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1997-116 ORDINANCE NO q/'] -- ]/t/,O AN ORDINANCE APPROVING THE CREATION OF THE SPRING HILL ES rATES WATER SYSTEM WITHIN THE CITY'S ETJ IN ACCORDANCE WITH SECTION 34-119 OF THE DENTON CITY CODE AND THE TERMS AND CONDITIONS OF THE ATTACHED AGREEMENT, AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT BETWEEN SPRING HILL ESTATES WATER COMPANY, TRYON DEVELOPMENT CORPORATION AND THE CITY, AND PROVIDING AN EFFECTIVE DATE WHEREAS, Tryon Development Corporation ("Tryon"), ~s proposing to develop a private water system to sepee approximately 82 lots in the Spring H~II Estates, near the intersection of U S 380 and F M 156 in the extraterritorial juris&ctlon of the City as shown on the Exhibit "A" to the attached Agreement between Spring Hill Estates Water Company ("Spring Hill"), Tryon, and the City, which is made a part of thxs ordinance as lfwmten word for word herein, and WHEREAS, the City of Denton on the advice of its Public Utilities Board deems it is tn the public interest to approve the creation of the Spring Hill Estates Water System inside it's ETJ in accordance with the attached Agreement and Section 34-119(4) of the Denton City Code, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS Section I The City Council approves the creation of the Spring Hill Estates Water System within the City's ETJ as shown on the attached Exhibit "A" conditioned on the full performance of all the conditions set forth m Section 34-119(4) of the Denton City Code and in the attached Agreement with Spring Hill and Tryon as set forth in Exhibit "A", including, without limitation the following conditions 1 Tryon and Spring Hill shall perform and fully comply with all the conditions of Section 34-119(4) of the Denton Cay Code and with all other applicable laws 2 Tryon and Spring Hill will fully comply with all the conditions of Exhibit 3 Tryon and Spring Hill shall keep the City informed of the name of their certified operator 4 Tryon and Spring Hill shall provide a guarantee of perpetual maintenance of the Spring Hill Water System in a form approved by the City Attorney 5 Tryon and Spring Hill must obtain a Certificate of Convenience and Necessity from the Texas Natural Resource Conservatmn Commission and obtmn a dual certification in this area with the City of Denton Section II That the Mayor, or ~n his absence the Mayor Pro-Tern, is hereby authorized to enter into the attached Agreement w~th Spring Hill and Tryon Development a~er approval as to form by the City Attorney and execuUon of the Agreement by Tryon and Spring Hill Section III That this ordinance shall become effecnve immediately upon its passage and approval PASSED AND APPROVED thisthe /',~ dayof ~ , 1997 JA~ILL~R, MAY ATTEST JENNTFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY AGREEMENT FOR CREATION OF SPRING HILLS ESTATE WATER SYSTEM WITHIN CITY OF DENTON ETJ STATE OF TEXAS § COUNTY OF DENTON KNOWN ALL MEN BY THESE PRESENTS: This Agreement, made this the /~"/~ day of ~~__, 1996, between the City of Denton, Texas, a Municipal'Corporation, acting through its Mayor ("city") and Tryon Development Corpora- tlon, a Texas Corporation, acting through its , hereinaf- ter referred to as "Tryon", and Spring Hill Estates Water Company, a private Water Company, formed to operate the Spring Hills Estate Water System, acting through its , hereinafter referred to as Spring Hill' WI TNES SETH I. Definition Of Terms As used in this Agreement, the following terms will have the following meanings A. "Commission" means the Texas Natural Resource Conservation Commission B. "CCN" means oertlflcates of convenience and necessity issued by the commission to a utility, public utility, governmental entity, or water supply and/or sewer service corporatIon, if those terms are defined in the Texas Water Code C. "Clty" means the City of Denton, Texas D "Denton Water System" means the distribution lines, treatment plants, reservoirs, pump stations, mains, residential and commercial connections, and any other parts or components that will comprise the public water and wastewater system of the City of Denton. E. "Potable Water" means water meeting the requirements of the Texas Department of Health for human consumption and other domestic uses. F "Spring Hill Estates Water Company" or "Spring Hill" means the private entity formed to own and operate the Spring Hill Water System. G "Spring Hill Estates Water System" means the distribution lines, treatment plants, reservoirs, pump stations, mains, residential and commercial connections, and any other parts or components that will comprise the public water system of Spring Hill Estates. II. Recitals WHEREAS, Tryon Development, the developer of Spring Hills Estates, is proposing to develop a private water system to serve 82 lots as shown on Exhibit A, which is attached hereto and made a