HomeMy WebLinkAbout19109 RES - 12/03/198517
RESOLUTION APPROVING A COMMERCIAL PROJECT AND AN
AGREEMENT BY CORPUS CHRISTI INDUSTRIAL DEVELOPMENT
CORPORATION TO ISSUE BONDS FOR BROADWAY PLAZA
ASSOCIATES, LTD., AND THE BOND RESOLUTION
PROVIDING FOR THE ISSUANCE OF SUCH BONDS
WHEREAS, the Corpus Christi Industrial Development
Corporation (the "Corporation") proposes to issue bonds (the
"Bonds") under the Development Corporation Act of 1979, as
amended (the "Act") to finance a commercial project for
Broadway Plaza Associates, Ltd., located in the City of
Corpus Christi, Texas (the "City"); and
WHEREAS, a description of such commercial project is
contained in Exhibit A of the hereinafter referred to
Agreement, and shall be referred to herein as the "Project";
and
WHEREAS, the Act requires that any commercial project
financed under the Act must be within an area designated by
a city as an "Eligible Blighted Area"; and
WHEREAS, the Act requires that the City approve the
Bonds and the Project, the cost of which will be financed
with the proceeds of the Bonds; and
WHEREAS, a public hearing will be held with respect to
the aforementioned subject matter and notice of such public
hearing was posted (as required by Article 6252-17,
V.A.T.C.S.) and published in a newspaper of general circu-
lation in the City of Corpus Christi, Texas more than 14
days prior to the date of such scheduled public hearing; and
WHEREAS, the public will have the opportunity to make
comments on the Bonds and the Project at said public
hearing; and
WHEREAS, it is deemed necessary and advisable that this
Resolution be adopted.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF CORPUS CHRISTI:
Section 1. That the City has reviewed the Project and
finds that the Project is consistent with and conforms to
the redevelopment objectives of the City of Corpus Christi
as they were set forth in the resolution designating
Eligible Blighted Areas, adopted by the City Council of the
City on March 3, 1982, and filed with the Texas Economic
Development Commission on March 6, 1982, and that said
19109 MICROFILMED
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Project meets the statutory requirements of the Act and is
in compliance with the rules of the Texas Economic
Development Commission promulgated under the Act.
Section 2. That the City has determined that the
Project lies within an Eligible Blighted Area, designated in
the resolution described in Section 1 above; and that such
Eligible Blighted Area which was so designated is described
in Exhibit A attached hereto.
Section 3. That the "Loan Agreement between Corpus
Christi Industrial Development Corporation and Broadway
Plaza Associates, Ltd." (the "Agreement"), in substantially
the form and substance as attached to this Resolution and
made a part hereof for all purposes, is hereby approved, and
the Bonds in the principal amount of $5,570,000, 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 S. That the "Resolution Authorizing the
Issuance of Corpus Christi Industrial Development
Corporation Revenue Bonds, Series 1985 and the Execution of
a Trust Indenture (Broadway Plaza Associates, 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 5. That the Project as more particularly
described in the Agreement which is to be financed with the
proceeds of the Bonds, is hereby approved for the purposes
of the Act, the rules of the Texas Economic Development
Commission.
Section 6. the City hereby assigns to the Corporation
its allocable portion of the state private activity bond
volume with respect to the reservation request to be filed
for the Bonds by the Corporation.
Section 7. Upon the written request of the Mayor or
five City Council members to find and declare an emergency
due to the immediate need for efficient and effective
administration of City affairs by approving the issuance of
the Bonds, 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 hereby adopted and
passed as an emergency measure, to be effective immediately
upon enactment on December 3, 1985.
Attest:
City Secretary
APPROVED: �,J DAY OF pfd VEP1DER, 19 5
/ I
Assistant C
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,vR tkagA-
MAYOR PRO TEM
THE CITY OF CORPUS CHRISTI, TEXAS
LOAN AGREEMENT
BETWEEN
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
AND
BROADWAY PLAZA ASSOCIATES, LTD.
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The Corpus Christi Industrial Development Corporation
has granted a security interest in and assigned to MBank
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 to secure its Revenue Bonds, Series 1985
(Broadway Plaza Associates, Ltd. Project).
DEBTOR: SECURED PARTY:
Broadway Plaza Associates, Ltd.
1800 American Bank Plaza
Corpus Christi, Texas 78475
ASSIGNEE:
Corpus Christi Industrial
Development Corporation
P.O. Box 9277
302 South Shoreline
Co pus Christi, Texas 78469
MBank Corpus Christi,, N.A., Trustee
500 North Shoreline Blvd.
Corpus Christi, Texas 78471
JWR: FINAL DRAFT:12/2/85
TABLE OF CONTE -TS
(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 8
Section 2.02. Acquisition and Construction 8
ARTICLE III
FINANCING THE PROJECT; TITLE AND OPERATION
Section 3.01. The Loan 10
Section 3.02. Security for the Loan 10
Section 3.03. Repayment of Loan 10
Section 3.04. Title 11
Section 3.05. Operation 12
Section 3.06. Indemnities 12
Section 3.07. Issuer's Limited Liability 13
ARTICLE IV
THE BONDS
Section 4.01. Issuance of Bonds 14
Section 4.02. Refunding of Bonds 15
Section
Section
Section
Section
Section
Section
4.03.
4.04.
4.05.
4.06.
Redemption of Bonds
Installment Loan Payments
No Arbitrage
Tax -Exempt Status of Interest on
the Bonds and Mandatory Redemption
4.07. Payments to Issuer
4.08. Payment to Special Rebate Fund
Section 5.01.
Section 5.02.
Section 5.03.
Section 5.04.
Section 5.05.
Section 6.01.
Section 6.02.
Section 6.03.
Section 6.04.
Section 6.05.
Section 6.06.
Section 6.07.
ARTICLE V
COVENANTS AND REMEDIES
Covenant
Trustee and Remedies
General Provisions
Amendment of Agreement
Indemnification of Trustee
ARTICLE VI
SPECIAL COVENANTS
Partnership Existence
Assignment
Financial Reports
Term of Agreement
Termination
Notices
Severability
Section 6.08. Additional Security
Execution by the Issuer
Execution by the User
Exhibit A
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LOAN AGREEMENT
This Loan Agreement dated as of December 1, 1985,
between Corpus Christi Industrial Development Corporation
and Broadway Plaza Associates, 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 Officer - The general partners of the User or
the persons designated by the User in a written
authorization delivered to the Trustee to act on behalf of
the User.
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 registered owner of any Bond.
Bond Counsel - An attorney or firm of attorneys experi-
enced in matters relating to municipal bond law and the tax
exemption of interest on bonds of states and their political
subdivisions, selected by the Issuer and satisfactory to the
Trustee and the User.
Bond Resolution - The Initial Bond Resolution and each
resolution of the Board of Directors authorizing the issu-
ance of Bonds (including the Trust Indenture prescribed and
authorized to be executed in the Initial Bond Resolution)
together with any supplemental resolutions or amendments to
such resolutions or such Trust Indenture.
Bonds - Any and all revenue bonds of the Issuer issued
and delivered to finance and pay for all or any part of the
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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 acqui-
sition, construction, reconstruction, improvement, and
expansion of the Project as provided in the Act, including,
without limitation, the cost of the acquisition of all land,
rights-of-way, property rights, easements, and interests,
the cost of all machinery and equipment, financing charges,
interest during construction, necessary reserve funds, cost
of estimates and of engineering and legal services, plans,
specifications, surveys, estimates of cost and of revenue,
other expenses necessary or incident to determining the
feasibility and practicability of acquiring, constructing,
reconstructing, improving, and expanding any such Project,
administrative expense, and such other expense as may be
necessary or incident to the acquisition, construction,
reconstruction, improvement, and expansion thereof, the
placing of the same in operation, and the financing of the
Project.
Debt Service Fund - The segregated account or accounts
in which Installment Loan Payments will be deposited as pro-
vided in each Bond Resolution.
Deed of Trust - The Deed of Trust and Security Agree-
ment --Financing Statement, dated as of December 1, 1985,
from the User to MBank Corpus Christi, N.A., as the trustee
named therein, together with all amendments or supplements
thereto.
Governmental Unit - City of Corpus Christi, Texas, a
political subdivision of the State of Texas.
Inducement Date - April 18, 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 Bonds, Series 1985 (Broadway Plaza
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Associates, Ltd. Project) in the aggregate principal amount
of $5,570,000.
Issuer - Corpus Christi Industrial Development
Corporation.
Installment Loan Payments - Payments required to be
made by the User to the Trustee to amortize each series or
issue of Bonds, as provided for in the applicable Bond
Resolution, including (1) the principal of, redemption
premium, if any, and interest on such Bonds when due (whe-
ther at stated maturity, upon redemption prior to stated
maturity, or upon acceleration of stated maturity), (2) any
agreed liquidated damages owed by the User to the Bond-
holders or former Bondholders, (3) any interest, penalties,
reasonable costs and expenses incurred by the Bondholders or
former Bondholders in connection with a Determination of
Taxability required to be reimbursed to such Bondholders or
former Bondholders by the User, as provided in the Bonds,
(4) all fees and expenses of the Trustee, Registrar, and any
Paying Agent for such Bonds, and (5) any other payments
required to be paid by the Agreement, the 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.
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
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
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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.
Project - The land, buildings, equipment, facilities,
and improvements described in Exhibit A to this Agreement.
Project Area or Project Location - The City of Corpus
Christi, Texas.
Registrar - The registrar for the Bonds named in the
Bond Resolution.
Regulations - The regulations promulgated by the United
States Treasury Department pursuant to the Code.
Section - Any subdivision of this Agreement designated
by arabic numerals.
Security Agreement - Collectively, the Security
Agreement dated as of December 1, 1985, between the User and
MBank Corpus Christi, N.A., Trustee, as secured party, the
Collateral and Pledge Agreement, dated as of December 1,
1985 between MBank Corpus Christi, N.A., as secured party,
and the User and/or one or more of the partners of the User
and any other agreements not specifically mentioned herein
between the User and MBank Corpus Christi, N.A., securing
the User's obligations hereunder and securing payment of the
Bonds, and all amendments or supplements thereto.
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 execu-
ted and delivered pursuant to the Initial Bond Resolution.
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Trustee - The corporate trustee named under the Trust
Indenture, and its successors or assigns.
User - Broadway Plaza Associates, Ltd., a limited
partnership organized and existing under the laws of the
State of Texas and fully qualified to transact business in
the State of Texas, and its herein permitted successors and
assigns.
References in the singular number in this Agreement
shall be considered to include the plural, if and when
appropriate.
Section 1.02. GENERAL RECITALS, FINDINGS, AND REPRE-
SENTATIONS. (a) The Issuer is a nonstock, nonprofit
industrial development corporation organized and existing
under the laws of the State of Texas, including particularly
the Act.
(b) The Issuer is a duly constituted authority and
public instrumentality of the Governmental Unit, a political
subdivision of the State of Texas, within the meaning of the
Regulations and the rulings of the Internal Revenue Service
prescribed and promulgated pursuant to Section 103 of the
Code, and the Issuer is functioning and acting solely on
behalf of the Governmental Unit.
(c) The User is fully qualified to transact business
in the State of Texas, and is fully authorized by law and
partnership proceedings 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 transac-
tions contemplated hereby, and this Agreement has been duly
executed and delivered by, and constitutes a valid and
legally binding agreement of, the Issuer and the User,
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enforceable against the respective parties in accordance
with its terms.
(i) The execution of this Agreement and the perfor-
mance of the transactions contemplated hereby will not
violate any law or regulation, or any Articles of Incorpora-
tion, Charter, or Bylaws, or any 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 Commis-
sion that (1) the Project will contribute to the economic
growth or stability of the Governmental Unit by (aa) in-
creasing or stabilizing employment opportunities in the
Governmental Unit, (bb) significantly increasing or sta-
bilizing the property tax base of the Governmental Unit and
(cc) promoting commerce within the Governmental Unit and the
State of Texas; (2) it has no present intention of disposing
of or abandoning the Project; and (3) it has no present
intention of using or moving any portion of the Project out
of the State of Texas or directing the Project to a use
other than the purposes represented to the Governmental Unit
and the Commission.
(k) There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court,
public board or body pending or threatened against the
Issuer, wherein an unfavorable decision, ruling or finding
would adversely affect the existence of the Issuer or which
would adversely affect the validity or enforceability of any
portion of this Agreement, the Trust Indenture, the Bond
Resolution or any other agreement or instrument to which the
Issuer is a party which is used or contemplated for use in
consummation of the transactions contemplated hereunder or
thereunder.
(1) 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
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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, construc-
tion, 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, con-
struction, equipping, and furnishing of the Project as it
deems necessary or advisable or as is required by law, this
Agreement, or the Deed of Trust. 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 Pro-
ject. The User shall promptly pay all taxes, including
specifically all sales taxes and ad valorem taxes, in
connection with the Project and the acquisition, construc-
tion, 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 all or part of the Cost of
the Project, in accordance with procedures to be established
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in any applicable Bond Resolution, including provisions for
reimbursing the User for paying all or any part of such Cost
under the aforesaid agreements and contracts for the acqui-
sition, construction, equipping, and furnishing of the
Project prior to the User's receipt of the Loan as herein-
after provided. It is specifically 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 admin-
istered as provided in such Bond Resolution.
(c) In addition to the above, the User shall also be
bound by the terms and provisions of the Construction Fund
Disbursement Agreement dated as of December 1, 1985, between
the User, and MBank Corpus Christi, N.A., in its capacity as
initial purchaser of the Bonds.
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ARTICLE III
FINANCING THE PROJECT;
TITLE AND OPERATION
Section 3.01. THE LOAN. The Issuer shall make the
Loan to the User by depositing into the Construction Fund
(or such other fund as specifically provided in the Bond
Resolution) the proceeds from the sale of Bonds in such
amount as is provided in each Bond Resolution. The amounts
so deposited shall be advanced in the manner provided in the
Bond Resolution; and the User shall repay the Loan by making
the Installment Loan Payments as provided in this Agreement
and the Bond Resolution.
Section 3.02. SECURITY FOR THE LOAN. The obligations
of the User under this Agreement shall be direct general
obligations of the User. Prior to or simultaneously with
the issuance of the Bonds, the Issuer will assign to the
Trustee under the terms of the Trust Indenture all of the
Issuer's right, title, and interest in and to the Install-
ment Loan Payments. In addition, it is recognized and
understood that the Deed of Trust and the Security Agreement
have 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 (pursu-
ant 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 (1) 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 matur-
ity), (2) any agreed liquidated damages owed by the User to
the Bondholders or former Bondholders, (3) any interest,
penalties, reasonable costs and expenses incurred by the
Bondholders or former Bondholders in connection with a
Determination of Taxability required to be reimbursed to
such Bondholders or former Bondholders by the User, all as
provided in the Bonds, (4) all fees and expenses of the
Trustee, the Registrar, and any Paying Agent for such Bonds,
and (5) 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 Resolu-
tion, the User shall have received, and the Issuer shall
have given, full and complete consideration for the User's
obligation hereunder to make Installment Loan Payments. The
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obligations of the User to make the payments required by
this Agreement shall be absolute and unconditional, and
shall not be subject to diminution 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 Agree-
ment; (ii) will perform and observe all of its other agree-
ments 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 there-
for, any acts or circumstances that may constitute failure
of consideration, destruction of, or damage to the Project,
frustration of commercial purpose, any change in the tax or
other laws or administrative rulings of or administrative
actions by the United States of America, or the State of
Texas, or any political subdivision of either, or any
failure of the Issuer to perform and observe any agreement,
whether expressed or implied, or any duty, liability, or
obligation arising out of or in connection with this Agree-
ment. 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,
damages, penalties, costs, taxes, or fines with respect to
the acquisition, construction, equipping, furnishing,
installation, operation, maintenance, or ownership of the
Project.
