HomeMy WebLinkAboutMINUTES - 04152003 - C79 i
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TO: REDEVELOPMENT AGENCY/BOARD OF SUPERVISORS
FROM: John Sweeten, Executive Director
Dennis M. Barry, AICP, Director of Community Development
ment
DATE: April 15, 2003
SUBJECT: Hidden Cove Apartment Financing, Bay Point
SPECIFIC REQUEST(S) OR RECOMMENDATIONS(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS
As the Board of Supervisors,ADOPT Resolution authorizing the issuance of tax exempt bonds
for the acquisition/rehabilitation of the Hidden Cove Apartments, and actions related thereto;
and
As the Redevelopment Agency, APPROVE and AUTHORIZE execution of a Regulatory
Agreement and Declaration of Restrictive Covenants.
FISCAL IMPACT
None. The bonds are entirely secured by a revenue pledge and reserve accounts. The
County is compensated for its costs of issuance and annually for monitoring expenses.
BACKGROUND/REASONS FOR RECOMMENDATIONS
See next page.
CONTINUED ON ATTACHMENT: _X_YES SIGNATURE:
r2L zz�
_RECOMMENDATION OF EXECUTIVE DIRECTOR R OMME ATION OF GENCY
COMMITTEE -APPROVE _ OTHER
SIGNATURE(S):
ACTION OF AGENCY!ON April 15, 2003 APPROVED AS RECOMMENDED �; OTHER
SUPERVISORS
VOTE OF COMMISSIONERS/SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A
UNANIMOUSABSENT . T
UNANIMOUS (ABSENT . RUE AND CORRECT COPY OF AN
AYES: NOES: ACTION TAKEN AND ENTERED ON THE
ABSENT: ABSTAIN: MINUTES OF THE BOARD OF
JADISTRICT III SEAT VACANT SUPERVISORS/AGENCY ON THE
Contact: Jim Kennedy DATE SHOWN.
5-1255
orig: Community Development
cc: County Administrator ATTESTED April 15, 2003
County Counsel
Redevelopment Agency JOHN SWEETEN, CLERK OF
via Community Development THE BOARD OF SUPERVISORS/
* Steadfast Properties AGENCY SECRETARY
* Orrick Herrington & Sutcliffe y
BY ��'
DEPUTY
W:\Personal\BoardOrders\BOARD.Joint.RDA.hiddencove.4.03
. 1
BACKGROUND/REASONS FOR RECOMMENDATIONS
On January 14,2003 the Board of Supervisors approved an Inducement Resolution conditionally
stating its intent to issue multi-family mortgage revenue bonds for the acquisition and
rehabilitation of the Hidden Cove Apartments, Bay Point. Since that time the County has
received the necessary authority from the California Debt Limit Allocation Committee to issue
private activity bonds f or the project. The property is to be owned by Steadfast Hidden Cove,
L.P., a California limited partnership. The Hidden Cove Apartments are an 88-unit project
located at 2901 Mary Ann Lane, Bay Point. The project is an existing affordable housing project
whose continuing affordability is at-risk of expiring,and could not reasonably be expected to
remain affordable to very low-income families without the proposed financing. The project was
one of the first housing developments in Calif ornia to be f inanced with the federal Low Income
Housing Tax Credit Program back in 1988. The required period of affordability will expire in
2004. The proposed financing is consistent with County/Redevelopment Agency's policies to
upgrade the quality and affordability of its existing housing stock. The resolution before you
provides the necessary authority to sell such bonds. The bond sale resolution authorizes a
number of actions,a summary of which is provided as Attachment A. The following is additional
background on the project and the financing.
The Bond Regulatory Agreement of the County will require that at least 18 of the total 88-units
(20% of the project) be reserved as units to very low-income households (50%of area median
income) for fifty-f ive years. Because of the owner's intent to qualify 100% of the units as
affordable units using the 4%Low Income Housing Tax Credit Program,the remaining 70 units
in the project will be affordable to low income households at 60% of area median income. An
analysis of current tenancy indicates that no relocation obligations would result from the
transaction.
The proposed financing and the credentials of Steadfast Hidden Cove,L.P., a California limited
partnership have been thoroughly evaluated by staff. The County completed the
acquisition/rehabilitation of the Hilltop Commons Project in West County with this developer in
2001. The financing budgets almost $900,000 in property improvements ($10,000/unit).
Improvements include replacement of HVAC, water heaters, kitchen appliances/cabinets,
carpeting/vinyl, interior/exterior paint,and landscape improvements/pruning.
The bonds to be issued will finance the acquisition and rehabilitation of the Hidden Cove
Apartments. The bonds will be secured by a pledge of rents and reserve accounts. The bonds
will be sold on a private placement basis. The bonds will be unrated. The proposed issuance of
unrated bonds complies with the County's adopted polices f or the issuance such bonds,including
independent financial review of the real estate, large denomination bonds only, sophisticated
investor requirements,and continuing investor requirements. The bonds are to be issued in one
series as follows:
• 2003 Issue A (Hidden Cove Apartments in an amount not to exceed
$7,400,000)
No pledge of County revenues is involved in securing the bonds.
The Redevelopment Agency wi I I be signator to the Regulatory Agreement in order to provide the
Agency with the ability to claim production credit under California Redevelopment law. The
Agency has also negotiated a property tax in-lieu payment because the financing will permit the
project to qualify for a property tax exemption.
2 W:\Personal\BoardOrders\BOARD.Joint.RDA.hiddencove.4.03
ATTACHMENT A
The Bond Sale Resolution authorizes a number of actions, a summary of
which follows:
1. Authorizes the issuance of revenue bonds in an amount not to exceed
$7,400,000;
2. Approves the form of Indenture between the County and Wells Fargo
Bank as Trustee;
3. Approves the form of Loan Agreement between the County, and the
Borrower, Steadfast Hidden Cove, L.P., a California limited
partnership;
4. Approves the form of Bond Placement Agreement between the
County, and Newman and Associates, Inc. (the Underwriter), and the
Borrower;
5. Approves form of Regulatory Agreements between the County, the
Redevelopment Agency, and the Trustee, and the Borrower;
6. Designates Newman & Associates as the Placement Agent for the
Bonds;
7. Designates Orrick Herrington & Sutcliffe, as Bond Counsel;
8. Authorizes the Chair, Vice-Chair, County Administrator, Director of
Community Development, Deputy Director-Redevelopment to execute
documents and to take such other actions necessary to complete the
sale of bonds, and actions related thereto.
W:\Personal\BoardOrders\BOARD.Joint.RDA.hiddencove.4 .03 3
RESOLUTION NO. 2003/2 65
OF THE BOARD OF SUPERVISORS OF THE
COUNTY OF CONTRA COSTA
RESOLUTION AUTHORIZING THE ISSUANCE AND DELIVERY OF
MULTIFAMILY HOUSING REVENUE BONDS IN AN AGGREGATE
PRINCIPAL AMOUNT NOT TO EXCEED $7,400,000 TO FINANCE A
PORTION OF THE ACQUISITION AND REHABILITATION OF A
MULTIFAMILY RENTAL HOUSING PROJECT GENERALLY KNOWN AS
HIDDEN COME APARTMENTS; DETERMINING AND PRESCRIBING
CERTAIN MATTERS AND APPROVING AND AUTHORIZING THE
EXECUTION AND DELIVERY OF VARIOUS DOCUMENTS RELATED
THERETO; RATIFYING ANY ACTION HERETOFORE TAKEN AND
APPROVING RELATED MATTERS IN CONNECTION SAID BONDS.
WHEREAS,the County of Contra Costa(the "County") is authorized pursuant to
Section 52075 and following of the California Health and Safety Code (the "Act") to issue
revenue bonds for the purpose of financing, among other things, the acquisition and rehabilitation
of multifamily rental housing projects;
WHEREAS, the proceeds of such bonds may be loaned to a nongovernmental
owner of multifamily housing, who shall be responsible for the payment of such bonds, to allow
such nongovernmental owner to reduce the cost of operating such housing and to assist in
providing housing for low income persons;
WHEREAS, the County desires to participate in the financing of the acquisition
i r
e
RESOLUTION NO. 2003/265
OF THE BOARD OF SUPERVISORS OF THE
COUNTY OF CONTRA COSTA
RESOLUTION AUTHORIZING THE ISSUANCE AND DELIVERY OF
MULTIFAMILY HOUSING REVENUE BONDS IN AN AGGREGATE
PRINCIPAL AMOUNT NOT TO EXCEED $7,400,000 TO FINANCE A
PORTION OF THE ACQUISITION AND REHABILITATION OF A
MULTIFAMILY RENTAL HOUSING PROJECT GENERALLY KNOWN AS
HIDDEN COVE APARTMENTS; DETERMINING AND PRES CRIB ING
CERTAIN MATTERS AND APPROVING AND AUTHORIZING THE
EXECUTION AND DELIVERY OF VARIOUS DOCUMENTS RELATED
THERETO; RATIFYING ANY ACTION HERETOFORE TAKEN AND
APPROVING RELATED MATTERS IN CONNECTION WITH SAID BONDS.
WHEREAS,the County of Contra Costa (the "County") is authorized pursuant to
Section 52075 and following of the California Health and Safety Code (the "Act") to issue
revenue bonds for the purpose of financing, among other things, the acquisition and rehabilitation
of multifamily rental housing projects;
WHEREAS, the proceeds of such bonds may be loaned to a nongovernmental
owner of multifamily housing, who shall be responsible for the payment of such bonds, to allow
such nongovernmental owner to reduce the cost of operating such housing and to assist in
providing housing for low income persons;
WHEREAS, the County desires to participate in the financing of the acquisition
and rehabilitation of a 88-unit multifamily rental housing development generally known as
Hidden Cove Apartments (the "Project"), which will be owned and operated by Steadfast Hidden
r
Cove, LP, a California limited partnership, and entities related thereto (collectively, the
"Borrower"), and in order to do so intends to sell and issue not to exceed $7,400,000 of its
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multifamily housing revenue bonds in one or more series (as more fully described herein, the
"Bonds"), and to loan the proceeds thereof to the Borrower, thereby reducing the cost of the Project
and assisting in providing housing for very low income persons;
WHEREAS, there have been prepared and presented at this meeting the following
documents required for the issuance of the Bonds, and such documents are now in substantial form
and appropriate instruments to be executed and delivered for the purposes intended:
(1) Trust Indenture (the "Indenture") to be entered into between the County and
the trustee named therein (the "Trustee"), providing for the authorization and issuance of
the Bonds;
(2) Loan Agreement relating to the Bonds (the "Loan Agreement")to be entered
into between the County and the Borrower;
(3) Regulatory Agreement and Declaration of Restrictive Covenants (the
"Regulatory Agreement"), to be entered into among the Borrower, the County, the Trustee
and the Contra Costa County Redevelopment Agency; and
(4) Bond Placement Agreement(the"Placement Agreement") to be entered into
among the County, the Borrower and Newman & Associates, Inc., as placement agent for
the Bonds (the"Placement Agent");
NOW, THEREFORE, BE IT RESOLVED by the Board of Supervisors of the
County of Contra Costa, as follows:
Section 1. This Board hereby specifically finds and declares that the
statements, findings and determinations of the County set forth above are true and correct.
Section 2. Pursuant to the Act and the Indenture described herein, the County is
hereby authorized to issue the Bonds. The Bonds shall be designated as "County of Contra Costa
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40511-124 J78 2
J • L
Multifamily Housing Revenue Bonds (Hidden Cove Apartments Project) 2003 Series A," in an
aggregate principal amount not to exceed $7,400,000. The Bonds shall be in the form set forth in
and otherwise in accordance with the Indenture. The Bonds shall be executed by the manual or
facsimile signature of the Chair of the Board of Supervisors, and attested by the manual or facsimile
signature of the County Administrator and Clerk of the Board of Supervisors (the "Clerk"). The
Bonds shall be issued and secured in accordance with the terms of the Indenture presented at this
meeting, as applicable, and the payment of the principal of, redemption premium, if any, and
interest on, the Bonds shall be made solely from the amounts and assets pledged thereto under the
Indenture. The Bonds shall not be deemed to constitute a debt or liability of the County.
Section 3. The form of Indenture, on file with the Clerk, is hereby approved
and an Authorized Issuer Representative (as defined in the Indenture) is hereby authorized and
directed to execute and deliver the Indenture in substantially said form, with such changes therein
as such officers may require or approve, such approval to be conclusively evidenced by the
execution and delivery thereof. The date, maturity date or dates (which shall not extend beyond
April 1, 2043), interest rate or rates (which shall not exceed 12% per annum), interest payment
dates, denominations, form, registration privileges, manner of execution,place of payment, terms of
redemption and other terms of the Bonds shall be as provided in the Indenture as finally executed.
Section 4. The form of Loan Agreement, on file with the Clerk, is hereby
approved and an Authorized Issuer Representative is hereby authorized and directed to execute
and deliver the Loan Agreement in substantially said form, with such changes therein as such
officers may require or approve, such approval to be conclusively evidenced by the execution and
delivery thereof.
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Section 5. The form of the Regulatory Agreement, on file with the Clerk, is
hereby approved and an Authorized Issuer Representative is hereby authorized and directed to
execute and deliver the Regulatory Agreement in substantially said form, with such changes
therein as such officers may require or approve, such approval to be conclusively evidenced by
the execution and delivery thereof.
Section 6. The County is hereby authorized to sell the Bonds to the purchasers
thereof, as placed by the Placement Agent and as approved by an Authorized Issuer Representative
pursuant to the terms and conditions of the Placement Agreement. The form of the Placement
Agreement, on file with the Clerk, is hereby approved and an Authorized Issuer Representative is
hereby authorized and directed to execute and deliver the Placement Agreement in substantially
said form, with such changes therein as such officers may require or approve, such approval to be
conclusively evidenced by the execution and delivery thereof.
Section 7. The Bonds, when executed, shall be delivered to the Trustee for
authentication. The Trustee is hereby requested and directed to authenticate the Bonds by executing
the Trustee's certificate of authentication appearing thereon, and to deliver the Bonds, when duly
executed and authenticated, in accordance with written instructions executed and delivered on
behalf of the County by an Authorized Issuer Representative, which instructions are hereby
authorized and directed to be executed and delivered to the Trustees. Such instructions shall
provide for the delivery of the Bonds upon payment of the purchase price thereof.
Section 8. The Board hereby appoints Orrick, Herrington & Sutcliffe LLP,
San Francisco, California, as bond counsel.
Section 9. All actions heretofore taken by the officers and agents of the County
with respect to the financing of the Project and the sale and issuance of the Bonds are hereby
DOCSSFI 670705.3
40511-124 J78 4
approved, ratified and confirmed, and any Authorized Issuer Representative is hereby authorized
and directed, for and in the name and on behalf of the County, to do any and all things and take any
and all actions and execute and deliver any and all certificates, agreements and other documents,
including but not limited to those described in the Indenture, the Placement Agreement and the
other documents herein approved, which such officer, or any of them, may deem necessary or
advisable in order to consummate the lawful issuance and delivery of the Bonds and to effectuate
the purposes thereof and of the documents herein approved in accordance with this resolution and
resolutions heretofore adopted by the County and otherwise in order to carry out the financing of
the Project.
Section 10. All further consents, approvals, notices, orders, requests and other
actions permitted or required by any of the documents authorized by this resolution, whether
before or after the issuance of the Bonds, including without limitation any of the foregoing which
may be necessary or desirable in connection with any default under or amendment of such
documents, any transfer or other disposition of the Project, any addition or substitution of
security for the Bonds or any redemption of the Bonds, may be given or taken by an Authorized
Issuer Representative without further authorization by this Board of Supervisors, and such
Authorized Issuer Representative is hereby authorized and directed to give any such consent,
approval, notice, order or request and to take any such action which such officer may deem
necessary or desirable to further the purposes of this resolution and the financing of the Project.
Section 11. This Resolution shall take effect upon its adoption.
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40511-124 J78 5
PASSED AND ADOPTED THIS 15th day of April, 2003.
AYES: Supervisors Gioia, Uilkema, Glover and DeSaulnier
NOES: None
ABSENT: None
District III Seat Vacant
i
Chair of the Board of Supervisors
ATTEST: John Sweeten, County Administrator
and Clerk of the Board of Supervisors
By:
Deputy Clerk
cc: Community Development
DOCSSF1:670705.3
40511-124 J78 6
CLERK'S CERTIFICATE
Gina Martin Deputy Clerk of the Board of Supervisors
of the County of Contra Costa, hereby certify that the foregoing is a full, true and correct copy of
a resolution duly adopted at a regular meeting of the Board of Supervisors of said County duly
and regularly held at the regular meeting place thereof on April 15, 2003, of which meeting all of
the members of said Board of Supervisors had due notice and at which a majority thereof were
present; and that at said meeting said resolution was adopted by the following vote.--
AYES: Supervisors Gioia, Uilkema, Glover and DeSaulnier
NOES: None
ABSENT: None District III Seat Vacant
An agenda of said meeting was posted at least 72 hours before said meeting at 651
Pine Street, Martinez, California, a location freely accessible to members of the public, and a
brief general description of said resolution appeared on said agenda.
I further certify that I have carefully compared the same with the original minutes
of said meeting on file and of record in my office; that the foregoing resolution is a full, true and
correct copy of the original resolution adopted at said meeting and entered in said minutes; and
that said resolution has not been amended, modified or rescinded since the date of its adoption,
and the same is now in full force and effect.
WITNESS my hand and the seal of the County of Contra Costa this 15 th day of
April 2003.
John Sweeten, County Administrator and
Clerk of the Board of Supervisors
[SEAL]
By:
Deputy Clerk
DOCSSFI:670705.3
40511-124 J78
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BOND PLACEMENT AGREEMENT
by and among
COUNTY OF CONTRA COSTA,
STEADFAST HIDDEN COVE, L.P.,
GMAC COMMERCIAL HOLDING CAPITAL CORP.,
and
NEWMAN AND ASSOCIATES, A DIVISION OF GMAC COMMERCIAL HOLDING
CAPITAL MARKETS CORP.
Dated [CLOSING DATE]
Relating to:
$7,400,000
County of Contra Costa
Multifamily Housing Revenue Bonds
(Hidden Cove Apartments Project)2003 Series A
TABLE OF CONTENTS
P_age
Section1. Definitions...................................................................................................................................1
Section2. Purchase and Sale........................................................................................................................1
Section3. Closing........................................................................................................................................1
Section 4. Representations and Warranties of Issuer...................................................................................2
Section 5. Representations and Warranties of Borrower..............................................................................4
Section6. Covenants....................................................................................................................................5
Section7. Conditions of Closing..................................................................................................................6
Section 8. Actions and Events at the Closing...............................................................................................8
Section 9. Termination of Agreement..........................................................................................................8
Section 10. Fees and Expenses; Costs of Issuance.......................................................................................9
Section 11. Indemnification by Borrower....................................................................................................9
Section 12. Indemnification by Purchaser...................................................................................................10
Section13. Remarketing Agent..................................................................................................................11
Section14. Indexing Agent.........................................................................................................................11
Section15. Miscellaneous..........................................................................................................................11
EXHIBITA Glossary of Terms...............................................................................................................A-1
EXHIBITB Terms of Bonds ...................................................................................................................B-1
EXHIBIT C Form of Supplemental Opinion of Bond Counsel...............................................................C-1
EXHIBIT D Points To Be Covered in Opinion of Counsel to the Issuer/Certificate of Issuer................D-1
EXHIBIT E Form of Borrower's Counsel Opinion.................................................................................E-1
EXHIBIT F Form of Borrower's Bond Certificate..................................................................................F-1
EXHIBIT G Points To Be Covered in the Opinion of Trustee's Counsel/Trustee's Certificate..............G-1
EXHIBIT H Estimated Costs of Issuance................................................................................................H-1
BOND PLACEMENT AGREEMENT
NEWMAN AND ASSOCIATES, A DIVISION OF GMAC COMMERCIAL HOLDING
CAPITAL MARKETS CORP., a Colorado corporation (together with its designees, successors and
assigns, the "Placement Agent"), hereby offers to enter into the following agreement with GMAC
COMMERCIAL HOLDING CAPITAL CORP., a Colorado corporation (together with its designees,
successors and assigns, the "Purchaser"), the COUNTY OF CONTRA COSTA, a political subdivision
of the State of California (together with its successors and assigns, the "Issuer"), and Steadfast Hidden
Cove, L.P., a California limited partnership (together with its permitted successors and assigns, the
"Borrower"), to use its best efforts to arrange for the placement with the Purchaser or its designee of all
the Bonds described below, which are being issued by the Issuer for the benefit of the Borrower. Upon
your acceptance of this offer and your execution and delivery of this Bond Placement Agreement (the
"Agreement"), this Agreement will be binding upon each of you and the Placement Agent. This offer is
made subject to your acceptance, evidenced by your execution and delivery of this Agreement to the
Placement Agent, at or prior to 12:00 P.M., Pacific time, on [CLOSING DATE] and will expire if not so
accepted at or prior to such time(or such later time as the Placement Agent may agree in writing).
Section 1. Definitions. The capitalized terms used in this Agreement have the meanings
assigned to them in the Glossary of Terms attached as Exhibit A hereto.
Section 2. Purchase and Sale.
2.1 Subject to the terms and conditions set forth in this Agreement, the Placement
Agent hereby agrees to use its best efforts to arrange for the placement by the Issuer to the Purchaser of
all (but not less than all) of the Bonds. The Purchaser hereby agrees to purchase, or to cause its designee
to purchase, all (but not less than all) of the Bonds from the Issuer and the Issuer hereby agrees to sell to
the Purchaser or to the Purchaser's designee,when,as and if issued, all (but not less than all)of the Bonds
identified in Item 1 in Exhibit B attached hereto for a total purchase price equal to the purchase price set
forth as Item 2 on Exhibit B attached hereto.
2.2 The Bonds will be (i) issued in accordance with the Issuer's enabling legislation
and all applicable procedural and substantive requirements and the Indenture and (ii) have the payment
related terms (that is, the dated date, maturity date, interest rates, interest payment dates and redemption
provisions)set forth in Item 3 of Exhibit B attached hereto.
Section 3. Closing. The Closing will take place at the time and on the date set forth in Item
4 of Exhibit B or at such other time or on such other date as may be mutually agreed upon by you and the
Placement Agent. At the Closing, the Issuer will direct the Trustee to deliver the Bonds to or upon the
order of the Purchaser, in definitive form, duly executed and authenticated by the Trustee. Subject to the
terms and conditions hereof,the Issuer will deliver at the Place of Closing as set forth in Item 4 of Exhibit
B attached hereto, the other documents and instruments to be delivered pursuant to this Agreement (the
"Closing Documents") and the Purchaser will accept delivery of the Bonds and Closing Documents and
pay the purchase price for the Bonds as set forth in Section 2 above by wire transfer, to the Trustee, in
immediately available federal funds, for the account of the Issuer or as the Issuer directs. The Bonds will
be made available to the Purchaser at least one business day before the Closing for purposes of inspection.
The Bonds will be prepared and delivered as fully registered Bonds without coupons in the denominations
set forth in the Indenture.
Section 4. Representations and Warranties of Issuer.
4.1 The Issuer hereby makes the following representations and warranties to the
Purchaser and the Borrower, all of which will continue in effect subsequent to the purchase of the Bonds:
(a) The Issuer is a political subdivision of the State of California, and is
authorized to execute and deliver this Agreement and the Issuer Documents and to issue, sell and deliver
the Bonds pursuant to the laws of the State, including particularly the Act.
(b) The Issuer has, and as of the Closing Date will have, all necessary power
and authority to (i) execute and deliver this Agreement, the Resolution and the Issuer Documents, (ii)
issue the Bonds in the manner contemplated by this Agreement,the Resolution and the Indenture, and(iii)
otherwise consummate the transactions contemplated by this Agreement and the Issuer Documents.
(c) The Issuer has all necessary power and authority to issue the Bonds and
the Bonds have been issued in accordance with the Issuer's enabling legislation and all applicable
procedural and substantive requirements.
(d) The Issuer has duly adopted the Resolution at a meeting duly called and
held in accordance with applicable law and procedures of the Issuer, and since that time the Resolution
has not been rescinded, amended or modified.
(e) By official action of the Issuer prior to or concurrently with the
acceptance hereof, the Issuer has duly authorized the (i) execution and delivery of this Agreement, the
Bonds and the Issuer Documents, (ii)performance by the Issuer of the obligations contained in the Bonds
and in the Issuer Documents, and (iii) consummation by the Issuer of all of the transactions contemplated
hereby and by Issuer Documents.
(f) Assuming the valid authorization, execution and delivery of this
Agreement and the Issuer Documents by the other parties thereto and the authentication of the Bonds by
the Trustee, this Agreement is, the Bonds and the other Issuer Documents will be, the legal, valid and
binding obligations of the Issuer, enforceable in accordance with their respective terms, except to the
extent that enforcement thereof may be limited by bankruptcy, insolvency or other similar laws affecting
creditors' rights generally, or by the exercise of judicial discretion in accordance with general principles
of equity.
(g) All consents, approvals, orders or authorizations of,notices to, or filings,
registrations or declarations with any court or governmental authority, board, agency, commission or
body having jurisdiction which are required by or on behalf of the Issuer for the execution and delivery by
the Issuer of this Agreement, the Issuer Documents or the Bonds, or the consummation by the Issuer of
the transactions contemplated hereby or thereby,have been obtained or will be obtained prior to Closing,
except for the completion and filing of the IRS Form 8038 (which will be completed and filed after
Closing).
(h) The execution and delivery by the Issuer of this Agreement, the Bonds
and the Issuer Documents, and the consummation by the Issuer of the transactions contemplated hereby
and thereby are not prohibited by, do not violate any provision of, and will not result in the breach of or
default under (i) the Act, the Constitution of the State or the organizational documents of the Issuer, (ii)
any applicable law, rule, regulation,judgment, decree, order or other requirement applicable to the Issuer,
or (iii) any contract, indenture, agreement, mortgage, lease, note, commitment or other obligation or
instrument to which the Issuer is a party or by which the Issuer or its properties is bound.
2
(i) There is no legal action, suit, proceeding, investigation or inquiry at law
or in equity, before or by any court, agency, arbitrator, public board or body or other entity or person,,
pending or threatened against or affecting the Issuer or its officials, in their respective capacities as such,
or, to the best knowledge of the Issuer, any basis therefor, (i) which would restrain or enjoin the issuance
or delivery of the Bonds or the collection of revenues pledged under the Indenture, (ii) which would in
any way contest or affect the organization or existence of the Issuer or the entitlement of any officers of
the Issuer to their respective offices or (iii) which may reasonably be expected to contest or have a
material and adverse effect upon (A) the due performance by the Issuer of this Agreement or the Issuer
Documents or the transactions contemplated hereby or thereby, (B) the validity or enforceability of the
Bonds, the Resolution, this Agreement, the Issuer Documents or any other agreement or instrument to
which the Issuer is a party and that is used or contemplated for use in the consummation of the
transactions contemplated hereby and thereby, or(C) the exclusion from gross income for federal income
tax purposes of the interest on the Bonds. The Issuer is not subject to any judgment, decree or order
entered in any lawsuit or proceeding brought against it that would have such an effect.
0) When delivered to the Purchaser against payment therefor in accordance
with the provisions of this Agreement, the Bonds will be duly authorized, executed, issued, and delivered
and will constitute the Issuer's legal, valid and binding special, limited obligations, enforceable in
accordance with their terms (except to the extent that enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws affecting creditors' rights generally, or by the exercise of judicial
discretion in accordance with general principles of equity), and will be entitled to the benefit and security
of the Resolution and the Indenture.
(k) Other than the Issuer Documents, the Issuer has not entered into any
contract or arrangement that might give rise to any lien or encumbrance on the revenues or other assets,
properties, funds or interests pledged pursuant to the Indenture. The Issuer, as a conduit issuer, issues
bonds and notes as limited obligations payable solely from the revenues derived from the facilities
financed by such issues. Some bonds issued by the Issuer may have been in default, but the facilities
financed and the revenues derived from such facilities pursuant to the defaulted bond issues are separate
and distinct from the transactions contemplated by the Issuer Documents.
(1) The Issuer has not taken or omitted to take on or prior to the date hereof
any action, that would adversely affect the exclusion from gross income for federal income tax purposes
of the interest on the Bonds.
(m) The Issuer has not been notified of any listing or proposed listing by the
Internal Revenue Service to the effect that the Issuer is an issuer whose arbitrage certifications may not be
relied upon.
(n) On the Closing Date, each of the representations and warranties of the
Issuer contained herein and in the Issuer Documents and all other documents executed by the Issuer in
connection with the Bonds shall be true,correct and complete.
4.2 Each of the representations and warranties set forth in this section will survive
the Closing.
4.3 Any certificate signed by any official of the Issuer and delivered to the Placement
Agent and Purchaser in connection with the delivery of the Bonds will be deemed to be a representation
and warranty by the Issuer to the Placement Agent and the Purchaser as to the statements made therein.
3
Section 5. Representations and Warranties of Borrower.
5.1 The Borrower makes the following representations and warranties to the Issuer
and the Purchaser as of the date hereof, all of which will continue in effect subsequent to the purchase of
the Bonds:
(a) The Borrower is, and at all times will be, a limited partnership, duly
organized, validly existing and in good standing under the laws of the State and duly qualified, authorized
and licensed under the laws of the State to transact business as a limited partnership for the purpose of
owning and operating a multifamily housing facility in the State. The General Partner of the Borrower
(the "General Partner"), is, and at all times will be, a corporation, organized, existing and in good
standing under the laws of the State and is in good standing and duly qualified, authorized and licensed
under the laws of the State, to the extent required by applicable law. There are no other managing general
partners of the Borrower.
(b) The Borrower has, and on the Closing Date will have, full legal right,
power and authority (i) to execute and deliver the Loan Documents and (ii) to consummate the
transactions contemplated by this Agreement and the Loan Documents. The General Partner has, and on
the Closing Date will have, full legal right, power and authority to execute and deliver this Agreement
and the other Loan Documents on behalf of the Borrower.
(c) Prior to the acceptance hereof, the Borrower has duly authorized the
execution and delivery of this Agreement and the performance by the Borrower of the obligations
contained herein and prior to the Closing Date the Borrower will have duly authorized the (i) execution
and delivery of the Loan Documents, (ii)performance by the Borrower of the obligations contained in the
Loan Documents, and(iii)consummation by the Borrower of all transactions contemplated hereby and by
and the Loan Documents.
(d) All consents, approvals, authorizations or orders of,notices to, or filings,
registrations or declarations with, any court or governmental authority, board, agency, commission or
body having jurisdiction which are required on behalf of the Borrower or for the execution and delivery
by the Borrower of this Agreement and the other Loan Documents or the consummation by the Borrower
of the transactions contemplated hereby or thereby have been obtained or will be obtained prior to the
Closing Date.
(e) The Borrower has not taken or omitted to take on or prior to the date
hereof any action that would adversely affect the exclusion from gross income for federal income tax
purposes of the interest on the Bonds.
(f) All information concerning the Project, the Borrower, the General
Partner and the Guarantor submitted to the Issuer and the Purchaser and contained in the Borrower's
Bond Certificate attached hereto as Exhibit F is true and correct in all material respects and does not omit
to state a material fact necessary to make the statements therein not misleading.
(g) There is no legal action, suit, proceeding, inquiry or investigation at law
or in equity (before or by any court, agency, arbitrator, public board or body or other entity or person)
pending or threatened against or affecting the Borrower or the General Partner or, to the knowledge of the
Borrower, any basis therefor (i) in any way affecting the organization and existence of the Borrower, (ii)
contesting or materially affecting the validity or enforceability of this Agreement or the other Loan
Documents, (iii) contesting the powers of the Borrower or its authority with respect to the Loan
Documents, (iv) contesting the authority of the General Partner to act on behalf of the Borrower, (v)
4
wherein an unfavorable decision, ruling or finding would have a material adverse effect on (A) the
operations of the Borrower, (B) the due performance by the Borrower of the Loan Documents to which it
is a party as of the Closing Date, (C) the validity or enforceability of any of the Loan Documents, or(D)
the transactions contemplated hereby or by any Loan Document or (vi) in any way contesting the
exclusion from gross income for federal income tax purposes of the interest on the Bonds.
(h) This Agreement is, and, when executed and delivered by the Borrower
and the other parties thereto, the Loan Documents will be, the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their respective terms, except to the
extent that enforcement thereof may be limited by bankruptcy, insolvency or other similar laws affecting
creditors' rights generally, or by the exercise of judicial discretion in accordance with general principles
of equity.
(i) The execution and delivery by the Borrower of this Agreement and the
Loan Documents and the consummation by the Borrower of the transactions contemplated thereby and
hereby are not prohibited by, do not violate any provision of, and will not result in a breach of or default
under (i) the partnership agreement of the Borrower, (ii) any applicable law, rule, regulation, order, writ,
injunction, judgment or decree of any court or governmental body or other requirement to which the
Borrower is subject, or (iii) any contract, indenture, agreement, mortgage, lease, note, commitment or
other obligation or instrument to which the Borrower is a party or by which the Borrower or its properties
is bound.
5.2 Each of the representations and warranties set forth in this Section will survive
the Closing.
5.3 Any certificate signed by the Borrower or the General Partner and delivered to
the Purchaser shall be deemed a representation and warranty by the Borrower to the Purchaser as to the
statements made therein.
Section 6. Covenants.
6.1 The Issuer hereby makes the following covenants with the Purchaser and
Placement Agent:
(a) Prior to the Closing, the Issuer will not amend, terminate or rescind, and
will not agree to any amendment, termination or rescission of the Resolution or the Issuer Documents
without prior written notice to the Purchaser.
(b) Prior to the Closing, the Issuer will not create, assume or guarantee any
indebtedness payable from, or pledge or otherwise encumber, the revenues, assets, properties, funds or
interests which will be pledged pursuant to the Indenture and the other Issuer Documents.
(c) The Issuer will cause the Bonds to be delivered to the address and at the
time specified by the Purchaser in conjunction with the Closing.
(d) The Issuer will not take or omit to take any action which will in any way
cause the proceeds of the Bonds to be applied in a manner other than as provided in the Indenture or
which would cause the interest on the Bonds to be includable in the gross income of the holders thereof
for federal income tax purposes.
.5
(e) Prior to the Closing, the Issuer will obtain all governmental consents,
approvals, orders or authorizations of any governmental authority or agency that would constitute a
condition precedent to the performance by it of obligations under the Resolution, this Agreement, the
Issuer Documents and the Bonds.
6.2 The Borrower hereby makes the following covenants with the Issuer, the
Purchaser and the Placement Agent:
(a) The Borrower will not take or omit to take any action which will in any
way cause the proceeds of the Bonds to be applied in a manner other than as provided in the Indenture or
which would cause the interest on the Bonds to be includable in the gross income of the holders thereof
for federal income tax purposes.
(b) Prior to the Closing, the Borrower will obtain all governmental consents,
approvals, orders or authorizations of any governmental authority or agency that would constitute a
condition precedent to the performance by it of its obligations under this Agreement and the Loan
Documents. After the Closing, the Borrower will use its best efforts to obtain all governmental consents,
approvals, orders or authorizations of any governmental authority or agency would constitute a condition
precedent to the performance by it of its obligations under the remaining Loan Documents.
(c) The Borrower will not voluntarily undertake any course of action
inconsistent with the requirements applicable to it, as set forth in this Agreement and the Loan
Documents.
Section 7. Conditions of Closing.
7.1 The Purchaser has entered into this Agreement in reliance upon representations,
covenants and agreements of the Issuer and the Borrower contained herein, in reliance upon the
representations, covenants and agreements to be contained in the documents and instruments to be
delivered at the Closing and upon the performance by the Issuer and the Borrower of their obligations
hereunder,both as of the date hereof and as of the Closing Date. Accordingly, the Purchaser's obligations
under this Agreement to purchase, to accept delivery of and to pay for the Bonds will be sub j ect to the
performance by the Issuer and the Borrower of their obligations to be performed by them hereunder at or
prior to the Closing, and to the accuracy in all material respects of the representations, covenants and
agreements of the Issuer and of the Borrower contained herein as of the date hereof and as of the Closing
as if made on the Closing Date, and will also be subject to the following additional conditions:
(a) The Purchaser or the Placement Agent shall not have discovered any
material error,misstatement or omission in the representations and warranties made by either of the Issuer
or the Borrower in this Agreement, which representations and warranties will be deemed to have been
made again at and as of the time of the Closing and will then be true in all material respects.
(b) The Borrower and the Issuer shall have each performed and complied
with all agreements and conditions required by this Agreement to be performed or complied with by you
at or prior to Closing.
(c) This Agreement, the other Issuer Documents and the Loan Documents
each shall have been executed and delivered by each of the parties thereto, shall be in full force and effect
on and as of the Closing Date and shall be in form and substance satisfactory to the Purchaser and no
event of default shall exist under any such documents.
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7.2 In addition to the conditions set forth in Section 7.1, the obligations of the
Purchaser to consummate at the Closing the transactions contemplated hereby are subject to receipt by the
Purchaser of the following items:
(a) An opinion of Bond Counsel, dated the Closing Date and addressed to
the Placement Agent and the Purchaser, substantially in the form set forth in Exhibit C;
(b) An opinion of counsel or certificate of the Issuer, satisfactory in form
and substance to the Purchaser and the Placement Agent, dated the Closing Date and covering the points
identified in Exhibit D;
(c) An opinion or opinions of counsel to the Borrower, the General Partner
and the Guarantor, addressed to the Placement Agent and the Purchaser dated the Closing Date and
substantially in the form set forth in Exhibit E;
(d) A Borrower's Bond Certificate, dated the Closing Date and substantially
in the form set forth in Exhibit F and satisfactory in substance to the Purchaser and the Placement Agent;
(e) A certificate of the Borrower, dated the Closing Date and signed by the
General Partner,in form and substance satisfactory to the Purchaser and Bond Counsel, respecting certain
tax matters as may be reasonably required by Bond Counsel to enable it to give its opinion;
(f) An opinion of counsel to the Trustee or Trustee's certificate addressed to
the Placement Agent and Purchaser, covering the points identified in Exhibit G;
(g) A properly completed and executed IRS Form 8038;
(h) A certified copy of the Resolution and an executed original of each of the
Issuer Documents and the Loan Documents; and
(i) Such additional financing statements, legal opinions, certificates and
other documents as the Purchaser or Bond Counsel may reasonably deem necessary to evidence the truth
and accuracy as of the Closing Date of your respective representations and warranties herein contained
and to evidence compliance by the Issuer and the Borrower with this Agreement and all applicable legal
requirements, and the due performance and satisfaction by either of you at or prior to such time of all
agreements then to be performed and all conditions then to be satisfied by you.
7.3 If any of the conditions set forth in Sections 7.1 or 7.2 have not been met on the
Closing Date, the Purchaser may, at its sole option, terminate this Agreement or proceed to Closing upon
waiving any rights under this Agreement with respect to any such condition. If this Agreement is
terminated pursuant to this Section,neither party will have any rights or obligations to the other,except as
provided in Section 10.
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Section 8. Actions and Events at the Closing. The following events will take place at the
Closing:
(a) The Issuer will deliver the Bonds to the Purchaser or its designee, at the
place set forth in Item 4 in Exhibit B. The Bonds so delivered will be in the form required by the
Indenture, duly executed on behalf of the Issuer and authenticated by the Trustee, and will be fully
registered in the names requested by the Purchaser or its designee.
(b) The Borrower will deliver or cause to be delivered to the Purchaser at the
place set forth in Item 4 in Exhibit B, or at such other place or places as the parties hereto may mutually
agree upon,the materials described in Section 7.2.
(c) The Purchaser or its designee will deliver to the Trustee, for the account
of the Issuer or as the Issuer directs, an amount equal to the purchase price of the Bonds as set forth in
Item 2 of Exhibit B by wire transfer to the Trustee, in immediately available federal funds.
Section 9. Termination of Agreement. The Purchaser may terminate this Agreement,
without liability therefor,by notifying you at any time prior to the Closing if.-
(a)
f:(a) Any legislation is introduced in, or enacted by, the United States
Congress, or shall have been reported out of committee or be pending in committee, or any decision is
rendered by any court of competent jurisdiction, or any ruling or regulation, temporary regulation,release
or announcement shall have been issued or proposed by the Treasury Department of the United States,the
Internal Revenue Service, or any other agency of the government of the United States that, in the
reasonable judgment of the Purchaser, has the purpose or effect of subjecting interest on the Bonds to
inclusion in gross income for purposes of federal income taxation; or
(b) Any legislation is introduced in, or enacted by the United States
Congress or any action is taken by, or on behalf of, the Securities and Exchange Commission, that, in the
opinion of counsel to the Purchaser has the effect of requiring(i)the contemplated purchase of the Bonds,
or the Indenture or the Loan Agreement to be registered under the 1933 Act or the Indenture to be
qualified under the 1939 Act, or (ii) any governmental consents, approvals, orders or authorizations for
the consummation of the transactions contemplated by this Agreement, the Issuer Documents or the Loan
Documents which cannot,without undue expense,be obtained prior to the Closing Date.
8
(c) In the judgment of the Placement Agent it becomes impracticable to
market or place the Bonds or to enforce commitments for the purchase of Bonds because (A) additional
material restrictions not in force as of the date hereof shall have been imposed upon trading in securities
generally by any governmental authority or by any national securities exchange; (B) the New York Stock
Exchange or other national securities exchange, or any governmental authority, shall impose, as to the
Bonds or similar obligations, any material restrictions not now in force, or increase materially those now
in force, with respect to the extension of credit by, or the charge to the net capital requirements of,
Placement Agents; (C) a general banking moratorium shall have been established by federal,New York,
Colorado, or California authorities; or a war involving the United States of America shall have been
declared, or any other national or international calamity shall have occurred, or any conflict involving the
armed forces of the United States of America shall have escalated to such a magnitude as to materially
affect the ability of the Placement Agent to market or place the Bonds; or
(d) Any litigation shall be instituted, pending or threatened to restrain or
eni oin the issuance or sale of the Bonds or in any way contesting any authority or security for or the
validity of the Bonds, or the existence or powers of the Issuer; or
(e) Legislation shall have been introduced in or enacted by the Legislature of
the State that would, in the reasonable judgment of the Placement Agent, adversely affect the security for
the Bonds; or
(f) There shall have occurred any change that, in the reasonable judgment of
the Placement Agent, makes unreasonable or unreliable any of the assumptions upon which (i) yield on
the Bonds for purposes of compliance with the Code, (ii) payment of debt service on the Bonds, or (iii)
the basis for the exclusion from gross income for federal income tax purposes of interest on the Bonds, is
predicated; or
(g) There shall have occurred any outbreak or material escalation of
hostilities or other calamity or crisis, the effect of which on the financial markets of the United States is
such as to make it, in the reasonable opinion of the Placement Agent, impractical to market the Bonds or
to enforce commitments for the purchase of the Bonds;or
(h) The Issuer shall fail to execute and deliver or to obtain one or more
filings, consents, approvals,authorizations,registrations or other action requested by the Placement Agent
to be obtained or taken by the Issuer and such failure is based upon the Issuer's conclusion that such
action is unduly burdensome and the Placement Agent shall reasonably conclude that, as a result of the
Issuer's failure to so execute and deliver or to obtain what has been requested by the Placement Agent,
the marketing or placement of the Bonds will be materially adversely affected.
Section 10. Fees and Expenses; Costs of Issuance. All costs, fees and expenses incident to
the performance of the Issuer's, Purchaser's, Placement Agent's and Borrower's obligations in connection
with the issuance, placement and purchase of the Bonds, including the reasonable expenses of counsel,
shall be paid by the Borrower to the Trustee by wire transfer of immediately available funds on the
Closing Date. An estimate of the Costs of Issuance is attached hereto as Exhibit H.
Section 11. Indemnification by Borrower.
(a) The Borrower agrees to indemnify the Issuer,, Purchaser and the
Placement Agent and their respective directors, officers, governing board members, shareholders,
members, officials, agents,, attorneys, trustees and employees, and each person, if any, who controls any
of such persons within the meaning of Section 15 of the 1933 Act (collectively, the "Borrower
9
Indemnified Parties" and each a "Borrower Indemnified Party") for, and to hold each Borrower
Indemnified Party harmless against, all liabilities, claims, costs, losses and expenses (including without
limitation, to the extent permitted by law, reasonable attorneys' fees and expenses), imposed upon or
asserted against the Borrower Indemnified Parties pursuant to any action, claim or proceeding based upon
any untrue statement or alleged untrue statement of a material fact with respect to the information referred
to or contained in any representation or covenant made pursuant to this Agreement or in the Borrower's
Bond Certificate.
(b) The Borrower shall reimburse any reasonable expense (.including the
reasonable fees of counsel) incurred by any Borrower Indemnified Party in connection with investigating
and defending any liability, claim, cost, loss, expense, action or proceeding described above; provided,
however, that nothing herein shall require the Borrower to pay for any losses, claims, damages, liabilities
or expenses resulting from the negligence or the willful misconduct of an Borrower Indemnified Party or
for expenses that were incurred without prior notice to the Borrower. At the request and the expense of
the Borrower, each Borrower Indemnified Party shall cooperate in making any investigation and defense
of any action, claim or proceeding and shall assert appropriately the rights,privileges and defenses which
are available to the Borrower Indemnified Party in connection therewith.
(c) The Borrower Indemnified Party shall, in the event of any claim, suit,
action or proceeding against it with respect to which indemnity may be sought on account of any
indemnity agreement by the Borrower contained herein, promptly give' written notice thereof to the
Borrower. When such notice is given, the Borrower shall be entitled to participate, at its own expense, in
the defense of, or if it so elects, to assume the defense of, such claim, suit, action or proceeding,in which
event such defense shall be conducted by counsel chosen by the Borrower, provided that each Borrower
Indemnified Party shall have the right to review and approve or disapprove any compromise or settlement
which approval shall not be unreasonably withheld. If the Borrower shall elect not to assume such
defense, it shall assume the payment of all expenses related thereto. Notwithstanding the above, each
Borrower Inden-reified Party shall have the right to employ separate counsel in any such action or
proceeding and to participate in the investigation and defense thereof, Each and every Borrower
Indemnified Party shall have the right to compromise, settle or conclude any claim, action or proceeding
against it with the written consent of the Borrower, which consent shall not be unreasonably withheld.
The foregoing notwithstanding, in the event that the Borrower shall assume such defense and any
Borrower Indemnified Party or Parties shall be advised by independent legal counsel that counsel selected
by the Borrower is not fully and adequately protecting such party or parties and representing the interests
of such party or parties and the Borrower has been given written notice thereof and a reasonable
opportunity to cure or find other counsel acceptable to the Borrower Indemnified Parties, any such
Borrower Indemnified Party or Parties shall have the right to conduct its own defense against any such
claim, suit, action or proceeding in addition to or in lieu of any defense conducted by the Borrower, and
the Indemnifying Party shall indemnify and hold harmless such Borrower Indemnified Party or Parties
against and from any and all suits, claims, damages, liabilities or expenses whatsoever, including
reasonable fees and expenses of counsel selected by such Borrower Indemnified Party or Parties incurred
by and arising out of or in connection with any such claim, suit,action or proceeding.
(d) The provisions of this Section 11 shall survive the termination of this
Agreement.
Section 12. Indemnification by Purchaser.
(a) The Purchaser agrees to indemnify the Issuer, the Placement Agent.) the
Borrower and their respective directors, officers, partners, governing board members, shareholders,
members, officials, agents, attorneys, trustees, employees and each person who controls any of such
10
persons within the meaning of Section 15 of the 1933 Act (collectively, the "Purchaser Indemnified
Parties" and each a "Purchaser Indemnified Party"), against any and all reasonable losses, damages,
claims, actions, liabilities, costs and expenses to which the Purchaser Indemnified Parties may become
subject in any way relating to (i) the securitization of the Bonds contemplated by the Indenture or the
Loan Agreement or(ii)a default by the Purchaser under the Interest Rate Protection Agreement; except to
the extent such reasonable losses, damages, claims, actions, liabilities, costs and expenses are caused by
the negligent or willful misconduct of such Indemnified Party.
(b) In the event that any action or proceeding is brought against any
Purchaser Indemnified Party with respect to which indemnity may be sought hereunder, the Purchaser,
upon written notice from such Purchaser Indemnified Party, shall assume the investigation and defense
thereof, including the employment of counsel approved by such Purchaser Indemnified Party, and shall
assume the payment of all expenses related thereto, with full power to litigate, compromise or settle the
same in its sole discretion; provided that the Purchaser Indemnified Party shall have the right to review
and approve or disapprove any such compromise or settlement. Each Purchaser Indemnified Party shall
have the right to employ separate counsel in any such action or proceeding and to participate in the
investigation and defense thereof. The Purchaser shall pay the reasonable fees and expenses of such
separate counsel; provided, however, that such Purchaser Indemnified Party may only employ separate
counsel at the expense of the Purchaser if in such Purchaser Indemnified Party's good faith judgment a
conflict of interest exists by reason of common representation or if all parties commonly represented do
not agree as to the action(or inaction) of counsel.
(c) The provisions of this Section 12 shall survive the termination of this
Agreement.
Section 13. Remarketing Agent.
The Placement Agent agrees to perform the obligations of the Remarketing Agent under the
Indenture until such time as the Bondholder Representative appoints a successor Remarketing Agent.
Section 14. Indexing Agent.
The Placement Agent agrees to perform the obligations of the Indexing Agent under the Indenture
until such time as the Bondholder Representative appoints a successor Indexing Agent.
Section 15. Miscellaneous.
15.1 All notices, demands and formal actions hereunder will be writing and mailed,
telecopied or delivered to the following address or such other address as any of the parties shall specify:
If to the Placement Agent: Newman and Associates,A Division of GMAC
Commercial Capital Markets Corp.,
1801 California Street, Suite 3700
Denver, CO 80202
Attention: Mr.Jim Hahn
Telephone: 303-293-8500
Facsimile: (303) 296-6804
11
If to the Purchaser: GMAC Commercial Holding Capital Corp.
1801 California Street, Suite 3700
Denver, Colorado 80202
Attention: Mr. Jim Hahn
Telephone: 303-293-8500
Facsimile: 303-296-6804
If to the Issuer: County of Contra Costa
651 Pine Street,4t"Floor,North Wing
Martinez, CA 94553
Attention: Deputy Director-Redevelopment
FAX: (925) 335-1265
If to the Borrower: Steadfast Hidden Cove, L.P.
20320 S.W. Birch Street, Suite 300
Newport Beach, CA 92660-1725
Attention: Rod Emery
FAX: (949) 852-0143
15.2 This Agreement will inure to the benefit of and be binding upon the parties
hereto and their permitted successors and assigns and will not confer any rights upon any other person.
15.3 This Agreement may not be assigned by the. Issuer, the Borrower or the
Placement Agent without the prior written consent of the Purchaser. This Agreement may be assigned by
the Purchaser upon written notice of such assignment from the Purchaser to the Issuer and the Borrower.
The Purchaser may designate the entity in whose name the Bonds are to be registered at Closing by
providing registration information to the Trustee on or prior to the Closing Date.
15.4 This Agreement may not be amended without the prior written consent of the
Issuer,the Borrower,the Purchaser and the Placement Agent.
15.5 The representations, covenants and agreements of the Issuer and the Borrower
will not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing
and regardless of(a) any investigations made by or on behalf of the Purchaser or Placement Agent (or
statements as to the results of such investigations) concerning such representations, covenants and
agreements and(b)delivery of and payment for the Bonds.
15.6 This Agreement may be executed by the parties hereto in separate counterparts,
each of which when so executed and delivered will be an original, but all such counterparts will together
constitute but one and the same instrument.
15.7 This Agreement will become effective and binding upon the respective parties
hereto upon the execution and delivery hereof by the parties hereto and will be valid and enforceable as of
the time of such execution and delivery.
15.8 If any provision of this Agreement is held or deemed to be or is, in fact,
inoperative, invalid or unenforceable as applied in any particular case in any jurisdiction or jurisdictions,
or in all jurisdictions because it conflicts with any provision of any constitution, statute, rule of public
policy, or any other reason, such circumstances will not have the effect of rendering the provision in
question inoperable or unenforceable in any other case or circumstance or of rendering any other
provision or provisions of this Agreement invalid, inoperative or unenforceable to any extent whatever.
12
15.9 This Agreement will be governed by and construed in accordance with the laws
of the State applicable to agreements to be performed wholly therein.
15.10 Except as provided in Section 12 below, the obligations of the Purchaser and
Placement Agent hereunder shall be without recourse to any shareholder, member, trustee, officer,
employee, agent or manager of the Purchaser and Placement Agent and no shareholder, member, trustee,
officer, employee, agent or manager of the Purchaser shall be personally liable for the payment of any
obligation of the Purchaser or Placement Agent hereunder. In the event any legal actions or proceedings
are brought in respect of such obligations, any judgment against the Purchaser shall be enforced only
against the assets of the Purchaser and not against any property of any trustee or manager of the
Purchaser.
13
If the foregoing accurately sets forth our mutual understanding concerning the subject matter
hereof,kindly indicate your acceptance by executing this Agreement.
GMAC COMMERCIAL HOLDING
CAPITAL CORPORATION
By:
Name:
Title:
[Signatures continue on next page]
[Counterpart Signature Page to the Bond Placement Agreement]
NEWMAN AND ASSOCIATES,A
DIVISION OF GMAC COMMERCIAL
HOLDING CAPITAL MARKETS CORP.
By:
Name:
Title:
[Signatures continue on next page]
[Counterpart Signature Page to the Bond Placement Agreement]
COUNTY OF CONTRA COSTA
By:
Deputy Director-Redevelopment
[Signatures continue on next page]
[Counterpart Signature Page to the Bond Placement Agreement]
STEADFAST HIDDEN COVE,L.P.,a California
limited partnership
[By: Affordable Housing Access, Inc., a California
nonprofit public benefit corporation, its
Managing General Partner
By:
Jonathan B.Webb
Executive Director
By: Steadfast HCA, L.P., a California limited
partnership, its Co-General Partner
By: Steadfast HCA, LLC, a Delaware
limited liability company, its General
Partner
By:
Kyle Winning,
Authorized Representative
EXHIBIT A—GLOSSARY OF TERMS
"Act" means Chapter 7 of Part 5 of Division 31 of the California Health and Safety Code, as
amended.
"Agreement"means this Bond Placement Agreement, as amended from time to time.
"Bonds" means $7,400,000 County of Contra Costa, Multifamily Housing Revenue Bonds
(Hidden Cove Apartments Project)2003 Series A.
"Borrower"means Steadfast Hidden Cove, L.P.,a California limited partnership.
"Borrower's Bond Certificate"means the certificate executed by the Borrower a form of which is
attached hereto as Exhibit F.
"Borrower Indemnified Parties" means the Issuer, Purchaser and the Placement Agent and their
respective directors, officers, governing board members, shareholders, members, officials, agents,
attorneys, trustees and employees, and each person, if any, who controls any of such persons within the
meaning of Section 15 of the 1933 Act
"Bond Counsel"means Orrick,Herrington& Sutcliffe LLP, San Francisco,California.
"Closing" means the proceeding on the Closing Date at which the Bonds are delivered to the
Purchaser.
"Closing Date"means [Closing Date], the date on which the Closing takes place.
"Closing Documents has the meaning ascribed to such term in Section 3 hereof.
"Code" means the Internal Revenue Code of 1986, as amended, together with all corresponding
and applicable final or temporary regulations and revenue rulings issued or promulgated thereunder.
"Constitution"means the Constitution of the State.
"Conversion" means the conversion of the loan from construction phase (during such time only
interest payments are due thereunder) to the permanent phase (during such time both interest and
principal payments are due thereunder).
"General Partner" means Affordable Housing Access, Inc. a California nonprofit public benefit
corporation.
"Guarantor" means the party or parties making the Exceptions to Non-Recourse Guaranty dated
April 1, 2003 and the Completion Guaranty dated April 1, 2003 in connection with the issuance of the
Bonds;
"Indenture" means that certain Trust Indenture dated as of April 1, 2003 between the County of
Contra Costa and the Trustee.
"Indexing Agent" means Newman and Associates, A Division of GMAC Commercial Holding
Capital Markets Corp.,its successors and assigns,as provided in Section 14 herein.
"Interest Rate Protection Agreement" means that certain Interest Rate Protection Agreement
made by the Purchaser for the benefit of the Trustee on Closing Date and related to the Bonds.
"Issuer" means County of Contra Costa, a political subdivision of the State of California, and its
successors and assigns.
"Issuer Documents"means, collectively, the Indenture, the Loan Agreement, this Agreement and
all other agreements, documents and certificates as may be required to be executed and delivered by the
Issuer to carry out, give effect to, and consummate the transactions contemplated by this Agreement or by
the other Issuer Documents.
"Loan Agreement" means that certain Loan Agreement dated as of April 1, 2003 between the
Issuer and the Borrower.
"Loan Documents" means, collectively, this Agreement, the Loan Agreement, the Note, the
Regulatory Agreement, the Mortgage, the Borrower Bond Certificate, the Exceptions to Non-Recourse
Guaranty dated April 1, 2003, the Completion Guaranty dated April 1, 2403 and all other agreements,
documents and certificates as may be required to be executed and delivered by the Borrower to carry out,
give effect to, and consummate the transactions contemplated by this Agreement or by the other Loan
Documents.
"Mortgage" means that certain Multifamily Deed of Trust, Assignment of Rents, Security
Agreement and Fixture Piling executed by the Borrower and granting a first lien on the Project for the
benefit of the Trustee (by assignment from the Issuer), including any amendments and supplements
thereto.
"1933 Act"means the Securities Act of 1933, as amended.
"1934 Act"means the Securities Exchange Act of 1934, as amended.
1939 Act"means the Trust Indenture Act of 1939, as amended.
"Note" means that certain multifamily note from the Borrower multifamily note relating to the
.Bonds and secured by the Mortgage.
"Placement Agent"means Newman and Associates, A Division of GMAC Commercial Holding
Capital Markets Corp.,its successors and assigns.
"Project" means that certain multifamily housing facility consisting of approximately 88 units
with related amenities and site improvements and related personal property and equipment located in
Contra Costa County, California and known as Hidden Cove Apartments.
"Purchaser" means GMAC Commercial Holding Capital Corp., a Colorado corporation, or its
designee or nominee, together with their respective permitted successors and assigns hereunder.
"Purchaser Indemnified Parties" means Issuer, the Placement Agent, the Borrower and their
respective directors, officers, partners, governing board members, shareholders, members, officials,
agents, attorneys, trustees, employees and each person who controls any of such persons within the
meaning of Section 15 of the 1933 Act.
A-2
"Regulatory Agreement"means that certain Regulatory Agreement and Declaration of Restrictive
Covenants by and among the Issuer, Contra Costa County Redevelopment Agency, the Trustee and the
Borrower.
