ORDER NO. 2197.5 A.PFROVAh OF AUTHORIZING JUDGE STAGY AND JLTDGN: FROHL TO SIGN ALL DOCUMENTS AS PRESENTED TO THE: 00[JRT FROM RECOR On this the 30th day of March 1994, upon motion made by Commissioner Holekamp, seconded by Commissioner Lackey, the Court unanimously approved by a vote of 5-0-0, to authorize the County Judge and Judge Frohl to sign all documents as amended based on the recommendation of Ilsa Bailey, Assistant County Attorney. STATE OF TEXAS § Uc / ` / KERB coUNTY INCUMBENCY CER'T'IFICATE I, Emil Karl Prohl, Judge of the 198th Judicial District, do hereby certify that I am a duly elected or appointed and acting member of the board of the Kerr County Juvenile Board, an agency, political subdivision or governmental entity of the State of Texas, that I have access to and shared authority and control over the records of such entity, and that as of the date hereof, the individuals named below are the duly elected or appointed officers of such entity holding the offices set forth opposite their respective names. I further certify that (i) the signatures set opposite their respective names and titles aze their true and authentic signatures, and (ii) such officers have the authority on behalf of such entity to enter into that certain Lease dated as of March 31, 1994 between such entity and ReCor, Inc. NAME TITLE G ,, SIG ATURE William G. Stacy, Chairman of the Boazd /~j~/ County Judge Simon J. Hams Chief Juvenile Probation Officer ~ ~ . /~'GeC•-~ IN WITNESS WHEREOF, I have duly executed this certificate and affixed the seal of such entity hereto this 30th day of March, 1994. By: Name: Emil Kazl Prohl Title: Judge, 198th Judicial District AN ORDER OF THE COM11-II.SSIONERS COURT OF KERR COUNTY APPOINTING THE KERR COUNTY JUVENILE BOARD AS AGENT TO LEASE, DESIGN, FINANCE, CONSTRUCT AND OPERATE A SECURE JUVENII.E PROBATION FACILITY; PROVIDING THAT THE COUNTY SHALL HAVE NO FINANCIAL - LIABILTTY; MAKING FINDINGS AND GRANTS; AND PROVIDING FOR OTHER MATTERS RELATED THERETO. WHEREAS, the Commissioners Court of Kerr County ("the Commissioners Court") fmds that the immediate acquisition, purchase and construction of a secure residential juvenile detention facility (the "Juvenile Detention Facility" or "Facility") and the operation thereof is necessary to preserve and protect the public health and safety of the citizens of Kerr County; and WHEREAS, since the Legislature created the Kerr County Juvenile Board (the "Board"), pursuant to §152.1391, Texas Human Resources Code, the Commissioners Court and the Board (jointly "the County") have worked to provide juvenile probation services; and WHEREAS, the Legislature has appropriated funds to the Texas Juvenile Probation Commission ("TJPC") which has promulgated rules that authorize the use of TJPC Community Corrections Program funds for juvenile residential services; and WHEREAS, the acquisition of the Facility by lease-purchase on the terms set forth in the Lease-Purchase Agreement before this Court is advisable and in the best interest of the citizens of Kerr County, Texas; and WHEREAS, the source of funds for meeting the obligations under the Lease-Purchase Agreement is to be revenues actually received for housing residents/juvenile detainees at the Facility, and from appropriations, if any, received from the Texas Juvenile Probation Commission for the express purpose of paying the obligations under the Lease-Purchase Agreement. NOW, THEREFORE, BE IT ORDERED BY THE COMMISSIONERS COURT THAT: 1. ~ndines. The recitations hereinabove are found to be true and correct, aze incorporated herein as findings of fact, and the Commissioners Court hereby: (a) grants an exemption, pursuant to § 262.024(a)(2), Local Government Code, for the acquisition of the Juvenile Detention Facility; and (b) appoints the Board, pursuant to § 262.001, Local Government Code, as its agent to obtain and contract for the design, financing, construction and operation of the Facility. 2. Acquisition of Facility. All previous actions by the County Commissioners, with respect to the Lease, the §262.024(a)(2) exemption, the § 262.001 appointment, the acquisition, financing, construction, equipping or operation of the Juvenile Detention Facility, are hereby ratified and approved and the acquisition and lease - of the Juvenile Detention Facility is found to be necessary to preserve and protect the public safety and health of the youth and citizens of Ken County. 3. Approval of the Lease. The Lease, between ReCor, Inc. and the Board, as agent for the County, spread on the minutes of this meeting, is hereby approved, confirmed and ratified and the Board is hereby authorized to exercise its discretion and judgment and to execute and deliver the Lease. 4. Approval of Documents. The form and substance of the financing documents spread on the minutes of this meeting of the Commissioners Court are hereby approved and the Board is hereby authorized to execute and deliver such documents and to do all things necessary or advisable and in the best interests of the County to consummate the transaction described therein. 5. Authority of Board. The Board is hereby authorized to (a) sign, execute, certify, verify, acknowledge, deliver, accept, file and record any and all instruments and documents, and (b) take, or cause to be taken, any and all such action, in the name and on behalf of the Board and Kerr County or otherwise, as in the Board's judgment is necessary, desirable or appropriate in order to consummate the transactions contemplated by or otherwise to effect the purposes of the foregoing documents including the approval of minor corrections and non- substantive changes to the wording and language of the attached documents as may be reasonably required and that aze not material; provided that this Order shall never be interpreted as creating, and the Board is not authorized to create, any debt or liability of Kerr County; and provided that, notwithstanding any term or provision herein or in the attached exhibits and documents to the contrary, Kerr County shall not be responsible for the payment of any principal, interest or Rental Payments due or to become due with respect to the Lease, or the attached exhibits and documents, nor any other expense, fee, sum or amount except as appropriated by the TJPC for that purpose or received as revenues for the housing of persons in the Facility pursuant to Interlocal Contract. -2- 6. Ratification of Actions. All actions heretofore taken by the Commissioners Court, and all things done by the members of the Board, the County Judge and the County Commissioners, pursuant to their official authority, with respect to the transaction contemplated hereby, be and the same are hereby ratified, approved and adopted as the acts of the Commissioners Court. 7. 'Lease as Special Obligation. The Lease shall be a special obligation payable solely as set forth therein, and the Lessor, and any assignees oc successors of the Lessor, shall never have the right to demand payment thereof out of funds raised or to be raised by taxation. 8. Designation as Oualified Tax-Exempt Obligation. The Commissioners Court hereby designates, and authorizes the Boazd to designate, the Lease as a "qualified tax-exempt obligation" as defined in the Internal Revenue Code of 1986, as amended (the "Code"). Further Procedures. The appropriate officers, employees, agents and representatives of the Boazd shall be and are hereby expressly authorized, empowered and directed, from time to time, to do and perform all such acts and things and to execute, acknowledge and deliver in the name and under the corporate seal and on behalf of the County all such instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this Order and of the Lease. 10. Effective Date. This Order shall be in force and effect from and after its passage on the date shown below. 11. Open Meetings. It is hereby officially found and determined that this meeting was open to the public, and public notice of the time, place and purpose of said meeting was given, all as required by the Open Meetings Act, Chapter 551, Texas Government Code. ADOPTED AND PASSED this the 30th day of Mareh, 1993. ~~%~~ William G. Stacy, County Judge Attest: ~ ~~~ ~ ~~y~ unty Clerk, -O cio Clerk of the Kerr County Commissioners Court -3- LEASE # ASSIGNMENT OF LEASE AGREEMENT TO: CHIC-ORP FINANCIAL SERVICES, INC. RE: Lease between the Kerr County Juvenile Board, as agent for Kerr County, Texas, as Lessee, and the undersigned, as Lessor, dated as of November 15, 1993. For value received, the undersigned, ReCor, Inc. ("Assignor"), hereby sells, assigns, transfers and sets over to ChiCorp Financial Services, Inc., its successors and assigns ("Assignee"), WITHOUT RECOURSE as to the financial ability of the Lessee to pay, the above-named Lease ("Lease"), together with all rental payments due and to become due thereunder, and all moneys due and to become due in connection with the exercise by Lessee of an option, if any, to purchase the property described in the Lease. All capitalized terms used herein and not otherwise defined shall have the same meanings as set forth in the Lease. Assignor also assigns to Assignee all of Assignor's rights and remedies under the Lease, including the right to take, in Assignor's or Assignee's name, any and all proceedings, legal, equitable or otherwise, that Assignor might otherwise take save foi• this Assignment. It is aclmowledged that Assignee has paid full value for this assignment and that Assignee's rights shall include, but not be limited to, the right to exercise Lessee's purchase option in the event of default by Lessee and termination of the Lease and the eviction of or vacation of the property by Lessee. As security for all amounts due under the lease, and all other present and future indebtedness or obligations of Assignor to Assignee of every kind and nature whatsoever associated with the Lease or the Lessee, Assignor hereby grants to Assignee a security interest in all real and personal property covered by and described in the Lease. Title to all such property shall remain in the Assignor and is not transferred to Assignee for any purpose. Upon payment in full of the Rent Payments and discharge in full of the Lease obligations, this Assignment shall become and be void and of no effect and the Assignee shall issue a written release of this assignment in recordable form; provided that the affidavit, certificate, letter or statement of any officer, agent or attorney of the Assignee showing any part of the Indebtedness to remain unpaid or any of the Lease obligations to be unfulfilled shall be and constitute conclusive evidence of notice of the validity, effectiveness and continuing force of this Assignment and any person may, and is hereby authorized to, rely thereon. The Assignor hereby authorizes and duects the Lessee and any other or future occupant as Lessee of the Lease Premises or any part thereof to pay over to the Assignee all Rent Payments and to continue so to do until otherwise notified by the Assignee. Lessee is authorized to rely on written notices from Assignee as conclusively establishing the fact, circumstance, condition, or event of default M by Lessor, and Lessee shall have no duty to inquire or ascertain whether any such fact or event of default actually exists. It is further specifically provided that Assignee shall have no obligation of Assignor as Lessor under the Lease. Assignor warrants that: Assignor is the owner of the property described in the Lease free from all liens and encumbrances except as set forth in the Title Policy for said property and the Lease; the Lease is the only document executed between Lessor and Lessee concerning the property described in the Lease; the Lease is genuine and enforceable and is and will continue free from defenses,-set-offs and counterclaims; all signatures, names, addresses, amounts and other statements of fact contained therein are true and correct; the aggregate unpaid rental shown therein is correct; and the Assignor will comply with all its warranties and other obligations with respect thereto; the Lease transaction conforms to all applicable laws and regulations; the Lease constitutes and will continue to constitute a valid reservation of unencumbered title to or fast lien upon or security interest in the property covered thereby, effective against all persons; if filing, recordation or any other action or procedure is permitted or required by statute or regulation to perfect such reservation of title, lien or security interest, the same has been accomplished. If Assignor breaches any of the foregoing it will, upon Assignee's request, promptly repurchase the Lease for an amount equal to the unpaid rentals thereon, including accrued interest, plus any expenses of collection, repossession, closing costs, transportation and storage incurred by Assignee, less any customary refund by Assignee of unearned charges. Assignor agrees that Assignee may in Assignor's name endorse all remittances received, and Assignor gives express permission to Assignee to release, on terms satisfactory to Assignee or by operation of law or otherwise, or to compromise or adjust any and all rights against and grant extensions of time of payment to Lessee, or any other person, on any obligation of the Lease or on any accompanying guaranty, or to agree to the substitution of a lessee, without notice to Assignor and without affecting Assignor's obligations hereunder. Assignor shall have no authority to, and will not, without Assignee's prior written consent, accept payments of rentals or option prices, repossess or consent to the return of the properly described in the Lease or modify the terms thereof. Assignee's lrnowledge at any time of any material breach of or non- compliance with any of the foregoing shall not constitute any waiver by.Assignee. Assignor waives notice of acceptance hereof. EXECUTED this the 30th day of March, 1994 ATTEST: By. Corporate Secretary [Seal] Assignment of Lease Lessor-Assignor: ReCor, I i By: Name: Glen Hec an Title: President 2 a ._ __ STATE OF TEXAS § COUNTY OF TRAVIS § This instrument was aclazowiedged before me on this the ~ day of ~~ ~ ~ f by Glen Heckman, President of ReCor, Inc., a Texas corpora 'on, for said corporation. otary Public, State of Texa THt;A °.OVIL- No[ary Pubic. &!zt~ ofTczas HY Co~nr,.lsoian $..pirea '1'~UARY 9, 1995 Assignment of Lease 3 CERTIFICATE FOR AN ORDER OF THE COMMLSSIONERS COURT OF KERR COUNTY APPOIlVTING THE KERB COUNTY JUVENILE BOARD AS AGENT TO LEASE, DESIGN, FINANCE, CONSTRUCT AND OPERATE A SECURE JUVENILE PROBATION FACILTI'Y; PROVIDING THAT THE COUNTY SHALL HAVE NO FINANCIAL LIABILTTY; MAKING FINDINGS AND GRANTS; AND PROVIDING FOR OTHER MATTERS RELATED THERETO. I, the undersigned, County Clerk and Ex-Officio Clerk of the Commissioners Court of Kerr County, Texas, DO HEREBY CERTIFY as follows: 1. The Commissioners Court of Kerr County, Texas (the "Court") convened in a [regular/special] meeting on the 29th day of March, 1994 at the regular meeting place in the County Courthouse, Kerrville, Texas, and the roll was called of the duly constituted members of the Court, to wit: County Judge W. G. (Bill) Stacy Commissioner, Precinct 1 Ray Lehman Commissioner, Precinct 2 T. H. Lackey Commissioner, Precinct 3 Glenn K. Holekamp Commissioner, Precinct 4 Bruce Oehler and all of such persons were present, except -0-, thus constituting 'a quonun. Whereupon, among other business, the following was transacted at the meeting: a written AN ORDER OF THE COMMLSSIONERS COURT OF KERR COUNTY APPOINTING THE KERB COUNTY JUVENILE BOARD AS AGENT TO LEASE, DESIGN, FINANCE, CONSTRUCT AND OPERATE A SECURE JUVENILE PROBATION FACILTTY; PROVIDING THAT THE COUNTY SHALL HAVE NO FINANCIAL LIABILTTY; MAKING FINDINGS AND GRANTS; AND PROVIDING FOR OTHER MATTERS RELATED THERETO. (the "Order") was duly introduced for the consideration of the Court and read in full. It was then duly moved and seconded that the Order be adopted, and, after due discussion, said motion, carrying with it the adoption of the Order, carried by the following votes: YES: 5 NOES: 0 ABSTENTIONS: 0 1 2. A true and complete copy of the Order adopted at the meeting described in the above and foregoing paragraph is attached to and follows this certificate; the Order has been duly signed and attested by the proper officers and, as signed, has been duly recorded in the Court's minutes of said meeting; the above and foregoing paragraph is a true and complete excerpt from the Court's minutes of said meeting pertaining to the adoption of the Order; said meeting was open to the public as required by law; and written notice of the date, place, and subject of satd meeting was given as required by Open Meetings Act, Chapter 551, Texas Government Code. V S MY LAND and the SEAL of the COURT this ~ day of 199 ~~;- ~ , .