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Section 3.05. OPERATION. The User represents and
covenants that it will operate and maintain the Project, or
cause the Project to be operated and maintained, and will
pay, or cause to be paid, all costs and expenses of opera-
tion and maintenance of the Project, including all applica-
ble taxes, and that it will keep, or cause to be kept, in
force adequate insurance on the Project as required by the
Deed of Trust. 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 City Council, its officers,
agents, attorneys, employees and the members of its govern-
ing body (collectively 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 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, or the Bonds, including, but not
limited to, statements or representations of facts, finan-
cial information, or partnership or corporate affairs; and
(iii) 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 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 its City Council,
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 (iii) of said
sentence.
12
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Section 3.07. ISSUER'S LIMITED LIABILITY. It is
recognized that the Issuer's only source of funds with which
to carry out its commitments with respect to the Project and
this Agreement will be from the proceeds from the sale of
the Bonds; and it is expressly agreed that the Issuer shall
have no liability, obligation, or responsibility with
respect to this Agreement or the Project except to the
extent of funds available from such Bond proceeds. If, for
any reason, the proceeds from the sale of the Bonds are not
sufficient to pay all the Cost of the Project, the User
shall complete the Project and pay all such Cost from its
own funds, but it shall not be entitled to reimbursement
therefor unless additional Bonds are issued for such pur-
pose, or to any diminution in or postponement of any pay-
ments required to be made by the User hereunder.
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 Officer and the provisions of any such Bond
Resolution shall not be binding or effective upon the User
unless and until such approval is given. It is hereby
agreed that the foregoing approval of the Initial Bond
Resolution and the Trust Indenture, and any approval of any
Bond Resolution authorizing the issuance of additional Bonds
constitutes the acknowledgment and agreement of the User
that such Bonds, when issued and delivered as provided in
such Bond Resolution, will be issued in accordance with and
in compliance with this Agreement, notwithstanding any other
provisions of this Agreement or any other contract or
agreement to the contrary. Any Bondholder is entitled to
rely fully and unconditionally on any such approvals.
Notwithstanding 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 Inden-
ture 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 cove-
nants and obligations of the User so long as said Bonds and
the interest thereon are outstanding and unpaid. Particu-
larly, 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
may, when, in the opinion of the Issuer, it becomes neces-
sary or advisable, authorize and use its best efforts to
14
•
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 Officer; nor shall the Issuer
redeem any Bonds prior to their scheduled maturities, or
change or modify any Bond Resolution, without the prior
written approval of the Approving Officer, unless such
redemption is required by a Bond Resolution.
Section 4.03. REDEMPTION OF BONDS. Provision shall be
made in each Bond Resolution for the redemption of Bonds
prior to maturity, under such terms and conditions as shall
be set forth therein. The redemption of any outstanding
Bonds prior to maturity at any time shall not relieve the
User of its unconditional obligation to pay each remaining
Installment Loan Payment 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 or maturities of any Bonds
upon default, or otherwise, under the provisions of the
Trust Indenture. If any available funds in excess of
current requirements are held on deposit in the Debt Service
Fund at the time payment of any Installment Loan Payment is
due, such payment may be reduced by the amount of the funds
so held on deposit. The User shall have the right to prepay
all or a portion of any Installment Loan Payment at any
time. Any such prepayment by the User shall not relieve it
of liability for each remaining Installment Loan Payment 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
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,
15
• •
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 pro-
ceeds of the Bonds at any time which will cause the Bonds to
be arbitrage bonds within the meaning of Section 103(c) of
the Code or the Regulations pertaining thereto; and by this
covenant the Issuer and the User are obligated to comply
with the requirements of the aforesaid Section 103(c) and
the pertinent Regulations.
Section 4.06. TAX-EXEMPT STATUS OF INTEREST ON THE
BONDS AND MANDATORY REDEMPTION. (a) The Issuer covenants
that it shall, prior to the issuance of the Bonds, duly
elect to have the provisions of Section 103(b)(6)(D) of the
Code apply to such issue, and such election shall be made in
accordance with the applicable Regulations. The User cove-
nants that it shall furnish to the Issuer whatever informa-
tion is necessary for the Issuer to make any such election
and the User shall file with the Internal Revenue Service
such supplemental statements and other information as are
required by the applicable Regulations with respect to all
capital expenditures made, paid, or incurred by or on behalf
of the User or any person related to the User, within the
meaning of Section 103(b)(6)(C) of the Code, in the Project
Location, and in any other political jurisdiction contiguous
thereto with respect to any facilities contiguous to or
integrated with any facilities in the Project Location,
within the meaning of Sections 1.103-10(b)(2)(ii)(e) and
1.103-10(d) (2)(i) of the Regulations (collectively the
"Project Area").
(b) The User hereby covenants that (i) substantially
all the proceeds (within the meaning of Section 103(b)(6) of
the Code) from the sale of the Bonds will be used and
expended for amounts paid or incurred after the Inducement
Date for the acquisition, construction, reconstruction, or
improvement of land or property of a character subject to
the allowance for depreciation under the Code, (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, 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)
16
except as otherwise set forth in a certificate or statement
furnished to the Issuer and its Bond Counsel prior to the
issuance of Bonds, the acquisition, construction, recon-
struction, or improvement of the Project did not begin
before the Inducement Date, nor was any work performed or
any costs paid or incurred by the User or any other entity
in connection with such acquisition, construction, recon-
struction, or improvement before the Inducement Date.
(c) The User represents (i) that all of the proceeds
of the Bonds are to be used with respect to the Project,
which will be located wholly within the Governmental Unit;
(ii) that, except for any person related to the User within
the meaning of Section 103(b)(6)(C) of the Code, the User
will be the only principal user of the Project within the
meaning of Section 103(b)(6) of the Code; and (iii) that,
except for the Bonds, there will not be outstanding on the
date of delivery of the Bonds any obligations of any state,
territory, or possession of the United States, or any poli-
tical subdivision of the foregoing or of the District of
Columbia constituting "exempt small issues" within the
meaning of Section 1.103-10 of the Regulations, the proceeds
of which have been or are to be used primarily with respect
to facilities located in the Project Location, or in any
contiguous political jurisdiction with respect to any
contiguous or integrated facilities, and which are to be
used principally by the User (including any person related
to the User within the meaning of Section 103(b)(6)(C) of
the Code).
(d) The User further covenants and represents that it
has not made, paid, or incurred, and will not make, pay, or
incur any capital expenditures which would cause the
interest on the Bonds to become subject to federal income
taxes pursuant to the provisions of Section 103(b) of the
Code. The User further covenants 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
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 Determination of
Taxability, as hereinafter defined, and that the User has
not failed to take and will not fail to take any action
17
•
required to prevent the occurrence of such Determination of
Taxability.
(e) The User acknowledges that the capital expendi-
tures referred to in the preceding paragraphs include all
capital expenditures within the Project Area and all capital
expenditures incurred elsewhere relating to the Project,
including, without limitation, research and development
costs, which may, under any rule or election under the Code,
be treated as a capital expenditure (whether or not such
expenditure is so treated).
(f) The User further covenants that it shall furnish
to the Issuer and its Bond Counsel, prior to the issuance of
the Bonds, a certificate or statement of the aggregate
amount of capital expenditures (other than those to be
financed from the proceeds of the Bonds) made, paid, or
incurred in the Project Area or made, paid, or incurred
elsewhere with respect to the Project ("Included Capital
Expenditures") during the period beginning three years
before the date of delivery of such issue. The User cove-
nants that it will furnish to the Trustee (i) a copy of
supplemental statements required to be filed with the
Internal Revenue Service by Section 1.103-10 of the Regula-
tions listing by date and amount any Included Capital
Expenditures (other than those mentioned in Section
103(b)(6)(F) of the Code) during the three-year period
beginning as of the date of issuance of the Bonds, including
all such Included Capital Expenditures not listed on the
capital expenditure certificate filed with the Internal
Revenue Service prior to the issuance of the Bonds, and (ii)
within 30 days after it has made, paid, or incurred the
maximum amount of capital expenditures permitted under
Section 103(b)(6)(D) of the Code, a statement to that
effect. The User shall file such supplemental statements
with the District Director of Internal Revenue or the
Director of the regional service center of the Internal
Revenue Service with whom the User's federal income tax
return is required to be filed on the due date prescribed
for filing such return (without regard to any extensions of
time). Each such supplemental statement shall set forth a
description of those capital expenditures which are capital
expenditures under Section 103(b)(6)(D)(ii) of the Code and
shall take into account facilities referred to in Section
103(b)(6)(E) of the Code in computing such capital
expenditures. This covenant shall survive the termination
of this Agreement.
(g) The User covenants that a Determination of Taxa-
bility as hereinafter defined shall not occur, whether or
not as a result of any action or inaction by the User.
18
•
(h) A "Determination of Taxability" as used herein,
and in the Initial Bond Resolution and in the Form of Bond
included therein shall mean any of the following:
(i) It is determined (in an opinion of Bond
Counsel) that interest paid in respect of a Bond is
includable for federal income tax purposes in the gross
income of a holder or former holder of a Bond (other
than the User, or a "substantial user" or a "related
person" as those terms are used in Section 103 of the
Code); or
(ii) The Internal Revenue Service issues a "notice
of deficiency" pursuant to Section 6212 of the Code (or
any successor provision of the Code as in effect from
time to time) to any such holder or former holder
assessing a tax in respect of any interest on the
Bonds; or
(iii) The Internal Revenue Service enters into any
settlement agreement with any holder or former holder
of any Bond under which a tax, penalty or interest in
respect of any interest on such Bond is to be assessed.
(i) The User shall have no right to require any holder
or former holder of any Bond to contest or pursue any appeal
of, or have any communication with the Internal Revenue
Service concerning a Determination of Taxability or any
notice from the Internal Revenue Service or any agent
thereof proposing that interest on any Bond be taxable, and
no holder or former holder of any Bond shall have a duty to
make any such contest or pursue any such appeal or have any
such communication. In the event that a holder or former
holder of any Bond, in the exercise of his, her or its sole
discretion, does contest or appeal or have any communication
with the Internal Revenue Service concerning a Determination
of Taxability, or any notice from the Internal Revenue
Service or an agent thereof proposing that interest on any
Bond be taxable, the holder or former holder of the Bond
shall retain full control over the settlement or other
disposition of any and all issues before the Internal
Revenue Service with respect to the Bond.
(j) Within 60 days of the occurrence of a Determina-
tion of Taxability (provided, the running of such 60 day
period may be stayed by the delivery to the Trustee of the
written election of all Bondholders to postpone mandatory
redemption of the Bonds pending contest or appeal of such
Determination of Taxability, such stay to continue until the
delivery by any Bondholder to the Trustee of written notice
of such Bondholder's election that the running of such 60
day period resume), there shall be a mandatory redemption
prior to maturity of the entire outstanding unpaid principal
and accrued interest of the Bonds, and the payment by the
19
•
User to the Trustee for the benefit of the Bondholders or
former Bondholders of agreed liquidated damages (for loss of
a bargain -and not as a penalty) if any, and any interest,
penalties, reasonable costs and expenses incurred by the
Bondholders or former Bondholders in connection with a
Determination of Taxability required to be reimbursed to
such Bondholders or former Bondholders, all as shall be
provided for in, and in accordance with the provisions of,
each Bond Resolution. Such payment of agreed liquidated
damages, if any, and any interest, penalties, reasonable
costs and expenses required to be reimbursed in connection
with a Determination of Taxability shall be a direct obliga-
tion of the User to the Bondholders or former Bondholders
and shall be paid to the Trustee for the benefit of such
Bondholders or former Bondholders during the term of this
Agreement and thereafter shall be paid by the User directly
to such Bondholders or former 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
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
connection 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 that it has the sole and
exclusive responsibility to make the necessary calculations
and determinations, together with summaries of the manner in
which such calculations and determinations were made, and to
communicate them to the Trustee in order that the Trustee
may make the payments, at the times and as described in
Section 7(g) of the Initial Bond Resolution and maintain
records as required in Article 4(d) of the Trust Indenture.
20
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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 forthwith shall
pay the amount of such insufficiency on such date to the
Trustee in immediately available funds. The obligations 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 uncondi-
tionally agrees and covenants to pay all reasonable expenses
and charges, legal or otherwise (including court costs and
attorneys' fees), paid or incurred by the Issuer and the
Trustee in realizing upon any of the said payments to be
made by the User or in enforcing the provisions of this
Agreement or any Bond Resolution or the Trust Indenture.
Section 5.02. TRUSTEE AND REMEDIES. (a) The User is
advised and recognizes that the Issuer will assign all of
its right, title, and interest in and to all the Installment
Loan Payments 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.
(c) Notwithstanding anything to the contrary contained
in this Agreement, the Bond Resolution, the Trust indenture,
the Security Agreement or the Deed of Trust, except as set
forth below the User shall in no event be liable for a
monetary judgment (except with respect to an action brought
by the Issuer or the Trustee against the User based on fraud
or intentional misrepresentation, or an action based on
conversion, misappropriation, or the disposition of any
insurance proceeds or condemnation award in breach of
provisions of the Deed of Trust, or any action brought by
Indemnified Parties or the Trustee pursuant to Section 3.06
or 5.05 hereof). Notwithstanding the foregoing sentence, in
the event of default under any of the aforementioned
documents, the Issuer, the Trustee, the trustee under the
Deed of Trust or the Security Agreement and/or the
Bondholders may look to the funds created by the Bond
22
• •
Resolution and to the security provided by the Deed of
Trust, the Security Agreement or any other security provided
by the Deed of Trust, the Security Agreement or any other
security agreement executed by the User in connection with
the Loan and to the guarantee of any guarantors contained in
any guarantee agreement or agreements executed in connection
with the Loan (including without limitation the Guarantee
Agreement between the Trustee and the guarantors named
therein dated as of December 1, 1985, and any amendments or
supplements thereto) to enforce the payment of any
indebtedness arising under the aforementioned documents.
Nothing contained in this subparagraph shall be deemed to
constitute a release or impairment of the indebtedness or
obligations under this Agreement, the Bond Resolution, the
Trust Indenture, or of the lien of the Deed of Trust or the
Security Agreement upon the property encumbered thereby, or
of the obligations of any guarantor under any guarantee
agreement or agreements executed in connection with the Loan
or given in favor of the Bondholders, the Issuer, the
Trustee/and/or the trustee named under the Deed of Trust or
the Security Agreement including without limitation the
aforesaid Guarantee Agreement and any amendments or
supplements thereto, and nothing contained in this
subparagraph shall preclude the Issuer, the Trustee, the
trustee under the Deed of Trust or the Security Agreement
and/or the Bondholders from foreclosing the Deed of Trust or
the Security Agreement and/or the Bondholders from
foreclosing the Deed of Trust or the Security Agreement lien
in case of any default under this Agreement, the Bond
Resolution, the Trust Indenture, the Deed of Trust or the
Security Agreement or from enforcing any of the other rights
of the Issuer, the Trustee, the trustee under the Deed of
Trust or the Security Agreement on the Bondholders except as
expressly limited by this subparagraph
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 User, 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 accru-
ing upon any default, omission, or failure of performance
hereunder shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right and
power may be exercised from time to time and as often as may
be deemed expedient. In the event any provision contained
in this Agreement should be breached by the User and there-
after duly waived, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive
23
any other breach of this Agreement. No waiver by either
party of any breach by the other party of any of the provi-
sions 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. This Agreement is to be performed in Nueces County,
Texas, and venue for any action thereon shall lie in such
county and state.