"Remarketing Agent" means Newman and Associates, A Division of GMAC Commercial
Holdings Capital Markets Corp., its successors and assigns,as provided in Section 13 herein.
"Resolution" means the resolution or resolutions of the Issuer, authorizing, among other things,
the execution and delivery by the Issuer of the Issuer Documents and the Bonds and the performance of
its obligations thereunder.
"State"means the State of California.
"Trustee" means Wells Fargo Bank, National Association or its successors or any other
corporation or association resulting from or surviving any consolidation or merger to which it or its
successors may be a party and any successor trustee at any time serving as successor trustee under the
Indenture.
A-3
EXHIBIT B —TERMS OF BONDS
1. Title of Bonds: $7,400,000 County of Contra Costa,
Multifamily Housing Revenue Bonds
(Hidden Cove Apartments Project) 2003
Series A.
2. Purchase Price: 100%of Aggregate Principal Amount.
3. Payment Related Terms:
(a) Date of the Bonds: [Closing Date]
(b) Interest Payment Dates: [First Interest Payment Date] and the
first Business Day of each month
thereafter, or as set forth in the
Indenture.
(c) Aggregate Principal Amount: $7,400,000-00
(d) Maturity Dates: [Maturity Dates].
(e) Interest Rates: Variable; subject to floor of
(f) Redemption Provisions:
(i) Mandatory Redemption: as set forth in the Indenture.
(ii) Optional Redemption: as set forth in the Indenture.
4. Logistics of Closing:
(a) Time of Closing: 12:00 noon,Place of Closing local time.
(b) Date of Closing: [Closing Date].
(c) Place of Closing: [Location of Closing].
(d) Delivery of Bonds: At Place of Closing, above.
EXHIBIT C—FORM OF SUPPLEMENTAL OPINION OF BOND COUNSEL
[Letterhead of Bond Counsel]
[CLOSING DATE]
Newman and Associates,A Division of GMAC Commercial
Holding Capital Markets Corp.
Denver,Colorado
GMAC Commercial Holding Capital Corp.
Denver,Colorado
County of Contra Costa
Multifamily Housing Revenue Bonds
(Hidden Cove Apartments Project)2003 Series A
[After appropriate introductory language,the opinion shall state substantially as follows:]
(1) The Bond Placement Agreement dated [CLOSING DATE] has been duly
executed and delivered by,and constitutes the valid and binding agreement of,the Issuer.
(2) The Bonds are not subject to the registration requirements of the Securities Act
of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of
1939, as amended.
EXHIBIT D—POINTS TO BE COVERED IN OPINION OF COUNSEL TO THE
ISSUER/CERTIFICATE OF ISSUER
[After appropriate introductory language,the opinion or certificate shall state substantially as follows:]
(1) The Issuer is a political subdivision of the State of California.
(2) The Bonds have been issued in accordance with the Issuer's enabling legislation
and all applicable procedural and substantive requirements.
(3) [To my/to the Issuer's] knowledge, except as disclosed in writing to the
Placement Agent, Purchaser and their counsel, there is not pending, nor to [my/the Issuer's]
knowledge is there any threatened, action, suit, proceeding, inquiry or investigation against the
Issuer, at law or in equity, by or before any court, public board or body, nor to [my/the Issuer's]
knowledge is there any basis therefor, affecting the existence of the Issuer or the titles of its
officials to their respective offices, or seeking to prohibit, restrain or enjoin the sale, issuance or
delivery of the Bonds, the pledge of revenues or assets pledged or to be pledged under the
Indenture to pay the principal of and interest on the Bonds, or in any way materially adversely
affecting or questioning(A) the territorial jurisdiction of the Issuer, (B)the use of the proceeds of
the Bonds to make the Loan, (C) the validity or enforceability of the Bonds, any proceedings of
the Issuer taken with respect to the Bonds, or any of the Bond Documents to which it is a party,
(D) the exclusion of interest on the Bonds from gross income for purposes of federal income
taxation, (E) the execution and delivery of the Bond Placement Agreement or the Bonds, or (F)
the power of the Issuer to carry out the transactions contemplated by the Bond Placement
Agreement, the Bonds or any of the Bond Documents to which the Issuer is a party.
(4) The Issuer has complied with all the covenants and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing Date contained in the Bond
Placement Agreement, and the representations and warranties of the Issuer contained in the Bond
Placement Agreement and in each of the Bond Documents to which it is a party are true and
correct as of the Closing Date.
EXHIBIT E—FORM OF BORROWER'S COUNSEL OPINION
[Letterhead of Borrower's Counsel]
[Closing Date]
Newman&Associates, A Division of GMAC County of Contra Costa
Commercial Holding Capital Markets Corp. Martinez, California
Denver, Colorado
GMAC Commercial Holding Capital Corp. Well Fargo Bank,National Association
Denver,Colorado Los Angeles, California
Orrick,Herrington&Sutcliffe LLP
San Francisco, California
County of Contra Costa
Multifamily Housing Revenue Bonds
(Hidden Cove Apartments Project)2003 Series A
(the"Bonds")
Ladies and Gentlemen:
[After appropriate introductory language,the opinion shall state substantially as follows:]
In my capacity as counsel to the Borrower and Guarantor,I have examined the following:
A. The [Multifamily Note], dated as of April 1, 2003 in the original principal amount of
$[Loan Amount] executed by the Borrower(the"Note");
B. The Multifamily Deed of Trust, Assignment of Rents, Security Agreement and Fixture
Filing (the "Mortgage") dated even with the Note, executed by the Borrower in favor of
the County of Contra Costa granting a security interest in the real and personal property
(the"Project") as more specifically described in the Mortgage;
C. Uniform Commercial Code financing statement(s) signed by the Borrower as debtor (the
"Financing Statement(s)");
D. The Bond Placement Agreement, dated as of[Closing Date] by and among the Borrower,
the Issuer, GMAC Commercial Holding Capital Corp. (the "Lender"), and Newman &
Associates,A Division of GMAC Commercial Holding Capital Markets Corp.;
E. The Loan Agreement, dated as of April 1, 2003 by and between the Borrower and the
County of Contra Costa;
F. The Agreement of Environmental Indemnification, dated as of April 1, 2003 between the
Borrower and the Lender;
G. The Borrower's Bond Certificate dated [Closing Date] made by the Borrower;
H. The Repair Agreement dated April 1, 2003 between the Borrower, Lender and GMAC
Commercial Mortgage Corporation(the"Servicer");
I. The Replacement Reserve Agreement dated April 1, 2003 between the Borrower, Lender
and Servicer;
J. The Completion Guaranty dated April 1, 2003 made by the Guarantor;
K. The Exceptions to Non-Recourse Guaranty dated April 1, 2003 made by the Guarantor;
L. The [Tax Compliance Agreement] dated as of April 1,2003 by and among the Issuer, the
Borrower and the Trustee;
M. The Regulatory Agreement and Declaration of Restrictive Covenants dated as of April 1,
2003 by and among the Borrower,the Issuer and the Trustee;
N. The Borrower's Bond Certificate dated the Closing Date;
O. A certified copy of the [Limited Partnership Agreement] and [Certificate of Limited
Partnership] of the Borrower, and a Certificate of Good Standing with respect to the
Borrower issued by the California Secretary of State on , (collectively,
the"Organizational Documents");
P. A certified copy of the Articles of Organization of Steadfast Hidden Cove, L.P., a
limited liability company,which executed the Loan Documents (the "[General Partner]"),
and a certificate of existence with respect to the [General Partner] issued by the
California Secretary of State on •
Q. Such other documents, matters, statutes, ordinances, published rules and regulations,
published judicial and governmental decisions interpreting or applying the same, and
other official interpretations as I deemed applicable in connection with this opinion.
The documents listed in A through Q above are referred to collectively as the "Loan Documents."
The documents listed as J and K above,are referred to collectively as the"Guarantor Documents."
I have examined pertinent statutes and regulations and copies, certified or otherwise, identified to
my satisfaction of such records of the Borrower and Guarantor and have done such other investigation as
I have considered necessary as a basis for the opinions hereinafter expressed. In the course of my
examination and review and in connection with the opinions hereafter expressed, I have assumed the due
authorization, execution and delivery of all documents by all parties thereto other than the Borrower and
Guarantor. I have also made such inquiries of the Borrower and Guarantor and others as I have deemed
necessary in connection with this opinion.
In basing the opinion set forth in this opinion on "my knowledge", the words "my knowledge"
signify that, in the course of my representation of the Borrower and Guarantor, no facts have come to my
attention that would give me actual knowledge or actual notice that any such opinions or other matters are
not accurate or that any of the Loan Documents are not accurate and complete. "My knowledge" is a
qualification as to factual matters and information, as qualified in this paragraph,and is not a qualification
as to my knowledge of applicable laws,regulations,rulings and court decisions.
E-2
Based on the foregoing, it is my opinion that:
1. The Borrower is a limited partnership, duly formed, validly existing and in good standing
under the laws of California and is qualified and in good standing wherever such
qualification and/or standing are required, including the state of California.
2. The Borrower has full legal right, power and authority to own its properties and conduct
its business as now conducted, to borrow the proceeds of the loan, and to execute and
perform its obligations under the Loan Documents.
3. The [General Partner] is a [Limited Liability Company] duly organized, validly existing
and in good standing under the laws of California and has all requisite corporate power
and all material governmental licenses, authorizations, consents and approvals necessary
to own and operate its property and conduct its business. The [General Partner] is
qualified to do business in California.
4. The Guarantor is a [Limited Liability Company] duly organized, validly existing and in
good standing under the laws of California and has all requisite corporate power and all
material governmental licenses, authorizations, consents and approvals necessary to own
and operate its property and conduct its business.
5. All necessary [partnership] action, including required approvals, if any, by [partners] of
the Borrower other than the [General Partner],has been taken to authorize the execution,
delivery and performance of the Loan Documents by the Borrower. The individual or
individuals who have executed the Loan Documents on behalf of the [General Partner] of
the Borrower have the authority to bind the [General Partner] and thereby the.Borrower
to the terms and conditions of the Loan Documents.
6. All necessary [corporate] action, including required approvals, if any, by [members] of
the Guarantor,has been taken to authorize the execution, delivery and performance of the
Guarantor Documents by the Guarantor. The individual or individuals who have
executed the Guarantor Documents on behalf of the Guarantor have the authority to bind
the Guarantor to the terms and conditions of the Guarantor Documents.
7. To the best of my knowledge after due and diligent inquiry, no authorization, consent,
approval,license, exemption of, or filing or registration with, any municipal,county, state
or Federal court or governmental department, commission, board, bureau, agency or
instrumentality is or will be necessary for the valid execution or delivery by the Borrower
of the Loan Documents or by the Guarantor of the Guarantor Documents or their
performance of their respective obligations thereunder, other than any filings, notices or
recordings which may be required for the perfection of any liens, pledges or security
interests granted pursuant to the Loan Documents or Guarantor Documents.
E-3
8. To the best of my knowledge after due and diligent inquiry, as of [Closing Date], the
Borrower, the [General Partner] and the Guarantor are not in any material respect in
violation of, breach of or default under any applicable Constitutional provision or law of
any state or of the United States, or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Borrower, the [General
Partner], or the Guarantor or any of its activities, properties or assets, or any"indenture,
mortgage, deed of trust, resolution, note agreement (including, without limitation, the
Loan Documents) or other agreement or instrument to which the Borrower, the [General
Partner], or the Guarantor is a party or by which the Borrower, the [General Partner] or
the Guarantor or any of its property or assets is bound, and no event has occurred and is
continuing which with the passage of time or the giving of notice, or both, would
constitute such a default or event of default under any such instruments; and the
execution and delivery of the Bonds,the Loan Documents and the Guarantor Documents,
and compliance with the provisions on the Borrower's, the [General Partner's] or the
Guarantor's part contained therein, do not and will not conflict with, or constitute on the
part of the Borrower, the [General Partner] or the Guarantor a violation of, breach of or
default under, any applicable constitutional provision or law of any state or of the United
States, or any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Borrower, the [General Partner] or the Guarantor or any of its
activities, properties or assets, or any indenture, mortgage, deed of trust, resolution, note
agreement or other agreement or instrument to which the Borrower, the [General
Partner], 'or the Guarantor is a party or by which the Borrower, the [General Partner] or
the Guarantor or any of its property or assets is bound, nor will any such execution,
delivery or compliance result in the creation or imposition of any lien, charge or other
security interest or encumbrance of any nature whatsoever upon any of the property or
assets of the Borrower, the [General Partner] or the Guarantor or under the terms of any
such law, regulation or instrument, except as provided by the Bonds, the Loan
Documents or the Guarantor Documents.
9. To the best of my knowledge after due and diligent inquiry,other than any filings,notices
or recordings which may be required for the perfection of any liens, pledges or security
interests granted pursuant to the Loan Documents, the Borrower has obtained all material
permits, licenses or other authorizations or approvals necessary under the laws of
California and the United States of America for the operation of the Project as
multifamily residential rental housing and all such licenses, permits, authorizations and
approvals are valid and are in full force and effect.
10. Each of the Loan Documents has been duly executed and delivered by the Borrower and
constitutes the valid and legally binding obligation of the Borrower, enforceable against
the Borrower in accordance with its terms, subject to (i) applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the rights of
creditors generally, and (ii) the exercise of judicial discretion in accordance with general
principles of equity(whether applied by a court of law or of equity).
11. The execution and delivery of, and the performance of the obligations under, the Loan
Documents, will not violate the Borrower's Organizational Documents nor the
organizational documents of the [General Partner].
E-4
12. Neither the execution and delivery by the Borrower of the Loan Documents, nor the
fulfillment of the terms of the Loan Documents violate any law or regulations applicable
to the Borrower or court decree known to me to be applicable to the Borrower; and,to the
best of my knowledge after due and diligent inquiry, none of such actions will result in a
breach of, or constitute a default under any agreement, indenture or other instruments to
which the Borrower or the [General Partner] is a party or by which it is bound.
13. Each of the Guarantor Documents has been duly executed and delivered by the Guarantor
and constitutes the valid and legally binding obligation of the Guarantor, enforceable
against the Guarantor in accordance with its terms, subject to (i) applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the rights of
creditors generally, and (ii) the exercise of judicial discretion in accordance with general
principles of equity(whether applied by a court of law or of equity).
14. The execution and delivery of, and the performance of the obligations under, the
Guarantor Documents,will not violate the Guarantor's organizational documents.
15. Neither the execution and delivery by the Guarantor of the Guarantor Documents,,nor the
fulfillment of the terms of the Guarantor Documents violate any law or regulations
applicable to the Guarantor or court decree known to me to be applicable to the
Guarantor; and, to the best of my knowledge after due and diligent inquiry, none of such
actions will result in a breach of, or constitute a default under any agreement, indenture
or other instruments to which the Guarantor is a party or by which it is bound.
16. To the best of my knowledge after due and diligent inquiry after due and diligent inquiry,
as of the Closing Date,there is no action, suit,proceeding,inquiry or investigation, at law
or in equity,before or by any judicial or administrative court or governmental agency or
body, state, Federal or other,pending or, to the best of our knowledge,threatened against
the Borrower, the [General Partner] or the Guarantor, affecting the existence of the
Borrower, the [General Partner] or the Guarantor or the titles of its officers to their
respective offices, or contesting or affecting as to the Borrower, the [General Partner] or
the Guarantor the validity or enforceability of the [Act] (as defined in the Indenture), the
Bonds, any Loan Document or any Guarantor Document or the execution and delivery or
adoption by the Borrower of any Loan Document or the Guarantor of any Guarantor
Document, or in any way contesting or challenging the powers of the Borrower, the
[General Partner] or the Guarantor or its authority with respect to the Loan Documents cTr
the Guarantor Documents, as applicable, or the consummation of the transactions
contemplated thereby; nor, to the best of my knowledge after due and diligent inquiry, is
there any basis for any such action, suit,proceeding, inquiry or investigation,wherein an
unfavorable decision, ruling or finding would materially adversely affect the financial
condition or operations of the Borrower, the [General Partner] or the Guarantor or the
validity of the authorization, execution, delivery or performance by the Borrower or the
[General Partner] of any Loan Documents and by the Guarantor of any Guarantor
Documents.
17. To the best of my knowledge after due and diligent inquiry, the Project complies with all
applicable zoning, subdivision,and,land use and development laws,rules and regulations
and there is no legal action pending or threatened, or proposed change in zoning, which
would affect the use and occupancy of the Project as a multifamily residential rental
property.
E-5
18. Based upon my review of applicable tax statements, the Project is separately assessed for
real estate tax purposes, without regard to any other property; the Project is fully assessed
as a fully completed improvement; [the Project is not the beneficiary of any agreement or
program for tax abatement]; the Project is not subject to recoupment for any previously
abated real estate taxes and Borrower is [not] exempt from payment of such real estate
taxes and assessments,in whole or in part.
19. The Mortgage is in appropriate form for recordation in the land records of[appropriate
location for recordation] and upon such recordation, will create the encumbrance and
security interest it purports to create in the real property, including fixtures, as described
in the Mortgage.
20. Filing of the Financing Statements in the office of the [Clerk] of the [appropriate location
for recordation] (collectively, the "Filing Offices"), will perfect the security interest
granted under the Loan Documents in the personal property (the "Personalty") of the
fCaliforniaBorrower located in California. The Filing Offices are the only offices in Cali in
which the Financing Statement(s) are required to be filed in order to perfect the security
interest in the personalty as contemplated by the Loan,Documents.
21. The Mortgage and the Financing Statements conform to all requirements of the laws of
California in which the Project is located and the Mortgage contains substantially all of
the remedial, waiver and other provisions normally contained in mortgages and security
agreements used in connection with loan transactions of the type and value described in
the Loan Documents. Enforcement of the remedies provided in the Mortgage with
respect to the Borrower or the Project will not, except as expressly limited by the terms of
the Mortgage, deprive any secured party of its right to seek a deficiency or personal
judgment nor will it limit the right to foreclose on other security or collateral securing the
debt. The Mortgage satisfies the requirements of [applicable state statute governing
mortgages].
22. In connection with the remedies provided in the Mortgage:
(a) The exercise at any time and in any order of any remedies available against the
property covered by the Uniform Commercial Code as adopted by the state of
California will not be affected by, nor will the exercise at any time of such
remedies affect, the exercise of any remedies relating to the real property and
improvements (as such terms are defined in the Mortgage), unless the Note and
Mortgage have been paid and performed in full.
(b) [There is no "one form of action" or similar law in California which would limit
the holder of the Note to choosing only one remedy to enforce its rights under the
Mortgage and the other Loan Documents.]
23. Under the laws of the state of California, Lender is not required to pay interest to the
Borrower on any escrow or reserve accounts established by Lender for the payment of
real estate taxes and assessments or insurance premiums or for replacements to the
Project.
E-6
24. The Loan Documents are governed by the laws of the state of California and with
reference to the usury laws of the state of California in which the Project is located the
payment of all interest, loan fees, late fees, prepayment premiums, the default rate of
interest and other charges under and pursuant to the Loan Documents are not usurious
under the law of such state. No Federal, state or local laws in the nature of truth-in-
lending, real estate settlement procedures, equal credit opportunity or disclosure, apply to
the loan made pursuant to the Loan Documents.
25. Neither Lender nor any future assignee is required to pay any tax or be qualified to do
business or file any designation for service of process or file any reports in California or
comply with any statutory or regulatory rule or requirement applicable only to mortgage
bankers or financial institutions chartered or qualified to do business in such state solely
by reason of its execution and delivery or acceptance of the Mortgage or the other Loan
Documents or by reason of its participation in any of the transactions under or
contemplated by the Loan Documents, including, without limitation, the loan and the
purchase or holding of the Note as contemplated thereby, the making and receipt of any
payments pursuant thereto, and the validity and enforceability of, and the exercise of any
right or remedy under or with respect to, the Mortgage and the other Loan Documents
will not be affected by any failure to so qualify, file or comply.
26. To the best of my knowledge after due and diligent inquiry, no portion of the Project is
located within a Federal wetlands or coastal area regulated under Federal, state or local
law or regulation, or, alternatively, if so located, To the best of my knowledge after due
and diligent inquiry, the Project is appropriately permitted or otherwise complies with all
applicable laws and regulations.
27. Except for certain fees for recording charged by the [Office of the Recorder of Deeds]
and the California Secretary of State, no recording, filing, privilege or other tax must be
paid in connection with the execution, delivery, recordation or enforcement of any of the
Loan Documents.
28. The Borrower's [Partnership Agreement] limits the business and operation of the
Borrower to (a) activities related to the acquisition and holding of the Project, (b)
incurring debts in connection with the Project, and (c) other activities necessary and
appropriate to carry out the foregoing purposes. Under the [partnership] laws of
California there is no law or statute which requires a court or allows a creditor or trustee
(or the chapter 11 entity as debtor in possession under the united states bankruptcy code)
in a bankruptcy of the [General Partner] to consolidate the assets and liabilities of the
[General Partner] with those of the Borrower.
29. The information contained in the Borrower's Bond Certificate is as of the date thereof,
and as of the closing date will be, true, correct and complete in all material respects, and
the Borrower's Bond Certificate as to such matters do not and will not contain any untrue
or misleading statement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they are made,not
misleading.
The opinions set forth above are subject to the following qualifications:
(i) I express no opinion with respect to the relative priority of the liens or security interests
created by any of the Loan Documents. I have assumed that Borrower has rights in the
E-7
Project. I understand that, with respect to the real property, you are relying upon a
mortgagee's title insurance policy insuring the lien on the Project, and, with respect to the
Personalty, you are relying on UCC lien searches, Financing Statements and the
Borrower's Bond Certificate. I also have assumed the recordation and filing of the
Mortgage and Financing Statements in accordance with this opinion following their
execution and delivery by the Borrower.
(ii) The Uniform Commercial Code of California requires the periodic filing of continuation
statements with the Secretary of State and the [Clerk of the County Commission] not
more than six (6) months prior to and not later than the expiration of the five (5) year
period from the date of filing of the Financing Statement and the expiration of each
subsequent five(5)year period after the original filing, in order to maintain the perfection
and priority of security interests and to keep the Financing Statements in effect.
(111) I express no opinion as to the laws of any jurisdiction other than the laws of California
and the laws of the United States of America. The opinions expressed above concern
only the effect of the laws of California and the United States of America as currently in
effect.
I confirm that:
(a) Based on the Organizational Documents, the name of the Borrower and Guarantor in
each of the Loan Documents and the Title Policy is the correct legal name of the
Borrower and Guarantor;
(b) I do not have any financial interest in the Project or the Loan Documents, other than fees
for legal services performed by me,payment for which has been provided;
(c) I acknowledge that Lender is relying on this opinion letter and would not be making the
Loan without its issuance. I (i) acknowledge that Borrower has instructed me to issue
and deliver this opinion for the benefit of the addressees, and (ii) waive any defense or
claim of lack of contractual privity which I might assert against the addressees in
connection with the issuance of this opinion letter; and
(d) Other than as counsel for the Borrower and Guarantor, I have no interest in the Borrower
or Guarantor and do not serve as employee of the Borrower or Guarantor. I have no
undisclosed interest in the subject matters of this opinion.
The foregoing opinions are for the exclusive reliance of the addressees, and their counsel.
E-8
EXHIBIT F—FORM OF BORROWER'S BOND CERTIFICATE
County of Contra Costa
Multifamily Housing Revenue Bonds
(Hidden Cove Apartments Project)2003 Series A
BORROWER'S BOND CERTIFICATE
The undersigned hereby certifies and agrees in partial consideration for the issuance of the above-
captioned bonds (the"Bonds")as follows:
1. The individual executing this certificate is duly authorized to make the representations
contained herein, and the signature of such individual below is the genuine signature of such individual.
2. The statements and information contained in Appendix A attached hereto do not contain
any untrue statement of material fact or omit to state a material fact necessary in order to make the
statements and information contained therein, in light of the circumstances under which they were made,
not misleading as of the date hereof.
IN WITNESS WHEREOF,this Certificate and has been executed as of the date below.
STEADFAST HIDDEN COVE,L.P.,a California
limited partnership
[By: Affordable Housing Access, Inc., a California
nonprofit public benefit corporation, its
Managing General Partner
By:
Jonathan B.Webb
Executive Director
By: Steadfast HCA,L.P., a California limited
partnership, its Co-General Partner
By: Steadfast HCA,LLC,a Delaware
limited liability company, its General
Partner
By.
Kyle Winning,
Authorized Representative
Dated: [CLOSING DATE]
APPENDIX A
TO BORROWER'S BOND CERTIFICATE
PRIVATE PARTICIPANTS AND THE PROJECT
The Borrower
[INSERT TYPICAL BORROWER DISCLOSURE]
The Project
[INSERT TYPICAL PROJECT DISCLOSURE]
The Managing Agent
[INSERT TYPICAL MANAGER DISCLOSURE]
The Contractor
[INSERT TYPICAL CONTRACTOR DISCLOSURE]
The Architect
[INSERT TYPICAL ARCHITECT DISCLOSURE]
Sources and Uses of Funds
[INSERT TYPICAL SOURCE AND USE DISCLOSURE]
F-2
EXHIBIT G—POINTS TO BE COVERED IN THE OPINION OF TRUSTEE'S
COUNSEL/TRUSTEE'S CERTIFICATE
[After appropriate introductory language, the opinion/certificate shall state substantially as follows:]
(1) The Trustee is a national banking association duly organized, validly existing and
in good standing under the laws of the United States of America with trust powers.
(2) The Trustee has all requisite corporate and trust power, authority and legal right
and has taken all necessary corporate action to: (i) execute and deliver the Indenture and to
accept the trusts created under the Indenture and to perform its obligations thereunder, (ii)
execute and deliver in its capacity as Trustee the [Loan Agreement, the [Assignment], the Interest
Rate Protection Agreement, the [Construction Phase Financing Agreement], [Intercreditor
Agreement] and the [Regulatory Agreement], as such documents are defined in the Indenture,
(such documents, collectively, with the Indenture, the "Trustee Documents") and perform the
duties and obligations of the Trustee thereunder.
(3) The Trustee has duly authorized, executed and delivered the Trustee Documents.
Assuming the due authorization, execution and delivery thereof by the other parties thereto, the
Trustee Documents are the legal, valid and binding agreements of the Trustee, enforceable in
accordance with their terms against the Trustee.
(4) No authorization, approval, consent, or other order of any governmental agency
or regulatory authority having jurisdiction over the Trustee that has not been obtained is required
for the authorization, execution and delivery by the Trustee of the Trustee Documents.
(5) There is no litigation pending or, to our knowledge, threatened against the
Trustee to restrain the Trustee's participation in, or in any way contesting or affecting the
creation, organization or existence of the Trustee or the power of the Trustee with respect to the
transactions contemplated by the Documents.
(6) The execution and delivery of the Documents by the Trustee, and compliance
with the provisions thereof will not contravene the Articles of Association or Bylaws of the
Trustee or any law or regulation governing the banking and trust powers of the Trustee or, to our
knowledge, any indenture,mortgage, deed of trust,resolution,note agreement or other agreement
or instrument to which the Trustee is a party or by which the Trustee is bound.
EXHIBIT H-ESTIMATED COSTS OF ISSUANCE
TRUST INDENTURE
between
COUNTY OF CONTRA COSTA
and
WELLS FARGO BAND,NATIONAL ASSOCIATION,as Trustee
Dated as of April 1,2003
relating to:
$7,400,000
County of Contra Costa
Multifamily Housing Revenue Bonds
(Hidden Cove Apartments Project)2003 Series A
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION...........................................................................................................2
Section1.1 Definitions......................................................................................................2
Section 1.2 Ownership of Bonds; Effect of Action by Bondholders.................................2
Section 1.3 Effect of Headings and Table of Contents......................................................3
Section 1.4 Date of Indenture............................................................................................3
Section 1.5 Designation of Time for Performance............................................................3
Section1.6 Interpretation..................................................................................................
ARTICLEII GRANTING CLAUSES..............................................................................................3
ARTICLEIII LIMITED LIABILITY................................................................................................4
Section 3.1 Source of Payment of Bonds and Other Obligations; Disclaimer of
GeneralLiability.............................................................................................4
Section 3.2 Officers,Directors, Commissioners,Etc.; Exempt from Individual
Liability..........................................................................................................5
ARTICLEIV THE B OND S...............................................................................................................5
Section4.1 Terms..............................................................................................................5
Section4.2 Form of Bonds................................................................................................
Section 4.3 Execution,Authentication and Delivery.........................................................7
Section 4.4 Authentication and Delivery of the Bonds to the Original Purchaser............8
Section 4.5 Registration;Transfer and Exchange..............................................................8
Section 4.6 Mutilated Destroyed,Lost and Stolen Bonds.................................................9
Section 4.7 Persons Deemed Owners................................................................................9
Section4.8 Cancellation....................................................................................................9
Section 4.9 No Book-Entry System...................................................................................
Section 4.10 Conversion to Fixed Bond Coupon Rate;Remarketing of Bonds................11
ARTICLEV [RESERVED].........................................................................................6666.6666.6 6 6.6....14
ARTICLEVI REDEMPTION OF BONDS.....................................................................................14
Section 6.1 Optional Redemption.....................................................................................14
Section 6.2 Redemption from Amounts Transferred from Project Fund ........................14
Section 6.3 Mandatory Redemption................................................................................15
Section 6.4 Redemption for Bond Document Default.....................................................15
Section 6.5 Mandatory Sinking Fund Redemption..........................................................15
Section 6.6
Purchase in Lieu of Redemption...................................................................15
Section 6.7 Notice of Redemption...................................................................................15
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Page
Section 6.8 Deposit of Redemption Price or Purchase Price...........................................1
Section 6.9 Bonds Payable on Redemption Date............................................................17
Section 6.10 Partial Redemption; Selection of Bonds.......................................................17
ARTICLE VII DELIVERY OF BONDS; APPLICATION OF BOND PROCEEDS.......................17
Section 7.1 Conditions Precedent to the Delivery of Bonds............................................17
Section 7.2 Proceeds From Sale of Bonds.......................................................................18
Section 7.3 Deposit of Other Funds.................................................................................18
ARTICLEVIII PLEDGE;FUNDS.....................................................................................................18
Section 8.1 Pledge of Revenues and Assets....................................................................18
Section 8.2 Establishment of Funds ................................................................................19
Section 8.3 Application of Pledged Revenues and Other Amounts................................19
Section8.4 Bond Fund....................................................................................................20
Section8.5 Expense Fund...............................................................................................21
Section 8.6 Costs of Issuance Fund.................................................................................21
Section8.7 Project Fund..................................................................................................21
Section8.8 Rebate Fund..................................................................................................22
Section8.9 [Reserved].....................................................................................................23
Section 8.10 Application of Funds and Accounts upon Event of Default.........................23
Section 8.11 Non-Presentment of Bonds...........................................................................23
Section 8.12 Repayment from Funds and Accounts..........................................................24
Section8.13 Additional Funds..........................................................................................24
Section 8.14 Subsequent Cap Agreement..........................................................................24
ARTICLEIX INVESTMENT OF FUNDS......................................................................................24
Section 9.1 Investment of Funds.....................................................................................24
ARTICLE X REPRESENTATIONS AND COVENANTS ...........................................................25
Section 10.1 General Representations...............................................................................
25
Section 10.2 No Encumbrance on Trust Estate.................................................................26
Section 10.3 Payment of Bond Obligations.......................................................................26
Section 10.4 Loan Agreement Performance......................................................................26
Section 10.5 Maintenance of Records; Inspection of Records..........................................27
Section 10.6 Advances by Trustee ....................................................................................27
Section10.7 Tax Covenants..............................................................................................27
Section 10.8 Performance by the Borrower.......................................................................27
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Page
ARTICLEXI DEFAULT;REMEDIES...........................................................................................28
Section 11.1 Events of Default..........................................................................................28
Section 11.2 Acceleration of Maturity;Rescission and Annulment..................................29
Section 11.3 Additional Remedies;Bondholder Representative Enforcement.................29
Section 11.4 Application of Money Collected..................................................................30
Section 11.5 Remedies Vested in Trustee and Bondholder Representative......................31
Section 11.6 Limitation on Suits; Rights of Bondholders.................................................31
Section 11.7 Unconditional Right of Bondholders to Receive Principal,Premium
andInterest...................................................................................................31
Section 11.8 Restoration of Positions................................................................................32
Section 11.9 Rights and Remedies Cumulative.................................................................32
Section 11.1 o Delay or Omission Not Waiver....................................................................32
Section 11.11 Waiver of Past Defaults................................................................................32
Section 11.12 Remedies Under Loan Agreement or Note...................................................32
Section 11.13 Waiver of Appraisement and Other Laws....................................................3 3
Section 11.14 Suits to Protect the Trust Estate............
Section 11.15 Remedies Subject to Applicable Law...........................................................3 3
Section 11.16 Assumption of Obligations............................................................o.................34
ARTICLEXII THE TRUSTEE...........................o.o..O..o.......0.....0........................................................34
Section 12.1 Appointment of Trustee; Acceptance....................•......•....•.............•.•..........34
Section 12.2 Certain Duties and Responsibilities of Trustee.............................................34
Section 12.3 Notice of Defaults.............................................0...............0................................36
Section 12.4 Certain Rights of Trustee..............o--o.....................................o........................36
Section 12.5 Not Responsible for Recitals..........woo ...0....................................................o......37
Section12.6 May Hold Bonds.....................o...........................................................0.................37
Section 12.7 Money Held in Trust...... .......................0...0........................................37
Section 12.8 Compensation and Reimbursement............................................0.......0............•
Section 12.9 Trustee Required;Eligibility. .......... ...............0.........
Section 12.10 Resignation and Removal;Appointment of Successor...............•....•.........•..38
Section 12.11 Acceptance of Appointment by Successor.....................•.............................39
Section 12.12 Merger,Conversion,Consolidation or Succession to Business.....---o 0 .....0.39
Section 12.13 Requirements for Bondholder Consent and Instruction to the Trustee.........39
Section 12.14 Appointment of Co-Trustee....o............0.......................................................0..40
DOCSSF1:671616.4 -i,-.
40511-124 J78
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(continued)
Page
Section12.15 Loan Servicing..............................................................................................41
Section 12.16 Requests from Rating Agency......................................................................41
ARTICLE XIII SUPPLEMENTAL INDENTURES; AMENDMENT OF LOAN
AGREEMENT AND BOND DOCUMENTS...........................................................41
Section 13.1 Supplemental Trust Indentures without Bondholders Consent....................41
Section 13.2 Supplemental Trust Indentures with Bondholders' Consent........................42
Section 13.3 Supplemental Indentures Part of Indenture..................................................43
Section 13.4 Discretion of Trustee to Execute Supplemental Indenture...........................43
Section 13.5 Consents and Opinions.................................................................................43
Section 13.6 Notation of Modification on Bonds;Preparation of New Bonds.................44
Section 13.7 Amendments to Loan Agreement and Bond Documents Not
Requiring Consent of Bondholders ..............................................................44
Section 13.8 Amendments to Loan Agreement and Bond Documents Requiring
Consent of Bondholders...............................................................................45
Section 13.9 Consents and Opinions.................................................................................45
.ARTICLE XIV DEFEASANCE.........................................................................................................46
Section 14.1 Satisfaction and Discharge of Indenture.......................................................46
Section 14.2 Trust for Payment of Debt Service...............................................................46
ARTICLEXV MISCELLANEOUS..................................................................................................47
Section15.1 Notices..........................................................................................................47
Section 15.2 Notice to Bondholders;Waiver....................................................................48
Section 15.3 Successors and Assigns................................................................................49
Section 15.4 Benefits of Indenture....................................................................................49
Section 15.5 Bondholder Representative;Trustee's and Servicer's Consents..................49
Section 15.6 Proof of Execution of Writings and Ownership...........................................50
Section 15.7 Legal Holidays..............................................................................................50
Section 15.8 Governing Law.............................................................................................50
Section15.9 Severability...............................................................................................0...50
Section 15.10 Execution in Several Counterparts...............................................................50
Section 15.11 Nonrecourse Obligation of the Borrower.....................................................51
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An extra section break has been inserted above this paragraph. Do not delete this section break if you plan
to add text after the Table of Contents/Authorities. Deleting this break will cause Table of
Contents/Authorities headers and footers to appear on any pages following the Table of
Contents/Authorities.
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40511-124J78
THIS TRUST INDENTURE dated as of April 1, 2003 (this"Indenture")is entered into by the
COUNTY OF CONTRA COSTA, a political subdivision of the State of California (together with its
successors and assigns,the"Issuer"), and WELLS FARGO BANK,NATIONAL ASSOCIATION, a
national bank association duly organized and existing under the laws of the United States of America,as
trustee(the"Trustee").
RECITALS
WHEREAS,the Issuer is authorized pursuant to Section 52075 and following of the California
Health-and Safety Code(as amended,the"Act")to, among other things, finance the acquisition and
rehabilitation of multifamily rental housing and to issue revenue bonds in connection therewith;
WHEREAS,the Issuer intends to issue its$7,400,000 Multifamily Housing Revenue Bonds
(Hidden Cove Apartments Project)2003 Series A(the"Bonds")and loan the proceeds thereof to
Steadfast Hidden Cove,L.P., a California limited partnership(the"Borrower")to finance the acquisition
and rehabilitation of an 88-unit multifamily rental housing project(the"Project")located in Contra Costa
County, California;
WHEREAS,simultaneously with the delivery of this Indenture,the Issuer and the Borrower will
enter into a Loan Agreement dated as of April 1, 2003 (as it may be supplemented or amended,the"Loan
Agreement"),whereby the Borrower agrees to make loan payments to the Issuer in an amount which,
when added to other funds available under this Indenture,will be sufficient to pay the Bond Obligations
(as defined in the Loan Agreement)and to pay all costs and expenses related thereto when due;
WHEREAS,to evidence its payment obligations under the Loan Agreement,the Borrower will
execute and deliver its promissory note(the "Note");
WHEREAS,the obligations of the Borrower under the Note will be secured by a lien on and
security interest in the Project pursuant to a Multifamily Deed of Trust,Assignment of Rents, Security
Agreement and Fixture Filing dated as of April 1,2003 (the"Mortgage"),made by the Borrower in favor
of the Issuer, as assigned to the Trustee for the benefit of the Bondholders; and
WHEREAS, all things necessary to make the Bonds when authenticated by the Trustee and
issued as provided in this Indenture,valid,binding and legal limited obligations of the Issuer and to
constitute this Indenture a valid and binding agreement securing the payment of the principal of,
premium, if any, and interest on the Bonds issued and to be issued hereunder,have been done and
performed and the execution and delivery of this Indenture and the execution and issuance of the Bonds,
subject to the terms hereof,have in all respects been duly authorized;
NOW,THEREFORE,THIS INDENEWITNESSETH:
It is hereby covenanted and declared that the Bonds are to be authenticated and delivered and the
Project subject to this Indenture is to be held and applied by the Trustee, subject to the covenants,
conditions and trusts hereinafter set forth, and the Issuer does hereby covenant and agree to and with the
Trustee, for the benefit(except as otherwise expressly provided herein)of the Bondholders,as follows:
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40511-124J78
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1 Definitions. For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) Capitalized terms not otherwise defined herein shall have the meanings assigned
to them in the Loan Agreement
(b) The terms defined in this Article have the meanings assigned to them in this
Article. Singular terms shall include the plural as well as the singular, and vice versa.
(c) The definitions in the recitals to this instrument are for convenience only and
shall not affect the construction of this instrument.
(d) All accounting terms not otherwise defined herein shall have the meanings
assigned to them, and all computations herein provided for shall be made,in accordance with the
Approved Accounting Method. All references herein to"Approved Accounting Method"refer to
such principles as they exist at the date of application thereof.
(e) All references in this instrument to designated"Articles,""Sections"and other
subdivisions are to the designated Articles, Sections and subdivisions of this instrument as
originally executed.
(f) The terms"herein,"hereof'and"hereunder"and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.
(g) All references in this instrument to a separate instrument are to such separate
instrument as the same may be amended or supplemented from time to time pursuant to the
applicable provisions thereof.
Section 1.2 Ownership of Bonds; Effect of Action by Bondholders.
(a) The ownership of the Bonds shall be proved by the Bond Register.
(b) Any request,demand,authorization, direction,notice,consent,waiver or other
action by Bondholders shall bind every future Bondholder and the Registered Owner of every
Bond issued upon the transfer thereof or in exchange therefor or in lieu thereof,in respect of
anything done or suffered to be done by the Trustee or the Issuer in reliance thereon,whether or
not notation of such action is made upon such Bonds.
Section 1.3 Effect of Headings and Table of Contents. The Article and Section headings
herein and in the Table of Contents are for convenience only and shall not affect the construction hereof.
Section 1.4 Date of Indenture. The date of this Indenture is intended as and for a date for
the convenient identification of this Indenture and is not intended to indicate that this Indenture was
executed and delivered on said date.
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40511-124 J78 7
Section 1.5 Designation of Time for Performance. Except as otherwise expressly provided
herein, any reference in this Indenture to the time of day shall mean the time of day in the city where the
Trustee maintains its place of business for the performance of its obligations under this Indenture
Section 1.6 Interpretation. The parties hereto acknowledge that each of them and the Bond
Purchaser and their respective counsel have participated in the drafting and revision of this Indenture.
Accordingly,the parties agree that any rule of construction that disfavors the drafting party shall not
apply in the interpretation of this Indenture or any amendment or supplement or exhibit hereto or thereto.
ARTICLE II
GRANTING CLAUSES
To secure the payment of the Bond Obligations and the performance of the covenants herein and
in the Bonds contained,to declare the terms and conditions on which the Bonds are secured, and in
consideration of the premises and of the purchase of the Bonds by the Bondholders,the Issuer by these
presents does grant,bargain, sell, alien,remise,release,convey,assign,transfer,mortgage,hypothecate,
pledge, set over and confirm to the Trustee(except as limited by this Indenture)for the benefit of the
Bondholders a lien on and perfected security interest in the following described property:
(a) All right,title and interest of the Issuer in,to and under the Loan Agreement and
the Note,including,without limitation,all rents,revenues and receipts derived by the Issuer from
the Borrower relating to the Project and including,without limitation, the Initial Deposit,all
Pledged Revenues,Monthly Loan Payments and Additional Payments derived by the Issuer under
and pursuant to, and subject to the provisions of,the Loan Agreement(except the Unassigned
Issuer's Rights); provided that the pledge and assignment made under this Indenture shall not
impair or diminish the obligations of the Issuer under the provisions of the Loan Agreement.
(b) All right,title and interest of the Issuer in,to and under, together with all rights,
remedies,privileges and options pertaining to,the Bond Documents,and all other payments,
revenues and receipts derived by the Issuer under and pursuant to,and subject to the provisions
of,the Bond Documents, except for the Unassigned Issuer's Rights.
(c) All rights,title and interests of the Issuer in the Hedge Agreement and the Cap
Agreement,including the Hedge Payments and any amounts received under a Cap Agreement,
and all moneys and investments from time to time on deposit in,or forming a part of, all funds
and accounts created and held by the Trustee under the Indenture(but excluding the Expense
Fund and the Rebate Fund), subject to the provisions of this Indenture permitting the application
thereof for the purposes and on the terms and conditions set forth herein.
(d) Any and all other real or personal property of every kind and nature or
description,which may from time to time hereafter,by delivery or by writing of any kind,be
subjected to the lien of this Indenture as additional security by the Issuer or anyone on its part or
with its consent, or which pursuant to any of the provisions hereof or of the Loan Agreement may
come into the possession or control of the Trustee or a receiver appointed pursuant to this
Indenture;and the Trustee is hereby authorized to receive any and all such property as and for
additional security for the Bonds and to hold and apply all such property subject to the terms
hereof.
TO HAVE AND TO HOLD all said property,rights and privileges of every kind and description,
real,personal or mixed,hereby and hereafter(by supplemental indenture or otherwise)granted,
DOCSSF1:671616.4
40511-124J78 8
bargained, sold, aliened,remised,released, conveyed, assigned,transferred,mortgaged,hypothecated
pledged, set over or confirmed as aforesaid,or intended, agreed or covenanted so to be,together with all
the appurtenances thereto appertaining(said property,rights and privileges being herein collectively
called the"Trust Estate")unto the Trustee and its successors and assigns forever;
BUT IN TRUST,NEVERTHELESS, for the benefit and security of the Bondholders,as herein
provided.
ARTICLE III
LIMITED LIABILITY
Section 3.1 Source of Payment of Bonds and Other Obligations;Disclaimer of General
Liability.
(a) The Bond Obligations shall be limited obligations of the Issuer payable
exclusively out of the Trust Estate,and are secured by a pledge and assignment of the Trust
Estate to the Trustee in favor of the Bondholders as provided in this Indenture. The Bond
Obligations shall not constitute an indebtedness of the Issuer or a loan of credit thereof within the
meaning of any constitutional or statutory provision,nor shall the Bond Obligations be construed
to create any moral obligation on the part of the Issuer or any program participant thereof with
respect to payment of the Bond Obligations. No Bondholder shall have the right to compel any
exercise of taxing power of any program participant of the Issuer to pay the Bond Obligations.
(b) No provision,covenant or agreement contained in this Indenture or in the Bonds,
or any obligation herein or therein imposed upon the Issuer,or the breach thereof, shall constitute
or give rise to or impose upon the Issuer a pecuniary liability or a charge upon its general credit.
In making the agreements,provisions and covenants set forth in this Indenture,the Issuer has not
obligated itself except with respect to the Trust Estate.
Section 3.2 Officers,Directors,Commissioners,Etc.; Exempt from Individual Liability.
No recourse under or upon, or personal liability with respect to,any covenant or agreement of this
Indenture or of the Bonds,or for any claim based thereon or otherwise in respect thereof, shall be had
against any past,present or future elected or appointed official,officer,employee, commissioner or agent
of the Issuer or of the Trustee,or of any successor of either party,either directly or through the Issuer or
the Trustee,whether by virtue of any constitution,statute or rule of law,or by the enforcement bf any
assessment or penalty or otherwise;provided that the foregoing provisions of this Section 3.2 shall not
apply to any independent professional or firm of independent professionals acting in any capacity.
ARTICLE IV
THE BONDS
Section 4.1 Terms.
(a) Designation; Principal Amount. The Bonds shall be entitled"Multifamily
Housing Revenue Bonds(Hidden Cove Apartments Project)2003 Series A." The total principal
amount of Bonds that may be issued hereunder is hereby expressly limited to the Authorized
Amounts. No Bonds may be issued under the provisions of this Indenture except in accordance
with this Article.
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40511-124J78 9
(b) Registered Bonds;Numberiniz; Authorized Denominations. The Bonds shall be
issuable as a single series of registered bonds without coupons. The Bonds shall be numbered
consecutively from R-1 upward and may include any additional designator as determined by the
Trustee. The Bonds shall be issued only in Authorized Denominations.
(c) Date;Maturity. The Bonds shall be dated the Closing Date and shall mature on
the Maturity Date.
(d) Interest Rate;Accrual of Interest. The Bonds shall bear interest at the Bond
Coupon Rate. The Bond Coupon Rate for each Bond Coupon Rate Period with respect to the
Bonds shall be determined by the Indexing Agent on each Bond Coupon Rate Determination
Date, and the Indexing Agent will promptly after such determination notify the Trustee and the
Bondholder Representative of the applicable Bond Coupon Rate;provided,however,that no such
notice will be given if the Bond Coupon Rate equals the Fixed Bond Coupon Rate. The Bond
Coupon Rate for the Bonds may be converted to the Fixed Bond Coupon Rate pursuant to Section
4.10 of this Indenture.
Interest on the Bonds as provided herein shall accrue from the Closing Date;provided
that interest on any Bonds authenticated subsequent to the Closing Date shall accrue from the
Bond Payment Date preceding the date of authentication,unless such Bonds are(i)authenticated
prior to the first Bond Payment Date,in which event interest on such Bonds shall accrue from the
Closing Date, or(ii)authenticated on a Bond Payment Date,in which event interest on such
Bonds shall accrue from the date of authentication. If, as shown by the records of the Trustee,
interest on the Bonds is in default, interest on Bonds issued in exchange for Bonds surrendered
for registration of transfer or exchange shall accrue from the date to which interest has been paid
in full on the Bonds, or,.if no interest has been paid on the Bonds, from the Closing Date. The
amount of interest payable on the Bonds on each Bond Payment Date shall be the amount of
interest accrued thereon from the preceding Bond Payment Date(or other date as described
above)to,but not including,the Bond Payment Date on which interest is being paid.
(e) Interest Payments. Interest shall be due and payable on the Bonds,in arrears, on
each Bond Payment Date;provided however,that if any Bond Payment Date is not a Business
Day,payment of interest need not be made on such date,but may be made on the next Business
Day with the same force and effect as if such payment was made as originally scheduled. No
interest shall accrue for the period after such Bond Payment Date through the date payment is
actually made. Interest shall be computed on the basis of a 360-day year comprised of twelve 30-
day months;provided that at any time the Bonds bear interest at a rate greater than the Fixed
Bond Coupon Rate, such interest shall be computed on the basis of the Average Daily Interest
Cost for such month times 30 days. "Average Daily Interest Cost"for purposes of this Section
means the amount of interest on the Bonds computed on the basis of a 365 or 366 day year,as
applicable,for the actual number of days elapsed for the applicable calendar month divided by the
number of calendar days in such calendar month.
(f) Principal Payments. Principal of the Bonds shall be payable as provided herein
on their Maturity Date and upon redemption or acceleration thereof.
(g) Usu . The Issuer intends to conform strictly to the usury laws applicable to this
Indenture and the Bonds and all agreements made in the Bonds,this Indenture and the Bond
Documents are expressly limited so that in no event whatsoever shall the amount paid or agreed
to be paid to the Bondholders as interest or other amounts paid for the use of money advanced or
to be advanced hereunder exceed the highest lawful rate prescribed under any law which a court
DOCSSF1:671616.4
40511-124J78 10
of competent jurisdiction may deem applicable hereto. If, from any circumstances whatsoever,
the fulfillment of any provision of the Bonds,this Indenture or the Bond Documents shall involve
the payment of interest in excess of the limit prescribed by any law which a court of competent
jurisdiction may deem applicable hereto,then the obligation to pay interest hereunder shall be
reduced to the maximum limit prescribed by law; and if from any circumstances whatsoever,the
Bondholders shall ever receive anything of value deemed interest,the amount of which would
exceed the highest lawful rate, such amount as would be excessive interest shall be deemed to
have been applied,as of the date of receipt by the Bondholders,to the reduction of the principal
remaining unpaid hereunder and not to the payment of interest,or if such excessive interest
exceeds the unpaid principal balance, such excess shall be refunded to the Borrower. This
paragraph shall control every other provision of the Bonds,this Indenture and all Bond
Documents.
In determining whether the amount of interest charged and paid might otherwise exceed
the limit prescribed by law,the Issuer intends and agrees that(i)interest shall be computed upon
the assumption that payments under the Loan Agreement and other Bond Documents will be paid
according to the agreed terms, and(ii)any sums of money that are taken into account in the
calculation of interest,even though paid at one time, shall be spread over the stated term of the
Bonds.
(h) Payment of Amounts on Bonds. Payments of the Bond Obligations shall be
made on each Bond Payment Date or on a Remarketing Date,as applicable,to the Bondholders as
provided herein and in the Bonds. The Bond Obligations shall be payable in lawful money of the
United States of America by check drawn upon the Trustee and mailed by first class mail,postage
prepaid, on the Bond Payment Date to the persons in whose names the Bonds are registered on
the Bond Register at the close of business on the Record Date,except that if a Bondholder holds
Bonds in the aggregate principal amount of at least$1,000,000,any payment of Bond Obligations
due to such Bondholder shall be made by wire transfer of federal reserve funds to any account in
the United States of America designated by such Bondholder if such Bondholder, at its expense,
(a)so directs by written notice delivered to the Trustee at least ten(10)Business Days before the
date upon which such wire transfer or other arrangement is to be made and(b)otherwise
complies with the reasonable requirements of the Trustee. No presentation or surrender of Bonds
shall be required in connection with any partial redemption of any Bond. The Trustee shall
maintain a record of the remaining principal amount Outstanding and shall,upon any transfer or
exchange,issue the replacement Bond in the principal amount outstanding.
Section 4.2 Form of Bands. The Bonds and the certificate of authentication thereof shall be
substantially in the form set forth in Exhibit A attached hereto,with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by this Indenture. Any portion
of the text of any Bond may be set forth on the reverse thereof,with an appropriate reference thereto on
the face of such Bond. Bonds may be typewritten,printed, engraved,lithographed or otherwise produced.
Section 4.3 Execution,Authentication and Delivery.
(a) The Bonds shall be executed on behalf of the Issuer by the manual or facsimile
signature of an Authorized Issuer Representative and attested by the manual or facsimile
signature of Clerk of the Board of Supervisors of the Issuer. Bonds bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of the Issuer shall
bind the Issuer,notwithstanding that such individuals or any of them shall have ceased to hold
such offices prior to the authentication and delivery of the Bonds or shall not have held such
offices at the date of the Bonds.
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40511-124J78 11
(b) At any time and from time to time after the execution and delivery of this
Indenture,the Issuer may deliver Bonds executed by the Issuer to the Trustee for authentication,
and the Trustee shall authenticate and deliver such Bonds as in this Indenture provided and not
otherwise.
(c) No Bonds shall be secured by, or be entitled to any lien,right or benefit under,
this Indenture or be valid or obligatory for any purpose,unless there appears on such Bonds a
certificate of authentication substantially in the form provided for herein,executed by the Trustee
by manual signature, and such certificate upon any Bonds shall be conclusive evidence,and the
only evidence,that such Bonds have been duly authenticated and delivered hereunder.
Section 4.4 [Reserved].
Section 4.5 Registration; Transfer and Exchange.
(a) The Issuer shall cause the Trustee to keep►at the Office of the Trustee the Bond
Register in which,subject to such reasonable regulations as it may prescribe,the Issuer shall
provide for the registration of the Bonds and registration of transfers of the Bonds entitled to be
registered or transferred as herein provided. The Trustee is hereby appointed Bond Registrar
hereunder for the purpose of registering and transferring the Bonds as herein provided.
(b) Subject to subsection(e) of this Section,upon the initial issuance of Bonds,upon
surrender for transfer of Bonds at the Office of the Trustee and upon presentation of Bonds for
exchange for Bonds of other Authorized Denominations,the Issuer shall execute and the Trustee
shall authenticate and deliver, in the name of the designated transferee or transferees,new Bonds
of Authorized Denominations and of like principal amounts.
(c) Any Bonds surrendered upon any exchange or transfer provided for in this
Indenture shall be promptly cancelled by the Trustee.
(d) Any Bonds issued upon any transfer or exchange of Bonds shall be the valid
obligation of the Issuer and entitled to the same security and benefits under this Indenture as the
Bonds surrendered upon such transfer or exchange.
(e) The Bonds shall only be sold and subsequently transferred to sophisticated
investors that execute and deliver to the Trustee an Investor Letter,unless the Bonds are rated
"A"(or the equivalent)or better by a Rating Agency. Every Bond presented or surrendered for
transfer or exchange shall contain, or be accompanied by, all necessary endorsements for transfer.
(f) No service charge shall be made for any transfer or exchange of the Bonds,but
the Issuer or the Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or exchange of the
Bonds. Such sums shall be paid in every instance by the transferor or transferee of the Bonds.
(g) The Trustee shall not be required(i)to transf6r or exchange any Bonds during
any period beginning at the opening of business fifteen(15)days before the day of the mailing of
a notice of redemption of the Bonds and ending at the close of business on the day of such
mailing, or(ii)to transfer or exchange any Bonds so selected for redemption or(iii)to transfer
any Bonds without receipt of a duly executed Investor Letter to the extent required by subsection
(e)above.
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Section 4.6 Mutilated Destroyed,Lost and Stolen Bonds.
(a) If(i) any mutilated Bonds are surrendered to the Trustee,or the Issuer and the
Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Bonds, and
(ii)there is delivered to the Trustee such security or indemnity as may be required by the.Trustee
to save the Issuer and the Trustee harmless,then,in the absence of notice to the Trustee that such
Bonds have been acquired by a bona fide purchaser,the Issuer shall execute and the Trustee shall
authenticate and deliver,in exchange for or in lieu of any such mutilated,destroyed,lost or stolen
Bonds,new Bonds of like tenor and principal amount,bearing numbers not contemporaneously
outstanding.
(b) Upon the issuance of any new Bonds under this Section,the Issuer may require
the payment of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses connected therewith.
(c) Every new Bond issued pursuant to this Section in lieu of any destroyed,lost or
stolen Bonds shall constitute an original additional contractual obligation of the Issuer,whether or
not the destroyed,lost or stolen Bonds shall be at any time enforceable by anyone,and shall be
entitled to all the security and benefits of this Indenture.
(d) The provisions of this Section are exclusive and shall preclude(to the extent
lawful)all other rights and remedies with respect to the replacement or payment of mutilated,
destroyed lost or stolen Bonds.
Section 4.7 Persons Deemed Owners. The Issuer,.the Trustee and any agent of the Issuer or
the Trustee may treat the person in whose name the Bonds are registered as the owner of the Bonds for
the purpose of receiving payment of the Bond Obligations and for.all other purposes whatsoever whether
or not the Bonds are overdue,and,to the extent permitted by law,neither the Issuer,the Trustee nor any
such agent shall be affected by notice to the contrary.
Section 4.8 Cancellation. Any Bonds surrendered for payment,redemption,transfer or
exchange, shall be promptly cancelled and retained by the Trustee in accordance with its document
retention policy. No Bonds shall be authenticated in lieu of or in exchange for any Bonds cancelled as
provided in this Section,except as expressly provided by this Indenture.
Section 4.9 No Book-Entry System.
(a) The Bonds shall be delivered to the Bond Purchaser and to any subsequent
transferee in the form of physical certificated instruments registered in the name of the
Bondholder,unless the Bonds are rated"A"(or its equivalent)or better by a Rating Agency or
the use of a Securities Depository is consented to by the Issuer.
(b) Upon the consent of the Issuer,the Bonds may be issued pursuant to a Book-
Entry System administered by the Securities Depository with no physical distribution of Bond
certificates to be made except as provided in this Section 4.9(b). So long as a Book-Entry System
is in effect for the Bonds,one Bond in the aggregate principal amount of each maturity of the
Bonds will be issued and deposited with the Securities Depository to be held in its custody. Such
Bond or Bonds shall be registered in the name of the Securities Depository Nominee. The Book-
Entry System will be maintained by the Securities Depository and the Participants and Indirect
Participants and will evidence beneficial ownership of the Bonds in Authorized Denominations,
with transfers of ownership effected on the records of the Securities Depository,the Participants
DOCSSF1:671616.4
40511-124.j78 13
and the Indirect Participants pursuant to rules and procedures established by the Securities
Depository,the Participants and the Indirect Participants. The principal or purchase price of and
any premium on each Bond shall be payable to the Securities Depository Nominee or any other
person appearing on the registration books maintained by the Trustee as the registered
Bondholder or his registered assigns or legal representative. So long as the Book-Entry System is
in effect,the Securities Depository will be recognized as the sole Bondholder for all purposes.
