HomeMy WebLinkAbout1994-09-06; Housing & Redevelopment Commission; 258 Exhibit 4; Family Housing Revenue Refunding BondsEXHIBIT 4
REDLINED 8/H/94
LOAN AGREEMENT
By and Between
CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION
and
SEASCAPE APARTMENTS, INC.,
an Illinois corporation
Dated as of September 1, 1994
2 $15115,ooo
CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION
MULTIFAMILY HOUSING REVENUE REFUNDING BONDS, SERIES A OF 1994
(SEASCAPE VILLAGE PROJECT),
Certain rights of the Carlsbad Housing and Redevelopment Commission (the “Commission “) in and
to this Loan Agreement are being assigned to First Trust of California, National Association, as
Trustee, as security for the above-referenced Bonds pursuant to an Indenture of Trust dated as of
September 1, 1994 and securing the above-referenced Bonds.
TABLE OF CONTENTS Page
ARTICLE I
DEFINITIONS AND EXHIBITS
Section 1.1. Definition of Terms ................................ 1
Section 1.2. Exhibits ....................................... 1
ARTICLE II
REPRESENTATIONS, WARRANTIES AND SPECIAL TAX COVENANTS
Section 2.1. Express Warranties of the Commission; Exclusion of Other
Warranties ..................................... 1
Section 2.2. General Representations, Warranties and Covenants of Owner ...... 3
Section 2.3. Operation of Project ............................... 5
Section 2.4. Modification and Termination of Tax Covenants .............. 5
Section 2.5. Release of Regulatory Agreement ....................... 6
Section 2.6. Authorized Owner Representative ....................... 6
ARTICLE III
THE BONDS, BOND PROCEEDS, THE INDENTURE
Section 3.1. Issuance of Bonds ................................. 6
Section 3.2. Bond Proceeds; Investments ........................... 6
Section 3.3. Indenture and the Escrow Agreement Approval ............... 7
ARTICLE IV
THE LOAN, PREPAYMENTS, ASSIGNMENTS; ALTERNATE SECURITY;
PURCHASE OF BONDS BY OWNER; LIQUIDITY FACILITY
Section 4.1.
Section 4.2.
Section 4.3.
Section 4.4.
Section 4.5.
Section 4.6.
Section 4.7.
Section 4.8.
Section 4.9.
Section 4.10.
Section 4.11.
Section 4.12.
Section 4.13.
Section 4.14.
Loan by Commission ............................... 7
Note Payments; Other Payments ........................ 7
Credits on Note Payments ............................ 9
Prepayment Generally ............................. 10
Alternate Security ................................ 10
Amounts Required for Prepayment ..................... 10
Maximum Rate of Interest ........................... 11
Assignments to Trustee ............................ 11
Administrative Fees and Expenses; Other Expenses ........... 11
Insurance ..................................... 12
Purchase of Bonds Pursuant to Tenders and Purchase in Lieu of
Redemption .................................... 12
Liquidity Facility; Alternate Liquidity Facility ............... 12
Payments Into the Tax and Insurance Reserve Account ......... 13
Payments Into Rebate Fund .......................... 13
PUBL:l77~_1(~D:l7481_3_TO:_17481_2)1091B2062.14 i OS/11194
ARTICLE V
DEFEASANCE OF PRIOR INDENTURE; TRUSTEE SERVICES
Section 5.1. Payment of Prior Bonds ............................ 13
Section 5.2. Payment for Extraordinary Services ..................... 13
ARTICLE VI
SPECIAL COVENANT
Section 6.1. Indemnification Covenant ........................... 14
Section 6.2. No Liability of Commission .......................... 15
Section 6.3. Further Assurances ............................... 15
ARTICLE VII
BREACH OF COVENANTS, REMEDIES
Section 7.1. Event of Default ................................. 16
Section 7.2. Remedies for Failure to Perform ....................... 16
Section 7.3. Discontinuance of Proceedings ........................ 17
Section 7.4. Remedies Cumulative .............................. 17
Section 7.5. Reimbursement of Expenses .......................... 18
Section 7.6. Remedies Subject to Applicable Law .................... 18
ARTICLE VIII
MISCELLANEOUS
Section 8.1.
Section 8.2.
Section 8.3.
Section 8.4.
Section 8.5.
Section 8.6.
Section 8.7.
Section 8.8.
Section 8.9.
Section 8.10.
Section 8.11.
Section 8.12.
Section 8.13.
Amounts Remaining in Funds and Accounts ................ 18
Payments by Credit Facility Issuer ...................... 18
Amendments, Changes or Modifications to Agreement ......... 19
Payment ...................................... 19
Counterparts ................................... 19
Severability .................................... 19
Term of Agreement ............................... 19
Notice of Changes in Fact ........................... 19
Limited Recourse Provisions ......................... 20
Notices ...................................... 20
Applicable Law ................................. 21
Successors and Assigns ............................ 21
Rights of Credit Facility Issuer and Liquidity = Facilitv Issuer .... 21
Appendix A Definitions
Exhibit A Description of Project
Exhibit B Form of Secured Note
08/11/94
PARTIES
This Loan Agreement dated as of September 1, 1994 (as amended or supplemented, the
“Loan Agreement” or this “Agreement”), by and between the Carlsbad Housing and
Redevelopment Commission, a public body corporate and politic organized and existing under the
laws and Constitution of the State of California (herein, together with any successor to its rights,
duties and obligations, referred to as the “Commission “), and Seascape Apartments, Inc., an
Illinois corporation (together with its successors and assigns as owner of the hereinafter defined
Project, the “Owner ‘7;
RECITALS
The parties acknowledge and confirm the Recitals lettered A through Y set forth in the
Indenture of Trust of even date herewith between the Commission and First Trust of California,
National Association, as trustee (the “Indenture”).
The Commission and the Owner desire to enter into this Loan Agreement for the
purposes and on the terms set forth herein and in the Indenture.
Accordingly the Commission and the Owner, each in consideration of the
representations, covenants and agreements of the other as set forth herein, mutually represent,
covenant and agree as follows, to wit:
ARTICLE I
DEFINITIONS AND EXHIBITS
Section 1.1. Definition of Terms. For all purposes of this Agreement, unless the
context clearly requires otherwise, capitalized terms used herein shall have the meanings set forth
in Appendix A to the Indenture.
Section I. 2. Exhibits. All Exhibits to this Agreement referenced herein shall be
deemed to be incorporated herein and made an integral part of this Agreement, whether or not
such Exhibits are physically attached hereto.
ARTICLE II
REPRESENTATIONS, W ARRANTIES AND SPECIAL TAX COVENANTS
Section 2.1. Express Warranties of the Commission; Exclusion of Other Warranties.
The Commission makes the following representations, warranties and covenants as the basis for
the undertakings on the part of the Owner herein contained:
(a) The Commission is a public body corporate and politic, duly organ&d
and validly existing under the laws and Constitution of the State of California.
08/l 1194
@I Under the Law and the Refunding Bond Act, the Commission has the
power to enter into the transactions contemplated by the Commission Documents, including
without limitation, the issuance and sale of the Bonds, and to carry out its obligations thereunder,
and by proper action has duly authorized the issuance and sale of the Bonds, the execution and
delivery of the Commission Documents, and the performance of all of the covenants and
agreements of the Commission contained in the Commission Documents.
Cc) The issuance of the Prior Bonds to obtain funds to provide financing for
the Project for the benefit of the Developer was, and the issuance of the Bonds to refund, with
other available money, the Prior Bonds is, intended to serve the public interest and will further
the purposes of the Law, including among other purposes the assistance of persons of medium
and low income in the City of Carlsbad to obtain decent, safe and sanitary housing.
00 The Commission will not take or permit, or omit to take or cause to be
taken, any action within its control that would have an adverse effect on the exclusion of interest
payable on the Bonds or the Prior Bonds from gross income for federal income tax purposes.
(e) The Commission has complied with all of the provisions of the
Constitution and laws of the State of California, including the Refunding Bond Act and the Law,
has made all filings and obtained all authorizations and approvals and has full power and
authority (as such are necessary) to enter into the Commission Documents and to issue the Bonds
and to consummate all transactions contemplated by the Commission Documents and the Bonds,
and to perform all of its obligations thereunder.
(0 Neither the execution and delivery by the Commission of this Agreement
or any other Commission Document or the issuance and sale of the Bonds nor the consummation
by the Commission of the transactions contemplated by this Agreement or any other Commission
Document conflicts with, will result in a breach of or default under or will (except with respect
to the lien of the Indenture, the First Deed of Trust Documents and the Second Deed of Trust
Documents) result in the imposition of any lien on any property of the Commission pursuant to
the terms, conditions or provisions of any statute, order, rule, regulation, agreement or
instrument to which the Commission is a party or by which it is bound.
(g) Each of the Commission Documents has been duly authorized, executed
and delivered by the Commission and each constitutes the legal, valid and binding obligation of
the Commission enforceable against the Commission in accordance with its terms except as the
enforceability thereof may be limited by general equitable principles, bankruptcy, insolvency,
moratorium, reorganization or other laws affecting creditors’ rights generally, Upon the
execution and delivery thereof, the Bonds will constitute valid and binding limited obligations of
the Commission, enforceable in accordance with their respective terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the rights of
creditors generally and to the application of equitable principles, to the exercise of judicial
discretion in appropriate cases and to the limitations on legal remedies against public bodies.
00 No member, trustee, director, officer or official of the Commission has
any interest (financial, employment or other) in the Owner or the transactions contemplated by
this Agreement.
PUBL:177~~1(RRD:17481~~~T0:~17481_2)109~B2062.14 2 08/l l/94
0) There are no actions, suits, proceedings, inquiries, or investigations
pending for which the Commission has been served notice or, to the knowledge of the
Commission, threatened against the Commission by or before any court, governmental agency or
public board or body, which (i) affects or questions the existence or the territorial jurisdiction of
the Commission or the legal authority of any official of the Commission to sign documents, (ii)
affects or seeks to prohibit, restrain or enjoin the execution and delivery of any of the
Commission Documents or the issuance, execution or delivery of the Bonds, (iii) affects or
questions the validity or enforceability of any of the Commission Documents or the Bonds, (iv)
questions the tax-exempt status of the Bonds; or (v) questions the power or authority of the
Commission to perform its obligations under any of the Commission Documents or the Bonds or
to carry out the transactions contemplated by the Commission Documents or the Bonds, with
respect to, or affecting the power or ability of the Commission to enter into and deliver (or
accept, as applicable), the Commission Documents and to issue the Bonds, or involving the
validity or enforceability of the Prior Bonds or the Bonds or any of the Commission Documents,
at law or in equity or before or by any court or governmental authority, except actions which, if
adversely determined, would not materially adversely affect or impair the enforceability of, or the
power or the ability of, the Commission to enter into, deliver (or accept, as applicable) and
perform its obligations under the Bonds and Commission Documents.
(i) The Commission acknowledges (based on the representations of the
Surety and the Prior Trustee) that substantial and material defaults and events of default existed
under the Prior Loan Agreement.
04 The Commission has not assigned and will not assign its interest in this
Agreement, the Note or any other First Deed of Trust Documents, other than to the Trustee to
secure payment of the Bonds; provided that the Commission’s rights to the payment of fees and
expenses under 1 Sections 4.2(d), 6.1 and 7.5 and the Commission’s right to receive any
notices, certificates, requests, requisitions or other communications hereunder shall not be
assigned.
