HomeMy WebLinkAboutC-3550 - Funding Approval/Section 108 Loan Security Agreement (CDBG) B-00-MC-06-0546Funding Approval /Agreeme*
r' Title I of the Housing and Community
Development Act (Public Law 930383)
20515R
Beach, California
City of Newport Beach
3300 Newport Bvld.
Newport Beach, California 92658
U.S. Department of Housing t &Urban Development
Office of Community Planning MWDevelopment
Community Development Block Grant Program
95- 60oo� -S
fu h
authority of Tile I of the Housing and Community Development Act of 1974, as amended, (42 USC 5301 et seq.). The Grantee's submissions for Tide I assistance, the
.HUD regulations at 24 CFR Part 570 (as now in effect and as may be amended from time to time), and this Funding Approval, including any special conditions,
constitute part of the Agreement. Subject to the provisions of this Grant Agreement, HUD will make the funding assistance specified here available to the Grantee upon
execution of the Agreement by the parties. The funding assistance specified in the Funding Approval may be used to pay costs incurred after the date specified in item
4 above provided the activities to which such costs are related are carried out in compliance with all applicable requirements. Pre- agreement costs may not be paid with
funding assistance specified here unless they are authorized in HUD regulations or approved by waiver and listed in the special conditions to the Funding Approval.
The Grantee agrees to assume sit of the responsibilities for environmental review, decision making, and actions, as specified and required in regulations issued by the
Secretary pursuant to Section 104(g) of Tile I and published in 24 CFR Part 58. The Grantee further acknowledges its responsibility for adherence to the Agreement by
sub - recipient entities to which it makes funding assistance hereunder available.
U.S. Depadment of Housing and Urban Development (By Name)
Grantee Name
Nelson R. Bregon _
NEWPORT BEACH, CALIFORNIA
Title
Title
/'
,f
Deputy. Assistant Secretary for Grant Programs
j
sw, 1�. tQ try.
Date (mmmlddryyyy)
kkSS
Signature
'
Da )
7. Catego of Title I Assistance for this Funding Action
(check only one)
❑ a. Entitlement Sec 106(b)
❑ b. Stale- Adminktered, Sec 106(d)(1)
❑c � HUD- AdminLSKemd Small Cities, Sec 106(d)(2)(8)
❑ d. Indian CDBG Programs, Sac 106(a)(1)
❑ a. Surplus Urban Renewal Funds, Sec 112(b)
❑ L Special Purpose Grants, Sec 107
® g. Loan Guarantee, See 108
8. Spatial Conditions
(check one)
❑ None
® Attached
.Date HUD Received Subm=on
(mrNdit")
10. check one
❑ a. ON. Funding
Approval
® b. Amendment
Amendment Number
j-
9b. Date Grantee Notified
(mm/ddrjyyy)
9c. Date of Start of Program Year
(mmlddryyyy)
11. 'Amount Community Development
Black Grant FY ( ) FY(
) FY( )
a. Funds Reserved for this Grantee
b. Funds now being Approved
a Reservation to be Cancelled
11a minus 11b
12a. Amount of Loan Guarantee Commitment now being Approved
12b. Name and complete Address of Public Agency
$2,400,000
NOT APPLICABLE
Loan Guarantee Acceptance Provisions for Designated Agencies:
The public agency hereby accepts the Grant Agreement executed by the
Department of Housing and Urban Development on the above date with
respect to the above giant number(s) w Grantee designated to receive
loan guarantee assistance, and agrees to comply with the terms and
12a Name of Authorized Official for Designated Public Agency
conditions of the Agreement, applicable regulations, and other
requirements of HUD now or hereafter in effect, pertaining to the
Title
assistance provided it.
Signature
HUD Accounting use Only
Effective Data
Batch TAC Program Y A Reg Area Document No. Project Number Category Amount (mMddlyyyy)
A I 000ii M
000
U
Y
U
1111111110 110 11i�
Project Number
ProiV Number
Amount
Amount
r ,
8. Special Conditions.
(a) In the event the Borrower fails to submit notes or other obligations for
inspection and guarantee by the Secretary of the Department of Housing and Urban
Development (the Secretary) before April 1, 2003, the offer will expire as of such date.
(b) The repayment schedule for the guaranteed loan must be acceptable to the
Secretary.
(c) The Borrower shall provide additional security for the guaranteed loan and
such additional security must be acceptable to the Secretary. The additional security
shall be identified in the Contract for Loan Guarantee Assistance specified by 24 CFR
§570.705(b)(1) which will be executed at the time the guaranteed obligations are
issued.
(d) Prior to submitting notes or other obligations for inspection and guarantee by the
Secretary, the Borrower shall submit information required under Section 102(b) of the
Department of Housing and Urban Development Reform Act of 1989 (42 U.S.C.
3531). Such information shall be submitted to the HUD's Los Angeles Area Office.
07/03/00
SUPPLEMENT
relating to
$[[ ]J Aggregate Original Principal Amount
SECTION 108 GOVERNMENT GUARANTEED
PARTICIPATION CERTIFICATES, SERIES HUD
This SUPPLEMENT (the "Series Supplement "), is entered into by the
SECRETARY OF HOUSING AND URBAN DEVELOPMENT (the "Secretary") and THE
CHASE MANHATTAN BANK (formerly known as Chemical Bank), as trustee (the "Trustee ")
under the Trust Agreement, dated January 1, 1995, by and between the Trustee and the Secretary,
as sponsor of a Trust created on behalf of certain units of general local government and public
agencies designated by such units of general local government (the "Agreement "). All
capitalized terms used but not defined herein have the meanings ascribed thereto in the
Agreement.
WITNESSETH
WHEREAS, pursuant to the Agreement, the Trustee is to hold in trust certain Notes
guaranteed by the Secretary and to issue Certificates evidencing beneficial interests in a trust
consisting of such Notes (the "Trust "); and
WHEREAS, pursuant to the Agreement, the Secretary and the Trustee are to enter into
this Series Supplement whereby the Secretary delivers the Notes and related Guaranty
to the Trustee and the Secretary directs the Trustee to issue the Certificates (the "Series
Certificates ");
NOW, THEREFORE, in consideration of these premises, the parties agree as follows:
1. Delivery and Acknowledgment.
The Secretary hereby delivers to the Trustee (a) the Notes (together with any
necessary endorsements thereon) listed on the attached Schedule 1, as identified by Borrower,
Aggregate Principal Amounts, Principal Amounts, Principal Due Dates and interest rates and (b)
the related Guaranty to hold in trust for the benefit of the Certificateholders. The Secretary
acknowledges the terms and conditions of the Agreement and hereby agrees that the Trust shall
be governed by the terms thereof as amended hereby. The term "Trust" as used herein shall refer
to that Trust established as a result of the delivery to the Trustee of the Notes and related
documents referred to herein.
2. Authority to Issue Certificates.
The Secretary hereby directs the Trustee, as agent for the Secretary, to issue Series
Certificates with respect to the Trust as follows:
a. Name of Series. The designation of the Series authorized hereby shall be
"Section 108 Government Guaranteed Participation Certificates, Series HUD
Guaranteed by the Secretary of Housing and Urban Development."
b. Issuance of Certificates. Pursuant to Section 2.03 of the Trust Agreement,
the Trustee is hereby authorized and directed to execute on behalf of the Secretary, authenticate
and deliver, on this date, in the name of the Certificateholder, the Series Certificates
specified on the attached Schedule 2 against receipt of the Notes, the related Guaranty and this
Series Supplement.
59800
3. Acknowledetnents and Certifications.
a. The Secretary hereby certifies that it has satisfied all conditions on its part
to be performed or satisfied as a condition to the issuance of the foregoing Certificates. Without
limiting the provisions of Section 3.11 and Section 7.01 of the Agreement, the Secretary further
certifies that the Trustee shall be paid, for services rendered in connection with the
administration of the Trust assets listed on the attached Schedule 1, and pursuant to Section 7.01
of the Agreement, a fee of $11 11.
attached Schedule 1.
C.
The Trustee hereby acknowledges receipt of the Trust assets listed on the
This Series Supplement shall constitute the Supplement referred
to in Section 2.01 of the Agreement.
4. Modification and Ratification of the Agreement.
a. Solely for purposes of this Series Supplement and the Series
Certificates, the definition of "Optional Redemption" set forth in Article I of the
Agreement is hereby deleted in its entirety and replaced as follows:
"Optional Redemption: The full or partial prepayment of a Principal
Amount due on a Note by a Borrower in accordance with the optional redemption
provisions (if any) of such Note, such optional redemption provisions to provide,
among other things, that such an Optional Redemption (i) shall be made only as of
any Interest Due Date occurring on or after the date specified in the related Note
after which such Optional Redemptions are permitted, (ii) must be received in full
by the Trustee by wire transfer of immediately available funds to the Certificate
Account on the related Note Payment Date, and (iii) must be accompanied by an
59800
identification of the Borrower by name, the HUD- assigned Note number and such
other information as the Secretary or the Trustee may specify."
b. Solely for purposes of this Series Supplement and the Series
Certificates, the last sentence of the first paragraph of Section 3.03 of the Agreement
is hereby deleted in its entirety and replaced as follows:
"The Trustee shall apply any payments received in respect of permitted
Optional Redemptions to the outstanding Principal Amounts of the related Note
designated in the instructions of the related Borrower set forth in the above
mentioned notice, in each case, as approved in writing by the Secretary."
C. Solely for purposes of this Series Supplement and the Series
Certificates, the fast and second paragraphs of Section 3.07 of the Agreement are
hereby deleted in their entirety and replaced as follows:
"Any Borrower may defease the unpaid aggregate Principal Amount of a
Note, or the unpaid Principal Amount due on a Principal Due Date, in whole or in
part, at any time, subject to the corresponding Contract and this Agreement. For
each Note or Principal Amount (or portion thereof) that the related Borrower
elects to defease, the Borrower shall establish and maintain with the Trustee a
trust account (a "Defeasance Account "), separate and apart from all other accounts
of such Borrower and the Trustee. The Borrower shall irrevocably deposit into
such account either moneys or Government Obligations that, in the sole discretion
of the Secretary, mature and bear interest at times and in amounts sufficient,
together with the moneys already on deposit with the Trustee for such purpose, to
pay when due the principal and interest to become due with respect to the related
59800
4
Principal Amount (or portion thereof) that the Borrower elects to defease, in
accordance with the notice of the Borrower as specified below.
The Borrower's election to defease shall be evidenced by giving written
notices to the Trustee and the Secretary, which notices shall authorize and direct
the establishment of the related Defeasance Account, shall specify the money and
Government Obligations to be deposited therein and shall specify the particular
Principal Amounts (or portions thereof) being defeased and the related Principal
Due Date(s) and Optional Redemption Date(s) (consistent with the related Note
and Contract). For all purposes of this Agreement, to the extent that a Principal
Amount (or portion thereof) is so specified for defeasance in accordance with the
Contract, such specification shall constitute an election to redeem on the date
specified in the foregoing notice for purposes of the related Note, subject to
approval of the Secretary. Upon and in accordance with the Secretary's
instructions pursuant to the corresponding Contract, the Trustee shall apply so
much of the sums deposited into a Defeasance Account as shall be necessary to
purchase the Government Obligations designated by the Secretary's instructions.
If the funds deposited were insufficient, or there were excess funds deposited, the
Trustee shall follow the Secretary's directions as to the disposition of such funds."
d. The Agreement as modified and supplemented by this Series
Supplement with respect to the Series Certificates (but which modification and
supplement shall not apply to any other Series of Certificates unless otherwise specified in the
related Supplement for such Series of Certificates) is in all respects ratified and confirmed, and
59800
the Agreement as so modified and supplemented by this Series Supplement shall be
read, taken and construed as one and the same instnnnent.
59800
6
IN WITNESS WHEREOF, the parties have caused this Series Supplement to
be executed as of the _ day of
SECRETARY OF HOUSING AND URBAN DEVELOPMENT
M
THE CHASE MANHATTAN BANK, as Trustee
By:
Name:
Title:
59800
•
1 TO SERIES SUPPLEMENT
TO TRUST AGREEMENT
TRUST ASSETS ASSIGNED TO TRUSTEE
PRINCIPAL
DUE DATE
August 1, 2001
August 1, 2002
August 1, 2003
August 1, 2004
August 1, 2005
August 1, 2006
August 1, 2007
August 1, 2008
August 1, 2009
August 1, 2010
August 1, 2011
August 1, 2012
August 1, 2013
August 1, 2014
August 1, 2015
August 1, 2016
August 1, 2017
August 1, 2018
August 1, 2019
August 1, 2020
59900
8
INTEREST RATE
%
59800
9
•
•
Principal Am unts Due on August 1,
Borrower
Aggregate
Principal
Amounts
2001
2002
2003
2004
2005
2006
2007
2008
2009
59800
9
•
•
$9800
10
•
Principal Amounts Due on August 1,
Borrower
Aggregate
Principal
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
$9800
10
•
V �
SCHEDULE 2 TO SERIES SUPPLEMENT
TO TRUST AGREEMENT
CERTIFICATES TO BE ISSUED
CUSIP Number PrincitW Amount Maturity Date' Interest Rate
$ August 1, 2001
%
August 1, 2002
%
August 1, 2003
%
August 1, 2004
%
August 1, 2005
%
August 1, 2006
%
August 1, 2007
%
August 1, 2008
%
August 1, 2009
%
August 1, 2010
%
August 1, 2011
%
August 1, 2012
%
August 1, 2013
%
August 1, 2014
%
August 1, 2015
%
August 1, 2016
%
August 1, 2017
%
August 1, 2018
%
August 1, 2019
%
August 1, 2020
%
Principal amounts due on or after August 1, 2011 are subject to earlier payment upon an Optional
Redemption or an Acceleration Event.
59800
11
0
WIRE TRANSFER INSTRUCTIONS
FOR REMITTING LOAN PROCEEDS TO BORROWER
BORROWER
AMOUNT
PROMISSORY NOTE NUMBER
1. BANK
2. ADDRESS OF RECEIVING BANK
3. ABA IDENTIFICATION NUMBER
4. ACCOUNT NAME
5. ACCOUNT NUMBER
6. BANK OFFICIAL TO CONTACT
7. TELEPHONE NUMBER OF BANK OFFICIAL
BANK (If Applicable) - Not applicable
1. BANK
2. ADDRESS
3. ABA IDENTIFICATION
r .
opinion entitlement 6 -19AD •.
SECTION 108 - GUARANTEED LOANS: MODEL LEGAL OPINION
FOR SERIES 2002 -A PUBLIC OFFERING [August 20021
[This model for use only by counsel to CDBG grantees NOT using a
designated vublic aaencv to issue the guaranteed Note, and which
are not participating in a CDBG States' Program for
nonentitlement areas]
[Please review instructions following opinion]
Honorable Mel Martinez
Secretary of Housing and Urban Development
451 7th Street, SW
Washington, DC 20410
Dear Secretary Martinez:
The undersigned, being duly licensed and in "good standing to
practice law in the State [Commonwealth] of ,
is legal counsel to the [City, County, etc.] of
( "Borrower "). As such, I [we] have represented
the Borrower regarding that certain promissory note, referred to
as Note No. lSee , in the Aggregate Principal
Amount of $_ instruction S below? ( "Note "), to
be executed by the Borrower payable to the order of the
Registered Holder thereof, and to be guaranteed by the Secretary
of Housing and Urban Development ( "HUD ") under section 108 of the
Housing and Community Development Act of 1974, as amended, 42
U.S.C. 5308 ( "Section 108 "). The Note will be included in a
trust created by HUD (together with other Section 108 Notes
issued by other borrowers), and trust certificates based on the
trust will be sold in the Series 2002 -A public offering by
underwriters selected by HUD. HUD's guarantee of -the Note will
be governed by the Contract for Loan Guarantee Assistance under
Section 108 between the Borrower and HUD (the "Contract "), in
which the Borrower pledges Community Development Block Grants
pursuant to 24 CFR 570.705(b)(2), as well as any'other security
specified in the Contract, as security for HUD's guarantee.
In my [our] capacity as legal counsel, I [we] have made an
examination and investigation of all such matters of fact and
questions of law as I [we] consider necessary or advisable to
enable me [us] to render the opinion hereafter set forth.
Specifically, and without limiting the generality of the
foregoing, I [we] have examined:
[Cite applicable provisions of the Constitution and /or
Statutes of the State [Commonwealth]] [optional]
2. [Cite applicable provisions of Charter and Ordinances
of the Borrower] (optional]
3. A Resolution of the governing body of Borrower dated
authorizing Borrower to enter into
this transaction, and authorizing f Insert name or title
to execute on behalf of Borrower all documents
necessary or desirable to accomplish the transaction.
The Contract
The Note
6. The Trust Agreement, the Amended and Restated Master
Fiscal Agency Agreement, and the form of Supplement to
the Trust Agreement to be executed by the Secretary.of
HUD for the closing of the public offering.
Based on the foregoing investigation and authorities, I am
[we are] of the opinion that:
1. Borrower has authorized in accordance with [the cited]
[applicable] State and local law, the transaction, including
issuance of the Note, the pledge of grant funds, and the
execution of all documents necessary or desirable to accomplish
the transaction.
2. Borrower has authorized /Insert name of authorized
official who executed Note and Contractl , in [his, her]
capacity as [Insert titles , to execute the Contract, the
Note and all other documents necessary or desirable to accomplish
the transaction.
3. The Note and the Contract have been duly executed by the
aforementioned authorized representative of the Borrower, and
upon delivery thereof, due execution of the Contract and
Guarantee on behalf of HUD, and receipt of the loan proceeds on
behalf of the Borrower, the Note and Contract shall be valid,
binding and enforceable obligations of the Borrower.
4. The pledge of present and future Community Development
Block Grants by the Borrower pursuant to 24 CFR 570.705(b)(2) and
the Contract is valid.
5. There is no outstanding, or to my (our) knowledge
threatened, action, suit, proceeding, investigation or litigation
by or against the Borrower that will affect the validity of the
Note or the security therefor.
Sincerely,
2
INSTRUCTIONS
1. Opinions must be signed by an attorney licensed to practice
and in good standing in the applicable State or Commonwealth.
The attorney shall issue the opinion on behalf of a private firm
or local government legal officer or office that represented the
CDBG grantee /section 108 Borrower in the transaction, and it must
be on the firm or office's letterhead. If issued by a firm, the
opinion must be signed on behalf of the firm by a partner or with
the firm name as authorized by the firm. If issued by a
government legal officer or office, the opinion must be signed by
the officer, the head of the legal office, or by a senior lawyer
with authority to bind the office. The appropriate plural
[bracketed) pronouns in the attached model should be used for
opinions signed on behalf of multi - lawyer firms or offices.
2. The language marked "optional" in paragraphs l and 2 at the
bottom of page one of the attached model, including citations, is
recommended to evidence thoroughness and to enhance the
credibility of the opinion, but it can be omitted in the judgment
of the attorney rendering the opinion. However, citing the
applicable authorizing resolution of the local governing body is
required. Of course, should facts or legal authorities come to
HUD's attention that call an opinion into question, HUD reserves
the right to reject, or require such revision to, any opinion, as
HUD in its sole discretion may determine.
3. The local counsel's opinions are based upon the requirements
of paragraph 4(b) of the Contract and are in support of a HUD
opinion given at closing for the public offering, as required by
the Underwriting Agreement between HUD and the underwriters. The
use of the model opinion without substantial charge is strongly
encouraged to permit HUD staff to accept and rely on the opinion
on its face, without time - consuming call- backs, investigation,
and revision. Conditions and qualifying language in legal
opinions require specific review by HUD professional legal staff,
may tend to slow processing of the loan guarantee documentation,
and are generally discouraged, unless they are essential in a
particular case.
However, qualifications which exclude the validity of, or
the authority for, execution of the documents on behalf of the
Borrower from the coverage of the opinion, assume the validity of
such execution, or exempt the signatory attorney from knowledge
of the validity of the execution, are not acceptable. HUD deals
nationally with many cities, counties, and other public bodies,
and cannot independently verify the execution authority of
officials of those entities. Borrowers counsels' opinions
covering proper execution serve as an important check on such
validity.
9
9
While not a cause for rejection of an opinion per se, it is
not necessary to qualify an opinion by stating that
enforceability of the notes may be limited by bankruptcy,
insolvency; reorganization, moratorium, liquidation, or similar
general laws or equity principles relating to or affecting
creditors' rights or providing remedies for the relief of
debtors, or that the availability of specific performance or
injunctive relief in aid of enforcement of the documents may be
limited by equitable rights and defenses. HUD is aware that
there may be exceptions to the enforceability of its rights as a
creditor based on generally applicable laws and equitable
principles; that is why HUD regards the pledge of present and
future CDBG grants, which are controlled by HUD, as the principal
security for repayment of the notes. The purpose.of the legal
opinions is not to get an attorney to act as insurer of the
absolute enforceability of the documents but rather to require
that there has been legal review adequate to assure proper
authorization and execution of the notes and related documents by
the proper parties under State and local law.
4.. Separate models are available from HUD for transactions in
which a CDBG grantee is using a designated public agency to issue
the Note and receive the proceeds thereof on its behalf.
Similarly, separate models are available for nonentitlement
grantees and their States, where a State - administered CDBG
nonentitlement recipient is issuing the section 108 - guaranteed
Note. If you are involved in one of the foregoing transactions,
please obtain the appropriate model from the program office (see
paragraph 7 below).
An additional opinion to The Chase Manhattan Bank, or its
successor JPMorgan Chase Bank, as Trustee or Fiscal Agent, is not
required in connection with this public offering. The Borrower
is not required to execute the Trust Agreement or the Amended and
Restated Master Fiscal Agency Agreement; these documents are
incorporated by reference in the Contract and the-Note, and the
Borrower agrees to the terms of those documents by executing the
Contract and the Note. Copies of the Amended and Restated Master
Fiscal Agency Agreement, Trust Agreement, and the form of
Supplement to the Trust Agreement to be executed on behalf of the
Secretary at closing on the Public Offering Date, should have
been included in the package of documents transmitted to the
Borrower by HUD. If they were not, and if you have not
previously reviewed them, please contact the CPD Financial
Management Division phone number at the end of these instructions
for copies, if necessary. The Trust Agreement and the Amended
and Restated Master Fiscal Agency Agreement have not changed
since the last public offering, and no change is anticipated in
the Supplement to the Trust Agreement except for dates and the
schedules of the obligations covered by the Supplement.
5. The attorney should assure that the legal name of the
Borrower in the Note and the Contract is correct and should
notify HUD if it is not. The note number to be inserted in the
4
opinion in the first paragraph appears in the heading of the
Note. The Aggregate Principal Amount to be inserted also appears
in the heading of the Note and at the end of the attached
Schedule P &I (these should agree).
[Background - Unlike Section 108 interim (variable -rate)
financing, the entire Aggregate Principal Amount of the Note will
be disbursed at closing on the Public Offering Date, as
applicable: (i) to pay off interim financing, (ii) for deposit in
the Borrower's Guaranteed Loan Funds Account under paragraph 1 of
the Contract, or (iii)(by deduction) to pay the fees referred to
in paragraph 4 of the Contract if so requested by the Borrower.
Also unlike such interim financing, Principal Amounts due on
particular Principal Due Dates on Schedule P &I cannot be amended
(even with HUD approval) after closing of the public offering.
Borrower's counsel should assure that the Borrower's financial
officials are satisfied that Schedule P &I accurately represents
the repayment schedule agreed between the Borrower and HUD.)
"Other Security" Opinions
6. If so provided in the Contract, an additional opinion or
opinions may be requested of Borrower's counsel or other counsel
with regard to "other security" as negotiated between HUD and the
Borrower for a particular transaction. If such opinions have
previously been furnished in connection with interim financing,
the same opinions do not have to be submitted again. Generally,
any additional opinions related to other security will be
described in paragraphs 5(c) or 15 of the Contract. The Contract
may not require such other security opinions to be delivered to
HUD with the executed Note and Contract, but they may be required
at a later time, and the Contract may provide that they be
delivered to a local custodian, rather than HUD. If so, it is
recommended that such opinions be separate from ':he attached
model opinion required with respect to execution and validity of
the Note and Contract. However, if the Contract'requires the
"other security" opinion(s) to be submitted to HUD at the same
time as the model opinion, they may be combined with the model
opinion. Due to the variety of "other security" provisions,
model language for the "other security" opinions cannot be
furnished routinely.
7. If there are any questions, including specific questions
about "other security" opinions, the 'local CDBG program office or
counsel may contact its representative in HUD's Office of
Community Planning and Development, Financial Management
Division, at 202 - 708 -1871. Local counsel may also directly call
John Wingard or Evelyn Wrin in HUD's Office of General Counsel at
202 - 708 -2027, extension 5278 or 5220 respectivel,, with questions
about the opinion.
6/19/02
5
N _p yENt�y�py
5i
OFFICE OF ASSISTANT SECRETARY
I, FOR COMMUNITY PLANNING AND DEVELOPMENT
Dear Sir or Madam:
U.SAkpartment of Housing and Urban Deveenent
Washington, D.C. 20410 -7000
July 2, 2002
Enclosed are documents requested by the City of Newport Beach, the "Borrower ", related
to the pending public offering of trust certificates guaranteed under Section 108 of the Housing
and Community Development Act of 1974, as amended. The Public Offering Date is firm for
August 8, 2002, except for adverse market conditions. The offering will be underwritten by: (i)
Merrill Lynch & Co., (ii) Credit Suisse First Boston, and (iii) UBS Warburg LLC. Capitalized
terms used in this letter are more fully defined in the attached documents.
Even though the public offering will not be held until August 8, 2002, it is necessary that
HUD receive the properly executed documents from you by close of business on July 25. We
must verify that we have all documents from all Borrowers, and that they are satisfactory, before
pricing and before we can sign the Underwriting Agreement. If we do not receive the documents
from you by July 25, your note will not be included in the Offering on August S.
This underwritten public offering will be conducted pursuant to legislation which permits
the Department of Housing and Urban Development ( "HUD ") to guarantee trust certificates that
are backed by a trust composed of notes or other obligations guaranteed under Section 108.
Your note will be included in such a trust, together with the notes of other participating
Borrowers.
The enclosed public offering documents, which must be executed by the authorized
representative of the Borrower identified in its counsel's legal opinion, are the Promissory Note
( "Note ") and the Contract for Loan Guarantee Assistance ( "Contract "). The opinion of counsel
to the Borrower is required pursuant to paragraph 4(b) of the Contract; a model opinion with
attached instructions is also enclosed for the guidance of counsel. If the Borrower previously
executed interim financing documents and is not receiving funds for new activities (i.e., activities
not covered by the existing Contract) at this offering, no new additional security Contract
provisions are required for this offering; the Contract incorporates the previous additional security
provisions.
After it is executed by the Borrower and returned to HUD, the Note (which is not
effective until guaranteed by HUD at the closing of the public offering) will be delivered by HUD
to JP Morgan Chase Bank, as Trustee, two days before the Public Offering Date and will be held
in trust.. At closing, the Trustee will issue a single, separate certificate for each Principal Due
Date specified in the Note. Each such certificate shall specify the applicable pass - through interest
rate, which rate(s) will also be entered in Schedule P &I attached to the Note for the applicable
Principal Due Dates. The interest rate will be established for each trust certificate at pricing by
the Underwriters one week before the Public Offering Date.
The Aggregate Principal Amount of the Note shall be repaid in accordance with Schedule
P&I attached thereto. Please verify that the Principal Amounts ((payments) shown nn gnhednla.
P&I are rnrrect- since they may not ha rhangP[i aRPr the offering. Interest will accrue on each
Amount Principal at the pass - through interest rate on the related trust certificate, up to the
applicable Interest Due Date (each February 1 or August 1) or Principal Due Date on the schedule
attached to the Note (which dates correspond to the related distribution dates of payments to
investors on the trust certificates). Each interest payment will consist of the aggregate of the
interest amounts accrued to the applicable date on the entire principal balance of the Note.
However, all payments on the Note are actually due to the Trustee on the Note Payment Date
seven Business Days before the applicable Interest Due Date or Principal Due Date. This is
necessary to enable the Trustee to aggregate the payments and direct them to the proper
investors, and also to enable HUD to honor its Guarantee by making payment on behalf of the
Borrower from pledged grant funds if necessary. You will be notified by the Trustee of the
amount of the required payment one month before each Note Payment Date.
The Note and Contract reference the Trust Agreement and the Amended and Restated
Master Fiscal Agency Agreement, both of which are enclosed.' Pursuant to the Contract, the
Borrower consents to the selection of JP Morgan Chase Bank as Trustee and agrees to the terms
of the public offering, including the Trust Agreement. The Trust Agreement principally sets forth
duties and responsibilities of the Trustee, but certain provisions of interest to borrowers are
included, including compensation and indemnification of the Trustee, which is secured only by the
security specified in paragraph 5 of the Contract.
The Contract provides when and how payment of the costs (fees) of the public offering is
to be made. The final amount of the costs will not be known until the week before the Public
Offering Date. We will notify you of the amount at that time, as well as the amount of accrued
interest payable on interim note Advances being paid off at the offering, if applicable.
The enclosed form for wire transfer of funds provides the information that you will need
to wire payments on the Note to the Trustee. The other wire transfer form (which you must
return to HUD) is the information that the Trustee will need to wire the loan proceeds to you. Do
not fill in the amount to be wired to you - we will do this after we calculate your costs of the
public offering, and any interim note interest costs if applicable.
' Please note that you do not need to execute and return the Trust Agreement or the Restated Master Fiscal Agency
Agreement..
0
Return the executed documents and the legal opinion by July 25, 2002, to:
U.S. Department of Housing and Urban Development
ATTN: Paul Webster, Director
Financial Management Division
451 Seventh St., S.W., Room 7180
Washington, D.C. 20410
If you have any questions regarding this letter, please contact us at 202/708 -1871. If your
counsel have any questions about preparation of the legal opinion(s), please have them contact
John Wingard or Evelyn Wrin of our Office of General Counsel on 202/708 -2027, extension 5278
or 5220, respectively.
Very sincerely yours,
Paut Webster
Director
Financial Management Division
Enclosures
Contract for Fixed Ratelfte, Entitlement, 5 -31 -02
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
CONTRACT FOR LOAN GUARANTEE ASSISTANCE UNDER
SECTION 108 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT
OF 1974, AS AMENDED, 42 U.S.C. 55308
For Series HUD 2002 -A Certificates
This Contract for Loan Guarantee Assistance ( "Contract ") is
entered into by the City of Newport Beach, California, as
Borrower (the "Borrower "), and the Secretary of Housing and Urban
Development ( "Secretary "), as guarantor for the Guarantee made
pursuant to section 108 ( "Section 108 ") of title I of the Housing
and Community Development Act of 1974, as amended (the "Act ") and
24 CFR Part 570, Subpart M, of the promissory note executed
contemporaneously herewith and numbered B- 00 -MC -06 -0546, in the
Aggregate Principal Amount of $2,400,000, and any amended note or
note issued in substitution for such note and having the same
note number (the "Note "). Such Aggregate Principal Amount will be
paid or credited to the account of the Borrower pursuant hereto
(including any funds used to pay off prior interim notes
refinanced by the Note), and all such amounts are collectively
referred to herein as the "Guaranteed Loan Funds." The Note
(including the Fiscal Agency Agreement and the Trust Agreement as
defined in the Note and incorporated therein) is hereby
incorporated into the Contract. Terms used in the Contract with
initial capital letters and not otherwise defined in the text
hereof shall have the respective meanings given thereto in the
Note. The Fiscal Agency Agreement and the Trust Agreement are
sometimes collectively referred to herein as the "Fiscal
Agency /Trust Agreements," and the Fiscal Agent and the Trustee
are sometimes collectively referred to as the "Fiscal
Agent /Trustee."
PART I
A. The Note. The Note is payable to the Trustee as Registered
Holder. On the Public Offering Date, it is expected that
trust certificates backed by the Note and similar notes
issued by other Section 108 borrowers, denominated "Section
108 Government Guaranteed Participation Certificates Series
HUD 2002 -A," will be purchased for a purchase price of the
full aggregate principal amounts-thereof by underwriters
selected by the Secretary (the "Underwriters ") pursuant to
an Underwriting Agreement between the Underwriters and the
Secretary, at a closing on such Public Offering Date as
determined by the Secretary and the Underwriters. The
Borrower agrees that the interest rate at which the trust
certificate of a specified maturity is sold to the
Underwriters shall be the interest rate inserted on the
Public Offering Date in Schedule P &I of the Note for the
Principal Amount of corresponding maturity. The Note shall
Contract for Fixed Rat *te, Entitlement, 5-31 -02 •
be effective as an obligation of the Borrower only upon its
delivery by the Secretary to the Fiscal Agent /Trustee and
sale to the Underwriters at the closing on the Public
Offering Date. The Borrower authorizes the Secretary to
deliver the Note, together with the Secretary's Guarantee
thereof, to the Fiscal Agent /Trustee as of.such closing on
the Public Offering Date, in accordance with the Fiscal
Agency /Trust Agreements. After the Public Offering Date, the
Borrower agrees that the Trustee pursuant to the Trust
Agreement will maintain the books and records of all
payments on the Note and all Principal Amounts and interest
rates on such Principal Amounts.
B. Consents. By execution of this Contract, the Borrower
ratifies and consents to the Secretary's selection of the
Underwriters and authorizes the Secretary to negotiate with
the Underwriters the terms of the Underwriting Agreement and
of the public offering of interests in the t'r'ust certificates
to investors (including the applicable interest rates). In
addition, by execution hereof the Borrower ratifies and
consents to the Secretary's selection of the'Fiscal
Agent /Trustee and agrees to the respective terms of the
Fiscal Agency /Trust Agreements.
