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Resolution - Issuance of BAWA Contract Revenue Attachment "A" RESOLUTION AUTHORIZING THE ISSUANCE OF BAYTOWN AREA WATER• AUTHORITY WATER SUPPLY CONTRACT REVENUE BONDS,SERIES 1999 (CITY OF BAYTOWN PROJECT) BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY: ARTICLE I FINDINGS AND DETERMINATIONS Section 1. Findings and Determinations. It is hereby officially found and determined that the Baytown Area Water Authority (the "Authority") was organized, created, and established pursuant to Chapter 600,Acts of the 63rd Legislature of the State of Texas,Regular Session, 1973, as amended. ARTICLE II DEFINITIONS AND INTERPRETATIONS Section 2.1. Definitions. In this Resolution,the following terms shall have the following meanings, unless the context clearly indicates otherwise: "Act" means Chapter 600, Acts of the 63rd Legislature of the State of Texas, Regular Session, 1973, as amended. "Additional Bonds" mean the additional parity revenue bonds which the Authority has reserved the right to issue in Article VI of this Resolution. "Authority" means the Baytown Area Water Authority,and where appropriate,the Board of Directors thereof. "Baytown Contract" means that certain Amended and Restated Water Supply Contract for Treated Water, originally entered into on January 31, 1977, and amended and restated as of October 23, 1997,between the Authority and the City,under which the Authority sells water to the City. "Blanket Issuer Letter of Representations"means the Blanket Issuer Letter of Representations between the Authority,the Registrar and DTC. "Bonds" mean the Baytown Area Water Authority Water Supply Contract Revenue Bonds, Series 1999, authorized by this Resolution. "Business Day" means any day which is not a Saturday, Sunday, a day on which banking institutions in Dallas, Texas, are authorized by law or executive order to close, or a legal holiday. "City" means the City of Baytown,Texas,and where appropriate,the City Council thereof. • "Closing Date" means the date of the initial delivery of and payment for the Bonds. "Code" means the Internal Revenue Code of 1986, as amended. "Comptroller" means the Comptroller of Public Accounts of the State of Texas. "DTC" means The Depository Trust Company of New York,New York, or any successor securities depository. "DTC Participant"means brokers and dealers,banks,trust companies,clearing corporations and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. "Houston Contract" means that certain Water Supply Contract dated October 24, 1994, between the Authority and the City of Houston,Texas,under which the Authority buys water from Houston for resale to the City and others, or any similar contract between the same parties for the purchase and sale of untreated water, entered into by the Authority with the consent of the City. "Initial Bond" means the Initial Bond authorized by Section 3.4(d). "Interest Payment Date",when used in connection with any Bond,means May 1,2000,and each November 1 and May 1 thereafter until maturity or prior redemption. "MSRB" means the Municipal Securities Rulemaking Board. "NRMSIR" means 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. "Outstanding Bonds" mean the Authority's Water Supply Contract Revenue Bonds(City of Baytown, Texas Project), Series 1978, Water Supply Contract Revenue Bonds (City of Baytown, Texas Project), Series 1979, Water Supply Contract Revenue Bonds (City of Baytown Project), Series 1994 and Water Supply Contract Revenue Bonds (City of Baytown Project), Series 1997. "Owner" or "Registered Owner", when used with respect to any Bond means the person or entity in whose name such Bond is registered in the Register. Any reference to a particular percentage or proportion of the Owners shall mean the Owners at a particular time of the specified percentage or proportion in aggregate principal amount of all Bonds then outstanding under this Resolution, exclusive of Bonds held by the Authority. "Parity Bonds" mean the Bonds, the Outstanding Bonds, and any Additional Bonds. • "Pledged Revenues" mean the payments to be made by the City to the Authority for treated water, consisting of the amounts required to pay, and pledged herein for payment of,the principal -2- 1 L of, premium, if any, and interest on the Bonds and the Outstanding Bonds. The City is authorized to pay the Pledged Revenues pursuant to Section 402.020, Local Government Code. "Project" means the property, works, facilities, and improvements (whether previously existing or to be made,constructed,or acquired)within or without the boundaries of the Authority, necessary(1)to acquire surface water supplies from sources both within and without the boundaries of the Authority, including particularly the sources provided by the Houston Contract, (2) to conserve, store,transport,treat, and purify untreated water purchased by the Authority pursuant to the Houston Contract,and(3)to distribute,sell,and deliver treated water to the City pursuant to the terms of the Baytown Contract. "Project Costs" mean the costs incurred by the Authority or the City with respect to the acquisition of the Project, including, but not limited to, the following items: (1) Obligations for labor,materials, services, and equipment; (2) Costs of any bonds and insurance, the costs of which are not otherwise provided for; (3) Costs of engineering services,including costs for preliminary design and development work, test borings, surveys, estimates, plans and specifications, supervising construction, and performing all other duties required by or consequent upon proper construction; (4) Expenses incurred in connection with the issuance and sale of the Bonds, including without limitation (a) fees and expenses of accountants, auditors, attorneys, underwriters, engineers, and financial advisors,(b)materials,supplies,printing and engraving,(c) recording and filing fees, (d) rating agency fees, and (e) initial fees and expenses of a trustee, if any; (5) costs required to be paid under the terms of any contract or contracts in connection with the Project; (6) sums required to reimburse the Authority or the City for advances made by either of them for any of the above items, including fees of any kind for any other cost incurred, including expenses for organization of the Authority, overhead expenses and expenses for any work done by either the Authority or the City which are properly chargeable to the Project; and (7) costs of all other items related to the acquisition of the Project. "Record Date"means,for any Interest Payment Date,the fifteenth(15th)calendar day of the • month next preceding each Interest Payment Date. -3- • "Register"means the books of registration kept by the Registrar in which are maintained the IDnames and addresses of, and the principal amounts of the Bonds registered to, each Owner. "Registrar" means Texas Commerce Bank National Association, and its successors in that capacity. "Resolution"means this bond resolution and all amendments hereof and supplements hereto. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. "SID" means the Municipal Advisory Council of Texas,which has been designated by the State of Texas as, and determined by the SEC staff to be, a state information depository within the meaning of the Rule. Section 2.2. Interpretations. All terms defined herein and all pronouns used in this Resolution shall be deemed to apply equally to singular and plural and to all genders. The titles and headings of the articles and sections of this Resolution have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof. This Resolution and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to sustain the validity of the Bonds and the validity of the lien on and pledge of the Pledged Revenues to secure the payment of the Bonds. ARTICLE III TERMS OF THE BONDS Section 3.1. Authorization and Authorized Amount. The Bonds shall be issued pursuant to the Act in fully registered form,without coupons,in the amount of$9,095,000 for the purpose of making, purchasing, constructing, leasing or otherwise acquiring, enlarging, expanding, and modifying the Project. Section 3.2. Designation, Date, and Interest Payment Dates. The Bonds shall be designated as"Baytown Area Water Authority Water Supply Contract Revenue Bonds,Series 1999 (City of Baytown Project)," and shall be dated November 1, 1999. The Bonds shall bear interest payable on each Interest Payment Date at the rates set out in Section 3.3 of this Resolution from the later of November 1, 1999,or the most recent Interest Payment Date to which interest has been paid or duly provided for, calculated on the basis of a 360 day year of twelve 30 day months. Section 3.3. Initial Bonds: Numbers and Denominations. The Bonds shall be initially issued bearing the numbers,in the principal amounts,and bearing interest at the rates set forth in the following schedule,and may be transferred and exchanged as set out in this Resolution. The Bonds • shall mature on May 1 in each of the years and in the amounts set out in such schedule. The Initial Bond shall be numbered I-1 and all other Bonds shall be numbered in sequence beginning with R-1. -4- Bonds delivered on transfer of or in exchange for other Bonds shall be numbered in order of their • authentication by the Registrar,shall be in the denomination of$5,000 or integral multiples thereof, and shall mature on the same date and bear interest at the same rate as the Bond or Bonds in lieu of which they are delivered. Principal Interest Year Amount Rate 2004 $210,000 2005 225,000 2006 235,000 2007 245,000 2008 265,000 2009 550,000 2010 585,000 2011 610,000 2012 645,000 2013 675,000 2014 710,000 2015 745,000 2016 785,000 2017 825,000 2018 870,000 2019 915,000 Section 3.4. Execution of Bonds: Seal. (a) The Bonds shall be signed on behalf of the Authority by the President of the Board of Directors and countersigned by the Secretary of the Board of Directors, by their manual, lithographed, or facsimile signatures, and the official seal of the Authority shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Bonds shall have the same effect as if each of the Bonds had been signed manually and in person by each of said officers,and such facsimile seal on the Bonds shall have the same effect as if the official seal of the Authority had been manually impressed upon each of the Bonds. (b) If any officer of the Authority whose manual or facsimile signature shall appear on the Bonds shall cease to be such officer before the authentication of such Bonds or before the delivery of such Bonds,such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in such office. (c) Except as provided below, no Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit of this Resolution unless and until there appears thereon the Registrar's Authentication Certificate substantially in the form provided herein,duly authenticated by manual execution by an officer or duly authorized signatory of the Registrar. In lieu of the executed Registrar's Authentication Certificate described above, the Initial Bond delivered at the Closing Date shall have attached hereto the Comptroller's Registration Certificate substantially in 1111 the form provided herein, manually executed by the Comptroller, or by his duly authorized agent, which certificate shall be evidence that the Initial Bond has been duly approved by the Attorney -5- General of the State of Texas and that it is a valid and binding obligation of the City, and has been • registered by the Comptroller. (d) On the Closing Date, the Initial Bond, being a single bond representing the entire principal amount of the Bonds, payable in stated installments to the Underwriter or its designee, executed by manual or facsimile signature of the Mayor and City Clerk of the City,approved by the Attorney General, and registered and manually signed by the Comptroller, shall be delivered to the Underwriter or its designee. Upon payment for the Initial Bond,the Registrar shall cancel the Initial Bond and deliver Bonds to DTC in accordance with Section 13. Section 3.5. Payment of Principal and Interest. The Registrar is hereby appointed as the registrar and paying agent for the Bonds. The principal of the Bonds shall be payable, without exchange or collection changes, in any coin or currency of the United States of America which, on the date of payment,is legal tender for the payment of debts due the United States of America,upon their presentation and surrender as they respectively become due and payable at the principal payment office of the Registrar in Dallas, Texas. The interest on each Bond shall be payable by check payable on the Interest Payment Date, mailed by the Registrar on or before each Interest Payment Date to the Owner of record as of the Record Date,to the address of such Owner as shown on the Register,or by such other method,acceptable to the Registrar,requested by and at the risk and expense of the Owner. If the date for the payment of principal or interest on any Bond is not a Business Day,then the date for such payment shall be the next succeeding Business Day,and payment on such date shall have the same force and effect as if made on the original date such payment was due. Section 3.6. Successor Registrars. The Authority covenants that at all times while any Bonds are outstanding it will provide a commercial bank or trust company,organized under the laws of the United States or any state, authorized under such laws to exercise trust powers, and subject to supervision or examination by federal or state authority, to serve as and perform the duties and services of Registrar for the Bonds. The Authority reserves the right to change the Registrar for the Bonds on not less than 60 days written notice to the Registrar,so long as any such notice is effective not less than 60 days prior to the next succeeding principal or interest payment date on the Bonds. Promptly upon the appointment of any successor Registrar,the previous Registrar shall deliver the Register or a copy thereof to the new Registrar, and the new Registrar shall notify each Owner, by United States mail, first class postage