Loading...
HomeMy WebLinkAbout025216 RES - 02/25/2003RESOLUTION APPROVING A FINAL PROJECT AND FINANCING PLAN FOR THE "REINVESTMENT ZONE NUMBER TWO, CITY OF CORPUS CHRISTI, TEXAS"; APPROVING THE EXECUTION OF A TRI-PARTY AGREEMENT IN FURTHERANCE OF THE FINAL PROJECT AND FINANCING PLAN; AND OTHER MATTERS RELATING THERETO WHEREAS, on November 14, 2000, the City Council of the City adopted Ordinance No. 024270 (the "Creation Ordinance"), approving the creation of a tax increment reinvestment zone in the City known as "Reinvestment Zone Number Two, City of Corpus Christi, Texas" ("TIRZ Two"); and WHEREAS, in connection with the adoption of the Creation Ordinance and the establishment of TIRZ Two, the City prepared a preliminary reinvestment zone financing plan, and presented the preliminary reinvestment zone financing plan to the governing body of each taxing unit that levies taxes on real property in the proposed reinvestment zone; and WHEREAS, in compliance with the provisions of Chapter 311, Texas Tax Code (the "Act"), a project plan and reinvestment zone financing plan has been prepared and approved by the Board of Directors of TIRZ Two, which project plan and reinvestment zone financing plan so approved is attached hereto as Exhibit "A" (the "Plan"); and WHEREAS, by Resolution No. 025040, adopted on October 8, 2002, the City authorized the creation of the North Padre Island Development Corporation (the "Corporation") to aid, assist and act on behalf of the City in the performance of the City's governmental and proprietary functions with respect to the common good and general welfare of the City, as described in the Creation Ordinance; and WHEREAS, on February 25, 2003, the Corporation adopted a resolution authorizing the issuance and delivery of up to $3,000,000 in Tax Increment Contract Revenue Bonds, Series 2003 (the "Bonds"), for the purpose of funding a portion of the "project costs" as are set forth in the Plan; and WHEREAS, the Corporation and the Board of Directors of TIRZ Two have approved the execution and delivery of that certain Agreement by and among the City, TIRZ Two, and the Corporation dated as of February 1, 2003 (the "Tri-Party Agreement"), pursuant to which the Corporation was delegated certain power and authority in connection with the implementation of the Plan on behalf of TIRZ Two, including, but not limited to, the power to issue, sell or deliver its bonds, notes or other obligations in accordance with the terms of the Tri-Party Agreement; and WHEREAS, the City Council finds it necessary and advisable to adopt this Resolution NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1: That the City Council hereby approves the Plan for TIRZ Two. SECTION 2: That the City Council does hereby find and declare that the Plan submitted to the City Council for approval is feasible for the development of TIRZ Two and conforms to the master plan of the City. SECTION 3: That the City hereby approves the execution of the Tri-Party Agreement, in substantially the form attached hereto. The Mayor and the City Secretary are hereby authorized to execute, attest, seal and deliver the Tri-Party Agreement on behalf of the City. ATTEST: Armando Chapa {.) City Secretary THE CITY OF CORPUS CHRISTI Mayor APPROVED: 25th day of February, 2003. Acting City Attorney Corpus Christi, Texas ,~'5-) of t ( ?)v~ (~ ~< ~ ,2003 The above resolution was passed by the follofying vote: Samuel L. Neal, Jr. ~[(,[,( / Brent Chesney ~ ~ Javier D. Colmenero (~(/~ Rex A. Ki~ison John Longoria Jesse Noyola Mark Scott AGREEMENT by and among the CITY OF CORPUS CHRISTI, TEXAS and REINVESTMENT ZONE NUMBER TWO, CITY OF CORPUS CHRISTI, TEXAS and the NORTH PADRE ISLAND DEVELOPMENT CORPORATION dated as of February 1, 2003 TABLE OF CONTENTS Page DEFINITIONS .......................................................... 3 SCOPE OF SERVICES BY CORPORATION ................................. 4 A. Management and Administrative Services and Consullantn .................... 5 B. Services With Respect to the Pro_iect Plan and the Financin~ Plan Annexations to the Reinvestment Zone. and Amendments to the Project Plan and the Financing Plan ............................................... 5 C. Consh'uction of Improvement.s ......................................... 5 III. CORPORATION OBLIGATIONS .......................................... 5 A. B. C. D. E. F. G. H. General Statement .................................................. 5 Power to Incur Authority Obligations .................................... 5 Bonds ........................................................... 6 Accounting ........................................................ 