PART II
1. Receipt, Deposit and Use of Guaranteed Loan Funds.
(a) Except for fees and charges deducted or, the Public
Offering Date pursuant to paragraph 4(a) by the Fiscal
Agent /Trustee, or funds used to pay off any interim note
refinanced by the Note, the Guaranteed Loan Funds shall be
electronically transferred in accordance with.the Borrower's
instructions for deposit in a separate, identifiable
custodial account (the "Guaranteed Loan Funds Account ") with
a financial institution whose deposits or accounts are
Federally insured. The Guaranteed Loan Funds:Account shall be
established and designated as prescribed in the attached form
document entitled "Letter Agreement for Section 108 Loan
Guarantee Program Custodial Account" (Attachment 1) and shall
be continuously maintained for the Guaranteed Loan Funds.
Such Letter Agreement must be executed when the Guaranteed
Loan Funds Account is established. (A fully executed copy of
such Letter Agreement shall be submitted to the Secretary
within thirty days of its execution.)
The Borrower shall make withdrawals from said account only
for payment of the costs of Section 108 activities approved
by HUD, for transfer to the Loan Repayment Account or for the
temporary investment of funds pursuant to this paragraph
Contract for Fixed Rat *te, Entitlement, 5 -31 -02 •
1(a). Such temporary investment of funds into the Guaranteed
Loan Funds Investment Account shall be required within three
Business Days after the balance of deposited funds exceeds
the amount of the Federal deposit insurance on the Guaranteed
Loan Funds Account. At that time, any balance of funds in the
Guaranteed Loan Funds Account exceeding such insurance
coverage shall be fully (100 %) and continuously invested in
Government Obligations, as defined in paragraph 10 hereof,
held in the Guaranteed Loan Funds Investment Account.
All temporary investments, whether or not required as above,
shall be limited to Government Obligations having maturities
that are consistent with the cash requirements of the
approved activities. In no event shall the investments mature
on or after August 31, 2004, or have maturities which exceed
one year. All such investments shall be held in trust for the
benefit of the Secretary by the above financial institution
in an account (the "Guaranteed Loan Funds Investment
Account ") established and designated as prescribed in the
attached form document entitled "Letter Agreement for Section
108 Loan Guarantee Program Custodial Investment Account"
(Attachment 2), which account shall be maintained for all
Government Obligations purchased with funds from the
Guaranteed Loan Funds Account. The Guaranteed Loan Funds
Investment Account need only be established if and when the
Borrower is required to invest, or otherwise invests, the
Guaranteed Loan Funds in Government Obligations. Such Letter
Agreement must be executed when the Guaranteed Loan Funds
Investment Account is established. (A fully executed copy of
such Letter Agreement shall be submitted to the Secretary
within thirty days of its execution.) All proceeds and income
derived from such investments shall be returned to the
Guaranteed Loan Funds Account.
All funds in the Guaranteed Loan Funds Account or the
Guaranteed Loan Funds Investment Account must be withdrawn
and disbursed by the Borrower for approved activities by
August 31, 2004. Any funds remaining in either Account after
this date shall be immediately transferred to the Loan
Repayment Account established pursuant to paragraph 6 of this
Contract.
(b) The Borrower shall by the fifteenth day of each month
provide the Secretary with a writ -ten statement showing the
balance of funds in the Guaranteed Loan Funds Account and the
withdrawals from such account during the preceding calendar
month, and a statement identifying the obligations and their
assignments in the Guaranteed Loan Funds Investment Account,
until such Accounts are fully disbursed.
(c) Upon the Secretary giving notice that the Borrower is in
Default under this Contract or the Note, all right, title,
and interest of the Borrower in and to the Guaranteed Loan
Contract for Fixed Rat *te, Entitlement, 9 -31 -02 • 4
Funds and Guaranteed Loan Funds Investment Accounts shall
immediately vest in the Secretary for use in making payment
on the Note, purchase of Government Obligations in accordance
with paragraph 10, or payment of any other obligations of the
Borrower under this Contract or the Fiscal Agency /Trust
Agreements, in each case as elected by the Secretary in his
sole discretion.
2. Payments Due on Note. The Borrower shall pay to the Fiscal
Agent /Trustee, as collection agent for the Note, all amounts
due pursuant to the terms of the Note. In accordance with the
Note and the Fiscal Agency /Trust Agreements, payment shall be
made by 3:00 P.M. (New York City time) on the seventh
Business Day (the "Note Payment Date ") preceding the relevant
Interest Due Date or Principal Due Date (each as defined in
the Note). If any Note Payment Date falls on a day that is
not a Business Day, then the required payment shall be made
on the next Business Day. Payment may be made by check or
wire transfer.
Upon final payment of all amounts due to Holders under the
Note, including any payment made by the Secretary pursuant to
the Guarantee, the Fiscal Agent /Trustee is. required by the
Fiscal Agency /Trust Agreements to return the Note to the
Secretary. Upon final payment to the Secretary of any amounts
due as a result of Guarantee Payments or otherwise due under
this Contract, the Secretary will cancel and return the Note
to the Borrower in discharge of the Borrower's obligations
under the Note.
3. Selection of New Fiscal Agent or Trustee. The Secretary
shall select a new Fiscal Agent or Trustee if'the Fiscal
Agent or Trustee resigns or is removed by the Secretary. The
Borrower hereby consents in advance to any such selection and
to any changes in the Fiscal Agency /Trust Agreements agreed
to by any Fiscal Agent or Trustee and the Secretary, subject
to paragraph 4(d) of this Contract.
4. Payments Due Fiscal Agent or Trustee; Documents to the
Secretary.
(a) The Borrower agrees to pay the Borrower's share, as
determined by the Secretary, of the customary and usual
issuance, underwriting, and other-costs related to the public
offering and future administration of the'Note and the trust
certificates, as approved by the Secretary, including the
cost of reimbursement and /or compensation of the Trustee
pursuant to the Trust Agreement, including Sections 3.11 and
7.01 thereof. In connection with the public offering, such
payment shall either be made by wire transfer to the Trustee
on the day prior to the Public Offering Date or shall be
deducted from the Guaranteed Loan Funds on the Public
Offering Date.
Contract for Fixed Ratqote, Entitlement, 5 -31 -02 • 5
(b) The Borrower shall submit to the Secretary not later
than ten Business Days prior to the Public Offering Date
applicable to the Note, this executed Contract, the executed
Note, and an opinion acceptable to the Secretary from the
Borrower's counsel to the effect that: (i) the governing body
of the Borrower has authorized by resolution or ordinance, in
accordance with applicable State and local law, the issuance
of the Note and the execution of this Contract; (ii) the Note
and this Contract are valid, binding, and enforceable
obligations of the Borrower; (iii) the pledge of funds
pursuant to 24 CFR §570.705(b)(2) and paragraph 5(a) of this
Contract is valid and binding; and (iv) there is no
outstanding litigation that will affect the validity of the
Note or this Contract. In addition, the Borrower shall submit
any other additional documents or opinions specifically
required by this Contract (e.g., paragraph 5(c), or paragraph
15, et sea.), at the time required thereby.
(c) The Borrower agrees to reimburse the Underwriters upon
demand by the Secretary for the Borrower's share, as
determined by the Secretary, of all reasonable out -of- pocket
expenses (including reasonable fees and disbursements of
counsel) incurred in connection with a proposed public
offering, if the Underwriters incur such additional costs for
the public offering because the Borrower withdraws from the
offering within ten Business Days of the Public Offering
Date, or if the Borrower fails for any reason timely to
submit in acceptable form any document required by this
Contract (including paragraph 4(b)) to be submitted before
the Public Offering Date. By execution and delivery of this
Contract to the Secretary, the Borrower hereby expressly
authorizes the Secretary to pay amounts due under this
paragraph from funds pledged under paragraph 5(a) of this
Contract.
(d) The undertakings in paragraphs 3 and 4 of this 'Contract
are expressly subject to the requirement that the Fiscal
Agency /Trust Agreements shall in no event require payment of
fees or charges, reimbursement of expenses, or any
indemnification by the Borrower from any source other than
funds or other security pledged pursuant to paragraphs D (if
applicable), 5, or 15, et seq., of this Contract.
5. Security. The Borrower hereby pledges as security for
repayment of the Note, and such other charges as may be
authorized in this Contract, the following:
(a) All allocations or grants which have been made or for
which the Borrower may become eligible under Section 106 of
the Act, as well as any grants which are or may become
available to the Borrower pursuant to Section 108(q).
Contract for Fixed "Rat*te, Entitlement, 5 -31 -02 •
(b) Program income, as defined at 24 CFR 570.500(a)(or any
successor regulation), directly generated from the use of the
Guaranteed Loan Funds.
(c) Other security as described in paragraph 15, et seq., or
incorporated herein by paragraph D hereof, as applicable.
(d) All proceeds (including insurance and condemnation
proceeds) from any of the foregoing.
(e) All funds or investments in the accounts established
pursuant to paragraphs 1 and 6 of this Contract.
6. Loan Repayment Account.
(a) All amounts pledged pursuant to paragraphs 5(b), 5(c),
and 5(d) of this Contract shall be deposited immediately on
receipt in a separate identifiable custodial account (the
"Loan Repayment Account ") with a financial institution whose
deposits or accounts are Federally insured. The Loan
Repayment Account shall be established and designated as
prescribed in the attached form document entitled "Letter
Agreement for Section 108 Loan Guarantee Program Custodial
Account" (Attachment 1) and shall be maintained for such
pledged funds. The Loan Repayment Account need only be
established if and when the Borrower receives amounts pledged
pursuant to paragraph 5(b), 5(c) or 5(d). Such Letter
Agreement must be executed when the Loan Repayment Account is
established. (A fully executed copy of such Letter Agreement
shall be submitted to the Secretary within thirty days of its
execution.) Borrower shall make withdrawals from said account
only for the purpose of paying interest and principal due on
the Note (including the purchase of Government Obligations in
accordance with paragraph 10 hereof), for payment of any
other obligation of the Borrower under this Contract or the
Fiscal Agency /Trust Agreements, or for the temporary
investment of funds pursuant to this paragraph, until final
payment and discharge of the indebtedness evidenced by the
Note, unless otherwise expressly authorized by the Secretary
in writing. Such temporary investment of funds shall be
required within three Business Days after the balance of
deposited funds exceeds the amount of the Federal deposit
insurance on the Loan Repayment Account. At that time, any
balance of funds in the Loan Repayment Account exceeding such
insurance coverage shall be fully (100 %) and continuously
invested in Government Obligations, as defined in paragraph
10 hereof.
All temporary investments, whether or not required as above,
shall be limited to Government Obligations having maturities
that are consistent with cash requirements for payment of
principal and interest as required under the Note. In no
event shall the maturities of such investments exceed one
Contract for Fixed Ratote, Entitlement, 5 -31 -02 • 7
year. All such investments shall be held in trust for the
benefit of the Secretary by the above financial institution
in an account (the "Loan Repayment Investment Account ") ,
established and designated as prescribed in the attached form
document entitled "Letter Agreement for Section 108 Loan
Guarantee Program Custodial Investment Account" (Attachment
2), which account shall be' maintained for all Government
Obligations purchased with funds from the Loan Repayment
Account. Such Letter Agreement must be executed when the Loan
Repayment Investment Account is established.--.(A fully
executed copy of such Letter Agreement shall be submitted to
the Secretary within thirty days of its execution.) All
proceeds and income derived from such investments shall be
returned to the Loan Repayment Account.
(b) Borrower shall by the fifteenth day of each month,
provide the Secretary with a written statement showing the
balance of funds in the Loan Repayment Account and the
deposits and withdrawals of all funds in such account during
the preceding calendar month and a statement identifying the
obligations and their assignments in the Loan Repayment
Investment Account, for any month in which there are funds in
such Accounts.
(c) Upon the Secretary giving notice that the Borrower is in
Default under this Contract or the Note, all right, title,
and interest of the Borrower in and to the Loan Repayment and
Loan Repayment Investment Accounts shall immediately vest in
the Secretary for use in making payment on the Note, purchase
of Government Obligations in accordance with paragraph 10, or
payment of any other obligation of the Borrower under this
Contract or the Fiscal Agency /Trust Agreements, in each case
as elected by the Secretary in his sole disc_-etion.
7. Use of CDBG or EDI Sunds for Repayment. Any funds available to
the Borrower under Section 106 of the Act (including program
income derived therefrom) are authorized to be used by the
Borrower for payments due on the Note, Optional Redemption (as
defined in the Note), payment of any other obligation of the
Borrower under this Contract or the Fiscal Agency /Trust
Agreements, or the purchase of Government Obligations in
accordance with paragraph 10. Any funds specifically available
to the Borrower for such payments or as a debt service reserve
under an EDI Grant Agreement pursuant to Section 108(q) of the
Act which supports the eligible project(s) and activities
financed by the Note may also be used therefor; any other use of
Section 108(q) funds for such purposes shall require the prior
written approval of the Secretary. Unless otherwise specifically
provided herein or unless otherwise expressly authorized by the
Secretary in writing, the Borrower shall substantially disburse
funds available in the Loan Repayment or the Loan Repayment
Investment Accounts before funds from grants under Section 106
Contract for Fixed Rat *te, Entitlement, 5 -31 -02 • 8
of the Act are withdrawn from the U.S. Treasury for such
purposes.
8. Secretary's Right to Restrict Use of CDBG Funds to Repayment.
Upon a determination by the Secretary that payments required by
paragraph 2 and /or paragraph 4 of this Contract are unlikely to
be made as specified, the Secretary may give the Borrower notice
that the availability to the Borrower of funds pledged under
paragraph 5(a) of this Contract for purposes other than
satisfaction of the pledge is being restricted. This restriction
shall be in an amount estimated by the Secretary to be
sufficient to ensure that the payments referred to in paragraph
2 and /or paragraph 4 hereof are made when due. This restriction
may be given effect by conditioning the restricted amounts to
prohibit disbursement for purposes other than satisfaction of
the pledge at the time such restricted funds are approved as
grants, by limiting the Borrower's ability to draw down or
expend the restricted funds for other purposes, and by
disapproving payment requests submitted with respect to such
grants for purposes other than satisfaction of the pledge.
9. Secretary's Right to Use Pledged Funds for Repayment. The
Secretary may use funds pledged under paragraph 5(a) of this
Contract or funds restricted under grants pursuant to paragraph
8 of this Contract to make any payment required of the Borrower
under paragraph 2 and /or paragraph 4, if such payment has not
been timely made by the Borrower.
10. Defeasance. For purposes of this Contract, the Note shall be
deemed to have been paid (defeased) if there shall have been
deposited with the Trustee either moneys or Government
Obligations (defined below), which in the sole determination of
the Secretary, mature and bear interest at times and in amounts
sufficient, together with any other moneys on deposit with the
Trustee for such purpose, to pay when due the principal and
interest to become due on the Note. The Aggregate Principal
Amount of the Note or any unpaid Principal Amount may be so
defeased, in whole or in part, as of any Interest Due Date, or
any other Business Day acceptable to both HUD and the Borrower.
In accordance with the Note and the Trust Agreement, the
Borrower shall give timely notice and written instructions to
the Secretary and the Trustee concerning any principal amounts
proposed to be defeased, including any Optional Redemptions
proposed, which instructions shall be approved by the Secretary.
If the unpaid Aggregate Principal Amount of the Note guaranteed
pursuant to this Contract shall be defeased and deemed to have
been paid in full, then the Borrower shall be released from all
agreements, covenants, and further obligations under the Note.
"Government Obligation" means a direct obligation of, or any
obligation for which the full and timely payment of principal
and interest is guaranteed by, the United States of America,
including but not limited to, United States Treasury
Contract for Fixed Ratqete, Entitlement, 5 -31 -02 •
Certificates of Indebtedness, Notes and Bonds - State and Local
Government Series or certificates of ownership of the principal
of or interest on direct obligations of, or obligations ,
unconditionally guaranteed by, the United States of America,
which obligations are held in trust by a commercial bank which
is a member of the Federal Reserve System and has capital and
surplus (exclusive of undivided profits) in excess of
$100,000,000.
11. Default.
(a) A Default under the Note and this Contract shall occur
upon failure by the Borrower to:
(i) pay when due an installment of principal or interest
on the Note; or (ii) punctually and properly perform,
observe, and comply with any covenant, agreement, or
condition contained in: (A) this Contract, (B) any
security agreement, deed of trust, mortgage, assignment,
guarantee, or other contract securing payment of
indebtedness evidenced by the Note, or (C) any future
amendments, modifications, restatements -, renewals, or
extensions of any such documents.
(b) The Borrower waives notice of Default and opportunity
for hearing with respect to a Default under paragraph 11(a)
(c) In addition to Defaults under paragraph 11(a), the
Secretary may declare the Note in Default if the Secretary
makes a final decision in accordance with the provisions of
section 111 of the Act and 24 CFR 570.913 (or any successor
provisions), including requirements for reasonable notice and
opportunity for hearing, that the Borrower has failed to
comply substantially with title I of the Act. Notwithstanding
any other provision, following the giving of.such reasonable
notice, the Secretary may, in the Secretary's-..sole discretion
pending the Secretary's final decision, withhold the
guarantee of any or all obligations not yet guaranteed on
behalf of the Borrower under outstanding commitments, and/or
direct the Borrower's financial institution to: refuse to
honor any instruments drawn upon, or withdrawals from, the
Guaranteed Loan Funds Account or the Loan Repayment Account
initiated by the Borrower, and /or refuse to release
obligations and assignments by the Borrower from the
Guaranteed Loan Funds Investment Account or the Loan
Repayment Investment Account.
12. Remedial Actions. Upon a Default or declaration of Default
under this Contract, the Secretary may, in the Secretary's sole
discretion, take any or all of the following remedial actions:
(a) With any funds or security pledged under this Contract, the
Secretary may (i) continue to make payments due on the Note,
Contract for Fixed Rateoe, Entitlement, 5 -31 -02 . 10
(ii) make an acceleration payment with respect to the principal
amount of the Note subject to Optional Redemption as provided in
Section B of the Note, (iii) purchase Government Obligations in
accordance with paragraph 10 of this Contract, (iv) pay any
interest due for late payment as provided in,the Note, this
Contract, or the Fiscal 'Agency /Trust Agreements, (v) pay any
other obligation of the Borrower under this Contract or the
Fiscal Agency /Trust Agreements, and /or (vi) pay any reasonable
expenses incurred by the Secretary or the. Fiscal Agent /Trustee
as result of the Borrower's Default.
(b) The - Secretary may withhold the guarantee of any or all
obligations not yet guaranteed or the disbursement of any or all
grants not yet disbursed in full under outstanding guarantee
commitments or grant approvals for the Borrower under Sections
108 and /or 106 of the Act.
(c) The Secretary may direct the Borrower's financial
institution to: refuse to honor any instruments drawn upon, or
withdrawals from, the Guaranteed Loan Funds Account or the Loan
Repayment Account by the Borrower, and /or refuse to release
obligations and assignments by the Borrower from the Guaranteed
Loan Funds Investment Account or the Loan Repayment Investment
Account; and /or direct the Borrower and /or the Borrower's
financial institution to transfer remaining balances from the
Guaranteed Loan Funds Account to the Loan Repayment Account.
(d) With respect to amounts subject to Optional Redemption, the
Secretary may accelerate the Note.
(e) The Secretary may exercise any other appropriate remedies
or sanctions available by law or regulation applicable to the
assistance provided under this Contract, or may institute any
other action available under law, to recover Guaranteed Loan
Funds or to reimburse the Secretary for any payment under the
Secretary's Guarantee or any reasonable expenses incurred by the
Secretary as a result of the Default.
(f) All notices and submissions provided for hereunder shall be
in writing (including by telex, telecopier or any other form of
facsimile communication) and mailed or sent or delivered, as to
each party hereto, at its address set forth below or at such
other address as shall be designated by such party in a written
notice to the other party hereto.- All such notices and other
communications shall be effective when received as follows: (i)
if sent by hand delivery, upon delivery; (ii) if sent by mail,
upon the earlier of the date of receipt or five Business Days
after deposit in the mail, postage prepaid; (iii) if sent by
telex, upon receipt by the sender of an answer back; and (iv) if
sent by telecopier, upon confirmed receipt. .
Contract for Fixed Rat *te, Entitlement, 5 -31 -02 • 11
The Secretary:
Borrower:
ATTN: Mr. Daniel Trimble
13. Limited Liability. Notwithstanding any other provision of this
Contract, the Fiscal Agency /Trust Agreements.or the Note, any
recovery against the Borrower for any liability for amounts due
pursuant to the Note, the Fiscal Agency /Trust Agreements and
this Contract shall be limited to the source's of security
pledged in paragraphs D, 5, or any Special Conditions of this
Contract, as applicable. Neither the general credit nor the
taxing power of the Borrower, or of the State in which the
Borrower is located, is pledged for any payment due under the
Note, the Contract, or the Fiscal Agency /Trust Agreements..
14. Incorporated Grant Agreement. The Contract and the Note are
hereby incorporated in and made a part of the Grant Agreement
authorized by the Secretary on August 4, 2000 under the Funding
Approval for grant number B- 00 -MC -06 -0546 to the Borrower. In
carrying out activities with the Guaranteed Lcan Funds
hereunder, the Borrower agrees to comply with the Act and 24 CFR
Part 570, as provided in Subpart M thereof.
15. Special Conditions and Modifications:
(a) Paragraph 5(c) of the Contract is amended by deleting the
paragraph as written in its entirety and substituting
therefor the following:
"(c) Other security, including, but not limited to,
Borrower's pledge of General Fund reserves of the City
of Newport Beach in support of all obligations of the
Borrower under the Note and this Contract, as
described in the Borrower's Resolution No.
dated authorizing the issuance of the
Note, which Resolution is attached as Attachment 3 to
the Contract (the 'Resolution')."
Contract for Fixed Rate,te, Entitlement, 5 -31 -02 • 12
(b) Guaranteed Loan Funds shall be used by the Borrower to
finance public improvements pursuant to 24 CFR 570.703(1)
(c) The Borrower shall deliver to the Secretary
contemporaneously with the delivery of this Contract and
the Note an opinion of Borrower's counsel, addressed to
the Secretary and on its letterhead, that the Borrower's
pledge of General Fund reserves referenced in the
Resolution described in paragraph 15(a) is a valid and
legally binding obligation of the Borrower.
(d) (i) The Borrower acknowledges and agrees that the
Secretary's guarantee of the Note is made:in reliance upon
the availability of grants pledged pursuant to paragraph
5(a) (individually, a "Pledged Grant" and, collectively,
the "Pledged Grants ") in any Federal fiscal year
subsequent to the Federal fiscal year ending September 30,
2002 to: (A) pay when due the payments to become due on
the Note, or (B) defease (or, if permitted, prepay) the
full amount outstanding on the Note. The Borrower further
acknowledges and agrees that if the Secretary (in the
Secretary's sole discretion) determines that Pledged
Grants are unlikely to be available for either of such
purposes, such determination shall be a permissible basis
for any of the actions specified in paragraphs 15(d)(ii)
and (iii) below (without notice or hearing, which the
Borrower expressly waives.
(ii) Upon written notice from the Secretary to the
Borrower at the address specified in paragraph 12(f)
above that the Secretary (in the Secretary's sole
discretion) has determined that Pledged Grants are
unlikely to be available for either of the purposes
specified in (A) and (B) of paragraph 15(d)(i) above
(such notice being hereinafter referred to as the
"Notice of Impaired Security "), the Secretary may limit
the availability of Pledged Grants by withholding
amounts at the time a Pledged Grant is approved or by
disapproving payment requests (drawdown) submitted with
respect to Pledged Grants.
(iii) If after 60 days from the Notice of Impaired
Security the Secretary (in the Secretary's sole
discretion) determines that Pledged Grants are still
unlikely to be available for either of the purposes
specified in (A) and (B) of paragraph 15(d)(i) above,
the Secretary may declare the Note in Default and
exercise any and all remedies available under paragraph
12. This paragraph 15(d)(iii) shall not affect the
right of the Secretary to declare the Note and /or this
Contract in Default pursuant to paragraph 11 and to
exercise in connection therewith any and all remedies
available under paragraph 12.
Contract for Fixed Rate te, Entitlement, 5-31 -02 •. 13
(iv) All notices and submissions provided for hereunder
shall be submitted as directed in paragraph 12(f)
above.
(e) If any one or more of the covenants, agreements,
provisions, or terms of this Contract shall be for any
reason whatsoever held invalid, then such covenants,.
agreements, provisions or terms shall be deemed
severable from the remaining covenants.- agreements,
provisions or terms of this Contract and shall in no
way affect the validity or enforceability of the other
provisions of this Contract or of the Note or the
rights of the Holder thereof.
[Rest of Page Intentionally Left Blank]
Contract for Fixed Rat *te, Entitlement, 5 -31 -02 . 14
IN WITNESS WHEREOF, the undersigned, as authorized officials on
behalf of the Borrower or the Secretary, have executed this Contract
for Loan Guarantee Assistance, which shall be effective upon,
delivery of the Note and Guarantee as of the Public Offering Date
(except that paragraph 4 hereof shall be effective when this
Contract is executed on behalf of the Borrower and delivered to the
Secretary).
City of Newport:Beach, California
BORROWER
ATTEST:
(Signature)
BY:
(Signature)
(Name) (Name)
(Title) (Title)
(Date)
SECRETARY OF HOUSING AND URBAN
DEVELOPMENT
(Signature)
Nelson R. Bregon
(Name)
Deputy Assistant Secretary for
Grant Programs
(Title)
(Date)
ATTACHMENT 1
it —. -�Q - r.• aIa is •
Name of Institution (and Branch)
Street
city
1 al•: :�Yula\1 • i •. 1\, : \N 1P:: \ / all • Sul a\I
DATE
[] This account is established for funds received by the Borrower under
note(s) guaranteed by the United States Department of Housing and Urban
Development (HUD) under the Section 108 Loan Guarantee Program.
(Guaranteed Loan Funds Account.)
[] This account is established for repayment of the note guaranteed by
HUD under the Section 108 Loan Guarantee Program. (Loan Repayment'
Account).
You are hereby authorized and requested to establish a custodial account
to be specifically designated
Trustee of United States Department of Housing and Urban Development."
All deposits made in such account shall be subject to withdrawal therefrom by
the Borrower named below, and shall also be subject to withdrawal therefrom by
HUD. No agent of the Borrower shall be authorized to withdraw.funds from the
account. You are also authorized to pay HUD at any time upon its written
demand, which need not mane a specific amount, the entire amount in such
account subject only to notice requirements contained in applicable regulations
governing this institution, but in no event to exceed seven business days.
You are further authorized upon the request of HUD to refuse to honor any
instrument drawn upon or withdrawals from such account by parties other than
HUD and to change the name of the aforesaid account to the "United States
Department of Housing and Urban Development." In no instance shall the funds
in the Custodial Account be used to offset funds which may have been advanced
to, or on behalf of, the Borrower by the custodian institution..
This letter is submitted to you in
duplicate copy of the certificate below,
account, .so that we may present the copy
Name of Borrower
By (Signature)
Title
0
duplicate. Please execute the
acknowledging the existence of such
signed by you to HUD.
The undersigned institution certifies to the United States Department of
Housing and Urban Development (HUD) that the account identified is in existence
in this institution under account number and agrees
with the Borrower named above and HUD to honor demands on such account in the -
manner provided in the above letter, subject only to notice requirements
contained in applicable regulations governing this institution, but in no event
to exceed seven business days. The undersigned institution further agrees upon
the request of HUD to refuse to honor any instruments drawn upon or withdrawals
from such account by parties other than HUD and to change the name of the
aforesaid account to "United States Department of Housing and Urban
Development." .In no instance shall the funds in the Custodial Account be used
to offset funds which may have been advanced to, or on behalf of, the Borrower
by the custodian institution. Deposits in this institution are insured by the
Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance
Corporation, or the National Credit Union Administration.
Name of Institution By
Date
E
ATTACHMERr 2
U. S. DEPARTMENT OF HOUSING AND URBAN
OW=. 0 C •",t1•• i 11
Name of Institution (and Branch)
Street
ty
0
DATE
[] This account is established to hold obligations and their assignments, such
obligations having been purchased with funds from the Guaranteed Loan Funds
Account. (Guaranteed Loan Funds.Investment Account.)
[J This account is established to hold obligations and their assignments, such
obligations having been purchased with funds from the Loan Repayment
Account. (Loan Repayment Investment Account.)
You are hereby authorized and requested to hold obligations and
assignments of those obligations in trust for the United States Department of
Housing and Urban Development (HUD).in an account specifically designated
Trustee of United States Department of Housing and Urban Development."
All obligations and assignments shall be subject to release to the Borrower
named below, and shall also be subject to release to HUD. No agent of the
Borrower shall be authorized to release the obligations or assignments. You
are also authorized to release the obligations and assignments to HUD at any
time upon its written demand, which need not name specific obligations and
assignments, all obligations and assignments being held in such account subject
only to any notice requirements contained in applicable regulations governing
this institution, but in no event to exceed seven business days.
You are further authorized upon the request of HUD to refuse to honor any
request for release of the obligations and assignments from such account by
parties other than HUD and to change the name of the aforesaid account to the
United States Department of Housing and Urban Development." In no instance
shall the obligations in the account be used to offset funds which may have
been advanced to, or on behalf of, the Borrower by the custodian institution.
a
This letter is submitted to you in duplicate. Please execute the
duplicate copy of the certificate below, acknowledging the existence of such
account, so that we may present the copy signed by you to HUD.
Name of Borrower
By (Signature.
The undersigned institution certifies to the United States Department of
Housing and Urban Development (HUD) that the account identified is in existence
in this institution under account number , and agrees with
the Borrower named above and HUD to honor demands release on such account in
the manner provided in the above letter, subject only to any notice
requirements contained in applicable regulations governing this institution,
but in no event to exceed seven business days. The undersigned institution
further agrees upon the request of HUD to refuse to honor any request for
release of the obligations and assignments from such account by parties other
than HUD and to change the name of the aforesaid account to "United States
Department of Housing and Urban Development." In no instance shall the
obligations in the account be used to offset funds which may have been advanced
to, or on behalf of, the Borrower by the custodian institution. Deposits in
this institution are insured by the Federal Deposit Insurance Corporation, the
Federal Savings and Loan Insurance Corporation, or the National Credit Union
Administration..
Name of Institution By
Title Date
ATTACHMENT 3
RESOLUTION
K.
by and between
THE SECRETARY OF THE UNITED STATES DEPARTMENT
OF HOUSING AND URBAN DEVELOPMENT,
as sponsor of a Trust
CHEMICAL BANK,
as Trustee
Dated as of January 1, 1995
BiPDG 05IM1 Muh U. Mg
Execution
0
TABLE OF CONTENTS
Ll
i • -
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
CREATION OF TRVST 11
SECTION 2.01. Creation of Trust . . . . . . . . 11
SECTION 2.02. Acceptance by Trustee . . . . 12
SECTION 2.03. Authentication of Initial
Certificates . . . . . . . . . . . . . . . . . . . 12
ARTICLE III
ADMINISTRATION OF NOTES
. . . . . . . . .
. . 13
SECTION
SECTION
3.01.
Appointment ;f .
13
SECTION
3.02.
Modification of Notes
14
SECTION
3.03.
Optional Redemption and
Acceleration
of Notes . . . . . .
14
SECTION
3.04.
Guaranty . .
is
SECTION
3.05.
Notification of Amounts Due . . . . .
. . 15
SECTION
3.06.
Collection of Note Payments;
Certificate Account . . . . . . . ...
. . 16
SECTION
3.07.
Defeasance Account . . . .
. . 19
SECTION
3.08.
Trustee to Xet as Collection
Agent
. . . . . .
. . 22
SECTION
3.09.
Permitted Charges Against the
Certificate Account . . .
. . 23
SECTION
3.10.
Trustee to Cooperate; Release and
Assignment of Notes . . . . . . . . .
23
SECTION
3.11.
Reimbursement of Trustee . . . . . .
. . 24
ARTICLE IV
PAYMENTS TO THE CERTIFICATEHOLDERS . . . . . . . . . 26
SECTION 4.01. Payments and Distributions . . . . . . . 26
SECTION 4.02. Statements to the
Certificateholders
and to the Secretary . . . . . . . . . 28
SECTION 4.03. Paying Agents . . . . . . . . . . . . . . 29
ARTICLE V
THE NOTES AND THE CERTIFICATES . . . . . . . . . 30
SECTION 5.01.. Certificate Title and Terms;
Issuance
in Series . . . . . . 30
SECTION 5.02. Certificates: Execution,
Authentication
and Delivery . . . . 31
SECTION 5.03: Registration of Transfers and
Exchanges
of Certificates; Denominations . . . . . 32
SECTION 5.04. Mutilated, Destroyed, Lost or
Stole=
Certificates . . . . . . . . . . . . . . 39
SECTION 5.05. Persons Deemed Owners . . . . . . 40
SECTION 5.06. Maintenance.of Office or Agency . . . . . 40
ARTICLE VI
THE CERTIFICATE GUARANTEE . . . . . . . . . . . . . . 41
SECTION 6.01. Certificate Guarantee . . . . 41
SECTION 6.02. Execution and Delivery of
Certificate
Guarantees. . . . ... . . . . . . . . . 43
ARTICLE VII
RIGHTS AND DUTIES OF BORROWERS . . . . . . 44
SECTION 7.01 Compensation and Indemnification
of
Trustee . . . . . . . . . . . . . . . . . 44
CONCERNING THE TRUSTEE
46
SECTION 8.01.
Duties of Trustee
46
SECTION 8.02.'
Certain Matters Affecting
the
Trustee
. .
. . . . .
48
SECTION 8.03.
Trustee Not Liable
for
Certificates
or Notes
. . . . .
50
SECTION 8.04.
Eligibility Requirements
for
Trustee .
. . . . . .
51
SECTION 8.05.
Resignation and Removal of
the
Trustee
. . . .
51
SECTION 8.06.
Merger or Consolidation
of
Trustee.
. . . . . . . . . . . . . .
. . . . . . .
53
swncnos.iv�u�omoo�oaaucsu.�x� ii
0
0
° SECTION
8.07.
Trustee May Own Certificates . . .
. . . 54
SECTION
8.08.
Fidelity Bond or-Insurance . . . .
