Minutes of Board of Regents of Stephen F. Austin State University. 2009, Volume No. 249

              Stephen F. Austin
State University
Minutes of the
Board of Regents
Nacogdoches, Texas
January 15,2009 Telephone Meeting (Volume 249)
BOARD MINUTES FOR JANUARY 15, 2009
VOLUME 249
Board Order 09-09
Consideration of Resolution Authorizing the Sale of the Texas Public
Finance Authority Stephen F. Austin State University Tuition Revenue
Bonds, Series 2009, in the Aggregate Principal Amount of $23,000,000;
Authorizing Actions by the Texas Public Finance Authority, Stephen F.
Austin State University, and Representatives thereof in Connection
with the Sale and Delivery of said Bonds; and Resolving Other Matters
Related Thereto.
Stephen F. Austin State University
Minutes of the Telephone Meeting of the Board of Regents
Nacogdoches, Texas
January 15,2009
Austin Building 307
Meeting 249
A special teleconference meeting of the board of regents was called to order on Thursday,
January 15, 2009, at 10:00 a.m. by Chair Joe Max Green.
Present in Austin Building, Room 307 were:
Board Chair: Mr. Joe Max Green
President: Dr. Baker Pattillo
Vice Presidents: Mr. Danny Gallant
Mr. Steve Westbrook
Dr. Ric Berry
General Counsel: Ms. Yvette Clark
Others SFA administrators, staff, and visitors
Joining the meeting by telephone were:
Board Members: Mr. Carlos Amaral
Mr. Richard Boyer
Ms. Lacey Claver
Ms. Valerie Ertz
Mr. Bob Garrett
Mr. Paul Pond
Mr. Melvin White
Absent from the teleconference were Regents James Thompson and James Dickerson.
Danny Gallant acknowledged the following who helped with the bond issue: Judith
Porras, general counsel, of the Texas Public Finance Authority; Mary Williams, Senior
Vice President of First Southwest Company; and Carol Polombo, Bond Counsel,
representing McCall, Parkhurst, and Horton.
Board Order 09-09
Whereas, the following was considered by the Board of Regents:
Consideration of Resolution Authorizing the Sale of the Texas Public
Finance Authority Stephen F. Austin State University Tuition Revenue
Bonds, Series 2009, in the Aggregate Principal Amount of $23,000,000;
Authorizing Actions by the Texas Public Finance Authority, Stephen f!
Austin State University, and Representatives thereof in Connection
with the Sale and Delivery of said Bonds; and Resolving Other Matters
Related Thereto.
The Stephen F. Austin State University Board of Regents authorized the
administration to issue tuition revenue bonds for a $10,000,000 education and
general deferred maintenance reduction plan and $13,000,000 to construct a new
nursing facility. The bonds sold as a package on January 14, 2009 at a true
interest cost of 4.34%.
Therefore, upon motion by Regent Ertz, seconded by Regent Pond, with all members
voting aye, the resolution was passed authorizing the sale of the Texas Public Finance
Authority Revenue Financing System Revenue Bonds, Series 2009, in the aggregate
principal amount not to exceed $23,000,000. The board approved Wells Fargo as the
paying agent and approved execution of the paying agent/registrar agreement.
Authorization was given for the president or vice president for finance and administration
to sign the relevant bond issue documents.
The meeting was adjourned at 10:04 a.m.
CERTIFICATE FOR RESOLUTION
The undersigned officers of the Board of Regents of Stephen F. Austin State University (the
"Issuer") hereby certify as follows:
1. The Board of Regents of the Issuer convened in a SPECIALLY CALLED MEETING
ON THE 15TH DAY OF JANUARY, 2009 via telephonic conference call, and the roll was called
of the duly constituted members of said Board of Regents, to-wit:
Joe Max Green, Chair
James A. Thompson, Vice Chair
Melvin R. White, Secretary
Carlos Z. Amaral
Richard B. Boyer
James Hinton Dickerson
Valerie E. Ertz
John R. "Bob" Garrett
Paul G. Pond
and all of said persons were present, except the following absentees: James Hinton Dickerson and
James A. Thompson, thus constituting a quorum. Whereupon, among other business, the following
was transacted at said Meeting: a written
RESOLUTION AUTHORIZING THE SALE OF THE TEXAS PUBLIC FINANCE
AUTHORITY STEPHEN F. AUSTIN STATE UNIVERSITY REVENUE FINANCING
SYSTEM REVENUE BONDS, SERIES 2009, IN THE AGGREGATE PRINCIPAL
AMOUNT NOT TO EXCEED $23,000,000; AUTHORIZING ACTIONS BY THE TEXAS
PUBLIC FINANCE AUTHORITY AND REPRESENTATIVES THEREOF IN
CONNECTION WITH THE SALE AND DELIVERY OF SAID BONDS; AND
RESOLVING OTHER MATTERS RELATED THERETO
was duly introduced for the consideration of said Board. It was then duly moved and seconded that
said Resolution be adopted; and, after due discussion, said motion, carrying with it the adoption of
said Resolution, prevailed and carried by the following vote:
AYES: 7
NOES: 0
2. That a true, full, and correct copy of the aforesaid Resolution adopted at the Meeting
described in the above and foregoing paragraph is attached to and follows this Certificate; that said
Resolution has been duly recorded in said Board's minutes of said Meeting; that the above and
foregoing paragraph is a true, full, and correct excerpt from said Board's minutes of said Meeting
TPFA/SFASU: HEAFBonds08\Res.Cert
pertaining to the adoption of said Resolution; that the persons named in the above and foregoing
paragraph are the duly chosen, qualified, and acting officers and members of the Issuer as indicated
therein; that each of the officers and members of the Issuer was duly and sufficiently notified officially
and personally, in advance, of the time, place and purpose of the aforesaid Meeting; that said Meeting
was conducted in accordance with all applicable laws, and that said Resolution would be introduced
and considered for adoption at said Meeting, and each of said officers and members consented, in
advance, to the holding of said Meeting for such purpose; 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.
[THE REMAINDER OF TfflS PAGE IS INTENTIONALLY LEFT BLANK]
TPFA/SFASU: HEAFBonds08\Res.Cert
SIGNED this JanuAra 2.5, 2P0°i.
J ____ _
Secrdfaj/ ' ^^ Chaiirr U
RESOLUTION
AUTHORIZING THE SALE OF THE TEXAS PUBLIC
FINANCE AUTHORITY STEPHEN F. AUSTIN STATE
UNIVERSITY REVENUE FINANCING SYSTEM REVENUE
BONDS, SERIES 2009, IN THE AGGREGATE PRINCIPAL
AMOUNT NOT TO EXCEED $23,000,000; AUTHORIZING
ACTIONS BY THE TEXAS PUBLIC FINANCE AUTHORITY
AND REPRESENTATIVES THEREOF IN CONNECTION
WITH THE SALE AND DELIVERY OF SAID BONDS; AND
RESOLVING OTHER MATTERS RELATED THERETO
ADOPTED DECEMBER 11, 2008
TPFA-SFA2008\Bond Resolution
RESOLUTION
AUTHORIZING THE SALE OF THE TEXAS PUBLIC
FINANCE AUTHORITY STEPHEN F. AUSTIN STATE
UNIVERSITY REVENUE FINANCING SYSTEM REVENUE
BONDS, SERIES 2009, IN THE AGGREGATE PRINCIPAL
AMOUNT NOT TO EXCEED $23,000,000; AUTHORIZING
ACTIONS BY THE TEXAS PUBLIC FINANCE AUTHORITY
AND REPRESENTATIVES THEREOF IN CONNECTION
WITH THE SALE AND DELIVERY OF SAID BONDS; AND
RESOLVING OTHER MATTERS RELATED THERETO
TABLE OF CONTENTS
Page
PREAMBLE 1
Section 1. REVENUE FINANCING SYSTEM AND ISSUANCE
OF PARITY OBLIGATIONS 3
Section 2. SECURITY AND PLEDGE 4
Section 3. COVENANTS RELATING TO PLEDGED REVENUES 4
Section 4. GENERAL COVENANTS 6
Section 5. ISSUANCE OF ADDITIONAL OBLIGATIONS 9
Section 6. DISPOSITION OF ASSETS ATTRIBUTABLE TO
FINANCING SYSTEM PARTICIPANTS 9
Section 7. COMBINATION, DIVISION, RELEASE AND ADMISSION
OF NEW INSTITUTIONS UNDER THE FINANCING SYSTEM .... 10
Section 8. WAIVER OF CERTAIN COVENANTS 11
Section 9. AMOUNT, PURPOSE, AND DESIGNATION OF THE BONDS .... 11
Section 10. DATE, DENOMINATIONS, NUMBERS, MATURITIES
AND TERMS OF BONDS 11
Section 11. INTEREST 14
TPFA-SFA2008\Bond Resolution
Page
Section 12. REGISTRATION, TRANSFER, AND EXCHANGE;
AUTHENTICATION; BOOK-ENTRY-ONLY SYSTEM 14
Section 13. FORM OF BONDS 19
Section 14. INDIVIDUALS NOT LIABLE 19
Section 15. SECURITY FOR THE BONDS 19
Section 16. PAYMENTS 19
Section 17. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
BONDS 19
Section 18. REMEDIES 20
Section 19. DEFEASANCE OF OBLIGATIONS 21
Section 20. AMENDMENT OF RESOLUTION 22
Section 21. COVENANTS REGARDING TAX-EXEMPTION 24
Section 22. RESERVED 27
Section 23. RESERVED 27
Section24. COMPLIANCEWITHRULE 15c2-12 27
Section 25. RESOLUTION TO CONSTITUTE A CONTRACT; EQUAL
SECURITY 30
Section 26. SEVERABILITY OF INVALID PROVISIONS 30
Section 27. PAYMENT AND PERFORMANCE ON BUSINESS DAY 30
Section 28. LIMITATION OF BENEFITS WITH RESPECT TO
THERESOLUTION 30
Section 29. CUSTODY, APPROVAL, BOND COUNSEL'S OPINION,
CUSIP NUMBERS, PREAMBLE AND INSURANCE 31
Section 30. FURTHER PROCEDURES 31
TPFA-SFA2008\Bond Resolution U
Page
Section 31. REPEAL OF CONFLICTING RESOLUTIONS 31
Section 32. REFERENCES TO AUTHORITY 31
Section 33. PERFECTION OF PLEDGE 32
Section 34. BOND INSURANCE 32
Section35. PUBLICNOTICE 32
SCHEDULE I
EXHIBIT A DEFINITIONS A-l
EXHIBIT B FORM OF BONDS B-l
EXHIBIT C DESCRIPTION OF ANNUAL FINANCIAL INFORMATION C-l
■n>FA-SFA2008\Bon<l Resolution 111
RESOLUTION
AUTHORIZING THE SALE OF THE TEXAS PUBLIC
FINANCE AUTHORITY STEPHEN F. AUSTIN STATE
UNIVERSITY REVENUE FINANCING SYSTEM REVENUE
BONDS, SERIES 2009, IN THE AGGREGATE PRINCIPAL
AMOUNT NOT TO EXCEED $23,000,000; AUTHORIZING
ACTIONS BY THE TEXAS PUBLIC FINANCE AUTHORITY
AND REPRESENTATIVES THEREOF IN CONNECTION
WITH THE SALE AND DELIVERY OF SAID BONDS; AND
RESOLVING OTHER MATTERS RELATED THERETO
WHEREAS, the Board of Regents (the "Board") of Stephen F. Austin State University (the
"University") heretofore authorized, issued, and delivered various series of bonds hereinafter defined
as the "Outstanding Revenue Bonds"; and
WHEREAS, in order to reduce costs, increase borrowing capacity, provide additional
security to the credit markets, and provide the Board with greater financial flexibility, the Board
deemed it necessary and desirable to establish a revenue financing program for revenue supported
indebtedness to provide funds to acquire, purchase, construct, improve, renovate, enlarge or equip
property, buildings, structures, facilities, roads, or related infrastructure at the University, as well as
any institution, branch or entity hereafter placed under the control and governance of the Board, to
the extent permitted by Chapter 55, Texas Education Code, including specifically, but not by way of
limitation, Section 55.02 thereof; and
