AWARD CERTIFICATE OF DEPARTMENT REPRESENTATIVE

Transcription

1 AWARD CERTIFICATE OF DEPARTMENT REPRESENTATIVE THE STATE OF TEXAS TEXAS TRANSPORTATION COMMISSION I, the undersigned, Innovative Financing/Debt Management Officer of the Texas Department of Transportation on behalf of the Texas Transportation Commission (the "Commission"), acting as the Department Representative pursuant to the authority granted to me by the Amended and Restated Sixth Supplemental Resolution to the Master Resolution Establishing a Financing Program for Bonds, other Public Securities and Credit Agreements Secured by and Payable from Revenue Deposited to the Credit of the State Highway Fund (the "Sixth Supplement") and Minute Order No of the Commission adopted on January 30, 2014 (the "Authorizing Minute Order"), approving the Sixth Supplement, hereby certify as follows: 1. This certificate is executed for and on behalf of the Commission and for the benefit of the Attorney General of the State of Texas and the initial purchasers of the "Texas Transportation Commission State Highway Fund First Tier Revenue and Refunding Bonds, Series 2014-A" (the "Series 2014-A Bonds"). 2. This certificate is the Award Certificate of the Department Representative as required by Section 302(b) of the Sixth Supplement. 3. The Series 2014-A Bonds are being issued concurrently with the Commission's "State Highway Fund First Tier Revenue Bonds, Series 2014-B (SIFMA Index Floating Rate Bonds)" (the "Series 2014-B Bonds" and, together with the Series 2014-A Bonds, the "Bonds"). The Series 2014-A Bonds and the Series 2014-B Bonds are the first and second series of Bonds issued pursuant to the Sixth Supplement. 4. The Series 2014-A Bonds are issued as (i) combination New Money Bonds in the aggregate principal amount of $358,625,000 pursuant to subsection 301(a) of the Sixth Supplement and Refunding Bonds in the aggregate principal amount of $799,170,000 pursuant to subsection 301(b) of the Sixth Supplement, (ii) Fixed Rate Bonds and (iii) Tax-Exempt Bonds. 5. The terms used herein have the same meanings as those used and defined in the Sixth Supplement and the Purchase Contract dated March 7, 2014 (the "Purchase Contract"), between the Commission and Piper Jaffray & Co., on behalf of itself and the Underwriters listed in Schedule I thereto (collectively, the "Underwriters"), executed with respect to the sale of the Bonds. Pursuant to Section 302(c) of the Sixth Supplement, I have determined that it is in the best interest of the Commission to sell the Series 2014-A Bonds by negotiated sale and the Underwriters have been selected to assure that the Series 2014-A Bonds are sold on the terms most advantageous for the Financing Program. HOU:

2 6. The Sixth Supplement is substantially in the form and substance submitted to the Commission at the meeting at which the Authorizing Minute Order was adopted, with such changes as I have approved as of the date hereof, as evidenced by my execution of this A ward Certificate. 7. The purchase price for the Series 2014-A Bonds is $1,346,899, (representing the original aggregate principal amount of the Series 2014-A Bonds of $1,157,795, plus an original issue premium of $193,586, and less an underwriting discount of $4,482,264.79); and, as required by Section 302(b) of the Sixth Supplement, I have determined that (i) the price to be paid by the Underwriters for the Series 2014-A Bonds is not less than 90% of the aggregate original principal amount thereof; (ii) none of the Series 2014-A Bonds bear interest at a rate greater than 15% per annum; (iii) no Series A Bond has a final Maturity Date later than 20 years from the date of issuance therefor; and ( 4) the Refunding Bonds produce debt service savings in the amount required by Section 301(b) ofthe Sixth Supplement, as shown by the calculations attached as Exhibit C hereto. The original issue premium received from the sale of the portion of the Series 2014-A Bonds issued as New Money Bonds (in the amount of $43,906,222.10) shall be allocated to the payment of $1,511, of underwriter's discount and $501, of costs of issuance. Following the application of such original issue premium for such purposes, the remaining original issue premium received from the sale ofthe portion ofthe Series 2014-A Bonds issued as New Money Bonds (in the amount of $41,893,339.80) shall be deposited in the Bond Proceeds Fund and used for purposes described by Section 301(a) of the Sixth Supplement. The original issue premium received from the sale of the portion of the Series 2014-A Bonds issued as Refunding Bonds (in the amount of $149,680,113.95) shall be allocated to the payment of $2,970, of underwriter's discount and $466, of costs of issuance. Following application of such original issue premium for such purposes, the remaining original issue premium received from the sale of the portion of the Series 2014-A Bonds issued as Refunding Bonds (in the amount of $146,243,665.01) shall be deposited in the Escrow Fund established pursuant to the Escrow Agreement and used for purposes described by Section 301(b) ofthe Sixth Supplement. Any surplus proceeds from the sale of the Series 2014-A Bonds not expended for authorized purposes shall be deposited in a separate subaccount in the First Tier Senior Obligation Debt Service Fund, which has been established as an account within the State Highway Fund, and used to pay debt service on the Series ABonds. 8. The Initial Series 2014-A Bonds shall be registered in the name of Piper Jaffray & Co. HOU:

3 9. The Series 2014-A Bonds shall be titled as set forth in the first paragraph hereof and shall reflect the terms set forth in Exhibit A hereto, including the provisions relating to redemption, and shall otherwise be as set forth in the Form of Bond provided in the Sixth Supplement, as amended to include the terms set forth in Exhibit B attached hereto. 10. The Series 2014-A Bonds shall (i) be dated, (ii) be sold to the Underwriters pursuant to the Purchase Contract at the Purchase Price specified therein, (iii) be in the aggregate original principal amount, (iv) mature in the years and in the principal amounts, (v) bear interest at the rates for each such maturity (with such interest being payable on the dates), (vi) be subject to redemption on the dates, at the prices and subject to the terms, and (vii) have the other terms and provisions as provided in the Sixth Supplement, the Purchase Contract, the Official Statement and this Award Certificate (including Exhibits A and B hereto). 11. The Refunded Obligations consist of the Refundable Senior Obligations identified in the schedule attached hereto as Exhibit C. As shown in the schedule attached hereto as Exhibit C, the refunding of the Refunded Obligations produces (i) positive gross debt service savings, net of any Commission contribution to the refunding, and (ii) present value debt service savings of % of the principal amount of the Refunded Obligations, which is not less than three percent (3%) of the principal amount ofthe Refunded Obligations. 12. U.S. Bank National Association, Houston, Texas, is hereby selected as (i) the initial Paying/ Agent Registrar and (ii) Escrow Agent for the Refunded Obligations. 13. The Official Statement relating to the Series 2014-A Bonds is hereby approved and said Official Statement is hereby deemed final in compliance with the Rule. 14. Pursuant to Section 708 of the Sixth Supplement, the Commission will provide certain updated financial information and operating data to the MSRB. Such information and data will be provided to the extent, at the times, subject to the exceptions noted, and as provided under the caption "CONTINUING DISCLOSURE OF INFORMATION- Continuing Disclosure Undertaking of the Commission -Annual Reports" in the Official Statement. [The Remainder of this Page is Intentionally Left Blank.] HOU:

4 EXECUTED this March 7, Benj i Asher Innovative Financing/Debt Management Officer Texas Department oftransportation HOU: [SIGNATURE PAGE TO AWARD CERTIFICATE- SERIES 2014-A] S-1

5 EXHIBIT A TERMS OF THE SERIES 2014-A BONDS Principal Amount: The aggregate principal amount ofthe Series 2014-A Bonds shall be $1,157,795,000. Dated Date: April 2, 2014 Authorized Denomination: $5,000 or any integral multiple thereof Principal Payment Dates and Interest Rates: The Series 2014-A Bonds shall bear interest at the rates and mature on the dates and in the principal amounts, set forth in the following schedule: Maturity Maturity Principal Date Interest Initial Principal Date Interest Initial Amount (Aprill) Rate Yield Amount CAprill) Rate Yield $60,590, % 0.470% $109,070, % 2.640% 17,080, % 0.470% 58,785, % 2.780%a 81,400, % 0.810% *** *** *** *** 85,465, % 1.130% 20,460, % 3.370%a 89,730, % 1.580% *** *** *** *** 94,230, % 1.970% 164,960, % 3.520%a 98,935, % 2.280% 173,205, % 3.570% a 103,885, % 2.500% Interest Payment Dates: Interest on the Series 2014-A Bonds shall accrue from the date of their delivery to the initial purchasers thereof (which shall be the Issue Date therefor) calculated on the basis of a 360-day year composed of twelve months of 30 days each and shall be payable on April 1 and October 1 of each year, commencing October 1, 2014, until maturity or prior redemption. Record Date: The Record Date for the Series 2014-A Bonds shall be the fifteenth (15th) day of each calendar month next preceding an Interest Payment Date. If any such Record Date is not a Business Day, then the Record Date shall be the Business Day next preceding such date. Numbering: The Series 2014-A Bonds shall be numbered from R-I upwards (except for the Initial Series 2014-A Bond, which shall be numbered T-1). Optional Redemption: The Series 2014-A Bonds maturing on and after April I, 2025 are subject to redemption on April 1, 2024, or any day thereafter, in whole or in part, at the option of the Commission, in such manner as the Commission may select, at a redemption price of par plus accrued interest to the date fixed for redemption. a Priced to the first call date of Aprill, HOU: A-I

