R02-207RESOLUTION NO. 02- ,~ O'"/
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
BOYNTON BEACH, FLORIDA AUTHORIZING THE ISSUANCE
OF ITS NOT TO EXCEED $15,000,000 MULTI-FAMILY
HOUSING MORTGAGE REVENUE REFUNDING BONDS,
SERIES 2002 (CLIPPER COVE APARTMENTS) FOR THE
PURPOSE OF PROVIDING FUNDS TO REFUND THE CITY'S
MULTI-FAMILY HOUSING MORTGAGE REVENUE BONDS,
SERIES 1996 (CLIPPER COVE APARTMENTS); APPROVING
THE FORM OF AND AUTHORIZING THE EXECUTION OF A
LOAN AGREEMENT, TRUST INDENTURE, ESCROW DEPOSIT
AGREEMENT, BOND PURCHASE AGREEMENT, FIRST
AMENDMENT TO RESTRICTIVE COVENANTS AND FIRST
AMENDMENT TO DEFINITIVE AGREEMENT; APPROVING THE
FORM OF A PRELIMINARY OFFICIAL STATEMENT AND
AUTHORIZING THE PREPARATION, EXECUTION AND
DELIVERY OF A FINAL OFFICIAL STATEMENT; AWARDING
THE SALE OF THE BONDS BY A NEGOTIATED SALE;
AUTHORIZING CERTAIN OFFICIALS AND EMPLOYEES OF
THE 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 ISSUANCEOF THE BONDS; AND
PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Boynton Beach, Florida (the "Issuer") is a municipality and political
subdivision of the State of Florida and is empowered by the provisions of the Florida Constitution and
Chapter 166, Florida Statutes (the "Act"), to issue obligations for the purpose of financing multi-family
housing project, including refinancing obligations issued by the Issuer for such purpose; and
WHEREAS, in July, 1996, the Issuer issued its $11,940,000 Multi-Family Housing Mortgage
Revenue Bonds, Series 1996 (Clipper Cove Apartments) (the "1996 Bonds") for the principalpurpose of
making a loan to C/HP Cove, Inc. ("C/HP Cove") to refinance the costs of a multi-family housing facility
within the City of Boynton Beach, Florida; and
WHEREAS, C/HP Cove has requested the Issuer issue a new series of revenue bonds and loan the
proceeds thereof to C/HP Cove for the principal purpose of providing funds to refund the 1996 Bonds;
and
WHEREAS, the Issuer has determined to issue its Multi-Family Housing Mortgage Revenue
Refunding Bonds, Series 2002 (Clipper Cove Apartments) in the principal amount of not exceeding
$15,000,000 (the "Bonds") as further provided herein; and
WHEREAS, on December 3, 2002 the Issuer conducted a public hearing as required by Section
147(f) of the IntemalRevenue Code of 1986, as amended, with respect to the issuance of the Bonds; and
WHEREAS, the Issuer and C/HP Cove have received a proposed form of Bond Purchase
Agreement (the "Underwriting Agreement") from RBC Dain Rauscher, Inc. and Bear Steams & Co. Inc.
(the "Underwriters") to purchase the Bonds on the basis of the terms and provisions therein; and
WHEREAS, it is necessary and desirable to approve the form of and to authorize the execution of
an Indenture of Trust, a Loan Agreement, an Escrow Deposit Agreement, the Underwriting Agreement,
a First Amendment to Restrictive Covenants and a First Amendment to Definite Agreement in connection
with the issuance of the Bonds; and
WHEREAS, it is necessary and desirable to approve the form of a Preliminary Official Statement
and to authorize the preparation, execution and delivery of a final Official Statement for the Bonds;
WHEREAS, it is necessary and desirable 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 purchase thereof by 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 BY THE CITY COMMISSION OF THE CITY OF
BOYNTON BEACH, FLORIDA 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
attached hereto as Exhibit "A" (the "Indenture").
Section 2. Authority_ for this Resolutior~ This resolution, herein called the "Resolution," is adopted
pursuant to the Act.
Section 3. Findings. It is hereby ascertained, determined and declared that the issuance of the
Bonds in order to provide funds to refund the 1996 Bonds is appropriate to the needs and circumstances
of, and will make a 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.
Section 4. Authorization of Bonds. The Issuer approves the Bonds for purposes of Section 147(0
of the Code. Subject and pursuant to the provisions hereof and of the Indenture, for the purpose of
-2-
refunding the 1996 Bonds, the issuance of revenue bonds of the Issuer under the authority of the Act in the
principal amount of not to exceed $15,000,000 is hereby approved. The City Manager is hereby
authorized to award the sale of the Bonds in an aggregate principal amount sufficient, together with other
available funds of C/HP Cove, to refund the 1996 Bonds and to pay the costs associated with issuance of
the Bonds, as requested by C/HP Cove, provided that the aggregate principal amount of the Bonds shall
not exceed $15,000,000, the interest rate on the Bonds shall not exceed the maximum rate per annum
permitted by law 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 C/HP Cove and set forth in the Underwriting Agreement.
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 suchprice and have such other
details, terms and conditions, and shall be executed on behalf of the Issuer, all as set forth in the Indenture.
Section 5. Authorization o fExecution and Delivery_ o fthe Indenture. The Indenture, in substantially
the form thereof attached hereto as Exhibit "A," with such changes, alterations and corrections as may be
approved by the City Manager, such approval to be presumed by the execution thereof by the City
Manager, is hereby approved by the Issuer, and the Issuer hereby authorizes and directs the City Manager
to execute the Indenture and the Clerk to attest thereto under the official seal of the Issuer, and to deliver
the Indenture to the Trustee, 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 6. Authorization of Execution and Delivery. of the Loan Agreement. The Loan Agreement,
in substantially the form thereof attached hereto as Exhibit "B," with such changes, alterations and
corrections thereto as may be approved by the City Manager, such approval to be presumed by the
execution thereof by the City Manager, is hereby approved by the Issuer, and the Issuer hereby authorizes
and directs the City Manager to execute the Loan Agreement and the Clerk to attest thereto under the
officialseal of the Issuer, and to deliver the Loan Agreement to C/HP Cove, all of the provisions o fwhich,
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. Sale of Bonds: Execution and Delivery of the Underwriting Agreement. The
Underwriting Agreement, in substantially the form thereof attached hereto as Exhibit "C," with such
changes, alterations and corrections thereto as may be approved by the City Manager, such approval to
be presumed by the execution thereof by the City Manager, is hereby approved by the Issuer, and, upon
execution thereof by C/HP Cove and Underwriters, the Issuer authorizes and directs the City Manager to
execute the Underwriting Agreement and the Clerk to attest thereto under the officialsealofthe Issuer, and
to deliver the Underwriting Agreement to the Underwriters, 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. The Issuer hereby determines that a negotiated sale
-3-
of the Bonds is in the best interest ofthe Issuer, C/HP Cove and the citizens and inhabitants of the Issuer
by reason of the limited market for bonds such as the Bonds (due, among other reasons, to the fact that
the Bonds are limited obligations of the Issuer payable only from the sources provided therefor in the
Indenture) and because revenue bonds such as the Bonds are typically sold by negotiated sale. Prior to
the issuance of the Bonds the Underwriter shall file with the Issuer the disclosure required by Section
218.385, Florida Statutes, and competitive bidding for the Bonds is hereby waived.
Section 8. AuthorizationofExecution and Delivery. of the Escrow Deposit Agreement. The Escrow
Deposit Agreement, in substantially the form thereof attached hereto as Exhibit "D," with such changes,
alterations and corrections thereto as may be approved by the City Manager, such approval to be
presumed by the executionthereofby the City Manager, is hereby approved by the Issuer, and the Issuer
authorizes and directs the City Manager to execute the Escrow Deposit Agreement and the Clerk to attest
thereto under the official seal of the Issuer, and to deliver the Escrow Deposit Agreement to C/HP Cove,
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 9. Authorization of Execution and Delivery. of the First Amendment to Restrictive
Covenants. The First Amendment to Restrictive Covenants, in substantially the form thereof attached
hereto as Exhibit "E," with such changes, alterations and corrections thereto as may be approved by the
City Manager, such approval to be presumed by the execution thereof by the City Manager, is hereby
approved by the Issuer, and the Issuer hereby authorizes and directs the City Manager to execute the First
Amendment to Restrictive Covenants and the Clerk to attest thereto under the official seal of the Issuer,
and to deliver the First Amendment to Restrictive Covenants to C/HP Cove, 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 10. Authorization of Execution and Delivery of the First Amendment to Definitive
Agreement. The First Amendment to Definitive Agreement, in substantially the form thereof attached
hereto as Exhibit "F," with such changes, alterations and corrections thereto as may be approved by the
City Manager, such approval to be presumed by the execution thereof by the City Manager, is hereby
approved by the Issuer, and the Issuer hereby authorizes and directs the City Manager to execute the First
Amendment to Definitive Agreement and the Clerk to attest thereto under the official sealof the Issuer, and
to deliver the First Amendment to Definitive Agreement to C/HP Cove, 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 11. Approval o fPreliminary Official Statement and authorization of final Official Statement
The Issuer hereby approves the form of draft Preliminary Official Statement for the Bonds attached hereto
as Exhibit "G", together with such changes, alterations and corrections therein as may be approved by the
Bond Counsel, and authorizes its use by the Underwriter in connection with the marketing of the Bonds.
The Issuer hereby approves preparation ofa fmalOfficialStatement with respect to the Bonds, which shall
be in the form of the final Preliminary Official Statement, which such changes, alterations and corrections
-4-
therein as shall be necessary to reflect the terms of the Bonds and such other matters as may be approved
by the City Manager, suchapprovalto be conclusively evidenced by the execution of the OfficialStatement
by the City Manager, and the Issuer authorizes and directs the City Manager to execute the Official
Statement as so approved in the name of the Issuer.
Section 12. No Personal Liability. No covenant, stipulation, obligation or agreement herein
contained or contained in the Loan Agreement, the Escrow Deposit Agreement, the Indenture, the
Underwriting Agreement, the First Amendment to Restrictive Covenants, the First Amendment to Definitive
Agreement, the Official Statement, 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 o f the
Issuer in his or her individual capacity, and neither the City Manager nor any member of the City
Commission 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 13. No Third Pa~ty 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, C/HP Cove, the
Bondholders, the Underwriters, the Insurer and the Trustee any right, remedy or claim, legalor equitable,
under and by reason of this Resolution or any provision hereofor of such documents; this Resolution and
such documents being intended to be and being for the sole and exclusive benefit of such parties.
Section 14. Prerequisites Performed. All 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 15. General Authority. The Clerk, the City Manager and the members of the City
Commission of the Issuer are hereby authorized to do all acts and things required of them by this
Resolution, the Loan Agreement, the Underwriting Agreement, the Escrow Deposit Agreement, the Bonds,
the Official Statement, the First Amendment to Restrictive Covenants, the First Amendment to Definitive
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
Loan Agreement, the Escrow Deposit Agreement, the Underwriting Agreement, the Indenture, the Official
Statement, the First Amendment to Restrictive Covenants, the First Amendment to Definitive Agreement
and this Resolution.
Section 16. General Authorizations. The Mayor, and any other member of the City Commission
of the Issuer, the City Manager, 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 Bonds, the Official Statement, the Escrow Deposit Agreement, the Loan Agreement, the
-5-
First Amendment to Restrictive Covenants, the First Amendment to Definitive Agreement and the
Underwriting Agreement.
Section 17. Resolution Constitutes a Contract. The Issuer covenants and agrees that this Resolution
shall constitute a contract between the Issuer and the Bondholders fromtime to time of the Bonds and that
all covenants and agreements set forth herein and in the Loan Agreement, Escrow Deposit 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 18. Severabili .ty. 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 19. Repealer. All 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 20. Effective Date. This Resolution shall take effect immediately upon its adoption.
PASSED AND ADOPTED in regular session on this, the 3rd day of December, 2002.
(SEAL
~ ~L 0 R~O B.x%~
~z/iii Ill
Approved'/ fo ,/~/
,/~s to legal sufficiency
C~ty Attorney
City of ~ynto~n B/~, F~da ,
M
ayor ~
Co~issioner
-6-
THE PALM BEACH POST
Published Daily and Sunday
West Palm Beach, Palm Beach County, Florida
PROOF OF PUBLICATION
NO. 6768007
CITY OF BOYNTON BEACH,
STATE OF FLORIDA
COUNTY OF PALM BEACH
Before the undersigned authority personally appeared Wendy Elliott, who on oath says that she
is Telephone Sales Supervisior of The Palm Beach Post, a daily and Sunday newspaper
published at West Palm Beach in Palm Beach County, Florida; that the attached copy of
advertising, being a Notice in the matter of Public Notice was published in said newspaper in
the issues of November 19~ 2002. Affiant fu~er says that the said The Post is a newspaper
published at West Palm Beach, in said Palm Beach County, Florida, and that the said newspaper
has heretofore been continuously published in said Palm Beach County, Florida, daily and
Sunday and has been entered as second class mail matter at the post office in West Palm Beach,
in said Palm Beach County, Florida, for a period of one year next preceding the first publication
of the attached copy of adve~isement; and affiant fm~her says that she/he has ncihhcr paid nor
promised any person, from or corporation any discount rebate, commission or refund for the
purpose of securing this advertisement for publication in the said newspaper.
Sworn to and subscribed before this 19n dayo~l~~ 2002 ~vi ' -.o,.
Personally known XX or Produced Identification
Type of Identification Produced
Public notice IS hereby given
that the City Commission of
the City of Boynton Beac
Florida-(the "Commlssicn'
~l _~ofd i.pub~c he~.g
me ~omm~smon Chamber
100 East Boynton ~Beac
uioverd, Bolmton
Iorlfla 33435, during
meeting commencing i
6:30 p.m. on December ,'
~)02, or as e~on themata
as possible, on.the pfc
of its industrial revenu
bonds (the "Bonds') n a
princt~)al amount not to
exceed $15 000,000, for
the principal purposes of
providing a loin'to C/HP
CoVe, Inc. (the 'Corpora-
rich)to refund the City's
Multl~Family Ho~al_ng: Mort-
gage Hevenue ~onds,
Series 1998 (Clipper Cove
Apartments) (the
"Refunded Bdhds") ~nd to
finance the acqu'l$1flon,
construction'and eQull~ing
of.capital expendifdres
remtingto a 384-Unit
property located at 1500
southern C~oas Lane
~ith Pr0ceede of the
~ ~. &H fSCllF
i'tles financed and reft-
nenced with ~ Bonde will
neanng,held com~ the
issHa.~e' of the Be~da."A~yi
at thmr option submit writ'-]
ten comments to the Citl
Manager, 100 East Boyn
ton .Beach, Florida 33435
prior to the hear~g. Wrltter
comments should b~
received by the City on or
before 5:00 p.m. Deiember
3, 2002. Any person desir-
ing to present oral com-
~mac~.' .~h~u. Id aPgeer at the
oy ms ~ommioSion with
respect to any matter con-
sidereal at this meeting or
to have a record of the pro-
ceedln, gs and for such pur-
pose, ne or she may need
to ensure that a verbatim
made, which record
includes the testimony and
evidence upon which the
PU~: The Palm Beach P~st
November 19, 2002
EXHIBIT "A"
INDENTURE OF TRUST
INDENTURE OF TRUST
between
CITY OF BOYNTON BEACH, FLORIDA
and
THE BANK OF NEW YORK TRUST COMPANY OF FLORIDA, N.A., as Bond Trustee
Dated as of December 1, 2002
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION ................................. 2
Section 101. Definitions ................................................. 2
Section 102. Rules of Construction ........................................ 4
ARTICLE II
AUTHORIZATION, EXECUTION, AUTHENTICATION,
REGISTRATION AND DELIVERY OF BONDS .................................... 5
Section 201.
Section 202.
Section 203.
Section 204.
Section 205.
Section 206.
Section 207.
Section 208.
Section 209.
Section 210.
Section 211.
Section 212.
ARTICLE III
Authorization of City Bonds ................................... 5
Details of City Bonds; Provisions Regarding Interest and Payment ..... 5
Execution of City Bonds ...................................... 6
Authentication of Ci_ty Bonds .................................. 6
Form of the Ci_ty Bonds ....................................... 6
Delivery of the Ci_ty Bonds .................................... 6
Registration of City Bonds; Persons Treated as Owners .............. 7
Exchange of City Bonds ...................................... 7
Charges for Exchange and Registration ........................... 7
Mutilated, Lost or Destroyed City Bonds ......................... 7
Cancellation and Distribution of City Bonds ....................... 8
Application of CiW Bond Proceeds .............................. 8
REDEMPTION AND TENDER OF BONDS ........................................ 8
Section 301. Redemption Dates and Prices .................................. 8
Section 302. Manner of Redemption ....................................... 9
Section 303. Notice of Redemption ....................................... 10
Section 304. Mandato~ Tender of City Bonds ............................... 10
ARTICLE IV
GENERAL COVENANTS AND PROVISIONS .................................... 11
Section 401. Payment of CiW Bonds ...................................... 11
Section 402. Performance of Issuer's Covenants ............................. 12
Section 403. Instruments of Further Assurance .............................. 12
Section 404. Rights under Restrictive Covenants ............................. 12
Section 405. Prohibited Activities ........................................ 12
Section 406. Reports of Bond Trustee ..................................... 13
Section 407. Secondary_ Market Disclosure ................................. 13
ARTICLE V
FUNDS
Section 501.
Section 502.
Section 503.
Section 504.
Section 505.
Section 506.
ARTICLE VI
Establishment of Funds ...................................... 13
Rebate Fund ............................................... 13
Bond Fund ................................................ 14
Cost of Issuance Fund ....................................... 15
Monies to Be Held in Trust ................................... 15
Repayment to Borrower ...................................... 15
PROJECT FUND ............................................................. 15
Section 601. Creation of Project Fund ..................................... 15
Section 602. Payments into Project Fund ................................... 15
Section 603. Payments from Project Fund .................................. 15
ARTICLE VII
INVESTMENTS ............................................................. 15
Section 701. Investment of Funds ......................................... 15
-i-
Section 702. Investments through Bond Trustee's Bond Department .............. 16
ARTICLE VIII
DISCHARGE OF INDENTURE ................................................. 16
Section 801. Discharge of Indenture ....................................... 16
Section 802. Payments by Insurer ......................................... 17
ARTICLE IX
DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND BONDHOLDERS ...... 17
Section 901.
Section 902.
Section 903.
Section 904.
Section 905.
Section 906.
Section 907.
Section 908.
Section 909.
Section 910.
Section 911.
Section 912.
ARTICLE X
Events of Default ........................................... 17
Acceleration ............................................... 18
Other Remedies; Rights of Bondholders ......................... 18
Right of Bondholders to Direct Proceedings ...................... 18
Application of Monies ....................................... 19
Remedies Vested in Bond Trustee .............................. 20
Limitations on Suits ......................................... 20
Waivers of Events of Default .................................. 20
Unconditional Right to Receive Principal, Premium and Interest ...... 21
Notice of Defaults; Opportunity_ to Cure Defaults .................. 21
Direction of Remedial Proceedings by the Insurer ................. 21
Insurer or Bondholders Deemed Holders of Obligation No. 1 ........ 21
Section
Section
Section
Section
Section
Section
Trustee
Section
Section
Section
Section
ARTICLE XI
THE TRUSTEE .............................................................. 21
Section 1001. Acceptance of Trusts ........................................ 21
1002. Fees, Charges and Expenses of Bond Trustee ..................... 24
1003. Intervention by Bond Trustee .................................. 24
1004. Merger or Consolidation of Bond Trustee ........................ 24
1005. Resignation by Bond Trustee .................................. 24
1006. Removal of Bond Trustee .................................... 24
1007. Appointment of Successor Bond Trustee by Bondholders; Temporary Bond
· ........................... .... ...............................24
1008. Concerning any Successor Bond Trustee ......................... 24
1009. Bond Trustee Protected in Relying Upon Resolutions, etc ........... 25
1010. Notice to Rating Agency and Insurer ............................ 25
1011. Certain Rights of the Insurer With Respect to the Bond Trustee ....... 25
Section 1101.
Section 1102.
Section 1103.
Section 1104.
Amendments,
Section 1105.
ARTICLE XII
SUPPLEMENTAL INDENTURES ............................................... 25
Supplemental Indentures Not Requiring Consent of Bondholders ..... 25
Supplemental Indentures Requiring Consent of Bondholders ......... 26
Opinion of Counsel and Consent of C/HP Cove Required ........... 27
Bond Trustee's Obligation Regarding Supplemental Indentures and
etc., to Loan Agreement and Restrictive Covenanm ................. 27
Consent of Insurer .......................................... 27
AMENDMENT OF LOAN AGREEMENT
AND OTHER DOCUMENTS ................................................... 27
Section 1201. Amendments to Loan Agreement and Other Documents Not Requiring
Consent of Bondholders .................................................. 27
Section 1202. Amendments to Loan Agreement and Other Documents Requiring Consent
of Bondholders ......................................................... 28
Section 1203. Limitation on Amendments ................................... 28
Section 1204. Amendment by Unanimous Consent ............................ 28
Section 1205. Opinion of Counsel Required and Consent of C/HP Cove Required ... 28
Section 1206. Consent of Insurer .......................................... 28
ARTICLE XIII
THE BOND INSURANCE POLICY AND THE INSURER ........................... 29
Section 1301. Payment Procedure Under the Bond Insurance Policy .............. 29
-ii-
ARTICLE XIV
MISCELLANEOUS
Section 1401.
Section 1402.
Section 1403.
Section 1404.
Section 1405.
Section 1406.
Section 1407.
Section 1408.
Section 1409.
Section 1410.
Exhibit A
Exhibit B -
31
Limitation of Rights ......................................... 31
Limitation of Liability of Issuer ................................ 31
Notices
Insurer a~'~ir~f~ii~-~ i i i i i i i i i i i i i i i i ........................ 32
......................... 33
Successors and Assigns ...................................... 33
Sevembili _ty ............................................... 33
Applicable Law ............................................ 33
Counterparts ............................................... 33
Election under Section 142(d)(1) o£the Code ..................... 33
Bond Form
Form of Requisition
.oo
-111-
THIS INDENTURE OF TRUST, is made as of the first day of December, 2002, and is 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 TRUST COMPANY OF
FLORIDA, N.A., a national banking association duly organized and existing under the laws of the
United States, together with any successor, as trustee (the "Bond Trustee');
WITNESSETH:
WHEREAS, the Issuer is a political subdivision and municipality of the State of Florida; and
WHEREAS, pursuant 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 for residential rental property for family units; and
WHEREAS, in order to further the purposes of the Act, the Issuer proposes to issue its
Multi-Family Housing Mortgage Revenue Refunding Bonds, Series 2002 (Clipper Cove
Apartments), in the amount ors (the"City Bonds",anduse the proceeds thereoftomake a
loan to C/HP Cove, Inc., a Florida corporati°nn0t-f°r-pr°fit ("C/HP Cbve")'Under thetermsof a
Loan Agreement, dated as of the date hereof(the "Loan Agreement"), between the Issuer and C/HP
Cove, to be used by C/HP Cove for the principal purpose of advance-refunding the Issuer's Multi-
Family,, Housing. Mortgage. Revenue Bonds, Series 1996 (Clipper Cove Ap artments)(the "Refunded
Bonds ) which were issued by the Issuer in order to assist C/HP Cove in refinancing a multi-family
residential rental project in the City of Boynton Beach, Florida (the "Project"); and
WHEREAS, the Issuer intends to assign to the Bond Trustee, as security for the City Bonds,
substantially all of its rights under the Loan Agreement; and
WHEREAS, as security for its obligations under the Loan Agreement C/HP Cove will deliver
to the Bond Trustee its Obligation No. 1 issued pursuant to the Master Indenture (hereinafter
defined); and
WHEREAS, the City Bonds, the Bond Tmstee's certificate of authentication to be endorsed
on each of them and the form of assigranent to be printed on each of them are to be in substantially
the form attached as Exhibit A, with appropriate variations, omissions and insertions as are permitted
or required by this Indenture; and
WHEREAS, all things necessary to make the City Bonds, when authenticated by the Bond
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 City Bonds issued hereunder, have been done and
performed and the execution and delivery of this Indenture and the execution and issuance of the
City 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 City Bonds and for the funds which may be advanced by the Bond Trustee pursuant hereto, does
hereby pledge and assign without recourse to the Bond Trustee all of the Issuer's right, title and
interest in and to the following described property:
A. Obligation No. 1;
B. The Loan Agreement (except for the right of the Issuer to payment of its fees and its
costs and expenses pursuant to Sections 4.1 (b) and 6.4 of the Loan Agreement), and all revenues and
receipts derived by the Issuer therefrom;
C. The funds, including monies and investments therein, held by the Bond Trustee
pursuant to the terms of this Indenture;
D. The fight to enforce the Restrictive Covenants (as hereinafter defined), provided the
Issuer also reserves certain fights to enforce the same as provided herein; and
E. All other property of every name and nature from time to time hereat~er by delivery
or by writing, pledged, delivered or hypothecated as and for additional security hereunder by the
Issuer or by anyone else in favor of the Bond Trustee and the Bond 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 to be conveyed and assigned, to the Bond Trustee and
its successors in such trust and their assigns forever;
1N TRUST, however, for the equal and proportionate benefit and security of the owners from
time to time of the City Bonds issued under and secured by this Indenture without privilege, priority,
or distinction as to the lien or otherwise of any of the City Bonds over any of the others except as
otherwise provided herein, and for the benefit, security and protection of the Insurer (hereinafter
defined) (so long as the Insurer is not in payment default under the Bond Insurance Policy
(hereinafter defined)), upon the terms and conditions hereinafter stated;
The Issuer hereby covenants and agrees with the Bond Trustee and with the respective
owners, from time to time, of the City Bonds as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 101. Definitions. All words and terms defined in the Master Indenture, Loan
Agreement, Mortgage and Restrictive 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 and Chapter 166, Florida Statutes.
"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 City Bonds (including persons
holding City Bonds through nominees, depositories or other intermediaries), or (b) is treated as the
owner of any City Bonds for federal income tax purposes.
"Bond Fund" means the Bond Fund created by Section 501.
"Bond Insurance Policy" means the Bond Insurance Policy issued by the Insurer guaranteeing
the payment of principal and interest on the City Bonds.
"Bond Insurance Premium for the City Bonds" means the annual, non-refundable, premium
payable to the Insurer for the issuance of the Bond Insurance Policy, which shall be an amount equal
to 0.60% of the outstanding principal balance of the City Bonds on the date such premium is due,
due and payable in advance on January 1 of each year commencing January 1, 2004.
"Bond Trustee" shall mean The Bank of New York Trust Company of Florida, N.A., or its
successors serving as such hereunder.
2
"Bond Trustee Fees and Expenses" shall mean the fees and expenses of the Bond Trustee
incurred pursuant to this Indenture, which, for so long as the Bond Trustee and Master Trustee are
the same entity, shall be included in and covered by the Master Trustee Fees and Expenses.
"Bond Year" shall mean the 12-month period (or portion thereof as to the first Bond Year)
ending on and including January 1 of each year.
"Bondholder," "Holder" or "Owner" shall mean the registered owner of any City Bond.
"City Bonds" means the obligations of the Issuer authorized in Section 201 hereof.
"Business Day" shall mean any day other than a Saturday, Sunday, or a day on which the
Principal Office of the Bond Trustee is lawfully closed.
"C/HP Cove" 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 its successors.
"Code" shall mean the Internal Revenue Code of 1986, as amended, as it applies to the City
Bonds, including applicable regulations and revenue rulings thereunder. Reference herein to any
specific provision of the Code shall be deemed to include any successor provision of such provision
of the Code.
"Cost of the Project" shall mean the items described in Article VI.
"Cost of Issuance" shall mean fees and expenses (including legal fees) of the Issuer, the Bond
Trustee, the Underwriters and C/HP Cove, title insurance premiums, appraisal and structural reviews
and all other costs and expenses related to the issuance of the City Bonds.
"Cost of Issuance Fund" shall mean the Cost of Issuance Fund created by Section 501.
"Escrow Deposit Agreement" shall mean the Escrow Deposit Agreement, dated of even date
herewith, by and among C/HP Cove, the Issuer and The Bank of New York, as escrow agent and
trustee for the Refunded Bonds.
