the Contract.
(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 BCRUA 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 BCRUA such payments shall be further deposited into the Debt Service
Fund as required by this Resolution.
Section 10. RESERVE FUND; DEBT SERVICE FUND. (a) Reserve Fund. If all of the
outstanding Series 2009 Bonds are refunded and defeased with the issuance of the Bonds, then the
Award Certificate shall specify whether a Reserve Fund is required and such requirements. if any,
but if any of the Series 2009 Bonds remain outstanding with the issuance of the Bonds, then the
following Reserve Fund requirements [including subsections (b) through (g)] shall apply: 'there is
hereby created and there shall be established and maintained on the books and records of the
BCRUA, and accounted for separate and apart from all other funds of the BCRUA, a special fund to
be entitled the "Brushy Creek Regional Utility Authority, Inc. City of Leander, Texas Contract
00970513:1 11
Revenue Bonds (Brushy Creek Regional Water Treatment and Distribution Project) Reserve Fund"
(hereinafter called the "Reserve Fund"). The Reserve Fund shall be used solely for the purpose of
finally retiring the last of any Bonds or Additional Bonds Outstanding, or for paying when due the
principal of and interest on any Bonds or Additional Bonds when and to the extent the amounts in the
Debt Service Fund are insufficient for such purpose.
(b) Required Reserve Amount. Initially, the Required Reserve Amount shall be funded from
Bond Payments in equal monthly installments over the initial sixty (60) months following the
issuance of the Bonds. Thereafter, no further deposits shall be made into the Reserve Fund as long as
the money and investments, together with any Reserve Fund Obligations, in the Reserve Fund are at
least equal in market value to the Required Reserve Amount; but if and whenever the market value of
money and investments, together with any Reserve Fund Obligations, in the Reserve Fund is reduced
below said Required Reserve Amount because of a decrease in market value of investments, then the
BCRUA shall require Leander to increase payments under the Contract as soon as practicable, and in
all events by the end of the next Fiscal Year, in an amount sufficient to restore the Reserve Fund to
the Required Reserve Amount; and in the event the Reserve Fund is used to pay the principal of or
interest on the Bonds or Additional Bonds because of insufficient amounts being available in the
Debt Service Fund, then the BCRUA shall require Leander to increase payments under the Contract
in an amount sufficient to restore the Reserve Fund to the Required Reserve Amount in market value,
and from such increased payments the BCRUA shall deposit in the Reserve Fund, in approximately
equal periodic installments, not less than annual, such amounts as are required to restore the Reserve
Fund to the Required Reserve Amount in market value as soon as practicable, but in any case, within
thirty-six (36) months from any date of the use of the Reserve Fund to pay such principal or interest.
For purposes of calculating the amount on hand in the Reserve Fund, an amount equal to the
maximum available amount which may be drawn under any Reserve Fund Obligation, as described
in (0 below, will be deemed on deposit in the Reserve Fund. During any period in which the money
and investments credited to the Reserve Fund, taking into account any Reserve Fund Obligation, are
equal to or exceed the Required Reserve Amount in market value then during such period all
investment earnings and income from the Reserve Fund shall be deposited upon receipt to the credit
of the Debt Service Fund.
(c) Principal and Interest. The Reserve Fund shall be used only for the purpose of paying
principal of or interest on the Bonds or Additional Bonds when there is not sufficient money
available in the Debt Service Fund for such payments, and shall be used finally to pay, redeem or
retire the last of the Outstanding Bonds or Additional Bonds.
(d) Additional Deposit, The Reserve Fund shall secure and be used to pay all Bonds or
Additional Bonds, in the manner and to the extent provided herein. However, each resolution
pursuant to which any Bonds or Additional Bonds are issued shall provide and require that (i) the
aggregate amount to be accumulated and maintained in the Reserve Fund shall be increased (if and to
the extent necessary) to the Required Reserve Amount required after the issuance of such additional
Bonds or Additional Bonds; and (ii) the required additional amount, if any, shall be so accumulated
by the deposit in the Reserve Fund of all of said required additional amount in cash or a Reserve
Fund Obligation immediately after the delivery of the then proposed Bonds or Additional Bonds.
(e) Substitution. Notwithstanding any other provisions of this Resolution, an equivalent
00970513;1 12
Reserve Fund Obligation may be substituted by the BCRUA at any time and from time to time for all
or any part of the money and/or investments held for the credit of the Reserve Fund, and such money
and/or investments maybe withdrawn and used for any lawful purpose, provided, however, that to the
extent such funds were derived from the proceeds of Bonds or Additional Bonds, such funds may
only be withdrawn and either (i) deposited into the Debt Service Fund or (ii) applied for a purpose
for which such Bonds or Additional Bonds were originally issued. If a Reserve Fund Obligation is
used as provided above, any reimbursements required thereunder to be paid to a Credit Agreement
Provider as a result of a draw or demand thereunder and any interest thereon and expenses payable
thereunder shall be made, as provided in the Reserve Fund Obligation, from moneys deposited into
the Reserve Fund until fully paid. If it becomes necessary to pay interest on or principal of any Bonds
from the Reserve Fund, money and investments held for the credit of the Reserve Fund shall be
utilized first for such purpose, before any demand or draw is made oil a Reserve Fund Obligation.
(f) Credit Agreement. A Reserve Fund Obligation permitted under (b), above, must be a
Credit Agreement in the form of a surety bond, insurance policy, letter of credit or other type of
enhancement meeting the requirements described below.
(1) A surety bond or insurance policy issued to the BCRUA or other party, as agent
of the Registered Owners, by a company licensed to issue an insurance policy guaranteeing
the timely payment of debt service on any Bonds (a "municipal bond insurer") if the claims
paying ability of the issuer thereof shall be rated by at least one of the following rating
agencies in the indicated rating categories, to-wit, "AAA" by S&P or Fitch or "Aaa" by
Moody's.
(2) A surety bond or insurance policy issued to the BCRUA or other party. as agent
of the Registered Owners, by an entity other than a municipal bond insurer, if the form and
substance of such instrument and the issuer thereof shall be approved in writing by the
Purchaser or each Insurer of record if insurance is obtained on the Bonds. .
