R96-096RESOLUTION NO. R-96-~
A RESOLUTION OF THE CITY COMMISSION OF CITY OF
BOYNTON BEACH, FLORIDA AUTHORIZING THE ISSUANCE
OF ITS NOT TO EXCEED $13,000,000 MULTI-FAMILY
HOUSING MORTGAGE REVENUE BONDS, SERIES 1996
(CLIPPER COVE APARTMENTS) FOR THE PRINCIPAL
PURPOSE OF REFINANCING A PORTION OF THE COST OF
ACQUIRING, CONSTRUCTING AND EQUIPPING A
MULTI-FAMILY HOUSING FACILITY TO BE OWNED AND
OPERATED BY C/HP COVE, INC.; APPROVING THE FORM
OF AND AUTHORIZING THE EXECUTION OF AN
INDENTURE OF TRUST AND ASSIGNMENT OF MORTGAGE,
A LOAN AGREEMENT, A DECLARATION OF RESTRICTIVE
COVENANTS, A BOND PURCHASE AGREEMENT AND A
DEFINITIVE AGREEMENT AND APPROVING THE FORM OF
A MORTGAGE AND SECURITY AGREEMENT AND A
PRELIMINARY OFFICIAL STATEMENT; AUTHORIZING THE
AWARD OF THE SALE OF THE BONDS BY A NEGOTIATED
SALE; APPROVING A TRUSTEE FOR THE BONDS;
AUTHORIZING THE PREPARATION, EXECUTION AND
DELIVERY OF A FINAL OFFICIAL STATEMENT;
AUTHORIZING CERTAIN OFFICIALS AND EMPLOYEES OF
~HE CITY TO TAKE ALL ACTIONS REQUIRED IN
CONNECTION WITH THE ISSUANCE OF THE BONDS; AND
MAKING CERTAIN OTHER COVENANTS AND AGREEMENTS
IN CONNECTION WITH THE ISSUANCE OF THE BONDS;
AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, City of Boynton Beach, Florida (the "Issuer") is a
political subdivision of the State of Florida and is empowered by
the provisions of Article VIII, Section 2 and Article VII,
Section 10(c) of the Florida Constitution, and Chapter 166,
Florida Statutes (the "Act"), to issue obligations for the purpose
of financing multi-family housing facilities; and
WHEREAS, the City Commission (the "Governing Body") of the
Issuer has been requested by C/HP Cove, Inc. to issue not to
exceed $13,000,000 aggregate principal amount of multi-family
housing mortgage revenue bonds for the principal purpose of
refinancing the cost of a multi-family housing facility within the
City of Boynton Beach, Florida; and
WHEREAS, on December 19, 1995 and again on June 4, 1996 the
Issuer conducted public hearings as required by Section t47(f) of
the Internal Revenue Code of 1986, as amended, with respect to the
i~suance of the aforementioned bonds; and
WHEREAS, the Issuer has determined to issue its Multi-family
Housing Mortgage Revenue Bonds, Series 1996 (Clipper Cove
Apartments) in the principal amount of not exceeding $13,000,000
(the "Bonds") as further provided herein; and
WHEREAS, the Issuer and C/HP Cove, Inc., a Florida corporation
not-for-profit (the "Borrower") have received a form of Bond
Purchase Agreement (the "Bond Purchase Agreement") whereby Wheat,
First Securities, Inc., Stifel Nicolaus & Company, Incorporated
and Raymond James & Associates, Inc. (the "Underwriters") would
agree to purchase the Bonds; and
WHEREAS, it is necessary and desirable to approve the form of
and authorize the execution of an Indenture of Trust and
Assignment of Mortgage, a Loan Agreement, a Declaration of
Restrictive Covenants, a Definitive Agreement and the Bond
Purchase Agreement and to approve the forms of a Preliminary
Official Statement and a Mortgage and Security Agreement in
connection with the issuance of the Bonds, and to provide a method
to specify the interest rate(s), maturity date(s), redemption
provisions and other details for the Bonds; and
WHEREAS, the issuance of the Bonds and the sale thereof to the
Underwriters will, in the judgment of the Issuer, serve the
intended public purpose and in all respects conform to the
provisions and requirements of the Act;
NOW, THEREFORE, BE IT RESOLVED THAT:
Section 1. Definitions. Unless the context otherwise
requires, terms used herein in capitalized form and not otherwise
defined herein shall have the meanings specified therefor in the
Indenture of Trust and Assignment of Mortgage attached hereto as
Exhibit "A" (the "Indenture"). Words importing singular number
shall include the plural number in each case and vice versa, and
words importing persons shall include firms and corporations.
Section 2. Authority for this Resolution. This resolution,
herein called the "Resolution," is adopted pursuant to the Act.
Section 3. Findings.
and declared as follows:
It is hereby ascertained, determined
A, The Project is appropriate to the needs and circumstances
of, and will make a significant contribution to the economic
growth of the Issuer, will provide and preserve gainful
employment, and will serve a public purpose, consistent with
Article VII, Section 10(c) of the Florida Constitution, by
advancing the economic prosperity and the general welfare of the
Issuer, the State, and the people thereof, and in particular, the
issuance of the Bonds is in the common interest of the people of
the City of Boynton Beach, Florida. The Borrower is financially
responsible and fully capable of and willing to fulfill any
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obligations which it may incur in connection with the financing of
the Project as contemplated by this Resolution. The Issuer will
be able to cope satisfactorily with the impact of the Project and
will be able to provide, or cause to be provided when needed, the
public facilities, including utilities and public services, that
will be necessary for the operation, repair and maintenance of the
Project and on account of any increases in population or other
circumstances resUlting therefrom.
B. The Issuer hereby finds that the Agreement makes adequate
provision for the operation, repair and maintenance of the Project
at the expense of the Borrower and for the payment of the
principal and interest on the Bonds.
Section 4. Authorization of Bonds. Subject and pursuant to
the provisions hereof and of the Indenture, for the purpose of
financing the Project, the issuance of revenue bonds of the Issuer
under the authority of the Act in the principal amount of not to
exceed $13,000,000 is hereby approved. The Mayor or Vice-Mayor of
the Issuer (the "Mayor") is hereby authorized to award the sale of
the Bonds in an aggregate principal amount sufficient, together
with other available funds, to finance the Project and the costs
associated with issuance of the Bonds, as requested by the
Borrower, provided that the aggregate principal amount of the
Bonds shall not exceed $13,000,000, the final maturity shall not
be more than forty (40) years after issuance, the net interest
cost on the Bonds shall not exceed eight percent (8%) per annum
and the purchase price shall not be less than ninety-eight percent
(98%) of the principal amount of the Bonds (reduced by any
original issue discount and increased by any premium reflected in
the initial offering price to the public), plus accrued interest
to the date of issuance of the Bonds, all as approved by the
Borrower and set forth in the Bond Purchase Agreement. The
issuance of the Bonds is hereby approved for purposes of Section
147(f) of the Code.
Subject to the foregoing, the Bonds shall be dated, shall bear
interest at such rates, mature on such dates, be subject to
redemption on such dates and in such amounts and at such price and
have such other details, terms and conditions all as set forth in
the Indenture.
Section 5. Authorization of Execution and Delivery of the
Indenture. As security for the payment of the principal of and
interest on the Bonds, the Indenture, in substantially the form
thereof attached hereto as Exhibit A, completed to reflect the
terms of the Bonds, and with such changes, alterations and
corrections as may be approved by the Mayor, such approval to be
presumed by the execution thereof by the Mayor, is hereby approved
by the Issuer, and the Issuer hereby authorizes and directs the
Mayor to execute the Indenture and the City Clerk or any deputy
City Clerk (the "Clerk") to attest thereto under the official seal
of the Issuer, and to deliver the Indenture to the Trustee all of
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the provisions of which, when executed and delivered by the Issuer
as authorized herein, shall be deemed to be a part of this
Resolution as fully and to the same extent as if incorporated
verbatim herein.
Section 6. Authorization of Execution and Delivery of the
Aqreement. The Agreement, in substantially the form thereof
attached hereto as Exhibit B, completed to reflect the terms of
the Bonds and with such other changes, alterations and corrections
thereto as may be approved by the Mayor, such approval to be
presumed by the execUtion thereof by the Mayor, is hereby approved
by the Issuer, and the Issuer authorizes and directs the Mayor to
execute the Agreement and the Clerk to attest thereto under the
official seal of the Issuer, and to deliver the Agreement to the
Borrower, all of the provisions of which, when executed and
delivered by the Issuer as authorized herein shall be deemed to be
a part of this Resolution as fully and to the same extent as if
incorporated verbatim herein.
Section 7. Approval of Mortgage. The Mortgage, in
substantially the form thereof attached hereto as Exhibit C,
completed to reflect the terms of the Bonds and with such other
changes, alterations and corrections thereto as may be approved by
the Mayor, such approval to be presumed by the execution of the
Agreement by the Mayor, is hereby approved by the Issuer.
Section 8. Sale of Bonds: Execution and Delivery of the Bond
Purchase Agreement. The Bonds are hereby awarded to the
Underwriters upon the terms and conditions as shall be set forth
in the Bond Purchase Agreement° The Bond Purchase Agreement, in
substantially the form thereof attached hereto as Exhibit D,
completed to reflect the terms of the Bonds and with such other
changes, alterations and corrections thereto as may be approved by
the Mayor, such approval to be presumed by the execution thereof
by the Mayor, is hereby approved by the Issuer, and, upon
execution thereof by the Borrower, the Issuer authorizes and
directs the Mayor to execute the Bond Purchase Agreement and the
Clerk to attest thereto under the official seal of the Issuer, and
to deliver the Bond Purchase Agreement to the Underwriters, all of
the provisions of which, when e~ecuted and delivered by the Issuer
as authorized herein shall be deemed to be a part of this
Resolution as fully and to the same extent as if incorporated
verbatim herein. The Issuer hereby determines that a negotiated
sale of the Bonds is in the ~est interest of the Issuer, the
Borrower and the citizens and i
of the limited market for bon
execution of the Bond Purchase
file with the Issuer the discl~
Florida Statutes, and competiti~
waived.
]habitants of the Issuer by reason
ds such as the Bonds. Prior to
Agreement the Underwriters shall
sure required by Section 218.385,
e bidding for the Bonds is hereby
Section 9. Appointment of Trustee. The Bank of New York,
acting by and through its agent, The Bank of New York Trust
Company of Florida, N.A. is hereby appointed Trustee to act under
the Indenture°
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Section 10. Official Statement. The Issuer hereby approves
the form and content of the Preliminary Official Statement
relating to the Bonds attached hereto as Exhibit E, with such
changes, alterations and corrections thereto as may be approved by
the City Manager, and authorizes the use thereof in connection
with the sale of the Bonds. The City Manager is hereby authorized
to "deem final" the Preliminary Official Statement for purposes of
Securities and Exchange Commission Rule 15c2-12. The Issuer
authorizes and directs the preparation of a final Official
Statement, which shall be in the form of the Preliminary Official
Statement, together with such changes, insertions, omissions and
filling in of blanks therein as may be approved by the Mayor, and
upon such preparation, the Mayor is authorized and directed to
execute the final Official Statement, such execution to be
conclusive evidence of such approval.
Section 11. Authorization of Execution and Delivery of th~
Restrictive Covenants. The Restrictive Covenants, in
substantially the form thereof attached hereto as Exhibit F, with
such changes, alterations and corrections thereto as may be
approved by the Mayor, such approval to be presumed by the
execution thereof by the Mayor, is hereby approved by the Issuer,
and the Issuer authorizes and directs the Mayor to execute the
Restrictive Covenants and the Clerk to attest thereto under the
official seal of the Issuer, and to deliver the Restrictive
Covenants to the Borrower, all of the provisions of which, when
executed and delivered by the Issuer as authorized herein shall be
deemed to be a part of this Resolution as fully and to the same
extent as if incorporated verbatim herein.
Section 12. Authorization of Execution and Delivery of the
Definitive Aqreement. The Definitive Agreement, in substantially
the form thereof attached hereto as Exhibit G, with such changes,
alterations and corrections thereto as may be approved by the
Mayor, such approval to be presumed by the execution thereof by
the Mayor, is hereby approved by the Issuer, and the Issuer
authorizes and directs the Mayor to execute the Definitive
Agreement and the Clerk to attest thereto under the official seal
of the Issuer, and to deliver the Definitive Agreement to the
Borrower, all of the provisions of which, when executed and
delivered by the Issuer as authorized herein shall be deemed to be
a part of this Resolution as fully and to the same extent as if
incorporated verbatim herein.
Section 13. Authorization of Execution and Delivery of th~
Letter of Representations. The Letter of Representations, in
substantially the form attached hereto as Exhibit H, completed
with the details of the Bonds, is hereby approved, and the Mayor
is hereby authorized and directed to execute the Letter of
Representations, and to deliver the same to the Trustee, all of
the provisions of which, when executed and delivered by the
parties thereto, shall be deemed to be a part of this Resolution
as fully and to the same extent as if incorporated verbatim herein.
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Section 14. No Personal Liability. No covenant, stipulation,
obligation or agreement herein contained or contained in the
Agreement, the Indenture, the Restrictive Covenants, the Bond
Purchase Agreement, the Definitive Agreement, the Bonds, or any
instrument contemplated thereby shall be deemed to be a covenant,
stipulation, obligation or agreement of any officer, member, agent
or employee of the Issuer in his or her individual cspacity, and
no member of the Governing Body of the Issuer executing the Bonds
or other documents herein mentioned shall be liable personally
thereon or be subject to any personal accountability by reason of
the issuance or execution thereof.
Section 15. No Third Party Beneficiaries. Except as herein
or in the documents herein mentioned otherwise expressly provided,
nothing in this Resolution or in such documents, express or
implied, is intended or shall be construed to confer upon any
person other than the Issuer, the Borrower, the owners of the
Bonds, the Underwriters, and the Trustee any right, remedy or
claim, legal or equitable, under and by reason of this Resolution
or any provision hereof or of such documents; this Resolution and
such documents being intended to be and being for the sole and
exclusive benefit of such parties.
Section 16. Prerequisites Performed. Ail acts, conditions
and things relating to the passage of this Resolution and required
by the Constitution or laws of the State of Florida to happen,
exist and be performed precedent to and in the passage hereof have
happened, exist and have been performed as so required.
Section 17. General Authority. The Clerk and the members
of the Governing Body of the Issuer are hereby authorized to do
all acts and things required of them by this Resolution, the
Agreement, the Restrictive Covenants, the Bond Purchase Agreement,
or the Indenture, or desirable or consistent with the requirements
hereof or thereof, for the full punctual and complete performance
of all terms, covenants and agreements contained in the Bonds, the
Agreement, the Bond Purchase Agreement, the Restrictive Covenants,
the Indenture, and this Resolution.
Section 18. General Authorizations. The Mayor, and any
other member of the Governing Body of the Issuer, the Clerk, the
City Attorney, and any other appropriate employee of the Issuer,
are hereby each authorized to execute, publish, file and record
such other documents, instruments, notices, and records and to
take such other actions as shall be necessary or desirable to
accomplish the purposes of this Resolution and to comply with and
perform the obligations of the Issuer under the Indenture, the
Agreement, the Restrictive Covenants and the Bong Purchase
Agreement.
Section 19. Resolution Constitutes a Contract. The Issuer
covenants and agrees that this Resolution shall constitute a
contract between the Issuer and the Owners from time to time of
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the Bonds and that all covenants and agreements set forth herein
and in the Agreement and the Indenture to be performed by the
Issuer shall be for the equal and ratable benefit and security of
all Owners of the Bonds.
Section 20. Severability. If any one or more of the
covenants, agreements, or provisions contained herein or in the
Bonds shall be held contrary to any express provisions of law or
contrary to the policy of express law, though not expressly
prohibited, or against public policy, or shall for any reason
whatsoever be held invalid, then such covenants, agreements, or
provisions shall be null and void and shall be deemed separable
from the remaining covenants, agreements, or provisions hereof and
thereof and shall in no way affect the validity of any of the
other provisions of this Resolution or of the Bonds.
Section 21. Repealer. Ail resolutions or parts thereof of
the Issuer in conflict with the provisions herein contained are,
to the extent of any such conflict, hereby superseded and repealed.
Section 22. Effective Date. This
effect immediately upon its adoption.
Resolution shall take
PASSED AND ADOPTED THIS J DAY OF JULY, 1996.
(SEAL)
ATTEST:
'City Clerk
CITY OF BOYNTON BEACH, FLORIDA
Vice-M~ / j~,/ 3
A ROV .D S TO,,J OR
ANO SO ./CIENC :
Commissioner
Co~ssioner
/
/
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810.0M/8
EXHIBIT "A"
INDENTURE OF TRUST
SIXTH DRAFT
.6/20/96
INDENTURE OF TRUST AND ASSIGNMENT
OF MORTGAGE
between
CITY OF BOYNTON BEACH, FLORIDA
and
THE BANK OF NEW YORK, as Trustee, acting
by and thorough The Bank of New York Trust Company-
of Florida, N.A., its agent
Dated as of July 1, 1996
THIS INSTRUMENT PREPARED BY/RETURN TO:
Mark E. Raymond
Moyle, Flanigan, KatZ,
FitzGerald & Sheehan, P.A.
P.O. Box 3888
West Palm Beach, FL 33402
796
TABLE OF CONTENTS
ARTICLE I - REFINITI,ONS AND RULES OF CONSTRUCTION
Section 101.
Section 102.
Definitions
Rules of Construction
ARTICLE II - AUTHORIZATION, EXECUTION, AUTHENTICATION,
REGISTRATION AND DELIVERY OF BONDS
Section 201.
Section 202.
Section 203.
Sect'ion 204.
Section 205.
Section 206.
'Section 207.
Section 208.
Section 209.
Section 210.
'Section 21.1.
Section 212.
Section 213.
.'Section 214.
Section 215.
Authorization of 1996 Bonds
Details of 1996 Bonds; Provisions on
Interest and Payment
Execution of Bonds
Authentication of Bonds
Form of the 1996 Bonds
Delivery of the 1996 Bonds
Registration of Bonds; Persons Treated
as Owners
Exchange of Bonds
Charges for Exchange and Registration
Temporary Bonds
Mutilated, Lost or Destroyed Bonds
Cancellation and Distribution of Bonds
Issuance of Additional Bonds
Application of 1996 Bond Proceeds and
Additional Bond Proceeds
Adjustment to Interest Rate
ARTICLE III - REDEMPTION AND TENDER OF BONDS
Section 3,01.
iSection 3.02.
Section 303.
Section 304.
Redemption Dates and Prices
Manner of Redemption
Notice of Redemption
Mandatory Tender of Tax-Exempt Bonds
ARTICLE IV - GENERAL COVENANTS AND PROVISIONS
Section 401.
Section 402.
Section 403.
Section 404.
Section 405,.
Section 406.
SeCtion 407.
.Section 408.
Payment .of Bonds
Performance of Issuer's Covenants
Instruments of Further Assurance
Inspection of Project Books
Rights under Loan Agreement, Note and
Restrictive Covenants
Prohibited Activities
Reports of Trustee
Secondary Market Disclosure
Page
7964M/67
TABLE OF CONTENTS
(CO'NTINUED)
ARTICLE V - REVENUES AND FUNDS
Section 501.
Section 502.
Section 503.
Section 504.
Section 505.
Section 506.
Section 507.
Section '508.
Section 509.
Section 510.
Section 511.
Section 512.
'Section 513.
Establishment of Funds
Revenue Fund
Expense Fund
Rebate Fund
Bond Fund
Cost of Issuance Fund
Debt Service Reserve Fund
Maintenance Reserve Fund
Operating Reserve Fund
Surplus Fund
Annual Budget
'Monies to Be Held in Trust
Repayment to Borrower
ARTICLE VI - CUSTODY AND APPLICATION OF BOND PROCEEDS
Section 601.
SeCtion 602.
Section 603.
~Creation of Project Fund
Payments into Project Fund
Payments from Project Fund
ARTICLE VII - INVESTMENTS
Section 701.
Section 702.
Invest,ment of Funds
Investments through Trustee's Bond
Department
ARTICLE VIII - DISCHARGE OF INDENTURE
Section 801. Discharge of Indenture
ARTICLE IX - DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND
BONDHOLDERS
Section 901.
Section 902.
Section 903.
Section 904.
Section 905.
Section 906.
Section 907.
Section 908.
Events ~of Default
Acceleration
Other Remedies; Rights of Bondholders
Right of Bondholders to Direct
Proceedings
Application of Monies
Remedies Vested in Trustee
Limitations on Suits
Waivers of Events of Default
Page
7964M/68
TABLE OF CONTENTS
(CONTINUED)
Section 909.
'Section 910.
Unconditional Right to Receive
Principal, Premium and Interest
Notice of Defaults; Opportunity to
Cure Defaults
ARTI~CLE X -'THE'TRUSTEE
Section 100I.
~'Section 100~2.
Section 1003.
Section 1004.
Section 1005.
Section 1006.
Section 1007.
Section 1008.
Section 1009.
Section 1010.
Section 1011.
Acceptance of Trusts
Fees, Charges and Expenses of
Trustee
Intervention by Trustee
Merger or Consolidation of Trustee
Resignation by Trustee
Removal of Trustee
Appointment of Successor Trustee by
Bondholders; Temporary Trustee
Concerning any Successor Trustee
Trustee Pr.otected in Relying Upon
Resolutions, etc.
Successor Trustee as Bond Registrar,
Custodian of Bond Fund and Paying Agent
Notice to Rating Agency
ARTICLE XI - SUPPLEMENTAL INDENTURES
Section 1101.
Section 1102.
Section 1103..
Section 110.4.
Supplemental Indentures Not Requiring
Consent of Bondholders
Supplemental Indentures Requiring
Consent of Bondholders
Opinion of Counsel and Consent of
~Borrower Required
Trustee~'s Obligation Regarding
Supplemental Indentures and Amendments,
e~c., to Loan Agreement, Note,
Mortgage and Restrictive Covenants
ARTICLE XII - AMENDMENT OF LOAN AGREEMENT, NOTE, MORTGAGE
AND RESTRICTIVE COVENANTS
Sec'tion 1201.
Section 1202.
Amendments, etc., to Loan Agreement,
Note, Mortgage and Restrictive
Covenants Not Requiring Consent of
Bondholders
Amendments, etc., to Loan Agreement,
Note, Mortgage and Restrictive
Covenants Requiring Consent of
Bondholders
Page
7964M/69
TABLE OF CONTENTS
(CONTINUED)
Section 1203.
Section 1204.
.Section 1205.
Limitation on Amendments
Amendment by Unanimous Consent
Opinion of Counsel Required and Consent
of Borrower Required
ARTICLE XIII - MISCELLANEOUS
Sec%io.n 1301.
Section 1302.
Section 1303.
Section 1304.
Section 1305.
Section 1306.
Section 13:07.
Section 1308.
Section 1309.
Consents, etc., of Bondholders
Limitation of Rights
Limitation of Liability of Officers,
Directors, etc., of Issuer
Notices
Successors and Assigns
Severability
Applicable Law
Counterparts
Election under Section 142(d)(1)
of the Code
Exhibit A - Form of 1996 Bond
Exhibit B - Requisition Form
EXhibit C - Certificate of Coverage
Page
THIS INDENTURE OF TRUST AND ASSIGNMENT OF MORTGAGE, made as of
~he first day of July, 1996, by and between the CITY OF BOYNTON
BEACH, FLORIDA, a political subdivision and municipality of the
State of Florida (the "Issuer"), and THE BANK OF NEW YORK, as
Trustee acting by and through THE BANK OF NEW YORK TRUST COMPANY
OF FLORIDA, N.Ao, its agent, a national banking association duly
organized and existing under the laws of the United States with
it,s principal corporate trust office in Jacksonville, Florida,
toget'her with any successor as trustee (the "Trustee");
WI TNE S SETH:
WHEREAS, the Issuer is a political
municipality of the State of Florida; and
subdivision and
WI~EREAS, pursuant to Article VIII, Section 2 and Article VII,
Section 10{c), of the Florida Constitution, the Charter of the
Issuer, Chapter 166, Florida Statutes and, with respect to the
Taxable Bonds (hereinafter defined) Part VII of Chapter 159,
Florida Statutes (collectively, the "Act") the Issuer is
authorized to exercise all the powers set forth in the Act, which
~nctUde, among other things, the power to issue bonds for
residential rental property for family units for use by an
organization which is described in Section 501(c)(3) of the
Internal Revenue :Code of 1986, as amended (the "Code"), and which
-is exemp~ from federal income taxation pursuant to Section 501(a)
of the Code; and
WHEREAS, in .order to further the purposes of the Act, the
Issuer proposes to issue its Multi-Family Housing Mortgage Revenue
Bonds, Series 1996 (Clipper Cove Apartments), in an amount of
~$ (the "1996 Bonds") and use the proceeds thereof
to make a loan to C/HP Cove, Inc., a Florida corporation
not-for-profit and an organization described in Section 501(c)(3)
of the Code and exempt from federal income tax under Section
501(a) of the Code (the "Borrower"), under the terms of a Loan
~Agreement, dated as of the date hereof (the "Loan Agreement"),
between the Issuer and the Borrower, to be used by the Borrower
for the principal purpose of refinancing a multi-family
residential rental project in the City of Boynton Beach, Florida
(the "Project"), constituting a "qualified residential rental
~project" within the meaning of Section 142(d) of the Code; and
WHEREAS, %he Issuer intends to assign to the Trustee, as
security for the Bonds, substantially all of its rights under the
Loan Agreement and the Borrower's promissory note in the principal
amount of $ (the "Note") delivered to the Issuer
pursuant to the Loan Agreement and the Mortgage and Security
Agreement made by Borrower granting a lien on the Project ~(the
',Mortgage"); and
WHEREAS, %he 1996 Bonds, the Trustee's certificate of
authentication to be endorsed on each of them and the form of
assignment to be printed on each of them are to be in
substantially the form attached as Exhibit A, with appropriate
vari@tions, omissions and insertions as are permitted or required
by %his Indenture; and
WHEREAS, all things necessary to make the 1996 Bonds, when
authenticated by the Trustee and issued as provided in this
Indenture, valid, binding and legal limited obligations of the
Issuer and to constitute this Indenture a valid and binding
agreement securing the payment of the principal of, premium, if
any, and interest on the Bonds (as hereinafter defined) issued and
to be issued hereunder, have been done and performed and the
execution and delivery of %his Indenture and the execution and
issuance of the 1996 Bonds, subject to the terms hereof, have in
all respects been duly authorized;
NOW, THEREFORE, THIS INDENTURE FURTHER WITNESSETH:
That the Issuer, as security for payment of the principal of,
premium, if any, and interest on the Bonds and for the funds which
may be advanced by the Trustee pursuant hereto, does hereby pledge
and assign without recourse to the Trustee all of the Issuer's
right, title and interest in and to the following described
property:
A. The Mortgage;
B. The Loan Agreement (except for the right of the Issuer to
indemnification pursuant to Section 5.3 of the Loan Agreement and
payment of its fees and its costs and expenses pursuant to
Sections 4.1(b) and 6.4 of the Loan Agreement), and the Note
delivered pursuant thereto and the security therefor, and all
revenues and receipts derived by the Issuer therefrom;
C. The funds, including monies and investments therein, held
by the Trustee pursuant to the terms of this Indenture;
D. The right to enforce the Restrictive Covenants (as
hereinafter defined), provided the Issuer also reserves certain
rights t~o enforce the same as provided herein; and
E. Ail other property of every name and nature from time to
time hereafter by delivery or by writing mortgaged, pledged,
delivered or hypothecated as and for additional security hereunder
by the Issuer or by anyone else in favor of the Trustee, including
the Mortgage, and the Trustee is hereby authorized to receive all
such property at any time and to hold and apply the same subject
to the terms hereof;
TO HAVE AND TO HOLD all the same with all privileges and
appurtenances hereby conveyed and assigned, or agreed or intended
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to be conveyed and assigned, to the Trustee and its successors in
such trust and their assigns forever;
IN TRUST, ~however, for the equal and proportionate benefit and
security of the owners from time to time of the Bonds issued under
and secured by this Indenture without privilege, priority, or
distinction as to the lien or otherwise of any of the Bonds over
any of the others except as otherwise provided herein, upon the
terms and conditions hereinafter stated;
The .Issuer hereby covenants and agrees with the Trustee and
with the respective owners, from time to time, of the Bonds as
follows:
ARTICLE I
DEFINITIONS AND RULE~ OF CONSTRUCTION
Section 10t. Definitions. Except as otherwise defined in the
Loan Agreement, all w~ords and terms defined in the Loan Agreement
and the Restrictiwe Covenants shall have the same meanings in this
Indenture. In addition, the following words and terms as used in
this Indenture shall have the following meanings unless a
different meaning clearly appears from the context:
"Act" shall mean Article VIII, Section 2 and Article VII,
Section 10(c)., of the Florida Constitution, the Charter of the
Issuer, Cha~ter 1.66, Florida S'tatutes and, with respect to the
Taxable Bonds, Part VII of Chapter 159, Florida Statutes.
"Additional Bonds" -shall ~mean any bonds issued pursuant to
Section 213.
"Annual Budget" shall mean the annual budget provided for in
Section 511.
"Asset Management Fee" shall mean the fee of 1.25% of Gross
Revenue per month paid .or due to (i) the Corporation pursuant to
that certain , dated between the
Borrower -and the Corporation or (ii) the Corporation or any other
entity pursuant to an agreement provided to the Trustee together
with an opinion of Bond Counsel to the effect that payment of such
Asset Management Fee pursuant to such agreement will not adversely
affect any exclusion from gross income for federal income tax
purposes of int.erest on the Tax-Exempt Bonds.
"Asset Manager" shall mean the Corporation or such other
entity entitled to receive the Asset Management Fee.
"Authorized Representative of the Borrower" shall
mean or such other person as may be designated
by the Borrower from time to time to act on behalf of the Borrower.
-3- 7964M
".Beneficial Owner" shall mean any person which (a) has the
power, directly-or indirectly, to vote or consent with respect to,
or to -dispose of ownership of, any Bonds (including persons
holding Bonds through nominees, depositories or other
interme~liaries), or (b) is 'treated as the owner of any Bonds for
feders1 income ~tax purposes.
~"Bond Counsel" shall mean an attorney or firm of attorneys
nationally ~ecognized on the subject of municipal bonds.
"Bond Coverage Requirement" shall mean, for any Fiscal Year, a
Bond Coverage Ratio of or greater.
"Bond Coverage Ratio" shall mean for any Fiscal Year the ratio
of (a) Gross Revenues deposited into the Revenue Fund less (i)
Expenses paid during such Fiscal Year from the General Expense
.Account .and from the Tax/Insurance Account, (ii) the Maintenance
Reserve Fund Deposit Requirement for the Fiscal Year, which for
.purposes of this .definition shall be limited to $8,000 per month,
(iii) any deposit made to the Operating Reserve Fund during the
Fiscal Year, (iv) amounts paid for Trustees Fees and Expenses,
Rating .Agency Fees, Rebate Analyst Fees, Asset Management Fees and
Social ServiceManagement Fees to (b) Maximum Annual Debt Service.
"BondFund" shall mean the Bond Fund created by Section 501.
"Bondholder," "Holder" or "Owner" shall mean the registered
owner of an~ Bond.
'Bonds" shall mean the 1996 Bonds and any Additional Bonds.
"Bond ~ear~ shall mean the 12-month period (or portion thereof
,ss to the first Bond Year) ending on and including January 1 of
each year~.
"Borrower" shall mean C/HP Cove, Inc., a Florida corporation
'not-for-profit and an organization described in Section 501(c)(3)
of the ~Code and exempt from tax under Section 501(a) of the Code,
and fits successors or assigns, or such persons or entities as may
be designated to act on behalf of the Borrower.
"Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which the Principal Office of the Trustee is
lawfully closed.
'Certificate of Coverage" shall mean that certificate in the
form attached to this Indenture as Exhibit C.
'Code~ shall mean %he Internal Revenue Code of 1986, as
amended, as it applies to the Bonds, including applicable
~egul~tions and revenue rulings thereunder. Reference herein to
an~ specific provision of the Code shall be deemed to include any
~successoz provision of such provision of the Code.
-4- 7964M
~"Corporation" shall mean Cornerstone Housing Corporation, or
~ts successors and assigns, provided such successors or assigns
~are organizations described in Section 501(c)(3) of the Code.
"Cost of the Project" shall mean
~rti¢le VI.
the items described in
"Cost of Issuance" shall mean fees and expenses (including
legal ~ees) of the Issuer, the Trustee, any paying agent for the
~Bonds, the underwriters and the Borrower, title insurance
~premiums, appraisal and structural reviews and all other costs and
expenses related to the issuance of the Bonds.
"Cost of Issuance Fund" shall mean the Cost of Issuance Fund
created by Section 501.
· 'Debt Service Reserve Fund" shall mean the Debt
Reserve Fund created by Section 501.
Service
"Debt Service Reserve Fund Requirement" shall mean, with
respect to a Series of. Bonds to be secured by an account in the
Debt .Service Reserve Fund, the lesser of (A) the maximum annual
debt service scheduled to become due on such Bonds for the then
current or any subsequent Bond Year, (B) ten percent (10%) of the
stated principal amount of such Bonds (if a Series of Bonds has
~mo're than a de minimis amount of original issue discount or
premium (as defined in Treas. Reg. §1.148-1(b)) then the issue
price (as defined in said Regulation) of such Series (net of
pre-issuance accrued interest) shall be used to measure the ten
percent (10%) limitation in lieu of the stated principal amount of
such Series) or (C) 125% of the average annual principal and
interest payable on such Series of Bonds calculated on a Bond Year
basis on ~the date of issuance only. The Debt Service Reserve Fund
Requirement for a Series may be identified by the Series
~designation for such Series, and the Debt Service Reserve Fund
Requirement for the 1996 Bonds is referred to as the "1996 Bonds
Debt Service Reserve Fund Requirement."
"Definitive Agreement" shall mean that Definitive Agreement
dated July , 1996 between the Borrower and the City of Boynton
Beach, Florida, which sets forth the agreement of the parties
thereto with respect to the purchase, financing and operation of
the Project.
"Determination of Taxability" shall mean the entry of a final
decree or judgment of any Federal court or the taking of final
action by the Internal Revenue Service, which decree, judgment or
action determines that interest paid or payable on any Tax-Exempt
Bond is or was includable in the gross income of an Owner of such
Tax-Exempt Bond for Federal income tax purposes under Section 103
of %he Code. No such decree, judgment or action shall be
considered "final," however, until the earlier of (a) the
-5- 7964M
expiration ~of a period of 45 days after the giving of notice to
the Borrower-o~f such decree, judgment or action, during which time
the ~Bo'rrower shall have failed to initiate action to contest such
decr~ee, judgment or action either directly or in the name of any
owner~f Tax~Exempt Bonds, or (b) conclusion unfavorable to the
Borrower and the Bondholders of any such action initiated by the
3Borrower within such 45-day period including conclusion of any
appellate review, if sought'; provided, however, that prior to
in%flaring such action the Borrower shall deliver to the Trustee a
written opinion of Bond Counsel to the effect that the Borrower
has a meritorious basis for such action and after initiating the
same t~he BOrrower pursues such action in good faith and with due
diligence.
"Event of .Default" shall mean any of the events enumerated in
Section 901.
"Expense Fund" shall mean the Expense Fund created by Section
501.
"Expense :Requirement, shall mean an amount equal to the sum of
(a) one-twelfth ~of the annual operating expenses of the Project,
as set forth in the Annual Budget for the Project including
Management Fees and Expenses, but excluding (1) any depreciation
or amortization, (2) amounts for property taxes and insurance
premiums., {3) Trustee Fees and Expenses, Rating Agency Fees,
Rebate Analyst Fee, the Asset Management Fee and the Social
-Service .Fee and (4) payments to be made pursuant to the Note and
the Loan .:Agreement, and {b) the aggregate amount of all unfilled
requisitions ~pon the'General Expense Account.
"'Expenses" shall mean, for any period, all expenses related to
the operation and maintenance of the Project and properly
allocated 'to such period whether by reason of actual cash
expenditure or ,accrual of the Obligation; such expenses include,
but are not limited to, .the folloWing: the Management Fees and
Expenses, Asset Management Fees, Social Service Fees and all other
fees 'and expenses for management and other services provided at or
in connection with the Project; wages, salaries and employee
benefits .and other labor costs; maintenance, janitorial and
cleaning .expenses; repairs and replacements; lease payments and
expenses; utilities; water and sewer charges and trash, garbage
_and solid waste disposal fees, charges and expenses; contracted
services; legal, accounting and consulting fees and expenses of
the Project and %he Borrower; taxes, payments in lieu of taxes,
assessments and excises; leasing and brokerage commissions; costs
of licenses, permits and similar fees relating to the Project or
its operations; advertising and marketing costs; costs of goods
and supplies; interest and principal on debt incurred to maintain,
improve or expand the Project and debt incurred to refinance any
of such obligations; financing expenses and ongoing fees and
expenses related to the Bonds and other obligations incurred in
-6- 7964M
respect ~o the Project (except to the extent paid from the
.proceeds of the Bonds or other obligations); and all other
expenses incurred in the course of property operations,
maintenance and preservation.
,Extrmordinary T~ustee Fees and Expenses" shall mean the
extraordinary fees and expenses of the Trustee (including legal
fees) beyond its ordinary annual fees.
"Financing I~nstruments" shall have.the meaning given to such
term in %he Loan Agreement.
"Fiscal Year" means %he one year period selected by the
~Borrower as its fiscal yeiar, w:hich shall be a year beginning on
January 1, unless the Borrower shall select a different year as
its fiscal year and shall have provided written notice thereof to
the Trustee.
"GAAP" shmll mean generally accepted accounting principles.
"General Expense Account" ~shall mean the General
Account in the Expense Fund created by Section 501.
Expense
"Government Obligations" shall mean either noncallable direct
full faith and credit obligations of the United States of America
or noncaltable obligations the payment of principal of and
interest on which is unconditionally guaranteed by the full faith
and credit of the United States of America.
"Gross Revenues" means, for any period, the aggregate
revenues, dete~rmined on a cash basis, generated from owning,
operating, leasing and/or occupying the Project including, but not
limited to, the tota'l amount paid by all tenants and others
occupying or using or having a right to occupy or use the Project
or any portion thereof, including, but not limited to all rents
(including reimbursements by tenants of operating expenses and
including Security Deposits forfeited by tenants or otherwise
included in the Borrower's income), license fees and other charges
or sums received by or credited to the Borrower under any lease,
license or other agreement (including, without limitation,
proceeds of rental or business interruption insurance prorated
over the applicable period in the manner rent wss to be paid),
vending machine income and laundry service income, all interest
earned on the funds and accounts held under this Indenture and
deposited into the Revenue Fund; provided, however, that Gross
Revenue does not include (i) the proceeds of any Bonds or other
borrowing or moneys otherwise advanced to the Borrower by third
parties, (ii) the proceeds of ~any Sale or refinancing of the
Project, ('iii) any capital contributions, (iv) the insurance
proceeds (other than business interruption insurance to the extent
described above) and (v) Security Deposits (until converted into
rental income-ms described above).
-7- 7964M
"Indenture, shall mean this Indenture of Trust and Assignment
of Mortgage, including any amendments or supplements hereto as
i'herein permitted.
"'Interest Account" shall mean the-account of that name in the
Bond Fund created by Section 501.
"Interest Payment Date" shall mean, with respect to the 1996
Bonds,. January 1 and July 1 of each year, commencing on January 1,
19'97.
"Investment Obligations" shall mean:
{a) bonds, notes and other evidences of indebtedness of
the ~State or any political subdivision thereof and securities
unconditionally guaranteed as to payment of principal and interest
;by :the State, as long as the same have a rating on the date of
~nvestment therein from the Rating Agency equal to or higher than
the rating on the Bonds;
(.b) bonds, treasury notes and other obligations of the
United States Of America and securities unconditionally guaranteed
as to payment of principal and interest by the United States of
America;
(c) as long as the same have a rating on the date of
investment 'therein from the Rating Agency equal to or higher than
the rating o-n the Bonds, bonds, debentures, notes or other
evidence of indebtedness issued by any of the following agencies
or any other like governmental or government-sponsored agencies
which are hereafter created: Bank for Cooperatives; Federal
Intermediate Credit Banks; Consolidated Farm Credit System-Wide
Bonds; Federal Financing Bank; Federal Home Loan Bank System;
Export-Import Bank of the United States; Farmers Home
Administration; .Small Business Administration; Inter-American
Development Bank; Federal Land Banks; and Government National
Mortgage Association;
(d) repurchase agreements for such' obligations specified
in paragraphs (b) and (c) above subject to the limitations set
forth below;
(e) savings accounts, time deposits, certificates of
deposit or other interest-bearing accounts in any bank within or
without the State, including the Trustee, having a combined
capital surplus a~d undivided profits of not less than
$50,00'0,000; provided, that such investment is either (i) fully
insured by the Federal Deposit Insurance Corporation or similar
federal agency or (ii) collateralized or otherwise secured to the
full extent required by law and at levels required by the Rating
Agency; and provided, further, that no such deposits made under
this ~paragraph (e) shall be made for any period in excess of one
year;
,8- 7964M
(f) commercial paper, with a maturity of 180 days or
~ess, of issuing corporations organized under the laws of the
United states or of any state thereof, including paper issued by
Danks and bank holding companies, rated by the Rating Agency not
lower than A-l; and
(g) a
agreement with a
requirements:
guarant,eed investment contract or investment
provider or guarantor meeting the following
(i) the provider or guarantor must be rated at least "A"
or equivalent by the Rating Agency; provided, that the
guarantee ~must be unconditional and must be confirmed in
~writing prior to a'ny assignment by the provider to another
subsidiary of ~he guarantor;
(ii} the moneys invested under the such contract or
agreement must be payable to the Trustee without condition
(other than notice) and without a breakage fee or other
penalty for regularly scheduled withdrawals therefrom, upon
not more than two Business Days' notice for application when
and as required or permitted under this Indenture;
(iii) such .contract or agreement must state that it is
unconditional and must expressly disclaim any right of set-off;
(iv) such contract or agreement must provide for
immediate 'termination in the event of insolvency of the
provider and for termination upon demand of the Trustee (which
demand shall only be made by the Trustee at the direction of
the Issuer) after any payment or other covenant default by the
provider; and
(v) the terms and provisions of such contract or
agreement and any request for bidding thereon shall'be in form
satisfactory to Bond Counsel.
A repurchase agreement pursuant to paragraph (d) above shall
be made with any bank, savings institution or trust company as
~rincipal, including the Trustee or an affiliate of the Trustee,
within or wit'hout the State having a combined capital, surplus and
undivided profits of not less than $50,000,000 or with any
broker-dealer with retail customers insured by the Securities
Investors Protection Corporation; provided, that the financial
institution or broker-dealer is obligated to repurchase within one
year. Such repurchase agreement shall be considered a purchase of
· such securities even if title and/or possession of such securities
is not transferred to the Trustee or the Issuer so long as (1) the
repurchase obligation of the financial institution or
broker-dealer is collateralized by the securities themselves and
the interest to be paid is secured by collateral of comparable
credit rating to the securities which are the subject of the
-9- 7964M
repurchase agreement, (2) the securities have on each day the
~epurchase agreement is in eff~C~ a fair market value equal to at
least i00% of the amount of the repurchase Obligation of the
· inanc~al institution or broker-dealer (which shall include
principal and interest accrued thereunder), (3) the securities are
free and clear of any lien, charge or encumbrance of any person
other than of the Issuer or the Trustee, (4) the securities are
held ~by a third party and segregated from securities owned
generally by the financial institution or broker-dealer, (5) a
perfected security interest under the Uniform Commercial Code of
the applicable state ~or book-entry procedures prescribed by
federal law in such securities is created for the benefit of the
~ho~ders of the Bonds, and (6) if the repurchase agreement is with
the bank serving as Trustee or any affi
parity holding such securities holds them
of the holders of the Bonds rather than
serving as Trustee or any other party.
With respect to all of the forel
~bligation must be limited to those i~
predetermined ~fixed dollar amount of pr~
that cannot vary or change. If the obliga
not have an "r" highlighter affixed to
should be tied to a single interest rate i
spread, if any, and move proportionately wi
"Issuer" shall mean City of Boynton
successors and assigns.
"Letter of Representations" shall
Representations, dated July 1, 1996,
Trustee ~to the Securities Depository and a
any successor agreements between the Iss~
any successor Securities Depository,
system to be maintained by the Securities
to the Bonds. Notwithstanding any provi:
[iated party, the third
~s agent for the benefit
as agent for the bank
~oing investments, the
~struments that have a
ncipal due at maturity
~ion is rated, it should
its rating. Interest
~dex plus a single fixed
th that index.
~each, Florida, and its
mean the Letter of
)m the Issuer and the
~y amendments thereto or
.er and the Trustee and
ating to a book-entry
Depository with respect
ion of this Indenture,
including Article XI regardin~ amendments, the Trustee may enter
into any such amendment or successor agreei%ent without the consent
.of Bondholders.
"Loan" shall mean the loan from the I~suer to the Borrower to
be made in the manner provided in the Loan Agreement and as
evidenced by the Note and secured by the Mortgage.
"Loan Agreement,' shall mean the Loan Agreement, dated as of
the date .hereof, between the Issuer and the Borrower, including
any amendments thereto as herein permitted.
"Maintenance Reserve Fund" shall mean the Maintenance Reserve
Fund created by Section 501.
-10- 7964M
"Maintenance Reserve Fund Deposit Requirement" shall mean
$8,000.00, per ~a~onth, plus any amount directed in writing by the
Borrowe~ to be,deposited therein from time to time.
"Management 'Fees .and .Expenses" shall mean the amount set forth
each year as management fees and expenses in the Annual Budget
payable to the manager of the ~Project.
"Material Damage" shall mean damage to or destruction of the
Project by fire or other casualty, condemnation thereof or loss
thereof because of failure of {itte, equal in amount to at least
$1,000,000.
"Maximum Annual Debt Service" shall mean, at any time of
,calculation, with respect to all Tax-Exempt Bonds then
Outstanding, the greatest amount of regularly scheduled principal
and interest becoming due on such Bonds in the then current or any
future Fiscal ~ear.
"Maximum 'Corporate Tax ~ate" means the highest marginal tax
rate (expressed as a decimal) applicable to the taxable income of
corporations (as currently set forth in Section 11 of the Code)
without zegard to any increase in tax designated to normalize the
rate for alt ~ncome at the highest marginal tax rate or to phase
out the benefit of graduated tax rates and impose a flat-tax at a
specified rate (for example, the tax imposed by the last two
sentences of Section ll(b)(1) of the Code as in effect on the date
hereof), which rate on the date 'hereof is .35.
"Mortgage" means %he Mortgage and Security Agreement, dated
the date hereof, from the Borrower to the Issuer.
"1996 ~Bonds" shall mean the Bonds authorized by Section 201
hereof.
"1996 Bonds Reserve Account" shall mean the account of that
name in the Debt-Service Reserve Fund created by Section 501.
"Note" shall .mean. the promissory note of the Borrower in the
principal amount of $. in substantially the form attached
as an eXhibit to the Loan Agreement, and any amendments,
supplements or substitutions thereto and therefor as herein
permitted.
"Operatin~ Reserve Fund" shall mean the Operating Reserve Fund
created by Section 501.
"Operating Reserve Fund Requirement" shall mean an amount
equal to one-twelfth of the maximum amount of principal and
interest sCheduled to become 'due on the Bonds in the then current
or any succeeding Bond Year'.
-11- 7964M
"Opinion Qf Counsel" shall mean a written opinion of an
'attorne~ or firm .of attorneys, who may be counsel for the Issuer
-or the ~Bo~rower but shall not be a full time employee of any of
the Issuer, the Borrower or the Trustee..
"Paying Agent" shall mean the Trustee as paying agent for the
~Bonds or aay sucCessor appointed pursuant to Section 1008.
"Payment of the iBonds" shall mean payment in full of principal
.of, premium, if any, and interest on the Bonds or provision for
such payment sufficient to discharge this Indenture as provided
herein.
"Principal Account" shall mean the account of that name in the
Bond Fund created by Section 501.
"Principal Office" shall mean, with respect to the Trustee,
~office designated in or pursuant to Section 1304 hereof.
Project" Shall mean Clipper Cove Apartments, a 384 unit
muIti-family residential housing project located on the Land
described in Exhibit A to the Mortgage.
"Project Fund" shall mean the Project Fund created by Section
601.
"Rating.Agency" shall mean Standard & Poor's Ratings Services,
a division~of The McGraw-Hill Companies, Inc.
"Rating Agency Fees" shall mean an annual surveillance fee
-~ayable to the Rating Agency of $2,500.00.
'Rebate Amount" shall mean the rebate amount for the
Tax-Exempt Bonds, determined in accordance with Section 148 of the
Code and Treasury Regulation 1.148-3.
"Rebate Analyst" shall mean a firm of rebate analysts,
nationally .recognized in the performance of the computation of
rebate relating to tax-exempt obligations, such firm to be chosen
iby %he Borrower.
"Rebate Analyst Fee" shall mean the fee charged by a Rebate
Analyst, such fee to be for calculation of rebate due, if any, in
an amount not to exceed $5,000.00 on January 1, 2001 and $5,000.00
every 5 years thereafter so long as rebate calculations need to be
made.
"Rebate Fund" shall mean the Rebate Fund created by Section
501.
· 'Requisition" shall mean a request for a disbursement from the
Project Fund which shall be in the form of Exhibit B hereto.
-12- 7964M
"Restrictive Covenants" shall mean those certain restrictive
.covenants and agreements placed on the Project in the form
attached as Exhibit C to the Loa~ Agreement, as the same may be
amended in accordance with the ProVisions hereof.
"Revenue Fund" shall mean the Revenue Fund created by Section
501.
"Sale" means %he direct or indirect sale, assignment,
transfer, conveyance or other disposition of the Project or any
pa~t thereof or interest therein or any interest in the Borrower.
"Securities Depository" shall mean initially The Depository
Trust Company and any successor depository for the 1996 Bonds as
provided in Section 202.
"Security Deposits" means all moneys received from or on
behalf of tenants and retained in escrow by the Borrower as tenant
security deposits.
"Series" or "Series of Bonds" shall mean the 1996 Bonds and
any designated Series of Bonds iss~[ed pursuant to Section 213.
"Social Services Fee- shall ~ean the fee of 1.25% of Gross
Revenue per ~month paid or due t(t (i) Housing Partnership, Inc.
pursuant to that .certain Management and Coordination of Social
Services Delivery Contract, dated December 19, 1995, as amended,
between the Borrower and HOusing Partnership, Inc. or (ii) Housing
Par~tnership, Inc. or any other ~ntity pursuant to an agreement
provided ~o the Trustee together with an opinion of Bond Counsel
to the effect that payment of such Social Services Fee pursuant to
such agreement will not adversely affect any exclusion from gross
income for federal income tax purposes of interest on the
tax-exempt bonds.
"Social Service Provider" shal~ mean Housing Partnership, Inc.
or such other entity as shall be entitled to receive the Social
Services Fee.
"State" shall mean the State of Florida.
"Surplus Fund'" shall mean the Surplus Fund created by Section
501.
"Tax-Exempt Bonds" shall mean the 1996 Bonds and any
Additional Bonds the interest on which is excludable from gross
income for federal income purposes.
"Tax/Insurance Account" shall mean the Tax/Insurance Account
in the Expense Fund created by Section 501.
-13m 7964M
"Tax/Insurance Requirement" shall mean one-twelfth of the
amount shown in %he Annual Budget as necessary for the payment of
~roperty taxes, ~ayments in lieu of taxes and insurance premiums
in eac~h Fiscal Year.
"Trustee" shall mean The Bank of New York acting by and
~hrough The Bank of New York Trust Company of Florida, N.A., it
agen~t~ or its successors serving as such hereunder.
"Trustee Fees .and Expenses" shall mean the fees and expenses
-of %he Trustee incurred pursuant to this Indenture not to exceed
$ annually prior to an Event of Default, excluding any
counsel fees, but such $' amount may be increased with the
consent of the Borrower, after the end of the term during which
such initial fees are effective, annually for inflation at a
percentage not to exceed the percentage increase in net rental
income for the immediately preceding year.
"Underwriters"
St~el Nicotaus
Associates, Inc.
shall mean Wheat, First
Company Incorporated and
Securities, Inc.,
Raymond James &
Section 102. Rules of Construction. Unless the context
~clearly indicates to the contrary, the following rules shall apply
.the construction of this Indenture:
(a) Words importing the singular number shall include the
plural number and vice versa.
(b) Words importing the redemption or calling for redemption
of Bonds shall not be deemed to refer to or connote the payment of
Bonds at their stated maturity.
(c) Ail accounting terms not defined herein shall be defined
in accordance with GAAP.
(d) Ail references herein to particular articles or sections
are references to articles or sections of this Indenture unless
otherwise noted.
(e) ~The headings herein are solely for convenience of
~eference and shall not constitute a part of this Indenture nor
shall they affect its meaning, construction or effect.
(f) This Indenture shall be construed for the benefit of the
Borrower and the Issuer to the extent not inconsistent with the
rights of t~he Trustee and the Bondholders.
-14- 7964M
ARTICLE II
AUTHORI'ZATI@N, EXECUTION, AUTHENTICATION,
REGISTRATION ~ND DELIVERY OF BONDS
Section 201. Authorization of 1996. Bonds. There are hereby
authorized to be issued the Issuer's Multi-Family Housing Mortgage
Revenue Bonds, Series 1996 (Clipper Cove Apartments) in the amount
of. Million Hundred Thousand Dollars
($ ).
.Section 282. Details of 1996 Bonds; Provisions on Interest
and Payment. The 1996 .Bonds shall be dated July 1, 1996, shall be
issuable as fully registered Bonds without cou'pons in the
denomination of $'5,0~00 or any integral multiple of $5,000 in
.excess thereof.
The 1996 Bonds shall be numbered R-1 upward, shall bear
inter~st :payable on each Interest Payment Date at the rates,
subject to adjustment as provided in Section 215 hereof, and shall
mature on the dates and in the amounts as provided below:
Date Amount Rate
$ %
Each I996 Bond shall bear interest from the Interest Payment
Date next preceding the date on which it is authenticated, unless
.such 1996 Bond is (a) authenticated before the first Interest
Payment DaCe following the initial delivery of 1996 Bonds, in
which case it shall bear interest from its date, or (b)
authenticated upon an Interest Payment Date, in which case it
shall bear interest f~om such Interest Payment Date; provided,
however, that if at the time of authentication of any 1996 Bond
interest is in default, such 1996 Bond shall bear interest from
:the date to which interest has been paid. Interest on the 1996
Bonds shall be calculated on a 360-day year of twelve 30-day
months.
Principal of and premium, if any, on the 1996 Bonds shall be
payable at the designated office of the Trustee (initially, New
York, New York). Principal and premium, if any, shall be payable
upon presentation and surrender of the 1996 Bonds as the same
become due. Interest on the 1996 Bonds shall be paid to the
persons in whose name the 1996 Bonds are registered at the close
of business of the fifteenth day (whether or not a Business Day)
of the month next preceding an Interest Payment Date by check
mailed by the Paying Agent on the Interest Payment Date to such
-15- 7964M
persons at t~heir addresses as they appear on the registration
books. Tf .any 1996 Bond is not paid upon presentment when due
(.whether ~at maturity, by acceleration or call for redemption or
o~her~ise), such 19'96 Bond shall continue to bear interest until
pa~d at the rate specified thereon. Principal, premium, if any,
and ~in%er.e-st ion the 1996 Bonds shall be payable in lawful money of
~%he United States of America.
The Depository Trust Company ("DTC"), New York, New York, will
a'c~ ~as Securities Depository for the 1996 Bonds. The Issuer and
t'he Trustee have entered into a Letter of Representations with
DTC. ~Upon the issuance of the 1996 Bonds, one fully-registered
t996 .Bond 'for each maturity will be registered in the name of Cede
'~ Co., as nominee for DTC. So long as Cede & Co. is the
~egistered ~owner of the 1996 Bonds, as nominee of DTC, references
herein to the ~owners ~of the 1996 Bonds or registered owners of the
%996 ~onds shall mean Cede ~ Co. and shall not mean the Beneficial
Owners of the 1996 Bonds.
DTC may determine to discontinue providing its service with
respect t~o the 1996 Bonds at any time by giving written notice to
t~he Issuer and the Trustee and discharging its responsibilities
with respect thereto under applicable law. If there is no
successor Securities Depository appointed by the Issuer, the
Issuer-shall deliver 1996 Bonds to the Beneficial Owners thereof
{pursuant to ~Section 207. The Issuer, at the direction of the
Borrower, shall discontinue participation in the system of
~book-entry transfers through DTC (or a successor Securities
Depository) at any time by giving written notice to DTC not less
~han thirty (30) days prior to termination of such participation
(or a successor Securities Depository). In such event, the Issuer
will deliver 1.996 Bonds to the beneficial owners thereof pursuant
to Section 207..
Section 203. Execution of Bonds. The Bonds shall be signed
by the manual or facsimile signature of the Mayor or Vice Mayor of
the .Issuer, and the Issuer's seal shall be affixed thereto or a
facsimile thereof printed thereon and attested by the manual or
.facsimile signature of the Issuer. In case any officer whose
signature or a facsimile of whose signature shall appear on any
Bond shall cease to be such officer before the delivery of the
Bonds, such signature or such facsimile shall nevertheless be
valid and sufficient for all purposes as if he had remained in
~ffice until such delivery. Any Bond may bear the manual or
facsimile signature -of such persons who at the actual time of the
execution thereof shall be the proper officers to sign such Bond
although at .the date of such Bond such persons may not have been
such officers.
Section 204. Authentication of Bonds. The Bonds shall bear a
certificate of authentication, substantially in the forms attached
to ~he forms of Bonds attached hereto, duly and manually executed
by ~he Trustee. The Trustee shall authenticate each Bond with 'the
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.signature of an authorized signatory of the Trustee but it shall
not be necessary for the same signatory to authenticate all of the
Bonds of any series. Only such authenticated Bonds shall be
entitled to any right or benefit under this Indenture and such
certificate on any Bond issued hereunder shall be conclusive
evidence that the Bond has been duly issued and is secured by the
-provisions hereof.
Section 205. Form of the 1996 Bonds The 1996 Bonds shall be
in substantially the form attached hereto as Exhibit A, with such
appropriate variations, omissions and insertions as are permitted
or required ~by this Indenture.
.Section 206. Delivery of the 1996 Bonds. The Trustee shall
.authenticate and ~eliver the 1996 Bonds when there have been filed
with or received by it the following:
(a) A certified copy of the resolution of the Issuer
authorizing (1) the execution and delivery of the Loan Agreement,
(2) the execution and delivery of this Indenture, and (3) the
issuance, sale, execution and delivery of the 1996 Bonds.
(b) Original execut~ed counterparts of the Loan Agreement and
the Indenture.
(c) The original executed Note, assigned by the Issuer to the
Trustee, and san original executed counterpart of the Mortgage.
(d) The mortgagee title insurance policy, or a duly endorsed
commitment therefor, required by the Mortgage.
(e) A written opinion of Bond ~Counsel that the issuance of
the 1996 .Bonds ~as ~been duly authorized, that the 1996 Bonds are
valid and binding limited obligations of the Issuer, that interest
on -the 1996 Bonds is excluded from gross income of the Owners
~thereof ~for Federal income tax purposes and that interest on the
19'96 Bonds ~s ~exempt from the intangible personal property tax
imposed by the State.
(f) ~A written opinion of counsel to the Borrower that the
Note, the Loan Agreement, the Mortgage and the Restrictive
Covenants have been validly authorized, executed and delivered by
the Borrower and are enforceable against the Borrower in
accordance with their respective terms, that the Borrower is a
501(c)(3) organization within the meaning of the Code and that
based upon a certification as to factual information provided by
the Borrower no portion of the Project is being used in an
"unrelated trade or business" of the Borrower within the meaning
of Section 513 of the Code.
(g) A certificate of the Borrower, substantially similar to
~Exhibit C, establishing the net operating income projections for
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the ~rojec% for 1996 based upon the
~J~anua~y 1 ~hrough April 1 statistics.
annualization of
actual
(h) A ~certificate from the Underwriters that the I996 Bond
Coverage Ratio is met using the interest rates established by the
sale o'f the 1996 Bonds, the guaranteed investment contracts for
investment of the 1996 Bonds R~Serve Account and the Operating
Reserve Fund, the scheduled debt service payments on the 1996
Bonds and the Borrower's certificate provided pursuant to
paragraph (g) above.
(i) A certificate of the ~orrower that the insurance required
by the Mortgage is in effect together with proof of such insurance
coverage and payment of insurance premiums due and payable as of
the-date of-the issuance of the 1996 Bonds.
(j) A certificate of the, Borrower that the proper amounts
have 'been funded Ko %he Tax/Insurance Account to provide for the
necessary insurance premiums due as of the date of the issuance of
the 1996 Bonds'.
(k) A certificate of the 'Borrower as to the amount of
I i .~
Security Deposits and the ocgtlon of the Security Deposit funds
and a certification of the Borrower that all Security Deposits are
kept in a segregated bank account in accordance with all
~provisions of 'State law.
(1) A request and authorization of the Issuer, signed by the
Mayor ~or Vice-Mayor of the Issher, to the Trustee to authenticate
and deliver the 1996 Bonds to such person or persons named therein
upon payment to the Trustee flor the account of the Issuer of a
specified sum plus accrued interest to the date of delivery.
Section 207. RegistratiQn~ of Bonds; Persons Treated as
~Owners. The Trustee shall m~inltain registration books for the
~registrat.ion and the registra'~ion of transfer of the Bonds, and
the transfer of any Bond may [be registered only upon such books
~upon surrender thereof to the ~rustee together with an assignment
duly executed by the registered owner in person or by his duly
authorized attorney-in-fact or legal representative. Upon any
such transfer, %he Issuer sh~ll execute and the Trustee shall
authenticate and deliver ini exchange for such bond a new
registered bond or bonds of ~he same series,
name of the transferee, of !an~ denomination registered in the
or denominations
authorized by this Indenture.
Prior to due presentment ~or registration of transfer of a
~Bond ~he Trustee Shall treat ~hei registered owner thereof as the
· only person entitled to payment thereon and the exercise of all
other rights and powers o~ the owner, except that all interest
~ayments shall ~be .made Ko the reg~stered owner as of the fifteenth
day of the month preceding each I~terest Payment Date.
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Section 2:08. -Exchange of Bonds. Upon surrender thereof at
%he Princ.i~al Office :~of the Trustee, together with an assignment
duly executed ~by the registered owner or his duly authorized
attorney-in-fact or ~eg~l representative, Bonds of any Series may,
at the o~tio~n of the Owner., be exchanged for an equal aggregate
principal amount ~of Bonds of .the same series and of the same
maturit~ ~f ~authorized denominations as requested by the Owner
thereof or his dut~ authorized attorney-in-fact or legal
representative. The Issuer shall execute and the Trustee shall
authe;n~icate any Bonds whose execution and authentication is
necessary to provide for exchange of Bonds pursuant to this
sec%ion.
.Section 209. Charges for Exchanqe and Registration. Any
exchange or ~egistration of 'transfer of any Bond by any owner
thereof Shall !De at the expense .of the Borrower, except that the
Trustee shall make a charge to :aRy Bondholder requesting such
exchange, ~egi~tration or discharge in the amount of any tax or
· o~her governmental charge required to be paid with respect thereto.
Section 210~ Temporary 'Bonds. Prior to the preparation of
Bonds i~n :definitive form, the: Issuer may issue temporary bonds in
~egiste,red form and in such denominations as the Issuer may
determine, :but otherwise in substantially the forms attached
hereto., with ~appropr.iate variations, omissions and insertions.
The Issuer shall promptly prepare, execute and deliver to the
Trustee ~efore ~he first Interest Payment Date Bonds in definitive
form and thereupon, upon presentation and surrender of Bonds in
temporar~ form, the Trustee shall authenticate and deliver in
exchange therefor Bonds in definitive form of the same aggregate
principal amount. Until exchanged for Bonds in definitive form,
Bonds in ~%emporar¥ form shall ~e entitled to the lien and benefit
of this ~ndenture.
Section 211. Mutilated, Lost or Destroyed Bonds. ShoUld any
Bond become mutilated or be lost or destroyed, the Issuer shall
cause to be executed, and ~he Trustee shall authenticate and
deliver, a new Bond of like date and tenor and of the same series
in exchange and substitution fo~, and upon cancellation of, such
mutilated Bond or in lieu of and in substitution for such lost or
destroyed Bond; provided, however, that the Issuer and the Trustee
shall so execute, authenticate and deliver only if the holder has
paid ~he r.easonable expenses and charges of the Issuer and the
Trustee in connection therewith and, in the case of a lost or
destroyed Bond, ~as furnished to the Issuer, the Borrower and the
Trustee indemnity satisfactory to the Trustee. If any such Bond
shall ha~e matured, instead of authenticating and delivering a new
Bond %he Trustee may pay ~he same without surrender thereof
· Section 212. Cancellation and Distribution of Bonds. Ail
Bonds Which ~have been paid {whether at maturity, by acceleration
or call for zedemption or otherwise) or delivered to the Trustee
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'by the Borrower for cancellation shall not be reissued, and the
Trustee shall, ,unless otherwise directed by the Issuer, cremate,
shred or other.wise dispose of such Bonds. Upon request, the
Trustee shall deliver to the Issuer and the Borrower a certificate
of any such cremation, shredding .or other disposition of any Bond.
Section 213. Issuance ~of Additional Bonds. (a) Subject to
receipt by the Trustee of the documents listed in Section 213(c),
upon the request .of the Borrower, the Issuer may issue one or more
Series of Additional Bonds for the purposes set forth in Section
213(b). EaCh .such Series of Additional Bonds shall be issued
pursuant to a supplement to this Indenture and shall be equally
and ratably secured ~under this Indenture with all other Series of
Bonds issued ~hereunder, without preference, priority or
distinction of any Bonds over any other Bonds; provided, that a
reserve account for a Series of Bonds shall secure only that
Series of Bonds for which such reserve account wss created.
Unless provided otherwise in a supplement to this Indenture, all
such Additional .Bonds shall be in substantially the form of the
1996 -Bonds, ~but shall bear such date or dates, bear interest at
such rate or rates, mature on such dates and in such amounts, have
such redemption dates and redemption premiums, contain an
appropriate Series designation, and be issued at such prices as
shall be approv.ed by the Issuer and as set forth in a supplemental
indenture adopted pursuant to Section ll01(e) hereof. For so long
as any 1996 Bonds are rated by the Rating Agency, no Additional
Bonds may be issued without written evidence from the Rating
Agency that s~ch rating of the 1996 Bonds will not be reduced or
~withdrawn as a consequence of the issuance of the Additional Bonds.
(b) Additional Bonds msy be issued (i) to pay the costs
of adding %0, renovating, repairing, improving and equipping the
Project when the ~costs are of such nature as to be chargeable to a
fixed capital account by GAAP, (ii) to refund any Bonds previously
issued by the Issuer, (iii) to provide working capital for the
Borrower or (iv) for any combination of such purposes.
(c) The Trustee shall authenticate
Additional Bonds only upon receipt of the following:
and deliver
(i) A certificate of the Borrower dated as of the
date of delivery of such Series of Additional-Bonds, signed by an
Authorized Representative of the Borrower, either (1) stating that
as .of the date of such certificate, to the best of the signer's
knowledge after due investigation, no event or condition is
happening or existing which constitutes an Event of Default or (2)
if any such event or condition is happening or existing,
specifying such event or condition, stating that the Borrower will
act with due diligence to correct such event or condition after
.the issuance of such Additional Bonds and describing, in detail
reasonably acceptable to the Trustee, the actions to be taken by
the Borrower toward such correction.
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.... A certified copy of a resolution or resolutions
(ii)
of t.he Issuer
(1) authorizing the execution and delivery of a
supplement %o t~his Indenture and an amendment to the Loan
Agreement,
(2) authorizing the issuance, sale,
execution arid delivery of such Additional Bonds,
award,
~(3) specifying the interest rate or rates, maturity
date or dates, amounts maturing on such date or dates, initial
interest .payment date and redemption provisions for the
Additional Bonds, and
(4) stating, if applicable, the terms and
conditions regarding the redemption or repayment price of any
obligations to be refunded or refinanced, the amount of the
interest accruing thereon to the date fixed for redemption or
repayment and the source of payment thereof, the expenses
incidental to such redemption or repayment and the source of
payment thereof, and any other applications of the proceeds of
Additional Bonds issued for the purpose of such refunding or
refinancing.
(iii) An endorsement to the mortgagee title insurance
policy issued pursuant to the Mortgage, increasing the coverage
thereof to an amount equal to the then outstanding principal
amount of the Bonds, including the Additional Bonds.
(iv) An original executed counterpart of a
supplement to this Indenture authorizing the issuance and
providing for the details of such Additional Bonds and an original
executed counterpart of an amendment to the Loan Agreement
pursuant to which the Borrower agrees to make payments thereunder
in amounts sufficient to make all payments on the Additional Bonds.
(v) The original, executed, amended Note, assigned
by the Issuer to the Trustee and an original executed counterpart
o'f a modification to the Mortgage.
{vi) If any such Additional Bonds are issued for the
purpose described in Section 213(b)(i), a written statement from
an engineer, ~rchitect or other knowledgable professional selected
by the Borrower:
(1) giving an estimate of the cost of adding to,
renovating, repairing, improving and equipping the Project
(including all financing and related costs) and the date on
which such adding to, renovating, improving and equipping of
the Project are likely to be completed; and
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(2) stating an opinion that the proceeds of such
Additional Bonds, together with any monies identified and
av~ilaDle for such purpose, will be sufficient to pay the cost
of completing the additions, renovations, repairs,
improvements and/or equipping.
(vii) If Additional Bonds are issued for the purpose
described in.Section 213(b)(ii), the following:
(1) an opinion of Bond Counsel to the effect that
provision for the payment or prepayment of all indebtedness to
be refunded or refinanced has been made in accordance with the
requirements of Article VIII hereof; and
(2) a written report of an independent certified
public accountant or other knowledgable professional selected
~by the Borrower that the proceeds (excluding accrued interest)
of suc.h Additional Bonds, together with any other monies
deposited with the Trustee or an escrow agent for such purpose
and the investment income to be earned on the defeasance
obligations held for the payment or prepayment of such
indebtedness, shall be sufficient to pay, whether upon
prepayment of such indebtedness or at maturity, the principal
of and premium, if any, and interest on the indebtedness to be
refunded or refinanced and the estimated expenses incident to
such refunding or refinance.
(viii) An opinion of Bond Counsel that the issuance of
such Additional Bonds is permitted under the te'rms of this
Indenture and 'has been duly authorized.
(ix) A request and authorization of the Issuer,
signed ~by its Mayor or Vice Mayor, to the Trustee to authenticate
and deliver such Additional Bonds to the initial purchaser named
therein upon payment to the Trustee for the account of the Issuer
of .~ specified sum.
(x) If any 1996 Bonds are then rated, written
evidence from the Rating Agency that the issuance of the
Additional Bonds will not cause the rating on such 1996 Bonds to
be reduced or wit~hdrawn.
Se~ction 214. ~Application of 1996 Bond Proceeds and Additional
Bond ~Proceeds. Simultaneously with the delivery of the 1996
Bonds, the proceeds (including accrued interest) of the 1996
Bonds, together with $ provided by the Borrower not from
Bond proceeds (the "Equity") shall be applied by the Trustee as
follows:
(a) to the credit of the
(which includes the Equity);
Cost of Issuance Fund
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(b) to the credit of the Interest Account, $
~consi~ting ~f the amount received as pre-issuance accrued interest
the 2996 Bonds;
(c)
$ ;
to the credit of the 1996 Bonds Reserve Account
~(d) to the credit of the Operating Reserve Fund $
'(e) to ~the credit of the Maintenance Reserve Fund $ ;
(f)
to the credit of the Tax/Insurance Account $ ;
and
(g) to the credit of the Project Fund created for the
1996 Bo.nds, $ , which is the remainder of the proceeds of
'the 1996 Bonds.
The proceeds of Additional Bonds shall be applied as set
forth in the supplemental indentures pursuant to which such
Additional Bonds are issued.
Section 215. Adjustment to Interest Rate. Upon the
occurrence of a .Determination of Taxability, the interest rates
otherwise borne by the 1996 Bonds shall be increased, but not
decreased, to rates determined by the Borrower (in a certificate
delivered to the Trustee) by multiplying the rates Otherwise borne
by the 1996 Bonds (from and after the Determination of Taxability)
~by a fraction, the numerator of which is one and the denominator
of which is one .minus the Maximum Corporate Tax Rate as of the
date of the Determination of Taxability, provided that if such
fraction is less than one, then no interest rate adjustment shall
be made.
ARTICLE III
REDEMPTION AND TENDER OF BONDS
Section 301. Redemption Dates and Prices. BOnds, other than
%he 1996 Bonds, may not be called for redemption by the Issuer
except as provided in the supplemental indentures pursuant to
which such ~Bonds are issued. The 1996 Bonds may not be called for
redemption by the Issuer except as provided below:
(a) The 1996 Bonds are subject to redemption by the Issuer at
the option and direction of the Borrower, in whole but not in
part, at a redemption price of 100% of the principal amount
thereof plus accrued interest to the redemption date at any time
within 365 days after the occurrence of a Determination of
Taxabil~ity.
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(b) The 1996 Bonds are required to be redeemed by the Issuer
in whole -or in part at the earliest practicable date at a
redemption price of 100% of the principal amount thereof to be
redeemed plus accrued interest to the redemption date if, after
Material Damage, the Borrower shall elect not to repair or restore
the Project to substanti~ally the same condition as prior to such
Material Damage; provided no such partial redemption shall be
permitted unless such partial redemption will not affect the
outstanding rating on the 1996 Bonds.
