Minutes of Board of Regents of Stephen F. Austin State University. 2008, Volume No. 248

              Stephen F. Austin
State University
Minutes of the
Board of Regents
Nacogdoches, Texas
November 14, 2008 Telephone Meeting (Volume 248)
BOARD MINUTES FOR NOVEMBER 14, 2008
VOLUME 248
Board Order 09-08 Approval of resolution authorizing the issuance of State of Texas
Constitutional Appropriation Bonds (Stephen F. Austin State
University), Series 2008, authorizing the Vice President of Finance
and Administration to accept bids with respect to the sale of the
bonds and resolving other matters related thereto.
Stephen F. Austin State University
Minutes of the Board of Regents Telephone Meeting
Nacogdoches, Texas
November 14,2008
Austin Building 307
Meeting 248
A special teleconference meeting of the board of regents was called to order on Thursday,
November 14, 2008, 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. Ric Berry
General Counsel: Ms. Yvette Clark
Others SFA administrators, staff, and visitors
Joining the meeting by telephone were:
Board Members: Mr. Richard Boyer
Mr. James Dickerson
Ms. Valerie Ertz
Mr. Bob Garrett
Mr. James Thompson
Mr. Melvin White
Absent were board members: Mr. Carlos Amaral, Mr. Paul Pond, Ms. Lacey Claver.
Danny Gallant introduced others joining by telephone: Mary Williams, Senior Vice
President of First Southwest Company and Carol Polombo, Bond Counsel, representing
McCall, Parkhurst, and Horton.
Board Order 09-08
Whereas, the following was considered by the board of regents:
The SFA Board approved a resolution to issue Tuition Revenue Bonds for the
ECRC on February 7, 2008 in the amount of $20,178,000. The ECRC is on
schedule to open July 9, 2009, the building is dried in, and the administration
anticipates needing additional funds by early spring. The administration testified
before the Bond Review Board on Monday, November 10, 2008 at their planning
session regarding the HEF issuance for the ECRC, the nursing project and the
deferred maintenance project.
The university now requests board approval of the attached RESOLUTION
AUTHORIZING THE ISSUANCE OF STATE OF TEXAS
CONSTITUTIONAL APPROPRIATIONS BONDS (STEPHEN F. AUSTIN
STATE UNIVERSITY), SERIES 2008, AUTHORIZING THE VICE
PRESIDENT OF FINANCE AND ADMINISTRATION TO ACCEPT BIDS
WITH RESPECT TO THE SALE OF THE BONDS AND RESOLVING
OTHER MATTERS RELATED THERETO.
The resolution limits the bonds to be sold at no lower than a 5% discount, and the
net effective interest cost cannot exceed 6%. The resolution is presented to the
board in order that SFA might find the best market opportunity to sell the bonds.
The university has a very attractive issue, with only a 10 year term and full credit
support of the State of Texas.
The 2008 calendar year window for the sale extends from December 2nd through
December 19th.
Therefore, upon motion by Regent Ertz seconded by Regent White, with all members
voting aye, the attached resolution was passed authorizing the acceptance of bids for the
sale of bonds in an amount not to exceed $10,600,000 for the purpose of providing funds
to construct an Early Childhood Research Center.
The meeting was adjourned at 10:14 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 SPECIAL CALLED MEETING
ON THE 14TH DAY OF NOVEMBER, 2008 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: Carlos Z. Amaral and Paul G.
Pond, thus constituting a quorum. Whereupon, among other business, the following was transacted
at said Meeting: a written
RESOLUTION AUTHORIZING THE ISSUANCE OF STATE OF TEXAS
CONSTITUTIONAL APPROPRIATION BONDS (STEPHEN F. AUSTIN STATE
UNIVERSITY), SERIES 2008, AUTHORIZING THE VICE
PRESIDENT FOR FINANCE AND ADMINISTRATION TO ACCEPT BIDS
WITH RESPECT TO THE SALE OF THE 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: All Present Voted Aye
NOES: None
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
pertaining to the adoption of said Resolution; that the persons named in the above and foregoing
TPFA/SFASU: HEAFBonds08\Res.Cert
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 THIS PAGE IS INTENTIONALLY LEFT BLANK]
TPFA/SFASU: HEAFBonds08\Res.Cert
SIGNED this
Secretary
SL t
RESOLUTION AUTHORIZING THE ISSUANCE OF STATE OF TEXAS
CONSTITUTIONAL APPROPRIATION BONDS (STEPHEN F. AUSTIN STATE
UNIVERSITY), SERIES 2008, AUTHORIZING THE VICE
PRESIDENT FOR FINANCE AND ADMINISTRATION TO ACCEPT BIDS
WITH RESPECT TO THE SALE OF THE BONDS
AND RESOLVING OTHER MATTERS RELATED THERETO
ADOPTED NOVEMBER 14,2008
TPFA\SFAHEAR08:Res
RESOLUTION AUTHORIZING THE ISSUANCE OF STATE OF TEXAS
CONSTITUTIONAL APPROPRIATION BONDS (STEPHEN F. AUSTIN STATE
UNIVERSITY), SERIES 2008, AUTHORIZING THE VICE
PRESIDENT FOR FINANCE AND ADMINISTRATION TO ACCEPT BIDS
WITH RESPECT TO THE SALE OF THE BONDS
AND RESOLVING OTHER MATTERS RELATED THERETO
TABLE OF CONTENTS
Page
PREAMBLE 1
Section 1. DEFINITIONS 1
Section 2. AMOUNT AND PURPOSE OF THE BONDS 3
Section 3. DATE, DENOMINATIONS, NUMBERS, MATURITIES AND
TERMS OFBONDS 4
Section 4. INTEREST 5
Section 5. CHARACTERISTICS OF THEBONDS 5
Section 6. FORM OFBONDS 8
Section 7. PLEDGE 8
Section 8. CONSTITUTIONAL APPROPRIATION 8
Section 9. PROCEDURE FOR REMITTING TO PAYING AGENT/REGISTRAR 9
Section 10. BOARD'S PAYMENTS AND REDEMPTION 10
Section 11. INTEREST AND SINKING FUND 10
Section 12. INVESTMENTS 11
Section 13. ADDITIONAL BONDS 11
Section 14. SPECIAL COVENANTS 12
Section 15. PUBLIC FUNDS COLLATERAL 13
Section 16. DEFEASANCE OF BONDS 13
TPFA\SFAHEAF\08:R«
Section 17. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
BONDS 14
Section 18. COVENANTS REGARDING TAX EXEMPTION OF INTEREST
ON THEBONDS 15
Section 19. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES
FORTHEPROJECT . 17
Section 20. DISPOSITION OF PROJECT 17
Section 21. COMPLIANCE WITH RULE 15c2-12 17
Section 22. CUSTODY, APPROVAL AND REGISTRATION OF BONDS;
BOND COUNSEL'S OPINION 20
Section 23. OFFERING DOCUMENTS 20
Section 24. DTC LETTER OF REPRESENTATION 20
Section25. FURTHER PROCEEDINGS 20
Section26. RULES OF CONSTRUCTION 20
Section 27. PUBLIC NOTICE 21
Section28. PAYMENT OF ATTORNEY GENERAL FEE 21
Section29. NO PERSONAL LIABILITY 21
SCHEDULE I
EXHIBIT A FORM OF BOND A-l
EXHIBIT B DESCRIPTION OF ANNUAL FINANCIAL INFORMATION B-l
TPFA\SFAHEAF\08: Res
RESOLUTION AUTHORIZING THE ISSUANCE OF STATE OF TEXAS
CONSTITUTIONAL APPROPRIATION BONDS (STEPHEN F. AUSTIN STATE
UNIVERSITY), SERIES 2008, AUTHORIZING THE VICE
PRESIDENT FOR FINANCE AND ADMINISTRATION TO ACCEPT BIDS
WITH RESPECT TO THE SALE OF THE BONDS
AND RESOLVING OTHER MATTERS RELATED THERETO
THE STATE OF TEXAS §
§
BOARD OF REGENTS OF
STEPHEN F. AUSTIN STATE UNIVERSITY §
WHEREAS, the Board of Regents (the "Board") of Stephen F. Austin State University
(the "University") has authority under Article 7, Section 17, of the Texas Constitution (the
"Constitutional Provision") and Chapter 62, Texas Education Code (the "Act") to issue bonds and
pledge to their payment up to 50 percent of the money allocated to the University by the
Constitutional Provision and the Act to secure payment of the principal and interest on bonds issued
under authority of and for the purposes enumerated in the Constitutional Provision and the Act; and
WHEREAS, prior to the issuance of the bonds hereinafter authorized, the Board shall
obtain the approval of the projects to be financed with the proceeds of the bonds hereinafter
authorized from the Texas Higher Education Coordinating Board, and the approval of the issuance
of such bonds from the Texas Bond Review Board, as required by law; and
WHEREAS, the bonds hereafter authorized are being issued and delivered pursuant to the
Act.