(3) An unconditional irrevocable letter of credit issued to the BCRUA or other
party, as agent of the Registered Owners, by a bank if the issuer thereof is rated by at least
two of the following rating agencies in the indicated rating categories, to-wit, at least "AA"
by S&P or Fitch or "Aa" by Moody's. The letter of credit shall be payable in one or more
draws upon presentation by the BCRUA or other party of a sight draft accompanied by its
certificate (which must be satisfactory in form and substance to the BCRUA or other party
and the issuer of the letter of credit) that the BCRUA then holds insufficient funds to make a
required payment of principal or interest on any Bonds or Additional Bonds. The draws shall
be payable within two (2) days of presentation of the sight draft. The letter of credit shall be
for a term of not less than three (3) years and shall be subject to an "evergreening" feature so
as to provide the BCRUA with at least thirty (30) months notice of termination. The issuer of
the letter of credit shall be required to notify the BCRUA not later than thirty (30) months
prior to the stated expiration date of the letter of credit, as to whether such expiration date
shall be extended, and if so, shall indicate the new expiration date. If such notice indicates
that the expiration date shall not be extended, the BCRUA shall deposit in the Reserve Fund,
in accordance with this section, an amount sufficient to cause the money or investments on
deposit in the Reserve Fund, together with any other qualifying Reserve Fund Obligations, to
accumulate to the Required Reserve Amount, unless the expired Reserve Fund Obligation is
replaced by a Reserve Fund Obligation meeting the requirements in any of l through 3,
009705 13;1 13
above. The letter of credit shall permit a draw in full prior to the expiration or termination of
such letter of credit if the letter of credit has not been replaced or renewed. The BCRUA or
other party shall draw upon the letter of credit prior to its expiration or termination unless an
acceptable replacement is in place or the Reserve Fund is fully funded to the Required
Reserve Amount.
(4) The obligation to reimburse the issuer of a Reserve Fund Obligation for any
expenses, claims, or draws upon such Reserve Fund Obligation, including interest thereon,
shall be made from the deposits made to the Reserve Fund as provided in this section and in
accordance with the provisions of the Reserve Fund Obligation. The Reserve Fund
Obligation shall provide for a revolving feature under which the amount available thereunder
will be reinstated to the extent of any reimbursement of draws or claims paid. If the revolving
feature is suspended or terminated for any reason, the right of the issuer of the Reserve Fund
Obligation to reimbursement will be subordinated to the cash replenishment of the Reserve
Fund to an amount equal to the difference between the full original amount available under
the Reserve Fund Obligation and the amount then available for further draws or claims. In the
event (a) the issuer of a Reserve Fund Obligation becomes insolvent, or (b) the issuer of a
Reserve Fund Obligation defaults in its payment obligations thereunder, or (c) the claims
paying ability of the issuer of the insurance policy or surety bond falls below"AAA" by S&P
or Fitch or "Aaa" by Moody's, or(d) the rating of the issuer of the letter of credit falls below
"AAA" by S&P or Fitch or "Aaa" by Moody's, the obligation to reimburse the issuer of the
Reserve Fund Obligation shall be subordinate to the cash replenishment of the Reserve Fund.
(5) In the event (a) the revolving reinstatement feature described in the preceding
paragraph is suspended or terminated, or (b) the rating of the claims paying ability of the
issuer of the surety bond or insurance policy falls below "AAA" by S&P or Fitch or "Aaa"
by Moody's, or (c) the rating of the issuer of the letter of credit falls below "AAA'' by S&P
or Fitch or "Aaa" by Moody's, the BCRUA shall, from funds made available by Leander,
either (i) deposit into the Reserve Fund, in accordance with this section, an amount sufficient
to cause the money or investments on deposit in the Reserve Fund to accumulate to the
Required Reserve Amount within thirty-six (36) months, or (ii) replace such instrument with
a surety bond, insurance policy, or letter of credit meeting the requirements in any of
through 3, above, within nine months of such occurrence. In the event (a) the rating of the
claims-paying ability of the issuer of the surety bond or insurance policy falls below "AAA"
by S&P, Moody's or Fitch, or (b) the rating of the issuer of the letter of credit falls below
"AAA" by S&P, Moody's or Fitch, or ( c) the issuer of the Reserve Fund Obligation defaults
in its payment obligations hereunder, or (d) the issuer of the Reserve Fund Obligation
becomes insolvent, the BCRUA shall, from funds made available by Leander, but solely from
either (i) deposit into the Reserve Fund, in accordance with this section, amounts sufficient to
cause the money or investments on deposit in the Reserve Fund to accumulate to the
Required Reserve Amount, or (ii) replace such instrument with a surety bond, insurance
policy, or letter of credit meeting the requirements in any of I through 3 above within nine
(9) months of such occurrence.
(6) Where applicable, the amount available for draws or claims under a Reserve
Fund Obligation may be reduced by the amount of money or investments deposited in the
Reserve Fund pursuant to clause (i)of the preceding subparagraph 5.
00970513.1 14
(7) The BCRUA shall ascertain the necessity for a claim or draw upon any Reserve
Fund Obligation and provide notice to the issuer of the Reserve Fund Obligation in
accordance with its terms not later than three (3) days (or such appropriate time period as
will, when combined with the timing of required payment under the Reserve Fund
Obligation, ensure payment under the Reserve Fund Obligation on or before the interest
payment date) prior to each interest payment date.
(S) Cash on deposit in the Reserve Fund shall be used (or investments purchased
with such cash shall be liquidated and the proceeds applied as required) prior to any drawing
on any Reserve Fund Obligation. If and to the extent that more than one (1) Reserve Fund
Obligation is deposited in the Reserve Fund, drawings thereunder and repayments of costs
associated therewith shall be made on a pro rata basis, calculated by reference to the
maximum amounts available thereunder.
(g) Excess Funds. Any excess in the Reserve Fund over the Required Reserve Amount in
effect at any time shall be deposited to the credit of the Debt Service Fund.
(h) 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 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.
00970513,1 Is
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) 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
00970513J I 16
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;
(iii) 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;
(iv) 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 that the
aggregate amount to be accumulated and maintained in the Reserve Fund shall be
increased (if and to the extent necessary) to an amount not less than the Required Reserve
Amount of all Bonds and Additional Bonds which will be outstanding after the issuance
and delivery of the then proposed Additional Bonds; and that the required additional
amount shall be so accumulated by the deposit in the Reserve Fund of all or any part of
said required additional amount as a Reserve Fund Obligation or in cash immediately
after the delivery of the then proposed Additional Bonds; and
(v) 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 remain
00470513;1 17
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
interest 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 BCRUA 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 BCRUA
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 BCRUA 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.
00970513;1 G8
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 BCRUA 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 Year, including in each Annual Budget such items as are customarily and reasonably
00970513,1 19
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 for 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 BCRITA 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 ability to enforce the provisions of the Contract for such period that a
default exists under the Contract.
00970513:1 20
(ii) It is provided that all such proceedings shall be instituted and maintained for
the equal benefit of all Registered Owners of Bonds then Outstanding.
(iii) 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 any
Registered Owner of the Bonds or any Bond Similarly Secured, solely for anyone 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;
00470513;1 21
(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)(v) 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 51% 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:
(i) Make any change in the maturity of the Outstanding Bonds;
(ii) Reduce the rate of interest borne by the Outstanding Bonds;
(iii) Reduce the amount of the principal payable on the Outstanding Bonds;
(iv) Modify the terms of payment of principal of or interest on the Outstanding
Bonds, or impose any conditions with respect to such payment;
(v) Affect the rights of the owners of less than all Bonds then Outstanding; or
(vi) 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,
00970513-,l 22
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 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
00970513,1 23
Insurer.
