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EDC 09-30-1997 ,~ ... . ," :J ".. i. ;.0, ~ J t :~ t ., . ARTIm.F.R OF INCORPORATION Ql CITY OF SCHERTZ ' ECONOMIC DEVEl.oPMF.NT CORPORATION THE STATE OF TEXAS COUNTIES OF BEXAR, COMAL AND GUADALUPE CITY OF SCHERTZ ECONOMIC DEVELOPMENT CORPORATION f ~ ~ f ~ f f WE, THE UNDERSIGNED natural persons, not less than three in number, each of whom is at least 18 years of age, and each. of whom is a qualified elector of the City of Schertz, Texas (which is a duly established home rule municipality under the. Texas Constitution and the City's Home Rule Charter), acting as incorporators of a public instrumentality and nonprofit development corporation (the "Corporation") under the ''Development Corporation Act of 1979", as amended, with the approval of the City Council (the "Council") of the City of Schertz, Texas (the "City") as evidenced by the Ordinance attached as Attachment "A" and made a part of these Articles for all purposes, do hereby adopt the following Articles of Incorporation for the Corporation: ARTICLE ONE NAME The name of the Corporation is the "City of SchertZ Economic Development Corporation." ARTICLE TWO AUTHORIZATION \ The Corporation is a nonprofit corporation. and is an industrial development corporation under the Development Corporation Act of 1979, Texas Revised Civil- 031UOl .. ! . . .... \.. '.... . (. .: Statutes Annotated Article 5190.6, as amended (the "Act"), and shall be governed by Section 4B of said Act, as now existing or as may be amended and an election held in the. City on August 9, 1997. ARTICLE THREE DURATION Subject to the provisions of Article. Fourteen hereof, the period of duration of the Corporation is perpetual ARTICLE FOUR PURPOSE Al1IDilllGM:tIONS (a) The Corporation is organized exclusively for the purposes of benefiting and accomplishing public purposes of, and to act on behalf of, the City, and the specific purposes for which the Corporation is organized, and it may issue bonds, notes, and other forms of debt instruments, and it may aequire, maintain, lease, and sell property, and interests therein.. on behalf of the 9ity as authorized by Section 4B of the Act to . promote economic development with the City and the State of Texas in order to eliminate unemployment and under employment and to promote and enco~ employment and the public welfare of, for, and on behalf of the City. The Corporation may finance and undertake any such project, subject to the regulations and limitations set forth in Section 4B of the Act and an election held in the City on August 9, 1997. The Corporation is authorized to issue bonds as permitted by the Act, provided, however, no bonds may be issued by the Corporation and no project may be financed with bond proceeds or other revenues of the Corporation unless such bonds or projects are first approved by the Council. The Corporat,ion is a constituted authority and a public instrumentality within the meaning of the Act, the regulations, the United States Treasury Department, the rulings of the Internal Revenue Service prescribed and promulgated pursuant to Secti~ns 103 and 141 of the Internal Revenue Code of 1986, 0ll11101 -2- r 'I. f' , ~. 'I.. . as amended, and the COrporation is authorized to act on behalf of the City as provided in the Act and these Articles of Incorporation. (b) . In the fulfillment of its corporate purpose, the Corporation shall have and may exel'4;ise the powers deacribed in paragraph (a) of this Article, together with all of the other powers granted to the corporations that are incorporated under the Act and that. are governed by Section 4B thereof, and to the extent not in conflict with the Act, the Corporation shall additionally have and may exercise all of the rights, powers, privileges, authorities, and functions given by the general laws of the State of Texas to nonprofit corporations Under the Texas Non-Pr~fit Corporation Act, as amended, Texas Revised Civil Statutes Annotated Article 1396-101, m;~. (c) The Corporation shall have the purposes and powers permitted by the Ailt pursuant to the authority granted in Article Ill, Section 52-a of the Texas Constitution, but the Corporation does not have, and shall not exercise the powers uf sovereignty of the City, including the power to tax (except for the power to receive and use the sales and use taxes specified in Section 4B of the Act) and the police power, except tha~ the Corporation shall have and may exercise the power of eminent domain when the exercise thereof is approved by the Council and to the extent allowed by the City Charter. However, for the purposes of the Texas Tort Claims Act~ as amended (Subchapter A, Chapter 101, Texas Ci~ Practice and Remedies Code), the Corporation is a governmental unit and its actions are government8I functions. (d) No bonds, notes or other debt instruments or other obligations, contracts, or agreements of the Corporation are. or shall ever be deemed to be or constitute the contracts, agreements, bonds, notes, or other debt instruments or other obligations or the lending of credit, or a grant of the public money or things of value, o~ belonging to, or by the State of Texas, the City, or any other political corporation, subdivision or Gal1JOl -3- agency of the State of Texas, or a pledge of the faith and credit of 8Dy. of them. Any and all of such contracts, agreements, bonds, notes, and other debt instruments and other obligations, contracts ad agreements shall be payable solely and exclusively from the revenues and funds received by the Corporation from the sources authorized by Section 