~ Co ty Clerk and Ex- icio Clerk of the Commissioners Court of Kerr County, Texas (Comm. Crt. Seal) 2 A CERTIFICATE FOR A RESOLUTION OF THE KERB COUNTY JUVENILE BOARD APPROVING A LEASE, AN ASSIGNMENT, AND RESOLVING OTHER MATTERS RELATED TO A JUVENILE DETENTION FACILITY I, the undersigned, secretary for the Kerr County Juvenile Board, Texas, DO HEREBY CERTIFY as follows: 1. The Kerr County Juvenile Board (the "Board") convened in a special called meeting on March 30, 1994 at the regular meeting place in the Ken County Courthouse, Kerrville, Texas, and the roll was called of the duly constituted members of the Court, to wit: 198th-District Judge Emil Karl Prohl 216th-District Judge Stephen B. Ables County Judge W. G. (Bill) Stacy and all of such persons were present, except Stephen B. Ables, thus constituting a quorum. Whereupon, among other business, the following was transacted at the meeting: a written A RESOLUTION OF THE KERB COUNTY JUVENILE BOARD APPROVING A LEASE, AN ASSIGNMENT AND RESOLVING OTHER MATTERS RELATED TO A JUVENILE DETENTION FACILITY (the "Resolution") was duly introduced for the consideration of the Board and read in full. It was then duly moved and seconded that the Resolution be adopted, and, after due discussion, said motion, carrying with it the adoption of the Resolution carried by the following votes: AYES: 2 NOES: 0 ABSTENTIONS: 0 2. A true and complete copy of the Resolution adopted at the meeting described in the above and foregoing paragraph is attached to and follows this certificate; the Resolution has been duly signed and attested by the proper officers and, as signed, has been duly recorded in the Board's minutes of said meeting; the above and foregoing paragraph is a true and complete Cenificaie for ResoWtioa Page I the Boazd's minutes of said meeting; the above and foregoing paragraph is a true and complete excerpt from the Board's minutes of said meeting pertaining to the adoption of the Order; said meeting was open to the public as required by law; and written notice of the date, place, and subject of said meeting was given as required by the Open Meetings Act, Chapter 551, Texas Government Code. WiTNESS'MY HAND AND SEAL on this 30th day of March, 1994. Secretary Kerr County Juvenile Boazd Ca[iFirarP for Rcsolufion ~8e 2 RESOLUTION OF THE KERB COUNTY JUVENILE BOARD, APPROVING, RATIFYING AND CONFIItMING A LEASE PROVIDING FOR THE ACQUISITION, CONSTRUCTION AND EQUIPPING OF A JUVENILE ' DETENTION FACILITY AND OTHER MATTERS RELATING THERETO WHEREAS, the Commissioners Court of Kerr County (the "Court") has found the immediate acquisition, purchase and construction of a secure residential juvenile detention facility (the "Juvenile Detention Facility" or "Facility") and the operation thereof is necessary to preserve and protect the public health and safety of the citizens of Ken County, Texas (the "County"); WHEREAS, the Kerr County Juvenile Board (the "Board"), as created and constituted pursuant to the provisions of §152.1391 of the Texas Human Resources Code, was appointed by the Court as the agent of the Court and the County, pursuant to §262.001, Texas Local Government Code, to obtain and acquire a secure juvenile detention facility; WHEREAS, there is an immediate need and public necessity for the fmancing, design and construction of the Facility to protect the public health, safety and welfare; WHEREAS, the acquisition of the Facility by lease-purchase on the terms set forth in the Lease-Purchase Agreement before this Boazd is advisable and in the best interest of the citizens of Kerr County, Texas; and WHEREAS, the source of funds for meeting the obligations under the Lease-Purchase Agreement is to be revenues actually received for housing residents/juvenile detainees at the Facility, and from appropriations, if any, received from the Texas Juvenile Probation Commission for the express purpose of paying the obligations under the Lease-Purchase Agreement. NOW, THEREFORE, BE TT RESOLVED BY THE KERB COUNTY JUVENILE BOARD THAT: 1. Findines. The recitations hereinabove aze found to be true and correct, aze incorporated herein as findings of fact, and the Board hereby: (a) grants an exemption, pursuant to § 262.024(a)(2), Local Government Code, for the acquisition of the Juvenile Detention Facility; and (b) formally accepts the Court's appointment of the Boazd, pursuant to § 262.001, Local Government Code, as the County's agent to obtain and contract for the design, financing, construction and operation of the Facility. 2. Acquisition of Facility. All previous actions by the Board, with respect to the Lease, the §262.024(a)(2) exemption, the § 262.001 appointment, the acquisition, financing, construction, equipping or operation of the Juvenile Detention Facility, are hereby raflfied and approved and the immediate acquisition of the Facility is found necessary to preserve and protect the public safety and health of the youth and citizens of Kerr County. Approval of the Lease. The Lease, between ReCor, Inc. and the Board, as agent for the County, spread on the minutes of this meeting, is hereby approved, confirmed and ratified and may be executed and delivered. 4. Approval of Documents. The form and substance of the financing documents spread on the minutes of this meeting of the Board are hereby approved and the Chairman, Chief Juvenile Probation Officer and/or Judge of the 198th Judicial District are hereby authorized to execute and deliver such documents. 5. Authority, of Chair. etc.. The Board hereby authorizes the Chairman of the Board, the Chief Juvenile Probation Officer and/or the Judge of the 198th Judicial District to (a) sign, execute, certify, verify, acknowledge, deliver, accept, file and record (as appropriate) the Lease, the Escrow Agreement, Notice of Assignment and other instnunents and documents spread on the minutes of this meeting and requiring signature by the Board, and (b) to deliver, or cause to be delivered, any and all such documents; provided that this Resolution shall never be interpreted as creating a debt or liability of the County or the Board; provided that, notwithstanding any term or provision herein or in the attached exhibits and documents to the contrary, neither Kerr County nor the Board shall be responsible for the payment of any principal, interest or Rental Payments due or to become due with respect to the Lease, or the attached exhibits and documents, nor any other expense, fee, sum or amount except as to revenues received for the housing of persons in the Facility, and appropriations made to and received by the Board, as agent for Kerr County, or otherwise, from TJPC or any other governmental entity. Kerr County Juvenile Boazd Resolution -2- 6. Ratification of Actions. All actions heretofore taken by the Boazd, and all things done by the members of the Boazd, and the County Commissioners, pursuant to their official authority, with respect to the transaction contemplated hereby, be and the same aze hereby ratified, approved and adopted as the acts of the Board. 7. Lease as Special Obligation. The Lease shall be a special obligation payable ` solely as set forth therein, and the Lessor, and any assignees or successors of the Lessor, shall never have the right to demand payment thereof out of funds raised or to be raised by taxation. 8. Designation as Oualified Tax-Exempt Obligation. The Board hereby designate the Lease as a "qualified tax-exempt obligation" as defined in the Internal Revenue Code of 1986, as amended (the "Code"). 9. Further Procedures. The appropriate officers, employees, agents and representatives of the Board shall be and aze hereby expressly authorized, empowered and directed, from time to time, to do and perform all such acts and things and to execute, acknowledge and deliver in the name and under the corporate seal and on behalf of the Boazd, as agent for the County, certificates and certifications, whether or not herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this Order and of the Lease. 10. Effective Date. This Resolution shall be in force and effect from and after its passage on this date. 11. Open Meetings. It is hereby officially found and determined that this meeting was open to the public, and public notice of the time, place and purpose of said meeting was given, all as required by the Open Meetings Act, Chapter 551, Texas Government Code. ADOPTED AND PASSED this the 30th day of March, 1994. ? ` William G. Stacy, County Judge D'~ tricJCounty Cle , Ex io Clerk of the Kerr County Commissioners Court Kerr Counry• Juvenile Boazd Resolufion -3- STATE OF TEXAS § COUNTY OF KERR § LEASE -PURCHASE AGREEMENT This Lease -Purchase Agreement (the "Lease") is made and entered into as of the 31st day of March, 1994, by and between ReCor, Inc., a Texas corporation, (the "Lessor") and the Kerr County Juvenile Board, as agent for Kerr County, Texas, a unit, agency, governmental entity or political subdivision of the State of Texas, (the "Lessee"). Article 1. Demise Description. Use and Term Section 1.1 Lease of Facility. Lessor hereby leases to Lessee, and Lessee hereby takes and rents from Lessor, that certain property situated in Kerr County, Texas (the "County") and more particulazly described in Exhibit "A" hereto (the "Leased Premises"), to be used for a secure juvenile detention facility (the "Facility") as Lessee, in its discretion determines. Section 1.2 Term of Lease. The term of this Lease shall be for a period of fifteen (15) years from the Effective Date described in Section 2.2 below (the "Term"). At the end of said Term, Lessee may, at its option, renew this Lease on terms and rents to be negotiated. Article 2. Rentals Section 2.1 Monthly Rental Payments. Lessee agrees to and shall pay Lessor at Kerr County, Texas, or at such other location as directed, 180 rental payments in the amount of Twentyseven Thousand Nine Hundred Sixty-Five and 49/100 Dollars ($27,965.49) per month as rent (the "Rental Payments"). Any Rental Payment may be paid in advance at the discretion of Lessee. Section 2.2 Rental Commencement. Rental Payments shall commence on the fast day of the calendar month, and become due and payable on the first day of each calendar month thereafter during the Tenn of this Lease, after the eazlier to occur of (i) the occupancy of the Facility after the issuance of a Certificate of Occupancy for the Facility, (ii) the delivery to Lessee of a certification by an azchitect selected by Lessee and Lessor and licensed by the State of Texas of substantial completion of the Facility, or (iii) the fast payment date set forth and provided in the "Amortization Schedule & Purchase Option" attached hereto as Exhibit "B" and incorporated herein for all purposes (the "Effective Date"). Section 2.3 Rental Payments Unconditional -Exceptions Except as otherwise provided in Section 7.1 or Section 17.5 below, the obligations of Lessee to make the Rental Payments required under this Lease shall be absolute and unconditional and shall not be subject to diminution by set-off, counterclaim, abatement or otherwise; and until such time as all the Rental Payments have been made, Lessee: (a) will not suspend or discontinue, or permit the suspension or discontinuance of any payment provided for in this Article 2; (b) -will perform and observe all of its other agreements contained in this Lease; and (c) will not terminate this Lease for any cause, including without limiting the generality and specifications thereof, any acts or circumstances that may constitute failure of consideration, destruction of or damage to the Leased Premises, commercial frustration of purpose, any change in tax or other laws or administrative rulings of or administrative actions by the United States of America or the State of Texas or any political subdivision of either, or any failure of the Lessor to perform or observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or in connection with this Lease. Section 2.4 No Abatement or Set-Off. Except as otherwise provided in Sections 7.1 or 17.5, there shall be no abatement or reduction of Rental Payments or any other payment required hereunder for any reason notwithstanding any dispute between the Lessee and Lessor, or their respective assigns, or any engineer, contractor or vendor of the Leased Premises, or any other person. Lessee shall make all payments of Rental Payments and other payments due hereunder when due, and shall not withhold any Rental Payments or other payments due hereunder pending final resolution of such dispute, nor shall the Lessee assert any right of set-0ff or counterclaim against its obligation to make such payments required under this Lease. Section 2.5 Default by Lessee. As provided in Section 17.5, all the obligations of Lessee pursuant to this Lease are subject to the provisions of Section 17.5. Save and except as provided in Sections 7.1 and 17.5, if Lessee defaults in the payment of any Rental Payment hereunder, subject to the terms of this Section 2.5 such Rental Payment shall beaz •interest at the most recent rate published by the Consumer Credit Commissioner of the State of Texas in the Texas Register at the time of default. In no event shall such interest rate be less than ten percent (10%) per annum or exceed twenty percent (20%) per anm,m and in no event shall the interest rate chazged exceed the maximum rate allowable by applicable state and federal law. Said interest rate shall be assessed on the unpaid balance from the date it is due until actually paid. In like manner, all other obligations, benefits, and monies which may become due to Lessor from Lessee under the terms hereof, or which are paid by Lessor because of Lessee's default hereunder, shall beaz interest as described above. Said interest shall accrue from the date due until paid, or as to sums paid by the Lessor because of Lessee's default hereunder, from the date such payments aze made by