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HomeMy WebLinkAboutRDA Res 82-03 1982-02-25 - I . n --" I . RESOLUTION NO. 82-3 RESOLUTION AUTHORIZING THE ISSUANCE OF RESIDENTIAL MORTGAGE REVENUE 80NDS OF THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH, ISSUE OF 1982 RESOLVED, by the Redevelopment Agency of the City of Seal Beach, that WHEREAS, the legislature of the State of California has authorized redevelopment agencies to make long-term, low-interest loans through qualified mortgage lenders to finance residential construction and rehabilitation in redevelopment project areas (and, under certain circumstances, outside of such areas) in order to encourage investment and upgrading of such areas, and to issue bonds for the purpose of financing such constructio~; WHEREAS, the Redevelopment Agency of the City of Seal Beach has determined to provide for the issuance of res i dent i a 1 mortgage revenue bonds, the proceeds of which are to be used to purchase mortgage loans to be made to finance the acquisition of residences within the residential development identified herein; and WHEREAS, all acts, conditions and thin9s required by law to exist, happen and be performed precedent to and in connection with the issuance of said revenue bonds exist, have happened and have been performed in regular and due time, fonn and manner as required by 1 aw, and thi s Agency is now duly empowered to issue said revenue bonds; NOW, THEREFORE IT IS ORDERED AS FOLLOWS: - ARTICLE I DETERMINATIONS AND DEFINITIONS Section 1.01. Authority and Purpose. This Resolution is adopted under the authority of and in accordance with the provisions of the Act, for the purpose of authorizing the issuance of Bonds in order to provide funds with which to purchase Mortgage Loans for the purpose of facilitating an increase in the supply of urban housing and easing the housing shortage that exists in many parts of the State, encouraging residents of the State of all social and economic positions to reinhabit urban areas, thereby rendering those areas more socially balanced and economically self-sufficient, reducing pressures for suburbanization and thereby mitigating many of the problems caused by urban migration, including the inefficient use of scarce energy resources and urban sprawl and stimulating urban building and construction activity, thereby increasing urban employment and improving the urban tax base, all within the I Project Area located in the City; and for the purpose of establishing covenants, agreements and procedures to assure that revenues recei ved from purchas i ng such Mortgage Loans wi 11 be suffi ci ent for the repayment of money borrowed for this purpose, and that revenues exceeding the amounts needed for this purpose will be applied in accordance with law for other programs authorized by the Act. Section 1.02. Contract with Trustee, Bondholders and Bank. As provided in the Act and in consideration of (i) the acceptance by Trustee of the trusts herein created and of the purChase and acceptance of Bonds issued hereunder by . any who shall from time to time be holders thereof and (ii) the execution of the Letter of Credit Agreement and the issuance of the Letter of Credit pursuant thereto by Bank: (a) the provisions of this Resolution shall be a contract of Agency with Trustee, the holders of the Bonds and the Bank; (b) Agency covenants that it will cause to be paid to and deposited with Trustee, or to Trustee's credit with fiduciaries designated by Agency, all proceeds of Bonds, all payments of Mortgage Loans and securities purchased from such proceeds and all income and receipts therefrom; (c) Agency grants a security interest in and pledges and assigns to Trustee for the payment (a) of the principal of, premium, if any, and interest on the Bonds, at the times and in the manner provided in thi s Resolution, and (b) of Repayment Obligations under the Letter of Credit (i) all proceeds of the sale of Bonds, (ii) all of its interest in the Mortgage Loans and investments in Permitted Investments purchased from such proceeds, (iii) all Revenues, (iv) all money, Permitted Investments and other assets and income held in and receivable by funds and accounts established by or pursuant to this Resolution and (v) all right, title I 2 . - and interest in, to and under the Developer Agreement (including the commitment fees payable thereunder), the Origination and Servicing Agreement and the Letter of Credi t Agreement and the Letter of Credit issued pursuant thereto; all subject to the power of Agency to direct withdrawals of amounts from said funds and accounts upon the conditions set forth in