WHEREAS, the Texas Public Finance Authority (the "Authority") is a public authority and
body politic and corporate duly established and existing under the laws of the State of Texas,
including particularly Chapter 1232, Texas Government Code (the successor provision to Article
60Id, Texas Revised Civil Statutes, as amended, and hereafter referred to as the "TPFA Act"); and
WHEREAS, Section 1232.101 of the TPFA Act recites that the Authority has the exclusive
authority to act on behalf of the University in issuing certain bonds on its behalf; and
WHEREAS, Section 55.13(c), Texas Education Code, provides that the Authority shall
exercise the authority of the Board to issue bonds on behalf of the University, in the manner provided
by Subchapter B of Chapter 55, Texas Education Code; and
WHEREAS, Section 55.13, Texas Education Code, recites that the Authority has all the
rights and duties granted or assigned to and is subject to the same conditions as the Board under
Chapter 55, Texas Education Code; and
WHEREAS, the resolution entitled "RESOLUTION AUTHORIZING THE SALE OF
THE BOARD OF REGENTS OF STEPHEN F. AUSTIN STATE UNIVERSITY REVENUE
FINANCING SYSTEM, TEXAS PUBLIC FINANCE AUTHORITY REVENUE BONDS,
TPFA-SFA2008\Bond Resolution
SERIES 1998, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $6
MILLION; AUTHORIZING ACTIONS BY THE TEXAS PUBLIC FINANCE AUTHORITY,
STEPHEN F. AUSTIN STATE UNIVERSITY AND REPRESENTATIVES THEREOF IN
CONNECTION WITH THE SALE AND DELIVERY OF SAID BONDS; AND RESOLVING
OTHER MATTERS RELATED THERETO1 f (the "Underlying Resolution") was adopted by the
Board on July 14, 1998 and by the Authority on August 12, 1998; and
WHEREAS, the Underlying Resolution established the Stephen F. Austin State University
Revenue Financing System for the purpose of providing a financing structure for revenue supported
indebtedness at the University; and
WHEREAS, pursuant to the terms of the Underlying Resolution, the Authority delivered its
Board of Regents of Stephen F. Austin State University Revenue Financing System, Texas Public
Finance Authority Revenue Bonds, Series 1998, in the aggregate principal amount of $6,000,000 (the
"Series 1998 Bonds"); and
WHEREAS, pursuant to the terms of resolutions adopted in compliance with the
requirements of the Underlying Resolution by the Board and by the Authority, the Authority delivered
multiple series of its Board of Regents of Stephen F. Austin State University Revenue Financing
System, Texas Public Finance Authority Revenue Bonds, Series 2000, Board of Regents of Stephen
F. Austin State University Revenue Financing System, Texas Public Finance Authority Revenue
Bonds, Series 2002, Board of Regents of Stephen F. Austin State University Revenue Financing
System, Texas Public Finance Authority Revenue Bonds, Series 2002 A, Board of Regents of Stephen
F. Austin State University Revenue Financing System, Texas Public Finance Authority Revenue
Bonds, Series 2004, Board of Regents of Stephen F. Austin State University Revenue Financing
System, Texas Public Finance Authority Revenue Bonds, Series 2004 A, Board of Regents of Stephen
F. Austin State University Revenue Financing System, Texas Public Finance Authority Revenue
Bonds, Series 2005, Board of Regents of Stephen F. Austin State University Revenue Financing
System, Texas Public Finance Authority Revenue Bonds, Series 2005 A, Board of Regents of Stephen
F. Austin State University Revenue Financing System, Texas Public Finance Authority Revenue
Bonds, Series 2008 (the "Series 2000 Bonds," the "Series 2002 Bonds," the "Series 2002ABonds,"
the "Series 2004 Bonds," the "Series 2004A Bonds," the "Series 2005 Bonds," the "Series 2005A
Bonds," the "Series 2008 Bonds" and collectively with the Series 1998 Bonds, the "Previously Issued
Parity Obligations");
WHEREAS, the Previously Issued Parity Obligations were secured by a lien on and pledge
of the "Pledged Revenues" (as defined in the Underlying Resolution), which lien and pledge were
made subject to the lien on and pledge of the "Prior Encumbered Revenues" (as defined in the
Underlying Resolution) securing the Outstanding Revenue Bonds; and
WHEREAS, the Underlying Resolution permits the Authority, at the request of the Board,
to issue "Parity Obligations" secured by a lien on and pledge of the Pledged Revenues on a parity with
the Previously Issued Parity Obligations; and
TPFA-SFA2008\Bond Resolution
WHEREAS, the Board has requested that the Authority issue bonds on behalf of the
University, pursuant to the authorization granted to the University by Subchapter B of Chapter 55
of the Texas Education Code, including specifically Sections 55.1758 and 55.1768, thereof, as Parity
Obligations under the Underlying Resolution, and further requests that the Authority adopt this
Resolution in furtherance of such objective; and
WHEREAS, the bonds hereinafter authorized to be issued under the provisions of Section
55,1758, Texas Education Code, represent the second installment of bonds issued under such
statutory authority and the bonds authorized to be issued under the provisions of Section 55.1768,
Texas Education Code, represent the first installment of bonds issued under such statutory authority;
and
WHEREAS, the Authority finds it necessary and advisable to adopt this Resolution, and
further acknowledges that by adopting this Resolution it will be bound by and agrees to follow the
covenants set forth in this Resolution in its capacity of effecting the sale of the bonds hereinafter
described on behalf of the University; and
WHEREAS, the Board finds it necessary and advisable to adopt this Resolution, and further
acknowledges that by adopting this Resolution it will be bound by and agrees to follow the covenants
set forth in this Resolution; and
WHEREAS, the terms used in this Resolution and not otherwise defined shall have the
meaning given in Exhibit "A" to this Resolution attached hereto and made a part hereof;
NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF REGENTS OF
STEPHEN F. AUSTIN STATE UNIVERSITY:
NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF
THE TEXAS PUBLIC FINANCE AUTHORITY:
Section 1. REVENUE FINANCING SYSTEM AND ISSUANCE OF PARITY
OBLIGATIONS. In the Underlying Resolution, the Stephen F. Austin State University Revenue
Financing System (the "Financing System") has been established, for the purpose of providing a
financing structure for revenue supported indebtedness to provide funds to acquire, purchase,
construct, improve, renovate, enlarge or equip property, buildings, structures, facilities, roads or
related infrastructure at the University, as well as at any institution, branch or entity hereafter placed
under the control and governance of the Board, under authority of the pertinent provisions of the
Texas Education Code.
Section 2. SECURITY AND PLEDGE, (a) Pledge. Subject to the provisions of the
resolutions authorizing Prior Encumbered Obligations, Parity Obligations shall be secured by and
payable from a lien on the Pledged Revenues, and the Board hereby assigns and pledges the Pledged
Revenues to the payment of the principal of, premium, if any, and interest on Parity Obligations, and
TPFA-SFA2008\Bond Resolution
the Pledged Revenues are further pledged to the establishment and maintenance of any funds which
may be provided to secure the repayment of Parity Obligations in accordance with this Resolution.
The Authority, upon approval and consent of the Board, may execute and deliver one or more Credit
Agreements to additionally secure Parity Obligations. Credit Agreements may also be secured by a
pledge of Pledged Revenues on a parity with or subordinate to Parity Obligations.
(b) Additional Participants As provided in Section 7 of this Resolution, institutions which
may hereafter come under the control and governance of the Board may become Participants in the
Financing System and such institutions may, at such time, have outstanding obligations secured by
the Prior Encumbered Revenues and that, therefore, the lien on and pledge of the Pledged Revenues
established pursuant to this Resolution and effective when such institutions become Participants in
the Financing System will be subject and subordinate only to such institutions' outstanding Prior
Encumbered Obligations.
(c) Restriction on Issuance of Additional Debt on a Parity with Prior Encumbered
Obligations. Except as provided in Section 4(g) and for so long as any Parity Obligations are
Outstanding, no additional bonds, notes, or other obligations may be issued or incurred by the Board
on a parity with any Prior Encumbered Obligations.
(d) Parity Obligations are Special Obligations. All Parity Obligations and the premium, if
any, and the interest thereon shall constitute special obligations of the Board payable from the
Pledged Revenues, and the owners thereof shall never have the right to demand payment out of funds
raised or to be raised by taxation, or from any source other than the source specified in this
Resolution. The obligation of the Board to pay or cause to be paid the amounts payable under this
Resolution out of the Pledged Revenues shall be absolute, irrevocable, complete, and unconditional,
and the amount, manner, and time of payment of such amounts shall not be decreased, abated,
rebated, set-off, reduced, abrogated, waived, diminished, or otherwise modified in any manner or to
any extent whatsoever, regardless of any right of setoff, recoupment, or counterclaim that the Board
might otherwise have against any owner or any other party and regardless of any contingency, force
majeure, event, or cause whatsoever and notwithstanding any circumstance or occurrence that may
arise or take place before, during, or after the issuance of Parity Obligations while any Parity
Obligations are Outstanding.
Section 3. COVENANTS RELATING TO PLEDGED REVENUES (a) Rate
Covenant. In each Fiscal Year, the Board shall establish, charge, and use its reasonable efforts to
collect at each Participant the Pledged Revenues which, if collected, would be sufficient to meet all
financial obligations of the Board for such Fiscal Year relating to the Financing System including all
deposits or payments due on or with respect to (i) the Prior Encumbered Obligations and (ii) all
Outstanding Parity Obligations.