. . . 54
ARTICLE IS
TERMINATION OF TRUST AND FnML PAYMENT OF CERTIFICATES
. . . 54
SECTION
9.01.
Termination . . . . . .
. . . 54
SECTION
9.02.
Final Payment of Certificates . . ..
. . . .55
awxnos.unisxi000p�s�e it t� iii
swncnosasmsxi000arao3 w& ii, im in
ARTICLE %
MISCELLANEOUS
PRMSIONS, . . . . . ..
56
SECTION
10.01..
Amendment . . . . .
56
SECTION
10.02.
Limit-olticn an Eights of
Certiricateholders . . . . . . . .
57
SECTION
10.03.
Inspection of Documents by
Certificateholders . . . . . . . . . . .
se
SECTION
10.04.
Governing Law . . . . . . . . . . .
59
SECTION
10.05.
Notices
59
SECTION
10.06.
Severability of Provisions
60
SECTION
10.07.
Counterparts . . . . . . . . . . . . . .
60
EXHIBIT
A'-
Form of Certificate
EXHIBIT
8 -
Form of Supplement to Trust Agreement
EXHIBIT
C -
Form of Notice of Missed Borrower Payment
EXHIBIT
D -
Form of Notice for Guarantee Payment
swncnosasmsxi000arao3 w& ii, im in
This TRUST AGREMIEQT is made and entered into as of this 1st
day of January, 1995, by and between the SECRETARY OF THS M=ED
STATES DEPARTMENT OF Housm AND IIRR= DEPBLomm (the
'Secretary'), as sponsor of a Trust (as defined herein) created on
behalf of units of general local government andpublic agencies
designated by such units of general local government (the
"Borrowers'), and CHEMICAL BAN&, a New York banking corporation, as
Trustee (the "Trustee'). with respect to the issuance of any
Series of certificates hereunder, this Trust Agreement, together
with the Supplement to the Trust Agreement (as defined herein)
executed with respect to such specific Series, shall hereinafter be
referred to as the 'Agreement."
ARTICLE 2
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the
following meanings:
Accel.ratio, Event: Any default in the payment of principal
or interest when due on a Note by.a Borrower or other event, with
respect to which the Secretary elects to make an acceleration
payment under the Note and the corresponding Contract.
Acczlemar.icm on or after the occurrence of an
Acceleration Event with respect to a Note, the payment by the
Secretary of an amount equal to the aggregate unpaid Principal
Amount thereof together with accrued and unpaid interest thereon to
the Interest Due Date as of which the Acceleration Payment is made.
&=- The Housing and community Development Act of 1974, as
amended, 42 U.S.C.. IS 5301 et seq.
Ae=eemant_• This Trust Agreement and all amendments and
supplements hereto.
Au 112'ri d MUIR= When used with respect to the Trustee,
means the chairman or any vice chairman of the board of directors,
the chairman or any vice chairman of the executive committee of the
board of directors, the chairman of the trust committee, the
president, any vice president or assistant vice president, the
secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any senior trust
officer, trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any
of the above designated officers and also means, with respect to a
particular corporate trust matter, any. other officer to whom such
Mush 11.1999 2
matter is referred because of his knowledge of and familiarity with
the particular subject.
A +tho - _d official: f When used with respect to HOD'.. _ the
Secretary and any other official of MM who at the time sball have
been duly authorized to act on behalf of the Secretary.
Bpr, f; ia1 Owners: The actual purchasers of interests in the
Certificates, whose ownership interests are recorded through the
book -entry system of DTC.
Borrower: Any unit of general local government or a public
agency designated by such unit of general local government that has
issued debt obligations eligible for-pooling and inclusion in a
trust and against which trust Certificates guaranteed by the
Secretary may be issued pursuant to Section 108.
Bus ne�$g Day: A day on which banking institutions in New York
City are
not required
or authorized
to be
closed and on which
the
Federal
Reserve Bank
and the New
York
Stock Exchange are
not
closed.
cede & Co_, The nominee name of DTC.
ri -;f• -a Any one of the certificates of participation
with respect to a Trust, to be issued in one or more Series,
executed, issued and authenticated in global or definitive form
pursuant
hereto,
in substantially the
form attached
hereto as
Exhibit A
and specifying
the applicable
Maturity Date
(Principal
B MMOS.UnI470MOOGNM Math 11.1999 3
0
0
Due Date) , Pass - Through Interest Rate and the aggregate of all
Principal Amounts due on such Principal Due Date.
rt; f; a A ...n,t ; With respect to an; • . Series and related
Trust; the account created and maintained pursuant to Section 3.06.
certificate Q r.,ntee: Any guarantee of MM endorsed an a
Certificate authenticated and delivered pursuant to this Agreement
and the guarantee set forth in Section 6.01.
=rtifleatA R $ st r: The Register maintained by the Trustee
Pursuant to Section 5.03.
cartif cate tee': With respect to any Certificate, a. Person
who is a beneficial owner thereof.
Certificat-eholAer. The Person in whose name a Certificate is
'registered in the Certificate Register.
contmact. Any Contract for Loan Guarantee Assistance,
including any amendments, entered into between a Borrower and the
Secretary providing for the issuance of one or more Notes and their
related Guaranty by such Borrower and the Secretary, respectively.
Cox-noratp Truct Office: The office of the Trustee's Corporate
Trustee Administration at Chemical Bank, which, at the date of the
execution of
this Agreement, is
located at 450 West
33rd Street,
15th Floor,
New York, New York
10001 -2697, or the
office of a
trustee.
=: The Depository Trust Company, a securities depository
for the Certificates, or its nominee, Cede & Co.
8WDVMLStflCmf000l3/M MU* 11.190 4
Date of Tasuancoh.
The' date of
issuance stated on
the
Certificates of a Series,
which shall
be the date on which
the
Trust to which such Series relates is created by the delivery to
the Trustee of Notes (together with any necessary endorsements
thereon) and the,Guaranty relating to such Notes, and which shall
also be the date of issuance of the Notes comprising such Trust.
Def asap An •ni: With respect to any Principal Due Date
and related Principal Amount of any Note, any account created and
maintained pursuant to Section 3.07.
Defin + rri =,os; Definitive, fully registered
Certificates issued in accordance with Section 5.03 herein.
DPpository Part; ;tenant: A broker, dealer, bank or other
financial institution or other Person for which, from time to time,
DTC effects book -entry transfers and pledges of securities
deposited with DTC.
Director.
Financial Management Division: Within HDD, the
Director of the Financial Management Division, Office of the
Assistant Secretary for Community Planning and Development, and any
other official of HM who at the time shall have been duly
authorized to act on behalf of such Director.
W atribul -irn Dare: With respect to a Series, each February 1
or August 1 as of which Note payments are due, or, if any such day
is not a Business Day, the next succeeding Business Day.
3WDams.UnICMMMGWW Maft ii. M9 5
Fm Account; With respect to any trust, any account created
and maintained pursuant to Section 7.01.
Fractional IIna+ a n_ ros : The fractional. undivided
interest in a portion of-the Trust evidenced by a Certificate and
calculated by dividing the original Principal Amount by the
aggregate Principal Amounts due on the Notes on the principal Due
Date (Maturity Date) stated on the face of the Certificate as of
the
Date of
Issuance. For purposes of this definition,
the portion
of
the Trust
in which a Certificateholder has a
fractional
undivided interest consists
of all Principal
Amounts
of the Notes
due on the Principal Due
Date set forth
an the
face of the
Certificate, the Guaranty relating to all such Principal Amounts
and the Certificate Account for each such Series.
GO-Vernment Ob7;cation: A direct obligation of, or any
obligation for which the full and timely payment of principal and
interest is guaranteed by, the United states of America, including
but not limited to, United States Treasury Certificates of
Indebtedness, Notes and Bonds - state and Local Government Series,,
or certificates of ownership of the principal of or interest on
direct obligations of, or obligations unconditionally guaranteed
by. the United States of America.
ftarantee L-g= nt: Any
payment
on a Note
or Certificate made
by the Secretary on behalf
of the
Borrower,
whether made from
S MONS.LS/ 14701000t)MM Mach 11, IM 6
security provided by the Borrower or from funds provided by the
secretary.
Ptararto: with respect to all Notes held in a Trust, the
related Guaranty, pursuant to which the Secretary guarantees the
due and timely payment of the principal of and interest on all such
Notes.
841AwZ: The Person, initially the Trustee, in whose name a
Note is registered.
EM: The U.S. Department'of Housing and Urban Development.
In me D„ Da e: with respect to any Note, February 1 and
August 1 of each year.
Matuy -its, g -. The stated maturity date of a Certificate,
which will also be the Principal Due Date of certain Principal
Amounts due on the Notes to which such Certificate= relates, and
with respect to any prepaid Principal Amounts, the date as of which
such Principal Amounts are prepaid. If any Maturity Date is not a
Business Day, then payments payable on such Maturity Date shall be
made on the next Business Day.
Note: Any note issued by a Borrower, held by the Trustee on
behalf of the Certificateholder(s)• of a given. Series, and
guaranteed by tba secretary pursuant to Section 108, which is
subject to this Agreement.
Note Payment Date; with respect to any Note, the date that is
seven Business Days prior to each W Interest .Due Date, on which
BTA)U s.MIMOooureosbbich ii. t49 7
0
interest accrued through such Interest Due Date is payable by the
Borrower, or (ii) Principal Due Date. If any Note Payment Date is
not a Business Day, then payments payable on such Note Payment Dz�..e
shall be made on the next Business Day.
Wnien of ,nenl; A written opinion of counsel for the
Secretary. who may be, but need not be, an employee of MM.
�tienai Red= ;=, The full or partial prepayment of •a
Principal Amount due on a Note by a Borrower in accordance with the
optional redemption provisions (if any) of such Note, such optional
redemption provisions to provide, among other things, that such an
Optional Redemption or the related prepayment, as applicable, (i)
shall be made only as of any Interest Due Date occurring on or
after a specified date that is at least ten years from the date of
issuance of the related Note, (ii) must be received in full by the
Trustee by wire transfer of immediately available funds to the
Certificate Account on the related Note Payment Date, and (iii)
must be accompanied by an identification.of the Borrower by mama,
the MM- assigned Note number and such other information as the
Secretary or the Trustee may specify.
Original Principal tM=Mt; The original principal amount
stated on the Certificate, which shall be the amount represented by
the Fractional Undivided Interest of such Certificate (or of the
original Certificate from which such Certificate is derived) in the
aggregate unpaid Principal Amounts due on a specific Principal Due
swDC1105.73/13MOODUAM MW* 11. 19ff s
Date (Maturity Date) as of the Date of Issuance and until the first
payment of principal has been made thereon, but does not reflect
such amount thereafter.
Pass - Through Tnterest a With zspect to each of the
Certificates of a.particular Series, the annual rate of interest
payable on the Principal Amounts -of the Notes to which such
Certificate relates, as specified on the face of such Certificate,
calculated on the basis. of a year of 36o days, consisting of twelve
30-day months.
person: Any individual, corporation, partnership, joint
venture, association, joint -stock company, trust, unincorporated
organization or government, or any agency or political subdivision
thereof.
.Principal Ame m : Any principal amount of a Note due on a
Principal Due Date.
Principal nLe Date: With respect to any Note, each August 1
as of which a Principal Amount of such Note is due.
8ecror8 nate: With respect to a Series, the Business Day
immediately preceding a Distribution Date.
z a : The Secretary of MZ or his authorized designee.
seetien loss Section 106 of Title 1 of the Act, as amended.
,cm: All Certificates designated to be of the same series
on the face thereof that are issued pursuant to this Agreement and
BwDC1105.15/11s70OW43AWMndt11. 1999 9
evidence, in the aggregate, the entire beneficial interest of a
Trust created pursuant to this Agreement.
silmnlefflant to + +sxr nom: The written agreement between
the _Secretary and the Trustee, substantially in the form of
Exhibit
B
hereto, whereby Trust
assets
are delivered
to the
Trustee,
as
provided in Section
2.01, and
the Trustee is directed
to issue the Certificates of the related Series to which such Trust
relates, as provided in Section 2.03.
Trust.. The corpus of a trust
bald by
the Trustee
in trust
Pursuant to this Agreement
for the
benefit
of the
Certificateholders of a particular
Series, consisting of
W the
Notes relating to such series (together with any necessary
endorsements thereon) delivered to the Trustee, (ii) the Guaranty
relating to such Notes and (iii) the Certificate Account relating
to such Series.
T"Im : Chemical Sank, a banking corporation organized and
existing under the laws of the State of New York, or its successor
in interest, or any successor trustee appointed as herein provided.
ITnderwri rs: The underwriters identified as such in the
Underwriting Agreement.
Ond rwr4 4 n A=e n : The written agreement between the
Secretary and one or more purchasers of the Certificates of a
particular Series.
BWDWQS.MICXVOW45AW slush 11.1999 10
euEMON OF TRUST
SBCTZON 2.01. Croa_;on of Trn . (a) From time to time
following the execution and delivery hereof, the Secretary, acting
in its capacity as sponsor of a Trust created on behalf of the
Borrowers, will arrange for the delivery,to the Trustee of one or
more Notes that have been issued by such Borrowers, such Notes to
be held by the Trustee as provided herein for the benefit of the
Certificateholders of a particular Series to be issued hereunder.
The delivery of such Notes will be made pursuant to a Supplement to
the Trust Agreement on the Date of Issuance. In connection with
the delivery of the Notes in respect of any Trust, the Secretary
will also arrange for the delivery to the Trustee of the Guaranty
relating to such Notes, duly executed by the Secretary. Upon such
delivery to the Trustee, the Notes so delivered, together with the
related Guaranty and the Certificate Account created for such
Series, will constitute the Trust.
(b) Each of the Borrower's Notes shall be in the form of a
fully registered note, registered in the name of the Holder. Each
Note will contain one or more Principal Due Dates and corresponding
Principal
Amounts and
interest
rates
and may
contain
Optional
Redemption
provisions
relating
to one
or more
of such
Principal
it, Lear 11
Amounts. Each Note shall be in the aggregate amount of the sum of
the Principal Amounts stated therein.
SEC=CN 2.02. &aCgZance 2n±= . Upon its receipt of the
Trust assets as provided in .Section 2. 01, the Trustee will
ac)mowledge receipt of such assets delivered to it I as Trustee
hereunder, and will hold such assets in trust, upon the trusts set
forth herein, for the use and benefit of the Certificateholders of
the Certificates of the related Series, all in accordance with the
terms and conditions
of this Agreement; prrvided,
however, that
the
Trustee shall not be
responsible or held
liable for reviewing
the
Trust assets or
verifying
the contents
thereof.
Not less thaw
two (2)
Business Days
(or such shorter period as
the Secretary and the Trustee shall agree upon) before any Date of
Issuance, the Secretary shall deliver written instructions
directing the Trustee to distribute any amount received from the
Underwriters on such Date of Issuance and payable to Borrowers in
accordance with the terms set forth therein, together with any
other written instructions with respect to the distribution of
funds on such Date of Issuance.
SECTMCK 2.03. kutb nti at on mf Initial Oprol-ifiealwoft. The
Trustee agrees that, concurrently with its receipt of the Trust
assets, the Supplement to the Trust Agreement relating thereto, and
such opinions of Counsel as the Trustee may reasonably request, it
will cause to be executed and authenticated, -on behalf of the
swncrms.:mumeo OAM Moft ii. iow 12
Secretary in accordance with Section S. 02, and delivered to or upon
the order of the Underwriters, in exchange for such Trust assets,
Certificates of a designated and previously unissued Series in
denominations authorized by this Agreement in the aggregate
evidencing the entire beneficial ownership of the Trust so created.
A=CLB =
.,,,..:r _ter =.: y . , �• 4
SECTION 3.01. g=intment of Trustee. In consideration of
the Secretary's Guaranty of the Notes, and the Secretary's
execution of the various Certificate Guarantees hereunder, the
Secretary hereby appoints the Trustee to administer the Notes and
Certificates in accordance with the express provisions of this
Agreement but retains with respect to the Notes full power and
authority, acting alone, to do any and all things in connection
with such administration that he may deem necessary or desirable.
The Secretary retains the sole and exclusive right to take action
and assert claims with respect to the Notes. Without limiting the
generality of the foregoing, the secretary may execute and deliver,
on behalf of the Trustee and the Certificateholders, any and all
instruments of satisfaction or cancellation, or of partial or full
release
or
discharge
and
all other
comparable instruments, with
respect
to
the Notes.
The
Trustee shall
furnish the Secretary with
BWDMOS.M1470MOD 3lE'i65 hUXh IL IM 13
any documents reasonably requested which are necessary or
appropriate to enable the Secretary to carry out the Secretary's
powers hereunder.
SECTION 3.02. Modi fication of Notes. Any term of any Note
may be modified by such amendments as may be agreed upon from time
to time
by the Secretary and the
Borrower under such Note. No
such
change
in the terms of any
Note shall alter or affect
the
Secretary's Guaranty of each Note on the basis of the original
terms thereof.
If so provided in the applicable Note (subject to the provisions
set forth herein and in such Notes) certain Principal Amounts of
the Notes may be prepayable in whole or in part at the option of
the Borrower as of any Interest
Due Date on
or
after the initial
date for optional Redemption as
specified in
the
related Note. If
no initial date for Optional
Redemption
is
indicated in the
applicable Note, no Principal Amount stated therein for such Note
will be payable prior to the Note Payment Date preceding the
related Principal Due Date. In order to elect an optional
Redemption of a prepayable Principal Amount, the Borrower shall
give notice of its intention to make a.prepayment of principal to
the Trustee not less than sixty (60) days nor more than ninety (90)
days prior
to the
Interest Due
Date as of
which the
Borrower
intends to
make such
prepayment.
The Trustee
shall send
a copy of
RWDCW.1 147W0i1 QWW March 11. L999 14
the Borrower's notice to the Secretary to the attention of the
Director, Financial Management Division. Notwithstanding anything
to the contrary contained in any such Borrower's notice,.-the
Trustee shall apply any payments received in respect of permitted
Optieaai -Redemptions to outstanding Principal Amounts of the
related Note in inverse chronological order, commencing with the
latest Principal Due Date.
Pursuant to any Note and the corresponding Contract, the
Secretary has the right on or after the occurrence of an
Acceleration Event, to make an Acceleration Payment as, of any
Interest Due Date on or after the earliest date for acceleration.
specified in
the Note. If
the Secretary
elects
an
acceleration,
the Secretary
shall deliver
notice to the
Trustee
on
or before the
Note Payment Date immediately preceding the Interest Due Date
selected for acceleration, and the Secretary shall make the
Acceleration Payment to the Trustee by deposit of the Acceleration
Payment in the Certificate Account on or before the Distribution
Date corresponding to such Interest Due Date.
SECTION 3.04. may. Pursuant to each Guaranty, the
Secretary shall unconditionally guarantee the timely payment of the
principal of and interest on the -Notes in the Trust to which such
Guaranty relates.
SSCTICK 3.05. Notification of AmeLntS Me. Within one (1)
month after the Date of Issuance, the Trustee shall prepare and
Bw12Gm5.15A147010 OOOf W Moen 21.1999 15
provide to each Borrower, with a copy to the Secretary, a written
schedule of total principal and interest due on the Notes of. -such
Borrower for each Note Payment Date. One (1) month before each
Note Payment Date, the Trustee shall provide each Borrower written
payment instructions with respect to the payment due on such Note
Payment Date.
SECTION 3.06. Coll rt +en of Note Payznta. Ce+* +f +en *e
Account. The Trustee shall receive the payments due on the Notes,
including payments in respect of any optional Redemptions, and
deposit such payments into the certificate Account as provided in
this Section 3.06. Each Borrower shall make payments directly to
the Trustee*by 3:00 P.M. (New York City time) on the Note Payment
Date. No later than 1:00 P.M. (New York city time) on the sixth
Business Day next preceding
each Distribution
Date,
the Trustee
shall determine whether all
payments required
to be
made on the
Notes have been duly received from each Borrower. If such payments
have not been received, the Trustee shall notify the Secretary by
a telephone call to the office of the Director, Financial
Management Division, that the Secretary may be required to make one
or more Guaranty payments; confirmed in writing by telex or
teleccpy in the form attached hereto as Exhibit C, including notice
of the amount of.each such payment. I£ a payment required to be
made by a Borrower an a Note has not- been duly received by the
Trustee by the close of business on the third Business Day next
swDCrmisnsaowoow=mu* u. mg 16
preceding such Distribution Date, the Trustee shall notify the
Secretary, by a telephone call to the office of the Director,
Financial Management Division, confirmed in writing by telex or
telecopy; in the form attached hereto as Exhibit D, that the
Secretary is required to
make
one or more Guaranty
payments,
including notice of the amount
of
each such payment. The
Secretary
shall make any required Guaranty payment directly into the
Certificate Account by 10 :00 A.M. on such Distribution Date: Such
payments made into a Certificate Account by the Secretary pursuant
to a Guaranty shall
be made by wire
transfer -of
immediately
available Federal
funds directly into such
account or
by a check
Payable in immediately available Federal funds, if the amount being
Paid is less than $S,000.
For each Series, the Trustee shall establish and maintain, for
the benefit of the Certificateholders of such Series (subject to
Section 3.09(11)), a separate non - interest bearing trust account (a
'Certificate Account ") into which the Trustee shall deposit as
received the following payments and collections received by it in
respect of principal of and interest on the Notes comprising the
Trust to which such Series relates:
U) All payments of interest on such Notes,
including those made by the Borrower, those made with funds
transferred by the Trustee from the Defeasance Account to the
maen it. Im 17
Certificate Account, and those made.by the Secretary pursuant
to a Guaranty; and
(ii) All principal payments on such Notes, including
" those made by the Borrower, those made with funds transferred
by the Trustee from the Defeasance Account to the Certificate
Account, and those made by the Secretary pursuant to a
Guaranty, and
(iii) All payments in respect of Optional Redemptions
and Acceleration Payments.
The foregoing requirements for deposit into each Certificate
Account shall be exclusive.
The Secretary and the Trustee shall not be required to deposit
and shall not deposit into the certificate Account any payment
received from a Borrower on account of an Optional Redemption
unless such payment conforms to all of the requirements specified
herein and in the related Note for an Optional Redemption;
provided. however, that the receipt of any nonconforming payment
will not in any way reduce the obligation of the Secretary under
the related Guaranty. Unless otherwise specifically directed by
the Secretary, the Trustee. shall promptly return any such
nonconforming payment to the applicable Borrower. Any payments
received from a Borrower that were previously covered by payments
made by the
Secretary under
the Guaranty (including late
payments
of interest
and principal)
and any payments received
from a
BVDMWMnIMVWGMM Mift 11. IM 18
'Borrower after an Acceleration Payment has been made with respect
to the related Note will be deposited by the Trustee into.. the
Certificate Account upon :receipt thereof, and such payments will be
promptly transmitted to the secretary.
SECTION 3.07. T)Pf asan- A +n . Any Borrower may defease
the entire unpaid aggregate Principal Amount of a Note, or the
entire unpaid Principal Amount due on a Principal Due Date, at any
time, subject to the corresponding contract and this Agreement.
For each Note or Principal Amount thereof that the related Borrower
elects to de£ease, the Borrower shall establish and maintain with
the Trustee a trust account (a •De£easance Account"), separate and
apart from all other accounts of such Borrower and the Trustee.
The Borrower shall irrevocably deposit into such account either
moneys ar Government Obligations that, in the sole discretion of
the Secretary, mature and bear interest at time and in amounts
sufficient, together with the moneys already on deposit with the
TrLStee for such purpose, to pay when due the principal and
interest to become due with respect to the related Principal Amount
on or prior to the first Interest Due Date-as of which such
Borrower may make an Optional Redemption, as set forth in the
related Note, as the case may be.
The Borrower's election to defease shall be evidenced by
giving written notices to the Trustee and the Secretary, which
notices shall authorize and direct the establishment of the related
3wncno5.snj4M=DGMW hh�h it. L 19
Defeasance Account, shall specify the money and Government
Obligations to be deposited therein and shall specify.• the
particular.Pri=iPal Amotmts, subject to the last sentence of the
first paragraph of Section' 3.03 .herein, being defeased and the
related Principal Due Date(s) and optional Redemption Date(s)
(consistent with the related Note and Contract). For all purposes
Of this Agreement, to the extent that a Principal Amount is so
specified for defeasance in accordance with the Contract, such
specification shall constitute an election to redeem on the
specified date for purposes of the related Note, subject to the
last sentence of the first paragraph of Section 3.03 herein. Upon
and in accordance with the .SecretaryIs instructions pursuant to the
corresponding Contract, the Trustee shall apply so much of the sums
deposited into a Defeasance Account as shall be necessary to
Purchase the Government Obligations designated by the Secretary's
instructions. If the funds deposited were insufficient, or there
were excess funds deposited, the Trustee shall follow the
Secretary's directions as to the disposition of such funds.
The moneys and any Government Obligations held as part of a
Defeasance Account shall be held as trust property solely for the
benefit of the corresponding Certificateholders and shall be
continuously so designated on the books and records of the Trustee.
To the extent that they constitute book -entry securities issued by .
the united States, such Government Obligations shall be held by the
` 5*DCnos.tanm7cwDaAw ma 11. Im 20
Trustee through a book -entry account maintained with the Federal
Reserve Bank of Newyork. Upon the purchase and /or delivery and
receipt into its book- entry-account. of any book -entry securities,
the Trustee shall provide the Secretary with a certificate, signed
by an Authorized officer, confirming that such securities are being
held in an account at the Federal Reserve Bank of New York and that
the Trustee has marked its books and records to reflect that it is
holding such securities in trust solely for the benefit of the
corresponding Certificateholders . Moneys and Government obliga-
tions held as part of a Defeasance Account shall be applied by the
Trustee solely to the payment of principal of and interest on the
related Principal Amounts and shall be maintained free of all
liens, except such liens as may be created by this Agreement.
The .Trustee shall collect on the due dates thereof the
principal of and interest and premium, if any, on the Government
obligations an deposit in the Defeasance Account and shall, without
further authorization or direction, apply such receipts on each
Distribution Date to the payment of interest and to the payment of
the related Principal Amount, when applicable. At the opening of
business on the relevant Distribution Date, the Trustee shall
transfer from the Defeasance Account to the Certificate Account the
amount of interest and principal (if any) to be paid.
Receipts in excess of the amount necessary to make the
payments on each Distribution Date shall be reinvested by the
BWDdmS.1 A14781000f9MM Must IL 1999 21
Trustee in Government obligations (limited to Treasury bills)
maturing on or before the next Distribution Date. The Trustee
shall collect on the due dates thereof the principal of and
interest and premium, if any, on such Government Obligations, and
shall, without further authorization or direction, apply such
receipts to the payment of interest and principal on the next
Distribution Date. _Amounts under s5,000 that cannot be invested in
such obligations on any Distribution Date may be held uninvested.
The Borrower shall have no right or title with respect to
moneys and Government Obligations irrevocably deposited with the
Trustee under this Section 3.07. Such moneys and Government
Obligations shall not be subject to checks or drafts drawn by the
Borrower or claims against the Borrower by any creditor of the
Borrower other than the Secretary with respect to the payments due
on the Notes. Receipts in excess of the amount necessary to make
final distributions in respect of the last Principal Amount
outstanding on any Note shall be returned to the Secretary within
5 Business Days of such final distribution.
SECTION 3.08. Trustee llectien Agent. Under the
Notes and this Agreement, the Trustee shall act as collection agent
for the purpose of receiving the payments due on the Notes and
depositing such payments into the Certificate Account, as provided
in Section 3.06 and Section 3.07.
sancncusnu?OAMQO M rdsich ii. ma+ 22
Notwithstanding the foregoing or any other provision contained
herein, the Trustee shall have no duty or responsibility to enforce
collection on any Note (or any Automated Clearing House funds
transfer, wire transfer, check, draft or other instrument made or
given with respect to any Note) or otherwise to take any steps to
seek payment thereon on behalf of the Secretary, as administrator,
or any Certificateholder. The Certificateholders acknowledge and
agree that the Trustee shall have only those duties expressly
provided in the Agreement and .shall have no other duties or
responsibilities with respect to the Certificateholders or the
Trust, and that the Trustee shall have no duty to institute any
suit, action or proceeding on behalf of Certificateholders to
enforce
the
Guaranty or the Secretary's
guarantee of the
timely
payment
of
all distributions payable
with respect
to any
Certificate.
.i._ b .e- . .- -. -
Account. The Trustee shall, from time to time, withdraw funds from
a Certificate Account for the following purposes:
U) to make payments to the Certificateholders in the amounts and
in the manner provided for -in- Section 4.01; and
(ii) to clear and terminate the Certificate Account
pursuant to Section 9.02; or as provided in the last sentence
of Section 3.06.
as'ncjmKunwx=DuA=mamn ii. mg 23
w° s. upon the payment in full of any Note (including pursuant to
the Guaranty), the Trustee sif11 promptly release and assign the
related Note to the Secretary:— From time to time and as
appropriate for the.admiaistration of any Note, the Trustee shall,
upon written request of the Secretary signed by an Authorized
official. and delivery to the Trustee of a trust receipt signed by
an Authorized Official, release such Note to the Secretary and
shall execute such documents as shall be necessary for the
prosecution of any such proceedings. Such trust - receipt shall
obligate the Secretary to return the Note to the Trustee when the
need therefor by the Secretary no longer exists, unless all
Principal amounts due on such Note shall be liquidated, in which
case, upon deposit into the relevant Certificate Account of the
full amount of unpaid principal of and interest accrued on such
Principal Amounts and receipt by the Trustee of a certificate
signed by an Authorized official stating that such Principal
Amounts have been liquidated, the trust receipt shall be released
by the Trustee to the Secretary and the Trustee shall promptly
provide the Secretary with an assignment of the Note to the
Secretary.
Notwithstanding the foregoing, neither the Trustee nor the
Secretary shall be empowered to make any substitution of Notes in
a particular Trust forayed hereunder.
swncnas.unumaoonAMKU& It, t1"D 24
SSC=ON 3.12. Rai f++. amen nf 7= In the event that a
Borrower makes.a Note payment to the Trustee through an Automated
Clearing House funds transfer system, and subsequent to the time at
which the Trustee is required to notify the Secretary that the
Secretary is required to make a Guarantee Payment with respect to
such Note payment, as specified in Section 3.06 hereof, the Trustee
shall receive a rejection of such Automated Clearing House funds
transfer, than to the extent that the Trustee, at its sole option,
shall have advanced its own funds in an amount equal to such
rejected Automated clearing House funds transfer, the Trustee shall
be entitled to be reimbursed promptly by the Secretary for such
amount, together with an amount representing interest expense on
such funds up-to the time of reimbursement (as.provided below). In
the event of any such rejection, the Trustee shall be reimbursed in
the following manner;
W promptly upon receipt of notice from the Trustee by teleccpy,
telex or otherwise in writing of the occurrence of any such
rejection, the Secretary shall reimburse the Trustee, by wire
transfer of immediately available funds, for the amount of any such
Automated Clearing House funds transfer so rejected; and
(ii) upon the giving of such notice to the Secretary, the
Trustee shall be authorized to charge the Fee Account in an
amount sufficient to reimburse itself for any interest expense
DWDCJ10SJM1470l000f3AMMash It. IM 25
incurred
by the Trustee by reason of
such
rejection
fz-
the
time of
the relevant Distribution
Date
until the
time
of
reimbursement of the Trustee by the Secretary pursuant to
clause W above; V=Xle3ed, however, that to the extent that
the Fee Account does not contain sufficient funds to reimburse
the Trustee in full for such interest expense, the Secretary
shall, upon the request of the Trustee (which request may be
included in the notice specified in clause U) above),
promptly pay the amount of any such deficiency directly to the
Trustee. In determining whether the Fee Account has
sufficient funds for purposes of the foregoing reimbursement,
consideration shall be given only to funds in the Fee Account
in excess of those funds held for the payment of the Trustee's
fees and for reimbursement of the Trustee's reasonable
expenses and disbursements. The obligations of the secretary
under this Section 3.11 shall be payable solely out of grants
pledged by the applicable Borrowers to the Secretary as
security for repayment of the Notes (and related costs
authorized by the Secretary) pursuant to the applicable
Contracts. The obligations of the secretary under this
Section 3.11 shall survive the satisfaction and discharge of
this Agreement.
RWWJM.unMMVODDAM MU* ii.IM 26
etc dz Iv
r1
�" � � � 1 ♦Its l .. • • � -). • • - "
Distribution Date relating to a particular Series, the Trustee
shall distribute to the Certificateholders of record as of the
close of business on the Record Date therefor (other than as
provided in Section 9.01 and Section 9.02 respecting the final
distribution) each such Certificateholder's Fractional Undivided
Interest in the interest at the applicable Pass - Through Rate and
principal due on the Certificates of such Series. Distribution
shall be made from funds available in the Certificate Account as of
10:00 A.M. (New York City Time) on the applicable Distribution
Date, other than amounts, if any, received on particular Notes
representing late recoveries of principal and /or interest
respecting which any Guarantee Payment was made. Unless DTC or its
nominee (Cede Co.) shall be the Certificateholder, such
distribution shall be made W to Certificateholders holding
Certificates in an aggregate Original Principal Amount of $1
million or more by wire transfer to such commercial bank located in
the continental United States having appropriate facilities
therefor as may be designated in writing by such Certificateholder
to the Trustee (provided that such Certificateholder shall have
3wDCn05.M147& 00 Moen U, m99 27
provided the. Trustee with appropriate written wire transfer
instructions
not later than 5 Business Days prior to
the
applicable
Distribution
Date) or (ii) otherwise, by check to
the
Person in
whose name
such Certificates are registered at
the
close of
business- on the Record Date. . Where DTC or its nominee is the
Certificateholder, distributions shall be made in accordance with
the applicable Letter of Representations. For so long.as DTC shall
be the only registered Certificateholder, the Trustee shall have no
duty to monitor distributions made to Certificate Owners and shall
have no liability with respect thereto.
