Defendants Exhibit 2 

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ANNOTATED EXCERPTS FROM 

HTA BOND RESOLUTIONS (1968 AND 1998)* *

HTA (1968) – SECTION 401 (pages 41-43) 

ARTICLE IV 

Revenues and Funds 

 Section 401. Sinking Fund Bond Service Account, Redemption Account and Reserve 

Account. A special fund is hereby created and designated “Puerto Rico Highway Authority 

Highway Revenue Bonds Interest and Sinking Fund” (herein sometimes called the “Sinking 

Fund”). There are hereby created in the Sinking Fund three separate accounts designated “Bond 

Service Account”, “Redemption Account” and “Reserve Account”, respectively. 

 The moneys in said Funds and Accounts shall be held by the Fiscal Agent in trust and 

applied as hereinafter provided with regard to each such Fund and Account and, pending such 

application, shall be subject to a lien and charge in favor of the holders of the bonds issued and 

outstanding under this Resolution and for the further security of such holders until paid out or 

transferred as herein provided. 

 The Authority covenants that all of the Revenues (other than investment earnings on 

deposits to the credit of funds and accounts established hereunder), and any other funds of the 

Commonwealth allocated to the Authority for the payment of principal and interest on bonds of 

the Authority issued under the provisions of this Resolution, which it receives will be deposited 

monthly with the Fiscal Agent to the credit of the following Accounts and Fund in the amounts 

specified and in the following order: 

 (a) to the credit of the Bond Service Account, an amount equal to one-sixth 

(1/6) of the amount of interest payable on all bonds of each Series issued hereunder on 

the interest payment date next succeeding and (beginning with the twelfth month 

preceding the first maturity of any serial bonds of such Series) an amount equal to onetwelfth (1/12) of the next maturing instalment of principal of such serial bonds; provided, 

however, that the amount so deposited on account of interest in each month after the 

delivery of the bonds of any Series under the provisions of this Resolution up to and 

including the month immediately preceding the first interest payment date thereafter of 

the bonds of such Series shall be that amount which when multiplied by the number of 

such deposits will be equal to the amount of interest payable on such bonds on such first 

interest payment date less the amount of any accrued interest paid on such bonds and 

deposited with the Fiscal Agent to the credit of the Bond Service Account; 

(*) Filed in Case No. 17-3283, ECF Nos. 10107-2 (1968 HTA Bond Resolution) and ECF No. 

10107-3 (1998 HTA Bond Resolution). All highlighting added to Exhibit. 

 

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 In the event that the Authority has issued Variable Rate Bonds pursuant to the 

provisions of Sections 208 or 209 of this Resolution, Revenues shall be deposited at such 

additional times and amounts as established in the resolution under which the Variable 

Rate Bonds are issued as necessary to pay the interest coming due on the Variable Rate 

Bonds on the next Interest Payment Date. 

 If the period between Interest Payment Dates will be other than six (6) months, 

the period between principal payment dates will be other than twelve (12) months, or the 

period for Amortization Requirements will be other than twelve (12) months, then such 

monthly deposits shall be increased or decreased, as appropriate, in sufficient amounts to 

provide the required interest amount coming due on the next Interest Payment Date, 

principal amount maturing on the next principal payment date and the amount of the next 

Amortization Requirement. 

 (b) to the credit of the Redemption Account, for a period of 12 months 

beginning with the second month preceding each fiscal year in which there is an 

Amortization Requirement for the bonds of any Series, an amount equal to one-twelfth 

(1/12) of the Amortization Requirement for such fiscal year for the term bonds of each 

Series then outstanding plus an amount equal to one-twelfth (1/12) of the premium, if 

any, which would be payable on the first redemption date in the following fiscal year on a 

like principal amount of bonds if such principal amount of bonds should be redeemed 

prior to their maturity from moneys in the Sinking Fund; 

