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Home My WebLink AboutRES 83-215 eo- �s RESOLUTION APPROVING THE ISSUANCE OF BEAUMONT HOUSING FINANCE CORPORATION " $350 , 000 MULTI-FAMILY HOUSING REVENUE BONDS, SERIES 1983-A (VIRGINIA VILLAGE DEVELOPMENT) WHEREAS , by a duly adopted resolution of the City Council (the "Governing Body") of the City of Beaumont , Texas (the "City") , the Governing Body authorized and approved the creation of the Beaumont Housing Finance Corporation (the "Corporation") pursuant to the Texas Housing Finance Corporations Act , Article 12691-7 , Vernon' s Annotated Texas Civil Statutes , as amended (the "Act") ; and WHEREAS , the Corporation has been duly and properly created and organized as a housing finance corporation under the Act; and WHEREAS, the Act authorizes the Corporation to (i) lend money for corporate purposes , (ii) issue revenue bonds for the purpose of providing financing for, and to defray in whole or part, the development costs of residential developments located within the City, and intended to be occupied substantially (at least 90 percent) by persons of low and moderate income , as determined in Rules and Regulations adopted by the Board of Directors of the Corporation, and (iii) rent , lease , sell or otherwise dispose of such residential developments , or loan the proceeds of such revenue bonds to any person to defray, in whole or in part , the development costs of any residential development; and WHEREAS, the definition of "residential development" in the Act includes the acquisition, construction, reconstruc- tion, rehabilitation, repair, alteration, improvement, or extension of any land, interest in land, building, structure, facility, system, fixture, improvement , addition, appurte- nance , machinery, or equipment or any combination thereof, all real and personal property deemed necessary in connection therewith, and all real and personal property or improvements functionally related and subordinate thereto, substantially (at least 90 percent) for use by or intended to be occupied substantially (at least 90 percent) by persons of low and moderate income , as determined in Rules and Regulations adopted by the Board of Directors of the Corporation; and WHEREAS , the definition of "development costs" in the Act includes the sum total of all reasonable or necessary costs incidental to the providing, acquisition, construction, reconstruction, rehabilitation, repair, alteration, improvement , and extension of a residential development , including, without limitation, the following: the cost of studies and surveys ; plans and specifications ; architectural and engineering services ; financial advisory, mortgage banking and administrative services ; underwriting fees ; legal , accounting, marketing, and other special services relating to residential development or incurred in connection with the issuance and sale of bonds ; necessary application and other fees to federal , state , and local government agencies for any requisite approvals for construction, for assisted financing or otherwise; financing, acquisition, demolition, constrution, equipment, and site development of new and rehabilitated buildings ; the relocation of utilities , public ways , and parks; the construction of recreational, cultural , and commercial facilities ; rehabilitation, reconstruction, repair, or remodeling of existing buildings and all other necessary and incidental expenses , including trustee and rating agency fees and an initial bond and interest reserve together with interest on bonds issued to finance a residential development to a date 12 months subsequent to the estimated date of completion; any premiums for mortgage insurance or insurance with respect to bonds ; and such other expenses as the Corporation may deem appropriate to effectuate the purposes of the Act; and WHEREAS , 'Section 103 (b) (4) (A) of the Internal Revenue Code of 1954 , as amended (the "Code") , provides that the interest on industrial development bonds (in the form of fully registered obligations) issued by or on behalf of a state or a political subdivision thereof as part of an issue substantially all (at least 90 percent) of the proceeds of which are to be used to provide projects for residential rental property shall be exempt from federal income taxation if at least 20 percent of the units in each project are to be occupied by individuals of low or moderate income , within the meaning of Section 103(b) (12) (C) of the Code, at all times during the qualified project period set forth in Section 103 (b) (12) (B) of the Code; and WHEREAS, the Act provides that the proceeds of revenue bonds issued pursuant to the Act may be used to defray, in whole or in part, the development costs of residential developments intended to be occupied substantially (at least 90 percent) by persons of low and moderate income whose adjusted gross income , together with the adjusted gross income of all persons who intend to reside with such persons in one dwelling unit , did not , for the immediately preceding -2- taxable year, exceed the maximum amount established as constituting moderate income in Rules and Regulations adopted by the Board of Directors of the Corporation; and WHEREAS , on March 1 , 1983 , the City adopted a RESOLUTION APPROVING THE ISSUANCE OF BEAUMONT HOUSING FINANCE CORPORA- TION $1 , 600 , 000 MULTI-FAMILY HOUSING REVENUE BONDS, SERIES 1983 (VIRGINIA VILLAGE DEVELOPMENT) (the "Series 1983 Bonds") , and in accordance with that resolution the Corpora- tion issued the Series 1983 Bonds in order to finance a portion of the cost of a multi-family rental residential development (the "Development") which is owned by Virginia Village Venture, a Texas joint venture (the "Owner") , and which is located at 4365 South 4th Street in the City of Beaumont, Texas , and which was scheduled to consist of approximately 138 dwelling units situated within the City on the real estate described in Exhibit "A" hereto; and WHEREAS , on May 9 , 1983 , the Corporation duly adopted a RESOLUTION DECLARING INTENT TO ISSUE BONDS TO PROVIDE FINANCING FOR A RESIDENTIAL DEVELOPMENT FOR PERSONS OF LOW AND MODERATE INCOME (VIRGINIA VILLAGE DEVELOPMENT) ; PRESCRIBING CERTAIN TERMS AND CONDITIONS OF SUCH BONDS; AND CONTAINING OTHER PROVISIONS RELATING TO THE SUBJECT, a copy of which is attached hereto as Exhibit "B" , wherein it is proposed that the Corporation issue its revenue bonds for the purpose of providing tax exempt financing for a supplement to the Development (the "Supplemental Development") , consisting of (i) completion of the renovation of 18 units in the Development and (ii) the construction of 12 additional units , and located on the same site and at the same address within the City as the Development; and wherein the Corporation has indicated its intent to issue its Multi-Family Housing Revenue Bonds , Series 1983-A (Virginia Village Development) (the "Series 1983-A Bonds") , in the approximate aggregate principal amount of $350 , 000 to defray, in whole or in part, certain development costs incurred or paid by the Owner with respect to the Supplemental Development, subject to the consummation of certain contractual agreements between the Corporation and the Owner and the satisfaction of other conditions set forth in said Resolution; and WHEREAS , the Owner has indicated its willingness to enter into contractual agreements with the Corporation providing assurance satisfactory to the Corporation that at least 90 percent of the dwelling units comprising the Supplemental Development will be occupied at all times by persons of low and moderate income, as determined in accordance with the Rules and Regulations adopted by the -3- ��-a is Board of Directors of the Corporation, that the Supplemental Development will serve or be available for general public use in accordance with Treas . Reg. 1. 103-8 (a) (2) and shall be used otherwise than on a transient basis (within the meaning of the Code and the Regulations promulgated thereunder) , and that substantially all (at least 92 percent) of the proceeds of the issuance of the Series 1983-A Bonds will be used to provide projects for residential rental property, at least 20 percent of which project units will be occupied (or held vacant and available for occupancy) by individuals of low or moderate income within the meaning of Section 103 (b) (12) (c) of the Code at all times during the qualified project period set forth in Section 103(b) (12) (B) of the Code; and WHEREAS , the Corporation proposes to adopt substantially in the form attached as Exhibit "C" a RESOLUTION AUTHORIZING THE ISSUANCE OF BEAUMONT HOUSING FINANCE CORPORATION $350 , 000 MULTI-FAMILY HOUSING REVENUE BONDS , SERIES 1983-A (VIRGINIA VILLAGE DEVELOPMENT) , THE EXECUTION OF OTHER RELATED DOCUMENTS , AND ADOPTION OF CERTAIN RULES AND REGULATIONS, wherein the Corporation proposes to approve the Supplemental . Development and authorize and direct the issuance of the Series . 1983-A Bonds to finance and defray, in whole or in part, the development costs of the Supplemental Development , in accordance with the terms , conditions and provisions of such Resolution; and WHEREAS, the Governing Body has determined that the issuance of the Series 1983-A Bonds and the approval of the Supplemental Development will further the public purposes of the Act , and desires to approve and authorize the proposed Supplemental Development and the issuance of the Series 1983-A Bonds by the Corporation to finance and defray, in whole or in part, certain development costs of the Supplemental Development; and WHEREAS, as a prerequisite to the exemption from federal income tax of interest on obligations issued pursuant to Sectin 103(b) (4) (A) of the Code, Section 103(k) of the Code provides that such issue must be approved by the applicable elected representative of the governmental unit on whose behalf such obligations are issued and each governmental jurisdiction over the area in which any facility to be financed from the proceeds of such issue is located (except that if more than one governmental unit has jurisdiction over the entire area in which such facility is located, only one governmental unit need approve the issue) , only after a public hearing has been held; and -4- e WHEREAS , the City is a "governmental unit" within the meaning of the Code; and WHEREAS , as the elected legislative body of the governmental unit within which the entire Development and Supplemental Development are located, the Governing Body is an "applicable elected representative" of the governmental unit with specific authority within the meaning of Section 103(k) of the Code; and WHEREAS, the facilities comprising the Supplemental Development are lcoated entirely within the geographic jurisdiction of the City, thus necessitating only one public hearing and approval pursuant to Section 103 (k) of the Code; and WHEREAS , in compliance with Section 103(k) of the Code, and the Open Meetings Law, as amended, Article 6252-17 , Vernon' s Annotated Texas Civil Statutes , notice in writing of a public hearing to approve issuance of the Bonds has been published in a newspaper of general circulation in the City on May 10 , 17 and 24 , 1983 , and written notice has also been posted continuously at City Hall since June 3 , 1983 , and pursuant to such notice , the Governing Body has this day held a public hearing for the purpose of considering the authorization and approval of the proposed Supplemental Development and the issuance of the Series 1983-A Bonds; and WHEREAS , this public hearing has been conducted in order to provide an opportunity for persons with differing views on both the authorization and issuance of the Series 1983-A Bonds and the location and nature of the Supplemental Development to be heard, and in order to comply with Section 103 (k) of the Code' and the Act; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF BEAUMONT, TEXAS: Section 1 . The Governing Body hereby finds , determines , recites and declares that the issuance of the Series 1983-A Bonds to provide tax exempt financing for the proposed Supplemental Development, and the approval of the proposed Supplemental Development, is in furtherance of and will promote the public purposes of the Act , including, without limitation, assisting persons of low and moderate income to obtain decent , safe and sanitary housing at rentals they can afford. -5- C Section 2. The Governing Body, as the elected legislative dy of the City, and for the purposes of complying with the terms and provisions of Section 103(b) (4) (A) and 103 (k) of the Code and the Act, does hereby approve , ratify, adopt and confirm the Resolutions of the Corporation, in substantially the forms attached hereto as Exhibits "B" and "C"; and does hereby approve and authorize the Supplemental Development contemplated in such Resolutions and the issuance of the Series 1983-A Bonds by the Corporation in the amount and for the purposes therein expressed, including, without limitation, the financing of development costs in connection with the proposed Supplemental Development. Section 3 . The Governing Body has considered evidence oT t ie publication and posting of notice of this meeting and public hearing and officially finds , determines , recites , and declares that a sufficient written and reasonable public notice of the date, hour and place of this meeting and public hearing and of the subject matter of this Resolution, was published in a newspaper of general circulation in the City not less than fourteen (14) days prior to this meeting and public hearing, and thereafter weekly, and was also posted on a bulletin board at a place convenient to the public in the City Hall of the Governmental Unit (within the meaning of Section 103 of the Code) not less than seventy-two (72) hours preceding the convening of this meeting and public hearing; that such place of posting was readily accessible to the general public at all times from the time of posting until the convening of such meeting and public hearing; that such meeting and public hearing was open 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; that the giving of notice in the manner provided above was reasonably designed to apprise residents of the City of the proposed authorization and issuance of `the Series 1983-A Bonds and approval of the Supplemental Development; that the meeting and public hearing was conducted in a manner that provided a reasonable opportunity for persons with differing views on the issuance of the Series 1983-A Bonds and the nature and location of the Supplemental Development facilities to be heard; and that this meeting and public hearing was held at a time and place convenient for persons affected by the financing of the Supplemental Development and issuance of the Series 1983-A Bonds ; and that the foregoing notice and hearing complied with the Open Meetings Law, as amended, Article 6252-17 , Vernon' s Annotated Texas Civil Statutes , and Section 103 (k) of the Code. -6- PASSED, ADOPTED AND APPROVED THIS 7th DAY OF JUNE, 1983. l Mayor -7- EXHIBIT "A" DESCRIPTION OF THE REAL ESTATE BEING an 11. 41 acre tract of land out of the M. C. Cartwright Subdivision in the J. W. Bullock League, Abstract No. 7 in Beaumont, Jefferson County, Texas and being that same tract of land described in Deed of Trust between Lincoln Housing Corporation and Leonard Quinn, Trustee , dated May 16 , 1960 , and recorded in Vol. 977 , Page 213 of the Deed Records of Jefferson County, Texas , and said 11. 41 acre tract of land being more particularly described by metes and bounds as follows : BEGINNING at a 5/8 inch steel rod placed in the South right of way line of Booker Street and in the East right of way line of 4th Street locating the Northwest corner of that certain tract of land described in Deed of Trust from said Lincoln Housing Corporation and from said steel rod the Northwest corner of the South 6 acres of Lot 37 of the M. C. Cartwright Subdivision bears north a distance of 20 . 0 feet and said steel rod also locates the Northwest - and the beginning corner of the tract of land herein described; THENCE South 89 degrees 59 minutes 40 seconds East with the' South line of Booker Street a distance of 682.50 feet to a concrete monument found for corner; THENCE South 0 degrees 00 minutes 20 seconds West with the West line of Pradice Street a distance of 932. 83 feet to a concrete monument found for corner in the North right of way line of Virginia Street; THENCE West with said line a distance of 196 . 17 feet to a 5/8 inch steel rod placed for corner; said steel rod also locates the Eastmost corner of Lincoln Terrace' Third Addition, a subdivision to the City of Beaumont, Jefferson County, Texas , that is recorded in Vol 9 , Page 37 of the Map Records of Jefferson County, Texas; THENCE North 40 degrees 15 minutes 20 seconds West with the Northeasterly line of Lots 9 through 1 of said Lincoln Terrace Third Addition and with the Northeasterly line of that certain tract of land conveyed by C. W. DuPerior to the Magnolia Pipeline Company for a pipeline easement that is recorded in Vol. 996 , Page 633 of the Deed Records of Jefferson County, Texas , a distance of 752. 97 feet to a 1/2 inch iron rod found for corner in the East right of way line of 4th Street; THENCE North 0 degrees 01 minutes 40 seconds East with the East line of 4th Street a distance of 358 . 32 feet to the PLACE OF BEGINNING, containing 11. 41 acres of land, more or less . -2- ', EXHIBIT B RESOLUTION DECLARING INTENT TO ISSUE BONDS TO PROVIDE FINANCING FOR A RESIDENTIAL DEVELOPMENT FOR PERSONS OF LOW AND MODERATE INCOME (VIRGINIA VILLAGE DEVELOPMENT) ; PRESCRIBING CERTAIN TERMS AND CONDITIONS OF SUCH BONDS; AND CONTAINING OTHER PROVISIONS RELATING TO THE SUBJECT WHEREAS , Beaumont Housing Finance Corporation (the "Corporation") has been duly and properly created and organized under the Texas Housing Finance Corporations Act , Article 12691-7 , Vernon' s Annotated Texas Civil Statutes , as amended (the "Act") ; and WHEREAS , the Act authorizes the Corporation to issue revenue bonds for the purpose of providing financing for residential developments located within Beaumont, Texas (the "City") , and intended '',to be occupied substantially (at least 90 percent) by persons of low and moderate income, as determined by the Board of Directors of the Corporation; and WHEREAS, Section ''103 (b) (4) (A) of the Internal Revenue Code of 1954 , as amended (the "Code") , provides that the interest on fully registered obligations issued by or on behalf of a state or' a political subdivision thereof substantially all of t!he proceeds of which are to be used to provide projects for residential rental property shall be exempt from federal income taxation if at least 20 percent of the units in each project are to be occupied by individuals of low or moderate income , within the meaning of Section 103 (b) (12) (C) lof the Code at all times during the qualified project period set forth in Section 103 (b) (12) (B) of the Code; and WHEREAS , it is proposed that the Corporation issue its revenue bonds for the purpose of providing financing for a multi-family rental residential development (the "Project") to be located within I,the City on the land described in Exhibit "A" attached hereto , and to be owned by Virginia Village Venture, a joint venture , or its permitted assigns (the "Owner") , with such financing to be used to pay (i) additional costs to be incurred in connection with the construction, reconstruction and rehabilitation of 138 units to comprise a part of the Project and (ii) costs to be incurred in connection' with the construction, reconstruction and rehabilitation of an additional 12 units to comprise -a part of the Project; and kvco: / P WHEREAS, the Owner has indicated its willingness to enter into contractual arrangements with the Corporation providing assurance satisfactory to the Corporation that at least 90 percent of the Project units will be occupied at all times by persons of low and moderate income, as determined by the Board of Directors of the Corporation, and that at least 20 percent of the Project units will be occupied (or held vacant and available for occupancy) by individuals of low or moderate income within the meaning of Section 103 (b) (12) (C) of the Code at all times during the qualified project period set forth in Section 103 (b) (12) (B) of the Code; and WHEREAS, the Board of Directors of the Corporation desires to take official action declaring the Corporation' s intent to issue revenue bonds to provide financing for the Project upon the terms and conditions hereinafter set forth; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF BEAUMONT HOUSING FINANCE CORPORATION: Section 1. That the Corporation hereby declares its intent to issue its Multi-Family Housing Revenue Bonds , Series 1983A (Virginia Village Development) (the "Bonds") , in the approximate aggregate principal amount of $350 , 000 , which amount is estimated to be sufficient (a) to fund a loan to provide financing for the acquisition, construction, equipping and furnishing of the Project as and to the extent described above; (b) to fund certain reserves for the benefit of the holders of the Bonds ; and (c) to pay certain costs incurred in connection with the issuance of the Bonds . Section 2 . That the Bonds shall be issuable as fully registered bonds in the denomination of $5 , 000 or any integral multiple thereof; shall bear interest at a rate or rates determined by the Corporation, which interest shall be payable on a monthly basis ; shall be payable in equal principal installments on a monthly basis ; and shall be subject to prior redemption upon such terms and conditions as may be established by the Corporation. Section 3 . That the Bonds shall be special , limited obligations of the Corporation payable solely from the revenues received by the Corporation from or in connection with its loan to provide financing for the Project and from such other amounts as may be obtained through the exercise of the remedies provided in the financing documents upon the occurrence of an event of default. -2- Section 4 . That the Board of Directors hereby finds, determines , recites and declares that the Bonds shall not constitute an indebtedness , liability, general, special or moral obligation or pledge or loan of the faith or credit or taxing power of the State of Texas , the City or any other political subdivision or municipal or political corporation or governmental unit , nor shall the bonds ever be deemed to be an obligation or agreement of any officer, director, agent or employee of the Corporation in his or her individual capacity, and none of such persons shall be subject to any personal liability by reason of issuance of the Bonds . Section 5 . That the issuance of the Bonds shall be subject to - (a) the execution by the Owner and the Corporation of contractual arrangements providing assurance satisfactory to the Corporation that at least 90 percent or the Project units will be occupied at all times by persons of low and moderate income as determined by the Board of Directors of the Corporation, and that at least 20 percent of the Project units will be occupied (or held vacant and available for occupancy) by individuals of low or moderate income within the meaning of Section 103(b) (12) (C) of the . Code at all times during the qualified project period set forth in Section 103 (b) (12) (B) of the Code; and (b) the receipt of a ruling from the Internal Revenue Service or an opinion from Orgain, Bell & Tucker, or other bond counsel , substantially to the effect that the interest on the Bonds is exempt from federal income taxation under existing statutes , regulations , published rulings and judicial decisions . Section 6 . That the Board of Directors of the Corporation hereby finds , determines , recites and declares that the issuance of the Bonds to provide financing for the Project will promote the public purposes set forth in Section 3 of the Act, including, without limitation, assisting persons of low and moderate income to obtain decent , safe and sanitary housing at rentals they can afford. Section 7 . That the Board of Directors hereby finds , determines , recites and declares the Corporation' s intent that this Resolution constitute an official action toward the issuance of the Bonds within the meaning of Section 1. 103-8 (a) (5) (iii) , Title 26 , Code of Federal - Regulations , as amended, and applicable rulings of the Internal Revenue Service thereunder, to the end that the Bonds may qualify for the exemption provisions of -3- Section 103 (b) (4) of the Code and that the interest on the Bonds will therefore be excludable from the gross incomes of the holders thereof under the provisions of Section 103(a) (1) of the Code. Section 8 . The Owner may, with the consent of the Corporation, transfer or assign any or all of its rights and delegate any or all of its duties hereunder to any other person or entity designated by the Owner, but no such transfer, assignment or delegation shall, without the written consent and approval of the Corporation, relieve the Owner of its liability for payment of costs as to which the Owner has agreed to indemnify the Corporation. /� PASSED AND APPROVED this day of 1983. Vi c e Pre d , Board of Directors ATTEST• Secretary (SEAL) -4- EXHIBIT "A" VIRGINIA VILLAGE DEVELOPMENT 11. 