"Event of Default" shall mean any of the events enumerated in Section 901.
"Extraordinary Bond Trustee Fees and Expenses" shall mean the extraordinary fees and
expenses of the Bond Trustee (including legal fees) beyond its ordinary annual fees.
"Government Obligations" shall mean either noncallable direct full faith and credit
obligations of the United States of America or noncallable 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.
"Indenture" shall mean this Indenture of Trust including any amendments or supplements
hereto as herein permitted.
"Issuer" shall mean City of Boynton Beach, Florida, and its successors and assigns.
"Loan" shall mean the loan from the Issuer to C/HP Cove to be made in the manner provided
in the Loan Agreement.
"Loan Agreement" shall mean the Loan Agreement, dated as of the date hereof, between the
Issuer and C/HP Cove, including any amendments thereto as herein permitted.
"Master Indenture" shall mean the Master Trust Indenture, dated of even date herewith,
between C/HP Cove and The Bank of New York Trust Company of Florida, N.A., as Master Trustee.
"Obligation No. 1" means Obligation No. 1 issued by C/HP Cove pursuant to the Master
Indenture.
"Payment of the City Bonds" shall mean payment in full of principal of, premium, if any, and
interest on the City Bonds or provision for such payment sufficient to discharge this Indenture as
provided herein.
"Principal Office" shall mean, with respect to the Bond Trustee, the office designated in or
pursuant to Section 1404 hereof.
"Project Fund" shall mean the Project Fund created by Section 601.
"Rebate Amount" shall mean the rebate amount for the City 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
by C/HP Cove.
"Rebate Fund" shall mean the Rebate Fund created by Section 501.
"Refunded Bonds" shall mean the Issuer's Multi-Family Housing Mortgage Revenue
Refunding Bonds, Series 1996 (Clipper Cove Apartments) as shall be unpaid on the date of issuance
of the City Bonds.
"Requisition" shall mean a request for a disbursement from the Project Fund which shall be
in the form of Exhibit B hereto.
"Restrictive Covenants" shall mean the Declaration of Restrictive Covenants, dated as of
July 1, 1996, as amended by the First Amendment to Declaration of Restrictive Covenants, dated
of even date herewith, by and among C/HP Cove, the Issuer and the Bond Trustee, as the same may
be amended in accordance with the provisions hereof.
"Securities Depository" shall mean initially The Depository Trust Company and any
successor depository for the City Bonds as provided in Section 202.
Section 102. Rules of Construction. Unless the context clearly indicates to the contrary,
the following rules shall apply to 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 City Bonds shall not
be deemed to refer to or connote the payment of City Bonds at their stated maturity.
(c) All accounting terms not defined herein shall be defined in accordance with GAAP.
(d) All 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 reference and shall not constitute
a part of this Indenture nor shall they affect its meaning, construction or effect.
4
(f) This Indenture shall be construed for the benefit of C/HP Cove and the Issuer to the
extent not inconsistent with the fights of the Bond Trustee and the Bondholders.
ARTICLE II
AUTHORIZATION, EXECUTION, AUTHENTICATION,
REGISTRATION AND DELIVERY OF BONDS
Section 201. Authorization of City Bonds. There are hereby authorized to be issued the
Issuer's Multi-Family Housing Mortgage Revenue Refunding Bonds, Series 2002 (Clipper Cove
Apartments) in the amount of Dollars
($ ).
Section 202. Details ofCi _ty Bonds; Provisions Regarding Interest and Payment. The City
Bonds shall be dated December 20, 2002, shall be issuable as fully registered City Bonds without
coupons in the denomination of $5,000 or any integral multiple thereof.
The City Bonds shall be numbered R-1 upward, shall bear interest, payable on each Interest
Payment Date, at the rates, subject to adjustment as provided in Section __ hereof, and shall
mature on the dates and in the amounts as provided below:
Interest January 1 July 1
Year Rate Amount Amount
Each City Bond shall bear interest from the Interest Payment Date next preceding the date
on which it is authenticated, unless such City Bond is (a) authenticated before the first Interest
Payment Date following the initial delivery of City 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 from
such Interest Payment Date; provided, however, that if at the time of authentication of any City Bond
interest is in default, such City Bond shall bear interest from the date to which interest has been paid.
Interest on the City Bonds shall be calculated on a 360-day year of twelve 30-day months.
Principal of and premium, if any, on the City Bonds shall be payable at the designated office
of the Bond Trustee (initially, New York, New York). Principal and premium, if any, shall be
payable upon presentation and surrender of the City Bonds as the same become due. Interest on the
City Bonds shall be paid to the persons in whose name the City 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 cheek mailed by the Trustee on the Interest Payment Date to such persons at their
addresses as they appear on the registration books. If any City Bond is not paid upon presentment
when due (whether at maturity, by acceleration or call for redemption or otherwise), such City Bond
shall continue to bear interest until paid at the rate specified thereon. Principal, premium, if any, and
interest on the City Bonds shall be payable in lawful money of the United States of America.
The Depository Trust Company CDTC"), New York, New York, will act as Securities
Depository for the City Bonds. The Issuer has entered into a Blanket Issuer Letter of Representations
with DTC. Upon the issuance of the City Bonds, one fully-registered City Bond for each maturity
will be registered in the name of Cede & Co., as nominee for DTC. So long as Cede & Co. is the
registered owner of the City Bonds, as nominee of DTC, references herein to the owners of the City
Bonds or registered owners of the City Bonds shall mean Cede & Co. and shall not mean the
Beneficial Owners of the City Bonds.
DTC may determine to discontinue providing its service with respect to the City Bonds at
any time by giving written notice to the Issuer and the Bond 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 City Bonds to the Beneficial Owners
thereof pursuant to Section 207. The Issuer, at the direction of C/HP Cove, 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 than thirty days prior to termination
of such participation (or a successor Securities Depository). In such event, the Issuer will deliver
City Bonds to the beneficial owners thereof pursuant to Section 207.
Section 203. Execution of Ci_ty Bonds. The City Bonds shall be signed by the manual or
facsimile signature of the City Manager of the Issuer. It shall not be necessary for the Issuer's seal
or a facsimile thereof to be printed thereon or that the City Bonds be attested by any other official
of the Issuer. In case any officer whose signature or a facsimile of whose signature shall appear on
any City Bond shall cease to be such officer before the delivery of the City Bonds, such signature
or such facsimile shall nevertheless be valid and sufficient for all purposes as if such officer had
remained in office until such delivery. Any City Bond may bear the manual or facsimile signature
of such person who at the actual time of the execution thereof shall be the proper officer to sign such
City Bond although at the date of such City Bond such person may not have been such officer.
Section 204. Authentication of City Bonds. The City Bonds shall bear a certificate of
authentication, substantially in the form attached to the form of City Bond attached hereto, duly and
manually executed by the Bond Trustee. The Bond Trustee shall authenticate each City Bond with
the signature of an authorized signatory of the Bond Trustee but it shall not be necessary for the same
signatory to authenticate all of the City Bonds. Only such authenticated City Bonds shall be entitled
to any right or benefit under this Indenture and such certificate on any City Bond issued hereunder
shall be conclusive evidence that the City Bond has been duly issued and is secured by the provisions
hereof.
Section 205. Form of the City Bonds. The City 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 City Bonds. The Bond Trustee shall authenticate and deliver
the City Bonds when there have been filed with or received by it the following:
(a) A certified copy of the resolution of the Issuer authorizing the execution and delivery
of the Loan Agreement, this Indenture and the Escrow Deposit Agreement, and the issuance, sale,
execution and delivery of the City Bonds.
(b) Original executed counterparts of the Loan Agreement, Escrow Deposit Agreement
and this Indenture.
(c) The original Obligation No. 1.
(d) A written opinion of Bond Counsel that the issuance of the City Bonds has been duly
authorized, that the City Bonds are valid and binding limited obligations ofthe Issuer, that interest
on the City Bonds is excluded from gross income of the Owners thereof for Federal income tax
purposes and that interest on the City Bonds is exempt from the intangible personal property tax
imposed by the State.
(e) A written opinion of counsel to C/HP Cove that Obligation No. 1, the Master
Indenture, the Loan Agreement, the Escrow Deposit Agreement, the Mortgage and the Restrictive
Covenants have been validly authorized, executed and delivered by C/HP Cove and are enforceable
against C/HP Cove in accordance with their respective terms, that C/HP Cove is a 501(c)(3)
organization within the meaning of the Code and that based upon a certification as to factual
information provided by C/HP Cove no portion of the Project is being used in an "unrelated trade
or business" of C/HP Cove within the meaning of Section 513 of the Code.
(f) A request and authorization of the Issuer, signed by the City Manager of the Issuer,
to the Bond Trustee to authenticate and deliver the City Bonds to such person or persons named
therein upon payment to the Bond Trustee for the account of the Issuer of specified sum.
(g) The Bond Insurance Policy.
(h) A copy of the executed Master Indenture.
Section 207. Registration of City Bonds; Persons Treated as Owners. The Bond Trustee
shall maintain registration books for the registration and the registration of transfer of the City
Bonds, and the transfer of any City Bond may be registered only upon such books upon surrender
thereof to the Bond Trustee 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, the
Issuer shall execute and the Bond Trustee shall authenticate and deliver in exchange for such bond
a new registered bond or bonds of the same maturity, registered in the name of the transferee, of any
denomination or denominations authorized by this Indenture.
Prior to due presentment for registration of transfer of a City Bond the Bond Trustee shall
treat the registered owner thereof as the only person entitled to payment thereon and the exercise of
all other rights and powers of the owner, except that all interest payments shall be made to the
registered owner as of the fifteenth day oftbe month preceding each Interest Payment Date.
Upon the occurrence of an Event of Default, unless the Insurer shall be in payment default
under the Bond Insurance Policy, the Insurer and its agents shall be provided access to inspect and
copy the registration books for the City Bonds during business hours and upon reasonable prior
notice.
Section 208. Exchange of City Bonds. Upon surrender thereof at the Principal Office of
the Bond Trustee, together with an assignment duly executed by the registered owner or the Owner's
duly authorized attorney-in-fact or legal representative, City Bonds may, at the option of the Owner,
be exchanged for an equal aggregate principal amount of City Bonds and of the same maturity, of
authorized denominations as requested by the Owner thereof or the Owner's duly authorized
attorney-in-fact or legal representative. The Issuer shall execute and the Bond Trustee shall
authenticate any City Bonds whose execution and authentication is necessary to provide for
exchange of City Bonds pursuant to this section.
Section 209. Charges for Exchange and Registration, Any exchange or registration of
transfer of any City Bond by any owner thereof shall be at the expense of C/HP Cove, except that
the Bond Trustee shall make a charge to any Bondholder requesting such exchange, registration or
discharge in the amount of any tax or other governmental charge required to be paid with respect
thereto.
Section 210. Mutilated, Lost or Destroyed City Bond.q. Should any City Bond become
mutilated or be lost or destroyed, the Issuer shall cause to be executed, and the Bond Trustee shall
authenticate and deliver, a new City Bond of like date and tenor and of the same series in exchange
and substitution for, and upon cancellation of, such mutilated City Bond or in lieu of and in
substitution for such lost or destroyed City Bond; provided, however, that the Issuer and the Bond
Trustee shall so execute, authenticate and deliver only if the holder has paid the reasonable expenses
and charges of the Issuer and the Bond Trustee in connection therewith and, in the case ora lost or
destroyed City Bond, has furnished to the Issuer, C/HP Cove, the Insurer and the Bond Trustee
indemnity satisfactory to the Bond Trustee and the Insurer. If any such City Bond shall have
matured, instead of authenticating and delivering a new City Bond the Bond Trustee may pay the
same without surrender thereof.
Section211. Cancellation and Distribution ofCity Bondq. All City Bonds which have been
paid (whether at maturity, by acceleration or call for redemption or otherwise) or delivered to the
Bond Trustee by C/HP Cove for cancellation shall not be reissued, and the Bond Trustee shall, unless
otherwise directed by the Issuer, cremate, shred or otherwise dispose of such City Bonds. Upon
request, the Bond Trustee shall deliver to the Issuer and C/HP Cove a certificate of any such
cremation, shredding or other disposition of any City Bond.
Section 212. Application of City Bond Proceed q. Simultaneously with the delivery of the
City Bonds, the proceeds (including accrued interest) of the City Bonds, together with
$ provided by C/HP Cove not from City Bond proceeds (the "Equity") shall be
applied by the Bond Trustee as follows:
(a)
Agreement, $
for deposit to the Escrow Deposit Trust Fund under the Escrow Deposit
;
(b)
Equity); and
to the credit of the Cost of Issuance Fund $
(which includes the
(c) to the credit of the Project Fund, $
the proceeds of the City Bonds.
, which is the remainder of
ARTICLE III
REDEMPTION AND TENDER OF BONDS
Section 301. Redemption Dates and Price.q, The City Bonds may not be called for
redemption prior to maturity except as provided below:
(a) The City 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 amount thereof to be redeemed plus
accrued interest to the redemption date if and to the extent that, pursuant to the terms of the
Mortgage, after Material Damage C/HP Cove shall elect not to repair or restore the Project to
substantially the same condition as prior to such Material Damage and C/HP Cove is required to
prepay Obligation No. 1; provided no such partial redemption shall be permitted without the prior
written consent of the Insurer.
(b) The City Bonds are subject to redemption at the option and direction of C/HP Cove
on or after January 1, 2013, in whole on any date, or in part on any Interest Payment Date, at a
redemption price equal to the principal amount to be redeemed plus accrued interest to the
redemption date.
(c) The City Bonds maturing on 1, (the "~ Term City Bonds") shall
be redeemed in part on the dates set forth below in the principal amounts respectively set forth
opposite such dates at a redemption price of 100% of the pfineipai amount of the ~ Term City
Bonds to be redeemed plus accrued interest to the redemption date:
January 1 July 1
Year Amount Amount
$ $
* Maturity, not a redemption.
The City Bonds maturing on 1, ~ (the" Term City Bonds"), shall be redeemed
in part 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 City Bonds to be redeemed
plus accrued interest to the redemption date:
January 1 July 1
Year Amount Amount
$ $
* Maturity, not a redemption.
The City Bonds maturing on 1, ~ (the" Term City Bonds"), shall be
redeemed in part 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 City Bonds to be
redeemed plus accrued interest to the redemption date: ~
January 1 July 1
Year Amount Amount
$ $
* Maturity, not a redemption.
(d) On or before the sixtieth day next preceding any redemption date provided in Section
301(c) above, C/HP Cove may deliver to the Bond Trustee for cancellation City Bonds in any
aggregate principal amount desired and receive a credit against its redemption obligation on such
redemption date for such City Bonds of the same maturity.
Each City Bond of a maturity so delivered and cancelled shall be credited by the Bond Trustee
at 100% of the principal amount thereof against the amount of City Bonds of such maturity on such
redemption date with a corresponding credit on amounts otherwise due on Obligation No. 1. Any
excess over such obligation shall be credited against future redemption obligations with respect to City
Bonds of that maturity pro rata, as nearly as practicable, in chronological order, and the principal
amount of such City Bonds to be redeemed shall be accordingly reduced.
,Section 302. Manner of Redemption. If less than all of the City Bonds are to be redeemed
pursuant to Section 301(a) or (b), the particular City Bonds or portions thereof to be called for
9
rede.mption shall be selected by the Bond Trustee from each maturity thereof on a pro rata basis, as
nearly as practicable, based upon the outstanding principal of each maturity of the City Bonds. If less
than all City Bonds of a maturity are to be redeemed, the particular City Bonds of such maturity to be
redeemed shall be selected by the Bond Trustee by lot or such other random manner as selected by the
Bond Trustee. In any event, (a) the portion of any City Bond to be redeemed shall be in the principal
mount of $5,000 or an integral multiple thereof, and (b) in selecting City Bonds for redemption, each
City Bond shall be considered as representing that number of City Bonds which is obtained by
dividing the principal amount of such City Bond by $5,000. Ifa portion of a City Bond shall be called
for redemption, a new City Bond in principal amount equal to the unredeemed portion thereof shall
be issued to the Bondholder upon the surrender thereof.
Section 303. Notice of Redemption. The Bond Trustee shall send to the registered owner
of each City Bond to be redeemed notification thereof which notice shall (1) specify the City 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 Bond Trustee) and,
if less than all of the City Bonds are to be redeemed, the numbers of the City Bonds and the portions
of City 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 City Bonds to be redeemed shall
cease to bear interest. Unless such notice states it is conditional as described below, the Bond Trustee
shall not send any notice of redemption for redemptions pursuant to Sections 301 (a) or (b) unless there
shall be on deposit with the' Bond Trustee in the applicable accounts in the Bond Fund monies
sufficient to pay the principal of, premium, if any, and interest to the redemption date on, the City
Bonds to be redeemed. 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 City 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 City Bond
to be redeemed, at such owner's address as it appears on the registration books of the Bond Trustee,
(b) to all organizations registered with the Securities and Exchange Commission as securities
depositories as provided in a certificate of C/HP Cove delivered to the Bond 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 Bond 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 City Bonds with respect to which no such failure or defect exists or 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 City Bonds with respect to which the notice
specified in (a) is correctly given and shall not give rise to any liability on the part of the Bond Trustee
to the Issuer, C/HP Cove 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 City 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.
Section 304. Mandatory Tender of City Bonds. At any time the City Bonds are subject to
redemption pursuant to Section 301(a) or (b) hereof, the City Bonds may be subject to mandatory
tender, in whole but not in part, to the Bond Trustee for purchase by C/HP Cove'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 City Bonds to be called for redemption on the tender date pursuant to
Section 301 (a) or (b), as applicable. Notwithstanding any other provision of this Section 304, the City
Bonds shall not be subject to mandatory tender at any time after a notice of redemption of such City
Bonds shall have been sent and prior to the applicable redemption date.
10
In order to exercise its right to require the City Bonds to be tendered, C/HP Cove shall provide
written notice of its election to exercise such right to the Bond 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 Bond Trustee, by C/HP Cove's designee, funds sufficient
to pay the tender price of such principal amount of City Bonds and the Bond Trustee shall deposit such
funds in a special account which the Bond Trustee is hereby authorized to create.
The Bond Trustee shall send to the registered owner of each City Bond to be subject to
mandatory tender notification thereof, which shall specify the City 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 and shall state that on the tender date, the Bondholders of the City 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 fimds to pay the
applicable tender price of City Bonds to be tendered. Such notice shall be given by mail not less than
ten (10) days nor more than thirty (30) days prior to the date fixed for tender by registered or certified
mall to the owner of each City Bond to be subject to mandatory tender at his address as it appears on
the registration books of the Bond 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 City Bonds with respect to which
no such failure or defect has occurred, and any notice mailed as provided herein shall conclusively be
presumed to have been given whether or not actually received by any Bondholder.
On the tender date, City Bonds subject to mandatory tender will be deemed to have been
purchased whether or not delivered by the Bondholder thereof provided funds are on deposit with the
Bo. nd Trustee for the purchase of such City Bonds. In the event funds sufficient to pay the purchase
price of all City Bonds are not on deposit with the Bond Trustee for purchase of all City Bonds on the
tender date, the tender shall be rescinded, and the Bond Trustee shall return all City Bonds to the
tendering Bondholders, and shall also send notice, by first class mall, to the holders of the City Bonds
notifying them that the tender has been rescinded. In the event any City Bond subject to mandatory
tender is not so tendered, the Bond Trustee will authenticate and deliver a replacement City Bond of
the same series and of like maturity as the City Bond not tendered, and bearing a number not
contemporaneously outstanding, and the City 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 Bond Trustee. On the tender date, the Bond Trustee shall
authenticate and register replacement City Bonds for the City Bonds tendered or deemed tendered
in the name of C/HP Cove or its designee, shall pay the tender price of City 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 City Bonds deemed tendered, shall pay to C/HP Cove or its
designee any amount remaining in such special account.
ARTICLE IV
GENERAL COVENANTS AND PROVISIONS
Section 401. Payment of City Bonds. The Issuer shall promptly pay when due the principal
of (whether at maturity, by acceleration or call for redemption or otherwise), premium, if any, and
interest on the City Bonds at the places, on the dates, from the accounts and in the manner provided
herein and in the City 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 derived pursuant to the Loan Agreement and Obligation
No. 1, and the security therefor, including the Mortgage. Neither the officers of the Issuer nor any
persons executing the City Bonds shall be liable personally on the City Bonds by reason of the
issuance thereof. The City Bonds are limited obligations of the Issuer payable solely from the
revenues and receipts derived by the Issuer from the Loan Agreement and Obligation No. 1 and other
security therefor, which revenues and receipts have been pledged and assigned to secure payment
thereof. The City Bonds are not a debt of the State of Florida or any political subdivision thereof other
than the Issuer.
11
No covenant, 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 City
Bonds shall be liable personally on the City Bonds or be subject to any personal liability or
accountability by 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 City
Bond executed, authenticated 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 Bond Trustee pursuant to this Indenture, and the revenues and receipts .derived pursuant to the
Loan Agreement and Obligation No. 1. The Issuer represents that it is duly authorized under the
Constitution and laws of the State, including particularly the Act, to issue the City Bonds authorized
hereby and to execute this Indenture, to execute and assign the Loan Agreement and to pledge the
revenues and receipts in the manner and to the extent herein set forth; that all action on its part for the
issuance of the City Bonds, the execution and delivery of this Indenture, the execution and assignment
of the Loan Agreement and the pledge of the revenues, receipts and payments thereunder has been
duly and effectively taken; and that the City 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.
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 Bond Trustee may reasonably require for
the better assuring, transferring, conveying, pledging and assigning to the Bond 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 interest on the City Bonds. The Issuer agrees that, so long as any City Bonds
are outstanding, should there be a default under the Loan Agreement or this Indenture, the Issuer will
fully cooperate with the Bond Trustee and with the Bondholders to the end of fully protecting the
rights and security of the Bondholders.
Section 404. Rights under Restrictive Covenants. The Bond Trustee, as assignee of the
Issuer, shall enforce all covenants, undertakings and obligations of C/HP Cove under the Restrictive
Covenants, as provided in Sections 7(a) and 11 of the Restrictive Covenants, provided the Issuer shall
also be able to independently enforce the Restrictive Covenants. The Bond Trustee shall have no duty
to monitor compliance by C/.HP Cove with the Restrictive Covenants, unless expressly required by
the terms hereof. The Bond 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 C/HP Cove 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 Bond Trustee in its own name or in the name of the Issuer may
enforce all other rights of the Issuer and all obligations of C/HP Cove under and pursuant to the Loan
Agreement, for and on behalf of the Bondholders, whether or not the Issuer is in default hereunder;
provided, however, the Bond Trustee shall have no duty or obligation to monitor the Project, other
than as specifically agreed to concerning the monitoring of receipt of written materials required herein.
The Bond Trustee shall be entitled to conclusively rely upon the third party agents referenced in
Section 1001(m) herein, the cost concerning which shall be borne by C/HP Cove.
Section 405. Prohibited Activities. The Issuer shall not knowingly permit the use of any
.a:m.o. unts received by the Issuer or the Bond Trustee with respect to the City Bonds in any manner, and
slaall not knowingly take or permit to be taken any other action or actions, which would cause any
City Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code or which would
12
otherwise cause interest on any City Bonds to become included in gross income for Federal income
tax purposes. The Issuer shall at all times do and perform 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 City
Bonds shall, for the purposes of Federal income tax, be excluded from gross income.
Section 406. Reports of Bond Trustee. The Bond Trustee shall make monthly reports to
C/HP Cove, and upon request, to the Issuer, of all monies received and expended by it. The Bond
Trustee shall furnish to C/HP Cove and the Issuer upon request (a) a statement of the aggregate
principal amount of the City Bonds outstanding as of the date of such request and (b) such information
in the possession of the Bond 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 Bond Trustee shall hold all statements and other items received from C/HP Cove pursuant
to the Restrictive Covenants (the "Covenant Reports") during the term of this Indenture.
Whenever the Bond 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) Material Damage occurs in such a manner that a redemption of City Bonds pursuant
to Section 301(a) is possible;
then the Bond Trustee shall send a notice of such Change (a "Change Notice") to the Master Trustee,
the Insurer and to the Rating Agency.
The Bond Trustee shall provide copies of any 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 will be assessed on Bondholders (which costs will be reimbursed to the Bond
Trustee by C/HP Cove).
Section 407. Secondary Market Disclosure. Pursuant to Section 5.6 of the Loan Agreement,
C/HP Cove 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 Bond Trustee hereby covenants and agrees that it will
comply with and carry out all of its responsibilities pursuant to Section 5.6 of the Loan Agreement.
Notwithstanding any other provision of this Indenture, failure of C/HP Cove or the Bond Trustee to
comply with Section 5.6 of the Loan Agreement shall not be considered an Event of Default.
ARTICLE V
FUNDS
th Section 501. Establis..hment of Funds. In addition to the Project Fund created by Section 601,
ere are hereby established with the Bond Trustee the following trust funds and accounts:
(a) Cost of Issuance Fund;
(b) Bond Fund;
(c) Rebate Fund.
Section 502. Rebate Fund.
13
(a) The Bond Trustee shall maintain the Rebate Fund until the Bond Trustee shall have
received a Rebate Analyst's report concerning the computation period ending upon the retirement of
the last outstanding City Bonds and until any Rebate Amount in respect thereof shall have been paid.
(b) C/HP Cove shall determine or cause to be determined, in accordance with Section 148
of the Code and applicable Treasury Regulations promulgated under Section 148(t) of the Code, the
Rebate Amount attributable to the City Bonds on January 1, 2007 and every five years thereafter and
upon the retirement of the City Bonds (each a "Computation Period"). The Bond Trustee and the
Issuer may rely conclusively upon the opinions, calculations, determinations, directions and advice
of the Rebate Analyst. The Bond Trustee shall deposit from moneys paid to it by the Master Trustee
for deposit 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 Fund from the Revenue Fund
under the Master Indenture are not sufficient to pay the Rebate Amount, the Bond Trustee will request
C/HP Cove to deposit the amount of the deficiency with the Bond Trustee 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 Bond Trustee shall pay such amount to the
Master Trustee for deposit to the Revenue Fund held under the Master Indenture.
(c) The Bond 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 City Bond 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 City Bonds.
(d) The Bond Trustee shall retain ail 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
City Bond.
(e) The Bond 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 Bond
Trustee may deem necessary or useful for the purpose of identifying more precisely the sources of
payments into and disbursements from such accounts or subaccounts, but the establishment of any
such additional account or subaecount shall not alter or modify any of the requirements 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.
(1) C/HP Cove 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 the Issuer agrees to cooperate reasonably in executing such form.
Section 503. Bond Fund. The Bond Trustee shall deposit amounts received by it as payments
of principal, premium and interest on Obligation No. 1 into the Bond Fund and shall use amounts in
the Bond Fund to pay principal of, premium, if any and interest on the City Bonds as the same
becomes due. Earnings fi'om investment of any amounts held in the Bond Fund shall be retained
therein.
14
Section 504. Cost of Issuance Fund. The Bond Trustee shall use mounts in the Cost of
Issuance Fund for payment of Costs of Issuance of the City Bonds, as directed in writing by C/HP
Cove. 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 retained therein. All amounts in the Cost of Issuance
Fund on July 1, 2003, or sooner, if directed by C/HP Cove, shall be transferred to C/HP Cove, to the
extent of the unspent Equity, and then to the Bond Fund, and the Cost of Issuance Fund shall be
closed.
Section 505. Monies to Be Held in Trust. All monies required to be deposited with or paid
to the Bond Trustee for the account of any fund or account under any provision of this Indenture
received by the Bond Trustee shall be held by the Bond Trustee in trust, and, except for (i) monies
deposited with or paid to the Bond Trustee for the redemption of City Bonds, notice of the redemption
of which has been duly given and (ii) monies held in the Rebate Fund, monies received by the Bond
Trustee shall, while held by the Bond Trustee, constitute part of the trust estate and be subject to the
lien hereof.
Section 506. Repayrnent to Borrower. Following Payment of the City Bonds in full and after
payment of all other amounts required to be paid hereunder and under the Loan Agreement to the
Bondholders, the Bond Trustee, the Insurer and the Issuer, all amounts remaining in any fund or
account under this Indenture shall be paid to C/HP Cove, except for monies held in the Rebate Fund
for the payment of rebate.
