HomeMy WebLinkAboutRES 82-486 ya- qp6
R E S O L U T I O N
WHEREAS, by resolution of the City Council (the
"Governing Body") of the City of Beaumont, Texas (the
"Unit") , the Governing Body authorized and approved the
creation of the Beaumont Industrial Development Corporation
(the "Corporation") as a nonstock, nonprofit industrial
development corporation under the provisions of the
Development Corporation Act of 1979 , Article 5190. 6 ,
Vernon' s Annotated Texas Civil Statutes , as amended (the
"Act") ; and
WHEREAS , the Corporation is authorized by the Act to
issue bonds on behalf of the Unit for the purpose of paying
all or a part of the costs of a "project" as defined in the
Act , and to lease or sell the project or to loan the
proceeds of the bonds to finance all or part of the costs of
a project; and
WHEREAS , the definition of "project" in the Act
includes the land, buildings , equipment , facilities and
improvements (one or more) found by the Board of Directors
of the Corporation to be required or suitable for the
promotion of commercial development and expansion and in
furtherance of the public purposes of the Act, or for use by
commercial enterprises , all as defined in the Rules of the
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Texas Industrial Commission (the "Commission") , irrespective
of whether in existence or required to be acquired or
constructed thereafter, if such project is located in
blighted or economically depressed areas; and
WHEREAS , the Governing Body of the Unit has , by
separate Resolution (the "EBA Resolution") adopted on May
11 , 1982 as No. 82-174 , after required notice and public
hearing, established an eligible blighted area as identified
in such Resolution in compliance with the requirements of
the Act and the Rules ; and
WHEREAS , on October 22 , 1982 , Cranston Development
Company d/b/a Cranston Development Corporation ("Cranston")
made written application for approval of a specific project
to be constructed within the eligible blighted area
consisting, among other things , of the site and facilities
described in the Project Description attached hereto as
Exhibit A (the "Project") ; and
WHEREAS, Cranston has assigned all of its right, title
and interest in and to the Project and the Agreement to
Issue Bonds (as hereinafter defined) to Market Place
Associates , Ltd. , a Texas limited partnership (the "User") ;
and
WHEREAS , Section 107 .2(b) (9) of the Rules provides that
after final acceptance of the resolution establishing the
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eligible blighted area, the Commission will approve projects
for commercial uses in and adjacent to the eligible blighted
area only after the applicant demonstrates to the satis-
faction of the Commission that , among other things , the Unit
has , after posting notice and holding a hearing, approved
the proposed project , has made the determinations and
findings required by the Rules , and has found that the
proposed project to be financed will contribute signifi-
cantly to the fulfillment of the redevelopment objectives of
the City for the blighted or economically depressed area and
is in furtherance of the public purposes of the Act; and
WHEREAS, on December 17 , 1982 , the Unit posted
notice of a public hearing with respect to the proposed
Project at the City Hall , and since that time has given
notice thereof as required by the Open Meetings Law,
Article 6252-17 , Vernon' s Annotated Texas Civil Statutes , as
amended, and, pursuant to such notice, has on this date held
a public hearing for the purpose of considering the approval
of the proposed Project; and
WHEREAS, the resolution of the Corporation with respect
to the Project and the Agreement to Issue Bonds have been
presented to the Governing Body and are attached hereto as
Exhibit B;
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WHEREAS; in accordance with - the terms of such
resolution, the Corporation now desires to sell and to
provide for the issuance and sale of its $6 , 600 ,000 Indus-
trial Development Revenue Bonds , Series 1982 (The Downtown
Market Place Project) (the "Bonds") , by adopting a
Resolution substantially in the form attached hereto as
Exhibit C (the "Bond Resolution") ; and
WHEREAS, Section 25 (f) of the Act provides that the
Governing Body must, by written resolution adopted no more
than sixty (60) days prior to the date of the delivery of
the Bonds , specifically approve the Bond Resolution of the
Corporation providing for the issuance of the Bonds;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF BEAUMONT, TEXAS, THAT:
Section 1. The Governing Body hereby finds and
determines that the Project proposed by the User conforms
with the overall objectives , authorizations , and limitations
specified in the EBA Resolution as required by such Resolu-
tion and the Rules .
Section 2 . The Governing Body finds that the
proposed Project to be financed for commercial use will
significantly contribute to the fulfillment of the overall
redevelopment objectives of the Unit for such eligible
blighted area, that it is in furtherance of the public
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purposes of the Act, that it is located within the desig-
nated blighted area established in the EBA Resolution, and
that it conforms to the project approval standards specified
in the Rules and in the EBA Resolution.
Section 3 . The Unit hereby approves the Project,
having made the determinations and findings required by the
EBA Resolution, the Rules , and the Act.
Section 4 . The Resolution of the Corporation and
Agreement to Issue Bonds , substantially in the forms
attached hereto as Exhibit B, that have been presented to
the Corporation, pursuant to which the Corporation agrees,
subject to the conditions stated therein, to authorize and
issue its Industrial Development Revenue Bonds in the
aggregate principal amount now estimated not to exceed
$6 ,600 , 000 in order to provide funds to defray a portion of
the cost of the acquisition and construction of the Project ,
and the Bond Resolution of the Corporation, substantially in
the form attached hereto as Exhibit C, pursuant to which the
Bonds are to be sold and issued, are hereby approved as
required by Section 25 (f) of the Act .
Section 5 . This Resolution is adopted for the
purpose of satisfying the conditions and requirements of the
Act, the Rules , and EBA Resolution with respect to the
Project. This Resolution is also adopted for the purpose of
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satisfying the conditions and requirements of Section 103 of
the Internal Revenue Code of 1954 , as amended, and the
regulations promulgated thereunder, and any requirements for
a public hearing and approval by an elected official or
legislature which may be imposed by applicable law prior to
the issuance of the bonds , and for the benefit of the
Corporation, the Unit, and the owners or holders from time
to time of the obligations of the Corporation and all other
interested persons.
Section 6 . The Mayor of the City of Beaumont,
Texas , is hereby directed to provide a certified copy of
this Resolution to the Executive Director of the Commission
to confirm the findings made and approvals granted by the
Unit with respect to the Project.
Section 7 . The Governing Body hereby finds and
determines that the issuance of the Bonds to finance the
Project will accomplish the specific public purpose for
which the Corporation was created.
Section 8 . The Governing Body has considered
evidence of the posting of notice of this meeting and
hearing and officially finds , determines , recites and
declares that a sufficient written notice of the date , hour
and place of this meeting and hearing and of the subject of
this Resolution was posted on the bulletin board at a place
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convenient to the public in the City Hall for at least 72
hours preceding the scheduled time of such meeting and
hearing; such place of posting was readily accessible to the
general public at all times from such time of posting until
the scheduled time of such meeting and hearing; and such
meeting and hearing were opened to the public as required by
law at all times during which this Resolution and the
subject matter hereof were discussed, considered and
formally acted upon, all as required by the Open Meetings
Law, Article 6252-17 , Vernon' s Annotated Texas Civil
Statutes , as amended, and the Act.
PASSED AND APPROVED this day of
1982.
Mayor, City of Beaumont , Texas
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CERTIFICATE OF RESOLUTION
THE STATE OF TEXAS §
COUNTY OF JEFFERSON §
The undersigned, being the Mayor and the City Clerk for
the City of Beaumont , Texas (the "Unit") , do hereby execute
and deliver this Certificate for the benefit of all persons
interested in proceedings of the Mayor and City Council of
the City of Beaumont, Texas (the "Governing Body") and the
validity of such proceedings , and do certify as follows :
1. The undersigned are the duly qualified and acting
Mayor and City Clerk of the Unit , respectively; and as such
we are familiar with the facts herein certified and are duly
authorized to execute and deliver this Certificate.
2 . The Governing Body convened in Regular Session on
the 21st day of December , 1982 , at the regular meeting
place thereof, and the roll was called of the members of the
Governing Body and all of said persons were present, a1E
�S thus constituting a quorum; whereupon, among
other business , a written resolution was introduced for the
consideration of the Governing Body. It was then duly moved
and seconded that said Resolution be adopted; and, after due
discussion, said motion, carrying with it the adoption of
said Resolution, prevailed and carried by the vote of
Ayes , 0 Noes , and 0 Abstention.
3. A true and complete copy of the aforesaid
Resolution adopted at the meeting is attached to and follows
this Certificate.
4 . Such Resolution has been duly and lawfully adopted
by the Governing Body and has been duly recorded in the
minutes of the Governing Body for such meeting.
5 . Written notice of the date , hour, place and
subject of the meeting of the Governing Body was posted at a
place convenient to the public in the administrative offices
of the Unit and on a bulletin board located at a place
convenient to the public in the City Hall for the City of
Beaumont , Texas , and on bulletin board located in the main
office of the Secretary of State at a place convenient to
the public, for at least 72 hours preceding the convening of
such meeting; all places of posting were readily accessible
to the general public at all times from such time of posting
until the convening of such meeting; notice was given by
telephone or telegraph to any news media which requested
such notice and previously filed such request at the
administrative offices of the Unit and consented to pay any
and all expenses of the Governing Body in providing such
special notice; and such meeting was open to the public as
required by law at times during which the Resolution and the
subject matter thereof were discussed, considered and
formally acted upon, all as required by the Open Meetings
Law, Article 6252-17 , Vernon' s Annotated Texas Civil
Statutes , as amended.