046 acres of land, more or less , out of Lots 37 and 38 , Cartwright Subdivision of the J. W. Bullock Survey as described in Vol. 977 , Page 213 , M&L Records of Jefferson County, Texas . -5- RESOLUTION AUTHORIZING THE ISSUANCE OF BEAUMONT HOUSING FINANCE CORPORATION $350 , 000 MULTI-FAMILY HOUSING REVENUE BONDS, SERIES 1983-A (VIRGINIA VILLAGE DEVELOPMENT) , THE EXECUTION 'OF OTHER RELATED DOCUMENTS , AND ADOPTION OF CERTAIN RULES AND REGULATIONS EXHIBIT C 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 SECTION 1 . APPROVAL OF TRANSACTION. . . . . . . . . . (a) Approval of the Series 1983-A Bonds . . . 5 (b) Approval ofSupplement No. 1 to Loan Agreement. . . . . . . 5 (c) Requirement as to Supplement No. 1 to Deed of Trust and Supplement No. 1 to Collateral Assignment. . . . . . . . . . 6 (d) Requirement as to Supplement No. 1 to Guarantee Agreement. . . 6 (e) Conditions Precedent to Closing of the Transaction. . . . . . . . . . . . . 6 (f) Approval of Sale of the Series 1983-A Bonds . . . . . . . . . . . 7 (g) Issuance Furthers the Purposes of the Act. . o 7 (h) Incorporation byReference. , . . . 8 (i) Additional Authorizations to Officers of the Corporation. . . . 8 (j ) Effective Date of the Series 1983-A Bond Resolution. . 8 (k) Defined Terms . . . . . . . . . . . . . . . . . . 8 SECTION 2. DATE, DENOMINATION, NUMBERS , AND MATURITIES OF THE SERIES 1983-A BONDS. . . . . . . . . . . . . . . . . . . . . . SECTION 3 . INTEREST ON THE SERIES 1983-A BONDS. 9 SECTION 4 . GENERAL CHARACTERISTICS OF THE SERIES 1983-A BONDS. . . . . . . . . . . . . 9 (1) (a) In General. . . . . . . . . . . . . . . . . 9 (b) Registration Books . . . . . . . 10 (c) Payment to Registered Holder. . . 10 (d) Notation of Prepayment. . . . . . . . . 11 SECTION 5 . FORM OF SERIES 1983-A BOND. . . . . . . . . . 11 SECTION 6 . PLEDGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 SECTION 7 . DEBT SERVICE FUND. . . . . . . . . . . . . . . . . . . 23 (a) Establishment of Debt Service Fund. . . 23 (b) AccruedInterest. 23 (c) Installment Loan Payments and Supplemental Installment Loan Payments . . . . . . . . . . . . . . . . . 23 (d) Redemption. . . . . . . . . . . . . . . 25 (e) Payments from Debt Service Fund. . . . 25 (f) Immediately AvailableFunds . . . . 25 (g) Investment of Funds . . . . . . . . . . . . 25 SECTION 8 . SECURITY FOR FUNDS. . . . . . . . . . . . . . . . . . 26 SECTION 9 . THE OWNER' S PAYMENTS . . . . . . . . . .. . . . . . 27 (a) Limitations On Owner ' s Obligation. . . . . . . . . . . . . . . . . . . . . 27 (b) Prepayments . . . . . . . . . . . . . . . . . . . . 27 SECTION 10 . ADDITIONAL PARITY BONDS. . . . . . . . . . . . . 28 (a) Additional Bonds . . . . . . 28 (b) Amendments to Trust Indenture Unnecessary. . . . . . . . . . . . . . . . . . . . 29 SECTION 11. SPECIAL COVENANTS . . . . . . . . . . . . . . . . . . . 29 (a) Installment Loan. Payments and Supplemental Installment Loan Payments Pledged to Series 1983 Bonds and Series 1983-A Bonds Only. . . . . . . 30 (b) Non-Encumbrance. 30 (c) Performance by Corporation. . . . . 30 (d) Certain Modifications Prohibited. . . . . . . . . . . . . . . . . . . . . 30 (2) SECTION 12 . THE SERIES 1983-A BONDS ARE SPECIAL OBLIGATIONS. . . . . . . . . . . . . . . . . 31 SECTION 13 . AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 31 (a) Amendment with Consent of Holders of 75% of the Series 1983 Bonds and the Series 1983-A Bonds . . . . . . . . . . . . 31 (b) Notice of Amendment. . . . . . . . . . . . 32 (c) Consent to Amendment . . . . . . . . . . . 33 (d) Effect of Amendment. . . . . . . . 33 (e) Consent of the Series 1983 Bondholders and the Series 1983-A Bondholders . . . . . . . . . 33 (f) Ownership of the Series 1983 Bonds and the Series 1983-A Bonds . . . . . . . . . . . . . . . . . 34 (g) Amendments Without Consent. . . . . 34 (h) Special Exception. . . . . . . . . . . . . . 34 SECTION 14 . ESTABLISHMENT OF CONSTRUCTION FUND. . 35 (a) Deposit of the Series 1983-A Bond Proceeds into Construction Fund. . . 35 (b) Investment of Money in Construction Fund. . . . . . . . . . . . 35 (c) Deposit of Accrued Interest , Income , and Profits . . . . . . . . . . . . 36 SECTION 15 . PAYMENTS FROM CONSTRUCTION FUND. . . . . 36 (a) Corporation' s Administrative Overhead Expenses and Other Costs . . . . . . . . 36 (b) Reimbursement for and of Cost of the Supplemental Development. . . . . . . . . . . . . . . . . . . . 36 (c) Reliance by Trustee. . . . . . . . . . . . 37 SECTION 16 . SURPLUS CONSTRUCTION FUNDS. . . . . . . . . . 38 (a) Disposition of Surplus Funds. . . . . . . 38 (b) Disposition ofConstruction Fund upon Acceleration and Redemption. . . . . . . . . . . . . . . . . . . . . 38 (3) SECTION 17 . DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED SERIES 1983-A BONDS. . . . 39 (a) Replacement Series 1983-A Bonds . 39 (b) Application�for•Substitute Series 1983-A Bonds. . . . . . . . . . . . 39 (c) No Default Occurred. . . . . . . . . . . 39 (d) Charge for Issuing Substitute Series 1983-A Bonds . . . . . . . . . . . . 39 (e) Authority for Issuing Series 1983-A Substitute Bonds . 40 SECTION 18. NO ARBITRAGE. . . . . . . . . . . . . . . . . . . . . . . . 40 SECTION 19 . ADOPTION OF RULES AND REGULATIONS AS TO LOW AND MODERATE INCOME LEVELS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 EXHIBITS A Supplement No. 1 to Loan Agreement B Supplement No. 1 to Deed of Trust , Assignment of Rents and Security Agreement C Supplement No. 1 to Collateral Assignment and Security Agreement D Supplement No. 1 to Guarantee Agreement E Letter of Representation F Investment Letter (4) RESOLUTION AUTHORIZING THE ISSUANCE OF BEAUMONT HOUSING FINANCE CORPORATION MULTI-FAMILY HOUSING REVENUE BONDS , SERIES 1983-A (VIRGINIA VILLAGE DEVELOPMENT) , THE EXECUTION OF OTHER RELATED DOCUMENTS AND ADOPTION OF CERTAIN RULES AND REGULATIONS WHEREAS , Beaumont Housing Finance Corporation (the "Corporation") has been duly created and organized pursuant to and in accordance with the provisions of the Texas Housing Finance Corporations Act , Article 12691-7 , Vernon' s Annotated Texas Civil Statutes , as amended (the "Act") ; and WHEREAS, the Act authorizes the Corporation to issue revenue bonds for the purposes of providing financing for and to loan sufficient funds to any person to defray in whole or in part the development costs of residential developments located within the City of Beaumont, Texas (the "City") , and intended to be occupied substantially (at least 90%) by persons of low and moderate income as determined in Rules and Regulations adopted by the Board of Directors of the Corporation (the "Board") ; and WHEREAS , Section 103 (b) (4) (A) of the Internal Revenue Code of 1954 , as amended (the "Code") , provides that the interest on fully registered obligations issued by or on behalf of a state or a political subdivision thereof, substantially all of the proceeds of which obligations are to be used to provide projects for residential rental property, shall be exempt from federal income taxation if at least 20 percent of the dwelling units in each project are to be occupied by individuals of low or moderate income, within the meaning of Section 103 (b) (12) (C) of the Code at all times during the qualified project period set forth in Section 103 (b) (12) (B) of the Code; and WHEREAS , pursuant to the Act , a Bond Resolution adopted by the Corporation on March 2 , 1983 (the "Series 1983 Bond Resolution") , and a Trust Indenture dated as of March 1 , 1983 (the "Trust Indenture") , the Corporation issued a series of multi-family housing revenue bonds designated as Beaumont Housing Finance Corporation $1 ,600 , 000 Multi-Family Housing Revenue Bonds , Series 1983 (Virginia Village Development) , dated as of March 1 , 1983 (the "Series 1983 Bonds") , in order to finance a portion of the cost of a multi-family residential development owned by Virginia Village Venture (the "Owner") and consisting of approximately 138 dwelling units located on the real property within the City that is described in Exhibit "A" to the hereinafter described Loan Agreement; and WHEREAS, pursuant to a Loan Agreement dated as of March 1 , 1983 (the "Agreement") , the Corporation loaned the proceeds from the sale of the Series 1983 Bonds to the Owner in order to finance a portion of the cost of the Virginia Village Development; and WHEREAS , to evidence the loan, the Owner duly executed its promissory note dated as of March 1 , 1983 , and payable to the order of the Corporation in the principal amount of $1 , 600 , 000 (the "Promissory Note") ; and WHEREAS, as security for the payment of the loan and the Promissory Note , the Owner executed a Deed of Trust , Assignment of Rents and Security Agreement to Donald W. Cioban as Mortgage Trustee , dated as of March 1 , 1983 (the "Deed of Trust") ; and WHEREAS, in order to secure payment of the Series 1983 Bonds the Corporation duly assigned all of its right , title and interest in and to the Promissory Note and the Deed of Trust to InterFirst Bank-Beaumont , as Trustee (the "Trustee") , by Collateral Assignment and Security Agreement dated as of March 1 , 1983 (the "Collateral Assignment") ; and WHEREAS, as additional security for the Series 1983 Bonds , C. L. Sherman, Jr. , James J. Conway, Jr. , Wayne D. Sherman, Robert G. Quinn, J. D. Martin III , A. S . Crawford, and F. L. Stanley,--personally guaranteed the Series 1983 Bonds by execution of a Guarantee Agreement with the Trustee dated as of March 1 , 1983 (the "Guarantee Agreement") ; and WHEREAS , Section 10 of the Series 1983 Bond Resolution authorizes the issuance of additional parity bonds upon satisfaction of certain requirements', including obtaining the consent of the holders of at least 75% of the aggregate principal amount of the Series 1983 Bonds then outstanding; and WHEREAS , the Owner proposes to incur additional cost in connection with a supplement to the Virginia Village Development consisting of (i) completion of the reconstruc- tion and rehabilitation of 18 units comprising a part of the Virginia Village Development and (ii) construction of an additional 12 units (the "Supplemental Development") ; and -2- WHEREAS, the Board adopted a resolution on May 9 , 1983 (the "Inducement Resolution") , whereby in accordance with the provisions of the Act, the Corporation has agreed to issue its revenue bonds for the purpose of providing financing for the Supplemental Development; and WHEREAS , for purposes of financing the Supplemental Development, the Corporation now desires to (i) authorize the issuance of its Multi-Family Housing Revenue Bonds , Series 1983-A (Virginia Village Development) (the "Series 1983-A Bonds") , in the maximum aggregate principal amount of $350 ,000 , pursuant to the terms and provisions of the Trust Indenture , (ii) provide for the sale of the Series 1983-A Bonds to the purchasers described herein, (iii) provide for the payment of the principal of and premium, if any, and liquidated damages , if any, and interest on the Series 1983-A Bonds with revenues derived from the loan of proceeds of the sale of the Series 1983-A Bonds (except for any amount representing accrued interest on the Series 1983-A Bonds) to the Owner pursuant to the terms and provisions of a supplement to the Agreement , and (iv) take and authorize certain other actions in connection with the foregoing; and WHEREAS , on June 7 , 1983 , after a public hearing as required by and in compliance with Section 103(k) of the Code , the City adopted a written resolution specifically approving the Supplemental Development , the Inducement Resolution, this Series 1983-A Bond Resolution, and the issuance of the Series 1983-A Bonds ; and WHEREAS , pursuant to the terms of the Agreement as supplemented, the Owner has agreed and covenanted with the Corporation that (i) in accordance with the Act, at least 90 percent of the dwelling units in the Virginia Village Development and the Supplemental Development (collectively the "Development") will be occupied at all times by persons of low and moderate income, as determined in Rules and Regu- lations adopted by the Board on behalf of the Corporation, and (ii) in accordance with the Code , at least 20% of the dwelling units in the Development will be occupied (or held vacant and available for occupancy) by individuals of low or moderate income within the meaning of Section 103 (b) (12) (C) of the Code at all times during the qualified project period set forth in Section 103 (b) (1.2) (B) of the Code; and WHEREAS , by the terms of this Series 1983-A Bond Resolution the Board has found and determined under the Act and adopted as a part of the Rules and Regulations of the Corporation effective as of January 1, 1983 , that for -3- purposes of occupancy of dwelling units in the Development, a person of low or moderate income shall be a person whose adjusted gross income , together with the adjusted gross incomes of all persons who intend to reside with such person in one dwelling unit , did not exceed $40 ,000 . 00 for the calendar year 1982 ; and WHEREAS, pursuant to Section 8 of the United States Housing Act of 1937 , as amended (the "Housing Act") , the United States of America, acting through the Department of Housing and Urban Development ("HUD") , has entered into an Annual Contributions Contract dated as of September 28 , 1981 , as amended (the "Annual Contributions Contract") with the Housing Authority of the City of Beaumont, Texas (the "Authority") , providing for the payment of annual contributions by HUD to the Authority to be used to pay a portion of the rent of tenants who are eligible for such assistance under HUD regulations ; and WHEREAS , pursuant to the Annual Contributions Contract the Authority has executed with respect to the Development an Agreement to Enter into a Housing Assistance Payments Contract dated as of September 15 , 1982 (the "Section 8 Agreement") , providing for the execution of a Housing Assistance Payments Contract (the "Section 8 Contract") upon completion of the Development and its acceptance by HUD; and WHEREAS , the Board has examined proposed forms of a supplemental note, a supplement to the Agreement, a supplement to the Collateral Assignment , a letter of representation and an investment letter, all comprising a part of this Series 1983-A Bond Resolution, and the Board finds the form and substance of such documents to be satisfactory and that 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 herein, 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 supplement to the Guarantee Agreement pursuant to which C. L. Sherman, Jr. , James J. Conway, Jr. , Wayne D. Sherman, Robert G. Quinn, J. D. Martin III, A. S. Crawford and F. L. Stanley (the "Guarantors") agree on a proportionate basis to guarantee payment of the principal of and premium, if any, and liquidated damages , if any, and interest on the Series -4- )e4-3,et 1983-A Bonds , and the Board finds the form and substance of such document to be satisfactory and that the agreement of the Guarantors as contained therein constitutes a material inducement to the Corporation to issue and sell the Series 1983-A Bonds and in reliance thereon, the Board is willing to adopt this Series 1983-A Bond Resolution and authorize the actions to be taken hereunder; and WHEREAS , the Board has examined the proposed form of a supplement to the Deed of Trust , and the Board finds the form and substance of such document to be satisfactory; and WHEREAS , all of the requirements of the Series 1983 Bond Resolution to be met as a prerequisite to the issuance of the Series 1983-A Bonds have been or will be met no later than the date on which the Series 1983-A Bonds are delivered to the Purchasers thereof. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF BEAUMONT HOUSING FINANCE CORPORATION, THAT: Section 1. APPROVAL OF TRANSACTION. (a) Approval of the Series 1983-A Bonds . The Corpor- ation hereby authorizes and directs the issuance of the Series 1983-A Bonds in the maximum aggregate principal amount of $350 , 000 in accordance with the Trust Indenture , the form, terms and provisions of the Series 1983-A Bonds 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 Series 1983-A 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 conclusively evidenced by such execution thereof. (b) Approval of Supplement No. 1 to Loan Agreement. The loan of the proceeds of the sale of the Series 3-A Bonds (except for any amount representing accrued interest on the Series 1983-A Bonds) by the Corporation to the Owner in order to provide financing for the costs of the Supple- mental Development shall be effected pursuant to the terms and provisions of Supplement No. 1 to Loan Agreement substantially in the form attached as Exhibit "A" (the Loan Agreement as supplemented being sometimes hereinafter referred to as the "Agreement") , the form, terms and provisions of Supplement No. 1 to Loan Agreement being -5- hereby authorized and approved, and the President and any Vice President of the Corporation are hereby severally authorized and directed to execute and deliver Supplement No. 1 to Loan 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 the same may approve, such approval to be conclusively evidenced by such execution thereof. (c) Requirement as to Supplement No. 1 to Deed of Trust and Supplement No. 1 to Collateral Assignment. As a condition to t e actions authorize in this Section, the Owner shall have executed Supplement No. 1 to Deed of Trust, Assignment of Rents and Security Agreement substantially in the form attached as Exhibit "B" (the Deed of Trust as supplemented being sometimes hereinafter referred to as the "Deed of Trust") , the form, terms and provisions thereof being hereby authorized and approved. The assignment of the Corporation' s rights under Supplement No. 1 to Deed of Trust and the Supplemental Note (as defined therein) to the Trustee for the benefit of the holders of the Series 1983 Bonds and the Series 1983-A Bonds shall be effected pursuant to the terms and provisions of Supplement No. 1 to Collateral Assignment and Security Agreement substantially in the form attached as Exhibit "C" (the Collateral Assignment as supplemented being sometimes hereinafter referred to as the "Collateral Assignment") , the form, terms and provisions of thereof 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 Supplement No. 1 to 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 Supplement No. 1 to Guarantee Agreement. As a condition to the actions authorized in this Section, the Guarantors shall have executed Supplement No. 1 to Guarantee Agreement substantially in the form attached as Exhibit "D" , the form, terms and provisions thereof being hereby authorized and approved. (e) Conditions Precedent to Closing of the Transaction. The actions and obligations authorized in this Section shall -6- be subject to and conditioned upon the receipt by the Corp- oration at the Closing Date (as hereinafter defined) of (i) a letter of representation from the Owner and the Guarantors , duly authorized and executed by the Owner and the Guarantors , substantially in the form of the Letter of Representation dated the Closing Date (the "Letter of Repre- sentation") and attached hereto as Exhibit "E" , 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 count- erparts ; (ii) an investment letter, duly authorized and exe- cuted by the Purchasers (as hereinafter defined) , substan- tially in the form of the Investment Letter dated the Clos- ing Date (the "Investment Letter") and attached hereto as Exhibit "F" , the form, terms and provisions of such Invest- ment Letter being hereby authorized and approved; (iii) the purchase price for the Series 1983-A Bonds ; and (iv) 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 satisfac- tion by the Owner 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 Series 1983-A Bonds . The sale and delivery of the Series 1983-A 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 Series 1983-A Bonds until the date of delivery and payment for the Series 1983-A Bonds (the "Closing Date") : PURCHASER PRINCIPAL AMOUNT InterFirst Bank-Beaumont $ 130 , 000 Allied Bank Beaumont 130 , 000 Parkdale Bank 50 ,000 First City National Bank of Beaumont 40 ,000 (g) Issuance Furthers the Purposes of the Act. The Board of Directors of the Corporation here y finds , determines , recites and declares that the issuance of the -7- Series 1983-A Bonds on the terms and conditions set out in this Series 1983-A Bond Resolution so as to provide financing for the Supplemental Development is in furtherance of and will promote the public purposes set forth in Section 3 of the Act , including without limitation assisting persons of low and moderate income to obtain decent , safe and sanitary housing at rentals they can afford. (h) Incorporation by Reference. All of the terms and provisions of the documents attached as Exhibits A through F shall be and the same are hereby made a part of this Series 1983-A Bond Resolution. (i) Additional Authorizations to Officers of the Cor o- 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 Series 1983-A Bond Resolution and of the Series 1983-A Bonds to be issued hereunder, as well as the terms and provisions of the Agreement , the Supplemental Note , the Deed of Trust , the Letter of Representation, the Collateral Assignment and the Guarantee Agreement 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. (j ) Effective Date of the Series 1983-A Bond Resolution. This Series -A Bond Reso ution shall take effect ana be in full force and effect upon and after its passage. (k) Defined Terms . Unless otherwise indicated, all capitalize terms used herein shall have the meanings set forth in (i) this resolution and (ii) the documents which are incorporated herein pursuant to (h) above. This resolution is sometimes herein referred to as the "Series 1983-A Bond Resolution" or as the "Supplemental Bond Resolution". Section 2. DATE, DENOMINATION, NUMBERS , AND MATURITIES OF THE SERIES 1983-A BONDS. The Series -A Bon s -8- initially authorized hereby shall be dated June 1 , 1983 , shall be issued and delivered in the form of fully registered bonds , without coupons , payable in installments to the registered holders thereof, or registered assigns , all in the manner hereinafter provided, with the Series 1983-A Bonds to be initially payable to the Purchasers in monthly 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 InterFirst Bank-Beaumont $ 130 , 000 R-002 Allied Bank Beaumont 130 , 000 R-003 Parkdale Bank 50 , 000 R-004 First City National Bank of Beaumont 40 , 000 Section 3 . INTEREST ON THE SERIES 1983-A BONDS. The Series 1983-A Bonds initially authorized hereby slia 1 bear interest on the unpaid balance of the principal amount thereof from June 1 , 1983 , to the scheduled due date or to the date of prepayment or redemption of the principal installments of the Series 1983-A Bonds prior to the scheduled due date, 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 SERIES 1983-A BONDS. (a) In General. The Series 1983-A Bonds initially authorized ei rebysiall 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 Series 1983-A Bonds have been authorized to be issued by the Board but prior to the delivery of the Series 1983-A Bonds , the Trustee shall authenticate such Bonds by executing the Trustee ' s Certificate of Authentication appearing on the Series 1983-A Bonds as provided in Section 5 . In addition, on the date of delivery of the Series 1983-A Bonds to the initial Purchasers thereof, the Trustee shall fill in the -9- date of delivery of the Series 1983-A Bonds in the Delivery Certificate appearing on the Series 1983-A Bonds as provided in Section 5 . (b) Re i.stration Books . The Corporation shall keep or cause to b t at the principal corporate trust office of the Trustee books for the registration and transfer of Series 1983-A 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 regula- tions as the Corporation or the Registrar may prescribe; and the Registrar will register or transfer as herein provided any Series 1983-A Bonds upon presentation thereof at such office. The Corporation, the Owner and each Series 1983-A Bondholder shall have the right to inspect the Bond Regis- tration Books during the normal business hours of the Trustee. Registration of the Series 1983-A Bonds and ownership thereof may be transferred only on the Bond Registration Books upon surrender of the Series 1983-A Bond by the registered holder 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 holder or attorney. Upon such surrender for transfer of registration, the Registrar shall make notation of such transfer on the Series 1983-A Bonds in the Assignment section appearing thereon and in the Bond Registration Books . Such transfers of registration shall be made without charge to the holder of the Series 1983-A Bonds , but any taxes or other governmental charges required to be paid with respect to the same shall be paid by the Series 1983-A Bondholder requesting such transfer of registration, as a condition precedent to the exercise of such privilege. (c) PayMent to Re istered Holder. The person in whose name any the Series -A Bond shal be registered on the Bond Registration Books may be deemed and treated as the absolute holder thereof for all purposes of this Series 1983-A Bond Resolution and the Trust Indenture, whether or not the Series 1983-A Bond shall be overdue , and the Corporation, the Trustee , and the Owner 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 Series 1983-A Bond shall be made only to such registered holder thereof; but such registration may be changed as provided -10- herein. All such payments shall be valid and effectual to satisfy and discharge the liability upon any Series 1983-A Bond to the extent of the sum or sums so paid. (d) Notation of Prepayment . The Corporation hereby appoints t e Trustee as the Paying Agent for the Series 1983-A Bonds . Upon the prepayment or partial redemption of any Series 1983-A Bond, the Trustee , as Registrar and Paying Agent, shall note in the Prepayment Record appearing on the Series 1983-A Bond the amount of such prepayment or redemption, the date said payment was made and the remaining unpaid principal balance of the Series 1983-A 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 Series 1983-A Bonds when made on their respective due dates . Section 5 . FORM OF SERIES 1983-A BOND. The form of Series 1983-A Bond, together with the forms of the various certificates and forms to appear on the Series 1983-A Bonds , shall be substantially as follows , with necessary and appropriate variations , omissions , and insertions as permitted or required by this Series 1983-A Bond Resolution: -11- FORM OF SERIES 1983-A BOND NO. $ UNITED STATES OF- AMERICA STATE OF TEXAS BEAUMONT HOUSING FINANCE CORPORATION MULTI-FAMILY HOUSING REVENUE BONDS , SERIES 1983-A (VIRGINIA VILLAGE DEVELOPMENT) BEAUMONT HOUSING FINANCE CORPORATION (the "Corporation") , being duly created and organized as a housing finance corporation under the Texas Housing Finance Corporations Act , Article 12691-7 , Vernon' s Annotated Texas Civil Statutes , as amended (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. THIS BOND AND THE SERIES OF BONDS OF WHICH IT IS A PART HAVE BEEN ISSUED UNDER AND PURSUANT TO THE ACT, AND DO NOT CONSTITUTE AN INDEBTEDNESS OR OBLIGATION (LEGAL, GENERAL, SPECIAL, MORAL OR OTHERWISE) OF THE CITY OF BEAUMONT (OR ANY OTHER CITY, COUNTY, OR OTHER MUNICIPAL OR POLITICAL CORPORATION OR SUBDIVISION OF THE STATE OF TEXAS) OR OF THE STATE OF TEXAS , OR A LOAN OF CREDIT OF ANY OF THEM, WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISIONS. THIS BOND SHALL BE PAYABLE (i) in principal install- ments on the first day of each month in the 177-month period (the "Principal Payment Period") in the amounts shown below commencing on July 1 , 1983 and (ii) with interest thereon, from June 1 , 1983 , 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 princi- pal and, to the extent legally permissible , on overdue interest, with interest being payable on said unpaid princi- pal balance during the period from June 1, 1983 , until this Bond is fully paid, on the first day of each month commenc- ing July 1 , 1983 , in the amounts shown below (or in such other amounts as may be payable after any adjustment to the Bond Interest Rate as hereinafter provided) : -12- XeZK& , /_ THE TERM "BOND INTEREST RATE" shall mean the rate of 11%' per annum, computed on a 360 day basis , as adjusted pursuant to the provisions of the next following sentence. 