THEREFORE, BE IT RESOLVED BY THE BOARD OF REGENTS OF STEPHEN
F. AUSTIN STATE UNIVERSITY THAT:
Section 1. DEFINITIONS. Unless otherwise expressly provided, or unless the context
otherwise requires, the terms defined in this Section shall have the respective meanings specified
for all purposes of this Resolution except in the form of the Bonds:
Act: shall have the meaning set forth in the preamble hereto.
Additional Bonds: Bonds of any issue or series authorized and issued pursuant to Section
13 hereof.
Authorized Denomination: shall have the meaning set forth in Section 3(a) hereof.
Board: shall have the meaning set forth in the preamble hereto.
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Bonds: the Constitutional Appropriation Bonds, Series 2008, authorized by this Resolution,
in the aggregate principal amount of $10,200,000.
Code: the Internal Revenue Code of 1986.
Comptroller: the Comptroller of Public Accounts of the State of Texas, and any successor
to the duties thereof
Constitutional Provision: shall have the meaning set forth in the preamble hereto.
Defeasance Securities: those investment securities described in Chapter 1207, Texas
Government Code, which at the time of investment are legal investments under the laws of the State
of Texas for the defeasance of obligations of the Board.
Designated Trust Office: shall have the meaning set forth in Section 5(a) hereof
Fiscal Year: the University's fiscal year beginning September 1 of each year and ending
August 31 of the following year.
Interest and Sinking Fund: the Fund created and established in accordance with Section 11
of this Resolution.
Interest Payment Date: each October 15 and April 15 commencing April 15, 2009.
MSRB: the Municipal Securities Rulemaking Board.
Notice of Sale and Bidding Instructions, the document by that name prepared in connection
with seeking competitive bids for the purchase and sale of the Bonds.
NRMSIR: each person whom the SEC or its staff has determined to be a nationally
recognized municipal securities information repository within the meaning of the Rule from time
to time.
Official Bid Form: the document by that name prepared in connection with the purchase and
sale of the Bonds submitted by bidders setting forth their proposed purchase price of, and, where
rates to be borne by, the Bonds.
Outstanding: when used with reference to the Bonds, at any date as of which the amount
of the Bonds Outstanding is to be determined, the aggregate of all Bonds, except:
(a) Bonds cancelled or delivered to the Paying Agent/Registrar for cancellation at or prior
to such date;
(b) Bonds deemed to have been paid as provided in this Resolution; and
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(c) Bonds in exchange for or in lieu of which other Bonds have been delivered under this
Resolution.
Paving Agent/Registrar: Wells Fargo Bank, N. A. and its successors and assigns.
Pledged Revenues: up to 50% of the money appropriated annually by the Constitutional
Provision and allocated by the Act to the Board to the extent necessary to pay debt service on the
Bonds and any Additional Bonds.
Purchasers: the bidder or syndicate of bidders determined to have submitted the best bid for
the Bonds, identified in Section 3(b) of this Resolution.
Registered Owner: shall have the meaning set forth in Section 3(a) hereof.
Resolution: this Resolution authorizing the issuance of the Bonds.
Rule: SEC Rule 15c2-12, as amended from time to time.
SEC: the United States Securities and Exchange Commission.
SID: any person designated by the State of Texas or an authorized department, officer, or
agency thereof as, and determined by the SEC or its staff to be, a state information depository
within the meaning of the Rule from time to time.
Special Record Date: shall have the meaning set forth in Section 5(b) hereof
University: Stephen F. Austin State University.
Sections AMOUNT AND PURPOSE OF THE BONDS. The Bonds of the Board are
hereby authorized to be issued and delivered in the aggregate principal amount not to exceed
$10,200,000 FOR THE PURPOSE OF PROVIDING FUNDS TO ACQUIRE LAND EITHER
WITH OR WITHOUT PERMANENT IMPROVEMENTS, TO CONSTRUCT AND EQUIP
BUILDINGS OR OTHER PERMANENT IMPROVEMENTS, AND FOR MAJOR REPAIR
AND REHABILITATION OFBUILDINGS OROTHERPERMANENT IMPROVEMENTS. The
proceeds of the Bonds are to be used to construct an Early Childhood Research Center. The title
of the Bonds shall be designated by the year in which it is awarded pursuant to Section 3 below.
The authority of the Vice President for Finance and Administration to execute and deliver an
Pricing Certificate, as hereinafter defined, for the Bonds shall expire at the close of business on
November 1, 2009.
Section 3. DATE, DENOMINATIONS, NUMBERS, MATURITIES AND TERMS
OF BONDS, (a) Terms of Bonds. Initially there shall be issued, sold, and delivered hereunder folly
registered bonds, without interest coupons, dated as set forth in the Pricing Certificate, hereinafter
defined, numbered consecutively from R-l upward, payable to the respective initial registered
TPFA\SFA HEAF\08: Res
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 15,2019 serially
or otherwise on the dates, in the years and in the principal amounts, respectively, as provided in the
Pricing Certificate of the Vice President for Finance and Administration.
(b) Pricing Certificate. As authorized by Chapter 1371, Government Code, as amended,
the Vice President for Finance and Administration 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 Vice President for Finance and Administration 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 6%.
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 will be incorporated in and made a part of this Resolution and will
be filed in the minutes of the Board as a part of this Resolution once the Bonds are issued.
(c) Sale of Bonds. The Bonds should be sold at a competitive sale and the Vice President
for Finance and Administration shall cause to be prepared a notice of sale and official statement in
such manner as the Vice President for Finance and Administration deems appropriate, to make the
notice of sale and official statement available to those institutions and firms wishing to submit a bid
for the Bonds, to receive such bids, and to award the sale of the Bonds to the bidder submitting the
best bid in accordance with the provisions of the notice of sale.
Section 4. 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.
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Section 5. CHARACTERISTICS OF THE BONDS, (a) Registration. Transfer
Conversion and Exchange: Authentication. The Board shall keep or cause to be kept at the
designated corporate trust office in Dallas, Texas (the "Designated Trust Office") of the Paying
Agent/Registrar books or records for the registration of the transfer, conversion and exchange of
the Bonds (the "Registration Books"), and the Board hereby appoints the Paying Agent/Registrar
as its registrar and transfer agent to keep such books or records and make such registrations of
transfers, conversions and exchanges under such reasonable regulations as the Board and the Paying
Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such registrations,
transfers, conversions and exchanges as herein provided. The Paying Agent/Registrar shall obtain
and record in the Registration Books the address of the Registered Owner of each Bond to which
payments with respect to the Bonds shall be mailed, as herein provided; but it shall be the duty of
each registered owner to notify the Paying Agent/Registrar in writing of the address to which
payments shall be mailed, and such interest payments shall not be mailed unless such notice has been
given. The Board shall have the right to inspect the Registration Books during regular business
hours of the Paying Agent/Registrar, 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. The Board shall pay the Paying Agent/Registrar's standard or
customary fees and charges for making such registration, transfer, conversion, exchange and
delivery of a substitute Bond or Bonds. Registration of assignments, transfers, conversions and
exchanges of Bonds shall be made in the manner provided and with the effect stated in the FORM
OF BOND. Each substitute Bond shall bear a letter and/or number to distinguish it from other
Bonds.
Except as provided in Section 5(c) of this Resolution, an authorized representative of the
Paying Agent/Registrar shall, before the delivery of any such Bond, date and manually sign said
Bond, and no such Bond shall be deemed to be issued or outstanding unless such Bond is so
executed. The Paying Agent/Registrar promptly shall cancel all paid Bonds and Bonds surrendered
for conversion and exchange. No additional ordinances, orders or resolutions need be passed or
adopted by the Board or any other body or person so as to accomplish the foregoing conversion
and exchange 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. Pursuant
to Chapter 1206, Texas Government Code, the duty of conversion and exchange of Bonds as
aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of the
Bonds, the converted and exchanged Bonds shall be valid, incontestable and enforceable in the same
manner and with the same effect as the Bonds which initially were issued and delivered pursuant
to this Resolution, approved by the Attorney General, and registered by the Comptroller of Public
Accounts.
(b) Payment of Bonds and Interest. The Board hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the Bonds, all
as provided in this Resolution. The Paying Agent/Registrar shall keep proper records of all
payments made by the Board and the Paying Agent/Registrar with respect to the Bonds.