ARTICLE VI
PROJECT FUND
Section 601. Creation of Project Fund, There is hereby created and ordered established with
the Bond 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 212. Any investment earnings on amounts in the Project Fund shall be credited
to the Project Fund.
Section603. PaymentsfromProjectFund, AllmoniesintheProjectFundshallbedisbursed
by the Bond Trustee to or at the direction of C/HP Cove pursuant to Requisitions signed by C/HP
Cove to be used by C/HP Cove to pay costs of repairs, replacements and other amounts chargeable
to the capital account of the Project in accordance with GAAP ("Cost of the Project"). The Trustee
may conclusively rely upon any Requisition presented to it hereunder, and shall be fully protected in
so doing, and shall have no responsibility for the proper application of funds paid by it pursuant to
such a Requisition.
ARTICLE VII
INVESTMENTS
Section 701. Investment of Funds. The Bond 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 C/HP Cove in Investment Obligations.
Subject to application as provided elsewhere in this Indenture, any such investments shall be
held by, or under the control of, the Bond 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
15
sub-subaccounts. The Bond Trustee shall sell and reduce to cash such investments whenever the cash
balance in any fund, account, subaceount or sub-subaceount is insufficient for its purposes.
All investments not otherwise 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 C/HP Cove 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.
The Bond Trustee shall not have any obligation to the Bondholders or C/HP Cove for any loss
arising from investments made pursuant to the provisions of this Section 701.
The Bond 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.
Section 702. Investments through Bond Trustee's Bond Department. The Bond Trustee may
make investments permitted by Section 701 through its own bond department or trust investments
department.
Section 801.
ARTICLE VIII
DISCHARGE OF INDENTURi::,
Discharge of Indenture.
Iff
(a) (i) (A) the City 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 City Bonds for redemption have been given as provided herein to the Bond
Trustee, and (ii) the Bond Trustee holds 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 City Bonds) will, based upon the calculations of an independent certified public
accountant set forth in a report delivered to the Bond Trustee and the Insurer, be sufficient (x) to, as
applicable, redeem in accordance with the relevant section hereof or pay at maturity all City Bonds
then outstanding and to pay any premium applicable to such redemption, (y) to pay interest on all City
Bonds outstanding to their redemption or payment at maturity, and (z) to pay to the Bond Trustee its
reasonable fees and expenses and any other fees and expenses for which C/HP Cove may be
responsible hereunder or under the Loan Agreement, including the costs and expenses of canceling
and discharging this Indenture; or
(b) all City Bonds theretofore issued under this Indenture (other than City Bonds which
have been destroyed or lost and replaced or paid and City Bonds for whose payment cash or
Government Obligations have theretofore been deposited in trust and thereafter repaid to C/I-IP Cove)
have been delivered to the Bond 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 City Bonds,
Then.'
the Bond Trustee shall at the expense of C/HP Cove cancel and discharge this Indenture and
execute and deliver to the Issuer and C/HP Cove such instruments in writing as shall be requisite to
cancel the lien hereof, and assign and deliver to C/tIP Cove any property at the time subject to this
Indenture which may then be in its possession, except funds or securities held by the Bond Trustee for
the payment of the principal of, premium, if any, and interest on the City Bonds, Rebate Amounts and
all fees and expenses described above.
16
City Bonds for the payment or redemption of which cash or Government Obligations the
principal of and interest on which will be, based upon the calculations of an independent certified
public accountant set forth in a written report a copy of which shall have been provided to the Bond
Trustee and Insurer, sufficient therefor shall have been deposited with the Bond Trustee (whether upon
or prior to the maturity or the redemption date of such City Bonds) shall be deemed to be paid and no
longer outstanding; provided, however, that if such City Bonds are to be redeemed prior to the
maturity thereof, notice of such redemption shall have been duly given or instructions satisfactory to
the Bond Trustee shall have been given to the Bond Trustee.
The obligation to pay the principal of, premium, if any, and interest on all or any portion of
the City Bonds may be discharged by the delivery of such City Bonds to the Bond Trustee
accompanied by written direction from the Owner(s) thereof to cancel such City Bonds without
payment, and upon such delivery, such City Bonds shall be cancelled and deemed paid. In the event
only a portion of the City Bonds shall be cancelled and deemed paid pursuant to the terms of this
Article VIII, those City Bonds which are not so cancelled and deemed paid shall remain Outstanding
for all purposes of this Indenture, except as otherwise provided herein.
Notwithstanding the foregoing, no deposit of cash or Government Obligations shall be
considered provision of payment of the City Bonds pursuant to this Section 801 unless (a) the Bond
Trustee and Insurer shall also have been provided (i) an opinion of Bond Counsel that such deposit
will not adversely affect any exclusion from gross income for federal income tax purposes of interest
on the City Bonds and (ii) an Opinion of Counsel that the deposit will not constitute a voidable
preference or transfer under the Federal Bankruptcy Code or any similar state or federal statute in the
event the Issuer or C/HP Cove becomes a debtor within the meaning of the Federal Bankruptcy Code
or comes within the protection of such similar state or federal statute (an"insolvency Event") and that
in such Insolvency Event, the deposited cash and Government Obligations will not be treated as a part
of the estate of the Issuer or C/HP Cove, as the case may be, and (b) the escrow agreement or
supplemental indenture pursuant to which such deposit is made shall provide that (i) any substitution
of Government Obligations shall require a verification report as to yield and sufficiency from an
independent certified public accountant and the prior written consent of the Insurer, (ii) such escrow
agree, ment or supplemental indenture may not be amended, nor shall a forward purchase agreement
or other agreement with respect to investments in connection therewith be utilized, except with the
prior written consent of the Insurer and (iii) there shall be no optional redemption of the City Bonds
that are secured by such deposit unless the right to such redemption has been expressly reserved by
the Issuer therein and such reserved rights have been disclosed in the offering document for any
obligations issued to obtain funds for such deposit and as a condition to such redemption the Bond
Trustee and Insurer must be provided with'a written report of an independent certified public
accountant demonstrating the sufficiency of the escrow receipts to pay the escrow requirements
following such redemption.
Section 802. Payments by Insurer. Principal and interest on the City Bonds paid with
amounts paid by the Insurer under hhe Bond Insurance Policy shall not be deemed paid for purposes
of this Indenture, shall be deemed to remain Outstanding hereunder and shall continue to be due and
owing on the City Bonds until paid to the Insurer by the Issuer in accordance with this Indenture, and
all covenants, agreements and other obligations of the Issuer to the Bondholders shall continue to exist
and shall run to the benefit of the Insurer, and the Insurer shall be subrogated to the rights of such
Bondholders, including, without limitation, any rights that such Bondholders mar have in respect of
securities law vilations arising from the offer and sale of the City Bonds. This Indenture shall not be
discharged until all amounts due or to become due to the Insurer have been paid in full.
ARTICLE IX
DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND BONDHOLDERS
Section 901. Events of Default. Each of the following events shall be an Event of Default:
17
(a) Default in the due and punctual payment of any interest on any City Bond;
(b) Default in the due and punctual payment of the principal of or premium, if any, on any
City 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 407); and
Agreement.
The occurrence of an Event of Default under the Master Indenture or the Loan
Section 902. Acceleration. Upon the occurrence of an Event of Default under (a) and (b) of
Section 901, the Bond Trustee may, and at the request of the holders of not less than a majority of the
aggregate principal amount of the City Bonds then outstanding shall, and upon the occurrence of an
Event of Default under (c) or (d) of Section 901, the Bond Trustee only at the request of the holders
of not less than 100% of the aggregate principal amount of the City Bonds then outstanding shall, by
notice delivered to the Issuer, the Master Trustee, the Insurer and C/HP Cove, declare the principal
of all City Bonds and the interest accrued to the date of such acceleration immediately due and
payable. Upon any such acceleration, the Bond Trustee shall immediately transfer all monies from
all other funds and accounts hereunder to the Bond Fund.
Notwithstanding any other provision of this Section 902, so long as the Insurer is not in default
of its payment obligations under the Bond Insurance Policy, no acceleration of the City Bonds or
rescission or annulment thereof shall be made except with the prior written consent of the Insurer, and
upon any Event of Default and at any time thereafter while such Event of Default shall continue, the
maturity of the City Bonds shall be accelerated if so directed in writing by the Insurer.
If the Master Trustee shall have declared the principal amount of Obligation No. 1 and all
interest due thereon immediately due and payable in accordance with the Master Indenture, then the
Bond Trustee shall, with the consent or at the direction of the Insurer, declare the entire unpaid
aggregate principal amount of the Bonds Outstanding to be immediately due and payable.
Section 903. Other Remedies; Rights of Bondholders. Upon the occurrence of an Event of
Default and subject to Section 1001 (k) hereof, the Bond Trustee may proceed to protect and enforce
its rights and the rights of the 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 the Bond Trustee or to 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 Bond 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 Bond Trustee pursuant to Section
908 or by the Bondholders, shall extend to or shall affect 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. The owners of a majority in
aggregate principal amount of City Bonds then outstanding shall have the right, at any time, by an
instrument or instruments in writing executed and delivered to the Bond Trustee, with indemnity as
may be required by the Bond Trustee pursuant to Section 1001(k), to direct the method and place of
18
conducting all proceedings to be taken in connection with the enforcement of the terms 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 the provisions of law and
of this Indenture. Unless directed by a majority of owners pursuant to this section, the Bond Trustee
shall have full power in the exercise of its discretion for the best interests of the owners, to conduct,
continue, discontinue, withdraw, compromise, settle or otherwise dispose of any legal or equitable
action or proceeding.
Section 905. Application of Monies. All monies received by the Bond Trustee pursuant to
any right given or action taken under the provisions of this Article shall, after the payment of all
unpaid fees and expenses, including attorney's fees and expenses, of the Bond Trustee and of the cost
and expenses of the proceedings resulting in the collection of such monies and the creation of a
reserve for anticipated fees, costs and expenses, be deposited in the Bond Fund. All monies in the
Bond Fund shall be applied as follows:
(a) Unless the principal of all the City Bonds shall have become or shall have been
declared due and payable;
First - To the payment to the persons entitled thereto of all installments of interest then
due on the City 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, without any discrimination or preference
except as to any difference in the respective rotes of interest specified in the City
Bonds;
Second - To the payment to the persons entitled thereto of the unpaid principal of and
premium, if any, on any of the City Bonds which shall have become due (other than
City Bonds called for redemption for the payment of which monies are held pursuant
to the provisions of this Indenture) in the order of their due dates, with interest on such
City 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 City Bonds due on any particular date, together with such interest, then 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, ratably, according to the amount of such
principal due on such date, to the persons entitled thereto, without any discrimination
or preference except as to any difference in the respective rates of interest specified in
the City Bonds; and
Third - To the extent permitted by law, to the payment to the persons entitled thereto
of the unpaid interest on overdue installments 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 City
Bonds.
(b) If the principal of all the City 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 City 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 City
Bond over any other City 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 City 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
19
City Bonds shall later become due or be declared due and payable, the monies shall be 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 Bond 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 Bond 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 Bond 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 City Bond until such City Bond shall be presented to the Bond Trustee
for appropriate endorsement or for cancellation if fully paid.
Section 906. Remedies Vested in Bond Trustee. All rights of action (including the right to
file proof of claims) under this Indenture or under any of the City Bonds to protect the rights of the
owners of the City Bonds may be enforced by the Bond Trustee without the possession of any of the
City Bonds or the production thereof in any trial or other proceeding relating thereto and any such suit
or proceeding instituted by the Bond Trustee may be brought in its name as Bond Trustee without the
necessity of joining as plaintiffs or defendants any owners of the City Bonds, and any recovery of
judgment shall be for the equal benefit of the owners of the outstanding City Bonds.
Section 907. Limitations on Suits. Except to enforce the rights given under Section 902 and
except as provided in Section 909, no owner of any City Bond shall have any right to institute a suit,
action or proceeding in equity or at law for the enforcement of this Indenture or for the execution of
any trust hereof or any other remedy hereunder, unless (a) a default has occurred of which the Bond
Trustee has been notified or is deemed to have notice as provided in Section 1001 (h), (b) such default
shall have become an Event of Default and the owners of at least a majority in aggregate principal
amount of City Bonds then outstanding shall have made written request to the Bond 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
Bond Trustee indemnity as provided in Section 1001 (k), (d) the Bond 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 Bond Trustee during such 60-day period by the owners of a majority in
aggregate principal amount of City Bonds then outstanding, and (f) notice of such action, suit or
proceeding is given to the Bond Trustee; it being understood and intended that no one or more owners
of the City 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 City Bonds then outstanding.
The notification, request and offer of indemnity set forth in the preceding paragraph, at the
option of the Bond 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 Bond Trustee
arising under Section 902.
Section 908. Waivers of Events of Default. The Bond 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 City Bonds under Section
902, and shall do so upon the request of the holders of at least a majority in aggregate principal
amount of City Bonds then outstanding; provided, however, that no Event of Default shall be waived
unless prior to such waiver all arrears of principal and interest (other than principal or interest on the
City Bonds which became due and payable by declaration of acceleration) and all expenses of the
20
Bond 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 City Bonds then outstanding shall have
consented thereto. In case of any waiver or rescission described above, or in case any proceedings
taken by the Bond Trustee on account of any such Event of Default shall have been discontinued or
concluded or determined adversely to the Bond Trustee or the Bondholders, then and in every such
case the Issuer, the Bond Trustee and the Bondholders shall be restored to their former positions and
fights 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 affect or impair the right of any Bondholder to enforce, by action at law, payment
of the principal of, premium, if any, or interest on any City Bond 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 City Bonds issued hereunder
to the respective owners thereof at the time, place, from the source and in the manner herein and in
the City Bonds expressed.
Section 910. Notice of Defaults; Opportuni _ty to Cure Defaults. Anything contained in this
Indenture to the contrary notwithstanding, no default described in Section 901 (c) shall constitute an
Event of Default until (a) notice of such default shall be given (1) by the Bond Trustee to the Issuer
and C/HP Cove or (2) by the Insurer or the holders of at least a majority in aggregate principal amount
of City Bonds then outstanding to the Bond Trustee, the Issuer and C/HP Cove, and (b) the Issuer and
C/HP Cove 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 C/I-IP Cove within such period and diligently pursued until such default is
corrected.
Section 911. Direction of Remedial Proceedings by the Insurer. Anything in this Indenture
to the contrary notwithstanding, provided the Insurer shall not then be in default of its payment
obligations under the Bond Insurance Policy, the exercise by the Bond Trustee of any remedies
available upon the occurrence of an Event of Default shall be subject to obtaining the prior written
consent of the Insurer and the Insurer shall have the exclusive right to direct any and all such remedies,
and no waiver of any Event of Default shall be granted by the Bond Trustee without the prior written
consent of the Insurer.
Section 912. Insurer or Bondholders Deemed Holders of Obligation No. 1. In the event that
any requests, direction or consent is requested or permitted by the Master Indenture of the holders of
Obligations issued thereunder, including Obligation No. 1, for the purpose of any such request,
direction or consent the Insurer, provided the Insurer is not then in default of its payment obligations
under the Bond Insurance Policy, shall be deemed to be the sole holder of Obligation No. 1, and if the
Insurer is then in default of its payment obligations, then the holders of City Bonds then Outstanding
shall be deemed to be Holders of Obligation No. 1 in the proportion that the aggregate principal
amount of City Bonds then Outstanding held by each such holder of City Bonds bears to the aggregate
principal amount of all City Bonds Outstanding.
ARTICLE X
THE TRUSTEE
Section 1001. Acceptance of Trusts. By executing this Indenture, the Bond Trustee hereby
accepts the trusts and obligations imposed upon it by this Indenture and agrees to perform such trusts
and obligations, but only upon and subject to the following express terms and conditions:
21
(a) The Bond Trustee, prior to the occurrence of an Event of Default and 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 his own affairs. In ease an Event of Default has occurred (which has
not been cured or waived), the Bond 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.
Co) The Bond Trustee may execute any of the trusts or powers hereof and perform 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, receivers and employees, as may reasonably be
employed in connection with the trusts hereof. The Bond 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 Bond Trustee shall not be responsible for (i) any recital herein or in the City Bonds
(except with respect to the certificate of authentication of the Bond Trustee endorsed on the City
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 City 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 Bond 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 C/HP Cove under the Loan
Agreement except as otherwise provided herein. The Bond Trustee shall not be responsible or liable
for any loss suffered in connection with any investment of funds made by it in accordance with
Section 701, except for the Bond Trustee's gross negligence and willful misconduct.
(d) The Bond Trustee shall not be accountable for the use of any City Bonds authenticated
or delivered hereunder. The bank or trust company acting as Bond Trustee and its directors, officers,
employees or agents may in good faith buy, sell, own, hold and deal in the City 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 Bond Trustee. To the extent permitted by law, such bank or trust company may
also receive tenders and purchase in good faith City Bonds from itself, including any department,
affiliate or subsidiary, with like effect as if it were not the Bond Trustee.
(e) The Bond 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 Bond 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 City Bond shall be conclusive and binding upon all future owners of the same City Bond and
upon City 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 of
any instrument, paper or proceeding, the Bond Trustee shall be entitled to rely upon a certificate
signed on behalf of the Issuer by its City Manager, or such other person or persons as may be
designated for such purposes by resolution of the Issuer, as sufficient evidence of the facts therein
contained and prior to the occurrence of a default of which the Bond Trustee has been notified as
provided in subsection (h) of this 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
22
advisable, but shall in no case be bound to secure the same. The Bond Trustee may accept a certificate
of the City Manager or the Clerk of the Issuer 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 fight of the Bond Trustee to do things enumerated in this Indenture
shall not be construed as a duty and the Bond Trustee shall not be answerable for other than its gross
negligence or willful misconduct. The immunities and exceptions from liability of the Bond Trustee
set forth in this Indenture shall extend to its officers, directors, employees and agents.
(h) The Bond 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 the Bond Trustee shall be specifically notified in writing of such default by the Insurer, the
Issuer, C/HP Cove or by the holders of at least a majority in aggregate principal amount of City Bonds.
(i) The Bond 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 notwithstanding, the Bond Trustee
shall have the right, but not the obligation, to demand, as a condition of any action by the Bond
Trustee with respect to the authentication of any City Bonds, the withdrawal of any cash, the 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 City
Bonds as provided in Section 902, the Bond 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 Bond Trustee
may decline to exercise any right provided by this Indenture or the Financing Documents which, in
the reasonable discretion of the Bond Trustee based on an Opinion of Counsel, may cause the trust
estate or the Bond Trustee to incur corporate or personal liability under any environmental law.
(1) All monies received by the Bond 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 required by this
Indenture or law. The Bond Trustee shall not be under any liability for interest on any monies
received hereunder except such as may be agreed upon.
(m) The Bond Trustee may, at the expense of C/I-IP Cove, as provided in Section 4.1 (b)(1)
of Re 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 C/HP Cove and acceptable to CPrlP Cove and the Issuer, as the Bond Tmstee's
agent to enforce the obligations of C/HP Cove under the Restrictive Covenants and shall not be
answerable or accountable for any act or omission of such agent.
(n) The Bond Trustee may serve as Master Trustee (as such term is defined in the Master
Indenture). The Bond Trustee shall not be deemed to have any conflict of interest solely by reason
of any such transaction, nor shall the duties of the Bond Trustee hereunder be deemed increased by
virtue of the Bond Trustee also serving as Master Trustee
(o) In determining whether the rights of Bondholders will be adversely affected by any
action taken pursuant to the terms of this Indenture, the Bond Trustee shall consider the effect on the
Bondholders as if there were no Policy.
23
Section 1002. Fees, Charges and Expenses of Bond Trustee. The Bond Trustee shall be
entitled to payment of and reimbursement for reasonable fees for its services and all out-of-pocket
expenses reasonably incurred by the Bond Trustee hereunder, including the reasonable fees of its
counsel.
Section 1003. Intervention by Bond Trustee. In any judicial proceeding to which the Issuer
is a party and which in the opinion of the Bond Trustee has a substantial bearing on the interests of
owners of the City Bonds, the Bond 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 City Bonds then outstanding. The rights and obligations of the Bond Trustee under this
section are subject to the approval of a court of competent jurisdiction.
Section 1004. Merger or Consolidation of Bond Trustee. Any corporation or bank into which
the Bond 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 Bond Trustee hereunder and vested 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. Resignation by Bond Trustee. The Bond Trustee and any successor Bond
Trustee may at any time resign from the trusts hereby created by giving notice to the Issuer, C/HP
Cove, the Insurer and each owner of City Bonds then outstanding. Such resignation shall take effect
only upon the appointment of a successor Bond Trustee by the Bondholders, the Insurer, C/HP Cove
or the Issuer. If no successor Bond Trustee be appointed within 60 days of such notice of resignation,
a temporary Bond Trustee shall be appointed pursuant to Section 1007 until a successor Bond Trustee
shall be appointed by the Bondholders, the Insurer or the Issuer.
Section 1006. Removal of Bond Trustee. The Bond Trustee may be removed at any time by
an instrument or concurrent instruments in writing delivered to the Bond Trustee and the Issuer and
signed by the Insurer or the owners of a majority in aggregate principal amount of City Bonds then
outstanding, or so long as no Event of Default has occurred and is continuing by C/HP Cove, in either
case upon payment of all fees and expenses due the Bond Trustee.
Section 1007. Appointment of Successor Bond Trustee by Bondholders; Temporary_ Bond
Trustee. In case the Bond Trustee hereunder shall resign, be removed, be dissolved, be in course of
dissolution or liquidation, or otherwise become incapable of acting hereunder, or in case it shall be
taken under the control of any public officer or officers or of a receiver appointed by a court, a
successor may be appointed by (1) the Insurer or owners of a majority in aggregate principal amount
of City Bonds then outstanding, with the consent of the Insurer, the Issuer and C/HP Cove, such
consent not to be unreasonably withheld, by an instrument or concurrent instruments in writing signed
by such owners or (2) the Issuer, with the consent of C/HP Cove and the Insurer, such consents not
to be unreasonably withheld, by an instrument signed by the City Manager of the Issuer. If no
successor or temporary Bond Trustee is appointed within 60 days of the resignation of the Bond
Trustee, the Bond Trustee may petition a court of suitable jurisdiction at the expense of C/HP Cove
to seek the immediate appointment of a successor Bond Trustee. Every such Bond 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 having a combined capital, surplus
and undivided profits of not less than $100 million. Notice of the appointment of the Bond Trustee
shall be provided to the Insurer, the Rating Agency and the holders of the City Bonds.
Section 1008. Concerning any Successor Bond Trustee. Every successor Bond Trustee
appointed 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
24
any further act, deed or conveyance, shall become fully vested with all the properties, rights, 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
Bond Trustee all the properties, rights, powers and trusts of such predecessor hereunder; and every
predecessor Bond Trustee shall deliver all securities and monies held by it as Bond Trustee hereunder
to its successor. Should any instrument in writing from the Issuer be required by any successor Bond
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 writing shall,
on request, be executed, acknowledged and delivered by the Issuer. The resignation of any Bond
Trustee and the instrument or instruments removing any Bond Trustee and appointing a successor
hereunder, together with all other instruments provided for in this article shall be filed and/or recorded
by the successor Bond Trustee in each recording office where the Indenture may have been filed
and/or recorded.
Section 1009. Bond Trustee Protected in Relying Upon Resolutions, etc. The resolutions,
opinions, certificates and other instruments provided for in this Indenture may be accepted by the
Bond Trustee as conclusive evidence of the facts and conclusions stated therein and shall be full
warrant, protection and authority to the Bond Trustee for the release of property and the withdrawal
of cash hereunder.
Section 1010. Notice to Rating Agency and Insurer. The Insurer and the Rating Agency shall
be notified by the Bond Trustee of the following: (a) any redemption of City Bonds other than
scheduled redemptions pursuant to Section 301(c); (b) whenever there is a change in the Bond
Trustee; (c) whenever there shall occur an Event of Default; (d) whenever there shall have occurred
a defeasance of the City Bonds or discharge of this Indenture; (e) when all the City Bonds are paid;
(f) any Material Damage to the Project or Project or any part thereof; and (g) any amendment to this
Indenture. The Rating Agency shall be furnished by the Bond Trustee any information in the
possession of the Bond Trustee it requests in order to maintain the rating on the City Bonds, and the
Bond Trustee shall cooperate with the Rating Agency, including submitting any surveillance forms
required by the Rating Agency. The Bond Trustee shall provide to the Rating Agency, upon request,
the annual audited financial statements of C/HP Cove.
Section 1011. Certain Rights of the Insurer With Respect to the Bond Trustee.
Notwithstanding any other provision hereof, so long as the Insurer is not in default of its payment
obligations pursuant to the Bond Insurance Policy:
(a) The Bond Trustee shall be removed at any time at the written request of the Insurer
delivered to C/HP Cove and the Bond Trustee;
(b) The Insurer shall receive prompt written notice of any name change of the Bond
Trustee or the resignation or removal of the Bond Trustee;
(c) No removal, resignation or termination of the Bond Trustee shall take effect until a
successor, acceptable to the Insurer, shall have been appointed and accepted the obligations of Bond
Trustee hereunder.
ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 1101. Supplemental Indentures Not Requiring Consent of Bondholders. The Issuer
and the Bond Trustee may, without the consent of, or notice to, any of the Bondholders, enter into an
inde.n .t~re or indentures supplemental to this Indenture to the extent not inconsistent with the terms and
prows~ons hereof for any one or more of the following purposes:
(a) to cure any ambiguity or formal defect or omission in this Indenture;
25
(b) to grant to or confer upon the Bond Trustee for the benefit of the Bondholders any
additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the
Bondholders or the Bond Trustee or either of them;
(c) to subject to this Indenture additional revenues, properties or collateral;
.(d) to modify, amend or supplement this Indenture in such manner as required to permit
the qualitmation 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 make any change herein which, in the opinion of Bond Counsel, is necessary to
preserve the exclusion of interest on any City Bonds from gross income for Federal income tax
purposes; and
(f) to make any other change herein which shall not adversely affect in any material respect
the rights of the owners of the City Bonds then outstanding.
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
City Bonds then outstanding have the right from time to time, anything contained in this Indenture to
the contrary notwithstanding, to consent to and approve the execution by the Issuer and the Bond
Trustee of such other indenture or indentures supplemental hereto as shall be deemed necessary or
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 City Bonds then outstanding, (a)
an extension of the date upon which the payment of any principal of or interest on any City Bond is
due or (b) a reduction in the principal amount of, or premium, if any, on any City Bond or the rate of
interest thereon or the amount of interest payable thereon or (c) a reduction in amount of any payment
required by any sinking fund that may be applicable to any City Bond, or (d) a privilege or priority of
any City Bond or City Bonds over any other City Bond or City Bonds, or (e) a change in the privileges
or priorities of any City Bond or City Bonds over any other City Bond or City Bonds or (f) a reduction
in the aggregate principal amount of City Bonds required for consent to any supplemental indenture.
If, at any time, the Issuer shall request the Bond Trustee to enter into any supplemental
indenture for any of the purposes of this section, the Bond 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 the 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. Such notice shall briefly set forth the nature of the proposed
supplemental indenture and shall state that copies thereof are on file at the principal office of the Bond
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 City Bonds then outstanding shall have consented to the execution thereof as
herein provided, no owners of any City 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 Bond Trustee or the 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.
City Bonds owned or held by or for the account of the Issuer or C/HP Cove or any person
26
controlling, co.ntrolled by or under common control with either of them shall not be deemed
outstanding for the purpose of consent or any calculation of outstanding City Bonds provided for in
this article or in Article XII. At the time of any such calculation, the Issuer shall furnish the Bond
Trustee a certificate of an officer of the Issuer, upon which the Bond Trustee may rely, describing all
City Bonds to be so excluded.
Anything contained in this Indenture to the contrary notwithstanding, the Issuer and the Bond
Trustee may enter into any indenture supplemental to this Indenture upon receipt of the consent of the
Insurer and the owners of all City Bonds then outstanding and, if required by Section 1103, the
consent of C/HP Cove.
