1981-04 t1065A DRM:ps 9/14/80
revised 9/17/80
revised 2/21/81
revised 3/10/81
SAN BERNARDINO COUNTY
STATE OF CALIFORNIA
RESOLUTION NO. CRA 81-04
A RESOLUTION OF THE COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF GRAND TERRACE AUTHOR-
IZING THE ISSUANCE OF RESIDENTIAL MORTGAGE
REVENUE BONDS , ISSUE OF 1981
WHEREAS , the Legislature of the State of California has
authorized redevelopment agencies to make long-term, low
interest loans through qualified mortgage lenders to finance
residential construction in redevelopment project areas in
order to encourage investment in and upgrading of such areas,
and to issue bonds for the purpose of financing such
construction; and
WHEREAS , all acts, conditions and things required by law to
exist, happen and be performed precedent to and in connection
with the issuance of said revenue bonds exist, have happened
and have been performed in regular and due time, form and
manner as required by law, and this Agency is now duly
empowered to issue said revenue bonds;
NOW, THEREFORE , IT IS HEREBY RESOLVED AS FOLLOWS :
ARTICLE I
STATEMENT OF AUTHORITY AND DEFINITIONS
101. Authority and Purpose. This Resolution is adopted
under authority and in accordance with the provisions of the
Act, for the purpose of facilitating the construction of high
quality, affordable single family residential dwelling units in
V the Grand Terrace Community Redevelopment Project Area and for
the purpose of establishing covenants, agreements and
procedures to assure that Revenues received from financing such
Mortgage Loans will be sufficient for the repayment of money
borrowed for this purpose, and that Revenues exceeding the
amounts needed for this purpose will be applied in accordance
with law for other programs authorized by the Act.
102. Resolution Constitutes Contract. In consideration of
the purchase and acceptance of any and all of the Bonds issued
hereunder by those who shall hold the same from time to time,
this Resolution shall be deemed to be and shall constitute a
contract among the Agency, the Trustee and the Holders of the
Bonds and the coupons appertaining thereto. The pledge made in
this Resolution and the provisions, covenants and agreements
herein set forth to be performed by or on behalf of the Agency
shall be for the equal benefit, protection and security of the
Holders of any and all of the Bonds and said coupons. All of
the Bonds and said coupons, without regard to the time or times
of their issuance or maturity, shall be of equal rank without
preference, priority or distinction of any of the Bonds or said
coupons over any other thereof, except as expressly provided in
or permitted by this Resolution.
103. Definitions. In this Resolution, unless a different
meaning_ clearly appears from the context, the following terms
have the following respective. meanings:
Accountant' s Certificate _ means an _. opinion signed by - an
independent certified public accountant or firm of..- certi-fied
public accountants (who may be the accountant or firm that
regularly audits the books and accounts of the Agency) from
time to time selected by the Agency.
Act means that part of the Law consisting of Chapter 8
(commencing with Section 33750 ) of Part 1 of Division 24 of the
Health and Safety Code of the State, amended as of the date of
adoption of this Resolution.
Agency .means the Community Redevelopment Agency of the City
of Grand Terrace, a public body, corporate and politic.
Asset Accumulation Fund means the Fund so designated which
is established and created by Section 501 .
Asset Coverage Test_ means a determination that the sum of
( i) the outstanding principal amount of Mortgage Loans
(excluding therefrom the outstanding principal amount of any
Mortgage Loan with respect to which any installment payment of
principal and interest is then more than ninety ( 90) days
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delinquent) and ( ii) all amounts held in the Mortgage Loan
Purchase Account, the Principal Fund, Sinking Fund, Debt
Service Reserve Fund, Mortgage Reserve Fund, and Asset
Accumulation Fund equals the sum of the principal amount of
Bonds then Outstanding plus an amount equal to $600 ,000 ;
provided, however, that Permitted Investments held in the Debt
Service Reserve Fund and the Mortgage Reserve Fund shall be
valued, for the purpose of determining the amounts held
therein, at the lower of cost or par amount thereof, exclusive
of accrued interest.
Asset Coverage Test Certificate means an Accountant' s
Certificate setting forth as of the date thereof or as of the
date not more than 15 days prior to the date thereof ( i) the
outstanding principal amount of all Mortgage Loans (excluding
therefrom the outstanding principal amount of any Mortgage Loan
with respect to which any installment payment of principal and
interest is then more than ninety ( 90) days delinquent) , ( ii)
all amounts held in the Mortgage Loan Purchase Account, the
Principal Fund, Sinking Fund, Debt Service Reserve Fund,
Mortgage Reserve Fund, and Asset Accumulation Fund (valued in
the case of Permitted- Investments held in such funds at the
lower of either actual cost or fair market value thereof and
( iii) the then Outstanding principal amount of Bonds and
stating whether the Asset Coverage Test has been met and, if
the Asset Coverage Test has been met, further setting forth
( iv) the amount which may be made available to the Agency for
any lawful purpose free of the lien of the Resolution, on the
_ next succeeding Interest Payment Date.
Authorized Newspapers ... means a financial paper, .-.or- - a
newspaper of general circulation in the City of Los Angeles,
California, and The Daily Bond Buyer or other financial-
newspaper circulated in the New York, New York, each of which
is published at least once a day for at least five ( 5) days
(other than legal holidays) in each calendar week, and is
printed in the English language.
Authorized Officer means the Chairman, Secretary or
Executive Director of the Agency or any other person authorized
by resolution of the Agency to perform the act or sign the
document in question.
Bond or Bonds means any Bond or Bonds, as the case may be,
authorized and issued under this Resolution.
Bondholder or Holder or Holders of Bonds_..pr any similar
term, when used with respect to Bonds, means any person who
shall be the bearer of any Outstanding Coupon Bond or Bonds or
the registered owner of any Outstanding Bond or Bonds which
shall at the time be registered other than to bearer; Holder,
when used with respect to coupons, means any person who is .a
bearer of any . such coupons.
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Bond Purchase Contract means the Purchase Contract, dated
March 17 , 1981 , by and between the Agency and the purchasers of
the Bonds, Miller & Schroeder Municipals, Inc. , wherein the
Agency agrees to sell and the purchasers agree to purchase the
Bonds.
Bond Register means the books kept hereunder by the Trustee
for registration and transfer of the Bonds.
Bond Year means the twelve (12) month period commencing on
March 1, 1981 and on each March 1 thereafter.
Certificate of Projected Pledged Revenues means an
Officer' s Certificate showing as of any particular date:
(1 ) for the current and each future Bond Year the
scheduled or estimated amount of Pledged Revenues to be
received in each such Bond Year and the Debt Service for
each such Bond Year with respect to all bonds to be
Outstanding immediately after the issuance of the
Certificate;
( 2) in each such Bond Year, the difference between
( i) the Debt Service referred to in (1) above, and ( ii) the
Pledged Revenues referred to in (1 ) above;
( 3 ) that ( i ) such scheduled and estimated. Pledged
Revenues and any other revenues, investment income or funds
reasonably estimated by the Agency to be available for the
payment of such Debt- Service referred to in ( 1) above are -
in each such Bond Year in excess . of such Debt. Service for
each such Bond Year, and ( ii) the remaining balance of such
scheduled and estimated Pledged Revenues and other
revenues, investment income or other funds available to pay
budgeted or estimated Operating Costs in each such Bond
Year will be sufficient to pay budgeted or estimated
Operating Costs ' for each such Bond Year, the payment of
which is not otherwise provided for; and,
( 4 ) if applicable, a schedule of Permitted
Investments purchased or to be purchased by or on behalf of
the Agency for investment of moneys in the Debt Service
Reserve Fund.
City means the City of Grand Terrace, California, or any
body, authority, agency, or other entity which shall hereafter
succeed to the powers, duties and functions of the City.
Commitment Contract means the Commitment Contract by and
among the Agency, the Qualified Mortgage Lender,- the ' Trustee,
and each developer of each Project whereby the Agency commits
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funds to purchase and the developer and Qualified Mortgage
` Lender agree to provide Mortgage Loans for purchase by the
Trustee on behalf of the Agency.
Costs of Issuance means items of expense payable or
reimbursable directly or indirectly by the Agency and related
to the authorization, sale and issuance of Bonds, which items
of expense shall include, but not be limited to, printing
costs, costs of reproducing and binding documents, filing and
recording fees, initial fees and charges of the Trustee,
Special Hazard Insurance premiums, Bond discounts, legal fees
and charges, professional consultants ' fees, bond rating fees,
costs of credit ratings, fees and charges for execution,
transportation and safekeeping of Bonds, and other costs,
charges and fees in connection with the foregoing.
Counsel ' s Opinion means an opinion signed by any attorney
or firm of attorneys (who may be the Agency counsel or an
attorney or firm of attorneys retained by the Agency in other
connections) selected by the Agency, and licensed to practice
in the state in which said attorney or firm maintains an office.
County Recorder means the County Recorder of the County of
San Bernardino, California.
Coupon Bond means a Bond other than a Registered-, Bond.
Debt Service means the sums obtained for any Bond Year
after the computation is made_ by totaling the .following for
each such Bond Year:
( 1.) The Principal Installment or Sinking Fund
Installment payable in such Bond Year; and
( 2) The Interest Requirement accruing in such Bond
Year on the aggregate principal amount of Bonds which would
be Outstanding in such Bond Year if the Bonds Outstanding
on the date of such computation were to mature or be
redeemed in accordance with the schedule of Sinking Fund
Installments for Outstanding Term Bonds.
At the time and for the purpose of making such computation,
the amount of Term Bonds already retired in advance of the
above mentioned schedule or schedules shall be deducted from
the remaining amounts thereof in accordance with the reduction
in Sinking Fund Installments made pursuant to Section 401
hereof.
Debt Service Reserve Fund means the Fund so designated
which is established and created by Section 501.
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Debt Service Reserve Requirement means, with respect to any
Bonds Outstanding, an amount equal to the Maximum Annual Debt
Service (rounded to the next highest integral multiple of
$5 ,000) scheduled to- be paid on the Bonds, determined as of . the
next proceeding Interest Payment Date.
Defaulted Mortgage Loan means any Mortgage Loan described
in an Officer's Certificate and stated to be in default in
accordance with its terms or any Mortgage Loan not so described
in an Officer's Certificate on which payments are sixty ( 60)
days or more in arrears or in arrears for such other period as
shall constitute a default as provided in the regulations of
the Mortgage Insurer or the terms of the policy of Mortgage
Insurance applicable to such Mortgage Loan.
Escrow Account means an account held by a Servicer or by
the Agency for the making of Escrow Payments pursuant to
Section 610 .
Escrow Payments means all payments made in order to obtain
or maintain Mortgage Insurance, including payments for any
federal program intended to assist in providing Mortgage
Insurance for Mortgage Loans, and Hazard Insurance and any
payments required to be made with respect to Mortgage Loans for
taxes or other governmental charges or other similar charges to
a Mortgagor customarily required to be escrowed.'
Fair Market Value means, with respect to a Residence, the
lower of ( i) the value of the Residence as determined by a
qualified appraiser acceptable to the Agency, or- ( ii ) the sale
price of the Residence.
Federal Securities means United States Treasury notes,
bonds, bills or certificates of indebtedness or those for which
the full faith and credit of the United States are pledged for
the payment of principal and interest, and which are not
redeemable in advance of their maturity at the option of the
issuer or any other person (other than the holder thereof)
including United States Treasury (book entry) certificates,
notes and bonds, state and local government series.
FHLMC means the Federal Home Loan Mortgage Corporation or
other agency or instrumentality of the United States to which
the powers of the Federal Home Loan Mortgage Corporation have
been transferred.
Financing means the lending of moneys or any other thing of
value for the purpose of facilitating Residential Construction
pursuant to the Act and includes the making of Mortgage Loans
to purchasers of newly constructed Residences and the purchase,
servicing and selling of Mortgage Loans.
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Fiscal Year means any twelve ( 12) consecutive calendar
months commencing with the first day of July and ending on the
last day of the following June.
FNMA means the Federal National Mortgage Association or
other agency or instrumentality of the United States to which
the powers of the Federal National Mortgage Association have
been transferred.
Fund or Account means a Fund or Account created by or
pursuant to this Resolution.
Hazard Insurance means insurance, issued by a person
qualified to issue such insurance in the State, which provides
coverage at least equal to the following: ( i) that provided by
a dwelling building special form all risk policy which insures
the Residence from loss in an amount at least equal to either
the outstanding principal amount of the Mortgage Loan or 80% of
the insurable value based upon the replacement cost of the
Residence, whichever is larger, and includes an inflation guard
endorsement; and . '( ii) coverage insuring against risk of loss
due to earthquake (which shall be thereafter maintained if such
coverage is commercially available) in an amount equal to at
least 100% of the outstanding principal balance of the Mortgage
Loan, subject to a 5% deductible per occurrence. Hazard
Insurance shall be carried and paid for by the Mortgagor.
Independent when used with terms defining any professional,
means any person or firm, respectively, appointed by the Agency
in such capacity, and who, or each of whom, has a favorable
reputation in the field in which his opinion or certificate
will be given, , and;
( 1 ) is in fact independent and not under domination
of the Agency; and
( 2) is not connected with the Agency as an officer or
employee of the Agency, but who may be regularly retained
to make reports to the Agency.
Interest Fund means the Fund so designated which is
established and created by Section 501.
Interest Payment Date means each date on which interest on
any Bonds is required to be paid by this Resolution.
Interest Requirement means, as of any particular date of
calculation, the amount equal to any unpaid interest then due,
plus an amount which will on the next succeeding Interest
Payment Date be equal to the interest to become due on the
Bonds on such next succeeding Interest Payment Date.
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Issuance Expense Account 'means the Account so designated
which is established and created by Section 501.
Issue Date means the date of the Coupon Bonds specified and
determined in accordance with Article II, except as otherwise
provided in Section 304 in the case of Registered Bonds.
Law means the Community Redevelopment Law (Part I ,
commencing with section 33000 , of Division 24 of the Health and
Safety Code of the State) , amended as of the date of adoption
of this Resolution.
Maximum Annual Debt Service means the largest amount of
Debt Service for the total principal amount of the Bonds.
Mortgage means a deed of trust or other instrument which
constitutes a first deed of trust and lien in the State on real
property and improvements thereon, together with a promissory
note, the holder of which is either the Agency, the Trustee or
a Mortgage Lender, where the debt is secured by real property
located as required in the Act and improved or to be improved
by a Residence.
Mortgage Insurance means an insurance policy or a guaranty
issued by a Mortgage -Insurer, insuring or guaranteeing, in
whole or in part, the principal of and interest payments on a
Mortgage Loan.
Mortgage Insurer means any person, approved- by the Agency,
licensed to insure mortgages in the State and qualified to.
provide insurance or a guaranty on mortgages purchased by FNMA
or FHLMC.
Mortgage Insurance Proceeds means the proceeds of Mortgage
Insurance.
Mortgage Loan means an interest-bearing obligation made for
the purpose of financing the construction of Residences and
secured by a Mortgage, the payment of which is insured by
Mortgage Insurance.
Mortgage Loan Purchase Account means the Account so
,designated which is established and created by Section 501.
Mortgage Loan Purchase Agreement means an agreement by and
among the Agency, the Trustee and a Qualified Mortgage Lender
for the purchase of Mortgage Loans pursuant to subsection (C)
of Section 504 .
Mortgage Reserve Fund means the Fund so designated which is
established and created by Section 501.
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Mortgage Reserve Requirement means an amount equal to two
percent ( 2%) of the aggregate unpaid principal amount of the
outstanding Mortgage Loans held by the Trustee at the time of
- the calculation.
Mortgagor means the obligor under a Mortgage Loan who
qualifies as a Participating Party under the Act.
Officer' s Certificate means a certificate of the Agency
signed by an Authorized Officer and filed with the Trustee.
Operating Expenses means the Agency' s expenses of carrying
out and administering the Residential Mortgage Financing
Program, and shall include, without limiting the generality of
the foregoing: administrative expenses, legal, accounting and
consultants' services and expenses, fees and expenses of the
Trustee and any Paying Agent, Agency payments to pension,
retirement, health and hospitalization funds, insurance costs,
including the cost of Special Hazard Insurance, and any other
expenses required or permitted to be paid by the Agency under
the provisions of the Act or this Resolution or any lawful
authority.
Operating Fund means the fund so designated which is
established and created by Section 501.
Outstanding, when used with reference to Bonds and as of
any particular date, describes all Bonds theretofore and
thereupon being delivered except ( i) any Bond cancelled by the
Trustee or any Paying Agent, at or before said -date; ( ii) any
Bond for the payment or redemption of.. which- either (a) moneys,
equal to the principal amount or Redemption Price thereof, as
the case may be, with interest to the date of maturity or
redemption date, or (b) Federal Securities or moneys as
described and required under the provisions of subsection (B)
of Section 1401, shall have theretofore been deposited with the
Trustee in trust (whether upon or prior to maturity or the
Redemption Date of such Bond) and except in the case of a Bond
to be paid at maturity, of which notices of redemption shall
have been given or provided for in accordance with Article IV;
and ( iii) any Bond in lieu of or in substitution for which
another Bond shall have been delivered pursuant to Sections
307, 310, 312, 313 , 405 and 1106.
Participating Party means any person, company, corporation,
partnership, firm or other entity or group of entities
requiring Financing for Residential Construction pursuant to
the provisions of the Act. No elective officer of the State or
any of its political subdivisions or employee of any
redevelopment agency shall be eligible to be a Participating
Party.
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Paying Agent means each bank or trust company or national
banking association appointed pursuant to Section .802 to act as
agent of the Agency for the purpose of paying Sinking Fund and
Interest Installments on the Bonds, and each successor or
successors, and any other bank or trust company or national
banking association at any time substituted in its place
pursuant to this Resolution.
Permitted Encumbrances, when used with respect to Mortgage
Loans, means those liens, covenants, conditions, restrictions,
easements, encroachments or rights which are customarily waived
or accepted by prudent lending institutions and the existence
of which will not prevent the conveyance of good title to a
mortgaged Residence if a claim for Mortgage Insurance benefits
with respect thereto shall thereafter be made by the Trustee or
a Servicer on behalf of the Agency, and shall include those
liens and encumbrances set forth in Section 3 .102(c) of the
Sellers' Guide.
Permitted Igvestments means any of the following which at
the time are legal investments for the Agency under the laws of
the State, and to the extent provided by law, for the moneys
held hereunder then proposed to be invested therein: ( i) time
or demand deposits in, or other banking arrangements with, any
bank or trust company having aggregate capital - and surplus of
at least $50,000 ,000 and authorized. to accept deposits of
public funds ( including the banking department of the Trustee) ,
which are secured, to the extent required by law, at all. times
by bond-s or other obligations which are authorized by law as
security for public deposits, of a market value at least equal
to the amount required by law; ( ii) any securities or
obligations of a bank holding company, the principal banking
subsidiary of which has aggregate capital and surplus of at
least $50 ,000 ,000 or obligations, participations, or other
instruments of, or issued by a privately or publicly held
corporation which obligations, participations or other
instruments are fully secured or guaranteed by a line-
of-credit, letter-of-credit or other security instrument issued
by any bank or trust company having aggregate capital and
surplus of at least $50,000 ,000 ; ( iii) United States Treasury
notes, bonds, bills or certificates of indebtedness, or
obligations for which the full faith and credit of the United
States are pledged for the payment of principal and interest;
( iv) obligations, participations, or other instruments of, or
issued by, or fully guaranteed as to principal and interest by,
FNMA, or issued by a federal agency -or a United States
Government sponsored enterprise, or (v) repurchase agreement
secured by any of the above.
Pledged Revenues means Revenues.
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Prepayment means any amount received or recovered which
reduces or eliminates the principal amount of any Mortgage Loan
other than scheduled amortization payments of the principal
amount of any Mortgage Loan, including any prepayment penalty,
fee, premium or other such additional charge, less the amount
retained by any Servicer of such Mortgage Loan, as additional
compensation on account of such prepayment.
Principal Office, when used with respect to the Trustee or
any Paying Agent, means the principal or corporate trust or
head or principal trust office of such Trustee or Paying Agent
situated in the city in which such trustee or Paying Agent is
described as being located.
Principal Recovery means Revenues received representing the
recovery of principal of a Mortgage Loan, including regularly
scheduled repayments, prepayments, insurance proceeds and
amounts received through foreclosure or otherwise.
Prior Redemption Fund means the Fund so designated which is
established and created by Section 501.
Private Mortgage . Insurance or Mortgage Insurance means
insurance issued by a Mortgage Insurer under which the Mortgage
Insurer, upon foreclosure or other recovery proceedings and
conveyance of a marketable title to the mortgaged property,
must pay a claim including unpaid principal, accrued interest
and expenses of foreclosure or other recovery proceedings or in
lieu thereof may permit the mortgagee or - its assignee to .retain
title and may pay an agreed percentage of the claim. In order
to qualify as Private Mortgage Insurance, the amount thereof
must be at least equal to the percentage of the initial
principal amount of the Mortgage Loan shown on the following
schedule:
Ratio of Mortgage Loan
To Fair Market Value Insurance Coverage
In excess of 90% through 95% 40%
In excess of 85% through 90% 35%
In excess of 80% through 85% 30%
In excess of 75% through 80% 25%
In excess of 70% through 75% 20%
In excess of 60% through 70% 15%
60% and under 5%
Project means the Residential Construction project or
projects financed directly or indirectly with the proceeds of
the Bonds, for which an Owner Participation Agreement and a
Commitment Contract have been approved and executed.
