HomeMy WebLinkAbout19033 RES - 10/01/1985• •
A RESOLUTION
APPROVING AN AGREEMENT BY CORPUS CHRISTI INDUSTRIAL
DEVELOPMENT CORPORATION TO ISSUE BONDS FOR FURMAN PLAZA,
LTD. AND THE BOND RESOLUTION PROVIDING FOR THE ISSUANCE OF
SUCH BONDS; AND DECLARING AN EMERGENCY.
WHEREAS, Corpus Christi Industrial Development Corporation was created
under the auspices of City of Corpus Christi; and
WHEREAS, the City Council of the City of Corpus Christi (the City")
has, by written resolution declared that certain areas of the City be designated
as an Eligible Blighted Area ("Eligible Blighted Area") pursuant to the
Development Corporation Act of 1979, as amended, Article 5190.6, V.A.T.C.S. (the
"Act") and the rules promulgated thereunder; and
WHEREAS, Furman Plaza, Ltd., a Texas Limited Partnership desires to
finance, pursuant to the Act the acquisition of land and acquisition and
rehabilitation of an existing building thereon (which will be used for general
office and commercial space) located at 418 Peoples St. in the City (the
"Project"); and
WHEREAS, the Project is located within the Eligible Blighted Area; and
WHEREAS, the general public had an opportunity to make continents on the
Project prior to the adoption of this Resolution; and
WHEREAS, Section 103(k) of the Internal Revenue Code of 1954, as
amended, requires that the applicable elected representative of the City approve
the Bonds described below to be issued by Corpus Christi Industrial Development
Corporation on behalf of the City; 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:
SECTION 1. That the "Loan Agreement between Corpus Christi Industrial
Development Corporation and Furman Plaza, Ltd.", in substantially the form and
substance as attached to this Resolution and made a part hereof for all
purposes, is hereby approved, and Bonds in the principal amount of $3,000,000
may be issued pursuant thereto for the purpose of paying the cost of acquiring
and constructing or causing to be acquired and constructed the Project as
defined and described therein.
SECTION 2. That the "Guarantee Agreement between Corpus Christi
Industrial Development Corporation and Armando J. De Leon, Robert C. Seeds, Jr.
04P.134.01
19033 MICROFILMED
• ' • '
e
and Brian L. Leggett" in substantially the form and substance as attached to
this Resolution and made a part hereof for all purposes, is hereby approved.
SECTION 3. That the "Resolution Authorizing the Issuance of Corpus
Christi Industrial Development Corporation Revenue Bonds, Series 1985 and the
Execution of a Trust Indenture (Furman Plaza, Ltd. 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 Bonds may be issued as
provided for therein.
SECTION 4. That the Mayor of the City will approve the issuance of
the aforesaid Bonds and the Project described in the aforesaid Loan Agreement,
after a public hearing to be held on October 14, 1985, at 3:00 p.m., and such
approval shall be solely for the purposes of Section 103(k) of the Internal
Revenue Code of 1954, as amended, (the "Code") and the City shall have no
liabilities for the payment of the Bonds nor shall any of its assets be pledged
to the payment of the Bonds.
SECTION 5. That the City Council of the City hereby appoints
Mr. H. Thomas Utter as a hearing officer for purposes of conducting public
hearings required by Section 103(k) of the Code.
SECTION 6. That the City Council of the City approves the Project and
finds (i) that the Project will contribute significantly to the fulfillment of
the redevelopment objectives of the City for the Eligible Blighted Area by
increasing employment opportunity, increasing the property tax base and
promoting commerce within the City and the State of Texas; and (ii) that the
Project is in furtherance of the public purposes of the Act.
SECTION 7. That upon written request of the Mayor or five Council
members, copy attached, to find and declare an emergency due to the public
importance of the issuance of the Series 1985 Bonds creates an emergency and an
urgent public necessity that the issuance be accomplished as soon as possible
and without delay for the immediate preservation of the public peace, health and
safety of the citizens of the City, such finding of an emergency is made and
declared requiring suspension of the Charter rule as to consideration and voting
upon ordinances or resolutions at three regular meetings so that this resolution
is passed and shall take effect upon first reading as an emergency measure this
the 1st day of October, 1985.
ATTEST:
ity Secretary
APPROVED: 4 -r DAY OF OCTOBER, 1985
ss stanttorney
04P.134.01
THE CITY OF CORPUS CHRISTI, TEXAS
RESOLUTION
AUTHORIZING THE ISSUANCE OF CORPUS CHRISTI
INDUSTRIAL DEVELOPMENT CORPORATION REVENUE BOND
SERIES 1985
AND THE EXECUTION OF
A TRUST INDENTURE
(FURMAN PLAZA, LTD. PROJECT)
FUR2:9/19/85
TABLE OF CONTENTS
(The Table of Contents is not a part of the Resolution
but is for convenience of reference only)
PAGE
1
Title 1
Recitals 3
Resolution
SECTION 1. DESIGNATION, AMOUNT, AND PURPOSE 3
OF THE BONDS
SECTION 2. DATE, DENOMINATION, NUMBERS, AND 3
MATURITIES OF THE BONDS
3
SECTION 3. INTEREST ON THE BONDS 3
SECTION 4. GENERAL CHARACTERISTICS OF BONDS 3
(a) In General 4
(b) Registration Books 4
(c) payment of Registered Owner 5
(d) Notation of Prepayment 5
(e) Temporary Bonds
6
SECTION 5. FORM OF BONDS 15
SECTION 6. PLEDGE
SECTION 7. DEBT SERVICE FUND AND SPECIAL 15
REBATE FUND
(a) Establishment of Debt Service 15
Fund 15
(b) Accrued Interest 15
(c) Installment Loan Payments 17
(d) Redemption
(e) payments from Debt Service 17
Fund 17
(f) Immediately Available Funds
(g) Establishment of Special 17
Rebate Fund 17
(h) Investment of Funds
20
SECTION 8. SECURITY FOR FUNDS
•
PAGE
SECTION 9. THE USER'S PAYMENTS 21
(a) Unconditional Obligation 21
(b) Prepayments 21
SECTION 10. ADDITIONAL PARITY BONDS 21
(a) Additional Bonds 21
(b) Amendments to Trust Indenture
Unnecessary 23
SECTION 11. SPECIAL COVENANTS 23
(a) Installment Loan Payments
Pledged to Bonds Only 23
(b) Non -Encumbrance 23
(c) Performance by Issuer 23
(d) Certain Modifications
Prohibited 24
SECTION 12. BONDS ARE SPECIAL OBLIGATIONS 24
SECTION 13. AMENDMENTS 24
(a) Amendment with Consent of
Owners of 51% of Bonds 24
(b) Notice of Amendment 25
(c) Consent to Amendment 25
(d) Effect of Amendment 25
(e) Consent of Bondholders 26
(f) Ownership of Bonds 26
(g) Amendments Without Consent 26
SECTION 14. ESTABLISHMENT OF CONSTRUCTION FUND 26
(a) Deposit of Bond Proceeds into
Construction Fund 26
(b) Investment of Money in
Construction Fund 27
(c) Deposit of Accrued Interest,
Income, and Profits 27
(d) Expenditure of Money in the
Construction Fund 27
Page
SECTION 15. PAYMENTS FROM CONSTRUCTION FUND 28
(a) Issuer's Administrative Overhead
•
Expenses and Other Costs 28
(b) Reimbursements for and Payment
of Cost of Project 28
(c) Transfers to Special Rebate Fund 29
(d) Reliance by Trustee 29
SECTION 16. SURPLUS CONSTRUCTION FUNDS 29
(a) Disposition of Surplus Funds 29
(b) Disposition of Construction
Fund upon Acceleration and
Redemption 30
SECTION 17. DAMAGED, MUTILATED, LOST, STOLEN, OR
DESTROYED BONDS 30
(a) Replacement Bonds 30
(b) Application for Substitute
Bonds 31
(c) No Default Occurred 31
(d) Charge for Issuing Substitute
Bonds 31
(e) Authority for issuing Substitute
Bonds 31
SECTION 18. NO ARBITRAGE 31
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 1985, AND THE EXECUTION OF A TRUST INDENTURE
(FURMAN PLAZA, LTD. PROJECT)
THE STATE OF TEXAS
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
WHEREAS, Corpus Christi Industrial Development
Corporation (the "Issuer") is 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
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 Furman Plaza, Ltd.",
dated as of October 1, 1985 (the "Agreement"), has been duly
executed between the Issuer and Furman Plaza, Ltd. (the
"User"); and
WHEREAS, the User is a limited partnership organized
and existing under the laws of the State of Texas, is fully
qualified to transact business in the State of Texas; and
WHEREAS, the Issuer and the Guarantor, hereinafter
defined, have entered into a Guarantee Agreement dated as of
October 1, 1985 (the "Guarantee") pursuant to which Robert
C. Seeds, Jr., Armando J. De Leon and Brian L. Leggett
(collectively referred to as the "Guarantor") have guaran-
teed the User's obligations under the Agreement, including
particularly the obligation of the User to make Installment
Loan Payments; and
WHEREAS, the Agreement, together with the Guarantee
which is attached thereto and made a part thereof for all
purposes, is hereby adopted by reference for all purposes,
with the same effect as if they 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
Indenture (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 and Security Agreement dated as of October 1,
1985 (the "Deed of Trust"), providing further security for
the payment of the Installment Loan 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 Guarantee,
2
•
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,
Guarantee, 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:
Section 1. DESIGNATION, AMOUNT, AND PURPOSE OF THE
BONDS. The Issuer's bonds designated and to be known as
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION REVENUE
BOND, SERIES 1985 (FURMAN PLAZA, LTD. PROJECT) (the "Bond"
or the "Bonds") is hereby authorized to be issued in the
aggregate principal amount of $3,000,000 on behalf of City
of Corpus Christi 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, FOR FURMAN
PLAZA, LTD. (THE "USER") FOR THE SPECIFIC PURPOSE OF THE
PROMOTION AND ENCOURAGEMENT OF EMPLOYMENT AND THE PUBLIC
WELFARE.
Section 2. DATE, DENOMINATION, NUMBERS, AND MATURITIES
OF THE BONDS. The Bonds initially authorized hereby shall
be dated October 1, 1985, shall be issued and delivered in
the form of fully registered bonds, without coupons, payable
in installments to the registered owner thereof, or its
registered assigns, all in the manner hereinafter provided,
with the Bonds to be numbered R-1 upward, in the denomina-
tion and principal amount of $100,000, initially payable to
Maritime & Co., with the principal of said Bond to be
payable on October 1, 1995 as set forth in the FORM OF BOND
in Section 5.
Section 3. INTEREST ON THE BONDS. The Bonds initially
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
Bonds) to the scheduled due date, or date of prepayment or
redemption prior to the scheduled due date, of the principal
of the Bonds, at the rate of 11% per annum. The interest
shall be payable on the dates and in the manner provided in
the FORM OF BOND set forth in Section 5.
Section 4. GENERAL CHARACTERISTICS. (a) In General.