TPFAXSFA HEAF\08: Res
(c) In General. The Bonds (i) shall be issued in fully registered form, without interest
coupons, with the principal of and interest on such Bonds to be payable only to the Registered
Owners thereof, (ii) may be redeemed prior to their scheduled maturities, (iii) may be transferred
and assigned, (iv) may be converted and exchanged for other Bonds, (v) shall have the
characteristics, (vi) shall be signed, sealed, executed and authenticated, (vii) the principal of and
interest on the Bonds shall be payable, and (viii) shall be administered and the Paying
Agent/Registrar and the Board shall have certain duties and responsibilities with respect to the
Bonds, all as provided, and in the manner and to the effect as required or indicated, in the FORM
OF BOND and the Pricing Certificate. The Bonds initially issued and delivered pursuant to this
Resolution (upon which shall appear the Registration Certificate of the Comptroller) are not
required to be, and shall not be, authenticated by the Paying Agent/Registrar, but on each substitute
Bond issued in conversion of and exchange for any Bond or Bonds issued under this Resolution the
Paying Agent/Registrar shall execute the PAYING AGENT/REGISTRAR'S AUTHENTICATION
CERTIFICATE, in the form set forth in the FORM OF BOND.
(d) Substitute Paving 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 national or state banking institution 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 60 days written notice to the Paying Agent/
Registrar. 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 national or state banking
institution with a capital and surplus of at least $10,000,000 to act as Paying Agent/Registrar under
this Resolution. Upon any change in the Paying Agent/Registrar, the previous Paying
Agent/Registrar promptly shall transfer and deliver the Registration Books (or a copy thereof),
along with all other pertinent books and records relating to the Bonds, to the new Paying
Agent/Registrar designated and appointed by the Board. Upon any change in the Paying
Agent/Registrar, the Board promptly will cause a written notice thereof to be sent by the new
Paying Agent/Registrar to each registered owner of the Bonds, by United States mail, first-class
postage prepaid, which notice also shall give the address of the new Paying Agent/Registrar. By
accepting the position and performing as such, each Paying Agent/Registrar shall be deemed to
have agreed to the provisions of this Resolution, and a certified copy of this Resolution shall be
delivered to each Paying Agent/Registrar.
(e) Book-Entry Only System. The Bonds issued in exchange for the Bonds initially
issued and delivered to the Underwriter 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 The Depository Trust Company, New York, New York ("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.
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With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the
Board and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC
Participant or to any person on behalf of whom such a DTC Participant holds an interest on the
Bonds. Without limiting the immediately preceding sentence, the Board and the Paying
Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the
records of DTC, Cede & Co., or any DTC Participant with respect to any ownership interest in the
Bonds, (ii) the delivery to any DTC Participant or any other person, other than a registered owner
of Bonds, as shown on the Registration Books, of any notice with respect to the Bonds, including
any notice of redemption, or (iii) the payment to any DTC Participant or any other person, other
than a registered owner of Bonds, as shown in the Registration Books of any amount with respect
to principal of, premium, if any, or interest on the Bonds. Notwithstanding any other provision of
this Resolution to the contrary but to the extent permitted by law, the Board and the Paying
Agent/Registrar shall be entitled to treat and consider the person in whose name each Bond is
registered in the Registration Books as the absolute owner of such Bond for the purpose of
payment of principal, premium, if any, and interest, with respect to such Bond, for the purpose of
giving notices of redemption and other matters with respect to such Bond, for the purpose of
registering transfers with respect to such Bond, and for all other purposes whatsoever. The Paying
Agent/Registrar shall pay all principal of, premium, if any, and interest on the Bonds only to or
upon the order of the respective 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 fiilly 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 provision 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.
(f) Successor Securities Depository; Transfers Outside Book-Entry Only System. In
the event that the Board or the Paying Agent/Registrar determines that DTC is incapable of
discharging its responsibilities described herein and in the representation letter of the Board to DTC
(as described in Section 24 of this Resolution) or DTC determines to discontinue providing its
services with respect to the Bonds, the Board shall (i) appoint a successor securities depository,
qualified to act as such under Section 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 the holders of the Bonds
TPFA\SFAHEAF\08:Res
transferring or exchanging Bonds shall designate, in accordance with the provisions of this
Resolution.
(g) Payments to Cede & Co. Notwithstanding any other provision of this Resolution
to the contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC,
all payments with respect to principal of, premium, if any, and interest on such Bond and all notices
with respect to such Bond shall be made and given, respectively, in the manner provided in the
representation letter of the Board to DTC.
Section 6. FORM OF BONDS. The form of the Bonds, including the form of Paying
Agent/Registrar's Authentication Certificate, the form of Assignment and the form of Registration
Certificate of the Comptroller to be attached to the Bonds initially issued and delivered to the
Purchasers pursuant to this Resolution, shall be, respectively, substantially in the form attached
hereto as Exhibit "A", with such appropriate variations, omissions, or insertions as are permitted
or required by this Resolution.
Should a municipal bond insurance policy be obtained by the Purchasers for the benefit of
the Bonds, the Board hereby authorizes a statement of insurance provided by the issuer of such
policy to be printed on the Bonds.
Section 7. PLEDGE, (a) Pledged Revenues. The principal of, premium, if any, and
interest on the Bonds and any Additional Bonds are and shall be payable solely from the Pledged
Revenues and from such other amounts, if any, as may be deposited to the Interest and Sinking
Fund at the direction of the Board from time to time, in the manner described below. The Board
hereby sets over, assigns and pledges to the Registered Owners any and all rights to the Pledged
Revenues.
(b) Chapter 1208, Government Code. Chapter 1208, Texas Government Code, applies to
the issuance of the Bonds and the pledge of the Pledged Revenues granted by the Board under
Section 7(a) 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 granted by the Board under Section 7(a) of this Resolution is to be subject to
the filing requirements of Chapter 9, Texas Business & Commerce Code, then in order to preserve
to the registered owners of the Bonds the perfection of the security interest in said pledge, the
Board agrees to take such measures as it determines are reasonable and necessary under Texas law
to comply with the applicable provisions of Chapter 9, Texas Business & Commerce Code and
enable a filing to perfect the security interest in said pledge to occur.
Section 8. CONSTITUTIONAL APPROPRIATION, (a) Allocation of State Funds.
The State Legislature has allocated funds as described in the Act, appropriated under authority of
the Constitutional Provision, for use by the respective institutions, including the University, for the
purposes specified in the Constitutional Provision and the Act.
TPFA\SFAHEAF\08:Res
(b) State Funds Available for Debt Service, As received in the State Treasury, up to 50%
of the amount so allocated to the University by the Act, and held in accordance with the pledge
contained in Section 7 hereof and paid out in accordance with the Section 10 hereof, will be
deposited and credited to a separate account established for the benefit of the University. Such
amount so deposited will be used by the University in such amounts as are necessary to pay debt
service for the Fiscal Year on the Bonds and Additional Bonds then Outstanding.
(c) Use of Surplus Funds. After all payments required herein for the payment of principal
and interest on the Bonds and Additional Bonds in any Fiscal Year have been made, any money
allocated to the University and not required for making such payments during such Fiscal Year may
be used by the Board for any purposes permitted by the Constitutional Provision and the Act, and
the Board reserves the right to use money in excess thereof for such purposes.
Section 9. PROCEDURE FOR REMITTING TO PAYING AGENT/REGISTRAR.
(a) Transfer of Funds. As used in this Section, the term "warrant" shall include the use of the
electronic funds transfer system established and operated by the Comptroller in accordance with
the provisions of applicable law, including, without limitation, the provisions of Section 403.016,
Texas Government Code.
(b) University Submission for Payment. The Act requires the Comptroller to distribute
funds allocated under the Act upon presentation of claims to the Comptroller and the issuance of
warrants in accordance with the provisions of the Texas Government Code and the Act. Not less
than 24 hours prior to an Interest Payment Date, the University shall submit a purchase voucher,
or other claim in the manner required by and in such form acceptable to the Comptroller, for money
necessary to pay the principal of and interest on the Bonds as the same shall mature or become due
on each such Interest Payment Date. While any of the Bonds is outstanding and unpaid, upon
receipt of such purchase voucher or claim, the Comptroller will draw all necessary and proper
warrants against moneys held for the University for such purpose, in order to carry out the purpose
of this Resolution, to the end that money will be available at the Paying Agent/Registrar in ample
time to pay the principal of and interest on the Bonds, as such principal and interest, respectively,
matures or becomes due.
(c) Delivery of Funds by Comptroller. The Comptroller will promptly deliver prior to
any Interest Payment Date the funds so requested by the University to the Paying Agent/Registrar,
either (i) by means of electronic funds transfer, or (ii) if the University reasonably determines that
the receipt of such funds by the Paying Agent/Registrar by means of electronic funds transfer would
be impractical, by written warrant to be made payable to the order of the Paying Agent/Registrar,
and delivered to the Paying Agent/Registrar by first-class mail, postage prepaid. Upon receipt of
such warrant by the Paying Agent/Registrar, the Paying Agent/Registrar shall give telephonic notice
to the Board (thereafter confirmed in writing by first-class mail, postage prepaid) that such warrant
has been received.