(c) The 1996 Bonds are subject to redemption by the Issuer at
the option and direction of the Borrower, on or after January 1,
2006, in whole on any date, or in part on any Interest Payment
Date, at the following redemption prices (expressed as
percentage of the principal amount to be redeemed) plus accrued
interest to the redemption date:
Date
Redemption Price
January 1, 2006, to and including December 31, 2007
January 1, 2007, to and including December 31, 2008
January 1, 2008, and thereafter
102%
101%
100%
(d) As and for a sinking fund for the retirement of the 1996
Bonds maturing on January 1, (the "__ Term 1996 Bonds")
the Issuer shall redeem Term 1996 Bonds on the dates set
forth below in the principal amounts respectively set forth
opposite such dates at a redemption price of 100% of the principal
amount of the Term 1996 Bonds to be redeemed plus accrued
interest to the redemption date:
Date Amount
As and for a sinking fund for the retirement of the 1996 Bonds
.maturing on , (the " Term 1996 Bonds"), the
Issuer shall redeem Term 1996 Bonds on the dates set forth
below in the principal amounts respectively set forth opposite
such dates at a redemption price of 100% of the principal amount
of the Term 1996 Bonds to be redeemed plus accrued interest
to the redemption date:
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Date
Amount
As and for a sinking fund for the retirement of' the 1996
Bonds maturing on 1, (the" Term 1996 Bonds"),
~the Issuer shall redeem Term 1996 Bonds on the dates set
forth below in the principal amounts respectively set forth
opposite such dates at a redemption price of 100% of the
principal amount of the Term 1996 Bonds to be redeemed plus
accrued interest to the redemption date:
Date Amount
As and for a sinking fund for the retirement-of the
Term 1996 Bonds maturing on 1, (the " Term
1996 Bonds"), the Issuer shall redeem Term 1996 Bonds on
%he .dates set forth below in the principal amounts respectively
set forth opposite such dates at a redemption price of 100% of
the principal amount of the Term 1996 Bonds to be redeemed
plus accrued interest to the redemption date:
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Date
Amount
$
*Final MatUrity.
(e) On or before the sixtieth day next preceding any sinking
fund redemption date the Borrower on behalf of the Issuer, may
(1) cause to be paid to the Trustee for deposit in the
Bond Fund, as an advance payment under the Note, such amount as
the Borrower may determine, accompanied by a certificate directing
the Trustee to apply such amount on or before such sixtieth day
thereafter to the purchase of 1996 Bonds and the Trustee shall
thereupon use all reasonable efforts to expend such funds as
nearly as may be praCticable in the purchase of such 1996 Bonds at
a price not exceeding the principal amount thereof and the
applicable premium for optional redemption of such 1996 Bonds plus
accrued interest to such sinking fund redemption date or maturity
date; or
(2) deliver to the Trustee for cancellation 1996 Bonds
in any aggregate principal amount desired and receive a credit
against its sinking fund redemption obligation or maturity date
obligation for such 1996 Bonds of the same maturity.
Each 1996 Bond so purchased, delivered or previously redeemed
shall be credited by the Trustee at 100% of the principal amount
thereof against the obligation of the Issuer on such sinking fund
redemption date with a corresponding credit on amounts otherwise
due on the Note. Any excess over such obligation shall be
credited against future sinking fund redemption obligations pro
rata, as nearly as practicable, in chronological order, and the
principal amount of such 1996 Bonds to be redeemed by operation of
the sinking fund or to be paid upon maturity shall be accordingly
reduced. AnY funds received by the Trustee pursuant to clause (1)
above but not expended as provided therein for the purchase of
1996 Bonds on or before said sixtieth day shall be retained in the
Bond Fund and shall thereafter be used only for the purchase of
1996 Bonds or as a credit against future sinking fund obligations
or maturity date obligations on the 1996 Bonds on a pro rata
amount of each maturity outstanding to the extent otherwise
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~payable out of payments thereafter becoming due under the Note and
applied to the redemption of 1996 Bonds pursuant to this section.
Section 302~ Manner of Redemption. If less than all of the
Bonds of a Series are to be redeemed, the particular Bonds or
portions thereof to be called for redemption shall be selected by
the TrUstee fro.m ~each maturity thereof on a pro rata basis, as
nearly as practicable, based~upon the outstanding principal of the
serial and term Bonds of such Series. In any event, (a) the
portion of any Bond to be redeemed shall be in the principal
amount of '$5,000 or an integral multiple thereof, and (b) in
selecting Bonds for redemption, each Bond shall be considered as
representing ~tha't number of Bonds which is obtained by dividing
the principal amount of such Bond by $5,000. If a portion of a
Bond shall be called for redemption, a new Bond in principal
amount equal to the unredeemed portion thereof shall be issued to
the BondhOlder upon the surrender thereof.
The Trustee will apply any prepayments on the Note or any
other money deposited with the Trustee accompanied by instructions
that it is to be applied to the redemption of Bonds pursuant to
~ection 301(c) ~hereof on the earliest practicable date for which
timely notice can be given after the Trustee's receipt of such
~prepayment.
Section 303. Notice of Redemption. The Trustee shall send to
the registered owner of each Bond to be redeemed notification
.%hereof which .notice shall (1) specify the Bonds to be redeemed,
the redemption date, the redemption price and the place or places
where amounts due upon such redemption will be payable (which
shall be the Principal Office of the Trustee) and, if less than
all of the Bonds are to be redeemed, the numbers of the Bonds and
the portions of Bonds to be redeemed, (2) state any condition to
such redemption and {3) state that on the redemption date, and
upon the satisfaction of any such condition, the Bonds to be
redeemed shall cease to bear interest. Unless such notice states
it is conditional as described below, the Trustee shall not send
any notice of redemption for redemptions pursuant to Sections
301(a), (b) or (c) unless there shall be on deposit with the
Trustee in the applicable accounts in the Bond Fund monies
sufficient to pay the principal of, premium, if any, and interest
.%0 the redemption :date on, the 1996 Bonds permitted to be
~redeemable and to be called for redemption pursuant to those
respective Sections. Such notice may set forth any additional
information relating to such redemption. Such notice may state
that the redemption is subject to conditions, including but not
limited to, the availability of funds to pay the applicable
redemption ~price of Bonds to be redeemed. Such notice shall be
given by mail not less than thirty (30) days nor more than sixty
(60) days prior to the date fixed for redemption (a) by first
class mail to the owner of each such Bond to be redeemed, at his
address as it appears on the registration books of the Trustee,
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(b) to all orga~nizations registered with the Securities and
~Exchange Commission as securities depositories as provided in a
certificate of the Borrower .delivered to the Trustee, and (c) to
at 'least one information .service of national recognition which
disseminates securities redemption information with respect to
tax-exempt securities. In preparing such notice, the Trustee
shall take into account, to the extent applicable, the prevailing
tax-exempt securities industry standards. Failure to give any
notice specified in (a) or any defect therein, shall not affect
the validity of any proceedings for the redemption of any Bonds
with respect to which no such failure has occurred, and failure to
give any notiCe specified in (b} or (c), or any defect therein,
shall not affect the validity of any proceedings for the
redemption of any Bonds with respect to which the notice specified
~n Ca) is correctly given and shall not give rise to any liability
on %he part of the Trustee to the Issuer, the Borrower or any
bondholder. Any notice mailed as provided herein shall
conclusively be presumed to have been given whether or not
actually received by any Bondholder. Provided funds for their
redemption are on deposit at the place of payment on the
redemption date, all Bonds or portions thereof so called for
redemption shall .cease to bear interest on such date, shall no
longer .be secured by the Indenture and shall not be deemed to be
outstanding und.er the provisions of the Indenture.
Section 304. Mandatory Tender of Tax-Exempt Bonds. At any
time the Tax-EXempt Bonds are subject to redemption pursuant to
Section 381(a), 301(b) or 301(c) hereof, the Tax-Exempt Bonds may
be subject to mandatory tender, in whole but not in part, to the
Trustee for purchase by t.he Borrower's designee, at a tender price
equal to the principal amount thereof, plus accrued interest to
the tender date, plus aay premium that would apply were such
Tax-Exempt Bonds to be called for redemption on the tender date
pursuant to Section 301(a), 301(b) or 301(c), as applicable.
Notwithstanding any other provision of this Section 304, the Bonds
shall not be subject to mandatory tender at any time after s
notice of redemption of such Bonds pursuant to Section 301(a),
301(b), or 301(c) hereof shall have been sent and prior to the
applicable redemption-date.
In order to exercise its right to require the Tax-Exempt Bonds
to be tendered, the Borrower shall provide written notice of its
election to exercise such right to the Trustee, at least 20 and
not more than 30 days prior to the tender date, which date shall
'be designated in such notice. On or prior to the tender date
there shall be deposited with the Trustee, by the Borrower's
designee, funds sufficient to pay the tender price of such
principal amount of Tax-Exempt Bonds and the Trustee shall deposit
such funds in a special account which the Trustee is hereby
authorized to create.
The Trustee shall send to the registered owner of each Bond to
be subject to mandatory tender notification thereof, which shall
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specify the Tax-Exempt Bonds to be subject to mandatory tender,
.the tender date, the tender price and the place or places where
amounts due upon such t.ender will be payable (which shall be the
~rincipal Office of the Trustee) and shall state that on the
~ender date~ the Bondholders of the Tax-Exempt BOnds subject to
mandatory tender shall cease to be entitled to any further
interest thereon. Such notice may state that the tender is
subject to conditions, including but not limited to, the
aYailability 'of funds to pay the applicable tender price of Bonds
to-~e tendered. 'Such notice shall be given by mail not less than
~en (10) days nor ~more than thirty (30) days prior to the date
fixed ~or tender by registered or certified mail to the owner of
each 1996 Bond ~o be subject to mandatory tender at his address as
~ appears on ~he registration books of the Trustee. Failure to
give any not~ce <of tender or any defect therein shall not affect
~he validity of any proceedings for the tender of any Tax-Exempt
~ol~ds with ~espect to which no such failure has occurred, and any
notice .ma'iled as provided herein shall conclusively be presumed to
~have been given whether or not actually received by any Bondholder.
On the tender date, Tax-Exempt Bonds subject to mandatory
tender will be deemed to ha~e been purchased whether or not
~del~vered by the ~Bondholder thereof provided funds are on deposit
with the Trustee for the purchase of such Tax-Exempt Bonds. In
~he event funds sufficient to pay the purchase price of all
Tax-Exempt ~Bonds are not on deposit with the Trustee for purchase
of ail Tax-Exempt Bonds on the tender date, the tender shall be
rescinded, and the Trustee shall return all Tax-Exempt Bonds to
the ~tendering Bondholders, and shall also send notice, by first
class mail, to ~he holders of the Tax-Exempt Bonds notifying them
that ~t~he tender has been ~escinded. In the event any Tax-Exempt
Mo~d subject to mandatory tender is not so tendered, the Trustee
will authenticate and deliver a replacement Tax-Exempt Bond of the
same series and of like maturity as the Tax-Exempt Bond not
tendered, ~nd 'bearing a aumber not contemporaneously outstanding,
~and the Taxi'Exempt Bond which was not tendered shall no longer be
Outstanding under this Indenture, except that the Bondholder
:thereof shall be entitled to receive the tender price therefor
upon tender to the Trustee. On the tender date, the Trustee shall
authenticate and register replacement Tax-Exempt Bonds for the
Tax-Exempt Bonds tendered or deemed tendered in the name of the
Borrower or its designee, shall pay the tender price of Tax-Exempt
Bonds .tendered to it from amounts held by it in the special
account .established for such purpose as hereinabove provided, and,
except .for any amounts held by it for Tax-Exempt Bonds deemed
tendered, shall pay to the Borrower or its designee any amount
remaining in ~such special account.
ARTICLE IV
GENERAL COVENANTS AND PROVISIONS
Section 401. Pa_~rmen-t of Bonds. The Issuer shall promptly pay
when due the principal of (whether at maturity, by acceleration or
-29- 7964M
call for redemption or otherwise), premium, if any, and interest
on the Bonds at ~he places, on the dates, from the accounts and in
the manner provided herein and in the Bonds according to the true
intent and meaning thereof; provided, however, that such
obligations are not general obligations of the Issuer but are
limited obligations of the Issuer payable solely from the revenues
and receipts deriv, ed pursuant to the Loan Agreement, including the
NOte and the security therefor, including the Mortgage. Neither
the officers of the- Issuer nor any persons executing the Bonds
shall be liable personally on the Bonds by reason of the issuance
thereof. THE OBLIGATIONS OF THE ISSUER PAYABLE
SOLELY FROM THE NUES AND RECEIPTS DERIVED BY THE ISSUER FROM
THE NOTE AND THEREFOR, WHICH REVENUES AND RECEIPTS
HAVE BEEN AND ASSIGNED TO SECURE PAYMENT THEREOF. THE
BONDS ARE NOT A DEBT OF THE STATE OF FLORIDA OR ANY POLITICAL
SUBDIVISION THEREOF OTHER THAN THE ISSUER.
NO COVENA/qT, 'CONDITION OR AGREEMENT CONTAINED HEREIN
SHALL BE DEEMED TO BE A COVENANT, AGREEMENT OR OBLIGATION OF ANY
PRESENT OR FUTURE OFFICER, EMPLOYEE OR AGENT OF THE ISSUER IN HIS
OR HER INDIVIDUAL CAPACITY, AND NEITHER THE OFFICERS OF THE ISSUER
NOR ANY OFFICER THEREOF EXECUTING THE BONDS SHALL BE LIABLE
PERSONALLY ON THE BONDS OR BE SUBJECT TO ANY PERSONAL LIABILITY OR
ACCOUNTABILITY BT REASON OF THE ISSUANCE THEREOF.
Section 402. Performance of Issuer's Covenants. The Issuer
shall faithfully observe and perform all covenants, conditions and
agreements on its part contained in this Indenture, in every Bond
executed, authenticat,ed and delivered hereunder and in all of its
proceedings pertaining thereto; provided, however, that the
liability of the Issuer under any such covenant, condition or
agreement for any breach or default by the Issuer thereof or
thereunder shall be limited solely to the funds held by the
Trustee pursuant to this Indenture, and the revenues and receipts
derived pursuant to the Loan Agreement, Note and Mortgage. The
Issuer represents that it is duly authorized under the
Constitution and laws of the State, including particularly the
Act, to issue the 1996 Bonds authorized hereby and to execute this
Indenture, to execute and assign the Loan Agreement, Note and
Mortgage and to pledge the revenues and receipts in the manner and
to t'he extent herein set forth; that all action on its part for
the issuance of the 1996 Bonds, the execution and delivery of this
Indenture, the execution and assignment of the Loan Agreement,
Note 'and Mortgage and the pledge of the revenues, receipts and
payments thereunder has been duly and effectively taken (or if
Additional Bonds are issued hereafter pursuant to Section 213,
will be duly taken as provided therein); and that the 1996 Bonds
in the hands of the owners .thereof are and will be valid and
enforceable limited obligations of the Issuer according to the
import thereof.
-30- 7964M
Section 403. Instruments of Further Assurance. The Issuer
shall do, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged and .delivered, such indentures supplemental
hereto and such further acts, instruments and transfers as the
'Trustee may rea~sonably require for the better assuring,
transferring, conveying, pledging and assigning to the Trustee of
all the rights assigned hereby and the revenues and receipts
pledged hereby to the payment of the principal of, premium, if
any, and inker.est on %he Bonds. The Issuer agrees that, so long
as any Bonds are outstanding, should there be a default under the
Loan Agreement or this Indenture, the Issuer will fully cooperate
with the T~ustee and with the Bondholders to the end of fully
protecting the rights and security of the Bondholders.
Section 404. Inspection of Project Books. Ail books and
documents relating to the Project and the revenues derived
therefr.om in the possession of the Issuer or the Borrower shall at
all reasonable times .and upon not less than two Business Days'
prior written notice be open to inspection by such agents as the
Trustee, the Issuer or the Rating Agency may from time to time
designate, provided the costs of such inspection shall be borne by
the Borrower, (i) in .all events if the Trustee is the inspecting
party and (ii) in the event that an Event of Default shall have
occurred and be continuing and/or in the event that the party
requesting such inspection shall not have requested such an
inspection within the preceding 12 months, otherwise the cost of
such inspection shall be borne by the inspecting party.
Section 405. Rights under Loan Agreement, Note and
~Restrictive Covenants. The Trustee, as assignee of the Issuer,
shall enforce all covenants, undertakings and obligations of the
Borrower under the Restrictive Covenants, as provided in Sections
7(a) and 11 of the Restrictive Covenants, provided the Issuer
shall also be able t.o independently enforce the Restrictive
Covenants. The Trustee shall take no action, shall knowingly
permit no action to be taken by others and shall not knowingly
omit to take any action or permit others to omit to take any
action, and the Issuer shall not knowingly take any action,
knowingly permit any action to be taken by others or knowingly
omit to take any action or permit others to omit to take any
action, which action or omission might release the Borrower from
its liabilities or obligations under the Restrictive Covenants or
the Loan Agreement or result in the surrender, termination,
amendment or modification of, or impair the validity of, the Loan
Agreement or the Restrictive Covenants except as specifically
provided herein and therein. The Trustee in its own name or in
the name of the Issuer may enforce all other rights of the Issuer
and all obligations of the Borrower under and pursuant to the Loan
Agreement, and may enforce all rights of the Issuer and all
obligations of the Borrower under and pursuant to the Note, for
and on behalf of the Bondholders, whether or not the Issuer is in
default hereunder; provided, however, the Trustee shall have no
dut~ or obligation to monitor the Project, other than as
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specifically agreed to concerning the monitoring of receipt of
~ritten materials required herein. The Trustee shall be entitled
to conclusively rely upon the third party agents referenced in
Sec%ion 1001(~m) herein, the cost concerning which shall be borne
by the Borrower.
Section 406. 'Prohibited Activities. TLe Issuer shall not
knowi permit the use of any amounts received by the Issuer or
the witlh respect to the Bonds in any manner, and shall not
knowingly .take or permit to be taken any other action or actions,
which would cause any Tax-Exempt Bond to be an "arbitrage bond"
within the meaning of Section 148 of the Code or which would
otherwise cause interest on any Tax-Exempt Bonds to become subject
bo Federal income tax. The Issuer shall at all times do and
~perfo.rm all acts and things requested by Bond Counsel that are
necessary or desirable in order to assure that interest paid by
the Issuer on the Tax-Exempt Bonds shall, fOr the purposes of
Federal income tax, be exempt from all income taxation under any
valid provision of law.
Section 407. Reports of Trustee. The Trustee shall make
monthly reports to the Borrower, and upon request, to the Issuer,
of all monies received and expended by it. The Trustee shall
furnish ~o the Issuer upon request (a) a statement of the
aggregate principal amount of the Bonds outstanding as of the date
of such request and (b) such information in the possession of the
Trustee as may be necessary to make any reports as may be required
by the Act or any ~State or federal law, now or hereafter in effect.
The Trustee shall hold all statements and other items received
from %he Borrower pursuant to Section 5.6 of the Loan -Agreement
(the "Borrower Statements") or the Restrictive Covenants (the
"Covenant Reports") during the term of this Indenture. Whenever
the Trustee has actual notice of the occurrence of any of the
following (a "Change"):
(i) There is an Event of Default or any event has occurred
which with the lapse of time or notice or both could become an
Event of ~Default; or
(ii) There is a decree or judgment of a Federal court or
action by the I~nternal Revenue Service which would become, once
final, a Determination of Taxability; or
(iii) Material Dlmmage occurs in such a manner that a redemption
of Bonds pursuant to Section 301(b) is possible;
then the Trustee 'shall send a notice of such Change (a "Change
~otice") to the Rating Agency. The Trustee shall provide copies
of any Borrower Statements, Covenant Reports and Change Notices to
anyone upon request therefor and receipt of an amount equal to the
cost of reproduction and mailing thereof, provided no such costs
-32- 7964M
~wilt ~be assessed on Bondholders (which costs will be reimbursed to
t~he Trustee by %he Borrower).
Section 408. Secondary Market Disclosure. Pursuant to
Section 5.14 of the Loan Agreement, the Borrower has undertaken
all responsibility for compliance with continuing disclosure
requirements, and the Issuer shall have no liability to the
Bondholders or any other person with respect to Securities and
Exchange Commission Rule 15c2-12. The Trustee hereby covenants
and agrees that it will comply with and carry out all of its
responsibilities pursuant to Section 5.14 of the Loan Agreement.
Notwithstanding any other provision of this Indenture, failure of
the Borrower or the Trustee to comply with Section 5.14 of the
~oanAgreement shall not be considered an Event of Default.
(b)
accounts:
ARTICLE V
REVENUES AND FUNDS
Section 501. Establishment of Funds. In addition to the
Project Fund created by Section 601, there are hereby established
with the Trustee the following trust funds and accounts:
(a) Revenue Fund;
Cost of Issuance Fund;
Bond Fund in which there are established the following
(1)
(2)
Interest Account
Principal Account;
(d) Expense Fund in which there are established a General
Ex.pense Account and a Tax/Insurance Account;
(e) Debt Service Reserve Fund in which there is established
the following account (and in which there may be established other
accounts in connection with Series of Additional Bonds):
{1) 1996 Bonds Reserve Account;
(f) Maintenance Reserve Fund in which there are established
the following accounts:
(1) Monthly Deposit Account;
(2) Additional Deposit Account
(g) Operating Reserve Fund;
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(~h) Surplus Fund in which there are established the following
· accounts:
(1) Deposit Account;
(2.) Distribution Account
(i) Rebate Fund.
Section 502. Revenue Fund. The Trustee shall deposit into
the Revenue Fund, as received, all Gross Revenues deposited with
the Trustee by or on behalf .of the Borrower under the terms of the
Loan Agreement. Earnings from investment of the Revenue Fund
shall be retained therein as received. As of the first Business
Day of each month, but not later than the tenth day of such month,
commencing in August., 1996, the Trustee shall make the following
transfers from 'the .Revenue Fund in the following order, subject to
credits as provided in this Article:
(8) To the Rebate Fund, if any, to the extent the Rebate
Analyst .determines pursuant to Section 504 hereof that a Rebate
Amount must be deposited in the Rebate Fund.
(b) To the General Expense Account the amount needed to cause
the amount therein to equal the Expense Requirement and to the
Tax/Insurance Account the amount needed to cause the amount
therein to equal the Tax/Insurance Requirement.
(c) To 'the Interest Account beginning in August, 1996,
one-fifth of ~he difference between the amount that will become
due on t~he 1996 Bonds on January 1, 1997 and the amount deposited
in the Interest Account pursuant to Section 214, and, beginning in
January, 1997, one-sixth of the amount of interest that will
become due on the Bonds -on the next succeeding Interest Payment
Date.
(d) To the Principal Account beginning in January, 1997,
one-sixth of the principal amount of Bonds maturing or subject to
mandatory sinking fund redemption on the next succeeding July 1 or
January 1, as the case may be.
· (~e) Subject %0 the p~ovisi~ns of Section 507(d) hereof, if
the balance in the Debt Service Reserve Fund is less than the
aggregate Debt Service Reserve Fund Requirement, to the accounts
in the Debt Service Reserve Fund the amount necessary to satisfy
the Debt Service Reserve Fund Requirement for all Series of Bonds
secured by an account in t~he Debt Service Reserve Fund PROVIDED
HOWEVER, that if the revenues available to the Trustee for
transfer to the Debt Servi~ce Reserve Fund in any month are no%
Sufficient to satisfy the aggregate amount to be deposited
therein, the Trustee shall deposit such revenues on a pro rata
basis, based upon %.he relative deficiencies from the Debt Service
ReServe Fund Requirements therefor, between all those accounts
therein.
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~f) To the.Monthly Deposit Account of the Maintenance Reserve
Fund the Maintenance Reserve Fund Deposit Requirement.
~(g) If the balance in the Operating Reserve Fund was less
·han the Operating Reserve Fund Requirement as of the immediately
preceding January t, to the Operating Reserve Fund the amount
necessary %o cause the amount therein to equal the Operating
Reserve Fund Requirement.
~h) To the Trustee, the Rating Agency and the Rebate Analyst
the amount of any outstanding Trustee Fees and Expenses, Rating
Agency Fees and 'Rebate Analyst Fees.
!(i) To 'the Asset Manager, the Asset Management Fee, and to
the Social .Service Provider, the Social Service Fee, pro-rata, if
necessary, and
(j) After making the above deposits in each month, any monies
remaining in the Revenue Fund shall be deposited in the Deposit
Account of the Surplus Fund.
Section 503. Expense Fund. The amounts in the Expense Fund
shall be used to pay the Expenses of the Project in accordance
~.with the Annual BUdget. Amounts may be drawn by the Borrower or
its authorized designee (who shall be designated in writing to the
Trustee by the Borrower with evidence of facsimile signature) not
more often than once each week. Any draw request which, when
added to any other request in such month, shall exceed one-twelfth
~of the amount-budgeted in the Annual Budget, shall be contained in
a ~requisition and be accompanied by a disbursement schedule for
the amounts to be paid or reimbursed from such draw and by any
reasonable backup information for the amount in excess of the
budgeted amount for such month. Amounts shall be drawn from the
General Expense Account unless the requisition identifies an
amount ~for property taxes, payments in lieu of taxes or insurance
~premiums, in which case such amount shall be drawn from the
Tax/Insurance Account. tf at any time the amount in either
account in ~he Expense Fund is insufficient for payment of such
amounts, the Trustee shall transfer the necessary additional
amounts ~o such -account in the Expense Fund first from the other
account ~n .%fie Expense Fund, then from the Surplus Fund, then from
the Operating Reserve Fund, and then from the Maintenance Reserve
Fund. Earnings from investment of the Expense Fund shall be
deposited in the Revenue Fund as received.
Section 504. Rebate Fund.
{~) The Trustee shall maintain the Rebate Fund until the
Trustee Shall have received a Rebate Analyst's report concerning
the computation period ending upon the retirement of the last
outstanding Tax-Exempt Bo'nds and until any Rebate Amount in
respect ~hereof shall have been paid.
-35- 7964M
(b) The Borrower shall determine or cause to be determined,
in ~accordance with Section 148 of the Code and applicable Treasury
Regulations promulgated under Section 148(f) of the Code, the
Rebate Amount attributable to the Tax-Exempt Bonds on January 1,
20gt and every five years thereafter and upon the retirement of
any Series of Tax-Exempt Bonds (each a "Computation Period"). The
Trustee and the Issuer may rely conclusively upon the opinions,
calculations, determinations, directions and advice of the Rebate
Analyst, ~copies of all of which opinions, calculations,
de'terminations, directions and advice shall be given to the
Trustee by the Issuer. The Trustee shall deposit from moneys on
deposit in the Revenue Fund into the Rebate Fund the amount
necessary to increase the balance in the Rebate Fund to the
Rebate Amount. If amounts available for deposit in the Rebate
Fu.nd from the Revenue Fund are not sufficient t:o pay the Rebate
Amount, the Trustee will request the Borrower to deposit the
,amount of the deficiency with the Trustee from any monies returned
by the Trustee to the Borrower or from any other source. If for
any Computation Period the amount of money and investments held in
the Rebate Fund exceeds the Rebate Amount for that Computation
Period, the Trustee 'shall deposit such excess to the Revenue Fund.
{c) The Trustee Shall make the following payments from the
money and investments in the Rebate Fund to the United States
Treasury when ~and as indicated below (or on such other payment
date or dates as may be permitted by Section 148 of the Code):
(i) not later than the 60th day following the end of
each Computation Period, an amount equal to 90% of the Rebate
Amount for the Computation Period ending immediately prior to
the date of payment; and,
(ii) not earlier than the date of payment of the last
outstanding Tax-Exempt Bond of a Series nor later than the
60th day thereafter, the amount, if any, which, when added to
amounts previously paid to the United States as Rebate
Amounts, will equal 100% of the Rebate Amount with respect to
the Tax-Exempt Bonds of a Series.
(d) The Trustee shall retain all records that have been
delivered to it of the source of and determination of the Rebate
Amounts required to be deposited and credited to the Rebate Fund,
of the proceeds of any investments of money in the Rebate Fund,
and of the amounts paid to the United States Treasury from the
Rebate Fund for six years after the retirement of the last
outstanding Tax-Exempt Bond.
(e) The Trustee may, in its discretion, establish such
aCcounts within the Rebate Fund established under the Indenture,
and subaccounts within any of such accounts, as the Trustee may
deem necessary or useful for the purpose of identifying more
precisely the sources of payments into and disbursements from such
-36- 7964M
accounts or subaccounts, but the establishment of any such
additional account or subaccount shall not alter or modify any of
the ~equirements of this Indenture with respect to the deposit or
use of money in the Rebate Fund established hereunder or result in
commingling .of funds not permitted hereunder.
(f) 'The Borrower shall prepare or cause to be prepared
Internal Revenue Service Form 8038-T, or such other form as
appropriate, required to accompany any payment of any Rebate
Amount, and t~he Issuer agrees to cooperate reasonably in executing
such form.
Section 505. ~Bond Fund.
~(a) Interest Account. The Trustee shall use amounts in the
{rite-rest Account to make sufficient transfers to the Paying Agent
pay interest on the Bonds as the same becomes due.
(b) Principal Account. The Trustee shall use amounts in the
Principal Account to make sufficient transfers to the Paying Agent
to pay the principal of the Bonds as the same becomes due.
(c) Deficiencies and Excess Monies. In the event the
balances in the Interest Account and the Principal Account are
insufficient for the purposes thereof on a payment date, the
Trustee shall transfer first to the Interest Account and then to
the Principal Account such amounts as may be necessary therefor
first from the Surplus Fund, then from the Operating Reserve Fund,
~hen from the Maintenance .Reserve Fund.
In the event that after making the transfers described in the
ipreceding paragraph, on any date the amount in the Interest
Account shall be insufficient to pay the interest coming due on
· he Bonds, the amount in the Interest Account shall be applied pro
rata to the payments due on the Bonds, and the remaining amount
due wit'h respect to any Series secured by an account in the Debt
~Service Reserve Fund Shall be paid from such account.
In the event that after making the transfers described in the
~preceding paragraph, .on any date the amount in the Principal
Account shall be insufficient to pay the interest coming due on
the Bonds, the amount in the Principal Account shall be applied
~pro rata to the payments due on the Bonds, and the remaining
'amount due with respect to any Series secured by an account in the
~Debt Service Reserve Fund shall be paid from such account.
If on any January 1 or July 1 the balance in the Interest
Account and/or Principal Account (exclusive of the transfers to be
~made to such account on such date) shall exceed the amount payable
on account of interest on the Bonds on such date, the excess shall
be transferred to the Revenue Fund.
-37- 7964M
(8) EarninqS. Earnings from investment of the amounts held
in the Bond Fund shall be deposited in the Revenue Fund as
received.
Section 506. Cost of Issuance Fund. The Trustee shall use
amounts in the Cost of Issuance Fund for payment of Costs of
Issuance of the Bonds, as directed in writing by the Borrower.
For purposes of the Code the Equity shall be deemed allocated to
expenditures from the Cost of Issuance Fund after all other
amounts therein shall have been so allocated. Earnings from any
investment of the Cost of Issuance Fund shall be deposited in the
Revenue Fund. All amounts in the Cost of Issuance Fund on
-October 1, 1996, or sooner, if directed by the Borrower, shall be
transferred to the Borrower, to. the extent of the unspent Equity
and then to the Revenue Fund and the Cost of Issuance Fund shall
be closed.
Section 507. Debt Service Reserve Fund.
(a) The Trustee shall use amounts in the respective accounts
in the Debt Service Reserve Fund to make transfers to the extent
necessary to pay the principal of (whether at maturity or upon
acceleration or redemption) and interest on the Series of Bonds
secured thereby as the same become due if amounts in the Bond Fund
are insufficient therefor after taking into account transfers from
the Revenue Fund, the ~Surplus Fund, the Operating Reserve Fund and
the Maintenance Reserve Fund.
(b) In the event the balance in the respective accounts in
the Debt Service Reserve Fund on any January 1 or July 1 (after
any required transfers on such date) shall exceed the Debt Service
Reserve Fund Requirement therefor, the excess shall be transferred
to the Revenue Fund.
(c) If the balance in the respective accounts in the Debt
Service Reserve Fund falls below the Debt Service Reserve Fund
Requirement therefor, the Trustee shall transfer funds to such
accounts to provide therein the amount of the Debt Service Reserve
Fund Requirement therefor, first to the extent and in the manner
provided in Section 502, from the Revenue Fund, then, on the day
following the application of amounts in the Revenue Fund pursuant
to Section 502, from the Surplus Fund and then from the Operating
Reserve Fund, and then from the Maintenance Reserve FUnd. The
Trustee shall notify the Borrower and the Rating Agency of any of
such transfers.
(d) Notwithstanding the immediately preceding paragraph (c),
if on any January 1 or July 1 the amount in any account in the
Debt Service Reserve Fund is less than the Debt Service Reserve
Fund Requirement therefor solely by reason of a change in the
valuation of invest.ments therein, no transfers to such account
shall be required so long as all investment earnings and amounts
-38- 7964M
in such account remain therein until such account contains the
amount of the Debt Service Reserve Fund Requirement therefor and
on t:he next January 1 or July 1, as the case may be, such account
contains an
Requirement
contain an
Requirement
thereto of
~aragraph.
amount equal to the Debt Service Reserve Fund
therefor; if such account at that time does not
amount equal to the Debt Service Reserve Fund
therefor, the Trustee shall begin the transfers
the amounts required pursuant to the preceding
(e) Earnings from the investment of the amounts on deposit in
any account in the Debt Service Reserve Fund shall be retained
therein to the extent the amount on deposit therein is less than
the Debt Service Reserve Fund Requirement therefor, and otherwise
shall be deposited in the Revenue Fund as received.
Section 508. Maintenance Reserve Fund.
(a) The Trustee shall use amounts in the Maintenance Reserve
Fund as needed in the following order:
(1) to make transfers to the Expense Fund to the
extent the balance therein after transfers thereto from
the Revenue Fund, the 'Surplus Fund and the Operating
Reserve Fund is less than the sum of the Expense
Requirement and the Tax/Insurance Requirement;
(2) to make transfers to the Interest Account and
then to the Principal Account to the extent necessary to
pay interest on and principal of (whether at maturity or
upon acceleration or redemption), the Bonds as the same
may become due, in the event transfers from the Revenue
Fund, the Surplus Fund and the OPerating Reserve Fund are
insufficient for such purpose; and
(3) to make transfers to the Debt Service Reserve
Fund if required by Section 507.
(b) At the direction of the Borrower (which direction shall
be accompanied by a certificate to the effect that it is in
compliance with this paragraph), the Trustee shall use amounts in
{he Maintenance Reserve Fund not utilized pursuant to subsection
(a) to pay the cost of acquiring, constructing and equipping
fixtures, machinery, equipment, furniture, real property and
additions to, or improvements, extensions or enlargements of, the
Project, and the cost of extraordinary maintenance or repairs
(repairs or maintenance not recurring annually), renewals and
replacements and repairs resulting from an emergency caused by
some extraordinary occurrence; provided, however, that such
disbursements shall be made to pay only costs which are capital
expenditures normally subject to depreciation in accordance with
GAAP as evidenced in the certificate of the Borrower hereinabove
-39- 7964M
mentioned. ~roperty acquired with payments made pursuant to this
section shall become part of the Project.
{c) In addition to the use of moneys in the Maintenance
Reserve Fund for any of the purposes set forth in (a) and (b)
_above, amounts transferred from the Surplus Fund and deposited
into the Additional Deposit Account shall be available to pay and
shall b.e disbursed by t'he Trustee, at the written direction of the
Bor.rower ~(which direction shall be accompanied by a certificate to
'the effect that it is in compliance with this paragraph), (i) to
repay advances ;m~de by the Borrower or by third parties or to pay
principal and interest on borrowings obtained by the Borrower,
.provided amounts so advanced or the proceeds of such borrowing
were used ~by the Borrower to provide for the operation,
maintenance or improvement of the Project, (ii) to establish
reserves ~or maintenance or repair expenses which the Borrower
estimates will be needed within a reasonable period of time and
that, when incurred, will exceed the amounts then expected to be
available in ~the Monthly Deposit Account of the Maintenance Fund
for such purpose and tO pay other Expenses or capital expenses of
the Project.
.(d) Earnings from investment of the Maintenance Reserve Fund
shall be deposited in the Revenue Fund as received.
Section 509. Operating Reserve Fund.
(a)
Fund:
The Trustee shall use amounts in the Operating Reserve
(1) to make transfers to the Expense Fund, to the
extent the balance therein after transfers from the Revenue
Fund and the Surplus Fund is less than the sum of the Expense
Requirement and the Tax/Insurance Requirement;
~2) to make transfers to the Interest Account and
then to the Principal Account to the extent necessary to pay
interest on an'd principal of (whether at maturity or upon
acceleration or redemption) the Bonds as the same become due,
in the ev.ent transfers from the Revenue Fund and the Surplus
Fund .are insufficient for such purpose; and
~(3) 'to make transfers to the Debt Service Reserve
~Fund if reguired by Section 507.
(b) Any amount on deposit in the Operating Reserve Fund in
excess of ~he Operating Reserve Fund Requirement on any January 1
or July 1 shall be transferred to the Revenue Fund.
(c) .Earnings from investment of the Operating Reserve Fund
shall be deposited in the Revenue Fund as received.
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~Sect~on 1510. Surplus Fund.
(a) The DePOsit Account. The Trustee shall make deposits
~nto the Deposit Account of the Surplus Fund as provided in
~ection 502(j)of this Indenture and, if transfers or payments are
required to be made from the Surplus Fund under the terms of
~Section 503, 505 or 507 of this Indenture, the Trustee shall make
~such transfers first from amounts then on deposit in the Deposit
~Account and then from any amounts in the Distribution Account.
~xcept for transfers made pursuant to Section 503, 505 or 507,
d~Sbursements and transfers from the Deposit Account shall be made
~only under the :following conditions:
(1) No disbursement or transfer shall be made from the
~Deposit ~ccount unless, after such disbursement or transfer, there
shall remain in the Deposit Account, the sum of not less than
i~[$10,000], no Extraordinary Trustee Fees and Expenses are due and
owing and the Borrower has delivered to the Trustee Certificates
of Coverage evidencing that:
(i) the Bond Coverage Requirement has been met for
~he preceding Fiscal Year; and
(ii) on the basis of the Annual Budget for the then
current Fiscal Year, the Bond Coverage Requirement will be met for
such Fiscal Year.
{2) If the conditions set forth in (1) above have been
-met, ~then 'the Trustee shall, upon written requisition of the
Borrower, transfer such amounts as the Borrower shall direct to
the Additional Deposit Account in the Maintenance Reserve Fund to
be used for any of the purposes described in Section 508 of this
Indenture.
{3) On each January 1 beginning January 1, 1997 (or as
soon thereafter as the audited financial statements of the
Borrower for the immediately preceding Fiscal Year together with
the Certificate ~of Coverage for such immediately preceding Fiscal
Year and for the then current Fiscal Year are presented to the
Trustee) after making any transfers from the Surplus Fund then
r.equ~red under Section 503, 505 or 507 of this Indenture and any
~ransfers to the Additional Deposit Account of the Maintenance
Reserve Fund upon the requisiti~on of the Borrower as provided in
(2) above, and if the conditions set forth in (1) above have been
met, ~hen the Trustee shall transfer the balance (in excess of
$10,009) from the Deposit Account to the Disbursement Account.
(b) Disbursement Account. Not later than the last Business
DBy of any month in which the Trustee transfers money into the
Disbursement Account, all amounts in the Disbursement Account
shall, at the written direction of the Borrower, be disbursed to
the Borrower.
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(c) During the period from the date of initial delivery of
the 1996 Bonds, to and including December 31, 1996, the Bond
Core, rage Ratio shall be calculated by the Borrower by multiplying
the sum of (a) Gross Revenues deposited into the Revenue Fund
during the period from and including . , 1996 to and
including December 31, 1996 less Expenses paid during such period
from the General Expense Account and from the Tax/Insurance
Account, the Maintenance Reserve Fund Deposit Requirement for such
· period, any deposit made to the Operating Reserve Fund during such
period, amounts paid 'for Trustee Fees and Expenses, Rating Agency
~Fees, Rebat.e Analyst Fees, Asset Management Fees and Social
Service Management Fees during such period by , and
dividing .the result ~by the Maximum Annual Debt Service.
Section '511. Annual Budqet.
(a) The initial Annual Budget shall be delivered to the
Trustee upon issuance of the Bonds. Thereafter, prior to the
beginning ~of each Fiscal Year, the Borrower shall adopt a budget
for %he Proj.ect for the ensuing Fiscal Year which shall be called
the Annual Budget.
(b) The Annual Budget shall be prepared in such manner as to
'show in reasonable detail (t) all rentals, fees and other .charges
to be derived to pay (A) the cost of operation and maintenance of
the Project and (B) %he amount of principal of and premium, if
any, and interest on the 'Bonds that shall become due during such
Fiscal Year, and (2) the operating expenses (excluding any
depreciation or amortization) estimated to be incurred in
connection with the ownership or operation of the Project, with a
breakout number showing amounts necessary for the payment of
property taxes and insurance premiums. Copies of the Annual
Budget shall be filed with the Issuer, the Trustee and the Rating
Agency no later than .the first day of the Fiscal Year for which it
is prepared.
(c) If for any reason an Annual Budget has not been adopted
within the time required by subsection (a) of this section, the
last previously adopted Annual Budget shall be deemed to provide
for and regulate and control expenditures during such Fiscal Year
until an Annual Budget for ~uch Fiscal Year shall have been
adopt.ed and filed with the Trustee, the Issuer and the Rating
Agency.
(d) The Borrower may amend the Annual Budget at any time
during the Fiscal Year. The Borrower shall follow the same
procedure regarding any such amendment as provided in subsection
(b) of ~this section for the ~doption and filing of the Annual
Budget. Copies of all such amendments shall be filed promptly
with the Trustee, the Issuer an(
Section 512. Monies to Be
to be.deposited with or paid to
the Rating Agency.
{eld in Trust. All monies required
the Trustee for the account of any
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fund or account under any provision of this Indenture (including
any ~emporary %rust fund or account established pursuant to
SeCtion 501) received by the Trustee shall be held by the Trustee
in %rust, and, .except for (i) monies deposited with or paid to the
Trustee for the redemption of Bonds, notice of the redemption of
which has been duly given and (ii) monies held in the Rebate Fund,
monies received by the Trustee skall, while held by the Trustee,
constitute part of the trust estate and be subject to the lien
hereof.
Section .513. Repayment to Borrower. Following Payment of the
Bounds iR full and after payment of Trustee Fees and Expenses and
EXt.raordinary Tru~stee Fees and Expenses and other amounts required
to ~be pa~d hereunder and payment of the fees and expenses of the
Issuer and any other amounts required to be paid to the Issuer
under the Loan Agreement or otherwise, all amounts remaining in
any fund or account under this Indenture shall be paid to the
~Borrower, except for monies held in the Rebate Fund for the
payment o'f rebate.
ARTICLE VI
PROJECT FUND
Section 601. Creation of Project Fund. There is hereby
c~eated and order.ed established with the Trustee a trust fund to
be designated as the "Project Fund."
Section 602. Payments into Project Fund. Amounts shall be
deposited in the Project Fund pursuant to Section 214 and used by
the Trustee as provided in Section 603.
Section ~603. Payments from Project Fund. The Trustee shall
use all monies deposited in the Project Fund as follows:
(a) to make a payment to the Borrower in the amount of
$ , which the Borrower agrees will be used to pay
amounts constituting operating or non,operating expenses of the
Project or amounts chargeable to capital account of the Project in
accordance with generally accepted accounting principles;
(b) to ~ay the amount of $ to Resolution Trust
Corporation or its successor or assign, as holder of that certain
Promissory Note made December 18, 1995 by the Borrower in the
principal amount of $8,835,'000.00, in satisfaction thereof;
(c) to pay the amount of $ to The Enterprise
Foundation, Inc., as holder of that certain Promissory Note made
December , 1995 by the Borrower in the principal amount of
$495,000.00 in satisfaction thereof; and
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(d) to pay the amount of $186,000.00 to the Issuer as
partial consideration for the assignment by the Issuer to the
Borrower of the Issuer's right to acquire the Project from
Resolution Trust Corporation; and
(e) to pay such other amounts as are directed in writing
by the Borrower to satisfy all existing indebtedness and
obligation~s of the Borrower with respect to the Project; and
(f) the remaining amount shall be disbursed by the
'Trustee to the Borrower, to be used by the Borrower to pay costs
of repairs, replacements and other amounts chargeable to the
capital account of the Project, pursuant to Requisitions signed by
the Borrower.
ARTICLE VII
INVESTMENTS
Section 701. Investment of Funds. The Trustee shall
separately invest and reinvest the monies held in the funds and
accounts under this .Indenture at the request of and as directed in
writing by the Borrower in Investment Obligations. Any moneys
held in the Bond Fund shall be separately invested and reinvested
by the Trustee, as directed in writing by the Borrower, in
Investment Obligations described in paragraphs (a), (b), (c), (d)
or (e) of the definition of Investment Qbligations.
SubjeCt to application as provided elsewhere in this
Indenture, any such investments shall be held by, or under the
control ~of, the Trustee and while so held shall be deemed a part
of the fund, account, subaccount or sub-subaccount in which such
moneys were originally held, and the interest accruing thereon and
any profit realized from such investments, including realized
discounts on obligations purchased, shall be credited to such
funds, accounts, subaccounts or sub-subaccounts and any loss
resulting from such investments shall be charged to such funds,
accounts, subaccounts or sub-subaccounts. The Trustee shall sell
and reduce to cash such investments whenever the cash balance in
any fund, account, subaccount or sub-subaccount is insufficient
for its purposes.
Ail investments not ~therwise directed but held pursuant to
this Section 701 shall mature or be subject to redemption at the
option of the holder at the times at which the Borrower reasonably
estimates the invested moneys will be needed for the purposes of
the fund, account, subaccount or sub-subaccount from which the
investment was made, except with respect to savings accounts, time
deposits or certificates of deposit, which shall have a maturity
not in excess of that specified in paragraph (e) of the definition
of Investment Obligations.
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'The Trustee shall not have any obligation to the Bondholders
or the Borrower for any loss arising from investments made
pursuant to the provisions of this Section 701.
'The Trustee may trade with itself in the purchase and sale of
securities for such investment and may charge its ordinary and
customary fees for such trades.
~ection 702. Investments thrGuqh TruStee's Bond Department.
The Trustee may make investments permitted by Section 701 through
its own bond depart~ment or trust investments department.
ARTICLE VIII
DISCHARGE OF INDENTURE
Section 801. Discharge of Indenture.
If:
(a) (i) (A) the Bonds have become due and payable in
accordance with their terms or otherwise as provided in this
Indenture or have been duly called for redemption or (B)
irrevocable instructions to call the Bonds for redemption have
~een given as provided herein to the Trustee, and (ii) the Trustee
~olds for such purpose cash or Government Obligations the
~principal of and the interest on which at maturity (which shall be
prior to or on the date of redemption or payment of the Bonds)
will, based upon the ~calculations of a verification age,t, be
sufficient .(x) to, as applicable, redeem in accordance with the
~elevant section hereof or pay at maturity all Bonds then
outstanding and to pay any premium applicable to such redemption,
-(y) ~o pay interest on all Bonds outstanding to their redemption
'or payment at maturity, and (z) to pay to the Trustee, the Rating
~gency and Rebate Analyst their reasonable fees and expenses and
· an~ other fees and expenses for which the Borrower may be
responsible under the Loan Agreement, including any Rebate Amounts
and the costs and expenses of canceling and discharging this
Indenture; or
(b) all Bonds theretofore issued under this Indenture (other
than Bonds which have been destroyed or lost and replaced or paid
and Bonds for whose payment cash or Government Obligations have
theretofore been deposited in trust and thereafter repaid to the
Borrower) have been delivered to the Trustee for cancellation; and
in either case
(c) the Issuer has observed and performed all its covenants,
conditions and agreements in this Indenture and the Bonds,
,45- 7964M
then the Trustee shall at the expense of the Borrower cancel
and ~discharge this Indenture and execute and deliver to the Issuer
amd the Borrower such instruments in writing as shall be requisite
~to cancel the lien hereof, and assign and deliver to the Borrower
any pr.operty at the time subject to this Indenture which may then
De in its po~ssession, except funds or securities held by the
Trustee fo.r the .payment of the principal of, premium, if any, and
interest an t.he Bonds, Rebate Amounts and all fees and expenses
described above.
Sonds for %'he payment or redemption of which cash or
Government Obligations the principal of and interest on which will
be, based upon the calculations of a verification agent,
sufficient therefor shall have been deposited with the Trustee
~whether ~pon or prior to the maturity or the redemption date of
such Bonds) shall be'deemed to be paid and no longer outstanding;
~provided, however, that if such Bonds are to be redeemed prior to
the maturity thereof, notice of such redemption shall have been
duly given or instructions satisfactory to the Trustee shall have
been given to the Trustee.
The obligation to pay the principal of, premium, if any, and
interest on all or any pOrtion of the Bonds may be discharged by
the delivery of suc'h Bonds to the Trustee accompanied by written
direction from the Owner(s) thereof to cancel such Bonds without
payment, and upon such delivery, such Bonds shall be cancelled and
~eemed paid. In the event only a portion of the Bonds shall be
~cancelled and deemed paid pursuant to the terms of this Article
VIII, those Bonds which are not so cancelled and deemed paid shall
remain Outstanding for all purposes of this Indenture, except as
otherwise ~provided herein.
ARTICLE IX
DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND BONDHOLDERS
Section 901. Events of Default.
shall ~be an Event of Default:
Each of the following events
(a) Default in the due and punctual payment of any interest
.on any Bond;
(b) Default in the due and punctual payment of the principal
of or premium, if any, on any Bond (whether at maturity, by
acceleration or ~call for redemption or otherwise);
(c) Subject to Section 910, default in the observance or
performance of any of the covenants, conditions or agreements of
the Issuer under this Indenture (other than Section 408); and
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(d) The occurrence of an Event of Default under the Loan
Agreement.
The occurrence of a Determination of Taxability shall not
constitute an ~E~ent of Default.
SectiOn 902. Acceleration. Upon the occurrence of an Event
of Default under (a) and (b) of Section 901, the Trustee may and
at the request of %he holders of not less than a majority of the
aggregate principal amount of the Bonds then outstanding shall,
and upon the-occurrence of an Event of Default under (c) or (d) of
Section 901, the Trustee only at the request of the holders of not
.less than 100'% of the aggregate principal amount of the Bonds then
outstanding s~hall, by notice delivered to the Issuer and the
Borrower, declare the principal of all Bonds and the interest
,accrued to the date of such acceleration immediately due and
payable. Upon any such acceleration, the Trustee shall
i~ediately declare all payments required to be made by the
Borrower under the Note and the Loan Agreement to be immediately
due and payable and shal:l also transfer all monies from all other
funds and accounts ,hereunder to the Bond Fund.
Section 903. .Other Remedies; Rights of Bondholders. Upon the
occurrence of an Event of Default and subject to Section 1001(k)
hereof, the Trustee may proceed to protect and enforce its rights
and the rights of {he Bondholders by mandamus or other suit,
action or proceeding at law or in equity, including an action for
specific performance of any agreement herein contained.
No remedy conferred .by this Indenture upon or remedy reserved
to tlhe Trustee or %o the Bondholders, is intended to be exclusive
of any other remedY, but each such remedy shall be cumulative and
shall be in addition to any other remedy given to the Trustee or
to the Bondholders hereunder or now or hereafter existing at law
or in equity or by statute.
No delay or omission to exercise any right or power accruing
upon any default or Event of Default shall impair any such right
or power or shall be construed to be a waiver of any such default
or Event of Default or acquiescence therein, and every such right
and ~power may be exercised from time to time and as often as may
be deemed expedient.
No waiver of any default or Event of Default, whether by the
Trustee pursuant to Section 908 or by the Bondholders, shall
extend to or shall sffect any subsequent default or Event of
Default hereunder or shall impair any rights or remedies
consequent thereon.
Section 904. Right of Bondholders to Direct ProceedinGs.
Anything in this Indenture to the contrary notwithstanding, the
owners of a majority in aggregate principal amount of Bonds then
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~oUtstanding Shall ~have the right, at any time, by an instrument or
~nstruments in writing executed and delivered to the Trustee, with
indemnity as may be required by the Trustee pursuant to SeCtion
1001('k), to -direct the method and place of conducting all
proceedings ;to :~ taken in connection with the enforcement of the
te~ms and conditions of this Indenture or for the appointment of a
receiver or ..any other proceedings hereunder; provided, however,
that such-direction shall not be otherwise than in accordance with
~he provisions of law and of this Indenture. Unless directed by a
majority of to this section, the Trustee shall
have full power in the exercise of its discretion for the best
intereis~s of the owners, to conduct, continue, discontinue,
compromise, settle or otherwise dispose of any legal or
action or proceeding.
'Section 9'05. ~Application of Monies. Ail monies received by
~th.e ~TruStee pursuant-to any right given or action taken under the
provisions of ~his Article shall, after the payment of all unpaid
:fees and -expenses-of the Trustee and of the cost and expenses of
the proceedings .resulting in the collection of such monies and the
creation of a r. eserve for anticip!ated fees, costs and expenses, be
~eposited in the Bond Fund. All monies in the Bond Fund shall be
applied as follows:
(a) Unless the principal of all the Bonds shall have become
:or shall-have been declared due and payable;
First - To .the payment t:o the persons entitled thereto of
all installments 'of interest then due on the Bonds, in
the order of the maturity of the installments of such
interest and, if the amount available shall not be
'sufficient to pay in full any .particular installment,
then ~to the payment ratably, according to the amounts due
on .such installment, to the persons entitled thereto,
withouk any .discrimination or preference except as to any
difference in the respective rates of interest specified
in the~Bonds;
Second - ~o the payment to the persons entitled thereto
-of ~he ~unpaid principal of and premium, if any, on any of
the ~Bonds which shall have become due (other than Bonds
called for redemption for the payment of which monies are
held pursuant to ~he ~provisions of this Indenture) in the
order of 'their due dates, with interest on such Bonds at
the respective rates specified therein from the
respective dates upon which they become due and, if the
amount 'available shall not be sufficient to pay in full
.Bonds due on any particular date, together with such
~nterest, t'hen first to the payment of such interest
ratably, according to the amount of such interest due on
such date, and then to the amount of such principal,
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ratably, according to the amount of such principal due on
such date, t~o the persons entitled thereto, without any
discrimination or preference except as to any difference
in the respective rates of interest specified in the
Bonds; and
Third - To the extent permitted by law, to the payment to
the persons entitled thereto of the unpaid interest on
overdue fnstaliments of interest ratably, according to
the amounts of such interest due on such date, without
any discrimination or preference except as to any
difference in the respective rates of interest specified
in the Bonds.
(b) If the principal of all the Bonds shall have become due
or shall have been declared due and payable, all such monies shall
be applied to the payment of the principal and interest then due
and .unpaid upon the Bonds without preference or priority of
principal over interest or of interest over principal, or of any
installment of interest over any other installment of interest, or
of any Bond'over any other Bond, ratably, according to the amounts
due respectively for principal and interest, to the persons
entitled thereto, without any discrimination or privilege.
~(c) If the principal of all the Bonds shall have been
declared :due and payable, and if such declaration shall thereafter
have been rescinded and annulled under the provisions of this
article, then, subject to the provisions of subsection (b) of this
section in the event that the principal of all the Bonds shall
later become due or be declared dye and payable, the monies shall
~e applied in accordance with the provisions of subsection (a) of
this section.
Whenever monies are to be applied pursuant to the provisions
~of this section, such monies shall be applied at such times and
from time to time as the Trustee shall determine, having due
regard to the amount of such monies available for application and
~the likelihood of additional monies becoming available for such
application in the future. Whenever the Trustee shall apply such
monies, it shall fix the date (which may be an interest payment
date) upon which such application is to be made and upon such date
interest on the amounts of principal to be paid on such dates
shall cease to accrue. The Trustee shall give such other notice
as it may deem appropriate of the deposit with it of any such
monies and of the fixing of any such date, and shall not be
required to make payment to the owner of any Bond until such Bond
shall be presented to the Trustee for appropriate endorsement or
for cancellation if fully paid.
Section 906. Remedies Vested in Trustee. Ail rights of
action (including the right to file proof of claims) under this
Indenture or under any of the Bonds to protect the rights of the
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owners of the Bonds may be enforced by the Trustee without the
~ossession of any of the Bonds or the production thereof in any
.trial or other proceeding relating thereto and any such suit or
proceeding instituted by the Trustee may be brought in its name as
Tru'stee without the necessity of joining as plaintiffs or
defendants any owners of the Bonds, and any recovery of judgment
shall be for the equal benefit of the owners of the outstanding-
~onds.
Section 907. Limitations on .Suits. Except to enforce the
r~ghts given under Section 902 and except as provided in Section
909, ~no owner of any Bond shall have any right to institute a
suit, action or proceeding in equity or at law for the enforcement
of ~thi-s Indent.ute or for the execution of any trust hereof or any
other remedy hereunder, unless (a) a default has occurred of which
the Trustee 'has been notified or is deemed to have notice as
provided in Section I001(h), (b) such default shall have become an
Event ~of Default and the owners of at least a majority in
ag~gregate ~principal amount of Bonds then outstanding shall have
made written request to the Trustee and shall have offered it
reasonable opportunity either to proceed to exercise the powers
hereinbefore granted or to institute such action, suit or
proceeding in its own name, (c) such owners have offered to the
Trustee indemnity as provided in Section 1001(k), (d) the Trustee
for 60 days after such notice shall fail or refuse to exercise the
powers hereinbefore granted, or to institute such action, suit or
proceeding in its own name or in the name of such owners, (e) no
direction inconsistent with such request has been given to the
Trustee during such 60-day period by the owners of a majority in
aggregate principal amount of Bonds then outstanding, and (f)
notice of such action, suit or proceeding is given to the Trustee;
it being understood and intended that no one or more owners of the
Bonds shall have any right in any manner whatsoever to affect,
disturb or prejudice this Indenture by its, his or their action or
to enforce any right hereunder except in the manner herein
provided, and that all proceedings at law or in equity shall be
instituted and maintained in the manner herein provided and for
the equal benefit of the owners of all Bonds then outstanding.
The notification, request and offer of indemnity set forth in
the preceding paragraph, at the option of the Trustee, shall be
conditions precedent to the execution of the powers and trusts in
this Indenture and to any action or cause of action by the
Bondholders for the enforcement of this Indenture or for any other
remedy hereunder, except to enforce the obligations of the Trustee
arising under Section 902.
Section 908. Waivers of Events of Default. The Trustee may
in its discretion waive any Event of Default hereunder and the
consequences of such Event of Default and rescind any declaration
of acceleration of maturity of principal of and interest on the
Bonds under Section 902, and shall do so upon the request of the
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holders of at least a -majority in aggregate principal amount of
Bonds %hen outstanding; provided, however, that no Event of
Default shall be .waived unless prior to such waiver all arrears of
~rincipal ~nd interest (other than principal or interest on the
Bonds which became due and payable by declaration of acceleration)
and ~all expenses of the Trustee in connection with such Event of
Default-shall have .been paid or provided for or unless the holders
of 100% i.n aggregate principal amount of Bonds then outstanding
Shall have consented thereto. In case of any waiver or rescission
described above, or in case any proceedings taken by the Trustee
on .account of any suc~h Event of Default shall have been
disconti~ued or concluded or determined adversely to the Trustee
or the Bondholders, then 'and in every such case the Issuer, the
Trustee and the Bondholders shall be restored to their former
positions and rights hereunder, respectively, but no such waiver
or rescission Shall <extend to any subsequent or other Event of
.Default, or impair any right consequent thereon.
Section ~909. Unconditional Right to Receive Principal,
Premium and Interest. Nothing in this Indenture shall, however,
affect or impair ~he right of any Bondholder to enforce, by action
at law, ~payment of the principal of, premium, if any, or interest
on any ~ond at and after the maturity thereof, or on the date
fixed for redemption or (subject to the provisions of Section
902) upon the same being declared due prior to maturity as herein
provided, or to enforce, by action at law, the obligation of the
Issuer to pay the principal of, premium, if any, and interest on
each of the Bonds issued hereunder to the respective owners
thereof at the time, place, from the source and in the manner
>herein ~and in the Bonds expressed.
Section 910. Notice of Defaults; Opportunity to Cure
Defaults. Anything contained in this Indenture to the contrary
notwithstanding, no default described in Section 901(c) on the
part of the Issuer shall constitute an Event of Default until (a)
notice of such default shall be given (1) by the Trustee to the
Issuer and the Borrower or (2) by the holders of at least a
majority in aggregate principal amount of Bonds then outstanding
to the Trustee, the Issuer and the Borrower, and (b) the Issuer
and the Borrower shall have had 90 days after such notice to
correct such default or cause such default to be corrected, and
Shall not have corrected such default or caused such default to be
corrected within such period; provided, however, if any default
desCribed in Section 901(c) shall be such that it cannot be
corrected within such period, it shall not constitute an Event of
Default if corrective action is instituted by the Issuer or the
Borrower within such period and diligently pursued until such
default is corrected.
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ARTICLE X
THE TRUSTEE
.Section 1001. Acceptance of Trusts. By executing this
Indenture, the Trustee hereby accepts the trusts and obligations
imposed upon it by this Indenture and the other Financing
Instruments and agrees to perform such trusts and obligations, but
only upon and subject to the following express terms and
conditions:
(ia) The Trustee, prior to the occurrence of an Event of
Default a~nd after the curing of all Events of Default which may
have occurred, undertakes to perform-such duties and only such
duties as are specifically set forth in this Indenture and as a
~prudent .man would exercise or use in the circumstances in the
~conduct of ~is own affairs. In case an Event of Default has
occurred (which has not been cured or waived), the Trustee shall
exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their
exercise -as a prudent man would exercise or use in the
circumstances.in the conduct of his own affairs.
<(b) The Trustee may execute any of the trusts or powers
hereof and ~erform any of its duties by or through attorneys,
agents, receivers or employees, but shall be answerable for the
conduct of the same in accordance with the same standard of care
specified above, and .shall be entitled to act upon the reasonable
opinion or advice of its counsel concerning all matters of trust
hereof and the duties 'hereunder, and may in all cases be
reimbursed hereunder for reasonable compensation paid to all such
attorneys, agents, r.eceivers and employees, as may reasonably be
employed in connection with the trusts hereof. The Trustee may
act upon an Opinion of Counsel, and shall not be responsible for
any loss or damage resulting from any action or non-action by it
taken or omitted .to be taken in good faith in reliance upon such
Opinion of Counsel.
{c) The Trustee shall not be responsible for (i) any recital
herein-or in the Bonds (except with respect to the certificate of
authentication .of the Trustee endorsed on the Bonds), (ii) the
.recording of this Indenture, (iii) insuring the Project or
collecting any insurance monies, (iv) the validity of the
execution by the Issuer of this Indenture or of any supplements
hereto or instruments of further assurance, (v) the sufficiency
~of, or filing of documents related to, the security for the Bonds
issued hereunder or intended to be secured hereby, or (vi) the
value of or title to the Project or otherwise as to the
maintenance of the security thereof, and the Trustee shall not be
bound to ascertain or inquire as to the observance or performance
of any covenants, conditions or agreements on the part of the
Issuer or on the part of the Borrower under the Loan Agreement
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except as otherwise provided herein. The Trustee shall not be
responsible or liable for any loss suffered in connection with any
investment of .fu-nds made by it in accordance with Section 701,
except ~for the Tzustee's gross negligence and willful misconduct.
(d) The Trustee shall not be accountable for the use of any
Bonds authenticated or delivered hereunder. The bank or trust
company acting as Trustee and its directors, officers, employees
or agents may in good faith buy, sell, own, hold and deal in the
Bonds and may join in any action which any Bondholder may be
entitled to take with like effect as if such bank or trust company
were .not the Trustee. To the extent permitted by law, such bank
.or trust company may also receive tenders and purchase in good
faith Bonds from itself, including any department, affiliate or
subsidiary, with bike effect as if it were not the Trustee.
(e) The Trustee shall be protected in reasonably acting upon
any notice, request, consent, certificate, order, affidavit,
letter, telegram or other paper or document reasonably believed by
it to be genuine and correct and to have been signed or sent by
the proper person or persons. Any action taken by the Trustee
pursuant to this Indenture upon the request or authority or
consent of any person who at the time of making such request or
giving such authority or consent is the owner of any Bond shall be
conclusive and binding upon all future owners of the same Bond and
upon Bonds issued in exchange therefor or in place thereof.
(f) .As to the existence or non-existence of any fact or as to
the sufficiency or validity ~f any instrument, paper or
proceeding, the Trustee shall be entitled to rely upon a
certificate signed on behalf of the Issuer by its Mayor or Vice
Mayor and atteSt~ed by its Clerk under its seal, or such other
person or persons a's may be designated for such purposes by
~esolution of the Issuer, as sufficient evidence of the facts
therein contained and prior to the occurrence of a default of
which the Trustee has been notified as provided in subsection (h)
of th~s section, 'or of Which by such subsection' it is deemed to
have notice, may also accept a similar certificate to the effect
that any ~particular dealing, transaction or action is necessary or
expedient, but may at its discretion secure such further evidence
deemed necessary or advisable, but shall in no case be bound to
secure the same. The T~ustee may accept a certificate of the
~Mayor or Vice Mayor .or the Clerk of the Issuer under its seal to
the effect that a .resolution in the form therein set forth has
been adopted by the Issuer as conclusive evidence that such
resolution has been duly adopted and is in full force and effect.
(g) The permissive right of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty and
the Trustee shall not be answerable for other than its gross
negligence or willful misconduct. The immunities and exceptions
from liability of the Trustee set forth in this Indenture shall
extend to its officers, ~directors, employees and agents.
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{h) The Trustee shall not be required to take notice or be
deemed to have notice of any default hereunder except for defaults
specified in subsections (a) or (b) of Section 901 hereof, unless
t.h~e Trustee shall be specifically notified in writing of such
default by the Issuer, the Borrower or by the holders of at least
a majority in aggregate principal amount of Bonds.
~(i) The Trustee shall not be required to give any bond or
surety with respect to the execution of its rights and obligations
hereunder.
(j) Anything contained in this Indenture to the contrary
not.w~thstanding, the Trustee shall have the right, but not the
obt~ation, to demand, as a condition of any action by the Trustee
with ~espect to the authentication of any Bonds, the withdrawal of
any cash, t.he release of any property, or any action whatsoever
within the .purview of this Indenture, any showings, certificates,
opinions, appraisals or other information or corporate action or
evidence thereof in addition to that required by the terms hereof.
(k) Before taking any action under this Indenture other than
the acceleration of the Bonds as provided in section 902, the
Trustee may require that satisfactory indemnity be furnished to it
for the reimbursement of all expenses, including reasonable
counsel fees, to which it may be put and to protect it against all
liability by reason of any action ~so taken, except liability which
is adjudicated to have resulted from its gross negligence or
willful misconduct. The Trustee may decline to exercise any right
provided by this Indenture, tlhe %oan Agreement, the Restrictive
Covenants or the Mortgage which, in the reasonable discretion of
of
~the Trustee ~based on an OpiniOn Counsel, may cause the trust
estate or the Trustee to incur corporate or personal liability
under any environmental law.
(1) Ail monies received by the Trustee shall, until used or
applied or invested as herein provided, be held in trust in the
manner and .for the purposes for which they were received but need
not be segregated for investment purposes from other funds except
to the extent r. equired by this Indenture or law. The Trustee
shall not be under any liability for interest on any monies
received hereunder except such as may be agreed upon.
(m) The Trustee may, at the expense of the Borrower, as
provided in Section 4.1(b)(1) of the Loan Agreement, employ a firm
or person experienced in monitoring compliance of multi-family
residential rental projects with the requirements of the
Restrictive Covenants, unaffiliated in any manner with the
Borrower and acceptable to the Borrower and the Issuer, as the
Trustee's agent to enforce thp obligations of the Borrower under
the Restrictive Covenants and shall -not be answerable or
accountable for any act or omission of such agent.
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Section 1002. Fees, Charges and Expenses of Trustee. The
~Trustee shall be entitled to payment of and reimbursement for
reasonable 'fees for its services and all out-of-pocket expenses
reasonably incurTed by the Trustee hereunder and as Bond Registrar
and Paying Agent for 'the Bonds, including the reasonable fees of
its counsel. In ~the event the Trustee ceases to be the Paying
Agent and Bond Registrar heret~nder, that portion of the Trustee's
fees attributable %o such services shall be payable to such other
~entities performing such services.
Section i003. Intervention bY Trustee. In any judicial
~proceeding to which the Issuer is a party and which in the opinion
of the Trustee has a substantial bearing on the interests of
owners of the Bonds, the Trustee may intervene on behalf of
bondholders and, subject to Section 1001(k), shall do so if
requested by the owners of at least a majority in aggregate
principal amount of Bonds then outstanding. The rights and
obligations of the Trustee under this section are subject to the
approval of a court of competent jurisdiction.
Section 1004. Merqer or Consolidation of Trustee. Any
corporation or bank ~nto which the Trustee may be converted or
merged, or with which it may be consolidated, or to whiCh it may
sell or transfer its corporate trust business and assets as a
whole or substantially as a whole, or any corporation or bank
resulting from any such conversion, sale, merger, consolidation or
transfer to which it is a party shall be and become successor
Trustee hereunder and veste~ with all the trusts, powers,
discretion, immunities, privileges and all other matters as was
its predecessor, ~without the execution or filing of any
instrument or any further act, deed or conveyance on the part of
any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 1005. Resiqnation by Trustee. The Trustee and any
successor Trustee may at any time resign from the trusts hereby
created by giving notice to the Issuer, the Borrower and each
owner of Bonds then outstanding. Such resignation shall take
effect .only upon ~the appointment of a successor Trustee by the
Bondholders, the Borrower or the Issuer. If no successor Trustee
be appointed within ~6.0 days of such notice of resignation, a
temporary Trustee shall be appointed pursuant to Section 1007
until a successor TrUstee shall be appointed by the Bondholders or
the Issuer.
Section 1006. Removal of Trustee. The Trustee may be removed
at any time by an instrument or concurrent instruments in writing
delivered to the Trustee and the Issuer and signed by the owners
of a majority in aggregate principal amount of Bonds then
outstanding, or so long as no Event of Default has occurred and is
continuing by the Borrower, in either case upon payment of all
fees.and expenses due the Trustee.
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Section 1007. Appointment of Successor Trustee by
.~Bondholde~s; Temporary Trust~ee. In case the Trustee hereunder
shall resign, be removed, be dissolved, be in course of
~dissolution or liquidation, or otherwise become incapable of
~ct~ing hereunder, or in case it shall be taken under the control
of any ~ublic officer or officers or of a receiver appointed by a
..court, a 'successor may be appointed by (1) the owners of a
majority in aggregate principal amount o:f Bonds then outstanding,
witch the consent of the Issuer. and the Borrower, such consent not
%o- be un~easonablY withheld, by an instrument or concurrent
i~nstruments in writing signed by such owners or (2) the Issuer,
with the consent of the Borrower, such consent not to be
unreasonably withheld by-an instrument signed by the Mayor or Vice
.Mayor of the Issuer and attested by its Clerk under its seal. If
~no successor or temporary Trustee is appointed within 60 days of
the resignation of the Trustee, the Trustee may petition a court
~of suitable jurisdiction at the expense of the Borrower to seek
the immediate appointment of a successor Trustee. Every such
Trustee appointed pursuant to this section shall be, if there be
such an institution willing, qualified and able to accept this
trust upon reasonable or customary terms, a trust company or bank
combined capital, surplus and undivided profits of not
havingless thana $100 ~milti0~. Notice of the appointment of the Trustee
shall be provided to the holders of the Bonds and Wheat, First
Securities, Inc.
SeCtion 1008. Concernin~ any Successor Trustee. Every
successor Trustee ~ppointed hereunder shall execute, acknowledge
and deliver to its predecessor and also to the Issuer an
instrument in writing accepting such appointment hereunder, and
~thereupon such successor, without any further act, deed or
conveyance, shall become fully vested with all the properties,
.~ri~hts, powers, trusts, ,duties and obligations of its predecessor;
but such predecessor .shall, nevertheless, on the request of the
Issuer or its successor, execute and deliver an instrument
transferring to such successor Trustee all the properties, rights,
powers and trusts of such predecessor hereunder; and every
predecessor Trustee shall deliver all securities and monies held
by it as Trustee hereunder to its successor. Should any
instrument in writing from the Issuer be required by any successor
Trustee for more fully and certainly vesting in such successor the
.properties, rights, powers and duties hereby vested or intended to
be vested in the predecessor, any and all such instruments in
~riting s. hall, on request, be ~xecuted, acknowledged and delivered
'b~ the Issuer. The resignatioD of any Trustee and the instrument
~or instruments removing any Trustee and appointing a successor
ihereunder, together with all other instruments provided for in
%his article shall be filed and/or recorded by the successor
Trustee i.n each recording office where the Indenture may have been
filed ~nd/or recorded.
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Section 1009. Trustee Pr0t~ected in Relyinq Upon Resolutions,
etc, The resolutions, opinions, certificates and other
instruments provided for in this Indenture may be accepted by the
Trustee as conclusive evidence of the facts and conclusions stated
therein and shall be full warrant, protection and authority to the
Trustee for the release of property and the withdrawal of cash
hereunder.
Section 1010. SuCCeSsor ~Trustee as Bond Reqistrar, Custodian
of Bond Fund and 'Paying Agent. In the event of a change in the
office of Trustee, ~he predecessor Trustee which has resigned or
been ~emoved shall cease to be Bond Registrar, custodian of the
funds and amounts hereunder and Paying Agent for principal of,
premium, if any, and i.nter~est on the Bonds, and the successor
Trustee shall become such Bond Registrar, custodian and Paying
Agent.
Section 1011. Notice to Rating Agency. The Rating Agency
shall be notified by the Trustee of the following: (a) any
redemption of Bonds other than scheduled sinking fund redemptions;
(b) whenever there is a change in the Trustee; (c) whenever there
shall occur an Ewent of Default; (d) whenever there shall have
occurred a defeasance of th~ Bonds or discharge of this Indenture;
(e) when all t.he Bonds are paid; (f) any disbursement from the
Debt Service Reserve FUnd; (g) any Material Damage to the Project
or Project or any part thereof and (h) notification of any default
under the Mortgage of which t~he Trustee has notice in accordance
with Section 1001(h). The Rating Agency shall be furnished by the
Trustee any information in the possession of the Trustee it
requests in order to maintain the rating on the Bonds, and the
Trustee shall cooperate with the Rating Agency, including
submitting any surveillance forms required by the Rating Agency.