4B of the Act and from such other sources as may be otherwise. lawfully available and belonging to the Corporation from time to time. ARTICLE FIVE FINANCING (a) Before the co~on of the initial delivery of any bonds, notes, or other forms of debt instruments, the Corporation shall obtain approval by the Council. (b) In the exercise of the powers of the Corporation, the Corporation may .enter into loan,lease. trust, or other agreements as authorized by the.Act that are neCQSSary and appropriate to the fulfillment o( the public purpose of the Corporation. all of w~ch agt'!lements, and the specific uses, and the methods of withdrawal and expenditure of the proceeds of the bonds, notes, or other debt instruments, must be included as a part of the approval process of the Council required by p~h (a) above. (c) In the exercise of the powers o(the Corporation, the Corporation may not enter into IlII,Y loan. lease, trust, or other agreement the effect of which would grant, convey, transfer, mortgage, encumber, pledge or assign. a security interest or any other interest in any property owned by the City. Any agreement entered into by the Corporation shall. contain language substantially to the 8frect that any grant, 0". . conveyance, transfer, mortgage, encumbrance, pledge or assignment of property owned by the City is prohibited. 0811801 -4- t .~. . .1.-". (" . ..,. I" l' ,.' ARTICLE SIX MEMBERS The Corporation has no members and is a nonstock corporation. ARTICLE SEVEN SALES TAX UpQJl receipt from the City of the proceedS of the sales and use tax imposed under Section 4B of the Act, the Corporation may use the proceeds as permitted by the Act as now existing or as may be amended and these Articles of Incorporation. ARTICLE EIGHT AMENDMENT These Articles of Incorporation may 'be amended at any time as provid8d in the Act, to make 8.Qy changes and add any provisions which might have been included in .. the Articles of IncorpOration in the first instance or as may be permitted by subsequent changes in the law. Any amendment may be accomplished in either of the following manners: . (1) The members of the Board of Directors of the Corporation shall file with the Council a. written application requesting approval of the amendments to these Articles of Incorporation, sPecifsing in such application the amendments proposed to be made. The Council shall consider such application and, if it shall, by ordinanee, duly find and determine that it is advisable that the proposed amendments be made it shall approve the form of the proposed amendments. The Board of Directors of the Corporation may then amend these Articles of Incorporation by adopting such amendment at a meeting of the Board of Directors and delivering such amendments to the Secretary of State; or (2) The Council may, at its sole discretion. and at any time, amend these Articles of Incorporation and .alter or change the structure, organization. programs or 0111301 ..0- activities of the Corporation, or terminatE! or dissolve the Corporation (subject to the provisions of the Act, and subject to any limitation provided by applicable constitutions and laws of the impairment of contracts entered into by the Corporation) by ordinance adopting the amendment to these Articles' of Incorporation or articles of dissolution at a meeting of the Council, and delivering articles of amendment or dissolution to the . . Secretary of State, as provided in the Act. Restated Articles of Incorporation may be rued with the Secretary of State as provided in the Act without the consent of the Council. ARTICLE NINE ADDRESS The street address of the initial registered office of the Corporation is 1400 Schertz ParkWay, Schertz, TiWlS '18154:, aDd the name of its initial registered agent at . that address is Kerry Sweatt, City Manager. ARTICLE TEN BOARD OF DIRECTORS (a) The affairs of the Corporat;ion shall be managed by a board of direef;ors . . which shall be composed of seven persons appointed by the Council. The terma of the initial board of directors shall be as follows: Three (3) of the directors shall be appointed to terms expiring September 30,1999 and four (4) of the directors shall be appointed to terms expiring September 30, 2000. Thereafter, the terms of directors shall be two (2) years, expiring on September 30 of odd numbered and even numbered years, respectively. Directors may be appointed to succeed themselves. Each director must be a resident of the City, and four (4) of the directors must be members of the Council. The three (3) remaining directors must not be employees or officers of the City, or members of the Council. Any director who is a member of the Council shall cease to be a director at the time he or she ceases to be a member of the Council, but 0811101 -6- . . V' , '. .. ,I.' " I '\ ' is eligible for reappointment. A majority of the entire membership of the board, including any vacancies, is it quorum. The board shall conduct all meetings within the boundaries of the City. (b) The names and meet addresses of the persons who are to serve as the initial directors and the dates of'expiration of their initial terms as directors, are as follows: NAMES EXPIRATION OF TERM 9/30/2000 9/3012000 9/30/2000 9/30/1999 9/30/199D 9/30/1999 9/30/2000 Norman Agee, Sr. Ramon Cook Kenneth Greenwald charles MCDonald Johnie McDow Timothy Swinney Steve White ADDRESSES 1400 Schertz Parkway 1400 Schertz Parkway 1400 Schertz Parkway 1400 Schertz Parkway 1400 Schertz Parkway 1400 Schertz Parkway 1400 Schertz Parkway Each director, is and must be, a qualified elector of the City. Each director, including