6 EXHIBITB FORM OF SERIES 2014-A BONDS [FORM OF BOND] UNITED STATES OF AMERICA TEXAS TRANSPORTATION COMMISSION STATE HIGHWAY FUND FIRST TIER REVENUE AND REFUNDING BONDS, SERIES 2014-A No.R- $ BOND DATE: April2, 2014 INTEREST RATE: MATURITY DATE: ISSUE DATE: April2, 2014 CUSIP: REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS The Texas Transportation Commission (the "Commission"), being the governing body of the Texas Department of Transportation (the "Department"), an agency of the State of Texas, hereby promises to pay, solely from the sources hereinafter identified and as hereinafter stated, to the Registered Owner named above, or the registered assigns thereof, the Principal Amount specified above on the Maturity Date specified above and to pay interest on the unpaid prindpal amount hereof from the Issue Date at the per annum rate of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest being payable on Aprill and October 1 of each year, commencing October 1, Principal of this Bond shall be payable to the Registered Owner hereof, upon presentation and surrender, at the designated office of U.S. Bank National Association (the "Paying Agent/Registrar"), or its successor. Interest shall be payable to the Registered Owner of this Bond whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close of business on the "Record Date," which is the 15th day of the month next preceding each interest payment date. All payments of principal of, premium, if any, and interest on this Bond shall be payable in lawful money of the United States of America, without exchange or collection charges, and interest payments shall be made by the Paying Agent/Registrar by check sent on or before the appropriate date of payment, by United States mail, first-class postage prepaid, to the Registered Owner hereof at the address appearing in the Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Registered Owner hereof. This Bond is one of a duly authorized issue of bonds designated as "Texas Transportation Commission State Highway Fund First Tier Revenue and Refunding Bonds, Series 2014-A" (the "Bonds"), in the aggregate principal amount of$1,157,795,000 issued pursuant to a resolution of HOU: B-1

7 the Commission adopted by minute order on January 30, 2014, and entitled Amended and Restated Sixth Supplemental Resolution to the Master Resolution Establishing a Financing Program for Bonds, other Public Securities and Credit Agreements Secured by and Payable from Revenue Deposited to the Credit of the State Highway Fund (the "Sixth Supplemental Resolution") for the purpose of (i) financing state highway improvement projects, (ii) refunding certain outstanding Senior Obligations, and (iii) paying the costs and expenses of issuance of the Bonds. The Resolution was approved and the Bonds are issued under the authority of Article III, Section 49-n of the Texas Constitution, relating to the issuance of bonds and other public securities payable from revenue deposited to the credit of the State Highway Fund, and Section , Texas Transportation Code, as amended, Chapters 1207 and 1371, Texas Government Code, as amended, and all other applicable law. As provided in the Sixth Supplemental Resolution, scheduled payments of principal of, premium, if any, and interest on this Bond are payable from and secured by a pledge of the Pledged Revenues under the Second Amended and Restated Master Resolution adopted by minute order of the Commission on April 23, 2010, as amended (the "Master Resolution"), on a parity with all other First Tier Senior Obligations (as defined in the Master Resolution). The Master Resolution, as supplemented by the Sixth Supplemental Resolution, is referred to in this Bond as the "Resolution." Terms used herein and not otherwise defined shall have the meaning given in to such term in the Resolution. Redemption Provisions The Bonds maturing on and after April 1, 2025 shall be subject to redemption on April 1, 2024 or any day thereafter, in whole or in part, at the option of the Commission, at a redemption price of par plus accrued interest to the date fixed for redemption. If less than all of the Bonds are to be redeemed, the Commission may select the maturities of the Bonds to be redeemed. If less than all of the Bonds of any maturity are to be redeemed, the Paying Agent/Registrar shall determine by lot or such other random method the Bonds, or potions thereof within such maturity to be redeemed. During any period in which ownership of the Bonds is determined by a book-entry at a securities depository, 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 Commission and the securities depository. The Commission shall give written notice of redemption or defeasance of any Bonds or portions thereof prior to maturity to the Paying Agent/Registrar at least thirty-five (35) days prior to a redemption date in the case of a redemption (unless a lesser period is acceptable the Paying Agent/Registrar) and on the defeasance date in the case of a defeasance and the Paying Agent/Registrar shall give notice of redemption of Bonds or portions thereof by mail, first-class postage prepaid at least thirty (30) days but no more than ninety (90) days prior to a redemption date (unless waived by the Owner of the Bonds to be reconciled) and within thirty (30) days after a defeasance date to each Owner and to each registered securities depository. If this Bond is in a denomination in excess of$5,000, portions of the principal sum hereof in principal amount of $5,000 or any integral multiple thereof may be redeemed, and, if less than HOU : B-2

8 all of the principal sum hereof is to be redeemed, there shall be issued, without charge therefor, to the Registered Owner hereof, upon the surrender of this Bond at the principal office of the Paying Agent/Registrar, a new Bond or Bonds of like maturity, series and interest rate in any authorized denominations provided by the Resolution for the then unredeemed balance of the principal amount hereof. If this Bond is selected for redemption, in whole or in part, neither the Commission nor the Paying Agent/Registrar shall be required to transfer this Bond to an assignee of the Registered Owner within forty-five (45) days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to any exchange by the Registered Owner of the unredeemed balance hereof in the event of its redemption in part. THE BONDS ARE LIMITED OBLIGATIONS OF THE COMMISSION, payable from and secured by a lien on, pledge of and security interest in the Pledged Revenues on an equal and ratable basis with the previously issued Outstanding First Tier Senior Obligations and any additional First Tier Senior Obligations issued in the future in accordance with the provisions of the Resolution. The Bonds do not constitute a legal or equitable pledge, charge, lien, or encumbrance upon any property of the Department, except with respect to the Pledged Revenues. NEITHER THE STATE OF TEXAS, THE COMMISSION, THE DEPARTMENT, NOR ANY OTHER AGENCY OR POLITICAL SUBDIVISION OF THE STATE OF TEXAS IS OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS EXCEPT FROM THE PLEDGED REVENUES AND CERTAIN FUNDS CREATED UNDER THE RESOLUTION. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF TEXAS OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS. THE COMMISSION AND THE DEPARTMENT HAVE NO TAXING POWER. NO RECOURSE UNDER THIS BOND SHALL BE HAD AGAINST ANY PAST, PRESENT OR FUTURE OFFICER OF THE COMMISSION OR THE DEPARTMENT. THE BONDS SHALL NEVER BE PAID IN WHOLE OR IN PART OUT OF ANY FUNDS RAISED OR TO BE RAISED BY TAXATION OR OUT OF ANY OTHER REVENUES OF THE COMMISSION, THE DEPARTMENT OR THE STATE EXCEPT THE PLEDGED REVENUES IDENTIFIED IN THE RESOLUTION. The pledge of revenues and funds and the other obligations of the Commission under the Resolution may be discharged at or prior to the maturity of the Bonds upon the making of provision for their payment on the terms and conditions set forth in the Resolution. Subject to satisfying the terms and conditions stated in the Resolution, the Commission has reserved the right to issue additional First Tier Senior Obligations payable solely from and equally and ratably secured by a parity lien on and pledge of the Pledged Revenues and other moneys and securities pledged under the Resolution to the payment of the Bonds. Reference is hereby made to the Resolution, a copy of which is on file in the designated office of the Paying Agent/Registrar, and to all of the provisions of which any Registered Owner of this Bond by his acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the security for the Bonds; the Pledged Revenues; the nature and extent and manner of enforcement of the pledge; the terms and conditions for the issuance of HOU: B-3