The Trustee shall provide to the Rating Agency, .upon its receipt
thereof, the annual audited financial statements of the Borrower.
ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 1101. Supplemental Indentures Not Requiring Consent
of Bondholders. The Issuer and the Trustee may, without the
consent of, or notice to, any of the Bondholders, enter into an
indenture or indentures supplemental to this Indenture to the
extent not inconsistent With the terms and provisions hereof for
any one or more of ~he following purposes:
(a) t~o cure any ambiguity or formal defect or omission in
%his Indenture;
(b) to grant to or confer upon the Trustee for the benefit of
the Bondholders any additional rights, remedies, powers or
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authority that may lawfully be granted to or conferred upon the
~Bondholders or the Trustee or either of them;
,(c) %o subject to
properties or collateral;
this Indenture additional revenues,
(d) to modify, amend or supplement this Indenture in such
manner as required to permit the ~qualification hereof under the
Trust Indenture Act of 1939, as amended, any similar Federal
statute hereafter in effect, or any state securities ("Blue Sky")
law, and, if they so determine, to add to this Indenture such
other terms, conditions and provisions as may be required by the
Trust Indenture Act of 1939, as amended, or similar Federal
statute or state securities law;
(e) to provide for the issuance, sale and delivery of
Additional Bonds as provided in and upon compliance with Section
213 to provide for (1) the deposit and disbursement of the
~proceeds of such Additional Bonds to pay the expenses of the
issuance of such Additional Bonds and the cost of all or any part
· of the facilities to be financed by means of such Additional Bonds
or to refund another series of Bonds, as the case may be, (2) the
payment of the principal of, premium, if any, and interest on such
~Additional Bonds, and (3) such other changes necessary in
connection with the issuance of such Additional Bonds as shall not
adversely affect in any material respect the rights of the owners
of the Bonds then .outstanding;
(f) to -make any change herein which, in the opinion of Bond
~Counsel, is necessary to preserve the exclusion of interest on any
Tax-Exempt Bonds from gross income for Federal income tax
purposes; and
(g) to make any ~other ~change herein which shall not adversely
affect in any material respect the rights of the owners of the
Bonds thenoutstanding.
Section 1102. Supplemental Indentures Requiring Consent of
Bondholders. Exclusive of supplemental indentures covered by
Section 1101 and subject to 'the terms and provisions contained in
this section, and not otherwise, the owners of at least a majority
in aggregate principal amount of Bonds then outstanding have the
right from time to time, anything contained in this Indenture to
the contrary notwit'hstanding, to consent to and approve the
execution by the Issuer and the Trustee of such other indenture or
indentures supplemental hereto as shall be deemed necessary o~
desirable by the Issuer for the purpose of modifying, altering,
amending, adding to or rescinding, in any particular, any of the
terms or provisions contained in this Indenture or in any
supplemental indenture; provided, however, that nothing in this
Indenture shall permit, or be .construed as permitting, without the
consent and approval of the owners of all the Bonds then
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outstanding, (a) an extension of the date upon which the payment
of any principal of or interest on any Bond is due or (b) a
reduction in the principal amount of, or premium, if any, on any
Bond or the .rate of interest thereon or the amount of interest
~ayabte ~hereon or (c) a reduction in amount of any payment
~required by any sinking fund that may be applicable to any Bond,
or (d) a privilege or priority of any Bond or Bonds over any Other
Bond ~or Bonds, or (e) a change in the privileges~ or priorities of
any Bond or Bonds over any other Bond or Bonds or (f) a reduction
in the aggregate principal .amount of Bonds required for consent to
~ny supplemental indenture.
If, at any time, the Issuer shall request the Trustee to enter
into any supplemental indenture for any of the purposes of this
section, the Trustee shall send to each Bondholder notice of the
proposed execution of such supplemental indenture by registered or
certified mail to the address of such BondhOlder as it appears on
t~he registration books; provided, however, that failure to give
such notice to any Bondholder by mailing, or any defect therein,
shall not affect the validity of any proceedings pursuant hereto.
Su.ch notice shall briefly set forth the nature of the proposed
supplemental indentuze and shall state that copies thereof are on
file at the principal office of the Trustee for inspection by all
Bondholders. If, within 60 days or such longer period as shall be
prescribed by the Issuer following the giving of such notice, the
owners of a majority in aggregate principal amount of Bonds then
outstanding shall have consented to the execution thereof as
herein provided, no owners of any Bond shall have any right to
object to any of the terms and .provisions contained therein, or
the operation thereof, or in any manner to question~ the propriety
of the execution thereof, or to enjoin or restrain the Trustee or
t. he Issuer from executing the same or from taking any action
pursuant to the provisions thereof. Upon the execution of any
supplemental indenture as permitted and provided for in this
Section, this Indenture shall be deemed to be modified and amended
in accordance therewith.
Bonds owned .or held by or for the account of the Issuer or the
Borrower or any person controlling, controlled by or under common
control with either of them shall not be deemed outstanding for
the .purpose of consent or any calculation of outstanding Bonds
provided 'for in this article or in Article XII. At the time of
any such caIculation, the Issuer shall furnish the Trustee a
certificate of an officer of the Issuer, upon which the Trustee
may rely, describing all Bonds to be so excluded.
The Issuer and t~he Trustee may enter into an indenture
supplemental to this Indenture pursuant to Section ll01(e) and in
accordance with the prOvisions of Section 213 without compliance
with this section.
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Anything contained in this Indenture to the contrary
notwithstanding, the Issuer and the Trustee may enter into any
indenture supplemental to this Indenture upon receipt of the
consent of the owners of all Bonds then outstanding and, if
required by Section 1103, the consent of the Borrower.
Section 110.3. O_pinion of Counsel and. COnsent of Borrower
.Required. Anything in this Indenture to the contrary
notwithstanding, the-Trustee (a) shall not execute any indenture
supplemental to this Indenture unless there shall have been filed
with the Trustee (i) an Opinion of Counsel stating that such
supplemental indenture is authorized or permitted by this
Indenture and complies with its terms and that upon execution it
will be valid and binding upon the Issuer in accordance with its
terms, and (ii) a. written opinion of Bond Counsel stating in
e~ffect that such supplemental indenture will not affect the
tax-exempt status of interest on the Tax-Exempt Bonds, and (b)(i)
unless an Event of Default has occurred and is continuing, shall
not, without the consent of the Borrower, execute any indenture
supplemental to this Indenture, and (ii) if an Event of Default
has occurred and is continuing shall not without the consent of
the Borrower execute any indenture supplemental to this Indenture
which ~adversely affects any rights or obligations of the Borrower.
Section 1104. Trustee's Obliqation Regarding Supplemental
Indentures and Amendments, etc., to Loan Agreement, Note, Mortgaqe
and Restrictive Covenants. The Trustee shall not unreasonably (a)
refuse to enter into any supplemental indenture permitted by this
article or (b) withhold its consent to any amendment, change or
modification of the Loan Agreement, the Note, the Mortgage or the
Restrictive Covenants permitted by Article XII. The Trustee shall
not be deemed to have acted unreasonably hereunder if it believes
in good faith that any such supplemental indenture, amendment,
change or modification is or may be prejudicial to the rights of
the Trustee or the Bondholders.
ARTICLE XII
AMENDMENT OF LOAN AGREEMENT, NOTE,
MORTGAGE AND RESTRICTIVE COVENANTS
Section 1201. Amendments, etc., to Loan Agreement, Note,
~Mortgage and Restrictive Covenants Not Requirinq 'Consent of
Bondholders. The Issuer and the Trustee shall, without the
necessity of consent by or notice to the Bondholders, consent to
any amendment, change or modification of the Loan Agreement, the
Note, the Mortgage or the Restrictive Covenants as may be required:
(a) by the provisions of the Loan Agreement, the Note, the
~.Mortgage, the Restrictive Covenants or this Indenture;
-60- 7964M
Cb) for the purpose of curing any ambiguity or formal defect
or omissio~n ~herein;
{c) in connection with the Project to identify the same more
precisely or substitute or add additional property acquired with
the proceeds of ~the Bonds;
{d) ~n connection with the issuance, sale and delivery of
Additional Bonds as provided in and in compliance with Section 213
to provide for ~ayments of additional amounts and/or revenues
sufficient to pay t~he principal of, premium, if any, and interest
on such Additional Bonds and such other Changes as are necessary
in connection with t~he issuance of such Additional Bonds;
(e) to make any .change therein which, in the opinion of Bond
Counsel, is necessary .to preserve the exclusion of interest on any
Tax~.Exempt ~Bonds £ro.m gross income for Federal income tax
purposes; or
(f) in connection with any other change therein, which sh@ll
not adversely affect in any material respect the rights of the
-holders of the Bonds then outstanding.
Section 1202. ~Amendments, etc., to Loan Aoreement, Note,
~Mort0a~e 'and Restrictive CoVenants Requiring Consent of
Bondholders. Except for amendments, changes or modifications as
provided in Section 1201, ~neither the Issuer nor the Trustee shall
consent to any amendment, change or modification of the Loan
Agreement, the Note, the Mortgage or the Restrictive Covenants
without the prior consent of the owners of at least a majority in
aggregate principal amount of Bonds then outstanding given and
~Procured as ~provided in Section 1102. If at any time the Issuer
and the Borrower shall request the consent of the Trustee to any
such ~proposed amendment, change or modification of the Loan
Agreement, the No~e, the Mortgage or the Restrictive Covenants,
~the Trustee shall, upon being satisfactorily indemnified with
respect to expenses, cause notice of such proposed amendment,
change or modification ~o be given in the same manner as provided
by Section 11102 with respect to supplemental indentures. Such
.notice shall briefly set forth the nature of such proposed
· amendment, change or modification and shall state that copies of
~the instrument embodying the same are on file at the principal
office of 'the TruStee for inspection by all Bondholders.
Section 1203. Limitation on Amendments. No amendment, change
or modification to the Loan Agreement, the Note, the Mortgage or
the Restrictive Covenants may decrease the obligation of the
Borrower to provide revenues in amounts sufficient to pay the
principal of and premium, if any, and interest on the Bonds as the
same become due. Notwithstanding anything to the contrary in
Sections 1201 or 1202, %he Issuer shall not be required to consent
to any amendment, change or modifi.cation of the Loan Agreement,
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the Note, the Mortgage or the Restrictive Covenants that adversely
affects any rights .of the Issuer.
Section 1204. Amendment by Unanimous Consent. Anything
contained in this Indenture to the contrary notwithstanding, the
Issuer and the Tr.ustee may consent to any amendment, change or
modification of the Loan Agreement, the Note, the Mortgage or the
Restrictive Covenants upon receipt of the consent of the owners of
all ~Bonds then outstanding.
.Section 1205. Opinion of- .Counsel Required and Consent of
BQrrower .Required. Anything in this Indenture to the contrary
.notwithstanding, the Trustee (a) shall not execute any amendment,
change or modification to the Loan Agreement, the Note, the
Mortgage or the ~Restrictive .Covenants unless there shall have been
filed With the Trustee (i) an Opinion of Counsel stating that such
proposed amendment, change or modification of the Loan Agreement,
the Note, the Mortgage or the Restrictive Covenants is authorized
or permitted by this Indenture and complies with its terms and
'that upon execution it will be valid and binding upon the party or
parties executing it in accordance with its terms, and (ii) a
written opinion of Bond Counsel stating in effect that such
amendment, change or modification will not affect the tax-exempt
status of interest on the Tax-Exempt Bonds, and (b)(i) unless an
Event of Default has occurred and is continuing hereunder, shall
not, without the consent of the Borrower, execute any such
amendment, change or modification and (ii) if an Event of Default
has occurred and is continuing, shall not without the consent of
the Borrower, execute any such amendment, change or modification
.which adversely affects any rights or obligations of the Borrower.
ARTICLE XIII
MISCELLANEOUS
Section 1301. ~Consents, etc., of Bondholders. Any consent,
request, direction, approval, objection or other instrument
required by this Indenture to be signed and executed by the
Bondholders may ibe in any number of concurrent writings of similar
tenor and may be signed or executed by such Bondholders in person
or by agent appointed in writing. Proof of the execution of any
such consent, request, direction, approval, objection or other
instrument or ~of the writing appointing any such agent, if made in
the following manner, shall be sufficient for any of the purposes
of this Indenture, amd shall be conclusive in favor of the Trustee
with regard to any action taken under such request or other
instrument. The fact and date of the execution by any person of
any such writing may be approved by the certificate of any
officer in any jurisdiction who by law has power to take
acknowledgments within such jurisdiction that the person signing
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such writing acknowledged before him the execution thereof, or by
affidavit of any witness to such execution.
For all purposes of this Indenture and of the proceedings for
the enfo~rcement hereof, the Bondholder giving such a writing shall
be deemed to continue to be the owner of such Bond until the
Trustee shall have received notice in writing to the contrary.
Section 1302. Limitation ~of Rights. With the exception of
rights ~herein expressly conferred, nothing expressed or mentioned
in or to be implied from this Indenture or the Bonds is intended
or shall be construed to give to any person or company other than
the parities hereto, the Borrower and the owners of the Bonds, any
legal or equitable right, remedy or claim under or with respect to
this Indenture or any covenants, conditions and agreements herein
contained, this Indenture and all of the covenants, conditions and
agreements hereof ~being intended to be and being for the sole and
exclusive benefit of the parties hereto, the Borrower and the
-owners of the Bonds as herein provided.
Section 1303. Limitation of Liability of Officers, Directors,
etc.. of Issuer. No covenant, agreement or obligation contained
.herein shall be deemed to be a Covenant, agreement or obligation
of any past, present or future officer, director, employee or
agent of the Issuer in his individual capacity, and neither the
members of the Issuer nor any officer thereof executing the Bonds
shall be liable ~personally on the Bonds or be subject to any
~personat liability or accountability by reason of the issuance
thereof. No officer, director, employee or agent of the Issuer
shall incur any personal liability with respect to any other
action taken by him pursuant to this Indenture or the Act,
~provided such officer, dir.ector, employee or agent acts in good
~aith.
Sec%ion 1304. Notices. Unless otherwise provided herein, all
demands, notices, approvals~ consents, requests and other
communications hereunder shall be in writing and shall be deemed
to have been ~given When deliver~ed in person or mailed by first
class registered or certified mail, postage prepaid, addressed (a)
if to the Borrower, C/HP Cove, Inc., c/o Cornerstone Housing
~Corporation, Suite 200, 1350 Beverly Road, McLean, Virginia
22101-3634, Attention: President, with copies to C/HP Cove, Inc.,
c/o Housing .Partnership, Inc., Suite 409, 319 Clematis street,
West Palm Beach, Florida 33401, Attention: John Corbett and Baber
& Kalinowski, P.C., Suite 305, 3050 Chain Bridge Road, Fairfax,
Virginia 22030-2834, Attention: Brant Baber, Esq., (b) if to the
Rating Agency, Standard & Poor's, 25 Broadway, 21st Floor, New
York, New York 10004, (c) if to the Trustee, The Bank of New York,
at 10161 'Centurion Par.kway, 2nd Floor, Jacksonville, Florida
32256, and if to the Issuer at City of Boynton Beach, 100 East
Boynton Beach Blvd., Boynton Beach, FL 33435, Attn: City
Manager. A duplicate copy of each demand, notice, approval,
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.consent, request or other communication given hereunder by either
the Issuer or the Trustee to the other shall be given to the
Borrower. The Borrower, the Issuer and the Trustee may, by notice
given ~ereunder, designate any further or different addresses to
which '*subsequent demands, notices, approvals, consents, requests
or other communications shall be sent or persons to whose
attention the same shall be directed.
Section 1.305. Successors and Assiqns This Indenture shall
be binding upon, inure to the benefit of and be enforceable by the
parties and t.heir respective successors and assigns.
Section 1306.
Indenture shall be
jurisdiction, such
provision .hereof.
$everabilit¥. If any provision of this
held invalid by any court of competent
holding shall not invalidate any other
Section 13.07. Applicable Law. Thi.s Indenture
governed by the applicable laws of the State.
shall be
Section 1308. Counterparts. This Indenture may be executed
in several counterparts, each of which shall be an original and
all of which together shall constitute but one and the same
instrument.
Section 1309. Election under Section 142(d)(1) of the Code.
The Issuer her.eby elects, pursuant to Section l~2(d)(1) of the
:Code, to have the requirements of Section 142(d)(1)(A) of the Code
~apply for purposes of determining whether the Project is a
"qualified residential rental project."
IN WITNESS WHEREOF, the Issuer and the Trustee have caused
· this Indenture to be executed in their respective corporate names
Dy their duly .authorized officers, all as of the date first above
written.
(SEAL)
ATTEST: Mayor
CITY OF BOYNTON BEACH, FLORIDA
By:
~Clerk
THE BANK OF NEW YORK, AS TRUSTEE, ACTING
BY AND THROUGH THE BANK OF NEW YORK
TRUST COMPANY OF FLORIDA, N.A.,
as Trustee
By:
-64- 7964M
NUMBER
EXHIBIT A
(Form of 1996 Bonds)
INTEREST
RATE
UNITED STATES OF AMERICA
CITY OF BOYNTON BEACH, FLORIDA
Multi-Family Housing Mortgage Revenue Bond, Series 1996
{~Clipper Cove Apartments),
MATURITY
DATED DATE DATE CUSIP
-July 1, 1996
REGISTERED OWNER:
PRINCIPAL~AMOUNT:
'The City of Boynton Beach, Florida (the "Issuer") a political
subdivision and municipality of the State of Florida, for value
received, 'hereby promises to pay, upon presentation and surrender
hereof at the designate office (initially, New York, New York) of
The Bank of New York, as Trustee, acting by and through The Bank
of New York Trust Company of Florida, N.A., its agent, or its
successor in t-rust (the "Trustee"), solely from the sources
hereinafter described, to the registered owner hereof, or
registered assigns or legal representatives, the principal sum set
forth ~bove on fthe maturity date set forth above, subject to.prior
redemption as described below, and to pay, solely from such
sources, on January 1, 1997, and on each January 1 and July 1
thereafter, ~nterest thereon at the interest rate per year
specified above~ subject to adjustment as hereinafter provided
(computed on the basis of a 360-day year of twelve 30-day
months). Interest shall-be payable from the interest payment date
next preceding the date on which this Bond is authenticated,
unless this Bond is (a) authenticated before the first interest
payment date following the initial delivery of the BondS, in which
case it shall ~bear interest from its date, or (b) authenticated
after the fifteenth day of the month next preceding an interest
payment date, but prior to such intlerest payment date, in which
case it shall bear interest from such interest payment date, or
(c) authenticated upon an interest payment date, in which case it
shall bear interest 'from such interest payment date (unless
interest on this Bond is in default at the time of authentication,
in which case this Bond shall bear interest from the da~e to which
interest has been paid). Interest hereon shall be paid to the
person in whose name this Bond is registered at the close of
business on the fifteenth day (whether or not a Business Day) of
A-t 7982M
the month next preceding an interest payment date by check mailed
by the Paying Agent on the interest payment date to such person at
his address as it appears on the registration books kept by the
Trustee. Principal, premium, if any, and interest are payable in
lawful money of the united States of America.
Upon the occurrence of a Determination of Taxability, the
interest rate otherwise borne by this Bond shall be increased, but
not :decreased, to a rate determined by multiplying the rate
otherwise borne hereby by a fraction, the numerator of which is
one and the denominator of which is one minus the Maximum
Corporate ~Tax Rate as of the date of the Determination of
Taxability, provided that if such fraction is less than one, then
no inter.est rate adjust~ment shall be made.
THIS BOND AND THE INTEREST HEREON ARE LIMITED OBLIGATIONS OF
THE ISSUER PAYABLE SOLELY FROM THE REVENUES AND RECEIPTS DERIVED
BY THE ISSUER FROM THE NOTE AND OTHER SECURITY THEREFOR, WHICH
RE%q~NUE$ AND RECEIPTS HAVE BEEN PLEDGED AND ASSIGNED TO SECURE
PAYMENT HEREOF. THIS BOND IS NOT A DEBT OF THE STATE OF FLORIDA
OR ANY POLITICAL SUBDIVISION THEREOF OTHER THAN THE ISSUER,
LIMITED AS AFORESAID THE ISSUER' SHALL NOT BE OBLIGATED TO PAY THE
PRINCIPAL OF, PREMIUM, IF ANY, ON, OR INTEREST ON THIS BOND OR
iOTHER COSTS INCIDENT HERETO EXCEPT FROM THE REVENUES AND RECEIPTS
PLEDGED AND ASSIGNED THEREFOR, AND NEITHER THE FAITH AND CREDIT
NOR THE TAXING POWER OF THE ISSUER, IS PLEDGED TO THE PAYMENT OF
THE PRINCIPAL OF, PREMIUM, IF ANY, ON, OR INTEREST ON THIS BOND OR
OTHER COSTS INCIDENT HERETO.
This Bond is one of an issue of $ City of Boynton
Beach, Florida Multi-Family Housing Mortgage Revenue Bonds, Series
1996 (Clipper Cove Apartments) (the "Bonds"), of like date and
tenor, except as to number, interest rate, maturity date and
denomination. The Bonds are being issued for the purpose of
making a loan in the principal amount of $ (the
· 'Loan") to C/HP Cove, Inc., a Florida corporation not-for-profit
and an organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as. amended (the "Code") and exempt from tax
under Section 501(a) of the Code (the "Borrower"), for the primary
purpose of providing funds to the Borrower to refinance a
multi-family residential rental project in the City of Boynton
-Beach, Florida (the "Project"), pursuant to a Loan Agreement,
dated as of July 1, 1996 (the "Loan Agreement"), between the
Issuer and the Borrower. The Bonds are issued under and are
equally and ratably secured by an Indenture of Trust and
ASsignment of Mortgage, dated as of July 1, 1996 (the
"Indenture"), between the Issuer and the Trustee, which provides
for the security for the Bonds and any additional bonds issued
pursuant to the Indenture. The Issuer has assigned as security
for the Bonds certain of the Issuer's rights under the Loan
Agreement and the Borrower~'s promissory note in the principal
AL2 7982M
amount of $. (the "Note"), issued and delivered
pursuant to the Loan Agreement and evidencing the Borrower's
obligation to repay the Loan. The Note is secured by a Mortgage
and Security Agreement (the "Mortgage,) granting a lien on the
~roject. Reference is hereby made to the Indenture, the Loan
Agreement, the Mortgage and the Note and to all amendments and
The Bonds may not be called for redemption by the Issuer
except as .provided in the
1. The Bonds are su!
option and direction of th,
a redemption price of 100
accrued interest to the
days after the occurrence
ndenture and as provided below:
ect to redemption by the Issuer at the
Borrower, in whole but not in part, at
of the principal amount thereof plus
edemption date at any time within 365
a Determination of Taxability.
whole or in part at the e~
price of 100% of the princ
accrued interest to the re~
the Borrower shall elect r
substantially the same ~conc
provided no such partial
partial redemption will
Bonds. "Material Damage"
any or all of the Project
thereof or loss thereof
amount to at least $1,000~
The Bonds are required to be redeemed by the Issuer in
~rliest practicable date at a redemption
ipal amount thereof to be redeemed plus
lemption date if, after Material Damage,
Lot to repair or restore the Project to
tition as prior to such Material Damage;
~demption shall be permitted unless such
t affect the outstanding rating on the
shall mean damage to or destruction of
by fire or other casualty, condemnation
)ecause of failure of title, equal in
00.
3. As and for a sinking fund for the retirement of the Bonds
maturing on 1, , the Issuer shall redeem Bonds on the
dates set forth below in the principal amounts respectively set
~ort'h opposite such dates at a redemption price of 100% of the
princf*pal amount of the Bonds to be redeemed plus accrued interest
.to the redemption date:
Date Amount
*Final Maturity.
A-3 7982M
4. The Bonds are subject to redemption by the Issuer at the
option and direction of the Borrower on or after January 1, 2006,
in whole on any date or in part on a~y interest payment date, at
the following redemption prices (expressed as a percentage of the
principal amount to be redeemed) plus accrued interest to the
redemption date:
Date
Redemption Price
January 1, 2006, to and including December 30, 2006
January 1, 2007, to and including December 30, 2007
~January 1, 2008, and thereafter
102%
101%
100%
If less than all of the Bonds are called for redemption, the
Bonds to be redeemed shall be selected as provided in the
Indenture.
If any of the Bonds or portions thereof are called for
redemption, the Trustee shall send to the registered owner of each
Bond to be redeemed notification thereof by first class mail
(postage prepaid) not less than 30 nor more than 60 days prior to
the redemption da%e, at his address as it appears on the
registration books; provided, however, that failure to give any
such notice, or any defect therein, shall not affect the validity
of any proceedings for the redemption of any Bonds with respect to
which no such failure or defect has occurred. Provided funds for
their redemption are on deposit at the' place of payment on the
redemption date, all Bonds or portions thereof so called for
redemption shall cease to bear interest on such date, shall no
longer be secured by the Indenture and shall not be deemed to be
~outstanding under the provisions of the Indenture.
Subject to certain limitations set forth in the Indenture, at
· any time this Bond is subject to redemption pursuant to Paragraphs
1., 2. or 4. above, this Bond shall also be subject to mandatory
tender, in whole or in part, to the Trustee for purchase by the
Borrower, or the Borrower's designee, at a tender price equal to
the principal amount hereof, plus accrued interest to the tender
date, plus any premium that would apply were such 1996 Bonds to be
called for redemption on the tender date pursuant to Paragraph 1.
2., or 4., as applicable.
In the event this Bond is called for mandatory tender, the
Trustee shall send to the registered owner hereof notification
thereof, which shall specify the tender date, the tender price and
the place or places where amounts due upon such tender will be
payable (which shall be the Principal Office of the Trustee), and,
if less than all the Bonds are to be subject to mandatory tender,
the numbers of the Bonds and the portions of the Bonds to be
tendered and shall state that on the tender date, the Bondholders
A-4 7982M
~f ~he Bonds subject to mandatory tender shall cease to be
~enti~led %o any ~further interest thereon. Such notice shall be
~i~en by ma~l not less than ten (10) days nor more than thirty
~3~!0) days prior to the date fixed for tender by registered or
· certified mail %o the owner of each Bond to be subject to
ma. Rdatory tender at ~his address as it appears on the registration
~ Trustee. Failure to give any notice of tender or any
in shall not affect the validity of any proceedings
· or ~he tender of any Bonds with respect to which no such failure
occurred, and ~ny notice mailed as provided herein shall
be presumed to have been given whether or not
actual!y Teceived by any Bondholder.
On the ~ender ~ate, Bonds subject to mandatory tender will be
~deemed ~o have ~been purchased whether or not delivered by the
Bondholder thereof, provided funds are on deposit with the Trustee
~or the purChase of such Bonds. In the event funds sufficient to
~pa~ %he purchase price of all Bonds are not on deposit with the
· rustee for the purchase of all Bonds on the tender date, the
tender shall be rescinded, and the Trustee shall return all Bonds
to ~th~ tendering ~ondholders, and shall also send notice, by first
~class mail, to the holders of the Bonds notifying them that the
~en'der has been rescinded. In the event any Bond subject to
~mandatory tender is not so tendered, the Trustee will authenticate
and ~eliver a replacement Bond of like series and maturity as the
~Bond not tendered, and bearing a number not contemporaneously
outstanding, and %he Bond which was not tendered shall no longer
be Outstanding under the Indenture, except that the Bondholder
· ~hereof shall be entitl-ed to receive the tender price therefor
~pon tender to the Trustee. On the tender date, the Trustee shall
aut'henticate and register replacement Bonds for the Bonds tendered
~r ~e~med tendered in the name of the Borrower or its designee and
s.h~ll pay {he tender price of Bonds tendered to it from amounts
~held b~ it for such purpose under the Indenture.
The transfer of this Bond may be registered by the registered
~wner hereof in person or by his duly authorized attorney or legal
xepr~sentati~e Bt the principal corporate trust office of the
~Trns{ee,-but :only in the msnner and subject to the limitations and
~c~ndit-ions provided in the Indenture and upon surrender and
cancellation of th~s Bond. Upon any such registration of
· ransfer, ~he ~ssuer shall execute and the Trustee shall
~uthenticate and deliver in exchange for this Bond a new Bond,
· egistered in %he name of the transferee, of authorized
~denominati~ns. The Trustee, the Issuer and the Borrower shall,
prior to due presentment for registration of transfer, treat the
registered owner as the person exclusively entitled to payment of
principa-1, premium, if any, and interest and the exercise of all
other rights and powers of the owner, except that all payments of
~interest shall-be made to the registered owner as of the fifteenth
d~ of the month preceding each interest payment date.
A-5 7982M
Any exchange or registration of transfer shall be without
charge except that the Trustee shall make a 'charge to any
bondholder requesting such exchange or registration in the amount
~of -any tax or other governmental charge required to be paid with
respect-thereto.
All acts, conditions and things required to happen, exist or
be performed precedent to and in the issuance of this Bond have
happened, exist'and have been performed.
This Bond shall not become obligatory for any purpose or be
entitled to any security or benefit under the Indenture or be
valid until the Trustee shall have executed the Certificate of
Authentication appearing hereon.
IN WITNESS WHEREOF, the City of Boynton Beach, Florida has
caused this Bond to be signed by the manual or facsimile signature
of its Mayor, its seal or a facsimile thereof to be printed hereon
and attested by the manual or facsimile signature of its Clerk,
and this Bond to be dated July 1, 1996.
CITY OF BOYNTON BEACH, FLORIDA
~$EAL)
By
Mayor
ATTEST:
.Clerk
(Form of Trustee's Certificate of Authentication)
Date of Authentication:
This Bond is one of the Bonds described in the within-
mentioned Indenture.
THE BANK OF NEW YORK, acting by
and through The Bank of New York
Trust Company of Florida, N.A.,
its agent, as Trustee
By
Authorized Signatory
A-6 7982M
(Form of Assignment)
~OR ~ALUE RECEIYED the undersigned hereby sells,
transfe~rs
unto
assigns and
(Please print or typewrite Name and Address,
including zip code of Transferee)
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
TRANSFEREE
the within Bond and all rights thereunder, and hereby
irrevocably constitutes and
appoints
AttorneF to transfer the within Bond on the books kept for
registration thereof, with full power of substitution in the
~premises.
Dated:
· Signature Guaranteed
Registered Owner:
NOTICE: Signature(s) must be
by a member firm of the New
York Stock ExChange or a bank
or-commercia~ trust company.
NOTE: The signature above must
correspond with the name of the
registered owner as it appears on
the front of this Bond in every
particular, without alteration
or enlargement or any change
whatsoever.
(End of Form of Assignment)
A-7 7982M
EXHIBIT B
No.
REQUISITION
Sirs:
I hereby requisition from the Project Fund created by the
Indenture of Trust and Assignment of Mortgage, dated as of
1, 1996 (the "Indenture"), between the City of Boynton Beach,
Florida and you, as Trustee, the sum of $ to be paid
to the parties identified on Schedule A hereto. I certify the
amount requisitioned hereby is being used in a manner permitted by
the Financing Instruments (as defined in the Indenture).
C/HP COVE, INC.
By:
Title:
B-1 7987M
EXHIBIT C
Certificate of Coverage
Letterhead of (Underwriter)(Borrower)
Certification of "A" rated debt coverage
(Project name. location)
Clipper Cove Apartments
Bond Issue
Maximum annual debt service on "A" rated debt
as shown per %he attached schedule of bond payments
LESS:
annual interest income from Debt Service
Reserve Fund and Operating Reserve Fund
reinvestment as supported by
GIC contract attached
e
Annual interest income from principal
interest reinvestment as supported by
GIC contract attached
Net annual debt service on "A" rated debt
Net operating income available for rated
~debt per the attached "Certification of
Annual budget/Net Operating Income Available
for Rated Debt"
Calculated "A" rated debt coverage
,A" rated debt coverage required by
the Indenture
I. . representative of
(Underwriter)(Borrower) for the Clipper
Cove Apartments bond issue do hereby certify that the above debt
coverage calculations are accurate.
Date
C-1 7987M
~ 810 0M/9
EXHIBIT "B"
LOAN AGREEMENT
Sixth Draft
~6/20/96
7967M/36
LOAN AGREEMENT
between
CITY OF BOYNTON BEACH, FLORIDA
and
C/HP COVE, INC.
Dated as of July 1, 1996
Note:
The interest of the City of Boynton Beach, Florida in
this Loan Agreement has been assigned (except for the
rights of and amounts payable to the City of Boynton
Beach, Florida pursuant to Sections 4.1(b), 5.3 and
6.4 hereof) pursuant to an Indenture of Trust and
Assignment of Mortgage dated as of the date hereof
from the City of Boynton Beach, Florida to The Bank of
New York, as Trustee, acting by and through The Bank
of New York Trust Company of Florida, N.A., its agent.
7967M/37
TABLE OF CONTENTS1
ARTICLE I -
DEFINITIONS AND RULES OF CONSTRUCTION
Paqe
Section 1.1.
Section 1.2.
Definitions ...........................
Rules of Construction .................
ARTICLE II - REPRESENTATIONS
Section 2.1.
Sectio~n 2.2.
Representations by Issuer .............
Representations by Borrower ...........
ARTICLE III - REFINANCING OF PROJECT
Section 3.1.
Section 3.2,
Section 3.3.
Section 3..4.
Agreement to Make Loan ................
Agreement to Issue 1996 Bonds .........
Agreement to Pay Costs of the Project
Limitation of Issuer's Liability ......
ARTICLE IV - PAYMENT
Section 4.1.
Section 4.2.
Section 4.3.
Secti. on 4.4.
Amounts Payable ....................... 8
Payments Assigned ..................... 9
Default in Payments ................... 9'
Obligations of Borrower ............... 9
ARTICLE ¥ -
SPECIAL COVENANTS
Section ~5.1.
Section 5.2.
Section 5.3.
Section ~5~4.
Section <5.5.
Section 5.6.
Section 5.7.
Section 5.8.
Section 5.9.
Section 5.10.
Section 5.11.
Section 5.12.
Restrictive Covenants ................. 10
Inspection of Project and Records ..... 10
Indemnification by Borrower ........... 11
Use of Proceeds; Other Matters With... 12
Respect to Project and 1996 Bonds ..... 16
Reference to Bonds Ineffective after
BondS Paid ............................ 16
Financial Records and Statements ...... 16
Certificate as to No Default .......... 16
Obligation of Borrower to Furnish Certain
Information to the Issuer ............. 16
Notice of Suits ....................... 16
Permits ............................... 17
Maintenance, Modifications and Use of
Project ............................... 17
'Taxes, Other Governmental Charges and
Utility Charges ....................... 17
1 This Table of Contents shall not constitute part of this
Loan Agreement, and is for convenience of reference only.
7967M/38
TABLE OF CONTENTS1
Section
Section'5.t4.
ManaGement Services ...................
ContinuingDisclosure .................
Page
18
18
ARTICLE VI - .~ENTSOF ,DEFAULT AND REMEDIES
Section 6.1.
Section 6.2,
Section 6.3.
Section 6.4.
Section ~6~5.
Event of Default Defined ............. . 23
~Remedies on Default ................... 24
Ho Remedy Exclusive ................... 25
Extraordinary Fees and Other Expenses 25
Mo Additional Waiver Implied by
~One Waiver ............................ 25
ARTICLE VII - ~REPA!rMENT
Section 7.1.
Prepayment ............................ 25
ARTICLE VIII -
,MISCELLANEOUS
Section 8.1.
Section 8.2.
Section ~8,3.
Section 8.-4.
Section 8.5,
Section 8..6.
Section:8.7.
Section 8.8,.
Section ~.9.
Term of Loan Agreement ................ 26
Notices, ,etc .......................... 26
Amendments to Loan Agreement .......... 26
~Successors and Assigns ................ 26
~Severability .......................... 26
~pplicabte Law ........................ 27
Counterparts .......................... 27
Issuer'May Perform Borrower's
Obligations ........................... 27
Limited Obligations of Borrower ....... 27
Exhibit
Exhibit
Exhibit
,A-
B -
C -
~Note
Mortgage and Security Agreement
i~Declaration of Restrictive Covenants
7 967M
THIS LOAN AGREEMENT made as of the 1st day of July, 1996,
between CITY OF BOYNTON BEACH, FLORIDA, a political subdivision
and municipality of the State of Florida (the "Issuer"), and
~C/HP COVE, INC., a Florida corporation not-for-profit (the
"Borrower");
WITNESSETH:
'~WHEREAS, ~ursuant to Article VIII, Section 2 and Article
VII, Section 10(.c) of the Florida Constitution, the Charter of
the Issuer and Chapter 166, Florida Statutes (collectively, the
"Act"), the ISsuer is authorized to issue bonds to provide
residential rental property for family units; and
WHEREAS, in order to further the purpose of the Act, the
Issuer .proposes to issue its Multi-Family Housing Mortgage
Revenue Bonds, Series 1996 (Clipper Cove Apartments), in the
principal amount of $ (the "1996 Bonds"), and use the
proceeds thereof to make a loan (the "Loan") for the principal
purpose of providing funds to the Borrower to refinance a
multi-family ~esidential rental project in the City of Boynton
Beach, Florida (the "Project"); and
WHEREAS, the Loan will be evidenced by promissory note
executed by the Borrower (the "Note") in favor of the Issuer in
the principal amount of $ which will be secured by a
Mortgage and Security Agreement (the "Mortgage") granting a lien
on and security interest in the Project; and
WHEREAS, the Issuer and the Borrower desire to set forth
the terms and conditions with respect to such financing;
NOW, THEREFORE, for and in consideration of the premises
and the mutual covenants hereinafter contained, the parties
hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AN~ RULES OF CONSTRUCTION
'Section 1.t. Definitions. Ail words and terms defined in
the Indenture (as defined below) or the Restrictive Covenants
(as defined in the Indenture) shall have the same meaning in
this Loan Agreement. In addition, the following words and terms
shall have the following meanings unless the context otherwise
requires:
"Agreement" or "Loan Agreement" shall mean this Loan
Agreement, including .any amendments hereto as permitted by the
Indenture.
"Even% .of Default" shall mean any of the events enumerated
in Section 6.1.
"Financing Instruments" shall mean this Loan Agreement, the
Indenture, the 1996 Bonds, the Mortgage, the Note and the
Restrictive Covenants.
"Hazardous Materials"
~defined in Section 2.2(i).
shall mean Hazardous Materials as
"Indemnitees" shall mean the Issuer, the Trustee, their
current amd future officers, directors, members, employees and
.agents and each ~person, if any, who "controls" the Issuer or the
Trustee within the meaning of Section 15 of the Securities Act
of 11933, as amended, or Section 20(a) of the Securities Exchange
Act of 1934, as amended.
"Indenture" shall mean the Indenture of Trust, dated as of
the date hereof, between the Issuer and The Bank of New York, as
Trustee, acting by and through The Bank of New York Trust
Company of Flo~rida, N.A., its agent including any amendments
thereof or supplements thereto.
"LOan" shall mean the loan from the Issuer to the Borrower
in the amount of $
"Noteholder" shall mean the Trustee, as assignee of the
Issuer, as holder of the Note, or any subsequent holder.
"Official Statement" shall mean the Official Statement,
dated , 1996, with respect to the 1996 Bonds.
Section 1.2. Rules of 'Construction° The following rules
shall apply t.o the construction of this Loan Agreement unless
the context otherwise requires:
(a) Words importing the singular number shall include
the ~plural number and vice versa.
(b) Words importing the redemption or calling for
redemption of Bonds shall not be deemed to refer to or cOnnote
the payment of Bonds aS their stated maturity.
(c) Ail references herein to particular articles or
sections are references to articles or sections of this Loan
Agreement unless .otherwise noted.
(d) The headings herein are solely for convenience of
reference and shall not constitute a part of this Loan Agreement
nor-shall they affect its meaning, construction or effect.
-2- 7967M
ARTICLE II
REPRESENTATIONS
Section 2,1. Representations by Issuer. The Issuer makes
the following representations as the basis for its undertakings
hereunder:
(a) The Issuer is a political subdivision and
municipality of the State of Florida duly.created and existing
pursuant to the Act, has the power to enter into the Financing
Instruments to which it is a party and the transactions
contemplated thereby and to carry out its obligations thereunder
and to issue the 199.6 Bonds, and by proper action has duly
authorized the Issuer's execution and delivery of, and its
performance under, such Financing Instruments and all other
agreements and instruments relating thereto.
(b) The Issuer proposes to issue its 1996 Bonds to
finance the Cost of the Project under the Indenture and the
payments on the Note will be assigned, without recourse, and
;pledged ~by-the Issuer to the Trustee as security for payment of
the principal of, premium, if any, and interest on the 1996
~Bonds and payment of the expenses inCident to the issuance
~hereof.
(c) To the ~best of its knowledge, the Issuer is in
compliance in 'all respects with the Act, all other existing
taws, rules, regulations, judgments, decrees and orders
applicable to or binding on it and the provisions of all
agreements and instruments by which it is bound, a default under
or violation of which would prevent it from issuing and selling
the 1996 Bonds, making the Loan, executing and delivering the
Financing Instruments to which it 'is a party or consummating the
'transactions contemplated thereby, and no event has occurred and
is continuing under the provisions of any such agreement or
instrument or -otherwise that with the lapse of time or the
giving of notice, or both, would constitute such a default or
violation.
(d) The execution and delivery by the Issuer of the
Financing Instruments to which it is a party and its compliance
with the terms and conditions thereof will not, to the best of
the Issuer's knowledge, constitute a default under or
violation of the Act or any law, rule, regulation, judgment,
order, decree, agreement or instrument by which it is bound.
(e) .No further approval, consent or withholding of
objection on the part of any regulatory body, Federal, state or
local, is required in connection with (1)~ the issuance and
delivery of the 1996 Bonds by the Issuer, (2) the execution or
delivery of or compliance by the Issuer with the terms and
-3- 7967M
conditions of the other Financing Instruments to which it is a
part~, or (3) ithe 'assignment by the Issuer to the Trustee of its
rights under this Loan Agreement, the Mortgage and the NOte.
The consummation by the Issuer of the transactions set forth in
the ~996 Bonds and this Loan Agreement in the manner and under
the terms and conditions as provided herein will comply with all
applicable state, local or Federal laws and any rules and
regulations pr. omulgated thereunder by any regulatory authority
or.agency.
(f) No litigation, inquiry or investigation of any
kind in or by any judicial or administrative court or agency is
pending or to ~ts knowledge threatened, against the Issuer with
respect to {1) the organization and existence of the Issuer, (2)
its authority to execute or deliver the Financing Instruments to
which it is a party, (3) the validity or enforceability of any
such 'Financing Instruments or the transactions contemplated
:thereby, (4-) the title of any officer of the Issuer who executed
such Financing Instruments or (5) any authority or proceedings
~elating to the execution and delivery of such Financing
Instruments on ~ehalf .of the Issuer.
(g) The Issuer has found that the issuance of the
1996 Bonds will serve the purposes of the Act and that the Loan
to the Borrower is in furtherance of the purposes of the Act.
(h) 'The Issuer is not in default in the payment of
the principal of or interest on any of its indebtedness for
borrowed money and is not in material default under any
instrument under or subject to which any indebtedness for
borrowed money has been incurred, and no event has occurred and
is continuing under the provisions of any such instrument that
with the lapse ~of time or the giving of notice, or both, would
constitute a material event of default thereunder.
{i) The ~evenues and receipts to be derived from the
Note, the Mortgage and this Loan Agreement have not been pledged
previously by the Issuer to secure any of its notes or bonds
other than the 1996 Bonds.
The Issuer makes no representation, covenant or agreement
as to the financial position or business condition of the
Borrower or the Project an~d does not represent or warrant as to
any statements, materials, representations or certifications
furnished by the Borrower in connection with the sale of the
1996 Bonds or as to the correctness, completeness or accuracy
thereof.
Section 2.2. Representations by Borrower.
makes the 'following representations as the
undertakings hereunder:
The Borrower
basis for its
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(a) The Borrower iS a corporation not-for-profit duly
organized, validly existing and in good Standing under the laws
of the State of Florida, has the power to enter into the
Financing Instruments to which it is a party and to undertake
%he transactions contemplated thereby and to perform its
'obligations thereunder and by proper action has duly authorized
the execution and delivery of such Financing Instruments and the
:performance of its obligations thereunder.
(b) The 'Borrower has received a determination letter
from the Internal Revenue Service recognizing that it is an
organization described in Section 501(c)(3) of the Code and that
it is not a private foundation within the meaning of Section
509(a) of the Code; such letter has not been modified, limited,
revoked or superseded; and the Corporation has conducted its
operations and filed all required reports or documents with the
Internal Revenue Service so as to maintain the exemption.
(c) The ~Borrower intends to operate the Project, or
to cause it to be operated, as a multi-family residential rental
project meeting all the requirements of Section 142(d) of the
Code for so long as required by such Section.
(d) The Borrower is not in default under or in
~iolation of, and the execution, delivery and compliance by the
Borrower with the terms and conditions of the Financing
Instruments to which it is a party, the performance by the
Borrower of its obligations thereunder and the consummation by
the Borrower of the transactions herein contemplated do not and
will not conflict .with, or constitute a breach or result in a
violation of (and no event has occurred and is continuing which
with the lapse of time or the giving of notice, or both, would
constitute or result in such a default or violation) (1) the
Borrower's articles of incorporation or bylaws, (2) any
agreement or other instrument to which the Borrower is a party
or by which it is bound, or (3) to the knowledge of the
Borrower, any constitutional or statutory provision or order,
rule, regulation, decree or ordinance of any court, government
or governmental authority having jurisdiction over the Borrower
or its property.
(e) The -Borrower is not in default in the payment of
%he principal of or interest on any of its indebtedness for
borrowed money and is not in default in any material respect
under any instrument under and subject to which any indebtedness
for borrowed money has been incurred, and no event has occurred
and is continuing under the provisions of any such agreement
that with the lapse of time or the giving of notice, or both,
would constitute an event of default thereunder~
(f) To the Borrower's knowledge, there is no
litigation at law or in equity or any proceeding before any
-5- 7967M
· court or .governmental agency the Borrower or any of
~t-s -officers pending or threatened, except those in which any
liability -of %he Borrower is adequately covered by insurance or
in which any judgment or order would not have a material adverse
~effect upon the business or the assets of the Borrower, nor to
the Borrower"s knowledge, is there any such litigation or
proceeding tha~ would materially and adversely affect, in any
.way, its existence or authority to do business, the operation of
the Project., the ~alidity or enforceability of any Financing
Instruments to which it is a party or the performance of the
Borrower'.s obligations thereunder.
(g) The ~Borrower has -obtained, or will obtain in a
timely manner, all consents, approvals, permits, authorizations
and orders of any governmental or regulatory authority that are
required 'to be obtained by the Borrower as a condition precedent
to the execution and delivery of the Financing Instruments to
which it is a party or the performance by the Borrower of its
obligations thereunder, or that are required for the operation
of the Project.
(h) When executed and delivered, the Financing
Instruments to which the Borrower is a party will be valid and
binding obligations or agreements of the Borrower enforceable in
accordance with their respective terms.
(i) The Borrower and its assets fully comply in all
material respects with all Federal, state and local
~environmental laws, rules, regulations, ordinances and other
requirements including, without limitation, those which relate
to ithe production, storage, disposal or use of any and all
Hazardous Materials. The Borrower covenants that the Project
shall be 'kept free of Hazardous Materials and shall not be used
to generate, manufacture, refine, transport, treat, store,
~handle, dispose of, transfer, produce or process Hazardous
Materials, except in connection with the normal maintenance and
operation of any portion of the Project. The Borrower shall
comply, or cause there to be compliance, with all applicable
Federal, state and local laws, ordinances, rules and regulations
with respect to Hazardous Materials and shall keep, or cause to
'be kept, the Project fre~ and clear of any liens imposed
~pursuant to .such laws, ordinances, rules and regulations. In
the event that the Borrower receives any notice from any
governmental agency or any lessee with regard to Hazardous
Materials on, from or affecting the Project, the Borrower shall
immediately notify %he Trustee and the IssUer. The Borrower
shall conduct and complete, or cause there to be conducted and
completed, all investigations, studies, sampling and testing and
alt remedial, removal and other actions necessary to clean up
and remove all Hazardous Materials on, from or affecting the
Project in accordance with all applicable Federal, state and
local laws, .ordinances, rules, regulations and policies. For
-6- 7967M
~purposes of this subsection (i), ~'Hazardous Materials" shall
include, without limitation, any petroleum, petroleum products
or fractions or components thereof, flammable explosives,
radioactive materials, hazardous materials, hazardous wastes,
hazardous .or toxic substances, or related materials, asbestos or
any materials containing asbestos, or any other similar
substance or material as defined by any Federal, State or local
ordinance, rule or regulation including,
the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C.
sections 9601 et seq.), the Hazardous Materials Transportation
ACt, as amended (49 U.S.C. sections 1801 et seq.), the Resource
.Conservation and Recovery Act, as amended (42 U.S.C. sections
9601 et seq.), and the regulations adopted and publications
promulgated pur.suant thereto.
ARTICLE III
REFINANCING OF PROJECT
Section 3.1. Agreement to Make Loan. The Issuer agrees to
make, but solely from the proceeds of the 1996 Bonds, and the
Borrower agrees to accept, the Loan for the principal purpose of
refinancing the Project and paying costs incidental thereto.
The Borrower's obligation to repay the Loan shall be evidenced
by the Note substantially in the form attached hereto as
Exhibit A and secured by the Mortgage substantially in the
form attached hereto as Exhibit B. The Borrower agrees to use
the proceeds of the Loan to refinance the Project in accordance
with the provisions of the Indenture and to make all payments
required hereunder and under the Note, subject to the limitation
of Section 4.4, when and as the same shall become due. Subject
to such limitation, the Borrower acknowledges and agrees that it
is the intent of the Borrower to make, and the Borrower agrees
to ~make, or cause to be made, payments required under the Note
and this Loan Agreement when and as the same shall become due.
Section 3.2. Agreement to Issue 1996 Bonds. In order to
provide funds for the principal purpose of refinancing the
Project, the Issuer shall, simultaneously with the execution and
delivery ~hereof, proceed with the issuance of the 1996 Bonds
bearing interest, maturing and having the other terms and
provisions set fort'h in the Indenture and, as security for the
'1996 Bonds, shall pledge and assign, without recourse to the
Trustee (a) all of its right, title and interest in and to the
Note, the Mortgage and this Loan Agreement (except for the
rights of the Issuer pursuant to Sections 4.1(b), 5.3 and 6.4)
and all revenues and receipts therefrom and the security
therefor, (b) the amounts on deposit from time to time in the
funds established under the Indenture, and (c) the right to
enforce the Restrictive Covenants as provided in Section 405 of
the Indenture. All revenues and assets pledged and assigned
-7- 7967M
.hereby Shall .immediately be sUbject to the lien of such' pledge
without any physical delivery thereof or any further act. By
its ,e~ecution ~of this Loan Agreement, the Borrower conclusively
acknowledges its approval of all the terms and conditions of the
Indenture.
Section 3.3. A~reement to Pay Costs of the Project. The
~Borrow~r shall-use proceeds of the Loan only to pay Costs of the
Project.
Section .3..~4. Limitation of Issuer's Liability. Anything
contained in -this Loan Agreement or the other Financing
Instruments to the contrary notwithstanding, no obligation that
the Issuer ~:may incur in connection with the undertaking of the
Project ~or %he ,pa!~ment of money shall be deemed to constitute a
debt or general Obligation of the Issuer but any such obligation
shall be ~payable solely from the proceeds of the 1996 Bonds, the
payments ~made hereunder and under the Note and the security for
~he Note, .including the Mortgage. Neither the members of the
City 'Commission of the Issuer nor any persons executing the 1996
Bonds shall be liable personally on the 1996 Bonds by reason of
the issuance thereof. The 1996 Bonds shall be limited
obligations of the Issuer as provided therein and in the
Indenture.
ARTICLE IV
PAYMENT
Section 4.1. Amounts ~ayable. (a) The Borrower covenants
to make payments required by the Note, as and when the same
become due.
.(b) The Borrower also shall pay, or cause to be paid,
as and when :t-he same become due, unless paid from the Expense
Fund or ~he Revenue Fund, (1) to the Trustee, its reasonable
fees :for services rendered and for expenses reasonably incurred
'~y it as Trustee ,under the Indenture, including without
limitation the reasonable fees of its counsel, all reasonable
charges for exchange or registration of transfer of Bonds, any
reasonable cost or expense necessary to cancel and discharge the
Indentur~e and Mortgage upon ~payment in full of the Bonds and the
reasonable fees and expenses of any agent engaged by the Trustee
pursuant to section 1001'(m) of the Indenture; (2) to the Rating
Agency, a fee :of $2,50'0 on each January 1 beginning January 1,
1997 and a .fee of $45,000 apon issuance of the 1996 Bonds; (3)
to the Issuer, all reasonable and necessary costs and expenses
of ~he Issuer directly related to the issuance of the 1996
Bonds; and (4) to the Trustee and Issuer, all other amounts that
the Borrower agrees to pay under the terms of this Loan
Agreement; ~provided, however, that the aggregate of all such
amounts paid to the Issuer shall not equal or exceed an amount
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wh'ich would cause the "yield" on th~ Loan Agreement, the Note or
any other "acquired purpose Obligation" to be "materially
higher" tha~ the "yield" on the applicable Tax-Exempt Bonds, as
such quoted te~ms are defined in the Code.
(c) Pursuant to the Mortgage, the Borrower has
pledged and assigned %o the Issuer, and its successors and
assigns, including the Trustee, its interests in all receipts,
~rentals and other amounts received with respect to the Project,
and the Borrower agrees to pay all receipts, rentals and other
amounts received with respect to the Project, when received,
directly to the Trustee for deposit in the Revenue Fund. If the
~total of suCh amounts is less than the amounts to be paid by the
~orrower under 'sUbsections (a) and (b), the Borrower shall
.none%.helesS, but subject to Section 8.9 hereof, be obligated to
make ~futl payment of all amounts due under subsections (a) and
Section 4.2. Payments Assiqned. It is understood and
agreed that all payments with respect to the Loan, as well as
the Issuer's other rights under this Loan Agreement and the Note
(except its rights to indemnification pursuant to Section 5.3
and payment of its fee and its costs and expenses pursuant to
Sections 4.1(b) and 6.4), are assigned by the Indenture to the
Trustee. The Borrower consents to such assignment and agrees to
pay to the Trustee all amounts payable by the Borrower that are
so assigned, including all receipts with respect to the Project.
Section 4.3. Default in Payments. If the Borrower should
fail to make payments required by the Note or the Mortgage or if
t~he Borrower should fail to make any other payment required
hereunder ~when due, the Borrower, to the extent permitted by
law, shall ~PaF interest with respect to the payments thereon at
the maximum rate on any of the Bonds from the due date until
paid.
Section 4.4. Obli~ations of Borrower. The obligation of
the Borrower to make payments on the Note, to make all other
payments provided for herein and to perform and observe the
other agreements and covenants on its part herein contained
shall be absolute and unconditional, irrespective of any defense
or any rights ~of setoff, recoupment or counterclaim it might
otherwise hav.e against the Issuer, the Trustee or any other
person. Subject to prepayment of the Note in full and
termination as provided herein, the Borrower shall not suspend
or discontinue any such payment hereunder or on the Note or fail
to perform and observe any of its other agreements and covenants
contained herein or terminate this Loan Agreement for any cause,
including, without limiting the generality of the foregoing, any
acts or circumstances that may deprive the Borrower of the use
and enjoyment of the Project, failure of consideration or
commercial frustration of purpose, any damage to or destruction
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of the Project or any part thereof, the taking by eminent domain
of titl~e to .or the right to temporary use of all or any part of
the ~roject, any change in the tax or other laws of the United
States of <America, the ~ate ~of Florida or any political or
taxing subdivision of either thereof, or any failure by the
Issuer to perform and observe any agreement or covenant, whether
express ~r implied, or any duty, liability or obligation arising
out of ~or connected with this Loan Agreement.
The Issuer and the ~Borrower agree'that the assignment made
hereby and by ~he Indenture is irrevocable and inures to the
Trustee and its successors and assigns and that they will not,
-while such assignment is in effect or thereafter until they have
received from the Trustee notice of the termination of such
assignment, take any action which is inconsistent with this
assignment, or-make or suffer to be made any other assignment,
designation or direction of the subject matter hereof, and that
any such- other assignment, designation or direction shall be
void. 'The Issuer agrees not to waive, excuse, condone or in any
manner release or ~discharge the Borrower under the Note or
hereunder of or from the obligations, covenants, conditions and
agreements by the Borrower to be performed, including the
obligation to make the payments called for under the Note and
hereunder in the manner and at the place and time specified
therein and herein. The assignment made hereby shall not in any
way impair or 'diminish any obligation of the Issuer or the
Borrower under this Loan Agreement, nor shall any of their
obligations De imposed upon the Trustee.
ARTICLE V
SPECIAL COVENANTS
~$ection 5.1. ~Restrictive Covenants. The Restrictive
Covenants attached hereto as Exhibit C are hereby incorporated
herein ~by reference and the Borrower hereby covenants and agrees
to perform each and every covenant and agreement set forth
therein.
'Section 5.~. Inspection of Project and Records. The
Issuer and the TruStee and their duly authorized agents shall
have the right (but not the obligation) at all reasonable times
upon not less t~han t~o Business Days prior written notice to
enter upon and to examine and inspect any part of the Project,
subject to the rights -of any tenants in the Project, and the
Issuer and the Trustee and their duly authorized agents shall
also have /he ~right at all reasonable times and upon reasonable
notice to examine .the .books and records of the Borrower insofar
as such books .and records relate to the refinancing and
maintenance of the Project or payments hereunder or on the Note
or the compliance by the Borrower with the Restrictive Covenants.
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Section 5.3. Indemnification by Borrower. The Borrower
shall at all times Protect, indemnify and save harmless the
Indemnitees from and against all liabilities, obligations,
claims, damages, penalties, causes of action, costs and expenses
including, without limitation (1) all amounts paid in settlement
of any litigation commenced or reasonably threatened against the
Indemnitees, if such settlement is effected with the written
consent of the Borzower; (2) all expenses reasonably incurred in
the investigation of, preparation for or defense of any
litigation, proceeding or investigation of any nature
whatsoever, commenced or reasonably threatened against the
Borrower, the Project or the Indemnitees; (3) any judgments,
-penalties, fines, damages, assessments, indemnities or
contributions; and (4) the reasonable fees of attorneys,
.auditors and consultants provided the same is imposed upon or
incurred 'by or asserted against the Indemnitees on account of
(a) any failure of the Borrower to comply with any of the terms
of the Financing Instruments, or (b) any loss or damage to
property or any injury to or death of any person that may be
occasioned by any .cause whatsoever pertaining to the Project or
the use thereof or to the Bonds or (c) any act or failure to act
by the Borrower as required under the Restrictive Covenants and
.any .consequences arising therefrom, including specifically and
without limitation, consequences from the loss of the exclusion
from gross income for Federal income tax purposes of interest on
:the 1996 Bonds or (d) any failure by the Borrower or its
employees or agents to comply with the terms of the Financing
Instruments to which the Borrower is a party and any agreements,
covenants, obligations, or prohibitions set forth therein; or
i(e) any breach of any representation or warranty of the Borrower
set forth in the Financing Instruments to which the Borrower is
a party or any certificate or any letter of representation
deliv.ered by the Borrower pursuant thereto, and any claim that
~any statement, representation or warranty of the Borrower, or
the Official Statement for the 1996 Bonds (other than any
information therein supplied by the Indemnitee seeking
indemnification hereunder), contains or contained any untrue or
m~sl'eading statement .of material fact or omits or omitted to
s~ate any material facts necessary to make the statements made
therein not misleading in light of the circumstances under which
they were made; or (f) any action, suit, claim, proceeding or
investigation of a judicial, legislative,administrative or
· r~gulatory nature arising from or in connection with the
.r~financing, rehabilitati6n, equipping, ownership, operation,
odcupation ~r use of the Pr6ject including the presence, escape,
seepage, leakage, discharge, emission, release or threatened
Telease, or disposal of any Hazardous Materials; or (g) any
suit, action, administrative proceeding, enforcement action, or
governmental or private action of any kind whatsoever commenced
against .the Borrower, the Project or the Indemnitees which might
adversely affect the validity or enforceability of the Bonds,
the Financing Instruments to which the Borrower is a party or
-11-
7967M
the performance by the Borrower or the Indemnitees of any of
their respective Obligations thereunder; provided, however, that
such indemnity shall be effective as to any Indemnitee only to
the extent of any loss that may be sustained by such Indemnitee
in excess of the net proceeds received by such Indemnitee from
insurance, if any, required under the Mortgage with respect to
such loss and provided further that the benefits of this section
shall not inure to any person other than the Indemnitees.
Nothing contained herein shall require the Borrower to indemnify
any Indemnitee for any claim or liability resulting from
~egligence or willful misconduct of the Indemnitee.
If any action, suit or proceeding is brought or reasonably
'threatened against the Indemnitees for any loss or damage for
which t~he Borrower is required to provide indemnification under
this Section, the Issuer and the Trustee shall promptly notify
the ~Borrower and the Borrower shall have the right to, upon
request and at its expense, resist and de!fend such action, suit
or proceeding, or cause the same to be resisted and defended by
counsel designated by the Borrower and approved by the
Indemnitees, which approval shall not be unreasonably withheld;
provided, however, that such approval shall not be required in
the case of defense by counsel designated by any insurance
company undertaking such defense pursuant to any applicable
policy of insurance. The obligations of the Borrower under this
section shall survive any termination of this Loan Agreement.
Section 5..4. Use of Proceeds; Other Matters With Respec~
· to Project and 1996 Bonds. (a) The Borrower shall not (1)
request, authorize, approve or permit to be approved on its
behalf, any payment of the proceeds of the 1996 Bonds if, as a
result of such payment, (i) less than 95% of the proceeds of the
1996 .BOnds expended at that time would be considered as having
been used to provide a "qualified residential rental project"
within the meaning of Sections 142(a)(7) and 142(d) of the Code,
or (ii) the issuance costs of the 1996 Bonds financed by the
1996 Bonds would exceed 2% of the proceeds of the 1996 Bonds,
within the meaning of Section 147(g) of the Code, or (iii) less
than all property provided by net proceeds of the 1996 Bonds
'being owned other than by a Tax-Exempt Organization (hereinafter
defined) or a governmental unit (as defined in Section 145 of
the Code) (2) take or refrain from taking any ~ther action that
would constitute or result in non-compliance with Section 142(d)
of the Code, or would otherwise result in the loss of the
exclusion of interest on any 1996 Bonds from gross income for
Federal income tax purposes. Without limitation by reason of
the foregoing or any other provision of this Agreement, the
Borrower agrees to take all action required under the Code with
respect to use of the proceeds of the 1996 Bonds and operation
of the Project or as may be necessary, in the opinion of Bond
Counsel, to comply fully with all applicable rules, rulings,
policies, procedures, regulations or other official statements
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proposed or promulgated by the Department of Treasury or the
Internal Revenue Service pertaining to Obligations issued under
'Sections i42(d) and 145 of the Code, to prevent loss of the
exclusion of interest on the 1996 BOnds from gross income for
Federal income tax purposes, and to refrain from taking any
~action that would result in loss of such exclusion. Without
limiting the generality of the foregoing the Borrower shall not
use the proceeds of the 1996 Bonds, or permit such proceeds to
-bemused, directly or indirectly, to provide any airplane, skybox
or other private luxury box, any facility prlmarily used for
gambling, or any store the principal business of which is the
sale of alcoholic beverages for consumption off premises.
(b) The Borrower represents and agrees, in compliance
~ith Section 142(d) of the Code, that substantially all of the
Project consists of units of similar quality and type of
.construction, containing facilities for living, sleeping,
eating, cooking and sanitation, the Project is on a single tract
of land and all of the buildings, structures and facilities
constituting the Rroject comprise a single geographically and
functionally integrated project for residential rental property,
as evidenced by the .ownership, management, accounting and
operation of the Project.
-(c) The Borrower represents that no proceeds of any
financing used to acquire ownership of the Project were used to
reimburse the Borrower 'for expenditures previously made or
incurred by the Borrower with respect to the Project prior to
October 2, 1995.
(d) The Borrower represents and agrees that the
weighted average maturity of the 1996 Bonds allocable to the
refinancing of the Project does not exceed 120% of the remaining
average reasonably expected economic life of the Project,
determined pursuant ~to Section 147(b) of the Code, as set forth
in the certificates or letters of representation of the Borrower
delivered on the -date of the issuance of the 1996 Bonds. The
Borrower agrees that it will not make any changes in the Project
which would, at the time made, cause the average reasonably
expected economic life of the Project, determined pursuant to
Section 147(b) of the Code, to be less than the average
reasonably expected economic life of the Project set forth in
such certificates or letters of representation of the Borrower,
unless the Borrower s-hall file with the Trustee an opinion of
Bond Counsel that such Changes to the Project will not result in
loss of the exclusion of interest on the 1996 Bonds from gross
income for Federal income tax purposes.
(e) The Borrower represents that the information
contained in the certificates or letters of representation of
the Borrower with respect to compliance with the requirements of
Section 149(e) of the .Code, including the information in Form
8038, is true and correct in all material respects.
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(f) The Borr~ower shall not and the Issuer shall not
knQwingly (1) take or omit to take any action, or approve the
.~TrUstee's making any investment or use of the proceeds of any
Tax-Exempt I996 Bonds or any other monies within their
respective control (including without limitation the proceeds of
:any insurance or any condemnation award with respect to the
:'Project) or the taking or omission of any other action, the
taking or omissio~n of. which would cause any 1996 Bonds to be
bonds" within the~meaning of ~Section 148 of the Code
barring unforeseen circumstances, approve the use of the
proceeds from the sale of any 1996 Bonds otherwise than in
accordance with the Issuer's "non-arbitrage" certificate given
immediately prior to the issuance of 1996 Bonds.
{g) The Borrower shall, at its sole expense,
determine and pay on behalf of the Issuer the Rebate Amount to
the United ~States, as and when due, in accordance with the
"rebate requirement" described in Section 148(f) of the Code
and Treasury Regulations thereunder, including without
limitation, Treasury Regulations Sections 1.148-1 through -111
and retain records of all such determinations until six years
after payment of the 1996 Bonds. For purposes of this Section,
"Rebate ~Amount" shall mean the excess of (1) the future value of
~all non-purpose receipts with respect to the 1996 Bonds over (2)
~the future value of all non-purpose payments with respect to the
199.6 Bonds, in each case calculated under this Section pursuant
to Section 148 of the Code and the Treasury Regulations
thereunder, or such other amount of arbitrage required to be
rebated to the United States of America under Section 148 of the
Code or the Treasury Regulations thereunder.
(h) The Issuer hereby selects January 1 as the
installment computation date pursuant to the Treasury
Regulations, unless the Issuer by certificate delivered to the
~or.rower selects another date to be the installment computation
date prior to .the d~ate that any amount with respect to the 1996
~onds is paid or required to be paid to the United States of
America pursuant t'o Section 148 of the Code or Treasury
Regulations issued %hereunder.
(i) Within 30 days (i) after January 1, 2001, the
initial installment .computation date, and at least once every
five years thereafter, and (ii) after the final payment of the
1996 Bonds, the Borrower will cause the Rebate Amount to be
computed and will deliver a copy of such computation (the
"Rebate Amount Certificate") to the Issuer and the Trustee. The
Rebate Amount Certificate setting forth such Rebate Amount shall
be prepared ~or approved by a Rebate Analyst.
(j) Not later than 60 days after the initial
installment .computation date, the Borrower, on behalf of the
Issuer, 'shall pay to the United States of America at least 90%
-14- 7967M
of the Rebate Amount as ~et forth in the Rebate Amount
~Certificate prepared with respect to such installment
~computation date. At least once on or before 60 days after the
installment computation date that is the fifth anniversary of
the initial installment computation date and on or before 60
days after every fifth anniversary date thereafter until payment
of the 1996 Bonds, %he Borrower, on behalf of the Issuer, shall
pay to the Unit.ed States of America at least the amount, if any,
by_whiCh 90% of the ~Rebate Amount set fOrth in the most recent
Rebate Amount Certificate exceeds the aggregate of all such
.payments %heretofore made to the United States of America
~pursuant to this Section. On or before 60 days after payment of
the 1996 Bonds, the Borrower, on behalf of the Issuer, shall pay
to the Unit~ed States of America the amount, if any, by which
100-% of the Rebate Amount set forth in the Rebate Amount
Certificate with respect to the Tax-Exempt 1996 Bonds exceeds
the aggregate of all payments %heretofore made pursuant to this
Section. All such payments shall be made by the Borrower, on
behalf of the Issuer, from any available source. The Borrower
shall pre]~are ant return required by the Internal Revenue
Service to accompany any rebate payment, and if required, the
Issuer agrees to cooperate reasonably in the execution of such
return.
(k} Notwithstanding anything contained herein to the
contrary, no rebate payment will be made if the Borrower
receives and delivers %o %he Issuer and the Trustee an opinion
of Bond Counsel that such payment is not required under the Code
· o prevent the 1996 Bonds from becoming "arbitrage bonds" within
~the meaning of Section 148 of the Code.
(1) The Borrower represents that the 1996 Bonds are
no~t and will not be "Federally guaranteed," as such term is used
i'n Section 149(b) of the Code.
(m) The Borrower will not engage in any activities or
take any action that .might reasonably be expected to result in
the Borrower ceasing to be a Section 501(c)(3) organization
within the meaning of Section 145 of the Code that is exempt
from Federal income taxation under Section 501(a) of the Code
and is not a "private foundation" within the meaning of Section
509(a) of the Code (a "Tax-Exempt Organization"), or
.corresponding provisions of Federal income tax law from time to
time in effect. The Borrower will promptly notify the Trustee
and the Issuer of any loss of its status as a Tax-Exempt
Organization or of any investigation, proceeding or ruling that
might result in the loss of its status as a Tax-Exempt
Organization.
(n) The Borrower represents and agrees that all of
the property provided or to be provided by the net proceeds of
the 1996 Bonds will be owned by a Tax-Exempt Organization or by
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a ~governmental unit within the meaning of Section 145(a)(1) of
,the .Code.
Section 5.'5. Reference to Bonds Ineffective after Bonds
Paid. -Upon payment of the Bonds all references in this Loan
Agreement to the Bo.nds and the Trustee, except those in Section
8.1, Shall be ineffective, and neither the Trustee nor the
owners ,of any of the ~onds shall thereafter have any rights
~ereunder .except as provided in Section 8.1.
Section 5.6. Financial Records and Statements. The
~B.orrower shall maintain proper books of record and account, in
~which full and correct entries shall be made in accordance with
~gen,eralt~ accepted accounting principles, of the Project and all
the Borrower's business and affairs. The Borrower shall provide
.to the Trustee and the Issuer copies of its annual operating
statements ~for the Project (within 120 days after the end of
~each fiscal year), its .annual rent roll for the Project (within
120 days after the end ~of 'each fiscal year), its Annual Budget
(pursuant to Section 511 of the Indenture) and annual audited
financial statements (within 120 days after the end of each
fiscal year).
~ection 5.7. Certificate aS to No Default. The Borrower
Shall deliver to the Issuer and the Trustee within 90 days after
-the .close of each of its fiscal years a certificate signed by
the ~orrower stating that during such fiscal year and as of the
-date of .such certificate no event or condition has happened or
existed~ or is happening or existing, that constitutes an Event
of Default or the violation of any covenant or agreement herein
or in any .of the Borrower's other obligations under the
Financing Instruments, or if such an Event of Default or the
violation of any covenant or agreement herein has occurred or is
occurring, ~specifying the nature and period of such Event of
Defau'lt ~.or such violation and what action the Borrower has
taken, is taking ~or proposes to take with respect thereto. In
the absence of actual notice of a misrepresentation by Borrower
contained in such certificates, the Issuer and the Trustee shall
~be entitled to rely conclusively upon such certificates as
accurate.
Section 5.8. Obligation of Borrower to Furnish Certain
Information to the Issuer. The Borrower shall furnish to the
Issuer and the Trustee, upon request, such information with
respect ~to ~the Bonds, -the Project or the Borrower's obligations
-hereunder or under the Mortgage as may be reasonably necessary
for the Issuer to complete its annual audit or to make any
reports as ma~ be required by state or Federal law, now or
hereafter in effect.
Section 5.9. Notice of Suits. The Borrower shall notify
the Trustee and .the Issuer as soon as it has knowledge of any
-16- 7967M
actions, .suits or proceedings ~% law, in equity or before or by
any governmental authority, pending, or to its knowledge
reasonably threatened, materially affecting the security for the
Note, or involving the validity or enforceability of the Note,
the Mortgage or this Loan Agreement.
Section 5.10. Permits. The Borrower shall, at its sole
c obtain all permits, consents and approvals
req local, state or Federal laws, ordinances, rules,
regulat or .requirements in connection with the operation or
use of the ~roject, including without limitation, the furnishing
of utilities thereto and environmental matters.
Section 5.11. Maintenance, Modifications and Use of
Proiect.. The Borrower shall, at its own expense, keep the
Project in good repair and operating condition, making from time
to time all necessary repairs, renewals and replacements. The
Borrower may, at its own expense, make any additions,
modifications or mmprovements to the Project that it may deem
desirable for its efficient operation and that do not adversely
affect the value of the Project, provided that all such
additions, modifications ~or improvements comply with all
Federal, st.a~te and loCal codes as applied to the Project, and
all ~such renewals, replacements, additions, modifications and
improvements shall become part of the Project.
The Borrower shall -comply with all lawful requirements of
any governmental body regarding the use or condition of the
Proj~ect, whether existing or later enacted or foreseen or
unforeseen or whether involving any change in governmental
policy or requiring structural or other changes to the Project,
or any part thereof, and irrespective of the cost of making the
same. The Borrower will neither commit nor suffer to exist
waste or a nuisance in or about the Project.