Section 5.04. AMENDMENT OF AGREEMENT. No amendment,
change, addition to, or waiver of any of the provisions of
this Agreement shall be binding upon the parties hereto
unless in writing signed by the Approving Officer and the
President of the Board of Directors. In addition to amend-
ments for any other purpose, it is specifically understood
that this Agreement may be amended, if deemed necessary or
advisable by the User and the Issuer and with written
approval of the Trustee, 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 loca-
tions, or improvements related to the Project, pursuant to
this Agreement and in accordance with applicable laws, with
the same effect as if they had been described originally in
Exhibit A hereto. Notwithstanding any of the foregoing, it
is covenanted and agreed, for the benefit of the Bondholders
and the Trustee, that (without the concurrence of all of the
Bondholders and the Trustee) the provisions of this Agree-
ment 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
24
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Trust Indenture, or which would materially change or affect
Sections 4.04, 4.05, 4.06, 5.05, 6.01, or 6.02.
Section 5.05. INDEMNIFICATION OF TRUSTEE. The User
hereby agrees to indemnify and hold harmless the Trustee in
accordance with the provisions of Article 13 of the Trust
Indenture.
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ARTICLE VI
SPECIAL COVENANTS
Section 6.01. PARTNERSHIP EXISTENCE. The User agrees
that during the term of this Agreement it will maintain its
existence as a limited partnership under the laws of the
State of Texas, it will not permit the partners, or their
percentage interests in the User, to change, and it will not
dissolve or terminate without the prior written approval of
the Trustee, which approval will not be unreasonably
withheld. The User agrees that during the term of this
Agreement, it will not transfer, sell, convey, assign,
encumber or otherwise dispose of the Project, except as
otherwise permitted by the terms of this Agreement and the
Deed of Trust.
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 with notice to and the consent of
the Trustee, 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
financial statements prepared and reviewed after the end of
each fiscal year of the User, by regular independent
certified public accountants acceptable to at least 67% of
the Bondholders and shall furnish the Issuer and the Trustee
a copy of such financial statements within 120 days after
the end of the fiscal year for which such financial
statements were prepared.
Section 6.04. TERM OF AGREEMENT. The term of this
Agreement shall be from the date hereof until all payments
required to be made by the User pursuant hereto shall have
been made, provided, however, that the provisions of Sec-
tions 3.06, 4.05, 4.06 and 5.05 shall survive the termina-
tion of this Agreement or the release of the Trust Indenture
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.
26
•
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) One business day after the date of the mailing
thereof, as shown by the post office receipt, if mailed to
the other party hereto by registered or certified mail
addressed as follows:
Corpus Christi Industrial
Development Corporation
302 South Shoreline
P.O. Box 9277
Corpus Christi, Texas 78469
Attention: City Manager
Broadway Plaza Associates, Ltd.
1800 American Bank Plaza
Corpus Christi, Texas 78475
with copy to:
Porter, Rogers, Dahlman & Gordon
1800 American Bank Plaza
Corpus Christi, Texas 78475
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.
A copy of notice, request, or other communication made
or given under this Agreement shall be given to the Trustee
by registered or certified mail addressed as follows:
MBank Corpus Christi N.A.
Attention: Corporate Trust Department
500 North Shoreline Blvd.
Corpus Christi, Texas 78471
or the latest address specified by said Trustee in writing.
In addition, any notice, request or other comments made or
given under the Agreement shall be given to the Commission
in the manner provided in the indenture.
Section 6.07. SEVERABILITY. If any clause, provision,
or Section of this Agreement should be held illegal or
invalid by any court of competent jurisdiction, the invalid-
ity of such clause, provision, or Section shall not affect
any of the remaining clauses, provisions, or Sections hereof
and this Agreement shall be construed and enforced as if
27
• •
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.
28
•
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed in multiple counterparts, each of
which shall be considered an original for all purposes, as
of the day and year first set out above.
CORPUS CHRISTI INDUSTRIAL
DEVELOPMENT CORPORATION
By
President, Board of Directors
ATTEST:
Secretary, Board of Directors
(SEAL)
BROADWAY PLAZA ASSOCIATES, LTD.
By: South Upper Broadway Venture
By
E.V. Bonner, Jr., Managing
Venturer
By
Rick Rogers, Managing
Venturer
By: HSH Real Estate Investment Co.
By
H. John Knapp, Jr.,
Chairman of the Board
29
•
Exhibit A
Description of the Project
The Project consists of land and the construction thereon of
a medical office building containing four floors and approx-
imately 60,000 square feet, located at Broadway
across from the Y.M.C.A. and adjacent to downtown, Corpus
Christi, Texas, and any other related equipment with respect
thereto.
A-1
RESOLUTION
AUTHORIZING THE ISSUANCE OF
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
REVENUE BONDS, SERIES 1985
AND THE EXECUTION OF
A TRUST INDENTURE
(BROADWAY PLAZA ASSOCIATES, LTD. PROJECT)
JWR: FINAL DRAFT 12/2/85
•
TABLE OF CONTENTS
(The Table of Contents is not a part of the Resolution
but is for convenience of reference only)
PAGE
Title 1
Recitals 1
Resolution 1
SECTION 1. DESIGNATION, AMOUNT, AND PURPOSE OF
THE BONDS 3
SECTION 2. DATE, DENOMINATION, NUMBERS, AND
MATURITIES OF THE BONDS 4
SECTION 3. INTEREST ON TBE BONDS 4
SECTION 4. GENERAL CHARACTERISTICS 4
(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 6
SECTION 6. PLEDGE 24
SECTION 7. DEBT SERVICE FUND 25
(a) Establishment of Debt Service
Fund 25
(b) Accrued Interest 25
(c) Installment Loan Payments 25
(d) Redemption 27
(e) Payments from Debt Service
Fund 27
(f) Immediately Available Funds 27
(g) Investment of Funds 27
SECTION 8. SECURITY FOR FUNDS 28
SECTION 9. THE USER'S PAYMENTS 29
(a) Unconditional Obligation 29
(b) Prepayments 29
• •
PAGE
SECTION 10.. ADDITIONAL PARITY BONDS 29
(a) Additional Bonds 29
(b) Amendments to Trust Indenture
Unnecessary 31
SECTION 11. SPECIAL COVENANTS 31
(a) Installment Loan Payments
Pledged to Bonds Only 31
(b) Non -Encumbrance 31
(c) Performance by Issuer 32
(d) Certain Modifications
Prohibited 32
SECTION 12. BONDS ARE SPECIAL OBLIGATIONS 32
SECTION 13. AMENDMENTS 32
(a) Amendment with Consent of
Owners of all Bonds 32
(b) Notice of Amendment 33
(c) Consent to Amendment 33
(d) Effect of Amendment 34
(e) Consent of Bondholders 34
(f) Ownership of Bonds 34
(g) Amendments Without Consent 34
SECTION 14. ESTABLISHMENT OF CONSTRUCTION FUND 35
(a) Deposit of Bond Proceeds into
Construction Fund 35
(b) Investment of Money in
Construction Fund 35
(c) Deposit of Accrued Interest,
Income, and Profits 36
SECTION 15. PAYMENTS FROM CONSTRUCTION FUND 36
(a) Issuer's Administrative
Overhead Expenses and Other
Costs 36
(b) Reimbursements for and Payment
of Cost of Project 36
(c) Reliance by Trustee 38
SECTION 16. SURPLUS CONSTRUCTION FUNDS 38
(a) Disposition of Surplus Funds 38
(b) Disposition of Construction
Fund upon Acceleration and
Redemption 38
• •
PAGE
SECTION 17. DAMAGED, MUTILATED, LOST, STOLEN, OR
DESTROYED BONDS 39
(a) Replacement Bonds 39
(b) Application for Substitute
Bonds 39
(c) No Default Occurred 39
(d) Charge for Issuing Substitute
Bonds 39
(e) Authority for Issuing Substitute
Bonds 40
SECTION 18. NO ARBITRAGE 40
SECTION 19. FINDINGS 40
SECTION 20. SALE OF THE BONDS 40
SECTION 21. TRUST INDENTURE 40
RESOLUTION AUTHORIZING THE ISSUANCE OF CORPUS
CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION REVENUE
BONDS, SERIES 1985 AND THE EXECUTION OF A TRUST
INDENTURE (BROADWAY PLAZA ASSOCIATES, LTD.
PROJECT)
THE STATE OF TEXAS
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
WHEREAS, Corpus Christi Industrial Development
Corporation (the "Issuer") is a nonstock, non-profit
industrial development corporation organized and existing
under the laws of the State of Texas, including particularly
the Development Corporation Act of 1979, as amended (Article
5190.6, V.A.T.C.S.) (the "Act"); and
WHEREAS, the Issuer is a duly constituted public
instrumentality of the City of Corpus Christi, Texas (the
"Governmental Unit"), a political subdivision of the State
of Texas, within the meanings of the regulations of the
United States Treasury Department (the "Regulations") and
the rulings of the Internal Revenue Service prescribed and
promulgated pursuant to Section 103 of the Internal Revenue
Code of 1954, as amended (the "Code"), and the Issuer is
functioning and acting solely on behalf of the Governmental
Unit; and
WHEREAS, a "Loan Agreement between Corpus Christi
Industrial Development Corporation and Broadway Plaza
Associates, Ltd.", dated as of December 1, 1985 (the "Agree-
ment"), has been duly executed between the Issuer and
Broadway Plaza Associates, Ltd. (the "User"); and
WHEREAS, the User is a limited partnership duly created
and fully qualified to transact business in the State of
Texas; and
WHEREAS, the Agreement is hereby adopted by reference
for all purposes, with the same effect as if it had been set
forth in its entirety in this bond resolution (this "Initial
Bond Resolution"); and
WHEREAS, the Agreement was executed to provide for the
acquisition, construction, equipping, and furnishing of a
project (as defined by the Act) and to provide a loan to the
User for such purpose; and
WHEREAS, this preamble and the trust indenture (the
"Trust Indenture") hereinafter set forth in this Initial
Bond Resolution shall constitute an integral part of this
Initial Bond Resolution; and
WHEREAS, the corporate trustee under the Trust Inden-
ture (the "Trustee") will have the duties and obligations
hereinafter provided; and
WHEREAS, the bonds authorized to be issued by this
Initial Bond Resolution (the "Bonds") are to be issued and
delivered pursuant to applicable laws, including the Act;
and
WHEREAS, the User and the Trustee have entered into a
Deed of Trust and Security Agreement --Financing Statement
dated as of December 1, 1985 (which, together with all
amendments or supplements thereto is herein referred to as
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 and MBank Corpus Christi, N.A.,
Trustee, as secured party, have entered into a Security
Agreement, dated as of December 1, 1985, and other
agreements dated as of December 1, 1985, and MBank Corpus
Christi, N.A., Trustee, as secured party, and the User
and/or one or more of the partners of the User have entered
into a Collateral and Pledge Agreement dated as of December
1, 1985, (which agreements, together with all amendments and
supplements thereto, are herein collectively referred to as
the "Security Agreement") 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 (1) the principal of, redemption premium, if
any, and interest on the Bonds, when due, (2) any agreed
liquidated damages owed by the User to the Bondholders or
former Bondholders, (3) any interest, penalties, reasonable
costs and expenses incurred by the Bondholders or former
2
.•
Bondholders in connection with a Determination of Taxability
required to be reimbursed to such Bondholders or former
Bondholders by the User, as provided in the Bonds, (4) all
fees and expenses of the Trustee and Registrar and the
paying agents for the Bonds, and (5) all other amounts
required to be paid by the Agreement, this Initial Bond
Resolution, and the Trust Indenture, all as hereinafter set
forth; and
WHEREAS, for purposes of this Initial Bond Resolution,
the definitions of terms in the Agreement, the Deed of
Trust, and the Trust Indenture are hereby adopted, and the
terms given herein shall have the same meanings as such
terms are given in said Agreement, Deed of Trust, the
Security Agreement, and Trust Indenture unless a different
meaning is given herein.
1H4REFORE, 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
BONDS, SERIES 1985 (BROADWAY PLAZA ASSOCIATES, LTD. PROJECT)
(the "Bonds") are hereby authorized to be issued in the
aggregate principal amount of $5,570,000 on behalf of the
City of Corpus Christi, Texas TO PAY PART OF THE COST OF
ACQUIRING, CONSTRUCTING, EQUIPPING, AND FURNISHING, OR
CAUSING TO BE ACQUIRED, CONSTRUCTED, EQUIPPED, AND FURNISHED
A PROJECT (THE "PROJECT") IN THE CITY OF CORPUS CHRISTI,
TEXAS FOR BROADWAY PLAZA ASSOCIATES, LTD. (i'H. "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 December 1, 1985, shall be issued and delivered in
the form of sixteen (16) registered Bonds, without coupons,
being numbered R-1 through R-10, inclusive, and being in the
denomination and principal amount of $500,000 each; five (5)
fully registered Bonds, without coupons, being numbered R-11
through R-15, inclusive, and being in the denomination and
principal amount of $100,000; and one (1) fully registered
Bond, without coupons, being numbered R-16, inclusive, and
being in the denomination and principal amount of $70,000,
payable in installments to the registered owners thereof, or
their registered assigns, all in the manner hereinafter pro-
vided, aggregating $5,570,000, initially payable to MBank
Corpus Christi, N.A., Corpus Christi, Texas with the
principal of said Bonds to be payable in monthly
installments on the dates and in the amounts set forth in
the FORM OF BOND in Section 5.
3
•
Section 3. INTEREST ON THE BONDS. Each of the Bonds
initially authorized hereby shall bear interest on the
unpaid principal balance thereof from the date of delivery
to the purchasers thereof (which date shall be indicated by
the Trustee in the Delivery Certificate appearing on each of
the Bonds) to its scheduled due date, or date of prepayment
or redemption prior to its scheduled due date, at the rates
and during the periods set forth in the FORM OF BOND set
forth in Section 5. 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
their scheduled principal installment payment dates, may be
transferred and assigned, shall have the characteristics,
and shall be signed and executed (and the Bonds shall be
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 each of the Bonds by executing
the Trustee's Certificate of Authentication appearing on
each of the Bonds as provided in Section 5. In addition, on
the date of delivery of the Bonds to the purchasers thereof,
the Trustee shall fill in the date of delivery of each of
said Bonds in the Delivery Certificate appearing on each of
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 registra-
tions 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 Bond upon
presentation thereof at such office. The User and each
Bondholder shall have the right to inspect such Bond Regis-
tration 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 attor-
ney, by proper written instrument of transfer, in the form
and with guaranty of signatures satisfactory to the Regis-
trar, 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
4
• •
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.
(c) Payment to Registered Owner. The person in whose
name any Bond shall be registered on the Bond Registration
Books may be deemed and treated as the absolute owner
thereof for all purposes of this Initial Bond Resolution and
the Trust Indenture whether or not such Bond shall be
overdue, and the Issuer, the Trustee, and the User, shall
not be affected by any notice to the contrary; and payment
of, or on account of, the principal of, premium, if any,
agreed liquidated damages, if any, interest, penalties,
reasonable costs and expenses, if any, incurred by the
Bondholders or former Bondholders in connection with a
Determination of Taxability required to be reimbursed to
such Bondholders or former Bondholders as provided in the
Bonds and interest on any such Bond shall be made only to
such registered owner thereof; but such registration may be
changed as provided herein. All such payments shall be
valid and effectual to satisfy and discharge the liability
upon such Bond to the extent of the sum or sums so paid.