9 additional First Tier Senior Obligations; the conditions upon which the Resolution may be amended or supplemented with or without the consent of the Registered Owners of the Bonds; the rights and remedies of the Registered Owner hereof with respect hereto and thereto; the rights, duties and obligations of the Commission; the terms and provisions upon which the liens, pledges, charges, and covenants made therein may be discharged at or prior to the maturity or redemption of this Bond and this Bond thereafter no longer to be secured by the Resolution or be deemed to be outstanding thereunder; and for the other terms and provisions thereof. This Bond, subject to certain limitations contained in the Resolution, may be transferred only upon its presentation and surrender at the designated office of the Paying Agent/Registrar named below, or its successor with the Assignment hereon duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying Agent/Registrar duly executed by, the Registered Owner hereof, or his duly authorized agent, and such transfer is noted on the Security Register by the Paying Agent/Registrar. When a transfer occurs, one or more new fullyregistered Bonds of the same Maturity, of authorized denominations, bearing the same rate of interest, and of the same aggregate principal amount will be issued to the designated transferee or transferees. The Commission and the Paying Agent/Registrar, and any agent of either, shall treat the Registered Owner whose name appears on the Security Register (i). on the Record Date as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Bond as the owner entitled to payment of principal amount hereof at its Maturity or its redemption, in whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the Commission nor the Paying Agent/Registrar, nor any agent of either, shall be affected by notice to the contrary. In the event of nonpayment of interest on a scheduled payment date and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the Commission. 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 Security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented, and declared that the Department is a duly organized and legally existing agency of the State, organized under and by virtue of the Constitution and laws of the State of Texas; that the issuance of this Bond and the series of which it is a part are duly authorized by law; that all acts, conditions, and things required to exist and be done precedent to and in the issuance of this Bond to render the same lawful and valid have been properly done, have happened, and have been performed in regular and due time, form, and manner as required by the Constitution and laws of the State of Texas and the Resolution; that this series of bonds does not exceed any Constitutional or statutory limitation; and that due provision has been made for the payment of this Bond and the series of which it is a part as aforestated. In case any provision in this Bond shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. The terms and provisions of this Bond and the Resolution shall be construed in accordance with and shall be governed by the laws of the State of Texas. HOU:3402ll2.6 B-4

10 IN TESTIMONY WHEREOF, the Department has caused its seal to be impressed or a facsimile thereof to be printed hereon and this Bond to be executed in the name of and on behalf of the Commission with the manual or facsimile signatures of its Chair or a Commission Member, and attested by the Interim Executive Director of the Department. TEXAS TRANSPORTATION COMMISSION ATTEST: By: Chair [Commission Member] Interim Executive Director (SEAL) [INSERTIONS FOR THE INITIAL BOND] The Initial Bond shall be in the form set forth in this exhibit, except that: A. 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 the headings "ISSUE DATE" and "CUSIP NO." shall be deleted. B. The first paragraph of the Bond shall be deleted and the following will be inserted (with all blanks and bracketed items to be completed with information contained in the Award Certificate): "The Texas Transportation Commission (the "Commission"), being the governing body of the Texas Department of Transportation (the "Department"), an agency of the State of Texas, hereby promises to pay, solely from the sources hereinafter identified and as hereinafter stated, to the Registered Owner named above, or the registered assigns thereof, on April 1 in each of the years, in the principal installments and bearing interest at the per annum rates set forth in the following schedule: Principal Amount Maturity Date Interest Rate (Information from Award Certificate to be inserted) The Commission promises to pay interest on the unpaid principal amount hereof from the Issue Date specified above at the respective per annum rate of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest being payable on April 1 and October 1 commencing October 1, Principal of this Bond shall be payable to the Registered Owner hereof, upon presentation and surrender, at the principal office of the Paying Agent/Registrar named in the registration certificate appearing hereon, or its successor. Interest HOU: B-5

11 shall be payable to the Registered Owner of this Bond whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close of business on the "Record Date," which is the 15th day of the month next preceding each interest payment date. All payments of principal of, premium, if any, and interest on this Bond shall be payable in lawful money of the United States of America, without exchange or collection charges, and interest payments shall be made by the Paying Agent/Registrar by check sent on or before the appropriate date of payment, by United States mail, first-class postage prepaid, to the Registered Owner hereof at the address appearing in the Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Registered Owner hereof." C. The Initial Bond shall be numbered "T -1 ". ****** HOU: B-6

12 Form of Registration Certificate of Comptroller of Public Accounts to Appear on Initial Bond only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS THE STATE OF TEXAS 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 duly registered by the Comptroller of Public Accounts of the State of Texas. WITNESS my signature and seal of office this (SEAL) Comptroller of Public Accounts ofthe State oftexas Form of Paying Agent/Registrar's Authentication Certificate to Appear on Definitive Bonds. AUTHENTICATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Bond has been duly issued and registered under the provisions of the withinmentioned Resolution; the bond or bonds of the above titled and designated series originally delivered having been approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts, as shown by the records of the Paying Agent/Registrar. Registered this date: U.S. BANK NATIONAL ASSOCIATION, as Paying Agent/Registrar By: Authorized Signature HOU: B-7

13 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 transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. DATED: Signature guaranteed by: NOTICE: The signature on this assignment must correspond with the name of the Registered Owner as it appears on the face of the within Bond in every particular. **** [INSURANCE LEGEND, IF APPLICABLE] HOU: B-8

14 EXHIBITC SCHEDULE OF REFUNDED OBLIGATIONS AND DEBT SERVICE SAVINGS HOU: C-1

15 Present Value Prior Refunding to 04/02/2014 Date Debt Service Debt Service % 09/01/ ,962, ,696, ,265, ,214, /01/ ,962, ,807, , 155, ,038, /01/ ,602, ,477, , 125, ,946, /01/ ,600, ,475, , 125, ,882, /01/ ,599, ,470, ,129, ,825, /01/ ,589, ,461, ,127, ,763, /01/ ,601, ,475, ,125, ,703, /01/ ,597, ,468, ,128, ,648, /01/ ,598, ,472, ,126, ,590, /01/ ,591, ,462, ,128, ,536, /01/ ,184, ,724, ,460, ,746, /01/ ,864, ,864, ,997, '182,752, ,080,990, '762, ,894, Savings Summary PV of savings from cash flow $82,894, Net PV Savings (dollar amount) $82,894, Net PV Savings (percentage of refunded obligations) % HOU : C-2

16 SUMMARY OF BONDS REFUNDED Texas Transportation Commission (State Highway Fund) First Tier Revenue and Refunding Bonds, Series 2014AB --VERBAL AWARD-- --VERIFIED FINAL NUMBERS: 2:30 PM-- Maturity Interest Par Call Bond Date Rate Amount Date State Highway Fund First Tier Rev Bds Ser 2006, 2006: SERIAL 04/01/ % 29,385, /01/ /01/ % 30,855, /01/ /01/ % 32,395, /01/ /01/ % 34,015, /01/ /01/ % 35,715, /01/ /01/ % 37,500, /01/ /01/ % 39,380, /01/ /01/ % 41,345, /01/ /01/ % 43,415, /01/ /01/ % 45,585, /01/ ,590, State Highway Fund First Tier Rev Bds Ser 2006A, 2006A: SERIAL 04/01/ % 48,255, /01/ /01/ % 50,665, /01/ /01/ % 53,200, /01/ /01/ % 55,850, /01/ /01/ % 58,655, /01/ /01/ % 61,585, /01/ /01/ % 64,660, /01/ /01/ % 67,890, /01/ /01/ % 15,370, /01/ /01/ % 19,335, /01/ ,465, Call Price 865,055, HOU: C-3

17 AWARD CERTIFICATE OF DEPARTMENT REPRESENTATIVE THE STATE OF TEXAS TEXAS TRANSPORTATION COMMISSION I, the undersigned, Innovative Financing/Debt Management Officer of the Texas Department of Transportation on behalf of the Texas Transportation Commission (the "Commission"), acting as the Department Representative pursuant to the authority granted to me by the Amended and Restated Sixth Supplemental Resolution to the Master Resolution Establishing a Financing Program for Bonds, other Public Securities and Credit Agreements Secured by and Payable from Revenue Deposited to the Credit of the State Highway Fund (the "Sixth Supplement") and Minute Order No of the Commission adopted on January 30, 2014 (the "Authorizing Minute Order"), approving the Sixth Supplement, hereby certify as follows: 1. This certificate is executed for and on behalf of the Commission and for the benefit of the Attorney General of the State of Texas and the initial purchasers of the "Texas Transportation Commission State Highway Fund First Tier Revenue Bonds, Series 2014-B (SIFMA Index Floating Rate Bonds)" (the "Series 2014-B Bonds"). 2. This certificate is the Award Certificate of the Department Representative as required by Section 302(b) ofthe Sixth Supplement. 3. The Series 2014-B Bonds are being issued concurrently with the Commission's "State Highway Fund First Tier Revenue and Refunding Bonds, Series 2014-A" (the "Series 2014-A Bonds" and, together with the Series 2014-B Bonds, the "Bonds"). The Series 2014-A Bonds and the Series 2014-B Bonds are the first and second series of Bonds issued pursuant to the Sixth Supplement. 4. The Series 2014-B Bonds are issued as (i) New Money Bonds in the aggregate principal amount of $300,000,000 pursuant to subsection 301(a) of the Sixth Supplement, (ii) Index Floating Rate Bonds (subject to conversion to different Modes) and (ii) Tax-Exempt Bonds. 5. The terms used herein have the same meanings as those used and defined in the Sixth Supplement and the Purchase Contract dated March 7, 2014 (the "Purchase Contract"), between the Commission and Piper Jaffray & Co., on behalf of itself and the Underwriters listed in Schedule I thereto (collectively, the "Underwriters"), executed with respect to the sale of the Bonds. Pursuant to Section 302( c) of the Sixth Supplement, I have determined that it is in the best interest of the Commission to sell the Series 2014-B Bonds by negotiated sale and the Underwriters have been selected to assure that the Series 2014-B Bonds are sold on the terms most advantageous for the Financing Program.