this Resolution; (d) the pledge and assignment made and security interest granted herein and the covenants and agreements herein set forth, to be performed by and on behalf of Agency, shall be for the equal benefit, protection and security of (i) holders of all such Bonds, all of which, regardless of the time or times of their issue or maturity, shall be of equal rank without preference, priority or distinction of any Bond over any other except as expressly provided or permitted herein and (i i) the Bank; . (e) the foregoing pledge and assignment and grant of lien and security interest to the Trustee for the security and benefit of the Bondholders shall be on a parity with the foregoing pledge, assignment and grant made by the Agency to the Trustee for the security and benefit of the Bank and are val id and binding from the time when made; the property so pledged and assigned, both as to property now held and property hereafter received by Agency shall be subject immediately to the 1 i en hereof and the security interest hereby created without any physical delivery or further act; the lien of such pledge and assignment and such security interest shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against Agency, whether or not such parties have notice thereof; and neither this Resolution nor any other instrument by which such pledge and assignment and security interest is created need be recorded; (f) the Bonds and the Repayment Obl igations are special obligations of Agency payable solely out of Bond proceeds, Revenues and other amounts derived by Agency on Mortgage Loans acquired with Bond proceeds (including earnings thereon and certain insurance with respect thereto), Drawings under the Letter of Credit and certain reserve funds. Neither the Bonds nor the Repayment Obligations will constitute a debt or liability of the City, the State or any political subdivision thereof, other than Agency, and neither said City, State, nor any of its political subdivisions is liable thereon, nor in any event shall said principal and interest and Repayment Obligations be payable out of any funds or propert i es other than all or any part of the Revenues and other funds and sources as in this Resolution set forth. Neither the faith and credit nor the taxing power of the City of Seal Beach, Agency, the State of California or any pol itical subdivision thereof is pledged to the payment of the Bonds and Repayment Obl igations. Neither the Bonds nor the Repayment Obligations constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. Neither the members of Agency nor any persons executing the Bonds or the Repayment Obligations shall be liable personally on the I r' I . 3 Bonds or the Repayment Obligations or subject to any personal liability or accountability by reason of the issuance and execution thereof. all words Agreement in this have the Section 1.03. Definitions. Unless otherwise defined herein, and phrases defined in Article I of the Origination and Servicing and of the Developer Agreement shall have the same meaning Resolution. In addition, the following words and phrases shall following meanings: "Accumulation Reserve Subaccount" means the account by that name created pursuant to Section 5.02 hereof. "Act" means the Redevelopment Construction Loans Act, Chapter 8, cOl1l11encing with Section 33750, of Part 1 of Division 24 of the California Health and Safety Code of the State, as amended, as of the date of adoption of this Resolution. . "Agency" means the Redevelopment Agency of the City of Seal Beach. "Agreement" means the Origination and Servicing Agreement dated as of I February 1, 1982, among Agency, First Interstate Bank of California and Trustee, including any and all appendices and exhibits thereto. "Authorized Officer" means the Chairman, Vice Chairman Director of Agency or any other person authorized by resolution perform an act or sign a document. "Bank" means First Interstate Bank of California. or Execut i ve of Agency to "Bond or Bonds" means the Redevelopment Agency of the City of Seal Beach Residential Mortgage Revenue Bonds, Issue of 1982, issued pursuant to Section 2.02 of this Resolution, and registered as to both principal and interest and payable to the registered owner. "Bond Fund" means the fund by that name created pursuant to Section 5.02 hereof. "Bondholder" or "holder of Bonds" or "owner of Bonds" means the registered owner of any Bond. "Bond Year" means the twelve (12) month period commencing on the 1st day of March of any calendar year and ending on the last day of February of the following calendar year. "City" means the City of Seal Beach. "Code" means the