Transfers of principal,purchase price,interest and any premium payments or notices to
Participants and Indirect Participants will be the responsibility of the Securities Depository,and
transfers of principal,purchase price,interest and any premium payments or notices to Beneficial
Owners will be the responsibility of the Participants and the Indirect Participants. No other party
will be responsible or liable for such transfers of payments or notices or for maintaining,
supervising or reviewing such records maintained by the Securities Depository,the Participants
or the Indirect Participants. While the Book-Entry System is in effect,notwithstanding any other
provisions set forth herein,payments of principal or purchase price of,redemption premium,if
any, and interest on the Bonds shall be made to the Securities Depository Nominee or the
Securities Depository, as the case may be,by wire transfer in immediately available funds to the
account of such entity.
(c) The Issuer may at any time elect(i)to provide for the replacement of any
Securities Depository as the depository for the Bonds with another qualified Securities
Depository,or(ii)to discontinue the maintenance of the Bonds under a Book-Entry System.
Upon written notice of such election,the Trustee shall give 30 days' prior notice of such election
to the Securities Depository(or such fewer number of days as shall be acceptable to such
Securities Depository).
(d) Upon the discontinuance of the maintenance of the Bonds under a Book-Entry
System,the Issuer will cause Bonds to be issued directly to the Beneficial Owners of Bonds, or
their designees, as further described below. In such event,the Trustee shall make provisions to
notify Participants and the Beneficial Owners,by mailing an appropriate notice to the Securities
Depository, or by other means deemed appropriate by the Trustee in its discretion,that Bonds
will be directly issued to the Beneficial Owners of Bonds as of a date set forth in such notice,
which shall be a date at least 10 days after the date of mailing of such notice(or such fewer
number of days as shall be acceptable to the Securities Depository). Upon such event,the Issuer,
at the expense of the Borrower, or if the discontinuance was requested by the Bondholder
Representative or the Hedge Provider,at the expense of the Hedge Provider, shall promptly have
prepared Bonds in certificated form registered in the names of the Beneficial Owners of Bonds
shown on the records of the Participants provided to the Trustee,as of the date set forth in the
notice described above. Bonds issued to the Beneficial Owners,or their designees, shall be in
fully registered form substantially in the form set forth in Exhibit A. In such event,this Indenture
may be amended as the parties deem necessary pursuant to.Section 13.1(f)hereof M* order to
reflect the use of certificated Bonds.
(e) If any Securities Depository is replaced as the depository for the Bonds with
another qualified Securities Depository,the Issuer,at the expense of the Hedge Provider,will
issue to the replacement Securities Depository Bonds substantially in the form set forth in
Exhibit A,registered in the name of such replacement Securities Depository.
(f) The Issuer,the Borrower and the Trustee shall have no liability for the failure of
any Securities Depository to perform its obligation to any Participant, any Indirect Participant or
any Beneficial Owner of any Bonds,and none of them shall be liable for the failure of any
Participant,Indirect Participant or other nominee of any Beneficial Owner of any Bonds to
DOCSSF1:671616.4
40511-124J78 14
perform any obligation that such Participant, Indirect Participant or other nominee may incur to
any Beneficial Owner.
(g) Notwithstanding any other provision of this Indenture,on or prior to the date of
issuance of the Bonds,the Issuer shall have executed and delivered to the initial Securities
Depository a letter of representations(the"Letter of Representations")governing various matters
relating to the Securities Depository and its activities pertaining to the Bonds. The terms and
provisions of the Letter of Representations are incorporated herein by reference and, in the event
there shall exist any inconsistency between the substantive provisions of the Letter of
Representations and any provisions of this Indenture,then,for as long as the initial Securities
Depository shall serve with respect to the Bonds,the terms of the Letter of Representations shall
govern.
(h) The Issuer,the Borrower and the Trustee may rely conclusively upon(i)a
certificate of the Securities Depository as to the identity of the Participants in the Book-Entry
System; (ii)a certificate of any Participant as to the identity of any Indirect Participant and(iii)a
certificate of any Participant or Indirect Participant as to the identity of, and the respective
principal amount of Bonds beneficially owned by,the Beneficial Owners.
Section 4.10 Conversion to Fixed Bond Coupon Rate;Remarketing of Bonds.
(a) The interest rate on the Bonds shall be converted to the applicable Fixed Bond
Coupon Rate or lesser rate as set forth below, for the period from the applicable Bond Payment
Date(the"Remarketing Date")to the Maturity Date, at the election of the Issuer,with the written
consent of the Bondholder Representative, or at the election of the Bondholder Representative,
upon satisfaction of the following conditions:
I. At least 30 days prior to the proposed Remarketing Date:
(i) The Issuer or the Bondholder Representative,as applicable, shall
have given the Remarketing Agent written notice of its election
to convert the interest rate on the Bonds in accordance with the
provisions of this Section 4.10; and
(ii) The Issuer shall have approved in writing as to form and
substance any disclosure document that, in the opinion of
counsel to the Issuer and the Remarketing Agent,is necessary to
be used in connection with the remarketing of the Bonds.
II. At least 15 days prior to the proposed Remarketing Date:
(i) The Remarketing Agent shall have determined the interest rate
the Bonds will bear on and after the proposed Remarketing Date
in accordance with Section 4.10(d)and shall have entered into a
purchase agreement to purchase all of the tendered or deemed
tendered Bonds at a price of par;
1
(ii) Provision for the payment of remarketing expenses by or on
behalf of the Bondholder Representative shall have been made to
the satisfaction of the Issuer,the Trustee and the Remarketing
Agent; and
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40511-124J78 15
(iii) The Issuer and the Trustee shall receive an Opinion of Bond
Counsel.
III. At least one Business Day prior to the Remarketing Date:
(i) A certificate in substantially the form attached hereto as
Exhibit B should be prepared,executed and delivered to the
Trustee if a successor Bondholder Representative is to be
appointed pursuant to this Indenture.
(b) Notwithstanding anything in this Indenture to the contrary,the Bonds are subject
to tender(with a right to retain on the part of the Bondholder)and purchase on the Remarketing
Date at a purchase price equal to 100%of the principal amount of Bonds purchased on such date,
plus accrued interest,if any,to the Remarketing Date. The Bonds shall be delivered by the
Holders who elect to tender their Bonds (with all necessary endorsements)to the office of the
Trustee designated by the Trustee for such purpose,at or before 11:00 a.m., Eastern time,on the
Remarketing Date and payment of the purchase price shall be made in immediately available
funds by close of business on the Remarketing Date as set forth in Section 4.1(h)hereof.
(c) The Trustee shall give notice to all Holders at the addresses appearing on the
Bond Register,by first-class mail,postage prepaid,not less than ten(10)days preceding the
Remarketing Date,which notice shall state: (i)the Remarketing Date and the interest rate to be
borne by the Bonds on and after the Remarketing Date; (ii)that the Bonds are subject to tender
and purchase on the Remarketing Date,but that a Holder may elect to retain its Bonds;(iii)the
Holders who elect to retain their Bonds are to deliver a notice of such Holders election(a"Notice
of Retention")to the Trustee on or before 4:00 p.m.,Eastern time,on the fifth Business Day prior
to the Remarketing Date; (iv)that the Holders that elect not to retain their Bonds are to deliver
their Bonds to the office of the Trustee designated by the Trustee for such purpose before 11:00
a.m.,Eastern time,on the Remarketing Date for purchase; (v)that,upon the delivery to the
Trustee of the purchase price for all of the tendered Bonds, all such tendered Bonds shall be
purchased on the Remarketing Date at a price equal to the principal amount thereof plus accrued
interest,if any,to such date and all tendered Bonds shall cease to bear interest from and after the
Remarketing Date; and(vi)that Bonds held by Holders who do not deliver a Notice of Retention
to the Trustee shall be deemed tendered and shall cease to bear interest from and after the
Remarketing Date. The Trustee shall give notice to the Remarketing Agent,by electronic means,
of the Holders that have elected to retain their Bonds and the aggregate principal amount of
Bonds held by such Holders not later than 5:00 p.m.,Eastern time,on the fifth(5th)Business Day
prior to the proposed Remarketing Date.
(d) On and after the Remarketing Date,the Bonds shall bear interest at the rate(but
not to exceed the applicable Fixed Bond Coupon Rate)determined by the Remarketing Agent on
a date not less than fifteen(15)days prior to the proposed Remarketing Date,to be the lowest
interest rate for which the Bonds could be remarketed at par. If,in the reasonable judgment of the
Remarketing Agent,based on then current market conditions,the Bonds cannot be remarketed at
par bearing interest at the applicable Fixed Bond Coupon Rate,then the interest rate on the Bonds
shall not be converted and the Bonds shall not be remarketed on the proposed Remarketing Date
and the Bonds shall continue to bear interest at the Bond Coupon Rate. The Remarketing Agent
shall promptly after any such determination notify the Trustee and the Bondholder
Representative,in writing, of its judgment that the Bonds cannot be remarketed at a price of par
as described above.
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40511-124 J78 16
(e) The Remarketing Agent shall,not later than 5:00 p.m.,Eastern time,on the
Business Day immediately prior to the Remarketing Date,notify the Trustee,by phone confirmed
immediately in writing,of the registration instructions(i.e.,the names of the tendering Holders
and the names,addresses and taxpayer identification numbers of the purchasers and the desired
Authorized Denominations)with respect to the tendered Bonds. Not later than 9:30 a.m., Eastern
time,on the Remarketing Date,the Remarketing Agent shall send to the Trustee by electronic
transfer immediately available funds in an amount equal to the purchase price of the tendered or
deemed tendered Bonds,who shall deposit such funds in the Remarketing Proceeds Account of
the Bond Fund. The Trustee shall authenticate and have available for delivery to the Remarketing
Agent by 4:00 p.m.,Eastern time,on the Remarketing Date new Bonds for the respective
purchasers thereof. Bonds sold by the Remarketing Agent pursuant to this subsection shall be
delivered by the Remarketing Agent or the Trustee, as the case may be,to the purchasers of such
Bonds by 5:00 p.m.,Eastern time,on the Remarketing Date.
(f) On or before the close of business on the Remarketing Date,the Trustee shall
purchase the Bonds that have been remarketed from the Holders thereof at the applicable
purchase price,from moneys available for such purpose. Funds for the payment of such purchase
price shall be derived from finds on deposit in the Remarketing Proceeds Account.
(g) If Bonds to be tendered and purchased are not delivered by the Holders to the
Trustee by 11:00 a.m.,Eastern time, on the Remarketing Date,the Trustee shall hold any funds
received for the purchase of such Bonds in trust in a separate account and shall pay such funds to
the former Holders of such Bonds upon presentation of the Bonds. Such undelivered Bonds shall
be deemed to have been tendered and shall cease to accrue interest as to the former Holders on
the Remarketing Date,and moneys representing the purchase price of such Bonds shall be
available against delivery thereof at the Office of Trustee. Any Bond so deemed to be tendered
shall bear interest to the applicable Remarketing Date and, on and after such Remarketing Date,
shall not be entitled to any rights under, or secured by the lien of, the Indenture and the Holders
thereof shall have only the right to receive the purchase price therefor as hereinabove specified,
except as otherwise provided herein. The Trustee promptly shall give notice by mail to'each
Holder of a Bond whose Bond is deemed to have been tendered,which notice shall state that
interest on such Bond ceased to accrue on and after the applicable Remarketing Date and that
moneys representing the purchase price therefor are,subject to the provisions of this Indenture,
available at the Office of Trustee upon application of the Holder thereof and tender of the Bond
held by such Holder.
(h) Upon the election of the Bondholder Representative,delivery of a Favorable
Opinion of Bond Counsel to the Issuer and the Trustee and satisfaction of the conditions set forth
in Section 4.1 0(a),the interest rate borne by the Bonds may be set at a fixed rate (but not to
exceed the applicable Fixed Bond Coupon Rate) for a period expiring prior to the Maturity Date
that is approved in such Favorable Opinion of Bond Counsel.
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40511-124J78 17
ARTICLE V
[RESERV`EDJ
ARTICLE VI
REDEMPTION OF BONDS
Section 6.1 Optional Redemption. The Bonds may be redeemed on any Business Day upon
prepayment of the Note by the Borrower pursuant to Section 2.11 of the Loan Agreement, in whole,but
not in part,on any date on which the Note may be prepaid pursuant to and in accordance with its terms,at
the Redemption Price and upon notice to the Bondholders, given by the Trustee in accordance with
Section 6.7 hereof. No such optional redemption of Bonds shall be permitted unless the Trustee shall
have received funds from the Borrower,the Hedge Provider or the provider of the Cap Agreement,as
applicable,in a cumulative amount sufficient to pay the Redemption Price of the Bonds not later than the
date that the Bonds are to be redeemed.
The Borrower may exercise such option by giving Written Notice to the Trustee and the
Bondholder Representative of its election to prepay the Note,not less than twenty(20)days prior to the
proposed redemption date. Any such notice shall specify the date fixed for optional redemption and
contain a certification of the Borrower to the effect that all conditions precedent to such optional
redemption have been(or will be,as of the optional redemption date)satisfied. The Bondholder
Representative shall,not less than fifteen(15)days prior to the date set for such optional redemption,
deliver a Written Certificate to the Trustee and to the Borrower setting forth the amount of accrued
interest on the Note and the Bonds and the Prepayment Premium,if any,that will be due and payable as
of the date fixed for optional redemption.
Section 6.2 Redemption from Amounts Transferred from Project Fund. The Bonds shall
be redeemed,in part,in the event and to the extent amounts remaining in the Project Fund are transferred
to the Redemption Account of the Bond Fund pursuant to Section 8.7(c)hereof, on the first Bond
Payment Date for which notice of redemption can be given in accordance with Section 6.7 hereof,at the
Redemption Price.
Section 6.3 Mandatory Redemption. The Bonds shall be redeemed in whole,or in part,
upon prepayment of the Note by the Borrower as required by Section 2.12 of the Loan Agreement on the
earliest Business Day for which notice can be given in accordance with Section 6.7 hereof at the
Redemption Price,as provided in the Note.
Section 6.4 Redemption for Bond Document Default. The Bonds shall be redeemed in
whole,,or in part,upon Written Direction of the Bondholder Representative to the Trustee,pursuant to
Section 8.2 of the Loan Agreement,in the event of the occurrence of a Loan Agreement Default or a
default or event of default by the Borrower under any other Bond Document and the expiration of the
applicable grace period or notice and cure period,if any,.specified therein,on the earliest Business Day
for which notice can be given as required by Section 6.7 hereof,at the Redemption Price,together with
any Prepayment Premium, as provided in the Note.
Section 6.5 Mandatory Sinking Fund Redemption. The Bonds shall be redeemed at a
redemption price equal to the principal amount of the Bonds being redeemed plus accrued interest to the
date of redemption,but without premium,and shall be redeemed in part on each Bond Payment Date,
commencing the first business day of the month immediately after commencement of amortization of the
DOCSSF1:671616.4
40511-124J78 18
Note,from amounts paid by the Borrower as principal under the applicable Note for the prior calendar
month, as confirmed to the Trustee by the Servicer.
Section 6.6 Purchase in Lieu of Redemption. The Borrower shall have the option to cause
the Bonds to be purchased in lieu of redemption pursuant to Section 6.1 and the Bondholder
Representative shall have the option to cause the Bonds to be purchased in lieu of redemption pursuant to
Section 6.3 or Section 6.4. Such option maybe exercised by the Borrower or the Bondholder
Representative,as the case maybe,by delivery to the Trustee(with a copy to the Issuer)on or prior to the
Business Day preceding the redemption date of a Written Notice of the Borrower or the Bondholder
Representative,as applicable, specifying that the Bonds shall not be redeemed,but instead shall be
subject to purchase pursuant to this Section. Upon delivery of such notice,the Bonds shall not be
redeemed but shall instead be subject to mandatory tender at a purchase price(the"Purchase Price")equal
to the Redemption Price at which the Bonds would have been redeemed hereunder on the date that would
have been the redemption date. Bonds purchased pursuant to this Section shall bear interest at the Fixed
Bond Coupon Rate.
Section 6.7 Notice of Redemption. Not less than fifteen(15)days nor more than thirty(30)
days before the redemption date of any Bonds to be redeemed(except with respect to a redemption
pursuant to Section 6.5 of this Indenture,for which no notice shall be provided),the Trustee shall cause a
notice of any such redemption to be mailed by first class mail(certified mail to the Bondholder
Representative),postage prepaid,to the Registered Owners of the Bonds(with a copy to the Borrower
and the Bondholder Representative). Such notice shall also be given by registered,certified or overnight
mail,or by facsimile transmission promptly confirmed in writing,to all registered securities depositories
then in the business of holding substantial amounts of obligations of types comprising the Bonds and to
one or more national information services that disseminate notices of redemption of obligations such as
the Bonds. The redemption notice shall identify the Bonds or portions thereof to be redeemed and shall
state:
(i) the date of such notice and the redemption date;
(ii) the Redemption Price;
(iii) the original date of execution and delivery of the Bonds to be redeemed;
(iv) the date of maturity of the Bonds;
(v) the numbers and CUSIP numbers of the Bonds to be redeemed;
(vi) that the Redemption Price of any Bond is payable only upon the
surrender of the Bond to the Trustee at the Office of Trustee;
(vii) the address at which the Bonds must be surrendered;
(viii) that interest on the Bonds called for redemption ceases to accrue on the
redemption date,provided that,subject to the last paragraph of this Section 6.7,on such
date funds are on deposit in the Bond Fund sufficient to pay the Redemption Price of the
Bonds in full; and
(ix) such additional descriptive information identifying the Bonds to be
redeemed as may be deemed appropriate by the Trustee to effect the redemption.
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40511-124J78 19
Any notice mailed pursuant to this Section may state that the scheduled redemption is conditional to the
extent that funds are not held by the Trustee on the redemption date;in which case, all Bonds shall be
returned to the holders thereof and remain outstanding under the terms and conditions of this Indenture.
Section 6.8 Deposit of Redemption Price or Purchase Price. On or prior to any
redemption date or date of purchase in lieu of redemption pursuant to Section 6.6,and as a condition to
such redemption or purchase,the Borrower shall deposit or cause there to be deposited with the Trustee
funds in an amount equal to(i)the principal amount of the Note to be prepaid,(ii)the interest on such
principal amount through the date of such prepayment,(iii)any Prepayment Premium payable under the
Note, and(iv)any Additional Payments due under the Loan Agreement through the date of such
prepayment,which amount shall be applied to pay the Redemption Price or Purchase Price,as the case
may be, of the Bonds to be redeemed or purchased pursuant to Section 6.6 of the applicable redemption
date or date of purchase. If the Borrower has deposited or caused to be deposited with the Trustee the
amount set forth in the preceding sentence,the Borrower shall not be liable for any additional amounts
due on the Bonds in connection with such redemption or purchase. Any additional amount necessary to
pay the Redemption Price or the Purchase Price, as the case may be,or other costs related to the Bonds
shall be deposited by Hedge Provider with the Trustee. Such money shall be held in trust for the benefit
of the Persons entitled to such Redemption Price or Purchase Price and shall not be deemed to be part of
the Trust Estate.
Section 6.9 Bonds Payable on Redemption Date. Notice of redemption having been given
as aforesaid,the Bonds or portions thereof designated for redemption shall become due and payable on
the redemption date at the Redemption Price and from and after such date,unless the Issuer shall default
in the payment of the Redemption Price, such Bonds or portions thereof shall cease to bear interest from
and after the redemption date whether or not such Bonds are presented and surrendered for payment on
such date. If any Bond or portion thereof called for redemption is not so paid upon presentation and
surrender thereof on the redemption date,such Bond or portion thereof shall continue to bear interest at
the rate or rates provided for thereon until paid and the Registered Owners thereof shall have all of the
rights and be subject to the limitations set forth in Article XI hereof. Upon surrender of the Bonds for
redemption in accordance with said notice,the Bonds shall be paid by the Trustee on behalf of the Issuer
at the Redemption Price. Installments of interest due on or prior to the redemption date shall be payable
to the Registered Owners as of the relevant Record Dates,without surrender thereof,according to the
terms of the Bonds and the provisions of this Indenture.
Section 6.10 Partial Redemption; Selection of Bonds. If less than all of the Bonds are called
for redemption,the Bonds to be redeemed shall be selected by lot in such manner as the Trustee in its
discretion may determine. In the event that a Bond subject to redemption pursuant to this Article VI is in
a denomination larger than an Authorized Denomination,all or a portion of such Bond may be redeemed,
but only in a principal amount such that the remaining principal amount of the Bond not so redeemed
shall be an Authorized Denomination,unless the aggregate principal amount of Bonds Outstanding is an
amount less than the minimum Authorized Denomination permitted hereunder.
ARTICLE VH
DELIVERY OF BONDS;APPLICATION OF BOND PROCEEDS
Section 7.1 Conditions Precedent to the Delivery of Bonds. Prior to the delivery of the
W
Bonds by the Trustee on the Closing Date,there shall be received by the Issuer and the Trustee, as
appropriate:
(a) Executed counterparts of this Indenture and the other Bond Documents;
DOCSSF1:671616.4
40511-124J78 20
(b) A certified copy of the Resolution;
(c) An executed Investor Letter from the Bond Purchaser;
(d) The purchase price of the Bonds from the Bond Purchaser;
(e) The Initial Deposit and the Costs of Issuance Deposit(unless such amounts are to
be paid from the proceeds of the Bonds);and
(f) An opinion of Bond Counsel substantially to the effect that the Bonds constitute
valid and binding obligations of the Issuer and that under existing statutes,regulations,published
rulings and judicial decisions,the interest on the Bonds is not includable in gross income for
federal income tax purposes.
Section 7.2 Proceeds From Sale of Bonds. The Trustee shall deposit the proceeds derived
from sale of the Bonds,together with other funds received from the Borrower as described in this Section
7.2,as follows:
(a) The Trustee shall deposit the proceeds of the Bonds in the amount of
$ to the Project Fund;
(b) The Trustee shall deposit to the Costs of Issuance Fund the amount of
$ representing the Costs of Issuance Deposit; and
(c) The Trustee shall deposit to the Interest Account of the Bond Fund,the Initial
Deposit.
Section 7.3 Deposit of Other Funds. Other moneys deposited by the Borrower shall be held
by the Trustee and deposited into such accounts as directed by the Borrower in meting.
ARTICLE VIII
PLEDGE;FUNDS
Section 8.1 Pledge of Revenues and Assets. The pledge and assignment of and the security
interest granted in the Trust Estate pursuant to the Granting Clauses hereof for the payment of the
principal of,premium,if any,and interest on the Bonds,in accordance with their terms and provisions,
and for the payment of all other amounts due hereunder,shall attach and be valid and binding from and
after the time of the delivery of the Bonds by the Trustee or by any person authorized by the Trustee to
-deliver the Bonds. The Trust Estate so pledged and then or thereafter received by the Trustee shall
immediately be subject to the lien of such pledge and security interest without any physical delivery or
recording thereof or further act,and the lien of such pledge and security interest shall be valid and binding
and prior to the claims of any and all parties having claims of any kind in tort,contract or otherwise
against the Issuer irrespective of whether such parties have notice thereof.
Section 8.2 Establishment of Funds. There are established with the Trustee the following
trust funds:
(i) the Bond Fund(including the Interest Account, the Principal Account,
the Redemption Account and the Remarketing Proceeds Account therein);
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the Project Fund;
the Rebate Fund;
(iv) the Expense Fund; and
(v) the Costs of Issuance Fund.
All money required to be deposited with or paid to the Trustee for the account of any of the funds
created by this Indenture shall be held by the Trustee in trust for the benefit of the Bondholders, and
(except for(i)money held in the Expense Fund and the Rebate Fund,and(ii)money deposited with or
paid to the Trustee for the redemption of Bonds,notice of the redemption of which has been duly given,
shall,while held by the Trustee),constitute part of the Trust Estate and be subject to the lien hereof.
Section 8.3 Application of Pledged Revenues and Other Amounts.
(a) All money received by the Trustee from the Borrower or the Servicer pursuant to
Section 2.6 of the Loan Agreement; all Hedge Payments, and amounts received under a Cap
Agreement; and all other Pledged Revenues(except as provided in(b)below),whenever
received, shall be disbursed or transferred,as appropriate,by the Trustee in the following order of
priority:
(i) to the Interest Account of the Bond Fund,an amount that,when taken
together with other amounts already on deposit therein,equals the interest due on the
Bonds on the next Bond Payment Date;
(ii) to the Principal Account of the Bond Fund, an amount equal to the
amounts paid by the Borrower as scheduled principal under the Note for the prior
calendar month, as confirmed to the Trustee by the Servicer in writing;
(iii) to the Expense Fund, 1/12 of the annual Trustee Fee, 1/12 of the Annual
Issuer's Fee and 1/12 of the annual fee of any rebate analyst.
(iv) to the Redemption Account of the Bond Fund,the amount,if any,
required to redeem Bonds on a designated redemption date; and
(v) any Pledged Revenues remaining after the preceding transfers shall be
deposited into the Interest Account of the Bond Fund and held therein;provided,
however,that any amounts received under or pursuant to the Hedge Agreement or a Cap
Agreement on any Bond Payment Date in excess of the amount required to pay the
interest on the Bonds on such date shall as soon as practicable be remitted by the Trustee,
by wire transfer,to the Hedge Provider.
(b) All money received by the Trustee from the Borrower or the Servicer pursuant to
Section 2.7 of the Loan Agreement shall be disbursed or transferred,as appropriate,when
received,in the following order of priority:
(i) to the Rebate Fund,an amount equal to the amount,if any,then required
to be deposited therein pursuant to Section 8.8 hereof.
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to the Expense Fund,any payments for extraordinary expenses pursuant
to Section 2.7 of the Loan Agreement.
Section 8.4 Bond Fund.
(a) The Trustee shall deposit moneys it receives for deposit to the Bond Fund in the
appropriate account of the Bond Fund as follows:
(i) Interest Account. The Trustee will deposit in the Interest Account the
amounts set forth in Section 83(a)(i)and(v)above. Except as otherwise provided in this
Indenture,moneys on deposit in the Interest Account shall be used solely to pay interest
on the Bonds when due or as provided in Section 8.4(c)below.
(ii) Principal Account. The Trustee will deposit in the Principal Account the
amount set forth in Section 8.3(a)(ii)above. Except as otherwise provided in this
Indenture,moneys on deposit in the Principal Account shall be used solely to pay
principal on the Bonds when due.
(iii) Redemption Account. The Trustee will deposit in the Redemption
Account the amounts set forth in Section 8.3(a)(iv)above). Moneys on deposit in the
Redemption Account shall be used solely to pay the Redemption Price of Bonds upon the
redemption thereof pursuant to Article VI hereof.
(iv) Remarketing Proceeds Account. The Trustee will deposit in the
Remarketing Proceeds Account all amounts received from the Remarketing Agent and,in
a separate subaccount therein,all moneys received under the Hedge Agreement to pay the
purchase price of the Bonds remarketed pursuant to Section 4.10 of this Indenture.
Moneys on deposit in the Remarketing Proceeds Account shall be used solely to pay the
purchase price of tendered Bonds.
(b) The Trustee will deposit in the Interest Account of the Bond Fund any other
amounts received by the Trustee that are subject to the lien and pledge of this Indenture and
which are to be applied to the payment of the Bonds.
(c) If on any Bond Payment Date the amount on deposit in any Account of the Bond
Fundis insufficient to make the payments described above,the Trustee shall notify the
Bondholder Representative in writing of such deficiency.
Section 8.5 Expense Fund. The Trustee shall deposit in the Expense Fund the amounts
referred to in Section 8.3(a)(iii)and(b)(ii)hereof. Amounts in the Expense Fund shall be used to pay the
Issuer's Fee,the Trustee's Fees and Rebate Analyst Fees as and when the same become due. In the Loan
Agreement,the Borrower has agreed to pay directly to the Issuer or the Trustee any extraordinary fees
and expenses of the Issuer's or the Trustee,as the case maybe,that are not included within the Issuer's
Fee or the Trustee's Fees.
Section 8.6 Costs of Issuance Fund. Amounts in the Costs of Issuance Fund,if any,shall be
disbursed by the Trustee only to pay Costs of Issuance upon receipt of a Written Requisition of the Issuer,
which requisition shall state the amount to be paid,the payee and the purpose for such payment. Upon
the earlier of(i)the date that is sixty(60)days following the Closing Date,or(ii)receipt of Written
Direction from the Issuer,the Trustee shall remit to or at the direction of the Borrower all amounts
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remaining in the Costs of Issuance Fund(including investment proceeds on moneys initially deposited by
the Borrower from moneys other than Bond proceeds).
Section 8.7 Project Fund.
(a) The Trustee shall use moneys in the Project Fund solely for the acquisition and
rehabilitation of the Project including the payment of Qualified Project Costs and other costs
related to the Project,as provided herein and in accordance with the Tax Agreement. Before any
payment shall be made from the Project Fund,the Regulatory Agreement and Mortgage shall
have been recorded in the official records of the County of Contra Costa(confirmed by the title
company responsible for such recording)and there shall be filed with the Trustee a Written
Requisition of the Borrower substantially in the form attached hereto as Exhibit C and approved
by the Servicer.
(b) Upon receipt of each Written Requisition approved by the Servicer,the Trustee
shall within five business days make payment from the appropriate account,if applicable,within
the Project Fund in accordance with such requisition. All such payments shall be made by check
or draft payable either(i)directly to the person, firm or corporation to be paid,(ii)to the
Borrower and such person, firm or corporation,or(iii)upon receipt of evidence that the Borrower
has previously paid such amount,to the Borrower. Upon the occurrence of an Event of Default
of the Borrower,which is continuing under the Bond Documents, the Trustee may apply amounts
on deposit in the Project Fund to the payment of principal of and interest on the Bonds.
(c) Upon receipt by the Trustee of written notification from the Bondholder
Representative that the Conditions to Conversion have been satisfied,as determined in
accordance with the Commitment,the Trustee shall(i)transfer the balance of any moneys
remaining in the Project Fund to the Redemption Account of the Bond Fund and apply such
moneys to the redemption of Bonds,unless otherwise provided in a Written Request of the
Borrower,approved by the Bondholder Representative,in each case pursuant to Section 6.2
hereof.
(d) Any other moneys transferred to the Trustee for deposit into the Project Fund
shall be deposited by the Trustee upon receipt of such moneys and a Written Direction from the
Borrower directing such deposit. Any moneys deposited in the Project Fund under the terms of
this paragraph shall be held in a separate subaccount of the Project Fund and shall be released
upon receipt by the Trustee of a Written Requisition of the Borrower, approved by the Servicer.
Section 8.8 Rebate Fund.
(a) There shall be deposited in the Rebate Fund such amounts as are required to be
deposited therein in accordance with Sections 5.21 and 5.23 of the Loan Agreement and as set
forth in a Written Certificate of the Borrower delivered to the Trustee. Subj ect to the payment
provisions provided in subsection(b)below,all amounts on deposit at any time in the Rebate
Fund shall be held by the Trustee in trust,to the extent required to pay rebatable arbitrage to the
United States of America, and neither the Borrower,the Issuer,nor the Bondholders shall have
any rights in or claim to such moneys. All amounts held in the Rebate Fund shall be governed by
this Section and the Tax Agreement.
(b) Within thirty(3 0)days after the end of every fifth Bond Year(as defined in the
Tax Agreement),or such other period as required by the Tax Agreement, and within fifty-five
(55)days after the date on which no Bonds are outstanding,the Trustee shall request that the
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Borrower and the Hedge Provider, if any,each deliver to the Trustee(a)a Written Certificate
stating whether any rebate payment is required to be made and the amount of any such rebate
payment to be made,as set forth in the Tax Agreement, and(b) any amount so required to be paid
as a rebate payment for deposit to the Rebate Fund and written instructions as to where and when
such payment is to be made.
(c) Amounts in the Rebate Fund shall be applied as set forth in the Tax Agreement.
The Trustee shall remit all rebate installments and a final rebate payment to the United States in
accordance with the Written Certificate of the Borrower described above. The Trustee shall have
no obligation to pay any amounts required to be rebated pursuant to this Section,other than from
moneys held in the Rebate Fund or from other moneys provided to it by the Borrower or the
Hedge Provider. Any moneys remaining in the Rebate Fund after redemption or payment at
maturity of all of the Bonds and payment and satisfaction of any rebatable arbitrage, as set forth
in a Written Certificate of the Borrower to the Trustee,shall be withdrawn and paid to the
Borrower. The Trustee will retain such records with respect to the Rebate Fund as described in
the Tax Agreement.
(d) Notwithstanding any other provision of this Indenture,the obligation to pay
rebatable arbitrage to the United States and to comply with all other requirements of this Section
shall survive the defeasance or payment in full of the Bonds.
(e) Notwithstanding anything else contained in this Indenture to the contrary,unless
specifically agreed to in a separate written agreement,neither the Trustee nor the Bondholder
Representative shall be liable or responsible for any calculation or determination that may be
required in connection with or for the purpose of complying with Section 148 of the Code or any
successor statute, or any regulation,ruling or other judicial or administrative interpretation
thereof,including,without limitation,the calculation of amounts required to be paid to the United
States of America or the determination of the maximum amount which may be invested in
Nonpurpose Investments having a Yield higher than the Yield on the Bonds,and neither the
Trustee nor the Bondholder Representative shall be liable or responsible for monitoring
compliance by the Borrower,the Hedge Provider or the Issuer with any of the requirements of
Section 148 of the Code,or any applicable regulation,ruling or other judicial or administrative
interpretation thereof,it being acknowledged and agreed that the obligations of the Trustee in this
regard shall be limited to the receipt of funds for deposit in the Rebate Fund and the disbursement
thereof pursuant to written instructions of the Borrower,the Hedge Provider,the Bondholder
Representative or the Issuer,as applicable,and the investment of moneys received by the Trustee
pursuant to the written instructions of the Borrower,the Hedge Provider or the Bondholder
Representative, as applicable.
Section 8.9 [Reserved].
Section 8.10 Application of Funds and Accounts upon Event of Default. Upon the
occurrence of an Event of Default,the Trustee shall,at the written direction of the Bondholder
Representative,apply all moneys in the Funds and Accounts(except the Expense Fund and the Rebate
Fund)towards any of the Borrower Payment Obligations,in such order of priority as the Bondholder
Representative may direct,after debiting its fees and expenses, in its sole and absolute discretion,in
writing to the Trustee. Unless otherwise directed,the Trustee shall apply such moneys to pay, first,
unpaid interest on the Bonds and,then,to the payment of the principal of the Bonds.
Section 8.11 Ton-Presentment of Bonds. In the event any Bonds shall not be presented for
payment when the principal thereof becomes due, either at maturity or at the date fixed for redemption
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thereof or otherwise, if money sufficient to pay such Bonds shall have been made available to the Trustee
for the benefit of the registered holders thereof and shall have remained unclaimed after the later of the
period permitted by the statutory escheat or other applicable laws of the State, such funds shall be
released to the Borrower in accordance with such applicable laws of the State,or any successor provision
of law, and all liability of the Issuer to the registered owners thereof for the payment of such Bonds shall
forthwith cease,terminate and be completely discharged;provided,however,that the Trustee,before
being required to dispose of such funds as stated above shall cause to be published,at least 45 days but
not more than 90 days prior to such aforementioned release date, once in a financial newspaper or j ournal
of general circulation in New York,New York,notice that such money remains unclaimed and that,after
a date specified therein(which shall not be less than 45 days from the date of such publication),any
unclaimed balance of such money then remaining will be paid to the Borrower. The cost of such
publication shall be paid by the Borrower. The obligation of the Trustee under this Section to dispose of
any such funds pursuant to State law shall be subject to any other provisions of law applicable to the
Trustee or to such funds providing other requirements for disposition of unclaimed property.
Section 8.12 Repayment from Funds and Accounts. Any moneys remaining in any Fund or
Account created under the Indenture after payment or provision for payment in full of all Bond
Obligations, all fees,charges and expenses of the Issuer,the Trustee,the Rebate Analyst,the Bondholder
Representative and the Servicer,the payment of all parties to whom moneys are owed pursuant to
Section 8.3 hereof and all other amounts required to be paid by the Borrower hereunder or under the Bond
Documents, shall be paid to the Hedge Provider.
Section 8.13 Additional Funds. The Trustee is hereby authorized to establish and create from
time to time such other funds and accounts or subaccounts as may be necessary for the deposit of moneys
(including,without limitation, insurance proceeds and/or condemnation awards)received by the Trustee
pursuant to the terms hereof or any of the other Bond Documents.
Section 8.14 Subsequent Cap Agreement. In the event the Trustee does not receive a
substitute or replacement Cap Agreement at least three Business Days prior to the expiration of the then
current Cap Agreement held by the Trustee and the Bond Coupon Rate is not to be converted to a Fixed
Bond Coupon Rate upon termination of the then existing Cap Agreement,the Trustee shall immediately
provide written notice to the Bondholder Representative that it has not received a new Cap Agreement to
be in effect following expiration of the current Cap Agreement.
ARTICLE IX
INVESTMENT OF FUNDS
Section 9.1 Investment of Funds.
(a) Any money held as part of the Funds and Accounts shall be invested or
reinvested by the Trustee as directed in writing by the Borrower in Permitted Investments. All
such Permitted Investments purchased with money in any Fund or Account hereunder shall
mature, or be subject to redemption or withdrawal without discount or penalty,prior to the
succeeding Interest Payment Date. In addition,following receipt by a Responsible Officer of a
notice of an Event of Default of the Borrower,Loan Agreement Default or Default of the
Borrower,the Trustee shall invest and reinvest the money it holds as part of the funds and
accounts at the written direction of the Bondholder Representative. Except as described below,
any investment made with money on deposit in a Fund or Account shall be held by or under
control of the Trustee and shall be deemed at all times a part of the Funds and Accounts where
such money was on deposit,and the interest and profits realized from such investment shall be
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40511-124J78 26
credited to such Fund or Account and any loss resulting from such investment shall be charged to
such Fund or Account. In the absence of the receipt of any investment instructions as provided
herein,the Trustee may invest all money under its control in investments described in clause(h)
of the definition of Permitted Investments.
(b) Any investment of money may be made by the Trustee through its or an
affiliate's bond department,investment department or other commercial banking department
providing investment services. The Trustee or any affiliate may receive compensation in
connection with making any investment hereunder.
(c) The Trustee shall have no liability or responsibility for any depreciation of the
value of any investment made in accordance with the provisions of this Section or for any loss
resulting from such investment or redemption, sale or maturity thereof or for the payment of any
early liquidation premium.
(d) Unless otherwise confirmed in writing, an account statement delivered by the
Trustee to the Borrower or the Bondholder Representative, as the case may be,shall be deemed
written confirmation by said party that the investment transactions identified therein accurately
reflect the investment directions given to the Trustee by said party,unless said party notifies the
Trustee in writing to the contrary within thirty(3 0)days of the date of receipt of such statement.
(e) The Issuer(and the Borrower by its execution of the Loan Agreement)
acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable
regulatory entity grant the Issuer or the Borrower the right to receive brokerage confirmations of
security transactions as they occur,the Issuer and the Borrower specifically waive receipt of such
confirmations to the extent permitted by law. The Trustee will furnish to the Issuer,the
Bondholder Representative and the Borrower periodic cash transaction statements that include
detail for all investment transactions made by the Trustee hereunder.
ARTICLE X
REPRESENTATIONS AND COVENANTS
Section 10.1 General Representations. The Issuer makes the following representations as
the basis for the undertakings on its part herein contained:
(a) The Issuer is a political subdivision of the State.
(b) Under the provisions of the Act,the Issuer has the power to consummate the
transactions contemplated by the Bond Documents to which it is a party.
(c) The Issuer has duly authorized the issuance of the Bonds and the execution and
delivery of the Bond Documents to which it is a party and the consummation of the transactions
contemplated therein.
(d) The Issuer has obtained all consents,approvals,authorizations and orders of
governmental authorities that are required by the Act to be obtained by it as a condition to the
issuance of the Bonds and the execution and delivery of the Bond Documents to which it is a
party.
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(e) The execution and delivery by the Issuer of the Bond Documents to which it is a
party and the consummation by the Issuer of the transactions contemplated therein will not,to the
best knowledge of the Issuer, conflict with,be in violation of, or result in a default under any
agreement,instrument, order or judgment to which it is a party.
(f) The Bond Documents to which the Issuer is a party constitute valid and binding
obligations of the Issuer and are enforceable against it in accordance with the terms of such
instruments,except as enforcement thereof may be limited by(i)bankruptcy,insolvency, or other
similar laws affecting the enforcement of creditors'rights and(ii) general principles of equity,
including the exercise of judicial discretion in appropriate cases.
(g) The Issuer has not created or permitted the creation of any mortgage,pledge,
encumbrance or security interest in the Trust Estate,,except as contemplated by the Bond
Documents.
(h) To the best knowledge of the Issuer, there is no action, suit,proceeding, inquiry
or investigation pending before any court or governmental authority,or threatened in writing
against it or its properties,that involves the consummation of the transactions contemplated by, or
the validity or enforceability of,the Bond Documents.
(i) To-the best knowledge of the Issuer,no officer,member,director,trustee,
employee or official of the Issuer has any interest,pecuniary or otherwise,in the transactions
contemplated by the Bonds and the Bond Documents.
Section 10.2 No Encumbrance on Trust Estate. The Issuer will not knowingly create or
permit the creation of any mortgage,pledge,lien, charge or encumbrance of any kind on the Trust Estate
or any part thereof prior to or on a parity with the lien of this Indenture,except as expressly permitted or
contemplated by the Bond Documents.
Section 10.3 Payment of Bond Obligations. Subject to the provisions of Article III of this
Indenture,the Issuer will duly and punctually pay, or cause to be paid,the Bond Obligations,as and when
the same shall become due and will duly and punctually deposit,or cause to be deposited,in the:funds
and accounts created under this Indenture the amounts required to be deposited therein,all in accordance
with the terms of the Bonds and this Indenture.
Section 10.4 Loan Agreement Performance.
(a) The Trustee,on behalf of the Issuer,may perform and observe any agreement or
covenant,all to the end that the Issuer's rights under the Loan Agreement may be unimpaired and
free from default.
(b) The Issuer will promptly notify the Trustee and the Bondholder Representative in
writing of the occurrence of any Loan Agreement Default or the occurrence of any Default under
the Loan Agreement,provided that the Issuer has written notice or otherwise has actual
knowledge of such event.
Section 10.5 Maintenance of Records; Inspection of Records.
(a) The Trustee shall keep and maintain adequate records pertaining to the funds and
accounts established hereunder,including all deposits to and disbursements from said funds and
accounts. Subject to its documentation policies,the Trustee shall retain in its possession all
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certifications and other documents presented to it,all such records and all records of principal,
interest and premium paid on the bonds, subject to the inspection of the Borrower,the Issuer and
the Bondholder Representative Bonds and their representatives at all reasonable times and upon
reasonable prior notice.
(b) The Issuer will at any and all times, upon the reasonable request of the Trustee,
the Borrower or the Bondholder Representative,afford and procure a reasonable opportunity by
their respective representatives to inspect the books,records,reports and other papers of the
Issuer relating to the Project and the Bonds,if any, and to make copies thereof.
Section 10.6 Advances by Trustee. If the Issuer shall fail to perform any of its covenants in
this Indenture(and such failure to perform shall not have been timely cured by the Borrower),the Trustee
may,but shall not be required,at any time and from time to time(after written notice to the Borrower and
the Bondholder Representative if no Loan Agreement Default or Default shall exist under the Loan
Agreement),to make advances to effect performance of any such covenant on behalf of the Issuer. Any
money so advanced by the Trustee,together with interest at the Default Rate, shall be repaid(subject to
the provisions of Article III of this Indenture)upon demand and such advances shall be secured under this
Indenture prior to the Bonds.
Section 10.7 Tax Covenants. The Issuer shall not use or permit the use of any proceeds of
the Bonds or any other funds of the Issuer,directly or indirectly,to acquire any securities or obligations,
and shall not take or permit to be taken any other action or actions,which would cause any Bond to be an
"arbitrage bond"within the meaning of Section 148 of the Code, or which would otherwise affect the
exclusion of interest on the Bonds from gross income of the recipients thereof for federal income tax
purposes.
The Issuer shall at all times do and perform all acts and things permitted by law and necessary or
desirable in order to assure that interest paid by the Issuer on the Bonds shall,for federal income tax
purposes,be excluded from the gross income of the recipients thereof. In furtherance of this covenant,.
the Issuer and the Borrower shall execute and deliver and comply with the Tax Agreement,which is by
this reference incorporated herein and made a part hereof as if set forth herein in full; and by its
acceptance of this Indenture the Trustee acknowledges receipt of the Tax Agreement and acknowledges
its incorporation herein by reference.
Section 10.8 Performance by the Borrower. Without relieving the Issuer from the
responsibility for performance and observance of the agreements and covenants required to be performed
and observed by it hereunder,the Borrower,on behalf of the Issuer, may(but shall not be obligated to)
perform any such agreement or covenant if no Loan Agreement Default or Default under the Loan
Agreement exists.
ARTICLE XI
DEFAULT; REMEDIES
Section 11.1 .Events of Default. Any one or more of the following shall constitute an event of
default(an"Event of Default")under this Indenture(whatever the reason for such event and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment,decree
or order of any court or any order,rule or regulation of any administrative or governmental body):
(a) default in the payment of any interest upon the Bonds after such interest becomes
due and payable; or
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(b) default in the payment of principal of or premium on the Bonds after such Bond
principal or premium becomes due and payable,whether at its stated maturity,by declaration of
acceleration or call for redemption or otherwise;
(c) subject to Section 10.8 hereof, default in the performance or breach of any.
covenant or warranty of the Issuer in this Indenture(other than a covenant or warranty or default
in the performance or breach of which is elsewhere in this Section specifically dealt with),and
continuance of such default or breach for a period of thirty(30)days after there has been given
written notice, as provided in Section 15.1 hereof,to the Issuer and the Borrower by the Trustee
or to the Issuer,the Borrower and the Trustee by the Bondholder Representative,a written notice
specifying such default or breach and requiring it to be remedied and stating that such notice is a
"notice of default"under this Indenture;provided that, so long as the Issuer has commenced to
cure such failure to observe or perform within the thirty(30)day cure period and the subject
matter of the default is not capable of cure within said thirty(30)day period and the Issuer is
diligently pursuing such cure to the Bondholder Representative's satisfaction(notice of
Bondholder Representative's satisfaction to be provided to Trustee in writing),in their sole
discretion,then the Issuer shall have an additional period of time as reasonably necessary(not to
exceed thirty(30)days unless extended in writing by the Bondholder Representative)within
which to cure such default; or
(d) if the Issuer shall have applied for or consented to the appointment of a receiver,
trustee,or liquidator of all or a substantial part of its assets; admitted in writing the inability to
pay its debts as they mature;made a general assignment for the benefit of creditors;been the
subject of an order for relief under the Bankruptcy Code,or been adjudicated a bankrupt,or filed
a petition or an answer seeking reorganization,liquidation or any arrangement with creditors or
taken advantage of any insolvency law,or submitted an answer admitting the material allegations
of a petition in bankruptcy,reorganization,liquidation or insolvency proceedings;or an order,
judgment or decree shall have been entered,without the application,approval or consent of the
Issuer,by any court of competent jurisdiction approving a petition seeking reorganization of the
Issuer or appointing a receiver,trustee or liquidator of a substantial part of its assets and such
order,judgment or decree shall continue unstayed and in effect for any period of sixty(60)
consecutive days;or filed a voluntary petition in bankruptcy or failed to remove an involuntary
petition in bankruptcy filed against it within sixty(60)days of the filing thereof;provided that no
such event shall be treated as an Event of Default hereunder unless the Bondholder
Representative has directed the Trustee,in writing(with a copy to the Issuer),to treat such event
as an Event of Default.
Section 11.2 Acceleration of Maturity; Rescission and Annulment.
(a) Subject to the provisions of Section 11.12 of this Indenture,upon the occurrence
of an Event of Default under Section 11.1 hereof,then and in every such case(other than with
respect to a payment default caused by a default under the Hedge Agreement),the Trustee may
(but only with the consent of the Bondholder Representative)and,at the written request of the
Bondholder Representative,shall declare the principal of all the Bonds and the interest accrued
thereon to be immediately due and payable,by notice to the Issuer and the Borrower and upon
any such declaration,all principal of and Prepayment Premium,if any,and interest on the Bonds
shall become immediately due and payable.
(b) At any time after such a declaration of acceleration has been made pursuant to
subsection(a)of this Section,the Bondholder Representative may,by written notice to the Issuer
and the Trustee,rescind and annul such declaration and its consequences if:
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(i) there has been deposited with the Trustee a sum sufficient to pay(1) all
overdue installments of interest on the Bonds, (2)the principal of and redemption
premium on the Bonds that has become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed therefor in the Bonds, (3)
to the extent that payment of such interest is lawful, interest upon overdue installments of
interest at the rate or rates prescribed therefor in the Bonds,and(4)all sums paid or
advanced by the Trustee hereunder and the reasonable compensation,expenses,
disbursements and advances of the Trustee,its agents and counsel; and
(ii) all Events of Default,other than the non-payment of the principal of the
Bonds which have become due solely by such declaration of acceleration,have been
cured or have been waived in writing as provided in Section 11.11.
No such rescission and annulment shall affect any subsequent default or impair any right
consequent thereon.
Section 11.3 Additional Remedies; Bondholder Representative Enforcement.
(a) Upon the occurrence of an Event of Default,the Trustee may, subject to
subsection(c)of this Section 11.3 and Section 11.12,,proceed to protect and enforce its rights and
the rights of the Bondholders by mandamus or other suit,action or proceeding at law or in equity,
including,but not limited to,an action to enforce its rights under the Hedge Agreement or any
Cap Agreement, an action for specific performance of any agreement herein contained,or a
foreclosure, deed in lieu of foreclosure or other similar conversion of the Mortgage without
declaring the principal and interest on the Bonds to be due and payable.
No remedy conferred by this Indenture upon or remedy reserved to the Trustee or to the
Bondholders is intended to be exclusive of any other remedy,but each such remedy shall be
cumulative and shall be in addition to any other remedy given to the Trustee or to the
Bondholders hereunder or now or hereafter existing at law or in equity or by statute.
(b) Upon the occurrence and continuation of any Event of Default,the Bondholder
Representative may proceed forthwith to protect and enforce its rights and the rights of the
Bondholders pursuant to the Bonds and this Indenture by such suits,actions or proceedings as the
Bondholder Representative,in its sole discretion, shall deem expedient.
(c) Notwithstanding anything to the contrary contained in this Indenture,the Trustee
shall not exercise any of its rights or remedies under this Article XI or otherwise hereunder or
under any of the other Bond Documents as a result of the occurrence of an Event of Default
hereunder unless and until instructed in writing by the Bondholder Representative to do so. The
Trustee shall in such event exercise such rights and remedies as so instructed by the Bondholder
Representative;provided that the Bondholder Representative shall have offered to the Trustee,in
writing,indemnity reasonably satisfactory to the Trustee against the costs and expenses to be
incurred by the Trustee in compliance with any such instructions;provided,that nothing
contained in this subparagraph(c)shall be construed to require such security or indemnity for the
performance by the Trustee of its obligations under Article VIII and Section 11.2 hereof.
Section 11.4 Application of Money Collected. (a)Any money collected by the Trustee
pursuant to this Article and any other sums then held by the Trustee as part of the Trust Estate,shall be
applied in the following order,at the date or dates fixed by the Trustee and,in case of the distribution of
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40511-124J78 31
such money on account of the Bond Obligations,upon presentation of the Bonds and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:
(i) First: To the payment of all amounts due to the Trustee hereunder in
connection with actions taken pursuant to this Article;
(ii) Second: To the payment of the whole amount of the Bond Obligations
then due and unpaid in respect of which or for the benefit of which such money has been
collected,with interest(to the extent that such interest has been collected by the Trustee
or a sum sufficient therefor has been so collected and payment thereof is legally
enforceable at the respective rate or rates prescribed therefor in the Bonds)on overdue
principal of, and Prepayment Premium and overdue installments of interest on the Bonds
at the Default Rate; and in case such proceeds shall be insufficient to pay in full the
whole amount so due and unpaid upon the Bonds,then to the payment of such Bond
Obligations without any preference or priority,ratably according to the aggregate amount
so due;provided,however,that the Bond Obligations shall be applied in such order of
priority as may be prescribed by the Bondholder Representative in its sole and absolute
discretion;
(iii) Third: To the payment of any and all other amounts due under the Bond
Documents including,without limitation,any amounts due to the Issuer,the Trustee,the
Bondholder Representative,and the Rebate Analyst; and
(iv) Fourth: The payment of the remainder,if any,to the Borrower or to
.W
whosoever may be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
Section 11.5 Remedies Vested in Trustee and Bondholder Representative. All rights of
action and claims under this Indenture or the Bonds may be prosecuted and enforced by the Trustee or the
Bondholder Representative without the possession of the Bonds or the production thereof in any
proceeding relating thereto. Subject to the rights of the Bondholder Representative to direct proceedings
hereunder,any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an
express trust. Any recovery of judgment shall,after provision for the payment of the reasonable
compensation,expenses,disbursements and advances of the Trustee,,its agents and counsel,be for the
benefit of the Bondholders in respect of whom such judgment has been recovered.
Section 11.6 Limitation on Suits;Rights of Bondholders.
(a) Subject to the provisions of Section 11.12 of this Indenture,no Bondholder other
than the Bondholder Representative shall have any right to institute any proceeding,judicial or
otherwise,under or with respect to this Indenture, or for the appointment of a receiver or trustee
or for any other remedy hereunder,unless:
(i) such Bondholder previously has given written notice to the Trustee of a
continuing Event of Default;
(ii) such Bondholder shall have made request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee hereunder;
and
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40511-124 J78 32
(iii) such Bondholder(either alone or together with other Bondholders)has
offered to the Trustee in writing reasonable indemnity against the costs,expenses and
liabilities to be incurred in compliance with such request; and the Trustee has thereafter
failed or refused to exercise remedies hereunder.
(b) The Bondholder Representative shall have the right,during the continuance of an
Event of Default to:
(i) subject to Section 12.4(d),require the Trustee to proceed to enforce this
Indenture and the Bond Documents, either by judicial proceedings for the enforcement of
the payment of the Bonds or otherwise,and
(ii) to direct in writing the time,method and place of conducting any
proceeding for any remedy available to the Trustee,or exercising any trust or power
conferred upon the Trustee hereunder,provided that(A) such direction shall not be in
conflict with any rule of law or this Indenture, and(B)the Bondholders shall have offered
in writing to the Trustee reasonable indemnity against the costs,expenses and liabilities
to be incurred by the Trustee in compliance with such request.
Section 11.7 Unconditional Right of Bondholders to Receive Principal,Premium and
Interest. Notwithstanding any other provision in this Indenture,other than those set forth in Article III
hereof,to the contrary,the Bondholders shall have the right which is absolute and unconditional to
receive payment of the Bond Obligations when due and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the written consent of all of the Bondholders.
Section 11.8 Restoration of Positions. If the Trustee,the Bondholder Representative or any
of the Bondholders shall have instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding shall have been discontinued or abandoned for any reason or shall have
been determined adversely to the Trustee or to the Bondholders,then and in every such case the Issuer,
the Trustee,the Borrower,the Bondholder Representative and the Bondholders shall,subject to any
determination in such proceeding,be restored to their former positions hereunder,and thereafter all rights
and remedies of the Issuer,the Trustee,the Borrower,the Bondholder Representative and the
Bondholders shall continue as though no such proceeding had been instituted.
Section 11.9 Rights and Remedies Cumulative. No right or remedy herein conferred upon
or reserved to the Trustee or to the Bondholders is intended to be exclusive of any other right or remedy,
and every right and remedy shall,to the extent permitted by law,be cumulative and in addition to every
other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder,or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 11.10 Delay or Omission.Not Waiver. No delay or omission of the Trustee or of the
Bondholders to exercise any right or remedy accruing upon an Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every
right and remedy given by this Article or by law to the Trustee or to the Bondholders may be exercised
from time to time,and as often as may be deemed expedient,by the Trustee or by the Bondholders, as the
case may be. No waiver of any default or Event of Default,whether by the Trustee pursuant to
Section 11.11 or by the Bondholders, shall extend to or shall affect any subsequent default or Event of
Default hereunder or shall impair any rights or remedies consequent thereon.
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40511-124J78 33
Section 11.11 waiver of Past Defaults. Before any judgment or decree for payment of money
due has been obtained by the Trustee,the Bondholder Representative(or,in the event of a monetary
default,all of the Holders of the Bonds)may, subject to Section 11.6,by written notice to the Trustee,the
Issuer and the Borrower,waive any past default hereunder or under the Loan Agreement and its
consequences except for default in obligations due the Issuer pursuant to or under the Unassigned Issuer's
Rights. Upon any such waiver, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this Indenture and the Loan
Agreement;but no such waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
Section 11.12 Remedies Under Loan Agreement or Note. Subject to the limitation of this
Section,the Trustee shall have the right,in its own name or on behalf of the Issuer,to declare any default
and exercise any remedies under the Loan Agreement or the Note,whether or not the Bonds have been
accelerated or declared due and payable by reason of an Event of Default of the Borrower. Any money
collected by the Trustee pursuant to the exercise of any remedies under the Loan Agreement or the Note
shall be applied as provided in Section 11.4 of this Indenture.
Subject to the limitations of the last paragraph of Section 11.16 of this Indenture,if an Event of
Default has occurred and is continuing, the Trustee,at the direction of the Bondholder Representative,
shall have the right to enforce the Bond Documents and pursue the rights and remedies thereunder
whether or not the Bonds have been accelerated or declared due and payable.
Notwithstanding anything to the contrary contained in this Indenture,the Trustee shall not
exercise any of its rights or remedies under the Loan Agreement,the Note or any of the other Bond
Documents as a result of the occurrence of a Loan Agreement Default or an Event of Default under
the Mortgage or any default or event of default under any of the other Bond Documents and the
expiration of the applicable grace period or notice and cure period,if any,specified therein,unless
and until instructed to do so in writing by the Bondholder Representative. The Trustee shall in
such event exercise such rights and remedies as so instructed by the Bondholder Representative;
provided that the Bondholder Representative shall have offered to the Trustee in writing indemnity
reasonably satisfactory to the Trustee against the costs,expenses and liabilities to be incurred by
the Trustee in compliance with any such instructions.