Section 24. COVENANTS REGARDING TAX-EXEMPTION OF INTEREST ON
THE TAX-EXEMPT 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
Tax-Exempt Bonds as obligations described in section 103 of the Internal Revenue Code of
1986, as amended (the "Code"), the interest on which is not includable in the "gross income" of
the holder for purposes of federal income taxation. In furtherance thereof, the Board covenants as
follows:
(1) to use all proceeds of the Tax-Exempt Bonds for the payment of principal,
interest and redemption premium, if any, on the Refunded Obligations;
(2) to take any action to assure that no more than ten percent (10%) of the
proceeds of the Bonds or the Refunded Obligations 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(b)(6) of the Code or, if more than ten percent
(10%) of the proceeds of the Bonds or the Refunded Obligations 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 ten percent (10%) of the debt service on the Bonds, in contravention of section
141(b)(2) of the Code;
(3) to take any action to assure that in the event that the "private business use"
described in subsection (2) hereof exceeds five percent (5%) of the proceeds of the Bonds
or the Refunded Obligations or the projects financed or refinanced therewith (less
amounts deposited into a reserve fund, if any) then the amount in excess of five percent
(5%) is used for a "private business use" which is "related" and not "disproportionate,"
within the meaning of section 141(b )(3) of the Code, to the governmental use;
(4) to take any action to assure that no amount which is greater than the lesser
of$5,000,000, or five percent (5%) of the proceeds of the Bonds (less amounts deposited
into a reserve fund, if any) is directly or indirectly used to finance loans to persons, other
than state or local governmental units, in contravention of section 141 (c) of the Code;
(5) to refrain from taking any action which would otherwise result in the Bonds
being treated as "private activity bonds" within the meaning of section 141(b) of the
Code;
(6) to refrain from taking any action that would result in the Bonds being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(7) to refrain from using any portion of the proceeds of the Bonds, directly or
indirectly, to acquire or to replace funds which were used, directly or indirectly, to
acquire investment property (as defined in section 148(b)(2) of the Code) which produces
00970513;1 24
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 funds, within the
meaning of section 1.148-1 (b) of the Treasury Regulations, and
(C) amounts deposited in any reasonably required reserve or
replacement funds to the extent such amounts do not exceed ten percent (100/0) of
the proceeds of the Bonds;
(8) to otherwise restrict the use of the proceeds of the Bonds or amounts treated
as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise
contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the
extent applicable, section 149(d) of the Code (relating to advance refundings); and
(9) to pay to the United States of America at least once during each rive-year
period (beginning on the date of delivery of the Bonds) an amount that is at least equal to
90 percent of the "Excess Earnings," within the meaning of section 148(f) of the Code
and to pay to the United States of America, not later than 60 days after the Bonds have
been paid in full, 100 percent of the amount then required to be paid as a result of Excess
Earnings under section 148(f) of the Code.
(b) Rebate Account. In order to facilitate compliance with the above covenant in
subsection (a)(9), a "Rebate Account" 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 Account is established far the
additional purpose of compliance with section 148 of the 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 Code and any regulations or rulings promulgated by the U.S.
Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter
promulgated which modify or expand provisions of the Code, as applicable to the Bonds, the
Board will not be required to comply with any covenant contained herein to the extent that such
failure to comply, in the opinion of nationally recognized bond counsel, will not adversely affect
the exemption from federal income taxation of interest on the Bonds under section 103 of the
Code. In the event that regulations or rulings are hereafter promulgated which impose additional
requirements which are applicable to the Bonds, the Board agrees to comply with the additional
requirements to the extent necessary, in the opinion of nationally recognized bond counsel, to
00970513.1 25
preserve the exemption from federal income taxation of interest on the Bonds under section 103
of the Code. In furtherance of such intention, the Board hereby authorizes and directs the
BCRUA Representative to execute any documents, certificates or reports required by the Code
and to make such elections, on behalf of the Board, which may be permitted by the Code as are
consistent with the purpose for the issuance of the Bonds. This Resolution is intended to satisfy
the official intent requirements set forth in Section 1.150-2 of the Treasury Regulations.
(d) 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.
(e) Taxable Bonds, In connection with the issuance of any Taxable Bonds, the BCRUA
Representative may establish additional accounts or funds as necessary to distinguish Taxable
Bond proceeds from Tax-Exempt Bond proceeds.
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
KjMIS 13.1 26
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 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 shal I 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. (i) The
Board shall provide annually to the MSRB, in an electronic format as prescribed by the MSRB,
within six months after the end of each Fiscal Year, financial information and operating data
with respect to the Board including financial statements of the BCRUA as determined by the
BCRUA Representative at the time the Bonds are sold. The Award Certificate shall specify such
financial and operating data of the general type included in the final Official Statement
authorized by Section 33 of this Resolution. Any financial statements to be so provided shall be
prepared in accordance with the accounting principles described in Exhibit "E" hereto. or such
other accounting principles as the Board may be required to employ from time to time pursuant
to state law or regulation. The Board shall commission an annual audit of such statements and if
the audit is completed within the period during which they must be provided, a copy of such
audit also shall be provided in accordance with the Rule. If such audit of such financial
statements is not complete within such period, then the Board shall provide unaudited financial
00974513;1 27
statements within the required time period and audited financial statements for the applicable
fiscal year to the MSRB, when the audit report on such statements become available.
(ii) If the Board changes its Fiscal Year, it will notify the MSRB of the change
(and of the date of the new Fiscal Year end) prior to the next date by which the Board
otherwise would be required to provide financial information and operating data pursuant
to this Section. The financial information and operating data to be provided pursuant to
this Section may be set forth in full in one or more documents or may be included by
specific reference to any document that is available to the public on the MSRB's internet
web site or filed with the SEC. All documents provided to the MSRB pursuant to this
Section shall be accompanied by identifying information as prescribed by the MSRB.
(b) Certain Event Notices. The Board shall notify the MSRB, in an electronic format as
prescribed by the MSRB, in a timely manner not in excess often business days after the
occurrence of the event, of any of the following events with respect to the Bonds:
(i) Principal and interest payment delinquencies;
(ii) Non-payment related defaults, if material with the meaning of federal
securities laws;
(iii) Unscheduled draws on debt service reserves reflecting financial difficulties;
(iv) Unscheduled draws on credit enhancements reflecting financial difficulties;
(v) Substitution of credit or liquidity providers, or their failure to perform;
(vi) 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 events affecting the tax status of the Bonds;
(vii) Modifications to rights of holders of the Bonds, if material with the meaning
of federal securities laws;
(viii) Bond calls, if material with the meaning of federal securities laws;
(ix) Defeasances;
(x) Release, substitution, or sale of property securing repayment of the Bonds, if
material with the meaning of federal securities laws; and
(xi) Rating changes;
(xii) Bankruptcy, insolvency, receivership or similar event of the Board;
00970513,1 28
(xiii)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 within the meaning of the federal securities laws; and
(xiv) Appointment of a successor or additional trustee or the change of name of a
trustee, if material within the meaning of the federal securities laws.