The importance of promoting and encouraging employment
and the public welfare of the Unit by the promotion and
development of commercial, industrial and manufacturing
enterprises constitutes an emergency and therefore an urgent
public necessity exists for dispensing with the requirement
of posting notice of this meeting for 72 hours in advance as
required by law. /
X 1G�IED AND SEALED this day of b�
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RESOLUTION
AUTHORIZING THE ISSUANCE OF
BEAUMONT INDUSTRIAL DEVELOPMENT CORPORATION
$6 , 600,000
INDUSTRIAL DEVELOPMENT REVENUE BONDS ,
SERIES 1982
(THE DOWNTOWN MARKET PLACE PROJECT)
AND THE EXECUTION OF
A TRUST INDENTURE
AND
OTHER RELATED DOCUMENTS
a , ,
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 2
SECTION 1. APPROVAL OF TRANSACTION. . . . . . . . . . . . . 3
(a) Approval of the Bonds . . . . . . . . . . 3
(b) Approval of the Agreement . . . . . . 3
(c) Requirement as to the Deed
of Trust and Collateral
Assignment . . . 4
(d) Requirement asto
Guarantee Agreement . . . . . . . . . . . . 4
(e) Conditions Precedent to Closing
of the Transaction. . . . . . . . . . . . . 4
(f) Approval of Sale of the Bonds . . 5
(g) Incorporation by Reference. . . . . 6
(h) Additional Authorizations to
Officers of the Corporation. . . . 6
(i) Filing of Transcript . . . . . . . . . . . 6
(.7 ) Election under the Code. . . . . . . . 6
(k) Effective Date of the Bond
Resolution. 6
(1) Defined Terms . . . . . . . . . . . . . . . . . . 6
SECTION 2. DATE, DENOMINATION, NUMBERS , AND
MATURITIES OF THE BOND. . . . . . . . . . . . . . 7
SECTION 3 . INTEREST ON THE BONDS. . . . . . . . . . . . . . . 7
SECTION 4. GENERAL CHARACTERISTICS OF
THE BONDS 7
(a) In General . . . . . . . . . . . . . . . . . . . . . 7
(b) Registration Books . . g
(c) Payment to Registered Owner. . . . g
(d) Notation of Prepayment . . . . . . . . . 9
SECTION 5 . FORM OF BOND, , , , , , 9
� b ,
SECTION 6 . PLEDGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7 . DEBT SERVICE FUND. . . . . . . . . . . . . . . . . . . 22
(a) Establishment of Debt Service
Fund. . • . •
22
(b) Accrued Interest . . . . . . . . . . . . 22
(c) Installment Loan Payments . . . . . . 22
(d) Redemption. . . . . . . . . . . . . . . . . . . . . 24
(e) Payments from Debt Service
Fund. . .
24
(f) Immediately Available Funds . . . . 24
(g) Investment of Funds . . . . . . . . . . . . 24
SECTION 8 . SECURITY FOR FUNDS . . . . . . . . . . . . . . . . . . 25
SECTION 9 . THE USER' S PAYMENTS. . . . . . . . . . . . . . . . . 25
(a) Limitation on User' s Obligation 25
(b) Prepayments . . . . . . . . . . . . . . . . . . . . 26
SECTION 10. ADDITIONAL PARITY BONDS . . . . . . . . . . . . . 26
(a) Additional Bonds . . . . . . . . . . . . . . . 26
(b) Amendments to Trust Indenture
Unnecessary. . . . . . . . . . . . . . . . . . . . 28
SECTION 11 . SPECIAL COVENANTS . . . . . . . . . . . . . . . . . . . 28
(a) Installment Loan Payments
Pledged to Bonds Only. . . . . . . . . . 28
(b) Non-Encumbrance. . . . . . . . . . . . 28
(c) Performance by Issuer. . . . . . . . . . 28
(d) Certain Modifications
Prohibited. . . . . . . . . . . . . . . . . . . . . 28
SECTION 12 . THE BONDS ARE SPECIAL OBLIGATIONS . . . 29
SECTION 13 . AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(a) Amendment with Consent of
Owners of 75% of the Bonds . . . . . 29
(b) Notice of Amendment . . . . . . . . . . . . 30
(c) Consent to Amendment . . . . . . . . . . . 31
(d) Effect of Amendment . . . . . 31
(e) Consent of Bondholders . . . . . . . . • 31
(f) Ownership of the Bonds . . . . 32
(g) Amendments Without Consent . . . . . 32
SECTION 14. ESTABLISHMENT OF CONSTRUCTION FUND. . 32'
(a) Deposit of Bond Proceeds into
Construction Fund. . . . . . . . . . . . . . 32
(b) Investment of Money in
Construction Fund. . . . . . . . . . . . 33
(c) Deposit of Accrued Interest,
Income, and Profits . . . . . . . . . . . . 33
SECTION 15 . PAYMENTS FROM CONSTRUCTION FUND. . . . . 34
(a) Corporation' s Administrative
Overhead Expenses and
OtherCosts . . . . . . . . . . . . . . . . . . . . 34
(b) Reimbursement for and Pay-
ment of Cost of the Project . . . . 34
(c) Special Conditions to First
Construction Fund Requisition. . 35
(d) Reliance by Trustee. . . . . . . . . . . . 38
SECTION 16 . SURPLUS CONSTRUCTION FUNDS. . . . . . . . . . 38
(a) Disposition of Surplus
Funds . . . . . . . 38
(b) Disposition ofConstruction
Fund upon Acceleration and
Redemption. . . . . . . . . . . . . . . . . . . . . 38
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
EXHIBITS
A Trust Indenture
B Loan Agreement
C Deed of Trust and Security Agreement
D Collateral Assignment and
Security Agreement
E Guarantee Agreement
F Letter of Representation
G Investment Letter
RESOLUTION AUTHORIZING THE ISSUANCE OF BEAUMONT
INDUSTRIAL DEVELOPMENT CORPORATION $6 , 600 ,000
INDUSTRIAL DEVELOPMENT REVENUE BONDS,
SERIES 1982 (THE DOWNTOWN MARKET PLACE PROJECT) ,
AND THE EXECUTION OF A TRUST INDENTURE
AND OTHER RELATED DOCUMENTS
WHEREAS, Beaumont Industrial Development Corporation
(the "Corporation") is a nonstock, nonprofit industrial
development corporation organized and existing under the
laws of the State of Texas , including particularly the
Development Corporation Act of 1979 , as amended, Art .
5190. 6 , Vernon' s Annotated Texas Civil Statutes (the "Act") ;
and
WHEREAS , the Corporation is a duly constituted public
instrumentality of the City of Beaumont , Texas (the "Unit") ,
a political subdivision of the State of Texas , within the
meaning of the regulations of the United States Treasury
Department (the "Regulations") and the rulings under the
Internal Revenue Code of 1954, as amended (the "Code") , and
the Corporation is functioning and acting solely on behalf
of the Unit ; and
WHEREAS , the Board of Directors of the Corporation (the
"Board") adopted a resolution on October 22 , 1982 (the
Inducement Resolution") , pursuant to which a certain
Agreement to Issue Bonds (the "Inducement Agreement")
between the Corporation and Cranston Development Company
d/b/a Cranston Development Corporation, an Ohio corporation
("Cranston") , was executed and delivered, whereby in accord-
ance with the provisions of the Act , the Corporation agreed
to provide for the financing of a portion of the cost of the
project t(the "Project") which was initially described in
Exhibit A t to the Inducement Agreement and which is more
fully described in the hereinafter described Loan Agreement ;
and
WHEREAS , as permitted by the Inducement Agreement ,
Cranston has assigned all of its interest in the Inducement
Agreement and the Project to its affiliate, Market Place
Associates , Ltd. , a Texas limited partnership (the "User") ;
and
WHEREAS, for purposes of financing a portion of the
cost of the Project , the Corporation now desires (i) to
authorize the issuance of its Industrial Development Revenue
Bonds , Series 1982 (The Downtown Market Place Project) (the
"Bonds") , in the maximum aggregate principal amount of
$6 ,600 ,000 , pursuant to the terms and provisions of a trust
indenture, (ii) to provide for the sale of the Bonds to the
purchasers described herein, (iii) to provide for the
payment of the principal of and premium, if any, and
interest on the Bonds with revenues derived from the loan of
proceeds of the sale of the Bonds (except for any amount
representing accrued interest on the Bonds) to the User to
finance the cost of the Project pursuant to the terms and
provisions of a loan agreement and (iv) to take and
authorize certain other actions in connection with the
foregoing; and
WHEREAS , on December 21, 1982 , the governing body of
the Unit adopted a written resolution specifically approving
the Project , the Inducement Resolution, the Inducement
Agreement , and this resolution of the Corporation providing
for the issuance of the Bonds ; and
WHEREAS , the Board has examined proposed forms of a
trust indenture, a loan agreement , a collateral assignment
and security agreement , a letter of representation and an
investment letter, all comprising a part of this resolution,
and the Board finds that the form and substance of such
documents are satisfactory and the recitals and findings
contained therein are true, correct and complete and hereby
adopts and incorporates by reference such recitals and
findings as if set forth in full in this resolution, and
finds that it is in the best interest of the public and the
Corporation and will assist in carrying out the public
purpose of the Corporation and the Act to authorize the
execution and delivery of such documents ; and
WHEREAS , the Board has examined the proposed form of a
guarantee agreement pursuant to which Cranston agrees (i) to
complete construction of the Project and (ii) prior to such
completion, to guarantee payment of the principal of and
premium, if any, and liquidated damages , if any, and
interest on the Bonds upon occurrence of certain events , and
the Board finds the form and substance of such document to
be satisfactory and that the agreement of Cranston as
contained in the guarantee constitutes a material inducement
to the Corporation to issue and sell the Bonds and in
reliance thereon, the Board is willing to adopt this
resolution and authorize the actions to be taken hereunder;
and
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WHEREAS , the Board has examined the proposed form of a
deed of 'trust and security agreement from the User to D. G.
Hitt , as mortgage trustee, for the benefit of the
Corporation, and the Board finds the form and substance of
such document is satisfactory;
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF
DIRECTORS OF BEAUMONT INDUSTRIAL DEVELOPMENT CORPORATION,
THAT:
Section 1. APPROVAL OF TRANSACTION.
(a) Approval of the Bonds . The Corporation hereby
authorizes and directs the issuance of the Bonds in the
maximum aggregate principal amount of $6 , 600 , 000, in
accordance with a trust indenture substantially in the form
of the Trust Indenture, dated as of December 1 , 1982 (the
"Trust Indenture") , by and between the Corporation and First
Security Bank of Beaumont , N.A. , as trustee (the "Trustee") ,
attached to this resolution as Exhibit A, the form, terms
and provisions of the Trust Indenture and the Bonds being
he authorized and approved, and the President and any
Vice President of the Corporation are hereby severally
authorized and directed to execute and deliver such
Indenture and the Bonds on behalf of the Corporation, and
the Secretary or any Assistant Secretary of the Corporation
is hereby authorized to attest and affix the Corporation' s
seal thereto, with such changes therein as the officers
executing the same may approve, such approval to be conclu-
sively evidenced by such execution thereof.