Section 11.13 Waiver of Appraisement and Other Laws.
(a) To the extent permitted by law,the Issuer will not at any time insist upon,plead,
claim or take the benefit or advantage of,any appraisement,valuation, stay,extension or
redemption law now or hereafter in force,in order to prevent or hinder the enforcement of this
Indenture; and the Issuer,for itself and all who may claim under it,so far as it or they now or
hereafter may lawfully do so,hereby waives the benefit of all such laws. The Issuer,for itself
and all who may claim under it,waives,to the extent that it may lawfully do so,all right to have
the Project in the Trust Estate marshaled upon any enforcement hereof.
(b) If any law in this Section referred to and now in force,of which the Issuer or its
successor or successors might take advantage despite this Section,shall hereafter be repealed or
cease to be in force, such law shall not thereafter be deemed to constitute any part of the contract
herein contained or to preclude the application of this Section.
Section 11.14 Suits to Protect the Trust Estate. Subject to the provisions of Section 11.12
hereof,the Trustee shall have power to institute and to maintain such proceedings as it may deem
expedient to prevent any impairment of the Trust Estate by any acts that may be unlawful or in violation
DOCSSF1:671616.4
40511-124J78 34
of this Indenture and to protect its interests and the interests of the Bondholders in the Trust Estate and in
the rents,issues,profits,revenues and other income arising therefrom, including power to institute and
maintain proceedings to restrain the enforcement of or compliance with any governmental enactment,rule
or order that may be unconstitutional or otherwise invalid,if the enforcement of or compliance with such
enactment,rule or order would impair the security hereunder or be prejudicial to the interests of the
Bondholders or the Trustee. The Trustee shall provide written notice to the Bondholder Representative of
the institution of any such proceedings.
Section 11.15 Remedies Subject to Applicable Law. All rights,remedies and powers
provided by this Article may be exercised only to the extent that the exercise thereof does not violate any
applicable provision of law in the premises, and all the provisions of this Article are intended to be
subject to all applicable mandatory provisions of law which may be controlling in the premises and to be
limited to the extent necessary so that they will not render this Indenture invalid,unenforceable or not
entitled to be recorded,registered or filed under the provisions of any applicable law.
Section 11.16 Assumption of Obligations. In the event that the Trustee,the Bondholders,the
Bondholder Representative or their respective assignee or designee shall become the legal or beneficial
owner of the Project by foreclosure or deed in lieu of foreclosure and the Bonds remain Outstanding, such
party shall execute and deliver to the Issuer and the Trustee(i)a new loan agreement,note and mortgage
and an instrument in writing assuming and agreeing to perform the obligations of the Borrower under the
Regulatory Agreement and any other Bond Documents to which the Borrower is a party,as required
therein,or(ii)an assumption agreement or agreements whereby such party shall assume and agree to
perform the obligations of the Borrower under each of the documents relating to the Bonds or the Loan to
which the Borrower is a party. Such assumption shall be effective from and after the effective date of
such acquisition and shall be made with the benefit of the limitations of liability set forth therein and
without any liability for the prior acts of the Borrower.
It is the intention of the parties hereto that upon the occurrence and continuance of an Event of
Default hereunder,rights and remedies may be pursued pursuant to the terms of the Bond Documents.
Notwithstanding the occurrence and continuance of an Event of Default, it is understood that the Trustee
shall pursue no remedies against the Borrower or the Project if the Borrower is not in default under any of
the Bond Documents to which the Borrower is a party or under any other documents that the Borrower
has executed in connection with the Bonds. An Event of Default hereunder shall not, in and of itself,
constitute an event of default under any document relating to the Bonds to which the Borrower is a party.
ARTICLE
THE TRUSTEE
Section 12.1 Appointment of Trustee; Acceptance. Wells Fargo Bank,National Association
has been appointed as Trustee hereunder. The Trustee has signified its acceptance of the trusts,duties
and obligations imposed upon it by this Indenture by executing this Indenture. The Trustee hereby
accepts the assignment by the Issuer of the Issuer's rights in and'to the Loan Agreement(other than the
Issuer's Unassigned Rights)and the Note. The Trustee hereby accepts the assignment by the Issuer of the
Issuer's rights in and to the Loan Agreement(other than the Issuer's Unassigned Rights) and the Note,
and is hereby directed to accept any Note delivered by the Borrower in accordance with the Permanent
Loan Funding Agreement.
Section 12.2 Certain Duties and Responsibilities of Trustee.
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40511-124 J78 35
(a) Except during the continuance of an Event of Default,the Trustee undertakes to
perform such duties and only such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture against the Trustee; and
(b) If an Event of Default exists,the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and subject to Section 12.2(c)(iii)hereof,use the same
degree of care and skill in their exercise,as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(c) No provision of this Indenture shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure to act, or its own willful
misconduct,both as finally adjudicated by a court of law, except that
(i) this subsection shall not be construed to limit the effect of subsection(a)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment made in good
faith, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Trustee shall not be liable with respect to any action taken or omitted
to be taken by it in accordance with the direction of the Bondholder Representative
relating to the time,method and place of conducting any proceeding for any remedy
available to the Trustee,or exercising any trust or power conferred upon the Trustee,
under this Indenture; and
(iv) no provision of this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers,if it shall have
reasonable grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(d) whether or not therein expressly so provided,every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
(e) The Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein,upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;but in the case of any such
certificates or opinions which by any provision hereof are specifically required to be furnished to
the Trustee,the Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture(but not otherwise to analyze their form or
substance),provided,where such certificates require the consent of another Person other than the
Person furnishing such certificate,the Trustee may conclusively rely that such consent has been
received without any investigation or inquiry on the part of the Trustee.
(f) The permissive rights of the Trustee to do things enumerated in this Indenture
shall not be construed as a duty.
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40511-124J78 36
(g) The rights of the Trustee and limitations of liability enumerated herein and in
Section 12.4 shall extend to actions taken or omitted in its role as assignee of the Issuer under the
Loan Agreement.
Section 12.3 Notice of Defaults. Upon the occurrence of any Event of Default hereunder and
provided that a Responsible Officer of the Trustee is aware of or has been made aware of the existence of
such Event of Default, immediately with respect to the Bondholder Representative and within thirty(3 0)
days with respect to any other Bondholder,the Trustee shall transmit by mail to the Bondholders as their
names and addresses appear in the Bond Register,notice of such Event of Default hereunder known to the
Trustee pursuant to Section 12.3 hereof,unless such Event of Default shall have been cured or waived.
Section 12.4 Certain Rights of Trustee. Except as otherwise provided in Section 12.1
hereof:
(a) subject to Section 12.2(b)hereof,the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,certificate,statement,instrument,opinion,
report,notice,request,direction,consent,order,bond,debenture, coupon or other paper or
document believed by it to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Issuer mentioned herein shall be sufficiently
evidenced by a certificate or order executed by an Authorized Issuer Representative;
(c) whenever in the administration of this Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or omitting any action
hereunder,the Trustee(unless other evidence be herein specifically prescribed)may,in the
absence of bad faith on its part,rely upon a Written Certificate of the Issuer or the Borrower,as
appropriate;
(d) the Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of the Bondholder Representative
pursuant to this Indenture,unless the Bondholder Representative shall have offered to the Trustee
in writing security or indemnity satisfactory to the Trustee against the costs,expenses and
liabilities which might be incurred by it in compliance with such request or direction,provided,
that nothing contained in this subparagraph(d)shall be construed to require such security or
indemnity for the performance by the Trustee of its obligations under Article VIII and
Section 11.2 hereof;
(e) the Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution,certificate,statement,instrument,opinion,report,notice,request,
direction,consent,order,bond, debenture,coupon or other paper or document but the Trustee,in
its discretion,may make such further inquiry or investigation into such facts or matters as it may
see fit,and,if the Trustee shall determine to make such further *inquiry or investigation,it shall be
entitled to examine the books and records of the Issuer,if any, and of the Borrower,in either case
personally or by agent or attorney;
(f) the Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys and pay reasonable
compensation thereto and the Trustee shall not be responsible for any misconduct or negligence
on the part of any agent or attorney appointed with due care by it hereunder. The Trustee may act
upon the advise of counsel of its choice concerning all matters of the trusts hereof and the Trustee
DOCSSF1:671616.4 37
40511-124J78
shall not be responsible for any loss or damage resulting from any action or inaction taken in
reliance upon said advice; and
(g) the Trustee shall not be required to take notice or be deemed to have notice of
any Event of Default hereunder except for Events of Default specified in subsections(a),or(b)of
Section 11.1 hereof, and for the deposit of funds required to be deposited into or the Rebate Fund,
unless a Responsible Officer of the Trustee shall be specifically notified in writing of such Event
of Default by the Issuer,the Bondholder Representative or by any Bondholder,and all notices or
other instruments required by this Indenture to be delivered to the Trustee,must,in order to be
effective,be delivered in writing to a Responsible Officer in the Corporate Trust Department of
the Trustee at the Office of the Trustee, and in the absence of such written notice so delivered the
Trustee may conclusively assume there is no Event of Default as aforesaid.
Section 12.5 Not Responsible for Recitals. The recitals contained herein and in the Bonds,
except the certificate of authentication on the Bonds, shall be taken as the statements of the Issuer, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the
value or condition of the Trust Estate or any part thereof, or as to the title of the Issuer thereto or as to the
security afforded thereby or hereby, or as to the validity or sufficiency of this Indenture or of the Bonds.
Section 12.6 May Hold Bonds. The Trustee in its individual or any other capacity may
become the owner or pledgee of the Bonds and may otherwise deal with the Issuer and the Borrower with
the same rights it would have if it were not Trustee.
Section 12.7 Money Held in Trust. Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee shall be under no liability
for interest on any money received by it hereunder except as otherwise provided in Article IX hereof.
Section 12.8 Compensation and Reimbursement.
(a) Under the Loan Agreement and to the extent provided therein,the Borrower has
agreed to
(i) pay to the Trustee from time to time, as provided in this Indenture or the
Loan Agreement,reasonable compensation for all services(including its ordinary and
extraordinary services)rendered by the Trustee hereunder;
(ii) except as otherwise expressly provided herein,reimburse the Trustee as
provided in this Indenture or the Loan Agreement,upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in accordance
with any provision of this Indenture(including the reasonable compensation and the
expenses and disbursements of its agents and counsel),except any such expense,
disbursement or advance as may be attributable to the Trustee's negligence or willful
misconduct,both as finally adjudicated by a court of law; and
(iii) indemnify the Trustee against losses suffered by it as Trustee under this
Indenture, except with respect to losses attributable to the Trustee's negligence or willful
misconduct.
(b) The Issuer has no obligation to pay the Trustee for services rendered except from
moneys on deposit In the Expense Fund.
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40511-124J78 38
Whenever the Trustee incurs expenses or renders services in connection with any bankruptcy or
insolvency proceeding, such expenses (including the fees and expenses of its counsel) and the
compensation for such services are intended to constitute expenses of administration under any
bankruptcy or insolvency law or laws relating to creditors'rights generally.
Section 12.9 Trustee Required;Eligibility. Any successor Trustee shall at all times be a
trust company,a state banking corporation or a national banking association with the authority to accept
trusts in the State and either(a)have a combined capital and surplus of at least$50,000,000 as set forth in
its most recent published annual report of condition,(b)be a wholly-owned subsidiary of a bank holding
company,or a wholly-owned subsidiary of a company that is a wholly-owned subsidiary of a bank
holding company,having a combined capital surplus of at least$50,000,000 as set forth in its most recent
published annual report of condition,have at least$500,000,000 of trust assets under management and
have a combined capital surplus of at least$2,000,000 as set forth in its most recent published annual
report of condition, or(c)is otherwise acceptable to the Bondholder Representative in its sole and
absolute discretion.
Section 12.10 Resignation and Removal;Appointment of Successor.
(a) No resignation or removal of the Trustee hereunder and no appointment of a
successor Trustee pursuant to this Article shall become effective until the written acceptance by
the successor Trustee of such appointment.
(b) The Trustee may resign at any time by giving 30 days' written notice thereof to
the Issuer,the Borrower and the Bondholder Representative. If an instrument of acceptance by a
successor Trustee shall not have been delivered to the Trustee within thirty(30)days after the
giving of such notice of resignation,the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by the Issuer or the Bondholder
Representative by written notice delivered to the Trustee,the Issuer or the Bondholder
Representative,as appropriate,and the Borrower.
(d) If the Trustee shall resign,be removed or become incapable of acting,or if a
vacancy shall occur in the office of the Trustee for any cause,the Issuer shall promptly appoint a
successor Trustee. In case all or substantially all of the Trust Estate shall be in the possession of a
receiver or trustee lawfully appointed, such receiver or trustee may similarly appoint a successor
to fill such vacancy until a new Trustee shall be so appointed by the Issuer. If,within 60 days
after such resignation,removal or incapability or the occurrence of such vacancy,the Issuer has
failed to so appoint a successor Trustee,then a successor Trustee shall be appointed by the
Bondholder Representative with notice thereof delivered to the Issuer,the Borrower and the
retiring Trustee,and the successor Trustee so appointed shall, forthwith upon its acceptance of
such appointment,become the successor Trustee and supersede the successor Trustee appointed
by such receiver or trustee. If no successor Trustee shall have been appointed by the Issuer or the
Bondholder Representative and accepted appointment in the manner hereinafter provided,any
Bondholder may petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(e) The Issuer shall cause written notice of each resignation and each removal of the
Trustee and each appointment of a successor Trustee to be mailed by first-class mail,postage
prepaid,to the Bondholders as their names and addresses appear in the Bond Register. Each
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40511-124J78 39
notice shall include the name of the successor Trustee and the address of the Office of the
successor Trustee and shall also be mailed to the Office of the Trustee.
Section 12.11 Acceptance of Appointment by Successor.
(a) Every successor Trustee appointed hereunder shall execute,acknowledge and
deliver to the Issuer and to the retiring Trustee an instrument accepting such appointment,and
thereupon the resignation or removal of the retiring Trustee shall become effective and such
successor Trustee,without any further act, deed or conveyance, shall become vested with all the
estates,properties,rights,powers,trusts and duties of the retn*M* g Trustee;notwithstanding the
foregoing,on request of the Issuer or the successor Trustee, such retiring Trustee shall,upon
payment of its charges,execute and deliver an*instrument conveying and transferring to such
successor Trustee upon the trusts herein expressed all the estates,properties,rights,powers and
trusts of the retiring Trustee, and shall duly assign,transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder. Upon request of any such
y
the Issuer shall execute any and all instruments for more fully and certainly
successor Trustee, F
vesting in and confirming to such successor Trustee all such estates,properties,fights,powers
and trusts.
A
(b) No successor Trustee rustee shall accept its appointment unless at the time of such
acceptance such successor Trustee shall be qualified and eligible under this Article,to the extent
operative.
Section 12.12 Merger,Conversion,Consolidation or Succession to Business. Any
corporation into which the Trustee may be merged or convened or with which it may be consolidated, or
any corporation resulting from any merger,conversion or consolidation to which the Trustee shall be a
party,or any corporation succeeding to all or substantially all of the corporate trust business of the
Trustee,shall be the successor of the Trustee hereunder,provided such corporation shall be otherwise
qualified and eligible under this Article,to the extent operative,without the execution or filing of any
paper or any further act on the part of any of the parties hereto. In case the Bonds shall have been
authenticated,but not delivered,by the Trustee then in office,any successor by merger,conversion or
consolidation to such authenticating Trustee may adopt such authentication and deliver the Bonds so
authenticated with the same effect as if such successor Trustee had itself authenticated the Bonds.
Section 12.13 Requirements for Bondholder Consent and Instruction to the Trustee.
Subject to the provisions of Sections 13.2 and 13.8 hereof requiring the consent or approval of all
Bondholders with respect to certain changes set forth in items(a)-(f)of Sections 13.2 and 13.8 to any
supplement or amendment to this Indenture,the Loan Agreement,the Note or to any of the other Bond
Documents,the following provisions shall govern and control with respect to any consents,
determinations,elections,approvals,waivers,acceptances, satisfactions or expression of opinion of or the
taking of any discretionary act or the giving of any instructions or the taking of actions by the Bondholder
Representative or the Bondholders hereunder or under any of the other Bond Documents.
(a) The Issuer and the Trustee acknowledge that concurrently with the issuance of
the Bonds,the Bond Purchaser has designated Newman&Associates,A Division of GMAC
Commercial Holding Capital Markets Corp.,as the Bondholder Representative. The Majority of
Holders may designate a successor Bondholder Representative in a certificate substantially in the
form attached hereto as Exhibit B and delivered to the Trustee. The Bondholder Representative
shall have the authority to bind the Bondholders for all purposes hereunder and under each of the
other Bond Documents,including,without limitation,for purposes of exercising the rights of the
Bondholder Representative under Section 15.5 hereof. The Trustee shall be entitled to rely upon
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the acts of any such Bondholder Representative as binding upon the Bondholder Representative
and the Bondholders.
(b) Until the Trustee receives written notice signed by the Bondholder
Representative that a new Bondholder Representative has been appointed by a Majority of
Holders,the Bondholder Representative shall continue to act in such capacity and the Trustee
shall continue to rely on the actions of such Bondholder Representative for all purposes hereunder
and under each of the Bond Documents.
Section 12.14 Appointment of Co-Trustee. It is the purpose of this Indenture that there shall
be no violation of any laws of any jurisdiction(including particularly the laws of the State)denying or
restricting the right of banking corporations or associations to transact business as trustee in such
jurisdiction. It is recognized that in case of litigation under this Indenture,the Loan Agreement or the
Regulatory Agreement,and in particular in case of the enforcement of either on default, or in case the
Trustee deems that by reason of any present or future law of any jurisdiction it may not exercise any of
the powers,rights or remedies herein granted to the Trustee or hold title to the properties, in trust,as
herein provided,or take any other action which may be desirable or necessary in connection therewith,it
may be necessary that the Trustee appoint an additional individual or institution as a separate or co-
trustee. The following provisions of this Section are adopted to these ends.
The Trustee is hereby authorized to appoint an additional individual or institution as a separate or
co-trustee hereunder,upon written notice to the Issuer and with the consent of the Bondholder
Representative, if any,but without the necessity of further authorization or consent,in which event each
and every remedy,power,right,claim,demand,cause of action, immunity,estate,,title, interest and lien
expressed or intended by this Indenture,the Regulatory Agreement or the Loan Agreement to be
exercised by or vested in or conveyed to the Trustee with respect thereto shall be exercisable by and vest
in such separate or co-trustee but only to the extent necessary to exercise such powers,rights and
remedies,and every covenant and obligation necessary to the exercise thereof by such separate or co-
trustee shall run to and be enforceable by either of them.
Should any instrument in writing from the Issuer be required by the separate trustee or co-trustee
appointed by the Trustee for more fully and certainly vesting in and confirming to him or it such
properties,rights,powers,trusts, duties and obligations, any and all such instruments in writing shall, on
request of the Trustee,be executed, acknowledged and delivered by the Issuer. In case any separate
trustee or co-Trustee, or a successor to either, shall die,become incapable of acting,resign or be removed,
all the estates,properties,rights,powers,trusts, duties and obligations of such separate trustee or co-
trustee, so far as permitted by law, shall vest in and be exercised by the Trustee until the appointment of a
successor to such separate trustee or co-trustee.
Section 12.15 Loan Servicing. The Issuer and the Trustee acknowledge that the Bond
Purchaser has appointed the Servicer to service and administer the Loan as set forth in the Servicing
Agreement. The Issuer and the Trustee shall not be responsible for monitoring the performance of the
Servicer or for any acts or omissions of the Servicer. The Bondholder Representative may,in its sole
discretion,terminate or replace the Servicer.
Section 12.16 Requests from Rating Agency. If the Bonds are at any time rated by a Rating
Agency,the Trustee shall promptly,during such time,respond in writing,or in such other manner as may
be reasonably requested,to requests from the Rating Agency for information deemed necessary by the
Rating Agency in order to maintain the rating assigned thereby to the Bonds. The Trustee shall promptly
furnish any such requested information in its possession to the Rating Agency and shall,as may be
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reasonably requested by the Rating Agency,assist in efforts to obtain any necessary information from the
Issuer,the Borrower,the Bondholder Representative or the Servicer,as applicable.
ARTICLE I
SUPPLEMENTAL INDENTURES;AMENDMENT OF
LOAN AGREEMENT AND BOND DOCUMENTS
Section 13.1 Supplemental Trust Indentures without Bondholders Consent. The Issuer
and the Trustee from time to time may enter into a Supplemental Indenture,without the consent of any
Bondholders,but with the consent of the Bondholder Representative and with the consent of the
Borrower,to the extent such supplemental indenture materially affects the rights,duties,obligations or
other interests of the Borrower, as are necessary or desirable for the following reasons; provided that no
Borrower consent shall be required if the Borrower is in default under the Bond Documents or the
documents relating to the Loan,unless such Supplemental Indenture will (i)extend the term of or the
aggregate amount owing with respect to the Bonds,or(ii)cause the redemption(other than a purchase in
lieu of redemption),extinguishment or other cancellation of the Bonds, except if foreclosure proceedings
have been initiated against the Borrower,in which case the Borrower's consent shall not be required,as
are necessary or desirable to
(a) cure any ambiguity or formal defect or omission or correct or supplement any
provision herein that may be inconsistent with any other provision herein;
(b) grant to or confer upon the Trustee for the benefit of the Bondholders any
additional rights,remedies,powers, authority or security that may lawfully be granted to or
conferred upon the Bondholders or the Trustee;
(c) amend any of the provisions of this Indenture to the extent required to maintain
the exclusion from gross income of interest on the Bonds for federal income tax purposes;
(d) add to the covenants and agreements of the Issuer in this Indenture other
covenants and agreements thereafter to be observed by the Issuer or to surrender any right or
power herein reserved to or conferred upon the Issuer;
(e) make any change herein that is required by any Rating Agency in order to obtain
a rating by such Rating Agency on the Bonds;
(f) amend, alter,modify or supplement this Indenture in a manner necessary or
desirable in connection with either the use or maintenance of the Book-Entry System for the
Bonds, or the issuance of certificated Bonds following the termination of the Book-Entry System
for the Bonds; or
(g) make any other change,which is not materially adverse to the interests of the
Bondholders.
The Trustee will provide the Borrower with at least ten Business Days written notice of any
Proposed Supplemental Indenture. Immediately after the execution of any Supplemental Indenture for
any of the purposes of this Section,the Trustee shall cause a notice of the proposed execution of such
Supplemental Indenture to be mailed,postage prepaid,to the Bondholders. Such notice shall briefly set
forth the nature of the proposed Supplemental Indenture and shall state that copies thereof are on file at
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the designated office of the Trustee for inspection by Bondholders. A failure on the part of the Trustee to
mail the notice required by this Section shall not affect the validity of such Supplemental Indenture.
Section 13.2 Supplemental Trust Indentures with Bondholders' Consent. Except as
otherwise provided in Section 13.1 hereof, subject to the terms and provisions contained in this Section
and Section 13.3 hereof,the Bondholder Representative shall have the right, anything contained in this
Indenture to the contrary notwithstanding,to consent to and approve the execution by the Issuer and the
Trustee, of each Supplemental Indenture as shall be deemed necessary or desirable by the Issuer,the
Borrower or the Bondholder Representative, for the purpose of modifying, altering, amending,adding to
or rescinding,in any particular, any of the terms or provisions contained in this Indenture or in any
Supplemental Indenture;provided,however,that nothing herein contained shall permit,or be construed as
permitting,without the consent of the Bondholders of all of the Bonds affected by such Supplemental
Indenture, (a)an extension in the payment of any Bond Obligation with respect to any Bond issued
hereunder, or(b)a reduction in any Bond Obligation payable under or with respect to any Bond, or the
rate of interest on any Bond,or(c)the creation of a lien upon or pledge of the money or other assets
pledged to the payment of the Bonds hereunder,or the release of any such assets from the lien of this
Indenture, or(d)a preference or priority of any Bond or Bonds over any other Bond or Bonds,or(e)a
reduction in the aggregate principal amount of the Bonds required for consent to such supplemental trust
indenture or to any amendment, change or modification to the Bond Documents as provided in this
Article XIII,or(f)an extension or reduction in the payment of any other amount payable on or in
connection with any Bond issued hereunder. Nothing herein contained,however, shall be construed as
making necessary the approval of Bondholders(other than the Bondholder Representative)of the
execution of any supplemental trust indenture authorized in Section 13.1 hereof.
If at any time the Issuer or the Borrower shall request the Trustee to enter into a Supplemental
Indenture for any of the purposes of this Section,the Trustee shall,at the expense of the Borrower,cause
notice of the proposed execution of such supplemental trust indenture to be mailed,postage prepaid,to
the Bondholders. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture
and shall state that copies thereof are on file at the designated office of the Trustee for inspection by
Bondholders. The Trustee shall not,however,be subject to any liability to any Bondholders by reason of
its failure to mail the notice required by this Section 13.2,and any such failure shall not affect the validity
of such Supplemental Indenture when consented to and approved as provided in this Section.
Whenever,at any time within one year after the date of mailing of such notice,the Issuer delivers
to the Trustee an instrument or instruments in writing purporting to be executed by the Bondholder
Representative,which instrument or instruments shall refer to the proposed supplemental trust indenture
described in such notice and shall specifically consent to and approve the execution thereof in
substantially the form of the copy thereof referred to in such notice,thereupon but not otherwise,the
Trustee may, subject to the provisions of the first paragraph of this Section 13.2,execute such
Supplemental Indenture in substantially such form.
Subject to the provisions of the first paragraph of this Section 13.2,if,at the time of the execution
of such supplemental trust indenture,the Bondholder Representative shall have consented to and
approved the execution thereof as herein provided,no Bondholder shall have any right to object to the
execution of such supplemental trust indenture,or to object to any of the terms and provisions contained
therein or the operation thereof,or in any manner to question the propriety of the execution thereof,or to
enjoin or restrain the Trustee or the Issuer from executing the same or from taking any action pursuant to
the provisions thereof.
Section 13.3 Supplemental Indentures Part of Indenture. Any Supplemental Indenture
executed in accordance with the provisions of this Article shall thereafter form a part of this Indenture,
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and all of the terms and conditions contained in any such Supplemental Indenture as to any provision
authorized to be contained therein shall be and shall be deemed to be part of the terms and conditions of
this Indenture for any and all purposes. This Indenture shall be, and be deemed to be modified and
amended in accordance therewith, and the respective rights,duties and obligations under this Indenture of
the Issuer,the Trustee and Bondholders shall thereafter be determined, exercised and enforced hereunder,
subject in all respects to such modifications and amendments. Express reference to any Supplemental
Indenture may be made in the text of any Bonds authenticated after the execution of such supplemental
trust indenture,if deemed necessary or desirable by the Trustee.
Section 13.4 Discretion of Trustee to Execute Supplemental Indenture. Except in the case
of a direction from the Bondholder Representative,the Trustee shall not be under any responsibility or
liability to the Issuer or to any Bondholder or to anyone whomsoever for its refusal in good faith to enter
into any Supplemental Indenture if such Supplemental Indenture is deemed by it to be contrary to the
provisions of this Article or if the Trustee has received a written opinion of counsel that such
Supplemental Indenture is contrary to law or materially adverse to the rights of the Bondholders.
Section 13.5 Consents and Opinions. Subject to Section 13.1,any Supplemental Indenture
entered into under this Article XIII shall not become effective unless and until the Borrower and the
Bondholder Representative shall have approved the same in writing,each in its sole discretion.
No Supplemental Indenture shall be effective until the Issuer,the Borrower,the Trustee, and the
Bondholder Representative shall have received an Opinion of Bond Counsel. The Trustee and the Issuer
shall be entitled to receive,at the expense of the Borrower or,if such amendment is requested by the
Bondholder Representative,at the expense of the Bondholder Representative, an Opinion of Counsel to
the effect that any such proposed Supplemental Indenture is authorized and complies with the provisions
of this Indenture.
Section 13.6 Notation of Modification on Bonds; Preparation of New Bonds. Bonds
authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions
of this Article may bear a notation, in form approved by the Trustee and the Issuer,as to any matter
provided for in such supplemental indenture, and if such supplemental indenture shall so provide,new
Bonds, so modified as to conform,in the opinion of the Trustee and the Issuer,to any modification of this
Indenture contained in any such Supplemental Indenture,may be prepared by the Issuer,at the expense of
the Borrower or,if such amendment is requested by the Bondholder Representative,at the expense of the
Bondholder Representative,authenticated by the Trustee and delivered without cost to the Bondholders of
the Bonds then Outstanding,upon surrender for cancellation of such Bonds in equal aggregate principal
amounts .
Section 13.7 Amendments to Loan Agreement and Bond Documents Not Requiring
Consent of Bondholders. The Issuer shall not consent to any amendment,change or modification of the
Loan Agreement or any other Bond Document(other than the Indenture)without the prior written consent
of the Bondholder Representative. The Issuer and the Trustee may,without the consent of or notice to the
Bondholders,but only with the consent of the Bondholder Representative,consent to any amendment,
change or modification of any of the above-mentioned documents as are necessary or desirable to:
(a) cure any ambiguity or formal defect or omission,correct or supplement any
provision therein;
(b) grant to or confer upon the Trustee for the benefit of the Bondholders any
additional rights,remedies,powers,authority or security that may lawfully be granted to or
conferred upon the Bondholders or the Trustee;
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40511-124J78 44
(e) amend any of the provisions therein to the extent required to maintain the
exclusion from gross income of interest on the Bonds for federal income tax purposes;
(d) add to the covenants and agreements of the Issuer therein other covenants and
agreements thereafter to be observed by the Issuer or to surrender any right or power therein
reserved to or conferred upon the Issuer;
(e) make any change that is required by any Rating Agency in order to obtain or
maintain a rating by such Rating Agency on the Bonds;
(f) amend,alter,modify or supplement such document in a manner required in
connection with either the use or maintenance of the Book Entry System for the Bonds, or the
issuance of certificated Bonds following the termination of the Book Entry System for the Bonds;
or
(g) make any other change,which is not materially adverse to the interests of the
Bondholders of the Bonds.
Section 13.8 Amendments to Loan Agreement and Bond Documents Requiring Consent
of Bondholders. Except for the amendments, changes or modifications corresponding to those provided
in Section 13.7 hereof,neither the Issuer nor the Trustee shall consent to any other amendment, change or
modification of the Loan Agreement or Bond Documents(other than the Indenture)without the consent
of the Bondholder Representative;provided,however,that nothing herein shall permit or be construed as
permitting,without the consent of the Bondholders of all of the Bonds, (a)an extension of the time of
payment of any amounts payable under the Note,the Loan Agreement or the Bonds, or(b)a reduction in
the amount of any payment to be made with respect to the Note,the Loan Agreement, or the Bonds,or
the rate of Interest on the Note or any Bond,or(c)the creation of a lien upon or pledge of the money or
other assets pledged to the payment of the Note,Loan Agreement or the Bonds hereunder, or the release
of any such assets from the lien of this Indenture, or(d)a preference or priority of any Bond or Bonds
over any other Bond or Bonds,or(e)a reduction in the aggregate principal amount of the Bonds required
for consent to any such amendment,change or modification as provided herein,.or(f) an extension or
reduction in the payment of any other amount payable on or in connection with the Note,the Loan
Agreement or any Bond issued hereunder. If at any time the Issuer or the Borrower requests consent to
any such proposed amendment, change or modification of any of such documents,other than an
amendment,change,or modification permitted by Section 13.7 hereof,the Trustee shall, at the expense of
the Borrower,cause notice of such proposed amendment,change or modification to be mailed,postage
prepaid,to Bondholders. Such notice shall briefly set forth the nature of such proposed amendment,
change or modification and shall state that copies of the amendment to such document embodying the
same are on file at the designated office of the Trustee for inspection by Bondholders. The Trustee shall
not,however,be subject to any liability to any Bondholders by reason of its failure to mail the notice
required by this Section,and any such failure shall not affect the validity of such supplement or
amendment to such document when consented to and approved as provided in this Section.
Whenever,at any time within one year after the date of mailing such notice,the Issuer delivers to
the Trustee an instrument or instruments in writing purporting to be executed by the Bondholder
Representative,which instrument or instruments shall refer to the proposed amendment or supplement to
the document described in such notice and shall specifically consent to and approve the execution thereof
in substantially the form of the copy thereof referred to in such notice, thereupon but not otherwise,the
Issuer may execute such amendment in substantially the form on file as provided above,without liability
or responsibility to any Bondholder of any Bond,whether or not such Bondholder has consented thereto.
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40511-124J78 45
Section 13.9 Consents and Opinions. Subject to Section 13.1,any amendment,change or
modification otherwise permitted under this Article XIII shall not become effective unless and until the
Borrower and the Bondholder Representative shall have approved the same in writing,each in its sole
discretion.
The Trustee shall not be under any responsibility or liability to the Issuer or to any Bondholder or
to anyone whomsoever for its refusal in good faith to enter into any supplement or amendment as
provided in this Section if such supplement or amendment is deemed by it to be contrary to the provisions
of this Article or if the Trustee has received a written opinion of counsel that such supplement or
amendment is contrary to law;provided,however,unless such amendment or supplement is contrary to
law,the Trustee shall enter into any such amendment or supplement at the written direction of the
Bondholder Representative.
No such supplement or amendment shall be effective until the Issuer and the Trustee shall have
received an Opinion of Counsel to the effect that any such proposed supplement or amendment complies
with the provisions of this Indenture, and any other opinion that may be required by the Bondholder
Representative.
ARTICLE MV
DEFEASANCE
Section 14.1 Satisfaction and Discharge of Indenture. Whenever all Bond Obligations have
been fully paid and the Bonds are no longer Outstanding,and all fees,costs and expenses due and payable
hereunder and under the Loan Agreement have been paid in full,then(a)this Indenture and the lien,
rights and interests created hereby shall cease,determine and become null and void(except as to any
surviving rights of transfer or exchange of the Bonds herein or therein provided for)and(b)at the
expense of the Borrower,the Trustee shall execute and deliver a termination statement and such
instruments of satisfaction and discharge as may be necessary and pay,assign,transfer and deliver to the
Borrower or upon the order of the Borrower,all cash and securities then held by it hereunder as a part of
the Trust Estate.
Section 14.2 Trust for Payment of Debt Service.
(a) The Issuer may on any date after the second anniversary of the Closing Date
provide for the payment of any of the Bonds by establishing an escrow for such purpose with the
Trustee and depositing therein cash and/or Government Obligations which(assuming the due and
punctual payment of the principal of and interest on such Government Obligations,but without
reinvestment)will provide funds sufficient to pay the Bond principal,premium,if any, and
interest on the Bonds as the same become due and payable until the maturity or redemption of the
Bonds;provided,however,that
(i) such Government Obligations must not be subject to redemption prior to
their respective maturities at the option of the issuer of such Government Obligations,
(ii) if the Bonds are to be redeemed prior to their maturity,either(i)the
Trustee shall receive evidence that irrevocable written notice of such redemption has
been given in accordance with the provisions of this Indenture and the Bonds or(ii)the
Issuer shall confer on the Trustee irrevocable written authority for the giving of such
notice on behalf of the Issuer,
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40511-124 J78 46
(iii) prior to the establishment of such escrow the Issuer,the Trustee and the
Bondholder Representative must receive(1)an Opinion of Counsel stating in effect that
upon the occurrence of an Act of Bankruptcy,money and investments in such trust will
not be recoverable from the Trustee or the Bondholders under provisions of the
Bankruptcy Code relating to voidable preferences and(2) an Opinion of Bond Counsel,
and
(iv) prior to the establishment of such escrow,the Trustee must receive a
report by an Independent certified public accountant stating in effect that the principal
and interest payments on the Government Obligations in such escrow,without
reinvestment,together with the cash initially deposited therein;will be sufficient to make
the required payments from such trust.
(b) Cash and/or Government Obligations deposited with the Trustee pursuant to this
Section shall not be a part of the Trust Estate but shall constitute a separate,irrevocable trust fund
for the benefit of the Bondholders to be paid from such fund. Such cash and the principal and
interest payable on such Government Obligations shall be applied by the Trustee solely to the
payment of Bond principal,premium, if any, and interest on the Bonds.
ARTICLE XV
MISCELLANEOUS
Section 15.1 Notices.
(a) All notices,demands,requests and other communications required or permitted
to be given by any provision of this Indenture shall be in writing and sent by first class,regular,
registered or certified mail,commercial delivery service,overnight courier,telegraph,telex,
telecopier or facsimile transmission, air or other courier,or hand delivery to the party to be
notified addressed as follows:
If to the Issuer: County of Contra Costa
651 Pine Street,4th Floor,North Wing
Martinez,CA 94553
Attention: Deputy Director-Redevelopment
FAX: (925) 335-1265
If to the Trustee: Wells Fargo Bank,National Association
707 Wilshire Boulevard, 17th Floor
Los Angeles,CA 90017
Attention: Corporate Trust
FAX: (213)614-3325
If to the Borrower: Steadfast[Hidden Cove],L.P.
20320 S.W.Birch Street, Suite 300
Newport Beach,CA 92660-1725
Attention: Rod Emery
FAX: (949) 852-0143
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40511-124J78 47
If to the Bondholder
Representative: Newman&Associates
A Division of GMAC Commercial Holding Capital Markets Corp.
1801 California Street, Suite 3700
Denver,CO 80202
Attention: Jim Hahn
FAX: (303)296-3280
If to the Servicer: GMAC Commercial Mortgage Corporation
200 Witmer Road
Horsham,PA 19044
Attention: Servicing SVP
FAX: (215)328-3478
with a copy to its General Counsel at the same address
Any such notice, demand,request or communication shall be deemed to have been given and
received for all purposes under this Indenture: (i)three (3)Business Days after the same is deposited in
any official depository or receptacle of the United States Postal Service first class, or, if applicable,
certified mail,return receipt requested,postage prepaid; (ii)on the date of transmission when delivered by
telecopier or facsimile transmission(confirmed by telephone),provided any telecopy or other electronic
transmission received by any party after 4:00 p.m.,local time,as evidenced by the time shown on such
transmission, shall be deemed to have been received the following Business Day;(iii)on the next
Business Day after the same is deposited with a nationally recognized overnight delivery service that
guarantees overnight delivery; and(iv)on the date of actual delivery to such party by any other means;
provided,however, if the day such notice, demand,request or communication shall be deemed to have
been given and received as aforesaid is not a Business Day, such notice, demand,request or
communication shall be deemed to have been given and received on the next Business Day.
Any party to this Indenture may change such party's address for the purpose of notice, demands,
requests and communications required or permitted under this Indenture by providing written notice of
such change of address to all of the parties by written notice as provided herein.
(b) Where this Indenture provides for giving of notice to the Trustee, such notice
shall also be given to the Bondholder Representative. Failure to provide any such duplicate
notice pursuant to the foregoing sentence, or any defect in any such duplicate notice so provided,
shall not be treated as a failure to give the primary notice or affect the validity thereof or the
effectiveness of any action taken pursuant thereto.
Section 15.2 Notice to Bondholders;Waiver.
(a) Where this Indenture provides for giving of notice to the Bondholders of any
event, such notice must(unless otherwise herein expressly provided)be in writing and mailed,
first-class postage prepaid,to the Bondholders,at the addresses of the Bondholders as they appear
In the Bond Register,not later than the latest date, and not earlier than the earliest date,prescribed
for the giving of such notice.
(b) Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the person entitled to receive such notice,either before or after the event,
and such waiver shall be the equivalent of such notice. Waivers of notice by Bondholders shall
be filed with the Trustee,but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
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40511-124j78 48
Section 15.3 Successors and Assigns. All covenants and agreements in this Indenture by the
Issuer shall bind its successors and assigns,whether so expressed or not.
Section 15.4 Benefits of Indenture. Nothing in this Indenture or in the Bonds,expressed or
implied, shall give to any person, other than the parties hereto and their successors hereunder,the
Bondholders or the Borrower,any benefit or any legal or equitable right,remedy or claim under this
Indenture.
Section 15.5 Bondholder Representative;Trustee's and Servicer's Consents.
(a) GMAC CHC is hereby appointed as the initial Bondholder Representative. As
the initial Bondholder Representative,GMAC CHC shall have the right to assign all its rights,
duties and obligations as Bondholder Representative to any third-party guarantor of the Bonds or
of any Securities issued pursuant to a Secondary Market Transaction. In the event,that GMAC
CHC assigns its rights as Bondholder Representative, it shall provide written notice of such
assignment to the Trustee and the Borrower.
(b) The Bondholder Representative may provide written notice to the Trustee
designating particular individuals authorized to execute any consent,waiver,approval,direction
or other instrument on behalf of the Bondholder Representative and such notice may be amended
or rescinded at any time. The Bondholder Representative may be removed and a successor
appointed by a written notice given by a Majority of Holders to the Trustee and the Borrower,
substantially in the form of Exhibit B hereto. The removal and reappointment shall be effective
immediately upon receipt of such notice by the Trustee. A Majority of Holders may appoint any
Person to act as Bondholder Representative,including,without limitation,the Servicer.
(c) In the event that for any reason,no Bondholder Representative shall then be
appointed,all references to Bondholder Representative herein and in the Bond Documents shall
be deemed to refer to a Majority of Holders.
(d) Whenever pursuant to this Indenture or any other Bond Document,the
Bondholder Representative exercises any right given to it to approve or disapprove,or any
arrangement or term is to be satisfactory to Bondholder Representative,the decision of the
Bondholder Representative to approve or disapprove or to decide whether arrangements or terms
are satisfactory or not satisfactory shall (except as is otherwise specifically herein or therein
provided)be in the sole discretion of Bondholder Representative and shall be final and
conclusive.
Whenever this Indenture or the Bond Documents require the consent,determination, election,
approval,waiver,acceptance,, satisfaction or expression of opinion of,or the taking of any discretionary
act by,the Trustee or the Servicer(all of the foregoing being referred to as"Consent"in this
Section 15.5),(i)the right,power,privilege and option of the Trustee to withhold or grant its Consent
shall be deemed to be the right,power,privilege and option of the Bondholder Representative to withhold
or grant such Consent, and the Trustee shall have no responsibility for any action or inaction with respect
thereto,except as may be otherwise set forth in this Indenture, and(ii)the right,power,privilege and
options of the Servicer to withhold or grant its Consent may, in the Bondholder Representative's
discretion with respect to any individual Consent,be deemed to be the right,power,privilege and option
of the Bondholder Representative to withhold or grant such Consent and,in such event,the Servicer shall
have no responsibility for any action or inaction with respect thereto,except as may be otherwise set forth
in this Indenture.
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AO
40511-124 J78 r.OF
Section 15.6 Proof of.Execution of Writings and Ownership. Any instrument provided in
this Indenture to be signed or executed by the Registered Owners of all or any portion of the Bonds may
be in any number of writings of similar tenor and may be signed or executed by such Registered Owners
in person or by their duly authorized representatives. Proof of the execution of any such instrument, or of
the writing appointing any such agent, or of the ownership of any Bonds,shall be sufficient for any of the
purposes of this Indenture and shall be conclusive in favor of the Issuer and the Trustee with respect to
any actions taken by either under such instruments if:
(a) the fact and date of the execution by any person of any such instrument is proved
by(i)a certificate of any officer of any jurisdiction who by law has power to take
acknowledgments of deeds within such jurisdiction,to the effect that the person signing such.
instrument acknowledged before him the execution thereof,or(ii)an affidavit of a witness of
such execution; and
(b) the ownership of any Bonds is proved by the registration books kept by the Bond
Registrar.
Section 15.7 Legal Holidays. In any case in which the date of payment of any Bond
Obligation or the date on which any other act is to be performed pursuant to this Indenture shall be a day
that is not a Business Day,then payment of such Bond Obligation or such.act need not be made on such
date but may be made on the succeeding Business Day,and such later payment or such act shall have the
same force and effect as if made on the date of payment or the date fixed for redemption or the date fixed
for such act, and no additional interest shall accrue for the period after such date and prior to the date of
payment.
Section 15.8 Governing Lay. This Indenture shall be governed by and shall be enforceable
in accordance with the laws of the State.
Section 15.9 Severability. If any provision of this Indenture shall be invalid,illegal or
unenforceable,the validity,legality and enforceability of the remaining portions shall not in any way be
affected or impaired. In case any covenant, stipulation, obligation or agreement contained in the Bonds or
in this Indenture shall for any reason be held to be usurious or in violation of law,then such covenant,
stipulation,obligation or agreement shall be deemed to be the covenant, stipulation,obligation or
agreement of the Issuer or the Trustee only to the full extent permitted by law.
Section 15.10 Execution in Several Counterparts. This Indenture may be contemporaneously
executed in several counterparts,all of which shall constitute one and the same instrument and each of
which shall be,and shall be deemed to be,an original.
Section 15.11 Nonrecourse Obligation of the Borrower. Except as otherwise provided in the
Loan Agreement,the obligations of the Borrower under this Indenture are without recourse to the
Borrower's partners,and the provisions of Section 11.1 of the Loan Agreement are by this reference
incorporated herein.
DOCSSF1:671616.4
40511-124J78 50
IN WITNESS WHEREOF,the Issuer and the Trustee have caused this Indenture to be duly
executed as of the date first Written above.
COUNTY OF CONTRA COSTA
By.
Deputy Director-Redevelopment
WELLS FARGO BANK,NATIONAL
ASSOCIATION,as Trustee
By.
Authorized Officer
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DOCSSF1:671616.4
dnS11_124178
EXHIBIT A
FORM OF BOND
THIS BOND MAY ONLY BY TRANSFERRED UPON RECEIPT BY THE
TRUSTEE OF AN INVESTOR LETTER (IN SUBSTANTIALLY THE FORM
ATTACHED TO THE INDENTURE DEFINED HEREIN) EXECUTED BY AN
ELIGIBLE TRANSFERREE,TO THE EXTENT REQUIRED BY THE INDENTURE.
COUNTY OF CONTRA COSTA
MULTIFAMILY HOUSING REVENUE BOND
(HIDDEN COVE PROJECT)2003 SERIES A
No.R- $
Dated Date Mat 4ji�y-Date CUSIP No.
REGISTERED OWNER:
PRINCIPAL AMOUNT:DOLLARS
The COUNTY OF CONTRA COSTA(the"Issuer"),a political subdivision of the State of
California duly organized and validly existing under the laws of the State ,for value received,hereby
promises to pay(but only out of the revenues and other assets hereinafter referred to)to the registered
owner specified above or registered assigns(subject to any right of prior redemption or tender),on the
Maturity Date specified above,the Principal Amount specified above,and to pay interest thereon,at the
Bond Coupon Rate(as defined in the Indenture),payable on the first Business Day of each month,
commencing ) 20_,to the person whose name appears on the registration books as of the day
preceding any Bond Payment Date(a"Record Date")and to pay any other amounts as specified in the
Indenture (hereinafter defined).Principal of,and premium,if any,on this Bond are payable in such coin
or currency of the United States as at time of payment is legal tender for payment of private and public
debts,at the designated payment office of Wells Fargo Bank,National Association,a national banking
association duly organized and validly existing under the laws of the United States of America,as trustee
and registrar(the"Trustee"and"Registrar"),or its successor. Interest on this Bond shall be computed on
the basis of a 360-day year comprised of twelve 30-day months;provided that at any time the Bonds bear
interest at a rate greater than the Fixed Bond Coupon Rate, such interest shall be computed on the basis of
the Average Daily Interest Cost for such month times 30 days. Interest on this Bond shall be payable in
lawful money of the United States of America by check drawn upon the Trustee and mailed by first class
mail,postage prepaid,on the Bond Payment Date to the persons in whose names the Bonds are registered
on the Bond Register at the close of business on the Record Date,except that if a Bondholder holds
Bonds in the aggregate principal amount of at least$1,000,000,any payment of interest due to such
Bondholder shall be made by wire transfer of federal reserve funds to any account in the United States of
America designated by such Bondholder if such Bondholder, at its expense,(a)so directs by written
notice delivered to the Trustee at least ten(10)Business Days before the date upon which such wire
transfer or other arrangement is to be made'and(b)otherwise complies with the reasonable requirements
of the Trustee.
This Bond is one of an issue of duly authorized County of Contra Costa Multifamily Housing
Revenue Bonds(Hidden Cove Apartments Project),2003 Series in the aggregate principal amount
of$ (the"Bonds"),issued pursuant to the provisions of Chapter 7 of Part 1 of Division 5 of
DOCSSF1:671616.4
40511-124J78 A-1
the California Health and Safety Code, as amended. The proceeds from the Bonds are to be used for the
purpose of making a mortgage loan(the"Loan")to Steadfast Hidden Cove, L.P., a California limited
partnership(the"Borrower"),pursuant to a Loan Agreement dated as of April 1,2003 (the"Loan
Agreement")between the Issuer and the Borrower,to finance the acquisition,rehabilitation and equipping
of a multifamily residential project in the County of Contra Costa(the"Project"). The Bonds are issued
under and are equally and ratably secured by a Trust Indenture,dated as of April 1,2003 (the
"Indenture"),between the Issuer and the Trustee,pursuant to which the Trustee will act as payee for the
Borrower's promissory note in the principal amount of$ (the"Note"). The Note will be
secured by the Mortgage.
Reference is hereby made to the Indenture and to all amendments and supplements thereto for a
description of the property pledged and assigned to the Trustee and of the provisions, among others,with
respect to the nature and extent of the security,the rights, duties and obligations of the Issuer and the
Trustee,the terms on which the Bonds are issued and secured,the manner in which interest is computed
on this Bond after the initial Rate Period,mandatory and optional tender rights and provisions,mandatory
and optional redemption rights and tender provisions, acceleration,the rights of the owners of the Bonds
and the provisions for defeasance of such rights. Capitalized terms not otherwise defined herein shall
have the meanings assigned in the Loan Agreement.
THE BONDS AND THE INTEREST THEREON ARE LIMITED OBLIGATIONS OF THE
ISSUER,PAYABLE SOLELY FROM THE REVENUES AND THE TRUST ESTATE,WHICH ARE
SPECIFICALLY ASSIGNED AND PLEDGED TO SUCH PURPOSES IN THE MANNER AND TO
THE EXTENT PROVIDED IN THE INDENTURE. NEITHER THE STATE OF CALIFORNIA,NOR
ANY POLITICAL SUBDIVISION THEREOF(EXCEPT THE ISSUER,TO THE LIMITED EXTENT
SET FORTH IN THE INDENTURE)WELL IN ANY EVENT BE LIABLE FOR THE PAYMENT OF
THE PRINCIPAL OF,PREMIUM(IF ANY)OR INTEREST ON THE BONDS OR FOR THE
PERFORMANCE OF ANY PLEDGE,OBLIGATION OR AGREEMENT OF ANY KIND
WHATSOEVER OF THE ISSUER,AND NONE OF THE BONDS OR ANY OF THE ISSUER'S
AGREEMENTS OR OBLIGATIONS WILL BE CONSTRUED TO CONSTITUTE AN
INDEBTEDNESS OF OR A PLEDGE OF THE FAITH AND CREDIT OF OR A LOAN OF THE
CREDIT OF THE ISSUER OR ANY OF ITS PROGRAM PARTICIPANTS,THE STATE OR ANY
POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR
STATUTORY PROVISION WHATSOEVER.
This Bond is subject to optional and mandatory redemption,including sinking fund redemption,
under the terms and as provided in the Indenture. This Bonds is also subject to tender for purchase and
remarketing under the conditions set forth in the Indenture.
The registered owner of this Bond shall have no right to enforce the provisions of the Indenture or
to institute action to enforce the covenants therein,or to take any action with respect to any event of
default thereunder,or to institute,appear in or defend any suit or other proceeding with respect thereto,
except as provided in the Indenture.
By its purchase of this Bond,the registered owner hereof agrees to the appointment of the
Servicer and the Bondholder Representative as provided in the Indenture and authorizes the
Bondholder Representative to exercise such rights and remedies afforded to the Bondholder
Representative on behalf of the Bondholder as provided in the Bond Documents.
Modifications or alterations of the Indenture or of any indenture supplemental thereto may be
made only to the extent and in the circumstances permitted by the Indenture.
DOCSSF1:671616.4
40511-124J78 A-2
This Bond may be exchanged, and its transfer may be effected, only by the registered owner
hereof in person or by his attorney duly authorized in writing at the designated corporate trust office of
the Trustee,but only in the manner and subject to the limitations provided in the Indenture,including,
without limitation,the delivery of an Investor Letter to the extent required under the Indenture. Upon
exchange or registration of such transfer a new registered bond or bonds of the same maturity and interest
rate and of Authorized Denomination or Denominations for the same aggregate principal amount will be
issued in exchange therefor.
The Issuer and the Trustee may deem and treat the person in whose name this Bond shall be
registered on the bond register, as the absolute owner hereof for the purpose of receiving payment of or
on account of principal hereof and interest due hereon and for all other purposes and neither the Issuer nor
the Trustee shall be affected by any notice to the contrary.
All acts,conditions and things required by the laws of the State to exist,happen and be performed
precedent to and in the execution and delivery of the Indenture and the issuance of this Bond do exist,
have happened and have been performed in due time, form and manner as required by law.
Neither the directors,members,officers, agents,employees or representatives of the Issuer nor
any person executing this Bond shall be personally liable hereon or be subject to any personal liability by
reason of the issuance hereof,whether by virtue of any constitution, statute or rule of law,or by the
enforcement of any assessment or penalty, or otherwise,all such liability being expressly released and
waived as a condition of and in consideration for the execution of the Indenture and the issuance of this
Bond.
This Bond shall not be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose until the Registrar shall have executed the Certificate of Authentication appearing hereon.
IT IS HEREBY CERTIFIED,RECITED AND REPRESENTED that the issuance of this Bond is
duly authorized by law;that all acts, conditions and things required to exist and to be done precedent to
and in the issuance of this Bond to render the same lawful and valid have been properly done and
performed and have happened in regular and due time,form and manner as required by law; and that all
acts, conditions and things necessary to be done or performed by the Issuer or to have happened precedent
to or in the execution and delivery of the Indenture have been done and performed and have happened in
regular and due form as required by law.
DOCSSF1:671616.4
40511-124 J78 A-3
IN WITNESS WHEREOF,the Issuer has caused this Bond to be executed in its name by the
manual or facsimile signature of the Chair of the Board of Supervisors and attested by the manual or
facsimile signature of the Clerk of the Board of Supervisors all as of the Dated Date hereof.
COUNTY OF CONTRA COSTA
By
Chair of the Board of Supervisors
Attest:
Clerk of the Board of Supervisors
CERTIFICATE OF AUTHENTICATION
This is to certify that this Bond is one of the Bonds referred to in the within mentioned Indenture.
Date of Authentication::
Wells Fargo Bank,National Association,as Trustee
By
Authorized Officer
DOCSSF1:671616.4
40511-124 J78 A-4
ASSIGNMENT FOR TRANSFER
FOR VALUE RECEIVED, the undersigned,hereby sells,assigns and transfers unto
(Tax Identification or Social Security
No. )the within bond and all rights thereunder, and hereby irrevocably
constitutes and appoints attorney to transfer the within bond on
the books kept for registration thereof,with full power or substitution in the premises.
Date:
Signature
Signature Guaranteed:
NOTICE: Signature(s)must be guaranteed by a NOTICE: The signature to this assignment
signature guarantor institution that is a par- must correspond with the name of the registered
ticipant in a nationally recognized signature owner of the within bond as it appears on the
guarantor program. face hereof in every particular,without
alteration or enlargement or any change
whatever, and the Social Security number or
federal employer identification must be
supplied.
DOCSSF1:671616.4
40511-124J78 A-5
EXHIBIT B
FORM OF NOTICE OF APPOINTMENT OF
BONDHOLDER REPRESENTATIVE
Wells Fargo Bank,National Association, as Trustee
[Trustee's Address]
Steadfast Hidden Cove,L.P.
[Borrower's Address]
Re: County of Contra Costa
Multifamily Housing Revenue Bonds
(Hidden Cove Apartments Project)
2003 Series A
Ladies and Gentlemen:
The undersigned are a Majority of Holders of the above-referenced Bonds(the"Bonds'), as such
term is defined in the Loan Agreement dated as of April 1,2003 (the"Loan Agreement"),between the
County of Contra Costa(the"Issuer")and Steadfast Hidden Cove,L.P.. Pursuant to Section 15.5 of the
Trust Indenture dated as of April 1,2003 (the"Indenture")between the Issuer and Wells Fargo Bank,
National Association,as Trustee,you are hereby notified that,effectively immediately upon receipt of
this notice by the Trustee,the Bondholder Representative(as defined in the Loan Agreement)appointed
under Section 15.5 of the Indenture shall be . [The person
or entity previously appointed as Bondholder Representative shall upon the effectiveness of this notice no
longer have any further rights or obligations as Bondholder Representative.]
The following individual or individuals shall have authority to execute any consent,waiver,
approval,direction or other instrument on behalf of the Bondholder Representative and the signature(s)
set forth next to his/her(their)name(s)is(are)his/her(their)true and correct signature(s).
NAME SIGNATURE
Additional *individuals may be given such authority by written notice to you from the Bondholder
Representative or from a Majority of Holders.
DOCSSF1:671616.4
40511-124J78 B-1
This notice is dated as of the day of
BONDHOLDER(S)
By
This instrument was acknowledged before me in the City of State of
this day of 9 ,by who is of
a on behalf of said
Notary Public,Commonwealth/State of
[State]
My commission expires:
DOCSSF1:671616.4
40511-124 J78 B-2
EXHIBIT C
FORM OF REQUISITION
Disbursement Request
The undersigned hereby requests from Wells Fargo Bank,National Association,as trustee
("Lender")the disbursement of moneys from the Project Fund established pursuant to the Trust Indenture,
dated as of April 1,2003 (the"Indenture"),by and between Lender and the County of Contra Costa
("Issuer"), in the following amount(the"Disbursement Request")to pay for repairs to the multifamily
apartment project identified therein.
The undersigned hereby represents and warrants to Lender and Servicer that the following
information and certifications provided in connection with this Disbursement Request are true and correct
as of the date hereof:
1. Purpose for which disbursement is requested?
2. To whom shall the disbursement be made (payee may be the undersigned in the case of
reimbursement for advances and payments made or cost incurred for work done by the
undersigned)?
3. Estimated costs of completing the uncompleted repairs as of the date of this Disbursement
Request.