The Bonds 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 Bonds shall be
3
•
sealed), all as provided, and in the manner indicated, in
the FORM OF BOND set forth in Section 5. After the Bonds
have been authorized to be issued by the Board of Directors
of the Issuer, and prior to the delivery of the Bonds, the
Trustee shall authenticate the Bonds by executing the
Trustee's Certificate of Authentication appearing on the
Bonds as provided in Section 5. In addition, on the date of
delivery of the Bonds to the initial purchaser thereof, the
Trustee shall fill in the date of delivery of the Bonds in
the Delivery Certificate appearing on the Bonds 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 regis-
trations and transfers under such reasonable regulations as
the Issuer or the Registrar may prescribe; and the Registrar
will register or transfer as herein provided, any Bonds upon
presentation thereof at such office. The User, the
Guarantor, and each Bondholder shall have the right to
inspect such Bond Registration Books during the normal
business hours of the Trustee.
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
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,
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
4
the Trust Indenture whether or not such Bond shall be
overdue, and the Issuer, the Trustee, the User, and the
Guarantor 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, 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
appoints 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 infor-
mation in the Bond Registration Books, and the Trustee shall
also record in the Bond Registration Books all payments of
principal 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, limita-
tions, 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
the 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 presen-
tation 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.
5
•
Section 5. FORM OF BONDS. 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- $100,000
UNITED STATES OF AMERICA
STATE OF TEXAS
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
REVENUE BOND
SERIES 1985
(FURMAN PLAZA, LTD. PROJECT)
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION (the
"Issuer"), being 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 acting on behalf of
City of Corpus Christi, hereby promises to pay to Maritime &
Co., or its registered assigns, the aggregate principal
amount of
ONE HUNDRED THOUSAND DOLLARS
on October 1, 195 and to pay interest thereon, from the
date of delivery hereof (which date appears in the Delivery
Certificate endorsed on this Bond), on the balance of said
principal amount from time to time remaining unpaid, at the
rate of 11% per annum, and at a rate of 15% per annum or the
highest rate allowed by law on overdue principal and, to the
extent legally permissible, on overdue interest, with the
interest being payable on April 1, 1986, and on the first
day of each April and October thereafter while this Bond is
outstanding; provided that such principal and interest are
payable solely from the sources and in the manner herein-
after described, and solely as authorized and provided in
the Act.
THE PRINCIPAL of and interest on this Bond shall be
payable in lawful money of the United States of America,
without exchange or collection charges. Payments of
principal and interest shall be made to the registered owner
by check or draft mailed by Texas Commerce Bank -Corpus
Christi, N.A., Corpus Christi, Texas (the "Trustee", "Paying
Agent", and "Registrar" for this Bond) or its successor
6
•
appointed under the Trust Indenture (hereinafter defined),
to the registered owner at its address as it appears on the
Bond Registration Books kept by the Trustee; provided that
in the alternative such payment may be made by any other
method requested in writing by the registered owner, subject
to the approval of the Trustee. The final payment of
principal on this Bond shall be paid only upon surrender of
this Bond to the Trustee for cancellation. Any prepayment
or redemption of the principal of this Bond shall be made
only upon presentation of this Bond to the Trustee, who
shall make notation of such prepayment or redemption in the
Prepayment Record endorsed hereon.
THIS BOND is one of a series of Bonds dated as of
October 1, 1985 and authorized and issued in the aggregate
principal amount of $3,000,000 pursuant to a resolution
adopted by the Board of Directors of the Issuer (the
"Initial Bond Resolution") on behalf of City of Corpus
Christi 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 CORPUS CHRISTI, TEXAS, FOR FURMAN PLAZA, LTD.
(THE "USER") FOR THE SPECIFIC PURPOSE OF THE PROMOTION AND
ENCOURAGEMENT OF EMPLOYMENT AND THE PUBLIC WELFARE.
ON AND AFTER October 1, 1992, the unpaid principal of
this Bond is subject to optional prepayment or redemption
and may be prepaid or redeemed prior to its scheduled due
dates, by the Trustee, at the option of the User, with funds
furnished by the User, 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 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 installments
shall be prepaid or redeemed in $5,000 denominations or any
integral multiple thereof at the prepayment or redemption
price (expressed as a percentage of principal amount)
applicable to the date of prepayment or redemption falling
within the applicable redemption period, as set forth in the
following schedule, plus accrued interest to the date of
prepayment or redemption:
Prepayment or
Redemption Period Redemption Price (%)
October 1, 1992 - September 31, 1993 102
October 1, 1993 - September 31, 1994 101.5
October 1, 1994 - September 31, 1995 101
7
•
ON ANY DATE, the unpaid principal of this Bond is
subject to optional prepayment or redemption as a whole, and
may be prepaid or redeemed, prior to its scheduled due date,
by the Trustee at the option of the User, with funds fur-
nished 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, if one or more of the following events shall have
occurred:
(a) The Project shall have been substantially
damaged or destroyed to the extent that, in the opinion
of an independent licensed professional architect, (i)
the required restoration and repair could not reason-
ably be expected to be completed within a period of six
months, or (ii) the User is prevented or would likely
be prevented from using the Project for its normal pur-
poses for a period of six months or more; or
(b) Title to the whole or any substantial part of
the Project or the use or possession thereof shall have
been taken or condemned by a competent authority for
any public use or purpose to such an extent that the
User is prevented or, in the opinion of an independent
licensed professional architect, would likely be
prevented from using the Project for its normal
purposes for a period of six months or more.
To exercise any such option the User shall give written
notice to the Trustee and the Issuer, not later than the
90th day following the earliest date upon which any such
option could be exercised, which notice shall specify a
redemption date, which date may not be earlier than 45 days
after said notice is given, and shall further specify that,
as evidenced by the written opinion of an independent
licensed professional architect, one or more of such events
has occurred or one or more of such conditions is
continuing, and such determination shall be conclusive.
ON ANY DATE, the unpaid principal of this Bond is
subject to mandatory prepayment or redemption, as a whole,
and shall be prepaid or redeemed prior to its scheduled due
date, 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 occurrence of a
Final 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, plus an additional amount calculated by mul-
tiplying an amount equal to 2% of the unpaid principal
8
•
amount of this Bond by the number of complete three-month
periods elapsed between the date of the Taxable Event (as
defined and provided for in the Agreement) and the pre-
payment or redemption date, with such additional amount
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.
Such prepayment or redemption price shall constitute the
entire amount due with respect to this Bond as a result of
the occurrence of a Final Determination of Taxability.
IN ADDITION, if there shall be a Final Determination of
Taxability, the User shall be obligated to, and promptly
shall, pay an additional amount to the Trustee for the sole
benefit of the owner or owners of this Bond during the
period between the Taxable Event and the mandatory prepay-
ment or redemption date described and provided for in the
preceding paragraph of this Bond (the "Taxable Period").
Such payment shall be sufficient in aggregate to pay in
respect of principal of this Bond which was paid or prepaid
or redeemed during the Taxable Period, the amount the owner
hereof would have received as agreed liquidated damages if,
and assuming that, the aforesaid mandatory prepayment or
redemption date had occurred on the actual date of payment
or prepayment or redemption of such principal, the Trustee
shall pay such additional amount to the owner or owners of
this Bond during the Taxable Period, as shown by the Bond
Registration Books.
ON ANY DATE, the unpaid principal of this Bond is
subject to prepayment or redemption, and may be prepaid or
redeemed prior to the scheduled due date by the Trustee, (in
the denominations of $1,000 or any integral multiple there-
of), 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 comple-
tion 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.
9
•
AT LEAST 30 DAYS PRIOR to the date fixed for any pre-
payment or redemption of the unpaid principal 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 Registra-
tion 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 princi-
pal amount of this Bond which is to be prepaid or redeemed,
plus accrued interest thereon to the date fixed for pre-
payment 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 redemp-
tion is given and if due provision for payment of the
redemption price is made, all as provided above, the unpaid
principal 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 which
are to be prepaid or redeemed, shall be paid at the redemp-
tion price. Except as set forth above, the principal of
this Bond are not subject to prepayment or redemption prior
to their scheduled due dates.
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
of the payments designated as "Installment Loan Payments" to
be made or paid, or caused to be made or paid, to the
Trustee, pursuant to the Initial Bond Resolution, the Trust
10
•
Indenture and the "Loan Agreement between the Corpus Christi
Industrial Development Corporation and Furman Plaza, Ltd.",
dated as of October 1, 1985 (the "Agreement"). The User,
a Texas Limited Partnership, is unconditionally obligated
(subject to the provisions of Sections 6.01 and 6.02 of the
Agreement relating to merger, consolidation, transfer of
assets, and assignment) 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 the Trust
Indenture when due, subject to and as required by the provi-
sions of the Agreement, the Initial Bond Resolution, and the
Trust Indenture.
IN ADDITION, Robert C. Seeds, Jr., Armando J. De Leon
and Brian L. Leggett (collectively referred to as the
"Guarantor") and the Issuer have entered into a Guarantee
Agreement (which is attached to and made a part of the
Agreement for all purposes) dated as of October 1, 1985 (the
"Guarantee"), pursuant to which the Guarantor has guaranteed
to the Issuer all of the Installment Loan Payments. The
Issuer has assigned to the Trustee all its right, title, and
interest in and to the guarantee of the Installment Loan
Payments.
THIS BOND is secured by a Trust Indenture dated as of
October 1, 1985 (the "Trust Indenture"), whereunder Texas
Commerce Bank -Corpus Christi, N.A., 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 of this Bond and all other charges may
be declared to be due and payable immediately upon the
conditions and in the manner provided in the Trust
Indenture. This Bond is additionally secured by a Deed of
Trust and Security Agreement 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 Guarantee, 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 Guarantor, the Issuer, the
11
•
•
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, and the
consent of owners of 51% in aggregate principal amount of
the then outstanding Bonds, 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 pursuant to the Agree-
ment and entitled to the benefits of and secured by the
Trust Indenture, the Guarantee, 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 51% 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, the
Guarantee, and the 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, City of Corpus
Christi, 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
obligated 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, City of Corpus Christi, nor any other
political corporation, subdivision, or agency of the State,
of Texas, is pledged to the payment of the principal 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
12
•
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 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, the User, and the Guarantor 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, the
User, and the Guarantor 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 signatures of the President and the 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)
13
•
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.
Texas Commerce Bank -Corpus
Christi, N.A., as Trustee
By
Authorized Officer
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
authorizes the transfer of this Bond on the Bond
Registration Books of the Trustee. Such assignment shall
not be effective 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.
DATE OF REGISTERED SIGNATURE OF
ASSIGNMENT OWNER ASSIGNEE REGISTRAR
FORM OE DELIVERY CERTIFICATE
DELIVERY CERTIFICATE
THIS BOND was delivered to and paid for by the pur-
chaser hereof on
14
Date
of
Payment
•
FORM OF PREPAYMENT RECORD
Principal
Prepayment or
Redemption
PREPAYMENT RECORD
Remaining
Principal
Balance
Name & Title of Signature of
Authorized Officer Authorized
Making Entry Officer
Section 6. PLEDGE. The Bonds and the interest thereon
are and shall be payable from and secured by a first lien on
and pledge of the payments designated as Installment Loan
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 are further pledged irrevocably to the estab-
lishment and maintenance of the Debt Service Fund herein-
after created.