(d) Notation of Prepayment. The Issuer hereby ap-
points the Trustee as the Paying Agent for the Bonds. Upon
the prepayment or partial redemption of any Bond, the
Trustee, as Registrar and Paying Agent, shall note in the
Prepayment Record appearing on such Bond the amount of such
prepayment or redemption, the date said payment was made and
the remaining unpaid principal balance of said Bond and
shall then have said entry signed by an authorized officer
of the Trustee. The Trustee shall also record such informa-
tion in the Bond Registration Books and the Trustee shall
also record in the Bond Registration Books all payments of
principal installments on the Bonds when made on their
respective due dates.
(e) Temporary Bonds. Until Bonds in definitive form
are ready for delivery, the Issuer may execute, and upon its
request, the Trustee shall authenticate and deliver in lieu
of any thereof, and subject to the same provisions, 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 BONDS set
forth in Section 5 and with appropriate omissions, varia-
tions, 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
5
• •
temporary form shall be entitled to the lien and benefit of
this Initial Bond Resolution, the Deed of Trust, the
Security Agreement and the Trust Indenture. The Issuer
shall, without unreasonable delay, prepare, execute, and
deliver to the Trustee, and thereupon, upon the presentation
and surrender of the Bond or Bonds in temporary form, the
Trustee shall authenticate and deliver, in exchange there-
for, 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.
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:
6
*
FORM OF BOND
NO. R- $500,000
UNITED STATES OF AMERICA
STATE OF TEXAS
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
REVENUE BONDS
SERIES 1985
(BROADWAY PLAZA ASSOCIATES, LTD. PROJECT)
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION (the
"Issuer"), being a nonstock, nonprofit industrial develop-
ment corporation organized and existing under the laws of
the State of Texas, including particularly the Development
Corporation Act of 1979, as amended (Article 5190.6,
V.A.T.C.S.) (the "Act"), and acting on behalf of City of
Corpus Christi, Texas, hereby promises to pay to MBank
Corpus Christi, N.A., or its registered assigns, the princi-
pal amount of
FIVE HUNDRED THOUSAND DOLLARS
in installments, as follows:
DATE AMOUNT DATE AMOUNT
*R-1 through R-10
7
•
**
FORM OF BOND
NO. R- $100,000
UNITED STATES OF AMERICA
STATE OF TEXAS
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
REVENUE BONDS
SERIES 1985
(BROADWAY PLAZA ASSOCIATES, 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 the
City of Corpus Christi, Texas, hereby promises to pay to
MBank Corpus Christi, N.A., or its registered assigns, the
principal amount of
ONE HUNDRED THOUSAND DOLLARS
in installments, as follows:
DATE AMOUNT DATE AMOUNT
**R-11 through R-15
8
•
FORM OF BOND
NO. R- $70,000
UNITED STATES OF AMERICA
STATE OF TEXAS
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
REVENUE BONDS
SERIES 1985
(BROADWAY PLAZA ASSOCIATES, 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 the
City of Corpus Christi, Texas, hereby promises to pay to
MBank Corpus Christi, N.A., or its registered assigns, the
principal amount of
SEVENTY THOUSAND DOLLARS
in installments, as follows:
DATE AMOUNT DATE AMOUNT
*** R-16
9
• •
and to pay interest thereon, from the date of delivery
hereof (which date appears in the Delivery Certificate
endorsed on this Bond), calculated on the basis of a 360 -day
year composed of twelve months of 30 days each, unless such
calculation would result in the payment of interest in
excess of the maximum interest rate in which event interest
on this Bond shall be calculated on the basis of a 365 -day
or 366 -day year, as the case may be, at a per annum rate
equal to seventy-five percent (75%) of the "Base Rate" of
MBank Corpus Christi N.A. (the "Bank") (the rate announced
from time to time by the Bank from its principal office as
the Base Rate of the Bank) , and at a rate of 15% per annum
on overdue principal and, to the extent legally permissible,
on overdue interest. Any change in the Base Rate shall
automatically, and without notice to the Issuer, be effec-
tive for the purpose of changing the rate of interest which
this Bond bears as of the opening of business on the date of
any such change in the Base Rate. Notwithstanding the
foregoing interest rate calculations, from the date of
delivery of this Bond through December 15, 1987, the rate of
interest on this Bond will be fixed at 8% per annum.
Furthermore, after December 15, 1987, the interest rate
resulting from the calculations as hereinabove provided
shall never be lower than 8% per annum nor exceed a rate
which would cause the net effective interest rate (as
defined and calculated in accordance with Article 717k-2,
V.A.T.C.S., as it exists on the date of issuance of this
Bond) for this Bond as of any date to exceed 15%. Interest
on this Bond shall be payable on March 15, 1986 and on the
fifteenth day of each June, September, December and March
thereafter through December 15, 1987 and then interest on
this Bond shall be payable on the fifteenth day of each
month thereafter while this Bond is outstanding (each such
date being an "interest payment date").
THE TRUSTEE (hereinafter defined) shall calculate the
total interest due on the unpaid principal balance of this
Bond (the "Interest Calculation") on each date any payment
of interest or principal of this Bond is due (the
"Calculation Date") and, on such Calculation Date, shall
immediately notify the User (hereinafter defined) of such
Interest Calculation, which calculation shall represent the
full amount of interest due on this Bond on such Calculation
Date. If the Calculation Date is a Saturday, Sunday, legal
holiday, or day on which banking institutions in the city
where the Trustee is located are authorized by law or execu-
tive order to close, then the Interest Calculation shall be
made and notice shall be given to the User on the next
succeeding day which is not such a Saturday, Sunday, legal
holiday or day on which banking institutions are authorized
to close, all in the same manner and with the same force and
10
•
effect as if such Interest Calculation had been made on the
date the interest was due.
1kbr. 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 princi-
pal and interest shall be made to the registered owner by
check or draft mailed by MBank Corpus Christi, N.A., (the
"Trustee", "Paying Agent", and "Registrar" for this Bond) or
its successor 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 any principal
installments 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
December 1, 1985 (the "Bonds") authorized and issued in the
aggregate principal amount of $5,570,000 pursuant to a
resolution adopted by the Board of Directors of the Issuer
(the "Initial Bond Resolution") on behalf of the City of
Corpus Christi, Texas TO PAY PART OF THE COST OF ACQUIRING,
CONSTRUCTING, EQUIPPING, AND FURNISHING, OR CAUSING TO BE
ACQUIRED, CONSTRUCTED, EQUIPPED, AND FURNISHED A PROJECT
(THE "PROJECT") IN CORPUS CHRISTI, TEXAS, FOR BROADWAY PLAZA
ASSOCIATES, LTD., (THE "USER") FOR THE SPECIFIC PURPOSE OF
THE PROMOTION AND ENCOURAGEMENT OF EMPLOYMENT AND THE PUBLIC
WELFARE.
ON ANY DATE, the Bonds are subject to optional
prepayment or redemption as a whole and not in part, and may
be prepaid or redeemed as a whole and not in part prior to
their 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 30th
day prior to the date of prepayment or redemption. All of
the Bonds may be so prepaid or redeemed on any date, at the
prepayment or redemption price equal to the principal amount
thereof, plus accrued interest thereon to the date of
prepayment or redemption, and with a premium, calculated as
a percentage of the outstanding principal amount thereof, as
follows: through December 31, 1987, 5% premium; from
January 1, 1988, through December 31, 1988, 4% premium; from
January 1, 1989, through December 31, 1989, premium of 3%;
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from January 1, 1990, through December 31, 1990, 2% premium;
and on and after January 1, 1991, 1% premium. The
redemption of the Bonds resulting from the exercise by the
User of its option to so prepay and redeem the Bonds in
whole and not in part shall occur in the offices of the
Trustee during the normal business hours of the Trustee on
the 30th day following such written notice or, if such day
is a Saturday, Sunday, legal holiday, or day on which the
offices of the Trustee are not open for business, on the
next succeeding day on which the offices of the Trustee are
open for business.
ON ANY DATE PRIOR TO COMMENCEMENT OF CONSTRUCTION OF
THE PROJECT, the Bonds are subject to optional prepayment or
redemption as a whole and not in part, and may be prepaid or
redeemed as a whole and not in part, prior to their
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 30th day prior
to the date of prepayment or redemption. All of the Bonds
may be so prepaid or redeemed on any date prior to
commencement of construction of the Project at the
prepayment or redemption price equal to the principal amount
thereof, plus accrued interest thereon to the date of
prepayment or redemption, and without premium. Any
prepayment of such last maturing and unpaid principal
installment of each and every Bond resulting from the
exercise by the User of its option to so prepay the last
maturing and unpaid principal installment of each and every
Bond shall occur in the offices of the Trustee during the
normal business hours of the Trustee on the applicable
December 15th following such 30 -day written notice or, if
such day is a Saturday, Sunday, legal holiday, or day on
which the offices of the Trustee are not open for business,
on the next succeeding day on which the offices of the
Trustee are open for business.
ON ANY DECEMBER 15 WHILE ANY BONDS ARE OUTSTANDING, the
last maturing and unpaid principal installment of each and
every Bond are subject to optional prepayment or redemption
and may be prepaid or redeemed prior to their respective
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 30th day prior
to the date of payment of redemption. Such last maturing
and unpaid principal installments of each and every Bond may
be so prepaid or redeemed as a whole and not in part, and
shall be prepaid or redeemed pro rata among the Bonds in
inverse chronological order of their scheduled due dates in
an amount of not less than all of the last maturing and
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unpaid principal installment on each and every Bond, at the
prepayment or redemption price equal to the last maturing
and unpaid principal installment thereof to be prepaid or
redeemed, plus accrued interest thereon to the date of
prepayment or redemption, and without premium. Any
prepayment of such last maturing and unpaid principal
installment of each and every Bond resulting from the
exercise by the user of its option to so prepay the last
maturing and unpaid principal installment of each and every
Bond shall occur in the offices of the Trustee during the
normal business hours of the Trustee on the applicable
December 15th following such 30 -day written notice or, if
such day is a Saturday, Sunday, legal holiday, or day on
which the offices of the Trustee are not open for business,
on the next succeeding day on which the offices of the
Trustee are open for business.
ON ANY DATE PRIOR TO OR DURING THE PERIOD OF
CONSTRUCTION OF THE PROJECT, the Bonds are subject to
mandatory redemption by the Trustee (or purchase in lieu of
redemption as provided below), as a whole and not in part,
with funds provided by the User, upon receipt by the Trustee
of 30 days' written notice (the "Put Notice") from the
registered owners of at least 67% in the aggregate principal
amount of all Bonds then outstanding, that said owners as
the current owners of such Bonds are exercising their right,
hereby granted, to put all the Bonds to the Trustee for
redemption at a price equal to the principal amount thereof
plus accrued interest thereon to the date of redemption, and
without premium; provided, however, the registered owners of
at least 67% in the aggregate principal amount of all Bonds
then outstanding may rescind such put at any time during
such 30 day notice period, with User's approval of such
rescission. In Lieu of any such redemption, the User may
purchase or cause the Bonds to be purchased at a price equal
to the principal amount thereof, plus accrued interest
thereon to the date of such purchase, and without premium,
by providing the Trustee with written notice of its
intention to purchase the Bonds no later than ten (10) days
prior to the date such redemption would occur. The
redemption of the Bonds resulting from a put by the
registered owners of at least 67% in the aggregate principal
amount of all Bonds then outstanding or the purchase in lieu
of such redemption shall occur in the offices of the Trustee
during the normal business hours of the Trustee on the 30th
day following the Put Notice or, if such day is a Saturday,
Sunday, legal holiday, or day on which the offices of the
Trustee are not open for business, on the next succeeding
day on which the offices of the Trustee are open for
business.
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ON DECEMBER 15, 1992, DECEMBER 15, 1997, AND DECEMBER
15, 2002, the Bonds are subject to mandatory redemption by
the Trustee, (or purchase in lieu of redemption as provided
below) as a whole and not in part, with funds provided by
the User, upon receipt by the Trustee of one year's written
notice from the registered owners of at least 67% in the
aggregate principal amount of all Bonds then outstanding,
that said owners as the current owners of such Bonds are
exercising their right, hereby granted, to put all the Bonds
to the Trustee for redemption at a price equal to the
principal amount thereof plus accrued interest thereon to
the date of redemption, and without premium; provided,
however, the registered owners of at least 67% in the
aggregate principal amount of all Bonds then outstanding may
rescind such put at any time during such one year notice
period, with User's approval of such rescission. In lieu of
any such redemption, the User may purchase or cause the
Bonds to be purchased at a price equal to the principal
amount thereof, plus accrued interest thereon to the date of
such purchase, and without premium, by providing the Trustee
with written notice of its intention to purchase the Bonds
no later than ten days prior to the date such redemption
would occur. The redemption of the Bonds resulting from a
put by the registered owners of at least 67% in the
aggregate principal amount of all Bonds then outstanding or
the Purchase in lieu of such redemption shall occur in the
offices of the Trustee during the normal business hours of
the Trustee on December 15, 1992, December 1, 1997, or
December 15, 2002 as provided in such written notice or, if
such day is a Saturday, Sunday, legal holiday, or day on
which the offices of the Trustee are not open for business,
on the next succeeding day on which the offices of the
Trustee are open for business.
ON ANY DATE, the unpaid principal installments of this
Bond are subject to mandatory prepayment or redemption, as a
whole, and shall be prepaid or redeemed prior to their
scheduled due dates, by the Trustee, with funds which shall
be furnished by the User, on the earliest practicable date,
and in all events within sixty days (subject, however, to
the right of the holders of all outstanding Bonds to stay
the running of said sixty day period for purposes of joining
in a contest or appeal of a Determination of Taxability),
following the occurrence of a Determination of Taxability as
defined and provided for in the Agreement (hereinafter
defined). The prepayment or redemption price in such event
shall be equal to the unpaid principal amount of this Bond
so prepaid or redeemed, plus accrued interest thereon to the
date of prepayment or redemption, and without premium. In
addition, there shall be due and owing to the holder of this
Bond an additional amount as agreed liquidated damages (for
loss of a bargain and not as a penalty) calculated by
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subtracting (i) the amount of interest accrued on this Bond
during the period from the earliest date from which interest
paid in respect of this Bond is determined to be includable
for federal income tax purposes in the gross income of the
holder of this Bond to the date on which this Bond is
redeemed (the "Inclusion Period") from (ii) the quotient of
the amount of said interest divided by one minus the Maximum
Federal Corporate Tax Rate (hereinafter defined); provided,
however that the Inclusion Period shall not include that
period for which assessment and collection of Federal Income
Taxes attributable to interest on this Bond is barred by
Section 6501 of the Internal Revenue Code. "Maximum Federal
Corporate Tax Rate" is defined to mean the maximum rate of
income taxation to which a corporation is subject under the
Internal Revenue Code of 1954, as amended, as in effect from
time to time. Any change in the Maximum Federal Corporate
Tax Rate which applies to the Inclusion Period shall
automatically be reflected in the calculation of agreed
liquidated damages. In addition, there shall be due and
owing to the holder of this Bond an additional amount
sufficient to reimburse the holder of this Bond for any
interest or penalties which are payable by the holder of
this Bond, plus the reasonable costs and expenses incurred
by the holder of this Bond, in connection with any
Determination of Taxability. The agreed liquidated damages,
and reimbursement of interest, penalties, reasonable costs
and expenses due and owing to the holder of this Bond in
connection with a Determination of Taxability shall be paid
by the Trustee with funds furnished by the User.
