ORDER N0.29014 KERR COUNTY JUVENILE FACILITY. Came to be heard this the 27th day of January 2005 with a motion made by Commissioner Williams seconded Commissioner Letz. The Court approved by a vote of 3-1-0 the consent and release agreement with respect to Ken County Juvenile Detention Facility outstanding bonds and authorize the County Judge to sign the agreement upon knowledge that all of the bondholders and trustees have likewise executed. COMMISSIONERS' COURT AGENDA REQUEST PLEASE FURNISH ONE ORIGINAL AND NINE COPIES OF THIS REQUEST AND DOCUMENTS TO BE REVIEWED BY THE COURT. MADE BY: Pat Tinley OFFICE: County Judg MEETING DATE: January 24, 2005 TIME PREFERRED: SUBJECT: Consider and discuss approval of Consent and Release Agreement with respect to Kerr County Juvenile Detention Facility and outstanding bonds on same and authorize County Judge to sign Agreement. EXECUTIVE SESSION REQUESTED: (PLEASE STATE REASON) NAME OF PERSON ADDRESSING THE COURT: County Judge ESTIMATED LENGTH OF PRESENTATION: IF PERSONNEL MATTER -NAME OF EMPLOYEE: Time for submitting this request for Court to assure that the matter is posted in accordance with Title 5, Chapter 551 and 552, Government Code, is as follows: Meeting scheduled for Mondays: 5:00 P.M. previous Tuesday. THIS REQUEST RECEIVED BY: THIS REQUEST RECENED ON: All Agenda Requests will be screened by the County Judge's Office to determine if adequate information has been prepared for the Court's formal consideration and action at time of Court Meetings. Your cooperation will be appreciated and contribute towards you request being addressed at the earliest opportunity. See Agenda Request Rules Adopted by Commissioners' Court. c~~- Kerr County J Court ~~~ ~S i b(1~1',S RECE~VE~ JAN 1 z ~nnr; From: "Tom Spurgeon" D a -----_._ ,_ _ J_ . To: "'Kerr County Judge/Commissioners'-Court"' Cc: "'Hender>on, Robert (RBC Dain)~ ; "Ncei Valdez" ; "Kathy Cooper" ; "Sylvia Ibarra" Sent: Thursday, January 13, 2005 12:07 AM Attach: Consent and Release Ag-1.pdf Subject: Kerr County Juvenile Facility Lease Revenue Bonds -Consent and Release Agreement Judge Tinley: ...b.. ~ .. a ~. Attached is a file containing the initial daft of a Consent and Release Agreement in connection with issuing the COs and releasing all claims that the bondholders may think they have against the County. Before I forward this to Herb Bristow and Mike Malone for their review, I wanted you to have an opportunity to review it and provide any comments you might have. - Please note that the Agreement is stated to be effec(ive on January 24th, which would be the day the Court would meet to approve the Agreement. We will also Deed to have the Issuer and Juvenile Board meet on or before the 24th for a similar approval. As for the Bondholders, 1 am going to ask that Herb attempt to have all Bondholders execute the Agreement by no later than next Friday, January 21st so that we have clearance to proceed with the CO sale the following week. I am a Tittle apprehensive that, with 11 d'rfferent bondholders, we/Herb may have a hard time reigning all of them in to agree to a final document, but presumably comments provided by one holder would be acceptable to the others (except, pefiaps, in connection with the treatment the Reserve Fund distribution). Please also note that, even though he is'not a lawyeri', I have provided a copy to Bob and would welcome any comments he might have. t think I have covered the points that we have discussed as being necessary to be included in this Agreement, but I would welcome Bob's eyes and mind for any comments or suggestions he might have. Finally, atone time I was thinking that we would use money in the Reserve Fund to pay unpaid accrued interest on the Lease Revenue Bonds and the remainder would be used to pay down principal. You will see that I have not provided separately for the payment of accrued interest on the theory that each bondholder will be receiving relatively the same amount, no matter how such payment is designated. ThaYs not exactly true, however, given that the earlier maturities bear interest at a kwver rate than the later maturrtes; therefore, I wouldn't be too surprised to see some of the Bondholders with higher interest rates object to that distribution plan. If so, it will be easy to fix and won't make a difference to the County. if possible, I would like to be able to forwarci this to Herb and Mike on Thursday afternoon. i will be.out of the office but will be able to be reached by cell phone (210-313-6609) and can have Kathy or Sylvia make any changes. Many thanks for your assistance. Cordially yours, Thomas K. Spurgeon McCall, Parkhurst & Horton L.L.P. 700 N. St. Mary's, Suite 1525 San Antonio, Texas 78205 Telephone: (210) 225-2800 Teleoopy: (210) 225-2984 e-mail: tpurgeon@mphleg_al.com ~ ~ ~ ~ ~ - _ -~ o:e. o e 1/13/2005 L ~y L Vl s. Kerr County JudgelCommissioners' Court , From: "Tom Spurgeon" "~ ~ _ To: "'Kerr County Judge/Commissioners' Court"' ~ ~ ' Cc: "'Henderson, Robert (RBC Dain)"' ; "Noel Valdez" ; "Kathy Cooper' ; "Sylvia Ibarra" Sent: Thursday, January 13, 2005 7:06 AM Attach: Consent and Release Ag-2.pdf; Consent and Release Ag-2~cmp1v2.pdf Subject: RE: Kerr County Juvenile Facility Lease Revenue Bonds -Consent and Release Agreement Judge Tinley: 1 made a few clean-up changes to the original version of the Consent and Release Agreement that was sent last night. Please disregard the earlier version and review the attached draft instead: Clean and blacklined copies are attached in case you would like to see what changes were made from the original,version. Many thanks. . Tom . -----Original Message----- ~ ~ ~ . From: Tom Spurgeon Sent: Thursday, January 13, 2005 12:08 AM To: 'Kerr County ]udge/Commissioners' Court' Cc: 'Henderson, Robert (RBC Dain)'; Ncel Valdez; Kathy Cooper; Sylvia Ibarra Subject: Kerr County Juvenile Facility Lease Revenue Bonds -Consent and Release Agreement Judge Tinley: Attached is a file containing the initial draft of a Consent and Release Agreement in connection with issuing the COs and releasing all claims that the bondholders may think they have against the County. Before I forward this to Herb Bristow and Mike Malone for their review, I wanted you to have an opportunity to review it and provide any comments you might have. Please note that the Agreement is stated to be effective on January 24th, which would be the day the Court would meet to approve the Agreement We will also_need to have the Issuer. and Juvenile Board meet on or before the 24th for a similar approval. As for the Bondholders, I am going.to ask that Hertz attempt to ~. have all Bondholders execute the Agreement by nb later than next Friday, January 21st so that we have clearance to proceed with the CO sale the following week. I am a little apprehensive that, with 11 different bondholders, weMerb may have a hard time reigning all of them in to agree to a final document, but presumably comments provided by one holder would be acceptable to the others {except, perhaps, in connection with the