Section 7. DEBT SERVICE FUND AND SPECIAL REBATE 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.
of the Bond to the initial
interest, if any, received
and delivery of the Bond,
Trustee into the Debt Service
Immediately after the delivery
purchaser thereof, all accrued
from the proceeds from the sale
shall be transferred by the
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
15
•
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 the 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
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 (including any agreed liquidated damages)
specified therein; and
(4) Promptly after the occurrence of a Final
Determination of Taxability, the additional amount
required to pay the agreed liquidated damages to
the owner of the Bonds for any principal which was
unpaid on the date of any Taxable Event, but which
were paid or redeemed prior to the prepayment or
redemption of all unpaid principal after a Final
Determination of Taxability, all as provided in
the FORM OF BOND set forth in Section 5; and
(5) 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; and
(6) Promptly after receipt of each statement and
request for payment, an amount equal to the
reasonable 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 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 Installment Loan
16
•
•
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, from the date any
such payment was due until payment thereof.
(d) Redemption. The Bonds initially authorized hereby
shall be subject to redemption, and may or shall be
redeemed, as specified in the FORM OE BOND set forth in
Section 5.
(e) 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.
(f) Immediately Available Funds. The User shall make
all Installment Loan Payments in funds that will be immedi-
ately available and allow the Paying Agent to pay, in lawful
money of the United States of America, the principal, inter-
est, and other amounts with respect to the Bonds, when due.
(g) Establishment of Special Rebate Fund. A separate
and special trust fund to be designated and known as the
Special Rebate Fund shall be established by the Issuer with
the Trustee for the benefit of the United States and the
User, as their interest may appear pursuant to the Bond
Resolution, Trust Indenture and the Agreement, 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. There shall be
established within the Special Rebate Fund two separate
accounts to be designated and known as the Deposit Account
and the Earnings Account, respectively.
(1) Payments into the Special Rebate Fund. The
Trustee shall pay into the Earnings Account of the
Special Rebate Fund, within twenty days after each
successive anniversary of the date of issuance of each
issue or series of Bonds, (A) out of amounts then
available in the Deposit Account of the Special Rebate
Fund and then (B) out of payments received from the
17
•
User to the extent provided in Section 4.08 of the
Agreement, an amount equal to the aggregate net income
(determined in accordance with federal income tax
accounting principles) attributable to the amounts held
in the Deposit Account (such income to be determined
without regard to transaction costs incurred in
acquiring, carrying, selling or redeeming investments
held therein, and without regard to whether such income
or its recipient might not otherwise be subject to
federal income taxation).
Immediately following the payment into the
Earnings Account, but in any event within twenty days
after each successive anniversary date of each issue or
series of Bonds, an amount equal to the excess of (A)
the Tentative Rebate Amount determined by the User as
of the related anniversary date over (B) the amount
theretofore deposited into the Deposit Account, net of
the Excess Deposits, as hereinafter defined (the
"Excess Amount"), shall be transferred by the Trustee
out of the Construction Fund into the Deposit Account
of the Special Rebate Fund, provided that such transfer
from the Construction Fund shall be made only to the
extent the Excess Amount is attributable to earnings on
investments of moneys held in the Construction Fund.
In the event that the Excess Amount is determined by
the User to be greater than the amount transferred from
the Construction Fund, the Trustee shall, within such
twenty days after each anniversary date, notify the
User of the amount of the deficiency in the Deposit
Account, and the User shall, within five days of the
receipt of such notice, pay such deficiency to the
Trustee for deposit in the Deposit Account pursuant to
Section 4.08 of the Agreement.
To the extent that, upon any anniversary date of
the issuance of each issue or series of Bonds, the net
amount theretofore deposited into the Deposit Account
and not theretofore withdrawn pursuant to this
paragraph exceeds the Tentative Rebate Amount
determined as of such anniversary date (the "Excess
Deposit"), such Excess Deposit in the Deposit Account
shall be retained therein unless the Trustee shall have
received instructions from the User that such Excess
Deposit is either (i) to be transferred to the Debt
Service Fund or (ii) to be paid directly to the User.
The obligation to make payments to the Trustee for
deposit into the Special Rebate Fund is a direct
obligation of the User, and the Issuer shall have no
obligation or duty with respect to the Special Rebate
Fund.
18
• •
(2) Disbursement of the Special Rebate Fund. The
amounts in the Special Rebate Fund shall be used solely
for the payment to the United States of amounts
described under Section 103(c)(6)(D) of the Code, and
the Regulations, all as may be applicable to the Bonds.
Such payment shall be made in accordance with the
requirements of Section 103(c)(6)(E) of the Code, and
the Regulations, the first installment of such payment
to be made within thirty days after the fifth
anniversary of the date of issuance of each issue or
series of Bonds, with each subsequent installment of
such payment to be made within five years of the making
of the next preceding installment, and with the last
installment of such payment to be made within thirty
days after the final retirement of the Bonds.
(3) Exception to Application of this Subsection.
Notwithstanding anything contained herein to the
contrary, the provisions of this Section 7(g) shall not
apply to the Trustee, the Issuer or the User if, (i)
within 180 days from the date of delivery of the Bonds,
all moneys in the Construction Fund are either (A)
expended to finance the Project, or (B) expended to
purchase and cancel, redeem or otherwise retire Bonds
or (ii) the proceeds of the Bonds, including any
investment earnings thereon, have been applied in a
manner which, in the opinion of Bond Counsel, will not
adversely affect the tax-exempt status of interest on
the Bonds.
(h) Investment of Funds. Any money held as part of
the Debt Service Fund or Special Rebate Fund shall be
invested or reinvested by the Trustee, upon the written
direction of the Approving Partner in any obligations,
including certificates of deposit of the Trustee. The
Trustee shall make no investments except as specifically
directed by the Approving Partner. The User agrees that it
will not direct the Trustee to make any Prohibited Payment.
The investments of the Debt Service Fund and the Special
Rebate 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 the Special Rebate
Fund, and any losses on investments thereon shall be charged
against the Debt Service Fund and the Special Rebate Fund.
If at any time it shall become necessary that some or all of
the investments made with the moneys from the applicable
fund be redeemed or sold to raise moneys necessary to comply
with the provisions of this Initial Bond Resolution or the
19
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 Partner
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,
redeeming, or selling of any investment which was not
authorized by written direction of the Approving Partner.
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 Partner
and thereafter the Trustee shall be relieved of all
responsibility 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
applicable fund, and such additional deposits shall consti-
tute additional amounts of Installment Loan Payments.
(i) Restriction on Amount in Debt Service Fund.
Amounts on deposit in the Debt Service Fund will not exceed
the amount necessary to pay the principal of and interest on
the Bonds during the succeeding twelve-month period. The
Debt Service Fund will be completely depleted at least once
during each twelve-month period except for an amount that
does not exceed the Gross Earnings (hereinafter defined) on
the Debt Service Fund during the twelve-month period
preceding such date of depletion. The Gross Earnings on the
Debt Service Fund for any Bond Year (hereinafter defined)
shall be less than $100,000. The term Gross Earnings means
the aggregate amount earned on all investments acquired with
or allocated to amounts on deposit in the Debt Service Fund
including amounts earned on such amounts. The term Bond
Year with respect to the Bonds means the one year period
beginning on the day after the preceding Bond Year, and the
first Bond Year begins on the closing date and ends one year
later.
Section 8. SECURITY FOR FUNDS. All uninvested money
in all Funds established pursuant to this Initial Bond
Resolution (including the Debt Service Fund, the Special
Rebate Fund and the Construction 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.
20
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
relating 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 to the Trustee
in the amounts required by Section 7(c) 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 by the User shall be and
constitute the Installment Loan Payments as contemplated and
required by the Agreement. Each Bondholder is and shall be
entitled to rely unconditionally 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 interest payment,
and any such prepayment, and any earnings thereon, shall be
applied by the Trustee to the payment of each interest
payment; provided that the prepayment of any unpaid interest
on the Bonds prior to their due dates, with funds from any
source (whether from Installment Loan Payments or other-
wise), shall not relieve the User of its obligation to make
or pay, or cause to be made or paid, each interest payment
as specified in Section 9(a), when due with respect to any
remaining interest on 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 of
Installment Loan Payments pursuant to the Agreement, and
21
secured by the Trust Indenture, the Deed of Trust and the
Guarantee, 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, 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 or
Vice President and Secretary or Assistant Secretary of
the Board of Directors of the Issuer to the effect that
no 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 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 reasonable
Trustee, Registrar, and Paying Agent fees and expenses
attributable to such Additional Bonds;
(iv) The Approving Partner approves in writing the
Bond Resolution authorizing the issuance of such series
or issue of Additional Bonds, as required by the
Agreement;
22
•
(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 Commission expressly gives its prior
approval to the issuance of such Additional Bonds.
(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 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 Pledged to Bonds Only.
Other than for the payment of the Bonds, as provided in this
Initial Bond Resolution and the Trust Indenture, the
Installment Loan Payments have not in any manner been
pledged 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 Construction Fund, or any
property or moneys deposited with 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
23
cause to be made or paid, when due, all Installment Loan
Payments, 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, the Guaran-
tee, 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 political 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 51% of Bonds. The owners of 51% in aggregate
principal amount of the then outstanding Bonds and the
Approving Partner of the User 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 and the
Issuer 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;
24
•
(4) modify the terms of payment of principal of,
redemption premium, if any, liquidated damages, if
any, or interest on the outstanding Bonds, or
impose any conditions with respect to such pay-
ments;
(5) 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 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 by registered or certified mail to the owner of
each Bond as shown by the Bond Registration Books required
by the terms hereof to be kept by the Trustee. 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
giving of said notice, the Issuer shall receive an instru-
ment or instruments executed by the owners of at least 51%
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.
25
(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
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 51% 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 the
appropriate entries in the Bond Registration Books
maintained by the Trustee as Registrar.
(g) Amendments Without Consent. Notwithstanding the
provisions of (a) through (f) of this Section, without the
consent of the Bondholders, but subject to approval of the
Approving Partner 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 Indenture, 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
Bondholders, provided that no such amendment shall be made
contrary to the second proviso to Section 13(a), and a duly
certified or executed copy of each such amendment shall be
filed with the Trustee and each registered Bondholder.
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
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.
26
(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 Partner in any obligations, including certificates
of deposit. The Trustee shall make no investments except as
specifically directed in writing by the Approving Partner.
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 Partner 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
provisions 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 Partner, 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 Partner.
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 Partner, 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 Partner 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
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.
(d) Expenditure of Money in the Construction Fund.
All amounts held in the Construction Fund shall, as of the
27
•
third anniversary date of the date of delivery of the Bonds,
be either (1) expended to finance the Project, (2) applied
to purchase and cancel, redeem or otherwise retire Bonds or
(3) applied in a manner which, in the opinion of Bond
Counsel, will not adversely affect the tax-exempt status of
interest on the Bonds.
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 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 Partner. 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,
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
28
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). Notwithstanding the foregoing,
the User shall not requisition from the Construction
Fund an amount in excess of $444,250.00 to finance the
cost of land or any interest thereon.