4. The undersigned certifies that:
(a) the disbursement requested pursuant to this Disbursement Request will be used solely to
pay a cost or costs allowable under the Repair Agreement;
(b) none of the items for which disbursement is requested pursuant to this Disbursement
Request has formed the basis for any disbursement previously made from the Project
Fund;
(c) all labor and materials for which disbursements have been requested have been
incorporated into the Improvements or suitably stored upon the Property in accordance
with reasonable and standard building practices,the Repair Agreement and all applicable
laws,ordinances,rules and regulations of any governmental authority having jurisdiction
over the Property;
(d) the materials, supplies and equipment furnished or installed for the Repairs are not
subject to any lien or security interest or that the funds to be disbursed pursuant to this
Disbursement Request are to be used to satisfy any such lien or security interest;
(e) such requisition contains no items representing payment on account of any percentage
entitled to be retained at the date of the certificate;
DOCSSF1:671616.4
40511-124J78 C-1
(f) the obligation stated on the requisition has been incurred in or about the acquisition,
construction or equipping of the Project,each item is a proper charge against the Project
Fund;
(g) such requisition contains no items representing any Costs of Issuance or any other
amount constituting an issuance cost under Section 147(g)of the Code;provided,
however,that such costs may be included if the requisition is accompanied by an Opinion
of Bond Counsel;
(h) not less than 97%(95%with an opinion of Bond Counsel)of the sum of: (A)the amounts
requisitioned by this requisition;plus(B)all amounts previously requisitioned and
disbursed from the Project Fund,have been or will be applied by the Borrower to pay
Qualified Project Costs in the amount required by the Tax Agreement;
(i) as of the date hereof no event or condition has happened or is happening or exists that
constitutes,or that with notice or lapse of time or both,would constitute, an Event of
Default under the Loan Documents.
5. The undersigned has provided you with this requisition an endorsement to the mortgagee title
insurance policy delivered to the Trustee at closing increasing the affirmative mechanics and
materialmen's lien coverage to an amount equal to the aggregate amount paid out of the Project
Fund including the amount to be paid under the requisitions then being submitted,together with
any lien waivers or reports with respect to title to the Project required for the issuance of such
endorsement. The foregoing requirement may be satisfied by delivery to the Bond Trustee at
closing a mortgagee title insurance policy that provides coverage in an amount equal to the Loan
amount.
6. All capitalized terms used in this Disbursement Request without definition shall have the
meanings ascribed to them in the Loan Agreement dated as of April 1,2003 by and between
Borrower and Issuer.
DOCSSF1:671616.4
40511-124 J78 C-2
This Requisition for disbursements from the Project Fund is executed
STEADFAST HIDDEN COVE, L.P.
By
Authorized Borrower Representative
APPROVED AND CONSENTED TO AT
THE DIRECTION OF THE
BONDHOLDER REPRESENTATIVE BY:
as Servicer
By
Authorized Signatory
DOCSSF1:671616.4
40511-124J78 C-3
EXHIBIT D
FORM OF INVESTOR LETTER
County of Contra Costa
Martinez,California
Wells Fargo Bank,National Association, as Trustee
Los Angeles, California
Re: County of Contra Costa Multifamily Housing Revenue Bonds
(Hidden Cove Apartments Project)2003 Series A
Ladies and Gentlemen:
The undersigned(the"Investor")hereby acknowledges receipt of the above-referenced bonds
(the"Bonds"),dated[DATE],in fully registered form and in the outstanding principal amount of
$[PRINCIPAL AMOUNT]. The Bonds have been checked, inspected and approved by the Investor.
The undersigned acknowledges that the Bonds were issued for the purpose of making a loan to
assist in the financing of the acquisition,rehabilitation and development of a multifamily rental housing
development located in the County of Contra Costa(the"Project")and that the loan is evidence by that
certain Loan Agreement dated as of April 1,2002(the"Loan Agreement"),by and between the County of
Contra Costa(the"Issuer")and Steadfast Hidden Cove,L.P.,a California limited partnership(the
"Borrower"). The undersigned further acknowledges that the Bonds are secured by a Trust Indenture
dated as of April 1,2003 (the "Indenture")between the Issuer and Wells Fargo Bank,National
Association,as trustee,which creates a security interest in the Trust Estate(as defined in the Indenture)
for the benefit of the owners of the Bonds.
In connection with the acquisition of the Bonds by the Investor,the Investor hereby makes the
following representations upon which you may rely:
1. The Investor has authority to acquire the Bonds and to execute this Investor Letter and
any other instruments and documents required to be executed by the Investor in connection with the
acquisition of the Bonds.
2. The Investor is [an"accredited investor"as defined under Regulation D promulgated
under the Securities Act of 1933 (the"Act")or a"qualified institutional buyer"as defined under Rule
144A promulgated under the Act.'][the trustee of a trust(a"Purchaser Trustee")that issues: (A)
investment grade securities that are(i)registered pursuant to an effective registration statement under the
Securities Act of 1933 (the"Act")or(ii)are sold in a transaction that is exempt from the registration
requirements of the Act and(B)non-investment grade securities sold in transactions that are exempt from
the registration requirements of the Act and are sold only to"qualified institutional buyers"as defined
under Rule 144A promulgated under the Act or"accredited investors"as defined under Regulation D
promulgated under the Act.2]
3. The Investor understands that the Bonds are not registered under the Act and that such
registration is not legally required as of the date hereof; and further understands that the Bonds(a)are not
'Bracketed text to be omitted if the Bonds are acquired by a Purchaser Trustee.
2 Bracketed text to be omitted if the Bonds are acquired by an entity other than a Purchaser Trustee.
DOCSSF1:671616.4
40511-124J78 D-1
being registered or otherwise qualified for sale under the"Blue Sky"laws and regulations of any state,(b)
will not be listed in any stock or other securities exchange, (c)will not carry a rating from any rating
agency and(d)will be delivered in a form which may not be readily marketable.
4. The Investor understands that(a)the Bonds are not secured by any pledge of any moneys
received or to be received from taxation by the State of California or any political subdivision thereof and
that the Issuer has no taxing power, (b)the Bonds do not and will not represent or constitute a general
obligation or a pledge of the faith and credit of the Issuer,the State of California or any political
subdivision thereof;and(c)the liability of the Issuer with respect to the Bonds is limited to the Trust
Estate as set forth in the Indenture.
5. The Investor acknowledges that it has the right to sell and transfer the Bonds,subject to
the delivery to the Trustee of an investor's letter from the transferee to the same effect as this Investor's
Letter,with no revisions except as may be approved in writing by the Issuer. Failure to deliver such
investor's letter shall cause the purported transfer to be null and void. The Investor agrees to indemnify
and hold harmless the Issuer with respect to any claim asserted against the Issuer that is based upon our
sale,transfer or other disposition of the Bonds,other than any claim that is based upon the willful
misconduct of the Issuer. .
6. [The Investor acknowledges that it has either been supplied with or been given access to
information,including financial statements and other financial information to which a reasonable investor
would attach significance in making investment decisions,and the Investor has had the opportunity to ask
questions and receive answers from knowledgeable individuals concerning the Borrower,the Project and
the Bonds and the security therefor so that,as a reasonable investor,the Investor has been able to make its
decision to purchase the Bonds. The Investor acknowledges that it has not relied upon the Issuer for any
information in connection with the Investor's purchase of the Bonds.']
7. [The Investor has made its own inquiry and analysis with respect to the Bonds and the
security therefor,and other material factors affecting the security and payment of the Bonds. The
Investor is aware that the business of the Borrower involves certain economic variables and risks that
could adversely affect the security for the Bonds. The Investor acknowledges that in the event of a
default on the Bonds,the risk of loss lies entirely with the Investor.']
'Bracketed text to be omitted if the Bonds are acquired by a Purchaser Trustee.
DOCSSF1:671616.4
40511-124J78 D-2
8. The investor acknowledges that Bondholder Representative(as defined in the Indenture)
has been appointed pursuant to the provisions of the Indenture and hereby acknowledges the rights and
privileges of the Bondholder Representative as set forth in the Indenture.
Very truly yours,
[INVESTOR/PURCHASE TRUSTEE]
By:
Authorized Signatory
DOCSSF1:671616.4
40511-124J78 D-3
EXHIBIT E
FORM OF NOTICE OF RETENTION
TO: Wells Fargo Bank,National Association, as Trustee
707 Wilshire Boulevard, 17th Floor
Los Angeles,CA 90017
Attention: Corporate Trust Department
Re: County of Contra Costa
Multifamily Housing Revenue Bonds
(Hidden Cove Apartments Project)2003 Series A
The undersigned(the"Holder")owns$ aggregate principal amount of the above-
referenced Bonds(the"Bonds")and acknowledges receipt of a Notice of Tender dated
from the Trustee with respect to the Bonds.
The undersigned irrevocably elects to retain$ aggregate principal amount of its
Bonds and will not tender such Bonds for purchase on the noticed Remarketing Date.
The Holder hereby acknowledges that commencing on the Remarketing Date,the Bonds shall
bear interest at the Fixed Bond Coupon Rate.
Capitalized terms used herein and not otherwise defined have the meanings given such terms in
the Indenture dated as of April 1,2003 relating to the Bonds.
Dated: 4
Very truly yours,
NAME OF HOLDER:
By:
Name:
Title:
4 Must be dated and delivered by 4:00 p.m.,Eastern time, on the fifth Business Day prior to
the Remarketing Date.
DOCSSF1:671616.4
40511-124 J78
v
LOAN AGREEMENT
between
COUNTY OF CONTRA COSTA
and
STEADFAST HIDDEN COVE,L.P.,
a California limited partnership
dated as of April 1,2003
Relating to:
$7,400,000
Multifamily Housing Revenue Bonds
(Hidden Cove Apartments Project)2003 Series A
The interest of the Issuer in this Loan Agreement (except for certain rights described herein) has been
pledged and assigned to Wells Fargo Bank, National Association, as Trustee (the "Trustee"), under that
certain Trust Indenture dated as of April 1,2003 by and between the Issuer and the Trustee.
DOCSSF1:671618.3
40511-124 J78
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS;PRINCIPLES OF CONSTRUCTION..................................................... 1
Section 1.1 Specific Definitions.............................................................................................. 1
Section 1.2 Principles of Construction.................................................................................. 19
ARTICLE11 GENERAL......................................................................................................................20
Section2.1 Issuance of Bonds..............................................................................................20
Section 2.2 Assignment to Trustee........................................................................................20
Section 2.3 Loan of Bond Proceeds;Note............................................................................20
Section 2.4 Disbursements; Investment of Moneys in Funds...............................................20
Section2.5 [Reserved]..........................................................................................................21
Section 2.6 Monthly Loan Payments and Other Payments Under the Note.........................21
Section 2.7 Additional Payments............................................................ 21
Section 2.8 Initial Deposit; Costs of Issuance Deposit.........................................................22
Section 2.9 Overdue Payments; Payments if Default............................0............0.................22
Section 2.10 Obligations of the Borrower Absolute and Unconditional.................................23
Section 2.11 Optional Prepayment of Note...........................................................0.................23
Section 2.12 Mandatory Prepayment of Note..................................0......................................24
Section 2.13 Calculation of Interest Payments and Deposits to Reserve Funds.....................24
Section2.14 [Reserved]......................0 ..................00...............................................0.........0.0..25
Section 2.15 Grant of Security Interest; Application of Funds................................................25
ARTICLEIII [RESERVED] ...........o..............................................................0.........0...............0..............25
ARTICLE IV REPRESENTATIONS AND WARRANTIES...............................................................25
Section 4.1 Borrower Representations.................................................................................o..25
Section 4.2 Issuer Representations....................................0...........................................0.......32
Section 4.3 Survival of Representations and Covenants..............................0........................
32
ARTICLE V AFFIRMATIVE COVENANTS.............................................................0.........................32
Section 5.1 Existence....... **00 0 so*0 0 *0*so 0 32
Section 5.2 Taxes and Other Charges............ o"90-so-o"e""o,-0*00"'600-"-so o0o"O"00*94646,.... 32
Section 5.3 Repairs;Maintenance and Compliance..............................................................32
Section5.4 Litigation.................................................0..................................0...............0.......33
Section 5.5 Performance of Other Agreements........o.....................................................0.......33
Section5.6 Notices......................................................................................o........o...............33
Section 5.7 Cooperate in Legal Proceedings....................................................0....................33
Section 5.8 Further Assurances............................... Soo 000.000.0000.0 000**go**.33
Section 5.9 Delivery of Financial Infon-nation......................................................................33
Section 5.10 Environmental Matters....................................0..................................................33
Section 5.11 Title to the Project...............................................................................................34
Section5.12 [Reserved.]..........................................................................................................34
Section 5.13 Estoppel Statement...................................................................0.........................34
Section5.14 [Reserved.]..........................................................0...........................0....................3
Section5.15 [Reserved.].............o....................0-0....................................................................34
Section5.16 [Reserved.]............o............................................................................................34
TABLE OF CONTENTS
(continued)
Page
Section5.17 Expenses.............................................................................................................34
Section5.18 Indemnity..............................................................................................0..0...:.....35
Section 5.19 No Warranty of Condition or Suitability by the Issuer;Exculpation and
Indemnification.................................................................................................. 36
Section 5.20 Right of Access to the Project............................................................................37
Section 5.21 Tax Exempt Status of the Bonds.................................................0...................... 37
Section5.22 [Reserved.]......................................................................................................... 37
Section5.23 Tax Covenants.................................................................................................... 37
Section 5.24 Covenants under Indenture ................................................................................ 38
Section5.25 Notice of Default................................................................................................ 38
Section 5.26 Covenant with Bondholders...............................................................................3
Section 5.27 Disclosure Agreement........................................................................................ 38
ARTICLE VI NEGATIVE COVENANTS ...........................................................................................38
Section 6.1 Management Agreement.................................................................................... 38
Section6.2 Liens...................................................................................................................39
Section6.3 Dissolution.........................................................................................................39
Section 6.4 Change In Business or Operation of Property........................0...........................39
Section 6.5 Debt Cancellation...............................................................................................39
Section6.6 Assets.....................................................................................0.............0.............39
Section6.7 Transfers.............................................................................................................39
Section6.8 Debt.............0 00*.Q.0 so. *0 9-.6.6 goo @fees so***@**6066.4 09.66.so 60..00 0.0 0.0 0 0 0 0000 0....39
Section 6.9 Assignment of Rights..............................................:..........................................39
Section 6.10 Principal Place of Business................................................................................39
Section6.11 [Reserved.]......................................................................................0.............0.... 39
Section6.12 ERISA................................................................................................................39
Section 6.13 Arbitrage Covenant............................................................................................40
Section6.14 Tax Exemption...................................................................................................40
ARTICLE VII INSURANCE; CASUALTY;AND CONDEMNATION..........................0...................41
Section7.1 Insurance..................................................................................0.........................41
Section7.2 Casualty..............................................................................................................41
Section7.3 Condemnation....................................................................................................41
ARTICLEVIII DEFAULTS....................................................................................................................41
Section 8.1 Loan Agreement Defaults................................................................0.................41
Section8.2 Remedies............................................................................................................42
ARTICLEIX SPECIAL PROVISIONS.................................................................0..............................44
Section 9.1 Sale of Bonds and Secondary Market Transaction............................................44
ARTICLEX MISCELLANEOUS .......................................................................................................47
Section10.1 [Reserved.]..............................................................0................0........................0...........................0........................0 47
Section10.2 Notices ...................................................................................0...........................47
Section 10.3 Brokers and Financial Advisors....................................................................0....47
-11-
TABLE OF CONTENTS
(continued)
Page
Section10.4 Survival..............................................................................................................47
Section10.5 [Reserved.].........................................................................................................47
Section10.6 Governing Law...................................................................................................47
Section 10.7 Modification,Waiver in Writing........................................................................47
Section 10.8 Delay Not a Waiver............................................................................................47
Section10.9 Trial by Jury.......................................................................................................48
Section10.10 Headings.............................................................................................................48
Section 10.11 Severability............. 48
Section10.12 Preferences.........................................................................................................48
Section10.13 Waiver of Notice................................................................................................48
Section10.14 [Reserved.].........................................................................................................48
Section 10.15 Prior Agreements...............................................................................................48
Section 10.16 Offsets, Counterclaims and Defenses........................ 49
Section 10.17 Publicity................. 49
Section10.1 8 No Usury....o..........0.............................................................................................49
Section 10.19 Construction of Documents..............o...........o...................................................0.49
Section 10.20 No Third Party Beneficiaries.......o....so...........................................o...........o........49
Section10.21 [Reserved.]......0.0............................................................................0.................... 50
Section10.22 Assignment....o.......o..o........................................................................................050
Section10.23 [Reserved.]...00*sweso 006 0600 6 00006 0 00000000 00 0.*.so so**ease**0000*o asooso**sees osse-oo-oo*so G. 50
Section10.24 Consents................o..................0.............o........................................................... 50
Section 10.25 Issuer,Trustee and Bondholder Representative Not in Control;No
Partnership ........................0......0...................o......................0................ ......50
Section 10.26 Time of the Essence................................................o.................0........................51
Section 10.27 References to Bondholder Representative......................................................... 51
Section10.28 Release..............................o..............o..o..........o.--s-o.....so......................................51
Section 10.29 Assignments to Trustee............0......0.............................0....................................51
Section 10.30 Tenn of Loan Agreement.............................1.............................1.......................51
Section 10.31 Reimbursement of Expenses....o.........o..................... ..............o--o............51
ARTICLE XI LIMITATIONS ON LIABILITY........................................................... 51
Section 11.1 Limitations on Liability............0..........................................................................51
Section 11.2 Limitation on Liability of Bondholder Representative's and Hedge
Provider's Officers,Employees,Etc...................................................................52
Section 11.3 Limitation on Liability of the Issuer 52
This Loan Agreement(this"Loan Agreement")is entered into as of April 1,2003 between the
COUNTY OF CONTRA COSTA, a political subdivision of the State of California(the"Issuer"), and
STEADFAST HIDDEN COVE,L.P., a California limited partnership(the "Borrower").
WITNESSETH:
RECITALS
WHEREAS,the Borrower proposes to acquire and rehabilitate an 88-unit multifamily residential
rental housing project in Contra Costa County,California(the"Project") and to finance a portion of the
costs thereof with the proceeds of a loan from the Issuer made pursuant to the terms of this Loan
Agreement.
WHEREAS,the Issuer has entered into a Trust Indenture of even date herewith(the
"Indenture")with Wells Fargo Bank,National Association, as trustee(the"Trustee"),for the purpose of
issuing its $7,400,000 Multifamily Housing Revenue Bonds (Hidden Cove Apartments Project)2003
Series A(the"Bonds"), as therein provided,in consideration of loan payments to be made by the
Borrower and such other amounts as shall collectively be sufficient to pay all Bond Obligations(as
defined herein); and
WHEREAS,to evidence its repayment obligations under this Loan Agreement,the Borrower will
execute and deliver its promissory note(the"Note"). .
NOW,THEREFORE,in consideration of the premises and the mutual representations,covenants
and agreements herein contained,the Issuer and the Borrower do hereby represent,covenant and agree as
follows:
ARTICLE I
DEFINITIONS;PRINCIPLES OF CONSTRUCTION
Section 1.1 Specific Definitions. For all purposes of this Loan Agreement,except as
otherwise expressly provided or unless the context otherwise requires:
(a) The terms defined in this Article have the meanings assigned to them in this
Article. Singular terms shall include the plural as well as the singular, and vice versa.
(b) The definitions in the recitals to this instrument are for convenience only and
shall not affect the construction of this instrument.
(c) All accounting terms not otherwise defined herein shall have the meanings
assigned to them, and all computations herein provided for shall be made,in accordance with an
Approved Accounting Method. All references herein to"Approved Accounting Method"refer to
such method as its exists at the date of the application thereof.
(d) All references in this instrument to designated"Articles,""Sections"and other
subdivisions are to the designated Articles, Sections and subdivisions of this instrument as
originally executed.
DOCSSF 1:671618.3
40511-124 J78
(e) The terms"herein,"hereof'and"hereunder"and other words of similar import
refer to this Loan Agreement as a whole and not to any particular Article, Section or other
subdivision.
(f) All references in this instrument to a separate instrument are to such separate
instrument as the same may be amended or supplemented from time to time pursuant to the
applicable provisions thereof.
The following terms have the meanings set forth below:
"Act"shall mean Chapter 7 of Part 5 of Division 31 of the California Health and Safety Code, as
amended.
"Act of Bankruptcy"shall mean the filing of a petition in bankruptcy(or any other
commencement of a bankruptcy or similar proceeding)eeding)by or against the Borrower or the Co-General
Partner of the Borrower under any applicable bankruptcy,insolvency,reorganization,or similar law,now
or hereafter in effect;provided that in the case of an involuntary proceeding, such proceeding is not
dismissed within 90 days of the commencement thereof.
"'Additional Payments"'shall mean the payments payable pursuant to Section 2.7 of this Loan
Agreement.
"Affiliate"shall mean, as to any Person, any other Person that,directly or indirectly,is in Control
of,is Controlled by or is under common Control with such Person or is a director or officer of such
Person or of an Affiliate of such Person.
"Agreement of Environmental Indemnification"shall mean the Agreement of Environmental
Indemnification dated as of April 1,2003 executed by the Borrower for the benefit of the Issuer,the
Trustee and the Servicer.
"AyRroved Accounting Method"shall mean generally accepted accounting principles
applicable to entities organized as the Borrower in the United States of America as of the date of the
applicable financial report,or such other modified accrual or cash basis system of accounting approved by
the Bondholder Representative.
"Authorized Amount"shall mean$7,400,000.
"Authorized Borrower ReRresentativell shall mean a person at the time designated and
authorized to act on behalf of the Borrower by a written certificate furnished to the Issuer,the Bondholder
Representative and the Trustee containing the specimen signature of such person and signed on behalf of
the Borrower by its general partner or managing member,as the case may be,which certificate may
designate one or more alternates.
"Authorized Denomination"shall mean$1,000,000 and any multiple of$1 in excess thereof.
A A
",Authorized Issuer Representative"shall mean the Chair or Vice Chair of the Board of
Supervisors,the County Administrator,the Director of Community Development,or the Deputy Director-
Redevelopment, or such other person at the time designated to act on behalf of the Issuer as evidenced by
a written certificate furnished to the Trustee containing the specimen signature of such person and signed
on behalf of the Issuer by an Authorized Issuer Representative. Such certificate may designate an
DOCSSFI:671618.3
40511-124 J78 2
alternate or alternates,each of whom shall be entitled to perform all duties of the Authorized Issuer
Representative.
"Bankruptcy Code"shall mean the United States Bankruptcy Reform Act of 1978, as amended
from time to time, or any substitute or replacement legislation.
"Beneficial Owner"shall mean the person in whose name a Bond is recorded as beneficial
owner of such Bond by the Trustee or by a Securities Depository,a Participant or an Indirect Participant
on the records of the Trustee or of a Securities Depository,a Participant or an Indirect Participant,as the
case may be, or such person's subrogee.
"Bond Counsel"shall mean any attorney or firm of attorneys designated by the Issuer having a
national reputation for skill in connection with the authorization and issuance of municipal obligations
under Sections 103 and 141-150(or any successor provisions)of the Code.
"Bond Coupon Rate"shall mean(i)the greater of(a)the Fixed Bond Coupon Rate or(b)the
BMA Municipal Swap Index,per annum, as determined on each Bond Coupon Rate Determination Date
by the Indexing Agent,or(ii)if the Bonds are converted to bear interest at a fixed rate pursuant to
Section 4.10 of the Indenture,the Fixed Bond Coupon Rate; and,in all cases,shall not exceed 12%per
annum or such lower rate of interest as permitted by law.
"Bond Coupon Rate Determination Date"shall mean the Closing Date and Wednesday of each
week thereafter;provided that if any Wednesday is not a Business Day,the Bond Coupon Rate
Determination Date shall be the immediately following Business Day.
"Bond Coupon Rate Period"shall mean the period from and including the Thursday
immediately following the applicable Bond Coupon Rate Determination Date (of if Thursday or a day
following is the day the Bond Coupon Rate is determined, from and including such day)to and including
the following Wednesday,during which period the Bonds will bear interest at the applicable Bond
Coupon Rate.
"Bond Documents" shall mean(a)this Loan Agreement,(b)the Indenture, (c)the Regulatory
Agreement, (d)the Note,(e)the Mortgage, (f)the Hedge Agreement,(g)the Cap Agreement,(h)UCC
financing statements, (i)the Tax Agreement, 0) such assignments of management agreements,contracts
and other rights as may be required,(k)all other documents evidencing,securing,governing or otherwise
pertaining to the Bonds or any other Bond Documents, and(1)all amendments,modifications,renewals
and substitutions of any of the foregoing.
"Bond Fund" shall mean the Fund created pursuant to Section 8.2 of the Indenture.
"Bond Obligations"shall mean the obligation of the Issuer to pay the principal and purchase
price of and the interest and premium,if any, on all Bonds as required by and set forth in the Indenture.
"Bond Payment Date"shall mean the first day of each month,commencing 1)200—,and
the Maturity Date. If any Bond Payment Date is not a Business Day,payment of the Bonds need not be
made on such date but may be made on the next Business Day with the same force and effect as if made
on the original date and no interest shall accrue from the Bond Payment Date through the date payment is
actually made.
"Bond Purchaser"shall mean GMAC CHCC, its transferees, successors and assigns.
DOCSSF1:671618.3
40511-124 J78 3
"Bond Register" shall mean the register maintained by the Trustee pursuant to Section 4.5 of the
Indenture on behalf of the Issuer for the registration and transfer of the Bonds.
"Bond Registrar"shall mean the Trustee,appointed as such pursuant to Section 4.5 of the
Indenture for the purpose of registering and.transferring the Bonds, and its successors or assigns. ,
"Bondholder Representative"shall mean the Person or Persons who are designated by a
Majority of Holders to act on behalf of the Bondholders as provided in Section 15.5 of the Indenture,or
an assignee of such Person or Persons as provided in Section 15.5 of the Indenture. GMAC CHCC shall
be the initial Bondholder Representative.
"Bondholders,""Holders,""Owners"or"Registered Owners" shall mean the Person or
Persons in whose name or names the Bonds are registered in the Bond Register.
"Bonds"shall mean the bonds authenticated and delivered pursuant to the Indenture.
"Book-Entry System"shall mean a book-entry system established and operated for the
recordation of Beneficial Owners pursuant to Section 4.9 of the Indenture.
"Borrower"shall mean Steadfast Hidden Cove,L.P.,a California limited partnership,its
successors and assigns.
"Borrower Controlling Entity"shall mean,if the Borrower is a partnership,the sole general
p g
partner or managing partner of the Borrower,or if the Borrower is a limited liability company,the
g
managing member of the Borrower, or if the Borrower is a not for profit corporation,the shareholders
thereof.
"Borrower Debt"shall mean the unpaid principal of and premium,if any, and interest on the
Note and other amounts due under the Loan Agreement.
"Borrower Payment Obligations"shall mean all payment obligations of the Borrower under the
Note,the Loan Agreement and each of the other Bond Documents,including,but not limited to,the
Monthly Loan Payments and Additional Payments.
"Borrower's Certificate"shall mean the Borrower's Certificate and Agreement executed and
delivered by the Borrower on the Closing Date for the benefit of the Issuer,the Trustee and the Servicer.
"Business Day"shall mean any day other than(i)a Saturday or a Sunday, and(ii)a day on
which federally insured depository institutions in New York,New York,Houston or Los Angeles,
California,are authorized or obligated by law,regulation, governmental decree or executive order to be
closed.
"Cap Agreement"shall mean any interest rate cap agreement between the Hedge Provider and a
counterparty approved by the Bondholder Representative,which shall be for a term of not less than five
years from the Closing Date unless another term is approved in writing by the Bondholder Representative,
as such agreement may be amended,modified,supplemented or restated from time to time, and any
subsequent, substitute or replacement interest rate cap agreement approved in writing by the Bondholder
Representative,which agreement shall be assigned to the Trustee in accordance with the terms of the
Hedge Agreement.
DOCSSF1:671618.3
40511-124 J78 4
"Capital Expenses" shall mean expenses that are required to be capitalized under the Approved
Accounting Method.
"Ca ua shall have the meaning set forth in Section 7.2 hereof.
11Closing shall mean April 30, 2003,the date the Bonds are delivered and begin to bear
interest at the applicable Bond Coupon Rate.
"'Co-General Partner" shall mean [Steadfast HCA, L.P.],its successors and assigns.
Code"shall mean the Internal Revenue Code of 1986 and the Regulations,rulings and
proclamations promulgated or proposed thereunder.
"fommitment"shall mean the letter from GMAC CHCC to the Borrower dated 12003)
committing to purchase the Bonds on the terms set forth in the Loan Application dated ,as
accepted by the Borrower and issued by GMAC CHCC. In the event of any conflict or inconsistency
between the Commitment and the other documents relating to the Loan,the terms and provisions of such
other documents shall govern and control.
"Commitment Maturity Date" [shall have the meaning set forth in the Commitment.]
"Completion Date"shall mean the date on which the Project is completed,in accordance with
the requirements of the Commitment,as evidenced by a certification of the Borrower delivered to the
Issuer, the Trustee and the Bondholder Representative in accordance with Section 8.7(c)of the Indenture,
which shall not be later than ,200—.
"Condemnation"shall have the meaning set forth in the Mortgage.
"Conditions to Conversion"shall have the meaning set forth in the Commitment.
"Construction Phase"shall mean the period ending on the later of the Conversion Date or the
Commitment Maturity Date.
"Control" shall mean,with respect to any Person,either(i)ownership directly or through other
entities of more than 50%of all beneficial equity interest in such Person,or(ii)the possession,directly or
indirectly,of the power to direct or cause the direction of the management and policies of such Person,
through the ownership of voting securities,by contract or otherwise.
"Conversion"shall mean the conversion of the Loan from the Construction Phase to the
Permanent Phase.
"Conversion Date"shall mean the first day of the month following the month in which the
Conversion Notice is issued by the Bondholder Representative or such other date as is approved by the
Bondholder Representative with notice to the Trustee.
"'Conversion Notice"shall mean a written notice by the Bondholder Representative to the Issuer,
the Trustee and the Borrower given prior to the Commitment Maturity Date(a)stating that each of the
Conditions to Conversion has been satisfied prior to the Commitment Maturity Date or,if any Condition
to Conversion has not been satisfied prior to the Commitment Maturity Date,has been waived in writing
by the Bondholder Representative prior to the Commitment Maturity Date,and(b)specifying the
Conversion Date stating that each of the Conditions to Conversion has been satisfied prior to the
DOCSSFI:671618.3
40511-124 J78 5
Commitment Maturity Date or,if any Condition to Conversion has not been satisfied prior to the
Commitment Maturity Date,has been waived in writing by the Bondholder Representative prior to the
Commitment Maturity Date, and(c)specifying the Conversion Date.
"Costs of Issuance"shall mean the fees,costs,expenses and other charges incurred in
connection with the issuance of the Bonds,the negotiation and preparation of the Indenture and each of
the other Bond Documents and shall include,but shall not be limited to,the following: (a)counsel fees
(including but not limited to Bond Counsel,Issuer's counsel,Trustee's counsel,Borrower's counsel,to
the extent the Borrower's counsel services are for legal services relating to the issuance of the Bonds, and
Bond Purchaser's counsel); (b)placement agent and financial advisor fees incurred in connection with the
issuance of the Bonds; (c)Trustee fees and expenses incurred in connection with the issuance of the
Bonds; (d)Trustee and certifying and authenticating agent fees and expenses related to issuance of the
Bonds; (e)printing costs(for the Bonds and of any preliminary and final offering materials); (f)any
recording fees; (g)any fees charged by the Issuer or the State; and(h)costs incurred in connection with
the required public notices generally and costs of the public hearing.
",Costs of Issuance Deposit"shall mean the amount of$ which the Borrower will
deposit with the Trustee to pay Costs of Issuance.
"Debt Service"shall mean the aggregate principal,if any,and interest and any other payments
due on the Note.
"Default"shall mean the occurrence of an event,which under any Bond Document would but for
the giving of notice or passage of time,or both,be an Event of Default or Loan Agreement Default.
"Default Rate"shall mean a rate per annum equal to the lesser of(i)the maximum rate permitted
by applicable law, or(ii)the default rate set forth in the Note,in each case compounded monthly
(computed on the basis of twelve 30-day months),as applicable.
"Disclosure Aereement"shall mean the Continuing Disclosure Agreement dated as of April 1,
2003 between the Borrower and the Trustee.
"Disclosure Document"shall have the meaning set forth in Section 9.1.2 hereof.
"Eligible Funds"shall mean any moneys held by the Trustee in any fund or account under the
Indenture and available,pursuant to the provisions hereof,to be used to pay principal of,premium,if any,
or interest on,the Bonds.
"Equipment"shall have the meaning given to the term"Personalty"in the Mortgage.
"ERISA"shall mean the Employment Retirement Income Security Act of 1974,as amended
from time to time, and the rules and regulations promulgated hereunder.
"ERISA Affiliate"shall mean all members of a controlled group of corporations and all trades
and business(whether or not incorporated)under common control and all other entities which,together
with the Borrower,are treated as a single employer under any or all of Section 414(b),(c),(m)or(o)of
the Code.
"Event of Default" shall have the meaning set forth in Section 11.1 of the Indenture.
"Excess Investment Earnings"shall mean an amount equal to the sum of(a)the remainder of
DOCSSFI:671618.3
40511-124 J78 6
(i) the amount earned on all Nonpurpose Investments (other than
investments attributable to an excess described in this subparagraph), less
(ii) the amount that would have been earned if such Nonpurpose Investments
were invested at a rate equal to the Yield on the Bonds,plus
(b) any income attributable to the excess described in(a)above.
"Exchange Act"shall mean the Securities Exchange Act of 1934,as amended.
"Expense Fund"shall mean the Fund created pursuant to Section 8.2 of the Indenture.
"Fiscal Year" shall mean each twelve month period commencing on January 1 and ending on
December 31.
"Fitch means Fitch, Inc.,doing business as Fitch Ratings, a corporation organized and existing
under the laws of the State of Delaware,its successors and their assigns.
"Fixed Bond Coupon Rate" shall mean %per annum.
"Fixed Rate Period"has the meaning given such term in Section 4.10(d)of the Indenture.
"GMAC CHCC"shall mean GMAC Commercial Holding Corp., a Colorado corporation, its
successors and assigns.
"Government Obligations" shall mean noncallable,nonprepayable(a) direct, general
obligations of the United States of America, or(b)any obligations unconditionally guaranteed as to the
full and timely payment of all amounts due thereunder by the full faith and credit of the United States of
America(including obligations held in book-entry form),but specifically excluding any mutual funds or
unit investment trusts invested in such obligations.
"Governmental Authority"shall mean any court,board,agency, commission,office or
authority of any nature whatsoever for any governmental unit(federal, state,county,district,municipal,
city or otherwise)now or hereafter in existence.
"Gross Proceeds" shall mean the aggregate of:
(a) the net amount(after payment of all expenses of issuing the Bonds)of Bond
proceeds received by the Issuer as a result of the sale of the Bonds;
(b) all amounts received by the Issuer as a result of the investment of the Bond
proceeds;
(c) any amounts held in any fund to the extent that the Issuer reasonably expects to
use the amounts in such fund to pay any Bond Obligations; and
(d) any securities or obligations pledged by the Issuer or by the Borrower as security
for the payment of any Bond Obligation.
"Ground Lease" shall mean a lease of the Land from a third party to the Borrower, if any shall
be in effect from time to time.
DOCSSF1:671618.3
40511-124 J78 7
"Ground Lessor"shall mean the lessor of the Land pursuant to any Ground Lease.
"Hedge Agreement"shall mean the-Interest Rate Protection Agreement dated as of April 1,
2003,between the Hedge Provider and the Trustee, for the benefit of the Bondholders from time to time,
as such agreement may be amended, supplemented or substituted from time to time.
"Hedge Payments"shall mean the payments received from time to time by the Trustee,for the
benefit of the Issuer and the Holders from time to time,pursuant to,and in accordance with,the Hedge
Agreement,including payments received under the Cap Agreement.
"Hedge Provider"shall mean GMAC CHCC,its successors and assigns
"Improvements"shall have the meaning set forth in the Mortgage.
"Indemnified Party"shall have the meaning set forth in Section 5.18 hereof.
"Indenture"shall mean the Trust Indenture dated as of April 1,2003 by and between the Issuer
and the Trustee,as it may from time to time be supplemented,modified or amended by one or more
indentures or other instruments supplemental thereto entered into pursuant to the applicable provisions
thereof.
"Independent,"when used with respect to any person,shall mean a person who(a)is in fact
independent,(b)does not have any direct financial interest or any material indirect financial interest in the
Issuer,the Borrower,the Trustee, the Bondholder, the Servicer,the Manager or any other Person
participating in the Bond financing(a"Financing Participant")or in any obligor with respect to the
Bonds or in any Affiliate of any Financing Participant or of any such obligor, and(c)is not connected
with any Financing Participant or any such obligor as an officer,employee,promoter,underwriter,
trustee,partner,director or person performing similar functions.
"Indexing Agent"shall mean the indexing agent appointed by the Bondholder Representative to
determine the Bond Coupon Rate in accordance with the provisions of the Indenture. The initial Indexing
Agent shall be Newman&Associates,A Division of GMAC Commercial Holding Capital Markets Corp.
"Indirect Participant"shall mean a-broker-dealer,bank or other financial institution for which
the Securities Depository holds Bonds as a securities depository through a Participant.
"Initial Deposit"shall mean the amount of$ payable by the Borrower on the
Closing Date,representing the sum of(i)30 days' interest on the Note,plus (ii)the amount of interest that
will accrue on the Note from the Closing Date to the first day of the immediately following month.
"Interest Account"shall mean the account created pursuant to Section 8.2 of the Indenture.
"Investor Letter"shall mean a letter in substantially the form attached to the Indenture as
Exhibit D,duly executed by a purchaser of Bonds and delivered to the Trustee.
"Iss_uer,"shall mean County of Contra Costa,a political subdivision of the State of California,
and its successors and assigns.
"Issuer Fee"shall mean the annual administration fee of the Issuer in an amount equal to .125%
of the Authorized Amounts,payable by the Borrower in monthly installments to the Servicer, for
DOCSSF 1:671618.3
40511-124 J78 8
remittance to the Issuer,in semiannual installments,in advance,payable on each January I and July 1,
commencing on the Closing Date,until termination of the Qualified Project Period.
"Land" shall mean the parcel of real property located in Contra Costa County, California, on
which the Improvements are located, as more particularly described in Exhibit A to the Regulatory
Agreement.
"Late Charge" shall mean the amount due and payable as a late charge on overdue payments
under the Note,as provided in Section 7 of the Note.
"Leases" shall mean the leases written for apartments units within the Project on the standard
form of lease that has been approved by the Bondholder Representative.
"Legal Requirements"shall mean statutes,laws,rules,orders,regulations,ordinances,
judgments,decrees and injunctions of Governmental Authorities affecting all or part of any Property,the
.W
Ground Lease or the construction,use, alteration or operation thereof,whether now or hereafter enacted
and in force,and all permits,licenses and authorizations and regulations relating thereto,and all
covenants,, agreements,restrictions and encumbrances contained in any instrument,either of record or
known to the Borrower, at any time in force affecting all or part of the Project,including any that may(i)
require repairs,modifications or alterations in or to all or part of the Project,or(ii)in any way limit the
use and enjoyment thereof.
"Liabilities"shall have the meaning set forth in Section 5.18 hereof.
"Licenses"shall have the meaning set forth in Section 4.1.22 hereof.
"Lien"shall mean any interest,or claim thereof,in the Project securing an obligation owed to,or
a claim by, any Person other than the owner of the Project,whether such interest is based on common
m,a deed of trust,mortgage,
law, statute or contract,including the lien or security interest arising from
assignment,encumbrance,pledge, security agreement,conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. The term"Lien"shall include reservations, exceptions,
encroachments,easements,rights of way,covenants,conditions,restrictions,leases and other title
exceptions and encumbrances affecting the Project.
"Loan" shall mean the mortgage loan made by the Issuer to the Borrower pursuant to this Loan
Agreement in the aggregate principal amount of$7,400,000, as evidenced by the Note.
"Loan Agreement"shall mean this Loan Agreement,as it may be supplemented,amended or
replaced from time to time in accordance with the Indenture.
"Loan Agreement Default"shall mean any event of default set forth in 8.1 hereof. A Loan
Agreement Default shall"exist"if a Loan Agreement Default shall have occurred and be continuing.
"Majority of Holders"shall mean the Holders of more than 50%of the aggregate principal
amount of all Outstanding Bonds(or beneficial interests therein).
I'Mannement Agreement"shall mean the Management Agreement between the Borrower and
Manager,pursuant to which the Manager is to manage the Project, as the same may be amended,restated,
replaced, supplemented or otherwise modified from time to time.
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"Management Fee" shall mean all fees in the nature of management fees payable to Manager
under the Management Agreement.
"Manager" shall mean Steadfast Management Company, Inc. or any successor management
company employed by the Borrower and approved by any Bondholder Representative in accordance with
the terms of the Mortgage,the Loan Agreement or any of the other Bond Documents.
"Maturity Date"shall mean [April 1,2038].
"Moody's"shall mean Moody's Investor Services,Inc. or its successor.
"Monthly Loan Payment Date"shall mean the 1 st day of each month, commencing 1,
200_,or any other date on which the Note is prepaid or paid,whether at the scheduled maturity or upon
the redemption or acceleration of the maturity thereof.
"Monthly Loan Payments" shall mean the monthly loan payments payable pursuant to the Note.
"Mortgage"shall mean the Multifamily Deed of Trust,Assignment of Rents, Security
Agreement and Fixture Filing dated as of April 1,2003,executed by the Borrower and granting a first lien.
on the Project for the benefit of the Trustee(by assignment from the Issuer),including any amendments
and supplements thereto as herein permitted.
"Net Operating Income" for any period,shall mean the positive, annualized amount by which
the Operating Income exceeds Operating Expenses, as determined by the Bondholder Representative.
"Nonpurpose Investment" shall mean any investment property(as defined in Section 148(b)of
the Code)that is acquired with the Gross Proceeds of the Bonds and which is not acquired to carry out the
governmental purpose of the Bonds.
"Note" shall mean the Multifamily Note, dated April 1,2003,in the stated principal amount of
$7,400,000 and executed by the Borrower in favor of the Issuer, as assigned to the Trustee,as it may be
amended, supplemented or replaced from time to time, including any amendment or supplement delivered
by the Borrower in accordance with the provisions of the Permanent Loan Funding Agreement.
"Note Coupon Rate" shall mean the rate set forth in the Note; or at any time while a Loan
Agreement Default exists,the Default Rate to the extent provided in the Note.
"Notice of Retention"shall have the meaning set forth in Section 4.10 of the Indenture.
"Office of the Trustee"shall mean the office of the Trustee at the address set forth in
Section 15.1 of the Indenture,or at such other place or places as may be designated by the Trustee from
time to time.
"Operating Expenses"shall mean the annualized expenses incurred by the Borrower for the
operation of the Project,as determined by the Bondholder Representative on the basis of all property and
operating information available for the Project since the commencement of operations,including certified
actual Project operating statements for such period. For purposes of this definition,Operating Expenses
will include,but not be limited to,annualized(i)real estate taxes,if any,and assessments for the Project,
determined as if the Project has been fully assessed,but only to the extent provided in Section 7(a)of the
Mortgage,(ii)management fees equal to the greater of market fees,as determined by the Bondholder
DOCSSF1:671618.3
40511-124 J78 10
Representative, or actual management fees under the Management Agreement, (iii)insurance premiums
and (iv)utilities.
"Operating Income" shall mean, for any period of calculation,the positive annualized amount
of the following, as determined by the Bondholder Representative: the aggregate of monthly rents,net of
concessions,rental abatements,"free"rent,inducements,and other incentives actually collected by the
Borrower under the Leases identified in the Rent Roll and,to the extent not duplicative,any other income
actually collected by the Borrower that is the type of income used in the underwriting of the Loan, as
adjusted for the greater of market vacancy,as determined by the Bondholder Representative,or actual
vacancy for the Project. Market vacancy is defined as the weighted average vacancy among the
competitive low-income properties,within the subject metropolitan area;provided that properties open
less than 12 months shall be excluded. However,in no case will this allowance be less than 5%.
"Opinion of Bond Counsel" shall mean a written opinion of Bond Counsel addressed to the
Issuer and the Trustee,dated as of the date of delivery of such opinion,to the effect that facts relating to
the Bonds, the Borrower or the Project or any federal tax law or regulation have changed or any public or
private final ruling,technical advice memorandum or any other written communication by the Internal
Revenue Service has been issued,or any final ruling.or decision of a court of competent jurisdiction has
been rendered or any other matter has been disclosed to such counsel,in any such case,which fact or
event will not cause interest on the Bonds to become includable in gross income of the holders thereof for
federal income tax purposes.
"Opinion of Counsel"shall mean an opinion from an attorney or firm of attorneys,acceptable to
the Issuer and the Bondholder Representative,with experience in the matters to be covered in the opinion.
"Other Charges"shall mean all maintenance charges,impositions other than Taxes, and any
other charges,including vault charges and license fees for the use of vaults,chutes and similar areas
adjoining the Project,now or hereafter levied or assessed or imposed against the Project or any part
thereof.
"Outstanding"or"Bonds outstanding"when used with reference to the Bonds,shall mean, as
of a particular date, all Bonds theretofore authenticated and delivered under the Indenture except:
(a) Bonds theretofore cancelled or required to be cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) Bonds which are deemed to have been paid in accordance with the Indenture;
(c) Bonds in exchange for or in lieu of which other Bonds have been authenticated
and delivered pursuant to the Indenture; and
(d) Bonds not tendered when required under the provisions of the Indenture which
are deemed tendered.
In determining whether the Registered Owners of a requisite aggregate principal amount of
Outstanding Bonds have concurred in any request, demand, authorization, direction,notice,consent or
waiver under the provisions of the Indenture,this Loan Agreement or any other Bond Document,Bonds
which are owned by or held for the account of the Borrower,the Issuer or any other obligor on the Bonds,
or any affiliate of any one of said entities(for the purpose of this definition an"affiliate"of any specified
Person means any other Person directly or indirectly Controlling or Controlled by or under direct or
DOCSSF1:671618.3
40511-124 J78 11
indirect common Control with such specified Person)shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination.
"Participant"shall mean a broker-dealer,bank or other financial institution for which the
Securities Depository holds Bonds as a securities depository.
"Permanent Loan Funding Agreement"shall mean the Permanent Loan Funding Conditions
and Escrow Agreement,dated as of April 1,2003,by and among the Borrower,the Issuer,the Trustee,
the Bondholder Representative and the appointed title company, as escrow holder,regarding the terms
and conditions for funding the permanent loan.
"Permanent Phase"shall mean the period commencing on the Conversion Date.
"Permitted Encumbrances"shall have the meaning given such term in the Mortgage.
"Permitted Investments"shall mean any one or more of the following investments,if and to the
extent the same are then legal investments under the applicable laws of the State for moneys proposed to
be invested therein:
(a) Direct obligations of,and obligations on which the full and timely payment of
principal and interest is unconditionally guaranteed by,the full faith and credit of the United States of
America.
(b) Direct obligations of,and obligations on which the full and timely payment of
principal and interest is unconditionally guaranteed by, any agency or instrumentality of the United States
of America(other than the Federal Home Loan Mortgage Corporation)or direct obligations of the World
Bank,which obligations are rated in the Highest Rating Category.
(c) Obligations,in each case rated in the Highest Rating Category, of(i)any state or
territory of the United States of America, (ii) any agency,instrumentality, authority or political
subdivision of a state or territory or(iii)any public benefit or municipal corporation the principal of and
interest on which are guaranteed by such state or political subdivision.
(d) Any written repurchase agreement entered into with a Qualified Financial
Institution whose unsecured short-term obligations are rated in the Highest Rating Category.
(e) Commercial paper rated in the Highest Rating Category.
(f) Interest-bearing negotiable certificates of deposit,interest-bearing time deposits,
interest-bearing savings accounts and bankers' acceptances,issued by a Qualified Financial Institution,if
either(A)the Qualified Financial Institution's unsecured short-term obligations are rated in the Highest
Rating Category or(B)such deposits, accounts or acceptances are fully insured by the Federal Deposit
Insurance Corporation.
(g) An agreement held by the Trustee for the investment of moneys at a guaranteed
rate with a Qualified Financial Institution whose unsecured long-term obligations are rated in the Highest
Rating Category,or whose obligations are unconditionally guaranteed or insured by a Qualified Financial
Institution whose unsecured long-term obligations are rated in the Highest Rating Category;provided that
such agreement is in a form acceptable to the Bondholder Representative; and provided further that such
agreement includes the following restrictions:
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40511-124 J78 12
(i) the invested funds will be available for withdrawal without penalty or
premium, at any time that the Trustee is required to pay moneys from the Fund(s)established
under the Indenture to which the agreement is applicable;
(ii) the agreement, and if applicable the guarantee or insurance, is an
unconditional and general obligation of the provider and,if applicable,the guarantor or insurer of
the agreement,and ranks on a parity with all other unsecured unsubordinated obligations of the
provider, and if applicable,the guarantor or insurer of the agreement;
(iii) the Trustee receives an opinion of counsel,which may be subject to
customary qualifications,to the effect that such agreement is legal,valid,binding and enforceable
upon the provider in accordance with its terms and,if applicable,an opinion of counsel to the
effect that any guaranty or insurance policy provided by a guarantor or insurer is legal,valid,
binding and enforceable upon the guarantor or insurer in accordance with its terms; and
(iv) the agreement provides that if during its term the rating of the
Qualified Financial Institution providing, guaranteeing or insuring, as applicable,the agreement,
is withdrawn, suspended by any Rating Agency or falls below the Highest Rating Category,the
provider must,within 10 days, either: (A)collateralize the agreement(if the agreement is not
already collateralized)with Permitted Investments described in paragraph(a) or(b)by depositing
collateral with the Trustee or a third party custodian, such collateralization to be effected in a
manner and in an amount sufficient to satisfy the requirements of the Bondholder Representative
or,if the agreement is already collateralized, increase the collateral with Permitted Investments
described in paragraph(a)or(b)by depositing collateral with the Trustee or a third party
custodian, so as to satisfy the requirements of the Bondholder Representative, or(B)transfer the
agreement, guarantee or insurance, as applicable,to a replacement provider, guarantor or insurer,
as applicable,then meeting the requirements of a Qualified Financial Institution and whose
unsecured long-term obligations are then rated in the Highest Rating Category,and(C)if the
provider fails to take the actions described in(A) or(B),at the request of the Trustee or the
Bondholder Representative,repay the principal of and accrued but unpaid interest on the
investment,in either case with no penalty or premium unless required by law. The agreement
may provide that the down-graded provider may elect which of the remedies to the down-grade
(other than the remedy set out in(C))to perform.
.(h) Subject to the ratings requirements set forth in this definition,shares in any
money market mutual fund(including those of the Trustee or any of its affiliates)registered under the
Investment Company Act of 1940,as amended,that have been rated -G or AAAm by S&P or Aaa
by Moody'.s so long as the portfolio of such money market mutual fund is limited to Permitted
Investments described in paragraph(a)above and agreements to repurchase such obligations.If at any
time both S&P and Moody's rate a money market mutual fund and one of those ratings is below the level
required by this paragraph,then such money market mutual fund will,nevertheless,be deemed to be rated
in the Highest Rating Category if the lower rating is no more than one rating category below the highest
rating category of that rating agency.
(i) Any other investment authorized by the laws of the State,if such investment is
approved in-writing by the Bondholder Representative.
Permitted Investments shall not include any of the following:
(1) Except for any investment described in the next sentence,any
investment with a final maturity or any agreement with a term greater than one year from the date of the
DOCSSF1:671618.3
40511-124 J78 13
investment.This exception(1)shall not apply to any obligation that provides for the optional or
mandatory tender,at par,by the holder of such obligation at least once within one year of the date of
purchase and Permitted Investments listed in paragraphs(g) and(i)).
(2) Except for any obligation described in paragraph(a)or(b),any.
obligation with a purchase price greater or less than the par value of such obligation.
(3) Any asset-backed security,including mortgage-backed securities,real
estate mortgage investment conduits,collateralized mortgage obligations,credit card receivable asset-
backed securities and auto loan asset-backed securities.
(4) Any interest-only or principal-only stripped security.
(5) Any obligation bearing interest at an inverse floating rate.
(6) Any investment that may be prepaid or called at a price less than its
purchase price prior to stated maturity.
(7) Any investment the interest rate on which is variable and is established
other than by reference to a single index plus a fixed spread, if any,and which interest rate moves
proportionately with that index.
(8) Any investment described in paragraph(d)or(g)with,or guaranteed
or insured by,a Qualified Financial Institution described in clause(d)of the definition of Qualified
Financial Institution if such institution does not agree to submit to jurisdiction, venue and service of
process in the United States of America in the agreement relating to the investment.
(9) Any investment to which S&P has added an"r"or"t"highlighter.
For purposes of this definition,the term"Mghest Rating Category"means,with respect
to a Permitted Investment,that the Permitted Investment is rated by S&P or Moody's in the highest rating
given by that rating agency for that general category of security. If at any time both S&P and Moody's
rate a Permitted Investment and one of those ratings is below the Highest Rating Category,then such
Permitted Investment will,nevertheless,be deemed to be rated in the Highest Rating Category if the
lower rating is no more than one rating category below the highest rating category of that rating agency.
If,however,the lower rating is more than one full rating category below the Highest Rating Category of
that rating agency,then the Investment will be deemed to be rated below the Highest Rating Category.
For purposes of this definition,the term"Qualified Financial Institution"means any of:
(i)bank or trust company organized under the laws of any state of the United States of America,
(ii)national banking.association,(iii)savings bank,a savings and loan association,or an insurance
company or association chartered or organized under the laws of any state of the United States of
America,(iv) federal branch or agency pursuant to the International Banking Act of 1978 or any
successor provisions of law or a domestic branch or agency of a foreign bank which branch or agency is
duly licensed or authorized to do business under the laws of any state or territory of the United States of
America,(v) government bond dealer reporting to,trading with,and recognized as a primary dealer by
the Federal Reserve Bank of New York, (vi) securities dealer approved in writing by the Bondholder
Representative the liquidation of which is subject to the Securities Investors Protection Corporation or
other similar corporation and(vii)any other entity which is acceptable to the Bondholder Representative.
With respect to an entity which provides an agreement held by the Trustee for the investment of moneys at a
guaranteed rate as set out in paragraph(g)of the definition of the term"Permitted Investments"or an entity
DOCSSFI:671618.3
40511-124 J78 14
which guarantees or insures,I as applicable,the agreement, a"Qualified Financial Institution"may also be
a corporation or limited liability company organized under the laws of any state of the United States of
America.
"Person"shall mean any individual,corporation,limited liability company,partnership,joint
venture,estate,trust,unincorporated association, any federal, state,county or municipal government or
any bureau,department or agency thereof and any fiduciary acting in such capacity on behalf of any of
the foregoing.
"Plan"shall mean(i) an employee benefit or other plan established or maintained by the
Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate iliate makes or is obligated
to make contributions and(ii)which is covered by Title IV of ERISA or Section 302 of ERISA or
Section 412 of the Code.
"Pledged Revenues" shall mean the amounts pledged under the Indenture to the payment of the
principal of and premium and interest on the Bonds,consisting of the following: (a)all income,revenues,
proceeds and other amounts to which the Issuer is entitled,derived from or in connection with the Project
and the Bond Documents,including all Monthly Loan Payments due under this Loan Agreement and the
Note and all amounts obtained through the exercise of the remedies provided in the Bond Documents,
subject to limitations on such rights contained therein upon the occurrence of an Event of Default
thereunder and all receipts of the Trustee credited under the provisions of the Indenture against said
amounts payable,and(b)moneys held in the funds and accounts established under the Indenture,together
with investment earnings thereon(except any amounts on deposit in the Expense Fund and the Rebate
Fund).
"Pre-Conversion Loan Equalization Payment"shall mean a partial prepayment of the Loan in
accordance with paragraph 4 of the Commitment in connection with Conversion.
"Prepayment Premium"shall mean the premium,if any,payable in connection with a
prepayment of the Note,as set forth in the Note.
"Proiect"shall mean the Land and Improvements thereon owned by the Borrower and
encumbered by the Mortgage,together with all rights pertaining to such real property and Improvements,
as more particularly described in the Granting Clauses of the Mortgage and referred to therein as the
"Mortgaged Property."
"Proiect Fund"shall mean the fund created pursuant to Section 8.7 of the Indenture.
"Provided Information"shall have the meaning set forth in Section 9.1.1 hereof.
"Purchase Price"shall mean theprice paid by the Borrower for the purchase of Bonds in lieu of
redemption pursuant to Section 6.6 of the Indenture,which shall be equal to the applicable Redemption
Price.
"Oualifted Proiect Costs"shall mean any expenditure(a)to provide facilities and improvements
that constitute part of a qualified residential rental project within the meaning of Section 142(4)of the
Code and(b)that is properly chargeable to the Project's capital account under general federal income tax
principles or that would be so chargeable with a proper election or but for a proper election by the
Borrower to deduct such expenditure,including the following:
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40511-124 J78 15
(a) The cost of labor,materials,machinery and equipment as payable to contractors,,
builders and materialmen in connection with the rehabilitation and equipping of the Project;
(b) Governmental charges levied or assessed during rehabilitation of the Project,or
on any property acquired therefor,and premiums on insurance in connection with the Project
during rehabilitation;
(c) Expenses necessary or incident to determining the feasibility or practicability of
undertaking the Project,the fees and expenses of architects,engineers and management
consultants for making studies,surveys and estimates of costs and of revenues and other
estimates,and fees and expenses of architects and engineers for preparation of plans,drawings
and specifications and for administration of the rehabilitation contract or contracts for the Project,
as well as for the performance of all other duties of architects and engineers in relation to the
acquisition,rehabilitation and equipping of the Project;
(d) Expenses of administration,supervision and inspection properly chargeable to
the Project,costs of development of the Project,legal expenses and fees of the Borrower in
connection with the acquisition,rehabilitation or equipping of the Project(but not the issuance of
the Bonds), cost of abstracts and reports on titles to real estate, owners title insurance premiums,
cost of managing investments of moneys deposited in the funds created hereunder and all other
items of expense,not elsewhere specified in this section incident to the rehabilitation and placing
in operation of the Project;
(e) Interest on the Bonds during acquisition and rehabilitation of the Project and for
up to one year after completion thereof;
(f) Any other cost relating to the Project that is permitted by the Act other than costs
of issuance of the Bonds;and
(g) Reimbursement to the Borrower for any costs described above and paid by the
Borrower,whether before or after the execution of this Indenture by the parties hereto;provided,
however,that reimbursement for any expenditures made prior to the execution of this Indenture
shall only be permitted for expenditures meeting the requirements of applicable Treasury
Regulations,including but not limited to Treasury Regulations Section 1.150-2 or any successor
Treasury Regulations.
"Oualified Proiect Period,"shall have the meaning set forth in the Regulatory Agreement.
