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CERTIFICATE FOR RESOLUTION
THE STATE OF TEXAS
COUNTY OF NUECES
CITY OF CORPUS CHRISTI
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We, the undersigned officers of the City Council of the
City of Corpus Christi, Texas, hereby certify as follows:
1. The City Council o
MEETING ON THE AZ -DAY OF
meeting place, and the roll wa
tuted officers and members of s
said City convened in
, 1982, at the designated
called of the duly consti-
id City Council, to -wit:
Luther Jones, Mayor
Betty N. Turner
Bob Gulley
Herbert L. Hawkins, Jr.
Edward A. Martin, City
Manager
Bill G. Read, City Secretary
Cliff Zarsky
Jack K. Dumphy
Dr. Charles W. Kennedy, Jr.
J. Bruce Aycock, City Attorney
and all of said persons were present, except the following
absentees:
thus constituting a quorum. Whereupon, among other busi-
ness, the following was transacted at said Meeting: a
written
RESOLUTION APPROVING AN AGREEMENT BY CORPUS CHRISTI
INDUSTRIAL DEVELOPMENT CORPORATION TO ISSUE A BOND FOR
MASTER HOST INN - SANDY SHORES AND THE BOND RESOLUTION
PROVIDING FOR THE ISSUANCE OF SUCH BOND
was duly introduced for the consideration of said City
Council and read in full. It was then duly moved and
seconded that said Resolution be adopted; and, after due
discussion, said motion, carrying with it the adoption of
said Resolution, prevailed and carried by the following
vote:
AYES: All members of said City Council shown
pres nt above voted "Aye" except
NOES:
ABSTENTIONS:
2. That a true, full and correct copy of the aforesaid
Resolution adopted at the Meeting described in the above and
foregoing paragraph is attached to and follows this Certifi-
cate; that said Resolution has been duly recorded in said
City Council's minutes of said Meeting pertaining to the
adoption of said Resolution; that the persons named in the
IViiCROFILMED
1903.5 sEp 2 8 iQR4
7.)
above and foregoing paragraph are the duly chosen, qualified
and acting officers and members of said City Council as
indicated therein; and that each of the officers and members
of said City Council was duly and sufficiently notified
officially and personally, in advance, of the time, place
and purpose of the aforesaid Meeting, and that said Resolu-
tion would be introduced and considered for adoption at said
Meeting; and that said Meeting was open to the public, and
public notice of the time, place and purpose of said meeting
was given, all as required by Vernon's Ann. Civ. St. Article
6252-17, as amended.
SIGNED AND SEALED the a day of V.-T.)1Th, 1982.
C.4).7 Secretary Maye
(SEAL)
APPROVED:
day of , 1982.
J. Bruce Aycock, City Attorney
By:
,
/
i
v V
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RESOLUTION APPROVING AN AGREEMENT BY
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
TO ISSUE A BOND FOR MASTER HOST INN - SANDY SHORES
AND THE BOND RESOLUTION PROVIDING FOR THE
ISSUANCE OF SUCH BOND
WHEREAS, Corpus Christi Industrial Development Corpora-
tion was created under the auspices of the City of Corpus
Christi, Texas; and
WHEREAS, it is deemed necessary and advisable that this
Resolution be adopted.
THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF CORPUS CHRISTI, TEXAS THAT:
Section 1. The "Loan Agreement between Corpus Christi
Industrial Development Corporation and Master Host Inn -
Sandy Shores," in substantially the form and substance as
attached to this Resolution and made a part hereof for all
purposes, is hereby approved, and the Bond in the principal
amount of $7,200,000 may be issued pursuant thereto for the
purpose of paying the cost of acquiring, constructing,
equipping and furnishing or causing to be acquired, con-
structed, equipped and furnished the Project as defined and
described therein.
Section 2. The "Resolution Authorizing the Issuance of
Corpus Christi Industrial Development Corporation Revenue
Bond, Series 1982 and the Execution of a Trust Indenture
(Master Host Inn - Sandy Shores Project)," in substantially
the form and substance attached to this Resolution and made
a part hereof for all purposes, is hereby specifically
approved, and the Bond may be issued as provided for
therein.
Section 3. The necessity to approve the Agreement of
the Corpus Christi Industrial Development ,Corporation to
issue a bond for Master Host Inn - Sandy Shores, and the
Bond Resolution providing for the issuance of such bond
creates a public emergency and an imperative public neces-
sity requiring the suspension of the Charter rule that no
ordinance or resolution shall be passed finally on the date
of its introduction but that such ordinance or resolution
shall be read at three several meetings of the City Council,
and the Mayor, having declared that such emergency and
necessity exist, having requested the suspension of the
Charter rule and that this Resolution be passed finally on
17035
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the date of its introduction and take effect and be in full
force and effect from and after its passage, IT IS ACCORD-
INGLY SO RESOLVED.
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LOAN AGREEMENT
BETWEEN
CORPUS CHRISTI INDusTRIAL DEVELOPMENT CORPORATION
AND
MASTER HOST INN - SANDY SHORES
********************
The Corpus Christi Industrial Development Corporation
has granted a security interest in and assigned to
RepublicBank Dallas, National Association, as Trustee under
the Trust Indenture dated as of the date hereof, all of its
interests in all "Installment Loan Payments", "Liquidated
Damages Payments", and certain other payments, due pursuant
to and under this Loan Agreement to secure its Revenue Bond,
Series 1982 (Master Host Inn - Sandy Shores Project).
DEBTOR:
Master Host Inn - Sandy Shores
3200 Surfside Blvd.
Corpus Christi, Texas 78408
ASSIGNEE:
SECURED PARTY:
Corpus Christi Industrial
Development Corporation
302 South Shoreline
Corpus Christi, Texas 78408
RepublicBank Dallas, National Association,
as Trustee
Pacific and Ervay Street
Dallas, Texas 75201
r
TABLE OF CONTENTS
(The Table of Contents is not a part of the Loan Agree-
ment but is for convenience of reference only.)
PAGE
Parties 1
ARTICLE I
DEFINITIONS; GENERAL RECITALS,
FINDINGS, AND REPRESENTATIONS
Section 1.01. Definitions 1
Section 1.02. General Recitals, Findings, 4
and Representations
ARTICLE II
THE PROJECT
Section 2.01. Approvals and Permits 6
Section 2.02. Acquisition and Construction 6
ARTICLE III
FINANCING THE PROJECT; TITLE AND OPERATION
Section 3.01. The Loan 8
Section 3.02. Security for the Loan 8
Section 3.03. Repayment of Loan 8
Section 3.04. Title 10
Section 3.05. Operation 10
Section 3.06. Indemnities 10
Section 3.07. Issuer's Limited Liability 11
ARTICLE IV
THE BONDS
Section 4.01. Issuance of Bonds 12
Section 4.02. Refunding of Bonds 13
PAGE
Section 4.03. Redemption of Bonds 13
Section 4.04. Installment Loan Payments 13
Section 4.05. No Arbitrage 14
Section 4.06. Tax -Exempt Status of Interest on 14
the Bonds and Mandatory Redemption
Section 4.07. Payments to Issuer 18
ARTICLE V
COVENANTS AND REMEDIES
Section 5.01. Covenant 19
Section 5.02. Trustee and Remedies 19
Section 5.03. General Provisions 19
Section 5.04. Amendment of Agreement 20
ARTICLE VI
SPECIAL COVENANTS
Section 6.01. Partnership Existence 22
Section 6.02. Assignment 22
Section 6.03. Financial Reports 22
Section 6.04. Term of Agreement 23
Section 6.05. Termination 23
Section 6.06. Notices 23
Section 6.07. Severability 24
Execution by the Issuer 24
Execution by the User 25
Exhibit A 26
LOAN AGREEMENT
This Loan Agreement dated as of May 1, 1982, between
Corpus Christi Industrial Development Corporation and Master
Host Inn - Sandy Shores.
W ITNESSETH:
ARTICLE I
DEFINITIONS; GENERAL RECITALS, FINDINGS, AND REPRESENTATIONS
Section 1.01. DEFINITIONS. In addition to all other
words and terms defined herein, and unless a different
meaning or intent clearly appears from the context, the
following words and terms shall have the following meanings,
respectively, whenever they are used herein:
Act - The Development Corporation Act of 1979, as
amended (Article 5190.6, V.A.T.C.S.).
Agreement - This Loan Agreement, together with Exhibit
A attached to this Loan Agreement, and all amendments and
supplements to this Loan Agreement.
Approving Officer - Any person or persons at the time
designated to act on behalf of the User by a written certif-
icate, containing a specimen signature of such person or
persons, which is signed on behalf of the User by a general
partner of the User and is furnished to the Issuer and
Trustee.
Article - Any subdivision of this Agreement designated
with a roman numeral.
Board or Board of Directors - The lawfully qualified
board of directors of the Issuer.
Bondholder - The bearer of any Bond not registered as
to principal (or registered as to bearer) or the owner of
any Bond registered as to principal (except to bearer) or
the owner of any fully registered Bond.
Bond Counsel - An attorney or firm of attorneys experi-
enced in matters relating to municipal bond law and the tax
exemption of interest on bonds of states and their political
subdivisions, selected by the Issuer and satisfactory to the
Trustee and the User.
Bond Resolution - The Initial Bond Resolution and each
resolution of the Board of Directors authorizing the
issuance of Bonds (including the Trust Indenture prescribed
and authorized to be executed in the Initial Bond
Resolution) together with any supplemental resolutions or
amendments to such resolutions or such Trust Indenture.
Bonds - Any and all revenue bonds of the Issuer issued
and delivered to finance and pay for all or any part of the
Cost of the Project pursuant to the Act and this Agreement,
including initial series or issues of revenue bonds and
revenue bonds issued to finance and pay for all or any part
of the Cost of completing the Project, and any revenue bonds
issued for the purpose of refunding or replacing any Bonds.
Code -The Internal Revenue Code of 1954, as amended.
Commission - The Texas Industrial Commission, and its
successors and assigns.
• Construction Fund - The segregated account or accounts
into which certain proceeds from the sale and delivery of
each series of Bonds will be deposited as provided in each
Bond Resolution (excepting any Bond Resolution authorizing
revenue bonds to refund any Bonds).
Cost - With respect to the Project, the cost of acqui-
sition, construction, reconstruction, improvement, and
expansion of the Project as provided in the Act, including,
without limitation, the cost of the acquisition of all land,
rights-of-way, property rights, easements, and interests,
the cost of all machinery and equipment, financing charges,
interest during construction, necessary reserve funds, cost
of estimates and of engineering and legal services, plans,
specifications, surveys, estimates of cost and of revenue,
other expenses necessary or incident to determining the
feasibility and practicability of acquiring, constructing,
reconstructing, improving, and expanding any such Project,
administrative expense, and such other expense as may be
necessary or incident to the acquisition , construction,
reconstruction, improvement, and expansion thereof, the
placing of the same in operation, and the financing of the
Project.
Debt Service Fund - The segregated account or accounts
in which Installment Loan Payments, Liquidated Damages
Payments and certain other payments will be deposited as
provided in each Bond Resolution.
Deed of Trust - The Deed of Trust (with Security Agree-
ment and Assignment of Rents and Leases), dated as of May 1,
1982, executed by the User as security for the bonds.
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Governmental Unit - City of Corpus Christi, Texas, a
political subdivision of the State of Texas.
Inducement Date - November 4, 1981.
Initial Bond Resolution - The Bond Resolution adopted
by the Board of Directors, authorizing the issuance and
delivery of Corpus Christi Industrial Development Corpora-
tion Revenue Bond, Series 1982 (Master Host Inn - Sandy
Shores Project) in the principal amount of $7,200,000.
Issuer - Corpus Christi Industrial Development Corpora-
tion.
Installment Loan Payments - Payments required to be
made by the User to amortize each series or issue of Bonds,
as provided for in the applicable Bond Resolution, including
the principal of, redemption premium, if any, and interest
on such Bonds when due (whether at stated maturity, upon
redemption prior to stated maturity, or upon acceleration of
stated maturity).
Liquidated Damages Payments - Payments required to be
made by the User to the Trustee on behalf of the Bond-
holders, in amounts sufficient to pay all liquidated damages
due and owing to the holders and former holders of the
Bonds.
Loan - The loan of the proceeds of the sale of the
Bonds as described in Section 3.01.
Paying Agent - The Trustee and any other paying agent
for an issue or series of Bonds named in the Bond Resolution
authorizing such Bonds.
Project - The land, buildings, equipment, facilities,
and improvements described in Exhibit A to this Agreement.
Project Location - The City of Corpus Christi, Texas.
Registrar - The registrar for the Bonds named in the
Bond Resolution.
Regulations - The regulations promulgated by the United
States Treasury Department pursuant to the Code.
Section - Any subdivision of this Agreement designated
by arabic numerals.
Trust Indenture - The trust indenture, including all
supplements and amendments thereto, prescribed in and
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executed and delivered pursuant to the Initial Bond Resolu-
tion.
Trustee - The corporate trustee named under the Trust
Indenture, and its successors or assigns.
User - Master Host Inn - Sandy Shores, a joint venture
partnership organized and existing under the laws of the
State of Texas and fully qualified to transact business in
the State of Texas, and its herein permitted successors and
assigns.
References in the singular number in this Agreement
shall be considered to include the plural, if and when
appropriate.
Section 1.02. GENERAL RECITALS, FINDINGS, AND REPRE-
SENTATIONS. (a) The Issuer is a nonstock, nonprofit
industrial development corporation organized and existing
under the laws of the State of Texas, including particularly
the Act.
(b) The Issuer is a duly constituted authority and
public instrumentality of the Governmental Unit, a political
subdivision of the State of Texas, within the meaning of the
Regulations and the rulings of the Internal Revenue Service
prescribed and promulgated pursuant to Section 103 of the
Code, and the Issuer is functioning and acting solely on
behalf of the Governmental Unit.
(c) The User is fully qualified to transact business
in the State of Texas, and is fully authorized by law to
execute this Agreement.
(d) This Agreement is authorized and executed pursuant
to applicable laws, including the Act.
(e) The User has requested the Issuer to finance the
Cost of the Project.
(f) The Issuer has determined, in the public interest,
that it will finance the Cost of the Project, and loan money
to the User for such purpose in the manner provided in the
Act and this Agreement.
(g) The governing body of the Governmental Unit has
approved this Agreement by written resolution as required by
the Act.
(h) The Issuer and the User have taken all action and
have complied with all provisions of law with respect to the
execution, delivery and performance of this Agreement and
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the due authorization of the consummation of the transac-
tions contemplated hereby, and this Agreement has been duly
executed and delivered by, and constitutes a valid and
legally binding agreement of, the Issuer and the User,
enforceable against the respective parties in accordance
with its terms.
(i) The execution of this Agreement and the perform-
ance of the transactions contemplated hereby will not
violate any law or regulation, or any joint ventureagree-
ment, Articles of Incorporation, Charter, or Bylaws, or any
judicial order, judgment, decree, or injunction, or contra-
vene the provisions of or constitute a default under any
agreement, indenture, bond resolution, or other instrument
to which the Issuer or the User is a party.
(j) The User represents to the Board and the Commis-
sion that (1) the Project will contribute to the economic
growth or stability of the Governmental Unit by (aa) in-
creasing or stabilizing employment opportunities in the
Governmental Unit, (bb) significantly increasing or stabi-
lizing the property tax base of the Governmental Unit and
(cc) promoting commerce within the Governmental Unit and the
State of Texas; (2) it has no present intention of disposing
of or abandoning the Project; and (3) it has no present
intention of directing the Project to a use other than the
purposes represented to the Governmental Unit and the
Commission.
(k) The User further represents to the Board and the
Commission that (1) the Project is located within or adja-
cent to a designated blighted area; (2) the City of Corpus
Christi has approved the Project and has found that the
Project will (aa) contribute significantly to the fulfill-
ment of the redevelopment objectives of the city for the
designated blighted area and (bb) is in furtherance of the
public purposes of the Act; and (3) it will not, while the
Bonds are outstanding, direct the Project to a use not
authorized within the eligible blighted area, as defined by
the Act, and the rules promulgated by the Commission pursu-
ant to the Act.
NOW THEREFORE, in consideration of the covenants and
agreements herein made, and subject to the conditions herein
set forth, the Issuer and the User contract and agree as
follows:
5
ARTICLE II
THE PROJECT
Section 2.01. APPROVALS AND PERMITS. The Issuer and
the User agree to use their best efforts to obtain the
necessary approval of this Agreement by the Commission as
required by the Act, prior to the issuance of the Bonds, and
to obtain all other permits necessary with respect to the
acquisition, construction, equipping, and furnishing of the
Project.
.Section 2.02. ACQUISITION AND CONSTRUCTION. (a) The
Project shall be acquired, constructed, equipped, and fur-
nished with all reasonable dispatch, and the User will use
its best efforts to cause such acquisition, construction,
equipping, and furnishing to be completed as soon as practi-
cable, delays incident to strikes, riots, acts of God, or
the public enemy, or other causes beyond the reasonable
control of the User only excepted; but if for any reason
there should be delays in such acquisition, construction,
equipping, and furnishing there shall be no diminution in or
postponement of the Installment Loan Payments, Liquidated
Damages Payments, and other payments to be made by the User
hereunder, and no resulting liability on the part of the
Issuer.
(b) The User shall acquire, construct, equip, and
furnishthe Project or cause the Project to be acquired,
constructed, equipped, and furnished and the Issuer shall
have no responsibility or liability whatsoever with respect
to the Project and the acquisition, construction, equipping,
and furnishing thereof. It is agreed and understood that
the User has entered into and executed and will enter into
and execute all agreements and contracts necessary to assure
and accomplish the actual acquisition, construction, equip-
ping, and furnishing of the Project (and that the Issuer
shall not execute any such agreements or contracts) and that
the User will carry out, pay, supervise, and enforce all
such agreements and contracts, and will provide for such
insurance on and in connection with the acquisition, con-
struction, equipping, and furnishing of the Project as it
deems necessary or advisable or as is required by law and
this Agreement. The User shall pay, from proceeds from the
sale and delivery of the Bonds loaned to it pursuant to this
Agreement, and from any available income or earnings derived
therefrom, and from other funds of the User to the extent
necessary, the entire Cost of the Project. The User shall
promptly pay all taxes, including specifically all sales'
taxes and ad valorem taxes, in connection with the Project
and the acquisition, construction, equipping, and furnishing
thereof. The Issuer shall loan certain proceeds from the
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sale of the Bonds to the User to be used by the User to pay
all or part of the Cost of the Project, in accordance with
procedures to be established in any applicable Bond Resolu-
tion, including provisions for reimbursing the User for
paying all or any part of such Cost under the aforesaid
agreements and contracts for the acquisition, construction,
equipping, and furnishing of the Project prior to the User's
receipt of the Loan as hereinafter provided. It is specifi-
cally provided, however, that none of the proceeds from the
sale of the Bonds will be used to reimburse the User for, or
to pay (and the User hereby covenants and agrees not to
request reimbursement of or payment for) any part of the
Cost of the Project if such use or payment would result in a
violation of any of the User's covenants contained in
Section 4.06. Each Bond Resolution (excepting any Bond
Resolution authorizing revenue bonds to refund any Bonds)
shall contain appropriate provisions with respect to the
Construction Fund, to be drawn on and administered as
provided in such Bond Resolution.
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ARTICLE III
FINANCING THE PROJECT;
TITLE AND OPERATION
Section 3.01. THE LOAN. The Issuer shall make the
Loan to the User by depositing into the Construction Fund
(or such other fund as specifically provided in the Bond
Resolution) the proceeds from the sale of Bonds in such
'amount as is provided in each Bond Resolution. The amounts
so deposited shall be advanced in the manner provided in the
Bond Resolution; and the User shall repay the Loan by making
the Installment Loan Payments as provided in this Agreement
and the Bond Resolution.
Section 3.02. SECURITY FOR THE LOAN. The obligations
of the User under this Agreement shall be direct general
obligations of the User. Prior to or simultaneously with
the issuance of the Bonds, the Issuer will assign to the
Trustee under the terms of the Trust Indenture all of the
Issuer's right, title, and interest in and to the Install-
ment Loan Payments, Liquidated Damages Payments, and certain
other payments. In addition, it is recognized and under-
stood that the Deed of Trust has been given by the User as
additional security for the payment of Installment Loan
Payments, Liquidated Damages Payments, and certain other
payments for the benefit of the owners of the Bonds.
Section 3.03. REPAYMENT OF LOAN AND OTHER AMOUNTS.