prepaid, of such change and of the address of the new Registrar. Each Registrar hereunder,by acting in that capacity, shall be deemed to have agreed to the provisions of this Section. Section 3.7. Special Record Date. If interest on any Bond is not paid on any Interest Payment Date and continues unpaid for thirty(30)days thereafter,the Registrar shall establish a new record date for the payment of such interest,to be known as a Special Record Date. The Registrar shall establish a Special Record Date when funds to make such interest payment are received from or on behalf of the Authority. Such Special Record Date shall be fifteen(15)days prior to the date fixed for payment of such past due interest,and notice of the date of payment and the Special Record Date shall be sent by United States mail,first class,postage prepaid,not later than five(5)days prior -6- to the Special Record Date,to each Owner of record of an affected Bond as of the close of business • on the day prior to the mailing of such notice. Section 3.8. Ownership; Unclaimed Principal and Interest. Subject to the further provisions of this Section,the Authority,the Registrar and any other person may treat the person in whose name any Bond is registered as the absolute Owner of such Bond for the purpose of making and receiving payment of the principal of or interest on such Bond, and for all other purposes, whether or not such Bond is overdue,and neither the Authority nor the Registrar shall be bound by any notice or knowledge to the contrary. All payments made to the person deemed to be the Owner of any Bond in accordance with this Section shall be valid and effectual and shall discharge the liability of the Authority and the Registrar upon such Bond to the extent of the sums paid. Amounts held by the Registrar which represent principal of and interest on the Bonds remaining unclaimed by the Owner after the expiration of three years from the date such amounts have become due and payable shall be reported and disposed of by the Registrar in accordance with the applicable provisions of Texas law including, to the extent applicable, Title 6 of the Texas Property Code, as amended. Section 3.9. Registration, Transfer, and Exchange. So long as any Bonds remain outstanding, the Registrar shall keep the Register at its principal payment office in Dallas, Texas, and, subject to such reasonable regulations as it may prescribe, the Registrar shall provide for the registration and transfer of Bonds in accordance with the terms of this Resolution. Each Bond shall be transferable only upon the presentation and surrender thereof at the principal payment office of the Registrar in Dallas, Texas, duly endorsed for transfer, or accompanied by an assignment duly executed by the registered Owner or his authorized representative in form satisfactory to the Registrar. Upon due presentation of any Bond in proper form for transfer,the Registrar shall authenticate and deliver in exchange therefor,within three(3) Business Days after such presentation,a new Bond or Bonds,registered in the name of the transferee or transferees,in authorized denominations and of the same maturity and aggregate principal amount and bearing interest at the same rate as the Bond or Bonds so presented. All Bonds shall be exchangeable upon presentation and surrender thereof at the principal payment office of the Registrar in Dallas, Texas, for a Bond or Bonds of the same maturity and interest rate and in any authorized denomination, in an aggregate amount equal to the unpaid principal amount of the Bond or Bonds presented for exchange. The Registrar shall be and is hereby authorized to authenticate and deliver exchange Bonds in accordance with the provisions of this Section. Each Bond delivered in accordance with this Section shall be entitled to the benefits and security of this Resolution to the same extent as the Bond or Bonds in lieu of which such Bond is delivered. The Authority or the Registrar may require the Owner of any Bond to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with the transfer or exchange of such Bond. Any fee or charge of the Registrar for such transfer or exchange shall be paid by the Authority. -7- Section 3.10. Cancellation of Bonds. All Bonds paid or redeemed in accordance with this • Resolution,and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and delivered in accordance herewith, shall be cancelled and destroyed upon the making of proper records regarding such payment or redemption. The Registrar shall furnish the Authority with appropriate certificates of destruction of such Bonds. Section 3.11. Mutilated,Lost,or Stolen Bonds. Upon the presentation and surrender to the Registrar of a mutilated Bond, the Registrar shall authenticate and deliver in exchange therefor a replacement Bond of like maturity, interest rate and principal amount, bearing a number not contemporaneously outstanding. The Authority or the Registrar may require the Owner of such Bond to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith and any other expenses connected therewith,including the fees and expenses of the Registrar. If any Bond is lost,apparently destroyed,or wrongfully taken,the Authority,pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall authorize and the Registrar shall authenticate and deliver a replacement Bond of like maturity, interest rate and principal amount, bearing a number not contemporaneously outstanding, provided that the Owner thereof shall have: (1) furnished to the Authority and the Registrar satisfactory evidence of the ownership of and the circumstances of the loss, destruction or theft of such Bond; (2) furnished such security or indemnity as may be required by the Registrar and the Authority to save them harmless; (3) paid all expenses and charges in connection therewith, including, but not limited to,printing costs,legal fees,fees of the Registrar and any tax or other governmental charge that may be imposed; and (4) met any other reasonable requirements of the Authority and the Registrar. If,after the delivery of such replacement Bond,a bona fide purchaser of the original Bond in lieu of which such replacement Bond was issued presents for payment such original Bond, the Authority and the Registrar shall be entitled to recover such replacement Bond from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Authority or the Registrar in connection therewith. If any such mutilated,lost,apparently destroyed or wrongfully taken Bond has become or is about to become due and payable, the Authority in its discretion may, instead of issuing a replacement Bond, authorize the Registrar to pay such Bond. • -8- Each replacement Bond delivered in accordance with this Section shall be entitled to the . benefits and security of this Resolution to the same extent as the Bond or Bonds in lieu of which such replacement Bond is delivered. Section 3.12. Book-Entry System. (a) The Initial Bond shall be registered in the name of . Except as provided in Section 3.13 hereof, all other Bonds shall be registered in the name of Cede & Co., as