Section 5.12. Taxes, Other Governmental Charqes and
~Utility Charqes. The Borrower shall pay as the same
respectively become due, all taxes, fees, assessments, levies
and governmental charges of any kind whatsoever that may be
lawfully assessed, levied or imposed on it with respect to the
-Project '(.except for any charge from which the Borrower or the
Project is exempt). The Borrower shall pay, as the same
respectively become due, all utility and other charges incurred
in the .operation, maintenance, use and occupancy of the Project
and all assessments and charges lawfully made by any
governmental body for public improvements to or affecting the
Project. The Borrower may, however, contest in good faith and
by appropriate proceedings any such taxes, fees, assessments,
levies and utility and other charges, in which event it may
permit such taxes, fees, assessments, levies or charges to
remain unpaid during the period of such contest and any appeal
therefrom unless by such action the lien of the Mortgage on any
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~part .of %he Project shall be subject to loss, forfeiture or
-impairment, in which event such taxes, fees, assessments, levies
or charges shall be promptly satisfied or secured by posting
with the Trustee or an appropriate court of record a bond or
'other i~demnity in form, amount and with surety satisfactory to
~he Trustee.
The ~Borrower agrees that the Annual Budget required to be
prepared by the Borrower pursuant to the Indenture shall provide
for ~deposits to the Tax/Insurance Account in each year in an
amount ~s~ufficient to pay, in addition to any other amounts
properly payable from such account, a payment in lieu of taxes
i("Pilot") to the Issuer. The Pilot shall only be payable if and
to the 'extent that the Project or any portion thereof shall be
deemed to De wholly or partially exempt from ad valorem
~axation. To the extent of any such exemption, the amount of
the Pilot shall be an amount equal to the millage rate imposed
'by the City with respect to the then current year multiplied by
~the assessed value of the Project as established by the Palm
Beach County Property Appraiser multiplied by the percentage of
exemption from ad valorem taxation applicable to the Project at
such time. In. the -event that amounts in the Tax/Insurance
Account are insufficient to pay any Pilot due, the Borrower
shall nevertheless be obligated to make such payment to the
Issuer.
Section 5.13. Manaaement Services. The Borrower agrees to
comply with the provisions of Revenue Procedure 93-19, to the
extent necessary to preserve the tax-exempt status of the 1996
Bonds, in connection with any management or other services
contract ~with respect to the Project.
Section 5.14o Continuing Disclosure. (a) This Section
r5.14 constitutes the written undertaking for the benefit of the
holders of the 1996 Bonds required by Section (b)(5)(i) of the
Securities and Exchange Commission Rule 15c2-12 under the
~$ecurities Exchange Act of 1934, as amended (17 CFR Part 240,
240 15c2-12) (the "Rule"). It is the Borrower's express
intention that this Section 5.14 be assigned pursuant to and in
accordance with the terms of the Indenture to the Trustee for
ithe benefit of the Owners and any Beneficial Owners of the 1996
Bonds and ~that the Trustee and each Owner and each Beneficial
Owner of the 1996 Bonds be a beneficiary of this Section 5.14.
{b} The Borrower, as an "obligated person" within the
meaning of %he Rule, undertakes to provide the following
information as provided in this Section 5.14:
(1) Annual Financial Information;
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(2) Financial Statements, if any; and
(3) Material Event Notices.
(c) (1) Subject to the terms of this Section 5.14,
the Borrower shall while any 1996 Bonds are Outstanding provide
the Annual Financial Information to the Trustee on or before the
date 180 days after the end of each Fiscal Year of the Borrower
(the "Report Date".). The Borrower shall include with each
submission of Annual Financial Information to the Trustee a
written representation to the effect that the Annual Financial
Information is the Annual Financial Information required by this
Section 5~.14 and that it complies with the applicable
requirements of this Section 5.14. The Borrower may adjust the
Report Date if the Borrower changes its Fiscal Year by providing
written notice of t~he change of Fiscal Year and the new Report
Date to the Trustee, each then .existing NRMSIR and the SID, if
any; provided that the new Report Date shall be one hundred
eighty days (180) days after the end of the new Fiscal Year, and
provided further that the period between the final Report Date
relating to the former Fiscal Year and the initial Report Date
relating to the new FisCal Year shall not exceed one year in
duration. It shall be sufficient if the Borrower provides to
the Tr~ustee the Annual Financial Information by specific
reference to documents previously provided to each NRMSIR and
the SID, if any, or filed with the Securities and Exchange
~Commission and, if such a document is a final official statement
within the meaning of the Rule, available from the Municipal
Securities Rulemaking Board.
(2) If not provided as part of the Annual Financial
Information, the Borrower shall provide Financial Statements
when and if available while 1996 Bonds are Outstanding to the
Trustee.
(3)
(i) If a Material Event occurs while any 1996
Bonds are Outstanding, the Borrower shall provide
in a timely manner a Material Event Notice to the
Trustee and the Issuer. Each Material Event
Notice shall be so captioned and shall
prominently state the date, title and CUSIP
numbers of the 1996 Bonds.
(ii) The Trustee shall promptly advise the
Borrower whenever, in the course of performing
its duties as Trustee under the Indenture, the
Trustee identifies an occurrence which, if
material, would require the Borrower to provide a
Material Event Notice pursuant to clause (3)(i);
provided that the failure of the Trustee so to
advise the Borrower shall not constitute a breach
by the Trustee of any of its duties and
responsibilities hereunder.
-19- 7967M
(4) (a) The Trustee shall each year while the
.p~ovisions of this Section 5.14 are operative, at least
thirty ~30)days prior to the Report Date provide notice to
the Borrower of its obligation pursuant to this Section
5.14 to provide the Annual Financial. Information to each
existing NRMSIR and SID~
(b) The Trustee shall within ten (10) Business
Days after it receives Annual Financial Information and/or
Financial Statements pursuant to (c)(1) and/or (2) above
send a copy thereof to each then existing NRMSIR and the
SI~, if any.
(c) The Trustee shall, within ten (10) Business
'Days after receipt of a Material Event Notice pursuant to
(.c)(3)(i) above, send a copy thereof to the Municipal
Securities Rulemaking Board, each NRMSIR and the SID, if
any.
(5) The Trustee shall provide in a timely manner to
%he ~Municipal Securities Rulemaking Board and to the SID,
if any, notice of any failure while any 1996 Bonds are
Outstanding by the Borrower to provide Annual Financial
Information on or before the Report Date.
(d) The following are the definitions of the
capitalized terms used in this Section and not otherwise defined
· n this Agreement.
(1) "Annual Financial Information" means the
financial information (which shall be based on
financial statements prepared in accordance with
generally accepted accounting principles
("GAAP")) or operating data with respect to the
Borrower, provided at least annually, of the type
included in the Official Statement utilized in
connection with the sale of the 1996 Bonds, which
Annual Financial Information shall include
Financial Statements.
(2) "Financial Statements" means the Borrower's
annual financial statements, prepared in
accordance with GAAP, and if audited, accompanied
by the report of the auditing certified public
account.
{3) "Material Event" means any of the following
events, if material, with respect to the 1996
Bonds.
(i) Principal and interest payment delinquencies;
(ii) Non-payment related defaults;
-20- 7967M
~iii) 'Unscheduled draws On debt service reserves
zeflecting financial difficulties;
(~v)
Unscheduled draws on credit enhancements reflecting
£inancial difficulties;
~v) ~Substitution of credit, or liquidity providers, or
their failure to perform;
(vi) ~dverse tax opinions or events affecting the
tax-exempt status of the security;
(vii) ~Modificakions to rights of holders of 1996 Bonds;
(viii)
1996 Bond calls (other than scheduled mandatory
sinking fund redemptions);
(ix) Defeasances;
(x) ~Release, substitution, or sale of property securing
repayment of the 1996 Bonds; and
(ix) Rating changes.
(5:)
"NRMSIR" means a nationally recognized municipal
securities information repository, as recognized
from ~ime to time by the Securities and Exchange
Commission for the purposes referred to in the Rule;
~he NRMSIRs as of the date of this Agreement being
as follows:
The ~NRMSIRs approved by the Securities and Exchange Commission as
of June 18, 1996 are as follows:
Bloomberg Municipal Repository
P.O. Box 840
~rinceto~, ~ew.Jersey 0B542
tntern~et address: biUNIS@Bloomberg.doc
(609) 279-3200
FAX (6-09) 279-5962
JJ Kenny Information Services
Repository Services
65 Broadway / 16th Floor
New York, New York 10006
(212) 770-4595
FAX (212) 797-7994
'The ,Bond Buyer Moody's NRMSIR
Secondary,Market,,Disclosure Public Finance Information Center
395 ~udson Street / 3rd Floor 99 Church Street
New York, New York 10014 New York, New York 10007
Internet address: Disclosure@muller.com
(800) 339-6306
(212) 807-3814 FAX (212) 553-1460
FAX '{212) 989-9282
-21- 7967M
'Disclosure, ThC.
Document ~cquisitlons/Municipal
~ecuri~ies
~5161 River Road
<Bethesda, Mar.yland 20816
~(30l) 951-14'50
FAX (301) 718-2329
Municipal Securities Disclosure.Archive
559 Main Street
Hudson, Massachusetts 01749
(800) 580-3670
FAX (508) 562-1969
According to a Securities and Exchange Commission press release
dated June 26, 1995, a list of names and addresses of all
~designated nationally recognized municipal securities information
reposito~ries as of any point in time is available by calling the
SEC,s FAX on Demand Service at (202) 942-8088 from a telecopier
~machine and requesting document number 0206.
(6) SID means a state information
or designated by the State as such for
-to in the Rule.
(e) Unless otherwise required by
technical and economic feasibility, the Borr~
methods of information transmission as sf
recommended by the designated recipients
information.
(f) The continuing obligation here
to provide Annual Financial Information and
and the Trustee's obligations under this
terminate immediately once the 1996
Outstanding. This Section 5.14, or any provl
null and void in the event that the Borr
Trustee and the Issuer an opinion of Bond
%hat those portions of' the Rule whichrequi
or .any such provisions, are invalid,
retroactively or otherwise do not apply
~provided ~that the Borrower shall have pro
~delivery a. nd the cancellation of this Sect]
existing NRMSIR and the SID, if any. This
amended without the consent of the 1996 Bond]
~the delivery by the Borrower to the Trustee
proposed amendment and an opinion of Bond
that such amendment, and giving effect there
~epository as operated
the purposes referred
law and subject to
)wer shall employ such
~all be requested or
of the Borrower's
under of the Borrower
4aterial Event Notices
Section 5.14 shall
~nds no longer are
~sion hereof, shall be
ower delivers to the
2ounsel to the effect
re this Section 5.14,
have been repealed
to the 1996 Bonds;
zided notice of such
on 5.14 to each then
Section 5.14 may be
~olders, but only upon
and the Issuer of the
3ounsel to the effect
~o, will not adversely
~affect the compliance of this Section 5.14 and by the Borrower
with the Rule; provided that the Borrower shall have provided
notice of such delivery and of the amendment to each then existing
NR~SIR and ,the SID, if any.
(g) Any failure by the Borrower to perform in accordance
with this Section 5.14 shall not constitute an "Event of Default"
under Section 9.1 of this Agreement and the rights and remedies
provided by Article IX of this Agreement upon the occurrence of an
-22- 7967M
"Event of Default'" shall not apply to any such failure. Neither
the Issuer nor the Trustee shall have any duty whatsoever to
enforce this Section 5.14.
The Trustee and each Owner and each Beneficial Owner
individually may take remedial action to require the Borrower to
provide the information and notices described in this Section;
however, any action to challenge the adequacy of the information
provided may be pursued only in accordance with the provisions of
Section -904 of the Indenture.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.1, Event of Default Defined.
events shall be an Event of Default:
Each of the following
(a) Failure of the Borrower to make any payment of
principal, premium, if any, or interest under the Note when the
same becomes due and payable.
(b) Except as provided in Section 5.14 and in
subsection (c) below, failure by the Borrower to observe and
perform any other covenant, condition or agreement on its part
under this Loan Agreement or the Mortgage for a period of 30
days after notice (unless the Borrower and the Trustee shall
agree in writing to an extension of such time prior to its
expiration), specifying such failure and requesting that it be
~emedied, given by the Issuer o.r the Trustee to the Borrower, or
in the case of any such default which cannot with due diligence
be cured within such 30-day period, failure of the Borrower to
proceed promptly to cure the same with due diligence.
(c) The falsity when made, in any material respect,
of any warranty, representation or other statement by or on
behalf of the Borrower ~contained in this Loan Agreement or in
any instrument furnished in connection with the issuance or sale
of the Bonds.
(d) An Event of Default under the Indenture.
Notwithstanding subsection (b) above, if by reason of force
~maieure the Borrower is unable in whole or in part to observe
and perform- any of its covenants, conditions or agreements
hereunder, other than those contained in Sections 4.1, 5.1, 5.3
and 5.4 hereof, or under the Mortgage, the Borrower shall not be
deemed in default during the continuance of such inability. The
term "force majeure" as used herein shall include without
limitation acts of God; strikes, lockouts or other industrial
disturbances; acts o'f public enemies; orders of any kind of the
government of the United States of America or the State of
-23- 7967M
F~or~da or any political subdivision ~thereof or any of their
~idepartments, agencies or officials, or any civil or military
authority; ~nsurrections; riots; epidemics; landslides;
· .ightning; earthquakes; fires; hurricanes; tornadoes; storms;
floods; washouts; droughts; arrests; restraints of government
and people; civil disturbances; explosions; breakage or accident
to 'machinery, transmission pipes or canals; partial or entire
failure of utilities; or any other cause or event not reasOnably
within the control of the Borrower. The Borrower shall remedy
~with all reasonable dispatch the cause or causes preventing the
Bor~rower from carrying out its covenants, conditions and
agreements, that the settlement of strikes, lockouts
and Other disturbances shall be entirely within the
~discretion of the Borrower, and the Borrower shall not be
required Ko make settlement of strikes, lockouts and other
industrial distu,~bances by acceding to the demands of any
opposing party when such course is in the judgment of the
~Bor~ower not ~zn ~ts best interests.
Section 6.2. Remedies on Default. (a) Upon acceleration
of the maturity of the Bonds pursuant to Section 902 of the
Indenture, all amounts payable hereunder and under the Note
shall become immediately due and payable without notice or
declaration of any kind.
(b) Upon the occurrence and continuation of an Event
of Default, the Notehotder may exercise any one or more of the
following remedies:
(1) If t'he same shall not have become due and
payable as provided in subsection (a) of this Section,
declare all amounts payable hereunder and under the
Note to be i-mmediately due and payable, whereupon the
same shall become immediately due and payable.
(2) Through its duly authorized agents, have
access to and inspect, examine and make copies of, the
books~ ~records and accounts of the Borrower.
(3) Exercise any remedy afforded a mortgagee
and/or secured party under the laws of the State of
Florida.
(4) Take whatever other action at law or in
.equity .may appear necessary or desirable to collect
the amounts then due and thereafter to become due or
to enforce observance or performance of any covenant,
condition or agreement of the Borrower under this Loan
Agreement or the Restrictive Covenants, including
injunctive relief to require the Borrower to perform
its obligations and covenants hereunder or under the
Restrictive Covenants or enjoin any acts or things
-24- 7967M
which may be unlawful or in violation of the rights of
the Issuer or the Trustee hereunder or under the
Restrictive Covenants.
The Issuer and the Trustee shall cooperate in any action
taken by the other with respect to this Loan Agreement or the
Restrictive Covenants to enforce the covenants contained herein
and therein. The Borrower shall pay all reasonable costs and
expenses which may be incurred by the ISsuer or the Trustee in
connection with the taking of such actions.
Section 6.3. No Remedy Exclusive. No remedy set forth in
Section 6.2 is intended to be exclusive of any other remedy, and
every remedy shall be cumulative and in addition to every other
remedy 'herein or now or hereafter existing at law, in equity or
by statute. No delay or failure to exercise any right or power
accruing upon an Event of Default shall impair any such right or
power or shall be construed to be a waiver thereof, and any such
right or power may be exercised from time to time and as often
as may be deemed expedient by the Issuer or the Trustee. Except
as 'otherwise expressly provided herein or by applicable law, no
notice shall be required as a Condition of the exercise of any
remedy reserved in this Article VI.
.Section 6.4. Extraordinary Fees and Other Expenses. The
Borrower shall, on demand, pay to the Issuer its reasonable
expenses and to the Trustee its extraordinary fees and expenses,
~ncluding reasonable attorneys' fees (including in connection
with any appeal) and other reasonable extraordinary expenses
incurred by any of them in the collection of amounts payable
'hereunder and under the Note, or the enforcement of any other
obligation of the Borrower hereunder.
Section 6.5. No Additional Waiver Implied by One Waiver.
If either party or its assignee waives a default by the other
party under any covenant, condition or agreement herein, such
waiver shall be limited to the particular default so waived and
shall not be deemed to waive any other default hereunder.
ARTICLE VII
PREPAYMENT
Section 7.1. Prepayment. The Borrower shall have the
option to prepay, or shall be required to prepay, the Note at
such t~mes and in such amounts as are specified for redemption -
of the Bonds in Section 301 of the Indenture. To prepay the
Note pursuant~ to this Article, the Borrower shall pay to the
Trustee an amount which, together with any other funds then held
by the Trustee and available for such purpose, will be
~ufficient (a) in the case of prepayment in whole, to redeem the
Bonds in whole and (b) in the case of prepayment in part, to
-25- 7967M
redeem ~Bonds in an amount equal to the principal amount of the
Note so prepaid, including in any case any premium and interest
~accruing on :the Bonds to be redeemed to the date set for their
~redemption and any other amounts payable hereunder or under the
Indenture in connection with such redemption. In the case of
any prepayment of the Note pursuant to this Article, the
Borrower shall make arrangements satisfactory to the Trustee
for .giving any required notice of redemption of the Bonds, and
the Trustee shall credit the principal amount of each Bond
redeemed against the obligation of the Borrower to make future
principal payments on the Note.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. 'Term of Loan Agreement. This Loan Agreement
shall be effective upon its execution and delivery and, except
as herein provided, shall terminate when no Bonds are
outstanding. The covenants of the Borrower contained in
~Sections 4ol(b), 5.1, 5.3., 5.4(g) and 5.4(j) and the rights of
enforcement and indemnification of the Issuer and the Trustee in
connection t.herewith contained in Sections 5.1, 5.3, 5.4(g),
5.4(j) and 6.4 shall survive termination or expiration of this
'Loan Agreement, and shall be binding upon the successors and
assigns of the Borrower.
Section 8.2. Notices, etc. Unless otherwise provided
here~n, all demands, notices, approvals, consents, requests and
Other communications hereunder shall be given in the manner
.provided in the Indenture. A duplicate copy of each demand,
.notice, approval, .consent, request or other communication given
hereunder by ~either the Issuer or the Borrower to the other
shall also be given to the Trustee.
Section 8.3. Amendments to Loan Agreement. This Loan
Agreement shall not be amended or supplemented subsequent to the
~issuance of the Bonds and before payment of the Bonds without
~the consent of the parties hereto and the consent of the Trustee
and, if appropriate, the owners of the Bonds, given in any case
~n accordance ~with Article XII of the Indenture.
Section 8.4. Successors.and Assiqns. This Loan Agreement
shall be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and
assigns.
Section 8.5. Severability. If any provision of this Loan
Agreement shall be held invalid by any court of competent
jurisdiction, such holding shall not invalidate any other
provision hereof.
-26- 7967M
Section 8..6. Applicable Law. This Loan Agreement shall be
go,erred by t~he applicable laws of the State of Florida.
Bection 8.7. .Countelrparts. This Loan Agreement may be
· executed ~n several counterparts, each of which shall be an
original .and all of Which together shall constitute but one and
the same instrument; except that to the extent, if any, that
this Loan Agreement Shall constitute personal property under the
Uniform Commercial Code of Florida, no security interest in this
Loan Agreement may ~be created or perfected through the transfer
or possession of any counterpart of this Loan Agreement other
~han ~the 'original counterpart, which shall be the counterpart
containing the receipt therefor executed by the Trustee
following ~he signatures to this Loan Agreement.
Section 8,8. Issuer~ May Perform Borrower's Obligations.
If the Borrower shall fail to make any payment or perform any
act required -of it hereunder, the Issuer, without prior notice
to or demand upon the Borrower and without releasing any
obligation o.r waiving any default, may (but shall be under no
obligation to) make .such payment or perform such act. All
amounts so paid by the Issuer and all costs, fees and expenses
so incurred Shall be payable by the Borrower as an additional
obligation under this Agreement, together with interest thereon
at the maximum rate on any of the Bonds until paid.
Section ~8.9. Limited ObliGations of Borrower. The Issuer
expressly agrees that the personal liability of the Borrower and
the members, officers and directors of the Borrower shall be
strictly and absolutely limited to the property encumbered by
~he Mortgage, and %he leases, rents, profits and issues thereof
and any other collateral securing the Borrower's obligations
hereunder or under the Note. The Issuer and any assignee of any
,of the Financing Instruments shall not and may not seek any
judgment -for a deficiency against the Borrower or any member,
officer or director of the Borrower in any action under any of
the Financing Instruments, or in any action to foreclose, to
'exercise a .power of sale, or to exercise any other rights or
power under or by reason of the Mortgage or any other instrument
evidencing or securing the obligations of the Borrower under any
of the -Financing Instruments. If any suit is brought on the
Mortgage as .part of judicial proceedings to foreclose the
Mortgage, or to confirm any foreclosure or sale pursuant to a
power .of sale hereunder, any judgment obtained in such suit
shall constitute a lien on, and will be and can be enforced only
against the property encumbered by the Mortgage, and any such
other security instrument and the leases, rents, profits and
issues thereof and not against any other asset of the Borrower
or any member, officer or director thereof, and the terms of
such judgment s.hall expressly so provide. Notwithstanding
anything to the contrary contained in this Section 8.9, the
obligations of the Borrower under Sections 5.3 and 4.1(b) (other
-27- 7967M
than 4.1(b)(2) hereof) hereof shall be recourse to the assets
and general credit of the Borrower (but not the members,
officers or directors thereof).
IN WITNESS WHEREOF, the Issuer and the Borrower have caused
this Loan Agreement to be executed in their respective names by
their duly authorized officers or representatives, all as of the
date first above written.
CITY OF BOYNTON BEACH, FLORIDA
ATTEST:
By:
Mayor
By:
City Clerk
C/HP COVE, INC.
By:
Its President
-28- 7967M
RECEIPT
Receipt of the foregoing original counterpart of the Loan
Agreement., dated as of July 1, 1996, between City of Boynton
Beach, Florida and C/HP Cove, Inc., is hereby acknowledged.
The Bank of New York, as Trustee
By:
Its
-29-
7967M
Exhibit A
Promissory Note
July 1, 1996
C/HP Cove, Inc., a Florida corporation not-for-profit (the
"Borrower,), for value received, hereby promises to pay to the
order of City of Boynton Beach (the "Issuer"), or assigns,
on 1, , the principal sum of
Million Hundred Thousand Dollars
~$ ), subject to prior payment, with interest on the
unpaid-principal sum at the same rate borne by the hereinafter
described Bonds, from July 1, 1996 until said principal sum
shall be paid, and to the extent permitted by law, interest on
overdue installments of such interest, at the then maximum
interest rate payable on any of the Bonds, as hereinafter
defined. Principal and interest hereon shall be payable at the
time ~principal and interest is payable on the Bonds.
Payments shall be made in lawful money of the United States
of AmeTica in immediately available funds on the date payment is
due at the designated corporate trust office (initially New
York, New York) of The Bank of New York, as trustee, acting by
and through The Bank of New York Trust Company of Florida, N.A.,
its agent (the "Trustee"), or at such other place as the Trustee
may direct in writing.
The Issuer, by the execution, of the Indenture (as
-hereinafter defined), and the assignment form at the foot of
this Note, is assigning this Note and the payments thereon to
the Trustee pursuant to an Indenture of Trust and Assignment of
Mortgage, dated as of July ii 1996 (the "Indenture"), between
the Issuer and the Trustee as secunity for the Issuer's
$ Multi-Family Housing Mortgage Revenue Bonds,
~Series 1996 (Clipper Cove Apartments) (the "Bonds"), and any
Additional Bonds (as defined in the Indenture), all as issued
~pursuant to the Indenture. Payments of principal of, premium,
if any, and interest on this Note shall be made directly to the
Trustee for the account of the Issuer pursuant to such
assignment and applied only to the principal of% premium, if
any and interest on the Bonds. All obligations of the Borrower
hereunder shall terminate when all sums due and to become due
pursuant to the Indenture, this Note, the Loan Agreement
(hereinafter defined) and the Bonds have been paid.
In addition to the payments of principal and interest
specified in t~he first paragraph hereof, the Borrower shall also
pay such additional amounts, if any., which, together with other
~monies available therefor pursuant to the Indenture, may be
necessary to provide for payment when due (whether at maturity,
by acceleration or call for redemption, elective purchase,
sinking fund redemption or otherwise) of principal of, premium,
if any, and interest on the Bonds.
The Borrower shall have the option or may be required to
prepay this Note in Whole or in part upon the terms and
conditions and in the manner specified in the Loan Agreement,
dated as o~f July 1, 1996 (the "Loan Agreement"), between the
Issuer and the Borrower.
This Note is issued pursuant to the Loan Agreement in
satisfaction of the Borrower's payment obligation in Section 4.1
thereof and is entitled to the benefits of and is subject to the
conditions thereof, including the provisions of Section 4.4
thereof that the Borrower's obligations thereunder and hereunder
shall be unconditional as provided in such Section 4.4. All the
terms, conditions and provisions of the Loan Agreement and the
applicable provisions of the Bonds and the Indenture are, by
this reference thereto, incorporated herein as a part of this
Note. This Note is secured by a Mortgage and Security Agreement
(the "Mortgage"), dated as of July 1, 1996, from the Borrower to
the Issuer, which Mortgage has been assigned to the Trustee
under the Indenture.
In case an Event of Default (as defined in the Loan
Agreement) shall occur, upon acceleration of the maturity of the
Bonds pursuant to the Indenture, the principal of and interest
on this Note shall immediately be due and payable in full
without notice or declaration, all as provided in the Loan
Agreement. This Note shall 'be governed by, and construed in
accordance with, the laws of the State of Florida.
The Issuer expressly agrees that the personal liability of
the Borrower and the members, officers and directors of the
Borrower shall be strictly and absolutely limited to the
property encumbered by the Mortgage, and the leases, rents,
profits and issues thereof and any other collateral securing the
Borrower's obligations hereunder or under the Loan Agreement.
The Issuer and any assignee of any of the Financing Instruments
shall not and may not seek any judgment for a deficiency against
the BOrrower or any member, officer or director of the Borrower
in any action under any of the Financing Instruments, or in any
action to foreclose, to exercise a power of sale, or to exercise
any other rights or power under or by reason of the Mortgage or
any other instrument evidencing or securing the obligations of
the Borrower under any .of the Financing Instruments. If any
suit is brought on the Mortgage as part of judicial proceedings
· o foreclose the Mortgage, or to confirm any foreclosure or Sale
pursuant to a power of sale hereunder, any judgment obtained in
such ~suit shall constitute a lien on, and will be and can be
,'enforced only against the property encumbered by the Mortgage,
and any such other security instrument and the leases, rents,
profits and issues thereof and not against any other asset of
the Borrower or any member, officer or director thereof, and the
terms of such judgment shall expressly so provide.
Notwithstanding anything~ to the contrary contained in this
paragraph, the obligations of the Borrower under Sections 5.3
and 4.1(b) (other than Section 4.1(b)(2)) of the Loan Agreement
shall be recourse to the assets and general credit of the
Borrower-(but not the members, officers or directors thereof).
IN WITNESS WHEREOF, the Borrower has caused this Note to be
executed by its duly authorized officer all as of July 1, 1996.
C/HP COVE, INC.
By:
Its President
ASS IGNMENT
The -City of Boynton Beach, Florida (the "Issuer") hereby
irrevocably assigns, without recourse, the foregoing Promissory
Note and its ~ights as the original payee thereof to The Bank of
New ~ork, as Trustee acting by and through The Bank of New York
Trust Company of Florida, N.A., its agent (the "Trustee',) and
hereby directs C/HP-Cove, Inc., as the maker of the Promissory
Note to make all payments with respect to principal and interest
thereon and all other payments reguired thereby (except as may be
required to be paid to the Issuer pursuant to Sections 4.1(b), 5.3
or 6.4 of the Loan Agreement) directly to the Trustee at the
a~ress set forth therein, or at such other place as the Trustee
may,direct in writing.
CITY OF BOYNTON BEACH, FLORIDA
By:
Mayor
7967M/34
Exhibit B
Mortqaqe
7967M/35
Form of Declaration of Restrictive Covenants
Exhibit
810OM/10
EXHIBIT "C"
MORTGAGE
PREPARED BY/RETURN TO:
Moyte, Flanigan, Katz,
FitzGerald & Sheehan, P.A.
Mark E. 'Raymond, Esquire
P.O. Box 3888
West Palm Beach, FL 33402
Sixth Draft
6/20/96
C/HP COVE, INC.
as Mortgagor
AND
CITY OF BOYNTON BEACH, FLORIDA
as Mortgagee
MORTGAGE AND SECURITY AGREEMENT
Dated July 1, 1996
T~I$ MORTGAGE AND SECURITY AGREEMENT (the "Mortgage,~) is
made as 'of the first .day of July, 1996, from C/HP COVE, INC., a
Florida corporation ~not-for-profit (the "Borrower") to CITY OF
~N BEACH, FLORIDA, a municipal corporation of the State of
Florida ~the "Issuer") and its successors and assigns, including
but not limited to the Trustee (hereinafter defined) (the
'Mortgagee"),:
Whereas, pursuant to an Indenture of Trust and Assignment of
Mortgage between the Issuer and The Bank of New York, as trustee,
acting by and through The Bank of New York Trust Company of
Florida, N.A., its agent (together with its successors and
assigns., the "Trustee") the Issuer has issued its $
~Multi-Fa~mily ~Housing Mortgage Revenue Bonds, Series 1996 (Clipper
Cove Apartments) ~the "1996 Bonds") and used the proceeds thereof
to make a loan to the Borrower under the terms of a Loan
Agreement, dated as of the date hereof (the "Loan Agreement")
.between the Issuer and the Borrower, to be used by the Borrower
for the principal purpose of refinancing a multi-family
residential rental project within the jurisdiction of the Issuer
(the "Project"); and
Whereas, under the Loan Agreement the Borrower will evidence
its obligation to repay the loan by issuing and delivering to the
Issuer its $ Promissory Note (the "Note"), dated the same
date as the Bonds, payable initially to the Issuer but assigned to
~he Trustee as security for the Bonds. In the Note, the Borrower
,agrees to pay amounts sufficient to pay the principal of,
~edemption premium, if any, and interest on the Bonds as the same
become .due as well as any other amounts becoming due thereunder;
and
Whereas, the Issuer by the Indenture shall assign this
Mortgage and its rights 'hereunder to the Trustee as security for
~the 1996 Bonds, and 'the Trustee shall constitute the Mortgagee
hereunder for all purposes after such assignment;
WITNESSETH:
That in consideration of the premises and in order to secure
the 2ayment of the p~incipal of, premium, if any, and interest on
the 1996 'Bonds and any Additional Bonds issued pursuant to the
Indenture (collectively, the "Bonds") and the Note and all fees,
expenses and any other sums of any nature or type payable under
~he Loan Agreement, and all amounts due under this Mortgage and
the performance and observance of all of the provisions hereof and
of said Indenture, Note and Loan Agreement (collectively, the
"~Obligations"), the Borrower hereby grants, sells, warrants,
conveys, assigns, transfers, mortgages and sets over, confirms and
Grants a lien upon and security interest~ unto the Issuer, all of
Borrower's estate, right, title and interest in, to and under all
of the land described on Exhibit A hereto (the "Land").
TOGETHER WITH all improvements now or hereafter located
on said Land and all fixtures and articles of personal property of
Whatsoever kind and nature and renewals and replacements thereof
now or hereafter affixed to, attached to, placed or located upon,
or used in any way in connection with the complete and comfortable
use, occupancy, or operation of the Land (the "Improvements"), all
licenses and permits used, useful or required in connection with
'the use ~of said Land~ and the Improvements, including, without
limitation, all leases, occupancy agreements, residency agreements
or use agreements of said Land and the Improvements now or
hereafter entered into and all right, title and interest of
Borrower thereunder, including without limitation, cash or
securities deposited thereunder pursuant to said leases, occupancy
agreements or use agreements, and all rents, issues, proceeds,
revenues and pr~ofits accruing from said Land and the Improvements
and together with all proceeds of the conversion, voluntary or
involuntary of any of the foregoing into cash or liquidated
-claims, including without limitation, proceeds of insurance and
condemnation awards and all products of any of the foregoing (the
~foregoing said real property, fixtures and tangible and intangible
personal property hereinafter referred to collectively as the
"Mortgaged P~operty"). Borrowe~ hereby grants to the Issuer a
security interest in the foregoing Mortgaged Property as
· co~nstitutes fixtures and tangible and intangible personal property.
TO HAVE AND TO HOLD the Mortgaged Property, together with
all and singular the tenements, hereditaments and appurtenances
%hereunto belonging or in anywise appertaining thereto and the
.reversion and rever.sions thereof and all the estate, right, title,
~nterest, homestead, dower and right of dower, separate estate,
~ossession, claim and demand whatsoever, as well in law as in
equity, of Borrower and unto the same, and every part thereof,
~ith the appurtenances of the Borrower in and to the same, and
every part and parcel thereof unto the Mortgagee.
The Borrower warrants that the Borrower has good and
~marketable title to an indefeasible fee estate in the Land subject
~to no lien, charge or encumbrance except Permitted Encumbrances
(hereinafter defined) and the Borrower covenants that this
Mortgage is and will remain a valid and enforceable mortgage on
· he Mortgaged Property subject only to the exceptions herein
provided. The Borrower has full power and lawful authority to
mortgage the Mortgaged Property in the manner and form herein done
or intended hereafter to be done. The Borrower will preserve such
title and will forever warrant and defend the same to the
~Mortgagee and will forever warrant and -defend the validity and
priority of the lien hereof against the claims of all persons and
parties whOmsoever.
The Borrower will, at the cost of the Borrower, and
without expense to the Mortgagee, do~ execute, acknowledge and
deliver all and every such further acts, deeds, conveyances,
-2-
7968M
mortgages:, assignments, notices of assignment, transfers and
assurances as the Mortgagee .shall from time to time require in
order to preserve the priority of the lien of this Mortgage or to
facilitate the perfor.mance of ~the terms hereof.
PROVIDED, HOWEVER, that if the Borrower shall pay to the
Mortgagee all such amounts as may from time to time remain
outstanding and owing under the Note and the Loan Agreement
tog~ether with ~nt'erest as may accrue and upon the terms as
provided therein, and together with all'other sums advanced by the
to or on of the Borrower (including, withoUt
any made for the payment of taxes,
levies and ~nsurance Telated to the Mortgaged Property) or
otherwise due from the Borrower pursuant to the Note or Loan
Agreement or this Mortgage, and shall perform all other covenants
and conditions .of 'the Note ,~nd Loan Agreement and this Mortgage,
all of the terms of which are incorporated herein by reference as
though set forth fully here~n, and of any renewal, extension or
modification thereof and of this Mortgage, then this Mortgage and
the estate hereby c~eated shall cease and terminate.
The Borrower further covenants and agrees with Mortgagee
as follows:
Section 1. RestriCtions -on Mort.qa~e, Sale or Assignment.
Except for the conveyance provided herein and other Permitted
Encumbrances, the Borrower .will not sell, mortgage, assign,
encumber, transfer or convey the Project or any portion thereof
either directly or indirectly, voluntarily or involuntarily,
without (i) delivery of an opinion of Bond Counsel that such
transfer will not result i:n loss of the exclusion of interest on
the Tax-Exempt Bonds from gross income for federal income tax
purposes and (ii) written confirmation from the Rating Agency that
the rating on the 1996 Bonds will not be reduced or Withdrawn,
except that such rating confirmation shall not be required in the
case of a foreclosure (or deed in lieu of foreclosure) on any
portion of .any or all of the ~Project after an Event of Default.
"Permitted Encumbrances~ shall mean, as of any particular
time, (a) liens for ad valorem taxes and special assessments not
then delinquent, (b) this Mortgage, and any liens created hereby,
(c) the Restrictive Covenants, (d) any exceptions to title listed
in Schedule B II of the title insurance policy or commitment
referred to in Section 5(e) of this Mortgage, (e) utility,access
and other easements and rights-of-way, mineral rights,
restrictions and .exceptions that do not interfere with or impair
the operation of the Project, (f) inchoate unperfected and unfiled
mechanics' and materialmen's liens as permitted by Section 2 of
this Mortgage, (g) reasements and other rights granted pursuant to
Section 3 of this Mortgage, (h) any leases of all or any part of
the Project, such leases to be subordinate to the lien of this
Mortgage, {i) such minor defects, irregularities, encumbrances,
-3- 7968M
easements, rights-of-way and clouds on title as normally exist
with respect to property similar in character to the Project and
as do not, in an Opinion of Counsel, interfere with or impair the
use of the Project as multi-family rental housing facilities and
do not render title to the Land unmarketable, and (j) liens which
by t~heir terms are expr~essly subordinate to the lien of this
Mortgage and which do not permit sale or foreclosure thereunder
until the Bonds are no longer outstanding.
Section 2. Mechanics' and Other Liens. The Borrower shall
not permit any mechanics' or other liens (except Permitted
Encumbrances) to be perfected or remain against the Project. The
Borrower may, however, after giving the Mortgagee ten days' notice
of its intention to do so, and ~posting security with the Mortgagee
in the amount of the lien, at :its own expense and in its own name,
contest in good faith and by appropriate proceedings any such
lien, 'in which event it may permit such lien to remain unsatisfied
and undischarged during the period, not to exceed thirty (30)
days, of such contest after which time such lien shall be promptly
satisfied or secured by posting with an appropriate court of
record a ,bond or other indemnity in form, amount and with surety
as may be required to discharge such lien of record.
Section 3. Granting of Easements. Provided no Event of
'Default shall have occurr-ed and be continuing, the Borrower, with
the prior written consent -of and upon terms and conditions
acceptable to the Mortgagee (based solely upon an Opinion of
.Counsel upon which the Mortgagee may solely rely), may (i) grant
'such easements, licenses, rights-of-way (including the dedication
of public highways) and other rights or privileges in the Nature
of easements with respect to the Land free from the lien of this
Mortgage, or (ii) release existing easements, licenses,
rights-of-way and other rights or privileges, with or without
consideration, or (iii) release any part of the Land which is not
then being used for the Project. Nothing herein prohibits the
creation of P~ermitted Encumbrances by the Borrower. Once such
consent of the Mortgagee is obtained, the Mortgagee shall execute
and deliver any and all instruments necessary or appropriate to
confirm and grant any such easement, license, right-of-way, or
other right or privilege or to release the same from the lien
hereof.
Section 4. Damage. Destru.ction and Condemnation. The
Borrower shall promptly notify the Mortgagee if any or all of the
Project shall be materially damaged or destroyed by fire or other
casualty, condemned or lost because of failure of title. Within
60 days after such damage or destruction, condemnation or loss,
the Borrower Shall elect whether to repair or restore the Project
so affected to substantially the same condition as prior to such
damage or destruction, condemnation or loss or to prepay the Note
and shall notify the Mortgagee of its election; provided the
Borrower need not prepay the Note in part (if it elects not to
-4- 7968M
repair or restore the Project) if the proceeds of insurance with
respect to such damage, destruction or loss or condemnation
proceeds are 'less than $50,000. If the Borrower shall elect to
~repair or restore the Project, the net proceeds of any insurance
reco~er'y or condemnation award and any additional funds necessary
t.o complete such repair or restoration shall be deposited with the
Mortgagee as received by the Borrower or the Mortgagee or as
required ~for such repair or restoration and requisitiOned by the
B.or-rower to pay such costs. If the Borrower shall elect not to
Cepair or restore the Project, it shall prepay the Note to the
extent of the insurance or condemnation proceeds received except
as :provided above. '
Section 5. ~. The Borrower shall continuously
maintain .insurance against such risks as are customarily insured
against by businesses of like size and character, paying as the
same become due .all premiums with respect thereto, including
without limitation:
(a) Casualty insurance in the amount of the full
replacement cost of the Project against loss or damage by fire and
lightning, with broad 'form extended coverage including damage by
windstorm, explosion, aircraft, smoke, sprinkler leakage,
vandalism, malicious mischief and such other risks as are
normally included within such coverage (limited only as may be
provided in the standard form for such coverage at the time in use
in the State of Florida).
(b) Insurance in the amount of the full replacement cost
of the Project as may be available from the United States of
America -or a governmental agency against loss or damage from the
risks and hazards of war or public emergency, but only in time of
war or public emergency and only if such insurance is generally
carried ~by owners of similar facilities in the State of Florida.
(c) Primary comprehensive public liability insurance to
the extent of $500,000 per person and $1,000,000 per occurrence
against liability for bodily injury, including death resulting
therefrom, and to the extent of $1,000,000 per occurrence against
liability for damage to property, including loss of use thereof,
arising out of the 'ownership, maintenance or use of the Project.
(d) Workers' compensation insurance as required by law.
{e) Mortgagee title insurance on the Mortgaged Property
in the face amount of the Bonds.
Complimnce with the requirements of this Section shall be
evidenced by a certificate of the Borrower filed with the Issuer
and the Trustee.
-5- 7968M
Any determination of replacement cost required pursuant to this
.paragraph shall be made by a recognized appraiser or insurer
selected by the Borrower.
Ail such insurance shall be taken out and maintained with
generally recognized responsible insurance companies qualified to
do business an the State and, except for the policy required by
subsection {e} above, may be written with deductible amounts
=omparable to those on similar policies carried by other
businesses of like size and character. The pQlicies required by
subsections (a) and (b) above shall contain standard clauses
naming the Mortgagee 'as mortgagee and requiring that all net
proceeds resulting from any claim shall be paid to the Mortgagee.
If the net proceeds payable under any one claim shall not exceed
~$50,000 and no event has occurred or exists that constitutes or
tlhat, with notice or lapse of time, or both, would constitute an
Event of Default under the Loan Agreement, any net proceeds
payable %0 the Mortgagee shall be paid to the Borrower. The
policy required by subsection (c) shall name the Mortgagee under
this Mortgage as an additional insured. Unless a policy with such
an undertaking is unavailable or is available only at a cost which
the Borrower r.easonably determines to be unreasonable, each such
~policy, except for the policy required by subsection (e), shall
contain an undertaking by the insurer that such policy shall not
be modified adversely to the interests of, or canceled without at
least 30 days' prior notice to, the Mortgagee.
Ail policies of insurance may, at the request of the
Mortgagee, be deposited with the Mortgagee, provided that in lieu
of such policies there may be deposited with the Mortgagee a
certificate or certificates of the respective insurers attesting
the fact that the insurance required by this Section is in full
force 'and effect. Prior to the expiration of any such policy, the
Borrower shall, at the request of the Mortgagee, furnish the
Mortgagee evidence satisfactory to the Mortgagee that the policy
has been renewed or replaced. The Borrower shall not cancel any
such insurance or permit any such insurance to expire without the
consent of the Mortgagee.
Section 6. Removal of Equipment. The Borrower shall not
~remove or permit the removal of any Improvements except in
accordance with its provisions of this Section. Provided that no
Event of Default shall have occurred and be continuing, if the
Borrower reasonably determines that any items of Improvements have
become unnecessary or unsuitable for use at the Project and that
the removal thereof will not interfere with the capacity or
character of the Project for the purpose for which it is then
being used .or is intended to be used, the Borrower may remove and
sell, trade-in ~or ot~herwise dispose of such items of Improvements.
-6- 7968M
.Section 7. Assiqnment of Leases.
{~a) As security for its obligations hereunder, the
Borrower 'hereby gr~nts, transfers and assigns to the Mortgagee,
and grants :to the Mortgagee a security interest in, (1) all of the
Borrower"s right, title .and interest (but none of the Borrower's
obligations) in leases now existing, or that may hereafter
any and ail -extensio
rents and other
including any award
involving any .tenant
reorgan
and all~ p
rent; provided no
with respect to the Project, together with
and renewals thereof, and (.2) all of the
:s due and to become due thereunder,
to the Borrower in any couTt proceeding
any lease in bankruptcy, insolvency or
ngs in any state or Federal court, and any
~by any tenant under any lease in lieu of
interest is granted hereby in any
collect any such award or payment; provided, however, that the
Trustee shalt not be obligated to prosecute any such action.
{b) The
way impair or ~
under the ~Loan
imposed on the Mo
performance and
this .assignment .of I
~ment provisions hereunder shall not in any
h any obligation of the Borrower hereunder or
mt nor shall any of such obligations be
ee. Upon Payment of the Bonds and
mce of the provisions of this Mortgage,
es shall cease and terminate and all of the
right, title, interest., claim and demand of the Mortgagee in such
leases shall revert o 'the Borrower or to such other person as may
be legally en~titt~ thereto, and 'the Mortgagee shall, at the
request of the Bor or any such person, deliver to the
Borrower or such p~rson 'an instrument, in recordable form if
requested, canceltingi and ~disc'harging such assignment.
(c) The foregoing assignment is a present assignment,
provided, however, ~hat so long as no Event of Default has
occurred and is cont%nuing, the Borrower shall have a license to
collect all rents, income and profits from the leases of the
Project and to use
all rents, income -an
for deposit in the
Proj.ect is released
shall not apply to le
(d) The Bo
full right %o-assign
due and 'to become d~
any interest therein
~nd enjoy the same, although it shall deposit
~ profits from the leases with the Mortgagee
Revenue Fund. If any part of any of the
pursuant to Section 3 above, this assignment
~ses of such part.
rower represents and warrants that it has
such leases and the rents and other payments
e thereunder and that no other assignment of
has been made.
(e) The Borrower agrees that the assignment made in this
Section is irrevocable and that the Borrower will not, while such
-7- 7968M
~assignment is in effect, take any action which is inconsistent
~with ~suCh ~assignment, or make or suffer to be made any
~otherassignment, designation or direction of the subject matter of
the assignment ~made in this Section, and that any such assignment
Shall be void. The Borrower will from time to time, upon request
of the Mortgagee, execute all instruments of further assurance as
~the Mortgagee may reasonably request.
Section '8.
shall be an "Event of D
Default. Each of the following events
under this Mortgage:
{a) The failure of the Borrower to observe or perform
any other covenant, condition or agreement of the Borrower
':hereunder ~or a period of thirty (30) days after notice specifying
such failure and requesting that it be remedied, given by the
~Eortgagee to the Borrower; or
(b) An Event of Default shall have occurred and be
continuing under the Loan Agreement.
Section '.9. Remedies on Default. Whenever an Event of
~Default shall have occurred and be continuing, the Mortgagee shall:
(a) Have access to, and the right to inspect, examine
.and make copies of, the Borrower's books, records and accounts
pertaining to the Project;
(b) Have the right to exercise any of its rights under
this Mortgage, the Loan Agreement, any other Financing Instrument
and any other instruments and agreements given to secure the
Obligations;
(.c) Have the right to exercise any remedy afforded a
secured party under the Uniform Commercial Code of the State of
Florida (the "UCC") to the extent that property subject to this
.Mortgage is property subject to the UCC;
(d) Take whatever action at law or in equity may appear
necessary or desirable to collect the amounts then due and to
~become due :or to enforce observance or performance of the
Obligations.;
(e) As a matter of right without regard to the adequacy
of the security, and to the extent permitted by law without notice
to the Borrower, be entitled, upon application to a court of
competent jurisdiction, to the immediate appointment of a
receiver for all or any part of the PrOject and the revenues
therefrom, whether ~such receivership be incidental to a proposed
sale of the Project or otherwise, and the Borrower hereby consents
to the appointment of such a receiver;
-8- 7968M
(f) To the extent permitted by law, and with or without
the appointment of a receiver, on an application therefor, have
the right to (i) enter upon, and take possession of (and the
Borrower Shall surrender actual possession of), the Project or any
part thereof, without notice to the Borrower and without bringing
any legal action or proceeding, or, if necessary by force, legal
proceedings, ejectment or otherwise, and (ii) remove and exclude
the Borrower and its agents and employees therefrom. Upon
obtaining possession of the Project or upon the appointment of a
tlhe Mortgagee .or the receiver, as the case may be, may,
option, (A) make all necessary or proper repairs and
additions %o or upon the Project, (B) operate, maintain, control,
make secure and preserve the Project, (C) receive all rents and
revenues, and (D) complete the construction of any unfinished
improvements ~on the Project and, in connection therewith, continue
any an~d all ~utstanding contracts for the erection and completion
of such improvements and make and enter into any further contracts
which may be necessary, either in their or its own name or in the
name of the Borrower (the cost of completing the improvements
shall be expenses secured by this Mortgage and shall accrue
interest as the ,rate provided for in SectiOn 4.3 of the Loan
Agreement). In doing so, the Mortgagee or such receiver shall
have t~e right to manage the Project and to carry on the business
of the Borrower and may exeDcise all of the rights and powers of
%he Borrower, eithe:r in the name of the Borrower, or otherwise,
including, but without limiting the generality of the foregoing,
the right to lease the Project, to cancel, modify, renew or extend
amy lease or sublease of the Project or any portion thereof and to
carry on any contracts entered into by the Borrower with respect
to the Project. The Mortgagee or such receiver shall be under no
liability for, or by reason of, any such taking of possession,
entry, holding, ~emoval, maintaining, operation or management,
·except for gross negligence or willful misconduct. Any demand by
the Mortgagee upon any tenant of the Project, accompanied by a
copy of this Mortgage, shall be sufficient authority for that
tenant thereafter to make all lease payments directly to the
Mortgagee and that tenant shall have no obligation or authority to
inquire into the propriety of any such demand. Upon making lease
payments to the Mortgagee pursuant to the Mortgagee's demand, any
tenant of the Project will be as fully discharged of its
obligations under any lease to the extent of those payments as if
those payments had .been made directly to the Borrower. If at any
~ime lease payments are required to be made directly to the
Mortgagee under the terms of this paragraph and those payments are
.made to the Borrower, the Borrower will receive those payments in
trust for the Mortgagee and shall forward them immediately to the
.Mortgagee in the form received, endorsed, if appropriate, to the
order of the Mortgagee. Any rents and revenues shall be applied
(t) first, to pay all expenses, and (2) the balance, if any, to
the payment of the other Obligations.
-9- 7968M
The exercise of the remedies provided in this Section
shall not cure or waive any Event of Default, and the enforcement
of such remedies, once commenced, shall continue for so long as
the Event of Default shall continue.
No remedy .set forth in this Section is intended to be
exclusive of any other remedy, and every remedy shall be
cumulative and in addition to every other remedy in this Mortgage
or now or hereafter existing at law, in equity or by statute. No
delay or failure to exercise any right or power accruing upon an
Event of Default .shall impair any such right or power or shall be
construed to be ~a waiver-thereof, and any such right or power may
be exercised from time to time and as often as may be deemed
expedient.
Upon the -occurrence of an Event of Default, the Borrower
shall follow any reasonable directions given by the Mortgagee to
.assemble the Improvements and other personal property in which the
Mortgagee is granted a security interest herein and make it
awailable to the Mortgagee at a place which is reasonably
convenient to the Borrower and the Mortgagee.
If the Borrower fails to promptly pay or perform any of
the Obligations, the Mortgagee, without notice to or demand upon
the Borrower, and without waiving or releasing any Obligation or
default, may (but shall be under no obligation to) at any time
thereafter make such payment or perform such act for the account
and at the expense of the Borrower. The Mortgagee may enter upon
any or all of the Project for that purpose and take all action
thereon as the Mortgagee considers necessary or appropriate. All
ex~penses incurred by the Mortgagee pursuant to this Section,
together with interest thereon at the default rate provided for in
Section 4.3 of the Loan Agreement, shall be paid by the Borrower
to the Mortgagee upon demand. To the extent permitted by law, the
Mortgagee shall be subrogated, notwithstanding its release of
record, to any lien now or hereafter existing on the Project to
%he extent that such lien is paid or discharged by the Mortgagee
whether or not from the proceeds of the Bonds. This Section shall
not be deemed or construed, however, to obligate the Mortgagee kd
pay ~or discharge any lien.
Any and all deposits or other sums at any time credited
by or due from the Mortgagee to the Borrower shall at all times
constitute security for any and all indebtedness secured hereby,
and the Mortgagee may apply or set off those deposits or other
sums against the Borrower's indebtedness to the Mortgagee at any
time whether or not the indebtedness Shall then be due or other
collateral is considered by the Mortgagee to be adequate.
To the full extent that the Borrower may do so, the
Borrower hereby:
-10- 7968M
{t) agrees that it will not at any time plead, claim or
take any laws now or hereafter in force providing for
any valuation, stay, extension or redemption, and
waives and releases all rights of redemption, valuation,
appraisement, stay of execution, extension and notice of election
to accelerate t~he Obligations;
(2) waives all rights to a marshalling of the assets of
the- BorroWer, including without limitation, the Project, or to a
sale in the inverse order of alienation in the event of a
foreclosure of any portion of any or all of the Project, and
agrees not to assert any right under any law pertaining to the
marshalling of assets, the sale in inverse order of alienation,
the exemption of homestead, the administration of estates of
decedents, or other matters whatsoever to defeat, reduce or affect
~the right ~f the Mortgagee under the terms of this Mortgage to a
sale of any portion of any or all of the Project without any prior
or different resort for collection, or the right of the Mortgagee
to the payment of the Obligatlions out of the proceeds of the sale
of any portion of the Project in preference to every other
claimant whatsoever;
(3) waives any right to bring or utilize any defense,
counterclaim or set-off~, other than one which denies the existence
or sufficiency of the facts upon which any foreclosure action is
grounded. I'f any defense, counterclaim or set-off, other than one
permitted ~y the preceding clause, is timely raised in a
foreclosure action, such defense, counterclaim or set-off shall be
dismissed. If such defense, counterclaim or set-off is based on a
claim which could be tried in an action for money damages, such
claim may be brou~ght in a separate action which shall not
thereafter be consolidated with the foreclosure action. The
bringing of such separate action for money damages shall not be
deemed to~ afford any grounds for staying the fo'reclosure action;
and
(4) waives and relinquishes any and all rights and
remedies which the Borr-ower may have or be able to assert by
reason of the provisions of any laws pertaining to the rights and
remedies of sureties.
'Section 10. Security Agreement. This Mortgage, in
addition to creating ~a lien on real estate, is a security
agreement granting a security interest in personal property and
shall support any financing statement filed showing the
Mor~gagee's interest as 'secured party with respect to any property
described in such financing statement, including but not limited
to the Improvements and the other personal property described
herein. The BOrrower and the Mortgagee agree that all portions of
the Improvements which will be acquired and installed on the Land
are and shall remain personal property to the extent permitted by
the laws of t-he State and shall not become a part of, or be deemed
to be, real estate regardless of the manner of affixation.
-11- 7968M
Section 11. Fur~ther Assurances. At any time, and from
time to time, upon request by the Mortgagee, the Borrower will, at
the Borrower's expense, (a) correct any defect, error or omission
which may be disCovered in the form or content of any of the
Financing Instruments, and (b) make, execute, deliver and record,
or cause to be made, executed, delivered and recorded, any and all
further instruments, certificates, and other documents as may, in
the opinion of the .Mortgagee, be necessary or desirable in order
to-complete, perfect or continue and preserve the lien of this
Mortgage. Upon any failure by the Borrower to do so, the
Mortgagee may make, execute and record any and all such
instruments, certificat~es and documents for and in the name of the
Borrower, all a't the sole expense of the Borrower, and the
Borrow~er hereby irrevocably.appoints the Mortgagee the agent and
attorney-in-fact of t~he Borrower to do so, this appointment being
coupled with an interest.
Section 12. Envir.onmental Laws. The Borrower represents
.and warrants that to its knowledge (a) no Hazardous Materials are
located on the Project, (b) the Project has never been used as a
manufacturing, storage or dump site for Hazardous Materials, nor
is the Project affected by any HaZardous Materials Contamination,
and (c) no property adjoining the Project has ever been used as a
manufacturing, storage or dump site for Hazardous Materials nor is
any such property affected by Hazardous Materials Contamination.
The Borrower agrees to (1) give notice to the Mortgagee
immediat~ely upon the Borrower's acquiring knowledge of any leak,
spill, other release or presence of any Hazardous Materials on the
Project or of any Hazardous Materials Contamination with a full
description thereof or of any violation Of any environmental,
health, fire or safety laws with respect to the Project; (2)
comply with any governmental requirements applicable to Hazardous
Materials, and other environmental, health, fire and safety laws
or regulations, including, but not limited to, the Occupational
Health and Safety Act and the Americans with Disabilities. Act; (3)
promptly comply with any laws requiring the removal, treatment or
disposal of such Hazardous Materials or Hazardous Materials
Contamination and with all laws relating to other environmental,
hsalth, fire or safety matters and provide the Mortgagee with
satisfactory evidence of such compliance; (4) provide the
Mortgag.ee, within thirty (30) days after a demand by the
Mortgagee, with a bond, letter of credit or similar financial
assurance evidencing to the Mortgagee's satisfaction that the
necessary funds -are available to pay the cost of removing,
treating and disposing of such Hazardous Materials or Hazardous
Materials Contamination .and discharging any lien which may b~
established on the Project as a result thereof or to correct a
violation of any environmental, health, fire or safety laws; and
(5) defend, indemnify and hold harmless the Mortgagee from any and
all claims which may now or in the future (whether before or after
the release of this Mortgage) be asserted as a result of the
presence of any Hazardous Materials on the Project or any
-12- 7968M
Hazardous Materials Contamination or the violation of any
enviTonmental, health, fire or safety laws. The Borrower shall
.not ~lace, manufacture, store, or dump or permit to be placed,
manufactured, stored, or dumped on the Project any Hazardous
Materials.
As used in this Section, the following terms have the
following meanings:
"Controlled Substances" means any substances or
materials, 'the presence of which may allow forfeiture of property
pursuant to 21 U.S.C. /881, as amended from time to time.
"Hazardous Materials" means any substance (i) the
presence ~of which requires investigation, remediation, or special
handling under any federal, state or local statute, regulation,
ordinance, order, policy or common law; (ii) which is or becomes
a'~hazardous substance" or "hazardous waste" under any federal,
state or local statute, regulation, ordinance, order, policy or
:commoln law., including the Resource Conservation and Recovery Act
of 1976 (42 ~.S.C. ~6901 et. seq.), as amended from time to time,
or the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 .(42 U.S.C. ~9601 et. seq.), as amended from
time ~o time; (iii) which is a Controlled Substance; and (iv)
without limitation, which includes any lead, oil or petroleum
:products, polychlorinated bi-phenyls (PCB's), asbestos, urea
formaldehyde foam insulation or radon gas.
'Hazardous Materials Contamination" means the
~ontamfnation (whether presently existing or occurring after the
date of this Mortgage) of the Project, facilities, soil, ground
water, air or other elements on, or of, the Project by Hazardous
Materials, or the contamination of the building, faciAities, soil,
ground water, air or other elements on, or of, any other property
as a result of 'Hazardous Materials at any time (whether before or
after the date of this Mortgage) emanating from the Project.
Section 13. .Reimbursement; Interest. If the Mortgagee
shall incur any expenses or pay any claims to which the Mortgagee
:~becomes a party -by reason of this Mortgage or the rights and
remedies provided hereunder (regardless of whether this Mortgage
expressly provid.es for an indemnification against such claims by
the Borrower), such expenses and claims shall be (a) paid by the
Borrower to the Mortgagee on demand, together with interest
'.thereon from the date incurred until paid in full by the Borrower
at the rate provided for in Section 4.3 of the Loan Agreement, and
(b) a part of the Obligations secured by this Mortgage.
~otwithstanding t'he foregoing, however, in any action or
proceeding t.o foreclose this Mortgage or to recover or collect the
Obligations, the provisions of law governing the recovery of
· costs, disbursements and allowances shall prevail unaffected by
this'Section.
-13- 7968M
Section 14. Fu%ur:e Advances. This Mortgage shall secure
not only existing indebtedness, but also such future advances made
pursuant to the Financing Instruments, whether in respect of the
issuance of Additional Bonds or .otherwise, as are made within
thirty (30) years from the date hereof, to the same extent as if
such future advances were made on the date of the execution of
this Mortgage, but Such secured indebtedness shall not exceed at
any time the maximum principal amount of $20,000,000, plus
-interest thereon and'other f.ees, costs, and expenses owed by the
Borrower pursuant and any disbursements made for the
payment of taxes, or insurance, on the Mortgaged Property,
-with interest .on such disbursements. Any such future advances may
be made either prior to or after the due date of the 1996 Bonds or
any Other obligations secured by this Mortgage. This Mortgage is
given for the s?
indebtedness by
under the Loan
c~venants and
Mortg~age shall be
%his !future advance c
purpose of securing any and all
of the Borrower to the Mortgagee
t and the other Financing Instruments. All
contained in or incorporated into this
icable to all further advances made under
Section t5.
Miscellaneous.
(a) Successors and Assiqns. This Mortgage shall be
binding on, inure to the benefit of, and be enforceable by, the
parties, the Mortgagee and their .respective successors and assigns.
(b) Severabilit¥. If any clause, provision or section
of this Mortgage is h~ld to be illegal or invalid by any court,
t-he illegality or invalidity of such clause, provision or section
shall not affect any o.f the remaining clauses, provisions or
sections of this Mortgage, and this Mortgage shall be construed
and enforced as if such illegal or invalid clause, provision or
-section had not been contained in it.
(c) Applicabl~ Law. This Mortgage shall be governed by
and construed in :accordance wit'h the applicable laws of the State
of.Florida.
(d) Release and Discharqe. Upon the Payment of the
Bonds and payment of the Note and the discharge of the other
Obligations of the Borrower under this Mortgage, the Mortgagee
shall at the expense of the Borrower (i) cause the lien created by
.this Mortgage to be released, -cancelled and discharged, (ii)
execute and deliver to the Borrower instruments necessary to cause
such release, cancellation and discharge, and (iii) assign and
deliver to the Borrower any property that the Mortgagee then may
hold pursuant to this Mortgage. Upon Payment of the Bonds, the
Mortgagee, at the exFense o.f the Borrower, shall execute and
.deliver, or cause to be .executed and delivered, such instruments
of satisfaction or termination with respect to all liens in favor
-of the Mortgagee created hereby, in proper form for recording or
-14- 7968M
filing, as may be necessary to evidence such satisfaction and
.termination.
<e) No.tices. Ail demands, notices, approvals, consents,
requests, opinions and other communications under this Mortgage
shall be given in accordance with the provisions of the Indenture.
{f) COurse of Dealing. No course of dealing or conduct
between the Mortgagee and the Borrower shall be effective to
amend, modify or Change any provisions of this Mortgage or the
other Financing Instruments. By accepting payment after the due
date of any of the Obligations, the Mortgagee shall not be deemed
to waive the rig'ht either to require prompt payment when due of
all other Obligations, or to declare an Event of Default for
failure to make prompt payment of any such other Obligations.
Neither the ~Borrower mot any other person now or hereafter
obligated for the payment of the whole or any part of the
Obti.gations shall be relieved of such liability by reason of (a)
~the failure of the Mortgagee to comply with any request of the
Borrower -or of any ot-her person to take action to foreclose this
Mortgage or otherwise enforce any of the provisions of this
Mortgage, or (b) any agreement or stipulation between any
subsequent owner or owners of any or all of the Projects and the
Mortgagee, or (c) ~he Mortgagee extending the time of payment or
modifying the ~erms of this Mortgage or any of the other Financing
Instruments without first having obtained the consent of the
Borrower or suCh other person. Regardless of consideration, and
without 'the necessity for any notice to or consent by the holder
of any subordinate lien on the Project, the Mortgagee may release
any person at any time liable for any of the Obligations or any
part of the security for the Obligations, and may extend the time
of payment or otherwise modify the terms of this Mortgage or any
of the other Financing Instruments without in any way impairing or
affecting the lien of this Mortgage or the priority of this
Mortgage 'over any subordinate lien. The holder of any subordinate
lien shall have no right to terminate any lease regardless of
whether or not such lease is subordinate to this Mortgage. The
Mortgagee may resort to the security or collateral described in
this Mortgage or any of the other Financing Instruments in such
order and manner as the Mortgagee may elect in its sole discretion.
(g) Definitions. Ail terms used herein and not
otherwise .defined herein shall have the meanings ascribed thereto
by the Indenture.
Section 16. Non:recourse Mortqage. The Issuer expressly
agrees that, except as provided below in this Section, the
personal liability of the Borrower and the members, officers and
directors of the Borrower shall be strictly and absolutely limited
to the property encumbered by the Mortgage, and the leases, rents,
profits and issues thereof and any other collateral securing the
Borrower's obligations under the Loan Agreement or under the
-15- 7968M
Note. The Issuer and .any assignee of any of the Financing
Instrume~nts shall not and may not seek any judgment for a
deficiency against the Borrower or any member, officer or director
of the Borrower in any action under any of the Financing
Instruments, or in any action to foreclose, to exercise a power of
sale, or to exercise any other rights or power under or by reason
Of the Mortgage or any other instrument evidencing or securing the
obligations of the Borrower under any of the Finsncing
If any suit is brought on the Mortgage as part of
proceedings to foreclose the Mortgage, or to confirm any
foreclosure or sale pursuant to a power of sale hereunder, any
judgment obtained in such suit shall constitute a lien on, and
will be and can be enforced only against the property encumbered
~by the Mortgage, and any such other security instrument and the
leases, rents, profits and issues thereof and not against any
other asset of the Borr~ower or any member, officer or director
{he~eof, and the terms of such judgment shall expressly so provide.
~Otwithstanding anything to the contrary contained herein, the
~obligations of the Borrower under Sections 5.3 and/or 4.1(b)
(other than 4.1(b)(2)) of the Loan Agreement shall be recourse to
the assets and general credit of the Borrower (but not to the
members, officers or directors thereof).
IN WITNESS WHEREOF, the Borrower has caused this Mortgage and
Security Agreement to be duly executed by its authorized
representative as of the date first above written.
C/HP COVE, INC.
Witness
By:
Name:
Title:
Witness
-16- 7968M
STATE OF FLORIDA )
COUNTY OF PALM BEACH )
The foregoing instrument was acknowledged before me this
day of , 1996, by
as of C/HP COVE, INC., who is
__ personally known to me, OR ~
has produced as identification.
(NOTARY STAMP)
Notary Name:
Notary Public
Serial (Commission) Number
(if any)
-17- 7968M
~xhibit A
DE~CR~PTION O~ LAND
'8100~/11
BOND
PURCHASE AGREEMENT
P.2/54
Bond l~drc~ Ag~ment
Cit~ of Boynton.Beach, Florida
100 ~ Boynton Reach ~Boulevard
P;O. Box 310
Boyr~ton Beach, Flori~ 33425
C/HP Cove, La=.
c/o Cornerstone Housing Corporation
~350 Beverly Road, Suite 200
McLean, Virginia 22102-~6~4
~ ~.C~.. p_ar~,/nco~(colleciivcly' the "Par ,, Inc. and $£ifel, Nicolaus
with thC O~ of Bo ~ _% . clms~ )off'ertoenter'
,Yntoal~aCh. l~lorida, (the ", ..... -- - ~o this Bond Purchase
- --,,,=r ) mad C/HP Cove, Inc. (thc "'Owner'), ~ubject to
acc~tance:at or prior to 11 :$9 P.m., Florida t/me, on the dace hereof.
l. htrod~. The Issuer is authorized to issue $11,400,000 pr/ncipal amount iff its Multi-
Family HOUsin~ Mor~a~e Revenue Bonds, Series I996 (Clipper Cove Apam'nents) (the 'Tax
Bonds" or'the "'Bonds')pursuant to and in accordance wi&
~ ~?~Flo,~_~ Co~t~lo' '." , ' · . Article VI~. Section 2 arid Article VII,
~ ~'[q~'~' ~ Th~ B~,Of NmYork . Indenture-),
r,,,,-~-.uz wiortgagc dated a.s of luly 1, 1996 (the ,w~ be issued
and mthc amounts, will ~have ser~,o ~,~*.----. ' ag m~.ee (the Tru~t~-~. and -.-,
I lmrc~. *.,.- ,,~$mons and will ~,es,. ~ ...... - _ ,,,- zaamre on the da~
Zz~,emsc on the Bonds is io be - ,-'~ ,-,=~-esr at me rates shown on Schedule
excludable ~om federal gross income of the holders thereof. The
proceeds iff thc ~onds will bc used to provide mOney for thc fundin~ ora mortgage loan (the 'MortgaSe
'Loan") to th~-Owner to r~t"mance its illultifamily he, in8
'.l~orida. (the "Project"), fund certain ...... -~a,~s, pay certain costsPr°ject located in the City of Boynton Beach,
recurred in connection with the issuance.of the Bonds. of rehabiliratin~ the Project and pay costs
2..~ Sale and D~livery og Bonds. On the basis of the rcpresenraQo~, warranties and
a~r~ts contai~ .herein, but subjec~ £o the terms and conditions herein set forth, the PUrchasers
hereby a~rce to purchase item ~the '-Issuer, and the Issuer hereby
i ~ ,' ~ . . a~rccs to sell to thc Purchasers,
1996-to thc ~osm~ Date (deffmed below). The c '
Purchasers, a~e se~ fo, ' .- stzmated issuance . _ . . , U~y 1,
,. zth m Schedule II herete, expenses, mcludir~ raefees of the
at ~he off'ge oi' th~ Tru~-,,,-~ -,~ ~ "; ' ~ ansz~r or checks navable ;,, ~ ...... ers against
pla~ ag ~ PUrch~--- -. - · . .m., i~londa Time. on .tm,, ,~ ,,,,,- amiy available funds
· -,,~r,r~ me issuer and the Owner .,.~,,, .i.._ ;.7'" ~' ~'~'aL°r at such other time
'"""~' ,-,~ tree c;losin~ Date")
P.3/54
: ,mm iv aays armr the Closing Daze tn d~tdve form, shall be delivered to
21. Closing Doc.me~. At or, prior to thc CloSing Date, the Purchasers ~hall h~ve ~eived the
The Official &atement relating to thc Bonds ( Official Statement").
(b) The Indent, duly executed by the ISsuer and the Truatc~,
(c) The ,Lo~ Agreement (thc "Lo~ Agreement"), duly executed by the Issuer and
~the ~Ow~er.
~,wncr an~ the Trustcc,
Owner. (e) The l~'omi~ory Note (the "Prom/asory/Vote") £o the Issuer duly executed by the
' (f) Thc Mon~-a~e and $ccurit A
the' Promisso Note Y _ greernent sec '
ry and Loan Agreement r,~,,. -.. .... :~,urmg ~ Owner's obligadOm Under
(g) A cez~ed copy or cop~ of ~ ~o~u~c~ of ~e City Com~.~ o~ the
~ ~upplem~ed ~ ame~dc~, ~u~ofi~ng* ~ ~u~ce of the Bor~/s, a~l the execution ~d
de~vczy of ~ ~/e~c, rJ~e ~ Agre~menL d~e T~x Rcguhror~ Agreemcm
and this Bond
· /nvestors. ~ The Ow~,,,. ~- - anmary ufiiclal Stat ,.,,+,,, ..... /enlerlt dated
.. ,, . % ,.. -=muy represents to the em_c., ~ ~u prospective
-no more than the foUow/Rg: th~ offerht prices, thc interest rates,-'"-,,S=scUing .~C~compen~ation,O~ 1934 (i.e.,..:amountit om/r~of
proceeds :alld thc.delivezy date of the Bor~ds a.,ld other tet111s dcpc/lding oi1 such factors).
On or before th~ Closing Date, the Issuer gha/1 have delivered to the Ptlrchas~rs the Of'ftc/a/
Statement duly completed with the information permitted to b~ omitt
under thcSecurities .Bxchan~e Act of 1934 and .... ,.., . ed therefrom by Rule $c2-12
bccn approved by the II~uerslid approved by the'"'aPurchascrs.°mer arnendmcnts and supplemcnts as lshal1
s zhe use ther ' :.P net, as thc Pur cop of all
eof in connccUon w* chasers shall
. ~th thc offer, sale and a~,,,~,_., ...... reilu_ es! and tim Issuer
Parties tgreio: and Warranlle~ of the ISsuer. Th= Issuer represents and warfares £~
by ~he IisUer.
Stiuemen; and the Official Stalerne~
to th~ Issuer), docs not and "NO LITIGATION
contain ;ay untrue statement of
to make me star~.aent;.conra~~
Offic~ i they were made, riot mislead. :The/ssue:
section of the l:~relirninar)
of ; appendices thereto, excep£ ~ha~, to thc
appendices make an untrue statement
ozher sect to make the statements rmde in such
mb;leadin~ the c/rcunut~inccs Under Which they Were madc, not
.fo) ~By officia/action of the Issuer '
~hereof, tile ~suer has duly approv~ prior to or concurrently
has duly author ~ ra~ified the u with
ized a~l a roy se of the P~ ' ' acceptance
· ' n and dehve of, ,,,,~ ,~,- _ _~_,~aricial _St,~.enle~, has dul
~ ~ on ~ part :comaine~ ry ' "'"' '"' l~rormance by the I~Suer of ~hey
in. ~ ~, the Bonds. this BoM
Loan ~, and thc Tax ReSula/o A l~rchase
_.cons~nmalion ___ ry ,greemen
.of all other ~ . t Agreemcm, the
..a~d.._l_l_~as. duly author/zed and '"-r'-ved--
i'umhae Agreement. araactiora on ac part ,,. ,a= iis,,er co,,,..., .....