(a) Notwithstanding any provision expressly or inferenti-
ally to the contrary contained herein, the User uncondition-
ally agrees that it shall make Installment Loan Payments,
Liquidated Damages Payments, and other payments provided for
in the Bond Resolution and herein, to the Trustee (pursuant
to the aforesaid assignment by the Issuer) .in lawful money
of the United States of America, and in such amounts and at
such times as shall be necessary to enable the Trustee to
make full and prompt payment of the principal of, redemption
premium, if any, and interest on all Bonds when due (whether
at stated maturity, upon redemption prior to stated matur-
ity, or upon acceleration of stated maturity), any agreed
Liquidated Damages Payments owed by the User to the Bond-
holders, and all fees and expenses of the Trustee, the
Registrar, and any Paying Agent for such Bonds, and of all
other amounts required to be paid by this Agreement, each
Bond Resolution and the Trust Indenture. Upon the issuance
and delivery of Bonds to the initial purchaser thereof, and
the deposit of the proceeds derived therefrom into the'
accounts established in the Bond Resolution, the User shall
have received, and the Issuer and the Bondholders shall have
given, full and complete consideration for the User's
obligation hereunder to make Installment Loan Payments,
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Liquidated Damages Payments, and other payments. The
obligations of the User to make the payments required by
this Agreement shall be absolute and unconditional (except
as provided in Sections 6.01 and 6.02),, and shall not be
subject to diminution by set-off, recoupment, counterclaim,
abatement, or otherwise; and until such time as all Install-
ment Loan Payments, Liquidated Damages Payments, and other
payments provided for in the Bond Resolution and herein
shall have been made or provision therefor shall have been
made in accordance with each Bond Resolution and the Trust
Indenture, the User: (i) will, not suspend or discontinue,
or permit the suspension or discontinuance of, any payments
provided for in this Agreement; (ii) will perform and
observe all of its other agreements contained in this
Agreement; and (iii) will not terminate this Agreement for
any cause including, without limiting the generality of the
foregoing, failure of the Project to comply with the plans
and specifications therefor, any acts or circumstances that
may constitute failure of consideration, destruction of, or
damage to the Project, frustration of commercial purpose,
any change in the tax or other laws or administrative
rulings of or administrative actions by the United States of
America, or the State of Texas, or any political subdivision
of either, or any failure of the Issuer to perform and
observe any agreement, whether expressed or implied, or any
duty, liability, or obligation arising out of or in connec-
tion with this Agreement. Nothing contained in this Section
shall be construed to release the Issuer from the perform-
ance of any of the agreements on its part contained herein;
and in the event the Issuer shall fail to perform any such
agreement on its part, the User may institute such action
against the Issuer as the User may deem necessary to compel
performance, provided that no such action shall violate the
agreements on the part of the User contained in this Section
or postpone or diminish the amounts required to be paid by
the User pursuant to this Agreement.
(b) Notwithstanding the foregoing, it is the intention
of the parties hereto to conform strictly to the applicable
usury laws of the State of Texas and the United States of
America, and any provision for any payment contained herein
and in such Bonds and the interest coupons appertaining
thereto, if any, shall be held to be subject to reduction to
the amount allowed under said usury laws as now or hereafter
construed by the courts having jurisdiction. This provision
shall be held to operate to deny the Issuer and the owners
of the Bonds and the interest coupons appertaining thereto,
if any, the right, in any event, to collect usury with
respect to the Loan or any Bonds.
Section 3.04. TITLE. The Issuer shall have no right,
title, or interest in and to the Project. Except for making
9
the Loan to the User from the source and in the manner
provided in this Agreement, the Issuer shall not be respon-
sible or liable in any manner for any claims, losses,
damages, penalties, costs, taxes, or fines with respect to
the acquisition, construction, equipping, furnishing,
installation, operation, maintenance, or ownership of the
Project.
Section 3.05. OPERATION. The User represents and
covenants that it will operate and maintain the Project, or
cause the Project to be operated and maintained, and will
pay, or cause to be paid, all costs and expenses of opera-
tion and maintenance of the Project, including all applica-
ble taxes, and that it will keep, or cause to be kept, in
force adequate insurance, including self-insurance, on the
Project as is customarily carried by persons engaged in the
same business and operating facilities like the Project. It
is understood and agreed that the Issuer shall have no
duties or responsibilities whatsoever with respect to the
operation or maintenance of the Project, or the performance
of the Project for its designed purposes.
Section 3.06. INDEMNITIES. The User releases the
Commission, its directors, employees and agents, the Issuer,
its officers, directors, employees, agents, and attorneys
and the Governmental Unit, its officers, agents, attorneys,
employees and the members of its governing body (collec-
tively the "Indemnified Parties") from, and the Indemnified
Parties shall not be liable for, and the User agrees and
shall protect, indemnify, defend, and hold the Indemnified
Parties harmless from any and all liability, cost, expense,
damage or loss of whatever nature (including, but not
limited to, attorneys' fees, litigation and court costs,
amounts paid in settlement, and amounts paid to discharge
judgments) directly or indirectly resulting from, arising
out of, in connection with, or related to (i) the issuance,
offering, sale, or delivery of the Bonds, the Bond Resolu-
tion, the Trust Indenture, and this Agreement and the
obligations imposed on the Issuer hereby and thereby; or the
design, construction, installation, operation, use, occu-
pancy, maintenance, or ownership of the Project; (ii) any
written statements or representations made or given by the
User or any of its officers or employees, to the Indemnified
Parties, the Trustee, or any underwriters or purchasers of
any of the Bonds, with respect to the Issuer, the User, the
Project, or the Bonds, including, but not limited to,
statements or representations of facts, financial informa-
tion, or corporate affairs; (iii) damage to property or any
injury to or death of any person that may be occasioned by
any cause whatsoever pertaining to the Project; and (iv) any
loss or damage incurred by the Issuer as a result of viola-
tion by the User of the provisions of Sections 4.05 or 4.06.
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The provisions of the preceding sentence shall remain and be
in full force and effect even if any such liability, cost,
expense, damage or loss or claim therefor by any person,
directly or indirectly results from, arises out of, or
relates to or is asserted to have resulted from, arisen out
of, or related to, in whole or in part, one or more negli-
gent acts or omissions of the Issuer or the Governmental
Unit or its officers, directors, employees, agents, ser-
vants, or any other party acting for or on behalf of the
IsSuer or the Governmental Unit in connection with the
matters set forth in clauses (i) through (iv) of said
sentence.
Section 3.07. ISSUER'S LIMITED LIABILITY. It is
recognized that the Issuer's only source of funds with which
to carry out its commitments with respect to the Project and
this Agreement will be from the proceeds from the sale of
the Bonds; and it is expressly agreed that the Issuer shall
have no liability, obligation, or responsibility with
respect to this Agreement or the Project except to the
extent of funds available from such Bond proceeds. If, for
any reason, the proceeds from the sale of the Bonds are not
sufficient to pay all the Cost of the Project, the User
shall complete the Project and pay all such Cost from its
own funds, but it shall not be entitled to reimbursement
therefor unless additional Bonds are issued for such pur-
pose, or to any diminution in or postponement of any pay-
ments required to be made by the User hereunder.
11
ARTICLE IV
THE BONDS
Section 4.01. ISSUANCE OF BONDS. (a) In considera-
tion of the covenants and agreements set forth in this
Agreement, and to enable the Issuer to issue the Bonds to
carry out the intents and purposes hereof, this Agreement is
executed to assure the issuance of such Bonds, and to
provide for the due and punctual payment by the User to the
Trustee of the Installment Loan Payments, the Liquidated
Damages and certain other payments. The User shall make the
Installment Loan Payments, the Liquidated Damages Payments
and certain other payments for the benefit of each series or
issue of Bonds, to the Trustee for deposit into the Debt
Service Fund as provided in each Bond Resolution.
(b) Simultaneously with the authorization of this
Agreement by the Board of Directors, such Board has adopted
the Initial Bond Resolution. The User hereby approves the
Initial Bond Resolution, including the Trust Indenture
authorized therein. Each Bond Resolution authorizing addi-
tional Bonds shall be subject to the written approval of the
Approving Officer and the provisions of any such Bond
Resolution shall not be binding or effective upon the User
unless and until such approval is given. It is hereby
agreed that the foregoing approval of the Initial Bond
Resolution and the Trust Indenture, and any approval of any
Bond Resolution authorizing the issuance of additional Bonds
constitutes the acknowledgment and agreement of the User
that such Bonds, when issued and delivered as provided in
such Bond Resolution, will be issued in accordance with and
in compliance with this Agreement, notwithstanding any other
provisions of this Agreement or any other contract or
agreement to the contrary. Any Bondholder is entitled to
rely fully and unconditionally on any approvals. Notwith-
standing any provisions of this Agreement or any other
contract or agreement to the contrary, the User's approval
of any Bond Resolution (including the Trust Indenture
authorized by the Initial Bond Resolution), shall be the
User's agreement that all covenants and provisions in such
Bond Resolution and the Trust Indenture affecting the User
shall, upon the delivery of such Bonds and the Trust Inden-
ture, become unconditional, valid, and binding covenants and
obligations of the User so long as said Bonds and the
interest thereon are outstanding and unpaid. Particularly,
the obligation of the User to make, promptly when due, all
Installment Loan Payments, Liquidated Damages Payments, and
other payments specified in each Bond Resolution and the
Trust Indenture shall be absolute and unconditional, and
said obligation may be enforced as provided in each Bond
Resolution and the Trust Indenture, regardless of any other
12
provisions of this Agreement or any other contract or
agreement to the contrary. Upon the request of the User,
and only upon its request, the Issuer may, when, in the
opinion of the Issuer, it becomes necessary or advisable,
authorize and use its best efforts to sell and deliver
additional Bonds, in one or more series or issues, in aggre-
gate principal amounts sufficient to pay the Cost of the
Project.
Section 4.02. REFUNDING OF BONDS. After the issuance
of any Bonds, the Issuer shall not refund any of the Bonds
or change or modify the Bonds in any way, except as provided
for in the Bond Resolution, without the prior written
approval of the Approving Officer; nor shall the Issuer
redeem any Bonds prior to their scheduled maturities, or
change or modify any Bond Resolution, without the prior
written approval of the Approving Officer, unless such
redemption is required by a Bond Resolution.
Section 4.03. REDEMPTION OF BONDS. Provision shall be
made in each Bond Resolution for the redemption of Bonds
prior to maturity, under such terms and conditions as shall
be set forth therein. The redemption of any outstanding
Bonds prior to maturity at any time shall not relieve the
User of its unconditional obligation to pay each remaining
Installment Loan Payment, Liquidated Damages Payment, and
other payment as specified in any Bond Resolution or the
Trust Indenture. The User also shall comply with and be
bound by all provisions of this Agreement and of each Bond
Resolution and the Trust Indenture with respect to the
mandatory and optional redemption of Bonds.
Section 4.04. INSTALLMENT LOAN PAYMENTS AND OTHER
PAYMENTS. (a) Payment of all Installment Loan Payments,
Liquidated Damages Payments and other payments shall be made
and deposited as required by each Bond Resolution and the
Trust Indenture including all such payments which may come
due because of the acceleration of the maturity or maturi-
ties of any Bonds upon default, or otherwise, under the
provisions of the Trust Indenture. If any available funds
in excess of current requirements are held on deposit in the
Debt Service Fund at the time payment of any Installment
Loan Payment, Liquidated Damages Payment, or other payment
is due, such payment may be reduced by the amount of the
funds so held on deposit. The User shall have the right to
prepay all or a portion of any Installment Loan Payment at
any time. Any such prepayment by the User shall not relieve
it of liability for each remaining Installment Loan Payment,
Liquidated Damages Payment, or other payment as provided in
this Agreement and each Bond Resolution and the Trust
Indenture.
13
(b) Recognizing that the Installment Loan Payments,
Liquidated Damages Payments, and other payments will be the
Issuer's sole source for the payment and performance of its
obligations to the Trustee, any Paying Agent and the Bond-
holders under each Bond Resolution and the Trust Indenture,
when any Bonds are delivered, the User shall be uncondition-
ally obligated to make and pay, or cause to be made and
paid, each Installment Loan Payment, Liquidated Damages
Payment, or other payment regardless of whether or not the
User actually acquires or completes the Project, or whether
or not the User actually approves, purchases, receives,
accepts, or uses the Project; and such payments shall not be
subject to any abatement, set-off, recoupment, or counter-
claim; and the Bondholders shall be entitled to rely on this
agreement and representation, notwithstanding any provisions
of this Agreement or any other contract or agreement to the
contrary, and regardless of the validity of, or the perform-
ance of, the remainder of this Agreement or any other
contract or agreement.
Section 4.05. NO ARBITRAGE. The Issuer and the User
hereby covenant with each other and with the Bondholders
that they will make no use of the direct or indirect pro-
ceeds of the Bonds at any time which will cause the Bonds to
be arbitrage bonds within the meaning of Section 103(c) of
the Code or the Regulations pertaining thereto; and by this
covenant the Issuer and the User are obligated to comply
with the requirements of the aforesaid Section 103(c) and
the pertinent Regulations.
Section 4.06. TAX-EXEMPT STATUS OF INTEREST ON THE
BONDS AND MANDATORY REDEMPTION. (a) The Issuer covenants
that it shall, prior to the issuance of the Bonds, duly
elect to have the provisions of Section 103(b)(6)(D) of the
Code apply to such issue, and such election shall be made in
accordance with the applicable Regulations. The User cove-
nants that it shall furnish to the Issuer whatever informa-
tion is necessary for the Issuer to make any such election
and the User shall file with the Internal Revenue Service
such supplemental statements and other information as are
required by the applicable Regulations with respect to all
capital expenditures made, paid, or incurred by or on behalf
of the User or any person related to the User, within the
meaning of Section 103(b)(6)(C) of the Code, in the Project
Location, and in any other political jurisdiction contiguous
thereto with respect to any facilities contiguous to or
integrated with any facilities in the Project Location,
within the meaning of Sections 1.103-10(b)(2)(ii)(e) and
1.103-10(d) (2)(i) of the Regulations (collectively the
"Project Area").
14
(b) The User hereby covenants that (i) substantially
all the proceeds (within the meaning of Section 103(b)(6) of
the Code) from the sale of the Bonds will be used and
expended for amounts paid or incurred after the Inducement
Date for the acquisition, construction, reconstruction, or
improvement of land or property of a character subject to
the allowance for depreciation under the Code, and (ii)
except as otherwise set forth in a certificate or statement
furnished to the Issuer and its Bond Counsel prior to the
issuance of Bonds, the acquisition, construction, recon-
struction, or improvement of the Project did not begin
before the Inducement Date, nor was any work performed or
any costs paid or incurred by the User or any other entity
in connection with such acquisition, construction, recon-
struction, or improvement before the Inducement Date.
(c) The User represents (i) that all of the proceeds
of the Bonds are to be used with respect to the Project,
which will be located wholly within the Governmental Unit;
(ii) that, except for any person related to the User within
the meaning of Section 103(b)(6)(C) of the Code, the User
will be the only principal user of the Project within the
meaning of Section 103(b)(6) of the Code; and (iii) that,
except for the Bonds, there will not be outstanding on the
date of delivery of the Bonds any obligations of any state,
territory, or possession of the United States, or any poli-
tical subdivision of the foregoing or of the District of
Columbia constituting "exempt small issues" within the
meaning of Section 1.103-10 of the Regulations, the proceeds
of which have been or are to be used primarily with respect
to facilities located in the Project Location, or in any
contiguous political jurisdiction with respect to any
contiguous or integrated facilities, and which are to be
used principally by the User (including any person related
to the User within the meaning of Section 103(b)(6)(C) of
the Code).
(d) The User further covenants and represents that it
has not made, paid, or incurred, and will not make, pay, or
incur any capital expenditures which would cause the
interest on the Bonds to become subject to federal income
taxes pursuant to the provisions of Section 103(b) of the
Code. The User further covenants that it has not taken any
action or permitted any action to be taken, and that it will
not take any action or permit any action to be taken, which
would result in a Determination of Taxability, as hereinaf-
ter defined, and that the User has not failed to take and
will not fail to take any action required to prevent the
occurrence of such Determination of Taxability.
(e) The User acknowledges that the capital expendi-
tures referred to in the preceding paragraphs include all
15
capital expenditures within the Project Area and all capital
expenditures incurred elsewhere relating to the Project,
including, without limitation, research and development
costs, which may, under any rule or election under the Code,
be treated as a capital expenditure (whether or not such
expenditure is so treated).
(f) The User further covenants that it shall furnish
to the Issuer and its Bond Counsel, prior to the issuance of
the Bonds, a certificate or statement of the aggregate
amount of capital expenditures (other than those to be
financed from the proceeds of the Bonds) made, paid, or
incurred in the Project Area or made,.paid, or incurred
elsewhere with respect to the Project ("Included Capital
Expenditures") during the period beginning three years
before the date of delivery of such issue. The User cove-
nants that it will furnish to the Trustee (i) a copy of
supplemental statements required to be filed with the
Internal Revenue Service by Section 1.103-10 of the Regula-
tions listing by date and amount any Included Capital
Expenditures (other than those mentioned in Section
103(b)(6)(F) of the Code) during the three-year period
beginning as of the date of issuance of the Bonds, including
all such Included Capital Expenditures not listed on the
capital expenditure certificate filed with the Internal
Revenue Service prior to the issuance of the Bonds, and (ii)
within 30 days after it has made, paid, or incurred the
maximum amount of capital expenditures permitted under
Section 103(b)(6)(D) of the Code, a statement to that
effect. Such supplemental statements shall be filed with
the District Director of Internal Revenue or the Director of
the regional service center of the Internal Revenue Service
with whom the User's federal income tax return is required
to be filed on the due date prescribed for filing such
return (without regard to any extensions of time). Each
such supplemental statement shall set forth a description of
those capital expenditures which are capital expenditures
under Section 103(b)(6)(D)(ii) of the Code and shall take
into account facilities referred to in Section 103(b)(6)(E)
of the Code in computing such capital expenditures. This
covenant shall survive the termination of this Agreement.
(g) The User covenants that a Determination of Tax-
ability shall not occur, whether or not as a result of any
action or inaction by the User.
(h) A "Determination of Taxability" as used herein,
and in the Initial Bond Resolution and in the Form of Bond
included therein shall mean any of the following:
(i) It is determined (in an opinion of Bond
Counsel) that interest paid in respect of a Bond
16
is includable for federal income tax purposes in
the gross income of a holder or former holder of a
Bond (other than the User, or a "substantial user"
or a "related person" as those terms are used in
Section 103 of the Code; or
(ii) The Internal Revenue Service issues a
"notice of deficiency" or similar notice to any
such holder or former holder assessing a tax in
respect of any interest on the Bonds; or
(iii) The Internal Revenue Service enters
into any settlement agreement with any holder or
former holder of any Bonds under which a tax,
penalty or interest in respect of any interest on
such Bonds is to be assessed.
(i) The User shall have no right to require any holder
or former holder of any Bond to contest or pursue any appeal
of, or have any communication with the Internal Revenue
Service concerning a Determination of Taxability or any
notice from .the Internal Revenue Service or any agent
thereof proposing that interest on the Bonds be taxable, and
no holder or former holder of any Bond shall have a duty to
make any such contest or pursue any such appeal or have any
such communication. In the event that a holder or former
holder of any Bond, in the exercise of his, her or its sole
discretion, does contest or appeal or have any communication
with the Internal Revenue Service concerning a Taxable Event
or a Determination of Taxability, or any notice from the
Internal Revenue Service or an agent thereof proposing that
interest on the Bonds be taxable, the holder or former
holder of the Bond shall retain full control over the
settlement or other disposition of any and all issues before
the Internal Revenue Service with respect to the Bonds.
(j) Should a Determination of Taxability occur, there
shall be a prompt mandatory redemption prior to maturity of
the entire outstanding and unpaid principal and accrued
interest of the Bonds, and the payment by the User to the
Bondholders of appropriate and sufficient agreed Liquidated
Damages Payments (for loss of a bargain and not as a pen-
alty) all as shall be provided for in, and in accordance
with the provisions of, each Bond Resolution. Such payment
of liquidated damages shall be a direct obligation of the
User to the Bondholders and shall be paid to the Trustee for
the benefit of such Bondholders during the term of this
Agreement and thereafter shall be paid by the User directly
to such Bondholders.
Section 4.07. PAYMENTS TO ISSUER. At the time of
delivery of each series or issue of Bonds, and from the
17
proceeds of the sale and delivery of such Bonds, there shall
be paid all of the fees, expenses and costs required to be
so paid by the Issuer's local regulations and policies.
Also, the User agrees to pay directly to the Issuer such
other amounts at the time and in the manner required by the
Issuer's local regulations.
18
ARTICLE V
COVENANT AND REMEDIES
Section 5.01. COVENANT. The User unconditionally
agrees and covenants with the Issuer and the Trustee that it
will pay, or cause to be paid, when due, each Installment
Loan Payment, Liquidated Damages Payment, and other payment
required and prescribed to be paid by it pursuant to each
Bond Resolution. The User further unconditionally agrees
and covenants to pay all reasonable expenses and charges,
legal or otherwise (including court costs and attorneys'
fees), paid or incurred by the Issuer and the Trustee in
realizing upon any of the said payments to be made by the
User or in enforcing the provisions of this Agreement or any
Bond Resolution or the Trust Indenture.
Section 5.02. TRUSTEE AND REMEDIES. (a) The User is
advised and recognizes that the Issuer will assign all of
its right, title, and interest in and to all the Installment
Loan Payments, Liquidated Damages Payments, and certain
other payments, required to be made pursuant to this Agree-
ment, and the right to receive and collect same, to the
Trustee. The Trustee, or the Bondholders to the extent
provided in the Bond Resolution and the Trust Indenture, may
enforce the obligations of the User under this Agreement,
the Bond Resolution, and the Trust Indenture in the manner
provided in the Trust Indenture, without the necessity of
making the Issuer a party.
(b) In the event of a default in the payment of any
Installment Loan Payment, Liquidated Damages Payment, or
other payment, or in the performance of any agreement or
covenant contained herein or in any Bond, any Bond Resolu-
tion, or the Trust Indenture, such payment and performance
may be enforced by mandamus or by the appointment of a
receiver in equity with power to charge and collect Install-
ment Loan Payments, Liquidated Damages Payments, and other
payments and to apply such revenues in accordance with this
Agreement, the Bonds, each Bond Resolution, and the Trust
Indenture.
Section 5.03. GENERAL PROVISIONS. (a) The terms of
this Agreement may be enforced as to one or more breaches
either separately or cumulatively.