7 Use of Tax Increments ............................................... 7 Pledee of Tax Increments ............................................. 7 Depository ........................................................ 7 Bond Consultants ................................................... 8 IV. DUTIES AND RESPONSIBILITIES OF THE CITY AND THE REINVESTMENT ZONE . 8 A. B. C. D. E. F. Dutie~ of City ...................................................... 8 Tax Increment Fund Limitation of Source of Payment ........................................ 8 Allocated Funds: Limitation of Duties .................................... 8 Collection and Payment of Tax Increments by the City and the Reinvestment Zone ... 8 Obligations of City and the Reinvestment Zone to be AbsohJte ................. 9 PERSONAL LIABILITY OF PUBLIC OFFICIALS ............................. 9 LAW TO BE OBSERVED ................................................. 9 iNFORMATION ....................................................... 10 COORDINATION WITH CITY OFFICIALS ................................. 10 ADDRESS AND NOTICE ................................................ 10 APPLICABLE LAWS ................................................... 11 XI. CAPTIONS ........................................................... 11 XII. SUCCESSORS AND ASSIGNS ........................................... 11 TERM AND TERMINATION, DISSOLUTION OF CORPORATION ................ 11 A. In General ....................................................... 11 B. Termination for Cause .............................................. 11 C. Dissolution of Co _rpomtion ........................................... 11 X1V. AMENDMENT OR MODIFICATIONS ..................................... 12 XV. COUNTERPARTS ...................................................... 12 EXECUTION PAGE .......................................................... 13 AGREEMENT BY AND BETWEEN THE CITY OF CORPUS CHRISTI, TEXAS, REINVESTMENT ZONE NUMBER TWO, CITY OF CORPUS CHRISTI, TEXAS, AND THE NORTH PADRE ISLAND DEVELOPMENT CORPORATION STATE OF TEXAS § COUNTY OF NUECES § THIS AGREEMENT is made by and among the City of Corpus Christi, Texas, a municipal corporation and a home-nde city in the State of Texas (the "City"); Reinveslment Zone Number Two, City of Corpus Christi, Texas, a reinvestment zone created by the City pursuant to Chapter 311, Texas Tax Code (the "Reinvestment Zone"); and the North Padre Island Development Corporation, a not-for-profit local government corporation organized and existing under the laws of the State of Texas (the "Corporation"). W-I~T-N-E-S-S-E-T-H: WHEREAS, by ordinance adopted November 14, 2000 (the "Ordinance"), the City created the Reinvestment Zone pursuant to Chapter 311, Texas Tax Code (the "Act"), pursuant to a preliminary project plan for the Reinvestment Zone and a prelimina~ financing plan for the Reinvestment Zone; and WHEREAS, the Act requires the City to prepare a Project Plan (as hereinafter defined) and a Financing Plan (as hereina~er defined) for the Reinvestment Zone; and WHEREAS, the Ordinance created the Board of Directors for the Reinvestment Zone (the "Zone Board") and directed the Zone Board to: Make recommendations to the City Council concerning the administration of the Reinveslment Zone; and Prepare or cause to be prepared a Project Plan and a Financing Plan for the Reinvestment Zone and mbmit the same to the City Council for its approval; and -1- WHEREAS, by resolution adopted on October 8, 2002 (the "Creation Resolution"), the City authorized the creation of the Corporation to aid, assist and act on behalf of the City in connection with the preparation and implementation of the Plans (as hereinafter defined) and in the performance of the City's governmental and proprietaw functions with respect to the common good and general welfare of the City and the residents and property owners of the City, including specifically with respect to the residents and property owners within the Reinvestment Zone; and WHEREAS, the Creation Resolution also provided for the creation of a Board of Directors of the Corporation (the "Corporation Board"); and WHEREAS, among other things, the Corporation Board and the Corporation are to aid, assist and act on behalf of the City and the Zone Board; In the preparation and implementation of a Project Plan and a Financing Plan for the Reinvestment Zone and amendments thereto; and In the financing of the improvements described in the Project Plan (the "Improvements") pursuant to the Financing Plan; and WHEREAS, the City created the Reinvestment Zone pursuant to the Act with a duration from the date the Ordinance was adopted until the earher of (i) December 31, 2022 or (ii) the date on which