Lessor until the date Lessor is reimbursed by Lessee therefor. Section 2.6 Assignment by Lessor. Lessee aclozowledges that Lessor has assigned the Rental Payments to C1riCorp Financial Services, Ina (the "Assignee") at the following address: Kerr County Juvenile Boazd Lease-Purchase Agreement 2 Chicorp Financial Services, Inc. 208 South LaSalle St. Chicago, Illinois 60604 Attention: Ramona Regas, Vice President The Assignee has, by providing the funds for the construction of the Leased Premises, discharged alI of its obligations under the Lease. Upon further assignment of Assignee's interest herein, Assignee will cause written notice of such assignment to be sent to Lessee which notice will be sufficient if it discloses the name of the assignee and address to which further payments hereunder should be made. In compliance with Section 149(a) of the Internal Revenue Code of 1986, amended (the "Code"), Lessee hereby designates the Assignee to be its agent for the purposes of maintaining a book entry system identifying the ownership of interests in and to this Lease and the Assignee hereby accepts its duties as agent hereunder. The Assignee shall have and enjoy all the rights but not the duties of Lessor pursuant to this Lease. Section 2.7 Lessor Failure to Perform. In the event Lessor fails to perform any of its obligations under this Lease the Lessee shall promptly notify Lessor and Assignee in writing, stating the details of the Lessor's failure to perform. Notwithstanding Lessor's failure to perform, Lessee agrees to pay directly to Assignee the Rental Payments, as set forth in Section 2.1, on each and every Rental Payment date. Article 3. Taxes and Assessments Section 3.1 Taxes. In addition to the foregoing sums, Lessee shall, as further consideration for this Lease, pay and discharge all ad valorem taxes, general and special assessments, and other charges of every description which during the Term of this Lease may be levied on or assessed against the Leased Premises, including all interests therein, improvements thereto, or property thereon, whether belonging to Lessor or Lessee or to which either of them may become liable in relation thereto. Section 3.2 Timely Payment by Lessee. Lessee agrees to and shall pay all the foregoing ad valorem taxes, if any, assessments and charges not less than twenty (20) days prior to the delinquency thereof, and give written notice of such to Lessor within five (5) days after such payment is made. Section 3.3 Advance by Lessor. If Lessee fails to pay any such ad valorem taxes or assessments or fails to give written notice of any payment thereof at least ten (10) days prior to the time the same becomes delinquent, Lessor may, at its option, at any time within or after such ten (10) day period, pay any ad valorem taxes or assessments, together with all penalties and interest which may have been added thereto. Any such amount so paid by Lessor shall become immediately due and payable by Lessee to Lessor, together with interest thereon at the rate and manner as described in Section 2.5 hereinabove. Any such payment which Lessor may make Kerr County Juvenile Board Lease-Purchase Agreement 3 pursuant to this Section 3.3 shall not constitute a waiver of any rights which Lessor may have under the provisions of this Lease or as provided by law. Section 3.4 Tax Exemption. Notwithstanding anything to the contrary in this Article 3, the Lessee and Lessor agree the Leased Premises are exempt from taxation in accordance with the laws of the State of Texas, and that Lessee shall have the full right to administratively or judicially challenge any tax or assessment levied or attempted to be levied on the Leased Premises. Save and except to the extent it becomes necessary to pay any tax or assessment to protect the property and security interests of the Lessee, Lessor and Assignee, the Lessee may, in its sole discretion, elect not to pay any tax or assessment until such time as the tax or assessment is determined to be due and owing on the Leased Premises by a final judgment issued by a court of competent jurisdiction. Article 4. Insurance Section 4.1 Casualty & Rental Insurance. Lessee agrees to and shall, within ten (10) days prior to Lessee's occupancy of the Leased Premises, secure from a good and responsible company or companies doing insurance business in the State of Texas, and maintain during the entire Term of this Lease, the following coverages: (a) A policy or policies of insurance issued by and binding upon the incnrance company, insuring the Leased Premises against all risk, of direct physical loss in an amount equal to no less than the greater of (i) the amount shown in the stipulated loss value column shown in Exhibit "B" attached to this Lease and incorporated herein for all purposes, or (ii) eighty percent (80%) of the fall replacement cost of the Leased Premises, as of the date of the loss; and (b) An insurance policy or policies issued by and binding upon the insurance company, insuring against the interruption of Rental Payments, under any and all circumstances save and except those set forth in Section 17.5; and (c) If the Lessee fails to secure or maintain the foregoing incnrance, Lessor shall be permitted to obtain such insurance on Lessee's behalf and shall be compensated by the Lessee for the cost of the incnrance so incurred by Lessor. Section 4.2 Liability & Additions Insurance . Lessee agrees that, at all times during the Term of this Lease, Lessee shall: (a) Keep the Leased Premises, Lessee and Lessor insured against liability for personal injuries, death or property damages arising or in any manner occasioned by the acts of negligence of the Lessee, or others in its custody, in the operation Kerr County Juvenile Board Lease-Purchase Agreement 4 or use of the Leased Premises, for an amount reasonably satisfactory to Lessee and approved by Lessor; and (b) Be responsible for providing +nv~~rance for improvements it makes to the Leased Premises or personal property of Lessee placed upon the Leased Premises; and (c) " If the Lessee fails to secure or maintain the foregoing inc~rance, Lessor shall be permitted to obtain such insurance on Lessee's behalf and shall be compensated by the Lessee for the cost of the insurance so incurred by Lessor. Section 4.3 Additional Requirements. All insurance policies required under the provisions of this Article 4 shall include the Lessee, Assignee and Lessor as an insured or additional insured, and shall provide that such parties may, although additional insureds, recover for any covered loss suffered by reason of Lessee's negligence. All policies provided for in this Article 4 shall be in such form, with such companies, and with such loss payable clauses as shall be approved by Lessor, which approval Lessor agrees not to unreasonably withhold. Certified copies of the polices provided for herein, or certificates of insurance evidencing the policy provided for herein, shall be delivered to Lessor, Assignee and Lessee, as applicable, on or before the Effective Date. All policies provided for in this Article 4 shall certify that the policy may not be canceled or altered without forty-five (45) days prior written notice to Lessor, and shall contain the insured's written obligation to notify Lessor, in writing, of any detinquency in premium payments at least forty-five (45) days prior to any cancellation or modification of any policy. All deductibles, if any, under any such insnrance policies shall be subject to the prior approval of Lessor and all certificates delivered to Lessor shall specify the limits of the policy and all deductibles thereunder. Article 5. Exterior Maintenance Section 5.1 Exterior Maintenance. Except as otherwise provided •in this Section 5.1 and in Section 6.1, Lessee shall be obligated to, at its own expense, maintain the roof, foundation, all outside utilities and the structural soundness of the Facility in good repair and condition, except for reasonable wear and teaz. Lessee further agrees to repair and/or replace components of the Facility that may be damaged due to neglect or any structural defect. Under this Lease it is recognized that for one yeaz following the Effective Date, all product defects and worlmtanship aze covered under contractor's wazranties, and limited warranties on air conditioning compressors have been granted by contractors for five (5) years following the Effective Date. Lessor has the obligation to show proof of warranties covering product components and workmanship for one (1) year following the Effective Date. Lessor may give notice to Lessee of the need for repairs and corrections and Lessee shall proceed promptly to make such repairs and corrections. Kerr County Juvenile Board Lease-Purchase Agreement 5 Article 6. Interior Maintenance Section 6.1 Interior Maintenance. Lessee shall, at its own expense and risk, maintain all interior walls and ceilings of the Facility and also all interior windows, window glass, doors, electrical fixtures, and plumbing fixtures in good repair and condition. Lessee shall paint all interior walls'as required. Lessee shall furnish and regularly replace furnace filters consistent with heating/air conditioning systems manufacturer specifications. Usual janitorial and maintenance service, including sweeping and waxing of floors, vacuuming, trash collection and disposal, the cleaning of windows, dusting, and the replacement of light bulbs or fluorescent tubes in the light fixtures will be the responsibility of Lessee. Lessee shall maintain all grounds including, but not limited to, mowing, trimming, watering of plants and lawn as to maintain a good cosmetic look to the grounds. All maintenance and upkeep required by Lessee shall be made in accordance with the manufacturer's recommendations. Lessee shall be obligated for all repairs to the heating/air conditioning system and the replacement of any components not covered by any existing warranty. In the event Lessee shall fail to comply with any of the requirements of Section 5.1 or this Section 6.1 hereof, Lessor shall have the right, but not the obligation, to cause repairs or corrections to be made and any reasonable cost incurred by Lessor therefor shall be payable by Lessee to Lessor. Upon termination of this Lease, the Purchase Option not having been exercised, Lessee shall deliver to Lessor the Leased Premises in good repair and condition, reasonable wear and tear excepted. Lessee shall repair any damage caused by Lessee's negligence or default hereunder, or negligence of Lessee's invitees, employees or customers. The Lessee will periodically have said building fumigated and/or sprayed for insects and rodents. Lessce grants Lessor a right of access to the Leased Premises to accomplish the intent of the provisions of this Lease, including Article 5 and Article 6 hereof. Article 7. Partial or Total Destruction of Leased Premises Section 7.1 Destruction of Facility. In the event the Facility should'be totally destroyed by fire, tornado, or any other casualty, or in the event the Facility should be so damaged that rebuilding or repairs cannot be completed within one hundred eighty (180) days after the date of such damage, either Lessor or Lessee may at its option terminate this Lease, in which event Rental Payments which may become due subsequent to the date of such damage shall be abated during the unexpired portion of this Lease effective with the date of such damage. In the event the Facility should be damaged by fire, tornado, or other casualty covered by casualty insurance, but only to the extent that rebuilding or repairs can be completed within one hundred eighty (180) days after the date of such damage, or if the damage should be more serious but neither Lessor or Lessee elects to terminate this Lease, then in either such event Lessor shall within sixty (60) days after the date of such damage commence to rebuild or repair the Facility and shall proceed with reasonable diligence to restore the Facility to substantially the same condition in which it was immediately prior to the happening of the casualty. In the event that the Facility is totally untenable, the Lessor shall abate the Rental Payments due during the time the Facility Kerr County Juvenile Board Lease-Purchase Agreement ti is unfit for occupancy. If the Facility is not totally untenable, the Lessor shall allow the Lessee a fair diminution of Rental Payments due during the time the Facility is partially unfit for occupancy. It is specifically provided, however, that: (i) any rights or benefits provided to Lessee by this Section 7.1 aze subject to Lessee having obtained and maintained in full force and effect the insurance coverages required to be provided by Lessee pursuant Article 4, and Section 4.1(b) specifically; and (ii) no abatement or partial abatement of Rental Payments pursuant to this Section 7.1 shall be or constitute a release, waiver or forfeiture of the benefits of any inc~irance provided pursuant to Section 4.1(b) or pursuant to any other provision hereof. In the event any mortgage instrument, deed of trust, security agreement or other financing document for the Facility should require that the casualty insurance proceeds be used to retire the mortgage, the Lessor shall have no obligation to rebuild and this Lease shall terminate upon notice to Lessee. Any obligation of the Lessor under this Article 7 shall be limited to the extent of the proceeds of casualty insurance actually received by the Lessor with regard to the Facility. Such obligations are further limited by the provisions herein regazding repair and replacement of the Facility, and with regard to the application of insurance proceeds. Article 8. Utilities Section 8.1 Utilities. Lessee shall pay for all utilities furnished the Leased Premises for the term of this Lease, including, but not limited to, electricity, gas, water and telephone service. Article 9. Assignment or Sub-Lease Section 9.1 Assignment or Sub-Lease by Lessee. Lessee agrees not to assign this Lease or sub-lease the Leased Premises, or any part thereof, or any right or -privilege connected therewith, or to allow any other person, except Lessee's agents, contractors and employees, to occupy the Leased Premises or any part thereof, without fast obtaining the Lessor's prior written consent. Lessee's interest in this Lease is not assignable by operation of law, nor is any assignment of its interest herein valid without Lessor's prior written consent. Article 10. Simon Section 10.1 Erection of Sims. Lessee shall not place signs or other objects upon the roof of any building on the Leased Premises or paint or otherwise deface the exterior walls of any building except with the prior written approval of Lessor. Notwithstanding the foregoing Lessee shall have the right to erect such other signs as it may desire subject to any applicable government laws, ordinances, or other requirements. Lessee shall remove all signs upon the Kerr County Juvenile Board Lease-Purchase Agreement 7 termination of this Lease. Any sign or object installed on or removed from the Leased Premises shall be installed or removed in such manner as to avoid injury, defacement, or overloading of the building and the other improvements. Article 11. Alterations Section 11.1 Alterations by Lessee. Lessee shall not create any openings in the roof or exterior walls, nor make'any