IN ADDITION, if there shall be a Determination of
Taxability, the User shall be obligated .to, and promptly
shall, pay an additional amount to the Trustee for the sole
benefit of (i) each prior registered owner of this Bond, if
this Bond was transferred during the Inclusion Period prior
to the mandatory redemption date described in the preceding
paragraph or (ii) each registered owner of this Bond if this
Bond was outstanding during the Inclusion Period but was
paid, prepaid, or redeemed prior to the mandatory redemption
date described in the preceding paragraph. Such payment
shall be sufficient in the aggregate to pay in respect of
this Bond the amount the owner thereof would have received
as agreed liquidated damages if, and assuming that, the
aforesaid mandatory redemption date had occurred on the
actual date of payment, prepayment, transfer or redemption
of this Bond. The User also shall be obligated to, and
promptly shall, pay an additional amount to the Trustee, for
the sole benefit of such owner or prior owner of this Bond,
sufficient to reimburse such owner or prior owner of this
Bond for interest or penalties, if any, which are payable by
such owner or former owner of this Bond, plus the reasonable
costs and expenses, if any, incurred by such owner or former
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owner of this Bond, in connection with any Determination of
Taxability. The Trustee shall pay such additional amounts
to each such owner or former owner during the applicable
period, as shown by the Bond Registration Books.
ON ANY DATE, Bonds are subject to prepayment or
redemption, in whole or in part and shall be prepaid or
redeemed prior to the scheduled due dates by the Trustee, in
inverse numerical order 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 Construc-
tion Fund (created by the Initial Bond Resolution) after the
completion of the Project, as provided and required by
Section 16 of the Initial Bond Resolution. If a Bond is so
prepaid or redeemed in part, then such prepayment shall be
applied against the unpaid principal installments of such
Bond in inverse chronological order of their scheduled due
dates.
THE AGREEMENT provides that any provision for any
payment contained in the Agreement or this Bond shall be
held to be subject to reduction to the amount allowed under
the applicable usury laws of the State of Texas and the
United States of America, as now or hereafter construed by
the courts having jurisdiction, and it is agreed by the
Issuer and the owner of this Bond that in no event shall
usury be paid or collected with respect to this Bond.
AT LEAST 20 DAYS PRIOR to the date fixed for any
prepayment or redemption of the unpaid principal install-
ments of the Bonds the Trustee shall cause a written notice
of such redemption to be mailed to the registered owner of
this Bond addressed to such owner at the address appearing
on the Bond Registration Books. By the date fixed for any
such prepayment or redemption, due provision shall be made
by the User with the Trustee and the Paying Agent for the
payment of the principal amount of this Bond which is to be
prepaid or redeemed, plus accrued interest thereon to the
date fixed for prepayment or redemption, plus any required
prepayment or redemption premium, and any other amounts
including agreed liquidated damages, if any, due the owner
of this Bond (herein collectively referred to as the
"redemption price"). If such written notice of prepayment
or redemption is given and if due provision for payment of
the redemption price is made, all as provided above, the
unpaid principal installments of the Bonds 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
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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 such Bonds to the Paying Agent, such unpaid
principal installments which are to be prepaid or redeemed,
shall be paid at the redemption price. Except as set forth
above, the principal installments 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,
together with premium, if any, agreed liquidated damages, if
any, and interest, penalties, reasonable costs and expenses,
if any, required to be reimbursed in connection with a
Determination of Taxability, 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 Indenture, and the "Loan Agreement
between the Corpus Christi Industrial Development
Corporation and Broadway Plaza Associates, Ltd.", dated as
of December 1, 1985 (the "Agreement"). The User, a limited
partnership, is unconditionally obligated to make or pay, or
cause to be made or paid, without set-off, recoupment, or
counterclaim, to the Trustee each such Installment Loan
Payment for deposit into the Debt Service Fund created for
the benefit of the owners of the Bonds by the Initial Bond
Resolution, in aggregate amounts sufficient to pay and
redeem, and provide for the payment and redemption of, the
principal of, interest on and premium, if any, on this Bond,
and the series of which it is a part, and to pay all other
amounts required by the Agreement, the Initial Bond
Resolution, and the Trust Indenture when due, subject to and
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as required by the provisions of the Agreement, the Initial
Bond Resolution, and the Trust Indenture.
THE BONDS are secured by a Trust Indenture dated as of
December 1, 1985 (the "Trust Indenture"), whereunder MBank
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 owners of the Bonds and to perform
other duties in the manner and under the conditions stated
in the Trust Indenture. In case an "Event of Default", as
defined in the Trust Indenture, shall occur, the unpaid
principal installments of the Bonds may be declared to be
due and payable immediately upon the conditions and in the
manner provided in the Trust Indenture.
The Bonds are additionally secured by a Deed of Trust
and Security Agreement --Financing Statement between the User
and the Trustee (the "Deed of Trust") relating to certain
property of the User pledged to secure the payment of the
Bonds relating to certain additional property of the User
pledged to secure the payment of the Bonds. The Bonds are
additionally secured by a Security Agreement and other
agreements between the User and MBank Corpus Christi, N.A.,
Trustee and by a Collateral and Pledge Agreement between
MBank Corpus Christi, N.A., Trustee, as secured party and
the User and/or one or more partners of the User
(collectively, the "Security Agreement") relating to certain
additional property of the User pledged to secure payment of
the Bonds. Reference is hereby made to the Initial Bond
Resolution, the Trust Indenture, the Deed of Trust, the
Security Agreement and the Agreement for additional
provisions with respect to the nature and extent of the
security, the rights, duties, and obligations of the User,
the Issuer, the Trustee, and the owners of the Bonds, the
terms upon which the Bonds are issued and secured, and the
modification of and supplements to any of the foregoing.
THE ISSUER has reserved the right, subject to the
restrictions stated in the Initial Bond Resolution, to issue
additional parity revenue bonds ("Additional Bonds") which,
when issued and delivered, shall be payable from the Debt
Service Fund, and shall be payable from and secured by a
first lien on and pledge of Installment Loan Payments
pursuant to the Agreement and entitled to the benefits of
and secured by the Trust Indenture, the Deed of Trust and
the Security Agreement in the same manner and to the same
extent as, and be on a parity with, all then outstanding
Bonds and 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
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amendments thereto must be approved by the owners of at
least 67% of the aggregate principal amount of the
outstanding Bonds and any Additional Bonds secured by the
Trust Indenture.
THE OWNER HEREOF shall never have the right to
demand payment of this obligation out of any funds raised or
to be raised by taxation or from any source whatsoever
except the payments and amounts described in this Bond, the
Initial Bond Resolution, the Trust Indenture, the Agreement
and the Deed of Trust. Except for the lien on and the
assignment and pledge of such property, payments, and
amounts, no property of the Issuer is encumbered by any lien
or security interest for the benefit of the owner of this
Bond. Neither the State of Texas, the City of Corpus
Christi, Texas, nor any other political corporation,
subdivision, or agency of the State of Texas, nor the Board
of Directors of the Issuer, either individually or collec-
tively, shall be obligated to pay the principal of this
Bond, any premium or payment with respect to this Bond, the
interest hereon, or any other amounts required to be paid
hereunder; and neither the faith and credit, nor the taxing
power, of the State of Texas, the City of Corpus Christi,
Texas, nor any other political corporation, subdivision, or
agency of the State of Texas, is pledged to the payment of
the principal of this Bond, any premium or payment with
respect to this Bond, the interest hereon, or any other
amounts required to be paid hereunder.
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 trans-
fers shall be without expense to the owner hereof, but any
taxes or other governmental charges required to be paid with
respect to the same shall be paid by the owner requesting
such transfer as a condition precedent to the exercise of
such privilege. The registered owner of this Bond may be
deemed and treated by the Issuer, the Trustee and the User
as the absolute owner hereof for all purposes, including
payment and discharge of liability upon this Bond to the
extent of such payment, and the Issuer, the Trustee, and the
User, shall not be affected by any notice to the contrary.
THIS BOND shall not be valid or become obligatory for
any purpose or be entitled to any security or benefit under
the Trust Indenture until the Trustee's Certificate of
Authentication hereon shall have been signed by the Trustee
and the Delivery Certificate hereon shall have been com-
pleted.
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IN WITNESS WHEREOF, this Bond has been signed with the
manual or facsimile 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)
FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds issued under the provi-
sions of the within mentioned Agreement, Initial Bond
Resolution, and Trust Indenture.
MBANK CORPUS CHRISTI, N.A.,
Trustee
By
Authorized Officer
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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 auth-
orizes the transfer of this Bond on the Bond Registration
Books of the Trustee. Such assignment shall not be effec-
tive until such Assignee presents this Bond to the Trustee
for verification of such assignment and gives the Trustee
its address to which payments shall be made and the Trustee
makes notation of such Assignment below.
DATE OF REGISTERED SIGNATURE OF
ASSIGNMENT OWNER ASSIGNEE REGISTRAR
FORM OF DELIVERY CERTIFICATE
DELIVERY CERTIFICATE
THIS BOND was delivered to and paid for by the initial
purchaser hereof on
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FORM OF PREPAYMENT RECORD
Date Principal.
of Prepayment or
Payment Redemption
PREPAYMENT RECORD
Remaining Name & Title of
Principal Authorized Officer
Balance Making Entry
Signature of
Authorized
Officer
Section 6. PLEDGE. The Bonds, and the interest
thereon, together with redemption premium, if any, agreed
liquidated damages, if any, and interest, penalties,
reasonable costs and expenses, if any, required to be
reimbursed in connection with a Determination of Taxability
as provided in the Bonds, 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 establishment and maintenance of
the Debt Service Fund hereinafter 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,
together with redemption premium, if any, agreed liquidated
damages, if any, or liability of User to reimburse interest,
penalties, reasonable costs and expenses, if any, incurred
in connection with a Determination of Taxability, is
outstanding and unpaid.
(b) Accrued Interest.
of the Bonds to the initial
interest, if any, received
and delivery of the Bonds
Trustee into the Debt Service
Immediately after the delivery
purchasers thereof, all accrued
from the proceeds from the sale
shall be transferred by the
Fund.
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(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 pro-
vided in the FORM OF BOND set forth in Section 5,
an amount which, together with any other amounts
then on deposit therein and available for such
purpose, will be sufficient to pay the interest
coming due on the Bonds on each interest payment
date; and
(2) On or before each principal payment date as
provided in the FORM OF BOND set forth in Section
5, an amount which, together with any other
amounts then on deposit therein and available for
such purpose, will be sufficient to pay the
principal of the Bonds 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 specified therein; and
(4) Promptly after, and in all events within 60 days
following, the occurrence of a Determination of
Taxability (subject, however, to the right of the
holders of all outstanding Bonds to stay the
running of said sixty day period for purposes of
joining in a contest or appeal of a Determination
of Taxability), resulting in a mandatory prepay-
ment or redemption of the Bonds, an amount which,
together with any other amounts then on deposit
and available for such purpose, will be sufficient
to pay the agreed liquidated damages, and any
interest, penalties and reasonable costs and
expenses required to be reimbursed in connection
with a determination of Taxability, all as pro-
vided in the FORM OF BOND set forth in Section 5,
due and owing with respect to the Bonds to be
prepaid or redeemed on such mandatory prepayment
or redemption date; and
(5) Promptly after, and in all events within 60 days
following the occurrence of a Determination of
Taxability (subject, however, to the right of the
holders of all outstanding Bonds to stay the
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running of said sixty day period for purposes of
joining in a contest or appeal of a Determination
of Taxability), resulting in a mandatory prepay-
ment or redemption of the Bonds, the additional
amount necessary to pay the agreed liquidated
damages, and any interest, penalties and reason-
able costs and expenses required to be reimbursed
in connection with a Determination of Taxability,
all as provided in the FORM OF BOND set forth in
Section 5, due and owing to the registered owner
or owners of the Bonds which were paid, prepaid,
transferred or redeemed, prior to such mandatory
prepayment or redemption as specified in the FORM
OF BOND set forth in Section 5; and
(6) 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
(7) Promptly after receipt of each statement and
request for payment, an amount equal to the
charges of the Trustee for performing the duties
of Trustee and Registrar, and the charges of the
Paying Agent for the Bonds, as designated in the
FORM OF BOND set forth in Section 5, for paying or
redeeming principal installments of the Bonds and
paying the interest thereon.
In the event the User should fail to make or pay, or cause
to be made or paid, any of the required Installment Loan
Payments set forth in this Section, each such required
payment shall continue as an obligation of the User until
fully paid, and the User agrees to pay the same to the
Trustee, for the benefit of the owners of the Bonds, with
interest thereon, to the extent legally permissible, at the
rate of fifteen percent (15%) per annum, from the date any
such payment was due until payment thereof.
(d) Redemption. The Bonds authorized hereby shall be
subject to redemption, and may or shall be redeemed, as
specified in the FORM OF BOND set forth in Section 5.
(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, redemption
premium, if any, agreed liquidated damages, if any, inter-
est, penalties, reasonable costs and expenses, if any,
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required to be reimbursed in connection with a Determination
of Taxability as provided in the Bonds, 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. The Trustee shall obtain and destroy all
paid Bonds.
(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
User to the extent provided in Section 4.08 of the
Agreement, an amount equal to the aggregate net income
(determined by the User in accordance with federal
income tax accounting principles) attributable to the
amounts held in the Deposit Account (such income to be
determined by the User 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)
25
• •
the Tentative Rebate Amount (as defined in the
Agreement) 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.
(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 by the Trustee with funds
provided by, and at the direction of, the User, 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
26
• •
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.
(4) Calculations of the User. All calculations
and determinations required pursuant to this Section
7(g) shall be made by the User and communicated to the
Trustee, and the Trustee shall not be responsible for,
and shall incur no liability with respect to, any
calculations or determinations made by the User
hereunder, or payments made.
(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 Officer in any direct or indirect
obligations of the United States of America or any agency
thereof, or in bank certificates of deposit, including those
of the Trustee. The Trustee shall make no investments
except as specifically directed by the Approving Officer, or
as otherwise provided herein. 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, includ-
ing 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 Trust
Indenture, the Trustee shall, without further authorization,
27
•
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 gross negligence or willful
misconduct, within a reasonable time after receiving the
written direction from the Approving Officer to make,
redeem, or sell any investment in the manner provided for
herein, and (2) except for any redemption or sale made
pursuant to the next preceding sentence of this paragraph,
for any loss resulting from the making, redeeming, or
selling of any investment which was not authorized by
written direction of the Approving Officer. If the Trustee
is unable, after reasonable effort and within a reasonable
time, to make, redeem, or sell any such investment, it shall
so notify in writing the Approving Officer and the Trustee
shall be relieved of all responsibility with respect there-
to. 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 constitute 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. To the extent the
Trustee deems it advisable, and at the sole discretion of
the Trustee, all uninvested money in all Funds established
pursuant to the Initial Bond Resolution (including the Debt
Service Fund, the Special Rebate Fund and the Construction
Fund), may be secured.
28
• •
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, 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, cove-
nants, and representations set forth in this Initial Bond
Resolution and the Trust Indenture.