the Plans have been fully implemented and all Project Costs, tax increment bonds, interest on such tax increment bonds and all other obhgations, contractual or otherwise payable from Tax Increment have been paid in full; and WHEREAS, the City and the Zone Board have determined that it will be advisable to have the Corporation assist the Zone Board in the preparation of the Project Plan and the Financing Plan and provide other services as further described in this Agreement; and WHEREAS, it is the intention of the pardes to this Agreement that, subject to the limitations prescribed in the Act, this Ag~ernent and the limitations of its Articles of Incorporation, the Corporation shall have the authority to issue, sell or deliver its bonds, notes, or other obligations in such amounts as may be necessary to provide for the construction of the Improvements and the funding of any necessary reserve fund or capitalized interest accounts and the payment of the costs of issuance of such bonds, notes, or other obligations, and perform other activities provided in this Agreement; and WHEREAS, the City and the Reinvestment Zone agree to pay for the Corporation's activities performed pursuant to this Agreement from Tax Increments as provided in this Agreement, and Chapter 311 of the Act and Chapter 431, Texas Transportation Code, authorize the City and the Reinveslment Zone to enter into a contract with the Corporation for the purposes of providing management and administration for the Reinvestment Zone, providing the services and improvements, and otherwige performing the functions set forth in this Agreement; and -2- WHEREAS, the City and the Reinvestment Zone desire to contract with the Corporation to provide the assistance described in this Agreement during the term of the Reinvestment Zone; and WHEREAS, the Corporation was created in part to aid and assist the City and the Reinvestment Zone in the manner set forth above, and the Corporation is willing to enter into a contract with the City and the Reinvestment Zone setting forth the duties and responsibilities of the Corporation, the City and the Reinvestment Zone; NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and agreements herein contained, it is agreed as follows: DEFINITIONS "Act" shall mean Chapter 311, Texas Tax Code. "Agreement" shall mean this Agreement and all attachments between the City, the Reinvestment Zone and the Corporation. "Appraisal Dish-ict" shall mean the Nueces County Appraisal District. "Bond Documents" shall mean the resolution of the Corporation authorizing the issuance of a series of Bonds and any trust indenture or supplement thereto executed by the Corporation in connection with the issuance of a series of Bonds. ''Bond Proceeds" shall mean the net proceeds from the sale of the Bonds. "Bonds" shall mean the bonds of the Corporation. "Captured Appraised Value" shall mean the total appraised value of property in the Reinvestment Zone as of January 1 of any year less the Tax Increment Base of the Reinvestment Zone, all as defined in the Act. "City" shall mean the City of Corpus Christi, Texas. "City Council" shall mean the City Council of the City. '~2o~oration" shall mean the North Padre Island Development Corporation. "Corporation Board" shall mean the Board of Directors of the Corporation. -3- "Co~omtion Obligations" shall mean the bonds, notes or other contractual obligations which the Corporation may incur from time to time pursuant to Article Ill hereo£ "Corps" shall mean the United States Army Corps of Engineers, or any successor thereto. 'Count/' shall mean Nueces County, Texas. 'District" shall mean Del Mar College. '~inancing Plan" shall mean the reinvestment zone financing plan for the Reinvestment Zone as amended from time to time pursuant to the Act, as adopted by the Zone Board and approved by the City Council. "Generally Acc~ted Accountine Principles" shall mean such accepted accotmting practice as, in the opinion of the accountant, conforms at the time to a body of generally accepted accounting principles as applied to governmental un/ts. 