(b) No remedy conferred upon or reserved to the
Issuer, the Trustee, or the Bondholders in this Agreement is
intended to be exclusive of any other available remedy or
remedies, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy now or
hereafter existing at law or in equity or by statute. No
19
delay or omission to exercise any right or power accruing
upon any default, omission, or failure of performance
hereunder shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right and
power may be exercised from time to time and as often as may
be deemed expedient. In the event any provision contained
in this Agreement should be breached by the User and
thereafter duly waived, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive
any other breach of this Agreement. No waiver by either
party of any breach by the other party of any of the
provisions of this Agreement shall be construed as a waiver
of any subsequent breach, whether of the same or of a
different provision of this Agreement.
(c) Headings of the Articles and Sections of this
Agreement have been inserted for convenience of reference
only and in no way shall they affect the interpretation of
any of the provisions of this Agreement.
(d) This Agreement is made for the exclusive benefit
of the Issuer, the Trustee, the Bondholders, and the User,
and their respective successors and assigns herein permit-
ted, and not for any other third party or parties; and
nothing in this Agreement, expressed or implied, is in-
tended to confer upon any party or parties other than the
Issuer, the Trustee, the Bondholders, and the User, and
their respective successors and assigns herein permitted,
any rights or remedies under or by reason of this Agreement.
(e) The validity, interpretations, and performance of
this Agreement shall be governed by the laws of the State of
Texas.
Section 5.04. AMENDMENT OF AGREEMENT. No amendment,
change, addition to, or waiver of any of the provisions of
this Agreement shall be binding upon the parties hereto
unless in writing signed by the Approving Officer and the
President of the Board of Directors. In addition to amend-
ments for any other purpose, it is specifically understood
that this Agreement may be amended, if deemed necessary or
advisable by the User and the Issuer, to change the defini-
tion and scope of the term "Project", as used herein, so as
to permit the acquisition, construction, equipping, and
furnishing of other or additional facilities, at the same or
other locations, or improvements related to the Project,
pursuant to this Agreement and in accordance with applicable
laws, with the same effect as if they had been described
originally in Exhibit A hereto. Notwithstanding any of the
foregoing, it is covenanted and agreed, for the benefit of
the Bondholders and the Trustee, that (without the concur-
rence of all of the Bondholders and the Trustee) the
20
provisions of this Agreement shall not be amended, changed,
added to, or waived in any way which would relieve or
abrogate the obligations of the User to make or pay, or
cause to be made, or paid, when due, all Installment Loan
Payments, Liquidated Damages Payments, or other payments
with respect to any then outstanding Bonds in the manner and
under the terms and conditions provided herein and in any
Bond Resolution or the Trust Indenture, or which would
materially change or affect Sections 4.04, 4.05, 4.06, 6.01,
or 6.02.
21
ARTICLE VI
SPECIAL COVENANTS
Section 6.01. PARTNERSHIP EXISTENCE. The User agrees
that during the term of this Agreement it will maintain its
existence as a general partnership under the laws of the
State of Texas, and will not terminate or otherwise dispose
of all or substantially all of its assets. It is understood
that Exeter Investment Company and Luxury Lodges, Inc.,
partners in the User, will be permitted to sell 10% each of
their ownership in the User to their employees.
Section 6.02. ASSIGNMENT. The User shall not assign
its interest in this Agreement or any of its rights or
obligations hereunder except as specifically provided in
this Agreement. The User may assign its interest in this
Agreement to another party provided that the User shall
remain and be primarily responsible and liable for all of
its obligation hereunder, including particularly the making
of all payments required hereunder, when due.
Section 6.03. FINANCIAL REPORTS. The User shall have
annual financial statements made by its regular independent
certified public accountants, and shall furnish the Trustee
either a copy of such financial statements within 90 days
after the end of the fiscal year for which such financial
statements were made. In addition, said statements shall be
accompanied by a review opinion of said certified public
accountants that said financial statements so furnished
fairly present the financial condition of the User.
Section 6.04. TERM OF AGREEMENT. The term of this
Agreement shall be from the date hereof until all payments
required to be made by the User pursuant hereto shall have
been made, provided, however, that the provisions of Sec-
tions 3.06, 4.04, 4.05 and 4.06 shall survive the termina-
tion of this Agreement and shall continue in effect regard-
less of the termination of this Agreement.
Section 6.05. TERMINATION. This Agreement may be
terminated by mutual agreement at any time prior to the
delivery of and payment for any Bonds. However, if any
Bonds have been issued and delivered, the term of this
Agreement shall be as set forth in Section 6.04, and this
Agreement may not and shall not be sooner terminated by
either or both parties hereto.
Section 6.06. NOTICES. Any notice, request, or other
communication under this Agreement shall be given in writing
and shall be deemed to have been given by either party to
the other party upon either of the following dates:
22
(a) One business day after the date of the mailing
thereof, as shown by the post office receipt, if mailed to
the other party hereto by registered or certified mail at
the applicable address as follows:
Corpus Christi Industrial
Development Corporation
Attention: President
302 South Shoreline
P. 0. Box 9271
Corpus Christi, Texas 78408
Master Host Inn - Sandy Shores
Attention: Stern Feinberg
3200 Surfside
Corpus Christi, Texas 78408
With copy to:
Exeter Investment Company
Attention: David Hill
P. 0. Box 2206
Lufkin, Texas 75901
or the latest address specified by such other party in
writing; or
(b) The date of the receipt thereof by such other
party if not so mailed by registered or certified mail.
Any notice, request, or other communication made or
given under this Agreement shall be given to the Trustee by
registered or certified mail at the applicable address as
follows:
RepublicBank Dallas, National Association
Attention: Corporate Trust Department
P. O. Box 2964
Dallas, Texas 75221
or the latest address specified by said Trustee in writing.
Section 6.07. SEVERABILITY. If any clause, provision,
or Section of this Agreement should be held illegal or
invalid by any court of competent jurisdiction, the invalid-
ity of such clause, provision, or Section shall not affect
any of the remaining clauses, provisions, or Sections hereof
and this Agreement shall be construed and enforced as if
such illegal or invalid clause, provision, or Section had
not been contained herein. In case any agreement or obliga-
tion contained in this Agreement should be held to be in
violation of law, then such agreement or obligation shall be
deemed to be the agreement or obligation of the Issuer and
23
the User, as the case may be, to the full extent permitted
by law.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed in multiple counterparts, each of
which shall be considered an original for all purposes, as
of the day and year first set out above.
CORPUS CHRISTI INDUSTRIAL
DEVELOPMENT CORPORATION
By
President, Board of Directors
ATTEST:
Secretary, Board of Directors
(SEAL)
24
MASTER HOST INN - SANDY SHORES
Luxury Lodges, Inc., Partner
By
Title
ATTEST:
Secretary
(SEAL)
ATTEST:
Exeter Investment Company, Partner
By
Title
Secretary
(SEAL)
25
Exhibit A
Description of the Project
The Project consists of the expansion of the existing
115 room hotel/restaurant facility. It involves the con-
struction of a six -story tower which will contain 139 new
guest rooms and suites adjacent to the present location at
3200 Surfside Blvd., Corpus Christi, Texas.
In addition to the new guest rooms, the tower will
house the new lobby/registration area, administrative
offices, gift shop, coffee shop, club and dining room and
meeting/banquet rooms seating 300 persons. A new kitchen
facility will service the new banquet rooms, coffee shop and
restaurant. An existing building will be completely reno-
vated and will contain an enclosed swimming pool and addi-
tional meeting facilities.
A-1
,
:
RESOLUTION
AUTHORIZING THE ISSUANCE OF
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
REVENUE BOND, SERIES 1982
AND THE EXECUTION OF
A TRUST INDENTURE
(MASTER HOST INN - SANDY SHORES PROJECT)
TABLE OF CONTENTS
(The Table of Contents is not a part of the Resolution
but is for convenience of reference only)
PAGE
Title 1
Recitals 1
Resolution 3
SECTION 1. DESIGNATION, AMOUNT, AND PURPOSE 3
OF THE BONDS
SECTION 2. DATE, DENOMINATION, NUMBERS, AND 3
MATURITIES OF THE BONDS
SECTION 3. INTEREST ON THE BONDS 3
SECTION 4. GENERAL CHARACTERISTICS OF BONDS 4
(a) In General 4
(b) Registration Books 4
(c) Payment of Registered Owner 5
(d) Notation of Prepayment 5
(e) Temporary Bonds 5
SECTION 5. FORM OF BONDS 6
SECTION 6. PLEDGE 16
SECTION 7. DEBT SERVICE FUND 16
(a) Establishment of Debt Service 16
Fund
(b) Accrued Interest 16
(c) Installment Loan Payments 17
(d) Liquidated Damages Payments 18
(e) Trustee, Registrar and Paying 18
Agent Payments
(f) Other Payments 19
(g) Redemption 19
(h) Payments from Debt Service 19
Fund
(i) Immediately Available Funds 20
(j) Investment of Funds 20
SECTION 8. SECURITY FOR FUNDS
SECTION 9. TBE USER'S PAYNENTS
PAGE
21
21
(a) Unconditional Obligation 21
(b) Prepayments 21
SECTION 10. ADDITIONAL PARITY BONDS 21
(a) Additional Bonds 21
(b) Amendments to Trust Indenture 23
Unnecessary
SECTION 11. SPECIAL COVENANTS 23
(a) Installment Loan Payments, 23
Liquidated Damages Payments and
Certain Other Payments Pledged
to Bonds Only
(b) Non -Encumbrance 23
(c) Performance by Issuer 24
(d) Certain Modifications 24
Prohibited
SECTION 12. BONDS ARE SPECIAL OBLIGATIONS 24
SECTION 13. AMENDMENTS 24
(a) Amendment with Consent of 24
Owners of 66 2/3% of Bonds
(b) Notice of Amendment 25
(c) Consent to Amendment 25
(d) Effect of Amendment 26
(e) Consent of Bondholders 26
(f) Ownership of Bonds 26
(g) Amendments Without Consent 27
SECTION 14. ESTABLISHMENT OF CONSTRUCTION FUND 27
(a) Deposit of Bond Proceeds into 27
Construction Fund
(b) Investment of Money in 27
Construction Fund
(c) Deposit of Accrued Interest, 28
Income, and Profits
PAGE
SECTION 15. PAYMENTS FROM CONSTRUCTION FUND 28
(a) Issuer's Administrative Overhead 28
Expenses and Other Costs
(b) Reimbursements for and Payment 28
of Cost of Project
(c) Reliance by Trustee 30
SECTION 16. SURPLUS CONSTRUCTION FLTNDS 30
(a) Disposition of Surplus Funds 30
(b) Disposition of Construction 30
Fund upon Acceleration and
Redemption
SECTION 17. DAMAGED, MUTILATED, LOST, STOLEN, OR 31
DESTROYED BONDS
(a) Replacement Bonds 31
(b) Application for Substitute 31
Bonds
(c) No Default Occurred 31
(d) Charge for Issuing Substitute 31
Bonds
(e) Authority for Issuing Substitute 31
Bonds
SECTION • 18. NO ARBITRAGE 32
SECTION 19. FINDINGS 32
SECTION 20. SALE OF THE BONDS 32
SECTION 21. TRUST INDENTURE 32
RESOLUTION AUTHORIZING THE ISSUANCE OF CORPUS CHRISTI
INDUSTRIAL DEVELOPMENT CORPORATION REVENUE BOND, SERIES
1982, AND THE EXECUTION OF A TRUST INDENTURE (MASTER
HOST INN - SANDY SHORES PROJECT)
lilt STATE OF TEXAS
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
WHEREAS, Corpus Christi Industrial Development Corpora-
tion (the "Issuer") is a nonstock, non-profit industrial
development corporation organized and existing under the
laws of the State of Texas, including particularly the
Development Corporation Act of 1979, as amended (Article
5190.6, V.A.T.C.S.) (the "Act"); and
WHEREAS, the Issuer is a duly constituted public
instrumentality of the City of Corpus Christi, Texas (the
"Governmental Unit"), a political subdivision of the State
of Texas, within the meanings of the regulations of the
United States Treasury Department (the "Regulations") and
the rulings of the Internal Revenue Service prescribed and
promulgated pursuant to Section 103 of the Internal Revenue
Code of 1954, as amended (the "Code"), and the Issuer is
functioning and acting solely on behalf of the Governmental
Unit; and
WHEREAS, a "Loan Agreement between Corpus Christi
Industrial Development Corporation and Master Host Inn -
Sandy Shores", dated as of May 1, 1982 (such agreement, as
amended from time to time, being hereinafter the "Agree-
ment"), has been or will be duly executed between the Issuer
andMaster Host Inn - Sandy Shores (the "User"); and
WHEREAS, the User is a joint venture organized and
existing under the laws of the State of Texas, and is fully
qualified to transact business in the State of Texas; and
WHEREAS, the Agreement, is hereby adopted by reference
for all purposes, with the same effect as if it had been set
forth in entirety in this bond resolution (this "Initial
Bond Resolution"); and
WHEREAS, the Agreement was executed to provide for the
acquisition, construction, equipping, and furnishing of a
project (as defined by the Act) and to provide a loan to the
User for such purpose; and
WHEREAS, this preamble and the trust indenture (the
"Trust Indenture") hereinafter set forth in this Initial
Bond Resolution shall constitute an integral part of this
Initial Bond Resolution; and
WHEREAS, the corporate trustee under the Trust Inden-
ture (the "Trustee") will have the duties and obligations
hereinafter provided; and
WHEREAS, the bonds authorized to be issued by this
Initial Bond Resolution (the "Bonds") are to be issued and
delivered pursuant to applicable laws, including the Act;
and
WHEREAS, the User and the Trustee have entered into a
Deed. of Trust (with Security Agreement and Assignment of
Rents and Leases) dated as of May 1, 1982 (the "Deed of
Trust"), providing further security for the payment of the
Installment Loan Payments, Liquidated Damages Payments and
certain other payments for the benefit of the owners of the
Bonds; and
WHEREAS, the User will have duly approved and agreed to
be bound by this Initial Bond Resolution (including the
Trust Indenture) prior to the delivery of the Bonds; and
WHEREAS, as provided in the Agreement, by such approval
of this Initial Bond Resolution (including the Trust Inden-
ture) the User will have agreed and acknowledged that the
Bonds, when issued, sold, and delivered as provided in this
Initial Bond Resolution, will be issued in accordance and
compliance with the Agreement, and that, upon the issuance,
sale, and delivery of the Bonds, and the execution and
delivery of the Trust Indenture, the User will be uncondi-
tionally obligated to the Issuer and the Trustee to make or
pay, or cause to be made or paid, without set-off, recoup-
ment, or counterclaim, to the Trustee the "Installment Loan
Payments" required by the Agreement and by this Initial Bond
Resolution (including the Trust Indenture) in amounts suffi-
cient to pay the principal of, redemption premium, if any,
and interest on the Bonds, when due, agreed liquidated
damages, if any, all fees and expenses of the Trustee and
Registrar and the paying agents for the Bonds, and all other
amounts required to be paid by the Agreement, this Initial
Bond Resolution, and the Trust Indenture, all as hereinafter
set forth; and
WHEREAS, for purposes of this Initial Bond Resolution,
the definitions of terms in the Agreement, the Deed of
Trust, and the Trust Indenture are hereby adopted, and the
terms given herein shall have the same meanings as such
terms are given in said Agreement, Deed of Trust, and Trust
Indenture unless a different meaning is given herein.
THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION THAT:
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Section 1. DESIGNATION, AMOUNT, AND PURPOSE OF THE
BONDS. The Issuer's bond designated and to be known as
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION REVENUE
BOND, SERIES 1982 (MASTER HOST INN - SANDY SHORES PROJECT)
(the "Bond" or the "Bonds") is hereby authorized to be
issued in the aggregate principal amount of $7,200,000 on
behalf of THE CITY OF CORPUS CHRISTI, TEXAS TO PAY PART OF
THE COST OF ACQUIRING, CONSTRUCTING, EQUIPPING, AND FURNISH-
ING, OR CAUSING TO BE ACQUIRED, CONSTRUCTED, EQUIPPED, AND
FURNISHED A PROJECT (THE "PROJECT") IN Jait, CITY OF CORPUS
CHRISTI, TEXAS, FOR MASTER HOST INN - SANDY SHORES (THE
"USER") FOR THE SPECIFIC PURPOSE OF THE PROMOTION AND
ENCOURAGEMENT OF EMPLOYMENT AND THE PUBLIC WELFARE.
Section 2. DATE, DENOMINATION, NUMBER, AND MATURITIES
OF THE BONDS. The Bond initially authorized hereby shall be
dated May 1, 1982, shall be issued and delivered in the form
of a single fully registered bond, without coupons, payable
in installments to the registered owner thereof, or its
registered assigns, all in the manner hereinafter provided,
with the Bond to be numbered R-1 and to be in the denomina-
tion and principal amount of $7,200,000 and initially
payable to
REPUBLICBANK DALLAS, NATIONAL ASSOCIATION,
DALLAS, TEXAS
The principal of said Bond to be payable in quarterly
installments on the dates and in the amounts as set forth in
the FORM OF BOND in Section 5.
Section 3. INTEREST ON THE BOND. (a) The Bond initi-
ally authorized hereby shall bear interest on the unpaid
balance of the principal amount thereof from the date of
delivery to the initial purchaser thereof (which date shall
be indicated by the Trustee in the Delivery Certificate
appearing on the Bond) to the scheduled due date, or date of
prepayment or redemption prior to the scheduled due date, of
the principal installments of the Bond, at the rate, and
calculated, as set forth in the FORM OF BOND. The interest
shall be payable on the dates and in the manner provided in
the FORM OF BOND set forth in Section 5.
(b) In substitution of the floating interest rate
specifically set forth in the FORM OF BOND in Section 5, on
any date conditioned upon the User's designating a purchaser
of the Bond in accordance with the FORM OF BOND in Section
5, the Issuer and the User may, by mutual agreement, and
approval thereof by Bond Counsel, fix the interest rate
borne by the Bond at a specific rate not to exceed a Net
Effective Interest Rate of 15% (as calculated pursuant to
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Article 717k-2, V.A.T.C.S. as it exists on the date of
issuance of the Bond); upon such agreement the Bond shall
bear interest at such fixed rate from the date of purchase
by such designated purchaser; the agreement to fix the
interest rate borne by the Bond shall be accomplished by an
amendment to this Initial Bond Resolution adopted by the
Issuer and agreed upon in writing by the User, the provi-
sions of Section 13 hereof notwithstanding, amending the
provisions of this Section 3, stating the rate of interest
to be borne by the Bond; upon the execution of any such
amendatory resolution the Bond shall be endorsed by the
Trustee to indicate the rate of interest to be borne by the
Bond thereafter.
Section 4. GENERAL CHARACTERISTICS. (a) In General.
The Bond initially authorized hereby shall be issued,. shall
be payable, may or shall be prepaid or redeemed prior to the
scheduled principal installment payment dates, may be trans-
ferred and assigned, shall have the characteristics, and
shall be signed and executed (and the Bond shall be sealed),
all as provided, and in the manner indicated, in the FORM OF
BOND set forth in Section 5. After the Bond has been
authorized to be issued by the Board of Directors of the
Issuer, and prior to the delivery of the Bond, the Trustee
shall authenticate the Bond by executing the Trustee's
Certificate of Authentication appearing on the Bond as
provided in Section 5. In addition, on the date of delivery
of the Bond to the initial purchaser thereof, the Trustee
shall fill in the date of delivery of the Bond in the
Delivery Certificate appearing on the Bond as provided in
Section 5.
(b) Registration Books. The Issuer shall keep or
cause to be kept at the principal corporate trust office of
the Trustee books for the registration and transfer of Bonds
(the "Bond Registration Books") and the Issuer hereby
appoints the Trustee as its registrar and transfer agent
(the "Registrar") to keep such books and make such
registrations and transfers under such reasonable
regulations as the Issuer and Registrar may prescribe; and
the Registrar will register or transfer as herein provided,
any Bonds upon presentation thereof at such office. The
User, and each Bondholder shall have the right to inspect
such Bond Registration Books during the normal business
hours of the Trustee upon giving reasonable notice.
Registration of the Bonds may be transferred only on
the Bond Registration Books upon surrender thereof by the
registered owner in person or by his duly authorized
attorney, by proper written instrument of transfer, in the
form and with guaranty of signatures satisfactory to the
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Registrar, duly executed by such owner or attorney. Upon
such surrender for transfer of registration, the Registrar
shall make notation of such transfer on the Bonds in the
Assignment section appearing thereon and in the Bond
Registration Books. Such transfers of registration shall be
made without charge to the owner of such Bonds, but any
taxes or other governmental charges required to be paid with
respect to the same shall be paid by the Bondholder
requesting such transfer of registration, as a condition
precedent to the exercise of such privilege.
The Trustee shall not be required to make transfers of
any Bond within ten (10) days prior to an interest payment
date or redemption date or subsequent to the date of mailing
of notice of redemption of such Bond or a portion thereof
(until after the date set for such redemption), anything in
such Bond to the contrary notwithstanding.
(c) Payment to Registered Owner. The person in whose
name any Bond shall be registered on the Bond Registration
Books may be deemed and treated as the absolute owner
thereof for all purposes of this Initial Bond Resolution and
the Trust Indenture whether or not such Bond shall be
overdue, and the Issuer, the Trustee, and the User shall not
be affected by any notice to the contrary; and payment of,
or on account of, the principal of, premium, if any, agreed
Liquidated Damages Payments, if any, and interest on any
such Bond shall be made only to such registered owner
thereof; but such registration may be changed as provided
herein. All such payments shall be valid and effectual to
satisfy and discharge the liability upon such Bond to the
extent of the sum or sums so paid.