(b) Tuition. Subject to the provisions of the resolutions authorizing Prior Encumbered
Obligations and to the other provisions of this Resolution, the Board covenants and agrees to fix,
levy, charge and collect at each Participant student tuition charges required or authorized by law to
TPFA-SFA2008\Bond Resolution
be imposed on students enrolled at each Participant (excepting, with respect to each series or issue
of Parity Obligations, any student in a category which, at the time of adoption of a resolution relating
to such Parity Obligations, is exempt by law or by the Board from paying such tuition charges). Each
student (excluding those exempt from payment as provided above), enrolled at each Participant,
respectively, at each regular fall and spring semester and at each term of each summer session, shall
pay tuition charges in such amounts, without any limitation whatsoever, as will be sufficient at all
times, together with other legally available funds, including other Pledged Revenues, to provide the
money to make or pay the principal of, interest on, and other payments or deposits with respect to
Outstanding Parity Obligations when and as required. All changes in the tuition charged students at
each Participant shall be made by resolution of the Board, but such procedure shall not constitute or
be regarded as an amendment of this Resolution, but merely the carrying out of the provisions and
requirements hereof.
(c) Student Center Fees. Subject to the provisions of the resolution authorizing the Series
2004 Bonds, the Board covenants and agrees to fix, levy, charge and collect student center fees
required or authorized by law to be imposed on students pursuant to Section 54.520 of the Texas
Education Code for the purpose of paying debt service on the Series 2004 Bonds; provided however,
that such student center fees shall be used only for the purpose of acquiring, constructing, renovating,
operating, maintaining, improving, equipping and financing a university center or additions to the
center.
(d) Student Recreational Sport Fees. Subject to the provisions of the resolution authorizing
the Series 2005A Bonds, the Board covenants and agrees to fix, levy, charge and collect student
recreational sport fees required or authorized by law to be imposed on students .pursuant to Section
54.5201 of the Texas Education Code for the purpose of paying debt service on the Series 2005 A
Bonds; provided however, that such student recreational sport fees shall be used only to purchase
equipment for and to construct, operate and maintain recreational sports facilities and programs.
(e) Anticipated Deficit. If the Board determines, for any reason whatsoever, that there are
not anticipated to be legally available funds, including Pledged Revenues, sufficient to meet all
financial obligations of the Board relating to the Financing System including the deposits and
payments due on or with respect to Outstanding Parity Obligations as the same mature or come due,
or that any Participant in the Financing System will be unable to pay its Annual Direct Obligation in
full, then the Board shall fix, levy, charge, and collect such rentals, rates, fees, tuition, or other
charges at each Participant in the Financing System with enrolled students, effective at the next
succeeding regular semester or semesters or summer term or terms, in such amounts, without any
limitation whatsoever (other than as provided in subsection (f) below), as will be at least sufficient
to provide, together with other legally available funds, including Pledged Revenues, the money for
making when due all financial obligations of the Board relating to the Financing System including all
payments and deposits due on or with respect to Outstanding Parity Obligations when and as required
by this Resolution.
(f) Economic Effect of Adjustments. Any adjustments in the rate or manner of charging for
any rentals, rates, fees, tuition, or other charges included in Pledged Revenues at any Participant in
TPFA-SFA2008\Bond Resolution 5
the Financing System resulting from an event described in subsection (e) above will be based upon
a certificate and recommendation of the Designated Financial Officer, delivered to the Board, as to
the rates and anticipated collection of the Pledged Revenues at each Participant in the Financing
System (after taking into account the anticipated effect the proposed adjustments in such rentals,
rates, fees, tuition, or other charges would have on enrollment and the receipt of Pledged Revenues
and other funds at each Participant in the Financing System) which will be anticipated to result in (i)
Pledged Revenues attributable to each Participant being sufficient (to the extent possible) to satisfy
the Annual Obligation of such Participant and (ii) Pledged Revenues being sufficient, together with
other legally available funds, to meet all financial obligations of the Board relating to the Financing
System including all deposits and payments due on or with respect to (A) the Prior Encumbered
Obligations and (B) all Outstanding Parity Obligations, when and as required by this Resolution.
(g) Annual Obligation. If, in the judgment of the Board, any Participant in the Financing
System has been or will be unable to satisfy its Annual Obligation, the Board shall fix, levy, charge,
and collect rentals, rates, fees, and charges for goods and services furnished by such Participant and,
with respect to Participants with enrolled students, tuition, effective at the next succeeding regular
semester or semesters or summer term or terms, in amounts sufficient, without limit (subject to the
provisions of (d) above), together with other legally available funds, including other Pledged
Revenues attributable thereto, to enable it to make its Annual Obligation payments.
(h) Additional Participants. The Board hereby agrees to apply the covenants hereinabove
made to any institution, branch or entity hereinafter placed under the control and governance of the
Board and added as a Participant in the Financing System in accordance with the provisions of
Section 7 hereof.
Section 4. GENERAL COVENANTS. The Board further represents, covenants, and
agrees that while any Parity Obligations or interest thereon is Outstanding:
(a) Payment of Parity Obligations. On or before each payment date it shall make available
to the Paying Agent for such Parity Obligations or to such other party as required by the resolution
authorizing the sale of such Parity Obligations, money sufficient to pay the interest on, principal of,
and premium, if any, on the Parity Obligations as will accrue or otherwise come due or mature, or
be subject to mandatory redemption prior to maturity, on such date and the fees and expenses related
to the Parity Obligations, including the fees and expenses of the Paying Agent and any Registrar,
trustee, remarketing agent, tender agent, or Credit Provider.
(b) Performance. It will faithfully perform at all times any and all covenants, undertakings,
stipulations, and provisions contained in this Resolution, and in each and every Parity Obligation or
evidence thereof
(c) Redemption. It will duly cause to be called for redemption prior to maturity, and will
cause to be redeemed prior to maturity, all Parity Obligations which by their terms are mandatorily
required to be redeemed prior to maturity, when and as so required.
TPFA-SFA2008\Bond Resolution
(d) Lawful Title. It lawfully owns, has title to, or is lawfully possessed of the lands,
buildings, and facilities now constituting the University, and it will defend said title and title to any
lands, buildings, and facilities which may hereafter become part of the Financing System, for the
benefit of the owners of Parity Obligations against the claims and demands of all persons
whomsoever.
(e) Lawful Authority. It is lawfully qualified to pledge the Pledged Revenues herein pledged
in the manner prescribed herein and has lawfully exercised such right.
(f) Preservation of Lien. Subject to the conditions set forth in Sections 5, 6, and 7 of this
Resolution, it will not do or suffer any act or thing whereby the Financing System might or could be
impaired, and that it will at all times maintain, preserve, and keep the real and tangible property of
the Financing System and every part thereof in good condition, repair, and working order and
operate, maintain, preserve, and keep the facilities, buildings, structures, and equipment pertaining
thereto in good condition, repair, and working order.
(g) No Additional Encumbrance. It shall not incur additional Debt secured by the Pledged
Revenues in any manner, except as permitted by this Resolution in connection with Parity Obligations,
unless said Debt is made junior and subordinate in all respects to the liens, pledges, covenants, and
agreements of this Resolution. Notwithstanding anything to the contrary contained herein, and in
addition to the right hereunder to refund the Prior Encumbered Obligations with Parity Obligations,
the Board reserves the right to issue obligations to refund any Prior Encumbered Obligations and to
secure the refunding obligations with the same source or sources securing the Prior Encumbered
Obligations being refunded. Upon the defeasance of the refunded Prior Encumbered Obligations, the
refunding obligations will be Prior Encumbered Obligations (unless the refunding obligations are
made Parity Obligations in accordance with the terms of this Resolution and the resolution
authorizing their issuance) under this Resolution for all purposes.
(h) Investments and Security. It will invest and secure money in all accounts and funds
established pursuant to this Resolution in the manner prescribed by law for such funds, including, but
not by way of limitation, the Public Funds Investment Act (Chapter 2256, Texas Government Code),
Chapter 163, Texas Property Code, and Section 51.0031, Texas Education Code, and in accordance
with written policies adopted by the Board.
(i) Records. It will keep proper books of record and account in which full, true, and correct
entries will be made of all dealings, activities, and transactions relating to the University. Each year
while Parity Obligations are Outstanding, the Board will cause to be prepared from such books of
record and account an annual financial report of the University and shall furnish such report to the
Authority, to the principal municipal bond rating agencies, and to any owner of Parity Obligations
who shall request same. In addition, the Board shall submit such financial report and other
information required by law for examination in connection with financial compliance and other audits
required to be conducted by the office of the Auditor of the State of Texas.
TPFA-SFA2008\Bond Resolution
(j) Inspection of Books. It will permit the Authority and any owner or owners of twenty-five
percent (25%) or more of the then Outstanding Principal Amount at all reasonable times to inspect
all records, accounts, and data of the Board relating to the University and the Financing System.
(k) Annual and Direct Obligations. In establishing the annual budget for each Participant
in the Financing System, it shall provide for the satisfaction by each Participant in the Financing
System of its Annual Obligation. The Direct Obligation shall represent the financial responsibility of
each Participant in the Financing System with respect to Outstanding Parity Obligations. Each such
Participant's Direct Obligation and Annual Obligation shall be evidenced by a financing agreement
between the Board and each Participant.
(1) Determination of Outstanding Parity Obligations. For all purposes of this Resolution,
the judgment of the chief financial officer of the University, presently the Vice President for Finance
and Administration, shall be deemed final in the determination of which obligations of the Board
constitute Parity Obligations; provided, however, such judgment is subject to confirmation by the
Auditor of the State of Texas in connection with the annual audit of the records of the University.
(m) Execution of Credit Agreements, (i) For so long as the Authority possesses the
exclusive authority to issue bonds on behalf of the University, should the Board or the Authority
determine that it is in the best interests of the University to obtain a Credit Agreement to enhance the
security for or provide for the payment, redemption, or remarketing of Parity Obligations, the
Authority, upon approval of the Attorney General and approval and consent of the Board, may from
time to time and at any time execute and deliver a Credit Agreement to which the Pledged Revenues
are to be pledged. The Authority agrees that it shall use reasonable efforts to negotiate and deliver,
on behalf of the University, a Credit Agreement containing terms and conditions mutually acceptable
to the Authority and the Board; provided, however, that prior to the Authority adopting any
resolution authorizing the execution and delivery of any such Credit Agreement, it shall receive from
the University an Officer's Certificate to the effect that (i) the Board has determined that the
Participant for whom the Credit Agreement is to be executed and delivered possesses the financial
capability to satisfy its Direct Obligation after taking into account the payment obligations under the
proposed Credit Agreement, and (ii) to the best of his or her knowledge, the Board is in compliance
with all covenants contained in this Resolution and any resolution adopted authorizing the issuance
of Parity Obligations, and is not in default in the performance and observance of any of the terms,
provisions, and conditions hereof or thereof.