(b) Approval of the Agreement . The loan of the
proceeds of the sale of the Bonds (except for any amount
representing accrued interest on the Bonds) by the Corpora-
tion to the User in order to provide financing for a portion
of the costs of acquiring and constructing the Project shall
be effected pursuant to the terms and provisions of a loan
agreement substantially in the form of the Loan Agreement
dated as of December 1 , 1982 (the "Agreement") , by and
between the Corporation and the User, attached to this
resolution as Exhibit B, the form, terms and provisions of
the Agreement being hereby authorized and approved, and the
President and any Vice President of the Corporation are
hereby severally authorized and directed to execute and
deliver the Agreement on behalf of the Corporation, and the
Secretary or any Assistant Secretary of the Corporation is
hereby authorized to attest and affix the Corporation' s seal
thereto, with such changes therein as the officers executing
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the same may approve, such approval to be conclusively
evidenced by such execution thereof.
(c) Requirement as to Deed of Trust and Collateral
Assignment . As a condition to the actions authorized in
this Section, the User shall have executed a deed of trust
and security agreement substantially in the form of the Deed
of Trust and Security Agreement dated as of December 1 , 1982
(the "Deed of Trust") , from the User to D. G. Hitt , as
mortgage trustee, for the benefit of the Corporation,
attached to this resolution as Exhibit C, the form, terms
and provisions thereof being hereby authorized and approved.
The assignment of the Corporation' s rights under the
Deed of Trust and the Note (as defined therein) to the
Trustee for the benefit of the holders of the Bonds , shall
be effected pursuant to the terms and provisions of a
collateral assignment and security agreement substantially
in the form of the Collateral Assignment and Security
Agreement dated as of December 1, 1982 (the "Collateral
Assignment") , from the Corporation to the Trustee, and
attached to this Resolution as Exhibit D, the form, terms
and provisions of the Collateral Assignment being hereby
authorized and approved, and the President and any Vice
President of the Corporation are hereby severally authorized
and directed to execute and deliver the Collateral
Assignment on behalf of the Corporation, and the Secretary
or any Assistant Secretary is hereby authorized to attest
and affix the Corporation' s seal thereto , with such changes
therein as the officers executing the same may approve, such
approval to be conclusively evidenced by such execution
thereof.
(d) Requirement as to the Guarantee Agreement . As a
condition to the actions authorized in this Section,
Cranston shall have executed a guarantee agreement
substantially in the form of the Guarantee Agreement dated
as of December 1 , 1982 (the "Guarantee") , from Cranston to
the Trustee, attached hereto as Exhibit E, the form, terms
and provisions of the Guarantee being hereby authorized and
approved.
(e) Conditions Precedent to Closing of the Transaction.
The actions and obligations authorized in this Section shall
be subject to and conditioned upon the receipt by the
Corporation at the Closing Date (as hereinafter defined) of
(i) a letter of representation from the User and Cranston,
duly authorized and executed by the User, substantially in
the form of the Letter of Representation, dated the Closing
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Date (the "Letter of Representation") and attached to this
resolution as Exhibit F, the form, terms and provisions of
the Letter of Representation being hereby authorized and
approved and the President and any Vice President of the
Corporation are hereby severally authorized to signify the
Corporation' s acceptance and confirmation of such Letter of
Representation by executing the same on behalf of the
Corporation in multiple counterparts ; (ii) an investment
letter, duly authorized and executed by the Purchasers (as
hereinafter defined) , substantially in the form of -the
Investment Letter, dated the Closing Date (the "Investment
Letter") and attached to this resolution as Exhibit G, the
form, terms and provisions of such Investment Letter being
hereby authorized and approved; (iii) a certificate from a
representative of the Texas Industrial Commission (the
"Commission") , acting on behalf of the Commission,
evidencing final approval of the Loan Agreement ; (iv) the
purchase price for the Bonds ; and (v) such opinions ,
evidences , certificates , instruments or other documents as
shall be requested by the Corporation' s Counsel or by Bond
Counsel , to evidence due performance or satisfaction by the
User at or prior to such time of all agreements then to be
performed and all conditions then to be satisfied by it .
(f) , Approval of Sale of the Bonds . The sale and
delivery of the Bonds by the Corporation to the following
named purchasers (collectively the "Purchasers") is hereby
approved and authorized at the par value thereof plus
accrued interest from the date of the Bonds until the date
of delivery and payment for the Bonds (the "Closing Date") :
PURCHASER PRINCIPAL AMOUNT
First Security Bank of Beaumont ,
N.A. $ 3 , 100 ,000
Texas Commerce Bank-Beaumont ,
N.A. 2,500,000
InterFirst Bank - Beaumont 500 ,000
Allied Bank Beaumont 250 ,000
Texas Bank of Beaumont , Texas 250 ,000
(g) Incorporation by Reference. All of the terms and
provisions of the documents attached as Exhibits A through G
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1 ,
to this resolution shall be and the same are hereby made a
part of this resolution.
(h) Additional Authorizations to Officers of the Corpo-
ration. The officers , employees and agents of the
Corporation, and each of them, shall be and each is
expressly authorized, empowered and directed from time to
time and at any time to do and perform all acts and things
and to execute, acknowledge and deliver in the name and
under the corporate seal and on behalf of the Corporation
all certificates , financing statements , instruments and
other papers , whether or not herein mentioned, as they may
determine to be necessary or desirable in order to carry out
the terms and provisions of this resolution and of the Bonds
to be issued hereunder, as well as the terms and provisions
of the Agreement , the Trust Indenture, the Deed of Trust ,
the Letter of Representation, the Collateral Assignment and
the Guarantee hereby authorized and approved, such
determination to be conclusively evidenced by the
performance of such acts and things and the execution of any
such certificate, financing statement , instrument or other
paper.
(i) Filing of Transcript . The officers of the
Corporation (with the assistance of the User) shall prepare
a final transcript of the proceedings relating to the
authorization, issuance, sale and delivery of the Bonds ,
which transcript shall be submitted to the Commission within
thirty (30) days after the Closing Date.
(j ) Election Under the Code. The Corporation hereby
elects to have Section 103 (b) (6) (D) of the Code and the
Regulations promulgated thereunder apply to the Bonds , and
the President and the Secretary of the Corporation are
hereby severally authorized and directed to execute and
deliver a statement to the Internal Revenue Service to the
effect that the Corporation has so elected, and to deliver a
copy of such statement to the Purchaser and the User.
(k) Effective Date of the Bond Resolution. This
resolution shall take effect and be in full force and effect
upon and after its passage.
(1) Defined Terms . Unless otherwise indicated, all
capitalized terms used herein shall have the meanings set
forth in (i) this resolution and (ii) the documents which
are incorporated herein pursuant to (g) above. This
resolution is sometimes herein referred to as the "Bond
Resolution" .
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Section 2 . DATE, DENOMINATION, NUMBERS , AND MATURITIES
OF THE BONDS. The Bonds initially authorized hereby shall
be dated December 1 , 1982 , shall be issued and delivered in
the form of fully registered bonds , without coupons , payable
in installments to the registered owners thereof, or
registered assigns , all in the manner hereinafter provided,
with the Bonds to be initially payable to the Purchasers in
annual installments on the dates and in the amounts as set
forth in Section 5 hereof and to be numbered and issued as
follows :
NUMBER OWNER DENOMINATION
R-001 First Security Bank of $ 3 , 100,000
Beaumont , N.A.
R-002 Texas Commerce Bank-Beaumont , 2 ,500 , 000
N.A.
R-003 InterFirst Bank - Beaumont 500 ,000
R-004 Allied Bank Beaumont 250 ,000
R-005 Texas Bank of Beaumont , Texas 250,000
Section 3 . INTEREST ON THE BONDS . The Bonds initially
authorized hereby shall bear interest on the unpaid balance
of the principal amount thereof from the date of delivery to
the initial purchaser thereof (which date shall be indicated
by the Trustee in the Delivery Certificate appearing on the
Bond) to the scheduled due date, or date of prepayment or
redemption prior to the scheduled due date, of the principal
installments of the Bonds , at a per annum rate equal to the
Bond Interest Rate .(as defined in Section 5 hereof) . The
interest shall be payable on the dates and in the manner
provided in Section 5 .
Section 4. GENERAL CHARACTERISTICS OF THE BONDS .
(a) In General . The Bonds initially authorized hereby
shall be issued, shall be payable, may or shall be prepaid
or redeemed prior to the scheduled principal installment
payment dates , may be transferred and assigned, shall have
the characteristics , and shall be signed, executed and
sealed, all as provided and in the manner indicated in
Section 5 . After the Bonds have been authorized to be
issued by the Board but prior to the delivery of the Bonds ,
the Trustee shall authenticate the Bonds by executing the
Trustee' s Certificate of Authentication appearing on the
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17 n
Bonds as provided in Section 5 . In addition, on the date of
delivery of the Bonds to the initial purchasers thereof, the
Trustee shall fill in the date of delivery of the Bonds in
the Delivery Certificate appearing on the Bonds as provided
in Section 5 .
(b) Registration Books . The Corporation 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 Corporation hereby
appoints the Trustee as its registrar and transfer agent
(the "Registrar") to keep such books and make such
registrations and transfers under reasonable regulations as
the Corporation or the Registrar may prescribe; and the
Registrar will register or transfer as herein provided any
Bonds upon presentation thereof at such office. The
Corporation, the User and each Bondholder shall have the
right to inspect the Bond Registration Books during the
normal business hours of the Trustee.