Section 1103. Opinion of Counsel and Consent of C/HP Cove Required. Anything in this
Indenture to the contrary notwithstanding, the Bond Trustee (a) shall not execute any indenture
supplemental to this Indenture unless there shall have been filed with the Bond 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 effect that such
supplemental indenture will not adversely affect any exclusion from gross income for federal income
tax purposes of the interest on the City Bonds, and (b)(i) unless an Event of Default has occurred and
is continuing, shall not, without the consent of C/HP Cove, 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 C/HP Cove execute any indenture supplemental to this Indenture which adversely affects any rights
or obligations of C/I-IP Cove.
Section ll04. Bond Trustee's Obligation Regarding Supplemental Indentures and
Amendments, etc., to Loan Agreement and Restrictive Covenants. The Bond 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, Master
Indenture, Obligation No. 1, the Mortgage or the Restrictive Covenants permitted by Article XII. The
Bond 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 Bond Trustee or the Bondholders.
Section 1105. Consent of Insurer. Unless the Insurer is then in default of its payment
obligations under the Bond Insurance Policy, (i) no amendment or supplement to this Indenture shall
become effective unless and until the Insurer shall have consented thereto in writing filed with
Trustee, and (ii) except for purposes of amendments for which the consent of all Bondholders is
required pursuant hereto, the Bond Insurer shall be deemed to be holder of all City Bonds for purposes
of obtaining the consent of Bondholders to amendments of this Bond Indenture and to the Loan
Agreement.
ARTICLE XII
AMENDMENT OF LOAN AGREEMENT
AND OTHER DOCUMENTS
Section 1201. Amendments to Loan Agreement and Other Documents Not Requiring Consent
of Bondholders. The Issuer and the Bond Trustee shall, without the necessity of consent by or notice
to the Bondholders, consent to any amendment, change or modification of the Loan Agreement,
Master Indenture, Obligation No. 1, Mortgage or the Restrictive Covenants as may be required:
(a) by the provisions of the Loan Agreement, the Restrictive Covenants, Master Indenture,
Obligation No. 1, Mortgage or this Indenture;
(b) for the purpose of curing any ambiguity or formal defect or omission therein;
27
(c) to make any change therein which, in the opinion of Bond Counsel, is necessary to
preserve the exclusion of interest on any City Bonds from gross income for Federal income tax
purposes; or
(d) in connection with any other change therein, which shall not adversely affect in any
material respect the rights of the holders of the City Bonds then outstanding.
Section 1202. Amendments to Loan Agreement and Other Documents Requiring Consent of
Bondholders. Except for amendments, changes or modifications as provided in Section 1201, neither
the Issuer nor the Bond Trustee shall consent to any amendment, change or modification of the Loan
Agreement, Master Indenture, Obligation No. 1, Mortgage or the Restrictive Covenants without the
prior consent of the owners of at least a majority in aggregate principal amount of City Bonds then
outstanding given and procured as provided in Section 1102. If at any time the Issuer and C/I-IP Cove
shall request the consent of the Bond Trustee to any such proposed amendment, change or
modification of the Loan Agreement, Master Indenture, Obligation No. 1, Mortgage or the Restrictive
Covenants, the Bond Trustee shall, upon being satisfactorily indemnified with respect to expenses,
cause notice of such proposed amendment, change or modification to be given in the same manner as
provided by Section 1102 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 Bond Trustee for inspection
by all Bondholders.
Section 1203. Limitation on Amendments. No amendment, change or modification to the
Loan Agreement, Master Indenture, Obligation No. 1, Mortgage or the Restrictive Covenants may
decrease the obligation of C/HP Cove to provide revenues in amounts sufficient to pay the principal
of and premium, if any, and interest on the City Bonds as the same become due. Notwithstanding
anything to the contrary in Sections 1201 or 1202, the Issuer shall not be required to consent to any
amendment, change or modification of the Loan Agreement, Master Indenture, Obligation No. 1,
Mortgage or the Restrictive Covenants that adversely affects any fights of the Issuer.
Section 1204. Amendment by Unanimous Consent. Anything contained in this Indenture to
the contrary notwithstanding, the Issuer and the Bond Trustee may consent to any amendment, change
or modification of the Loan Agreement, Master Indenture, Obligation No. 1, Mortgage or the
Restrictive Covenants upon receipt of the consent of the Insurer and the owners of all City Bonds then
outstanding.
Section 1205. Opinion of Counsel Required and Consent of C/HP Cove Required. Anything
in this Indenture to the contrary notwithstanding, the Bond Trustee (a) shall not execute any
amendment, change or modification to the Loan Agreement or the Restrictive Covenants unless there
shall have been filed with the Bond Trustee (i) an Opinion of Counsel stating that such proposed
amendment, change or modification of the Loan Agreement 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 adversely
affect any exclusion from gross income for federal income tax purposes of the interest on the City
Bonds, and (b)(i) unless an Event of Default has occurred and is continuing hereunder, shall not,
without the consent of C/lIP Cove, 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 C/HP Cove,
execute any such amendment, change or modification which adversely affects any fights or obligations
of C/HP Cove.
Section 1206. Consent of Insurer. Unless the Insurer is then in default of its payment
obligations under the Bond Insurance Policy, (i) no amendment or supplement to the Loan Agreement
or the Restrictive Covenants shall become effective, nor shall the Bond Trustee consent to any
amendment to the Master Indenture, Obligation No. 1 or Mortgage, unless and until the Insurer shall
28
have consented.thereto in writing filed with Trustee, and (ii) except for purposes of amendments for
which the consent of all Bondholders is required pursuant hereto, the Bond Insurer shall be deemed
to be holder of all City Bonds for purposes of obtaining the consent of Bondholders to amendments
of this Bond Indenture, Master Indenture, Obligation No. 1, Mortgage and to the Loan Agreement.
ARTICLE XIII
THE BOND INSURANCE POLICY AND THE INSURER
Section 1301. Payrnem Procedure Under the Bond Insurance Policy.
(a) In the event that on the second (2~) Business Day prior to the payment date on the City
Bonds, the Bond Trustee has not received sufficient moneys to pay all principal of and interest on the
City Bonds due on the second (2~) following Business Day, the Bond Trustee shall immediately notify
the Insurer or its designee on the same business day by telephone or electronic mail, confirmed in
writing by registered or certified mail, of the amount of the deficiency.
(b) If the deficiency is made up in whole or in part prior to or on the l~yment date, the
Bond Trustee shall so notify the Insurer or its designee.
(c) In addition, if the Bond Trustee has notice that any Bondholder has been required to
disgorge payments of principal or interest on the City Bonds pursuant to a final non-appealable order
by a court of competent jurisdiction that such payment constitutes an avoidable preference to such
Bondholder within the meaning of any applicable bankruptcy laws, then the Bond Trustee shall notify
the Insurer or its designee of such fact by telephone or electronic notice, confirmed in writing by
registered or certified mall.
(d) The Bond Trustee is hereby irrevocably designated, appointed, directed and authorized
to act as attorney-in-fact for holders of the City Bonds as follows:
a. If and to the extent there is a deficiency in amounts required to pay interest on
the City Bonds, the Bond Trustee shall (a) execute and deliver to the Insurer, in form
satisfactory to the Insurer, an instnnnent appointing the Insurer as agent for such holders in any
legal proceeding related to the payment of such interest and an assignment to the Insurer of the
claims for interest to which such deficiency relates and which are paid by the Insurer, (b)
receive as designee of the respective holders (and not as Bond Trustee) in accordance with the
tenor of the Bond Insurance Policy payment from the Insurer with respect to the claims for
interest so assigned, and (c) disburse the same to such respective holders; and
b. If and to the extent of a deficiency in amounts required to pay principal of the
City Bonds, the Bond Trustee shall (a) execute and deliver to the Insurer, in form satisfactory
to the Insurer, an instrument appointing the Insurer as agent for such holder in any legal
proceeding related to the payment of such principal and an assignment to the Insurer of the
City Bond surrendered to the Insurer in an amount equal to the principal amount thereof as has
not previously been paid or for which moneys are not held by the Bond Trustee and available
for such payment (but such assignment shall be delivered only if payment from the Insurer is
received), Co) receive as designee of the respective holders (and not as Bond Trustee) in
accordance with the tenor of the Bond Insurance Policy payment therefor from the Insurer, and
(c) disburse the same to such holders.
(e) Payments with respect to claims for interest on and principal of City Bonds disbursed
by the Bond Trustee from proceeds of the Bond Insurance Policy shall not be considered to discharge
the obligation of the Issuer with respect to such City Bonds, and the Insurer shall become the owner
of such unpaid City Bond and claims for the interest in accordance with the tenor of the assignment
made to it under the provisions of this subsection or otherwise.
29
(f) Irrespective of whether any such assignment is executed and delivered, the Issuer and
the Bond Trustee hereby agree for the benefit of the Insurer that:
a. They recognize that to the extent the Insurer makes payments directly or
indirectly (as by paying through the Bond Trustee), on account of principal of or interest on
the City Bonds, the Insurer will be subrogated to the rights of such holders to receive the
amount of such principal and interest from the Issuer, with interest thereon as provided and
solely from the sources stated in the financing documents and the City Bonds; and
b. They will accordingly pay to the Insurer the amount of such principal and
interest, with interest thereon as provided herein and in the City Bonds, but only from the
sources and in the manner provided herein for the payment of principal of and interest on the
City Bonds to holders, and will otherwise treat the Insurer as the owner of such rights to the
amount of such principal and interest.
(g) C/HP Cove hereby agrees to pay or reimburse the Insurer any and all charges, fees,
costs and expenses which the Insurer may reasonably pay or incur, including, but not limited to, fees
and expenses of attorneys, accountants, consultants and auditors and reasonable costs of
investigations, in connection with (i) any accounts established to facilitate payments under the Bond
Insurance Policy, (ii) the administration, enforcement, defense or preservation of any fights in respect
of the trust agreement or any other financing document including defending, monitoring or
participating in any litigation or proceeding (including any bankruptcy proceeding in respect of the
Issuer or C/I-IP cove or any affiliate thereof) relating to this agreement or any other financing
document, any party to this agreement or any other financing document or the transaction
contemplated by the financing documents (the "Transaction"), (iii) the foreclosure against, sale or
other disposition of any collateral securing any obligations under this agreement or any other financing
document, or the pursuit of any remedies hereunder or under any other financing document, to the
extent such costs and expenses are not recovered from such foreclosure, sale or other disposition, or
(iv) any amendment, waiver or other action with respect to, or related to, this Indenture or any other
financing document whether or not executed or completed; costs and expenses shall include a
reasonable allocation of compensation and overhead attributable to time of employees of the Insurer
spent in connection with the actions described in clauses (ii) - (iv) above; and the Insurer reserves the
right to charge a reasonable fee as a condition to executing any amendment, waiver or consent
proposed in respect of this agreement or any other financing document.
(h) In addition to any and all rights of reimbursement, subrogation and any other rights
pursuant hereto or under law or in equity, C/HP Cove agrees to pay or reimburse the Insurer any and
all charges, fees, costs, claims, losses, liabilities (including penalties), judgrnents, demands, damages,
and expenses which the Insurer or its officers, directors, shareholders, employees, agents and each
Person, if any, who controls the Insurer within the meaning of either Section 15 of the Securities Act
of 1933 or Section 20 of the Securities Exchange Act of 1934 may reasonably pay or incur, including,
but not limited to, fees and expenses of attorneys, accountants, consultants and auditors and reasonable
costs of investigations, of any nature in connection with, in respect of or relating to the transactions
contemplated by this agreement or any other financing document by reason off
(i) any omission or action (other than of or by the Insurer) in connection with the
offering, issuance, sale, remarketing or delivery of the City Bonds;
(ii) the negligence, bad faith, willful misconduct, misfeasance, malfeasance or theft
committed by any director, officer, employee or agent of the Issuer or C/HP Cove in
connection with any transaction arising from or relating to this agreement or any other
financing document;
(iii) the violation by the Issuer or C/HP Cove of any law, nde or regulation, or any
judgment, order or decree applicable to it;
30
(iv) the breach by the Issuer or C/HP Cove of any representation, warranty or
covenant under this Indenture or any other financing document or the occurrence, in respect
of the Issuer or C/HP Cove, under this Indenture or any other financing document of any
"event of default" or any event which, with the giving of notice or lapse of time or both, would
constitute any "event of default"; or
(v) any untrue statement or alleged untrue statement of a material fact contained
in any official statement or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading, except
insofar as such claims arise out of or are based upon any untrue statement or omission in
information included in an official statement and furnished by the Insurer in writing expressly
for use therein.
(i) The Insurer shall be entitled to pay principal or interest on the City Bonds that shall
become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer or the Obligor
(as such terms are def'med in the Bond Insurance Policy) and any amounts due on the City Bonds as
a result of acceleration of the maturity thereof in accordance with this agreement, whether or not the
Insurer has received a Notice (as defined in the Bond Insurance Policy) of Nonpayment or a claim
upon the Policy.
ARTICLE XIV
MISCELLANEOUS
Section 1401. 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 be 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, and shall
be conclusive in favor of the Bond 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 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 enforcement hereof, the
Bondholder giving such a writing shall be deemed to continue to be the owner of such City Bond until
the Bond Trustee shall have received notice in writing to the contrary.
Whenever any provision of this Bond Indenture requires the consent of the Holders of the City
Bonds, so long as the Insurer shall not be in default of its payment obligations under the Bond
Insurance Policy, the consent of the Insurer shall also be required.
Section 1402. 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 City Bonds is intended
or shall be construed to give to any person or company other than the parties hereto, C/HP Cove and
the owners of the City Bonds, any legal or equitable fight, 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, C/I-IP Cove and the owners of the City Bonds as herein
provided.
Section 1403. Limitation of Liability of Issuer. No covenant, agreement or obligation
contained herein shall be deemed to be a covenant, agreement or obligation of any past, present or
31
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 City Bonds shall be liable personally on
the City Bonds or be subject to any personal 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,
director, employee or agent acts in good faith.
Section 1404. 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 delivered in person or mailed by first class registered or certified mail, postage
prepaid, addressed
(a) if to C/HP Cove:
C/HP Cove, Inc.
c/o The NHP Foundation
1090 Vermont Avenue, NW, Suite 400
Washington, DC 20005
Attention: President
Facsimile no. 202-789-1990
with a copy to:
C/HP Cove, Inc.
edo Housing Partnership, Inc.
4016 Broadway Avenue
West Palm Beach, Florida 33407
Attention: John Corbett
Facsimile No. 561-841-3555
(b) if to the Rating Agency:
Standard & Poor's
55 Water Street, 38th Floor
New York, New York 1004 1
Attention: Public Finance Surveillance Department
Facsimile No. 212-438-2157
(c) if to the Bond Trustee:
The Bank of New York Trust Company of Florida, N.A.
100 Ashford Center North, Suite 520
Atlanta, Georgia 30338
Facsimile No. 770-698-5195
(d) if to the Issuer:
and
City of Boynton Beach
100 East Boynton Beach Blvd.
Boynton Beach, FL 33435
Atto: City Manager
Facsimile No. 561-742-
(e) if to the Insurer:
32
ACA Financial Guaranty Corporation
140 Broadway, 47~ Floor
New York, New York 10005
Attention: General Counsel
Facsimile No. 212-375-2100
Any demand, notice, approval, consent, request or other communication hereunder may be
given by telefacsimile transmission to the telefacsimile number set forth above, or such other
telefacsimile number as provided pursuant to the provisions hereof, provided that a duplicate copy of
the same is given by mail or delivery as aforesaid. In such event, such demand, notice, approval,
consent, request or other communication shall be deemed to have been duly given hereunder upon
receipt of the facsimile transmission by the recipient thereof.
A duplicate copy of each demand, notice, approval, consent, request or other communication
given hereunder by or to any of the foregoing shall be given to all of the foregoing. C/HP Cove, the
Issuer, the Insurer, the Rating Agency and the Bond Trustee may, by notice given hereunder, designate
any further or different addresses or facsimile numbers 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 1405. Insurer as Beneficiary_. The Insurer is a third-party beneficiary hereunder, and
may enforce all its fights, remedies or claims conferred, given or granted to it hereunder.
Section 1406. Successors and Assigns. This Indenture shall be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and assigns.
Section 1407. Severabili _ty. If any provision of this Indenture shall be held invalid by any
court of competent jurisdiction, such holding shall not invalidate any other provision hereof.
Section 1408. Applicable Law. This Indenture shall be governed by the applicable laws of
the State.
Section 1409. 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 1410. Election under Section 142(d)(1) of the Code. The Issuer hereby elects,
pursuant to Section 142(d)(1) of the Code, to have the requirements of Section 142(d)(1)(A) of the
Code apply for purposes ofdeterrnining whether the Project is a "qualified residential rental project."
33
IN WITNESS WHEREOF, the Issuer and the Bond Trustee have caused this Indenture to be
executed in their respective corporate names by their duly authorized officers, all as of the date first
above written.
CITY OF BOYNTON BEACH, FLORIDA
(SE L)
ATTEST: By:
City Manager
Clerk
THE BANK OF NEW YORK
TRUST COMPANY OF FLORIDA, N.A.,
as trustee
By:
34
NUMBER R-
EXHIBIT A
(Form of Bonds)
CITY OF BOYNTON BEACH, FLORIDA
Multi-Family Housing Mortgage Revenue Refunding Bonds, Series 2002
(Clipper Cove Apartments)
INTEREST MATURITY
RATE DATED DATE DATE CUSIP
December 20, 2002
REGISTERED OWNER: CEDE & CO.
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 designated office (initially, New York, New York) of The Bank of New York Trust
Company of Florida, N.A., as Bond Trustee, or its successor in trust (the "Bond Trustee"), solely from
the sources hereinafter described, to the registered owner hereof, or registered assigns or legal
representatives, the principal sum set forth above on the maturity date set forth above, subject to prior
redemption as described below, and to pay, solely from such sources, on July 1, 2003, and on each
January 1 and July 1 thereafter, interest 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 City Bond is authenticated, unless this City Bond is (a) authenticated before the first interest
payment date following the initial delivery of the City Bonds, in which case it shall bear interest from
its date, or (b) authenticated alter the fifteenth day of the month next preceding an interest payment
date, but prior to such interest payment date, in which case it shall bear interest from such interest
payment date, or (e) authenticated upon an interest payment date, in which case it shall bear interest
from such interest payment date (unless interest on this City Bond is in default at the time of
authentication, in which case this City Bond shall bear interest from the date to which interest has been
paid). Interest hereon shall be paid to the person in whose name this City Bond is registered at the
close of business on 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
person at his address as it appears on the registration books kept by the Bond Trustee. Principal,
premium, if any, and interest are payable in lawful money of the United States of America.
THIS CITY BOND AND THE INTEREST HEREON ARE LIMITED OBLIGATIONS OF
THE ISSUER PAYABLE SOLELY FROM THE REVENUES AND RECEIPTS DERIVED BY THE
ISSUER FROM THE LOAN AGREEMENT AND OTHER SECURITY THEREFOR, WHICH
REVENUES AND RECEIPTS HAVE BEEN PLEDGED AND ASSIGNED TO SECURE
PAYMENT HEREOF. THIS CITY 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 CITY BOND OR OTHER 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 CITY BOND OR OTHER COSTS INCIDENT HERETO.
This Ci.ty Bond is one of an issue of $ City of Boynton Beach, Florida
Multi-Family Housing Mortgage Revenue Refunding Bonds, Series 2002 (Clipper Cove Apartments)
(the "City Bonds"), of like date and tenor, except as to number, interest rate, maturity date and
denomination. The City Bonds are being issued for the purpose of making a loan (the "Loan") to
C/HP Cove, Inc., a Florida corporation not-for-profit ("C/HP Cove"), for the primary purpose of
providing funds to C/HP Cove to refund the Issuer's Multi-Family Housing Mortgage Revenue Bonds,
Series 1996 (Clipper Cove Apartments) and thereby refinance a multi-family residential rental project
in the City of Boynton Beach, Florida (the "Project"), pursuant to a Loan Agreement, dated as of
December 1, 2002 (the "Loan Agreement"), between the Issuer and C/HP Cove.
The City Bonds are issued under and are equally and ratably secured by an Indenture of Trust,
dated as of December 1, 2002 (the "Indenture"), between the Issuer and the Bond Trustee, which
provides for the security for the City Bonds. The Issuer has assigned as security for the City Bonds
certain of the Issuer's fights under the Loan Agreement.
C/HP Cove has issued its Obligation No. 1 in the principal amount of $ (the
"Obligation No. 1"), pursuant to the Master Trust Indenture, dated as of December 1,2002, between
C/HP Cove and The Bank of New York Trust Company of Florida, N.A., as Master Trustee
thereunder (the "Master Indenture"). The Obligations of C/HP Cove under the Master Indenture,
including Obligation No. 1 and Obligation No. 2 (hereinafter defined) are secured by a Mortgage and
Security Agreement (the "Mortgage") granting a lien on the Project and the Gross Revenues (as
defined in the Master Indenture). Simultaneous with the issuance of Obligation No. 1, C/HP Cove
is issuing its Obligation No. 2 in the principal amount of $ ~ in order to provide security
for the repayment of the Multi-Family Housing Mortgage Revenue Bonds, Series 2002, being issued
by C/HP Cove pursuant to a Trust Indenture, dated as of December 1, 2002, between C/HP Cove and
The Bank of New York Trust Company of Florida, N.A., as Corporate Trustee thereunder.
Reference is hereby made to the Indenture, the Loan Agreement, the Master Indenture, the
Mortgage and Obligation No. 1 and to all amendments and supplements thereto for certain definitions
of terms used herein and for a description of the provisions, among others, with respect to the nature
and extent of the security for the City Bonds, the rights, duties and obligations of the Issuer and the
Bond Trustee, the rights of the owners of the City Bonds and the terms upon which the City Bonds
are issued, to all of the provisions of which the City Bonds are subject. The Owner hereof, by
aceptance hereof, accepts all terms and provisions of the Financing Instruments (as defined in the
Indenture).
The City Bonds may not be called for redemption prior to maturity except as provided in the
Indenture and as provided below:
1. The City 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 amount thereof to be redeemed plus
accrued interest to the redemption date if and to the extent that, pursuant to the terms of the Mortgage,
after Material Damage C/HP Cove shall elect not to repair or restore the Project to substantially the
same condition as prior to such Material Damage and C/HP Cove is required to prepay Obligation No.
1; provided no such partial redemption shall be permitted without the prior written consent of the
Insurer. "Material Damage" shall mean damage to or destruction of any or all of the Project by fire
or other casualty, condemnation thereof or loss thereof because of failure of title, equal in amount to
at least $1,000,000.
2. The City Bonds maturing on ~ 1, ~ (the" Term City Bonds") shall be
redeemed in part 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 City Bonds to be
redeemed plus accrued interest to the redemption date:
January 1 July 1
36
Year Amount Amount
* Maturity, not a redemption.
3. The City Bonds maturing on ~ 1, (the" Term City Bonds") shall be
redeemed in part on the dates set forth below in the principal mounts respectively set forth opposite
such dates at a redemption price of 100% of the principal amount of the ~ Term City Bonds to be
redeemed plus accrued interest to the redemption date:
January 1 July 1
Year Amount Amount
* Maturity, not a redemption.
4. The City Bonds maturing on ~ 1, ~ (the" Term City Bonds") shall be
redeemed in part 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 City Bonds to be
redeemed plus accrued interest to the redemption date:
January 1 July 1
Year Amount Amount
* Maturity, not a redemption.
5. The City Bonds are subject to redemption at the option and direction of C/HP Cove
on or after January 1, 2013, in whole on any date, or in part on any Interest Payment Date, at a
redemption price equal to the principal amount to be redeemed plus accrued interest to the redemption
date.
If less than all of the City Bonds are called for redemption, the City Bonds to be redeemed
shall be selected as provided in the Indenture.
If any of the City Bonds or portions thereof are called for redemption, the Bond Trustee shall
send to the registered owner of each City 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 date, 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 City 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 City 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 City Bond is subject
to redemption pursuant to Paragraphs 1. or 5. above, this City Bond shall also be subject to mandatory
tender, in whole or in part, to the Bond Trustee for purchase by C/I-l? Cove, or C/HP Cove'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 City Bonds to be called for redemption on the tender date
pursuant to Paragraph I. or 5., as applicable.
37
In the ev. ent this City Bond is called for mandatory tender, the Bond 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 and, if less than all the City
Bonds are to be subject to mandatory tender, the numbers of the City Bonds and the portions of the
City Bonds to be tendered and shall state that on the tender date, the Bondholders of the City Bonds
subject to mandatory tender shall cease to be entitled to any further interest thereon. Such notice shall
be given by mail not less than ten (10) days nor more than thirty (30) days prior to the date fixed for
tender by registered or certified mail to the owner of each City Bond to be subject to mandatory tender
at his address as it appears on the registration books of the Bond 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 City
Bonds with respect to which no such failure or defect has occurred, and any notice mailed as provided
herein shall conclusively be presumed to have been given whether or not actually received by any
Bondholder.
On the tender date, City Bonds subject to mandatory tender will be deemed to have been
purchased whether or not delivered by the Bondholder thereof, provided funds are on deposit with the
Bond Trustee for the purchase of such City Bonds. In the event funds sufficient to pay the purchase
price of all City Bonds are not on deposit with the Bond Trustee for the purchase of all City Bonds on
the tender date, the tender shall be rescinded, and the Bond Trustee shall remm all City Bonds to the
tendering Bondholders, and shall also send notice, by first class mail, to the holders of the City Bonds
notifying them that the tender has been rescinded. In the event any City Bond subject to mandatory
tender is not so tendered, the Bond Trustee will authenticate and deliver a replacement City Bond of
like series and maturity as the City Bond not tendered, and bearing a number not contemporaneously
outstanding, and the City Bond which was not tendered shall no longer be Outstanding under the
Indenture, except that the Bondholder thereof shall be entitled to receive the tender price therefor upon
tender to the Bond Trustee. On the tender date, the Bond Trustee shall authenticate and register
replacement City Bonds for the City Bonds tendered or deemed tendered in the name of C/I-IP Cove
or its designee and shall pay the tender price of City Bonds tendered to it from amounts held by it for
such purpose under the Indenture.
The transfer of this City Bond may be registered by the registered owner hereof in person or
by his duly authorized attorney or legal representative at the principal corporate trust office of the
Bond Trustee, but only in the manner and subject to the limitations and conditions provided in the
Indenture and upon surrender and cancellation of this City Bond. Upon any such registration of
transfer, the Issuer shall execute and the Bond Trustee shall authenticate and deliver in exchange for
this City Bond a new City Bond, registered in the name of the transferee, of authorized denominations.
The Bond Trustee, the Issuer and C/HP Cove shall, prior to due presentment for registration of
transfer, treat the registered owner as the person exclusively entitled to payment of principal, 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 day of the month
preceding each interest payment date.
Bond Insurance Policy No. ~ (the "Policy") with respect to payments due for principal
of and interest on this bond has been issued by ACA Financial Guaranty Corporation ("ACA"). The
Policy has been delivered to and will be held by The Bank of New York Trust Company of Florida,
N.A., Atlanta, Georgia. The Policy is on file and available for inspection at the office of the Bond
Trustee and a copy thereof may be secured from ACA. All payments required to be made under the
Policy shall be made in accordance with the provisions thereof. The owner of this Bond acknowledges
and consents to the subrogation rights of ACA as more fully set forth in the Policy.
Any exchange or registration of transfer shall be without charge except that the Bond 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
38
the issuance of.this City Bond have happened, exist and have been performed.
This City Bond shall not become obligatory for any purpose or be entitled to any security or
benefit under the Indenture or be valid until the Bond Trustee shall have executed the Certificate of
Authentication appearing hereon.
IN WITNESS WHEREOF, the City of Boynton Beach, Florida has caused this City Bond to
be signed by the manual or facsimile signature of its City Manager, and this City Bond to be dated
December._, 2002.
CITY OF BOYNTON BEACH, FLORIDA
By:
City Manager
39
-. (Form of Bond Trustee's Certificate of Authentication)
Date of Authentication: ~ ~
This City Bond is one of the City Bonds described in the within-mentioned Indenture.