(d) Notice to Comptroller. If the Board fails to receive such notice prior to any Interest
Payment Date, it shall notify the Comptroller of such failure to receive such notice, and take such
TPFA\SFAHEAF\08:Res
measures as may be necessary to direct the Comptroller to make the required payments described
in subsection (a) of this Section to the Paying Agent/Registrar.
(e) Limitation on Transfer of Funds. Anything to the contrary herein notwithstanding,
in no event shall the Board submit or cause to be submitted to the Comptroller purchase vouchers
in amounts in excess of the amounts permitted by law to be made available for the payment of debt
service on the Bonds and any Additional Bonds secured by Pledged Revenues.
Section 10. BOARD'S PAYMENTS AND REDEMPTION. The Board obligates itself
and agrees, in accordance with the procedures described in Section 9 hereof, to pay to the Paying
Agent/Registrar, subject to the receipt by the University of the annual appropriations of money
coming into the State Treasury not otherwise appropriated, as mandated by the Constitutional
Provision and the Act, the Pledged Revenues with respect to the Bonds in immediately available
funds on the dates and in the amounts set forth below:
(i) To the extent necessary, the Board shall cause the Paying Agent/Registrar to
deposit from the Pledged Revenues into the Interest and Sinking Fund, an amount
which is sufficient to pay on any Interest Payment Date the principal, premium, if
any, and interest due on all Outstanding Bonds for the then current Fiscal Year;
(ii) On or before the date fixed for redemption of any Bond in accordance with this
Resolution, an amount which, together with any other amounts then on deposit
therein and available for such purpose will be sufficient to pay the applicable
redemption prices, together with accrued interest; and
(iii) On or before the maturity date for any Bond, an amount which, together with any
other amounts then on deposit therein and available for such purpose, will be
sufficient to finally pay the principal of such Bonds, together with accrued interest
thereon.
Section 11. INTEREST AND SINKING FUND, (a) Establishment. A separate and
special fund called the "Stephen F. Austin State University Constitutional Appropriation Bonds -
Interest and Sinking Fund" is hereby created and shall be established by the Board with the Paying
Agent/Registrar, and the same shall be maintained and used only as provided in this Resolution as
long as any Bond or Additional Bond is Outstanding.
(b) Deposits to Interest and Sinking Fund. The following amounts shall be deposited
into the Interest and Sinking Fund:
(i) immediately after delivery of any series of Bonds or Additional Bonds, all
accrued interest, if any, and premium, received from sale of such Bonds;
(ii) immediately upon receipt by the Paying Agent/Registrar, the payments made
to the Board pursuant to subsection (a) of Section 10 hereof; and
TPFA\SFA HEAF\08: Res 10
(iii) immediately upon receipt by the Paying Agent/Registrar, all money and
Governmental Obligations deposited in accordance with subsection (b) of Section 10 hereof.
(c) Payment of Debt Service. Except as otherwise specifically provided below, the
Interest and Sinking Fund shall be used solely to pay the principal of, premium, if any, and interest
on the Bonds and Additional Bonds when due, and the Paying Agent/Registrar shall make available
to itself out of the Interest and Sinking Fund the amounts required to pay or redeem the principal
of, premium, if any, and interest on the Bonds and Additional Bonds when due; provided, however,
that any money and Defeasance Securities deposited by the Board with the Paying Agent/Registrar
for the purpose of defeasing and terminating the Board's obligation to pay Pledged Revenues with
respect to any Bonds or Additional Bonds pursuant to Section 16 hereof shall be used by the Paying
Agent/Registrar, without investment of such money or reinvestment of such Defeasance Securities,
solely to pay or redeem the principal of, premium, if any, and interest on such Bonds or Additional
Bonds when due.
(d) Transfer of Excess Funds. Except for amounts deposited in accordance with
Section 16 hereof and amounts retained to pay the principal of or premium, if any, on any Bonds
or Additional Bonds, when no Bonds or Additional Bonds shall remain outstanding and the Paying
Agent/Registrar's expenses shall have been paid, any amounts remaining in the Interest and Sinking
Fund shall be paid to the Board.
Section 12. INVESTMENTS, Money in any Fund maintained pursuant to this Resolution
may, at the option of the Board, be invested in accordance with the provisions of Section 51.0031,
Texas Education Code and Chapter 2256, Texas Government Code, and in accordance with the
written policies adopted by the Board. Such investments shall be valued in terms of current market
value as of the last day of February and August of each year. Interest and income derived from
such deposits and investments shall be credited to the Fund from which the deposit or investment
was made. Such investments shall be sold promptly when necessary to prevent any default in
connection with the Bonds or Additional Bonds.
Section 13. ADDITIONAL BONDS, (a) Right to Issue. The Board reserves the right
to issue additional parity bonds in such amounts as are required for the purpose of financing any
project permitted by the Constitutional Provision or refunding any Outstanding Bonds or Additional
Bonds. Such Additional Bonds, when issued and delivered, shall be payable from, and secured by
an assignment and pledge of the Board's rights to, the Pledged Revenues and secured by the
Resolution, in the same manner and to the same extent as any of the Outstanding Bonds and
Additional Bonds; and all of the Bonds shall in all respects be on a parity and of equal dignity;
(b) Conditions. No installment or series of Additional Bonds shall be issued unless:
(i) A certificate is executed by the Chair of the Board of Regents or the Vice
President for Finance and Administration to the effect that no default exists in connection
with any of the covenants or requirements of the resolution or resolutions authorizing the
issuance of all then Outstanding Bonds and Additional Bonds;
TPFA\SFAHEAF\08:Res 11
(ii) A certificate of the Comptroller that money appropriated pursuant to the
Constitutional Provision and the Act, or any amendment thereto, will provide sufficient
money to pay the principal of and interest on the Additional Bonds;
(iii) The provisions for the issuance of such Additional Bonds will preserve the
primary sources for the payment thereof and for the security thereof as set forth in the
Constitutional Provision; and
(iv) Additional Bonds shall not be issued in principal amounts or bear interest at
rates that shall cause the aggregate payments of the principal and interest on the Bonds in
any Fiscal Year to exceed 50% of the money appropriated to the University by the Act.
Section 14. SPECIAL COVENANTS. The Board further covenants as follows:
(a) Other than the pledge of the Pledged Revenues for the payment of the Bonds, the
Pledged Revenues have not in any manner been pledged or assigned for the payment of any debt
or obligation of the Board;
(b) This Resolution shall constitute a contractual obligation of the Board and the Board
may be required by, to the extent permitted by the Resolution, the Registered Owners to carry out
its covenants and obligations hereunder by all legal and equitable means, including, but without
limitation, the use and filing of mandamus proceedings, in any court of competent jurisdiction,
against the Board, and its officials and employees;
(c) The Board shall authorize and do all things possible to assure that Pledged Revenues
are paid to the Paying Agent/Registrar on behalf of the University in accordance with the
requirements of Section 8 hereof; and
(d) It is the duty and obligation of the Board, its officers, employees and agents (who
are hereby so authorized and directed) to cooperate with and aid the Comptroller in calculating the
amounts to be deposited in, or transferred to the University and to ascertain the amounts to be
remitted to the Paying Agent/Registrar to meet the requirements for the due and punctual payment
of each installment of interest and each installment of principal as such interest and principal
respectively mature on any Interest Payment Date.
Section 15. PUBLIC FUNDS COLLATERAL. That all money in all Funds created by
the resolutions authorizing the Bonds, to the extent not invested, shall be secured in the manner
prescribed by law, for securing funds of the University, in principal amounts at all times not less
than the amounts of money credited to such Funds, respectively.
Section 16. DEFEASANCE OF BONDS, fa) Defeased Bonds That 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 subsection (d) of this
Section, when payment of the principal of such Bond, plus interest thereon to the due date (whether
TPFAVSFA HEAF\08: Res 12
such due date be by reason of maturity or otherwise) either (i) shall have been made or caused to
be made in accordance with the terms thereof, 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 in
accordance with an escrow agreement or other instrument (the "Future Escrow Agreement") for
such payment (1) lawful money of the United States of America sufficient to make such payment
or (2) Defeasance Securities that mature as to principal and interest in such amounts and at such
times as will insure the availability, without reinvestment, of sufficient money to provide for such
payment, and when proper arrangements have been made by the Issuer with the Paying
Agent/Registrar for the payment of its services until all Defeased Bonds shall have become due and
payable. 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. Notwithstanding any
other provision of this Resolution to the contrary, it is hereby provided that any determination not
to redeem Defeased Bonds that is made in conjunction with the payment arrangements specified
in subsection (a)(i) or (ii) of this Section 16 shall not be irrevocable, provided that: (1) in the
proceedings providing for such payment arrangements, the Issuer expressly reserves the right to
call the Defeased Bonds for redemption; (2) gives notice of the reservation of that right to the
owners ofthe Defeased Bonds immediately followingthe making of the payment arrangements; and
(3) directs that notice ofthe reservation be included in any redemption notices that it authorizes.