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 InterFirst Bank-Beaumont (the "Trustee" , "Paying Agent" , and "Registrar" for this Bond) or its successor appointed under the Trust Indenture (hereinafter defined) , to the registered holder 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 holder, 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 June 1 , 1983 , authorized and issued in the aggregate principal amount of $350 , 000 pursuant to a resolution adopted by the Board of Directors of the Corporation (the "Series 1983-A Bond Resolution") on behalf of the City of Beaumont , Texas , all issued or to be issued under a trust indenture, dated as of March 1 , 1983 (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 Series 1983-A Bonds are issued in order to provide funds for the Corporation to lend to Virginia Village Venture, a Texas Joint Venture (the "Owner") , in order to finance the development costs of a supplement to Virginia Village Development (the "Supplemental Development" and the "Development" , respectively) . Payment' of the principal of, and premium if any, and liquidated damages , if any, and interest on this Bond has been unconditionally guaranteed on a proportionate -13- basis by C. L. Sherman, Jr. , James J. Conway, Jr. , Wayne D. Sherman, Robert G. Quinn, J. D. Martin III, A. S. Crawford, and F. L. Stanley (the "Guarantors") , pursuant to Supplement No. 1 to Guarantee Agreement dated as of June 1 , 1983 , between the Trustee and the Guarantors ("Supplement No. 1 to Guarantee Agreement") . The proceeds of the sale of the Series 1983-A Bonds will be loaned to the Owner on a limited recourse basis pursuant to Supplement No. 1 to Loan Agreement, dated as of June 1 , 1983 (the Loan Agreement as supplemented being sometimes hereinafter referred to as the "Agreement") , between the Corporation and the Owner, and the Owner' s obligations under Supplement No. 1 to Loan Agreement will be further evidenced by the Owner' s execution and issuance of a limited recourse note (the "Supplemental Note") which will be issued in an amount equal to the aggregate principal amount of the Series 1983-A Bonds . Contemporaneously with the execution of Supplement No. 1 to Loan Agreement , the Owner executed Supplement No. 1 to Deed of Trust, Assignment of Rents , and Security Agreement, dated as of June 1 , 1983 (the Deed of Trust as supplemented being sometimes hereinafter referred to as the "Deed of Trust") , pursuant to which the Owner bargained, sold, granted, conveyed, transferred, mortgaged, pledged and assigned to Donald W. Cioban, as mortgage trustee , for the use and benefit of the Corporation, and further granted to the Corporation a security interest in, the Supplemental Development and certain other properties , in order to secure the payment of the Installment Loan Payments and the Supplemental Installment Loan Payments (as defined in the Agreement) and the Supplemental Note , according to their tenor and effect, and certain other indebtedness of the Owner, and the performance and observance by the Owner of all of the covenants expressed or implied in the Deed of Trust , the Agreement , and the Supplemental Note; and the Corporation executed Supplement No. 1 to Collateral Assignment and Security Agreement, dated as of June 1 , 1983 (the Collateral Assignment as supplemented being sometimes hereinafter referred to as the "Collateral Assignment") , pursuant to which the Corporation conveyed, assigned, transferred and delivered and granted a security interest to the Trustee in the Supplemental 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 Supplemental Note , including its rights , titles and interests arising under the Deed of Trust, in order to secure payment of the Series 1983-A 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. -14- This Series 1983-A Bond and the series of which it is a part are issued on a parity basis with the Beaumont Housing Finance Corporation $1,600 , 000 Multi-Family Housing Revenue Bonds , Series 1983 (Virginia Village Development) (the "Series 1983 Bonds") , issued as of March 1, 1983 . The Series 1983-A Bonds and the Series 1983 Bonds are and shall each be equally and ratably secured by and entitled to the benefit of all rights , titles , interests , liens , privileges , claims , demands and equities arising under or in connection with 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 Evert 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 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 1% 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 holder of this Bond will be due as a -15- 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 holder 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 Supplement Development as provided and required by Section 16 of the Series 1983-A 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. 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 holder 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 holder of this Bond addressed to such holder 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 -16- 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 to the holder of this Bond. If such written notice of prepayment or redemption is given and if due provision for payment of the redemption price is made, all as provided above, the unpaid principal installments of 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 holder 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" and "Supplemental Installment Loan Payments" to be made or paid, or caused to be made or paid, to the Trustee , pursuant to the Series 1983 Bond Resolution, the Series 1983-A Bond Resolution, the Trust Indenture and the Agreement. The Owner, which is a joint venture organized and existing under the laws of the State of Texas , is -17- 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" and "Supplemental Installment Loan Payment" for deposit into the applicable Debt Service Fund created for the benefit of the Series 1983 Bonds and the Series 1983-A Bonds , in aggregate amounts sufficient to pay and redeem, and provide for the payment and redemption of, the principal of and interest on this Bond, and to pay all other amounts required by the Agreement , the Series 1983 Bond Resolution, the Series 1983-A Bond Resolution, and the Trust Indenture when due, subject to and as required by the provisions of the Agreement , the Series 1983 Bond Resolution, the Series 1983-A Bond Resolution, and the Trust Indenture. THIS BOND is secured by the Trust Indenture whereunder the "Installment Loan Payments" and the "Supplemental Installment Loan Payments" are pledged as collateral and the Trustee is custodian of the applicable Debt Service Fund and the Construction Fund, and is obligated to enforce the rights of the holder 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, the Supplemental Note and the Deed of Trust. Reference is hereby made to the Series 1983 Bond Resolution, the Series 1983-A 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 Owner, the Corporation, the Trustee , and the holder 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 Series 1983 Bond Resolution and the Series 1983-A Bond Resolution, and with the consent of the holders of at least 75% in aggregate principal amount of the Series 1983 Bonds , the Series 1983-A 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 applicable Debt Service Fund, and shall be payable -18- from and secured by a first lien on the pledge of "Installment Loan Payments" and "Supplemental Installment Loan Payments" pursuant to the Agreement and entitled to the benefits of and secured by the Trust Indenture, the Collateral Assignment 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 the other Series 1983-A Bonds , the Series 1983 Bonds , and all then outstanding Additional Bonds . THE CORPORATION also has reserved the right to amend the Series 1983-A Bond Resolution and the Trust Indenture, as provided therein; and under some (but not all) circumstances amendments thereto must be approved by the holders of 75% in aggregate principal amount of the Series 1983 Bonds and the Series 1983-A Bonds then outstanding and any Additional Bonds then outstanding. THE SERIES 1983-A BONDS AND any coupons appertaining thereto have been issued under and pursuant to the Act , and 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 , the Note and the Supplemental Note in the applicable Debt Service Fund established under the Trust Indenture , and in certain events out of amounts attributable to Series 1983-A Bond proceeds or amounts secured through exercise of the remedies provided in the Trust Indenture , the Deed of Trust, or the Collateral Assignment upon occurrence of an event of default thereunder, and do not constitute an indebtedness or obligation (legal , general , special , moral or otherwise) of the City of Beaumont (or any other city, county or other municipal or political corporation or subdivision of the State of Texas) or of the State of Texas , or a loan of credit of any of them, within the meaning of any constitutional or statutory provisions . 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 Series 1983-A 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 Series 1983-A Bonds . No recourse under this Bond shall be had against any past, present or future officer, director, agent, or representative of the Corporation or of the City of -19- xe Beaumont. The Series 1983-A 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 Series 1983-A Bond Resolution, the Trust Indenture and the Assignment provisions endorsed hereon. Such transfers shall be without expense to the holder hereof, but any taxes or other governmental charges required to be paid with respect to the same shall be paid by the holder requesting such transfer as a condition precedent to the exercise of such privilege. The registered holder of this Bond may be deemed and treated by the Corporation, the Trustee, and the Owner, as the absolute owner and holder 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 Owner 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. IN WITNESS WHEREOF, this Bond has been signed with the manual or facsimile signatures of the President or any Vice President and the Secretary of the Corporation, and the official seal of the Corporation affixed on this Bond. BEAUMONT HOUSING FINANCE ATTEST: CORPORATION Secretary y. Y President (CORPORATE SEAL) -20- FORM OF TRUSTEE' S CERTIFICATE OF AUTHENTICATION TRUSTEE' S CERTIFICATE OF AUTHENTICATION This Bond is one of the Series 1983-A Bonds initially issued under the provisions of the within mentioned Agreement , Series 1983-A Bond Resolution, and Trust Indenture. INTERFIRST BANK-BEAUMONT By: Its : Authorized Officer TRUSTEE FORM OF ASSIGNMENT ASSIGNMENT FOR VALUE RECEIVED, the registered owner and holder of this Bond last listed below sells , assigns , and transfers the within Bond to the Assignee last listed below, and hereby authorizes the transfer of this Bond on the Bond Registration Books of the Trustee. Such assignment shall not be effective until such Assignee presents this Bond to the Trustee for verification of such assignment and gives the Trustee its address to which payments shall be made and the Trustee makes notation of such Assignment below. DATE OF REGISTERED SIGNATURE ASSIGNMENT OWNER/HOLDER ASSIGNEE OF REGISTRAR -21- FORM OF DELIVERY CERTIFICATE DELIVERY CERTIFICATE THIS BOND was delivered to and paid for by the pur- chaser hereon on 1983 . INTERFIRST BANK-BEAUMONT By: Its : Authorized Officer Trustee 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 -22- Section 6 . PLEDGE. The Series 1983-A 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 and Supplemental Installment Loan Payments to be made or paid, or caused to be made or paid, to the Trustee by the Owner, pursuant and subject to the terms and provisions of this Series 1983-A Bond Resolution, the Series 1983 Bond Resolution, the Trust Indenture , and the Agreement; and such Installment Loan Payments and Supplemental Installment Loan Payments are further pledged irrevocably to the establishment and maintenance of the Debt Service Fund hereinafter created. The Series 1983-A '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 holders of the Series 1983-A Bonds and the Series 1983 Bonds pursuant to the Agreement and the Trust Indenture, and maintained as provided in the Series 1983-A Bond Resolution, the Series 1983 Bond Resolution, and the Trust Indenture, as long as any of such Bonds , or interest thereon, is outstanding and unpaid. (b) Accrued Interest. Immediately after the delivery of the Series 1983-A Bonds to the initial Purchasers thereof, all accrued interest, if any, received from the proceeds from the sale and delivery of the Series 1983-A Bonds shall be transferred by the Trustee into the Debt Service Fund. (c) Installment Loan Payments and Supplemental Installment Loan Pavments . Pursuant to the Agreement and t e Trust Indenture, the Owner shall make or pay, or cause to be made or paid, to the Trustee , which shall deposit into the applicable Debt Service Fund, Installment Loan Payments and Supplemental 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 Series 1983-A Bonds and the Series 1983 Bonds on each interest payment date; and -23- (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 Series 1983-A Bonds and the Series 1983 Bonds scheduled to be paid on each principal payment date; and (3) On or before any optional or mandatory prepayment or redemption date as permitted or required in 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 holders of the Series 1983-A Bonds and the Series 1983 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 Series 1983-A Bonds and the Series 1983 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 Series 1983-A Bonds and the Series 1983 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 Series 1983-A Bonds and the Series 1983 Bonds , as designated in Section 5 hereof, for paying or redeeming principal -24- installments of the Series 1983-A Bonds and the Series 1983 Bonds , and paying the interest thereon. In the event the Owner should fail to make, or cause to be made, any of the required Installment Loan Payments or Supplemental Installment Loan Payments set forth in this Section, each such required payment shall continue as an obligation of the Owner until fully paid, and the Owner agrees to pay the same to the Trustee , for the benefit of the holders of the Series 1983-A Bonds and the Series 1983 Bonds , with interest thereon, to the extent legally permissible , at the rate of 157 per annum, from the date any such payment was due until payment thereof. (d) Redemption. The Series 1983-A 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 t e Series 1983-A Bond Resolution, the Series 1983 Bond Resolution, or the Trust Indenture, the applicable 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 Series 1983-A Bonds and the Series 1983 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 applicable Debt Service Fund, the amounts required to pay or redeem the principal of and interest on the Series 1983-A Bonds and the Series 1983 Bonds when due, and the Trustee shall make all other payments as required by the Series 1983-A Bond Resolution, the Series 1983 Bond Resolution, and the Trust Indenture. (f) Immediately Available Funds . The Owner shall make all Installment Loan Payments and Supplemental 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 Series 1983-A Bonds , when due. (g) Investment of Funds . Any money held as part of the applicable 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 -25- D 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 applicable Debt Service Fund, and any losses on investments thereon shall be charged against the applicable Debt Service Fund. If at any time it shall become necessary that some or all of the investments made with the moneys from the applicable Debt Service Fund be redeemed or sold to raise moneys necessary to comply with the provisions of the Series 1983-A Bond Resolution, the Series 1983 Bond Resolution or the Trust Indenture , the Trustee shall , without further authorization, effect such redemption or sale, employing, in the case of a sale , any commercially reasonable method of effecting the same. The Trustee shall not be liable or responsible for any loss resulting from any such investment or resulting from the redemption or sale of any such investment as herein authorized, except that the Trustee shall be liable for (1) any loss resulting from its willful or negligent failure , within a reasonable time after receiving the written direction from the Approving Officer, to make, redeem, or sell any investment in the manner provided for herein, and (2) except for any redemption or sale made pursuant to the next preceding sentence of this paragraph, for any loss resulting from the making, 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 Owner shall make additional deposits to restore same if and to the extent required to enable the Trustee to make all payments required to be made from the applicable Debt Service Fund, and such additional deposits shall constitute additional amounts of Installment Loan Payments and Supplemental Installment Loan Payments . Section 8 . SECURITY FOR FUNDS. All uninvested money in all Funds estab is ed pursuant to this Series 1983-A Bond Resolution (including the Debt Service Fund and the Construction Fund) shall be secured by the Trustee in such -26- manner and to the extent as may be directed by the Approving Officer and approved by the Trustee. Section 9. THE OWNER' S PAYMENTS. (a) Limitations on Owner' s Obligation. The Owner has covenanted in the Agreement and the Trust Indenture, and, by approval of this Series 1983-A Bond Resolution, the Owner further has obligated itself and agreed on a limited recourse basis , regardless of and notwithstanding any pro- visions 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, recoup- ment, or counterclaim but on a limited recourse basis only, the Installment Loan Payments and the Supplemental Install- ment Loan Payments to the Trustee in the amounts required by Section 7 (c) of this Series 1983-A Bond Resolution and the Series 1983 Bond Resolution to be made into the applicable Debt Service Fund, and to make such payments on or before the dates specified in this Series 1983-A Bond Resolution, the Series 1983 Bond Resolution, and the Trust Indenture; and said payments by the Owner shall be and constitute the Installment Loan Payments and the Supplemental Installment Loan Payments as contemplated and required by the Agreement. Each Series 1983-A Bondholder is and shall be entitled to rely unconditionally on the agreements , covenants , and representations set forth in this Series 1983-A Bond Resolution, the Series 1983 Bond Resolution, and the Trust Indenture. (b) Prepayments . It is further understood that the Owner may prepay all or any part of each Installment Loan Payment or Supplemental 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 or Supplemental Installment Loan Payment; provided that the prepayment or redemption at any time of any unpaid principal installments of the Series 1983-A Bonds and the Series 1983 Bonds prior to their due dates , with funds from any source (whether from Installment Loan Payments , Supplemental Installment Loan Payments , or otherwise) , shall not relieve the Owner of its obligation to make or pay, or cause to be made or paid, each Installment Loan Payment and Supplemental Installment Loan Payment as specified in Section 9 (a) above , when due with respect to any remaining unpaid principal installments of the Series 1983-A Bonds or the Series 1983 Bonds . -27- Section 10. ADDITIONAL PARITY BONDS. (a) Additional Bonds . The Corporation reserves the right , upon the request of the Owner but only with the consent of the holders of at least 75% in aggregate principal amount of the Series 1983-A Bonds , the Series 1983 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 Series 1983 Bonds and the Series 1983-A Bonds . Such Additional Bonds , along with the Series 1983-A Bonds and the Series 1983 Bonds , 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 applicable Debt Service Fund, and shall be payable from and secured by a first lien on and pledge of Installment Loan Payments and Supplemental 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 Series 1983-A Bonds , Series 1983 Bonds , and Additional Bonds . Such Additional Bonds may be issued in one or more series or issues , in various principal amounts , maturing at different times , bearing interest at different rates , be payable in installments or otherwise be redeemable prior to maturity, with or without redemption premium, on whatever terms or prices , and may contain such other--provisions as may be provided in any Bond Resolution authorizing the issuance of such Additional Bonds . It is provided, however, that no series or issue of Additional Bonds shall be issued unless : (i) In the opinion of Bond Counsel (A) the issu- ance of such Additional Bonds will not adversely affect the exemption from federal income taxation of the interest on the then outstanding Series 1983-A Bonds , Series 1983 Bonds and Additional Bonds , or affect the validity of the then outstanding Series 1983-A Bonds , Series 1983 Bonds , and 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 Series 1983-A Bonds , Series 1983 Bonds and Additional Bonds ; (ii) A certificate is executed by the President or any Vice President and the Secretary of the Corporation -28- to the effect that no default exists in connection with the Series 1983-A Bonds , the Series 1983 Bonds or the Trust Indenture (or any amendment or supplement thereto) or with any of the covenants or requirements of this Series 1983-A Bond Resolution or any other Bond Resolutions (or any amendments or supplements thereto) authorizing the issuance of all then outstanding Series 1983-A Bonds , Series 1983 Bonds and Additional Bonds , and that the applicable Debt Service Fund contains the amounts 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 applicable 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 Series 1983-A Bonds , the Series 1983 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; and (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 , the Series 1983 Bonds and the Series 1983-A Bonds . (b) Amendments to Trust Indenture Unnecessary. It shall not a necessary or required that t e 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 : -29- (a) Installment Loan PaZTents and Supplemental Installment Loan Pay—m-e—n-t—s-Medged to Series 179T Bonds and Series -A Bonds Only. Other than for t e payment of the Series -A and the Series 1983 Bonds and except as provided in the Series 1983-A Bond Resolution, the Series 1983 Bond Resolution, the Trust Indenture and the Collateral Assignment , it is hereby stipulated that the Installment Loan Payments , the Supplemental Installment Loan Payments , the Deed of Trust , the Note and the Supplemental 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 Series 1983-A or the Series 198T Bonds are outstanding, the Corporation will not (except with respect to the Series 1983-A Bonds , the Series 1983 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 applicable Debt Service Fund, the Installment Loan Payments , the Supplemental Installment Loan Payments , the applicable Construction Fund, the Deed of Trust , the Note, the Supplemental 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 Series 1983-A 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 Owner to make or pay, or cause to be made or paid, when due , all Installment Loan Payments and Supplemental Installment Loan Payments , in the manner and to the extent required by the Agreement , this Series 1983-A Bond Resolution, the Series 1983 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. -30- Section 12. THE SERIES 1983-A BONDS ARE SPECIAL OBLIGATIONS. The Series -A Bons an 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, the Note and the Supplemental Note in the applicable Debt Service Fund established under the Trust Indenture , and in certain events out of amounts attributable to the Series 1983-A Bond proceeds or amounts secured through exercise of the remedies provided in the Trust Indenture, the Deed of Trust , or the Collateral Assignment upon occurrence of an event of default thereunder, and do not constitute an indebtedness or an obligation (legal, general , special , moral or otherwise) of the City of Beaumont (or any other city, county or other municipal or political corporation or subdivision of the State of Texas) or of the State of Texas , or a loan of credit of any of them within the meaning of any constitutional or statutory provisions . 