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Purchase Documents or Program Documents means the Mortgage
Loan Purchase Agreement, the Sellers ' Guide, the Commitment
Contract, the Mortgage Loan Application Package and such
additional information submitted by the Agency and Seller to
the Trustee.
Qualified Mortgage Lender means any state or national bank
or trust company, savings and loan association, or mortgage
banker authorized to acquire, hold- and deal in mortgages and
approved by the FHA as a mortgagee of mortgages insured or
guaranteed by the FHA or the VA and approved by the FNMA or
FHLMC as a seller/servicer of mortgages. Such Qualified
Mortgage Lender shall have a principal office and place of
business in the State, shall be authorized to do business in
the State, shall be authorized by the . Agency to do business
with the Agency and to aid in Financing pursuant to the Act on
behalf of the Agency.
Redemption Date means the Interest Payment Date upon which
Bonds are called for redemption to maturity to be presented for
such redemption and for payment of the Redemption Price.
Redemption Price means, with respect to any Bond or portion
thereof, the principal amount of such Bond or portion thereof,
plus the applicable premium, if any, payable upon redemption
thereof.
Redevelopment Plan means the Redevelopment Plan for the
Grand Terrace Community Redevelopment Project Area adopted and
approved by the City Council of the City by Ordinance No. 25 on
September 27, 1979, as amended.
Redevelopment Project Area means the Grand Terrace
Community Redevelopment Project Area.
Registered Bond or Fully Registered Bond means a Bond
registered as to principal and interest and payable to the
registered owner.
Requisition means an order directing the Trustee or a
Mortgage Lender to pay money from one of the Funds or Accounts
established herein, duly executed by an Authorized Officer.
Residence means real property improved with a residential
structure and located in one of the Projects, the financing of
which is or may hereafter be permitted under the Act.
Residence includes condominium dwelling units, and both real
property improved with single-family residential structures and
real property improved with multiple-family residential
structures.
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Residential Construction means the construction of new
Residences meeting requirements of local codes and the
Redevelopment Plan.
Residential Mortgage Financing Program means and includes
any act or thing done by the Agency, the Trustee, and any
Qualified Mortgage Lender under the Resolution for the purposes
of alleviating the shortage of, reducing the cost of, and
encouraging and assisting Residential Construction by providing
Financing for Residential Construction through the making of
commitments to purchase, and the purchasing, servicing and
selling of Mortgage Loans, provided the Mortgage Loans shall
have been purchased and the proceeds from such Mortgage Loans
shall continue to be used solely for the Financing of
Residential Construction.
Resolution means this Resolution, as from time to time
amended or supplemented by Supplemental Resolutions in
.accordance with the terms hereof.
Revenue Fund means the Fund so designated which is
established and created by Section 501.
Revenues means all payments, proceeds, charges , rents and
all interest and other income derived in cash by the Trustee or
a Servicer by or for the account of the Agency from or related
to the Residential Mortgage Financing Program, including,
without limiting the generality of the foregoing, scheduled
V amortization payments of principal of and interest .on Mortgage
Loans, Prepayments, the proceeds. of sale of Mortgage Loans, the
proceeds of sale of Residences on foreclosure of. or other.
recovery proceedings with respect to Defaulted Mortgage Loans
(net of amounts required to be paid to Mortgagors or other.
owners of Residences) , the proceeds of Hazard Insurance and
Special Hazard Insurance (net of the amount applied to restore
a mortgaged Residence) and interest earned or income derived
from the investment or deposit of moneys held by the Trustee,
Mortgage Insurance Proceeds and fees paid by Developers and
deposited with the Trustee pursuant to a Commitment, Contract
but not including Escrow Payments, servicers ' and financing
fees.
Rules and Regulations means those rules and regulations
adopted by the Agency in connection with its Residential
Mortgage Financing Program.
Sellers' Guide means the Sellers' Guide which governs the
sale of Mortgages to the Agency.
Servicer means any Qualified Mortgage Lender who shall
agree,- by entering into a Servicing Agreement with the Agency
and the Trustee, to service Mortgage Loans.
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a
Servicers' Guidp means the Servicers' Guide for the
servicing of Mortgages for the Agency.
Servicing agreement means a contractual agreement by and
among the Agency, the Trustee and a Servicer for the servicing
of Mortgage Loans by the Servicer, and includes the Servicers'
Guide.
Sinking Fugd means the Fund so designated which is
established and created by Section 501.
Sinking Fund Installment means, with respect to any
particular Sinking Fund Installment Date, the amount of money
required by or pursuant to this Resolution to be paid by the
Agency on such date toward the retirement of the Term Bonds
prior to their respective stated maturities.
Sinking Fund Installment Date means the date on which
Sinking Fund Installments are required to be paid pursuant to
this Resolution.
Special Hazard Insurance means insurance which shall
protect from losses on Residences caused by hazards, such as
flood, mudslide, building collapse (to a limited extent) and
earthquake not covered by Hazard Insurance, and losses
resulting from the application of a coinsurance clause in the
Hazard Insurance policies. Such Special, Hazard Insurance shall
be carried by the Agency, with the premiums payable from the
Operating Fund, ( except for the first annual premium which
shall be paid from the Issuance Expense Account) and shall
cover each Resid-ence and shall be in an amount at least equal_
to one percent (1% ) of the original principal amount of all
Mortgage Loans purchased by the Agency or twice the original
principal amount of the largest Mortgage Loan, whichever is
greater.
State means the State of California.
Supplemental Resolution means a resolution supplemental to
or amendatory of this Resolution duly adopted by the Agency in
accordance with Article X.
Term Bonds means Bonds so designated in this Resolution.
Trustee means Security Pacific National Bank and its
successor or successors and any other bank or trust company or
national banking association at any time substituted in its
place pursuant to this Resolution.
VA means the Veterans Administration or other agency or
instrumentality of the United States to which the powers of the
Veterans Administration have been transferred.
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Words of the masculine gender include the feminine and
neuter genders. Words importing the singular number include
the plural number and vice versa.
Words importing persons shall include corporations and
associations, including public bodies , as well as natural
persons.
The terms "hereby", "hereof" "hereto" "herein"
i r r
"hereunder" , and any similar terms, as used in this Resolution,
refer to this Resolution.
103. Security and Nature of Bonds. The Bonds shall be and
are special obligations of the Agency and, subject to the right
of the Agency to apply moneys as herein provided, are hereby
secured as provided in Section 601 hereof by an irrevocable
pledge of the Mortgage Loans and Pledged Revenues, and Funds
and Accounts held by the Trustee and are payable as to
principal, Redemption Price, if any, and interest from the
Pledged Revenues of the Agency. The Bonds are not a debt of
the City, the State or any of its political subdivisions, and
neither the City, the State, nor any of its political
subdivisions is liable thereon, nor in any event shall the
Bonds be payable out of the funds or properties other than all
or any part of the Pledged Revenues, Mortgage Loans, and Funds
and Accounts as in this Resolution set forth. The Bonds do not
constitute an indebtedness within the meaning of any
constitutional or statutory debt limitation or restriction. '
Neither the Members of. the Agency nor any persons executing the
Bonds shall be liable personally on ,the Bonds or subject. to any .
personal liability or accountability by reason of the issuance
thereof.
The Bonds shall be and are equally secured by an
irrevocable pledge of the Mortgage Loans, Pledged Revenues and
Funds- and Accounts as herein provided, without priority for
number, date of sale, date of execution, or date of delivery,
except as expressly provided herein.
The validity of the Bonds is not and shall not be dependent
upon the performance of anyone of his obligation relative to
the Residential Mortgage Financing Program.
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ARTICLE II
AUTHORIZATION AND ISSUANCE OF BONDS
201. Authorization of Bonds. In order to provide funds for
the Financing of the Project, Bonds of the Agency to be known
and designated as "Community Redevelopment Agency of the City
of Grand Terrace Residential Mortgage Revenue Bonds, Issue of
1981 " are hereby authorized to be issued in the aggregate
principal amount of $30 ,000 ,000.
202. Purposes. The purposes for which the Bonds are being
issued are ( i) to pay the Costs of Issuance of the Bonds, ( ii)
to pay into the Debt Service Reserve Fund the amount required
to be , paid therein in order to establish the Debt Service
Reserve Fund in an amount not less than the Debt Service
Reserve Requirement, ( iii) to pay into the Mortgage Reserve
Fund the amount required to be paid therein in order to
establish the Mortgage Reserve Fund in an amount equal to a
portion of the Mortgage Reserve Requirement which amount shall
be set forth in a Certificate of an Authorized Officer, and
( iv) to provide funds with which to purchase Mortgage Loans to
provide Financing for the Projects, all to the extent and in
the manner provided in Article V of this Resolution.
203 . Date and Maturities. The Issue Date of the Bonds
shall be March 1, 1981 . $ 1 ,625,000 aggregate principal amount
of the Bonds shall mature serially on March 1 of years, and in
the amount and shall bear interest at the rate or rates set..
forth in the following table:
Maturity Date Amount Interest Rate
1984 $145 ,000 %
1985 160 ,000
1986 175,000
1987 190,000
1988 205 ,000
1989 225 ,000
1990 250 ,000
1991 275 ,000
$25 , 195 ,000 aggregate principal amount of the Bonds shall
be Term Bonds. $3 ,575,000 of the Term Bonds shall mature on
March 1 , 1999 .and shall bear interest at the rate of eleven
percent ( 11 % ) per annum and $21 ,620 ,000 of the Term Bonds shall
mature on March 1 , 2014 and shall bear interest at the rate of
eleven and one-half percent ( 11 . 50% ) per annum. $3, 180 ,000
aggregate principal amount of the Bonds shall mature on March
1 , 2014 and shall bear interest at the rate of eleven and
one-half percent ( 11 .50%) per annum.
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204. Interest Payments. The Interest Payment Dates of the
Bonds shall be March 1 and September 1 of each year, commencing
March 1 , 1982. Registered Bonds shall bear interest from their
date payable on and after March 1 , 1982 on March 1 and
September 1 of each year.
205. Denominations, Numbers and Letters. The Bonds shall
be issued in the denomination of $5,000 each in the case of
Coupon Bonds, and in the denomination of $5,000, or an integral
multiple thereof not exceeding the aggregate principal amount
of Bonds maturing in the year of maturity of the Registered
Bond for which the denomination is to be specified, in the case
of Registered Bonds. The Coupon Bonds shall be numbered from
one (1) consecutively upwards in order of maturity and the
Registered Bonds shall be lettered and numbered from (R1)
consecutively upwards in order of issuance.
"CUSIP" identification numbers shall be imprinted on the
Bonds, but such numbers shall not constitute a part of the
contract evidenced by the Bonds and any error or omission with
respect thereto shall not constitute cause for refusal of any
purchaser to accept delivery of and pay for the Bonds. In
addition, failure on the part of the Agency to use such CUSIP
numbers in any notice to Holders of the Bonds shall not
constitute an event of default nor a violation of the Agency' s
contract with such Holders.
206. Place of Payment. Bankers Trust Company, New York,
New York and Harris Trust and Savings Bank, Chicago Illinois
Security Pacific National Bank, Los Angeles, California are
hereby appointed as Paying Agents. Principal and Redemption
Price of and interest on Coupon Bonds are payable at the
corporate trust office of the Trustee in Los Angeles,.
California, or at the option of the Holder, at the office of
any Paying Agent. The Redemption Price of, and interest on,
the Registered Bonds shall be payable only at the Principal
Office of the Trustee, in Los Angeles, California. Interest on
Registered Bonds is payable by check or draft mailed to the
registered owner. -
207. Conditions Precedent to Delivery of Bonds. Except, as
provided in Sections 307 , 310 , 312 , 318 , 405 and 1106 , the
Trustee shall authenticate and deliver to the purchasers
thereof the Bonds authorized to be issued pursuant to this
Resolution but only upon receipt of the following:
(1) A copy of this Resolution and all Supplemental
Resolutions each certified by an Authorized Officer;
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( 2) A Counsel ' s Opinion stating ( i) that in the
opinion of such counsel the Resolution and all Supplemental
Resolutions authorizing the Bonds have been duly adopted by
the Agency; - ( ii) that the Resolution is valid and binding
upon the Agency and enforceable in accordance with its
terms; ( idi) that the Resolution creates a valid pledge of
that which the Resolution purports to pledge, subject to
the provisions of the Resolution, ( such opinion may be
qualified to the extent that the enforceability of the
Resolution may be limited by bankruptcy, insolvency and
other laws affecting the rights of creditors generally) ;
( iv) that the Trustee is duly authorized by the Agency to
authenticate and deliver Bonds as identified and described
in the Resolution and in said Counsel ' s Opinion; and that
the principal amount of Bonds issued will not exceed any
debt limit or other limitation prescribed by law;
( 3) An Officer's Certificate directing the Trustee to
authenticate and deliver Bonds as authorized, stating that,
as of the date of deliverys of the Bonds, the Agency is not
in default under this Resolution and setting forth the
amounts to be deposited in the various Funds and Accounts;
and
( 4) A Certificate of Projected Pledged Revenues,
giving effect to the issuance of Bonds, together with an
Accountant' s Certificate containing a verification of the
arithmetical computations, and demonstrations set forth in
the Certificate of Projected Pledged Revenues..
208 . Sale of Bonds. The Bonds authorized to be issued
herein shall be sold to the purchasers on the terms and
conditions set forth in the Bond Purchase Contract in
substantially the form this date presented to the Agency which
is hereby approved and upon the basis of the representations
herein set forth. The Chairman and the Secretary are hereby
authorized to execute the Bond Purchase Contract evidencing the
acceptance thereof by the Agency at or prior to the date of
delivery of the Bonds, and to approve and insert into this
Resolution and the Bonds the maturities and interest rates
which the Bonds will bear and the price at which said Bonds
shall be sold and to make such other insertions, deletions or
modifications as may- be necessary to ensure prompt delivery of
the Bonds all as approved by Bond Counsel.
209 . Delivery of Bonds. The Bonds shall be delivered to
the purchasers named in the Bond Purchase Contract, upon
compliance with the provisions of Section 207 of this
Resolution, at such time and place as shall be determined by
the Executive Director of the Agency, subject to the provisions
of the Bond Purchase Contract.
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210 . Authority to Consummate Transaction. The Chairman of
the Agency, the Secretary, the Executive Director and other
proper officers of the Agency are hereby authorized and
directed to execute and deliver any and all papers and
instruments and to do and cause to be done any and all acts and
things necessary or proper for carrying out the transactions
contemplated by this Resolution.
ARTICLE III
GENERAL TERMS AND PROVISIONS OF BONDS
301. Date of Bonds. Each Bond shall be dated as of, and
bear interest from, its Issue Date except as otherwise provided
in Section 304 in the case of Registered Bonds.
302 . Interest Payment Dates. Interest on each Bond shall
be payable semiannually on each March 1 and September 1
beginning March 1 , 1982.
303. Principal and Sinking Fund Installment Date. The date
when each Principal Installment Sinking Fund Installment with
respect to a Bond is payable shall be the date provided in
Section 401 (D) hereof.
304. Medium of Payment; Form and Date.
(A) The Bonds shall be payable, with respect to
interest, principal and Redemption Price, in lawful money of
the United States of America which at the time of payment is
legal tender for the payment of public and private debts.
(B) The Bonds shall be issued in the form of Coupon
Bonds. or in the form of Registered Bonds without coupons, or in
both such forms as set forth in Article XV hereof.
(C) Coupon Bonds shall be dated as of the Issue Date
and shall bear interest from their Issue Date, payable in
accordance with, and upon surrender of, the appurtenant
interest coupons as they severally mature. Registered Bonds
issued prior to the first Interest Payment Date thereof shall
,be dated as of the Issue Date. Registered Bonds issued on or
subsequent to the first Interest Payment Date thereof shall be
dated as of the date six months preceding the Interest Payment
Date next following the date of delivery thereof, unless such
date of delivery shall be an Interest Payment Date, in which
case they shall be dated as of such date of delivery; provided,
however, that if, as shown by the records of the Trustee,
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interest on the Bonds shall be in default, the Registered Bonds
issued in lieu of Bonds surrendered for transfer or exchange
shall be dated as of the date to which interest has been paid
in full on the Bonds surrendered. Registered Bonds shall bear
interest from their date.
305. Legends.. The. Bonds may contain or have endorsed
thereon such provisions, specifications and descriptive words
not inconsistent with the provisions of this Resolution as may
be necessary or desirable to comply with custom, or otherwise,
as may be determined by the Agency prior to the delivery
thereof.
306. Execution and Authentication.
(A) The Bonds shall be executed in the name of the
Agency by the manual or facsimile signature of its Chairman or
Vice Chairman and its corporate seal (or a facsimile thereof)
shall be thereunto affixed, imprinted, engraved or otherwise
reproduced, and attested by the manual or facsimile signature
of the Secretary. In case any one or more of the officers who
shall have signed or sealed any of the Bonds shall cease to be
such officer before the Bonds so signed and sealed shall have
been actually delivered , such Bonds may, nevertheless, be
delivered as herein provided, and may be issued as. if the
persons who signed or sealed such Bonds had not ceased to hold.
such offices. Any Bond may be signed and sealed on behalf of
the Agency by such persons as at the actual time of the
execution of such Bond shall be duly authorized or hold the
proper office in the Agency, although .at the Issue Date of the
Bonds such persons may not have been so authorized or have held
such office.
(B) The coupons to ' be attached to the Coupon Bonds
shall be signed by the facsimile signature of its Secretary or
in such other manner as may be required by law and the Agency
may adopt and use for that. purpose the facsimile signature of
any person or persons who shall have been Secretary of the
Agency - at any time on or after the date of adoption of the
Resolution notwithstanding that such person may not have been
such Secretary at the date of any such Bond or may have ceased
to be such Secretary at the time when any such Bond shall be
actually delivered.
(C) Only Bonds authenticated by the endorsement
thereon of a certificate substantially in the form hereinafter
set forth and executed by an Authorized Officer of the Trustee
shall be valid and become obligatory for any purpose under, be
secured by, and be entitled to the benefits of., this
Resolution; and every such certificate of the Trustee upon any
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Bond purporting to be secured hereby shall be conclusive
evidence that the Bond so authenticated has been duly issued
hereunder, and that the Holder is entitled to the benefits of
this Resolution and to the benefit of the trust hereby
created. Before authenticating and delivering any Coupon Bond
hereunder, the Trustee shall remove and cancel any coupons
thereon . then matured except coupons in default.
307. Interchangeability of Bonds. Coupon Bonds, upon
surrender thereof at the Principal Office of the Trustee with
all unmatured coupons attached (together with any matured
coupons in default appertaining thereto) , may, at the option of
the Holder thereof, be exchanged for an equal aggregate
principal amount of Registered Bonds of the same maturity and
of any other authorized denominations.
Registered Bonds, upon surrender thereof at the
Principal Office of the Trustee with a written instrument of
transfer satisfactory to the Trustee, duly executed by the
registered owner or his attorney duly authorized in writing,
may, at the option of the registered owner thereof, be
exchanged for an equal aggregate principal amount of coupon
Bonds of the same maturity with appropriate coupons attached,
or of Registered Bonds of the same maturity and of any other
authorized denominations.
308 . Negotiability, Transfer and Registry. All the Bonds
issued under this Resolution shall be negotiable, subject to
the provisions for registration and transfer contained in this
Resolution and in the Bonds. So long as. any of the Bonds shall
remain Outstanding, the Trustee shall maintain and keep, at its
Principal Office, books for the registration and transfer of
Bonds; and, upon presentation thereof for such purpose at said
office, the Trustee shall register or cause to be registered
therein, and permit to be transferred thereon, under such
reasonable regulations as the Agency or the Trustee may
prescribe, any Bond entitled to registration or transfer. So
long as any of the Bonds remain Outstanding, the Agency shall
make all necessary provisions to permit the exchange of Bonds
at the Principal Office of the Trustee.
309. Transfer and Registration of Coupon Bonds. The
Trustee and any Paying Agent may treat the bearer of any coupon
as the absolute owner thereof, whether such coupon shall be
overdue or not, for the purpose of receiving payment thereof
and for all other purposes whatsoever, and may treat the bearer
of any Coupon Bond as the absolute owner of such Bond, whether
such Bond shall be overdue or not, for the purpose of receiving
payment of the Redemption Price thereof and for all other
purposes whatsoever except for the purpose of receiving payment
_e
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of coupons, and neither the Agency, nor the Trustee nor any
Paying Agent shall be affected by any notice to the contrary.
The Agency agrees to indemnify and save the Trustee and each
Paying Agent harmless from and against any and all loss, cost,
charge, expense, judgment or liability incurred by the Trustee
and each Paying Agent, acting in good faith and without
negligence hereunder, in so treating such bearer.
310 . Transfer of Registered Bonds.
(A) Each Registered Bond shall be transferable only
upon the books of the Trustee, which shall be kept for such
purpose at the Principal Office of the Trustee, by the
registered owner thereof in person or by his attorney duly
authorized in writing, upon surrender thereof together with a
written instrument of transfer satisfactory to the Trustee duly
executed by the registered owner or his duly authorized
attorney'. Upon the transfer of any such Registered Bond, the
Trustee shall issue in the name of the transferee a new
Registered Bond or Bonds or, at the option of the transferee,
Coupon Bonds, with appropriate coupons attached, of the same
aggregate principal amount and maturity as the surrendered
Bonds.