(d) Notation of Prepayment. The Issuer hereby ap-
points the Trustee as the Paying Agent for the Bonds. Upon
the prepayment or partial redemption of any Bond, the
Trustee, as Registrar and Paying Agent, shall note in the
Prepayment Record appearing on such Bond the amount of such
prepayment or redemption, the date said payment was made and
the remaining unpaid principal balance of said Bond and
shall then have said entry signed by an authorized official
of the Trustee. The Trustee shall also record such informa-
tion in the Bond Registration Books, and the Trustee shall
also record in the Bond Registration Books all payments of
principal,installments on the Bonds when made on their
respective due dates.
(e) Temporary Bonds. Until 'Bonds in definitive form
are ready for delivery, the Issuer may execute, and upon its
request, the Trustee shall authenticate and deliver in lieu
of any thereof, and subject to the same provisions,
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limitations, and conditions, one or more printed,
lithographed, or typewritten Bonds in temporary form,
substantially of the tenor of the Bonds as provided in the
FORM OF BOND set forth in Section 5 and with appropriate
omissions, variations, and insertions. Such Bond or Bonds
in temporary form may be for such principal amount as the
Issuer may determine. Until exchanged for Bonds in
definitive form, such Bonds in temporary form shall be
entitled to the lien and benefit of this Initial Bond
Resolution and the Trust Indenture. The Issuer shall,
without unreasonable delay, prepare, execute, and deliver to
the Trustee, and thereupon, upon the presentation and
surrender of the Bond or Bonds in temporary form, Issuer
shall, without unreasonable delay, prepare, execute, and
deliver to the Trustee, and thereupon, upon the presentation
and surrender of the Bond or Bonds in temporary form, the
Trustee shall authenticate and deliver, in exchange
therefor, a Bond or Bonds in definitive form in authorized
denominations of the same maturity and interest rate for the
same aggregate principal amount as the Bond or Bonds in
temporary form surrendered. Such exchange shall be made by
the Issuer at its own expense and without making any charge
therefor. When and as interest is paid upon Bonds in
temporary form the fact of such payment shall be noted
thereon by the Registrar.
Section 5. FORM OF BOND. The form of the Bonds,
together with the forms of the various certificates and
forms to appear on the Bonds, shall be, respectively,
substantially as follows, with necessary and appropriate
variations, omissions, and insertions as permitted or
required by this Initial Bond Resolution:
FORM OF BOND
NO. R-1 $7,200,000
UNITED STATES OF AMERICA
STATE OF TEXAS
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
REVENUE BOND
SERIES 1982
(MASTER HOST INN- SANDY SHORES PROJECT)
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION (the
"Issuer"), being a nonstock, nonprofit industrial develop-
ment corporation organized and existing under the laws of
the State of Texas, including particularly the Development
Corporation Act of 1979, as amended (Article 5190.6,
V.A.T.C.S.) (the "Act"), and acting on behalf of the City of
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Corpus Christi, Texas, hereby promises to pay to Republic-
Bank Dallas, National Association, Dallas, Texas, or its
registered assigns, the aggregate principal amount of
SEVEN MILLION TWO HUNDRED THOUSAND DOLLARS
in installments, of $72,000 each commencing on September 1,
1984 and on the 1st day of each December, March, June and
September thereafter through March 1, .2007 with the final
installment of $648,000 due on June 1, 2007 and to pay
interest on the unpaid principal balance hereof from the
date of delivery hereof (which date appears in the Delivery
Certificate endorsed on this Bond) which interest (unless
and until otherwise fixed as hereinafter provided) shall be
based on the number of days actually elapsed at a per annum
rate determined daily on the basis of a 360 day year equal
to 65% of the Prime Rate (hereinafter defined) (the "Formula
Rate") as announced from time to time by RepublicBank
Dallas, National Association (the "Bank"), until the
principal hereof may become due and payable, and at a rate
of 15% per annum (based on a 365 or 366 day year, as
appropriate) on overdue principal, and overdue amounts of
liquidated damages, if any, and, to the extent legally
permissible, on overdue interest; provided however, that, on
any date, if the Formula Rate shall be such that the Net
Effective Interest Rate (as defined and calculated in
accordance with Article 717k-2, V.A.T.C.S., as it exists on
the date of issuance of the Bonds, the "Net Effective
Interest Rate") from the date of delivery of the Bonds to
such date shall exceed 15%, the Formula Rate shall be that
interest rate which produces a Net Effective Interest Rate
from the date of delivery of the Bonds to that date of 15%
and on each date thereafter, the Formula Rate shall be that
interest rate which produces a Net Effective Interest Rate
from the date of delivery of the Bonds to such date of 15%
until such future date as the Net Effective Interest Rate
from the date of delivery of the Bonds to such future date
is the same as it would have been but for this proviso. Any
change in the Prime Rate shall automatically and without
notice to the Issuer be effective for the purpose of chang-
ing the rate of interest which this Bond bears as of the
date of any such change. Provided, that interest payable on
this Bond, together with any other costs or considerations
that constitute interest under applicable law, shall not
exceed the maximum amount of interest ,permitted to be paid
on this Bond under applicable law. The interest to be paid
on this Bond on any date on which interest is payable on
this Bond shall be calculated by first determining the
amount of interest on the unpaid principal balance of this
Bond from time to time outstanding at the Formula Rate in
effect from time to time from the date of delivery of this
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Bond through the corresponding Calculation Date (hereinafter
defined) then deducting any interest previously paid on this
Bond to determine the amount of interest payable on such
interest payment date. The interest on this Bond is payable
on August 1, 1982 and monthly thereafter on the 1st day of
each month while this Bond is outstanding by check or draft
mailed to, or wire transfer to, the registered owner at its
address as it appears on the Bond Registration Books of the
Issuer kept by the Registrar (provided that in the alterna-
tive such payment may be made by any other method requested
in writing by the registered owner, subject to the approval
of the Trustee), in each case solely from the sources and in
the manner hereinafter described. Both principal and
interest are payable, without exchange or collection charges
in lawful money of the United States of America. For the
purposes of this Bond, "Prime Rate" shall be defined as the
rate announced from time to time by the Bank as of the close
of the business day as the Prime Rate of the Bank.
THE TRUSTEE (hereinafter defined) shall notify the
User, pursuant to the notice provisions of. the Agreement
(hereinafter defined), of the Prime Rate, the Formula Rate
and the total interest due on the balance of the principal
amount outstanding on the Bond (the "Interest Calculation")
on a date (the "Notice Date") no less than 5 days prior to
the next date (the "Payment Date") fixed for any payment of
interest or unpaid principal amount of the Bond which
Interest Calculation shall represent the full amount of
interest due on said Payment Date. 'The Interest Calculation
with respect to a particular Payment Date shall be made on a
date (the "Calculation Date") 10 days prior to such Payment
Date. Provided, however, with respect to the Payment Date
on which the User shall pay the entire outstanding principal
balance of this Bond both the Notice Date and the Calcula-
tion Date shall be the same as such Payment Date with the
Interest Calculation to be made on such Payment Date, and
the Trustee to provide the User with telephonic notice of
such Interest Calcuation. The final payment of principal on
this Bond shall be paid only upon surrender of this Bond to
the Trustee for cancellation.
THIS BOND is dated as of May 1, 1982 and was authorized
and issued in the aggregate principal amount of $7,200,000
pursuant to a resolution adopted by the Board of Directors
of the Issuer (the "Initial Bond Resolution") on behalf of
THE CITY OF CORPUS CHRISTI, TEXAS TO PAY PART OF THE COST OF
ACQUIRING, CONSTRUCTING, EQUIPPING, AND FURNISHING, OR
CAUSING TO BE ACQUIRED, CONSTRUCTED, EQUIPPED, AND FURNISHED
A PROJECT (THE "PROJECT") IN THE CITY OF CORPUS CHRISTI,
TEXAS, FOR MASTER HOST INN - SANDY SHORES (THE "USER") FOR
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THE SPECIFIC PURPOSE OF TBE PROMOTION AND ENCOURAGEMENT OF
EMPLOYMENT AND THE PUBLIC WELFARE.
ON ANY DATE, the unpaid principal installments of this
Bond are subject to optional prepayment or redemption and
may be prepaid or redeemed prior to their scheduled due
dates, by the Trustee at the option of the User, with funds
furnished by the User at a prepayment or redemption price
equal to the principal amount thereof plus accrued interest
thereon to the date of prepayment or redemption, and without
premium, upon written notice of the exercise of the option
to prepay or redeem delivered to the Trustee by the User not
later than the 45th day prior to the date of prepayment or
redemption. Such unpaid principal installments may be so
prepaid or redeemed as a whole on any date, or in part on
any interest payment date (and, if in part, such install-
ments shall be prepaid or redeemed in inverse chronological
order of their scheduled due dates, and in amounts not less
than all of an unpaid principal installment). Provided
further any prepayment or redemption of any presentation of
this Bond to the Trustee who shall make notation of such
prepayment or redemption in the Prepayment Record endorsed
on this Bond.
ON ANY DATE ON AND AFTER MARCH 1, 1987, the Bond is
subject to mandatory redemption by the Trustee, with funds
provided by the User upon receipt by the Trustee of 180 days
written notice from the initial registered owner only of the
Bond, that said owner as the current owner of the Bond
intends to exercise its right, hereby granted, to put the
Bond to the Trustee for redemption at a price equal to the
principal amount thereof plus accured interest thereon to
the date of redemption, and without premium.
ON ANY DATE prior to the mandatory redemption date
described in the preceding paragraph, the User may furnish
evidence to the Trustee of a binding commitment on the part
of a purchaser to buy the Bond under the terms of which said
purchase is to be consummated on or prior to said mandatory
redemption date. By the purchase and acceptance of this
Bond, the initial registered owner hereof agrees to enter
into a timely, binding commitment to sell in accordance with
the terms of this paragraph and to sell this Bond to such
purchaser as the User may designate at a price equal to the
unpaid principal installments hereof plus accrued interest
hereon to the date of such sale, and without premium.
Pursuant to Section 3(b) of the Initial Bond Resolu-
tion, the interest rate borne by the Bond may, upon the
purchase of the Bond by a designated purchaser as provided
for in the immediately preceding paragraph hereof, be fixed
9
at a fixed interest rate not to exceed a Net Effective
Interest Rate of 15%. Any such fixing of the interest rate
shall be accomplished by an amendment to the Initial Bond
Resolution mutually agreed to by the Issuer and User solely,
any other provision of this Bond or the Initial Bond Reso—
lution to the contrary notwithstanding. Upon the execution
of any such amendatory resolution, the Trustee shall endorse
hereon the interest rate to be borne by the Bond thereafter.
ON ANY DATE, the unpaid principal installments of this
Bond are subject to mandatory prepayment or redemption, as a
whole, and shall be prepaid or redeemed prior to their
scheduled due dates, by the Trustee, with funds which shall
be furnished by the User, on the earliest practicable date,
and in all events within sixty days, following the occur-
rence of a Determination of Taxability as defined and
provided for in the Agreement (hereinafter defined). The
prepayment or redemption price in such event shall be equal
to the unpaid principal amount of this Bond so prepaid or
redeemed, plus accrued interest to the date of prepayment or
redemption. In addition, there shall be due and owing an
additional amount calculated by subtracting (i) the amount
of interest paid or accrued on the Bond between the earliest
date (the "Taxable Date") from which interest paid in
respect of this Bond is determined to be includible for
federal income tax purposes in the gross income of the
holder of this Bond and the redemption date (the "Inclusion
Period") from (ii) the quotient of the amount of said
interest divided by one minus the Maximum Federal Corporate
Tax Rate (hereinafter defined); plus the amount of interest
or penalties which are payable by the holder of this Bond in
connection with the Determination of Taxability; plus the
reasonable costs and expenses incurred by the holder of this
Bond and the Trustee in connection with the Determination of
Taxability, with all such additional amounts being the
agreed liquidated damages (for loss of a bargain and not as
a penalty) which the owner of this Bond will be due, and
which shall be a direct obligation of the User. "Maximum
Federal Corporate Tax Rate" is defined to mean the maximum
rate of income taxation to which a corporation is subject
under the Internal Revenue Code of 1954, as amended, as in
effect from time to time. Any change in the Maximum Federal
Corporate Tax Rate which applies to the Inclusion Period
shall automatically be reflected in the calculation of
agreed liquidated damages.
IN ADDITION, if there shall be a Determination of
Taxability, the User shall be obligated to, and promptly
shall, pay an additional amount to the Trustee for the sole
benefit of (i) any prior registered owner of this Bond, if
this Bond was transferred prior to the mandatory redemption
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dated described in the preceding paragraph or (ii) any
registered owner of this Bond with respect to principal
installments which were paid, prepaid or redeemed during the
Inclusion Period. Such payment shall be sufficient in
aggregate to pay in respect of this Bond or principal
installments hereof the amount the owner thereof would have
received as agreed liquidated damages if, and assuming that,
the aforesaid mandatory redemption date had occurred on the
actual date of payment, prepayment, transfer or redemption
of this Bond or portion hereof. The Trusee shall pay such
additional amount to each such owner or prior owner during
the applicable period, as shown by the Bond Registration
Books.
ON ANY DATE, the unpaid principal installments of this
Bond are subject to prepayment or redemption, and may be
prepaid or redeemed prior to the scheduled due dates by the
Trustee, in inverse chronological order of their scheduled
due dates (in the denominations of $1,000 or any integral
multiple thereof), at a prepayment or redemption price equal
to the principal amount thereof to be prepaid or redeemed
plus accrued interest thereon to the date of prepayment or
redemption, and without premium, with and to the extent of
any surplus funds remaining in the Construction Fund
(created by the Initial Bond Resolution) after the
completion of the Project, as provided and required by
Section 16 of the Initial Bond Resolution.
THE AGREEMENT provides that any provision for any
payment contained in the Agreement or this Bond shall be
held to be subject to reduction to the amount allowed under
the applicable usury laws of the State of Texas and the
United States of America, as now or hereafter construed by
the courts having jurisdiction, and it is agreed by the
Issuer and the owner of this Bond that in no event shall
usury be paid or collected with respect to this Bond.
AT LEAST 30 DAYS PRIOR to the date fixed for any pre-
payment or redemption of the unpaid principal installments
of this Bond, the Trustee shall cause a written notice of
such redemption to be mailed to the registered owner of this
Bond addressed to such owner at the address appearing on the
Bond Registration Books. By the date fixed for any such
prepayment or redemption, due provision shall be made by the
User with the Trustee and the Paying Agent for the payment
of the principal amount of this Bond which is to be prepaid
or redeemed, plus accrued interest thereon to the date fixed
for prepayment or redemption, plus any required prepayment
or redemption premium, and any other amounts due the owner
of this Bond. If such written notice of prepayment or
redemption is given and if due provision for payment of the
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redemption price is made, all as provided above, the unpaid
principal installments of this Bond which are to be prepaid
or redeemed thereby automatically shall be deemed to have
been prepaid or redeemed prior to their scheduled due dates,
and they shall not bear interest after the date fixed for
prepayment or redemption, and they shall not be regarded as
being outstanding except for the right of the owner thereof
to receive the redemption price from the Paying Agent out of
the funds provided for such payment. Upon presentation of
this Bond to the Paying Agent, such unpaid principal
installments which are to be prepaid or redeemed, shall be
paid at the redemption price.
IF THE DATE for the payment of the principal of or
interest on this Bond shall be a Saturday, Sunday, a legal
holiday, or a day on which banking institutions in the city
where the Paying Agent is located are authorized by law or
executive order to close, then the date for such payment
shall be the next succeeding day which is not such a
Saturday, Sunday, legal holiday, or day on which banking
institutions are authorized to close; and payment on such
date shall have the same force and effect as if made on the
original date of payment.
IT IS HEREBY CERTIFIED AND COVENANTED that this Bond
has been duly and validly authorized, issued, and delivered;
that all acts, conditions, and things required or proper to
be performed, exist, and be done precedent to or in the
authorization, issuance, and delivery of this Bond have been
performed, existed, and been done in accordance with law;
that this Bond is a special revenue obligation of the
Issuer, and that the principal of and interest on this Bond
are payable from and secured by a first lien on and pledge
and assignment of the payments designated as "Installment
Loan Payments", "Liquidated Damages Payments" and certain
other payments to be made or paid, or caused to be made or
paid, to the Trustee, pursuant to the Initial Bond Resolu-
tion, the Trust Indenture and the "Loan Agreement between
the Corpus Christi Industrial Development Corporation and
Master Host Inn - Sandy Shores", dated as of May 1, 1982
(such Loan Agreement, as amended from time to time, being
herein the "Agreement"). The User, a Texas joint venture,
is unconditionally obligated to make or pay, or cause to be
made or paid, without set-off, recoupment, or counterclaim,
to the Trustee each such Installment Loan Payment for
deposit into the Debt Service Fund created for the benefit
of the owners of the Bonds by the Initial Bond Resolution,
in aggregate amounts sufficient to pay and redeem, and
provide for the payment and redemption of, the principal of
and interest on this Bond, and to pay all other amounts
required by the Agreement, the Initial Bond Resolution, and
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the Trust Indenture when due, subject to and as required by
the provisions of the Agreement, the Initial Bond Resolu-
tion, and the Trust Indenture.
THIS BOND is secured by a Trust Indenture dated as of
May 1, 1982 (the "Trust Indenture"), whereunder RepublicBank
Dallas, National Association, or its successor, as Trustee,
is custodian of the Debt Service Fund and is obligated to
enforce the rights of the owner of this Bond and to perform
other duties in the manner and under the conditions stated
in the Trust Indenture. In case an "Event of Default", as
defined in the Trust Indenture, shall occur, the unpaid
principal installments of this Bond may be declared to be
due and payable immediately upon the conditions and in the
manner provided in the Trust Indenture. This Bond is addi-
tionally secured by a Deed of Trust and Security between the
User and the Trustee (the "Deed of Trust") relating to
certain property of the User pledged to secure the payment
of this Bond. Reference is hereby made to the Initial Bond
Resolution, the Trust Indenture, the Deed of Trust, and the
Agreement for additional provisions with respect to the
nature and extent of the security, the rights, duties, and
obligations of the User, the Issuer, the Trustee, and the
owner of this Bond, the terms upon which this Bond is issued
and secured, and the modification of any of the foregoing.
THE ISSUER has reserved the right, subject to the
restrictions stated in the Initial Bond Resolution, to issue
additional parity revenue bonds ("Additional Bonds") which,
when issued and delivered, shall be payable from the Debt
Service Fund, and shall be payable from and secured by a
first lien on and pledge of Installment Loan Payments,
Liquidated Damages Payments and certain other payments
pursuant to the Agreement and entitled to the benefits of
and secured by the Trust Indenture, and the Deed of Trust in
the same manner and to the same extent as, and be on a
parity with, this Bond and all then outstanding Additional
Bonds.
THE ISSUER also has reserved the right to amend the
Initial Bond Resolution and the Trust Indenture, as provided
therein; and under some (but not all) circumstances amend-
ments thereto must be approved by the owners of 66 2/3% in
aggregate principal amount of this Bond then outstanding and
any Additional Bonds then outstanding.
THE OWNER HEREOF shall never have the right to demand
payment of this obligation out of any funds raised or to be
raised by taxation or from any source whatsoever except the
payments and amounts described in this Bond, the Initial
Bond Resolution, the Trust Indenture, the Agreement, and the
13
Deed of Trust. Except for the lien on and the assignment
and pledge of such property, payments, and amounts, no
property of the Issuer is encumbered by any lien or security
interest for the benefit of the owner of this Bond. Neither
the State of Texas, the City of Corpus Christi, Texas, nor
any other political corporation, subdivision, or agency of
the State of Texas, nor the Board of Directors of the
Issuer, either individually or collectively, shall be obli-
gated to pay the principal of this Bond, any premium or
payment with respect to—this Bond, or the interest hereon;
and neither the faith and credit, nor the taxing power, of
the State of Texas, the City of Corpus Christi, Texas, nor
any other political corporation, subdivision, or agency of
the State of Texas, is pledged to the payment of the princi-
pal of this Bond, any premium or payment with respect to
this Bond, or the interest hereon.
THIS BOND may be assigned and shall be transferred only
on the Bond Registration Books of the Issuer kept by the
Trustee, as Registrar, upon the terms and conditions set
forth in the Initial Bond Resolution, the Trust Indenture
and the Assignment provisions endorsed hereon. Such
transfers shall be without expense to the owner hereof, but
any taxes or other governmental charges required to be paid
with respect to the same shall be paid by the owner
requesting such transfer as a condition precedent to the
exercise of such privilege. The Trustee shall not be
required to make transfers of this Bond within ten (10) days
prior to an interest payment date or prepayment or
redemption date or subsequent to the date of mailing of
notice of prepayment or redemption of any principal
installments of this Bond, anything in this Bond to the
contrary notwithstanding. The registered owner of this Bond
may be deemed and treated by the Issuer, the Trustee, and
the User, 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 Issuer, the Trustee,
and the User shall not be affected by any notice to the
contrary.
THIS BOND shall not be valid or become obligatory for
any purpose or be entitled to any security or benefit under
the Trust Indenture, until the Trustee's Certificate of
Authentication hereon shall have been signed by the Trustee
and the Delivery Certificate hereon shall have been com-
pleted.
IN WITNESS WHEREOF, this Bond has been signed with the
manual or facsimile signatures of the President and the
14
Secretary of the Board of Directors of the Issuer, and the
official seal of the Issuer has been duly impressed, or
placed in facsimile, on this Bond.