(1) This Loan Agreement and the other Commission Documents have been
duly executed and delivered by the Commission and constitute valid and binding obligations of
the Commission, enforceable in accordance with their respective terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the rights of
creditors generally. Upon the execution and delivery thereof, the Bonds will constitute valid and
binding limited obligations of the Commission, enforceable in accordance with their respective
terms, except as limited by bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting the rights of creditors generally.
Section 2.2. General Representations, Warranties and Covenunts of Owner. The
Owner makes the following representations, warranties and covenants, which, together with the
other representations and agreements of the Owner contained in this Agreement, are relied upon
by the Commission and serve as a basis for the undertakings on the part of the Comrnission
contained in this Agreement:
(a) The Owner (i) is an Illinois corporation, validly organized and existing
under the laws of the State of Illinois and is duly authorized and qualified to conduct business in
the State; (ii) has full power and authority under its organizational documents and the laws of the
PUBL:177~~1(RED:17481~3~T0:~17481~2)109~B2062.14 3 08/l 1194
State of Illinois to execute and deliver the Owner Documents, to be bound by the terms of the
Indenture and to perform its obligations under the Owner Documents; and (iii) by proper action
has duly authorized the execution and delivery of this Agreement and the other Owner
Documents.
(b) There are no actions, suits or proceedings pending for which the
Owner has been served notice, or, to the best knowledge of the Owner, threatened against or
affecting the Owner or the Project or the transactions contemplated by this Agreement and the
other Owner Documents, at law or in equity or before any court or any officer or administrative
agency, and the Owner is not a party to any contract or agreement (other than this Loan
Agreement and the Regulatory Agreement) or subject to any organizational restriction or to any
order, regulation, writ, injunction or decree of any court or governmental authority, or to any
statute which would adversely affect in any material way (i) the properties, business or condition
(financial or otherwise) of the Owner, (ii) the Project or (iii) the performance and observance by
the Owner of the provisions of, and the consummation of any of the transactions contemplated
by, this Loan Agreement, the Secured Note, the First Deed of Trust, the Second Deed of Trust
Documents or any of the other First Deed of Trust Documents.
(cl The Owner has no liabilities except those incurred in the ordinary course
of business which are not delinquent or which are otherwise contemplated or permitted by this
Loan Agreement and the other First Deed of Trust Documents. The Owner is not in default in
the payment of any taxes levied or assessed against it or its assets. To the best of its knowledge,
the Owner is not in default (i) under any applicable statute, rule, order or regulation of any
governmental authority, or (ii) under this Loan Agreement or any of the other First Deed of
Trust Documents, the Reimbursement Agreement or the Second Deed of Trust Documents or
under any other agreement to which the Owner is a party which would adversely affect the
transactions contemplated hereby.
Cd) Neither the execution and delivery of this Loan Agreement or any of the
other First Deed of Trust Documents, the Reimbursement Agreement or the Second Deed of
Trust Documents nor the consummation of the transactions herein or therein contemplated nor
compliance with the terms and provisions hereof or thereof, conflicts with or results or will result
in a breach of any of the terms, conditions or provisions of the organizational documents of the
Owner or any law, order, rule, regulation, writ, injunction or decree of any court or
governmental authority or any agreement or instrument to or by which the Owner is a party or
by which it or any of its properties is bound or constitutes or will constitute a default thereunder,
or results or will result in the creation or imposition of any Lien of any nature whatsoever upon
any of its property or assets pursuant to the terms of any such agreement or instrument except the
Liens created by the First Deed of Trust Documents and the Second Deed of Trust Documents.
(e) No author&ion, consent, approval, order, registration, declaration or
withholding of objection on the part of, or filing of or with any governmental authority, not
already obtained or made, is required for the execution and delivery of this Loan Agreement or
any of the other First Deed of Trust Documents, the Reimbursement Agreement or the Second
Deed of Trust Documents or the performance of the terms and provisions thereof by the Owner.
(0 No portion of the Project will be used to provide a golf course, a
country club, a massage parlor, a tennis club, a skating facility, a racquet sports facility, a hot
~~~~:17700~1(~~~:17481~3~~0:_17481~2)109~B2062.14 4 08/l l/94
tub, a suntan facility, a racetrack, a sky box or other private luxury box, a health club facility, a
facility primarily used for gambling, a store the principal business of which is the sale of
alcoholic beverages, or a facility the primary purpose of which is retail food and beverage
services, automobile sales or service, or the provision of recreation or entertainment. No portion
of the Project will be used for the acquisition of land for farming purposes or any interest
therein.
(g) This Loan Agreement, each of the other First Deed of Trust Documents
and each of the Second Deed of Trust Documents have been duly executed and delivered by the
Owner and constitute valid and binding obligations of the Owner enforceable in accordance with
their respective terms, subject to bankruptcy, insolvency, moratorium and other similar laws
affecting the rights of creditors generally and the usual principles of equity including those
affecting rights of rescission.
00 Any certificate signed by the Owner and delivered pursuant to the
Indenture, this Agreement, the Regulatory Agreement or otherwise in connection with the Project
or the Bonds shall be deemed a representation and warranty by the Owner as to the statements
made therein.
(0 The Owner (i) intends to hold the Project for its own account, (ii) has
no current plans to sell the Project (iii) has not entered into any agreement or otherwise binding
commitment to sell the Project, (iv) recognizes that the refunding of the Prior Bonds may have
independent significance apart from any future sale of the Project because of the net anticipated
reduction in total debt service costs for the Project and (v) does not intend that the issuance of the
Bonds and the refunding of the Prior Bonds constitute a formally separate step in a single
prearranged transaction to reach the end result of the sale of the Project.
(i) The Indenture has been submitted to the Owner for its examination; and
the Owner acknowledges, by execution of this Agreement, that it has approved the Indenture and
agrees that it will be bound by the terms thereof and, in particular, agrees to comply with the
requirements of Section 5.8 of the Indenture, as amended from time to time.
W 1 Based won information obtained bv the Owner, not less than 90%
of the proceeds of the Prior Bonds (within the meaning of Section 103(b)(4)(A) of the 1954 Code
and applicable Regulations) have been expended for Project Costs which constitute Qualified
Project Costs.
Section 2.3. Operation of Project. The Owner hereby represents and warrants that it
shall operate the Project in accordance with the provisions of the Regulatory Agreement.
Section 2.4. Mod@cation and Termination of Tax Covenants.
GO Anything contained in this Agreement or in the Indenture to the contrary
notwithstanding, the Commission, the Trustee (as assignee of the Commission’s interest herein
under the Indenture) and the Owner hereby agree to amend this Agreement and the Regulatory
Agreement to the extent required, in the opinion of Bond Counsel, in order for interest payable
on the Bonds to be excluded from gross income for federal income tax purposes under
Section 103(b)(4)(A) of the 1954 Code, and, to the extent applicable, the Code. The party
5 08111 I94
requesting such amendment shall notify the other parties to the applicable agreement and the
Trustee of the proposed amendment, with a copy of such requested amendment to Bond Counsel
and to the Credit Facility Issuer. After review of such proposed amendment, Bond Counsel shall
render to the Trustee, the Commission, the Owner and the Credit Facility Issuer an opinion as to
whether such proposed amendment is necessary in order to maintain the exclusion of interest
payable on the Bonds from gross income for federal income tax purposes. The Owner shall pay
an amount to Bond Counsel sufficient to reasonably compensate Bond Counsel for reviewing such
proposed amendment and rendering such opinion.
0) Notwithstanding anything to the contrary contained in this Agreement,
this Agreement shall not be amended in any manner which would have the effect of increasing or
otherwise modifying the terms of the Owner’s payment obligations hereunder unless such
amendment shall have been consented to in writing by the Owner and the Credit Facility Issuer.
Section 2.5. Release of Regulatory Agreement. At the time all restrictions set forth
in the Regulatory Agreement expire, the Commission and the Trustee agree to provide the Owner
with a written release of the Regulatory Agreement in recordable form.
Section 2.6. Authoriked Owner Representative. Prior to or concurrently with the sale
of the Bonds, the Owner shall appoint an Authorized Representative for the purpose of taking all
actions and making all certificates required to be taken and made by the Author&d
Representative under the provisions of this Agreement, and may appoint one or more alternate
Authorized Representatives to take any such action or make any such certificate if the same is not
taken or made by the Author&d Representative. If no Person is serving as the Authorized
Representative, a general partner of a partnership Owner or the chief executive officer of a
corporate Owner shall be deemed to be the Authorized Representative.
Whenever under the provisions of this Agreement the approval of the Owner is required
or the Commission is required to take some action at the request of the Owner, such approval or
such request shall be made by the Authorized Representative unless otherwise specified in this
Agreement. The Commission or the Trustee shall be authorized to act on any such approval or
request and the Owner shall have no complaint against the Commission or the Trustee as a result
of any such action taken in conformity with such approval or request.
ARTICLE III
THE BONDS, BOND PROCEEDS, THE INDENTURE
Section 3.1. Issuance of Bonds. Subject to the satisfaction of and compliance with all
of the provisions, covenants and requirements of this Agreement, in order to provide funds to
refund, with other available money, all of the outstanding Prior Bonds, the Commission has
issued and delivered the Bonds to the purchaser or purchasers thereof in accordance with the
Indenture.
Section 3.2. Bond Proceeds; Investments. The proceeds of the sale of the Bonds
together with all earnings from any investments thereof shall be held, invested, reinvested and
disbursed solely for the purposes and subject to the limitations contained in the Indenture, the
Escrow Agreement and this Agreement.
PUBL:177~~1(RED:17481~3~T0:~17481~2)109~B2O62.14 6 08/l l/94
Section 3.3. Indenture and the Escrow Agreement Approval . The execution of this
Agreement shall constitute conclusive evidence of approval of the Indenture and the Escrow
Agreement by the Owner. Additionally, the Owner agrees, subject to the provisions of
Section 8.10 hereof, that whenever the Indenture or the Escrow Agreement by its terms imposes
a duty or obligation upon the Owner, such duty or obligation shall be binding upon the Owner to
the same extent as if the Owner were an express party to the Indenture, as applicable, and the
Owner hereby agrees to carry out and perform all of its obligations thereunder in accordance
with the terms thereof.
ARTICLE IV
THE LOAN, PREPAYMENTS, ASSIGNMENTS; ALTERNATE SECURITY;
PURCHASE OF BONDS BY OWNER; LIQUIDITY FACILITY
Section 4. I. Loan by Commission.
(a) The Owner and the Commission acknowledge and agree that pursuant to
the Escrow Agreement, the outstanding Prior Bonds will be paid from the proceeds of the sale of
the Bonds, a claim paid pursuant to the Prior Surety Bond, and other available moneys.
0) Concurrently with the authentication and delivery of the Bonds, the
Owner has executed and delivered this Agreement and the Note to evidence the Owner’s
obligation to make payments which are sufficient to make payments of the principal of, premium,
if any, and interest on the Bonds when due.
(cl Concurrently with the execution and delivery of this Agreement and the
issuance of the Bonds, the Owner shall cause the Surety Bond and the Liquidity Surety Bond to
be executed and delivered to the Trustee and shall execute and deliver all First Deed of Trust
Documents, and have the same filed and recorded in the real estate records of the County where
the Project is located. The Owner hereby agrees to carry out and perform all of its obligations
under all First Deed of Trust Documents.