(B) The Trustee may deem and treat the person in
whose name any outstanding Registered Bond shall be registered
upon the books of the Trustee as the absolute .owner of such
Bond, whether such Bond shall be overdue or not, for the
_ purpose of receiving payment of, or on account of, the
Redemption Price of and interest on such Bond and for all other
purposes, and all such payments 'so made to any such registered .
owner or upon his order shall be valid and effectual to satisfy
and discharge the liability upon such Bond to the extent of the
sum or sums so paid, and neither the Agency nor the Trustee
shall be affected by any notice to the contrary. The Agency
agrees to indemnify and save the Trustee harmless from and
against any and all loss, cost, charge, expense, judgment or
liability incurred by it, acting in good faith and with
negligence hereunder, in so treating such registered owner.
311. Regulations with Respect to Exchanges and Transfers.
In all cases in which the privilege of exchanging Bonds or
transferring Registered Bonds is exercised, the Agency shall
execute and the Trustee shall authenticate and deliver Bonds in
accordance with the provisions of this Resolution. All
Registered Bonds surrendered in any such exchanges or transfers
shall forthwith be cancelled by the Trustee. All Coupon Bonds
and the coupons appertaining to such Bonds surrendered in any
such exchanges or transfers shall be retained in the possession
of the Trustee for the purpose of reissuance upon subsequent
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exchanges and the Trustee, prior to reissuance of any such
Coupon Bonds, shall detach therefrom and cancel all matured
coupons. For every such exchange or transfer of Bonds, whether
temporary or definitive, the Agency or the Trustee may make a
charge sufficient to reimburse it for any tax, fee or other
governmental charge required to be paid with respect to such
exchange or transfer, (other than such as may have been imposed
by the Agency or the City) and, after the first such exchange
or transfer, to cover the costs of preparing each new coupon
Bond or Registered Bond and other expenses of the Agency or
Trustee incurred in connection therewith, which sum or sums
shall be paid by the person requesting such exchange or
transfer as a condition precedent to the exercise of the
privilege of making such exchange or transfer. Notwithstanding
any other provision of this Resolution, the cost of preparing
each new coupon Bond or Registered Bond upon the first exchange
or transfer, and any other expenses of the Agency or the
Trustee incurred in connection therewith (except any applicable
tax, fee or other governmental charge) , shall be paid by the
Agency. The Trustee shall not be obliged to make any such
exchange or transfer of Bonds during the fifteen (15) days next
preceding an Interest Payment Date on the Bonds, or, in the
case of any proposed redemption of Bonds, next preceding the
date of the first publication of notice of such redemption.
312. Bonds Mutilated, Destroyed, Stole} or Lost. In case
any Bond shall become mutilated or be destroyed, stolen or
lost, the Agency shall execute and the Trustee shall
authenticate and deliver a new. Bond (with appropriate coupons
attached in the case of Coupon Bonds) of like maturity and
principal amount as the Bond and attached coupons, if any, so
mutilated, destroyed, stolen or lost, in exchange and
substitution for such mutilated Bond , upon surrender and
cancellation of such mutilated Bond and attached coupons, if
any, or in lieu of and substitution for the Bond and coupons,
if any, destroyed, stolen or lost, upon filing with the Agency
and the Trustee evidence satisfactory to the Agency and the
Trustee that such Bond and attached coupons, if any, have been
destroyed, stolen or lost and proof of ownership thereof, and
upon furnishing the Agency and the Trustee with indentity
satisfactory to both and complying with such other reasonable
regulations as the Agency and the Trustee may prescribe and
paying such expenses as the Agency and the Trustee may incur.
All Bonds and coupons so surrendered to the Trustee shall be
cancelled by it.
313. Preparation of Definitive Bonds; Temporary Bonds. The
definitive Bonds shall be lithographed or printed on steel
engraved borders. Until the definitive Bonds are prepared, the
Agency may execute, in the same manner as is provided in
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Section 306, and the Trustee may authenticate and deliver, in
lieu of definitive Bonds, but subject to the same provisions,
limitations and conditions as the definitive Coupon Bonds,
except as to the denominations thereof and as to
exchangeability for Registered Bonds, one or more temporary
Bonds (which may be registrable as to principal and interest) ,
substantially of the tenor of the definitive Coupon Bonds in
lieu of which such temporary Bond or Bonds are issued, but with
or without coupons, in denominations of $5,000 or any integral
multiples thereof authorized by the Agency, and with such
omissions, insertions and variations as may be appropriate to
temporary Bonds. The installments of interest payable on such
temporary Bonds in bearer form shall be payable only upon the
presentation and surrender of the coupons therefor attached
thereto or, if no coupons for such interest are attached, then
only upon presentation of such temporary Bonds for notation
thereon of the payment of such interest. The Agency at its own
expense shall prepare and execute and the Trustee upon the
surrender of such temporary Bonds, with all unmatured coupons,
and all matured coupons for which no payment or only partial
payment has been provided, attached, for exchange and the
cancellation of such surrendered temporary Bonds and coupons,
without charge to the Holder thereof, shall authenticate and
deliver in exchange therefor, at the Principal Office of the
Trustee, definitive Coupon Bonds, with appropriate coupons
attached, or, at the option of the Holder, definitive
Registered Bonds of the same . aggregate principal amount and.
maturity as the temporary Bonds surrendered . Until so
exchanged, the temporary Bonds shall ' in all respects be
entitled to the same benefits and security as definitive Bonds.-
issued pursuant to this Resolution.
All temporary Bonds surrendered - in exchange for a
definitive Bond or Bonds shall be forthwith cancelled by the
Trustee.
ARTICLE IV
REDEMPTION OF BONDS
401. Privilege of Redemption and Redemption Price.
(A) The Bonds are subject to ( i ) special mandatory
redemption prior to maturity pursuant to subsection (B) , ( ii)
optional redemption prior to maturity pursuant to subsection
(C) and ( iii) mandatory redemption prior to maturity by
operation of Sinking Fund Installments pursuant to subsection
(D) .
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7 (B) The Bonds are subject to special mandatory
redemption in whole or in part at a Redemption Price equal to
one hundred percent ( 100%) of the principal amount thereof plus
accrued interest to the date of redemption, without premium,
( i) on any date on or after March 1 , 1984 from and to the
extent there are moneys in the Mortgage Loan Purchase Account
which have not been applied , to the purchase of Mortgage Loans
within three ( 3) years from the date of delivery of the Bonds
or such later date as provided in Section 504 (E) and (F) ; and
( ii) on any Interest Payment Date on or after March 1 , 1982
from and to the extent there are funds in the Asset
Accumulation Fund prior to meeting the Asset Coverage Test and
thereafter to the extent necessary to maintain the Asset
Coverage Test or to otherwise comply with any requirement of
law.
(C) The Bonds are subject to redemption at the option of
the Agency, from any source of available funds, either as a
whole on any date on or after March 1 , 1991 , or in part, as
hereinafter provided, and by lot within a maturity, on any
Interest Payment Date on or after March 1 , 1991 , upon notice as
herein provided and when so redeemed in any period shown in the
following table, at a redemption price ( expressed as
percentages of the principal amount of such Bonds to be so
redeemed) set opposite such period in said table, plus accrued
interest to the Redemption Date.
Period Redemption
_ (Both Dates Inclusive) Prices
March 1 , 1991 to February 29 , .19.92 2%
March 1 , 1992 to February 28 , 1993 1-1/2%
March 1 , 1993 to February 28, 1994 1%
March 1 , 1994 to February 28 , 1995 1/2%
March 1 , 1995 and thereafter 0%
Upon the special mandatory redemption in part under
subsection (B) and optional redemption in part under subsection
(C) the Term Bonds maturing March 1 , 1999 shall be redeemed
prior to the redemption of any other Bonds, and Bonds maturing
March 1 , 2014 shall be redeemed subsequent to the redemption of
all other Bonds.
In the event the Bonds maturing March 1 , 1984 through
1991 and March 1 , 2013 are to be advanced in part, the Bonds
shall be selected and redeemed on a reasonably proportionate
basis from among all the then outstanding maturities of the
Bonds subject to such redemption, such basis to be determined
and effectuated as nearly as practicable by the Trustee by
selecting from each such maturity an amount equal to the result
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obtained by multiplying the total amount of moneys to be
available to redeem Bonds on the redemption date by the ratio
which the principal amount of all Bonds Outstanding in each
such maturity bears to the principal amount of all Outstanding
Bonds subject to such redemption, provided that Bonds shall be
redeemed only in multiples of five thousand dollars ($5,000) .
Any amount in excess of the five thousand dollar ( $5,000)
multiple remaining after such redemption shall be applied by
the Trustee to the next succeeding redemption of Bonds.
(D) The Bonds shall be subject to redemption in part
by lot by operation of Sinking Fund Installments as provided in
Article VI of this Resolution, upon notice as herein provided,
at the Redemption Price equal to the principal amount of each
Bond or portion thereof to be redeemed, together with accrued
interest to the date of redemption, without premium. Unless
none of the Bonds shall then be Outstanding, the Agency shall
be required to pay on March 1 of each year set forth in the
following table, for the retirement of the Bonds, the amount
set opposite such year of said table, and the same amount so to
be paid on each such date is hereby established as and shall
constitute a Sinking Fund Installment for retirement of the
Bonds; provided, however, that if prior to each date on which a
Sinking Fund Installment is due any Bonds have been purchased
or redeemed from moneys in the Prior Redemption Fund, the
amount of each future Sinking Fund Installment shown will be
reduced in $5,000 increments, by the amount obtained by
multiplying the principal amount of- Bonds so called for
redemption by the ratio which each Sinking Fund Installment
then bears to the total of all Sinking Fund Installments.
Sinking Fund Installments shall be made with respect
to the Term Bonds maturing on March 1 , 1999 on March 1 of the
year and in the amounts as follows:
Year Amount
1992 $300 ,000
1993 335,000
1994 370 ,000
1995 410 ,000
1996 455,000
1997 510 ,000
1998 565;000
1999 (maturity) 630,000
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Sinking Fund Installments shall be made with respect to the
Term Bonds maturing March 1 , 2014 , on March 1 of the years and
in the amounts as follows:
Year Amount Year Amount
2000 $ 695,000 2007 $ 1 ,485,000
2001 770 ,000 2008 1 ,655,000
2002 860 ,000 2009 1 ,845 ,000
2003 960,000 2010 2,055,000
2004 1 ,070 ,000 2011 2 ,295 ,000
2005 1 , 195,000 2012 2 ,555,000
2006 1 ,330 ,000 2013 (maturity) 2 ,850 ,000
There shall be no Sinking Fund Installments with respect to
the Bonds maturing March 1 , 2014 .
(E) Bonds. subject to redemption prior to maturity
shall be redeemable prior to maturity, (a) ( i) upon receipt by
the Trustee ( in the case of Bonds subject to optional
redemption pursuant to subsection (C) ) of the Officer ' s
Certificate referred to in Section 606 or ( ii) under the
circumstances set forth in Section 605, and (b) upon published
notice as provided in this Article IV, at such times, at such
Redemption Prices and upon the terms herein set forth.
402. Selection of Bonds to be Redeemed by Lot. In the
event of redemption by lot of Bonds of like maturity, the
Trustee shall assign to each Registered Bond of such maturity
then Outstanding a distinctive number for each. $5 ,000 of_ the
principal amount of such Bond and shall . select by lot, using
such method of selection as it shall deem proper in its
discretion and from the numbers of all Coupon Bonds of such.
maturity of the denomination of $5,000 then Outstanding and the
numbers so assigned to such Registered Bonds, as many numbers
as, at $5 ,000 for each number, shall equal the principal amount
of such Bonds to be redeemed. The Bonds to . be redeemed shall
be the Coupon Bonds of the denomination of $5 ,000 bearing the
numbers so selected, and the Registered Bonds to which were
assigned numbers so selected, but only so much of the principal
amount of each such Registered Bond of a denomination of more.
than $5,000 shall be redeemed as shall equal $5,000 for each
number assigned to it and so selected. For the purposes. of
this Section, Bonds which have theretofore been selected by lot
for redemption shall not be deemed Outstanding.
403 . Notice of Redemption. When the Trustee shall be
required or authorized, or shall receive notice from the Agency
of its election, to redeem Bonds, the Trustee shall in
accordance with the terms and provisions of the Bonds and of
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this Resolution select the Bonds to be redeemed and shall give
notice, in the . name of the Agency, of the redemption of Bonds,
which notice shall specify the maturities of the Bonds to be
redeemed, the Redemption Date and the place or places where
amounts due upon such redemption will be payable and, if less
than all of the Bonds of any like maturity are to be redeemed,
the letters and numbers or other distinguishing marks of such
Bonds so to be redeemed, and, in the case of Registered Bonds
to be redeemed in part only, such notice shall also specify the
portion of the principal amount thereof to be redeemed. Such
notice shall further state that on such date there shall become
due and payable upon each Bond to be redeemed the Redemption
Price thereof, or the Redemption Price of the specified portion
of the principal thereof in the case of a Registered Bond to be
redeemed in part only, together with interest accrued to such
date, and that from and after such date interest thereon shall
cease to accrue and be payable. Such notice . shall be given by
publication thereof in Authorized Newspapers, at least once,
not less than twenty-five ( 25) days nor more than sixty ( 60)
days prior to such Redemption Date. The Trustee shall also
mail a copy of such notice, postage prepaid, not less than
twenty (20) days nor more than sixty (60 ) days prior to such
Redemption Date, to the registered owner of any Bond, all or a
portion of which is to be redeemed , at his last address, if
any, appearing upon the registry books, and the Holders of
Bonds in bearer form who have filed an address and the number
or numbers of their respective Bonds with the Trustee pursuant
to Section 1104 , but such mailing shall not be a condition
precedent to such redemption and failure so to mail any such.
notice shall not affect the validity of any proceedings for .the
redemption of Bonds.
404. Agency' s Election to Redeem_. The Agency shall give
written notice to the Trustee of its election to redeem Bonds
which are subject to optional redemption and of the Redemption
Date, . which notice shall be given at least forty days ( 40)
prior to the Redemption Date or at such later date as shall be
acceptable to the Trustee. In the event that the required
notice of redemption shall have been given, the Agency shall,
and hereby covenants that it will, prior to the Redemption
Date, pay to the Trustee an amount in cash which, in addition
to any other moneys available therefor held by the Trustee,
will be sufficient to redeem at the Redemption Price thereof,
plus interest accrued to the Redemption Date, all of the Bonds
which are to be redeemed.
405. Payment of Redeemed Bonds. Notice having been given
by publication in the manner provided in Section 403 , the Bonds
or portions thereof called for redemption and specified in said
notice shall become due and payable on the Redemption Date
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specified in said notice at the Redemption Prices thereof
applicable on such date, plus unpaid interest on said Bonds or
portions thereof accrued to such date, and, upon presentation
and surrender thereof at the place or places specified in said
notice together with, in the case of Registered Bonds, a
written instrument of transfer duly executed by the registered
owner thereof or by his attorney duly authorized in writing,
and, in the case of Coupon Bonds, all appurtenant coupons
maturing subsequent to such date, said Bonds or portions
thereof shall be paid at the said Redemption Prices, plus
unpaid interest on said Bonds or portions thereof accrued to
such date not represented by coupons for matured interest
installments. All interest represented by coupons which shall
have matured at or prior to such Redemption Date shall continue
to be payable to the bearers of such coupons. If there shall
be so called for redemption less than all of a Registered Bond,
the Agency shall execute and the Trustee shall authenticate and
deliver, upon the surrender of such Bond to the Trustee,
without charge to the owner thereof, for the unredeemed balance
of the principal amount of the Registered Bond so surrendered,
at the option of the owner thereof, either Coupon Bonds or
Registered Bonds of like Series, designation, interest rate and
maturity in any of the authorized denominations. If, on such
Redemption Date, moneys for the redemption of all the Bonds or
portions thereof of any like Series and maturity to be
redeemed, together with interest thereon accrued and unpaid to
such date, shall be held by or behalf of the Trustee - so as to
be available therefor on such-date and if notice of redemption
thereof shall have been published as aforesaid, then from and
after such Redemption Date, interest on the Bonds or portions
thereof of such maturity so called for redemption shall. cease
to accrue and become payable, and the coupons for interest
appertaining thereto maturing subsequent to such Redemption.
Date shall be void and said Bonds and coupons shall no longer
be considered as Outstanding hereunder. All moneys held by or
on behalf of the Trustee for the redemption of particular Bonds
shall be held in trust for the account of the Holders of the
Bonds so to be redeemed.
ARTICLE V
ESTABLISHMENT OF FUNDS AND ACCOUNTS;
APPLICATION OF BOND PROCEEDS AND OTHER MONEYS
501. Establishment of Funds and Accounts. The Agency
hereby establishes and creates the following Funds and Accounts
which shall be special funds held by the Trustee:
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A. Bond Proceeds Fund
1. Issuance Expense Account
2. Mortgage Loan Purchase Account
B. Revenue Fund
C. Operating Fund
D. Interest Fund
E. Principal Fund
F. Sinking Fund
G. Mortgage Reserve Fund
H. Debt Service Reserve Fund
I. Asset Accumulation Fund
J. Prior Redemption Fund
No amounts may be withdrawn, transferred or paid out of any
of the above Funds or Accounts except as provided in this
Article or in Article VI or VII hereof.
502 . Deposit of Bond Proceeds. The proceeds from the sale
of the Bonds shall be deposited with the Trustee on the date of
delivery of the Bonds in the Bond Proceeds Fund and credited in
the following amounts to the following Funds and Accounts
created pursuant to Section 501 hereof:
(a) To the Interest Fund, the amount, if any, of
interest accrued on the Bonds from March 1 , 1981 to their
date of delivery;
(b) To the Issuance Expense Account, the amount, if
any, allocated to said Fund by a certificate of an
Authorized Officer;
( c) To the Mortgage Reserve Fund, an amount, if any,
allocated to said Fund by a certificate of an Authorized.
Officer;
(d) To the Debt Service Reserve Fund, an amount of
money which equals $3,575 ,000;
(e) To the Operating Fund, an amount', if any, as
specified in a certificte of an Authorized Officer; and
(f) To the Mortgage Loan Purchase Account, the
remainder of the Bond Proceeds.
503. Application of Issuance Expense Account.
(A) The Trustee shall apply.---the moneys in the
Issuance Expense Account to the payment of Costs of Issuance.
Such Costs of Issuance shall be paid by the Trustee upon
receipt by the Trustee of requisitions identifying ( i) the
amount to be paid, ( ii) the payee, ( iii) the service rendered
or other basis for the obligation to pay, and ( iv) the date on
which payment is to be made.
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, .
(B) Moneys remaining in the Issuance Expense Account
shall be transferred to the Prior Redemption Fund after payment
of all Costs of Issuance as evidenced by an Officer' s
Certificate.
.504. Application of Mortgage Loan Purchase Account.
(A) Except as otherwise provided in this Resolution
for transfers to other Funds and Accounts, moneys in the
Mortgage Loan Purchase Account shall be used solely for the
purchase of Mortgage Loans.
(B) Prior to the purchase of any Mortgage Loans, the
Trustee shall have been given evidence that the Agency has
taken out or made irrevocable arrangements for a policy of
Special Hazard Insurance.
(C) With respect to the purchase of Mortgage Loans,
the Trustee shall pay and disburse from the Mortgage Loan
Purchase Account to the Qualified Mortgage Lender the purchase
price of the Mortgage Loan after receipt by the Trustee of:
(1) A Requisition identifying ( i) the Mortgagor,
the Mortgage and the Residence subject to the Lien of the
Mortgage, ( ii) the amount of such payment, ( iii) the Qualified
Mortgage Lender to whom payment is to be made for the purchase
of the Mortgage Loan pursuant to a Mortgage Loan Purchase
Agreement, and ( iv) the date on which such payment is to be
made;
(2) The original promissory note secured- by th.e.
lien of the Mortgage identified in the Requisition, duly
executed by the Mortgagor and endorsed by the Qualified.
Mortgage Lender to the Trustee, on behalf of the Agency, and
originals or certified copies of the fully executed Mortgage
(deed of trust) and a duly acknowledged assignment of such
Mortgage executed by the Qualified Mortgage Lender to the
Trustee, on behalf of the Agency, such Mortgage and assignment
to be either ( i) duly recorded in the office of the County
Recorder, as evidenced by a document stamped of record or by
certification of the escrow company, or ( ii) accompanied by
irrevocable instructions of the Qualified Mortgage Lender
authorizing the Trustee so to record the assignment upon
payment to the Qualified Mortgage Lender of the purchase price
of the Mortgage Loan;
(3 ) A Mortgage Insurance certificate duly
endorsed and stating that the Mortgage Loan is, or a firm
commitment assuring that payment of the Mortgage Loan will be,
insured or guaranteed, in whole or in part, by a Mortgage
Insurer;
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( 4) A current American Land Title Association
mortgage title insurance policy, containing unmodified
endorsements 100 and 116 duly assigned to the Trustee by the
terms of such policy or any endorsement of the title insurance
company, or the irrevocable agreement of the title company to
so endorse such assignment for the benefit of the Trustee, on
behalf of the Agency, insuring title to the mortgaged Residence
as being vested in the Mortgagor subject only to the lien of
the Mortgage and Permitted Encumbrances, and issued in the face
amount of the Mortgage Loan by a reputable title insurance
company, or, in lieu of the foregoing described policy of ,
mortgage title insurance, a preliminary title report and
irrevocable instructions to the escrow agent not to close the
Mortgage Loan with the Mortgagor until a reputable title
insurance company is able to and will issue the foregoing
described policy of mortgage title insurance duly assigned by
the terms of such policy or the endorsement of the title
insurance company; the Qualified Lender shall instruct the
escrow company to cause the original mortgage title insurance
policy to be delivered, when available, timely to the Trustee;
and
( 5) A copy of the Hazard Insurance policy, or an
appropriate endorsement or binder of such Hazard Insurance, on
the Residence subject to the lien of the Mortgage, insuring the
Trustee, the Agency and any other parties in interest as their
interests may appear.