Secretary, Board of Directors President, Board of Directors
(ISSUER'S SEAL)
FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Bond is the Bond initially issued under the pro-
visions of the within mentioned Agreement, Initial Bond
Resolution, and Trust Indenture.
REPUBLICBANK DALLAS, NATIONAL
ASSOCIATION, Trustee
By
Authorized Signature
FORM OF ASSIGNMENT
ASSIGNMENT
FOR VALUE RECEIVED, the registered owner of this Bond
last listed below sells, assigns, and transfers the within
Bond to the Assignee last listed below, and hereby autho-
rizes the transfer of this Bond on the Bond Registration
Books of the Trustee. Such assignment shall not be effec-
tive until such Assignee presents this Bond to the Trustee
for verification of such assignment and gives the Trustee
its address to which payments shall be made and the Trustee
makes notation of such Assignment below.
15
DATE OF REGISTERED SIGNATURE OF
ASSIGNMENT OWNER ASSIGNEE REGISTRAR
FORM OF DELIVERY CERTIFICATE
DELIVERY CERTIFICATE
THIS BOND was delivered to and paid for by the pur-
chaser hereof on
FORM OF PREPAYMENT RECORD
PREPAYMENT RECORD
Date Principal Remaining Name & Title of Signature of
of Prepayment or Principal Authorized Officer Authorized
Payment Redemption Balance Making Entry Officer
ENDORSEMENT AS TO INTEREST RATE
Pursuant to Section 3(b) of the Initial Bond
tion, the interest rate borne by this Bond shall be
from and after this day of
Resolu -
REPUBLICBANK DALLAS, NATIONAL
ASSOCIATION, Trustee
By
Authorized Officer
16
Section 6. PLEDGE. The Bonds and the interest thereon
are and shall be payable from and secured by a first lien on
and pledge and assignment of the payments designated as
Installment Loan Payments, Liquidated Damages Payments and
certain other payments to be made or paid, or caused to be
made or paid, to the Trustee by the User, pursuant and
subject to the terms and provisions of this Initial Bond
Resolution, the Trust Indenture, and the Agreement; and such
Installment Loan Payments, Liquidated Damages Payments and
certain other payments are further pledged and assigned
irrevocably to the establishment and maintenance of the Debt
Service Fund hereinafter created.
Section 7. DEBT SERVICE FUND. (a) Establishment of
Debt Service Fund. A separate and special trust fund to be
designated and known as the "Debt Service Fund" shall be
established by the Issuer with the Trustee for the benefit
of the owners of the Bonds pursuant to the Agreement and the
Trust Indenture, and maintained as provided in this Initial
Bond Resolution and the Trust Indenture, as long as any of
the Bonds, or interest thereon, is.outstanding and unpaid.
(b) Accrued Interest. Immediately after the delivery
of the Bond to the initial purchaser thereof, all accrued
interest, if any, received from the proceeds from the sale
and delivery of the Bond, shall be transferred by the
Trustee into the Debt Service Fund.
(c) Installment Loan Payments. The User shall make
or pay, or cause to be made or paid, to the Trustee, which
shall deposit into the Debt Service Fund, Installment Loan
Payments as follows:
(1) On or before each interest payment date as
provided in the FORM OF BOND set forth in Section
5, an amount which, together with any other
amounts then on deposit therein and available for
such purpose, will be sufficient to pay the
interest coming due on the Bond on each interest
payment date; and
(2) On or before each principal payment date as
provided in Section 2 and in the FORM OF BOND set
forth in Section 5, an amount which, together with
any other amounts then on deposit therein and
available for such purpose, will be sufficient to
pay the principal of the Bond scheduled to be paid
on each principal payment date; and
(3)
On or before any optional or mandatory prepayment
or redemption date as permitted or required in the
17
FORM OF BOND set forth in Section 5, an amount
which, together with any other amounts then on
deposit and available for such purpose, will be
sufficient to pay the prepayment or redemption
price (but not including any agreed liquidated
damages) specified therein; and
(4) On any date on which the Bonds are declared to be
.immediately due and payable pursuant to the Trust
Indenture, an amount which, together with any
other amounts then on deposit and available for
such purpose, will be sufficient to pay the prin-
cipal of all Bonds then outstanding and the
interest accrued thereon to such date.
In the event the User should fail to make or pay, or cause
to be made or paid, any of the required Installment Loan
Payments set forth in this Section, each such required
payment shall continue as an obligation of the User until
fully paid, and the User agrees to pay the same to the
Trustee, for the benefit of the owners of the Bonds, with
interest thereon, to the extent legally permissible, at the
rate of fifteen percent (15%) per annum (based on a 365 or
366 day year, as appropriate) from the date any such payment
was due until payment thereof.
(d) Liquidated Damages Payments. The User shall make
or cause to be made or paid, to the Trustee, which shall
deposit into a separate fund held for that purpose within
the Debt Service Fund, Liquidated Damages Payments (for loss
of a bargain and not as a penalty) as follows:
(1) Promptly after the occurrence of a
Determination of Taxability, resulting in a
mandatory prepayment or redemption of Bonds, an
amount which, together with any other amounts then
on deposit and available for such purpose, will be
sufficient to pay the agreed liquidated damages as
provided in the FORM OF BOND set forth in Section
5 due and owing with respect to the Bonds to be
prepaid or redeemed on such mandatory prepayment
or redemption date; and
(2) Promptly after the occurrence of a
Determination of Taxability, resulting in a
mandatory prepayment or redemption of Bonds, the
additional amount necessary to pay the agreed
liquidated damages as provided in the FORM OF BOND
set forth in Section 5 due and owing to the
registered owner or owners of the Bonds which were
paid, transferred, or redeemed, in whole or in
18
part, prior to such mandatory prepayment or
redemption as specified in the FORM OF BOND set
forth in Section 5.
In the event the User should fail to make or pay, or cause
to be made or paid, any of the required Liquidated Damages
Payments set forth in this Section, each such required
payment shall continue as an obligation of the User until
fully paid, and the User agrees to pay the same to the
Trustee, for the benefit of the owners of the Bonds, with
interest thereon, to the extent legally permissible, at the
rate of fifteen percent (15%) per annum (based on a 365 or
366 day year, as appropriate) from the date any such payment
was due until payment thereof.
(e) Trustee, Registrar and Paying Agent Payments.
Promptly after receipt of each statement and request for
payment, the User shall make or pay, or cause to be made or
paid, to the Trustee, which shall deposit into the Debt
Service Fund, Trustee, Registrar and Paying Agent Payments
in an amount equal to the charges of the Trustee for
performing the duties of Trustee and Registrar, and the
charges of the Paying Agent for the Bonds, as designated in
the FORM OF BOND set forth in Section 5, for paying or
redeeming principal installments of the Bonds, and paying
the interest thereon.
In the event the User should fail to make or pay, or
cause to be made or paid, any of the required Trustee,
Registrar, and Paying Agent Payments set forth in this
Section, each such required payment shall continue as an
obligation of the User until fully paid, and the User agrees
to pay the same to the Trustee, for the benefit of the
owners of the Bonds, with interest thereon, to the extent
legally permissible, at the rate of fifteen percent (15%)
per annum (based on a 365 or 366 day year, as appropriate)
from the date any such payment was due until payment
thereof.
(f) Other Payments. The User shall make or pay, or
cause to be made or paid, to the Trustee, which shall
deposit into the Debt Service Fund, payments (other than
those provided for in subsections (c), (d) and (e), above)
in an amount sufficient to pay, at the required time, all
other payments required to be paid by the User under the
terms of this Initial Bond Resolution, the Agreement or the
Trust Indenture.
In the event the User should fail to make or pay, or
cause to be made or paid, any of the required payments set
forth in this subsection, each such required payment shall
19
continue as an obligation of the User until fully paid, and
the User agrees to pay the same to the Trustee, for the
benefit of the owners of the Bonds, with interest thereon,
to the extent legally permissible, at the rate of fifteen
percent (15%) per annum (based on a 365 or 366 day year, as
appropriate) from the date any such payment was due until
payment thereof.
(g) Redemption. The Bonds initially authorized hereby
shall be subject to redemption, and may or shall be
redeemed, as specified in the FORM OF BOND set forth in
Section 5.
(h) Payments from Debt Service Fund. Except as other-
wise specifically provided in this Initial Bond Resolution
or the Trust Indenture, the Debt Service Fund shall be used
by the Trustee only to pay the principal of, and prepayment
or redemption premium, if any, agreed liquidated damages, if
any, and interest on the Bonds, when due, and the charges of
the Trustee, Registrar, and Paying Agent; and the Trustee
shall make available to the Paying Agent, out of the Debt
Service Fund, the amounts required to pay or redeem the
principal of and interest on the Bonds when due, and the
Trustee shall make all other payments as required by this
Initial Bond Resolution and the Trust Indenture.
(i) Immediately Available Funds. The User shall make
all Installment Loan Payments, Liquidated Damages Payments,
and other payments provided for herein, in funds that will
be immediately available and allow the Paying Agent to pay,
in lawful money of the United States of America, the
principal, interest, and other amounts with respect to the
Bonds, when due.
(j) Investment of Funds. Any money held as part of
the Debt Service Fund shall be invested or reinvested by the
Trustee, upon the written direction of the Approving Officer
in any obligations, including certificates of deposit. The
Trustee shall make no investments except as specifically
directed by the Approving Officer. The investments of the
Debt Service Fund shall be deemed to be a part of such Fund,
and, for the purpose of determining the amount of money in
such Fund, such investments shall be valued at their cost
or market value, whichever is lower. The income and
profits, including realized discount on obligations
purchased, received from such investments shall be deposited
in or credited to the Debt Service Fund, and any losses on
investments thereon shall be charged against the Debt
Service Fund. If at any time it shall become necessary that
some or all of the investments made with the moneys from
the Debt Service Fund be redeemed or sold to raise moneys
20
necessary to comply with the provisions of this Initial Bond
Resolution or the Trust Indenture, the Trustee shall,
without further authorization, effect such redemption or
sale, employing, in the case of a sale, any commercially
reasonable method of effecting the same. The Trustee shall
not be liable or responsible for any loss resulting from any
such investment or resulting from the redemption or sale of
any such investment as herein authorized; except that the
Trustee shall be liable for (1) any loss resulting from its
willful or negligent failure, within a reasonable time after
receiving the written direction from the Approving Officer
to make, redeem, or sell any investment in the manner
provided for herein, and (2) except for any redemption or
sale made pursuant to the next preceding sentence of this
paragraph, for any loss resulting from the making, redeem-
ing, or selling of any investment which was not authorized
by written direction of the Approving Officer. If the
Trustee is unable, after reasonable effort and within a
reasonable time, to make, redeem, or sell any such invest-
ment, it shall so notify in writing the Approving Officer
and thereafter the Trustee shall be relieved of all respon-
sibility with respect thereto. In the event of any such
loss, the User shall make additional deposits to restore
same if and to the extent required to enable the Trustee to
make all payments required to be made from the Debt Service
Fund, and such additional deposits shall constitute addi-
tional amounts of Installment Loan Payments.
Section 8. SECURITY FOR FUNDS. All uninvested money
in all Funds established pursuant to this Initial Bond
Resolution (including the Debt Service Fund and the Con-
struction Fund), shall be secured by the Trustee in such
manner and to such extent as is required of national banks
when acting in a fiduciary capacity.
Section 9. THE USER'S PAYMENTS. (a) Unconditional
Obligation. The User has covenanted in the Agreement, and,
by the approval of this Initial Bond Resolution, the User
further has unconditionally obligated itself and agreed,
regardless of and notwithstanding any provisions of the
Agreement, other than Sections 6.01 and 6.02 thereof relat-
ing to merger, consolidation, transfer of assets, and
assignment, and regardless of the provisions of any other
agreement or contract to the contrary, to make or pay, or
cause to be made or paid, without set-off, recoupment, or
counterclaim, the Installment Loan Payments, the Liquidated
Damages Payments, and certain other payments to the Trustee
in the amounts required by Sections 7(c), 7(d), 7(e) and
7(f) to be made into the Debt Service Fund, and to make such
payments on or before the dates specified in this Initial
Bond Resolution and the Trust Indenture; and said payments
21
by the User shall be and constitute the Installment Loan
Payments the Liquidated Damages Payments, and certain other
payments as contemplated and required by the Agreement.
Each Bondholder is and shall be entitled to rely uncondi-
tionally on the agreements, covenants, and representations
set forth in this Initial Bond Resolution and the Trust
Indenture.
(b) Prepayments. It is further understood that the
User may prepay all or any part of each Installment Loan
Payment, and any such prepayment, and any earnings thereon,
shall be applied by the Trustee to the payment of each
Installment Loan Payment; provided .that the prepayment or
redemption at any time of any unpaid principal installments
of the Bonds prior to their due dates, with funds from any
source (whether from Installment Loan Payments or
otherwise), shall not relieve the User of its obligation to
make or pay, or cause to be made or paid, each Installment
Loan Payment as specified in Section 9(a), when due with
respect to any remaining unpaid principal installments of
the Bonds.
Section 10. ADDITIONAL PARITY BONDS. (a) Additional
Bonds. The Issuer reserves the right, upon the request of
the User, to issue additional parity revenue bonds ("Addi-
tional Bonds") in any amounts, for any lawful purpose or
purposes, including the refunding of any outstanding Bonds.
Such Additional Bonds, along with the Bond authorized by
this Initial Bond Resolution, shall be considered,
constitute, and be "Bonds" as defined in, and for all
purposes of, the Agreement and the Trust Indenture.
Furthermore, for all purposes of this Initial Bond
Resolution, the term "Bonds" shall mean and include the Bond
authorized hereby and any Additional Bonds, unless the
context otherwise indicates. When issued and delivered such
Additional Bonds, the redemption premium, if any, agreed
liquidated damages, if any, and the interest thereon, shall
be payable from the Debt Service Fund, and shall be payable
from and secured by a first lien on and pledge and assign-
ment of Installment Loan Payments pursuant to the Agreement,
and secured by the Trust Indenture and the Deed of Trust in
the same manner and to the same extent as, and be on a
parity with, all then outstanding Bonds and Additional
Bonds. Such Additional Bonds may be issued in one or more
series or issues, in various principal amounts, maturing at
different times, bearing interest at different rates, be
payable in installments or otherwise be redeemable prior to
maturity, with or without redemption premium, on whatever
terms or prices, and may contain such other provisions as
may be provided in any Bond Resolution authorizing the
issuance of such Additional Bonds. It is provided, however,
22
that no series or issue of Additional Bonds shall be issued
unless:
(i) In the opinion of Bond Counsel (A) the
issuance of such Additional Bonds will not adversely
affect the exemption from federal income taxation of
the interest on the then outstanding Bonds and
Additional Bonds, or affect the validity of the then
outstanding Bonds or Additional Bonds and (B) such
Additional Bonds are secured in the same manner and to
the same extent as and are on a parity with all then
outstanding Bonds and Additional Bonds;
(ii) A certificate is executed by the President
and Secretary of the Board of Directors of the Issuer
to the effect that, to their best knowledge and belief,
no default or event of default exists in connection
with the Bonds or the Trust Indenture (or any amendment
or supplement thereto) or with any of the covenants or
requirements of this Initial Bond Resolution or the
Bond Resolutions (or any amendments or supplements
thereto) authorizing the issuance of all then
outstanding Bonds and Additional Bonds, and that the
Debt Service Fund contains the amount then required to
be on deposit therein;
(iii) The Bond Resolution authorizing the issuance
of such series or issue of Additional Bonds provides
for additional Installment Loan Payments, Liquidated
Damages Payments, and certain other payments to be
deposited into the Debt Service Fund in amounts
sufficient to pay all principal of, redemption premium,
if any, agreed liquidated damages, if any, and interest
on such Additional Bonds, together with all Trustee,
Registrar, and Paying Agent fees and expenses
attributable to such Additional Bonds;
(iv) The Approving Officer approves in writing the
Bond Resolution authorizing the issuance of such series
or issue of Additional Bonds, as required by the
Agreement;
(v) The principal and interest payment dates
during any year in which principal and interest on such
Additional Bonds are scheduled to be paid, are the same
for the Additional Bonds and the Bonds; and
(vi) The Texas Industrial Commission expressly
gives its prior approval to the issuance of such Addi-
tional Bonds.
23
(b) Amendments to Trust Indenture Unnecessary. It
shall not be necessary or required that the Trust Indenture
be amended or supplemented to cause any series or issue of
Additional Bonds to be secured by the Trust Indenture. All
that shall be necessary or required to cause any such Addi-
tional Bonds to be secured by the Trust Indenture is for the
Issuer to deliver, in addition to the documents required in
Section 10(a) to the Trustee a certified copy of the Bond
Resolution authorizing their issuance prior to the delivery
of such Additional Bonds.
Section 11. SPECIAL COVENANTS. The Issuer further
covenants as follows:
(a) Installment Loan Payments, Liquidated Damages
Payments and Certain Other Payments Pledged to Bonds Only.
Other than for the payment of the Bonds, as provided in this
Initial Bond Resolution and the Trust Indenture, the In-
stallment Loan Payments, Liquidated Damages Payments and
certain other payments have not in any manner been pledged
or assigned to the payment of any debt or obligation of the
Issuer;
(b) Non -Encumbrance. While any of the Bonds is out-
standing, the Issuer will not (except with respect to the
Bonds and any Additional Bonds and except as provided in the
Agreement, any Bond Resolution, or the Trust Indenture) in
any manner whatsoever create, assume, or suffer to exist,
directly or indirectly, any mortgage, lien, encumbrance,
pledge, or charge against the Debt Service Fund, the
Installment Loan Payments, the Liquidated Damages Payments
or certain other payments, the Construction Fund, or any
property or moneys deposited with or assigned to the
Trustee;
(c) Performance by Issuer. The Issuer will carry out
all of its covenants and obligations under this Initial Bond
Resolution; and the Issuer may be required to carry out such
covenants and obligations by all legal and equitable means,
including, but without limitation, actions for specific per-
formance and the use and filing of mandamus proceedings, in
any court of competent jurisdiction, against the Issuer, its
Board of Directors, and its officials and employees; and
(d) Certain Modifications Prohibited. The Issuer
covenants and agrees that it will not execute or permit the
execution of any contract or agreement, or terminate or
amend the Agreement, in any manner that would relieve or
abrogate the obligations of the User to make or pay, or
cause to be made or paid, when due, all Installment Loan
Payments, Liquidated Damages Payments, and other payments,
24
in the manner and to the extent required by the Agreement,
this Initial Bond Resolution, and the Trust Indenture, or
which would change or affect Sections 4.04, 4.05, 4.06, 6.01
and 6.02 of the Agreement without the written consent of all
of the Bondholders and the Trustee.
Section 12. BONDS ARE SPECIAL OBLIGATIONS. The Bonds
are and shall be special revenue obligations of the Issuer
payable solely from payments to be made under the Agreement,
this Initial Bond Resolution, the Deed of Trust, and the
Trust Indenture; and the Bondholders shall never have the
right to demand payment thereof or the interest thereon out
of funds raised or to be raised by taxation, or from any
source whatsoever other than the foregoing. The Bonds are
not and shall never be considered as obligations of the
State of Texas, the Governmental Unit, or any other politi-
cal subdivision or agency of the State of Texas, or of the
Board of Directors of the Issuer, either individually or
collectively.
Section 13. AMENDMENTS. (a) Amendment with Consent
of Owners of 66 2/3% of Bonds. Subject to approval in
writing by the Approving Officer of the User, the owners of
66 2/3% in aggregate principal amount of the then
outstanding Bonds shall have the right from time to time to
approve any amendment to any Bond Resolution, or to the
Trust Indenture (provided that the Trustee must approve any
amendment to the Trust Indenture), which may be deemed
necessary or desirable by the Issuer; provided, however,
that nothing herein contained shall permit or be construed
to permit the amendment, without the consent of the owner of
each of the then outstanding Bonds affected thereby, of the
terms and conditions of any Bond Resolution, the Bonds, or
the Trust Indenture, so as to:
(1). change the Debt Service Fund requirements,
interest payment dates, or the due date or dates,
or the maturity or maturities of the outstanding
Bonds;
(2) reduce the rate of interest borne by any of the
outstanding Bonds;
(3)
reduce the amount of the principal of, redemption
premium, if any, liquidated damages, if any, or
interest on the outstanding Bonds, or impose any
conditions with respect to such payments;
(4) modify the terms of payment of principal of,
redemption premium, if any, liquidated damages, if
any, or interest on the outstanding Bonds, or
25
(5)
impose any conditions with respect to such pay-
ments;
affect the rights of the owners of less than all
of the Bonds then outstanding;
(6) decrease the minimum percentage of the principal
amount of Bonds necessary for consent to any such
amendment; or
(7)
alter the obligations of the User to pay Install-
ment Loan Payments, Liquidated Damages Payments,
and other payments in the manner and to the extent
provided in the Agreement, the Bond Resolution,
and the Trust Indenture.
(b) Notice of Amendment. If at any time the Issuer
shall desire to amend any Bond Resolution, or the Trust
Indenture, under this Section, the Issuer shall file a copy
of the proposed amendment at the principal office of the
Trustee and shall cause notice of the proposed amendment to
be given in writing to each owner of the Bonds. Such notice
shall briefly set forth the nature of the proposed amendment
and shall state that a copy thereof is on file at the
principal office of the Trustee for inspection by all owners
of Bonds.