treatment the Reserve Fund distribution). Please also note that, even though he is "not a lawyer", I have provided a copy to Bob and would welcome any comments he might have. I think I have covered the points that we have discussed as being necessary to be included in this Agreement, but I woukd welcome Bob's eyes and mind for any comments or suggestions he might have. Finally, at one time I was thinking that we would use money in the Reserve Fund to pay unpaid accrued interest on the Lease Revenue Bonds and the remainder would be used to pay down prinapal. You will see that I have not provided separately for the payment of aaxued interest on the theory that each bondholder will be receiving relatively the same amount, no matter how such payment is designated. That's not exaddy true, however, given that the earner maturities bear interest at a lower rate than the later maturities; therefore, I wouldn't be too surprised to see some of the Bondholders with higher interest rates object to that distribution plan. If so, it will be easy to fix and won't make a difference to the County. 1/13/2005 1 ~y v Vl V If possible, I would like to be able to forward this to Herb anal Mike on Thursday afternoon. I will be out of the office but will be able to be reached by cell phone (210-313609) and can have Kathy or Sylvia make any changes. ~ _ Many thanks for your assistance. Cordially yours, Thomas K. Spurgeon McCall, Parkhurst & Horton L.L.P. 700 N. St. Mary's, Suite 1525 San Antonio, Texas 78205 Telephone: (210) 225-2800 Telecopy: (210) 225-2984 e-mail: tpurgeon@mphlegal.com Please note that, effective December 22, 2003, our suite number chariged to "Suite 1525." 'The information contained in this electronic communication is confidential and may contain information that is legalty privileged and exempt from discbsure under applicable law. The information is intended solely for the use of the individual or entity named above. !f you have received this communication in error, please notify the sender immediately by replying to this message, and then delete k from your system. Thank you. . "'If file(s) attached to this message have the extension "PDF", the files have been saved in Adobe's Portable Document Format (PDF) .The PDF format is designed for "universal document exchange" - it allows documents to maintain their appearance and pagination on any computer or printer. PDF file(s) can be viewed and printed using Adobe's free Acrobat Reader, available at http://www.adobe.corn/prodindex/acrobat/readsteo html 1/13/2005 DeaFT' Dam: JANrttaRY l~3 2005 CONSENT AND RELEASE AGREEMENT This CONSENT AND RELEASE AGREEMENT (this "Agreement") is entered into and effective as of this 24'x day of January, 2005, by and among the HILL COUNTRY JWENILE FACILITY CORPORATION (the "Issuer"), KEItR COUNTY, TEXAS (the "County"), the KEItR COUNTY JWENILE BOARD (the "Juvenile Boazd"); THE BANK OF NEW YORK TRUST COMPANY, N.A. (the "Trustee"), and each of the entities listed on the bondholders signature page attached hereto (collectively, the "Bondholders"). RECITALS WHEREAS, pursuant to state law, the Juvenile Board oaerates a iuvenile detention facility located within the County, which facility is referred to herein as the "Juvenile Facility"; and - ~ , ~ - WHEREAS, on December 17, 2002, the Issuer delivered $5,140,000 in principal amoutlt of. its Lease Revenue Bonds, Series 2002. (Kerr County, Texas Juvenile L)etention Facilities Project) (the "Lease Revenue Bonds") pursuant to that certain Trust Agreement, dated as of November 15, 2002 (the "Indenture"), between the Issuer and the Trustee; and WHEREAS, proceeds of the Bonds were used to refinance the existing Juvenile Facility and construct new improvements to the Juvenile Facility; and WHEREAS, in connection with the issuance of the Lease Revenue Bonds, the County, as lessee, and the Issuer, as lessor, entered into that certain Lease Agreement, dated as ofNovember 15, 2002 (the "Lease"), under which the Issuer leased the 1'mjectJuvenile Facility to the County; and WHEREAS, all capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Lease; and WHEREAS, the County, the Issuer and the Juvenile Board and all officials and employees of the County, the Issuer and the Juvenile Board, past and present, are collectively referred to herein as the "County Participants"; and WHEREAS, the Juvenile Boazd performs certain ofthe County's obligations under the Lease and manages the 1?'rojcctJuvenile Facility on a day-today basis pursuant to that certain Opee~ting Agreement, dated as of November 15, 2002 (the "Operating Agreement"), between the County and the Juvenile Board; and WHEREAS, the Lease Revenue Bonds are secured by (i) the Lease Payments under the Lease, (ii) that certain Deed of Trust and Assignment of Rents and Leases, dated as of November 15, 2002, from the Issuer to the Mortgage Trustee for the benefit ofthe Trustee, and (iii) that certain Security Agreement, dated as of November 15, 2002, between the Trustee and the Issuer; and WHEREAS. on September 7.2004, the Juvenile Board adopted its fiscal year 2004-2005 bud et, which budget nroiected an operating deficit and did not include budgeting or a~nronriating any funds to nay Lease Payments under the Lease, thereby causing an Event of Nonannronriation to occur under the Operating Agreement: and WHEREAS, on September 27, 2004, the County adopted its fiscal year 2004-2005 budget, and in said budget failed to appropriate funds in an amount sufficient to pay Lease Payments under the Lease, thereby causing an Event of Nonappropriation to occur under the Lease; and R'HEREAS, on September 28, 2004, the County notified the Trustee of such Event of Nonappropriation,and ofitsintent totransfer possession and control ofthe 1'roJcctJuvenile Facility to the Issuer or the Trustee as of 12:00 A.M. on October 1, 2.004, in accordance with Section 10.03(c) ofthe Lease; and ;-,~~ WHEREAS, on September 30, 2004, in order to{i) ensure the health, safety and security of the juveniles located at the 1?"rojectJavenile Facility and the citizens of the community, (ii) ensure an appropriate and orderly transition of possession and control ofthe 1?'rojtctJuyenile Facility to the Issuer or the Trustee pursuant to Section 10.03(c) of the Lease, and (iii) maintain the l'rojectJuvenile Facility as a going concern, the Trustee, the County and the Issuer executed a letter agreement placing a moratorium on the transfer of possession and control of the 1'rojcctJuvenile Facili until November 1, 2004 (the "Letter Agreement"),with the Lease and Operating Agreement to remain in effect during such moratorium; and WHEREAS, effective as of November 1, 2004, the parties entered into an agreement (the "Extension Agreement")which (i) extended the moratorium contained in the Letter Agreement, (ii) extended the terms ofthe Lease and the Operating Agreement, and {iii) provided for the payment of the I'rojtzttsJuyenile Facility's operation and maintenance expenses until the earlier of December 31, 2004 (which date may be