nominee of DTC. (b) With respect to Bonds registered in the name of Cede&Co.,as nominee of DTC,the Authority and the Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such DTC Participant holds an interest in the Bonds, except as provided in this Resolution. Without limiting the immediately preceding sentence,the Authority and the 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 an Owner, as shown on the Register, 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 an Owner,as shown on the Register, 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, the Authority and the Registrar shall be entitled to treat and consider the person in whose name each Bond is registered in the Register as the absolute Owner of such Bond for the purpose of payment of principal of and interest on the Bonds,for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfer with respect to such Bond, and for all other purposes whatsoever. The 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 Register as provided in this Resolution,or their respective attorneys duly authorized in writing,and all such payments shall be valid and effective to fully satisfy and discharge the Authority's obligations with respect to payments of principal,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 Register, shall receive a certificate evidencing the obligation of the Authority to make payments of amounts due pursuant to this Resolution. Upon delivery by DTC to the Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede&Co.,and subject to the provisions of this Resolution with respect to interest checks being mailed to the Owner of record as of the Record Date, the phrase "Cede& Co." in this Resolution shall refer to such new nominee of DTC. (c) The execution and delivery of the Blanket Issuer Letter of Representations is hereby approved with such changes as may be approved by the President of the Board of Directors of the Authority and the President is hereby authorized and directed to execute such Blanket Issuer Letter of Representations. Section 3.13. Successor Securities Depository:Transfer Outside Book-Entry Only System. In the event that the Authority in its sole discretion, determines that the beneficial owners of the Bonds be able to obtain certificated Bonds,or in the event DTC discontinues the services described herein,the Authority 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, as identified by DTC, of the appointment of such successor securities depository and -9- transfer one or more separate Bonds to such successor securities depository or(ii) notify DTC and DTC Participants,as identified by DTC,of the availability through DTC of Bonds and transfer one or more separate Bonds to DTC Participants having Bonds credited to their DTC accounts, as identified by DTC. In such event,the Bonds shall not longer be restricted to being registered in the Register 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 Owners transferring or exchanging Bonds shall designate, in accordance with the provisions of this Resolution. Section 3.14. Payments to Cede & Co. Notwithstanding any other provision of this Resolution to the contrary, so long as any Bonds are 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 Bonds, and all notices with respect to such Bonds, shall be made and given, respectively, in the manner provided in the Blanket Letter of Representations. Section 3.15. Optional Redemption. The Bonds are subject to optional redemption as set forth in the Form of Bond in this Resolution. Principal amounts may be redeemed only in integral multiples of$5,000. If a Bond subject to redemption is in a denomination larger than$5,000,a portion of such Bond may be redeemed,but only in integral multiples of $5,000. Upon surrender of any Bond for redemption in part, the Registrar,in accordance with Section 3.9 hereof,shall authenticate and deliver in exchange therefor a Bond or Bonds of like maturity, and interest rate in an aggregate principal amount equal to the unredeemed portion of the Bond so surrendered. Notice of any redemption identifying the Bonds to be redeemed in whole or in part shall be given by the Registrar at least thirty days prior to the date fixed for redemption by sending written notice by first class mail, postage prepaid, to the Owner of each Bond to be redeemed in whole or in part at the address shown on the Register. Such notices shall state the redemption date, the redemption price, the place at which Bonds are to be surrendered for payment and, if less than all Bonds outstanding of a particular maturity are to be redeemed,the numbers of the Bonds or portions thereof of such maturity to be redeemed. Any notice given as provided in this Section shall be conclusively presumed to have been duly given,whether or not the Owner receives such notice. By the date fixed for redemption, due provision shall be made with the Registrar for payment of the redemption price of the Bonds or portions thereof to be redeemed,plus accrued interest to the date fixed for redemption. When Bonds have been called for redemption in whole or in part and due provision has been made to redeem the same as herein provided, the Bonds or portions thereof so redeemed shall no longer be regarded as outstanding except for the purpose of receiving payment solely from the funds so provided for redemption, and the rights of the Owners to collect interest which would otherwise accrue after the redemption date on any Bond or portion thereof called for redemption shall terminate on the date fixed for redemption. • -10- ARTICLE IV FORM OF BOND AND CERTIFICATES Section 4.1. Forms. The form of the Bond, including the form of the Registrar's authentication certificate, the form of assignment, and the form of the Comptroller's Registration Certificate for the bond to be initially issued, shall be substantially as follows,with such additions, deletions and variations, as may be necessary or desirable and not prohibited by this Resolution, including any legend regarding bond insurance if such insurance is obtained by the Underwriter: (a) Form of Bond. UNITED STATES OF AMERICA STATE OF TEXAS COUNTIES OF HARRIS AND CHAMBERS NUMBER AMOUNT REGISTERED REGISTERED BAYTOWN AREA WATER AUTHORITY WATER SUPPLY CONTRACT REVENUE BOND SERIES 1999 (CITY OF BAYTOWN PROJECT) INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP: November 1, 1999 REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS The Baytown Area Water Authority,a political subdivision of the State of Texas(herein the "Authority") for value received, promises to pay, but solely from certain Pledged Revenues as hereinafter provided,to the Registered Owner identified above or registered assigns,on the Maturity Date specified above, upon presentation and surrender of this Bond to Chase Bank of Texas, National Association(the"Registrar")at its principal payment office in Dallas,Texas,the principal amount identified above,in any coin or currency of the United States of America which on the date of payment of such principal is legal tender for the payment of debts due the