Registration of the Bonds may be transferred only on
the Bond Registration Books upon surrender thereof by the
registered owner in person or by his duly authorized
attorney, by proper written instrument of transfer, in the
form and with guaranty of signatures satisfactory to the
Registrar, duly executed by such owner or attorney. Upon
such surrender for transfer of registration, the Registrar
shall make notation of such transfer on the Bonds in the
Assignment section appearing thereon and in the Bond Regis-
tration 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 Bond Resolution and the
Trust Indenture whether or not such Bond shall be overdue,
and the Corporation, 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, 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
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discharge the liability upon such Bond to the extent of the
sum or sums so paid.
(d) Notation of Prepayment . The Corporation hereby
appoints the Trustee as the Paying Agent for the Bonds .
Upon the prepayment or partial redemption of any Bond, the
Trustee, as Registrar and Paying Agent , shall note in the
Prepayment Record appearing on such Bond the amount of such
prepayment or redemption, the date said payment was made and
the remaining unpaid principal balance of said Bond and
shall then have said entry signed by an authorized official
of the Trustee. The Trustee shall also record such
information 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 .
Section 5 . FORM OF BOND. The form of Bond, together
with the forms of the various certificates and forms to
appear on the Bonds , shall be substantially as follows , with
necessary and appropriate variations , omissions , and
insertions as permitted or required by this Bond Resolution:
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FORM OF BOND
NO. $
UNITED STATES OF AMERICA
STATE OF TEXAS
BEAUMONT INDUSTRIAL DEVELOPMENT CORPORATION
INDUSTRIAL DEVELOPMENT REVENUE BOND
SERIES 1982
(THE DOWNTOWN MARKET PLACE PROJECT)
it BEAUMONT INDUSTRIAL DEVELOPMENT CORPORATION (the
Corporation") , 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 , Art . 5190 . 6 , Vernon' s
Annotated Texas Civil Statutes (the "Act") , and acting on
behalf of the City of Beaumont , Texas , hereby promises to
pay to
or its
registered assigns , the aggregate principal amount of
DOLLARS
in installments in the principal amounts and on the first
day of each month during the 240-month period (the
"Principal Payment Period") as shown below commencing on the
Completion Date:
and to pay interest thereon, from the date of delivery
hereof (which date appears in the Delivery Certificate
endorsed on this Bond) , on the balance of said principal
amount from time to time remaining unpaid, at a per annum
rate equal to the Bond Interest Rate (as hereinafter
defined) , and at the maximum lawful per annum rate on
overdue principal and, to the extent legally permissible, on
overdue interest , with the interest being payable on said
unpaid principal balance during the period from December 1,
1982 , until this Bond is fully paid, on the first day of
each month commencing February 1, 1983 ; provided that such
principal and interest are payable solely from the sources
and in the manner hereinafter described, and solely as
authorized and provided in the Act . For purposes of this
Bond, the "Completion Date" shall be the first day of the
month following the month in which the Project Completion
Certificate shall be issued pursuant to the Agreement (as
hereinafter defined) .
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THE TERM "BOND INTEREST RATE" shall mean the rate of
11% per annum, computed on a 365-366 day basis , as adjusted
pursuant to the provisions of the next following sentences .
If at any time prior to payment in full of the principal
amount of this Bond the maximum rate of federal income
taxation imposed on the income of corporations pursuant to
Section 11 of the Internal Revenue Code of 1954, as amended
(the "Code") , is decreased over the current rate of 46%, the
Bond Interest Rate shall be increased commencing with the
interest payment date next succeeding the effective date of
such change in the maximum corporate income tax rate on the
following basis : the Bond Interest Rate shall be increased
by . 2037 of a percentage point for each one percentage point
by which the maximum corporate tax rate is decreased. If at
any time prior to payment in full of the principal amount of
this Bond there shall occur any present or future
circumstance (other than a Taxable Event [as defined in the
Agreement] or an act or omission on the part of the holder
hereof or the Trustee) that causes or results in the
interest on this Bond being includable in the gross income
of the holder hereof for federal income tax purposes , then
from and after the date on which such income is so
includable, but only if the owners of at least 75% of the
aggregate principal amount of the Bonds then outstanding
shall so . elect , the Bond Interest Rate shall be increased to
14% per annum if such rate shall then be less than such
percentage. Furthermore, the provisions of this paragraph
relating to increase in Bond Interest Rate shall in no way
modify or diminish any rights of the Trustee and the holder
hereof with respet to redemption, principal , interest ,
liquidated damages and other remedies upon the occurrence of
a Taxable Event that thereafter results in a Final
Determination of Taxability, as defined in the Agreement .
Notwithstanding the foregoing, if at any time the Bond
Interest Rate exceeds the maximum net interest cost which
will produce a net effective interest rate in excess of 15%
per annum or such other maximum per annum rate as set out in
Article 717k-2, Vernon' s Annotated Texas Civil Statutes , as
amended, then the Bond' 'Interest Rate shall not exceed 15%
per annum or such other maximum set out in such Article.
THE PRINCIPAL of and interest on this Bond shall be
payable in lawful money of the United States of America,
without exchange or collection charges . Payment of
principal and interest , shall be made to the registered
owner by check or draft mailed by First Security Bank of
Beaumont , N.A. (the "Trustee" , "Paying Agent" , and
"Registrar" for this Bond) or its successor appointed under
the Trust Indenture (hereinafter defined) , to the registered
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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 , 1982, authorized and issued in the aggregate
principal amount of $6 , 600 ,000 pursuant to a resolution
adopted by the Board of Directors of the Corporation (the
"Bond Resolution") on behalf of the City of Beaumont , Texas ,
all issued or to be issued under a trust indenture, dated as
of December 1 , 1982 (the "Trust Indenture") , between the
Corporation and the Trustee, pursuant to and in full
conformity with the Constitution and the laws of the State
of Texas . The Bonds are issued in order to provide funds
for the Corporation to lend to Market Place Associates Ltd. ,
a Texas limited partnership (the "User") , to finance part of
the acquisition and construction of certain commercial
facilities (together with the User' s interest in the site
thereof, the "Project") . Completion of construction of the
Project , and payment of the principal of, and premium, if
any, and liquidated damages and interest on this Bond upon
occurrence prior to the Completion Date of a default in
payment hereunder or of a Taxable Event that thereafter
results in a Final Determination of Taxability (as defined
in the Agreement) , has been unconditionally guaranteed by
Cranston Development Company d/b/a Cranston Development
Corporation, an Ohio Corporation ("Cranston") pursuant to a
Guarantee Agreement dated as of December 1 , 1982 , between
the Trustee and Cranston (the "Guarantee") . The proceeds of
the sale of the Bonds will be lent to the User on a limited
recourse basis pursuant to a loan agreement , dated as of
December 1, 1982 (the "Agreement") , between the Corporation
and the User, and the User' s obligations under the Agreement
will be further evidenced by the User' s execution and
issuance of a limited recourse note (the "Note") in an
amount equal to the aggregate principal amount of the Bonds .
Contemporaneously with the execution of the Agreement , the
User executed a deed of trust and security agreement dated
as of December 1, 1982 (the "Deed of Trust") , pursuant to
which the User bargained, sold, granted, conveyed,
transferred, mortgaged, pledged and assigned to D. G. Hitt ,
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as mortgage trustee, for the use and benefit of the
Corporation, and further granted to the Corporation a
security interest in, certain portions of the Project , in
order to secure the payment of the Installment Loan Payments
(as defined in the Agreement) and the Note, according to
their tenor and effect , and certain other indebtedness of
the User, and the performance and observance by the User of
all of the covenants expressed or implied in the Deed of
Trust , the Agreement , and the Note; and the Corporation
executed a collateral assignment and security agreement
dated as of December 1 , 1982 (the "Collateral Assignment") ,
pursuant to which the Corporation conveyed, assigned,
transferred and delivered and granted a security interest to
the Trustee in the Note and all rights , titles , interests ,
liens , privileges , claims , demands and equities existing and
to exist in connection with or as security for payment of
the Note, including its rights , titles and interests arising
under the Deed of Trust in order to secure payment of the
Bonds according to their tenor and effect and the
performance by the Corporation of all the covenants
expressed or implied herein and in the Trust Indenture and
the Collateral Assignment .
ON ANY DATE, the unpaid principal installments of this
Bond are, subject to optional prepayment or redemption and
may be prepaid or redeemed prior to their scheduled due
dates , by the Trustee, at the option of the Corporation,
upon written notice of the exercise of the option to prepay
or redeem delivered to the Trustee by the Corporation not
later than the 45th day prior to the date of prepayment or
redemption. Such unpaid principal installments may be so
prepaid or redeemed as a whole on any date , or in part on
any interest payment date (and, ' if in part , such installment
shall be prepaid or redeemed in inverse chronological order
of their scheduled due dates , and in amounts not less than
all of an unpaid principal installment) , for the principal
amount thereof and accrued interest thereon to the date of
prepayment or redemption but without any premium.
PROMPTLY AFTER ANY DATE ON WHICH the unpaid principal
installments of this Bond are subject to mandatory
prepayment or redemption as a whole as a result of
occurrence of a Taxable Event and a Final Determination of
Taxability, all such installments shall be prepaid or
redeemed prior to their scheduled due dates by the Trustee,
with funds which shall be furnished by the Corporation, on
the earliest practicable date, and in all events within
sixty days , following the latter of such occurrences as
provided for in the Agreement . The prepayment or redemption
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price in such event shall be equal to the unpaid principal
amount of this Bond so prepaid or redeemed, plus accrued
interest to the date of prepayment or redemption, plus an
additional amount (the "Redemption Premium") calculated by
multiplying an amount equal to 3% of the unpaid principal
amount of this Bond by the number of complete 3-month
periods elapsed between the date of the Taxable Event and
the actual prepayment or redemption date, with such
additional amount being payable on the prepayment or
redemption date and with such additional amount being the
agreed liquidated damages (for loss of a bargain and not as
a penalty) which the owner of this Bond will be due as a
result of the loss of the tax exempt status of the interest
on this Bond. Such prepayment or redemption price shall
constitute the entire amount due with respect to this Bond
as a result of the occurrence of a Taxable Event and a Final
Determination of Taxability.