(c) Additional Certificates and Materials to be
Furnished with Certain Requisitions. Requisitions described
in this subsection shall also be accompanied by such of the
following certificates and materials as the Bondholders may
request in writing, namely:
(1) In the case of a requisition for the payment or
reimbursement of a Project Cost pertaining to the
(a) acquisition of real estate or (b) construc-
tion, reconstruction or other work upon a
building, structure, site improvement or fixture,
the first such requisition also may be required to
be accompanied or preceded by
(A) A Survey of the Project, with a certificate
of a licensed professional surveyor thereon,
dated within thirty (30) days prior to such
delivery, showing the Project, the dimensions
and the area thereof, dimensions and
29
locations of all improvements, utilities,
parking areas, driveways, easements, the
location of any wetlands, zoning district
lines and adjoining streets;
(B) A mortgage title insurance policy, current
ALTA Loan Policy Form, standard exceptions
deleted, issued by a title insurance company
qualified to do business in The State of
Texas and satisfactory to the Bondholders,
naming the Trustee as the insured, as to
title to the Project being vested in Borrower
in fee simple subject only to Permitted
Encumbrances (as defined in the Deed of
Trust) :
(C) Payment and lien payment bonds, if any,
required by the contract for payment under
which the requisition is filed, which bonds
shall name the Trustee as dual obligee;
(D) A copy of the construction or architects
contract, if any, for payment under which the
requisition is filed, and assignments
thereof; and
(E) Copies of all building and other permits
necessary to authorize construction or other
work for payment for which the requisition is
filed.
(2) In the case of a requisition for the payment or
reimbursement of a Project Cost relating to
construction, reconstruction or toher work on a
building, structure, site improvement or fixture,
the requisition may also be reuigred to be accom-
panied by a certificate signed by a licensed
professional architect to the effect
(A) that the services and materials with respect
to which the requisition is furnished are in
accordance with the Project Specifications as
then in effect and with all applicable
building and zoning laws, codes and regula-
tions; and
(B) that all approvals, licenses and permits
required for the construction, completion and
intended use of the Project have been
obtained except those, if any, not then
issuable because of the state of completion
of the Project and that no reason is known to
30
(3)
exist why any such subsequent approval,
license or permit may not be issued or
granted in ordinary course.
Subsequent requisitions relating to construction,
reconstruction or other work on a building,
structure, site improvement or fixture, may also
be required to be accompanied by other
certificates and materials as follows:
(A) An endorsement of the title insurance policy
mentioned in item (B) of paragraph (1) above
that the title of the Borrower to the Project
is unchanged;
(B) Copies of all constractors' or vendors'
applications for payment, invoices or other
statements for the work or materials to which
such requisition pertains; and
(C) AIA forms G702 and G703 signed by the general
contractor for the Project and approved by the
architect and the Approving Partner;
(d) Requisitions for Final Payments. All requisitions
for final payments, and for payments of any percentage
theretofore entitled to be retained, of or under the related
contract, invoice or statement shall be acocmpanied by or
include (1) the certifications required by subsection 15(b),
and (2), if required, the certificates and materials
required by items 15(c). Each such requisition for payment
of a Project Cost to which item 15(c) pertains shall also be
accompanied by a waiver or waivers of lien by all persons
entitled to file a mechanic's, vendor's or other lien or by
evidence satisfactory to the Bondholders that the time for
filing such liens has expired and that no such lien has been
filed. No requisition to which item 15(c) pertains shall be
submitted for payment of a retained percentage until after
delivery of the certificate of completion referenced in
section 16(a) below, and a certificate of occupancy issued
by the City of Corpus Christi.
(e) Transfers to Special Rebate Fund. Notwithstanding
paragraph (b) above, the Trustee is hereby authorized to
transfer to the Special Rebate Fund the amount described in
Section 7(g)(1) hereof.
(f) 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
31
•
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 Partner 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
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 of the Bonds in the manner set forth in the FORM
OF BOND in Section 5 for the prepayment or redemption of
principal of the Bonds with surplus Construction Fund
moneys, to the extent of any such available funds; provided
that prior to 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 transferred to the Deposit
Account of the Special Rebate Fund to the extent that the
amount therein is less than the Tentative Rebate Amount
computed by the User as of the date of such acceleration or
redemption and the balance of such amount shall be
transferred immediately by the Trustee to the Debt Service
Fund 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,
32
•
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
satisfaction of the loss, theft, or destruction, and of the
ownership of such Bond. In every case of damage or mutila-
tion of a Bond, the applicant shall surrender the Bond so
damaged or mutilated.
(c) No Default Occurred. Notwithstanding the fore-
going 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, redemp-
tion 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
33
•
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, indirect or gross
proceeds thereof at any time throughout the term thereof
which would through the application of Section 103(c) of the
Code, cause the Bonds to be treated as obligations which are
not described in Section 103(a) of the Code; and by this
covenant the Issuer and the User are obligated to comply
with the requirements of the aforesaid Section 103(c) of the
Code and all applicable and pertinent Regulations relating
to arbitrage bonds.
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 ihh BONDS. At the specific
request of the User, the Bonds are hereby authorized to be
sold, and shall be delivered to Maritime & Co., 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 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:
34
TRUST INDENTURE
BETWEEN
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
AND
TEXAS COMMERCE BANK -CORPUS CHRISTI, N.A., TRUSTEE
(FURMAN PLAZA, LTD. PROJECT)
Pursuant to and under this Trust Indenture the Corpus
Christi Industrial Development Corporation has granted a
security interest in and assigned to Texas Commerce Bank -
Corpus Christi, N.A., as Trustee, all of its interests in
all "Installment Loan Payments" due pursuant to and under
the "Loan Agreement between Corpus Christi Industrial
Development Corporation and Furman Plaza, Ltd." (and in the
"Loan Payment Guarantee" under the "Guarantee Agreement"
attached to and made a part of said Loan Agreement) to
secure its Revenue Bonds, Series 1985 (Furman Plaza, Ltd.
Project).
DEBTOR: SECURED PARTY:
Corpus Christi Industrial
Development Corporation
302 S. Shoreline
P. 0. Box 9277
Corpus Christi, Texas 78469
Texas Commerce Bank -Corpus
Christi, N.A., as Trustee
802 N. Carancahua
Corpus Christi, Texas 78403
•
•
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
FUND 4
ARTICLE 3. NOTICE TO THE USER AND THE GUARANTOR 4
ARTICLE 4. ACCOUNTS AND RECORDS 4
ARTICLE 5.
(a) Separate Records to be Kept 4
(b) Annual Report 4
(c) Right to Inspect 5
(d) Special Rebate Fund Records 5
ENFORCEMENT OF RIGHTS IN CASE OF
DEFAULT 5
(a) Appointment of Trustee and
Rights of Holder 5
(b) Control by Trustee 6
(c) Events of Default 6
(d) Declaration of Principal
and Interest Due 8
(e) Enforcement by Trustee 8
(f) Remedies Non -Exclusive 8
(g) Waiver of Defaults 9
(h) Discretion of Trustee 9
(i) Application of Moneys 9
(j) Judicial Proceedings 10
(k) Enforcement of Remedies
Without Possession of Bonds 10
(1) Direction by Majority in
Principal Amount of Bondholders 11
(m) Notice by Trustee 11
(n) Concurrence of Bondholders 11
(o) Default of Payments 11
(p) Notice to User of Past Due
Payments 12
•
PAGE
ARTICLE 6. CONCERNING THE TRUSTEE 12
(a) Not Accountable for Bond
Proceeds 12
(b) Reliance by Trustee 12
(c) Compensation of Trustee from
Debt Service Fund 13
(d) Limited Responsibilities 13
(e) Advice 14
(f) Trustee May Own Bonds 14
(g) Fees 14
ARTICLE 7. SUCCESSOR TRUSTEE 15
(a) Resignation of Trustee 15
(b) Removal of Trustee 15
(c) Appointment of Successor
Trustee 15
(d) Transfer to Successor Trustee 16
(e) Merger or Consolidation of
Trustee 16
ARTICLE 8. RELEASE OF INDENTURE AND SATISFACTION
OF INDEBTEDNESS 16
ARTICLE 9. AMENDMENTS 17
ARTICLE 10. MISCELLANEOUS PROVISIONS 17
(a) Acknowledgements and
Ownership of Bonds 17
(b) Trustee May Require Proof
of Ownership 18
(c) Consent of Bondholders 18
(d) Survival of Valid Bonds 18
(e) Unclaimed Funds 18
(f) Rights of Parties 19
(g) Severability 19
(h) Law 19
ARTICLE 11. RECORDING 19
(a) Trustee to Record 19
(b) Non -Encumbrance 20
ARTICLE 12. NOTICE TO COMMISSION 20
Execution by the Issuer 21
Execution by the Trustee 21
•
TRUST INDENTURE
THE STATE OF TEXAS
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
•
•
•
•
THIS TRUST INDENTURE, dated as of October 1, 1985,
executed by and between Corpus Christi Industrial Develop-
ment Corporation (the "Issuer"), a nonetock, 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 Texas Commerce Bank -
Corpus Christi, N.A., 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
Corpus Christi, Texas, as Trustee (the "Trustee"):
WITNESSETH THAT:
WHEREAS, a "Loan Agreement between Corpus Christi
Industrial Development Corporation and Furman Plaza, Ltd.",
dated as of October 1, 1985 (the "Agreement") has been duly
executed between the Issuer and Furman Plaza, Ltd. (the
"User"), with the User being a limited partnership existing
under the laws of the State of Texas, being fully qualified
to transact business in the State of Texas; and
WHEREAS, attached to and made a part of the Agreement
is a "Guarantee Agreement" between the Issuer and Robert C.
Seeds, Jr., Armando J. DeLeon and Brian L. Leggett,
individuals residing in the State of Texas (collectively
referred to as the "Guarantor") whereunder the Guarantor
has guaranteed all obligations of the User under the
Agreement, and particularly the obligation of the User to
make the Installment Loan Payments required therein; and
WHEREAS, an executed copy of the Agreement, including
the Guarantee Agreement, has been filed with the Trustee,
and for all purposes of this Trust Indenture the term
"Agreement" shall mean and include the Guarantee Agreement;
and
WHEREAS, pursuant to the Agreement the Board of
Directors of the Issuer has duly adopted a "RESOLUTION
AUTHORIZING THE ISSUANCE OF CORPUS CHRISTI INDUSTRIAL
DEVELOPMENT CORPORATION REVENUE BOND, SERIES 1985 AND THE
EXECUTION OF A TRUST INDENTURE (FURMAN PLAZA, LTD.
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
CORPORATION REVENUE BOND, SERIES 1985 (FURMAN PLAZA, LTD.
PROJECT), in the aggregate principal amount of $3,000,000,
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
Resolution 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
Resolution) 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" to be
made or paid, or caused to be made or paid, by the User
and/or the Guarantor (or its or their successors or assigns
under certain circumstances) to the Trustee; and
WHEREAS, the User and the Trustee have entered into a
Deed of Trust and Security Agreement dated as of October 1,
1985 (the "Deed of Trust"), providing further security for
the payment of the Installment Loan 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
2
•
WHEREAS, this Preamble constitutes an integral part of
this Trust Indenture.