 (c) to the credit of the Reserve Account, such amount as is required to make 

the amount deposited to the credit of said Account in the then current fiscal year at least 

equal to twenty per centum (20%) of the Reserve Requirement; provided, however, that 

no such deposit under this clause (c) shall be made in any month if the amount then to 

credit of the Reserve Account shall be equal to the Reserve Requirement or in excess of 

such amount as may be required to make the amount then to credit the Reserve Account 

equal to the Reserve Requirement; provided, further, that notwithstanding the above, in 

the event of an increase in the Reserve Requirement due to the issuance of additional 

Series of Bonds, such increase may be funded by deposits in each of five (5) years 

commencing in the fiscal year in which such additional Series of Bonds is issued, of 20% 

of such increase in the Reserve Requirements, and 

 (d) the balance, if any, remaining after making the deposits under clauses (a), 

(b) and (c) above, shall be deposited to the credit of the Construction Fund for use by the 

Authority for any of its authorized purposes subject to the provisions of Sections 604 and 

605 of this Resolution. 

 If the amount so deposited in any month to the credit of any Account mentioned in clause 

(a), (b) or (c) above shall be less than the required amount, the requirement therefor shall 

nevertheless be cumulative and the amount of any deficiency in any month shall be added to the 

amount otherwise required to be deposited to the credit of such account in each month thereafter 

until such time as such deficiency shall be made up. 

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 The Authority further covenants that any other funds which it receives from the 

Commonwealth to make up any deficiencies in the amounts needed to pay the principal of and 

interest on any bonds issued under the provisions of this Resolution will be applied for such 

purpose. 

 Notwithstanding the provisions of clause (c) above, in lieu of any required deposit of 

Revenues to the credit of the Reserve Account, or in substitution for all or a portion of the 

moneys then held to the credit of the Reserve Account, the Authority may deposit to the credit of 

the Reserve Account a Reserve Account Insurance Policy or a Reserve Account Letter of Credit 

for the benefit of the Holders in an amount equal to the required deposit, which Reserve Account 

Insurance Policy or Reserve Account Letter of Credit shall be payable or available to be drawn 

upon, as the case may be (upon the giving of notice as required thereunder), on any Interest 

Payment Date on which a deficiency exists which cannot be cured by moneys in any other fund 

or account held by the Fiscal Agent pursuant to this Resolution and available for such purpose. 

If a disbursement is made under the Reserve Account Insurance Policy or the Reserve Account 

Letter of Credit, the Authority shall be obligated either to reinstate the limits of such Reserve 

Account Insurance Policy or Reserve Account Letter of Credit following such disbursement, or 

to deposit into the Reserve Account from the Revenues, funds in the amount of the disbursement 

made under such Reserve Account Insurance Policy or Reserve Account Letter of Credit, or to 

undertake a combination of such alternatives. 

 

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HTA (1998) – SECTION 401 (pages 47-50) 

ARTICLE IV 

REVENUES AND FUNDS 

SECTION 401. A special fund is hereby created and designated “Puerto Rico Highways and 

Transportation Authority Transportation Revenue Bonds Interest and Sinking Fund” (herein 

sometimes called the “Senior Bond Sinking Fund”). There are hereby created in the Senior Bond 

Sinking Fund three separate accounts designated “Senior Bond Service Account”, “Senior Bond 

Redemption Account” and “Senior Bond Reserve Account”, respectively. Another special fund is 

hereby created and designated “Puerto Rico Highways and Transportation Authority Subordinated 

Transportation Revenue Bonds Interest and Sinking Fund” (herein sometimes called the 

“Subordinated Bond Sinking Fund”). There are hereby created in the Subordinated Bond Sinking 

Fund two separate accounts designated “Subordinated Bond Service Account” and “Subordinated 

Bond Redemption Account”, respectively. Another special fund is hereby created and designated 

“Puerto Rico Highways and Transportation Authority Subordinated Transportation Revenue Bonds 

Reserve Fund” (herein called the “Subordinated Bond Reserve Fund”). The Authority may by 

resolution establish one or more accounts within the Subordinated Bond Reserve Fund to the extent 

necessary to correspond to those Series of subordinated bonds with different Subordinated Reserve 

Requirements. Each such account shall be designated “Subordinated Bond Reserve Account (Series 

__)” (inserting a year or a letter to identify the particular Series of subordinated bonds to which such 

account relates). 