'Hospital District" shall mean the Nueces County Hospital District. "lm_vrovements" shall mean those improvements identified in the Project Plan. "Plans" shall mean, collectively, the Project Plan and Financing Plan. "Pledged Revenue Fund" shall mean the fund established by the Corpomfion in the Bond Documents into which payments from the City's Tax Increment Fund are deposited. '~?roj ect Costs" shall have the meaning set forth in Section 311.002( 1 ) and the other provisions of the Act. ''Proiect Plan" shall mean the project plan for the Rehivestment Zone as it may be amended from time to time pursuant to the terms of the Act, as adopted by the Zone Board and approved by the City Council. "Reinve~!llaent Zone" shall mean the Reinvestment Zone Number Two, City of Corpus Christi, Texas, which was created by the Ordinance. "rax Increment" shall mean the amount of property taxes levied each year by each Taxing Unit participating in the Reinvestment Zone (to the extent of their participation) on the Captured Appraised Value. '~" shall mean the total appraised value of all real property taxable by the City and located in the Reinvestment Zone as of the year in which the Reinvestment Zone was designated as a reinvestment zone, plus the total appraisal of all real property taxable by the City and the other Taxing Units -4- participating in the Reinvestment Zone and annexed to the Reinvestment Zone determined as of the date on which the area was annexed to the Reinvestment Zone. 'Tax Increment Fund" shall mean the Tax Increment Fund created by the City for the Reinvestment Zone including any subaccount therein into which all Tax Increments shall be deposited by the City. "Taxing Unit" shah mean County, the District, the Hospital District, and any other taxing trait (as defined in the Act) which participates in the Reinvestment Zone. 'Zone Board" shall mean the Board of Directors of the Reinvestment Zone. SCOPE OF SERVICES BY CORPORATION To the extent of available funds, the services which the Corporation will furnish consist of, among other things, the following: A. Management and Administrative Services and Consultants. The Corporation will provide management and administrative services for the Reinvestment Zone as requested by the Zone Board that are necessary or convenient for the implementation of the Plans. B. Services With Respect to the Project Plan and the Financing Plan. Annexations to the Reinvestment Zone. and Amendments to the Project Plan and the Financ[n~t Plan 1. The Zone Board is required to prepare and submit to the City for approval a Project Plan and a Financing Plan. Upon the request of the City, the Corporation will assist the Zone Board in the preparation of the Project Plan and the Financing Plan. The Project Plan and the Financing Plan will be prepared in accordance with the requirements of the Act and the directives of the Zone Board. The Project Plan and the Financing Plan will include at a minimum those matters required by Section 311.01 l(b) and (c) of the Act. The Project Plan and the Financing Plan will be in substantially the form and substance of the preliminary project plan and preliminary reinvestment zone financing plan set forth in Exhibit C to the Ordinance; and 2. As requested from time to time by the Zone Board, the Corporation will assist in the preparation of amendments to the Project Plan and the Financing Plan. Any such amendments to the Project Plan and the Financing Plan will be prepared in accordance with the requirements of the Act, and shall not be effective until approved by the City. C. Constmction of Improvements. The Corporation and the City shall cooperate and -5- coordinate their activities with the Corps with respect to the commencement, financing and construction of the Improvements so that the commencement, financing and construction of the Improvements shall occur at such times as are necessary or desirable to meet the construction time requirements of the Corps, consistent with the Plans. To that end, the Corporation may directly transfer to the Corps, or to the City for transfer to the Corps, such funds derived from Bond Proceeds to provide funding for the City's share of the costs of the Improvements to be constructed by the Corps, as may be further described in the Bond Documents. IH. CORPORATION OBLIGATIONS A. General Statement. The parties have agreed that the Corporation has the authority to issue Bonds or to enter into other Corporation Obligations with the Corps that are to be repaid from moneys to be paid by the City and the Reinvestment Zone to the Corporation fi'om Tax Increments pursuant to this Agreement. B. Power to Incur Co .rpomtion Obligations. Subject to the pmvisions of this Article, the Corporation shall have the power from time to time to issue and incur Corporation Obligations upon such terms and conditions as the Corporation and the City shall detenrfine to be necessary or desirable to implement the Project Plan and the Financing Plan. The Corporation Obligations may be in the form of a bond, note or in the form of a contractual obligation with the Corps or a third party who agrees to construct Improvements in the Project Plan or who provides services consistent with the Project Plan in exchange for the obligation of the Corporation to repay such costs from future payments made by the City and the Reinvestment Zone to the Corporation pursuant to this Agreement. C. Bonds. 