(b) Investment in Defeasance Securities. Any moneys so deposited with the Paying
Agent/Registrar may at the written direction ofthe Issuer be invested in Defeasance Securities,
maturing in the amounts and times as hereinbefore set forth, and all income from such Defeasance
Securities received by the Paying Agent/Registrar that is not required for the payment ofthe Bonds
and interest thereon, with respect to which such money has been so deposited, shall be turned over
to the Issuer, or deposited as directed in writing by the Issuer. Any Future Escrow Agreement
pursuant to which the money and/or Defeasance Securities are held for the payment of Defeased
Bonds may contain provisions permitting the investment or reinvestment of such moneys in
Defeasance Securities or the substitution of other Defeasance Securities upon the satisfaction of
the requirements specified in subsection (a)(i) or (ii) of this Section 16. All income from such
Defeasance Securities received by the Paying Agent/Registrar which is not required for the payment
ofthe Defeased Bonds, with respect to which such money has been so deposited, shall be remitted
to the Issuer or deposited as directed in writing by the Issuer.
(C) Paving Agent/Registrar Services. Until all Defeased Bonds shall have become due
and payable, the Paving 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 Issuer shall make proper
arrangements to provide and pay for such services as required by this Resolution.
(d) Selection of Bonds for Defeasance. In the event that the Issuer elects to defease less
than all ofthe 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.
TPFAVSFA HEAF\08: Res
Section 17. DAMAGED, MUTILATED, LOST, STOLEN OR DESTROYED
BONDS, (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 principal amount, maturity and interest rate, as the damaged, mutilated,
lost, stolen or destroyed Bond, in replacement for such Bond in the manner hereinafter provided.
(b) Application for Replacement Bonds. Application for replacement of damaged,
mutilated, lost, stolen or destroyed Bonds shall be made by the registered owner thereof to the
Paying Agent/Registrar. In every case of loss, theft or destruction of a Bond, the registered owner
applying for a replacement Bond shall furnish to the Board and to 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
registered owner shall furnish to the Board and to 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 registered owner shall surrender to the Paying Agent/Registrar
for cancellation the Bond so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section 17, 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 or interest on such Bond, 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 17.
(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement Bond,
the Paying Agent/Registrar shall charge the registered 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 17 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 17 shall constitute authority for the issuance of any such replace
ment bond without necessity of further action by 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 5(a) of this Resolution for Bonds
issued in conversion and exchange of other Bonds.
Section 18. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON
THE BONDS, (a) Covenants. The Board covenants to take any action necessary to assure, or
refrain from any action which would adversely affect, the treatment of the Bonds as obligations
TPFANSFA HEAFV08: Res 14
described in section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), the
interest on which is not includable in the "gross income" of the holder for purposes of federal
income taxation. In furtherance thereof, the Board covenants as follows:
(1) to 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 use"
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 use" 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 fond, within the meaning
of section 1.148-l(b) of the Treasury Regulations, and
TPFAXSFA HEAFA08: Res 15
(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 refundings); and
(8) to pay to the United States of America at least once during each five-year
period (beginning on the date of delivery of the Bonds) an amount that is at least equal to
90 percent of the "Excess Earnings," within the meaning of section 148(f) of the 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
bondholders. The Rebate Fund is established for the additional purpose of compliance with section
148 of the Code.
(c) Proceeds. The Board understands that the term "proceeds" includes "disposition
proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds, transferred
proceeds (if any) and proceeds of the refunded bonds expended prior to the date of issuance of the
Bonds. It is the understanding of the Board that the covenants contained herein are intended to
assure compliance with the Code and any regulations or rulings promulgated by the U.S.
Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter
promulgated which modify or expand provisions of the Code, as applicable to the Bonds, the Board
will not be required to comply with any covenant contained herein to the extent that such failure
to comply, in the opinion of nationally recognized bond counsel, will not adversely affect the
exemption from federal income taxation of interest on the Bonds under section 103 of the Code.
In the event that regulations or rulings are hereafter promulgated which impose additional
requirements which are applicable to the Bonds, the Board agrees to comply with the additional
requirements to the extent necessary, in the opinion of nationally recognized bond counsel, to
preserve the exemption from federal income taxation of interest on the Bonds under section 103
of the Code. In furtherance of such intention, the Board hereby authorizes and directs the Vice
President for Finance and Administration to execute any documents, certificates or reports required
by the Code and to make such elections, on behalf of the Board, which may be permitted by the
Code as are consistent with the purpose for the issuance of the Bonds.
Section 19. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR
THE PROJECT. The Board covenants to account for the expenditure of sale proceeds and
investment earnings to be used for the purposes described in Section 2 of this Resolution (the
TPFAXSFA HEAF\08: Res 16
"Project") on its books and records 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 is made, or (2) the Project is completed; but in no event later than three years after the
date on which the original expenditure is paid. The foregoing notwithstanding, the Board
recognizes that in order for proceeds to be expended under the 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 delivery of the Bonds, or (2) the date the Bonds are retired. The Board agrees
to obtain the advice of nationally-recognized bond counsel if such expenditure fails to comply with
the foregoing to assure that such expenditure will not adversely affect the tax-exempt status of the
Bonds. For purposes of this subsection, the Board shall not be obligated to comply with this
covenant if it obtains an opinion of nationally-recognized bond counsel to the effect that such failure
to comply will not adversely affect the excludability for federal income tax purposes from gross
income of the interest.
Section 20. DISPOSITION OF PROJECT. The Board covenants that the property
constituting the Project will not be sold or otherwise disposed in a transaction resulting in the
receipt by the Board of cash or other compensation, unless the Board obtains an opinion of
nationally-recognized bond counsel that such sale or other disposition will not adversely affect the
tax-exempt status of the Bonds. For purposes of this subsection, the portion of the property
comprising personal property and disposed of in the ordinary course shall not be treated as a
transaction resulting in the receipt of cash or other compensation. For purposes of this subsection,
the Board shall not be obligated to comply with this covenant if it obtains an opinion of nationally-recognized
bond counsel to the effect that such failure to comply will not adversely affect the
excludability for federal income tax purposes from gross income of the interest.
Section 21. COMPLIANCE WITH RULE 15c2-12. (a) Annual Reports, (i) The
Board shall provide annually to each NRMSIR and any SID, within six months after the end of each
fiscal year ending in or after 2008, financial information and operating data with respect to the
Board of the general type included in the final Official Statement authorized by Section 23 of this
Resolution, being the information described in Exhibit "B" hereto. Any financial statements so to
be provided shall be (1) prepared in accordance with the accounting principles described in
Exhibit "B" hereto, or such other accounting principles as the Board may be required to employ
from time to time pursuant to state law or regulation, and (2) audited, if the Board commissions
an audit of such statements and the audit is completed within the period during which they must be
provided. If the audit of such financial statements is not complete within such period, then the
Board shall provide audited financial statements for the applicable fiscal 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
TPFAVSFA HEAR08: Res 17
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 the Bonds no longer to be Outstanding.
(ii) The provisions of this Section are for the sole benefit of the registered owners and
beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any
benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The Board
undertakes to provide only the financial information, operating data, financial statements, and
notices which it has expressly agreed to provide pursuant to this Section and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the Board's financial results, condition, or prospects or hereby undertake to update
any information provided in accordance with this Section or otherwise, except as expressly
provided herein. The Board does not make 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
TTFA\SFAHEAF\08:Res 18
PART FROM ANY BREACH BY THE BOARD, WHETHER NEGLIGENT OR WITHOUT
FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY
RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON
ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR
MANDAMUS OR SPECIFIC PERFORMANCE.
(iv) No default by the Board in observing or performing its obligations under this Section
shall comprise a breach of or default under the 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 Outstanding Bonds 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.
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.
Section 22. CUSTODY, APPROVAL AND REGISTRATION OF BONDS; BOND
COUNSEL'S OPINION. The Chair of the Board or the designee thereof is hereby authorized to
have control of the Bonds initially issued and delivered hereunder and all necessary records and
proceedings pertaining to the Bonds pending their delivery and their investigation, examination and
approval by the Attorney General of the State of Texas, and their registration by the Comptroller.