THE BANK OF NEW YORK TRUST COMPANY OF
FLORIDA, N.A., as Bond Trustee
By:,
Authorized Signatory
40
-. (Form of Assignment)
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
(Please print or typewrite Name and Address,
including zip code of Transferee)
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF TRANSFEREE
the within City Bond and all fights thereunder, and hereby irrevocably constitutes and appoints
Attorney to transfer the within City 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 finn of the New
York Stock Exchange or a bank
or commercial trust company.
(End of Form of Assignment)
NOTE: The signature above must
correspond with the name of the
registered owner as it appears on
the front of this City Bond in every
particular, without alteration or enlargement or any
change whatsoever.
G:~ff234~3~\Tn~ lmlm~m.~2).wl~ 41
EXHIBIT B
REQUISITION
No.
Sirs:
I hereby requisition from the Project Fund created by the Indenture of Trust, dated as of
December 1,2002 (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:
O:'~'2345'L3 ~,\Tmat 1~2).wi~1 42
EXHIBIT "B"
LOAN AGREEMENT
LOAN AGREEMENT
between
CITY OF BOYNTON BEACH, FLORIDA
and
C/I-IP COVE, INC.
Dated as of December 1, 2002
Note:
The interest of the City of Boynton Beach, Florida in this Loan Agreement has been assigned
(except for the rights of and mounts payable to the City of Boynton Beach, Florida pursuant
to Sections 4.1 Co) and 6.4 hereof) pursuant to an Indenture of Trust, dated as of the date
hereof, from the City of Boynton Beach, Florida to The Bank of New York Trust Company
of Florida, N.A., as Bond Trustee.
-. TABLE OF CONTENTS
Page
Section 3.1.
Section 3.2.
Section 3.3.
Section 3.4.
ARTICLE IV
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION ................................. 1
Section 1.1. Definitions ................................................. 1
Section 1.2. Rules of Construction ........................................ 2
ARTICLE II
REPRESENTATIONS ......................................................... 2
Section 2.1. Representations by Issuer ...................................... 2
Section 2.2. Representations by C/I-IP Cove ................................. 3
ARTICLE m
REFINANCING OF PROJECT ................................................... 4
Agreement to Make Loan ...................................... 4
Agreement to Issue City Bonds ................................. 4
Agreement to Pay Costs of the Project ........................... 4
Limitation of Issuer's Liability .................................. 4
Section 5.3.
Section 5.4.
Section 5.5.
Section 5.6.
Section 5.7.
ARTICLE VI
PAYMENT .................................................................. 5
Section 4.1. Amounts Payable ............................................ 5-
Section 4.2. Payments Assigned .......................................... 5
Section 4.3. Default in Payments .......................................... 5
ARTICLE V
SPECIAL COVENANTS ....................................................... 6
Section 5.1. Restrictive Covenants ........................................ 6
Section 5.2. Use of Proceeds; Other Matters With Respect to Proiect and City Bonds
Reference to City Bonds Ineffective after City Bonds Paid ............ 9
Obligation of C/HP Cove to Furnish Certain Information to the Issuer .. 9
Management Services ........................................ 9
Continuing Disclosure ........................................ 9
Obligations Under Bond Indenture ............................... 12
EVENTS OF DEFAULT AND REMEDIES
Section 6.1.
Section 6.2.
Section 6.3.
Section 6.4.
Section 6.5.
ARTICLE VII
MISCELLANEOUS
Section 7.1.
Section 7.2.
Section 7.3.
Section 7.4.
Event of Default Defined ..................................... 13
Remedies on Default ........................................ 13
No Remedy Exclusive ....................................... 14
Extraordinary Fees and Other Expenses ......................... 14
No Additional Waiver Implied by One Waiver .................... 14
Term of Loan Agreement ..................................... 14
Notices, etc ................................................ 15
Amendments to Loan Agreement .............................. 15
Successors and Assigns ...................................... 15
Section .7.5.
Section 7.6.
Section 7.7.
Sevembility ............................................... 15
Aor~licable Law
Counterparts ............................................... 15
Section 7.8. Issuer May Perform C/HP Cove's Obligations ............... 15
Section 7.9. Limited Obligations of C/HP Cove ............................. 15
ii
THIS LOAN AGREEMENT is made as of the 1st day of December, 2002, and is 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 CC/HP Cove");
WITNESSETH:
WHEREAS, pursuant 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 has issued its Multi-Family
Housing Mortgage Revenue Bonds, Series 1996 (Clipper Cove Apartments), in the principal amount
of$11,940,000 (the "Refunded Bonds"), and used the proceeds thereof to make a loan to C/HP Cove
for the principal purpose of providing funds to C/HP Cove to refinance a multi-family residential
rental project (the "Project") in the City of Boynton Beach, Florida; and
WHEREAS, in order to further the purpose of the Act, the Issuer now proposes to issue its
Multi-Family Housing Mortgage Revenue Refunding Bonds, Series 2002 (Clipper Cove
Apartments), in the principal amount of $ (the "City Bonds"), and use the proceeds thereof-
to make a loan (the "Loan") to C/HP Cove for the purposes of providing funds to C/I-IP Cove to
refund the Refunded Bonds, to pay capital expenditures with respect to the Project and to pay costs
of issuance of the City Bonds; and
WHEREAS, the Issuer and C/HP Cove 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 AND RULES OF CONSTRUCTION
Section 1,1. Definitions. All words and terms defined in the Master indenture (as defined
in the hereinafter described Indenture), 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.
"Event of Default" shall mean any of the events enumerated in Section 6.1.
"Indenture" shall mean the Indenture of Trust, dated as of the date hereof, between the Issuer
and The Bank of New York Trust Company of Florida, N.A., as Bond Trustee, including any
amendments thereof or supplements thereto.
"Loan" shall mean the loan from the Issuer to C/HP Cove in the amount of $
"Official Statement" shall mean the Official Statement, dated December __, 2002, with
respect to the City Bonds.
Section 1.2. Rules of Construction. The following roles shall apply to the construction of
this Loan Agreement unless the context otherwise requires:
versa.
(a)
Words importing the singular number shall include the plural number and vice
(b) Words importing the redemption or calling for redemption of City Bonds shall
not be deemed to refer to or connote the payment of City Bonds at their stated maturity.
(c) All 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.
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 City 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 City Bonds to refund the Refunded Bonds.
(c) To the best of its knowledge, the Issuer is in compliance in all respects with
the Act, all other existing laws, rules, regulations, judgments, decrees and orders applicable to or
binding on it and the provisions of all agreements and insmunents by which it is bound, a default
under or violation of which would prevent it from issuing and selling the City 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
2
the Issuer's knowledge, constitute a default under or violation of the Act or any law, nde,
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 City Bonds by the Issuer, (2) the execution or delivery of or compliance by the Issuer with the
terms and conditions of the other Financing Instruments to which it is a party, or (3) the assignment
by the Issuer to the Bond Trustee of its fights under this Loan Agreement. The consummation by
the Issuer of the transactions set forth in the City 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 roles and regulations promulgated thereunder by any regulatory authority or
agency.
(0 No litigation, inquiry or investigation of any kind in or by any judicial or
administrative court or agency is pending or to its 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 relating to the execution
and delivery of such Financing Instruments on behalf of the Issuer.
(g) The Issuer has found that the issuance of the City Bonds will serve the
purposes of the Act and that the Loan to C/HP Cove is in furtherance of the purposes of the Act.
(la) 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 revenues and receipts to be derived from this Loan Agreement have not
been pledged previously by the Issuer to secure any of its notes or bonds other than the City Bonds.
The Issuer makes no representation, covenant or agreement as to the financial position or
business condition of C/HP Cove or the Project and does not represent or warrant as to any
statements, materials, representations or certifications furnished by C/I-IP Cove in connection with
the sale of the City Bonds or as to the correctness, completeness or accuracy thereof.
Section2.2. Representations by C/HP Cove. C/HP Cove makes the following
representations as the basis for its undertakings hereunder:
(a) All representations made by C/HP Cove in Section 501 of the Master
Indenture are incorporated herein by this reference as if made herein.
Co) C/HP Cove 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) C/HP Cove 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.
ARTICLE HI
REFINANCING OF PROJECT
Section 3.1. Agreement to Make Loan. The Issuer agrees to make, but solely from the
proceeds of the City Bonds, and C/HP Cove agrees to accept, the Loan for the principal purpose of
refunding the Refunded Bonds, paying costs of issuance incidental thereto, and paying the cost of
repairs, replacements and other amounts chargeable to the capital account of the Project in
accordance with GAAP. C/HP Cove agrees to pay the Issuer $75,000 simultaneous with the issuance
of the City Bonds. C/HP Cove's obligation to repay the Loan shall be evidenced and secured by
Obligation No. 1 and the Master Indenture. C/HP Cove agrees to use the proceeds of the Loan to
refund the Refunded Bonds in accordance with the provisions of the Indenture and to make all
payments required hereunder and under Obligation No. 1, subject to the limitation of Section 7.9,
when and as the same shall become due. Subject to such limitation, C/HP Cove acknowledges and-
agrees that it is the intent of C/I-IP Cove to make, and C/HP Cove agrees to make, or cause to be
made, payments required under Obligation No. 1 and this Loan Agreement when and as the same
shall become due.
Section 3.2. Agreement to Issue City Bondq. In order to provide funds for the principal
purpose of refunding the Refunded Bonds, the Issuer shall, simultaneously with the execution and
delivery hereof, proceed with the issuance of the City Bonds bearing interest, maturing and having
the other terms and provisions set forth in the Indenture and, as security for the City Bonds, shall
pledge and assign, without recourse to the Bond Trustee (a) all of its fight, title and interest in and
to this Loan Agreement (except for the rights of the Issuer pursuant to Sections 4.1(b) 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 404 of the Indenture. All revenues and assets pledged and
assigned hereby shall immediately be subject to the lien of such pledge without any physical delivery
thereof or any further act. By its execution of this Loan Agreement, C/lIP Cove conclusively
acknowledges its approval of all the terms and conditions of the Indenture.
Section 3.3. Agreement to Pay Costs of the ProjectJ C/HP Cove shall use proceeds of the
Loan only to refund the Refunded Bonds, to pay costs of issuance of the City Bonds and to pay Costs
of the Project.
Section 3.4. Limitation of Issuer's Liabili _ty. 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 for the payment of money shall be deemed
to constitute a debt or general obligation of the Issuer but any such obligation shall be payable solely
4
from the proceeds of the City Bonds, the payments made hereunder and under Obligation No. 1 and
the security for Obligation No. 1, including the Mortgage. Neither the members of the City
Commission of the Issuer nor any persons executing the City Bonds shall be liable personally on the
City Bonds by reason of the issuance thereof. The City Bonds shall be limited obligations of the
Issuer as provided therein and in the Indenture.
ARTICLE IV
PAYMENT
Section 4.1. Amount~ Payable.
(a) C/HP Cove covenants to make payments required by Obligation No. 1, as and
when the same become due.
Co) C/HP Cove also shall pay, or cause to be paid, as and when the same become
due, unless paid, (1) to the Bond Trustee, its reasonable fees for services rendered and for expenses
reasonably incurred by it as Bond Trustee under the Indenture, including without limitation the
reasonable fees of its counsel, all reasonable charges for exchange or registration of Uamfer of City
Bonds, any reasonable cost or expense necessary to cancel and discharge the Indenture upon payment
in full of the City Bonds and the reasonable fees and expenses of any agent engaged by the Bond
Trustee pursuant to Section 1001(m) of the Indenture; (2) to the Rating Agency, a fee of $2,500 on-
each January 1 beginning January 1,2003 and a fee of $ upon issuance of the City Bonds;
(3) to the Issuer, all reasonable and necessary costs and expenses of the Issuer directly related to the
issuance of the City Bonds; and (4) to the Bond Trustee and Issuer, all other amounts that C/HP
Cove 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 which would cause the
"yield" on the Loan Agreement, Obligation No. 1 or any other "acquired purpose obligation" to be
"materially higher" than the "yield" on the applicable City Bonds, as such quoted terms are defined
in the Code.
(c) Pursuant to the Master Indenture and Mortgage, C/HP Cove has pledged and
assigned to the Master Trustee, its interests in all receipts, rentals and other amounts received with
respect to the Project, and C/HP Cove agrees to pay all receipts, rentals and other amounts received
with respect to the Project, when received, directly to the Master Trustee for deposit in the Revenue
Fund under the Master Indenture. If the total of such amounts is less than the amounts to be paid by
C/HP Cove under subsections (a) and (b), C/HP Cove shall nonetheless, but subject to Section 7.9
hereof, be obligated to make full payment of all amounts due under subsections (a) and (b).
Section 4.2. Payments Assigned. 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 Obligation No.
1 (except its rights to 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 Bond Trustee. C/HP Cove consents to such assignment and
agrees to pay to the Bond Trustee all amounts payable by C/HP Cove that are so assigned, including
all receipts with respect to the Project.
Section 4.3. Default in Payments. If C/HP Cove should fail to make payments required
hereby or by Obligation No. 1 or if C/HP Cove should fail to make any other payment required
hereunder when due, C/HP Cove, to the extent permitted by law, shall pay interest with respect to
the payments thereon at the maximum rate on any of the City Bonds from the due date until paid.
ARTICLE V
SPECIAL COVENANTS
Section 5.1. Restrictive Covenantq. The Restrictive Covenants are hereby incorporated
herein by reference and C/HP Cove hereby covenants and agrees to perform each and every covenant
and agreement set forth therein.
Section 5.2. Use of Proceeds; Other Matters With Respect to Project and Ci_ty Bondn. (a)
C/HP Cove shall not (1) request, authorize, approve or permit to be approved on its behalf, any
payment of the proceeds of the City Bonds if, as a result of such payment, (i) less than 95% of the
proceeds of the City 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 City Bonds financed by the City Bonds would exceed
2% of the proceeds of the City Bonds, within the meaning of Section 147(g) of the Code, or (iii) less
than all property provided by net proceeds of the City Bonds being owned other than by a
Tax-Exempt Organization (hereinafter de£med) or a governmental unit (as deemed in Section 145
of the Code) (2) take or refrain from taking any other 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 City Bonds from gross income for Federal income tax purposes.
Without limitation by reason of the foregoing or any other provision of this Agreement, C/HP Cove
agrees to take all action required under the Code with respect to use of the proceeds of the City
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 proposed or promulgated by the Department of Treasury or the Internal Revenue Service
pertaining to obligations issued under Sections 142(d) and 145 of the Code, to prevent loss of the
exclusion of interest on the City 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 C/HP Cove shall not use the proceeds of the City Bonds, or permit such
proceeds to be used, directly or indirectly, to provide any airplane, skybox or other private luxury
box, any facility primarily used for gambling, or any store the principal business of which is the sale
of alcoholic beverages for consumption offpremises.
(b) C/HP Cove represents and agrees, in compliance with 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 Project 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) C/HP Cove represents that all representations and warranties made by it in
Section 5.4 of the Loan Agreement, dated July 1, 1996, between it and the Issuer were then and at
all times since there, have been tree and correct in all respects.
6
(d) C/HP Cove represents and agrees that the weighted average maturity of the
City 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 C/HP Cove delivered on the
date of the issuance of the City Bonds. C/HP Cove 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 147Co) 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 C/HP
Cove, unless C/HP Cove shall file with the Bond Trustee an opinion of Bond Counsel that such
changes to the Project will not result in loss of the exclusion of interest on the City Bonds from gross
income for Federal income tax purposes.
(e) C/HP Cove represents that the information contained in the certificates or
letters of representation of C/HP Cove 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.
(0 C/HP Cove shall not and the Issuer shall not knowingly (1) take or omit to
take any action, or approve the Bond Trustee's making any investment or use of the proceeds of the
City 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 Projec0 or the taking or
omission of any other action, the taking or omission of which would cause any City Bonds to be
"arbitrage bonds" within the meaning of Section 148 of the Code or (2) barring unforeseen
circumstances, approve the use of the proceeds from the sale of any City Bonds otherwise than in
accordance with the Issuer's "non-arbitrage" certificate given immediately prior to the issuance of
City Bonds.
(g) C/HP Cove 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(0 of the Code and Treasury Regulations thereunder and retain
records of all such determinations until six years after payment of the City 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 City Bonds over (2) the future value of all non-purpose payments with
respect to the City 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 C/HP Cove selects
another date to be the installment computation date prior to the date that any amount with respect
to the City Bonds is paid or required to be paid to the United States of America pursuant to Section
148 of the Code or Treasury Regulations issued thereunder.
7
(i) Within 30 days (i) after January 1, 2007, the initial installment computation
date, and at least once every five years thereafter, and (ii) after the final payment of the City Bonds,
C/HP Cove will cause the Rebate Amount to be computed and will deliver a copy of such
computation (the "Rebate Amount Certificate") to the Issuer, the Master Trustee and the Bond
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, C/I-IP
Cove, on behalf of the Issuer, shall pay to the United States of America at least 90% of the Rebate
Amount as set 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 fifda anniversary of the initial installment computation date and on or before 60 days after every
fifth anniversary date thereafter until payment of the City Bonds, C/HP Cove, on behalf of the Issuer,
shall pay to the United States of America at least the mount, 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 theretofore made to the United States of America pursuant to this Section. On or before
60 days after payment of the City Bonds, C/HP Cove, on behalf of the Issuer, shall pay to the United
States of America the mount, if any, by which 100% of the Rebate Amount set forth in the Rebate
Amount Certificate with respect to the City Bonds exceeds the aggregate of all payments theretofore
made pursuant to this Section. All such payments shall be made by C/I-IP Cove, on behalf of the
Issuer, from any available source. C/HP Cove shall prepare any 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 C/HP Cove receives and delivers to the Issuer and the Bond Trustee an opinion of
Bond Counsel that such payment is not required under the Code to prevent the City Bonds from
becoming "arbitrage bonds" within the meaning of Section 148 of the Code.
(1) C/HP Cove represents that the City Bonds are not and will not be "Federally
guaranteed," as such term is used in Section 149Co) of the Code.
(m) C/HP Cove will not engage in any activities or take any action that might
reasonably be expected to result in C/I-IP Cove ceasing to be a Section 501 (e)(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. C/HP Cove will promptly notify the Bond 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) C/I-IP Cove represents and agrees that all of the property provided or to be
provided by the net proceeds of the City Bonds will be owned by a Tax-Exempt Organization or by
a governmental unit within the meaning of Section 145(a)(1) of the Code.
Section 5.3. Reference to City Bonds Ineffective after City Bonds Paid. Upon payment
of the City Bonds all references in this Loan Agreement to the City Bonds and the Bond Trustee,
except those in Section 7.1, shall be ineffective, and neither the Bond Trustee nor the owners of any
of the City Bonds shall thereafter have any fights hereunder except as provided in Section 7.1.
Section 5.4. Obligation of C/HP Cove to Furni.qh Certain Information to the Issue.. C/HP
Cove shall furnish to the Issuer and the Bond Trustee, upon request, such information with respect
to the City Bonds, the Project or C/HP Cove's obligations hereunder or under the Financing
Instruments as may be reasonably necessary for the Issuer to complete its annual audit or to make
any reports as may be required by state or Federal law, now or hereafter in effect.
Section 5.5. Management Service.q. C/HP Cove agrees to comply with the provisions of
Revenue Procedure 97-13, to the extent necessary to preserve the m-exempt status of the City
Bonds, in connection with any management or other services contract with respect to the Project.
Section 5.6. Continuing Disclosures (a) This Section 5.6 constitutes the written
undertaking for the benefit of the holders of the City Bonds required by Section (b)(5)(i) of the
Securities and Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934, as
amended (17 CFR Part 240, § 240 15c2-12) (the "Rule"). It is C/HP Cove's express intention that
this Section 5.6 be assigned pursuant to and in accordance with the terms of the Indenture to the
Bond Trustee for the benefit of the Owners and any Beneficial Owners of the City Bonds and that-
the Bond Trustee and each Owner and each Beneficial Owner of the City Bonds be a beneficiary of
this Section 5.6.
(b) C/HP Cove, as an "obligated person" within the meaning of the Rule,
undertakes to provide the following information as provided in this Section 5.6:
(1) Annual Financial Information;
(2) Financial Statements, if any; and
(3) Material Event Notices.
(c) (1) Subject to the terms of this Section 5.6, C/I-IP Cove shall while any
City Bonds are Outstanding provide the Annual Financial Information to the Bond Trustee on or
before the date 180 days after the end of each Fiscal Year of C/HP Cove (the "Report Date"). C/HP
Cove shall include with each submission of Annual Financial Information to the Bond Trustee a
written representation to the effect that the Annual Financial Information is the Annual Financial
Information required by this Section 5.6 and that it complies with the applicable requirements of this
Section 5.6. C/HP Cove may adjust the Report Date if C/HP Cove changes its Fiscal Year by
providing written notice of the change of Fiscal Year and the new Report Date to the Bond Trustee,
each then existing NRMSIR and the SID, if any; provided that the new Report Date shall be one
hundred eighty days (180) days at~er 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 C/HP
Cove provides to the Bond Trustee the Annual Financial Information by specific reference to
9
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, C/HP
Cove shall provide Financial Statements when and if available while City Bonds are Outstanding
to the Bond Trustee.
(3)
(i) If a Material Event occurs while any City Bonds are
Outstanding, C/HP Cove shall provide in a timely manner a Material
Event Notice to the Bond Trustee and the Issuer. Each Material
Event Notice shall be so captioned and shall prominently state the
date, title and CUSIP numbers of the City Bonds.
(ii) The Bond Trustee shall promptly advise C/HP Cove
whenever, in the course of performing its duties as Bond Trustee
under the Indenture, the Bond Trustee identifies an occurrence which,
if material, would require C/HP Cove to provide a Material Event
Notice pursuant to clause (3)0); provided that the failure of the Bond
Trustee so to advise C/HP Cove shall not constitute a breach by the
Bond Trustee of any of its duties and responsibilities hereunder.
(4)
(i) The Bond Trustee shall each year while the provisions of this
Section 5.6 are operative, at least thirty (30) days prior to the Report
Date provide notice to C/HP Cove of its obligation pursuant to this
Section 5.6 to provide the Annual Financial Information to each
existing NRMSIR and SID.
(ii) The Bond 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 the Insurer
and to each then existing NRMSIR and the SID, if any.
(iii) The Bond 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 Insurer, the Municipal Securities Rulemaking
Board, each NRMSIR and the SID, if any.
(5) The Bond Trustee shall provide in a timely manner to the Municipal
Securities Rulemaking Board and to the SID, if any, notice of any failure while any City Bonds are
Outstanding by C/HP Cove to provide Annual Financial Information on or before the Report Date.
(d) The following are the defmitions of the capitalized terms used in this Section
and not otherwise defined in this Agreement.
10
(1)
(2)
(3)
(5)
"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 C/I-IP Cove, provided at least annually,
of the type included in the Official Statement utilized in connection
with the sale of the City Bonds, which Annual Financial Information
shall include Financial Statements.
"Financial Statements" means C/HP Cove's annual financial
statements, prepared in accordance with GAAP, and if audited,
accompanied by the report of the auditing certified public account.
"Material Event" means any of the following events, if material, with
respect to the City Bonds.
(i) Principal and interest payment delinquencies;
(ii) Non-payment related defaults;
(iii) Unscheduled draws on debt service reserves reflecting
financial difficulties;
(iv) Unscheduled draws on credit enhancements reflecting
financial difficulties;
(v)
Substitution of credit or liquidity providers, or their failure to
perform;
Adverse tax opinions or events affecting the tax-exempt status
of the security;
(vii) Modifications to rights of holders of City Bonds;
(viii) City Bond calls (other than scheduled mandatory sinking fund
redemptions);
(ix) Defeasances;
(x)
Release, substitution, or sale of property securing repayment
of the City Bonds; and
(ix) Rating changes.
"NRMSIR" means a nationally recognized municipal securities
information repository, as recognized from time to time by the
Securities and Exchange Commission for the purposes referred to in
11
the Rule; the NRMSIRs as of the date of this Agreement being as
follows:
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
repositories 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 depository as operated or designated
by the State as such for the purposes referred to in the Rule.
(e) Unless otherwise required by law and subject to technical and economic
feasibility, C/HP Cove shall employ such methods of information transmission as shall be requested
or recommended by the designated recipients of C/HP Cove's information.
(f) The continuing obligation hereunder of C/HP Cove to provide Annual
Financial InformatiOn and Material Event Notices and the Bond Trustee's obligations under this
Section 5.6 shall terminate immediately once the City Bonds no longer are Outstanding. This
Section 5.6, or any provision hereof, shall be null and void in the event that C/HP Cove delivers to
the Bond Trustee and the Issuer an opinion of Bond Counsel to the effect that those portions of the
Rule which require this Section 5.6, or any such provisions, are invalid, have been repealed-
retroactively or otherwise do not apply to the City Bonds; provided that C/HP Cove shall have
provided notice of such delivery and the cancellation of this Section 5.6 to each then existing
NRMSIR and the SID, if any. This Section 5.6 may be amended without the consent of the
Bondholders, but only upon the delivery by C/I-IP Cove to the Bond Trustee and the Issuer of the
proposed amendment and an opinion of Bond Counsel to the effect that such amendment, and giving
effect thereto, will not adversely affect the compliance of this Section 5.6 and by C/HP Cove with
the Rule; provided that C/Iq? Cove shall have provided notice of such delivery and of the
amendment to each then existing NRMSIR and the SID, if any.
(g) Any failure by C/HP Cove to perform in accordance with this Section 5.6 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 "Event of Default" shall not
apply to any such failure. Neither the Issuer nor the Bond Trustee shall have any duty whatsoever
to enforce this Section 5.6.
The Bond Trustee and each Owner and each Beneficial Owner individually may take
remedial action to require C/I-IP Cove 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.
Section 5.7. Obligations Under Bond Indenture,.
C/HP accepts all obligations imposed upon it pursuant to the Bond Indenture, and agrees to
pay and perform the same in accordance with the terms thereof, including, but not limited to, the
obligations that C/HP Cove to the Insurer contained in Section 1301(g) and (h) of the Bond
12
Indenture. C/HP Cove agrees to pay the Bond Insurance Premium with respect to the City Bonds as
and when the same becomes due and payable.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.1. Event of Default Defined. Each of the following events shall be an Event of
Default:
(a) Failure of C/HP Cove to make any payment of principal, premium, if any, or
interest under Obligation No. 1 when the same becomes due and payable.
(b) Except as provided in Section 5.6 and in subsection (c) below, failure by C/HP
Cove to observe and perfom any other covenant, condition or agreement on its part under this Loan
Agreement for a period of 30 days after notice (unless C/liP Cove and the Bond Trustee shall agree
in writing to an extension of such time prior to its expiration), specifying such failure and requesting
that it be remedied, given by the Issuer or the Bond Trustee to C/HP Cove, or in the case of any such
default which cannot with due diligence be cured within such 30-day period, failure of C/HP Cove
to proceed promptly to cure the same with due diligence.
(c) The falsity when made, in any materiai respect~ ofany warranty, rcpresentation.
or other statement by or on behalf of C/HP Cove contained in this Loan Agreement or in any
instrument furnished in connection with the issuance or sale of the City Bonds.
Indenture.
(d)
An Event of Default under the Indenture, the Mortgage or the Master
Notwithstanding subsection (b) above, if by reason of force ..majeure C/I-IP Cove 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 and 5.2 hereof, C/HP Cove 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 of
public enemies; orders of any kind of the government of the United States of America or the State
of Florida or any political subdivision thereof or any of their departments, agencies or officials, or
any civil or military authority; insurrections; riots; epidemics; landslides; lightning; 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 C/I-IP Cove. C/I-IP Cove shall remedy with all reasonable dispatch the cause or causes
preventing C/HP Cove from carrying out its covenants, conditions and agreements, provided that the
settlement of strikes, lockouts and other industrial disturbances shall be entirely within the discretion
of C/HP Cove, and C/HP Cove shall not be required to make settlement of strikes, lockouts and other
industrial disturbances by acceding to the demands of any opposing party when such course is in the
judgment of C/HP Cove not in its best interests.
Section 6.2. Remedies on Default.
13
Upon the Occurrence and continuation of an Event of Default, the Bond Trustee may take
whatever 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 C/I-IP Cove under this Loan Agreement, Obligation No. 1 or the Restrictive
Covenants, including injunctive relief to require C/HP Cove to perform its obligations and covenants
hereunder or under the Restrictive Covenants or enjoin any acts or things which may be unlawful
or in violation of the fights of the Issuer or the Bond Trustee hereunder or under the Restrictive
Covenants.