18 6. The Sixth Supplement is substantially in the form and substance submitted to the Commission at the meeting at which the Authorizing Minute Order was adopted, with such changes as I have approved as of the date hereof, as evidenced by my execution of this Award Certificate. 7. The purchase price for the Series 2014-B Bonds is $299,485, (representing the original aggregate principal amount of the Series 2014-B Bonds of $300,000, less an underwriting discount of $514, ); and, as required by Section 302(b) of the Sixth Supplement, I have determined that (i) the price to be paid by the Underwriters for the Series 2014-B Bonds is not less than 90% of the aggregate original principal amount thereof; (ii) none of the Series 2014-B Bonds bear interest at a rate greater than 15% per annum; and (iii) no Series A Bond has a final Maturity Date later than 20 years from the date of issuance therefor. Any surplus proceeds from the sale of the Series 2014-B Bonds not expended for authorized purposes shall be deposited in a separate subaccount in the First Tier Senior Obligation Debt Service Fund, which has been established as an account within the State Highway Fund, and used to pay debt service on the Series 2014-B Bonds. 8. The Initial Series 2014-B Bonds shall be registered in the name of Piper Jaffray & Co. 9. The Series 2014-B Bonds shall be titled as set forth in the first paragraph hereof and shall reflect the terms set forth in Exhibit A hereto, including the provisions relating to redemption and mandatory tender, and shall otherwise be as set forth in the Form of Series 2014-B Bond provided in the Sixth Supplement, as amended to include the terms set forth herein in Exhibit B attached hereto. 10. The Series 2014-B Bonds shall (i) be dated, (ii) be sold to the Underwriters pursuant to the Purchase Contract at the Purchase Price specified therein, (iii) be in the aggregate original principal amount, (iv) mature in the year and in the principal amount, (v) bear interest at the rate (with such interest being payable on the dates), (vi) be subject to redemption and mandatory tender on the dates, at the prices and subject to the terms, and (vii) have the other terms and provisions as provided in the Sixth Supplement, the Purchase Contract, the Official Statement and this Award Certificate (including Exhibit A hereto). 11. U.S. Bank National Association, Houston, Texas, is hereby selected as (i) the initial Paying/Agent Registrar, (ii) the initial Calculation Agent and (iii) the initial Tender Agent. 12. Piper Jaffray & Co. is hereby selected as the initial Remarketing Agent. 13. The Official Statement relating to the Series 2014-B Bonds is hereby approved and said Official Statement is hereby deemed final in compliance with the Rule. 2

19 14. Pursuant to Section 708 of the Sixth Supplement, the Commission will provide certain updated financial information and operating data to the MSRB. Such information and data will be provided to the extent, at the times, subject to the exceptions noted, and as provided under the caption "CONTINUING DISCLOSURE OF INFORMATION- Continuing Disclosure Undertaking ofthe Commission -Annual Reports" in the Official Statement. 3

20 EXECUTED this March 7, Benja i ~sher Innovative Financing/Debt Management Officer Texas Department oftransportation [SIGNATURE PAGE TO AWARD CERTIFICATE- SERIES 2014-B] S-1 HOU:

21 EXHIBIT A TERMS OF THE SERIES 2014-B BONDS Principal Amount: The aggregate principal amount of the Series 2014-B Bonds shall be $300,000,000. Dated Date: April 2, 2014 Maturity Date: April 1, 2032 Initial Mode: Index Floating Rate Mode Index: SIFMA Index Initial Index Floating Rate Period. Commences on date of initial delivery of the Bonds and expires on March 31, Initial Mandatory Tender Date: April1, 2017 Applicable Spread: 0.35% Maximum Rate: 12.00% Stepped Rate: 8.00% Calculation of Interest: In calculating the Index Floating Rate during the Initial Index Floating Rate Period, the Calculation Agent shall round upward to the fifth decimal place. All dollar amounts used in or resulting from the calculation of interest on the Series 2014-B Bonds bearing interest at the Index Floating Rate will be rounded to the nearest cent (with one-half cent being rounded upward). Authorized Denomination: $5,000 or any integral multiple thereof. Interest Payment Dates: Interest on the Series 2014-B Bonds shall accrue from the date of their delivery to the initial purchasers thereof (which shall be the Issue Date therefor) calculated on the basis of a 365/366 day year for actual number of days lapsed and shall be payable (i) on the first Business Day of each month, commencing on May 1, 2014, during the Initial Index Floating Rate Period and any deemed extension of the Initial Index Floating Rate Period due to a failed remarketing, (ii) on any scheduled mandatory sinking fund redemption date, (iii) on the Initial Mandatory Tender Date and any subsequent Mandatory Tender Date established because of a failed remarketing on the Initial Mandatory Tender Date, and (iv) on any optional redemption date. Record Date: The Record Date for the Series 2014-B Bonds shall be the day immediately preceding an Interest Payment Date (whether or not a Business Day). Numbering: The Series 2014-B Bond shall be numbered R-I (except for the Initial Series 2014-B Bond, which shall be numbered TR-1). A-1

22 Optional Redemption: The Series 2014-B Bonds shall be subject to redemption, in whole or in part, at the option of the Commission, on October 1, 2016, or any date thereafter during the Initial Index Floating Rate Period, including any deemed extension of the Initial Index Floating Rate Period due to a failed remarking, at a redemption price of par, plus accrued interest thereon to the redemption date. Mandatory Sinking Fund Redemption. The Series 2014-B Bonds are subject to mandatory sinking fund redemption by the Commission prior to their scheduled maturity at a redemption price of par, plus accrued interest to the date fixed for redemption, without premium, on April 1 in the years and in the principal amounts indicated below: Year * Amount($) 137,415, ,585,000 *Stated Maturity Notice of Redemption. The Commission shall give written notice of redemption of any Series 2014-B Bonds or portions thereof prior to maturity to the Paying Agent/Registrar at least thirty-five (35) days prior to a redemption date (unless a lesser period is acceptable the Paying Agent/Registrar). At least thirty (30) days prior to the date fixed for the redemption of any Bonds or portions thereof prior to maturity at the option of the Commission, a written notice of such redemption shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, to the Registered Owner of each Bond to be redeemed at its address as it appeared in the Security Register; provided, that, in the event of a failed remarketing on the Initial Mandatory Tender Date, the Commission and the Paying Agent/Registrar shall give notice of redemption as provided under Failed Remarketing (below). Conversion. The Series 2014-B Bonds are not convertible into any other Mode prior to the Initial Mandatory Tender Date. Optional Tender. During the Initial Index Floating Rate Period, including any deemed extension of the Initial Index Floating Rate Period due to a failed remarketing on or after the Initial Mandatory Redemption Date, the Series 2014-B Bonds are not subject to tender for purchase at the option of the Registered Owners thereof. Mandatory Tender. The Series 2014-B Bonds are subject to mandatory tender for purchase on the Initial Mandatory Tender Date (including any subsequent Mandatory Tender Date established because of a failed remarketing on the Initial Mandatory Tender Date) without the right of retention, at a purchase price equal to 100% of the principal amount, plus accrued interest, if any. Notice of Mandatory Tender. Written notice of a change in Mode or commencement of a new Index Floating Rate Period within the Index Floating Rate Mode shall be given by the Commission to the Tender Agent, the Remarketing Agent, and the Rating Agencies not fewer than 15 days prior to the proposed Conversion Date. The Tender Agent shall give such notice to the Registered Owners not less than ten (1 0) days prior to a Mandatory Tender Date. In the event of a failed remarketing on the Initial Mandatory Tender Date, the Commission and the A-2

