HomeMy WebLinkAbout1984-07-17; City Council; 7820 Exhibit 11; OFFICIAL REQUEST TO STATE OF CALIFORNIA FOR MORTGAGE REVENUE BOND ALLOCATION Exhibit 11py-6 "73m
1 JJM:pw 5/20/8: qw\Qrr i 1 ' ',
*++.xLB
JJM : pw 5/26/8:
JJM: jm 6/10/8:
CITY OF CARLSBAD, CALIFORNIA,
Issuer
AND
SECURITY PACIFIC NATIONAL BANK,
Trustee
TRUST INDENTURE
Dated as of June 15, 1983
Single Family Residential Mortgage Revenue Bonds
Issue of 1983
4
TRUST INDENTURE
TABLE OF CONTENTS
(This Table of Contents is for convenience of reference only
and is not a part of the Trust Indenture)
Section Page
Parties 1
Preambles 1
Form of Bond 1
Form of Trustee's Certificate of Authentication ....... 6
Form of Assignment 7
............................................... ............................................. ..........................................
....................................
ARTICLE I
AUTHORITY FOR BONDS; EQUAL SECURITY: DEFINITIONS
1.01 Due Authorization 7
1.02 Equal Security 7 ............................ ...............................
1.03 Definitions 8
1.04 Content of Certificates and Opinions ......... 17 ..................................
ARTICLE I1
THE BONDS
2.01 Authorization of Bonds 18 2.02 Terms of the Bonds 18
2.03 Execution of Bonds 21
2.04 Transfer of Bonds 21
2.05 Exchange of Bonds 22
2.06 Bond Register 22
2.07 Temporary Bonds 22
or Stolen 22
....................... ........................... ........................... ............................ ............................ ................................ ..............................
2.08 Bonds Mutilated, Lost, Destroyed ..................................
ARTICLE I11
ISSUE OF BONDS; PURCHASE OF LOANS
3.01 Issuance, Sale and Delivery of Bonds ......... 23
3.02 Application of Proceeds of Bonds and Commitment Fees 23 ............................
(1)
Section Page
3.03 Establishment and Application of
Program Fund ............................... 3.04 Validity of Bonds ............................ 24
25
ARTICLE IV
REDEMPTION OF BONDS
25
26
26
27
27
4.01 Terms of Redemption .......................... 4.02 Selection of Bonds for Redemption ............
4.03 Notice of Redemption .........................
4.04 Partial Redemptlon ........................... 4.05 Effect of Redemption .........................
ARTICLE V
REVENUES AND FUNDS
28
29
30
30
32
32
32
33
34
5.01 Pledge and Assignment; Revenue Fund ..........
5.02 Allocation of Revenues to Funds and Accounts .
5.03 Application of Program Expense Fund ..........
5.04 Application of Bond Fund .....................
5.05 Deficiencies in the Bond Fund ................
5.07 Application of Redemption Fund ...............
5.08 Investment of Moneys in Funds ................
5.09
Account and Excess Earnings Fund ...........
5.06 Application of Reserve Fund .. ...........
Application of Estimated Excess Earnings
ARTICLE VI
PARTICULAR COVENANTS
34
35
35
35 35
36
36
36
38
39
40
40
6.01 Punctual Payment .............................
6.02 Extension of Payment of Bonds ................
6.03 Against Encumbrances .........................
6.04 Power to Issue Bonds and Make
Pledge and Assignment ...................... 6.05 Payment of Taxes and Claims ..................
6.06 Accounting Records and Financial Statements ..
6.07 Maintenance of Powers ........................
6.08 Tax Covenants ...............................
6.09 Compliance with Indenture, Contracts,
Laws and Regulations ...................... 6.10 Program Covenants ...........................
6.11 Waiver of Laws ..............................
6.12 Further Assurances ..........................
(ii)
u
Section Page
ARTICLE VI1
EVENTS OF DEFAULT AND REMEDIES OF OWNERS
7.01 Events of Default ............................ 41
7.02 Acceleration of Maturities ................... 41
7.03 Application of Revenues and Other Funds After Default ........................ 42
7.04 Trustee to Represent Bondholders ............. 44
7.05 Owners' Direction of Proceedings ............. 44
7.06 Limitation on Owners' Right to Sue ........... 45
7.07 Absolute Obligation of Issuer ................ 45
7.08 Termination of Proceedings ................... 46
7.09 Remedies Not Exclusive ....................... 46
7.10 No Waiver of Default ......................... 46
ARTICLE VI11
THE TRUSTEE
8.01 Duties, Immunities and Liabilities of Trustee ................................. 46
8.02 Compensation ................................. 48 8.03 Liability of Trustee ......................... 49
8.04 Right of Trustee to Rely on Documents ........ 49
8.05 Preservation and Inspection of Documents ..... 50
ARTICLE IX
MODIFICATION OR AMENDMENT OF THE INDENTURE
9.01 Amendments Permitted ......................... 50
9.02 Effect of Supplemental Indenture ............. 51
9.03 Endorsement of Bonds; Preparation of New Bonds .................................. 51
9.04 Amendment of Particular Bonds ................ 52
ARTICLE X
DEFEASANCE
10.01 Discharge of Indenture ....................... 52
10.02 Discharge of Liability on Bonds .............. 53 10.03 Deposit of Money or Securities with Trustee .. 53
10.04 Payment of Bonds after Discharge of Indenture. 54
(iii)
Sect i on Page
ARTICLE XI
MISCELLANEOUS
55
55
55
55
56
56
56
56
57
57
58
58
58 50
11-01 Liability of Issuer Limited to Revenues ...... 11.02 Successor is Deemed Included in all
References to Predecessor .................. 11.03 Limitation of Rights to Parties and Owners ... 11.04 Waiver of Notice .............................
11.05 Destruction of Bonds .........................
11.06 Severability of Invalid Provisions ........... 11.07 Notice to Issuer- and Trustee .................
11.08 Evidence of Rights of Owners ................. 11.09 Disqualified Bonds ...........................
11-10 Money Held for Particular Bonds .............. 11.11 Funds and Accounts ........................... 11.12 Article and Section Headings and
References ................................. 11.13 Waiver of Personal Liability .................
11.14 Execution of Several Counterparts ............
59 Execution ...............................................
(iv)
THIS TRUST INDENTURE is made and entered into as of June
15, 1983, by and between the CITY OF CARLSBAD, CALIFORNIA, a
municipal corporation, duly organized and existing under the Constitution and laws of the State of California (the
banking association duly organized, existing and authorized to accept and execute trusts of the character herein set out under
and by virtue of the laws of the United States, with its principal office located in Los Angeles, California, as trustee
(the "Trustee") .
Issuer"), and SECURITY PACIFIC NATIONAL BANK, a national I!
WITNESSETH:
WHEREAS, Part 5 of Division 31 of the Health and Safety
Code of the State of California (the "Act") authorizes the
Issuer to incur indebtedness for the purpose of financing home
mortgages authorized by the Act, and the Act provides a
complete, additional and alternative method for doing the
things authorized thereby;
financing program by purchasing home mortgages made to
qualified persons and families from qualified lending
institutions pursuant to the Act, and has determined to borrow money for such purpose by the issuance of revenue bonds as authorized by the Act;
WHEREAS, the Issuer has determined to engage in a home
WHEREAS, the aforesaid revenue bonds are to be issued hereunder in the aggregate principal amount of million dollars ($ ) for the purpose, among others, of
providing moneys to purchase home mortgages and are to be
designated as the "City of Carlsbad, California, Single Family
Residential Mortgage Revenue Bonds, Issue of 1983"; and
WHEREAS, the form of the bonds, Trustee's certificate of authentication, and assignment to appear thereon are all to be in substantially the following forms, respectively, with necessary and appropriate variations, omissions and insertions as permitted or required by this Indenture, to wit:
[FORM OF BOND]
No.
CITY OF CARLSBAD, CALIFORNIA SINGLE FAMILY RESIDENTIAL MORTGAGE REVENUE BOND
ISSUE OF 1983
The CITY OF CARLSBAD, a municipal corporation of the State of California duly organized and existing under the
u
Constitution and laws of the State of California (herein called the "Issuer"), for value received, hereby promises to pay (but only out of the revenues and other assets pledged therefor as hereinafter mentioned) to
or registered assigns, on 1, , the principal sum of , in
lawful money of the United States of America (subject to any
right of prior redemption hereinafter mentioned); and to pay
interest thereon in like lawful money (but only from said
revenues and assets) from the interest payment date preceding
the date of registration of this Bond to which interest has
been paid or duly provided for (unless the date of registration of this Bond is an interest payment date, in which event it
shall bear interest from such date, or unless the date of
registration of this Bond is after a regular record date (whick
shall be the fifteenth day of the month preceding an interest
payment date) and before the following interest payment date,
and if the Issuer shall not default in the payment of interest
due on such interest payment date, in which event it shall bear
interest from such interest payment date; or unless the date of
registration of this Bond is on or before December 15, 1983, ir
which event it shall bear interest from June 15, 1983) until
payment of such principal sum shall be discharged as provided in the Indenture hereinafter mentioned, at the rate
of percent (-x) per annum, payable semiannually or January 1 and July 1 in each year. The principal (or redemption price) hereof is payable upon surrender hereof at the principal corporate trust office of Security Pacific National Bank (herein called the "Trustee") in Los Angeles, California, and the interest hereon is payable by check or
draft mailed to the person in whose name this Bond (or one or
more predecessor Bonds) is registered as of the close of
business on the regular record date preceding the applicable
interest payment date (subject to certain exceptions set forth in the Indenture hereinafter referred to) at such person's address as it appears on the registration books of the Trustee
This Bond is one of a duly authorized issue of bonds of thi Issuer designated as the "City of Carlsbad, California, Single
Family Residential Mortgage Revenue Bonds, Issue of 1983"
(herein called the "Bonds"), in the aggregate principal amount
of dollars ($ ) , of varying dates, maturities, interest rates, redemption and other provisions,
all issued under the provisions of Part 5 of Division 31 of thi
Health and Safety Code of the State of California (herein
Issuer and a trust indenture, dated as of June 15, 1983,
between the Issuer and the Trustee (herein called the
"Indenture"). The Bonds are issued for the purpose of providing moneys for the purchase of Loans (as that term is
called the "Act"), and pursuant to Resolution No. 83-- of thi
5071P/2062/06 -2-
4
defined in the Indenture). Reference is hereby made to the
Indenture (a copy of which is on file at said office of the
Trustee) and all indentures supplemental thereto and to the Act for a description of the rights thereunder of the owners of the
Bonds, of the nature and extent of the security and provisions
for payment of the Bonds, of the rights, duties and immunities
of the Trustee and of the rights and obligations of the Issuer
thereunder, to all the provisions of which Indenture the owner of this Bond, by acceptance hereof, assents and agrees.
The Bonds and the interest thereon are payable from
Revenues (as that term is defined in the Indenture) and are
secured by a pledge and assignment of said Revenues, the
proceeds of the sale of the Bonds and the amounts held in the
funds and accounts established pursuant to the Indenture, (except the Excess Earnings Fund) subject only to the provisions of the Indenture permitting the application thereof
for or to the purposes and on the terms and conditions set
forth in the Indenture. The Bonds are also secured by an
assignment of all of the right, title and interest of the
Issuer in the Loans and certain agreements related thereto (as more particularly described in the Indenture).
The Bonds are limited obligations of the Issuer and are not
a lien or charge upon the funds or property, or an indebtedness
or loan of credit, of the Issuer, except to the extent of the aforesaid pledge and assignment. Neither the faith and credit
nor the taxing power of the Issuer or of the State of California is pledged to the payment of the principal of or interest on the Bonds. The Bonds are not a debt of the State
of California, and said State is not liable for the payment
thereof.
The Bonds are subject to special mandatory redemption prio: to their respective stated maturities: (i) as a whole or in part, on July 1, 1986 or any date thereafter from amounts
remaining in the Program Fund established pursuant to the Indenture on June 1, 1986 or such later date as may be established by the Trustee pursuant to the Indenture; (ii) as whole or in part, on any interest payment date, from Revenues deposited in the Redemption Fund established pursuant to the Indenture (except as provided for in (i) hereof); and (iii) as a whole, from amounts held in various funds established
pursuant to the Indenture, on any date if said amounts are
sufficient to redeem all outstanding Bonds and pay required
expenses; in each case under the circumstances prescribed and
as provided in the Indenture, at a redemption price equal to
the principal amount thereof and interest accrued thereon to
the date fixed for redemption. In the event that Bonds are to
be redeemed in part, the amount of Bonds of each maturity to k
5971P/2062/06 -3-
so redeemed shall be determined by the Trustee as nearly as
practicable by multiplying the total amount of moneys available
for such redemption by the ratio which the principal amount of
Bonds of each maturity then outstanding bears to the principal
amount of all Bonds then outstanding. The Bonds to be redeemed
within a maturity shall be selected by lot in such manner as
the Trustee shall determine.
and 1, 2016 The Bonds due on 1, - are also subject to redemption prior to their respective statec
maturities, on any interest payment date on or after
1, - and 1, 2006, respectively, in part, by lot, from
mandatory sinking account payments established for each such
maturity as provided in the Indenture, at a redemption price
equal to the principal amount thereof and interest accrued
thereon to the date fixed for redemption, without premium.
Notice of any redemption, identifying the Bonds or portion:
thereof to be redeemed, shall be given by the Trustee not less
than ten nor more than sixty days before the date fixed for
redemption by mail to each of the registered owners of such
Bonds at their respective addresses appearing on the
registration books of the Trustee. redemption and payment is duly provided therefor as specified
in the Indenture, interest shall cease to accrue or compound
hereon from and after the date fixed for redemption.
If an event of default (as that term is defined in the Indenture) shall occur, the principal of all Bonds may be declared due and payable upon the conditions, in the manner an with the effect provided in the Indenture. The Indenture provides that in certain events such a declaration and its
consequences may be rescinded by the registered owners of not less than a majority in aggregate principal amount of the Bond
then outstanding, as determined pursuant to the Indenture.
If this Bond is called for
The Bonds are issuable only as fully registered Bonds without coupons in denominations of $5,000 and any integral multiple thereof. Subject to the limitations and upon payment of the charges, if any, provided in the Indenture, Bonds may b exchanged at the aforesaid office of the Trustee, or at the office maintained by the Trustee for such purpose in New York, New York, for a like amount of Bonds of the same maturity of
other authorized denominations.