(ii) The Board agrees to provide promptly to the Authority substantially final versions of all
documents pertaining to any "credit agreement" (as defined in Chapter 1371, Texas Government
Code), to which the Pledged Revenues are to be pledged, proposed to be executed and delivered by
the Board to enhance the security for or provide for the payment, redemption, or remarketing of the
Prior Encumbered Obligations. The Board further agrees that it shall give written notice to the
Authority no later than thirty (30) days prior to the date the Board considers for approval any
resolution authorizing the execution and delivery of any such credit agreement. The lien on and
pledge of Pledged Revenues to pay the cost of any such credit agreement may be on a parity with,
but not superior to, the lien on and pledge of the Pledged Revenues securing the Parity Obligations.
TPFA-SFA2008\Bond Resolution
Section 5. ISSUANCE OF ADDITIONAL OBLIGATIONS (a) Parity Obligations.
The Board reserves and shall have the right and power to issue or incur, or request that the Authority,
on its behalf, issue or incur, Parity Obligations for any purpose authorized by law pursuant to the
provisions of this Resolution and the applicable laws of the State of Texas governing the issuance of
bonds for the benefit of the University. The Board, or the Authority acting on behalf of the Board,
may incur, assume, guarantee, or otherwise become liable in respect of any Parity Obligations if the
Board shall have determined that it will have sufficient funds to meet the financial obligations of each
Participant (currently the University) in the Financing System, including sufficient Pledged Revenues
to satisfy the Annual Debt Service Requirements of the Financing System and to meet all financial
obligations of the Board relating to the Financing System. In addition, the Board shall not issue or
incur Parity Obligations unless (i) the Board shall determine that the Participant for whom the Parity
Obligations are being issued or incurred possesses the financial capability to satisfy its Direct
Obligation after taking into account the then proposed Parity Obligations, and (ii) a Designated
Financial Officer shall deliver to the Board and the Authority a certificate stating that, to the best of
his or her knowledge, the Board is in compliance with all covenants contained in this Resolution and
any resolution adopted authorizing the issuance of Parity Obligations, and is not in default in the
performance and observance of any of the terms, provisions, and conditions hereof or thereof.
(b) Non-Recourse Debt and Subordinated Debt. Non-Recourse Debt and Subordinated
Debt may be incurred by the Board without limitation, subject to the applicable laws of the State of
Texas.
Section 6. DISPOSITION OF ASSETS ATTRIBUTABLE TO FINANCING SYSTEM
PARTICIPANTS. The Board may convey, sell, or otherwise dispose of any properties of each
Participant (currently the University) in the Financing System provided:
(a) Ordinary Course. Such conveyance, sale, or disposition shall be in the ordinary course
of business of such Participant which uses, operates, owns, or is otherwise responsible for such
properties; or
(b) Disposition Upon Board Determination. The Board shall determine that after the
conveyance, sale, or other disposition of such properties, the Board shall have sufficient funds during
each Fiscal Year during which Parity Obligations are to be Outstanding to meet the financial
obligations of each Participant in the Financing System, including sufficient Pledged Revenues to
satisfy the Annual Debt Service Requirements of the Financing System and to meet all financial
obligations of the Board relating to the Financing System.
Section 7. COMBINATION, DIVISION, RELEASE AND ADMISSION OF NEW
INSTITUTIONS UNDER THE FINANCING SYSTEM (a) Combination and Division.
Notwithstanding anything to the contrary contained herein, it is recognized that certain institutions
which may become Participants in the Financing System may be combined or divided and that so long
as such combined or divided institutions continue to be governed by the Board such action shall not
TPFA-SFA2008\Bond Resolution
be in violation of the provisions of this Resolution or require any amendments of the provisions
hereof.
(b) Release. Subject to the conditions set forth below, any Participant in the Financing
System or portion thereof may be closed and abandoned by law or may be removed from the
Financing System (thus deleting the revenues, income, funds and balances attributable to said
Participant or portion thereof from Pledged Revenues) without violating the terms of this Resolution
provided:
(1) the Board approves and delivers to the Authority an Officers1 Certificate to the
effect that, to the knowledge thereof, after the release of such Participant or portion thereof,
the Board will have sufficient funds during each Fiscal Year in which Parity Obligations shall
thereafter be Outstanding to meet the financial obligations of the Board, including sufficient
Pledged Revenues to satisfy the Annual Debt Service Requirements of the Financing System
and to meet all financial obligations of the Board relating to the Financing System; and
(2) the Board and the Authority receive an Opinion of Counsel which shall state that
such release will not affect the status for federal income tax purposes of interest on any
Outstanding Parity Obligations and that all conditions precedent provided in this Resolution
or any resolution hereafter adopted governing the issuance of Parity Obligations relating to
such release have been complied with; and
(3) (A) if the Participant or portion thereof to be released from the Financing
System is to remain under the governance and control of the Board, the Board must either
(i) provide, from lawfully available funds, including Pledged Revenues attributable to said
withdrawing Participant, for the payment or discharge of said Participant's Direct Obligation
or (ii) pledge to the payment of Parity Obligation, additional resources not then pledged in
an amount sufficient to satisfy such withdrawing Participant's Direct Obligation; or
(B) if the Participant or portion thereof to be released from the Financing
System is to no longer be under the governance and control of the Board and remains in
operation independent of the Board, the Board must enter into a binding obligation with the
new governing body of the withdrawing institution or the portion thereof being withdrawn,
obligating said governing body to make payments to the Board at the times and in the
amounts equal to said Participant's Annual Obligation or to pay or discharge said Participant's
Direct Obligation, or, in the case of a portion of a Participant being withdrawn, the proportion
of the Participant's Annual Obligation or Direct Obligation, as the case may be, attributable
to the withdrawing portion of the Participant.
(c) If, after the date of the adoption of this Resolution, the Board desires for an institution
or agency governed by the Board to become a Participant of the Financing System, or if the Board
is required by law to assume the governance of an institution or agency, it may include said institution
or agency in the Financing System with the effect set forth in this Resolution by the adoption of a
resolution amending this Resolution, which resolution shall be binding upon the Authority.
TPFA-SFA2008\Bond Resolution 10
Sections WAIVER OF CERTAIN COVENANTS. TheBoard may omit in any particular
instance to comply with any covenant or condition set forth in Sections 3 through 7 hereof if before
or after the time for such compliance the Holders of the same percentage in principal amount of all
Parity Obligations then Outstanding, the consent of which would be required to amend the provisions
hereof to permit such noncompliance, shall either waive such compliance in such instance or generally
waive compliance with such covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived and, until such waiver shall become
effective, the obligations of the Board and the duties of the Board in respect to any such covenant
or condition shall remain in full force and effect. For purposes of this Section, if a municipal bond
insurance policy has been issued insuring the payment of any Outstanding Parity Obligations, the term
Holder shall mean the company that has issued any such insurance policy or policies.
Section 9. AMOUNT, PURPOSE, AND DESIGNATION OF THE BONDS The
"TEXAS PUBLIC FINANCE AUTHORITY STEPHEN R AUSTIN STATE UNIVERSITY
REVENUE FINANCING SYSTEM REVENUE BONDS, SERIES 2009\ are hereby authorized
to be issued and delivered in the aggregate principal amount not to exceed $23,000,000 FOR THE
PURPOSE OF (i) FINANCING CAMPUS IMPROVEMENTS AT THE UNIVERSITY,
WCLUDWGACQUIRING, PURCHASING, CONSTRUCTING, IMPROVING, RENOVATING,
ENLARGING, OR EQUIPPING PROPERTY, BUILDINGS, STRUCTURES, FACILITIES,
ROADS, ORRELATED INFRASTRUCTURE FORTHE EXPANSION OF THE SCHOOL OF
NURSING FACILITIES, (ii) FINANCING OF CAMPUS DEFERRED MAINTENANCE
REDUCTION PLAN, INCLUDING ACQUIRING, PURCHASING, CONSTRUCTING,
IMPROVING, RENOVATING, ENLARGING, OR EQUIPPING FACILITIES, INCLUDING
ROADS AND RELATEDINFRASTRUCTUREAND (in) PA YING THE COSTS OF ISSUANCE
RELATED THERETO The sale of the Bonds shall be effected by the Authority pursuant to Section
1232.101 of the TPFA Act, Sections 55.13(c), 55.1758 and 55.1768, Texas Education Code and
Chapter 1371, Texas Government Code, as amended. The Bonds issued for the purposes described
in clauses (i) and (ii) above constitute all of the bonds authorized by Sections 55.1758 and 55.1768,
Texas Education Code, to be issued for the benefit of the University. The adoption of this resolution
by the Board shall be deemed to be a request by the Board to the Authority to issue the Bonds for
the purposes stated in this Section.
Section 10. DATE, DENOMINATIONS, NUMBERS, MATURITIES AND TERMS
OF BONDS, (a) Terms of Bonds. Initially there shall be issued, sold, and delivered hereunder fully
registered bonds, without interest coupons, numbered consecutively from R-1 upward (except the
initial Bonds delivered to the Attorney General of the State of Texas which shall be numbered from
T-l upward), payable to the respective initial registered owners thereof, or to the registered assignee
or assignees of said bonds or any portion or portions thereof (in each case, the "Registered Owner"),
in the denomination of $5,000 or any integral multiple thereof (an "Authorized Denomination"),
maturing not later than October 15, 2029, serially or otherwise on the dates, in the years and in the
principal amounts, respectively, and dated, all as set forth in the Pricing Certificate of the Pricing
Committee. The authority of the Pricing Committee to execute and deliver a Pricing Certificate for
the Bonds shall expire at 5:00 p.m. C.S.T. on December 11, 2009.
TPFA-SFA2008\Bond Resolution 11
(b) Pricing Certificate. As authorized by Chapter 1371, Government Code, as amended, the
Pricing Committee is hereby authorized, appointed, and designated to act on behalf of the Board in
selling and delivering the Bonds and carrying out the other procedures specified in this Resolution,
including determining and fixing the date of the Bonds, any additional or different designation or title
by which the Bonds shall be known, the price at which the Bonds will be sold, the years in which the
Bonds will mature, the principal amount to mature in each of such years, the aggregate principal
amount of the Bonds, the rate or rates of interest to be borne by each maturity, the interest payment
periods, the dates, price, and terms upon and at which the Bonds shall be subject to redemption prior
to maturity at the option of the Board, as well as any mandatory sinking fund redemption provisions,
the amount of capitalized interest, if any, for the Bonds and all other matters relating to the issuance,
sale, and delivery of the Bonds, all of which shall be specified in a certificate of the Pricing Committee
delivered to the Secretary to the Board (the "Pricing Certificate"); provided that (i) the price to be
paid for the Bonds shall not be less than 95% of the aggregate original principal amount thereof plus
accrued interest, if any, thereon from its date to its delivery and (ii) the net effective interest rate for
the Bonds shall not be in excess of 8%.