extended as provided in Section 3.2 thereof), or the date the Extension Agreement is terminated as provided therein; and WHEREAS, on November 22; 2004, the Commissioners Court ofthe County approved an order in which the County offered to take action to proceed with the issuance of certificates of obligation for the purpose of providing ~ 1,750,000 to purchase the Juvenile Facility from the Issuer and provide such amount to the Bondholders, subject to certain conditions including the execution by all Bondholders of a full and complete written release of all claims or potential claims the Bondholders may allege to have against the County, the Issuer and the Juvenile Board and all officials and employees of the County, the Issuer and the Juvenile Board; and -2- WHEREAS, the Commissioners Court placed a deadline of Monday, November 29, 2004,- - - for the Bondholders to respond to the County's offer in order to provide sufficient time for the _ Commissioners Court to consider and possibly take action pursuant to Section 3.2 ofthe Extension - Agreement to extend the termination date ofthe Extension Agreement to January 31, 2005; and WHEREAS, following discussions with some ofthe Bondholders, counsel for the Trustee informed representatives ofthe County on December 1, 2004, that a decision had not been reached by all Bondholders to accept, reject or counter the County's offer and that additional time had been requested to respond to the County's offer; and WHEREAS, the Commissioners Court approved an order on December 1, 2004, authorizing the County Judge to execute a First Amendment to the Extension Agreement (the "First _ Amendment") for the limited purpose of reducing the amount of time (from 30 to 15 days) pursuant to which the County must notify the Trustee of the County's election to extend the 'termination date _ ofthe Extension Agreement for an additional month, and such First Amendment has been executed by the County and the Tnistee and is currently in effect; and. ~. ~ ~ , ,:. - ;,; WHEREAS, on December 8, 2004, representatives of the Bondholders presented a counter proposal to the County's initial offer to purchase the Juvenile Facility for a purchase price of $1,750,000; and WHEREAS, following additional discussions and negotiations with representatives ofthe Bondholders, on December 8, 2004, the Commissioners Court ofthe County approved an order in which the County offered to take action to proceed with the issuance ofcertificates ofobligation for the purpose of providing $1,900,000 to purchase the Juvenile Facility from the Issuer and provide such amount to the Bondholders, subject to certain conditions including the execution by all Bondholders of a full and complete written release of all claims or potential claims the Bondholders may allege to have against the County Participants, which offer was accepted in principle by the representatives ofthe Bondholders; and WHEREAS, the County is in the process of issuing certificates ofobligation in an amount which will provide $1,900,000 to purchase the Juvenile Facility (the "Certificates"), which amount will be immediately transferred to the Trustee for further distribution to the Bondholders; and WHEREAS, as provided in the aforementioned Commissioners Court order approved on December 8, 2004, the issuance and delivery of the Certificates is conditioned upon tkc--all Bondholders providingrof a full and complete written release of all claims or potential claims the Bondholders may allege to have against the County Participants; and WHEREAS, in order to assure the County and the purchasers ofthe Certificates that the Bondholders will fully and completely release all claims or potential claims the Bondholders may allege to have against the County Participants, it is necessary for the parties hereto to execute this Agreement prior to the pricing and sale ofthe Certificates; and -3- WHEREAS, the County, the Issuer, theJuvenile Board and the Bondholders wish to dispose of the entire controversy and dispute between- them relating- to the Lease Revenue l~sBond transaction described in this Agreement, including all claims and causes ofaction ofany kind that currently exist or that may exist in the future that relate "[n any way to the Lease Revenue~Bond transaction described in this Agreement; and WHEREAS, the County, the Issuer, the Juvenile Board and the Bondholders recognize and acknowledge that neither the County, the Issuer nor the Juvenile Board are currently in default under any provision of the Financing Documents, but such parties further recognize and acknowledge that there may be claims or injuries arising out ofthe Lease Revenue Bond transaction described in this Agreement that are currently known by such parties, that may be unknown to such parties at the time of execution of this Agreement, or that may arise~in the future; and the County, the issuer, the Juvenile Board and the Bondholders have negotiated this Agreement in full knowledge of the possibility of currently existing or additional claims or injuries, and intend thisAgreement to settle and fmally dispose of all such claims or injuries arising out ofsuch Lease Revenue Bond transaction described in this Agreement, whether known or un~own; aq_d . WHEREAS, it is further the intent and purpose of this Agreement to provide additional authority and direction to the Trustee with respect to (i) releasing the Indenture and all liens on the Juvenile Facility and all other assets of the County, the Issuer and the Juvenile Boazd which were created to further secure the Lease Revenue Bonds, (ii) distribution to the Bondholders of the $1,900,000 being provided by the County on the date of delivery of the Certificates, and (iii) distribution of all funds on deposit in the Reserve Fund on the date of delivery of the Certificates; and WHEREAS, this Agreement will be-become irrevocable to each party upon its execution thereof, andthat the release being provided by this Agreement, as further described in Section 1 below, shall become effective only upon the delivery to the Bondholders of the funds described in Section 3 of this Agreement; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, ,the parties hereto agree as follows: TERMS OF AGREEMENT SECTION 1. RELEASE OF CLAIMS. In consideration of the mutual promises and agreements contained in this Agreement, including the recitals set forth above, the parties agree as follows: (a) Immediately upon delivery of the Certificates, the County will transfer $1,900,000 of procccdsavailable foods of the Certificates to the Issuer for the purpose of purchasing from the Isser all real and personal property which comprises the Juvenile Facili -4- Immediately upon receipt of such funds from the County, the Issuer will wire transfer $1,900,000 in immediately available funds to the Trustee, which amount shall be immediately deposited into an account established by the Trustee for the benefit of the Bondholders (referred to herein as the "Bondholder Payment Account"). A substantial portion ~of the