Internal Revenue Code of 1954, as amended. "Debt Service" means the amount of interest or principal or sinking fund payments and interest due and payable on the Bonds on any Interest Payment Date. 4 . I . - 1 . I I . "Debt Service Reserve Fund" means the fund by that name created pursuant to Section 5.02 hereof. "Debt Service Reserve Fund Requirement" means an amount equal to ten percent (10%) of the principal amount of the Bonds issued. "Default" and "event of default" mean any occurrence or event specified in Section 8.01 hereof. "Delinquent Period" means any period of time commencing on the day on which a Drawing has been made and ending on the day on which all such Drawings and accrued interest thereon have been repaid in full in accordance with the Letter of Credit Agreement. "Developer Agreement" means the Developer Agreement dated as of February 1, 1982, between Agency and the Developer, including any and all appendices and exhibits thereto. "Drawings" means payments by Bank pursuant to the Letter of Credit. "General Account" means the account by that name created by Section 5.02 hereof. "Governmental Obl igations" means direct general ob1 igations of, or obligations the payment of the principal of and interest on which are unconditionally guaranteed by, the United States of America. "Investment Agreement" means the Investment Agreement among Home Federal Savings & Loan Association of San Diego, the Agency and the Trustee dated as of March 16, 1982. "Insurance Proceeds" means payments received by Originator/Servicer or Trustee under any title insurance policy or any insurance policy referred to in Section 5.06, 5.07, 5.08 or 5.09 of the Agreement with respect to Mortgage Loans. "Interest Payment Date" means each March 1 and September 1, commencing March 1, 1983, to and including March 1, 2015. "Issuance Expense Account" means the account by that name created pursuant to Section 5.02 hereof. "Letter of Credit" or "Irrevocable Letter of Credit" means the then outstanding Irrevocable Letter of Credit issued by the Bank to the Trustee for the account of the Agency, pursuant to the Letter of Credit Agreement. "Letter of Credit Agreement" means that certain agreement dated as of February 1, 1982, among the Bank, Trustee and the Agency, providing for the issuance of an Irrevocable Letter of Credit on each March 16, conmencing on 5 the date of issuance of the Bonds and expiring on the following March 15 in order to secure Debt Service. "Liquidation Proceeds" means amounts (other than Insurance Proceeds) received by Originator/Servicer in connection with the liquidation of defaulted Mortgage Loans, whether through trustee's sale, foreclosure or otherwise. "Mortgage" means a deed of trust or other instrument which constitutes a first deed of trust and lien in the State on improvements on leasehold estates, together with a promissory note, the holder of which is either the Agency, the Trustee or an Originator/Servicer, and the debt of which is secured by improvements on the leasehold estate located as required in the Act. "Mortgage Loan Account" means the account by that name created pursuant to Section 5.02 hereof. . "r~ortgage Loans" means the mortgage loans to Mortgagors made by Originator/Servicer on behalf of the Agency and funded by Trustee on behalf of I Agency pursuant to the Agreement, evidenced by the Mortgage Notes secured by the related Mortgages. "Mortgage Note" means the promissory note executed by the Mortgagor pursuant to the Agreement to evidence the Mortgagor's obligation to repay the Mortgage Lo an. "Mortgage Reserve Fund" means the fund by that name created by Section 5.02 hereof. "Mortgage Reserve Fund Requirement" means an amount equal to 2 percent of the unpaid principal amount of all Mortgage Loans outstanding as of the date of calculation. . "Mortgagee" means Trustee on behalf of Agency or other holder of a Mortgage Note. "Mortgagor" means a maker of, or any other party obl igated on, a ", Mortgage Note. "Notice Address" means: (a) As to Issuer: Redevelopment Agency of the City of Seal Beach City Hall 211 8th Street Seal Beach, California 90740 6 I . - I . r-' I . (b) As to Trustee: Security Pacific National Bank Corporate Trust Administration, 42nd Floor 333 South Hope Street Los Angeles, California 90071 (c) As to Ori9inatorlServicer: First Interstate Mort9age Company 245 S. Los Robles Pasadena, California 91109 (d) As to Bank: First Interstate Bank of California Letter of Credit Department 707 Wilshire Boulevard, W-28-1 Los Angeles, California 90017 "OriginatorIServicer" means First Interstate Bank of California, the home mortgage lending institution or