It is further provided, however, that, notwithstanding the foregoing provisions, the Bonds
shall not be delivered unless prior to delivery of (i) the Pricing Certificate has been executed and
delivered as required by this Resolution and (ii) the Bonds have been rated by a nationally recognized
rating agency for municipal securities in one of the four highest rating categories for long term
obligations, as required by Chapter 1371, Government Code, as amended.
The Pricing Certificate is hereby incorporated in and made a part of this Resolution and shall
be filed in the minutes of the Board and university as a part of this Resolution. The Pricing Certificate
may be executed by any member of the Pricing Committee or the Executive Director of the Authority.
(c) Sale of Bonds. The Bonds should be sold by a negotiated sale, with Morgan Keegan &
Co. serving as the Senior Managing Underwriter. The Pricing Committee may designate additional
investment banking firms for a selling group as the Pricing Committee deems appropriate to assure
that the Bonds are sold on the most advantageous terms to the Revenue Financing System. The
Pricing Committee, acting for and on behalf of the Board, is authorized to enter into and carry out
a Bond Purchase Contract for the Bonds to be sold by negotiated sale, with the Underwriter at such
price, with and subject to such terms as determined by the Pricing Committee pursuant to Section
3(b) above. Each Bond Purchase Contract shall be substantially in the form and substance submitted
to the Board. The Bond Purchase Contract may be executed by any member of the Pricing
Committee or the Executive Director of the Authority.
The preliminary official statement and the use thereof in the solicitation of offers for the
purchase of the Bonds is hereby approved and the preliminary official statement is deemed final as
of its date (pursuant tot he Rule). The Authority authorizes the preliminary official statement to be:
(i) supplemented to include such additional information and amendments as may be
necessary to confirm the official statement to the terms of the Bonds and this Resolution; and
TPFA-SFA2008\Bond Resolution 12
(ii) modified if, in the opinion of Bond Counsel, such modification is necessary to satisfy
the disclosure requirements of the applicable federal securities laws.
Upon the final official statement being modified, if necessary, the final official statement, as
so supplemented and modified, shall be deemed to be approved by the Authority as the final official
statement (for purposes of the Rule) for the Bonds and an appropriate number of copies shall be
delivered to the Underwriters for use in connection with the officer and sale of the Bonds.
(d) Bond Proceeds; Deposit to Construction Fund. There is hereby created and established
a separate fund designated as thef' Stephen F. Austin State University Series 2009 Bond Proceeds
Construction Fund" (the "Construction Fund"). The Construction Fund shall be held by the
University with its depository bank or as otherwise directed by the University. Within the
Construction Fund there shall be established and maintained accounts designated as the "Accrued
Interest Account", the "Cost of Issuance Account" and the "Project Account", respectively.
Moneys deposited in the Construction Fund shall remain therein until from time to time expended
for the purposes described in this Resolution, and shall not be used for any other purposes
whatsoever, except as otherwise provided below, and pending such expenditure, moneys in the
Construction Fund may be invested at the direction of the Designated Financial Officer or the
designee thereof in eligible investments in accordance with the provisions of Section 4(h) of this
Resolution. Interest earnings shall accrue to the respective accounts in which moneys are held and
invested. The Authority shall cause such proceeds of the Bonds to be deposited to the credit of the
Construction Fund, in accordance with a letter of instructions which may be executed on behalf of
the Authority by its Executive Director, which letter shall designate the funds to be deposited to the
credit of the Accrued Interest Account, the Cost of Issuance Account and the Project Account;
provided, that only moneys representing accrued interest and premium, if any, received from the
proceeds of the Bonds shall be deposited to the credit of the Accrued Interest Account. Furthermore,
the Board agrees that any net premium received from the proceeds of the Bonds shall be deposited
to the Accrued Interest Account or applied to pay costs of issuance, and/or the underwriters' discount
to the extent permissible to ensure that the issuance of the Bonds does not result in construction
proceeds in excess of the maximum issuance authority set forth in Sections 55.1758 and 55.1768,
Texas Education Code, being received by the University. The University agrees that it shall pay from
the Cost of Issuance Account those costs of issuance incurred in connection with the issuance and
delivery of the Bonds as are consistent with the approval of the issuance of the Bonds by the Texas
Bond Review Board and are approved in writing by the Authority, acting through its Executive
Director. The University shall cause moneys on deposit in the Accrued Interest Account to be used
to pay debt service on the Bonds as the same shall become due and payable. The University agrees
to expend the moneys in the Project Account within the Construction Fund on costs incurred in
connection with the purposes described in Section 9 of this Resolution, consistent with the provisions
of Subchapter B, Chapter 55, Texas Education Code. Any amounts remaining in the Project Account
within the Construction Fund after the payment of all costs incurred in connection with the purposes
set out in clause (i) of Section 9 of this Resolution may be used to renovate existing structures and
facilities at the University as set out in clause (ii) of Section 9 of this Resolution. Any amounts
remaining in the Project Account within the Construction Fund after the payment of all costs incurred
TPFA-SFA2008\Bond Resolution 13
in connection with the purposes set out in clauses (i) and (ii) of Section 9 of this Resolution shall be
used for the payment of the principal of and interest on the Bonds as the same shall become due and
payable. The University shall provide to the Authority an Officer's Certificate, the form and substance
of which is described in the memorandum of understanding between the Authority and the Board
detailing the expenditure of bond proceeds. The Authority hereby finds that the deposit of the
proceeds from the sale of the Bonds in the manner outlined above is consistent with the conditions
surrounding the issuance of bonds previously issued directly by the University, and that the procedure
outlined above is adopted in accordance with Section 1232.101 of the TPFA Act.
(e) In General. The Bonds (i) may and shall be redeemed prior to the respective scheduled
maturity dates, (ii) maybe assigned and transferred, (iii) may be exchanged for other Bonds, (iv) shall
have the characteristics, and (v) shall be signed and sealed, and the principal of and interest on the
Bonds shall be payable, all as provided, and in the manner required or indicated, in the FORM OF
BONDS set forth in Exhibit "B" to this Resolution.
Section 11. INTEREST. The Bonds shall bear interest calculated on the basis of a 360-day
year composed of twelve 30-day months from the dates specified in the Pricing Certificate to their
respective dates of maturity at the rates per annum specified in the Pricing Certificate.
Section 12. REGISTRATION, TRANSFER, AND EXCHANGE;
AUTHENTICATION; BOOK-ENTRY-ONLY SYSTEM (a) Paying Agent/Registrar-.Wells
Fargo Bank, N.A, Austin, Texas, is hereby appointed to act as the Paying Agent/Registrar for the
Bonds. The Designated Financial Officer is authorized to enter into and carry out a Paying
Agent/Registrar Agreement with the Paying Agent/Registrar with respect to the Bonds, a copy of
which is attached to this Resolution.
(b) Registration Books. The Board shall keep or cause to be kept at the corporate trust
office of the Paying Agent/Registrar designated in the Paying Agent/Registrar Agreement (the
"Designated Trust Office") books or records for the registration of the transfer, exchange, and
replacement of the Bonds (the "Registration Books"), and the Paying Agent/Registrar is hereby
appointed to serve as registrar and transfer agent to keep such books or records and make such
registrations of transfers, exchanges, and replacements under such reasonable regulations as the
Board and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such
registrations, transfers, exchanges, and replacements as herein provided. The Paying Agent/Registrar
shall obtain and record in the Registration Books the address of the registered owner of each Bond
to which payments with respect to the Bonds shall be mailed, as herein provided; but it shall be the
duty of each registered 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 Authority and the Board each 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.
TPFA-SFA2008\Bond Resolution 14
(c) Ownership of Bonds. The entity 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 such Bond shall be overdue, and, to the extent permitted by law,
the Authority, 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 University 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 of
Texas and registered by the Comptroller of Public Accounts of the State of Texas, 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/REGISTRAR'S AUTHENTICATION
CERTIFICATE (the "Authentication Certificate11). The Authentication Certificate shall be in the
form set forth in the FORM OF BONDS.
(f) Transfer, Exchange, or Replacement. Each Bond issued and delivered pursuant to this
Resolution, to the extent of the unpaid or unredeemed principal amount thereof, may, upon surrender
of such Bond at the Designated Trust Office of the Paying Agent/Registrar, together with a written
request therefor duly executed by the registered owner or the assignee or assignees thereof, or its or
their duly authorized attorneys or representatives, with guarantee of signatures satisfactory to the
Paying Agent/Registrar, may, at the option of the registered owner or such assignee or assignees, as
appropriate, be exchanged for fully registered bonds, without interest coupons, in the appropriate
form prescribed in the FORM OF BONDS set forth in this Resolution, in any Authorized
Denomination (subject to the requirement hereinafter stated that each substitute Bond shall be of the
same series and have a single stated maturity date), as requested in writing by such registered owner
or such assignee or assignees, in an aggregate principal amount equal to the unpaid or unredeemed
principal amount of any Bond or Bonds so surrendered, and payable to the appropriate registered
owner, assignee, or assignees, as the case may be. If a portion of any Bond shall be redeemed prior
to its scheduled maturity as provided 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 an 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
TPFA-SFA2008\Bond Resolution 15
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 the FORM OF BONDS 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 subsection (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 Pricing Committee.
Pursuant to Chapter 1206, Texas Government Code, 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 cancelled and the written
request as described above.
(g) Substitute Paying Agent/Registrar. The Board covenants with the registered owners
of the Bonds that at all times while the Bonds are outstanding the Board will provide a competent
and legally qualified bank, trust company, financial institution, or other agency to act as and perform
the services of Paying Agent/Registrar for the Bonds under this Resolution, and that the 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 120 days written notice to the Paying Agent/Registrar,
to be effective not later than 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
TPFA-SFA2008\Bond Resolution 16
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 the Authority and to each registered
owner of the Bonds, by United States mail, first-class postage prepaid, which notice also shall give
the address of the new Paying Agent/Registrar. By accepting the position and performing as such,
each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this Resolution, and
a certified copy of this Resolution shall be delivered to each Paying Agent/Registrar.
(h) Book-Entry-Only System. The Bonds issued in exchange for the Bonds initially issued
and delivered to the Purchaser shall be issued in the form of a separate single fully registered Bond
for each of the maturities thereof registered in the name of Cede & Co., as nominee of DTC, and
except as provided in subsection (i) hereof, all of the Outstanding Bonds shall be registered in the
name of Cede & Co., as nominee of DTC. The Authority heretofore has executed a "DTC Blanket
Letter of Representations" in connection with utilizing the DTC Book-Entry-Only System.