In the event this Bond has been paid prior to a Final
Determination of Taxability, or in the event that notice of
prepayment or redemption is given prior to a Final
Determination of Taxability, the registered owner of this
Bond at the time it is paid shall additionally be entitled
to receive the Redemption Premium calculated using the date
this Bond is paid in lieu of the actual prepayment or
redemption date.
ON ANY DATE but only with and to the extent of any
surplus funds remaining in the Construction Fund after the
completion of the Project as provided and required by
Section 16 of the Bond Resolution, the unpaid principal
installments of this Bond shall be prepaid or redeemed prior
to the scheduled due dates by the Trustee, in inverse
chronological order of their scheduled due dates (in the
denominations of $1 ,000 or any integral multiple thereof or
in amounts not less than all of an unpaid principal
installment) , 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.
NOTWITHSTANDING ANY OTHER PROVISION HEREOF, if the
Completion Date shall not have occurred on or before January
1 , 1985 , and if at any time on or before February 15 , 1985 ,
the owners of at least 75% in aggregate principal amount of
the Bonds then outstanding shall notify the Trustee in
writing that they elect mandatory redemption of their Bonds ,
then the Trustee shall promptly notify the Corporation and
the User to such effect , whereupon on March 1 , 1985 (or on
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the next succeeding business day if otherwise a non-business
day) the Trustee shall redeem, with funds provided by the
Corporation, this Bond and all other Bonds then outstanding
at a redemption price equal to the unpaid principal amount
of this Bond and all other Bonds on such redemption date,
plus accrued interest hereon on such date, but without
premium of any kind.
NOTWITHSTANDING ANY OTHER PROVISION HEREOF, if on May
31, 1983 , all of the "Special Conditions to First
Construction Fund Requisition" shall not have been satisfied
as provided in the Bond Resolution with the result that on
such date the Trustee shall not be permitted to make any
disbursements from the Construction Fund for any Cost of the
Project (other than amounts described in Sections 14(c) or
15 (a) of the Bond Resolution) , then, and only in such event ,
the unpaid principal of this Bond and all other Bonds then
outstanding shall be redeemed as a whole by the Corporation
on a date selected by the Trustee which is not more than 15
days after May 31 , 1983 , at a redemption price equal to the
principal amount of the Bonds to be redeemed, plus accrued
interest thereon to such date, but without premium of any
kind.
THE , AGREEMENT recites and it is hereby provided that
any provision for any payment of this Bond contained herein
or in the Agreement shall be held to be subject to reduction
to the amount allowed under the usury laws and the public
securities laws of the State of Texas as now or hereafter
construed by the courts having jurisdiction, and it is
agreed by the Corporation and the owner of this Bond that in
no event shall usury or any amount in excess of the maximum
allowed under such public securities laws be paid or
collected with respect to this Bond (whether as or in the
form of liquidated damages or otherwise) .
AT LEAST 7 DAYS PRIOR to the date fixed for any
prepayment or redemption of the unpaid principal
installments of this Bond, the Trustee shall cause a written
notice of such redemption to be mailed to the registered
owner of this Bond addressed to such owner at the address
appearing on the Bond Registration Books . By the date fixed
for any such prepayment or redemption, due provision shall
be made by the Corporation with the Trustee and the Paying
Agent for the payment of the principal amount of this Bond
which is to be prepaid or redeemed, plus accrued interest
thereon to the date fixed for prepayment or redemption, plus
any required prepayment or redemption premium, and any other
amounts due the owner of this Bond. If such written notice
-15-
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 this Bond which
are to be prepaid or redeemed, thereby automatically shall
be deemed to have been prepaid or redeemed prior to their
scheduled due dates , and they shall not bear interest after
the date fixed for prepayment or redemption, and they shall
not be regarded as being outstanding except for the right of
the owner hereof to receive the redemption price from the
Paying Agent out of the funds provided for such payment .
Upon presentation of this Bond to the Paying Agent , such
unpaid principal installments which are to be prepaid or
redeemed shall be paid at the redemption price. Except as
set forth above, this Bond is not subject to prepayment or
redemption prior to maturity.
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 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
Corporation, and that the principal of and interest on this
Bond are payable from and secured by a first lien on and
pledge of the payments designated as "Installment Loan
Payments" to be made or paid, or caused to be made or paid,
to the Trustee, pursuant to the Bond Resolution, the Trust
Indenture and the Agreement . The User, which is a limited
partnership organized . and existing under the laws of the
State of Texas , is obligated on a limited recourse basis as
provided in the Agreement , 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 Bonds by the Bond Resolution, in aggregate amounts
sufficient to pay and redeem, and provide for the payment
and redemption of, the principal of and interest on this
-16-
Bond, and to pay all other amounts required by the
Agreement , the Bond Resolution, and the Trust Indenture when
due, subject to and as required by the provisions of the
Agreement , the Bond Resolution, and the Trust Indenture.
THIS BOND is secured by the Trust Indenture whereunder
the Installment Loan Payments are pledged as collateral and
the Trustee is custodian of the Debt Service Fund and is
obligated to enforce the rights of the owner of this Bond
and to perform other duties in the manner and under the
conditions stated in the Trust Indenture. In case an "Event
of Default" , as defined in the Trust Indenture, shall occur,
the unpaid principal installments of this Bond may be
declared to be due and payable immediately upon the
conditions and in the manner provided in the Trust
Indenture. This Bond is additionally secured by the
Collateral Assignment of the Corporation' s rights with
respect to the Note and the Deed of Trust . Reference is
hereby made to the Bond Resolution, the Trust Indenture, the
Deed of Trust , the Agreement and the Collateral Assignment
for additional provisions with respect to the nature and
extent of the security, the rights , duties , and obligations
of the User, the Corporation, the Trustee , and the owner of
this Bond, the terms upon which this Bond is issued and
secured, ,and the modification of any of the foregoing.
THE CORPORATION has reserved the right , subject to the
restrictions stated in the Bond Resolution and with the
consent of the owners of at least 75% in aggregate principal
amount of the Bonds and any Additional Bonds then
outstanding (as hereinafter defined) , 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 the
pledge of "Installment Loan Payments" pursuant to the
Agreement and entitled to the benefits of and secured by the
Trust Indenture, and the Deed of Trust in the same manner
and to the same extent as , and shall be on a parity with,
this Bond and all then outstanding Additional Bonds .
THE CORPORATION also has reserved the right to amend
the Bond Resolution and the Trust Indenture , as provided
therein; and under some (but not all) circumstances
amendments thereto must be approved by the owners of 75% in
aggregate principal amount of the Bonds then outstanding and
any Additional Bonds then outstanding.
THE BONDS AND any coupons appertaining thereto are
limited obligations of the Corporation and shall be payable
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1
solely out of the revenues derived from or in connection
with the Agreement , including all sums deposited from time
to time pursuant to the Agreement , the Trust Indenture and
the Note in the Debt Service Fund established under the
Trust Indenture, and in certain events out of amounts
attributable to Bond proceeds or amounts secured through
exercise of the remedies provided in the Trust Indenture,. or
in the Deed of Trust , or in the Collateral Assignment upon
occurrence of an event of default thereunder. Neither the
State of Texas nor the City of Beaumont nor any political
corporation, subdivision or agency of the State of Texas
shall be obligated to pay the principal of or premium, if
any, or liquidated damages , if any, or interest on the Bonds
and neither the faith and credit nor the taxing power of the
State of Texas , the City of Beaumont , or any other political
corporation, subdivision or agency of the State of Texas is
pledged to the payment of the principal of or interest on
the Bonds . No recourse under this Bond shall be had against
any past , present or future officer of the Corporation or of
the City of Beaumont . The Bonds shall never be paid in
whole or in part out of any funds raised or to be raised by
taxation or out of any other revenues of the Corporation,
the City of Beaumont , or the State of Texas except those
revenues pledged by the Trust Indenture.
THIS BOND may be assigned and shall be transferred only
on the Bond Registration Books of the Corporation kept by
the Trustee, as Registrar, upon the terms and conditions set
forth in the Bond Resolution, the Trust Indenture and the
Assignment provisions endorsed hereon. Such transfers shall
be without expense to the owner hereof, but any taxes or
other governmental charges required to be paid with respect
to the same shall be paid by the owner requesting such
transfer as a condition precedent to the exercise of such
privilege. The registered owner of this Bond may be deemed
and treated by the Corporation, the Trustee, and the User,
as the absolute owner thereof for all purposes , including
payment and discharge of liability upon such Bond to the
extent of such payment , and the Corporation, 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
completed.
- 18-
t
IN WITNESS WHEREOF, this Bond has been signed with the
manual or facsimile signatures of the President and the
Secretary of the Corporation, and the official seal of the
. Corporation affixed on this Bond.
BEAUMONT INDUSTRIAL
ATTEST: DEVELOPMENT CORPORATION
By:
Secretary President
(CORPORATION' S SEAL)
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i K
FORM OF TRUSTEE' S CERTIFICATE OF AUTHENTICATION
TRUSTEE' S CERTIFICATE OF AUTHENTICATION
This Bond is the Bond initially issued under the pro-
visions of the within mentioned Agreement , Bond Resolution,
and Trust Indenture.
FIRST SECURITY BANK OF
BEAUMONT, N.A.
By:
Its : Authorized Officer
TRUSTEE
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 author-
izes the transfer of this Bond on the Bond Registration
Books of the Trustee. Such assignment shall not be
effective until such Assignee presents this Bond to the
Trustee for verification of such assignment and gives the
Trustee its address to which payments shall be made and the
Trustee makes notation of such Assignment below.