Upon registration of the Bonds the Comptroller shall manually sign the Comptroller's Registration
TPFA\SFAHEAF\08:Res 19
Certificate attached to such Bonds, and the seal of the Comptroller shall be impressed, or placed
in facsimile, on such Certificate. The approving legal opinion of the Board's Bond Counsel may be
printed on the Bonds issued and delivered under this Resolution, but it shall have no legal effect,
and shall be solely for the convenience and information of the registered owners of the Bonds.
Section 23. OFFERING DOCUMENTS, On behalf of the Board, the Vice President for
Finance and Administration is hereby authorized and directed to provide for and oversee the
preparation of the Notice of Sale, the Official Bid Form and a preliminary and final official
statement in connection with the issuance of the Bonds, and to approve such official statement and
deem it final in compliance with the Rule and to provide it to the Purchasers of the Bonds in
compliance with the Rule.
Section 24. DTC LETTER OF REPRESENTATION. The previous execution and
delivery of the DTC Blanket Letter of Representations with respect to obligations of the Board is
hereby ratified and confirmed; and the provisions thereof shall be fully applicable to the Bonds.
Section 25. FURTHER PROCEEDINGS. That the Chair and Secretary, the Vice
President of Administration and Finance, and all other officers, employees and agents of the Board,
and each of them, shall be and they are hereby expressly authorized, empowered and directed from
time to time and at any time to do and perform all such acts and things and to execute, acknowledge
and deliver in the name and under the corporate seal and on behalf of the Board all such
instruments, whether herein mentioned, as may be necessary or desirable in order to carry out the
terms and provisions of this Resolution and the Bonds, including, but not limited to, the printing
of any statement relating to the insuring of the Bonds by a municipal bond insurance company.
Section 26. RULES OF CONSTRUCTION. For all purposes of this Resolution, unless
the context requires otherwise, all references to designated Sections and other subdivisions are to
the Sections and other subdivisions of this Resolution. The words "herein", "hereof1 and
"hereunder" and other words of similar import refer to this Resolution as a whole and not to any
particular Section or other subdivision. Except where the context otherwise requires, terms defined
in this Resolution to impart the singular number shall be considered to include the plural number
and vice versa. References to any named person means that party and its successors and assigns.
References to any constitutional, statutory or regulatory provision means such provision as it exists
on the date this Resolution is adopted by the Board and any future amendments thereto or
successor provisions thereof. Any reference to the payment of principal in this Resolution shall be
deemed to include the payment of mandatory sinking fund redemption payments, if any. Any
reference to FORM OF BOND shall refer to the form attached to this Resolution as Exhibit "A".
The Board hereby incorporates the recitals set forth in the preamble hereto as if set forth in full at
this place and further finds and determines that said recitals are true and correct.
Section 27. PUBLIC NOTICE. It is hereby found and determined that each of the
officers and members of the Board was duly and sufficiently notified officially and personally, in
advance, of the time, place, and purpose of the meeting at which this Resolution was adopted, and
TPFA\SFA HEAF\08: Res 20
that this Resolution would be introduced and considered for adoption at said meeting; and that said
meeting was open to the public, and public notice of the time, place, and purpose of said meeting
was given, all as required by Chapter 551, Texas Government Code.
Section 28, PAYMENT OF ATTORNEY GENERAL FEE The Board hereby
authorizes the disbursement of a fee equal to the lesser of (i) one-tenth of one percent of the
principal amount of each Series of the Bonds or (ii) $9,500 per Series, provided that such fee shall
not be less than $750, to the Attorney General of Texas Public Finance Division for payment of the
examination fee charged by the State of Texas for the Attorney General's review and approval of
public securities and credit agreements, as required by Section 1202.004 of the Texas Government
Code. The System Representative is hereby instructed to take the necessary measures to make this
payment. The Board is also authorized to reimburse the appropriate funds for such payment from
proceeds of the Bonds.
Section 29. NO PERSONAL LIABILITY. No covenant or agreement contained in the
Bonds, this Resolution or any corollary instrument shall be deemed to be the covenant or agreement
of any member of the Board or any officer, agent, employee or representative of the Board in his
individual capacity, and neither the directors, officers, agents, employees or representatives of the
Board nor any person executing the Bonds shall be personally liable thereon or be subject to any
personal liability for damages or otherwise or accountability by reason of the issuance thereof, or
any actions taken or duties performed, whether by virtue of any constitution, statute or rule of law,
or by the enforcement of any assessment or penalty, or otherwise, all such liability being expressly
released and waived as a condition of and in consideration for the issuance of the Bonds.
TPFA\SFAHEAF\08:Res 21
EXHIBIT A
FORM OF BOND
NO. R-_ PRINCIPAL
AMOUNT
UNITED STATES OF AMERICA
STATE OF TEXAS
STATE OF TEXAS
CONSTITUTIONAL APPROPRIATION BOND
(STEPHEN F. AUSTIN STATE UNIVERSITY)
SERIES 2008
DATE OF MATURITY INTEREST ORIGINAL CUSIP
BOND DATE' RATE' ISSUE DATE'
ON THE MATURITY DATE SPECIFIED ABOVE, THE BOARD OF REGENTS
OF STEPHEN F. AUSTIN STATE UNIVERSITY (the "Board"), hereby promises to pay to
, or to the registered assignee hereof (either being hereinafter called
the "registered owner") the principal amount of
DOLLARS
and to pay interest thereon, from the original issue date of this Bond specified above, to the date
of its scheduled maturity, at the rate of interest per annum specified above, with said interest being
payable on *, and semiannually on each April 15 and October 15 thereafter, except
that if the Paying Agent/Registrar's Authentication Certificate appearing on the face of this Bond
is dated later than *, such interest is payable semiannually on each
* and * following such date.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of
the United States of America, without exchange or collection charges. The principal of this Bond
shall be paid to the registered owner hereof upon presentation and surrender of this Bond at
maturity, at the designated corporate trust office in Dallas, Texas (the "Designated Trust Office")
As provided in the Pricing Certificate. To the extent that the Pricing Certificate relating to the Bonds is inconsistent with any provisions in this Form of
Bond or contains information to complete missing information in this Form of Bond, the language in the Pricing Certificate shall be used in the executed
Bonds.
TPFA\SFA HEAF\08: Res A-1
of Wells Fargo Bank, N. A, which is the "Paying Agent/Registrar" for this Bond. The payment of
interest on this Bond shall be made by the Paying Agent/Registrar to the registered owner hereof
as shown by the Registration Books kept by the Paying Agent/Registrar at the close of business on
the fifteenth day of the month next preceding such interest payment date, by check drawn by the
Paying Agent/Registrar on, and payable solely from, funds of the Board required to be on deposit
with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be
sent by the Paying Agent/ Registrar by United States mail, postage prepaid, on each such interest
payment date, to the registered owner hereof at its address as it appears on the Registration Books
kept by the Paying Agent/Registrar, as hereinafter described. The Board covenants with the regis
tered owner of this Bond that no later than each principal payment and/or interest payment date for
this Bond it will make available to the Paying Agent/Registrar from the Interest and Sinking Fund
as defined by the resolution authorizing the Bonds (the "Bond Resolution") the amounts required
to provide for the payment, in immediately available funds, of all principal of and interest on the
Bonds, when due. Notwithstanding the foregoing, during any period in which ownership of the
Bonds is determined only by a book entry at a securities depository for the Bonds, any payment to
the securities depository, or its nominee or registered assigns, shall be made in accordance with
existing arrangements between the Board and the securities depository.
DURING ANY PERIOD in which ownership of the Bonds is determined only by a book
entry at a securities depository for the Bonds, if fewer than all of the Bonds of the same maturity
and bearing the same interest rate are to be redeemed, the particular Bonds of such maturity and
bearing such interest rate shall be selected in accordance with the arrangements between the Board
and the securities depository.
IN THE EVENT of a non-payment of interest on a scheduled payment date, and for 30
days thereafter, a new record date for such interest payment (a "Special Record Date") will be
established by the Paying Agent/Registrar, if and when fiinds for the payment of such interest have
been received from the Board. Notice of the Special Record Date and of the scheduled payment
date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at
least five business days prior to the Special Record Date by United States mail, first class postage
prepaid to the address of each registered owner appearing on the Registration Books of the Paying
Agent/Registrar at the close of business on the last business day next preceding the date of mailing
of such notice.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a
Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the
principal corporate trust office of the Paying Agent/Registrar is located are authorized by law or
executive order to close, or the United States Postal Service is not open for business, then the date
for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal
holiday, or day on which banking institutions are authorized to close, or the United States Postal
Service is not open for business; and payment on such date shall have the same force and effect as
if made on the original date payment was due.