The Trustee shall keep and maintain accurate records
of all such Mortgage Loan purchases, including therein a
description of the Mortgage Loans purchased, the purchase price.
of such Mortgage Loans and the Mortgage Lenders from whom such
Mortgage Loans were purchased.
The Trustee shall give notice of any such purchase of
a Mortgage Loan to the Mortgage Insurer and to such other
persons as may be entitled to such notice by law or by the
terms of the Mortgage Loan, within thirty (30 ) days of the
purchase or such earlier time as may be required.
(D) The Qualified Mortgage Lender shall cause each
Mortgage Loan to be executed so as to bear an annual interest
rate as provided in the Commitment Contract subject to the
limitations of Section 911 (F) hereof.
(E) On or about March 1 , 1984 , the Trustee shall
determine whether the amount of Bond proceeds on deposit in the
Mortgage Loan Purchase Account, exclusive of interest earned
thereon, is in excess of fifteen percent ( 15%) of the amount of
Bond proceeds originally deposited therein pursuant to Section
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501 . If such be the case, the Trustee shall, no later than
three ( 3 ) years from the date of delivery of the Bonds,
transfer the amount of Bond proceeds in excess of said fifteen
percent ( 15% ) to the Prior Redemption Fund and apply such
excess amount of Bond proceeds to the purchase or special
mandatory redemption of Bonds.
The Agency reserves the right to determine that a date
four ( 4) years rather than three ( 3 ) years from the date of
delivery of the Bonds shall be the date upon which Bond
proceeds in the Mortgage Loan Purchase Account shall be so
transferred and applied, such determination to be based upon
either ( i) the fact that more than 85% of the original Bond
proceeds deposited in the Mortgage Loan Purchase Account have
been applied to the purchase of Mortgage Loans and the Agency
shall have certified to the Trustee that the Agency reasonably
expects that Bond proceeds remaining in such Account shall be
used to purchase Mortgage Loans, or ( ii) the Agency has
obtained a Counsel ' s Opinion that the determination to so
extend the date will not cause the Bonds to be arbitrage bonds
within the meaning of Section 103 ( c) of the Internal Revenue
Code of 1954, as amended, and the regulations promulgated
thereunder; provided, however, no such extension shall be
permitted if it will jeopardize the security for a repayment of
the Bonds. The Agency' s determination to so extend the date
shall be set forth in an Officer' s Certificate and a
Certificate of Projected Pledged Revenues delivered to the
Trustee on or before March 1 , 1984 , or such later date as shall
be acceptable to the Trustee. Any such Agency determination
shall be subject to a determination by the Trustee that. the;
security for the Bonds is not thereby impaired.
(F) Any amounts in the Mortgage Loan Purchase Account.
after the transfers provided for in subsection ( E) , if any,
( including any moneys transferred to the Mortgage Loan Purchase
Account from the Asset Accumulation Fund pursuant to Section
612(B) may be retained in the Mortgage Loan Purchase Account
and applied to the purchase of Mortgage Loans or transferred to
the Prior Redemption Fund by Officer' s Certificate and applied
to the purchase or special mandatory redemption of Bonds.
(G) Notwithstanding any of the foregoing provisions
of this Section, the Trustee shall transfer from the Mortgage
Loan Purchase Account, for deposit in the Principal Fund or
Sinking Fund any amounts necessary for the payment, when due,
of Principal Installments or Sinking Fund Installments as
provided in Article VI.
(H) All actions of the Trustee in the purchasing of
Mortgage Loans under this Section shall be accomplished by the
Trustee in its capacity as Trustee acting on behalf of the
Agency and the Bondholders under this Resolution and as
mortgagee of record under the Mortgage Loans.
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505. Trustee Reliance on Documents. The Trustee may
exclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon all
Requisitions, certificates or other documents furnished to the
Trustee pursuant to this Article and believed by the Trustee to
be genuine. All such Requisitions, certificates and other
documents shall be retained in the possession of the Trustee,
subject at all times during normal business hours to the
inspection of the Agency. The Trustee has no responsibility or
liability for, and the Agency assumes all responsibility and
liability for, the correctness, validity and genuineness of any
such Requisition, certificate or other document believed by the
Trustee to be genuine, valid and correct.
506 . Quarterly _Reports. The Trustee shall provide the
Agency with quarterly reports, commencing with the period
ending three months after the Issue Date of the Bonds, and
continuing •for as long as there are moneys in the Mortgage Loan
Purchase Account, stating all receipts paid into and all
disbursements made from said Fund pursuant to the provisions of
this Article. Such reports shall be mailed by the Trustee to
the Agency.
ARTICLE VI
APPLICATION OF REVENUES AND OTHER MONEYS
601. Pledge of Revenues, Mortgage Insurance Proceeds,
Mortgages and Funds and Accounts; Nature of Obligation.- -.
(A) Subject only to the prior lien of the Trustee
established by Section 807, all of the Pledged Revenues, all
Mortgage Loans purchased pursuant to this Resolution and all
Funds . and Accounts held by the Trustee under the provisions of
this Resolution are hereby pledged to secure the payment of the
principal or Redemption Price of and interest on the Bonds.
This pledge hereby made shall be valid and binding from and
after the time of the delivery by the Agency of the first Bond
delivered under this Resolution. The Pledged Revenues,
Mortgage Loans and Funds and Accounts so pledged and then or
thereafter received by the Trustee or any Mortgage Lender or
Servicer shall immediately be subject to the lien of such
pledge without any physical delivery or further act, and the
lien of such pledge and the obligation to perform the
contractual provisions hereby made shall have the priority over
any or all other obligations and liabilities of the Agency, and
the lien of such pledge shall be valid and binding as against
all parties having claims of any kind in tort, contract or
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otherwise against the Agency irrespective of whether such
parties have notice thereof. In no event shall the pledge of
any Mortgage Loan be affected by the circumstance that
subsequent to the acquisition thereof it is determined, or it
comes to be the case, that such Mortgage Loan was not eligible
for purchase or making by the Agency under the Act or the
Resolution.
(B) The Bonds shall not be deemed to constitute a
debt or liability of the Agency or the City nor a pledge of the
faith and credit of the Agency or the City but shall be special
obligations of the Agency payable solely from the Revenue Fund
and the other Funds and Acounts herein provided. The issuance
of Bonds under this Resolution shall not directly, indirectly,
or contingently obligate the Agency or the City to levy or to
pledge any form of taxation whatever therefor or to make any
appropriation for their payment.
(C) Nothing in this Section shall be construed to
prevent the Agency from applying moneys in the various Funds
and Accounts in the manner provided in this Resolution.
602. Deposit of Pledged Revenues and Escrow Payments.
(A) All Pledged Revenues collected by the Agency or
by any of its Servicers pursuant to a Servicing Agreement shall
(except for the portion paid as accrued interest - on. the .
purchase of Mortgage Loans, which shall be credited to the
Mortgage Loan Purchase Account when received) be deposited with
.the Trustee. Unless otherwise provided in this Resolution,
(such as in Section 911( H) ). all deposits of Pledged Revenues__,
shall be credited to the Revenue Fund.
(B) All Escrow Payments shall be paid to the Servicer
for deposit in the appropriate Escrow Account for application
in accordance with the Servicing Agreement.
(C) In the event that the Trustee receives a single
payment which it knows to combine Revenues and Escrow' Payments,
the Trustee shall transmit that portion of the payment
representing an Escrow Payment to the Servicer for deposit in
the appropriate Escrow Account.
603. Administration of Revenue Fund. The Revenue Fund
shall be administered and transfers and disbursements made
therefrom as provided in this Section. Upon receipt by Trustee
of the portion of participation fees paid by the Developers and
deposited with the Trustee in accordance with the Commitment
Contract, such fees shall be deposited directly in the Mortgage
Reserve Fund until such time as the amount on deposit therein
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equals the Mortgage Reserve Requirement. On the first day of
each calendar month, all Principal Recoveries shall be
transferred to the Principal Fund until March 1 , 1991 and
thereafter to the Sinking Fund. Moneys remaining in the -
Revenue Fund shall be transferred in the manner, in the order
and with the priority progressively set forth in subsections
(A) to (G) , inclusive, of this Section.
(A) At least one day prior to the first Interest
Payment Date, the ,Trustee shall transfer from' the Revenue Fund
to the Interest Fund an amount equal to one-twelfth ( 1/12th) of
the Interest Requirement and thereafter on the first day of
each calendar month, the Trustee shall transfer from the
Revenue Fund to the Interest Fund an amount equal to one-sixth
( 1/6th) of the Interest Requirement until there is accumulated
therein the required Interest Requirement.
(B) On the first day of each calendar month,
commencing twelve ( 12) months prior to the first Principal
Installment Date, the Trustee shall transfer from the Revenue
Fund to the Principal Fund an, amount equal to one-twelfth
( 1/12th) of the amount of the Principal Installment payable on
the next Principal Installment Date.
(C) On the first day of each calendar month,
commencing twelve (12) months prior to each Sinking Fund
Installment Date, the Trustee shall transfer from the . Revenue
Fund to the Sinking Fund an . amount equal to one ( 1/12)
of the, Sinking Fund Installment (as adjusted for redemptions)
to be paid on the next Sinking Fund Installment Date..
(D) After making the foregoing allocations and"
transfers, if the balance in the Mortgage Reserve Fund is less
than the Mortgage Reserve Requirement, the deficiency shall be
restored from available funds in the Revenue Fund.
(E) On the first day of each calendar month
commencing on the first day of the month next succeeding the
purchase of the .first Mortgage Loan by the Trustee, 'and after
any moneys therein have been applied, the Trustee shall
transfer from the Revenue Fund to the Operating Fund, an amount
not to exceed $ 1 ,000 plus an amount equal to one-twelfth
(1/12th) of the annual premium for Special Hazard Insurance.
(F) Any surpluses remaining in the Revenue Fund after
making the allocations and transfers ' provided for in the
preceding subsections shall be transferred to the Asset
Accumulation Fund.
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604. Application of Interest Principal Funds.
(A) The Trustee shall withdraw from the Interest
Fund, prior to each Interest Payment Date of the Bonds, an
amount equal to the Interest Requirement payable on such
Interest Payment Date, and shall cause the same to be applied
to the payment of said interest when due and is hereby
authorized to transmit the same to Paying Agents who shall
apply the same to such payment.
(B) The Trustee shall withdraw from the Principal
Fund, prior to each Principal Installment Date, an amount equal
to the Principal amount of the Outstanding Bonds, if any,
maturing on said Principal Installment Date and shall cause the
same to be applied to the payment of the principal of said
Bonds when due and is hereby authorized to transmit the same to
Paying Agents who shall apply the same to such payment. On
each March 1 , the Trustee shall transfer all moneys in the
Principal Fund in excess of one twelfth ( 1/12th) o.f the
Principal Installment due on the next succeeding Principal
Payment Date to the Prior Redemption Fund.
(C) All ' withdrawals and transfers under the
provisions of subsection (A) or subsection (B) of this Section
(other than transfers on March 1 as specified in subsection
(B) ) shall be made not earlier than one (1) day prior to the
Interest Payment Date or Principal Installment Date to which it
relates, and the amount so withdrawn or transferred shall, for
the purposes of this Resolution, be deemed to remain in and be
part of the appropriate Fund until such Interest Payment Date
or Principal Installment Date.
605. Application of Sinking Fund.
(A) The Trustee shall apply moneys in the Sinking
Fund to the purchase or the redemption of the Bonds in the
manner provided in this Section and to the payment of the
principal thereof at maturity, provided that on each March 1 ,
the Trustee shall transfer all moneys in the Sinking Fund in
excess one-twelfth ( 1/12th) of the Sinking Fund Installment due
on the next succeeding Sinking Fund Installment Date to the
Prior Redemption Fund, and provided further that no such Bonds
shall be so purchased during the period of thirty (30) days
next preceding the Sinking Fund Installment Date established
for such Bonds. The purchase price paid by the Trustee
(excluding accrued interest which shall be paid from the
Interest Fund but including any brokerage and other charges)
for any Bond purchased pursuant to this Section shall not
exceed the Redemption Price of such Bond applicable upon its
redemption by operation of the Sinking Fund through application
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of the moneys available for such purchase on the next date of a
Sinking Fund Installment established for such Bonds. ' Subject
to the limitations hereinbefore set forth or referred to in
this Section, the Trustee shall purchase Bonds at such times,
for such prices, in such amounts and in such manner (whether
after advertisement for tenders or otherwise) as the Trustee in
its discretion may determine and as may be possible with the
amount of moneys available therefor in the Sinking Fund. If on
any date there shall be moneys in the Sinking Fund and there
shall be no Outstanding Term Bonds such Sinking Fund shall be
closed and the Trustee shall transfer any moneys therein to the
Revenue Fund.
(B) As soon as practicable after the forty-fifth
( 45th) and before the twenty-fifth ( 25th) day prior to the
Sinking Fund Installment Date, the Trustee shall call for
redemption in the manner provided in Article IV on the said
Sinking Fund Installment Date and by application of said
Sinking Fund Installment redeem such principal amount of the
Bonds entitled to said Sinking . Fund Installment less such
amounts of Bonds purchased pursuant to subsection (A) of this
Section, and on such Redemption Date the Trustee shall apply
the moneys in such Sinking Fund to the payment of the
Redemption Price of the Bonds so called for redemption.
606 . Application of Prior• Redemption .Fund.
(A) Moneys in the Prior Redemption Fund . shall be
applied to special mandatory redemption of Bonds under the
circumstances and from the sources of funds set forth in
Sections 401 (B) and 504 (E) and (F) and in the manner provided
in Section 401 (C) .
(B) In the event of optional redemption of Bonds
pursuant to Section 401(C) , the Trustee shall, upon receipt of
the Officer' s Certificate referred to in subsection (C) , apply
moneys in the Prior Redemption Fund to the purchase of the
Bonds designated in said Officer's Certificate at the most
advantageous price obtainable with due diligence, such price
(excluding accrued interest which shall be paid from the
Interest Fund but including any brokerage or other charges) not
to exceed the Redemption Price of such Bonds applicable on the
next ensuing Redemption Date for such Bonds. Bonds not so
purchased may be redeemed at a Redemption Price and at the time
and in the manner provided in Article IV. Bonds shall not be
purchased pursuant to this subsection during the thirty ( 30)
days prior to a Redemption Date from moneys to be applied to
the redemption of Bonds on such date.
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(C) Any Bonds to be purchased or redeemed by the
Trustee at the option of the Agency pursuant to Section 401(C)
from moneys in the Prior Redemption Fund shall be purchased or
redeemed by the Trustee only upon receipt by the Trustee of an
Officer's Certificate determining or certifying the following:
(1 ) the principal amount of Bonds to be
purchased or redeemed;
( 2) the years in which Sinking Fund Installments
are to be reduced and the amount by which the Sinking Fund
Installments so determined are to be reduced, provided that
the aggregate of such reductions in Sinking Fund
Installments shall equal the aggregate principal amount of
Bonds to be purchased or redeemed; and
(3) the Redemption Date.
607 . Deficiencies in Bond Funds.
(A) In the event that five ( 5) days prior to any
Interest Payment Date the amount in the Interest Fund, after
transfer to the Interest Fund of any available funds in the
Asset Accumulation Fund is insufficient to pay the interest due
on the Bonds on said Interest Payment Date, the Trustee shall
withdraw from the Mortgage Reserve Fund and deposit in the
Interest Fund the amount of such deficiency, and in the event
that there remains a deficiency in the Interest Fund after such
transfer, the Trustee shall withdraw from the Debt Service
Reserve Fund and deposit in the Interest Fund the amount of
such deficiency remaining. In the event that there remains a
deficiency in the Interest Fund after withdrawing moneys from . .
the Mortgage Reserve Fund and the Debt Service Reserve Fund,.,.
the Trustee shall transfer moneys from any other Fund or
Account pledged , to the payment of interest on the Bonds,
including the the Sinking Fund to the Interest Fund in the
amount of such deficiency.
(B) In the event that sixty ( 60) days prior to the
next succeeding Sinking Fund Installment Date the amount in the
Sinking Fund after transfer to the Sinking Fund of any
available funds in the Asset Accumulation Fund, is insufficient
to pay the Sinking Fund Installment due on the Bonds to be paid
from such Fund on the next succeeding Sinking Fund Installment
Date, the Trustee shall forthwith withdraw from the following
Funds in the following order the amount of such deficiency and
transfer the same to the Sinking Fund:
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(1) the Mortgage Reserve Fund,
( 2) the Debt Service Reserve Fund, and
( 3) the Mortgage Loan Purchase Account.
The amounts so withdrawn from the Mortgage Reserve Fund and
the Debt Service Reserve Fund shall be restored from available
funds in the Revenue Fund as provided in Section 603(E) and
(F) , respectively.
608. Application of Mortgage Reserve Fund. The Trustee
shall transfer or pay moneys from the Mortgage Reserve Fund;
(1) to the Interest Fund, Principal Fund or Sinking
Fund for the payment of Interest, Principal or Sinking Fund
Installments; and in the event the amount transferred from the
Asset Accumulation Fund is insufficient to make up such
deficiency as provided in Section 607; and
( 2) to such persons named by a Requisition filed with
the Trustee for the payment of unpaid Escrow Payments and
Mortgage foreclosure fees, including appraisal and legal fees
and similar expenses required to preserve or acquire
unencumbered title to property through the protection or
enforcement of the Trustee' s rights conferred by law or the
applicable Mortgage Loan and compensation and expenses of the
Trustee and any Paying Agent under Section 807; and
(.3) to the Revenue Fund to the extent of any
surpluses therein on or after a date three (3) years from the
date of delivery of the Bonds (on such later date as provided
in Section 504(E) .
609. Application of Debt Service Reserve Fund.
(A) If at any time there - shall not be a sufficient
amount in the Interest Fund, Principal Fund or Sinking Fund to
make payment of Interest, Principal or Sinking Fund
Installments and in the event that the amount transferred from
the Asset Accumulation Fund or the Mortgage Reserve Fund is
insufficient to make up such deficiency as provided in Section
607, the Trustee shall withdraw from the Debt Service Reserve
Fund and pay into the appropriate fund the amount of the
deficiency then remaining.
(B) Any surpluses in the Debt Service Reserve Fund
shall be transferred to the Revenue Fund at the end of each
month if the Trustee determines that such transfer is in the
best interest of the Bondholders.
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610 . Application of Escrow Payments. Escrow Payments
received by any Servicer, whether separately or as a known part
of some other payment, shall be deposited in the applicable
Escrow Account and shall' be promptly . applied by the Servicer to
the purpose for which such payments were received, and any such
payments received by the Trustee, whether separately or as part
. of some other payment, shall immediately be paid by the Trustee
to the Servicer and applied by the Servicer in the manner set
forth above.
611. Application of Operating Fund. Except as otherwise
provided in this Section, all amounts in the Operating Fund
shall be applied to the payment of Operating Expenses upon
receipt by the Trustee of a Requisition or Officer ' s
Certificate directing such payment. Any balance remaining in
the Operating Fund on February 28 of any year shall be
transferred to Revenue Fund.
612 . Application of Asset Accumulation Fund
(A) Moneys deposited into the Asset Accumulation Fund
shall first be applied by the Trustee to make up any deficiency
in the following Funds in the following order:
FIRST: Interest Fund
SECOND: Principal Fund
- THIRD: Sinking Fund
FOURTH: Mortgage Reserve Fund
FIFTH : Debt Service Reserve Fund
SIXTH: Operating Fund
(B) After any such transfers and until the Asset
Coverage Test is met, any moneys in the Asset Accumulation Fund
shall be transferred to the Prior Redemption Fund and applied
to the special mandatory redemption of Bonds to the extent
necessary to enable the Agency to meet the Asset Coverage Test.
(C) After the Asset Coverage Test has been initially
met, amounts in the Asset Accumulation Fund shall be
transferred to the Prior Redemption Fund and applied to the
Special Mandatory Redemption of Bonds to the extent necessary
to enable the Agency to continue to meet the Asset Coverage
Test. Following such transfer and application and based on an
Officer's Certificate accompanied by an Asset Coverage Test
Certificate stating that the Asset Coverage Test continues to
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be met and setting forth the amount of any excess, such excess
shall be either transferred to the Prior Redemption Fund and
applied to the optional redemption of Bonds or shall - be
transferred by the Trustee to the Agency free and clear of the
lien of this Resolution for use by the Agency for any lawful
purpose, including, but not limited to the purchase of Bonds by
the Agency.
(D) The question of whether the Agency has met and is
continuing to meet the Asset Coverage Test for purposes of this
Section shall be established by an Asset Coverage Test
Certificate delivered by the Agency to the Trustee on or about
March 1 and September 1 of each year, commencing not later than
March 1, 1984 . The Trustee shall conclusively presume that the
Asset Coverage Test has not been met unless and until such
Asset Coverage Test Certificate has been received.
613. Call , of All Outstanding Bonds. In the event that the
amount in the Funds and Accounts created by this Resolution and
pledged to the payment of Bonds is sufficient to pay the
Redemption Price of and interest on all Bonds Outstanding, the
Trustee, upon receipt of an Officer' s Certificate authorizing
the same, shall withdraw from such Funds and Accounts an amount
equal to such Redemption Price of and interest on all Bonds
Outstanding and deposit the same in the Prior Redemption Fund.
614 . Quarterly Reports. The Trustee, commencing with the
period ending three ( 3 ) months after the Issue Date of the
Bonds, shall provide the Agency with quarterly reports covering
all receipts paid into and all disbursements made from each
Fund and Account held by the Trustee pursuant to the provisions
of this Article. Such reports shall be mailed by the Trustee
to the Agency.