The Board shall notify the MSRB, in an electronic format as prescribed by 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. All
documents provided to the MSRB pursuant to this Section shall be accompanied by identifying
information as prescribed by the MSRB.
(c) Limitations, Disclaimers, and Amendments. (i) 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 made in accordance with
this Resolution or applicable law that causes the Bonds no longer to be Outstanding.
(ii) The provisions of this Section are for the sole benefit of the Registered
Owners 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 does not make an}' representation or warranty concerning such information or its
usefulness to a decision to invest in or sell Bonds at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE BOARD BE LIABLE TO
THE REGISTERED OWNER 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, WIIETHER
NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT
SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY Ol, 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. NOTHING IN THIS RESOLUTION SHALL BE
CONSTRUED AS A WAIVER OF THE CONSTITUTIONAL, STATUTORY OR
COMMON LAW IMMUNITIES OR DEFENSES OF THE BOARD, WHICH
IMMUNITIES AND DEFENSES ARE HEREBY AND HERETO AFFIRMED.
00970513,1 29
(v) No default by the Board in observing or performing its obligations under
this Section shall comprise a breach of or default under this Resolution for purposes of
any other provision of this Resolution, Should the Rule be amended to obligate the Board
to make filings with or provide notices to entities other than the MSRB, the Board hereby
agrees to undertake such obligation with respect to the Bonds in accordance with the
Rule as amended. 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.
(vi) 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 since such offering as well as such changed circumstances and (2) either (a) the
Registered Owners of a majority in aggregate principal amount (or any greater amount
required by any other provision of this Resolution that authorizes such an amendment) of
the Bonds then outstanding consent to such amendment or (b) a person that is unaffiliated
with the Board (such as nationally recognized bond counsel) determined that such
amendment will not materially impair the interest of the registered owners and beneficial
owners of the Bonds. If the Board so amends the provisions of this Section, it shall
include with any amended financial information or operating data next provided in
accordance with subsection (a) of this Section an explanation, in narrative form, of the
reason for the amendment and of the impact of any change in the type of financial
information or operating data so provided. The Board may also amend or repeal the
provisions of this continuing disclosure agreement if the SEC amends or repeals the
applicable provision of the Rule or a court of final jurisdiction enters judgment that such
provisions of the Rule are invalid, but only if and to the extent that the provisions of this
sentence would not prevent an underwriter from lawfully purchasing or selling Bonds in
the primary offering of the Bonds.
(d) Subsequent Amendments. Leander has agreed pursuant to Article X of the Contract
to provide continuing disclosure of certain financial and operating data so long as the Bonds are
Outstanding. To the extent necessary to allow an underwriter to lawfully purchase or sell Bonds
in a primary offering, Leander will additionally undertake to provide continuing disclosure of
certain financial and operating data so long as the Bonds are Outstanding in accordance with any
subsequent amendments by the SEC to the Rule at the time of such primary offering.
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: (i) any underwriting discount or fees may be retained by and/or wired directly to such
parties; (ii) any accrued interest shall be deposited to the Debt Service Fund as provided in
Section 10; (iii) an amount sufficient to provide for the refunding of the Refunded Obligations
shall be deposited with the Escrow Agent pursuant to the Escrow Agreement to refund the
Refunded Obligations; and (iv) an amount sufficient to pay the remaining costs of issuance of the
Bonds shall be deposited to a bond proceeds account, if needed, to be used for such purpose. Any
0070513,1 30
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 Agent/Registrar or an
eligible trust company or commercial bank for such payment (1) 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 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
00970513;1 31
Defeasance Securities have been so set aside in trust. Until all Defeased Bonds shall have
become due and payable, the Paying Agent/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 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. ESCROW AGREEMENT; REDEMPTION OF REFUNDED
OBLIGATIONS; OFFICIAL STATEMENT. (a) Escrow Agreement. The discharge and
defeasance of Refunded Obligations shall be effectuated pursuant to the terms and provisions of
an Escrow Agreement in substantially the form and substance presented to the Board set forth in
Exhibit "C" in connection with the approval of this Resolution with such changes as are
acceptable to the BCRUA Representative, including any insertions, additions, deletions, and
modifications as may be necessary (a) to carry out the program designed for the BCRUA by the
underwriters or purchasers, (b) to maximize the present value savings of the refunding andlor to
minimize the costs of refunding, (c) to comply with all applicable laws and regulations relating
to the refunding of the Refunded Obligations and (d) to carry out the other intents and purposes
of this Resolution; and, the BCRUA Representative is hereby authorized to select the Escrow
Agent and execute and deliver such Escrow Agreement, on behalf of the BCRUA, in multiple
counterparts.
(b) Redemption Prior to Maturity of Refunded Obligations. To maximize the present
value savings and to minimize the costs of refunding, the BCRUA hereby authorizes and directs
that certain of the Refunded Obligations shall be called for redemption prior to maturity in the
amounts, at the dates and at the redemption prices set forth in the Award Certificate, and the
BCRUA Representative is hereby authorized and directed to take all necessary and appropriate
action to give or cause to be given a notice of redemption to the holders or paying
agent/registrars, as appropriate, of such Refunded Obligations, in the manner required by the
documents authorizing the issuance of such Refunded Obligations.
(c) Purchase of Escrow Securities. The BCRI.'A Representative and the Escrow Agent
00974513,1 3:'
are each hereby authorized (i) to subscribe for, agree to purchase, and purchase escrow securities
that are permitted investments for a defeasance escrow established to defease Refunded
Obligations, and to execute any and all subscriptions, purchase agreements, commitments, letters
of authorization and other documents necessary to effectuate the foregoing, and any actions
heretofore taken for such purpose are hereby ratified and approved and (ii) to authorize such
contributions to the escrow fund as are provided in the Escrow Agreement.
(d) Official Statement. The BCRUA Representative is hereby authorized to approve the
Preliminary Official Statement, the Official Statement relating to the Bonds and any addenda,
supplement or amendment thereto and to deem such documents final in accordance with Rule
15c2-12. The BCRUA further approves the distribution of such Official Statement in the
reoffering of the Bonds by the underwriters or initial purchasers in final form, with such changes
therein or additions thereto as the BCRUA Representative executing the same may deem
advisable, such determination to be conclusively evidenced by his or her execution thereof.
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. APPROVAL OF PROFESSIONAL CONTRACT. The engagement of
Bickerstaff Heath Delgado Acosta LLP as Bond Counsel to BCRUA in connection with
issuance, sale and delivery of the Bonds is hereby approved and confirmed. The execution and
delivery of the contract between BCRUA and such firm, with respect to such services as Bond
Counsel, is hereby approved, and the BCRUA Representative is hereby authorized to execute
such contract.