consideration agreed to be paid in this Agreement to the Bondholders is for the express purpose of disposing of claims or injuries that may arise from the Lease Revenue Bond transaction described in this Agreement, whether known or unknown to the parties as of the date that this Agreement is made. (b) Immediately upon the deposit of the amount described in Section 1(a) hereof into the Bondholder Payment Account, the Bondholders shall be deemed to have fully and completely released the County Participants from any and all claims, known and unknown, arising from the Lease Revenue Bond transaction described in this Agreement. Each Bondholder agrees and understands that this release covers claims and injuries of all types, including claims and injuries that are unknown to the Bondholders at the time this Agreement is made. (c) It is expected that the delivery of the Certificates, and therefore the receipt of the amounrt described in Section 1(a) above, will occur on Monday, February 14, 2005, or such later date as may be determined by the County (referred to herein as the "Certificate Closing Date"). (d) The release being provided by this Agreement is a compromise of doubtful and disputed claims. Nothing in this Agreement is an admission of liability by any party, and nothing in this Agreement maybe interpreted as an admission of liability. Each party to taus Agreement expressly denies liability to every other party to this Agreement. (e) In addition to the release being provided by this Agreement, each Bondholder agrees that, in the event such Bondholder brings a claim or suit against a third party that participated in the Lease Revenue Bond transaction described in this Agreement (i.e., not a County Participant) and such third party is entitled, either by law or valid and enforceable contract, to be indemnified by a County Participant against such claim or suit that arises in connection with such Lease Revenue Bond transaction, such Bondholder agrees to indemnify such County Participant for any costs it may incur in connection with such County Participant's obligation to indemnify such third party. SECTION 2. AUTHORITY TO RELEASE INDENTURE AND ALL LIENS RELATED TO LEASE REVENUE BONDS. It is the intent of the Countys.the Issuer, the Juvenile Board and the Bondholders that, upon delivery of the Certificates and the payment of the sum described in Section 1(a) hereof, the Indenture and all liens created thereunder and under all other Financing Documents to secure the Lease Revenue Bonds shall be immediately released such that thereafter the Lease Revenue Bonds shall no longer be considered Outstanding under the Financing Documents and there shall no longer be any claims by the Bondholders against the County, the Issuer or the Juvenile Boazd for payment of principal and interest on the Lease Revenue Bonds, or any other amount due under the Financing Documents. Therefore, notwithstanding anything in the Financing Documents to the contrary, all parties to this Agreement hereby agree that the Indenture and all other Financing Documents shall be considered to be released and no longer effective immediately upon the delivery to the Trustee by the Issuer of the amount described in Section 1(a) -s- hereof, and thereafter no party to this Agreement shall have the right to enforce any obligation set forth in any Financing Agreement against any party thereto. All parties to this Agreement agree to - cooperate fully with each other to execute any documents deemed necessary to evidence the release - of all Financing Documents. ~ . SECTION 3. DISTRIBUTION OF CERTIFICATE PROCEEDS AND FUNDS ON DEPOSIT IN LEASE REVENUE BOND RESERVE FUND. In addition to the $1,900,000 of Certificate proceeds that will be provided to the Trustee for distribution to the Bondholders as : . described in Section 1(a) above, there is expected to be on deposit on the Certificate Closing Date approximately $412,000 in the Reserve Fund established under the Indenture. It is the intention of the Bondholders that each Bondholder shares on a pro rata basis all funds provided; fip-from Certificate proceeds and funds on deposit in the Reserve Fund. Therefore, on the Certificate Closing Date, the Bondholders hereby direct and instruct the Trustee to distribute to each Bondholder its pro rata share of such amounts as more fully described in Exhibit A attached hereto. Each Bondholder is responsible to notify the Trustee in writing of wiring or other delivery instructions regarding ' where such distributions shall be made: SECTION 4. AGREEMENT TO HOLD LEASE REVENUE BONDS UNTIL CERTIFICATE CLOSING DATE. (a) Each Bondholder represents to all other parties to this Agreement that it is the current owner of the respective maturities and' principal amounts of the Lease Revenue Bonds as shown in the second column of Exhibit A attached to this Agreement. Each Bondholder further represents to all other parties to this Agreement that this Agreement has been executed on behalf of such Bondholder by a duly authorized officer or representative of such Bondholder with sufficient authority to bind such Bondholder in accordance with the terms of this Agreement. (b) Each Bondholder hereby agrees not to sell, transfer or otherwise dispose of any of the Lease Revenue Bonds owned by it prior to February 28, 2005, except as contemplated by this Agreement, in order to provide assurance to the County that the Bondholders will be the owners of all of the Lease Revenue Bonds on the Certificate Closing Date. Each Bondholder further agrees to tender all of the Lease Revenue Bonds owned by it to the Trustee on or before the Certificate Closing Date for the purpose of canceling such Lease Revenue Bonds immediately upon delivery of the Certificates and payment of the amount due to each Bondholder in accordance with Section 3 of this Agreement. - {c) Each Bondholder acknowledges that the Lease Revenue Bonds are held in a book-entry system established by the Depository Trust Company ("DTC") and that the Bondholder does not have physical possession of the Lease Revenue Bonds to tender to the Trustee as described in the preceding paragraph. Each Bondholder hereby agrees to execute and deliver on or before the Certificate Closing Date any documentation reasonably required by the Trustee, DTC or a DTC participant to evidence delivery of the Lease Revenue Bonds owned by such Bondholder for tender and cancellation on the Certificate Closing Date. -6- SECTION 5. IRREVOCABLE AGREEMENT. All parties to.this Agreement acknowledge and agree that this Agreement shall become•binding on each respective party immediately upon execution thereof by such party and that this Agreement shall be and remain irrevocable by any party from and after the effective date of this Agreement. ~ • SECTION G. GOVERNING LAW. This Agreement is made according to the laws of the State of Texas. The parties expressly agree that this Agreement is governed by, and will be construed and enforced in accordance with} Texas law. SECTION 7. BINDING EFFECT. This Agreement