The transfer of this Bond is registrable on the
registration books of the Trustee upon surrender of this Bond
for registration of transfer at the aforesaid offices of the
Trustee duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Trustee,
507 1P/2062/06 -4-
duly executed by, the registered owner hereof or by his
attorney duly authorized in writing, but only in the manner,
subject to the limitations and upon payment of the charges, if
any, provided in the Indenture. Upon such registration of transfer, a new Bond or Bonds, of any authorized denomination or denominations, of the same maturity and amount, will be issued to the transferee in exchange herefor.
The Issuer and the Trustee may treat the person in whose
name this Bond is registered as the absolute owner hereof for all purposes, and the Issuer and the Trustee shall not be
affected by any notice to the contrary.
The Indenture, and the rights and obligations of the Issuer, of the registered owners of the Bonds and of the
Trustee, may be modified or amended at any time in the manner,
to the extent, and upon the terms provided in the Indenture, provided that no such modification or amendment shall (i) extend the fixed maturity of this Bond, or reduce the amount of
principal hereof, or extend the time of payment or reduce the amount of any mandatory sinking account payment provided in the Indenture for the payment of this Bond, or reduce the rate of
interest hereon, or extend the time of payment of interest
hereon, without the consent of the registered owner hereof, or
(ii) reduce the percentage of Bonds the consent of the registered owners of which is required to effect any such
modification or amendment, permit the creation of any lien on the Revenues and other assets pledged as security for the Bond!
prior to or on a parity with the lien created by the Indenture,
or deprive the registered owners of the Bonds of the lien of
the Indenture (except as expressly provided in the Indenture), without the consent of the registered owners of all Bonds then outstanding, all as more fully set forth in the Indenture.
It is hereby certified and recited that any and all
conditions, things and acts required to exist, to have happenel
and to have been performed precedent to and in the issuance of
this Bond exist, have happened and have been performed in due
time, form and manner as required by the Act, and by the
Constitution and laws of the State of California, and that the amount of this Bond, together with all other indebtedness of
the Issuer, does not exceed any limit prescribed by the Act, o by the Constitution and laws of the State of California, and i
not in excess of the amount of Bonds permitted to be issued under the Indenture.
This Bond shall not be entitled to any benefit under the
Indenture, or become valid or obligatory for any purpose, unti the certificate of authentication hereon endorsed shall have been dated and signed by the Trustee.
5071P/2062/06 -5-
[FORM OF ASSIGNMENT]
For value received the undersigned do(es) hereby sell,
assign and transfer unto the within-mentioned registered Bond and hereby irrevocably
constitute(s) and appoint(s) as the undersigned's attorney, to transfer the same on the books
of the Trustee with full power of substitution in the premises.
Dated
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order tc secure the payment of the principal of, and the interest and premium, if any, on, all Bonds at any time issued and
outstanding under this Indenture, according to their tenor, anc
to secure the performance and observance of all the covenants
and conditions therein and herein set forth, and to declare the
terms and conditions upon and subject to which the Bonds are tc
be issued and received, and in consideration of the premises
and of the mutual covenants herein contained and of the
purchase and acceptance of the Bonds by the registered owners thereof, and for other valuable considerations, the receipt
whereof is hereby acknowledged, the Issuer does hereby covenanl
and agree with the Trustee, for the benefit of the respective registered owners from time to time of the Bonds, as follows:
ARTICLE I AUTHORITY FOR BONDS; EQUAL SECURITY; DEFINITIONS
SECTION 1.01. Due Authorization. The Issuer has reviewec all proceedings heretofore taken relative to the authorization of the Bonds and has found, as a result of such review, and does hereby find and determine, that each and all of the matters hereinabove recited are true and correct, and the Issuer has duly and regularly complied with all applicable provisions of law and is duly authorized by law to execute thi Indenture and to issue the Bonds for the purpose, in the manne and upon the terms in this Indenture provided.
SECTION 1.02. Equal Security. The pledge made in this Indenture and the provisions, covenants and agreements herein
set forth to be performed by or on behalf of the Issuer or the Trustee shall be for the equal and proportionate benefit,
security and protection of the Owners from time to time of the
507 lP/2062/06 -7-
Bonds, without preference, priority or distinction as to
security or otherwise of any of the Bonds over any of the others by reason of number or date thereof or time of issue, sale, execution, authentication, delivery or maturity thereof
or otherwise for any cause whatsoever, except a5 expressly provided in or permitted by this Indenture.
SECTION 1.03. Definitions. Unless the context otherwise
requires, the terms defined in this Section shall for all purposes of this Indenture, and of any indenture supplemental
hereto and of any certificate, opinion or other document hereir!
mentioned, have the meanings herein specified, to be equally
applicable to both the singular and plural forms of any of the terms herein defined. Unless otherwise defined in this
Indenture, all terms used herein shall have the meanings assigned to such terms in the Act.
Act -
Act" means Part 5 of Division 31 of the Health and Safety ?I
Code of the State of California, from time to time hereafter be amended or supplemented.
Administrator
as now in effect and as it mal
"Administrator" means the entity designated as such in the Agreement.
Agreement
Agreements among the Issuer, the Trustee, the Administrator,
and a Lending Institution, and all amendments or supplements thereto.
Bond Fund
Agreement" means any of the Mortgage Sale and Service 11
"Bond Fund" means the fund by that name established pursuant to Section 5.01.
Bond Year
ending on the first day of July in any year in which Bonds are or will be Outstanding.
Bonds, - Serial Bonds, Term Bonds
Family Residential Mortgage Revenue Bonds, Issue of 1983 authorized by, and at any time Outstanding pursuant to, this Indenture.
"Bond Year" means the period of twelve consecutive months
"Bonds" means the City of Carlsbad, California, Single
507 lP/2062/06 -8-
"Serial Bonds" means the Bonds, falling due by their terms
in specified years, for which no Mandatory Sinking Account
Payments are provided.
"Term Bonds" means the Bonds payable at or before their
specified maturity date or dates from Mandatory Sinking Account
Payments established for that purpose and calculated to retire
such Bonds on or before their specified maturity date or dates.
Capital Reserve Account
"Capital Reserve Account" means the account in the Revenue Fund so named established pursuant to Section 5.01.
Capital Reserve Account Requirement
"Capital Reserve Account Requirement" means an amount equal to two percent (2%) of the principal amount of the Loans
outstanding as of any date of calculation.
Certificate, Statement, Request, Requisition, or Order of the
Issuer or a Lending Institution
"Certificate, I' "Statement, " "Request, 'I "Requisition" and
"Order" mean, respectively, a written certificate, statement,
request, requisition or order executed as follows: (1) if of
the Issuer, by the City Manager, the Building Official, or suck
other person as may be designated and authorized to sign for
the Issuer, (2) if of a Lending Institution, by such person as may be designated and authorized to sign for or such Lending Institution, as the case may be. Any such instrument and supporting opinions or representations, if any, may, but need
not, be combined in a single instrument with any other
instrument, opinion or representation, and the two or more so
combined shall be read and construed as a single instrument.
If and to the extent required by Section 1.04, each such
instrument shall include the statements provided for in Sectior
1.04.
Code
"Code" means the Internal Revenue Code of 1954, as amended, and all regulations and rulings promulgated thereunder.
Costs of Issuance
"Costs of Issuance" means all administrative fees of the
Issuer and items of expense directly or indirectly payable by
or reimbursable to the Issuer and related to the authorization,
issuance, sale and delivery of the Bonds, including but not
limited to advertising and printing costs, costs of preparatioi
5071P/2062/06 -9-
and reproduction of documents, filing and recording fees, initial fees and charges of any insurer, the Issuer and the Trustee, (including fees and charges for services through the first Bond Year), legal fees and charges, fees and disbursements of consultants and professionals, rating agency fees, fees and charges for preparation, execution, transportation and safekeeping of Bonds and any other cost, charge or fee in connection with the original issuance of Bonds
Developer
"Developer" means any person engaged in the construction of Residences who is a party to a Developer Agreement.
Developer Agreement
"Developer Agreement" means an agreement between a
Developer and the Issuer regarding the construction or development by the Developer of, and the reservation of funds for the making of Loans for, Residences.
Developer Fees
Developer Fees" means the fees paid to the Issuer by the 1?
Developers pursuant to the Developer Agreements.
Estimated Excess Earnings
Estimated Excess Earnings" means the Excess Earnings whicl the Trustee estimates, as of each May 1 and November 1, will bt earned during the Semiannual Debt Service Period for which the estimate is being made.
Estimated Excess Earnings Account
11
Estimated Excess Earnings Account" means the account by 91
that name established pursuant to Section 5.01.
Estimated Maximum Earnings
"Estimated Maximum Earnings" means the Maximum Earnings
which the Trustee estimates, as of each May 1 and November 1, will be applicable to the Semiannual Debt Service Period for
which the estimate is being made.
Event of Default
"Event of Default" means any of the events specified in Section 7.01.
5071P/2062/06 -10-
Excess Earnings
"Excess Earnings'' means earnings on investments held hereunder (exclusive of Loans), including unrealized gains and losses upon the retirement of the last Outstanding Bond, durinc
the period for which the calculation is being made which are ii excess of the sum of (i) Maximum Earnings (calculated on the basis of semiannual compounding) and (ii) actual losses on Loans.
Excess Earnings Fund
"Excess Earnings Fund" means the fund by that name
established pursuant to Section 5.01.
Financial Newspaper or Journal
"Financial Newspaper or Journal'' means The Wall Street
Journal or The Bond Buyer or any other newspaper or journal
containing financial news, printed in the English language, customarily published on each business day and circulated in
Los Angeles, California, and New York, New York, and selected by the Trustee, whose decision shall be final and conclusive.
Fiscal Year
"Fiscal Year" means the period beginning on July 1 of each year and ending on the next succeeding June 30, or any other twelve-month period hereafter selected and designated as the official fiscal year period of the Issuer.
Impound Payments
"Impound Payments" means all deposits made by a Mortgagor
in order to obtain or maintain mortgage insurance or guarantee: or fire and other hazard insurance or any federal, state or local program subsidy with respect to a Loan or the premises relating thereto, and deposits required to be made with respec. to taxes and other governmental charges or similar charges customarily required to be deposited in advance by a Mortgagor and impounded pending their payment for the item or items for
which the deposits were impounded.
Interest Payment Date
"Interest Payment Date" means each January 1 and July 1, commencing January 1, 1984.
Interest Reserve Account
"Interest Reserve Account" means the account in the Revenuc Fund so named established pursuant to Section 5.01.
5071P/2062/06 -11-
Indenture
"Indenture" means this Indenture, as originally executed or
as it may from time to time be supplemented, modified or
amended by any Supplemental Indenture.
Investment Agreement
"Investment Agreement" means one or more agreements in form
and substance satisfactory to the Issuer, dated as of the date
on which the Bonds are issued, by and between the Trustee
and
from the sale of the Bonds may be invested.
Investment Securities
pursuant to which the proceeds
"Investment Securities" means any of the following which at
the time are legal investments under the laws of the State of
California for moneys held hereunder and then proposed to be
invested therein: (1) direct obligations of the United States of America (including obligations issued or held in book-entry form on the books of the Department of the Treasury of the United States of America) or obligations the principal of and interest on which are guaranteed by the United States of America; (2) obligations, debentures, notes or other evidence of indebtedness the payment of which is secured by the full
faith and credit of the United States of America; (3) certificates of deposit with or general obligations of any bank
or savings and loan association the securities of which are rated not less than 'I- 11 by Standard & Poor's Corporation, if
not secured by such collateral; and (4) the Investment
Agreement.
Issuer
11 Issuer'' means the City of Carlsbad, a municipal
corporation of the State of California, duly organized and existing under the Constitution and laws of the State of California.
Lending Institution
"Lending Institution" means any financial institution
identified as such in, and which is a party to, an Agreement
and its successors and assigns pursuant thereto.
Loan
"Loan" means a loan, evidenced by a Note secured by a first lien Mortgage, which meets the requirements of the Agreement
and which the Trustee, on behalf of the Issuer, has purchased
or intends to purchase from a Lending Institution pursuant to the Agreement.
5071P/2062/06 - 12-
Loan Principal Prepayments
"Loan Principal Prepayments" means all amounts received by
the Issuer or the Trustee representing recovery of the
principal amount of any Loan (exclusive of regularly scheduled principal payments) as a result of (1) any prepayment of all of the principal amount of any Loan, including any prepayment penalty, fee, premium or other such additional charge; (2) the sale, assignment or other disposition of any Loan; (3) the acceleration of any Loan (on account of default or any other
cause) or the foreclosure or sale under deed of trust or other proceedings taken in the event of default of any Loan; and (4) compensation for losses incurred with respect to any Loan from the proceeds of condemnation, title insurance, hazard insurance, mortgage insurance or guarantees (whether received in the form of moneys or as debentures or certificates issued pursuant to a contract of insurance), exclusive of amounts recovered in respect of such losses to the extent required to be otherwise applied pursuant to the applicable contract of insurance.
Mandatory Sinking Account Payment
"Mandatory Sinking Account Payment" means, as of any date
of calculation, the amount required by Section 5.04(C) to be paid by the Issuer on a given date for the retirement of Term
Bonds.
Maximum Earnings
11 Maximum Earnings" means the product of an interest rate
equal to the Yield on the Bonds multiplied by the average daily balance of amounts held hereunder in investments other than Loans during the period for which the calculation is being made, calculated on the basis of semiannual compounding.
Mortgage
"Mortgage" means a deed of trust, mortgage or other similar
instrument or instruments creating a first lien (subject to
certain permitted encumbrances) on the real property and the
improvements thereon securing a Loan.
Mortgagor
"Mortgagor" means the maker of,, and any other party obligated on, a Note in connection with the acquisition of a
Residence through the borrowing of money pursuant to a Loan and shall also include, where appropriate, a subsequent purchaser of a Residence who purchased such Residence subject to the related Mortgage and who meets the applicable requirements Of the Code, the Act and the Program.
507 1P/2 062/06 -13-
Note
Note" means the promissory note or other document or It
documents evidencing the obligation to repay a Loan.
Notice of Fee, Rate and Allocation
"Notice of Fee, Rate and Allocation" means a notice from the Issuer to the Trustee and others specifying, among other
things, the Yield on the Bonds, which notice shall be provided within thirty days after the issuance of the Bonds.