Section 36. DTC LETTER OF REPRESENTATION. The Board approves execution
by the BCRUA 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 37. 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
00970513:1 33
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.
(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 38. 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 39. 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 40. 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 41. 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
BCRUA 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.
[The remainder of this page intentionally left blank.]
00970513;1 34
PASSED AND ADOPTED on the 15th day of February, 2017.
BRUSHY CREEK REGIONAL UTILITY
AUTHORITY, INC.
BCRUA Representative
00970513:1 [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 Accreted Value means, with respect to a Premium Compound Interest Bond, as
of any particular date of calculation, the original principal amount thereof, plus all interest
accrued and compounded to the particular date of calculation, as determined in accordance with
the Award Certificate and the Accretion Table attached as an exhibit to the Award Certificate
relating to the respective Bonds that shows the Accreted Value per $5,000 maturity amount on
the calculation date of maturity to its maturity.
The term Accretion Table means the exhibit attached to the Award Certificate that sets
forth the rounded original principal amounts at the Issuance Date for the Premium Compound
Interest Bonds and the Accreted Values and maturity amounts thereof as of each Compounding
Date until final maturity.
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 BC'Rl,�A 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 B 'RVA Project shall mean, collectively, the Land Interests and the
00970513,1 A-1
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, 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 underwriters 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 the 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
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
00974513,1 A-2
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.
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 initial purchasers thereof.
The term Code shall mean the Internal Revenue Code of 1986, as amended.
The term Compounded Amount means, with respect to a Premium Compound Interest
Bond, as of any particular date of calculation, the original principal amount thereof plus all
interest accrued and compounded to the particular date of calculation.
The term Compounding Dates means the dates on which interest is compounded on the
Premium Compound Interest Bonds as set forth in the Accretion Table attached to the Award
Certificate.
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
00970513,1 A-3
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 Current Interest Bonds means the Bonds paying current interest and maturing in
each of the years and in the aggregate principal amounts set forth in the Award Certificate.
The term Debt Service Fund shall mean the special fund or account created and
established by the provisions of Section 10 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 Buyer), unless such index is no longer published
in The Bond 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 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
00970513,1 A-4
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 DTC 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.
The term Escrow Agent means the financial institution selected by the BCRUA
Representative to perform such function in the Award Certificate or any successor escrow agent
under the Escrow Agreement.
The term Escrow Agreement means the agreement by and between the BCRUA and the
Escrow Agent relating to the refunding of the Refunded Obligations.
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.
00970513-,l A-5
The term Land Interests shall mean the fee simple interests and/or the easements, right-
ofway 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 of 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.
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
ou97050;i A-b
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 Agent/Registrar 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 AgenrRegistrar, 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:
(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 1 P DR, "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 P DR, "Preliminary Engineering Report
Treated Water Transmission Line Segment 2C" prepared by K. Friese & Associates, Inc.,
dated September 2007.
The term Premium Compound Interest Bonds means the Bonds on which no interest is
paid prior to maturity, maturing in various amounts and in the aggregate principal amount as set
00970513,1 A-7
forth in the Award Certificate.
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 Refundable Obligations means the Outstanding Series 2009 Bonds.
The term Refunded Obligations means those Refundable Obligations designated by the
BCRUA Representative in the Award Certificate to be refunded.
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 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 Required Reserve Amount, if required, shall mean an amount equal to the
Average Annual Debt Service Requirements.
The term Reserve Fund shall mean the special fund or account created and established by
the provisions of Section 10(a) of this Resolution.
The term Reserve Fund Obligation, if required, shall mean a Credit Agreement satisfying
the requirements of Section 10(f) of this Resolution which is deposited in the Reserve Fund to
meet all or part of the Required Reserve Amount as provided in such Section 10(b).
The term Resolution shall mean this resolution adopted by the Board on February 15,
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 BCRUA.
The term SEC shall mean the United States Securities and Exchange Commission.
The term Series 2009 Bonds shall mean the "Brushy Creek Regional Utility Authority,
00970513,1 A-8
Inc. City of Leander, Texas Contract Revenue Bonds (Brushy Creek Regional Water Treatment
and Distribution Project), Series 2009" in the aggregate original principal amount of
$91,180,000.
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.
The term Taxable Bonds means Bonds bearing interest at a taxable rate.
The term Tax-Exempt Bonds means Bonds bearing interest which is excludable from
gross income for Federal taxation purposes pursuant to section 103 of the Code.
[The Remainder of This Page is Intentionally Left Blank]
00470513.I A-9
EXHIBIT B
FORM OF BOND
(All blanks and any appropriate or necessary insertions or deletions, to be completed as
determined by the BCRUA Representative in the Award Certificate.)
UNITED STATES OF AMERICA
STATE OF TEXAS
BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC.
CITY OF LEANDER, TEXAS CONTRACT REVENUE REFUNDING BONDS,
SERIES 2017
(BRUSHY CREEK REGIONAL WATER TREATMENT
AND DISTRIBUTION PROJECT)
[FORM OF FIRST PARAGRAPH OF CURRENT INTEREST BONDS]
REGISTERED
REGISTERED PRINCIPAL AMOUNT
NO. R- $
ISSUANCE STATED INTEREST
DATE: MATURITY: 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
009,os i.�;1 B-1
# 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 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 Registered Owner,
requested by, and at the risk and expense, of the Registered Owner.
[FORM OF FIRST PARAGRAPHS OF PREMIUM COMPOUND INTEREST BOND[
REGISTERED
REGISTERED PRINCIPAL AMOUNT
NO. PC- $
ISSUANCE STATED INTEREST
DATE: MATURITY: 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 Maturity Amount set
forth above, representing the principal amount hereof and accrued and compounded interest
hereon. Interest shall accrue on the principal amount hereof from the Issuance Date at the interest
rate per annum specified above, calculated on the basis of a 360 day year comprised of twelve
30-day months, compounded semiannually on * and
of each year commencing *. For convenience of reference, a table appears
on the back of this Bond showing the "Compounded Amount' of the original principal amount
plus initial premium, if any, per $5,000 Maturity Amount compounded semiannually at the yield
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.
00970513:1 B.2
shown on such table. The term "Accreted Value" as set forth in the table on the reverse side
hereof shall mean the original principal amount plus initial premium per $5,000 Maturity
Amount compounded semiannually on _ * and * at the yield
shown on such table.
The Maturity Amount of this Bond shall be payable to the Registered Owner hereof(the
"Holder") upon presentation and surrender, at a corporate trust office of the Paying
Agent/Registrar executing the registration certificate appearing hereon or a successor thereof. All
payments on this Bond shall be in any coin or currency of the United States of America which at
the time of payment is legal tender for the payment of public and private debts.