is binding on and inures to the benefit of the parties and their respective heirs, representatives, successors, and assigns. SECTION 8. ENTIRE AGREEMENT. This Agreement contains the entire agreement between the parties. It supersedes any and all prior agreements, arrangements, or understandings between the parties on all subjects in any way related to the transaction or occurrence described in this Agreement. No oral understandings, statements, promises, or inducements contrarX to or consistent with the terms of this Agreement exist. This Agreement is not subject t0 any modification, waiver, or addition that is made orally... This•Agreement is subject to modification, waiver, or addition only by means of a writing signed by all parties. • • SECTION 9. COUNTERPARTS. This Agreement may be executed in any number of identical counterparts, each of which wilt be deemed an original for all purposes. [The remainder of this page intentionally left blank) -~- IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the day and year first above written. KERB COUNTY; TEXAS - ' - (the "County") - - _ By: County Judge, Ken County, Texas ATTEST: County Clerk, Kerr County, Texas .,- „• HII.L COUNTRY JUVENILE - FACILITY CORPORATION - ' - (the "Issuer") ~ . By: President, Board of Directors ATTEST: - _• Secretary, Board of Directors ATTEST: Secretary, Kerr County Juvenile Board ATTEST: Title: KERR COUNTY JUVENILE BOARD (the "Juvenile Board") By: Chairman, Kerr County Juvenile Board THE BANK OF NEW YORK TRUST COMPANY, N.A. (the "Trustee' By: Title: [SIGNATURE PAGE OF COUNTY, ISSUER, JUVENII,E BOARD AND TRUSTEE TO CONSENT AND RELEASE AGREEMENT] THE BONDHOLDERS _ ~ ;~, FIRST STATE BANK OF STRATFORD INDUSTRY STATE BANK - By: By: Title: Title• CITY NATIONAL BANK, WESLACO SECURITY STATE BANK By: By; Title: ~ Title• ' ~ ~ a FIRST NATIONAL BANK OF BRYAN. ROBERT L. MOObY~ , - By: ~ By: Title: Title• FIRST NATIONAL BANK LIVINGSTON CTTIBANK, N.A. By: By: Title: Title: THE BANK & TRUST KENTUCKY FARMERS BANK By: By: Title: Title: CITIZENS STATE BANK ay: Title: [SIGNATURE PAGE OF THE BONDHOLDERS TO CONSENT AND RELEASE AGREEMENT] E1~HIBIT A SCHEDULE FOR PRO RATA DISTRIBUTION OF FUNDS TO BONDHOLDERS _ As provided in Section 3 of the Agteement~ the Trustee shall distribute all Certificate.. proceeds it receives from the Issuer, toget}-er with all funds on deposit in the Reserve Fund established by the Indenture, in the respective percentage to each Bondholder Listed in the far right- hand column below: NAME, ADDRESS AND CONTACT 1VIATIJRTTIES AND PERCENT OF INFORMATION PRINCIPAL AMOUNT OF TOTAL HELD BY OF BONDHOLDER BONDS OWNED ` ' BONDHOL~ER_- First State Bank of Stratford 281-488-6133 2005 - $170,000 10.5528%.. Attn: M. Brent Futrell, Senior VP ~ 2006 - $1752000,. ~ I P.O. Box 48 ~ 2007 - $180,000. , Galveston, Texas 77550-1981 City National Bank, Weslaco 956-968-I511~ 2008 - $160,000 ~ 6.5327% Attn: fob Dyer, President 95b-9b8-0257 (fax) 2009 ~ $165,000 401 S. Kansas Weslaco, TX 78596 robertdCa~.cnbweslaco.com First National Bank of Bryan 979-779-1111 2008 - $30,000 1.2060% Attn: Jene Tebeaux, Exec.'Q'P9-823-2885 (fax) 2009 - $30,000 2807 S. Texas Avenue Bryan Texas 77802 wtebeauxnn,bloombere.net First National Bank Liviagston936-327-1234 2010 - $205,000 9.6482% Attn: John Slocomb, President 936-328-5427 2016 - $275,000 308 W. Church Street Livingston, Texas 77351 islocomb(a.fnblivingston.com The Bank & Trust 830-734-2930 2011 - $215,000 13.Sb93% Attn: Sid Cauthorn 830-774-2555 2012 - $225,000 _ 1200 Veteran's Blvd. $30-768-2020 (fax) 2014 - $250,000 Del Rio, Texas 78841-4010 scauthornCc~thebankandtrust.com Citizens State Bank 979-357-4437 2013 - $240,000 4.8241% Attn: Jim Linderman, CEO 1330 W. Commeroe St. Buffalo, Texas 75831 Industry State Bank 979-357-4437 2015 - $260,040 5.2261% Attn: Jim Linderman, CEO P.O. Box 66 Industry, Texas 78944 NAME, ADDRESS AND CONTACT' ° ` - M11'1'[JRIT'IF.S ~1ND w= :~- PERCENTOF , . INFORMATION _ _ .. PRINCIQ'~I. A14IOY)NT bF• ' : ~TOTAIL HELD BY OF BONDHOLDER ~ _ BONDS OWNED "`~ ~ BONDHOLDER Security State Bank 830-334-3606 2017 - $290,000 11:9598% • Attn: Larry Neat 2018 - $305,000 Drawer S 1000 N. Oak Street Pearsall, Texas 78061 _ Robert L. Moody 281-488-6133 2023 - $320,000 6.4322% 3202 Postofice St., Suite 702 Galveston, Texas 77550-1981 Citibank, N.A. 212-559-1159 2023 -$480,000 9.6482% Attn: George W. Benoit 399 Park Avenue, 4'" Floor - New York, New York 10022 - _ - _ Kentucky Farmers Bank (606)929-5000 2023 - $1,004,000- ~ - 20:1005% ~- Attn: Joe Allen (606) 928-3690 (fax) 6313 US Rt. 60 - Ashland, KY 4 1 1 02-8640 _ ~ • iallen(c~kentuckyfarmersbank.com with copy to -- Charles Russell (321) 409-9496 639 Alamanda Court Indialantic, Florida 32903-4501 crussell c(r~.kentuckyfarmersbank.com Totals _ ~. _ ~~ ,.~ :;'S4??~~000 ~ _ ~~..,-99999'/0 -_ DxntT DA'[E: 7~rttr~-rtv 13.2005 CONSENT AND RELEASE AGREEMENT This CONSENT AND RELEASE AGREEMENT (this "Agreement") is entered into and effective as of this 24T" day of January, 2005, by and among the Hn.L COUNTRY JUVENn,E FACILrrY CORPORATION (the "Issuer"), KERR COUNTY, TEXAS (the "County"), the KERB COUNTY JUVENILE BOARD (the "Juvenile Board"), THE BANK OF NEW YORK TRUST COMPANY, N.A. (the "Trustee"), and each of the entities listed on the bondholders signature page attached hereto (collectively, the "Bondholders"). RECITALS WHEREAS, pursuant to state law, the Juvenile Board operates a juvenile detention facility located within the County, which facility is referred to herein as the "Juvenile Facility' ;and WHEREAS, on December 17, 2002, the Issuer delivered 55,140,000 in principal amount of its Lease Revenue Bonds, Series .2002 (Kerr County, Texas Juvenile Detention Facilities Project) (the "Lease Revenue Bonds") pursuant to that certain Trust Agreement, dated as of I~lovemlier 15, 2002 (the "Indenture"), between the Issuer and the Trustee; and WHEREAS, proceeds ofthe Bonds were used to refinance the existing Juvenile Facility and construct new improvements to the Juvenile Facility; and WHEREAS, in connection with the issuance of the Lease Revenue Bonds, the County, as lessee, and the Issuer, as lessor, entered into that certain Lease Agreement, dated as of November 1 S, 2002 (the "Lease"), under which the Issuer leased the Juvenile Facility to the County; and WHEREAS, all capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Lease; and WHEREAS, the County, the Issuer and the Juvenile Board and all officials and employees of the County, the Issuer and the Juvenile Board, past and present, are collectively referred to herein as the "County Participants"; and WHEREAS, the Juvenile Board perfonms certain ofthe County's obligations under the Lease and manages the Juvenile Facility on a day-today basis pursuant to that certain Operating Agreement, dated as ofNovember 15, 2002 (the "Operating Agreement"), between the County and the Juvenile Board; and WHEREAS, the Lease Revenue Bonds are secured by (i) the Lease Payments under the Lease, (ii) that certain Deed of Trust and Assignment of