With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the
Authority, the Board and the Paying Agent/Registrar shall have no responsibility or obligation to any
DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in the
Bonds. Without limiting the immediately preceding sentence, the Authority, 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 Bondholder, 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
Bondholder, 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 Authority, the Board and the Paying Agent/Registrar
shall be entitled to treat and consider the person in whose name each Bond is registered in the
Registration Books as the absolute owner of such Bond for the purpose of payment of principal,
premium, if any, and interest, with respect to such Bond, for the purposes of registering transfers with
respect to such Bond, and for all other purposes of registering transfers with respect to such Bonds,
and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of, premium,
if any, and interest on the Bonds only to or upon the order of the respective 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 an 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.
TPF A-SFA2008\Bond Resolution 17
(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 referred
in subsection (h) above) 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 17(a) 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 Bondholders transferring or exchanging Bonds shall designate, in accordance with !
the provisions of this Resolution.
(j) 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 I
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 Board to DTC.
(k) Notice of Redemption. In addition to the method of providing a notice of redemption |
set forth in the FORM OF BONDS, the Paying Agent/Registrar shall give notice of redemption of j
Bonds by United States 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 j
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 j
(2) days prior to the general mailing or publication date of such notice. The Paying Agent/Registrar j
shall also send a notice of prepayment or redemption to the registered owner of any Bond who has
not sent the Bonds in for redemption sixty (60) days after the redemption date. \
Each notice of redemption, whether required in the FORM OF BONDS 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, the maturity date, the CUSIP number, a reference to
the principal amounts of each maturity called for redemption, 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. j
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.
TPFA-SFA2008\Bond Resolution 18
Section 13. FORM OF BONDS. The forms of the Bonds, including the form of the
Authentication Certificate, the form of Assignment, the form of any statement of insurance with
respect to the Bonds provided by the Insurer (as such term is defined in Section 34 of this
Resolution), and the form of Registration Certificate of the Comptroller of Public Accounts of the
State of Texas, with respect to the Bonds initially issued and delivered to the Purchaser 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.
Section 14. INDIVIDUALS NOT LIABLE. All covenants, stipulations, obligations, and
agreements of the Board contained in this Resolution shall be deemed to be covenants, stipulations,
obligations, and agreements of the Financing System and the Board to the full extent authorized or
permitted by the Constitution and laws of the State of Texas. The Authority agrees that all
covenants, stipulations, obligations, and agreements of the Board contained in this Resolution shall
apply equally to the Authority acting in its capacity as the issuer of the Bonds on behalf of the
University. No covenant, stipulation, obligation, or agreement herein contained shall be deemed to
be a covenant, stipulation, obligation, or agreement of any member of either the Authority or the
Board or agent or employee of either the Authority or the Board in the individual capacity thereof
and neither the respective members of the Authority or the Board, nor any officer thereof or of any
participant shall be liable personally on Parity Obligations when issued, or be subject to any personal
liability or accountability by reason of the issuance thereof.
Section 15. SECURITY FOR THE BONDS. The Bonds are special obligations of the
Board payable from and secured solely by the Pledged Revenues pursuant to this Resolution. The
Pledged Revenues are hereby pledged, subject to the liens securing the Prior Encumbered
Obligations, to the payment of the principal of, premium, if any, and interest on the Bonds as the same
shall become due and payable. The Board agrees to pay the principal of, premium, if any, and the
interest on the Bonds when due, whether by reason of maturity or redemption.
Section 16. PAYMENTS. Semiannually on or before each principal or interest payment
date while any of the Bonds are outstanding and unpaid, commencing on the first interest payment
date for the Bonds as specified in the Pricing Certificate, the Board shall make available to the Paying
Agent/Registrar, money sufficient to pay such interest on and such principal of the Bonds as will
accrue or mature, or be subject to mandatory redemption prior to maturity, on such principal,
redemption, or interest payment date. The Paying Agent/Registrar shall cancel all paid Bonds and
shall furnish the Board with an appropriate certificate of cancellation.
Section 17. DAMAGED, MUTILATED, LOST, STOLEN, ORDESTROYEDBONDS
(a) Replacement Bonds. In the event any outstanding Bond is damaged, mutilated, lost, stolen, or
destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new bond
of the same Series, principal amount, maturity, and interest rate, and in the same form, as the
damaged, mutilated, lost, stolen, or destroyed Bond, in replacement for such Bond in the manner
hereinafter provided.
TPF A-SF A2008\Bond Resolution 19
(b) Application for Replacement Bonds. Application for replacement of damaged,
mutilated, lost, stolen, or destroyed Bonds shall be made to the Paying Agent/Registrar. In every
case of loss, theft, or destruction of a Bond, the applicant for a replacement bond shall furnish to the
Authority, the Board and the Paying Agent/Registrar such security or indemnity as may be required
by them to save each of them harmless from any loss or damage with respect thereto. Also, in every
case of loss, theft, or destruction of a Bond, the applicant shall furnish to the Authority, the Board
and the Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such
Bond, as the case may be. In every case of damage or mutilation of a Bond, the applicant shall
surrender to the Paying Agent/Registrar for cancellation the Bond so damaged or mutilated.
(c) Payment in Lieu of Replacement. Notwithstanding the foregoing provisions of this
Section, in the event any such Bond shall have matured, and no default has occurred which is then
continuing in the payment of the principal of, redemption premium, if any, or interest on the Bond,
the Board, or the Authority acting on behalf of the Board, may authorize the payment of the same
(without surrender thereof except in the case of a damaged or mutilated Bond) instead of issuing a
replacement Bond, provided security or indemnity is furnished as above provided in this Section.
(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement bond,
the Paying Agent/Registrar shall charge the owner of such Bond with all legal, printing, and other
expenses in connection therewith. Every replacement bond issued pursuant to the provisions of this
Section by virtue of the fact that any Bond is lost, stolen, or destroyed shall constitute a contractual
obligation of the Board whether or not the lost, stolen, or destroyed Bond shall be found at any time,
or be enforceable by anyone, and shall be entitled to all the benefits of this Resolution equally and
proportionately with any and all other Bonds duly issued under this Resolution.
(e) Authority for Issuing Replacement Bonds. In accordance with Chapter 1206, Texas
Government Code, this Section shall constitute authority for the issuance of any such replacement
bond without the necessity of further action by the Authority, the Board or any other body or person,
and the duty of the replacement of such Bonds is hereby authorized and imposed upon the Paying
Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Bonds in the form
and manner and with the effect, as provided in Section 12(f) of this Resolution for Bonds issued in
exchange and replacement for other Bonds.
Section 18. REMEDIES. Any owner of Parity Obligations in the event of default in
connection with any covenant contained herein or in any resolution adopted hereafter authorizing the
issuance of Parity Obligations, or default in the payment of said obligations, or of any interest due
thereon, or other costs and expenses related thereto, may require the Authority, the Board, their
respective officials and employees, and any appropriate official of the State of Texas, to carry out,
respect, or enforce the covenants and obligations of this Resolution by all legal and equitable means,
including specifically, but without limitation, the use and filing of mandamus proceedings in any court
of competent jurisdiction against the Authority, the Board, their respective officials and employees,
or any appropriate official of the State of Texas.
TPFA-SFA2008\Bond Resolution 20
Section 19. DEFEASANCE OF OBLIGATIONS, (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 (ii) shall have been provided for on or before such due date by
irrevocably depositing with or making available to the Paying Agent/Registrar 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 Authority with the Paying Agent/Registrar 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
revenues herein pledged as provided in this Resolution, and such principal and interest shall be
payable solely from such money or Defeasance Securities.
(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, in accordance with
this Resolution. Any money so deposited with the Paying Agent/Registrar as provided in this Section
may at the written discretion of the Authority 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 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 turned over to the Authority.
(c) Notwithstanding any provision of any other Section of this Resolution which may be
contrary to the provisions of this Section, all money or Defeasance Securities set aside and held in
trust pursuant to the provisions of this Section for the payment of principal of the Bonds and
premium, if any, and interest thereon, shall be applied to and used solely for the payment of the
particular Bonds and premium, if any, and interest thereon, with respect to which such money or
Defeasance Securities have been so set aside in trust. Until all Defeased Bonds shall have become
due and payable, the Paying 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 Authority 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 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.
TPFA-SFA2008\Bond Resolution 21
(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 Authority retains the right
under Texas law to later call that Defeased Bond for redemption in accordance with the provisions
of the resolution authorizing its issuance, the Authority may call such Defeased Bond for redemption
upon complying with the provisions of Texas 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.
(f) In the event that the Authority elects to defease less than all of the principal amount of
Bonds of a maturity, the Paying Agent/Registrar shall select, or cause to be selected, such amount
of Bonds by such random method as it deems fair and appropriate.
Section 20. AMENDMENT OF RESOLUTION, (a) Amendment Without Consent.
This Resolution and the rights and obligations of the Authority, the Board and of the owners of the
Outstanding Parity Obligations may be modified or amended at any time without notice to or the
consent of any owner of the Outstanding Parity Obligations, solely for any one or more of the
following purposes:
(i) To add to the covenants and agreements of the Board or the Authority 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 or the Authority 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 and the Authority of an
opinion of Bond Counsel, that the same is needed for such purpose, and will more clearly
express the intent of this Resolution;
(iii) To supplement the security for the Parity Obligations, including, but not by way
of limitation, to provide for the addition of new institutions and agencies to the Financing
System or to clarify the provisions regarding the University as a Participant in the Financing
System; provided, however, if the definition of Pledged Revenues is amended in any manner
which results in the pledge of additional resources, the terms of such amendment may limit
the amount of such additional pledge and the manner, extent, and duration of such additional
pledge all as set forth in such amendment;
(iv) To make any changes or amendments requested by any bond rating agency then
rating or requested to rate Parity Obligations, as a condition to the issuance or maintenance
of a rating, which changes or amendments do not, in the judgment of the Board and the
Authority, materially adversely affect the interests of the owners of the Outstanding Parity
Obligations;
TPFA-SFA2008\Bond Resolution 22
(v) To make such changes, modifications or amendments as may be necessary or
desirable, which shall not adversely affect the interests of the owners of the Outstanding
Parity Obligations, in order, to the extent permitted by law, to facilitate the economic and
practical utilization of Credit Agreements with respect to the Parity Obligations;
(vi) To make such other changes in the provisions hereof as the Board and the
Authority may deem necessary or desirable and which shall not, in the judgment of the Board
and the Authority, materially adversely affect the interests of the owners of Outstanding Parity
Obligations; or
(vii) To make such changes or amendments as contemplated by Section 24(c)(v) of
this Resolution in order to comply with the Rule.
Notice of any such amendment may be published by the Board in the manner described in subsection
(c) of this Section; provided, however, that the publication of such notice shall not constitute a
condition precedent to the adoption of such amendatory resolution and the failure to publish such
notice shall not adversely affect the implementation of such amendment as adopted pursuant to such
amendatory resolution.