[FORM OF REMAINDER OF EACH BOND
This Bond is one of the series of bonds, dated ,* specified in its title
issued in the aggregate principal amount of$ * (the "Bonds") pursuant to a
resolution adopted by the governing body of the BCRUA (the "Resolution"), and issued for the
purpose of. (i) refunding the Refunded Obligations and (ii) paying 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, in principal amounts of$5,000 or any integral multiple thereof 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 less than all of the Bonds are to be redeemed, the BCRUA
may select the maturities of Bonds to be redeemed. 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.
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 BCRI!A 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
00970513;1 B-3
by the Holder of the unredeemed balance hereof in the event of its redemption in part.
The Bonds maturing on * in the year 20 * (the "Term Bonds") are
subject to mandatory sinking fund redemption by lot prior to maturity in the following amounts,
on the following dates and at a price of par plus accrued interest to the redemption date.
Bonds Maturing ,20_
Redemption Date Principal Amount
20 $ _
20_*
*sinal Maturity
The principal amount of the Term Bonds required to be redeemed pursuant to the
operation of the mandatory sinking fund redemption provisions shall be reduced, at the option of
the BCRUA by the principal amount of any Term Bonds of the stated maturity which, at least 50
days prior to a mandatory redemption date, (l) shall have been acquired by the BCRUA, at a
price not exceeding the principal amount of such Term Bonds plus accrued interest to the date of
purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, (2) shall have
been purchased and canceled by the Paying Agent/Registrar at the request of the BCRUA with
monies in Debt Service Fund at a price not exceeding the principal amount of the Term Bonds
plus accrued interest to the date of purchase thereof, or (3) shall have been redeemed pursuant to
the optional redemption provisions and not theretofore credited against a mandatory sinking fund
redemption requirement.*
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
00970513,1 B-4
the BCRUA and the Paying Agent/Registrar; 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.
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 BCRt.A 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.
H970513:1 B-5
BRUSHY CREEK REGIONAL
UTILITY AUTHORITY, INC.
President, Board of Directors
ATTESTED:
Secretary, Board of Directors
(SEAL)
C. Fonm 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
PUBLIC ACCOUNTS §
§ REGISTER NO.
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/Rej�istrar to Appear on. Definitive Bonds
Only. _.
CERTIFICATE OF PAYING AGENT/REGISTAR
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:
00970513;1 B-6
as Paying Agent/Registrar
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 Current Interest Bond shall be in the form,set forth in this Exhibit,
except that:
i) Immediately under the name of the Bond, the headings"INTEREST
RATE" and "STATED MATURITY" shall both be completed with the words "As shown
below", and the heading"CUSIP NO." shall be deleted; and
ii) the first two paragraphs shall read as follows:
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, the Principal Amount specified above on * in
each of the years and in principal installments and bearing interest at per annum rates in
00470$13,1 B-7
accordance with the following schedule:
Principal Maturity Interest
Amount (_ ) Rate
(Information for the Current Interest Bonds from the Award Certificate to be inserted)
(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 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 Current Interest Bond shall be numbered "T-1."
G. The initial_Compound Interest Bond shall be in the form set forth in this Exhibit,
except that:
i) Immediately under the name of the Bond, the headings "INTEREST
RATE" and "STATED MATURITY" shall both be completed with the words "As shown
below", and the heading "CUSIP NO." shall be deleted.
ii) the first two paragraphs shall read as follows:
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, the Maturity Amount specified above on * in
each of the years and in installments in accordance with the following schedule:
00470513.1 I1-8
Amount Year Rate
(Information for the Current Interest Bonds from the Award Certificate to be inserted)
The amount shown above as the respective Maturity Amounts represent the principal amount
hereof and accrued and compounded interest hereon. Interest shall accrue on the principal
amount hereof from the Issuance Date at the interest rate per annum specified above,
compounded semiannually on * and * of each year commencing
.* For convenience of reference, a table appears on the back of this Bond
showing the "Compounded Amount" of the original principal amount plus initial premium, if
any, per$5,000 Maturity Amount compounded semiannually at the yield shown on such table.
The Maturity Amount 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 executing the registration certificate appearing hereon or a successor thereof. All
payments 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.
iii) initial Premium Compound Interest Bond shall be numbered "TPC-l."
H. Insurance Legend. If an insurance policy is obtained by the initial purchasers of
the Bonds or the BCRUA for any series of Bonds, the definitive Bonds and the Initial Bond shall
bear an appropriate legend as provided by the Insurer.
[The Remainder of This Page is Intentionally Left Blank
0007as 13,1 R-9
EXHIBIT C
PAYING AGENTIREGISTRAR AGREEMENT
[See Separate Tab of this Transcript]
00970513;1 C-1
EXHIBIT D
ESCROW AGREEMENT
[See Separate Tab of this Transcript]
00970513,1 D-1
EXHIBIT E
CONTINUING DISCLOSURE OF INFORMATION
Accounting Principles
The accounting principles referred to in such Section are generally accepted accounting
principles for governmental units as prescribed by the Government Accounting Standards Board
from time to time.
00970513-,l E-1
EXHIBIT F
FORM OF AWARD CERTIFICATE
[See Separate Tab of this Transcript]
00970513-,l F-i
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 "BCR[!A"), 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 Refunding 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 February 15, 2017,
do hereby certify the following:
1. Capitalized terms not otherwise defined herein have the meaning assigned in the
Bond Resolution and the Bond Purchase Agreement dated of even date herewith between the
BCRUA and Raymond James & Associates, Inc. acting on its own behalf and on behalf'of the
other underwriters listed therein (the "Underwriters").
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 Underwriters as the purchasers of the bonds
entitled "Brushy Creek Regional Utility Authority, Inc. City of Leander, Texas Contract Revenue
Refunding Bonds, (Brushy Creek Regional Water Treatment and Distribution Project). Series
2017," in the aggregate principal amount of$80,505,000 (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 Underwriters at the purchase price
set forth in the Bond Purchase Agreement. Pursuant to Section 3(c) of the Bond Resolution, the
Series 2017 Bonds are being sold on a negotiated basis 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 and provisions of the Bond Purchase Agreement are hereby
approved in accordance with Section 3(c) of the Bond Resolution. 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 refund
the Refunded Obligations set forth in Exhibit "B" hereto and to pay the costs of issuing the Series
2017 Bonds. The Refunded Obligations shall be subject to redemption as set forth in Exhibit 'B".
6. The issuance of the Series 2017 Bonds is in the best interest of the BCRUA and
produces a net present value debt service savings of$5,321,321.70 (6.1639310fo of the Refunded
Obligations) and a gross debt service savings of$17,898,892.24. Attached hereto as Exhibit "C"
are schedules illustrating the present value savings to be realized by the BCRUA as a result of the
refunding of the Refunded Obligations by the issuance of the Series 2017 Bonds.