alterations, additions, or improvements to the Leased Premises without the prior written consent of Lessor. All fixtures and improvements, including but not limited to floor coverings and heating and air conditioning units and all alterations, additions, and improvements, except trade fixtures, installed at the expense of Lessee, shall be the property of the Lessor and shall remain upon and be surrendered with the Leased Premises as a part thereof at the termination of the Lease. Article 12. Liability of Lessee Section 12.1 Lessor Independent Contractor. At all times that this Lease is in effect, the parties agree that Lessor is and shall be deemed to be an independent contractor and not an agent or employee of Lessee with respect to its acts or omissions hereunder. For all purposes hereunder, Lessor is and shall be deemed an independent contractor and it is mutually agreed that nothing contained herein shall be deemed or construed to constitute a partnership or joint venture between the parties hereto. The insurance requirements provided in Article 4 and the indemnification and hold harmless provisions provided in this Article 12 shall be in full force and effect to the fullest extent permitted by law. Section 12.2 Limited Indemnity. Lessee agrees, to the fullest extent if any permitted by law, to indemnify and hold harmless Lessor and its officers, directors, agents, employees and representatives from and against all liability for any and all claims, suits, demands, and/or actions arising from or based upon intentional or negligent acts or omissions on the part of Lessee, its officers, directors, agents, representatives, employees, members, visitors, contractors and subcontractors (excluding Lessor) which may arise out of or result from Lessee's occupancy or use of the Leased Premises and/or activities conducted in connection with or incidental to this Lease. Lessee shall also indemnify Lessor and its officers, directors, agents, representatives and employees against any and all mechanic's and materiahnen's liens or any other types of liens imposed upon the Leased Premises arising as a result of Lessee's conduct or activity. Section 12.3 Limited Indemnity -Nature of Claim. The indemnity provisions in this Article 12 extend to any and all such claims, suits, demands, and/or actions regardless of the type of relief sought thereby, and whether such relief is in the form of damages, judgments, costs and reasonable attorney's fees and expenses, or any other legal or equitable form of remedy. These indemnity provisions shall apply regardless of the nature of the injury or harm Kerr County Juvenile Board Lease-Purchase Agreement g alleged, whether for injury or death to persons or damage to property, and whether such claims are alleged as common law, statutory or constitutional claims, or otherwise. These indemnity provisions shall apply whether the basis for claims, suit, demand, and/or action may be attributable in whole or in part to the Lessee, or to any of its agents, representatives, employees, members, visitors, contractors, and subcontractors if any (excluding Lessor), or to anyone directly or indirectly employed by any of them. Section 12.4 Claims Asserted by Certain Third Parties. Lessee agrees the indemnity provisions of this Article~l2 shall apply to any and all claims, suits, demands and/or actions based upon or arising from any such claim asserted by or on behalf of Lessee or (excluding Lessor) any of its members, visitors, agents, employees, contractors and subcontractors. Section 12.5 Lessor Not Reponsible for Lessee Actions. It is expressly understood and agreed that the Lessor shall not be liable or responsible for the negligence of Lessee, its agents, servants, and employees. Lessee further agrees that it shall at all times exercise reasonable precautions for the safety of representatives, employees, members, visitors, contractors and subcontractors (if any), and/or sub-lessees, and other persons, as well as for the protection of supplies and equipment and the personal property of Lessor or other persons on the Leased Premises. Lessee and Lessor further agree to comply with all applicable provisions of Federal, State, and municipal safety laws, regulations and ordinances. Section 12.6 Lessee Not Resnonsible for Lessor Actions. It is expressly understood and agreed that the Lessee shall not be liable or responsible for the negligence of Lessor, its agents, servants, and employees, when Lessor is acting in its capacity as Lessor. Lessor further agrees that it shall at all times, when entering upon the Lease Premises as Lessor, exercise reasonable precautions,for the safety of representatives, employees, members, visitors, contractors and subcontractors (if any), sub-lessees, and other persons, as well as for the protection of supplies and equipment and the personal property of Lessee or other persons on the Leased Premises. Section 12.7 Notice of Claim. Lessee and the Lessor each agree to give the other party prompt and timely notice of any such claim made or suit instituted which in any way, directly or indirectly, contingently or otherwise, affects or might affect the Lessee or the Lessor. Lessee further agrees that these indemnity provisions shall be considered as an additional remedy to Lessor and not an exclusive remedy. Section 12.8 Liability Insurance. Lessee agrees that, pursuant to Section 4.2, it shall obtain or cause to be obtained for the benefit of Lessee and Lessor, and keep in full force and effect during the Term of this Lease, a policy or policies of liability in~~rance (or liability risk pool coverage) sufficient to protect Lessee and Lessor from the claims and matters referenced in this Article 12. Lessor and Lessee agree that such insurance may be provided by the operator pursuant to an operation and management agreement for the Facility, and Lessee agrees that it shall require any person, fum or entity contracting to operate and manage the Facility to provide insurance or risk pool coverage in such amounts as Lessee may deem reasonable and sufficient Kerr County Juvenile Board Lease-Purchase Agreement 9 to provide inc~irance or coverage against any claims or matters referenced in this Article 12. Lessor further agrees that, provided it has in writing approved the policy or policies of insurance or coverage provided pursuant to Section 4.2, including specifically the inc~rance or coverage provided pursuant to Section 4.2(a), and this Article 12, save and except for any mechanic and materialmen lien or similaz lien filed against the Leased Premises as a result of conduct or activity of the Lessee, the obligation of Lessee to Lessor pursuant to this Article 12 shall be limited to the insurance or coverage so provided and approved. ` Article 13. Access Section 13.01 Access by Lessor. Lessor may, during the term of this Lease, at reasonable times, enter the Leased Premises to view, inspect, show to prospective purchasers, and to exercise and accomplish any of its rights and responsibilities under this Lease. Article 14. Breach and Remedies Section 14.1 Breach. A breach or default under this Lease shall have occurred upon: (a) Failure by Lessee to pay when due any Rental Payments or other sums payable by Lessee hereunder, immediately upon written notice from Lessor; (b) Vacation or abandonment of the Leased Premises by Lessee; (c) Commencement of any case, action, or proceeding by, against, or concerning Lessee under any federal or state banlauptcy, insolvency, or other debtor's relief law, including without limitation a case, cause of action, or proceeding seeking Lessee's financial reorganization or an arrangement with any of Lessee's creditors; (d) Voluntary or involuntary appointment of a receiver, trustee, keeper or other person who takes possession of substantially all of Lessce's assets or of any asset used in Lessee's business on the Leased Premises, regardless of whether such appointment is as a result of insolvency or any other cause; (e) Execution of an assignment for the benefit of creditors of substantially all assets of Lessee available by law for the satisfaction of judgment creditors; (fj Commencement of proceeding for winding up or dissolving (whether voluntary or involuntary) the entity of Lessee; (g) Levy of a writ of attachment or execution on Lessee's interest under this Lease; Kerr County Juvenile Boazd Lease-Purchase Agreement 1(1 (h) Transfer or attempted transfer of this Lease by Lessee contrary to the provisions of this Lease; (i) Breach by Lessee of any other term, covenant, condition, warranty, or provision contained in this Lease or of any other obligation owing or due to Lessor, _ including, without limitation, such terms, covenants, conditions, warranties, or -provisions the violation of which are specifically designated as events of breach or default of Lessee hereunder, and further including but not limited to improper use of the Leased Premises or operation of the Lessee's business in violation of any applicable laws rules, or regulations; (j) Failure of Lessee to comply with any material rule or standard, after notice and failure to cure for a reasonable period of not less than thirty (30) days, of the Texas Juvenile Probation Commission applicable to it or its operation of the Leased Premises; or (k) Failure of Lessee to make a timely request to the Texas Juvenile Probation Commission for funds to satisfy its obligations under the Lease as contemplated and described in the Essential Use and Source of Funds Certificate attached hereto as Exhibit "C" and incorporated herein for all purposes. Section 14.2 1Ziehts of Lessor Upon Lessee's Default. Subject to, and except as provided in Section 17.5, upon the occurrence of any event of breach or default, Lessor shall have the option to do any one or more of the following without notice or demand, in addition to and not in limitation of any other remedy permitted by law or by this Lease: (a) Terminate this Lease, in which event Lessee shall immediately surrender the Leased Premises to Lessor. If Lessee shall fail to so surrender the Leased Premises, Lessor may without notice and without prejudice to any other remedy Lessor may have for possession or arrearage in rent, enter upon and take possession of the Leased Premises and expel or remove Lessee and its effects without being liable to prosecution or any claim for damages therefor. To the extent, if any, permitted by law, Lessee agrees to indemnify Lessor for all loss and damage which Lessor may suffer by reason of such termination, whether through inability to relet the Leased Premises or otherwise, including any loss of rental for the remainder of the Lease Tenn. (b) Lessor may remove all of Lessee's personal property from the Leased Premises, and may store such personal property in a public warehouse or at another place of its choosing at Lessee's expense or to Lessee's account. (c) Enter upon and take possession of the Leased Premises as the agent of Lessee without terminating this Lease and without being liable to prosecution or any Kerr County Juvenile Board Lease-Purchase Agreement 11 claim for damages therefor. Entry only, without notice of termination, will not terminate the Lease. Lessor may relet the Leased Premises as the agent of Lessee and receive the rent therefor, in which event Lessee shall pay to Lessor on demand the cost of renovating, repairing and altering the Leased Premises for a new tenant or tenants, together with interest on any sums so advanced computed at the highest lawful rate per annum from the date of the expenditure of such ' sums unffi such payment is received by Lessor, and any deficiency that may arise by reason of such reletting. Lessor, however, shall have no duty to relet the Leased Premises and the failure of Lessor to relet the Leased Premises shall not release or affect Lessee's liability for Rental Payments and other charges due hereunder or for damages. (d) Lessor may do whatever Lessee is obligated to do by the provisions of this Lease and may enter the Leased Premises without being liable to prosecution or any claim for damages therefor, in order to accomplish such purpose. Lessee agrees to reimburse Lessor immediately upon demand for any expenses, including attorneys' fees, which Lessor may incur in thus effecting compliance with this Lease on behalf of Lessee, together with interest on any sums so advanced computed at the highest lawful rate per annum from the date of the expenditure of such sums until such payment is received by Lessor, and Lessee further agrees that Lessor shall not be liable for any damages resulting to Lessee from such action, whether caused by the negligence of Lessor or otherwise. Section 14.3 Continuance of Lease. Upon the occurrence of any event of breach or default by Lessee and unless and until Lessor elects to terminate this Lease pursuant to Section 14.2 above, this Lease shall continue in effect after the occurrence of any event of breach or default by Lessee and Lessor may enforce all rights and remedies under this Lease, including without limitation, the right to recover payment of Rental Payments as they become due. Neither efforts by Lessor to mitigate damages caused by an event of breach or default by Lessee nor the acceptance of any Rental Payments shall constitute a waiver by Lessor of any of Lessor's rights or remedies, including the rights and remedies specified in Section 14.2 above. Section 14.4 Securiri Interest in Facility. The rights of Lessor under this Article 14 are subject to Section 17.5 and additional to all other rights to which Lessor is entitled in accordance with applicable law. Notwithstanding any other provision of this Lease to the contrary, in the event Lessee fails to pay any Rental Payment or to perform any other financial obligation pursuant to this Lease as a result of a failure to appropriate and/or insufficient revenues as set forth in Section 17.5, Lessor's remedies shall be limited to the Facility and the funds and revenues then available pursuant to appropriations specifically for and with respect to the Lease and the Interiocal Contracts for the housing of juveniles in the Facility. Notwithstanding any other provision of this Lease to the contrary, in the evem of a breach or default by Lessee the Lessor shall have the right to terminate this Lease or to reenter and take possession of the Leased Premises, with or without terminating this Lease, pursuant to any section, term or Kerr Couuty Juvenile Board Lease-Purchase Agreement 12 provision of this Lease, and Assignee may exercise any such right or power pursuant to the Lease or any agreement between Lessee and the Assignee. Article 15. Effect of Lessor's Waiver Section T5.1 Waiver by Lessor. Lessor's waiver of a breach or default of any covenant or condition of this Lease is not a waiver of breach or default of any others, or of subsequent breach or default of the one waived. Lessor's acceptance of Rental Payments after breach or default is not a waiver of the breach or default, except of breach or default of the covenant to pay Rental Payments or Rental Payments accepted. Article 16. Effect of Eminent Domain Proceedings Section 16.1 Condemnation. Eminent domain proceedings resulting in the condemnation of part of the Leased Premises that leave the rest reasonably usable by Lessee for purposes of the business for which the Leased