(c) Consent to Amendment. Whenever at any time not
less than 30 days, and within one year, from the date of the
service of written notice the Issuer shall receive an
instrument or instruments executed by the owners of at least
66 2/3% in aggregate principal amount of all Bonds then
outstanding, which instrument or instruments shall refer to
the proposed amendment described in said notice and shall
specifically consent to and approve such amendment, the
Issuer may adopt the amendatory resolution in substantially
the same form.
(d) Effect of Amendment. Upon the adoption of any
amendatory resolution pursuant to the provisions of this
Section, any such Bond Resolution, or the Trust Indenture,
shall be deemed to be amended in accordance with such
amendatory resolution, and the respective rights, duties,
and obligations under such amendatory resolution, or the
Trust Indenture, of all the Bondholders shall thereafter be
determined and exercised subject in all respects to such
amendments.
(e) Consent of Bondholders. Any consent given by a
Bondholder pursuant to the provisions of this Section shall
be irrevocable for a period of six months from the date of
26
the giving of the notice provided for in this Section, and
shall be conclusive and binding upon all future owners of
the same Bond during such period. Such consent may be
revoked at any time after six months from the date of the
giving of such notice by the Bondholder who gave such
consent, or by a successor in title, by filing notice
thereof with the Trustee and the Issuer, but such revocation
shall not be effective if the owners of 66 2/3% in aggregate
principal amount of the then outstanding Bonds have, prior
to the attempted revocation, consented to and approved the
amendment.
(f) Ownership of Bonds. For the purpose of this
Section, the fact of being a Bondholder and the amount and
numbers of such Bonds, and the date of being a Bondholder,
may be conclusively presumed, or may be proved by an affi-
davit satisfactory to the Issuer and the Trustee of the
person claiming to be such Bondholder, or by a certificate
executed by any trust company, bank, banker, or any other
depository wherever situated showing that at the date there-
in mentioned such person has on deposit with such trust
company, bank, banker, or other depository, the Bonds des-
cribed in such certificate, or in any other manner, whether
or not the Bonds -are so deposited, as the Trustee may ap-
prove. The Issuer may conclusively presume that the status
of any Bondholders will continue until written notice to the
contrary is served upon the Issuer.
(g) Amendments Without Consent. Notwithstanding the
provisions of (a) through (f) of this Section, and without
notice of the proposed amendment and without the consent of
the Bondholders, but subject to approval of the Approving
Officer and, in the case of any amendment to the Trust
Indenture, with the approval of the Trustee, the Issuer may,
at any time, amend any Bond Resolution, or the Trust Inden-
ture, to cure any ambiguity or cure, correct, or supplement
any defective or inconsistent provision contained therein,
or make any other change that does not in any respect
materially and adversely affect the interest of the Bond-
holders, provided that no such amendment shall be made
contrary to the proviso to Section 13(a), and a duly certi-
fied or executed copy of each such amendment shall be filed
with the Trustee.
Section 14. ESTABLISHMENT OF CONSTRUCTION FUND. (a)
Deposit of Bond Proceeds into Construction Fund. Prior to
or immediately after the sale and delivery of the Bonds
authorized hereby, the Issuer shall establish the Construc-
tion Fund with the Trustee, as defined in and required by
the Agreement. The Issuer shall deposit all of the proceeds
from the sale and delivery of the Bonds authorized hereby
27
into the Construction Fund. The Trustee shall draw on and
use the Construction Fund as hereinafter provided. The
amount so deposited into the Construction Fund shall consti-
tute the Loan made to the User by the Issuer as contemplated
and provided in the Agreement.
(b) Investment of Money in Construction Fund. Any
money held as part of the Construction Fund, other than the
amounts described in Section 15(a), shall be invested or
reinvested by the Trustee upon the written direction of the
Approving Officer in any obligations, including certificates
of deposit (including certificates of deposit issued by any
holder of any Bonds or the Trustee). The Trustee shall make
no investments except as specifically directed in writing by
the Approving Officer. The investments of the Construction
Fund shall be deemed to be a part of the Construction Fund,
and for the purpose of determining the amount of money in
the Construction Fund, such investments shall be valued at
their cost or market value, whichever is lower. The income
and profits, including realized discount on obligations
purchased, received from such investments shall be deposited
in or credited to the Construction Fund, and any losses on
investments shall be charged against the Construction Fund.
Upon the written direction of the Approving Officer the
Trustee shall redeem or sell all or any designated part of
such investments employing, in the case of a sale, any
commercially reasonable method of effecting the same. The
Trustee shall not be liable or responsible for any loss
resulting from the redemption or sale of any such investment
as herein authorized; except that (notwithstanding any
provcsions of the Agreement) the Trustee shall be liable
for: (1) any loss resulting from its willful or negligent
failure, within a reasonable time after receiving the
written direction from the Approving Officer, to make,
redeem, or sell any investment in the manner provided for
herein, and (2) any loss resulting from the making,
redeeming, or selling of any investment which was not
authorized by written direction of the Approving Officer.
If the Trustee is unable, after reasonable effort and within
a reasonable time after receipt of the required written
direction, to make, redeem, or sell any such investment, it
shall so notify in writing the Approving Officer, and
thereupon the Trustee shall be relieved of all liability or
responsibility with respect thereto.
(c) Deposit of Accrued Interest, Income, and Profits.
Any accrued interest received from the sale of the Bonds;
and, upon the written direction of the Approving Officer and
to the extent that such use is consistent with the require-
ments of Section 15(b)(v), all income and profits received
from the investment of the Construction Fund, shall (as soon
28
as practicable after any receipt thereof has been deposited
in or credited to the Construction Fund) be transferred by
the Trustee and deposited into the Debt Service Fund to be
used to pay interest on the Bonds during the period of
construction of the Project.
Section 15. PAYMENTS FROM CONSTRUCTION FUND. (a)
Issuer's Administrative Overhead Expenses and Other Costs.
Immediately after the delivery of the Bonds authorized
hereby the Trustee shall pay directly to the Issuer the
amount of $15,000 in accordance with the Agreement, being
the amount required to reimburse the Issuer for its adminis-
trative and overhead expenses directly attributable and
chargeable to the costs of issuance of the Bonds authorized
hereby and the acquisition, construction, equipping, and
furnishing of the Project. Also, immediately after the
delivery of the Bonds authorized hereby, the Trustee shall
pay directly out of the Construction Fund, promptly after
receiving the bills or statements therefor, all of the
actual expenses and costs of issuance of such Bonds, includ-
ing, without limitation, financing charges, printing and
engraving expenses, the fees and expenses of accountants,
financial advisors, and attorneys, and the initial fees and
expenses of the Trustee.
(b) Reimbursement for and Payment of Cost of Project.
Subject and subordinate to making the payments required by
the preceding paragraph, the Trustee shall make an initial
payment, if requested by the User, and authorized by
RepublicBank Dallas, National Association, Real Estate
Division (the HPurchaser") pursuant to the Construction Loan
Agreement dated May 1, 1982 executed between the User and
the Purchaser, in the manner described below for payments
from the Construction Fund, to reimburse the User for any
Cost of the Project, paid by the User prior to such date of
delivery. The Trustee shall make such initial payment, if
requested, and shall make any subsequent payments from the
Construction Fund to enable the User to pay, or to reimburse
the User for paying, any Cost of the Project, from time to
time upon receipt by the Trustee of a request of the User
signed by the Approving Officer and authorized by the
Purchaser pursuant to the Construction Loan Agreement. Such
request shall be accompanied by a certificate stating with
respect to each payment as follows:
(i) the expenditures, in summary form, for which
payment is to be made or for which reimbursement is
requested;
(ii) that the amounts requested are to be, or have
been paid, by the User for property or to contractors,
29
subcontractors, materialmen, engineers, architects, or
other persons who will perform or have performed neces-
sary or appropriate services or will supply or have
supplied necessary or appropriate materials for the
acquisition, construction, equipping, and furnishing of
the Project, as the case may be, and that, to the best
of his knowledge, the fair value of such property,
services, or materials is not exceeded by the amounts
requested to be paid;
(iii) that no part of the several amounts requested
to be paid to the User, as stated in such certificate,
has been or is the basis for the payment of any money
in any previous or then pending request;
(iv) that the payment of the amounts requested
will not result in a breach of any of the covenants of
the User contained in the Agreement, and particularly
those covenants in Sections 4.05 and 4.06 thereof,
which relate to the Code and the Regulations; and
(v) that the expenditure of such amounts to be
paid, when added to all previous disbursements from the
Construction Fund, will result in at least 90% of the
total of such disbursements, other than disbursements
for issuance expenses, being used to provide land or
property of a character subject to the allowance for
depreciation under the Code (which expenditures are
amounts paid or incurred which are, for federal income
tax purposes, chargeable to the Project's capital
account or would be so chargeable either with a proper
election by the User [for example, under Section 266 of
the Code] or but for a proper election by the User to
deduct such amounts).
(c) Reliance by Trustee. The Trustee shall rely fully
on any such request and certificate delivered pursuant to
this Section and shall not be required to make any
investigation in connection therewith. If amounts paid by
the Trustee with respect to any portion of the Project
should exceed the cost thereof, the User shall promptly
repay such overpayment into the Construction Fund.
Section 16. SURPLUS CONSTRUCTION FUNDS. (a) Disposi-
tion of Surplus Funds. The completion of the Project shall
be conclusively evidenced, and the date of completion shall
be established by a written certificate of completion to be
signed by the Approving Officer and delivered to the Trustee
immediately upon completion of the Project. If, upon the
completion of the Project, there shall be any surplus funds
remaining in the Construction Fund not required to provide
30
for the payment of the Cost of the Project, or if any funds
are on hand in the Construction Fund at the time of the
release of the Trust Indenture under the terms thereof, then
any such funds shall be used immediately to prepay or redeem
principal installments of the Bonds, in inverse
chronological order, in the manner set forth in the FORM OF
BOND in Section 5 for the prepayment or redemption of
principal installments of the Bonds with surplus
Construction Fund moneys, to the extent of any such
available funds; provided that prior t� such use, the Issuer
and the Trustee shall have been furnished with an
unqualified opinion of Bond Counsel to the effect that the
use of moneys from the Construction Fund for such purpose
will be lawful and will not impair the exemption of interest
on the Bonds from federal income taxation; and provided,
further, that the User shall deposit into the Construction
Fund prior to such prepayment or redemption an amount
sufficient to cause the total amount in the Construction
Fund to be equal to an integral multiple of $1,000.
(b) Disposition of Construction Fund upon Acceleration
and Redemption. If the Trustee shall declare the principal
of the Bonds and the interest accrued thereon immediately
due and payable as the result of an Event of Default spec-
ified in the Trust Indenture, or if the Bonds are optionally
or mandatorily prepaid or redeemed prior to maturity as a
whole in accordance with their terms, any amounts remaining
in the Construction Fund shall be used immediately by the
Trustee for the purpose of paying principal of, redemption
premium, if any, agreed liquidated damages, if any, and
interest on the Bonds when due.
Section 17. DAMAGED, MUTILATED, LOST, STOLEN, OR
DESTROYED BONDS. (a) Replacement Bonds. In the event any
of the outstanding Bonds authorized hereby is damaged,
mutilated, lost, stolen, or destroyed, the Issuer shall
execute, and the Trustee shall authenticate, a new bond of
the same principal amount and maturity of the damaged,
mutilated, lost, stolen, or destroyed Bond in exchange and
substitution for such Bond or in lieu of and substitution
for such Bond.
(b) Application for Substitute Bonds. Application for
exchange and substitution of damaged, mutilated, lost,
stolen, or destroyed Bonds shall be made to the Issuer. In
every case, the applicant for a substitute bond shall
furnish to the Issuer and to the Trustee such security or
indemnity as may be required by them to save each of them
and the Paying Agent harmless. In every case of loss,
theft, or destruction of a Bond, the applicant shall also
furnish to the Issuer and to the Trustee evidence to their
31
satisfaction of the loss, theft, or destruction, and of the
ownership of such Bond. In every case of damage or
mutilation of a Bond, the applicant shall surrender the Bond
SO damaged or mutilated.
(c) No Default Occurred. Notwithstanding the
foregoing provisions of this Section, in the event any such
Bond shall have matured, and no default has occurred which
is then continuing in the payment of the principal of,
redemption premium, if any, agreed liquidated damages, if
any, or interest on the Bond, the Issuer may authorize the
payment of the same (without surrender thereof except in the
case of a damaged or mutilated Bond) instead of issuing a
substitute Bond, provided security or indemnity is furnished
as above provided in this Section.
(d) Charge for Issuing Substitute Bonds. Prior to the
issuance of any substitute bond, the Issuer and the Trustee
may charge the owner of such Bond with all legal, printing,
and other expenses in connection therewith. Every.
substitute bond issued pursuant to the provisions of this
Section by virtue of the fact that any Bond is lost, stolen,
or destroyed shall constitute a contractural obligation of
the Issuer whether or not the lost, stolen, or destroyed
Bond shall be found at any time, or be enforceable by
anyone, and shall be entitled to all the benefits of the
Trust Indenture and this Initial Bond Resolution equally and
proportionately with any and all other Bonds duly issued
under this Initial Bond Resolution.
(e) Authority for Issuing Substitute Bonds. This Ini-
tial Bond Resolution shall constitute sufficient authority
for the issuance of any such substitute bonds without neces-
sity of further action by the Board of Directors of the
Issuer or any other body or person, and the issuance of such
substitute bonds is hereby authorized, notwithstanding any
other provisions of this Initial Bond Resolution, except to
the extent otherwise required by law.
Section 18. NO ARBITRAGE. The Issuer and the User
have covenanted to and with the purchasers of the Bonds that
they will make no use of the direct or indirect proceeds
thereof at any time throughout the term thereof which would
cause the Bonds to be arbitrage bonds within the meaning of
Section 103(c) of the Code or any Regulations or rulings
pertaining thereto; and by this covenant the Issuer and the
User are obligated to comply with the requirements of the
aforesaid Section 103(c) and all applicable and pertinent
Regulations relating to arbitrage bonds.
32
Section 19. FINDINGS. Based upon the representations
made by the User in the Agreement, the Board of Directors
hereby affirmatively finds that (i) the Project is suitable
for the promotion of commercial, industrial or manufacturing
development and expansion, (ii) the Project will have a
direct, positive and favorable impact on employment in the
Governmental Unit, and (iii) that the Project is in further-
ance of the public purposes as set forth in the Act.
Section 20. SALE OF THE BONDS. At the specific
request of the User, the Bonds are hereby authorized to be
sold, and shall be delivered to RepublicBank Dallas,
National Association, for the price of par and any accrued
interest to the date of payment and delivery.
Section 21. TRUST INDENTURE. For the purpose of addi-
tionally securing the payment of the Bonds, the redemption
premium, if any, the agreed liquidated damages, if any, and
the interest thereon, and for the purpose of providing for
and fixing in more detail the rights of the owners of the
Bonds and any interest coupons appertaining thereto, and of
the Issuer, the User, and the Trustee, and for the purpose
of making more effective the first lien on and pledge of the
payments to be made pursuant to the Agreement and this
Initial Bond Resolution, a Trust Indenture in substantially
the following form and substance shall be signed, sealed,
and otherwise executed and delivered, for and on behalf of
the Issuer, by the President and the Secretary of its Board
of Directors, after which the Trust Indenture shall be
executed by the Trustee and shall become effective upon the
delivery of the Bonds authorized hereby:
33
TRUST INDENTURE
BETWEEN
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
AND
REPUBLICBANK DALLAS, NATIONAL ASSOCIATION
(MASTER HOST INN - SANDY SHORES PROJECT)
********************************.
Pursuant to and under this Trust Indenture the Corpus
Christi Industrial Development Corporation has granted a
security interest in and assigned to RepublicBank Dallas,
National Association, as Trustee, all of its interests in
all "Installment Loan Payments," "Liquidated Damages Pay-
ments" and certain other payments due pursuant to and under
the "Loan Agreement between Corpus Christi Industrial
Development Corporation and Master Host Inn - Sandy Shores"
to secure its Revenue Bond, Series 1982 (Master Host Inn -
Sandy Shores Project).
DEBTOR:
Corpus Christi Industrial
Development Corporation
302 South Shoreline
Corpus Christi, Texas 78408
SECURED PARTY:
RepublicBank Dallas,
National Association
Pacific and Ervay Streets
Dallas, Texas 75201
TABLE OF CONTENTS
(The Table of Contents is not a part of the Trust Inden-
ture but is for convenience of reference only)
PAGE
Parties 1
Recitals 1
Granting Clause 3
ARTICLE 1. ACCEPTANCE OF TRUST 3
ARTICLE 2. DEBT SERVICE FUND AND CONSTRUCTION 3
FUND
ARTICLE 3. NOTICE TO THE USER 4
ARTICLE 4. ACCOUNTS AND RECORDS 4
(a) Separate Records to be Kept 4
(b) Annual Report 4
(c) Right to Inspect 5
ARTICLE 5. ENFORCEMENT OF RIGHTS IN CASE OF 5
DEFAULT
(a) Appointment of Trustee and 5
Rights of Holder
(b) Control by Trustee 5
(c) Events of Default 6
(d) Declaration of Principal 8
and Interest Due
(e) Enforcement by Trustee 8
(f) Remedies Non -Exclusive 9
(g) Waiver of Defaults 9
(h) Discretion of Trustee 9
(i) Application of Moneys 9
(j) Judicial Proceedings 11
(k) Enforcement of Remedies 11
Without Possession of Bonds
(1) Direction by Majority in 11
Principal Amount of Bondholders
(m) Notice by Trustee 12
(n) Concurrence of Bondholders 12
(o) Default of Payments 12
(p) Notice to User of Past Due 12
Payments
PAGE
ARTICLE 6. CONCERNING THE TRUSTEE 13
(a) Not Accountable for Bond 13
Proceeds
(b) Reliance by Trustee 13
(c) Compensation of Trustee from 13
Debt Service Fund
(d) Limited Responsibilities 14
(e) Advice 14
(f) Trustee May Own Bonds 15
(g) Fees 15
ARTICLE 7. SUCCESSOR TRUSTEE 15
(a) Resignation of Trustee 15
(b) Removal of Trustee 15
(c) Appointment of Successor 15
Trustee
(d) Transfer to Successor Trustee 16
(e) Merger or Consolidation of 17
Trustee
ARTICLE 8. RELEASE OF INDENTURE AND SATISFACTION 17
OF INDEBTEDNESS
ARTICLE 9. AMENDMENTS 17
ARTICLE 10. MISCELLANEOUS PROVISIONS 17
(a) Acknowledgements and 17
Ownership of Bonds
(b) Trustee May Require Proof 18
of Ownership
(c) Consent of Bondholders 18
(d) Survival of Valid Bonds 19
(e) Unclaimed Funds 19
(f) Rights of Parties 19
(g) Severability 20
(h) Law 20
ARTICLE 11. RECORDING 20
(a) Trustee to Record 20
(b) Non -Encumbrance 20
ARTICLE 12. NOTICE TO TEXAS INDUSTRIAL COMMISSION 21
Execution by the Issuer 21
Execution by the Trustee 22
TRUST INDENTURE
THE STATE OF TEXAS
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
THIS TRUST INDENTURE, dated as of May 1, 1982, executed
by and between Corpus Christi Industrial Development Corpo-
ration (the "Issuer"), a nonstock, nonprofit industrial
development corporation organized and existing under the
laws of the State of Texas, including particularly the
Development Corporation Act of 1979, as amended (Article
5190.6, V.A.T.C.S.) (the "Act"), and RepublicBank Dallas,
National Association, Dallas, Texas, a national banking
association duly organized and existing under the laws of
the United States of America and having its principal office
in the City of Dallas, Texas, as Trustee (such bank or any
successor to it as Trustee hereunder being the "Trustee"):
WITNESSETH THAT:
WHEREAS, a "Loan Agreement between Corpus Christi
Industrial Development Corporation and Master Host Inn -
Sandy Shores", dated as of May 1, 1982 (such Loan Agreement,
as amended and supplemented from time to time, being the
"Agreement") has been duly executed between the Issuer and
Master Host Inn - Sandy Shores (the "User"), with the User
being a joint venture partnership organized and existing
under the laws of the State of Texas, being fully qualified
to transact business in the State of Texas; and
WHEREAS, an executed copy of the Agreement has been
filed with the Trustee; and
WHEREAS, pursuant to the Agreement the Board of Direc-
tors of the Issuer has duly adopted a "RESOLUTION AUTHORIZ-
ING THE ISSUANCE OF CORPUS CHRISTI INDUSTRIAL DEVELOPMENT
CORPORATION REVENUE BOND, SERIES 1982 AND THE EXECUTION OF A
TRUST INDENTURE (MASTER HOST my - SANDY SHORES PROJECT)",
which, together with any amendment thereto, is hereinafter
called and designated the "Initial Bond Resolution"; and
WHEREAS, the Initial Bond Resolution authorized the
issuance of CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORA-
TION REVENUE BOND, SERIES 1982 (MASTER HOST INN - SANDY
SHORES PROJECT), in the aggregate principal amount of
$7,200,000, which together with any replacement bonds and
any additional parity revenue bonds ("Additional Bonds")
authorized to be issued by the Initial Bond Resolution, are
hereinafter collectively called the "Bonds"; and
WHEREAS, a certified copy of the Initial Bond Resolu-
tion has been duly filed with the Trustee; and
WHEREAS, pursuant to the Initial Bond Resolution, a
certified copy of each resolution authorizing the issuance
of each series or issue of Additional Bonds shall be filed
with the Trustee prior to the delivery thereof; and
WHEREAS, as used in this Trust Indenture the word "Bond
Resolution" shall mean and include collectively the Initial
Bond Resolution (including the Trust Indenture prescribed
and authorized to be executed in the Initial Bond Resolu-
tion) and, when adopted and filed with the Trustee, each
resolution authorizing the issuance of Additional Bonds
together with any supplemental resolutions or amendments to
such resolutions or the Trust Indenture; and
WHEREAS, pursuant to the Agreement and the Bond Resolu-
tion and subject to the terms and provisions thereof, the
Bonds, the redemption premium, if any, agreed liquidated
damages, if any, and the interest thereon, are and shall be
payable from and secured by a first lien on and pledge of
the payments designated "Installment Loan Payments" and
"Liquidated Damages Payments" as well as certain other
payments, to be made or paid, or caused to be made or paid,
by the User (or its successors or assigns under certain
circumstances) to the Trustee; and
WHEREAS, the User has entered into a Deed of Trust
(with Security Agreement and Assignment of Rents and Leases)
dated as of May 1, 1982 (the "Deed of Trust"), between the
User and the Trustee, such Deed of Trust providing further
security for the payment of the Installment Loan Payments,
Liquidated Damages Payments and certain other payments for
the benefit of the owners of the Bonds; and
WHEREAS, for purposes of this Trust Indenture, the
definitions of terms in the Agreement, the Deed of Trust,
and the Bond Resolution are hereby adopted, and the terms
used herein shall have the same meanings as such terms are
given in said Agreement, Deed of Trust, and Bond Resolution
unless a different meaning is given herein; and
WHEREAS, the Trustee has accepted the trusts created by
this Trust Indenture, and in evidence thereof has joined. in
the execution hereof; and
WHEREAS, this Preamble constitutes an integral part of
this Trust Indenture.