Section 4.2. Note Payments; Other Payments.
(a) The principal of, premium, if any, and interest on the Note shall be paid
by or on behalf of the Owner by means of payments (the “Note Payments”) which, in the
aggregate, shall be in an amount sufficient for the payment in full when due of the principal of,
premium, if any, and interest on the Bonds from time to time outstanding under the Indenture,
including (i) the total interest becoming due and payable on the Bonds on the respective dates of
payment thereof, (ii) the total principal becoming due on the Bonds (whether at maturity, by
redemption or acceleration or otherwise) and (iii) the redemption premium, if any, that shall be
payable upon the redemption of Bonds prior to maturity.
@I Note Payments shall be due and payable as provided in the Note, subject
to the credits as and to the extent provided in Section 4.3 hereof and subject to the following:
(1) Notwithstanding the provisions of the Note, when
Bonds bear interest at a Daily Rate, a Weekly Rate or a Commercial Paper Rate,
~~~~:17700~1(~~~:17481~3~~0:~17481~2)109~ B2062.14 7 OS/l 1194
the Credit Facility Issuer, in its sole discretion, may by written notice to the
Owner, the Commission and the Trustee, require the Owner to pay interest to
the Trustee, not later than 9:00 a.m., Trustee Time, on a date which is five (5)
Business Days prior to each Interest Payment Date, in an amount equal to the
interest on the Bonds which will be due on such Interest Payment Date. The
Owner covenants and agrees that, in all events, it is the Owner’s obligation to
contact the Trustee for a determination of the amount of interest due on the Note
and the Bonds prior to each Interest Payment Date in order to make timely
monthly payments hereunder and under the Note. While the Bonds bear interest
at a Daily Rate or a Weekly Rate, the Trustee shall endeavor to verify to the
Owner orally or in writing the Trustee’s estimate of the amount of interest due
on the Note and the Bonds at least seven (7) Business Days prior to each Interest
Payment Date; however, the failure of the Trustee to so notify the Owner or to
provide the Owner with the correct amount of interest due on the Note and the
Bonds prior to each Interest Payment Date shall not excuse the Owner’s
obligation to make timely payment of the full amount due hereunder or under the
Note and shall not be a defense to any legal action brought against the Owner if
the Owner makes an incorrect payment hereunder or under the Note.
(2) Notwithstanding the terms and provisions of the Note,
when Bonds bear interest at a Quarterly, Semi-Annual or Fixed Rate, the Credit
Facility Issuer, in its sole discretion, may by written notice to the Commission,
the Owner and the Trustee require the Owner to make monthly payments of
principal of and interest on the Note. If the Credit Facility Issuer so elects, the
Owner agrees to pay to the Trustee on the 15th day of each month an amount
equal to l/6 (in a Fixed Rate Period or Semi-Annual Rate Period) or l/3 (in a
Quarterly Rate Period) of the amount payable as interest on the Bonds on the
following Interest Payment Date. Such monthly payments shall be appropriately
adjusted for a short first Interest Period so that each monthly payment is equal.
In all cases the last such monthly payment before an Interest Payment Date shall
be sufficient to pay, with other available moneys, the principal of and interest on
the Bonds due on such Interest Payment Date. The Credit Facility Issuer may,
in its sole discretion by written notice to the Commission, the Owner and the
Trustee, rescind its direction to require the Owner to make monthly payments
during a Quarterly, Semi-annual or Fixed Rate Period.
Prior to consenting to a change in the interest determination
method to a Commercial Paper Rate pursuant to Section 3.3(f) of the Indenture,
the Credit Facility Issuer may, in its sole discretion, require the Owner (with
written notice to the Commission and the Trustee) to make monthly or other
periodic payments similar to the foregoing and the Owner agrees to make such
payments upon the written direction of the Credit Facility Issuer. Such
requirement may be rescinded at a later date in the sole discretion of the Credit
Facility Issuer.
(4 Notwithstanding any provisions to the contrary in this Agreement, in the
event the day on which any payment or other performance on the part of the Owner is scheduled
~~~~:17700~1(~~~:17481~3~T0:~17481~2)109~B2062.14 8 OS/l l/94
to occur under this Agreement is not a Business Day, then such payment or other performance by
the Owner shall be required to occur on the immediately succeeding Business Day.
6-0 The Owner agrees to pay directly to the Trustee, the Commission, the
Purchase Agent, the Paying Agent and the Remarketing Agent the reasonable fees, charges and
expenses of the Trustee (other than the fees of the Trustee and the Commission which shall have
been provided pursuant to Section 4.9 hereof), the Commission, the Purchase Agent, the Paying
Agent and the Remarketing Agent, including, with the mior written consent of the Owner, the
fees and expenses of any rebate consultant engaged by the Trustee or the Commission for the
calculation of Rebatable Arbitrage under Section 5.8 of the Indenture, upon receipt of an invoice
as and when the same become due, together with any and all reasonable costs, fees and expenses
of the Remarketing Agent, the Commission, the Paying Agent, the Purchase Agent or the Trustee
in connection with any remarketing of Bonds (and any other reasonable fees, costs and expenses
incurred in connection with the remarketing of the Bonds, including the reasonable fees and
expenses of legal counsel to any of the foregoing and the reasonable fees for obtaining opinions
of Bond Counsel or other counsel and all printing costs for Bonds and offering materials). The
Owner shall pay directly to the Liquidity 1 Facilitv Issuer the fees, charges and expenses of the
Liquidity e Facilitv Issuer as and when the same become due, together with any and all costs,
fees and expenses of the Liquidity 1 Facilitv Issuer in connection with any remarketing of Bonds
(including the reasonable fees and expenses of legal counsel to the Liquidity fi Facilitv Issuer)
and the fees and expenses of legal counsel to the Credit Facility Issuer in connection with any
remarketing of Bonds. The Owner shall also pay directly to the Credit Facility 5 Issuer the fees,
charges and expenses of the Credit Facility 2 Issuer as and when the same come due, together
with the fees and expenses of legal counsel to the Credit Facility fi Issuer.
63 Subject to Section 8.9 hereof, the obligation of the Owner to make the
payments required by this Section 4.2 and the Note shall be absolute and unconditional. Subject
to Section 8.9 hereof and to the credits permitted in Section 4.3 hereof, the Owner will pay
without abatement, diminution, postponement or deduction (whether for taxes or otherwise) all
such amounts regardless of any cause or circumstance whatsoever, including, without limitation,
any defense, setoff, recoupment or counterclaim which the Owner may have or assert against the
Commission, Trustee, Credit Facility Issuer, the Liquidity 2. Facilitv Issuer, if any, any owner
of a Bond or any other person. In the event the Owner shall fail to make any of the payments
required in this Article IV, the payment so in default shall continue as an obligation of the Owner
until the amount in default shall have been fully paid. Any payment to the Trustee under the
Credit Facility or the Liquidity Facility shall not release or discharge the Owner from its
obligation to make such payments hereunder unless the Trustee receives written notice from the
Credit Facility Issuer that it has been reimbursed for such payment under the Reimbursement
Agreement or written notice from the Liquidity 5 Facilitv Issuer that it has been reimbursed or
otherwise elects to have such payment so credited.
(0 In addition to the payments otherwise required hereunder, the Owner
shall be obligated to make the payments required by Section 5.8 of the Indenture.
Section 4.3. Credits on Note Payments. Notwithstanding any provision contained in
this Agreement or in the Indenture to the contrary:
OS/11194
60 Investment earnings on the Revenue Fund and money deposited in the
Revenue Fund from earnings on invested funds which are to be deposited into the
Revenue Fund in accordance with the provisions of the Indenture shall be credited
against the obligations of the Owner to make Note Payments hereunder to the extent such
amounts are applied to make payments on the Bonds.
09 The principal amount of Bonds purchased by the Owner and delivered to
the Trustee for cancellation with the prior written consent of the Credit Facility Issuer
shall be credited against the obligation of the Owner to pay the principal on the Note
corresponding to the maturity date of the Bonds delivered to the Trustee and cancelled,
provided in no event shall the Owner or any other Person have the right to deliver Bonds
to the Trustee for cancellation without the prior written consent of the Credit Facility
Issuer, and further provided that Bonds owned by or on behalf of the Credit Facility
Issuer may be presented to the Trustee for cancellation, but solely at the option of the
Credit Facility Issuer.
Section 4.4. Prepayment Generally. No prepayment of the Note may be made except
to the extent and in the manner expressly permitted by the Note. Upon receipt of written notice
from the Owner that a deposit is being made by the Owner for the purpose of prepaying the Note
and thereby affecting the redemption of the Bonds, the Trustee at the direction of the Owner, and
subject to the provisions of the Indenture, shall redeem the Bonds as required by the redemption
provisions of the Indenture.
Section 4.5. Alternate Security.
(4 The Owner agrees to provide a Credit Facility securing the Bonds so
long as the Bonds are outstanding which Credit Facility complies with the provisions of
Section 2.11 of the Indenture. At the times required by Section 2.1 l(c) or 2.1 l(d) of the
Indenture, as applicable, the Owner shall, or if the Owner fails to do so the Credit Facility Issuer
may (in its sole discretion), deliver to the Trustee the notice and accompanying documentation
required by Section 2.1 l(c) of the Indenture to replace a Credit Facility which is expiring or the
documentation required by Section 2.1 l(d) of the Indenture to extend a Credit Facility which is
expiring.
The Owner may at any time elect to replace the Credit Facility then in effect
with an Alternate Security, provided that the Alternate Security satisfies the requirements of
Section 2.11 of the Indenture. If the Owner elects to deliver an Alternate Security to replace a
Credit Facility issued by a Credit Facility Issuer before the end of the term of the replaced Credit
Facility, the Credit Facility Issuer must be indemnified or otherwise protected to its satisfaction
against any claims that might be payable by it under the Credit Facility.
@I The Owner shall also promptly pay an amount sufficient to pay all costs
incurred by the Trustee, and, if applicable, the Liquidity 1 Facilitv Issuer and the Commission
(including reasonable fees and expenses for its counsel and Bond Counsel) in connection with the
substitution of such Alternate Security.
Section 4.6. Amounts Required for Prepayment. The amount payable by the Owner
hereunder upon any prepayment of the Note under Section 6 thereof shall include an amount of
10 OS/l l/94
money equal to the Administrative Expenses and redemption premium, if any, to accrue through
the payment and redemption of the Bonds.
Section 4.7. Maximum Rate of Interest. Notwithstanding any provision of this
Agreement to the contrary, the Commission and the Owner hereby agree that in no event shall
the interest contracted for, charged or received in connection with this Agreement or the Note
(including any other costs or considerations that constitute interest under the laws of the State
which are contracted for, charged or received pursuant to this Agreement) exceed the maximum
rate of nonusurious interest allowed under the laws of the State or the United States as presently
in effect (the “Maximum Legal Rate of Interest”) and to the extent an increase is allowable by
such laws, but in no event shall any amount ever be paid or payable by the Owner greater than
the amount contracted for herein; and in the event the maturity of the principal amount of the
Note is accelerated pursuant to the terms of the Note or Article VII hereof, or prepaid in
accordance with the provisions hereof requiring mandatory prepayment, then such amounts that
constitute payments of interest on the Note and under this Agreement, together with any costs or
considerations which constitute interest under the laws of the State, may never exceed an amount
which would result in payment of interest at a rate in excess of the Maximum Legal Rate of
Interest, whichever applicable laws permit the highest rate, as presently in effect and to the extent
an increase is allowable by such laws; and excess interest, if any, provided for in this
Agreement, or otherwise, shall be cancelled automatically as of the date of such acceleration or,
if theretofore paid, shall be credited on the principal amount of the Note.