SSCTZ0W 4.02. Statements to the rt- if i a h I and _e th
Secreta . At the time of each distribution with respect to a
particular Series, the Trustee will furnish to each
Certificateholder of such Series a statement setting forth the
following information, stated on the basis of $2,000 Original
Principal Amount, with respect to the Certificates of such Series
owned of record by such Certificateholder:
M The amount of such distribution allocable to principal
(including a separate breakdown of any payments in respect of
Optional Redemption or Acceleration Payments);
(ii) The amount of such distribution allocable to
interest; and
awncned rsnICM=*0AW a.& It. IM 28
0
The amount of such Certificateholde ='s Fractional
Undivided Interest in the aggregate unpaid Principal Amounts
of Notes due on the principal• Due Date coinciding with the
Maturity Date for such Certificates, after giving effect to
distributions of principal made on such Certificates
distributed on such Distribution Date.
In addition, within a reasonable period of time after the end
of each calendar year, the Trustee will furnish a report to each
Person who has held the status of Certificateholder at any time
during such calendar year as to the aggregate of amounts reported
pursuant to U) and (ii) above for such calendar year or, in the
event such person was a Certificateholder of record during a
Portion of such calendar year,'for the applicable portion of such
year.
In addition, within 30
days
following
the
end
of the calendar
Year, the Trustee shall
file
copies
of
the
statements to
Certificateholders referred to in the preceding paragraph with the
Internal Revenue Service pursuant to the Income Tax Regulations
governing grantor trusts. At the time the Trustee shall furnish
any report to Certificateholders, it shall also furnish a similar
report to the Secretary; Provided, that such report furnished to
the Secretary shall be made with respect to the aggregate of all
Certificates of a Series outstanding at the time of such report.
awDCnQL1Sni47wwoavw muen ii. no 29
SECTION 4.03. R&ying tn. The Secretary may appoint cup-
or more paying agents in such place or places as the Secretary may
designate, for the payment of amounts due on the CertificaZ;es. The
paying agent initially appointed hereunder is the Trustee, located
at its Corporate Trust office.
ARTICLE 4
TEE NOTES Am THE CERTIFICATES
SECR'ION 5.01. Cart+ + a Ti and = - T +arcea in
Gss3p.. The aggregate Original Principal Amount of Certificates
that may be issued wader this Agreement is unlimited, except that
the aggregate Original Principal Amount of Certificates of any one
Series shall be limited to the unpaid aggregate Principal Amount of
Notes comprising the Trust to which such Series relates as of the
Date of Issuance (except that Certificates may be issued upon
transfer of, or in exchange for, or in lieu of other Certificates
pursuant to the terms of this Agreement).
The Certificates shall be Down and designated as the "Section
108 Government Guaranteed Participation Certificates, Series HUD
Guaranteed by. the Secretary of Housing and Urban
Development,• which designation shall include an appropriate series
designation or designations, and the year of the Date of Issuance
saDCn05.MW7QM0DQAW WOO ti. im 30
Y
I
thereof. With respect to each Series, the Trustee shall, except as
provided in Section 5.03, issue a single, separate Certificate for
each Principal Due Date specified in all the Notes held in the
related Trust, which Certificate shall also specify the aggregate
Of all Principal.Amounts due on the Notes to which such Principal
Due Date relates and the Pass - Through Interest Rate applicable
thereto.
Certificates of separate Series may differ, as between such
Series, in respect of any of the following matters, subject to the
terms of this Agreement;
(1) The designation of the Certificates of the Series
(which shall distinguish the Certificates of such Series from
those of all other Series);
(2) The aggregate Original Principal Amount of the
Certificates of such Series;
(3) The Principal Due Dates of the Notes to which such
Series relates;
(4) The Date
of
Issuance and
the Pass - Through Interest
Rates with respect
to
the Series;
and
(5) Optional Redemption and acceleration provisions (if
any) .
be�v . Certificates shall be" executed on behalf of the
Secretary by an Authorized Officer of the Trustee as agent for the
2WDCn05.M1470M00C1/63 Mae41L 1999 31
Secretary under the Trustee Is seal reproduced thereon. The
signatures of any such Authorized officers on the Certificates may
be manual or facsimile. No Certificate shall• be entitled to any
benefit under this Agreement, or be valid for any purpose, unless
there appears thereon a certificate of authentication substantially
in the form provided for in Exhibit A hereto executed by an
Authorized Officer of the Trustee by manual signature and dated as
of the date of such execution, and such certificate of
authentication upon any Certificate shall be conclusive evidence,.
and the only evidence, that such Certificate has been duly
executed, authenticated and delivered hereunder. Certificates
bearing the manual or facsimile signatures of persons who were at
any time the duly Authorized Officers of the Trustee shall bind the
Trustee,
notwithstanding that such
individuals or any of them
have
ceased
to hold such offices
prior to the delivery of
the
Certificates to Certificateholders.
cartificatee- nenominations. The Trustee shall be the registrar of
the Certificates for the purpose of registering Certificates and
maintaining a record of any transfers and exchanges of Certificates
as herein provided. The Trustee shall cause to be kept at the
office or agency to be maintained in accordance with the provisions
of Section 5.06 hereof, a Certificate Register in which, subject to
such reasonable requirements as the Trustee may prescribe, the
u. IM 32
f
i
Trustee shall provide for the registration of each series and of
transfers and exchanges of Certificates as herein provided.
.The Certificates shall, subject to this Section 5.03, at all
times remain registered in the name of DTC or its nominee and at
all times: (i) registration thereof may not be transferred by the
Trustee except to a successor depository or to a nominee of DTC or
a successor depository; (ii) DTC sball maintain book -entry records
with respect to the Certificate owners and with respect to
ownership and transfers of beneficial interests in the
Certificates; (iii) ownership and transfers of registration of the
Certificates issued in book -entry form on the books of DTC shall be
governed by applicable rules established by DTC, and the rights of
Certificate Owners shall be governed by applicable law and
agreements between such Certificate Owners and DTC, Depository
Participants, and indirect participating firms; (iv) DTC may
collect its usual and customary fees, charges and expenses from its
Depository Participants; (v) the Trustee shall deal with DTC, as
authorized representative of the Certificate owners of the
Certificates for all purposes including the making of payments due
on the Certificates and exercising the rights of Certificateholders
under this Agreement, and requests and directions for and votes of
such representative shall not be deemed to be inconsistent if they
aze made with respect to different Certificate Owners; (vi) the
Trustee may rely and shall be fully protected in relying upon
8W=IaiUnJ47W 0 M3AW Mum u. IM 33
u
information furnished by DTC with respect to its Depository
-..Participants and furnished by the Depository Participants: with ..
respect to indirect participating firms and persons shown on the
books of such indirect participating firms as direct or indirect
Certificate Owners; and (vii) except as provided in this Section
5.03, Certificate Owners shall not be entitled to certificates for
the Certificates.
All transfers by Certificate Owners of beneficial interests in
the Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm
representing such Certificate Owner. Each Depository Participant
shall transfer only beneficial interests in the Certificates of
Certificate Owners it represents or of brokerage firms for which it
acts as agent in accordance with DTC's normal procedures. Except
as provided herein, the Trustee shall have no duty to monitor or
restrict the transfer of beneficial interests in the Certificates,
and shall have no liability for any such transfer, including any
transfer made through the book -entry facilities of DTC or between
or among Depository Participants or Certificate Owners, made in
violation of applicable restrictions set forth herein. The
Secretary, the Trustee and any paying agent will not have any
responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in
BWDWMUni47QMWGAMW emen u. 19M 34
0
a Certificate or for maintaining, supervising or reviewing any
-records relaxing to such beneficial ownership interests.
If (i) the Secretary or DTC advises the Trustee in writing
that DTC is no longer willing, qualified or able to properly
discharge its responsibilities as depository, and the Secretary is
unable to locate a qualified successor, (ii) the secretary at his
option advises the Trustee in writing that he elects to terminate
the book -entry system through DTC or (iii) Certificate Owners
representing not less than Sit of the aggregate voting rights
allocated to the Certificates together advise the Trustee and DTC
through the Depository Participants in writing that the
continuation of a book -entry system through DTC is no longer in the
best interests of the Certificate Owners, the Trustee shall notify
all Certificate Owners, through DTC, of the occurrence of any such
event and of the availability of Definitive Certificates to
Certificate owners requesting the same. Upon surrender to the
Trustee of the related Certificates by DTC, accompanied by
registration instructions from DTC for registration, the Trustee
shall issue the Definitive Certificates. Neither the Secretary nor
the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected
in relying on, such instructions. upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or
to be performed by DTC shall be deemed to be imposed upon and
VWDCd106.M1478VWQAW Mfg h u.1 9 35
performed by the Trustee, to the extent applicable with respect to
such Definitive Certificates; and the Trustee shall recognize the
holders of the Definitive Certificates as Certificateholders
hereunder..
Unless Definitive Certificates are issued in accordance with
this Section 5.03, the Certificates for each Series shall be
initially registered in the name of DTC or its nominee, and shah
be evidenced by a single global Certificate for each Maturity Date
substantially in the form set forth in Exhibit A hereto, with such
appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Agreement or the
form of Certificate attached hereto, or as may be necessary or
desirable to reflect the varying terms of different Series, and may
have such letters, numbers or other marks of identification and
such legends or endorsements placed thereon as may, consistently
herewith and with such form of Certificate, be required to comply
with the rules of any securities exchange on which the Certificates
may be listed, or as may, consistently herewith and with such form
of Certificate, be-determined by the Secretary, as evidenced by the
execution of such Certificates in accordance with Section 5.02.
The Certificates shall, on original issuance, be issued by the
Trustee as agent for the Secretary through the book -entry
facilities of DTC and shall be executed, authenticated and
delivered by the Trustee to or upon the written. order' of the
swncnos uau7a ODOAM Usah u. M 36
0
•
Underwriters as specified in Section 2.03, upon receipt by the
Trustee of the Notes comprising the Trust to which such Series
relates, the related Guaranty and' the Supplement to the Trust
Agreement as specified in section 2.01 hereof and such other
documents as the Trustee may reasonably request and, upon
establishment of the related Certificate Account. The face amount
of each
Certificate shall represent not
of the
Original
Principal
Amount
thereof. Each such Certificate
shall
bear the
following
legend-
'Unless this Certificate is presented by an
authorized representative of The Depository
Trust Company, a New York corporation ("DTC°),
to the Secretary or its agent for registration
of transfer, exchange, or payment, and any
Certificate - issued is registered in the name of
Cede & Co. or in such other name, as requested by
an .authorized representative of DTC (and any
payment is made to Cede a Co. or to such other
entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR
OTEER USE HEREOF FOR VALUE OR OTIMRWISE BY OR TO
ANY PERSON IS WRONGFM ;nns=ch as the
registered owner hereof, Cede & Co., has an
interest herein."
BW11MQLLN11l70f00D13AM Mure 11. M9 - 37
Subject. to the preceding paragraphs, upon surrender for
registration of transfer of any Certificate of any Series at the
office or agency of the Secretary maintained for such purpose
pursuant'to Section 5.06, the Trustee shall execute on behalf of
the Secretary, authenticate and deliver, in the name of the
designated transferee or transferees, a new Certificate of the same
Series, Maturity Date and Pass - Through Rate, in denominations
authorized hereunder, of a like aggregate Fractional Undivided
Interest.
At the option of Certificateholders, Certificates of any
Series may be exchanged for other Certificates, as applicable, of
the same Series of authorized denominations of like tenor
(including Maturity Date and related Pass - Through interest Rate)
and aggregate Fractional Undivided Interest upon surrender of the
related Certificates to be exchanged at any such office or agency.
Whenever any certificates are so surrendered for exchange, the
Trustee shall record in the Certificate Register the Certificates,
as applicable, which the Certificateholder is entitled to receive.
Every Certificate presented or surrendered for registration of
transfer or exchange shall be duly endorsed by, or be accompanied
by a written instrument of transfer or authorization for exchange
in form satisfactory to the Trustee duly executed .by, the
Certificateholder thereof or his attorney duly authorized in
writing.
zwDodAsn147amwt3!s=mamb ii. ing 38
E
0
A service charge equal to a reasonable fee of the Trustee
shall be charged to the Person presenting the Certificate for
transfer or exchange upon any registration of transfer or exchange
of such Certificate, and the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of a
Certificate. .
.All Certificates surrendered for payment, registration of
transfer or exchange shall be cancelled by the Trustee in
accordance with its standard procedures. All such cancelled
Certificates shall be forwarded to the Secretary by the Trustee,
from time to time.
As long as DTC is the sole Certificateholder, Certificates
having the
same Maturity
Date shall
be registered
as a single
Certificate.
Definitive
Certificates
issued under
Section 5.03
herein shall be issued in such denominations as the Secretary and
the Underwriters shall agree and as are administratively acceptable
to the Trustee. The Certificates shall be dated the date of their
authentication and shall be numbered in such manner as shall be
approved by the Trustee.
SSC=C& 5.04. M* +la d. neStrev d. T.nat er RI-MI "
c rt icae s, if (i) any mutilated Certificate is surrendered to
the Secretary or the Trustee, or the Secretary and the Trustee
receive evidence to their satisfaction of the destruction, loss or
zwDcnw.i5nlnW00041W Mum IL VM 39
theft of any Certificate, and (ii) there is delivered to the
Secretary and the Trustee'such security or indemnity as may be
required by either or both of them to save each of them harmless,
then, in the absence of notice to the Secretary or the Trustee that
such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute on behalf of the Secretary, authenticate and
deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of the
same Series and of like tenor and Fractional Undivided Interest.
Upon the issuance of any new Certificate under this Section, the
Trustee may require the payment of a sum sufficient to cover any
tax-or other governmental charge that may be imposed in relation
thereto and
any other reasonable
expenses
connected
therewith. Any
duplicate
Certificate issued
pursuant
to this
Section shall
constitute complete and indefeasible evidence of ownership in the
Trust, as if originally issued, whether or not, the lost, stolen or
destroyed Certificate shall be found at any time.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost
or stolen Certificates.
SEr_=CR S. OS. persons Deemed owners. prior to due
presentation of a Certificate for registration of transfer, the
Secretary, the Trustee. and any agent of the Secretary or the
Mont IL 1999 40
Trustee may treat the Person in whose name any Certificate is
registered as the owner of such . Certi£;.cate for the purpose of
receiving distributions pursuant to Section 4.01 hereof and for all
other purposes whatsoever, and neither the Secretary, the Trustee
nor any agent of the Secretary or the Trustee shall be affected by
notice to the contrary.
SECTION 5.06. Maintenance of rtffi ce e!rr Aer"&w. The Secretary
will maintain a designated office or agency where Certificates may
be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Secretary in respect of the
Certificates and this Agreement may sbe served. The Secretary
initially appoints the Corporate Trust Office of the Trustee as
such office for said purposes. The Secretary will give prompt
written notice to the Trustee of any change in the location of any
such office or agency.
ARTICLE V1
SECTION 6.01. Certifi =_te M rantee. In addition to the
Secretary's
guarantee of the timely payment of
the principal of
and
interest
on the Notes pursuant to the
Guaranty, and
in
consideration for the purchase of the Certificates by such
XWDU os.ssnMowaor AM Unch u. M 41
Certificateholders, the Secretary also, by execution. of a
Certificate Guarantee in the form attached hereto as Exhibit A,
unccanditionally guarantees to each Certificateholder of a
Certificate executed, authenticated and delivered by the Trustee
the due and timely payment of all distributions payable with
respect to such Certificate when and as the same shall become due
and payable according to the terms of such Certificate and of this
Agreement.
The Secretary agrees that its obligations under the
Certificate Guarantee shall be unconditional, irrespective of the
validity, regularity or enforceability of such Certificate or this
Agreement, the absence of any action to enforce the same, any
waiver or consent by the Certificateholder of such Certificate or
by the Trustee with respect to any provisions thereof or of this
Agreement, the recovery of any judgment against the Secretary or
any action to enforce the same or any other circumstance that might
otherwise constitute a legal or equitable discharge or defense of
a guarantor. The Secretary hereby waives diligence, presentment,
demand of payment, any right to require a proceeding first against
a Trust, protest or'notice with respect to such Certificate and all
demands whatsoever, and covenants that this Certificate Guarantee
will not be discharged except by complete performance of the
obligations contained in the Certificate and in the Certificate
Guarantee.
SWWW.M1478MODGAM Mash 11. M 42
The Secretary shall be subrogated to all rights of the Trustee
and of the Certificateholders to receive payments made by the
Borrowers pursuant to the Notes in respect of any amounts paid by
the Secretary pursuant to the, provisions of the Guaranty of the
Notes, the Certificate Guarantee or this Agreement. As long as DTC
or its nominee shall be the only registered Certificateholder, the
Trustee shall act as DTC's agent solely for the purpose of
enforcing the Certificate Guarantee. With respect to Definitive
Certificates issued in accordance with Section 5.03, the Trustee
shall have no obligation to request payments under or compel
payment by the Secretary of any amounts due to be paid under the
Certificate Guarantee.
SECTION 6.02. Ex c+ +on OTIA •ivery of zti +-a
Guarantees. To evidence the Secretary's guarantee of the
Certificates, the Secretary hereby agrees to execute a Certificate
Guarantee, substantially in the form set forth in Exhibit A hereto,
as appropriate, to be endorsed on each Certificate executed on
behalf of the Secretary, authenticated and delivered by the
Trustee. Each such Certificate Guarantee shall be manually
executed on behalf of the Secretary by an Authorized Official. No
Certificate authenticated and delivered by the Trustee hereunder
shall be entitled to the benefits of the Certificate Guarantee
unless such Certificate shall have endorsed thereon a Certificate
Guarantee executed as aforesaid.
BWDMCLLM14 MM43M s MU& u, 1"9 43
Certificate Guarantees bearing the manual signatures of
individuals who were at any time the duly Authorized officials of
the Secretary shall bind the secretary, notwithstanding that such
individuals or any of them have ceased to hold such offices prior
to the authentication and delivery of the Certificates upon which
such Certificate Guarantees are endorsed.
The delivery of any Certificate by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of
the Certificate Guarantee endorsed thereon on behalf of the
Secretary.
ARTICLE V11
(a)
Each Borrower shall pay the Trustee an
initial fee
on the
Date of
Issuance as reasonable compensation for
all services
to be
rendered by it hereunder and as payment or reimbursement for all
reasonable expenses and disbursements (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel and of all other persons not regularly in its employ) to be
incurred by the Trustee under the Agreement. The aggregate amount
of such fees from all Borrowers with respect to a series of Notes
s�vnC' nas .tsnii7Gi000�3/6303te�Lii.1999 44
shall be specified in the supplement to the Trust Agreement for the
related Series. The Trustee shall deposit such fee in a;non-
•interest bearing Fee Account establishel for each Series, separate
and apart from any Trust and. from all other accounts of such
Borrower and the .Trustee and over which the Trustee shall have
exclusive control. On an annual basis, commencing on the Date of
Issuance, the Trustee will deduct from the applicable Fee Account
the compensation and reimbursements due hereunder for such year.
The secretary shall also pay the Trustee any additional
compensation and reimbursement payable to the Trustee pursuant to
the provisions of Section 3.11. Upon the failure of any Borrower
to fund the Fee Account as aforesaid, the Secretary shall fund the
Fee Account on behalf of such Borrower, which payment shall be
satisfied solely out of grants pledged by such Borrower to the
Secretary as security for repayment of the Notes (and related costs
authorized by the Secretary) pursuant to the Contract.
(b) The Secretary hereby agrees:
(1) to reimburse the Trustee upon its request for an
reasonable extraordinary out -of- pocket ex'p'enses, disbursements and
advances incurred or made by the Trustee in accordance with any
provision of this Agreement (including the reasonable compensation ..
and expenses and disbursements of its agents, attorneys and counsel
and of all persons not regularly in its employ), except any such
swDMOL 147O)owasreos Mma 11. 19" 45
expense, disbursement or advance as may be attributable to its
gross negligence, willful misconduct or bad faith; and
(2) to ind:.mni.fy the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without
bad faith, willful misconduct or gross negligence on its part
arising out of or in connection with the acceptance or
administration of this Agreement or the Notes, including the costs
and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder. The Trustee shall notify the Secretary promptly
of any claim for which it may seek Indemnity under this Clause (2).
The Secretary shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel
with the consent of the Secretary and the secretary will pay the
reasonable fees and expenses of such counsel. The Secretary need
not pay for any settlement made without its consent.
The obligations of the Secretary under this Section 7.01(b)
shall be payable solely out of grants pledged by the applicable
Borrowers to the Secretary as security for repayment of the Notes
(and related costs authorized by the Secretary) pursuant to the
applicable Contracts. The obligations of the Secretary under this
Section 7.01(b) shall survive the satisfaction and discharge of
this Agreement.
swDCFM.Un1470AOW43AMMaRbU.IM 46
0
AMCLR vrxs
u
SSCTiCN 8.01. bution of .Txj . The Trustee hereby accepts
the trusts imposed. upon it by this Agreement and undertakes to
perform such duties and only such duties as are specifically set
forth in this Agreement. The Secretary hereby designates and
appoints the Trustee as its agent for the purpose of issuing, on
behalf of the Secretary, the certificates of each Series. The
Trustee hereby accepts such designation and appointment and agrees
to issue the Certificates of each series in its capacity as agent
for the Secretary and pursuant to the terms and provisions of this
Agreement.
Except upon compliance with the provisions of Section 3. 10,
none of the Notes or any other instruments or documents
constituting a part of any Trust shall be delivered by the Trustee
to the Secretary or otherwise released from the possession of the
Trustee.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct or bad
faith; 2=I d d . however, that.
BVMCFIQS M147pdOMOAM Mash 13.3999 47
• 1 0
(i). The duties and obligations of the Trustee shall be determined
solely by the express provision of Chia Agreement, the Trustee
shall not be liable except for ne:;.ligence or willful misconduct in
the performance of such duties and obligations as are specifically
set forth in this Agreement,.no implied covenants or obligations
shall be read into this Agreement against the Trustee and, in the
absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth and accuracy of the statements
and contents and the correctness of the opinions expressed therein,
upon any certificates, opinions, resolutions, statements, reports,
documents, orders or other instruments furnished to the Trustee and
conforming to the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an
error of judgment made in good faith by an Authorized Officer
or Authorized Officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the
Pertinent facts; and
(iii) No provision of this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers.
SS=Cff 8.02. Certx4" Mntfora affarti Except
as otherwise provided -ia Section 8.01:
It. i90 48
(i) The Trustee may.rely and shall be protected in acting or
refraining from acting upon any resolution, certificate of an
Authorized official, certificate of auditors or auy other
certificate, statement, instrument, opinion (including an oral
opinion -or advice of its counsel), report, notice, request,
consent, order, appraisal, bond or other paper or document believed
by it to be genuine and to have been signed or presented by the
proper party or parties;
(ii) The Trustee may consult with its counsel and any
opinion of such counsel, whether oral or written, shall be
full and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such opinion of counsel, and
the Trustee shall not be required to take any action in
violation of, law or any action which would, in its reasonable
determination, expose.it to any fine or penalty imposed by
law;
(iii) The
Trustee shall not be
personally
liable
for any
action taken,
suffered or omitted
to be taken
by it
in good
faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this
Agreement;
. (iv) The Trustee may exercise any of the powers hereunder
or perform any duties hereunder either directly or by or
awDCnW Snla72QMOM30sMum11.IN9 49
through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of
any agent or attorney appointed with .'ue care by it hereunder;
(v) The Trustee 'shall not be obligated to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, consent, order, approval or other paper or
C•..i ,,,,�.
(vi)
Any request or direction
of the secretary referred
to
herein
shall be sufficiently
evidenced if signed by
an
Authorized official; and
(vii) Whenever in the administration of this Agreement the
Trustee shall deem it desirable that a matter be proven or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, is the absence of bad faith on
its part, rely on a certificate of an Authorized Official.
SECTION 8.03. Tnistee No fn?, C i -a Ps or Notes.
The recitals contained herein and in the Certificates (other thaw
the certificate of authentication on the Certificates) shall be
taken as statements of
the Secretary,
and the
Trustee assumes no
responsibility for the
correctness of
the same.
The Trustee makes
no representations as to the validity or sufficiency of this
Agreement, the Guaranty, the certificates, the Certificate
8VDCnQ$.M14?&V0MAM Abate 11.099 so
Guarantee or of any Note or related document and shall not be held
liable for any defect in any portion thereof. The Trustee shall
not be accountable (a) for the use or application U) of any of the
Certificates after issuance in accordance with this Agreement or
(ii) of the proceeds of such Certificates after distribution to
Borrowers in accordance with this Agreement or (b) for the use or
application of any funds paid to the Secretary in respect of any
Note.
SECTION 6.04. F.7 ; q; b; 7 ; v R cmi rpments for 4`ru%ttee. The
Trustee hereunder shall at all times be a corporation having its
principal office in the State of New York and organized and doing
business under the laws of such State or the United States of
America, authorized under such laws to exercise corporate trust
Powers, having a combined capital and surplus' of at least
$100,000,000 and be subject to supervision or examination by
Federal or State authority. If such corporation publishes reports
of condition at least annually, pursuant to law or the requirements
of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published.
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall
DWDCIICS M1470VW Mv=b 11.1999 52
resign iu aediateiy in the manner and with the effect specified in
Section 8.05.
Subject to the further provisions of this Section 8.05, the Trustee
may resign at any time and be discharged from its duties as Trustee
hereunder by giving at least 60 days, prior written notice of such
resignation to the Secretary and specifying the date on which such
resignation is to take effect, and the Trustee may be removed by
the Secretary as the Trustee at any time, with or without cause, by
giving at least five (5) Business Days' prior written notice of
such removal delivered to the Trustee and specifying the date on
which such removal is to take effect. upon any such resignation or
removal, the Secretary may, without other formality than
appointment and designation in writing (a copy of which written
instrument shall be promptly provided to the resigning or removed
Trustee), appoint a successor trustee and agent, provided that such
successor trustee and agent shall be eligible under the provisions
of Section 8.04. Any successor trustee and agent appointed as
provided herein shall execute, acknowledge and deliver to the
Secretary and to its predecessor trustee and agent an-instrument
accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee and agent shall become
effective
and
such successor trustee and agent, without any
further
act, deed
conveyance, shall become fully vested with
all the
or
BWr.CnQS.t IMMODGAMWW* It. M9 52
rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as trustee and
agent herein. Upon acceptance by such successor trustee of its
APPointmeat hereunder or in the absence of such an appointment upon
th& effective date of the resignation or removal as specified in
the applicable notice referred to above (or, if the notice does slot
so specify, the expiration of the Go- or 5 -day period referred to
above), the Trustee shall deliver all of the Notes and other
property constituting the Trusts then in its custody to such
successor trustee (or the Secretary, if no successor trustee has
been appointed) against receipt by such successor (or the
Secretary, if no successor trustee has been appointed), including
without limitation, by transmitting to such successor trustee (or
the Secretary, if no successor trustee has been appointed) for
deposit into successor accounts established by the successor
trustee (or the Secretary, if no successor trustee has been
appointed), all funds in or otherwise to the credit of the
Certificate Accounts, and the Trustee shall otherwise release,
assign and deliver to such successor trustee (or the Secretary, if
no successor trustee has been appointed) all other property
constituting the Trusts in its possession, and effect a transfer of
such property in such manner and pursuant to such instruments as
the Secretary shall reasonably request.- The Trustee shall likewise
deliver at such time to such successor trustee (or the secretary,
V%WMO5aan1470Y000GAW Umb IL MV 53
if no successor has been appointed? all moneys deposited into any
Fee Account in respect of any outstanding Series upon payment of
its charges in accordance with this Agreement, the Cent .'.ficate
Register and all related records and documents in its possession.
The Trustee shall.not be discharged from its duties or obligations
hereunder following its resignation or removal until such property
has been delivered to such successor and transferred, as provided
above.
corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder, provided such
corporation shall be eligible under the provisions of Section 8.04,
without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
SSCTION 8.07. Trustee MMr Own CPT'-,-tfie!ates. The Trustee in
its individual or any
other
capacity may become the owner
or
pledgee of Certificates
with
the same rights it would have if
it
were not Trustee.
swxnos.tsnua MMOA s MW* 3L 19W 54
.I
SZ=CN S. 08. Fidel i ty, send-or T =L= The Trustee shall
obtain a fidelity bond or insurance in such amounts as' the
Secretary determines to be necessary to protect fully the interests
of the United States Government against losses caused by or
resulting from any actions of the Trustee, its employees or its
agents. In no event shall the Trustee's bonding limits be less
than $100, 000, 000 or its first class mail iT1surance coverage be
less than $250,000.
SBC=CN 9.01. Termination. The respective obligations and
responsibilities of the Secretary and the Trustee created hereby
with respect to any Trust (other than the obligation of the
Secretary and the Trustee to make payments to Certificateholders as
hereafter set forth) shall terminate-upon the final payment of the
last remaining Principal amount, together with accrued and unpaid
interest thereon, whether on the Note Payment Date immediately
preceding
the related Principal
Due
Date, upon.
Acceleration
Payment, upon
payment with respect
to
an Optional
Redemption or
upon payment from a Defeasance account.
u. ten 55
SECTION 9.02. Final past— of C?r*_ifieates. (a) With
respect to any Certificate with respect to which final payment is
due to an optional Redemption or an Acceleration Payment, the
Trustee shall give notice to each Certificateholder of such final
payment, specifying the date- on or after which each
Certificateholder may present and surrender their Certificates for
payment and cancellation at the office of the paying agent
maintained pursuant to Section 4.03, such final payment to be made
only upon such presentation and surrender. The date of surrender
specified in such notice shall be the Distribution Date next
following the Note Payment Date to which such final payment
relates. Such notice shall be given by the Trustee by letter to
such Certificateholders (With a copy thereof to the Secretary)
mailed not later than the fifth Business Day subsequent to the Note
Payment Date to which such final payment relates, prr_ Ided, that
the Trustee has received timely notice from the Secretary as
provided in Section 3.03, if any, relating to such final payment.
The Record Date shall not be effective with respect to any final
Payment made in accordance with this paragraph.
(b) If final payment of a Certificate shall be due on the
Maturity Date in the absence of any earlier optional Redemption or
Acceleration Payment, no notice need be given and final payment
will be made from the Certificate Account on the Maturity Date upon
it." 56
Presentment and surrender of the related Certificate at the office
of the paying agent maintained pursuant to Section 4.03.
(c) The Trustee shall notify the Secretary of any moneys in
the Certificate Account which shall remain unclaimed by any
Certificateholder entitled to receive the same for six months after
the Distribution Date upon which such final payment was due. Such
unclaimed funds may be paid to the secretary upon written request
signed by an Authorized Official; and the Certificateholders shall
thereafter look only to the Secretary for payment of such amounts,
and all liability of the Trustee with respect to such amounts shall
thereupon cease.
M
sSCTION 10.01. Amendment. This Agreement may be amended in
writing from time to time by the Secretary and the Trustee, without
the consent of any of the Certificateholders or the Borrowers;
provided. however, that no such amendment shall, without the
consent of the Certificateholder of such Certificate, reduce in any
manner the amount of, or delay the timing of, payments received on
Notes, including Guarantee Payments, which are required to be
distributed on any Certificate. in executing, or accepting the
RWDMW.U41470MWGAM Mutt ti. M 57
additional trusts created .by, any amendment permitted by this
Section 10.01 or the modifications thereby of the trusts created by
this Agreement, the Trustee shall be entitled to receive, and
(subject to section 8.01) shall be fully protected in relying upon,
an opinion of Counsel stating that the execution of such amendment
is authorized or permitted by this Agreement. The Trustee may, but
shall not be obligated to, enter into any such amendment affecting
the Trustee's own rights, immunities or liabilities under this
Agreement or otherwise.
SECTION 10.02. Limi a ion en Right-c of ertif;npriabol Agars
As provided in each Certificate, the Certificateholders are
entitled to the benefits of this Agreement to the full extent
provided herein; p jAeA, homer, that notwithstanding the
foregoing or any other provision contained herein or in any
Certificate, except as specifically provided herein the Trustee
shall not be deemed an agent or fiduciary for.or on behalf of any
Certificateholder or any Borrower issuing a Note, and the Trustee
shall have no fiduciary duties or responsibilities with respect to
any such Person, or
any duty to take any action
with
respect to any
Trust, except such
duties and responsihilities
as are
specifically
provided herein.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or any Trust, nor entitle such
Certificateholder's legal representatives or heirs to claim an
BWWJMIM147W oac WM Muss it. IM 58
• . .
accounting or to take any action or proceeding in any court for a
partition or winding up of any Trust, nor otherwise affect the
rights, obligations and liabilities of the parties hereto-or any of
No Certificateholder shall have any right to vote or in any
manner otherwise control the operation and management of any Trust,
or the obligations of the parties hereto, nor shall anything herein
set forth, or contained in the terms of the Certificates, be
construed so as to constitute Certificatebolders from time to time
as partners or members of an association; nos shall any
Certificateholder be under any liability to any third person by
reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder is intended to have, nor shall any
Certificateholder have, any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement.
•1 I MR 1 • yy- ),
The Trustee shall keep a fully executed or conformed copy of this
Agreement (together with all amendments, supplements, waivers and
consents hereto) on file at its Corporate Trust Office and shall
permit reasonable inspection (and limited copying) to be made of
this Agreement during normal - business hours by any
Certificateholder or by its designee, at such Person's expense,
FwWIWJW147W0WGAW Mucb u. 190 59
provided that the Person purporting to be such Certificateholder or
designee establishes his identity and capacity to the Trustee's
satisfaction.
SECTION 10.04. Govarn;= T�aw, Except for the Secretary's
rights and obligations under the Act and the Secretary's
regulations thereunder (24 C.F.R. 590), this Agreement shall be
governed by, and construed in accordance with, the laws of the
State of New York, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SBCTION 20.05. Notices. All demands, notices and
communications hereunder shall be in writing and shall be deemed to
have been duly
given when and
if personally
delivered
at or
mailed
by registered
mail, postage
prepaid, (a)
in the
case
of the
Secretary, to the United States Department of Housing and Urban
Development, 451 Seventh
Street, S.W., Washington,
D.C.