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 Series 1983-A 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 Series 1983-A Bonds . No recourse under the Series 1983-A Bonds shall be had against any past , present or future officer, director, agent , employee or representative of the Corporation or of the City of Beaumont. The Series 1983-A 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. Section 13 . AMENDMENTS. (a) Amendment with Consent of Holders of 75% of the Series 1983 Bonds and the Series -A Bonds. Su ject to approval in writing by the Corporation (w-iUY the consent of the Approving Officer of the Owner) , the holders of 75% in aggregate principal amount of the then outstanding Series 1983-A Bonds and the Series 1983 Bonds shall have the right from time to time to approve any amendment to any Bond Resolution or to the Trust Indenture (provided that the Trustee must approve any amendment to the Trust Indenture) -31- which may be deemed necessary or desirable by the Corpora- tion; provided, however, that nothing herein contained shall ° permit or be construed to permit the amendment, without the consent of the holder of each of the then outstanding Series 1983-A Bonds and Series 1983 Bonds affected thereby, of the terms and conditions of any Bond Resolution, the Series 1983-A Bonds , the Series 1983 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 Series 1983-A Bonds or Series 1983 Bonds ; (2) reduce the rate of interest borne by any of the outstanding Series 1983-A Bonds or the Series 1983 Bonds ; (3) reduce the terms of the principal of, redemption premium, if any, liquidated damages , if any, or interest on the outstanding Series 1983-A Bonds or Series 1983 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 Series 1983-A Bonds or Series 1983 Bonds , or impose any conditions with respect to such payments ; (5) affect the rights of the holders of less than all of the Series 1983-A Bonds or the Series 1983 Bonds then outstanding; (6) decrease the minimum percentage of the principal amount of Series 1983 Bonds or the Series 1983-A Bonds necessary for consent to any such amendment; or (7) alter the obligations of the Owner to pay Install- ment Loan Payments and Supplemental Installment Loan Payments , in the manner and to the extent provided in the Agreement, this Series 1983-A Bond Resolution, the Series 1983 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 -32- 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 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 Series 1983 Bonds and Series 1983-A Bonds . Such publication is not required, however, if notice in writing is given to each holder of Series 1983 Bonds and Series 1983-A 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 holders of at least 757 in aggregate principal amounts of all Series 1983 Bonds and Series 1983-A 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 Series 1983 Bondholders and the Series 1983-A Bondholders under such amendatory resolution or the Trust Indenture shall thereafter be determined and exercised subject in all respects to such amendments . (e) Consent of the Series 1983 Bondholders and the Series 1983-A Bondholders . Any consent given by a Series 1983 or Series 19 3-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 -33- be conclusive and binding upon all future holders of the same Series 1983 or Series 1983-A 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 Series 1983 or Series 1983-A 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 holders of 75% in aggregate principal amount of the then outstanding Series 1983 or Series 1983-A Bonds have, prior to the attempted revocation, consented to and approved the amendment. (f) Ownership of the Series 1983 Bonds and the Series 1983-A Bonds . For the purpose of this Section, the fact of being a Series 1983 or Series 1983-A Bondholder, the amount and numbers of such Bonds , and the date of being such 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 ( ) o t is Section, and without publication of the proposed amendment and without the consent of the Series 1983 and the Series 1983-A 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 interests of the Series 1983 and the Series 1983-A Bondholders ,. provided that no such amendment shall be made contrary to the proviso to Section 13 (a) above, and a duly certified or executed copy of each such amendment shall be filed with the Trustee. (h) Special Exception. The provisions of this Section 13 shia�lT�ave no application to the right of the Corporation to amend its Rules and Regulations pertaining to -34- levels of low and moderate income as set forth in Section 19 hereof, and the Corporation shall be permitted to make any such amendments as provided therein. Section 14 . ESTABLISHMENT OF CONSTRUCTION FUND. (a) Deposit of the Series 1983-A Bond Proceeds into Construction Fund. Prior to or immediately after the sae and delivery of the Series 1983-A Bonds authorized hereby, the Corporation shall establish a separate, segregated construction fund with the Trustee, as defined in and required by the Agreement, and such fund shall be designated on the Trustee ' s books as the Series 1983-A Bond Construction Fund (the "Construction Fund") . The Corporation shall deposit all of the proceeds .from the sale and delivery of the Series 1983-A 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 Supplemental Loan made to the Owner by the Corporation as contemplated and provided in the Agreement. (b) Investment of Money in Construction Fund. Any money held as part of the Construction Fund, of er 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 -35- 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) De osit of Accrued Interest , Income, and Profits . Any accrued interest received from the sale of the Series 1983-A 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 applicable Debt Service Fund to be used to pay interest on the Series 1983-A Bonds during the period of construction of the Supplemental Development. Section 15 . PAYMENTS FROM CONSTRUCTION FUND. (a) 'Corporation' s Administrative Overhead Expenses and Other Costs . Immediately after the de ivery of the Series 1983-A Bonds authorized hereby, the Trustee shall pay directly to the Corporation the amount which is agreed upon by the Corporation and the Owner and which will reimburse the Corporation for its application fee and its adminis- trative and overhead expenses directly attributable and chargeable to the costs of issuance of the Series 1983-A Bonds authorized hereby. Also , immediately after the delivery of the Series 1983-A 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 attor- neys , and the initial fees and expenses of the Trustee. (b) Reimbursement for and Payment of Cost of the Supplemental Deve o ment. Subject an subordinate to making the payments require y the preceding paragraph, the Trustee shall make such payments from the Construction Fund to enable the Owner to pay, or to reimburse the Owner for paying, any Cost of the Supplemental , Development from time -36- to time upon receipt by the Trustee of a request 'of the Owner signed by the Approving Officer. Such request shall be accompanied by a certificate (in the form attached to the Agreement but with such alterations therein as may be necessary to relate to the Supplemental Development) 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 Owner for interest during construc- tion, 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 provision, acquisition, construction, renovation, reconstruction, rehabilitation, repair, alteration, improvement or extension of the Supplemental Development, as the case may be, and that, to the best of the knowledge of the person delivering the certificate , the fair value of such interest, property, services , or materials is not exceeded by the amounts requested to be paid; (iii) that no part of the several amounts requested to be paid to the Owner 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 Owner contained in the Agreement; 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 92Z of the total of such disbursements , other than disbursements for issuance expenses , being used to provide , acquire, construct, rehabilitate, renovate , improve , alter, equip, and furnish a project for residential rental property that constitutes an exempt facility (within the meaning of Section 103 (b) (4) (A) of the Code) . -37- (c) 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 Owner shall furnish, supporting documentation for any amounts requested under Section 15 (b) (ii) above. If amounts paid by the Trustee with respect to any portion of the Supplemental Development should exceed the cost thereof, the Owner shall promptly repay such overpayment into the Construction Fund. Section 16 . SURPLUS CONSTRUCTION FUNDS. (a) Disposition of Surplus Funds . The completion of the Supplemental Development 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 Supplemental Development, there shall be any surplus funds remaining in the Construction Fund not required to provide for the payment of the Cost of the Supplemental Development , 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 Series 1983-A Bonds , in inverse chronological order, in the manner set forth in Section 5 hereof for the prepayment or redemption of principal installments of the Series 1983-A 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 Series 1983-A Bonds from federal income taxation; and provided further that the Owner 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. (b) Disposition of Construction Fund upon Acceleration and Redemption. If the Trustee shall ec are the principa ot�t ee Series 1983-A 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 Series -38- 1983-A Bonds are opationally 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 Series 1983-A Bonds when due. Section 17. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED SERIES 19-83-A BONDS. (a) Replacement Series 1983-A Bonds . In the event any of the outstanding Series -A 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 Series 1983-A Bonds . Application for exchange and substitution of damaged, mutilated, lost , stolen, or destroyed Series 1983-A 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 fore- going provisions of this Section, in the event any such Series 1983-A 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. (d) Charge for Issuing Substitute Series 1983-A Bonds . Prior to t e issuance of any su stitute Series 1983-A Bond, the Corporation and the Trustee may charge the applicant for -39- 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 Series 1983-A 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 Series 1983-A Bond Resolution equally and proportionately with any and all other Bonds duly issued hereunder. (e) Authority for Issuing Substitute Series 1983-A Bonds . T is Series -A 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 Series 1983-A Bond Resolution, except to the extent otherwise required by law. Section 18 . NO ARBITRAGE. The Corporation and the Owner have covenanted to and with the purchasers of the Series 1983-A 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 Series 1983-A 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 Owner are obligated to comply with the requirements of the aforesaid Section 103(c) and all applicable and pertinent Regulations and rulings relating to arbitrage bonds . Section 19. ADOPTION OF RULES AND REGULATIONS AS TO LOW AND MODERATE INCOME LEVELS. Pursuant to and as required y the Act , the Boar of Directors of the Corporation hereby finds and determines and hereby adopts as a part of the Rules and Regulations of the Corporation effective as of January 1, 1983 , that for purposes of occupancy of dwelling units in the Development and the Supplemental Development , a person of low and moderate income shall be a person whose adjusted gross income, together with the adjusted gross incomes of all persons who intend to reside with such person in one dwelling unit within the Development or the Supplemental Development , did not exceed $40 , 000 . 00 for the calendar year 1982 . It is expressly stipulated that (i) the Corporation shall retain the right to modify the levels of low and moderate income for purposes of the Act and this Series 1983-A Bond -40- Resolution at any time and from time to time while any of the Series 1983-A Bonds may be outstanding without the consent of any other person or entity (including without limitation the Trustee, the Owner or any Series 1983-A Bondholder) , and (ii) the income levels now or hereafter established by the Corporation as provided in this Section . have been or will be determined solely for purposes of compliance with the Act , and nothing contained herein shall affect the Owner' s obligation to rent dwelling units in the Development and the Supplemental Development to individuals of low or moderate income as defined in the Code and the Regulations and rulings thereunder in order to qualify (and maintain qualification of) the Series 1983-A Bonds as tax-exempt bonds under Section 103 (b) (4) (A) of the Code. THIS RESOLUTION PASSED and APPROVED this day of June, 1983 . -41- SUPPLEMENT NO. 1 TO LOAN AGREEMENT BETWEEN BEAUMONT HOUSING FINANCE CORPORATION AND VIRGINIA VILLAGE VENTURE RELATING TO BEAUMONT HOUSING FINANCE CORPORATION $350 , 000 MULTI-FAMILY HOUSING REVENUE BONDS, SERIES 1983-A (VIRGINIA VILLAGE DEVELOPMENT) Dated as of June 1 , 1983 EXHIBIT A THE STATE OF TEXAS § SUPPLEMENT NO. 1 TO LOAN AGREEMENT COUNTY OF JEFFERSON § This Supplement No. 1 to Loan Agreement dated as of June 1 , 1983 , by and between Beaumont Housing Finance Corporation (the "Corporation") , duly organized and created as a housing finance corporation under the Texas Housing Finance Corporations Act, Art. 12691-7 , Vernon' s Annotated Texas Civil Statutes , as amended (the "Act") , and Virginia Village Venture (the "Owner") , a joint venture created under the laws of the State of Texas . WHEREAS , pursuant to the Act , a Bond Resolution adopted by the Corporation on March 2 , 1983 (the "Bond Resolution") and a Trust Indenture dated as of March 1 , 1983 (the "Trust Indenture") , the Corporation issued a series of multi-family housing revenue bonds designated as Beaumont Housing Finance Corporation $1 , 600 , 000 Multi-Family Housing Revenue Bonds , Series 1983 (Virginia Village Development) , dated as of March 1 , 1983 (the "Series 1983 Bonds") , in order to finance a portion of the cost of a development consisting of approximately 138 dwelling units located on the real property within the City that is described in Exhibit "A" hereto (the "Development") ; and WHEREAS, pursuant to a Loan Agreement dated as of March 1 , 1983 (the "Agreement") , the Corporation loaned the proceeds from the sale of the Series 1983 Bonds to the Owner in order to finance a portion of the cost of the Development; and WHEREAS , to evidence the loan, the Owner duly executed its promissory note dated as of March 1 , 1983 , and payable to the order of the Corporation in the principal amount of $1 , 600 , 000 (the "Promissory Note") ; and WHEREAS , as security for the payment of the loan and the Promissory Note , the Owner executed a Deed of Trust, Assignment of Rents and Security Agreement to Donald W. Cioban as Mortgage Trustee, dated as of March. 1 , 1983 (the "Deed of Trust") ; and WHEREAS, in order to secure payment of the Bonds the Corporation duly assigned all of its right , title and - interest in and to the Promissory Note and the Deed of Trust to InterFirst Bank-Beaumont, as Trustee (the "Trustee") , by Collateral Assignment and Security Agreement dated as of March 1 , 1983 (the "Collateral Assignment") ; and WHEREAS , as additional security for the Series 1983 Bonds , C. L. Sherman, Jr. , James J. Conway, Jr. , Wayne D. Sherman, Robert G. Quinn, J. D. Martin III, A. S. Crawford, and F. L. Stanley personally guaranteed the Series 1983 Bonds by execution of a Guarantee Agreement with the Trustee dated as of March 1 , 1983 (the "Guarantee Agreement") ; and WHEREAS, Section 10 of the Bond Resolution authorizes the issuance of additional parity bonds upon satisfaction of certain requirements , including obtaining the consent of the holders of at least 75% of the aggregate principal amount of the Series 1983 Bonds then outstanding; and WHEREAS , the Owner proposes to incur additional cost in connection with (i) completion of the reconstruction and rehabilitation of 18 units comprising a part of the Develop- ment and (ii) construction of an additional 12 units to comprise a part of the Development (collectively the "Supplemental Development") ; and WHEREAS, the Corporation has adopted a Bond Resolution on June , 1983 (the "Supplemental Bond Resolution") , authorizing the issuance of its $350 , 000 Multi-Family Housing Revenue Bonds , Series 1983-A (Virginia Village Development) (the "Series 1983-A Bonds") , for the purpose of providing proceeds to loan to the Owner to finance a portion of the costs of the Supplemental Development; and WHEREAS , all of the requirements of the Bond Resolution to be met as a prerequisite to the issuance of the Series 1983-A Bonds have been or will be met no later than the date on which the Series 1983-A Bonds are delivered to the purchasers thereof; NOW, THEREFORE, the Corporation and the Owner hereby contract and agree as follows : ARTICLE I DEFINITIONS; GENERAL RECITALS, FINDINGS AND REPRESENTATIONS Section 1 . 01. DEFINITIONS. Except as may be otherwise provided herein, all words and terms used herein shall have the same meaning as contained in the Agreement. -2- Section 1 . 02. AMENDMENT OF DEFINITIONS. The defini- tions contained in Article I of the Agreement are hereby amended and supplemented as follows : Agreement and Supplement No. 1 to Loan Agreement - The Loan Agreement dated as of March 1 , 1983 , together with the Exhibits attached thereto , as supplemented by Supplement No. 1 to Loan Agreement dated as of June 1 , 1983 , and as hereafter amended and supplemented from time to time in accordance with the provisions hereof and thereof. Bonds - Any and all revenue bonds of the Corporation, including the Series 1983 Bonds and the Series 1983-A Bonds , issued and delivered to finance and pay for all or any part of the Cost of the Development and the Supplemental Development pursuant to the Act , the Agreement and this Supplement No. 1 , including initial and subsequent series of issues of revenue bonds and revenue bonds issued to finance and pay for all or any part of the Cost of completing the Development and the Supplemental Development , and any revenue bonds issued for the purpose of refunding or replacing any Bonds issued for such purpose. Collateral Assignment and Supplement No. 1 to Collat- eral Assignment - The Collateral Assignment and Security Agreement dated as of March 1 , 1983 , as supplemented by Supplement No. 1 to Collateral Assignment and Security Agreement dated as of June 1 , 1983 , pursuant to which the Corporation has conveyed, assigned, transferred and de- livered and granted a security interest to the Trustee in the Note and the Supplemental Note, including its rights., titles and interests arising under the Deed of Trust as supplemented, in order to secure the payment of the Bonds , including the Series 1983 Bonds and the Series 1983-A Bonds , according to their tenor and effect and in order to secure the performance by the Corporation of all the covenants expressed and implied therein and in the Trust Indenture and the Collateral Assignment, as supplemented. Cost - With respect to the Development and the Supple- mental Development , the sum total of all reasonable or necessary costs incidental to the providing, acquisition, construction, reconstruction, rehabilitation, repair, alter- ation, improvement and extension of a residential develop- ment as defined in the Act, including without limitation the following: the cost of studies and surveys ; plans and -- specifications ; architectural and engineering services , financial advisory, mortgage banking and administrative services; underwriting fees; legal, accounting, marketing -3- 0 e s and other special services related to residential develop- ment or incurred in connection with the issuance and sale of bonds ; necessary application and other fees to federal., state and local government agencies for any requisite approval for construction, assisted financing or otherwise; financing, acquisition, demolition, construction, equipment and site development of new and rehabilitated buildings ; the relocation of utilities , public ways , and parks ; the construction of recreational , cultural and commercial facilities; rehabilitation, reconstruction, repair or remodeling of existing buildings and all other necessary and incidental expenses , including trustee and related agency fees and an initial bond and interest reserve together with interest on bonds issued to finance a residential develop- ment to a date 12 months subsequent to the estimated date of completion; any premiums for mortgage insurance or insurance with respect to bonds ; and such other expenses as the Corporation may deem appropriate to effectuate the purposes of the Act. Deed of Trust and Supplement No. 1 to Deed of Trust - The Deed of Trust, Assignment of Rents and Security Agree- ment dated as of March 1 , 1983 , as supplemented by Supple- ment No. 1 to Deed of Trust , Assignment of Rents and Secur- ity Agreement dated as of June 1 , 1983 , pursuant to which the Owner has bargained, sold, granted, conveyed, trans- ferred, mortgaged, pledged and assigned to Donald W. Cioban, as mortgage trustee, for the use and benefit of the Corpora- tion, and has assigned all of its right , title and interest in any rents arising with respect to , and has further granted to the Corporation a security interest in, the Development and the Supplemental Development in order to secure the payment of the Installment Loan Payments , the Note and the Supplemental Note , according to their tenor and effect, and certain other indebtedness of the Owner and the performance and observance by the Owner of all the covenants expressed or implied in the Deed of Trust as supplemented, the Agreement as supplemented, the Note and the Supplemental Note. Development - Virginia Village Development, comprised of the real estate located within the City that is described in Exhibit "A" hereto, together with the buildings , improve- ments , equipment and related facilities to be constructed, reconstructed, rehabilitated and installed thereon and con- sisting of (i) 138 dwelling units a portion of the Cost of which has been financed with a loan of the proceeds from the Series 1983 Bonds and (ii) the Supplemental Development in- volving the completion of reconstruction and rehabilitation -4- lele dp-S of 18 dwelling units included in the 138 dwelling units and the construction of an additional 12 dwelling units to be financed with a loan of the proceeds from the Series 1983-A Bonds , all of such 150 dwelling units being for persons of low or moderate income within the City. Guarantee and Supplement No. 1 to Guarantee - The Guarantee Agreement dated as of March 1 , 1983 , as supple- mented by Supplement No. 1 to Guarantee Agreement dated as of June 1 , 1983 , pursuant to which the Guarantors agree on a proportionate basis to guarantee payment of the principal of and premium, if any, and liquidated damages , if any, and interest on the Bonds , including the Series 1983 Bonds and the Series 1983-A Bonds , in the event of a default in the payment of the Bonds or upon occurrence of a Taxable Event (which thereafter results in a Final Determination of Taxability) . Installment Loan Payments - Payments required to be made by the Owner on a limited recourse basis to amortize the Series 1983 Bonds and the Series 1983-A Bonds , as provided for in the Bond Resolution and the Supplemental Bond Resolution, including the principal of, redemption premium, if any, and interest on all of such Bonds when due (whether at stated maturity, upon redemption prior to stated maturity, or upon acceleration of stated maturity) , any agreed liquidated damages owed to the Bondholders , and all agreed fees and expenses of the Trustee, the Registrar, and any Paying Agent for all of such Bonds , together with any other payments required by the Bond Resolution, the Supplemental Bond Resolution, or the Trust Indenture. Section 1 . 