Outstanding
"Outstanding" when used as of any particular time with reference to Bonds, means (subject to the provisions of Section
11.09) all Bonds theretofore, or thereupon being, authenticated and delivered by or on behalf of the Trustee under this Indenture except (1) Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for cancellation; (2) Bonds with respect to which all liability of the Issuer shall have been
discharged in accordance with Section 10.02, including Bonds
(or portions of Bonds) referred to in Section 11.10; and (3)
Bonds for the transfer or exchange of or in lieu of or in
substitution for which other Bonds shall have been
authenticated and delivered by or on behalf of the Trustee
pursuant to this Indenture.
Owner
Owner" means the Person in whose name a Bond is registered 11
in the registry maintained by the Trustee.
Person
"Person" means an individual, corporation, firm,
association, partnership, trust, or other legal entity or groq
of entities, including a governmental entity or any agency or
political subdivision thereof.
Program
"Program" means the Issuer's program of purchasing Loans pursuant to this Indenture, the Act and the rules and regulations adopted by the City Council, as such rules and regulations may from time to time be amended or supplemented.
Program Expense Fund
Program Expense Fund" means the fund by that name fI
established pursuant to Section 5.01.
5071P/2 062/06 -14-
Program Expense Fund Requirement
"Program Expense Fund Requirement" means, as of any date of calculation, such amount as may at any time and from time to time be fixed or determined by the Trustee, with notice thereof to the Issuer, as necessary to be accumulated in the Program
Expense Fund as a reserve for the uses to which amounts in such fund may be applied pursuant to Section 5.03.
Program Fund
"Program Fund" means the fund by that name established
pursuant to Section 3.03.
Qualified Program Expenses
"Qualified Program Expenses" means the following of the
Issuer's expenses in carrying out and administering the
Program: (1) fees and expenses of the Issuer (but only to the
extent paid or incurred in connection with the preparation of
financial reports required pursuant to Section 6.06) and the
Trustee and (2) insurance premiums with respect to any special
hazard insurance required to be maintained on or with respect
to any one or more Loans pursuant to Section 6.10(C).
Redemption Fund
"Redemption Fund" means the fund by that name established pursuant to Section 5.01.
Redemption Price
"Redemption Price" means, with respect to any Bond (or
portion thereof if less than all of such a Bond is to be redeemed), the principal amount of such Bond (or portion) plus accrued interest thereon to the date fixed for redemption.
Regular Record Date
"Regular Record Date" means the close of business on the fifteenth day of the month preceding each Interest Payment Date, whether or not such fifteenth day is a business day.
Reserve Fund
"Reserve Fund" means the fund by that name established
pursuant to Section 5.01.
Residence
"Residence" means real property and improvements thereon consisting of a single family detached or attached
507 lP/2062/06 -15-
(condominium, rowhouse, townhouse) residential unit (but not
including a mobile home, that is, a residence transportable in one or more sections built on a chassis) which can reasonably be expected to become the principal residence of the mortgagor within a reasonable period of time (which shall not exceed 60 days) after the Loan is made to the Mortgagor and which is
located within the incorporated area of the Issuer.
Revenues
Revenues" means all amounts received by the Issuer or the 11
Trustee from or with respect to any Loan, any Agreement, any Developer Agreement or any policy of insurance on or with respect to any Loan, including, without limiting the generality of the foregoing, scheduled payments of principal and interest required pursuant to any Loan and paid from any source (including both timely and delinquent payments), Loan Principal Prepayments, and all interests, profits or other income derived from the investment of amounts in any fund or account established pursuant to this Indenture (except the Excess Earnings Fund), but shall not include (1) Impound Payments, (2) any amount retained by any Lending Institution (other than the Issuer) as a servicing fee or other compensation, and (3) Excess Earnings.
Revenue Fund
"Revenue Fund" means the fund by that name established pursuant to Section 5.01.
Semiannual Debt Service Period
"Semiannual Debt Service Period" means the period from January 1 through June 30 and the period from July 1 through December 31 in any year in which there are Bonds Outstanding.
Supplemental Indenture
"Supplemental Indenture" means any indenture hereafter dull
authorized under and in compliance with the Act, and entered
into between the Issuer and the Trustee, supplementing,
modifying or amending this Indenture; but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder.
Trustee
"Trustee" means Security Pacific National Bank, a national banking association organized and existing under the laws Of the United States of America having a corporate trust office ii
Los Angeles, California, or its successor, as Trustee hereunde
as provided in Section 8.01.
5071P/2062/06 -16-
Yield on the Bonds
"Yield on the Bonds" means the yield thereon as determined
by the Issuer in accordance with the Code and as specified by the Issuer in a Notice of Fee, Rate and Allocation.
SECTION 1.04. Content of Certificates and Opinions. Every certificate or opinion provided for in this Indenture with respect to compliance with any provision hereof shall include (1) a statement that the Person making or giving such certificate or opinion has read such provision and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the certificate or opinion is based; (3) a statement
that, in the opinion of such Person, he has made or caused to
be made such examination or investigation as is necessary to
enable him to express an informed opinion with respect to the
subject matter referred to in the instrument to which his
signature is affixed; and (4) a statement as to whether, in the
opinion of such Person, such provision has been complied with.
Any such certificate or opinion made or given by an office] of the Issuer or a Lending Institution may be based, insofar a: it relates to legal, accounting or Program matters, upon a certificate or opinion of or representation by counsel, accountant or program consultant, unless such officer knows, 01
in the exercise of reasonable care should have known, that the
certificate, opinion or representation with respect to the matters upon which such certificate or statement may be based,
as aforesaid, is erroneous or misleading. Any such certificatc
or opinion made or given by counsel, accountant or program
consultant may be based, insofar as it relates to factual matters (with respect to which information is in the possessiox of the Issuer or a Lending Institution) upon a certificate or opinion of or representation by an officer of the Issuer or thc Lending Institution, unless such counsel, accountant or prograr consultant knows, or in the exercise of reasonable care should have known, that the certificate or opinion or representation with respect to the matters upon which such Person's certificate or opinion or representations may be based, as
aforesaid, is erroneous or misleading. The same officer of thl
Issuer or a Lending Institution, or the same counsel or
accountant or program consultant, as the case may be, need not
certify to all of the matters required to be certified under
any provision of this Indenture, but different officers,
counsel, accountants or program consultants may certify to different matters, respectively.
5071P/2062/06 -17-
ARTICLE I1
THE BONDS
SECTION 2.01. Authorization of Bonds. An issue of bonds to be issued hereunder in order to obtain moneys to carry out the Program is hereby created. Such bonds are designated as
the "City of Carlsbad, California, Single Family Residential
Mortgage Revenue Bonds, Issue of 1983." The aggregate
principal amount of Bonds which may be issued and Outstanding
under this Indenture shall not exceed million
dollars ($ )-
SECTION 2.02. Terms of the Bonds. The Bonds shall be issued only as fully registered Bonds without coupons in the denomination of $5,000 principal amount, or any integral multiple thereof. Each maturity of the Bonds shall be assignec a different initial letter designation, commencing with the letter "A" for the first maturity and proceeding in consecutive alphabetical order (omitting the letters "I" and "0") for the
remaining maturities; and the Bonds within each maturity shall
be numbered in consecutive numerical order from 1 upwards.
The Bonds shall be dated as of June 15, 1983, and interest
thereon shall be payable semiannually on the Interest Payment
Dates in each year as hereinafter provided. Each Bond shall bear interest from the Interest Payment Date next preceding the date of registration thereof unless: (i) it is registered as of an Interest Payment Date, in which event it shall bear interest from such date; or (ii) unless it is registered after a Regular Record Date and before the following Interest Payment Date and
if the Issuer shall not default in the payment of interest due on such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date; or (iii) unless it is
registered on or before December 15, 1983, in which event it
shall bear interest from June 15, 1983; provided, however, that
if, as of the date of registration of any Bond, interest is in default on Outstanding Bonds, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on the Outstanding Bonds.
The Bonds shall mature on the following dates, in the following amounts, and shall bear interest at the following rates per annum:
5071P/2062/06 -18-
Maturity Principal Interest Date Amount Rate
July 1, 1986 $ , 000 -% January 1, 1987 $ ,000 *% July 1, 1987 $ ,000 *% January 1, 1988 $ ,000 -% July 1, 1988 $ ,000 -% January 1, 1989 $ , 000 -% July 1, 1989 $ , 000 -% January 1, 1990 $ ,000 .% July 1, 1990 $ ,000 *%
January 1, 1991 $ ,000 -%
July 1, 1991 $ ,000 *% January 1, 1992 $ ,000 .% July 1, 1992 $ ,000 -% January 1, 1993 $ ,000 -% July 1, 1993 $ , 000 *% January 1, 1994 $ ,000 *% July 1, 1994 $ ,000 *% January 1, 1995 $ ,000 -% July 1, 1995 $ , 000 -% January 1, 1996 $ , 000 *% July 1, 1996 $ ,000 -% January 1, 1997 $ , 000 .% July 1, 1997 $ ,000 -% July 1, 2005 $ ,000 *% July 1, 2016 $ ,000 *%
The principal or Redemption Price of the Bonds shall be payable in lawful money of the United States of America at the principal corporate trust office of the Trustee, in Los
Angeles, California. Payment of the interest on each Bond
which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be made to the Person whose name appears on the bond registration books of the Trustee as
the registered Owner thereof on the Regular Record Date preceding such Interest Payment Date, such interest to be paid by check or draft mailed to the registered Owner at his address as it appears on such registration books or at such address as he may have filed with the Trustee for that purpose.
Any interest on any Bond which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the registered Owner on the relevant Regular
Record Date by virtue of having been such Owner; and such
Defaulted Interest shall be paid to the person in whose name
such Bond (or its respective predecessor Bonds) is registered
at the close of business on a special record date for the
payment of such Defaulted Interest, which shall be fixed in tht following manner. The Issuer shall notify the Trustee in
5071P/2062/06 -19-
writing of the amount of Defaulted Interest proposed to be paid
on each Bond and the date of the proposed payment, and at the same time the Issuer shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held
in trust for the benefit of the persons entitled to such
Defaulted Interest. Thereupon the Trustee shall fix a special record date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Issuer of such
special record date and shall cause notice of the proposed
payment of such Defaulted Interest and the special record date
therefor to be mailed, first class, postage prepaid, to each
Owner at his address which appears in the bond registration
books not less than 10 days prior to such special record date.
Notice of the proposed payment of such Defaulted Interest and
the special record date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the person
in whose name the Bond (or its respective predecessor Bonds) is registered on such special record date.
The Bonds shall be subject to redemption as provided in Article IV.
SECTION 2.03. Execution of Bonds. The Bonds shall be
executed in the name and on behalf of the Issuer with the
manual or facsimile signature of its Mayor, under its seal
attested by the manual or facsimile signature of the City
Clerk. Such seal may be in the form of a facsimile of the Issuer's seal and may be reproduced, imprinted or impressed on the Bonds. The Bonds shall then be delivered to the Trustee for authentication by it. In case any of the officers who shall have signed or attested any of the Bonds shall cease to be such officer or officers of the Issuer before the Bonds so signed or attested shall have been authenticated or delivered by the Trustee or issued by the Issuer, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding
upon the Issuer as though those who signed and attested the
same had continued to be such officers of the Issuer, and also
any Bond may be signed and attested on behalf of the Issuer by
such Persons as at the actual date of execution of such Bond
shall be the proper officers of the Issuer although at the nominal date of such Bond any such Person shall not have been such officer of the Issuer.
Only such of the Bonds as shall bear thereon a certificate of authentication in the form hereinbefore recited, manually
5071P/2062/06 -20-
executed by or on behalf of the Trustee, shall be valid or
obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee shall be
conclusive evidence that the Bonds so authenticated have been
duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Indenture.
SECTION 2.04. Transfer of Bonds. The transfer of any Bond is registrable on the books required to be kept pursuant to Section 2.06 upon the surrender of such Bond for registration of transfer at the principal corporate trust office of the Trustee in Los Angeles, California, or at the
office maintained by the Trustee for such purpose in New York, New York, accompanied by a written instrument of transfer in form satisfactory to the Trustee duly executed by the Owner or by his attorney duly authorized in writing.
transfer, the Issuer shall execute and the Trustee shall authenticate and deliver a new Bond or Bonds, of the same maturity and for a like aggregate principal amount. The
Trustee shall require the payment by the Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer and may require the payment of a charge equal to the customary fee charged by the Trustee for such transfers.
Whenever any Bond or Bonds shall be surrendered for
SECTION 2.05. Exchange of Bonds. Bonds may be exchanged
at the aforesaid offices of the Trustee for a like aggregate principal amount of Bonds of other authorized denominations of the same maturity. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such
exchange and may require the payment of a charge equal to the customary fee charged by the Trustee for such exchanges.
SECTION 2.06. Bond Register. The Trustee will keep or cause to be kept, at its principal corporate trust office in Los Angeles, California, sufficient books for the registration
and transfer of the Bonds, which shall at all times be open to
inspection by the Issuer; and, upon presentation for such
purpose, the Trustee shall, under such reasonable regulations
as it may prescribe, register or transfer or cause to be
registered or transferred, on such books, Bonds as hereinbefore
provided.
SECTION 2.07. Temporary Bonds. The Bonds may be initially issued in temporary form exchangeable for definitive
Bonds when ready for delivery. Any temporary Bond may be
printed, lithographed or typewritten, shall be of such denomination as may be determined by the Issuer, shall be in
registered form without coupons and may contain such reference
5071P/2062/06 -21-
to any of the provisions of this Indenture as may be
appropriate. fully registered Bond payable in installments, each on the date, in the amount and at the rate of interest established foi the Bonds maturing on such date. Every temporary Bond shall bt executed by the Issuer and be authenticated by the Trustee upox
the same conditions and in substantially the same manner as tht definitive Bonds. If the Issuer issues temporary Bonds it wil: execute and furnish definitive Bonds without delay, and
thereupon the temporary Bonds may be surrendered, for
cancellation, in exchange therefor at the principal corporate
trust office of the Trustee in Los Angeles, California, and tht
Trustee shall authenticate and deliver in exchange for such
temporary Bonds an equal aggregate principal amount of
definitive Bonds of authorized denominations of the same maturity. Until so exchanged, the temporary Bonds shall be
entitled to the same benefits under this Indenture as
definitive Bonds authenticated and delivered hereunder.