7. In consultation with, and reliance upon the advice of the financial advisor for the
BCRUA, 1 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.
8. The price to be paid by the Underwriters of the Series 2017 Bonds is not less than
90%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. The $6,562,195.40 of reoffering premium derived
from the Series 2017 Bonds is allocated as follows: (i) $379,994.48 to the Underwriters' discount,
(ii) $386,000.00 to the remaining costs of issuance of the Series 2017 Bonds and (iii)
$5,796,200.92 to the escrow for the Refunded Obligations.
9. The Escrow Fund of$93,576,648.46 shall be funded by a transfer of$896,173.83
from the Debt Service Fund for 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 "Series 2009 Bonds"), $6,381,522.55 from the Debt Service Reserve
Fund for the Series 2009 Bonds, and $86,298,952.08 from Bond Proceeds (consisting. of
$80,502,751.16 from the par amount and $5,796,200.92 from premium).
10. 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. No Premium Compound Interest
Bonds are being issued.
11. 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.
12. The Authority will not purchase insurance for the Bonds.
13. Pursuant to Section I0(a) of the Bond Resolution, a Reserve Fund is not required
for the Bonds. Accordingly, the Reserve Fund requirement for additional bonds in section 14(iv)
shall not apply.
2
14. The Preliminary Official Statement, dated March 15, 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 Official
Statement is hereby approved.
15. 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 Official Statement under the caption
"CONTINUING DISCLOSURE OF INFORMATION - Annual Report."
16. In accordance with the Bond Resolution, I hereby determine that it is in the best
interest of the BCRUA to modify the definition of"Defeasance Securities" set forth in the Bond
Resolution to read as follows: "Defeasance Securities" means (i) Federal Securities and (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 provide for the funding of an escrow to effect the defeasance of the Bonds, are
rated as to investment quality by a nationally recognized investment rating firm not less than
"AAA" or its equivalent.
17. Pursuant to Section 5(a) of the Bond Resolution, BOKF, NA, Austin, Texas, has
been selected as the Paying Agent/Registrar for the Series 2017 Bonds. Pursuant to Section 33(a)
of the Bond Resolution, BOKF,NA, Austin,Texas, has been selected as the Escrow Agent for the
Series 2017 Bonds.
18. The Initial Bond will be registered in the name of Cede & Co.
]The Remainder of this Page is Intentionally Left Blank]
3
EXECUTED this MAR 2 2 2017
BRUSHY CREEK REGIONAL UTILITY
AUTHORITY, INC.
z - —
BCRUA Representative
00975094,1 Signature Page
EXHIBIT A
TERMS OF THE SERIES 2017 BONDS
$80,505,000
BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC.
CITY OF LEANDER, TEXAS CONTRACT REVENUE REFUNDING BONDS,
SERIES 2017
(BRUSHY CREEK REGIONAL WATER TREATMENT
AND DISTRIBUTION PROJECT)
GENERAL DESCRIPTION OF SERIES 2017 BONDS
The Series 2017 Bonds in the aggregate original principal amount of$80,505,000 will be
issued as serial bonds dated March 1, 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: August 1 and February I until maturity or redemption commencing August 1, 2017
Principal Maturity Interest Principal Maturity Interest
Amount Au ust 1 Rate Amount (August 1 Rate
$2,490,000 2017 2.000% $3,680,000 2028 3.000%
2,270,000 2018 3.000% 3,805,000 2029 3.000%
2,375,000 2019 3.000% 3,930,000 2030 4.000%
2,485,000 2020 3.000% 4,095,000 2031 4.000%
2,585,000 2021 3.000% 4,265,000 2032 4.000%
2,690,000 2022 3.000% 4,445,000 2033 4.000%
2,800,000 2023 5.000% 4,635,000 2034 5.000%
2,965,000 2024 5.000% 4,870,000 2035 5.000%
3,135,000 2025 5.000% 5,125,000 2036 5.000%
3,305,000 2026 5.000% 5,390,000 2037 5.000%
3,490,000 2027 5.000% 5,675,000 2038 3.750%
A-1
REDEMPTION PROVISIONS
Optional Redemption. On August 1,2026,or on any date thereafter,the Series 2017 Bonds
maturing on or after August 1, 2027 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
interest to the date fixed for redemption as a whole, or in part, 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).
A2
EXHIBIT B
NOTICE OF REDEMPTION/DEFEASANCE
Brushy Creek Regional Utility Authority, Inc.
City of Leander, Texas Contract Revenue Bonds
(Brushy Creek Regional Water Treatment and Distribution Project), Series 2009
NOTICE IS HEREBY GIVEN that the Brushy Creek Regional Utility Authority, Inc. (the"Authority")
has called for defeasance to maturity and redemption all of its outstanding series of City of
Leander, Texas Contract Revenue Bonds (Brushy Creek Regional Water Treatment and
Distribution Project), Series 2009 (the "Bonds") described as follows:
Defeasance to Maturity
Outstanding Principal
Bonds Principal Amount Redemption
CUSIP Rate Maturing Amount Refunded Date
117467CL2 3.5040% 08/01/2017 $2,175,000 $ 2,175,000 08101/2017
117467CMO 3.6640% 08/01/2018 2,290,000 2,290,000 08101/2018
117467CN8 3.8820% 08/0112019 2,410,000 2,410,000 08/01/2019
Prior Redemption
117467CP3 4.0540% 08/01/2020 2,540,000 2,540,000 08/0112019
117467CQ1 4.2060% 08/01/2021 2,670,000 2,670,000 0810112019
117467CR9 4.3350% 08/01/2022 2,810,000 2,810,000 08101/2019
117467CS7 4.4650% 08/01/2023 2,960,000 2,960,000 08/01/2019
117467CT5 4.5680% 08/01/2024 3,115,000 3,115,000 08/01/2019
117467CU2 4.6620% 08/01/2025 3,280,000 3,280,000 08/01/2019
117467CVO 4.7360% 08/01/2026 3,450,000 3,450,000 08/01/2019
117467CW8 4.7910% 08/01/2027 3,630,000 3,630,000 08/01/2019
117467CX6 4.8550% 08/0112028 3,820,000 3,820,000 08/01/2019
117467CY4 5.0540% 08/0112029 4,020,000 4,020,000 08/01/2019
117467CZ1 5.0540% 08/0112030 4,235,000 4,235,000 08/01/2019
117467DA5 5.0540% 08/0112031 4,455,000 4,455,000 08/01/2019
117467DB3 5.0540% 08101/2032 4,690,000 4,690,000 08/01/2019
117467DC1 5.0540% 08101/2033 4,935,000 4,935,000 08/01/2019
117467/3/39 5.0840% 08101/2034 5,195,000 5,195,000 08/01/2019
117467DE7 5.0840% 08/01/2035 5,465,000 5,465,000 08/01/2019
117467DF4 5.0840% 08/01/2036 5,755,000 5,755,000 0810112019
117467DG2 5.0840% 08/01/2037 6,055,000 6,055,000 08101/2019
117467DHO 5.0840% 08/01/2038 6,375,000 6,375,000 08101/2019
Bonds maturing August 1, 2017 through August 1, 2019 will be defeased to maturity.