 There is hereby also created a special fund designated the “Puerto Rico Highways and 

Transportation Authority Transportation Revenue Fund” (herein sometimes called the "Revenue 

Fund”). The Authority covenants that all Revenues (except investment earnings or deposits to the 

credit of the funds and accounts established hereunder) will be deposited when received to the credit 

of the Revenue Fund. Until the outstanding 1968 Resolution Bonds have been paid or provision has 

been made for their payment and the repeal and cancellation of the 1968 Resolution, the Executive 

Director or any officer or employee of the Authority designated by him for such purpose shall on or 

before the last day of the month during which the first Series of bonds shall be issued under the 

provisions of Section 207 of this Resolution and on or before the 25th day of each month thereafter 

withdraw from the 1968 Construction Fund and transfer to the credit of the Revenue Fund all 

unencumbered moneys held for the credit of the 1968 Construction Fund, such transfer to be made on 

the books of the Authority as of the close of the preceding month. The Authority covenants that all 

moneys to the credit of the Revenue Fund will be applied to the purposes and in the order set forth in 

this Article. 

 The moneys in said Funds and Accounts shall be held by the Fiscal Agent in trust and applied as 

hereinafter provided with regard to each such Fund and Account and, pending such application, shall 

be subject to a lien and charge in favor of the holders of the bonds issued and outstanding under this 

Resolution and for the further security of such holders until paid out or transferred as herein provided. 

The Authority covenants that on or before the last day of the month during which the first Series 

of bonds shall be issued under the provisions of Section 207 of this Resolution and on or before the 

25th day of each month thereafter, it shall be the duty of the Executive Director or any officer or 

employee of the Authority designated by him for such purpose to withdraw from the Revenue Fund 

all of the moneys then held to the credit of such Fund and deposit such moneys and any other funds of 

the Commonwealth allocated to and received by the Authority for the payment of principal of and 

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interest on bonds of the Authority issued under the provisions of this Resolution with the Fiscal Agent 

to the credit of the following Accounts and Fund in the amounts specified and in the following order: 

 (a) to the credit of the Senior Bond Service Account, an amount equal to one-sixth (1/6) of 

the amount of interest payable on all senior bonds of each Series issued hereunder on the interest 

payment date next succeeding and (beginning with the twelfth month preceding the first maturity 

of any serial bonds of such Series) an amount equal to one-twelfth (1/12) of the next maturing 

installment of principal of such serial bonds until the amount held to the credit of the Senior 

Bond Service Account is equal to the sum of such amount of interest payable on such interest 

payment date plus the amount of such installment of principal; provided, however, that the 

amount so deposited on account of interest in each month after the delivery of the senior bonds 

of any Series under the provisions of this Resolution up to and including the month immediately 

preceding the first interest payment date thereafter of the bonds of such Series shall be that 

amount which when multiplied by the number of such deposits will be equal to the amount of 

interest payable on such bonds on such first interest payment date less the amount of any accrued 

interest paid on such bonds and deposited with the Fiscal Agent to the credit of the Senior Bond 

Service Account; 

 (b) to the credit of the Senior Bond Redemption Account, for a period of 12 consecutive 

months beginning with the month preceding each fiscal year in which there is an Amortization 

Requirement for the senior bonds of any Series, an amount equal to one-twelfth (1/12) of the 