23 Tender Agent shall give notice of mandatory tender as provided herein below under Failed Remarketing. Failed Remarketing. In the event that all Series 2014-B Bonds then Outstanding on the Initial Mandatory Tender Date are not remarketed to new purchasers on the Initial Mandatory Tender Date, the Commission shall have no obligation to purchase any Series 2014-B Bond tendered on such date, the failed remarketing shall not constitute an event of default under the Resolution or the Series 2014-B Bonds, the mandatory tender will be deemed to have been rescinded for that date and all Series 2014-B Bonds (i) will continue to be Outstanding, (ii) will be purchased upon the availability of funds obtained from the subsequent remarketing of all Series 2014-B Bonds, (iii) will bear interest at the Stepped Rate from the Initial Mandatory Tender Date until all Outstanding Series 2014-B Bonds are purchased upon a subsequent remarketing, (iv) will be subject to optional redemption, in whole or in part, on any date and mandatory tender for purchase on any date during the continuation of the Index Floating Rate Period until all Outstanding Series 2014-B Bonds are purchased upon a subsequent remarketing (which shall occur at the Commission's discretion upon delivery of at least one day's notice of such redemption or requirement of mandatory tender to the holders of the Series 2014-B Bonds), and (v) will be deemed to continue in the Index Floating Rate Mode for all other purposes of the Resolution, though bearing interest during such time at the Stepped Rate until remarketed or redeemed in accordance with the terms of the Resolution. In the event of a failed remarketing on the Initial Mandatory Tender Date and during a deemed extension of the Initial Index Floating Rate Period, the Commission shall use its best efforts to cause the Series 2014-B Bonds to be remarketed on the earliest reasonably practicable date on which the Series 2014-B Bonds can be sold at par (or above par if the Series 2014-B Bonds are being remarketed at a fixed rate to maturity), in such interest rate mode or modes as the Commission directs, at a rate not exceeding the Maximum Rate. During the Initial Floating Rate Period or any deemed extension thereof because of a failed remarketing on the Initial Mandatory Tender Date, the Series 2014-B Bonds are not benefited by a liquidity facility and the Commission has no obligation to purchase the Series 2014-B Bonds except from remarketing proceeds. A-3

24 EXHIBITB FORM OF SERIES 2014-B BONDS (For Index Floating Rate Bonds) (If the Bond is supported by a Credit Facility, appropriate changes shall be made to this Form of Bond as set forth in the A ward Certificate for such Bond) THIS BOND IS SUBJECT TO MANDATORY TENDER FOR PURCHASE AT THE TIMES AND IN THE MANNER HEREINAFTER DESCRIBED AND MUST BE SO TENDERED OR WILL BE DEEMED TO HAVE BEEN SO TENDERED UNDER CERTAIN CIRCUMSTANCES AS DESCRIBED HEREIN. ANY BONDHOLDER WHO FAILS TO DELIVER A BOND FOR PURCHASE AT THE TIME AND PLACE REQUIRED HEREIN SHALL HAVE NO FURTHER RIGHTS HEREUNDER EXCEPT THE RIGHT TO RECEIVE THE PURCHASE PRICE UPON DELIVERY OF THIS BOND TO THE TENDER AGENT, AND SHALL HOLD THIS BOND AS AGENT FOR THE TENDER AGENT. B-1

25 [FORM OF SERIES 2014-B BOND] NO.R- PRINCIPAL AMOUNT $ UNITED STATES OF AMERICA STATE OF TEXAS TEXAS TRANSPORTATION COMMISSION STATE HIGHWAY FUND FIRST TIER REVENUE BONDS, SERIES 2014-B (SIFMA INDEX FLOATING RATE BONDS) Issue Date April2, 2014 Dated Date April2, 2014 Maturity Date April1, 2032 CUSIP Mode Index Floating Rate Mode Last Day of Index Floating Rate Period March 31, 2017 Interest Rate Index Floating Rate Stepped Rate 8.00% Initial Mandatory Tender Date: April1, 2017 REGISTERED OWNER: PRINCIPAL AMOUNT: Dollars ON THE MATURITY DATE specified above the Texas Transportation Commission (the "Commission"), hereby promises to pay to the registered owner specified above or to the registered assignee hereof (either being hereinafter called the "Registered Owner") the Principal Amount specified above, and to pay to the Registered Owner, interest thereon at the rate determined as herein provided from the most recent Interest Payment Date (hereinafter defined) to which interest has been paid or duly provided for, or if no interest has been paid or duly provided for, from the Issue Date. Additional provisions relating to the payment of interest on this Bond are set forth below under the heading "Interest on the Bonds." It is specifically provided, however, that the principal of, interest on, and Purchase Price of this Bond are payable solely from the sources and in the manner provided in the Master Resolution and the Sixth Supplemental Resolution (hereinafter defined). This Bond is one of a duly authorized series of bonds designated as "Texas Transportation Commission State Highway Fund First Tier Revenue Bonds, Series 2014-B (SIFMA Index Floating Rate Bonds)" (the "Bonds"), issued in the aggregate principal amount of $300,000,000 pursuant to a resolution of the Commission adopted minute order on January 30, 2014, and entitled Amended and Restated Sixth Supplemental Resolution to the Master Resolution Establishing a Financing Program for Bonds, other Public Securities and Credit Agreements Secured by and Payable from Revenue Deposited to the Credit of the State Highway Fund (the "Sixth Supplemental Resolution") for the purpose of (i) financing state highway improvement projects and (ii) paying the costs and expenses of issuance of the Bonds. The Resolution was approved and the Bonds are issued under the authority of the laws of the State of B-2

26 Texas, including Article III, Section 49-n of the Texas Constitution, relating to the issuance of bonds and other public securities payable from revenue deposited to the credit of the State Highway Fund, Section , Texas Transportation Code, as amended, Chapter 1371, Texas Government Code, and all other applicable law. As provided in the Sixth Supplemental Resolution, scheduled payments of principal of, premium, if any, and interest on this Bond are payable from and secured by a pledge of the Pledged Revenues under the Second Amended and Restated Master Resolution adopted by minute order of the Commission on April 23, 2010, as amended (the "Master Resolution"), on a parity with all other First Tier Senior Obligations (as defined in the Master Resolution). The Master Resolution, as supplemented by the Sixth Supplemental Resolution, is referred to in this Bond as the "Resolution." The following terms are defined as follows: The term "Applicable Spread" shall mean 0.35%. The term "Authorized Denominations" shall mean $5,000 or any integral multiple thereof. The term "Business Day" shall mean any day on which commercial banks located in all of the cities in which the Principal Offices of the Tender Agent and the Remarketing Agent are located are not required or authorized by law or regulation to remain closed and on which the New York Stock Exchange is not closed. The term "Calculation Agent" shall mean U.S. Bank National Association, Dallas, Texas, or such other person appointed by the Department Representative to perform the duties of Calculation Agent in connection with the Index Floating Rate Bonds. The term "Conversion" or "conversion" shall mean a change from one Mode to another with respect to a Bond, and (i) with respect to a Bond in the Multiannual Mode, a change from one Interest Rate Period to another, or (ii) with respect to a Bond in the Index Floating Rate Mode, a change from one Index Floating Rate Period to another. The term "Conversion Date" shall mean the day a Conversion becomes effective. The term "Effective Date" shall mean, with respect to a Bond in the Daily, Flexible, Weekly, Monthly, Quarterly, Semiannual, Multiannual and Index Floating Rate Mode~, the date on which a new Interest Rate Period for that Bond takes effect. The term "Electronic Notice" shall mean notice transmitted through a time-sharing terminal, by facsimile transmission, or by telephone (promptly confirmed in writing or by facsimile transmission). The term "Index," with respect to Index Floating Rate Bonds, on any date means the SIFMA Index or, if such index is not available at the time of conversion of the Bonds or portion thereof to the Index Floating Rate Mode or within the Index Floating Rate Mode to a new Index Floating Rate Period, the Index will be the alternate index identified at the time of conversion. B-3