TPFA\SFA HEAF\08: Res A-2
THIS BOND is one of a Series of Bonds of like tenor and effect except as to maturity and
interest rate, dated as of the Original Issue Date stated above, authorized in accordance with the
Constitution and laws of the State of Texas in the aggregate principal amount of $ *,
FOR THE PURPOSE OF PROVIDING FUNDS TO ACQUIRE LAND EITHER WITH OR
WITHOUT PERMANENT IMPROVEMENTS, TO CONSTRUCT AND EQUIP BUILDINGS
OR OTHER PERMANENT IMPROVEMENTS, AND FOR MAJOR REPAIR AND
REHABILITATION OF BUILDINGS OR OTHER PERMANENT IMPROVEMENTS AND
PAYING THE COSTS OF ISSUANCE OF THE BONDS, all as specifically described in the Bond
Resolution. All Bonds of this Series are issuable solely as fully registered bonds, without interest
coupons, in the denomination of any integral multiple of $5,000 (an "Authorized Denomination").
ON , 20 *, or on any date thereafter, the Bonds of this series maturing
on and after , 20 * may be redeemed prior to their scheduled maturities, at the
option of the Board, with funds derived from any available and lawful source, as a whole, or in part,
and, if in part, the particular Bonds, or portions thereof, to be redeemed shall be selected and
designated by the Board (provided that a portion of a Bond may be redeemed only in an integral
multiple of $5,000), at par and accrued interest to the date fixed for redemption; provided, that
during any period in which ownership of the Bonds is determined only by a book entry at a
securities depository for the Bonds, if fewer than all of the Bonds of the same maturity and bearing
the same interest rate are to be redeemed, the particular Bonds of such maturity and bearing such
interest rate shall be selected in accordance with the arrangements between the Board and the
securities depository.
THE BONDS maturing on , 20 * (the "Term Bonds") are subject to
mandatory sinking fund redemption by lot prior to maturity in the following amounts, on the
following dates and at a price of par plus accrued interest to the redemption date.
THE PRINCIPAL AMOUNT of the Term Bonds required to be redeemed pursuant to
the operation of the mandatory sinking fund redemption provisions shall be reduced, at the option
of the Board by the principal amount of any Term Bonds of the stated maturity which, at least 50
As provided in the Pricing Certificate. To the extent that the Pricing Certificate relating to the Bonds is inconsistent with any provisions in this Form of
Bond or contains information to complete missing information in this Form of Bond, the language in the Pricing Certificate shall be used in the executed
Bonds.
TPFAVSFA HEAR08: Res A-3
days prior to a mandatory redemption date, (1) shall have been acquired by the Board, at a price
not exceeding the principal amount of such Term Bonds plus accrued interest to the date of
purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, (2) shall have been
purchased and canceled by the Paying Agent/Registrar at the request of the Board with monies in
the debt service fund at a price not exceeding the principal amount of the Term Bonds plus accrued
interest to the date of purchase thereof, or (3) shall have been redeemed pursuant to the optional
redemption provisions and not theretofore credited against a mandatory sinking fund redemption
requirement.
WITH RESPECT TO any optional redemption of the Bonds, unless certain prerequisites
to such redemption required by the Bond Order have been met and moneys sufficient to pay the
principal of and premium, if any, and interest on the Bonds to be redeemed shall have been received
by the Paying Agent/Registrar prior to the giving of such notice of redemption, such notice shall
state that said redemption may, at the option of the Board, be conditional upon the satisfaction of
such prerequisites and receipt of such moneys by the Paying Agent/Registrar on or prior to the date
fixed for such redemption, or upon any prerequisite set forth in such notice of redemption. If a
conditional notice of redemption is given and such prerequisites to the redemption and sufficient
moneys are not received, such notice shall be of no force and effect, the District shall not redeem
such Bonds and the Paying Agent/Registrar shall give notice, in the manner in which the notice of
redemption was given, to the effect that the Bonds have not been redeemed.
THIS BOND OR ANY PORTION or portions hereof in any authorized denomination may
be assigned and shall be transferred only in the Registration Books of the Board kept by the Paying
Agent/Registrar acting in the capacity of registrar for the Bonds, upon the terms and conditions set
forth herein and in the Bond Resolution. This Bond may only be assigned and transferred upon
presentation and surrender to the Paying Agent/Registrar for transfer of registration and
cancellation, together with proper instruments of assignment, in form and with guarantee of
signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this Bond or any
portion or portions hereof to the assignee or assignees in whose name or names this Bond or any
such portion or portions hereof is or are to be transferred and registered. The form of Assignment
printed or endorsed on this Bond shall be executed by the registered owner, or its duly authorized
attorney or representative, and shall conclusively evidence the assignment hereof. Upon surrender
of this Bond or any portion or portions hereof for transfer of registration, an authorized
representative of the Paying Agent/Registrar shall make such transfer in the Registration Books,
and shall deliver a new Bond or Bonds payable to such assignee or assignees, or to the registered
owner hereof in the case of the assignment and transfer of only a portion of this Bond, in exchange
for this Bond, all in the form and manner as provided in the next paragraph hereof for the
conversion and exchange of Bonds. The registered owner of this Bond shall be deemed and treated
by the Board and the Paying Agent/Registrar as the absolute owner hereof for all purposes,
including payment and discharge of liability upon this Bond to the extent of such payment, and the
Board and the Paying Agent/Registrar shall not be affected by any notice to the contrary.
IN ACCORDANCE WITH the form and procedures set forth in the Bond Resolution, this
Bond, or any unpaid portion hereof, may, at the written request of the registered owner or the
TPFANSFA HEAF\08: Res A-4
assignee or assignees hereof, or its or their duly authorized attorneys or representatives, with
guarantee of signatures satisfactory to the Paying Agent/Registrar, be converted into and exchanged
for a Bond or Bonds of like aggregate principal amount, payable to the appropriate registered
owner, assignee or assignees, as the case may be, having the same maturity date, and bearing
interest at the same rate, in any Authorized Denomination as requested, upon surrender of this
Bond to the Paying Agent/Registrar at the Designated Trust Office for cancellation. The one
requesting a transfer, conversion or 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 of transfer,
conversion or exchange.
WHENEVER the beneficial ownership of this Bond is determined by a book entry at a
securities depository for the Bonds, the foregoing requirements of holding, delivering or
transferring this Bond shall be modified to require the appropriate person or entity to meet the
requirements of the securities depository as to registering or transferring the book entry to produce
the same effect.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Board,
resigns or otherwise ceases to act as such, the Board has covenanted in the Bond Resolution that
it promptly will appoint a competent and legally qualified substitute therefor, and cause written
notice thereof to be mailed to the registered owners of the Bonds.
IT IS HEREBY CERTIFIED, recited, and covenanted that this Bond has been duly and
validly authorized, issued, and delivered; that all acts, conditions, and things required or proper to
be performed, exist, and be done precedent to or in the authorization, issuance and delivery of this
Bond have been performed, existed, and been done in accordance with the law; that this Bond is
a special obligation of the Board payable from up to 50% of the money appropriated pursuant to
Article VII, Section 17, Texas Constitution, and allocated annually to Stephen F. Austin State
University in accordance with the provisions of Chapter 62, Texas Education Code, as amended,
which are the "Pledged Revenues" as defined in the Bond Resolution, and that the principal of and
interest on this Bond are payable from and secured by a first lien on and pledge of the Pledged
Revenues.
THE BOARD has reserved the right, subject to the restrictions stated in the Bond
Resolution authorizing this Series of Bonds, to issue additional parity revenue bonds which also
may be made payable from, and secured by a first lien on and pledge of, the Pledged Revenues.
THE REGISTERED OWNER shall never have the right to demand payment of this
obligation out of any funds raised or to be raised by taxation.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Bond Resolution, agrees to be bound by such
terms and provisions, acknowledges that the Bond Resolution is duly recorded and available for
inspection in the official minutes and records of the Board, and agrees that the terms and provisions
TPFA\SFA HEAFN08: Res A-5
of this Bond and the Bond Resolution constitute a contract between each registered owner hereof
and the Board.
IN WITNESS WHEREOF, the Board has caused this Bond to be signed with the manual
or facsimile signature of the Chair of the Board and countersigned with the manual or facsimile
signature of the Secretary of the Board, and has caused the official seal of the Board to be duly
impressed, or placed in facsimile, on this Bond.
(signature) (signature)
Secretary, Board of Regents Chair, Board of Regents
(SEAL)
FORM OF PAYING AGENT/REGISTRAR1 S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Bond is not accompanied by
an executed Registration Certificate of the
Comptroller of Public Accounts of the State of Texas)
It is hereby certified that this Bond has been issued under the provisions of the Bond
Resolution described in the text of this Bond; and that this Bond has been issued in conversion or
replacement of, or in exchange for, a bond, bonds or a portion of a bond or bonds of a Series which
originally was approved by the Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State of Texas.