1. To implement the Project Plan and the Financing Plan, the Corpomtionmay issue its Bonds in an amount necessary to finance the construction of the Improvements and pay Project Costs (Including amounts necessary to fund reserve funds and capitalized interest accounts for the Bonds and to pay costs of issuance of the Bonds) which will be repaid by the Corporation from payments made by the City and the Reinvestment Zone pursuant to this Agreement. The issuance of Bonds by the Corporation shall be subject to the approval of the City by a resolution duly adopted by the governing body of the City. The deposit and disbursement of Bond Proceeds shall be made in accordance with the Bond 2. The Corporation agrees to commence the process to ~ssue and sell the Bonds fi'om time to time, at such times and in such amounts as are required to produce Bond Proceeds in an amount sufficient to accomanodate the construction of the Improvements and to pay other Project Costs as necessary; provided, however, that the Corporation will use its best efforts to effect the issuance and delivery of the first series of Bonds to finance the initial phase of the Improvements described in the Project Plan on or before March 31, 2003; provided, further, that the failure of the Corpomfinn to issue such first -6- series of Bonds by such date shall not impose any financial liability on the City or any further obligation on the City to fund the costs of such Improvements. The Corporation shall issue and sell the Bonds, from time to time, and shall hold and disburse the bond proceeds as provided in this Agreement and the Bond Documents. ~lYhe Corporation shall use its best efforts to structure the Bonds so that the interest on the Bonds is excludable from mation under the Intemal Revenue Code of 1986, as amended, and regulations promulgated thereunder. 3. Bonds issued by the Corporation shall be secured, in whole or in part, by hinds deposited from time to time in the Pledged Revenue Fund. The Corporation agrees to provide to the City and the Zone Board copies of any proposed trust indenture or bond resolution in connection with any issuance of Bonds. In addition, to the fullest extent ponnitted by law, the Corporation agrees that it will not revoke or amend any orders, resolutions or other actions relating to the issuance, sale or delivexy of Bonds, except as provided in the resolutions, indentures or other instruments adopted or executed in connection with the sale of the Bonds. To the extent Bonds are issued as obligations, the interest on which is intended to be excludable from the income of the holdem thereof for federal income tax purposes, the Corporation agrees that they will take all actions necessary to ensure that the interest payable on the Bonds is and remains excludable from the income of the holders thereof under the Internal Revenue Code of 1986, as mended, and regulations promulgated thereunder. 4. All Bond Proceeds generated from the issuance of Bonds shall be deposited into such funds and accounts, and disbursed in such manner and at such times, as shall be provided for in the Bond Documents. All Bond Proceeds shall be held separate and apart from and shall not be cormningled with any other funds of the Corporation. 5. To the extent necessary or desirable, the Bond Documents may provided that a reserve fund be established and funded as mutually agreeable to the Corporation and the City to pay the principal and interest on the Bonds and/or to retire a portion of the Bonds. D. Accounting. Complete books and records shall be maintained showing deposits to and disbursements from the Tax Increment Fund ofthe City and the Pledged Revenue Fund or other funds of the Corporation, which books and records shall be deemed complete if kept in accordance with Generally Accepted Accounting Principles as applied to Texas municipalities and in accordance with the provisions of the Act. Such books and records shall be available for examination by the duly authorized officers or agents of the City during normal business hours upon request made not less than five (5) business days prior to the date of such examination, qPae City and the Corporation shall maintain such books and records throughout the term of this Agreement and for four (4) years thereafter, all subject to the reqmrements of the Act. E. Use of Tax Increments. The Corporation will use the moneys in the Pledged Revenue Fund as follows: first, to pay all principal of, interest on, premium (if any) and all paying agent/registrar charges on the Bonds of the