part of this Agreement for all purposes. This system is to consist of 2 500 feet deep wells with submersible pumps rated for 43 GPM, a 20,000 gallon ground storage tank, a 2,000 gallon pressure tank, 2-252 GPM Booster Pumps, 7,675 feet of slx-inch water lines, 14 gate valves, one fire hydrant, and other pertinent improvements, which would serve customers within the extraterritorial ~urlsdlc- tlon of the city. WHEREAS, the City by Resolution #97-__ approved the creation of the Spring Hill Water System in accordance with Section 34- 119(4) of the Denton city Code NOW, THEREFORE, for and in consideration of the mutual promises herein contained the parties agree as follows: III. Authority To Contract A Tryon certifies, pursuant to relevant law, that it has legal authority to enter into this Agreement Exhibit "B", which Ks attached hereto and incorporated herein by reference, is a duly adopted resolution of Tryon's Board of Directors approving this Agreement and authorizing the President to execute this Agreement on behalf of and as an act of Tryon B. The City certifies, pursuant to relevant law, that it has legal authority to enter into this Agreement Exhibit "C" which is attached hereto and incorporated herein by reference, is a duly adopted resolution of the Denton city Council, approving this Agreement and authorizing the Mayor to execute this Agreement on behalf of the City. C. Immediately upon its formation and its legal existence as a private water company the Board of Directors of the Spring Hill Estates Water Company shall, by executing this Agreement, state that they have the legal authority to enter into this Agreement They shall forward to Tryon and City an Exhibit "D", to be attached hereto and incorporated herein by reference, which will be a duly adopted resolution of the Board of Directors of Spring Hill, approving this Agreement and authorizing its President to execute this Agreement on behalf of Spring Hill Page 2 IV. Conditions of Approval The City hereby agrees to authorize, in accordance with Ordinance 34-119 of the city Code and other applicable laws, the creation of the Spring Hill Water System by Tryon subject to the following conditions: A All sanitary control easements must have a minimum radius of 150 feet B. Spring Hill and Tryon shall submit prior to construction all plans and specifications for ~ts on-site sewer disposal to the City of Denton through its Executive Director of Public Utilities Spring H~ll shall not proceed with any construction on on-site sewage disposal for Lots 1 and 2, Block E until and unless the City of Denton approves such sewer system C. Tryon and Spring Hill must provide certified evidence, through a registered professional engineer, that the water system will meet all City, State, and Federal Health and Water Quality Standards including, without limitations, the system must be constructed uslng AWWA C-900, DR 18 rated pipe All such plans and specifica- tions regarding said Spring Hill Water System must first be submitted to the City through its Executive Director of Public Utilities and no construction shall begin unless the C~ty has approved such water system. D. All operators of the Spring Hill Water System must be certified by the State Department of Health through the Commission and all certlflcations must be kept current during the time the system is in operation. E. The City shall be given the right upon reasonable notice to inspect the system periodically to determine if the system is being operated and maintained according to all applicable laws and industry standards including without limItation all commission standards F. Tryon and Spring Hill shall obtain dual certification for the area shown in Exhibit "A" by the CommissIon prior to undertaking any operations and shall maintain dual certification during the term of this Agreement. G The review and approval procedures for Spring Hill and Tryon shall proceed concurrently with the normal platting and engineering plan approval process as outlined In this article, except for applications under these alternative water and sewer facility proposals, which first require review and recommendation from the Publlc Utilities Board and must be filed concurrently from the City Council. Page 3 H. Tryon and Spring Hill must provide perpetual private mainte- nance of the Spring Hill Estates Water System through one of the two following methods: 1. Through a irrevocable Maintenance Bond with a Insurance Agency rated at A or better by Best in an amount which is deemed sufficient to take care of all maintenance problems for the life of the system but not to be less than 10 years. 