United States of America,and to pay, solely from such Pledged Revenues, interest thereon at the rate shown above, calculated on the basis of a 360 day year of twelve 30 day months, from the later of November 1, • 1999,or the most recent interest payment date to which interest has been paid or duly provided for. Interest on this Bond is payable by check payable on May 1 and November 1,beginning on May 1, -11- 2000,mailed to the registered owner as shown on the books of registration kept by the Registrar as • of the fifteenth(15th) calendar day of the month next preceding each interest payment date. THIS BOND IS ONE OF A DULY AUTHORIZED SERIES OF BONDS aggregating $9,095,000, issued for the purpose of making, purchasing, constructing, leasing or otherwise acquiring, enlarging, expanding, and modifying certain water supply, treatment, and distribution facilities,as authorized by Chapter 600,Acts of the 63rd Legislature of the State of Texas,Regular Session, 1973, as amended, and pursuant to a resolution adopted by the Board of Directors of the Authority (the "Resolution"), which Resolution is of record in the official minutes of the Board of Directors. THIS BOND AND THE SERIES OF WHICH IT IS A PART are special obligations of the Authority that are payable,together with the Authority's outstanding Water Supply Contract Revenue Bonds (City of Baytown Project), Series 1978, Series 1979, Series 1994 and Series 1997 (the "Outstanding Bonds"),from and secured by an irrevocable first lien on and pledge of payments equal to the principal of, premium, if any, and interest on the Bonds and the Outstanding Bonds (the "Pledged Revenues")to be made to the Authority by the City of Baytown,Texas(the"City"),under a contract which unconditionally obligates the City to make such payments. No owner of the Bonds shall ever have the right to demand payment of the Bonds from funds derived or to be derived from taxation or from any revenues of the Authority other than those pledged above. THE AUTHORITY RESERVES THE RIGHT to redeem Bonds maturing on and after May 1, 2010, prior to their scheduled maturities, in whole or from time to time in part, in integral multiples of$5,000, on May 1, 2009, or any date thereafter at par plus accrued interest on the principal amounts called for redemption to the date fixed for redemption. Reference is made to the Resolution for complete details concerning the manner of redeeming the Bonds. NOTICE OF ANY REDEMPTION shall be given at least thirty (30)days prior to the date fixed for redemption by first class mail, addressed to the registered owner of each Bond to be redeemed in whole or in part at the address shown on the books of registration kept by the Registrar. When Bonds or portions thereof have been called for redemption,and due provision has been made to redeem the same, the principal amounts so redeemed shall be payable solely from the funds provided for redemption, and interest which would otherwise accrue on the amounts called for redemption shall terminate on the date fixed for redemption. THIS BOND IS TRANSFERABLE only upon presentation and surrender at the principal payment office of the Registrar in Dallas, Texas, duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or his authorized representative, subject to the terms and conditions of the Resolution. THE BONDS ARE EXCHANGEABLE at the principal payment office of the Registrar in Dallas,Texas,for bonds in the principal amount of$5,000 or any integral multiple thereof, subject to the terms and conditions of the Resolution. • -12- THE AUTHORITY HAS RESERVED THE RIGHT to issue additional parity revenue bonds, • subject to the restrictions contained in the Resolution, which may be equally and ratably payable from,and secured by a first lien on and pledge of,the Pledged Revenues in the same manner and to the same extent as this Bond and the series of which it is a part. IT IS HEREBY DECLARED AND REPRESENTED that this Bond has been duly and validly issued and delivered;that all acts,conditions,and things required or proper to be performed, exist, and be done precedent to or in the issuance and delivery of this Bond have been performed, existed, and been done in accordance with law;that this Bond and the series of which it is a part do not exceed any statutory limitation; and that provision has been made for the payment of the principal of and interest on this Bond and all of the Bonds by the creation of the aforesaid lien on and pledge of the Pledged Revenues. IN WITNESS WHEREOF, the Authority has caused its corporate seal to be impressed, printed,or lithographed hereon and has caused this Bond to be executed by the manual or facsimile signatures of the President and Secretary of the Board of Directors. (AUTHENTICATION (SEAL) BAYTOWN AREA WATER AUTHORITY CERTIFICATE) xxxxxxxxx President, Board of Directors COUNTERSIGNED: xxxxxxxxx Secretary, Board of Directors (b) Form of Registration Certificate. COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. 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 xxxxxxxxxx Comptroller of Public Accounts of the State of Texas (SEAL) • -13- i (c) Form of Authentication Certificate. • AUTHENTICATION CERTIFICATE It is hereby certified that this Bond has been delivered pursuant to the Bond Resolution described in the text of this Bond. Chase Bank of Texas,National Association As Paying Agent/Registrar By Authorized Signature Date of Authentication (d) Form of Assignment. ASSIGNMENT For value received, the undersigned hereby sells, assigns, and transfers unto (Please print or type name, address, and zip code of Transferee) (Please insert Social Security or Taxpayer Identification Number of Transferee) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer said Bond on the books kept for registration thereof, with full power of substitution in the premises. DATED: Signature Guaranteed: Registered Owner NOTICE: The signature above must correspond to the name of the registered owner as shown on the face of this Bond in every particular, NOTICE: Signature must be guaranteed without any alteration, enlargement or change by a member firm of the New York Stock whatsoever. Exchange or a commercial bank or trust company. (e) The Initial Bond shall be in the form set forth in paragraphs (a), (b) and (d) of this Section, except for the following alterations: • -14- • (i) 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 the word"CUSIP" deleted; (ii) in the first paragraph of the Bond,the words"on the maturity date specified above" and "at the rate shown above" shall be deleted and the following shall be inserted at the end of the first sentence"..., with such principal to be paid in installments on May 1 in each of the years and in the principal amounts identified in the following schedule and with such installments bearing interest at the per annum rates set forth in the following schedule: [Information to be inserted from schedule in Section 3.3] (iii) the Initial Bond shall be numbered I-1. Section 4.2. Legal Opinion;Cusip Numbers;Bond Insurance. The approving opinion of Vinson & Elkins L.L.P., Houston, Texas, and CUSIP Numbers may be printed on the Bonds, but errors or omissions in the printing of such opinion or such numbers shall have no effect on the validity of the Bonds. If bond insurance is obtained by the Underwriter, the Bonds may bear an appropriate legend as provided by the insurer. ARTICLE V SECURITY AND SOURCE OF PAYMENT FOR ALL PARITY BONDS Section 5.1. Pledge; Special Obligations. All Parity Bonds shall be payable from, and secured by an irrevocable first lien on and pledge of, the Pledged Revenues. The Bonds and the Outstanding Bonds are special obligations of the Authority payable solely from the sources described above,and no Owner shall ever have the right to demand payment of the Bonds from funds derived or to be derived from taxation or from any revenues of the Authority other than those pledged above. Section 5.2. Project Fund. Immediately after the delivery of the Bonds,the Authority shall deposit into a separate and special fund called the "Baytown Area Water Authority Water Supply Contract Revenue Bonds,Series 1999(City of Baytown Project),Project Fund"(the"Project Fund"), the amount specified in Section 7.3 of this Resolution. The Project Fund shall be established,drawn on, and used by the Authority to pay Project Costs. Any moneys held as part of the Project Fund shall be invested and reinvested in accordance with the laws of the State of Texas and the Authority's investment policy. All interest and realized profit from such investment shall be used to pay Project Costs or may be transferred to and deposited 111 in the Debt Service Fund if so directed by the Authority. -15- After the completion of the Project,any proceeds of the Bonds remaining in the Project Fund • shall be deposited into the Debt Service Fund. Section 5.3. Debt Service Fund. Immediately after the sale and delivery of the Bonds, the Authority shall deposit into a separate and special fund called the "Baytown Area Water Supply Contract Revenue Bonds, Series 1999 (City of Baytown Project) Debt Service Fund" (the "Debt Service Fund"),the accrued interest, if any, on the Bonds to the date of delivery. All payments by the City of Pledged Revenues shall be deposited directly into the appropriate debt service fund for the Bonds and the Outstanding Bonds. The establishment of separate debt service funds for each issue of Parity Bonds is for administrative convenience only. The Parity Bonds are on a parity with and of equal dignity with one another and are equally and ratably payable from the Pledged Revenues. All money from time to time deposited and held in the Debt Service Fund shall be held in trust by the Registrar for the benefit of the Bondowners and used to pay, or cause to be paid, the principal of and interest on the Bonds. Section 5.4. Payment of Pledged Revenues. Under the terms ofthe Contract,by approving the issuance of the Bonds and the terms and conditions of the Bond Resolution, the City has absolutely and unconditionally obligated itself and agreed to make the following payments to the Authority in immediately available funds: (1) On or before January 1, 2000, and on or before the first day of each month thereafter, such amounts, in approximately equal monthly installments, as will be sufficient, together with any other amounts available therefor in the Debt Service Fund,to pay the interest which shall become due on the Bonds on the next succeeding interest payment date; and (2) On or before May 1, 2003, and on or before the first day of each month thereafter, such amounts, in approximately equal monthly installments, as will be sufficient, together with any other amounts available therefor in the Debt Service Fund,to pay the principal which shall become due on the Bonds on the next succeeding principal payment date. Section 5.5. Investment of Funds. Money in the Project Fund and the Debt Service Fund may, at the option of the Authority, be invested in any investments authorized by Texas law, including specifically the Public Funds Investment Act, and the Authority's investment policy. Section 5.6. Security for Uninvested Funds. So long as any Bonds remain outstanding, all uninvested money on deposit in,or credited to,the Project Fund and the Debt Service Fund shall be secured by the pledge of security, as provided by Texas law. • -16- ARTICLE VI • ADDITIONAL BONDS In addition to the right to issue inferior lien obligations,the Authority reserves the right,upon the request of the City, to issue Additional Bonds in such amounts as are required for the purpose of acquiring funds to(i)complete making,purchasing constructing,leasing,or acquiring the Project, (ii) enlarge, expand, or modify the Project, (iii) reconstruct the Project, or (iv) refund any Bonds, Outstanding Bonds, or Additional Bonds. The Additional Bonds when issued and delivered, shall be payable from and secured by a first lien on and pledge of the Pledged Revenues (which shall include additional payments sufficient to enable the Authority to comply with all terms and conditions of the Resolution authorizing the issuance of such Additional Bonds),in the same manner and to the same extent as the Outstanding Bonds and the Bonds; and the Bonds, the Outstanding Bonds, and any Additional Bonds shall be in all respects on a parity and of equal dignity. No such installment or series of Additional Bonds shall be issued unless: (i) A certificate is executed by the President and Secretary of the Board to the effect that no default exists in connection with any covenants or requirements of the Bonds, Outstanding Bonds, or Additional Bonds, if any, and that the Debt Service Fund contains the amount then required to be on deposit therein; (ii) The City is not in default with respect to any series of bonds or other debt issued by it; and (iii) The principal of any such installment or series of Additional Bonds is payable on May 1 and interest is payable on May 1 and November 1. ARTICLE VII PROVISIONS CONCERNING SALE AND APPLICATION OF PROCEEDS OF BONDS Section 7.1. Sale. The sale and delivery of the Bonds to (the "Underwriter") at a price of par, plus accrued interest thereon to date of delivery, plus a cash premium of $ , is hereby authorized, approved, ratified and confirmed, subject to the approving opinion as to the legality of the Bonds of the Attorney General of the State of Texas,and of Vinson&Elkins L.L.P.,Houston,Texas,bond counsel. It is hereby found and declared that the Bonds were sold at public sale and that the bid of the Underwriter was the best bid received by the Authority. • -17- Section 7.2. Federal Income Tax Inclusion. • (a) General Tax Covenant. The Authority intends that the interest on the Bonds shall be excludable from gross income for purposes of federal income taxation pursuant to sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended (the "Code), and applicable Income Tax Regulations (the "Regulations"). The Authority covenants and agrees not to take any action,or knowingly omit to take any action within its control that,if taken or omitted,respectively, would cause