.... ~,,,,,r,a oy,~ 'rais Bond
rd) To rI~ best oftl~ Issuer's knowledge, fi) the ISsuer
Under any 'applicable law or ' ,
would ' - admi~r, ra~ive r is not in of or defaul/
- impair the ~,.,, .......... . egulanon of thc State breach
the ~'",,,,~uce or zr~ obllgailons under t~,;o ~,__., .. or the Un/ted States which
execution ~ delivery of ~ Bonds. the -.~ o,,.u rurchase
Indenture, this Ai'reemcr~; and (ii)
A~reement and the 'lax Ret"4atoz7 agreement, and Bond Purchase Agreemen:, the Loan
thereol~ will-not conflict with or co~titut¢
· compliance with the provisions of each
. ch rite Issuer ~s a Party or is ..... .at, note, resolu~/on, under any law,
~ omer¢.,i~¢ subject agreement or other instrument
or
perrormaz~ b -, waca woui · authori , bo
~, ~, '-~-=rc~nacr nave been obta/ne~ precec!,,ent m me
fl) Thc Issuer has received no notice of an.v action, suit, proceedin$, :::inquiry or
im'est/~t/on.: ~t law or in equity, bdore or by any ~OUr~. publ/o board or body, pendir~, and has
'96 ~B.~:EgFF~ SEHT ~Y RITTER EICHHER & HORRIS P. S/~
or sffeaing ~
affecting Iht caistcnc~ of the Issuer or
~ their resp~fiv¢ offices or seeking to prohibit, restrain or enjoin the
of ~ Bonds or the pledge of reveries or assets of the
on thc Bonds, or in any way con~estin~
of ~e Bonds, this Bond Purchase Agre. e~r~, the
authort~ : BOnds, ~he ~,ecu~ion
loan Agreemem or an
or ~ would ~e~ly
· c h~mre,
o~ ~ Bor~ ~rc~ ~~.
~) The Bo~, when ~su~, ~enti~ ~ deliv~r~
~rc ~ sold ~ .~ ~~s ~ pro~id~ here~, w21 b~ v~idly ~s~ ~ outs~d~
~ revue obl~o~ of ~e Bsucr ~o~c~ble ~ a~r~ce wi~ ~ar ~e~ ~ e~tl~
~o ~e ~l~ of ~e ~re, subj~ ~o (a) ~e exercise of
o~r ~imit~ laws ~ a~' ~s h~ofore or hcr~f~r
Bo~ ]~r~e A~~ up~ ~e ex~ugon ~ .delivery ~f, ~l ~timte leg~, v~id
~ b~d~ obl~afio~ of ~e hsuer cMor~ble ~ ~co~snce wi~ ~cir ~, ~bj~ w (a)
~e ~ of j~ic~ di~retion ~ :~rd~c~ wi~ gener~ p~ples of c~i~,
b~p~, ~olv~y, ~o~m~on~ ~.~ori~ ~d o~ s~l~ laws Mfe~ cr~iw~'
fig~ h~o~rc or he~e~ en~ ~ ~e ex~ ~m~o~ly ~lic~le.
(i) T~ Is~r E ~ now ~ de~ul~, nor ~ ~
s~ ~ ~1, 1~5 ~ ~o princip~ or :~t~st wi~ rc~
~y ~~ s~ by ~ ~~ offi~r of ~ hsu~ ~d d~Bver~ ~o ~c ~~ s~l
~ he~o:
(a) ~ .O~er (i) is a Florida ~ofi~ co~cr~on, q~ifi~ ~o ~act b~css
Slate, (fi) h~ ~ ~l l~ fig~, pow~ ~ ~ho~ to own i~ pr~effies ~d ~s~, ~d w
.~m ~ ~ ~ ~ b~ ~ ~ 2, ~d ~ contempla~ by ~ ~ ~men~,
~ :T~ ~o~ ~r~en~, ~s B~ ~r~ A~ ~d ~ Nole ~ ~e Mo~a~e
~Bver ~ ~ ~~, ~'T~ ~~ A2re~e~,
~ 2G '~6 83:28PM SEh~ BY RITTER EICHMER & NORRIS P.G/54
.lb) The ~e~ecution amd delivery of ,this Bond Purchaso Agreement, the Loan
,Ag~om'~ont, ,the Tax ~ulatory ~, ~he .Note and the Mongale have been duly
authorized by tim Owner arid have'been duly exccu~l and delivercd by the Owner.
; (c) The execation.azul clelivery by tl~ Owner ~of this Bond Purchase Agreement, and
thepefformance r the Owner
of the of
or which
(d) Ass ~g due authorization,
hereto: ~ Bond Pttr~e AgreemenI ,is a lcgal, valid
enforceable :~
reorgmflz~ion, mo~oriUm aud othe~
:hereafter enacted ~ the.~zcnt constitutionally, applicable.
Thc'
Corne~swne ~
omi~ to
Cornerstor~
the other parries
of hhe Owner
of judicial
insolvency,
or
m proje ,t Owr r, Hou i 'armership,
, :M~ag m~ .of Floridal inc. h~e ~el~ Official
.~ ~ not ~c ~y ~e sta~ of a m~i~ ~ or
wi~ resp~ to '~ ~oj~t. ~ O~r. Ho~i~ P~ership,
n~ss~ ~ or~r to ~ &e
und~ wM~ &ey wore
~ ~o~tion ~:
' ~c Lo~ Agr~t,"
L2tgation~ (i~ofat M ~e s~
"Appendix C' and
,6.? Covemmas of,the Issuer. Th~ Issuer covenants with the parties hmr~to d~a~:
(a) ~ between ~ ~ of ~s Bo~ ~e A~t ~ ~e da~ ~ days
~Ho~-~~ Da~ ~ ~e~ o~ts, w~ch :~ ~y ~wn to ~c hsuer, ~ ~e
v..,,~ which ~d ~e ~ ~r~on in ~e ~ici~ St~em~ ~der ~~s
~e ~~ ~e~ ~ :es~ct w ~e Issuer, m light of ~e circu~s ~der:. wMm ~
were m~, not ~l~, ~e Issuer ~ ~t~ ~ ~tch~en ~, ~ in ~ op~on of ~
O3:~DPM SENT BY RITTEREICHNER ~ NORRIS
P. ?/54
Issuer or the Purchss~rs such event recluims an smen~aent or supplcmer~ m the Official
~, the Issuer, soldy at thc ,~pe, me of the Owner, will amend or supplement the Official
Statcmer~ in a form and in a ro~r~er jointly approv~ by the Lssuer and thc Purchuers; provided,
however, if such evcat shall occur .on or prior £o the Closing Daie, the Purchasers in tl~ir sole
discr~on shall I~ve the ~ht to ,tenninae the obligations of the Purchasers hemunde~ by wri~en
notice to r. he Owner and the Issuer, and ~hc Purckssers ~all be under, no obligation tn purchase
and pay for the Bonds.
(b) Thc Issuer will, solely at tI~ Owner's expemc, furnish such information, ~xecum
such insu, umcnts sr~l r~ke such.other ~ction consistent with ~he provisions of thc Indenture, the
,'.Loan Agreement and the Tax ttegUlatory Agree_men! ~ coo~ratio_n w!th the Purc~_.e, rs,~ the
Pur~s may reasonably reques£ to qualify ~he Bonds for offer and sale under the Blue ~ or
other securities laws ami ~egUlations of such sta~e~ and other jurisdictions of ~ United Sr~es of
America ss the Purchasers may deSignae; provided, however, the Issuer shall not be required
to register .as ~ .dealer or broker in .any such state or.jurisdiction or be required to file a gencral
cov. se,_nt to service-of process o~ become subject to service of process in any .jurisdiction in which
the Issuer is not now subject to service of process.
7, Covemauts of the Owner. The Owner covenants wir, h the Issuex and the Purchasers that:
(a) If between ,the date of this Bond Purchase Agreement and the date 90 days
following the Closing Date ~ event occurs, which is known to the Owne,~, which would cause
th~ Official Statement to conta/n an untrue statemem of a material fac~ or to omit £o s~ate a
mamfi~I f~.necessary in order to .make ~ statements therein with resp~t to the OWner or the
Projcct, in light of the circumstances under which they were made, not misleading, the Owner
shall not/fy the bauer and .the Purchasers and, .if in the opinion of the Purchasers or the Issuer
such event ~ an amendmem or supplcmem to the Official Statemcnt, the Purchssers, at the
expeme of the Owner, will amend or supPlemcnt the Official Statement in a form ~1 in a
~- jointly.~proved by ~he Issuer and the Pure' ~h~sers; provided, however, if such even~
:occur on or prior to th~ Closing Date, the Purchasers in theLr sole discr~ion shall have the right
to term-i~m the obligations of d~ l:'urchaSers her~mder by writmn no£ice to the Issuer and the
Owne~, and the Pttrchssers shall be under no obligation to purchase and pay for the Bonds.
(b) The Owner si'all Uk¢ ~I1 ~cessar~ action on i~ p~ to ~use ~c Bo~s to
~ly ~ ~e p~i~ of ~c laws ~d r~om of ~c $ta~ punu~t to w~ch ~ Bo~
~e issued ~ of ~ ~e~l Rcv~ue Code of 1986, ~ ~~, ~d ~c ze~atio~
pro~tga~ '.~cm~d~ (~e "C~e")~ w!~ not t~ ~y action,' or pc~t ~y action witMa
im-'~l w '~ :~, w~ wo~d ~'~h provisiom or wM~ w~d ~use ~tcr~t ~ ~
B~ 'to lose &e~ ~fion from f~era income z~a~on.
8. Conditiens to.Obl~atio~ of Purchasers, The obligation of the Purchasers to purchase and
pay for the Bonds will b~ subject to (i) the accuracy of the reprcsentafions and warranties of thc Issuer
ar~ the Owner herein. (ii) the accuracy of the representations and warranties made by the Tr~e~ ~
~he Owne~ pursuant to the Loan Agreement and by the Owner l:~lmm~ to thc T~x l~gulatory Agreement,
(iii) thc perfo, mance by the Issuer and the Owner .of thei~ .oblig,t'.m...ns he. reur~,.r., (iv) the r.ecCipt of the
doall~ts spelled ill Section 3 hereof, and (¥) the followlllg adclitionsl corlalr, lolls preceaent:
~ .P_~ '~' .88:SBPM SENT BY RITTE]~ EICHNER & NORRIS P. 8/54
~ ({) P,x ~ ~c~)t as:.may :haw been a~reed to by the Purchasers, a~ tho Closing Date, ~
:!nd~-e, th~ Losn ~, ~ Note, ~he Mortgago and:tho Tax R~gulatory Agre~m~n~ t, and
~ ~ action of~ Issuer or ~ Owner rei~ting thereto shall be in full force and e, ff~t ancl
~shall no/have beau smended, modified.or suppl~ncated, and the Official Statameox sh~I1 not have
~bee. n..~ or supplemeated.
the Closin~
:Exhibit A'~reto.
, Katz,
' in the form
Date arid addressed to, or with
mpplemcntal oPinion of'Bond Counsel dated
to the Purchasers ~ the OWNS} substantially in thc form of
lc) The PurcJusers shall have received a c~nificate of the Issuor, dated ~he Closing
Da~e ~ signed on be.half of.r. he: Issuer, substantially in the form of Exhibit B hereto.
(d) The Purchasers and the Issucr shall have received written evidence that Standard
& Pom"s Ratin~ Oroup has issued a rating of "A" on tho Bonds and the documents delivored
at thc'Closing Da~e Shall sa~fy the conditions ~o the confinuancc of such rsting; and as of the
,Clos~ Da~, the,rafln~ shall not have been suspended or wRhdrawn.
(e) The PurChasers and hhc Issuer shall have received (i) a certificate dated thc
Closir~ Date and signed by .an authorized officer of lt~o Owner substantially in thc form of
Exhibk C hereto and (ii)~ opinion of co-counsel to r. he Owner substantially in the form of
Exhibit D 'hereto.
:(fi The Purchasers.shall have received oPinions of Purch~ers co-counsel, dated the
Closing Dace.and addressed to the purchasers tn the effect that the Bonds are not subject to tho
registration requireme, n~s ofr~ Securities Act of 1933, as amended, and thc Ind~mre is not
~ubjeci wthequal/ficsfion requirements of ~ Tntst Indenture Act of 1939, as amended,
(~) At ~ CJosir~ Da~e, the Tmstcc shall receive in inuncdiately available funds ~he
~r~ou~ set for~ in Schedule H hereof for deposk in the Cost of.hsuance Pund under the
th) The Purch.~crs and the Issuer shall have received an oPinion of counsel co tho
'Trus~e~ in form aud substance :satisfactory m them.
(i) The pumtmscrs shall have received an opinion of Iosias, Gorcn, Chemf, Doody
& Ezrol, P,A., counsel io the Issuer .substantially in the form of Exhibk E hereto.
?
~ (j) Wheat, First Securities, Inc..shall have received a Disclosuro Certificate from
each Co-Underwriter in substantially the form attached hereto as li~r. hibi£ F duly executed by an
authorized rcpresenr~ive of thc respective Co. Underwrit~r. '~
(k) The Purchasers shall have r~ceived such additional logaI opinions, cerlifmates,
proceedings, ~ and other documea~ as the Purchasurs or Bond Counsel may.reasonably
~ 7 L:%RA1~OYNTON%I.~PA. ~al ~,
JUM ~ 'gG B2:~BOPM SEMT BY RITTER EICH~R & NORRIS P.gx54
l
, All ~ opinions, let~rs, certificates, inswc~ments and other doaune~s mentioned above or
~-~ i ,elsewhere in fl~ BOnd Purchase Agreemelu shall be deemed to be in compliance with the P~rovisions
i hereof~, but only if, they arein fora and substance:satisfactory to ~he Purchasers.
9. Termination. The Purchasers may terminate their obligatMns hereunder by written notice
~.to ~e Iasucr and the Owner if, at any timc subsequent to the da~e hereof and at or prior t¢ the Closing
Datc:
~(a) (i) Legislation shall have been enacted by the Congress, or recommend~l to thc
Congrcss for ~e by the Prcsident of the United Sines or ihe U.S. Depanme~ of the
Treasury or the htcmal l~,~,m¢ Se~i~ or ~y m~cr of~e U~ Smt~ Co~r~s, o~
~vo~ ~ for ~ w ~cr H~se of ~ Con~s by ~Y Co~U~ of such Home
to wM~ 's~ letiaa~on ~ ~n refe~ed ~r ~mider~on, or (ii) a d~ision s~l .~vc ~
~e~ ~ a co~t ~abli~d .~cr Artklc HI of ~ Co~fimfion of ~ UMt~ Smt~, or ~e
U~ ~ ~ ~ or (fii)~ ord~, ~, relation or c~u~cafion (~1~ a p~s
rele~) sh~l ~ve b~n ~u~ by ~ D~~ of ~e Tre~ of ~e ~t~ Sta~ or ~
~e~l ~~ ~, ~ ~ch c~ ~e~ ~ in cl~ (i), (~) ~ (~), ~i~ ~e p~se
or ~, ~ ~ombl~ ti~l~ood, ~recfly or ~direcdy, of ~pOsi~ fed~ ~me ~on
u~n ~r~t ~o be re~iv~ by ~y hoI~rs of ~e Bonds.
(b) Legislation shall .have bccn enacted or any action token by the Securities and
[Excha~lg¢ Commission .which, 'in the reasonable opinion of counsel to the Pu~hasers, has the
effect of requiri~ fl-,e offer or sale of ~ Bonds to be registercd uridcr the Securities Act of 1933
or ~hc IndentUre to be qualified ss an indenture under the Trust Indenture Ac~ of 1939 or any
event shall have occurred which, in ihcir reasonable judgment, makes untrue or incorrect in any
material rcapoc~ any, statemcnt 'or info--on contained in the Official Stalcmop/or which, in
g~cir ~cason~hle judgmc, ut. should be reflect, cd therein in order £o mak~ the statements 'contained
t~rein not misle~dlng in any material respect
' (c) (i) In the Purchasers' rcasormble judgment the marke~ price of t,h~ Bonds is
adversely affected because: (a) -dditlonal material rcsr~icdo~ notiin forcc ss of the dale hereof
shall h,ve'been imposed upon ~ng in securities generally. by ~_y govemmenml.au,~or!?y or.
by any national securities exchange; (b)the New York Stock Bxchan~c or omer nauona~
scc~urifies exch~c, or any govemmenmI authority, ahall impos~, as to the Bonds or similar
obU~a~ions, an~ rna~ial restric~iom no~ now in force, o~ increase materially those now in force,
with respect w the extension of credit by, or the charge ~o th.~ net capital requircmcnts of,
underwriters; (c)a ieneral bankin~ moratorium shall have been, established by Federal, New
York or Nlorida authofit/cs; or (d) a war involvin~ the , of America shall have been
declared, or .an) ., or any conflict
involviv~ ~ armed
shall bo insfi~tned,
or .in any way
or tl~ existence or
enacted bY
imposint
(iv) any~
or c/f.~t, dkecd~
escalated W such a
Oi) any litigation
restrain or e~oin the] issuance or sale off the Bonds
~ or securky for or thc validity of'thc :Bonds,
introduced in or
or indirectly, of
, any holders of the~Bonda, or
with the purpose
mxatlon upon interest to bo reccived
i
.TUN 2_~ ',9G ~':31P~l~TE~YRITTE~'~CH~_R & NORRIS P. I0/54
I
1
judging, adversely affec~ ~ s~arity for the :Bonds.
; ,(d) Ihere.shatlhav¢ occurred a.y change which, in the reasonable iud .g~,. n.t of the
purchasers, rr~t~s ~onabte or un~eliablc any of.the assumptions upon which (i) yield for
purposes of Se~on 103 ortho Code, (ii) paymcn~ of debt service on the Bonds or (iii) the basi~
for the exeml~on :of/nteres[ on thc Tax-Exempt Bonds from federal income mxaI/on, is
~(a) In addition.to the provisions of Section 5.3 of the Loan A~rccmcnt, the Owner
ag/ecs to~ andhold harmless the Issuer atains, t .a~.y.and all t.osscs, d,ma. ges,.¢xpemes
/i tudi r o ble, al and oth biiiues or. (or ?a.,o? m re p?
thcrcol), joint or sc-~erat, to ~hich ~e Issue~ or'~c persons described l~.l.ow m this subsection
(a) may bccim~ actually liable to tl~d parties under federal or state securities laws or any other
statutory law or at mmmonlaw or ~se, ~ising out of or based upon or in any Way r. ela.}ng
to any tmm~:~ or misleadi~ staemerl or alleged untrue statem,m or alleged misleadmg
Stammenl ~r l:he Bonds other than under r. hc Captions TI-lB I$$,,UB_P[,_ and NO LITIOATION
(imofar as the ~ relates to ~h¢lssucr) (the "Issuer sections ) or caused by any omission or
~Icg~ omission from the Pre'~ Official Statement (other than the Issuer Sections) or the
~ Smmmeat for.die Bonds iother than ~he Issuer $cciio~) of any material fa. ct necessary
iobc ,stated ther~ia in o~derto make the statemcm made therein, in light of thc circumstances
ux~lcr which dicy were made, not misleading.
to :thc 'Issuer shall ~:upon- thc same ter
employee of.the Issuer.and each person,
Section 15 of thc Securities Act of 1933,
Securities NxChange Act of 1934, as amen
by any '~ed party w third parties
defending ag~r~t, or provided evidence, pr
action/in respea of any'such toss,
the /), or re lting ,in any ]iab
aggmgate,~.paid in setd~¢nt of my li
whatsoever asse~ forth her~in, provided,
wri[mn ~ of ~he Owner.
Thc indemnity provided under this subsection (a)
.z~ and .condition w each officer, commissioner or
ny who comrols thc ISsuer, within the mem2ng of
amended, (the '1933 Act") o~ SecQon 20 of the
ied (the '1934 Act"). Such indemnity shall also
,~ses whatsoever reasonably and actually incurred
a connection with investigating, prep~in!/for or
~duci~g documer~ or taking any otheff' reasonable
expense, liability or: claim (or action in respect
ity, and shall include any loss to thc extem of the
lation, c~mmcnced or thrcatcned, or of any claim
,wever, only if such seRlcrnent is effected with thc
(b) The Owner agrees-to
alIlos~es, clamag~.
upon or
[y and hold harmless the Purdmsers a~ainst any and
nable legal and other fees and expenses), liabilities
or several, to which ~e PurchaSers or tho persons
tctually liable to third parties under federal or stye
common law or otherwise, arising out of or based
tatemen[ or misleading statement or alleged un~ruc
staigmcm or alleged misleading. Statement of material fact contained in the Prelim/nary Official
~ or the Official Statem~t for ~ Bqncls un&r the eaptio.,ns, "THE OWN'ER.~AND THE
CT." and "APPF.,NDIX A D 'pfion of the Project' and thc actual filancial and
PROtt~ _ ' ' - ' : ':' L
operational information contained .in ~LPPENDIX B - PRO FORMA K~IANCIA
~UN ~6 '96 03:31PM SE~T ~Y RIIT~R :EIC~tMER & HOR~I$ P.11/54
PROIECTIONS (tl~ "Owner Disclosure") or caused by any omission or alleged omission from
the Owner ~D' ..zsclos~e in :the 'iPrgimirlary Official Statement or
Official .Statemt~ for thc Boris ~of any ma~ial fact ne~ssary to be stated therein iu order to
m~lee th~ s~ made ~ hi ligtE .of the.circumstances under which they wcr~ made, not
misleading. Ti~ ~-provided under,this subsection (b) shall extend upon the same
and coudirions wench officer, commissioner or employee and each person,
if any, who collR'ols the the ~crs,
of 1933, as amended, (the '1933 Ace') or Section 20
as ~ (~"'1934 Act'). Such ib_dem~ty and
all ex~nses wimIso~ver reasambly .and acmalty incur~ by~ parties
in connection with invesfigaiing, preparing
producing &x;ume~ or ~-~ny .other reasonable ,'
eap~, ~ or claim (or action'in rcsp~-~ thereof),
-and skall include any loss io the .extent of the any
litigation, comincncecl or,threa;ened, or of any claim provi&xl,
however, onIy if such seU. I~ is effected with the
(c) Within a reasonable ~ af~ an party
of this Section I0 shall h~ve been served with tbesnmraons or
have received written noqce of the threat
claimed, such.~ified pazty shall,
against thc Owner under this Section 10, notify
thereof; but .the omission so to nofi~ the Owner shall no~
thai it may .have to any indemnified parry other than pursuar~
Section t0. ~TheOwner .~l~s~! be entitled to
~ Oxmcr so elects wi~ a reasonable ~ after
paitics s~eking indernnit~cation 'in such notice so direct,
any suit brough~ lo enforce any such claim, and such
chosell promptly by :the Owller and reasonabl}
illdemuified parry shall have been advised by its
betw~n Uh¢ Own~ or another defe~ant indcnmified
of such cotms¢l are sufficienl w make it ttudesirabl¢ for
'~lnified party and thc Owner and/or another defendant
party shall .have the .right. to employ
C~'a~r shall not be eniitled to assume the
No~i~g contained
~om ret~ini~ additional cotms¢l io represcm such
indemnity mayb~ sougl~'heretmder.
(b)
or shall
indemnity n~y be
~ be made
:omm~m~ment
tu~ liability
of this
andif
all indemnified
of
any tach
interest
; opinion
such
· respect to which
(d) The indan~ny provided by ttds Secti~ 10 he~eof shall be in addition to any other
liability :that r~e Owner .may otherwise have heretmder, at common law or otherwise, m-~d is
provided .solely for the l~u~t of the Issuer arid the Purchasers, as applicable, each
~oner. offr~r~ ,-.-mployee and con~rolling person referred to therein, and thcir~ respective
successors, assil~ and .legal ~eprese~afives, and .no other person sludl acquire or have. any right
under or by virtue of such :provisions of this Bond Purchase Agre~men£.
.gl_~ ~ ~6 O~:3~PM SEhFF BY RITTER EICH~ER ~ ~ORRIS P.1~/54
(a) The Owner sl~l cause to be paid all teas of i,ssuan~ incurred in connection with
the issuance of the Bonds, Which arc set forth on Schedule II hereto.
(b) The Owner shall pay its own expenses, including the fees and expenses of its
coun~l, except ~ otherwise provided on Schedule H hereto.
(c) The Pur~ shall pay all advertising expenses incurred in connection with the
.public offering of the Bonds.
The Issuer ~ not bc respomible for the payment of any expenses relating to rim issuance, sale
and,delivery of thc Bonds.
12. Truth in Bonding. The Issuer is proposing to issue $11,400,000.00 of debt for the
propose of rei~mancing certain debt of the Owner relating to the Project. This debt is expected to be
l~fid over a period of &irLy and one-half years. The Bonds are being issued al au average interest rate
.of % and the total interest to bc paid from the Closin/Date to lanuary 1, 2027 is expected to
be $ (assuming that the interest rate on the Bonds shall not be subject to gross-up pursuant
to the terms of the Indenture). The source of repayment for this issue will be the payments on the
Promissory Note assigned to the Trustee, together with the Mortgage, to secure the Bonds under the
Indenture. Author/~! this debt will not have any adverse impact on the moneys of the Issuer available
to finance other services of the Issuer while the Bonds are Outstanding.
13. Notices.. Any notice or other cornmuui~ion to be given to the Issuer under this Bond
,Purchase Agreement may be given by delivering the same in writing to the Owner or the Issuer at their
addresses set forth above, and any notiee or other communication to be given to the Purch~ers under
:this Band Purchase Agr~ment may be given by delivering the same in writing to Wheat Fir~ Butcher
Singer, Raymond James & Associates, I~c., and Stifel, Nicolaus & Company, Incorporated, c/o Whea~,
'Fire Secur/fies, Inc., 465 South Street, Suite 310. Morristown, New Jersey, 06830 Attention: Mr. Robert
'$pangler, Senior Vice President.
14. Stw. cessors. This Bond Purchase Agreanent is made solely for the benefit of the Issuer, the
Purchasers and the Owner (including their successors or assigns) and no other person shall acquire or
have any right hereur~r or by virtue hereof. The representations, warranties, and agreements contained
herein shall remain operative and in full force and effect and shall survive delfvery of and payment for
the Bonds hereunder, regardless of any investigation made by or on behalf of the Purchasers.
15. Govemi~ Law. This Bond Purchase Agreement shall be governed by the laws of the State
of Florida.
16. Counterparts. This Bond Purchase Agreement may be executed in one or. more
cmmterparr~, each of which shail be deemed to be one and the same document.
J~N 26 '96 f53:SESr~ SENT BY RITTER EICHNER & NOP~RIS P. 19/54
17. Eit~iveness. This Bond Purchase Agre. eme. m shall b~come effective upon the execution
· ortho acceptance hereof by .the'Issuer and th~ Owner.
Veay truly yours,
WHEAT, FIRST SECURITIES, INC.
RAYMOND lAMES & ASSOCIATES, INC.
STIFEL, NICOLAUS & COMPANY, INCORPORATED
By: WHEAT, FI~T SECURITIES, INC.
'By:
Title: S~nior Vice Pre, sidcm
Thc foregoing is confirmed and accepted as of the date first above written.
CITY OF BOYNTON BEACH, FLORIDA
Title: Mayor
C/lIP COVE, INC.
Title:
12
i JUN 26 "96 OB:BBPM SENT BY RITTER EIC~R & NORRIS P.14/54
MATURITIES, PRINCIPAL AMOUNTS, INTEREST I~TF~
$CI-W.r)ULE I
].TUN 26 '96 ~B:BBPM SENT BY RITTER EICHNER & NORRIS
P.15/54
ESTIMATED ISSUANCE EXPENSES
SCi~OULE H
,Bond Counsel Fe~ and Expenses
Underwriters, Co-Counsel
Trustee's Counsel &Sei Up
Trus~'s Initial
Accounting l~s
Printing and Mailing of POS & OS
Underwriters' Compensation
Ratings
Appraisals
Phase I Studi~s
A~/$u'uctural Studi~s
Market StUdies
Title & RecordL~
Misc~llan~us/Confingenc¥
Toufl Costs of Issuance
3'L~6 '5~5 '83:3~PM:~E~fl'~Y RITTER Ei~H~ & ~)RRIS P.16/54
LEGAL 'OPINIONS OF BOND COUNSEL
(Clo~ing Dam)
~, F~-st,Secur/~, Inc.
Raymond ~hmes & .k. ssochtes, Inc.
do .~, ~st S~, I~.
~ Sou~ S~, ~ 310
~M~w~, N~ 07~0
City of Boynton Beach, Florida
C/HP Cove, Inc.
c/o Cornerstone Housing Corporation
1350 Beverly Road, Suite 200
McLean, Virginia 22102-3634
$11,400,000
CITY OF BOYNTON 'BEACH, FLORIDA
MuK/-F~mily .Housin~ Mortgage Revenue Bonds, Series 1996
(Clipper Cove Apsmnents)
La&es and C-entl~m
We have acted as Bond Counsel in cormection with the issuance by the City of Boymon Beach,
Florida (the Issu ) of the captioned Bond~ (the 'Bonds~).
We hr~ve e~mined.the law and such certified proceedings and other papers as we have deemed
necessary to-sender this opinion.
'Unless the comext clearly i~ica~ otherwise, each capitalizeg term used in ~ opinion shall
have ~ same mtanil~ ~s set ford~ in the hdeature of Trust a~d Assi~rnen~ of Monga~e'damd as of
July 1.199g by and between the ,Issuer and Th~ Bank of New York, as Trustee.
We r~fcr youto ~he Bonds and to the Indem-ure for a description of the purposes for which the
Bon/h ~/ssued, dl¢~ ~the Bonds, d~ mann~ in which ~md times at which the principal of and
prcm/um ('ff any) and interco-on the Bonds are payablc, the huerc~t rate or ~atcs payable on the Bonds,
fl~e provi~ions under which the Bonds may be purchased or rc&.emed prior to their s~a~'d maturity, and
all other dec. ils of the Bonds. ,
As .w que.~om .of fac~ nm~rial to this opinion, without under.king to verify the same by
/nde~ inv~afion, we have relied upon rcpresemafions of the Owner and the Issuer in the
l~inancin~ Documemx, the certified pwceedin~s of the Issuer, ccnificafions by public officials, and
..TUN 26 'gE, I~I3:34PM SENT BY ..RITTER EIC~'& NO~S P.17/54
cer~_C~i~ns by the pann~s, em~oyee, s and representatives of the Owner (including, without limir~Iion,
cerfificatiom as to the ~uure and use of the Projec~ and Ihc use of the proceeds of thc Bond~).
We. havc assumed the accuracy and truthfulne~$ of all public records and of all certifications,
.~ and other proceeding-examined by us that have been executed or c~rtlfied by public officials
~ vri,hin the S¢OlX~ of their official capacities, and we have no~. '.mdep, endently verh~i~ thc accura?
or ~~ thereof. We.have also ass~ rim genuineness of the signatures appeann~ upon SUCh
tmbBc records, c~nificatious, docurncms and proceedings.
Further, wc have assumed ff~e authenticity of all documents submitted to us as originals, the
~ness cf all signatures, the conformity re original docomenls of all documents submiued to us as
-ccrtifiixi or photostatic copies and thc authenticity of the originals of such latter documents.
We do not express ,,any opinion hcr~in concewlng any law other than thc law of the S~ate of
Florida and ,the federal law of r. he Unit~l States of America.
We have not examin~ and expr~s no opinion as to, thc existence of or title to real or personal
:property, and, except as expressly stated herein, we express no opinion as to the creation, validity or
-priority of my lien upon, assignnmU of, pledge of or security interest in any real or personal property.
We have not reviewed or examined any financial information or other information with respect
to theOvag, r or any other .person, and we express no opinion relating thereto.
Based upon, and subject to, the foregoing, and on the basis of existing law, it is our opinion, as
of rhe.dat~ ~hereof, that:
1. The Issuer :has full legal right, power and authority tn execute and :- deliver the
Indenture, :to authorize and issue the .Bonds and to carry out the transactions con~mpliled by thc
Indenture'and thc Bonds; ~-d the Indenture, ~¢ Loan Agreement, the Restrictive Covenants, the Bond
'Purchase Agre~em and the Bonds (collectively, tl~ "Isstmr Dec,menus") have been duly ~xid validly
authorized, exeaited and delivered by the Issuer, are in full force and effect and, assuming the due
au~lofiz~on, ~ecufion ~nd delivery by .the other parties thereto, constitute the valid, legal and binding
obligations of the Issuer and, subject to paragr~h 3 below, are enforceable in accordance with their
2. Thc Bo~ls me not requir~ to be registered under the Securities Act of 1933, as
amended, and ~ Indenture is not required m be qualified under the Trust Indenuu-e Act of 1939. as
3. Thc right of any holder of the Bonds and the enforceability of the Bonds and the
oth~ Is.suer Documa'~s are sabjccl to: (a).the ~ercise and judicial discretion including judicial, limit.-ions
on ~ to specific performance; (b) the valid exercise of the constitutional powers of the Unir~l States
.of America and of gee sovereign police and taxin~ powers of state or other governmentsl units havLng
jurisdiction; and(c)bankn~y, imolvency, re. organization, moratorium or other similar laws heretofore
or hercaf-o~ in effect affe~in~ credkors' rights, to ~he exteI~ constitutionally applicable. Enforceability
of the provisions contained in the Bond Purch~e Agreement and th~ other Issuer Doclllll¢Itts pertaining
Io indemnification may also be limited by-applicable securities laws and public policy.
A-2
L:~,R.A~tlOyNTO~IlPA. l~m~ 2g, 1~96
~TUN .,~tS ~"~ 'I~:~4PM SENT ]BY RITTER E~'CHNER & NORRIS P. 1B/54
4. Thc statements con~ain~ in the Official Sr~emem under the captions
:-SERIES t~ BONDS". ,SECURITY I~OR'THE'$EKIES 1996 BONDS," 'THE INDENTUR.E", "THE
LOAN AGRt~I~MENT". "THI~ NOTE AND THE MORTGAGE," THE R~TRICTIVti
'COVI~NANTS,~ ~'TAX TREATMENT OF THE SERIES 1996 BONDS," APPI~NDIX C --
~SLTMMARY-OF ADDITIONAL SELECTED PROVISIONS OF TIlE INDENTUR~ AND LOAN
.A(~REEMENT," and APPISNDIX D -- 'PROPOSED FORM OF OPINION OF BOND
~COUNSEL,,i~ofar as su~ staIe, mcn~s purport -to summarize rl~ Act,: the Indenture, the Bonds, the Loan
~eat, ~ Mortgage Note and Mortgage, the Restrictive Covenants imposed on the Project and the
~ taxation of interest on the Bonds, fairly sunm~arizes the legal matters.referred to therein.
This opinion is furnished by us to meet c~tain requirements oi' paragraph 8(b) of the Bond
'Parcbase Agreement. No-one other flma the addressees may rely upon this' opinion.
Very tmly yours,
3L~i igS ~95 ,~B:B4PM 'SEh~ BY RITTER ETCH~ER ~. HORRt~ P. lgx54
CLOSING CERTIFICATE OF THE ISSUER
$11,400,000
'-.CITY OF BOYNTON BEACH, FLORIDA
-MUlti-Family Housing Mortgage Revanue Bonds, Series 1996
*(Clipper Cove Al~ilments)
E _X!~alT B
ISSUER'S GRNERAL CERTIFICATE
This Cenifi~e is being execumd and delivered in connection with the issuance and sale of the
$11,400,000 principal amount of i~s Multi-Family Housing Mortgage Revenue Bonds. Series 1996
(Clipper Co~¢ Ap~) :(the "Tax Ex,rapt ,Bonds" or the 'Bonds'). Each capitalized ~erm used
herein and defined in'~ Indenture of Trust ,and Assignment of Mortgage dated as of July 1, 1996
between ~he CL~ of Boy.on-Beach, Plorida (t~e "Issuer') and The Bank of New York (the '!Trustee'),
which is being entered into in conlllxIion with the issuance of the Bonds (the '~Ind~nture') shall have the
meaning set forth fi~rein,-unless the conlext clearly indica~ otherwise. ~,
We Ihe City of Boyixon Beach, Florida, hereby respech~ly certify as to ~ matters set forth in
all of the following paragraphs, except as otherwise provided for herein:
(1) is 1h¢ duly elecIed, qualified arid acting _ of the City
of Boyl~n Beach, Plofic~a (the "Issuer'), and the signature set forth i~ the space indicaied for his v~me
below 'is his lxue and §~muin~ signature-
(2) The Issuer is a polMcal subdivision and municipality of the State of'Florida.
(5) The proper and correct corporate name of the Issuer is 'City of Boynton Beach,
:Florida.
': (4) The person hereinbefore named has not held or exercised any office' or place of
,trust or profit under the .Uniw. d States of America, or any department ~hcreof, or under thc State of
Florida, :o~ under any other state govemuzm (cxc~t thc respective office to which he or she was elected
or appointed as hereinabove sr. ated) at the time of his or her election or appointment to the respective
office to which he or she was elected .or appointed as hereinabove stated, or during his or her term of
of~.e.
(5) 'The Issuer's seal. an impression of which appears below, is the adoptS, proper
and only official seal -of ~ =Issuer.
(6) Attached hereto as Auachment A is a true, correct and complete copy of
Resolution 'No- , adopted by ~he City Commission of the City of Boynton Beach, Florida (the
'Board") a~ a regular m~ing duty called and held on __, 1996 (the 'Bond Resolution'). A
proper :quorum was .present throughout such meeting-znd the Bond Resolution was duly proposed,
considered and adoplcd ~ conformity with all applicablc requirements, and all other requirements and
proc,,~li,~os (including any and all required po.~in~s a~xl publicatiom) incident to the proper adoption and
JIJR ,~S '-96 .03::35RM SEHT BY RITTER EICHRER & RORRIS P.~0/54
:e. ffe, cfiven~ss of the .Bond Resolution/haw'b~n duly ~lled, carried out and otherwise observed. The
iBond .Resolution has not be~n ammded, r~aled ar rescinded since its original adoption and is in full
,force ~i~xi eff¢ci on the date of this Certificate.
:C/) A public healing with r~specI w file Bonds and the loca~on and nature of the
was held:on m, 1996. The thne and locaIion of the public hearing
Journal .on __ and __ ., 1996. Such r~wspaper is a newspaper of g~neral
'circulation available to r~ider~ of Such notke of same
ms~ner ~ in the sam~ locations as required of the Issuer fo~: other purposes for
or:local .law specifies a notice of public hearing requimmen~ (including public
heari~s of Pahn Beach County).
(8) The certifies that he has received no notice of any litigation, nor,
-to the best of'his lw__owtedg¢--~-is there any litigation threau:ned against the Issuer, (a) contesting the
creation, orl/afization or co~poraI¢ exis,¢ncc or me bo .u~l. afi,es o.f the Iss~uer or. ,me,en .it!_e
present,officers of hh¢ Issuer w their respective otliccs, lo) wncrem an un~avoraot¢ acc~s~on, nulng
~/~,~rlln~ .would mar. crially adversely affect the transactions contemplated by the Bond Pmchasc.Agreem~nt
and by the Offmial ,Statement 'relating ~o die BOnds (the ~Official Statement'), (c) which in any way
woUld.adversely affect flu~ validity or enforc~abilit~ of the BoM R/solution, or any of the documents
execu~ and delivered in connection with d~ issuance of the Bonds to which the Issuer is a pan~, (d)
.restraining or.enjoining the issuance, sale, execution or delivery of the Bonds, the collection of thc
revenues and receipls of thc Issuer pledged or w be pledi~ed to the Trustee w pay the principal of and
~erest on the Bonds, or the pledge thercof, (e) affecting the Issuer which calls inw question or affects
th, v idiV or ar ,b iV or th, th¢ p,o . dings and a a?
authorized to be issued, sold, and dehvered, or any documents executea vy m'~ on venau
pursuant to the Bond Resolution, or the performance by the Issuer of i~s obligations under such
documcl~, or (f) affec~in~ the tax status of .the Issuer or the Bonds and t~ interest to be paid thereon.
(9) Thc c~rtifies that each of the documents in connection with the
Bonds .to which the~Issuer is a party, th~ compliance with the ten'ns and conditions thereof and the
consummation of thc transactions therein and in the Official Stammcnt contemplated to be performed by
.lhe Issuer, do not ~nd Will not (i) w the best of his knowledge, vioh~e any law or any regulaion, order,
.injunction o~ decree of any court, governmental body, agency or other public inswamentality w which
the Issuex :is subject, or '(ii)result in a conf4i~ with or a breach of any of the terms and conditions of,
or constitute a default under, or, except as contemplated by the Indenture, result in the creation or
imposition :of any mortgage, lien, charge or encumbrance of any nature whatsoever upon any of the
propcrt/~ ar assets of the Issuer pursuant ~o the terms of, any indenture, morzgage, agreement or other
imllumem w which the Issuer is a party or by which the Issuer or any of its properties is bound and of
which we,'haV~ knowledge. No approval of, notice £o, regiswaion o~ fil/n~ with or other action by any
.govewmenla4 authority or agency is required hi connec~io~ with thc execution or performance of any of
such doam~s'bY the Issuer, except such as may be required under applicable "blue sky' or securities
laws in connection with the offering and sale of ~he Bonds by thc Purchascrs. No a~thority or
proceedings for thc issuance and sale of the Bonds have been repealed, revoked or rescinded.,
(10) · , :~s , h~s officially caused thc Bonds ~o bc executed
in ~be ~,r~of~,the lssue~ by~ .manual-o~ facsim~e ~signature .(and if by facsimile, which facsimile
~m~e-hc,,does by these,prese~adopt as and;for his ow~) and an impression or facsimile of the
~ seal of ~hc Issuer to be impressed,or otherwise reproduced uhereon, and attes~t by the manual
ot f~..S~e .si~nat~c of _, as (and if by facsimile, which facsimile
.~ ~he riots by these ~--res~t.s adopt as and fo~ his own).'
~(11) Thc Spechncn of the Bond atac~d ,hereto as Exhibit C is a true and genuine
specimen of suCh Bond.
~ (12) ~e Indesm~, the Loan A~eemen~, the Bond Purchase A~reement, the Official
' $iate~ent, and the Tax Regulaloty ~emcnt 'have bccu executed in the ,~m¢ of the Issuer' and on its
beJl~by ,as _ .'by his mamlal si~natut'e, arid thc fi_r~naing statemellt required
.Jo be.executed and delivercd by thc Issuer has also been executed in thc name of the Issuer and on its
~-by . as _ . by.his mamial sil~tature-
-(13) Thc c~rporale seal of the l~su~ has been impressed on the Indenture, the Loan
A~-reemcnt and ihe Tax .Rc----------------~latory ~ and atestecl by ., as , by his
manual s~e. ~ Indenture, .the Loan Al~reement, th~-Bond Purchase At~reement, the Official
Statemcnt~an~ the Tax Re~llatory ~cmeni, tof;ethcr with all closing certificates and financing
statements, areherein sometimes colleaivcly .called the "Bond DocumenIs."
(14) On the date of delivery of the 'Bond DoCUments, which is also the date of this
Ccnifica~ we are the ~tly chosen, qualif~l, :and acti~ officers indicated on thc Bond Documents, and
r -- on this ~, and ate. duly awho~ to ca~e ~c Bond Documents to bc ex~cuted as recited above
and.to'effcct all other transactions contimplat~d by the Bond Documents.
(15) l~leither lhe Bond Resolution n~r any other pwceedir~ of the Issuer (a) authorizing
thc issuance and sale of the Bonds, ~) appro-,4ng the Bond Documents, or (c) authorizin~ the execution
and delivery (where applicable)of thc. Bond Documents on behalf of the Lssuer have been rescinded or
t-epcaled or modified and nmended in any r~-pe~t, and th~ Bond Resolution and such other proceedings
are in full force and-effect on the ga~ l~eof.
' (16) Thc _ccllifies lhal, ~s of the date of this Certificate w thc bes~ of his
~knowledgc, t~l~suer has the powen a.nd lawful authority to issue the Bonds, w execute and deliver thc
Bond D~ and all requkemems .and conditions spccified in the Act, and all othe, r laws and
· et~dafio~ apglicable to. the adoptt~ of the Bond tL~:olution and (where applicable) thc Bond-Documents
: have becn fillt=illed-
: (17) To the. best o~ our knowledge, no ,event which (wiuh or without no~ice or lapse
, of ~Jmc or'both) would constitut~ an l/vent of Default with respect to the Lssuer tm_der any of the Bond
Doannents h.-,.~ occtured and is continuing as of thc date hereof. The IsSUer will not take any action or
onfit to .t~ anyaction requested by the Trt~tee to bc taken, Which action or omission wlll in any way
.... ,cause the pwceeds from the snk~ of thc Bonds W 'be aPPlied in a manner other than as provided in the
L:~RARItO~N'd..EI~BPA- J"~ ~,
.zTLIbl L:~iS ".9~. ~EI3:36PM SEINT BY RITTER '~i'~H~R & MORRIS P.~2/54
I
(1.8) Each and,all of r~e.repre~nuriom and warramie~ made by th~ Issuer in the Bond
Documtmis in-~nno:~on with th~ sale:of the Bonds are Lrue and corr~r on the dare hereof as if the same
-w~ made 'on the darz hereof.
, whosc true and genuin~ signature appcars below, is'hereby
auihoriz~ tomk~ all actions and to do all things on behalf of the Issuer which are ~ or permit~d
.and= ~ terms of thc ~Bond Docum~.
*~0) ThC Issuer-is not now in default, nor has the Issuer been in default at any time
~.~~r 31, I975 as ~o principal or inter~s~ with respeat to any obligalions issued by the Issuer
or ~or so the Issuer.
(21) (a) Pursuam ~ and i~ accordar~ with the Loan Agreement, the proceeds of the
~Ban~ .are to,be.loaned to the Owner in order to ~efumn~ a portion of the costs of the acquisilion and
~construcraon by thc Owr~r of a multifamily housing proje~ and f~:ilides funotion~ly related and
~te thor=to loca~ in thc City of Boymon B~aoh, Florida (the 'Project').
(b) In his capacity as the duly elected, qualified and ac~ing of the
~ of B°yn~on Be, ach, Florida, hereby approves the Bonds and thc Project.
WITR"~$ ,our official signatures in execution of this Issuer's General Certificate, and the seal
of.ll~ Issue, all as of this _ day of Suly, 1996.
Title:
;EXEIlBIT A - Bond Resolution
,EXItIBIT.B - Notices of Publication
;IDaflBIT C - Specimen Bond
B-4
L~DJ~'ll]OYlqT~PA. ~ 26, 1~
JUN ~2G
~B,:-~TI~M SE~NT BY RITTER EICF~'~'R & H~RIS
P.A3/54
E~~ C
C~OSING CE~T"~ICATE ,OF OWNER
" r" hereby certifies,
The und~ C/HP .'Cove, Inc. (the Owrie: ), by ,
represents and warl-~n~ to .the Issuer and :the Undo'writers named in the OfQcla] Slatement described
below, as follows:
(1) To tl~ :best :of our.knowledge, thc represen~fions and warranties of the Owner contained
· in the Bond Purchase Agreement among the Owner, the City of Boynton Beach, Florida (th,e 'Issuer'')
aud the Under~aiters mined ~in,r~ OCncial-SW. ement rderrcd to below (the 'Bond Purchase Agr,. cement")
are.tree and correct in all material respects-
(2) To ~h¢ best of our.knowledge, the Owner has materially compiled with all agreements
~ satisfied al'[ maler'~ condin'o~s co~ in the.Bond 'Purchase Agreement for the Bonds (as defined
below) on its part robe performed or sari.vied prior.w thc date hereof.
(3) To the best of our-knowledge, there has not been any material adverse change in thc
financial position at 'which affects the operation of thc Owner or the Clipper Cove Apartments in its
businesses or any nmtefial adverse change affecting the housing project in the City of Boynlon Beach,
Florida .known as the Clipper Cove Apartments (the "Project') which would impair the ability of the
:Owner to ~ the Pwjeci as con~emplat~l by the Loan Agreement between file Owner and the Issuer
relating to file issuance by fll~ Issuer of itsl $1'1,400,000 principal amount of its Multi-l~amily Housing
Mortgage Revenue Bonds, Series 1996 (Clipper Cove Apartments) (the 'Tax, l/;xempt Bonds" or the
(4) *~ztc in:~on ~elatJ~ to the Pwject, thc Owne~, Housin~ Paz~neTsb~p, Cornerswne and
Property Asset ManaS~ztent of l~lorida, ]nc. in thc Prel~ Official Statement and thc Of~cial
Statement do~s no~ ~ any'.unmm statement of a ~ fa~t or omit to state a material fact with
respect to the 'Project, the Owns, .Housing Parmership, Come,one or Property Asset M~nsgcment of
Nlorida. ]~nc. neces~ in order ~o make the statements made with ~espect ~hcreto. in the light of the
circumstances under which ~hey were made, not misleading, provided that no representation is made
conceroin~ the information under the captio~ "THE SERIES 1996 BONDS," 'TH~ ISSUER,' "THtl
.INDENTURE,' 'THE LOAN A/3REEMENT,' 'THE NOTE AND MORTGAGI/," 'THE
RESTRICTIVE COVENANTS," "NO LITIGATION' (insofar as the same relates to the Issuer), "TAX
TREA~r OF S]~F-,S ~199~ BONDS,' "APPROVAL OF L]~GAL MATTERS,' 'CONTINUING
DISCLOSUI~,* '~RATIN~,* 'UNDEI~WP. ITING' AND ~MISCELLANEOUS,' 'APPt/NDIX C" and
"APPEI'~D]~X D" ~xce~ ~fila~, to thc knowledge of file Owner, such secQons do not make an untrue
s~te. me~ of.a ~:la~ial fact or oink 1o s~atea'fact necessary in order to make th~ s~atements rrmde in such
secQons, in light of .the circumsmnces unde~ which they .were made, no~ misleading.
(5) To the besc of our knowledge, there is no action, suit, proceeding, inquiry or
illvesfigatio~ at law or .in equity, or before or by any c. our~, public board or body pending oi, to the best
of our ]/xlowledge, thrU_ ~d again.st or.affe.~ti~ ~ Ownet, nor, to the best of our knowledge, is there
any b~s/s ~, wherein an unfavorable.deCision,, ruling or finding would, in any way, adversely affect
the-wansactio~ contemplated bythe .Loan'Agr~m~nt or which, in any way, would adversely affect the
dev¢lopme~, construction or operation of'rely of th~ Project or which might result in any mar~rial
r
:adve~se:.change in thc ~s, operations, pr~opertia., assets, liabilities or condition (f~,m.cial or other)
~of the ,Owner or ,which afl. ts/he information conc~min~ the Owner or the Project (insofar as such
~n~orJ~l~on p~l.t;:~inR r~O .t~ :OwIICF el' ~xle Project) contained in the Official Smement.
(6) ~ ~in~ry Oki=~c)al Star~rient was deemed fl~lal by the Owner for purposes of Rule
15c~12 und~ the Secures tbrchange Act of 1934, as amcmcl~l, and such prel~m~uary Official Statement
was delivered tothe Unde~vrkers for the above,-referenced Bonds prior to the purchase thereof by the
purchaser.
(7) TIl~ (i) is a nor!profit corporation duly formed and existing under the laws of thc
,Sram of :~ 'and it is duly authorized to execute and deliver thc .Loan Agreement. the Restrictive
Cov~ants. the 'Note ~ the Mortgage (eaxch as defined in the Loan Agreemen0 and the FHA Loan
Documents, and ,(ii)the ownership-and operation of the Projec~ will not violate its Articles of
Incor~ration or By-Laws.
.
(8) Thc Own~ has duly ax~ated ~ delivered ~ certain Loan Agreen~nt dated as of July
1, 1996 (th~ ".Loan Agreera~nt"), among the .Owner and thc Issuer; and that certain Declaration of
Restrictive ~Cov~u'lts as of July 1, 1996 (the ~Tax Regulatory Agre~meIlt"), amoxlg the Issuer, tha
Owner and Th; Bank of New York, as Trustee; th~ Bond Purchase A~ent; thc Continuing Disclosure
Agxeemer~ ~ as of ~Iuly 1, 1996 b~mm the Owner, the Trustee and the Dissemination Agcn~ n~rned
r. herein (the 'Disclosure Ag~e~II~nt"); ~¢ Note and the l~oIt§age (as defirmd in the Indenture); the
Certificate dared the.dam hereof (the "Tax Certificate"); and thc execution and delivery
o~f the Loan Agreement, the Tax Regulaxory Agreement, ~h¢ Bond Purchase Agr~mem, the Tax
Certificate and the No~¢ and Mortgage and the p~rforrnanc~ by the Owner of its obligations thereunder
.will not COnstitute a breach of or defauk by the Owner under its articles of incorporation or by-laws or
r~ term~ and p~visions Of any agreement or commitmcat to which the Owner is presently a party or by
which L~ Owner is prcselltiy boule1.
~IN WI~ WHEI~OF, th~ undersignecl have signed this certificate as of July __, 1996.
C/HP COVE, INC.
By:
Title:
C-2
.;TUH *26 ~96 :03:38RM SENT BY RITTER EICHHER & HORRIS P.:~5/54
i
OPINION OF CO-COUNSEL TO OWNER
~ITD
1996
-City of Boynton Beach
100 East Boynton Beach Boulevard
.Post Offic~ Box 310
Boynton Beach, ,Florida 33425
The Bank Of New York, .as Truste~
¢/0 The Bank of New York Trust Company of Florida,
10161 Centurion Parkway 2nd Floor
Jacksonville, Plorida 322~6
Wheat, First Secu~ties, ~In¢.
'.Raymond Jon~ & Associates, Inc.
Stifel, Nicolaus & Company, Incorporated
c/o Wheat, First Securities, Inc.
465 South Street, Suite 310
Morristown, Now Jersey 06830
C/I-rP Cove, Inc.
cdo Housing Partnership, Inc.
$19 Clematis Street. Sukc 409
W~t P~]m Beach, Florida 33409
$11,400,000
th~ City of Boynton Beach
Muld-l~amily Housing Mortgage Revenue Bonds
Serie~ 1996
(Clipper Cove Ap~tuients)
Ladies and Gentlemen:
This .finn is special counsel to C/HP Cove, Inc. (the 'Borrower',), in connection with the
isnnncc oftl~ above-referenced bonds (thc 'Bonds")- In acting as such counsel, and in order ro re~icr
this ,opilliOll, we hav~ exar~ined;
(a) Inde~ of Trust and Assignment of Mortgage, dated as of Suly 1, 1996, by and between
theCity of Boynmn Beach, Florida(the ~Issuer') and The Bank of New York, as trustee (the 'Trustee');
~ 2S '96 I~3:~PM SENT BY RITTER £IcHNER & NORRIS P.26/54
,ih) Loan Agreemcnt~ dared ss or luly I, 1996, baween thc borrower and tho City of Boynton
Beach, Florida (th~ 'Issuer");
Promissory Note. dated July _, 1996. exccutecl by the Borrower for the benefit of hhe
id) Mongage and 'Security Agreement, dated as of July 1, 1996, by the Borro ~.w~r in favor
,,of,the Issuer;
i(e) ,DeClaration of Res~i~ive Covenants, dated as of ~Iuly 1, 1996, by r~e BorroWer ami for
~the benefit of the Trustee and the Issuer;.
(f)' ,[Tax Regulatory Agreement] daed July ~, 1996, [among tha Borrower, the Issuer and
~thc Trustee];
(§) A copy of the Articles of Inco~omIion of the Borrower flied with the Florida Department
:of State on September 29, :1995 and all amendments thereto, including specifically the Articles of
~ent to Ai'dcles of incorporation of C/HP Cove, Inc. fflcd with the Department of State on June
__ 1996 all as certified by the Secretory of Stare of the State of Florida on July __, 1996 (collectively,
the .Articles ),
(h) The 'Bylaws of the Borrower together with all amendments thereto as certified by the
s~. Of the Borrower on the,date hereof; ~cl
(i) Certificate of Good Standing of the Borrower, dated July __, 1995, issued by thc
:Secretary of State of the State of Florida with respect to thc Borrower (the 'Certificate").
fi) General and Nonlitigation Certificatc of the Borrower, dated July __, 199'6, auached
hereto as .Exhibit A;
'The documents identified in paragraphs Co) through and including (f) above are hereinafter
collectively referred to as the "Borrower Documents." The documents idexttified lit paragraphs (g)
~thrOU~.~nd including 0) above are hereinafter collectively referred to as the 'certificates."
'We ~lso have ex,mined ~11 other documents and records which we dcen~ed ncce~sary to the
furnish~ of this opinion. In .conducting our examination, we have assumed the gewdrieness of all
signatures, other uhan thc :signatures of ~ames H. Edmondson, on all doc,,raents submitted to us as
~originals, and.the conformity :to originals of all documents submi~ed to us as conformed copies or
~photocopies.
As to questions of fact Cout not legal conclusions) mau;rial to this opinion, we have made no
independent investigation ~,d have relied solely upon thc representations and warranties xv~_cle by the
.Borrower in 'the Borrowcr Documents and the Certificates and upon other facts of which we have
knowledge. The phrase 'to our knowledgc' as used in this opinion means solely (i) the knowledge
derived from the Borrower Documents and the Certificates, and (ii) the actual presem knowledge, as of
the date hereOf of the auomeys .in our firm 'who have devoted substantive attention to the Ir~n~actions
collated :by ~the Borrower' Documents, based on inquiry of James H. F_Amcoclson, President of the
i
JL~N E~G "gG ,~03:~BPM SENT BY RITTER EIO-~R ii MORRIS P.aTx54
Borrower, but not based on any independent review or investigation of court dockets or governmental
records.
In .reaching the opinions set forth below, we have assmed that (i) each of the Borrower
Documents ami addiiional documa,as as cor~mplated by the Borrower Documents, and the performanco
of the obligadom,thereandcr, is within the power of the parties thereto, other than the Borrower, and has
~been du4y .a.acl'zalidly alnhofized by eadl such party, oilier than the Borrower; (ii) each of rile Borrower
'~, ar~.any other doamienli relating to file Bonds, has been duly authorized, executed and
· deliv~:d by each party thereto, exc~pt the Borrower, and is the legal, valid and ,b~rling obligaion of
each ~ fliereio and is enforceable a~almt each such pan7 in accordance with i~ terms; (iii) each
Docume~ by m~y party, other than the Borrower, will not violate or be in conflict with, or require
nonprofit-corpOratiom authorization fo~ities other than those formalities required under the
orgauiz~o~l documen~ of such corporariom.
In '.this regard, we tmdersumd that you are relying on an opinion, dated the date hereof, of the
]Law Off/ce of Frank Brady, P.A., Florida co, m.~el to the Borrower, to the effect that (i) upon
excc~ttion an~ delivery of.dm Borwwer Documenus by the Borrower and the other parties thereto, the
~Bon'ow~ ~ will be-the legal, valid and binding obligation~ of the Borrower enforceable against
':the ~Borrower -in accordance with their respective icrrns, (ii) the Borrower is duly org~ni;,~xl, validly
existing and in good standing ss a nonprofit corporation under thc laws of the State of Florida, (iii)
F~orida hw dc~s not impose on Florida nonprofit corporations authorization formalities other than those
formalkics requited under the orgmizational documents of such corporations and (iv) other matters s~t
forth therein..
Based.alton th~ foregoing, we arc of the opinion that, as of this date:
1. ~ ~~:~.~.~w~r ~.au~ to ~ ~ ~ ~rfo~ its ob~om ~r
~ ~~ ~~, ~ ~e ~wer Doc~ts have ~en ~o~d by ~1 n~s~ action on
~e ~ or ~ Bo~wer. ~ Boaow~ Do~ts have bc~n d~y cx~t~ ~d deli~r~ by ~e
Bo~ow~.
2. To o~ ~wl~ge, ~ ~ution, deliv~ ~ p~o~ by ~e Bo~ower of ~e
Bo~o~r ~, ~ ~e co~~~ of ~e ~fio~ comemplated by ~ Bo~ower
D~~, do ~ ~ ~ ~t ~i~ ~, or core,irate on &e p~ of ~e Borwwer a violation of,
~ of or ;~ ~r (i) ~ Article, (fi) ~Y con~em, ~re~nt or o~or ~t~nt to w~ch
or~ or o&~ l~d r~m~, or ~y jud~ent, order or d~r~ to whi~ &e Bo~ower o~ ~e
-m~ti~y ~ pmj~ o~ by .~e Bo~ower ~d ~o~y ~o~ a ~e Clipper Cove
3. To ~ ~wl~ge, ~ ~ no.ffii~ with, or ~me~, appro~, pe~it, ~ogmfion or
order of, .~y f~ ~, f~ ~Y ~ o~er f~al gove~ age~ ~t ~r~ady ~ or
ob~'~ hr~u~ wi~ r~p~i w ~e Borwwer for ~e v~id au~ion, ~fion ~d
JUN ,86 '~S ~:39PM 'SEHT BY RITTEE EiCHHEE & NOPJBIS P.8]B~54
delivery ..of the Borrower ~ bY the Borrower or .for the performance by the Borrower of its
.ob '!ig~ons-ltu~retmder, v~ exp~'ess no opizion in this paragraph 3 as io any matter governed by federal
or state sccm'itie~ or ~vizo~ law.
4. To our lmowted~, there curr~tly exist no lawsuits, proceedi%~s or investigations (a) with
~ ~o which ~h¢ Borrower has r~eived service of process or o~. ~.z written n.o~ic~ or ..(b)
the l~rOjeci orthe ~al ~ or operallons of lbe Borrower, or the transamuons COlllempiazea oy
the Borrower DOC'~rnents, or which hi any way would adversely affect the validit~ or enforceabiliLT of
the Bo~rowe~ D~Ls, o: whicla would preclude the Bozrowcr's exex:ution, de. livery or performance
of :he Borrower .Docum~.
' The .;foregoing opinions ar~ subject lo the £ollowhlg qualil~cations:
~(a) Wa assume t~¢ ~ a~l conditions of the Borrower Documents have not be~n ameoded,
modified or suppl~ by any other agreement crt understanding of the parties or waiver of any of the
material provisions of the Borrower Documents, although to ouz knowledge no sam amendment,
raodih'calion or supplement has beea made by'the
{b) We express 'no op'mion as .to the.laws of any jtttJsdictions other than (i) the laws of the United
$~a~s of America, .(ii) with respect to the opinion $¢t forth in pamgzaph 1 hereinabove, the laws of
· State of Plorida aod ('fii) g~e~al ~principles of contract law. The opinions expr~sed above concern only
1~ affect-of r~ laws .(¢xchidirig ,~he prin~iples of :o~ilict of laws, if any) of the United States of America
and gimeml.~les of contract law, as applicable, 'as currently in affect. We assume no obligation to
st.~ppl~aer~ lhis opinion if any applicable'taws or.fa~ change thc opiaions expressed above a~,¢r the date
of ~ opinio.a.
:(~) We tenor no opinion as to title to the Proj~-t, the sams of iicns on thc Project or its
revenues,,or m priorities with respect thereto.
(d) We render no opinio~ as to anymalters other than as expr~sly set forth above, and, in
conjtlncIion :herewith, ,,ye specifically express no option as to the issuance of the Bonds o~ the imctest
t_hereon tinder'any federal secuzitie~ laws, in¢ludh!g but not limit~ to, the Semlrities Act of 1933, as
sme. lKlecl, ancl the Trust Indergllre A~ of 1939, as amended, or any state securities or "Blue Slcy~ law.
(e) We r~ier no opinion cozr. arni~ tax ma~r~rs zelating to the Borrower under federal, state
or local.tax laws.
if) We ,express no oph~ion under United Sta~ bankruptcy laws or state insolvency laws
concer~_ in~ ~ ma=ers.
TI~ opinion :is provided solely for :he bemd'~ of the addressees in connection with :he transa~on
described above .and may noi be relied upon by, or furnished to, any other p~son without our prior -
approval.
~e~fully submiued,
D-4
L:\e. Ab'LBOYI~OI~L~b'~IIPA, lu~ ~. l~
~ ~_~ "96 :~03:.~ ~ZTTER :'E-I~R & MORRIS P.29/54
X.Hi [T A
GENERAL '~D NONLITIGATION CERTIFICATE
C/I:IP Cove, Inc. a Florida nonprofit corporation (th~ "Borrower,) hereby cenilies to
for reliance/n conuecQon w/th its opinion letter (the 'Opinion') as follows:
1. ,Thc~ ~ tmcl pedo~c by the Borrower ofthe dbcmncnts lis~cd below
(colleaively, the "Bon~wcr ~") and the'consummation of thc transactiOll~' contcraplated by the
BarroWcr ~Documcnts, ,ilo noi and will no£ corfflict with, ,or constitute on thc pan of the Borrower a
of, breach of,ordef, m~;cmd~ (i) th~ :Articles of Incorporation of the Borrower as filed with the
- " ' "' 'OCt
lmown as file Clipper,Cove Apartments .(the Project ) ~s subj .
::(a) .l~an Agreement, dated as of luly 1, 1996, between the Borrower and the Ci~ of
Boyr_nton Beach, Florida (thc 'Issuer");
Issuer;
'Promissory Note, dated'July _._, -1996, executed by thc Borrower for the benefit of thc
Mortgage and Security Agrccmelu, datcd as of July 1, 1996, by the Borrower in favor
(d) ~DcchraionofRestficflveCovenams, dazed as .of July 1, 1996, by d~¢ Borrower and foz
~he benefit-of, The Bank of New York fl~e 'Trustee") and the Issuer;
~(e) [TaxRe~atory Agreement] dated July __ 1996, [among thc Borrower, fix Issuer and
the Trustee];
2. .,All aciions necessary to be taken by .the Borrower in conuection with the Borrower's
execution and ,dClivet~ of 6ae ;Borwwer Documents have 'been taken, and no additional approval,
al~hori~on, consent or withholdi~ of objection on thc pazt of any other cnQty or any federal or state
govemmcnl~ body is-zeqUircd asa condition to the Bon-owcr's execution and delivery of thc Borwwer
The, re is. no filir~ with, or come~ spproval, :permit, authorization or order of, any court
;or federal body or other federal govemmenial aSeacy no~ already filed or obtained.which is requir~ with
respe~.W the Borrower forfl~ valid auihorization, execration and delivery of thc Borrower Documents
.by the Borrower or for-the performance bythe Borrower of ils obligations thereunder.
-knowlcdge, ~cateoed ~ainst the BorroWer, which, if advcrsely de~rmmeo, coula materially aa ersc~)
affcc~-the Borrowc~.-fl~e Projea o~ r~he financial 'condifiom or operaQons of thc Borrower or the
D~
IZ~,A~O¥~'O1T~EO~aPA. ~uae ~, z~
JUM ~6 "gE, 03:40PM SE~T BY RITTER EICHMER & HORRIS P.38x54
~u-ansactionS co~templat~l by the Borrower Documents, or which in any w~y would adversely aff¢c~ the
validity or :eaforccability of r~e Borrower Docur~nt~, or which would preclude the Borrower's' execution
and delivery of th~ Borrower Docurn~c~. ·
This General and Nonlitig~tion Certificate is rnsd¢ as of the thy of July, 1996.
C/tiP COVE, INC.
By:
Namc: 3ames H, Bdmondson
Title: President
~E6 'gE, 03:481PHSENTBY RITTE~EICHNER& NORRIS P.31/54
July _, 1996
Boyat_ on Bear~ Florida 33425
~Ttm Baak of New York, as Trustee
clo The Bank of New York Trust Company of Florida, N.A.
Second Floor
10161 ~North Centurion Parkway
J~lc, ~ofida 32256
Wheat, First ~.cufi~, Inc.
Raymoad lames & Assodatea, Inc.
Stifei, Nicolans & Company Incorporated
c/o Wheat, ..First Securities, Inc.
Suite 310
465 South Street
Morristown, 'New Je~ 06830
$11,400,000
City of Boynton Beach, Florida
Mulfi-P~miiy Housin~ Mortgage Revenue Bonds
Series 1996
(Clipper Cove Apartments)
Lad/es and Gentlem~:
~ cormecfion ~ r~ delive~ office abov~-referenc~ bonds (&e 'Bonds"), we have acted as
special tax cotmsel w:C/lIP Cove. Inc. a not-for-profit corporation formed under ~ lawSof ~ S~ate
of'Florida (~ "Corporaiion',) ~ respect to the rcfumndng of Clipper Cove Apa~un~. a 384-unit
remal apartment.project loca~d in fl~ City of Boynton Beach, Florida (the 'Project').
In .acting '.as such .counsel and in order to render this opinion, we have exaroined and relied
exclusively-upon tlae fiallo~ing documents:
(a) ~the dem-miration leater, dated April 3, 1996, from the Internal Revenue Service (the
"IP~") to the Coqxa-ati~a (the .'Determination Letter");
(b) the Corporation's 1023 - Application for Recognition of Exemption Under Section
S01(cX3) of the Internal Revenue Code (flae "Application") to .the I~, dated February $, 1996, and
execuIed by the Corporation's Pre, idem;
(c) the Corporation, s articles of inco~or~on, dated September 29, I995 (the 'Articles"),
and certified by the Secretary of State of Florida; and
D-7 I~RAL~o¥~rob~LE~n- ~me ~, i~gs
JUN '~6 "96 [~:41PM SENT ]BY RITTER EICHNER & NORRIS P.38/54
~e ~Corporation's Bylaws, as amended, certified as tru¢ and correc~ by thc Corporation's
The documents identified in (a) tl~ough and including (d) are referred m collectively as the
"Corporation Domuneats."
-In ~ our examinahon, we have assumed, without investigation, the compl¢{eness of ail
Corporation Dommm. nts ,and :that no other instruments exist which would modify the Corporation
-COlffO~ to ~vri~ls of~! docttmellts submitted t0 lls as COpl~. We also asslll~ [hat the l-rojcCt
I~ operated in acc~r~ with the requirements of the Corporation Documems.
,Based solely upon the forgoing, we are of the opinion that, as of this date:
1. Tim Corporation is orgaaizcd as a charitable org~niTation described in Section 501(c)(3)
ofthe Int~ Reveauc Code of 1986 as ,amended (the Code ), ex~mpt from federal income tax. on
under Section .~ll(a) of the Code 'and is not a private foundation under Section 509(a) of the Code.
2. According to the Articles, no pan of the income or principal of the Corporation shall
inure to the benefil of any direcior or officer of the Corporation or any other private individual.
The operation of :the Project by the Corporation in the manner described in the
Application constimms a charitable activity within the meaning of the term ~charity" used in Section
.501(c){3) or thc Code and the regulazions thereunder.
4. Th~ acquisition, ownvzship and operation of th~ Project by the Corporation is substantially
rented te the corporation's per/ormanc~ of its exempt functions ~ncl any moneys r~ceived by the
Corporation from the operation of the Projm in accordance with the Corporation Documents will not
:comritute uraelzted trade or business income within the meaning of the Code and the regulations
flmreunder.
In re~dng thc foregoing opinions, we express no opinion as to laws other than the laws of the
Unir~ States of America. This opinion letter is b~ing dslivered to you pursuant to the provisions of the
documJmIs rel~ above, ,and is ren~ed solely for tl~ benefit of the p~nies to whom it is addressed.
This opinion .shall not be used or relied upon by any other person or entity other than the persons to
whom it is addr~s~ or in any other conneciion, and is not to be quoted in whole or in part 'in any letter
or dom~l~llt.s withou~ the prior written.consent of this firm.
Very truly yours,
By:
D-8
JUN ~6 'g6:8B:41PM SENT BY RITTER EICHNER & NORRIS P. BBz54
July_, 1996
City.of Boynron Beach
100 Bas~ Boynt0n Beach Boulevard
Posi Office Box 1~10
Boynton Bcach, :Florida 3:3425
The B~k of New York, as Trust~
c/o The Bank of New york Trust .Company, N.A-
~1016'1 Cenmcion Parkway 2nd Floor
SacK~onvillc, ,Florida 32256
Whea Ni~st Secur/ges, Inc.
Raymond Jones & Associates, Inc.
Stifel, Nicola~zs & Company, Iuco~oraed
c/o Wheat, Fi~ Securities, Inc.
465 South Streot, Suite ~10
Morri~mwn, flow Jersey 06830
C/HP Cove, inc.
c/o 'Housing Parmership, Inc.
319 Clematis Street, Suite 409
W~t Palm B~aCh, Florida 33409
$11,~00,000
The City of Boyn~on Beach
Multi-Family Housing Mortgage Revenue Bonds
Series 1996
(Clipper Cove Apa,i~uents)
.Ladies and Gentl~nen:
Lam Florida counsel for C/lIP Cove, Inc., a.florida nonprofit corporation (the 'Borrowgr") in
connection with thc issuance of the above-referenced bonds (the 'Bonds"). In acting as such counsel,
and in order to render this opinion, I have e~amine, d:
(a) i..oan Agreement, dated as of lul¥ 1, 1996 (the "Loan Agreement'), between th,
:Borrower.m,t the Cit~ of Boynton Beach, Florida (uhe "Issuer');
(b) Promissory Note, dated July ~, 1996 (the "Note"), executed by the Borrower for the
benefit of thc Issuer;
(c) Mortgage and Securio' Agreemerit, dated as of July I, 1996, by the Bon'ower in favor
-of the Lssuer;
D-9
JUN ~6 '96 03:.4F_.PM SENTBYR~TTER EICHNER & NORRIS P.:B4/54
(d) ~ of Reslxicfivo Covenants, dated as of July 1, 1996, by the Borrower and for
the b~cfit of, Thc Bankof New Yo~k the .("Trustee') and'the Issuer;
(c) {Tax--fy AS!eeme. nt], dated.July ~, I996, [among the Bo=ower, the Issuer and
the'Trustee];
(0 A cop), ofth~ Arfi~ of lnwr~or~on of-~ Borrower ~ed with file Florida
__ specifically ~h¢ Ar~/cles of
of State on ~eptember 29, 199S of State on July
of file State of l:]orida on July ~, 1996;
(g) Th~ Bylaws of file Borrower together with all amendmenis thereto as cen!fied by the
.$¢~r,~ary of fl~e Borrower on lhe date l~reof; and
0~) Ce~cate of Caood Srmlding of file Borrower, dated Suly m, 1995, is.su~cl by thc
Secretary of State of the State of Florida wifil .resp~t w 'the Borrower ,(the 'Certificate").
The documents identifi~xl in paragraphs iL)~through and including (a) above are hereinaRer
collectively .referral to.as thc 'Borrower Do~."
I have also examined all 'other doannen~ and records which we drained necessary to file
furnishing of :this opinion..h conducling my examination, I have assum~ the genuineness of all
signam~ onall documeats submiv.~d to m~ as originals, and tl~ conformky to originals of all documents
s~bmirted w me as conformed copies ot PhoW~opies.