20410,
Attention: Director, Financial
Management Division,
Office
of the
Assistant Secretary for Community Planning and Development, or such
other address as may hereafter be furnished to the Trustee in
writing
by the
Secretary, and (b) in the case
of the Trustee, to
Chemical
lank,
450 West 33rd Street, 15th Floor,
New York, New York
10001, Attention: Corporate Trustee Administration or such other
address as may hereafter be furnished to the Borrowers and to the
Secretary, in writing, by the Trustee, including any change of
address related to a merger or consolidation affecting the Trustee.
VVD0`WJ n1s70XGDGA OSmuehtl IM 60
Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Certificateholder as shown in the
Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have
been duly given, whether or not the Certificateholder receives such
notice.
SECTION 10.06. -gey-erabilirX of Previsions. If any one or
more of the covenants,
agreements,
provisions, or
terms of
this
Agreement shall be for
any reason
whatsoever held
invalid,
then
such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions, or
terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Certificate-holders thereof.
SECTI0K 10.07. ry m=t=2 =, This Agreement may be executed
in several counterparts, each of which shall be an original and all
of which together constitute but one and the same instrument.
VwDMCd.15A14m1GW43/G WituchIL I"P 61
s
X9 ASS NBSSEOB, the secretary and the Trustee have caused
their names to be signed hereto by .their respective officers
thereunto duly authorized as of the day and year first above
written.
Byp•
Ti e-
CSffiCAL SANK, as Trustee
$y=
Assistant Vice President
RWDCJtOSMnJ47QMWOAM MaeL U. IM 62
trom OF CSRTIFxcATS]
[unless this certificate, is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC "), to the Secretary or its agent for registration
of transfer, exchange, or payment, and any certificate issued is
registered in the name of cede & co. or in such other name as is
requested by an authorized representative of DTC (and.any payment
is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR To ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.]*
PARTICIPATION CERTIFICATE
Evidencing a fractional Undivided Interest in a portion
of a Trust consisting of Notes issued by
UNITS OF GENERAL LOCAL GOVERNMENT AND PV=C AGENCIES
GNATED BY SUCH UNITS OF GENERAL LOCAL GOVERN
and fully guaranteed as to timely payment of
principal and interest by
YC!"
Certificate No.
SERIES: MW 19 --
Pass - Through Interest
Rate:
Date of Issuance:
Distribution Dates:
maturity Date:
S
Original Principal Amount
representing a [ It Fractional
Undivided Interest in a portion of
a Trust consisting of the Principal
Amounts ,of the Notes due on the
Principal Due Date set forth below
Principal Due Bate:
CUSIP No.:
SWI)MOL1571147GN00431 M blank 1I. 1999 A -1
E
t This language will appear only on Certificates held by DTC or
its nominee.'
SWDmos.7sn147O W Mw* 11. M9 A -2
0
TM CBRTZFIR.S TM , is the registered
owner of the. Fractional Undivided Interest set forth above, - in a
portion of a Trust consisting of Notes issued by Units of General
Local Government and Public Agencies designated by such Units of
General Local Government ( "Borrowers") and guaranteed by the
Secretary of the United States Department of Housing and Urban
Development (the ■Secretary -). The holder of this Certificate (the
"Certificateholder") is entitled to the benefits of a Trust
Agreement dated as of January 1; 1995, as supplemented by a
Supplement to the Trust Agreement, dated the Date of Issuance set
forth above (together with the Trust Agreement, the "Agreement*),
each by and between the Secretary, as sponsor of such Trust created
on behalf of the Borrowers, and Chemical Bank (or any successor
thereto), as Trustee. A11 capitalized terms used herein without
definition shall have the respective meanings ascribed to them in
the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which
Agreement the Certificateholder by virtue of the acceptance hereof
assents and by which such Certificateholder is bound.
The Trustee will distribute on each Distribution Date, or, if
any
such
day is not a Business
Day, on the
next succeeding Business
Day
(the
" Distribution Date "),
commencing
on the Distribution Date
next succeeding the Date of Issuance, to the Person in whose name
Mama 11.197! A -3
this Certificate is registered at the close of business on the
Business Day immediately preceding such Distribution Date -(the
•Record Date*), an amount equal to accrued interest and receipts in
respect of principal due on Notes raving the saga; Principal Due
Date as set forth on this certificate, including any Guaranty
payments made by the secretary, but excluding the amounts, if any,
received as late payments of principal and interest and respecting
which the Secretary has made Guarantee Payments.
Interest will accrue on the outstanding principal amount of
this Certificate at the Pass - Through Interest Rate stated above,
calculated on the basis of a year of 360 days, consisting of twelve
30 -day months, from the Date of
Issuance
until payment
of
such
principal amount shall have been
made or
duly provided
for,
and
interest so accrued will be
payable
semi-annually
on
each
Distribution Date.
Where. DTC or its nominee is the sole Certificateholder,
distributions shall, be made in accordance with the applicable
Letter of Representations. if DTC or its nominee is not the sole
Certificateholder , distributions shall be made U) by the Trustee
or other paying agent to Certificateholders bolding Certificates in
an aggregate principal amount of $1 million or more by wire
transfer for the account of such Person in immediately available
BWDMOS.M14TOM UMM MU* It. M9 A-4
funds to such commercial bang located in the continental united
States having appropriate facilities for such purpose as may be
designated in writing by the person in whose name this Certificate
is registered to the Trustee (provided that such Person shall have
provided the Trustee with appropriate written wire transfer
instructions not later than 5 Business Days prior to the applicable
Distribution Date or (ii) by check to the person in whose name such
Certificates are registered at the close of business on the Record
Date. Notwithstanding the above, the final distribution on this
Certificate will be made on the Distribution Date coinciding with
the related Maturity Date, or, if the final distribution shall
occur- prior to such date, such final distribution will be made
without regard to the Record Date after notice by the Trustee of
the pendency of such distribution and of the date on or after which
this Certificate may be presented and surrendered for payment, and,
in either case, only upon presentation and surrender of this
Certificate at the office or agency maintained by the Secretary
pursuant to the Agreement.
unless the certificate. of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
BWDCnW.WnI47QMW43A0W Much n. 1999 A -5
This Certificate is one of a duly authorized issue of Section
108 Government Guaranteed Participation Certificates of the series
set forth on the face of this Certificate (herein called the
•Certificates ") and representing the Fractional Undivided Interest
set forth on the face hereof in (i) a portion of a Trust consisting
of the Principal Amounts of Notes due on the Principal Due Date
specified above, (ii) such funds as from time to time may be
credited to the certificate account relating to this series created
by the Trustee pursuant to the Agreement (the "Certificate
Account") and (iii) the Guaranty with respect to such Notes (the
Notes, such funds Credited to the Certificate •Account, and the
Guaranty being hereinafter called the "Trust•). The timely payment
of principal and interest is guaranteed by the Secretary pursuant
to the Guaranty.
By acceptance hereof, the Certificateholder acknowledges and
agrees that, in consideration for the Guaranty and the Secretary's
guarantee of the timely payment of all distributions payable with
respect to this .Certificate, the Secretary has appointed the
Trustee to administer the Notes in accordance with the express
terms of the Agreement but shall retain full power and authority,
acting alone, to do any and all things in connection with such
administration which it may deem necessary or desirable, and shall
have the sole and exclusive right to take action and assert claims
Maft I9, 1499 A -6
with respect to the Notes. Any term of any Note may be modified by
such amendments as may be agreed upon from time to time by the
Secretary and the Borrower under such NotE. No such change in the
terms of any Note shall alter or affect the Secretary's guarantee
of timely payment, of all principal and interest on such Note or
this Certificate. The Certificateholder acknowledges and agrees
that the Trustee shall have only those duties expressly provided in
the Agreement and shall have no other duties or responsibilities
with respect to the Certificateholders or the Trust, except that,
as long as DTC or its nominee shall be the only registered
Certificateholder, the Trustee shall act as DTC's agent solely for
the purpose of enforcing the Certificate Guarantee.
Upon the payment in full of all amounts due on any Note
(including pursuant to the Guaranty), the Trustee shall promptly
release and assign such Note to the Secretary and such Note will no
longer constitute a part of the Trust.
As long as DTC is the sole Certificateholder, Certificates
having the same Maturity Date will be registered as a single
Certificate. Definitive Certificates issued under the Agreement
shall be issued is such denominations as the Secretary and the
Underwriters
shall agree
and
as are administratively acceptable to
the Trustee.
Prior
to due
presentation of this Certificate for
swccias.isniaaa000sms Mock 12. 19M A -7
registration of transfer, the Secretary and the Trustee and any
agent of the Secretary or the Trustee may treat the person in ,whose
name this Certificate is = registered as the owner hereof for all
Purposes, and neither the Secretary, the Trustee nor any such agent
shall be affected by notice to the contrary.
Pursuant to the Agreement, the Secretary will maintain a
designated office or agency where Certificates may be surrendered
for registration of transfer or exchange and where notices and
demands to or upon the Secretary in respect of the Certificates and
the Agreement may be served. The Secretary has initially appointed
the Corporate Trust Office of the Trustee as such office for said
purposes. The Secretary will give prompt written notice to the
Trustee and the Certificateholders of any change in the location of
any such office or agency.
The Trustee is the registrar of the Certificates. The Trustee
shall cause to be kept at the office or agency referred to above a
Certificate Register in which the Trustee shall provide for the
registration of Certificates and of transfers and exchanges of
Certificates as provided in the Agreement.
A service charge equal to a reasonable fee of the Trustee
shall be charged to the Person presenting this Certificate for
swacn0s.ssnI4M=W WW mad u. IM A-B
transfer or exchange upon any registration of transfer or exchange
of this Certificate, and the Trustee may require payment of a sum
sufficient to cover any tax or governmental chary that may be
imposed in connection with any transfer or -exchange of this
certificate.
The
Agreement
may be
amended from
time
to
time
by
the
Secretary
and the
Trustee
without the
consent
of
any
of
the
Certificateholders, =avided, howeYmr, that no such amendment shall
reduce in any manner the amount of, or delay the timing of,
payments received on Notes, including Guarantee Payments, which are
required to be distributed on any certificate without the consent
of the affected Certificateholder. No such amendment,
modification, waiver or consent shall adversely affect the rights
Of the Certifieateholders of any certificate issued in accordance
with the terms of the Agreement and outstanding at the time of such
amendment, modification, waiver or consent.
The Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights,
benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
VWDC110.151114MMOGAMMIX& III Igo A-9
The obligations created by the Agreement and the Trust created
thereby with respect to this certificate shall terminate up= the
final payment of the last remaining ')rincipal Amount, together with
accrued and unpaid interest thereon. to the Certificateholders by
the Trustee or the Secretary or pursuant to applicable law with
respect to unclaimed funds as the case may be.
BWDMOS.ISM470A D P&wh I1, M A-10
IN W=T WS VM=F,' the Secretary bas caused this certificate, .
to be duly executed an its behalf by its issuing agent; the
Trustee, under the official.saal of the Trustee.
CMMaCAL BANK.
as Trustee
By:
Authorized Officer
[seal]
Attest:
By:
Authorized officer
FORM OF TRUSTEE'S CERTIFICATE OF AMMOTICATION
This is one of the Certificates referred to in the within -
mentioned Agreement.
CSSM=CAL BANK,
as Trustee
By:
Authorized Officer
Date:
SWDCriOS MAltmMeoOt6MbbS&11.19M A-11
The Secretary hereby unconditionall= guarantees to the
Certificateholder, when this Certificate Guarantee is executed on
behalf of the secretary, authenticated and delivered by the
Trustee, the timely payment of all distributions payable with
respect.to this Certificate when and as the same shall become due
and payable according to the terms of this Certificate and of the
Agreement.
The Secretary hereby agrees that the.Secretary's obligations
hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of this Certificate or the Agreement,
the absence of any action to enforce the same, any waiver or
consent by the Certificateholder or by the Trustee with respect to
any provisions hereof or of the Agreement, the recovery of any
judgment against the secretary or any action to enforce the same or
any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. The Secretary
hereby waives diligence, presentment, demand of payment, any right
to require a proceeding first against the Trust,'protest or notice
with respect to this Certificate and all demands whatsoever, and
covenants that this Certificate Guarantee will not be discharged
swxnas ursu�aaaovrmns WW* U. ten A -12
except by complete performance of the obligations contained in this
Certificate and in this Certificate Guarantee.
The Secretary shall be subrogated to all rights of the Trustee
and the Certificateholders to receive payments made by the
Borrowers pursuant to the Notes in respect of any amounts paid by
the Secretary pursuant to the provisions of this Certificate
Guarantee or the Agreement.
This Certificate Guarantee shall be governed by and construed
in accordance with the federal law of the United States of America.
The full faith and credit of the United States is pledged to
the performance of this Certificate Guarantee.
All terms used in this Certificate Guarantee which are defined
in the Agreement shall have the meanings assigned to them in the
Agreement.
This Certificate Guarantee shall not be valid or obligatory
for any purpose until the certificate of authentication on the
Certificate upon which this Certificate Guarantee is endorsed shall
have been executed by the Trustee by the manual signature of one of
its authorized officers.
BWDcnw.tsn147WQWGA305IS I It. ON A -13
3N WXTM SS IIMMZW, the Secretary has caused this Certificate
Guarautee to be duly ameacated.
Title-
sWaGtosssnuTa000sumos MueBli. 1999 A -14
d
JPMW OF ASSIG R=3
FOR VALUE RECEIVED the undersigned sell(s), assign (s) and
transfer(s) unto
(Insert Social Security
or Other Identifying
Number of Assignee)
(Please Print or Type Name
and Address, including Zip Code, of Assignee)
the within Certificate and hereby irrevocably constitutes and
appoints attorney to
register the transfer of said Certificate on the books kept for
registration thereof, with full power of substitution in the
premises.
Bated:
Signature:
by a member firm of the New Fork
Stock Exchange or a commercial
bank or trust company.
swccnw- nawwM GWOMmbs1.IM A-15
e
0
•
relating to
$ Aggregate original Principal Amount
SECTION 108 GOVERNMENT GUARANTEED
PARTICIPATION CERTIFICATES, SERIES BUD 19---
This SUPPLEMENT, is-entered into by the SECRETARY OF HOUSING
AND URBAN DEVELOPMENT (the "Secretary") and CHEMICAL BANK, as
trustee (the eTrasteee) under that certain Trust Agreement, dated
January 1, 1995, by and between the Trustee and the Secretary, as
sponsor of a Trust created on behalf of certain units of general
local government and public agencies designated by such units of
general local government (the eAgreemente). All capitalized terms
used but not defined herein have the meanings ascribed thereto in
the Agreement.
WITNESSETH
WHEREAS, pursuant to the Agreement, the Trustee is to hold in
trust certain Notes guaranteed by the Secretary and to issue
Certificates evidencing beneficial interests in a trust consisting
of such Notes (the eTruste); and
WHEREAS, pursuant to the Agreement, the Secretary and the
Trustee are to enter into this Supplement whereby the Secretary
delivers the Notes and related Guaranty to the Trustee and the
Secretary directs the Trustee to issue the Certificates;
swDvms unw&wmx3w mu& u. m B -1
kOWt THEREFORE, in consideration of these premises, the
parties agree as follows:
The Secretary hereby delivers to the Trustee (a) the
Notes (together with any necessary endorsements thereon) listed on
the attached Schedule 1, as identified by Borrower, Aggregate
Principal Amounts, Principal Amounts, Principal Due Dates and
interest rates and (b) the related Guaranty to hold in trust for
the
benefit of
the Certificateholders. The
Secretary
acknowledges
the
terms and
conditions of the Agreement
and hereby
agrees that
the Trust shall be governed by the terms thereof. The term "Trust"
as used herein shall
refer to
that Trust established as a
result of
the delivery to the
Trustee
of the Notes and related
documents
referred to herein.
2. Aitherit3to Tga"P C rt; 'cater.
The Secretary hereby directs the Trustee, as agent for
the Secretary, to issue Certificates with respect to the Trust as
follows:
a. Name of Series. The designation of the Series authorized
hereby shall be "Section 1os Government Guaranteed Participation
Certificates, Series M3D 19_ Guaranteed by the Secretary of
Housing and.Urban Development.•
b. 7 +anco of ['== a Pursuant to Section 2.03
of the Trust Agreement, the Trustee is hereby authorized and
directed to execute on behalf of the Secretary, authenticate and
deliver, on this date, in the name of the Certificateholder, the
Certificates specified on the attached Schedule 2 against receipt
of the Notes, the related Guaranty and this Supplement.
3. Acknow1odg=ta and G`Prt,f ±cations,
a. The Secretary hereby certifies that it has satisfied
all conditions on its part to be performed or satisfied as a
condition to the issuance of the foregoing Certificates. without
limiting the provisions of Section 3.11 and Section 7.01 of the
Agreement, the Secretary further certifies that the.Trustee shall
be paid, - for services rendered in connection with the
administration of the Trust assets listed on the attached Schedule
1, and pursuant to Section 7.01 of the Agreement, a fee of $
b. . The Trustee hereby acknowledges receipt of the Trust
assets listed on the attached Schedule 1.
vwDG1951Sft1iJOm000gl63w uuvh u. im 8 -3
L]
C. This Supplement sba3.l constitute the Supplement
referred to in Section 2.01 of the Agreement.
IN WITMSS MMMF, ths'parties have caused this Supplement to
be executed this day of
By:
CMaCA.L WWK, as Trustee
By:
Assistant Vice President
sW=M.M147Q MMAM MAft 1I. rag B -4
N
.z
u
•�M1i�f: 'Y ' : Y'
Aggregate Principal Amounts Due on above Principal Due Dates
Principal
Se3ow r
Amounta 199 222— 192 199 700, Z,QQ-
vwDcnos.IS1II47QMWGFM IF 1 11.1999
199
+,
199
199_
Aggregate Principal Amounts Due on above Principal Due Dates
Principal
Se3ow r
Amounta 199 222— 192 199 700, Z,QQ-
vwDcnos.IS1II47QMWGFM IF 1 11.1999
AMENDED AND RESTATED
MASTER FISCAL AGENCY" AGREEMENT
among
the
SECRETARY OF HOUSING
AND URBAN DEVELOPMENT
and
THE CHASE MANHATTAN' BANK
(formerly known as Chemical Bank)
as Fiscal Agent
Dated as of May 17, 2000
31183/19
EXECUTION
Table of Contents
ARTICLE I
DEFINITIONS
ARTICLE II
DELIVERY AND REGISTRATION OF NOTES
Page
Section2.01. Details of Notes .......................................................................... ............................... 8
Section 2.02. Acceptance by Fiscal Agent ....................................................... ...............................
8
Section 2.03. Authorization Order ................................................................... ............. ..................
9
Section 2.04. Advances and Conversion Date Advances under Variable/Fixed Rate
Notes........................................................................................ ...............................
10
ARTICLE III
ADMINISTRATION OF NOTES
Section 3.01. Modification of Notes .............................................................. ...............................
13
Section3.02. Redemption of Notes ............................................................... ...............................
13
Section 3.03. Collection on Guarantees ......................................................... ...............................
14
Section 3.04. Notification of Amounts Due ................................................... ...............................
14
Section 3.05. Collection of Payments; Note Account .................................... ...............................
15
Section 3.06. Fiscal Agent to Act as Paying Agent and Calculation Agent .. ...............................
16
Section 3.07. Permitted Charges Against Note Account ............................... ...............................
18
Section 3.08. Fiscal Agent to Cooperate; Release of Notes .......................... ...............................
18
Section 3.09. Replacement Notes .................................................................. ...............................
18
ARTICLE IV
PAYMENTS
Section4.01. Payments .................................................................................. . ...............................
19
ARTICLE V
REGISTRATION OF NOTES
Section 5.01. Registration of Transfers and Exchanges of Notes .................. ...............................
20
Section 5.02. Persons Deemed Holders ......................................................... ...............................
21
Section 5.03. Maintenance of Office or Agency ............................................ ...............................
22
ARTICLE VI
RIGHTS AND DUTIES OF BORROWERS
Section 6.01. Compensation and Indemnification of Fiscal Agent ............... ...............................
22
ARTICLE VII
RIGHTS AND DUTIES OF FISCAL AGENT
Section 7.01. Duties of Fiscal Agent ............................................................. ............................... 24
Section 7.02. Certain Matters Affecting Fiscal Agent ................................... ............................... 25
Section 7.03. Fiscal Agent Not Liable for Notes ........................................... ............................... 26
Section 7.04. Eligibility Requirements for Fiscal Agent . ..... : ... .... ............................ ..... ... .......... .. 27
Section 7.05. Resignation and Removal of Fiscal Agent ............................... ............................... 27
{liMIRI]
0
0
Section 7.06. Merger or Consolidation of Fiscal Agent......
Section 7.07. Fiscal Agent May Own the Notes ..................
Section 7.08. Fidelity Bond or Insurance .............................
Section 7.09. Fiscal Agent Not Liable for Investments.......
ARTICLE VIII
TERMINATION
Section 8.01. Termination ..................... ...............................
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Amendment ......................... ...............................
Section 9.02. Inspection of Documents by Holders .................
Section 9.03. Governing Law ................... ...............................
Section 9.04. Notices ................................ ...............................
Section 9.05. Severability of Provision ..... ...............................
Section 9.06. Counterparts ........................ ...............................
29
29
... ............................... 29
.... ............................... .
............. I .................... ...... 30
......... ............................... 31
......... ............................... 31
......... ............................... 31
......... ............................... 32
......... ............................... 32
......... ............................... 33
Exhibit A -1. Form of Variable/Fixed Rate Note
Exhibit A -2. Form of Fixed Rate Note
Exhibit B. Form of Guarantee
Exhibit C. Form of Authorization Order
Exhibit D. Form of Advance Order
Exhibit E. Form of Notice of Missed Borrower Payment from
Fiscal Agent to Secretary
Exhibit F. Form of Notice for Guarantee Payment from Fiscal
Agent to Secretary
Exhibit G. Schedule of Fiscal Agent Fees for Variable/Fixed Rate Note Services
31183/19
ii
0
AMENDED AND RESTATED
0
MASTER FISCAL AGENCY AGREEMENT
This MASTER FISCAL AGENCY AGREEMENT (the "Agreement ") dated as of May
17, 2000 is made and entered into by and between the Secretary of Housing and Urban
Development on behalf of certain Borrowers, as hereinafter defined and The Chase Manhattan
Bank (formerly known as Chemical Bank), a banking corporation organized and existing under
the laws of the State of New York, as Fiscal Agent (the "Fiscal Agent ").
This Agreement amends and restates the Master Fiscal Agency Agreement dated as of
November 28, 1995 among the Borrowers (as defined therein) and Chemical Bank, a bank
organized and existing under the laws of the state of New York, as Fiscal Agent. This
Agreement is effective only with respect te, those Notes delivered to the Fiscal Agent on or after
the date first referenced above.
In consideration of the premises and of the mutual agreements herein contained, the
parties agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless the context
otherwise requires, shall have the following meanings:
Act: The Housing and Community Development Act of 1974, as amended, 42 U.S.C. §§
5301 et seq.
31133;19
•
•
Advances: Such amounts as may be advanced to or on behalf of a Borrower under a
Variable/Fixed Rate Note from time to time by the Holder of such Variable/Fixed_ Rate Note
pursuant to an interim financing agreement. unless expressly stated, the term "Advance" does
not include "Conversion Date Advances."
Advance Order: The written order of the Secretary delivered to the Fiscal Agent pursuant
to Section 2.04(b) hereto, in substantially the form set forth in Exhibit D hereto.
Agreement: This Amended and Restated Master Fiscal Agency Agreement and all
amendments and supplements hereto.
Aggregate Principal Amount: For each Variable/Fixed Rate Note, the sum of all
Advances and, if applicable, Conversion Date Advances, under such Variable/Fixed Rate Note.
Authorization Order: The written order of the Secretary delivered to the Fiscal Agent
pursuant to Section 2.03 and Section 2.04(a) or (c) hereto, in substantially the form set forth in
Exhibit C hereto.
Authorized Officer: When used with respect to the Fiscal Agent, means the chairman or
any vice chairman of the board of directors, the chairman or any vice chairman of the executive
committee of the board of directors, the chairman of the trust committee, the president, any vice
president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier,
any assistant cashier, any trust officer or assistant trust officer, the controller or any assistant
controller or any other officer of the Fiscal Agent customarily performing functions similar to
those performed by any of the above designated officers and also means, with respect to a
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particular corporate trust matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
Authorized Official: When used with respect to the United States Department of
Housing and Urban Development,. the Secretary and any other official of such department who at
the time shall have been duly authorized to act on behalf of the Secretary.
Borrowers: Eligible public entities, or public agencies designated by such eligible public
entities, which have issued debt obligations guaranteed by the Secretary pursuant to Section 108.
Business Day A day on which banking institutions in New York City are not required or
authorized to remain closed and on which the Federal Reserve Bank of New York and the New
York Stock Exchange are not closed.
Commitment Amount: The commitment amounts stated on the Commitment Schedule
for a Variable/Fixed Rate Note for each related Principal Due Date. The aggregate of all
Advances for each Principal Due Date shall not exceed the related Commitment Amount for any
Variable/Fixed Rate Note.
Contract: Any Contract for Loan Guarantee Assistance, including any amendments,
entered into between a Borrower and the Secretary providing for the issuance of Notes and their
related Guarantees by such Borrower and the Secretary, respectively.
Conversion Date: The date (if any) upon which a Variable/Fixed Rate Note is (i)
delivered by its Holder to the Fiscal Agent against payment therefor by the purchasers selected
by the Secretary to make such payment and (ii) assigned to The Chase Manhattan Bank (or any
successor thereto) acting in its capacity as Trustee (the "Trustee ") pursuant to a Trust Agreement
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among the Secretary and the Trustee, dated as of January 1, 1995, as such agreement may be
amended or supplemented. Upon the occurrence of (i) and (ii) in the previous sentence such
Variable/Fixed Rate Note converts to a fixed rate obligation, in accordance with its terms.
Conversion Date Advances: Amounts funded on the Conversion Date of a Variable/
Fixed Rate Note pursuant to Paragraph 2.04(c).
Coroorate Trust Office: The Chase Manhattan Bank's Structured Finance Operations
Department, which, at the date of the execution of this Agreement, is located at 450 West 33`"
Street, 8t1i Floor, New York, New York 10001, or any subsequent office of The Chase Manhattan
Bank of which the Secretary is notified or the office of a successor fiscal agent.
Date of Note: The date of note stated on any Note.
Director. Financial Management Division: The Director of the Financial Management
Division, Office of the Assistant Secretary for Community Planning and Development, U.S.
Department of Housing and Urban Development, and any other official of such department who
at the time shall have been duly authorized to act on behalf of such Director.
Fiscal Agent: The Chase Manhattan Bank (formerly known as Chemical Bank), a
banking corporation organized and existing under the laws of the State of New York, or its
successor in interest, or any successor fiscal agent appointed as herein provided.
Fixed Rate Notes: Notes issued by Borrowers with scheduled fixed interest rates from
the date of issuance, substatltially in the form of Exhibit A -2 hereof.
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Funding Date: In the case of a Variable/Fixed Rate Note, the date of an Advance under
such Note, which shall. be the Wednesday of any week as requested by a Borrower pursuant to
Section 2.04, unless otherwise agreed upon by the initial Holder of such Note and the Secretary.
If Wednesday is not a Business Day, then the Funding Date shall be the next succeeding
Business Day. Notwithstanding the foregoing, no Funding Date shall occur during the seven day
period immediately preceding either (i) a Public Offering Date, or (ii) a Payment Date.
Government Oblieation: A direct obligation of, or any obligation for which the full and
timely payment of principal and interest is guaranteed by, the United States of America,
including but not limited to, United States Treasury Certificates of Indebtedness, Notes and
Bonds - State and Local Government Series, or certificates of ownership of the principal of or
interest on direct obligations of, or obligations unconditionally guaranteed by, the United States
of America, which obligations are held in trust by the Fiscal Agent.
Guarantee: With respect to any Note, the related Guarantee made by the Secretary
pursuant to Section 108 by which the Secretary guarantees the timely payment of the principal of
and interest on such Note.
Guarantee Payment: Any payment made by the Secretary pursuant to a Guarantee.
Holder: The Person in whose name a Note is registered in the Note Register.
Maximum Commitment Amount: The sum of the Commitment Amounts stated on the
Commitment Schedule attached to a Variable/Fixed Rate Note. The aggregate of all Advances
under a Variable/Fixed Rate Note shall not exceed the Maximum Commitment Amount for such
Note.
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Note: Any note issued by a Borrower and guaranteed by the Secretary pursuant to
Section 108, substantially in the form set forth in Exhibit A -1 or A -2 hereto, that is subject to this
Agreement.
Note Account: The account created and maintained pursuant to section 3.05.
Note Resister. The Register maintained by the Fiscal Agent pursuant to Section 5.01.
Opinion of Counsel: A written opinion of counsel for the Secretary, who may be, but
does not have to be, an employee of the Department of Housing and Urban Development.
Payment Date: With respect to all payments due for a Fixed Rate Note or a
Variable/Fixed Rate Note after the Conversion Date, each February 1 and August 1. With
respect to all payments due for a Variable/Fixed Rate Note on or before the Conversion Date,
each February 1, May 1, August I and November I and the Conversion Date or any other date
specified in the applicable Note, on which interest or principal is due and payable. If any
Payment Date is not a Business Day, then payments payable on such Payment Date shall be
made on the next Business Day.
Person: Any individual, corporation, partnership, joint venture, association, joint -stock
company, trust, unincorporated organization or government, or any agency or political
subdivision thereof.
Principal Amount: In the case of a Variable/Fixed Rate Note (i) before the Conversion
Date for such Note, the aggregate amount of Advances made for each Principal Due Date
specified in the related Commitment Schedule thereunder, less the amount of any redemption or
principal repayment; and (ii) on or after the Conversion Date, the principal amount stated for
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each Principal Due Date in Schedule P &I thereto less the amount of any Optional Redemption
(as defined in the Note) or principal repayment. In the case of a Fixed Rate Note, the principal
amount stated for each Principal Due Date in Schedule P &I thereto less the amount of any
Optional Redemption (as defined in the Note) or principal repayment.
Principal Due Date: The stated due date of a Principal Amount outstanding under a Note.
If any Principal Due Date is not a Business Day, then payments payable on such Principal Due
Date shall be made on the next Business Day.
Public Offerine Date: The date of the sale of specified Notes to the underwriters selected
by the Secretary in connection with the pooling and public offering of the related series of
participation certificates backed by such specified Notes.
Record Date: With respect to any Note, the close of business on the fifteenth calendar
day of the month next preceding the month in which a Payment Date occurs.
Secretary: The Secretary of Housing and urban Development.
Section 108: Section 108 of Title I of the Act.
Trustee: The Chase Manhattan Bank, acting in its capacity as Trustee pursuant to the
Trust Agreement.
Trust Agreement: The Trust Agreement dated as of January 1, 1995, among the
Secretary and The Chase Manhattan Bank, as such agreement may be amended or supplemented
from time to time.
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Variable /Fixed Rate Notes: Notes issued by Borrowers with a variable interest rate,
which converts to scheduled fixed interest rates on the Conversion Date, in substantially the form
of Exhibit A -I hereto.
ARTICLE II
DELIVERY AND REGISTRATION OF NOTES
Section 2.01. Details of Notes. From time to time following the execution and delivery
hereof and in accordance with the procedures described herein, the Secretary shall deliver to the
Fiscal Agent one or more Notes of one or more Borrowers. Each Note shall be in the form of a
fully registered note. The Aggregate Principal Amount of a Variable/Fixed Rate Note shall not
exceed such Variable/Fixed Rate Note's Maximum Commitment Amount. Each Note shall be
registered in the Note Register pursuant to instructions to be furnished by the Secretary to the
Fiscal Agent in accordance with Sections 2.03 and 2.04. Pursuant to the Contract related to each
Borrower's Note, each Borrower will have authorized the Secretary to list its Note in the
Authorization Order delivered by the Secretary pursuant to Sections 2.03 or 2.04(a) or (c) or any
Advance Order delivered by the Secretary pursuant to Section 2.04(b). The Fiscal Agent shall
have no responsibility in respect of the authorizations of any Borrower under the relevant
Contract or with respect to the information supplied by the Secretary in the Authorization Order
from the Secretary pursuant to Section 2.03 or 2.04(a) or (c) or the Advance Order from the
Secretary pursuant to Section 2.04(b). Pursuant to such Contract, each Borrower designates and
appoints the Fiscal Agent as the paying agent and calculation agent for its Variable/Fixed Rate
Notes prior to the Conversion Date, and registrar for all of such Borrower's Notes.
Section 2.02. Acceptance by Fiscal Agent. Upon its receipt of any Notes and their
related Guarantees, the Fiscal Agent will acknowledge receipt of such Notes and related
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Guarantees delivered by the Secretary to the Fiscal Agent, as paying agent and calculation agent
for the Variable/Fixed Rate Notes prior to the Conversion Date, and as registrar for all of the
Borrowers' Notes.
Section 2.03. Authorization Order. (a) Not less than two (2) Business Days (or such
shorter period as the Secretary and the Fiscal Agent shall agree upon) before (i) the time of any
delivery of any Notes to Holders under this Agreement and (ii) any Conversion Date, the
Secretary shall deliver to the Fiscal Agent an Authorization Order substantially in the form of
Exhibit C hereto, which Authorization Order shall direct the Fiscal Agent to: (i) for Fixed Rate
Notes, register such Notes, including Schedule P &I thereto; or (ii) for Variable/Fixed Rate
Notes, either register the Notes before an initial Advance thereunder, or, on the related
Conversion Date, attach the original or revised Schedule P &I to the specified Notes, as
applicable. Following such actions, the Fiscal Agent shall deliver the Notes and their related
Guarantees in accordance with the terms set forth in the related Authorized Order(s).