27 The term "Index Floating Rate Held Bond" shall mean an Index Floating Rate Bond held by or for the account of its Registered Owner or Beneficial Owner after the Initial Mandatory Tender Date in a situation in which the Purchase Price of such Bond has not been paid to the Registered Owner or Beneficial Owner thereof on the Initial Mandatory Tender Date. The term "Initial Mandatory Tender Date" shall mean April1, 2017; The term "Interest Rate Period," "Rate Period," or "Period" shall mean, when used with respect to any particular rate of interest for a Bond, the period during which such rate of interest determined for such Bond will remain in effect as described herein. The term "Mandatory Tender Date" means the Initial Mandatory Tender Date and any subsequent mandatory tender date established because of a failed remarketing on the Initial Mandatory Tender Date." The term "Maximum Rate" shall mean 12%. The term "Mode" shall mean the period for and the manner in which the interest rates on the Bonds, or any portion of the Bonds, are set and includes the Daily Mode, the Flexible Mode, the Weekly Mode, the Monthly Mode, the Quarterly Mode, the Semiannual Mode, the Multiannual Mode, the Index Floating Rate Mode and the Fixed Rate Mode. The term "Principal Office of the Tender Agent" shall mean the business address specified in writing to the Commission and the Remarketing Agent as its principal office for its duties hereunder. The term "Purchase Date" shall mean the date upon which Bonds are required to be purchased pursuant to a mandatory tender, in accordance with the provisions hereof. The term "Purchase Price" shall mean the principal amount of the Bonds then outstanding on a Mandatory Tender Date plus accrued interest to the Mandatory Tender Date. THE COMMISSION IS NOT OBLIGATED TO PURCHASE BONDS TENDERED. The term "Record Date" shall mean the day immediately preceding each Interest Payment Date (whether or not a Business Day). The term "Reset Date" shall mean the day immediately succeeding the Index Determination Date or, if such day is not a Business Day, the immediately preceding Business Day. The term "SIFMA Index" shall mean, for any day, the level of the most recently effective index rate which is issued weekly and which is compiled from the weekly interest rate resets of tax-exempt variable rate issues included in a database maintained by Municipal Market Data which meet specific criteria established from time to time by the Securities Industry and Financial Markets Association and issued on each Index Determination Date. If such index is no longer published, the SIFMA Index for any day will mean the level of the most recently effective S&P Municipal Bond 7-Day High Grade Rate Index maintained by Standard & Poor's Securities Evaluations Inc. for a 7-day maturity as published on the day which is one U.S. Government Securities Business Day next succeeding the effective date of such index. The effective date for B-4

28 each such index is every Thursday (or any other day specified by the Securities Industry and Financial Markets Association, in the case ofthe first such index). The term "Stepped Rate" shall mean 8.00%. The term "Undelivered Bonds" shall mean Bonds which are deemed to have been tendered as provided herein. Terms used herein and not otherwise defined shall have the meanmgs given in the Resolution. 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, redemption price or Purchase Price of this Bond (or of a portion of this Bond, in the case of a partial redemption) shall be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or upon the date fixed for its purchase or redemption prior to maturity, at a corporate trust office of U.S. Bank National Association (the "Paying Agent/Registrar"). All payments of interest on Bonds shall be paid to the Registered Owner hereof whose name appears in the Security Register kept by the Paying Agent/Registrar as of the close of business on the applicable Record Date or Special Record Date (hereinafter defined) by check or draft mailed on the Interest Payment Date, provided that any Registered Owner of $1,000,000 or more in aggregate principal amount of the Bonds may, upon written request given to the Paying Agent/Registrar at least five (5) Business Days prior to an Interest Payment Date designating an account in a domestic bank, be paid by wire transfer of immediately available funds; provided, that if a Purchase Date is not an Interest Payment Date, interest shall be paid on the Purchase Date to the Registered Owner upon receipt by the Paying Agent/Registrar of the tendered bond. This Bond is registered as to both principal and interest in the Security Register kept by the Paying Agent/Registrar and may be transferred or exchanged, subject to the further conditions specified in the Resolution, only upon surrender hereof at the office of the Paying Agent/Registrar. Notwithstanding the foregoing, during any period in which ownership of the Bonds is determined by a book entry at a securities depository for the Bonds, payments made to the securities depository, or its nominee, shall be made in accordance with arrangements between the Commission and the securities depository. IN THE EVENT of non-payment of interest on a scheduled Interest Payment Date, and for thirty (30) days thereafter, a new Record Date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the Commission. Notice of the Special Record Date and of the scheduled payment date of the past due interest (the "Special Payment Date"), which shall be fifteen (15) days after the Special Record Date shall be sent at least five (5) business days prior to the Special Record Date by United States mail, first class, postage prepaid, to the address of each Registered Owner of a Bond appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. Interest on the Bonds The Bonds shall initially be issued in the Index Floating Rate Mode and will be subject to conversion to another Mode as herein provided. Each Bond in an Index Floating Rate Mode (other than an Index Floating Rate Held Bond) will bear interest at the Index Floating Rate; B-5

29 provided that the Index Floating Rate shall not exceed the Maximum Rate. The Index Floating Rate shall be determined by the Calculation Agent not later than the Business Day immediately succeeding each Reset Date and shall be equal to the Index on such day plus the Applicable Spread. The Index Floating Rate shall be adjusted on each Reset Date to an amount equal to the weekly reset of the Index plus the Applicable Spread; provided, (i) that if the first day of an Index Floating Rate Period is not a Reset Date, the rate for the period from and including the first day of such Index Floating Rate Period to but excluding the next succeeding Reset Date shall reflect the Index issued on the Reset Date immediately preceding the first day of such Index Floating Rate Period, or (ii) if the first day of an Index Floating Rate Period is a Reset Date, the rate for the period from the first day of such Index Floating Rate Period to but excluding the next succeeding Reset Date shall reflect the Index issued on the first day of such Index Floating Rate Period. No later than 3:00 p.m. Eastern Time on the Business Day prior to each Interest Payment Date the Calculation Agent shall determine for such Interest Payment Date the interest accrued on the Bonds from the first day of the Index Floating Rate Period or from the last Interest Payment Date, as applicable. The Index Floating Rate and the interest accrued on the Bonds, as determined by the Calculation Agent, shall (in the absence of manifest error) be final, conclusive and binding upon the Registered Owners and Beneficial Owners of the Bonds. In the event the Index is no longer published during an Index Floating Rate Period, an alternative index shall be calculated based upon the criteria for the SIFMA Index by an entity (which may be the Remarketing Agent) selected in good faith by the Remarketing Agent. The Calculation Agent may rely conclusively on the index described in the preceding sentence in determining any interest accrued on the Bonds in the Index Floating Rate Period. During the Index Floating Rate Period interest on the Bonds will be calculated on the basis of a 365 or 366 day year, as applicable, for the number of days actually elapsed and will be payable on each Interest Payment Date described in "Interest Pay~ent Dates" below. Such interest will be paid to the Registered Owners thereof as of the Record Date, except when such Interest Payment Date coincides with the Effective Date, in which case, interest will be paid to the Registered Owners as of that date upon surrender of such Bonds to the Paying Agent/Registrar. On the Initial Mandatory Tender Date, subject to certain conditions provided for in the Resolution, all of the Bonds may be converted from the Index Floating Rate Mode to one or more of the Daily Mode, the Flexible Mode, the Weekly Mode, the Monthly Mode, the Quarterly Mode, the Semiannual Mode, the Multiannual Mode, the Fixed Rate Mode, or a new Index Floating Rate Period. Written notice of a change in Mode or commencement of a new Index Floating Rate Period within the Index Floating Rate Mode shall be given by the Department Representative to the Tender Agent, the Remarketing Agent, and the Rating Agencies not fewer than fifteen (15) days prior to the proposed Conversion Date. The Tender Agent shall give such notice to the Registered Owners not fewer than ten (10) days before the Conversion Date. The notice will state: B-6

30 (1) the Mode or Modes to be converted into (or that an Index Floating Rate Mode of a different duration than the immediately preceding Index Floating Rate Mode will commence), (2) the Effective Date or dates of the new rate or a new Interest Rate Period, as applicable, and (3) that a mandatory tender will result on the Effective Date of the change as provided in the Resolution. Each determination of interest rates and Interest Rate Periods shall be conclusive and binding on the Commission, the Tender Agent, and the Registered Owners. Any Registered Owner may ascertain the rate of interest on its Bond or Bonds, by contacting the Tender Agent or the Remarketing Agent. In the event of a failed remarketing on the Initial Mandatory Tender Date, the Commission and the Tender Agent shall give notice of mandatory tender as provided herein under Effects of a Failed Remarketing. Upon conversion to a Fixed Rate, this Bond shall bear interest to the Maturity Date set forth above at a fixed rate of interest determined by the Remarketing Agent in accordance with the Resolution. Interest Payment Dates While this Bond accrues interest at an Index Floating Rate, interest is payable on (i) the first Business Day of each month, commencing on May 1, 2014, during the Initial Index Floating Rate Period and any deemed extension of the Initial Index Floating Rate Period due to a failed remarketing, (ii) any scheduled mandatory sinking fund redemption date, (iii) the Initial Mandatory Tender Date and any subsequent Mandatory Tender Date established because of a failed remarketing on the Initial Mandatory Tender Date, and (iv) any optional redemption date. Conversion The Bonds are not convertible into any other interest rate mode prior to the Initial Mandatory Tender Date. Optional Tenders During the Initial Index Floating Rate Period, including any deemed extension of the Initial Index Floating Rate Period due to a failed remarketing on the Initial Mandatory Tender Date, the Bonds are not subject to tender for purchase at the option of the Registered Owners thereof. Mandatory Tenders The Bonds are subject to mandatory tender for purchase on the Initial Mandatory Tender Date at the Purchase Price and must be tendered for purchase to the Tender Agent by the Registered Owners thereof, with no right of retention by such Registered Owners. The obligation of the Commission to purchase any Bond on the Initial Mandatory Tender Date is subject to the Conversion of the Mode or Modes or Index Floating Rate Period upon the successful remarketing of all Bonds. If on the Initial Mandatory Tender Date, moneys sufficient B-7