Corporation, and to fund any reserves necessary or desirable in connection -7- with such Bonds, at the respective times and in the respective amounts as fixed and prescribed in the resolution or resolutions pursuant to which such Bonds are issued by the Corporation and to pay any Corporation Obligations which are on a parity with such Bonds; second, to make payments on other Corporation Obligations which are subordinate to the Bonds; third, administration, maintenance and operation expenses of the Reinvestment Zone; and fourth, to perform the services, pmvide improvements, or to pay any other Project Costs permitted by this Agreement and by the Act, including, the reimbursement to the City of disbursements made by the City as grants and loans pursuant to an economic development agreement adopted by the City under Chapter 380, Texas Local Government Code, in furtherance of the implementation of the Plans. F. Pledge of Tax Increments. The Corporation may pledge and assign all or a part of the Pledged Revenue Fund under this Agreement to: I . the owners and holders of Bonds of the Corporation; and 2. the owners and holders of Corporation Obligations. G. D _epository. The Corporation's Pledged Revenue Fund is the account into which all payments made by the City and the Reinvestment Zone pursuant to this Agreement shall be deposited. The Pledged Revenue Fund shall be maintained at all times at the same bank that serves as the City's depository. Any moneys received from investing and reinvesting the moneys paid by the City and the Reinvestment Zone to the Corporation shall remain in this fund until used by the Corporation for either of the pm-poses permitted by this Agreement in accordance with Section m.F., and may be commingled with other moneys of the Corporation; provided, however, that these funds shall be accounted for separately. Moneys in the Pledged Revenue Fund may be invested and reinvested by the Corporation only in investments which would be eligible for investment by the City pursuant to the provisions of the Public Funds Investment Act (Chapter 2256, Texas Government Code). Moneys on deposit in the Pledged Revenue Fund will be secured by the depository bank in the same manner as City funds are required to be secured at the City depository. H. Bond Consultants. McCall, Parkhurst & Honon L.L.P. shall act as bond counsel for Bonds issued by the Corporation. Coastal Securities shall act as f'mancial advisor to the Corporation. M.E. Allison & Co., Inc. shall act as placement agent or underwriter for the first series of Bonds issued by the Corporation. DUTIES AND RESPONSIBILITIES OF THE CITY AND THE REINVESTMENT ZONE A. Duties of Ci_ty. The City agrees to provide customary City services in the Reinvestment Zone subject to the provision of funds for these services in the City budget, including, without limitation, funds to maintain the Improvements throughout the term of the Bonds. -8- B. .Tax Increment Fund. The City will establish a separate fund including subaccounts if necessary in the City treasury into winch all Tax Increments shall be deposited (the "Tax Increment Fund"). During the term of this Agreement, the City, on behalf of itself and the Reinvestment Zone will pay the Corporation, on a monthly basis on the first business day of each month, all monies then available in the Tax Increment Fund. Upon receipt, the Corporation shall deposit such funds in the Pledged Revenue Fund and use them in accordance with Article m.E. C. Limitation of Source of Payment. The City and the Reinvestment Zone shall have no financial obligation to the Corporation other than as provided in this Agreement or in other agreements between the City, the Reinvestment Zone and the Corporation. The obligation of the City and the Reinves~nent Zone to the Corporation under this Agreement is lira/ted to the Tax Increment of the City and the other TaXing Units winch are received by the City. This Agreement shall create no obligation on the City or the Reinvestment Zone winch is payable from taxes or other moneys of the City other than the Tax Increments winch are collected by the City. The obligation of the City and the Reinvestment Zone to the Corporation shall be subject to the rights of any of the holders of bonds, notes or other obligations that have heretofore or are hereafter issued by the City, the County, the Dislrict, the Hospital District and any other Taxing Units that are payable from or secured by a general levy of ad valorem taxes throughout the tax/rig jurisdiction of the City, the County, the District and the other Taxing Units. For so long as any bonds, notes, or other obhgations of the Corporation secured by Tax Increments are