entity which has agreed to originate and service Mortgage Loans pursuant to, and which has otherwise met the criteria set forth in, the Agreement. "Outstanding" or "Bonds Outstanding" or "Outstanding Bonds" mean all Bonds which have been authenticated and delivered by Trustee under this Resolution, except: (a) Bonds canceled after purchase in the open market or because of payment at or redemption prior to maturity; (b)"' Bonds for the payment or redempti on of which cash funds or Governmental Obligations or any combination thereof shall have been theretofore deposited with Trustee (whether upon or prior to the maturity or redemption date of any such Bonds); provided that, if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given or arrangements satisfactory to Trustee shall have been made therefor, or waiver of such notice satisfactory in form to Trustee shall have been filed with Trustee; and (c) Bonds in lieu of which other Bonds have been authenticated under Section 2.07 hereof. "Permitted Investments" means any of the following which at the time are 1 ega 1 investments for the Agency under the laws of the State, and to the extent provided by law, for the IIKlneys held hereunder then proposed to be invested therein: (i) time or demand deposits in, or other banking arrangements with, any bank, trust company or savings and loan association having aggregate capital and surplus of at least $50,000,000 and authorized to 7 . accept deposits of public funds (including the banking department of the Trustee), which are secured, to the extent required by law, at all times by bonds or other obligations which are authorized by law as security for public deposits, of a market value at least equal to the amount required by law; (ii) any securities or obligations of a bank holding company, the principal banking subsidiary of which has aggregate capital and surplus of at least $50,000,000 or obligations, participations, or other instruments of, or issued by a privately or publicly held corporation which obligations, participations or other instruments are fully secured or guaranteed by a 1 ine of credit, letter of credit, or other security instrument issued by a privately or publicly held corporation which obligations, participations or other instruments are fully secured or guaranteed by a line of credit, letter of credit, or other security instrument issued by any bank, trust company or savings and loan association having aggregate capital and surplus of at least $50,000,000; (iii) United States Treasury notes, bonds, bills or certificates of indebtedness, or obl igations for which the full faith and credit of t~e United States are pledged for payment of principal and interest; (iv) obligations, participations or other instruments of, or issued by, or fully guaranteed as to principal and interest by, FNMA, or issued by a Federal Agency or a United I States Government sponsored enterpri se; (v) repurchase agreement secured by any of the above; or (vi) the Investment Agreement. Unless the context otherwise requires, the term "principal" when used with respect to payments on the Bonds includes sinking fund payments. "Principal Account" means the account by that name created by Section 5.02 hereof. "Principal Prepayment" means any borrower payment or other recovery of principal (including Prepayment Charges, if any, with respect thereto) on a Mortgage Loan which is received in advance of its scheduled due date and is not accompanied by an amount representing scheduled interest for any month subsequent to the month of prepayment, and the portion of any insurance, liquidation or other payments representing such principal amounts. "Principal Prepayment Subaccount" means the subaccount by that name created by Section 5.02 hereof. "Private Mortgage Insurance Pol icy" means a mortgage insurance pol icy issued by the American Mortgage Insurance Corporation, which pol icy meets the criteria described in Section 4.08(iv) of the Agreement. "Program Expenses" means premiums for the fees, expenses, and charges of Trustee and any accountant incurred with respect to requirements and duties of Agency under this Resolution or in connection with the Agreement, the Developer Agreement, any Mortgage Loan or Prepayment, all to the extent properly allocable to the Agency's Residential Mortgage Loan Purchase Program, adopted February 25, 1982, plus the commitment fees to Bank pursuant to the Letter of Credit Agreement. 