The Issuer and the Bond 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. C/I-IP Cove shall pay all reasonable costs and expenses which may be incurred by the Issuer
or the Bond 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 fight or power accruing upon an Event of Default shall impair any such fight or power
or shall be construed to be a waiver thereof, and any such right or power may be exercised fi.om time
to time and as often as may be deemed expedient by the Issuer or the Bond 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. C/HP Cove shall, on demand, pay
to the Issuer its reasonable expenses and to the Bond Trustee its extraordinary fees and expenses,
including reasonable attorneys' fees (including in connection with any appeal and in any bankruptcy
proceeding) and other reasonable extraordinary expenses incurred by any of them in the collection
of amounts payable hereunder and under Obligation No. 1, or the enforcement of any other
obligation of C/HP Cove 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
MISCELLANEOUS
Section 7.1. Term of Loan Agreement. This Loan Agreement shall be effective upon its
execution and delivery and, except as herein provided, shall terminate when no City Bonds are
outstanding. The covenants of C/HP Cove contained in Sections 4.1 (b), 5.1, 5.2(g) and 5.20) and
the rights of enforcement and indemnification of the Issuer and the Bond Trustee in connection
therewith contained in Sections 5.1, 5.2(g), 5.20) and 6.4 shall survive termination or expiration of
this Loan Agreement, and shall be binding upon the successors and assigns of C/HP Cove.
14
Section 7 2. .Notices, etc. Unless otherwise provided herein, ail demands, notices,
approvals, consents, requests and other communications hereunder shail be given in the manner
provided in the Indenture.
Section 7.3. Amendments to Loan Agreement. This Loan Agreement shail not be amended
or supplemented subsequent to the issuance of the City Bonds and before payment of the City Bonds
without the consent of the parties hereto and the consent of the Bond Trustee and, if required by the
Indenture, the owners of the City Bonds and the Insurer, given in any case in accordance with Article
XII of the Indenture.
Section 7.4. Successors and Assi~.~, 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 7.5. .Sevembility. If any provision of this Loan Agreement shail be held invalid
by any court of competent jurisdiction, such holding shail not invaiidate any other provision hereof.
Section 7.6. Applicable Law. This Loan Agreement shall be governed by the applicable
laws of the State of Florida.
Section 7.7. Counterparts. This Loan Agreement 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
instnunent.
Section 7.8. Issuer May Perform C/HP Cove's Obligations. If C/HP Cove shail fail to
make any payment or perform any act required of it hereunder, the Issuer, without prior notice to or
demand upon C/I-IP Cove and without releasing any obligation or 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 ail costs, fees and expenses so incurred shail be payable by C/HP Cove as an additionai
obligation under this Agreement, together with interest thereon at the maximum rote on any of the
City Bonds until paid.
Section 7.9. Limited Obligations of C/HP Cove. The obligations of C/HP Cove hereunder
are limited as described in Section 5.13 of the Master Indenture.
IN WITNESS WHEREOF, the Issuer and C/HP Cove have caused this Loan Agreement to
be executed in their respective names by their duly authorized officers or representatives, ail as of
the date fa'st above written.
CITY OF BOYNTON BEACH, FLORIDA
ATTEST:
By:.
City Manager
15
By: ..
City Clerk
C/HP COVE, INC.
By:
Its President
16
EXHIBIT "C'___._~'
UNDERWRITING AGREEMENT
-. $13,425,000
CITY OF BOYNTON BEACH, FLORIDA
Multi-Family Housing Mortgage Revenue Refunding Bonds, Series 2002
(Clipper Cove Apartments)
Bond Purchase Agreement
December __., 2002
City of Boynton Beach, Florida
100 East Boynton Beach Boulevard
P.O. Box 3101
Boynton Beach, Florida 33425
C/HP Cove, Inc.
4016 Broadway Avenue
West Palm Beach, FL 33407
Dear Sirs:
RBC Dain Rauscher Inc. and Bear, Stearns & Co. Inc. (collectively, the "Purchasers") offer to
enter into this Bond Purchase Agreement with the City of Boynton Beach, Florida, (the "Issuer") and
C/HP Cove, Inc. (the "Borrower"), subject to acceptance at or prior to 6:00 p.m., Florida time, on the date
hereof.
1. Introductory. The Issuer is authorized to issue $13,425,000 principal amount of its Multi-
Family Housing Mortgage Revenue Refunding Bonds, Series 2002 (Clipper Cove Apa~h~ents) (the
"Bonds") pursuant to and in accordance with Article VIII, Section 2 and Article VII, Section 10(c), of the
Florida Constitution, and Chapter 166, Florida Statutes. The Bonds will be issued pursuant to an
Indenture of Trust dated as of December 1, 2002 (the "Indenture"), between the Issuer and The Bank of
New York Trust Company of Florida, N.A., as trustee (the "Trustee"), and will mature on the dates and in
the amounts, will have series designations and will bear interest at the rates shown on Schedule I hereto.
Interest on the Bonds is to be excludable from federal gross income of the holders thereof. The proceeds
of the Bonds will be used to provide money for refunding the Issuer's Multi-Family Housing Mortgage
Revenue Bonds, Series 1996 (Clipper Cove Apartments) (the "Prior Bonds"), to provide funds for
rehabilitation and certain costs of issuing the Bonds. The Prior Bonds were issued to refinance and
rehabilitate a multifamily housing project located in the City of Boynton Beach, Florida known as Clipper
Cove Apartments (the "Project"). Simultaneously with the issuance of the Bonds, the Borrower is issuing
its Bonds (the "Corporate Bonds") the proceeds of which will be used to fund a Debt Service
Re~erve Fund under the Master Indenture and distribute funds to the Borrower. The Bonds and the
Corporate Bonds will each be secured by a note (collectively, the "Notes") issued on a parity basis
pursuant to a Master Trust Indenture dated as of December 1, 2002 (the "Master Indenture") between the
Borrower and The Bank of New York Trust Company of Florida, N.A. (in such capacity, the "Master
Trustee").
2. Purchase, Sale and Delivery of Bonds. On the basis of the representations, warranties and
agreements contained herein, but subject to the terms and conditions herein set forth, the Purchasers
hereby agree to purchase from the Issuer, and the Issuer hereby agrees to sell to the Purchasers, the Bonds
at a purchase price of % of the principal amount thereof, plus accrued interest from December __,
2002 to the Closing Date (defined below). The estimated issuance expenses, including the discount of the
Purchasers, are set forth in Schedule II hereto.
The Issuer will deliver the Bonds to the Purchasers for the accounts of the Purchasers against
payment of the ptitchase price therefor by wire transfer or checks payable in immediately available funds
at the office of the Trustee at 10:00 a.m., Florida Time, on December __, 2002, or at such other time and
place as the Purchasers, the Issuer and the Borrower shall agree (the "Closing Date").
Notwithstanding anything in this Section 2 to the contrary, the Purchasers may elect to take
delivery of the Bonds in temporary form. In such event, Bonds in definitive form shall be delivered to the
Purchasers within 10 days after the Closing Date.
3. Closing Documents. At or prior to the Closing Date, the Purchasers shall have received the
following:
(a) The Official Statement relating to the Bonds (the "Official Statement").
(b) The Master Trust Indenture dated as of December 1, 2002, between the Bank of New
York Trust Company of Florida, N.A., as master trustee (the "Master Trustee") and the Borrower (the
"Master Indenture").
(c) The Indenture, duly executed by the Issuer and the Trustee.
(d) The Trust Indenture, dated December 1, 2002, between the Borrower and The Bank of
New York Trust Company of Florida, N.A., as trustee thereunder (the "Corporate Trustee").
(e) The Loan Agreement (the "Loan Agreement"), duly executed by the and the
Borrower.
(f) The Declaration of Restrictive Covenants, as amended by a first amendment thereto dated
as of December 1, 2002, (the "Tax Regulatory Agreement"), duly executed by the Issuer, the Borrower
and the Trustee.
Borrower.
The Promissory Note (the "Promissory Note") to the Master Trustee duly executed by the
(h) The promissory note from the Master Trustee to the Trustee securing the Bonds (the
"Municipal Note").
(i) The promissory note from the Master Trustee to the Corporate Trustee (the "Corporate
Note") securing the Corporate Bonds.
(j) The Mortgage and Security Agreement securing the Borrower's obligations under the
Master Indenture (the "Mortgage").
(k) A certified copy or copies of the resolution of the City Commission of the Issuer, as
supplemented and amended, authorizing the issuance of the Bonds, and the execution and delivery of the
Indenture, the Loan Agreement, the Tax Regulatory Agreement and this Bond Purchase Agreement.
and the documents set forth in ,
above are hereinafter referred to as the "Borrower Documents."
and
The Borrower and the Issuer each confirms that it has approved the distribution of a preliminary
official statement dated December __, 2002, relating to the Bonds (the "Preliminary Official Statement")
2
to prospective purchasers and investors. The Borrower hereby represents to the Purchasers that the
Preliminary Offici~'l Statement is "final" within the meaning of Rule 15c2-12(b) under the Securities
Exchange Act of 1934 (i.e., it omits no more than the following: the offering prices, the interest rates,
selling compensation, amount of proceeds and the delivery date of the Bonds and other terms depending
on such factors).
On or before the Closing Date, the Issuer shall have delivered to the Purchasers the Official
Statement duly completed with the information permitted to be omitted therefrom by Rule 15c2-12(b)
under the Securities Exchange Act of 1934 and such other amendments and supplements as shall have
been approved by the Issuer and approved by the Purchasers.
The Issuer agrees to provide the Purchasers with a reasonable number of additional copies of all
of the foregoing documents, at the expense of the Borrower, as the Purchasers shall request and the Issuer
authorizes the use thereof in connection with the offer, sale and distribution of the Bonds.
4. Representations and Warranties of the Issuer. The Issuer represents and warrants to the
parties hereto:
(a) The Issuer is a political subdivision and municipality of the State of Florida (the "State")
and has full legal right, power and authority (i) to enter into this Bond Purchase Agreement, (ii) to execute
and deliver the Indenture, the Loan Agreement and the Tax Regulatory Agreement, (iii) to issue, sell and
deliver the Bonds as provided herein, (iv) to loan the proceeds of the Bonds to the Borrower to refinance
the Project and to pay certain costs of the financing, and (v) to carry out the transactions contemplated by
this Bond Purchase Agreement, the Indenture, the Loan Agreement and the Tax Regulatory Agreement,
as they may be amended or supplemented from time to time by the Issuer.
(b) The information in the Preliminary Official Statement and the Official Statement under
the captions "THE ISSUER," "CONTINUING DISCLOSURE" and "NO LITIGATION - The Issuer"
(insofar as such information relates to the Issuer), does not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. The Issuer makes no representations
concerning the information in any other section of the Preliminary Official Statement or of the Official
Statement or in the appendices thereto, except that, to the knowledge of the Issuer, neither such other
sections or the appendices make an untrue statement of a material fact or omit to state a fact necessary in
order to make the statements made in such other sections and appendices, in light of the circumstances
under which they were made, not misleading.
(c) By official action of the Issuer prior to or concurrently with the acceptance hereof, the
Issuer has duly approved and ratified the use of the Preliminary Official Statement, has duly authorized
and approved the use and distribution of the Official Statement, has duly authorized and approved the
execution and delivery of, and the performance by the Issuer of the obligations on its part contained in,
the Indenture, the Bonds, this Bond Purchase Agreement, the Loan Agreement, and the Tax Regulatory
Agreement and has duly authorized and approved the consummation of all other transactions on the part
of the Issuer contemplated by this Bond Purchase Agreement.
(d) To the best of the Issuer's knowledge, (i) the Issuer is not in breach of or default under
any applicable law or administrative regulation of the State or the United States which would impair the
performance of its obligations under this Bond Purchase Agreement; and (ii) the execution and delivery
of the Bonds, the Indenture, this Bond Purchase Agreement, the Loan Agreement and the Tax Regulatory
Agreement, and compliance with the provisions of each thereof, will not conflict with or constitute a
breach of or default under any law, administrative regulation, judgment, decree, loan agreement, note,
resolution, agreement or other instrument to which the Issuer is a party or is otherwise subject.
(e) All approvals, consents and orders of any governmental authority, board, agency or
commission having jurisdiction which would constitute a condition precedent to the performance by the
Issuer of its obligations hereunder have been obtained.
(f) The Issuer has received no notice of any action, suit, proceeding, inquiry or investigation,
at law or in equity, before or by any court, public board or body, pending, and has no knowledge of any
threatened action, against the Issuer affecting the existence of the Issuer or the titles of its officials to their
respective offices or seeking to prohibit, restrain or enjoin the financing or the sale, issuance or delivery
of the Bonds or the pledge of revenues or assets of the Issuer to be pledged to pay the principal of and
interest on the Bonds, or in any way contesting or affecting the validity or enforceability of the Bonds,
this Bond Purchase Agreement, the Indenture, the Loan Agreement, or the Tax Regulatory Agreement or
contesting in any way the completeness or accuracy of the Official Statement, or contesting the powers of
the Issuer or any authority for the issuance of the Bonds, the execution and delivery of this Bond Purchase
Agreement, the Indenture, the Loan Agreement or the Tax Regulatory Agreement, wherein an
unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of
the Bonds, the IndentUre, the Loan Agreement, the Tax Regulatory Agreement or this Bond Purchase
Agreement.
(g) The Bonds, when issued, authenticated and delivered in accordance with the Indenture
and sold to the Pumhasers as provided herein, will be validly issued and outstanding limited revenue
obligations of the Issuer enforceable in accordance with their terms and entitled to the benefits of the
Indenture, subject to (a) the exercise of judicial discretion in accordance with general principles of equity,
and (b) bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors'
rights heretofore or hereafter enacted to the extent constitutionally applicable.
(h) The Indenture, the Loan Agreement, the Tax Regulatory Agreement and this Bond
Purchase Agreement upon the execution and delivery thereof, will constitute legal, valid and binding
obligations of the Issuer enforceable in accordance with their terms, subject to (a) the exercise of judicial
discretion in accordance with general principles of equity, and (b) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent
constitutionally applicable.
(i) The Issuer is not now in default, nor has the Issuer been in default at any time since
December 31, 1975 as to principal or interest with respect to any obligations issued by the Issuer or
successor to the Issuer.
Any certificate signed by an authorized officer of the Issuer and delivered to the Purchasers shall
be deemed a representation and warranty by the Issuer to the Purchasers as to the statements made
therein.
5. Representations and Warranties of Borrower. The Borrower represents and warrants to the
parties hereto:
(a) The Borrower (i) is a Florida nonstick nonprofit corporation, qualified to transact
business under the laws of the State of Florida (the "State") and is in good standing under the laws of the
State, (ii) has the full legal right, power and authority to own its properties and assets, and to carry on its
business as now being conducted by it, and as contemplated by the Borrower Documents, and (iii) has the
full legal right, power and authority to execute and deliver the Loan Agreement, the Tax Regulatory
4
Agreement, this Bond Purchase Agreement, the Note and the Mortgage and to perform all the
undertakings ofth~'Borrower thereunder.
(b) The execution and delivery of the Borrower Documents have been duly authorized by the
Borrower and have been duly executed and delivered by the Borrower.
(c) The execution and delivery by the Borrower of this Bond Purchase Agreement, and the
performance by the Borrower of its obligations hereunder, and the consummation by the Borrower of the
transactions contemplated hereby, will not violate any provision of any articles of incorporation, by=laws
or any resolution of the Borrower, or of any mortgage, indenture, contract, agreement, document,
instrument or other undertaking to which the Borrower is a party or which purports to be binding upon the
Borrower or upon any of its assets, or to the best knowledge of the Borrower, any provision of law, rule
or regulation applicable to the Borrower, or any order or decree of any court or other agency or
government or governmental instrumentality.
(d) Assuming due authorization, execution and delivery hereof by the other parties hereto,
this Bond Purchase Agreement is a legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms subject to (a) the exercise of judicial discretion in
accordance with general principles of equity, and (b) bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting creditors' rights heretofore or hereat~er enacted to the extent
constitutionally applicable.
(e) The information relating to the Project, the Borrower[, Housing Partnership, Cornerstone
and Prope~ Asset Management of Florida, Inc.] in the Preliminary Official Statement and the Official
Statement does not make any untrue statement of a material fact or omit to state a material fact with
respect to the Project, the Borrower, Housing Partnership, Cornerstone or Property Asset Management of
Florida, Inc. necessary in order to make the statements made with respect thereto, in the light of the
circumstances under which they were made, not misleading, provided that no representation is made
concerning the information under the captions "The Series 2002 Bonds," "The Issuer," "The Indenture,"
"The Loan Agreement," "The Note and Mortgage," "The Restrictive Covenants," "No Litigation"
(insofar as the same relates to the Issuer), "Tax Treatment of Series 2002 Bonds," "Approval of Legal
Matters," "Continuing Disclosure," "Rating," "Underwriting" and "Miscellaneous," "Appendix B"
(except the actual financial and operational information provided by the Borrower and contained in
Appendix B), "Appendix C" and "Appendix D" except that, to the knowledge of the Borrower, such
sections do not make an untrue statement of a material fact or omit to state a fact necessary in order to
make the statements made in such sections, in light of the circumstances under which they were made, not
misleading.
(f) 'The Borrower will undertake, pursuant to the Loan Agreement to provide annual reports
and notices of certain events. A description of this undertaking is set forth in the Preliminary Official
Statement and will also be set forth in the final Official Statement.
6. Covenants of the Issuer. The Issuer covenants with the parties hereto that:
(a) If between the date of this Bond Purchase Agreement and the date 90 days following the
Closing Date an event occurs, which is actually known to the Issuer, affecting the Issuer, which would
cause the information in the Official Statement under the headings "THE ISSUER," "NO
LITIGATION"(insofar as such information relates to the Issuer) to contain an untrue statement of a
material fact or to omit to state a material fact necessary in order to make the statements therein with
respect to the Issuer, in light of the circumstances under which they were made, not misleading, the Issuer
shall notify the Purchasers and, if in the opinion of the Issuer or the Purchasers such event requires an
amendment or supplement to the Official Statement, the Issuer, solely at the expense of the Borrower,
will amend or supl~lement the Official Statement in a form and in a manner jointly approved by the Issuer
and the Purchasers; provided, however, if such event shall occur on or prior to the Closing Date, the
Purchasers in their sole discretion shall have the right to terminate the obligations of the Purchasers
hereunder by written notice to the Borrower and the Issuer, and the Purchasers shall be under no
obligation to purchase and pay for the Bonds.
(b) The Issuer will, solely at the Borrower's expense, furnish such information, execute such
instruments and take such other action consistent with the provisions of the Indenture, the Loan
Agreement and the Tax Regulatory Agreement in cooperation with the Purchasers as the Purchasers may
reasonably request to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and
regulations of such states and other jurisdictions of the United States of America as the Purchasers may
designate; provided, however, the Issuer shall not be required to register as a dealer or broker in any such
state or jurisdiction or be required to file a general consent to service of process or become subject to
service of process in any jurisdiction in which the Issuer is not now subject to service of process.
7. Covenants of the Borrower. The Borrower covenants with the Issuer and the Purchasers
that:
(a) If between the date of this Bond Purchase Agreement and the date 90 days following the
Closing Date an event occurs, which is known to the Borrower, which would cause the Official Statement
to contain an untrue statement of a material fact or to omit to state a material fact necessary in order to
make the statements therein with respect to the Borrower or the Project, in light of the circumstances
under which they were made, not misleading, the Borrower shall notify the Issuer and the Purchasers and,
if in the opinion of the Purchasers or the Issuer such event requires an amendment or supplement to the
Official Statement, the Purchasers, at the expense of the Borrower, will amend or supplement the Official
Statement in a form and in a manner jointly approved by the Issuer and the Purchasers; provided,
however, if such event shall occur on or prior to the Closing Date, the Purchasers in their sole discretion
shall have the right to terminate the obligations of the Purchasers hereunder by written notice to the Issuer
and the Borrower, and the Purchasers shall be under no obligation to purchase and pay for the Bonds.
(b) The Borrower shall take all necessary action on its part to cause the Bonds to comply
with the provisions of the laws and regulations of the State pursuant to which the Bonds are issued and of
the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder (the "Code")
and will not take any action, or permit any action within its control to be taken, which would violate such
provisions or which would cause interest on the Bonds to lose their exemption from federal income
taxation.
8. Conditions to Obligations of Purchasers. The obligation of the Purchasers to purchase and
pay for the Bonds will be subject to (i) the accuracy of the representations and warranties of the Issuer
and the Borrower herein, (ii) the accuracy of the representations and warranties made by the Trustee and
the Borrower pursuant to the Loan Agreement and by the Borrower pursuant to the Tax Regulatory
Agreement, (iii) the performance by the Issuer and the Borrower of their obligations hereunder, (iv) the
receipt of the documents specified in Section 3 hereof, and (v) the following additional conditions
precedent:
(a) Except as may have been agreed to by the Purchasers, at the Closing Date, the Indenture,
the Loan Agreement, the Note, the Mortgage and the Tax Regulatory Agreement, and all official action of
the Issuer or the Borrower relating thereto shall be in full force and effect and shall not have been
amended, modified or supplemented, and the Official Statement shall not have been amended or
supplemented.
(b) The Issuer shall have received the approving opinion of Moyle Flanigan Katz Fitzgerald
& Sheehan, Paln~' Beach, Florida, Bond Counsel, substantially in the form attached to the Official
Statement as Exhibit D, dated the Closing Date and addressed to, or with a reliance letter to, the
Purchasers and the Borrower, a supplemental opinion of Bond Counsel dated the Closing Date and
addressed to the Purchasers and the Borrower substantially in the form of Exhibit A hereto.
(c) The Purchasers shall have received a certificate of the Issuer, dated the Closing Date and
signed on behalf of the Issuer, substantially in the form of Exhibit B hereto.
(d) The Purchasers and the Issuer shall have received written evidence that Standard &
Poor's Ratings Group has issued a rating of"A" on the Bonds and the documents delivered at the Closing
Date shall satisfy the conditions to the continuance of such rating; and as of the Closing Date, the rating
shall not have been suspended or withdrawn.
(e) The Purchasers and the Issuer shall have received (i) a certificate dated the Closing Date
and signed by an authorized officer of the Borrower substantially in the form of Exhibit C hereto and (ii)
the opinion of co-counsel to the Borrower substantially in the form of Exhibit D hereto.
(f) The Purchasers shall have received opinions of Purchasers co-counsel, dated the Closing
Date and addressed to the Purchasers to the effect that the Bonds are not subject to the registration
requirements of the Securities Act of 1933, as amended, and the Indenture is not subject to the
qualification requirements of the Trust Indenture Act of 1939, as amended.
(g) At the Closing Date, the Trustee shall receive in immediately available funds the amount -
set forth in Schedule II hereof for deposit in the Cost of Issuance Fund under the Indenture.
(h) The Purchasers and the Issuer shall have received an opinion of counsel to the Trustee in
form and substance satisfactory to them.
(i) The Purchasers shall have received an opinion of Josias, Goren, Cherof, Doody & Ezrol,
P.A., counsel to the Issuer substantially in the form of Exhibit E hereto.
(j) The Issuer shall have received a Disclosure Certificate from each Co-Underwriter in
substantially the form attached hereto as Exhibit F duly executed by an authorized representative of the
respective Underwriter.
(k) The Issuer and the Purchasers shall have received a certificate from the Bond Insurer
substantially in the form of Exhibit __ hereto.
(1) The Issuer and the Purchasers shall have received an opinion of counsel to the Bond
Insurer substantially in the form of Exhibit __ hereto.
(m) The Purchasers shall have received such additional legal opinions, certificates,
proceedings, instruments and other documents as the Purchasers or Bond Counsel may reasonably
request.
All the opinions, letters, certificates, instruments and other documents mentioned above or
elsewhere in this Bond Purchase Agreement shall be deemed to be in compliance with the provisions
hereof if, but only if, they are in form and substance satisfactory to the Purchasers.
9. Termination. The Purchasers may terminate their obligations hereunder by written notice to
the Issuer and the' Borrower if, at any time subsequent to the date hereof and at or prior to the Closing
Date:
(a) (i) Legislation shall have been enacted by the Congress, or recommended to the Congress
for passage by the President of the United States or the U.S. Department of the Treasury or the Internal
Revenue Service or any member of the United States Congress, or favorably reported for passage to either
House of the Congress by any Committee of such House to which such legislation has been referred for
consideration, or (ii) a decision shall have been rendered by a court established under Article III of the
Constitution of the United States, or the United States Tax Court, or (iii) an order, ruling, regulation or
communication (including a press release) shall have been issued by the Department of the Treasury of
the United States or the Internal Revenue Service, in each case referred to in clauses (i), (ii) and (iii), with
the purpose or effect, and reasonable likelihood, directly or indirectly, of imposing federal income
taxation upon interest to be received by any holders of the Bonds.
(b) Legislation shall have been enacted or any action taken by the Securities and Exchange
Commission which, in the reasonable opinion of counsel to the Purchasers, has the effect of requiring the
offer or sale of the Bonds to be registered under the Securities Act of 1933 or the Indenture to be qualified
as an indenture under the Trust Indenture Act of 1939 or any event shall have occurred which, in their
reasonable judgment, makes untrue or incorrect in any material respect any' statement or information
contained in the Official Statement or which, in their reasonable judgment, should be reflected therein in
order to make the statements contained therein not misleading in any material respect.
(e) (i) In the Purchasers' reasonable judgment, the market price of the Bonds is adversely
affected because: (a) additional material restrictions not in force as of the date hereof shall have been
imposed upon trading in securities generally by any governmental authority or by any national securities
exchange; (b) the New York Stock Exchange or other national securities exchange, or any governmental
authority, shall impose, as to the Bonds or similar obligations, any material restrictions not now in force,
or increase materially those now in force, with respect to the extension of credit by, or the charge to the
net capital requirements of, underwriters; (e) a general banking moratorium shall have been established
by Federal, New York or Florida authorities; or (d) a war involving the United States of America shall
have been declared, or any other national or international calamity shall have occurred, or any conflict
involving the armed forces of the United States of America shall have escalated to such a magnitude as to
materially affect the Purchasers' ability to market the Bonds; (ii) any litigation shall be instituted, pending
or threatened to restrain or enjoin the issuance or sale of the Bonds or in any way contesting or affecting
any authority or security for or the validity of the Bonds, or the existence or powers of the Issuer; or (iii)
legislation shall have been introduced in or enacted by the Legislature of the State with the purpose or
effect, directly or indirectly, of imposing Florida income taxation upon interest to be received by any
holders of the Bonds, or (iv) any action has been taken by any agency of the United States Government
with the purpose or effect, directly or indirectly, of imposing federal income taxation upon interest to be
received by any holders of the Bonds or which would, in the Purchasers' reasonable judgment, adversely
affect the security for the Bonds.
(d) there shall have occurred any change which, in the reasonable judgment of the
Purchasers, makes unreasonable or unreliable any of the assumptions upon which (i) yield for purposes of
Section 103 of the Code, (ii) payment of debt service on the Bonds or (iii) the basis for the exemption of
interest on the Bonds from federal income taxation, is predicated.