Rents and Leases, dated as of November 15, 2002, from the Issuer to the Mortgage Trustee for the benefit of the Trustee, and (iii) that certain Security Agreement, dated as of November 1 S, 20(12, between the Trustee and file Issuer, and WHEREAS, on September 7, 2004, the Juvenile Board adopted its.fiscal year 2004-2005 budget, which budget projected an operating deficit and did not include budgeting or appropriating any funds to pay Lease Payments under the Lease, thereby causing-an Event_of Nonappropriation to occur under the Operating Agreement; and WHEREAS, on September 27, 2004, the County adopted its fiscal year 20042005 budget, and in said budget failed to appropriate funds in an amount sufficient to pay Lease Payments under the Lease, thereby causing an Event of Nonappropriation to occur under the Lease; and WHEREAS, on September 28, 2004, the County notified the Trustee of such Event of Nonappropriation, and of its intent to transfer possession and control of the Juvenile Facility to the _ Issuer or the Trustee as of 12:00 A.M. on October 1, 2004, in accordance with Section 10.03(c) of the Lease; and WHEREAS, on September 30, 2004, in order.tb (i) enisure the health, safety and security of the juveniles located at the Juvenile facility-and the citizens of the community, ~(ii) ensure -an appropriate and orderly transition of possession and control of the Juvenile Facility to the Issuer or the Trustee pursuant to Section 10.03(c) of the Lease, and (iii) maintain the Juvenile Facility as a going concern, the Trustee, the County and the Issuer executed a letter agreement placing a moratorium on the transfer of possession and control ofthe Juvenile Facility until November 1, 2004 (the "Letter Agreement"), with the Lease and Operating Agreement to remain in effect during such moratorium; and WHEREAS, effective as of November 1, 2004, the parties entered into an agreement (the "Extension Agreement") which (i) extended the moratorium contained in the Letter Agreement, (ii) extended the terms of the Lease and the Operating Agreement, and (iii) provided for the payment of the Juvenile Facility's operation and maintenance expenses until the earlier of December 3 1, 2004 (which date may be extended as provided in Section 3.2 thereof), or the date the Extension Agreement is terminated as provided therein; and WHEREAS, on November 22, 2004, the Commissioners Court of the County approved an order in which the County offered to take action to proceed with the issuance of certificates of obligation for the purpose of providing $1,754,000 to purchase the Juvenile Facility from the Issuer and provide such amount to the Bondholders, subject to certain,conditions including the execution by all Bondholders of a full and complete written release of all claims or potential claims the Bondholders may allege to have against the County, the Issuer and the Juvenile Board and all officials and employees of the County, the Issuer and the Juvenile Board; and WHEREAS, the Commissioners Court placed a deadline of Monday, November 29, 2004, for the Bondholders to respond to the County's offer in order to provide sufficient time for the Commissioners Court to consider and possibly take action pursuant to Section 3.2 of the Extension Agreement to extend the termination date of the Extension Agreement to January 31, 2005; and -2- WHEREAS, following discussions with some of the Bondholders, counsel for the Trustee informed representatives ofthe County on December 1, 2004, that a decision'had not-been reached by all Bondholders to accept, reject or~counter the C_ ounty's offer and that additional time had been. requested to respond to the County's offer; and WHEREAS, the Commissioners Court approved an order on December 1, 2004, authorizing the County Judge to execute a First Amendment to the Extension Agreement {the "First Amendment") for the limited purpose of reducing the amount of time (from'30 to 15 days) pursuant to which the County must notify the Trustee ofthe County's election to extend the termination date ofthe Extension Agreement for an additional month, and such First Amendment has been executed by the County and the Trustee and is currently in effect; and. WHEREAS, on December 8, 2004, representatives of the Bondholders presented a counter proposal to the County's. initial offer to purchase the Juvenile Facility for a purchase price of $1,750,000; and _ ' WHEREAS, following additional discussions and negbtiatiohs with representatives ofthe Bondholders, on December 8, 2004, the Commissioners Court ofthe County. approved an order in which the County offered to take action to proceed with the issuance of certificates of obligation for the purpose of providing $1,900,000 to purchase the Juvenile Facility from, the Issuer and provide such amount to the Bondholders, subject to certain conditions including ,the Execution ~y all Bondholders ofa full and complete written release of all claims or potential claims the Bondholders may allege to have against the County Participants, which offer was accepted in principle by the representatives ofthe Bondholders; and WHEREAS, the County is in the process of issuing certificates of obligation in an amount which will provide $1,900,000 to purchase the Juvenile Facility (the "Certificates"), which amount will be immediately transferred to the Trustee for further distribution to the Bondholders; and WHEREAS, as provided in the aforementioned Commissioners Court order approved on December S, 2004, the issuance and delivery of the Certificates is conditioned upon all Bondholders providing a full and complete written release of all claims or potential claims the Bondholders may allege to have against the County Participants; and . ~.- WHEREAS, in order to assure the County and the purchasers of the Certificates that the Bondholders will fully and completely release all claims or potential claims the Bondholders may allege to have against the County Participants, it is necessary for the parties hereto to execute this Agreement prior to the pricing and sale ofthe Certificates; and WHEREAS, the County, the issuer, the Juvenile Board and the Bondholders wish to dispose ofthe entire controversy and dispute between them relating to the Lease Revenue Bond transaction described in this Agreement, including all claims and causes of action of any kind that currently exist or that may exist in the future that relate in any way to the Lease Revenue Bond transaction described in this Agreement; and -3- WHEREAS, the County, the Issuer, the Juvenile Board and the Bondholders recognize and acknowledge that neither the County, the Issuer nor the Juvenile Board are currently in default under any provision ofthe Financing Documents, but such parties further recognize and acknowledge that there may be claims or injuries arising out of the Lease Revenue Bond transaction described in this Agreement that are currently known by such parties,that may be unknown to such parties at the time of execution of this Agreement, or that may arise in the