(b) Each such order shall set forth the following information, (if necessary):
(1) the Note number(s) and Borrower name(s)
(2) the name and address of the Holder;
(3) whether each Note is Fixed Rate or a Variable/Fixed Rate Note;
(4) in the case of any Variable/Fixed Rate Note, the aggregate amount of any
initial Advance, and the allocation of such Advance to each related Commitment Amount
and Principal Due Date;
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(5) the Principal Amount and Principal Due Date (or dates) in the case of a Fixed
Rate Note;
(6) whether the Notes and their related Guarantees are to be held physically by
the Fiscal Agent or transferred to the Holder (or its nominee) of the Notes, and the date
such delivery or transfer is to occur;
(7) whether the Notes or certain Principal Amounts due under the Notes are
subject to redemption or acceleration prior to their Principal Due Dates and if so, the
terms and conditions relating to any redemption or acceleration; and
(8) any additional information, directions or Schedules from the Secretary
regarding the issuance of the Notes.
(c) the Fiscal Agent agrees that following its receipt of. (1) the Notes and their related
Guarantees from the Secretary on behalf of the Borrowers; (2) an Authorization Order from the
Secretary covering such Note or Notes; and (3) such Opinion of Counsel and other documents as
the Fiscal Agent may reasonably request, the Fiscal Agent will register and deliver the Notes and
their related Guarantees in accordance with, and upon the direction of, the Secretary as specified
in such Authorization Order.
Section 2.04. Advances and Conversion Date Advances under Variable/Fixed Rate
Notes. (a) Initial Advances. Each Variable/Fixed Rate Note provides that the initial Holder
thereof shall make an initial Advance under the Variable/Fixed Rate Note on any applicable
Funding Date upon the written request of the Borrower and the approval of the Secretary. The
Borrower shall deliver its request for an initial Advance to the Secretary at least ten Business
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Days in advance of the requested Funding Date. Such request shall include the name of the
Borrower, each Principal Due Date for which an Advance is requested, and the amount of each
related initial Advance. The Secretary shall deliver to the Fiscal Agent an Authorization Order
evidencing such approval for all initial Advances requested for each relevant Funding Date,
either together with the related Variable/Fixed Rate Notes, Guarantees and such Opinions of
Counsel and such other documents as the Fiscal Agent has requested, or as otherwise agreed. If
the initial amount funded under a Variable/Fixed Rate Note is a Conversion Date Advance, then
the procedures set forth in Section 2.04(c) below apply instead of this paragraph or paragraph
2.04(b). The Fiscal Agent shall (i) disburse initial Advances in accordance with Section 2.04(d)
and the relevant Authorization Order, and (ii) reflect any such initial Advances on its books and
records.
(b) Subsequent Non - Conversion Date Advances. A Borrower may request. additional
Advances under a Variable/Fixed Rate Note from time to time for any Funding Date following
the date of such Note's initial Advance in accordance with the Contract. The Borrower shall
deliver its request for such an Advance to the Secretary at least five Business Days in advance of
the requested Funding Date. Such request shall include the name of the Borrower, the Note
number and Maximum Commitment Amount of the Note, the aggregate of funds requested under
the Advance, and the amount of the Advance allocated to each Principal Due Date and each
Commitment Amount, as applicable. The Secretary shall deliver an Advance Order,
substantially in the form of Exhibit D hereto, to the Fiscal Agent with respect to all Advances
approved by the Secretary for each Funding Date following the date of an initial Advance under .
a Variable/Fixed Rate Note. The Fiscal Agent shall (i) disburse such Advances in accordance
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with Section 2.04(d) and the relevant Advance Order; and (ii) reflect any such Advances on its
books and records.
(c) Conversion Date Advances. A Borrower may request a Conversion Date Advance
under a Variable/Fixed Rate Note. The Borrower shall deliver its request for such Conversion
Date Advance to the Secretary at least ten Business days in advance of the relevant Conversion
Date. Such request shall include the name of the Borrower, each Principal Due Date for which a
Conversion Date Advance is requested and the amount of any such Conversion Date Advances,
together with the Schedule P &I approved by the Secretary for the applicable Borrowers Note.
The Secretary shall deliver to the Fiscal Agent an Authorization Order and a revised Schedule
P &I including such Conversion Date Advances for each Variable/Fixed Rate Note for which a
Conversion Date Advance is made. The Fiscal Agent shall reflect any such Conversion Date
Advances on its books and records. The proceeds of each Conversion Date Advance, net of any
fees due from the Borrower pursuant to Section 6.01(a) hereof or Section 7.01 of the Trust
Agreement shall be disbursed to the Borrower by the Trustee on the Conversion Date_
(d) Procedures. Unless otherwise agreed, all documents required to be delivered to the
Fiscal Agent must be received by the Fiscal Agent two Business Days before the related Funding
Date or Conversion Date, as applicable. The Fiscal Agent shall notify the Holder of each
Variable/Fixed Rate Note of a requested Advance and payment instructions therefor no Iater than
10:00 a.m. on the Business Day before the Funding Date. The Holder of each Variable/Fixed
Rate Note shall remit to the Fiscal Agent Federal funds representing the aggregate amount of all
Advances for such Funding Date, which shall not be less than $25,000 (unless otherwise agreed
by the Holder and the Secretary) no later than 2:00 p.m. on such Funding Date. The Fiscal
Agent shall remit the proceeds of each Advance in accordance with the instructions provided to
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the Fiscal Agent by the Secretary to the respective Borrower thereof, net of any fees due the
Fiscal Agent pursuant to Section 6.01(a) hereof.
(e) Recordkeepina. The Fiscal Agent shall keep a record of (i) all Advances and
Conversion Date Advances; (ii) the related Commitment Amounts and the Maximum
Commitment Amount and any changes to the same relating to a redemption prior to a
Conversion Date or any changes for which the Secretary has provided written notice; (iii) any
payments (including prepayments) received in each case for any relevant Principal Due Date;
and (iv) any fees paid by the Borrower to the Fiscal Agent with respect to each Variable/Fixed
Rate Note (including any amounts withheld by the Fiscal Agent from disbursements to the
Borrower). By the fifth Business Day of each month, the Fiscal Agent shall provide the
Secretary and the Holder of the related Variable/Fixed Rate Notes with a report of the
information contained in the previous sentence for each Variable/Fixed Rate Note as of the last
day of the preceding month.
ARTICLE III
ADMINISTRATION OF NOTES
Section 3.01. Modification of Notes. To the extent permitted by the Note, any term of
any Note may be modified by such amendments as may be agreed upon from time to time by the
Secretary and the Borrower under such Note, with the consent of the Holder (if required). No
such change in the terms of any Note shall alter or affect the terms of the Secretary's guarantee.
Section 3.02. Redemption of Notes. If so provided in the applicable Note (subject to
the provisions set forth. herein and subject to the provisions set forth in such Notes), the
Variable/Fixed Rate Notes may be redeemable prior to the Conversion Date in whole or in part at
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the option of the Borrower. In order to redeem or prepay such a redeemable Note, the Borrower
shall give notice of its intention to redeem such Note to the Secretary and the Fiscal Agent not
less than fourteen calendar days prior to'the date on which the Borrower intends to redeem the
Note. Such notice shall specify the Principal Amount with respect to each Principal Due Date
that is to be redeemed. The Fiscal Agent shall give such notice to the Holder of such Note not
less than ten calendar days prior to the desired redemption date. After the Conversion Date, any.
Optional Redemption (as defined in the Note) of a Variable/Fixed Rate Note shall be in
accordance with the terms of such Note and the Trust Agreement. The Holders of Notes will
have no rights to demand prepayment or redemption of a Note.
Section 3.03. Collection on Guarantees. Pursuant to each Guarantee, the Secretary.
will unconditionally guarantee the payment of all principal and interest on the Note to which
such Guarantee relates when and as due in accordance with the terms of the Notes.
Section 3.04. Notification of Amounts Due. The Fiscal Agent, acting as Calculation
Agent, shall prepare and provide to each Borrower, with a copy to the Secretary and the Holder
thereof as of the relevant Record Date, a written schedule of total interest, fees (if applicable) and
any principal due on the Variable/Fixed Rate Notes of such Borrower fifteen days in advance of
the related Payment Date. In addition, if the Fiscal Agent receives a notice (i) from the Secretary
specifying the Conversion Date for specified Variable/Fixed Rate Notes, or (ii) from a Borrower,
specifying the date of a permissible prepayment or redemption prior to the Conversion Date, then
the Fiscal Agent acting as Calculation Agent shall promptly give notice (but in any event no later
than two Business Days after receipt of such notice) to the Holder as of the relevant Record Date
and the Secretary of the respective amounts (or its best estimate of the respective amounts if the
actual amounts cannot be determined on the date of such notice) of interest, fees (if applicable)
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and principal (if any), payable by the Borrowers on either (i) the Public Offering Date for all
Variable/Fixed Rate Notes to be included in such public offering, or (ii) the date of such
prepayment or redemption, as applicable. Thereafter the Secretary shall promptly give notice to
each such Borrower of the amount (or the best estimate of such amount provided by the Fiscal
Agent) of interest, fees (if applicable) and principal (if any), that such Borrower shall be required
to pay on the Public Offering Date or date of such redemption. Such notice shall include written
payment instructions with respect to such payment.
Section 3.05. Collection of Payments. Note Account. The Fiscal Agent shall establish
and maintain a separate, non - interest bearing trust account (the "Note Account ") into which the
Fiscal Agent shall deposit the following:
(a) All interest payments on each tariable/Fixed Rate Note made on or before the
Conversion Date of such Note, including those made by the Borrower and those made by the
Secretary pursuant to a Guarantee; and
(b) All principal payments on each Variable/Fixed Rate Note made on or before the
Conversion Date of such Note, including those made by the Borrower on a Principal Due Date,
those made by the Borrower as a prepayment or redemption, and those made by the Secretary
pursuant to a Guarantee.
(c) Any fee payments made by the Borrower on each Variable/Fixed Rate Note on or
before the Conversion Date of such Note.
Guarantee Payments made by the Secretary in accordance with the terms of Section 3.06
herein shall be deposited by the Fiscal Agent in the Note Account. The moneys paid pursuant to
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Section 3.05(a) and (b) above and held as part of the Note Account shall be held in trust for the
benefit of the Holders of the related Notes and shall be applied by the Fiscal Agent in accordance
with the provisions of Section 3.07 herein. Moneys paid pursuant to Section 3.05(c) above and
held as part of the Note Account shall be held solely for the benefit of the Fiscal Agent in its
individual capacity.
Section 3.06. Fiscal Agent to Act as Paving Agent and Calculation Agent. (a) The
Fiscal Agent shall receive the payments due on the Variable/Fixed Rate Notes made on or before
the Conversion Date of such Note and deposit such payments in the Note Account as provided in
Section 3.05. Each Borrower shall make such payments directly to the Fiscal Agent by 3:00 p.m.
(New York City time) on the seventh Business Day next preceding the relevant Payment Date.
No later than 1:00 p.m. (New York City time) on the sixth Business Day next preceding each
Payment Date, the Fiscal Agent shall determine whether all payments required to be made on
such Notes have been duly received from each Borrower. If such payments have not been
received, the Fiscal Agent shall notify the Secretary by a telephone call to the Director, Financial
Management Division, confirmed in writing by telex or telecopy in the form attached hereto as
Exhibit E, that the Secretary. may be required to make a Guarantee Payment, and shall provide
notice of the amount of such payment. If a payment (other than a fee payment) required to be
made by a Borrower on a Note has not been duly received by the Fiscal Agent by the close of
business on the third Business Day next preceding the Payment Date, then by no later than 10:00
a.m. (New York City time) on the Business Day next succeeding the relevant Payment Date, the
Fiscal Agent shall notify the Secretary, by a telephone call to the Director, Financial
Management Division, confirmed in writing by telex or telecopy, in the form attached hereto as
Exhibit F, that the Secretary is required to make a Guarantee Payment and shall provide notice of
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the amount of such payment. The Secretary shall make any required Guarantee Payment by wire
transfer to the Fiscal Agent in Federal funds, for subsequent payment by the Fiscal Agent to the
Holder in accordance with the terms of Section 4.01 herein. If a payment required to be made on
a Note has not been duly received from either the Borrower or the Secretary by 2:30 p.m. on the
second Business Day next succeeding the Payment Date, pursuant to the terms of the Borrower's
Note, interest shall accrue on the amount of such payment at the variable rate in effect for such
Note from the applicable Payment Date until the date of payment to the Fiscal Agent. The
Secretary shall use its best efforts to obtain for the Fiscal Agent payment of any unpaid fees due
from a Borrower. Any such payment shall be from the assets pledged by the Borrower to the
Secretary as security for the repayment of the Notes and related costs authorized by the
Secretary.
(b) The Fiscal Agent shall act also as calculation agent in respect of the Variable/Fixed
Rate Notes. The Fiscal Agent shall calculate the amount of interest and principal, if any, due on
each Variable/Fixed Rate Note on any Payment Date on or before the related Conversion Date at
least fifteen days in advance of such Payment Date in accordance with the terms and conditions
of such Variable/Fixed Rate Note. Pursuant to Section 3.04, the Fiscal Agent shall notify the
Borrower, the Secretary and the Holder of the Variable/Fixed Rate Note of the applicable
variable interest rates and amounts due (including any fees) with respect to the Variable/Fixed
Rate Notes, determined in accordance with this Section. The determination by the Fiscal Agent
of the variable interest rate for, and the calculation of the interest due on, the Variable/Fixed Rate
Notes pursuant to this Section shall (in the absence of manifest error) be final and binding.
The Fiscal Agent will keep records of all determinations under this Section, including,
but not limited to, a copy of the relevant page of the Wall Street Journal or similar publication or
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a print -out of any Telerate Page or similar computer screen or a copy of any communications
stating the applicable interest rate from the Holder that the Fiscal Agent used to calculate the
applicable interest rate for any Reset Date defined in the Note, and shall permit the Secretary or
any Holder of a Variable/Fixed Rate Note at any reasonable time to examine such records, and
will furnish such other information in respect of the determination of the interest rate as the
Secretary or any Holder of a Variable/Fixed Rate Note shall reasonably request.
Section 3.07. Permitted Charges Against Note Account. The Fiscal Agent shall, from
time to time, withdraw funds from the Note Account for the following purposes:
(a) First, to make payments to the Holders in the amounts and in the manner provided for
in Section 4.01;
(b) Second, to reimburse the Secretary for any Guarantee Payment made with respect to
the Notes to which the Note Account relates, provided that such reimbursement shall be limited
to amounts received on a Note by the Fiscal Agent that represent late recoveries of payments of
principal and/or interest respecting such Note for which any Guarantee Payment was made; and
(c) Third, to pay any fees owed to the Fiscal Agent, provided that such payment shall be
limited to amounts received by the Fiscal Agent that represent actual fees due and paid by a
Borrower on its Note; and
(d) Fourth, to clear and terminate the Account pursuant to Section 8.01 (if applicable).
Section 3.08. Fiscal Agent to Cooperate; Release of Notes. Upon payment in full to
the Holder of any Variable/Fixed Rate Note (including pursuant to the related Guarantee), the
Fiscal Agent shall obtain from the Holder and release the Note to the Secretary.
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Section 3.09. Replacement Notes. If (i) any mutilated Note is surrendered to the Fiscal
Agent, or the Fiscal Agent receives evidence to its satisfaction of the destruction, loss or theft of
any Note, and (ii) there is delivered to the Fiscal Agent such security or indemnity as may be
required by it to hold it, the Borrower and the Secretary harmless, then, in the absence of notice
to the Fiscal Agent that such Note has been acquired by a bona fide purchaser and upon the
Holder's paying the reasonable expenses of the Fiscal Agent, the Borrower under such Note shall
execute and the Fiscal Agent shall deliver, in exchange for such mutilated Note or in lieu of such
destroyed, lost or stolen Note, a new Note of like date, tenor and principal amounts, as
appropriate.
ARTICLE IV
PAYMENTS
Section 4.01. Payments. On each Payment Date that occurs on or before the
Conversion Date relating to a particular Variable/Fixed Rate Note, the Fiscal Agent, as paying
agent for the Borrower under such Note, shall pay to the corresponding Holder determined as of
the close of business on the next preceding Record Date (other than as provided in Section 8.01
respecting the final payment) all amounts credited to the Note Account in respect of principal
and interest on the related Notes as of 10:00 a.m. (New York City time) on the applicable
Payment Date, other than amounts, if any, which represent late recoveries of principal and/or
interest in respect of which, any Guarantee Payment was made. Interest and principal payments
on a Variable/Fixed Rate Note and, upon presentation and surrender of such Note at redemption
in full, or at the final Principal Due Date, the Aggregate Principal Amount then outstanding, are
payable (i) by mailing a check payable in New York clearing house funds to such Holder at the
address of such Holder on the Note Register or (ii) at the request of the Holder, by wire transfer
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to such commercial bank located in the continental United States having appropriate facilities
therefor as such Holder may designate in writing to the Fiscal Agent (provided that the Holder
shall have given the Fiscal Agent appropriate written wire transfer instructions not later than the
Record Date with respect to such payment). Payments on Fixed Rate Notes and on
Variable/Fixed Rate Notes after the Conversion Date shall be made in accordance with the Trust
Agreement.
REGISTRATION OF NOTES
Section 5.01. Registration of Transfers and Exchanges of Notes. The Fiscal Agent
shall be the registrar of the Notes for the purposes of registering the Notes and maintaining a
record of any transfers and exchanges of Notes as herein provided. The Fiscal Agent shall cause
to be kept at the office to be maintained in accordance with the provisions of Section 5.03 hereof,
a Note Register in which it shall record for each Note, the name and address of the registered
Holder, Commitment Amounts, the Principal Amounts and the Principal Due Dates thereof and
such other information as may be required by this Agreement or applicable law or regulation.
Registration of transfer shall be subject to such reasonable regulations as the Fiscal Agent
may prescribe. No registration of transfer or exchange of any Note may be made unless all
information required to be provided by the Holder has been given as provided in the
"Assignment and Transfer" portion of the form of Note. Upon surrender for registration or
transfer of any Note at the office that the Fiscal Agent maintains for such purpose pursuant to
Section 5.03, the Fiscal Agent shall cause the Borrower under such Note to execute and deliver
in the name of the designated transferee or transferees, one or more new Notes of like Aggregate
Principal Amount.
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At the option of the Holder, a Note may be exchanged for Notes of like Aggregate
Principal Amount, upon surrender at the office that the Fiscal Agent maintains for such purpose
pursuant to Section 5.03.
Every Note presented or surrendered for registration of transfer or for exchange shall be
duly endorsed by, or be accompanied by a written instrument of transfer or authorization for
exchange in form satisfactory to the Fiscal Agent duly executed by the Holder thereof or by its
attorney duly authorized in writing.
Exchanges and transfers will be without charge to the Person presenting the Note for
transfer or exchange, except that the Fiscal Agent may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any transfer or
exchange of a Note.
All Notes surrendered for registration of transfer or exchange shall be cancelled by the
Fiscal Agent in accordance with its standard procedures. All such cancelled Notes shall be
forwarded to the Secretary by the Fiscal Agent from time to time.
Section 5.02. Persons Deemed Holders. Prior to due presentation of a Note for
registration of transfer, the Borrower under such Note, the Secretary, the Fiscal Agent and any of
their agents may treat the Person in whose name any Note is registered as the holder of such
Note for the purpose of receiving payments pursuant to Section 4.01 hereof and for all other
purposes whatsoever. Neither the Borrower, the Secretary, the Fiscal Agent nor any of their
agents shall be affected by notice to the contrary. Notwithstanding the foregoing, the Borrower
under a Variable/Fixed Rate Note, the Secretary, the Fiscal Agent and any of their agents shall,
on and after the Conversion Date, treat the Trustee as the holder of such Note for the purpose of
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receiving payments pursuant to Section 4.01 and for all other purposes whatsoever. Neither the
Borrower, the Secretary, the Fiscal Agent nor any of their agents shall . be affected by any notice
to the contrary.
Section 5.03. Maintenance of Office or Agency. The Fiscal Agent shall maintain a
designated office or agency where Notes may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Borrowers or the Fiscal Agent in
respect of the Notes and this Agreement may be served. The Fiscal Agent designates its
Corporate Trust Office as such office for said purposes.
ARTICLE VI
RIGHTS AND DUTIES OF BORROWERS
Section 6.01. Compensation audIndemnification of Fiscal Agent. (a) Pursuant to
the related Contract, each Borrower under a Variable/Fixed Rate Note agrees to pay the Fiscal
Agent fees as provided in this Section for the services the Fiscal Agent provides in respect of
such Variable/Fixed Rate Note. Such fees shall be as set forth in Exhibit G hereof and shall be
either deducted by the Fiscal Agent directly from the proceeds of any Advance in respect of a
Variable/Fixed Rate Note, or included in the quarterly notification of amounts due that the Fiscal
Agent provides under Section 3.04, each in accordance with Exhibit G. Each Borrower also
shall pay the Fiscal Agent any additional compensation agreed to be paid to the Fiscal Agent.
The Borrowers will pay all out -of- pocket expenses, including fees and disbursements of counsel
incurred by the Fiscal Agent in the performance of its duties hereunder, provided, however, that
(1) the Fiscal Agent shall in no event acquire any lien upon any Notes administered pursuant to
this Agreement, or any moneys received with respect thereto (other than fee payments pursuant
to this Section 6.01(a) and Section 3.05(c)), or any claim against the Holders of the Notes, by
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22
0
•
reason of the failure of the Borrowers to pay any of such charges or expenses, and (2) the
Borrowers shall not be required to pay any out -of- pocket expenses incurred by the Fiscal Agent
to the extent that the expenses are chargeable under Section 5.01 hereof to persons requesting the
transfer or exchange of Notes.
The terns of this Section 6.01 with respect to claims arising in connection with the Fiscal
Agent's duties while acting as such shall survive the termination of this Agreement or the
resignation or removal of the Fiscal Agent.
(b) The Secretary hereby agrees:
(1) to reimburse the Fiscal Agent upon its request for all reasonable, otherwise
uncompensated out -of- pocket expenses, disbursements and advances incurred or made by
the Fiscal Agent in accordance with any provision of this Agreement (including the
reasonable compensation and expenses and disbursements of its agents, attorneys and
counsel and of all persons not regularly in its employ), except any such expense,
disbursement or advance that either was paid by Borrowers pursuant to Section 6.01(a),
or is attributable to its gross negligence, willful misconduct or bad faith; and
(2) to indemnify the Fiscal Agent for, and to hold it harmless against, any
loss, liability or expense incurred without bad faith, willful misconduct or gross
negligence on its part arising out of or in connection with the acceptance or
administration of this Agreement or the Notes, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The Fiscal Agent shall notify the
Secretary promptly of any claim for which it may seek indemnity under this Clause (2).
,nsan9
23
The Secretary shall defend the claim and the Fiscal Agent shall cooperate in the defense.
The Fiscal Agent may have separate counsel with the consent of the Secretary and the
Secretary will pay the reasonable fees and expenses of such counsel. The Secretary need
not pay for any settlement made without its consent.
(c) The unpaid obligations of the Borrowers under Section 6.01(a) and the Secretary
under Section 6.01 (b) shall be payable solely out of grants or other assets pledged by the
applicable Borrowers to the Secretary as security for repayment of the Notes (and related costs
authorized by the Secretary) pursuant to the applicable Contracts. The obligations of the
Secretary under Section 6.01 (b) shall survive the termination or expiration of this Agreement or
the resignation or removal of the Fiscal Agent.
ARTICLE VII
RIGHTS AND DUTIES OF FISCAL AGENT
Section 7.01. Duties of Fiscal Agent. The Fiscal Agent undertakes to perform only
such duties as are specifically set forth in this Agreement. With respect to each Variable/Fixed
Rate Note and the related Guarantee that are delivered to the Fiscal Agent, the Fiscal Agent shall
act as paying agent and calculation agent on or prior to the Conversion Date. The Fiscal Agent
shall act as registrar for all Notes for the duration of this Agreement. Except upon compliance
with the provisions of Sections 2.03, 2.04, 3.08 or 3.09, none of the Notes, their related
Guarantees or any other related instruments or documents shall be delivered by the Fiscal Agent
to the Holders or to the Secretary, or otherwise released from the possession of the Fiscal Agent.
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No provision of this Agreement shall be construed to relieve the Fiscal Agent from
liability to any Borrowers or the Secretary for its bad faith, willful misconduct or gross
negligence; provided, however, that:
(a) The duties and obligations of the Fiscal Agent shall be determined solely by the
express provisions of this Agreement; the Fiscal Agent shall not be liable except for gross
negligence or willful misconduct in the performance of such duties and obligations as are
specifically set forth in this Agreement; no implied covenants or obligations shall be read into
this Agreement against the Fiscal Agent and, in the absence of bad faith on the part of the Fiscal
Agent, the Fiscal Agent may rely conclusively, as to the truth and accuracy of the statements and
contents and the correctness of the opinions expressed therein, upon any certificates, opinions,
resolutions, statements, reports, documents, orders or other instruments furnished to the Fiscal
Agent and conforming to the requirements of this Agreement;
(b) The Fiscal Agent shall not be personally liable for an error of judgment made in good
faith by an Authorized Officer or Authorized Officers of the Fiscal Agent, unless it shall be
proved that the Fiscal Agent was grossly negligent in ascertaining the pertinent facts; and
(c) In no event shall the Fiscal Agent be liable hereunder for special, indirect or
consequential loss or damage of any kind whatsoever.
Section 7.02. Certain Matters Affecting Fiscal Agent. Except as otherwise provided
in Section 7.01:
(a) The Fiscal Agent may rely and shall be protected in acting or refraining from acting
upon any resolution, certificate of an Authorized Official, certificate of auditors or any other
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certificate, statement, instrument, opinion (including an oral opinion or advice of counsel),
report, notice, request, consent, order, appraisal, bond or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or parties;
(b) The Fiscal Agent may consult with counsel who may be, but does not have to be, an
employee of the Fiscal Agent and any opinion of such counsel, whether oral or written, shall be
full and complete authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in accordance with such opinion of counsel, and the Fiscal
Agent shall not be required to take any action in violation of law or any action that would, in its
reasonable determination, expose it to any fine or penalty imposed by law;
(c) The Fiscal Agent shall not be personally liable for any action taken, suffered or
omitted to be taken by it in good faith and believed by it to be authorized or within the discretion
or rights or powers conferred upon it by this Agreement;
(d) The Fiscal Agent may exercise any of the powers hereunder or perform any duties
hereunder either directly or by or though agents or attorneys and the Fiscal Agent shall not be
responsible for any misconduct or negligence on the part of any agent, attorney or securities
depository appointed with due care by it; and
(e) The Fiscal Agent shall not be obligated to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion, report, notice,
consent, order, approval or other paper or document.
Section 7.03. Fiscal Agent Not Liable for Notes. The recitals contained in the Notes
shall be taken as statements of each Borrower, and the Fiscal Agent assumes no responsibility for
26
their correctness. The Fiscal Agent makes no representation as to the validity or sufficiency of
this Agreement or of any Note, guarantee or related document or any defeasance and shall not be
held liable for any defect in any portion thereof. The Fiscal Agent shall not be accountable for
the use or application by the Secretary or any Borrower of any of the Notes or of the proceeds of
such Notes.
Section 7.04. Eiieibility Requirements for Fiscal Agent. The Fiscal Agent hereunder
shall at all times be a corporation having its principal office in the State of New York and
organized and doing business under the laws of such State of the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined capital and
surplus of at least 5100,000,000 and subject to supervision or examination by Federal or State
authority. If such corporation publishes re
orts of condition at least annually, pursuant to law or
the requirements of the aforesaid supervising or examining authority, then for the purposes of
this Section 7.04, the combined capital and the surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of condition so published.
In case at any time the Fiscal Agent shall cease to be eligible in accordance with the provisions
of this Section 7.04, the Fiscal Agent shall resign immediately in the manner and with the effect
specified in Section 7.05.
Section 7.05. Resignation and Removal of Fiscal Agent. Subject to the further
provisions of this Section 7.05, the Fiscal Agent may resign at any time and be discharged from
its duties as the Fiscal Agent hereunder by giving at least sixty (60) days' prior written notice of
such resignation to the Secretary and the Borrowers and specifying the date on which such
resignation is to take effect, and the Fiscal Agent may be removed by the Secretary as the Fiscal
Agent at any time, with or without cause, by giving at least five (5) Business Days' prior written
snainv
27
0 1 •
notice of such removal delivered to the Fiscal Agent and specifying the date on which removal is
to take effect. Upon any such resignation or removal, pursuant to the terms of each Borrower's
Contract, the Secretary may, without other formality than appointment and designation in writing
(a copy of which written instrument shall be promptly provided to the resigning or removed
Fiscal Agent), appoint a successor fiscal agent, provided that such successor fiscal agent shall be
eligible under the provisions of Section 7.04. Any successor fiscal agent appointed as provided
herein shall execute, acknowledge and deliver to the Secretary, the Borrowers and its
predecessor fiscal agent an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor fiscal agent shall become effective and such successor
fiscal agent, without any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with like effect as if
originally named as fiscal agent herein. Upon acceptance by such successor fiscal agent of its
appointment hereunder or in the absence of such an appointment upon the effective date of the
resignation or removal as specified in the applicable notice referred to above (or, if the notice
does not so specify, the expiration of the sixty (60) or five (5) day period referred to above), the
Fiscal Agent shall deliver to such successor fiscal agent or the Secretary, as the case may be: (i)
all of the Notes and their related Guarantees (if then held by the Fiscal Agent) and other property
relating to the Notes then in its custody; and (ii) all funds in or otherwise to the credit of the Note
Account other than any funds then held pursuant to Section 3.05(c). The Fiscal Agent shall
otherwise release, assign and deliver to such successor fiscal agent or the Secretary, as the case
may be, against receipt by such successor fiscal agent or the Secretary, as the case may be,
including without limitation, by transmitting to such successor fiscal agent or the Secretary, as
the case may be, for deposit in successor accounts, established by the successor fiscal agent or
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28
the Secretary, as the case may be, all other property relating to the Notes in its possession, and
effect a transfer of such property in such manner and pursuant to such instruments as the
- -- -Secretary shall- reasonably- request- -g{ie -Fiseal -Agent- shall- 3ikewisedeliver- at-such-time-to -such
successor fiscal agent or the Secretary, as the case may be, all of the Note Registers and all
related records and documents in its possession. The Fiscal Agent shall not be discharged from
its duties or obligations hereunder following its resignation or removal until such property has
been delivered to such successor or the Secretary, as the case may be, and transferred, as
provided above.
Section 7.06. Merger or Consolidation of Fiscal Agen t. Any corporation into which
the Fiscal Agent may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the Fiscal Agent
shall be a party, or any corporation succeeding to all or substantially all of the corporate bust
business of the Fiscal Agent, shall be successor of the Fiscal Agent hereunder, provided such
corporation shall be eligible under the provisions of Section 7.04, without the execution or filing
of any paper or any further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 7.07. Fiscal Agent Mav Own the Notes. The Fiscal Agent in its individual or
any other capacity may become owner or pledgee of the Fixed Rate Notes or the Variable/Fixed
Rate Notes (after the Conversion Date) with the same rights it would have if it were not the
Fiscal Agent.
Section 7.05. Fidelity Bond or Insurance. So long as any Note is administered
hereunder, the Fiscal Agent shall at all times maintain a fidelity bond or such insurance coverage
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29
in respect of its fiscal agent capacity hereunder as it ordinarily maintains when acting in such
capacity.
Section 7.09. Fiscal Agent Not'Liable for Investments. The Fiscal Agent shall have
no liability for any loss sustained as a result of any investments made pursuant to the instructions
of any of the parties hereto.
ARTICLE VIII
TERMINATION
Section 8.01. Termination. The respective obligations and responsibilities of the
Borrowers and the Fiscal Agent created hereby with respect to any Note administered by the
Fiscal Agent (other than the obligations of the Borrowers and the Fiscal Agent to make payments
to Holders as hereafter set forth) shall terminate upon the final payment of the last Note
administered by the Fiscal Agent at its final Principal Due Date. No notice need be given and
final payment will be made from the corresponding Note Account on the next following Payment
Date upon presentment and surrender of the Note at the office maintained pursuant to Section
5.03.
With respect to each Borrower, upon the final payment of principal of and interest on
each Note, for which a separate Note Account has been established pursuant to Section 3.05, the
Fiscal Agent shall notify the Secretary of any moneys deposited in such Note Account that have
remained unclaimed by any Holder entitled to receive the same for at least two (2) years after the
date upon which such final payment should have been made. The Fiscal Agent may, and upon
receipt of a written request of the Secretary shall, pay over to the Secretary the unclaimed
amount so deposited and the Holder shall thereafter look only to the Secretary for payment of
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such unclaimed amount, and all liability of the Fiscal Agent with respect to such unclaimed
amount shall thereon cease.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Amendment. No amendment, modification, termination or waiver of any
provision of this Agreement, nor any consent to any departure by any party from any provision
hereof binding upon such party, shall be effective unless the same shall be in. writing and signed
by the parties hereto. No such amendments, modification, waiver or consent shall adversely
affect the rights of the Holder or Holders of any Note issued in accordance with the terms of this
Agreement and outstanding at the time of such amendment, modification, waiver or consent
absent agreement by such Holder or Holders. The Fiscal Agent may, but shall not be obligated
to, enter into any amendments that affect its rights, duties and immunities under this Agreement.
Section 9.02. Inspection of Documents by Holders. The Fiscal Agent shall keep a
fully executed or conformed copy of this Agreement (together with all amendments,
supplements, waivers and consents hereto) on file at its Corporate Trust Office, and shall permit
reasonable inspection (and limited copying) to be made of this Agreement during normal .
business hours by any Holder or by its designee, at such Person's expense, provided that the
Person purporting to be such Holder or designee establishes his identity and capacity to the
Fiscal Agent's satisfaction.