"Rating Atzencvll shall mean Standard&Poor's,Moody's,or Fitch,any of which are then rating
the Bonds or the Securities or any other nationally-recognized statistical rating agency then rating the
Bonds or the Securities,which has been approved by the Bondholder Representative.
"Rebate Ana!ystl"shall mean any rebate analyst selected by the Borrower and acceptable to the
Issuer.
"Rebate Analyst Fee"shall mean the fee payable by the Borrower and the Hedge Provider,as
appropriate,to the Rebate Analyst on[July 1] of each year, commencing[July 1,2003], or such other
period as authorized by Bond Counsel,in such amount as shall be agreed to by the Borrower,the Hedge
Provider and the Rebate Analyst.
",Rebate Fund"shall mean the fund created pursuant to Section 8.2 of the Indenture.
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40511-124 J78 16
"Record Date"shall mean the day immediately prior to any Bond Payment Date.
"Redemption Account"shall mean the account created pursuant to Section 8.2 of the Indenture.
"Redemption Price"shall mean the sum of(a)the outstanding principal of the Bonds to be
redeemed,(b)accrued and unpaid interest thereon to the date of redemption, (c)the Prepayment
Premium,if any,with respect to such Bonds,and(d)all other amounts due and payable with respect to
the Bondholders under the Indenture.
"Registered Owners"shall have the meaning set forth in the definition of"Bondholders."
"Regulations"shall mean with respect to the Code,the relevant regulations and proposed
regulations thereunder or any relevant successor provision to such regulations and proposed regulations.
"Regulatory Agreement"shall mean that certain Regulatory Agreement and Declaration of
Restrictive Covenants,dated as of April 1,2003,by and among the Issuer,the Trustee and the Borrower,
as may be amended, supplemented or modified from time to time.
"Related Person"shall mean a"related person"within the meaning of Section 147(a)of the
Code.
"Remarketing Agent"shall mean the remarketing agent appointed by the Bondholder
Representative not less than 30 days prior to a Remarketing Date, and approved by the Issuer.
"Remarketing Agreement"shall mean the agreement entered into by the Remarketing Agent,
the Trustee and the Bondholder Representative at the time a Remarketing Agent is appointed.
"Remarketing Date"has the meaning given such term in Section 4.10(a)of the Indenture.
"Remarketing Expenses"shall mean the costs and expenses incident to remarketing of the
Bonds incurred by the Trustee,the Remarketing Agent and the Issuer,including bond printing and
registration costs,preparation and printing of a remarketing circular,blue sky expenses,reasonable fees
and out-of-pocket expenses of the Trustee,the Issuer,the Remarketing Agent,counsel to the Trustee,
counsel to the Issuer, counsel to the Remarketing Agent and Bond Counsel, costs of funds advanced by
the Remarketing Agent,registration and filing fees,rating agency fees,the fees and expenses of any
entity hired to calculate the rebatable arbitrage,the amount of rebatable arbitrage and other costs and
expenses incurred in connection with or properly attributable to the remarketing of the Bonds.
"Remarketing proceeds Account"shall mean the account created pursuant to Section 8.2 of the
Indenture.
"Rent Roll"shall have the meaning set forth in Section 4.1.26 hereof.
"Rents"shall have the meaning given such term in the Mortgage.
"Repair Agreement"shall mean the Repair Agreement dated as of April 1, 2003 among the
Borrower,the Bondholder Representative and the Servicer relating to the Required Repairs and any
amendments thereto or any replacement thereof.
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40511-124 J78 17
"Resolution" shall mean the resolutions of the governing body of the Issuer authorizing the
issuance of the Bonds and the execution and delivery of the Bond Documents to which it is a party, as
applicable.
"Responsible Officer" shall mean any officer within the Corporate Trust Department(or any
successor group)of the Trustee having responsibility under the Indenture, including an vice
Y president,
assistant vice president, assistant secretary or any other officer or assistant officer of the Trustee
customarily performing functions similar to those performed by the persons who at the time shall be such
officers,respectively,or to whom any corporate trust matter is referred at the Trustee's address set forth
in Section 15.1 of the Indenture.
"Secondary Market Transaction"shall have the meaning set forth in Section 9.1 hereof.
"Securities"shall have the meaning set forth in Section 9.1.1 hereof.
"Securities Act"shall mean the Securities Act of 1933,as amended.
"Securities Depository"shall mean The Depository Trust Company and any substitute for or
successor to such securities depository that shall maintain a Book-Entry System with respect to the
Bonds.
"Securities Depository Nominee" shall mean the Securities Depository or the nominee of such
Securities Depository in whose name the Bonds shall be registered on the registration books of the Issuer
while the Bonds are in a Book-Entry System.
"Series"shall mean a series of Bonds issued under the Indenture.
"Servicer"shall mean GMAC Commercial Mortgage Corporation,a California corporation,or
its successor in interest,or any successor the Servicer contracting with or appointed by the Majority of
Holders to service the Loan.
"Servicer Remittance Date" shall mean the fifteenth(15th)day of each month, commencing
155 20_, or if such day is not a Business Day,the first Business Day thereafter.
"Servicing Agreement"shall mean the Servicing Agreement dated as of April 1,2003 between
the Servicer and the Bondholder Representative relating to the servicing of the Loan and any amendments
thereto or any replacement thereof.
"Stabilization Date" shall mean the date that the Trustee disburses the remaining portion of the
Stabilized Principal Amount,which date shall not be later than [December 1, 2004].
"Stabilized Principal Amount"shall mean the principal amount of the permanent loan,as
determined by GMAC CHCC pursuant to the Permanent Loan Funding Agreement.
"Standard&Poor's" shall mean Standard&Poor's Credit Markets Services, a Division of the
McGraw Hill Companies,Inc., or its successor.
"State" shall mean the State of California.
"Supplemental Indenture"shall mean a supplemental trust indenture entered into in accordance
with and for the purposes set forth in Article XIII of the Indenture.
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40511-124 J78 18
"Tax Agreement" shall mean the Tax Certificate and Agreement by and between the Issuer and
the Borrower,executed in connection with the original issuance and delivery of the Bonds,as amended
and supplemented on the Closing Date,and as it may be supplemented or amended from time to time.
"Taxes" shall mean all real estate and personal property taxes, assessments,water rates or sewer
rents,now or hereafter levied or assessed or imposed against all or part of the Project.
"Term"shall mean the term of this Loan Agreement pursuant to Section 10.30 hereof.
"Title Insurance Policy"shall mean the mortgagee title insurance policy,in form acceptable to
the Bondholder Representative, issued with respect to the Project and insuring the lien of the Mortgage.
"Transfer" shall have the meaning set forth in the Mortgage.
"Trust Estate"shall mean the Trust Estate described in the granting clauses of the Indenture.
"Trustee"shall mean Wells Fargo Bank,National Association and any successor trustee or co-
trustee appointed under the Indenture.
"Trustee's Fees" shall mean an amount equal to [.008%] of the principal amount of the Bonds
Outstanding,payable annually, in advance,on July 1 of each year.
"UCC"shall mean the Uniform Commercial Code as in effect in the State.
"Unassigned Issuer's Rights"shall mean the Issuer's rights to reimbursement and payment of
its fees, costs and expenses and rebatable arbitrage under Section 2.7 of this Loan Agreement,its rights of
access under Section 5.20 hereof,its rights to indemnification under Section 5.19 hereof,its rights to
receive notices,reports and other statements and its rights to consent to certain matters,as provided in the
Indenture and this Loan Agreement.
"Underwriter Group" shall have the meaning set forth in Section 9.1.4 hereof.
"Written Certificate," "Written Direction,""Written Notice,""Written Order"and
"Written Reiistration"shall mean a written certificate,direction,notice,order or requisition signed by
an Authorized Borrower Representative,an Authorized Issuer Representative or an authorized
representative of the Bondholder Representative and delivered to the Trustee,the Bondholder
Representative,the Servicer or such other Person as required under the Bond Documents.
"Yield"' shall mean yield as defined in Section 148(h)of the Code and any regulations
promulgated thereunder.
Section 1.2 Principles of Construction. Unless otherwise specified, (i)all references to
sections and schedules are to those in this Loan Agreement, (ii)the words"hereof,""herein"and
"hereunder"and words of similar import refer to this Loan Agreement as a whole and not to any
particular provision, (iii) all definitions are equally applicable to the singular and plural forms of the terms
defined, (iv)the word"including"means"including but not limited to,"and(v) accounting terms not
specifically defined herein shall be construed in accordance with the Approved Accounting Method.
DOCSSF1:671618.3
40511-124 J78 19
ARTICLE 11
GENTRAL
Section 2.1 Issuance of Bonds. In order to provide funds for the purposes provided herein,
the Issuer has,in accordance with the Act,issued,sold and caused to be delivered to the purchasers
thereof,the Bonds. The proceeds of the sale of the Bonds are to be deposited by the Trustee as provided
in the Indenture. The Issuer and the Borrower expressly reserve the right to enter into,to the extent
permitted by law, an agreement or agreements other than this Loan Agreement with respect to the
issuance by the Issuer under an indenture or indentures other than the Indenture of obligations to provide
funds to refund all or any principal amount of the Bonds.
Section 2.2 Assignment to Trustee. As security for the Bonds,the Issuer has pledged and
assigned to the Trustee under and pursuant to the Indenture(a)the Note and all of its right,title and
interest in and to this Loan Agreement(except for the Unassigned Issuer's Rights)and all revenues and
receipts therefrom and the security therefor(including the Mortgage)and(b)the amounts on deposit from
time to time in the funds established under the Indenture (except the Expense Fund and the Rebate Fund).
All revenues and assets pledged and assigned thereby shall immediately be subject to the lien of such
pledge without any physical delivery thereof or any further act, except in the case of the Note,which shall
be delivered to the Trustee. The Borrower hereby acknowledges and consents to such assignment to the
Trustee.
Section 2.3 Loan of Bond Proceeds;Note. Upon the issuance of the Bonds and deposit under
the Indenture of the proceeds from the sale of the Bonds,the Issuer made the Loan to the Borrower in the
Loan Amount,which shall mature and be payable at the times and in the amounts required under the
terms of the Note. The proceeds of the Loan shall be used by the Borrower to pay Qualified Project Costs
and other costs related to the Project,and for certain other purposes specified in the Indenture. The
Borrower hereby accepts the Loan and acknowledges that the Issuer caused the proceeds of the Bonds to
be deposited with the Trustee in the manner set forth in Section 7.2 of the Indenture and to be applied as
set forth in the Indenture.
The Borrower hereby agrees to execute the Note,as evidence of its obligation to repay the Loan,
and to deliver the Note simultaneously with the delivery of this Loan Agreement to the Issuer. The Note
shall bear interest on the unpaid principal balance thereof at the Note Coupon Rate,calculated on the
basis of a 360-day year consisting of twelve 30-day months. The Issuer shall assign the Note to the
Trustee on the Closing Date for the benefit of the Bondholders,which the Trustee shall accept under the
terms of the Indenture.
Section 2.4 Disbursements: In-vestment of Moneys in Funds.
(a) Moneys in the Project Fund shall be disbursed by the Trustee as provided in
Section 8.7 of the Indenture.
(b) Moneys in the Costs of Issuance Fund shall be disbursed by the Trustee as provided
in Section 8.6 of the Indenture.
(c) Except as otherwise provided in the Indenture and to the extent permitted by law,any
moneys held as a part of the Funds and Accounts under the Indenture shall be invested or
reinvested by the Trustee, at the written direction of the Borrower,in Permitted Investments in
accordance with the provisions of the Indenture.
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Section 2.5 [Reservedj.
Section 2.6 Monthly Loan Payments and Other Payments Under the Note..
(a) The Borrower shall make Monthly Loan Payments in accordance with the Note.
Each payment by the Borrower hereunder or under the Note shall be made in funds settled
through the New York Clearing House Interbank Payments System or other funds immediately
available to the Servicer by 11:00 a.m.,New York City time,on each Monthly Loan Payment
Date or such other date when such payment is due. Each such payment shall be made to the
Servicer by deposit to such account as the Servicer may designate by written notice to the
Borrower. Whenever any payment hereunder or under the Note shall be stated to be due on a day
that is not a Business Day,such payment shall be made on the first Business Day immediately
thereafter.All payments made by the Borrower hereunder or under the other Bond Documents
shall be made irrespective of, and without any deduction for,any set-offs or counterclaims.
* To the extent received by the Servicer on or before the Servicer Remittance Date,the
Servicer will remit to the Trustee,at the Office of the Trustee,the Monthly Loan Payment and
any Additional Payments then due and owing for deposit as provided in Section 8.3 of the
Indenture. Such amounts shall be paid in federal or other immediately available funds,during
normal business hours on or before 10:00 a.m.,Trustee's local time,on the later of each Servicer
Remittance Date or the second Business Day after it receives such payment. The scheduled
amount of Monthly Loan Payments is set forth in the Note. Any Additional Payments shall be in
an amount equal to the fees and expenses due and payable as provided in Section 2.7.
(b) Any moneys of the Borrower held by the Servicer and not remitted or retained
pursuant to subsection(a)above or Section 2.7 of this Loan Agreement,or otherwise required to
be retained by the Servicer for the Project, shall be remitted by the Servicer to the Trustee,at the
Office of the Trustee,for deposit in the Bond Fund pursuant to Section 8.4 of the Indenture. Such
amounts shall be paid in federal or other immediately available funds,during normal business
hours on or before 10:00 a.m.,Trustee's local time,on the later of each Servicer Remittance Date
or the second Business Day after it received such payment.
(c) Except for the interest of the Borrower in the Rebate Fund and the Expense Fund to
the extent provided in the Indenture and any interest of the Borrower as may arise after all Bond
Obligations have been paid or payment thereof provided for in accordance with the Indenture,the
Borrower and the Issuer each acknowledge that neither the Borrower nor the Issuer has any
interest in any moneys deposited in the Funds or Accounts established under the Indenture and
such Funds or Accounts shall be in the custody of and(except the Expense Fund and the Rebate
Fund)held by the Trustee in trust for the benefit of the Bondholders.
(d) The Borrower shall be liable for payment of Monthly Loan Payments and if such
payments are made,the Borrower shall not be liable for payment of the Bonds.
Section 2.7 Additional Payments. The Borrower shall pay to the Servicer on each Monthly
Loan Payment Date,in addition to the Monthly Loan Payment due on such date,the following amounts:
(i) all Late Charges due and payable under the terms of the Note; and
(ii) all reserves and escrow amounts,if any,required to be maintained by the
Servicer under the terms of the Mortgage.
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The Servicer shall remit the amounts paid in paragraph(i)and(ii)above to the Trustee on
each Servicer Remittance Date as provided in Section 8.3 of the Indenture, and shall retain all other
amounts.
The Borrower shall pay to the Trustee on demand the following amounts:
(a) the amount,if any,to be deposited by the Trustee in the Rebate Fund as specified in
Section 8.8 of the Indenture;
(b) all extraordinary fees,charges, costs, advances, indemnities and expenses,including
agent and counsel fees,of the Issuer or the Trustee (above and beyond the Issuer's Fee and the
Trustee's Fee,respectively)incurred under the Indenture, as and when the same become due,
except any such costs and expenses related to the Hedge Agreement,any Cap Agreement or any
Secondary Market Transaction;
(c) all fees,charges and expenses, including agent and counsel fees,incurred in
connection with the issuance of the Bonds,as and when the same become due,to the extent not
paid from the Costs of Issuance Fund; and
(d) all charges,costs,advances,indemnities and expenses,including agent and counsel
fees, of the Issuer incurred by the Issuer at any time in connection with the Bonds or the Project,
including,without limitation,counsel fees and expenses incurred in connection with the
interpretation,performance, enforcement or amendment of the Bond Documents or any other
documents relating to the Project or the Bonds or in connection with questions or other matters
arising under such documents or in connection with any federal or state tax audit;but excluding
any expenses that may be incurred by the Issuer or the Trustee with respect to the Hedge
Agreement, any Cap Agreement or a Secondary Market Transaction,which expenses shall be
paid by the Hedge Provider.
The Borrower shall pay to the party entitled thereto as expressly set forth in this Loan
Agreement or the other Bond Documents:
(A) all expenses incurred in connection with the enforcement of any rights under this
Loan Agreement,the Regulatory Agreement or the Indenture by the Issuer,the Servicer,the
Bondholder Representative,the Trustee or the Bondholder,except any expenses related to the
Hedge Agreement,any Cap Agreement or a Secondary Market Transaction; and
(B) all other payments of whatever nature that the Borrower has agreed to pay or
assume under the provisions of this Loan Agreement,the Indenture or any other Bond Document.
The amounts to be paid in this Section 2.7,together with the expenses payable under Section 5.17 hereof,
are collectively referred to herein as"Additional Payments."
Section 2.8 Initial Deposit; Costs of Issuance Deposit. The Borrower shall have deposited or
shall cause to be deposited with the Trustee on the Closing Date an amount equal to the Initial Deposit.
The Borrower shall deposit or shall cause to be deposited with the Trustee on the Closing Date an amount
equal to the Costs of Issuance Deposit.
Section 2.9 Overdue Payments; Payments if Default. If any Borrower Payment Obligation is
not paid by or on behalf of the Borrower when due hereunder and under the Note,the Borrower shall pay
to the Servicer a Late Charge in the amount and to the extent set forth in the Note. Any such Late Charge
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shall not be deemed to be additional interest or a penalty,but shall be deemed to be liquidated damages
because of the difficulty in computing the actual amount of damages in advance. Late Charges due
hereunder and under the Note shall be secured by the applicable Bond Documents. Any action regarding
the collection of a Late Charge will be without prejudice to any other rights,nor act as a waiver of any
other rights,that the Servicer,the Trustee or the Bondholder Representative may have as provided herein,
at law or in equity.
Monthly Loan Payments shall include interest on the Note payable at the Default Rate as and
when provided in the Note.
Section 2.10 Obligations of the Borrower Absolute and Unconditional.
(a) Subject to Section 11.1 hereof,the obligations of the Borrower under this Loan
Agreement and the Note to make Monthly Loan Payments and Additional Payments on or before
the date the same become due,and to perform all of its other obligations, covenants and
agreements hereunder shall be absolute and unconditional,and shall be paid or performed without
notice or demand,and without abatement, deduction, set-off,counterclaim,recoupment or
defense or any right of termination or cancellation arising from any circumstance whatsoever,
whether now existing or hereafter arising, and irrespective of whether the Borrower's title to the
Proj ect or to any part thereof is defective or nonexistent, and notwithstanding any damage to loss,
theft or destruction of the Project or any part thereof, any failure of consideration or frustration of
commercial purpose,the taking by eminent domain of title to or of the right of temporary use of
all or any part of the Project,legal curtailment of the Borrower's use thereof,the eviction or
constructive eviction of the Borrower, any change in the tax or other laws of the United States of
America,the State or any political subdivision thereof,any change in the Issuer's legal
organization or status, or any default of the Issuer or the Trustee hereunder or under any other
Bond Document,and regardless of the invalidity of any action of the Issuer or the invalidity of
any portion of this Loan Agreement. The Borrower hereby waives the application to it of the
provisions of any statute or other law now or hereafter in effect contrary to any of its obligations,
covenants or agreements under this Loan Agreement or which releases or purports to release the
Borrower therefrom.
(b) Nothing in this Loan Agreement shall be construed to release the Issuer from the
performance of any agreement on its part herein contained or as a waiver by the Borrower of any
rights or claims the Borrower may have against the Issuer under this Loan Agreement or
otherwise,but any recovery upon such rights and claims shall be had from the Issuer separately,it
being the intent of this Loan Agreement that the Borrower shall be unconditionally and absolutely
obligated to perform fully all of its obligations, agreements and covenants under this Loan
Agreement(including the obligation to pay Monthly Loan Payments and Additional Payments)
for the benefit of the Bondholders. The Borrower may, however,at its own cost and expense and
in its own name or in the name of the Issuer,prosecute or defend any action or proceeding or take
any other action involving third persons that the Borrower deems reasonably necessary in order to
secure or protect its right of possession, occupancy and use hereunder,and in such event the
Issuer hereby agrees to cooperate fully with the Borrower and to take all action necessary to
effect the substitution of the Borrower for the Issuer in any such action or proceeding if the
Borrower shall so request.
Section 2.11 Optional Prepayment of Note. The Borrower shall have the option to prepay the
Note as set forth therein, exercisable by written notice to the Trustee, in accordance with Section 6.1 of
the Indenture given at least 20 days prior to the proposed prepayment date,for the purpose of redeeming
all Outstanding Bonds on a permitted redemption date or paying the Bonds at maturity. In connection
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with any such proposed prepayment, the Borrower shall deposit Funds with the Trustee by 10:00 a.m.,
Trustee local time, on the date of prepayment at a prepayment price equal to the outstanding principal
balance of the Note,plus interest on the Note to the date of prepayment and the amount of any
Prepayment Premium,plus any Additional Payments due and payable hereunder through the date of
prepayment,which amounts shall be applied to the redemption of all the Bonds and payment of all
amounts due hereunder. The Borrower shall deliver such certifications and shall satisfy such conditions
as set forth in Section 6.1 of the Indenture with respect to the optional redemption of all Bonds
Outstanding;provided that if the Borrower has deposited all amounts required in the preceding sentence,
the Borrower shall not be liable for any additional amounts due on the Bonds. If the Bonds are not then
callable,the prepayment price set forth above shall be calculated pursuant to Section 14.2 of the
Indenture.
Section 2.12 Mandatory Prepayment of Note. The Borrower shall prepay the outstanding
principal balance of the Note in whole(or in part,if applicable,to a condition or event described herein)
at a prepayment price equal to the outstanding principal balance of the Note prepaid,plus accrued interest
and without Prepayment Premium, for the purpose of redeeming the Bonds as provided in Section 6.3 of
the Indenture,upon the occurrence of any event or condition described below and with the written
consent of the Bondholder Representative:
(a) in whole, if the Project shall have been damaged or destroyed to the extent that it is
not practicable or feasible to rebuild,repair or restore the damaged or destroyed property within
the period and under the conditions described in the Mortgage following such event of damage or
destruction; or
(b) in whole, if title to,or the use of, all or a substantial portion of the Project shall have
been taken under the exercise of the power of eminent domain by any governmental authority
with the result that the Borrower is thereby prevented from carrying on its normal operation of the
Project within the period and under the conditions described in the Mortgage; or
(c) in whole or in part,to the extent that insurance proceeds or proceeds of any
condemnation award with respect to the Project are not applied to restoration of the Project in
accordance with the provisions of the Mortgage.
Such prepayment shall be due and payable by no later than 10:00 a.m.,Trustee local time, on the
date fixed by the Trustee for redemption of the Bonds pursuant to Section 6.3 of the Indenture,which date
shall be communicated by the Trustee in writing to the Issuer,the Bondholders and the Borrower in
accordance with the Indenture.To the extent that the Borrower or the Trustee receive any insurance
proceeds or condemnation awards that are to be applied to the prepayment of the Note, such amounts
shall be applied to the prepayment of the Note and the corresponding redemption of the Bonds.
Section 2.12.2 Amortization of Note. The Note shall amortize and a portion of the
principal thereof shall be paid monthly, as set forth in the Note,for redemption of Bonds pursuant to
Section 6.5 of the Indenture.
Section 2.12.3 Payment of Note at Maturity. The Borrower shall repay the principal
balance of the Note in full,plus accrued interest to the maturity date of the Note as set forth in the
Mortgage. Such repayment shall be due and payable by no later than 10:00 a.m.,Trustee local time,on
the date fixed by the Trustee for redemption of the Bonds pursuant to Section 6.3 of the Indenture.
Section 2.13 Calculation of Interest Payments and Deposits to Reserve Funds. The Issuer and
the Borrower acknowledge that: (a)calculation of all interest payments shall be made by the Servicer or
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the Bondholder Representative,as appropriate; and(b)deposits with respect to Taxes and Other Charges
shall be calculated by the Servicer in accordance with the Mortgage.
Section 2.14 [Reserved].
Section 2.15 Grant of Security Interest: Application of Funds. To the extent not inconsistent
with the Mortgage and as security for payment of the Borrower Payment Obligations and the performance
by the Borrower of all other terms,conditions and provisions of the Bond Documents,the Borrower
hereby pledges and assigns to the Trustee, as assignee of the Issuer, and grants to the Trustee a security
interest in,all the Borrower's right,title and interest in and to all Rents,all payments to or moneys held in
the funds and accounts created and held by the Servicer for the Project. The Borrower and each of its
Affiliates also grants to the Trustee a continuing security interest in,and agrees to hold for the benefit of
the Trustee,all Rents in its possession prior to the payment of Rents or any portion thereof to the
Servicer. The Borrower shall not,without obtaining the prior written consent of the Servicer,further
pledge,assign or grant any security interest in the Rents,or permit any Lien to attach thereto,or any levy
to be made thereon,or any UCC-1 Financing Statements, except those naming the Trustee as the secured
party,to be filed with respect thereto. This Loan Agreement is,among other things,intended by the
parties to be a security agreement for purposes of the UCC. Upon the occurrence and during the
continuance of an Event of Default hereunder,the Servicer may apply or cause to be applied any sums
held by the Servicer with respect to the Project in accordance with the Bond Documents,in any order in
its sole discretion.
ARTICLE III
[RESERVED]
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Borrower Re esentations. The Borrower represents and warrants for the benefit
of the Issuer,the Trustee,the Bond Purchaser,the Bondholder Representative and the Servicer,as of the
date of execution hereof,as follows:
Section 4.1.1 Organization; Special Purpose. The Borrower has been duly organized
and is validly existing and in good standing under the laws of the State,with requisite power and
authority,and all rights,licenses,permits and authorizations,governmental or otherwise,necessary to
own its properties and to transact business in the State. The Borrower is duly qualified to do business and
is in good standing in each jurisdiction where it is required to be so qualified in connection with its
properties,business and operations. The sole business of the Borrower is the ownership,management
and operation of the Project.
Section 4.1.2 Proceedings;Enforceability. The Borrower has taken all necessary
action to authorize the execution,delivery and performance of the Bond Documents to which it is a party.
The Bond Documents to which the Borrower is a party have been duly executed and delivered by the
Borrower and constitute legal,valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their respective terms,subject to applicable bankruptcy,insolvency and
similar laws affecting rights of creditors generally,and general principles of equity.
Section 4.1.3 No Conflicts. The execution,delivery and performance of the Bond
Documents by the Borrower will not conflict with or result in a breach of any of the terms or provisions
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of,or constitute a default under, or result in the creation or imposition of any Lien(other than pursuant to
the Bond Documents)upon any of the Project of the Borrower pursuant to the terms of,any agreement or
instrument to which the Borrower is a party or by which its property is subject(including,but limited to,
the Ground Lease,if any),nor will such action result in any violation of the provisions of any statute or
any order,rule or regulation of any Governmental Authority having jurisdiction over the Borrower or any
of its properties. The Borrower's rights under the Licenses and the Management Agreement will not be
adversely affected by the execution and delivery of the Bond Documents,the Borrower's performance
thereunder,the recordation of the Mortgage, or the exercise of any remedies by the Servicer,the Trustee
or the Bondholder Representative. Any consent, approval, authorization,order,registration or
qualification of or with any Governmental Authority required for the execution, delivery and performance
by the Borrower of the Bond Documents has been obtained and is in full force and effect.
Section 4.1.4 Litigation.ation. Except as otherwise disclosed in the Borrower's Certificate,
there are no actions, suits or other proceedings at law or in equity by or before any Governmental
Authority now pending or,to the best knowledge of the Borrower,threatened against or affecting the
Borrower,Borrower Controlling Entity,the Manager or the Project, which,if adversely determined,
might materially adversely affect the condition(financial or otherwise)or business of the Borrower,
Borrower Controlling Entity,Manager or the condition or ownership of the Project.
Section 4.1.5 .Agreements. Except as contemplated by the Bond Documents, the
Borrower is not a party to any agreement or instrument or subject to any restriction that could materially
adversely affect the Borrower or the Project, or the Borrower's business,properties, operations or
condition,financial or otherwise. The Borrower is not in default in any material respect in the
performance,observance or fulfillment of any of the obligations,covenants or conditions contained in any
Permitted Encumbrance or any other agreement or instrument to which it is a party or by which it or the
Project is bound.
Section 4.1.6 Title. The Borrower has good title to the Project,free and clear of all
Liens except the Permitted Encumbrances. The Mortgage,when properly recorded in the appropriate
records,together with any UCC financing statements required to be filed in connection therewith,will
create(i) a valid,perfected first priority lien on the fee interest in the Project and(ii)perfected security
interests in and to, and perfected collateral assignments of,all personalty included in the Project
(including the Leases),all in accordance with the terms thereof,in each case subject only to any
applicable Permitted Encumbrances. The Permitted Encumbrances do not materially adversely affect the
value or use of the Project,or the Borrower's ability to repay the Loan. Except as otherwise disclosed in
the Borrower's Certificate,there are no delinquent real property taxes or assessments,including water and
sewer charges,with respect to the Project or claims for payment for work,labor or materials affecting the
Project which are or may become a Lien prior to, or of equal priority with,the Liens created by the Bond
Documents.
Section 4.1.7 Survey. To the best knowledge of the Borrower,the survey for the
• Proj ect delivered to the Bond Purchaser does not fail to reflect any material matter affecting the Project or
the title thereto.
Section 4.1.8 No Bankruptcy Filing. The Borrower is not contemplating either the
filing of a petition by it under any state or federal bankruptcy or insolvency law or the liquidation of all or
a major portion of its property(a"Bankruptcy Proceeding"), and the Borrower has no knowledge of any
Person contemplating the filing of any such petition against it. Except as previously disclosed,neither the
Borrower nor the Co-General Partner nor any principal nor Affiliate of either has been a party to,or the
sub.ect of a Bankruptcy Proceeding. The Borrower has the ability to pay its debts as they become due.
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Section 4.1.9 Full and Accurate Disclosure. No statement of fact made by the
Borrower in any Bond Documents contains any untrue statement of a material fact or omits to state any
material fact necessary to make statements contained therein not misleading. There is no fact or
circumstance presently known to the Borrower that has not been disclosed to the Bond Purchaser and
Bondholder Representative which materially and adversely affects or, as far as the Borrower can foresee,
might materially and adversely affect,the Project or the business, operations or condition(financial or
otherwise)of the Borrower,or the Borrower's ability to meet its obligations under this Loan Agreement
or the other Bond Documents to which it is a party in a timely manner.
Section 4.1.10 No Plan Assets. The Borrower is not an"employee benefitP lan,"as
defined in Section 3(3)of ERISA, subject to Title I of ERISA, and none of the assets of the Borrower
constitutes or will constitute "plan assets"of one or more such plans within the meaning of 29 C.F.R.
Section 2510.3-101.
Section 4.1.11 Compliance. The Borrower and the Project and the use thereof comply
in all material respects with all applicable Legal Requirements. The Borrower is not in default or
violation of any order,writ,injunction,decree or demand of any Governmental Authority,the violation of
which might materially adversely affect the condition(financial or otherwise)or business of the
Borrower. There has not been and shall never be committed by the Borrower or any Affiliate involved
with the operation or use of the Project any act or omission affording any Governmental Authority the
right of forfeiture as against the Project or any part thereof or any moneys paid in performance of the
Borrower's obligations under any Bond Document.
Section 4.1.12 Contracts. There are no service,maintenance or repair contracts
affecting the Project that are not terminable on one month's notice or less without cause and without
penalty or premium that would materially adversely affect the Borrower's ability to perform its obligation
under the Bond Documents. All service,maintenance or repair contracts affecting the Project have been
entered into at arm's length in the ordinary course of the Borrower's business and provide for the
payment of fees in amounts and upon terms comparable to existing market rates.
Section 4.1.13 Financial Information. All financial data,including any statements of
cash flow and income and operating expense,that have been delivered to the Bond Purchaser and the
Bondholder Representative in respect of the Project by or on behalf of the Borrower,to the best
knowledge of the Borrower,(i)are true,complete and correct in all material respects, (ii)accurately
represent the financial condition of the Project as of the date of such reports, and(iii)to the extent
prepared by an independent certified public accounting firm,have been prepared in accordance with the
Approved Accounting Method consistently applied throughout the periods covered, except as disclosed
therein. The Borrower has no contingent liabilities,liabilities for taxes(except as otherwise disclosed in
the Borrower's Certificate),unusual forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments. Since the date of such financial statements,there has been no
material adverse change in the financial condition,operations or business of the Borrower from that set
forth in said financial statements.
Section 4.1.14 Condemnation. No Condemnation or other proceeding has been
commenced or,to the Borrower's knowledge after diligent inquiry, is contemplated,threatened or
pending with respect to all or part of the Project or for the relocation of roadways providing access to the
Prod ect.
Section 4.1.15 Federal Reserve Regulations. No part of the proceeds of the Loan will
be used for the purpose of purchasing or acquiring any"margin stock"within the meaning of Regulation
U of the Board of Governors of the Federal Reserve System or for any other purpose that would be
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inconsistent with such Regulation U or any other regulation of such Board of Governors, or for any
purpose prohibited by Legal Requirements or any Bond Document.
Section 4.1.16 Utilities and Public Access. The Project is served by water, sewer,
sanitary sewer and storm drain facilities adequate to service it for its intended uses. All public utilities
necessary or convenient to the full use and enjoyment of the Project are located in the public right-of-way
abutting the Project,and all such utilities are connected so as to serve the Project without passing over
other property absent a valid easement. All roads necessary for the use of the Project for its current
purpose have been completed and dedicated to public use and accepted by all Governmental Authorities.
The Project does not share ingress and egress through an easement or private road or share on-site or off-
site recreational facilities and amenities that are not located on the Project and under the exclusive control
of the Borrower,or where there is shared ingress and egress or amenities,there exists an easement or joint
use and maintenance agreement under which(i)access to and use and enjoyment of the easement or
private road and/or recreational facilities and amenities is perpetual, (ii)the number of parties sharing
such easement and/or recreational facilities and amenities must be specified, (iii)the Borrower's
responsibilities and share of expenses are specified,and(iv)the failure to pay any maintenance fee with
result of an easement will not result in a loss of usage of the easement.
Section 4.1.17 Not a Foreignn Person. The Borrower is not a"foreign person"within the
meaning of§1445(f)(3)of the Code.
Section 4.1.18 Separate Lots. Each parcel comprising the Project is a separate tax lot
and is not a portion of any other tax lot that is not a part of the Project.
Section 4.1.19 Assessments. There are no pending or proposed special or other
assessments for public improvements or otherwise affecting the Project,or any contemplated
improvements to the Project that may result in such special or other assessments.
Section 4.1.20 Enforceability. The Bond Documents and,if applicable,the Ground
Lease are not subject to, and the Borrower has not asserted, any right of rescission, set-off,counterclaim
or defense,including the defense of usury.
Section 4.1.21 Insurance. The Borrower has obtained the insurance required by
Section 7.1 hereof and has delivered to the Bondholder Representative copies of insurance policies or
certificates of insurance reflecting the insurance coverages, amounts and other requirements set forth in
this Loan Agreement and the Mortgage.
Section 4.1.22 Use of Property; Licenses. The Project is used exclusively as a
multifamily residential rental dwelling and other appurtenant and related uses,which use is consistent
with the zoning classification for the Project. All certifications,permits,licenses and approvals,including
certificates of completion and occupancy permits required for the legal use,occupancy and operation of
the Project(collectively,the"Licenses"),have been obtained and are in full force and effect or will be
obtained prior to the date required therefor. The use being made of the Project is in conformity with the
certificate of occupancy issued for the Project. Except as otherwise disclosed in the title insurance policy
obtained with respect to the Project or in the related survey,the Project does not violate any density or
building setback requirements of the applicable zoning law. No proceedings are pending or threatened
that would result in a change of the zoning of the Project.
Section 4.1.23 Flood Zone. Except as otherwise disclosed on the Survey provided to
the Bondholder Representative prior to the Closing Date,none of the Improvements are located in an area
as identified by the Federal Emergency Management Agency as an area having special flood hazards.
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Section 4.1.24 Physical Condition. The Project,including all Improvements,parking
facilities, systems, fixtures,Equipment and landscaping,are or, after completion of the rehabilitation and
repairs,will be in good and habitable condition in all respects and in good order and repair in all material
respects; after completion of rehabilitation and repairs,no structural or other material defect or damages
to the Project will exist, whether latent or otherwise;there exists no unrepaired damage to, or unrestored
portion of,the Project from fire or other casualty; and there are no deficiencies in the repair or
maintenance of the Project that threaten the health and safety of its tenants and their invited guests. The
Borrower has not received notice from any insurance company or bonding company of any defect or
inadequacy in the Project, or any part thereof,which would adversely affect its insurability or cause the
imposition of extraordinary premiums or charges thereon or any termination of any policy of insurance or
bond. The physical configuration of the Project is not in material violation of the Americans with
Disabilities Act,if required under applicable law.
Section 4.1.25 Encroachments. Except as otherwise disclosed on the Survey, all of the
Improvements included in determining the appraised value of the Project lie wholly within the boundaries
and building restriction lines of the Project,and no improvement on an adjoining property encroaches
upon the Project, and no easement or other encumbrance upon the Project encroaches upon any of the
Improvements, so as to affect the value or marketability of the Project,except those insured against by the
Title Insurance Policy.
Section 4.1.26 Leases. A true,correct and complete rent roll for the Project(the"Rent
Roll")as of the Closing Date has been delivered to the Bondholder Representative,which,to the best
knowledge of the Borrower,includes all Leases affecting the Project and accurately states the actual
leased unit rents for the Project. Except as has otherwise been disclosed to the Bondholder
Representative, (i) each Lease is in full force and effect; (ii)the tenants under the Leases have accepted
possession of and are in occupancy of all of their respective demised premises,have commenced the
payment of rent under the Leases, and there are no offsets,claims or defenses to the enforcement thereof;
(iii)the rent payable under each Lease is the amount of fixed rent set forth in the Rent Roll, and there is
no claim or basis for a claim by the tenant thereunder for an adjustment to the rent; (iv)no tenant has
made any claim against the landlord under any Lease which remains outstanding,there are no defaults on
the part of the landlord under any Lease,and no event has occurred which,with the giving of notice or
passage of time,or both,would constitute such a default; (v)the Borrower is the sole owner of the entire
lessor's interest in each Lease,(vi)each Lease is the valid,binding and enforceable obligation of the
Borrower and the applicable tenant thereunder, (vii)no Person has any possessory interest in,or right to
occupy,the Project except under the terms of the Lease, and(viii)each Lease will be subordinate to the
Bond Documents. To the Borrower's knowledge, (a)the Borrower is not in material default under any of
the leases; (b)the Borrower has no knowledge of any notice of termination or material default by the
Borrower with respect to any lease; (c)the Borrower has not assigned or pledged any of the leases,the
rents or any interests therein except to the Issuer; (d)no tenant or other party has an option to purchase all
or any portion of the Project; (e)not more than 5%of the tenants have the right to terminate their lease
prior to expiration of the stated term of such lease except as provided by law; and(f)not more than 5%of
the tenants have prepaid more than one month's rent in advance(except for bona fide security deposits
not in excess of an amount equal to two month's rent).
Section 4.1.27 Filing and Recording Taxes. All transfer taxes, deed stamps,intangible
taxes or other amounts in the nature of transfer taxes required to be paid by any Person under applicable
Legal Requirements in connection with the transfer of the Project to the Borrower have been paid. All
mortgage,mortgage recording, stamp,intangible or other similar taxes required to be paid by any Person
under applicable Legal Requirements in connection with the execution,delivery,recordation,filing,
registration,perfection or enforcement of any of the Bond Documents have been paid.
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Section 4.1.28 Investment Company Act. The Borrower is not(i)an"investment
company"or a company"controlled"by an"investment company,"within the meaning of the Investment
Company Act of 1940,as amended; (ii)a"holding company"or a"subsidiary company"of a"holding
company"or an"affiliate"of either a"holding company" or a"subsidiary company"within the meaning
of the Public Utility Holding Company Act of 1935, as amended; or(iii)subject to any other federal or
state law or regulation which purports to restrict or regulate its ability to borrow money.
Section 4.1.29 Fraudulent Transfer. The Borrower has not accepted the Loan or entered
into any Bond Document with the actual intent to hinder, delay or defraud any creditor, and the Borrower
has received reasonably equivalent value in exchange for its obligations under the Bond Documents.
Giving effect to the transactions contemplated by the Bond Documents,the fair saleable value of the
Borrower's assets exceeds and will,immediately following the execution and delivery of the Bond
Documents,exceed the Borrower's total liabilities, including subordinated,unliquidated,disputed or
contingent liabilities. The fair saleable value of the Borrower's assets is and will,immediately following
the execution and delivery of the Bond Documents,be greater than the Borrower's probable liabilities,
including the maximum amount of its contingent liabilities or its debts as such debts become absolute and
matured. The Borrower's assets do not and, immediately following the execution and delivery of the
Bond Documents will not,constitute unreasonably small capital to carry out its business as conducted or
as proposed to be conducted.The Borrower does not intend to, and does not believe that it will,incur
debts and liabilities(including contingent liabilities and other commitments)beyond its ability to pay
such debts as they mature(taking into account the timing and amounts to be payable on or in respect of
obligations of the Borrower).
Section 4.1.30 Ownership of the Borrower. Except as set forth in the Partnership
Agreement of the Borrower,the Borrower has no obligation to any Person to purchase,repurchase or
issue any ownership interest in it.
Section 4.1.31 Management Agreement.. The Management Agreement is in full force
and effect. There is no default,breach or violation existing thereunder, and no event has occurred(other
than payments due but not yet delinquent)that,with the passage of time or the giving of notice,or both,
would constitute a default,breach or violation thereunder,by either party thereto. The fees due under the
Management Agreement and the terms and provisions of the Management Agreement are subordinate to
the Bond Documents.
Section 4.1.32 Environmental Matters. Except as otherwise disclosed in the
environmental reports delivered to the Bondholder Representative prior to the Closing Date, at all times
during the period the Borrower owns or is in possession of the Project and,to the best knowledge of the
Borrower,during any period prior to its acquisition of the Project,the Project has not and will not be in
violation of any Legal Requirement pertaining to or imposing liability or standards of conduct concerning
environmental regulation, contamination or clean-up, and will comply with covenants and requirements
relating to environmental hazards as set forth in the Mortgage. The Borrower will execute and deliver the
Agreement of Environmental Indemnification.
Section 4.1.33 Name;Principal Place of Business. The Borrower does not use and will
not use any trade name, and has not done and will not do business under any name other than its actual
name set forth herein. The principal place of business of the Borrower is its primary address for notices
as set forth in Section 10.2,and the Borrower has no other place of business, other than the Project and
such principal place of business.
Section 4.1.34 Subordinated Debt. Except for certain indebtedness to Affiliates of the
Borrower,as contemplated in the Borrower's Partnership Agreement,there is no indebtedness with
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respect to the Project or any residual interest therein,whether secured or unsecured,other than Permitted
Encumbrances and the permitted indebtedness described in Section 6.8.
Section 4.1.35 Filing of Taxes. The Borrower and each Borrower partner has filed(or
has obtained effective extensions for filing) all federal,state and local tax returns required to be filed and
have paid or made adequate provision for the payment of all federal, state and local taxes,charges and
assessments,if any,payable by the Borrower and each Borrower partner,respectively.
Section 4.1.36 General Tax. All representations,warranties and certifications of the
Borrower set forth in the Tax Agreement and the Regulatory Agreement are incorporated by reference
herein and the Borrower will comply with such as if set forth herein.
Section 4.1.37 Approval of the Indenture. By its execution and delivery of this Loan
Agreement,the Borrower approves the form and substance of the Indenture and the execution thereof by
the Issuer and the Trustee,and agrees to carry out the responsibilities and duties specified in the Indenture
to be carried out by the Borrower. The Borrower acknowledges that(a)it understands the nature and
structure of the transactions relating to the financing of the Project, (b)it is familiar with the provisions of
all of the Bond Documents and other documents and instruments relating to the financing, (c)it
understands the risks inherent in such transactions,including without limitation the risk of loss of the
Project,and(d)it has not relied on the Issuer,the Trustee,the Bondholder Representative or the Servicer
for any guidance or expertise in analyzing the financial or other consequences of the transactions
contemplated by the Bond Documents or otherwise relied on the Issuer,the Trustee,the Bondholder
Representative or the Servicer in any manner.
Section 4.1.38 Single Tax Parcel. The Project consists of property identified as all of a
single tax parcel or,if identified as multiple tax parcels,the Project constitutes the entirety of those tax
parcels. Any tax parcel or parcels within which the Project is located does not include property that is not
subject to the Mortgage.
Section 4.1.39 Utilities. All necessary utilities are,or prior to the completion of the
rehabilitation of the Project will be, available to the Project in adequate supply.
Section 4.1.40 Requirements of Act and Code. The Project satisfies all requirements of
the Act and the Code with respect to multifamily rental housing.
Section 4.1.41 Requirements of Regulatory Agreement. The Project is, as of the
delivery date of the Bonds,in compliance with all requirements of the Regulatory Agreement to the
extent such requirements are applicable on the delivery date of the Bonds; and the Borrower intends to
cause the residential units in the Project to be rented or available for rental on a basis which satisfies the
requirements of the Regulatory Agreement,including all applicable requirements of the Act and the Code,
and pursuant to leases which comply with all applicable laws.
Section 4.1.42 Intention to Hold Protect. The Borrower intends to hold the Project for
its own account and has no current plans, and has not entered into any agreement,to sell the Project or
any part of it; and the Borrower intends to cause the Project to be occupied and to operate it or cause it to
be operated at all times during the term of this Loan Agreement in compliance with the terms of the
Regulatory Agreement and does not know of any reason why the Project will not be so used by it in the
absence of circumstances not now anticipated by it or totally beyond its control.
Section 4.1.43 Consent of.Bondholder Representative. By its execution and delivery of
this Loan Agreement,the Borrower acknowledges and consents to the appointment of GMAC CHCC as
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the initial Bondholder Representative and to Section 15.5 of the Indenture and all other provisions of the
Indenture that confer rights upon the Bondholder Representative, including,but not limited to,the right to
control the exercise of all remedies under Article XI thereof and Article VIII hereof.
Section 4.2 .Issuer Representations. The Issuer makes the following representations as the
basis for the undertakings on its part herein contained:
(a) The Issuer is a duly organized political subdivision of the State and validly existing
under the laws of the State. The Issuer has authorized the execution and delivery of this Loan
Agreement and the Indenture.
(b) The Issuer has determined that the Loan will enable the Borrower to finance a portion
of the Project in furtherance of the purposes of the Act,and will serve the public purposes of the
Act referenced in the Resolution.
(c) The Issuer has complied with the laws of the State,including the Act, and has full
power and authority to consummate all transactions contemplated by this Loan Agreement,the
Bonds and the Indenture and any and all other agreements relating thereto.
Section 4.3 Survival of'Representations and Covenants. All of the representations and
warranties in Section 4.1,4.2,Article V and Article VI hereof and elsewhere in the Bond Documents(i)
shall survive for so long as any portion of the Borrower Payment Obligations remains due and owing and
(ii) shall be deemed to have been relied upon by the Servicer,the Trustee,the Bondholder Representative
and the Bondholders notwithstanding any investigation heretofore or hereafter made by the Servicer, the
Trustee or the Bondholders or on its behalf,provided,however,that the representations,warranties and
covenants set forth in Section 4.1.32 and 5.10 shall survive in perpetuity and shall not be subject to the
exculpation provisions of Section 11.1.
ARTICLE V
AFFIRMATIVE COVENANTS
During the term of this Loan Agreement,the Borrower hereby covenants and agrees with the
Bondholders,the Trustee,the Issuer and the Servicer that:
Section 5.1 Existence. The Borrower shall(i)do or cause to be done all things necessary to
preserve,renew and keep in full force and effect its existence,rights, and franchises,(ii)continue to
engage in the business presently conducted by it, (iii)obtain and maintain all Licenses,and(iv)qualify to
do business and remain in good standing under the laws of each jurisdiction,in each case as and to the
extent required for the ownership,maintenance,management and operation of the Project.
Section 5.2 Taxes and Other Charges. The Borrower shall pay all Taxes and Other Charges
as the same become due and payable in accordance with the Mortgage.
Section 5.3 Repairs;Maintenance and Compliance. The Borrower shall cause the Project to
be maintained in a good,habitable and safe(so as to not threaten the health or safety of the Project's
tenants or their invited guests)condition and repair as set forth in the Mortgage and shall not remove,
demolish or materially alter the Improvements or Equipment(except for removal of aging or obsolete
equipment or furnishings in the normal course of business),except as provided in the Mortgage.
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Section 5.4 Litigation. The Borrower shall give prompt written notice to the Servicer,the
Trustee and the Bondholder Representative of any litigation, governmental proceedings or claims or
investigations regarding an alleged actual violation of a Legal Requirement pending or threatened against
the Borrower which might materially adversely affect the Borrower's condition(financial or otherwise)or
business or the Project.
Section 5.5 Performance of Other Agreements. The Borrower shall observe and perform
each and every term to be observed or performed by it pursuant to the terms of any agreement or
instrument affecting or pertaining to the Project.
Section 5.6 Notices. The Borrower shall promptly advise the Servicer,the Trustee,the Issuer
and the Bondholder Representative of(i)any material adverse change in the Borrower's condition,
financial or otherwise,other than general changes in the real estate market,(ii)any fact or circumstance
affecting the Borrower or the Project that materially and adversely affects the Borrower's ability to meet
its obligations hereunder or under any Bond Document to which it is a party in a timely manner, or
(iii)the occurrence of any Default or Loan Agreement Default of which the Borrower has knowledge.
The Borrower shall cause to be delivered to the Servicer,the Trustee,the Bondholder Representative and,
upon its request,the Issuer any Securities and Exchange Commission or other public filings, if any,of the
Borrower, the Manager or the Co-General Partner within two(2)business days of such filing.
Section 5.7 Cooperate in Legal Proceed in s. The Borrower shall cooperate fully with the
Servicer,the Trustee and the Bondholder Representative with respect to,and permit the Servicer,the
Trustee and the Bondholder Representative, at their option,to participate in,any proceedings before any
Governmental Authority that,may in any way affect the rights of Bondholders under any Bond Document.
Section 5.8 Further Assurances. The Borrower shall,at the Borrower's sole cost and expense
(except as provided in Section 9.1 hereof), (i) furnish to the Servicer and the Bondholder Representative
all instruments, documents,boundary surveys, footing or foundation surveys,certificates,plans and
specifications,appraisals,title and other insurance reports and agreements,reasonably requested by the
Servicer or the Bondholder Representative; (ii)execute and deliver to the Servicer such documents,
instruments,certificates, assignments and other writings,and do such other acts necessary or desirable,to
evidence,preserve and/or protect the collateral at any time securing or intended to secure the Bonds,as
the Servicer or the Bondholder Representative may reasonably require from time to time; (iii)do and
execute all and such further lawful and reasonable acts,conveyances and assurances for the better and
more effective carrying out of the intents and purposes of the Bond Documents, as the Servicer or the
Bondholder Representative shall reasonably require from time to time and(iv)upon the Servicer's or
Bondholder Representative's request therefor given from time to time after the occurrence of any Default
or Loan Agreement Default pay for(a)reports of UCC, federal tax lien, state tax lien,judgment and
pending litigation searches with respect to the Borrower and(b) searches of title to the Project, each such
search to be conducted by search firms reasonably designated by the Servicer or the Bondholder
Representative in each of the locations reasonably designated by the Servicer or the Bondholder
Representative.
Section 5.9 Delivery of Financial Infonnation. After notice to the Borrower of a Secondary
Market Transaction,the Borrower shall,concurrently with any delivery to the Servicer, deliver copies of
all financial information required under the Mortgage to the Rating Agencies,the Bondholder
Representative, any trustee or any other party reasonably requested by the Bondholder Representative.
Section 5.10 Environmental Matters. So long as the Borrower owns or is in possession of the
Project,the Borrower shall (a)keep the Project in compliance with all Hazardous Materials Laws,
(b)promptly notify the Servicer,the Trustee and the Bondholder Representative if the Borrower shall
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become aware that any Hazardous Materials(as defined in the Mortgage)are on or near the Project in
violation of Hazardous Materials Laws, and(c)commence and thereafter diligently prosecute to
completion all remedial work necessary with respect to the Project,in each case as set forth in the
Mortgage.
Section 5.11 Title to the Project. The Borrower will warrant and defend the title to the
Project,and the validity and priority of the Lien of the Mortgage, subject only to Permitted
Encumbrances,against the claims of all Persons.
Section 5.12 [Reserved.]
Section 5.13 Estoppel Statement.The Borrower shall furnish to the Servicer for the benefit of
the Issuer,the Trustee,the Bondholder Representative and the Servicer,within ten days after request by
the Servicer,with a statement,duly acknowledged and certified, setting forth(i)the unpaid principal of
the Note,(ii)the Note Coupon Rate, (iii)the date installments of interest and/or principal were last paid,
(iv) any offsets or defenses to the payment of the Borrower Payment Obligations,and(v)that the Bond
Documents are valid,legal and binding obligations and have not been modified or if modified, giving
particulars of such modification. The Borrower shall furnish to the Servicer, (A)within ten days of a
request by the Servicer, a certificate reaffirming all representations and warranties of the Borrower set
forth in the Bond Documents as of the date requested by the Servicer or,to the extent of any changes to
any such representations and warranties, stating the changes and(B)within 30 days of a request by the
Servicer,tenant estoppel certificates from each commercial tenant at the Project in form and substance
reasonably satisfactory to the Servicer;provided that the Servicer shall not make such requests more
frequently than twice in any year. From time to time upon the reasonable request of the Servicer,the
Borrower will endeavor to receive from any Ground Lessor estoppel certificates in form and substance as
reasonably requested by the Servicer.
Section 5.14 [.Reserved.
Section 5.15 [Reserved.]
Section 5.16 [Reserved.]
Section 5.17 Expenses. Except as provided in Sections 2.7(d), 9.1 and 10.30 of this Loan
Agreement and Section 4.10(h)(i)of the Indenture,the Borrower shall pay all expenses incurred by the
Issuer,the Trustee,the Servicer and the Bondholder Representative in connection with the Bonds,
including reasonable fees and expenses of the Issuer's,the Trustee's,the Servicer's or the Bondholder
Representative's attorneys, environmental,engineering and other consultants,and fees,charges or taxes
for the recording or filing of Bond Documents. Except as provided in Sections 2.7(d)and 9.1 of this
Loan Agreement,the Borrower shall pay all expenses of the Issuer,the Trustee,the Servicer and the
Bondholder Representative in connection with the issuance or administration of the Bonds, including
audit costs,inspection fees,settlement of condemnation and casualty awards, and premiums for title
insurance and endorsements thereto. The Borrower shall,upon request,promptly reimburse the Issuer,
the Trustee,the Servicer and the Bondholder Representative for all amounts expended, advanced or
incurred by the Issuer,the Trustee,the Servicer and the Bondholder Representative to collect the Note, or
to enforce the rights of the Issuer,the Trustee,the Servicer and the Bondholder Representative under this
Loan Agreement or any other Bond Document(except the Hedge Agreement or any Cap Agreement),or
to defend or assert the rights and claims of the Issuer,the Trustee,the Servicer and the Bondholder
Representative under the Bond Documents(except the Hedge Agreement or any Cap Agreement)or with
respect to the Project(by litigation or other proceedings),which amounts will include all court costs,
attorneys' fees and expenses,fees of auditors and accountants,and investigation expenses as may be
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incurred by the Issuer,the Trustee,the Servicer and the Bondholder Representative in connection with
any such matters(whether or not litigation is instituted),together with interest at the Default Rate on each
such amount from the date of disbursement until the date of reimbursement to the Issuer, the Trustee,the
Servicer and the Bondholder Representative,all of which shall constitute part of the Loan and shall be
secured by the Bond Documents. The obligations and liabilities of the Borrower under this Section 5.17
shall survive the Term of this Loan Agreement and the exercise by the Issuer,the Servicer,the
Bondholder Representative or the Trustee as the case may be of any of its rights or remedies under the
Bond Documents,including the acquisition of the Project by foreclosure or a conveyance in lieu of
foreclosure.
10
Section 5.18 o Inde To the fullest extent permitted by law,the Borrower agrees to
indemnify,hold harmless and defend the Issuer,the Bondholder Representative,the Servicer and the
Trustee and each of their respective officers, governing members,directors,officials,employees,
attorneys and agents, and,with respect to the Issuer,its program participants(each an"Indemnified
Party"),against any and all losses,damages,claims,actions,liabilities,costs and expenses of any
conceivable nature,kind or character(including,without limitation,reasonable attorneys' fees,litigation
and court costs, amounts paid in settlement and amounts paid to discharge judgments)(hereinafter,the
"Liabilities")to which the Indemnified Parties,or any of them,may become subject under federal or state
securities laws or any other statutory law or at common law or other-wise,to the extent arising out of or
based upon or in any way relating to:
(i) the Bond Documents or the execution or amendment thereof or in
connection with transactions contemplated thereby, including the issuance,sale,transfer
or resale of the Bonds,except with respect to any Secondary Market Transaction(other
than any Borrower's obligation under Article D );
(ii) any act or omission of the Borrower or any of its agents,contractors,,
servants,employees or licensees in connection with the Loan or the Project,the operation
of the Project,or the condition,environmental or otherwise,occupancy,use,possession,
conduct or management of work done in or about,or from the planning, design,
acquisition,installation or rehabilitation of,the Project or any part thereof;
(iii) any lien(other than a Permitted Encumbrance) or charge upon payments
by the Borrower to the Issuer and the Trustee hereunder, or any taxes(including,without
limitation,all ad valorem taxes and sale's taxes),assessments,impositions and other
charges imposed on the Issuer or the Trustee in respect of any portion of the Project;
(iv) any violation of any environmental law,rule or regulation with respect
to,or the release of any toxic substance from,the Project or any part thereof prior to the
date the Borrower acquired the Project and during the period that the Borrower owns the
Project or is in possession thereof;
(v) the enforcement of,,or any action taken by the Issuer,the Trustee or the
Bondholder Representative related to remedies under,this Loan Agreement,the
Indenture and the other Bond Documents relating to a default by the Borrower;
(vi) the defeasance and/or redemption, in whole or in part,of the Bonds;
(vii) any untrue statement or misleading statement or alleged untrue statement
or alleged misleading statement of a material fact regarding Borrower or the Project
contained in any offering statement or document for the Bonds or any of the Bond
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40511-124 J78 35
Documents to which the Borrower is a party, or any omission or alleged omission from
any offering statement or document for the Bonds of any material fact necessary to be
stated therein in order to make the statements made therein regarding the Borrower or the
Project,in the light of the circumstances under which they were made,not misleading;
(viii) the Trustee's acceptance or administration of the trust of the Indenture,
or the Trustee's exercise or performance of or failure to exercise or perform any of its
powers or duties thereunder or under any of the Bond Documents to which it is a party;
except(a)in the case of the foregoing indemnification of the Bondholder Representative,the Servicer and
the Trustee or any related Indemnified Party,to the extent such damages are caused by the negligence or
willful misconduct of such Indemnified Party; or(b)in the case of the foregoing indemnification of the
Issuer or any related Indemnified Party,to the extent such damages are caused by the willful misconduct
of such Indemnified Party. Notwithstanding anything herein to the contrary,the Borrower shall have no
obligation for any losses,damages,claims, actions,liabilities,costs and expenses of any Indemnified
Party relating to the Hedge Agreement or any Cap Agreement and the Borrower's indemnification
obligations with respect to any securitization or Secondary Market Transaction or otherwise relating to
the Securities described in Article IX hereof shall be limited to the indemnity set forth in Section 9.1.4
hereof. In the event that any action or proceeding is brought against any Indemnified Party with respect
to which indemnity may be sought hereunder,the Borrower,upon written notice from the Indemnified
Party, shall assume the investigation and defense thereof,including the employment of counsel approved
by the Indemnified Party, and shall assume the payment of all expenses related thereto,with full power to
litigate, compromise or settle the same in its sole discretion;provided that the Indemnified Party shall
have the right to review and approve or disapprove any such compromise or settlement. Each
Indemnified Party shall have the right to employ separate counsel in any such action or proceeding and to
participate in the investigation and defense thereof. The Borrower shall pay the reasonable fees and
expenses of such separate counsel;provided,however,that such Indemnified Party may only employ
separate counsel at the expense of the Borrower if in such Indemnified Party's good faith judgment a
conflict of interest exists by reason of common representation or if all parties commonly represented do
not agree as to the action(or inaction)of counsel.