NOW, THEREFORE, THIS TRUST INDENTURE WITNESSETH:
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
and/or the Guarantor under the Agreement and the Bond
Resolution, has granted a security 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 as required and
provided in the Agreement and the Bond Resolution, (ii) the
Debt Service Fund, Special Rebate Fund and the Construction
Fund created by the Initial Bond Resolution, and (iii) all
of its right, title, and interest in and to the "Loan
Payment Guarantee", as defined, required, and provided in
the Guarantee Agreement upon, and subject to the terms,
conditions, stipulations, covenants, agreements, trusts,
uses, and purposes hereinafter expressed; 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 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
Indenture, and agrees to carry out and perform, punctually
and effectively, such duties, obligations, and requirements
for the benefit of the Issuer, the User, the Guarantor, and
the owners of the Bonds. 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
3
•
the Issuer, and (iv) the Trustee will remain the Trustee
under the Deed of Trust so long as it is the Trustee
hereunder.
Article 2. DEBT SERVICE FUND, SPECIAL REBATE FUND AND
CONSTRUCTION FUND. The Debt Service Fund, Special Rebate
Fund and the Construction Fund created by the Initial Bond
Resolution are hereby confirmed and established, respec-
tively, in trust, with the Trustee, and the 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 Indenture.
Article 3. NOTICE TO THE USER. On or before the 15th
day prior to each date upon or before which each Installment
Loan 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 required by each Bond Resolution to be made by the
User to the Trustee and deposited 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 to the Trustee as
required by the Agreement and each Bond Resolution and the
Trustee shall incur no liability for failure to give such
notice.
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, the
Debt Service Fund, Special Rebate Fund and the Construction
Fund.
(b) Annual Report. Within 90 days after the anniver-
sary date of this Trust Indenture, the Trustee will furnish
to the Issuer, the User, the Guarantor, and any owner of any
outstanding Bonds who may so request, a copy of a report by
the Trustee covering the preceding year, showing the follow-
ing information:
(1) a detailed statement concerning the receipt
and disposition of all Installment Loan Payments and
4
the disposition of the amounts
(until the Construction Fund
disposed of).
(2) an asset statement
Debt Service Fund and of the
the Construction Fund shall
of)
in the Construction Fund
shall have been fully
or balance sheet of the
Construction Fund (until
have been fully disposed
(c) Right to Inspect. The Issuer, the User, the
Guarantor, 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 Installment Loan Payments, Debt Service
Fund, Special Rebate Fund and the Construction Fund.
(d) Special Rebate Fund Records. The Trustee shall
maintain a record of the periodic determinations by the User
of the Tentative Rebate Amount for a period beginning on the
first anniversary date of the issuance of the Bonds and
ending on the date 6 years after the final retirement of the
Bonds. Such record shall state each such anniversary date
and summarize the manner in which the Tentative Rebate
Amount, if any, was determined. In addition, at least
thirty days prior to each such anniversary date the Trustee
shall give the User written notice requesting that the User
make the determination, payments and notices required by
Section 7(g) of the Initial Bond Resolution. Notwithstand-
ing the foregoing, the provisions of this paragraph (d)
shall not be applicable if the Construction Fund is fully
depleted within 180 days from the date of issuance and
delivery of the Bonds.
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
Resolution; 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
defined) 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
aforesaid instruments, including the right to have withdrawn
and discontinued at any stage thereof any proceedings taken
5
•
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
Resolution, 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
fulfillment of all other conditions precedent specified in
this Trust Indenture, the Trustee shall have received the
written request of the owners of not less than 25% in
aggregate principal amount of the Bonds then outstanding and
shall have been offered reasonable indemnity and shall have
refused, or for 30 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
indemnity satisfactory to the Trustee against expenses,
charges, and liability shall, forthwith take such
appropriate action by judicial proceedings or otherwise to
enforce the covenants of the User, the Guarantor, 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,
6
•
if any, and interest on the Bonds, whether payment is
required at maturity or by call for redemption or
otherwise; provided, however, that if such failure
shall arise other than by reason of a default by the
User under the Bond Resolution and the Agreement, the
continuation of such failure for two days.
(2) the failure of the User or the Guarantor to
make or pay, or cause to be made or paid, any
Installment Loan Payment, or any part thereof, when and
to the extent due and required by the Agreement or the
Bond Resolution.
(3) the dissolution or liquidation of the User or
the Guarantor in any manner not specifically authorized
by the Agreement, or the filing by the User or the
Guarantor of a voluntary petition in bankruptcy or
failure by the User or the Guarantor 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 commission by the User or the
Guarantor of any act of bankruptcy, or failure of the
User or the Guarantor generally to pay its debts as
they become due, or entry of an order for relief of the
User or the Guarantor in a bankruptcy case of the User
or the Guarantor or assignment by the User or the
Guarantor of a substantial portion of its assets for
the benefit of its creditors, or the entry by the User
or the Guarantor into an agreement of composition with
its creditors, or the entry of an order or decree
applicable to the User or the Guarantor in any
proceeding for its reorganization or arrangement in any
proceedings instituted under the provisions of any
applicable federal or state bankruptcy statutes,
including the federal Bankruptcy Code, as they now
exist or are hereafter amended or enacted.
(4) the User or the Guarantor 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 or the Guarantor not remedying
such default within 30 days after written notice to do
so has been received by the User and the Guarantor 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.
7
•
(5) the failure by the User to observe or perform
any covenant or condition specified in the Deed of
Trust.
(6) Title to the Project (as defined in the
Initial Bond Resolution) shall vest in anyone other
than the User.
(7) The transfer of any general partnership
interest in the User.
(8) Two or more of Robert C. Seeds, Jr., Armando
J. DeLeon, and Brian L. Leggett shall cease serving as
general partners of the general partner of the User.
(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
immediately 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.
(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 and/or the Guarantor, 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 located in Nueces County, Texas,
against the Issuer, its Board of Directors, and its
officers, employees, and/or agents, and to obtain judgments
against the User and/or the Guarantor for any Installment
Loan Payments due but unpaid into the Debt Service Fund, or
for any other amounts due hereunder, 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
conferred upon or reserved to the Trustee is intended to be
8
•
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, upon the written
request of the owners of a majority in aggregate 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 Installment Loan
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 Guarantor, 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, 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:
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.
9
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 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 from the date of redemption or maturity to date
of payment.
FOURTH: to the payment of principal of 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 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
particular 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.
Notwithstanding 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 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) .
(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
10
•
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 the production thereof on the trial or other
proceedings relative 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,
pursuant 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.
(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 and/or the
Guarantor, 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 protected in relying upon any
11
•
such request, demand, authorization, 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, or in the per-
formance 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) 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 are to be paid by
the User and/or the Guarantor directly to the Trustee. In
the event that any such payments are not timely made, the
Trustee shall immediately notify the User and the Guarantor
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 mail is received or telephonic notice
is given, whichever is earlier. Failure of the Trustee to
give, or the User or the Guarantor to receive, such notice
shall not relieve the User or the Guarantor 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.
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 Bond Resolution, the Agreement, or for the sufficiency
of the security for the Bonds. 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 Installment Loan Payments, the
Debt Service Fund, the Special Rebate Fund and the Construc-
tion 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. The Trustee
acknowledges that under the Bond Resolution, the User shall
12
•
not requisition an amount in excess of $444,250.00 for the
Cost of the Project relating to the acquisition of land.
(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 registered in the name of such owner on the
Bond Registration Books kept by the Trustee. 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
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
13
•
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
direction. 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,
accountant, 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
secured by this Trust Indenture with the same rights which
it would have if it were 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, as part of
the Installment Loan Payments the User shall pay to the
Trustee its charges for performing the duties of Trustee,
Registrar, and Paying Agent for the Bonds as set forth in
its Schedule of Fees for Services as Trustee and for Paying
Agent," attached hereto as Exhibit A, as the same is from
time to time amended. 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 change in the foregoing
14
•
charges for services or any charges for extraordinary
services until such contest is resolved; provided, however,
that in the event the reasonableness of the charges is
contested in a court proceeding, reasonable attorney's fees
of the prevailing party may be adjudged against the other
party; and provided, further, that in the event the charges
are adjudged as reasonable, the User and/or Guarantor shall
pay to the Trustee interest on such charges at a rate of 15%
per annum. 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 60 days written
notice to the Issuer, the User, the Guarantor, and to all
owners of Bonds as shown on the Bond Registration Books, and
such resignation shall take effect upon the appointment of a
successor Trustee by the owners of Bonds or by the Issuer as
hereinafter 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
dissolved, 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 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 outstanding Bonds by an instrument or concurrent
instruments in writing, signed by such owners of Bonds, or
by their attorneys 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
15
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 leas than Twenty -Five Million Dollars
($25,000,000), 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 60 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
jurisdiction in Nueces County, Texas 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, the User, and the
Guarantor 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, 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 or filing of any
16
•
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 amount of the
principal, 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, the User, and the
Guarantor, 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; provided, that until the Bonds are finally paid,
the Trustee shall continue to act as Paying Agent and Regis-
trar for the Bonds and provided further that the Trustee
will continue to maintain records of the Special Rebate Fund
in accordance with Article 4(d) hereof.
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)
Acknowledgments and Ownership of Bonds. Any request,
direction, consent, or other instrument required by this
Trust 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:
17
•
•
(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 the
appropriate entries in the Bond Registration Books
maintained by the Trustee as Registrar. The Trustee
may conclusively assume that such ownership continued
until ownership of the Bonds is transferred on the Bond
Registration Books by 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
intended that the Trustee may accept any other or additional
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
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, all liability of the Issuer and the
User to the owner thereof and to the Trustee for the payment
of such Bond shall forthwith cease, determine, and be
completely discharged whenever funds sufficient to pay such
Bond shall be paid to the Trustee by the User, and such
funds shall be segregated by the Trustee and held in trust
for the benefit of the owner of such Bond who shall
thereafter be restricted exclusively to such funds for the
satisfaction of any claim of whatever nature on his part
relating to such Bond.
18
•
(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 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
expressed or implied is intended or shall be construed to
confer upon any person, firm, or corporation other than the
User, the Guarantor, the Issuer, the Trustee, and the owners
of Bonds, any 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, 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 obligations under this Trust Indenture
shall be performed and enforced in Nueces County, Texas and
the validity, interpretation, and performance of this Trust
Indenture shall be governed by the laws of the State of
Texas.
Article 11. RECORDING. (a) Trustee to Record. The
Trustee 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. The Trustee
shall (1) cause each memorandum, financing statement, or
continuation statement with respect to the Agreement and
19
•
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 publication 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
Indenture.