Section 4.8. Assignments to Trustee. It is understood and agreed that all right, title
and interest of the Commission in and to the Note, the other First Deed of Trust Documents and
this Agreement (excepting the Reserved Rights of the Commission), are to be pledged and
assigned by the Commission to the Trustee as security for the Bonds under and pursuant to the
Indenture and the Assignment. The Owner consents to such assignments, transfers and pledges.
The Commission directs the Owner, and the Owner agrees, to pay or cause to be paid to the
Trustee at its principal corporate trust office all Note Payments when due pursuant to this
Agreement.
Section 4.9. Administrative Fees and Expenses; Other Expenses. The Owner hereby
agrees to pay to the Trustee the amount necessary to pay the Administrative Expenses for deposit
into the Administrative Expenses Account for payment of the Administrative Expenses prior to
their due date. The Owner will obtain and deposit with the Trustee statements from each Person
to be paid from the Administrative Expenses Account of the amount of the Administrative
Expenses for which deposits are to be made. Any amount to be paid to such Persons from the
Administrative Expenses Account not specifically provided for in the Indenture or this Agreement
must be approved in writing by the Credit Facility Issuer.
The Owner will pay all reasonable fees, expenses, advances, and other payments
owing to the Credit Facility Issuer under the Credit Facility, the First Deed of Trust Documents
as described therein or the Second Deed of Trust Documents as described therein, all reasonable
fees, expenses, advances, and other payments owing to the Liquidity - Facilitv Issuer under the
Liquidity Facility Agreement as described therein, and all reasonable fees and expenses owing to
the Remarketing Agent under the Remarketing Agreement as described therein.
~~~~:17700~1(~!a:17481_30:_17481~2)109~B2062.14 11 OS/l l/94
Section 4. IO. Insurance. The Owner shall cause the Project to be insured to the
extent required by the First Deed of Trust.
Section 4. Il. Purchase of Bonds Pursuant to Tenders and Purchase in Lieu of
Redemption.
60 The Owner hereby covenants and agrees to purchase or cause to be
purchased all Bonds which have been tendered for purchase by their Holders pursuant to
Section 4.5(a) of the Indenture to the extent that proceeds of the sale of such Bonds by the
Remarketing Agent pursuant to Article IV of the Indenture are insufficient. Any and all Bonds
purchased by or on behalf of the Owner pursuant to the preceding sentence shall be remarketed
in accordance with the Indenture and shall not be canceled or applied as an early prepayment of
the Note without, in each case, the prior written consent of the Credit Facility Issuer (which
consent the Owner and the Commission acknowledge and agree may be given or withheld by the
Credit Facility Issuer in its sole discretion without regard to any standard of reasonableness).
The Trustee shall notify the Owner no later than two (2) Business Days preceding each
Remarketing Date when Bonds are to be tendered by the Holders thereof of the Purchase Price of
such Bonds.
(b) The Owner hereby covenants and agrees to purchase or cause to be
purchased all Bonds which have been tendered for purchase by their Holders pursuant to
Section 4.5(b) of the Indenture to the extent that proceeds of the sale of such Bonds by the
Remarketing Agent pursuant to Article IV of the Indenture are insufficient. The Owner shall
deposit with the Trustee by 10:00 A.M. Trustee Time on any Remarketing Date on which Bonds
are to be purchased pursuant to Section 4.5(b) of the Indenture an amount equal to the Purchase
Price of Bonds to be purchased on such date. Any and all Bonds purchased by or on behalf of
the Owner pursuant to this subsection may be cancelled or applied as an early prepayment of the
Note on direction of the Owner, but shall not be remarketed in accordance with the Indenture
without the prior written consent of the Credit Facility Issuer (which consent the Owner and the
Commission acknowledge and agree may be given or withheld by the Credit Facility Issuer in its
sole discretion without regard to any standard of reasonableness).
Cc) The Owner hereby covenants and agrees to purchase or cause to be
purchased all Bonds which are to be purchased in lieu of redemption pursuant to Section 4.5(c)
of the Indenture. The Owner shall deposit with the Trustee by 10:00 A.M. Trustee Time on any
date on which Bonds are to be purchased in lieu of redemption pursuant to Section 4.5(c) of the
Indenture an amount equal to the Purchase Price of Bonds to be purchased on such date. Any
and all Bonds purchased by or on behalf of the Owner pursuant to this subsection may be
cancelled or applied as an early prepayment of the Note on the direction of the Owner, but shall
not be remarketed in accordance with the Indenture without the prior written consent of the
Credit Facility Issuer (which consent the Owner and the Commission acknowledge and agree may
be given or withheld by the Credit Facility Issuer in its sole discretion without regard to any
standard of reasonableness).
Section 4.12. Liquidity Facility; Alter&e Liquidity Facility.
(a) 0) The Owner agrees to provide a Liquidity Facility in accordance
with this Section 4.12 and Section 2.12 of the Indenture providing for the payment of the
PUBL:17700~1(RKD:17481~3~T0:~17481~2)109~~062.14 12 OS/l 1194
purchase price of Bonds tendered by their owners during any Short Term Rate Period. At the
times required by Section 2.12(c) or 2,12(d) of the Indenture, as applicable, the Owner shall, or
if the Owner fails to do so the Credit Facility Issuer may (in its sole discretion), deliver to the
Trustee the notice and accompanying documentation required by Section 2.12(c) of the Indenture
to replace a Liquidity Facility which is expiring or the documentation required by Section 2.12(d)
of the Indenture to extend a Liquidity Facility which is expiring.
(ii) The Owner shall have the right to replace a Liquidity Facility
with an Alternate Liquidity Facility at any time, provided that the Alternate Liquidity Facility
meets the requirements of Section 2.12 of the Indenture.
0)) Each Liquidity Facility must be approved in writing by the Credit
Facility Issuer and must be a municipal bond insurance policy, bond purchase or standby funding
agreement, letter of credit or Surety Bond which is acceptable to the Credit Facility Issuer in all
respects and pursuant to which the Liquidity 2. Facilitv Issuer agrees to pay, in immediately
available funds the amounts necessary to pay the purchase price of Bonds tendered pursuant to
Section 4.5(a) of the Indenture and not remarketed pursuant to Article IV of the Indenture and
must otherwise comply with the provisions of Section 2.12 of the Indenture.
Section 4.13. Payments Into the Tax and Insurance Reserve Account. If required by
the Credit Facility Issuer, the Owner shall make an initial payment and monthly payments into
the Tax and Insurance Reserve Account in accordance with the provisions of Section 8 of the
First Deed of Trust.
Section 4.14. Payments Into Rebate Fund. The Owner agrees to comply with the
covenants and procedures set forth in Section 5.8 of the Indenture and the Tax Certificate and to
pay to the Trustee for deposit in the Rebate Fund such amounts as may be necessary to enable
the Trustee to pay any Rebatable Arbitrage to the United States Government.
ARTICLE V
DEFEASANCE OF PRIOR INDENTURE; TRUSTEE SERVICES
Section 5. I. Payment of Prior Bonds. If the money available from the proceeds of
the sale of the Bonds together with any available money then on deposit with the Prior Trustee
under the Prior Indenture shall not be sufficient to pay or provide for the payment of the Prior
Bonds in accordance with Article XIII of the Prior Indenture, the Owner shall pay the amount of
any deficiency to the Prior Trustee immediately upon demand.
Section 5.2. Payment for Extraordinary Services.
(a) The Owner hereby covenants and agrees to pay all reasonable fees of
Bond Counsel in connection with rendering opinions after the issuance of the Bonds which are
described in the Indenture and this Agreement.
(b) If, upon or after the occurrence of any default or breach by the Owner
hereunder or under any First Deed of Trust Document (regardless of whether it constitutes an
Event of Default), the Commission or the Trustee shall incur Extraordinary Expenses for the
13 08/l 1194
enforcement of performance or observance of any obligation or agreement on the part of the
Owner contained herein, or in any First Deed of Trust Document, the Owner will on demand
therefore reimburse the Commission or the Trustee or both for, or pay directly, Extraordinary
Expenses so incurred.
ARTICLE VI
SPECIAL COVENANT
Section 6. I. Indemnzfication Covenunt. The Owner shall indemnify, hold harmless
and defend the City, the Commission, the Prior fi Trustee, the Trustee and the respective
officers, members, councilmembers, directors, officials and employees of each of them
(collectively, the “Indemnified Parties”) to the maximum extent permitted by law against any and
all losses, costs, damages, claims, actions, expenses and liabilities of whatever nature, kind or
character (including, without limitation, attorneys’ fees of counsel reasonably acceptable to the
Indemnified Party, litigation and court costs, amounts paid in settlement, and amounts paid to
discharge judgments) directly or indirectly arising out of or related to any claim, suit,
investigation, proceeding or action commenced or threatened, arising out of or related to (a) any
default or alleged default under the Prior Loan Agreement or the Prior Reimbursement
Agreement; (b) f the redemption of the Prior Bonds; (c) the issuance of the Bonds; or (d) any
written statements or representations with respect to the Owner, the Project, the Prior Bonds or
the Bonds made or given to the Commission, the Prior Trustee or the Trustee, or any
underwriters or purchasers of any of the Bonds, by the Owner, or any of its agents or
employees, including, but not limited to, statements or representations of fact, or financial
information; provided, however, that this provision shall not require the Owner to indemnify the
Prior Trustee or the Trustee from any claims, costs, fees, expenses or liabilities arising from
the negligence or willful misconduct of the Prior Trustee or the Trustee.
The indemnification provided herein shall apply whether any such claim, suit,
investigation, proceeding or action complains of (a) any alleged interference with or breach of
any existing contract between the Commission and the owners of the Prior Bonds, E (b) fi any
other alleged wrongful act of the Indemnified Parties related to any default or alleged default
under the Prior Reimbursement Agreementi or the redemption of the Prior Bonds, and regardless
of whether the Indemnified Parties, or any agent thereof, made any investigation with respect to
the facts relating to the Project which was financed with the Prior Bonds or the Developer or any
affiliate thereof or the Prior Loan or the Prior Bonds for the purpose of determining whether the
proceedings described in the preceding paragraph were appropriate.
Upon the sale or transfer of the Project, the acquiring person or entity shall
indemnify and hold harmless the Indemnified Parties as provided herein, and upon such
indemnification, and only upon such indemnification, by the acquiring party, the Owner shall
thereafter have no further liability hereunder except for claims arising from any act or omission
of the Owner occurring while the Project was owned by the Owner.