NOW, THEREFORE, THIS TRUST INDENTURE WITNESSETH:
2
That the Issuer in consideration of the premises and
the acceptance by the Trustee of the trusts hereby created,
and of the purchase and acceptance of the Bonds by the
owners thereof, and for other good and valuable considera-
tion, the receipt of which is hereby acknowledged, and for
the purpose of securing and providing for the payment of the
principal of, redemption premium, if any, and interest on
the Bonds at any time issued and outstanding, when due, any
agreed liquidated damages, all fees and expenses of the
Trustee and Registrar, and the Paying Agents for the Bonds,
and all other payments required to be made by the User under
the Agreement and the Bond Resolution, has granted a secur-
ity interest in, assigned, transferred, pledged, set over,
and confirmed, and by these presents does grant a security
interest in, assign, pledge, set over, and confirm unto the
Trustee, and to its successor or successors in said trust,
and to its or their assigns, all and singular (i) all of its
right, title, and interest in and to the Installment Loan
Payments, Liquidated Damages Payments and all other payments
required to be made to the Debt Service Fund as required and
provided in the Agreement and the Bond Resolution, and (ii)
all of its right, title and interest to the Debt Service
Fund and the Construction Fund created by the Initial Bond
Resolution, and the Issuer and the Trustee have agreed, and
they hereby agree and covenant with the respective owners
from time to time of the Bonds, and the interest coupons, if
any, appertaining thereto, as follows, to -wit:
Article 1. ACCEPTANCE OF TRUST. The Trustee hereby
accepts the trusts, duties, obligations, and requirements
imposed on it by the Bond Resolution and this Trust Inden-
ture, and agrees to carry Out and perform, punctually and
effectively, such duties, obligations, and requirements for
the benefit of the Issuer, the User, and the owners of the
Bonds and the interest coupons, if any, appertaining there-
to. It is further specifically agreed that (i) the Trustee
will act as a Paying Agent for the Bonds at all times while
it is Trustee, (ii) the Trustee will act as Registrar for
the Bonds at all times while it is Trustee, (iii) the
Trustee will authenticate each of the Bonds by executing the
Trustee's Certificate of Authentication appearing on each of
the Bonds, as provided in the Bond Resolution, and it will
so authenticate the Bonds when requested by the Issuer,
prior to the delivery of the Bonds, at such time and in such
manner as directed by the Issuer, and (iv) the Trustee will
remain the beneficiary under the Deed of Trust so long as it
is the Trustee hereunder.
Article 2. DEBT SERVICE FUND AND CONSTRUCTION FUND.
The Debt Service Fund and the Construction Fund created by
the Initial Bond Resolution are hereby confirmed and estab-
lished, respectively, intrust, with the Trustee, and the
3
Trustee agrees to hold, administer, deposit, secure, invest,
and use said funds in all respects as provided and required
by the Agreement, the Bond Resolution, and this Trust Inden-
ture.
Article 3. NOTICE TO THE USER. On or before the 5th
day prior to each date upon or before which each Installment
Loan Payment, Liquidated Damages Payment or other payment is
required by each Bond Resolution to be deposited into the
Debt Service Fund, the Trustee shall give written notice to
the User, by hand delivery or first class mail, postage
prepaid, at such address as the User shall from time to time
designate and file in writing with the Trustee, of the
amount, if any, of each Installment Loan Payment, Liquidated
Damages Payment or other payment required by each Bond
Resolution to be made by the User to the Trustee and depos-
ited by the Trustee into the Debt Service Fund, on or before
such date. Such notice shall give a brief statement of the
manner in which the amount due was calculated, including a
showing of all credits on account of available moneys in the
Debt Service Fund. The failure of the Trustee to give, or
the User to receive, any such notice shall not relieve the
User of its unconditional duty and obligation to make all
deposits or payments of Installment Loan Payments, Liqui-
dated Damages Payments and other payments to the Trustee as
required by the Agreement and each Bond Resolution.
Article 4. ACCOUNTS AND RECORDS (a) Separate Records
to be Kept. The Trustee shall keep proper books of records
and accounts, separate from all other records and accounts,
in which complete and correct entries shall be made of all
transactions relating to the Installment Loan Payments,
Liquidated Damages Payments and other payments, the Debt
Service Fund, and the Construction Fund.
(b) Annual Report. Within 90 days after each anniver-
sary date of this Indenture, the Trustee will furnish to the
Issuer, the User, and any owner of any outstanding Bonds who
may so request, a copy of a report by the Trustee covering
the twelve months ending on such anniversary date, showing
the following information:
(1) a detailed statement concerning the receipt
and disposition of all Installment Loan Payments,
Liquidated Damages Payments and other payments and the
disposition of the amounts in the Construction Fund
(until the Construction Fund shall have been fully
disposed of).
(2) an asset statement or balance sheet of the
Debt Service Fund and of the Construction Fund (until
4
the Construction Fund shall have been fully disposed
of).
(c) Right to Inspect. The Issuer, the User, and the
owners of any Bonds shall have the right, at all reasonable
times and upon reasonable notice, to inspect all records,
accounts, and data of the Trustee relating to the Debt
Service Fund and the Construction Fund.
Article 5. ENFORCEMENT OF RIGHTS IN CASE OF DEFAULT.
(a) Appointment of the Trustee and Rights of the Holder.
The Trustee is hereby irrevocably appointed the special
agent and representative of the owners of the Bonds and
vested with full power in their behalf to effect and enforce
the Agreement, this Trust Indenture, and the Bond Resolution
for their benefit as provided herein and in the Bond Resolu-
tion; but anything contained in this Trust Indenture to the
contrary notwithstanding, the owners of a majority in
aggregate principal amount of the Bonds then outstanding, in
case of any subsisting Event of Default (hereinafter de-
fined) or of any other event entitling the Trustee to
proceed hereunder, shall have the right from time to time to
direct and control the Trustee in connection with the
enforcement of any of the provisions of the Agreement, this
Trust Indenture, and the Bond Resolution, and any other
proceedings taken by virtue of any provisions of the afore-
said instruments, including the right to have withdrawn and
discontinued at any stage thereof any proceedings taken
hereunder by the Trustee, provided that the Event of Default
upon which such proceedings were based and all other Events
of Default hereunder shall have been remedied and made good.
Anything contained in this Trust Indenture to the contrary
notwithstanding, each owner of any Bond shall have a right
of action to enforce the payment of all amounts due with
respect to any Bond owned by him when or after the same
shall have become due, at the place, from the sources, and
in the manner expressed in the Agreement, the Bond Resolu-
tion, or this Trust Indenture; provided that no right of
action shall exist subsequent to the time of waiver of an
Event of Default in the payment of any such amount so due
and such Event of Default having been remedied and made
good, as provided in Article 5(g) .
(b) Control by Trustee. Except as otherwise provided
in this Article, the rights of action with respect to this
Trust Indenture shall be exercised by the Trustee and no
owner of any Bond shall have any right to institute any
suit, action or proceeding at law or equity for the appoint-
ment of a receiver or for any other remedy hereunder or by
reason hereof unless and until in addition to the fulfill-
ment of all other conditions precedent specified in this
Trust Indenture, the Trustee shall have received the written
5
request of the owners of not less than 25% in aggregate
principal amount of the Bonds then outstanding and shall
have been offered indemnity satisfactory to the Trustee and
shall have refused, or for 60 days thereafter neglected, to
institute such suit, action, or proceeding; and it is hereby
declared that the making of such request and the furnishing
of such indemnity are in each case conditions precedent to
the execution and enforcement by any owner of any Bond of
the powers and remedies given to the Trustee hereunder and
to the institution and maintenance by any owner of any Bond
of any action or cause of action for the appointment of a
receiver or for any other remedy hereunder; but the Trustee
may, in its discretion, or when duly requested in writing by
the owners of at least 25% in aggregate principal amount of
the Bonds then outstanding and upon being furnished indem-
nity satisfactory to the Trustee against expenses, charges,
and liability shall, forthwith take such appropriate action
by judicial proceedings or otherwise to enforce the cove-
nants of the User, and the Issuer as the Trustee may deem
expedient in the interest of the owners of the Bonds.
(c) Events of Default. Any one or more of the follow-
ing events shall constitute and hereinafter shall be called
an "Event of Default":
(1) the failure by the Issuer to make due and
punctual payment of principal of, redemption premium,
if any, and interest on the Bonds, whether payment is
required at maturity or by call for redemption or
otherwise within fifteen days of the date on which such
payment becomes due.
(2) the failure of the User to make or pay, or
cause to be made or paid, any Installment Loan Payment,
any Liquidated Damages Payment or any other payment, or
any part of any of the foregoing, when and to the
extent due and required by the Agreement or the Bond
Resolution within fifteen days of the date on which
suchpayment becomes due.
(3) the User defaulting in the observance or
performance of any other of its covenants, conditions,
or obligations in the Bonds, the Agreement, the Bond
Resolution, or this Trust Indenture, and the User not
remedying such default within 30 days after written
notice to do so has been received by the User from the
Trustee or the owners of the Bonds; and the Trustee may
serve such notice, in its discretion, or shall serve
such notice at the written request of the owners of not
less than 25% in aggregate principal amount of the
Bonds then outstanding.
6
(4) the dissolution or liquidation of the User in
any manner not specifically authorized by the Agree-
ment, or failure by the User promptly to lift or
suspend any execution, garnishment, or attachment of
such consequence as will materially impair its ability
to carry out its obligations under the Agreement or the
Bond Resolution, or the entry by the User into an
agreement of composition with its creditors.
(5) an order of relief shall be issued by the
Bankruptcy Court of the United States District Court
having valid jurisdiction, granting the User relief
under the provisions of the Bankruptcy Reform Act of
1978, as amended, or any other court having valid
jurisdiction shall issue an order or decree under
applicable federal or state law providing for the
appointment of a custodian, receiver, liquidator,
assignee, trustee, sequestrator (or other similar
official) of the User or of any substantial part of its
property, or ordering the winding up or liquidation of
its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of sixty (60)
consecutive days.
(6) the User shall have consented to or caused
the institution of proceedings in bankruptcy against
it, or the User shall have consented to or caused the
institution of any proceeding against it under any
federal or state insolvency laws, or the User shall
have consented to or caused the filing of any petition,
application or complaint seeking the appointment of a
custodian, receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the User or
of any substantial part of its property, or the User
shall have made an assignment for the benefit of
creditors, or the User shall generally not pay its
debts as they become due.
(7) a final judgment or judgments for the payment
of money aggregating in excess of $50,000 is or are
outstanding against the User and any such judgment has
been outstanding for more than 30 days from the date of
its entry and has not been discharged in full or
stayed.
(8) the User fails to make any payment due on any
indebtedness or other Security (which term shall have
the same meaning herein as the term "Security" as
defined in the Securities Act of 1933, as amended) or
any event shall occur or any condition shall exist in
respect of any indebtedness or other Security of the
User or under any agreement securing or relating to
7
such indebtedness or other Security, the effect of
which is to cause (or permit any holder of such
indebtedness or other Security or a trustee to cause)
such indebtedness or other Security, or a portion
thereof, to become due prior to its stated maturity or
prior to its regularly scheduled dates of payment.
(9) the occurrence of any "Event of Default" as
defined in the Deed of Trust.
(10) the User shall have ceased to exist in
violation of its covenants in Section 6.01 of the
Agreement.
(11) the occurrence of any "Event of Default" as
defined in the Guarantee and Indemnification Agreement,
dated as of May 1, 1982, executed among the Trustee,
Exeter Investment Company and Luxury Lodges, Inc.
(d) Declaration of Principal and Interest Due. Upon
the happening of an Event of Default, the Trustee may, in
its discretion, or upon the written request of the owners of
at least 25% in aggregate principal amount of the Bonds then
outstanding, and upon being indemnified to the satisfaction
of the Trustee, shall, declare the principal of all Bonds
then outstanding and the interest accrued thereon immedi-
ately due and payable, and such principal and interest,
together with any applicable agreed liquidated damages, and
any applicable redemption premium, and any other 'amounts
then due, shall thereupon become and be immediately due and
payable, anything in the Bonds, the Agreement, the Bond
Resolution, or this Trust Indenture to the contrary notwith-
standing.
(e) Enforcement by Trustee. Upon the happening of an
Event of Default, the Trustee may, in its discretion, or
upon the written request of the owners of at least 25% in
aggregate principal amount of the Bonds then outstanding,
and upon being indemnified to the satisfaction of the
Trustee, shall, take such appropriate action by judicial
proceedings or otherwise to cure the Event of Default and/or
to require the User, or the Issuer to carry out its or their
covenants and obligations under and with respect to the
Bonds, the Agreement, the Bond Resolution, or this Trust
Indenture, including without limitation, the use and filing
of actions for specific performance, and mandamus
proceedings, in any court of competent jurisdiction, against
the Issuer, its Board of Directors, and its officers,
employees, and/or agents, and to obtain judgments against
the User for any Installment Loan Payments, Liquidated
Damages Payments or other payments due but unpaid into the
Debt Service Fund, or for any other amounts due hereunder,
8
under the Bond Resolution, or under the Agreement, including
all amounts due with respect to the Bonds then outstanding
if declared due and payable as provided herein.
(f) Remedies Non -Exclusive. No remedy herein con-
ferred upon or reserved to the Trustee is intended to be
exclusive of any other available remedy or remedies, but
each and every such remedy shall be cumulative and shall be
in addition to every other remedy given hereunder or under
the Agreement, the Bonds or the Bond Resolution, or now and
hereafter existing at law or in equity or by statute. No
delay or omission to exercise any right or power accruing
upon the happening of an Event of Default continuing as
aforesaid shall impair any such right or power or shall be
construed to be a waiver of.any such Event of Default or
acquiescence therein, and every such right and power may be
exercised from.time to time and so often as may be deemed
expedient.
(g) Waiver of Defaults. The Trustee may, and upon the
written request of the owners of at least 80% of the aggre-
gate principal amount of the Bonds then outstanding shall,
waive any Event of Default hereunder and its consequences,
except that an Event of Default in the payment of Install-
ment Loan Payments, Liquidated Damages Payments or other
payments, or in the payment of any amounts with respect to
the Bonds when and as the same shall become due and payable,
may be waived only if, the Event of Default therein shall
have been remedied and made good. In case of any such
waiver, the Issuer, the User, the Trustee, and the owners of
the Bonds shall be restored to their former position and
rights hereunder respectively, but such waiver shall not
extend to any subsequent or other Event of Default or impair
any right consequent thereon.
(h) Discretion of Trustee. In the event the Trustee
shall receive conflicting or inconsistent requests and
indemnity from two or more groups of owners of Bonds, each
representing less than a majority of the aggregate principal
amount of Bonds then outstanding, the Trustee in its sole
discretion may determine what action, if any, shall be
taken, or may choose to take no action, notwithstanding any
other provisions of this Trust Indenture.
(i) Application of Moneys. All money collected by the
Trustee pursuant to the exercise of the remedies and powers
provided in this Article, together with all other sums which
then may be held by the Trustee under any provision of this
Trust Indenture or the Deed of Trust as security for the
Bonds, shall be applied as follows:
9
FIRST: to the payment of the costs and expenses
of the proceedings whereunder such money was collected,
including a reasonable compensation to the Trustee, its
agents, attorneys, and all other necessary or proper
expenses, liabilities, and advances incurred or made by
the Trustee under this Trust Indenture, and to the
payment of all taxes, assessments, and liens superior
to the lien of this Trust Indenture.
SECOND: to the payment of matured interest on the
Bonds, including, to the extent legally 'permissible,
interest thereon at the rate of 15% per annum, based on
a 365 or 366 day year, as appropriate, from due date to
date of payment.
THIRD: to the payment of principal of, redemption
premium, if any, and agreed liquidated damages, if any,
on the Bonds which have been called for redemption as
permitted or required by the Bond Resolution or have
matured as provided thereby, and interest thereon, to
the extent legally permissible, at the rate of 15% per
annum, based on a 365 or 366 day year, as appropriate,
from the date of redemption or maturity to date of
payment.
FOURTH: to the payment of principal on the Bonds
which have become due by virtue of the declaration of
the Trustee pursuant to Article 5(d), and interest
thereon, to the extent legally permissible, at the rate
of 15% per annum, based on a 365 or 366 day year, as
appropriate, from the date declared due to date of
payment.
FIFTH: to the payment of the surplus, if any, to
whomsoever may be lawfully entitled to receive the
same, or as a court of competent jurisdiction may
direct.
If in making distribution pursuant to the order above
stated, the amount available for distribution in a particu-
lar classification shall be insufficient to pay in full all
of the items in such classification, the amount available
for distribution to items in such classification shall be
prorated among such items in the proportion that the amount
each item bears to the total of all such items. Notwith-
standing anything contained in this Trust Indenture to the
contrary, if the Trustee shall declare the principal of all
Bonds then outstanding and the interest accrued thereon
immediately due and payable as the result of an Event of
Default, or if the Bonds are to be redeemed as a whole
pursuant to mandatory redemption provisions provided in the
Bond Resolution, or if the User shall exercise any option to
10
redeem the Bonds as a whole in accordance with their terms,
any amounts remaining in the Construction Fund shall be
deposited in the Debt Service Fund and applied by the
Trustee as provided in this subsection (i).
Any Liquidated Damages Payments shall be kept by the
Trustee within the Debt Service Fund separate and apart from
all other funds received hereunder and shall be paid
directly to the holders of the Bonds as provided in the Bond
Resolution.
(j) Judicial Proceedings. In any judicial proceeding
in which the Issuer is a party and which, in the opinion of
the Trustee and its counsel, has a substantial bearing on
the interests of the owners of the Bonds, the Trustee, if
permitted by the court having jurisdiction over such pro-
ceeding, may, in its discretion, or upon the written request
of the owners of at least 25% in aggregate principal amount
of the Bonds then outstanding, and upon being indemnified to
the satisfaction of the Trustee, shall, intervene on behalf
of the owners of the Bonds to assert the rights of such
owners.
(k) Enforcement of Remedies Without Possession of
Bonds. All rights of action or other rights under this
Trust Indenture or otherwise may be brought by the Trustee
in its own name as Trustee of an express trust and may be
enforced by the Trustee without the possession of any of the
Bonds or any interest coupons appertaining thereto, or the
production thereof on the trial or other proceedings rela-
tive thereto.
(1) Direction by Majority in Principal Amount of
Bondholders. It is expressly provided, however, that the
owners of a majority in aggregate principal amount of the
Bonds then outstanding, or a committee representing, pursu-
ant to a written appointment filed with the Trustee, the
owners of a majority in aggregate principal amount of the
Bonds then outstanding, shall have the right, at any time,
by an instrument or instruments in writing executed and
delivered to the Trustee, to direct the method and place of
conducting all proceedings to be taken in connection with
the enforcement of the Trustee's rights and remedies under
the Agreement or the rights of the owners of the Bonds or
the Trustee's rights and remedies under the Bond Resolution
and this Trust Indenture, and may exercise any right or
perform any action hereunder, with the same effect as the
Trustee under this Trust Indenture, provided, that such
direction shall not be otherwise than in accordance with the
provisions of law and of this Trust Indenture, and provided
that the Trustee shall be indemnified to its satisfaction.
13.
(m) Notice By Trustee. The Trustee shall not be re-
quired to take notice nor be deemed to have notice of any
default specified in this Trust Indenture, except for those
Events of Default specified in Article 5(c)(1) and 5(c)(2),
unless specifically notified in writing of such default by
the owners of at least 25% in aggregate principal amount of
the Bonds then outstanding.
(n) Concurrence of Bondholders. In determining
whether the owners of a requisite aggregate principal amount
of Bonds outstanding have concurred in any request, demand,
authorization, direction, notice, consent, or waiver under
this Trust Indenture or the Bond Resolution, Bonds owned by
or for the account of the User or any person controlled by,
controlling, or under common control of the User, shall be
disregarded and deemed not to be outstanding for the purpose
of any such determination; provided however, that for the
purpose of determining whether the Trustee shall be pro-
tected in relying upon any such request, demand, authoriza-
tion, direction, notice, consent, or waiver, only Bonds of
which the Trustee has actual knowledge of such ownership
shall be so disregarded.