SECTION 2.08. Bonds Mutilated, Lost, Destroyed or
Stolen. If any Bond shall become mutilated, the Issuer, at thc
expense of the Owner of said Bond, shall execute, and the
Trustee shall thereupon authenticate and deliver, a new Bond 0:
like tenor and number in exchange and substitution for the Bonc
so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be cancelled by it and delivered to, or upon the
Order of, the Issuer. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Issuer and the Trustee and, if such evidence be satisfactory to both and indemnity satisfactory to both shall be given, the Issuer, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in lieu of and in
substitution for the Bond so lost, destroyed or stolen. The
Issuer may require payment of a sum not exceeding the actual
cost of preparing each new Bond issued under this Section and of the expenses which may be incurred by the Issuer and the
Trustee in the premises. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost,
destroyed or stolen shall constitute an original additional
contractual obligation on the part of the Issuer whether or no. the Bond so alleged to be lost, destroyed or stolen be at any
time enforceable by anyone, and shall be equally and
proportionately entitled to the benefits of this Indenture wit1
all other Bonds secured by this Indenture.
A temporary Bond may be in the form of a single
ARTICLE I11
ISSUE OF BONDS; PURCHASE OF HOME MORTGAGES
SECTION 3.01. Issuance, Sale and Delivery of Bonds. Upo: the sale and execution thereof by the Issuer, the Trustee shal
5071P/2062/06 -22-
-I
authenticate and deliver, or cause to be authenticated and
delivered, to or upon the Order of the Issuer, Bonds in the
aggregate principal amount of dollars ($
Commitment Fees. (A) The proceeds received by the Issuer fro] the sale of the Bonds shall be deposited in trust with the Trustee, who shall forthwith set aside such proceeds in the following respective funds and amounts:
(1) in the Revenue Fund, accrued interest received
SECTION 3.02. Application of Proceeds of Bonds and
upon the sale and delivery of the Bonds;
(2) in the Capital Reserve Account, $
(3) in the Interest Reserve Account, $ ; and
(4) in the Program Fund, the remainder of said
proceeds.
(B) On the date of issuance of the Bonds, the Issuer shal
I
transfer the Developer Fees to the Trustee, and the Trustee
shall deposit the same in the Program Fund. Trustee shall deposit in the Program Fund the premium and prepaid interest, if any, received by it in connection with thi initial investment of the Bond proceeds pursuant to the Investment Agreement.
SECTION 3.03.
On said date the
Establishment and Application of Program
Fund. (A) The Trustee shall establish, maintain and hold in
trust a separate fund designated as the "Program Fund.'' Money
in the Program Fund shall be used and withdrawn, as provided i:
this Section, solely for the (1) purchase of Loans, (2) paymen
of Costs of Issuance of the Bonds, and (3) purchase or redemption of Bonds, all as hereinafter provided.
The Trustee shall disburse moneys in the Program Fund
for the purchase of Loans only upon Requisition of the Issuer or the Administrator, as hereinafter provided. Such Requisition shall identify (by Mortgagor, principal amount and
location of property) each Loan to be purchased and shall stat with respect to each such Loan the amount to be paid, the
Lending Institution to whom payment is to be made, the date on
which such payment is to occur, the Lending Institution which
is to service each such Loan and that each such Loan is authorized to be purchased by the Issuer under the Act (as in
force on the date of issuance of the Bonds or on the date of
such Requisition), the Program and this Indenture. Such Requisition may provide that disbursement for the purchase of any particular Loan shall be from an escrow account establishe for such purpose, in which case such Requisition shall, in addition to the foregoing, state the number and holder of said
(B)
5071P/2062/06 -23-
escrow account, and the Trustee shall transfer the amount
requisitioned with respect to such Loan to said escrow
account. Prior to any disbursement being made to a Lending
Institution for the purchase of any particular Loan (whether
from the Program Fund or from an escrow account), the Trustee shall have received the documentation required for such Loan under the applicable Agreement.
The purchase price of each Loan shall be the sum of the
then outstanding principal balance thereof, paid from the Program Fund, plus the then unpaid and accrued interest
thereon, paid from the Revenue Fund (or from the Program Fund if the moneys in the Revenue Fund are insufficient for such
purpose).
The Trustee shall maintain or cause to be maintained accurate records of all such Requisitions for the purchase of Loans and of all Loans purchased pursuant thereto, and shall file or cause to be filed with the Issuer annually, or more frequently upon Request of the Issuer (but not more frequently than quarterly), a schedule of all such Loans, identifying eac2 Loan by reference to the name of the Mortgagor, the address of the applicable property, the Lending Institution by whom such Loan was originated, the Lending Institution servicing such Loan, the outstanding principal balance on such Loan as of the date of purchase and as of the date of said schedule, the
interest rate on and maturity date of such Loan and whether
such Loan is then in default.
(C) The Trustee shall disburse moneys in the Program Fund
to pay Costs of Issuance of the Bonds only upon Requisition of
the Issuer stating the Person to whom payment is to be made,
the amount to be paid, the purpose for which the obligation was incurred and that such payment is a proper charge against said fund; provided, however, that the aggregate amount of such disbursements shall not exceed $
(D) Any amounts remaining in the Program Fund on June 1,
1986, or such later date as the Trustee may designate pursuant
to the provisions of this paragraph, shall be transferred to
the Redemption Fund. The Trustee shall designate a date later
than June 1, 1986 for the purposes of this paragraph if prior to June 1, 1986 it receives an Order of the Issuer directing it to do so and specifying the later date to be so designated, which Order is accompanied by: (i) an opinion of counsel acceptable to the Trustee to the effect that such change of dates will not cause the interest on the Bonds to become taxable for federal income tax purposes, and (ii) an acknowledgement from Standard & Poor's Corporation (or such other evidence as may be satisfactory to the Trustee) that such change of dates will not adversely affect the rating of the 3onds.
5071P/2062/06 -24-
SECTION 3.04. Validity of Bonds. The validity of the
authorization and issuance of the Bonds is not dependent on and shall not be affected in any way by any proceedings taken by
the Issuer or the Trustee with respect to the purchase of any Loan or by the failure to purchase Loans. The recital contained in the Bonds that the same are issued pursuant to the Act and the Constitution and laws of the State of California shall be conclusive evidence of their validity and of
compliance with the provisions of law in their issuance.
ARTICLE IV
REDEMPTION OF BONDS
SECTION 4.01. Terms of Redemption. (A) The Bonds are
subject to special mandatory redemption prior to their respective stated maturities at their respective Redemption
Prices: (a) on July 1, 1986 from amounts transferred from the Program Fund to the Redemption Fund pursuant to Section 3.03(D)
(provided that if, pursuant to said Section, the Trustee shall designate a date later than June 1, 1986 as of which any
amounts remaining in the Program Fund are to be transferred to the Program Fund, then Bonds shall be redeemed from such
amounts on the earliest date subsequent to such transfer with
respect to which notice of redemption can be timely given); (b) under the circumstances prescribed in Section 5.07, as a whole or in part, on any Interest Payment Date, from moneys deposited in the Redemption Fund (except as provided for in (a) hereof);
and (c) as a whole on any date whenever the moneys in the Revenue Fund, Bond Fund, Bond Reserve Fund, and Redemption Fund, less the portion of said sum required to be set aside anc disbursed pursuant to Section 5.09, will equal the Redemption Price of all Outstanding Bonds plus any unpaid Qualified Program Expenses.
In the event that Bonds are to be specially redeemed in
part, the amount of Bonds of each maturity to be so redeemed shall be determined by the Trustee as nearly as practicable by multiplying the total amount of moneys available for such redemption by the ratio which the principal amount of Bonds of each maturity then Outstanding bears to the principal amount oj
all Bonds then Outstanding. The Bonds within each such
maturity to be redeemed shall be selected by lot pursuant to
Section 4.02.
and 1, 2016 (B) Bonds due on 1, - are also subject to redemption prior to their respective statec
maturities, on any Interest Payment Date on or after 1, - or 1, 2006, respectively, in part, by lot, fro1
Mandatory Sinking Account Payments established for each such
maturity in Section 5.04(C), at their respective Redemption Prices.
5071P/2062/06 -25-
SECTION 4.02. Selection of Bonds for Redemption. Whenever provision is made in this Indenture for the redemption of a portion of a maturity of the Bonds by lot, the Trustee shall select the Bonds to be redeemed, from all Bonds of such
maturity not previously called for redemption, by lot in any manner which the Trustee in its sole discretion shall deem
appropriate and fair. For purposes of such selection, Bonds
shall be deemed to be composed of $5,000 portions, and any such portion may be separately redeemed. The Trustee shall promptly
notify the Issuer in writing of the Bonds or portions thereof
so selected for redemption.
shall be mailed, not less than ten nor more than sixty days
prior to the redemption date, to the respective Owners of any
Bonds, or portions thereof, designated for redemption at their addresses appearing on the bond registration books of the Trustee. Each notice of redemption shall state the redemption date, the place or places of redemption, the maturities to be
redeemed, and, if less than all of any such maturity, the numbers of the Bonds of such maturity to be redeemed and, in the case of Bonds to be redeemed in part only, the respective portions of the principal or initial amount thereof to be redeemed, and shall also state that on said date there will become due and payable on each of said Bonds the Redemption Price thereof or of said specified portion of the principal or
initial amount thereof in the case of a Bond to be redeemed in
part only, and that from and after such redemption date
interest thereon shall cease to accrue or compound, and shall
require that such Bonds be then surrendered with a written
instrument of transfer duly executed by the registered Owner
thereof or by his attorney duly authorized in writing. Neither
the failure to mail such notice to a particular Owner nor any defect in any notice so mailed shall affect the sufficiency of the proceedings for the redemption of Bonds owned by any other Person.
SECTION 4.03. Notice of Redemption. Notice of redemption
Notice of redemption of Bonds shall be given by the Trustee
for and on behalf of the Issuer. Such notice shall be deemed
to have been given when mailed, first class postage prepaid, tc
the Owner of a Bond, a portion thereof, as provided for
hereinabove.
SECTION 4.04. Partial Redemption. Upon surrender of any
Bond redeemed in part only, the Issuer shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at
the expense of the Issuer, a new Bond or Bonds of authorized
denominations, and of the same maturity, equal in aggregate principal amount to the unredeemed portion of the Bond surrendered.
50712/2062/06 -26-
SECTION 4.05. Effect of Redemption. Notice of redemption
having been duly given as aforesaid, and moneys being held by the Trustee for payment of the Redemption Price of the Bonds
(or portions thereof) so called for redemption on the redemption date designated in such notice, the Bonds (or
portions thereof) so called for redemption shall become due and
payable at the Redemption Price specified in such notice and interest on the Bonds so called for redemption shall cease to accrue, said Bonds (or portions thereof) shall cease to be
entitled to any benefit or security under this Indenture, and the Owners of said Bonds shall have no rights in respect thereof except to receive payment of said Redemption Price.
Article shall be cancelled upon surrender thereof and delivered to or upon the Order of the Issuer.
All Bonds redeemed pursuant to the provisions of this
ARTICLE V
REVENUES AND FUNDS
SECTION 5.01. Pledge and Assignment; Revenue Fund. (A) Subject only to the provisions of this Indenture permitting the application thereof for or to the purposes and on the terms and
conditions set forth herein, there are hereby pledged to secure
the payment of the principal of and interest on the Bonds in
accordance with their terms and the provisions of this Indenture, all of the Revenues, all of the proceeds of the
Bonds and any other amounts held in any fund or account established pursuant to this Indenture (exclusive of the Excess Earnings Fund). Said pledge shall constitute a lien on and security interest in such assets and shall attach, be perfected and be valid and binding from and after delivery by the Trustee of the Bonds, without any physical delivery thereof or further act.
(B) The Issuer hereby transfers in trust, grants a
security interest in and assigns to the Trustee, for the
benefit of the Owners from time to time of the Bonds all of the
Revenues and other moneys pledged in subsection (A) of this
Section and all of the right, title and interest of the Issuer in each Loan, Agreement and Developer Agreement (including all agreements entered into under each Agreement and Developer Agreement). The Trustee shall be entitled to and shall collect and receive all of the Revenues, and any Revenues collected or received by the Issuer shall be deemed to be held, and to have been collected or received, by the Issuer as the agent of the Trustee and shall forthwith be paid by the Issuer to the Trustee.
5071P/2062/06 -27-
(C) The Trustee shall establish, maintain and hold in trust the following special funds:
(1) the Revenue Fund,
(2) (3) the Excess Earnings Fund,
(4) the Program Expense Fund, (5) the Bond Fund,
(6)
(7) the Redemption Fund.
the Estimated Excess Earnings Account,
the Reserve Fund (consisting of a Capital Reserve Account and an Interest Reserve Account), ar
All Revenues and Excess Earnings prior to their deposit in the Excess Earnings Fund shall be promptly deposited by the Trustee upon receipt thereof in the Revenue Fund except as provided in Section 3.02(B). All Revenues shall be held by the Trustee in trust for the benefit of the Owners at any time of the Bonds, and the Issuer shall have no beneficial right or interest in any of such moneys, except as in this Indenture provided.
Revenues deposited with the Trustee shall be held, disbursed allocated and applied by the Trustee only as provided in this Indenture.
All
SECTION 5.02. Allocation of Revenue to Funds and Accounts. and deposit into one or more of the following respective funds on the last day of each Semiannual Debt Service Period the following amounts, in the following order of priority, the
requirements of each such account or fund (including the makinc up of any deficiencies in any such account or fund resulting
from lack of Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account or fund subsequent in priority:
First: Into the Estimated Excess Earnings Account, the Estimated Excess Earnings for such Semiannual Debt Service Period;
The Trustee shall transfer from the Revenue Fund,
Second: Into the Program Fund, an amount equal to the amount of accrued and unpaid interest on Loans which was paid from the Program Fund pursuant to Section 3.03(B) during said
Semiannual Debt Service Period, provided that no such transfer
shall be made after the last day upon which Loans may be
purchased;
Third: Into the Program Expense Fund, the amount, if
any, needed to increase the amount in the Program Expense Fund to the Program Expense Fund Requirement;
to increase the amount in the Bond Fund to the sum of (1) the
aggregate amount of interest becoming due and payable on the
Fourth: Into the Bond Fund, the amount, if any, needed
5071P/2062/06 -28-
next Interest Payment Date upon all Bonds then Outstanding,
plus (ii) the aggregate amount of Mandatory Sinking Account Payments required to be paid, if any, on the next Interest
Payment Date, plus (iii) the aggregate amount of principal
becoming due and payable on the Outstanding Serial Bonds durinl
the next ensuing six months;
Fifth: Into the Capital Reserve Account, the amount, if
any, needed to increase the amount in the Capital Reserve Account to the Capital Reserve Account Requirement; and
sum required on the next Interest Payment Date to redeem Bonds with respect to whih the Trustee has given notice of
redemption. In connection therewith, approximately one month prior to each Interest Payment Date the Trustee shall estimate the amount of money which will be available for the redemption of Bonds on such Interest Payment Date and shall proceed to give notice of redemption with respect to Bonds in an aggregatc principal amount equal thereto.