In the event that any claim, suit, investigation, action or proceeding is brought
against an Indemnified Party, with respect to which indemnity may be sought hereunder, the
Owner, upon receipt of written notice from an Indemnified Party, shall assume and have the right
to direct the investigation, defense and settlement thereof, including the employment of counsel
PU9L:17700~1(R?XD:17481~3~T0:~17481~2)109~B2062.14 14 08/11/94
acceptable to the Indemnified Party and the payment of all expenses; provided that the
Indemnified Party shall have the right to review and approve or disapprove any compromise or
settlement in connection with any such claim, suit, investigation, proceeding or action brought
against such Indemnified Party or to which it is a party lurovided that the Indemnified Parties
shall not unreasonablv withhold or delav this arwroval and shall not unreasonablv
diSaDDrOVe anv comwomise or settlement). The Indemnified Parties also agree to CooDerate
with the Owner in the Owner’s investigation. defense and/or settlement of anv such claim,
suit. Droceeding or action. Any Indemnified Party shall have the right to employ separate
counsel in any suit, investigation, action or proceeding and to participate in the defense thereof;
but unless such separate counsel is employed with the approval and consent of the Owner, or
pursuant to a court order, the Owner shall not be required to pay the fees and expenses of such
separate counsel.
The Owner also shall pay and discharge and shall indemnify and hold harmless
the Commission and the Trustee from (x) any lien or charge upon payments by the Owner to the
Commission and the Tr&tee hereunder and (y) any taxes (including, without limitation, all ad
valorem taxes and sales taxes), assessments, impositions and other charges in respect of any
portion of the Project. If any such claim is asserted, or any such lien or charge upon payments,
or any such taxes, assessments, impositions or other charges, are sought to be imposed, the
Commission or the Trustee shall give prompt notice to the Owner and the Owner shall have the
sole right and duty to assume, and will assume, the defense thereof, with full power to litigate,
compromise or settle the same in its sole discretion.
The Commission represents and warrants to the Owner that it has no knowledge of a
claim of the nature described in this Section 6.1 above having been filed in any court, tribunal or
other body of competent jurisdiction or otherwise threatened.
Section 6.2. No Liability of Commission. The Bonds, together with interest thereon,
shall be limited obligations of the Commission giving rise to no pecuniary liability of the
Commission nor any charge against its general credit, shall be payable solely from the revenues
pledged therefor under the Indenture, and shall be a valid claim of the respective Holders only
against the revenues pledged therefor. The Bonds shall not constitute an indebtedness, liability,
general, special or moral obligation or a pledge or loan of the faith or credit or taxing power,
within the meaning of any constitutional or statutory provisions, of the State or any political
subdivision thereof, and neither the State nor any political subdivision thereof shall be liable
thereon, and in no event shall the Bonds be payable out of any funds or properties other than the
revenues pledged therefor.
Section 6.3. Further Assurances. To the extent permitted by law, the Commission
and the Owner each acknowledges that it will, from time to time, execute, acknowledge, and
deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such
further instruments as may be reasonably required or desirable for carrying out the intention of or
facilitating the performance of this Agreement.
08/11/94
ARTICLE VII
BREACH OF COVENANTS, REMEDIES
Section 7. I. Event of Default. An Event of Default shall be deemed to have occurred
under this Agreement if:
(a> Any amount required to be paid by Section 4(a), 4(b) or 6(a) of the Note
(taking into account any credits described in Section 4.3 hereof) or Section 4.2, 4.11(b) and (cl,
4.13 or 4.14 of this Loan Agreement is not paid to the Trustee by the Owner when due; or
0) The Owner shall fail to comply with the provisions of Section 4.5 or
Section 4.12 hereof and the continuation of such failure for a period of 10 days or more; or
Cc) The Owner shall fail to comply with or to perform any one or more of
the covenants, conditions or agreements on its part to be observed or performed hereunder or in
the Note (other than Section 4(a), 4(b) or 6(a) of the Note or Section 4.2, 4.5, 4.110~) and (cl,
4.12, 4.13 or 4.14 of this Loan Agreement), for a period of 30 days after written notice
specifying such breach or failure and requesting that it be remedied is given to the Owner;
provided, however, that in the event such breach or failure is such that it cannot be corrected
within said 30-day period, the same shall not constitute an Event of Default hereunder if
corrective action is instituted by the Owner within said 30-day period, is being diligently pursued
and is corrected within 90 days after such notice; or
(d) Any Event of Default under any of the other First Deed of Trust
Documents shall occur and be continuing, but only if the Credit Facility Issuer in its sole
discretion notifies the Trustee and the Commission in writing that such has occurred and that
such is to constitute an Event of Default hereunder; or
6) Any Event of Default under the Reimbursement Agreement or any of the
other Second Deed of Trust Documents shall occur and be continuing, but only if the Credit
Facility Issuer in its sole discretion notifies the Trustee and the Commission in writing that such
has occurred and that such is to constitute an Event of Default hereunder.
Section 7.2. Remedies for Failure to Per$onn.
(a) Subject to the terms and provisions of the Intercreditor Agreement, the
Credit Facility Issuer shall have the sole right to declare an Event of Default hereunder and if
such an Event of Default occurs hereunder and is continuing, then the Trustee may, with the
written consent of the Credit Facility Issuer (except in the case of an Event of Default under the
Indenture), and upon receipt of the written direction of the Credit Facility Issuer shall, declare
the principal of the Note and all other Note Payments to be due and payable immediately, by a
notice in writing to the Owner and the Commission, and upon any such declaration such principal
shall become immediately due and payable. So long as no Event of Default has occurred and is
continuing pursuant to Section 9.1 of the Indenture, any action by the Trustee or the Commission
shall be taken only at the Credit Facility Issuer’s written direction.
0)) Upon the occurrence of an Event of Default specified in Section 7.1
hereof, if (i) there has been paid to or deposited with the Trustee a sum sufficient to pay all
PU9L:177~~1(RED:17481~~~T0:~17481~2)109~%!062.14 16 08/l 1194
overdue principal of, premium, if any, and interest on the Bonds and any Administrative
Expenses, Extraordinary Fees and Extraordinary Expenses of the Trustee and the Commission,
(ii) such payment is made prior to the first to occur of the time notice of redemption of the Bonds
is given by the Trustee under Section 4.3 of the Indenture or the Project is sold upon foreclosure
of the First Deed of Trust, (iii) no Event of Default shall have occurred and be continuing under
the Indenture and (iv) the Credit Facility Issuer consents to the rescission of such acceleration;
then the acceleration of all amounts due under this Agreement shall be rescinded, and the parties
shall be restored to the same position as though no such Event of Default had occurred.
Cc) Upon the occurrence of an Event of Default specified in Section 7.1
above, the Trustee may, but only with the written consent of the Credit Facility Issuer (unless an
Event of Default has occurred under Section 9.1 of the Indenture), and upon receipt of the
written direction of the Credit Facility Issuer shall exercise one or more of the following
remedies subject in all respects to the provisions relating thereto in the Indenture and the
Intercreditor Agreement:
(0 Through its duly authorized agents, have access to and inspect,
examine and make copies of, the books, records and accounts of the Owner during
normal business hours, upon reasonable notice;
(ii) Petition a court of competent jurisdiction for the appointment of
a receiver to take possession of and manage and operate the Project in conformity with
the provisions of this Agreement and the Regulatory Agreement; _
(iii) Take whatever action at law or in equity may appear necessary
or desirable to enforce observance or performance of any covenant, condition or
agreement of the Owner under this Agreement, the Note and the First Deed of Trust
Documents, and to collect the amounts then due and thereafter to become due consistent
with the provisions of Section 8.9 of this Agreement and Sections 4(a) and 4(b) of the
Note; or
(iv) Exercise any remedy available under the First Deed of Trust
Documents or at law or in equity.
Section 7.3. Discontinuance of Proceedings. In case any proceeding taken by the
Commission or the Trustee (or the Credit Facility Issuer in the exercise of its rights under the
Intercreditor Agreement or any of the First Deed of Trust Documents) on account of any failure
of the Owner to perform under this Agreement shall have been discontinued or determined
adversely to the Commission or the Trustee (or the Credit Facility Issuer), then and in every case
the Commission, the Trustee, the Owner and the Credit Facility Issuer shall be restored to their
former positions and rights hereunder and under the other First Deed of Trust Documents and the
Intercreditor Agreement, respectively, and all rights, remedies and powers of the Commission,
the Trustee and the Credit Facility Issuer shall continue as though no such proceeding had been
taken, except with respect to any final and binding determination rendered in such proceeding.
Section 7.4. Remedies Czunulutive. Subject to Section 8.9, no remedy conferred
upon or reserved to the Commission, the Trustee or the Credit Facility Issuer by this Agreement
is intended to be exclusive of any other available remedy or remedies, but each and every such
PU~~:17700~1(RED:17481~3~T0:_17481~2)109~B2062.14 17 08/l l/94
remedy shall be cumulative and shall be in addition to every other remedy given under this
Agreement, the other First Deed of Trust Documents and the Second Deed of Trust Documents
or the Indenture or now or hereafter existing at law or in equity. No delay or omission to
exercise any right or power accruing upon any failure of the Owner to perform under this
Agreement shall impair any such right or power or shall be construed to be a waiver thereof. In
order to entitle the Commission or the Trustee to exercise any remedy reserved to it in this
Article, it shall not be necessary to give any notice other than as otherwise specified in this
Agreement.
Section 7.5. Reimbursement of Expenses. If, upon or after the occurrence of any
default hereunder, the Commission or the Trustee or both subject to the terms and provisions of
the Inter-creditor Agreement, shall employ attorneys or incur other expenses for the enforcement
of performance or observance of any obligation or agreement on the part of the Owner contained
herein, the Owner will on demand therefor pay, or reimburse the Commission or the Trustee or
both for the payment of, the reasonable fees of such attorneys and such other reasonable expenses
so incurred.
Section 7.6, Remedies Subject to Applicable Law. All rights, remedies, and powers
provided by this Article may be exercised only to the extent that the exercise thereof does not
violate any applicable provisions of law, and all the provisions of this Article are intended to be
subject to all applicable mandatory provisions of law which may be controlling in the premises
and to be limited to the extent necessary so that they will not render this Agreement invalid,
unenforceable, or not entitled to be recorded, registered, or filed under the provisions of any
applicable law.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Amounts Remaining in Funds and Accounts. Any amounts remaining in
any fund or account established under the Indenture after payment of the Bonds in full including
interest and premium, if any, thereon, or provision for payment thereof having been made in
accordance with the provisions of the Indenture, and payment of all other reasonable and
necessary obligations owing to the Commission, the Registrar, the Paying Agent, the
Remarketing Agent, the Credit Facility Issuer, the Liquidity 2. Facilitv Issuer, if any, and the
Trustee under this Agreement or the Indenture, shall be paid in accordance with Section 13.1 of
the Indenture.
Section 8.2. Payments by Credit Facility Issuer. The Credit Facility Issuer shall, to
the extent of any payments made by it pursuant to the Credit Facility or otherwise, be subrogated
to all rights of the Commission or its assigns (including, without limitation, the Trustee) as to all
obligations of the Owner with respect to which such payments shall be made by the Credit
Facility Issuer, but, so long as any of the Bonds remain Outstanding under the terms of the
Indenture, such right of subrogation on the part of the Credit Facility Issuer shall be subordinate
as provided in Section 2.7 of the Indenture to all rights and claims of the registered owners of
Bonds (other than Excluded Bondholders) Outstanding from time to time under the Indenture to
receive payments of principal, premium, if any, and interest which shall be or become due and
payable on the Bonds at maturity or on any Interest Payment Date or Redemption Date and to
PU9L:177~~1(RED:17481~3~~0:_17481~2)109~F32062.~4 18 08/l 1194
receive the purchase price for Bonds purchased in accordance with the Indenture. The Trustee
and the Commission shall execute and deliver any instrument reasonably requested by the Credit
Facility Issuer to evidence such subrogation, and the Trustee shall assign its rights in any
obligations of the Owner with respect to which payment of the principal thereof (including
purchase price), accrued interest thereon and other amounts with respect thereto is paid by the
Credit Facility Issuer.