Section 9.03. Governing Law. This Agre ement and the Notes and all rights hereunder
and thereunder and provisions hereof and thereof shall be govemed by, and construed in
accordance with, the laws of the State of New York applicable to contracts made and to be
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31
performed therein, and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
Section 9.04. Notices. All demands, notices and communications hereunder and under
the. Exhibits hereto shall be in writing and shall be deemed to have been duly given when and if
personally delivered at or mailed by registered mail, postage prepaid, (a) in the case of the
Secretary, to the United States Department of Housing and Urban Development, 451 Seventh
Street, S.W., Washington, D.C. 20410, Attention: Director, Financial Management Division,
Office of the Assistant Secretary for Community Planning and Development, or such other
address as may hereafter be fumished to the Fiscal Agent in writing by the Secretary, and (b) in
the case of the Fiscal Agent, to The Chase Manhattan Bank, 450 West 33rd Street, 8'h Floor, New
York, New York 10001, Attention: Structured Finance Operations, or such other address as
may hereafter be furnished to the Borrowers and to the Secretary, in writing, by the Fiscal Agent.
The Secretary shall provide the Fiscal Agent with Notice information for each Borrower in the
related Authorization Order. The Fiscal Agent is entitled to a copy of any notice given to any
Borrower or to the Secretary by any Holder. Any notice requested or permitted to be mailed to a
Holder shall be given by first class mail, postage prepaid, at the address of such Holder as shown
in the Note Register. Any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the Holder receives such notice.
Section 9.05. Severability of Provision. If any one or more of the covenants,
agreements, provisions, or terms of this Agreement shall be for any reason whatsoever held
invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions, or terms of this Agreement and shall in no way
31183/19
32
affect the validity or enforceability of the other provisions of this Agreement or of the Notes or
the rights of the Holders thereof.
Section 9.06. Counterparts. This Agreement maybe executed in several counterparts,
each of which shall be an original and all of which together constitute one and the same
instrument.
[Signature Page Follows]
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33
IN WITNESS WHEREOF, the Secretary and the Fiscal Agent have duly approved the
terms and provisions hereof by causing the names of their respective officers duly authorized to
be executed on this Agreement.
SECRETARY OF HOUSING AND URBAN
DEVELOPMENT
By-
Name:
Title:
THE CHASE MANHATTAN BANK, as Fiscal
Agent
By:
Name:
Title:
31 !83119
34
EXHIBIT AA
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
SECTION 108 LOAN GUARANTEE PROGRAM
[FORM OF VARIABLE/FIXED RATE NOTE (For Interim/Long -Term Financing))
NOTE NUMBER:
BORROWER:
MAXIMUM COMMITMENT
AMOUNT: S
COMMITMENT AMOUNTS: See
Commitment Schedule attached hereto
VARIABLEINTEREST
RATE: As set forth below.
REGISTERED
HOLDER:
DATE OF NOTE:
PRINCIPAL DUE DATES AND PRINCIPAL.
AMOUNT: Before the Conversion Date, the
aggregate of Advances made for each
applicable Principal Due Date specified in the
Commitment Schedule to this Note; on or after
the Conversion Date, the Principal Amount (if
any) Iisted for each Principal Due Date in
Schedule P & I hereto.
I. Terms Applicable Before the Conversion Date
A. Advances
For value received, the undersigned, (the
"Borrower ", which term includes any successors and assigns), a public entity organized and
existing under the laws of the State (or Commonwealth, if applicable) of
promises to pay to the Registered Holder (the "Holder ", -which term includes any successors or
assigns), at the time, in the manner, and with interest at the rate or rates hereinafter provided,
such amounts as may be advanced under this Note from time to time by the Holder for
disbursement to, or on behalf of the Borrower (individually, an "Advance", and collectively,
"Advances "). The Holder shall make Advances upon the written request of the Borrower and the
approval of the Secretary of Housing and Urban Development or his designee (the "Secretary"),
pursuant to the Contract for Loan Guarantee Assistance (as further defined in Section W.A. of
this Note, the "Contract "), and the Amended and Restated Master Fiscal Agency Agreement (the
"Fiscal Agency Agreement ") dated as of May 17, 2000, between The Chase Maiihattan Ba&
32189/19
(formerly known as Chemical Bank), as Fiscal Agent (the "Fiscal Agent "), and the Secretary.
The total_amoynt of Advances made for tacUdzicipal Due Date .underthis Note shalt not
exceed the applicable Commitment Amount for such Principal Due Date set forth on the
Commitment Schedule attached hereto. The aggregate of all Advances under this Note for all
Principal Due Dates shall not exceed the Maximum Commitment Amount specified on the
attached Commitment Schedule. The Fiscal Agent shall record the date and amount of all
payments and Advances on this Note and maintain the books and records of all such Advances
and Commitment Amounts for each corresponding Principal Due Date, and all payments. No
Advances shall be made on this Note after its Conversion Date.
As used herein, "Conversion Date" means the date (if any) upon which this Note is (i)
delivered by the Holder to the Fiscal Agent against payment therefor by the purchasers selected
by the Secretary to make such payment; and (ii) assigned to The Chase Manhattan Bank (or any
successor thereto) acting in its capacity as Trustee (the "Trustee ") pursuant to a Trust Agreement
among the Secretary and the Trustee, dated as of January 1, 1995, as such agreement may be
amended or supplemented (the "Trust Agreement "). Upon the occurrence of both (i) and (ii) in
the previous sentence, Section III of this Note applies, thereby converting this Note to a fixed
rate obligation.
B. Variable Rate of Interest
From and including the date of each Advance to but excluding the earlier of (i) the
Conversion Date, and (ii) the date of redemption or prepayment of such Advance pursuant to
Section LD. below (each such date of redemption or prepayment, a "Prepayment Date ") interest
shall be paid quarterly at a variable interest rate (as set forth below) on the unpaid principal
balance of each Advance on the first day of each February, May, August and November (each,
an "Interim Payment Date "), commencing on the fast Interim Payment Date after the Initial
Advance is made under this Note. Interest also shall be paid on each applicable Conversion
Date, Prepayment Date or Principal Due Date. The amount of interest payable on each Interim
Payment Date will represent interest accrued during the three -month period ending immediately
prior to such Interim Payment Date, or in the case of the first Interim Payment Date following
each Advance that is not made on an Interim Payment Date, the period from and including the
date of such Advance to but excluding the first Interim Payment Date following such Advance.
The amount of interest payable on this Note's Conversion Date, Prepayment Date, or on any
Principal Due Date that precedes such Conversion Date will represent interest accrued during the
period from the last Interim Payment Date to such Conversion Date, Prepayment Date, or
Principal Due Date, respectively.
The initial variable interest rate for each Advance will be set on the date of such Advance
and will be equal to 20 basis points (0.2 %) above the Applicable LIBO Rate (as hereinafter
defined) and thereafter will be adjusted monthly on the first day of each month (each, a "Reset
Date ") to a variable interest rate equal to 20 basis points (0.2 %) above the Applicable LIBO Rate
(such interest rate, as reset from time to time, the "Standard Note Rate "). If the Conversion Date
for this Note -bas not occurred by the March I following the initial Advance under this Note, then
32199119
A -1 -2
the terms of Appendix A shall be used to set the variable interest rate. If the Fiscal Agent does
not receive notice of either a Negotiated Special Interest Rate or Holder Determined Special -
Interest. Rate (as defined in Appendix A attached hereto) from the Secretary or Holder,
respectively, by the times specified in Appendix A to this Note, then the Standard Note Rate
shall apply for the period to which such Negotiated Special Interest Rate or Holder Determined
Special Interest Rate would otherwise apply. The Fiscal Agent may conclusively rely on any
such notice as to the correctness of any matters set forth therein. Appendix A shall be
inapplicable to this Note on or after the Conversion Date.
"LIBO Rate" for any given Business Day means, except in the case of manifest error, the
interest rate per annum published on that day in the Eastern Edition of The Wall Street Journal or
any successor publication ( "WSJ "), published by Dow Jones & Company, Inc., in the section
titled "Money Rates" (or any successor section) and opposite the caption "London Interbank
Offered Rates (LIBOR) — three months" (or any successor caption). If such rate does not appear
in WSJ, for each interest period, the LIBO Rate shall be the interest rate, converted to a bond -
equivalent yield basis, for deposits in U.S. dollars for three months which appears on Telerate
Page 3750 or such other page as may replace Page 3750 on that service or such other service or
services as may be nominated by the British Bankers' Association for the purpose of displaying
such rate (together, "Telerate Page 3750 ") as of 11:00 a.m., London time, on the day (the
"Determination Date ") that is two London banking days preceding the relevant Reset Date or
Advance. If such rate does not appear on Telerate Page 3750 on such Determination Date, such
rate shall be obtained from the Reuters Screen ISDA Page as of 11:00 am., London time, on
such Determination Date. If, in turn, such rate does not appear on the Reuters Screen ISDA Page
on such Determination Date, the offered quotation from each of four reference banks (expressed
as a percentage per annum) as of approximately 11:00 am., London time, on such Determination
Date for deposits in U.S. dollars to prime banks on the London interbank market for a 3 -month
period, commencing on the Reset Date or date of such Advance, shall be obtained If at least two
such quotations are provided, the LIBO RATE for such Reset Date or date of such Advance will
be the arithmetic mean of the quotations, rounded to five decimal places. If fewer than two such
quotations are provided as requested, the LIBO RATE for that Determination Date shall be the
rate for the most recent day preceding such Determination Date for which the LIBO RATE shall
have been displayed on Telerate Page 3750. The LIBO RATE for any interest period shall be
converted to a bond - equivalent yield basis by multiplying such rate by the actual number of days
in such interest period and dividing that number by 180.
"Applicable LIBO Rate" means: (1) with respect to the initial interest rate for the first
Advance hereunder, the LIBO Rate two London Banking Days before the date of such first
Advance; (2) with respect to the initial interest rate for any subsequent Advance made before the
first Reset Date, the interest rate borne by the first Advance; (3) with respect to the initial interest
rate for any subsequent Advance made after the first Reset Date, the LIBO Rate two London
Banking Days before the immediately preceding Reset Date; and (4) with respect to the
subsequent interest rate at any Reset Date for any Advance, the LIBO Rate two London Banking
Days before such Reset Date.
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A -1 -3
"London Banking Day" means any day in which dealings in deposits in United States
dollars are transacted in the London interbank market. Interest payable on or before the
Conversion Date shall be calculated on the basis of a 360 -day year and the actual number of days
lapsed.
C. Principal Amount
Prior to the Conversion Date, the aggregate amount of Advances under this Note for each
specified Principal Due Date shall be paid by the Borrower on such Principal Due Date (as
assigned to such Advances by the Secretary's instructions to the Fiscal Agent in accordance with
the Contract and the Fiscal Agency Agreement), unless this Note is redeemed before such
Principal Due Date as provided below.
D. Redemption before Conversion Date
At any time on or before the Conversion Date, the Borrower, with the consent of the
Secretary, may redeem this Note, in whole or in part, upon fourteen calendar days notice to the
Fiscal Agent and the Secretary, at the purchase price of one hundred percent (100 %) of the
unpaid Principal Amount to be redeemed, plus accrued interest thereon to the date of redemption.
Partial redemptions shall be credited against the applicable Principal Amount(s). The related
Commitment Amounts and the Maximum Commitment Amount shall be adjusted concurrently
with any such redemptions in accordance with the Secretary's instructions to the Fiscal Agent
pursuant to the Contract and the Fiscal Agency Agreement.
H. Conversion
The following events shall occur on the Conversion Date:
A. Schedule P &I
On the Conversion Date all Advances owed by the Borrower under this Note with the
same Principal Due Date shall be aggregated into a single Principal Amount that will accrue
interest at the fixed rate applicable to such Principal Due Date. Such Principal Amount may be
adjusted by the Fiscal Agent in accordance with the following paragraph or paragraph WE, as
applicable. Whether or not adjusted, the fixed rate applicable to each Principal Amount, together
with the applicable Principal Due Date each shall be listed by the Secretary in Schedule P &I.
Schedule P &I will be provided by the Secretary to the Fiscal Agent and attached to this Note by
the Fiscal Agent upon the Fiscal Agent's receipt of this Note on the Conversion Date.
B. Conversion Date Advances
If, on or prior to the Conversion Date, the Borrower has not utilized the entire
Commitment Amount indicated on the Commitment Schedule attached hereto for a given
Principal Due Date, the Borrower may, in accordance with the Fiscal Agency Agreement and the
—
-Contract, and with the approval of the Secretary, utilize-such Commitment Amount on the —
32189/19
A -1-4
Conversion Date to obtain a Conversion Date Advance. A "Conversion Date Advance" shall
_ mean anyount l which the $ ecsetarylnstruFtsShe�isc $lAgentio.increase.a.Principal
Amount on Schedule P &I for a given Principal Due Date, effective as of the Conversion Date of
this Note. Conversion Date Advances shall be funded by the sale of this Note to the purchaser
selected by the Secretary. The proceeds of a Conversion Date Advance (net of any applicable
fees) shall be distributed to or on behalf of the Borrower on the Conversion Date. The total
amount of Conversion Date Advances shall not-exceed the amount of any unused Commitment
Amounts for any Principal Due Date.
M. Terms Applicable Upon Conversion
The following terms shall apply to this Note from the Conversion Date (if any) until this
Note is cancelled, or matured and paid in full:
Commencing on the Conversion Date, the Borrower promises to pay to the Holder on the
applicable Principal Due Date each Principal Amount set forth on the attached Schedule P &I,
together with interest on each such Principal Amount at the rate applicable thereto specified on,
the Schedule P &I. Interest shall be calculated and payments shall be made in the manner set
forth below.
Interest on each scheduled Principal Amount of this Note due as of a given date specified
on Schedule P &I hereto shall accrue at the related per annum rate specified on Schedule P &I
from (and including) the Conversion Date to (but excluding) such Principal Due Date or, if
applicable, to the applicable Interest Due Date on which an Optional Redemption (as defined
below) occurs. Each interest amount accrued on each unpaid Principal Amount of this Note shall
be due semiannually as of February 1 and August 1 of each year (each such February 1 and
August 1, an "Interest Due Date ") commencing on the first such date after the Conversion Date,
until each Principal Amount listed on Schedule P &I to this Note is paid in full. Interest shall be
calculated on the basis of a 360 -day year consisting of twelve 30-day months. .
Certain Principal Amounts that are indicated as being eligible for Optional Redemption
on Schedule P &I maybe paid, in whole or in part, at the option of the Borrower as of any
Interest Due Date after the date specified in such schedule (an "Optional Redemption "). In order
to elect an Optional Redemption of a prepayable Principal Amount, the Borrower shall give .
notice of its intention to prepay a Principal Amount to the Trustee and the Secretary not less than
60 days nor more than 90 days prior to the Interest Due Date as of which the Borrower intends to
prepay the Principal Amount. The Trustee shall apply any payments received in respect of
Optional Redemptions in accordance with written instructions of the Borrower, as approved by
the Secretary. Principal Amounts that are not indicated as being eligible for Optional
Redemption on Schedule P &1 may not be prepaid.
32189/19
A -1 -5
IV. General Terms
A. Additional Definitions
For purposes of this Note, the following terms shall be defined as follows:
"Business Day" shall mean a day on which banking institutions in New York City are not
required or authorized to remain closed and on which the Federal Reserve Bank and the New
York Stock Exchange are not closed. If any payment (including a payment by the Secretary) is
required to be made on a day that is not a Business Day, then payment shall be made on the next
Business Day.
"Contract" shall mean the Contract for Loan Guarantee Assistance, and any amendments
thereto, between the Secretary and the Borrower, the designated public entity named therein (if
applicable), or the State named therein (if applicable), which refers to and incorporates this Note
by the number hereof.
"Principal Amount" shall mean: (i) before the Conversion Date for this Note, the
aggregate amount of Advances made for each Principal Due Date specified in the Commitment
Schedule attached to this Note, less the amount of any redemptions pursuant to Section I.D.
hereof, and any principal repayment; and (ii) on or after the Conversion Date, the principal
amount (if any) stated for each Principal Due Date in Schedule P &I attached hereto, less the
amount of any principal repayment and any Optional Redemptions made pursuant to Section III
hereof and the Trust Agreement.
B. Timely Payment to Fiscal Agent or Trustee
Notwithstanding anything contained in Section I, Section II, or Section III, the Borrower,
in accordance with the Contract, shall be required to make all payments of interest, and principal,
including any Optional Redemption payment, directly to the Fiscal Agent or the Trustee (as
applicable) on the seventh Business Day prior to the appropriate Interim Payment Date, Interest
Due Date, Principal Due Date, Prepayment Date, or date of Optional Redemption, as applicable.
C. Interest on Late Payments
If a payment of principal or interest herein provided for shall not be made by either (i)
2:30 p.m. on an Interest Due Date or Principal Due Date; or (ii) 2:30 p.m. on the second Business
Day (as herein defined) next succeeding an Interim Payment Date, then interest shall accrue on
the amount of such payment at the then applicable interest rate or rates payable on this Note,
from the relevant due date, as the case may be, until the date such payment is made. Nothing in
the immediately preceding sentence shall be construed as permitting or implying that the
Borrower may, without the written consent of the Holder and the Secretary, modify, extend, alter
or affect in any manner whatsoever the right of the Holder timely to receive any and all
payments of principal and interest specified in this Note.
32189/19
A -1 -6
D. _Applicability of Fiscal A2encv Agreement or Trust Aareement
Prior to the Conversion Date, this Note and Advances and payments made hereunder
shall be administered pursuant to the terms of the Fiscal Agency Agreement and are subject to
such agreement, On or after the Conversion Date, this Note and Advances and payments made
hereunder shall be administered pursuant to the Trust Agreement and are subject to such
agreement. The terms and provisions of the Fiscal Agency Agreement or the Trust Agreement,
insofar as they affect the rights, duties and obligations of the Holder and/or the Borrower, are
hereby incorporated herein and form a part of this Note. The Borrower hereby agrees to be
bound by all obligations of the Borrower to the Fiscal Agent set forth in the Fiscal Agency
Agreement. Capitalized terms not defined in this Note shall have the meanings ascribed to them
in the Fiscal Agency Agreement or Trust Agreement, as applicable. The Fiscal Agency
Agreement provides for the Fiscal Agent to perform certain duties, including the duties of (i)
paying agent and calculation agent for this Note until its Conversion Date, and (ii) registrar for
this Note until this Note is cancelled or a new registrar appointed, each in accordance with the
Fiscal Agency Agreement. The Trust Agreement provides for the Trustee to perform certain
duties, including the duties of collection agent for this Note after its Conversion Date until a new
Trustee is appointed in accordance with the Trust Agreement This Note may be surrendered to
the Fiscal Agent for registration of transfer or exchange, as provided in the Fiscal Agency
Agreement. The Fiscal Agent and Trustee each shall permit reasonable inspection to be made of
a copy of the Fiscal Agency Agreement or Trust Agreement kept on file at its respective
corporate trust office. Neither the Fiscal Agency Agreement nor the Trust Agreement shall
change the Borrower's payment obligations under this Note.
E. Applicability of Contract and Secretary's Guarantee
This Note evidences indebtedness incurred pursuant to and in accordance with the
Contract and pursuant to Section 108 of Title I of the Housing and Community Development Act
of 1974, as amended (42 U.S.C. § 5308) (the "HCD Act "). This Note is subject to the terms and
provisions of the Contract, to which Contract reference is hereby made for a statement of said
terms and provisions and for a description of the collateral security for this Note. The payment
Of principal on the applicable Principal Due Dates and interest on the applicable Interim Payment
Dates or Interest Due Dates under this Note is unconditionally guaranteed by the Secretary to the
Holder through a guarantee (the "Guarantee "). Execution of the Secretary's Guarantee is
required before this Note is effective, and such Guarantee shall be issued pursuant to and in
accordance with the terms of the Contract and Section -108 of the HCD Act.
F. Default
A default under this Note shall occur upon failure by the Borrower to pay principal or
interest on this Note when due hereunder. If a Borrower defaults on the payment of any interest
or Principal Amounts when due, or if the Secretary gives notice of a final decision to declare the
Borrower in default pursuant to the following paragraph of this Section N.F., the Secretary may,
but is not-obligated.to, -make on any date on or prior to the Conversion. Date. with fourteen
calendar clays prior notice to the Fiscal Agent, or on the seventh Business Day preceding any
32189/19
A -1 -7
Interest Due Date on or after the first permissible Optional Redemption Date with seven
Business -Days- prior- nGdr- e-tothe— Trustee anaccelerationpayment -to- the - Fiscal - Agent- or-the- -
Tnrstee, as applicable, equal to the Aggregate Principal Amount of the Note, together with
accrued and unpaid interest thereon to such acceleration payment date or Interest Due Date, as
applicable. In the event that any such acceleration payment is made from sources other than
funds pledged by the Borrower as security under the Contract (or other Borrower funds), the
amounts paid on behalf of the Borrower shall be deemed to be immediately due and payable to
the Secretary. Nothing in this paragraph shall be construed as permitting or implying that the
Borrower may, without the written consent of the Holder and the Secretary, modify, extend, alter
or affect in any manner whatsoever the right of the Holder timely to receive any and all
payments of principal and interest specified in this Note.
In addition, the Secretary may declare the Borrower in default under this Note if the
Secretary makes a final decision in accordance with the provisions of 24 C.F.R. § 570.913 (or
any successor regulation thereof), including requirements for reasonable notice and opportunity
for hearing, that the Borrower has failed to comply substantially with Title I of the HCD Act.
Following the giving of such reasonable notice, the Secretary may take the remedial actions
specified as available in the relevant provisions of the Contract pending the Secretary's final
decision.
G. Holder's Reliance on Guarantee
Following a default by the Borrower under the terms of this Note, the Holder agrees to
rely wholly and exclusively for repayment of this Note upon the Guarantee. The enforcement of
any instruments or agreements securing or otherwise related to this Note shall be the sole
responsibility of the Secretary, and the Holder shall not be responsible for the preparation,
contents or administration of such instruments and agreements, or for any actions taken in
connection with such instruments and agreement. The Holder, to the extent it is legally able to do
so, shall bind or cause to be bound its successors and assigns to all limitations imposed upon the
Holder by this Note.
H. Amendment
This Note may only be amended with the prior written consent of the Secretary and the
Borrower. No such amendment shall reduce, without the prior written consent of the Holder of
this Note, in any manner the amount of, or delay the timing of, payments required to be received
on this Note by the Holder, Fiscal Agent or Trustee, including Guarantee Payments; provided '
that prior to the Conversion Date, the Commitment Amounts on the Commitment Schedule
attached hereto, and the Principal Amounts due on the corresponding Principal Due Dates may
be rescheduled pursuant to written instructions given to the Fiscal Agent by the Secretary with
the written agreement of the Borrower and the Secretary absent the consent of the Holder.
32189119
A -1 -8
I. Waivers
The Borrower hereby waives any requirement for presentment, protest or other demand
or notice with respect to this Note. The Borrower hereby waives notice of default and
opportunity for hearing for any failure to make a payment when due.
J. Delivery and Effective Date
This Note is deemed issued, executed, and delivered on behalf of the Borrower by its
authorized official as an obligation guaranteed by the Secretary pursuant to Section 168 of the
HCD Act, effective as of the date of the Secretary s Guarantee.
V. Borrower- Specific Provisions
[This space intentionally left blank]
32189/19
A -1 -9
IN WITNESS WHEREOF, the undersigned, as an authorized official of the Borrower,
has executed and delivered this Note_
BORROWER
By. /s/
(Signature)
ATTEST:
By_ /s/
(Signature)
(Name)
(Title)
32189/19
(Name)
(Title)
9
ASSIGNMENT AND TRANSFER
For value received, the undersigned assigns and transfers this Note to
(Name and Address of Assignee)
Security or Other Identifying Number of Assignee)
and irrevocably appoints
attorney -in -fact to transfer it on the books kept for registration of the Note, with full power of
substitution.
Dated-
Signature Guaranteed:
Qualified Financial Institution
By:
Authorized Signature
32189119
Note: The signature to this
assignment must correspond with the
name as written on the face of the
Note without alteration or
enlargement or other change.
APPENDIX A
Special Pre - Conversion Interest Rates.
(a) The Holder and the Secretary contemplate that the majority of the outstanding
Variable/Fixed Rate Notes will be purchased by underwriters selected by the
Secretary for sale in public offerings to occur each year. If a public offering
including this Note has not occurred by each March 1 following the initial
Advance under this Note, the Secretary shall, upon request, advise the Holder as
to when a public offering including this Note is expected to occur, and the Holder
and the Secretary agree to consult with each other as to what the interest rate on
this Note will be after May 1 of that year if a public offering has not occurred by
such May 1. The Holder shall notify the Secretary if such consultation has not
occurred by April 1 of that year. If no public offering including this Note has
occurred on or before such May 1, the applicable interest rate on this Note from
such May I shall be the rate (if any) negotiated and agreed upon by the Secretary
and the Holder. Such rate may be the Standard Note Rate or some other rate
agreed upon by the Holder and the Secretary at least two Business Days before
such May I (such other rate, the "Negotiated Special Interest Rate "). The
Secretary shall notify the Fiscal Agent and the Holder in writing of any
Negotiated Special Interest Rate within two Business Days of the determination
thereof.
(b) If the Secretary and the Holder do not, by the April 15th preceding such May 1,
negotiate and agree under Section (a) of this Appendix on an interest rate
applicable to this Note, then the Holder may, on or before the April 20th
preceding such May 1, give written notice to the Secretary of its intent to change
the interest rate on this Note and, if such notice was given during such period, the
Holder may, on such May 1, unilaterally determine (subject to the terms of this
paragraph) the interest rate that this Note will bear (such rate, the "Holder
Determined Interest Rate ") from and including such May 1 to but excluding the
earliest of. (i) the Conversion Date; (ii) the date that this Note is purchased by a
new Holder (as described in Section (c) below) or (iii) a Monthly Special Reset
Date (as defined below). Interest from and including such May I to but excluding
the Public Offering Date shall be paid on the unpaid principal balance of all
outstanding Advances under this Note at the rate(s) to be determined by the
Holder, which, based upon then prevailing market conditions and taking into
account all the circumstances, will enable the Holder to sell this Note at one
hundred percent (100 %) of the aggregate amount of all Advances hereunder prior
to the date of such sale. Such interest rate shall be determined as of such May 1
and shall be determined again on the foregoing basis on the first of each month
thereafter (the first of each month after such May 1, a "Monthly Special Reset
Date "). The Holder shall notify the Fiscal Agent and the Secretary in. writing
within two Business Days following such dates of the determination of the Holder
32189/19
Determined Interest Rate and each applicable interest rate determined on a
Monthly Special Reset-])ate.
(c) If the Secretary and the Holder have failed to agree upon an interest rate pursuant
to Section (a) of this Appendix A, the Secretary, upon seven calendar days notice
to the Bolder, may arrange for the purchase of this Note in full by another entity
on the following May 1 or any Business Day thereafter. If such a purchase
occurs, the Holder shall sell and assign this Note to the purchaser thereof without
recourse to the Holder and deliver this Note and its Guarantee to the Fiscal Agent
for registration in the name of the purchaser thereof in accordance with the
Secretary's written instructions. The purchase price for this Note shall be 100%
of the aggregate amount of all Advances owing hereunder plus accrued interest to
the date of purchase. Payment to the Holder of the purchase price for this Note
shall be made by the purchaser thereof in Federal funds at the offices of the
Holder, or at such other place as shall be agreed upon by the Holder and the
Secretary, at 10:00 am., New York time, on the date of purchase. After such
purchase date this Note shall bear a rate.of interest negotiated between the
Secretary and the new interim Holder (the "New Purchaser Special Interest
Rate "). The Secretary shall notify the Fiscal Agent and the new purchaser in
writing of any New Purchaser Special Interest Rate within two Business Days
following the date of detemtinationtthereof.
(d) Notwithstanding Sections (a) through (c) (inclusive) of this Appendix, no
Borrower is obligated to pay interest at a variable rate exceeding the maximum
rate permitted by generally applicable law of the Borrower's state (such rate, the
"Maximum Rate "). If the Borrower receives notice of a variable interest payment
that exceeds the Maximum Rate, then the Borrower shall timely pay such amount
as does not exceed the Maximum Rate, and concurrently shall notify the Secretary
and the Fiscal Agent of the reason for any interest non - payment.
32189!19
Principal Due Date . Commitment Amount
August 1, 2000 $[[ JJ
August 1, 2001 [[ ]]
August 1, 2002 II jl
August 1, 2003
August 1, 2004 [I I]
August 1, 2005 [[ )]
August 1, 2006 LI Il
August 1, 2007
August 1, 2008 LI 11
August 1, 2009 [[ ]]
August 1, 2010 [[ ]J
August 1, 2011
August 1, 2012 [[ )J
August 1, 2013 [[ ]]
August 1, 2014
August 1, 2015 [[ 11
August 1, 2016 [[ 11
August 1, 2017 I[ 11
August 1, 2018
August 1, 2019 $(( 11
Maximum Commitment Amount = [[ ]]
i
32189/19
i
SCHEDULE P &I
Note No.
Principal
Principal Amount Due Date Interest Rate
Optional Redemption
Available
YES
NO
$ August 1, 2000
X
August 1, 2001
X
August 1, 2002
X
August 1, 2003
X
August 1, 2004
X
August 1, 2005
X
August 1, 2006
X .
August 1, 2007
X
August 1, 2008
X
August 1, 2009
X
August 1, 2010
X
August 1, 2011
X
August 1, 2012
X
August 1, 2013
X
August 1, 2014
X
August 1, 2015
X
August 1, 2016
X
August 1, 2017
X
August 1, 2018
X
August 1, 2019
X
= Aggregate Principal Amount
Principal Amounts for which Optional Redemption is available may be redeemed, subject to the terms
contained herein and in the Trust Agreement, on any Interest Due Date on or after
1 1,201 1•
32199/19
1W.49601 0-3y
[FORM OF FIXED RATE NOTE (IF NO INTERIM FINANCING USED)]
NOTE NO.
REGISTERED DATE:
HOLDER: THE CHASE MANHATTAN BANK
AGGREGATE PRINCIPAL
AMOUNT : $
For value received, the undersigned, (the 'Borrower,"
which term includes any successors or assigns), a public entity or agency organized and existing
under the laws of the State (or Commonwealth, if applicable) of
promises to pay to the order of THE CHASE MANHATTAN BANK, as Registered Holder (the
"Holder," which term includes any successors or assigns), the Principal Amounts set forth on the
attached Schedule P &I as of each applicable Principal Due Date set forth therein, together with
interest on such unpaid Principal Amounts at the rates applicable thereto as specified on such
attached Schedule P &I. Interest shall be calculated and payments shall be made in the manner
set forth below. The Holder is acting hereunder on behalf of a trust (the "Trust ") created .
pursuant to a Trust Agreement by and between the Secretary of Housing and Urban
Development (the "Secretary") and The Chase Manhattan Bank, as trustee (the "Trustee "), dated
as of January 1, 1995, as amended (the "Trust Agreement "), as supplemented by the applicable
Supplement to the Trust Agreement, by and between the Secretary and the Trustee.
A. Principal and Interest
Interest on a Principal Amount of this Note that is due as of a given date specified on the
Schedule P &I attached hereto (such date, the "Principal Due Date" for such Principal Amount)
shall accrue at the per annum rate specified on such Schedule P&I from (and including) the date
hereof to (but excluding) such Principal Due Date or, if applicable, to the applicable Interest Due
Date on which an Optional Redemption (as defined below) occurs. The aggregate of the interest
amounts accrued on the entire unpaid Principal Amount of this Note shall be due semiannually
as of February I and August 1 of each year (each, an "Interest Due Date ") commencing on
[February/August] 1, ", until the Aggregate Principal Amount listed on the Schedule P &I
attached to this Note is paid in full. Interest shall be calculated on the basis of a 360 -day year
consisting of twelve 30 -day months.
32261/9
B. Optional Redemption
Certain Principal Amounts indicated as being eligible for Optional Redemption oil the
Schedule,P &I hereto may be paid, in whole or in part, at the option of the Borrower as of any
- -Interest- Due - Date -on-or-a#ter-the- date-specified-in such Schedule-(an- "Optional - Redemption ").- In -- -- - - -
order to elect an Optional Redemption of a redeemable Principal Amount, the Borrower shall
give notice of its intention to redeem a Principal Amount to the Trustee and the Secretary not
less than 60 days nor more than 90 days prior to the Interest Due Date as of which the Borrower
intends to redeem the Principal Amount. The Trustee shall apply any payments received in
respect of Optional Redemptions in accordance with written instructions of the Borrower, as
approved by the Secretary. Principal Amounts that are not indicated as being eligible for
Optional Redemption on such Schedule may not be prepaid.
C. Additional Definitions
For purposes of this Note, the following terms shall be defined as follows:
"Business Day" shall mean a day on which banking institutions in New York City are not
required or authorized to remain closed and on which the Federal Reserve Bank and the New
York Stock Exchange are not closed. If any payment (including a payment by the Secretary) is
required to be made on a day that is not a Business Day, then payment shall be made on the next
Business Day.
"Contract" shall mean the Contract for Loan Guarantee Assistance, and any amendments
thereto, between the Secretary and the Borrower, the designated public entity named therein (if
applicable), or the State named therein (if applicable), which refers to and incorporates this Note
by the number hereof.
D. Borrower's Timely Payment to Trustee
Notwithstanding anything contained in this Note, the Borrower, in accordance with the
Contract, shall be required to make all payments of interest and principal, including any Optional
Redemption payment, directly to the Trustee on the seventh Business Day prior to the
appropriate Interest Due Date, Principal Due Date or date of Optional Redemption, as applicable.
E. Interest on Late Payments
If a payment of principal or interest herein provided for has not been duly received by the
Holder from either the Borrower or the Secretary by the close of business on the applicable
Interest Due Date or Principal Due Date, interest shall accrue on the amount of such payment at
the applicable interest rate or rates payable on this Note, from the relevant due date until the date
such payment is made. Nothing in the immediately preceding sentence shall be construed as
permitting or implying that the Borrower may, without the written consent of the Holder and the
Secretary, modify, extend, alter or affect in any manner whatsoever the right of the Holder timely
to receive any and all payments of principal and interest specified in this Note.