Premises are leased will not terminate this Lease unless Lessor at its option terminates the Lease by giving written notice of termination to Lessee. The effect of any such condemnation will be to terminate the Lease as to the portion of the Leased Premises condemned, and leave the Lease in effect as to the remainder of the Leased Premises. Lessee's Rental Payments for the remainder of the Lease term shall in such case be reduced by the amount that the usefulness of the Leased Premises to it for such business purpose is reduced. Article 17. Miscellaneous Provisions Section 17.1 Governing Law. This Lease shall be construed and enforced in accordance with the laws of the State of Texas and the parties hereto shall interpret, constme and enforce its terms, conditions and provisions consistent with, and in a manner to preserve and protect, the continuing exercise and performance by Lessee of its governmental dudes, discretion and control. All obligations of the parties created hereunder are performable in the County. Section 17.2 Successors. The covenants and agreements contained in this Lease shall be binding on and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors, and assigns except as may otherwise be expressly provided herein. Section 17.3 Severability. In case any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Lease, but this Lease shall be construed as if such invalid, illegal or unenforceable provision had not been contained Kerr County Juvenile Boazd Lease-Purchase Agreement 13 herein. However, if Lessee's obligation to pay the Rental Payments is determined to be invalid or unenforceable, this Lease at the option of Lessor shall terminate. Section 17.4 Other Agreements. This Lease constitutes the sole and only agreement of the parties hereto and supersedes any prior written or oral lease agreement between the parties respecting the within subject matter. Section 17.5 Annrooriations. Notwithstanding any provision of this Lease to the contrary, the obligations of the Lessee contained herein are subject to and contingent upon appropriations by the State Legislature of state funds through the Texas Juvenile Probation Commission, or its successor, and the terms and conditions set forth in the Essential Use and Source of Funds Certificate attached as Exhibit "C" and incorporated herein for all purposes. Section 17.6 Attorney's Fees. If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Lease, the prevailing parry shall be entitled to recover reasonable attorney's fees from the other party, which fees may be set by the court in the trial of such action brought for that purpose, and which fees shall be in addition to any other relief which may be awarded. Section 17.7 Notices. Any notice required or desired to be given under this Lease shall be in writing with copies directed as indicated and shall be personally delivered or given by mail. Any notice given shall be deemed to have been given when hand delivered or, if mailed, as of seventy-two hours from the time when notice was deposited ip the United States mails (certified or registered, return receipt requested, postage prepaid), addressed to the party to be served with a copy as indicated herein. Either parry may change its address for purposes of notice by giving notice of such change of address to the other parry in accordance with the provisions of this Section 17.7. At the date of execution of this Lease, the addresses of the parties aze: Lessee: Kerr County Juvenile Boazd, 624 Jefferson Kerrville, Texas 78028 Attention: Chief Juvenile Probation Officer With copies to: County Judge and Judge, 198th Judicial District Kerr County Courthouse Kerrville, Texas 78028. Lessor: ReCor, Inc. 5912 Balcones Drive, Suite 250 Austin, Texas 78731 Attention: President Kerr County Juvenile Board Lease-Purchase Agreement 14 Assignee: ClriCorp Financial Services, Inc. 208 South LaSalle St. Chicago, Illinois 60604 Attention: Ramona Regas, Vice President Section 17.8 Operation and Management Contract. Lessee may, in its sole discretion, from time to time contract for operation and management of the Leased Premises or directly operate and manage the Leased Premises; provided that, in the event Lessee directly operates and manages the Leased Premises, Lessee agrees to and shall perform each duty and responsibility stipulated herein to be performed by the Management Contractor. Subject to the Lessee hereafter giving written notice to Lessor, on or before the Effective Date, that it will directly operate and manage the Leased Premises, Lessee agrees to enter into a contract with a third party (the "Management Contractor") for the operation and management of the Leased Premises (the "Operation and Management Contract") on or before the Effective Date. Lessee further agrees the Operation and Management Contract (if any) shall require the Management Contractor to administratively: (a) collect the costs, expenses and fees payable by Lessee pursuant to Articles 3, 4, 5 and 6 of this Lease; (b) secure and account for all funds; (c) secure all required property and liability insurance; and (d) make timely payment of all such tax, insurance and maintenance costs for and on behalf of Lessee. Section 17.9 Additional Covenants of Lessee. Lessee represents, covenants and warrants that it is an agency, a unit, a political subdivision or a governmental entity of the State of Texas, or that Lessee's obligation under this Lease constitutes an obligation issued on behalf of a state or political subdivision thereof, and that: (a) Any portion of the Rental Payments or other payments made by it in connection with this Lease which may subsequently be deemed interest derived under this Lease wffi qualify for exemption from federal income taxes under Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"); (b) This Lease represents a valid deferred payment obligation for the amount herein set forth and that Lessee, having the legal capacity to enter into the same, is not in contravention of any Town/City, District, County or State statute rule, regulation, or other governmental provision; (c) Lessee agrees (i) it will do or cause to be done all things necessary to preserve and keep the Lease in full force and effect; (ii) it has complied with all bidding requirements where necessary and by due notification presented this Lease for approval and adoption as a valid obligation on its part; and (iii) it has sufficient appropriations or other funds available to pay all amounts due hereunder for the current fiscal period; (iv) that during the term of this Lease, the Leased Premises will be used by Lessee only for the purpose of performing one or more governmental or proprietary functions of Lessee consistent with the permissible scope of Lessee's authority and will not be used in a trade or business of any person or Kerr County Juvenile Board Lease-Purchase Agreement 15 entity other than the Lessee; (v) it will take no action that will cause any portion of any Rental Payment deemed to be interest to become includable in gross income of the recipient for purposes of deferral of income taxation under the Code, as amended, and Lessee will take, and will cause its officers, employees and agents to take, all affirmative action legally within its power to prevent any such portion of any Rental Payment subsequently deemed to be interest from being includable in gross income for purposes of federal income taxation under the Code; and (vi) it will timely file the appropriate Forms 8033-G with the Internal Revenue Service; and (d) During the Term of this Lease, the compensation arrangements provided in any Operation and Management Contract executed by the Lessee for or with respect to the Facility shall satisfy the requirements of Section 5 of Revenue Procedure 93-19, as amended, and any then existing subsequent applicable regulations and rulings, so as to not cause the Facility to be treated as used in a private business use under section 141(b) of the Code, and (i) no such Operation and Management Contract shall provide for any compensation for services based, in whole or in part, on a share of net profits from the operation of the Facility; but (ii) shall provide a compensation arrangement and contract term authorized pursuant to sections 5.02(a),(b),(c) or (d), and 5.03 of Revenue Procedure 93-19, as amended, or its successor. Article 18. Purchase Options and Use Section 18.1 Continuing Ontion to Purchase. Lessee shall have the option to purchase Lessor's interest in this Lease and the Leased Premises on any applicable payment date for Rental Payments after the eighty-seventh (87th) month following the Effective Date ("Option Payment Date") providing: (i) Lessee is not in default under the Lease; (ii) Lessee gives notice to Lessor of its intention to exercise this option at least sixty (60) days prior to the Option Payment Date on which the option is to be exercised; (iii) Lessee has complied with all applicable laws concerning acquisition of property; (iv) there is a specific purchase option price shown in Exhibit "B" hereto and incorporated herein for all purposes on that Option Payment Date; and (v) on the Option Payment Date, the Lessee shall deposit with the Lessor an amount equal to all Rental Payments and any other amounts then due or past due (including but not limited to the Rental Payment due on the Option Payment Date) together with the applicable Purchase Option Price set forth in Exhibit "B". The closing shall be on the Option Payment Date or the fast business day preceding the Option Payment Date at the office of the Lessor or such other place as Lessor may direct. Section 18.2 Option at Expiration of Term. In consideration of the timely payment of the Rental Payments hereunder, the Lessee shall further have the option to purchase Lessor's interest in this Lease and the Leased Premises for the sum of One Dollar ($1.00) upon the expiration of the Lease Term, provided: (i) Lessee is not in default under the Lease; (ii) Lessee gives notice to Lessor of its intention to exercise this option within sixty (60) days from the date the Kerr County Juvenile Board Lease-Purchase Agreement 16 last scheduled Rental Payment is made and Lessee has been provided written notice by Lessor requesting directions for delivery of the deed held in escrow; and (iii) Lessee complies with all applicable laws concerning acquisition of the Leased Premises. Article 19. Permitted Uses Section 19.1 Premises Use. The Lessee will use the Leased Premises in a manner contemplated by this Lease and in the Essential Use and Source of Funds Certificate and shall comply with all applicable laws, ordinances, claims, damages, fees and chazges arising out of its possession, use or maintenance. The Lessee, at its expense, shall be responsible for and shall pay all charges for the maintenance of the Leased Premises. No more than ten percent (10%) of the use of any unit of the Leased Premises in any month will be by persons or entities other than the Lessee or its employees on matters relating to such employment, and no more than five percent (5 %) of use of any unit of the Leased Premises in any month will be unrelated to use by or for the Lessee; provided that the admission of persons assigned to the Facility by Lessee pursuant to a contract or agreement with a jurisdiction, unit or agency created pursuant to statute to perform governmental services similar to those performed by Lessee shall be deemed to be a use by Lessee. IN WTI'NESS WHEREOF, this Lease is executed as of the date above set forth: LESSEE: KERB COUNTY JUVENILE BOARD, as agent for Kerr County, Texas Name: Simon J. Harris Title: Juvenile Officer hief C ~ ~ /'l// .~.~~~~u By: ~ Name: William G. Stacy Title: County Judge LESSOR: RECOR, INC. By: NEd ?xgwv Name: Glen Heclonan Titie: President ATTES Corporate Secretary [sear Kerr Couuty Juvenile Board Ixase-Purchase Agreement 17 EXHII3TT "A" DESCRIPTION OF PROPERTY ~„/ EXI~TI' "A" All those certain lots, tracts or parcels of land set forth and described in a Gift Warranty Deed, dated December 16, 1986, from Mrs. Jewel Childs, a feme sole, to Schreiner College, recorded at Volume 406, Page 259, Real Property Records of Kerr County, Texas. The above-referenced property is more particularly described as follows: rn11CRl. 1.: Finld Noret~ of the 0.9:1! Here strip of land ly]ar between tbv vital. flood 1]nc of I'h+u certain Tr,.ct I and Tract 2 convcyad to J.C. Cltilda ar ux Ly llaul(lnu W. MaeKantin axNCUL'or of fire Estal:e of Julia A1ucKenzic NYC liy Werrmity Peed and recorded in ~Rolumc LG9, Paten 590, and qto oxiNtinli,'wr~t f.encc ~i.,e nn chat certain tract known as the CiCy T'arm, all out of ch.. $Nro Wsl]aaa Survey No. 1.11 Ah No. 359, Kerr Caunry, Texas and ntoru pur- ticularly dasarlbed au follows: llL'G1NNING,~Tehc intareection point of Clie afnranlantioncd $aSL' Dend lint. :md City perm fenca line, and from said inrNYeection point thn £auth Corner ut tits Sum Wallace Survey No. 111 Ab 359 bears fi 23° 30' I! 457,31 feet nlt~l s 45° w z8ae,9 fo.t; '1'Hh;NGC with th¢ Es>at neaA line of the afor.emenClauaJ'.l. (:. Chiidn tra+a. N 23° 3U' W 114.41 font, n ]/2"iron pin; N 11.°30' W y57 fNNI; North 39'l. foot and N IS° 01' L+ 154.7] fast tea point. !n +hC Northwant Linc af' rnid J,C, ~I+ilda tract; Tli1sNCB with Raid Northwest i.ine N 4$° R 65,44 foal ra a paint for the North C~rnez of the herein described tract; TIiLNGE 513' 23' War 19.8 feat pick up fence line and with waitl ekietiul; !'once line a total. diatanetl thSs course of 210.0 fect,a ftmce cornur; S O1° 35'W 3AH,67 f.aet; s 10° 56' 1i 918.12 foar; S 2G° 451 F. 39.96 feet and S 09° 52' L+ T02.42 feet to the Pi,/1CE Op 1S601NN1NC. PhRC1±L 7.1: '!'tact or parcel of land out of Survey No, 111, in 1:he nnutc elf Samuel td;llitt<:t: uituatud 1n Kcrr Cnunty. Toxxs, TracL• No. 1 campriulnK u]even acres of lun4, more or lets, Tract No. 2 comprislu;; 5,75 ucn+n of laud, more or lr.+s, and '1'rnct No, 3 ci,mprioinR 0.48 acre of land, mare or luNy. and Le1nC descrllutd by metes and bounds as followx, to wit: '1'7tAC'1' N(t,_ 1: ARCINN7NG at a point in rite oouthwaxt. line o[ :+ tract of l:uul averted by l 1I9s 27,955.49 16,528.26 11,437.23 N/A 2,751,354 44 lo/ 1/98 27,965.49 16,a53.s1 11,511.57 NJA 2,737,432 45 11/ 1/98 27,965.49 16,379.09 11,586.40 N/A 2,723,438 46 12/ 1/98 27,965.49 16,303.78 11,661.71 N/A 2,709,374 47 1/ 1/99 27,965.49 16,227,98 11,737.51 NJA 2,695,237 48 2/ 1/99 27,965.49 16,151.68 11,813.80 NJA 2,681,029 :%:',49 3/ 1,199 27,965.49 16,074.89 11.890.59 N/A 2,666,748 "SO 4/ 1/99 27,965.49 15,997.60 11,967.88 NJA 2,652,394 51 SJ 1/99 27,965.49 15,919.81 12,045.67 N/A 2,63'7,967 52 6/ 1/99 27,965.49 15,841.5 12,123.97 N/A 2,623,466 53 7/ 1/yy 27,965.49 15,762.71 12,202.78 NJA 2,608,891 (J,;'LL-y4 1L•llClri fnUlY/ IV J/1JILJLUJUJV -_ •vV J/VVJ l.Q1bVnL-~'llr nyrW nr. EXiiibit B - Payulent Schedule Number 1 Real Prope rty Lease-Purchase Agreement Lessa e: Ke rr COUnty Juvenile Detention Faci lity, TX Interest Purchase Pmt Payment Portion of option stipulated No. Data Amount Payment Principal Price Loss Value 54 8/ 1/99 27,965.49 15,683.39 12,282.09 N/A 2,594,242 55 9/ 1/99 27,965.49 15,603.56 12,361.93 N/A 2,579,518 56 10/ 1/99 27,965.49 15,523.21 12,442.28 N/A 2,564,718 57 11/ 1/99 27,965.49 15,442.33 12,523.15 N/A 2,549,844 58 12/ 1/99 27,965.49 15,360.93 22,604.56 N/A 2,534,893 59 1/ 1/00 27,965.49 15,279.00 12,6A6.49 N/A 2,519,866 60 2/ 1/00 27,965.49 15,196.54 12,768.95 N/A 2,504,762 61 3/ 1/00 27,965.49 15,113.54 12,851.95 N/A 2,489,582 62 4/ 1/00 27,965.49 15,030.00 12,535,48 N/A 2,474,323 63 5/ 1/00 27,965.49 14,945.92 13,019.56 NjA 2,458,987 ' 64 6/ 1/00 27,965.49 14,861.30 13,104.19 N/A 2,443,573 65 7/ 1/00 27,965.49 14,776.12 13,189.37 N/A 2,428,080 66 8/ 1/00 27,965.49 14,690.39 13,275.10 N/A 2,412, SOB 67 9/ ]./00 27,965.49 14,604.10 13,367.39 N/A 2,396,856 68 1.0/ 1/00 27,965.49 14,517.29 13,448.24 N/A 2,381,124 69 11/ 1/00 27,965.49 14,429.84 13,535.65 N/A 2,365,313 70 12/ 1/00 27,965.49 14,341.86 13,623.63 N/A 2,349,420 71 lj 1/O1 27,965.49 14,253.30 13,712.19 N/A 2,333,446 72 2/ 1/O1 27,965.49 14,164.17 13,801.31 N/A 2,317,391 73 3/ 1/01 27,965.49 14,074.46 13,891.02 NjA 2,301,254 74 4/ 1/O1 27,965.49 13,984.17 13,9$1.31 N/A 2,285,035 75 5/ 1/02 27,965.49 13,893.29 14,072.19 N/A 2,268,732 ' 76 6/ 1/O1 27,965.49 13,801.82 14,163.66 N/A 2,252,347 ~.. 