2. Through the formation of a Homeowners Association in a form approved by the City Attorney with funding determined adequate by the City through its Executive Director of Finance and its Executive Director of Municipal Utilities to cover all maintenance during the life of the Spring Hill Water System In addition, Tryon and Spring Hill will execute an irrevocable Escrow Agreement and place Into an irrevocable Escrow Account for the benefit of the City, an amount not less than the cost of five years maintenance of the system to be accessible to the City if the Home owners Association's funding for any reason proves to be inadequate to take care of ongoing maintenance problems J. Spring H~ll and Tryon shall not~fy the City of the name of their certified operator(s) and shall continually keep and provide to the City access to any records that the City needs in order to adequately inspect the Spring Hill Water System and review any procedures applicable thereto. K. Spring Hill and Tryon shall fully comply with all the condi- tions of Section 34-119(4) of the C~ty Code and all other applica- ble laws. V. City Acceptance Of The System A. Tryon and Spring Hill agree that a City, at any time, may accept The Spring Hill Water System for operation and maintenance when the City's water and sewer llnes are connected to the Spring Hill Estates Water System, provided the system has been designed, constructed, and operated in accordance with accepted industry and city standards. Prior to such acceptance by the City, the Spring Hill Water System, including all facilities, shall be inspected and evaluated as to standards, adequacy, conditions, and all other matters. If water and sewer lines and facilities are not according to c~ty standards, a per linear-foot pro-rata charge shall be assessed to the users of such system for Installation of these new facilities or will be on a per-linear-foot, actual-cost basis for upgrading or repairing the existing facilities to meet city standards. B. Tryon and Spring Hill understand and agree that the City, may hire a Consultant, to perform a survey and feasibility study of the Page 4 Spring Hill Estates Water System and that City, will perform a complete Inventory and assessment of the Spring Hill Estates Water System prior to making a decision to accept the then existing system into the City Utility System In the event the City decides to accept the existing Spring Hill Estates Water System into the City System, it shall be conveyed and dedicated to the City at no cost, in accordance with the additional terms of the Agreement set forth here~n. However, this clause creates no obligation on the City to accept the Sprlng Hill Estates Water System as a part of the overall City Water System and the Spring Hill Estates Water System may only be accepted if the City, upon recommendation of its Public Utility Board, determlnes that it is feasible and acceptable for the C~ty to manage and operate the Spr~ng Hill Estates Water System and the City, through a majority vote of the City Council agrees to ultimately accept a transfer of the Spring Hill Estates Water System. It is further agreed by the parties that the City shall not accept the Sprlng Hill Estates System until the final completion of all improvements necessary to bring the Spring Hill Estates Water System into full compliance of all applicable Local, State and Federal laws, rules and regulations, lnclud~ng, without limitation the construction and acceptable completion of any water treatment facllltles adequate to extend service to Spr~ng Hill Estates has been accomplished VI Spring Hills Obligation Upon Transfer In consideration of the City's obligations and the mutual consideration given by the City in allowing the Spring Hill Estates Water System to be created, Tryon and Spring Hill, by and through their deslgnated and authorlzed representatives, agree as follows A. Upon the request of the City through its City Council, to transfer and convey to the City, for the management operation of the City, the entire Spr~ng Hill Estates Water System, including but not limited to the following. 1. Any rights, obligations, duties they possess pursuant to any CCN it has received from the Commission, or any other license, permit, or certificate which you may have received from any state agency or governmental entity whatsoever relating to water, water treatment services of whatever kind or nature within service area or in its outlylng areas, which service area is described in Exhibit "A" 2. All rlghts, title, and interest in all real and personal property that comprises the Spring Hill Water System, to be more particularly described as Exhibits to the Transfer Agreement when an inventory of all property is completed by the City. This lnventory shall constitute a complete inventory and listing of all real and personal property, including but not limited to all easements and right-of-way agreements, which are then owned, operated and maintained Page 5 by Spring Hill as a part of the Spring Hill Water System B. To cooperate with the City in the event of a transfer to take all action