8
10. Indemnification.
(a) In addition to the provisions of Section 5.3 of the Loan Agreement, the Borrower agrees
to indemnify and hold harmless the Issuer against any and all losses, damages, expenses (including
reasonable legal and other fees and expenses), liabilities or claims (or actions in respect thereof), joint or
several, to which the Issuer or the persons described below in this subsection (a) may become actually
liable to third parties under federal or state securities laws or any other statutory law or at common law or
otherwise, arising out of or based upon or in any way relating to any untrue statement or misleading
statement or alleged untrue statement or alleged misleading statement or a material fact contained in the
Preliminary Official Statement or the Official Statement for the Bonds other than under the captions
"THE ISSUER" and "NO LITIGATION - the Issuer" (the "Issuer Sections") or caused by any omission
or alleged omission from the Preliminary Official Statement (other than the Issuer Sections) or the
Official Statement for the Bonds (other than the Issuer Sections) of any material fact necessary to be
stated therein in order to make the statement made therein, in light of the circumstances under which they
were made, not misleading. The indemnity provided under this subsection (a) to the Issuer shall extend
upon the same terms and condition to each officer, commissioner or employee of the Issuer and each
person, if any who controls the Issuer, within the meaning of Section 15 of the Securities Act of 1933, as
amended, (the "1933 Act") or Section 20 of the Securities Exchange Act of 1934, as amended (the "1934
Act"). Such indemnity shall also extend, without limitation, to any and all expenses whatsoever
reasonably and actually incurred by any indemnified party to third parties in connection with
investigating, preparing for or defending against, or provided evidence, producing documents or taking
any other reasonable action in respect of any such loss, damage, expense, liability or claim (or action in
respect thereof), whether or not resulting in any liability, and shall include any loss to the extent of the
aggregate amount paid in settlement of any litigation, commenced or threatened, or of any claim
whatsoever as set forth herein, provided, however, only if such settlement is effected with the written
consent of the Borrower.
(b) The Borrower agrees to indemnify and hold harmless the Purchasers against any and all
losses, damages, expenses (including reasonable legal and other fees and expenses), liabilities or claims
(or actions in respect thereof), joint or several, to which the Purchasers or the persons described in this
subsection (b) may become actually liable to third parties under federal or state securities laws or any
other statutory law or at common law or otherwise, arising out of or based upon or in any way relating to
any untrue statement or misleading statement or alleged untrue statement or alleged misleading statement
of a material fact contained in the Preliminary Official Statement or the Official Statement for the Bonds
under the captions "THE BORROWER AND THE PROJECT," ''NO LITIGATION - The Borrower"
and "APPENDIX A - Description of the Project" and the actual financial and operational information
contained in APPENDIX B - PRO FORMA FINANCIAL PROJECTIONS (the "Borrower Disclosure")
or caused by any omission or alleged omission from the Borrower Disclosure in the Preliminary Official
Statement or the Borrower Disclosure in the Official Statement for the Bonds of any material fact
necessary to be stated therein in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. The indemnity provided under this subsection (b) shall
extend upon the same terms and conditions to each officer, commissioner or employee of the Purchasers,
and each person, if any, who controls the Purchasers, within the meaning of Section 15 of the Securities
Act of 1933, as amended, (the "1933 Act") or Section 20 of the Securities Exchange Act of 1934, as
amended (the "1934 Act"). Such indemnity shall also extend, without limitation, to any and all expenses
whatsoever reasonably and actually incurred by any indemnified party to third parties in connection with
investigating, preparing for or defending against, or providing evidence, producing documents or taking
any other reasonable action in respect of, any such loss, damage, expense, liability or claim (or action in
respect thereof), whether or not resulting in any liability, and shall include any loss to the extent of the
aggregate amount paid in settlement of any litigation, commenced or threatened, or of any claim
9
whatsoever as set forth herein; provided, however, only if such settlement is effected with the written
consent of the Borrower.
(c) Within a reasonable time after an party indemnified under paragraphs (a) and (b) of this
Section 10 shall have been served with the summons or other first legal process or shall have received
written notice of the threat of a claim in respect of which an indemnity may be claimed, such indemnified
party shall, if a claim for indemnity in respect thereof is to be made against the Borrower under this
Section 10, notify the Borrower in writing of the commencement thereof; but the omission so to notify the
Borrower shall not relieve the Borrower from any liability that it may have to any indemnified party other
than pursuant to paragraphs (a) and (b) of this Section 10. The Borrower shall be entitled to participate at
its own expense in the defense, and if the Borrower so elects within a reasonable time after receipt of such
notice, or all indemnified parties seeking indemnification in such notice so direct, the Borrower shall
assume the defense of any suit brought to enforce any such claim, and such defense shall be conducted by
counsel chosen promptly by the Borrower and reasonably satisfactory to the indemnified party; provided,
however, that if the defendants in any such action include such an indemnified party and any such
indemnified party shall have been advised by its counsel that there exists conflicting interest between the
Borrower or another defendant indemnified party, and which in the reasonable opinion of such counsel
are sufficient to make it undesirable for the same counsel to represent such indemnified party and the
Borrower and/or another defendant indemnified party, such indemnified party shall have the right to
employ not more than one separate counsel in such action (and the Borrower shall not be entitled to
assume the defense thereof on behalf of such indemnified party), and in such event the reasonable fees
and expenses of such counsel shall be borne by the Borrower. Nothing contained in this paragraph (c)
shall preclude any indemnified party, at its own expense, from retaining additional counsel to represent
such party in any action with respect to which indemnity may be sought hereunder.
(d) The indemnity provided by this Section 10 hereof shall be in addition to any other
liability that the Borrower may otherwise have hereunder, at common law or otherwise, and is provided
solely for the benefit of the Issuer and the Purchasers, as applicable, each commissioner, officer,
employee and controlling person referred to therein, and their respective successors, assigns and legal
representatives, and no other person shall acquire or have any right under or by virtue of such provisions
of this Bond Purchase Agreement.
11. Expenses.
(a) The Borrower shall cause to be paid all costs of issuance incurred in connection with the
issuance of the Bonds, which are set forth on Schedule II hereto.
(b) The Borrower shall pay its own expenses, including the fees and expenses of its counsel,
except as otherwise provided on Schedule II hereto.
(c) The Purchasers shall pay all advertising expenses incurred in connection with the public
offering of the Bonds.
The Issuer shall not be responsible for the payment of any expenses relating to the issuance, sale
and delivery of the Bonds.
12. Truth in Bonding. The Issuer is proposing to issue $ of debt for the purpose of
refinancing certain debt of the Borrower relating to the Project. This debt is expected to be repaid over a
period of years. The Bonds are being issued at a tree interest cost of % and the total
interest to be paid from the Closing Date to 1, ~ 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
10
Indenture). The source of repayment for this issue will be the payments on the Promissory Note assigned
to the Trustee, to~'ether with the Mortgage, to secure the Bonds under the Indenture. The Issuer
represents that 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 communication to be given to the Issuer under this Bond
Purchase Agreement may be given by delivering the same in writing to the Borrower or the Issuer at their
addresses set forth above, and any notice or other communication to be given to the Purchasers under this
Bond Purchase Agreement may be given by delivering the same in writing to RBC Dain Rauscher Inc.
and Bear, Steams & Co. Inc., c/o RBC Dain Rauscher Inc., Three Times Square, 24th Floor, New York,
NY 10036; Attention: Bob Spangler.
14. Successors. This Bond Purchase Agreement is made solely for the benefit of the Issuer, the
Purchasers and the Borrower (including their successors or assigns) and no other person shall acquire or
have any fight hereunder or by virtue hereof. The representations, warranties, and agreements contained
herein shall remain operative and in full force and effect and shall survive delivery of and payment for the
Bonds hereunder, regardless of any investigation made by or on behalf of the Purchasers.
15. Governing 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
counterparts, each of which shall be deemed to be one and the same document.
11
17. Effectiyeness. This Bond Purchase Agreement shall become effective upon the execution of
the acceptance hereof by the Issuer and the Borrower.
Very truly yours,
The foregoing is confirmed and accepted as of the date first above written.
CITY OF BOYNTON BEACH, FLORIDA
By:
Title: Mayor
C/HP COVE, INC.
By:
Title:
SCHEDULE I
MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES
Maturity Date,
July 1, 2022
July 1, 2027
July 1, 2032
Principal Amount Interest Rate
$
SCHEDULE H
ESTIMATED COSTS OF ISSUANCE
Issuer's Fee
Fees and Expenses of Bond Counsel
Underwriters' Fee
Fees and Expenses of Underwriters' Counsel
Truste¢'s Set Up Fee
Escrow Trustee's Fee
Trustee's Counsel Fees and Expenses
Printing
Borrower's Counsel Fees and Expenses
Bond Insurance Premium
Bond Insurer's Counsel Fees and Expenses
SCI-W~DULE IH
DISCLOSURE LETTER
December __, 2002
City of Boynton Beach, Florida
100 East Boynton Beach Boulevard
P.O. Box 310i
Boynton Beach, Florida 33425
Ladies and Gentlemen:
In reference to the issuance of its Multifamily Housing Mortgage Revenue Bonds, Series 2002
(Clipper Cove Apartments) (the "Bonds"), RBC Dain Rauscher Inc. (the "Underwriter"), pursuant to the
Bond Purchase Agreement (the "Purchase Contract") dated December __, 2002 between the Underwriter,
the Issuer and C/HP Cove, Inc., ("the Borrower") hereby makes the following disclosures to the Issuer:
1. The Underwriter is acting as underwriter to the Issuer for the public offering of the
Bonds. The total fee to be Paid to the Underwriter pursuant to the Purchase Contract is equal to
approximately % of the total face amount of the Bonds, or $ *
2. The estimated expenses to be incurred by the Underwriter and to be charged to the Issuer
in eonnectien with the issuance of the Bonds are:
Clearance/DTC/CUSIP
Travel, Communications, Phone, Dalnet
Other
Total
3. The names, addresses and estimated amounts of compensation of any person who is not
regularly employed by, or not a partner or officer of, an underwriter, bank, banker or financial consultant
or advisor and who enters into an understanding with either the Issuer or the Underwriter, for any paid or
promised compensation or valuable consideration, directly or indirectly, expressly or implied, to act
solely as an intermediary between the Issuer and the Underwriter or who exercises or attempts to exercise
any influence to effect any transaction in the purchase &the Bonds are:
None
4. The amount of the underwriting risk and takedown expected to be realized is:
Underwriting Risk
Takedown/Concession
5. The amount of the management fee to be charged by the Underwriter is:
$ or $ per Bond.
* Paid by Borrower from equity funds.
** Included in management fee.
6. Any. other fee, bonus, and other compensation estimated to be paid by the Underwriter in
connection with the Bonds to any person not regularly employed or retained by the Underwriter is as
follows:
Fee and Expenses
None
7. The name and address of the Underwriter connected with the Bonds is:
RBC Dain Rauscher Inc.
Three Times Square, 24th Floor
New York, NY 10036-6567
RBC DAIN RAUSCHER INC.
By:
Managing Director
BEAR, STEARNS & CO. INC.
By:
Managing Director
EXHIBIT A
SUPPLEME~ LEGAL OPINIONS OF BOND COUNSEL
(Closing Date)
RBC Dain Rauscher Inc.
Bear, Stearns & Co. Inc.
c/o RBC Dain Rauseher Inc.
Three Times Square, 24th Floor
New York, NY 10036-6567
C/I-IP Cove, Inc.
4016 Broadway Avenue
West Palm Beach, FL 33407
$
CITY OF BOYNTON BEACH, FLORIDA
Multi-Family Housing Mortgage Revenue Refunding Bonds, Series 2002
(Clipper Cove Apartments)
Ladies and Gentlemen:
We have acted as Bond Counsel in connection with the issuance by the City of Boynton Beach,
Florida (the "Issuer") of the captioned Bonds (the "Bonds").
We have examined the law and such certified proceedings and other papers as we have deemed
necessary to render this opinion.
Unless the context clearly indicates otherwise, each capitalized term used in this opinion shall
have the same meaning as set forth in the Master Trust Indenture dated as of December 1, 2002 between
the Borrower and the Bank, the Indenture of Trust dated as of December 1, 2002 by and between the
Issuer and The Bank of New York Trust Company of Florida, N.A., as Trustee.
We refer you to the Bonds and to the Indenture for a description of the purposes for which the
Bonds are issued, the security for the Bonds, the manner in which and times at which the principal of and
premium (if any) and interest on the Bonds are payable, the interest rate or rates payable on the Bonds,
the provisions under which the Bonds may be pumhased or redeemed prior to their stated maturity, and all
other details of the Bonds.
As to questions of fact material to this opinion, without undertaking to verify the same by
independent investigation, we have relied upon representations of the Borrower and the Issuer in the
Financing Documents, the certified proee, edings of the Issuer, certifications by public officials, and
certifications by the partners, employees and representatives of the Borrower (including, without
limitation, certifications as to the nature and use of the Project and the use of the proceeds of the Bonds).
We have assumed the accuracy and truthfulness of all public records and of all certifications,
documents and other proceedings examined by us that have been executed or certified by public officials
acting within the scope of their official capacities, and we have not independently verified the accuracy or
truthfulness there,. We have also assumed the genuineness of the signatures appearing upon such public
records, certifications, documents and proceedings.
Further, we have assumed the authenticity of all documents submitted to us as originals, the
genuineness of all signatures, the conformity to original documents of all documents submitted to us as
certified or photostatic copies and the authenticity of the originals of such latter documents.
We do not express any opinion herein concerning any law other than the law of the State of
Florida and the federal law of the United States of America.
We have not examined, and express no opinion as to, the 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 any lien upon, assignment 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
the Borrower 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
the date hereof, that:
(a) The Issuer has full legal fight, power and authority to execute and deliver the Indenture,
to authorize and issue the Bonds and to carry out the transactions contemplated by the Indenture and the
Bonds; and the Indenture, the Loan Agreement, the Restrictive Covenants, the Bond Purchase Agreement
and the Bonds (collectively, the "Issuer Documents") have been duly and validly authorized, executed
and delivered by the Issuer, are in full force and effect and, assuming the due authorization, execution and
delivery by the other parties thereto, constitute the valid, legal and binding obligations of the Issuer and,
subject to paragraph 3 below, are enforceable in accordance with their respective terms.
(b) The Bonds are not required to be registered under the Securities Act of 1933, as
amended, and the Indenture is not required to be qualified under the Trust Indenture Act of 1939, as
amended.
(c) The right of any holder of the Bonds and the enforceability of the Bonds and the other
Issuer Documents are subject to: (a) the exercise and judicial discretion including judicial limitations on
rights to specific performance; (b) the valid exercise of the constitutional powers of the United States of
America and of the sovereign police and taxing powers of state or other governmental units having
jurisdiction; and (c) bankruptcy, insolvency, reorganization, moratorium or other similar laws heretofore
or hereafter in effect affecting creditors' rights, to the extent constitutionally applicable. Enforceability of
the provisions contained in the Bond Purchase Agreement and the other Issuer Documents pertaining to
indemnification may also be limited by applicable securities laws and public policy.
(d) The statements contained in the Official Statement under the captions "THE SERIES
2002 BONDS", "SECURITY FOR THE SERIES 2002 BONDS, .... THE INDENTURE", "THE LOAN
AGREEMENT", "THE NOTE AND THE MORTGAGE," THE RESTRICTIVE COVENANTS," "TAX
TREATMENT OF THE SERIES 2002 BONDS," APPENDIX C -"SUMMARY OF ADDITIONAL
SELECTED PROVISIONS OF THE INDENTURE AND LOAN AGREEMENT," and APPENDIX D-
"PROPOSED FORM OF OPINION OF BOND COUNSEL," insofar as such statements purport to
summarize the Act, the Indenture, the Bonds, the Loan Agreement, the Mortgage Note and Mortgage, the
Restrictive Covenants imposed on the Project and the income taxation of interest on the Bonds, fairly
summarizes the legal matters referred to therein.
This opinion is furnished by us to meet certain requirements of paragraph 8(b) of the Bond
Purchase Agreement. No one other than the addressees may rely upon this opinion.
Very truly yours,
EXHIBIT B
CLOSING CERTIFICATE OF THE ISSUER
$
CITY OF BOYNTON BEACH, FLORIDA
Multi-Family Housing Mortgage Revenue Refunding Bonds, Series 2002
(Clipper Cove Apartments)
ISSUER'S GENERAL CERTIFICATE
This Certificate is being executed and delivered in connection with the issuance and sale of the
$ principal amount of its Multi-Family Housing Mortgage Revenue Refunding Bonds, Series
2002 (Clipper Cove Apartments) (the "Tax Exempt Bonds" or the "Bonds"). Each capitalized term used
herein and def'med in the Indenture of Trust dated as of December 1, 2002 between the City of Boynton
Beach, Florida (the "Issuer") and The Bank of New York Trust Company of Florida, N.A. (the
"Trustee"), which is being entered into in connection with the issuance of the Bonds (the "Indenture")
shall have the meaning set forth therein, unless the context clearly indicates otherwise.
We the City of Boynton Beach, Florida, hereby respectfully certify as to the matters set forth in
all of the following paragraphs, except as otherwise provided for herein:
(a) is the duly elected, qualified and acting of the City of
Boynton Beach, Florida (the "Issuer"), and the signature set forth in the space indicated for his name
below is his tree and genuine signature.
(b) The Issuer is a political subdivision and municipality of the State of Florida.
(e) The proper and correct corporate name of the Issuer is "City of Boynton Beach, Florida."
(d) The person hereinbefore named has not held or exercised any office or place of trust or
profit under the United States of America, or any deparh~ent thereof, or under the State of Florida, or
under any other state government (except the respective office to which he or she was elected or
appointed as hereinabove stated) 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 office.
(e) The Issuer's seal, an impression of which appears below, is the adopted, proper and only
official seal of the Issuer.
(f) Attached hereto as Attachment A is a true, correct and complete copy of Resolution No.
., adopted by the City Commission of the City of Boynton Beach, Florida (the "Board") at a regular
meeting duly called and held on __, 2002 (the "Bond Resolution"). A proper quorum was
present throughout such meeting and the Bond Resolution was duly proposed, considered and adopted in
conformity with all applicable requirements, and a!l other requirements and proceedings (including any
and all required postings and publications) incident to the proper adoption and effectiveness of the Bond
Resolution have been duly fulfilled, carried out and otherwise observed. The Bond Resolution has not
been amended, repealed or rescinded since its original adoption and is in full force and effect on the date
of this Certificate.
(g) A public heating with respect to the Bonds and the location and nature of the Project
(hereinafter defined) was held on .._, 2002. The time and location of the public hearing provided
a reasonable opportunity for persons of differing views to appear and be heard, and a reasonable
opportunity to be l~ard was afforded to all persons present at the heating. The heating was conducted in
the presence of the Board. Attached hereto as Exhibit B is a copy of the certificates of publication of the
notice of the public hearing with respect to the Bond Resolution, which notice was published in the
Journal on ~ and ~ .__, 2002. Such newspaper is a newspaper of general
circulation available to residents of Such notice of public hearing was given in the same
manner and in the same locations as required of the Issuer for other purposes for which applicable State or
local law specifies a notice of public hearing requirement (including laws relating to notice of public
hearings of Palm Beach County).
(h) The certifies that he has received no notice of any litigation, nor, to the
best of his knowledge, is there any litigation threatened against the Issuer, (a) contesting the creation,
organization or corporate existence or the boundaries of the Issuer or the entitlement of the present
officers of the Issuer to their respective offices, (b) wherein an unfavorable decision, ruling or finding
would materially adversely affect the transactions contemplated by the Bond Purchase Agreement and by
the Official Statement relating to the Bonds (the "Official Statement"), (c) which in any way would
adversely affect the validity or enforceability of the Bond Resolution, or any of the documents executed
and delivered in connection with the issuance of the Bonds to which the Issuer is a party, (d) restraining
or enjoining the issuance, sale, execution or delivery of the Bonds, the collection of the revenues and
receipts of the Issuer pledged or to be pledged to the Trustee to pay the principal of and interest on the
Bonds, or the pledge thereof, (e) affecting the Issuer which calls into question or affects the validity or
enforceability of the Bonds, the proceedings and authority under which the Bonds are authorized to be
issued, sold, and delivered, or any documents executed by and on behalf of the Issuer pursuant to the
Bond Resolution, or the performance by the Issuer of its obligations under such documents, or (f)
affecting the tax status of the Issuer or the Bonds and the interest to be paid thereon.
(i) The certifies that each of the documents in connection with the Bonds to
which the Issuer is a party, the compliance with the terms and conditions thereof and the consummation
of the transactions therein and in the Official Statement contemplated to be performed by the Issuer, do
not and will not (i) to the best of his knowledge, violate any law or any regulation, order, injunction or
decree of any court, governmental body, agency or other public instrumentality to which the Issuer is
subject, or (ii) result in a conflict 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 properties or assets of
the Issuer pursuant to the terms of, any indenture, mortgage, agreement or other instrument to which the
Issuer is a party or by which the Issuer or any of its properties is bound and of which we have knowledge.
No approval of, notice to, registration or filing with or other action by any governmental authority or
agency is required in connection with the execution or performance of any of such documents by the
Issuer, except such as may be required under applicable "blue sky" or securities laws in connection with
the offering and sale of the Bonds by the Purchasers. No authority or proceedings for the issuance and
sale of the Bonds have been repealed, revoked or rescinded.
(j) , as , has officially caused the Bonds to be executed in the
name of the Issuer by his manual or facsimile ~;~,,o,,,r,, (mad if by facsimile, which facsimile signature he
does by these presents adopt as and for his own) and an impression or facsimile of the official seal of the
Issuer to be impressed or otherwise reproduced thereon, and attested by the manual or facsimile signature
of , as (and if by facsimile, which facsimile signature he does by these
presents adopt as and for his own).
(k) The specimen of the Bond attached hereto as Exhibit C is a true and genuine specimen of
such Bond.
Bo2
(1) The Indenture, the Loan Agreement, the Bond Purchase Agreement, the Official
Statement, and the 'Tax Regulatory Agreement have been executed in the name of the Issuer and on its
behalf by J as , by his manual signature, and the financing statement
required to be executed and delivered by the Issuer has also been executed in the name of the Issuer and
on its behalf by ., as ~ by his manual signature.
(m) The corporate seal of the Issuer has been impressed on the Indenture, the Loan
Agreement and the Tax Regulatory Agreement and attested by ..~ as , by his
manual signature. The Indenture, the Loan Agreement, the Bond Purchase Agreement, the Official
Statement and the Tax Regulatory Agreement, together with all closing certificates and financing
statements, are herein sometimes collectively called the "Bond Documents."
(n) On the date of delivery of the Bond Documents, which is also the date of this Certificate,
we are the duly chosen, qualified, and acting officers indicated on the Bond Documents, and on this
Certificate, and are duly authorized to cause the Bond Documents to be executed as recited above and to
effect all other transactions contemplated by the Bond Documents.
(o) Neither the Bond Resolution nor any other proceeding of the Issuer (a) authorizing the
issuance and sale of the Bonds, (b) approving the Bond Documents, or (c) authorizing the execution and
delivery (where applicable) of the Bond Documents on behalf of the Issuer have been rescinded or
repealed or modified and amended in any respect, and the Bond Resolution and such other proceedings
are in full force and effect on the date hereof.
(p) The certifies that, as of the date of this Certificate to the best of his
knowledge, the Issuer has the power and lawful authority to issue the Bonds, to execute and deliver the
Bond Documents and all requirements and conditions specified in the Act, and all other laws and
reg~Jlations applicable to the adoption of the Bond Resolution and (where applicable) the Bond
Documents have been fulfilled.
(q) To the best of our knowledge, no event which (with or without notice or lapse of time or
both) would constitute an Event of Default with respect to the Issuer under any of the Bond Documents
has occurred and is continuing as of the date hereof. The Issuer will not take any action or omit to take
any action requested by the Trustee to be taken, which action or omission will in any way cause the
proceeds from the sale of the Bonds to be applied in a manner other than as provided in the Official
Statement and the Indenture.
(r) Each and all of the representations and warranties made by the Issuer in the Bond
Documents in connection with the sale of the Bonds are tree and correct on the date hereof as if the same
were made on the date hereof.
(s) The information in the Preliminary Official Statement and the Official Statement under
the captions "THE ISSUER, .... CONTINUING DISCLOSLIRE," and "NO LITIGATION" (insofar as
such information related to the Issuer), does not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. The Issuer makes no representations
concerning the information in any other section of the Preliminary Official Statement or of the Official
Statement or in the appendices thereto, except that, to the knowledge of the Issuer, neither such other
sections or the appendices make an untrue statement of a material fact or omit to state a fact necessary in
order to make the statements made in such other sections and appendices, in light of the circumstances
under which they were made, not misleading.
B-3
(t) , whose true and genuine signature appears below, is hereby
authorized to take all actions and to do all things on behalf of the Issuer which are required or permitted
under the terms of the Bond Documents.
(u) The Issuer is not now in default, nor has the Issuer been in default at any time since
December 31, 1975 as to principal or interest with respect to any obligations issued by the Issuer or
successor to the Issuer.
(v) Pursuant to and in accordance with the Loan Agreement, the proceeds of the Bonds are to
be loaned to the Borrower in order to refinance a portion of the costs of the acquisition and construction
by the Borrower of a multifamily housing project and facilities functionally related and subordinate
thereto located in the City of Boynton Beach, Florida (the "Project").
(w) In his capacity as the duly elected, qualified and acting of the City of
Boynton Beach, Florida, hereby approves the Bonds and the Project.
WITNESS our official signatures in execution of this Issuer's General Certificate, and the seal of
the Issuer, all as of this ~ day of December, 2002.
[ISSUER'S SEAL]
EXHIBIT A - Bond Resolution
EXHIBIT B - Notices of Publication
EXHIBIT C - Specimen Bond
Name:
Title:
B-4
EXttIBIT C
CLOSING CERTIFICATE OF BORROWER
The undersigned C/HP Cove, Inc. (the "Borrower"), by , hereby certifies,
represents and warrants to the Issuer and the Underwriters named in the Official Statement described
below, as follows:
(a) To the best of our knowledge, the representations and warranties of the Borrower
contained in the Bond Purchase Agreement among the Borrower, the City of Boynton Beach, Florida (the
"Issuer") and the Underwriters named in the Official Statement referred to below (the "Bond Purchase
Agreement") are tree and correct in all material respects.
(b) To the best of our knowledge, the Borrower has materially complied with all agreements
and satisfied all material conditions contained in the Bond Purchase Agreement for the Bonds (as defined
below) on its part to be performed or satisfied prior to the date hereof.
(c) To the best of our knowledge, there has not been any material adverse change in the
financial position or which affects the operation of the Borrower or the Clipper Cove Apartments in its
businesses or any material adverse change affecting the housing project in the City of Boynton Beach,
Florida known as the Clipper Cove Apartments (the "Project") which would impair the ability of the
Borrower to operate the Project as contemplated by the Loan Agreement between the Borrower and the
Issuer relating to the issuance by the Issuer of its $~ principal amount of its Multi-Family Housing
Mortgage Revenue Refunding Bonds, Series 2002 (Clipper Cove Apartments) (the "Tax Exempt Bonds"
or the "Bonds").
(d) The information relating to the Project, the Borrower[, Housing Partnership, Cornerstone
and Property Asset Management of Florida, Ine.] in the Preliminary Official Statement and the Official
Statement does not make any untrue statement of a material fact or omit to state a material fact with
respect to the Project, the Borrower[, Housing Parmership, Cornerstone or Property Asset Management of
Florida, Inc.] necessary in order to make the statements made with respect thereto, in the light of the
circumstances under which they were made, not misleading.
(e) To the best of our knowledge, there is no action, suit, proceeding, inquiry or
investigation, at law or in equity, or before or by any court, public board or body pending or, to the best of
our knowledge, threatened against or affecting the Borrower, nor, to the best of our knowledge, is there
any basis therefor, wherein an unfavorable decision, ruling or finding would, in any way, adversely affect
the transactions contemplated by the Loan Agreement or which, in any way, would adversely affect the
development, construction or operation of any of the Project or which might result in any material adverse
change in the business, operations, properties, assets, liabilities or condition (financial or other) of the
Borrower or which affects the information concerning the Borrower or the Project (insofar as such
information pertains to the Borrower or the Project) contained in the Official Statement.
(f) The Preliminary Official Statement was deemed final by the Borrower for purposes of
Rule 15c2-12 under the Securities Exchange Act of 1934, as amended, and such Preliminary Official
Statement was delivered to the Underwriters for the above-referenced Bonds prior to the purchase thereof
by the purchaser.
(g) The Borrower (i) is a nonprofit corporation duly formed and existing under the laws of
the State of Florida and it is duly authorized to execute and deliver the Loan Agreement, the Restrictive
Covenants, the Note and the Mortgage (each as defined in the Loan Agreement) and the Loan Documents,
and (ii) the owner.ship and operation 'of the Project will not violate its Articles of Incorporation or By-
Laws.