In re_~:ching.the opinions set fonhbelow, Ihave ~ssumed that (i).each of file Borrower Documents
and addition,'d do--ts as conmmplated by fil~ Borrower Documents, and th~ performance of thc
by ~ ~ pa~; 0i) ~.h of the Borrower,Docum~,ts, aha any omer aocum~-nr~ ~=mm~ ,- u~. ,-, ....
has'been.dull/aufilo~, executed and deliv~d by each,party .thereto and is the legal, valid ancl binding
obligation of each pan'y-flmmw, other than the Borrower, ,and is enforceable ag~in.~t each such party,
other glad the Borrows, hi accordance wifil its terlIls; (iii) each natural person executing or approving
fl~ execution of any immmmm, docmner~ or agr~ment related m herein is legally competenI to do so;
andtiv) th~ ~,mcufion, delivery and tm'iormm~ of the Borrower Documents by any parry will not violam
or be in ¢or~lict with, 'or require consenI under ar6, agr¢~aents or other documents or any judgment,
-decrees or other orders ~o which any parlyis a pa_~'y or:to which 'any such party may b¢ subject.
Based upon d~¢ foregoing, I'am of file opinion that, as of this date:
1. Each of the Borrower Documents are :the legal, valid and binding obligations of the
Borrower arad are enforceable in accordance with their terms.
2. Tile Borrower is a rionprofil co.ration duly org~ni~cl and validly existing nnder Florida
hw with tiff[ power w own, operate a~d encumber the Project, incur the obligations represented by the
Borrower Docaments and carry ou~ its obligation~ and duties under the Borrower Documents.
3. The Borrower has foil power and. aufiloriry to conduct irs business and io own property
in tl~ Sine of Flor/da.
D-10 L:W,A~OYN'I'Oi~Lii~I~A..k~ 26.
SUN2~ ~'~ i~3:'42PM ,SENT ~Y ,,RITTER EICH:'ER. & NORRIS P.35/54
· I
rTlle -MOrtgage is in .proper form for recording in thc real estate records and, upon
t, eco~ w~ crone a valid hen on the propW~' descn'bed ~erein.
'Thc obligatio~s of the Borrower under th~ Loan Agre~men~ and the Note are not
Tomy knoWledt~e, there is no filing with, or consent, approval, permiT, autho~on or
Which'is req~ed with respect to the Borrower [or
Borrower of ~e .Borrower Documents or .for ~ p¢ffo~ by the Borrower of its obli~ations
.therelllldcr.
To my knowledge, there are no lawsuks, proceedings or investigations (a) with respect
~to which the Bot'rower has received service of process or other written notice, or (b) to the best of my
knowledge, lhrea~ened asainst r~e Borrower which, if adversely dcter~i-ed, could maerially adversely
~ffec~ ri~ Borrower, the Proje~ or thc financial conditions or operations of the Borrower, or the
uansa~ons cont~nplalcd by the Borrower Doctmtents, or which in any way would adversely affect the
validity or enforceability of the Borrower Documents, o~ which would preclude the BorroweFs execution
and delivery of the Borrower Documents.
The foregoing opinions arc subjec~ ~o ~e followin~ qualifications:
(a) The enforceability of the Borrower Docum~ may be limiled by (i) bankruptcy
insolv~, r~-organizalion, morau~rium, general equitable principles (including the exercise of judicial
discreli~iin.~:cordan~ with such:principles) and other laws rclath~ to or aff~tin~ the rigbis of creditors
or oth~ obligors l~cnerally, and (ii)federal and state securities laws in respeci to certain indemnification
Obligations 'of the Borrower.
(b) The enforceability of thc Borrower Documents may be limited by applicable
:p~inciples of equity includinf~, 'but not ~im.iu:d to, principles tha require good faith, fair dealing and
commercial-reasonableness in the performance and enforcement of agreemen~ on the pan of a par~y
smlcln~ ~er~ w~.such principles are applied by a cour~ of equity or a court of laW, and may
~:be subject to ~hc axercise of judicial discretion which may limi~ certain rem~lies provided in the Bond
(c) I express no .opinion as ~o the validity or enforceability of any indenmity in the
Borrower Docum~ts or any othe~ agreement to the extent the enforceability Of such indemnity with
~ to any. relevan~st~ .or fed~aI securities laws, rules or regulations or any other similar laws, rules
or rcg,_~laio~ may b~ ~ to be a~ainst public policy.
'(il) '.I.~pr~s no op'mion as to the laws of any Jurisdictions other than thc laws of the
Stat~ of Florida. The.Opinions expressed above concern only the effect of the laws (excludin~ the
pr'uxiples of zonflicI of l~ws: if ~y) of ~ Star~ of Florida as aurently in effect. I assume no oblil~ation
~o suppIcrm~ tkis opinion if any.applicable .laws or facts chan~e the opinions expressed abov~, after the
date of ~ds opinion.
(¢) I ~xpress no opinion as to the due authorization, execution or delivery of the
Bon'ower Do~,~eras and mxlcrstand tha~ you are relying on the opinion of with
D-11
~UN '86 'gE~ 8B:43PM SENT BY RITTER EiCH~ER & NORRIS P.~6/54
.i
respccx .to such matters. I assume the terms and conditions of thc Borrower Documen~ have not been
amended, modified or supplemented by any other agreemerlt or understanding of the parties or waiver
of any of thc martial provisions of the Borrower Documents, although to my knowledge no such
amendment, modification or supplement has been made by the BOrrower.
This ,opinion is provided solely for the benefit of r.h¢ addressees hereof and may not be relied
,llpon by any ~ PerSon without my prior approval.
Respectfially submitted,
D-12
L:~R.a.~BOY~PA. ~ ~. 1~96
~L~ 2G '96 83:43PMSEHTBY RITTEREICHNER & NORRIS P.37/54
EI/'IHRIT E
July _, 1996
-OPINION OF COUNSEL TO ISSUER
'City of. Boymon Bea~, Florida
C/HP Cove. Inc.
c/o Corneimone 'Housing Corporatiou
1350 BevewlyRoad, Suite 200
McLean, Vkginia 22102-3634
Moyle, Flanigan, Katz, Fitzgerald
& 5heehan, P.A.
West Palm Beach, Florida
The Bank of New York
c/o TheBank of New York Trust Company
of ~o~ N.A.
10161 ~~ ~y
2~ ~or
.la~on~e, ~o~ 3~6
Wheat, First Securities, Inc.
Raymond lames & Associates, Inc.
Stifel, Nicolaus & Company,
Incorporated
c/o Whe~u, First Securifi~, Inc.
465 South Street, Suite
Morristown, NJ 06830
$x1 oo,ooo
CITY OF ~BOYNTON BEACH, FLORIDA
Multi,Family Housing Mortgage Revenue Bonds, Series 1996
(Clipper Cove Apartmems)
Ihavo acted as counsel to the City.of Boynton Beach, Florida (the 'Issuer") in connection with
the issuance and sale by,thc Issuer of its $11,400,000 principal amount of its Multi-Family Homing
Mong~ge.:Re,~enu¢ Bond~, Series 1996 (Clipper Cove Apartments) (the "Tax Exempt Bonds' or the
"'Bonds'~). The Bonds are being issued for:the purpose of assis0.ug in refinancing ~ its multifamily
~ prOJealc~ala:l in fl~e-Cit~ of:Boyixon BeaZh, Florida, and known as Clipper Cove Apartments (the
"Projectg. All capkalized terms used 'herein and not otherwise defined shall have the moating as set
iorth in the;Loan Agreemem dated as of luIy 1, 1996, by and between the Issuer and the Bon:ower.
Incom2ection ~my opinion I have reviewS, among other things, Article VIII, Section 2 and
Article VII, Section 10(c), of the Florida Constitution, thc Charter of the Issuer, Chapter 166, Florida
statutes (the 'Act'), and .originals or copies, certified or otherwise identified to my satisfaction, of the
following:
A.
C.'
~ resolnfion of the Issuer adopted on
Bond Documcnus, and
Aspec'~ of the Bond.
,1996 (the "Bond Resolution'),
{
P.38/54
I haw also ~.suchor~rdocumem.s, cem'~catss, ~ings sad matters of law ~ I have
~:~ n~ m ~le~ m rend~ ~ op~on.
~ m ~~ ~ ~ ~t~ zo my opi~on, I .~ve reli~ upon ~~om of ~e E~er
~ ~ ~ ~ Do~ ~om of.~b~c offi~s ~~ to~ ~ ~c~om by
rep~e~atiom ~ ~ifi~o~ ~e
s~ on do~s ~d ~e~ ~n~ by
me ~e ~er) ~e genU~e, ~1 ~~ s~~ to me
or vefific~on, ~ due audition,
~i~ ) o~er ~ the
d~m~ ~ss~ or a~rop~te ~ order
to render
Based on ~ foregoing, I aa of the opinion, as of the cla~e hereof, that:
I. The Issuer is a :political subOivision ~,vl a mu~ipality of the S~ate of Florida duly crealed
and validly existing tlllder t~,Act a~l ha~ th~ requisite authority and power to (i) execute and,deliver the
Bond ~, (/0 issue, <sell and delivcr ..the Bonds mxl (ii/) consumma~ the transactions ~ntemplated
by, and perform its obligations under, the 'BOnds and each Bond Document.
2. Th~ Bond Resolution has been dUly adopted by the Issuer and is in full force and effect
as of the date hereof in the form adopted.
3.. Thc Bonds have 'be~n duly .authorized, executed, issued and delivered by,the Issuer,
constitute valid and binding limited obligations of the Issuer and, subject to paragraph ? below, are
enforceable against the Issuer in accordance with their
4. The Bond Documenr~ have been duly authorized, executed and ddivered by the Issuer,
are in ~ force and effect, constitute valid .and legally binding obligations and a~ents of the Issuer
and, subjec~ to paIagraph 7 below,-are enforccabl~ against :the Issuer in acco~ce with their respe~ive
$.: The Issuer's ~ri~t, title and ~intercsl in the Note :and the Loan Agreement (except for
certain rights ~o inderrmificafion, payment of its fees and expenses, receipt of notices and giving of
consents) have been duly and legally assigned by the .Issuer .to The Bank of New York, as Trustee and
have not been ~p~ously ~ by the Issuer, and suCh assignment constitutes a valid and binding
assignment of thc Issuer-and, -subject :to paragraph 7'below, is enforceable against the Issuer iu accordance
with its r~'ms.
6. ~ 'The City Commissioners of the Issuer identified in the Issuer's general certificat~
delivered on the date hereof have been dUly appointed and are qualified to serve as such.
7. The enforceability of the obligations of the Issuer under the Bonds and. the Bond
Documents is subjcci to the provisions of applicable bankrup[cy, insolvency, reorganization, moratorium
or other similar 'laws relating :to or affecting th~ enforcement of creditors' rights generally now or
h~eafter in;:cf'fr~ and subject to usual ~uiv~ principles that may limit the specific enforcement of certain
JU~ ~ ~gG ':8~:44PM SEhFF BY RITTER EICHNER & MORRIS P.8~/54
~maedies but :do.not affect the Validity of stlch documents. Certain indemnity provisions of the Bond
~~may bemmfforceable pursuant to court decisions invalidating such indemnity provisiom on
grounds of ~pticable scourges laws or public policy.
$. No additional or fmther approval, eoment or authorization of any governmental or public
agency or amhofiry not already obtained is required by the Issuer in connection with the transacfiom
ctmtm~lated by the Resolution, thc Bonds or the Bond Documents; provided, I~owever, that I express
no Opiv.4on relating to state or federal, securiti~ 'hws, and no opinion is expressed as to the exclusion of
interest on the .Bonds from gross income for purposes of federal or Florida income taxation.
9. The adoption of the Resolution and the exe~-'ution, delivery and clue Imfformanee by the
lssuerof the Eona~ and the Bond Documents Will nor violate any r~solution of the Issuer or, to the best
of my knowledge, (i) violate any indenn~e or other agreement or instrument to which the Issuer is a party
or by wNeh it or its p~ are or may be bound, 0i) violate any regulation, order or :decree to which
the Issuer is subject or :(iii) result in the-creation or imposition of any lien, charge or other s~curity
,intmm~ or en~m~bmme of any nature whatsoever upon any of the property or assets of the Issuer except
zs comemplated by the Bond Documents.
10. Them is no action, mit, proceeding or investigation at hw or in equity before or by any
court or govwnmental agea~y or body pending or, to the best of my lmowledge, threatened against the
Issuer, nor to my knowledge is there any basis there/or, wherein an unfavorable decision, ruling or
~ would adversely affec~ (i) the creation or existence of the Issuer, (ii) the transactions contemplated
bY the Resolution and the Bond Documents, (iii)'the validity or ~forceability of the Bonds Or the Bond
Documents or (v)any authority or proceed~s relating to the execution and delivery of the Bonds and
~he Bond Documents.
My s~.'vices as cotmsel ~o ,the Issuer have been limited to rendering the foregoing opinion based
:Ul~?n my review of such legal proct~lings :as ! have deemed necessary to make the statements herein
contained and to approve-the validity of the Bonds. I have not examined any documents or other
information.~ming th~ business or financial resources of the Borrower and, therefore, express no
opinion.as to the acemracy or completeness of any information that may have been relied upon by the
owr~,~s'of the Bonds in making their decisions ~o purchase them.
Very truly yours,
IOSIAS, Cd)PEN, CHEROF, DOODY & EZROL, .P.A.
,--~sowro~oxsvX. s~ a~, l~
i
i.
I:
83:Z64F99 SEFf[ BY RITTER EICHHER & HORRIS
P.40/54
Form of Disclosure Cextificate of Underwriter under
~ion 215~7~/5(6), Florida Statutes
EXIT~IT F
The andcrsigmd, a
.follows:
of [Underwriter] (thc 'Underwriter"), hereby certifies as
(1) An i~nized 'Iist of estimar~l expense~ to be incurred by the Underwriter and
and (collectively, the "Underwriting Group') in connection with the
hsuance of.thc Bonds.
See-SahedUle I attached.
(2) The names, addresses, andcsfimated amounts of comlx~afion of any person who enter~xi
fi'to.au umie~ru~ug with either the Civ of Boynton Beach, Eorida (the "Issuer'), the Underwriter, or
both, .for any tm/d-or promised comp~on or vaIuabIe consideration, directly or indirectly, expressly
or/mplied, to .ac~ solely as an imemmdiary between the Issuer and Underwriu~r or who exercises or
~ w exercise any influence to effect any ~ransacfion in the purchase of thc Bonds:
None.
(3) The amount of underwriting spread expected co be realized by the Underwriting Oroup
is as follows (coltwam may not equal wtal~ due to rounding):
Amount
Dollar Amount per
$1.000 Principal
Takc6~wn $ $
Managcracnt Fee $
$ $
(4) Any other fee, bonus, and other compema~on estimated to be paid by thc Underwriter
in connection with'the issuance .of the Bonds to any person not regularly employed or retained by the
U~ter:
None.
(5) TI~ nam~ and address :of the Underwriter is:
lin.sen name and address of Underwrirzr)
1996
JUN ~6 '96
03:45PM SEMT BY RITTER EICH~-R& MORRIS
P.41/54
I understand that you do not require any flirter disclosure from the Underwrimr Pursuan~ m
Section 218~38~(6), l~lorida Statute, as amend,d, i
Very truly yours,
By:
Tide:
8 io OM/i2
EXHIBIT "E"
PRELIMINARY OFFICIAL STATEMENT
Mark Raymond,. Esq. .: Moyle, .Lanigan, .Katz, Fitzg(From: SusanFvan~..~ 215-972-8302
6/26t96~ 12:48:48 Page 2 of 49
~/hisPreliminary Official Statement and certain of the information contained heroin is in a form deemed final for purposes of Rule 15c2-12 u~
Act of 1934..as amended (except for the Omission of certain information pertained to be omitted under Rule 15c2-12(b)(1 )), The information
completion or amendment in a final Official Statement, The Series 1996 Bonds mav not be sold, nor may an offer to buy be accepted l
Statement is delivered in final form. Under no circumstances shall this Preliminary Official Sta~emen~ constitute an offer to sell or a solicitatio
t~re be any sale of these securities in any jurisdiction in which such offer, solicitation ot sale would be unlawful p[ior to registration or qua
~laws of a~¥ such jurisdiction.
I
To: Mark Raymond, Esq. Moyte, LanJgan, Katz, Fitzg(From: Susan Evans 215-972-8302
PRELIMINARY OFFICIAL STATEMENT DATED _JULY
6/26/96
.i
1996
12:49:10 Page3of49
NEW ISSUE Rating: S&P: "_A" ]
In the opinion of Bond Court, el, assuming continuing compliance with certain covenants described herein designed to meet the
requirements of the Internal Revenue Code of ~986, as amended, and the regulations thereunder, interest on the Series 1996 Bonds is
.excluded .from gross income for ff_dfral income tax purPoses t~on the conditions and subject to the limitations stated in ~Tax
Treatment of the .~ries 1996 Bonds herein. Such interest is not an item of tax preference for purposes of the fede~l alternative
minimum tax imposed on individuals and corporations, but can be included ~n the calcutatwn of certain corporatwns alternattve
tm'nimurn tax and a holder can be sUbject to other federal tax consequences as described in ~Tax Treatment of the Series 1996 Bonds.
In the opinion of.Bond Counsel, interest on the Series ~996 Bonds is exempt from all intangible personal property taxes presently
imposed by the State of Florida.
Date~: July 1, 1996
$11,__5_00,000' ~
CITY OF BOYNTON BEACH, FLORIDA :~
Mulfi-Fannily Hotr~in~ Mortgage Revenue Bonds, Series 1996
(Clipper Cove Apartments)
Due: January 1 and JUly 1 as shown on the inside cover
The City of Boynton Beach, Florida (the 'Issuer'), is issuing $11,500,00~_* aggregate principal amount of its Multi-Family
,Hotming Mortgage Revenue Bonds, Series 1996 (Clipper Cove Apartments) (the "Series 1996 Bonds").
The Series 1996 Bonds will be issued in full registered form, registered in the name of Cede & Co., as nominee for The
'Depository Trust Company, New York, New York ('DTC'), which will act as securities depository for the Series 1996 Bonds.
Individual purchases of beneficial ownership interests in the Series 1996 Bonds will be made in book-entry form only and individual
.... purchasers will not ~reeeive physical delivery of Series 1996 Bond certificates. Individual purchases will be in principal amounts of
$5,000 or integral multiples:thereof. Tbe.Series 1996 Bonds will bear interest from their dated date, payable s6miannually on each
January 1 and July !, commencing on January 1, 1997. Payment of principal of and premium, if any, and interest'on the Series 1996
Bonds will be made by The Bank of New York, New York, New York, as trustee, acting by and through its agent, The Bank of New
York Trust Company of Florida, N.A., Jacksonville, Florida, directly to Cede & Co., as nominee for DTC, for d~sbursement to DTC
participants, tobe disbursed subsequently to Beneficial Owners of the Series 1996 Bonds.
The Series 1996 Bonds ~ be subject to redemption before maturity as described herein. See 'THE SERIES 1996 BONDS --
:Redemption of the Series 1996 Bonds.~
~ou.~mg tt~V~lOpltt~at tU~ rro~ct ~, auct.payaow ~,CXC~pL to m~ ~xwat payam~ out ot o~i'w~ ~r¢o Dona procccu~] ~uw~y out ui iuntm
to be provided by C/HP Cove, Inc., a Florida nonstoek not-for-profit corporation (the 'Owner') whose sole asse~: is the l>cojeet and
,whose activities consist solely of owning.ami operating the Project.
NEITHER THE SERIES 1996 BONDS NOR THE INTEREST THEREON SHALL BE DEEMED TO CONSTITUTE A DEBT
OF,PALM-BEACH COUNTY OR OF THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION THEREOF OTHER
THAN THE ISSUER. THE SERIES t996 BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER AND TI-IE ISSUER SHALL
NOT BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, ON, OR INTEREST ON THE SERIES 1996 BONDS
OR OTHER COSTS INCIDENT THERETO EXCEPT FROM THE REVENUES AND RECEIPTS PLEDGED AND ASSIGNED
THEREFOR, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE ISSUER IS PLEDGED TO THE
PAYMENT OF THE PRINCIPAL OF, PREMIUM, 'IF ANY, OR INTEREST ON THE SERIES 1996 BONDS OR OTHER COSTS
INCIDENT THERETO. .
There are risks associated with the purchase of the Series 1996 Bonds. For a discussion of certain 6f these risks, see
-~"BONDHOLDERS' RISKS" herein.
This cover page contains certain information for quick reference only. It is not a summary of the issue. InVestors must read
~the eatire Off'~eial Statement to obtain information essential to the ,making of an informed investment decision.
The Series 1996 Bonds are offered when, as and if issued by the Issuer and received by the Underwriters, subject to the
approval of their validity by Moyle, Flanigan, Kart, FitzGerald & Sheehan~ P.A., West Palm Beach, Florida, Bond Counsel. Legal
matters will be passed upon for the Issuer by Josias. Goren. Chef_of. Doody & Ezrol. P.A.. Ft. Lauderdale, Florida; for the Owner
by Baber & KalJnowski, P.C., Fairfax, Virginia and the Law Office of Frank Brady, P.A., Boca Raton, F~orida; and for the
Underwriters by their co-counsel Ritter Eiehner & Norris, Washing;on, D.C. and Mikel D. Jones, Assoehtes, Philadelp~
'To:,Mark Raymond, Esq., Moyle, Lanigan, Katz. Fitzg~From: Susan Evans 215-972-8302 6/26/96 12:50:10 Page 4 of 49
Pennsylvania. It ~s expected that Series 1996 ,Bonds in book~enwy only form will be available for delivery to DTC in New York,
New York, on or.about ~ly __, 1996.
WHEAT FIRST BUTCHER :SINGER
~RAYMOND JAMES & .ASSOCIATES, INC. STIFEL, NICOLAUS & COMPANY, INCORPORATED
~Iuly . 1996.
Preliminary. subject'to change.
-2- I
To: ~k Raymond,:-Esq./Moyle,. Lanigan, Katz, ~Fitzg~'From: Su-san EEv--ans 2~l~5-972-8302 6/26196 12:50:36 Page 5 of 49
[~NSB)E COVER]
~MATURYrlEs, AMOUNTS AND INTEREST RATES SCHEDULE
$3,1~5,000' Serial Bonds
~laturiW ,Amount* Interest Rate Maturity
January'l. 1997
July t. 1997
'January 1, 1998
-July 1. 1998
Januaxy 1, 1999
July t, 1999
January 1.2000
:,July 1. 2000
Sarmary 1, 2001
July 1, 2001
3anuary 1, 2002
Suly 1. 2002
January 1. 2003
July 1, 2003
Amount* Interest Rate
$ 60,000 % January 1, 2004 $100,000
70,000 Iuly 1, 2004 100,000
7~000 January 1, 2005 105,000
75,000 July 1, 2005 105,000
75,000 January 1, 2006 110,000
8~.000 July I, 2006 115,000
~80.000 Jgnuary t, 2007 115,000
:80.000 July 1, 2007 120,000
~85.000 January 1, 2008 125,000
85.000 July 1, 2008 1)_Q, O00
9_Q. O00 January 1; 2009 130,000
90,000 July 1, 2009 135,000
9~000 January 1, 2010 140,000
95,000 July 1, 2010 145,000
Sanua~ 1. 2011 15~
July 1,2011 155,000
,$1,850,000 * %Tenn Bonds Due July 1, 2016
$2,5.!~0,000 * % Term Bonds Due July 1, 2021
$3,92~000' % T~um Bonds Due January 1, 2027
Price of all Series 1996 Bbnds: % (plus accrued interest)
*Preliminary, subject'to change.
-2- I
'To: Mark Raymond, Esq..~'Moyte, Lanigan,-~Katz, 'FiizgeFrom: Susan Evans 215:972-8302
6/26/9~?~ 12:51 :-06
Page 6 of 49
NO PERSON HAS :BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
~ ~>~EPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS OFFICIAL STATEMENT AND IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED. ~ OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFER TO
SELL OR Tile SOLICITATION .,OF AN OFFER TO BUY A~Y SECURrrlES OTHER THAN THE
SECURITIES TO WHICH IT RELATES OR AN OFEER TO SELL OR THE SOLICITATION OFiAN OFFER TO
BUY SUCH SECURIT~$ IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. i THE INFORMATION SET :FORTH HEREIN HLiS BEEN OBTAINED FROM THE ISSUER,
THE OWNER AND OTHER SOURCES THAT ARE DEEMED TO BE RELIABLE, !- BUT IS NOT
GUARANTEED AS TO ACCURACY OR COMPLETENESS BY, AND IS NOT TO BE COlqSTRUED AS A
REPRESENTATION OF, -THE UNDERWRITERS. THE INFORMATION HEREIN IS SUBJECT TO CHANGE
WITHOUT NOTICE, AND NEITHER THE DELIVERY OF THIS ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE ISSUER OR ~ OWNER SINCE THE DATE
:HEREOF ~OR THAT THE INFORMATION CONTAINED
SUBSEQUENT TO TI-IE DATE OF SUCH INFORMATION. THE
THE O~rNER HAS MADE ONLY THOSE COVENANTS
DISCLOSURE AS ARE DESCRIBED HEREIN UNDER THE CAPTION
CERTAIN OF TIlE ,INFORMATION HEREIN OTHER THAN
CAPTIONS "THE ISSUER" AND "LITIGATION" IS BEYOND TIlE
THE ISSUER HAS NO REASON TO BELIEVE TItAT SUCH
INACCURATE, THE, ~SUER HAS NOT INDEPENDENTLY
.... ACCURACY OR COMPLETENESS II-IEREOF.
AT ANY TIME
IS DATED AND
SECONDARY MARKET
INFORMATION UNDER THE
'IS INChDMPLETE OR
OR CONFIRMED THE
THE SERIES 1996 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 NOR HAS THE INDENTURE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, IN
RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR
QUALIFICATION OF THE SERIES 1996 BONDS UNDER THE SECURITIES LAWS OF THE
JURISDICTIONS IN WHIG THEY HAVE BEEN REGISTERED OR QUALIFIED, IF ANY, SHALL NOT BE
REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE JURISDICTIONS NOR ANY OF
THEIR AGENCIES HAVE PASSED LrpoN THE MERITS OF THE SERIES 1996 BONDS OR THE
.ACCURACY OR COMPLETENESS OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE
CONTRARY MAY BE A CRIMINAL OFFENSE.
i
'To: Mark Raymo~, EsqJ~Moyte, LanJgan, Katz, FitzgeFrom: Susan Evans 215-972-8302 6/26/96; 12:51:58
TABLE-OF CONTENTS
Page 7 of 49
Page
~ storms ~:L~ BONDS ............................................................................................................. !; ............... 2
SE~ F6R THE SER/ES 1996 BONDS .................................................................................. : ............... 9
SOURCES AND USES OF Y~3NDS ................................................................................................................ 1~
TI~ ISSUER. .............................................................................................................................................. 13
THE o~ArNER ~AND THE PROJECT .............................................................................................................. 1,4
13ONDHOLD~I;*.S' RISKS .............................................................................................................................. 15
LOAN AGRF. F. MENT ............................................................................................................................ 25
THE NOTE AND THE MORTGAGE ............................................................................................................. 2tl
RESTR/CTIV~ COVENANTS .............................................................................................................. 2~
NO LITIGATION ........................................................................................................................................... 3~
TAX TREATMENT 'OF THE S~S .1996 BONDS ..................................................................................... ~
!I:~OSSIRT ;F CHANGE IN TAX STATUS ........................................................................................................ 33
APPROVAL OF I.FGAL MATTERS ............................................................................................................ 33
CO~G DISCLOSUR.E ........................................................................................................ ~. .............. 33_
~I~2ING ~...~ ............................................................................................................................................... 32
!UNDERWRII1NG ....................................................................................................................................... 31
NIISC'ELLANEOUS ..................................................................................................................................... 31
~ _ APPENDIX c !-
~*~PENDIX D i
- Description oftheprOject
- Pro FmmaFinancial Projections
- Summary oflahe Indenture, Loan Agreement, Mortgage and Restrictive Covenants
- Form ofOpirdon of Bomt Counsel
OFFICIAL STATEMENT
To: Mark-Raymond, Esq. :, .Moyle, Lanigan, Katz, Fitzg(From:'Susan Evans 215-972-8302
6/26/9~!! 12:52:~2
Page 8 of 49
$11~o0,000~
CITY OF BOYNTON BEACH
Multi.Family Housing Mortgage Revenue Bonds, Series 1996
:~(Clipper Cove Apartments)
-INTRODUCTION
This Official Statement, including the cover page and appendices, sets forth cert~iin information
relating to the issuance and sale 'by the City of Boynton Beach, Florida (the "Issuer"), a political
subdivision of ~l~he State of.Florida, of $tl,500,000' aggregate principal amoum of its Multi-Family
HoUSing Mortgage Revenue Bonds, Series '1996 (Clipper Cove Apartments) (the "Series 1996 Bonds').
~The Series 1996 .Bonds are ~being issued pursuant to Article vm, Section 2 and Article VII, Section
10(c) of the Florida Constitution and.Chapter 166, .Florida Statutes (the "Act') and in accordance with
a resolmion No. 96- of the City Commission of the IsSuer (the "Resolution") aLtthorizing said
issnanee. The Series 1996 Bonds will be issued under, and equally and ratably secured by, an
Indenture of Trust and Assignment of Mortgage dated as of Julyl, 1996 (the "Indenture~), between the
issuer thereof and 'The Bank of New York, New York, New York, as trustee, acting by and through its
agent, The Ba~ of New York Trust Company of Florida, N.A., Jacksonville, Florida (the "Trustee").
The Series 1996 Bonds will be issued ~to provide funds with which the Issuer will haake a loan to
C/HP Cove, Inc., a Florida nonstock not-for-prOfit-corporation (the "Owner') purstmnt to a Loan
Agreement dated as of July 1, 1996 (the "Loan Agreement"), between the Issuer and th6 Owner. Such
.... funds, tog~her with other available funds, will be used: (i) to refinance and make minor repairs to a
multi,family housing development.~(the "Project") located in the City of Boynton Beach, Florida; (ii) to'
:leposit funds .in_to an Expense_Frond, a Debt Service Reserve Fund, an Operating Reserve Fund and a
Maintenance Reserve Fund securing the Series 1996 Bonds; and (iii) to pay certain costs of issuing the
Series 1996 Bonds. See "SOURCES ~ USES OF FUNDS" herein.
The Owner's .obligations m repay.the loan of the Series 1996 Bond proceeds will b;~ evidenced by
its nonrecourse promissory note payable to lhe Issuer (the "Note'), secured by a mortgage on and
security interest in the Project (the "Mortgage"). Thirty percent (30%) of the units in the_Project will
be dedicated for occupancy by individuals and families whose income is 80 % or less Of area median
.gross ,income and twenty percent (20%) of the units will be dedicated for occupancy by ~adividuals and
families whose income is50% or less of.the area median income. The use restrictions t~e COntained in
two agreeme~ts which encumber the Project. Certain of.the restrictions are imposed f6r purposes of
.complYing with .the Internal~ Revenue Code of 1986, as amended (the "Code") and are ..c9., ntained in the
Declarations of Restrictive Covenants (the "Restrictive Covenants") to be executed, .!delivered and
recorded at the time of issuance of lhe series 1996 Bonds (see "RF_~TRICTIVE COVENANTS"
herein) and additional restrictions are imposed pursuant to a Land Use Restriction ~greement (the
~LURA") between the Owner and the Resolution Trust Corporation ("RTC"), the entity from which
-~the Project was acquired (see Appendix A "DESCRIPTION OF TH~ PROJECT - Acquisition of the
Project; RTC Use Restrictions").
Prelimina~, s ibjeet to Change.
-2- I
To:'Mark Raymond, Esq. iMoyle, Lanigan, Katz, EitzgeFrom: Susan Evans 215-972-8302
6/26/96~:; 1-2:53:-26
;
Page 9 of 49
NEITHER THE SERIFS 1996 BONDS NOR THE INTEREST THEREON SHALL BE DEEMED
TO CONSTrIIJTE A DEBT OF PALM BEACH COUNTY OR OF THE STATE OF FLORIDA OR
ANY POLITICAL SUBDIVISION THEREOF OTHER THAN THE ISSUER. THE SERIFS 1996
BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER AND THE ISSUER SHALL NOT BE
OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY,. ON, OR INTEREST ON THE
SERIFS 1996 BONDS OR OTHER COSTS INCIDENT THERETO EXCEPT FROM THE
REVENUES.?AND RF_~EIPTS PLEDGED .AND ASSIGNED THEREFOR, AND NEITHER ~
FAITH AND-: CREDIT NOR ~ TAXING POWER OF THE ISSUER IS PLEDGED TO THE
PAYMENT 0F THE PRINCIPAL OF, P,~RE~ IF ANy, ON OR INTEREST ON,?, THE SERIES
1996 BONDS OR O~ COSTS INCIDENT THERETO. [~
DesCriptions of the Series 1996 Bonds and the security therefor, and summaries (~f certain other
documents are set forth below and in the Appendices hereto. Copies of documents and reports referred
to herein are on file ,with the Trustee and Bondholders may obtain copies thereof upon payment to the
Trustee of the required fee. Terms used in such descriptions and summaries which arc not otherwise
defined in:this Official :Statement shall have the meanings set forth in the applicable documents.
An investment in the Series 1996 Bonds involves certain risks. See "BONDHOLDERS' RISKS".
,. THE SERIES 1996 BONDS ~
General Desci'iption ~
The Series rt996 Bonds will be dated as of Ju_ly 1, 1996, will bear interest from such date payable
on January l, 1997 and semi-annuaIly thereafter on each July I and January 1, at the rates, calculated
on the basis of a 360-day year of twelve 30-day months and will mature, subject to prior redemption,
on the dates and in the amounts set forth on the inside cover page of this Official Statement. The Series
1996 Bonds will be issued in fully registered form in authorized denominations of integral multiples of
$5,000.
Book-Entry System
Unl~s tl~e :boOk-entry system described herein is terminated, as hereinafter described, The
Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the
,Series 1996 Bonds. The Series 1996 Bonds will be issued as fully registered securities rbgistered in the
name of Cede .& Co. (DTC's parmership nominee). One fully registered Series 1996 Bond certificate
will be issued, for.each maturity, and will 'be deposited with DTC. ?
The following description of DTC and DTC's book-entry system , is based 0n information
furnished by DTC,.and no .representation is made herein by the Issuer as the accuracy c.~r completeness
of such information.
DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking
organizafion'i within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a '~clgaring corporation" within the meaning of the New York Uniform Commercial. Code, and
To: Mark Raymond Esq.-:Moyle, Lanigan, K,~tz, Fit;zg~From: 'Susan Evans 2t5-972=8302
6/26)96 ~i 12:54:2-~-' Page 10 of 49
a "clearing a~ency" registexed ~rsuant m .the provisions of Section 17A of the Securities Exchange
-,Act of 1934. DTC holds securities that its participants (the "Direct Participants") deposit with DTC.
DTC also facilitates thc selxlcment through electronic computerized book-entry changes in Participants'
accounts, thereby e~ting .the need for Physical movement of securities certificates. Direct
Participants include securities ,brokers and .dealers, banks, .trust companies, clearing corporations, and
certain other ;iorganizations. DTC ;is owned by a number of its Direct Participants and by the New
,York Stock Exchange, Inc., .the American Stock Exchange, Inc., and thc National ~Association of
Securities Dealers, Inc. Access to the DTC system is also available to others such as se~arides brokers
and .dealers, banks, and trust-companies'that clear through or maintain a custodial rela.~onship with a
Direct ParticiPant, either direc~ly or indirectly (the "Indirect Participants" and, together ewith the Direct
Participants, the "Participants"). The rules applicable to DTC and its PartiCipants arc on file with the
Securities and Exchange CommisSion.
Purchases of Series 1996 .Bonds under thc DTC system must be made by or through Direct
~Participants, which will receive a credit for the Series 1996 Bonds on DTC's records. The ownership
interest of each acxual purchaser of.each :Bond (each a "Beneficial Owner") is in turn to be recorded on
the Direct and Indirect PartiCipants' records. Beneficial Owner will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their holdings, from the Direct or
Indirect Participants through which the Beneficial Owner entered into the transaction.: Transfers of
ownership 'interests in the Series .1996 Bonds are to be accomplished by entries made qn the books of
Participants acting on behalf of :Beneficial Owners. Beneficial Owners will not rec~ve certificates
representing iheir ownership interests in Series 1996 .Bonds, except in the event that use, of the book-
entry system for the Series 1996 Bonds is.discontinued.
To facilitate subsequent transfers, all Series 1996 Bonds deposited by Participants with DTC are
registered in the .name of DTC's partnership nominee, Cede & Co. The deposit of Series 1996 Bonds
with DTC and their registxation in the name o.f Cede & Co. effect no change in beneficial ownership.
DTC has no knowledge of the actual Beneficial Owners of the Series 1996 Bonds; DTC's records
xeflect only the identity of the Direct Participants to whose accounts such Series 1996 Bonds are
credited, which may or may not ~be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participams, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial
Owner will be governed by .arrangements among them, subject to any statutory ~- or regulatory
requirements,as may 'be in effect ~om time retiree.
Redemption notices .shall be sent to Cede & Co. If less ,than all of the Series 1996 Bonds within a
maturity are .being redeemed, DTC's practice is to-determine by lot the amount of interest of each
......... :Direct Participant in such maturity to be redeemed.
Neither DTC nor Cede & :Co. will consent or vote with respect to Series 1996 Bonds. Under its
~ usual procedt~res, DTC mails an Omnibus Proxy tothe Issuer of the Series 1996 Bonds with respect to
..... which a consent or vote is sought as soon as possible after 'the record date. The Omnibus Proxy assigns
To: MarkRaymo~d,.Esq.'!Moyle, Lanigan, Katz, Fitzg(From: Susan Evans 215-972-8302 6/26/96 12:55:22 Page 11 of 49
Cede &',Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 1996
Bonda are cr .edited on the.record date (identified in a listing attached to the Omnibus Pro~y).
Principal of and premium, if any, and interest payments on the Series 1996 Bonds ~ill be made to
DTC. DTC'~Practice is to credit Direct Participants' accounts on the payable date in a...~cordance with
~ r~*~pe~ave holdings shown on DTC s records unless DTC has reason to beheve ~hat it will not
recerve payment on the payable date. Payments by Participants to Beneficial Owners will be governed
~by s .mmti.ng instructions and customary practices, as is the case with securities held for hhe accounts of
:customers in bearer form or registered in "street name," and Will be the responsibility of such
Part'~nt an~t not of DTC, the Trustee, the Owner or the Issuer, subject to any statutory or regulatory
requirements :as may be in effect from time to time. Payment of principal, premium, if any, and
interest to DTC :is the responsibility of the Issuer or the Trustee, disbursement of such payments to
Direct ~Participants shall be the responsibility of DTC, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and Indirect Participants.
DTCcan disconfinueproviding .its services as securities depository with respect to the Series 1996
Bonds at .any time by giving reasonable notice to the Issuer or the Trustee. Under such~circumstances,
in.the event that a successor securities depository is not obtained, Bond certificates ~ '
are,~xeqmred to be
prepared, executed and delivered.
The Issuer, at the direction of the Owner, can decide to discontinue use of the system of book-entry
Iransfcrs through DTC (Or a successor securities depository). In that event, Bond certificates will be
..... prepared, executed and delivered.
The .: foregoing .~information in this section concerning DTC and DTC's book-entry system has been
obtainexl from DTC and neither the Issuer nor the Owner take any responsibility for the accuracy
thereof.
~Neither Ihe Issuer, the'Owner nor the Trustee have any responsibility or obligation to the Direct
':Participants, the Indirect ~Participants or the Beneficial Owner with respect to (a) the a.gcuracy of any
:re. cords maintained by the DTC or any Direct Participant or Indirect Participant; (b) [.he payment by
any Direct Participant or Indirect Participant of any amount due to any Beneficial Owner in respect of
the principal of and premium, .if any, and interest on the Series 1996 Bonds; (c) [he delivery or
.fimefiness of delivery by any Direct Participant or Indirect Participant of any notice to,,an3, Beneficial
Owner whichis required or permitted under the terms of the Indenture to be given to Bondholders; or
~(d) :any other action taken by DTC, or its nominee, Cede & Co., as Bondholder, including the
-effoctix~eness of any-action pursuant to an Omnibus Proxy.
So long as Cede & Co..is the registered owner of the Series 1996 Bonds, as nominee of DTC,
:references in this Official Statement to the Owner of the Series 1996 Bonds shall mean Cede & Co. and
shall not mean the Beneficial Owner and the Trustee will treat Cede & Co. as the only holder of the
...... Series 1996 Bonds for all purposes under the Indenture.
'i
';To: Mark-Raymond, Esq. Moy~e, Lanigan, Katz, Fitzg(From: Susan Evans 215-972~8302
6/26t96
12: 56:16
Page 12 of 49
:Redemption of Serles 1996 Bonds
Thc Series 1996 .Bonds will be subject-to redemption prior to maturity as follows:
Ol:~ional'~ll~ption ,Upon.Determlnation of Taxability. The Series 1996 Bonds are subject to
re. demptioa the Issuer at the optiOn and direction of the Owner in whole but n~t in part at a
principal amount thereof plus accrued interest to the r~r~empfion date
at ~ny time within 365 :days after the occurren~ of a Determination of Taxability.
Mandatory Casualty Redemption. If, after damage to or destruction of any or ali of the Project
;by fire or other casualty, condemnation thereof or loss thereof because of failure of title, equal to at
~least $1,000,000 .('Material Damage'), the Owner shall elect not to repair or restore the Project to
substantially the 'same condition as prior to such Material Damage, the Series 1996 Bonds are required
to be redeemed in whole or in part at the earliest practicable date at a redemption price of 100% of the
principal mount thereof Plus accrued interest to the redemption date; provided that no such partial
redemption shall be permitted untess such .partial redemption will not affect the outstanding rating of the
(Series 1996 Bonds.
'
Optional Redemption. The Series t996 Bonds maturing aRer January 1, 2006~are subject to
redemption by the Issuer at the option and direction of the Owner, on or aRer January 1~2006 in whole
at any time o~.in part on any Interest Payment Date, at the following redemption prices (expressed as a
percentageof the prir~ipal amount to be redeemed) plus accrued interest to the redemption date:
Redemption Period
January 1, 2006 through December 31, 2006
January 1, 2007 through December 31, 2007
January 1, 2008 and thereafter
Redemption Price
102%
101%
100%
Mandatory S'mking Fund Redemption of Series 1996 Bonds. The Series 1996 Bonds maturing
'July 1, 2016.,i~ July 1, 2021 and January 1, 2027 are required to be redeemed by the Issuer through
operation of the sinking fund provided for in the Indenture on each Interest Payment D~ate as set forth
below in the principal amounts respectively set forth below at a redemption price of 100% of the
;principal amoUnt of the Series 1996 Bonds to be redeemed plus accrued interest to the redemption date:
Series 1996 Bonds ;
Maturing ;luiv 1, 2016
D~.te Amount Date
Smxaaxy 1.2012 $ January 1, 2014
July ~1.2012 July 1, 2014
SamaO' 1. 2013 January 1, 2015
Ju~y 1.20t3 July 1, 2015
January 1, 2016'
Alt3ount
-fi-
Mark Raymond,-Esqf,~Moyie, Lanigan, Katz, Fitzg(From: Susan Evans 215-972-8302
Mnturin~ July 1. 2021
.~ J~uary !~ 2020
January_ A~18 July 1.2_0_2_.0_.
Da~
JanuaO, 1, 2022
July '1, 2022
Janua _ry.t._ 2023
January_ 1. 2024
6/26/96 12:57:02
Series 1996 Bonds
Maturing January 1, 2027 '~
Amount Date AmOunt
$ July 1, 2024 $
January l, 2025
July 1, 2025
January 1, 2026
July 1, 2026
January 1, 2027'
Page 13 of 49
· · The weighted average maturity, taking into account scheduled redemptions, of the Term Bond
maturing July 1, 2016 is. years, oftheTerm Bond maturing July 1. 2021 is ._..~ears, dasd of the Term
Bond maturing January 1, 2027.is years.
'Purchase.in-Lieu of Mandatory Shddng Fund Redemption or Maturity of Bonds. On or before
:lhe sixtieth day next,preceding any 'sinking fund redemption date as described above under the subcapfion
"Mandatory Sinking Fund Redemption of Bonds," or maturity date of the Issuer, or the Owner on behalf
of the 'Issuer, may:
(I) cause to be paid to the Trustee for deposit in the Bond Fund, as an advance payment under the
Note, :such amount-as the Owner may .determine, accompanied by a certificate directing the Trustee to
>apply such amount on or before such sixtieth day to the purchase of Series 1996 Bonds .and the Trustee
shall lhereupon use ail .reasonable efforts to expend such funds as nearly as may be pr~acticable in the
:purchase of such Series 1996 Bonds at a price not exceeding the principal amount th....ereof plus the
..~applicable prdraium for optional redemption of Series 1996 Bonds plus accrued interest-to such sinking
'~Jnd redemption date or maturity date; or
(2) deliver to the Trustee for cancellation Series 1996 Bonds of the Issuer in any aggregate
:?rindpal amolmt desired; and receive a credit against its sinking fund redemption obligation or maturity
~-'~date obligation for any such Series 1996 Bonds of the same maturity which prior to suchdate have been
~'3:o::Mark Rayrno~d,"Esq. M~e, Laa~gan,-~,atz, FitZg~r(~m:~$u~a~n ~¥~'i~9~2-~3~2-- 6/26/96 12:57:4~ Page 14 of 49
redeemed ~(otherwise than tbaough the 9peration of the s~g 'fund) and canceled by the Trustee and not
~h~etofore applied as aeredit against such sinking fund redemption obligation or maturity date obligation.
Each such Bo~so ~pttt~ detiveredor previously redeemed shall be credited b~i the Trustee at
~00% of lhe prin~ipalamotmt thereof against the obligation of the Issuer on such sinking f-and redemption
date or maturiW date ~tla a corresponding credit on amounts otherwise due on the applica~ble Note. Any
excess .over stwla obligation ~shall be credited against future sinking fund redemption ~obligations or
maturity.date ~obliga~ons pro'ratain chronological order, and the principal amount of such Series 1996
t?~nds to be red~emed by operation of the Sinking fund or to be paid upon maturity shall be accordingly
reduced. Any funds received by.the Trustee pursuant to (1)but not expended as provided therein for the
purchase of Seri~s 1996 Bonds.on or before said .siXtieth day shall be retained in the Bond Fund and shall
!thereafter ~be Used only £or thepurehase of such Series 1996 Bonds or as a credit against future sinking
fund obligations or ma ~tmdly date obligations of the Series 1996 Bonds on a pro rata amount of each
maturity out~eling to ~,extent otherwise payable out of payments thereafter becomin~ due under the
Note:
Manner,and Not/ce,of Redemption. If less than all,of the Series 1996 Bonds are to be redeemed, the
particular Series 1996 Bonds or portions thereof to ,be called for redemption shall be ~elected by the
Trustee from ~aeh malaxfity on a pro-rata basis based upon tie outstanding principal of the.iserial and term
Series 1996 Bonds. tn any event, (a) the portion of any Bond to be redeemed shall be in the principal
amount of $5,000 or an integral multiple thereof~ and (b) in selecting Series 1996 Bonds for redemption,
each Bond shall be considered as representing thatnumber of Series 1996 Bonds which is obtained by
dividing the principal amountof such ::Bond by $5,000. 'If a portion of a Bond shall be called for
~ ~ :~'~'~redemption, a new:Bona :.in principal amotmt equal tothe unredeemed portion thereof shall be issued to the
Bondholder ur~n the sm'render lihereo£
The Trustee will apply anyprcpayments on the Note to'the redemption of the Series 1996 Bonds on
:the earliest pi;acticabl¢ rate for-which :'timely notice can be given after the Trustee's ~eceipt of such
prepayment.
If any of.~e Series 1996 Bonds or portions thereof are-called for redemption (or are 'io be redeemed
pursuant to the apphe~ble provisions of the Indenture), the Trustee shall send to the registered owner of
each Bond to be redeemed notification thereof which notice shall (1) specify the Series 1996 Bonds to be
~teemed, the redemption date, the redemption price and the place or places where amounts due upon
such redemption will be payable(Which shall be the Principal Office of the Trustee) and, if: less than all of
the Series 19¢)6 Bonds are to be redeemed, the nmnbers of the Series 1996 Bonds and ithe portions of
Series 1996 Bonds to be -redeemed, (2) ~ate any condition to such redemption and (3) state that on the
redemption d~te,-and upon the satisfaction of any' such condition, the Series 1996 Bonds to be redeemed
shall cease to :bear ,interest Such.notice may ~set forth .any additional information relating to such
~redempfion. ~ueh notice shall' be-given by mail not. less ~ thirty (30) days nor more than ,sixty (60) days
Prior to the d~e fixeA for. redemption (a) by registered or certified mail to the owner of each such bond to
~be redeemed, at his address as it appears onthe registration books of the Trustee, (b) to all organizations
registered wi~ the Securities and Exchange Commission as securities depositories, and (c?. to at least one
information :~ce of national recognition which disseminates securities redemption i~ormafion with
~respect to tax--pt securities. In prepar4ng' such notice, the Trustee shall take into accou,fl, t, to the extent
"To: Ma~k Raymond, Esq?~Moyle, Lanigan, Katz, 'Flag,From: Susan Evans 215-972-8302
,!
6/26/96 ~: 12:58:44 Page 15 of 49
applicable, the ,prevailing tax-exempt securities industry standards. Failure to give any notice specified in
~(a) or any defect therein, shall not affect the va~dity of any proceedings for the redempfiOh of any Series
1996 Bonds'with respect to which no such failure has occurred, and failure to give any notice specified in
.... (b) or (c),:or any defect therein, shall not affect the validity of any proceedings for the redemption of any
Series 1996 Bonds with respect to which the notice specffied in (a) is correctlY given and shall not give
~rise .to any liability on the part ol~ the Trustee to the Issuer, the Owner or any bondholder. Any notice
mailed or provided herein shall conclusively be presumed to have been given whether or not actually
receivedby any bondholder. Provided funds for their redemption are on deposit at the place of payment
on:the redemption date, all Series 1996 Bonds or portions thereof so called for redemption shall cease to
bear .interest On such date, Shall no longer be secured by the Indenture and shall not be: deemed to be
outstanding under the provisions of the Indenture ~'
Mandatory Tender '
At any time the Series 1996 Bonds are subject 'to redemption pursuant to the Section 301(a) or 301 (b),
at~ Material Damage, or 301(c) of the Indenture, the Series 1996 Bonds may in lieu of such redemption,
be subject 'to mandatory tender, .in whole but not in part, to the Trustee for the purchase by the O~er's
designee, at a tender price equal to the principal amount thereof, plus accrued interest to 'the tender date,
~plus any premium that would apply were such Series 1996 Bonds to be called for redemption on the
tender date pursuant to Section 30 l(a), 301__0__0__0__0__0_~.or 30 l(c), as applicable. ]
~In order m execute its right to requke the Series 1996 Bonds to be tendered, the Owner shall provide
..... written notice, of its election to exercise such right to the Trustee, at least 20 and not mor~, than 30 days
.prior to ltae tender date, which.date shall be designated in such notice. On or before the tender date there
.shall be deposited with the 'Trustee, by the Owner's designee, funds sufficient to pay the tender price of
such principal amount of Series 1996 Bonds and the Trustee shall deposit such funds in a :Special account
which the Trustee is hereby authorized to create.
The Trustee shall send to the registered owner of each Series 1996 Bond to be subject to mandatory
tender notification thereof, which shall specify the Series 1996 Bonds to be subject to mandatory tender,
the ..tender ~ date, the tender price and the place or places where amounts due upon such'tender will be
payable (which-shall be the Principal Office of the Trustee) and shall state that on the tender date, the
Bondholders of the Series '1996 Bonds subject to mandatory tender shall cease to be entitled to any further
interest thereon. Such notice may state that the tender is subject to conditions, including but not limited to,
the availability of ftmds to ~pay the applicable tender price of the Series 1996 Bonds to be tendered. Such
notice Shall be given by-mail not less than ten (10) days nor more than thirty (30) days pri. or to the date
fmeXt for tender by registered or certified mail to the owner of each Series 1996 Bond ~.o be subject to
mandatory tender at his address as it appears on the registration books of the Trustee. Failure to give any
notice of tender.or any defect therein shall not affect the validity of any proceedings for the tender of any
Series 1996 Bonds with respect to which no such failure has occurred, and any notice mailed as provided
.herein shall conclusively be presumed to have been given whether or not actually m~eived by any
...... Bondholder,
On the re'rider date, Series 1996 Bonds subject to mandatory tender will be deemed to have been
purchased whether or not delivered by the Bondholder thereon provided funds are on deposit with the
To:.Mark Raymond, Esq. Moyte, LanJgan, Katz, .FitzgeFrom: SUsan Evahs 215-972-8302 6126196 12:59:48 Page 16 of 49
Trustee for tl~ purchase of tendered Series 1996 Bonds. In the event funds sufficient to p/~y the purchase
'?rice of all Seres 1996 Bonds are not on deposit with the Trustee for purchase of all Ser~es 1996 Bonds
)n the tender date, the lender shall be rescinded, and the Trustee shall return all Series 19 ~"~ Bonds to the
~endering Bondholders, and shall also send notice, by first class mail, the holders of the Series 1996 Bonds
notifying them that the tender has been rescinded. In the event any Series 1996 Bonds subject to
mandatory tender is not so tendered, the Trustee will authenticate and deliver a replacement Series 1996
Bond of the same series and of like maturity as the Series 1996 Bonds of the same series and of like
maturity,as the .Series 1996 Bonds.not tendered, and bearing a number not:contemporaneously outstanding,
and the Series 1996 Bonds which were not tendered shall no longer be Outstanding under this Indenture,
except that the Bondholders .thereof shall be entitled to receive the tender price therefor upon tender to the
Trustee. On the tender date, the Trustee shall authenticate and register replacement Series 1996 Bonds for
the Series 1.996 Box~zds tendered or deemed .tendered in the name of the Owners or its designee, shall pay
the tender price of Series 1996 Bonds tendered to it from amounts held by: it in the special account
established for such purpose as hereinabove provided, and, except for any amounts held bY it for Series
1996 Bonds deemed tendered, Shall pay to the Owners or its designee any amount reraaining in such
special account.
Additional Bonds
Subject to receipt by the Trustee of the documents listed in the Indenture, the Issuer can issue one or
more Series of additional bonds .("Additional Bonds") for the purposes set forth below. Each such Series
of Additional Bonds shall be issued pursuant to a supplement to the Indenture and shall be equally and
ratably secured under the Indenture with any ether'bonds issued under the Indenture, without preference,
~priority ~or distinction of any bonds over any other bonds; provided, that certain Bonds c~xt be issued as
subordinated Bonds. No Series of Additional Bonds shall have a lien on revenues deposited into the
.Revenue Fund senior to the lien created for the Series 1996 Bonds. For so long asany Series 1996 Bonds
are rated by the Rating Agency, no Additional Bonds can be issued without written evi3.ence from the
Rating Agency that such rating will not be reduced or withdrawn as a consequence of the('?suance of the
Additional Bonds. ~
Additional Bonds can be issued (i) to pay the costs of adding to, renovating, repairing, improving and
equipping the Project that are of such nature as to be chargeable to a fixed capital account by generally
accepted accounting principals, (ii)to refund any Series 1996 Bonds or Additional Bonds previously
· issued by the issuer, (iii) to .provide working capital for the Owner (iv) for any combination of such
purposes.
SECURITY FOR THE SERIES 1996 BONDS
Pledge Under' the Indenture
The Series 1996 Bonds are limited obligations of'the Issuer under the terms of the Inderiture. Pursuant
to the Loan ,a, greement the' Issuer will lend the proceeds of the Series 1996 Bonds to the 'Owner and the
Owner will agree to make :loan payments, subject to the nonrecourse terms of the Loan Agreement and the
Note, in amounts sufficient to pay the debt service requirements on the Series 1996 Bonds. The Series
To: Mark'Raymond, Esq. MoYie, Lanigan, .Katz, Fitzg~From: Susan Evans 215-972-8302 6/26/96 13:00:42 Page 17of49
1996 Bonds are payable solely from the paymems due under the Loan Agreement and the ~ote and certain
funds established under the .Indenture and held by the Trustee. The Issuer has pledged ~e revenues and
receipts received by it .under the Loan Agreement and Note and all monies and securities and funds
established and created ,by the Indenture or which are held by the Trustee thereunder to the repayment of
the principal ot~ redemption premium, if any, and interest on the Series 1996 Bonds.
Reference Should-be made to Appendix B "Pro Forma Financial Projections" for furiher discussion
ccmc~g the anticipated rent from the Project.
.Reserve Funds and Other Funds Established and Created under the Indenture.
Debt Service Reserve Fund.
Series 1996 Bond proceeds equal in mount to $855,348*, the maximum amount required to be paid
on account of principal of and interest on all Series 1996 Bonds in any Bond Year (the "I996 Bonds Debt
Service Reserve .Fund Requirement') will .be deposited in the 1996 Bonds Reserve Account of the Debt
servt'ce Reserve Fund. The Trustee will use amounts from the 1996 Bonds Reserve Acceunt of the Debt
"Service Reserve Fund to the extent necessary to pay debt service on the Series I996 Bonds if transfers
from the Revenue, Operating Reserve, Maintenance Reserve and Surplus Funds are insufficient therefor.
:,If the :balance in the 1996 'Bonds Reserve Account falls below the 1996 Debt Service Reserve Fund
Requirement, the Trustee shall transfer funds to the 1996 Bonds Reserve Account to provide therein the
amount:of the 1996 Bonds :Debt Service Reserve Fund Requirement, first, to the extent and in the manner
provided in the 'indenture, from the Revenue Fund, then the Surplus Fund and then from the Operating
~--~Reserve Fund, and then from the Mainlenance Reserve Fund. If on any January 1 or July 1 the amount in
any account in the Debt Service Reserve Fund is less than the Debt Service Reserve Fund Requirement
therefor solely by.reason of a change in the valuation of investments therein, no transfers to such account
shall be required so long as all investment earnings and amounts in such account remain therein until such
account contains-the amount of the .Debt Service Reserve Fund Requirement therefor and on the next
January I or July 1, as the case may be, such account contains an amount equal to tlie Debt Service
Reserve Fund Requirement therefor, if such account at that time does not contain an amount equal to the
Debt SerVice Reserve .Fund Requirement therefor, the Trustee shall begin the transfers thereto of the
amounts required.
lVIaintenance Reserve Fund.
Series 1996 Bond proceeds equal in amoum to $96,000* (the "Maintenance Reserve Fund
Requiromen ) will .be deposited in the Maintenance Reserve Fund. The Trustee will use amounts in the
Maintenance Reserve Fund under the Indenture (i) to make transfers to the Expense Fund to the extent that
the balance therein after transfers from the Revenue Fund, the Surplus Fund and the Op?rating Reserve
Fund and the Operating Reserve Fund is less than the sum of the Expense Requirement and the
Tax/Insurance Requiremeng (ii) to make transfers to the Interest Account and then t? the Principal
~.~Account Io the extent necessary to pay interest on and principal of (whether at miiturity or upon
Preliminary, 'subject to change
To:' Mark Raymond,Esq. Moyie, Lanigan, Katz, Fi~zg(From: Susan Evans 215-972-8302 6/26/96 13:01:38 Page 18 of 4~c
acceleration or redemption), lhe Series 1996 'Bonds as the same may become due, in the event transfers
from the Re~.:enue Fund, the Surplus .!Fund and the Operating Reserve Fund are insufficient for such
purpose; and ~fii) to:make lrarmfers to the Debt Service Reserve Fund ifrequired under the.?!ndenture.
At the dir ~ection of the Owner (which direction .shall be accompanied by a certificate to ~e effect that it
,is in eomplian? with ~s.paragraph), the Trustee shall use amounts in the Maintenance R0serve Fund not
utilized :pnr~ to the previous paragraph to pay the cost of acqui~g, constmcting~and equipping
fmtures, ma¢~, equipment, .furniture,-real property and additions to, or improvements, extensions or
enlargements ot~':.the ~Project, and ~the coster extraordinary maintenance, or repairs (repairs or maintenance
.not recuning annually), renewals and replacements and repairs resulting from an emergency caused by
:some extraordinary.occurrence; provided, .however, that such ,disbursements shall be made to pay only
costs .which are capital expenditures normally subject to depreciation in accordance with GAAP as
evidenced : in the certificate_of ~:Owner hereinabove mentioned. Property acquired with payments made
pursuant to this section shall 'become part of the Project.
In addition,to ::the use of monies inthe Maintenance Reserve Fund for any of the purposes set forth
above, amourrts transferred.from lhe Surplus Fund and deposited into the Additional Deposit Account shall
be available to pay and .shall :be .disbursed by the Trustee, at the written direction of the; Owner (which
direction shatl be accompanied by a certificate to the effect that it is in compliance with this.' paragraph), (i)
.lo repay advances made by the ~Owner orby third parties or to pay principal and interes[ on borrowings
obtained'by the Owner, provided amounts so :advanced or the proceeds of such borrowing were used by
-are Owner to provide for the operation, maintenance or 'improvement of the Project, (ii) to establish
~reserves for maintenance or repair expenses which the Owner estimates will be needed within a reasonable
period of time and :that, when incurred, will exceed 'the amounts then expected to be available in the
Monthly Deposit Account of Ire Maintenance Fund for such purpose and to pay other Expenses or capital
expenses of the:Project.
Opera~ Reserve 'Fund.
Requirement on any July I or January t will be transferred to 'the Revenue Fund.
Series 1996 Bond proceeds, equal in amount to $71,279' will be deposited in the operating Reserve
Fund. The amount on deposit in the Operating Reserve Fund is required to .equal one-twelfth of the
:maximum annUal debt service :(on a BOnd Year basis) on the Series 1996 Bonds (~e "Operating
Reserve Fund' Requirement'). The Trustee will use amounts in the Operating Reserve Fund under the
Indenture (i) to make transfers to the Expense Fund to the extent the balance therein after, transfers from
~the Revenue Fund and the. Surplus Fund is less than the sum of the Expense Requirement and the
Tax/Insurance:Requirement, (ii) to make ~ansfers to the various accounts of the Bond Fund as required
by the Indenture.to.the extent-necessary to pay whenl due debt service on the Series 1996 Bonds in the
event transfers from the Revenue Farad and the Surplus Fund are insufficient for such purpose, and (iii)
to make transfers to the Debt Service Reserve ~Fund to provide therein the Debt Service Reserve
R '
eqmrement m the event transfers from the Revenue Fund and the Surplus Fund are insufficient for
such purpose~
Any amount on deposit in.the Operating Reserve Fund in excess of the Operatingi Reserve Fund
To: Mark Raymond, 'Esq.'~ Moyle, Lanigan, Katz, FitzgEFr0m: Susan Evans 215-972-8302 6126/96 13:02:38 Page 19 of 49
,Project Fund ?
Series 1996 Bond proceeds (exclusive of accrued interest) remaining after deposits into the Debt
,.Service Reserve Fund, Maintenance Reserve Fund, Operating Reserve Fund, Expense Fund and Cost
of Issuance Fund will be deposited in the Project Fund. Any monies-held in the Project Fund shall be
-disbursed only for payment of costs related to the Project, as follows: (i) to make a payment to the
Owner in the amount of $ , which the .Owner agrees will be used to pay amounts constituting
operating or non-operating expenses of the Project or amounts chargeable m capital account of the
Project in accordance with generally accepted accounting principles; (ii) to pay the amount of
$ to Resolution Trust Corporation or its successor or assign, as holder of that certain
'Promissory Note made December 18, 1995 by the Owner in the principal amount of $8,:835,000.00, in
satisfaction thereof; ('fii) to pay the amount of $ to The Enterprise Foundation, ~c., as holder
~of that certain Promissory Note made, DeCember, 1995 by the Owner in the principal amount of
$495,000.00 in satisfaction thereof,(the ~ Loan"); (iv) to pay the~ amount of
$184,000.00 to the Issuer as partial consideration for the assignment by the Issuer to the Owner of the
'Issuer's right to acquire the Project from Resolution Trust Corporation; (v) to pay such.other amounts
as are directed in writing by the Owner to satis~ all existing indebtedness and obligations of the Owner
with respect to -the Project; and (vi) the remaining amount shall be disbursed by the Trustee to the
Owner, m be used by the Owner to pay costs of repairs, replacements and other amount's chargeable to
the capital account of the Project, pursuant to Requisitions signed by the Owner. The ivStial deposit of
Series 1996 Bond proc~& to the Project Fund Will be $
limited Obligations of/ssuer ·
NEITHER THE SERIES 1996 BONDS NOR'THE INTEREST THEREON SHALIiBE DEEMED
TO CONSTrrUTE A DEBT OF PALM BEACH COUNTY OR OF THE STATE OF ~FLORIDA OR
~NY POLITICAL SUBDIVISION THEREOF OTHER THAN THE ISSUER. THE~SER_IF3 1996
BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER AND THE ISSUER SHALL NOT BE
OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, ON, OR INTEP~ST ON THE
SERIFS 1996 BONDS OR OTIJF~R COSTS INCIDENT THERETO EXCEPT FROM THE
REVEN~ AND RECEIPTS PLEDGED AND ASSIGNED THEREFOR, AND 1NEITHER THE
!FAITH AND CR~T~IT NOR THE TAXING POWER OF THE ISSUER IS PLEDGED TO THE
· PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, ON OR INTF_~-~ST ON THE SERIF_3
1996 BONDS .OR OTI-IER COSTS INCIDENT THERETO.
~To:' Mark:Raymond, Esq.jTMoyte, Lanigan, Katz, 'Fitzg(F~0m: ~u~n~-~ns 215-972-8302
6/26/96 i 13:03:~8 Page 20 of 40'
SOURCES AND USES OF FUNDS'
The folloWing tables set forth approximately the sources and uses of funds in connection with the
issuance and sale Ofthe Series 1996 Bonds(exclusive of accrued interest).
.:Sources:
Bond Proceeds
PartnerShip ~ty_ :Contribution
TOTAL SOURCES OF FUNDS
I)eposR to Project Fund
Payoff of RTC Obligation
8 835 000
Payoff of,Entemrise Loan
Pa~offof City -
Rehovations -
Deposii to Debt Service Reserve Fund
Deposit to Maintenance Reserve Fund
Deposit to Operating Reserve Fund
~ParmeChip Development Fee
PartnerShip Working Capital '
465, O~Q~
100.000
384.000
250,000
Costs of Issuance
TOTAL USES OF FUNDS
* ~mary, subject to change.
THE ISSUER
The Issuer .is a municipal corporation of the State of Florida. Pursuant to the Act, the Issuer is
authorized to issue :the Series 1996 Bonds and to loan the proceeds thereof to the Owner f6r the purposes
described herein. :~
The IsSUer ~has not.provided :the information hereto concerning the Owner or the Pro'ject and is not
· '', , ). p eq' y , '
investigation and makes.no representation conc~ng the fiscal condition of the Owner, or the accuracy or
sufficimcy of any information:herein concerning the Owner, ,
CERTAIN OF THE INFORMATION HEREIN OTHER THAN THE INFORMATION UNDER
THE CAPTION "THE ISSUER" AND "LITIGATION" IS BEYOND THE KNOWLEDGE OF THE
ISSUER. W~LE THE ISSUER HAS NO REASON TO BELIEVE THAT SUCH INFORMATION IS
To:Mark Raymond,. Esq., Moyle, Lanigan, Katz, FitzgeFrom: .Susan Evans 215-972-8302 6126/96
13:04:10 Page21 of4~c
INCOMPLETE OR INACCURATE, THE ISSUER HAS NOT INDEPENDENTLY IN~STIGATED
:~OR CONFIRMED THE ACCURACY OR'COMPLETENESS THEREOF.
THE OWNER AND TIlE PROJECT
The ~er
.The Project is owned by C/HP Cove, Inc. (the "Owner") a nonprofit Florida corpomiion which was
incorporated September 29, 1995 ~ough the efforts of Cornerstone Hous_mg Corporation ( Cornerstone ).
Comerstohe and Housing P _artnership were selected by th,e,,City in the summer of 1995 to participate
in a pr_op0sal made to lfie Resolution Trust Corporation ("RTC) to acquire the Project thr6/agh the RTC's
Affc~uda~le. 'Hou_sing Program. The-proposal made by the City, Comerstone and Housing Partnership
~spec. itied that~f the proposal were successful, Comers-tone andHousing Partnership wou!d ~reate a new
:~mgle-pu~se :corporation contrOlled by Co..m_~_,stone and. Housing Pajrtnership to acquit? and ovxaa the
~_oject uk~on ~sfer from the RTC. The City. s j~roposal was selected by the RTC. Cornerstone and
Housing Partnership then caused the Owner m be incorPorated, and the Owner acquired the Project from
,the RTC. The .prirfiary source of financing for the Project was provided by the RTC together with a loan
made by The Ehterprise Foundation, Inc. ("Enterprise"). The Owner will ~efmance the RTC loan and the
.Enterprise Loan with proceeds of the Series 199.6 Bonds.
Under the~:bvlaws of the Owner, Iwo-flfirds of the members of the Board of Directors of the Owner are
to be .elected or hppointed by the Board of Directors or .officers of Cornerstone and the remaining members
of:the Board orDi~ectors of the Owner are to be elected or appointed by the Board of Directors Or officers
~,,,-ofHousing Partnership.
Relationship~-nong Owner, Cornerstone and tlousing Partnership
COrnerstone and 'Housing Partnership, as described above, control the Board of Directors of the
Owner. In ~dition, pursuant .to agreements made in connection with the acquisition ~of the Project,
Cornerstone Will provide asset management services for the Project and HousingPartnership will pr6;dde
· social service ~mahagemem for the P}oject2 Cornerstone and Housing Partnership will receive fees from
,the Owner for providing such services.
In addition, with respect to any net cash flow which is distributed pe~i_'odically by the Trustee to the
Owner from the Surplus Fund, llae Owner has agreed to pay 28% of such ~nount to the City in
recognition of the :City's role in the acquisition of the Pi~oject from the RTC (See Appendix A
DE:gCRIPTION OF TftE PROJECT -; Adqui.s. ifion of the Project"), and the remaining ~7,2_% the Owner
expects to contribute ~o the extent such conlributions to Housing Partnership and the Cornerstone are
,consistent with the charitable purposes of the Owner.
Cornerstone ~
Cornerstone is a .Maryland nonprofit corporation incorporated July 24, 1991 through the efforts of
E. nterl?ri. 'se, a pUblicly-supported chai-itable oq}anizafion. Comer.stone w. as recognized as ~m organization
described in Section 501(c)(3) of the Code 'by determination letter dated November 2!, 1991. The
directors of Cornerstone a}6 appointed or .elected by Enterprise. In addition to its involqemem with the
~.~.Project, Comer_stone is involyed ip. the acquisifi6n, deve!.o, pm. ent and operafi, on of _.thirt.ee~..~hous.ing
..d.e. velopments-for low and moderate income persons and families m Texas, Georgm and Maryland~
2,627 units. -
~._~ Housing Partnership
To: Mark. Raymond, ~sq. Mo¥le, Lanigan, Katz, FitzgEFrom: Susan Evans 215-972-8302
6/26t96 13:05:10 Page 22 of 49
Housing 'Parmerslfip is a Florida nonprofit corporation incorporated January 23, 1986. Housing
.Partn~ship Was recognized as an organizafibn described in Section 50,1(c)(3) of the Code by determination
letter dat~ May 21, 1987. ~It.is a community-based organization with its corporate office~ in West Palm
Beach, .Florida. The members of the Board of Directors of Housing Partnership areal elected by its
.,~embership and suCh membership is open to all residents of Palm Beach County. Pfilm ~each County is
"the cotmty in ~ch the City and the P/eject are located. Housing Partnership v~ill provide,; social services
at the Pr0ject. fl~ough its program known as the "Campus for Living" prograni..,i~
The Project .~
~Clipper Cove Ap ~aflrnents (the "Project") is loc.ated at 1500 Southern Cross Lane in Boynton Beach,
Florida and.consists of 25 :garden Style apai'lment buildings Containing a total of 384 rental units. The
Owner acquired the ProjeCt from the Resolution Tm~t Corporation on December 20, 1995, and
commenced operations of the 'Project as of such date and prior to such date had no involvement with the
Project and no information concerning ,its operation.
The Owner currently operates the Project ~rough a management agreement dated January 1, 1996
xvith'Property ..Asset Management of Fl~id_a~General Partnershi_~.
The o _peration of the Project wifl be subject to the restrictions imposed in connection with the issuance
of the Series ~.1996 Bonds ~ts described in lifts Official Statement a~_d ,~ooendices and subject to the
restrictions ' _m~posed by the RTC which are des,,eribed in Appendix A Description Ol3The Project --
Acquisition ofthe Project, RTC Use Restrictions. ~
Further information concerning the Project is contained in Appendix A -- "Deschption Of The
Project," :
C/HP Co e, Inc. (tbe Owner ),has no assets other than the Project and does not at this: time engage in
any activities unrelated to the Project.
BONDHOLDERS' RISKS
,AN INVESTMENT IN THE SERIES 1996 BONDS INVOLVES CERTAIN RISKS. IN ORDER
TO IDENTIFY RISK ~FACTORS AND MAKE AN INFORMED INVESTMENT DE£~ISION AS TO
WHETHER THE SERIES 1,996 'BONDS ARE AN APPROPRIATE INVESTMENT~ INVESTORS
SHOULD REVIEW THE ENTIRE OFFICIAL STATEMENT. INVESTORS, PARTICULARLY
INVESTORS. THAT ARE CORPORATIONS (~,INCLUDING S CORPORATIONS AND FOREIGN
CORPORATIONS' ,OPERATING BRANCHES IN THE UNITED STATES OF AMERICA),
iPROPERTY ~OR CASUALTY INSURANCE COMPANIES, BANKS, THRIFTS,! OR OTHER
FINANCIAL INSTITUTIONS OR CERTAIN RECIPIENTS OF SOCIAL SECURITY BENEFITS,
ARE ADVISED TO CONSULT THEIR TAX ADVISORS AS TO THE TAX CONSEQUENCES OF
PURCHASING THE SERIES 1996 BONDS. INVESTORS SHOULD CONSIDER cAREFULLY
ALL FACTORS THAT CAN AFFECT THE OWNER AND THE OPERATIONS AND REVENUES
OF THE PROJECT AND THAT CAN CONSEQUENTLY CREATE THE POSS~ILITY THAT THE
SERIES 1996 'BONDS WILL NOT BE PAID, WILL BE REDEEMED BEFORE MATURITY OR
ACCELERATED OR THAT INTEREST ON THE SERIES 1996 BONDS MAY BE TAXABLE
FROM THEIR .DATE OF ISSUANCE, SOME, BUT NOT ALL, OF THE FACTORS X~rtICH
SHOULD BE CONSIDERED ARE DISCUSSED BELOW.