the initial directors, shall be eligible for reappointment. Each director shall serve until a successor is appointed. Directors are removable by the Couneil at any time with or without cause. (c) The directors shall serve without compensation, but they shall be reimbursed for their actual expenses incurred in the performance of their duties as . , directors. Any vacancy occurring on the board of directors (by reason of death, resignation, or otherwise) shall be filled by appointment by the Council of a person who shall hold office until the expiration of the term. (d) The board of directors shall elect a president, vice president, secretary and any other officers that the Corporation considers necessary, to serve as executive officers of the Corporation, as more specifically provided in the Corporation's Bylaws. The term of each officer's office shall expire on September 30 of each year. The City OS11JOl -7- Manager; or his designee, shall serve 88 the EX~tive Director of the Corporation to provide administrative support services for the Corporati9D, but the Executive Director shall not be a member of the board of directors. (e) Meetings of the board of directors are subject to the Texas Open Meetings Act, as amended, Texas Government Code, Chapter 551, and the Corporation is subject to the Texas Open Records Act, as amended, Texas Government Code, Chapter 652. ARTICLE ELEVEN BYLAWS The initial ,Bylaws of the Corporation have been approved by the Council and shall be adopted by the Corporation's board of directors and shall, together with these Articles of Incorporation, govern the initial affairs of the Corporation until and unless amended in accordance with the provisions of the Act and these Articles of Incorporation. ARTICLE TWELVE INCORPORATORS The name and street address of each incorPorator are: &ME ADDRESS 1400 Sch~rtz Parkway, Schertz, Texas 78154 1400 Schertz Parkway, SChertz, Texas 78154 1400 Schertz Parkway, Schertz, Texas 78154 Norma Althouse Hal Baldwin ' Kerry Sweatt Each incorporator is a qualified elector of the City. ARTICLE THIRTEEN COUNCIL APPROVAL The City has specifically authorized the Corporation by ordinance to act on its behalf to further the public purposes stated in said Ordinance and these Articles of Incorporation, and the City has by said Ordinance, dated February 3, 1998, approved 0811801 -8- ~ " . , ,- ~ .. .' . .' .. , these Articles of Incorporation. A copy .of such Ordinance is on file among the permanent public records of the City and the Corporation. ARTICLE FOURTEEN . DISSOLUTION (a) The Corporation shall not be dissolved, and its businesS shall not be. .' terminated, by act of the Council or otherwise, so long as the Corporation shall be obligated to pay any bonds, notes, or other obligations and. unless the collection {)f the sales and use tax authorized by Section' 4B of the Act is eligible for termination in accordance with the provisions of Section 4B(i) of the. Act. (b) No action. shall be taken pursuant to paragraph (a) of this Article or pursuant to paragraph (b) of Article Sixteen of th~e Articles, in anY manner or at any time that would impair ~ contract, lease,. right, or. other obligation theretofore executed, granted, or incurred by the Corporation. ARTICLE FIFTEEN NOT A PRIVATE FOUNDATION If the Corporation is ever determined to be a private foundation within the meai1i.ng of Section 509(a) of the Internal Revenue Code of 1986, as amended (the "Cock"), the Corporation: (1) shall distribute its income for each taxable year at such tUne and in such ~er as not to become subject to the tax on undistributed income iinposed by Section 4942 of the Code; (2) shall not engage in any act of self-dealing as defined in Section 4941(d) of the Code. (8) shall not retain any excess business holdings as defined in Section 4948(c) of the Code; 0811101 .9- . . (4) shall not make any investments in such manner as to subject it to tax . under Section 4944 of the Code; and (5) shall not make any taxable expenditures as defined in Section 4945(d) of the Code. ARTICLE SIXTEEN MISCELLANEOUS (a) No dividends shall ever be pBidby the Corporation and no part of its net earnings remaining after payment. of its expenses and other obligations shall be distributed to or inure to be benefit ofits .directors i>r officers, or any individual, private .firm, or private corporation or 8BBOCiation, acept in reasonable amounts for services rendered. (b) If, after the close of any. fiscal year,.the bQard of directors shall determine that sufficient .provision has been made for the full PlIY1DBnt of all current expenses, together with all amounts payable on the contracts, agreements, bonds, notes, and other obligations of the Corporation, and that all of the terms, provisions, and covenants therein have been met, then any net earnings derived from sources other than the Sales and use taxes collected for the account of Corporation purSuant to section 4B of the Act thereafter accruing in connection with projects financed pursuant to Section 4B of the Act, and lease payments received in connection with projects financed pursuant to Section 4B of the Act shall be used solely for the p~ permitted by Section 4B of the Act and Article 4(a) of these Articles. (c) If the Corporation ever should be dissolved when it has, or is entitled to, any interest in any funds or property of any kind, real, persqnaI or mixed, such funds or property or rights thereto shall not be transferred to private ownership, but shall be transferred and delivered to the City after satisfaction of debts and claims. 0311l101 -10- '".' ...,.......