Sixth: Into the Redemption Fund, an amount equal to the
Notwithstanding the foregoing, any amount in the Revenue Fund which would otherwise be required pursuant to the third
clause of this Section to be deposited into the Bond Fund for
the making of Mandatory Sinking Account Payments or pursuant tc
the fifth clause of this Section to be deposited into the
Redemption Fund for redeeming Bonds may be applied by the
Trustee, at any time prior to giving notice of redemption as
provided in Article IV hereto, to the purchase of Bonds in the same manner, at the same prices, and with the same effect as i: provided for in Sections 5.04 and 5.07 hereof.
SECTION 5.03. Application of Program Expense Fund. All amounts in the Program Expense Fund shall be used and withdrawr by the Trustee solely for the purpose of paying Qualified Program Expenses. Any amount in the Program Expense Fund in excess of the Program Expense Fund Requirement shall be transferred to the Revenue Fund.
SECTION 5.04. Application of Bond Fund. (A) All amountx in the Bond Fund shall be used and withdrawn by the Trustee solely for the purposes of (1) paying interest on the Bonds as
it shall become due and payable (including accrued interest on any Bonds purchased or redeemed prior to maturity pursuant to this Indenture), (2) paying the principal of the Serial Bonds when due and payable, (3) purchasing or redeeming or paying at maturity the Term Bonds as provided in this Section, and (4) redeeming Bonds in accordance with Section 4.01(A)(c).
(B) On each Mandatory Sinking Account Payment date, the Trustee shall apply the Mandatory Sinking Account Payment or
Payments required on that date to the redemption (or payment at
5071P/2062/06 -29-
maturity, as the case may be) of the applicable Term Bonds upon
the notice and in the manner provided in Article IV.
time prior to giving such notice of such redemption, the
Trustee may apply moneys in the Bond Fund, in an amount not in
excess of such respective Mandatory Sinking Account Payments, to the purchase of the applicable Term Bonds at public or
private sale, as and when and at such prices (including
brokerage and other charges) as the Trustee may in its
discretion determine, except that the purchase price (including
brokerage or other similar charges) shall not exceed the
Redemption Price that would be payable for such Bonds upon
redemption by application of such Mandatory Sinking Account
Payment.
At any
(C) Subject to the terms and conditions hereinbefore set forth in this Section and in Section 4.01(B), the Term Bonds
shall be redeemed (or paid at maturity, as the case may be) by
application of Mandatory Sinking Account Payments in the
amounts (after giving effect to the credits provided for in
this Section) and upon the dates hereinafter set forth:
Mandatory Sinking Account Payments for
Term Bonds Due on 1, 2005
Date Principal Amount
January 1, 1998 $ ,000 July 1, 1998 $ ,000
January 1, 1999 $ ,000 July 1, 1999 $ / 000 January 1, 2000 $ ,000 July 1, 2000 $ ,000 January 1, 2001 $ ,000 July 1, 2001 $ ,000 January 1, 2002 $ ,000 July 1, 2002 $ ,000 January 1, 2003 $ ,000 July 1, 2003 $ ,000 January 1, 2004 $ ,000
July 1, 2004 $ ,000
January 1, 2005 $ ,000 July 1, 2005 $ ,000
507 lP/2062/06 -30-
Mandatory Sinking Account Payments for
1, 2016 Term Bonds Due on
Date Initial Amount Date Initial Amoun
January 1, 2006 $ ,000 July 1, 2011 $ ,001 July 1, 2006 $ ,000 January 1, 2012 $ IO0 January 1, 2007 $ ,000 July 1, 2012 $ IO0 July 1, 2007 $ ,000 January 1, 2013 $ IO0 January 1, 2008 $ ,000 July 1, 2013 $ r 00 July 1, 2008 $ ,000 January 1, 2014 $ IO0 January 1, 2009 $ ,000 July 1, 2014 $ f 00 July 1, 2009 $ ,000 January 1, 2015 $ IO0 January 1, 2010 $ ,000 July 1, 2015 $ 100 July 1, 2010 $ ,000 January 1, 2016 $ 100 January 1, 2011 $ ,000 July 1, 2016 $ , 00
In any case in which Term Bonds are redeemed pursuant to Section 4.01(A)(a) or (b) or are purchased pursuant to Section
5.07, the principal or initial amount of such Bonds, as the case may be, shall be credited against remaining Mandatory
Sinking Account Payments (in integral multiples of $5,000) as
nearly as practicable in such a manner as will leave each
Mandatory Sinking Account Payment after such redemption in the same proportion to the total amount of Mandatory Sinking
Account Payments then remaining (after such credits) as the
proportion of each Mandatory Sinking Account Payment then remaining as originally herein provided for bore to the total amount of Mandatory Sinking Account Payments then remaining as originally scheduled (before any such credits). If, (1) durinc the six-month period immediately preceding a Mandatory Sinking Account Payment date the Trustee purchases Term Bonds with moneys in the Revenue Fund or the Bond Fund, or (2) during saic period and prior to giving said notice of redemption the Issue] otherwise deposits Term Bonds with the Trustee (together with i Request of the Issuer to apply such Bonds so deposited to a
Mandatory Sinking Account Payment due on said date), then the amount of Bonds so purchased or deposited or redeemed shall be credited at the time of such purchase or deposit, to the exten of the full principal or initial amount thereof, to reduce the applicable Mandatory Sinking Account Payment. purchased or deposited pursuant to this subsection shall be cancelled and delivered by the Trustee to or upon the Order of the Issuer.
All Bonds
SECTION 5.05. Deficiencies in the Bond Fund. In the event that the amount in the Bond Fund is insufficient to pay
principal of or interest on the Bonds or any Mandatory Sinking
Account Payment when due, the Trustee shall transfer to the
Bond Fund the amount of such deficiency by withdrawing said
amount from the following funds in the following order of
priority: (A) the Redemption Fund, (B) the Interest Reserve
Account, and (C) the Capital Reserve Account.
5071P/2062/06 -31-
SECTION 5.06. Application of Reserve Fund. (A) All amounts in the Interest Reserve Account shall be used and
withdrawn by the Trustee solely for the purpose of making up any deficiency in the Bond Fund in the manner and to the extent
set forth in Section 5.05. Any amount in the Interest Reserve
Account on July 1, 1986 shall be transferred to the Revenue
Fund.
(B) All amounts in the Capital Reserve Account shall be
used and withdrawn by the Trustee solely for the purposes of (1) making up any deficiency in the Bond Fund in the manner and
to the extent set forth in Section 5.05, and (2) redeeming
Bonds in accordance with Section 4.01(A)(c). Any amount in the Capital Reserve Account in excess of the Capital Reserve Account Requirement shall be transferred to the Revenue Fund as soon as practical, but not later than 30 days after the beginning of each Bond Year, commencing with the Bond Year beginning July 2, 1986
SECTION 5.07. Application of Redemption Fund. All amounts in the Redemption Fund shall be used and withdrawn by
the Trustee solely for the purposes of (A) making up any
deficiency in the Bond Fund in the manner and to the extent set
forth in Section 5.05; (B) transferring to the Capital Reserve
Account such amounts as may be required to increase the balance therein to the Capital Reserve Account Requirement established therefor; (C) reimbursing the Issuer, or paying, for Qualified
Program Expenses; (D) redeeming Bonds in accordance with
Section 4.01(A)(b) as specified in, and on the next practicable
date for which notice may be given in accordance with, Article
IV; and (E) redeeming Bonds in accordance with Section 4.01(A)(c).
At any time prior to giving notice of redemption as provided in Article IV hereof, the Trustee may apply amounts ir the Redemption Fund to the purchase of Bonds at public or private sale, as and when and at such prices (including
brokerage and similar charges, but excluding accrued interest,
which shall be payable from the Bond Fund) as the Trustee may
in its discretion determine, except that the purchase price (a:
determined hereinabove) may not exceed the par value of such Bonds. In the event that Bonds are to be purchased in part, the amount of Bonds to be purchased in each maturity shall be determined as nearly as practicable in such a manner as will leave Bonds Outstanding of each maturity after such purchases in the same proportion to the total amount of Bonds then Outstanding as the proportion of Bonds of each maturity as originally issued bore to the total amount of Bonds as originally issued.
SECTION 5.08. Investment of Moneys in Funds. All moneys in any of the funds and accounts established pursuant to this
5371P/2062/06 -32-
Indenture (other than moneys in the Program Fund in an amount not exceeding the sum specified in Section 3.03(C) for the
payment of Costs of Issuance) shall be invested by the Trustee in Investment Securities to maximize investment income, with proper regard for the preservation of principal provided,
however, that the Trustee shall invest funds in the Investment
Agreement if and to the extent so directed by the Issuer. All
Investment Securities shall be acquired subject to the
limitations set forth in Section 6.08, to the limitations as to
maturities hereinafter in this Section set forth and to such
additional limitations or requirements consistent with the
foregoing as may be established by Request of the Issuer.
Moneys in all funds and accounts established under this Indenture shall be invested in Investment Securities paying interest and maturing not later than the dates on which it is estimated that such moneys will be required by the Trustee.
Investment Securities acquired as an investment of moneys in any fund or account established under this Indenture shall
be credited to such fund or account provided, however, that in
order to maximize the return on investments, the Trustee may
transfer Investment Securities from one fund or account to any other fund or account. For the purpose of determining the
amount in any such fund or account, all Investment Securities credited to such fund or account shall be valued at par or, if purchased at less than par, at their cost, without accrued interest, plus discount accrued ratably over the period to the maturity date of such investments; however, the accrual of a discount with respect to any investment of the Capital Reserve Account shall not be taken into account in determining whether an excess exists in such Account for the purpose of determining whether amounts are to be withdrawn from such Account pursuant to this Indenture.
The Trustee may sell at the best price obtainable, or
present for redemption, any Investment Securities so purchased
whenever it shall be necessary in order to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such Investment Security is credited, and the Trustee shall not be liable or responsible for any loss resulting from such investment.
SECTION 5.09. Application of Estimated Excess Earnings Account and Excess Earnings Fund. (A) On or before August 1
of each year the Trustee shall determine the Excess Earnings
for the preceding Bond Year and shall transfer an amount equal thereto from the Estimated Excess Earnings Account to the Excess Earnings Fund. Any moneys still remaining in the
Estimated Excess Earnings Account subsequent to such transfer
shall be then transferred to the Revenue Fund. To the extent
that the amount transferred from the Estimated Excess Earnings
50?1P/2062/06 -33-
Account to the Excess Earnings Fund is less than the amount
required to be so transferred pursuant hereto, the Trustee
shall transfer the amount of such deficiency to the Excess
Earnings Fund from the Revenue Fund.
(B) All amounts in the Excess Earnings Fund shall be held by the Trustee free and clear of the lien of this Indenture, and the Trustee shall pay said amounts over to the United States from time to time as the Trustee shall determine
provided that the Trustee shall so pay over to the United
States: (1) not less frequently than once each five (5) years
after the date of issuance of the Bonds, an amount equal to
ninety percent (90%) of the aggregate amount of Excess Earnings
earned during such period (and not theretofore paid to the
United States), and (2) not later than thirty (30) days after the redemption of the last Bond, one hundred percent (100%) of
the aggregate amount of Excess Earnings not theretofore paid to
the United States.
ARTICLE VI
PARTICULAR COVENANTS
SECTION 6.01. Punctual Payment. The Issuer shall punctually pay or cause to be paid the principal or Redemption Price and interest to become due in respect of all the Bonds, in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, and shall punctually pay or cause to be paid all Mandatory Sinking Account Payments, but only out of Revenues and other assets pledged for such payment as provided in this Indenture.
SECTION 6.02. Extension of Payment of Bonds. The Issuer
shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any of the claims for interest by the purchase or funding of such Bonds or claims for interest or by any other arrangement, and in case the maturity of any of the Bonds or the time of payment of any such claims for interest shall be extended, such Bonds or claims for interest shall not be entitled, in case of any default hereunder, to the benefits of
this Indenture, except subject to the prior payment in full of
the principal of all of the Bonds then Outstanding and of all
claims for interest thereon which shall not have been so
extended. Nothing in this Section shall be deemed to limit the
right of the Issuer to issue bonds for the purpose of refundin<
any Outstanding Bonds, and such issuance shall not be deemed tc
constitute an extension of maturity of the Bonds.
SECTION 6.03. Against Encumbrances. The Issuer shall no1 create, or permit the creation of, any pledge, lien, charge or
5071P/2062/06 -34-
X2
other encumbrance upon the Revenues or other assets pledged or
assigned under this Indenture while any of the Bonds are
Outstanding, except the pledge and assignment created by this
Indenture. Subject to this limitation, the Issuer expressly
reserves the right to enter into one or more other indentures
for any of its corporate purposes, including other programs
under the Act, and reserves the right to issue other
obligations for such purposes.
SECTION 6.04. Power to Issue Bonds and Make Pledge and
Assignment. The Issuer is duly authorized pursuant to law to issue the Bonds and to enter into this Indenture and to pledge
and assign the Revenues and other assets purported to be pledged and assigned, respectively, under this Indenture in the manner and to the extent provided in this Indenture. The Bonds and the provisions of this Indenture are and will be legal,
valid and binding limited obligations of the Issuer in accordance with their terms, and the Issuer and Trustee shall
at all times, to the extent permitted by law, defend, preserve
and protect said pledge and assignment of Revenues and other
assets and all the rights of the Owners under this Indenture
against all claims and demands of all Persons whatsoever.
SECTION 6.05. Payment of Taxes and Claims. The Issuer or
the Trustee shall, from time to time, duly pay and discharge,
or cause to be paid and discharged, any property taxes,
assessments or other governmental charges that may be lawfully
imposed upon the Revenues or other assets pledged or assigned under this Indenture, when the same shall become due, as well
as any lawful claim which, if unpaid, might by law become a lien or charge upon the Revenues or such other assets or which might impair the security of the Bonds.
SECTION 6.06. Accounting Records and Financial State-
ments. The Issuer shall at all times keep, or cause to be
kept, proper books of record and account in which complete and
accurate entries shall be made of all transactions relating to
the proceeds of Bonds, the Revenues, the Loans and all funds and accounts established pursuant to this Indenture. Such books of record and account shall be available for inspection by the Trustee or the Issuer, as the case may be, and, with respect to such books of record and account maintained by the Trustee, by any Owner or agent or representative thereof duly authorized in writing, at reasonable hours and under reasonable
circumstances.