3226119
A -2 -2
F. Applicability of Fiscal Agency Agreement and Trust Agreement
This Note and payments made hereunder shall be administered pursuant to the terms of
the Trust Agreement and are subject to such agreement. The terms and provisions of the Trust
__.Agr enentTins9 he_y._ affect. thejights,-duties- andobligations-ofthe-Holder -andLor -the -. - -
Borrower, are hereby incorporated herein and form a part of this Note. Capitalized terms not
defined in this Note shall have the meanings ascribed to them in Trust Agreement. The
Amended and Restated Master Fiscal Agency Agreement dated as of May 17, 2000 between the
Secretary and The Chase Manhattan Bank, as Fiscal Agent (the "Fiscal Agency Agreement ")
provides for The Chase Manhattan Bank, acting as Fiscal Agent to perform certain duties,
including the duties of registrar for this Note until this Note is cancelled or a new registrar
appointed in accordance with the Fiscal Agency Agreement. The Trust Agreement provides for
the Trustee to perform certain duties, including the duties of paying agent and collection agent
for this Note until a new Trustee is appointed in accordance with the Trust Agreement. This
Note may be surrendered to the Fiscal Agent for registration of transfer or exchange, as provided
in the Fiscal Agency Agreement. The Fiscal Agent and the Trustee shall permit reasonable
inspection to be made of a copy of the Fiscal Agency Agreement or Trust Agreement kept.on file
at its corporate trust office. Neither the Fiscal Agency Agreement nor the Trust Agreement shall
change the Borrower's payment obligations under this Note.
G. Ayplicability of Contract and Secretary s Guarantee
This Note evidences indebtedness incurred pursuant to and in accordance with the
Contract and pursuant to Section 108 of Title I of the Housing and Community Development Act
of 1974, as amended (42 U.S.C. § 5308) (the "HCD Act "). This Note is subject to the terms and
provisions of the Contract, to which Contract reference is hereby made for a statement of said
terms and provisions and for a description of the collateral security for this Note. The payment
of principal on the applicable Principal, Due Dates and interest on the applicable Interest Due
Dates under this Note is unconditionally guaranteed by the Secretary to the Holder through a
guarantee (the "Guarantee "). Execution of the Secretary's Guarantee is required before this Note
is effective, and such Guarantee shall be issued pursuant to and in accordance with the terms of
the Contract and Section 108 of the HCD Act.
H. Default
A default under this Note shall occur upon failure by the Borrower to pay principal or
interest on this Note when due to the Trustee hereunder. If a Borrower defaults on the payment
of any interest or Principal Amount when due, or if the Secretary gives notice of a fmal decision
to declare the Borrower in default pursuant to the following paragraph, the Secretary may, but is
not obligated to, make on the seventh Business Day preceding any Interest Due Date on or after
the first permissible Optional Redemption Date, with seven Business Days prior notice to the
Trustee an acceleration payment to the Trustee equal to the Aggregate Principal Amount of the
Note, together with accrued and unpaid interest thereon to such Interest Due Date. In the event
that any such acceleration payment is made from sources other than funds pledged by the
Borrower as security under the Contract (or other Borrower fiords), the amounts paid on behalf
of the Borrower shall be deemed to be immediately due and payable to the Secretary. Nothing in
-- this paragraph shall be construed as permitting or implying that the Borrower may, without the
32261 /9
A -2 -3
written consent of the Holder and the Secretary, modify, extend, alter or affect in any manner
whatsoever the right of the Holder timely to receive any and all payments of principal and
interest specified in this Note.
—__ in addition Jhe -Secretary_ may .declare- iheBormw.er -in- default- under - this- Notaifthe – -
Secretary makes a final decision in accordance with the provisions of 24 C.F.R. § 570.913 (or
any successor regulation thereof), including requirements for reasonable notice and opportunity
for hearing, that the Borrower has failed to comply substantially with Title I of the HCD Act.
Following the giving of such reasonable notice, the Secretary may take the remedial actions
specified as available in the relevant provisions of the Contract pending the Secretary's final
decision.
I. Holder's Reliance on Guarantee
Following a default by the Borrower under the terms of this Note, the Holder agrees to
rely wholly and exclusively for repayment of this Note upon the Guarantee. The enforcement of
any instruments or agreements securing or otherwise related to this Note shall be the sole
responsibility of the Secretary, and the Holder shall not be responsible for the preparation,
contents or administration of such instruments and agreements, or for any actions taken in
connection with such instruments and agreement. The Holder, to the extent it is legally able to do
so, shall bind or cause to be bound its successors and assigns to all limitations imposed upon the
Holder by this Note.
Amendment
This Note may only be amended with the prior written consent of the Secretary and the
Borrower. No such amendment shall reduce, without the prior written consent of the Holder of
this Note, in any manner the amount of, or delay the timing of, payments required to be received
on this Note by the Holder or Trustee, including Guarantee Payments.
K. Waivers
The Borrower hereby waives any requirement for presentment, protest or other demand
or notice with respect to this Note. The Borrower hereby waives notice of default and
opportunity for hearing for any failure to make a payment when due.
L. Delivery and Effective Date
This Note is deemed issued, executed, and delivered on behalf of the Borrower by its
authorized official as an obligation guaranteed by the Secretary pursuant to Section 108 of the
HCD Act, effective as of the date of the Secretary's Guarantee.
M. Borrower Specific Provisions
[This space intentionally left blank)
[Signature page follows]
32261/9
A -2-4
U
IN WITNESS WHEREOF, the undersigned, as an authorized official of the Borrower,
has. executed and delivered this Note.
BORROWER
ATTEST:
(Signature)
3226119
(Name)
(Title)
By
(Signature)
(Name)
A -2 -5
(Title)
t
SCHEDULE P &I
. Principal
Principal Amount Due Date Interest Rate
Optional Redemption Available
YES NO
S August 1, 2000
X
August 1, 2001
X
August 1, 2002
k
August 1, 2003
X
August 1, 2004
X
August 1, 2005
X
August 1, 2006
X
August 1, 2007
X
August 1, 2008
X
August 1, 2009
a
August 1, 2010
X
August 1, 2011
X
August 1, 2012
X
August 1, 2013
X
August 1, 2014
X
August 1, 2015
X
August 1, 2016
X
August 1, 2017
X
August 1, 2018
X
August 1, 2019
X
Aggregate
Amount of Note: S
Principal Amounts for which Optional Redemption is available may be redeemed, subject to the teams contained
herein and in the Trust Agrecment, on any Interest Due Date on or after 1 1,201 1.
32261/9
[FORM OF GUARANTEE]
EXHIBIT B
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
GUARANTEE OF THE SECRETARY OF HOUSING
AND URBAN DEVELOPMENT
NOTE NUMBER:
BORROWER:
DATE OF NOTE:
MAXIMUM COMMITMENT AMOUNT: $
Guarantee issued pursuant to Section 108 of the Housing and Community Development Act of
1974, as amended.
TO: HOLDER (as defined in the above- referenced Note)
The Secretary of Housing and Urban Development, pursuant to Section 108 of the Housing and
Community Development Act of 1974, as amended, but not personally, hereby unconditionally
guarantees to the holder of the attached Note (as described above), and pledges to such holder
the full faith and credit of the United States of America for, the payment of the principal and
interest when and as due on such Note in accordance with its terms. The Secretary waives any
requirement for presentment, protest, or other demand or notice with respect to such Note.
The validity of this Guarantee is incontestable in the hands of any holder of such Note.
IN WITNESS WHEREOF, the Secretary of Housing and Urban Development or his duly
authorized representative has signed this Guarantee..
Secretary of Housing and Urban Development
By:
Date
31183/10
B -1
20_
The Chase Manhattan Bank (formerly known as Chemical Bank), as
Fiscal Agent under the
Agreement referred to below
450 West 33rd Street
8d' Floor
New York, New York 10001
Attention: Structured Finance Operations Department
191TW3M�
The following information is being finished to you pursuant to Sections 2.03 and 2.04
[(a) or (c), as applicable] of the Amended and Restated Master Fiscal Agency Agreement
( "Agreement') dated as of May 17, 2000 providing for the issue of U.S. Government Guaranteed
Notes. Capitalized terms used herein and not otherwise defined herein have the same meanings
as in the Agreement.
[The following information must be provided regarding each Note to be (i) registered in
the name of and delivered to the initial Holder pursuant to Section 2.04(a) of the Agreement or
(ii) delivered to the Trustee after attachment of a Schedule P &I pursuant to Section 2.04(c) of the
Agreement:
31IM19
(a) Variable/Fixed Rate Note Fixed Rate Note
(b) Note Number:
(c) Borrower:
Name:
Address:
Attn:
(d) Name and address of initial Holder
(e) Principal Commitment
Principal Due Date Amount Amount
C -1
[Initial
Advance Amount]
[Attach either (1) copy of Note; or (2) Schedule P &I, as applicable.]
(f) Disbursement Date and Disbursement Instructions for initial Advance:
(g) [State whether the Notes and their related Guarantee are to be held physically by
the Fiscal Agent or transferred to Holder and the date such delivery or transfer is
to occur.]
(h) [State whether the Notes are subject to redemption or acceleration prior to their
Principal Due Dates indicated above and if so, the terms and conditions relating to
any redemption or acceleration].
(i) [Additional directions, such as identification of Schedules for each Note that may
be replaced with substitute pages enclosed herewith.]
0) [Such other matters as the Secretary and the Fiscal Agent may agree including
additional payment instructions, Le., instructions to the Fiscal Agent regarding
disbursement of amounts advanced or received under the Notes] and application
of funds received by the Secretary from the Borrower.]
You are hereby instructed [to deliver such Notes to their initial Holder against payment of
the initial Advance Amount on the date of the initial Advance authorized hereunder.] [to attach
the related Schedule P &I to such Notes and deliver them to the Trustee] [BRACKETED
LANGUAGE MAY BE INCLUDED AS APPLICABLE.]
Very truly yours,
SECRETARY OF HOUSING AND URBAN
DEVELOPMENT
0
Name:
Title:
31193/19
C-2
EXHIBIT D
[FORM OF ADVANCE ORDER]
The Chase Manhattan Bank
as Fiscal Agent
450 West 33rd Street
8'h Floor
New York, New York 10001
Attention: Structured Finance Operations Department
Re: Advance Order
Variable/Fixed Rate Note No.
(Name of Borrowerl
To Whom It May Concern:
The following information is being famished pursuant to Section 2.04(b) of the Amended
and Restated Master Fiscal Agency Agreement ( "Agreement ") dated as of May 17, 2000.
Capitalized Terms used herein, but not defined, shall have the meanings ascribed to them in the
Agreement. The Borrower has requested, and the Secretary approved, an Advance under the
above- referenced Variable/Fixed Rate Note. You are hereby instructed that the following
Advances] have been authorized for such Note:
Advance Amount:
Principal Due Date(s) for Advance:
Funding Date of Advance:
Disbursement Instructions for Advance:
[Such other information as the Secretary and the Fiscal Agent may agree.]
You are hereby instructed to notify the Holder of the above - referenced Note of the above
information. Upon receipt of fiords from the Holder on the date of the Advance, you must, in
31183/19
D-I
accordance with Section 2.04(d) and (e) of the Agreement: (i) disburse such Advance to the
Borrower; and (ii) update your records to reflect the above Advance.
Very truly yours,
SECRETARY OF HOUSING AND URBAN
DEVELOPMENT
By
Name:
Title:
31183/19
D -2
EXHIBIT E
[FORM OF NOTICE OF MISSED BORROWER PAYMENT
FROM FISCAL AGENT TO SECRETARY]
Secretary
United States Department of Housing
and Urban Development
451 Seventh Street, S.W.
Washington, D.C. 20410
Attention: Director, Financial Management Division,
Office of the Assistant Secretary for
Community Planning and Development
Re: Amended and Restated
Master Fiscal Agency Agreement
dated as of May 17.2000 (the "Agreement ")
Dear Sir or Madam:
We are fittnishing this notice to you pursuant to Section 3.06 of the above - referenced
Agreement. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned in the Agreement.
This letter confirms our earlier telephone notice to you that we have not received the
payment required to be made on the Note of
[insert Borrower name], Note No. , with Principal Due Date[s] of [August] 1,
, in the amount of $ Such amount represents [principal] [interest] [fees] on
such Note.
We agree to notify you no later than 10:00 am. (New York City time) on
[insert Business Day next succeeding the relevant
Payment Date] if we have not received such payment by the close of business on
[insert relevant Payment Date].
Very truly yours,
THE CHASE MANHATTAN BANK, (formerly
known as Chemical Bank) as Fiscal Agent
under the Agreement
By.
Name:
Title:
31183/19
E -1
EXHIBIT F
[FORM OF NOTICE FOR GUARANTEE PAYMENT
FROM FISCAL AGENT TO SECRETARY[
Secretary
United States Department
of Housing and Urban Development
451 Seventh Street, S.W.
Washington, D.C. 20410
Attention: Director, Financial Management Division
Office of the Assistant Secretary for
Community Planning, and Development
Re: Amended and Restated
Master Fiscal Agency Agreement,
dated as of May 17, 2000 (the "Agreement ")
Dear Sir or Madam:
We are furnishing this notice to you pursuant to Section 3.06 of the above - referenced
Agreement. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned in the Agreement.
This letter confirms our previous telephone notice to you that we have not received the
payment required to be made on the Note of
[insert Borrower name], Note No. with Principal Due Dates] of
[August] 1, in the amount of S Our letter, dated
_ to you notified you that we had not received such payment as of such date.
We are writing this letter to inform-you that you are required pursuant to your Guarantee
of such Note to make a Guarantee Payment in the amount on S in respect
of the above- mentioned Note. Payment should be made by wire transfer to us in immediately
available funds to:
31183/19
P -1
1,
[Insert wire instructions here.)
Very truly yours,
— -- — - --- T-HFXHASE, gANHAT-TAN BANK —...
as Fiscal Agent
under the Agreement
By:
Name:
Title:
31183/19
F -2
e
EXHIBIT G
SCHEDULE OF FISCAL AGENT FEES
FUR -V- IRL4,BLEMXED- RAT' -E -NOT -E SERV GEE . _._...__...
[to be attached)
31183/19
G -1
EXHIBIT G
SCHEDULE OF FISCAL AGENT FEES
- - -- - -- FO NOTES SERMCES-
Each Borrower shall pay a fee to the Fiscal Agent of $70.00 per Advance, broken down as
follows:
$15 - custodial/fiscal agency services
$25 - wire fee
$30 - paying agency services
The Fiscal Agent shall deduct such fees from each Advance due to each Borrower at the time the
Fiscal Agent remits the related Advance proceeds.
In addition, Borrowers with Variable/Fixed Rate Notes remaining invariable rate mode after any
public offering of certificates of participation pursuant to the Trust Agreement shall pay an
Administration Fee of $100 per quarter. The Fiscal Agent shall include each such quarterly
Administration Fee as a line item in the related quarterly notification of amounts due under
Section 3.04 of this Agreement. Each quarterly Administration Fee is due from the Borrower to
the Fiscal Agent at the same time as the Borrower's quarterly interest payment to the Fiscal
Agent. If unpaid when due, the quarterly Administrative Fee may be deducted by the Fiscal
Agent from any subsequent Advance or Conversion Date Advance made to the related Borrower.
DC1JB1159070/t/I2760 WNr1ta3anJM=h 10, 2000 -527
July 23, 2002
Daniel R. Trimble
(949) 6443230
REPORT TO THE MAYOR AND CITY COUNCIL
SUBJECT: Community Development Block Grant Section 108 Loan Security
Agreement and Resolution
SUMMARY: As part of the Section 108 Loan approval, the U.S. Department of
r n+e crtr c�a+cl�
Housing and Urban Development (HUD) has required that the City
roR N�Imonreencx provide some form of security for the repayment of the loan in the event
CDGB funds cease to be available for repayment. Since the City is
JUL G 3 AR using General Fund reserves as security for the loan, HUD is requiring
the approval of the attached security agreement and resolution
acknowledging such pledge.
SUGGESTED
ACTION: 1. Approve the Section 108 Loan Security Agreement pledging City
General Funds as security for repayment of the note, in the event that
CDBG funds are not available to make the payment on the loan, and
2. Approve the Resolution 2002 -53 as a required attachment to the
Security Agreement.
In September 2001, the City Council approved a resolution authorizing the City Manager to submit
an application for a Section 108 loan to the U.S. Department of Housing and Urban Development
(HUD). The application requested a loan in the amount of $2,400,000 that will be used to complete
capital improvements within Balboa Village. As part of the application submittal, the City
indicated that General Fund reserves would be used as additional security on the loan. These funds
would be used to repay the loan only in the event that the City no longer receives an annual
allocation of Community Development Block Grant (CDBG) funds. The CDBG program is
currently in its 28s year of existence. Based on the history of the CDBG Program, staff does not
believe that the program will cease to exist during the life of the loan (20 years).
In June 2002, HUD contacted the City to determine if it was interested in participating in the next
public offering, which would be held on August 8, 2002. Mark Briggs and Associates, our Section
108 Loan consultant, advised staff that due to the 40 -year low interest rates, it would be beneficial
for the City to participate in the August sale. In order to participate in the August sale, HUD is
requesting that the City execute the security agreement prior to the public offering. In addition,
HUD is requesting that the City Council approve a Resolution pledging City General Funds as
security for repayment of the note, in the event that CDBG funds are not available to make the
•
CITY OF NEWPORT BEACH
°aEW
COMMUNITY AND ECONOMIC
Hearing Date:
o �n
DEVELOPMENT
STL
PLANNING DEPARTMENT
Agenda Item No.:
C�LiFOaN
3300 NEWPORT BOULEVARD
Staff Person:
NEWPORT BEACH, CA 92658
(949) 644 -3200; FAX (949) 644 -3229
July 23, 2002
Daniel R. Trimble
(949) 6443230
REPORT TO THE MAYOR AND CITY COUNCIL
SUBJECT: Community Development Block Grant Section 108 Loan Security
Agreement and Resolution
SUMMARY: As part of the Section 108 Loan approval, the U.S. Department of
r n+e crtr c�a+cl�
Housing and Urban Development (HUD) has required that the City
roR N�Imonreencx provide some form of security for the repayment of the loan in the event
CDGB funds cease to be available for repayment. Since the City is
JUL G 3 AR using General Fund reserves as security for the loan, HUD is requiring
the approval of the attached security agreement and resolution
acknowledging such pledge.
SUGGESTED
ACTION: 1. Approve the Section 108 Loan Security Agreement pledging City
General Funds as security for repayment of the note, in the event that
CDBG funds are not available to make the payment on the loan, and
2. Approve the Resolution 2002 -53 as a required attachment to the
Security Agreement.
In September 2001, the City Council approved a resolution authorizing the City Manager to submit
an application for a Section 108 loan to the U.S. Department of Housing and Urban Development
(HUD). The application requested a loan in the amount of $2,400,000 that will be used to complete
capital improvements within Balboa Village. As part of the application submittal, the City
indicated that General Fund reserves would be used as additional security on the loan. These funds
would be used to repay the loan only in the event that the City no longer receives an annual
allocation of Community Development Block Grant (CDBG) funds. The CDBG program is
currently in its 28s year of existence. Based on the history of the CDBG Program, staff does not
believe that the program will cease to exist during the life of the loan (20 years).
In June 2002, HUD contacted the City to determine if it was interested in participating in the next
public offering, which would be held on August 8, 2002. Mark Briggs and Associates, our Section
108 Loan consultant, advised staff that due to the 40 -year low interest rates, it would be beneficial
for the City to participate in the August sale. In order to participate in the August sale, HUD is
requesting that the City execute the security agreement prior to the public offering. In addition,
HUD is requesting that the City Council approve a Resolution pledging City General Funds as
security for repayment of the note, in the event that CDBG funds are not available to make the
0 0
payment on the loan. Even though the public offering will not be held until August 8, 2002, HUD
has requested that they receive the properly executed documents by the close of business on July
25, 2002.
HUD has imposed a number of conditions on the loan. Section 15 of the security agreement
stipulates the conditions that must be met by the City in order to participate in the offering and draw
down the loan funds. A full copy the security agreement is available in the City Clerks office.
Additionally, the City Attorney has reviewed and approved the security agreement.
The interest rate on the "Note" will not be determined until the public offering date. The City's
Section 108 Loan consultant estimates that the final interest rate will be somewhere between 5.5%
and 6.0 %.
Conclusion
This action is intended to satisfy HUD's requirements for participation in the public offering of
trust certificates guaranteed under Section 108 of the Housing and Community Development Act of
1974, as amended, and enable the City to draw down the Section 108 loan funds.
Submitted by:
SHARON Z. WOOD
Assistant City Manager
City Attorney Opinion
Resolution 2002-
Prepared by:
DANIEL R. TRIMBLE
Associate Planner
F:1USE"LNLV1 iACDBGIFy2001.20021108LSeciion 108 Loan Beporf.doo
Page 2
0
CITY OF NEWPORT BEACH
OFFICE OF THE CITY ATTORNEY
P.O. BOX 1768, NEWPORT BEACH, CA 92658 -8915
(949) 644 -3131
July 22, 2002
U.S. Department of Housing and Urban Development
Attn: Paul Webster, Director
Financial Management Division
451 Seventh St., S.W.,.Room 7180
Washington, DC 20400
Dear Paul Webster.
The undersigned, be duly licensed and in good standing to practice law in the State of
California, is legal counsel to the City of Newport Beach ( "Borrower). As such, l have
represented the Borrower regarding that certain promissory note, referred to as Note No.
B -00 -MC -06 -0546, in the Aggregate Principal Amount of $2,400.000.00 ( "Note "), to be
executed by the Borrower payable to the order of the Registered Holder thereof, and to
be the guaranteed by the Secretary of Housing and Urban Development ( "HUD ") under
Section 108 of the Housing and Community Development Act of 1974, as amended, 42
U.S.C. 5308 ( "Section 108 "). The Note will be included in a trust created by HUD
(together with other Section 108 Notes issued by other borrowers), and trust certificates
based on the trust will be sold in the Series 2002 -A public offering by underwriters
selected by HUD. HUD's guarantee of the Note will be governed by the Contract for Loan
Guarantee Assistance under Section 108 between the Borrower and HUD (the
"Contract "), in which the Borrower pledges Community Development Block Grants
pursuant to 24 CFR 570.705 (b) (2), as well as any other security specified in the
Contract, as security for HUD's guarantee.
In my capacity as legal counsel, I have made an examination and investigation of all such
matters of fact and questions of law as I consider the necessary or advisable to enable
me to render the opinion hereafter set forth. Specifically, and without limiting the
generality of the foregoing, I have examined: _
1. Article 11, Section 5 of the California Constitution;
2. Section 200 of the City Charter,
3. A Resolution of the governing body of Borrower dated July 23, 2002
authorizing Borrower to enter this transaction, and authorizing the
City Manager to execute the Note and Contract and to execute on
behalf of Borrower all documents necessary or desirable to
accomplish the transaction;
3300 Newport Boulevard, Newport Beach
J
0
Paul Webster
July 22, 2002
Page 2
4. The Contract;
5. The Note; and
0
6. The Trust Agreement, the Amended and Restated Master Fiscal
Agency Agreement, and the form of .Supplement of the Trust
Agreement to be executed by the Secretary. of HUD for the closing of
the public offering.
Based on the foregoing investigation and authorities, I am of the opinion that:
1. Borrowed has authorized, in accordance with California Constitution
and City Charter, the transaction, including issuance of the Note, the
pledge of grant funds, and the execution of all documents necessary
or desirable to accomplish the transaction.
2: Borrower has authorized Homer Bludau, in his capacity as City
Manager, to execute the Contract, the Note and all of the documents
necessary or desirable to accomplish the transaction.
3. The Note and the Contract have been duly executed by the
- aforementioned authorized representative of the Borrower, and upon
delivery thereof, due execution of the Contract and Guarantee on
behalf of. HUD, and receipt of the loan proceeds on behalf of the
Borrower, the Note and Contract shall be valid, binding and
enforceable obligations of the Borrower.
4. The pledge of present and future Community Development Block
Grants by the Borrower pursuant to 24 CFR 570.705 (b) (2) and the
Contract is valid.
0
Paul Webster
July 22, 2002
Page 3
0
S. There is no outstanding, or to my knowledge threatened, action, suit,
proceeding, investigation or litigation by or against the Borrower that
will affect the validity of the Note or the security therefore.
w h . VEN
Robert H. Burnham
City Attorney for the
City of Newport Beach
DKO:cp
F:\users\cat\shared\cp\Cyndi \Bob \letter\HMMHU D.doc
0 0
Resolution No. 2002-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH
AUTHORIZING THE CITY MANAGER TO SUBMIT THE FINAL SECTION 108 LOAN
GUARANTEE DOCUMENTS TO THE UNITED STATES DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT AND TO USE ITS ANNUAL CDBG ALLOCATION AS THE CITY'S
PRIMARY SOURCE OF COLLATERAL FOR THE REPAYMENT OF THE SECTION 108
FUNDS AND USE THE CITY'S UNRESERVED GENERAL FUND RESERVES AS
SECONDARY SOURCE OF COLLATERAL.
WHEREAS, the City of Newport Beach has determined that a high priority exists for public
facility improvements on a portion of the Balboa Peninsula in order to stimulate economic revitalization
and residential neighborhood improvements and that the implementation of the Balboa Village Pedestrian
and Streetscape Improvement Plan is an activity that meets these priorities; and
WHEREAS, the proposed project is included in the City's adopted One Year Action Plan of the
Consolidated Plan; and
WHEREAS, the Section 108 Loan Guarantee program, implemented by the United States
Department of Housing and Urban Development (HUD), is designed to provide funds to assist with these
types of projects; and
WHEREAS, the City is requesting a total of $2.4 million in Section 108 Loan Guarantee funds to
assist with the implementation of the Balboa Village Pedestrian and Streetscape Improvement Project;
and
WHEREAS, the City Manager was authorized under Resolution No. 2001 -75 to submit the initial
Section 108 Loan Guarantee application and amendments thereto and all understandings and assurances
contained therein, and to act in connection with the application to provide such additional information as
may be required; and
WHEREAS, HUD requires City Council approval of security agreement; and
WHEREAS, the City's primary source of collateral for the repayment of the Section 108 funds
will be the City's annual CDBG allocation. The secondary source of collateral for the repayment of the
Section 108 funds will be the City's unreserved general fund reserves.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Newport Beach as
follows:
SECTION 1. The City hereby certifies and assures with respect to its application for a loan
guarantee pursuant to Section 108 of the Housing and Community Development Act of 1974, as
amended, that it possesses the legal authority to make the pledge of grants required under 24 CFR
570.705 (b) (2).
SECTION 2. As a prerequisite for submission of the application to HUD, the City certified that
it has:
(a) Furnished citizens with information required by Section 570.704 (a)(2xi) of Title I of the
Housing and Community Development Act of 1974, as amended;
0 0
(b) Held at least one public hearing, on August 14, 2001, to obtain the views of citizens on
community development and housing needs; and
(c) Prepared an application in accordance with Section 570.704(a)(1)(iv) of Title 1 of the
Housing and Community Development Act of 1974, as amended, and made the application available to
the public.
SECTION 3. The City has and will continue to follow a detailed citizen participation plan that
meets the requirements described in Section 570.704(a)(2) of Title 1 of the Housing and Community
Development Act of 1974, as amended.
SECTION 4. The City has and will continue to affirmatively further fair housing, and the .
guaranteed loan funds will be administered in compliance with:
(a) Title VI of the Civil Rights Act of 1964 (Public Law 88 -352, 42 U.S.C. 2000d et
seq.); and
(b) The Fair Housing Act (42 U.S.C. 3601 -20).
SECTION 5. The City will expend in the aggregate, at least 70 percent of all CDBG funds, as
defined in Section 570.303 (e) of Title 1 of The Housing and Community Development Act of 1974, as
amended, during the one, two, or three consecutive years specified by the City for its CDBG program on
activities which benefit low /moderate income persons, as described in criteria in Section 570.208 (a) of
the Act.
SECTION 6. The City hereby assures and certifies with respect to its application for a loan
guarantee pursuant to Section 108 of the Housing and Community Development Act 1974, as amended
that it has made efforts to obtain financing for the activities described herein without the use of such
guarantee, that it will maintain documentation of such efforts for the term of the loan guarantee, and that
it cannot complete such financing consistent with the timely execution of the program plans without such
guarantee.
SECTION 7. The City hereby assures and certifies that it will use its annual CDBG allocation
as the primary source of collateral for the repayment of the Section Loan 108 funds. The secondary
source of collateral for the repayment of the Section 108 funds will be the City's unreserved general fund
reserves.
This Resolution shall be effective immediately upon its adoption.
Adopted this _ day of July 2002
ATTEST:
City Clerk
2
Mayor
q
0 0
RESOLUTION NO. 2002- 53
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH
AUTHORIZING THE CITY MANAGER TO SUBMIT THE FINAL SECTION 108 LOAN
GUARANTEE DOCUMENTS TO THE UNITED STATES DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT AND TO USE ITS ANNUAL CDBG ALLOCATION AS THE CITY'S
PRIMARY SOURCE OF COLLATERAL FOR THE REPAYMENT OF THE SECTION 108
FUNDS AND USE THE CITY'S UNRESERVED GENERAL FUND RESERVES AS
SECONDARY SOURCE OF COLLATERAL.
WHEREAS, the City of Newport Beach has determined that a high priority exists for public
facility improvements on a portion of the Balboa Peninsula in order to stimulate economic revitalization
and residential neighborhood improvements and that the implementation of the Balboa Village Pedestrian
and Streetscape Improvement Plan is an activity that meets these priorities; and
WHEREAS, the proposed project is included in the City's adopted One Year Action Plan of the
Consolidated Plan; and
WHEREAS, the Section 108 Loan Guarantee program, implemented by the United States
Department of Housing and Urban Development (HUD), is designed to provide funds to assist with these
types of projects; and
WHEREAS, the City is requesting a total of $2.4 million in Section 108 Loan Guarantee funds to
assist with the implementation of the Balboa Village Pedestrian and Streetscape Improvement Project;
and
WHEREAS, the City Manager was authorized under Resolution No. 2001 -75 to submit the initial
Section 108 Loan Guarantee application and amendments thereto and all understandings and assurances
contained therein, and to act in connection with the application to provide such additional information as
may be required; and
WHEREAS, HUD requires City Council approval of security agreement; and
WHEREAS, the City's primary source of collateral for the repayment of the Section 108 funds
will be the City's annual CDBG allocation. The secondary source of collateral for the repayment of the
Section 108 funds will be the City's unreserved general fund reserves.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Newport Beach as
follows:
SECTION 1. The City hereby certifies and assures with respect to its application for a loan
guarantee pursuant to Section 108 of the Housing and Community Development Act of 1974, as
amended, that it possesses the legal authority to make the pledge of grants required under 24 CFR
570.705 (b) (2).
SECTION 2. As a prerequisite for submission of the application to HUD, the City certified that
it has:
(a) Furnished citizens with information required by Section 570.704 (a)(2)(i) of Title 1 of the
Housing and Community Development Act of 1974, as amended;
0 0
(b) Held at least one public hearing, on August 14, 2001, to obtain the views of citizens on
community development and housing needs; and
(c) Prepared an application in accordance with Section 570.704(a)(1)(iv) of Title 1 of the
Housing and Community Development Act of 1974, as amended, and made the application available to
the public.
SECTION 3. The City has and will continue to follow a detailed citizen participation plan that
meets the requirements described in Section 570.704(a)(2) of Title 1 of the Housing and Community
Development Act of 1974, as amended.
SECTION 4. The City has and will continue to affirmatively further fair housing, and the
guaranteed loan funds will be administered in compliance with:
(a) Title VI of the Civil Rights Act of 1964 (Public Law 88 -352, 42 U.S.C. 2000d et
seq.); and
(b) The Fair Housing Act (42 U.S.C. 3601 -20).
SECTION 5. The City will expend in the aggregate, at least 70 percent of all CDBG funds, as
defined in Section 570.303 (e) of Title 1 of The Housing and Community Development Act of 1974, as
amended, during the one, two, or three consecutive years specified by the City for its CDBG program on
activities which benefit low /moderate income persons, as described in criteria in Section 570.208 (a) of
the Act.
SECTION 6. The City hereby assures and certifies with respect to its application for a loan
guarantee pursuant to Section 108 of the Housing and Community Development Act 1974, as amended
that it has made efforts to obtain financing for the activities described herein without the use of such
guarantee, that it will maintain documentation of such efforts for the term of the loan guarantee, and that
it cannot complete such financing consistent with the timely execution of the program plans without such
guarantee.
SECTION 7. The City hereby assures and certifies that it will use its annual CDBG allocation
as the primary source of collateral for the repayment of the Section Loan 108 funds. The secondary
source of collateral for the repayment of the Section 108 funds will be the City's unreserved general fund
reserves.
This Resolution shall be effective immediately upon its adoption.
Adopted this 23d day of July 2002
ATTEST:
EWEN MIS
cA
a
STATE OF CALIFORNIA }
COUNTY OF ORANGE
CITY OF NEWPORT BEACH }
I, LaVonne M. Harkless, City Clerk of the City of Newport Beach, California, do
hereby certify that the whole number of members of the City Council is seven; that the foregoing
resolution, being Resolution No. 2002 -53 was duly and regularly introduced before and adopted by
the City Council of said City at a regular meeting of said Council, duly and regularly held on the
23rd day of July, 2002, and that the same was so passed and adopted by the following vote, to wit:
Ayes: Heffernan, Bromberg, Adams, Proctor, Mayor Ridgeway
Noes: None
Absent: O'Neil, Glover
Abstain: None
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
official seal of said City this 24th day of July, 2002.
(Seal)
6�o �.
City Clerk
Newport Beach, California