03. ADDITIONAL DEFINITIONS. Article I of the Agreement is hereby amended by adding thereto the following definitions : Series 1983 Bonds - Any and all revenue bonds issued as the series known. as Beaumont Housing Finance Corporation $1 , 600 , 000 Multi-Family Housing Revenue Bonds , Series 1983 (Virginia Village Development) , dated as of March 1 , 1983 . Series 1983-A Bonds - Any and all revenue bonds issued as the series known as Beaumont Housing Finance Corporation $350 , 000 Multi-Family Housing Revenue Bonds , Series 1983-A (Virginia Village Development) , dated as of June 1 , 1983 . Supplemental Bond Resolution - The Bond Resolution adopted by the Board of Directors authorizing the issuance and delivery of Beaumont Housing Finance Corporation -5- Multi-Family Housing Revenue Bonds , Series 1983-A (Virginia Village Development) , in the aggregate principal amount of $350, 000. Supplemental Development - That portion of the Virginia Village Development involving completion of the reconstruc- tion and rehabilitation of 18 dwelling units in the Develop- ment and the construction of an additional 12 dwelling units to become a part of the Development upon the real estate located within the City that is described in Exhibit "A" hereto. Supplemental Installment Loan Payments - The portion of Installment Loan Payments required to be made by the Owner on a limited recourse basis to amortize the Series 1983-A Bonds , as provided for in the Supplemental Bond Resolution. Supplemental Loan - The loan of the proceeds of the sale of the Series 1983-A Bonds as described in Section 2. 01 hereof. Supplemental Note - The limited recourse promissory note representing the Supplemental Loan as described in Section 2. 01 hereof. Section 1 . 04. GENERAL RECITALS, FINDINGS , AND REPRE- SENTATIONS. (a) The Corporation is duly created and organized and validly existing as . a housing finance corporation under the Act. (b) The Corporation is a public instrumentality of the City, a political subdivision of the State of Texas , within the meaning of the Regulations and the rulings of the Internal Revenue Service prescribed and promulgated pursuant to Section 103 of the Code, and the Corporation is functioning and acting on behalf of the City. (c) The Owner is a joint venture duly organized and validly existing under the laws of the State of Texas , is fully qualified to transact business in the State of Texas , and is fully authorized by law to execute this Supplement No. 1 . (d) This Supplement No. 1 is authorized and executed pursuant to applicable laws , including the Act. -6- (e) The Owner has requested the Corporation to finance the Cost of the Supplemental Development. (f) The Corporation has determined, in the public interest, that it will finance the Cost of the Supplemental Development and will loan money to the Owner for such purpose in the manner provided in the Act, the Agreement and this Supplement No. 1 . (g) Based on representations made by the Owner to the Board of Directors , the Corporation has officially found and determined and hereby officially finds and determines that (i) issuance of the Series 1983-A Bonds on the terms and conditions set out in the Supplemental Bond Resolution so as to provide financing for the Cost of the Supplemental Development will promote the public purposes set forth in Section 3 of the Act, including without limitation assisting persons of low and moderate income to obtain decent, safe and sanitary housing at rentals they can afford, and (ii) as provided in the Agreement and this Supplement No. 1 , the Owner has agreed and covenanted that in accordance with the Act and the Code, respectively, at least 907 of the dwelling units and in the Development (including the Supplemental Development) will be occupied at all times by persons of low and moderate income (as determined in the Rules and Regula- tions adopted by the Board of Directors on behalf of the Corporation) and at least 20% of the dwelling units in the Development (including the Supplemental Development) will be occupied (or held vacant and available for occupancy) by individuals of low or moderate income within the meaning of Section 103(b) (12) (C) ' of the Code at all times during the qualified project period set forth in Section 103(b) (12) (B) of the Code. (h) As required by the Code, the governing body of the City has held a public hearing after publication and posting of reasonable written notice and has approved by written resolution the Supplemental Development , the Supplemental Inducement Resolution adopted by the Corporation on May 9 , 1983 , declaring its intent to issue the Series 1983-A Bonds , the Supplemental Bond Resolution, and the issuance of the Series 1983-A Bonds . (i) The Corporation and the Owner have taken all action and have complied with all provisions of law with respect to the execution, delivery and performance of this Supplement No. 1 and the due authorization of the consumma- tion of the transactions contemplated hereby, and this Supplement No. 1 has been duly executed and delivered by, -7- - ��- �-S7 and constitutes a valid and legally binding agreement of, the Corporation and the Owner, enforceable against the respective parties in accordance with its terms . (j ) The execution of this Supplement No. 1 and the performance of the transactions contemplated hereby will not violate any law or regulation, or any Joint Venture Agree- ment , or any Articles of Incorporation, Charter or Bylaws , or any judicial order, judgment, decree, or injunction, or contravene the provisions of or constitute a default under any agreement, deed of trust , indenture, bond resolution, or other instrument to which the Corporation or the Owner is a party. ARTICLE II FINANCING THE SUPPLEMENTAL DEVELOPMENT; TITLE AND OPERATION Section 2. 01 . THE SUPPLEMENTAL LOAN AND THE SUPPLEMENTAL NOTE. The Corporation shall make the Supple- mental Loan to the Owner by depositing into the Construction Fund (or such other fund as specifically provided in the Supplemental Bond Resolution) the proceeds from the sale of Series 1983-A Bonds in such amount as is provided in the Supplemental Bond Resolution. The amounts so deposited shall be advanced in the manner provided in the Supplemental Bond Resolution, and the obligation of the Owner to repay the Supplemental Loan shall be represented by the Supple- mental Note in the form attached as Exhibit "B" , and the Owner shall repay the Supplemental Loan and the Supplemental Note by making the Installment Loan Payments as provided in the Agreement as supplemented and the Supplemental Bond Resolution. Section 2 . 02 . THE CORPORATION' S LIMITED LIABILITY. It is recognized that the Corporation' s only source of funds with which to carry out its commitments with respect to the Supplemental Development and this Supplement No. 1 will be from the proceeds of sale of the Series 1983-A Bonds and that Bonds represent limited obligations of the Corporation as set out in the Supplemental Bond Resolution. It is expressly agreed that the Corporation shall have no liabil- ity, obligation, or responsibility with respect to the Agreement and this Supplement No. 1 or the Development and the Supplemental Development except to the extent of funds available from such Bond proceeds . If, for any reason, the proceeds from the sale of the Series 1983 Bonds and the Series 1983-A Bonds and any other amounts contemplated to be -8- advanced in connection with the Development and the Supplemental Development are not sufficient to pay the Cost therefor, the Owner shall not be entitled to reimbursement unless additional Bonds are issued for such purpose, or to any diminution in or postponement of any payments required to be made by the Owner under the Agreement or this Supplement No. 1. Section 2. 03. THE OWNER' S LIMITED LIABILITY. Other than the interest of the Owner in the Development and the Supplemental Development and the future rents , issues and profits , insurance proceeds and condemnation awards to be derived therefrom and any other collateral expressly pledged by the Owner with respect to the Develop- ment and the Supplemental Development, neither the Owner nor any venturer or participant therein shall have liability for failure to pay or perform any of the obligations of the Owner hereunder, and under the Agreement , the Note , the Supplemental Note, the Deed of Trust and Supplement No. 1 to Deed of. Trust (other than the obligations under Section 3 . 06 and Section 4 . 06 of the Agreement for which the Owner and its venturers or participants shall be personally liable) . In the event of any breach or threatened breach by the Owner of any of the covenants , agreements , terms or conditions contained herein or in the Agreement, the Note, the Supple- mental Note , the Deed of Trust and Supplement No. 1 to Deed of Trust, the Corporation, its successors and assigns , shall make no claim, or enforce nor seek to enforce any claim, either at law or in equity, by attachment, execution or other legal or equitable means , against any of the assets of either the Owner or any venturer or participant therein, other than the interest of the Owner in the Development and the Supplemental Development and the future rents , issues and profits , insurance proceeds and condemnation awards to be derived therefrom and other collateral expressly pledged by the Owner with respect to the Development and the Supple- mental Development (except that the assets of the Owner and its venturers and participants shall be subject to payment of claims under Section 3 . 06 and Section 4 . 06 of the Agree- ment) . Nothing contained in this Section shall relieve, modify, diminish, or waive the personal liability of the Guarantors under the Guarantee Agreement or the Supplement No. 1 to Guarantee Agreement. -9- ARTICLE III THE BONDS Section 3 . 01 . ISSUANCE OF THE SERIES 1983-A BONDS. (a) In consideration of the covenants and agreements set forth in the Agreement and this Supplement No. 1 and to enable the Corporation to issue the Series 1983-A Bonds in order to carry out the intents and purposes hereof, this Supplement No. 1 is executed to assure the issuance of such 1983-A Bonds , and to provide for the due and punctual payment by the Owner to the Trustee of the Supplemental Installment Loan Payments . The Owner shall make all Installment Loan Payments (including the Supplemental Installment Loan Payments) to the Trustee for deposit into the Debt Service Fund as provided in the applicable Bond Resolution. (b) Simultaneously with its authorization of this Supplement No. 1 , the Board has adopted the Supplemental Bond Resolution (which Supplemental Bond Resolution is expressly incorporated in this Supplement No. 1 by reference for all purposes) . ARTICLE IV CONFIRMATION OF OBLIGATIONS AND COVENANTS All of the terms and provisions of the Agreement as herein supplemented shall continue in full force and effect and shall be applicable to the entire Development, including the Supplemental Development , and to all of the Bonds , including the Series 1983 Bonds and the Series 1983-A Bonds . The Owner and the Corporation hereby confirm and carry-forward each and every agreement, covenant, warranty and representation made in the Agreement as supplemented. Without limiting the generality of the foregoing, the Owner specifically confirms that (i) the Owner shall be obligated to indemnify the Corporation, the Trustee and other parties in accordance with the terms and conditions set out in Section 3. 06 of the Agreement as supplemented, (ii) the agreements , covenants , warranties , and representations of the Owner set forth in the Agreement as supplemented (including without limitation Articles IV, V and VI thereof) shall apply to the Development and the Supplemental _- Development the same as if the Supplemental Development had originally been included therein, and (iii) the Owner shall be obligated to observe the application and certification -10- requirements set out in the letter agreement attached hereto as Exhibit "C" with respect to the Development and the Supplemental Development the same as if the Supplemental Development had originally been included therein. IN WITNESS WHEREOF, the parties hereto have caused this Supplement No. 1 to Loan Agreement to be signed in multiple counterparts , each of which shall be considered an original for all purposes , as of the day and year first set out above. BEAUMONT HOUSING FINANCE ATTEST: CORPORATION By: President (SEAL) VIRGINIA VILLAGE VENTURE By: C. L. Sherman, Jr. By: James J. Conway, Jr. -11- EXHIBIT "A" SUPPLEMENT NO. 1 TO LOAN AGREEMENT DESCRIPTION OF THE REAL ESTATE BEING an 11. 41 acre tract of land out of the M. C. Cartwright Subdivision in the J. W. Bullock League, Abstract No. 7 in Beaumont , Jefferson County, Texas and being that same tract of land described in Deed of Trust between Lincoln Housing Corporation and Leonard Quinn, Trustee, dated May 16 , 1960 , and recorded in Vol. 977 , Page 213 of the Deed Records of Jefferson County, Texas , and said 11. 41 acre tract of land being more particularly described by metes and bounds as follows : BEGINNING at a 5/8 inch steel rod placed in the South right of way line of Booker Street and in the East right of way line of 4th Street locating the Northwest corner of that certain tract of land described in Deed of Trust from said Lincoln Housing Corporation and from said steel rod the Northwest corner of the South 6 acres of Lot 37 of the M. C. Cartwright Subdivision bears north a distance of 20 . 0 feet and said steel rod also locates the Northwest and the beginning corner of the tract of land herein described; THENCE South 89 degrees 59 minutes 40 seconds East with the South line of Booker Street a distance of 682.50 feet to a concrete monument found for corner; THENCE South 0 degrees 00 minutes 20 seconds West with the West line of Pradice Street a distance of 932. 83 feet to a concrete monument found for corner in the North right of way line of Virginia Street; THENCE West with said line a distance of 196 . 17 feet to a 5/8 inch steel rod placed for corner; said steel rod also locates the Eastmost corner of Lincoln Terrace Third Addition, a subdivision to the City of Beaumont, Jefferson County, Texas , that is recorded in Vol 9 , Page 37 of the Map Records of Jefferson County, Texas; THENCE North 40 degrees 15 minutes 20 seconds West with the Northeasterly line of Lots 9 through 1 of said Lincoln Terrace Third Addition and with the Northeasterly line of that certain tract of land conveyed by C. W. DuPerior to the Magnolia Pipeline Company for a pipeline easement that is recorded in Vol. 996 , Page 633 of the Deed Records of Jefferson County, Texas , a distance of 752. 97 feet to a 1/2 inch iron rod found for corner in the East right of way line of 4th Street; THENCE North 0 degrees 01 minutes 40 seconds East with the East line of 4th Street a distance of 358 . 32 feet to the PLACE OF BEGINNING, containing 11.41 acres of land, more or less . -2- e EXHIBIT "B" SUPPLEMENTAL NOTE $350 , 000 . 00 Beaumont , Texas June 1 , 1983 FOR VALUE RECEIVED, Virginia Village Venture, a Texas joint venture .(the "Owner") , does hereby promise to pay to the order of BEAUMONT HOUSING FINANCE CORPORATION (the "Corporation") , at the principal corporate trust office of InterFirst Bank-Beaumont (the "Trustee") or any successor trustee acting as such under that certain Trust Indenture, dated as of March 1 , 1983 , by and between the Corporation and the Trustee (the "Trust Indenture") , in lawful money of the United States of America, the principal sum of Three Hundred Fifty Thousand Dollars ($350 ,000) , and to pay interest on the unpaid principal amount hereof, in like money, at such office at the rate and in the amounts specified in Section 2 . 01 of the Supplement No. 1 to Loan Agreement hereinafter referenced. ALL SUMS paid hereon shall be applied first to the satisfac- tion of accrued interest and the balance to the unpaid principal. THE PRINCIPAL AMOUNT of this Note and the interest hereon is due and payable in installments in the amounts and rates and at the times specified in Section 2 . 01 of that certain Supplement No. 1 to Loan Agreement dated as of June 1, 1983 , between the Owner and the Corporation. THIS NOTE is the Supplemental Note referred to in the Supplement No. 1 to Loan Agreement , and is subject to, and is executed in accordance with, all of the terms , conditions and provisions thereof, including those respecting prepayment and the acceleration of maturity and is further subject to all of the terms , conditions and provisions of the Trust Indenture, all as provided in the Supplement No. 1 to Loan Agreement. NOTWITHSTANDING any other provision in this Note to the con- trary, the liability of the Owner and any venturer or participant therein is subject to the provisions of Section 2. 03 of Supplement No. 1 to Loan Agreement. THIS NOTE is a contract under and shall be construed in accordance with and governed by the laws of the State of Texas . VIRGINIA VILLAGE VENTURE By: C. L. Sherman., Jr. By: James J. Conway, Jr. ENDORSEMENT Pay to the order of InterFirst Bank-Beaumont, Trustee, without recourse. BEAUMONT HOUSING FINANCE CORPORATION By: Its . -2- EXHIBIT C March 1, 1983 Re: Beaumont Housing Finance Corporation $1, 600 ,000 Multi-Family Housing Revenue Bonds, Series 1983 (Virginia Village Development) Virginia Village Venture 3010 Washington Blvd. Beaumont, Texas 77702 Attention: Mr. C. L. Sherman, Jr. and Mr. James J. Conway, Jr. Gentlemen: Pursuant to Sections 4 . 06 (f) and 4. 07 (b) of the Loan Agreement delivered in connection with issuance of the Bonds, this letter is to request that you agree to do the following: (a) obtain and maintain on file income certifications from each Individual of Low or Moderate Income residing in the Development in the form and manner required by Treas. Reg. §1. 167 (k) -3 (b) , or in such other form and manner as may be required or permitted by applicable rules , regulations or policies promulgated or proposed by the Internal Revenue Service with respect to obligations issued under Section 103 (b) (4) (A) of the Internal Revenue Code; (b) maintain complete and accurate records pertaining to the incomes of Individuals of Low or Moderate Income residing in the Development; (c) obtain and maintain on file with respect to each Person of Low or Moderate Income who resides in the Develop- ment, a sworn, notarized statement of the adjusted gross income of that Person (and any other persons who reside in the same dwelling unit with that Person) for the first certification year;- and (d) prepare and submit to the Corporation, within 13 days after each March 1, June 1, September 1, and December 1 during the term of the Loan Agreement a certificate executed by the Owner in the form attached hereto as Exhibit A stating that (i) during the 3-month period immediately Page 2 preceding the last day of the period covered by the certifi- cate, at least 20% of the units comprising a part of or functionally related and subordinate to the Development were occupied or held vacant and available for occupancy by Individuals of Low or Moderate Income and that at least 90% of those units were occupied or held vacant and available for occupancy by Persons of Low and Moderate Income whose adjusted gross income, together with the adjusted gross income of all persons who intend to reside with that person in one dwelling unit, did not for the immediately preceding year exceed the maximum amount from time to time established as constituting moderate income by the Rules and Regulations adopted by the Board of Directors of the Corporation, and (ii) as of the immediately preceding March 1, June 1, September 1, or December 1, as appropriate, no default has occurred in the observance of any of the covenants of the Owner as contained in the Loan Agreement or in the Deed of Trust, the Indenture, the Section 8 Agreement, the Section 8 Contract, the Bond Resolution, or any other document de- livered by the Owner in connection with the Bonds. The agreements set forth above will remain in effect for the same period of time as the covenants and agreements of the Owner set forth in Sections 4 . 06 and 4 . 07 of the Loan Agreement. In order to confirm your agreement to the terms set forth above, please execute the enclosed copy of this letter in the space provided below, returning - one executed counterpart to the Corporation. Yours very truly, BEAUMONT HOUSING FINANCE CORPORATION Betty Byram, Vice President ACCEPTED AND AGREED to this 3rd day of March, 1983. VIRGINIA VILLAGE VENTURE By: C. L. Sherman, Jr. By: .James J. Conway, Jr. QUARTERLY CERTIFICATE OF OCCUPANCY AND NON-DEFAULT VIRGINIA VILLAGE VENTURE The undersigned, duly authorized representatives of the Virginia Village Venture (the "Owner" ) , a joint venture duly organized and validly existing under the laws of the State of Texas; and fully qualified to- transact business in the State of Texas, in connection with the Beaumont Housing Finance Corporation ' s $1, 600, 000 Multi-Family Housing Revenue Bonds , Series 1983 (Virginia Village Development) (the "Bonds") , do hereby make the following certifications, warranties and representations for - the benefit of the Beaumont Housing Finance Corporation (the "Corporation") , the Trustee under that certain Trust Indenture dated as of March 1, 1983 , by and between the Corporation and InterFirst Bank-Beaumont, as trustee, and for the benefit of all persons interested in the exemption from Federal Income Taxation of the interest on the Bonds (all italicized or capitalized terms used herein shall have the meanings ascribed to them in that certain Loan Agreement (the "Agreement" ) between the Corporation and the Owner dated as of March 1, 1983 , and in the Internal Revenue Code of 1954 , as amended (the "Code") , and specifically Sections 103 and 167 of the Code and the Treasury Regulations promulgated hereunder) : (1) percent of the Units comprising a Part of or Functionally-Related and Subordinate to the Development were rented or held open as available for rental (within the meaning of Sections 103 (b) (12) (c) and 167 of the Code) , on a continuous basis , by Families or Individuals of Low oi- Moderate Income at all times during the 3-month period -immediately preceding the date of this Certificate; and at all times during the Qualified Project Period. No part of the Units , Proximate Buildings and Structures, land and Facilities comprising a Part of or Functionally-Related and Subordinate to the Development were used as Owner-Occupied Residences, or were otherwise utilized, rented, , or held out for rental as a hotel , motel, dormitory, fraternity or sorority house , rooming house, hospital, nursing Dome, sanitarium, rent house, trailer park or court, or for any other use on a "transient" basis, or were used by any - partner, venturer, or participant in the Owner. (2) percent of the Units comprising a Part of` or Functionally-Rela ted and Subordinate to the Development were occupied at all times during the 3-month period immediately preceding the date of this certificate , by persons or families of "low and moderate income" (as determined in accordance with the Rules and Regulations adopted by the Board of Directors on behalf of the Corporation) . (3) As of the date of this Certificate , neither the Owner nor any of its tenants are in Default (and no event has occurred which, with the lapse of time or notice or both, would constitute an Event of Default) with respect to the performance of any of its covenants , representations , and obligations , express or implied, under the Agreement , the Deed of Trust , the Trust Indenture , the Section 8 Agreement, the Section 8 Contract , the Bond Resolution , or any other document delivered by the Owner in connection with the Bonds. Dated this day of 19 VIRGINIA VILLAGE VENTURE James J . Conway , Jr. C. L. Sherman, Jr: �-3 -2- TENANT INCOME CERTIFICATION VIRGINIA VILLAGE VENTURE This Tenant Income Certification, covering each person who will live in Unit or Apartment of the Virginia Village Apartments after the beginning of the "Certification Year" (as defined below) , is made for the purpose of comply- ing with the income certification and recordkeeping require- ments of Section 167 (k) of the Internal Revenue Code -of 1954, as amended (the "Code") , and Treasury Reg. § 1. 