The Issuer shall file with the Trustee, or cause the
Trustee to place on file and furnish to the Issuer at the
expense of the Issuer, and furnish to each Owner who shall have
filed his name and address with the Issuer or the Trustee for
such purpose, within 120 days after the close of each Fiscal
Year so long as any of the Bonds are Outstanding (commencing
5071P/2062/06 -35-
with the Fiscal Year ending June 30, 1984), complete financial
statements with respect to the Program, prepared in accordance
with generally accepted accounting principles to the extent
' practicable, covering receipts, disbursements, allocation and application of all income (including Revenues) for such Fiscal Year, including a statement of revenue, expenditures and fund
balance (covering all of the funds and accounts established
pursuant to this Indenture), balance sheet and statement of
changes in financial position.
SECTION 6.07. Maintenance of Powers. As long as any of
the Bonds is Outstanding, the Issuer shall preserve its
existence as a legal subdivision and body corporate and politic
of the State of California, and will not be dissolved or lose
its right to exist as such or lose any rights necessary to
enable it to function and to maintain the Revenues. The Issue1
shall at all times use its best efforts to maintain the powers, functions, duties and obligations now reposed in it pursuant tc
law, and will not at any time voluntarily do, suffer or permit
any act or thing the effect of which would be to hinder, delay
or imperil either the payment of the indebtedness evidenced by
any of the Bonds or the observance of any of the covenants herein contained.
SECTION 6.08. Tax Covenants. (A) The Issuer shall not use or permit the use of any proceeds of Bonds or any other funds of the Issuer, directly or indirectly, to acquire any securities or obligations, and shall not use or permit the use of any amounts received by the Issuer or Trustee with respect to the Loans in any manner, and shall not take or permit to be taken any other action or actions, which would cause any Bond to be an "arbitrage bond" within the meaning of Section 103(c)
of the Code or which would fail to comply with the requirements
of Section 103A(i) of the Code. The Issuer shall require that
any Person (or any "related Person" as defined in Section 103(b)(6)(C) of the Code) from whom it may acquire Loans shall not, pursuant to an arrangement, formal or informal, purchase Bonds in an amount related to the amount of Loans to be purchased from such Person.
(B) The Issuer shall not use or permit the use of any proceeds of Bonds or any other funds of the Issuer, directly ox
indirectly, in any manner, and shall not take or permit to be
taken any other action or actions, which would result in any of
the Bonds being treated as an obligation not described in
Section 103(a) of the Code by reason of classification of such
Bond as an "industrial development bond" within the meaning of
Section 103(b) of the Code.
(C) The Issuer shall in good faith attempt to meet all the requirements of Section 103A(d), (e), (f) and (j) of the Code before the purchase of each Loan. The Issuer shall establish
507 lP/2062/06 -36-
reasonable procedures to insure compliance with such
requirements which shall include reasonable investigations by
the Lending Institutions to determine that the Loans satisfy such requirements. The Issuer shall require that a Loan may be
assumed only if it has been determined that the conditions of
Treasury Regulations Section 6a.103A-2(j)(3) are satisfied.
Any failure of a Loan, the Residence financed thereby or the
Mortgagors with respect thereto to meet such requirements shall
be corrected within a reasonable period after such failure is
discovered. The Issuer shall in good faith attempt to meet the
requirements of Section 103A(i) of the Code, and the Issuer and
the Trustee shall at all times do and perform all acts and
things permitted by law and the Indenture which are necessary
or desirable in order to assure that interest paid on the Bonds
shall be exempt from federal income taxes.
(D) The Issuer and the Trustee reserve the right, however,
to purchase any Investment Security permitted by the laws of
the State of California if, when and to the extent that the Code shall be repealed, amended or interpreted to permit the same or shall be held void by final judgment of a court of competent jurisdiction so as to permit the Issuer or the
Trustee to do so, but only if such investment made by virtue of such repeal, amendment, interpretation or decision would not, in the opinion of counsel of recognized competence in such matters, result in making the interest on the Bonds subject to federal income taxation.
(E) It is the intention of the Issuer that the Mortgagors be indebted by reason of their respective Loans only to the extent that the payment of said indebtedness is required to provide for the payment of the principal or Redemption Price of
and interest on the Bonds and the payment to the Issuer of such
amount as is consistent with the provisions of Section
103(A)(i) of the Code. Accordingly, upon the redemption of the last Outstanding Bond, and after paying to the Issuer an amount equal to the future value (calculated on the basis of semiannual compounding at an interest rate equal to the Yield on the Bonds plus one hundred twelve and one-half (112-1/2) basis points) of $ , the Trustee shall forgive any and all indebtedness of principal and interest, due and payable
subsequent to such redemption, on the Loans which are then held
by the Trustee for the benefit of the Program. The Trustee is
hereby authorized and directed to execute any and all documents
necessary to effect such discharge of indebtedness.
(F) Beginning in the first Bond Year after one year from
the date of issuance of the Bonds, at no time during any Bond
Year may the aggregate amount invested, at a yield materially
higher than the Yield on the Bonds (other than moneys invested
in the Mortgage Loans) exceed an amount equal to 150 percent of the debt service on the Bonds for the current Bond Year.
50 7 1P/2 0 62/06 -37-
SECTION 6.09. Compliance with Indenture, Contracts, Laws
and Regulations.
observe and perform all the covenants, conditions and
requirements of this Indenture, shall not issue any Bonds in
any manner other than in accordance with this Indenture, and
shall not suffer or permit any default to occur hereunder, or do or permit to be done anything that might in any way weaken, diminish or impair the security intended to be given pursuant
to this Indenture. Subject to the limitations and consistent
with the covenants, conditions and requirements contained in
this Indenture, the Issuer and the Trustee shall comply with
the terms, covenants and provisions, express or implied, of all contracts concerning or affecting the application of proceeds
of Bonds, Loans or Revenues. The Issuer and the Trustee shall
comply promptly, fully and faithfully with and abide by any
statute, law, ordinance, order, rule or regulation, judgment,
decree, direction or requirement now in force or hereafter
enacted, adopted, prescribed, imposed or entered by any
competent governmental authority or agency applicable to or affecting the Program or the Loans.
The Issuer and the Trustee shall faithfully
SECTION 6.10. Program Covenants. (A) The Issuer and the Trustee shall from time to time, with all practical dispatch and in a sound and economical manner consistent in all respects
with the Act, the Program, this Indenture, all other applicable
laws and regulations and with sound banking practices and principles, use and apply the amounts held in the Program Fund to purchase Loans, and shall do all such acts and things
necessary to produce Revenues sufficient to pay when due the
principal of and interest on the Bonds, and shall take all
steps, actions and proceedings reasonably necessary in the
judgment of the Issuer to enforce the terms, covenants and
conditions of the Loans, the Agreements and the Developer
Agreements and to maintain and enforce all policies of insurance or guarantees required to be maintained on or with respect to any one or more Loans.
The Issuer shall supervise, or cause the Administrator to supervise, the Lending Institutions, and shall otherwise assure the continuous, competent and adequate servicing of each Loan.
In the event any Agreement shall be cancelled or terminated for
any reason, the Trustee shall take all steps necessary to
procure an appropriate successor Administrator and/or Lending Institution, as the case may be, subject to the provisions of
the Agreement, and, during the period necessary to obtain such
successors, shall perform or cause to be performed the duties
and responsibilities of the Administrator and/or Lending
Institution, under the Agreement cancelled or terminated and
shall be compensated therefor, in addition to the compensation
payable to it under this Indenture or any other instrument, in
the same manner and amounts as provided under the Agreement
cancelled or terminated.
5071P/2062/06 -38-
(B) Subject to Section 6.08, amounts in the Program Fund
, compliance with the Act, the Program and the requirements set
shall be used to purchase only Loans which (1) are in
forth in subsection (B) of Section 3.03, and (2) in the
aggregate have scheduled payments of principal and interest at
least sufficient, together with other expected Revenues, to pay when due the principal of and interest on the Bonds.
(C) The Trustee shall maintain, or cause to be maintained, with respect to each Loan, the insurance required by the Agreement and, in addition, the Trustee shall maintain with respect to all Loans a special hazard insurance policy or policies, in such form as may be acceptable to the Trustee, insuring against losses arising from physical damage or destruction of any real property subject to any Loan caused by mud flows or arising from the application of coinsurance clauses in the applicable standard hazard insurance policies, issued by an insurance company qualified to do business in the State of California, with loss payable clauses or endorsement
in favor of the Trustee and with maximum loss limits of not
less than the greater of one percent (1%) of the aggregate
principal balance of all Loans or twice the original principal
amount of the largest Loan purchased (less claims made and paid).
(D) No Loan shall be sold, assigned or otherwise disposed
of by the Issuer or the Trustee, except (1) pursuant to a
covenant to repurchase contained in the appropriate Developer
Agreement or Agreement or (2) in connection with any action or
proceedings taken in the event of default on any Loan.
to the provisions of this subsection, any Loan may be sold,
assigned or otherwise disposed of, and such Loan shall be released from the assignment made by this Indenture and the Issuer and the Trustee shall take all necessary action and
execute and deliver all necessary instruments to confirm any such sale, assignment or disposition and to vest title to the
Loan in the purchaser, assignee or other recipient thereof.
Subject
(E) The Issuer and the Trustee shall not consent to the
modification of, or modify, the rate or rates of interest, or the amount or time of payment of any installment of interest ox principal, or the security for or any of the terms or provisions of any Loan or any insurance on or with respect thereto in any manner which would result in the failure of suck: Loan to satisfy the conditions set forth in subsection (B) of this Section or which would materially impair the security of
the Bonds.
(F) Lending Institutions may only be Persons qualified to
sell mortgages to FHLMC or FNMA.
5 07 1P/2 062/06 -39-
SECTION 6.11. Waiver of Laws. The Issuer shall not at
any time insist upon or plead in any manner whatsoever, or
claim or take the benefit or advantage of, any stay or
extension provision of law now or at any time hereafter in
force that may affect the covenants and agreements contained in
this Indenture or in the Bonds, and all benefit or advantage of
any such law or laws is hereby expressly waived by the Issuer
to the extent permitted by law.
SECTION 6.12. Further Assurances. The Issuer will make, execute and deliver any and all such further indentures, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the
performance of this Indenture and for the better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Indenture.
ARTICLE VI1
EVENTS OF DEFAULT AND REMEDIES OF OWNERS
SECTION 7.01. Events of Default. The following events
(A) default in the due and punctual payment of the
shall be Events of Default:
principal or Redemption Price of any Bond when and as the
same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by declaration or otherwise, or default in the redemption from
any Mandatory Sinking Account Payment of any Term Bonds in the amounts and at the times provided therefor;
installment of interest on any Bond when and as such
interest installment shall become due and payable;
(C) default by the Issuer in the observance of any of
the covenants, agreements or conditions on its part in this Indenture or in the Bonds contained, if such default shall have continued for a period of sixty (60) days after written notice thereof, specifying such default and
requiring the same to be remedied, shall have been given to
the Issuer by the Trustee, or to the Issuer and the Trustee by the Owners of not less than twenty-five percent (25%) in
aggregate principal amount of the Bonds at the time
Outstanding; or
(B) default in the due and punctual payment of any
(D) the assumption, under the provisions of any law
relating to bankruptcy or insolvency or any similar law
relating to creditors rights, by any court of competent
jurisdiction, of custody or control of the Issuer or of the
5071P/2062/06 -40-
.i
whole or any substantial part of its property, if such
custody or control is not terminated or stayed within sixty
(60) days from the date of assumption of such custody or
control.
SECTION 7.02. Acceleration of Maturities. If an Event of
Default shall occur, then, and in each and every such case
during the continuance of such Event of Default, the Trustee ox
the Owners of not less than a majority in aggregate principal
amount of the Bonds at the time Outstanding shall be entitled, upon notice in writing to the Issuer, to declare the principal
of all the Bonds then Outstanding and the interest accrued
thereon to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due
and payable, anything in this Indenture or in the Bonds
contained to the contrary notwithstanding.
Any such declaration, however, is subject to the condition
that if, at any time after such declaration and before any
judgment or decree for the payment of the moneys due shall haw
been obtained or entered, the Issuer shall deposit with the
Trustee a sum sufficient to pay all the principal or Redemptior
Price of and installments of interest on the Bonds payment of
which is overdue, with interest on such overdue principal at
the rate borne by the respective Bonds, and the reasonable
charges and expenses of the Trustee, and any and all other defaults known to the Trustee (other than in the payment of
principal of and interest on the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed b] the Trustee to be adequate shall have been made therefor, then, and in every such case, the Owners of not less than a majority
in aggregate principal amount of the Bonds then Outstanding, b] written notice to the Issuer and to the Trustee, may, on behalj
of the Owners of all of the Bonds, rescind and annul such
declaration and its consequences and waive such default; but nc
such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right 01
power consequent thereon.
SECTION 7.03. Application of Revenues and Other Funds After Default. If an Event of Default shall occur and be continuing, all Revenues and any other funds then held or thereafter received by the Trustee under any of the provisions of this Indenture (subject to Section 11-10) shall be applied by the Trustee as follows and in the following order:
(A) To the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the
Owners of the Bonds and payment of reasonable charges and
expenses of the Trustee (including reasonable fees and disbursements of its counsel, and premiums for the special
5071P/2062/06 -41-
hazard insurance policy or policies required by Section
6.10(C)) incurred in and about the performance of its powers and duties under this Indenture;
Mandatory Sinking Account Payments, or Redemption Price of
and interest then due on the Bonds (upon presentation of the Bonds to be paid, and stamping thereon of the payment if only partially paid, or and surrender thereof if fully paid) subject to the provisions of this Indenture (including Section 7-02), as follows:
have become or have been declared due and payable,
(B) To the payment of the principal, scheduled
(1) Unless the principal of all of the Bonds shall
First: To the payment to the Persons entitled
thereto of all installments of interest then due in
the order of the maturity of such installments, and,
if the amount available shall not be sufficient to pay
in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the Persons
entitled thereto, without any discrimination or ,
preference; and
Second: To the payment to the Persons entitled
thereto of the unpaid principal, scheduled Mandatory Sinking Account Payments, or Redemption Price of any Bonds which shall have become due, whether at maturitj or by call for redemption, in the order of their due dates, with interest on the overdue principal at the
rate borne by the respective Bonds, and, if the amount
available shall not be sufficient to pay in full all
the Bonds due on any date, together with such
interest, then to the payment thereof ratably, according to the amounts of principal, Mandatory Sinking Account Payments or Redemption Price due on such date to the Persons entitled thereto, without an1 discrimination or preference.