(b) Non -Encumbrance. This Trust Indenture is, and
always will be kept, a direct lien and security interest
upon the Installment Loan Payments, the Debt Service Fund,
and the 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 COMMISSION. If the User fails
to timely make or pay any Installment Loan Payment, or upon
receiving notice that a Final Determination of Taxability
has occurred, or if the Trustee is notified by the Internal
Revenue Service that the interest on the Bonds is, or may
be, subject to federal income taxation, the Trustee promptly
shall inform the Commission of such an occurrence, by
sending written notice to the following address:
Texas Economic Development 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
20
•1
counterparts, 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)
TEXAS COMMERCE BANK -CORPUS CHRISTI, N.A., TRUSTEE
By
Vice President
ATTEST:
(SEAL)
Trust Officer
21
•
LOAN AGREEMENT
BETWEEN
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
AND
FURMAN PLAZA, LTD.
********************
The Corpus Christi Industrial Development Corporation
has granted a security interest in and assigned to Texas
Commerce Bank -Corpus Christi, N.A., as Trustee under the
Trust Indenture dated as of the date hereof, all of its
interests in all "Installment Loan Payments" due pursuant to
and under this Loan Agreement (and in the "Loan Payment
Guarantee" under the "Guarantee Agreement" attached hereto
and made a part hereof for all purposes) to secure its
Revenue Bonds, Series 1985 (Furman Plaza, Ltd. Project).
DEBTOR:
Furman Plaza, Ltd.
6116 Ayers, Suite 3C
Corpus Christi, Texas
SECURED PARTY:
Corpus Christi Industrial
Development Corporation
78415 P.O. Box 9277
302 5. Shoreline
Corpus Christi, Texas 78469
ASSIGNEE:
Texas Commerce Bank -Corpus
Christi, N. A., Trustee
802 N. Carancahua
Corpus Christi, Texas 78403
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,
and Representations 5
ARTICLE II
THE PROJECT
Section 2.01. Approvals and Permits 7
Section 2.02. Acquisition and Construction 7
ARTICLE III
FINANCING THE PROJECT; TITLE AND OPERATION
Section 3.01. The Loan 9
Section 3.02. Security for the Loan 9
Section 3.03. Repayment of Loan 9
Section 3.04. Title 10
Section 3.05. Operation 11
Section 3.06. Indemnities 11
Section 3.07. Issuer's Limited Liability 12
ARTICLE IV
THE BONDS
Section 4.01. Issuance of Bonds 14
Section 4.02. Refunding of Bonds 16
PAGE
Section
Section
Section
Section
4.03.
4.04.
4.05.
4.06.
Section 4.07.
Section 4.08.
Section 5.01.
Section 5.02.
Section 5.03.
Section 5.04.
Section 6.01.
Section 6.02.
Section 6.03.
Section 6.04.
Section 6.05.
Section 6.06.
Section 6.07.
Execution by
Execution by
Exhibit A
Exhibit B
Redemption of Bonds
Installment Loan Payments
No Arbitrage
Tax -Exempt Status of Interest on
the Bonds and Mandatory Redemption
Payments to Issuer
Payment to Special Rebate Fund
ARTICLE V
COVENANTS AND REMEDIES
Covenant
Trustee and Remedies
General Provisions
Amendment of Agreement
ARTICLE VI
SPECIAL COVENANTS
Partnership Existence
Assignment
Financial Reports
Term of Agreement
Termination
Notices
Severability
the Issuer
the User
15
15
16
16
20
21
22
22
22
22
25
25
25
26
26
26
27
27
28
A-1
B-1
•
LOAN AGREEMENT
This Loan Agreement dated as of October 1, 1985,
between Corpus Christi Industrial Development Corporation
and Furman Plaza, Ltd.
W I T N E S S E T H:
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 Partner - Any of the following persons;
Armando J. De Leon, Robert C. Seeds, Jr. or Brian L.
Leggett.
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 owner of any Bond as shown on the Bond
Registration Books kept by the Trustee.
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 Resolu-
tion) together with any supplemental resolutions or amend-
ments 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 Economic Development 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
acquisition, 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 will be deposited as pro-
vided in each Bond Resolution.
Deed of Trust - The Deed of Trust and Security Agree-
ment, dated as of October 1, 1985, from the User to the
trustee named therein.
Governmental Unit - City of Corpus Christi, a political
subdivision of the State of Texas.
Guarantee - The Guarantee Agreement dated as of
October 1, 1985, between the Issuer and the Guarantor.
2
Guarantor - Armando J. De Leon, Robert C. Seeds, Jr.
and Brian L. Leggett, individuals residing in the State of
Texas and their permitted successors and assigns.
Inducement Date - July 10, 1984.
Initial Bond Resolution - The Bond Resolution adopted
by the Board of Directors, authorizing the issuance and
delivery of Corpus Christi Industrial Development
Corporation Revenue Bond, Series 1985 (Furman Plaza, Ltd.
Project) in the aggregate principal amount of $3,000,000.
Issuer - Corpus Christi Industrial Development
Corporation.
Installment Loan Payments - Payments required to be
made by the User to pay 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), any agreed liquidated damages owed by the
User to the Bondholders, and all fees and expenses of the
Trustee, Registrar, and any Paying Agent for such Bonds,
together with any other payments required by such Bond
Resolution or the Trust Indenture, other than the fees and
expenses of the Issuer.
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.
Prohibited Payment - The Payment or agreement to pay,
to a party other than the United States, an amount that is
required to be paid to the United States by entering into a
transaction that reduces the amount owed to the United
States because such transaction results in a lower yield or
a larger loss than would have resulted if the transaction
had been at arms length and if the yield on the issue had
not been relevant to either party; provided, however that
the direct purchase of United States Treasury Obligations
from the United States Treasury is not a Prohibited Payment.
An investment pursuant to an investment contract is deemed
to result in a Prohibited Payment unless an opinion of Bond
3
•
Counsel is obtained to the effect that such investment will
not result in a Prohibited Payment. The purchase or sale of
a certificate of deposit issued by a commercial bank will
not result in a Prohibited Payment if the price at which it
is purchased or sold is the bona fide bid price quoted by a
dealer who maintains an active secondary market in such
certificates of deposit. If there is no active secondary
market in such certificates of deposit, the purchase or sale
of a certificate of deposit will not result in a Prohibited
Payment if the certificate of deposit has a yield (A) as
high or higher than the yield on comparable obligations
traded on an active secondary market, as certified by a
dealer who maintains such a market, and (B) as high or
higher than the yield available on comparable obligations
offered by the United States Treasury. The certification
described in the preceding sentence must be executed by a
dealer who maintains an active secondary market in
comparable certificates of deposit and must be based on
actual trades adjusted to reflect the size and term of that
certificate of deposit and the stability and reputation of
the person issuing the certificate of deposit.
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.
Special Rebate Fund - The segregated account or
accounts into which the Tentative Rebate Amount will be
deposited and from which payments to the United States will
be made.
Tentative Rebate Amount - The aggregate of the amounts
described in clause (i) of Section 103(c)(6)(D) of the Code,
determined as of any date in accordance of the provisions of
Section 1.103-15AT(d) of the Temporary Regulations (and in
accordance with and regulations subsequently promulgated
thereunder), in respect of each issue of Bonds issued
pursuant to the Bond Resolution.
Trust Indenture - The trust indenture, including all
supplements and amendments thereto, prescribed in and
executed and delivered pursuant to the Initial Bond
Resolution.
Trustee - The corporate trustee named under the Trust
Indenture, and its successors or assigns.
•
User - Furman Plaza, Ltd., a limited partnership
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
REPRESENTATIONS. (a) The Issuer represents that it 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 represents that it is a duly consti-
tuted authority and public instrumentality of the Govern-
mental 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 represents that it 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
the due authorization of the consummation of the
transactions 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.
5
(i) The execution of this Agreement and the perform-
ance of the transactions contemplated hereby will not
violate any law or regulation, or any Articles of Incorpora-
tion, Charter, or Bylaws, Limited Partnership Agreement or
any judicial order, judgment, decree, or injunction, or
contravene 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
Commission that (1) the Project will contribute to the
economic growth or stability of the Governmental Unit by
(aa) increasing or stabilizing employment opportunities in
the Governmental Unit, (bb) significantly increasing or
stabilizing 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 using
or moving any portion of the Project outside the State of
Texas or 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
adjacent 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
fulfillment 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
pursuant 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:
6
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
the User agrees to use its best efforts 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 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
furnish the 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,
construction, 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
sale of the Bonds to the User to be used by the User to pay
7
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.
B
•
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. As additional security for the
payment of the Installment Loan Payments and as further
consideration for the Loan made hereunder, there is attached
to this Agreement as Exhibit B, and made a part hereof, the
Guarantee whereunder the Guarantor has guaranteed all of the
User's obligations hereunder. 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
Installment Loan Payments and the Guarantor's guarantee
thereof. In addition, it is recognized and understood that
the Deed of Trust has been given by the User as additional
security for the payment of Installment Loan Payments for
the benefit of the owners of the Bonds.
Section 3.03. REPAYMENT OF LOAN. (a) Notwithstanding
any provision expressly or inferentially to the contrary
contained herein, the User unconditionally agrees that it
shall make Installment Loan Payments to the Trustee (pur-
suant 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 maturity, or upon acceleration of stated maturity),
any agreed liquidated damages owed by the User to the
Bondholders, 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 shall have given, full and
9
ti
•
complete consideration for the User's obligation hereunder
to make Installment Loan 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 dimi-
nution by set-off, recoupment, counterclaim, abatement, or
otherwise; and until such time as all Installment Loan
Payments 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 administra-
tive 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 connection with this Agreement. Nothing contained
in this Section shall be construed to release the Issuer
from the performance 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 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 owners of the
Bonds the right, in any event, to collect usury.
Section 3.04. TITLE. The Issuer shall have no right,
title, or interest in and to the Project. Except for making
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,
10
•
•
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 applic-
able 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, delivery or payment of the Bonds, the Bond
Resolution, the Trust Indenture, and this Agreement and the
obligations imposed on the Issuer hereby and thereby; or the
design, construction, installation, operation, use,
occupancy, 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 information, 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 violation by the User of the provisions of
Sections 4.05 or 4.06. 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
11
•
•
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 negligent acts or omissions of the
Commission, the Issuer or the Governmental Unit or their
officers, directors, employees, agents, servants, or any
other party acting for or on behalf of the Commission, 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
purpose, or to any diminution in or postponement of any
payments required to be made by the User hereunder.
Section 3.08. INDEMNIFICATION OF TRUSTEE. The User
shall and hereby agrees to indemnify the Trustee for, and
hold the Trustee 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, delivery or payment of the Bonds, the Bond
Resolution, the Indenture, and this Agreement and the
obligations imposed on the Trustee hereby and thereby; or
the design, construction, installation, operation, use,
occupancy, maintenance, or ownership of the Project; (ii)
any written statements or representations made or given by
the User or any of its partners 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, the Bonds, including, but not limited
to statements or representations of facts, financial
information, or partnership 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 Trustee
as a result of violation by the User of the provisions of
Sections 4.05 or 4.06. The User may, and if requested in
12
•
writing by Trustee shall, undertake the defense of any
claim, action, or proceeding for which Trustee is
indemnified under this Section, and, thereafter, the User
shall not be liable to Trustee for any legal or other
expenses other than reasonable costs subsequently incurred
by Trustee at the request of the User in connection with the
defense thereof. The User shall not be liable for any
settlement of any such claim, action or proceeding without
its written consent. Trustee shall give prompt notice of
any claim, action or proceeding against them upon which
either of them may seek indemnity hereunder. For the
purposes of this Section 3.08, the term Trustee shall
include the officers, directors, employees, agents and
attorneys of the Trustee.