8 . I . - I . (-, I . "Project Area" means the Riverfront Redevelopment Project Area, a project area as defined in Section 33320.1 of the Health and Safety Code of the State. "Receipts Account" means the account by that name maintained by the Originator/Servicer pursuant to Section 5.02 of the Agreement. "Redemption Date" means the date, as specified by notice given pursuant to Section 3.03, upon which Bonds are called prior to maturity to be presented for redemption and payment of the Redemption Price. "Redemption Price" means, with respect to any Bond or portion thereof, the principal amount of such Bond or portion, plus the applicable premium, if any, payable upon redemption thereof. "Repayment Obl igations" means the obl igations of the Agency under the Letter of Credit Agreement, including the obligation to repay to Bank any Drawings, and interest thereon under the Letters of Credit. "Reserves" means the Mortgage Reserve Fund, the Debt Service Reserve Fund and the Accumulation Reserve Subaccount. "Residence" means a single family townhouse unit owned and occupied by the Mortgagor, which is located in the Residential Development and which satisfies other requirements which Agency may from time to time establish. "Res i denti a 1 Mortgage Loan Purchase Program" or "Program" means and includes any act or thing done by the Agency, the Trustee, and the Originator/Servicer under the Resolution for the purpose of providing financing for residential construction including the purchase of Mortgage Loans in order to accomplish such financing for the purpose of alleviating the shortage of, reducing the cost of, and encouraging and assisting residential construction. "Resolution" means this Resolution, Resolution No. 82-3 adopted February 25, 1982, as it may from time to time be amended, modified or supplemented as herein provided. "Revenues" means all payments, proceeds, charges, rents and all interest and other income derived in cash by Trustee or the Originator/Servicer by or for the account of Agency from or related to the Mortgage Loans, including, without limiting the generality of the foregoing, scheduled amortization payments of prinCipal of and interest on the Mortgage Loans, Principal Prepayments, the proceeds of the sale of Mortgage Loans, the proceeds of the sale of Residences on foreclosure or other recovery proceedings with respect to defaulted Mortgage Loans (net of amounts required to be paid to borrowers g or other persons having an interest in the Residences), the proceeds of Pri vate f40rtgage Insurance Pol icies, the Hazard Insurance Pol icies, mortgage title insurance and Special Hazard Insurance Policy (net of amounts required to be applied to the restoration of Residences), drawings under the Letters of Credit or moneys paid pursuant to the Developer Agreement (excluding moneys payable under Section 5.07 of the Developer Agreement), and interest earned or income derived from the investment or deposit of moneys held by Trustee, but not including escrow payments and Service Fees. "Special Hazard Insurance Policy" means the special hazard insurance policy which is on file with Trustee, or any replacement policy, insuring aga i nst losses due to coi nsurance and physi ca 1 hazards not covered by the Hazard Insurance Policy. "State" means the State of California. . "Term Bonds" means the Bonds so designated in this Resolution. "Trustee" means Security Pacific National Bank and any successor or I successors and any other bank or trust company or national banking association at any time substituted in its place which meets the qualifications and otherwise fulfilling the requirements of Sections 10.08 and 10.09 of this Resolution. "Trust Estate" means the property, rights, moneys, securities and other amounts pledged and assigned to Trustee pursuant to this Resolution. Except where the context otherwise requires, words importing the singular number shall include the plural number and vice versa. With respect to instructions regarding Mortgage Loans, unless the context prohibits, such instructions permitting or requiring action to be taken by or on behalf of Trustee or Agency shall be construed to permit or require performance of the obligation by either. Words of the masculine general include the feminine and neuter genders. Words importing persons shall include corporations and associations, including public bodies, as well as natural persons. The terms "hereby", "hereof". "hereto", "herei n".. "hereunder", and any similar terms, as used in this Resolution, refer to this Resolution. 10 . I . . ARTICLE II THE BONDS Section 2.01. Authorized Amount of Bonds. No bonds m~ be issued under the provisions of this Resolution except in accordance with this Article. The total principal amount of bonds that may be issued is hereby expressly limited to $18,200,000 except as provided in Section 2.07 hereof. No additional bonds or other indebtedness m~ be issued on a parity with the bonds issued pursuant to this Resolution. 