future, and the County, the Issuer, the Juvenile Board and the Bondholders have negotiated this Agreement in full knowledge of the possibility of currently existing or additional claims or injuries, and intend this Agreement to settte and finally dispose of ail such claims or injuries arising out of such Lease Revenue Bond transaction described in this Agreement, whether known or unknown; and WHEREAS, it is further the intent and purpose of this Agreement to provide additional authority and direction to the Trustee with respect to (i) releasing-the Lndenture and all liens on the Juvenile Facility and all other assets of the County, the Issuer and the Juvenile Boazd which were created to further secure the Lease Revenue Bonds, (ii) distribution to the. BondhoIder~ of the -- $1,900,000 being provided by the County on the date of delivery of the Certifcates, and (iii) - distribution of all funds on deposit in the Reserve Fund on the date of delivery of the Certificates; and ~ ~ . _ - WHEREAS, this Agreement will become irrevocable to each party upon its execution thereof, and the release being provided by this Agreement, as further described in Section 1 below, shall become effective only upon the delivery to the Bondholders of the funds described in Section 3 of this Agreement; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which aze hereby acknowledged, the parties hereto agree as follows: TERMS OF AGREEMENT SECTION 1. RELEASE OF CLAIMS. )n consideration of the mutual promises and agreements contained in this Agreement, including the recitals set forth above, the parties agree as follows: (a) Immediately upon delivery of the Certificates, the County will transfer $1,900,000 available funds of the Certificates to the Issuer for the purpose of purchasing from the Isser all real and personal property which comprises the Juvenile Facility. Immediately upon receipt of such funds from the County, the Issuer will wire transfer $1,900,000 in immediately available funds to the Trustee, which amount shall be immediately deposited into an account established by the Trustee for the benefit of the Bondholders (referred to herein as the "Bondholder Payment Account"). A substantial portion of the consideration agreed to be paid in this Agreement to the Bondholders is for the express purpose of disposing of claims or injuries that may arise from the Lease Revenue Bond transaction described in this Agreement, whether known or unknown to the parties as of the date that this Agreement is made. -a- (b) Immediately upon the deposit of the amount described in Section 1(a) hereof into the Bondholder Payment Account, the Bondholders shall be deemed to have fully and completely released the County Participants from any and all claims, known and unknown, arising from the Lease Revenue Bond transaction described, in this Agreement. Each Bondholder agrees and understands that this release covers claims and injuries of all types, including claims and injuries that are unknown to the Bondholders at the time this Agreement is made. (c) It is expected that the delivery of the Certificates, and therefore the receipt of the amount described in Section 1(a) above, will occur on Monday, February 14, 2005, or such later date as may be determined by the County (referred to herein as the "Certificate Closing Date"). (d) The release being provided by this Agreement is a compromise of doubtful and disputed claims. Nothing in this Agreement is an admission of liability by any party, and nothing in this Agreement may be interpreted as an admission of liability. Each party to this Agreement expressly denies liability to every other party to this Agreement. (e) In addition to the release being provided by this Agreement, each Bondholder agrees that, in the event such Bondholder brings a claim or suit against a third party that participated in the Lease Revenue Bond transaction described in this Agreement (i.e., not a County Participant) and such third party is entitled, either by law or valid and enforceable contract, to be indemnified by a County Participant against such claim or suit that arises in connection with such Lease Revenue Bond ; transaction, such Bondholder agrees to indemnify such County Participant for any costs it may incur in connection with such County Participant's obligation to indemnify such third party. SECTION 2. AUTHORITY TO RELEASE INDENTURE AND ALL LIENS RELATED TO LEASE REVENUE BONDS. It is the intent of the County, the Issuer, the Juvenile Board and the Bondholders that, upon delivery of the Certificates and the payment of the sum described in Section 1(a) hereof, the Indenture and all liens created thereunder and under all other Financing Documents to secure the Lease Revenue Bonds shall be immediately released such that thereafter the Lease Revenue Bonds shall no longer be considered Outstanding under the Financing Documents and there shall no longer be any claims by the Bondholders against the County, the Issuer or the Juvenile Board for payment of principal and interest on the Lease Revenue Bonds, or any other amount due under the Financing Documents. Therefore, notwithstanding anything in the Financing Documents to the contrary; all parties to this Agreement hereby agree that the Indenture and all other Financing Documents shall be considered to be released and no longer effective immediately upon the delivery to the Trustee by the Issuer of the amount described in Section 1(a) hereof, and thereafter no party to this Agreement shall have the right to enforce any obligation set forth in any Financing Agreement against any party thereto. All parties to this Agreement agree to cooperate fully with each other to execute any documents deemed necessary to evidence the release of all Financing Documents. SECTION 3. DISTRIBUTION OF CERTIFICATE PROCEEDS AND FUNDS ON DEPOSIT IN LEASE REVENUE BOND RESERVE FUND. In addition to the x1,400,000 of Certificate proceeds that will be provided to the Trustee for distribution to the Bondholders as -5- described in Section 1(a} above, there is expected to be on deposit on the Certificate Closing bate, approximately $412,000 in the Reserve Fund established under the IndeTMture. It is the intention'of the Bondholders that each Bondholder shares on a pro rata basis all funds provided from Certificate • proceeds and funds on deposit in the Reserve Fund. There#ore, on the Certificate Closing Date; the ' ' ` Bondholders hereby direct and instruct the Trustee to distribute to each Bondholder its pro rata share of such amounts as more fully described in Exhibit A attached hereto. Each Bondholder is responsible to notify the Trustee in writing of wiring or other delivery instructions regarding where such distributions shall be made. SECTION 4. AGREEMENT TO HOLD LEASE REVENUE BONDS UNTIL CERTIFICATE CLOSING DATE. (a) Each Bondholder represents to all other parties to this Agreement that it is the current owner of the respective maturities and principal amounts of the. _ Lease Revenue Bonds as shown in the second column of