the interest on the Bonds to be includable in gross income,as defined in section 61 of the Code, for federal income tax purposes. In particular, the Authority covenants and agrees to comply with each requirement of this Section; provided, however, that the Authority shall not be required to comply with any particular requirement of this Section if the Authority has received an opinion of nationally recognized bond counsel("Counsel's Opinion")that such noncompliance will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or if the Authority has received a Counsel's Opinion to the effect that compliance with some other requirement set forth in this Section will satisfy the applicable requirements of the Code and Regulations,in which case compliance with such other requirement specified in such Counsel's Opinion shall constitute compliance with the corresponding requirement specified in this Section. (b) No Private Use or Payment and No Private Loan Financing. The Authority shall certify, through an authorized officer, employee or agent that based upon all facts and estimates known or reasonably expected to be in existence on the date the Bonds are delivered, that the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be "private activity bonds" within the meaning of section 141 of the Code and the Regulations promulgated thereunder. Moreover,the Authority covenants and agrees that it will make such use of the proceeds of the Bonds including interest or other investment income derived from Bond proceeds, regulate the use of property financed, directly or indirectly, with such proceeds, and take such other and further action as may be required so that the Bonds will not be "private activity bonds" within the meaning of section 141 of the Code and the Regulations promulgated thereunder. (c) No Federal Guarantee. The Authority covenants and agrees not to take any action, or knowingly omit to take any action within its control,that,if taken or omitted,respectively,would cause the Bonds to be "federally guaranteed" within the meaning of section 149(b)of the Code and the applicable Regulations thereunder,except as permitted by section 149(b)(3)of the Code and such Regulations. (d) No Hedge Bonds. The Authority covenants and agrees that it has not and will not to take any action, and has not knowingly omitted and will not knowingly omit to take any action, within its control,that,if taken or omitted,respectively,would cause the Bonds to be"hedge bonds" within the meaning of section 149(g) of the Code and the applicable Regulations thereunder. (e) No Arbitrage. The Authority shall certify,through an authorized officer, employee or agent that based upon all facts and estimates known or reasonably expected to be in existence on the date the Bonds are delivered,the Authority will reasonably expect that the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be"arbitrage bonds"within the meaning • of section 148(a) of the Code and the applicable Regulations promulgated thereunder. Moreover, the Authority covenants and agrees that it will make such use of the proceeds of the Bonds including -18- interest or other investment income derived from Bond proceeds,regulate investments of proceeds • of the Bonds, and take such other and further action as may be required so that the Bonds will not be "arbitrage bonds" within the meaning of section 148(a) of the Code and the applicable Regulations promulgated thereunder. (f) Arbitrage Rebate. If the Authority does not qualify for an exception to the requirements of Section 148(f) of the Code relating to the required rebate to the United States,the Authority will take all necessary steps to comply with the requirement that certain amounts earned by the Authority on the investment of the "gross proceeds" of the Bonds (within the meaning of section 148(f)(6)(B)of the Code),be rebated to the federal government. Specifically,the Authority will (i) maintain records regarding the investment of the gross proceeds of the Bonds as may be required to calculate the amount earned on the investment of the gross proceeds of the Bonds sepa- rately from records of amounts on deposit in the funds and accounts of the Authority allocable to other bond issues of the Authority or moneys which do not represent gross proceeds of any bonds of the Authority, (ii) calculate at such times as are required by applicable Regulations, the amount earned from the investment of the gross proceeds of the Bonds which is required to be rebated to the federal government, and(iii)pay,not less often than every fifth anniversary date of the delivery of the Bonds or on such other dates as may be permitted under applicable Regulations, all amounts required to be rebated to the federal government. Further,the Authority will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the gross proceeds of the Bonds that might result in a reduction in the amount required to be paid to the federal government because such arrangement results in a smaller profit or a larger loss than would have resulted if the arrangement had been at arm's length and had the yield on the issue not been relevant to either party. (g) Information Reporting. The Authority covenants and agrees to file or cause to be filed with the Secretary of the Treasury, not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Bonds are issued, an information statement concerning the Bonds, all under and in accordance with section 149(e) of the Code and the applicable Regulations promulgated thereunder. (h) Continuing Obligation. Notwithstanding any other provision of this Resolution,the Authority's obligations under the covenants and provisions of this Section shall survive the defeasance and discharge of the Bonds. Section 7.3: Qualified Tax-Exempt Obligations. The Authority hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of section 265(b) of the Code. In connection therewith, the Authority represents (a) that the aggregate amount of tax-exempt obligations issued by the Authority during calendar year 1999,including the Bonds,which have been designated as "qualified tax-exempt obligations" under section 265(b)(3) of the Code does not exceed$10,000,000,and(b)that the reasonably anticipated amount of tax-exempt obligations which will be issued by the Authority during calendar year 1999, including the Bonds, will not exceed $10,000,000. For purposes of this Section, the term "tax-exempt obligation" does not include • "private activity bonds" within the meaning of section 141 of the Code, other than "qualified 501(c)(3)bonds" within the meaning of section 145 of the Code. In addition, for purposes of this -19- Section, the Authority includes all governmental units which are aggregated with the Authority • under the Code. Section 7.4. Use of Proceeds. Proceeds from the sale of the Bonds shall,promptly upon receipt by the Authority, be applied as follows: (a) Accrued interest shall be deposited into the Debt Service Fund. (b) The remaining proceeds from the sale of the Bonds shall be deposited into the Project Fund. Section 7.5. Official