Notwithstanding any transfer of the Project to another owner in accordance with the provisions of
this Agreement or the Regulatory Agreement, the Borrower shall remain obligated to indemnify each
Indemnified Party pursuant to this Section if such subsequent owner fails to indemnify any party entitled
to be indemnified hereunder,unless the Issuer,the Trustee and the Bondholder Representative have
consented to such transfer and to the assignment of the rights and obligations of the Borrower hereunder.
The provisions of this Section shall survive the termination of this Agreement.
Section 5.19 No Warranty of Condition or Suitability by the Issuer; Exculpation and
Indemnification. The Issuer makes no warranty,either express or implied,as to the condition of the
Project or that it will be suitable for the Borrower's purposes or needs. The Borrower releases the
Trustee,the Issuer,the Servicer,the Bondholder Representative and any other Bondholder from, agrees
that the Trustee,the Issuer,the Servicer,the Bondholder Representative and any other Bondholder shall
not be liable for and agrees to hold the Issuer,the Trustee,the Bondholder Representative and any other
Bondholder harmless against, any loss or damage to property or any injury to or death of any person that
may be occasioned by any cause whatsoever pertaining to the Project or the use thereof,except(a)in the
case of the foregoing indemnification of the Bondholder Representative,the Servicer and the Trustee,to
the extent such damages are caused by the negligence or willful misconduct of such party; or(b)in the
case of the foregoing indemnification of the Issuer,to the extent such damages are caused by the willful
misconduct of the Issuer.
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Section 5.20 Right of Access to the Project. The Borrower agrees that the Issuer,the Trustee,
the Servicer,the Bondholder Representative and their duly authorized agents, attorneys,experts,
engineers, accountants and representatives shall have the right,but no obligation,at all reasonable times
during business hours and upon reasonable notice,to enter onto the Land(a)to examine,test and inspect
the Project without material interference or prejudice to the Borrower's operations and(b)to perform
such work in and about the Project made necessary by reason of the Borrower's default under any of the
provisions of this Loan Agreement. The Issuer,the Trustee,the Servicer and any Bondholder
Representative and their duly authorized agents, attorneys, accountants and representatives shall also be
permitted,without any obligation to do so, at all reasonable times during business hours,to examine the
books and records of the Borrower with respect to the Project.
Section 5.21 Tax Exempt Status of the Bonds. The Borrower covenants that it will not take or
omit to take any action nor permit any action to be taken or omitted that would cause the interest on the
Bonds to become includable in the gross income of the recipients thereof for federal income tax purposes
under then current law;provided that the Borrower shall not be deemed to have violated this covenant
solely due to the fact that interest on any of the Bonds becomes taxable to a person who is a"substantial
user"of the Project or a Related Person thereto. The Borrower agrees that it will take such action as may
be necessary to continue such exclusion from gross income, including,without limitation,the following:
(a) the preparation and filing of all statements required to be filed by it in order to
maintain the exclusion(including,but not limited to,the filing of all reports and certifications
required by the Regulatory Agreement);
(b) the timely payment to the United States of America of any rebate amount required to
be paid by the Issuer or the Borrower pursuant to Section 148(f)of the Code and the Treasury
Regulations under Section 148,provided that the Borrower shall have no obligation to pay rebate
amounts due with respect to the Hedge Agreement; and
(c) compliance with the terms of the Tax Agreement.
Section 5.22 [Reserved.]
Section 5.23 Tax Covenants. The Borrower covenants that it will:
(a) permit any duly authorized representative of the Issuer,the Trustee,the Servicer,the
Department of the Treasury or the Internal Revenue Service and any Bondholder Representative
to inspect the books and records of the Borrower pertaining to the Project upon reasonable notice
and at reasonable times;
(b) promptly give written notice to the Issuer,the Trustee,the Servicer and the
Bondholder Representative if the Borrower becomes aware of any circumstance,event or
condition that would result in the interest payable on the Bonds becoming includable in gross
income, for federal income tax purposes;
(c) apply the full amount of each disbursement from the Project Fund to pay or to
reimburse the Borrower for the payment of Qualified Project Costs as provided in the Tax
Agreement;
(d) cause all of the residential units in the Project to be rented or available for rental on a
basis which satisfies the requirements of the Act,the Code and the Regulatory Agreement;and
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(e) perform all of its obligations under the Regulatory Agreement and the Tax
Agreement,which are all incorporated by reference herein.
The Borrower represents that the information contained in the certificates or letters of
representation of the Borrower with respect to compliance with the requirements of Section 149(e)of the
Code,including the information in Form 8038,is true and correct in all material respects.
Section 5.24 Covenants under Indenture. The Borrower will fully and faithfully perform all
the duties and obligations which the Issuer has covenanted and agreed in the Indenture to cause the
Borrower to perform and any duties and obligations which the Borrower is required in the Indenture to
perform.The foregoing will not apply to any duty or undertaking of the Issuer,which by its nature cannot
be delegated or assigned.
Section 5.25 Notice of Default. The Borrower will advise the Issuer,and the Trustee and the
Bondholder Representative promptly in writing of the occurrence of any Default or Loan Agreement
Default hereunder, specifying the nature and period of existence of such event and the actions being taken
or proposed to be taken with respect thereto.
Section 5.26 Covenant with Bondholders. The Issuer and the Borrower agree that this Loan
Agreement is executed and delivered in part to induce the purchase by others of the Bonds and,
accordingly,all covenants and agreements of the Issuer and the Borrower contained in this Loan
Agreement are hereby declared to be for the benefit of the Trustee,the Bondholder Representative and the
Holders of the Bonds from time to time.
Section 5.27 Disclosure Agreement. The Borrower and the Trustee shall enter into a
Disclosure Agreement to provide for the continuing disclosure of information about the Bonds,the
Borrower and other matters as specifically provided for in such agreement. The Trustee is authorized and
directed to enter into the Disclosure Agreement and to make information public as provided in the
Disclosure Agreement. Under the Disclosure Agreement,the Trustee shall act as the agent of the
Borrower and not as the agent of the Issuer. The consent of the Issuer shall be required to each
amendment to, or modification of,the Disclosure Agreement,which consent shall not be unreasonably
withheld. The duties and obligations of the Trustee under the Disclosure Agreement shall be as set forth
in the Disclosure Agreement, and the Trustee shall be responsible only for the express duties and
obligations set forth in the Disclosure Agreement. The fees and expenses of the Trustee related to the
Disclosure Agreement shall be the responsibility of and be paid by the Borrower. A default under any
Disclosure Agreement shall not be a default under the Indenture,this Loan Agreement or any of the other
Bond Documents.
ARTICLE VI
NEGATIVE COVENANTS
Until the end of the Term,the Borrower covenants and agrees that it will not,directly or
indirectly:
Section 6.1 Management Agreement. Without the Bondholder Representative's prior
consent: (i) surrender,terminate,cancel,extend or renew the Management Agreement or otherwise
replace the Manager or enter into any other management agreement; (ii)reduce or consent to the
reduction of the term of the Management Agreement; (iii)increase or consent to the increase of the
amount of any charges under the Management Agreement; (iv)otherwise modify,change, supplement,
alter or amend in any material respect,or waive or release any of its rights and remedies under,the
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Management Agreement; or(v) suffer or permit the occurrence and continuance of a default beyond any
applicable cure period under the Management Agreement(or any successor management agreement)if
such default permits the Manager to terminate the Management Agreement(or such successor
management agreement).
Section 6.2 Liens. Without the Bondholder Representative's prior written consent,create,
incur,assume,permit or suffer to exist any mechanic's,materialmen's or other Lien on any portion of the
Project or legal or beneficial ownership interest in the Borrower, except Permitted Encumbrances,unless
such Lien is bonded or discharged within 30 days after the Borrower first receives notice of such Lien or
unless the Borrower is contesting such Lien in accordance with the Mortgage.
Section 6.3 Dissolution. Dissolve or liquidate,in whole or in part,terminate or merge with
or consolidate into another Person.
Section 6.4 Change In Business or Operation of Property. Enter into any line of business
other than the ownership and operation of the Project,or make any material change in the scope or nature
of its business objectives,purposes or operations,or undertake or participate in activities other than the
continuance of its present business or otherwise cease to operate the Project as a multi-family property or
terminate such business for any reason whatsoever(other than temporary cessation in connection with
renovations to the Project).
Section 6.5 Debt Cancellation. Cancel or otherwise forgive or release any claim or debt
owed to the Borrower by any Person,except for adequate consideration and in the ordinary course of the
Borrower's business M* its reasonable judgment.
Section 6.6 Assets. Purchase or own any real property or personal property incidental thereto
other than the Project.
Section 6.7 Transfers. Make, suffer or permit the occurrence of any Transfer other than a
transfer permitted under the Mortgage,nor transfer any License required for the operation of the Project.
Section 6.8 Debt. Create,incur or assume any indebtedness secured by all or any portion of
the Project{including subordinate debt)other than the Borrower Debt.
Section 6.9 n Assia
, -ment of Rights. Without the Bondholder Representative's prior consent,
attempt to(i)assign the Borrower's rights or interest under any Bond Document in contravention of any
Bond Document or(ii)surrender the Borrower's fee interest or leasehold estate,as the case may be, in the
Project,or if the Project is subject to a Ground Lease,terminate,cancel,modify or amend the Ground
Lease.
Section 6.10 Principal Place of Business. Change its principal place of business without
providing 30 days'prior notice of the change to the Servicer and the Bondholder Representative.
Section 6.11 [Reserved]
Section 6.12 ERISA. Maintain, sponsor,contribute to or become obligated to contribute to,or
suffer or permit any ERISA Affiliate of the Borrower to,maintain, sponsor,contribute to or become
obligated to contribute to, any Plan,or(ii)permit the assets of the Borrower to become"plan assets,"
whether by operation of law or under regulations promulgated under ERISA.
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Section 6.13 Arbitrage Covenant. The Borrower covenants and agrees that it will not make or
cause or permit to be made,whether by the Trustee or otherwise,any use of the proceeds of the Bonds
which,if such use had been reasonably expected on the date of issuance of the Bonds,would have caused
the Bonds to be arbitrage bonds within the meaning of Section 148 of the Code. The Borrower further
covenants and agrees that it will comply with and will take all action reasonably required to insure that
the Trustee complies with all applicable requirements of said Section 148 and the rules and regulations of
the United States Treasury Department thereunder relating to the Bonds and the interest thereon. The
Borrower agrees that(i)it will cause the Rebate Analyst to calculate the Excess Investment Earnings and
rebatable amounts, except to the extent required to be calculated by the Hedge Provider,and(ii)it will
pay all costs associated therewith, except to the extent payable by the Hedge Provider under the Tax
Agreement or other agreement between the Hedge Provider and the Borrower with respect thereto.
Section 6.14 Tax Exemption. The Borrower covenants,represents and agrees that it will not
take or omit to take or permit any action that would jeopardize or adversely affect the exclusion of interest
on the Bonds from the gross income of the recipients thereof for federal income tax purposes and,if it
should take or permit any such action,the Borrower will take all lawful actions that it can take to rescind
such action promptly upon having knowledge thereof and that the Borrower will take such action or
actions,including amendment of this Loan Agreement,the Mortgage and the Regulatory Agreement or
the Tax Agreement, as may be necessary, in the opinion of Bond Counsel,to comply fully with all
applicable rules,rulings,policies,procedures,regulations or other official statements promulgated or
proposed by the Department of the Treasury or the Internal Revenue Service applicable to the Bonds or
affecting the Project.
The Borrower will not make or permit any use,and will not direct the Trustee to make any
investment or use of the proceeds of any of the Bonds,which would cause any of the Bonds to be
"arbitrage bonds"within the meaning of Section 148 of the Code and the Regulations thereunder as the
same may be applicable to.the Bonds at the time of such action,investment or use and agrees to take and
cause the Issuer and Trustee to take all actions required to comply with the provisions of Section 148 of
the Code.
Neither the Borrower nor any Related Person shall,pursuant to any arrangement,formal or
informal,purchase any of the Bonds,other than as provided in the provisions of the Bond Documents.
No changes will be made to the Project,no actions will be taken by the Borrower and the
Borrower will not omit to take any actions,which will in any way adversely affect the tax-exempt status
of the Bonds;
The Borrower will not make any changes in the Project that would, at the time made,cause the
average reasonably expected economic life of the Project,determined pursuant to Section 147(b)of the
Code,to be less than the average reasonably expected economic life of the Project set forth in such
certificates or letters of representation of the Borrower,unless the Borrower files with the Trustee an
Opinion of Bond Counsel that such changes to the Project will not result in loss of the exclusion of
interest on the Bonds from gross income for federal income tax purposes.
No portion of the proceeds of the Bonds will be used to acquire existing property or any interest
therein unless such acquisition meets the rehabilitation requirements of Section 147(d)of the Code.
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ARTICLE VII
INSURANCE- CASUALTY; AND CONDEMNATION
Section 7.1 Insurance. The Borrower,at its sole cost,for the mutual benefit of the Borrower
and the Trustee,as representative of the Bondholders, shall obtain and maintain during the Term the
policies of insurance required by Section 19 of the Mortgage. All policies of insurance required pursuant
to this Section shall conform to the requirements set forth in the Mortgage. The Borrower shall deliver to
the Servicer a certified copy of each Policy within 30 days after its effective date.
Section 7.2 Casualty. If the Project is damaged or destroyed,in whole or in part,by fire or
other casualty(a"Casualty'),the Borrower shall give prompt notice thereof to the Servicer,the Trustee
and the Bondholder Representative. Following the occurrence of a Casualty,the Borrower,regardless of
whether insurance proceeds are available,shall promptly proceed to restore,repair,replace or rebuild the
Project and apply any insurance proceeds in accordance with the Mortgage.
Section 7.3 Condemnation. The Borrower shall promptly give the Servicer,the Bondholder
Representative and the Trustee notice of the actual or threatened commencement of any Condemnation
proceeding affecting the Project and shall deliver to the Servicer and the Trustee copies of any and all
papers served in connection with such Condemnation. Following the occurrence of a Condemnation,the
Borrower shall apply any condenmation award in accordance with the Mortgage.
ARTICLE VIII
DEFAULTS
Section 8.1 Loan Agreement Defaults. Each of the following events shall constitute a"Loan
Agreement Default":
(a) failure by the Borrower to pay any Monthly Loan Payment or Additional Payment
when such payment is due;
(b) failure by the Borrower to prepay the Note on the date such payment is due as
required by Section 2.12;
(c) failure by or on behalf of the Borrower to pay when due any amount(other than as
provided in subsections(a)or(b)above)required to be paid under this Loan Agreement,the
Note,the Mortgage or any of the other Bond Documents,including a failure to repay any
amounts that have been previously paid but are recovered,attached or enjoined pursuant to any
insolvency,receivership,liquidation or similar proceedings;
(d) a Transfer other than a transfer permitted under the Mortgage occurs;
(e) any representation or warranty made by the Borrower in any Bond Document to
which it is a party, or in any report,certificate,financial statement or other instrument,agreement
or document furnished by the Borrower in connection with any Bond Document, shall be false or
misleading in any material respect as of the date the representation or warranty was made;
(f) the Borrower or the Co-General Partner shall make a general assignment for the
benefit of creditors,or shall generally not be paying its debts as they become due;
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(g) an Act of Bankruptcy shall occur;
(h) the Borrower shall be in default under the Mortgage or any other mortgage or
security agreement covering any part of the Project,whether it be superior or junior in Lien to the
Mortgage and any applicable cure period thereunder shall have expired;
(i) an Event of Default of the Borrower as defined or described in any other Bond
Document occurs; or
0) the Borrower shall continue to be in Default under any of the other terms,covenants
or conditions of this Loan Agreement(other than paragraphs(a)-(i)above) for 30 days after
notice from the Trustee,the Servicer or the Bondholder Representative in the case of such other
Default;provided,however,that if such other Default under this paragraph 0)is susceptible of
cure but cannot reasonably be cured within such 30-day period,and the Borrower shall have
commenced to cure such Default within such 30-day period and thereafter diligently and
expeditiously proceeds to cure the same,such 30-day period shall be extended for an additional
period of time as is reasonably necessary for the Borrower in the exercise of due diligence to cure
such Default,such additional period not to exceed 60 days.
Section 8.2 Remedies.
Section 8.2.1 Acceleration. Upon the occurrence of an Event of Default by the
Borrower(other than an Event of Default described in paragraph(g)of Section 8.1)and at any time and
from time to time thereafter,in addition to any other rights or remedies available to the Trustee pursuant
to the Bond Documents or at law or in equity,the Trustee shall,at the written direction of the Bondholder
Representative,take such action,without notice or demand,as the Bondholder Representative deems
advisable to protect and enforce its rights against the Borrower and in and to the Project,including
declaring the Borrower Debt to be immediately due and payable(including,without limitation,the
principal of,Prepayment Premium, if any,and interest on and all other amounts due on the Note,unpaid
interest,Default Rate interest,Late Charges and any other amounts owing by the Borrower to be
immediately due and payable),without notice or demand,and apply such payment of the Borrower Debt
to the redemption of the Bonds pursuant to Section 6.4 of the Indenture; and upon any Event of Default
described in paragraph(g)of Section 8.1,the Borrower Debt shall become immediately due and payable
at the Bondholder Representative's election,in the Bondholder Representative's sole discretion,without
notice or demand, and the Borrower hereby expressly waives any such notice or demand,anything
contained in any Bond Document to the contrary notwithstanding.
Section 8.2.2 Remedies Cumulative. Upon the occurrence of an Event of Default by
the Borrower,all or any one or more of the rights,powers,privileges and other remedies available to the
Trustee against the Borrower under the Bond Documents or at law or in equity may be exercised by the
Trustee, at the direction of the Bondholder Representative,at any time and from time to time,whether or
not all or any of the Borrower Debt shall be declared due and payable, and whether or not the Trustee or
the Bondholder Representative shall have commenced any foreclosure proceeding or other action for the
enforcement of its rights and remedies under any of the Bond Documents. Any such actions taken by the
Trustee or the Bondholder Representative shall be cumulative and concurrent and may be pursued
independently, singly, successively,together or otherwise,at such time and in such order as the
Bondholder Representative may determine in its sole discretion,to the fullest extent permitted by law,
without impairing or otherwise affecting the other rights and remedies of the Trustee or the Bondholder
Representative permitted by law,equity or contract or as set forth in the Bond Documents. Without
limiting the generality of the foregoing,the Borrower agrees that if an Event of Default by the Borrower
is continuing, all Liens and other rights,remedies or privileges provided to the Trustee and Bondholder
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Representative shall remain in full force and effect until they have exhausted all of their remedies against
the Mortgage, or the Mortgage has been foreclosed,the Project has been sold and/or otherwise realized
upon satisfaction of the Borrower Debt or the Borrower Debt has been paid in full. To the extent
permitted by applicable law,nothing contained in any Bond Document shall be construed as requiring the
Trustee or Bondholder Representative to resort to any portion of the Project for the satisfaction of any of
the Borrower Debt in preference or priority to any other portion,and the Trustee or Bondholder
Representative may seek satisfaction out of the entire Property or any part thereof,in its absolute
discretion.
Notwithstanding the occurrence and continuance of an Event of Default,it is understood
that the Trustee shall pursue no remedies against the Borrower or the Project if the Borrower is not in
default under any of the Bond Documents to which the Borrower is a party or under any other document
that the Borrower has executed in connection with the Bonds. An Event of Default under the Indenture
shall not, in and of itself,constitute an event of default hereunder or under any other document relating to
the Bonds to which the Borrower is a party.
Section 8.2.3 Deli. No delay or omission to exercise any remedy,right,power
accruing upon an Event of Default, or the granting of any indulgence or compromise by the Trustee or the
Bondholder Representative shall impair any such remedy,right or power hereunder or be construed as a
waiver thereof,but any such remedy,right or power may be exercised from time to time and as often as
may be deemed expedient.- A waiver of one Default or Loan Agreement Default shall not be construed to
be a waiver of any subsequent Default or Loan Agreement Default or to impair any remedy,right or
power consequent thereon. Notwithstanding any other provision of this Loan Agreement,the Trustee and
the Bondholder Representative reserve the right to seek a deficiency judgment or preserve a deficiency
claim,in connection with the foreclosure of the Mortgage or the Ground Lease,if any,to the extent
necessary to foreclose on other part of the Project,the Rents,the Funds or any other collateral.
Section 8.2.4 Bondholder Representative's and Trustee's Right to Perform the
Obligations. If the Borrower shall fail,refuse or neglect to make any payment or perform any act
required by the Bond Documents, then while any Loan Agreement Default exists, and without notice to or
demand upon the Borrower and without waiving or releasing any other right,remedy or recourse the
Trustee or the Bondholder Representative may have because of such Loan Agreement Default,the
Trustee or the Bondholder Representative may(but shall not be obligated to)make such payment or
perform such act for the account of and at the expense of the Borrower,and shall have the right to enter
upon the Project for such purpose and to take all such action thereon and with respect to the Project as it
may deem necessary or appropriate. If the Trustee or the Bondholder Representative shall elect to pay any
sum due with reference to the Project,the Trustee or the Bondholder Representative may do so in reliance
on any bill, statement or assessment procured from the appropriate governmental authority or other issuer
thereof without inquiring into the accuracy or validity thereof. Similarly,in making any payments to
protect the security intended to be created by the Bond Documents,the Trustee or the Bondholder
Representative shall not be bound to inquire into the validity of any apparent or threatened adverse title,
lien,encumbrance,claim or charge before making an advance for the purpose of preventing or removing
the same. All sums paid by the Trustee or the Bondholder Representative pursuant to this Section 8.2.4,
and all other sums expended by the Trustee or the Bondholder Representative to which either shall be
entitled to be indemnified,together with interest thereon at the Default Rate from the date of such
payment or expenditure until paid, shall constitute additions to all amounts payable with respect to the
Bonds, shall be secured by the Bond Documents and shall be paid by the Borrower to the Trustee or the
Bondholder Representative upon demand.
Section 8.2.5 Trustee's Exercise of the Issuer's Remedies. Whenever any Loan
Agreement Default shall have occurred and be continuing,the Trustee may at the direction of the
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Bondholder Representative,but shall not be obliged to,exercise any or all of the rights of the Issuer under
this Article,upon notice as required of the Issuer unless the Issuer has already given the required notice.
In addition,the Trustee shall have available to it all of the remedies prescribed by the Indenture.
Notwithstanding anything herein to the contrary,the Issuer may exercise any remedies available to the
Issuer against the Borrower under the Bond Documents or at law or in equity in order to enforce its
Unassigned Issuer Rights,without the consent of the Trustee or the Bondholder Representative.
Section 8.2.6 Assumption of Obligations. In the event that the Trustee,the
Bondholders,the Bondholder Representative or their respective assignee or designee shall become the
legal or beneficial owner of the Project by foreclosure or deed in lieu of foreclosure, such party shall
execute and deliver to the Trustee(i)a new loan agreement,note and mortgage and an instrument in
writing assuming and agreeing to perform the obligations of the Borrower under the Regulatory
Agreement and any other Bond Documents to which the Borrower is a party,as required therein,or(ii)an
assumption agreement or agreements whereby such party shall assume and agree to perform the
obligations of the Borrower under each of the documents relating to the Bonds or the Loan to which the
Borrower is a party. Such assumption shall be effective from and after the effective date of such
acquisition and shall be made with the benefit of the limitations of liability set forth therein and without
any liability for the prior acts of the Borrower.
It is the intention of the parties hereto that upon the occurrence and continuance of a Loan
Agreement Default,rights and remedies may be pursued pursuant to the terms of the Bond Documents.
The parties hereto acknowledge that, among the possible outcomes to the pursuit of such remedies, is the
situation where the Trustee,the Bondholder Representative,the Bondholders or their respective assignees
or designees becomes the owner of the Project and assumes the obligations identified above, and the
Note,the Bonds and the other Bond Documents remain outstanding.
Section 8.2.7 Bondholder Representative's or the Servicer's.Right to Directly Enforce.
Notwithstanding any other provision hereof to the contrary,the Bondholder Representative(or its
designee,which may include the Servicer) shall have the right to directly enforce all rights and remedies
hereunder with or without involvement of the Trustee,provided that only the Issuer may enforce the
Unassigned Issuer's Rights. In the event that any of the provisions set forth in this Section 8.2.7 are
inconsistent with the covenants,terms and conditions of the Mortgage,the covenants,terms and
conditions of the Mortgage shall prevail.
ARTICLE IX
SPECIAL PROVISIONS
Section 9.1 Sale of Bonds and Secondary Market Transaction.
Section 9.1.1 Cooperation. At the Bondholder Representative's request(to the extent
not already required to be provided by the Borrower under this Loan Agreement),the Borrower shall use
reasonable efforts to satisfy the market standards to which the Bondholder Representative customarily
adheres or which may be reasonably required in the marketplace or by the Bondholder Representative in
connection with one or more sales or assignments of the Bonds or participations therein or securitizations
of rated single or multi-class securities(the"Securities") secured by or evidencing ownership interests in
the Bonds(each such sale,assignment and/or securitization,a"Secondary Market Transaction").
Without limiting the generality of the foregoing,the Borrower and the Issuer,as appropriate,shall at the
request of the Bondholder Representative in connection with any Secondary Market Transaction,and so
long as the Loan is still outstanding:
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(a) (i)provide such financial and other information with respect to the Bonds,in the case
of the Issuer, and with respect to the Project,the Borrower and the Co-General Partner,the
Manager and any tenants reports filed in connection with the Regulatory Agreement, in the case
of the Borrower, (ii)provide business plans and budgets relating to the Project,and(iii)perform
or permit or cause to be performed or permitted such site inspection,appraisals, surveys,-market
studies,environmental reviews and reports(Phase I's and, if appropriate,Phase II's),engineering
reports and other due diligence investigations of the Project,as maybe reasonably requested from
time to time by the Bondholder Representative or the Rating Agencies or as may be necessary or
appropriate in connection with a Secondary Market Transaction or Exchange Act requirements
(the items provided to the Bondholder Representative pursuant to this paragraph(a)being called
the"Provided Information"),together,if customary,with appropriate verification of and/or
consents to the Provided Information through letters of auditors or opinions of counsel of
independent attorneys acceptable to the Bondholder Representative and the Rating Agencies;
(b) make such representations and warranties as of the closing date of any Secondary
Market Transaction with respect to the Issuer, the Project,the Borrower and the Bond Documents
acceptable to the Bondholder Representative,consistent with the facts covered by such
representations and warranties as they exist on the date thereof;
(c) execute such amendments to the Bond Documents to accommodate such Secondary
Market Transaction;provided that nothing contained in this subsection(c) shall result in a
material change to the financial terms in the transaction contemplated by this Loan Agreement
and the related Bond Documents or the Borrower's rights or obligations;and provided,further,
that prior to the execution of such amendments,the Issuer may require the delivery of an Opinion
of Bond Counsel;and
(d) Neither the Borrower nor the Issuer shall incur any third party costs and expenses in
connection with a Secondary Market Transaction,including the costs associated with the delivery
of any Provided Information or any opinion required in connection therewith,and all such costs
shall be paid by GMAC CHCC.
Section 9.1.2 Use of Information . The Borrower and the Issuer understand that
certain of the Provided Information and the required records may be included in disclosure documents in
connection with a Secondary Market Transaction,including a prospectus or private placement
memorandum(each,a"Disclosure Document"), or provided or made available to investors or
prospective investors in the Securities,the Rating Agencies and service providers or other parties relating
to the Secondary Market Transaction. In the event that the Disclosure Document is required to be
revised,the Borrower shall cooperate with Bondholder Representative in updating the Provided
Information or required records for inclusion or summary in the Disclosure Document or for other use
reasonably required in connection with a Secondary Market Transaction by providing all current
information pertaining to the Borrower and the Project necessary to keep the Disclosure Document
accurate and complete in all material respects with respect to such matters. Such disclosure may include
the opinion or judgment of the Bondholder Representative concerning the Provided Information or other
matters disclosed,and despite reasonable good faith efforts by the Bondholder Representative,the
disclosure may be erroneous or incomplete. The Borrower hereby consents to any and all such
disclosures of such information.
Section 9.1.3 The Borrower Obligations Regarding Disclosure Documents. In
connection with a Disclosure Document,the Borrower shall,if requested by the Bondholder
Representative,certify in writing that the Borrower has carefully examined those portions of such
Disclosure Document,pertaining to the Borrower,the Project or the Manager,including applicable
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portions of the sections entitled"The Manager,""The Borrower"(or similarly titled sections)and such
portions(and portions of any other sections reasonably requested and pertaining to the Borrower,the
Project or the Manager)do not contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made,in the light of the circumstances under which they
were made,not misleading;provided that the Borrower shall not be required to make any representations
or warranties regarding any Provided Information obtained from third parties except with respect to
information it provided to such parties.
Section 9.1.4 The Borrower Indemnity Regarding Filings.nps. In connection with filings
under the Exchange Act,the Borrower shall(i) indemnify Bondholder Representative,the Servicer and
the underwriter group for any Liabilities to which Bondholder Representative or the underwriter group for
any securities(the"Underwriter Group")may become subject insofar as the Liabilities arise out of or
are based upon the omission or alleged omission to state in the Provided Information prepared or provided
by the Borrower relating to the Borrower or the Project a material fact required to be stated in the
Provided Information prepared or provided by the Borrower relating to the Borrower or the Project in
order to make the statements in the Provided Information prepared or provided by the Borrower relating
to the Borrower or the Project,in the light of the circumstances under which they were made not
misleading and(ii)reimburse the Servicer,the Bondholder Representative and the Underwriter Group for
any legal or other expenses reasonably incurred by the Servicer,the Bondholder Representative or the
Underwriter Group in connection with defending or investigating the Liabilities.
Section 9.1.5 Indemnification Procedure. Promptly after receipt by an indemnified
party under Section 9.1.4 of notice of the commencement of any action for which a claim for
indemnification is to be made against the Borrower,such indemnified party shall notify the Borrower in
writing of such commencement,but the omission to so notify the Borrower will not relieve the Borrower
from any liability that it may have to any indemnified party hereunder except to the extent that failure to
notify causes prejudice to the Borrower. In the event that any action is brought against any indemnified
party,and it notifies the Borrower of the commencement thereof,the Borrower will be entitled,jointly
with any other indemnifying party,to participate therein and,to the extent that it(or they)may elect by
written notice delivered to the indemnified party promptly after receiving the aforesaid notice of
commencement,to assume the defense thereof with counsel satisfactory to such indemnified party in its
sole discretion. After notice from the Borrower to such indemnified party under this Section 9.1.5,the
Borrower shall not be responsible for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable costs of investigation. No
indemnified party shall settle or compromise any claim for which the Borrower may be liable hereunder
without the prior written consent of the Borrower.
Section 9.1.6 Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 9.1.4 is for any reason held to be
unenforceable by an indemnified party in respect of any Liabilities(or action in respect thereof)referred
to therein which would otherwise be indemnifiable under Section 9.1.4,the Borrower shall contribute to
the amount paid or payable by the indemnified party as a result of such Liabilities(or action in respect
thereof);provided,-however,that no Person guilty of fraudulent misrepresentation(within the meaning of
Section 11(f)of the Securities Act) shall be entitled to contribution from any Person not guilty of such
fraudulent misrepresentation. In determining the amount of contribution to which the respective parties
are entitled,the following factors shall be considered: (i)the indemnified parties and the Borrower2s,
relative knowledge and access to information concerning the matter with respect to which the claim was
asserted; (ii)the opportunity to correct and prevent any statement or omission; and(iii)any other
equitable considerations appropriate in the circumstances. The parties hereto hereby agree that it may not
be equitable if the amount of such contribution were determined by pro rata or per capita allocation.
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ARTICLE X
MISCELLANEOUS
Section 10.1 [Reserved.]
Section 10.2 Notices. All notices, consents, approvals and requests required or permitted
hereunder or under any other Bond Document(a"notice")shall be given in the manner and under the
conditions set forth in the Indenture,addressed to the appropriate party at the address set forth in
Section 15.1 of the Indenture.
Section 10.3 Brokers and Financial Advisors. The Borrower hereby represents that it has dealt
with no financial advisors,brokers,underwriters,placement agents, agents or finders in connection with
the Loan, other than those disclosed to the Bond Purchaser prior to the Closing Date and whose fees shall
be paid by the Borrower pursuant to separate agreements. The Borrower and the Bond Purchaser shall
indemnify and hold the other harmless from and against any and all claims, liabilities,costs and expenses
of any kind in any way relating to or arising from a claim by any Person that such Person acted on behalf
of the indemnifying party in connection with the transactions contemplated herein. The provisions of this
Section 10.3 shall survive the expiration and termination of this Loan Agreement and the repayment of
the Borrower Debt.
Section 10.4 Survival,. This Loan Agreement and all covenants,agreements,representations
and warranties made herein and in the certificates delivered pursuant hereto shall survive the making by
the Issuer of the Loan and the execution and delivery to the Trustee of the Note, and shall continue in full
force and effect so long as all or any of the Borrower Debt is unpaid. All the Borrower's covenants and
agreements in this Loan Agreement shall inure to the benefit of the respective legal representatives,
successors and assigns of the Issuer,the Bondholder Representative or the Trustee on behalf of the
Bondholders.
Section 10.5 [Reserved.]
Section 10.6 Governing Law. This Loan Agreement shall be governed by the laws of the
State.
Section 10.7 Modification., Waiver in Writing. No modification,amendment,extension,
discharge,termination or waiver of any provision of this Loan Agreement or of any other Bond
Document,,nor consent to any departure by the Borrower therefrom,shall in any event be effective unless
the same shall be in a writing signed by the party against whom enforcement is sought,and then such
waiver or consent shall be effective only in the specific instance,and for the purpose,for which given.
Except as otherwise expressly provided herein,no notice to or demand on the Borrower shall entitle the
Borrower to any other or future notice or demand in the same, similar or other circumstances.
Section 10.8 Delay Not a Waiver. Neither any failure nor any delay on the part of the
Servicer,the Trustee or the Bondholder Representative in insisting upon strict performance of any term,
condition,covenant or agreement,or exercising any right,power,remedy or privilege hereunder, or under
any other Bond Document,shall operate as or constitute a waiver thereof,nor shall a single or partial
exercise thereof preclude any other future exercise, or the exercise of any other right,power,remedy or
privilege. In particular,and not by way of limitation,by accepting payment after the due date of any
amount payable under any Bond Document,the Trustee,the Servicer and the Bondholder Representative
shall not be deemed to have waived any right either to require prompt payment when due of all other
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amounts due under the Bond Documents, or to declare an Event of Default for failure to effect prompt
payment of any such other amount.
Section 10.9 Trial by Jury. THE BORROWER HEREBY AGREES NOT TO ELECT A
TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY,AND WAIVES ANY RIGHT TO
TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THE BOND DOCUMENTS,OR ANY CLAIM,
COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS
WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY
THE BORROWER,AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE
AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE
ACCRUE. THE SERVICER,THE TRUSTEE OR BONDHOLDER REPRESENTATIVE ARE EACH
HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS
CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE BORROWER.
Section 10.10 Headings . The Section headings in this Loan Agreement are included herein for
convenience of reference only and shall not constitute a part of this Loan Agreement for any other
purpose.
Section 10.11 Severability. Wherever possible,each provision of this Loan Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,but if any provision of this
Loan Agreement shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity,without invalidating the remainder of such
provision or the remaining provisions of this Loan Agreement.
Section 10.12 Preferences. The Trustee shall have the continuing and exclusive right to apply
or reverse and reapply any and all payments by the Borrower to any portion of the Borrower Debt then
due. To the extent the Borrower makes a payment to the Servicer or the Trustee,or the Servicer or the
Trustee receives proceeds of any collateral,which is in whole or part subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a trustee,receiver or any other party
under any bankruptcy law, state or federal law,common law or equitable cause,then,to the extent of such
payment or proceeds received,the Borrower Debt or part thereof intended to be satisfied shall be revived
and continue in full force and effect,as if such payment or proceeds had not been received by the
Servicer.
Section 10.13 Waiver of Notice. The Borrower shall not be entitled to any notices of any
nature whatsoever from the Servicer or the Trustee except with respect to matters for which this Loan
Agreement or any other Bond Document specifically and expressly provides for the giving of notice by
the Servicer or the Trustee,as the case may be,to the Borrower and except with respect to matters for
which the Borrower is not,pursuant to applicable Legal Requirements,permitted to waive the giving of
notice. The Borrower hereby expressly waives the right to receive any notice from the Servicer or the
Trustee as the case may be with respect to any matter for which no Bond Document specifically and
expressly provides for the giving of notice by the Servicer or the Trustee to the Borrower.
Section 10.14 [Reserved-]
Section 10.15 Prior Agreements. This Loan Agreement and the other Bond Documents contain
the entire agreement of the parties hereto and thereto in respect of the Loan and the transactions
contemplated hereby and thereby,and all prior agreements among or between such parties,whether oral
or written, are superseded by the terms of this Loan Agreement and the other Bond Documents.
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Section 10.16 Offsets, Counterclaims and Defenses. The Borrower hereby waives the right to
assert a counterclaim,other than a compulsory counterclaim,in any action or proceeding brought against
it by the Trustee or the Servicer with respect to a Monthly Loan Payment. Any assignee of Bondholder's
interest in and to the Bond Documents shall take the same free and clear of all offsets, counterclaims-or
defenses that are unrelated to the Bond Documents which the Borrower may otherwise have against any
assignor of such documents, and no such unrelated offset,counterclaim or defense shall be interposed or
asserted by the Borrower in any action or proceeding brought by any such assignee upon such documents,
and any such right to interpose or assert any such unrelated offset, counterclaim or defense in any such
action or proceeding is hereby expressly waived by the Borrower.
Section 10.17 Publicity. The Bond Purchaser shall have the right to issue press releases,
advertisements and other promotional materials describing the Bond Purchaser's participation in the
purchasing of the Bonds or the Bond's inclusion in any Secondary Market Transaction effectuated by the
Bond Purchaser or one of its Affiliates. All news releases,publicity or advertising by the Borrower or its
Affiliates through any media intended to reach the general public,which refers to the Bond Documents,
the Loan,the Bond Purchaser,the Servicer or the Trustee in a Secondary Market Transaction,shall be
subject to the prior written approval of the Bond Purchaser.
Section 10.18 No Usurer. The Borrower, the Issuer,the Trustee and the Servicer intend at all
times to comply with applicable state law or applicable United States federal law(to the extent that it
permits a party to contract-for, charge,take,reserve or receive a greater amount of interest than under
state law)and that this Section 10.18 shall control every other agreement in the Bond Documents. If the
applicable law(state or federal)is ever judicially interpreted so as to render usurious any amount called
for under the Note or any other Bond Document, or contracted for,charged,taken,reserved or received
with respect to the Borrower Debt,or if the Trustee's acceleration of the maturity of the Loan or any
prepayment by the Borrower or any premium or Late Charge results in the Borrower having paid any
interest in excess of that permitted by applicable law,then it is the parties' express intent that all excess
amounts theretofore collected by the Servicer or the Trustee shall be credited against the unpaid Principal
and all other elements of the Borrower Debt(or, if the Borrower Debt has been or would thereby be paid
in full,refunded to the Borrower),and the provisions of the Bond Documents immediately be deemed
reformed and the amounts thereafter collectible thereunder reduced,without the necessity of the execution
of any new document,so as to comply with the applicable law,but so as to permit the recovery of the
fullest amount otherwise called for thereunder. All sums paid or agreed to be paid to the Servicer or the
Trustee for the use, forbearance or detention of the Loan shall,to the extent permitted by applicable law,
be amortized,prorated,allocated, and spread throughout the full stated term of the Loan until payment in
full so that the rate or amount of interest on account of the Loan does not exceed the maximum lawful rate
from time to time in effect and applicable to the Loan for so long as the Loan is outstanding.
Notwithstanding anything to the contrary contained in any Bond Document,it is not the intention of the
Trustee to accelerate the maturity of any interest that has not accrued at the time of such acceleration or to
collect unearned interest at the time of such acceleration.
Section 10.19 Construction of Documents. The parties hereto acknowledge that they were
represented by counsel in connection with the negotiation and drafting of the Bond Documents and that
the Bond Documents shall not be subject to the principle of construing their meaning against the party
that drafted them.
Section 10.20 No Third Party Beneficiaries. The Bond Documents are solely for the benefit of
Bondholders,the Bondholder Representative,the Issuer,the Trustee,the Servicer and the Borrower and
nothing contained in any Bond Document shall be deemed to confer upon anyone other than the
Bondholders,the Bondholder Representative,the Issuer,the Trustee,the Servicer and the Borrower any
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right to insist upon or to enforce the performance or observance of any of the obligations contained
therein.
Section 10.21 [Reserved.]
Section 10.22 Assignment. The Bonds,the Mortgage,the Bond Documents and all
Bondholder's or the Bondholder Representative's rights,title,obligations and interests therein may be
assigned by the Bond Purchaser at any time in its sole discretion,whether by operation of law(pursuant
to a merger or other successor in interest)or otherwise. Upon such assignment,all references to
Bondholder or the Bondholder Representative in this Loan Agreement and in any Bond Document shall
be deemed to refer to such assignee or successor in interest and such assignee or successor in interest shall
thereafter stand in the place of the Bond Purchaser or subsequent Bondholders. The Borrower may not
assign its rights,interests or obligations under this Loan Agreement or under any of the Bond Documents,
except only as may be expressly permitted hereby.
Section 10.23 [Reserved.]
Section 10.24 Consents. wherever in this Loan Agreement it is provided that the Issuer,the
Servicer,the Bondholder Representative or the Trustee shall,may or must give its approval or consent,or
execute supplemental agreements or schedules,the Issuer,the Servicer,the Bondholder Representative or
the Trustee may withhold such approvals or consents in its sole discretion.
Section 10.25 Issuer,Trustee and Bondholder Representative Not in Control; No Partnership.
None of the covenants or other provisions contained in this Loan Agreement shall,or shall be deemed to,
give the Issuer,the Trustee,the Servicer or the Bondholder Representative the right or power to exercise
control over the affairs or management of the Borrower,the power of the Issuer,the Trustee,the Servicer
and the Bondholder Representative being limited to the rights to exercise the remedies referred to in the
Bond Documents. The relationship between the Borrower and the Issuer,the Trustee,the Servicer,the
Bondholder Representative and the Bondholders is,and at all times shall remain, solely that of debtor and
creditor. No covenant or provision of the Bond Documents is intended,nor shall it be deemed or
construed,to create a partnership,joint venture, agency or common interest in profits or income between
the Borrower and the Issuer,the Trustee,the Servicer,the Bondholder Representative or any Bondholder
or to create an equity in the Project in the Issuer, the Trustee,the Servicer,the Bondholder Representative
or any Bondholder. Neither the Issuer,the Trustee,the Servicer,the Bondholder Representative nor any
Bondholder undertakes or assumes any responsibility or duty to the Borrower or to any other person with
respect to the Project or the Loan,except as expressly provided in the Bond Documents; and
notwithstanding any other provision of the Bond Documents: (1)the Issuer,the Trustee,the Servicer,the
Bondholder Representative and the Bondholders are not, and shall not be construed as, a partner,joint
venturer, alter ego,manager,controlling person or other business associate or participant of any kind of
the Borrower or its stockholders,members,or partners and the Issuer,the Trustee,the Servicer,the
Bondholder Representative and the Bondholders do not intend to ever assume such status; (2)the Issuer,
the Trustee,the Servicer,the Bondholder Representative and the Bondholders shall in no event be liable
for any the Borrower Debt,expenses or losses incurred or sustained by the Borrower;and(3)the Issuer,
the Trustee,the Servicer,the Bondholder Representative and the Bondholders shall not be deemed
responsible for or a participant in any acts,omissions or decisions of the Borrower or its stockholders,
members,or partners. The Issuer,the Trustee,the Servicer,the Bondholder Representative,the
Bondholders and the Borrower disclaim any intention to create any partnership,joint venture, agency or
common interest in profits or income between the Issuer,the Trustee,the Servicer,the Bondholder
Representative,the Bondholders and the Borrower,or to create an equity in the Project in the Issuer,the
Trustee,the Servicer,the Bondholder Representative or the Bondholders, or any sharing of liabilities,
losses,costs or expenses.
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Section 10.26 Time of the Essence. Time is of the essence with respect to this Loan
Agreement.
Section 10.27 References to=Bondholder Representative. The provisions of Section 15.5 of the
Indenture pertaining to the Bondholder Representative are incorporated by reference herein.
Section 10.28 Release. The Borrower hereby acknowledges that it is executing this Loan
Agreement and each of the Bond Documents to which it is a party as its own voluntary act free from
duress and undue influence.
Section 10.29 Assignments to Trustee. It is understood and agreed that all right,title and
interest of the Issuer in and to this Loan Agreement(other than the Unassigned Issuer's Rights)are to be
pledged and assigned by the Issuer to the Trustee in trust as security for the Bonds under and pursuant to
the Indenture. The Borrower consents to such pledge and assignment.The Issuer directs the Borrower,
and the Borrower agrees,to pay or cause to be paid to the Trustee at its corporate trust office referenced
in Section 15.1 of the Indenture, all payments so assigned pursuant to this Section and all Trustee's
expenses.
Section 10.30 Term of Loan Agreement. This Loan Agreement shall be in full force and effect
until no Bonds are Outstanding under the Indenture and all Bond Obligations and other payment
obligations of the Borrower have been paid in full or the payment thereof has been provided for; except
that on and after payment in full of the Note,this Loan Agreement shall be terminated,without further
action by the parties hereto. Notwithstanding the foregoing,the obligations of the Borrower under
Sections 5.18, 5.19, 5.21, 5.23, 6.13, 6.14, 9.1.4, 9.1.5 and 9.1.6 hereof shall survive the termination of
this Loan Agreement.
Section 10.31 Reimbursement of Expenses. If,upon or after the occurrence of any Loan
Agreement Default or Default,the Issuer, the Trustee,the Bondholder Representative or the Servicer shall
employ attorneys or incur other expenses for the enforcement of performance or observance of any
obligation or agreement on the part of the Borrower contained herein,the Borrower will on demand
therefor reimburse the Issuer,the Trustee,the Bondholder Representative and the Servicer for reasonable
fees of such attorneys and such other reasonable expenses so incurred.
The Borrower's obligation to pay the amounts required to be paid hereunder and under
Section 2.7 hereof shall be subordinate to its obligations to make payments under the Note, and the
Borrower's obligations to pay the amounts under this Section.
ARTICLE XI
LIrVHTATIONS ON LIABILITY
Section 11.1 Limitations on Liability. The Borrower's liability hereunder shall be limited to
the extent set forth in Section 9 of the Note,which is incorporated by reference herein and made a part
hereof;provided that such limitation shall not apply to(i)the Borrower's failure to pay for any loss,
liability or expense(including attorneys' fees and expenses)incurred by the-Issuer,the Bondholder
Representative or the Trustee pursuant to Section 5.18 hereof(excluding payments on the Loan),or
(ii)the Borrower's failure to make any payment required from the Borrower with respect to Excess
Investment Earnings and amounts rebatable to the United States of America. None of the such limitations
on the personal liability of the Borrower shall modify,diminish or discharge the personal liability of any
joinder party. Notwithstanding anything herein or in the Bonds Documents to the contrary,the managing
general partner of the Borrower shall have no personal liability beyond its interest in the Borrower and the
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Project. Nothing herein or in the Note shall be deemed to be a waiver of any right that the Issuer, the
Trustee,the Servicer,the Bondholder Representative or the Bondholders may have under Sections 506(a),
506(b), 1111 (b)or any other provision of the United States Bankruptcy Code, as such sections may be
amended,or corresponding or superseding sections of the Bankruptcy Amendments and Federal
Judgeship Act of 1984,to file a claim for the full amount due to the Issuer,the Trustee,the Servicer,the
Bondholder Representative or the Bondholders under the Bond Documents or to require that all collateral
shall continue to secure the amounts due under the Bond Documents.
Section 11.2 Limitation on Liability of Bondholder Representative's and Hedge Provider's
Officers, Employees,Etc. Any obligation or liability whatsoever of the Bondholder Representative or the
Hedge Provider that may arise at any time under this Loan Agreement or any other document relating to
the Loan shall be satisfied,if at all,out of the Bondholder Representative's or the Hedge Provider's assets
only, as the case may be. No such obligation or liability shall be personally binding upon,nor shall resort
for the enforcement thereof be had to,the Project or any of the Bondholder Representative's or the Hedge
Provider's shareholders,directors,officers,employees or agents,regardless of whether such obligation or
liability is in the nature of contract,tort or otherwise.
Section 11.3 Limitation on Liability of the Issuer. The Bond Obligations are payable solely
and only from the special funds pledged for the benefit of the Bondholders pursuant to the Indenture.The
Bonds and the interest thereon do not represent or constitute an indebtedness of the Issuer or the State or
any political subdivision of the State within the meaning of the provisions of the constitution or statutes of
the State or a pledge of the faith and credit of the Issuer,the State or any political subdivision thereof.The
Bonds are a limited obligation of the Issuer payable solely and only out of payments by the Borrower
pursuant to the Loan Agreement and the Note and other amounts described in the Indenture.The Bonds
are not a lien or charge upon the funds or property of the Issuer,except to the extent of the
aforementioned.No recourse shall be had for the payment of the Bond Obligations against any elected or
appointed officer,official,employee or agent of the Issuer or any person executing the Bonds.
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THIS LOAN AGREEMENT EXECUTED as of the date first written above.
COUNTY OF CONTRA COSTA
By:
Deputy Director-Redevelopment
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STEADFAST HIDDEN COVE,L.P., a California
limited partnership
[By: Affordable Housing Access,Inc., a California
nonprofit public benefit corporation, its
Managing General Partner
By.
Jonathan B.Webb,
Executive Director
By: Steadfast HCA, L.P.,a California limited
partnership, its Co-General Partner
By: Steadfast HCA, LLC, a Delaware limited
liability company,its General Partner
By: China Cove Holdings,LLC, a
Delaware limited liability
company,its Manager
By.
Kyle Winning,
Authorized Representative]
ACKNOWLEDGED AND ACCEPTED BY:
WELLS FARGO BANK,NATIONAL
ASSOCIATION,as Trustee
By.
Authorized Officer
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RECORDING REQUESTED BY:
Steadfast Hidden Cove,L.P.
WHEN RECORDED RETURN TO:
Orrick,Herrington&Sutcliffe LLP
400 Sansome Street
San Francisco, CA 94111
Attention: Justin Cooper,Esq.
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
By and Among
COUNTY OF CONTRA COSTA,
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY,
WELLS FARGO BANK,NATIONAL ASSOCIATION,
as Trustee
and
STEADFAST HIDDEN COVE,L.P.,
a California limited partnership
Dated as of April 1,2003
Relating to
COUNTY OF CONTRA COSTA
MULTIFAMILY HOUSING REVENUE BONDS
(ADEN COVE APART M[ENTS PROJECT)2003 SERIES A
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TABLE OF CONENTS
Page
SECTION 1. DEFE41TIONS AND INTERPRETATION................................................................2
SECTION 2. REPRESENTATIONS,COVENANTS AND WARRANTIES OF THE
OV`TNER.......................................................................................................................4
SECTION 3. QUALIFIED RESIDENTIAL RENTAL PROJECT...................................................4
SECTION 4. LOW INCOME TENANTS; REPORTING REQUIREMENTS................................5
SECTION 5. TAX-EXEMPT STATUS OF BONDS.......................................................................7
SECTION 6. ADDITIONAL REQUIREMENTS OF THE ACT.....................................................7
SECTION 7. ADDITIONAL REQUIREMENTS OF THE ISSUER...............................................8
SECTION 8. MODIFICATION OF COVENANTS.........................................................................9
SECTION 9. INDEMNIFICATION; OTHER PAYMENTS..........................................................10
SECTION 10. CONSIDERATION...................................................................................................10
ECTION11. RELIANCE................................................................................................................10
SECTION 12. SALE OR TRANSFER OF THE PROJECT.............................................................11
SECTION13. TERM........................................................................................................................12
SECTION 14. COVENANTS TO RUN WITH THE LAND...........................................................12
SECTION 15. BURDEN AND BENEFIT........................................................................................13
SECTION 16. UNIFORMITY; COMMON PLAN..........................................................................13
SECTION 17. DEFAULT; ENFORCEMENT.................................................................................13
SECTION18. THE TRUSTEE.........................................................................................................14
SECTION 19. RECORDING AND FILING.....................................................................................14
SECTION 20. PAYMENT OF FEES ...............................................................................................15
SECTION21. GOVERNING LAW.................................................................................................15
SECTION 22. AMENDMENTS;WAIVERS...................................................................................15
SECTION23. NOTICES ..................................................................................................................15
SECTION24. SEVERABILITY.......................................................................................................16
SECTION 25. MULTIPLE COUNTERPARTS...............................................................................16
SECTION 26. LIMITATION ON LIABILITY.................................................................................16
SECTION 27. THIRD-PARTY BENEFICIARY..............................................................................16
Exhibit A Description of Real Property....................................................................................A-1
Exhibit B Form of Income Certification...................................................................................B-1
Exhibit C Form of Certificate of Continuing Program Compliance..........................0..............C-1
Exhibit D Form of Completion Certificate...............................................................................D-1
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REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE
COVENANTS(as supplemented and amended from time to time,this"Regulatory Agreement")is
made and entered into as of April 1,2003,by and among the COUNTY OF CONTRA COSTA, a
political subdivision of the State of California(together with any successor to its rights, duties and
obligations,the"Issuer"),the CONTRA COSTA COUNTY REDEVELOPMENT AGENCY(the
"Agency"),WELLS FARGO BANK,NATIONAL ASSOCIATION,a national banking association
organized and existing under the laws of the United States of America,in its capacity as trustee under the
Indenture(as hereinafter defined) (together with any successor in such capacity,the"Trustee"), and
STEADFAST HIDDEN COVE, L.P.,a California limited partnership(together with any successor to its
rights, duties and obligations hereunder and as owner of the Project identified herein,the"Owner").
W I T N E S SETH:
WHEREAS,pursuant to Chapter 7 of Part 5 of Division 31 of the California Health and
Safety Code(the"Act"),the Issuer proposes to issue its Multifamily Housing Revenue Bonds(Hidden
Cove Apartments Project)2003 Series A(the"Bonds")under an Indenture, dated as of April 1,2003
(the"Indenture"),between the Issuer and the Trustee;
WHEREAS,the proceeds of the Bonds will be used to fund a loan to the Owner pursuant
to a Loan Agreement,dated as of April 1,2003,between the Issuer and the Owner(as supplemented,
amended or replaced from time to time,the"Agreement"),to provide financing for the acquisition and
rehabilitation of a multifamily rental housing project known as Hidden Cove Apartments,located on the
real property site described in Exhibit A hereto(as further described herein,the"Project");
WHEREAS,in order to assure the Issuer and the owners of the Bonds that interest on the
Bonds will be excluded from gross income for federal income tax purposes under Section 103 of the
Internal Revenue Code of 1986(the"Code"), and to satisfy the public purposes for which the Bonds are
authorized to be issued under the Act and to the purposes of the Issuer, certain limits on the occupancy of
units in the Project need to be established and certain other requirements need to be met;
NOW,THEREFORE,in consideration of the issuance of the Bonds by the Issuer and the
mutual covenants and undertakings set forth herein,and other good and valuable consideration,the
receipt and sufficiency of which are hereby acknowledged,the Issuer,the Trustee and the Owner hereby
agree as follows:
Section 1. Definitions and Interpretation. Unless the context otherwise requires,the
capitalized terms used herein shall have the respective meanings assigned to them in the recitals hereto,
in this Section 1 or in Section 1.01 of the Loan Agreement,as applicable.
"Adjusted Income"means the adjusted income of a person(together with the adjusted
income of all persons who intend to reside with such person in one residential unit)as calculated in the
manner prescribed in Regulations Section 1.167(k)-3(b)(3)in effect as of the Closing Date.
"Administrator"means the Issuer or any administrator or program monitor appointed
by the Issuer to administer this Regulatory Agreement,and any successor so appointed.
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"Affordable Rents"means the lesser of(i)market rents and(ii)30%of an amount equal
to 50% of the median gross income for the Area.
"Agency"means the Contra Costa County Redevelopment Agency.
"Areav)means the Contra Costa County, California Metropolitan Statistical Area.
"CDLAC"means the California Debt Limit Allocation Committee or its successors.
"Certificate of Continuing Program Compliancel)means the Certificate to be filed by
the Owner with the Administrator,on behalf of the Issuer,and the Trustee pursuant to Section 4(e)
hereof,which shall be substantially in the form attached as Exhibit C hereto or in such other comparable
form as may be provided by the Issuer to the Owner or as otherwise approved by the Issuer.
"Closing Date,),)means the date the Bonds are issued and delivered to the initial
purchasers thereof.
"Housing Act"means the United States Housing Act of 1937,as amended,or its
successor.
"Income Certification"means a Verification of Income and an Occupancy Certificate in
the form attached as Exhibit B hereto or in such other comparable form as may be provided by the Issuer
to the Owner or as otherwise approved by the Issuer.