To: Mark Raymond, Esq. !'Moyte, Lanigan, Katz, 'Fitzg(From: Susan Evans 215-972-8302 6/26/96 ~ 13:06:08 Page 23 of 49
Series 1996 Bonds Are L'nnited Obligations
The Series 1996 Bonds and the interest thereon are limited obligations of the ISsuerpaya_ble solely
~rom the revenues and rece'rpts derived :by the Issuer from the Not6 and other security theiefor, which
revenues and ~eceipts have ~ pledged and assigned to secure payment thereof. The Series 1996 Bonds
will be secured by and payable from certain moneys held under the Inden__,t~_e, including payments to be
,made by the .Owner unde{ the ~ Agreement and the Note. The Owner s obligations finder the Loan
Agreement ~ Note are nonrecourse obligations. In addition the Owner:has, and ~s expe~ed to have, no
'.assets other than the Project. Holders of the Series 1996 Bonds will therefore have reco.fl.'rse only to the
:Project and .the moneys on deposit in the funds maintained under the_ Indenture to satisfy ~se obligations.
No other reVenueS ,bt asset~ will be available .for the payment oi; or as seCUrity for, ~e Seri~s 1996
Bonds. No r~presenation or assurance can be given flat the Project will generate sufficient revenues to
enable the Owher to meet its obligations .under the Loan Agreement and the Note.
The Owner .has no assets other than its interest in the Project and, the enforcement of payments
required by the Loan Agreement may be made only against the Pr6ject.
The Owner's obligations under the Loan Agreement are nonrecourse in nature, and any judgment or
decree to enforce the Ow~_.er's obligations under the :Loan Agreement will be enforceal~le against the
'Owner only to the extent .of its interest in ,the Project. Accordingly, the enforcement of payments required
.by the Loan Agreement may be only against the .Project. '
It has been the exp. erience .of lenders in recent years that attempts to foreclose on commercial property
are frequently:met with defensive measures, such as :protracted htigation and/or bankruptcy proceed'rags,
and,that such defensive measures can greatly' increase the expense ifivolved in achieving so~h realization.
The 'facilities comprising the .Project are ~yecifically constructed as multi-family housing facilities and are
subject to physical restrictions ti/at may Iimit ~the alternative uses that can be made of such properties. If
'the Owner is Unable to operate the Project successfully as multi-family housing, the numbeP of entities that
would be 'interested'in ~_urc _has____ing ~or leasing the Pr6ject t~om the Trustee for o~er pu~oses could be
extremely limited, and the abili~ of :the Trustee to lease or sell the Project to flfirdpdrties woUld be
adversely.affected. Therefore, there is no assurance that the Trustee could realize sufficieni proceeds from
~'the foreclosure of the mortgage and .lite sale of~e Project thereunder to pay the Series ~1996 Bonds in
whole or .in part. Prospec~ for the ~uninterrupt_ed :payment of principal and interest on the Series 1996~
Bonds in ac~rdance with their terms .are therefore taZimadly dePendent upon the successful operation
th~ Project.
Tax Exempt Status of the Owner
Theax exempt satus of the Series 1996 Bonds is conditioned, '_m pa~,_ .upon the Owner's _sa.ms as an
organization described in S .ection 501(c)(3) of the Code and exempt Ii,om t~deral income aX. In the event
~ltmt the Owner ceases to be an .exempt organization described under Section 501(c)(3) of the Code,
interest on the Series 1996 Bonds may be subject to federal income taxation. -~-
Loss of Exemption of'Interest on Series 1996 Bonds ~;,
The excludability of interest on the Series 1,996 Bonds from gross income for federal income ax
purposes is dependent upon continuing cgmpliance by the Owner with various requirenxents, including
~erfain of.the requiremehts summarized her~in; however, the remedies available to the Issuer and ~e
Trustee to comPdl c9_ mpliance are limited. Upon the occurrence of a Determination of Taxability, the
interest rates Otherwise borne by the_Series 1996 Bonds shall be increased, but not decreased, .to rates
determined by the Owner (in a certificate delivered to the Trustee) by multiplying the rates otherwise
~borne by the Series 1996 Bonds (from ~and after the Determination of TaxAbility) by a fraction, the_
numeratBr of which is one and the denominator Of'which is one minus the Maximum Corp°rate Rate as of
the date of the Determination of Taxability, ,provided that if such fraction is less than one, then no interest
rate adjuslment shall be made.
To: Mark,Raymond, Esq. Moyte,'Lan[ga~ Katz, FY~zg(From: Susan Evans 215-972f8302-' 6/26/96 13:07:16 Page 24 of 49
Loss-from R~lemption or Mandatory Tender :Prior to Maturity
A.pe_rson ~vho purchases aBond at a price in excess of par or .who holds a Bond trad~g at aprice in
~xcess of. par:ShoUld consider the possibility of redemption or mandatory tender of the Se~s 1996Bonds
Risks,of ~ Estate Investments :!
Ownership and.operation of real estate, such as the Project, involves certain risks, inclu~ting the risk of'
adverse _changes in g~meral economic and local conditions, including an oversupply and lagging demand
for housing; ~versupply of similar units in .the area; population d~creaseS; ~shred losses;failure of
residents m p~y renf;.o~g deficits and foreclosure; la~ck of attractiveness of the Property to residents;
adverse chahges in n~ghborfiood values; and adverse changes in zoning laws, f~de£al ~nd local rent
controls, other laws and-~tions and real property tax rates. Such risks also include [he possibility of
damage or .destruction.by _:~e, hurricane or 6th& casualty, and condemnation. If the Project should be
,~rtialty or completely tini~abitable during restoration after damage or deslructiOn, the ihability of the
~Owner m rent.th~ affected mrs Would impa~ revenues available for payment of debt service on the Series
1996 Bonds. ~
Insufficient Insurance ~
V~tile the~-Owner int~ls ~o .maintain certain types of insurance, and is required to do so under the
Loan ~greem'~nt and the M.o~g. age, the Project may ~nonetheless not be insured agains~t~ all hazards to
which it may be exposed or liabilities which can arise in connection with its operation. If the Owner incurs
uninsured casualty losses or liabilities, its ability to make timely payments urider the Loan ,Agreement and
Note canbe adversely affected.
Set Aside for:Low:Income Tenants
' The economic.feasibility of the Project depends in large part upon its being substantially occupied.
The Owner is required to maintain the Project as a "qualified residential rental project" as defined in
Section 142(0) of the Code and is required to comply with the terms of the LURA with the RTC asa
~result, the Owner is req_uir' e_d to have 20% of the units in the Project occupied (or treated as occupied) by
persons Whose income for federal'~x.hwpurposes does not, at the time oi~ initial occ.u;pancy, exceed 50%
of.the medianl, gross income of the ~Wes. t Palrfi Beach Boca Raton,~Florida, Metropolitan Statistical Area
whiCh is ~and to .mak~ an ~-d-d~%_--~ units available for tenants whose income is 80% or
less of the median :gross income. There:can be no assurance that the Owner will be able~m rent units to
.comply with ~ose r~ts or at rentals which will enable it to make timely payment of its
obligations.I i~
Competition:
',The muttifamily .rental housing market in the Pr?ject, s location is highly competitive. While the
Owner believes that the Project compete effectively within its service area, there can be no assurance that it
will .continue to do so in ~he future. Future.competition can include projects (i) designed a~.~d built with the
benefit of advanced te~_~ogy not.utilized in the :Project, (ii) which are able to reduce significantly their
costs lhrough economies of s~le or other methods not available to the Owner or (iii) which are perceived
to offer more attractive faciliti~ or services.
Other Operating Risk;Factors
The occurrence of any of the following events, or other una~, a.'cipated events, could a~lversely affect
,the o~perationg of the owner and"the ProjeTct: inability to control increases in operating Costs, inclu, ding
salaries, wageS and fringe :benefits, supplies and other expenses, without being hble to obtain
corres~in~ rent increases from residents of the Project whose income will largel~i~be fixed; and
employee strikes and other adverse labor actions which could result in a substantial increase in
To: Mark. Raymond, Esq. Moyie,'Lanigan, Katz,'Fitzg~From: ~Usan Evans 215-972-8302 6t26/96 ~13:08:16 Page 25 of 4.c
e~ditures Without a corresponding increase in Project revenues; and adoption of federal, state or local
~le~islation or regulations havirig an a~lverse effect on the furore operations of'the Owner of the Project.
Reserve Funds
~ ~ ; . 'rpl. s Fund for Payment of Bond principal and interest to the ex~nt moneys on
det~_ sit in lhe,Bond Fufifl are insufficidnt therefor. The Debt Service Reserve Fund Reqt/irement f~r the
:~eides 1996 .~}" nds is ~e maximum mount required to be paid on account of principal ahfi interest in the
~en, c..m!yent.or .any s.u~e.quent B. ond Y _ear. ~e Operatin~ Reserve Fund Requirement isi~ one-twelfth of
.the Maxtmum Annual Debt SerVice on the Series 1996 Bonds. The Maintenahce Reserv~ Fund Deposit
Re§u. iremea.t is $8,000 per month. 'Althougl. a. :the Owner believes such reserves to be reasonable and
anticipates that revenues from the Prgject will be sufficient to cover the debt service on the Series 1996
Bonds, there ~is no assurance that funds reserved and future revenues from the Project will be sufficient for
this purpose.
:Limited Market for Project on Foreclosure
As a result of the lack of alternative uses of the Project for other than multifamily rental housing, the
Tmstee's remedies and, in the event of a foreclosure of the Mortgage lien against the Project, the ntimber
'of entities that Would be interested in p~chasing or leasing the P_r6ject would be limited..: No assurance
can ~be made that the mount realized upon any forced sale of the Project will be sufficient to pay the
_Series 1996 .Bonds. In particular, there can be no aSsurance that the co~t of the proPerty }included in the
Project would be realized upon any forced sale thereof.
;Loss or Subol-dination of Liens Securing Series 1996 Bonds
Although the Indenture creates prior hens on the funds and accounts established therein for the benefit
,of the Bond. holders, in the event of ~ b _ankmptcy or other type of insolvency of the Owner, ~ere can be no
~"~ assurance that the proceeds of the Series 1996Bonds held under the Ind6nture would not be considered
part of the estate or assets of the .:Owner or otherwise be subject to such proceedings. In addition, the
Oarious security interests estabhshed under the Indenture, the Loan Agreerrient and the Mortgage can be
~ited by or ~abject to other claims and interests. Examples of such claims and interest are: statutory
liens; righ~ .arising in favor of the United States of America or any agency thereof; constructive trusts,
equitable liens or other rights impressed or conferred by any state or federal court in the exercise of its
_equitable jurisdiction; federal bankruptcy laws affeCting mounts earned by the Owner after institution of
::b -anlsm__ pt_c-y proceedings by or against the Owner; the r6quirement that appropriate continUation statements
be filed 'in/mCordance with .the Uniform Commercial Code, as from lime to time in effect, and other
indebtedness.
Enforceability of Remedies
The Series ~996 Bonds are secured :by the Indenture and the Mortgage which proyide 'tbr the grant of
'liens on. and security interests in the _Project, including a security interest m furniture, furnishings arid other
~]~ersonal-propc.~y in the Project, :and in the revenue~ pledged to the payment of the Serie~ 1996 Bonds.
The practical re~dization of Value from the property ~bject to the moi'tgage lien upon ~,a~ default will
.depend upon .the exercise of various remedies specified by the Indenture, ihe Loan Agreement and the
'M~rtgagd. These and other remedies can, in many respects, recluire judicial actions which are often
~ubject to discretion and delay. Under existing law, the remedies specified by the Indenture and the
Mortgage may not be readily available or can be limited. _A court c/n decide hot to order the specific
perfo-mfance of the covenant~ c. ontained in those documents. Although the Owner has no present in~enfion
· to institute bankruptcy proceedings or to seek protection under Title 11 of the United States Code or any
~other federal or stiite d~btor relief laws, the Owner cannot be prevented from instituting such proceedings
or seeking sugh protection or rebel. The various legal opinlons to be delivered concurrenily with lfie
..deli.yer~ 6£the Series 1996 Bonds will be qualified as ~o the enforceability of the various legal instruments
,by Jhra.m/ons aposed by state ..and f ral laws, rulings and aecisions affec ng re edies
~'t~anlcmptcy, reorganization or other laws affecting the enforcement of creditors' rights ~enefally.
To:'- Mark Raymond, Esq. Moyle, Lanigan, Katz, FitzgE'From: Susan Eva~ 215-972-8302 6/26/96 13:09:24 Page 26 of 49
Lack of FeaSibility Study ~
No feasibility study or similar analysis of the projected future operations of the P~oject h~.s been
included in ~s Official Statement, and neither the issuer, the Owner nor the Under, rs make any
represemaliom whatsoever regarding the future operations of the Project. ,!~
'.The Pro-[orma Financial Projections included in Appendix B are based on certain assumptions
;significant to the operation of the Project as described th&;ein, and sets forlh information as of the date
~reof. 'Some aSstimed events and circumstances inevitably will not materialize and unanticipated events
and circums~Eces .may occur subs .equent to the date of th6 forecast. Therefore, even if the kssumptions
con _oeming utilization levels are ~eved and maintained, lhe ac.tu, al results achieved during: the perioit will
~vary from the forecasted results and the variations may be material.
Neither the Issuer, the Owner, the Underwriters, the Trustee nor any legal counsel rendering approving
or other .opinions wilh respect to the transaction described herein, have verified the assumptidns and
conclusions contained in are Pro-Forma Financial Projections included in Appendix B. Prospective
:~investors are advised to read the Pro-Forma Financial Projections in their entirety, including all notes,
assumptions and supplementary information set forth therein.
THERE ~ NO: ASSURANCE THAT ACTUAL EVENTS WILL CORRESPOND V~rlTH THE
ASSUMPTIONS MADE, AND NO REPRESENTATION CAN BE MADE, THAT TE{E FORECAST
IN THE PRO-FORMA FINANCIAL PROJECTIONS WILL CORRESPOND WITH 'I:HE RESULTS
.ACTUALLY ACHIEVED IN THE FUTURE.
The..rating assigned to the Series 1996' Bonds reflects only the views of Standard & Poor's at the time
such rating ~s assigned, .and the Issuer and the UnderWriters make no representation as to the
-appropriateness of the rating. There is no assurance that the rating will continue for any given period of
ti~e .6r :that the raf.mg will not'be revised downward or withdraw~ entirely by Standard ~ Poor s. Any
such downward revisaon or withdrawal of the rating is likely to cause the market price of the Series 1996
· ·Bonds to decline.
SecOndary Market and Prices :
The Underwriters will not :be obligated to repurchase any of the Series 1996 ~Bonds and no
representation: is made concerning .any secondary market for the Series 1996 Bond~. 'ih. ere can be no
asSurance.that any secondary market wilt develop follo~w~ the completion of the offeriff~ of the Series
1996 Bonds or ltiat the inifihl offering prices for the Series 1996 Bohd~s will continue for any period of
time. Investors should understand~the long-term and economic aspects ot an investment in the Series 1996
Bonds and should assume that they will liave to :bear the economic risks of their investment indefinitely.
An.investment in the Series 1996 Bonds is unsuitable for any investor who is not able to hold the Series
1996 Bonds to maturity.
Tax Laws May Change
Beginning in .approximately April 1995, various proposals have been mentioned by members of the
C0ngress of the Unlfed Slates of America and others concerning reform of the internal revenue (mx.) laws
ofth~ United States. ~ertain of these proposals, if implemented, could have the effect of diminishing the
value of obligations of states and their pohtical subdivisions, such as the Series 1996 Bonds,i by elimir~ting
_.~or changing the tax-exempt status-of '~m~rest on such bonds. Whether any of such?proposals will
ultimately becOme law, and if so, what effect such proposals could have upon the value of bonds such as
the Series 1996 Bonds cannot be predicted, however, ii ~s possible that any such law couldi~mve a material
and adverse effect upon the value of the S6ries 1996 Bonds.
.... Effect of Bankruptcy
To::'Mark Raymond, ,Esq.. Moyle, Lan~gan. Katz. FitzgEFrorn: SusaniEvans 215-972-8302
. Bankruptcy proceedings may adversely affect the enforcement of Bondowners' rights. Federal
>ankruptcy la-&s may have :an ad;verse effect on the ability of the Trustee and the Bondowners to enlbrce
heir claim tothe Se:cnz/ty g _~ted by the Indenture and the Loan Agreement..Federal bankruptcy law
~rmits adoption ofa reo~g/niza00n plan even though it has not been accepted by the owners of a majority
"'in ~g _gregate principal! : am6unt',,, of~. Series. 1996 ',B,-onds,: if the Bondowners are proxaded' with the benefit
of their (Srigifi_al lienor the indubitabte'eqmvalent. In addition, if the bankruptc~ Court concludes that the
Bondowners have "adeg. uale protection'~ it may: (i) substitute other security :subject to the lien of the
Bondovmers, .and (ii)sut~ordin~te the lien of the Bondowners (a) to claims by persons supplying goods and
Services-to file Owner after bankruptcy, and (b) to the administrative expenses of the bknkruptcy
p_roceedings. In the ?_v-~_e~__,of'b~ptcy of the O.~wn, e...r, the amount realize,d, by t~,,e_ Boridowners might
.depend on the b_a3flSxu_ ptcy s. court s ihtei-pretat!on of indubitable equivalenf and ' adeqdate protecfi6n"
un-der the then:existing circumstances. The bankruptcy court may also have the power to ir/Validate certain
provisions of the Leah Agreement and Indenture which make bankruptcy and ~elated proceedings by the
Owner an event of defautf thereUnder.
THE INDENTURE
Funds; Application of Bond Proceeds
The ~denture establishes a Project Fund, a Debt Service Reserve Fund, a Maintenance Reserve Fund,
an Operating Reserve Fund, a Cos~ of Issuance Fund, a Revenue Fund, a Bond Fund, an Expense Fund, a
Rebate Fund and a Surplus :Fund. All accrued interest on the Series 1996 Bonds paid by the purchasers
thereof will be deposited in the Bond 'Fund and used to pay a portion of the interest due on such Series
1996 Bonds on Jahua~' 1, 1997. As described below, the proceeds of sale of the Series 1996 Bonds as
well as equity of the Owner will.be deposited in the Debt Service Reserve Fund, the Main(enance Reserve
Fund, the Operating Reserve :FUnd, the Cost of Issuance Fund, the Expense Fund and th0'.iProject Fund.
}~a ~n~_g~s on all funds under 'the Indenture-other than the Rebate Fund and Debt Service Regerve FUnd will
be transferred to :the Revenue Fund. Earnings on the Rebate FUnd will be retained in the. Rebate Fund.
Earnings from the investment of the amounts on deposit in .any account in the Debt Service Reserve Fund
shall b~ retained therein to .the extent the amount on deposit therein is less than the Debt Service Reserve
FUnd Requirement therefor, and otherwise shall be deposited in the Revenue Fund as received.
Cost of Issuance Fund
Series~ 19~6 Bond pr _oqeeds in an amount-eqUal to the estimated costs of issuance of the Series 1996
Bonds, including coun~l fees and .underwriting' fees, will be deposited in the Cost of Issuance Fund and
will be used to pay any such costs. Any amourits remaining in the Cost of Issuance.Fund on Septembe.r 1,
1996, will be transferred to the Bond Fund and applied as a credit against principal payments required to
be made by the Owner on'the Series 1996 Bonds.
Revenue Fund
The 'Trustee will ,deposit in the Revenue .'Fund, as received, all receipts with respec.f?o the Project,
whether derived from th& Note, Loan Agreement, the Mortgage, the proceeds from the inmrance or from
a~_y other source. ~s from investment of the. Revenue Fund shall be retained therein as received. As
of the first Business DaYof each month, but not later than the tenth day of such month the Trustee shall
:transfer.moneys from th~ Revenue Fund monthly as follows and in the following order:
(1) to the Rebate Fund, if any, to the extent the Rebate Analys, t, determines,,p, ursuant to the
Indenture that a Rebate AmoUnt must bedeposited in the Rebate Fund. (see' Rebate Fund below);
(2) to the General Expense Account the amoUnt needed to cause the amount therein to equal the
Expense Requirement and to the Tax/InsUrance Account and the amount needed to cause the amount
hherein to equal the 'Tax/insurance Requirement.
To: Mark Raymond,: Esq." MoYle,.Lan~gan, Katz, Fitzg(From: Susan Evahs 2'15-97~-8302 6/26/96 ~- t3:11:28 Page 28 of 49
(3) . to ~the Interest Account ~beginning in August, 1996, one-fifth of the difference between the
amount that will become due on the S~ries 1996 Bonds on January 1, 1997 and the amount deposited in
the Interest Account pursuant to flue Indenture and beginning in January, 1997, one-sixth of he amount of
interest that will becdme due on the Series 1996 Bonds on the next succeeding Interest Payment Date;
(4) to :~ Princip~_1 Account.beginning in Janu ~ary, 1997, one-sixth of the principal amount of such
Series 1996 Bonds ma~ring ~ subject to mandatory ,sinking fund redemption on the next succeeding July
I or January 1; as ~ c~se may be.
(5) . subject to certain provisions of the Indenture, if the balance in the Debt Service, Reserve Fund
is less .than th6 aggregate Debt Service Reserve Fund Requirement, to the accounts in the Debt Service
Reserve Fund th6 amount necessary to cause the amount necessary to satisfy the Debt S~rvice Reserve
Fund Requirement.for all Series 1996 Bonds secured by an account in theDebt Servic6 Reserve Fund
PRODDED HOWEVER, that if the .revenues available to the .Trustee for transfer to the Debt Service
i~eserve .Fund in any mop. th-are not sufficient to satisfy the aggregate amount to be deposited therein, the
Trustee-shaH deposrtsuch revenues on a pro rata basis, based upon the relative deficiencies from the Debt
;Service Reserve Fund Requirements therefor, between all those accounts therein;
(6) : to flue 'Monthly 'Requirement Account of the Maintenance Reserve Fund the Maintenance
Reserve Fund Deposit. Requirement,
(7) if the ~ce in :the Operating Reserve Fund was less than the Operating Reserve Fund
.Requirement as of the immediately .preceding January l, to the Operating Reserve Fhnd the amount
necessary-to cause flue amount therein to equal the Operating Reserve Fund Requirement,
(8) to the Trustee, the Rating Agency and 'the Rebate .Analyst the amount of any outstanding
'Trustee Fees and Expenses, 'Rating Agency Fees and Rebate Analyst Fees; [.
(9) to the Asset Mantager, the Asset Management Fee and to the Social Service Provider, the
Social Service'Fee, pro rata, if necessary; and
(10) a~qer making the above deposits in each month, any monies remaining m the Revenue Fund
shall be deposited in the Deposit AcCOunt of the Surplus Fund.
~Expense Fund
Amounts in ~ Expense Fund will be used to pay the Expenses of the Project in_acCOrdance with the
3.nnual Budge. ~ aCany ,~ne the amoum in fl~e Expense Fund is insufficient ~6r payment of such
· amounts, the Trustee 'shall transfer the necessary additional amounts to such Expense Fund from the
Surplus Fun& ltaen from the Operating Reserve Fund and then from the Maintenance Reserve Fund.
, Rebate Fund
The Rebate Yund istO be established by,~e_ Trustee and shall be maintained by the ~mstee until the
Trustee shall have received a Rebate Analyst s report concerning the computation period ,e~ading upon the
retirement,Of,,the:last outstanding Series 1996 Bonds and until any Rebate Amount in resp6ct thereof shall
have. been paid.
To: Mark Raymond, Esq. MoyJe, Lanigan,:Katz, Fitzg{From: Susan Evans 215~972-8302 6/26/96 13:12:20 Page 29 of 49
;Bond Fund ~
Amoun~ in the In~es~ Account ~d ~e P~c[pal A~ount of ~e ~nd F~d under ~ ~denmre will
~ u~ ~ meTmst~ :for ~ ~mt of ~d ~t~st on m~ S~es 1996 ~ndS. h m~ ev~t ~t mounts
~ ~e ~o~ ~ ~ ~gd F~d es~lishedn, for,'~e, p~ose of p~ymg' m~est' ~d p~cip~ on ~e Series
I~6 ~nds ~e ~uffic~gt:,for such pt.~ose~, ~e. ~ms~ee will ~fer fist ~m ~e hterest Accoum
e~ed for ~pa~t of ~est ~d ~ to ~e P~mpal Account created for ~e pa~t of principal
-such ~o~ ~s :~I ~ ne~ss~ ~efor f~st ~om ~ S~lus.F~d, ~en ~om ~e ~pera~g RescUe
F~d, ~d ~en ~om ~ M~t~mce Rescue'Fund. h~e event ~t ~e aforem~fioned k~f~s s~tl be
~ci~I pay ~e ~est or ~ipal com~g due on ~e Series 1996 ~nds ~en ~e amount ~ ~e
~t~e~ Accou~ ~d ~ P~cipa[ A~o~t res~cfivelY ~all be applied pro ram to pa~ents due on ~e
'Series 1~6 Bonds ~d ~e ~a~g mount due wi~ respect to ~y S~es secured by ~ account ~ ~e
~btSe~i~ Rede F~d s~ll be p~d ~Om such ~coufft.
Surplus Fund
On each january I, l~_.g~g January 1, 1997 (or as'soon at~er January 1 a.s the requirements set forth
in this sentence can be satisfied), as long as and Series 199,,67 Bonds are outstanding, any amounts in excess
of $10,000 in lhe Surplus ,Fund, after .giving effecl to_ an) reqUired transfers prescribed ?rein, shall be
,transferred by ~e TrUsiee to the Owner t'ollo~ing certilicafion that fine following conditiong!:have oc_curred:~
(l) the Bond .Coverage Ratio?as been met for the preceding Fiscal Year (as shown by ~ue Certificate
Co'verage); {2) pursfiant to the current Annual Bridget, the Bond CoVerage Ratio will (be met for the
current'Fiscal year, and (3) no Extraordinary Trustee Fees :and Expenses are due and owing.
During the .period-from the date of initial delivery of the Series 1996 Bonds, to and including
December 31; 1996, the .Bond Coverage Ratio, shall be calculated by multiplying the sum of (a) Gross.
Revenues deposited into the 'Revenue Fund during the period from and including , , 1996 to and
including De~ember 31, [I996 less Expenses paid during such period frOm the General E~-~ense Account
~and fro~ the Tax/Insurance Accoun(, the Maintenance Reserve Fund Deposit Requirement for such
period, .any deposit made m the Operating Reserve Fund during such period, amounts paid for Trustee
Fees .and Expenses, Rating Agendy 'Fees, Rebate Analyst Fees, Asset Management Fees and Social
Service mandgement Fees durKng ~uch :period by , and dividing the result by the Maximum
Annual Debt Service.
Investment of Moneys
The Trustee will separately invest and. reinvest any moneys held in the funds est~blisbed by .the
Indenture at hhe .request of.and as directed in writing by the Owner in Investment Obligations. Any
moneys held in the Bond rFund shall be separately invested and reinvested by the Trustee~~ as directed by
the Owner, in'investment Obligations as defined in the Indenture.
Event of Default and Remedies
Each oflhe following constitutes an Event of Default under the Indenture;
(a)
':indenture;
default in the ~due and punctual payment of any interest on any Bond issued under the
(b) - default in the due and punctual payment of the principal of or premium, if any, on any
Bond (wheltiet at maturity, by acceleratiofior call fbr redemption or otherwise); ~
(c) subject to ~ grace .period :provi_'sions, default in the observance o.r performance of
any.other of the covewhats, conditions or agreements of the Issuer under the Indenture; .and ~
(d) the occurrence of an Event of Default under the Loan Agreement. ~
.To: MarkRaymor~:Esq. '.Moyle, Lanigan, Katz, Fitzg~From: Susan Evans 215-972-8302 6126/96 ' 13:t3:20 Page 30 of 49
The :occurrence of a Determination of Taxability with respect to the' Series 1996 Bonds shall not
..constitute an Event of Default under the Indenture. ~.
Upon'the occurrence of an Event of Defaul~ described in (a) and/b).above, the Trustee ~.ay, and at the
,-~qu~t of the. holders of not less than a majority in aggregate principal amount of the ou~stafiding Series
19i~6 .Bonds shaI1, and.upon the occurrence ~of afl Event 6f Defa/~lt under (c) or (d) above, the TruStee, only
at the request%of the holders of.not:less than 100% of the aggregate principal amount of the Series 1996
Bonds th~n outstanding shall, by noficedelivere.d to the issuer and the Owner, declare the!principal of all
sach S~es '~I~ Bonds and the interest accrued to the date of such declaration due. and payable. Upon
.any such :acceleration, the ~Trustee shall immediately declare all payments required to be made by the
:O~mer under ihe Note and Loan Agreement to be immediately due and payable and shall also transfer ali
moneys from all other funds and accounts under the Indenture to the Bond Fund :established thereby.
Theown~s ora majori~, of the aggregate principal amount of the Series 1996 Bonds issued under the
'I~enlure have the right to direct, .in iCcordance with the provisions of law and, the Indenture, the method
and. place~.ofconducling all.proceedings to be taken to enf6rce such provisions of the Indenture.
The Trustee-can in its di. screti:on, waive, a~.y Event qf Default und~ the Indenture and the conse, quences
of such Eventof Default and rescind any declaration of acceleration of maturity of principa~t of and interest
onthe Series t996 Bonds and shall do ~o upon the request of the holders of at least a majbn~ in aggregate
:pri~:ipal-amount of such Series 1:996 Bonds then outstanding; provided, however, that nb ~ent of Default
i~hail be waiv~d.~ess prior to such waiver all arrears of principal and interest (other that.?principal of or
interest on ~ 'Series 1996 Bonds which became due andpayable by declaration of accelb-ration) and all
expenses of the Trustee in connection with Such Event of Default shall:have been paid or Provided for or
~unless the holders of 100% in aggregate principal amount of the Series 1996 BOnd~ then ofitstanding shall
'have consented thereto. In casd of may Waiver or rescission described .above, or in case any proceedings
~en by. the Trustee on accOUnt of an~ such Event of Default shall have been discontinued or concluded or
,dcterm~aed adversely to-the Trustee o~ the Bondholders, then and in every such Case: the IsSuer, the Trustee
and:the Bondholder~ shall.be restored to their former positions and rights under the IndentUre, but no such
~waiveror rescission ~shall extend :to any subsequent or other Event of DefaulL or imPair any right
consequent thereor~
'No .owner of any 'Bond shall have the right to institute any proceeding for the enforcement of the
Indenture or for the e~recution of any lrust or reinedy thereunder unless (a) a default shall h~ve occurred of
which the.Trustee has been given n6tice or is deemed to have notice as provided in the Indgnture, (b) such
-default shall ~ave become hn Event of Default and the owner of at least a majority ~ the aggregate
principal amount of the Series 1996 ,Bonds outstap~ dit.~g under the Indenture shall have offered to the tmste.e
keasofiabte op' _p0mmity either to exercise its enforcement powers under the Indenture or~ institute the
proceeding .~;.its own name, (c) such owners, have offered the Trustee the indemnity ~quired by the
Indenture; ,(d)i the Trustee for60 days after such notice shall have failed to exercise such powers or to
institute such proceeding inits own name of such owners, (e) no inconsistent notice is giveii to the Trustee
bythe ,holders ofa maj_~rity of the prin6ipal amount of the Series 1996 Bonds during sucl~, 60 day period
a/ad(f) the Trustee is giveri notice of such proceeding. Nothing contained inthe Indenture shall affect or
im~ the fight of any Bondholder.to enforce the payfiaent of the principal o£ premium, if any, and interest
on m~ Bond,.~daen due. -
..Any morays received .by 'the Trustee fol.~.owing an Event of Default under the Indenture and
acceleration of maturity .of the:Series 1'996 Bonds shall, after payment of all unpaid fees and expenses
ltae 'Trustee and of the costs and expenses resulting in the collection of such monies and the creation oI a
reserve for an~cipated .fees, costs ahd expenses, be deposited in the Bond Fund. Such amounts shall be
applied to pa3~any prinCip~ and interest.due on the Series 1996 Bonds.
.,To:. Mark:Raymond,'~.sq.TM Moyte, Lanigan, Katz, FitzgeF¢°~i Su~J'~i~"~i~'~ 2~5-972~830~ .... 6/26/96 "13:14:2~ Page 31 of
Supplemental.. Indentures
The Inderiture can be modified or amended without the consent of, or notice to
the 'Series 1996 Bonds issued under the Indenture for , one or more of the
of
_gra. n__ .ted tOor
~ddifioxtal reVenues, properties or collateral; (d)
mended, or any similar federal statute hereafter in
to the Indenture such
~of 1939,
lawfully be
A~et of 1939, as
and to add
Indenture Act
for the issuance, sale
· of the Indenture
Bonds to pay the
of the facilities io be
the payment of the principal
preserve
prejudice in ao.~
of
then
to
for
of the not
.In addififn, the holders of at least a majority of the aggregate principal amount of ~e Series 1996
· Bonds then outstanding under the Indenture can cSnsent to and approxTe the execution by th~ Issuer and the
Trustee-of such .other supplemenhal indentures as can be deemed necessary or desirable by the Issuer for
the purpo, se.ofmodifying~ altering, amending, adding to or rescinding, in any particular, any of the terms
~or p~rovisions ~ontained in the Indenture or ar/y supplemental indenturd; provided, however, that ~ no event
~ sh~ll the Indenture be amended without the wi'itteh consent of the holdei~ of all the Series 1996 Bonds then
..... ~outstanding thereunder to ~it (a) an extension of the: maturity of the principal of or the 'interest on any
such Bond, (b) a reduction in the i~rincipal amount of or premium, if an3~, on any such Bond or the rate of
interest there°n, or the amount .6f intekest pa.¥ab, le thereon, (c) a reduction in amount of any payment
· ~reqtfired by any sinking fund that can be aPphcable to any such Bond, (d) a privilege or priority of~any
· such Bond or ~Bonds over any other such B6nd or Bonds,~ (e) a change in the privileges or priorities of any
Bond.or Bondsover any other Bond or Bonds, or (f) a redu6tion in the aggregate principal :amount of such
Bonds required for con~ent to any such supPlemental indenture. ~.
Amendments of Other Documents ~
The Indenture provides that the Issuer and the Trustee shall, without the consent of 6r nOtice to the
.holders of the Series '1996 Bonds Outstanding under the Indenture, consent to any ~amendment, change or
modification of the .Loan Agreement, Note, Mortgage or Restrictive Covenants: as can be required (/0 by
the.provisions of the Loan.~eement, the Note, the Mgrtgage or the RestriCtive Covenants, or by the
Ind6nture; (b).for the purpose ofc~g any ambiguity or fomaal defect or omission in such documents; (c)
in, connectiOn with the~Project to.identify the same more precisely or substitute or add additional property
acquired with the procee3s of SUch Bonds; (d) in conhection with the issuance, sale and dehvery of
Additional Bonds ~/S provided in.and in compliance with the provisions of the Indenture to provide for
payments of additiorml :amounts and/or revenues sufficient to pay the principal: of, premium, if any, and
interest on such Additional Bonds and .such other changes as are necessary_ in connection with the issuance
of such Additional Bonds as shall not, in the opinion 6f the Trustee, prejudice in any material respect the
· fights of the Owner of the Series 1996 Bonds then outstanding; (e) to make any change ~tl?rein which, in
the opinion of Bond Counsel, is necessary to preserve the exclusion of interest on the Series 1996 Bonds
....... from gross income for federal .iht. omc taxP ~. Bses; or (f) in connection .wil~..any other _clam)g? therein that,
in the opinion of the Trustee, shall not preji~ice in any material respect the rights of such h~lders.
In all other circumstances the documents.can be amended only with the written conse.~t of the holders
~.~ofat least a majority in aggregate principal amount of the Series 1996 Bonds then outstanding. The Issuer
~05~26-1996 B2:OSPM ~ROM 91~076591789 P.02
the same shall become du~.
se~ by the Mortgage.
~Piedge to Trustee
xece, .. , .... , an.a .a!.l re_venues and
[ j ~ ~q~t io cnlolw..¢ m~ Ke,~trlcllv~ ~ov~nliLtlL~,
The Owner's obligations to repay the Loan shall be evidenced by the Note and
;Lim~ Ob ,!i~afions of Owner
~ ~.Thc Is~..uer ~cxp~sl.y a.a..grccs .that the .P.P.P.P.P.P.P.P.P.~_nal li .~.itity of the Owner and the members, omccrs and
i: ~e~e l°tm¢ ~ sn~.l :be, .s~.ctI¥ a l.. ,ab te!y hmi~d to ti!..¢ prO.l~rty encumbered by the Mortgage,
!/t~:~ec~, ircla, u_, ~'_P~_ ~? ~a _ .x:~_ e~,m?,eo? anLany' other co!lateral seyuring thc Ov~¢r's
.~l.,_.o~_,,~~c~ or u~.aer.me i~pm.. 11~. 2ssu~ .aha any asszgn~ of any of the Financin~
~ r ~ ' ~s,.~t. no.~?m~may not seek any judgment tora cg'liciency against thc Owz~ or any member
~a~'~r~ :~r r~.~_~_a ,p~,~wer._o.x.aml, ~o_r_ x? exerc,se .~y o?er .n..glats.or power under or by reason of the
Lg~y_~_.,~_~,~_? ~? .a~s. manen~ .ev~?enc ~m~. or i.see~.ng me Obllgatio~ o~f the Owner under any of the
~_~i~.~w-~n~_~_en_r~. ,~x any Su.~ ~s ?ought on.me ~ortgage as part of judicial proqeedings to foreclose
. ~ ~ _,.~ n oomz~_ea, m_ ~ $ _~ maa consumm a uen on, ana w~ll be and can ~ enforced only aga/ns~
. i :~°a~r~i cncun~.~ bY the Mort. gage, andany such other security instrument and the leases, rents,
;.,profi~ a~ _Ls.~ues'thcreof. and ngt .against any other asset of thc Owner or any member, officer or director
· ~.m¢ .~ st~u_ oe mcoms¢ ~o me assetsnna gcnczal cm~ oIthe O~vner Co~ not ~¢
~ecln~tioA of Restrictive Covenants
,.,~'~!~.e~_~C~._~'_cLo~__e~__.~ ..and agrees to .p.erfo..m~, .each a~.d .ev.c_ ~,,, covenant, a~.d agreement set forth in the
.remr~a Kestnctrv¢ t.~avenants, a SUmmary ozwm¢i~ ts set torth tn The Restrictive Covenants."
B5-~-199~ ~P.:~PM PROM TO 914076591789 P.O~
'Tax Covenant~
996 Bonds from
1
~e proceeds of
of interest on the Series
103 of the Code, and to
The Owner shall not lake, or omit
Series
.any
is" within the
Events,of Default and Remedies
F_ach of the followingconstitutes an '.Event olD,fault under the Loan Agreement:
(a) F~lure of'the Owner to make any payment under such Loan Agreement or the Note or
~Mongage when duc and payable.
{b)_ :~Except as provided in {c) belpw, failure by the Owner to observe and perform any
~a~ ?r-r~. lvi,?n~age ama ?,on~unua~. on ox. suc~n ranure for a pe~od of 30 days after notice thereof shall
~ mien g~v~n vy me issuer.or,Re 'li'ustee to tl~ Owner.
,o_n..r~ma .oI ..me o.~r .~nlamea ~, mi ~ ~.~ m~.nt or the Indenture or in any
~armsnea in connccuon .vain me'issuance of the ~¢nes l~vo t~onds.
(d) An.Event of Default under the Indenture.
the ;_Certain of the ?b,liga!i~-ons o.f tim ..Owner can be SUSl~. nded if by mason of force majeure, as defined in
Loan agreement, ~ owner is urm~le to carry ow such obligations.
d~E,on .thc _ac~fflera~ ~,on ofma?urity of?he S?ies 1996 Bonds upon the _oc:cun~nce of an Event of Defauh
.tm r ,.t~. ~na. enrm-e; au ~a~, ou~.~ payabl? under .the L. oan _Agreement and under the Note shall become
lmmeolately aue aha payaOle without notice or declaration of any kind.
., ..U n the occ . ence and continuation, of an E_v~t of Default under the Loan Agreement, the holder of
~e r~o. te can'ex .ercts,e, ~y. o.r~, o.r.more o~f~e follo..win, g m_medies: (i) declare all mounts payable un&r thc
.~,oan_ _ ~,ent ~ uno~ ,the,.N.,ot.e, to b~. ' .u~n.ed. iately d~ and payable, whereupon the same shall become
?/~m. ea_~ateiy 9uc a~?,Pa~/at~,le; iii) tt~-, oug~, its aul~y au~.,o '~n~ agen. E.have access to and inspect, ¢xami.c
'anq, ~axe cop?s o.~, me ?oo..lcs, .recoras,..aga ~a~oun.ts~,ot ~.e cr, vne~; .('di) exercise any remedy of a mortgagee
ana/.pr.secur~ party unacr me l.aw.s o.~ the S~t_e oz zion&; and _(iv) take whatever other a6fion at law or in
eq~ty.ca~., appear necessary_ or aeswabl_e to.collect the amounts then due and thereafter to become due or to
gree~nent or u~¢ Ke..$~t~ave Covenants.
Ongoing Di~dosur~
. ~TI~_.¢ ~.O!~ner v~, de.liver,, to the. d.th.e. ti g A~, ,en~ (a)?nn_ual statements of operations of the
~ m]ec3..iq) ?nnua~..r~nt..roa._s ~r me i'roject, (c) me annual budget for the Project and (d) audited annual
THE NOTE AND 'TILE MORTGAGE
~OW~r's · Obligations; Security
. .Note is secured by a first
t Owner w ~ssu~ upon certain Land,
to the property
colI~ter~l
he Mortgage
is contained in Appendi~ B,
ee THE NOTE
Loan Agreement,
:Payments
lxinci~]~Owner promises topay principal, premium and interest in amounts and at times sufficient to pay
ofand premium andhiteTrest, ifan3~, on the Serie~ 1996 Bonds, as the same become due.
ail, pa ,y~, vat~ th?em~e.r a~,,ass.~gn~%d to ~e Trustee as security for the Series 1996 Bonds.
~l~ .ctwner ~nml maice au l~Yments re~lmred 'by the Note directly ~o the Trustee.
'l~lor~g~e on Project
'~~o~n~:~ft~oI~ro~ecat. L,oan Agreemem. ,ne Mortgage includes, conditional collateral
f~h~leaauce ofProject, Compli~ee With Law, T~xe~ ~d Other Ch~rge~
_ _'.~i~ ~O~-n, er is. requi ~r~d at .~ts p~w~. ~. to ma~_' rain the Project in good repair, to comply with
?~_cmmemai r.eq.mrem~s appm~_', le.mJ~e ~va'93ect and to pay when due all faxes and other governmental
~~ a~a. c~rge~ m connecuon with the Project.
Lu~_~ ~ ~a4~m~er'~qum..mes-~ a..~ms,u~?r uncter worlmrs ~compensatxon law) workers' eomoensafion
.m~. l.n_e ~ Is requlreo'oy the MO ' age 'tO con~_nuouslv ~ 'nsur~nce
~ni~~~ns~--~ .~ag_~a~ bz~_u_s~s- Of like s,, ~ pha~.a?e.r., paying az the same become due all
~w=a~axga~eap~zn~.~V_m' ~ _mn?un_t ~,,f the Se~es 1996 Bonds. The title insurer is~
------------ -ce "x~t~ l~O-l~ AND THE MORTGAGE herein.
lhnm~ge, De~trucfio~ Condemnation and Loss of ~itle
~-.toss exceeas ~.uuu.uuu ,,~,,tm~.cc~ ~ ~me. ~ ~t:r~.?rmen c ..l~'tSownerJ.O prepay ~ Note m whole or in pm'Land if the darnaoe, destruction
I
~dRmn as pnor :~o su~ flamage, destruction, condem%~fion or lois'-.
FROM TO 914076591789 P.05
are less than $1~O00,O00_and. in ~ueh event, is not required
ge or Transfer,:ofProject
not s~u, u'ansxer or encurnOer its Pro~,,~ .w~mo~ (i) ~ ~nt of ~e Tms~, (ii)
~t not re~t in loss of~e ~cl~i~ of ~
or ~~ ex.pt
on ~e Proj~t ~r ~ Ev~n~
, 'Upor~ ~ ~~ of an event of default under the Mortgage, the indebtedness secured thereby
i:'becomes ~ly due' and payable and the Mortgage can be foreclosed.
THE RESTRICTIVE COVENANTS
w/Il ~n/s~ of~ S~5es'1996 Bonds, Restrictive Covenants relating to the operation of ~he Projea
~ by the Owner.and recorded in the Public Rex, orals of Paln~ Beach County, Florida. Such
~,c_?~_ve, C~..? .wil!, .a~_ ~I~Jo.~e' Proj .ect (or. and d _ut?2ng the_ "Qualified Project Period" for the Project.
, ~{~mah.ttod~.}'~o]ec't pc'nod' is clelmcd m.ea~h of the Restrictive Covenants to m~an the period ~ on
,~-~ q~ o.f?~s~ 1~2~' ~ona _~_ _,nam on ~ l~st of(a) th, ~ w~ich i' 15 y~r~ acr
(.tt~ ~ o..I.? ~_ o/the ?~s.'l 9..~ ~onds, ~) th, fi~.. day on which no lax-exempt private activit7 bond
~ssu~ ~w~ll~ .mfi~?c~ ~. ~ suc. h ~t~Oject is_ o~ng,.o_r lc) the date on which any assii~uce provided with
~pect w sucla ~roject miner ~ction. 1~ of the :United States Housing Act of 1937 terminates.
OI1}~ ~mstfi~tio_m- ~ ~fion to thos¢.dcgribed in this Secfior~ ~ also imposed upon the Project. See
appendix A.- "DESCRIPTION OF THE PROJECT- Acquisition oithc Project; RTC Restrictions."
R~ Ren~ Proj~t
:The'P~. j_~.-is ~ed .lobe 0_W~..ed, ~ .man,geol. and o _p~ted as a "qualified residential renlal project" as
.~su~,~ ~m~, ?such---- ~~u .~e~aon 142(d) ofth¢ Code. The Owner agrees, among other things, that during the
~ rrojec~.tenon- -
. . (a) ~ .Th.e Project _will .1~. owned, ~ and operated on a continuous bads as a residential
~ prS..j.m co.~lai~.' g. gve..~.;~ro..~rn?~ ~d m ~t~.e~a.~..b. ui~din~ or s_ _~tures, _each containing at least
one. a~,,y~g~mt amt ~~¥ ali oxwlatcn_c_on .tarn dweuing umts and facilities functionally rolated and
su~rdma2 meat~, ngct~ rig r~luimmcnts ol.sections 142(a)(7) and 142(d) of the Code.
.., (b) 'Ti? d~m. 1..1~..g u~i_'ts ~ ./he Project wi.Il consist of simi_'larly constructed units each of
:~-~mcrl_.contaim. s. ~ ,l~e. facili,'.ti~s for ~.. '.ring, sl .eepm.g, .e~ti.'ng, c.~.king :and sanitation separate and distinct
· 4rom ottmr~unlts, including cooiang tac~lmeseqmpped with a cooking range, refrigerator and sink.
_(~;) , _Non¢'_ofthe dwelling units in the Pr_ oject will at any time be utilized on a transient basis;
~..on.~'eo.l .Will oc usc~. a~. a hotel, ;motel, do .m~.'tory,.fralernity .house, sorority house, roow. ing house,
6p~rm, nm'stag nome, samtanum, rem nome or trailer parle or court/or usc on a transient basis.
~ .~ ~d).., Ex~ce~ f. or .d,,w,elling Un?s oceu~oied b_y resident manage~ or ~_~ perso~el, thc
~~g um m me rrojec~ wm ye rented or arm]able for rental on a continuous basis to persons who are
ES=2-~-l~::~'~B2:llPM FR~M TO 91407~591789 P.06
and the not g/ye .pref-crence to any particular class or group of
, as dcscr/bcd t~IOw:
~ ~Lower-Income Tenants
.. !'Pursuant to ~on 142(d)(1)(A) of the Code the Owner agree, among other things, during the
Qualified Project Period to:
least 20% to/ndividuals
~ median
'Applicable
any unit
it'
Tenant even
as the
~s of
rent thc next
however, that any unit of
tunit,is ,rented_
Obtain from each
· time th~
unit and
who is not a Lower-
aside for occupancy by
and the~ n&
and
! or
Series 1996
<Tt, mnts rexidin~
~Projec~
of the_Issuer, the Trustee, the Owner of the
Revenue Service to 'm~pec~ t during the
to the income of Lower-Income
F-Income Tenn~ts and provide the Issuer with a
(i) mi .
~ ~ i~., l.not ~ suni.eased, ~cept.wh~rc the
??, ~i z~.u~., oCth¢ subter~nt to quali~ as a
a mS ~._~_ ~v:e E.ov.e .r~.ts: (iii)tt~ Ie~s~ sI~t~
~rtxor, .au, y su~s_r~, ual vmlation of thc terms and
o: (A) any talsc or misleading statement or
~t~ as a L?.we.r-lncorn.e Tenant or in such other
~,~rst~ proy~de information..mt, u. im__d to recerti~
ary ox oc, c_upancy, ana (.iv} Lowcr-Incorn'¢
~y to enforce ~C R~rictiv¢ Cov¢)~-ts for'and
;eaeral Complim~ee
,,income : any a~tion that would; affect the exclusion from gross
if it '
to comply woUld
interest on the Series
Owner to cme such'~
~Repor~; Ce~fions
the Owner
income tax purposes of
necessary or desirable to cause the
During the Qualifiefl PrOject pariod tl~eOwner agrees to file with the Trustee an annual report which
shall contain the £ollowing:
(1) the number of .Lowcr-~eorne Units in the Project;
,'(2) the.number of dwelling:~urfits in the Project v~'ntcd and the number of units held available
for rental other:~ aSLower;Income unii~.;
(3) ;the;~ that the number of Lower-Income Units constitutes of the total number of
,units;
(4) <_ eertifical= of the ~ that the information contain=d in the report is tree, aecm'ate
xt co~.as ofthe.dat~ thereo~,-and -
"- (~) a cenifica~ of the ,Owner tha~ the Owner is in compliance with the Restrictive
Covcnants. :
Enforeem~nt ~'
~ m2~tesh~1 _p~o__~ any ~,at .,aw o. m e!j.m, ty ..~ .eiffo .t~ such provisions. The Restrictive
,~or~ sv. all_ .~cea~. ? _al~!y ~n'ce~..x?~n.. ,~et}.,~ :,r~. ul,.ting .~ pvo!untary non.-..co, mpIiance (including
i~ o s~a'?.;on a r~jec~-or.~.oz uq~ oy Cleea m ~zc!a- oI loreclosure) providcd certain conditions
'o~ .~.t~euse ol::pmceeas Il'om any st~.tl eveat are satisfied and none of the Series 1996 Bonds remain
~O:LITIGATION
.any w'q..y quesgo.ns or' _.ma.r?!au. y attex-.ts the validity of llje Series 1996 Bonds, or any proceedings_ or
~roa?~m. m~s r~latin~ ,o their issumace, sale:or &livery or that can materially affect thc refinancing 6f the
~ -- ~ is no.. tiligafion ~ or_, lo h~., ]mollie o_f .thc Ow~_ er, thre, at~ed against the Owner tha~ in
vy ._wa.~..y quesp, o..ns Or ~auy al:teots. ~-Ea~i.'.aity of ~ Series 1996 Bonds, or any proceedings or
msaenom ~atmg to me~r xssuaneeo sale !or ~eavery or mat can materially affect the refinancing of the
i~!]5-26-iS9602:14PM .FROI~ TO 914076591789 P.08
TAX TREATMENT OF THE SER1]~S 1996 BONDS
the interest on state and
."or federal
and the
· requirements couM
income tax:purposes
on which st~ch' non-
periodical
'?The Series 1996 Boncls.~
West Palm Beach, Florida,
the aforementioned
owners thereof for
federal alternative
and
996
g pr/cas to the public at
OID represents interest i,vbich is
/n the collateral federal
Series 1996 Bonds at a constant
the time an owner owns a
__~ taxable
tax
Bonds which are not
~ rules which
as to the
of Series 1996
..~.~, ,.,~..,,- The. law~ ~chBond: .Couns.cl is basing ~ir opinion is subject to chsnge by the Congress and the
_ __ m~ _ : _~ not be chart ed m a manner which w
~ ould adversely
affect the tax tmaunent of o~ ofthe~ries 1 , ,,
.p' ' 996 Bonds. See 'BONDHOLDERS RISKS hcre~
Inl~iition, in the opinion of Bond Counsel the Series 1996 Bonds are exempt from all present
~' p~rsonalpm~ ~xes oftheStat¢ of F10rid~.
I~6'%~',.d;'~~ ,._w~_..(~ ?_..,p~_ ~ o~ ~..~,?.,. ,,.o ~on~s. ~o. _s_p¢~u~ p~er~ of tho s~i~
· ~ . emp obli ations m~ result In col
~edeml :me om,. ~-- , - . , ,n ,. ~ . +.,,.. ~ . g .Y lateral
~ 'd~i~ti~ ~o,,;~o ~c~~~L~-.-.l~__an~_..ml,- l?~u,.,tu~oris, p.ro. pert~r_ and casualty .msuranca companies,
- ' - ~ - m ems, .aye? who may be deemed to
,,,~-.. ,~.., w,,a paS~lvc mve~nent income wmen
E5-2~S-1C~ ~2:lb-'PM I~ TO 91~0765917B9 P.OD
· ~op . Ky mese consequences.
TAX
DISPOSITION OF
APPROVAL OF LEGAL MATTERS
com'ImJr mSCLOSU
no..ia or .sen ;mc ~.en~s l~p.,~pn~s, ~d ~ Is~r ~II not pr0~ ~y
~ x~ ~ ~ve no ~mty .W ~e holde~ of ~e Sm~ 1996 Bon~ or my o~er
Lo~.A~~t ~ ~ ~p~ ~ S~iti~s ~d Exch~ge ~m~s~n R~e
~i~~ ~_~.5~,9~ 19}4, ~ ~~ (1 ~CFR ~ 240 ~ 15c2-12) (~ RMe"),
~~m[ ~?[ ~, m~nt oz ~9 nSt~= 0~ the Series 1996 Bon~ ~d~ by
· ~on~o~ ~ ~y ~en~ o~e~ of Senes 1996 Bo~s ~ a ~efici~ of
85-L:~5-1~B~ig~:ITPM FROM ~140765~178~ P.18
· Ti~ Owner, 'as an '"obli~,ated .ne(son' wim;~
bllowin~ information (ali m.defin&lbqow):
(I) Annual. Fimnciat Infonna-'don;
(2) Financial STatements, .if any;, arid
(3) Malefial EventNotiees.
meaning of the Rule, will undertake to provide *the
~e ~er ~y ~j~ ~e R~ Date
o~ F~ Y~ ~d ~e new
~e new ~n
[R~n Dme
if ~e O~
~ x ~,~,o esonas are Outstanding to the Trustee.
If Material Event (defined below w ' ·
· . . . .. ) occurs 'hilt any Series 1996 Bon
~all. rovide ma timel . . ds arc Outstanding, the Owner
P y mariner aMatCrial Event Nolie -
btiee c ~ the Trustee and the Issuer. Each Material Event
c,,, .a shall be so captioned and shall prominently stme the date title a~el Ct tom
' :a!~o ~sond~ - - .... , ........ aw numvers oi the ~enes
t~a, ne, r toprovide a:Material Event Notice ~urs .t ' ' . . , ..-,..
. p Uan to ~ preceding par h- ovided that
Trus so to ad . . pr of
re, s~ib~l~ti Iud° ~thsee lth~e~n aO~n~s~J~ n,o~t,c~o.~,i.~t~ a breach by ~ Tmsr~e of any of its duties and
__ es ___ _._ ~=~.A~t or Indenture.
rlsySTl~Jr~tga~L~e~hr~,Y.ear...~.e _tl~e_.:_C_°.n_tie.t~n_ g..?i_'sclo .s~..e C_,_o,v. en~.. t is ol~ra.tive, at least thirty (30)
_~--~-_~-; ;£-~fv-,-%.--.-~ .v;y,,V-~ "Yg~ ~0-me ?ya. er ot ~ ooagauon under the Loan Alzreement
~g ~.a,_,~.~U~l~ ~to~on ~ ~_cia{~ S,t,a~_~ts to each NRMSIR and SID, provided tha~ th, failurc
' ~~ I~~ sucll nouce-snail not consti~te a brc. ach by the Tdlstee of the duties and
· lalements,...~,.,, copy mereot-to each then eXisting NRMSIR and thc SID-
, zI any.
~.re~o~ ~ ,,~i~th~ ~.(1..0)' Busjm. ess..Days, al%f receipt of a Mat,~ Event Notice, send a copy
· ~ ...... u~ lvmnwipa~ .~e~unnes l~memalm~ i~oarcl, each NRMS~ and the SID, if any.
. ~.~nualFinanci-' '-" ........ n .a . ;:. u-,i~ vy mc ~rerner zo provme
- ' ~t ~mormallOll onol' Dclore 'rlle.['tepOTt Date.
~85-26-1~96 ,~:'18PM FROM TO 914076591789 P. 11
~_~zl'~Thenot otherwisef?ll°wingdefmedare theherein.defmitions of the capitalized terms used in the Continuing Disclosure Covenant
~pre~mc~ ~m~me~n~v~he~eeSne~a~l finaeean~te~n~rm,a, ti~°.n,~ (~w~.~c;h..,~osl~J.~_be~ ~ on fman?.ial
· ilala~va'th ~ to the Own~ to ' ~ y .: un ~, r-?':~,,es t up, AP )) or operatm
........ : , p v!c~'-- at least annually, of the typ~ mclucl~I in this Offia ~
'~ln connection with the sale o~ ' e ' :-,- . . /al Statemcnt~
:;includeFinanc~ S~iements. f th Series 1996 Bonds, whmh Annual Financial Information shall
. ~ '~'t~, s.u~ au~tcmg C~lXl/.le~ pUOllC accountant.
:"~~ Event" means any of th~ following events, if material, with respect to the Series 1996 Bonds.
ti) ;Principal andintcrest payment delinquencies;
:k~) Non-Paymean related defaults;
(iii) ~Unschedulcd draws on debt service reserves reflecting financial difficulties;
~iv) :Unsch~uled draws on crexlit c~ancements mflecl~ financia/difficulties;
~.(v) :~$ubsfitution of credit or liquid/ty providers, or their failure to perform;
(vi) ,'~ ~Advers, t~x opini°ns or events affe~-~ing th~ tax-exeanpt smms of the Series 1996 Bonds;
(vh') ,Modific~om torights of holders of the Series 1996 Bonds;
--- (viii) Bond calls of the Series 1996 Bonds (otlmr than scheduled mandatory sinking fund
redemptions);
(ix) ,:Defeasances;
(x) .Re, lease, substitution, or sale ofprop~3, securing repayment ofthe Series 1996 Bonds; and
(xi) ~ Changes.
"~ ~v~nt Notice" means written or electronic notice of a Material Event.
., . ,, ~a~mmge ~,ommlssion wr me purposes relerrec[ to in the Rule.
"SID"means 'a state ,information depository as operated or designated by the State as such for the
~.purposes refen~ to inthe Rule.
85-26-19~6 ,B~:lDPM ~ROM TO 914076591789 P.12
As of' the da~ o£.~is 'Ofiic/al Statement, (l)thc SEC has recogn/zed the following ent/ties as
loomberg _NJ[~ R.epositoFies
O.'~Box ~
The Bond Buyer
S_ciq_ _ndary Market Disclosure
.395 Huron Street/3rd Fl°Or
New York, NY 10014
Interact address:, Disclos~uller. com
Phone: (2~ 2)807-3514
FAX: (~ I2y)89-9~.82
51~5 .un.i.cipaldSecurifies 'Disclosure Ar'cbOe
~ Mmn S~e~t
Hud~n, MA 01749
Phone:(800)580-3670
Public Finance Information Center
.99 Church Street
New York, NY 10007
Phone: (800)339.6306
F~:(212)~53-1460
~ (2)no SID :has been created for the State of Eorida.
~ ~ (202) ~om.~..~imfle ~r~ ~ reqt~.~ang Document
-.-,-~-.~,-,t,~uc~ ~.~,~n= ana. me trus~ to cm 1o such, c ' ' - ·
: P.. ~ m moas oi Imormanon transmission
,b~ requ~te~ or re~x. nm~ncled by the designated recipients of the Owner's informafiorr as shall
I ' ' ~ ' ~ . . ' ' - ·
. immediately once the Series 1996 ]~)~tl; '
· - no Ion er are Ou dm
.Thc Con ng Disclosure Co~ or an · ~. 'tstm' '
P y ~ on s 1996 B~ rov~
.. ve pro dea no, ce or.an ,canc 'o .... ' - d. eU the Owner sh U
..... · ~Y .llati n of the Contmum D~sclo
theft exi.~n~'l~r~qID ..,a +~.. ~v~ ;~___ -~_ ..... ~ ~; . ~ g $11r~ Covcnan! to each
._the cons-~'-~-~ser~t ~of ...... thc Sc-ties'~' ~1996"~Bondholders'°~" ~any, butlneonl~°nanUm~u la~losure, . t:o~tc-nam may be amended without
r of the . . ~ Y thc Trustee and. the
, ~ on.,thc delivery b the Owner to
· . ~ sel to the effect that such an arne
· . y m-'Yect the corn hance -of the Contax; · '
and fla~ Owner va · - E . umg D~selosure Covenant
by th ~ Rule; provided that the Trast ~ ·
· . ee Shall ·have ,rov~ded noti '
. of the amendment to each th,-,, ,-~o,~-,,- ~,~-~or~, __.,.,:_.~ .... P ce of such delivery and
..- ~ ,-,~,,~,-~,~ ~u am ngms aha remext/es ovidea b
Loan Agreement upon ~h~ ~ ofan 'Event of Defaulf' ~1~. .y. the
~._ _. shall not apply to any such failum. Neither
~5-2E~-Z~'O2:2~P~ 'FROFi TO 9&407~5957~9 P.&3
-whatsoever to ~fforc,~ the Continuing Disclosure Covenant.
take remedial act/on to
; however, any action to
be pursued only in accordance w/th the provisions
RATING
· - : ,~'igA.,..~.L"'E-~?~' L~?!~?.n. o~,.m.e ,~c.uraw-~u, ,~o.mp.~¢s "S~d a Poo~s".
~ & Pools ~u~ ~s.~m ~'~ m"W dem~.e relive mv~nt q~fi~s of bon~.
~~ ~l~n ~ ,si~~ o~ &is ~g.~ ob~ned bom S~d & P~r's. The
~~-..d~L~121~_~ ~.}~ ~g ~u ~,m~n~ed for ~y ~ of ~e or ~at ~e
Y Z P ors. ~ s~hdo~
Poor's .~iil ~ surveillance on the Series 1996 Bonds for which it will be paid an
:~surv~-t~... its.surveillance act/vities include requiring p~iodic reports on the Project and their
UNDER~G
: ~ .at a ~~ ~ P~m. ~5~ jn~ ~ .~[e~tem ~11 ~ ~d a f~ of $ for i~
~~~~ ~~s -o~u~a?on ~ me ~.~a P~c~! A~ment to ~g ~livc. of
.~~ ~1..l~i~~! a~gi~ff~[ ~e Sg? 1996 ~nds a ~ pubic off~ ~ces
~~--~ ~ ~ ~? ~?~oq o{ m, pm~s.. ~, Und,mte~ ~ offer-~ se~ Series
MISCELLANEOUS
a~r.~e~..rn~em ?et~ve~n the Issuer, ~h¢ Owner or the Underwriters and ~¢
05-26-1996 02:22PM ~ROM TO 914076591789 P.14
~,This Official Statement has been authorized by the Isiuer and_a_~proved by the Owner.
APPROVED:
C;/"]P COVE, INC.
CJTY OF BOYNTON BEACH, FLORIDA
BY~layor
By:
~0~-~6-1~96 O2:22PM FROM TO 914076S91789 P.I~
APPENDIX A
DESCRIPTION OF ~ PROJECT
~UN ~6 '96 W~:45PM Sl~T .BY RITTER 'EICHHER & MORRIS
P. 4?/54
i
APPENDIX A
DESCR/FIION OF THE PROJECT
'The lo, owing contains a brief description .of the Project.
'rbe Pr°jec
~Clipper Cove Apartments (the ~"Project') is located at 1500 Southern Cross Lane in
BoyntonBeach, Florida and consists of 25 garden style apartment buildings containing a total
of 384 renta! units. The pwpeny was consU'vcu~d in 1987 for multifamily u,~. The unit mix
includ~ 48 OlaC-~, olio-bath llriiLs each conrainin..v approximately 734 square feet; 56 two-
.bedroom, one-bath uni~ each containing approximately 878 square feet, and 280 two-bedroom,
two-bath units each containing approximately 939 square feet. The buildings and improvements
.are loeate, d on and .tbe Project includes approximately 53 acres of land. The buildings contain
approximately 360,888 .gross scgaare feet a~I approximately 346,522 of rentable apartment area.
The exterior .of the buildings is wood frame covered with vinyl siding and sUicco with
windows accented by canvas awnings. The property is surrounded by a ring road which circles
the property and is designed ~to decrease traffic through the parking areas. Site amenities
illclude, ~ lakes, two S'wimmlnE pools, a clubhouse and cabana, four lighted tennis courts,
:four outdoor.lighted racquetball courts, a lighted volleyball court, jogging trail, playground area
'and car Washing and v~ area.
Aparmacnts are ~dividually metered and eqtfippod with central air conditioning and
hearing, wall to wall carpeting, refrigerators with ice makers, an electric range/oven, a
:microwave even, a dishwasher, garbage disposal; washer/dryer hook-ups, walk in closets and
ceiling Pa~s. ~'
Project Management
The Owner emcrcd imo a Property Management Agreement with Property Asset
Managcmi~ of Florida, Inc. '(thc "Manager") cffec~ January 1, 1996. The Manager has been
enga~xl .in the. manag~nt of multifamily reside~a~ re, rs! projects in Florida for 18 years and
currently-manages projects in sixteen states. Thc Manager has a staff of more than 1,200
employees. The Manager currently manages approximately 10,000 units, of which more than
5,000 receive government assistance-and the balance arc market rate rental units.
The initial .term of thc Property Management Agreement with the Manager extends to
December 21, 1996 and, under thc term Of the Property Management Agreement shall
automatically renew every year unless termmatcd at the option of the Owner or the* Manager,
but will not ~xtend .for more than a total of five years. Either thc Owner or the Maimger may
terminate ~ Property Management Agreement at any time on 30 days notice for any reason.
A-1
L:~RAS~BOYNTON',LF~DIX. June 26, 1996
JLIH ~5 ~6 '8~:~C~ ~NT BY RITTF_J2 EICH~E]2 & NOPJ2IS
~The cun~ Property Managemen~ Agreement provides ~t, for the tim year, the
Manager wJll'bc paid ~,% of the gross .collected revenues of the Project and, thereafter, ff the
Property Man~geme~ Agreement remains in effect, the Manager will' be compensated on the
basis of(i) a fixed fee to be determined after the end of tbeflrst year plus (ii) 2% of projocted
gross COllected .revenues-subject to the limitation that the 2 % of gross collected revenues not
, exceed :the ~mouat payable as a fixed fee described in provision (i).
Duties of the Manager under the Property Management Agreement include leasing,
collection~of rents, cnforc~ment of leases, maintenance and repair respons~ilities, payment of
operating e~q)enses, preparation of .budgets, hiring and supervision of propen2 personnel;
m~in~inj,_n~ O1XC~g ag,~ilnts; boOP, P~epillg ~ tenant rchfions,
,Asset .Management Services
Cornerstone :Housing Corporation ("Cornerstone") will pwvide asset ma~gement
services for the Project under the terms .of an agreement that will extend for so long as the
Owner owns _the Project or until terminated by mutual agreement of the Owner and
.~ne. Under such agreement, Cornerstone will act as a liaison with city, staxe and local
-age~c/~,/will ~ Project operations, oversee Project financial affairs, mon/tor compliance
with ,income guidelines, the Restrictive .Covenants and the LURA (defined below)., negotiate
management agreements, .imPlement marketing a~ operating plans and budgetsand other
services as requested by the-Owner. Pursuant to the agreement with Cornerstone, ~ Owner
v~Jl pay a fee,m Cornerstone equal w 1.25% of the Gross Revenues of the Project for such
Sodal .~ce.s ~Oversight and Management
Housk~g P~hip, Inc. (=Housing Partnership") will provide social services and
management ~at ,th~ Project fl~rough an agreement with the Owner. Such services will be
provkicd through a program referred to as th~ ~Campus for Living" program and which includes
working-to encourage cooperation among the Owner, thc property manager, thc tenants'
association and community service providers to crea~e a comprehensive and supportive social
services program. Through the 'Campus for Living" program, Housing Parmership will
encourage or provide such services as health care services and progrzm~, family ~ud social
services :programs, ~planned recreational programs and services, educational services including
tutoring and :after school ,programs, economic development and job training and phcement
programs, a tenants' ~association and special services for the elderly. Pursuant to the agreement
with Housing Parmer~hip, the Owner will pay a fee m Housing Partnership equal to 1.25 % of
the .Gross- Revenues of.the Project for such services.
A-2
L:\RA~OYN'I'ON~-'h~PPi/NDIX. Suuc 2~, 199~
· ~ ~6 '96 B3:46PM SEb~ BYRITTER EICHMER & NORRIS
~ii '~elui~ifi°n °f the Pr°j~t; RTC :Use Restricti°ns
P.44/54
The Project was 2~ufred by the Own~ in December 1995 from the ResolUtion Trust
Corporation CKTC") ~ fl~ Affordable Housing Program as a result of tl~ submission
ms~e ~ the RTC in .~u~ ~mmer of 1995 by the City, in conjUnCtion with Cornerstone and
U~ute~ ~he terms ~of'the proposal subn'dU_ed to thc RTC, the Project, was
~ be acquired fromfl~e RTC bytbe City and reconveyed by the City to an entity to be created
m~' conUoll, xl by Comerswne"and :Housing Partnership. The RTC accept~ thc proposal, the
~ assi~ its right to aatuirc fl~c Property to the Owner and, in December 1995, the Owner
purchased ~e Project from the RTC for a purchase price of $9,300,.000 of which 95% was
~ by r~e RTC and 5%was'loaned by The En~rprise Foundation. In conn~tion with the
ap~on'by the City: to the RTC, the'City, Cornerstone ~nd Housing Partncrsl~p entered into
a ~ of Under~ndi~dated.August 3, .1995 with respect to thc owr~rship and operation of
:~ PrOje~t, if the app~ wt~re success~ ara with respect to certain benefits accruing to the
par~ipafion in thc acquisition of the Project. The City, Cornerstone and
the application were successful, they would enter into
Parmership
forth ~ mrms ~of their ongoing relationship with msp~ct to the
of ~he City was ~cccpted by the RTC, Cornerstone .and ;Homing
iss~ ~of ~ 'Ser/e~ 1:996 Bonds, enter into such Definitive A~eemcnt.
the .City's concern for
is m be in ,effetr for a
thc RTC and
the requirements ,of the Definitive
The Definkiv¢ Agreement. among other
in:lieu of ~x~ to the City and ;that 28
the ~ (or any subs~tuem own~ of,the Project)from ~
Inde~m-~ ~:is .in effec,~ will be that mnount distributed m
the Owner is not to
.Yom the
: Owner
prior to the time of
The Definitive
inthe
of the
toa
assum~l by the
that the Owner
flow received by
as the
such Consent.
. As :a condition.to ~,~n~fer of the Project, the 'Owner entered into a Land Us~ R~stricfion
~ (the "LURA") dat~ D~ 18, 1995, with the RTC. The LURA states that th~
covenants, reservations and restrict, ions containexl the land
;for the bemfit of RTC and its sur~so~, and pa~s to and are ' heirs,
assigns and successor in.. __title to the Project. The LUKA the term of the
LURA, ~ Proj~r willbe ma~ a~ multifami/~
to matte continuously available for occupancy by Lower-Income ~nits
(50% of.~c wtal mzif~) of the Projea of which nnit, O
~ be mad.-available for occupancy by Very Low-lncom~ Families, ;
A-3
L:hV, AL~OY~O~P~IDIY,- Suo~ 26, 199~
~LIN?EG "gE 83:47PM SENT BY RITTER EICHHER & NORRIS P.45/54
The LURA defines "Lower-Iucomc Families' as families and individuals whose annuaJ
~.'~omes do ~ot :~-80 percent of arc~ median income and "Very Low-Income Families~ as
'~cs anti individuals whose a~naj incomes do not exceed 50 percent of the area median
The ~LURA also restricts the amount of rent which can be charged to Very Low4ncome
Families and to Lower-Income Families for Qualifying Units.
Thc :rent charged .for Qualifying Units occupied by Very Low-Income Families cannot
exceed the maximum rent for such purposes as established by the RTC, thc Agency or thc
Secret, Such maximum rent shall not be greater than 30% of the adjusted income of a family
whose income equals 50% of the area median income.
The rent charged for c?~iqying units occupied by Lower-Income F~cs other than the
Very Low,Income Families .~hatl not exceed the m~imum rent for such purposes as established
by the RTC or the ~ or the Secretary. Such maximum rent shall not be greater than 30%
of the adjusted income of a family whose income equals 65 % of area median income.
For the purposes of the foregoing three paragraphs, thc following definitions were used
in the LURA:
"Agency" means the State Housing Fir~nce Agency or any agency, corporation or
.~authority of the United States government that normally engages in gtivities related to the
.preservation of ~ffordable housing which is a successor to or assignee of the RTC.