(h) The Borrower has duly executed and delivered that certain Loan Agreement dated as of
December I, 2002 (the "Loan Agreement"), among the Borrower and the Issuer, and that certain
Declaration of Restrictive Covenants as of December 1, 2002 (the "Tax Regulatory Agreement"), among
the Issuer, the Borrower and The Bank of New York Trust Company of Florida, N.A., as Trustee; the
Bond Purchase Agreement; the Continuing Disclosure Agreement dated as of December 1, 2002 between
the Borrower, the Trustee and the Dissemination Agent named therein (the "Disclosure Agreement"); the
Note and the Mortgage (as defined in the Indenture); the Certificate dated the date
hereof (the "Tax Certificate"); and the execution and delivery of the Loan Agreement, the Tax Regulatory
Agreement, the Bond Purchase Agreement, the Tax Certificate and the Note and Mortgage and the
performance by the Borrower of its obligations thereunder will not constitute a breach of or default by the
Borrower under its articles of incorporation or by-laws or the terms and provisions of any agreement or
commitment to which the Borrower is presently a party or by which the Borrower is presently bound.
IN WITNESS WHEREOF, the undersigned have signed this certificate as of December.._, 2002.
C/HP COVE, INC.
By:
Title:
C-2
EXHIBIT D
OPINION OF COUNSEL TO BORROWER
[Form of opinion to come]
EXHIBIT "E"
FIRST AMENDMENT TO RESTRICTIVE COVENANTS
G:X02345~33\bond reso(l ).wpd
EXHIBIT E
OPINION OF COUNSEL TO ISSUER
December ._, 2002
City of Boynton Beach, Florida
C/HP Cove, Inc.
c/o Cornerstone Housing Corporation
1350 Beverly Road, Suite 200
McLean, Virginia 22102-3634
Moyle, Flanigan, Katz, Fitzgerald
& Sheehan, P.A.
West Palm Beach, Florida
The Bank of New York
c/o The Bank of New York Trust Company
of Florida, N.A.
Jacksonville, Florida
RBC Dain Rauscher Inc.
Bear, Stearns & Co. Inc.
c/o RBC Dain Rauscher Inc.
New York, New York
$
CITY OF BOYNTON BEACH, FLORIDA
Multi-Family Housing Mortgage Revenue Refunding Bonds, Series 2002
(Clipper Cove Apartments)
Ladies and Gentlemen:
I have acted as counsel to the City of Boynton Beach, Florida (the "Issuer") in connection with
the issuance and sale by the Issuer of its $ principal amount of its Multi-Family Housing Mortgage
Revenue Refunding Bonds, Series 2002 (Clipper Cove Apartments) (the "Tax Exempt Bonds" or the
"Bonds"). The Bonds are being issued for the purpose of assisting in refinancing the its multifamily
rental project located in the City of Boynton Beach, Florida, and known as Clipper Cove Apathnents (the
"Project"). All capitalized terms used herein and not otherwise defined shall have the meaning as set
forth in the Loan Agreement dated as of December 1, 2002, by and between the Issuer and the Borrower.
In connection with my opinion I have reviewed, among other things, Article VIII, Section 2 and
Article VII, Section 10(c), of the Florida Constitution, the 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) The resolution of the Issuer adopted on
,2002 (the "Bond Resolution"),
(b) The Bond Documents, and
(c) A .specimen of the Bond.
I have also examined such other documents, certificates, proceedings and matters of law as I have
considered necessary to enable me to render this opinion.
As to questions of fact material to my opinion, I have relied upon representations of the Issuer
contained in the Bond Documents, certifications of public officials furnished to me and certifications by
representatives of the Issuer. I have no reason to believe that such representations and certifications are
incomplete or inaccurate. I have assumed that all signatures on documents and ins~aments examined by
me (other than the signatures of the officers of the Issuer) are genuine, all documents submitted to me as
originals are authentic and all documents submitted to me as copies conform to the originals. In addition,
I have assumed, without independent investigation or verification, the due authorization, execution and
delivery of the documents, instruments and agreements by all parties thereto other than the Issuer. I have
made such independent investigations as I have deemed necessary or appropriate in order to render the
opinions contained herein.
Based on the foregoing, I am of the opinion, as of the date hereof, that:
(a) The Issuer is a political subdivision and a municipality of the State of Florida duly
created and validly existing under the Act and has the requisite authority and power to (i) execute and
deliver the Bond Documents, (ii) issue, sell and deliver the Bonds and (iii) consummate the transactions
contemplated by, and perform its obligations under, the Bonds and each Bond Document.
(b) The Bond Resolution has been duly adopted by the Issuer and is in full fome and effect as
of the date hereof in the form adopted.
(c) The Bonds have been duly authorized, executed, issued and delivered by the Issuer,
constitute valid and binding limited obligations of the Issuer and, subject to paragraph 7 below, are
enforceable against the Issuer in accordance with their terms.
(d) The Bond Documents have been duly authorized, executed and delivered by the Issuer,
are in full force and effect, constitute valid and legally binding obligations and agreements of the Issuer
and, subject to paragraph 7 below, are enforceable against the Issuer in accordance with their respective
terms.
(e) The Issuer's right, title and interest in the Note and the Loan Agreement (except for
certain rights to indemnification, 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 Trust Company of
Florida, N.A., as Trustee and have not been previously assigned by the Issuer, and such assignment
constitutes a valid and binding assignment of the Issuer and, subject to paragraph 7 below, is enforceable
against the Issuer in accordance with its terms.
(f) The City Commissioners of the Issuer identified in the Issuer's general certificate
delivered on the date hereof have been duly appointed and are qualified to serve as such.
(g) The enforceability of the obligations of the Issuer under the Bonds and the Bond
Documents is subject to the provisions of applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting the enforcement of creditors' rights generally now or
hereat~er in effect and subject to usual equity principles that may limit the specific enforcement of certain
remedies but do not affect the validity of such documents. Certain indemnity provisions of the Bond
E-2
Documents may be unenforceable pursuant to court decisions invalidating such indemnity provisions on
grounds of applicable securities laws or public policy.
(h) No additional or further approval, consent or authorization of any governmental or public
agency or authority not already obtained is required by the Issuer in connection with the transactions
contemplated by the Resolution, the Bonds or the Bond Documents; provided, however, that I express no
opinion relating to state or federal securities laws, 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.
(i) The adoption of the Resolution and the execution, delivery and due performance by the
Issuer of the Bonds and the Bond Documents will not violate any resolution of the Issuer or, to the best of
my knowledge, (i) violate any indenture or other agreement or instrument to which the Issuer is a party or
by which it or its properties are or may be bound, (ii) 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 security interest or
encumbrance of any nature whatsoever upon any of the property or assets of the Issuer except as
contemplated by the Bond Documents.
O) There is no action, suit, proceeding or investigation at law or in equity before or by any
court or governmental agency or body pending or, to the best of my knowledge, threatened against the
Issuer, nor to my knowledge is there any basis therefor, wherein an unfavorable decision, ruling or
finding would adversely affect (i) the creation or existence of the Issuer, (ii) the transactions contemplated
by the Resolution and the Bond Documents, (iii) the validity or enforceability of the Bonds or the Bond
Documents or (v) any authority or proceedings relating to the execution and delivery of the Bonds and the
Bond Documents.
My services as counsel to the Issuer have been limited to rendering the foregoing opinion based
upon my review of such legal proceedings as I 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
informatior, concerning the business or financial resources of the Borrower and, therefore, express no
opinion as to the accuracy or completeness of any information that may have been relied upon by the
owners of the Bonds in making their decisions to purchase them.
Very truly yours,
JOSIAS, GOREN, CHEROF, DOODY & EZROL, P.A.
E-3
EXHIBIT F
FORM OF DISCLOSURE CERTIFICATE OF UNDERWRITER
UNDER SECTION 218.385(6), FLORIDA STATUTES
The undersigned, a
follows:
of [Underwriter] (the "Underwriter"), hereby certifies as
(a) An itemized
and
issuance of the Bonds.
list of estimated expenses to be incurred by the Underwriter and
(collectively, the "Underwriting Group") in connection with the
See Schedule I attached.
(b) The names, addresses, and estimated amounts of compensation of any person who
entered into an understanding with either the City of Boynton Beach, Florida (the "Issuer"), the
Underwriter, or both, for any paid or promised compensation or valuable consideration, directly or
indirectly, expressly or implied, to act solely as an intermediary between the Issuer and Underwriter or
who exercises or attempts to exercise any influence to effect any transaction in the purchase of the Bonds:
None.
(c) The amount of underwriting spread expected to be realized by the Underwriting Group is
as follows (columns may not equal totals due to rounding):
Dollar Amount per
Amount $1,000 Principal
Takedown$ $
Management Fees
$$
(d) Any other fee, bonus, and other compensation estimated to be paid by the Underwriter in
connection with the issuance of the Bonds to any person not regularly employed or retained by the
Underwriter:
None.
(e) The name and address of the Underwriter is:
[Insert name and address of Underwriter]
I understand that you do not require any further disclosure from the Underwriter pursuant to
Section 218.3 85(6), Florida Statutes, as amended.
Very truly yours,
By:
Title:
EXHIBIT "D"
ESCROW DEPOSIT AGREEMENT
.. ESCROW DEPOSIT AGREEMENT
THIS ESCROW DEPOSIT AGREEMENT is dated as of December 1, 2002, and is by and
among City of Boynton Beach, Florida (the "Issuer"), a political subdivision of the State of Florida,
C/HP Cove, Inc. CC/HP"), a Florida not-for-profit corporation, and The Bank of New York, aNew
York banking corporation, as Trustee, acting by and through The Bank of New York Trust Company
of Florida, N.A., its agent, (the "Bond Trustee"), a national banking association duly organized and
existing under and by virtue of the laws of the United States of America, as Escrow Agent hereunder
and as Trustee under the Refunded Bond Indenture (hereinafter defined);
WITNESSETH:
WHEREAS, pursuant to an Indenture of Trust and Assignment of Mortgage, dated as of July
1, 1996, between the Issuer and the Bond Trustee (the "Refunded Bond Indenture") the Issuer has
heretofore issued its Multi-Family Housing Mortgage Revenue Bonds, Series 1996 (Clipper Cove
Apartments) in the aggregate principal amount $11,940,000, dated July 1, 1996, of which
$10,945,000 in principal amount remain outstanding (the "Refunded Bonds"); and
WHEREAS, C/HP has determined to provide for defeasance of the Refunded Bonds by
depositing with the Bond Trustee hereunder amounts which shall be sufficient to enable the Bond
Trustee to purchase direct and general obligations of the United States of America (the "Government
Obligations") that do not permit the redemption thereof at the option of the issuer or any person other
than the holder thereof, according to the schedule listed in Exhibit A hereto, in an aggregate principal
amount which, together with interest thereon and cash on deposit hereunder, has been determined
by C/HP to be sufficient to pay all principal of, premium, if any and interest on the Refunded Bonds
as and when the same shall become due and payable according to the provisions hereof, thereof and
of the Refunded Bond Indenture.
NOW, THEREFORE, in consideration of the foregoing and mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Receipt of a tree and correct copy of the Refunded Bond Indenture is hereby
acknowledged by the Bond Trustee, and reference herein to or citation herein of any provision of said
document shall be deemed to incorporate the same as a part hereof in the same manner and with the
same effect as if fully set forth herein.
2. There is hereby created and established with the Bond Trustee a special and
irrevocable escrow fund designated the "Escrow Fund" (the "Escrow Fund") to be held in the custody
of the Bond Trustee.
3. Concurrently with the execution of this Escrow Deposit Agreement (the
"Agreement"), and pursuant to Section 801 of the Refunded Bond Indenture C/HP herewith
irrevocably deposits or causes to be deposited with the Bond Trustee $ and the Bond
Trustee acknowledges receipt of immediately available moneys in such amount. C/HP represents
that such deposit i.s in a principal amount sufficient, together with interest to be earned thereon, to
pay all principal of, premium and interest on the Refunded Bonds as specified on the attached
Exhibit B. Concurrently with the execution of this Escrow Deposit Agreement, the Bond Trustee
is hereby directed to purchase the Government Obligations described in Exhibit A solely from the
money deposited with it pursuant to this Escrow Deposit Agreement. Such obligations purchased
pursuant to Exhibit A shall be deposited in the Escrow Fund and held therein.
4. The escrow created hereby shall be irrevocable. C/HP and the Issuer irrevocably
waive any right to call the Refunded Bonds for redemption prior to January 1, 2006. The holders
of the Refunded Bonds shall have an express lien on all cash and Government Obligations in the
Escrow Fund until used and applied in accordance with this Escrow Deposit Agreement. All such
amounts, including matured principal of and interest income from the Government Obligations, shall
be applied solely for the payment of the respective principal of and interest on the Refunded Bonds
except as herein expressly provided.
5. (a) Except as otherwise expressly provided in this Section 5, the Bond Trustee
shall have no power or duty to invest or reinvest any moneys held hereunder or to sell, transfer or
otherwise dispose of the Government Obligations listed on Exhibit A.
(b) On the dates specified on Exhibit B, the Bond Trustee shall withdraw from
the amounts held in the Escrow Fund hereunder, including matured principal and interest income
on the Government Obligations therein, an amount equal to the principal of, redemption premium
and interest on the Refunded Bonds, which Bonds shall have theretofore been called for redemption
pursuant to the provisions of the Refunded Bond Indenture, and pay such amounts to the owners of
the Refunded Bonds. The liability of the Bond Trustee to make the payments required by this
Section 5(b) shall be limited to the moneys and Government Obligations in the Escrow Fund created
hereunder.
(c) At the written request of C/HP and upon compliance with the condition
hereinafter stated the Bond Trustee shall have the power to sell, transfer or otherwise dispose of or
request the redemption of the Government Obligations acquired hereunder and to substitute for the
Government Obligations other Government Obligations (the "Substituted Obligations"), which are
not subject to redemption prior to maturity except at the option of the holder thereof. The Bond
Trustee shall purchase such Substituted Obligations with the proceeds derived from the sale, transfer,
disposition or redemption of the Government Obligations, together with any other funds available
for such purpose. The foregoing transactions may be effected only if (i) an independent certified
public accountant shall certify to the Bond Trustee that after such transaction the principal amount
of the Substituted Obligations will, together with any other moneys available for the purpose, be
sufficient to pay, as the same become due and payable, whether at maturity or upon mandatory
redemption, all principal of and interest on the Refunded Bonds; and (ii) the amounts and dates of
the anticipated transfers from the Escrow Fund to the bank or banks at which such Refunded Bonds
are payable in accordance with their terms will not be diminished or postponed thereby; and (iii) the
Bond Trustee shall receive an unqualified opinion of nationally recognized attorneys on the subject
2
of municipal bonds to the effect that such disposition and substitution or purchase would not cause
any Refunded Bond or any of the Issuer's Multi-Family Housing Mortgage Revenue Refunding
Bonds, Series 2002 (Clipper Cove Apartments) (the "Series 2002 Bonds") to be an "arbitrage bond"
within the meaning of Section 148 oftbe Code and the regulations thereunder in effect on the date
of such disposition, substitution or purchase and applicable to obligations issued on the issue date
of the Refunded Bonds or Series 2002 Bonds, as applicable.
6. All cash or Government Obligations remaining in the Escrow Fund after all the
transfers described on Exhibit B have been met shall be paid to C/I-IP.
7. (a) The Bond Trustee shall not be liable for any loss resulting from any
investment made pursuant to this Agreement in compliance with the provisions hereof. The Bond
Trustee shall have no lien whatsoever on any of the moneys on deposit in the Escrow Fund for the
payment of fees and expenses for services rendered by the Bond Trustee under this Agreement or
otherwise, or any right of offset with respect thereto. C/HP shall be and remain liable for any loss
resulting from any investment of the Escrow Fund. C/HP agrees to pay the fees and expenses of the
Bond Trustee now due and payable and to become due and payable under this Escrow Deposit
Agreement from funds of C/HP and not from amounts held in the Escrow Fund. C/HP shall remain
liable for the reasonable out-of-pocket expenses (including attorney's fees and expenses) of the Bond
Trustee arising from any actions taken by the Bond Trustee with respect to the Government
Obligations and C/HP hereby agrees to indemnify and hold harmless the Bond Trustee from any and
all fees and expenses (including attorney's fees and expenses) so incurred by the Bond Trustee except
for such fees and expenses arising out of acts of negligence or willful misconduct on the part of the
Bond Trustee or its agents or employees, and agrees to pay such fees and expenses promptly upon
receipt of any statement therefore from the Bond Trustee.
(b) In the event of the Bond Trustee's failure to account for any of the
Government Obligations or moneys received by it, said Government Obligations or moneys shall
be and remain the property of the Issuer in trust for the holders of the Refunded Bonds as herein
provided.
(c) Moneys or Government Obligations held hereunder may be commingled for
purposes of investment or otherwise.
(d) The Issuer and C/HP covenant and agree for the benefit of the holders of the
Refunded Bonds that they will not knowingly make, or knowingly permit, any use of the
Government Obligations or other amounts in the Escrow Fund to be used in any manner which
would cause the Refunded Bonds or Series 2002 Bonds to be "arbitrage bonds" within the meaning
of the Code. The Bond Trustee shall be entitled to rely upon an opinion of counsel to determine at
any time its compliance with this Section 7(d).
(e) The Bond Trustee is entering into this Escrow Deposit Agreement in its
capacity as Bond Trustee under the Refunded Bond Indenture and, in particular, pursuant to Section
801 of the Refunded Bond Indenture. All provisions of the Refunded Bond Indenture referring to
the rights, responsibilities and obligations of the Bond Trustee are incorporated herein by this
reference to the same extent as if reproduced herein verbatim.
(f) Section 5.3 of that certain Loan Agreement, dated as of June 1, 1996, between
C/HP and the Issuer shall apply to the Bond Trustee in its capacity hereunder.
8. This Agreement shall terminate when all transfers required to be made by the Bond
Trustee under the provisions hereof shall have been made.
9. The Bond Trustee shall not be liable for the sufficiency of the Government
Obligations and other moneys available for such purpose to pay the Refunded Bonds, so long as the
Bond Trustee applies the Government Obligations and moneys as provided herein, and complies
fully with the terms of this Agreement, and the Bond Trustee shall not be liable for any deficiencies
in the amounts necessary to pay the Refunded Bonds. C/H? shall be and remain liable for the
sufficiency of the Government Obligations and other moneys available for such purpose to pay the
Refunded Bonds.
10. If any one or more of the covenants or agreements provided in this Agreement should
be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreement
shall be deemed and construed to be severable from the remaining covenants and agreements herein
contained and shall in no way affect the validity of the remaining provisions of this Agreement.
11. All the covenants, promises and agreements in this Agreement contained shall bind
and inure to the benefit of the successors and assigns of the parties hereto, whether so expressed or
not.
12. This Agreement shall be governed by the applicable laws of the State of Florida.
13. This Agreement may be executed in several counterparts, all or any of which shall
be regarded for all purposes as one original and shall constitute and be but one and the same
instrument.
14. This Agreement may not be amended without the prior written consent of ACA
Financial Guaranty Corporation.
15. All notices, approvals, consents, requests and other communications hereunder shall
be in writing and shall be deemed to have been given when delivered or mailed by first class,
registered or certified mail, return receipt requested, postage prepaid, and addressed as follows:
4
If to the Issuer:
City of Boynton Beach
100 East Boynton Beach Blvd.
Boynton Beach, FL 33435
Attn: City Manager
If to C/HP:
C/HP Cove, Inc.
c/o The NHP Foundation
1090 Vermont Avenue, NW, Suite 400
Washington, DC 20005
Attention: President
with a copy to:
C/HP Cove, Inc.
c/o Housing Partnership, Inc.
4016 Broadway Avenue
West Palm Beach, Florida 33407
Attention: John Corbett
If to the Bond
Trustee:
The Bank of New York Trust Company of Florida, N.A.
100 Ashford Center North, Suite 520
Atlanta, Georgia 30338
A duplicate copy of each notice, approval, consent, request or other communication given
hereunder by the Issuer, C/HP or the Bond Trustee to any one of the others shall also be given to all
of the others. The Issuer, C/I-IP and the Bond Trustee may, by notice given hereunder, designate any
further or different addresses to which subsequent notices, approvals, consents, requests or other
communications shall be sent or persons to whose attention the same shall be directed.
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be
execmed by their duly authorized officers as of the date first above written.
THE BANK OF NEW YORK, acting through its
agent, THE BANK OF NEW TRUST COMPANY
OF FLORIDA, N.A. as Bond Trustee
By:
Vice President
C/HP COVE, INC.
[SEAL]
By:
Its President
CITY OF BOYNTON BEACH, FLORIDA
ATTEST:
By:
Title: City Manager
By:
Title: Clerk
.. EXHIBIT A
GOVERNMENT OBLIGATIONS TO BE DEPOSITED
INTO ESCROW FUND
Maturity Date
First Interest
Payment Date Principal Type
Coupon
EXHIBIT B
REFUNDED BONDS
DEBT SERVICE SCHEDULE
Date
Principal
Called
Principal Premium
Interest
Total
GA0234$L13W~z~w (2).wpd 8
EXHIBIT 'E"
FIRST AMENDMENT TO RESTRICTIVE COVENANTS
FIRST AMENDMENT TO DECLARATION OF RESTRICTIVE COVENANTS
THIS FIRST AMENDMENT TO DECLARATION OF RESTRICTIVE COVENANTS (this
"First Amendment") is made as of the 1~ day of December, 2002, by C/HP COVE, INC., ("C/HP
Cove") for the benefit of the CITY OF BOYNTON BEACH, FLORIDA, (the "Issuer"), 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 "1996 Trustee") and THE BANK OF NEW YORK
TRUST COMPANY OF FLORIDA, N.A., as Trustee (the "2002 Trustee") under the 2002 Indenture
referred to below.
Section 1. This First Amendment amends and supplements in certain respects the
Declaration of Restrictive Covenants (the "Original Covenants"), dated July 1, 1996, among C/HP
Cove, the Issuer and the 1996 Trustee, and recorded in Official Records Book , Page , et
seq., Public Records of Palm Beach County, Florida.
Section 2. The definition of the term "Bonds" contained in the Original Covenants is
hereby amended to provide:
"Bonds" shall mean the 1996 Bonds, as defined in, and authorized to
be issued pursuant to, the Indenture, and the 2002 Bonds.
Section 3.
terms:
The following words and terms are added to Section 1 as additional defined
"2002 Indenture" means the Indenture of Trust, dated as of December
1, 2002, between the Issuer and the 2002 Trustee.
"2002 Trustee" means The Bank of New York Trust Company of
Florida, N.A., as Trustee pursuant to the 2002 Indenture.
"2002 Bonds" means the Issuer's Multi-Family Housing Mortgage
Revenue Refunding Bonds, Series 2002 (Clipper Cove Apartments)
issued pursuant to the 2002 Indenture.
Section 4. The references to "Trustee" contained in Section 4(c) and (d), Section 7,
Section 11 and Section 14 of the Original Covenants shall hereafter be deemed to be references to
both the 1996 Trustee and 2002 Trustee, jointly and severally.
Section 5. The reference to the "Loan Agreement" contained in Section 8 of the Original
Covenants is amended and shall now be a reference to "the Loan Agreement and the Loan
Agreement, dated December 1, 2002, between the Borrower and the Issuer with respect to the 2002
Bonds."
Section 6. The reference to "the Indenture" contained in Section 11 of the Original
Covenants is amended and shall be a reference to "the Indenture and the 2002 Indenture."
Section 7. The reference in Section 18 of the Original Covenants to "Article XII of the
Indenture" shall hereafter be a reference to "Article XII of the Indenture and Article XII of the 2002
Indenture."
Section 8.
and effect.
Except as amended hereby, the Original Covenants shall remain in full force
IN WITNESS WHEREOF, the Borrower, the 1996 Trustee, the 2002 Trustee and the Issuer
have caused this First Amendment to Declaration of Restrictive Covenants to be executed in their
respective names and on their behalf as of the date first above written.
Witnesses:
C/HP COVE, INC.
By:
Name:
Title:
President
CITY OF BOYNTON BEACH, FLORIDA
By:
Name: Kurt Bressner
Title: City Manager
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:
2
THE BANK OF NEW YOKK TRUST COMPANY
OF FLORIDA, N.A., as Trustee
By:
Name:
Title:
STATE OF FLORIDA )
COUNTY OF PALM BEACH )
Sworn to and subscribed before me this
me.
~ day of December, 2002, by
of the C/HP COVE, INC. and he is personally known to
(NOTARY STAMP)
Notary Public
STATE OF FLORIDA )
COUNTY OF PALM BEACH )
Sworn to and subscribed before me this ~ day of December, 2002, by KURT
BRES SNELL as City Manager of the CITY OF BOYNTON BEACH, FLORIDA and he is personally
known to me.
(NOTARY STAMP)
Notary Public
STAr~ OF Fr.Oba~A >
COUNTY OF PALM BEACH )
Sworn to and subscribed before mc this __ day of December, 2002, by
, as of THE BANK OF NEW YORK TRUST COMPANY
OF FLORIDA, N.A. and he is personally known to mc.
(NOTARY STAMP)
Notary Public
EXHIBIT "F"
FIRST AMENDMENT TO DEFINITIVE AGREEMENT
~OU4~bo.d ~o<O.,,pd - 12-
._FIRST AMENDMENT TO DEFINITIVE AGREEMENT
THIS FIRST AMENDMENT TO DEFINITIVE AGREEMENT (this "First Amendment")
is dated as of December ,2002, and is by and between C/HP COVE, INC., a Florida corporation
not-for-profit CC/HP Cove") and the CITY OF BOYNTON BEACH, FLORIDA, a political
subdivision and municipality of the State of Florida (the "City"), and amends and supplements the
Definitive Agreement (the "Original Agreement"), dated July 25, 1996, between C/HP Cove and the
City.
Section 1. All references in the Original Agreement to Cornerstone Housing Corporation
are amended to be references to "The NHP Foundation."
Section 2. All references in the Original Agreement to "1996 Bonds" are amended to be
references to the "2002 Bonds."
Section 3. The definition of the term "Indenture" contained in the Original Agreement
is amended to provide:
"Indenture" means the Indenture of Trust, dated as of December 1,
2002, between the City and the Trustee, pursuant to which the 2002
Bonds are issued, as such document is amended and supplemented
from time to time.
Section 4. The definition of the term "Trustee" contained in the Original Agreement is
amended to provide:
"Trustee" means The Bank of New York Trust Company of Florida,
N.A., and any successor thereto acting as Trustee pursuant to the
Indenture.
Section 5. A new definition is added to Section 1 of the Original Agreement as follows:
"2002 Bonds" means the City's Multi-Family Housing Mortgage
Revenue Refunding Bonds, Series 2002 (Clipper Cove Apartments)
to be issued pursuant to the Indenture.
Section 6. A new definition is added to the Original Agreement as follows:
"Master Trust Indenture" means the Master Trust Indenture, dated as
of December 1, 2002, between C/HP Cove, Inc. and The Bank of
New York Trust Company of Florida, N.A., as Master Trustee.
Section 7. Section 7 of the Original Agreement is amended by changing the references
in the first paragraph thereof to the "Indenture" to be references to the "Master Indenture" and by
deleting the word.5.."Community Redevelopment Division." The second paragraph of Section 7 of
the Original Agreement is amended by changing the reference to "bonds" in the first sentence to be
a reference to "Obligations."
Section 8. Section 12 of the Original Agreement is amended to provide a new notice
address for C/HP as follows:
C/HP Cove, Inc.
c/o The NHP Foundation
1090 Vermont Avenue, NW, Suite 400
Washington, DC 20005
Attention: President
with a copy to:
C/HP Cove, Inc.
c/o Housing Partnership, Inc.
4016 Broadway Avenue
West Palm Beach, Florida 33407
Attention: John Corbett
Section 9.
effect.
Except as amended hereby, the Original Agreement remains in full force and
Section 10. Counterparts. This First Amendment may be executed in counterparts and
together such counterparts shall constitute one and the same Agreement.
CITY OF BOYNTON BEACH, FLORIDA
(SEAL)
ATTEST: By:
City Manager
City Clerk
C/HPCOVE,~C.
By:
President
EXHIBIT "G"
PRELIMINARY OFFICIAL STATEMENT
G:.~0234~33',bond r~o(l).wpd - 13-