77 7/ 1/O1 27,965.49 13,709.76 14,255.73 N/A 2,235,878 78 8/ 1/O1 27,965.49 13,617.10 14,348.39 N/A 2,219,324 79 9/ 1/01 27,965.49 13,523.83 14,441.65 N/A 2,202,687 80 10/ 1/01 27,965.49 13,429.96 14,535.52 NJA 2,185,964 81 li/ 1/01 27,965.49 13,335.48 14,630.00 NjA 2,169,156 82 12/ 1/O1 27,965.49 13,240.39 14,725.10 N/A 2,152,262 83 1/ 1/02 27,965.49 13,144.67 14,820.81• N/A 2,135,L82 A4 2/ 1/02 27,965.49 13,048.34: 14,917.15 2,118,216 2,118,216 85 3/ 1/02 27,965.49 12,951.38 15,014.11 N/A 2,101,062 86 4/ 1/02 27,965.49 12,AS3.79 15,111.70 N/A 2,083,821 87 5/ 1/02 27,965.49 12,755.56 15,209.93 N/A 2,066,491 88 6f 1/r02 27,965.49 12,656.69 15,308.79 N/A 2,OA9,074 89 7f 1/02 27,965.44 12,557.19 15,408.30 N/A 2,031,567 90 Sj 1/02 27,965.49 12,457.03 15,508.45 N/A 2,013,971 91 9/ 1/02 27,965.49 12,356.23 15,609.26 N/A 1,996,285 92 '10/ 1/02 27,965.49 12,254.77 15,710.72 N/A 1,978,509 93 11/ 1/02 27,965.49 12,152.65 15,812.84 N/A -1,960,642 94 12/ 1/02 27,965.49 12,049.87 15,915.62 N/A 1,942,684 95 1/ l/O:i 27,965.49 11,946.41 16,019.07 NJA 1,924,634 96 2/ 1/03 27,965.49 11,842.29 16,123.20 1,906,493 1,906,A93 97 3/ 1/03 27,965.49 11,737.49 16,L28.00 N/A 1,888,258 98 4/ 1/03 27,965.49 11,632.01 16,333.48 N/A 1,869,931 99 5/ 1/03 27,965.49 11,525.$4 16,439.65 N/A 1,851,510 100 F/ 1/03 27,965.49 11,418.98 26,546.50 N/A 1,832,994 101 7/ 1/03 27,965.49 11,311.43 16,654.06 N/A 1,814,385 V:r.102 8/ 1/03 27,965.49 11,203.18 16,762.31 N/A 1,795,680 ':03 9/ 1/03 27,965.49 11,094.22 16,871.26 N/A 1,776,880 104 20/ 1/03 27,965.49 10,984.56 16,980.93 N/A 1,75.7,984 105 11/ 1/03 27,965.49 10,874_1fl 17,091.30 N/A 1,738,992 106 1Z/ 1/03 27,965.49 10,7&3.09 17,202.40 N/A 1,719,902 •,.. a,. .'. .... .u v~ •~,.. J..uuvuu -- U/ LV JY 1{..111 Y1 I'1\V1LL Ulll uu..~.-' ' Exhibit 8 - Payment Schedule Number 1 Real Property Lease-Purchase Agreement Lesse e: Kerr County Juvenile Retention Facility, TX Interest Purchase Pmt Payment Portion of option Stipulated No. Hate Amount Payment Principal Price Loss Value 107 1/ 1/04 27,965.49 10,657.28 17,314.21 NjA 1,700,716 108 2/ 1/04 27,965.49 10,538.73 27,426.75 1,681,431 1,681,431 109 3/ 1/0~ 27,965.49 10,425.46 17,540.03 N/A 1,662,048 110 4/ 1/04 27,965.49 10,311.45 1'1,654.04 N/A 1,642,566 111 5/ 1/04 27,965.49 10,196.70 17,768.'79 N/A 1,622,984 112 6/ 1/04 27,965.49 10,081.20 17,884.29 DT/A 1,603,303 113 7/ 1/04 27,965.49 9,964.95 18,000.53 N/A 1,583,521 114 B/ I/04 27,965.49 9,847.95 18,117.54 N/A 1,563,638 115 9/ 1/04 27,965.49 9,730.18 18,235.30 N/A 1,543,653 116 10/ 1/04 27,965.49 9,611,66 18,353.83 N/A 1,523,567 117 11/ 1/04 27,965.49 9,492.36 18;473.13 N/A 1,503,378 118 12/ 1/04 27.965.49 9,372.28 18,593.21 N/A 1,483,086 119 1/ 1/05 27,965.49 9,251.42 18,714.06 N/A 1,462,690 120 . 2/ 1/05 27,965.49 9,129.78 18,835.70 1,a42,191 1,442,191 _ 121 3/ 1/05 27,965.49 9,007.35 18,958.14 NjA 1,421,586 122 4/ 1/05 27,965.49 8,884.12 19,0$1.36 N/A 1,400,877 123 5/ 1/05 27,965.49 B,760.09 19,205.39 N/A 1,380,062 124 6/ 1/05 27,965.49 $,635.26 19,330..23 N/A 1,359,140 125 7/ 1/05 27,965.49 8,509.61 19,455.87 N/A 1,338,112 126 8/ 1/OS 27,965.119 8,383.15 19,582.34 N/A 1,316,976 127 9/ 1/05 27,965.49 8,255.86 19,709.62 N/A 1,295,733 128 10/ 1/OS 27,965.49 $,127.75 19,837.73 N/A 1,274,381 { 129 71/ 1/OS 27,965.49 7,998.81 19,966.68 N/A 1,252,920 130 12/ 1/05 27,965.49 7,869.02 20,096.46 N/A 1,231,350 131 1/ 1/06 27,965.49 7,738.40 20,227.09 N/A 1,209,670 132 2/ 1/06 27,965.49 7,606.92 20,358.57 1,187,878 1,187,878 133 3/ 1/06 27,965.49 7,474.59 20,490.90 N/A 1,165,976 134 4/ 1/06 27,965.49 7,341.40 20,624.09 N/A 1,143,962 135 5/ 1/06 27,965.49 7,207.34 20,758.14 N/A 1,121,835 136 6/ 1/06 27,965.49 7,072.41 20,893.07' N/A 1,099,596 137 7/ 1/06 27,965.49 6,936.61 21,028.$8 N/A 1,077,243 138 8/ 1/06 27,965.49 6,799.92 21,165.57 NJA 1,054,776 139 9/ 1/06 27,965.49 6,662.35 21,303.14 N/A 1,032,194 140 10j 1/06 27,965.49 6,523.$7 21,441.61 NJA 1,009,497 141 11/ 1/06 27,965.49 6,384.50 21,580.98 N/A 986,684 142 12/ 1/06 27,965.49 6,244.23 21,721.26 N/A 963,755 143 1/ 1/07 27,965.49 6,103.04 21,862.45 N/A 940,709 144 2/ 1/07 2?,965.49 5,960.93 22,004.55 917,545 917,545 145 3/ 1107 27,955.49 5,817.90 22,147.58 NJA 894,2'63 146 4/ 1/07 27,965.49 5,673.94 22,291.54 N/A 870,862 147 5/ 1/07 27,965.49 5,529.05 22,436.44 NjA 847,341 148 6j 1/07 27,965,49 5,383.21 22,582.27 N/A 823,701 149 7/ 1107 27,965.49 5,236.43 22,729.06 N/A 799,939 150 8/ 1/07 27.965.49 5,088.69 22,&76.80 NJA 776,057 181 9/ 1/07 27,965.49 ~ 4,939.99 23,025.50 N/A 752,053 152 10/ 1/07 27,965.49 4,790.32 23,175.16 N/A 727,926 153 11/ Y/07 27,965.49 4,639.69 23,325.80 N/A 703,676 154 12/ 1/07 27,96$.49 4,488.07 23,477.42 NJA 679,302 ''1;:`_55 1/ 1/08 27,965.49 4,335.46 23,630.02 N/A 654,804 15b 2/ 1/00 27,965.49 4,181.87 23,7$3.62 630,180 630,180 187 3/ 1/08 27,965.49 4,027.28 23,938.21 N/A 60,431 158 4f 1/08 27,965.49 3,A71.68 24,093.82 ivjA 580,556 159 s/ i/U8 27,965.49 3,715.07 24,250.42 NfP_ 555,554 VV J/ UVJ U~"LU ~7 1L.11114 11\V1LL 111, /... u~/.u iu J/ lJ/LUa.uJVJU Vl11 VV1\\"- EXhib it B - Payment Schedule Number 1 Real Property Lease-Purchase Agreement Lesse e: Kerr County ~7UVenile Detention ~'aci iity, TX I Intexest Purchase l Pmt Payment Portion of Option stipulated No. Date Amount Payment Principal price Loss Value 160 6/ 1/08 27,965.49 3,557,44 24,40$.05 NJA 530,424 161 7/ 1/OS 27,965.49 3,398.79 24,566.70 N/A 505,166 162 8/ 1/0+8 27,965.49 3,239.10 24,726.38 N'/A 479,779 163 9/ 1/08 27,965.49 3,078.38 24,887.10 .N/A 454,262 164 10/ 1/OS 27,965.49 2,916.62 25,048.87 N/A 428,615 165 il/ 1/08 27,965.49 2,753.80 25,211.69 N/A 402,838 166 12/ 1/O8 27,965.49 2,589.92 25,375.56 N/A 376,928 267 1/ 1/09 27,965.49 2,424.98 25,540.50 N/A 350,887 168 2/ 1/09 27,965.49 2,258.97 25,706.52 324,712 324,712 169 3/ 1/09 27,965.49 2,091.88 25,873.61 N/A 298,404 170 4/ 1/09 27,965.49 1,923.70 26,041.79 N/A 271,962 171 5/ 1/09 27,965.49 1,754.43 26,211.06 N/A 245,384 172 6/ 1/09 27,965.49 1,584.05 26,381.43 N/A 218,671 173 7/ 1/09 27,965.49 1,412.58 26,552.91 N/A 191,822 174 8/ 1/09 27,965.49 1,239.98 26,725.51 N/A 164,836 175 ,9/ 1/09 27,965.49 1,066.27 26,899.22 N/A 137,712 176 10/ 1/09 27,965.49 891.42 ?7,074.07 N/A 110,489 177 il/ 1/09 27,965.49 715.44 27,250.05 N/A 83,047 178 12/ 1/09 27,965.49 538.31 27,427.17 N/A 55,506 179 1/ 1/10 27,965.49 360.04 2'1,605.45 N/A 27,823 180 z/ 1/10 27,965.49 180.60 27,784.88 5,033,787.57 2,071,787.57 2,962,000.00 The above schedule c9~~a~ins $211,785.00 in Capitalizefl intere t Agreed to by: ~ Date: 3p ~ ~ Title: - - r.. EXI~BIT "C" STATE OF TEXAS COUNTY OF KERB ESSENTIAL USE AND SOURCE OF FUNDS CERTIFICATE This Exhibit is attached and made a part of the Lease-Purchase Agreement dated as of March 31, 1994, between ReCor, Inc., as Lessor, and the Kerr County Juvenile Board, as agent for Kerr County, Texas (the "Boazd"), as Lessee. All capitalized terms used herein and not otherwise defined shall have the same meaning as used in the Lease. This confirms and affirms that the Leased Premises is essential to the function of the undersigned and to the service we provide our citizens. Further, we have an immediate need for, and expect to make immediate use of, substantially all of the Leased Premises which is not temporary or expected to diminish in the foreseeable future. The Leased Premises will be used by us only for the purpose of performing one or more of our governmental or proprietary functions consistent with the permissible scope of our authority. Specifically, the Leased Premises was selected by us to be used as a secure juvenile detention facility (the "Facility"). The secure juvenile detention facility program is a vital link in the statewide initiative to divert juvenile violators from state facilities and allow them to return to the local community as productive and law abiding citizens. Therefore, the Boazd has agreed that it shall make timely requests for funds from the State Legislature through the Texas Juvenile Probation Conuuission ("TJPC"), when and as consistent with TJPC policies and procedures in effect from time to time and funds are available for such purposes, to enable the Lessee to make all payments under the Lease, - or to pay Lessee's obligations under the Lease, or for direct payment of amounts pursuant to Interlocal Contract.. Lessee further agrees that in the event such funds aze appropriated by the Legislature and provided to Lessee by the TJPC, Lessee shall utilize such funds to maintain and satisfy its obligations pnrcnant to the Lease. The Board has further agreed that it shall place juvenile offenders from the County, who are placed and confined in the custody of the Boazd by court order, in the Facility and that it shall work to obtain Interlocal Contracts with other jurisdictions that have responsibility for juvenile offenders and access to funds from the State Legislature through the TJPC for the housing and placement of juveniles. The Board will seek Interlocal Contracts to enable the Lessee to make all payments under the Lease from TJPC funds appropriated directly to the Board therefor and/or to jurisdictions contracting to place juveniles in the Facility. The funds, if any, appropriated and received directly from TJPC for the purpose of paying Lessee's obligations under the Lease and funds available from Interlocal Contracts will be applied to the Lease obligations. The sources of funds for the payment of all the obligations of Lessee under the Lease will be the revenues actually received from the housing of juveniles that are in the custody and jurisdiction of the Board, pursuant to court order or Intetlocal Contracts with other jurisdictions. The funding for the Boazd and other entities to house residents at the Facility derives from discretionary appropriations to the Board and other entities and from funds provided by the State Legislature through the TJPC. r~~has a that it will take the steps required to have funds appropriated by the State` gislat ue in each biennium and to actively pursue the requirements necessary for appropriations during the term of the Lease. The estimated useful life of the Leased Premises based upon our projected needs is in excess of twenty (20) yeazs. Our source of funds for payments of the Rental Payments due under the Lease for the current fiscal yeaz is appropriations from the State of Texas. We expect and anticipate adequate funds to be available for all future Rental Payments due after the current fiscal year. LESSEE: Kerr County Juvenile Board, as agent for Kerr County Texas. By: Name: William G. Stacy Title: Chairman of the Boazd (~ By: ~ rl Name: Simon J. Hams Title: Chief Juvenile Probation Officer ESCROW AGREEMENT RELATING TO THE KERB COUNTY JUVENILE FACILTI'Y THIS ESCROW AGREEMENT Relating to the Ken County Juvenile Facility (the "Escrow Agreement"), is made as of the 31st day of Mazch 1994 by and between The Chicago Corporation; a Delaware Corporation ("Escrow Agent"), ReCor, Inc., a Texas corporation ("Lessor"), the Kerr County Juvenile Board, as agent for Kerr County, Texas ("Lessee") and ChiCorp Financial Services, Inc., a Delaware corporation ("CFSI"). Witnesseth that, in the joint and mutual exercise of their powers, and in consideration of the mutual covenants herein contained, the parties hereto recite and agree as follows: ARTICLE I. DEFINITIONS AND RULES OF CONSTRUCTION Section 1.01. Definitions. Capitalized terms herein shall have the meanings given them in the Lease, as hereinafter defined, except as follows: "Assigmnent" means the Assignment of Lease-Purchase Agreement, dated as of even date herewith, transferring and conveying the Lease from the Lessor to CFSI. "Beneficiary" means the Beneficiary set forth in the Deed of Trust. "Costs of the Project" means (a) obligations of the Lessor incurred, or reimbursement to the Lessor, for labor and to contractors, builders and materiahnen in connection with the acquisition, construction and installation of the Project; (b) the cost of contract bonds and of insurance of all kinds that may be required or necessary during the course of construction of the Project which is not paid by the contractor or contractors or otherwise provided for; (c) all costs of engineering services, including test bearings, surveys, estimates, plans and specifications and preliminary investigations, and supervising construction, as well as for the performance of other duties required by or consequent upon the proper construction of the Project; and (d) all other costs which the Lessor shall be required to pay, under the terms of any contract or contracts, for the acquisition, construction and installation of the Project. "Deed of Trust" or "Mort¢aQe" means the Deed of Trust (with Security Agreement and Assignment of Rents and Leases) dated as of even date herewith from the Lessor to Victor Elting III, Trustee, as security for performance under the Lease. "Distribution" means any payment received as principal or interest pursuant to the Lease. "Escrow Fund" has the meaning set forth in § 3.01 hereof. "Event of Default" means a default under the Lease, as defined in Article 14 thereof. "Lease" means that certain Lease-Purchase Agreement between the Lessor and Lessee, dated as of March 31, 1994, together with all riders, exhibits, addenda, amendments and supplements thereto. "OwneY" means CFSI, its successors and assigns, the owner of the Mortgage and Lease pursuant to the Assignment. "Payment Date" means any payment due dates as set forth in the Schedule of Payments attached hereto as Exhibit "A". "Payments" means all payments due and to become due under the Schedule of Payments attached hereto as Exhibit "A". "Principal Office", means the principal office of the Escrow Agent situated at 208 South LaSalle, Chicago, II.. 60604. "Project" means the acquisition, construction and equipping of the Property. "Pro "means the property set forth in the Deed of Trust. "Rental Deposit" means a dollaz amount equal to three (3) Rental Payments. "Requisition Certificate" means a certificate in the form attached as Exhibit "B". ARTICLE II. RECITALS AND REPRESENTATIONS Section 2.01. Assignment. The Lessor shall execute and deliver the Assignment to CFSI and CFSI shall contemporaneously deposit with the Escrow Agent a portion of the proceeds to be derived from the transfer and sale of the Lease by CFSI to its assignee. Section 2.02. Lease. The Lessor and the Lessee have entered