(b) Amendments With Consent. Subject to the other provisions of this Resolution, the
owners of Outstanding Parity Obligations aggregating a majority in Outstanding Principal Amount
shall have the right from time to time to approve any amendment to this Resolution, other than
amendments described in subsection (a) of this Section, which may be deemed necessary or desirable
by the Board and the Authority; provided, however, that nothing herein contained shall permit or be
construed to permit, without the approval of the owners of all of the Outstanding Parity Obligations,
the amendment of the terms and conditions in this Resolution so as to:
(1) Grant to the owners of any Outstanding Parity Obligations a priority over the owners
of any other Outstanding Parity Obligations;
(2) Materially adversely affect the rights of the owners of less than all Parity Obligations
then Outstanding;
(3) Change the minimum percentage of the Outstanding Principal Amount necessary for
consent to such amendment;
(4) Make any change in the maturity of the Outstanding Bonds;
(5) Reduce the rate of interest borne by Outstanding Bonds;
(6) Reduce the amount of the principal payable on Outstanding Bonds; or
(7) Modify the terms of payment of principal of or interest on the Outstanding Bonds, or
impose any conditions with respect to such payment.
TPFA-SFA2008\Bond Resolution 23
(c) Notice. If at any time this Resolution is to be amended pursuant to the provisions of
subsection (b) of this Section, the Board shall cause notice of the proposed amendment to be
published in a financial newspaper or journal of general circulation in The City of New York, New
York, once during each calendar week for at least two 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 each Registrar for the Parity Obligations for inspection by all owners of
Parity Obligations. Such publication is not required, however, if the Board gives or causes to be
given such notice in writing, by certified mail, to each owner of Parity Obligations. Such publication
is not required with respect to amendments to this Resolution effected pursuant to the provisions of
subsection (a) of this Section.
(d) Receipt of Consents. Whenever at any time not less than thirty (30) days, and within one
year, from the date of the first publication of said notice or other service of written notice of the
proposed amendment the Board shall receive an instrument or instruments executed by all of the
owners or the owners of at least a majority in Outstanding Principal Amount, 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 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, the Authority and all the owners of then Outstanding Parity Obligations and all future Parity
Obligations shall thereafter be determined, exercised, and enforced under this Resolution, as amended.
(f) Consent Irrevocable. Any consent given by any owner of Parity Obligations pursuant to
the provisions of this Section shall be irrevocable for a period of six 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 Parity Obligations during such period. Such consent may
be revoked at any time after six months from the date of the first publication of such notice by the
owner who gave such consent, or by a successor in title, by filing notice thereof with the Registrar
for such Parity Obligations, the Authority and the Board, but such revocation shall not be effective
if the owners of a majority in Outstanding Principal Amount, 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 Parity Obligations shall be determined by the Registration Books maintained by the Registrar.
Section 21. COVENANTS REGARDING TAX-EXEMPTION (a) Covenants. The
Board covenants to take any action necessary to assure, or refrain from any action which would
adversely affect, the treatment of the Bonds as obligations described in section 103 of the Code, the
interest on which is not includable in the "gross income" of the holder for purposes of federal income
TPFA-SFA2008\Bond Resolution 24
taxation. The Authority understands, and the Board agrees, that all costs associated with satisfying
the below covenants including, but not by way of limitation, the costs incurred in respect to
compliance with clause (8) below, shall be borne by the Board. In furtherance thereof, the Board
covenants as follows:
(1) to take any action to assure that no more than 10 percent of the proceeds of the
Bonds or the projects financed 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 10 percent of the proceeds or the projects financed therewith are so used, such amounts,
whether or not received by the Board, with respect to such private business use, do not, under
the terms of this Resolution or any underlying arrangement, directly or indirectly, secure or
provide for the payment of more than 10 percent of the debt service on the Bonds, in
contravention of section 141(b)(2) of the Code;
(2) to take any action to assure that in the event that the "private business use11
described in subsection (1) hereof exceeds 5 percent of the proceeds of the Bonds or the
projects financed therewith (less amounts deposited into a reserve fund, if any) then the
amount in excess of 5 percent is used for a "private business use11 which is "related" and not
"disproportionate," within the meaning of section 141 (b)(3) of the Code, to the governmental
use;
(3) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Bonds (less amounts deposited into a reserve
fund, if any) is directly or indirectly used to finance loans to persons, other than state or local
governmental units, in contravention of section 141(c) of the Code;
(4) to refrain from taking any action which would otherwise result in the Bonds being
treated as "private activity bonds" within the meaning of section 141 (b) of the Code;
(5) to refrain from taking any action that would result in the Bonds being "federally
guaranteed" within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Bonds, directly or
indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire
investment property (as defined in section 148(b)(2) of the Code) which produces a materially
higher yield over the term of the Bonds, other than investment property acquired with —
(A) proceeds of the Bonds invested for a reasonable temporary period of 3
years or less or, in the case of a refunding bond, for a period of 30 days or less until
such proceeds are needed for the purpose for which the Bonds are issued,
(B) amounts invested in a bona fide debt service fund, within the meaning of
section 1.148-l(b) of the Treasury Regulations, and
TPFA-SFA2008\Bond Resolution 25
(C) amounts deposited in any reasonably required reserve or replacement fund
to the extent such amounts do not exceed 10 percent of the proceeds of the Bonds;
(7) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as
proceeds of the Bonds, as may be necessary, so that the 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 refiindings); and
(8) to pay to the United States of America at least once during each five-year period
(beginning on the date of delivery of the Bonds) an amount that is at least equal to 90 percent
of the "Excess Earnings,1' 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 Fund. In order to facilitate compliance with the above covenant (8), a "Rebate
Fund" is hereby established by the Board for the sole benefit of the United States of America, and
such fund shall not be subject to the claim of any other person, including without limitation the
registered owners of the Bonds. The Rebate Fund is established for the additional purpose of
compliance with section 148 of the Code. The Rebate Fund shall be maintained and administered at
the direction of the Board.
(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 preserve the exemption from
federal income taxation of interest on the Bonds under section 103 of the Code. In furtherance of
the foregoing, the Chair of the Board, the Chair of the Authority, the Executive Director of the
Authority, and the Designated Financial Officer each may 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.
(d) Allocation Of and Limitation On, Expenditures for the Project. The Board covenants
to account for on its books and records the expenditure of proceeds from the sale of the Bonds and
any investment earnings thereon to be used for the purposes described in Section 9 of this Resolution
TPFA-SFA2008\Bond Resolution 26
(the "Project") in accordance with the requirements of the Code. The Board recognizes that in order
for the proceeds to be considered used for the reimbursement of costs, the proceeds must be allocated
to expenditures within 18 months of the later of the date that (1) the expenditure on a Project is made
or (2) each such Project is completed; but in no event later than three years after the date on which
the original expenditure is paid. The foregoing notwithstanding, the Board recognizes that in order
for proceeds to be expended under the Code, the sale proceeds or investment earnings must be
expended no more than 60 days after the earlier of (1) the fifth anniversary of the date of delivery of
the Bonds or (2) the date the Bonds are retired. The Board agrees to obtain the advise of nationally-recognized
bond counsel if such expenditure fails to comply with the foregoing to assure that such
expenditure will not adversely affect the tax-exempt status of the Bonds. For purposes of this
subsection, the Board shall not be obligated to comply with this covenant if it obtains an opinion of
nationally-recognized bond counsel to the effect that such failure to comply will not adversely affect
the excludability for federal income tax purposes from gross income of the interest. The Board shall
notify the Authority in writing promptly after it receives or is made aware of any such opinion.
(e) Disposition of Project. The Board covenants that the property constituting a 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
substantially to the effect 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 of business 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. The Board shall notify the Authority
in writing promptly after it receives or is made aware of any such opinion.
Section 22. RESERVED
Section 23. RESERVED
Section 24. COMPLIANCE WITH RULE 15c2-12. (a) Annual Reports, (i) The Board,
as the obligated person on the Bonds under the Rule, shall provide annually to each NRMSIR and
any SID, within six months after the end of each fiscal year, financial information and operating data
with respect to the Board of the general type included in the final official statement authorized by
Section 10 of this Resolution being the information described in Exhibit "C" hereto. Any financial
statements so to be provided shall be prepared in accordance with the accounting principles described
in Exhibit "C" hereto, or such other accounting principles as the Board may be required to employ
from time to time pursuant to state law or regulation. If the Board commissions an audit of such
statements and 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 any such audit of such financial
statements, if one is commissioned by the Board, is not complete within such period, then the Board
shall provide unaudited financial statements and audited financial statements for the applicable fiscal
TPFA-SFA2008\Bond Resolution 27
year to each NRMSIR and any SID, when and if the audit report on such statements become
available.
(ii) If the Board changes its Fiscal Year, it will notify each NRMSIR and any SID 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 (including an official statement or other offering document, if it is available from the
MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC.
(b) Material Event Notices. The Board shall notify any SID and either each NRMSIR or
the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event
is material within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds;
7. Modifications to rights of holders of the Bonds;
8. Bond calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Bonds; and
11. Rating changes.
The Board shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any
failure by the Board to provide financial information or operating data in accordance with subsection
(a) of this Section by the time required by such subsection.
(c) Limitations, Disclaimers, and Amendments, (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 Bonds no longer to be Outstanding.
(ii) The provisions of this Section are for the sole benefit of the Authority and 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
TPFA-SFA2008\Bond Resolution 28
any information provided in accordance with this Section or otherwise, except as expressly provided
herein. The Board does not make any 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
FROMANYBREACHBYTHEBOARD,WHETHERNEGLIGENTORWITHOUTFAULTON
ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND
REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF
ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FORMAND AMUS OR SPECIFIC
PERFORMANCE.
(iv) 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. 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.
(v) 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. No such amendment of this Section shall be
made without the consent of the Authority, which consent shall not be unreasonably withheld.
The filing of such continuing disclosure information with a central post office approved for
such purposes by the SEC, such as Disclosure USA, for submission to the NRMSIRs and SID
(without also separately submitting such filings to the NRMSIRs and SID by some other means) will
satisfy the Board's obligation to file such information with the NRMSIRs and SID so long as such
filing is acceptable to the SEC.
TPFA-SFA2008\Bond Resolution 29
(d) Copies to Authority. The Board shall provide to the Authority copies of all reports
and filings made under this Section at the same time such reports and filings are made to any
NRMSIR, the MSRB and the SID.
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 Authority, the Board and the Holders 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 Authority and the Board shall be for the equal and
proportionate benefit, security, and protection of all Holders, 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. SEVERABBLITY 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 BONDS, whenever under the terms of this Resolution or
the Bonds, the performance date of any provision hereof or thereof, including the payment of
principal of or interest on the Bonds, shall occur on a day other than a Business Day, then the
performance thereof, including the payment of principal of and interest on the Bonds, need not be
made on such day but may be performed or paid, as the case may be, on the next succeeding Business
Day with the same force and effect as if made on the date of performance or payment.