ARTICLE VII
SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS
701. Security for Deposits.. All moneys held hereunder by
the Trustee and any Paying Agent shall be continuously and
fully secured by securities eligible by law to be held as
security for public. deposits of a market value at least equal
to the amount required by law; provided, however, that it shall
not be necessary for any Paying Agent to give security for the
deposit of any moneys with it held in trust for the payment of
the principal or Redemption Price of or, interest on Bonds, or
for the Trustee to give security for any moneys which -shall be
represented by obligations purchased under the provisions of
this Resolution as an investment of such moneys.
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702. Investment of Moneys Held by the Trustee.
(A) Each of the Funds and Accounts held by the
Trustee shall be a trust fund for the purpose thereof. Moneys
in each of said Funds and Accounts shall be invested by the
Trustee in Permitted Investments; provided, that the Agency may
direct the Trustee as to specific Permitted Investments by
Officer' s Certificate. The maturity or Redemption Date of such
investments shall coincide as nearly as practicable with the
times at which moneys in said Funds or Accounts will be
required for the purposes in this Resolution.
(B) Permitted Investments purchased as an investment
of moneys in any Fund or Account held by the Trustee shall be
deemed at all times to be a part of such Fund or Account until
such amount is transferred in accordance with this Resolution.
(C) In computing the amount in any Fund or Account
held by the Trustee, Permitted Investments purchased as an
investment of 'moneys therein shall be valued at the lower of
either actual cost or the then current market value thereof.
(D) The Trustee shall sell at the best price
obtainable, or present for redemption, any Permitted Investment
whenever it shall be necessary in order to provide moneys to
meet any payment or transfer from the Fund or Account for which
such investment was made.
_. (E) In lieu of the investment of moneys_ in Permitted
Investments, as authorized herein, the Trustee may deposit
moneys from any Fund or Account in interest-bearing time or
savings deposits, or other similar banking arrangements with
itself or any bank or trust company or national banking
association or savings and loan association; provided, .that no
moneys in the Bond Proceeds Fund shall be so deposited unless
the Trustee shall certify in writing to the Agency, upon the
making of each such deposit or arrangement, that the interest
to be earned thereon will be in excess of the interest, income
or increment that would be earned by the investment of such
moneys in obligations authorized in subsection (A) above in
Permitted Investments .at the then current market prices; and
provided further, that all moneys in each such interest-bearing
time or savings deposit or other similar banking arrangement
shall be continuously and fully secured as provided in Section
701.
703. Debt Service Reserve Fund Investment Restrictions.
Moneys in the Debt Service Reserve Fund shall be invested in
Permitted Investments maturing ' up to but not beyond March 1 ,
201 1 .
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704. Mortgage Reserve Fund Investment Restrictions.
Moneys in the Mortgage Reserve fund shall not be invested in
Permitted Investments which mature beyond one (1) year from the
date of investment; provided, that prior to three ( 3 ) years
from the date of delivery of the Bonds, moneys in the Mortgage
Reserve Fund may be invested in Permitted Investments which
mature on or before a date four ( 4) years from the date of
delivery of the Bonds.
705. Transfer to Revenue Fund. Except as herein otherwise
expressly provided , the interest earned or other income derived
from the investment or deposit of moneys in any Fund or Account
shall accrue to or be transferred by the Trustee upon receipt
thereof to the Revenue Fund.
ARTICLE VIII
THE TRUSTEE AND PAYING AGENTS
801 Trustee Appointment and Acceptance of Duties. The
Agency hereby appoints Security Pacific National Bank, Los
Angeles, California, as Trustee under this Resolution. The
Trustee shall signify its acceptance of the duties and
obligations imposed upon it by this Resolution by written
instrument of acceptance deposited with the Agency. The,
property, rights, powers and duties of the Trustee under this:
Resolution are hereby vested in said Trustee in trust for the
Bondholders. The Trustee (and any successor Trustee) shall
have a capital and surplus aggregating at least fifty million
dollars ($50,000,000) .
802. Paying Agents. The Agency hereby appoints Bankers.
Trust Company, New York, New York, Harris Trust and Savings
Bank, Chicago, Illinois, and Security Pacific National Bank,
Los Angeles, California as Paying Agents under this
Resolution. The Agency may at any time or from time to time by
Supplemental Resolution appoint one or more other Paying Agents
for such Bonds. Each Paying Agent shall be a bank, trust
company or national banking association, having a capital and
surplus aggregating at least fifty million dollars
($50 ,000 ,000 ) . Each Paying Agent shall signify its acceptance
of the duties and obligations imposed upon it by this
Resolution by executing and delivering to the Agency and the
Trustee a written acceptance thereof.
803 . Responsibilities of Trustee and Paying Agenfs. The
recitals of fact herein and in the Bonds contained shall be
taken as the statements of the Agency and neither the Trustee
nor any Paying Agent assumes any responsibility for the
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correctness of the same. Neither the Trustee nor any Paying
Agent shall be deemed to ' make any representations as to the
validity or sufficiency of this Resolution or of any Bonds or
coupons issued thereunder or in respect of the security
afforded by this Resolution, and neither the Trustee nor any
Paying Agent shall incur any responsibility or duty with
respect to the issuance of the Bonds for value or the
application of the proceeds thereof or the application of any
moneys paid to the Agency. Neither the Trustee nor any Paying
Agent shall be under any obligation or duty to perform any act
which would involve it in expense or liability or to institute
or defend any suit in respect hereof, or to advance any of its
own moneys, unless properly indemnified to its satisfaction.
Neither the Trustee nor any Paying Agent shall be liable in
connection with the performance of its duties hereunder except
for its own negligence or wilful default. Neither the Trustee
nor any Paying Agent shall be under any responsibility or duty
with respect to the application of any moneys paid to any one
of the others.
804. Funds Held in Trust. All moneys held by the Trustee
at any time pursuant to the terms of this Resolution shall be
and hereby are assigned, transferred and set over unto such
Trustee in trust for the purposes and under the terms and
conditions of this Resolution.
805. Evidence on Which Trustee May. Act. The Trustee and
any Paying Agent shall be protected in acting upon any notice,
resolution, request, consent, order, certificate., _ report,
opinion, bond, or other paper or document believed by it to be
-genuine, and to have been signed or presented by the proper
party or parties. The Trustee and any Paying Agent may consult
with counsel, who may or may not be of counsel to the Agency, .
and the opinion or advice of such counsel shall be full and
complete authorization and protection in respect of any action
taken - or suffered by it under this Resolution in good faith and
in accordance therewith.
Whenever the Trustee or any Paying Agent shall deem it
necessary or desirable that a matter be proved or established
prior to taking or suffering any. action under this Resolution,
such matter (unless other evidence in respect thereof be
therein specifically prescribed) may be deemed to be
conclusively proved and established by Officer' s Certificate
and such Officer' s Certificate shall be full warrant for any
action taken or suffered in good faith under the provisions of
this Resolution upon the faith thereof, but in its discretion
the Trustee or any Paying Agent may in lieu thereof accept
other evidence of such fact or matter or may require such
further or additional evidence as to it may deem reasonable.
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Except as otherwise expressly provided in this Resolution,
any request, order, notice or other direction required or
permitted to be furnished pursuant to any provision thereof by
the Agency to the Trustee or any Paying Agent shall be
sufficiently executed if executed in the name of the Agency by
an Authorized Officer.
806. Trustee Reliance on Documents. The Trustee may
exclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon all
Requisitions, certificates or other documents furnished to the
Trustee pursuant to this Resolution and believed by the Trustee
to be genuine. All such Requisitions, certificates and other
documents shall be retained in the possession of the Trustee,
subject at all times during normal business hours to the
inspection of the Agency. The Trustee has no responsibility or
liability for, and the Agency assumes all responsibility and
liability for, the correctness, validity and genuineness of any
such Requisition, certificate or other document believed by the
Trustee to be genuine, valid and correct.
807. Compensation and Expenses. The Agency shall pay to
the Trustee and to each Paying Agent from time to time
reasonable compensation for all services rendered under this
Resolution, and also all reasonable expenses, charges, legal
and consulting fees and other disbursements and those of its
attorneys, agents and employees, incurred in and about the
performance of their powers and duties under this Resolution,
and the Trustee and each Paying Agent shall have a lien
therefor on any and all funds at any time held by it under this
Resolution which lien shall be. prior and superior to the lien
of the Holders of the Bonds. The Agency further covenants and
agrees to indemnify and save the Trustee and each Paying Agent
harmless against any loss, expense and liabilities which it may
incur arising out of or in the exercise and performance of its
powers and duties hereunder, including the costs and expenses
of defending against any claim of liability, but excluding
liabilities which are due to its negligence or wilful default.
The Agency further covenants and agrees to advance to the
Trustee and each Paying Agent, from amounts available therefor
in the Operating or Mortgage Reserve Fund, all amounts
requested as the costs and expenses of such defense.
808. Permitted Acts and Functions. - The Trustee and any
Paying Agent may buy, own, hold and sell any Bonds, coupons or
Notes of the Agency, whether heretofore or hereafter issued or
created; and may engage or be interested in any financial . or
other transaction with the Agency, including, ( subject to any
law or regulations precluding or limiting any relationships
between Mortgage Loans and Bonds purchased) serving as a
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Qualified Mortgage Lender in the Residential Mortgage Financing
Program with like effect and with the same rights it would have
if it were not such Trustee or Paying Agent. The Trustee and
any Paying Agent may act as depository for, and permit any of
its officers or directors to act as a member of, or in any
other capacity_ with respect to, any committee formed to protect
the rights of Bondholders or to effect or aid in any
reorganization growing out of the enforcement of the. Bonds or
this Resolution whether or not any such committee shall
represent the Holders of a majority in principal amount of the
Bonds then Outstanding.
809. Resignation of Trustee. The Trustee may at any time
resign and be discharged of the duties and obligations created
by this Resolution by giving not less than sixty ( 60) days'
written notice to the Agency and publishing notice thereof once
in an Authorized Newspaper. Such resignation shall take effect
on the date on which the appointment of a successor Trustee
under Section 811 becomes effective.
810 . Removal of Trustee. The Trustee shall be removed by
the Agency if at any time so requested by an instrument or
concurrent instruments, in writing, filed with the Trustee and
the Agency, and signed by the Holders of a majority in
principal amount of the Bonds then Outstanding or their.
attorneys-in-fact duly authorized, excluding any Bonds held by
or .-for the account of the Agency. The Agency may remove the
Trustee at any time, except during the existence of an event of
default as defined in Section 1201 hereof, for such cause as.
shall be determined in the sole discretion of the Agency by..
filing with the Trustee an instrument signed by an Authorized
Officer.
811. Appointipent of Successor Trustee. In case at any time
the Trustee shall resign or shall be removed or shall become
incapable of acting, or shall be adjudged a bankrupt or
insolvent, or if a receiver, liquidator or conservator of the
Trustee, or of its property or affairs is appointed, the Agency
covenants and agrees that it will thereupon appoint a successor
Trustee. The Agency shall publish notice of any such
appointment made by it in an Authorized Newspaper, such
publication to be made within twenty ( 20) days after such
appointment.
If in a proper case no appointment of a successor Trustee
shall be made pursuant to the foregoing provisions of this
Section within forty-five ( 45) days after the Trustee shall
have given to the Agency written notice, as provided in Section
809, or after a vacancy in the office of the Trustee shall have
occurred by reason of its inability to act, the Trustee or the
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Helder of any Bond may apply to any court of competent
jurisdiction to appoint a successor Trustee. Said court may
thereupon, after such notice, if any, as such court may deem
proper and prescribe, appoint a successor Trustee.
812. Transfer of Rights and Property to Successor Trustee.
Any successor Trustee appointed under this Resolution shall
execute, acknowledge and deliver to its predecessor Trustee,
and also to the Agency, an instrument accepting such
appointment, and thereupon such successor Trustee, without any
further act, deed or conveyance, shall become fully vested with
all money, estates, properties, rights, powers, duties and
obligations of such predecessor Trustee, with like effect as if
originally named as Trustee; but the Trustee ceasing to act
shall, nevertheless, on the written request of the Agency, or
of the successor Trustee, execute, acknowledge and deliver such
instruments of conveyance and further assurance and do such
other things as may reasonably be required for more fully and
certainly vesting and 'confirming in such successor Trustee all
the right, title .and interest of the predecessor Trustee in and
to any property held by it under this Resolution, and shall pay
over, assign and deliver to the successor Trustee any money or
other property subject to the trusts and conditions herein set
forth. Should any deed, conveyance or instrument in writing
from the Agency be required by such successor Trustee for more
fully and certainly vesting in and confirming to such successor
Trustee any such estates, rights, powers and duties, and all ,.
such deeds, conveyances and instruments in writing shall , on,-
request, and so far as may be authorized by law, be executed,,,
acknowledged and delivered by the Agency. Any such successor
Trustee shall promptly notify each Paying Agent of its
appointment as Trustee.
813 . Merger, Conversion or Consolidation. Any company into
which the Trustee may be merged or converted or with which it
may be consolidated or any company resulting from any merger,
conversion or consolidation to which it shall be a party or any
company to which the Trustee may sell or transfer all or
substantially all of its corporate trust business, shall be the
successor to such Trustee without the execution or filing of
any paper or the performance of any further act; provided, that
such Trustee shall be a bank or trust company organized under
the laws of the State or a national banking association and
shall have an office for the transaction .of its business in the
State, and shall be authorized by law to perform all the duties
imposed upon it by this Resolution.
814 . Resignation or Removal of Paying Agents and
Appointment of Successors. Any Paying Agent may at any time
resign and be discharged of the duties and obligations created
by this Resolution by giving at least sixty (60) days' written
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notice to the Agency and the Trustee. Any Paying Agent may be
removed at any time by an instrument filed with such Paying
Agent and the Trustee and signed by an Authorized Officer. Any
successor Paying Agent shall be appointed by the Agency and
shall be a bank or trust company organized under the laws of
any state of the United States or a national banking
association and willing and able to accept the office of Paying
Agent on reasonable and customary terms and authorized by law
to perform all the duties imposed upon it by this Resolution.
In the event of the resignation or removal of any Paying
Agent, such Paying Agent shall pay over, assign and deliver any
moneys held by it to its successor, or if there be no successor
then appointed, to the Trustee until such successor be
appointed.
ARTICLE IX
COVENANTS OF THE AGENCY
The Agency covenants and agrees with the Holders of the
Bonds as follows:
901. Payment of Bonds. The Agency shall promptly pay any
and all Pledged Revenues received by it to the Trustee for
deposit and application thereof to the payment of the principal
or Redemption Price, if any, of every Bond and the interest
thereon, at the dates and places and in the manner provided in
the Bonds and in the coupons thereto appertaining, according to
the true intent and meaning thereof.
902. Extension of Payment of Bonds and Coupons.. The Agency.
shall not directly or indirectly. extend or assent 'to the
extension of the maturity of any of the Bonds or the time of
.payment of any of the coupons or claims for interest by the
purchase or funding of such Bonds, coupons or claims for
interest' or by any other arrangement, and in case the maturity
of any of the Bonds or the time for payment of any such coupons
or claims for interest shall be extended, such Bonds, coupons
or claims for interest shall - not be entitled in case of any
default under this Resolution to the benefit of this Resolution
or to any payment out of any of the funds held by the Trustee
or any Paying Agent, except subject to the prior payment of the
principal of all Bonds issued and Outstanding the maturity of
which has not been extended and of such portion of the accrued
interest , on the Bonds as shall not be represented by such
extended "coupons or claims for interest.
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903. Further As At any and all times the Agency
shall . upon written request of Trustee, so far as it may be
authorized or permitted by law, pass, make, do, execute,
acknowledge and deliver, all and every such further
resolutions, acts, deeds, conveyances, assignments, transfers
and assurances as may be necessary or desirable for the better
assuring, conveying, granting, assigning, confirming and
effecting all and singular the rights, Revenues, Mortgage
Loans, Funds and Accounts and other moneys, securities, funds
and property hereby pledged or assigned or intended so to be,
or which the Agency may hereafter become bound to pledge or
assign in trust.
904. Power to Issue Bonds and Make Pledges. The Agency is
duly authorized pursuant to law to authorize. and issue the
Bonds and to adopt this Resolution and to pledge the Pledged
Revenues, Mortgage Loans and Funds and Accounts, purported to
be pledged by this Resolution in the manner and to the extent
provided in this Resolution. The Pledged Revenues , Mortgage
Loans and Funds and Accounts so pledged are and will be free
and clear of any pledge, lien, charge or encumbrance thereon or
with respect thereto prior to, or of equal rank with, the
pledge created by this Resolution, except for the liens in
favor of the Trustee and Paying Agents provided in Section 807
hereof, and all corporate action on the part of Agency to that
end has been duly and validly taken. The Bonds and the
provisions of this Resolution are and will be the valid and
legally enforceable obligations of the Agency in accordance
with their terms and the terms of this Resolution. The Agency.
shall at all times, to the extent permitted by law, defend,
preserve and protect the pledge of the Pledged Revenues,
Mortgage Loans and Funds and Accounts under this Resolution and
all the rights of the Bondholders under this Resolution against.
all claims and demands of all persons whomsoever.
905. Accounts and Reports.
(A) The Agency shall keep proper books of record and
account in which complete and correct entries shall be made of
its transactions relating to all Mortgage Loans, Pledged
Revenues, and all Funds and Accounts established by this
Resolution, which shall at all reasonable times be subject to
the inspection of the Trustee and the Holders of an aggregate
of not less than five percent (5%) in principal amount of the
Bonds then Outstanding or their representatives duly authorized
in writing.
(B) The Agency shall annually, within one hundred and
twenty (120) days after the close of each Fiscal Year, file
with the Trustee a copy of an annual report regarding its
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Residential Mortgage Financing Program (hereinafter in this
subsection referred to as the "Program" ) for such Fiscal Year,
, accompanied by an Accountant' s Certificate, setting forth in
complete and reasonable detail the following matters relating
to the Program: ( i) the operations and accomplishments of the
Program; ( ii) receipts and expenditures of the Program during
such Fiscal Year in accordance with the categories or
classifications established by the Agency for its operating and
capital outlay purposes; ( iii) the assets and liabilities of
the Program at the end of such Fiscal Year, including a
schedule of its Mortgage Loans and the status of the Funds and
Accounts established by this Resolution; and ( iv) a schedule of
its Bonds Outstanding at the end of such Fiscal Year, together
with a statement of the amounts paid, redeemed and issued
during such Fiscal Year. A copy of each such annual report and
Accountant' s Certificate shall be mailed by the Agency to each
Bondholder who shall have filed his name and address with the
Agency for such purpose.
(C) The Agency shall maintain a record of the monthly
payments to be remitted to the Trustee by each Servicer and
shall reconcile monthly the scheduled amount with the amount
actually remitted, all based on data to be provided by the
Servicers pursuant to Servicing Agreements, and shall provide a
copy of such record to the Trustee.
906. Personnel and Servicing of Mortgages. The Agency
shall at all times appoint, retain and employ competent
supervisory personnel for the purpose o.f carrying out its
Residential Mortgage Financing Program and shall establish and.
enforce reasonable rules, regulations .-and standards for t-he
construction and completion of all Residential Construction and
for servicing Mortgage Loans. The Agency shall cause all such
Residential Construction to be accomplished in an efficient and
economical manner. All persons employed by the Agency shall be
qualified for their respective positions. Nothing herein shall
mean or be deemed to be a prohibition against the Agency' s
contracting for all or any part of such services.
907. Payment of Premiums. The Agency shall promptly pay,
or cause to be paid, the annual premiums on Special Hazard
Insurance, ( to the extent that such payments represent
Operating Expenses under Section 102) and on Hazard Insurance
not otherwise paid, from moneys in the Operating Fund.
908 . Waiver of Laws. The Agency shall not (to the extent
then permitted by law) at any time insist upon or plead in any
manner whatsoever, or claim or take the benefit or advantage of
any stay or extension law now or at any time hereafter in force
which may affect the covenants and agreements contained in this
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Resolution or Supplemental Resolution or in the Bonds, and all
benefit or advantage or any such law or laws is hereby
expressly waived by the Agency.
909. Compliance with Conditions Precedent. Upon the date
of issuance of any of the Bonds, all conditions, acts and
things required by law or by the Resolution to exist, to have
happened or to have been performed precedent to or in the
issuance of such Bonds shall exist, have happened and have been
performed, and such Bonds, together with all other indebtedness
of the Agency, shall be within every debt and other limit
prescribed by law.
910 . Issuance of Additional Obligations.
(A) The Agency shall not hereafter create or permit
the creation of. or issue any obligations or create any
additional indebtedness which will be secured by a charge and
lien on the Pledged Revenues, Mortgage Loans or Funds and
Accounts or which will be payable from the Interest Fund,
Sinking Fund, Mortgage Reserve Fund, Debt Service Reserve Fund
or Asset Accumulation Fund, except for the Bonds authorized
herein.
(B) The Agency expressly reserves the right to adopt
one or more other general bond resolutions for any of its
programs, and reserves the right to issue other obligations so
long as the same are not a charge or lien on the Pledged
Revenues, Mortgage Loans or Funds and Accounts, or payable from
the Funds or Accounts established and created pursuant to
Article V hereof, and maintained pursuant to - -the Resolution;
provided, however, that no such other general bond resolution
shall be adopted with respect to such a financing program nor
shall any obligations be issued under any such general bond
resolution if the amount of the Debt Service Reserve Fund is
less than the Debt Service Reserve Requirement.