Section 8.3. Amendments, Changes or ModiJications to Agreement. This Agreement
may be amended, changed or modified only subject to the requirements for and limitations on
such amendments, changes or modifications set forth in the Indenture.
Section 8.4. Payment. At such time as the principal of, premium, if any, and
interest on all Bonds Outstanding under the Indenture shall have been paid, or shall be deemed to
be paid in accordance with the Indenture, and all other sums payable by the Owner under this
Agreement and the Indenture shall have been paid, the obligations of the Owner hereunder and
under the Note shall be deemed to be fully paid, and the Owner upon request is entitled to
receive acknowledgment of such payment in full from the Trustee and the Commission.
Section 8.5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when so executed and delivered, shall be an original; but such
counterparts shall together constitute but one and the same Agreement, and, in making proof of
this Agreement, it shall not be necessary to produce or account for more than one such
counterpart.
Section 8.6. Severability. If any clause, provision or section of this Agreement shall
be held illegal or invalid by any court, the invalidity of such provisions or sections shall not
affect any other provisions or sections hereof, and this Agreement shall be construed and
enforced to the end that the transactions contemplated hereby be effected and the obligations
contemplated hereby be enforced, as if such illegal or invalid clause, provision or section had not
been contained herein.
Section 8.7. Term of Agreement. This Agreement shall be in full force and effect
from the date hereof and shall continue in effect until the last to occur of (a) the first date on
which there are no Bonds Outstanding, or (b) the date which is 91 days after all payment
obligations by the Owner under this Agreement have been paid in full, if during such 91 day
period no Event of Bankruptcy shall have occurred as to the Owner, or (c) the first day on which
the lien of the Indenture is discharged in accordance with the provisions of Section 13.1 of the
Indenture.
Section 8.8. Notice of Changes in Fact. Promptly after the Owner becomes aware of
the same, the Owner will notify the Trustee, the Commission and the Credit Facility Issuer of (a)
any change in any material fact or circumstance represented or warranted by the Owner in this
Agreement or in connection with the issuance of the Bonds, and (b) any default, event or
condition which, with notice or lapse of time or both, could become an Event of Default under
this Agreement or the Indenture, specifying in each case, the nature thereof and what action the
Owner has taken, is taking, and proposes to take with respect thereto.
~~9~:17700~1(~~~:17481_30:_17481~2)109~B2062.14 19 08/l 1194
Section 8.9. Limited Recourse Provisions. Notwithstanding any provisions of the
Indenture, the Note, this Agreement jother than the Drovision of Section 6.1 of this
T Aereement), the First Deed of rust or any other First Deed of Trust Document or any Second
Deed of Trust Documents to the contrary, in any action commenced to enforce the obligations of
the Owner created or arising hereunder the judgment shall not be enforceable personally against
the Owner or its successors or assigns (or against any affiliate, subsidiary or corporate parent of
the Owner), or against any assets of the Owner or its successors or assigns (or against the assets
of any affiliate, subsidiary or corporate parent of the Owner), except for the Granted Property
and all rents, issues, profits, proceeds, revenues, insurance proceeds and awards and other
income from the Granted Property.
Section 8. IO. Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if delivered personally or sent by registered or certified
mail, return receipt requested, or by private courier service, postage prepaid:
if to the Owner to: Seascape Apartments, Inc.
c/o Continental Casualty Company
CNA Plaza
Chicago, Illinois 60685
Attention: Vice President
with a copy to: Seascape Apartments, Inc.
c/o Continental Casualty Company
CNA Plaza
Chicago, Illinois 60685
Attention: Corporate Secretary
if to the Credit Facility
Issuer to:
Continental Casualty Company
CNA Plaza
Chicago, Illinois 60685
Attention: Senior Vice President/General Counsel
with a copy to: Continental Casualty Company
CNA Plaza
Chicago, Illinois 60685
Attention: Corporate Secretary
if to the Commission: Carlsbad Housing and Redevelopment Commission
2965 Roosevelt Road, Suite B
Carlsbad, California 92008
Attention: Housing and Redevelopment Director
if to the Trustee: First Trust of California, National Association
101 California Street, Suite 1150
San Francisco, California 94111
Attention: Multifamily Housing Group
PU9L:1r]oo_1(RELX17481~3~T0:_17481~2)109~B2062.14 20 08111194
or at such other address as shall be furnished in writing by any such party to the others, and shall
be deemed to have been given as of the date so delivered. A duplicate copy of each notice or
communication given hereunder by the Commission or the Owner shall also be given to the
Trustee, the Credit Facility Issuer and the Liquidity 1 Facilitv Issuer, if any.
Section 8. II. Applicable Law. This Agreement and the rights and obligations of the
respective parties hereunder shall be governed by and construed and enforced in accordance with
the substantive laws of the State, without reference to the conflict of laws principles of the State.
Section 8.12. Successors and Assigns. This Agreement is made for the sole protection
of Owner, the Commission, the Credit Facility Issuer and Trustee, and each of their successors
and assigns, and no other person shall have any right of action hereunder.
Section 8.13. Rights of Credit Facility Issuer and Liquidity 1 Faditv Issuer. All
rights of the Credit Facility Issuer or the Liquidity 2 Facilitv Issuer, respectively, to request,
direct, consent or approve matters under this Loan Agreement shall be suspended for such period
of time as the Credit Facility Issuer or the Liquidity 2 Facilitv Issuer, as applicable, remains in
default under the Credit Facility or the Liquidity Facility, as applicable, or if the Credit Facility
or the Liquidity Facility, as applicable, has been repudiated.
PUBL:177OO~l(RELk17481~3~~0:~17481~2)109~B2O62.14 21 08/11/94
IN WITNESS WHEREOF, the Commission, the Owner and the Trustee have caused this
Loan Agreement to be executed in their respective names and their seals, if any, to be hereunto
affixed and attested by their duly author&d officers, all as of the date first above written.
CARLSBAD HOUSING AND REDEVELOPMENT
COMMISSION
By:
Chairman
(S-1)
Attest:
Secretary
SEASCAPE APARTMENTS, INC.
By:
Vice President
Attest:
Secretary
08/l 1194
DESCRIPTION OF PROJECT
A 208-unit multifamily rental housing project known as Seascape Village and located generally
east of Paseo de1 Norte between Caminito De Las 5 Ondas and Buttercup Lane in the City of
Carlsbad, all as more particularly described as follow7
All that certain real property situated in the City of Carlsbad, County of San Diego, State of
California, described as follows:
Lots 100 and 101 of Carlsbad Tract No. 73-23, in the City of Carlsbad, County of San Diego,
State of California, according to Map thereof No. 8081, filed in the Office of County Recorder
of San Diego County, February 28, 1975.
Excepting all crude, oil, petroleum, gas, brea, asphaltum and all kindred substances and other
minerals in and under said land, but without the right to enter upon the surface of said land above
a depth of 500.0 feet to explore for or extract same, as reserved in a Deed recorded August 27,
1969 as File No. 157186 and that Deed recorded August 27, 1969 as File No. 157190, both of
Official Records.
Also excepting all oil, oil rights, mineral rights, natural gas rights and other hydrocarbons by
whatsoever name known, together with all geothermal steam and steam power that may be within
or under the parcel of land hereinafter described, together with the perpetual right of drilling,
mining, exploring and operating therefor and storing in and removing the same from said land,
or any other land, including the right to whipstock or directionally drill and mine from lands
other than those hereinafter described, oil or gas wells, tunnels and shafts into, through or across
the subsurface of the land hereinafter described and to bottom such whipstocked or directionally
drilled wells, tunnels and shafts under and beneath or beyond the exterior limits thereof, and to
redrill, retunnel, equip, maintain, repair, deepen and operate such wells or mines, without
however the right to drill, mine, store, explore and operate through or on the surface or the
upper 500 feet of the subsurface of the land herein described.
PU9L:177~~1(RED:17481~3~~0:~17481~2)109~B2062.14 A-l 08/l l/94
EXHIBIT B
SECURED NOTE
2. $15.115.000 SeDtember 13, 19%
For value received, Seascape Apartments, Inc., an Illinois corporation (together with its
successors and assigns, the “Owner “), hereby promises to pay to the order of the Carlsbad
Housing and Redevelopment Commission (the “Commission “), the principal sum of Fifteen
Million 1 One Hundred Fifteen Thousand Dollars and No/100 Cents ~~$15.115300.00~ and to
pay interest thereon from the date of this Note, all as hereinafter provided. Terms used in this
Note and not otherwise defined herein shall have the meanings set forth in the Loan Agreement
dated as of September 1, 1994 (as amended or supplemented from time to time, the “Loan
Agreement”) between the Owner and the Commission.
1. Note Payments; Bonds. The principal of, premium, if any, and interest on this
Note shall be paid by the Owner by means of payments which, in the aggregate, shall be in an
amount sufficient for the payment in full when due of the principal of, premium, if any, and
interest on the Carlsbad Housing and Redevelopment Commission Multifamily Housing Revenue
Refunding Bonds, Series A of 1994 (Seascape Village Project) in the aggregate principal amount
of 2 $15.115,000 (the “Bonds “) from time to time outstanding under the Indenture (defined
below), including (i) the total interest becoming due and payable on the Bonds on the respective
dates of payment thereof, (ii) the total principal becoming due on the Bonds (whether at maturity,
by redemption or acceleration or otherwise) and (iii) the redemption premium, if any, that shall
be payable upon the redemption of Bonds prior to maturity. Note Payments under this paragraph
shall be reduced in each case to the extent of any credit provided in Section 4.3 of the Loan
Agreement.
Unless sooner paid, the entire unpaid principal balance of this Note shall be due and
payable on December 1, fi 2005.
2. Interest Determinution. This Note shall bear interest at the same rates, for the
same periods, and determined in the same manner from time to time as the Bonds, all as
determined in accordance with the Indenture.
When interest is payable at a Daily, Weekly, Monthly, Commercial Paper Rate, Liquidity
Facility Rate or Credit Facility Rate, it will be computed on the basis of the actual number of
days elapsed over a year of 365 days (366 in leap years), and when payable at a Quarterly,
Semi-annual or Fixed Rate, on the basis of a 360-day year of twelve 30day months. Interest on
overdue principal and, to the extent lawful, on overdue premium and interest will be payable on
demand at the rate per annum then borne by this Note.
3. Interest Accrual. Interest will accrue on the unpaid portion of the principal of the
Bonds from the last date to which interest was paid, or if no interest has been paid, from the date
of the original issuance of the Bonds until the entire principal amount of the Bonds is paid.
B-l 08l11194
4. Payment Installments.
6) Subject to the provisions of Section 4.2(b) of the Loan Agreement,
interest and principal payments on this Note shall be due and payable in immediately available
funds at the Principal Office of First Trust of California, National Association, as Trustee
(herein, together with its successors and assigns, the “Trustee”) under the Indenture of Trust
dated as of September 1, 1994 (as amended and supplemented from time to time, the
“Indenture “) between the Commission and the Trustee, not later than 10:00 a.m., Trustee’s
Time, on the same dates and in the same amounts principal and interest is due on the Bonds.