Section 28. LIMITATION OF BENEFITS WITH RESPECT TO THE RESOLUTION
With the exception of the rights or benefits herein expressly conferred, nothing expressed or
contained herein or implied from the provisions of this Resolution or the Bonds is intended or should
be construed to confer upon or give to any person other than the Authority, the Board, the Holders,
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 Authority, the Board, the Holders, and the Paying Agent/Registrar as
herein and therein provided.
TPFA-SFA2008\Bond ResoluUon 30
Section 29. CUSTODY, APPROVAL, BOND COUNSEL'S OPINION, CUSIP
NUMBERS, PREAMBLE AND INSURANCE. The Executive Director of the Authority 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 of
Texas. The Executive Director of the Authority 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, in which case the Executive Director of the Authority 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 Bond Counsel and the assigned CUSIP numbers may be
printed on the Bonds and on any Bonds issued and delivered in exchange or replacement of any Bond,
but neither shall have any legal effect, and shall be solely for the convenience and information of the
registered owners of the Bonds. The preamble to this Resolution is hereby adopted and made a part
of this Resolution for all purposes. If insurance is obtained on any of the Bonds, the Bonds shall bear,
as appropriate and applicable, a legend concerning insurance as provided by the municipal bond
insurance company issuing any such insurance.
Section 30. FURTHER PROCEDURES. The Chair of the Board, the Chair of the
Authority, the Executive Director of the Authority, the Designated Financial Officer, and all other
officers, employees, and agents of the Authority and the University, and each of them, shall be and
they are hereby expressly authorized, empowered, and directed from time to time and at any time to
do and perform all such acts and things and to execute, acknowledge, and deliver in the name and
under the corporate seal and on behalf of the Authority or the Board, as appropriate, 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, and to approve any Official Statement, or supplements thereto,
in connection with the Bonds.
Section31. 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 32, REFERENCES TO AUTHORITY. By operation of Texas law including, but
not by way of limitation, the TPFA Act and the Texas Education Code being amended by the Texas
legislature, should the Authority no longer be charged with the duty and exclusive authority to act
on behalf of the University in issuing bonds on its behalf, all references to the Authority in this
Resolution shall be null and void and of no effect. Furthermore, should the Authority no longer be
charged with the duty and exclusive authority to act on behalf of the University in issuing bonds on
its behalf, the Authority shall be deemed to have discharged all of its duties and responsibilities to the
University under this Resolution, and all such duties and responsibilities shall be assumed by the
University.
TPFA-SFA2008\Bond Resolution 31
Section 33. PERFECTION OF PLEDGE. Chapter 1208, Government Code, applies to
the issuance of the Bonds and the pledge of the Pledged Revenues granted under Section 2 of this
Resolution, and such pledge is therefore valid, effective and perfected. If Texas law is amended at
any time while the Bonds are outstanding and unpaid such that the pledge of the Pledged Revenues
under Section 2 of this Resolution is to be subject to the filing requirements of Chapter 9, Business
& Commerce Code, then in order to preserve to the registered owners of the Bonds the perfection
of the security interest in said pledge, the Authority agrees to take such measures as it determines are
reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9,
Business & Commerce Code and enable a filing to perfect the security interest in said pledge to occur.
Section 34. BOND INSURANCE. In connection with the sale of the Bonds, the Board may
obtain municipal bond insurance policies from a municipal bond insurer (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 Designated Financial Officer. The Designated Financial Officer is hereby
authorized to sign a commitment letter with the Insurer and to pay the premium for the bond
insurance policies at the time of the delivery of the Bonds out of the proceeds of sale of the Bonds
or from other available funds and to execute such other documents and certificates as necessary in
connection with the bond insurance policies as he or she may deem appropriate. Printing on Bonds
covered by the bond insurance policies a statement describing such insurance, in form and substance
satisfactory to the Insurer and the Designated Financial Officer, is hereby approved and authorized.
The Pricing 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.
Section 35. PUBLIC NOTICE. It is hereby found and determined that each of the officers
and members of the Authority and the Board was duly and sufficiently notified officially and
personally, in advance, of the time, place, and purpose of their respective meetings at which this
Resolution was adopted, and that this Resolution would be introduced and considered for adoption
at said meetings; and that said meetings were open to the public, and public notice of the time, place,
and purpose of said meetings was given, all as required by Chapter 551, Texas Government Code.
In addition, the meeting of the Board was held as a telephone conference call pursuant to Section
551.121, Texas Government Code, and that it was necessary to convene said meeting immediately
to finalize the terms and conditions relating to the sale of the Bonds at a time when it was found to
be difficult, and possibly impossible, to convene a quorum of the Board in one location.
TPFA-SFA2008\Bond Resolution 32
EXHIBIT A
DEFINITIONS |
As used in this Resolution the following terms and expressions shall have the meanings set j
forth below, unless the text hereof specifically indicates otherwise:
i
"Annual Debt Service Requirements" means, for any Fiscal Year, the principal of and interest |
on all Parity Obligations coming due at Maturity or Stated Maturity (or that could come due on I
demand of the owner thereof other than by acceleration or other demand conditioned upon default |
by the Board on such Debt, or be payable in respect of any required purchase of such Debt by the |
Board) in such Fiscal Year, and, for such purposes, any one or more of the following rules shall apply j
at the election of the Board: j
(1) Committed Take Out. If the Board, or the Authority on behalf of the Board, has
entered into a Credit Agreement constituting a binding commitment within normal
commercial practice to discharge any of its Funded Debt at its Stated Maturity (or, if due on
demand, at any date on which demand may be made) or to purchase any of its Funded Debt
at any date on which such Debt is subject to required purchase, all under arrangements
whereby the obligation to repay the amounts advanced for such discharge or purchase
constitutes Funded Debt, then the portion of the Funded Debt committed to be discharged
or purchased shall be excluded from such calculation and the principal of and interest on the
Funded Debt incurred for such discharging or purchase that would be due in the Fiscal Year
for which the calculation is being made, if incurred at the Stated Maturity or purchase date
of the Funded Debt to be discharged or purchased, shall be added;
(2) Balloon Debt. If the principal (including the accretion of interest resulting from
original issue discount or compounding of interest) of any series or issue of Funded Debt due
(or payable in respect of any required purchase of such Funded Debt by the Board) in any
Fiscal Year either is equal to at least 25% of the total principal (including the accretion of
interest resulting from original issue discount or compounding of interest) of such Funded
Debt or exceeds by more than 50% the greatest amount of principal of such series or issue
of Funded Debt due in any preceding or succeeding Fiscal Year (such principal due in such
Fiscal Year for such series or issue of Funded Debt being referred to herein as "Balloon
Debt"), the amount of principal of such Balloon Debt taken into account during any Fiscal
Year shall be equal to the debt service calculated using the original principal amount of such
Balloon Debt amortized over the Term of Issue on a level debt service basis at an assumed
interest rate equal to the rate borne by such Balloon Debt on the date of calculation;
(3) Consent Sinking Fund. In the case of Balloon Debt (as defined in clause (2)
above), if a Designated Financial Officer shall deliver to the Board and the Authority an
Officer's Certificate providing for the retirement of (and the instrument creating such Balloon
Debt shall permit the retirement of), or for the accumulation of a sinking fund for (and the
instrument creating such Balloon Debt shall permit the accumulation of a sinking fond for),
TPFA-SF A2008\Bond Resolution A-1
such Balloon Debt according to a fixed schedule stated in such Officer's Certificate ending on
or before the Fiscal Year in which such principal (and premium, if any) is due, then the
principal of (and, in the case of retirement, or to the extent provided for by the sinking fund
accumulation, the premium, if any, and interest and other debt service charges on) such
Balloon Debt shall be computed as if the same were due in accordance with such schedule,
provided that this clause (3) shall apply only to Balloon Debt for which the installments
previously scheduled have been paid or deposited to the sinking fond established with respect
to such Debt on or before the times required by such schedule; and provided further that this
clause (3) shall not apply where the Board has elected to apply the rule set forth in clause (2)
above;
(4) PrepaidDebt. Principal of and interest on Parity Obligations, or portions thereof,
shall not be included in the computation of the Annual Debt Service Requirements for any
Fiscal Year for which such principal or interest are payable from funds on deposit or set aside
in trust for the payment thereof at the time of such calculations (including without limitation
capitalized interest and accrued interest so deposited or set aside in trust) with a financial
institution acting as fiduciary with respect to the payment of such Debt;
(5) Variable Rate. As to any Parity Obligation that bears interest at a variable
interest rate which cannot be ascertained at the time of calculation of the Annual Debt Service
Requirement then, at the option of the Board, either (1) an interest rate equal to the average
rate borne by such Parity Obligations (or by comparable debt in the event that such Parity
Obligations has not been outstanding during the preceding 24 months) for any 24 month
period ending within 30 days prior to the date of calculation, or (2) an interest rate equal to
the 30-year Tax-Exempt Revenue Bond Index (as most recently published in The Bond
Buyer), shall be presumed to apply for all future dates, unless such index is no longer
published in The Bond Buyer, in which case an index of tax-exempt revenue bonds with
maturities of at least 20 years which is published in a newspaper or journal with national
circulation may be used for this purpose. If two Series of Parity Obligations which bear
interest at variable interest rates, or one or more maturities within a Series, of equal par
amounts, are issued simultaneously with inverse floating interest rates providing a composite
fixed interest rate for such Parity Obligations taken as a whole, such composite fixed rate shall
be used in determining the Annual Debt Service Requirement with respect to such Parity
Obligations;
(6) Guarantee. In the case of any guarantee, as described in clause (2) of the
definition of Debt, no obligation will be counted if the Board does not anticipate in its annual
budget that it will make any payments on the guarantee. If, however, the Board is making
payments on a guarantee or anticipates doing so in its annual budget, such obligation shall be
treated as Parity Obligations and calculations of Annual Debt Service Requirements with
respect to such guarantee shall be made assuming that the Board will make all additional
payments due under the guaranteed obligation. If the entity whose obligation is guaranteed
cures all defaults and the Board no longer anticipates making payments under the guarantee,
TPFA-SFA2008\Bond Resolution A-2
the guaranteed obligations shall not be included in the calculation of Annual Debt Service
Requirements;
(7) Commercial Paper. With respect to any Parity Obligations issued in the form of
commercial paper with maturities not exceeding 270 days, the interest on such Parity
Obligations shall be calculated in the manner provided in clause (5) of this definition and the
maturity schedule shall be calculated in the manner provided in clause (2) of this definition;
and
(8) Credit Agreement Payments. If the Board, or the Authority on behalf of the
Board, has entered into a Credit Agreement in connection with an issue of Debt, payments
due under the Credit Agreement (other than payments for fees and expenses), for either the
Board or, the Authority on behalf of the Board, as the case may be, or the Credit Provider,
shall be included in such calculation, except to the extent that the payments are already taken
into account under (1) through (7) above and any payments o