167 (k) 4 promulgated thereunder relating to the election to depre- ciate certain rehabilitation expenditures attributable to qualifying Low-Income Rental Housing (as that term is de- fined under Section 167 of the Code) over a 60-month period. This certification will also be used for purposes of calcu- lating the "adjusted income" (within the meaning of Section 167 of the Code) of tenants in order to determine whether tenants are families or individuals of "low or moderate income" within the meaning of Sections 103 and 167, and for purposes of determining whether tenants are persons of "low and moderate income" as determined in accordance with the rules and regulations adopted by the Board of Directors of Beaumont Housing Finance Corporation. The undersigned tenant of Unit or Apartment , Virginia Village Apartments, does hereby certify, warrant and represent the following : The names and anticipated total annual incomes for the Certification Year of each person who is to live in or occupy Unit or Apartment on a regular basis during the Certification Year (including the names and number of minors who are to live in or occupy the designated Unit or Apart- ment on a regular basis during the Certification Year and the anticipated total annual income of each such minor) are as follows: ANNUAL INCOME FOR NAME CERTIFICATION YEAR WARNING: IF THIS CERTIFICATION IS SIGNED BY A TENANT IN CONNECTION WITH AN APPLICATION FOR A SUBSIDY, RENT SUPPLEMENT, MORTGAGE INSURANCE, OR OTHER FORM OF ASSISTANCE TO EITHER THE LESSOR (VIRGINIA VILLAGE VENTURE) OR THE TENANT FROM A DEPARTMENT OR AGENCY OF THE UNITED STATES, THE TENANT SHOULD BE AWARE THAT IT IS A CRIMINAL OFFENSE TO MAKE A WILLFULLY FALSE STATEMENT OR MISREPRESENTATION TO ANY DEPARTMENT OR AGENCY OF THE UNITED STATES AS TO ANY MATTER WITHIN ITS JURISDICTION. TENANT, UNIT OR APARTMENT THE STATE OF TEXAS § COUNTY OF JEFFERSON § BEFORE ME, the undersigned authority, on this day personally appeared known to me to' be the person whose name is subscribed to the fore- going instrument, and acknowledged to me that he executed the same for the purposes and consideration therein ex- pressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of 19 Notary Public , State of Texas -2- DEFINITIONS IN TENANT INCOME CERTIFICATION "Certification Year" means the twelve (12) month period which begins on the later of (a) the date on which the prop- erty attributable to the rehabilitation expenditures allocated to the Unit or Apartment is first placed in service (within the meaning of Treasury Reg. §1 . 167 (k) -1 (b) (3) ) , or (b) the date on which the tenant first occupies the Unit or Apartment on a regular basis, or -signs a lease with respect to the Unit or Apartment, whichever occurs first. "Anticipated total annual income" means all payments received from all sources, including, but not limited to: (i) the gross amount, before payroll deductions, of -w-ages, salaries, overtime pay, tips, commissions, and bonuses; (ii) interest and dividends; (iii) periodic payments received from Social Security, annuities, insurance poli- cies , retirement funds, pensions, disability or death benefits -.and other similar types of periodic receipts; (iv) payments in lieu of earnings, such as unemployment and disability compensation, and severance pay; (v) public assistance payments which include an amount specifically designated for shelter and utilities, which is subject to adjustment (but only the amount of allowance exclusive of the amount -specifically designated for shelter and utili- ties, plus the maximum amount the assistance agency could allow for shelter and utilities) ; (vi) periodic and deter- minable allowances, such as alimony and child support _ payments, and regular contributions or gifts received from persons not residing in the Unit or Apartment; and (vii) all regular pay, special pay and allowances of a member of the armed forces (whether or not living in the Unit or Apart- ment) who is head of the family or a spouse of a tenant. Income does not include amounts specifically for or in reimbursement of the cost of medical and accident insurance and worker ' s compensation, education scholarship payments (except that any amount not used for education expenses is included as income) , and the value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1964 in excess of the amount actually charged the eligible household. March 1, 1983 Re: Beaumont Housing Finance Corporation $1, 600 ,000 Multi-Family Housing Revenue Bonds, Series 1983 (Virginia Village Development) Virginia Village Venture 3010 Washington Blvd. Beaumont, Texas 77702 Attention: Mr. C. L. Sherman, Jr. and Mr. James J. Conway, Jr. Gentlemen: Pursuant to Sections 4 . 06 (f) and 4. 07 (b) of the Loan Agreement delivered in connection with issuance of the Bonds, this letter is to request that you agree to do the following: (a) obtain and maintain on file income certifications from each Individual of Low or Moderate Income residing in the Development in the form and manner required. by Treas. Reg. §1. 167 (k) -3 (b) , or in such other form and manner as may be required or permitted by applicable rules , regulations or policies promulgated or proposed by the Internal Revenue Service with respect to obligations issued under Section 103 (b) (4) (A) of the Internal Revenue Code; (b) maintain complete and accurate records pertaining to the incomes of Individuals of Low or Moderate Income residing in the Development; (c) obtain and maintain on file with respect to each Person of Low or Moderate Income who resides in the Develop- ment, a sworn, notarized statement of the adjusted gross income of that Person (and any other persons who reside in the same- dwelling unit with that Person) for the first certification year; and (d) prepare and submit to the Corporation, within 15 days after each March 1, June 1 , September 1 , and December 1 during the term of the Loan Agreement a certificate executed by the Owner in. the form attached hereto as Exhibit A stating that (i) during the 3-month period immediately ""oo? �� Page 2 preceding the last day of the period covered by the certifi- cate, at least 20% of the units comprising a part of or functionally related and subordinate to the Development were occupied or held vacant and available for occupancy by Individuals of Low or Moderate Income and that at least 90% of those units were occupied or held vacant and available for occupancy by Persons of Low and Moderate Income whose adjusted gross income, together with the adjusted gross income of all persons who intend to reside with that person " in one dwelling unit, did not for the immediately preceding year exceed the maximum amount from time to time established as constituting moderate income by the Rules and Regulations adopted by the Board of Directors of the Corporation, and (ii) as of the immediately preceding March 1, June 1, September 1, or December 1, as appropriate, no default has occurred in the observance of any of the covenants of the Owner as contained in the Loan Agreement or in the Deed of Trust, the Indenture, the Section 8 Agreement, the Section 8 Contract, the Bond Resolution, or any other document de- livered by the Owner in connection with the Bonds. The agreements set forth above will remain in effect for the same period of time as the covenants and agreements of the Owner set forth in Sections 4 . 06 and 4 . 07 of the Loan Agreement. In order to confirm your agreement to the terms set forth above, please execute the enclosed copy of this letter in the space provided below, returning one executed counterpart to the Corporation. _ Yours very truly, BEAUMONT HOUSING FINANCE CORPORATION Betty Byram, Vice President ACCEPTED AND AGREED to this 3rd day of March, 1983. VIRGINIA_ VILLAGE/VENTURE . i C. L. Sherman, Jr. By: James J. Conway, Jr. QUARTERLY CERTIFICATE OF OCCUPANCY AND NON-DEFAULT VIRGINIA VILLAGE VENTURE The undersigned, duly authorized representatives of the Virginia Village Venture (the "Owner") , a joint venture duly organized and validly existing under the laws of the State of Texas, and fully qualified to transact business in the State of Texas, in connection with the Beaumont Housing Finance Corporation ' s $1, 600,000 Multi-Family Housing Revenue Bonds , Series 1983 (Virginia Village Development) (the "Bonds") , do hereby make the following certifications, warranties and representations for the benefit of the Beaumont Housing Finance Corporation (the "Corporation") , the Trustee under that certain Trust Indenture dated as of March 1, 1983 , by and between the Corporation and InterFirst Bank-Beaumont, as trustee, and for the benefit of all persons interested in the exemption from Federal Income Taxation of the interest on the Bonds (a11 italicized or capitalized terms used herein shall have the meanings ascribed to them in that certain Loan Agreement (the "Agreement" ) between the Corporation and the Owner dated as of March 1, 1983 , and in the Internal Revenue Code of 1954 , as amended (the "Code") , and specifically Sections 103 and 167 of the Code and the Treasury Regulations promulgated hereunder) : (1) percent of the Units comprising a Part of or Functionally-Related and Subordinate to the Development were rented or held open as available for rental (within the meaning of Sections 103 (b) (12) (c) and 167 of the Code) , on a continuous basis , by Families or Individuals of Low or Moderate Income at all times during the 3-month period immediately preceding the date of this Certificate, and at all times during the Qualified Project Period. No part of the Units, Proximate Buildings and Structures, land and Facilities comprising a Part of or Functionally-Related and Subordinate to the Development were used as Owner-Occupied Residences, or were otherwise utilized, rented, - or held out for rental as a hotel, motel, dormitory, fraternity or sorority house, rooming house, hospital, nursing home, sanitarium, rent house, trailer park or court, or for any other use on a "transient" basis, or were used by any partner, venturer, or participant in the Owner. (2) percent of the Units comprising a Part of or Functions ry-Related and Subordinate to the Development were occupied at all times during the 3-month period immediately preceding the date of this certificate , by persons or families of "low and moderate income" (as determined in accordance with the Rules and Regulations adopted by the Board of Directors on behalf of the Corporation) . (3) As of the date of this Certificate , neither the Owner nor any of its tenants are in Default (and no event has occurred which, with the lapse of time or notice or both, would constitute an Event of Default) with respect to the performance of any of its covenants , representations , and obligations , express or implied, under the Agreement , the Deed of Trust , the Trust Indenture, the Section 8 Agreement, the Section 8 Contract , the Bond Resolution, or any other document delivered by the Owner in connection with the Bonds . Dated this day of 19 VIRGINIA VILLAGE VENTURE James J . Conway, Jr. C. L. Sherman, Jr: QUARTERLY CERTIFICATE OF OCCUPANCY AND NON-DEFAULT VIRGINIA VILLAGE VENTURE The undersigned, duly authorized representatives of the Virginia Village Venture (the "Owner") , a joint venture duly organized and validly existing under the laws of the State of Texas , and fully qualified to transact business in the State of Texas , in connection with the Beaumont Housing Finance Corporation ' s $1 , 600 , 000 Multi-Family Housing Revenue Bonds , Series 1983 (Virginia Village Development) (the "Bonds") , do hereby make the following certifications , warranties and representations for the benefit of the Beaumont Housing Finance Corporation (the "Corporation") , the Trustee under that certain Trust . Indenture dated as of March 1 , 1983 , by and between the Corporation and InterFirst B.ank-Beaumont , as trustee, and for the benefit of all persons interested in the exemption from Federal income Taxation of the interest on the Bonds (all italicized or capitalized terms used herein shall have the meanings ascribed - to them in that certain Loan Agreement (the "Agreement") between the Corporation and the Owner dated as of March 1 , 1983 , and in the Internal Revenue Code of 1954 , as amended (the "Code") , and specifically Sections 103 and 167 of the Code and the Treasury Regulations promulgated hereunder) : (1) percent of the Units comprising a Part of or Functionally-Related and Subordinate to the Development were rented or held open as available for rental (within the meaning of Sections 103 (b) (12) (c) and 167 of the Code) , on a continuous basis , by Families or Individuals of Low or Moderate Income at all times during the 3-month period immediately preceding the date of this Certificate , and at all times during the Qualified Project Period. No part of the Units , Proximate Buildings and Structures , land and Facilities comprising a Part of or - Functionally-Related and Subordinate to the Development were used as Owner-Occupied Residences , or were otherwise utilized , rented , or held out for rental as a hotel , motel, dormitory , fraternity or sorority house , rooming house , hospital , nursing home , sanitarium, rent house , trailer park or court , or for any other use on a "transient" basis , or were used by any; partner, venturer, participant , employee , officer or agent of the Owner (except a resident manager) . (2) percent of the Units comprising a Part of or ` Functiona y-Related and Subordinate to the Development were occupied at all times during the 3-month period immediately preceding the date of this certificate , by persons or families of "low and moderate income" (as determined in accordance with the Rules and Regulations adopted by the Board of Directors on behalf of the Corporation) . (3) As of the date of this Certificate , neither the Owner nor any of its tenants are in Default (and no event has occurred which, with the lapse of time or notice or both, would constitute an Event of Default) with respect to the performance of any of its covenants , representations , and obligations , express or implied, under the Agreement , the Deed of Trust, the Trust Indenture , the Section 8 Agreement , the Section 8 Contract , the Bond Resolution , or any other document delivered by the Owner in connection with the Bonds . Dated this day of 19 VIRGINIA VILLAGE VENTURE James J . Conway, Jr. j C. L. Sherman, Jr' . -2- TENANT INCOME CERTIFICATION VIRGINIA VILLAGE VENTURE This Tenant Income Certification, covering each person who will live in Unit or Apartment of the Virginia Village Apartments after the beginning of the "Certification Year" (as defined below) , is made for the purpose of comply- ing with the income certification and recordkeeping require- ments of Section 167 (k) of the Internal Revenue Code of 1954 , as amended (the "Code") , and Treasury Reg. § 1. 167 (k) 4 promulgated thereunder relating to the election to depre- ciate certain rehabilitation expenditures attributable to qualifying Low-Income Rental Housing (as that term is de- fined under Section 167 of the Code) over a 60-month period. This certification will also be used for purposes of calcu- lating the "adjusted income" (within the meaning of Section 167 of the Code) of tenants in order to determine whether tenants are families or individuals of "low or moderate income" within the meaning of Sections 103 and 167, and for purposes of determining whether tenants are persons of "low and moderate income" as determined in accordance with the rules and regulations adopted by the Board of Directors of Beaumont Housing Finance Corporation. The undersigned tenant of Unit or Apartment , Virginia Village Apartments , does hereby certify, warrant and represent the following: The names and anticipated total annual incomes "'or the Certification Year of each person who is to live in or occupy Unit or Apartment on a regular basis during the Certification Year (including the names and number of, minors who are to live in or occupy the designated Unit or Apart- ment on a regular basis during the Certification Year and the anticipated total annual income of each such minor) are as follows: ANNUAL INCOME FOR NAME CERTIFICA'T'ION YEAR WARNING: IF THIS CERTIFICATION IS SIGNED BY A TENANT IN CONNECTION WITH AN APPLICATION FOR A SUBSIDY, RENT SUPPLEMENT, MORTGAGE INSURANCE, OR OTHER FORM OF ASSISTANCE TO EITHER THE LESSOR (VIRGINIA VILLAGE VENTURE) OR THE TENANT FROM A DEPARTMENT OR AGENCY OF THE UNITED STATES, THE TENANT SHOULD BE AWARE THAT IT IS A CRIMINAL OFFENSE TO MAKE A WILLFULLY FALSE STATEMENT OR MISREPRESENTATION TO ANY DEPARTMENT OR AGENCY OF THE UNITED STATES AS TO ANY MATTER WITHIN ITS JURISDICTION. TENANT, UNIT OR APARTMENT THE STATE OF TEXAS § COUNTY OF JEFFERSON § BEFORE ME, the undersigned authority, on this day personally appeared � known to s me to be the person who ;e name is subscribed to the fore going instrument, and acknowledged to me that he executed the same for the purposes and consideration therein ex- pressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of 19 Notary Public, State of Texas -2- DEFINITIONS IN TENANT INCOME CERTIFICATION "Certification Year" means the twelve (12) month period which begins on the later of (a) the date on which the prop- erty attributable to the rehabilitation expenditures allocated to the Unit or Apartment is first placed in service (within the meaning of Treasury Reg. §1. 167 (k) -1 (b) (3) ) , or (b) the date on which the tenant first -Occupies the Unit or Apartment on a regular basis, or signs a lease with respect to the Unit or Apartment, whichever occurs first. "Anticipated total annual income" means all payments received from all sources, including, but not limited to: (i) the gross amount, before payroll deductions, of wages, salaries, overtime pay, tips, commissions, and bonuses; (i-i) interest and dividends; (iii) periodic payments received from Social Security, annuities, insurance poli- cies, retirement funds, pensions, disability or death benefits -and other similar types of periodic receipts; (iv) payments in lieu of earnings, such as unemployment and disability compensation, and s everance pay; (v) public assistance payments which include an amount specifically designated for shelter and utilities, which is subject to adjustment (but only the amount of allowance exclusive of the amount specifically designated for shelter and utili- ties, plus the maximum amount the assistance agency could allow for shelter and utilities) ; (vi) periodic and deter- minable allowances, such as alimony and child support Payments, and regular contributions or gifts received from persons not residing in the Unit or Apartment; and (vii) all regular pay, special pay and allowances of a member of the armed forces (whether or not living in the Unit or Apart- ment) who is head of the family or a spouse of a tenant, Income does not include amounts specifically for or in reimbursement of the cost of medical and accident insurance and worker ' s compensation, education scholarship payments (except that any amount not used for education expenses is included as income) , and the value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1964 in excess of the amount actually charged the eligible household. e SUPPLEMENT NO. 1 TO DEED OF TRUST, ASSIGNMENT OF RENTS , AND SECURITY AGREEMENT FROM VIRGINIA VILLAGE VENTURE TO DONALD W. CIOBAN AS MORTGAGE TRUSTEE Dated as of June 1 , 1983 EXHIBIT B SUPPLEMENT NO. 1 TO DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT THE STATE OF TEXAS § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF JEFFERSON § THIS SUPPLEMENT NO. 1 TO DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT, dated as of June 1 , 1983 , together with any amendments or supplements hereto (the "Supplemental Deed of Trust") , by Virginia Village Venture (the "Owner") , a Texas joint venture duly qualified to do business in the State of Texas (the "State") , for the use and benefit of Beaumont Housing Finance Corporation (the "Corporation") , duly organized and created as a housing finance corporation under the Texas Housing Finance Corporations Act , Art. 12691-7 , Vernon' s Annotated Texas Civil Statutes , as amended (the "Act") , to Donald W. Cioban, as Mortgage Trustee (together with any successor or substitute in such capacity, the "Mortgage Trustee") . W I T N E S S E T H: WHEREAS , pursuant to the Act, a Bond Resolution adopted by the Corporation on March 2, 1983 (the "Bond Resolution") and a Trust Indenture dated as of March 1 , 1983 (the "Trust Indenture") , the Corporation issued a series of multi-family housing revenue bonds designated as Beaumont Housing Finance Corporation $1 , 600 , 000 Multi-Family Housing Revenue Bonds , Series 1983 (Virginia Village Development) , dated as of March 1 , 1983 (the "Series 1983 Bonds") , in order to finance a portion of the cost of a Development consisting of approximately 138 dwelling units located on the real property within the City that is described in Exhibit "A" hereto (the "Development") ; and WHEREAS , pursuant to the terms and provisions of a Loan Agreement dated as of March 1 , 1983 (the "Agreement") , the Corporation loaned the proceeds from the sale ,of the Series 1983 Bonds to the Owner in order to finance a of of the cost of the Development; and WHEREAS, to evidence its obligation to make payment under the Agreement, the Owner executed its promissory note in the original principal amount of $1 , 600 , 000 payable to the order of the Corporation (the "Note") and secured the payment of the Note by executing and delivering a Deed of Trust, Assignment of Rents and Security Agreement to Donald W. Cioban, as Mortgage Trustee , dated as of March 1, 1983 (the "Deed of Trust") , which Deed of Trust has been duly recorded in Vol. , page of the M&L Records of Jefferson County, Texas , and is incorporated herein by this reference for all purposes; and WHEREAS , in order to secure payment of the Bonds the Corporation duly assigned all of its right , title and interest in and to the Note and the Deed of Trust to InterFirst Bank-Beaumont as Trustee (the "Trustee") , by Collateral Assignment and Security Agreement dated as of March 1 , 1983 (the "Collateral Assignment") ; and WHEREAS , Section 10 of the Bond Resolution authorizes the issuance of additional parity bonds upon satisfaction of certain requirements , including obtaining the consent of the holders of at least 75% of the aggregate principal amount of the Series 1983 Bonds then outstanding; and WHEREAS , the Corporation adopted a bond resolution dated June , 1983 (the "Supplemental Bond Resolution") , authorizing the issuance of its $350 , 000 Multi-Family Housing Revenue Bonds , Series 1983-A (Virginia Village Development) (the "Series 1983-A Bonds") , for the purpose of providing proceeds to loan to the Owner in order to finance a portion of the cost of (i) completion of the reconstruction and rehabilitation of 18 dwelling units comprising a part of the Development and (ii) construction of an additional 12 dwelling units to comprise a part of the Development (collectively the "Supplemental Development") , all of which is to be located on the real estate within the City that is described in Exhibit "A" hereto; and WHEREAS , all of the requirements of the Bond Resolution to be met as a prerequisite to the issuance of the Series 1983-A Bonds have been or will be met no later than the date on which the Series 1983-A Bonds are delivered to the purchasers thereof; and WHEREAS, in order to secure further its obligations to make Installment Loan Payments (as hereinafter defined) under the Agreement as supplemented, the Note and the Supplemental Note, in amounts sufficient to pay the principal of and premium, if any, and agreed liquidated- damages , if any, and interest on the Bonds , including the Series 1983 Bonds and the Series 1983-A Bonds , the Owner -2- desires to execute and deliver this Supplement No. 1 to Deed of Trust; and WHEREAS , the Supplemental Note and this Supplement No. 1 to Deed of Trust will be assigned to the Trustee to further secure the payment of the Bonds , including the Series 1983 Bonds and the Series 1983-A Bonds . NOW, THEREFORE, the Owner, in consideration of the premises , and of the debts , the acceptance of the trusts created, covenants and agreements hereinafter mentioned and the sum of Ten Dollars ($10. 