31 to pay the Purchase Price of all Bonds shall be on deposit with the Tender Agent, acting as tender agent, the Bonds shall be deemed to have been tendered on such date for purchase and interest on such tendered Bonds shall cease to accrue. Bonds that have been deemed tendered, but have not been delivered to the Tender Agent shall not be considered outstanding under the Resolution on the Initial Mandatory Tender Date. The Remarketing Agent will not remarket any Bonds and a Conversion will not occur if an Event of Default (as defined in the Resolution) has occurred and is continuing with respect to the Bonds. The Commission is obligated to use its best efforts to effect the remarketing of all Bonds on the Initial Mandatory Tender Date or as soon thereafter as is reasonably practical, so that the Bonds can be sold at par, at a rate not exceeding the Maximum Rate. Prior to the Initial Mandatory Tender Date, or a later Mandatory Tender Date in the event of a failed remarketing and conversion of the Bonds on the Initial Mandatory Tender Date (in either case a "Purchase Date"), the Commission will determine the interest rate mode or modes that will be applicable to the Bonds from and after the Purchase Date. The interest rate or rates to be borne by the Bonds immediately after the Purchase Date will be determined by the Remarketing Agent pursuant to the Resolution. The interest rate or rates to be determined by the Remarketing Agent may be in any Mode or Modes, and the Bonds may be subject to subsequent remarketings. If the Commission determines that the Mode or Modes to be in effect after the Purchase Date will be a Fixed Mode, the Purchase Price may exceed par for the purpose of obtaining the lowest reoffering yield to the Commission and to pay remarketing costs, but the tendering Registered Owners will only receive par plus accrued interest to the Purchase Date. In conjunction with such Conversion and remarketing, the Commission may establish amortization requirements for the Bonds that will result in the mandatory redemption of the Bonds prior to maturity. Payment of the Purchase Price of the Bonds will be made by the Tender Agent by 2:00p.m., New York City time, on the Purchase Date, in immediately available funds (or by wire transfer). The principal portion of the Purchase Price of Bonds tendered for purchase will be paid by the Tender Agent to the Registered Owners solely from the proceeds of the remarketing of the Bonds by the Remarketing Agent. PAYMENTS OF THE PURCHASE PRICE ARE NOT SECURED BY THE PLEDGED REVENUES. BY ACCEPTANCE OF THIS BOND, THE REGISTERED OWNER HEREOF AGREES THAT THIS BOND WILL BE PURCHASED, WHETHER OR NOT SURRENDERED, ON THE PURCHASE DATE AS DESCRIBED ABOVE. IN SUCH EVENT, THE REGISTERED OWNER OF THIS BOND SHALL NOT BE ENTITLED TO RECEIVE ANY FURTHER INTEREST HEREON, SHALL HAVE NO FURTHER RIGHTS UNDER THIS BOND OR THE RESOLUTION, EXCEPT TO RECEIVE PAYMENT OF THE PURCHASE PRICE HELD THEREFOR, AND SHALL THEREAFTER HOLD THIS BOND AS AGENT FOR THE TENDER AGENT. Effects of a Failed Remarketing In the event that all Bonds then Outstanding on the Initial Mandatory Tender Date are not remarketed to new purchasers on the Initial Mandatory Tender Date, the Commission shall have no obligation to purchase any Bond tendered on such date, the failed remarketing shall not constitute an event of default under the Resolution or the Bonds, the mandatory tender will be B-8

32 deemed to have been rescinded for that date and all Bonds (i) will continue to be Outstanding, (ii) will be purchased upon the availability of funds obtained from the subsequent remarketing of all Bonds, (iii) will bear interest at the Stepped Rate from the Initial Mandatory Tender Date until all Outstanding Bonds are purchased upon a subsequent remarketing, (iv) will be subject to optional redemption, in whole or in part, on any date and mandatory tender for purchase on any date during the continuation of the Index Floating Rate Period until all Outstanding Bonds are purchased upon a subsequent remarketing (which shall occur at the Commission's discretion upon delivery of at least one day's notice of such redemption or requirement of mandatory tender to the holders of the Bonds), and (v) will be deemed to continue in the Index Floating Rate Mode for all other purposes of the Resolution, though bearing interest during such time at the Stepped Rate until remarketed or redeemed in accordance with the terms of the Resolution. In the event of a failed remarketing on the Initial Mandatory Tender Date or during a deemed extension of the Initial Index Floating Rate Period, the Commission has covenanted in the Resolution to use its best efforts to cause the Bonds to be converted and remarketed on the earliest reasonably practicable date on which the Bonds can be sold at par (or above par if the Bonds are being remarketed at a fixed rate to maturity), in such interest rate mode or modes as the Commission directs, at a rate not exceeding the Maximum Rate. Undelivered Bonds If a book-entry system is not in effect at the time any Bond is subject to mandatory tender for purchase, and if the Tender Agent is in receipt of an amount sufficient to pay the Purchase Price, then such Bond (or portion) will be deemed purchased on the Purchase Date, and ownership of such Bond (or portion) shall be transferred to the purchaser thereof. Any Registered Owner who fails to deliver such Bond for purchase will not be entitled to any payment other than the Purchase Price for such Bond upon surrender of such Bond to the Tender Agent, and such Bond will no longer be outstanding and entitled to the benefits of the Resolution, except for the payment of the Purchase Price of such Bond from moneys held by the Tender Agent for such payment upon presentation and surrender of the Bond. If the date for the payment of the principal of, interest on, or Purchase Price of this Bond shall not be a Business Day, then the date for such payment shall be the next succeeding day which is a Business Day; and payment on such date shall have the same force and effect as if made on the original date payment was due. Optional Redemption The Bonds shall be subject to redemption, in whole or in part, at the option of the Commission, on October 1, 2016, or any date thereafter during the Initial Index Floating Rate Period, including any deemed extension of the Initial Index Floating Rate Period due to a failed remarking, at a redemption price of par, plus accrued interest thereon to the redemption date. Mandatory Sinking Fund Redemption THE BONDS MATURING on April 1, 2032 are subject to mandatory sinking fund redemption prior to maturity and shall be redeemed by the Paying Agent/Registrar prior to maturity, in the following amounts, on the following dates and at a price of par plus accrued interest to the redemption date, with the particular Bonds or portions thereof to be redeemed to be selected and designated by the Commission in its sole discretion (provided that a portion of B-9

33 any Bond may be redeemed in an amount such that the outstanding principal amount after such redemption is at least equal to an Authorized Denomination): Bonds Maturing Aprill, 2032 Redemption Date Principal Amount 2031 $137,415, (maturity) 162,585,000 The principal amount of a Bond required to be redeemed pursuant to the operation of such mandatory sinking fund redemption provisions shall be reduced, at the option of the Commission, by the principal amount of any Bonds of such stated maturity which, at least 50 days prior to the mandatory redemption date (1) shall have been defeased or acquired by the Commission 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 Commission with money in the applicable debt service fund at a price not exceeding the principal amount of such Bonds plus accrued interest to the date of acquisition thereof, or (3) shall have been redeemed pursuant to the optional redemption provisions set forth herein and not previously credited against a mandatory sinking fund redemption requirement. Selection of Bonds For Redemption If less than all of the Bonds are to be redeemed, the Commission may select the maturities of the Bonds to be redeemed. If less than all of the Bonds of any maturity are to be redeemed, the Paying Agent/Registrar shall determine by lot or such other random method the Bonds, or potions thereof within such maturity to be redeemed. During any period in which ownership of the Bonds is determined by a book-entry at a securities depository, 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 Commission and the securities depository. Notice of Redemption. The Commission shall give written notice of redemption of any Bonds or portions thereof prior to maturity to the Paying Agent/Registrar at least thirty-five (35) days prior to a redemption date (unless a lesser period is acceptable the Paying Agent/Registrar). Unless waived by an Owner of the Bonds to be redeemed, at least thirty (30) days prior to the date fixed for the redemption of any Bonds or portions thereof prior to maturity at the option of the Commission and within thirty (30) days after a defeasance date, a written notice of such redemption or defeasance shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, to the Registered Owner of each Bond to be redeemed at its address as it appeared in the Security Register. The Paying Agent/Registrar shall also send notice of prepayment or redemption to the Registered Owner of any Bond who has not sent in such Bond for redemption sixty (60) days after the redemption date therefore. In the event of a failed remarketing on the Initial Mandatory Tender Date, the Commission and the Paying Agent/Registrar shall give notice of redemption as provided herein under Effects of a Failed Remarketing. Failure to send, mail, or receive such notice, or any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the optional B-10