Bonds maturing August 1, 2020 through August 1, 2038 will be redeemed on August 1, 2019.
Interest on the Bonds shall cease to accrue from and after said defeasance/redemption date. The
Bonds will be redeemed at par plus accrued interest.
B-1
The above described Bonds should be surrendered on the defeasance/redemption date for
payment of the redemption price of the principal amount thereof plus accrued interest at the
following addresses:
First Class/Registered/Certified Express Delivery Only By Nand Only
Bank of New York Mellon Bank of New York Mellon Bank of New York Mellon
Trust Company, N.A. Trust Company, N.A. Trust Company, N.A.
Global Corporate Trust Global Corporate Trust Global Corporate Trust
P.O. Box 396 111 Sanders Creek Parkway Corporate Trust Window
East Syracuse, NY 13057 East Syracuse, NY 13057 101 Barclay Street
1St Floor East
New York, NY 10286
IMPORTANT TAX NOTICE
Withholding of 28% of gross redemption proceeds of any payment made within the United States
may be required by the Jobs and Growth Tax Relief Reconciliation Act of 2003 (the "Act"), unless
the Paying Agent has the correct taxpayer identification number (social security or employer
identification number) or exemption certificate of the payee. Please furnish a properly completed
Form W-9 or exemption certificate or equivalent when presenting your securities.
*Note: The Authority and Paying Agent/Registrar shall not be responsible for the selection or use
of the CUS1P numbers selected, nor is any representation made as to their correctness indicated
in the notice or as printed on any Bond. They are included solely for the convenience of the
holders.
Brushy Creek Regional Utility Authority, Inc.
B-2
EXHIBIT C
DEBT SERVICE SAVINGS SCHEDULES
f:IrsKaulhwest4*
SUMMARY OF REFUNDING RESULTS
an"hy Creek Regional Utility Authority,Inc.
City of Leander,Texas Contract Revenue Refunding Bonds,Series 2017
Final Numbers•Verified
Dated Date 04/19/2017
Delivery Date 0411212017
Arbhroge yield 3.143676%
Escrowyleld IA34005%
Value of Negative Arbitrage 3,269,131AS
Bond Par Amount 80,505.000.00
True Interest Cost 3.529095%
Net Interest Cost 3 731526%
AINn TIC 3.576304%
Average Coupon 4.344347%
Average We 12.531
Par amount of refunded bonds 66,330,000.00
Average coupon of refunded bonds 4.977411%
Average 0fe of refunded bonds 12.601
PV of prior debt to 04/19/2017®3.576304% 98,697,970.16
Net PV Savings 5,321,321.70
Percentage savings of refunded bonds 6.16393L%
Note,FINAL.
Mer 22,1017 3;m pm Prepared M nwSourhwen ILbI IFlmrve 7.017 LeendeneOlUA 3-2017,20171 Pilot
C_1
RrstSoulhvved
SAVINGS
Brushy Greek Regional Utility Authority,Inc.
City of Leander,Texas Contract Revenue Refunding Bonds,Series 2017
Final Numbers-Verifled
Prior Retuning
Date Debt Service Debt Service Savings
09/30/2017 4,243,093.45 3,429,097.71 813,995.74
09/30/2018 6,349,974.90 5,534,662.50 815,312A0
09/30/2019 6,386,069.30 51571,562.50 814,506.80
09/30/2020 6,42I,S13.10 5,610,312.50 812,200.60
09/30/2021 6,449,541.50 5,635,762.50 813,779.00
09/30/2022 6,477,241.30 5,663,21.2.50 814,028.80
09/30/2023 6,505,427.80 5,693,512.50 812,915.30
09/30/2024 6,528.263.80 5.717,51.2.50 $10,751.30
09/30/2025 6,550,970.60 5,739,262.50 831,708.10
09/30/2026 6,569,057.00 5,752,512.50 915,541.50
09/30/2027 6,588665.00 5,772,262.50 81.2,402.50
09/30/2028 6,600,75170 5,787,752.50 BL2,989.20
09130/Z029 6,615,290.70 5,802,362.50 812,928.20
09/300030 6,627,119.90 5,813,212.50 813,907.40
09/30/2031 6,633,083.00 5,821.,012.50 812,070.50
09130/203Z 5,54Z,9Z7.30 5,827,212.50 815,714.80
09/30/2033 6,650,894.70 5,836,612.50 814,292.20
09130/I034 6,661,479.80 5,848,812.50 812,667.30
090012035 6,667,36600 5,852,062.50 815,303.50
09/30/2036 6,679,525.40 5,863,562.50 815,962.90
0913012037 6,686,941.20 5,872,312.50 814,628.70
09/30/2039 6,699,105.00 5,887,813.50 $11,292 50
142,230,302A5 124,331,410.21 17,899,892.24
Savings Summary
Savings PV date 04/19/2017
Savings PV rate 3.576304%
PV of savingsfrom cash flow 12,596,769.24
Less:Prior funds on hand -7,277,696.38
Plus:Refunding funds on hand 21248.94
Net PV Savings 5,321.321.70
Note:ANAL
Mer ZZ,2017 1:34 Pm PrtP+red M rlrscSoahwde Ito) (Fimme 7017 teande.:ar1r11A 3-7417,20171 Pole?
C-2
DATE: February 10, 2017
SUBJECT: BCRUA Board Meeting—February 15, 2017
ITEM: 8A. Consider a resolution Authorizing the Issuance of Brushy Creek Regional Utility
Authority, Inc. City of Leander,Texas Contract Revenue Refunding Bonds
PRESENTER: Tom Gallier,General Manager
BACKGROUND INFO:
The City of Leander has decided to initiate a refunding of their existing Texas Water Development Board
(TWDB) BCRUA bond debt on Phase 1A, in order to take advantage of the improved credit rating BCRUA
received last year,and the current lower bond interest environment.
This process is essentially the same as that followed last August/September,when both the cities of Round
Rock and Cedar Park refunded their BCRUA debt,saving millions of dollars in long-term interest payments.
Leander's refunding process will be coordinated by their financial advisor, Hilltop Securities, and with
Bickerstaff Heath Delgado Acosta, LLP serving as bond counsel.
Because these are BCRUA bonds, issued on behalf of the City of Leander, Board action to authorize the
refunding is necessary, along with formal action by the Leander city council.
Representatives of the City of Leander, Hilltop Securities, and Bickerstaff Heath will be present to answer
any specific questions the Board may have.
All BCRUA costs associated with this refunding will be paid either directly,or indirectly by reimbursement,
by the City of Leander.
Staff recommends approval of this resolution.