Statement. The Authority ratifies and confirms its prior approval of the form and content of the Preliminary Official Statement prepared in the initial offering and sale of the Bonds and hereby authorizes the preparation of a final Official Statement reflecting the terms of the Underwriter's bid and other relevant information. The use of such Official Statement in the reoffering of the Bonds by the Underwriter is hereby approved and authorized. The proper officials of the Authority are hereby authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed therein, dated as of the date of payment for and delivery of the Bonds. Section 7.6. Continuing Disclosure Undertaking. (a) Annual Reports. The Authority shall provide annually to each NRMSIR and the SID,within six months after the end of each fiscal year, financial information and operating data with respect to the Authority of the general type included in the Official Statement for the Bonds under Tables 1 and 2 and in Appendix A. The information to be provided will include audited financial statements,if the Authority commissions an audit and it is completed by the required time. If audited financial statements are not available by the required time, the Authority will provide unaudited financial statements at the required time and audited financial statements when and if they become available. Any financial statements so to be provided shall be prepared in accordance with the accounting principles described in Appendix A to the Official Statement,or such other accounting principles as the Authority may be required to employ from time to time pursuant to State law or regulation. If the Authority changes its fiscal year,it will notify each NRMSIR and the SID of the change (and of the date of the new fiscal year end)prior to the next date by which the Authority otherwise would be required to provide financial information and operating data pursuant to this Section. The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB)that theretofore has been provided to each NRMSIR and the SID or filed with the SEC. (b) Material Event Notices. The Authority shall notify the 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: • A.B. Principal and interest payment delinquencies; Non-payment related defaults; -20- „, r C. Unscheduled draws on debt service reserves reflecting financial • difficulties; D. Unscheduled draws on credit enhancements reflecting financial difficulties; E. Substitution of credit or liquidity providers, or their failure to perform; F. Adverse tax opinions or events affecting the tax-exempt status of the Bonds; G. Modifications to rights of holders of the Bonds; H. Bond calls; I. Defeasances; J. Release, substitution, or sale of property securing repayment of the Bonds; and K. Rating changes. The Authority shall notify the SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the Authority to provide financial information or operating data in accordance with Section 7.6(a) of this Resolution by the time required by such Section. (c) Limitations, Disclaimers, and Amendments. The Authority shall be obligated to observe and perform the covenants specified in this Section for so long as,but only for so long as, the Authority remains an "obligated person” with respect to the Bonds within the meaning of the Rule,except that the Authority in any event will give notice of any deposit made in accordance with Texas law that causes Bonds no longer to be outstanding. The provisions of this Section are for the sole benefit of the holders and beneficial owners of the Bonds,and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right,remedy,or claim hereunder to any other person. The Authority 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 Authority'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 City 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. UNDER NO CIRCUMSTANCES SHALL THE AUTHORITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT,FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE AUTHORITY, 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. • -21- V No default by the Authority in observing or performing its obligations under this Section • shall comprise a breach of or default under this Resolution for purposes of any other provision of this Resolution. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the Authority under federal and state securities laws. The provisions of this Section may be amended by the Authority from time to time to adopt to changed circumstances that arise from a change in legal requirements, change in law, or change in the identity,nature,status or type of operations of the Authority,but only if(1)the agreement,as amended,would have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (2) either(a) the holders of a majority in aggregate principal amount of the outstanding Bonds consent to such amendment, or (b) a person unaffiliated with the Authority (such as nationally recognized bond counsel),determines that the amendment will not materially impair the interests of the holders and beneficial owners of the Bonds. If any such amendment is made, the Authority will include in its next annual update an explanation in narrative form of the reasons for the change and its impact on the type of operating data or financial information being provided. ARTICLE VIII MISCELLANEOUS Section 8.1. Further Proceedings. The President,the Secretary,the General Manager, and other appropriate officials and agents of the Authority are hereby authorized and directed to do any and all things necessary and/or convenient to carry out the terms of this Resolution. Section 8.2. Severability. If any Section,paragraph,clause or provision of this Resolution shall for any reason be held to be invalid or unenforceable,the invalidity or unenforceability of such Section, paragraph, clause or provision shall not affect any of the remaining provisions of this Resolution. Section 8.3. Open Meeting. It is hereby officially found and determined that the meeting at which this Resolution was adopted was open to the public,and that public notice of the time,place and purpose of said meeting was given, all as required by the Texas Open Meetings Act. Section 8.4. Paying Agent/Registrar Agreement. The form of agreement setting forth the duties of the Registrar is hereby approved, and an appropriate official of the Authority is hereby authorized to execute such agreement for and on behalf of the Authority. • -22- • Section 8.5. No Personal Liability. No recourse shall be had for payment of the principal • of or interest on any Bonds or for any claim based thereon,or on this Resolution,against any official or employee of the Authority or any person executing any Bonds. Section 8.6. Effective Date. This Resolution shall become effective immediately upon passage by the Board of Directors and approval by the City. • -23- J PASSED AND APPROVED this 10th day of November, 1999. • President, Board of Directors Baytown Area Water Authority ATTEST: 7),C0 Secretary, Board of D ectors Baytown Area Water Authority (SEAL) -24-