outstanding and unpaid, the City covenants and agrees to annually assess, levy and collect its ad valorem taxes within the Zone. D. Allocated Funds: Limitation of Duties. The duty of the City and the Reinvestment Zone to pay money to the Corporation for any purpose under this Agreement is limited in its entirety by the provisions of this Article. The payments herein provided for shall be the entire and complete compensation of the Corporation for its services and expenses in connection herewith. E. Collection and Payment of Tax Increments by the City and the Reinvestment Zone In consideration of the services to be provided by the Corporation, the City and the Reinvestment Zone covenant and agree that they will, as authorized under the Act and other applicable laws, continuously collect the Tax Increments from the Taxing Units whose participation in the Reinvestment Zone is reflected in the Project Plan and the Financing Plan during the term of this Agreement in the inauner and to the maxiraxn extent permitted by applicable law. To the extent the City and the Reinvestment Zone may legally do so, the City and the Reinvestn~ent Zone also covenant and agree that they will not penmt a reduction in the Tax Increments paid by the Taxing Units except to the extent provided in the agreement with the Taxing Unit executed at the time the Taxing Unit agreed to participate in the Reinvestment Zone. In addition, the City covenants and agrees that it will not dissolve the Corporation and that any repeal of the right and power to collect the Tax Increments will not be effective until all Bonds and Corporation Obligations of the Corpom~on have been paid in full or until they are legally defeased. The City and the Reinveslment Zone further covenant and agree that they will make all payments as set forth in Article IV.B. above, by a direct deposit into the Pledged Revenue Fund, without counterclaim or offset, but minus any expenses incurred by the City in connection with the collection of the Tax Increments. -9- F. Obligations of City and the Reinvestment Zone to be Absolute,, The obligation of the City and the Reinvestment Zone to make the payments set forth in this Agreement from Tax Increments shall be absolute and unconditional, and until such t/me as this Agreement, all Bonds and Corporation Obligations incurred pursuant to this Agreement have been fully paid or provision for payment thereof shall have been made in accordance with their terms or the date of expiration of the Reinvestment Zone, whichever comes first, the City and the Reinvestment Zone will not suspend or discontinue any payments provided for in this Agreement and will not terminate this Agreement for any cause, including, without limiting the generality ofthe foregoing, the failure of the Corporation to perform and observe any agreement, whether express or implied, or any duty, liabRity, or obligation arising out of or connected with this Agreement. Nothing contained in this section shall be construed to release the Corporation from performance of any of the agreements on its part contained in this Agreement, and in the event the Corporation shall fail to perform any such agreement on its part, the City may institute such action against the Corporation as the City may deem necessary to compel performance so long as this action does not abrogate the obligations of the City and the Reinvestment Zone to make the payments set forth in this Agreement to pay the Bonds of the Corporation or to meet its Corporation Obligations. Vo PERSONAL LIABILITY OF PUBLIC OFFICIALS To the extent permitted by State law, no director of the Corporation, nor any employee or agent of the Corporation, no director of the ReinvesOnent Zone, nor any employee or agent of the Reinvestment Zone, and no employee of the City, nor any councilmember or agent of the City, shall be personally responsible for any liability arising under or growing out of this Agreement, or operations of the Corporation under the terms of this Agreement. VI. LAW TO BE OBSERVED The Corporation at all times shall observe and comply with all federal and state laws, local laws, ordinances, orders, and regulations of the federal, state, county, or city governments. VII. INFORMATION The Corporation shall, at such times and in such form as City may require, fumish periodic infonnalion conceming the status of the Corporation, the Reinvestment Zone, and the performance of its obligations under this Agreement, and such other statements, certificates and approvals relative to the Corporation and the Reinvestment Zone as may be requested in writing by the City. The City shall provide the Corporation with such information as may be necessary for