911. Program Covenants.
(A) The Agency shall from time to time, with all
practical dispatch and in a sound and economical manner
consistent in all respect with the Act and with the provisions
of this Resolution, use and apply the proceeds of the Bonds to
the purchase of Mortgage Loans, and shall do all such acts and
things necessary to receive and collect or cause to be received
and collected Revenues and Escrow Payments, as may be
consistent with sound banking practices and principles and
shall diligently enforce, and take all steps, actions and
proceedings reasonably necessary in the judgment of the Agency
for the enforcement of all terms, covenants and conditions of
Mortgages and Mortgage Loans.
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(B) No Mortgage Loan shall be purchased under this
Resolution unless the Trustee has first received ( i) a proper
Requisition identifying the Mortgagor, the Residence and the
Qualified Mortgage Lender to whom payment is to be made; ( ii)
to duly executed promissory note evidencing the Mortgage Loan
and a certified copy of the duly executed Mortgage together
with a duly recorded or recordable assignment of said Mortgage;
( iii) a properly endorsed Mortgage Insurance certificate or a
firm commitment for such endorsement; ( iv) a current ALTA title
insurance policy with appropriate endorsements (or an
irrevocable commitment therefor) duly assigned to the Trustee
insuring that the Mortgage constitutes a first lien on the
Residence ( subject only to Permitted Encumbrances) ; and (v)
properly endorsed earthquake ( if commercially available) and
Hazard Insurance policies or binders.
(C) All Servicing Agreements entered into pursuant to
this Resolution shall include the provisions of the Servicers'
Guide, as approved by the Agency, ( including provisions to
insure diligent action by the Servicer to foreclose on or
assign to the Mortgage Insurer any Defaulted Mortgage Loan and
provisions to insure that the servicer regularly bills and
collects all payments due on each Mortgage Loan and, to the
extent permitted by law, deposits all insurance premiums , taxes
and other similar payments in an Escrow Account) , and the
Agency will not amend the Servicers' Guide to reduce the
standard of performance of Servicers thereunder to less than
those required by FHLMC.
(D) The Agency shall diligently- enforce, and take all
steps, actions and proceedings reasonably- necessary in the
judgment of the Agency for the enforcement of all terms,
covenants and conditions of Mortgage Loan Purchase Agreements,
Servicing Agreements, Commitment Contracts, the Sellers' Guide
and Servicers' Guide.
(E) Nothing in this Resolution shall be construed to
prohibit the Agency (or the Trustee acting for and on behalf of
the Agency) from causing a Qualified Mortgage Lender to
repurchase a_ Mortgage Loan at par in accordance with the
applicable Mortgage Loan Purchase Agreement.
(F) Each Mortgage Loan purchased by the Agency shall
be originated so as - to bear an annual interest rate which
produces an actuarial yield which is not in excess of one and
one-half percentage points over the actuarial yield on the
Bonds exclusive of any Mortgage Insurance premiums, Hazard
Insurance Premiums , taxes or similar charges to be paid by the
Mortgagor.
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(G) The Agency shall require Qualified Mortgage
Lenders and Servicers to comply with all rules and regulations
of the Mortgage Insurer issuing Mortgage Insurance for the
applicable Mortgage Loan and shall further require Qualified
Mortgage Lenders and Servicers to hold the Agency, the Trustee
and the Bondholders harmless for non-compliance with such rules
and regulations.
(H) The proceeds of Mortgage Insurance or foreclosure
or sale of the Residence or liquidation of a Mortgage Loan or
the net proceeds of Hazard Insurance or Special Hazard
Insurance paid to the Trustee shall be deposited in the Revenue
Fund, except that for the period terminating March 1 , 1984, (or
March 1 , 1985 , if the Agency has extended said date pursuant to
Section 504(E) such proceeds shall be deposited in the Mortgage
Loan Purchase Account.
( I) The Trustee, on behalf of the Agency, may at any
time sell, assign or otherwise dispose of one or more Mortgage
Loans:
(1) to provide funds to purchase one or more
Mortgage Loans which will provide an increased return to
the Agency, provided that no such sale, assignment or
disposal shall be made without the Agency first obtaining a
Counsel' s Opinion to the effect that any such increased
return will not cause the Bonds to be arbitrage bonds
pursuant to Section 103(c) of the Internal Revenue Code of
1954 , as amended; and, provided further, that the Agency
shall first deliver an appropriate Certificate of Projected
Pledged Revenues to the Trustee; and
(2) if, after giving effect thereto, funds.
available in all Funds and Accounts (other than the
Operating Fund and the Prior Redemption Fund) will permit
the defeasance .of all Outstanding Bonds pursuant to Article
XIV, as demonstrated by an Accountant' s Certificate
delivered to the Trustee prior to any such sale, assignment
or disposition.
(J) Commencing not later than March 1, 1984, and on
or about every September 1 and March 1 thereafter the Agency
will furnish the Trustee with an Asset Coverage Test
Certificate. The Trustee shall be entitled to rely on Asset
Coverage Test Certificates for the purpose of making
redemptions of Bonds and releasing amounts in the Asset
Accumulation Fund to the Agency for any lawful purpose, free of
the lien of this Resolution.
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912. Covenant as to the Purchase of Mortgage Loans Made for
a Purpose Other than the Financing of Residential Real Property
for Family Units. The Agency covenants that it will not apply
more than ten percent (10% ) of the proceeds of the sale of the
Bonds (after. deducting the Costs of Issuance and the amounts
deposited in the Debt Service Reserve Fund) to the purchase of
Mortgage Loans made for a purpose other than the Financing of
"residential real property for family units"l/ and "any land,
building, or other property functionally related and
subordinate to"2/ such residential real property for family
units.
913 . Non-Arbitrage Covenant. The Agency hereby covenants
that it will make no use of the proceeds of the Bonds at any
time during the term thereof which will cause the Bonds to be
arbitrage bonds within the meaning of Section 103 (c) of the
Internal Revenue Code of 1954, as amended, and any applicable
regulations promulgated thereunder.
914 . Non-Arbitrage Certification. The Treasurer of the
Agency is authorized to certify that on the basis of the facts,
estimates and circumstances in existence on the date of issue
of the Bonds it is not expected that the proceeds of the Bonds
will be used in a manner that would cause the Bonds to be
arbitrage bonds. In addition to the matters certified, the
Treasurer of the Agency is also authorized and instructed to
set forth in brief summary terms the facts and estimates upon
which the Agency' s expectation that the Bonds will not be used
in a manner that would cause the Bonds to be arbitrage bonds is
based. The certification of the Treasurer shall be delivered
to the purchaser together with the Bonds.
915. Covenant as to the Purchase of Graduated Payment
Mortgage Loans. The Agency covenants that it will not purchase
graduated payment Mortgage Loans insured under Section 245 of
the National Housing Act of 1934 , as amended.
1/ as defined by Treasury regulations, Section 1. 103-8(b)
2/ as defined by Treasury regulations, Section 1.103-8 (a) ( 3)
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ARTICLE X
a SUPPLEMENTAL RESOLUTIONS
1001. Supplemental Resolutions Effective . Without
Consent of Bondholders_. The Agency may adopt at any time or
from time to time a Supplemental Resolution or Supplemental
Resolutions for any one or more of the following purposes, and
any such Supplemental Resolution shall become effective in
accordance with its terms and upon filing with the Trustee of a
copy thereof certified by an Authorized Officer with or without
the consent of Bondholders:
(1) to add additional covenants and agreements
of the Agency for the purpose of further securing the
payment of the Bonds, provided such additional covenants
and agreements are not contrary to or inconsistent with the
covenants and agreements of the Agency contained in this
Resolution.
( 2) to prescribe further limitations and
restrictions upon the issuance of Bonds and the incurring
of indebtedness by the Agency which are not contrary to or
inconsistent with the limitations and restrictions thereon
theretofore in effect;
( 3 ) to surrender any right, power or privilege
reserved to or conferred upon the Agency by the terms of
this Resolution;
(4) to confirm as further assurance any pledge
under and the subjection to any lien, claim or pledge
created or to be created by the provisions of this
Resolution of the Pledged Revenues, Mortgage Loans, Funds
and Accounts or of any other moneys, securities or funds;
( 5) with the consent of the Trustee, to cure any
ambiguity or defect or inconsistent provision in this
Resolution or to insert such provisions clarifying matters
or questions arising under this Resolution as are necessary
or desirable in the event any such modifications are not
contrary to or inconsistent with the resolution as
theretofore in effect.
1002. Supplemental Resolutions - Effective with Consent
of Bondholders. The provisions of this Resolution may be
further modified at any time or from time to time by a
Supplemental Resolution, subject to the consent of Bondholders
in accordance with and subject to the provisions of Article XI
hereof such Supplemental Resolution to become effective upon
the filing with the Trustee of a copy thereof certified by an
Authorized Officer.
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1003. General Provisions Relating to Supplemental
Resolutions. This Resolution shall not be modified or amended
in any respect except in accordance with and subject to the
provisions of this Article X and Article XI . Nothing contained
in this Article X or Article XI shall affect or limit the right
or obligation of the Agency to adopt, make, do, execute or
deliver any resolution, act or other instrument pursuant to the
provisions of Section 903 or the right or obligation of the
Agency to execute and deliver to the Trustee or any Paying
Agent any instrument elsewhere in this Resolution provided or
permitted to be delivered to the Trustee or any Paying Agent.
A copy of every Supplemental Resolution adopted by the
Agency when filed with the Trustee shall be accompanied by a
Counsel ' s Opinion stating that such Supplemental Resolution has
been duly and lawfully adopted in accordance with the
provisions of this Resolution, is authorized or permitted by
this Resolution and is valid and binding upon the Agency and
enforceable in accordance with its terms.
The Trustee is hereby authorized to accept delivery of a
certified copy of any Supplemental Resolution permitted or
authorized pursuant to the provisions of this Resolution and to
make all further agreements and stipulations which may be
contained therein, and, in taking such action, the Trustee
shall be fully protected in relying on Counsel ' s Opinion that
such Supplemental Resolution is authorized or permitted by the
provisions of this Resolution.
No Supplemental Resolution changing, amending or modifying
any of the rights or obligations of the- Trustee or any Paying
Agent may be adopted by the Agency without' the written consent
of the Trustee or Paying Agent affected thereby.
ARTICLE XI
AMENDMENTS OF RESOLUTION
1101. Powers of " Amendment. Any modification or
amendment of this Resolution and of the rights and obligations
of the Agency and of the Holders of the Bonds and coupons
thereunder in any particular, may be made by a Supplemental
Resolution, with the written consent given as hereinafter
provided in Section 1102 , of the Holders of at least two-thirds
in principal amount of the Bonds Outstanding at the time such
consent is given. No such modification or ' amendment shall
permit a change in the terms of redemption or maturity of the
principal of any Outstanding Bond or of any installment of
interest thereon or a reduction in the principal amount or the
Redemption Price thereof or in the rate of interest thereon
without the consent of the Holder of such Bond, or shall reduce
the percentages or otherwise affect the classes of Bonds the
consent of the Holders of which is required to effect any such
modification or amendment.
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1102. Consent of Bondholders. The Agency may at any
time adopt a Supplemental Resolution making a modification or
amendment permitted by the provisions of Section 1101 to take
effect when and as provided in this Section. A copy of such
Supplemental Resolution (or brief summary thereof or reference
thereto in form approved by the Trustee) together with a
request to Bondholders for their consent thereto in form
satisfactory to the Trustee, shall be mailed by the Agency to
Bondholders and shall be published at least once a week for two
( 2) successive weeks (but failure to mail such copy and request
shall not affect the validity of the Supplemental Resolution
when consented to as in this Section provided) . Such
Supplemental Resolution shall not be effective unless and until
( i) there shall have been filed with the Trustee ( a) the
written consent of Holders of the percentages of Outstanding
Bonds specified in Section 1101 and (b) a Counsel ' s Opinion
stating that such Supplemental Resolution has been duly and
lawfully adopted and filed by the Agency in accordance with the
provisions of this Resolution, is authorized or permitted by
this Resolution, and is valid and binding upon the Agency and
enforceable in accordance with its terms , and ( ii) a notice
shall have been published as hereinafter in this Section 1102
provided. Each such consent shall be effective only if
accompanied by proof of the holding, at the date of such
consent, of the Bonds with respect to which such consent is
given, which proof shall be such. as is permitted by Section
1301 . A certificate or certificates by the Trustee filed with
the Trustee that it has examined such proof and that such proof
is sufficient in accordance with Section 1301 shall. be
conclusive that the consents have been given by the Holders_ of
the Bonds described in such certificate. or "certificates of - the
Trustee. Any such consent shall be binding upon the Holder of
the Bonds giving such consent and, anything in Section 1301 to.
the contrary notwithstanding, upon any subsequent Holder of
such Bonds and of any Bonds issued in exchange therefor
(whether or not such subsequent Holder thereof has notice
thereof) , unless such consent is revoked in writing by the
Holder of such Bonds giving such consent or a subsequent Holder
thereof by filing with the Trustee prior to the time when the
written statement of the Trustee hereinafter in this Section
1102 provided for is filed, such revocation and, if such Bonds
are transferable by delivery, proof that such Bonds are held by
the signer of such revocation in the manner permitted by
Section 1301. The fact that a consent has not been revoked may
likewise be proved by a certificate of the Trustee to the
effect that no revocation thereof is on file with the Trustee.
At any time after the Holders of the required percentage of
Bonds shall have filed their consents to the Supplemental
Resolution, the- Trustee shall make and file with the Agency and
the Trustee a written statement that the Holders of such
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required percentage of Bonds have filed such consents. Such
written statement shall be conclusive evidence that such
-consents have been so filed. At any time thereafter notice,
stating in substance that the Supplemental Resolution (which
may be referred to as a Supplemental Resolution adopted by the
Agency on a stated date, a copy of which is on file with the
Trustee) has been consented to by the Holders of the required
percentage of Bonds and will be effective as provided in this
Section 1102, may be given to Bondholders by the Agency by
mailing such notice to Bondholders (but failure to mail such
notice shall not prevent such Supplemental Resolution from
becoming effective and binding as in this Section 1102
provided) and by publishing the same at least once not more
than ninety (90 ) days after the Holders of the required
percentage of Bonds shall have filed their consents to the
Supplemental Resolution and the -written statement of the
Trustee hereinabove provided for is filed. The Agency shall
file with the Trustee proof of the publication of such notice,
and, if the same shall have been mailed to Bondholders, of the
mailing thereof. A transcript, consisting of the papers
required or permitted by this Section 1102 to be filed with the
Trustee, shall be proof of the matters therein stated. Such
Supplemental Resolution making such amendment or modification
shall be deemed conclusively binding upon the Agency, the
Trustee, each paying Agent and the Holders of all Bonds and
coupons at the expiration of thirty (30 ) days after the filing
with the Trustee of the proof of the first publication of such
last mentioned notice, except in the event of a final decree of.
a court of competent jurisdiction setting aside such
Supplemental Resolution in a legal action or equitable-
proceeding for such purpose commenced within such thirty ( 30)
day period; provided, however, that the Agency, the Trustee and
any Paying Agent during such thirty ( 30) day period and any
.such further period during which any such action or proceeding
may be pending shall be entitled in their absolute discretion
to take such action., or to refrain from taking such action,
with respect to such Supplemental Resolution as they may deem
expedient.
1103. Modifications by Unanimous Consent. The terms
and provisions of this Resolution and the rights and
obligations of the Agency and of the Holders of the Bonds and
coupons thereunder may be modified or amended in any respect
upon the adoption and filing with the Trustee by the Agency of
a Supplemental Resolution and the consent of the Holders of all
of the Bonds then Outstanding, such consent to - be given as
provided in Section 1102, except that no notice of Bondholders
either by mailing or publication shall be required.
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1104. Mailing and Publication.
(A) Any provision in this Article for_ the mailing of
a notice or other document to Bondholders shall be fully
complied with if it is mailed postage prepaid only ( i) to each
registered owner of Bonds then Outstanding at his address, if
any, appearing upon the registry books of the Trustee, ( ii) to
each Holder of any Bond payable to bearer who shall have filed
with the Trustee within thirty (30) days preceding such mailing
an address for notices and the number or numbers of their
respective Bonds, and ( iii) to the Trustee.
(B) Any provision in this Article for publication of
a notice or other matter shall require the publication thereof
only in an Authorized Newspaper.
1105. Exclusion of Bonds. Bonds owned or held by or
for the account of the Agency shall not be deemed Outstanding
for the purpose of consent or other action or any calculation
of Outstanding Bonds provided for in this Article, and the
Agency shall not be entitled with respect to such Bonds to give
any consent or take any other action provided for in this
Article. At the time of any consent or other action taken
under this Article, the Agency shall furnish the Trustee a
certificate of an Authorized Officer, . upon which the Trustee
may rely, describing all Bonds so to be excluded.
1106. Notation on Bonds. Bonds delivered after the
- effective date of any action taken as in Article X or this
Article provided may, and if the Trustee so determines, shall
bear a notation by endorsement or otherwise inform approved by
the Agency and the Trustee as to such action, and in that case,
upon demand of the Holder of any Bond Outstanding at such
effective date and upon presentation of said Bond for the
purpose at the Principal Office of the Trustee, suitable
notation shall be made on such Bond by the Trustee as to any
such action. If the Agency or the Trustee shall so determine,
new Bonds so modified as in the opinion of the Trustee, and the
Agency to conform to such action shall be prepared and
delivered, and upon demand of the Holder of any Bond then
Outstanding shall be exchanged, without cost to such
Bondholder, for Bonds of the same maturity then Outstanding,
upon surrender of such Bonds with all unpaid coupons, if any,
appertaining thereto.
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ARTICLE XII
-DEFAULTS AND REMEDIES
1201. Events of Default. Each of the following events
is hereby declared an "Event of Default" :
(1 ) if the payment of the principal or Redemption
Price of any Bond or any Sinking Fund . Installment is not made
when and as the same shall become due, whether at maturity or
upon call for redemption, or otherwise; or
( 2) if the payment of interest on any Bond is not
made when and as the same shall become due and such default
shall continue for a period of thirty ( 30) days; or
( 3) if the Agency shall fail or refuse to comply with
the provisions of the Act, or shall default in the performance
or observance of any other of the covenants, agreements, or
conditions on its part in this Resolution, any Supplemental
Resolution, or in the Bonds contained, and continuance of such
default for a period of ninety ( 90) days after written notice
thereof by the Trustee; or
( 4) if the Agency shall file a petition or answer
seeking reorganization or arrangement under the federal
bankruptcy laws or any other applicable law of the United
States of America, or if a court of competent jurisdiction
V shall approve a petition, filed with or without the consent of .
the Agency, seeking reorganization under the federal bankruptcy
laws or any other applicable law of the United States of
America, or if, under the provisions of any other law for the
relief or aid of debtors, any court of competent jurisdiction
shall assume custody or control of the Agency or of the whole
or any substantial part of its property; provided, however,
that an event of default shall not be deemed to exist under the
provisions of paragraph (3) above upon the failure of any
Servicer to enforce any obligation undertaken by a Mortgagor
pursuant to the provisions of a Mortgage, including the making
of the repayments required pursuant to such Mortgage, so long
as the Servicer may be otherwise permitted by law and so long
as the Agency shall be provided with money sources, other than
withdrawals from or reimbursements of the Debt Service Reserve
Fund, sufficient in amount to pay the Sinking Fund Installments
of and interest on all Bonds as the same shall become due
during the period for which the Servicer shall be permitted by
law to abstain from enforcing the obligations of Mortgagors
under the applicable Mortgages.
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1202. Remedies. Upon the happening and continuance of
any event of default specified in Section 1201, then, and in
each -case, the- - Trustee - may proceed, and upon the written
request of the Holders of not less than twenty-five percent
( 25%) in principal amount of the Outstanding Bonds shall
proceed, in its own name, to protect and enforce its rights and
the rights of the Bondholders by such of the following
remedies, as the Trustee, being advised by counsel, shall deem
most effectual to protect and enforce such rights:
(1) by suit, action or proceeding, enforce all rights
of the Bondholders, including the right to require Servicers to
collect repayments required pursuant to the Mortgage held by
them adequate to carry out the covenants and agreements
contained in this Resolution and to require the Agency to
perform its duties under the Act;
(2) by bringing suit upon the Bonds or to enforce
payment of other sums payable to the Trustee or any Paying
Agent;
(3) by action or suit, require the Agency to account
as if it were the trustee of an express trust for the Holders
of the Bonds; and
( 4) by action or suit, enjoin any acts or things
which may be unlawful or in violation of the rights of the
Holders of the Bonds or to compel the Agency or any Qualified
Mortgage Lender or Servicer to perform their respective duties
under this Resolution and any Servicing Agreement, Commitment
Contract or Mortgage Loan Purchase Agreement.
1203 . Priority of Payments After Default. In the event
that the funds held by the Trustee and Paying Agents shall be
insufficient for the payment of interest and Principal
Installments or Redemption Price then due on the Bonds and
under this Resolution, such funds and any other moneys received
or collected by the Trustee acting pursuant to this Resolution
and this Article XII, after making provision for the payment of
any expenses necessary in the opinion of the Trustee to protect
the interests of the Holders of the Bonds, and for the payment
of the charges and expenses and liabilities incurred and
advances made by the Trustee in the performance of its . duties
under this Resolution shall be applied as follows:
(1) Unless the principal of all the Bonds shall have
become due and payable,
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First: To the payment to the persons entitled
thereto of all installments of interest then due in the order
of the maturity of such installments, and, if the amount
available shall not be sufficient to pay in full any
installment, then to the payment thereof ratably, according to
the amounts due on such installment, to the persons entitled
thereto, without any discrimination or preference; and
Second: To the payment to the persons entitled
thereto of the unpaid Redemption Price of any Bonds which shall
become due, whether at maturity or by call for redemption, in
the order of their due dates and, if the amounts available
shall not be sufficient to pay in full all the Bonds due on any
date, then to the payment thereof ratably, according to the
amount of Redemption Price due on such date, to the persons
entitled thereto, without any discrimination or preference.