necessary to comply with the rules of Commission or any other Federal, State, Local Agency which is necessary to accomplish and effectuate the transfer of the Spring Hill Water System C. To be solely responsible, in the event of a transfer, for taking any action necessary to dissolve or otherwise terminate its existence as necessary to fully accomplish the transfer of the Sprang Hill Water System anto the Denton Water System. VII. Documents And Access Provaded A. Sprang Hall agree, upon request of the Caty, through Its Executive Director of Publac Utilities, to deliver to the City immediately upon request, a copy of all plans, "as bualts", specifications, equipment, construction warranties and drawings related to the Spring Hill Estates Water System, together with copies of all easements, permits, water raghts or rights to water contracts or assignments, and other documents demonstrating property interest in the Spring Hall Estates Water System, as may be requared by the City's Executive Director of Public Utilities B. Spring Hall and Tryon grant to the City and it's Director of Publac Utllitaes, thear employees, agents, consultants and contractors an unrestracted raght of entry to anspect, measure, survey, and test Spring Hall Estates Water System and perform other activities related to the full examanatlon and assessment of Sprang Hall Estates Water System. In addataon, Sprang Hall shall allow and fully cooperate with Caty and lt's Executave Director of Public Utallties, at's above lndacated employees, agents, representatives, consultants, and contractors, to do a complete Inventory, account- ang, and appraisal of all assets and intangible property of Spring Hlll an the event of a transfer of the Spring Hill Estates Water System anto the City water system VIII. Physical Loss No approval by the City or it's Executive Director of Public Utilities of any planned specifications, permits or other documents shall ever make the City responsible or liable for any defects in the Spring Hill Estates Water System and the City shall not be liable for any means or methods of construction of the water system. Spring Hill shall bear all risk of loss, damage, or destruction to its business and the assets of the Spring Hill Estates Water System. The City may terminate this agreement and cancel its approval of the system and may move to have the commasslon revoke the dual CCN Certification if Spring Hill allows the Spring Hill Estates Water System to deteriorate to such an extent that the cost of repairing or restoring any assets of the Spring Hill System as greater than one-half of the total value of Page 6 the system as determined by an independent appraiser approved by the City, through it's Executive Director of Public Utilities, or an independent appraiser approved by the City, determines that the Bond or Neighborhood Association Agreement is not sufficient to continue to maintain or repair the system IX. Indemnity By Spring Hill A. Tryon and Spring Hill shall indemnify, defend, and hold harmless the City, it's officers, agents, servants, and employees from all suits, actions, losses, damages, claims, or liability of any character, type, or description, including, without limitation, any fines, penalties and costs of damage whatsoever growing out of any action taken by any governmental entity, department or agency of any governmental entity, any other person, Including citizen suits against the City or any of it's officers, agents, servants, and employees for non-compliance with the laws, rules or regula- tions, whether relating to the environment or otherwise, and Including, without limitation, the generality of the foregoing, all expenses of litigation, court costs, and attorney's fees for injury or death to any person or injury to any property sustained by any person or persons property arising out of or occasioned by the negligent acts or breaches of any of Tryon and Spring Hill's obligations under this Agreement B Tryon and Spring Hill shall purchase and maintaIn, during the term of this Agreement, adequate property damage and liability Insurance, with a company rated A or better by Best, which shall be in an amount not less than $1 million dollars for each occurrence, to cover the indemnity obligation set forth in subsection VII above. The City shall be named an Additional Insured Such contract shall contain a clause which requires 30 days prior written notlflcatlon to Tryon, Spring Hill and the City prior to any change or cancellation in the policy X. General Provisions A Notices. Any written notices requlred to be g~ven under this Agreement shall be given by certified mall, return receipt request- ed, to the following persons at the following addresses: City of Denton' Tryon Mr Robert Nelson Executive Director of Utilities 215 E McKlnney Denton, Texas 76201 Page 7 Spring Hill A copy of all such notices shall be