(b) Prepayments. It is further understood that the
User may prepay all or any part of each Installment Loan
Payment, and any such prepayment, and any earnings thereon,
shall be applied by the Trustee to the payment of each
Installment Loan Payment; provided that the prepayment or
redemption at any time of any unpaid principal installments
of the Bonds prior to their due dates, with funds from any
source (whether from Installment Loan Payments or other-
wise), shall not relieve the User of its obligation to make
or pay, or cause to be made or paid, each Installment Loan
Payment as specified in Section 9(a), when due with respect
to any remaining unpaid principal installments of the Bonds.
Section 10. ADDITIONAL PARITY BONDS. (a) Additional
Bonds. The Issuer reserves the right, upon the request of
the User, to issue additional parity revenue bonds ("Addi-
tional Bonds") in any amounts, for any lawful purpose or
purposes, including the refunding of any outstanding Bonds.
Such Additional Bonds, along with the Bonds authorized by
this Initial Bond Resolution, shall be considered, consti-
tute, 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 Bonds authorized hereby and any
Additional Bonds, unless the context otherwise indicates.
When issued and delivered such Additional Bonds, the redemp-
tion premium, if any, the agreed liquidated damages, if any,
the interest, penalties, reasonable costs and expenses, if
any, required to be reimbursed in connection with a
Determination of Taxability, 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
29
• •
secured by the Trust Indenture and the Deed of Trust, and
the Security Agreement 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 Addi=
tional Bonds, or affect the validity of the then
outstanding Bonds or Additional Bonds and (B) such
Additional Bonds are secured in the same manner and to
the same extent as and are on a parity with all then
outstanding Bonds and Additional Bonds;
(ii) A certificate is executed by the President
and Secretary of the Board of Directors of the Issuer
to the effect that 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 out-
standing 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 depos-
ited into the Debt Service Fund in amounts sufficient
to pay all principal of, redemption premium, if any,
agreed liquidated damages, if any, interest, penalties,
reasonable costs and expenses required to be reimbursed
in connection with a Determination of Taxability, and
interest on such Additional Bonds, together with all
Trustee, Registrar, and Paying Agent fees and expenses
attributable to such Additional Bonds;
(iv) The Approving Officer and the owners of 67%
of the aggregate principal amount of the Bonds and
Additional Bonds, if any, then outstanding, approve in
writing the Bond Resolution authorizing the issuance of
30
•
such series or issue of Additional Bonds, as required
by the Agreement;
(v) The principal and interest payment dates
during any year in which principal and interest on such
Additional Bonds are scheduled to be paid, are the same
for the Additional Bonds and the Bonds; and
(vi) The 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 In-
stallment 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 are 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 In-
stallment 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 located in Nueces
County, Texas, 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
31
•
execution of any contract or agreement, or terminate or
amend the Agreement, in any manner that would relieve or
abrogate the obligations of the User to make or pay, or
cause to be made or paid, when due, all Installment Loan
Payments, 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, 5.05, 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
Security Agreement, and the Trust Indenture; and the
Bondholders shall never have the right to demand payment
thereof or the interest thereon or any other payments
required thereunder 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. Subject to approval in writing
by the Approving Officer, the owners of 51% in aggregate
principal amount of the then outstanding Bonds shall have
the right from time to time to approve any amendment to any
Bond Resolution, the Bonds, or to the Trust Indenture
(provided that the Trustee must approve any amendment to the
Trust Indenture), which may be deemed necessary or desirable
by the Issuer; provided, however, that nothing herein
contained shall permit or be construed to permit the
amendment, without the consent of the owner of each of the
then outstanding Bonds affected thereby, of the terms and
conditions of any Bond Resolution, the Bonds or the Trust
Indenture, so as to:
(1) change the Debt Service Fund requirements, inter-
est payment dates, mandatory redemption provi-
sions, 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, agreed liquidated damages, if
any, interest, penalties, reasonable costs and ex-
penses, if any, required to be reimbursed in
32
connection with a Determination of Taxability, or
interest on the outstanding Bonds, or impose any
conditions with respect to such payments;
(4) modify the terms of payment of principal of,
redemption premium, if any, agreed liquidated
damages, if any, interest, penalties, reasonable
costs and expenses, if any, required to be
reimbursed in connection with a Determination of
Taxability, 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 published at least once in a financial newspaper, journal
or publication of general circulation in the State of Texas,
during each calendar week for at least two successive
calendar weeks. If, because of temporary or permanent
suspension of the publication or general circulation of all
such financial newspapers, journals and publications, it is
impossible or impractical to publish such notice in the
manner provided herein, then such publication in lieu
thereof as shall be made by the Trustee shall constitute a
sufficient publication of notice. 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. Such
publication is not required, however, if notice in writing
is given to each owner of Bonds.
(c) Consent
less than
first publication
notice the Issuer
executed by the
principal amount
to Amendment. Whenever at any time not
30 days
, and within one year, from the date of the
of said notice or other service of written
shall receive an instrument or instruments
owners of at least 51% in the aggregate
of all Bonds then outstanding, which
33
• •
instrument or instruments shall refer to the proposed
amendment described in said notice and shall specifically
consent to and approve such amendment, the Issuer may adopt
the amendatory resolution in substantially the same form.
(d) Effect of Amendment. Upon the adoption of any
amendatory resolution pursuant to the provisions of this
Section, any such Bond Resolution, or the Trust Indenture,
shall be deemed to be amended in accordance with such
amendatory resolution, and the respective rights, duties,
and obligations under such amendatory resolution, or the
Trust Indenture, of all the Bondholders shall thereafter be
determined and exercised subject in all respects to such
amendments.
(e) Consent of Bondholders. Any consent given by a
Bondholder pursuant to the provisions of this Section shall
be irrevocable for a period of one year from the date of the
first publication or other 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 one year from the
date of the first publication or other 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 the aggregate principal amount of the then
outstanding Bonds have, prior to the attempted revocation,
consented to and approved the amendment.
(f) Ownership of Bonds. For the purpose of this
Section, the fact of being a Bondholder and the amount and
numbers of such Bonds, and the date of being a Bondholder,
may be conclusively presumed, or may be proved by an affi-
davit satisfactory to the Issuer and the Trustee of the
person claiming to be such Bondholder, or by a certificate
executed by any trust company, bank, banker, or any other
depository wherever situated showing that at the date there-
in mentioned such person has on deposit with such trust
company, bank, banker, or other depository, the Bonds des-
cribed in such certificate, or in any other manner, whether
or not the Bonds are so deposited, as the Trustee may ap-
prove. The Issuer may conclusively presume that the status
of any Bondholders will continue until written notice to the
contrary is served upon the Issuer.
(g) Amendments Without Consent. Notwithstanding the
provisions of (a) through (f) of this Section, and without
publication of the proposed amendment and without the con-
sent of the Bondholders, but subject to approval of the
Approving Officer and, in the case of any amendment to the
Trust Indenture, with the approval of the Trustee, the
34
• •
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 proviso to Section 13(a), and a duly certi-
fied or executed copy of each such amendment shall be filed
with the Trustee.
Section 14. ESTABLISHMENT OF CONSTRUCTION FUND. (a)
Deposit of Bond Proceeds into Construction Fund. Prior to
or immediately after the sale and delivery of the Bonds
authorized hereby, the Issuer shall establish the Construc-
tion Fund with the Trustee, as defined in and required by
the Agreement. The Issuer shall deposit all of the proceeds
from the sale and delivery of the Bonds authorized hereby
into the Construction Fund. The Trustee shall draw on and
use the Construction Fund as hereinafter provided. The
amount so deposited into the Construction Fund shall consti-
tute the Loan made to the User by the Issuer as contemplated
and provided in the Agreement.
(b) Investment of Money in Construction Fund. Any
money held as part of the Construction Fund, other than the
amounts described in Section 15(a), shall be invested or
reinvested by the Trustee upon the written direction of the
Approving Officer in any direct or indirect obligations of
the United States of America, or any agency thereof, or in
the bank certificates of deposit, including those of the
Trustee. The Trustee shall make no investments except as
specifically directed in writing by the Approving Officer or
as otherwise provided herein. 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. If at any time it shall become necessary
that some or all of the investments made with the moneys
from the Construction Fund be redeemed or sold to raise
moneys necessary to comply with the provisions of this
Initial Bond Resolution or the Trust Indenture, the Trustee
shall, without further authorization, effect such redemption
or sale, employing, in the case of a sale, any commercially
reasonable method of effecting the same. Upon the written
direction of the Approving Officer the Trustee shall redeem
or sell all or any designated part of such investments
employing, in the case of a sale, any commercially
35
• •
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 gross negligence or willful
misconduct, within a reasonable time after receiving the
written direction from the Approving Officer, to make,
redeem, or sell any investment in the manner provided for
herein, and (2) any loss resulting from the making, redeem-
ing, or selling of any investment which was not authorized
by written direction of the Approving Officer. If the
Trustee is unable, after reasonable effort and within a
reasonable time after receipt of the required written
direction, to make, redeem, or sell any such investment, it
shall so notify in writing the Approving Officer, and the
Trustee shall be relieved of all liability or responsibility
with respect thereto.
(c) Deposit of Accrued Interest, Income, and Profits.
Any accrued interest received from the sale of the Bonds;
and, upon the written direction of the Approving Officer and
to the extent that such use is consistent with the require-
ments of Section 15(b)(v), all income and profits received
from the investment of the Construction Fund, shall (as soon
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
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 and Trustee's Administrative Overhead Expenses and
Other Costs. Immediately after the delivery of the Bonds
authorized hereby, the Trustee shall pay to the Issuer
directly out of the Construction Fund the amount of $27,850
being the amount required to reimburse the Issuer in part
for its administrative and overhead expenses directly
attributable and chargeable to the costs of issuance of the
Bonds authorized hereby, and, promptly after receiving the
bills or statements therefor, all of the actual expenses and
costs of issuance of the Bonds, including, without
limitation, financing charges, printing and engraving
36
expenses, the fees and expenses of accountants, financial
advisors, and attorneys for the Issuer and the Trustee, and
the initial fees and expenses of the Trustee. In addition,
the User shall also pay to the Issuer the amounts set forth
in Section 4.07 of the Agreement when said amounts become
due and payable.
(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 writing, and
authorized by MBank Corpus Christi, N.A., pursuant to the
Construction Fund Disbursement Agreement dated December, 1,
1985 executed between the User and MBank Corpus Christi,
N.A., in its capacity as initial purchaser of the Bonds 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 so
authorized and 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
both a written request of the User and a written
authorization from MBank Corpus Christi, N.A., pursuant to
said Construction Fund Disbursement Agreement. Such request
shall be accompanied by a certificate stating with respect
to each payment as follows:
(i) the expenditures, in summary form, for which
payment is to be made or for which reimbursement is
requested;
(ii) that the amounts requested are to be, or have
been paid, by the User for interest during construction
(and for a period not exceeding one (1) year there-
after), property or to contractors, subcontractors,
materialmen, engineers, architects, or other persons
who will perform or have performed necessary or appro-
priate services or will supply or have supplied neces-
sary or appropriate materials for the acquisition,
construction, equipping, and furnishing of the Project,
as the case may be, and that, to the best of his
knowledge, the fair value of such interest, 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;
37
• •
(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 Deed of Trust, the Security
Agreement, or the Agreement, and particularly those
covenants in Sections 4.05 and 4.06 of the Agreement,
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 any amounts in excess of $ to finance
the cost of land or any interest thereon.
(c) Reliance by Trustee. The Trustee shall rely fully
on any such request and certificate delivered pursuant to
this Section and shall not be required to make any investi-
gation in connection therewith. If amounts paid by the
Trustee with respect to any portion of the Project should
exceed the cost thereof, the User shall promptly repay such
overpayment into the Construction Fund.
(d) 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.
Section 16. SURPLUS CONSTRUCTION FUNDS. (a) Disposi-
tion of Surplus Funds. The completion of the Project shall
be conclusively evidenced, and the date of completion shall
be established by a written certificate of completion to be
signed by the Approving Officer and delivered to the Trustee
immediately upon completion of the Project. If, upon the
completion of the Project, there shall be any surplus funds
remaining in the Construction Fund not required to provide
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
the Bonds, in inverse numerical order, in the manner set
forth in the FORM OF BOND in Section 5 for the prepayment or
redemption of the Bonds with surplus Construction Fund
38
• •
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.
(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 speci-
fied in the Trust Indenture, or if the Bonds are optionally
or mandatorily 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,
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 forego-
ing provisions of this Section, in the event any such Bond
shall have matured, and no default has occurred which is
39
•
then continuing in the payment of the principal of, redemp-
tion premium, if any, agreed liquidated damages, if any,
interest,penalties, reasonable costs and expenses, if any,
required to be reimbursed in connection with a Determination
of Taxability, 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 substi-
tute 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 contractual 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
substituted bonds is hereby authorized, notwithstanding any
other provisions of this Initial Bond Resolution, except to
the extent otherwise required by law.
Section 18. NO ARBITRAGE. The Issuer and the User
have covenanted to and with the purchasers of the Bonds that
they will make no use of the direct, 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
40
• •
Governmental Unit, and (iii) that the Project is in further-
ance of the public purposes as set forth in the Act.
Section 20. SALE OF THE BONDS. At the specific
request of the User, the Bonds are hereby authorized to be
sold, and shall be delivered to MBank Corpus Christi N.A.,
Corpus Christi, Texas, 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, the
interest, penalties, reasonable costs and expenses, if any,
required to be reimbursed in connection with a Determination
of Taxability, 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 deliv-
ered, 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:
41
•
Year
Beginning Ending
Principal Prin41p91
Annual Monthly
Reduction Y4ymente
1966 6
1967 100,000 100.000 -0- -0-
1988 100.000 98,540 1460 120
1989 98,540 96,910 1630 135
1990 96,910 95,100 1810 ISO
1991 95,100 93,070 2030 1.70
1992 93,070 90,810 2260 190
1993 90,810 88.290 2520 210
/994 88,290 85,480 2810 239
1995 85,480 82,340 3140 260
1996 82,340 78.840 3500 290
1997 78,840 74,930 3910 325
1998 74,930 70,570 4360 365
1999 70.570 65,710 4860 405
2000 65,710 60,290 5420 450
2001 60,290 54,240 6050 505
2002 54.240 47,480 6760 565
2003 47.480 39,950 7530 630
2004 39.950 31,540 8410 700
2005 31.540 22,160 9380 780
2006 22,160 11,690 10,470 870
2007 11.690 -0- 11,690 975
100.000
Beginning Annual
Principal Principal Reduction
Monthly
Payment
1986 &
1987 500,000 500,000 -0- -0-
1988 500,000 492,710 7290 610
1989 492,710 484,570 8140 675
1990 484,570 475,500 9070 760
1991 475,500 465,360 10140 845
1992 465,360 454,070 11290 940
1993 454,070 441,460 12610 1050
1994 441,460 427,400 14060 1170
1995 427,400 411,700 15700 1310
1996 41I,700 394,190 17510 1460
1997 394,190 374,860 19930 1625
1998 374,660 352,860 21800 1815
1999 352.860 328,540 24320 2025
2000 328,540 301,440 27100 2260
2001 301,440 271,170 30270 2525
2002 271.170 237,390 33780 2315
2003 237,390 199,720 37670 3140
2004 199,720 157,670 42050 3505
2005 157,670 110,760 46910 3910
2006 110,760 58,420 52340 4360
2007 58,420 -0- 58420 4860
500,000
• •
TRUST INDENTURE
BETWEEN
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
AND
MBANK CORPUS CHRISTI, N.A., TRUSTEE
(BROADWAY PLAZA ASSOCIATES, LTD. PROJECT)
*******************************
Pursuant to and under this Trust Indenture the Corpus
Christi Industrial Development Corporation has granted a
security interest in and assigned to MBank 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 Broadway Plaza Associates, Ltd." to secure its Revenue
Bonds, Series 1985 (Broadway Plaza Associates, Ltd.