(2) If the principal of all of the Bonds shall have
become due and payable, to the payment of the principal and
interest then due and unpaid upon the Bonds without preference
or priority of principal over interest or interest over
principal, or of any installment of interest over any other
installment of interest, or of any Bond over any other Bond,
ratably, according to the amounts due respectively for
principal and interest, to the persons entitled thereto without
any discrimination or preference except as to any difference in
the respective rates of interest specified in the Bonds and
coupons.
The provisions of this Section 1203 are in all respects
subject to the provisions of Section. 902-.
Whenever moneys are to be applied by the Trustee pursuant
to the provisions of this Section, such moneys shall be applied
by the Trustee at such times, and from time to time, , as the
Trustee in its sole discretion shall determine, 'having due
regard to the amount of such moneys available for application
in the future; the deposit of such moneys with the Paying
Agents, or otherwise setting aside such moneys in trust for the
proper purpose, shall constitute proper application by the
Trustee; and the Trustee. shall incur no liability whatsoever to
the Agency, to any Bondholder, or to any other person for any
delay in applying any such moneys, so long as the Trustee acts
with reasonable diligence, having due - regard for the
circumstances, and ultimately applies the same in accordance
with such provisions of this Resolution as may be applicable at
the time of application by the Trustee. Whenever the Trustee
shall exercise such discretion in applying such moneys, it
shall fix the date (which shall be an Interest Payment Date
unless the Trustee shall deem another date more suitable) upon
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which such application is to be made and upon such date
interest on the amounts of principal to be paid on such date
shall cease to accrue. The Trustee shall give such notice as
" it may deem appropriate for the fixing of any such date. The
Trustee shall not be required to make payment to the Holder of
any unpaid coupon or any Bond unless such coupon or such Bond
shall be presented to the Trustee for appropriate endorsement
or for cancellation as fully paid.
1204. Termination of Proceedings. In case any proceeding
taken by the Trustee on account of any Event of Default shall
have been discontinued or abandoned for any reason, then in
every such case the Agency, the Trustee and the Bondholders
shall be restored to their former positions and rights
hereunder, respectively, and all rights, remedies, powers and
duties of the Trustee shall continue as though no such
proceeding had been taken.
1205. Bondholders' Direction of Proceedings. Anything
in this Resolution to the contrary notwithstanding, the Holders
of the majority in principal amount of the Bonds then
Outstanding shall have the right, by an ' instrument or
concurrent instruments in writing executed and delivered to the
Trustee, to direct the method of conducting all remedial
proceedings to be taken by the Trustee hereunder; provided that
such direction shall not be otherwise than in accordance with
law or the provisions of this Resolution, and that the Trustee
shall have the right to decline to follow any such direction
which in the opinion of the Trustee would be unjustly
prejudicial to Bondholders not parties to such direction.
1206. Limitation on Rights of Bondholders. No Holder
of any Bond shall have any right to institute any suit, action
or othe proceeding hereunder, or for the protection or
enforcement of any right under this Resolution or any right
under- law unless such Holder shall have given to the Trustee
written notice of the Event of Default or breach of duty on
account of which such suit, action or proceeding is to be
taken, and unless the Holders of not less than twenty-five
percent (25% ) in pri-ncipal amount of the Bonds then Outstanding
shall have made written request of the Trustee after the right
to exercise such powers or right of action, as the case may be,
shall have accrued, and shall have afforded the Trustee a
reasonable opportunity either to proceed to exercise the powers
herein granted or granted under law or to institute such
action, suit or proceeding in its name and unless, also, there
shall have been offered to the Trustee reasonable security and
indemnity against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee shall have refused
or neglected to comply with such request within a reasonable
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t
time; - and such notification, request and offer of indemnity are
hereby declared in every such case, at the option of the
Trustee, to be conditions precedent to the execution of the
powers under this Resolution or for any other remedy hereunder
or under law. It is understood and intended that no one or
more Holders of the Bonds hereby secured shall have any right
in any manner whatever by his or their action to affect,
disturb or prejudice the security of this Resolution, or to
enforce any right hereunder or under law with respect to the
Bonds or this Resolution, except in the manner herein provided,
and that all proceedings shall be instituted, had and
maintained in the manner herein provided and for the benefit of
all Holders of the Outstanding Bonds and coupons.
Anything to the contrary notwithstanding contained in this
Section 1206 , or any other provision of this Resolution, each
Holder of any Bond by his acceptance thereof shall be deemed to
have agreed that any court in its discretion may require, in
any suit for the enforcement of any right or remedy under the
Resolution or any Supplemental Resolution, or in any suit
against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an
undertaking to pay the reasonable costs of such suit, and that
such court may in its discretion assess reasonable costs,
including reasonable attorneys ' fees, against any party
litigant in any such suit, having due regard to the merits and
good faith of the claims or defenses made by such litigant; but
the provisions of this paragraph shall not apply to any suit
-- instituted by the Trustee, to any suit instituted by any
Bondholder, or group of Bondholders, holding at least
twenty-five percent ( 25% ) in principal amount of the Bonds
Outstanding, or to any suit instituted by any Bondholder for
the enforcement of the payment of the principal or Redemption
Price of or interest on any Bond on or after the respective due
date thereof expressed in such Bond.
1207. Possession of Bonds by Trustee Not Required. All
rights of action under this Resolution or under any of the
Bonds, enforceable by the Trustee, may be enforced by it
without the possession of any of the Bonds or the coupons
appertaining thereto or the production thereof on the trial or
other proceeding relative thereto, and any such unit, action or
proceeding instituted by the Trustee shall be brought in its
name and for the benefit of all of the Holders of such Bonds
and coupons, subject to the provisions of this Resolution.
1208. Remedies Not Exclusive. No remedy herein
conferred upon or reserved to the Trustee or to Holders of the
Bonds is intended to be exclusive of any other remedy or
remedies, and each and every such remedy shall be cumulative
and shall be in addition to any other remedy given hereunder or
now or hereafter existing at law or in equity or by statute.
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1209. No Waiver of Default. No delay or omission of
the Trustee or of any Holder of the Bonds to exercise any right
or--power accruing upon -any default shall impair any such right
or power or shall be construed to be a waiver of any such
default or an acquiescence therein and every power and remedy
given by this Resolution to the Trustee and the Holders of the
Bonds, respectively, may be exercised from time. to time and as
often as may be deemed expedient.
1210. Notice of Event of Default. The Trustee shall
give to the Bondholders notice of each Event of Default
hereunder known to the Trustee within ninety ( 90) days after
knowledge of the occurrence thereof, unless such Event of
Default shall have been remedied or cured before the giving of
such notice; provided that, except in the case of default in
the payment of the Redemption Price or interest on any of the
Bonds, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive
committee, or a trust committee of directors or responsible
officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the
Bondholders. Each such notice of event of default shall be
given by the Trustee by mailing written notice thereof; (1) to
all registered Holders of Bonds , as the names and addresses of
such Holders appear on the books of registration and transfer
of Bonds as kept by the Trustee; and ( 2) to such Bondholders as
have filed their names and addresses with the Trustee for that
purpose.
ARTICLE XIII
EXECUTION OF INSTRUMENTS BY BONDHOLDERS AND PROOF OF
OWNERSHIP OF BONDS
1301. Evidence of Signatures of Bondholders and
Ownership of Bonds. Any request, direction, consent,
-revocation of consent, or other instrument in writing required
or permitted by this Resolution to be signed or executed by
Bondholders may be in any number of concurrent instruments or
similar tenor, and may be signed or executed by such
Bondholders in person or by their attorneys or agents appointed
by an instrument in writing for that purpose or, in the case of
Coupon Bonds, by any bank, trust company or other depository of
such Bonds. Proof of the execution of any such instrument, or
of any instrument appointing any such attorney or agent, and of
the holding and ownership of Bonds shall be sufficient for any
purpose of this Resolution (except as otherwise herein
provided) , if made in the following manner:
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(1 ) The fact and date of the execution by any
Bondholder or his attorney or agent of any such instrument and
of --any - instrument appointing any such attorney or agent may be
proved by delivery of a certificate, which need not be
acknowledged or verified, of an officer of any bank, trust
company, or other depository or of any notary public, or other
officer authorized to take acknowledgements. Where any such
instrument is executed by an officer of a corporation or
association or a member of a partnership, on behalf of such
corporation, association or partnership, such . certificate shall
also constitute sufficient proof of his authority.
( 2) The fact of the holding of Coupon Bonds by any
Bondholder and the amount and the numbers of such Bonds and the
date of his holding the same may be proved by a certificate
executed by an officer of any bank, trust company, or other
depository, if such certificate shall be deemed by the Trustee
to be satisfactory, showing that at the date therein mentioned
such person had on deposit with or exhibited to such bank,
trust company, or other depository the Bonds described in such
certificate. The Trustee may conclusively assume that such
ownership continues until written notice of the contrary is
served upon the Trustee. The ownership of Registered Bonds
shall be proved by the registry books held by the Trustee under
the provisions of this Resolution.
Nothing contained in this Article shall be construed as
limiting the Trustee to such proof, it being intended that the
Trustee may accept any other evidence of the matters herein
stated which may seem sufficient. Any request or consent of
the Holder of any Bond shall bind every future Holder of the
same Bond in respect of anything done or suffered to be done by
the Agency, the Trustee or any Paying Agent in pursuance of
such request or consent.
ARTICLE XIV
DEFEASANCE
1401 Defeasance.
(A) If the Agency shall pay or cause to be paid, or
there shall otherwise be paid, to the Holders of the Bonds and
coupons then Outstanding, the Redemption Price and interest to
become due thereon, at the times and in the manner stipulated
therein and in this Resolution, then and in that event the
covenants, agreements and other obligations of the Agency to
the Bondholders shall be discharged and satisfied. In such
event, the Trustee shall, upon request of the Agency, execute
and deliver to the Agency all such instruments as may be
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desirable to evidence such release and discharge and execute
and deliver to the Servicer thereof assignments (which
assignments shall-- be received by -the Servicer as- trustee of the
Agency) of any Mortgage Loans held by the Trustee under this
Resolution, and the Trustee and the Paying Agent shall pay over
or deliver to the Agency all moneys or securities held by them
pursuant to this Resolution which are not required for the
payment or redemption of Bonds or coupons not theretofore
surrendered for such payment or redemption.
(B) Bonds or coupons or Interest Installments for the
payment or redemption of which moneys shall then be held by the
Trustee or the Paying Agents (through deposit by the Agency of
funds for such payment or redemption or otherwise) , whether at
or prior to the maturity or the Redemption Date of such Bonds,
shall be deemed to have been paid within the meaning and with
the effect expressed in subsection (A) of this Section 1401.
All Outstanding Bonds and all coupons appertaining to such
Bonds shall, prior to the maturity or Redemption Date thereof,
be deemed to have been paid within the meaning and with the
effect expressed in subsection (A) of this Section 1401 if ( i)
in case any of said Bonds are to be redeemed on any date prior
to their maturity, the Agency shall have given to the Trustee,
in form satisfactory to it, irrevocable instruction to publish
as provided in Article IV of this Resolution notice of
redemption on said date of such Bonds, ( ii) there shall have
been deposited with the Trustee either moneys in an amount
which shall be sufficient, or Federal Securities the principal
and interest on which when due will provide moneys which
together with the moneys, if any, deposited with the Trustee at
the same time, shall be sufficient to pay when due. the
principal or Redemption Price and interest due and to become
due on said Bonds on and prior to the Redemption Date or
maturity date thereof, as the case may be, and ( iii) in the
event that said Bonds are not by their terms subject to
redemption within the next succeeding sixty ( 60) days, the
Agency shall have given the Trustee in form satisfactory to it
irrevocable instructions to publish, as soon as practicable, at
least twice at an interval of not less than seven ( 7) days
between publications, in an Authorized Newspaper a notice to
the Holders of such Bonds and coupons that the deposit required
by ( ii) above has been made with the Trustee and that said
Bonds and coupons are deemed to have been paid in accordance
with subsection (A) of this Section 1401 and stating such
maturity or Redemption Date upon which moneys are to_ be
available for the payment of the Redemption Price and interest
on said Bonds. Neither Federal Securities nor moneys deposited.
with the Trustee pursuant to this Section nor . principal or
interest payments on any such Federal Securities shall be
withdrawn or used for any purpose other than, and shall be held
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in trust for, the payment of the Redemption Price and interest
- on said Bonds; provided that any cash received from such
principal or interest payments - on such Federal Securities
deposited with the Trustee, if not then needed for such
purpose, shall, to the extent practicable, be reinvested in
Federal Securities maturing at times and in principal amounts
sufficient to pay when due the Redemption Price and interest to
become due on said Bonds on and prior to such Redemption Date
or maturity date thereof, as the case may be, and interest
earned from such reinvestments shall be paid over to the Agency
as received by the Trustee, free and clear of any trust, lien
or pledge.
(C) Anything in this Resolution to the contrary
notwithstanding, any moneys held by the Trustee or Paying
Agents in trust for the payment and discharge of any of the
Bonds or coupons which remain unclaimed for four ( 4) years
after the date when such Bonds have become due and payable,
either at their stated maturity dates or by call for earlier
redemption, if such moneys were held by the Trustee or Paying
Agents at such date, or for four ( 4) years after the date of
deposit of such moneys if deposited with the Trustee or Paying
Agents after the said date when such Bonds became due and
payable, shall, at the written request of the Agency, be repaid
by the Trustee or Paying Agents to the Agency, as its absolute
property and free from trust, and the Trustee or Paying Agents
shall thereupon be released and discharged with respect thereto
and the Bondholders shall look only to the Agency for the
payment of such Bonds and coupons; provided, however, that
before being required to make any such payment to the Agency,
the Trustee or Paying Agent shall, at. the expense of the
Agency, cause to be published at least twice, at an interval of
not less than seven ( 7 ) days between publications, in an
Authorized Newspaper, a notice that said moneys remain
unclaimed and that, after a date named in said notice, which
date shall be not less than thirty (30) days after the date of
the first publication of such notice, the balance of such
moneys then unclaimed will be returned to .the Agency.
ARTICLE XV
FORMS AND EXECUTION OF BONDS AND COUPONS
1501. Forms of Bonds and Coupons of Bonds. Bonds in
coupon form and the coupons to be attached thereto, and Bonds
in registered form, shall be of substantially the following
forms and tenor with such additions thereto including but not
limited to, redemption schedules and prices, interest rates and
place or places of payment, all as otherwise provided for in
this Resolution.
-69-
(FORM OF COUPON BOND)
Community Redevelopment Agency of the City of Grand Terrace
San Bernardino -County, -State- of -California
No. $5,000
Residential Mortgage Revenue Bond
Issue of 1981
KNOW ALL MEN BY THESE PRESENTS that the Community
Redevelopment Agency of the City of Grand Terrace (hereinafter
sometimes called the "Agency" ) , a public body, corporate and
politic, organized and existing under, and by virtue of, the
laws of the State of California, for value received, hereby
promises to pay, from the sources of funds hereinafter
described, to the bearer upon presentation and surrender of
this Bond, the principal sum of
FIVE THOUSAND DOLLARS ( $5,000)
on the first day of March, , unless redeemed prior thereto
as hereinafter provided, and to pay interest thereon from the
date hereof at the rate of percent ( % ) per annum
commencing on March 1, 1982 and semiannually thereafter on the
first day of September and March of each year, upon
presentation and surrender of the attached coupons evidencing
such interest as the same respectively become due. Principal
of and interest and redemption premium, if any, on this Bond
are payable in lawful money of the United States of America,
which, at the time of payment is legal tender for the payment
of public and private debts, at the corporate trust office of
Security Pacific National Bank, in the City of Los Angeles,
State of California, or its successor, as trustee (herein
called the "Trustee" ) , or, at the option of the Holder of this
Bond, at the principal office of any Paying Agent, except that
principal and Redemption Price of Registered Bonds are payable
at the corporate trust office of the Trustee and interest on
Registered Bonds is payable by check or draft of the Trustee,
under Resolution No. CRA81-04 , "A Resolution of the Community
Redevelopment Agency of the City of Grand Terrace Authorizing
the Issuance of Residential Mortgage Revenue Bonds, Issue of
1981" , (herein called the "Resolution" ) adopted by the Agency
on February 26 , 1981 .
This Bond is a special obligation of the Agency and is one
of a duly authorized issue of bonds of the Agency issued in the
aggregate principal amount of $30 ,000 ,000 , designated
"Residential Mortgage Revenue Bonds, Issue of 1981 " (herein
called the "Bonds" ) , issued under and pursuant to Chapter 8 ,
commencing with Section 33750 , of Part 1 of Division 24 of the
Health and Safety Code of the State of California, as now or
hereafter amended (herein called the "Act" ) , and under and
pursuant to the Resolution.
-70-
Copies of the Resolution are on file at the office of the
Agency and at the corporate trust office of the Trustee, and
reference- to the Resolution and any and all supplements thereto
and modifications and amendments thereof and to the Act is made
for a description of the pledges and covenants securing the
Bonds; the nature, extent and manner of enforcement of such
pledges; the rights and remedies of. the bearers or registered
owners of the Bonds with respect thereto and the terms and
conditions upon which the Bonds are issued and may be issued
thereunder. To the extent and in the manner permitted by the
terms of the Resolution, the provisions of the Resolution or
any resolution amendatory thereof or supplemental thereto, may
be modified or amended by the Agency, with the written consent
of the holders of at least two-thirds in principal amount of
the Bonds then outstanding.
The Bonds are issuable in the form of coupon Bonds ( "Coupon
Bonds" ) in the denomination of $5,000 , and in the form of
registered Bonds without coupons ( "Registered Bonds" ) in the
denomination of $5 ,000 or an integral multiple thereof, not
exceeding the aggregate principal amount of Bonds maturing in
the year of maturity of the Bond for which the denomination of
the Bond is so specified. This Bond and the coupons hereto
attached are negotiable instruments and shall be negotiable by
delivery. This Bond ( issued in the form .-of a bearer bond and
herein sometimes referred to as "Coupon Bond" ) , is not
registrable by endorsement. Coupon Bonds, upon surrender
thereof at the corporate trust office of the Trustee, with all
unmatured coupons attached, may, at the option of the holder
thereof, be exchanged for an equal aggregate principal amount
of Registered Bonds of the same maturity of any of the
authorized denomination, in the manner, subject to the
conditions, and upon the payment of the charges, if any, .
including after the first exchange, the cost of preparing a new
Bond, as provided in the Resolution. In like manner, subject
to such conditions and upon the payment of such charges,- if
any, including after the first exchange the cost of preparing a
new Bond, Registered Bonds, upon surrender thereof at the
corporate trust office of the Trustee with a written instrument
of transfer satisfactory to the Trustee, duly executed by the
registered owner or his attorney duly authorized in writing,
may, at the option of the registered owner thereof, be
exchanged for an aggregate principal amount of Coupon Bonds,
with appropriate coupons attached, or of Registered Bonds
without coupons of any other authorized denominations, of the
same maturity.
The Bonds are subject to redemption, at the option of the
Agency and upon the giving of notice required by the
Resolution, either in whole on a date on or after March 1 ,
-71-
1991 , or in part in the manner provided in the Resolution, on
March 1 ; 1991 , or on any interest payment date thereafter, at a
redemption price ( expressed as- percentages of the principal
amount of the Bonds or portions thereof to be redeemed) set
forth below, plus in each case accrued interest to the
Redemption Date:
Period
(Both Dates Inclusive) Redemption Prices
March 1 , 1991 to February 29 , 1992 102%
March 1 , 1992 to February 28 , 1993 101-1/2%
March 1 , 1993 to February 28 , 1994 101%
March 1 , 1994 to February 28., 1995 100-1/2%
March 1, 1995 and thereafter 1000
The Bonds are also subject to special mandatory redemption
in whole or in part, in the manner provided in the Resolution,
( i) at the principal amount thereof and accrued interest
thereon, without premium, at any time on or after March 1 ,
1984 , from and to the extent there are funds in the mortgage
loan purchase account established by the Resolution which have
not been applied to the purchase of mortgage loans within three
(3 ) years from the date of delivery of the Bonds; and ( ii) on
any interest payment date on or after March 1, 1982 from and to
the extent there are funds in the asset accumulation fund
established by the Resolution prior to meeting the asset
coverage test defined in the Resolution and thereafter to the
extent necessary to maintain the asset coverage test, all as
provided in the Resolution. The Agency reserves the right to
determine that a date four ( 4 ) years rather than three ( 3 )
years from the date of delivery of the Bonds shall be the date
upon which the Bonds become subject to special mandatory
redemption pursuant to ( i) above. Upon the special mandatory
redemption or optional redemption of Bonds , the Bonds maturing
on March 1 , 1999 shall be redeemed prior to the redemption of
any other Bonds and the Bonds maturing March 1 , 2014 shall be
redeemed subsequent to any other Bonds. Bonds other than the
Bonds maturing on March 1 , 1999 and on March 1 , 2014 shall,
upon special mandatory redemption or optional redemption, be
redeemed pro rata by maturity in the manner provided in the
Resolution.