into the Lease whereby the Lessor has agreed to lease the Property to the Lessee and the Lessee has agreed to lease the Property from the Lessor. Under the Lease, the Lessee is obligated to pay to the Lessor or its assigns Rental Payments for the lease of the Property. Section 2.03. Assignment and Security for Benefit of Owner. As security for the payments coming due under the Lease, the Lessor will convey the Property and assign all of its right, title and interest in and to the Lease, insofar as it relates to such Property and the right Escrow Agreement Kerr County Juvenile Facility 2 to receive payments with respect to such Property, to CFSI pursuant to the Deed of Trust and the Assignment of Lease. Section 2.04. Acquisition and Construction. The Lease provides that the Lessor shall cause the Property to be acquired, constructed and installed in accordance with the Lease, and the Escrow Agent shall not be obligated to assume or perform any obligation of the Lessee or of the Lessor under the Lease with respect thereto or by, reason of anything contained in this Escrow Agreement. Section 2.05. Escrow Agent. The Lessor agrees to employ the Escrow Agent to receive, apply and disburse the Payments to the Owner, all as hereinafter provided. Section 2.06. Authority to Contract. Each of the parties has authority to enter into this Escrow Agreement and has taken all actions necessary to authorize its execntion and delivery by its duly authorized officers signing at the signature page hereof and the performance of its respective obligations hereunder; provided that the obligations of the Lessee shall be limited to the proceeds from the sale of the Lease and to appropriations, if any, made and received by the Lessee. Section 2.07. Conditions Precedent Satisfied. All acts, conditions and things required by law to exist, happen and be performed precedent to and in connection with the execution and entering into of this Escrow Agreement have happened and have been performed in regular and due time, form and manner required by law, and the parties hereto are now fully empowered to execute and enter into this Escrow Agreement. ARTICLE III. ESTABLISIIlVIENT AND ADMINISTRATION OF FUNDS AND ACCOUNTS Section 3.01. Establishment of the Escrow Fund. (a) The Escrow Agent shall establish an Escrow Fund which shall consist of various accounts as provided for herein and as specified in a letter of instruction to the Escrow Agent from the Lessor and CFSI or its assignee. These accounts shall include (but not be limited to) an Acquisition Fund, a Construction Account, a Payment Account and a Redemption Account. The Escrow Agent shall further establish a Tax and Insurance Escrow Account upon request of the Owner. (b) Upon execution of this Escrow Agreement, the Lease, the Assignment and Notice of Assignment, the Escrow Agent shall deposit $ 2,962,000.00 into the Acquisition Fund held by Escrow Agent for paying the costs of the land, development, legal and financing expenses and to establish the accounts and funds hereinafter provided in this Article and the Escrow Agent shall promptly pay and disburse therefrom Lessee's and CFSI's legal fees and all the costs, underwriting fees and expenses of CFSI. Escrow Agreement Kerr Counry Juvenile Facility 3 (c) Thereafter, upon written notice from CFSI to Escrow Agent that CFSI is in receipt of: (i) properly executed Interlocal Cooperation Agreements for 24 beds in the_ Facility (including the beds to be used by Lessee); (ii) an executed Operation and Management Agreement between ReCor, Inc. and Lessee; and (iii) the Mortgagee Title Policy, Deed of Trust, required certificates, opinions and miscellaneous financing documents, all acceptable to CFSI, the Escrow Agent shall fund and disburse the the costs and expenses for acquisition of the land and listed in 3 closing statement executed by each of the parties to the closing and approved by CFSI, and shall allocate the balance of the Acquisition Account as follows: (1) $211,785.00 to the Payment Account as capitalized interest for the payment of interest on the Facility during construction; (2) $83,896.47 to the Payment Account as the Rental Deposit; and (3) the balance of the Acquisition Fund to the Construction Account: Section 3.02. The Construction Account. Within the Escrow Fund, there shall be established a special account to be designated as the "Construction Account." Disbursements of moneys in the Construction Account shall be made no more frequently than once each month for Costs of the Project, provided that at the time of each such disbursement (1) no Event of Default, or event which, with the giving of notice or lapse of time or both, would be an event of default, exists under this Agreement, (2) no litigation or proceedings aze pending or threatened (including proceedings under Title Eleven of the United States Code) against the Lessor, the Project or the contractor, which litigation or proceedings aze material (or which, in the case of the contractor, could materially affect the completion of the Project); and (3) the Escrow Agent has received a properly executed draw request in the same form as attached hereto as Exhibit "B". Disbursements shall be made promptly by the Escrow Agent as instructed in the draw request. Section 3.03. Certificate as to Completion. -The completion date of the Project and the payment of the Costs of the Project shall be evidenced to the Escrow Agent by (a) a permanent certificate of occupancy or its equivalent for the Project from all applicable governmental authorities having jurisdiction over the premises, together with any other necessary governmental approvals; and (b) certifications that the Project has been fully and fmally completed in accordance with Lessee's specifications as evidenced by a properly executed draw request in the form of Exhibit "B" indicating that the request is the final request from Lessor. Section 3.04. The Payment Account. (a) Within the Escrow Fund, there shall be established a special account to be designated as the "Payment Account." Subject to the Owner exercising the Option provided is Section 5.03 hereof, such account shall be maintained by the Escrow Agent until all Payments are paid in full pursuant to the terms of the Lease. Any payment made by the Lessor and/or Lessee to the Escrow Agent shall be immediately deposited by the Escrow Agent in the Payment Account. Additionally, notwithstanding the Section 5.03 Option, a portion of the proceeds from the sale of the Lease to CFSI equal to the Rental Deposit shall be deposited in the Payment Account. Payments received by the Escrow Agent shall be first applied in whole or in part as necessary to replenish and maintain the Rental Deposit. Escrow Agreement Kerr County Juvenile Facility 4 (b) The Escrow Agent shall withdraw from the Payment Account, on each Payment Date, an amount equal to the amount of principal and interest payments due with respect to the Lease on such Payment Date, and shall cause the same to be applied to the payment of principal and interest payments due with respect to the Lease on such Payment Date. Except as is necessary to pay any delinquent Payments, an amount equal to the Rental Deposit shall be reserved in the Payment Account until the final payment is made of all amounts owed to the Owner under'the Lease. (c) To the extent that, on the final Payment Date with respect to the Lease, the balance in the Payment Account for the Lease exceeds the amount due to the Owner under this Section 3.04, then such excess shall be applied first to any delinquent Distributions or deficiencies due the Owner and the remainder to the Lessor. Such excess shall include, without limitation, the Rental Deposit reserved pursuant to subsecfion 3.04(a) of this Escrow Agreement. Section 3.05. The Redemption Account. Within the Escrow Fund, there shall be established a separate account designated the "Redemption Account". Moneys to be used for redemption of the Lease shall be deposited in the Redemption Account and shall include: proceeds of insurance or condemnation; all other moneys, exclusive of the Rental Deposit, derived from the lease, sale, sublease or other disposition of the Property; and such other amounts as may be paid to the Escrow Agent in respect of the Property, other than as provided for in Sections 3.02, 3.04 and 3.06 of this Escrow Agreement. Except for insurance or condemnation proceeds applied to repair or replacement of Property under the terms of the Deed in Trust, said moneys shall be set aside in the Redemption Account solely for the purpose of redeeming all or part of the Lease in advance of its maturity and shall be applied to the payment of principal and interest with respect to the Lease to be redeemed upon presentation and surrender of such Lease. To the extent that the balance in the Redemption Account exceeds the amount needed to redeem the Lease in accordance with this Section, then such excess shall be applied fast to any delinquent Distributions or deficiencies due any Owner and the remainder to the Lessor. Section 3.06. Tax and Insurance Escrow Account. Upon the request of the Beneficiary, the Escrow Agent shall establish a Tax and Insurance Escrow Account and Lessor and/or Lessee shall pay to Escrow Agent for deposit into such account funds sufficient to pay all taxes, assessments and insurance premiums for and with respect to the Property. From and after the creation of said account, if any, the Escrow Agent shall accept and use such funds for the purpose of paying the insurance premiums, taxes and assessments on the Property. Section 3.07. Investment of finds. All moneys held by the Escrow Agent in any of the accounts constituting the Escrow Fund established pursuant to this Escrow Agreement shall be invested at the written direction of the Lessor in a taxable money market portfolio restricted to obligations with maturities of one year or less, composed of obligations issued or guaranteed Escrow Agreement Kerr County Juvenile Facility 5 as to payment of principal and interest by the full faith and credit of the U.S. government or repurchase agreements secured by U.S. government obligations. ARTICLE IV. RESPONSIBILITIES OF THE ESCROW AGENT Section 4.01. ~lin2s. CFSI and the Lessor shall provide a completed I.R.S. Form W-8 or Form W-9 to the Escrow Agent at the signing of this agreement. The Escrow Agent may delay accepting escrow funds or property until the I.R.S. forms have been provided. For purposes of reporting to tax authorities, the Escrow Agent will report all income earned by the escrow as paid upon distribution. Lessor agrees to indemnify and hold the Escrow Agent harmless against all liability for tax withholding and/or reporting for any payments made by Escrow Agent pursuant to the Escrow Agreement. Such indemnity shall survive the termination or discharge of this Escrow Agreement or resignation of the Escrow Agent. Section 4.02. Amendment. No amendment, modification or addition hereto shall have effect or be binding unless in writing and executed by all of the parties hereto or their respective duly authorized representatives. Section 4.03. Limited Duties. The Escrow Agent shall have no duties or obligations except those expressly set forth in this Escrow Agreement, and no implied duties or obligations shall be read into this Escrow Agreement against the Escrow Agent. The Escrow Agent shall have no responsibilities or liability to any of the parties hereto or their successors for any action taken by it in good faith upon receipt of any instn,mentS or other writing believed by it to be properly signed or presented. Incase any property deposited under this Escrow Agreement shall be attached, garnished or levied upon pursuant to an order of court or other authority having jurisdiction, or the delivery thereof shall be stayed or enjoined by an order of court, or any order, judgment or decree shall be made or entered by any court affecting such property, or any part thereof, the Escrow Agent shall obey and comply with all final writs, orders, judgments or decrees so entered or issued by any court, without the necessity of inquiry whether such court had jurisdiction; and, with respect to such writ, order, judgment, or decree, the Escrow Agent shall be held harmless and indemnified by the parties hereto, jointly and severally, by reason of such compliance. Upon receipt of notice of an order, writ, judgment or decree, the Escrow Agent will transmit copies of said writ, other process or pleading received to all parties hereto. Section 4.04. Obli>=ation to Make Payment. The Escrow Agent shall have no obligation to make any payment or disbursement of any type pursuant hereto or to incur any financial liability in the performance of its duties hereunder unless there shall have been deposited with the Escrow Agent sufficient funds therefor. Escrow Agreement Ketr County Iuvenile Facility 6 Section 4.05. Indemnification of The Escrow Agent. The Escrow Agent may conclusively rely upon and shall be protected, indemnified and held harmless by Lessor and CFSI in acting upon the written (which shall include, without limitation, instructions given by facsimile or other telecommunications device) or oral instructions of any officer or authorized representative of either of them or of counsel to either of them with respect to any matter relating to its actions as Escrow Agent hereunder, and the Escrow Agent shall be entitled to request that further instructions be given in writing. Section 4.06. Reliance on Representations. In performing its duties under this Escrow Agreement, the Escrow Agent is authorized to conclusively rely upon any statement, consent, request, requisition, agreement or other instrument not only as to its due execution, its validity, and the effectiveness of its provisions, but also as to the truth and accuracy of any information contained therein, which the Escrow Agent shall in good faith believe to be genuine or to have been represented or signed by a proper person or persons. The Escrow Agent shall not be liable for any error or judgment made in good faith by an officer of the Escrow Agent, unless it shall be proved that the Escrow Agent was grossly negligent in ascertaining the pertinent facts or acted intentionally in bad faith. The Escrow Agent shall have no liability for any action or omission to act with respect to its duties under this Escrow Agreement undertaken in good faith reliance upon the advice of its counsel. Section 4.07. Fees and Exuenses. Lessor shall reimburse the Escrow Agent drectly for all out-0f-pocket expenses incurred by the Escrow Agent in connection with the negotiation, preparation and execution of this Escrow Agreement or in the performance of its duties as Escrow Agent hereunder, including, but not limited to the reasonable fees of its counsel in reviewing this Escrow Agreement or in performing other legal services in connection herewith, and including specifically but without limitation any legal or other expenses with respect to any action for interpleader by the Escrow Agent. Lessor and CFSI shall, in addition, pay the fees and expenses to the Escrow Agent directly in accordance with Exhibit "C" attached hereto. Section 4.08. Extraordinary Exaenses by Escrow Agent. Lessor.covenants and agrees to indemnify the Escrow Agent and hold it harmless against any loss, liability or expense