00) , in lawful money of the United States of America, to it duly paid at or before the execution and delivery of these presents and for other good and valuable consideration, the receipt and sufficiency of all of which is hereby acknowledged, in order to secure further the payment of the Installment Loan Payments , the Note, the Supplemental Note, and all other Indebtedness (as hereinafter defined) and the performance and observance by the Owner of all the covenants expressed or implied herein, in the Agreement as supplemented and in the Trust Indenture, does hereby bargain, sell, grant, convey, transfer, mortgage, pledge and assign to the Mortgage Trustee , and its successors and substitutes in trust hereunder, the following described additional real and personal property, rights , titles , interests and estates lying and being situated in the County of Jefferson, in the State of Texas (herein collectively called the "Supplemental Trust Estate") , to-wit: (a) All of the Owner' s right, title and interest in and to the real estate which comprises the Site (as hereinafter defined) , and which is described in Exhibit "A" attached hereto, and on which the Supplemental Development shall be situated. (b) All of the Owner' s right, title and interest in and to any buildings and other improvements which have been or may hereafter be placed on the Site as a part of the Supplemental Development , all of which shall be deemed and considered to be a part of the Site. (c) All fixtures now or hereafter situated or placed on the Site as a part of the Supplemental Development which constitute a part of the realty. (d) All right, title and interest in and to the Site and the buildings , improvements and fixtures thereon which are acquired by the Owner after the execution of this -3- instrument, whether as a part of the Supplemental Development or otherwise. (e) Any and all rights and appurtenances belonging, incident or appertaining to the Site, or the buildings , improvements and fixtures thereon, or any part thereof which the Owner may now have or hereafter acquire as a part of the Supplemental Development. (f) All leases of all or any part of the above described property, including without limitation the Section 8 Agreement and the Section 8 Contract. (g) All furniture and furnishings , goods , equipment , property and fixtures of any kind or character now or hereafter attached or related to or situated on or used or acquired on or in connection with the use of the above described property. (h) All accessions to and substitutions for and all products , proceeds and replacements of any of the foregoing. TO HAVE AND TO HOLD the said Supplemental Trust Estate, whether now owned or held or hereafter acquired, unto the Mortgage Trustee , or any substitute Mortgage Trustee, his successors and assigns , forever, subject only to Permitted Encumbrances . IN TRUST NEVERTHELESS , upon the terms and trusts set forth in the Deed of Trust as hereby supplemented to secure further the payment of the Installment Loan Payments , the Note , the Supplemental Note , and all other Indebtedness , present and future, owing and to become owing, and to secure further the performance of and compliance with the obligations , covenants and conditions of the Agreement as supplemented, the Note, the Supplemental Note , and the Deed of Trust as hereby supplemented. IT IS HEREBY COVENANTED, DECLARED AND AGREED that the lien or interest created by the Deed of Trust as herein supplemented to secure the payment of the Installment Loan Payments , the Note , the Supplemental Note , and all other Indebtedness , both present and future, shall be first , prior and superior to any lien, reservation of title or other interest heretofore, contemporaneously or subsequently suffered or granted by the Owner, its successors or assigns , except only those, if any, expressly hereinafter referred to or described, and that the Trust Estate (including the Supplemental Trust Estate) is to be held, dealt with and -4- disposed of by the Mortgage Trustee, upon and subject to the following terms , covenants , conditions , uses , agreements and trusts set forth in the Deed of Trust as herein supplemented. ARTICLE I DEFINITIONS AND INTERPRETATIONS Section 1 . 01 - DEFINITIONS. Except as may be otherwise provided herein, all words and terms used herein shall have the same meaning as contained in the Deed of Trust. Section 1 . 02 - AMENDMENT OF DEFINITIONS. Definitions contained in Article I of the Deed of Trust are hereby amended and supplemented as follows : "Development" means the interest of the Owner in the Site, the Facilities (including the Supplemental Facilities) , and the Premises (including the Supplemental Premises) , which comprise the Development (including the Supplemental Development) as described in Exhibit "A" to the . Agreement as supplemented. "Facilities" means the facilities which are now or may hereafter be located on the Site described in Exhibit "A" hereto, including Facilities as defined in the Deed of Trust and Supplemental Facilities as defined herein, together with any modifications -to, substitutions for or additions thereto. "Indebtedness" means : (a) All Installment Loan Payments (including Supplemental Installment Loan Payments) ; (b) The Note and the Supplemental Note and any extensions , renewals and rearrangements thereof or the indebtedness evidenced thereby; (c) All other indebtedness of the Owner arising out of, contained or referred to in the Agreement as supplemented; (d) Any obligation owing by the Owner to the Trustee under any other agreement; and -5- (e) Any and all sums, together with interest accruing thereon, which may hereafter be advanced by or on behalf of the Corporation, the Trustee or the Mortgage Trustee under the terms of the Deed of Trust as supplemented on account of the failure of the Owner to keep, observe or perform the Owner' s covenants under the Deed of Trust as supplemented. "Installment Loan Payments" means the payments required to be made by the Owner on a limited recourse basis to amortize the Series 1983 Bonds and the Series 1983-A Bonds , as provided for in the Bond Resolution and the Supplemental Bond Resolution, including the principal of, redemption premium, if any, and interest on all of such Bonds when due (whether at stated maturity, upon redemption prior to stated maturity, or upon acceleration of stated maturity) , any agreed liquidated damages owed to the Bondholders , and all agreed fees and expenses of the Trustee, the Registrar, and any Paying Agent for all of such Bonds , together with any other payments required by the Bond Resolution, the Supplemental Bond Resolution, or the Trust Indenture. "Premises" means the property described in Exhibit "A" to the Deed of Trust and the Supplemental Premises as defined below. "Site" means the real estate which is described in Exhibit "A" to the Deed of Trust and in Exhibit "A" to this Supplement No. 1 , and any other additional real estate which may be acquired for the Development and the Supplemental Development. "Trust Estate" means the Trust Estate as described in the Deed of Trust and the Supplemental Trust Estate as described herein. Section 1 . 03 - ADDITIONAL DEFINITIONS. Article I of the Deed of Trust is hereby amended by adding to the following definitions : "Series 1983 Bonds" means any and all revenue bonds issued as the series known as Beaumont Housing Finance Corporation $1, 600 , 000 Multi-Family Housing Revneue Bonds , Series 1983 (Virginia Village Development) , dated as of March 1 , 1983 . "Series 1983-A Bonds" means any and all revenue bonds issued as the series known as Beaumont Housing Finance Corporation $350 , 000 Multi-Family Housing Revenue Bonds , -6- Series 1983-A (Virginia Village Development) , dated as of June 1, 1983 . "Supplemental Bond Resolution" means the resolution adopted by the Board of Directors of the Corporation on June , 1983 , authorizing the issuance and delivery of Beaumont Housing Finance Corporation Multi-Family Housing Revenue Bonds , Series 1983-A (Virginia Village Development) , in the aggregate principal amount of $350 , 000. "Supplemental Development" means that portion of the Virginia Village Development involving completion of reconstruction and rehabilitation of 18 dwelling units in the Development and construction of an additional 12 dwelling units to become a part of the Development upon the real estate located within the City that is described in Exhibit "A" hereto. "Supplemental Facilities" means the facilities described in Exhibit "A" hereto. "Supplemental Installment Loan Payments" means the portion of Installment Loan Payments required to be made by the Owner on a limited recourse basis to amortize the Series 1983-A Bonds , as provided for in the Supplemental Bond Resolution. "Supplemental Note" means the limited recourse promissory note which represents the loan of the proceeds from the sale of the Series 1983-A Bonds . "Supplemental Premises" means the property described in Exhibit "A" hereto. Section 1 . 04 - INTERPRETATIONS. Capitalized terms which are used but -not expressly defined herein shall have the same meaning as set forth in the Agreement as supplemented or in the Supplemental Bond Resolution unless the context indicates otherwise. ARTICLE II- EFFECT OF DEED OF TRUST AND SUPPLEMENT Section 2. 01 - APPLICABILITY OF DEED OF TRUST. All of the terms and provisions of the Deed of Trust as herein` supplemented shall continue in full force and effect and shall be applicable to the entire Development, including the Supplemental Development , and to the Trust Estate, including -7- the Supplemental Trust Estate, and to all of the Bonds , including the Series 1983 Bonds and the Series 1983-A Bonds . The Deed of Trust as herein supplemented shall equally and ratably secure the Installment Loan Payments (including Supplemental Installment Loan Payments) , the Note, the Supplemental Note and all other Indebtedness with the same effect and to the same extent as if the Supplemental Note had been issued, the Supplemental Installment Loan Payments had been agreed to be paid, and the Supplemental Development and the Supplemental Trust Estate had been included in the Development and the Trust Estate , respectively, at the time of execution, delivery and recordation of the Deed of Trust. Section 2. 02 - COVENANTS. The Owner hereby confirms and carries forward each and every agreement, covenant, warranty and representation made by it in the Deed of Trust and hereby warrants that each such agreement, covenant, warranty or representation is true and correct in all respects on and as of the date hereof. IN WITNESS WHEREOF, Virginia Village Venture has caused this Supplement No. 1 to Deed of Trust to be signed on its behalf by its duly authorized representatives as of the date . first written above. VIRGINIA VILLAGE VENTURE By: C. L. Sherman, Jr. By: James J. Conway, Jr. ACCEPTED BY: BEAUMONT HOUSING FINANCE CORPORATION By. President -8- a 3 THE STATE OF TEXAS § COUNTY OF JEFFERSON § BEFORE ME, the undersigned authority, on this day personally appeared C. L. Sherman, Jr. and James J. Conway, Jr. , venturers and participants in Virginia Village Venture, a joint venture formed under the laws of the State of Texas , known to me to be the persons whose names are subscribed to the foregoing instrument, and acknowledged to me that they executed the same for the purposes and consideration therein expressed, in the capacity therein stated as the act and deed of Virginia Village Venture. GIVEN UNDER MY HAND AND SEAL OF OFFICE on this the day of June, 1983 . Notary Public, State of Texas THE STATE OF TEXAS § COUNTY OF JEFFERSON § BEFORE ME, the undersigned authority, on this day personally appeared Betty J. Byram, President of Beaumont Housing Finance Corporation, known to me to be the person and officer whose name is subscribed to the foregoing instrument , and acknowledged to me that he executed the same for the purposes and consideration therein expressed, in the capacity therein stated and as the act and deed of said Corporation. GIVEN UNDER MY HAND AND SEAL OF OFFICE on this the day of June, 1983. Notary Public, State of Texas -9- EXHIBIT "A" SUPPLEMENT NO. 1 TO DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT DESCRIPTION OF THE REAL ESTATE BEING an 11. 41 acre tract of land out of the M. C. Cartwright Subdivision in the J. W. Bullock League, Abstract No. 7 in Beaumont, Jefferson County, Texas and being that same tract of land described in Deed of Trust between Lincoln Housing Corporation and Leonard Quinn, Trustee , dated May 16 , 1960 , and recorded in Vol. 977 , Page 213 of the Deed Records of Jefferson County, Texas , and said 11. 41 acre tract of land being more particularly described by metes and bounds as follows : BEGINNING at a 5/8 inch steel rod placed in the South right of way line of Booker Street and in the East right of way line of 4th Street locating the Northwest corner of that certain tract of land described in Deed of Trust from said Lincoln Housing Corporation and from said steel rod the Northwest corner of the South 6 acres of Lot 37 of the M. C. Cartwright Subdivision bears north a distance of 20. 0 feet and said steel rod also locates the Northwest and the beginning corner of the tract -of land herein described; THENCE South 89 degrees 59 minutes 40 seconds East with the South line of Booker Street a distance of 682.50 feet to a concrete monument found for corner; THENCE South 0 degrees 00 minutes 20 seconds West with the West line of Pradice Street a distance of 932. 83 feet to a concrete monument found for corner in the North right of way line of Virginia Street; THENCE West with said line a distance of 196 . 17 feet to a 5/8 inch steel rod placed for' corner; said steel rod also locates the Eastmost corner of Lincoln Terrace Third Addition, a subdivision to the City of Beaumont, Jefferson County, Texas , that is recorded in Vol 9 , Page 37 of the Map Records of Jefferson County, Texas; r THENCE North 40 degrees 15 minutes 20 seconds West with the Northeasterly line of Lots 9 through 1 of said Lincoln Terrace Third Addition and with the Northeasterly line of that certain tract of land conveyed by C. W. DuPerior to the Magnolia Pipeline Company for a pipeline easement that is recorded in Vol. 996 , Page 633 of the Deed Records of Jefferson County, Texas , a distance of 752. 97 feet to a 1/2 inch iron rod found for corner in the East right of way line of 4th Street; THENCE North 0 degrees 01 minutes 40 seconds East with the East line of 4th Street a distance of 358 .32 feet to the PLACE OF BEGINNING, containing 11. 41 acres of land, more or less . DESCRIPTION OF THE SUPPLEMENTAL DEVELOPMENT The Development was originally planned to consist of . the renovation of 138 units in an existing 150-unit apartment complex located on the real estate described above. The Supplemental Development is to consist of (i) completion of the renovation of 18 units in the Development and (ii) the construction of 12 additional units. After completion of the Development and Supplemental Development , 150 units will be available for rental. Each apartment contains 600 square feet of living area with the typical unit having two bedrooms , 1 bath, kitchen and living room. The refurbishing of the 138 units will include new roofing, sheetrocking, painting, flooring, electrical facilities , as well as new doors and windows for the units . The 12 additional units will be constructed in a similar manner using similar materials . It is also anticipated that additional funds will be expended for landscaping and parking. t SUPPLEMENT NO. 1 TO COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT FROM BEAUMONT HOUSING FINANCE CORPORATION TO INTERFIRST BANK-BEAUMONT, AS TRUSTEE RELATING TO BEAUMONT HOUSING FINANCE CORPORATION $350 , 000 MULTI-FAMILY HOUSING REVENUE BONDS , SERIES 1983-A (VIRGINIA VILLAGE DEVELOPMENT) Dated as of June 1 , 1983 EMIBIT G SUPPLEMENT NO. 1 TO COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT THE STATE OF TEXAS § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF JEFFERSON § Section 1 . Grant of Security Interest in the Supplemental Collateral The undersigned, Beaumont Housing Finance Corporation (the "Corporation") , duly organized and created as a housing finance corporation under the Texas Housing Finance Corporations Act, Art. 12691-7 , Vernon' s Annotated Texas Civil Statutes , as amended (the "Act") , for good and valuable consideration received, by these presents hereby pledges , conveys , assigns , transfers and delivers and grants a security interest to InterFirst Bank-Beaumont, a state banking corporation, as trustee (the "Trustee") [ together with any successor trustee at the time serving as such under the Trust Indenture dated as of March 1, 1983 , between the Corporation and the Trustee (the "Trust Indenture") ] in the . following described collateral (the "Supplemental Collateral") : (a) All right, title, and interest in and to the promissory note from Virginia Village Venture (the "Owner") dated as of June 1 , 1983 , in the principal sum of $350, 000 , and payable to the Corporation (the "Supplemental Note") ; (b) All rights , titles , interests , estates , liens , privileges , claims , demands , and equities arising under that certain Supplement No. 1 to Deed of Trust, Assignment of Rents and Security Agreement dated as of June 1 , 1983 (the "Supplemental Deed of Trust") , from the Owner to Donald W. Cioban, as mortgage trustee, for the use and benefit of the Corporation, which was duly recorded in the M&L Records of Jefferson County, Texas , on 1983 , under Clerk' s File No. ; to have and to hold the Supplemental Collateral, together with all rights , titles , interests , estates , liens , privileges , claims , demands , and equities existing or tQ exist in connection therewith as security therefor unto the Trustee, its successors and assigns forever. Section 2. Definitions Unless the. context otherwise expressly requires , all capitalized terms used herein shall have the same meanings as set forth in the Supplemental Deed of Trust. Section 3 . Effect on the Bonds 3 . 01 This assignment and security interest is granted to the Trustee to additionally secure the payment of the principal of, redemption premium, if any, agreed liquidated damages , if any, and interest on the Series 1983 Bonds and the Series 1983-A Bonds , according to their tenor and effect, and the performance and observance by the Corporation of all the covenants expressed or implied in the Collateral Assignment as hereby supplemented, and in the Trust Indenture, the Series 1983 Bonds and the Series 1983-A Bonds , the Bond Resolution, the Supplemental Bond Resolution, the Agreement as supplemented, the Note and the Supplemental Note (collectively the "Indebtedness") . 3. 02 All of the terms and provisions of the Collateral Assignment as herein supplemented shall continue in full force and effect and shall be applicable to all of the Collateral , including the Supplemental Collateral , and to all of the Bonds , including the Series 1983 Bonds and the Series 1983-A Bonds . The Collateral Assignment as herein supplemented shall equally and ratably secure all of the Indebtedness with the same effect and to the same extent as if the Supplemental Collateral has been included in the Collateral at the time of execution, delivery and recordation of the Collateral Assignment. IN WITNESS WHEREOF, the Corporation has executed this Supplement No. 1 to Collateral Assignment and Security Agreement as of the day of June, 1983 . BEAUMONT HOUSING FINANCE ATTEST: CORPORATION By: Secretary President (SEAL) -2- THE STATE OF TEXAS § COUNTY OF JEFFERSON § BEFORE ME, the undersigned authority, on this day per- sonally appeared Betty J. Byram, President of Beaumont Housing Finance Corporation, known to me to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, and in the capacity therein stated, as the act and deed of said Corporation. GIVEN UNDER MY HAND AND SEAL OF OFFICE this the day of June, 1983 . Notary Public, State of Texas Typed or Printed Name My Commission expires : -3- �V. �� SUPPLEMENT NO. 1 TO GUARANTEE AGREEMENT BETWEEN INTERFIRST BANK-BEAUMONT, AS TRUSTEE AND C. L. SHERMAN, JR. , JAMES J. CONWAY, JR. , WAYNE D. SHERMAN, ROBERT G. QUINN, J. D. MARTIN III , A. S. CRAWFORD , AND F. L. STANLEY EMIBIT D SUPPLEMENT NO. 1 TO GUARANTEE AGREEMENT This Supplement No. 1 to Guarantee Agreement, dated as of June 1 , 1983 ("Supplement No. 1") , made by C. L. Sherman, Jr. , James J. Conway, Jr. , Wayne D. Sherman, Robert G. Quinn, J. D. Martin III, A. S. Crawford and F. L. Stanley (the "Guarantors") , and accepted by InterFirst Bank-Beaumont, as Trustee under that certain Trust Indenture dated as of March 1, 1983 (the "Trustee" and "Trust Indenture" , respectively) . W I T N E S S E T H: WHEREAS , the Guarantors are the venturers and the par- ticipants in Virginia Village Venture, a joint venture formed under the laws of the State of Texas (the "Owner") ; and WHEREAS, the Guarantors have heretofore executed a Guarantee Agreement dated as of March 1 , 1983 (the "Guarantee") , in order to induce InterFirst Bank-Beaumont, Allied Bank Beaumont, First City National Bank of Beaumont , Texas Commerce Bank-Beaumont, N.A. , Parkdale Bank, and Texas Bank of Beaumont , Texas (the "Purchasers") , to purchase the $1 ,600 , 000 Multi-Family Housing Revenue Bonds , Series 1983 (Virginia Village Development) (the "Series 1983 Bonds") , issued by the Beaumont Housing Finance Corporation (the "Corporation") as of March 1 , 1983 ; and WHEREAS, the Corporation now intends to issue and sell its $350 , 000 Multi-Family Housing Revenue Bonds , Series 1983-A (Virginia Village Development) (the "Series 1983-A Bonds") , pursuant to the terms and provisions of the Trust Indenture and the Supplemental Bond Resolution adopted by the Corporation on June 1983 (the "Supplemental Bond Resolution") ; and WHEREAS, it is necessary for the Guarantors to execute and deliver this Supplement No. 1 in order to induce InterFirst Bank-Beaumont, Allied Bank Beaumont, First City National Bank of Beaumont , Texas Commerce Bank-Beaumont, N.A. , and Parkdale Bank (the "Purchasers") , to purchase the Series 1983-A Bonds , and the purchase of the series 1983-A Bonds will be of direct financial benefit to the Guarantors , and this Supplement No. 1 is executed and delivered in consideration of the purchase of the Series 1983-A Bonds by the Purchasers and the resulting financial benefit to the Guarantors ; and WHEREAS, the execution and delivery of this Supplement No. 1 and the performance of the transactions contemplated hereby will not violate any law or regulation, or any judicial order, judgment, decree, or injunction, or contravene the provisions of or constitute a default under any agreement , indenture, or other instrument to which any of the Guarantors may be a party. NOW THEREFORE, the Guarantors and the Trustee contract and agree as follows : Section 1. 01. GUARANTEE OF THE SERIES 1983-A BONDS. The Guarantors hereby unconditionally, absolutely and irrev- ocably guarantee in the proportions stated in Section 4 . 01 below, without offset , recoupment, or counterclaim whatso- ever, the full, complete, and prompt payment and performance by the Owner of each and every representation, covenant and agreement made by the Owner in that certain Loan Agreement dated as of March 1 , 1983 (the "Agreement") , as supplemented by that certain Supplement No. 1 to Loan Agreement dated as of June 1 , 1983 , by and between the Corporation and the Owner, and with respect to the Bond Resolution, the Supple- mental Bond Resolution, the Trust Indenture , the Deed of Trust and the Supplement No. 1 to Deed of Trust referred to therein, and by this Supplement No. 1 the Guarantors do covenant to and with the Trustee for the benefit of the Pur- chasers and the successive holders of the Series 1983-A Bonds , their respective successors and assigns , that to the extent the Owner should fail for any reason whatsoever in the payment of any such amount or in the performance of any such representation, covenant or agreement, including with- out limitation the agreement to make the required Install- ment Loan Payments (as defined in the Agreement as supple- mented) , the Guarantors will promptly perform the same to the extent of such failure but only in the proportions stated in Section 4 . 01 below. Section 2 . 01 . ASSIGNMENT. The Guarantors shall not assign t eir interests in t is Supplement No. 1 or any of their obligations hereunder except as specifically provided herein. The Guarantors may assign their interests in this Supplement No. 1 to another party without the consent of the Trustee, provided that the Guarantors , under the terms of any such assignment, shall remain and be primarily responsible and liable for all of their obligations hereunder, including particularly but not limited to the making of all payments required hereunder, when due. Section 3 . 01 . SURVIVORSHIP. In the event of the death of a Guarantor, the estate of the deceased Guarantor shall continue to be fully liable hereon as to the obligations guaranteed hereby, as existing at the date of death, and any renewals or extensions thereof. As to all surviving Guaran- -2- tors , this guarantee shall continue in full force and effect after the death of a Guarantor, not only as to the obliga- tions guaranteed hereby existing at that time, but also as to obligations of the Owner thereafter incurred under the Agreement. Section 4 . 01. LIMITS ON LIABILITY. It is agreed and understood that the liability of the original Guarantors shall be limited to the following proportions of the obligations of the Owner guaranteed hereunder: C. L. Sherman, Jr. 257 James J. Conway, Jr. 12-1/27 Wayne D. Sherman 12-1/27 Robert G. Quinn 12-1/27 J. D. Martin III 12-1/27 A. S. Crawford 12-1/27 F. L. Stanley 12-1/27 Section 5 . 01. WAIVERS BY GUARANTORS. The Guarantors waive notice of issuance of the Series 1983-A Bonds and notice from the Trustee or the holders from time to time of any of the Series 1983-A Bonds or of the interest coupons appertaining thereto, of their acceptance of and reliance on this Supplement No. 1 , and the Guarantors also waive pre- sentment, demand for payment, protest and notice of nonpay- ment or dishonor and all other notices and demands whatso- ever. Subject to the provisions of Section 4 . 01 hereof, the Guarantors further waive any right they may have to (a) re- quire the Trustee or -the Corporation to proceed against the Owner, (b) require the Trustee to proceed against or exhaust any security granted by the Corporation, or (c) require the Trustee or the Corporation to pursue any other remedy within the power of either the Trustee or the Corporation, and the Guarantors agree that all of their obligations under this Supplement No. l are independent of the obligations of the Owner under the Agreement as supplemented, and that a separate action may be brought against them whether or not an action is commenced against the Owner under the Agreement as supplemented. Section 6 . 