(2) If the principal of all of the Bonds shall have
become or have been declared due and payable, to the payment of the principal and interest then due and unpaid upon the Bonds, with interest on the overdue principal at the rate borne by the respective Bonds, and, if the amount
available shall not be sufficient to pay in full the whole
amount so due and unpaid, then to the payment thereof
ratably, without preference or priority of principal over interest, or of interest over principal, or of any
installment of interest over any other installment of
interest, or of any Bond over any other Bond, according to the amounts due respectively for principal and interest, tc the Persons entitled thereto without any discrimination or
preference.
5071P/2062/06 -42-
SECTION 7.04. Trustee to Represent Owners. The Trustee is hereby irrevocably appointed (and the successive respective
Owners of the Bonds, by taking and holding the same, shall be
conclusively deemed to have so appointed the Trustee) as
trustee and true and lawful attorney-in-fact of the Owners of
the Bonds for the purpose of exercising and prosecuting on
their behalf such rights and remedies as may be available to
such Owners under the provisions of the Bonds and this
Indenture, as well as under the Act and applicable provisions
of any other law. Upon the occurrence and continuance of any
Event of Default or other occasion giving rise to a right in
the Trustee to represent the Owners, the Trustee in its
discretion may, and upon the written request of the Owners of
not less than twenty-five percent (25%) in aggregate principal
amount of the Bonds then Outstanding, and upon being
indemnified to its satisfaction therefor, shall, proceed to
protect or enforce its rights or the rights of such Owners by
such appropriate suit, action, mandamus or other proceedings as
it shall deem most effectual to protect and enforce any such
right, at law or in equity, either for the specific performance
of any covenant or agreement contained herein, or in aid of the
execution of any power herein granted, or for the enforcement
of any other appropriate legal or equitable right or remedy
vested in the Trustee or in such Owners under this Indenture,
the Act or any other law; and upon instituting such proceeding,
the Trustee shall be entitled, as a matter of right to the
appointment of a receiver of the Revenues and other assets pledged under this Indenture, pending such proceedings. All rights of action under this Indenture or the Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in ani proceedings relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in the
name of the Trustee for the benefit and protection of all the
Owners of such Bonds, subject to the provisions of this Indenture.
SECTION 7.05. Owners' Direction of Proceedings. Anythinc in this Indenture to the contrary notwithstanding, the Owners of a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, to direct the method of conducting all remedial proceedings taken by the Trustee hereunder, provided that such
direction shall not be otherwise than in accordance with law and the provisions of this Indenture, and that the Trustee
shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Owners not parties to such direction.
SECTION 7.06. Limitation on Owners' Right to Sue. No
Owner of any Bond shall have the right to institute any suit,
5071P/2062/06 -43-
action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under this Indenture, the Act or any other applicable law with respect to such Bond,
unless (A) such Owner shall have given to the Trustee written
notice of the occurrence of an Event of Default; (B) the Owners
of not less than twenty-five percent (25%) in aggregate
principal amount of the Bonds then Outstanding shall have made
written request upon the Trustee to exercise the powers
hereinbefore granted or to institute such suit, action or
proceeding in its own name; (C) such Owner or said Owners shall
have tendered to the Trustee reasonable indemnity against the
costs, expenses and liabilities to be incurred in compliance
with such request; and (D) the Trustee shall have refused or
omitted to comply with such request for a period of sixty (60)
days after such written request shall have been received by,
and said tender of indemnity shall have been made to, the
Trustee.
Such notification, request, tender of indemnity and refusal
or omission are hereby declared, in every case, to be
conditions precedent to the exercise by any Owner of Bonds of
any remedy hereunder or under law; it being understood and
intended that no one or more Owners of Bonds shall have any
right in any manner whatever by his or their action to affect,
disturb or prejudice the security of this Indenture on the
rights of any other Owners of Bonds, or to enforce any right under this Indenture, the Act or other applicable law with
respect to the Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Owners of the Outstanding Bonds, subject to the provisions of
this Indenture.
SECTION 7.07. Absolute Obligation of Issuer. Nothing in
Section 7.06 or in any other provision of this Indenture, or in
the Bonds, contained shall affect or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal or Redemption Price of and interest on the Bonds to the respective Owners of the Bonds at their respective dates of maturity, or upon call for redemption, as herein provided, but only out of the Revenues and other assets herein pledged therefor, or affect or impair the right of such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the Bonds.
SECTION 7.08. Termination of Proceedings. In case any
proceedings taken by the Trustee or any one or more Owners on
account of any Event of Default shall have been discontinued or
abandoned for any reason or shall have been determined
adversely to the Trustee or the Owners, then in every such case the Issuer, the Trustee and the Owners, subject to any
5 07 1P/2 062/06 -44-
determination in such proceedings, shall be restored to their
former positions and rights hereunder, severally and respectively, and all rights, remedies, powers and duties of
the Issuer, the Trustee and the Owners shall continue as though
no such proceedings had been taken.
SECTION 7.09. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Owners of the Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or otherwise.
SECTION 7.10. No Waiver of Default. No delay or omission
of the Trustee or of any Owner of the Bonds to exercise any right or power arising upon the occurrence of any Event of Default shall impair any such right or power or shall be
construed to be a waiver of any such default or an acquiesence
therein; and every power and remedy given by this Indenture to the Trustee or to the Owners of the Bonds may be exercised from time to time and as often as may be deemed expedient.
ARTICLE VI11
THE TRUSTEE
SECTION 8.01. Duties, Immunities and Liabilities of
Trustee. (A) The Trustee shall, prior to an Event of Default,
and after the curing of all Events of Default which may havs
occurred, perform such duties and only such duties as are
specifically set forth in this Indenture. The Trustee shall,
during the existence of any Event of Default (which has not been cured), exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use undei the circumstances in the conduct of his own affairs.
(B) The Issuer may remove the Trustee at any time unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee if at any time requested to do SO
by an instrument or concurrent instruments in writing signed b!
the Owners of not less than a majority in aggregate principal
amount of the Bonds then Outstanding (or their attorneys duly
authorized in writing) or if at any time the Trustee shall
cease to be eligible in accordance with subsection (E) of this
Section, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shal take control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; in each case by giving written notice of such
5 07 1P/2 O62/06 -45-
removal to the Trustee and the Lending Institutions, and
thereupon shall appoint a successor Trustee by an instrument in writing.
(C) The Trustee may at any time resign by giving written notice of such resignation to the Issuer and by giving the
Owners notice of such resignation by publication at least once
in a Financial Newspaper or Journal. Upon receiving such
notice of resignation, the Issuer shall promptly appoint a
successor Trustee by an instrument in writing.
(D) Any removal or resignation of the Trustee and
appointment of a successor Trustee shall become effective upon
acceptance of appointment by the successor Trustee. Promptly
upon such acceptance, the Issuer shall give notice thereof to the Owners by publication at least once in a Financial Newspaper or Journal and to the Lending Institutions in writing. If no successor Trustee shall have been appointed and
have accepted appointment within forty-five (45) days of givinG
notice of removal or notice of resignation as aforesaid, the
resigning Trustee or any Owner (on behalf of himself and all
other Owners) may petition any court of competent jurisdiction
for the appointment of a successor Trustee, and such court may
thereupon, after such notice (if any) as it may deem proper,
appoint such successor Trustee. Any successor Trustee appointed under this Indenture shall signify its acceptance of such appointment by executing and delivering to the Issuer and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deec or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as id
originally named Trustee herein; but, nevertheless at the
request of the Issuer or the request of the successor Trustee,
such predecessor Trustee shall execute and deliver any and all
instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully a.nd certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Trustee, the Issuer shall execute and deliver any and all
instruments as may be reasonably required for more fully arid
certainly vesting in and confirming to such successor Trustee
all such moneys, estates, properties, rights, powers, trusts,
duties and obligations.
(E) Any Trustee appointed under the provisions of this
Section in succession to the Trustee shall be (i) a trust company or bank having the powers of a trust company doing
5071P/2062/06 -46-
business and having a corporate trust office in Los Angeles,,
California, having a combined capital and surplus of at least
one hundred million dollars ($100,000,000), and subject to
supervision or examination by federal or state authority and
(ii) a seller/service of mortgage loans approved by FNMA or
FHLMC which meets all requirements of applicable laws so as to
be eligible to originate, purchase, hold and service
conventional mortgages (or shall have a wholly-owned mortgage
banking subsidiary which meets said criteria). If such ban'k or
trust company publishes a report of condition at least
annually, pursuant to law or to the requirements of any
the purpose of this Section the combined capital and surplus of such bank or trust company 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
subsection (E), the Trustee shall resign immediately in the
manner and with the effect specified in this Section.
- supervising or examining authority above referred to, then for
(F) Any company into which the Trustee may be merged or
converted or with which it may be consolidated or any company
resulting from any merger, conversion or consolidation to whicl
it shall be a party or any company to which the Trustee may
sell or transfer all or substantially all of its corporate
trust business, provided such company shall be eligible under subsection (E) of this Section, shall be the successor to such Trustee without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.
SECTION 8.02. Compensation. Subject to the terms of any
contract with the Trustee, the Issuer shall pay to the Trustee
from time to time reasonable compensation for all services
rendered under this Indenture, and also all reasonable
expenses, charges, fees of counsel, accountants and consultant
and other disbursements, including those of their attorneys,
agents and employees, incurred in good faith in and about the
performance of their powers and duties under this Indenture. The Issuer further agrees, to the extent permitted by law, to indemnify and save the Trustee harmless against any liabilitie
which it may incur in the exercise and performance of its powers, functions and duties under this Indenture, which are not due to its own negligence or default.
SECTION 8.03. Liability of Trustee. The recitals of
facts herein and in the Bonds contained shall be taken as
statements of the Issuer, and the Trustee assumes no responsibility for the correctness of the same, and makes no
representations as to the validity or sufficiency of this
Indenture or of the Bonds, and shall incur no responsibility j respect thereof, other than in connection with the duties or
obligations herein or in the Bonds assigned to or imposed upor
507 1P/2062/06 -47-
it. The Trustee shall, however, be responsible for its
representations contained in its certificate of authentication
on the Bonds. The Trustee shall not be liable in connectioln
with the performance of its duties hereunder except for its om
negligence or default. Bonds with the same rights it would have if it were not
appointed to its respective position hereunder, extent permitted by law, may act as depositary for and permit any of its officers or directors to act as a member of, or in
any other capacity with respect to, any committee formed to protect the rights of Owners, whether or not such committee shall represent the Owners of a majority in principal amount ol the Bonds then Outstanding.
SECTION 8.04. Right of Trustee to Rely on Documents. Thc
The Trustee may become the owner of
and, to the
Trustee shall be protected in acting upon any notice,
resolution, Request, consent, Order, Certificate, report,
opinion, 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. The Trustee may consult with counsel, who may be counsel of or to the Issuer, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith.
The Trustee shall not be bound to recognize any Person as the Owner of a Bond unless and until such Bond is submitted fo
inspection, if required, and his title thereto satisfactorily established, if disputed.
Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to
taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and
established by a Certificate of the Issuer, and such Certificate shall be full warrant to the Trustee for any actic
taken or suffered in good faith under the provisions of this
Indenture in reliance upon such Certificate, but in its discretion the Trustee may, in lieu thereof, accept other
evidence of such matter or may require such additional as to < may seem reasonable.
Preservation and Inspection of Documents. All documents received by the Trustee under the provisiona of this Indenture shall be retained in its possession and shall subject at all reasonable times to the inspection of the Xssu and any Owner, and their agents and representatives duly authorized in writing, at reasonable hours and under reasonab conditions.
SECTION 8.05.
507 1P/2 062/06 -48-
ARTICLE IX
MODIFICATION OR AMENDMENT OF THE INDENTURE
SECTION 9.01. Amendments Permitted. (A) This Indenture and the rights and obligations of the Issuer and of the Owners
of the Bonds and of the Trustee may be modified or amended iat
any time by a Supplemental Indenture which shall become
effective when the written consents of the Owners of sixty
percent (60%) in aggregate principal amount of the Bonds then Outstanding shall have been filed with the Trustee; provided that if such modification or amendment will, by its terms, not take effect so long as any Bonds of any particular maturity remain Outstanding, the consent of the Owners of such Bonds shall not be required and such Bonds shall not be deemed to be
Outstanding for the purpose of any calculation of Outstanding Bonds under this Section. shall (1) extend the fixed maturity of any Bond, or reduce the
amount of principal thereof, or extend the time of payment or reduce the amount of any Mandatory Sinking Account Payment provided in the Indenture for the payment of any Bond, or
reduce the rate of interest thereon, or extend the time of payment of interest thereon, or reduce any premium payable up01 the redemption thereof, without the consent of the Owner of each Bond so affected, or (2) reduce the aforesaid percentage
of Bonds the consent of the Owners of which is required to
effect any such modification or amendment, or permit the
creation of any lien on the Revenues and other assets pledged
under this Indenture prior to or on a parity with the lien
created by this Indenture, or deprive the Owners of the Bonds
of the lien created by this Indenture upon such Revenues and
other assets (except as expressly provided in this Indenture), without the consent of the Owners of all of the Bonds then Out st anding.
(B) This Indenture and the rights and obligations of the Issuer and of the Owners of the Bonds may also be modified or amended at any time by a Supplemental Indenture, which shall become effective upon execution (or such later date as may be
specified in such Supplemental Indenture), without the consent of any Owners, but only to the extent permitted by law and on1 for any one or more of the following purposes:
No such modification or amendment
(1) to add to the covenants and agreements of the Issuer in this Indenture contained other covenants and
agreements thereafter to be observed, to pledge or assign
additional security for the Bonds, or to surrender any right or power herein reserved to or conferred upon the Issuer, provided, that no such covenant, agreement, pledgf assignment or surrender shall materially adversely affect
the interests of the Owners of the Bonds;
507 lP/2062/06 -49-
(2) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or
correcting any defective provision, contained in this
Indenture, or in regard to matters or questions arising
under this Indenture, as the Issuer may deem necessary or
desirable and not inconsistent with this Indenture, and
which shall not materially adversely affect the interests
of the Owners of the Bonds; or
(3) to modify, amend or supplement this Indenture in
such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar
federal statute hereafter in effect, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute, and which shall not materially adversely affect the interests of the Owners of
the Bonds.