Project).
DEBTOR: SECURED PARTY:
Corpus Christi Industrial MBank Corpus Christi, N.A.,
Development Corporation Trustee
302 South Shoreline 500 North Shoreline Blvd.
P.O. Box 9277 Corpus Christi, Texas 78401
Corpus Christi, Texas 78469
JWR: SECOND DRAFT:11/27/85
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 4
ARTICLE 4. ACCOUNTS AND RECORDS 5
ARTICLE 5.
(a) Separate Records to be Kept 5
(b) Annual Report 5
(c) Right to Inspect 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 9
(f) Remedies Non -Exclusive 10
(g) Waiver of Defaults 10
(h) Discretion of Trustee 10
(i) Application of Moneys 10
(j) Judicial Proceedings 12
(k) Enforcement of Remedies
Without Possession of Bonds 12
(1) Direction by Majority in
Principal Amount of Bondholders 12
(m) Notice by Trustee 12
(n) Concurrence of Bondholders 13
(o) Default of Payments 13
(p) Notice to User and Guarantor
of Past Due Payments 13
(q) Letter of Credit and Bankruptcy 13
• •
ARTICLE 5. ENFORCEMENT OF RIGHTS IN CASE
OF DEFAULT (CONTINUATION)
PAGE
13
(r) Letter of Credit and Determination
of Taxability 14
(s) Expiration of Letter of Credit 15
(t) Limitation of Liability 15
ARTICLE 6. CONCERNING THE TRUSTEE 16
(a) Not Accountable for Bond
Proceeds 16
(b) Reliance by Trustee 16
(c) Compensation of Trustee from
Debt Service Fund 17
(d) Limited Responsibilities 17
(e) Advice 18
(f) Trustee May Own Bonds 18
(g) Fees 18
(h) Insurance 19
ARTICLE 7. SUCCESSOR TRUSTEE 19
(a) Resignation of Trustee 19
(b) Removal of Trustee 19
(c) Appointment of Successor
Trustee 19
(d) Transfer to Successor Trustee 20
(e) Merger or Consolidation of
Trustee 20
ARTICLE 8. RELEASE OF INDENTURE AND SATISFACTION
OF INDEBTEDNESS 20
ARTICLE 9. AMENDMENTS 21
ARTICLE 10.
MISCELLANEOUS PROVISIONS 21
(a) Acknowledgements and
Ownership of Bonds 21
(b) Trustee May Require Proof
of Ownership 22
(c) Consent of Bondholders 22
(d) Survival of Valid Bonds 22
(e) Unclaimed Funds 22
(f) Rights of Parties 23
(g) Severability 23
(h) Law 23
(i) Release of Letter of Credit 23
•
Page
ARTICLE 11. RECORDING 23
(a) Trustee to Record 23
(b) Non -Encumbrance 23
ARTICLE 12. NOTICE TO TEXAS ECONOMIC
DEVELOPMENT COMMISSION 24
ARTICLE 13. INDEMNIFICATION OF TRUSTEE 25
Execution by the Issuer 25
Execution by the Trustee 26
Exhibit A A-1
TRUST INDENTURE
THE STATE OF TEXAS
CORPUS CHRISTI INDUSTRIAL DEVELOPMENT CORPORATION
•
•
•
•
THIS TRUST INDENTURE, dated as of December 1, 1985,
executed by and between Corpus Christi Industrial
Development Corporation (the "Issuer"), a nonstock, nonpro-
fit 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 MBank
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 Broadway Plaza
Associates, Ltd.", dated as of December 1, 1985 (the
"Agreement") has been duly executed between the Issuer and
Broadway Plaza Associates, Ltd. (the "User"), with the User
being a limited partnership duly created and fully qualified
to transact business in the State of Texas; and
WHEREAS, an executed copy of the Agreement, has been
filed with the Trustee; and
WHEREAS, pursuant to the Agreement the Board of Direc-
tors of the Issuer has duly adopted a "RESOLUTION AUTHORIZ-
ING THE ISSUANCE OF CORPUS CHRISTI INDUSTRIAL DEVELOPMENT
CORPORATION REVENUE BONDS, SERIES 1985 AND THE EXECUTION OF
A TRUST INDENTURE (BROADWAY PLAZA ASSOCIATES, LTD. PRO-
JECT)", which, together with any amendment thereto, is
hereinafter called and designated the "Initial Bond Resolu-
tion"; and
WHEREAS, the Initial Bond Resolution authorized the
issuance of CORPUS CHRISTI INDUSTRIAL DEVELOPMENT
CORPORATION REVENUE BONDS, SERIES 1985 (BROADWAY PLAZA
ASSOCIATES, LTD. PROJECT), in the aggregate principal amount
of $5,570,000, which together with any replacement bonds and
any additional parity revenue bonds ("Additional Bonds")
authorized to be issued by the Initial Bond Resolution, are
hereinafter collectively called the "Bonds"; and
WHEREAS, a certified copy of the Initial Bond Resolu-
tion has been duly filed with the Trustee; and
•
WHEREAS, pursuant to the Initial Bond Resolution, a
certified copy of each resolution authorizing the issuance
of each series or issue of Additional Bonds shall be filed
with the Trustee prior to the delivery thereof; and
WHEREAS, as used in this Trust Indenture the word "Bond
Resolution" shall mean and include collectively the Initial
Bond Resolution (including the Trust Indenture prescribed
and authorized to be executed in the Initial Bond Resolu-
tion) and, when adopted and filed with the Trustee, each
resolution authorizing the issuance of Additional Bonds
together with any supplemental resolutions or amendments to
such resolutions or the Trust Indenture; and
WHEREAS, pursuant to the Agreement and the Bond Resolu-
tion and subject to the terms and provisions thereof, the
Bonds, the redemption premium, if any, the agreed liquidated
damages, if any, the interest, penalties, reasonable costs
and expenses, if any, required to be reimbursed to the
Bondholders or former Bondholders in connection with a
Determination of Taxability as provided in 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 "Installment Loan Payments" to be made or paid,
or caused to be made or paid, by the User (or its successors
or assigns under certain circumstances) to the Trustee; and
WHEREAS, the User and the Trustee have entered into a
Deed of Trust and Security Agreement --Financing Statement
dated as of December 1, 1985 (which together with all
amendments or supplements thereto is herein referred to as
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 and MBank Corpus Christi, N.A.,
Trustee, as secured party, have entered into a Security
Agreement, dated as of December 1, 1985, and other
agreements dated as of December 1, 1985 and MBank Corpus
Christi, N.A., Trustee, as secured party, and the User
and/or one or more of the partners of the User have entered
into a Collateral and Pledge Agreement, dated as of December
1, 1985 which agreements, together with all amendments or
supplements thereto, are herein collectively referred to as
the "Security Agreement") 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,
the Security Agreement, and the Bond Resolution are hereby
adopted, and the terms used herein shall have the same
2
meanings as each terms are given in said Agreement, Deed of
Trust, the Security Agreement, and Bond Resolution unless a
different meaning is given herein; and
WHEREAS, the Trustee has accepted the trusts created by
this Trust Indenture, and in evidence thereof has joined in
the execution hereof; and
WHEREAS, this Preamble constitutes an integral part of
this Trust Indenture.
NOW, THEREFORE, THIS TRUST INDENTURE WITNESSETH:
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,
agreed liquidated damages, if any, interest, .penalties,
reasonable costs and expenses, if any, required to be
reimbursed to each Bondholder or former Bondholder in
connection with a Determination of Taxability as provided in
the Bonds, all fees and expenses of the Issuer, Trustee,
Registrar, and Paying Agent for the Bonds, and all other
payments required to be made by the User 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, and
(ii) the Debt Service Fund, Special Rebate Fund and the
Construction Fund created by the Initial Bond Resolution,
upon, and subject to the terms, conditions, stipulations,
covenants, agreements, trusts, uses, and purposes herein-
after 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, and the owners of
the Bonds. It is further specifically agreed that (i) the
3
• •
Trustee will act as a Paying Agent for the Bonds at all
times while it is Trustee, (ii) the Trustee will act as
Registrar for the Bonds at all times while it is Trustee,
(iii) the Trustee will authenticate each of the Bonds by
executing the Trustee's Certificate of Authentication
appearing on each of the Bonds, as provided in the Bond
Resolution, and it will so authenticate the Bonds when
requested by the Issuer, prior to the delivery of the Bonds,
at such time and in such manner as directed by the Issuer,
and (iv) the Trustee will remain the 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,
respectively, 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. (a) On each date upon
which each Installment Loan Payment is required by each Bond
Resolution to be deposited into the Debt Service Fund, the
Trustee shall give telephonic notice to the User, (confirmed
in writing 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
such date. The written 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
timely 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 liabil-
ity for the 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 60 days after the anniver-
sary date of this Trust Indenture, the Trustee will furnish
4
• •
to the Issuer, the User and any owner of any outstanding
Bonds who may so request, a copy of a report by the Trustee
covering the year preceding such anniversary date, showing
the following information:
(1) a detailed statement concerning the receipt
and disposition of all Installment Loan Payments and
the disposition of the amounts in the Construction Fund
(until the Construction Fund shall have been fully
disposed of).
(2) an asset statement or balance sheet of the
Debt Service Fund and of the Construction Fund (until
the Construction Fund shall have been fully disposed
of).
(c) Right to Inspect. The Issuer, the User and the
owners of any Bonds shall have the right, at all reasonable
times and upon reasonable notice, to inspect all records,
accounts, and data of the Trustee relating to the Debt
Service Fund, 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 shall include a summary prepared by the User, of 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. Notwithstanding 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. The Trustee shall not be responsible for and shall
incur no liability with respect to, any calculations or
determinations made by the User with respect to the Special
Rebate Fund or the Tentative Rebate Amount.
Article 5. ENFORCEMENT OF RIGHTS IN CASE OF DEFAULT.
(a) Appointment of the Trustee and Rights of the Holder.
The Trustee is hereby irrevocably appointed the special
agent and representative of the owners of the Bonds and
vested with full power in their behalf to effect and enforce
the Agreement, this Trust Indenture, and the Bond Resolution
for their benefit as provided herein and in the Bond Resolu-
tion; but, subject to the mandatory provisions of Article
5(d), the owners of a majority in aggregate principal amount
5
• •
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 Resolu-
tion, 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 hereunder by the Trustee. Anything
contained in this Trust Indenture to the contrary notwith-
standing, each owner of any Bond shall have a right of
action to enforce the payment of all amounts due with
respect to any Bond owned by him when or after the same
shall have become due, at the place, from the sources, and
in the manner expressed in the Agreement, the Bond Resolu-
tion, or this Trust Indenture; provided that no right of
action shall exist subsequent to the time of waiver of an
Event of Default in the payment of any such amount so due
and such Event of Default having been remedied and made
good, as provided in Article 5(g).
(b) Control by Trustee. Except as otherwise provided
in this Article, including specifically subsections (a) and
(g) hereof, 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 appointment 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 51% 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 51% in aggregate principal amount of
the Bonds then outstanding and upon being furnished indemni-
ty satisfactory to the Trustee against expenses, charges,
and liability shall, forthwith take such appropriate action
by judicial proceedings or otherwise to enforce the cove-
nants of the User, and the Issuer as the Trustee may deem
expedient in the interest of the owners of the Bonds.
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(c) Events of Default. Any one or more of the follow-
ing events shall constitute and hereinafter shall be called
an "Event of Default":
(1) the failure by the Issuer to make due and
punctual payment of principal of, redemption premium,
if any, and interest on the Bonds, whether payment is
required at maturity or by call for redemption or
otherwise; 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 three days after
receipt of written notice of such failure from the
Trustee.
(2) the failure of the User 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 and
the continuation of such failure for three days after
receipt of written notice of such failure from the
Trustee.
(3) the dissolution or liquidation of the User,
or a disposition of all or substantially all of the
assets of User, or a sale, transfer or other
disposition of the Project by User, in any manner not
specifically authorized by the Agreement.
(4) the failure by the User promptly to lift or
suspend any execution, garnishment, or attachment of
such consequence as will materially impair its ability
to carry out its obligations under the Agreement or the
Bond Resolution, or failure of the User generally to
pay its debts as they become due.
(5) the filing by the User of a voluntary
petition in bankruptcy, or the commission by the User
of any act of bankruptcy or entry of an order for
relief of the User in a bankruptcy case of the User,
assignment by the User of a substantial portion of its
assets for the benefit of its creditors, or the entry
by the User into an agreement of composition with its
creditors, or the entry of an order or decree
applicable to the User 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.
(6) the User defaulting in the observance or
performance of any other of its covenants, conditions,
or obligations in the Bonds, the Agreement, the Bond
7
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•
Resolution, or this Trust Indenture, and the User not
remedying such default within 15 days after written
notice to do so has been received by the User from the
Trustee or the owners of the Bonds; and the Trustee may
serve such notice, in its discretion, or shall serve
such notice at the written request of the owners of not
less than 51% in aggregate principal amount of the
Bonds then outstanding.
(7) receipt by the Trustee of notice from MBank
Corpus Christi, N.A., of the occurrence of a default or
an event of default under the Deed of Trust or any
Security Agreement.
(8) receipt by the Trustee of notice from MBank
Corpus Christi, N.A., that the User has failed to make
any payment due on any indebtedness or other Security
(which term shall have the same meaning herein as the
term "Security" as defined in the Securities Act of
1933, as amended) held by MBank Corpus Christi, N.A.
while MBank Corpus Christi, N.A. is a Bondholder.
(9) receipt by the Trustee of notice from MBank
Corpus Christi, N.A., that the User has defaulted in
the observance or performance of its covenants or
obligations under the Bond Purchase Agreement, dated as
of December 1, 1985, between MBank Corpus Christi, N.A.
and the User.
(d) Declaration of Principal and Interest Due. (1)
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 51% in aggregate principal amount of the Bonds
then outstanding, and upon being indemnified to the satis-
faction of the Trustee, shall, by notice in writing deliv-
ered to the Issuer and the User, declare the principal of
all Bonds then outstanding and the interest accrued thereon
immediately due and payable, and such principal and inter-
est, together with any applicable agreed liquidated damages,
and any applicable redemption premium, and any other amounts
then due, shall thereupon become and be immediately due and
payable, anything in the Bonds, the Agreement, the Bond
Resolution, or this Trust Indenture to the contrary notwith-
standing.
(2) Upon the happening of an Event of Default speci-
fied in Article 5(c)(7), (8), or (9), the Trustee shall, by
notice in writing delivered to the Issuer and the User,
immediately declare the principal of all Bonds then out-
standing and the interest accrued thereon immediately due
and payable, and such principal and interest, together with
any applicable agreed liquidated damages, and any applicable
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redemption premium, and any other amounts then due, shall
thereupon become and be immediately due and payable, any-
thing in the Bonds, the Agreement, the Bond Resolution or
this Trust Indenture to the contrary notwithstanding.