provided to the City Manager by certified mall, return receipt requested, to: Mr. Ted Benavides city Manager 215 E. MoKlnney Denton, Texas 76201 B. Entire Agreement. This agreement constitutes the entire agreement between the parties and no prior or contemporary oral promises or representation shall be binding as to either party. No modification of any provision to this agreement shall be effective, unless such modification ls in writing and s~gned by authorized representatives of each party and is expressly stated to be a modification of this agreement The failure of either party to insist upon the strict performance of any of the terms, provisions, or conditions of the agreement shall not be construed as a waiver or relinquishment for the future of such term, provision, or condition C Descriptive captions. The titles or captions of the articles, sections, subsections, paragraphs, or subparagraphs of this agreement are intended strictly for the convenience of the parties and shall have no effect and shall neither limit nor amplify the provisions of the agreement itself D. Applicable Law. The validity, operation, performances contract, shall be governed and controlled by the laws of the State of Texas and the terms and conditions of th~s Agreement shall be construed and interpreted in accordance with the laws of this State. Venue for any proceeding brought for any breach of this agreement shall be in Denton County, Texas E Breach cf Contract. Any party to this agreement may terminate such Agreement, file an action for damages or seek specific performance contract to pursue any other remedy it may have in law or equity for breach of this Agreement or any intentional act or negligent act or omission. If it is necessary for any party to file a cause of action at law or an equity against any other party due to: 1. A breach of this contract by any other party, and/or any intentional negligent act or omission, that party shall be entitled to reasonable attorney's fees and costs and any necessary expenses in addition to any relief to which it is entitled Page 8 F Cu~ulative Remedies. In the event of default by any party herein, all other parties shall have the rights and remedies afforded to them at law or In equity to recover damages and interpret or enforce the terms of this Agreement The exercise of any one right or remedy shall be without prejudice to the enforce- ment of any other right or remedy allowed by law or in equity G Assignment. Neither this agreement nor any interest therein shall be assigned by any party without the written consent of other parties. H. Binding of sucoessors. This Agreement shall be binding on and shall note the benefit of the successors and assigns of the parties hereto, nothing contained in this Agreement shall be construed as consent to any assignment of this Agreement by the parties I No Third Party Benefioiary. The parties are entering this Agreement so for the benefit of themselves and agree that nothing herein shall be construed to confer for any right, privilege, or benefit on any person or entity other than the parties hereto XI. Termination The city reserves the right to cancel this Agreement without liability and revoke its approval and initiate a revocatIon of Spring Hills CNN if any of the following conditions occur 1. If Spring Hill commits a breach of this Agreement which is not cured to the sole satisfaction of the City of Denton, through its Executive Director of Municipal Utilities and within thirty days of the date that Spring Hill receives such a written notice. 2. If Spring Hill falls to obtain its CNN or any other permit, license, or other approval of any Federal, State, or Local Agency or Governmental Entity Executed as of this, the t~ day of . , 1997, by Tryon Development Corporation, signing Wy and through its President, duly authorized to execute same, by Spring Hill Estates, signing by and through its President, duly authorized to execute same; by the City of Denton, through its Mayor, Jack Miller, duly authorized to execute the same, thereby binding themselves, their successors, assigns, representatives for the faithful and full performance of the terms and provisions of this Agreement. CITY OF DENTON, TEXAS A Municipal Corporation Page 9 ATTEST: JENNIFER WALTERS, CITY SECRETARY HERgERT L. PROUTY, CITY ATTO~EY SPRING HILL ESTATES A Private Water Company BY: Its President ATTEST~ BY: TRYON DEVELOPMENT CORPORATION A Texas Corporation BY: Its President ATTEST: BY: STATE OF TEXAS COUNTY OF DENTON Th~s lns~ume~t~s,a~knowledged before me on /~ ~ ~ , 1997, by ~/~.