Dated:
Paying Agent/Registrar
By
Authorized Representative
FORM OF REGISTRATION CERTIFICATE OF
THE COMPTROLLER OF PUBLIC ACCOUNTS:
COMPTROLLER'S REGISTRATION CERTIFICATE:
REGISTER NO.
TPFA\SFA HEAF\08: Res A-6
I hereby certify that this Bond has been examined, certified as to validity and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the
Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
NOTE TO PRINTER:
FORM OF ASSIGNMENT:
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
Please insert Social Security or Taxpayer Identification Number of Transferee
(Please print or typewrite name and address, including zip code of Transferee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to register the transfer of the within Bond on the books kept for registration
thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by
a member firm of the New York Stock
TPFAXSFA HEAF\08: Res A-7
Exchange or a commercial bank or trust
company. NOTICE: The signature above must
correspond with the name of the Registered
Owner as it appears upon the front of this
Bond in every particular, without alteration or
enlargement or any change whatsoever.
INSERTIONS FOR THE INITIAL BOND
The initial Bond shall be in the form set forth in this Exhibit, except that:
A. immediately under the name of the Bond, the headings "INTEREST RATE" and
"MATURITY DATE" shall both be completed with the words "As shown below" and
"CUSIP NO." shall be deleted.
B. the first paragraph shall be deleted and the following will be inserted:
"ON THE MATURITY DATE SPECIFIED ABOVE, the Board of Regents of Stephen
F. Austin State University (the "Board"), being a political subdivision, hereby promises to pay to
, or registered assigns (hereinafter called the "Registered
Owner"), on * in each of the years, in the principal installments and bearing
interest at the per annum rates set forth in the following schedule:
Principal Maturity Interest Initial
Amount (October 15) Rate Yield
(Information from the Pricing Certificate of the System Representative to be inserted)
The Board promises to pay interest on the unpaid principal amount hereof (calculated on the basis
of a 360-day year of twelve 30-day months) from , 20 * at the respective
Interest Rate per annum specified above. Interest is payable on , 20 * and
semiannually on each * and * thereafter to the date of payment
of the principal installment specified above; except, that if this Bond is required to be authenticated
and the date of its authentication is later than the first Record Date (hereinafter defined), such
principal amount shall bear interest from the interest payment date next preceding the date of
authentication, unless such date of authentication is after any Record Date but on or before the next
*As provided in the Pricing Certificate. To the extent that the Pricing Certificate relating to the Bonds is inconsistent
with any provisions in this Form of Bond or contains information to complete missing information in this Form of
Bond, the language in the Pricing Certificate shall be used in the executed Bonds.
TPFA\SFAHEAF\08:Res A-8
following interest payment date, in which case such principal amount shall bear interest from such
next following interest payment date; provided, however, that if on the date of authentication hereof
the interest on the Bond or Bonds, if any, for which this Bond is being exchanged is due but has not
been paid, then this Bond shall bear interest from the date to which such interest has been paid in
full.11
C. The initial Bond shall be numbered "T-l."
TPFA\SFAHEAF\08:Res A-9
EXHIBITS
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 21 of this Resolution.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the Board to be provided annually in
accordance with such Section are as specified (and included in the Appendix or under the headings
of the Official Statement referred to) below:
Appendix B and Appendix E of the Official Statement
Accounting Principles
The accounting principles referred to in the Resolution are the accounting principles
described in the notes to the financial statements referred to above, which are generally accepted
accounting principles of fund accounting for colleges and universities.
B-l
TPFA\SFA HEAB08: Res
PRICING CERTIFICATE OF THE VICE PRESIDENT
FOR FINANCE AND ADMINISTRATION
STATE OF TEXAS §
§
STEPHEN F. AUSTIN STATE UNIVERSITY §
I, the undersigned, Vice President for Finance and Administration of Stephen F. Austin State
University (the "University"), in connection with the Resolution Authorizing the Issuance of State
of Texas Constitutional Appropriation Bonds (Stephen F. Austin State University), Series 2008,
Authorizing the Vice President for Finance and Administration to Accept Bids With Respect to the
Sale of the Bonds And Resolving Other Matters Related Thereto (the "Bond Resolution") adopted
by the Board of Regents of the University (the "Board") on November 14, 2008, do hereby certify
the following:
1. This certificate is executed for and on behalf of the Board and for the benefit of the
Attorney General of the State of Texas and the Initial Purchaser (as hereinafter defined) of the bonds
entitled "State of Texas Constitutional Appropriation Bonds (Stephen F. Austin State University),
Series 2008," dated December 15, 2008, in the aggregate principal amount of $10,200,000 (the
"Series 2008 Bonds") authorized by the Bond Resolution.
2. This certificate is the Pricing Certificate of the Vice President for Finance and
Administration as required by Section 3(b) of the Bond Resolution.
3. Unless otherwise defined herein, capitalized terms used in this certificate have the
same meanings as those used and defined in the Bond Resolution. The terms of the Series 2008
Bonds are further shown in Exhibit "A".
4. It is hereby officially found, determined and declared that the terms of this sale are the
most advantageous reasonably obtainable and the Initial Purchasers bid produced the lowest net
effective interest rate to the University. A true and correct copy of the winning bid form is attached
hereto as Exhibit "B".
5. Based upon representations from the Board's financial advisor, I have determined that
the price to be paid by the Initial Purchaser for the Series 2008 Bonds is in excess of 95% of the
aggregate principal amount thereof plus accrued interest to the date of delivery of the Series 2008
Bonds, and that the Series 2008 Bonds have a true interest cost of 4.373119% which is not in excess
of a 6% net effective interest rate. Based upon representations from the Board's financial advisor,
I have also determined that the requirements of Sections 3(b) and (c) of the Bond Resolution have
been met.
6. The Series 2008 Bonds shall (i) be sold to the Initial Purchaser pursuant to the Official
Bid at the price specified therein, (ii) be in the aggregate principal amount set forth in Exhibit "A".
TPFA\SFA HEAF\08: AwardCert
(iii) mature in the years and in the principal amounts as set forth in Exhibit "A", (iv) bear interest at
the rates for each such maturity and such interest shall be payable on the dates set forth in Exhibit "A"
and in the Bond Resolution, and (v) have the other terms and provisions, all as provided in Exhibit
"A", the Bond Resolution, the winning bid, and the Official Statement. Each Series 2008 Bond shall
reflect the terms set forth in Exhibit "A" and the provisions in the Form of Bond set forth in the Bond
Resolution.
7. Pursuant to Section 23 of the Bond Resolution, for and on behalf of the Board, the
Official Statement relating to the Series 2008 Bonds is hereby approved and said Official Statement
is hereby deemed final in compliance with the Rule.
8. Pursuant to Section 21 (a) of the Bond Resolution, the Board agrees to provide
annually to the NRMSIRs and SIDs the updated financial information and operating data to the extent
specified, by the times, subject to the exceptions noted, and as provided in the Bond Resolution and
the Official Statement under the caption "CONTINUING DISCLOSURE OF INFORMATION -
Annual Reports." The Board further agrees that in connection with such undertaking that the Board
will annually update financial information and operating data reported in conformity with GASB 35
for those years for which it is available and to present, including by incorporation, the financial
information and operating data in the prior format to the extent necessary to give five years of
historical data.
9. The $81,600 premium received on the Series 2008 Bonds shall be applied to pay costs
of issuance.
■TPFA\SFAHEAF\D8: AwardCert
EXECUTED this December 2, 2008.
TPFA\SFAHEAF\08: AwardCert
Vice President f^Finknce and Administration
Stephen F.'AustinVSl&te University
EXHIBIT A
TERMS OF THE BONDS
$10,200,000
STATE OF TEXAS
CONSTITUTIONAL APPROPRIATION BONDS
(STEPHEN F. AUSTIN STATE UNIVERSITY),
SERIES 2008
GENERAL DESCRIPTION OF SERIES 2008 BONDS
The Series 2008 Bonds in the aggregate original principal amount of $10,200,000 will be
issued as serial bonds dated December 15,2008, in the original principal amounts for each maturity,
maturing on the dates, bearing interest at the rates, and at the yields as set forth in the following
Maturity Schedule.
MATURITY SCHEDULE
Bond Date: December 15, 2008
Interest accrues from: December 18,2008 which is the Date of Delivery
Interest payable: April 15,2009 and each April 15 and October 15 thereafter until maturity
Optional Redemption. The Bonds are not subject to redemption prior to maturity.
TPFA\SFA HEAR08: AwardCert
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