arising out of or in connection with the performance of its duties hereunder, including, but not limited to, legal and other fees and expenses and including specifically but without limitation, any legal or other expenses with respect to any action for interpleader by the Escrow Agent, except that the Escrow Agent shall not be indemnified against any such loss, liability or expense arising out of its gross negligence or willful misconduct. The Escrow Agent shall be under no obligation to institute or defend any action, suit or legal proceeding in connection herewith, unless first indemnified and held harmless to its satisfaction in accordance with the foregoing. Such indemnity shall survive the termination or discharge of this Escrow Agreement or resignation of the Escrow Agent. Section 4.09. Notices. All notices, reports, instructions, requests and other communications given under this Escrow Agreement shall be either (i) sent in writing and served Escrow Agreement Kerr County Juvenile Facility '7 personally by delivery to a responsible officer at the party's offices listed on the signature pages hereto or delivered by fast class, registered or certified United States mail, return receipt requested, postage prepaid; or (ii) sent by facsimile and then acknowledged as received by return facsimile by the intended recipient. Notices shall be directed to the addresses or facsimile numbers as follows: To Lessor: RECOR, Inc. 5912 Balcones Drive, Suite 250 Austin, Texas 78731 Phone (512) 452-6477 FAX (512) 452-9604 To Lessee: Kerr County Juvenile Board 624 Jefferson Kerrville, Texas 78028 Attention: Chief Juvenile Probation Officer Phone: (210) 896-2202 Fax: (210) 896-7380 To CFSI: ChiCorp Financial Services, Inc. 208 South LaSalle Chicago, IL 60604 Attention: Romona Regas, Vice Pres. Phone: (312) 855162 Fax: (312) 855-6002 with a copy to: Bickerstaff, Heath and Smiley, L.L.P. 98 San Jacinto Center ;•11800 Austin, Texas 78701 Attention: Barney Knight Phone (512) 472-8021 FAX (512) 320-5638 To Escrow Agent: The Chicago Corporation 208 South LaSalle Chicago, IL 60604 Attention: Victor Elting, Sr. Vice Pres. Phone: (312) 855-5882 Fax: (312) 855-6002 A party may change its address or numbers for notices under this Escrow Agreement by giving written notice to the other party in accordance with this paragraph. Escrow Agent shall have no responsibility for or dory to notify any party hereto or any other party of any payment required or maturity occurring under this Escrow Agreement or under the terms of any instrument deposited herewith unless such notice is explicitly provided for herein. Section 4.10. Resignation of Escrow Agent. The Escrow Agent may resign at any time by giving ten days written notice to Lessor, Lessee and CFSI at the addresses below. On the Escrow Agreement Ketr County Juvenile Facility effective date of such resignation, the resigning Escrow Agent may deliver to any Escrow Agent appointed by Lessor and CFSI, all documents and money held hereunder, and thereupon the Escrow Agent will be released of any further responsibility or obligation in connection with the funds held in Escrow under this Escrow Agreement. Section 4.11. Conflicting Demands. In the event of any conflicting demands, disagreements or disputes arising out of the subject matter of this Escrow Agreement or should the Escrow Agent resign and the Lessor and CFSI fail to select another Escrow Agent to act in its stead, the Escrow Agent shall have the right, at its option, to refuse to comply with any claims or demands on it, or refuse to take any other action hereunder, so long as such disagreement continues; in doing so the Escrow Agent shall not be or become liable for damages or interest to Lessor, Lessee or CFSI or to any persons for its failure to comply with such conflicting or adverse demands. The Escrow Agent may continue to so refuse to act until (i) the rights of the adverse claimants have been finally adjudicated in a court assuming and having jurisdiction; or (ii) all differences have been settled by mutual agreement and the Escrow Agent shall have been notified thereof in a writing signed by all interested persons. Alternatively, the Escrow Agent may file a suit in interpleader for the purpose of having the respective rights of the claimants adjudicated, and deposit with the court all funds and documents held hereunder. Section 4.12. Governing Law. This Escrow Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Texas. Venue shall be in Kerr County, Texas. This Escrow Agreement, together with the attached Exhibits and the documents referred to herein, constitutes the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements and undertakings of the parties in connection herewith. All of the terms, covenants, conditions and provisions of this Fscrow Agreement shall bind and inure to the benefit of the parties hereto and to their respective successors and assigns. No failure or delay on the part of the Escrow Agent in exercising any right, power or remedy may be, or may be deemed to be, a waiver thereof; nor may any single or partial exercise or any right, power or remedy preclude any other or further exercise of any other right, power or remedy. In the event one or more provisions of this Fscrow Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Escrow Agreement shall not be affected or impaired. Each of the parties hereto shall, at the request of the other party, deliver to the requesting party all further documents or other assurances as may reasonably be necessary to give full affect to this Agreement and to allow each parry fully to enjoy and exercise the rights accorded to it under this Agreement. This Escrow Agreement may be executed in any number of counterparts, each of which shall be an original and all of which shall be deemed to be one and the same instrument. Escrow Agreement Kerr County Iuvenile Facility 9 ARTICLE V. ADMINISTRATIVE AND MISCELLANEOUS Section 5.01. Escrow Agent to Keep Records. The Escrow Agent shall keep a copy of this Escrow Agreement on file and will provide its standard accounting statements to the Lessor, Lessee and CFSI on a monthly basis. The foregoing shall be available for inspection by the parties hereto upon reasonable notice during regular business hours. Section 5.02. Escrow and Delivery of Deed. Upon acceptance of the Project and all the Property by the Lessee pursuant to Section 3.03 of this Escrow Agreement, the Lessor shall execute and place in escrow with the Escrow Agent a warranty deed, in the form and substance of Exhibit "D" attached hereto and made a part hereof for all purposes (the "Deed"), to be held in escrow by the Escrow Agent and delivered to the T.essee upon Lessee exercising the purchase option as provided in Article 18 of the Lease. In the event the Lease is otherwise lawfully terminated the Escrow Agent shall deliver the Deed to the Owner or the Lessor as directed in writing by the Owner or the Lessor. Section 5.03. Owner Pavment Option. Notwithstanding any other provision herein, the Owner shall have the option to require that Payments be made directly to the Owner (the "Option"). The Option may not be exercised until the certifications of final completion have been made and all Costs of the Project paid as provided in § 3.03. The Owner may exercise the Option only by giving written notice to Lessor, Lessee and the Escrow Agent directing that payments be made to the Owner. After exercising the Option the Owner shall keep all Payment records and this Escrow Agreement shall otherwise remain in full force and effect and the Escrow Agent shall continue to hold the Rent Deposit and Deed. IN WTTNESS WHEREOF, the parties have executed and attested this Escrow Agreement by their officers thereunto duly authorized as of the date and yeaz first above written. KERR COUNTY JUVENILE BOARD, as Agent for Kerr County, Texas sy: ~ By: Name: William G. Stag Name: Title: Chairman of the Boazd Title: CHICORP FINANCIAL SERVICES, INC. By: Name: Ramona Regas Title: Vice President THE CHICAGO CORPORATION, as Escrow Agent RECOR, INC. By: ~ w•- Name: Glen Heckman Title: President Escrow Agreement Kerr County Juvenile Facility EXIIIBIT A -PAYMENT REQUEST FORM TO: The Chicago Corporation (The "Escrow Agent") FROM: ChiCorp Financial Services, Inc. ("ChiCorp"); Seabreeze Construction Company ("ContractorBuilder"); 'ReCor, Inc. ("Lessor"); Bernard Jason Merritt ("Architect"); and Kerr County Juvenile Boazd ("Lessee") SUBJECT: Escrow Agreement dated as of March 31, 1994, (The "Escrow Agreement") and the Lease-Purchase Agreement, dated as of March 31, 1994, between ReCor, Inc., as Lessor, and the Kerr County Juvenile Board, Individually and as agent for Kerr County, Texas, as Lessee, (the "Lease") for the Lease of a juvenile probation facility (the "Facility") This represents Requisition Certificate No. in the total amount of $ for payment of those Costs of the Facility detailed in the attached payment instructions. The undersigned Lessee, Lessor, Architect and Contractor/Builder certify that: All of the expenditures for which moneys aze requested hereby represent proper Costs of the Facility, have not been included in a previous Requisition Certificate and the Contractor/Builder represents that such expenditures have been properly recorded in the Contractor/Builder's books. 2. The moneys requested hereby are not greater than those necessary to meet obligations due and payable or to pay and reimburse the Contractor/Builder for fees or funds actually earned or advanced for Costs of the Facility. The moneys requested do not include retention or other moneys not• yet -due or earned under construction contracts. After payment of .moneys hereby requested, there will remain available to the Contractor/Builder (from the Acquisition Fund) sufficient funds to complete the substantially in accordance with the Plans. EXECUTED this day of Seabreeze Construction Company By: Name: John McCabe Title: 1994. By: Name: Bernard Jason Memtt, AIA Title: Partner/Principal Escrow Agreement Kerr County Juvenile Facility EXI3IBIT A -PAYMENT REQUEST FORM PAGE 2 of 2 The undersigned Lessee and Lessor agree that (i) the above statements are, to the best of its Imowledge, true, (ii) the amount of this requisition constitutes a _ final or _ partial acceptance of the Facility; and (iii) that if the final acceptance does not occur prior to 1994 that the unspent construction funds will become the property of the Lessee and that rent will commence pursuant to Article 2 of the Lease-Purchase Agreement. Agreed to this day of . 1994. Kerr County Juvenile Board, Lessee By: ~„~ /~ce.wf Name: Simon J. Harris Title: Chief Juvenile Probation Officer Approved for payment this the day of ,1994. ChiCorp Financial Services, Inc. By: _ Name: Title: Ramona Regas Vice President Agreed to this the day of ,1994. ReCor, Inc., Lessor By: !Y f ~G11/ Name: Title: STATE OF TEXAS § COUNTY OF KERR § NOTICE OF ASSIGNMENT AND REQUEST Recor' Inc., ("Lessor") hereby gives notice to Kerr County Juvenile Board, as agent for Kerr County, Texas ("Lessee") that Lessor has assigned all of its rights to the payments due under the Lease, dated as of March 31, 1994, between Lessor and Lessee (the "Lease") to Chicorp Financial Services, Inc., 208 South Lasalle Street, Chicago, Illinois 60604. Lessor hereby requests, gives notice and instructs Lessee that payments that hereafter come due pursuant to the Lease be paid to Chicorp Financial Services, Inc. 208 South Lasalle Street, Chicago, Illinois 60604 or its Assignee. Lessee hereby aclolowledges that as of April 1, 1994 there will be 180 lease payments of Twentyseven Thousand Nine Hundred Sixtyfive and 49/100 Dollars ($27,965.49) remaining to be paid under the Lease-Purchase Agreement with the fast payment due March 1, 1995 and continuing through the payment due February 1 2010. - DATED this 30th day of March, 1994. ReCor In .(Lessor) . By: Attest: Name: Glen Heclonan Title: President B Corporate Secretary (SEAL) ACKNOWLEDGED AND AGREED this the 30th day of March, 1994. Kerr County Juvenile Board (Lessee) f Name: William G. cy Name: Simon J. Harris Title: Chairman Title: Chief Juvenile Probation Officer LESSEE BILLING AND INVOICING INSTRUCTIONS. LESSEE: PLEASE COMPLBl'E TEAS SECTION OR FURNISH UNDER SEPARATE COVER Billing Address Billing Contact: Federal Tax ID Cantract/Purchase Order/Requaition Number to be included an Fax Number Odor special invoicing rarm 8QJ $~G ~ Informauon Return for Tax-Exempt Governn..-ntal Otrligations (Rev. October 1999) - Under Section 149(<) OMe No. 15x5.0720 Depanmenta/the Treasury -See separate lnztrudfans Fspires 5-31-92 Internal Revenue service (Use Farm 8038-GC if the issue price is under $100,0()0) Reportin Authoti Check hoz if Amended Return - 1 Issuer's name 2 LSSyer's employer identification number Kerr:Cotu,ty Juvenile Board, as agent for ICesr Corm 74-6001494 ' 3 Number and street 4 Report number 624 Jefferson G1994 - 5 City or town, state, and Z1P code 6 Oate of issue Kerrville, T>tiC- 73028 ~i~, yon ierr County Juvenile DeteTltion 9 Check box if obligations are tax or other revenue anticipation bonds - ^ Issae price 10 Check box if obligations are in the form of a (ease or installment sate - 11 ^ Education 12 ^ Health and hospital . . 13 ^ Transportation . 14 ^ Publicsafety . 15 ^ Environment (including sewage bonds) 16 ^ Housing - 17 ^ Utilities _ _ 18 ^ Other, Describe (see Instructions) - fat (s) tcI Stated mdempGan W `agnted C0 Net teresi Maturity date Interest nt< Issue price at matu' avers matud Yu:M cost 19 Final maturity N A l A 96 N A N/A 20 Entire issue . 2, 962, 000.00 id/A 15 ears % 4.663 % 21 Proceeds used for accrued interest - 22 Issue price of entire iuue (enter line 20c) ... i 23 Proceeds used far bond issuance costs (ncluding underwriters' dixount). 23 . N/A 24 Proceeds used for credit enhancement . 24 N A 25 Proceeds allocated to reasonably required reserve or replacementfund 25 N A 26 Proceeds used to refund prior issues. 26 N/A 27 Total (add lines 23, 24, 25, and 26) . ! , ~7aa7 uescription of Refunded Bonds (complete this part only for refunding bonds} 29 Enter the remainingweighfedaveragematurityofthebandstoberefunded - N/A years 30 Enter the last date on which the refunded bonds will be called - - Ig/A 31 Errter fhe datersT the :efr m.+a.i h.,nrl<...o.o :«„era ~ ay /r 32 Enter the amount of the state volume cap allocated to the issue . - - N/A 33 Enter the amount of the bonds designated by the issuer under section 265(bx3xBK)(III) (small $2,962,000.00 issuer exception) - - 34 Pooled financings: t N/A a Enter the amount of the proceeds of this issue that are to be used to make loans fo other governmental units - b Check box if this issue is a loan made from the proceeds of another tax-e~tempf issue - ^ and enter the name of the issuer - ~.,w ir.e w.,.e ....r.e :.....e . urma penames or perjury, 1 OeeWre that 1 love examined this return arM accomparrying schMules and statements, and to the hest at my knowledge and aNief, they are tnx, correct, aM complete. Please ~ /` / Sign ~/; ,/ /~.~.., rinp» Here ,si nature of oH~cer ' fdillla.*ri G. Stacvr 1.11C1ir..wy g Oate Type or pant rume and tide X72 B03rC1 For Paperwork Reduction Acf Notice, see page 1 of the Instructians- roan 8038-G (Rev. 1o-a5 1/IS/90 Pub:ished by Tax Management Inc., a Subsidiary of The Bureau of National Affairs, Ina 8038-G.1 125