34 redemption of any Bond, and it is hereby specifically provided that the mailing of such notice as required above in connection with the redemption of Bonds prior to maturity at the option of the Commission shall be the only notice actually required in connection with or as a prerequisite to such optional redemption of any Bonds or portions thereof. By the date fixed for any such redemption due provision shall be made with the Paying Agent/Registrar for the payment of the required redemption price for the Bonds or portions thereof which are to be redeemed, plus accrued interest thereon to the date fixed for redemption. If notice of redemption is given and if due provision for such payment is made, all as provided above, the Bonds or portions thereof which are to be so redeemed thereby automatically shall be treated as redeemed prior to their scheduled maturities, and they shall not bear interest after the date fixed for redemption, and they shall not be regarded as being outstanding except for the right of the Registered Owner to receive the redemption price plus accrued interest from the Paying Agent/Registrar out of the fund provided for such payment. If a portion of any Bond shall be redeemed a substitute Bond or Bonds having the same maturity date, bearing interest at the same rate, in any Authorized Denomination, at the written request of the Registered Owner, and in aggregate principal amount equal to the unredeemed portion thereof, will be issued to the Registered Owner upon the surrender thereof for cancellation, at the expense of the Commission, all as provided in the Resolution. Notwithstanding the foregoing, no notice of redemption is required to be given to the owner of any Bond which is subject to mandatory tender on the date fixed for redemption. If at the time of mailing of notice of any optional redemption, the Comniission shall not have deposited with the Paying Agent/Registrar moneys sufficient to redeem all of the Bonds called for redemption, such notice may state that it is conditional in that it is subject to the deposit of sufficient moneys with the Paying Agent/Registrar not later than the redemption date, and such notice shall be of no effect unless such moneys are so deposited. THIS BOND OR ANY PORTION OR PORTIONS HEREOF in any Authorized Denomination may be assigned and shall be transferred only in the Security Register of the Commission kept by the Paying Agent/Registrar acting in the capacity of registrar for the Bonds, upon the terms and conditions set forth in the Resolution. Among other requirements for such assignment and transfer, this Bond must be presented and surrendered to the Paying Agent/Registrar, together with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment ofthis Bond or any portion or portions hereof in any Authorized Denomination 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, to evidence the assignment hereof. A new Bond or Bonds payable to such assignee or assignees (which then will be the new Registered Owner or owners of such new Bond or Bonds), or to the previous Registered Owner in the case of the assignment and transfer of only a portion of this Bond, may be delivered by the Paying Agent/Registrar in exchange for this Bond, all in the form and manner as provided in the next paragraph hereof for the exchange of other Bonds. The Commission shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such transfer, but the one requesting such transfer shall pay any taxes or other governmental charges required to be paid with respect thereto. The Registered Owner of this Bond shall be deemed and treated by the Commission 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 Commission and the Paying Agent/Registrar shall not be affected by any notice to the contrary. HOU : B-11

35 ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without interest coupons, in Authorized Denominations. As provided in the Resolution, this Bond, or any unredeemed portion hereof, may, at the request of the Registered Owner or the assignee or assignees hereof, be exchanged for a like aggregate principal amount of fully registered bonds, without interest coupons, 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, be in the same Mode, in any Authorized Denominations, as requested in writing by the appropriate Registered Owner, assignee, or assignees, as the case may be, upon surrender of this Bond to the Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth in the Resolution. The Commission shall pay the Paying Agent/Registrar's standard or customary fees and charges for exchanging any Bond or any portion thereof, but the one requesting such 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 exchange. THIS BOND IS A LIMITED OBLIGATION OF THE COMMISSION, payable from and secured by a lien on, pledge of and security interest in the Pledged Revenues on an equal and ratable basis with the previously issued Outstanding First Tier Senior Obligations and any additional First Tier Senior Obligations issued in the future in accordance with the provisions of the Resolution. The Bonds do not constitute a legal or equitable pledge, charge, lien, or encumbrance upon any property of the Department, except with respect to the Pledged Revenues. THE RESOLUTION PROVIDES for the establishment of a Bond Purchase Fund to be held by the Tender Agent. The proceeds from the remarketing of the Bonds will be delivered to the Paying Agent/Registrar for deposit in the Bond Purchase Fund. THE PURCHASE PRICE WILL BE PAID SOLELY FROM AMOUNTS ON DEPOSIT IN THE BOND PURCHASE FUND. PAYMENTS OF THE PURCHASE PRICE ARE NOT SECURED BY OR PAY ABLE FROM PLEDGED REVENUES. NEITHER THE STATE OF TEXAS, THE COMMISSION, THE DEPARTMENT, NOR ANY OTHER AGENCY OR POLITICAL SUBDIVISION OF THE STATE OF TEXAS IS OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS EXCEPT FROM THE PLEDGED REVENUES AND CERTAIN FUNDS CREATED UNDER THE RESOLUTION. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF TEXAS OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS. THE COMMISSION AND THE DEPARTMENT HAVE NO TAXING POWER. NO RECOURSE UNDER THIS BOND SHALL BE HAD AGAINST ANY PAST, PRESENT OR FUTURE OFFICER OF THE COMMISSION OR THE DEPARTMENT. THE BONDS SHALL NEVER BE PAID IN WHOLE OR IN PART OUT OF ANY FUNDS RAISED OR TO BE RAISED BY TAXATION OR OUT OF ANY OTHER REVENUES OF THE COMMISSION, THE DEPARTMENT OR THE STATE EXCEPT THE PLEDGED REVENUES IDENTIFIED IN THE RESOLUTION. THE PLEDGE OF REVENUES AND FUNDS and the other obligations of the Commission under the Resolution may be discharged at or prior to the maturity of the Bonds B-12

36 upon the making of provision for their payment on the terms and conditions set forth in the Resolution. SUBJECT TO SATISFYING THE TERMS AND CONDITIONS stated in the Resolution, the Commission has reserved the right to issue additional First Tier Senior Obligations payable solely from and equally and ratably secured by a parity lien on and pledge of the Pledged Revenues and other moneys and securities pledged under the Resolution to the payment of the Bonds. REFERENCE IS HEREBY MADE TO THE RESOLUTION, a copy of which is on file in the designated office of the Paying Agent, and to all of the provisions of which any Registered Owner of this Bond by his acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the security for the Bonds; the Pledged Revenues; the nature and extent and manner of enforcement of the pledge; the terms and conditions for the issuance of additional First Tier Senior Obligations; the conditions upon which the Resolution may be amended or supplemented with or without the consent of the Registered Owners of the Bonds; the rights and remedies of the Registered Owner hereof with respect hereto and thereto; the rights, duties and obligations of the Commission; the terms and provisions upon which the liens, pledges, charges, and covenants made therein may be discharged at or prior to the maturity or redemption of this Bond and this Bond thereafter no longer to be secured by the Resolution or be deemed to be outstanding thereunder; and for the other terms and provisions thereof. IT IS HEREBY CERTIFIED, RECITED, REPRESENTED, AND DECLARED that the Commission is duly organized and legally existing as the governing body of the Department, an agency of the State of Texas, organized under and by virtue of the Constitution and laws of the State of Texas; that the issuance of this Bond and the series of which it is a part are duly authorized by law; that all acts, conditions, and things required to exist and be done precedent to and in the issuance of this Bond to render the same lawful and valid have been properly done, have happened, and have been performed in regular and due time, form, and manner as required by the Constitution and laws of the State of Texas and the Resolution; that this series of Bonds does not exceed any Constitutional or statutory limitation; and that due provision has been made for the payment of this Bond and the series of which it is a part, as aforestated. In case any provision in this Bond shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. The terms and provisions of this Bond and the Resolution shall be construed in accordance with and shall be governed by the laws of the State of Texas. THE OWNER OF THIS BOND shall have no right to enforce the provisions of the Resolution or to institute action or enforce the covenants therein, or to take any action with respect to any event of default under the Resolution, or to institute, appear in, or defend any suit or other proceeding with respect thereto, except as provided in the Resolution. MODIFICATIONS OR ALTERATIONS OF THE RESOLUTION may be made by the Commission only to the extent and in the circumstances permitted by the Resolution. BY BECOMING THE REGISTERED OWNER OF THIS BOND, the Registered Owner thereby acknowledges all of the terms and provisions of the Resolution, agrees to be bound by such terms and provisions, acknowledges that the Resolution are duly recorded and available for inspection in the official minutes and records of the governing body of the Commission, and on B-13