DATE OF REGISTERED SIGNATURE
ASSIGNMENT OWNER ASSIGNEE OF REGISTRAR
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FORM OF DELIVERY CERTIFICATE
DELIVERY CERTIFICATE
THIS BOND was delivered to and paid for by the
purchaser hereon on
FORM OF PREPAYMENT RECORD
PREPAYMENT RECORD
Principal Name & Title Signature
Date Prepayment Remaining of Authorized of
of or Principal Officer Authorized
Pmt . Redemption Balance Making Entry Officer
-21-
Section 6 . PLEDGE. The Bonds and the interest thereon
are and shall be payable from and secured by a first lien on
and pledge of the payments designated as Installment Loan
Payments to be made or paid, or caused to be made or paid,
to the Trustee by the User, pursuant and subject to the
terms and provisions of this Bond Resolution, the Trust
Indenture, and the Agreement ; and such Installment Loan Pay-
ents are further pledged irrevocably to the establishment
and maintenance of the Debt Service Fund hereinafter
created. The Bonds are additionally secured as provided in
the Collateral Assignment .
Section 7 . DEBT SERVICE FUND.
(a) Establishment of Debt Service Fund. A separate
and special trust fund to be designated -and known as the
"Debt Service Fund" shall be established by the Corporation
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 Bond Resolution and the Trust
Indenture, as long as any of the Bonds , or interest thereon,
is outstanding and unpaid.
(b) Accrued Interest . Immediately after the delivery
of the Bonds to the initial purchasers thereof, all accrued
interest , if any, received from the proceeds from the sale
and delivery of the Bonds , shall be transferred by the
Trustee into the Debt Service Fund.
(c) Installment Loan Payments . Pursuant to the
Agreement and the Trust Indenture, the User shall make or
pay, or cause to be made or paid, to the Trustee, which
shall deposit into the Debt Service Fund, Installment Loan
Payments as follows :
(1) On or before each interest payment date as
provided in Section 5 hereof, an amount which,
together with any other amounts then on deposit
therein and available for such purposes , 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 Section 5 hereof, 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
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(3) On or before any optional or mandatory prepayment
or redemption date as permitted or required in
Section 5 hereof, an amount which, together with
any other amounts then on deposit and available
for such purpose, will be sufficient to pay the
prepayment or redemption price (including any
agreed liquidated damages) specified therein; and
(4) Promptly after the occurrence of a Taxable Event
and a Final Determination of Taxability, the
additional amount required to pay the agreed
liquidated damages to the owners of the Bonds for
any installments of principal which were unpaid on
the date of any Taxable Event , but which were paid
or redeemed prior to the prepayment or redemption
of all unpaid principal installments after a Final
Determination of Taxability, all as provided in
Section 5 hereof; and
(5) On any date on which the Bonds are declared to be
immediately due and payable pursuant to the Trust
Indenture, an amount which, together with any
other amounts then on - deposit and available for
such purpose; will be sufficient to pay the
principal of all Bonds then outstanding and the
interest accrued thereon to such date and
Redemption Premium, liquidated damages , if
applicable, and the reasonable fees and expenses
(including attorneys ' fees) of the Trustee in
enforcing the Agreement ; and
(6) 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
Section 5 hereof, for paying or redeeming
principal installments of the Bonds , and paying
the interest thereon.
In the event the User should fail to make, or cause to be
made, 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 15% per
annum, from the date any such payment was due until payment
thereof.
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(d) Redemption. The Bonds initially authorized
hereby shall be subject to redemption, and may or shall be
redeemed, as specified in Section 5 hereof.
(e) Payments from Debt Service Fund. Except as
otherwise specifically provided in this Bond Resolution or
the Trust Indenture, the Debt Service Fund shall be used by
the Trustee only to pay the principal of, prepayment or
redemption premium, if any, agreed liquidated damages , if
any, and interest on the Bonds , when due, and the charges of
the Trustee, Registrar, and Paying Agent ; and the Trustee
shall make available to the Paying Agent , out of the Debt
Service Fund, the amounts required to pay or redeem the
principal of and interest on the Bonds when due, and the
Trustee shall make all other payments as required by this
Initial Bond Resolution and the Trust Indenture.
(f) Immediately Available Funds . The User shall make
all Installment Loan Payments in funds that will be
immediately available and allow the Paying Agent to pay, in
lawful money of the United States of America, the principal ,
interest , and other amounts with respect to the Bonds , when
due.
(g) Investment of Funds . Any money held as part of
the Debt Service Fund shall be invested or reinvested by the
Trustee, upon the written direction of the Approving Officer
in any obligations of the United States Government or its
agencies or in certificates of deposit of banks approved by
the Trustee, including certificates of deposit of the
Trustee. The Trustee shall make no investments except as
specifically directed by the Approving Officer. The
investments of the Debt Service Fund shall be deemed to be a
part of such Fund, and, for the purpose of determining the
amount of money in such Fund, such investments shall be
valued at their cost or market value, whichever is lower.
The income and profits , including realized discount on
obligations purchased, received from such investments shall
be deposited in or credited to the Debt Service Fund, and
any losses on investments thereon shall be charged against
the Debt Service Fund. If at any time it shall become
necessary that some or all of the investments made with the
moneys from the Debt Service Fund be redeemed or sold to
raise moneys necessary to comply with the provisions of this
Bond Resolution or the Trust Indenture, the Trustee shall,
without further authorization, effect such redemption or
sale, employing, in the case of a sale, any commercially
reasonable method of effecting the same. The Trustee shall
not be liable or responsible for any loss resulting from any
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such investment or resulting from the redemption or sale of
any such investment as herein authorized, except that the
Trustee shall be liable for (1) any loss resulting from its
willful or negligent failure, within a reasonable time after
receiving the written direction from the Approving Officer,
to make, redeem, or sell any investment in the manner
provided for. herein, and (2) except for any redemption or
sale made pursuant to the next preceding sentence of this
paragraph, for any _ loss resulting from the making,
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 thereafter the Trustee shall be relieved of all
responsibility with respect thereto . In the event of any
such loss , the User shall make additional deposits to
restore same if and to the extent required to enable the
Trustee to make all payments required to be made from the
Debt Service Fund, and such additional deposits shall
constitute additional amounts of "Installment Loan
Payments" .
Section 8 . SECURITY FOR FUNDS. All uninvested money
in all Funds established pursuant to this Bond Resolution
(including the Debt Service Fund and the Construction Fund)
shall be secured by the Trustee in such manner and to the
extent as may be directed by the Approving Officer and
approved by the Trustee.
Section 9 . THE USER' S PAYMENTS .
(a) Limitation on User' s Obligation. The User has
covenanted in the Agreement and the Trust Indenture, and, by
the approval of this Bond Resolution, the User further has
obligated itself and agreed on a limited recourse basis ,
regardless of and notwithstanding any provisions of the
Agreement (other than Sections 6 . 01 and 6 . 02 thereof
relating to merger, consolidation, transfer of assets , and
assignment) , and regardless of the provisions of any other
agreement or contract to the contrary, to make or pay or
cause to be made or paid, without set-off, recoupment , or
counterclaim but on a limited recourse basis only, 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 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
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the Agreement . Each Bondholder is and shall be entitled to
rely unconditionally on the agreements , covenants , and
representations set forth in this Bond Resolution and the
Trust Indenture.
(b) Prepayments . It is further understood that the
User may prepay all or any part of each Installment Loan
Payment , and any such prepayment , and any earnings thereon,
shall be applied by the Trustee to the payment of each
Installment Loan Payment ; provided that the prepayment or
redemption at any time of any unpaid principal installments
of the Bonds prior to their due dates , with funds from any
source (whether from Installment Loan Payments or
otherwise) , shall not relieve the User of its obligation to
make or pay, or cause to be made or paid, each Installment
Loan Payment as specified in Section 9 (a) , when due with
respect to any remaining unpaid principal installments of
the Bonds .
Section 10 . ADDITIONAL PARITY BONDS .
(a) Additional Bonds . The Corporation reserves the
right , upon the request of the User but only with the
consent of the holders of at least 75% in aggregate
principal amount of the Bonds and any Additional Bonds (as
hereinafter defined) then outstanding, to issue additional
parity revenue bonds ("Additional 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 Bond Resolution, shall be
considered, constitute, and be "Bonds" as defined in, and
for all purposes of, the Agreement and the Trust Indenture.
When issued and delivered, such Additional Bonds , the
redemption premium, if any, agreed liquidated damages , if
any, and the interest thereon shall be payable from the Debt
Service Fund, and shall be payable from and secured by a
first lien on and pledge of Installment Loan Payments
pursuant to the Agreement , and secured by the Trust
Indenture and the Collateral Assignment 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
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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 issu-
ance of such Additional Bonds will not adversely affect
the exemption from federal income taxation of the
interest on the then outstanding Bonds and Additional
Bonds , or affect the validity of the then outstanding
Bonds or Additional Bonds and (B) such Additional Bonds
are secured in the same manner and to the same extent
as and are on a parity with all then outstanding Bonds
and Additional Bonds ;
(ii) A certificate is executed by the President
and Secretary of the Corporation to the effect that no
default exists in connection with the Bonds or the
Trust Indenture (or any amendment or supplemental
thereto) or with any of the covenants or requirements
of this Bond Resolution or the Bond Resolutions (or any
amendments or supplements thereto) authorizing the
issuance of all then outstanding Bonds and Additional
Bonds , and that the Debt Service Fund contains the
amount then required to be on deposit therein;
(iii) The Bond Resolution authorizing the issuance
of such series or issue of Additional Bonds provides
for additional Installment Loan Payments to be
deposited into the Debt Service Fund in amounts
sufficient to pay all principal of, redemption premium,
if any, agreed liquidated damages , if any, and interest
on such Additional Bonds , together with all Trustee,
Registrar, and Paying Agent fees and expenses
attributable to such Additional Bonds ;
(iv) The Approving Officer and the Trustee, but
only with the consent of the holders of at least
seventy five percent (75%) of the then outstanding
principal amount of the Bonds and Additional Bonds , if
any, approve in writing the Bond Resolution authorizing
the issuance of such series or issue of Additional
Bonds , as required by the Agreement ;
(v) The Trustee, Paying Agent , and 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
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(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
Corporation 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 Corporation fur-
ther covenants as follows :
(a) Installment Loan Payments Pledged to Bonds Only.
Other than for the payment of the Bonds and except as
provided in this Bond Resolution, the Trust Indenture and
the Collateral Assignment , the Installment Loan Payments ,
the Deed of Trust and the Note have not in any manner been
pledged to the payment of any debt or obligation of the
Corporation.