'Qualifying Unit"means a unit that is rentvaI to a Lower-Income Family or Very Low-
Income Family and is used in complying with the lower-income occupancy requirements
~ above.
"Secretary" means the Secretary of Housing and Urban Development.
There. tm of tt~ LURA extends until the later of 40 years from thc date of the LURA or
50 years from the date the Project was initially occupied as mulfifamily housing which
,,~ occun~ in 1987. The term may end earlier, however, under certain circumstances
such as involmmu-y loss of the Project as a result of fire or casualty or upon an involuntary loss
,:caused by.Seizure, condemnation, foreclosure or deed in lieu of foreclosure of a mortgage or
~ of mm securing a :bona fide loan from an institutional lender.
: ~Capital Improvements
....... , Rehabilitation expenditures equal to $I00,000 arc proposed by the Owner which will
~ limited exterior ~, repah-ing gutters, making certain rop~ to fencing and repair
Xcn~i$ court surfaces. Bond proceeds in an amount sufficient to complete the above capital
...... ,improvements will be deposited inW thc Project Fund created and held under the Indenture.
A-4 L:~AL;LSOYNTON~LEG'~,~.PP~DI~. JUn'" 26, ]~)6
.~:~?~f ' ,~B~Ff -BY :.R~TTER EICNNER ~ 'MORRIS
P.4~/54
An i~depenit~I appraisal was performed for Nevander Asset Management, Inc. at/h~
request of the R~sol~ 'on Trust.Corporation ( RTC ) with l~,spect to/he Project. The Owner does
not accept.rc~pons~t'y for/he .accuracy 'or complctencss of/he information set forth under this
, .-subhe~_~h~. Thc ~ re-.pon ,,vas dated May 3. 1995 and was effective on March 30, 1995, and
es6mai~ ftmI, as of~lh~ ~vc-date oflhe appraisal, the market value of the Project, in fee simple
:iitle.and in ,,as is' ~ was $17~000,000. Such valuation was based upon estimated values for
,Ihe Project which w~re csfimat~ ~o be between $18,100,000 (based on/he cost approach) and
$ I6,500,000 (bas~xl on 'the. income, approach). This appraised market value assumes, among o/her
~, flint thc mark/:i/ngtime for sale of flue Project ~d. i1 be up to 12 mon~, adequate mark~
~effortsand that reazonablc ~ rates are available during the sales period. No aSsurance can be
given/ha~,$t~ ~- ~,~'uratety ~cpresenr~d the fair market value of the Project as of its dale, and
since maiicct cOnd~ons may have changed and the income of/he Projcet may decrease due to
increased.levels of lower-income ~cnanls since the dale of ~he appraisal, no assurance can be given
that :Ihe appraisal cunently.represents the fair market value of the Project. Owners of the Series
1996 Bonds would ~hav¢ no l'ecourse against thc finn that prepared the appra/sal in the event the
appraisal' is iucon~:t.
-Enviro-menial ~~s
A Phase I environmental si~e assessment dated June 9, 1994 for the Project (the
"Report,) was conduci~-at the reques~ of the :P, TC. The Owner does not accept responsibility
for/hc accuracy or ocanpP, tcne. ss of thc information se~ forth below under this subhcading. Thc
Report found .no pas~ or present adverse usagc or cvcnts rclatcd to the Project that would pose
an advcr~ el~ironmental impact W the Project sitc, except with respect to an irrigation system
used at fl~e projecx wi/hmu a penniI from ~ South Florida Wa~cr Managcmcrn Disuict.
,Owners of/he,'Sefie.s 1996 'Bonds would ,have no recourse against ~he finn that prepared thc
Report h the, even~ ihaI'fl~e Repori is incorrect. A compleu; copy of the Report is on file with
the ..Underwrites ~lhe Underwriting Period and with the Trustee foLlowi~ such period.
Market
A maflax s~ was ~ for.Corners~orie by Howell Associ .ates, Inc. dated April
1996and is summarized below. The Owner does not accept responsibility for the accuracy or
-completim~ss office infonnafion ~-for~h Ulvter/his-subheading. A complete copy of the market
analysis 'will be on file with.the-Underwfimrs ,,duril~ ~ Underwriting Period and with the
Trusu~ folk~wing such p~l'iod.
As of .l~sr_~ 129. 1996. strong occupawy-levels were ~ecorded at ali of the Boynton
Beach rental propellies excel~ the Project (new ownership and managemen0, The Vinings a~
Bolmion Be~:h (r~ew consuucfion), Ashley l~ke Park .(new management) and the VillaS at Cove
Crossing, (n~w cons~n). Thc Villas aI Covc Crossing is comparablC in that it includcs
JUN 2~ ':~ ,03:48PM SENT BY RITTER EICHNER & NORRIS
P.47/54
.fix:ome m~tric~om sim~ to Clipper Cover, Rental activity at the Villas has filled th~ one ~nd
two bedroom -~its, with a waitin~ list.
TI~ ~oj~'s market rate rent levels are on the lower end of the market. A r~nt analysis
,of-~ PrOject's competition indica~.s ~at fi= adjus~l rental range and medhn rem as compared
~wi~ flu: subj~ property is as follows:
Per Unit
Onc B.edroem
Rental range: $630-690 .70-1,07
Media~u rent: $652 ,87
Project market rent: $625 .78
Two Bedroom-On= Bath_
Rental range: $673-$775 .63-.84
Median rent: $716 .72
Project market rent: $690 .74
Two Bedroom-Two Bath
.Rental range: $710-$835 .63-.84
M~lian rcm: $754 .72
Project market rem: $735 .74
Parsuam w the LURA, 30% of the aparunents, or 115 unks, am se~ aside for homcholds
· ~o~ ~me ~-l~s ~ 80% of ~c ~a ~ (low ~cmc). ~o~ ~%, or 77 ~,
~ r~ for ~ who ~ less ~50% of ~ ~ea ~ (vc~ low ~ome).
~:~ ~~m ~ ~ low ~m~ ~low $26,~ m $38,~ ~ ve~ low
.:~ $16,8~ w $~,~0, b~ed on ~hold sk~. h ~difion m ~e re~on ~posed by
~ L~, ~,~t m ~ ~fficfiom ~pos~ on ~c Proj~ under ~e ~ U~'~icfion
.~.~ ~~r 30, 19~ (~ ~Pfior L~') which ~ ~ eff~t wi~ reset
:W.~ Projca ~ , 1997, ~e Project c~y ~s ~ overa~ ~)~m
x~n of ~2~ (w~& ~ ~ m 150~ of~ m~m ~ome for ~ West p~lm ~h-
~ ~0~ ~O~ ~O~ ~~ ~)- ~ fo~oW~g c~ ~mm~S ~e ~ome
~ffi~om ~ ~y p~se~y ~lym C~pper Cove ap~enu.
A-6
Li\RAE~ItOYNTOIq[LF~APpENDIX, Jm~e 2~. 1~6
1
,I
'1
1
Income Restrictions
Affor,~bility of the very low income units, when factoring in estimated milkies, indicates
that the react levels are on the upper end of the income restrictions. The market analysis s~ts
forth the roi:lowing analysis m summarize the affordability of the rents for Qualifying Units
occupied by Very Low-Jncome Families.
TABLE 2
Affor~b~ of the Very Low Income Rents
.One Be. droom
~M'~nim~m I]~COX]IC
Rent $460
Total $500
~= $17,143
.35
Two Bedroom/one bath
One to two persons $16,800 to 18,200
Minimum Income
Rent $518
Total $57:3
TW° B~roongtwo bath
~= $19,644;
.35
Minimm:n Incolne
Rent $518
Total $578
$578 x 12 = $19,817
.35
$16,800 (for a sing~ person) and $19,200 to $24,000 (based on famuy mz~ mr xamums ox u,~
A-7
L;iRAE%BOYNTOI~LEGk~PrdqDIX, ~ 26. l~g
~TLtR ,~6 "~6 03~4~PM SERT ]~Y RTTTER '-E~'C~'-R~RR~[s P,4~54
m fora pertain). For ~fio~ inf~oa mh~g m ~e L~, ~ "Ac~mon of ~e
~j~ RTC Use ~mo ~ ~ Ap~ A.
Accordi~ ~ ~e Issuer's pe~g offi~, ~: new r~ ap~ent ~mplexes ~
~y pro~ss~ ~m~fion pe~ ~ Boy~n ~ach.
.!
1
A-8
L:~A]~BO'YNTON\LRG~APFg-ND~- Sum~ 25, ]~
OB:4DPM SENT BY RITTER EICHMER & NORRIS
P.50/54
APPENDIX B
PRO FORMA FINANCIAL PROJECTIONS
1 'I~ pro forma operagng and d~bt service coverage information preseimxl in th~ following
'{ ,.tables is based upon unaudited information for the Project for the months of Janua~ fl~ough
: 'May, 1~- The Owner has reviewed the assumptions used with respect to the income, capital
expenditures and expenses of the Project and, based on its knowledge of the. Project and its
'; operations sin~ acquisition, has found such assumptions' reasonable; however, the Owner did
{ not pa~cipal~ in and makes no representation concerning the projections, h should be noted
~ fl~Ihe openI~ resul~ for the five month period from January through May of 1996 used to
fiuancial projections reflect % occupancy by ¥¢ry Low-
prepare
i~me F~mi|ies % occupancy by tenants whose
income do~; 'not exceed 150% of the ama median income at market rate rents, and
upon the l following
rates].
-~Proj~ons for
per
OF
f ratcs of 14.0%;
%; annnal
social services fee
$250
OPERATING
Th~s~
page hereof.
been prepared
in COllfOrl~_ n_nc,~
with the tuidelincs _and
shown on the front cover
'Prertminary; sabject to change.
B-1
Iz\EAE~OYNTON~F=~'XAPPENDIX. Iur~ ~.g,
05'26-1996 02:2~PM FROM 914076591989 P.I?
~PPEND~ C
SUMMARY OF
rile INDENTURE, LOAN AGREEMENT, MORTGAGE AND RESTRICTIVE COVENANTS
JU~ 86 'gE 03:50PM SENT.BY RITTER ~iCH~ER, & ~ORRIS
P.5,?./54
PROPOSH~ FORM OF OPINION OF BOND COUNSEL
APPENDIX D
[For review only--
camera-ready copy to be provided]
City of Boyr~n Beach, Florida
Boynton'Beach, Florida
p~: $ City of Boynton Beach, Florida Multi-Family Housing Mortgage
: l~venue B~nds, Series 1996 (Clipper Cove Apartments)
Ladies ~ Gentlemen:
We have acted as :bond co-un~el in con~e.x;tion with the issuance and sale by the City of
Boynton Beaah, Florida (the "Issuer") of its $ agg~gate principal ~mount Multi-Family
Housing Mo.ngage P,~erae Bonds, Series 1996 (Clipper Cove Apartments) (the 'Bonds"). The
Bonds ar~ issued purstmnt to the Constil~tion a~d Laws of the S~ate of Florida, including
.particularly Article VIII, Section 2 and Article VII, Section 10(c) of the Florida Constitution
(collectively, the 'Act'), a resolution adopr~l by the Issuer on , 1996, and an
Indenlm'e of Trust and Assist of Mortgage dated as of ~, 1996 b~tween the Issuer
and The Bank of N~ York, as tm.----~ (the 'Indenture'). All terms used herein in caPit~li?ed
foIIn ~ no£ otl~rwise ~ h~l'¢in shall have the ine.~nings ascrib~l thereto ill th~ Illd~nture-
TI~ Bonds have been issued for the purpose of making a loan to C/lIP Cove, Inc. (the
'Borrower") for the principal purpose of providing funds to enable the Borrower ~ refmanc~
a mulii-family t-esidential :housing facility all as further described in the Loan Agre~ment dated
as of__ 1, 1996 between the Issuer and the Borrower (the
As ~,lecllrity for ~ payment of the Bonds, the Issuer has pledged and assigned to the
Tn~'tee ~ of its right, title ad interest in and to (i) the Agreement (other than certa~ rights
the Issuer to reim~ent and indemnification and certain other rights thereunder), iii) the
Promissory Note dated ~, 1996 (th~ ~Note"), issued by the Borrower W the Issuer, (iii)
the Mortgage and Security Agreement, dated as of ,1996 from the Borrower to the
~ pursuant to which :the Borrower grants the Issue~ a~mo'--rtgage on and security interest in
cer~i~ ieal and personal property in order to secure ~mou~ owing w the Issuer purS~rtt to the
Agreement and the Note and(iv) the trus~ funds held by the Trustee under
In rendering the opinions set forth herein, we have examined (i) the ~solution of the
Issuer dated ~, 1996 (the "Resolution"), (ii) executed counterparts of each of the
Agree. men~, ~ Inden~e, the Mortgage, the Restrictive Covenants and the Note and (iii) other
D-2
~ '8~S ':'~ tB.~:'5~ SEhT BY RITTER EICHNER & NORRIS P.53/54
I
~fications, agreen=nts, doc~men~ and opinions of public officials and otber officers and
~~ves ,of r~ various parties participating in this tramaction.
~'w qaes~m of fact material to our opinion we have relied upon representatiOns of the
'and the R~tricfive Covemnrs and upon omer cerancauom, agreemenu, ~ ,
:~lm'l~ge ~ . . vari6us parties
m~! opinions of public officials and other officers and representatives, of the.
,~alillg in this transactioll, furnished to us, without under,rig to verify ,?1~ ~,ma~me~ b.~
..and .insets, the authenticity ot documents suonuttea as ongnm~
o~iginllsof docnmelltS submitled as copies. We have ftltther assumed file due authorization,
enmmion,.,mathenticafion 8ha deEmery, as applicable, by the Trustee and by the Borrower of all
doemnenm'to which either.or both thereof are a party.
'? opinion shall not.be.deemed or treated az aa offering circular, prospectus or official
~ g:~md is not intended in any way to be a disclosure document used in connection with
?the sale or deliveryof the Bonds.
The opi~ons set forth ~ow a~ expressly ]imi~i to, aad we opiv-e only with;respect to,
thetaws of R~e Sta~ of Florida :mc1 the federal income tax laws of the United States of America.
~ upo- a~l subject-to the foregoing, we are of the opinion as of the date,hereof and
nnfiet existing law, as follows:
1. The Issuer is duly created and valklly existing as a public body corporate and
polil~ purmmit to the Constitution .~nd I~aws of ~e State of Florida, with the power to enter into
tl~nlau~ ~ the Agree~nt, perform the agreements o~ its part contained filerein and to
issue ~e ~-
,-2. TheResOlufion has been duly adop~d by the Issuer and comtitutes the valid and
b~rlinv agti~m of tbe Is~er. Tim Indenture and the Agreement have been duly authorized and
exeeu~d.by the Issuer and corette valid and binding obligations of the Issuer enforceable
awain~ the Issuer in'accordance .with ,their terms. The Indenture constitutes a valid and binding
az.4~ tolhe Trust~ of the Issuer's rights under the ~ent, the Note and the Mortgage
(exc~t for ~fights rcscrvefl to the Issuer in the Indenture).
3. The.Bonds have,been duly authorized, executed and delivered by thc Issuer and,
assuming du~ ~'cation by the Trustee, arc valid and binding special obligations of thc
Issuer, payable salcly fwm fl~e sources provided therefor in thc Indenture.
4~ The interest on the Bonds is excludable fxom thc g~oss income of the owners
lhefeof for fedcraI ~ mx purposes and is not an item of tax preference described in Section
'57 of thc Code for purposes of the federal alternafiYe minimum ~x imposed on individuals and
cor~oIatio~s. Such intercst may be requ/red W be token into account in dctcrmi~g, adjusted
L,:\RA~BOYNTOI~.EG~A~laL:~KD~,. $~me 2,6, 199~
!
l
3'UI'"t ~6 '96 '03:5:1.PM sEr, IT BY RITTER EICHi',IER & HoP, RIS ~] P.54/54
:Borwwcr with various covenants contah~ in the IndcnUtre, the Agrecmc~. thc Mor~agc and
the Rcsl~/cfivc Covenants, including, withou~ ]imi~afion, th¢/r co~cnants to comply with
th~ Bonds from gross income ~or zcu~t~ m~v,,,,. ~ i,~-r - .
Borrower w comply with such requirements could cause the interest on the B0~ds to be
includable in :gross income for federal income tax purposes retroactive W the date 6f issuance
of Rg Bonds. No opinion is expressed herein regarding other federal tax consequenc~:s that may
~ due'~to .ownership of the Bonds. ;-
5. ~The Bonds are exempt from all present ivt~n~ble persimal property taxe~ imposed
by :the State of Florida.
Our opinions expressed herein are predicated upon presem laws and interpretations
,~hereof. 'We assume no obligation with respect to any change of circumstances or law .(including
hws that.may result from legishtion pending before Congress) that may adversely affect the tax-
exempt statas of interest on the Bonds after the date hereof.
It is to be under.od that the rights of owners of the Bonds and the enforceability of the
Bonds, the Indenture, the Mortgage, the Agr~ment, the Restrictive Covenants, th~ Note and
~ otherdcxalmezas referred to herein may be subject to the provisions of the banlaup~ laws
of the Unittxt States of America and to other applicable bankrup~y, insolvency, reorganization,
moratorium, or sirnitar laws relatil!g to or affecting creditors' righu, and that their enforcement
may also be subject to equitable principles that may affect remedies or other equitable relief.
Very truly yours,
D-4
8100M/13
EXHIBIT "F"
RESTRICTIVE COVENANTS
Fifth Draft
6/~20/96
THIS INSTRUMENT PREPARED BY/RETURN TO:
MARKE. RAYMOND
MOYLE, FLANIGAN, KATZ,
FITZGERALD & SHEEHAN, P,A.
POST OFFICE BOX 3888
WEST PALM BEACH, FL 33402
DECLARATION OF RESTRICTIVE COVENANTS
THIS .DECLARATION OF RESTRICTIVE COVENANTS (the "Declaration")
is made as of the 1st day of July, 1996, by C/HP COVE, INC. (the
"Borrower"), for the benefit of the CITY OF BOYNTON BEACH, FLORIDA
(the "Issuer") and The Bank of New York, as Trustee, acting by and
through The Bank of New York Trust Company of Florida, N.A., its
agent (the "Trustee") under the Indenture referred to below:
Section 1. Definitions. The following words and terms as
used herein shall have the following meanings unless a different
meaning clearly appears in the context:
"Annual Income" of an individual occupying a Unit shall mean
anticipated total annual income from all sources of such
individual, and "Annual Income" of a family occupying a Unit shall
mean anticipated total annual income from all sources of the
family head (even if temporarily absent), and each additional
member of the household who is not a minor, of such family, in
each case determined in accordance with Attachment I attached
hereto.
"Applicable Income Limit" shall mean, as of any date as of
which determined, 50% or less of area median gross income as most
~ecently determined pursuant to Section 142(d)(2)(B) of the Code.
· 'Bond Counsel" shall mean an attorney or firm of attorneys
nationally recognized on the subject of tax-exempt bonds.
"Bonds" shall .mean the 1996 Bonds, as defined
authorized to be issued pursuant to, the Indenture.
in, and
"Code" shall mean the Internal Revenue Code of 1986, as
amended, including applicable final, temporary or proposed
regulations and revenue rulings applicable thereunder. Reference
herein to any specific provision of the Code shall be deemed to
include any successor provision of such provision of the Code.
· 'Eligible Tenants" shall mean members of the charitable class
of persons which the Borrower has been established to serve.
~-Indentur~e shall mean the Indenture of Trust and Assignment
of Mortgage of .even date herewith between the Issuer and the
'Trustee, including any amendments or supplements thereto.
"Land" shall mean the real property desCribed in Exhibit A
hereto.
"Loan Agreement" shall mean the Loan Agreement of even date
~herewith between the Issuer and the Borrower, including any
amendments thereto.
,LOwer-Income Tenant" shall mean an individual or family
occupying a Unit whose Annual Income does not exceed the
Applicable Income Limit, adjusted for family size as provided in
Section 142{d)(2)(B) of the Code. For this purpose, the occupants
of a Unit shall not be considered Lower-Income Tenants if all of
such occupants are students (as defined in Section 151(e)(4) of
the Code), no one of whom is entitled to file a joint return under
Section 6013 of the Code. The income of individuals and area
median gross income shall be determined in a manner consistent
with determinations of lower-income families and area median gross
income under Section 8 of the United States Housing Act of 1937
(or, if such .program is terminated, under such program as in
effect immediately before such termination). Section 7872(g) of
the Code shall Rot apply in determining the income of individuals
under this definition.
"Lower-Income Un[ts" shall mean Units rented to Lower-Income
Tenants.
"Proj.ect" shall mean Clipper Cove Apartments, consisting of
384 rental units, located at 1500 Southern Cross Lane, Boynton
Beach,~Florida, and owned by the Borrower.
"Qualified Project Period" shall mean a period beginning on
the date hereof and ending on the latest of (a) the date which is
15 years after the date hereof, (b) the date on which no
tax-exempt private activity bond with respect to such Project is
outstanding or (c) the date on which any assistance with respect
to such Project under Section 8 of the United States Housing Act
of 1937 terminates.
"Unit" shall mean a "unit", as defined in 26 C.F.R.
~1.103-(b)(8), comprising a portion of any of the Project rented
or held available for rental to tenants.
Unless the context clearly requires otherwise, words of the
masculine gender shall be construed to include correlative words
of the feminine and neuter genders and vice versa, and words of
the singular number shall be construed to include correlative
words of the plural number and vice versa. All the terms and
provisions hereof shall be construed to effectuate the purposes
-2- 7998M
set forth herein and to sustain the validity hereof. The titles
and headings of the sections hereof have been inserted for
convenience of reference only and are not to be considered a part
hereof and shall not in any way modify or restrict any of the
t.erms or provisions :hereof and shall never be considered or given
any effeCt in -construing this instrument or any provision hereof
Qr in ascertaining intent, if any question of intent should arise.
Section 2. Residential R~ntal Property. The Borrower shall
own, manage and operate the Project continuously as "qualified
.residential rental projects" meeting the requirements of Sections
142(d) and 145(d)(2)(B) of the Code. The Issuer and the Borrower
hereby elect to use for the Project the 20-50 test described in
Section 142(d)(1)<A) of the Code. At all times during the
Qualified Project Period:
(a) The Borrower shall own, manage and operate the Project on
a continuous basis as a residential rental project comprising
several proximate and interrelated buildings or structures each of
which contain at least one Unit and substantially all of which
contain Units and facilities functionally related and subordinate
thereto meeting the requirements of Sections 142(a)(7) and 142(d)
of the Code;
(b) Units shall consist of similarly constructed Units each
of which contains complete facilities for living, sleeping,
eating, cooking and sanitation separate and distinct from other
Units, including cooking facilities equipped with a cooking range,
refrigerator and sink;
(c) None of the Units shall at any time be used on a
transient basis; none of the Units shall be rented for a period of
less than 31 days; and no portion of the Project shall be used as
a hotel, motel, dormitory, fraternity house, sorority house,
rooming house, hospital, nursing home, sanitarium, rest home or
%railer park or court for use on a transient basis;
(d) Except for Units occupied by resident managers or
.maintenance personnel, the Units shall be rented or available for
rental on a continuous basis to persons who are members of the
general public, and the Borrower shall not give preference in
.renting Units to any particular class or group of persons, other
than Eligible Tenants and Lower-Income Tenants as provided in
Section 4 hereof;
(e)~ The Project is and shall be located on a single tract of
land within the meaning of 26 C.F.Ro ~l.103-8(b)(4)(ii)(b), and
all of the improvements thereon shall comprise a single
geographically and functionally integrated project for residential
rental property, as evidenced by the ownership, management,
financing and operation of such Project; and
(f) Any building which contains fewer than five Units shall
-3- 7998M
not .have a Unit occupied by the Borrower or a related person (as
defined in Section 147(a) of the Code).
SeCtion 3. Rental Requirement. Once available for
occupancy, the Bor.rower shall rent .or hold available for rental
each of the Units of the Project (except for Units occupied by
resident managers or maintenance or security personnel) on a
continuous basis during the ~Qualified Project Period.
~$ection 4. Lower-Income Tenants. For the purpose of
satisfying the low and moderate income occupancy requirements of
-~Section 142(d) of the Code, the Borrower shall, at all times
during the Qualified Project Period:
(a) Rent on a continuous basis to Lower-Income Tenants at
least 20% of the 'Units in the Pr~oject; provided, however, that, as
provided in Section t42(d)(3)(B) of the Code, any Unit occupied by
a Lower-Income Tenant at the commencement of occupancy shall
~ontinue to be treated as if occupied by a Lower-Income Tenant
during tenanc)- of such Unit by such Lower-Income Tenant even
:though such Lower-Income Tenant may subsequently cease to be a
Lower-Income Tenant, so long as the Annual Income of such
Lower-Income Tenant as of the most recent certification pursuant
to subsection (b) below does not exceed 140% of the Applicable
Income Limit as of such certification. In the event that the
Annual Income of a Lower-Income Tenant shall exceed 140% of such
Applicable Income Limit, if (treating such tenant as if it were
~not a Lower-Income Tenant) less than 20% of the Units in the
Project are occupied by Lower-Income Tenants, the Borrower shall
rent the next available Unit in the Project of comparable or
smaller size to a Lower-Income Tenant (provided, however, that any
Unit in such Project of a larger size may be rented to a tenant
who is not a Lower-Income Tenant if such Unit was previously
occupied by such a tenant) and, upon renting such Unit to such
Lower-Income Tenant, the Borrower shall make a new certification
pursuant to subsection~b) In addition, any Unit vacated by a
Lower-Income Tenant sha~ ~e treated as being occupied by such
vacating Lower-In.come Tenant until reoccupied by another tenant
{other than occupancy fOr 31 days or less) at which time the
chmracter of the Unit shall be redetermined, provided that
reasonable att~empts are made to rent the Unit and no other Units
of comparable or smaller size in the Project are rented to a
tenant who is not m Lower-Income Tenant before such Unit is rented.
(b) Obtain from each Lower-Income Tenant who occupies Units
set aside for occupancy by Lower-Income Tenants pursuant to
Subsection (a) above, upon or prior to such Tenant's initial
occupancy in the Project, and thereafter not less than 60 days
prior to the anniversary date of each such Lower-Income Tenant's
occupancy, and maintain o~ file, copies of: (i) the Federal income
tax ~return of such Lower-Income Tenant for the taxable year
immediately preceding such occupancy or anniversary, or such other
-4- 7998M
~third party income verification as may substantiate such
Lower-Income Tenant's sources of income during the year preceding
such occupancy or anniversary, and (ii) an annual income
certification (substantially in the form of Attachment I hereto or
such other form as may be approved by Bond Counsel) evidencing
compliance with Section 142(d) of the Code, as the same may be
fzo.m time to time amended, and an income verification therefor
f~om such Lower-Income Tenant's employer or other source of income;
(c) Permit any duly authorized representative of the Issuer,
the Trustee, the .Department of the Treasury or the Internal
Revenue Service to inspect, during the Borrower's business hours
and upon not less than 48 hours advance noticef the books and
records of the Borrower pertaining to the income of Lower-Income
Tenants residing in the Project (including each occupant treated
as a Lower-Income Tenant in accordance with subsection (a) above);
and
(d) Use forms of lease for rental of Lower-Income Units and
provide the Trustee with a copy of each such form, which shall
contain .specific provisions requiring that (i) the minimum rental
period for each Lower-Income Unit shall be at least one year, (ii)
such Unit shall not be subleased, except where the Borrower
approves the subtenant as an eligible tenant in accordance with
this Section 4 or when the failure of the subtenant to qualify as
a Lower-Income Tenant will not result in noncompliance with this
Section 4, and (iii) the lease shall terminate and the Borrower
shall have the right to evict the tenant for any substantial
violation of the terms and conditions of the tenant's tenancy,
including, but not limited to: (A) any false or misleading
statement in information supplied by the tenant to evidence the
tenant's status as a Lower-Income Tenant or in such other
certifications as may be required to implement the provisions
hereof or (B) any failure or refusal to provide information
required to recertify the Lower-Income Tenant's annual income not
less than 60 days prior to each anniversary of such Lower-Income
Tenant's occupancy.
Section 5. Tax-Exempt Status of Bonds. The Borrower shall
not take or permit any action that would adversely affect the
exclusion from gross income for Federal income tax purposes of
~nterest on the Bonds and, if it should take or permit any such
action, the Borrower shall take all lawful action necessary to
rescind such action promptly upon obtaining knowledge thereof.
~The Borrower shall take and shall refrain from taking any action
as may be necessary, in the opinion of Bond Counsel, to comply
fully with all applicable rules, rulings, policies, procedures,
regulations or other official statements proposed or promulgated
by the Department of Treasury or the Internal Revenue Service
-pertaining to obligations issued under Sections 142(a)(7) and
145(d) of the .Code or any successors thereto.
-5- 7998M
~S.ec'%ion 6. ~Reports; Certifications. The Borrower shall file
~wi~ the Department of the Treasury the annual certifications
required:~by Section 142(d)(7) of the Code at the times and in the
~manner i~therein prescribed and shall simultaneously furnish copies
of such cert~ifications to the Issuer and the Trustee. During the
Qualified Project period, the Borrower shall file with the Trustee
an annual report in ~riting at least once each twelve months,
commencing with ~%he period ending July 1, 1997 (substantially in
the form ~of ~ttachment II) for the Project which shall contain the
following:
The number of Lower-Income Units;
{b) The number of Units rented and the number of Units held
available for ~rental other than as Lower-Income Units;
~(c) ~The percentage that the number of Lower-Income Units
~omst'itutes of t~he total number of Units;
~(d) ~ cer.tificate of the Borrower that the information
contained in ~the report is true, accurate and correct as of the
date ,~hereof; and
~e) .A certificate of the Borrower that the Borrower is in
compliance in .all material respects with all covenants contained
in this Declaration.
Section 7. Compliance; Involuntary Non-Compliance. (a) The
Borrower covenants to inform the Issuer and the Trustee by written
notice ~'of any violation of the Borrower's covenants in this
Declaration within 14 days of discovery of such breach. The
Borrower shall take all actions to cure any default under the
provisions set forth in Section 4 as soon as practicable and, in
any event, .within sixty (~60) days of becoming aware of such
default, The Trustee shall receive and monitor any reports
submitted .by the Borrower pursuant to Section 6 and notify the
Borrower and the Issuer of the breach of any such covenant based
upon information contained in any such report or otherwise. In
~the .-event of ~the breach of any such covenant that continues to
exist uncorrected for a period of 30 days after notice to the
~Borr~o~er, the ~Trustee, on behalf of the Issuer, after receiving
any indemnity it ,deems necessary (i) shall take all action
necessary to cause ~he Borrower to cure such breach, including,
,if necessary, enforcement o'f such covenant if a failure by the
Borrower to comply with such covenant would in the opinion of Bond
Counsel adversely affect the exclusion from gross income for
Federal income tax purposes of interest on the Bonds, and (ii) may
take any other action necessary or desirable to cause the Borrower
to cure such breach. If at any time there are no Bonds
outstanding under the Indenture, or if for any reason the Trustee
fails to take any action reasonably requested by the Issuer, the
Issuer may itself take any and all action which it may deem
necessary or desirable to cure any breach hereunder.
-6- 7998M
(b) ~.he covenants contained in this Declaration shall cease
to apply in the event of involuntary non-compliance caused by
fir~, seizure, requisition, foreclosure, transfer of title by deed
in lieu of foreclosure, change in Federal law or an action of a
Federal agency after the date of issue of the Bonds which prevents
%he Trustee and the Issuer from enforcing such covenants,
condemnation, or any other event which, in the opinion of the
Truste~, is similar to the foregoing, but only if within a
reasonable time after such event (including a reasonable period to
resell the Project by a foreclosing lender which acquires the
same, or whose controlled purchaser acquires the same, at
~foreclosure) (i) the Bonds will be no longer outstanding or (ii)
the proceeds received as a result of any such event are used to
provide a project which meets the requirements of Section 142(d)
of the Code as evidenced by an opinion of Bond Counsel.
(c) Subsection (b) hereof shall not apply if, in the event of
foreclosure or transfer of title by deed in lieu of foreclosure or
similar event, the Borrower or a related person (as defined in 26
~C.F.R. ~§l.103-i0(e)) subsequently obtains an ownership interest
for tax purposes in such Project during the Qualified Project
Period.
Section 8. Covenants Run with the Land; Term. The
covenants, reservations, agreements and restrictions set forth
herein shall ~be deemed covenants running with the Land and shall
be an encumbrance on the Land and shall, without regard to
technical classification or designation, be binding upon and
enforceable against the Borrower and all successors in title to
the Land, except as provided in Section 7. The Borrower covenants
and .agrees that during the Qualified Project Period, the Borrower
will cause or require that any subsequent transferee, purchaser,
grantee, owner or lessee (excluding, however, transferees under
Section 7(b) and lessees occupying Units for residential purposes)
of the Project or the Land or any part thereof, shall accept,
observe ~and assume all of the covenants of the Borrower in this
Declaration, including its covenants in this Section 8. Except as
provided in ~Section 7(b), every contract, deed or other instrument
hereafter executed covering or conveying the Land or any portion
thereof shall conclusively be held to have been executed,
delivered and accepted subject to such covenants, regardless of
whether such cowenants are set forth in suCh contract, deed or
o~her instrument. Except as provided in Sections 4 or 18 or
unless sooner terminated in accordance with Section 7, such
covenants shall continue in full force and effect ~during the
Qualified Project Period, it being expressly agreed and understood
that the provisions ~hereof are intended to survive the termination
of the Loan Agreement and the repayment of the loan to the
Borrower made pursuant thereto, if prior to the expiration of the
Qualified Project Period.
Section 9. Uniform; common Plan. The provisions hereof
shall apply uniformly to the entirety of the Project in order to
-7- 7998M
esta~btish and carry out a common plan for the use, development and
~mprovement of t'hat portion of the Land upon which the Project is
~ocated.
~ection t0. Burden and Benefit. The burden of the covenants
set forth herein touches and concerns the Land in that such
covenants limit the use and development of the Land, and thereby
render the Land less valuable. The benefit of such covenants
touches and concerns the Land in that such covenants make the
Project available for use and occupancy by Lower-Income Tenants,
therefore furthering the public purpose sought to be advanced by
the Issuer and furthering the charitable purposes for which the
Borrower has been created, and further satisfying the Federal
policies evidenced by the conditions for use of the Project
required under Section 142(d) of the Code in order that interest
on the Bonds may be excluded from gross income for Federal income
'tax purposes.
Section 11. Remedies;. Enforceability. In the event of a
breach of any of the pr.ovisions hereof, the Trustee upon receipt
of actual notice -of such breach, and upon receipt of indemnity
satisfactory to the Trustee, as required by the Indenture, acting
on behalf of the owners of the Bonds or on behalf of the Issuer in
its own right or as representative of the Lower-Income Tenants,
~may institute and prosecute any proceeding at law or in equity to
enforce the provisions hereof or to 'abate, prevent or enjoin any
such breach, or to enforce compliance or to recover monetary
damages caused by such breach. No delay in enforcing the
provisions hereof as to any breaCh shall impair, damage or waive
the right of any party entitled to enforce the same or to obtain
relief against or recover for the continuation or repetition of
Such breach or any 'similar breach thereof at any later time or
times.
Section 12. Information Provided to. Trustee.
shall provide the Trustee with copies of all
.communications given to the Issuer hereunder,
reports required by Section 4 hereof.
The Borrower
reports and
including the
Section 13. Consideration. The Issuer has determined to
issue the Bonds to obtain funds to carry out the cost of the
Project for the purpose, among others, of inducing the Borrower to
operate the Project in the jurisdiction of the Issuer as a
facility for use by an organization (other than an organization
organized and operated exclusively for religious purposes) which
is described in Section 501(c)(3) of the Code and which is exempt
from federal income taxation pursuant to Section 501(a) of the
Code, such Project being a "qualified residential rental project"
within the meaning of Section 142(d) of the Code. In
consideration of the adoption and implementation of the Project
and the issuance of the Bonds by the Issuer, the Borrower has
accepted the terms and provisions hereof.
-8- 7998M
Section 1-4. Occupancy Notification; Income Records;
Additional~ Information. Concurrently with each annual report
provided to the Trustee pursuant to Section 6 hereof, the Borrower
shall make available for inspection by the Trustee copies of the
income tax returns or current income verifications and income
certifications of Lower-Income Tenants (or persons treated as
Lower-Income Tenants under Section 4(a)) requi~ed by Section 4(b)
hereof which have been obtained by the Borrower subsequent to
filing the report for the immediately preceding year. In addition
to the information provided for in Section 4(b) hereof, the
Borrower shall submit any other information, documents or
certifications requested by the Issuer or the Trustee which are
reasonably necessary to substantiate the BOrrower's continuing
compliance with the provisions hereof and Sections 142(d) and
145~d)(2) of the Code.
Section 15. G0v:erninq Law. This instrument shall be governed
by the laws of the State of Florida; provided, however, that with
regard to any interpretation of the Code, Federal law shall apply.
Section 16. Notice. Any notice required to
hereunder shall be given as provided in the Indenture.
be given
Section 17. Severabilitv. If any provision hereof shall be
held invalid, illegal .or unenforceable, the validity, legality and
enforceability of the remaining portions shall not in any way be
affected or impaired.
Section 18. Release, Modification or Amendment of
Declaration. This Declaration may be released, modified or
amended in whole or in part as provided in Article XII of the
Indenture. Any such release, modification or amendment shall be
executed by the Issuer and the Trustee and shall be recorded at
the expense of the Borrower in the Public Records of Palm Beach
County, Florida.
IN WITNESS WHEREOF, the Borrower has caused this Declaration
· to be executed in its name and on its behalf by its duly
-9- 7998M
authorized officer, as of the date first written above.
C/HP COVE, INC.
Witness
Witness
By:
Name:
Title:
Witness
Witness
~Witness
Witness
Accepted:
CITY OF BOYNTON BEACH, FLORIDA
By:
Name: Gerald Taylor
Title: Mayor
THE BANK OF NEW YORK, as Trustee,
acting by and through THE BANK OF
NEW YORK TRUST COMPANY OF FLORIDA,
N.A., ITS AGENT
By:
Name:
Title:
STATE OF FLORIDA )
COUNTY OF PALM BEACH )
The foregoing instrument was acknowledged before me this
day of , 1996, by
as of C/HP COVE, INC., who is
personally known to me, OR
has produced as identification.
(NOTARY STAMP)
Notary Name:
Notary Public
Serial (Commission) Number
(if any)
-10- 7998M
STATE OF FLORIDA )
COUNTY OF PALM BEACH )
The foregoing instrument was acknowledged before me this
day of , 1996, by GERALD TAYLOR, Mayor of the CITY
OF BOYNTON BEACH, FLORIDA, who is personally known to me.
(NOTARY STAMP)
Notary Name:
Notary Public
Serial (Commission) Number
(if any)
STATE OF FLORIDA )
COUNTY OF PALM BEACH )
The foregoing instrument was acknowledged before me this
day of , 1996, by
who is
personally known to me, OR
has produced as identification.
(NOTARY STAMP)
Notary Name:
Notary Public
Serial (Commission) Number
(if any)
-11- 7998M
ExHiBiT A TO
DECLARATION OF RESTRICTIVE COVENANTS
Land
ATTACH~N~ I TO
DECLARATION OF RESTRICTIVE COVENANTS
[CLIPPER COVE APARTMENTS]
Tenant Income Certification
1. I/We, state that I/we and the persons listed below will
be or are the occupants of unit No. in the Clipper
Cove housing development.
Name of Members
of the
Family*
Relationship Age
SOcial
Security
Number
Income Tax
Return Filed
for preceding
Taxable Year
(Yes or No)
*Includes family head (even if temporarily absent)
additional member of the family.
and each
2. (a) The anticipated income of all the above persons during
the 12-month period beginning on the date of this certification is
listed below. Such amount includes all anticipated income including
(without limitation) wages, salaries, investment income, social
security benefits, alimony and child support, unemployment
compensation and welfare benefits (but not the value of food stamps).
Name of
Members of
the Family
Amount Source
Name and Address of
Place of Employment
(b) The total anticipated income of the family head,
spouse and .all others listed above is $
3. If any of the persons described above in paragraph 1 has
an~ value of equity in real property, savings, stocks, bonds or
other forms of capital investment, provide the following
information:
{a) the name of the asset and the total estimated market
value of all such assets of all of such persons: $
~b) the amount of income expected to be derived from
such assets in the 12-mont'h period cor~mencing on the date of this
certification: $ , and
(c)
2 (b):
amount of such income which is included in item
-4. (a) Will all of the persons listed above be or have been
full-time students during five calendar months of this year at an
educational institution (other than a correspondence school) with
regular faculty and students?
Yes No
(b') If yes, is any such person (other than nonresident
aliens) married and eligible to file a joint federal income tax
return?
Yes No
I/We acknowledge that all of the above information is relevant
to the status under federal income tax law of the interest on the
Obligations that have been issued to refinance the acquisition of
the housing development. I/We consent to the disclosure of such
information to the issuer of such obligations, the bond trustee
for such obligations, any agent acting on their behalf, and any
authorized agent of the United States Treasury Department or
Internal Revenue Service. I/We understand that if the information
reported in this certificate is discovered to be in any way
materially false or 'misleading, it shall be viewed as a default
and may result in termination of the lease and eviction of all
occupant:s of ~he unit. I/We also agree to provide any further
information required to validate this Certification and agree to
.update the Certification, if required, at least sixty days prior
to the anniversary .of any lease renewal.
The undersigned, being first duly sworn, hereby
acknowledge(s) that (s)he/they has/have read and answered each of
the questions fully and truthfully.
Signed:
Applicant/Occupant
Applicant/Occupant
STATE OF FLORIDA )
COUNTY OF PALM BEACH )
The foregoing instrument was acknowledged before me this
day of , , by
who is
personally known to me, OR
has produced as identification.
(NOTARY STAMP)
Notary Name:
Notary Public
Serial (Commission) Number
(if any)
STATE OF FLORIDA )
COUNTY OF PALM BEACH )
The foregoing instrument was acknowledged before me this
day of , , by
who is
personally known to me, OR
has produced as identification.
(NOTARY STAMP)
Notary Name:
Notary Public
Serial (Commission) Number
(if any)
FOR COMPLETION BY PROJECT OWNER ONLY:
Calculation of Annual Income*-
Amount entered for entire
household in 2(b) above:
If the amount entered in 3(a) above
exceeds $5,000, .SUBTRACT the amount
entered in 3(c):
(C) TOTAL INCOME
(D)
If the amount entered in 3(a)
above exceeds $5,000 enter the
greater of (i) the amount entered
in 3(b) or (ii) a percentage of
the amount entered in 3(a) based
on the current passbook savings
rate (as determined in accordance
with 24 C.F.R. 813.106(b)(3)):
(E)
TOTAL ANNUAL INCOME
(Line (C) + Line (D)):
Based on the amount entered in (E) above, the tenant(s) [is/are]
[is/are not] Lower-Income Tenants, as defined in the Declaration
of Restrictive Covenants, dated as of 1, 1996, in the
Public Records of Palm Beach County, Florida.
Number of apartment unit assigned:
[ NAME OF OWNER ]
By.
Authorized Representative
*Reference shall be made to Title 24, Part 813 of the Code
of Federal Regulations for determination of income inclusions and
exclusions.
ATTACHMENT II TO
DECLARATION OF RESTRICTIVE COVENANTS
Annual Report
[Issuer]
[Trustee]
Clipper Cove Project
Pursuant to ~Section 6 of the Declaration of Restrictive
~.Co~enants, dated as of 1, 1996, executed, delivered and
recorded by the Borrower, for the benefit of City of Boynton
Beach, Florida and as Trustee, the
undersigned authorized r.epresentative of the Borrower, hereby
certifies with respect to the operation and management of the
~roject referred to above (using the terms herein as defined in
such Declaration), that as of the date shown below:
1. The total number of Units rented or held available for
r~ntal is .
· The ~umber of Lower-Income Units is
3. The percentage that the number of Lower-Income Units
constitutes of the total number of Units is
4. The information contained in this
.accurate and .correct as of the date hereof.
report is true,
5. As of the date hereof, the Borrower is not in default
~nder ~any .covenant or agreement contained in the Declaration of
Restrictive Covenants.
IN WITNESS WHEREOF, the undersigned has signed this
Report this day of
C/HP COVE, INC.
By:
Name'
Title:
8100M/14
EXHIBIT "G"
DEFINITIVE AGREEMENT
06x26x96 16:50
BABER & KAL I N[]IiSKI, P.C. -~ RAYMOND
N0.50~ P002~011
DEFINITIVE AGREEMENT
B'&K
Draft
6-20-96
This DEFINITIVE AGREEMENT (this ,,Agreement") ~ated
1996 is by and between C/HP COVE, INC., a Florida
~npro~i~ corporation ("C/HP") and the CITY OF BOYNTON BEACH,
FLORIDA, a political subdivision and municipality of the State of
Florida (the ,,City") and sets forth certain matters with respect to
the ongoing agreement between C/HPand the City arising as a result
of the City spart/czpatlon in the acquisition by C/HPCove of that
multi-~amily housing facility known as Clipper Cove Apartments
located at 1500 Southern Cross Lane Boynton Beach. Florida (the
-Property").
SeCtion 1. Definitions. TezTns used in this Agreement
shall have themeanings assigned to such terms in this Section 1,
unless the connext, clearly indicates otherwise.
"Agreement" means this Definitive Agreement.
"Annual Budget" means the budget adopted prior to the
beginning of each Fiscal Year by C/HP for such ensuing Fiscal Year.
~ "Asset Management Fee" means the fee o~ 1.25% 6f Gross
Revenue per month paid or due to Cornerstone Housing Corporation as
an asset management fee.
"C/HP" means C/HP Cove, Inc. a Florida nonprofit
corporation, and the ,,ultimate owner" within the meaning of the
Letter of Understanding.
,'City" means the City of Boynton Beach, Florida, a
political subdivisi°n and a municipality of =he State of Florida.
,,Expenses"means, for any period, all expenses related to
the operation and maintenance of the Property and properly
allocated to such period whether by reason of ac=ual cash
expenditure or accrual of the obligation; such expenses include,
but are not limited to, the following: =he Management Fees and
Expenses. Asset Management Fees, Social ServiceManagement. Fees and
all other fees and expenses for management and other services
provided at or in connection with the Property; wages, salariesand
employee benefits and other labor costs; maintenance, janitorial
and cleaning expenses; repairs and replacements; lease payments and
expenses; utilities; water and sewer charges and trash, garbage and
solid waste disposal fees, charges and expenses; contracted
services; legal, accounting andconsultin~ fees and expenses of the
86/26xo~6 16:i~l B~BER~ KALINCII~ISKI. P.C~ ~ RAYMOND NO.583 PO03X011
Property and'of C/HP; taxes, payments in lieu of taxes, assessments
· s cOStS o~ licenses,
and excess ; leasing
permi'ts and similar ~ees to the Property or its
and marketing cos=~; costs of goods
i on debt incurred in connection
with interest and principal ..on debt
including
~gations
1 fees
the
property
paid from
and!~ll other
maintenance
revenues,
opera= ing,
limi
or
ncluded x
sums received
or
-Gross ~b~venues" means, ~or any period, the aggregate
on a ~cash basis, generated from owning,
the Property xncludz 9, but not
the -total amount paid by all tenants and o~hers
right to occupy or use the Property
thereof, bun not limited to all ren~s
~ tenants of operating expenses and
forfeite~ by ~enants or otherwise
license feesand other charges or
'credited .=o C/HP'under any lease, license or
~hout limitation, proceeds of rental
insurance the applicable
was to be paid), vending machine ~ncome
all interest earned on the funds and
Indenture into the Revenue
that Gross
borrowing
(ii)
(iv)
o~ Mortgage to be executed.
connection with
which the 1996 Bonds are
is amenCted and supplemented
"Letter
Un~ex
Cornerstone
Partnership, Inc.,
acquisition of the
of
August 3 ~
a
Proper~y
(i) the
bonds or o~her
to third parties,
any . contributions,
.ruptio~ insUrance
deposite (until
above). ~
Indenture of Trust an~ ASsignmen~
and The Bank of New York in
of ~he 199~ ~on~s and pursuant to
as such document
~me =o time.
· ,, means shat Letter of
on behalf of the City,
a Maryland ~orporation and Housing
in anticipation of
the RTC.
~Loan Agreement'" means that Loan Agreemen~ to be
executed by City and .C/HP in connection with the issuance of the
- 2 -
16:31
t~ & KALINOWSKI, P.C. ~ RAYMOND
1996 Bonds and pursuant to which the proceeds of the 1996 Bonds
wilI be l°aned to C/HP.
-Management Pees and Expenses" means the amount sec ~orth
each year as management fees and expenses in the Annual Budget
payable tO the manager of the Project.
"1996 Bonds" means the City of Boynton Beach Multi-Family
Housing Mortgage Revenue Bonds Series 1996 (Clipper Cove
Apartments) to be issued by the City primarily for the purpose of
refinancing the Property.
"Property" means the Clipper Cove Apartments located at
1500 Southern Cross Lane, Boynton Beach, Florida, including the
land, building and all other improvements associated with such
property. The'legal description of the Property is that attached
'hereto as Exhibit A.
"RTC" means the Resolution Trust Corporation, the entity
from which the Property was acquired by C/HP.
"Social Service Management Fee" means the fee of 1.25% of
Gross Revenue per month paid or due to Housing Partnership, Inc. or
its successor for social service programs and management provided
at the Project.
.Trustee" means the Trustee acting in such capacity under
the Indenture, which upon the issuance of the 1996 Bonds shall be
The Bank of New York.
S~ction 2. Purposes o~ Th~s Aqreement. Prior to its
acquisition by C/HP, the ~roperty was owned by the ~TC. A~ part of
a program for the disposition of the Property, and other similar
properties owned by the RTC, the RTC engaged in a process of
competitive selection of a purchaser of the Property. The City
· some control over .the disposition of the
desired to exercise
Property, and the City according_l~ determined, to submit a proposal
for the acquisition of the Property. In that regard, the City
engagpd in a competitive process°f selecting a non-profit entity
to become the ultimate owner of the Property. Through this process,
,the City selected the team of Cornerstone Housing Corporation and
Housing Partnership, Inc. FolI~wing the selec~ion process, the
City, Cornerstone Housing Partnership and Housing Partnership,
Inc executed the Letter of Understanding. The criteria for the
selection of Cornerstone Ho= sing Corporation and . Housing
Partnership, Inc. include.~, the f? :t that they were willing to agree
~to make payments to ~he C==y in Ieu of taxes and to share net cash
flow with the City as Provided il Sections' 6 and 7, respectively,
of this Agreement. During its negotiations with the RTC, the City
.understood =hat the City would be paid a fee by ~he RTC equal to 5%
.roperCy as compensation for the
~ 'the disposition of the Property
however, at the time of final negotiation of an
by the RTC;
- 3 -
06/26/96 16:51 Bt~BER & KRLINOb~KI., P.e. -)~YMOND N0.503 P005/011
width ~the ~RTC, the RTC was only willing to pay the'.~i City 3%
the Property. C/HP, in recognition that
the from the RTC than the City originally
~he
expected, agrees in Sec=ion 3 hereof, _to .DaY~ to .City., as
~a~tiaI c~ideration ~or the assignment by the City to C/HP o= the
~' Pro rt , an amount e~ual to 2% of the
right to acquire the pe y,
-purchase 7. of ~the Property paid by C/HP to =he RTC, which
.Payment L1 be made ~from the .~roceeds of the 199~6 Bonds.
.' T.-.h.e parties ~tend that th~ Agreement shall constitute that
#Definitiv-~ Agreement" referenced in the Letter of Understanding,
and hereby state that ~this documenn does the Dez.~n~tl
.~rstand&ng and
· supersedes the Letter of
ties between .the Letter
Definitive Agreement, this Agre,
Letter_-,
and the Ho~sing Inc. will cr~
corpora=ion to become the ,'~ult~mate
as that ,ultimate
that C/HP
~he RTC.
the
With respect
and this
The
corporation
~.~ Florida
The
and
and owns the
lien securing
Section 3. Agreem~.nt to Make Payment =oCity. C/HP, as
described in .Eection 2 above, recognizes that the City did not
receive the full amount it had expected from the RTC and,
therefore, C/HPhereby~grees ~o pay to the City an amountequal to
2% of~the purchase price of the Property from the RTC, .such 2%
being the sum of $I86,000. Such $186,000 shall be paid solely from
the proceeds of the 1996 Bonds and shall be payable to the City
upon t'he condition that the 1996 Bonds are issued.
$~ction4. ~Deliveryo~ Information. C/~P agrees that it
will deliver-to the City eachof the following: (a) a listing (as
of May 31, 1996 of ~he project development costs related to the
Property, (b) financing plans and applications relating to the
Property, (c) by January I of each year, commencing January 1,
1997, the AnmualBudget (as defined in the Indenture), [d) by April
30 of each year (or as soon thereafter as the annual audited
f~nancial statements are available) annual audited financial
statements of C/HP for the precedin
g fiscalyear and {e) an annual calculation of Gross Revenues and
.of Expenses.
~ $~ction ~. Property Mana~emenr~ C/HP has ~elected
pr?.pe, rty Asset Managemen=~o~ F}ori~a! Tamp~, ~lori~a, as =he
i~itial property .manager of the Proper=Y. C/HP xs not, however,
obligated to continue to engage Property Asset Management as
property manager for any period of time and may, at any time,
~o/E~ 16:31 t~R & KALtNOWSKI, P.C. a RAYT40ND H0.503 POO67011
select.such other property manager or elect to manage the Property
directly, all as C/HP, in i=ssole discretion, may determine. C/HP
agrees, however, that the City may, fromtime =o time, adv,.se C/HP
with res~ec= to the City's p~efe~ences for key'vendors, ihcluding
the property manager for the Property. .
· C/HP shalt file a
County Property APDraiser
seeking an ad tax-exemption or take such other action on an
annual basis as is appropriate ~omaintain such exemption..If such
an exemption is granted oricontinUed forany year, then C/~P will
in lieu of taxes '(''PILOT") onNovember I o~ each year
as ad valorem taxes shall be lawfullydue and
payable in amounts as close as possible to the tax payment the City
received if the tax exemption hadnot been~ The
be calculated as follows:
(before as .shed by
the City'~s rate. appeal
~tion is
than a full ad valorem tax
~ormul. a .shall be applied pro rata.
that any
Surplus
eight
:shal'.
is
of
o~ receipt
times
If less
then =he PILOT
For so long
in effect, C/HP and th= City agree
the Distribution Account of the
under the Indenture Shall be paid as follows: twenty-
(2~%) to tihe C~ty of Boynton Beach Community
Division and percent (72%) to C/HP. C/HP
thereunder, not
year'of
from the Dist
by C/HP.
the Indenture, if a distribution
120 days after the end of
to the City the City's share
.onAccount within five days
.no bonds are outstanding un~er the Indenture,
the City agree that C/HPmay retain the Gross Revenues and
~ay Expensesdirectly or may, in connecti°n with the acquisition of
other fin.ancing, agree to deposit such Gross Revenues with another
fiduciary, and, in either case, the Gross RevenUes shall
.be use~ ,ay the Expenses and to ~rovide for debt service, and
for such service reserves and reserves for the operation and
maintenanceof property as may be reasonable and prudent an~/or
by=he term~ 0~ any financing documents related
~o ~ ~rty and that, annually, within 120 days a~te~ th~ end
of each year of C~HP, 28% of nhe excess of the Gross
Expenses, the payment of
debt fun~ing of such reserves,
shall be =o the City of Bo~rnton Beach Community Redevelopment
Division. ~
The City will use the distributions made to it for~'i housing
programs in the City. If the City fails Co use the paym, ents for
such'housing programs, then the distributions to the City hereunder
- 5 -
BRBSR & KRLINO~tSKI, P.O. * RRY~'ID M0.50~
shall cease until such time as the City has provided written
.evidence to C/HP that all such payments previously made to the City
have been used in the housing programs of the City.
C/HP will market
the Property
units in the Property l~ocal social
by contacting and working with
service providers and other agencies in the area, as appropriate.
Section 9...~ermination. This Definitive Agreement will
Unless C/:HP and the City or
terminate on December 20, 2035
'V
respec~m e successors ~erminace
writ=eh mutual agreement prior to
respect to any distribution of net
the year in which this
shall be pro rated, based upon the
Definitive Agreement was in effect, and
such payment upon the terms set fo
continue until, such distribution
as this Definitive Agreement is
hereto agree to execute
interest hereunder and, in
filed for public notice
and C/HP agree promptly to exe.
~ocuments as shall be required uo
public records and cause it to no longer
property.
the amount
such year the
to make
7 hereof shall
made to the City. At such time
of the parties
release of its
has been
%he City
~te such
from the
upon the
Section .10~ Sale of the prouertv. Subject to the terms
of the Indenture and the Financing I~struments (as defined %n.the
~den~ure), C/HPmay sell ~he Property on such
and at such 'time as it determines to be appropriate, provlaeo
C/HP shall give prior ,written notice to the City of the proposed
sale and re6eive the Citys consent~ The Cityagrees tha~ it will
not unreasonably delay or withho%d its consen%. It is agreed that
any entity to which the Property is Sold or transferred must accept
th~ terms an~ conditions o~ th£sDefinitiveAgreement and agree
be bound on the same terms as C/HP. All proceeds of the sale of the
proceeds.
an~ ~he City shall have no interest
proceeds
shall be
in Gross
in any of such
Section 11. Amendments. This Definitive Agreemen~ is
the partieshereto and may b~ amended at
solely for the benefit of written document setting forth the
any time and in any respect bya
amended =erms and signed on behalf of the City and C/HP.
S~c~ion ~2. No~i~es. Ali notice~ and requests required or
permitted under uhms DefinitiveAg~eement shall be in writing and
shall be deemed to have been properly given or served when mailed
- 6 -
.~6/2~/96 16:32 BABER & KALINO~SKI, P.C. ~ RAYMOND N0.50~ P008/011
pos=age prepaid by ceru~fied or regisnered mail, re=urn receip=
eS=ed0 or by overnight delivery service when evidence of
deliver~ is provided. Nouices shall be direc=ed as follows:
The City.:
City o£ Boynton Beach
100 East Boynton Beach B~ulevard
Post Office Box
Boynton Beach, Florida
Attention: City Manager
C/HP:
C/HP Cove, Inc.
c/o Cornerstone Housing ~orporation
1350 Beverly Road, Sui=ei20b
McLean, VA 22102-3634 ~
Attention: President
Each par~y may change the ad~r. ess provided for notification by
deliver~o~ t~e new address in writing uo the o=her party.
Sec~i0n 13. No A~encv. The paruies nei=her is
an age~, employee, or servan~ o£ any
Defini=ive Agreement does not and shall
creating a partnership be=ween C/HP and t
granted, nor shall any par=y r~present ~hat
any right or au~horiuy =o assume or crea~
responsibility, express or implied, on behal of any other party,
or to bind any o=h~r party in any manner not~provided her~in.
gree =hat
her, and that this
lo~ be construed as
e City. No party is
has been gran=ed,
any obligation or
- 7 -
S~ction 14. Choice of Law~ This Agreement shall bc
construed under =he laws of the State of Florida and under federal
1.aw which applies in =he state of Florida.
This Definitive Agreement may
¢oun~e~arts shall
be executed in her such
¢ons=itute one and the same agreement.
City Clerk
Witness:
CITY OF BOYNTON BEACH, FLORIDA
By: Gerald Taylor, Mayor
C/HP-COVE, INC, a Florida Corporation
By:
James H. Edmondso~, President
- 8 -
STATE OF FLORIDA )
COUNTY OF PALM BEACH )
The foregoing instrumen= was acknowledged before, me this
day of June, 1996, by .,
, as of C/HP COVe, INC., who is
personally know to me, OR
has produced .
as identification.
(NOTARY STAMP)
Notary Name: ....
Notary Public
Serial (commission) Number
(if any) .. .
- 9 -
06/2~?:J6 16:33 ~BER & K~LI)qObd..~I, P.C. ~ P-,~YNOhtD b40.~3
EXHIBIT A
L~.C~AL DESCRIPTION OF THE PROPERTY
All of the Plat of'The Landings, according to the Plat
thereof as recorded in Plat Book 52, Pages 48 through 52,
of the Public Records of Palm Beach County, Florida.
8100M/15
EXHIBIT "H"
LETTER OF REPRESENTATIONS
Letter of Representations
[Name of Issuer]
Attention: General Counsel's Office
The Depositor)' Trust Company
55 Water Street; 49th Floor
New York, NY 10041-0099
[Name of Agent]
~Date }
Re:
(Issue Description
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain matters relating to the
above-referenced issue (the "Bonds"). Agent x~411 act as trustee, paying agent, fiscal agent, or other
agent of Issuer with respect to the Bonds. The Bonds will be issued pursuant to a trust indenture.
bond resolution, or other such document authorizing the issuance of the Bonds dated
. , 199~ (the "Document").
('Underwriter")
is distributing the Bonds through The Depository Trust Company ("DTC").
To induce DTC to accept the Bonds as eligible for deposit at DTC, and to act in accordance
with its Rules with respect to the Bonds, Issuer and Agent, if an); make the following
representations to DTC:
1.-Prior to elos~g on the ~Bonds on ,199 , there shall be deposited with
:DTC one Bond ,eer6fmate 'registered in the name of DTC's nominee, Cede & Co., for each stated
maturity .of ~the t~onds ,in the face amounts set :forth on Schedule A hereto, the total of which
represents 100% of the principal amount of such' Bonds. If, however, the aggregate principal
am~ount of~?y mamrit~ exceeds 8150 million, one.certificate will be issued with resp~ to each
$150 million of ~rin-eipal amount and an additional certificate will be issued with ~ to any
renmirfing.~ mount. Each $150 million Bond certificate shall bear the follo:,wing legend:
Unless th~s certificate is presented by an authorized representative of The Depository Trust
Gompan); to Issuer or its agent for registration of transfer,
; name of Cede & Co, or in
.such other:name as.is requested by an of DTC (and any pa)~nent is
made Io Cede &
OR
BY OB TO ANY'PERSON IS ~rRONGFUL inasmuch as the registered
-owner hereof, ~ tk 'Co., has an interest 'herein.
2. In the.event :of any solicitation of consents from or voting by holders of the Bonds, Issuer or
Agent shall estab~h a r~--ord clate (with no provision for revocation of consents or
send notice of such record date to
DTC
$, In or an aak, ance refunding of part of the outstanding
Bonds, notice-to DTC speci~Sng: (a) the amount of the redemption or
,_case of a refunding, the maturity date(s) established under the refunding: ~d
(c) the .date SUch notice is.to be mailed to beneficial ox~mers or published (the "Publication Date' ).
Such notice 'shall be .sent to DTC by a secure means (e.g., legible telecopy, registered or certified
mail, overnight :deliver)') in a time~: manner designed to assure that such notice is in DTC's
possession no later ithan the close of business on the business day before the Publication Date.
Issuer.or Agent shall for~m'cl such notice either in a separate secure transmission for each CUSIP
number or,in a secure :transmission for multiple CUSIP numbers (if apphcable) which includes a
manifest or list of each CUSIP submitted in thati.transmission. (The part)., sending such notice shall
have a method m and the timeliness of such notice.) The
nor more than 60 dax~ prior to the redemption date
, the cl~te that the proceeds are deposited in escrow.
4. In the ex,em of an im, itation to tender the i Bonds, notice by Issuer or Agent to Bondholders
specifying the:terms of the tender and the Pubhcation Date of such notice shall be sent to DTC bra
secure means'in thei manner set: forth in the prec'eding paragraph.
-15, AIl notices anti,payment advices sent to DTC shall contain the CI2SIP number of the Bonds.
ti..Notices to DTC ,pursuant to Paragraph 2 ,~' teleeopy shall be sent to DTC's Reo~ardzation
Department at (212) 709-6896 .or (212) 709-6897, and receipt of such notices shall be
COnfirmed by telephoning (212) 709-6870. Notices to DTC pursuant to Paragraph 2 by mail or by
any other means Shall .be sent to:
Supervisor; ,Proxy
Reorganization Department
The Depositor), Trust Company
7 Hanover Square: 23rd Floor
New York, IVi' 10004-~95
'L Notices to DTC pursuant to Paragraph 3 by telecopy shall be sent to DTC% Call Notification
Department at (51t5) ~.~974t64-or (516) 2274190. If the party sending the notice does not receive a
telecopy receipt 'from DTC confirming that the notice has been reeeivec[ sueh part), shall telephone
(516) 227-4070. 'N~ m DTC pure, ant to Paragraph 3 by mall or by any other means shall be
· ent to:
Call Notification Department
The Depository Trust Company
711 'Stewart Avenue
Garden City, NY 115304719
' !8. Notices :to DTC pursuant to Paragraph 4 and notices of other actions (~n~cJucling mandatory
tenders, exchanges, and capital-changes) by teleeopy shall be sent to DTC s Reorganization
Department at (~)'709-1~3 or (2!2) 709-1094, and ~eipt of such notices shall be confirmed by
telephoning (212)709-6884. Notices .to DTC pursuant to the above by mail or by an)- other means
shall 'be sent to:
Manager; lteorganization Department
I:[eorga~ni. Tation V~rindow
The Depository Trust Company
7 Hanover Square; 23rd Floor
'New York, NY 10004-g805
9. Transaetious in the Bonds shall 'be eligible £or next-clay funds settlement in DTC's Next-Day
Funds Settlement ("NDFS") system.
A. Interest pa)anents shall be received by Cede & Co., as nominee of DTC, or its registered
assigns in next-day funds on each payment date (or the equivalent in accordance with
~eXisting arrangements between :Issuer or Agent and DTC). Such pa)ments shall be made
payable to the order of Cede & Co. Absent any other existing arrangements such
payments .shall be addressed as follows:
Manager; Cash Iteeeipts
Dividend Deparlmaent
The Depositor), Trust Company
7 Hanover Square; ~4th Floor
New York, NY 10004-21305
B. Principal payments shall be received by Cede & Co., as nominee of DTC, or its registered
assigns in next-day funds on each payment date (or the equivalent in accordance with
existing arrangements between Issuer or Agent and DTC). Such payments shall be made
Payable to.the order.of Cede & Co., and shall be adckessed as follows:
NDFS 'ltedemption Department
The Depository Trust Company
.55 'Water Street; 50th 'Floor
New York, ~Nvtr 10041~
10. DTC ma)' clireet Issuer or Agent to use any other telephone number or address as the
number.or.address to which notices or payments of interest or principal may be sent.
11. In the event ora redemption, aeceleration, or any other similar transaction (e.g., tender made
u,nd ~ in .response to Issuer's or Agent~ invitation) necessitating a reduction in the aggregate
prin~p~ mount of Bonds outstanding or an advance refunding of part of the Bonds outstanding,
DTC, in its discretion: (a) may request Issuer or Agent to issue and authenticate a new Bond
eertifmate, or(b) mY make an appropriate notation on the Bond certificate indicating the date and
amount of such reduction in .principal except in the ease of final maturity, in which ease the
eertitleate will be presented to issuer or Agent prior to pa)vnent ff required.
12, In the event that Issuer determines that beneficial owners of Bonds shall be able to obtain
certificated Bonds, Issuer or Agent shall notify DTC of the availability of Bond certificates. In such
event, Issuer or Agent shall issue, transfer, and exchange Bond certificates in appropriate amounts,
as required by DTC and others.
13, DTC may disconlJnue providing its services as securities depository with ~ to the
Bonds at any time by giving reasonable n~8ce to Issuer or Agent (at which lime DTC will confirm
with Issuer or Agent the aggregate principal amount of Bonds outstanding). Under such
circumstances, at DTC's request Issuer and Agent shall cooperate fully with DTC by takin~
~t~propriate action to make a~ailable one or more separate certificates evidencing Bonds to an)
DTC Participant having Bonds credited to its DTC accounts.
14, Nothing herein shall be deemed to require Agent to advance funds on behalf of Issuer.
Notes:
A. If there is an Agent las defined in this Letter of
Repre~_ntations), Agent as well as Issuer must ~ thxs
Leiter. ~ there is n~ A~en~ in si~rti~ ~ Letter Issuer
hem~.
B. Under Rules of the M .u~icipa] Securities Rulemaking
&aler must b~ able m demanin~ the date thai a no~ee ota
.pa..r..t.t~.' call or of an advance nffundh'rg ora lX~. of an issue~
i~.lishe4 (the 'publication date').~ne ~atbk4nnent ol
hx~h a pub 'heatioh date is addressed in Paragraph 3 of the
C. Schedule B contains statements that DTC believes
entry uafisfers of ~ d~ihaed th, uugh DTC, and
eerthin ~ matters.
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
Very truly yours,
(Issuer)
(Authorized Officers Signature)
(Agent)
By;
(Authorized Officer~ Signature)
(Authorized Officer)
(2~2: Underwriter
Under~viter~ Counsel
(Describe Issue)
SCHEDULE A
~I:3USlP Principal Amount Maturity Date Interest Rate
SCHEDULE B
SAMiPLE-OFFIClAL STATEMENT LANGUAGE
OESCRIBING BOOK-ENTRY-ONLY ISSUANCE
(Pmpareciby DTC,~bracketed material may be applicable on y to certain issues)
.1. The ~ory Trust Company '("DTC"), New York, NY, will act as securities depository for the securities (the
~'~). ~q3e Secu~ .w'll be issued as fully-registered securities registered in the name of Cede & Co. (DTC's
:~,lT"a,ship norm3ee)~Or~ ~l!y-registered Secudty certificate will be issued for [each issue of] the Securities, [each] in
theaggregate principa~ amount of such 'issue, and will be deposited with DTC. [If, however, the aggregate pdncipat
amount of [any] issue exceeds $t'50 m~llion,.one certificate will be issued with respect to each $150 million of principal
amount and .an additional certificate will' be issued with respect to any remaining principal amount of such issue.]
2. DTC is a ~nfted~put3:~se truSt company,organized under the New York Banking Law, a "banking organization"
.wifl3in t~ Law~ a member of the Federal Reserve System, a "clearing corporation"
within-the ~ Uniforrn Commercial Code, and a "c~ring agency" registered pursuant to the
.provisions of Section: 17AOfthe Act-of 1934. DTC holds securities that its participants
(-Participants") deposit .with :~DTC. :DTC alSo Participants of securities transactions
such as transfers and ~ic computerized book-entry changes in
~1 movement of securities certificates. Direct
cleadng corporations, and certain other
Participants and by the' New York Stock Exchange, Inc., the
American Stock ExC',ange, lnc., Inc. Access to the DTC system is
also available to banks, and trust companies that clear through or
~ or indirectly ("Indirect Participants"). The Rules
3ommission.
3. ~Purchases of Secu~s under the DTC system must ~be made by or through Direct Participants, which will
receive a credit for the :Securities on DTC's records. The ownership interest of each actual purchaser of each Security
('Beneficial Owr~r")is in ~to be recorded.on the Direct and Indirect Participants' records. Beneficial Owners will
the event,that useof the book-entrysystem-for the
4. To
DTC~ ~[
& Co. effect ~no change 'in :beneficial ownership.
but Ber~cial Owners are expected to receive written
statements of their holdings, from the Direct or
entered.into the transaction. Transfers of ownership interests
; on the books of Participants acting on behalf of Beneficial
I their ownership interests in Securities, except in
with DTC are registered in the name of
Mth DTC and their registration in the name of Cede
no knowledge of the actual Beneficial Owners of the
Securities; , the identity ~ the~.Direct Participants to whose accounts such Securities are
Participants will remain responsible for keeping
5. ~ of ~ices and other communications by DTC to. Direct Participants, by Direct Participants to
Indirect Participants, :and by ~Participants and Indirect :Participants to Beneficial Owners will be governed by
arrangements amongthem, ~.a3 any statutory er.regulatory requirements as may be in effect from time to time.
[6. Redemptior~ ~ .sha~t be ~ '~o ~ I~[ CoJ ~f ~ess than all of the Securities within an issue are being
redeemed, DTC~s practice is to ~ine by:tOt the amount of the interest of each Direct Participant in such issue to
be redeamed.]
7. Neither DTC nor Cede & Co. w~l consent or'vote with respect to Securities. Under its usual procedures, DTC
mails an Omnibus Proxy to the Issuer as soon.as possible after the record date. The Omnibus Proxy assigns Cede &
Co.!s consenting or voting fights to those Direct Participants to whose accounts the Securities are credited on the
record date (k~mfif,~l in a listing attached to the Omnibus Proxy).
8.-Principal and interest payments on the Securities will be made to DTC. DTC's practice is to credit Direct
Participants' accounts on payable date in accordance with their respective holdings shown on DTC's records unless
DTC I~_s reason to believe that it will not receive payment on payable date. Payments by Participants to Beneficial
Owners will :be governed by standing instructions and customaw practices, as is the cass with securities held for the
.... · be the responsibility of such Participam
:accounts of customers ~n bearer form or registered ~n 'street name," and
ancl not of DTC, the Agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from
~rm to time. Payment of ~pai. and interest to DTC is the responsibility of the Issuer or the Agent, disbursement
auch payments to Direct participants st'~l be the responsibility of DTC, and disbursement of such payments to the
~ Owners shall be the responsibility of Direct and Indirect Participants.
~J.' A Beneficial ~er shall give- notice to elect to have its Securities purchased or tendered, through its
Participant, to the ['i'ender/Remarketing] Agent, and shall effect delivery of such Securities by causing the Direct
~ to transfer the Participant's interest in the Securities, on DTC's records, to the [TenderA=lemarketing] Agent.
The requirement for physical delivery of Securities in connection with a demand for purchase or a mandatory
~purct~...~ will be deemed satiCed when the ownership rights in the Securities are transferred by Direct Participants on
DTO's records.]
10. :DTC may discontinue providing its services as securities depository with respect to the Securities at any time
by gMng reasonable notice to the Issuer or the Agent. Under such circumstances, in the event that a successor
¢ depository is not obtained, Security certificates are required to be pdnted and delivered.
11. The Issuer may decide to discontinue use of the system of book-entry transfers through DTC (or a successor
securities depository). In that event, Security certificates will be printed and delivered.
12: The information in this section concerning DTC and DTC's book,entry system has been obtained from sources
.that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof.
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