Amortization Requirement for such fiscal year for the term bonds of each Series of senior bonds 

then outstanding plus an amount equal to one-twelfth (1/12) of the premium, if any, which 

would be payable on the first redemption date in the following fiscal year on a like principal 

amount of bonds if such principal amount of bonds should be redeemed prior to their maturity 

from moneys in the Senior Bond Sinking Fund; 

 (c) to the credit of the Senior Bond Reserve Account, such amount, if any, of any balance 

remaining after making the deposits under clauses (a) and (b) above (or the entire balance if less 

than the required amount) as may be required to make the amount deposited to the credit of said 

Account in the then current fiscal year at least equal to twenty per centum (20%) of the Senior 

Reserve Requirement; provided, however, that no such deposit under this clause (c) shall be 

made in any month if the amount then to the credit of the Senior Bond Reserve Account shall be 

equal to the Senior Reserve Requirement or in excess of such amount as may be required to 

make the amount then to the credit of the Senior Bond Reserve Account equal to such Senior 

Reserve Requirement; and provided, further, that notwithstanding the above, in the event that the 

Senior Reserve Requirement shall have increased on account of the issuance of additional Series 

of senior bonds, the amount deposited in each of the five (5) years commencing in the fiscal year 

in which such additional Series of senior bonds is issued, shall equal 20% of such increase in the 

Senior Reserve Requirement; 

 (d) to the credit of the Subordinated Bond Service Account, an amount equal to one-sixth 

(1/6) of the amount of interest payable on all subordinated bonds of each Series issued hereunder 

on the interest payment date next succeeding and (beginning with the twelfth month preceding 

the first maturity of any serial bonds of such Series) an amount equal to one-twelfth (1/12) of the 

next maturing installment of principal of such serial bonds until the amount held to the credit of 

the Subordinated Bond Service Account is equal to the sum of such amount of interest payable 

on such interest payment date plus the amount of such installment of principal; provided, 

however, that the amount so deposited on account of interest in each month after the delivery of 

the subordinated bonds of any Series under the provisions of this Resolution up to and including 

the month immediately preceding the first interest payment date thereafter of the bonds of such 

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Series shall be that amount which when multiplied by the number of such deposits will be equal 

to the amount of interest payable on such bonds on such first interest payment date less the 

amount of any accrued interest paid on such bonds and deposited with the Fiscal Agent to the 

credit of the Subordinated Bond Service Account; 

 (e) to the credit of the Subordinated Bond Redemption Account, for a period of 12 

consecutive months beginning with the month preceding each fiscal year in which there is an 

Amortization Requirement for the subordinated bonds of any Series, an amount equal to onetwelfth (1/12) of the Amortization Requirement for such fiscal year for the term bonds of each 

Series of subordinated bonds then outstanding plus an amount equal to one-twelfth (1/12) of the 

premium, if any, which would be payable on the first redemption date in the following fiscal 

year on a like principal amount of bonds if such principal amount of bonds should be redeemed 

prior to their maturity from moneys in the Subordinated Bond Sinking Fund; 

 (f) to the credit of each separate account within the Subordinated Bond Reserve Fund, 

such amount, if any, of any balance remaining after making the deposits under clauses (a) 

through (e) above (or the entire balance if less than the required amount, allocated pro rata to 

each such account on the basis of the corresponding Subordinated Reserve Requirements) as 

may be required to make the respective amounts deposited to the credit of said accounts in the 

then current fiscal year at least equal to the deposit requirement for each such account 

established by resolution of the Authority; provided, however, that no such deposit to any such 

account under this clause (f) shall be made in any month if the amount then to the credit of such 

account shall be equal to the applicable Subordinated Reserve Requirement or in excess of such 

amount as may be required to make the amount then to the credit of such account equal to such 

Subordinated Reserve Requirement; and provided, further, that notwithstanding the above, in the 

event that any Subordinated Reserve Requirement shall have increased on account of the 

issuance of additional Series of subordinated bonds, the Authority may by such resolution 

provide for equal annual deposits of such amounts (not to be more than 20% of the amount of 

such increase) as will ensure that the amounts so deposited will cause the sum held to the credit 

of any such account to equal such Requirement not earlier than the end of a 5-year period 

following the issuance of such Series of subordinated bonds; and 

 (g) the balance, if any, remaining after making the deposits under clauses (a) through (f) 

above, shall be deposited to the credit of the Construction Fund for use by the Authority for any 

of its authorized purposes, subject to the provisions of Sections 604 and 605 of this Resolution. 