~ , the Mayor of the Clt~o~/Denton, Texas, a Tex~ M'u~lclpal Corporation ~oratlon ~~°°°~°°°°°~o Notary/Public, Stat~/of Texas Page 10 ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPROVED AS TO LEGAL FORM. HERBERT L PROUTY, CITY ATTOPNEY SPRING HILL ESTATES A Private Water Company Its ' ent ' ATTEST TRYON DEVFLOPMENT CORPORATION A Texas Corporation ATTEST BY /{~! &. N6~E~ STATE OF TEXAS COUNTY OF DENTON Th~s instrument was acknowledged before me on , 1997, b~ , the Mayor of the ci'y of Denton, Texas, a Texas M~,nic~pal Corporation on behalf of sa~d corporatton Notary Public, State of Texas Page 10 STATE OF TEXAS COUNTY OF DENTON This instrument was acknowledged before me on , 1997, by , the President of Spring Hill Estates, A Private Water Company on behalf of said company Notary Public, State of Texas STATE OF TEXAS COUNTY OF DENTON This instrument was acknowledged before me on , 1997, by , the President of Tryon Development Corporation, a Texas CorporatIon, on behalf of said corporatIon Notary Public, State of Texas c \WPDOCS\K\SPRINGHL K Page 11 STATE OF TEXAS COU~Y OF DENTON This ins=rument was acknowledged before me on ~,'C~t~? , 1997, by ~l h~0t~lE~ , =he Presiden= of Spring Hill Es=a=es, A P~lvate Wa=er Company on behalf of said company. ~ l~ublic, Sga~e of Texas STATE OF TEXAS COUNTY OF DEN~)N This ins=rumen= was acknowledged before me on 2~ ~ tqq7 , 1997, by ~ 1,. ~ , =he President of Tryon Developmen~ corpora=ion, a Texas Corpora=~on, on behalf of said corpora=£on. ublic0 S~a~e of Texas ct \W~DOCS\K\SP]~INOI~L K Page 11 TRYON DEVELOPMENT CORPORATION 27 March 1997 As of th~s date, we have not incorporated the Denton Spring H~ll Estates Water Company. As soon as we do so, we w~ll execute a Certlficate of Corporate Resolution on behalf of Denton Spr~ng H~ll Estates Water Company author~zlng Karl L. Holmes to slgn and to act on behalf of the corporatzon concerning the Water Agreement w~th the C~ty of Denton. S~ncerely, Kar~ L. Holmes KLH/tt (corporate acknowledgment) THE STATE OF TEXAS } } COUNTY OF DENTON } Before me, the undersigned authority, on this day personally appeared KARI L. HOLMES, President of TRYON DEVELOPMENT CORPORATION, a corporation, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, in the capacity therein stated and as the act and deed of said corporation. Given under my hand and seal of office on this the 27th day of March, 199!. ~t:F~{/f*l NOTARY PUBLIC ~ ~-"~t~y ~ubllc ~~te acknowledgment) THE STATE OF TEXAS } } COUNTY OF WISE } Before me, the undersigned authority, on this day personally appeared BERNA DEAN LEE, Vice President of TRYON DEVELOPMENT CORPORATION, a corporation, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, in the capacity therein stated and as the act and deed of said corporation. Given under my hand and seal of office on this the 27th day of March, 199!. t ~.~,.~..~,/~ State of texas : CERTIFICATE OF CORPORATE ~SOLUTION--PA~ 3 TRYON DEVELOPMENT CORPORATION (9?2) ~3~-3354 27 March 1997 In all matters concerning the Denton Spr~ng H~ll Estates Water Company or development of same, our designated contact person shall K. WAY~ LEE Route 1 Box 10B Rhome, Texas 76078 (817) 421-4040 S~ncerely, Karl L. Holmes KLH/tt C~.RTIFIC~TE OF CORPORATE RESOLUTe'ON Dates 27 March 1997 Corporations TRYON DEVELOPMENT CORPORATION, a Texas Corporation. Presidents KARI L. HOLMES Vice Presidents BERNA DEAN LEE Date of Meeting of Board of Dlrectors~ 10 March 1997 Other Corporate Offlcerss DEREK HOLMES, Secretary We, President and Vice President of the corporation, certify the following facts~ 1. The corporation is organized and operating under the laws of Texas, is qualified to do business here, and is in good standing. 2. No proceedings for forfeiture of the certificate of incorporation or for voluntary or involuntary dissolution of the corporation are pending. 3. Neither the articles of incorporation nor bylaws of the corporation 1Lmlt the power of the Board of Directors to pass the resolution below. 4. The President, Vice President, and other corporate officers are the persons authorized to make and sign this resolution. 5. The Secretary keeps the records and m~nutes of the proceedings of the Board of Directors of the corporation, and the resolution below is an accurate reproduction of the one CERTIFICATE OF CORPOI~ATE RESOLUTION--PAG~ 1 made in those proceedings; it has not been altered, amended, rescinded, or repealed; and it is now in effect. 6. The resolution below was legally adopted on the date of the meeting of the Board of Directors, which was called and held in accordance with the law and the bylaws of the corporation, at which a quorum was present. 7. This resolution has been adopted by the Board of Dlrectors~ The President of TRYON DEVELOPMENT CORPORATION, KARI L. HOLMES ls hereby authorized to sign and execute any and all documents and to act on behalf of said corporation with regard to the corporation entering and agreeing to that Water System Agreement prepared by the City of Denton concerning the water system at Spring Hill Estates in Denton County, Texas. KARI L. HOLMES, PRESIDENT BERNA DEAN LEE, VICE PRESIDENT CERTIFICATE OF CORPORATE P~SOLUTION--p~ 2