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<br /> LOAN GUARANTEE AGREEMENT
<br /> This loan guarantee agreement is made between the Texas Department of Transportation, an agency
<br /> of the State of Texas with offices at 125 E. 11th Street, Austin, Texas, (hereinafter "TxDOT") and
<br /> the City of San Marcos, Texas, a municipal corporation acting through its duly authorized officers
<br /> (hereinafter "the City").
<br /> WHEREAS, the National Railroad Passenger Corporation (hereinafter "Amtrak") operates
<br /> the "Texas Eagle," an intercity passenger rail train, between Chicago, Illinois, and San Antonio,
<br />I Texas, via Missouri and Arkansas; and
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<br /> WHEREAS, Amtrak by letter dated January 24, 1997, notified the Governor ofthe State of
<br /> Texas that Amtrak would discontinue the operation of the Texas Eagle, effective May 10, 1997, if
<br /> necessary financial resources were not provided to Amtrak to continue the service; and
<br /> WHEREAS, on June 3, 1997, TxDOT, acting pursuant to Senate Bill 1706 and Senate Bill
<br /> 886, 75th Legislature, Regular Session, executed a $5.6 million loan to Amtrak, allowing Amtrak to
<br /> continue operation of the Texas Eagle through September 30, 1997; and
<br /> WHEREAS, the loan agreement requires Amtrak to repay the $5.6 million plus interest, with
<br /> interest to be accrued at the rate of interest earned by the State of Texas on funds invested pursuant
<br /> to Section 404. 024(b), Texas Government Code, and requires the loan to be paid in full by July 31,
<br /> 1999; and
<br /> WHEREAS, as collateral against the loan Amtrak has granted to TxDOT, through a security
<br /> agreement recorded with the US. Surface Transportation Board pursuant to 49 US.C. 11301, a
<br /> security interest in forty-seven (47) passenger rail cars having a total estimated value of$6,345,000;
<br /> and
<br />- WHEREAS, although the loan is fully-collateralized, Senate Bill 1706 requires TxDOT to
<br />! secure an agreement with each of the municipalities served by the Texas Eagle to further guarantee
<br /> the repayment of one half of any unpaid balance on the loan, including interest, in the event of a
<br /> default by Amtrak; and
<br /> WHEREAS, on April 30, 1997, the City of San Marcos, as a city served by the Texas Eagle,
<br /> agreed to guarantee the loan along with TxDOT and the other municipalities served by the Texas
<br /> Eagle to assure the $5.6 million loan is repaid to the State of Texas; and
<br /> WHEREAS, pursuant to Senate Bill 1706, it is necessary for TxDOT and the City to
<br /> formalize the City's commitment through execution of this loan guarantee agreement; and
<br /> WHEREAS, as evidence of the City's authority to guarantee the loan and enter into this
<br /> agreement, on June 24th , 1997, the San Marcos City Council passed
<br /> Resolution/Ordinance No. ,
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