The Owner covenants and agrees that it is the Owner’s obligation to contact the Trustee for a
determination of the amount of interest due hereunder and on the Bonds prior to each Interest
Payment Date in order to make timely monthly payments hereunder. While the Bonds bear
interest at a Daily or a Weekly Rate, the Trustee shall endeavor to verify to the Owner orally or
in writing the Trustee’s estimate of the amount of interest due on this Secured Note and the
Bonds at least seven (7) Business Days prior to each Interest Payment Date; provided, however,
the failure of the Trustee to so notify the Owner or to provide the Owner with the correct amount
of interest due on this Secured Note and the Bonds prior to an Interest Payment Date shall not
excuse the Owner’s obligation to make timely payment of the full amount due hereunder and
shall not be a defense to any legal action brought against the Owner if the Owner makes an
incorrect payment hereunder.
(b) The Owner shall make all other payments when due in accordance with the
provisions of the Loan Agreement.
(cl Notwithstanding any provisions to the contrary in this Note, in the event
the day on which any payment is scheduled to occur is not a Business Day, then such payment
shall be required to occur on the immediately succeeding Business Day.
(4 In no event shall the aggregate of the interest contracted for, charged or
received hereon, plus any other amounts contracted for, charged or received in connection
herewith which are deemed “interest” under the laws of the State and the United States of
America, as applicable, in effect on the date hereof permitting the charging and collecting of the
highest non-usurious interest rate hereon (hereinafter referred to as “Applicable Law “), ever
exceed the maximum amount of non-usurious interest which could be lawfully charged hereon
under Applicable Law, anything to the contrary herein, in the Loan Agreement, or in any other
related agreement notwithstanding, and if any amount of interest taken or received by the holder
of this Note shall be in excess of the maximum amount of deemed “interest” which, under
Applicable Law, could lawfully have been collected hereon, then the excess shall be deemed to
have been the result of a mathematical error by the Owner, the Trustee hereinafter referred to,
and such holder and shall be credited on the principal amount of this Note or, if at the time
insufficient principal remains unpaid, refunded promptly to the Owner. All interest and amounts
paid or agreed to be paid in connection with the indebtedness evidenced hereby which under
Applicable Law would be deemed “interest” shall, to the extent permitted by Applicable Law, be
amortized, prorated, allocated, and spread throughout the full term hereof.
5. Obligations Absolute. Subject to Section 13 hereunder, the obligation of the
Owner to make the payments required by this Note shall be absolute and unconditional. Subject
to the credits as and to the extent provided in Section 4.3 of the Loan Agreement, the Owner will
PU9L:177~~1(RED:17481~3~T0:~17481~2)109~B2062.14 B-2 08/11/94
pay without abatement, diminution, postponement or deduction (whether for taxes or otherwise)
all such amounts regardless of any cause or circumstance whatsoever, including, without
limitation, any defense, setoff, recoupment or counterclaim which the Owner may have or assert
against the Commission, the Trustee, the Credit Facility Issuer, the Liquidity 1 Facilitv Issuer, if
any, any Holder of a Bond or any other person.
6. Prepayments. This Note is prepayable only as provided and upon the terms set
forth below:
(a) Mandatory Prepayment upon Mandatory Redemption of Bonds. This Note
shall be prepaid, as a whole or in part on any date on which and to the extent that the Bonds are
subject to mandatory redemption pursuant to Section 4.1(c) of the Indenture. The prepayment
price hereunder shall be equal to the redemption price set forth in Section 4.1(c) of the Indenture
plus accrued interest on the Bonds to the date of redemption. Anything to the contrary in this
Note notwithstanding, when this Note is subject to prepayment in connection with a redemption
of Bonds pursuant to Section 4.1(c)(2), (3), (4) or (5) of the Indenture and such Bonds or any
portion thereof are purchased in lieu of redemption, no prepayment of this Note will occur or be
permitted to the extent that the Bonds are, in fact, purchased in lieu of redemption rather than
redeemed. This Note shall only be prepaid to the extent and in the amount that Bonds are
actually redeemed and cancelled.
0)) Optional Prepayment. This Note may be prepaid at the election of the
Owner with the prior written consent of the Credit Facility Issuer, as a whole or in part on any
date which the Bonds may be redeemed pursuant to Section 4.1(a) of the Indenture, but only
upon compliance with Section 4.1(b) of the Indenture. The prepayment price hereunder shall be
equal to the redemption price set forth in Section 4.1(a) of the Indenture and in the Bonds plus
accrued interest on the Bonds to the date of redemption.
(c) Extraordinary Prepayment. This Note may be prepaid in whole or in part,
on any date on which the Bonds may be redeemed pursuant to Section 4.1(d) of the Indenture in
accordance with the provisions of Section 4.1(d) of the Indenture. The prepayment price
hereunder shall be equal to the redemption price set forth in Section 4.1 (d) of the Indenture plus
accrued interest on the Bonds to the date of redemption.
Cd) Optional and Mandatory Tender. The payment by the Owner of any
portion of the Purchase Price of a Bond pursuant to Section 4.11 of the Loan Agreement shall
not constitute a prepayment of this Note and shall not extinguish any portion of the debt
represented by this Note, unless the purchased Bond is delivered to the Trustee for cancellation.
7. The Loan; Security. This Note is issued pursuant to the Loan Agreement and is
issued in consideration of the Loan made thereunder and to evidence the obligations of the Owner
to repay such Loan. It is intended by the Owner that the payments of principal of, premium, if
any, and interest hereon will be sufficient at all times to enable the Commission to pay the
principal of, premium, if any, and interest on, and the purchase price of, the Bonds when due.
The payment of this Note and the performance of the Owner’s obligations under the Loan
Agreement are secured by the First Deed of Trust Documents and otherwise as provided in the
Indenture and Loan Agreement.
08111194
Reference is hereby made to the Loan Agreement, the First Deed of Trust Documents,
the Second Deed of Trust Documents and the Indenture for a statement of the terms and
provisions thereof. Reference is hereby made to the Loan Agreement for a complete statement of
the terms and conditions under which the maturity or the principal installments of this Note may
be accelerated. As more fully set forth in the Loan Agreement, the entire principal balance and
all accrued interest on this Note may be declared to be immediately due and payable upon the
occurrence of an Event of Default as therein defined. In such event, but subject to the
Intercreditor Agreement, Section 40 of the First Deed of Trust and Section 13 hereof, the holder
of this Note shall have the right to exercise various remedies including foreclosure of the First
Deed of Trust and the other First Deed of Trust Documents and sale of any part or all of the
Granted Property.
8. Payments to Trustee. All payments of principal, premium, if any, and interest on
this Note shall be made to the holder of this Note at the principal office of the Trustee under the
Indenture, in lawful money of the United States of America.
9. No Modzfimions; Owner Waiver. The granting, without notice, of any extension
or extensions of time for payment of any sum or sums due hereunder, or under the Loan
Agreement or the First Deed of Trust, or any of the other First Deed of Trust Documents or for
the performance of any covenant, condition or agreement contained herein or therein, or the
granting of any other indulgence, or the taking or releasing or subordinating of any security for
the indebtedness evidenced hereby, or any other modification or amendment of this Note, the
Loan Agreement, the First Deed of Trust or any First Deed of Trust Documents will in no way
release or discharge the liability of the Owner on this Note and under the Loan Agreement,
whether or not granted or done with the knowledge or consent of the Owner.
The Owner and any other party (including, without restricting the foregoing, any
endorsers, sureties and guarantors) hereafter liable for the indebtedness represented by this Note,
hereby (a) waive presentment for payment, notice of dishonor, protest and notice of protest, and
(b) agree that the time of payment of the indebtedness or any part thereof may be extended from
time to time without modifying or releasing the lien of the First Deed of Trust or any other First
Deed of Trust Document or the liability of the Owner or any other such parties hereunder and
under the Loan Agreement.
10. Default; No Waiver. Subject to the Intercreditor Agreement, to Section 40 of the
First Deed of Trust and to Section 13 hereof, in the event of any Event of Default under the
Loan Agreement, the holder of this Note and the secured parties or beneficiaries under the First
Deed of Trust or any of them may exercise any remedy or remedies, in any combination
whatsoever, available by operation of law or under this Note, or the Loan Agreement, or the
First Deed of Trust or any of the other First Deed of Trust Documents, and the holder of this
Note and the secured parties or the beneficiaries under the First Deed of Trust shall be entitled to
collect their respective costs of collection, including specifically (but without limitation)
attorneys’ fees, and including costs incurred in participating in any insolvency proceeding or
seeking relief from any stay in effect in any such proceeding.
The holder of this Note and the secured parties or the beneficiaries under the First Deed
of Trust shall not by any act or omission or commission be deemed to waive any of their
respective rights or remedies hereunder or under any other First Deed of Trust Documents,
PU9L:17700~1(RED:17481~~~TOz~17481~2)109~B2062.14 B-4 08/l 1194
unless such waiver be in writing and signed by the holder hereof and such secured parties or the
beneficiaries, and then only to the extent specifically set forth therein. A waiver of one event
shall not be construed as a continuing waiver or as a bar to or waiver of such rights with respect
to a subsequent event.
Time is of the essence hereof.
11. Governing Law. The Owner agrees that: (i) this instrument and the rights and obligations of all parties hereunder shall be governed by and construed under the substantive laws
of the State of California, without reference to the conflict of laws principles of such state; (ii)
the obligation evidenced by this Note is an exempted transaction under the Truth in Lending Act,
15 U.S.C. §1601, et seq.; (iii) the proceeds of the indebtedness evidenced by this Note will not
be used for the purchase of registered equity securities within the purview of Regulation “U”
issued by the Board of Governors of the Federal Reserve System; and (iv) upon the maturity date, the holder of this Note shall not have any obligation to refinance the indebtedness evidenced
by this Note or to extend further credit to the Owner.
12. Successors. This Note shall bind the Owner and its successors and assigns, and
the benefits hereof shah inure to the holder of the Note and the secured parties or the
beneficiaries under the First Deed of Trust.
13. Limited Liability. Notwithstanding any provisions of this Note, the First Deed of
Trust, the Loan Agreement or any other First Deed of Trust Document or any Second Deed of
Trust Documents to the contrary, in any action commenced to enforce the obligations of the
Owner created or arising hereunder the judgment shall not be enforceable personally against the
Owner, its successors or assigns (or against any affiliate, subsidiary, or corporate parent of the
Owner) or against any assets of the Owner or its successors or assigns (or against the assets of any affiliate, subsidiary or corporate parent of the Owner), except for the Granted Property and
all rents, issues, profits, proceeds, revenues, insurance proceeds and awards and other income
from the Granted Property.
PUBL:177~~1(RED:17‘%1~~~T0:_17481_2)16’~B2062.14 B-5 0811 l/94
IN WITNESS WHEREOF, Seascape Apartments, Inc., has executed and delivered this
Note on 2 SeDtember 13, 1994.
SEASCAPE APARTMENTS, INC., an Illinois
corporation
BY Vice President
Attest:
Secretary
08/l l/94
The undersigned hereby assigns and transfers this Note to First Trust of California, National
Association, and its successors and assigns as Trustee under the Indenture of Trust dated as of
September 1, 1994, without recourse to the undersigned.
CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION
BY Chairman
Attest:
BY Secretary
PUBL:17700~1(RE0:17481~~~T0:~17481~2)109~B2062.14 B-7 OS/l 1194
ADMINISTRATION AGREEMENT
By and Between
CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION
Commission
and
FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION
Program Administrator
Relating to:
$15,115,000 CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION
MULTIFAMILY HOUSING REVENUE REFUNDING BONDS
SERIES A OF 1994
(SEASCAPE VILLAGE PROJECT)
Dated as of September 1, 1994
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT (“Administration Agreement”) is made and
entered into as of September 1, 1994, by and between the Carlsbad Housing and Redevelopment
Commission, a public body corporate and politic of the State of California (the “Commission”)
and First Trust of California, National Association (the “Program Administrator”).
WHEREAS, the Commission has heretofore issued its Multifamily Housing Revenue
Bonds, Series 1985B (Seascape Village Project) (the “Prior Bonds”), in order to provide
financing for a 208-unit multifamily rental project known as “Seascape Village” (the “Project”),
and has issued its Multifamily Housing Revenue Refunding Bonds, Series A of 1994 (Seascape
Village Project) to refund the Prior Bonds pursuant to an Indenture of Trust dated as of
September 1, 1994 (the “Indenture”) between the Commission and First Trust of California,
National Association, as trustee (the “Trustee”); and
WHEREAS, the Commission has entered into an Amended and Restated Regulatory
Agreement and Declaration of Restrictive Covenants dated as of September 1, 1994 (the “Regulatory Agreement”) with the Trustee and Seascape 1 Aoartments, Inc., an Illinois
corporation (the “Owner”), which agreement, among other things, sets forth certain restrictions applicable to the multifamily rental units financed, which restrictions are intended to assure
continuing compliance with the provisions of the Internal Revenue Code of 1954, as amended (the “1954 Code”); and
WHEREAS, the Program Administrator represents that it has the necessary experience and
expertise required to evaluate whether the Owner’s operation of the Project complies with the
restrictions contained in the Regulatory Agreement;
NOW, THEREFORE, in consideration of the premises and respective representations and
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 Definitions of Terms. All capital&d terms used in this Administration Agreement and not otherwise defined herein shall have the respective meanings given to them in the
Indenture and/or the Regulatory Agreement.
1.2 Article and Section Headings. The heading or titles of the several articles and
sections hereof shall be solely for the convenience of reference and shall not affect the meaning,
construction or effect of the provisions hereof.
1.3 Interuretation. The singular form of any word used herein, including terms defined
in the Indenture and/or the Regulatory Agreement, shall include the plural and vice versa, if
applicable. The use of a word of any gender shall include all genders, if applicable.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Reoresentations and Warranties of the Commission. The Commission makes the
following representations and warranties:
A. It is a public body corporate and politic, duly organized and existing under
the Constitution and laws of the State.
B. It has the power to enter into the transactions contemplated by this
Administration Agreement and to carry out its obligations hereunder and to consummate all
other transactions contemplated herein; and it has duly authorized the execution and delivery of this Administration Agreement.
2.2 Representations and Warranties of the Program Administrator. The Program
Administrator makes the following representations and warranties:
A. It is a national banking institution duly organized and validly existing under
the laws of the United States of America.
B. It has the power to execute and deliver this Administration Agreement and to carry out the transactions contemplated hereby; and it has duly authorized the execution,
delivery and performance of this Administration Agreement.
C. It is independent from and not under the domination of the Owner, does not
have any substantial interest, direct or indirect, in the Owner, and is not an officer or
employee of the Owner.
D. It has received copies of the Indenture, the Loan Agreement and the Regulatory Agreement, and it is familiar with the terms and conditions thereof as the same
relate to the Code, the Law and & Commission’s housing policy.
ARTICLE III
DUTIES AND COMPENSATION OF THE
PROGRAM ADMINISTRATOR
3.1 For and on behalf of the Commission, the Program Administrator will Duties. perform the following duties in a reasonably careful and timely manner:
PUBL: 18086-l (RED: 17676~2~TO:~17676~1)109 1 B2062.14 2
A. It will be familiar with and will give written notice to the Commission, the
Trustee and the Owner within five days of any change in:
1. The Median Income for the Area as determined by the Secretary of
the Treasury of the United States;
2. The maximum income at which households consisting of various
numbers of persons may be determined to be Lower Income Tenants or Very Low
Income Tenants under the terms of the Regulatory Agreement; and
3. The monthly rent which is determined to be the “Affordable Rent”
under the terms of the Regulatory Agreement.
B. Promptly following its receipt thereof, it will review the Income
Certifications, Certificates of Continuing Program Compliance, and all other reports and certificates furnished to it pursuant to the Regulatory Agreement in order to determine that
each such document is complete and to verify the internal accuracy of the calculations, and
conclusions with respect to such calculations, set forth therein, including the conclusion that at least 20% of the units in the Project are being occupied by or being held vacant and
available for occupancy by Lower-Income Tenants as specified by the terms of the
Regulatory Agreement; and it will maintain such documents on file and open to the
inspection by the Commission, the Trustee and the Owner during the term of the Regulatory Agreement. Each month during the Qualified Project Period, the Program
Administrator shall tile with the Commission, the Owner and the Trustee a report in the
form attached hereto as Exhibit A.
C. Promptly upon determining that any report or certificate or other document
submitted to it pursuant to the Regulatory Agreement demonstrates that the Project is not in
compliance with the Code or the Law, or is inaccurate or incomplete the Program
Administrator shall:
1. If the content of the report or inaccuracy or lack of completeness
does not cause the Project to cease to meet the qualifications set forth in Sections 3 and 4 of the Regulatory Agreement, immediatelv give writteq notice of such
noncompliance, inaccuracy or lack of completeness to the Owner and direct the
Owner to correct or complete the same, as the case may be, within a reasonable
period of time thereafter.
2. If the content of the report or the inaccuracy or lack of completeness
does cause the Project to cease to meet the qualifications set forth in Sections 3 and
4 of the Regulatory Agreement, immediately give written notice of said fact to the Commission, the Trustee and the Owner.
E. In the event that the Owner fails to file with the Program Administrator any
report, certification or other document required pursuant to the Regulatory 2 Agreement within the time set forth in the Regulatory Agreement, the Program
Administrator shall immediately give written notice of that fact to the Commission, the Trustee and the Owner.
3.2 Comoensation. For all services rendered pursuant hereto and all costs and expenses
incurred hereunder the Program Administrator shall be paid the fee described in Exhibit B
attached hereto. The fee of the Program Administrator shall be paid to the Program Administrator by the Owner. Neither the Commission nor the Trustee shall be liable to the
Program Administrator for any amounts owed to it by the Owner.
3.3 The Program Administrator agrees to indemnify and hold harmless the Indemnity. Commission and its officers, agents, and employees, from and against (i) any and all claims
arising from any act or omission of the Program Administrator in connection with the Program
Administrator’s duties under this Agreement, and (ii) all reasonable costs, counsel fees, expenses or liabilities incurred in connection with any such claim or proceeding brought thereon. In the event that any action or proceeding is brought against the Commission or any of its officers,
employees or agents, the Program Administrator, upon written notice from the indemnified party,
shall assume the investigation and defense thereof, including the employment of counsel selected
by the indemnified party to represent it and the payment of all expenses incurred by or on behalf of the indemnified party..
3.4 Beneficiaries. The Surety, the Commission and the Owner are beneficiaries of the
obligations of the Program Administrator under Section 3.1 hereof.
ARTICLE IV
TERM
4.1 Term of Agreement. Unless sooner terminated pursuant to the provisions of
Section 4.2 and 4.3 hereof, this Administration Agreement shall remain in full force and effect
for the term of the Regulatory Agreement.
4.2 Termination. In its sole discretion, the Commission may terminate this Administration Agreement upon giving the Program Administrator thirty days’ written notice of
its intention to do so.
4.3 Resignation of Proeram Administrator. The Program Administrator may resign from its position and terminate this Administration Agreement upon giving the Commission thirty
days’ written notice of its intention to do so, if the Commission shall fail to pay the Program
Administrator the compensation due the Program Administrator hereunder within the time
provided for herein and if such failure shall continue for said thirty day period.
ARTICLE V
MISCELLANEOUS PROVISIONS
5.1 Execution in Counterparts. This Administration Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and such counterparts
shall constitute but one and the same instrument.
PUB~:18086~1(~~D:17676~2~~0:~17676_1)109.14 4
5.2 Business Davs. If any action is required to be taken hereunder on a date which
falls on other than a Business Day, such action shall be taken on the next succeeding Business
Day.
5.3 Governing Law. This Administration Agreement shall be construed in accordance
with the laws of the State of California and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
5.4 Notices. All notices, certificates or other communications hereunder shall be
sufficiently given and shall be deemed given when delivered or mailed by certified mail, postage
prepaid, addressed to the appropriate Notice Address set forth in the Regulatory Agreement.
The Notice Address of the Program Administrator is:
First Trust of California, National Association
101 California Street, Suite 1150 San Francisco, CA 94111
Attention: Multifamily Housing Group
IN WITNESS WHEREOF, the parties hereto have caused this Administration Agreement
to be executed on their behalf by their duly author&d representatives, all as of the date
hereinabove written.
CARLSBAD HOUSING AND
REDEVELOPMENT COMMISSION
By:
Chairman
ATTEST:
Secretary
FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION
By:
Authorized Signatory
~~~~:18086~1(~~~:17676~2~T0:~17676~1)109~ B2062.14 6
EXHIBIT A
MONTHLY REPORT OF PROGRAM ADMINISTRATOR
The undersigned is serving as the Program Administrator for -1 SeascaDe Village (the
“Project”) and hereby certifies as follows:
1. As Program Administrator, we have reviewed all Income Certifications received from the Owner with respect to the Project during the past month and have determined that: (a)
the Owner has verified the income of each Lower-Income Tenant as required by Section 4(c) of
the Regulatory Agreement; and (b) based upon the information set forth in the Income Certifications, at least 20% of the units in the Project are currently occupied by Lower-Income
Tenants, including Very-Low Income Tenants, or are currently vacant and were last occupied by Lower-Income Tenants, including Very-Low Income Tenants.
2. The Owner has filed with us all reports and certifications required to be filed pursuant to the Regulatory Agreement within the time limits set forth therein.
3. Nothing has come to our attention which leads us to believe that the Owner is not,
as of the date of this Certificate, in compliance with all of the requirements of the Regulatory Agreement.
Dated:
EXHIBIT B
COMPENSATION OF PROGRAM ADMINISTRATOR
A. The Program Administrator shall be paid an annual fee of $5,500, with the first annual fee paid on September 2 13, 1994, and on each September 1 .lJ thereafter.
B. The Program Administrator shall be entitled to reasonable out-of-pocket expenses incurred or made pursuant to performing its duties under the Administration
Agreement (including the reasonable compensation and expenses and
disbursements of its in-house or outside counsel and of all persons not regularly in
its employ), except any such expenses, disbursement or advance as may arise from its 1 negligence or bad faith.
FWBL: 18086-l (RED: 17676~2~~0:~17676~1) 109 1 B2062.14 8