01. GOVERNING LAW. The Guarantors agree that any suit , action, or other legal proceeding arising under this Supplement No. 1 may be brought in the applicable court of record in the State of Texas or the courts of the United States of America located in Texas , and consent t-o the jurisdiction of each such court in any such suit, action, or proceeding, and waive any objection which they may have to the laying of venue of any suit , action, or proceeding in any of such courts . In this connection, the parties hereby agree that this Supplement No. 1 shall be -3- governed in all respects , including validity, interpreta- tion, and effect, by, and shall be enforceable in accordance with the laws of the State of Texas . Section 7 . 01 . AMENDMENT. This Supplement No. 1 shall never e c ange or amended in any way which would relieve the Guarantors of their obligations hereunder. Section 8. 01 . TERM OF AGREEMENT. The term of this Supplement No. l shall a from the date hereof until all payments and indemnities required to be made by the Guaran- tors pursuant hereto shall have been made. Section 9 . 01 . DEFINITIONS. All capitalized terms used herein shall ave the same meaning set forth in the Agree- ment as supplemented and the Supplemental Bond Resolution. Section 10 . 01. NOTICES. Any notice, request, or other communication under this Supplement No. 1 shall be given in writing and shall be deemed to have been given by any party to all other parties upon either of the following dates : (a) One business day after the date of the mailing thereof, as shown by the post office receipt , if mailed to the other party hereto by registered or certified mail at the applicable address as follows : InterFirst Bank-Beaumont P 0. Box 5007 Beaumont, Texas 77706 C. L. Sherman, Jr. James J. Conway, Jr. Wayne D. Sherman Robert G. Quinn J. D. Martin III A. S . Crawford F. L. Stanley c/o Virginia Village Venture Attention: C. L. Sherman, Jr. 3010 Washington Blvd. Beaumont, Texas 77702 with copy to: James J. Conway, Jr. P. 0. Box 2750 Beaumont , Texas 77704 or the latest address specified by such other party in writing; or -4- (b) The date of the receipt thereof by such other party if not so mailed by registered or certified mail. Section 11. 01. SEVERABILITY. If any clause, pro- vision, or section of this Supprement No. 1 should be held illegal or invalid by any court, the invalidity of such clause, provision, or section shall not affect any of the remaining clauses , provisions , or sections hereof and this Supplement No. 1 shall be construed and enforced as if such illegal or invalid clause, provision, or section had not been contained herein. In case any agreement or obligation contained in this Supplement No. 1 should be held to be in violation of law, then such agreement or obligation shall be deemed to be the agreement or obligation of the Guarantors to the full extent permitted by law. Section 12 . 01. COSTS OF ENFORCEMENT. The Guarantors agree to pay to t e Trustee or its assigns all costs and expenses , including without limitation all court costs and reasonable attorney' s fees , incurred or paid by the Trustee or its assigns in enforcing this Supplement No. 1 . IN WITNESS WHEREOF, the undersigned have executed this . Supplement No. 1 to Guarantee Agreement as of the date first above written. C. L. Sherman, Jr. James J. Conway, Jr. Wayne D. Sherman Robert G. Quinn J. D. Martin III A. S. Craw ord ACCEPTED BY: F. L. Stanley INTERFIRST BANK-BEAUMONT By: Its : -5- June 1983 Beaumont Housing Finance Corporation P. 0. Box 3827 Beaumont, Texas 77704 InterFirst Bank - Beaumont P. 0. Box 5007 Beaumont, Texas 77706 Allied Bank Beaumont P. 0. Box 3191 Beaumont, Texas 77704 First City National Bank of Beaumont P. 0. Box 3391 Beaumont, Texas 77704 Parkdale Bank 6025 Eastex Freeway Beaumont, Texas 77707 Gentlemen: This Letter of Representation is delivered by Virginia Village Venture, a joint venture formed under the laws of the State of Texas (the "Owner") , and by C. L. Sherman, Jr. , James J. Conway, Jr. , Wayne D. Sherman, Robert G. Quinn, J. D. Martin III, A. S. Crawford and F. L. Stanley as individuals (the "Guarantors") to induce (i) the Beaumont Housing Finance Corporation (the "Corporation") , to issue, sell and deliver its $350 , 000 Multi-Family Housing Revenue Bonds , Series 1983-A (Virginia Village Development) (the "Series 1983-A Bonds") , pursuant to a trust indenture, dated as of March 1 , 1983 (the "Trust Indenture") , between the Corporation and InterFirst Bank-Beaumont as trustee (the "Trustee") , and (ii) InterFirst Bank-Beaumont, Allied Bank Beaumont, First City National Bank of Beaumont, and Parkdale Bank, as the original purchasers (the "Purchasers") , td- purchase the Series 1983-A Bonds . Terms defined in the Trust Indenture or in Supplement No. 1 to Loan Agreement EXH I B T E Page 2 dated as of June 1, 1983 , between the Corporation and the Owner are used in this Letter of Representation with the same meanings as those assigned to them therein. 1. In consideration of the issuance , sale and delivery of the Series 1983-A Bonds by the Corporation and the purchase of the Series 1983-A Bonds by the Purchasers , the Owner and the Guarantors represent , warrant , covenant and agree with and to each of you as follows : (a) The Owner is a joint venture duly organ- ized, validly existing and in good standing under the laws of the State of Texas ; the Owner is duly qualified, authorized and licensed to transact business in each jurisdiction wherein the character of the property or assets owned or held under lease by it or the nature of the business conducted by it requires its qualification, authorization or licensing; the Owner has full power and authority to enter into Supplement No. 1 to Loan Agreement , the Supplemental Note, Supplement No. 1 to Deed of Trust and this Letter of Representation, and to own its properties and to conduct its business as now being conducted; and the Owner has been duly authorized to act in all matters relating to the Series 1983-A Bonds and hereby approves , ratifies and confirms all such actions heretofore and concurrently herewith taken by it or on its behalf. (b) Each Guarantor has full power, capacity and authority to enter into Supplement No. 1 to Guarantee Agreement , and to own his properties and to conduct his business as now being conducted; and the Guarantors hereby approve, ratify and confirm all actions heretofore and concurrently herewith taken by them or on their behalf in connection with the Supplement No. 1 to Guarantee Agreement or the Series 1983-A Bonds . (c) All of the information furnished by or on behalf of the Owner and the Guarantors -- to the Corporation and the Purchasers in connection with the issuance, sale and delivery of the Series 1983-A Bonds (such information is collectively referred to herein as the "Disclosure Documents") , is true and correct in all material respects and does not omit or fail to state any material facts 63�1� Page 3 necessary or required to be stated therein to make the information provided not misleading. (d) The financial statements of the Owner and the Guarantors contained in the Disclosure Docu- ments present fairly the financial position of the Owner and the Guarantors as of the dates indicated and the results of their operations for the periods specified, and there has been no material adverse change in the condition, financial or otherwise, of the Owner and the Guarantors from that so set forth. (e) No event of default or event which, with notice or lapse of time or both, would constitute an event of default or a default under any agree- ment or instrument to which the Owner or any Guarantor may be a party or by which the Owner or any Guarantor is or may be bound or to which any of the property or assets of the Owner or any Guaran- tor is or may be subject, has occurred and is continuing; neither the execution or delivery by the Owner of this Letter of Representation, Supple- ment No. 1 to Deed of Trust, Supplement No. 1 to Loan Agreement or the Supplemental Note, and by the Guarantors of this Letter of Representation and Supplement No. 1 to Guarantee Agreement, nor the consummation of any of the transactions herein and therein contemplated nor the fulfillment of, or compliance with, the terms and provisions hereof or thereof, will contravene the Owner' s joint venture agreement or will conflict with or result in a breach of any of the terms , conditions or provi- sions of, or constitute a default under, any venture or other restriction or any bond, deben- ture, note, mortgage, indenture, agreement or other instrument to which the Owner or any Guarantor is or may be a party or by which the Owner or any Guarantor is or may be bound or to which any of the property or assets of the Owner or any Guarantor is or may be subject, or any law or any order, rule or regulation applicable to the Owner or any Guarantor of any court, - or regulatory body, administrative agency or other governmental body having jurisdic- tion over the Owner or any Guarantor or their respective properties or operations , or will result in the creation or imposition of a prohibited lien, Page 4 charge or other security interest or encumbrance of any nature whatsoever upon any property or asset of the Owner or any Guarantor under the terms of any such restriction, bond, debenture , note, mortgage, indenture, agreement, instrument, law, order, rule or regulation. (f) There is no action, suit , proceeding or investigation at law or in equity before or by any court or governmental agency or body pending or threatened, wherein an adverse decision, ruling or finding (i) would result in any material adverse change in the condition (financial or otherwise) , results of operations , business or prospects of the Owner or any Guarantor or which would materially and adversely affect the properties of the Owner or any Guarantor, and which has not been disclosed to the Purchasers and the Corporation, or (ii) would materially and adversely affect the transactions contemplated by, or the validity or enforceability of, this Letter of Representation, the Supplemental Bond Resolution, Supplement No. 1 to Loan Agree- ment, the Supplemental Note, Supplement No. 1 to Deed of Trust, the Trust Indenture, and Supplement No. 1 to Guarantee Agreement. (g) This Letter of Representation, the Supplemental Note, Supplement No. 1 to Deed of Trust and Supplement No. 1 to Loan Agreement have been duly authorized, executed and delivered by the Owner and constitute the legal, valid and binding obligations of the Owner, enforceable in accordance with their respective terms , and this Letter of Representation and Supplement No. 1 to Guarantee Agreement have been duly authorized, executed and constitute the legal, valid and binding obligations of the Guarantors enforceable in accordance with their respective terms . (h) All of the information supplied by the Owner and the Guarantors which has been relied upon by Orgain, Bell & Tucker in rendering their opinion with respect to the exemption from federal income taxation of the interest on the Series 1983-A Bonds is true and correct in all material respects and does not omit or fail to state any material fact Page 5 necessary or required to be stated therein to make the information provided not misleading. (i) No consents , approvals , authorizations or any other actions by any governmental or regulatory authority that have not been obtained or taken are or will be required for the issuance and sale of the Series 1983-A Bonds or the consummation of the other transactions contemplated by this Letter of Representation, Supplement No. 1 to Deed of Trust, Supplement No. 1 to Loan Agreement, the Supplemental Note, or Supplement No. 1 to Guarantee Agreement (except for such licenses , certificates , approvals or permits necessary for the construction or operation of the Supplemental Development for which the Owner has applied or will make appli- cation and which the Owner expects to receive) . (j ) Each representation made by the Guaran- tors herein and by the Owner herein and in Supplement No. 1 to Loan Agreement is true, accurate and complete as of the date hereof. 2 . Any certificate signed by a venturer or parti- cipant in the Owner or by any Guarantor and delivered to the Corporation or the Purchasers shall be deemed a representa- tion and warranty by the Owner or the Guarantor to the Corporation and the Purchasers as to the statements made therein. 3. The Owner and the Guarantors hereby approve the purchase price for the Series 1983-A Bonds to be paid by the Purchasers to the Corporation, the interest rate and other terms of the Series 1983-A Bonds and all of the terms and conditions of the issuance, sale and delivery of the Series 1983-A Bonds . 4 . The Owner and the Guarantors each hereby represent that it or he has not taken any action, and knows of no action that any other person has taken, which would cause interest on the Series 1983-A Bonds to be includable in the gross income of the recipients thereof for federal income tax purposes and covenants that it or he will not take any action or omit to take any action, which action or omission would result in the loss of the exemption from federal income taxation of the interest on the Series 1983-A Bonds and further covenants that hereafter, it or he will not take Page 6 any action or omit to take any action required under Supplement No. 1 to Loan Agreement or the Code and the regulations promulgated thereunder, which action or omission would result in the loss of the exemption from federal income taxation of the interest on the Series 1983-A Bonds ; provided that no such representation or warranty is made with respect to any Series 1983-A Bond for any period during which it is held by a "substantial user" or a "related person" as those terms are used in Section 103 of the Code. The Owner and the Guarantors each further represent that it or he will not take or omit to take any action which will in any way cause the proceeds from the sale of the Series 1983-A Bonds to be applied, or result in such proceeds being applied, in any manner other than as provided in the Trust Indenture and Supplement No. 1 to Loan Agreement. 5 . The Owner and the Guarantors will indemnify and hold harmless you and each person, if any, who controls you within the meaning of Section 15 of the Securities Act of 1933 , as amended (the "1933 Act") , against any and all losses , claims , damages or liabilities , joint and several, or actions in respect thereof, to which you or any such controlling person may become subject under the 1933 Act or any other statute or common law or otherwise, insofar as such losses , claims , damages or liabilities , or actions in respect thereof, arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in this Letter of Representation or in the Disclosure Documents , or any omission or alleged omission to state herein or therein a material fact necessary in order to make the statements herein. and therein not misleading; and will reimburse you and any such controlling person for all legal or other expenses reasonably incurred by you and any such controlling person in connection with investigating or defending any such action or claim. If any such action or claim shall be brought or asserted against you or any person so controlling you and in respect of which indemnity may be sought against the Owner or the Guarantors , you shall promptly notify the Owner and each Guarantor in writing and the Owner and each Guarantor shall assume the investigation and defense thereof, inclu- ding the employment of counsel and the payment of all expenses. You or any such controlling person shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at your expense or the Page 7 ° expense of such controlling person unless (a) the employment thereof has been specifically authorized by the Owner and each Guarantor in writing, (b) the Owner and each Guarantor have failed to assume the defense and to employ counsel or (c) the named parties to any such action (including any impleaded parties) include both you or such controlling person and the Owner and any Guarantor, and you or such controlling person shall have been advised by such counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the Owner or any Guarantor (in which case, if you or such controlling person notifies the Owner and each Guarantor in writing that it elects to employ separate counsel at the Owner' s and the Guarantors ' expense , the Owner and each Guarantor shall not have the right to assume the defense of such action on behalf of you or such controlling person, it being understood, however, that the Owner and the Guarantors shall not , in connection with any one such action or sepa- rate but substantially similar or related actions in the same jurisdiction arising out of the same general allega- tions or circumstances , be liable for the reasonable fees and expenses of more than one separate firm of attorneys for you and all such controlling persons , which firm shall be designated in writing by you) . You and each controlling person, as a condition of such indemnity, shall use your and its best efforts to cooperate with the Owner and the Guarantors in the defense of any such action or claim. The Owner and the Guarantors shall not be liable for any settle- ment of any such action effected without its or their written consent, but if settled with the written consent of the Owner and the Guarantors , or if there be a final judg- ment for the plaintiff in any such action, the Owner and the Guarantors agree to indemnify and hold harmless you and any such controlling person from and against any loss or liabi- lity by reason of such settlement or judgment. 6. The representations , warranties - and- covenants contained in this Letter of Representation shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of the Corporation or the Purchasers , and (ii) delivery of, and payment for, the Series 1983-A Bonds . 7. All notices to the Corporation, the Owner or the Guarantors hereunder shall be sufficient if addressed as provided in the Agreement as supplemented or in the Guarantee Agreement as supplemented. Page 8 , 8. The validity, interpretation and performance of this Letter of Representation shall be governed by and construed in accordance with the laws of the State. 9. This Letter of Representation is made solely for the benefit of the Corporation and the Purchasers and their respective successors and assigns , and no other person, partnership, association or corporation shall acquire or have any right under or by virtue hereof. This Letter of Representation may be executed in several counterparts , each of which shall be regarded as an original and all of which shall constitute one and the same agreement. If the foregoing is in accordance with your under- standing of the agreement between each of you and the Owner and the Guarantors , please sign and return to the Owner and the Guarantors the enclosed copies of this Letter of Repre- sentation, whereupon it will constitute a binding agreement between each of you, the Owner and the Guarantors in accor- dance with its terms . Very truly yours , VIRGINIA VILLAGE VENTURE By: C. L. Sherman, Jr. By: - James J. Conway, Jr. C. L. Sherman, Jr. James J. Conway, Jr. Wayne D. S erman Robert G. Quinn Page 9 J. D. Martin III A. S. Crawford F. L. Stanley ACCEPTED AND CONFIRMED as of the date first written above: BEAUMONT HOUSING FINANCE CORPORATION By: Its . INTERFIRST BANK-BEAUMONT By: Its : ALLIED BANK BEAUMONT By: Its : FIRST CITY NATIONAL BANK OF BEAUMONT By: Its : PARKDALE BANK By: Its : i June 1983 Beaumont Housing Finance Corporation P. 0. Box 3827 Beaumont , Texas 77704 Gentlemen: This letter is being executed and delivered to you in order to induce Beaumont Housing Finance Corporation (the "Corporation") (i) to issue, sell and deliver its Multi- Family Housing Revenue Bonds , Series 1983-A (Virginia Village Development) , in the aggregate principal amount of $350 , 000 (the "Series 1983-A Bonds") , to InterFirst Bank- Beaumont , Allied Bank Beaumont, First City National Bank of Beaumont , and Parkdale Bank, as the original purchasers of the Series 1983-A Bonds in the respective principal amounts of $130 , 000 , $130 , 000 , $40 , 000 , and $50 , 000 (the "Purchasers") , and (ii) to enter into Supplement No. 1 to Loan Agreement dated as of June 1 , 1983 , between the Corporation and Virginia Village Venture, a Texas joint venture (the "Owner") , and Supplement No. 1 to Collateral Assignment and Security Agreement dated as of June 1 , 1983 , from the Corporation to the Trustee. Terms defined in the Supplemental Bond Resolution of the Corporation authorizing the issuance of the Series 1983-A Bonds or incorporated by reference from the Agreement as supplemented or the Trust Indenture are used in this letter with the meanings ascribed in such other instruments . By execution hereof, each Purchaser severally repre- sents , warrants and agrees that : 1. The Purchaser is a banking association or corporation engaged in the business of, among other activities, investing in securities like the Series 1983-A Bonds , is familiar with and EXHIBIT F. Page 2 has experience in the purchase of tax-exempt revenue bonds similar to the Series 1983-A Bonds , and is capable of evaluating the merits and economic risks which may be associated with purchase of the Series 1983-A Bonds. 2. The Purchaser has participated in the prepara- tion of, and has been furnished all informa- tion which has been requested concerning, the terms and conditions of the offering of the Series 1983-A Bonds and all other information, including without limitation (a) the Trust Indenture, the Agreement as supplemented by Supplement No. 1, the Supplemental Note, the Deed of Trust as supplemented by Supplement No. 1 , the Guarantee Agreement as supplemented by Supplement No. 1, and the Collateral Assignment as supplemented by Supplement No. 1 and (b) such other detailed information regarding the Owner, the Guarantors and the Corporation, and their respective affairs , properties , finances and accounts , which has been requested in order to enable the Purchaser to make an informed decision concer- ning investment in the Series 1983-A Bonds . The Purchaser has had full opportunity to consult with the respective officers and other representatives , and review the books of account, records and properties of the Owner and the Guarantors . 3. With the exception of Parkdale Bank, each Purchaser is a subsidiary of a bank holding company (the "Holding Company") which owns other bank subsidiaries (the "Subsidiaries") . The Series 1983-A Bonds are being acquired either for the Purchaser or for one or more other Subsidiaries of its Holding Company (if any) , and, in any case, the Series 1983-A Bonds are being purchased for the purpose of investment and not with a view to any other distribution or resale thereof. The Purchaser is acting for itself or as the sole agent or representative for such other Subsidiaries of its Holding Company, each of which is a bank or trust company organized under the laws of the United States or a state thereof and is Page 3 ` supervised by a banking commission or similar regulatory authority, and none of which was organized for the specific purpose of acquir- ing the Series 1983-A Bonds . The Purchaser has not offered any of the Series 1983-A Bonds to be purchased for its own account or the account of any of its affiliates , for sale to, or solicited offers to buy any thereof from, or otherwise approached or negotiated with respect thereto with, any prospective unaffi- liated purchasers . Further, the Purchaser has not employed any person to act as agent, broker, dealer, or otherwise to offer the Series 1983-A Bonds for it or to solicit offers to buy the Series 1983-A Bonds from it. Notwithstanding the foregoing, it is under- stood and agreed that the Purchaser and each of the other aforesaid Subsidiaries of its Holding Company (if any) shall at all times control the disposition or transfer of the Series 1983-A Bonds owned by each of them respectively at any time. 4 . The Purchaser has neither requested nor received from (nor does it expect to receive from) the City, the Corporation or any of their directors , officers , employees or agents any information with respect to the Owner, the Guarantors , the Series 1983-A Bonds or the security purported to be afforded pursuant to the Collateral Assignment as supplemented by Supplement No. l or the Trust Indenture. 5 . Neither the City, the Corporation nor any of their directors , officers , employees , attor- neys , or agents shall have responsibility to the Purchaser for the completeness of infor- mation obtained by the Purchaser from any source with respect to the Owner and the Guarantors , their respective assets , business , circumstances , financial condition or proper- ties , or with respect to the Series 1983-A Bonds and the security purported to be afforded pursuant to the Collateral Assignment as supplemented by Supplement No. 1 or the Trust Indenture, or for the accuracy of any such information; and the Purchaser Page 4 acknowledges that, as between it and the City and the Corporation, the Purchaser assumes responsibility for obtaining such information and making such investigation as it deems necessary or desirable in connection with its decision to purchase the Series 1983-A Bonds . 6. The Purchaser hereby consents to the law firm of Orgain Bell & Tucker representing the Owner and the Guarantors in connection with the issuance of the Series 1983-A Bonds . Very truly yours , INTERFIRST BANK-BEAUMONT By: Its . ALLIED BANK BEAUMONT By: Its . FIRST CITY NATIONAL BANK OF BEAUMONT By: Its : PARKDALE BANK By: Its .