SECTION 9.02. Effect of Supplemental Indenture. From and
after the time any Supplemental Indenture becomes effective
pursuant to this Article, this Indenture shall be deemed to be
modified and amended in accordance therewith, and the
respective rights, duties and obligations under this Indenture
of the Issuer, the Trustee and all Owners of Bonds Outstanding
shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
SECTION 9.03. Endorsement of Bonds; Preparation of New
Bonds. Bonds delivered after any Supplemental Indenture becomes effective pursuant to this Article may, and if the
Trustee so determines shall, bear a notation by endorsement or
otherwise in form approved by the Issuer and the Trustee as to
any modification or amendment provided for in such Supplementa
Indenture, and, in that case, upon demand of the Owner of any
Bond Outstanding at such effective date and presentation of hi
Bond for the purpose at the principal corporate trust office c the Trustee or at such additional offices as the Trustee may select and designate for that purpose, a suitable notation shall be made on such Bond. If the Issuer or the Trustee shal
so determine, new Bonds so modified as to conform, in the
opinion of the Issuer and the Trustee, to any modification or amendment contained in such Supplemental Indenture, shall be
prepared and executed by the Issuer and authenticated by the
Trustee, and upon demand of the Owners of any Bonds then
Outstanding shall be exchanged at the principal corporate trui
office of the Trustee, without cost to any Owner, for Bonds
then Outstanding, upon surrender for cancellation of such Boni
in equal aggregate principal amounts of the same maturity.
507 1P/2062/06 -50-
SECTION 9.04. Amendment of Particular Bonds. The
provisions of this Article shall not prevent any Owner from
accepting any amendment as to the particular Bonds held by him,
provided that due notation thereof is made on such Bonds.
ARTICLE X
DEFEASANCE
SECTION 10.01. Discharge of Indenture. If the Issuer
shall pay and discharge the entire indebtedness on all Bonds
Outstanding in any one or more of the following ways -0
(a) by paying or causing to be paid the principal or Redemption Price of and interest on Bonds Outstanding, as and when the same become due and payable;
(b) by depositing with the Trustee, in trust, at or before maturity, money or securities in the necessary amount (as provided in Section 10.03) to pay or redeem Bonds Outstanding; or
(c) by delivering to the Trustee, for cancellation b
it, Bonds Outstanding;
and if the Issuer shall also pay or cause to be paid all other sums payable hereunder by the Issuer, then and in that case, a
the election of the Issuer (evidenced by a Certificate of the
Issuer, filed with the Trustee, signifying the intention of tk
Issuer to discharge all such indebtedness and this Indenture),
and notwithstanding that any Bonds shall not have been
surrendered for payment, this Indenture and the pledge of Revenues and other assets made under this Indenture and all covenants, agreements and other obligations of the Issuer unde this Indenture shall cease, terminate, become void and be completely discharged and satisfied. In such event, upon
Request of the Issuer, the Trustee shall cause an accounting
for such period or periods as shall be requested by the Issue]
to be prepared and filed with the Issuer and shall execute anc deliver to the Issuer all such instruments as may be necessar!
or desirable to evidence such discharge and satisfaction, and
the Trustee shall pay over, transfer, assign or deliver to thc
Issuer all moneys or securities or other property held by it
pursuant to this Indenture which are not required for the payment of redemption of Bonds not theretofore surrendered fo such payment or redemption. The discharge of the obligations of the Issuer under this Indenture shall be without prejudice to the rights of the Trustee to charge for and be reimbursed the Issuer for any expenditures which it may thereafter incur in connection herewith.
5071P/2062/06 -51-
SECTION 10.02. Discharge of Liability on Bonds. Upon the deposit with the Trustee, in trust, at or before maturity, of money or securities in the necessary amount (as provided in Section 10.03) to pay or redeem any Outstanding Bond (whether upon or prior to its maturity or the redemption date of such Bond), provided that, if such Bond is to be redeemed prior to
maturity, notice of such redemption shall have been given as i
Article IV provided or provision satisfactory to the Trustee
shall have been made for the giving of such notice, then all
liability of the Issuer in respect of such Bond shall cease,
terminate and be completely discharged, and the Owner thereof
shall thereafter be entitled only to payment out of such money
or securities deposited with the Trustee as aforesaid for thei payment, subject, however, to the provisions of Section 10.04.
The Issuer may at any time surrender to the Trustee for cancellation by it any Bonds previously issued and delivered which the Issuer may have acquired in any manner whatsoever,
and such Bonds, upon such surrender and cancellation, shall bc deemed to be paid and retired.
SECTION 10.03. Deposit of Money or Securities with
Trustee. Whenever in this Indenture it is provided or
permitted that there be deposited with or held in trust by thc Trustee money or securities in the necessary amount to pay or
redeem any Bonds, the money or securities so to be deposited c held shall be --
(a) lawful money of the United States of America in an amount equal to the principal and/or amount of such Bonds and all unpaid interest thereon to maturity, except that, in the case of Bonds which are to be redeemed prior
to maturity and in respect of which notice of such
redemption shall have been given as in Article IV providec
or provision satisfactory to the Trustee shall have been
made for the giving of such notice, the amount to be deposited or held shall be the Redemption Price of such Bonds; or
(b) Investment Securities described in clause (1) o the definition thereof in Section 1.03 and which are not redeemable in advance of their maturity at the option of the Issuer or any other Person (other than the holder
thereof) the principal of and interest on which when due
will provide money sufficient to pay the principal or
Redemption Price of and all unpaid interest to maturity,
to the redemption date, as the case may be, on the Bonds
be paid or redeemed, as such principal or Redemption Pric
and interest become due, provided that, in the case of
Bonds which are to be redeemed prior to the maturity
thereof, notice of such redemption shall have been given
in Article IV provided or provision satisfactory to the
Trustee shall have been made for the giving of such notic
507 lP/2062/06 -52-
provided, in each case, that the Trustee shall have been
irrevocably instructed (by the terms of this Indenture or by
Request of the Issuer) to apply such money to the payment of
such principal or Redemption Price and interest with respect tc
such Bonds.
SECTION 10.04. Payment of Bonds After Discharge of
Indenture. Notwithstanding any provisions of this Indenture, any moneys held by the Trustee in trust for the payment of the principal or Redemption Price of, or interest on, any Bonds an( remaining unclaimed for six years after the principal of all 0: the Bonds has become due and payable (whether at maturity or upon call for redemption or by acceleration as provided in thir Indenture), if such moneys were so held at such date, or six years after the date of deposit of such moneys if deposited after said date when all of the Bonds became due and payable, shall, upon Request of the Issuer, be repaid to the Issuer fret from the trusts created by this Indenture, and all liability o the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the Issuer as aforesaid, the Trustee, may (at the cost of the Issuer) first publish at least once in a Financial Newspaper o
Journal a notice, in such form as may be deemed appropriate by
the Trustee, with respect to the Bonds so payable and not
presented and with respect to the provisions relating to the repayment to the Issuer of the moneys held for the payment
thereof.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Liability of Issuer Limited to Revenues.
Notwithstanding anything in this Indenture or in the Bonds contained, the Issuer shall not be required to advance any moneys derived from any source other than the Revenues and other assets pledged under this Indenture for any of the
purposes in this Indenture mentioned, whether for the payment
of the principal or Redemption Price of or interest on the
Bonds or for any other purpose of this Indenture.
Nevertheless, the Issuer may, but shall not be required to,
advance for any of the purposes hereof any funds of the Issuer which may be made available to it for such purposes.
SECTION 11.02. Successor is Deemed Included in All References to Predecessor. Whenever in this Indenture either the Issuer or the Trustee is named or referred to, such reference shall be deemed to include the successors or assign: thereof, and all the covenants and agreements in this Indentui contained by or on behalf of the Issuer or the Trustee shall
50712/2062/06 -53-
bind and inure to the benefit of the respective successors and
assigns thereof whether so expressed or not.
SECTION 11.03. Limitation of Rights to Parties and Owners. Nothing in this Indenture or in the Bonds expressed or implied is intended or shall be construed to give to any Person other than the Issuer, the Trustee, and the Owners of the Bonds, any legal or equitable right, remedy or claim under or in respect of this Indenture or any covenant, condition or provision therein or herein contained; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the Issuer, the Trustee, and the Owners of the Bonds.
SECTION 11.04. Waiver of Notice. Whenever in this Indenture the giving of notice by mail or otherwise is required, the giving of such notice may be waived in writing b] the Person entitled to receive such notice and in any such cas6 the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
SECTION 11.05. Destruction of Bonds. Whenever in this
Indenture provision is made for the cancellation by the Trustec and the delivery to the Issuer of any Bonds, the Trustee may, upon Request of the Issuer, in lieu of such cancellation and delivery, destroy such Bonds (in the presence of an officer of the Issuer, if the Issuer shall so require), and deliver a certificate of such destruction to the Issuer.
SECTION 11.06. Severability of Invalid Provisions. If an
one or more of the provisions contained in this Indenture or i the Bonds shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Indenture and such invalidity, illegality or unenforceability shall not affect any other provision of this Indenture, and this Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. declares that it would have entered into this Indenture and
each and every other Section, paragraph, sentence, clause or
phrase hereof and authorized the issuance of the Bonds pursuar
thereto irrespective of the fact that any one or more Sections
paragraphs, sentences, clauses or phrases of this Indenture me
be held illegal, invalid or unenforceable.
SECTION 11.07. Notice to Issuer and Trustee. Any notice
to or demand upon the Trustee may be served or presented, and such demand may be made, at the principal corporate trust
office of the Trustee in Los Angeles, California, which at thc
date of adoption of this Indenture is located at 333 South Hoy
The Issuer hereby
5071P/2062/06 -54-
Street, Los Angeles, California 90017, Attention: Corporate
Trust Department, or at such other address as may have been
filed in writing by the Trustee with the Issuer. or demand upon the Issuer shall be deemed to have been sufficiently given or served for all purposes by being deposited, postage prepaid, in a post office letter box, addressed to the Issuer, City of Carlsbad, 1200 Elm Road, Carlsbad, California 92008, Attention: Director of Building anc Planning, or to the Issuer at such other address as may have
been filed in writing by the Issuer with the Trustee.
Any notice tc
SECTION 11.08. Evidence of Rights of Owners. Any request,
consent or other instrument required or permitted by this
Indenture to be signed and executed by Owners may be in any
number of concurrent instruments of substantially similar tenoi
and shall be signed or executed by such Owners in Person or by an agent or agents duly appointed in writing.
execution of any such request, consent or other instrument or of a writing appointing any such agent, or of the holding by
any Person of Bonds transferable by delivery, shall be
sufficient for any purpose of this Indenture and shall be conclusive in favor of the Trustee and of the Issuer if made ii the manner provided in this Section.
Proof of the
The fact and date of the execution by any Person of any such request, consent or other instrument or writing may be
proved by the certificate of any notary public or other office
of any jurisdiction, authorized by the laws thereof to take acknowledgements of deeds, certifying that the Person signing such request, consent or other instrument acknowledged to him
the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer .
Any request, consent, or other instrument or writing of th
Owner of any Bond shall bind every future Owner of the same
Bond and of every Bond issued upon transfer thereof, in
exchange therefor or in lieu thereof, in respect of anything
done or suffered to be done by the Trustee or the Issuer in accordance therewith or reliance thereon.
SECTION 11-09. Disqualified Bonds. In determining whethe
the Owners of the requisite aggregate principal amount of Bond have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are owned or held by or for the account of the Issuer, or by any other obligor on the Bonds, or by any Person directly or indirectly controlling
or controlled by, or under direct or indirect common control
with, the Issuer or any other obligor on the Bonds, shall be disregarded and deemed not to be Outstanding for the purpose o any such determination. Bonds so owned which have been pledge
in good faith may be regarded as Outstanding for the purposes
5071P/2062/06 -55-
of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee's right to vote such Bonds and that the pledgee is not a Person directly or
indirectly controlling or controlled by, or under direct or indirect common control with, the Issuer or any other obligor
on the Bonds. In case of a dispute as to such right, any
decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.
SECTION 11-10. Money Held for Particular Bonds. The money
held by the Trustee for the payment of the interest, principal or Redemption Price due on any date with respect to particular
Bonds (or portions of Bonds in the case of Bonds redeemed in
part only) shall, on and after such date and pending such
payment, be set aside on its books and held in trust by it for the Owners of the Bonds entitled thereto, subject, however, to the provisions of Section 10.04.
this Indenture to be established and maintained by the Trustee
may be established and maintained in the accounting records of
the Trustee, either as a fund or an account, and may, for the
purposes of such records, any audits thereof and any reports 01 statements with respect thereto, be treated either as a fund 01 as an account; but all such records with respect to all such
funds shall at all times be maintained in accordance with
generally accepted accounting principles, to the extent practicable, and with due regard for the requirements of Section 6.06 and for the protection of the security of the
Bonds and the rights of every Owner thereof.
ences. The headings or titles of the several Articles and Sections hereof, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not affect the meaning, construction or effect of this Indenture.
SECTION 11.11. Funds and Accounts. Any fund required by
SECTION 11.12. Article and Section Headings and Refer-
All references herein to "Articles, " "Sections" and other
subdivisions are to the corresponding Articles, Sections or
subdivisions of this Indenture; the words "herein, " "hereof , "
hereby, " "hereunder" and other words of similar import refer
to this Indenture as a whole and not to any particular Article
Section or subdivision hereof; and words of the masculine
gender shall mean and include words of the feminine and neuter
genders.
SECTION 11.13. Waiver of Personal Liability. No officer
agent or employee of the Issuer shall be individually or
personally liable for the payment of the principal or Redemption Price of or interest on the Bonds; but nothing herein contained shall relieve any such officer, agent or
11
5 07 1P/2 062/06 -56-
employee from the performance of any official duty provided by
law.
Indenture may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to
be an original; and all such counterparts, or as many of them
as the Issuer and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument.
Indenture to be signed in its name by its Mayor and its seal to be hereunto affixed and attested by the City Clerk, and
Security Pacific National Bank, in token of its acceptance of the trusts created hereunder, has caused this Indenture to be
signed in its corporate name by one of its Trust Officers, as of the day and year first above written.
SECTION 11.14. Execution in Several Counterparts. This
IN WITNESS WHEREOF, the CITY OF CARLSBAD has caused this
all
CITY OF CARLSBAD
BY Mayor
[ SEAL]
ATTEST:
City Clerk of the City of Carlsbad
SECURITY PACIFIC NATIONAL BANK
BY Assistant Vice President
5071P/2062/06 -57-