13
•
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 User shall
make the Installment Loan 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 Partner 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 idsued 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
Indenture, become unconditional, valid, and binding
covenants and obligations of the User so long as said Bonds
and the interest thereon are outstanding and unpaid. Parti-
cularly, the obligation of the User to make, promptly when
due, all Installment Loan 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 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
14
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 aggregate 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 Partner; 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 Partner, 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 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. (a) Payment
of all Installment Loan 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 of the 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 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
interest payment at any time. Any such prepayment by the
User shall not relieve it of liability for each remaining
interest payment as provided in this Agreement and each Bond
Resolution and the Trust Indenture.
(b) Recognizing that the Installment Loan Payments
will be the Issuer's sole source for the payment and perfor-
mance of its obligations to the Trustee, any Paying Agent
and the Bondholders under each Bond Resolution and the Trust
Indenture, when any Bonds are delivered, the User shall be
unconditionally obligated to make and pay, or cause to be
made and paid, each Installment Loan Payment regardless of
15
•
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 counterclaim; 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 performance 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
proceeds 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
information 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").
(b) The User hereby covenants that (i) substantially
all the proceeds (at least 90 percent) 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, (ii) less than 25% of the proceeds from the sale
of the Bonds will be used (directly or indirectly) for any
acquisition of land (or any interest therein) which is a
Cost of the Project, (iii) rehabilitation expenditures,
16
•
within the meaning of Section 103(b)(17) of the Code, will
equal (a) with respect to any building, at least 15% of the
Bond financed portion of the cost of acquiring any such
building and (b) with respect to any equipment, to 100% of
the Bond financed portion of the cost of acquiring any such
equipment and (iv) 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 acquisi-
tion, construction, reconstruction, 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, reconstruction, 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 and represents that it
will not permit any person or entity to use or lease 10% (in
value or area) or more of the Project if the aggregate
authorized face amount of the Bonds allocated to such person
or entity under Section 103(b)(15) of the Code (when
increased by the outstanding aggregate face amount of all
tax-exempt outstanding aggregate face amount of all
tax-exempt "industrial development bonds" (within the
meaning of Section 103(b)(2) of the Code) allocated to such
person or entity under Section 103(b)(15) of the Code),
would cause the interest on the Bonds to become subject to
17
•
federal income taxes pursuant to the provisions of Section
103(b)(15) 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 Taxable Event,
as hereinafter 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 Taxable Event.
(e) The User acknowledges that the capital expendi-
tures referred to in the preceding paragraphs include all
capital expenditures within the Project Area and all capital
expenditures incurred elsewhere relating to the Project,
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
covenants 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 Regu-
lations 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.
18
•
•
(g) As used herein, a "Taxable Event" shall mean:
(i) the application of the proceeds of the Bonds
in such manner that the Bonds become "arbitrage bonds"
within the meaning of Section 103(c) of the Code, with
the result that interest on the Bonds is or becomes
includable in the gross income of any Bondholder; or
(ii) the application of the proceeds of the Bonds
in such manner, or the occurrence or non-occurrence of
any event, with the result that, under the Code and the
Regulations, the interest on the Bonds is or becomes
includable in the gross income of any Bondholder (other
than a Bondholder who is a "substantial user" or a
"related person" within the meaning of Section 103(b)
of the Code) ; or
(iii) the violation by the User of a representation
or covenant contained in this Agreement with the result
that, under the Code and the Regulations, the interest
on the Bonds is or becomes includable in the gross
income of any Bondholder (other than a Bondholder who
is a "substantial user" or a "related person" within
the meaning of Section 103(b) of the Code).
(h) A "Determination" shall be deemed to have occurred
on the first to occur of the following:
(i) on that date when the User shall be advised by
the Commissioner or any District Director of Internal
Revenue that, based upon filings of the User or the
Issuer or upon any review or audit of the User, or upon
any ground whatsoever, a Taxable Event shall have
occurred; or
(ii) on that date when the User shall receive
notice from the Issuer, the Trustee, or any Bondholder
that it or he has been advised: (A) that the Internal
Revenue Service has assessed as includable in the gross
income of any Bondholder any interest on his Bonds due
to the occurrence of a Taxable Event; or (B) by the
Commissioner or any District Director of Internal
Revenue that the interest on any of the Bonds is
includable in the gross income of any Bondholder due to
the occurrence of a Taxable Event.
(i) A "Final Determination of Taxability" shall be
deemed to have occurred on the first to occur of the
following:
(i) on that day when the User files with the
Trustee or the Internal Revenue Service any statement,
19
•
supplemental statement or other tax schedule, return or
document which discloses that a Taxable Event shall
have occurred; provided, however, that if and so long
as the User is contesting in good faith and by appro-
priate proceedings, either directly or through a
Bondholder, the existence of a Taxable Event, no such
Final Determination of Taxability shall be deemed to
have occurred; or
(ii) the entry of any final unappealable order,
decree or ruling of any court of the United States or
of the Commissioner of Internal Revenue relating to a
Determination, or the failure to prosecute an appeal
from any order, decree or ruling of any such court or
the Commissioner and the expiration of time for an
appeal or review of such order, decree or ruling.
(j) Should a Final 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 (for loss of a bargain and not as a
penalty) 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. From the proceeds
of the sale and delivery of each series or issue of Bonds
there shall be paid all of the Issuer's reasonable, actual
out-of-pocket expenses and costs of issuance in connection
with such series of Bonds, including, without limitation,
all financing, legal, printing, and other expenses and costs
of issuance incurred in issuing the Bonds. In addition, the
Issuer shall receive out of such Bond proceeds an amount
equal to the amount specified in each Bond Resolution to pay
and reimburse the Issuer for its administrative and overhead
expenses directly attributable and chargeable to the
issuance of the Bonds and the acquisition, construction,
equipping, and furnishing of the Project. Also the User
agrees to pay directly to the Issuer annually while any of
the Bonds is outstanding, upon receiving a bill or statement
therefor, which shall be submitted by the Issuer promptly
after the close of each fiscal year of the Issuer, an amount
equal to 5/100ths of 1% of the amount of the Bonds
outstanding to pay and reimburse the Issuer for its
administrative and overhead expenses reasonably and
necessarily incurred in connection with the Bonds and the
20
•
•
Project during the previous fiscal year and an amount
sufficient to pay and reimburse the Issuer for any of its
actual costs reasonably and necessarily incurred in connec-
tion with the Bonds and the Project during the previous
fiscal year.
Section 4.08 PAYMENT TO SPECIAL REBATE FUND. The User
hereby covenants and agrees to make the determinations and
to pay any deficiency in the Special Rebate Fund, at the
times and as described in Section 7(g) of the Initial Bond
Resolution. In any event, if the amount of cash held in the
Special Rebate Fund shall be insufficient to permit the
Trustee to make payment to the United States of any amount
due under Section 103(c)(6)(D) of the Code, the User forth-
with shall pay the amount of such insufficiency on such date
to the Trustee in immediately available funds. The obliga-
tions of the User under this Section 4.08 are direct
obligations of the User, and the Issuer shall have no
obligation or duty with respect to the Special Rebate Fund.
21
•
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 required and prescribed to be paid by it
pursuant to each Bond Resolution. The User further uncon-
ditionally 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 Inden-
ture.
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 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, or in the performance of any
agreement or covenant contained herein or in any Bond, any
Bond Resolution, or the Trust Indenture, such payment and
performance may be enforced by mandamus or by the appoint-
ment of a receiver in equity with power to charge and
collect Installment Loan 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
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
22
•
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 there-
after 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 pro-
visions 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, the Commission
and the User, and their respective successors and assigns
herein permitted, and not for any other third party or
parties; and nothing in this Agreement, expressed or
implied, is intended to confer upon any party or parties
other than the Issuer, the Trustee, the Bondholders, the
Commission 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 Partner and the
President or Vice President of the Board of Directors. In
addition to amendments for any other purpose, it is
specifically understood that this Agreement may be amended,
if deemed necessary or advisable by the User, Issuer and
owners of 51 percent of the aggregate principal amount of
the then outstanding Bonds, to change the definition 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
23
the Bondholders and the Trustee, that (without the concur-
rence of all of the Bondholders and the Trustee) the
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 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.
24
•
•
ARTICLE VI
SPECIAL COVENANTS
Section 6.01. PARTNERSHIP EXISTENCE. (a) The User
agrees that during the term of this Agreement it will
maintain its partnership existence, will not liquidate or
otherwise dispose of all or substantially all of its assets,
provided, that the User may, without violating the agreement
contained in this Section, sell or otherwise transfer to
another entity all or substantially all of its assets as an
entirety and thereafter dissolve, if the surviving,
resulting, or transferee entity: (i) is authorized to
transact business in the State of Texas, (ii) shall have,
immediately after such transaction, a consolidated net worth
at least equal to the consolidated net worth of the User
immediately prior to such transaction, with net worth being
determined in accordance with generally accepted accounting
principles, and (iii) shall have, concurrently with such
transaction (unless the entity is the User), irrevocably and
unconditionally assumed, in an instrument delivered to the
Issuer and the Trustee, the due and prompt performance of
all of the obligations of the User under this Agreement. If
any sale or other transfer is made as provided in this
Section, the provisions of this Section shall continue in
full force and effect and no further sale or other transfer
shall be made except in compliance with the provisions of
this Section.
(b) The User covenants that it is and, throughout the
term of this Agreement, unless relieved of liability pur-
suant to paragraph (a) above, that it (i) will continue to
be a partnership under the laws of a state of the United
States, and (ii) will at all times be and remain duly
qualified to transact business in the State of Texas.
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
an annual audit made by its regular independent certified
public accountants, and shall furnish the Trustee either a
copy of such certified audit within 120 days after the end
of the fiscal year for which such audit was made, or, in
lieu of such audit, a copy of its annual report to its
partners, if such report contains financial statements of
25
•
of substantially similar detail and are similarly prepared
and certified. Such financial statements and reports shall
be furnished to the Trustee at the same time as they are
furnished to the partners.
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
Sections 3.06, 4.05 and 4.06 shall survive the termination
of this Agreement and shall continue in effect regardless 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:
(a) On the second 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: City Manager
P. O. Box 9277
302 S. Shoreline
Corpus Christi, Texas 78469
Furman Plaza, Ltd.
Attention: Armando J. De Leon
6116 Ayers, Suite 3C
Corpus Christi, Texas 78415,
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:
26
•
Texas Commerce Bank -Corpus Christi, N.A., Trustee
Attention: Corporate Trust Department
802 N. Carancahua
Corpus Christi, Texas 78403
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
invalidity 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
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
ATTEST:
Secretary, Board of Directors
(SEAL)
By
President, Board of Directors
27
FURMAN PLAZA, LTD.