(b) Non-Encumbrance . While any of the Bonds are
outstanding, the Corporation will not (except with respect
to the Bonds and any Additional Bonds and except as provided
in the Agreement , any Bond Resolution, or the Trust
Indenture) in any manner whatsoever create, assume, or
suffer to exist , directly or indirectly, any mortgage, lien,
encumbrance, pledge , or charge against the Debt Service
Fund, the Installment Loan Payments , the Construction Fund,
the Deed of Trust , the Note, or any property or moneys
deposited with the Trustee.
. (c) Performance by Corporation. The Corporation will
carry out all of its covenants and obligations under this
Bond Resolution; and the Corporation may be required to
carry out such covenants and obligations by all legal and
equitable means , including, but without limitation, actions
for specific performance and the use and filing of mandamus
proceedings in any court of competent jurisdiction against
the Corporation.
(d) Certain Modifications Prohibited. The Corporation
covenants and agrees that it will not execute or permit the
execution of any contract or agreement , or terminate or
amend the Agreement , in any manner that would relieve or
abrogate the obligations of the User to make or pay, or
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cause to be made or paid, when due , all Installment Loan
Payments , in the manner and 'to the extent required by the
Agreement , this Bond Resolution, and the Trust Indenture, or
which would change or affect Sections 4.*04, 4. 05 , 4. 06 , 6 .01
and 6 . 02 of the Agreement without the written consent of all
of the Bondholders and the Trustee .
Section 12 . THE BONDS ARE SPECIAL OBLIGATIONS. The
Bonds and any coupons appertaining thereto are limited
obligations of the Corporation and shall be payable solely
out of the revenues derived from or in connection with the
Agreement , including all sums deposited from time to time
pursuant to the Agreement , the Trust Indenture and the Note
in the Debt Service Fund established under the Trust
Indenture, and in certain events out of amounts attributable
to Bond proceeds or amounts secured through exercise of the
remedies provided in the Trust Indenture, or in the Deed of
Trust , or in the Collateral Assignment upon occurrence of an
event of default thereunder. Neither the State of Texas
(the "State") nor the City of Beaumont (the "Unit") nor any
Political corporation, subdivision or agency of the State of
Texas shall be obligated to pay the principal of or premium,
if any, or liquidated damages , if any, or interest on the
Bonds and neither the faith and credit nor the taxing power
of the State of Texas , the City of Beaumont , or any other
political corporation, subdivision or agency of the State of
Texas is pledged to the payment of the principal of or
interest on the Bonds . No recourse under this Bond shall be
had against any past , present or future officer of the
Corporation or of the City of Beaumont . The Bonds shall
never be paid in whole or in part out of any funds raised or
to be raised by taxation or out of any other revenues of the
Corporation, the City of Beaumont , or the State of Texas
except those revenues pledged by the Trust Indenture. No
present or future Commissioner, member, officer or employee
of the Commission shall be held liable for the performance
of any agreement , covenant or obligation under the Bonds ,
this Bond Resolution, the Agreement , or the Trust Indenture,
or for any claim based thereon or otherwise with respect
thereto.
Section 13 . AMENDMENTS .
(a) Amendment with Consent of Owners of 75% of the
Bonds . Subject to approval in writing by the Corporation
(with the consent of the Approving Officer of the User) , the
owners of 75% in aggregate principal amount of the then
outstanding Bonds shall have the right from time to time to
approve any amendment to any Bond Resolution or to the Trust
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Indenture (provided that the Trustee must approve any
amendment to the Trust Indenture) which may be deemed
necessary or desirable by the Corporation; provided,
however, that nothing herein contained shall permit or be
construed to permit the amendment , without the consent of
the owner of each of the then outstanding Bonds affected
thereby, of the terms and conditions of any Bond Resolution,
the Bonds , or the Trust Indenture, so as to:
(1) change the Debt Service Fund requirements ,
interest payment dates , mandatory redemption
provisions , or the due date or dates , or the
maturity or maturities of the outstanding Bonds ;
(2) reduce the rate of interest borne by any of the
outstanding Bonds ;
(3) reduce the terms of the principal of, redemption
premium, if any, liquidated damages , if any, or
interest on the outstanding Bonds , or impose any
conditions with respect to such payments ;
(4) modify the terms of payment of principal of,
redemption premium, if any, liquidated damages , if
any, or interest on the outstanding Bonds , or
impose any conditions with respect to such
payments ;
(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 , this Bond Resolution,
and the Trust Indenture.
(b) Notice of Amendment . If at any time the
Corporation shall desire to amend any Bond Resolution or the
Trust Indenture under this Section, the Corporation 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 City of New York, New York, or in the State of Texas ,
during each calendar week for at least two successive
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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 to Amendment . Whenever at any time (but
not less than 30 days nor more than one year from the date
of the first publication of said notice or other service of
written notice) the Corporation shall receive an instrument
or instruments executed by the owners of at least 75% in
aggregate principal amounts of all Bonds then outstanding,
which instrument or instruments shall refer to the proposed
amendment described in said notice and shall specifically
consent to and approve such amendment , the Corporation 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 of all the Bondholders under such amendatory
resolution or the Trust Indenture shall thereafter be deter-
mined and exercised subject in all respects to such
amendments .
(e) Consent of Bondholders . Any consent given by a
Bondholder pursuant to the provisions of this Section shall
be irrevocable for a period of six months from the date of
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 six months
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 Corporation, but such revocation shall not
be effective if the owners of 75% in aggregate principal
amount of the then outstanding Bonds have, prior to the
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attempted revocation, consented to and approved the
amendment .
(f) Ownership of the Bonds . For the purpose of this
Section, the fact of being a Bondholder, the amount and
numbers of such Bonds , and the date of being a Bondholder
may be conclusively presumed, or may be proved by an
affidavit satisfactory to the Corporation 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 therein mentioned such person has on deposit with such
trust company, bank, banker, or other depository, the Bonds
described in such certificate, or in any other manner,
whether or not the Bonds are so deposited, as the Trustee
may approve. The Corporation may conclusively presume that
the status of any Bondholders will continue until written
notice to the contrary is served upon the Corporation.
(g) Amendments Without Consent . Notwithstanding the
provisions of (a) through (f) of this Section, and without
publication of the proposed amendment and without the
consent of the Bondholders , but subject to approval of the
Approving Officer and, in the case of any amendment to the
Trust Indenture, with the approval of the Trustee, the
Corporation 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
certified 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 Corporation shall establish the
Construction Fund with the Trustee, as defined in and
required by the Agreement . The Corporation 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 constitute the Loan made to the User by the
Corporation as contemplated and provided in the Agreement .
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(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 obligations of the United States
government or its agencies or in certificates of deposit of
banks approved by the Trustee, including certificates of
deposit of the Trustee. The Trustee shall make no
investments except as specifically directed in writing by
the Approving Officer. The investments of the Construction
Fund shall be deemed to be a part of the Construction Fund,
and for the purpose of determining the amount of money in
the Construction Fund, such investments shall be valued at
their cost or market value, whichever is lower. The income
and profits , (including realized discount on obligations)
received from such investments shall be deposited in or
credited to the Construction Fund, and any losses on
investments shall be charged against the Construction Fund.
Upon the written direction of the Approving Officer, the
Trustee shall redeem or sell all or any designated part of
such investments employing, in the case of a sale, any
commercially reasonable method of effecting the same. The
Trustee shall not be liable or responsible for any loss
resulting from the redemption or sale of any such investment
as herein authorized; except that , notwithstanding any
provisions of the Agreement , the Trustee shall be liable for
(1) any loss resulting from its willful or negligent
failure, within a reasonable time after receiving the
written direction from the Approving Officer, to make,
redeem, or sell any investment in the manner provided for
herein, and (2) any loss resulting from the making,
redeeming, or selling of any investment which was not
authorized by written direction of the Approving Officer.
If the Trustee is unable, after reasonable effort and within
a reasonable time after receipt of the required written
direction, to make, redeem, or sell any such investment , it
shall so notify in writing the Approving Officer, and
thereupon the Trustee shall be relieved of all liability or
responsibility with respect thereto.
(c) Deposit of Accrued Interest , Income, and Profits .
Any accrued interest received from the sale of the Bonds ,
and 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 .
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Section 15 . PAYMENTS FROM CONSTRUCTION FUND.
(a) Coporation' s Administrative Overhead Expenses
and Other Costs . Immediately after the delivery of the
Bonds authorized hereby, the Trustee shall pay directly to
the Corporation the amount of $4, 300 . 00 in accordance with
the Agreement , being the amount required to reimburse the
Corporation for its application fee and its administrative
and overhead expenses directly attributable and chargeable
to the costs of issuance of the Bonds authorized hereby.
Also , immediately after the delivery of the Bonds authorized
hereby, the Trustee shall pay directly out of the
Construction Fund, promptly after receiving the bills or
statements therefor, all of the actual expenses and costs of
issuance of such Bonds , including, without limitation,
financing charges , commitment fees , printing and engraving
expenses , the fees and expenses of accountants , financial
advisors , and attorneys , and the initial fees and expenses
of the Trustee.
(b) Reimbursement for and Payment of Cost of the Project .
Subject and subordinate to making the payments required by
the preceding paragraph but only if the "Special Conditions
to First Construction Fund Requisition" shall be satisfied
as provided in Section 15 (c) below, the Trustee shall make
such payments from the Construction Fund to enable the User
to pay, or to reimburse the User for paying, any Cost of the
Project , from time to time upon receipt by the Trustee of a
request of the User signed by the Approving Officer. Such
request shall be accompanied by a certificate (in the form
attached to the Agreement) stating with respect to each
payment as follows :
(i) the expenditures , in summary form, as to
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,
acquisition and development of property, or to
contractors , subcontractors , materialmen, engineers ,
architects , or other persons who will perform or have
performed necessary or appropriate services or will
supply or have supplied necessary or appropriate
materials for the acquisition, construction, equipping,
and furnishing of the Project , as the case may be, and
that , to the best of the knowledge of the person
delivering the certificate, the fair value of such
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L
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 from the
Construction Fund or any other source;
(iv) that the payment of the amounts requested
will not result in a breach of any of the covenants of
the User contained in the Agreement , and particularly
those covenants in Sections and 4. 06 and 6 . 04 thereof,
which relate to the Code and the Regulations ; and
(v) that the expenditure of such amounts to be
paid, when added to all previous disbursements from the
Construction Fund, will result in at least 90% of the
total of such disbursements , other than disbursements
for issuance expenses , being used to provide land or
property of a character subject to the allowance for
depreciation under Section 167 of the Code [which
expenditures are amounts paid or incurred that are, for
federal income tax purposes , chargeable to the
Project ' s capital account or would be so chargeable
with a proper election by the User (for example, under
Section 266 of the Code) but for a proper election by
the User to deduct such amounts] .