(o) Default of Payments. In the event of a default in
the payment of any Installment Loan Payment, Liquidated
Damages Payment or other payment, or in the performance of
any agreement or covenant contained in the Bonds, the
Agreement, the Bond Resolution, or this Trust Indenture,
such payment and performance may be enforced by the Trustee
by mandamus, specific performance, or by the appointment of
a receiver (in equity with power to charge and collect
Installment Loan Payments, Liquidated Damages Payment or
other payment) in accordance with the Agreement, the Bond
Resolution and this Trust Indenture.
(p) Notice to User of Past Due Payments. Pursuant to
the Agreement, Installment Loan Payments, Liquidated Damages
Payment or other payment are to be paid by the User directly
to the Trustee. In the event that any such payments are not
timely made, the Trustee shall immediately notify the User
by mail at the address provided in the Agreement or by
telephonic notice with confirmation of such notice by mail,
that payment has not been made. Such notice shall be deemed
given at the time the mailing is received or telephonic
notice is given, whichever is earlier. Failure of the
Trustee to give, or the User to receive, such notice shall
not relieve the User of any covenant or obligation under the
Agreement, the Bond Resolution or this Trust Indenture and
shall not constitute a waiver of any Event of Default under
this Trust Indenture. .
12
• . •
Article 6. CONCERNING THE TRUSTEE. The Trustee
accepts the trust imposed upon it by this Trust Indenture,
but only upon and subject to the following express terms and
conditions:
(a) Not Accountable for Bond Proceeds. In no event
shall the Trustee be liable except for its negligence or
willful misconduct in relation to its duties under this
Trust Indenture and the Bond Resolution. The Trustee shall
not be responsible for any recitals herein, in the Bonds,
the interest coupons, if any, appertaining thereto, the Bond
Resolution, the Agreement, or for the sufficiency of the
security for the Bonds or interest coupons, if any, apper-
taining thereto. The Trustee shall have no responsibility
hereunder except to the extent of the duties placed upon the
Trustee to hold, administer, deposit, secure, invest, and
use the Debt Service Fund and the Construction Fund as
expressly required by the Bond Resolution, to the extent
funds for such purposes are received by the Trustee, and to
perform the other express covenants and agreements made by
the Trustee under the provisions of this Trust Indenture and
the Bond Resolution.
(b) Reliance by Trustee. The Trustee may rely and
shall be protected in acting or refraining from acting in
accordance with the provisions of this Trust Indenture and
the Bond Resolution upon any notice, requisition, request,
consent, certificate, order, affidavit, letter, telegram, or
other paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper person
or persons, and the Trustee shall not be bound to recognize
any person as an owner of Bonds or to take any action at his
request, unless the Bond or Bonds owned by such owner of
Bonds shall be deposited with the Trustee, be registered in
the name of such owner on the Bond Registration Books kept
by the Trustee, or submitted to it for inspection. Any
action taken by the Trustee pursuant to this Trust Indenture
upon the request or authority or consent of any person who,
at the time of making such request, or giving such authority
or consent, is the owner of any Bond secured hereby, shall
be conclusive and binding upon all future owners of the same
Bond and of Bonds issued in exchange therefor or in place
thereof.
(c) Compensation of Trustee from Debt Service Fund.
There shall be paid from the Debt Service Fund the Trustee's
reasonable compensation, and its reasonable expenses, ad-
vances, and counsel fees, and its liabilities incurred in
and about the execution of the trusts hereby created and the
exercise and performance of the powers and duties of the
Trustee hereunder (except liabilities incurred as a result
of the negligence or willful misconduct of the Trustee, or
13
. • .
as provided in the Bond Resolution), and the reasonable cost
and expenses, including counsel fees, of defending against
liabilities.
(d) Limited Responsibilities. The responsibilities of
the Trustee elsewhere set forth herein shall be further
limited as follows:
FIRST: the Trustee shall not be liable with
respect to any action taken or omitted to be taken by
it in good faith in accordance with a direction of the
owners of Bonds pursuant to any provision of this Trust
Indenture relating to the time, method, and place of
conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Trust Indenture.
SECOND: no provision of this Trust Indenture
shall require the Trustee (1) to expend or risk its own
funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or
liability is not reasonably assured to it, nor (2) to
take any action, whether or not directed to take such
action by the owners of Bonds, pursuant to this Trust
Indenture, which in the judgment of the Trustee would
conflict with any rule of law, or with the terms of
this Trust Indenture, or would be unjustly prejudicial
to the owners of Bonds not taking part in such direc-
tion. When acting pursuant to the direction of any
owners of Bonds pursuant to this Trust Indenture, the
Trustee may take other action deemed proper by the
Trustee which is not inconsistent with such direction;
provided, however, that the terms of this subparagraph
SECOND shall not impose any additional duties or
responsibilities upon the Trustee and shall not be
construed to limit the effect of subparagraph FIRST of
this paragraph (d).
(e) Advice. The Trustee may act upon the professional
opinion or advice of any legal counsel, engineer, account-
ant, or other expert, reasonably believed by the Trustee to
be qualified in relation to the subject matter, whether
retained by the Trustee or the Issuer or otherwise, and the
Trustee shall not be responsible for anything suffered or
done or not done by it in good faith in accordance with any
such opinion or advice.
(f) Trustee May Own Bonds. Except as prohibited by
law, the Trustee may become the owner of any of the Bonds
14
secured by this Trust Indenture with the same rights which
it would have ifitwere not the Trustee; and nothing herein
contained shall be construed to prohibit the Trustee, either
as principal or agent, from engaging in or being interested
in any financial or other transaction with the Issuer or the
User or from acting as depository, trustee, or agent for any
committee or body of owners of the Bonds or of other obliga-
tions of the Issuer as freely as if it were not the Trustee.
(g) Fees. The Issuer has agreed with the User in the
Agreement and the Bond Resolution provides that the User
shall pay to the Trustee its charges for performing the
duties of Trustee, Registrar, and Paying Agent for the
Bonds. The User hereby agrees to pay the charges as set
forth in Exhibit A, as said Exhibit A may be amended from
time to time by the Trustee, and to pay the reasonable
extraordinary charges of the Trustee, Registrar and Paying
Agent for the Bonds for services performed hereunder, under
the Bond Resolution and under the Bonds. It is agreed by
the Trustee that the User may, without causing or creating a
default or Event of Default hereunder, contest in good faith
(and withhold payment of the contested amount until such
contest is resolved) the reasonableness of any of the fore-
going charges for services. All payments due the Trustee
for such charges, fees, or expenses shall be paid by the
User and no such charges, fees, or expenses shall be charged
against or be payable by the Issuer, except the initial fees
and expenses of the Trustee which are paid as part of the
costs of issuance of the Bonds.
Article 7. SUCCESSOR TRUSTEE. (a) Resignation of
Trustee. The Trustee at the time acting hereunder may at
any time resign and be discharged from all trusts created by
this Trust Indenture by giving not less than 30 days written
notice to the Issuer, the User, and to any owners of Bonds
as shown on the Bond Registration Books and any other list
of owners of Bonds kept by the Trustee, and such resignation
shall take effect upon the appointment of a successor
Trustee by the owners of Bonds or by the Issuer as hereinaf-
ter provided.
(b) Removal of Trustee. The Trustee may be discharged
and removed at any time by an instrument or concurrent
instruments in writing, delivered to the Trustee and to the
Issuer, and signed by the owners of a majority in aggregate
principal amount of the then outstanding Bonds.
(c) Appointment of Successor Trustee. In case the
Trustee hereunder shall resign or be removed, or be dis-
solved, or shall be in course of dissolution or liquidation,
or otherwise become incapable of acting hereunder, or in
case the Trustee shall be taken under the control of any
15
public officer or officers, or of a receiver appointed by a
court, a successor may be appointed by the owners of a
majority in aggregate principal amount of the then outstand-
ing Bonds by an instrument or concurrent instruments in
writing, signed by such owners of Bonds, or by their attor-
neys in fact duly authorized in writing, and delivered to
the Issuer; provided, nevertheless, that in any such event
the Issuer by an instrument executed by authority of a
resolution of its Board of Directors and signed by the
President and by the Secretary of such Board, may appoint a
temporary Trustee to fill such vacancy until a successor
Trustee shall be appointed by the owners of Bonds in the
manner above provided, and any such temporary Trustee so
appointed by the Issuer shall immediately and without
further act be superseded by the Trustee so appointed by
such owners of Bonds. Every such successor or temporary
Trustee shall be a trust company or bank in good standing
located in the State of Texas, and having a capital and
surplus of not less than Fifty Million Dollars
($50,000,000), if there be such a trust company or bank
willing, qualified, and able to accept the trust upon
reasonable and customary terms. In the event that no
appointment of a temporary or successor Trustee shall be
made pursuant to the foregoing provisions of this Article
within 30 days after the Trustee gives written notice of
resignation or the Trustee is removed, any owner of Bonds or
any retiring Trustee may apply to any court of competent
juri6diction for the appointment of a successor Trustee, and
such court may thereupon, after such notice, if any, as it
shall deem proper, prescribe or appoint a successor Trustee.
(d) Transfer to Successor Trustee. Every successor
Trustee appointed hereunder shall execute, acknowledge, and
deliver to its predecessor, the Issuer, and the 'User an
instrument in writing accepting such appointment hereunder,
and thereupon such successor Trustee, without any further
act, deed, or conveyance, shall become fully vested with all
the estates, rights, powers, trusts, duties, and obligations
hereunder of its predecessor; but such predecessor shall
nevertheless, on the written request of the Issuer, execute
and deliver an instrument transferring to such successor
Trustee all of the estates, rights, powers, and trusts of
such predecessor hereunder; and every predecessor Trustee
shall deliver all securities and money held by it to its
successor; provided, however, that before any such delivery
is required or made, all reasonable, customary, and legally
accrued fees, advances, and expenses of such predecessor
Trustee shall be paid in full. Should any deed, assignment,
or instrument in writing from the Issuer be required by any
successor Trustee for more fully and certainly vesting in
such Trustee the estates, rights, powers, and duties hereby
vested or intended to be vested in the predecessor Trustee,
16
any and all such deeds, assignments, and instruments in
writing shall, on request, be executed, acknowledged, and
delivered by the Issuer.
(e) Merger or Consolidation of Trustee. Any corpora-
tion or association into which the Trustee, or any successor
to it in the trusts created by this Trust Indenture, may be
merged or converted or with which it or any successor to it
may be consolidated, or any corporation or association
resulting from any merger, conversion, or consolidation to
which the Trustee or any successor to it shall be a party,
shall be the successor Trustee under this Trust Indenture
without the necessity of the execution orfiling of any
paper or any other act on the part of any of the parties
hereto anything herein to the contrary notwithstanding.
Article 8. RELEASE OF INDENTURE AND SATISFACTION OF
INDEBTEDNESS. If, when the Bonds shall have become due and
payable in accordance with their terms or otherwise as
provided in this Trust Indenture or shall have been duly
called for redemption, and the whole &mount of the princi-
pal, redemption premium, if any, and the interest so due and
payable upon all of the Bonds, and the agreed liquidated
damages, if any, with respect to the Bonds then due, shall
be paid, or sufficient money shall be held by the Trustee
for such purpose, and provision shall also be made for
paying all other sums payable hereunder and/or under the
Agreement and/or the Bond Resolution by the User, then and
in that case all right, title, and interest of the Trustee
in these presents and the estate and rights hereby granted
shall thereupon cease, determine, and become void, and the
Trustee in such case shall release this Trust Indenture and
shall execute such documents to evidence such release as may
be reasonably required by the Issuer and the User, and shall
turn over any surplus funds held by it to whomsoever may
then be entitled pursuant to the Bond Resolution, the
Agreement, or by law to receive the same; and thereupon this
Trust Indenture shall terminate and be of no effect; pro-
vided, that until the Bonds are finally paid, the Trustee
shall continue to act as Paying Agent and Registrar for the
Bonds.
Article 9. AMENDMENTS. This Trust Indenture may be
amended only as provided in the Bond Resolution; provided,
however, that Additional Bonds may be issued pursuant to the
Bond Resolution as provided therein, and may be secured by
this Trust Indenture without the necessity of amending or
supplementing this Trust Indenture.
Article 10. MISCELLANEOUS PROVISIONS. (a) Acknowl-
edgments and Ownership of Bonds. Any request, direction,
consent, or other instrument required by this Trust
17
Indenture to be signed or executed by owners of Bonds may be
in any number of concurrent writings of similar tenor and
may be signed or executed by such owners of Bonds in person
or by an agent appointed in writing. Proof of the execution
of any instrument, or of the writing appointing such agent,
and of the ownership of the Bonds, if made in the following
manner, shall be sufficient for any purpose of this Trust
Indenture and shall be conclusive in favor of the Trustee
with regard to any action taken by it under such instrument:
(i) the fact, date, and due authorization of the
execution by any person of any such instrument may be
proved by the certificate of any officer in any juris-
diction, who, by the laws thereof, has power to take
acknowledgments within such jurisdiction to the effect
that the person signing such instrument acknowledged
before him the execution thereof, or by an affidavit of
a witness to such execution.
(ii) the fact of the owning of the Bonds by any
owner thereof, the amount and numbers of such Bonds,
and the date of his owning same may be proved by (A)
with respect to bearer Bonds, the affidavit of the
person claiming to be such owner, if such affidavit
shall be deemed by the Trustee to be satisfactory, or
by a certificate executed by any trust company, bank,
banker, or any other depositary, wherever situated, if
such certificate shall be deemed by the Trustee to be
satisfactory, showing that at the date therein men-
tioned such person had on deposit with such trust
company, bank, banker, or other depositary, the Bonds
described in such certificate or in any other manner,
whether or not the Bonds are deposited, as the Trustee
may approve or (B) with respect to registered Bonds,
the appropriate entries in the Bond Registration Books
maintained by the Trustee as Registrar. The Trustee
may conclusively assume that such ownership continued
until written notice to the contrary is served upon the
Trustee.
(b) Trustee May Require Proof of Ownership. Nothing
contained in this Article shall be construed as limiting the
Trustee to the proof hereinabove specified, it being in-
tended that the Trustee may accept any other evidence of the
matters herein stated which it may deem sufficient.
(c) Consent of Bondholders. Unless otherwise provided
in the Bond Resolution, any request or consent of any owner
of Bonds shall bind every future owner of the same Bond in
respect of anything done by the Trustee in pursuance of such
request or consent. In the event of the dissolution of the
Issuer, all of the covenants, stipulations, promises, and
18
agreements in this Trust Indenture contained by, on behalf
of, or for the benefit of the Issuer, shall bind or inure to
the benefit of the successor or successors of the Issuer
from time to time and any officer, board, or commission to
whom or to which any power or duty affecting such covenants,
stipulations, promises, and agreements shall be transferred
by or in accordance with law.
(d) Survival of Valid Bonds. If any Bond shall not be
presented for payment when the principal thereof becomes
due, either at maturity or at the date fixed for redemption
thereof or otherwise, or in the event any coupons shall not
be presented for payment at the due date, thereof, all
liability of the Issuer and the User to the owners thereof
and to the Trustee for the payment of such Bond or coupons,
as the case may be, shall forthwith cease, determine, and be
completely discharged whenever funds sufficient to pay such
Bond or coupons shall be paid to the Trustee by the User,
and such funds shall be segregated by the Trustee and held
in trust, without interest, for the benefit of the owners of
such Bond or coupons, as the case may be, who shall thereaf-
ter be restricted exclusively to such funds for the satis-
faction of any claim of whatever nature on their part
relating to such Bond or coupons.
(e) Unclaimed Funds. Any money deposited with the
Trustee in trust for the payment of the principal of,
redemption premium, if any, agreed liquidated damages, if
any, or interest on any Bond and remaining unclaimed for six
years after such principal of, redemption premium, if any,
agreed liquidated damages, if any, or interest on such Bond
has become due and payable shall be paid to the User;
provided, however, that before the Trustee shall be required
to make any such repayment, the Trustee may at the expense
of the User cause to be published at least once, in a
financial newspaper, journal, or publication of general
circulation in The City of New York, New York, or in the
State of Texas, a notice that such money remains unclaimed
and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be
repaid to the User. After the payment of such unclaimed
moneys to the User, the owner of such Bond or the owner of
the relevant coupon shall thereafter look only to the User
for the payment thereof, and all liability of the Trustee
with respect to such money shall thereupon cease.
(f) Rights of Parties. Except as herein otherwise
expressly provided, nothing in this Trust Indenture ex-
pressed or implied is intended or shall be construed to
confer upon any person, firm, or corporation other than the
User, the Issuer, the Trustee, and the owners of Bonds, any
19
right, remedy, or claim, legal or equitable, under or by
reason of this Trust Indenture or any covenant, condition,
or stipulation contained herein.
(g) Severability. In case any one or more of the
provisions of this Trust Indenture or of the Bonds, or any
interest coupons appertaining thereto, shall be held to be
invalid or ineffective as to any person or circumstance, the
remainder thereof and the application of such provision to
persons or circumstances other than those as to which it is
held invalid shall not be affected thereby.
(h) Law. The validity, interpretation, and perform-
ance of this Trust Indenture shall be governed by the laws
of the State of Texas.
Article 11. RECORDING. (a) Issuer and Trustee to
Record. The Issuer shall cause the Agreement and this Trust
Indenture to be filed in such manner and in such places as
are now required by law to establish initially the lien of
this Trust Indenture, and the priority thereof. Thereafter,
the Trustee shall (1) cause each memorandum, financing
statement, or continuation statement with respect to the
Agreement and this Trust Indenture to be filed, registered,
and recorded and to be refiled, reregistered, and rerecorded
in such manner and in such places as may be required by any
present or future law in order to publish notice of and
fully to protect the lien of this Trust Indenture and to
publish notice of and to protect the rights and security of
the owners of the Bonds and the rights of the Trustee under
the Agreement, the Bond Resolution, and this Trust Indenture
and (2) perform or cause to be performed from time to time
any other act as required by law, and execute and file or
cause to be executed and filed any and all instruments of
further assurance, that may be necessary for such publica-
tion and protection. The Issuer shall, when so requested by
the Trustee, execute all such instruments, memoranda, or
statements necessary to maintain, protect, or preserve the
interests assigned to the Trustee under this Trust Inden-
ture. The Trustee may obtain an opinion or advice of
counsel selected with reasonable prudence with respect to
any actions or documents that may be required by this
Article. Any act performed or documents obtained or
prepared by the Trustee in reliance upon such opinion or
advice of counsel shall be deemed satisfactory performance
by the Trustee of its obligations under this Article with
respect to the matters covered by such opinion or advice.
(b) Non -Encumbrance. This Trust Indenture is, and
always will be kept, a direct lien and security interest
upon the Installment Loan Payments, Liquidated Damages
Payments and other payments, the Debt Service Fund, and the
20
Construction Fund, and the Issuer will not create or suffer
to be created any lien prior to or on a parity with the lien
of this Trust Indenture or any part thereof.
Article 12. NOTICE TO TEXAS INDUSTRIAL COMMISSION. If
the User fails timely to make or pay any Installment Loan
Payment, Liquidated Damages Payment or other payment, or
upon receiving notice that a Determination of Taxability has
occurred, the Trustee promptly shall inform the Texas
Industrial Commission of such an occurrence, by sending
written notice to the following address:
Texas Industrial Commission
Attention: Executive Director
410 East Fifth Street
Box 12728, Capitol Station
Austin, Texas 78711
or the latest address specified by said Commission in
writing.
IN WITNESS WHEREOF, the Issuer acting through its Board
of Directors, has caused this Trust Indenture to be executed
in multiple counterparts, each of which shall be considered
an original for all purposes, in its name, and for and on
its behalf, by the President of such Board and attested by
the Secretary of such Board, and its corporate seal to be
hereto affixed; and the Trustee, to evidence its acceptance
of the trusts hereby created and.vested in it, has caused
this Trust Indenture to be executed in multiple counter-
parts, each of which shall be considered an original for all
purposes, in its behalf by one of its Vice Presidents,
attested by one of its Trust Officers, and its corporate
seal to be hereunto affixed, all as of the date first above
written.
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
By
President, Board of Directors
ATTEST:
Secretary, Board of Directors
(SEAL)
21
1 -t
f
REPUBLICBANK DALLAS, NATIONAL ASSOCIATION, TRUSTEE
By
Vice President
ATTEST:
(SEAL)
Trust Officer
22
STATE OF TEXAS,
County of Nueces.
}Ss:
PUBLISHER'S AFFIDAVIT v. 366465 CITY OF C.C.
--)c.).5
Before me, the undersigned, a Notary Public, this day personally came
BILLIE J. HENDERSON
ACCOUNTING CLERK
, who being first duly sworn, according to law, says that he is the
of the Corpus Christi Caller and The Corpus Christi Times,
Daily Newspapers published at Corpus Christi, Texas, in said County and State, and that the publication of
NOTICE OF A PUBLIC HEARING OF THE
of which the annexed is a true copy, was published in CORPUS CHRISTI CALLER TIMES
26th APRday one
on the IL 82day of 19 , and once each thereat tt-i- for
day
consecutive.
one Times.
16.20
• Alef-Le2s..4e2:2.......____L.
Subscribed and sworn to before me this 29th day of 19....
1. AP IL
ueces County, Texas
_r:"7 EDNA KOSTER
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