By Third Coast Partnership General Partner
By
General Partner
By
By
28
General Partner
General Partner
•
-t
• •
Exhibit A
Description of the Project
The Project includes the acquisition and rehabilitation
of land and a multi -use building containing approximately
24,000 square feet of rental space for shops, offices,
eateries, with an attached parking garage with approximately
305 parking spaces. The Project is located at 418 Peoples
Street, Corpus Christi, Texas.
A-1
•
GUARANTEE AGREEMENT
BETWEEN
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
AND
ROBERT C. SEEDS, JR., ARMANDO J. DE LEON
AND
BRIAN L. LEGGETT
DEBTOR:
Furman Plaza, Ltd.
6116 Ayers, Suite 3C
Corpus Christi, Texas 78415
Robert C. Seeds, Jr.
6116 Ayers, Suite 3C
Corpus Christi, Texas 78415
Armando J. De Leon
6116 Ayers, Suite 3C
Corpus Christi, Texas 78415
Brian L. Leggett
6116 Ayers, Suite 3C
Corpus Christi, Texas
78415
ASSIGNEE:
SECURED PARTY:
Corpus Christi Industrial
Development Corporation
P. O. Box 9277
302 S. Shoreline
Corpus Christi, Texas 78401
Texas Commerce Bank, Corpus
Christi, N.A., as Trustee
802 N. Carancahua
Corpus Christi, Texas 78403
•
GUARANTEE AGREEMENT
This Guarantee Agreement, by and among Corpus Christi
Industrial Development Corporation (the "Issuer") and Robert
C. Seeds, Jr., Armando J. DeLeon and Brian L. Leggett,
individuals domiciled in the State of Texas (the "Guaran-
tors") , dated as of October 1, 1985 (the "Guarantee Agree-
ment") , which is attached to and made a part of the "Loan
Agreement between Corpus Christi Industrial Development
Corporation and Furman Plaza, Ltd." (the "Loan Agreement"),
which is hereby referred to and adopted for all purposes,
and with the terms used in this Guarantee Agreement having
the same meanings and definitions as set forth in the Loan
Agreement,
W ITNESSET H:
(a) It is necessary for the Guarantors to execute and
deliver this Guarantee Agreement in order to induce the
Issuer to execute the Loan Agreement and to provide addi-
tional and sufficient security for the Bonds to be issued
pursuant to the Loan Agreement so as to permit the sale of
such Bonds and induce the purchasers thereof to purchase
same.
(b) To the knowledge of the Guarantors, the execution
and delivery of this Guarantee Agreement and the performance
of the transaction contemplated hereby will not violate any
law or regulation, or any judicial order, judgment, decree,
or injunction, or contravene the provisions of or constitute
a default under any agreement, indenture, or other
instrument to which any of the Guarantors is a party.
NOW THEREFORE, the Guarantors and the Issuer contract
and agree as follows:
ARTICLE I
GUARANTEE
Section 1.01. GUARANTEE. (a) The Guarantors hereby
jointly and severally unconditionally guarantee to and with
the Issuer and its assigns, including specifically Texas
Commerce Bank - Corpus Christi, N.A., the Trustee under the
Trust Indenture, and to and with all of the Bondholders,
without offset, recoupment, or counterclaim whatsoever, the
full, complete, and prompt payment when due by Furman Plaza,
Ltd. of all Installment Loan Payments and all other fees,
charges, or payments under the Loan Agreement between User
and Issuer. It is understood and agreed that the Issuer
will assign to the Trustee all of its interest in and to
this Guarantee Agreement with respect to the guarantee by
•
the Guarantors of all the aforesaid Installment Loan
Payments under the Loan Agreement, and such guarantee is
hereby designated and shall be defined as the "Loan Payment
-Guarantee" for all purposes. Each Guarantor further agrees
to pay all reasonable expenses and charges, including court
costs and fees and disbursements of counsel paid or incurred
by the Trustee in realizing upon any of the Installment Loan
Payments, in enforcing this Guarantee Agreement or in
protecting the rights of the Issuer, the Trustee or the
holders of the Bonds hereunder following any default on the
part of the Guarantors hereunder, whether the same shall be
enforced by suit or otherwise. The Trustee, or the Bond-
holders to the extent provided in the Bond Resolution and
the Trust Indenture, may enforce the obligations of the
Guarantors under this Guarantee Agreement in the manner
provided in the Trust Indenture, without the necessity of
making the Issuer a party.
(b) Each Guarantor waives notice of the issuance of
the Bonds and notice from the Issuer, the Trustee or the
holders from time to time of any of the Bonds of its
acceptance of and reliance on this Guarantee Agreement, and
each Guarantor also waives presentment, demand and payment,
protest and notice of nonpayment or dishonor and all other
notices and demands whatsoever. Each Guarantor also waives
any other act or thing or omission or delay to do any other
act or thing which might in any manner or to any extent vary
the right of any Guarantor or which might otherwise operate
as a discharge of any Guarantor. Each Guarantor agrees that
all of its obligations under this Guarantee Agreement are
independent of the obligations of the User under the Loan
Agreement or any other Guarantor hereunder, and that a
separate action may be brought against each Guarantor
whether or not an action is commenced against the User under
the Loan Agreement.
(c) Notwithstanding any payment or payments made by
any Guarantor by reason of this Guarantee Agreement, each
Guarantor agrees and covenants that it shall not be
subrogated to any rights of the Issuer, the Trustee or any
holder of any of the Bonds against the User until all the
Bonds shall have been paid. Any claim of any Guarantor
against the User shall be in all respects subordinated to
the full and complete payment or discharge under the Trust
Indenture of all obligations guaranteed hereby. Unless and
until the Bonds shall have been paid, no payment by any
Guarantor by reason of this Guarantee Agreement shall give
rise to any claim of any Guarantor against the Issuer, the
Trustee or the holder of any of the Bonds and no Guarantor
will assign or otherwise transfer any such claim against the
User to any other person.
2
•
ARTICLE II
GUARANTORS COVENANTS
Section 2.01. ASSIGNMENT. None of the Guarantors
shall assign his interest in this Guarantee Agreement or any
of his obligations hereunder without obtaining the prior
written consent of the Issuer, the Trustee and all the
Bondholders
Section 2.02.
Agreement shall be
respective estates,
said estates, heirs
the obligations of
Guarantee Agreement
BINDING UPON HEIRS. This Guarantee
binding upon the Guarantors, and their
heirs, and legal representatives, and
, and legal representatives shall assume
the Guarantors for the term of this
ARTICLE III
GENERAL PROVISIONS
Section 3.01. GOVERNING LAW. The Guarantors agree
that any suit, action, or other legal proceeding arising
under this Guarantee Agreement shall be brought in the
applicable court of record in the County of Nueces, State of
Texas. In this connection, the parties hereby agree that
this Guarantee Agreement shall be governed in all respects,
including validity, interpretation, and effect, by, and
shall be enforceable in accordance with the laws of the
State of Texas.
Section 3.02. AMENDMENT. This Guarantee Agreement
shall never be changed or amended without the prior written
consent of the parties hereto and the holders of at least
51% of the aggregate principal amount of the Outstanding
Bonds.
Section 3.03. TERM OF AGREEMENT. The term of this
Guarantee Agreement shall be from the date hereof until all
payments and indemnities required to be made by the Guaran-
tors pursuant hereto shall have been made.
Section 3.04. TERMINATION OF AGREEMENT. (a) This
Guarantee Agreement may be terminated by any party, upon
written notice to the other parties, at any time prior to
the adoption of a Bond Resolution by the Issuer, and may be
terminated by mutual agreement of all parties at any time
prior to the delivery of and payment for any Bonds pursuant
to the Loan Agreement.
(b) Notwithstanding the foregoing or any other provi-
sions of this Guarantee Agreement to the contrary, if any
3
Bonds have been issued and delivered the term of this
Guarantee Agreement shall be as set forth in Section 3.03,
and this Guarantee Agreement may not and shall not be sooner
terminated by any of the parties hereto.
Section 3.05. NOTICES. Any notice, request, or other
communication under this Guarantee Agreement shall be given
and shall be deemed given when delivered personally to the
party who is to receive the same, when sent by telegraph or
on the second business day following the day on which the
same have been mailed by registered or certified mail,
postage prepaid as follows:
If to the Issuer:
Corpus Christi Industrial Development Corporation
Attention: President
P. O. Box 9277
302 S. Shoreline
Corpus Christi, Texas 78401
If to the Guarantors:
Furman Plaza, Ltd.
6116 Ayers, Suite 3C
Corpus Christi, Texas 78415
Robert C. Seeds, Jr.
Furman Plaza, Ltd.
6116 Ayers, Suite 3C
Corpus Christi, Texas 78415
Armando J. De Leon
Furman Plaza, Ltd.
6116 Ayers, Suite 3C
Corpus Christi, Texas 78415
Brian L. Leggett
Furman Plaza, Ltd.
6116 Ayers, Suite 3C
Corpus Christi, Texas 78415
If to the Trustee:
Texas Commerce Bank - Corpus Christi, N.A.
Attention: Corporate Trust Department
802 N. Carancahua
Corpus Christi, Texas 78403
or the latest address specified by any of the parties listed
above in writing.
4
•
Section 3.06. SEVERABILITY. If any clause, provision,
or Section of this Guarantee Agreement should be held
illegal or invalid by any court, the invalidity of such
-clause, provision, or Section shall not affect any of the
remaining clauses, provisions, or Sections hereof and this
Guarantee 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 Guarantee 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
Guarantors to the full extent permitted by law.
Section 3.07. ENTIRE AGREEMENT. This Guarantee
Agreement (a) constitutes the entire agreement, and
supercedes all prior agreements and understandings, both
written and oral, between the parties with respect to the
subject matter hereof; (b) may be executed in several
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument; and (c) shall inure to the benefit of and be
binding upon the respective successors and assigns of the
parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Guarantee Agreement to be signed in multiple counterparts,
each of which shall be considered an original for all pur-
poses, as of the day and year first set out above.
CORPUS CHRISTI INDUSTRIAL
DEVELOPMENT CORPORATION
By
ATTEST:
Secretary, Board of Directors
(SEAL)
President, Board of Directors
5
•
Robert C. Seeds, Jr.
Armando J. De Leon
Brian L. Leggett
6
Corpus_uChristi, Texas
/Pt day ofQeti j , 19815
TO THE MEMBERS OF THE CITY COUNCIL
Corpus Christi, Texas
For the reasons set forth in the emergency clause of the foregoing ordinance
or resolution, an emergency exists requiring suspension of the Charter rule
as to consideration and voting upon ordinances or resolutions at three
regular meetings; I/we, therefore, request that you suspend said Charter rule
and pass this ordinance or resolution finally on the date it is introduced,
or at the present meeting of the City Council.
Respectfully,
Council Members
• Respectfully,
MAYOR
THE CITY OF CORPUS CHRISTI, TEXAS
The above ordinance was passed by the ?allowing vote:
Luther Jones
Dr. Jack Best
David Berlanga, Sr.
Leo Guerrero
Joe McComb
Frank Mendez
Bill Pruet
Mary Pat Slavik
Linda Strong
12033