(c) Special Conditions to First Construction Fund
Requisition. Notwithstanding any provision herein to the
contrary, it is expressly stipulated that the Trustee shall
not make the first disbursement of any amounts from the
Construction Fund to pay any Cost of the Project (other than
as provided in Sections 14(c) and 15 (a) above) at any time
prior to May 31 , 1983 (the "Performance Date") unless the
Special Conditions to First Construction Fund Requisition
(as hereinafter defined) shall have first been satisfied,
and the Trustee shall not be permitted to make any such
disbursement after the Performance Date in the event that
the Special Conditions are not satisfied on or before that
Date. For purposes of this Bond Resolution, the term
Special Conditions to First Construction Fund Requisition"
shall mean all of the following conditions which must be
satisfied on or prior to the Performance Date:
(i) On or before the Performance Date, the Unit
shall provide a certificate to the Trustee to the
effect that the Department of Housing and Urban
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+ a
Development ("HUD") shall have made an urban
development action grant to the Unit in order to pay a
portion of the Cost of the Project , and that the terms
of the grant shall have expressly stated that any
security for the HUD grant shall be subordinated to the
security for the Bonds and any renewals and extensions
thereof, with the terms of the subordination to be to
the satisfaction of the Trustee, which certificate
shall be accompanied by written approval of the Unit
and the User as to the amount of such grant ;
(ii) On or before the Performance Date, the Unit
shall provide a certificate to the Trustee to the
effect that the Unit shall have loaned the proceeds of
the HUD grant to the User or a co-developer of the
Project named by HUD with respect to such grant for use
in the Project , with the loan to be evidenced by a
written loan agreement which is to the reasonable
satisfaction of the Unit , the User and HUD and which
contains the subordination described in clause (i)
above that is to the satisfaction of the Trustee;
(iii) On or before the Performance Date, the Unit
shall provide a certificate to the Trustee to the
effect that the Unit shall have appropriated the sum of
$2,000 ,000 or such lesser amount (but not less than
$1, 800 , 000) as may be necessary to pay for the cost of
parking, land acquisition and development , street ,
sidewalk and other improvements to support the Project ;
(iv) On or before the Performance Date , the User
(or any entity designated by it) shall invest in the
Project to the reasonable satisfaction of the Trustee
not less than $2, 396 ,000 in cash and shall have
invested an additional amount in cash equal to the
difference between $2 , 100 ,000 and the amount of the
loan described in clause (ii) above; this condition
(iv) may be modified with the approval in writing by
the Corporation and the holders of 100% of the
principal amount of the Bonds then outstanding;
(v) On or before the Performance Date, the User
shall have acquired title to all of the property
described in the Option Contracts (as defined in the
Deed of Trust) and any other necessary property
described in clause (z) below, and the User shall have
furnished to the Trustee on or before the Performance
Date (but in no event later than the date of the First
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Construction Fund Requisition if all of the other
conditions for such requisition have been theretofore
satisfied) (x) owners ' and mortgagee ' s policies of
title insurance showing to the reasonable satisfaction
of and in amounts reasonably approved by the Trustee
that the liens under the Deed of Trust and the Trust
Indenture are the first , valid and superior liens
against all real property acquired pursuant to the
Option Contracts or clause (z) below, free of all
encumbrances other than Permitted Encumbrances (as
defined in the Deed of Trust) , (y)- any financing
statements , deeds of trusts , continuation statements ,
record searches , opinions of counsel and other
instruments which the Trustee may reasonably require to
perfect or provide evidence of perfection of a first
and prior lien granted under the Deed of Trust and the
Trust Indenture against any other property financed
with such requisition or any subsequent requisition as
a part of the Project , and (z) a survey showing the
location of all property described in the Option
Contracts and an architect ' s certificate accompanying
such survey which describes all other property, if any,
that is reasonably necessary for the Project Site as
contemplated in the Project Description attached to the
Agreement as Exhibit A; this condition (v) shall be
deemed satisfied on the Performance Date if it has been
satisfied in full prior thereto or if on such Date the
condition will be fully satisfied against delivery of
the first disbursement by the Trustee;
(vi) On or before the Performance Date, the User
shall deliver to the Trustee plans and specifications
for the Project and all insurance policies required by
the Agreement , the Deed of Trust and this Bond
Resolution;
(vii) On or before the Performance Date, the Bond
Counsel shall have given written notice to the Trustee
to the effect that no further certificates , statements
or information are required of the User, the Unit or
the Corporation with respect to the Project or the
facts and circumstances relating to the non-taxability
of interest on the Bonds ; and
(viii) On or before the Performance Date, the Bond
Counsel shall have given to the Trustee an opinion that
the execution and delivery by the User of supplemental
deeds of trust and security agreements covering the
Trust Estate and the property described in (v) above
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concurrently with or subsequent to the acquisition by
the User of legal title to the Trust Estate do not
impair the non-taxability of interest on the Bonds .
The Trustee may but shall not be obligated to waive,
amend or modify any of the foregoing conditions with the
approval of the holders of not less than 75% of the
principal amount of the Bonds then outstanding.
(d) Reliance by Trustee. The Trustee shall rely
fully on any request and certificate delivered pursuant to
this Section and shall not be required to make any
investigation in connection therewith. The Trustee may
request from time to time, and the User shall furnish,
supporting documentation for any amounts requested under
Section 15 (b) (ii) . If amounts paid by the Trustee with
respect to any. portion of the Project should exceed the cost
thereof, the User shall promptly repay such overpayment into
the Construction Fund.
Section 16 . SURPLUS CONSTRUCTION FUNDS .
(a) Disposition 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 and delivered as provided in the
Agreement . If, upon the completion of the Project , there
shall be any surplus funds remaining in the Construction
Fund not required to provide for the payment of the Cost of
the Project , or if any funds are on hand in the Construction
Fund at the time of the release of the Trust Indenture under
the terms thereof, then any such funds shall be used
immediately to prepay or redeem principal installments of
the Bonds , in inverse chronological order, in the manner set
forth in Section 5 hereof for the prepayment or redemption
of principal installments of the Bonds with surplus
Construction Fund moneys , to the extent of any such
available funds ; provided that prior to such use, the
Corporation and the Trustee shall have been furnished with
an unqualified opinion of Bond Counsel to the effect that
the use of moneys from the Construction Fund for such
purpose will be lawful and will not impair the exemption of
interest on the Bonds from federal income taxation; and
provided further that the User shall deposit into the
Construction Fund prior to such prepayment or redemption an
amount sufficient to cause the total amount in the
Construction Fund to be equal to (i) an integral multiple of
$1, 000 , or (ii) not less than all of the unpaid principal
installment or installments to be prepaid or redeemed.
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(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
specified in the Trust Indenture, or if the Bonds are
optionally or mandatorily prepaid or redeemed prior to
maturity as a whole in accordance with their terms , any
amounts remaining in the Construction Fund shall be used
immediately by the Trustee for the purpose of paying
principal of, redemption premium, if any, agreed liquidated
damages , if any, and interest on the Bonds when due.
Section 17 . DAMAGED, MUTILATED, LOST. STOLEN, OR
DESTROYED BONDS .
(a) Replacement Bonds . In the event any of the
outstanding Bonds authorized hereby are damaged, mutilated,
lost , stolen, or destroyed, the Corporation 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 Corporation.
In every case, the applicant for a substitute Bond shall
furnish to the Corporation 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 Corporation and to the Trustee evidence to
their satisfaction of the loss , theft , or destruction, and
of the ownership of the lost Bond. In every case of damage
or mutilation of a Bond, the applicant shall surrender the
Bond so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the
foregoing provisions of this Section, in the event any such
Bond shall have matured, and no default has occurred which
is then continuing in the payment of the principal of,
redemption premium, if any, agreed liquidated damages , if
any, or interest on the Bond, the Corporation 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.
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(d) Charge for Issuing Substitute Bonds . Prior to
the issuance of any substitute Bond, the Corporation and the
Trustee may charge the owner of such Bond with all legal,
printing, and other expenses in connection therewith. Every
substitute Bond issued pursuant to the provisions of this
Section by virtue of the fact that any Bond is lost , stolen,
or destroyed shall constitute a contractual obligation of
the Corporation 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 Bond Resolution equally and
proportionately with any and all other Bonds duly issued
under this Bond Resolution.
(e) Authority for Issuing Substitute Bonds . This
Bond Resolution shall constitute sufficient authority for
the issuance of any such substitute bonds without necessity
of further action by the Board of Directors of the
Corporation or any other body or person, and the issuance of
such substituted Bonds is hereby authorized, notwithstanding
any other provisions of this Bond Resolution, except to the
extent otherwise required by law.
Section 18 . NO ARBITRAGE. The Corporation and the
User have covenanted to and with the purchasers of the Bonds
that they will make no use of the direct or indirect
proceeds thereof at any time throughout the term thereof
which would cause the Bonds to be arbitrage bonds within the
meaning of Section 103 (c) of the Code or any Regulations or
rulings pertaining thereto ; and by this covenant the
Corporation and the User are obligated to comply with the
requirements of the aforesaid Section 103 (c) and all
applicable and pertinent Regulations relating to arbitrage
bonds .
THIS RESOLUTION PASSED and APPROVED this 23rd day . of
December, 1982 , but effective as of December 1 , 1982 .
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