"Low Income Tenant"means any tenant(i)whose Adjusted Income does not exceed
limits determined in a manner consistent with determinations of low income families under Section 8 of
the Housing Act,provided that the percentage of median gross income that qualifies as very low income
hereunder shall be fifty percent(50%)of median gross income for the Area,with adjustments for family
size; and(ii)who otherwise qualify as low income households as defined by Section 50105 of the
California Health and Safety Code(as in effect on the Closing Date). If all the occupants of a unit are
students(as defined under Section 15 1(c)(4)of the Code),no one of whom is entitled to file a joint return
under Section 6013 of the Code, such occupants shall not qualify as Low Income Tenants. The
determination of a tenant's status as a Low Income Tenant shall be made by the Owner upon *initial
occupancy of a unit in the Project by such Tenant,on the basis of an Income Certification executed by
the Tenant.
"Low Income Units"means the units in the Project required to be rented,or held
available for occupancy by,Low Income Tenants pursuant to Sections 4(a)and 6(a)of this Regulatory
Agreement.
"Project9i means the 88-unit multifamily rental housing development,located on the real
property site described in Exhibit A hereto,consisting of those facilities,including real property,
structures,buildings, fixtures or equipment situated thereon,as it may at any time exist,the acquisition of
which facilities is to be financed,in whole or in part, from the proceeds of the sale of the Bonds or the
proceeds of any payment by the Owner pursuant to the Loan Agreements,and any real property,
structures,buildings, fixtures or equipment acquired in substitution for,as a renewal or replacement of,
or a modification or improvement to,all or any part of the facilities described in the Loan Agreements.
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"Qualified Project Period"means the period beginning on the later of the Closing Date
or the first day on which at least 10%of the units in the Project are first occupied(which for purposes of
this Regulatory Agreement, shall be the Closing Date),and ending on the later of the following:
(A) the date that is fifteen(15)years after the date on which at least fifty percent
(50%)of the units in the Project are first occupied;
(B) the first date on which no Tax-Exempt private activity bonds with respect to the
Project are Outstanding;
(C) the date on which any assistance provided with respect to the Project under
Section S of the Housing Act terminates; or
(D) such later date as set forth on Section 7 of this Regulatory Agreement.
"Regulations"means the Income Tax Regulations of the Department of the Treasury
applicable under the Code from time to time.
"Regulatory Agreement"means this Regulatory Agreement and Declaration of
Restrictive Covenants, as it may be supplemented and amended from time to time.
"Tax-Exempt"means with respect to interest on any obligations of a state or local
government,including the Bonds,that such interest is excluded from gross income for federal income tax
purposes;provided,however,that such interest may be includable as an item of tax preference or
otherwise includable directly or indirectly for purposes of calculating other tax liabilities, including any
alternative minimum tax or environmental tax,under the Code.
"Verification of Income"means a Verification of Income in the form attached as
Exhibit B hereto or in such other comparable form as may be provided by the Issuer to the Owner.
Unless the context clearly requires otherwise,as used in this Regulatory Agreement,
words of any gender shall be construed to include each other gender when appropriate and words of the
singular number shall be construed to include the plural number, and vice versa,when appropriate. This
Regulatory Agreement and all the terms and provisions hereof shall be construed to effectuate the
purposes set forth herein and to sustain the validity hereof.
The titles and headings of the sections of this Regulatory Agreement have been inserted
for convenience of reference only,and are not to be considered a part hereof and shall not in any way
modify or restrict any of the terms or provisions hereof or be considered or given any effect in construing
this Regulatory Agreement or any provisions hereof or in ascertaining intent,if any question of intent
shall arise.
The parties to this Regulatory Agreement acknowledge that each party and their
respective counsel have participated in the drafting and revision of this Regulatory Agreement.
Accordingly,the parties agree that any rule of construction to the effect that ambiguities are to be
resolved against the drafting party shall not apply in the interpretation of this Regulatory Agreement or
any supplement or exhibit hereto.
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Section 2. Re-presentations. Covenants and Warranties of the Owner.
(a) The Owner hereby incorporates herein,as if set forth in full herein, each of the
representations, covenants and warranties of the Owner contained in the Tax Agreements and the Loan
Agreements.
(b) The Owner hereby represents and warrants that the Project is located entirely
within Contra Costa County, California.
(c) The Owner acknowledges,represents and warrants that it understands the nature
and structure of the transactions contemplated by this Regulatory Agreement;that it is familiar with the
provisions of all of the documents and instruments relating to the Bonds to which it is a party or of which
it is a beneficiary;that it understands the financial and legal risks inherent in such transactions; and that
it has not relied on the Issuer for any guidance or expertise in analyzing the financial or other
consequences of such financing transactions or otherwise relied on the Issuer m* any manner except to
issue the Bonds in order to provide funds to assist the Owner in acquiring and rehabilitating the Project.
Section 3. Qualified Residential Rental Proi ect. The Owner hereby acknowledges and
agrees that the Project is to be owned,managed and operated as a"residential rental project" (within the
meaning of Section 142(d) of the Code)for a term equal to the Qualified Project Period. To that end,and
for the term of this Regulatory Agreement,the Owner hereby represents,covenants,wan-ants and-agrees
as follows:
(a) The Project will be acquired and operated for the purpose of providing
multifamily residential rental property. The Owner will own,manage and operate the Project as a project
to provide multifamily residential rental property comprised of a building or structure or several
interrelated buildings or structures,together with any functionally related and subordinate facilities,and
no other facilities,m' accordance with Section 142(d)of the Code, Section 1.1.03-8(b)of the Regulations
and the provisions of the Act, and in accordance with such requirements as may be imposed thereby on
the Project from time to time.
(b) All of the dwelling units in the Project will be similarly constructed units, and
each dwelling unit in the Project will contain complete separate and distinct facilities for living,sleeping,
eating,cooking and sanitation for a single person or a family,including a sleeping area,bathing and
sanitation facilities and cooking facilities equipped with a cooking range,refrigerator and sink.
(c) None of the dwelling units in the Project will at any time be utilized on a
transient basis or rented for a period of less than 30 consecutive days,or will ever be used as a hotel,
motel, dormitory,fraternity house, sorority house,rooming house,nursing home,hospital,sanitarium,
rest home or trailer court or park;provided that the use of certain units for tenant guests on an
intermittent basis shall not be considered transient use for purposes of this Regulatory Agreement.
(d) No part of the Project will at any time during the Qualified Project Period be
owned by a cooperative housing corporation,nor shall the Owner take any steps in connection with a
conversion to such ownership or use,and the Owner will not take any steps in connection with a
conversion of the Project to condominium ownership during the Qualified Project Period(except that the
Owner may obtain final map approval and the Final Subdivision Public Report from the California
Department of Real Estate and may file a condominium plan with the County).
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(e) All of the dwelling units in the Project(except for not more than two units set
aside for resident manager or other administrative use)will be available for rental during the Qualified
Project Period on a continuous basis to members of the general public, and the Owner will not give
preference to any particular class or group in renting the dwelling units in the Project, except to the
extent that dwelling units are required to be leased or rented to Low Income Tenants.
(f) The Project consists of a parcel or parcels that are contiguous except for the
interposition of a road, street or stream, and all of the facilities of the Project comprise a single
geographically and functionally integrated project for residential rental property, as evidenced by the
ownership,management, accounting and operation of the Project.
(g) No dwelling unit in the Project shall be occupied by the Owner;provided,
however,that if the Project contains five or more dwelling units,this provision shall not be construed to
prohibit occupancy of not more than two dwelling unit by two or more resident managers or maintenance
personnel any of whom may be the Owner.
Section 4. Low Income Tenants; Reporting Requirements. Pursuant to the
requirements of the Code,the Owner hereby represents,warrants and covenants as follows:
(a) During the Qualified Project Period,no less than 20% of the total number of
completed units in the Project shall at all times be rented to and occupied by Low Income Tenants. For
the purposes of this paragraph(a), a vacant unit that was most recently occupied by a Low Income
Tenant is treated as rented and occupied by a Low Income Tenant until reoccupied, other than for a
temporary period of not more than 31 days, at which time the character of such unit shall be
redetermined.
(b) No tenant qualifying as a Low Income Tenant upon initial occupancy shall be
denied continued occupancy of a unit in the Project because,after admission,such tenant's Adjusted
Income increases to exceed the qualifying limit for Low Income Tenants. However, should a Low
Income Tenant's Adjusted Income, as of the most recent determination thereof,exceed one hundred forty
percent(140%)of the applicable income limit for a Low Income Tenant of the same family size,the next
available unit of comparable or smaller size must be rented to(or held vacant and available for
immediate occupancy by)a Low Income Tenant. Until such next available unit is rented,the former Low
Income Tenant who has ceased to qualify as such shall be deemed to continue to be a Low Income
Tenant for purposes of the 20%requirement of Section 4(a)hereof.
(c) For the Qualified Project Period,the Owner will obtain,complete and maintain
on file Income Certifications for each Low Income Tenant,including(i)an Income Certification dated
immediately prior to the initial occupancy of such Low Income Tenant in the Project,and(ii)thereafter,
an annual Income Certification with respect to each Low Income Tenant. The Owner will provide such
additional information as may be required in the future by the Code,the State or the Issuer, as the same
may be amended from time to time,or in such other form and manner as may be required by applicable
rules,rulings,policies,procedures,Regulations or other official statements now or hereafter
promulgated,proposed or made by the Department of the Treasury or the Internal Revenue Service with
respect to Tax-Exempt obligations. A copy of the most recent Income Certifications for Low Income
Tenants commencing or continuing occupation of a Low Income Unit shall be attached to each report to
be filed with the Issuer pursuant to paragraph(e)of this Section 4.
The Owner shall make a good faith effort to verify that the income information provided
by an applicant in a Verification of Income is accurate by taking one or more of the following steps as a
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part of the verification process: (1)obtain a pay stub for the most recent pay period, (2)obtain an
income tax return for the most recent tax year,(3)obtain a credit report or conduct a similar type credit
search, (4)obtain an income verification from the applicant's current employer,(5) obtain an income
verification from the Social Security Administration and/or the California Department of Social Services
if the applicant receives assistance from either of such agencies,or(6)if the applicant is unemployed and
does not have an income tax return,obtain another form of independent verification reasonably
acceptable to the Issuer.
(d) The Owner will maintain complete and accurate records pertaining to the Low
Income Units,and will permit any duly authorized representative of the Issuer,the Trustee,the
Department of the Treasury or the Internal Revenue Service to inspect the books and records of the
Owner pertaining to the Project,including those records pertaining to the occupancy of the Low Income
Units.
(e) The Owner will prepare and submit to the Administrator,on behalf of the Issuer,
at the end of each calendar quarter,until the end of the Qualified Project Period, a Certificate of
Continuing Program Compliance executed by the Owner. On or before each March I during the
Qualified Project Period,the Owner will submit to the Issuer,the Administrator(if other than the Issuer)
and the Trustee,a draft of the completed Internal Revenue Code Form 8703 or such other annual
certification as required by the Code with respect to the Project,which form shall be submitted to the
Secretary of the Treasury-on or before March 31 of each year(or such other date as may be required by
the Code). The Owner shall provide the Issuer and the Trustee with evidence of the filing of such annual
Certification with the Secretary of the Treasury.
(f) For the Qualified Project Period,all tenant leases or rental agreements shall be
subordinate to this Regulatory Agreement and the Mortgage. All leases pertaining to Low Income Units
shall contain clauses,among others,wherein each tenant who occupies a Low Income Unit: (i)certifies
the accuracy of the statements made in the Verification of Income; (ii)agrees that the family income and
• other eligibility requirements shall be deemed substantial and material obligations of the tenancy of such
tenant,that such tenant will comply promptly with all requests for information with respect thereto from
the Owner,the Trustee,the Issuer or the Administrator on behalf of the Issuer,and that the failure to
provide accurate information in the Verification of Income or refusal to comply with a request for
information with respect thereto shall be deemed a violation of a substantial obligation of the tenancy of
such tenant; (iii) acknowledges that the Owner has relied on the Verification of Income and supporting
information supplied by the Low Income Tenant in determining qualification for occupancy of the Low
Income Unit,and that any material misstatement in such certification(whether or not intentional)will be
cause for immediate termination of such lease or rental agreement; and(iv)agrees that the tenant's
income is subject to annual certification in accordance with Section 4(c)and that if upon any such
certification such tenant's Adjusted Income exceeds the applicable income limit under Section 4(b),such
tenant may cease to qualify as a Low Income Tenant and such tenant's rent may be subject to increase.
Section 5. Tax-Exempt Status of Bonds. The Owner and the Issuer,as applicable,each
hereby represents,warrants and agrees as follows:
(a) The Owner and the Issuer will not knowingly take or permit,or omit to take or
cause to be taken, as is appropriate,any action that would adversely affect the Tax-Exempt nature of the
interest on the Bonds and,if either of them should take or permit,or omit to take or cause to be taken,
any such action,it will take all lawful actions necessary to rescind or correct such actions or omissions
promptly upon obtaining knowledge thereof.
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(b) The Owner and the Issuer will file of record such documents and take such other
steps as are necessary,in the written opinion of Bond Counsel filed with the Issuer and the Trustee(with
a copy to the Owner),in order to insure that the requirements and restrictions of this Regulatory
Agreement will be binding upon all owners of the Project, including,but not limited to,the execution and
recordation of this Regulatory Agreement in the real property records of the County of Contra Costa.
Section 6. Additional Requirements of the Act. In addition to the requirements set
forth above,the Owner hereby agrees that it shall comply with each of the requirements of Section 52080
of the Act,including(but not limited to)the following:
(a) Not less than 20%of the total number of units in the Project shall be occupied by
Low Income Tenants. The units made available to meet this requirement shall be of comparable quality
and offer a range of sizes and numbers of bedrooms comparable to the units that are available to other
tenants in the Project.
(b) The rental payments for the Low Income Units paid by the tenants thereof
(excluding any supplemental rental assistance from the State,the federal government or any other public
agency to those tenants or on behalf of those units)shall not exceed 30%of an amount equal to 50%of
the median adjusted gross income for the Area.
(c) The Owner shall accept as tenants,on the same basis as all other prospective
tenants,low-income persons who are recipients of federal certificates or vouchers for rent subsidies
pursuant to the existing program under Section 8 of the Housing Act. The Owner shall not permit any
selection criteria to be applied to Section 8 certificate or voucher holders that is more burdensome than
the criteria applied to all other prospective tenants.
(d) The units reserved for occupancy as required by subsection(a)of this Section 6
shall remain available on a priority basis for occupancy at all times during the Qualified Project Period.
(e) During the three(3)years prior to the expiration of the Qualified Project Period,
the Owner shall continue to make available to eligible households Low Income Units that have been
vacated to the same extent that nonreserved units are made available to noneligible households.
(f) Following the expiration or termination of the Qualified Project Period, except in
the event of foreclosure and redemption of the Bonds,deed in lieu of foreclosure,eminent domain,or
action of a federal agency preventing enforcement,units reserved for occupancy as required by
subsection(a)of this Section shall remain available to any eligible tenant occupying a reserved unit at
the date of such expiration or termination,at the rent determined by subsection(b)of this Section,until
the earliest of(1)the household's income exceeds 140%of the maximum eligible income specified
above,(2)the household voluntarily moves or is evicted for good cause(as defined in the Act),(3)30
years after the date of the commencement of the Qualified Project Period,or(4)the Owner pays the
relocation assistance and benefits to households as provided in Section 7264(b)of the California
Government Code.
Section 7. Additional Requirements of the Issuer. In addition to the requirements set
forth above and to the extent not prohibited thereby,the Owner hereby agrees to comply with each of the
requirements of the Issuer set forth in this Section 7,as follows:
DOCSSFI:671621.2 ']
40511-124 J78
(a) The Owner will pay to the Issuer all of the amounts required to be paid by the
Owner under Section 2.07 of the Loan Agreement and will indemnify the Issuer and the Trustee as
provided in Section 9 of this Regulatory Agreement.
(b) Rental payments paid by Low Income Tenants for the Low Income Units shall
not exceed Affordable Rents.
(c) All tenant lists,applications and waiting lists relating to the Project shall at all
times be kept separate and identifiable from any other business of the Owner and shall be maintained as
required by the Issuer,in a reasonable condition for proper audit and subject to examination during
business hours by representatives of the Issuer upon reasonable advance notice to the Owner.
(d) The Owner shall submit to the Administrator,on behalf of the Issuer, (i)within
fifteen days after receipt of a written request,any information or completed forms requested by the Issuer
or the Administrator in order to comply with reporting requirements of the Internal Revenue Service or
the State,and(ii)a duly executed and completed Completion Certificate on the date that the Project is
completed in accordance with the terms of the Loan Agreements.
(e) The Owner shall not discriminate on the basis of race,creed,color,religion,sex,
sexual orientation,marital status,national origin, source of income(e.g. SSI),ancestry or handicap in the
lease,use or occupancy of the Project or in connection with the employment or application for
employment of persons for the operation or management of the Project,and will not discriminate on the
basis of household size so long as the tenants meet the household size standards of Section 8 of the
Housing Act. Further,the Owner shall not permit occupancy in any unit in the Project by more persons
than is permissible under the Section 8 household size standards.
(f) The Owner shall comply with any reasonable request made by the Administrator
(if other than the Issuer)or the Issuer to deliver to any such Administrator,in addition to or instead of the
Issuer, any reports,notices or other documents required to be delivered pursuant hereto,and to make the
Project and the books and records with respect thereto available for inspection by the Issuer or the
Administrator as an agent of the Issuer.
%.0
(g) For purposes of Section 6(b),the base rents shall be adjusted for household size,
to the extent permitted by law, and in making such adjustments it shall be assumed that one person will
occupy a studio unit,two persons will occupy a one-bedroom unit,three persons will occupy a two-
bedroom unit,four persons will occupy a three-bedroom,unit, and five persons will occupy a four-
bedroom unit.
(h) The Owner shall comply with the conditions set forth in Exhibit A to CDLAC
Resolution No. 03-—) adopted on March 26,2003 (the"CDLAC Conditions"),as they may be modified
or amended from time to time,which conditions are incorporated herein by reference and made a part
hereof. The Owner will prepare and submit to CDLAC,not later-than each anniversary of the Closing
Date,until the end of the Qualified Project Period,a Certificate of Continuing Program Compliance,in
substantially the form attached hereto as Exhibit C-2, executed by an authorized representative of the
Owner. The Issuer and the Administrator shall have no obligation to monitor the Owner's compliance
with the CDLAC Conditions.
(i) Except as otherwise provided in Section 13 of this Regulatory Agreement,this
Regulatory Agreement shall terminate on the date 55 years after the Closing Date.
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40511-124 378
Any of the foregoing requirements of the Issuer(except(h) and(i)above,which must
also be expressly waived by CDLAC)may be expressly waived by the Issuer,in its sole discretion, in
writing,but(i)no waiver by the Issuer of any requirement of this Section 7 shall,or shall be deemed to,
extend to or affect any other provision of this Regulatory Agreement except to the extent the Issuer has
received an opinion of Bond Counsel that any such provision is not required by the Act or the Code, and
may be waived without adversely affecting the exclusion from gross income of interest on the Bonds for
federal income tax purposes; and(ii)any requirement of this Section 7 shall be void and of no force and
effect if the Issuer and the Owner receive a written opinion of Bond Counsel to the effect that compliance
with any such requirement would cause interest on the Bonds to cease to be Tax-Exempt or to the effect
that compliance with such requirement would be in conflict with the Act or any other state or federal law.
Section 7A. Additional Requirements of the Agency. In addition to the requirements
set forth elsewhere in this Regulatory Agreement and to the extent not prohibited thereby,the Borrower
hereby agrees to comply with each of the requirements of the Agency set forth in this Section 7A,as
follows:
(a) Ten percent(10%)of the residential units in the Project shall be occupied by,or
held vacant and available for occupancy by,households whose incomes do not exceed the qualifying
limits for very low income families as established and amended from time to time pursuant to Section 8
of the United States Housing Act of 1937,or in the event the federal standards are discontinued, fifty
percent(50%)of area median income.
(b) The rental payments paid by the occupants of the units described in paragraph
(a) of this Section(excluding any supplemental rental assistance from the state,the federal government,
or any other public agency to those occupants or on behalf of those units) shall not exceed thirty percent
(30%)of fifty percent(50%)of area median income.
(c) Ninety percent(90%)of the residential units in the Project shall be occupied by,
or held vacant and available for occupancy by,individuals whose income is sixty percent(60%)or less of
area median income.
(d) The rental payments paid by the occupants of the units described in paragraph
(c) of this Section(excluding any supplemental rental assistance from the state,the federal government,
or any other public agency to those occupants or on behalf of those units)shall not exceed thirty percent
of sixty percent(60%) of area median income.
(e) The Borrower shall give preference in the occupancy of the units in the Project
to households that the Agency identifies in writing to the Borrower that have been displaced as a result of
Agency activities.
(f) Commencing on_1,20_, and on 1 of each year thereafter through and
including 1,20 ,the Borrower shall make a$ Community Improvement Contribution(the
"Annual Community Improvement Contribution")to the Agency Commencing or 1,20_,and on
1 of each year through and including the last_1 before the termination of the [West Pittsburg
(Bay Point)]Redevelopment Plan,the Borrower shall make a$ Annual Community
Improvement Contribution.The Borrower acknowledges and agrees that the Community Improvement
Contribution is a condition of the Issuer's financial assistance to the Borrower evidenced by the Loan
Agreement and is not a development fee or exaction connected with any land use approvals related to the
Project. Failure of the Borrower to make any portion of the Annual Community Improvement
Contribution to the Agency at the times set forth in this Section 7A(f) shall be considered a default under
DOCSSF1:671621.2 9
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this Regulatory Agreement. The Borrower's obligation to pay the Community Improvement
Contribution to the Agency is an affirmative recourse obligation of the Borrower under this Agreement,
not subject to the nonrecourse provisions set forth in Section 11.3 of the Loan Agreement. Such payment
shall be due to the Agency prior to any disbursements of any deferred developer fee to the Borrower or
payment of any fees or distribution's to Borrower's partners or to any entity or entities affiliated with
Borrower or Borrower's partners.Notwithstanding the foregoing,(i)payment of the Annual Community
Improvement Contribution shall at all times be subordinate to the Borrower's obligations under the Bond
Documents,including but not limited to its obligations under the Loan Agreement, and(ii)if full
payment is not made Agency may file an action against Borrower and Borrower's general partner for
payment of sums due pursuant to this subsection;provided,however,the Agency agrees that any
judgment may only be required to be satisfied by payments from cashflow of the Project(following
payment of debt service and all other amounts due under the Bond Documents)or from the proceeds of
sale or refinance of the Project(and only after payment of operating expenses and of amounts due under
the Bond Documents in respect of any such*sale or refinancing or otherwise), and the Agency shall not
have the right to foreclose any judgment lien it may have filed against the Project in connection with
sums due pursuant to this subsection 7A(f)prior to any sale or refinance of the Project.
Any of the foregoing requirements of the Agency may be expressly waived by the
Agency in writing,but(i)any such waiver shall be in the Agency's sole discretion, and it shall not be
unreasonable for the Agency to refuse to grant any such waiver; (ii)no waiver by the Agency of any
requirement of this Section 7A shall, or shall be deemed to,extend to or affect any outer provision of this
Regulatory Agreement; and,(iii)any requirement of this Section 7A shall be void and of no force and
effect if the Agency and the Borrower receive a written opinion of Bond Counsel to the effect that
compliance with any such requirement would cause interest on the Bonds to cease to be Tax-Exempt or
to the effect that compliance with such requirement would be in conflict with the Act or any other state
or federal law.
The terms,provisions and requirements at this Section 7A shall expire and terminate,
without the need for any action by any of the parties to this Regulatory Agreement,upon any transfer of
the Project resulting from a foreclosure of any deed of trust securing the repayment of the Loan or a
transfer in lieu of any such foreclosure.
Section 8. Modification of Covenants. The Owner,the Trustee and the Issuer hereby
agree as follows:
(a) To the extent any amendments to the Act,the Regulations or the Code shall,in
the written opinion of Bond Counsel filed with the Issuer,the Trustee and the Owner,retroactively
impose requirements upon the ownership or operation of the Project more restrictive than those imposed
by this Regulatory Agreement, and if such requirements are applicable to the Project,this Regulatory
Agreement shall be deemed to be automatically amended to impose such additional or more restrictive
requirements.
(b) To the extent that the Act,the Regulations or the Code,or any amendments
thereto,shall,in the written opinion of Bond Counsel filed with the Issuer,the Trustee and the Owner,
impose requirements upon the ownership or operation of the Project less restrictive than imposed by this
Regulatory Agreement,this Regulatory Agreement may be amended or modified to provide such less
restrictive requirements but only by written amendment signed by the Issuer,at its sole discretion,the
Trustee and the Owner,and only upon receipt by the Issuer of the written opinion of Bond Counsel to the
effect that such amendment will not affect the Tax-Exempt status of interest on the Bonds or violate the
requirements of the Act,and otherwise in accordance with Section 22 hereof.
DOCS SFI:671621.2 10
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(c) The Owner,the Issuer and,if applicable,the Trustee, shall execute,deliver and,
if applicable, file of record any and all documents and instruments necessary to effectuate the intent of
this Section 8, and each of the Owner and the Issuer hereby appoints the Trustee as its true and lawful
attorney-in-fact to execute,deliver and,if applicable, file of record on behalf of the Owner or the Issuer,
as applicable,any such document or instrument(in such form as may be approved in writing by Bond
Counsel)if either the Owner or the Issuer defaults in the performance of its obligations under this
subsection(c);' provided,however,that unless directed in writing by'the Issuer or the Owner,the Trustee
shall take no action under this subsection without first notifying the Owner or the Issuer, or both of them,
and without first providing the Owner or the Issuer,or both,an opportunity to comply with the
requirements of this Section 8. Nothing in this subsection(c)shall be construed to allow the Trustee to
execute an amendment to this Regulatory Agreement on behalf of the Issuer or the Owner; however, if
the Issuer executes an amendment to this Regulatory Agreement,the Trustee shall also execute such
amendment unless in the reasonable opinion of a Trustee or its counsel, such execution shall adversely
affect the interests of such Trustee or the Bondholders for whom such Trustee acts.
Section 9. Indemnification; Other Payments. The Owner hereby covenants and agrees
that it shall indemnify and hold harmless the Issuer and the Trustee and their respective officers,
members,directors,officials, employees,program participants and agents as set forth in the Loan
Agreements. In addition thereto,the Owner will pay upon demand all of the fees and expenses paid or
incurred by the Trustee and/or the Issuer in enforcing the provisions hereof, as more fully set forth in
Section 5.18 of the Loan Agreement.
The provisions of this Section 9 shall survive the term of the Bonds and this Regulatory
Agreement;provided,however,the provisions of this Section shall, in the case of the Trustee, survive the
term of this Regulatory Agreement or the resignation or removal of the Trustee,but only as to claims
arising from events occurring during the term of this Regulatory Agreement or the Trustee's tenure as
Trustee under the applicable Indenture, and shall,in the case of the Issuer, survive the term of this
Agreement,but only as to claims arising from events occurring during the term of this Regulatory
Agreement.
Section 10. Consideration. The Issuer has agreed to issue the Bonds to provide funds to
lend to the Owner to finance the Project, all for the purpose,among others,of inducing the Owner to
acquire and operate the Project. In consideration of the issuance of the Bonds by the Issuer,the Owner
has entered into this Regulatory Agreement and has agreed to restrict the uses to which this Project can
be put on the terms and conditions set forth herein.
Section 11. Reliance. The Issuer and the Owner hereby recognize and agree that the
representations and covenants set forth herein may be relied upon by all persons interested in the legality
and validity of the Bonds,in the exemption from California personal income taxation of interest on the
Bonds and in the Tax-Exempt status of the interest on the Bonds. In performing their duties and
obligations hereunder,the Issuer,the Administrator and the Trustee may rely upon statements and
certificates of the Low Income Tenants, and upon audits of the books and records of the Owner
pertaining to the Project. In addition,the Issuer and the Trustee may consult with counsel,and the
opinion of such counsel shall be full and complete authorization and protection in respect of any action
taken or suffered by the Issuer or the Trustee hereunder in good faith and in conformity with such
opinion. In determining whether any default or lack of compliance by the Owner exists under this
Regulatory Agreement,the Trustee shall not be required to conduct any investigation into or review of
the operations or records of the Owner and may rely solely on any written notice or certificate delivered
to the Trustee by the Owner or the Issuer with respect to the occurrence or absence of a default.
DOCSSF1:671621.2 11
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Section 12. 'Sale or Transfer of the Proms. For the Qualified Project Period,the Owner
shall not, except as provided in the Mortgage and as set forth below, sell,transfer or otherwise dispose of
the Project,in whole or in part, without the prior written consent of the Issuer,which consent shall not be
unreasonably withheld or delayed if the following conditions are satisfied: (A)the receipt by the Issuer
of evidence acceptable to the Issuer that(1)the Owner shall not be in default hereunder or under the
Loan Agreements,if in effect(which may be evidenced by a Certificate of Continuing Program
Compliance),or the purchaser or assignee undertakes to cure any defaults of the Owner to the reasonable
satisfaction of the Issuer; (2)the continued operation of the Project shall comply with the provisions of
this Regulatory Agreement; (3)either(a)the purchaser or assignee or its property manager has at least
three years' demonstrated experience in the ownership,operation and management of similar size rental
housing projects, and at least one year's experience in the ownership,operation and management of
rental housing projects containing below-market-rate units,without any record of material violations of
discrimination restrictions or other state or federal laws or regulations or local governmental
requirements applicable to such projects,or(b)the purchaser or assignee agrees to retain a property
management firm with the experience and record described in subclause(a)above,or(c)the transferring
Owner or its management company will continue to manage the Project for at least one year following
such transfer and during such period will provide training to the transferee and its manager in the
responsibilities relating to the Low Income Units; and(4)the person or entity which is to acquire the
Project does not have pending against it,and does not have a history of significant and material building
code violations or complaints concerning the maintenance,upkeep, operation, and regulatory agreement
compliance of any of its projects as identified by any local, state or federal regulatory agencies; (B)the
execution by the purchaser or assignee of any document reasonably requested by the Issuer or the Trustee
with respect to the assumption of the Owner's obligations under this Regulatory Agreement and the Loan
Agreements(if then in effect),including without limitation an instrument of assumption hereof and
thereof, and delivery to the Issuer of an opinion of such purchaser or assignee's counsel to the effect that
each such document and this Regulatory Agreement are valid,binding and enforceable obligations of
such purchaser or assignee, subject to bankruptcy and other standard limitations affecting creditor's
rights; (C)receipt by the Issuer of an opinion of Bond Counsel addressed to�the Issuer to the effect that
3
any such sale,transfer or other disposition will not adversely affect the Tax-Exempt status of interest on
the Bonds; and(D)receipt by the Issuer and Trustee of all fees and/or expenses then currently due and
payable to the Issuer and Trustee by the Owner. The foregoing notwithstanding,the Project may be
transferred to(y) a wholly-owned subsidiary or related entity of the Owner(with an opinion of Bond
Counsel) or(z)the Trustee or the Bondholder Representative pursuant to a foreclosure, deed in lieu of
foreclosure or comparable conversion under the Mortgage,in each case,without the consent of the
Issuer. It is hereby expressly stipulated and agreed that any sale,transfer or other disposition of the
Project in violation of this Section 12 shall be null,void and without effect, shall cause a reversion of
title to the Owner,and shall be ineffective to relieve the Owner of its obligations under this Regulatory
Agreement. The written consent of the Issuer to any transfer of the Project shall constitute conclusive
evidence that the transfer is not in violation of this Section 12. Nothing in this Section shall affect any
provision of any other document or instrument between the Owner and any other party requires the
Owner to satisfy certain conditions or obtain the prior written consent of such other party in order to sell,
transfer or otherwise dispose of the Project. Upon any sale or other transfer that complies with this
Regulatory Agreement,the Owner shall be fully released from its obligations hereunder to the extent
such obligations have been fully assumed in writing by the transferee of the Project.
For the Qualified Project Period,the Owner shall not: (1)encumber any of the Project or
grant commercial leases of any part thereof,or permit the conveyance,transfer or encumbrance of any
part of the Project,except pursuant or subordinate to the provisions of this Regulatory Agreement and the
Mortgage(and upon receipt by the Owner of an opinion of Bond Counsel that such action will not
adversely affect the Tax-Exempt status of interest on the Bonds;provided that such opinion will not be
DOCSSFI:671621.2 12
40511-124 J78
required with respect to any encumbrance,lease or transfer relating to a commercial operation or
ancillary facility that will be available for tenant use and is customary to the operation of multifamily
housing developments similar to the Project), or except upon a sale, transfer or other disposition of the
Project in accordance with the terms of this Regulatory Agreement; (2)demolish any part of the Project
or substantially subtract from any real or personal property of the Project,except to the extent that what
is demolished or removed is replaced with comparable property; or(3)permit the use of the dwelling
accommodations of the Project for any purpose except rental residences.
Section 13. Term. This Regulatory Agreement and all and several of the terms hereof
shall become effective upon its execution and delivery, and shall remain in full force and effect for the
period provided herein and shall terminate as to any provision not otherwise provided with a specific
termination date and shall terminate in its entirety at the end of the Qualified Project Period, it being
expressly agreed and understood that the provisions hereof are intended to survive the retirement of the
Bonds and discharge of the Indenture and the Loan Agreements.
The terms of this Regulatory Agreement to the contrary notwithstanding,the
requirements of this Regulatory Agreement shall terminate and be of no further force and effect in the
event of involuntary noncompliance with the provisions of this Regulatory Agreement caused by fire,
seizure,requisition, foreclosure or transfer of title by deed in lieu of foreclosure of the Mortgage, change
in a federal law or an action of a federal agency after the Closing Date that prevents the Issuer and the
Trustee from enforcing such provisions,or condemnation or a similar event,but only if,within a
reasonable period, either the Bonds are retired or amounts received as a consequence of such event are
used to provide a project that meets the requirements hereof; provided,however,that the preceding
provisions of this sentence shall cease to apply and the restrictions contained herein shall be reinstated if,
at any time subsequent to the termination of such provisions as the result of the foreclosure or the
delivery of a deed in lieu of foreclosure or a similar event,the Owner or any related person(within the
meaning of Section 1.103-10(e)of the Regulations)obtains an ownership interest in the Project for
federal income tax purposes. The Owner hereby agrees that, following any foreclosure,transfer of title
by deed in lieu of foreclosure or similar event,neither the Owner nor any such related person as
described above will obtain an ownership interest in the Project for federal tax purposes.
Notwithstanding any other provision of this Regulatory Agreement,this Regulatory Agreement may be
terminated upon agreement by the Issuer,the Trustee and the Owner upon receipt by the Issuer and the
Trustee of an opinion of Bond Counsel to the effect that such termination will not adversely affect the
exclusion from gross income of interest on the Bonds for federal income tax purposes.Upon the
termination of the terms of this Regulatory Agreement,the parties hereto agree to execute, deliver and
record appropriate instruments of release and discharge of the terms hereof;provided,however,that the
execution and delivery of such instruments shall not be necessary or a prerequisite to the termination of
this Regulatory Agreement in accordance with its terms.
Section 14. Covenants to Run with the Land. Notwithstanding Section 1461 of the
California Civil Code,the Owner hereby subjects the Project to the covenants,reservations and
restrictions set forth in this Regulatory Agreement. The Issuer and the Owner hereby declare their
express intent that the covenants,reservations and restrictions set forth herein shall be deemed covenants
running with the land and shall pass to and be binding upon the Owner's successors in title to the Project;
provided,however,that on the termination of this Regulatory Agreement said covenants,reservations
and restrictions shall expire. Each and every contract,deed or other instrument hereafter executed
covering or conveying the Project or any portion thereof shall conclusively be held to have been
executed,delivered and accepted subject to such covenants,reservations and restrictions,regardless of
whether such covenants,reservations and restrictions are set forth in such contract,deed or other
instruments.
DOCSSF1:671621.2 13
40511-124 J78
Section 15. 'Burden and Benefit. The Issuer and the Owner hereby declare their
understanding and intent that the burdens of the covenants set forth herein touch and concern the land in
that the Owner's legal interest in the Project is rendered less valuable thereby.The Issuer and the Owner
hereby further declare their understanding and intent that the benefits of such covenants touch and
concern the land by enhancing and increasing the enjoyment and use of the Project by Low Income
Tenants,the intended beneficiaries of such covenants,reservations and restrictions,and by furthering the
public purposes for which the Bonds were issued.
Section 16. Uniformity; Common Plan. The covenants,reservations and restrictions
hereof shall apply uniformly to the entire Project in order to establish and carry out a common plan for
the use of the site on which the Project is located.
Section 17. Default; Enforcement. If the Owner defaults in the performance or
observance of any covenant,agreement or obligation of the Owner set forth in this Regulatory
Agreement, and if such default remains uncured for a period of 60 days after notice thereof shall have
been given by the Issuer or either Trustee to the Owner, or for a period of 60 days from the date the
Owner should,with reasonable diligence,have discovered such default,then the Issuer or the Trustee(as
directed by the Issuer, subject to the provisions of the Indenture)acting on their own behalf or on behalf
of the Issuer, shall declare an"Event of Default"to have occurred hereunder;provided,however,that if
the default is of such a nature that it cannot be corrected within 60 days,such default shall not constitute
an Event of Default hereunder so long as(i)the Owner institutes corrective action within said 60 days
and diligently pursues such action until the default is corrected,and(ii)in the opinion of Bond Counsel,
the failure to cure said default within 60 days will not adversely affect the Tax-Exempt status of interest
on the Bonds. The Issuer and the Trustee shall have the right to enforce the obligations of the Owner
under this Regulatory Agreement within shorter periods of time than are otherwise provided herein if
necessary to insure compliance with the Act or the Code.
Following the declaration of an Event of Default hereunder,the Issuer or the Trustee, at
the direction of the Issuer,subject to the provisions of the Indenture,may take any one or more of the
following steps,in addition to all other remedies provided by law or equity:
(i) by mandamus or other suit, action or proceeding at law or in equity,including
injunctive relief,require the Owner to perform its obligations and covenants hereunder or enjoin any acts
or things that may be unlawful or in violation of the rights of the Issuer or the Trustee hereunder;
(ii) have access to and inspect,examine and make copies of all of the books and
records of the Owner pertaining to the Project;
(iii) take such other action at law or in equity as may appear necessary or desirable to
enforce the obligations, covenants and agreements of the Owner hereunder; and
(iv) declare a default under the appropriate Loan Agreement and proceed with any
remedies provided therein.
The Owner hereby agrees that specific enforcement of the Owner's agreements
contained herein is the only means by which the Issuer may fully obtain the benefits of such Loan
Agreements made by the Owner herein, and the Owner therefore agrees to the imposition of the remedy
of specific performance against it in the case of any Event of Default by the Owner hereunder.
DOCSSFI:671621.2 14
40511-124 J78
Each Trustee shall have the right,in accordance with this Section and the provisions of
the applicable Indenture, without the consent or approval of the Issuer,to exercise any or all of the rights
or remedies of the Issuer hereunder;provided that prior to taking any such action such Trustee shall give
the Issuer and the Bondholder Representative written notice of its intended action. After the Indenture
has been discharged,the Issuer may act on its own behalf to declare an"Event of Default"to have
occurred and to take any one or more of the steps specified hereinabove to the same extent and with the
same effect as if taken by the Trustee.
Promptly upon determining that a violation of this Regulatory Agreement has occurred,
the Issuer or either Trustee shall,by written notice,inform the Bondholder Representative that such
violation has occurred,the nature of the violation and that the violation has been cured or has not been
cured,but is curable within a reasonable period of time, or is incurable. A Trustee shall not be deemed to
have knowledge of any default hereunder unless such Trustee shall have been specifically notified in
writing of such default by the Issuer,the Administrator,the other Trustee or the Bondholders of at least
25%of the aggregate principal amount of Bonds outstanding under either Indenture.
All reasonable fees,costs and expenses of the Trustee and the Issuer incurred in taking
any action pursuant to this Section shall be the sole responsibility of the Owner;provided,however,that
in the event that any action arising hereunder with the Owner and the Trustee as adversaries,the
prevailing party, if any, shall be entitled to recover legal fees and costs from the other party.
Section 18. The Trustee. The Trustee shall act as specifically provided herein and in the
Indenture and may exercise such additional powers as are reasonably incidental hereto and thereto. The
Trustee shall have no duty to act with respect to enforcement of the Owner's performance hereunder as
described in Section 17 unless it shall have knowledge of any such default as provided in Section 17.
The Trustee may act as the agent of and on behalf of the Issuer,and any act required to be performed by
the Issuer as herein provided shall be deemed taken if such act is performed by the Trustee. In
connection with any such performance,the Trustee is acting solely as Trustee under the Indenture and
not in its individual capacity, and,except as expressly provided herein,all provisions of the Indenture
relating to the rights,privileges,powers and protections of the Trustee shall apply with equal force and
effect to all actions taken(or omitted to be taken)by the Trustee in connection with this Regulatory
Agreement. Neither the Trustee nor any of its officers, directors or employees shall be liable for any
action taken or omitted to be taken by it hereunder or in connection herewith except for its or their own
negligence or willful misconduct.
The Issuer shall be(or shall cause the Administrator to be)responsible for the
monitoring of the Owner's compliance with the terms of this Regulatory Agreement. The Trustee shall
not be responsible for such monitoring.
After the date on which no Bonds remain Outstanding,as provided in the Indenture,the
Trustee shall no longer have any duties or responsibilities under this Regulatory Agreement and all
references to the Trustee in this Regulatory Agreement shall be deemed references to the Issuer.
Section 19. Recording and Filing. (a)The Owner shall cause this Regulatory Agreement
and all amendments and supplements hereto and thereto,to be recorded and filed in the real property
records of the County of Contra Costa, and in such other places as the Issuer or the Trustee may
reasonably request. The Owner shall pay all fees and charges incurred in connection with any such
recording.
DOCSSF 1:671621.2 15
40511-124 J78
(b) The Owner and the Issuer will file of record such other documents and take such
other steps as are reasonably necessary,in the opinion of Bond Counsel,in order to insure that the
requirements and restrictions of this Regulatory Agreement will be binding upon all owners of the
Project.
(c) The Owner hereby covenants to include or reference the requirements and
restrictions contained in this Regulatory Agreement in any documents transferring any interest in the
Project to another person to the end that such transferee has notice of, and is bound by,such restrictions,
and,except in the case of a foreclosure or comparable involuntary conversion of the Mortgage,whereby
either Trustee becomes the owner of the Project,to obtain the agreement from any transferee to abide by
all requirements and restrictions of this Regulatory Agreement.
Section 20. Payment of Fees. Notwithstanding any prepayment of the Loans and
notwithstanding a discharge of the Indenture,the Owner shall continue to pay(or,to the extent allowed
under the Code, shall prepay the present value at such time of)the Issuer Fee and expenses as provided in
Section 7 of this Regulatory Agreement and the Loan Agreements for the Qualified Project Period,unless
such loan prepayment is made in connection with a refunding of the Bonds.
Section 21. Governing Law. This Regulatory Agreement shall be governed by the laws
of the State of California.
Section 22. Amendments-,Waivers. (a)Except as provided in Section 8(a)hereof,this
Regulatory Agreement may be amended only by a written instrument executed by the parties hereto or
their successors in title, and duly recorded in the real property records of the County of Contra Costa,and
only upon receipt by the Issuer of(i) an opinion from Bond Counsel that such amendment will not
adversely affect the Tax-Exempt status of interest on the Bonds and is not contrary to the provisions of
the Act,and(ii)the written consent of the Bondholder Representative.
(b) Anything to the contrary contained herein notwithstanding,the Issuer,the
Trustee and the Owner hereby agree to amend this Regulatory Agreement to the extent required,in the
opinion of Bond Counsel,in order that interest on the Bonds remain Tax-Exempt. The parties requesting
such amendment shall notify the other parties to this Regulatory Agreement,the Bondholder
Representative of the proposed amendment,with a copy of such proposed amendment to Bond Counsel
and a request that Bond Counsel render to the Issuer an opinion as to the effect of such proposed
amendment upon the Tax-Exempt status of interest on the Bonds. This provision shall not be subject to
any provision of any other agreement requiring any party hereto to obtain the consent of any other person
in order to amend this Regulatory Agreement.
(c) Any waiver of,or consent to,any condition under this Regulatory Agreement
must be expressly made in writing.
Section 23. Notices. Any notice required to be given hereunder shall be made *in writing
and shall be given by personal delivery, overnight delivery,certified or registered mail,postage prepaid,
return receipt requested,or by telecopy,in each case at the respective addresses specified in the
Indenture, or at such other addresses as may be specified in writing by the parties hereto.
DOCSSFI:671621.2 16
40511-124 J78
The Issuer,the Administrator(if other than the Issuer), the Trustee,the Bondholder
Representative and the Owner may,by notice given hereunder, designate any further or different
addresses to which subsequent notices, certificates or other communications shall be sent. Notice shall
be deemed given on the date evidenced by the postal or courier receipt or other written evidence of
delivery or electronic transmission;provided that any telecopy or other electronic transmission received
by any party after 4:00 p.m., local time of the receiving party, as evidenced by the time shown on such
transmission, shall be deemed to have been received the following Business Day.
A copy of each notice sent by or to the Owner shall also be sent to the Bondholder
Representative and the manager of the Project at the address of the manager provided by the Owner to
the Administrator;but such copies shall not constitute notice to the Owner,nor shall any failure to send
such copies constitute a breach of this Regulatory Agreement or a failure of or defect in notice to the
Owner.
Section 24. Severability. If any provision of this Regulatory Agreement shall be invalid,
illegal or unenforceable,the validity, legality and enforceability of the remaining portions hereof shall
not in any way be affected or impaired thereby.
Section 25. Multiple Counterparts. This Regulatory Agreement may be simultaneously
executed in multiple counterparts, all of which shall constitute one and the same instrument, and each of
which shall be deemed to be an original.
Section 26. Limitation on Liability. Notwithstanding the foregoing or any other
provision or obligation to the contrary contained in this Regulatory Agreement, (i)the liability of the
Owner under this Regulatory Agreement to any person or entity,including,but not limited to,the Trustee
or the Issuer and their successors and assigns, is limited to the Owner's interest in the Project,the Rents
and the amounts held in the funds and accounts created under the Indenture,or any rights of the Owner
under any guarantees relating to the Project, and such persons and entities shall look exclusively thereto,
or to such other security as may from time to time be given for the payment of obligations arising out of
this Regulatory Agreement or any other agreement securing the obligations of the Owner under this
Regulatory Agreement; and(ii)from and after the date of this Regulatory Agreement,no deficiency or
other personal judgment,nor any order or decree of specific performance(other than pertaining to this
Regulatory Agreement, any agreement pertaining to any Project or any other agreement securing the
Owner's obligations under this Regulatory Agreement),shall be rendered against the Owner, the assets of
the Owner(other than the Owner's interest in the Project,this Regulatory Agreement,amounts held in
the funds and accounts created under the Indenture, any rights of the Owner under the Indenture or any
other documents relating to the Bonds or any rights of the Owner under any guarantees relating to the
Project),its partners,members, successors,transferees or assigns and each their respective officers,
directors,employees,partners, agents,heirs and personal representatives, as the case may be,in any
action or proceeding arising out of this Regulatory Agreement and the Indenture or any agreement
securing the obligations of the Owner under this Regulatory Agreement,or any judgment,order or decree
rendered pursuant to any such action or proceeding, except to the extent provided in the Loan
Agreements.
Section 27. Third-Party Beneficiary. CDLAC is intended to be and shall be a third-party
beneficiary of this Regulatory Agreement. CDLAC shall have the right(but not the obligation)to
enforce the CDLAC Conditions and to pursue an action for specific performance or other available
remedy at law or in equity in accordance with Section 17 hereof;provided that any such action by
CDLAC or remedy shall not materially adversely affect the interests and rights of the Bondholders.
DOCSSF1:671621.2 17
40511-124 J78
IN WITNESS WHEREOF,the Issuer,the Trustee and the Owner have executed this
Regulatory Agreement by duly authorized representatives, all as of the date first above written.
COUNTY OF CONTRA COSTA
By:
Deputy Director Redevelopment
CONTRA COSTA COUNTY REDEVELOPMENT
AGENCY
By:
James Kennedy
Redevelopment Director
WELLS FARGO BANK,NATIONAL ASSOCIATION, as
Trustee
By
Authorized Signatory
STEADFAST HIDDEN COVE,L.P.,a California limited
partnership
[By: Affordable Housing Access,Inc., a California nonprofit
public benefit corporation,its Managing General Partner
By.
Jonathan B. Webb,Executive Director
By: Steadfast HCA,L.P., a California limited partnership, its
Co-General Partner
By: Steadfast HCA,LLC, a Delaware limited liability
company,its General Partner
By: China Cove Holdings, LLC, a Delaware
limited liability company,its Manager
By.
Kyle Winning,
Authorized Representative]
DOCSSF1:671621.2
40511-124 J78
EXHIBIT A
DESCRIPTION OF REAL PROPERTY
DOCSSF 1:671621.2
40511-124 J78 A-1
EXHIBIT B
[FORM OF INCOME CERTIFICATION]
VERIFICATION OF INCOME
RE: [Project Name]
[Address of Project]
Apartment Number: Initial Occupancy Date:
I/We,the undersigned,being first duly sworn, state that I/we have read and answered fully, and
truthfully each of the following questions for all'persons who are to occupy the unit in the above apartment
development for which application is made,all of whom are listed below:
1. 2. 3. 4. 5.
Name of Relationship to Age Social Security Place of
Members Head of Number Employment
of the Household Household
Head of Household
Spouse
6. The anticipated income of all the above persons during the 12-month period beginning
this date, including income described in (a) below, but excluding all income described in (b) below, is
(a) The amount set forth above includes all of the following income(unless such income is
described in(b)below):
(i) all wages and salaries, over-time pay, commissions, fees, tips and bonuses
before payroll deductions;
(ii) net income from the operation of a business or profession or from the rental of
real or personal property (without deducting expenditures for business'expansion or amortization of
capital indebtedness or any allowance for depreciation of capital assets);
(iii) interest and dividends (include all income from assets as-set forth in item 7(b)
below);
DOCSSFI:671621.2
40511-124 J78 B-1
(iv) the full amount of periodic payments received from social security, annuities,
insurance policies, retirement funds, pensions, disability or death benefits and other similar types of
periodic receipts;
(v) payments in lieu of earnings, such as unemployment and disability
compensation,workmen's compensation and severance pay;
(vi) the maximum amount of public assistance available to the above persons;
(vii) periodic and determinable allowances, such as alimony and child support
payments and regular contributions and gifts received from persons not residing in the dwelling;
(viii) all regular pay, special pay and allowances of a member of the Armed Forces
(whether or not living in the dwelling)who is the head of the household or spouse; and
(ix) any earned income tax credit to the extent it exceeds income tax liability.
(b) The following income is excluded from the amount set forth above:
(i) casual, sporadic or irregular gifts;
(ii) amounts which are specifically for or in reimbursement of medical expenses;
(iii) lump sum additions to family assets, such as inheritances, insurance payments
(including payments under health and accident insurance and worker's compensation),capital gains and
settlement for personal or property losses;
(iv) amounts of educational scholarships paid directly to a student or an educational
institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition,
fees,books and equipment,but in either case only to the extent used for such purposes;
(v) hazardous duty to a member of the household in the armed forces who is away
from home and exposed to hostile fire;
(vi) relocation payments under Title II of the Uniform Relocation Assistance and
Real Property Acquisition Policies Act of 1970;
(vii) income from employment of children (including foster children) under the age
of 18 years;
(viii) foster child care payments;
(ix) the value of coupon allotments under the Food Stamp Act of 1977;
(x) payments to volunteers under the Domestic Volunteer Service Act of 1973;
(xi) payments received under the Alaska Native Claims Settlement Act;
(xii) income derived from certain submarginal land of the United States that is held
in trust for certain 1ndian tribes;
(xiii) payments on allowances made under the Department of Health and Human
Services' Low-Income Home Energy Assistance Program;
DOCSSF i:67162 t Z
40511-124 J78 $-2
(xiv) payments received from the Job Partnership Training Act;
(xv) income derived from the disposition of funds of the Grand River Band of
Ottawa Indians; and
(xvi) the first $2000 of per capita shares received from judgment funds awarded by
the Indian Claims Commission or the Court of Claims or from funds held in trust for an Indian tribe by
the Secretary of Interior.
7. If any of the persons described in column I above (or any person whose income or
contributions were included in item 6) has any savings, stocks, bonds, equity in real property or other form of
capital investment(excluding interests in Indian trust lands),provide:
(a) the total value of all such assets owned by all such persons: $ and
(b) the amount of income expected to be derived from such assets in the 12-month period
commencing this date: $
8. (a)Will all of the persons listed in column I above be or have they been full-time
students during five calendar months of this calendar year at an educational institution (other than a
correspondence school)with regular faculty and students?
Yes No
(b) (Complete only if the answer to Question 8(a)is"Yes"). Is any such person(other than
nonresident aliens)married and eligible to file a joint federal income tax return?
Yes No
We acknowledge that all of the foregoing information is relevant to the status under federal
income tax law of the interest on bonds issued to finance the acquisition and rehabilitation of the apartment
building for which application is being made. We consent to the disclosure of such information to the issuer of
such bonds, the holders of such bonds, any trustee acting on their behalf and any authorized agent of the
Treasury Department or Internal Revenue Service.
We declare under penalty of perjury that the foregoing is true and correct.
Date:
Head of Household
Spouse
DOCSSFI:671621.2
40511-124 J78 B-3
FOR COMPLETION BY PROJECT OWNER ONLY:
I. Calculation of eligible income:
(A) Enter amount entered for entire household from 6 above: $
(B) If the amount entered in 7(a)above is greater than$5,000,
enter:
(i) the product of the amount entered in 7(a)above
multiplied by the current passbook savings rate as
determined by HUD: $
(ii) the amount entered in 7(b)above: $
(iii) line(i)minus line(ii)(if less than$0,enter$0): $
(C) TOTAL ELIGIBLE INCOME(Line I(A)plus line I(B)(iii)): $
II. Qualification as individuals or a family of Low Income:
(A) Is the amount entered in line I(C) less than 50%of median gross income for the Area?
Yes No
(B) (i) If line II(A) is "No,"then the household does not qualify as individuals or a family of
Low Income; go to item III.
(ii) If line II(A) above is "Yes" and 8(a) above is "No," then the household qualifies as
individuals or a family of Low Income; go to item M.
(iii) If line II(A) above is "Yes" and 8(b) above is "Yes," then the household qualifies as
individuals or a family of Low Income;go to item III.
(iv) If neither (ii) nor (iii) is applicable, then the household does not qualify as individuals
or a family of Low Income.
DOCSSF1:671621.2
40511-124 J78 B-4
III. (Check one)
The household does not qualify as individuals or a family of Low Income.
The-household qualifies as individuals or a family of Low Income.
IV. Number of apartment unit assigned:
(enter here and on page one)
Owner
NOTE TO PROJECT OWNER: A vacant unit previously occupied by individuals or a family of Low
Income,may be treated as occupied by individuals or a family of Low Income until reoccupied, other than for a
period of 31 consecutive days or less, at which time the character of the unit shall be redetermined.
DOCSSF1:671621.2
40511-124 J78 $-5
EXHIBIT C
[FORM OF CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE]
CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
Witnesseth that on this day of , 20 , the undersigned, having borrowed
certain funds from the COUNTY OF CONTRA COSTA (the "Issuer") for the purpose of financing a
multifamily rental housing development(the"Project"), does hereby certify that:
1. During the preceding month (i) such Project was continually in compliance with the
Regulatory Agreement executed in connection with such loan from the Issuer, (ii) % of the units in the
Project were occupied by Low Income Tenants(minimum of 20%).
Set forth below are the names of Low Income Tenants who commenced or terminated
occupancy during the preceding month.
Commenced Occupancy Terminated Occupancy
1. 1.
2. 2.
3. 3.
The units occupied by Low Income Tenants are of similar size and quality to other units and are
dispersed throughout the Project. Attached is a separate sheet listing the number of each unit and indicating
which units are occupied by Low Income Tenants, the size, the number of bedrooms of such units and the
number of Low Income Tenants who commenced occupancy of units during the preceding month.
2. Select appropriate certification: [No unremedied default has occurred under this
Regulatory Agreement, the Loan Agreements, the Note, or the Mortgage.] [A default has occurred under the
. The nature of the default and the measures being taken to remedy such default are as follows:
.]
3. The representations set forth herein are true and correct to the best of the undersigned's
knowledge and belief.
Date:
Owner
DOCSSF1:671621.2
40511-124 J78 C-1
BOND PROGRAM REPORT
Property:
Location:
Today's Date: Submitted by:
Total#Units: Total Units Occupied:
JTotal New Rentals(Occupied)
Total Habitable/Livable Units: Current Month/Quarter:
(Rehabilitation Projects Only)
Total Lower Income New Lower Income Rentals
Units Occupied: Current Month/Quarter:
% Of Lower Income Units Occupied to Total Units:
#Of Units Held vacant and available for Rent to Lower Income Tenants:
PLEASE LIST ALL BOND PROGRAM UNITS BELOW IN NUMERIC OR ALPHABETIC ORDER:
(Indicate"V"if vacant)
Gross Annual
Tenant Household
Unit Tenant's Last No.of No.of Monthly Income(all Date of
No. Name(s) Occ. Bedrm Rent* sources) Certification
*If tenant(s) are on an Assisted Rental Program such as Section 8,only list tenant portion of rent
DOCSSFI:671621.2
40511-124 J78 C-2
Gross Annual
Tenant Household
Unit Tenant's Last No. of No. of Monthly Income(all Date of
No. Name(s) Occ. Bedrm Rent* sources) Certification
DOCSSF1:671621.2
40511-124 J78 C-3
EXHIBIT C-2
[FORM OF CERTIFICATE OF CDLAC PROGRAM COMPLIANCEI
CERTIFICATE OF CDLAC PROGRAM COMPLIANCE
Witnesseth that on this day of 20—, the undersigned, having
borrowed certain funds from the County of Contra Costa (the "Issuer") for the purpose of financing a
multifamily rental housing development(the "Project")located in Contra Costa County, California, does
hereby certify that:
1. [The Owner is in compliance with the CDLAC Conditions (as defined in the
Regulatory Agreement relating to the Project).] [The Owner is not in compliance with Condition No.
of the CDLAC Conditions. The following measures are being taken to remedy such noncompliance
2. The representations set forth herein are true and correct to the best of the
undersigned's knowledge and belief.
Date:
Owner
DOCSSFI:671621.2
40511-124 J78 C4