Exhibit A attached to this Agreement. Each Bondholder further represents to all other parties to `this Agreement that this Agreement has been executed on behalf of such Bondholder by a duly authorized officer or representative of such. Bondholder with sufficient authority to bind such Bondholder in accordance with the terms of this ~ .. - . _ Agreement. (b} Each Bondholder hereby agrees not to sell, transfer or otherwise dispose of any of the Lease Revenue Bonds owned by' it prior to February 28, 2005, except as contemplated by this Agreement, in order to provide assurance to the County that the Bondholders will be the owners of all of the Lease Revenue Bonds on the Certificate Closing Date. Each Bondholder further agrees to tender all of the Lease Revenue Bonds owned by it to the Trustee on or before the Certificate Closing Date for the purpose of canceling such Lease Revenue Bonds immediately upon delivery of the Certificates and payment of the amount due to each Bondholder in accordance with Section 3 of this Agreement. (c) Each Bondholder acknowledges that the Lease Revenue Bonds are held in a book-entry system established by the Depository Trust Company ("DTC") and that the Bondholder does not have physical possession of the Lease Revenue Bonds to tender to the Trustee as described in the preceding paragraph. Each Bondholder hereby agrees to execute and deliver on or before the Certificate Closing Date any documentation reasonably required by the Trustee, DTC or a DTC participant to evidence delivery of the Lease Revenue Bonds owned by such Bondholder for.tender and cancellation on the Certificate Closing Date. ~ ~ •. SECTION S. IRREVOCABLE AGREEMENT. All parties to this Agreement acknowledge and agree that this Agreement shall become binding on each respective party immediately upon execution thereof by such party and that this Agreement shall be and remain irrevocable by any party from and after the effective date of this Agreement. SECTION G. GOVERNING LAW. This Agreement is made according to the laws of the State of Texas. The parties expressly agree that this Agreement is governed by, and will be construed and enforced in accordance with, Texas law. -6- SECTION 7. BINDING EFFECT. This Agreement is binding-on and inures to the benefit of the parties and their respective heirs, representatives, successors, and assigns. SECTION S. ENTIRE AGREEMENT. This Agreement contains the entire agreement between the parties. It supersedes any and all prior agreements, arrangements, or understandings between the parties on all subjects in any way related to the transaction or occurrence described in this Agreement. No oral understandings, statements, promises, or inducements contrary to or consistent with the terms of this Agreement exist. This Agreement is not subject to any modification, waiver, or addition that is made orally. This Agreement is subject to modification, waiver, or addition only by means of a writing signed by all parties. SECTION 9. COUNTERPARTS. This Agreement may be' executed in any number of identical counterparts, each of which will be deemed an original for all purposes. ~ " [The remainder of this page intentionally left blank) -7- IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective • : _ as of the day and year first above written. - . KERB COUNTY, TEXAS - , (thy :"County") By: County Judge, Kerr County, Texas ATTEST: County Clerk, Kerr County, Texas HILL COUNTRY JUVENILE `~~ .FACILITY CORPORATION ' (the "Issuer") By: President, Board of Directors ATTEST: Secretary, Board of Directors KERB COUNTY JUVENILE BOARD (the "Juvenile Board") By: Chairman, Kerr County Juvenile Board ATTEST: Secretary, Kerr County Juvenile Board - - • THE BANKOFNEW YORKTRUST COMPANY,N.A. (the "Trustee' By: Title: ATTEST: Title: [SIGNATURE PAGE OF COUNTY, ISSUER, JUVENII.E BOARD AND TRUSTEE TO CONSENT AND RELEASE AGREEI~NT] THE BONDHOLDERS : ~ FIRST STATE BANK OF 5TRATFORD -INDUSTRY STATE BANK sy: sy: Title: Title: CITY NATIONAL BANK, WESLACO SECURITY STATE BANK By: ~ By: Title: Title• FIRST NATIONAL BANK OF BRYAN ROBERT L. MOODY - By: ~ By: Title: Title: ~ - FIRST NATIONAL BANK LIVINGSTON CITIBANK, N.A. By: By: Title: Title: THE BANK & TRUST KENTUCKY FARMERS BANK By: - ~- By: Title: . - Title: CITIZENS STATE BANK By: Title: [SIGNATURE PAGE OF 'THE BONDHOLDERS TO CONSENT AND RELEASE AGREEMENT] _ ~ EXi$IBIT A SCHEDULE FOR PRO RATA DISTRIBUTION OF FUNDS TO BONDHOLDERS As provided in Section 3 of the. Agre~ment, the- Trustee~¢hall distribute all Certificate proceeds it receives from the Issuer, togethei with all funds' on deposit in the Reserve Fund established by the Indenture, in the respective percentage to each Bondholder listed in the farright- hand column below: NAMES ADDRESS AND CONTACT - MATURtfIES AND PERCENT OF INFORMATION PRINCIPAL AMOUNT OF TOTAL HELD BY OF BONDHOLDER BONDS OWNED- ~ '' "' BONDHOLDER First State Bank of Stratford 281-488-6133 2005 - $170,000 10.5528%0 Attn: M. Brent Futrell, Senior VP ~ 2006- $175, 000 . P.O. Box 48 _ ~ ~r 2007 -~~1.80,000; ;: ~ ~ ~ . Galveston, Texas 77ss0-1981 ..... ._ :.. .. City National Bank, Weslaco 956-968-1511 + 2008- $160,000 • ` 6.5327% ; Attn: Bob Dyer, President 956-968-0257 (fax) ~ 2009 - $65,000 401 S. Kansas - Weslaco, TX 78596 robertd(a~cnbweslaco.com First National Bank of Bryan 979-779-1111 2008 - $30,000 1.2060% Attn: Jene Tebeaux, Exec. 9'P9-823-2885 (fax) 2009 - $30,000 2807 S. Texas Avenue Bryan Texas 77802 wtebeaux(a~bloombers.net First National Bank Livingston936-327-1234 2010 - $205,000 9.6482% Attn: John Slocomb, President 936-328-5427 2016 - $275,000 308 W. Church Street Livingston, Texas 77351 ilocomb~a fnblivinQSton.com The Baak & Trust 830-734-2930 2011 - $215,000 13.8693% Attn: Sid Cawthorn 830-774-2555 , 2012 - $225,000 . - 1200 Veteran's Blvd. 830-768-2020 (fax) 2414 - $250,000 Del Rio, Texas 78841-4010 scauthornnthebankandtrust.com Citizens State Bank 979-357-4437 2013 - $240,000 4.8241 Attn: Jim Lindena~an, CEO 1330 W. Commerce St. Buffalo, Texas 75831 Industry State Bank 979-357-4437 2015 - $260,000 5.2261°/n Attn: Jim Linderman, CEO P.O. Box 66 Industry, Texas 78944 NAME, ADDRESS AND CONT_ ACT ~ MATURITIES AND .~ PE1tCENT OF INFORMATION .PRINCIPAL AMOUNT OF TOTAL HELD BY OF BONDHOLDER ~. BONDS OWNED ~ °~ BONDHOLDER Security State Bank 830-334--3606 2017 - $290,000 11.9598% Attn: Larry Neal 2018 - $305,000 Drawer S 1000 N. Oak Street Pearsall, Texas 78061 Robert L. Moody 281-488-6133 2023 - $320,000 6.4322% 3202 Postofice St., Suite 702 Galveston, Texas 77550-1981 Citibank, N.A. 212-559-1159 2023 - $480,000 9.6482% Attn: George W. Benoit 399 Park Avenue, 4'~ Floor New York, New York 10022 Kentucky Farmers Bank (606) 929-5000 2023 - $1,000,000 20.1005% Attn: Joe Allen (606) 928-3690 (fax) 6313 US Rt. b0 Ashland, KY 4 1 1 02-8640 jallenla~kentuckvfarmersbank.com with copYto Charles Russell (321) 409-9496 639 Alamanda Court Indialantic, Florida 32903-4501 crussell c(~.kentuckyfarmersbank.com -~ Totals -. , . , _ , - _ ~ ::~ . , _- `.~" -,~ X4,975,000 ~ ~I999'/0