 If the amount so deposited in any month to the credit of any Account mentioned in clauses (a) 

through (f) above shall be less than the required amount, the requirement therefor shall nevertheless 

be cumulative and the amount of any deficiency in any month shall be added to the amount otherwise 

required to be deposited to the credit of such account in each month thereafter until such time as such 

deficiency shall be made up. 

 The Authority further covenants that any other funds which it receives from the Commonwealth 

or any other source to make up any deficiencies in the amounts needed to pay the principal of and 

interest on any bonds issued under the provisions of the 1968 Resolution and this Resolution will be 

applied for such purpose first to make up any deficiencies in the amounts needed to pay the principal 

of and interest on any 1968 Resolution Bonds and then to make up any such deficiencies needed to 

pay such principal of and interest on the senior bonds and then the subordinated bonds. The Fiscal 

Agent is authorized to receive at any time payments from the Authority or any other person for 

deposit to the credit of the various funds and accounts established under this Resolution as shall be 

specified by the Authority or such person. 

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 The Authority shall, by resolution adopted in connection with the issuance of Variable Rate 

Bonds, modify the monthly amount required to be deposited pursuant to clause (a) above as shall be 

necessary to pay interest on said Bonds on the next interest payment date and pursuant to clause (c) 

above as shall be necessary to make the amount deposited to the credit of the Senior Bond Reserve 

Account or the applicable accounts within the Subordinated Bond Reserve Fund for any fiscal year 

equal to the amount required to be so deposited by virtue of said clause (c). 

 

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HTA (1968) – SECTION 601 (page 50) 

ARTICLE VI 

Particular Covenants 

 Section 601. Payment of Principal, Interest and Premium. The Authority covenants that 

it will promptly pay the principal of and the interest on every bond issued under the provisions of 

this Resolution at the places, on the dates and in the manner provided herein and in said bonds 

and in any coupons appertaining to said bonds, and any premium required for the retirement of 

said bonds by purchase or redemption, according to the true intent and meaning thereof. Except 

as in this Resolution otherwise provided, the principal, interest and premiums are payable solely 

from Revenues and from any funds received by the Authority for that purpose from the 

Commonwealth which Revenues and funds are hereby pledged to the payment thereof in the 

manner and to the extent hereinabove particularly specified. 

 

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HTA (1998) – SECTION 601 (page 58) 

ARTICLE VI 

PARTICULAR COVENANTS 

 SECTION 601. The Authority covenants that it will promptly pay the principal of and the 

interest on every bond issued under the provisions of this Resolution at the places, on the dates and in 

the manner provided herein and in said bonds and any premium required for the retirement of said 

bonds by purchase or redemption, according to the true intent and meaning thereof. Except as in this 

Resolution otherwise provided, such principal, interest and premiums are payable solely from 

Revenues and other moneys deposited to the credit of the Revenue Fund and from any funds received 

by the Authority for that purpose from the Commonwealth, which Revenues, moneys and funds are 

hereby pledged (with such priorities with respect to the use and disposition of Revenues as are in this 

Resolution specified) to the payment thereof in the manner and to the extent hereinabove particularly 

specified. Forthwith upon the repeal and cancellation of the 1968 Resolution, all Existing Tax and 

Fee Revenues and Existing Toll Facilities Revenues shall be hereby pledged to the payment of the 

principal of and premium, if any, and interest on the bonds issued under the provisions of this 

Resolution to the same extent and with the same effect as the pledge of the preceding sentence. 

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