the Corporation to satisfy its conthming disclosure obligation as set forth in the Bond Documents. -10- VHI. COORDINATION WITH CITY OFFICIALS The Corporation will coordinate its activities with the City Manager or the City Managers designee. Nothing in this Agreement is intended to confer upon the Corporation the tight to use, improve, or service any City property without the appmval of the City. IX. ADDRESS AND NOTICE Any and all notices and communications under this Agreement shall be mailed by first-class mail, or delivered, to the Corporation at the following address: Chair, Board of Directors North Padre Island Development Corporation 1201 Leopard Street Corpus Christi, Texas 78401 Any and all notices and communications under tiffs Agreement shall be mailed by fast-class mail, or delivered, to the City at the following address: City Manager City of Corpus Christi 1201 Leopard Street Corpus Christi, Texas 78401 Any and all notices and communications under this Agreement shall be mailed by first-class mail, or delivered, to the Reinvestment Zone at the following address: Chairman Reinvestment Zone Number Two, City of Corpus Christi, Texas 1201 Leopard Street Corpus Christi, Texas 78401 X. APPLICABLE LAWS THIS AGREEMENT IS MADE SUBJECT TO THE CONSTITUTION AND LAWS OF THE STATE OF TEXAS. -11- CAPTIONS Ihe captions at the beginning of the Articles of this Agreemem are guides and labels to assist in locating and reading such Articles and, therefore, will be given no effect in construing this Agreement and shall not be restrictive of the subject matter of any article, section, or part of this Agreement. XlI. SUCCESSORS AND ASSIGNS This Agreement shall bind and benefit the respective parties and their legal successors, and shall not be assignable, in whole or in part, by any party hereto without fast obtaining the written consent of the other party. Nothing herein shall be construed as creating any personal liability on the part of any officer or agency of the City, of the Reinvestment Zone or of the Corporation. XIII. TERM AND TERMINATION, DISSOLUTION OF CORPORATION A. In General This Agreement shall beco~ne effective, and its initial term shall begin, on the date of execution by all parties, and shall end upon terrnmation of the Reinvestment Zone. B. Termination for Cause. A party may terminate its performance under this Agreement only upon default by another paxty. Default by a paxty shall occur if the party fails to perform or observe any of the terms and conditions of this Agreement required to be perfonned or observed by that party. Should such a default occur, the party against whom the default has occurred shall have the right to terminate all or part of its duties under this Agremnent as of the thirtieth (30th) day following the receipt by the defaulting patty of a notice describing such default and intended termination, provided, that such termination may be stayed, at the sole option of the party against whom the default has occurred, pending cure of the default. No termination of this Agreement will affect the obligation of the City and the Reinvestment Zone to pay from Tax Increments an amount which will permit the Corporation to pay the Bonds or any Corporation Obhgations issued or incurred pursuant to this Agreement prior to termination. C. Dissolution of Corporation or Reinvestment Zone. The City agrees not to dissolve the Corporation or the Reinvestment Zone unless it makes satisfactory arrangements to provide for the pa3anents of the Corporation's bonds, notes, or other Corporation Obligations incurred prior to the Corporation's dissolution. AMENDMENT OR MODIFICATIONS Except as otherwise provided in this Agreement, this Agreement shall be subject to change, amendment, or modification only by the mutual written consent of the parties hereto. The foregoing notwithstanding, no amendment shall become effective until the parties have received an opinion of nationally-recognized bond counsel selected by the Corporation and approved by the City to the effect that -12- such amendmem will not materially adversely impair the fights of the owners of any outstanding bonds, notes or other obligations issued by the Corporation. XVw COUNTERPARTS This Agreement may be executed in any number of counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same inslmment. [EXECUTION PAGE FOLLOWS] -13- DATED as of February 1, 2003 NORTH PADRE ISLAND DEVELOPMENT CORPORATION THE CITY OF CORPUS CHRISTI Chairperson, Board of Directors Mayor ATTEST: ATTEST: Secretary, Board of Directors City Secretary REINVESTMENT ZONE NUMBER TWO, CITY OF CORPUS CHRISTI, TEXAS Chairperson, Board of Directors ATTEST: Secretary, Board of Directors -14-