(e) Enforcement by Trustee. Subject to the mandatory
provisions of Article 5(d), 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 51% in aggregate
principal amount of the Bonds then outstanding, and upon
being indemnified to the satisfaction of the Trustee, shall,
take such appropriate action by judicial proceedings or
otherwise to cure the Event of Default and/or to require the
User or the Issuer to carry out its or their covenants and
obligations under and with respect to the Bonds, the
Agreement, the Bond Resolution, or this Trust Indenture,
including without limitation, the use and filing of actions
for specific performance, and mandamus proceedings, in any
court of competent jurisdiction 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 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 con-
ferred upon or reserved to the Trustee is intended to be
exclusive of any other available remedy or remedies, but
each and every such remedy shall be cumulative and shall be
in addition to every other remedy given hereunder or under
the Agreement, the Bonds or the Bond Resolution, or now and
hereafter existing at law or in equity or by statute. No
delay or omission to exercise any right or power accruing
upon the happening of an Event of Default continuing as
aforesaid shall impair any such right or power or shall be
construed to be a waiver of any such Event of Default or
acquiescence therein, and every such right and power may be
exercised from time to time and so often as may be deemed
expedient.
(g) Waiver of Defaults. Subject to the mandatory
provisions of Article 5(d), the Trustee may, and 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. In
case of any such waiver, the Issuer, the User, the Trustee
and the owners of the Bonds shall be restored to their
former position and rights hereunder respectively, but such
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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. Except as hereinafter
provided, 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,
the Agreement, the Security Agreement, 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.
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 the Bonds
which have matured as provided thereby, and interest
thereon, to the extent legally permissible, at the rate
of 15% per annum from the date of maturity to date of
payment.
FOURTH: to the payment of principal of the Bonds
which have been called for redemption as permitted or
required by the Bond Resolution, the redemption
premium, if any, the agreed liquidated damages, if any,
on such Bonds, the interest, penalties, reasonable
costs and expenses, if any, incurred by the holders or
former holders of such Bonds in connection with a
Determination of Taxability as set forth in the Bonds,
and interest thereon, to the extent legally
permissible, at the rate of 15% per annum from the date
of redemption to date of payment.
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• •
FIFTH: 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.
SIXTH: 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 51% in aggregate principal amount
of the Bonds then outstanding, and upon being indemnified to
the satisfaction of the Trustee, shall, intervene on behalf
of the owners of the Bonds to assert the rights of such
owners.
(k) Enforcement of Remedies Without Possession of
Bonds. All rights of action or other rights under this
Trust Indenture or otherwise may be brought by the Trustee
in its own name as Trustee of an express trust and may be
enforced by the Trustee without the possession of any of the
Bonds or the production thereof on the trial or other
proceedings relative thereto.
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(1) Direction by 67% in Principal Amount of
Bondholders. Subject to the mandatory provisions of Article
5(d), 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 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) (2), (7), (8)
and (9), unless specifically notified in writing of such
default by the owners of at least 51% in aggregate principal
amount of the Bonds then outstanding.
(n) Concurrence of Bondholders. In determining
whether the owners of a requisite aggregate principal amount
of Bonds outstanding have concurred in any request, demand,
authorization, direction, notice, consent, or waiver under
this Trust Indenture or the Bond Resolution, Bonds owned by
or for the account of the User or any person controlled by,
controlling, or under common control of the User shall be
disregarded and deemed not to be outstanding for the purpose
of any such determination; provided however, that for the
purpose of determining whether the Trustee shall be
protected in relying upon any 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
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•
and collect Installment Loan Payments) in accordance with
the Agreement, the Bond Resolution and this Trust Indenture.
(p) Notice to User and Issuer of Past Due Payments.
Pursuant to the Agreement, Installment Loan Payments are to
be paid by the User directly to the Trustee. In the event
that any such payments are not timely made, the Trustee
shall immediately notify the User and the Issuer by mail at
the addresses 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 to receive, such notice shall not relieve
the User of any covenant or obligation under the Agreement,
the Bond Resolution or this Trust Indenture and shall not
constitute a waiver of any Event of Default under this Trust
Indenture.
(q) Limitation of Liability. Notwithstanding anything
to the contrary contained in this Trust Indenture, the Bond
Resolution, the Agreement, the Security Agreement or the
Deed of Trust, except as set forth below the User shall in
no event be liable for a monetary judgment (except with
respect to an action brought by the Issuer or the Trustee
against the User based on fraud or intentional
misrepresentation, or any action based on conversion,
misappropriation, or the disposition of any insurance
proceeds or condemnation award in breach of provisions of
the Deed of Trust, or an action brought by Indemnified
Parties or the Trustee pursuant to Section 3.06 or 5.05 of
the Agreement or Article 13 hereof). Notwithstanding the
foregoing sentence, in the event of default under any of the
aforementioned documents the Issuer, the Trustee, the
trustee under the Deed of Trust or the Security Agreement,
and/or the Bondholders may look to the funds created by the
Bond Resolution and to the security provided by the Deed of
Trust, the Security Agreement or any other security
agreement executed by the User in connection with the Loan
and to the guarantee of any obligation contained in any
guarantee agreement or the Guarantee Agreement between the
Trustee and the guarantors named therein dated as of
December 1, 1985, and any amendments or supplements thereto)
to enforce the payment of any indebtedness arising under the
aforementioned documents. Nothing contained in this
subparagraph shall be deemed to constitute a release or
impairment of the indebtedness or obligations under this
Trust Indenture, the Bond Resolution, the Agreement, or of
the lien of the Deed of Trust or Security Agreement upon the
property encumbered thereby, or of the obligations of any
guarantor under any guarantee agreement or agreements
executed in connection with the Loan or given in favor of
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the Bondholders, the Issuer, the Trustee, and/or the trustee
named under the Deed of Trust or the Security Agreement
(including without limitation the aforesaid Guarantee
Agreement and any amendments or supplements thereto), and
nothing contained in this subparagraph shall preclude the
Issuer, the Trustee, the trustee under the Deed of Trust or
the Security Agreement and/or any Bondholder from
foreclosing the Deed of Trust, or the Security Agreement
lien in case of any default under this Trust Indenture, the
Bond Resolution, the Agreement, the Deed of Trust or the
Security Agreement or from enforcing any of the other rights
of the Issuer, the Trustee, the trustee under the Deed of
Trust or Security Agreement, or the Bondholders, except as
expressly limited by this subparagraph.
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 gross 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 Debt Service Fund and the
Construction Fund as expressly required by the Bond Resolu-
tion, 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
not requisition any amounts in excess of $ 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 deposited with the Trustee, be registered in
the name of such owner on the Bond Registration Books kept
by the Trustee, or submitted to it for inspection. Any
14
•
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 fees of its counsel, engineers, accountants and
other experts, 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 here-
under (except liabilities incurred as a result of the gross
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
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;
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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, the User, 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/or 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
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, the 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 shall pay to
the Trustee interest on such charges at the 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.
16
(h) Insurance. The Trustee shall have no obligation
or duty as respects any insurance to be maintained by the
User on the Project.
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, and to any owners of Bonds
as shown on the Bond Registration Books and any other list
of owners of Bonds kept by the Trustee, and such resignation
shall take effect upon the appointment of a temporary
Trustee or 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 67% 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
Trustee shall be a trust company or bank in good standing
located in Corpus Christi, Texas, and having a capital and
surplus of not less 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
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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, and the User, an
instrument in writing accepting such appointment hereunder,
and thereupon such successor Trustee, without any further
act, deed, or conveyance, shall become fully vested with all
the estates, rights, powers, trusts, duties, and obligations
hereunder of its predecessor; but such predecessor shall
nevertheless, on the written request of the Issuer, execute
and deliver an instrument transferring to such successor
Trustee all of the estates, rights, powers, and trusts of
such predecessor hereunder; and every predecessor Trustee
shall deliver all securities and money held by it to its
successor; provided, however, that before any such delivery
is required or made, all reasonable, customary, and legally
accrued fees, advances, and expenses of such predecessor
Trustee shall be paid in full. Should any deed, assignment,
or instrument in writing from the Issuer be required by any
successor Trustee for more fully and certainly vesting in
such Trustee the estates, rights, powers, and duties hereby
vested or intended to be vested in the predecessor Trustee,
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
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 princi-
pal, redemption premium, if any, and the interest so due and
payable upon all of the Bonds, and the agreed liquidated
damages, if any, and interest, penalties, reasonable costs
and expenses, if any, required to be reimbursed in
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•
connection with a Determination of Taxability as provided in
the Bonds, with respect to the Bonds then due, shall be
paid, or sufficient money shall be held by the Trustee for
such purpose, and provision shall also be made for paying
all other sums payable hereunder and/or under the Agreement
and/or the Bond Resolution by the User, then and in that
case all right, title, and interest of the Trustee in these
presents and the estate and rights hereby granted shall
thereupon cease, determine, and become void, and the Trustee
in such case shall release this Trust Indenture and shall
execute such documents to evidence such release as may be
reasonably required by the Issuer and the User, and shall
turn over any surplus funds held by it to whomsoever may
then be entitled pursuant to the Bond Resolution, the
Agreement, or by law to receive the same; and thereupon this
Trust Indenture shall terminate and be of no effect;
provided, that until the Bonds are finally paid, the Trustee
shall continue to act as Paying Agent and Registrar 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; and provided, further, that the
provisions of Article 13 hereof shall survive the release of
this Trust Indenture.
Article 9. AMENDMENTS. This Trust Indenture may be
amended only as provided in Section 13 of the Bond Resolu-
tion; provided, however, that Additional Bonds may be issued
pursuant to the Bond Resolution as provided therein, and may
be secured by this Trust Indenture without the necessity of
amending or supplementing this Trust Indenture.
Article 10. MISCELLANEOUS PROVISIONS. (a) Acknowl-
edgments and Ownership of Bonds. Any request, direction,
consent, or other instrument required by this Trust Inden-
ture to be signed or executed by owners of Bonds may be in
any number of concurrent writings of similar tenor and may
be signed or executed by such owners of Bonds in person or
by an agent appointed in writing. Proof of the execution of
any instrument, or of the writing appointing such agent, and
of the ownership of the Bonds, if made in the following
manner, shall be sufficient for any purpose of this Trust
Indenture and shall be conclusive in favor of the Trustee
with regard to any action taken by it under such instrument:
(i) the fact, date, and due authorization of the
execution by any person of any such instrument may be
proved by the certificate of any officer in any juris-
diction, who, by the laws thereof, has power to take
acknowledgments within such jurisdiction to the effect
that the person signing such instrument acknowledged
before him the execution thereof, or by an affidavit of
a witness to such execution.
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(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 written notice to the contrary is served upon the
Trustee.
(b) Trustee May Require Proof of Ownership. Nothing
contained in this Article shall be construed as limiting the
Trustee to the proof hereinabove specified, it being intend-
ed that the Trustee may accept any other evidence of the
matters herein stated which it may deem sufficient.
(c) Consent of Bondholders. Unless otherwise provided
in the Bond Resolution, any request or consent of any owner
of Bonds shall bind every future owner of the same Bond in
respect of anything done by the Trustee in pursuance of such
request or consent. In the event of the dissolution of the
Issuer, all of the covenants, stipulations, promises, and
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 owners 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 owners of such Bond, who shall
thereafter be restricted exclusively to such funds for the
satisfaction of any claim of whatever nature on their part
relating to such Bond.
(e) Unclaimed Funds. Any money deposited with the
Trustee in trust for the payment of the principal of,
redemption premium, if any, the agreed liquidated damages,
if any, the interest, penalties, reasonable costs and
expenses, if any, required to be reimbursed in connection
with a Determination of Taxability as provided in the Bonds,
or the interest on any Bond and remaining unclaimed for six
years after such principal of, redemption premium, if any,
agreed liquidated damages, if any, interest, penalties,
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reasonable costs and expenses, if any, required to be
reimbursed in connection with a Determination of Taxability,
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 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 express-
ed or implied is intended or shall be construed to confer
upon any person, firm, or corporation other than the User,
the Issuer, the Trustee and the owners of Bonds, any 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 the Uniform Commercial Code records of the
Secretary of State of Texas to establish initially the lien
of this Trust Indenture. The Trustee shall (1) cause each
amendment and supplement to the Agreement or this Trust
Indenture, and any memorandum, financing statement, or
continuation statement with respect to such instruments 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
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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 Resolu-
tion, 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. The Trustee may obtain an
opinion of counsel with respect to any actions or documents
that may be required by this Article 11. Any act performed
or documents obtained or prepared by the Trustee in reliance
upon such opinion of counsel shall be deemed satisfactory
performance by the Trustee of its obligations under this
Article 11 with respect to the matters covered by such an
opinion.
(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 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.
Article 13. INDEMNIFICATION OF TRUSTEE. The Trustee
shall be indemnified by the User for, and shall be held
harmless by the User against, any loss, liability or expense
incurred by the Trustee without gross negligence or willful
misconduct on the part of the Trustee, arising out of or in
connection with the acceptance or administration of this
trust or the performance of its duties and obligations
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hereunder, including without limitation the costs and
expenses of defending itself against any claim of liability.
IN WITNESS WHEREOF, the Issuer acting through its Board
of Directors, has caused this Trust Indenture to be executed
in multiple counterparts, each of which shall be considered
an original for all purposes, in its name, and for and on
its behalf, by the President of such Board and attested by
the Secretary of such Board, and its corporate seal to be
hereto affixed; and the Trustee, to evidence its acceptance
of the trusts hereby created and vested in it, has caused
this Trust Indenture to be executed in multiple counter-
parts, each of which shall be considered an original for all
purposes, in its behalf by one of its duly authorized
officers, attested by another of its duly authorized
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)
MBANK CORPUS CHRISTI, N.A., TRUSTEE
By
ATTEST:
(SEAL)
23
MBANK CORPUS CHRISTI N.A.
SCHEDULE OF FEES
TRUSTEE UNDER CORPORATE BOND ISSUE
Acceptance Charge
$1,000 on the first
$500 per $1 million
$350 per $1 million
$300 per $1 million
$200 per $1 million
$1 million
on the next $4 million
on the next $10 million
on the next $15 million
on the remainder
Our minimum acceptance charge is $2,500
Annual Administration Charge
$300 per $1 million on the first $5 million
$200 per $1 million on the next $5 million
$100 per $1 million on the remainder
•
The minimum charge is $1,500
Bearer Bonds and Interest Coupons Charge
$2.00 per bond paid and 15 cents per coupon paid
Registered Bond and Interest Check Charge
$6.00 per bond on transfer and registration
$1.50 per check
Custody of Collateral
The annual charge for holding stock as collateral is $50.00 per $10 million
The annual charge for holding bonds or debentures is $100.00 per $10 million
One TERM charge for holding mortgages as collateral is $2.00 per mortgage
file
Cancellation or Closing Charge
The compensation of the trustee is not less than 1/20 of 1% of the
authorized issue (exclusive of bonds previously retired) with a minimum
charge of $100.00
Reimbursement Expense
The trustee or agent is entitled to reimbursement for amounts spent for
postage, insurance for shipment of securities, registered mail fee and
federal surcharges, stationery and envelopes, special checks binders,
transfer reports, necessary travel expenses and other miscellaneous
out-of-pocket expenses.
Extraordinary Service or Services
For extraordinary services not specifically mentioned above, the
charges will be based on an appraisal of the services performed.
Corpus Christi, Texas
(day of A , 198
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, Respectfully,
Council Members
1
MAYOR PRO TEM
THE CITY OF CORPUS CHRISTI, TEXAS
The above ordinance was passed by the following vote:
Luther Jones
Dr. Jack Best 127 --
David Berlanga, Sr. (,4
Leo Guerrero /, e,
Joe McComb
Frank Mendez lic.L„c�
Bill Pruet �y�.
Mary Pat Slavik
Linda Strong
19109