The Bonds maturing on March 1 , 1999 and March 1 , 2013 are
also subject to mandatory redemption in part by lot at the
principal amount thereof plus .accrued interest to the date of
redemption thereof, without premium, from sinking fund
installments which are required to be made in amounts
sufficient to redeem on March 1 of each year the principal
amount of such Bonds specified for each of the years below
(unless any such principal amount shall be reduced as provided
in the Resolution by reason of earlier redemption of Bonds) .
-72-
Sinking fund installments with respect to the Bonds
maturing on March 1 , 1999 shall be made in the years and
amounts a-s follows:
Year Amount
1992 $300 ,000
1993 335,000
1994 370 ,000
1995 410 ,000
1996 455,000
1997 510 ,000
1998 565,000
1999 (maturity) 630 ,000
Sinking fund installments with respect to the Bonds on
March 1 , 2013 shall be made in the years and amounts as follows:
Year Amount Year Amount
2000 $675,000 2008 1 ,655 ,000
2001 770 ,000 2009 1 ,845 ,000
2002 860 ,000 2010 2,035,000
2003 960 ,000 2011 2 ,295 ,000
2004 1 ,070 ,000 2012 2,555 ,000
2005 1 , 195 ,000 2014 (maturity) 2 ,850 ,000
2006 1 ,330 ,000
2007 1 ,485 ,000
In the event of the redemption of any or all of the_ Bonds.,
notice of such redemption ( i) shall be given by publication at
least once in a newspaper of general circulation or financial
paper in the City of Los Angeles, California, and in the Daily.
Bond Buyer or other financial paper or newspaper circulated in
New York, New York, each of which is published at least once a
day for at least five ( 5) days (other than legal holidays) in
each calendar week, and is printed in the English language, the
first such publication to be not less than twenty-five ( 25)
days nor more than sixty ( 60 ) days prior to the redemption
date, and ( ii) shall be mailed postage prepaid, not less than
twenty (20) days nor more than sixty (60) days prior to - the
redemption date to the registered owners of any Bonds or
portions of Bonds to be redeemed and to owners of any Coupon
Bond to be redeemed who have filed their names and addresses
and numbers of Bonds with the Trustee; provided, however, that
such mailing shall not be a condition precedent to such
redemption and failure so to mail any such notice shall not
affect the validity of the proceedings for the redemption of
Bonds. Notice of redemption having been given, as aforesaid,
Bonds or ,portions thereof so called for redemption shall become
-73-
a
dbe and payable at the applicable redemption price herein
provided, and from and after the date so fixed for redemption,
interest - on the Bonds or portions thereof so called for
redemption shall cease t.o accrue and become payable and the
coupons for interest appertaining to Coupon Bonds maturing
subsequent to the redemption date shall be void.
This Bond shall not be deemed to constitute a debt of the
Agency, the City of Grand Terrace, the State of California or
any other political subdivision of the State nor a pledge of
the faith and credit of the Agency or the City of Grand
Terrace. This Bond is a special obligation of the Agency,
payable solely from payments made on mortgage loans purchased
with the proceeds of Bonds and other moneys deposited in the
Revenue Fund and the other funds and accounts pledged therefor
in the Resolution.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts,
conditions and things required by the Constitution and statutes
of the State of California and the Resolution to exist, to have
happened and to have been performed precedent to and in the
issuance of this Bond, exist, have happened and have been
performed in due time, form and manner as required by law and
that the issuance of the Bonds, together with all other
indebtedness of the Agency, is within every debt and other
limit prescribed by law.
This Bond shall not be entitled to any benefit under the
Resolution or become valid or obligatory for any purpose until
it shall have been authenticated by the certificate of the
Trustee endorsed hereon.
IN WITNESS WHEREOF, the Community Redevelopment Agency of
the City of Grand Terrace caused this Bond to be executed in
its name by the manual or . facsimile signature of its Chairman
or Vice Chairman and its corporate seal (or a facsimile
thereof) to be affixed, imprinted, engraved or otherwise
reproduced hereon, and attested by the manual or facsimile
signature of its Secretary and the interest coupons hereto
attached to be executed by the facsimile signature of the
Secretary, all as of the 1st day of March, 1981 .
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF GRAND TERRACE
By
Chairman
(SEAL)
ATTEST:
r
Secretary
-74-
a
(Form of Coupon)
No. $
On the First Day of the COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF GRAND TERRACE, on March 1 , , (unless
the Bond hereinafter mentioned shall have been duly called for
previous redemption and payment of the redemption price made or
duly provided for) will pay to bearer the amount shown in
lawful money of the Unites States which, on the date of payment
hereof, shall be legal tender for the payment of public and
private debts, at the corporate trust office of Security
Pacific National Bank, in the City of Los Angeles, State of
California, or, at the option of the holder of this Bond, at
Bankers Trust Company, New York, New York or Harris Trust and
Savings Bank, Chicago, Illinois, upon presentation and
surrender of this coupon, being the interest then due on its
Residential Mortgage Revenue Bond, Issue of 1981 , dated October
1 , 1980 , No.
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF GRAND TERRACE
By
Secretary
(Form of Certificate of Authentication)
This Bond is one of an issue described in the Resolution
within mentioned.
as Trustee
By
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Authorized Officer
(FORM OF REGISTERED BOND)
Community Redevelopment Agency of the City of Grand Terrace
San Bernardino County, State of California
No. R_
Residential Mortgage Revenue Bond
Issue of 1981
KNOW ALL MEN BY THESE PRESENTS that the Community
Redevelopment Agency of the City of Grand Terrace. (hereinafter
sometimes called "Agency" ) a public body, corporate and
politic, organized and existing under, and by virtue of, the
laws of the State of California, for value received, hereby
promises to pay, from the sources of funds hereinafter
described, to or registered assigns,
the principal sum of THOUSAND DOLLARS
($ ) on the first day of March 1 , , unless redeemed
prior thereto as hereinafter provided, upon the presentation
and surrender hereof at the corporate trust office of Security
Pacific National Bank, in the City of Los Angeles, State of
California, or its successors, as trustee (herein called the
"Trustee" ) under Resolution No. CRA81-04 , "A Resolution of the
Community Redevelopment Agency of the City of Grand Terrace
Authorizing the Issuance of Residential Mortgage- Revenue Bonds,
Issue of 1981 " , (herein called the "Resolution" ) adopted by the
Agency on February 26 , 1981 , and to pay to the registered owner
hereof by check or draft of the Trustee interest on such
principal sum from the date hereof at the rate of
percent ( % ) per annum commencing - on March 1 , 1982 and
semiannually thereafter on the first day of September and March
of each year. Principal of and interest and redemption
premium, if any, on this Bond are payable in lawful money of
the United States of America which at the time of payment is
legal tender for the payment of public and private debts.
This Bond is a special obligation of the Agency and is one
of a duly authorized issue of bonds of the Agency issued in the
aggregate principal amount of $30 ,000 ,000 , designated
"Residential Mortgage Revenue Bonds, Issue of 1981 " (herein
called the "Bonds" ) , issued under and pursuant to Chapter 8 ,
commencing with Section 33750 , of Part 1 of Division 24 of the
Health and Safety Code of the State of California, as now or
hereafter amended (herein called the "Act" ) , and under and
pursuant to the Resolution.
-76-
Copies of the Resolution are on file at the office of the
Agency and at the corporate trust office of the Trustee, and
-reference -to the Resolution and any and all supplements thereto
and modifications and amendments thereof and to the Act is made
for a description of the pledges and covenants securing the
Bonds, the nature, extent and manner of enforcement of such
pledges, the rights and remedies of the bearers or registered
owners of the Bonds with respect thereto and the terms and
conditions upon which the Bonds are issued and may be issued
thereunder. To the extent and in the manner permitted by the
terms of the Resolution, the provisions of the Resolution or
any resolution amendatory thereof or supplemental thereto, may
be modified or amended by the Agency, with the written consent
of the holders of at least two-thirds in principal amount of
the Bonds then outstanding.
This Bond is transferable, as provided in the Resolution,
only upon the bond register kept for that purpose at the
corporate trust office of the Trustee by the registered owner
hereof in person, or by his attorney duly authorized in
writing, upon the surrender of this Bond together with a
written instrument of transfer satisfactory to the Trustee duly
executed by the registered owner or his attorney duly
authorized in writing, and thereupon a new Registered Bond or
Bonds, without coupons, and in the same aggregate principal
amount and of the same maturity, shall be issued to the
transferee in exchange therefor as provided in the Resolution,
and upon the payment of the charges , if any, including, after
the first exchange, the cost of preparing new Bonds, therein
prescribed.
The Bonds are issuable in the form of coupon Bonds ( "Coupon
Bonds" ) in the denomination of $5 ,000 , and in the form of
registered Bonds without coupons ( "Registered Bonds" ) in the
denomination of $5 ,000 or any integral multiple thereof, not
exceeding the aggregate principal amount of Bonds maturing in
the year of maturity of the Bond for which the denomination of
the Bond is so specified. Coupon Bonds , upon surrender thereof
at the corporate trust office of the Trustee, with all
unmatured coupons attached, may, at the option of the holder
thereof, be exchanged for an equal aggregate principal amount
of Registered Bonds of the same maturity of any of the
authorized denominations, in the manner, subject to the
conditions, and upon the payment of the charges, if any,
including after the first exchange, the cost of preparing a new
Bond, as provided in the Resolution. In like manner, subject
to such conditions and upon the payment of such charges, if
any, including after the first exchange the cost of preparing a
new Bond, Registered Bonds, upon surrender thereof at the
corporate trust office of the Trustee with a written instrument
-77-
of transfer satisfactory to the Trustee, duly executed by the
registered owner or his attorney duly authorized in writing,
may, at ---the option of -the registered owner thereof, be
exchanged for an equal aggregate principal amount of Coupon
Bonds, with appropriate coupons attached, or of Registered
Bonds without coupons of any other authorized denominations, of
the same maturity.
The Bonds are subject to redemption, at the option of the
Agency and upon the giving of notice required by Resolution,
either in whole on any date, on or after March 1, 1991 or in
part, in the manner provided in the Resolution, on March 1 ,
1991 , or on any interest payment date thereafter, at a
redemption price (expressed as percentages of the principal
amount of the Bonds or portions thereof to be redeemed) set
forth below, plus in each case accrued interest to the
redemption date:
Period
(Both Dates Inclusive) Redemption Prices
March 1 , 1991 to February 29 , 1992 102%
March 1 , 1992 to February 28, 1993 101-1/2%
March 1 , 1993 to February 28, 1994 101%
March 1 , 1994 to February 28 , 1995 100-1/2 %
March 1, 1995 and thereafter 100%
The Bonds are. also subject to special mandatory redemption
in whole or in part in the manner provided in the Resolution,
at the principal amount thereof and accrued interest thereon,
without premium, ( i) at any time on or after March 1 , 1984,
from and to the extent there are funds in the mortgage loan
purchase account as established by the Resolution which have
not been applied to the purchase of mortgage loans within three
(3) years from the date of delivery of the Bonds; and ( ii) on
any interest payment date on or after March 1, 1982 from and to
the extent there are funds in the asset accumulation fund as
established by the Resolution prior to meeting the asset
coverage test as defined in the Resolution and thereafter to
the extent necessary to maintain the asset coverage test, all
as provided in the Resolution. The Agency reserves the right
to determine that a date four ( 4) years rather than three ( 3)
years from the date of delivery of the Bonds shall be the date
upon which the Bonds become subject to special mandatory
redemption pursuant to ( i) above. Upon the special mandatory
redemption or optional redemption of Bonds, the Bonds maturing
on March 1 , 1999 shall be redeemed prior to the redemption of
any other Bonds and the Bonds maturing March 1 , 2014 shall be
redeemed subsequent to any other Bonds. Bonds other than the
Bonds maturing on March 1 , 1999 and on March 1 , 2014 shall,
upon special mandatory redemption or optional redemtion, be
redeemed pro rata by maturity in the manner provided in the
Resolution.
-78-
The Bonds maturing on March 1 , 1999 and March 1 , 2013 are
also subject to mandatory redemption in part by lot at the
-principal- amount -thereof - plus accrued interest to the date of
redemption thereof, without premium, from sinking fund =w
installments which are required, to be made in amounts
sufficient to redeem on March 1 of each year the principal
amount of such Bonds ' specified for each of the years below
(unless any such principal amount shall be reduced as provided
in the Resolution by reason of earlier redemption of Bonds) .
Sinking fund installments with respect to the Bonds
maturing March 1 , 1999 shall be made in the years and the
amounts as follows:
Year Amount Year Amount
1992 $300 ,000 1996 455 ,000
1993 335,000 1997 510 ,000
1994 370 ,000 1998 565 ,000
1995 410 ,000 1999 (maturity) 630 ,000
Sinking fund installments with respect to the Bonds
maturing March 1 , 2013 shall be made in the years and the
amounts as follows:
Year Amount Year Amount
2000 $695 ,000 2008 1 ,655 ,000
-- ' 2001 770 ,000 2009 1 ,845,000
2002 860 ,000 2010 2 ,055 ,000
2003 960 ,000 2011 2,295,000
2004 1 ,070 ,000 2012 2 ,555 ,000
2005 1 , 195,000 2013 (maturity) 2 ,850 ,000
2006 1 ,330 ,000
2007 1 ,485,000
In the event of the redemption of any or all of the
Bonds, notice of such redemption ( i) shall be given by
publication at least once in a newspaper of general circulation
or financial paper in the City of Los Angeles, California, and
in the Daily Bond Buyer or other financial paper or newspaper
circulated in New York, New York, each of which is published at
least once a day for at least five (5) days (other than legal
holidays) in each calendar week, and is printed in the English
language, the first such publication to be not less than
twenty-five (25) days nor more than sixty (60 ) days prior to
the redemption date, and ( ii) shall be mailed postage paid, not
less than twenty ( 20 ) days nor more than sixty ( 60) days prior
to the redemption date to the registered owners of any Bonds or
portions of Bonds to be redeemed and to owners of any Coupon
-79-
J
Bond to be redeemed who have filed their names and addresses
and numbers of Bonds with the Trustee; provided, however, that
such mailing shall not be a condition precedent to such
redemption and failure so to mail any such notice shall not
affect the validity of the proceedings for the redemption of
Bonds. Notice of redemption having been given, as aforesaid,
Bonds or . portions thereof so called for redemption shall become
due and payable at the applicable redemption price herein
provided, and from and after the date so fixed- for redemption,
interest on the Bonds or portions thereof so called for
redemption shall cease to acrue and become payable and the
coupons for interest appertaining to Coupon Bonds maturing
subsequent to the redemption date shall be void.
This Bond shall not be deemed to constitute a debt of the
Agency, the City of Grand Terrace, the State of California or
any other political subdivision of the State nor a pledge of
the -faith and credit of the Agency or the City of Grand
Terrace. This Bond is a special obligation of the Agency,
payable solely from payments made on mortgage loans purchased
with the proceeds of Bonds and other moneys deposited in the
revenue fund and the other funds and accounts pledged therefor
in the Resolution.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts,
conditions and things required by the Constitution and statutes
of the State of Califonia and the Resolution to- exist, to have
happened and to have been performed precedent- to and in the
issuance of this Bond, exist, have happened and have been
performed in due time, form and manner as required by law and
that the issuance of the Bonds, together with all other
indebtedness of the Agency, is within every debt and other
limit prescribed by law.
This Bond shall not be entitled to any benefit under the
Resolution or become valid or obligatory for any purpose until
it shall have been authenticated by the certificate of the
Trustee endorsed hereon.
IN WITNESS WHEREOF, the Community Redevelopment Agency of
the City of Grand Terrace has caused this Bond to be executed
in its name by the manual or facsimile signature of its
Chairman or. Vice Chairman and its corporate seal (or a
-80-
facsimile thereof) to be affixed, imprinted, engraved or
otherwise reproduced hereon, and attested by the manual or
-facsimile signature of - its Secretary all as o-f the day
of ,
COMMUNTIY REDEVELOPMENT AGENCY ,
OF THE CITY OF GRAND TERRACE
By:
Chairman
(SEAL)
ATTEST:
t
Secretary
(Form of Certificate of Authentication)
This Bond is one of an issue described in the Resolution
within mentioned.
SECURITY PACIFIC NATIONAL BANK,
as Trustee
By:
Authorized Officer
-81-
S ;
(Form of Assignment)
ASSIGNMENT
For value received
the undersigned do(es) hereby sell, assign and transfer unto
_ the within-mentioned Registered Bond and hereby irrevocably
constitute(s) and appoint(s)
attorney, to transfer the same on the
books of the Trustee with full power of substitution in the
premises.
Date:
Note:The signature ( s) on this
Assignment must
correspond with the
name(s) as written on
the face of the within
Registered Bond in every
particular without
alteration or
enlargement or any
change whatsoever.
-82-
f ARTICLE XVI
MISCELLANEOUS
1601 . Preservation and Inspection of Documents. All
documents received by the Trustee or any Paying Agency under
the provisions of this Resolution shall be retained in its
possession and shall be subject at all reasonable times to the
inspection of the Agency, the Trustee, or any Paying Agent,
and, upon written request of not less than five percent ( 5% ) in
principal amount of the Holders of the Outstanding Bonds,
Bondholders and their agents and representatives, any of whom
may make copies thereof.
1602. Destruction of Bonds an4 Coupons. Any Bonds
purchased or redeemed by the Trustee under this Resolution
shall be cancelled by the Trustee. Whenever in this Resolution
provision is made for the cancellation by the Trustee and the
delivery to the Agency of any Bonds or any coupons, including
Bonds cancelled under the first sentence of this Section, the
Trustee may, upon request of the Agency (evidenced by an
Officer' s Certificate) , in lieu of such cancellation and
delivery, destroy such Bonds and coupons ( in the presence of an
officer of the Agency, if the Agency shall so require) , and
deliver a certificate of such destruction to the Agency.
1603 . Parties of Interest. Nothing in this Resolution,
expressed or implied, is intended to or shall be construed to
-1 confer upon or to give any person or party other than the
Agency, Trustee, Paying Agents and the Holders of the Bonds and
coupons appertaining thereto any. rights, remedies or claims
under or by reason of this Resolution or any covenant,
condition' or stipulation thereof; and all covenants,
stipulations, promises and agreements in this Resolution
contained by or on behalf of the Agency shall be for the sole
and exclusive benefit of the Agency, Trustee and Paying Agents
and the Holders from time to time of the Bonds and the coupons
appertaining thereto.
1604. No Recourse Under Resolution or on Bonds. All
covenants, stipulations, promises, agreements and obligations
of the Agency contained in this Resolution shall be deemed to
be the covenants, stipulations, promises, agreements and
obligations of the Agency and not of any member, officer or
employee of the Agency in his individual capacity, and no
recourse shall be had for the payment of the Redemption Price
of or interest on the Bonds or for any claim based thereon or
on this Resolution against any member, officer or employee of
the Agency or any person executing the Bonds.
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4
1605. Survival of Covenants. The obligation of the Agency
under Section 807 shall survive payment and cancellation of the
Bonds and defeasance pursuant to Section 1401 .
1606 . Severability. If any one or more of the covenants ,
stipulations, promises, agreements or obligations provided, in
this Resolution on the part of the Agency, Trustee or any .
Paying Agent to be performed should be determined by a court of
competent jurisdiction to be contrary to law, then - such
covenant or covenants, stipulation or stipulations, promise or
promises, agreement or agreements , or bligation or obligations
shall be deemed and construed to be serable from the remaining
covenants, stipulations, promises, agreements and obligations
herein contained and shall in no way affect the validity of the
other provisions of this Resolution.
1607. Headings. Any headings preceding the text of the
several Articles and Sections hereof, and any table of contents
or marginal notes appended to copies hereof, shall be solely
for convenience or reference and shall not constitute a part of
this Resolution, nor shall they affect is meaning, construction
or effect.
1608. Conflict. All resolutions or parts of resolutions
or other proceedings of the Agency in conflict herewith shall
be and the same are repealed insofar as such conflict exists.
1609 . Effective Date. This Resolution shall take effect
immediately upon its adoption.
ADOPTED this 26th day of February, 1981 .
: Chairma ,ty
Redev o Agenc of the
City of Grand Terrace
ATTEST:
SecreY
y of the Co munity
Redevelopment Agency of the
City of Grand Terrace
The duties and obligations herein imposed upon the Trustee
and the other provisions hereof relating to the Trustee are
agreed to and accepted .
SECURITY PACIFIC NATIONAL BANK
By :
By:
Date :
-84-
STATE OF CALIFORNIA ) _
COUNTY OF SAN BERNARDINO ) ss.
CITY OF GRAND TERRACE ) _
I , MYRNA LINDAHL, Secretary of the City of Grand Terrace
Community Redevelopment Agency, DO HEREBY CERTIFY that the foregoing
Resolution was duly adopted by the Community Redevelopment Agency
of said City at a regular meeting of the Community Redevelopment
Agency held on the 26th day of February 19 81 , and that
it was so adopted by the following vote:
AYES: Members Grant, Petta, Nix, Rigley;
Chairman Tillinghast
NOES: None
ABSENT: None
i1W_.^�
Secre ary of the Community
Redevelopment Agency of the
City of Grand Terrace .
(SEAL)
STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss.
CITY OF GRAND TERRACE )
I, MYRNA LINDAHL, Secretary of the City of Grand Terrace
Community Redevelopment Agency; DO HEREBY CERTIFY that the above and
foregoing is a full , true and correct copy .of Resolution No. CRA-81-04
of said Agency, and that the same has not been amended or repealed.
DATED: February 26, 1981
Secre ry of the Co unity
Redevelopment Agency of the
City of Grand Terrace
(SEAL)