1 Section 2.02. Issuance of Bonds. The Bonds shall be designated "Redevelopment Agency of the City of Seal Beach Residential Mortgage Revenue Bonds, Issue of 1982". The Bonds shall be issuable as fully registered Bonds without coupons in the denomination of $5,000 and any integral multiple thereof. The Bonds shall bear interest from their date. Bonds issued prior to the first Interest Payment Date shall be dated as of March 1, 1982. Bonds issued on or after the first Interest Payment Date shall be dated as of the next preceding Interest Payment Date, unless such date of issuance shall be an Interest Payment Date, in which case they shall be dated as of such date of issuance; provided, however, that if, as shown by the records of the Trustee, interest on the Bonds shall be in default, the Bonds issued in lieu of Bonds surrendered for transfer or exchange shall be dated as of the date to which interest has been paid in full on the Bonds surrendered. . The Bonds shall mature on March 1 in the years and in the principal amounts, and shall bear interest at the rates per annum, all as set forth below: Principal Interest Date of Maturity Amount Rate 1986 $ 75,000 10.00% I' 1987 80,000 10.50 1988 90,000 10.75 1989 100,000 11.00 1990 110,000 11.50 ! 1991 120,000 11.75 1992 135,000 12.00 1993 150,000 12.25 I 1994 170,000 12.50 2002 2,405,000 12.50 2015 14,765,000 13.00 The Term Bonds maturing on March 1, 2002 and 2015, are subject to the mandatory redemption provisions of Section 3.02 hereof. . 11 . Principal and Redemption Price of the Bonds shall be payable at the principal corporate trust office of the Trustee in Los Angeles, California. Payment of interest on the Bonds shall be made to the owner thereof by c~eck or draft ma i 1 ed to the owner at the owner's address as it appears on the registration books maintained by or on behalf of Agency, or at such other address as is furnished to Trustee in writing by such owner. Section 2.03. Execution. The Bonds shall be executed on behalf of Agency with the facsimile signature of its Chairman or Vice Chairman, and sha 11 have impressed or impri nted thereon, by facs imi 1 e or otherwi se, the official seal of Agency and attested with the facsimile signature of its Secretary. In case any offi cer whose facs imi 1 e si gnature shall appear on the Bonds shall cease to be such officer before the delivery of such Bonds, such facsimile signature shall nevertheless be valid and sufficient for all purposes, the same as if he had remained in office until delivery. Section 2.04. Authentication. No Bond shall be valid or obligatory for I any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on such Bond substantially in the form hereinafter set forth shall have been duly executed by the manual signature of Trustee, and such executed certificate of Trustee upon any such Bond shall be conclusive evidence that such Bond has been authenticated and delivered under this Resolution. Trustee's certificate of authentication on any Bond shall be deemed to have been executed by it if manually signed by an authorized officer or signatory of Trustee, but it shall not be necessary that the same officer or signatory sign the certificate of authentication on all of . the Bonds issued hereunder. Section 2.05. Form of Bonds. The Bonds issued under this Resolution shall be substantially in the form hereinafter set forth with such variations, omissions and insertions as are permitted or required by this Resolution. l I 12 . . I . r- I . (FORM OF BOND) United States of America State of California Redevelopment Agency of the City of Seal Beach No. RA $ Residential Mortgage Revenue Bond Issue of 1982 KNOW All MEN BY THESE PRESENTS that the Redevelopment Agency of the City of Seal Beach (the "Agency") a public body, corporate and politic, organized and existing under, and by virtue of, the laws of the State of California, for value received, hereby promises to pay, from the sources of funds hereinafter described, to or registered assigns, the principal sum of THOUSAND DOllARS ($ ) on the first day of MarCh, , un less redeemed prior thereto as herelnafter provided, upon the presentation and surrender hereof at the principal corporate trust office of Security Pacific National Bank, in the City of los Angeles, State of Ca 1 iforni a, or its successors, as trustee ("Trustee") and to pay to the registered owner hereof by check or draft of Trustee interest on such principal sum from the date hereof to the date of maturity or earlier redemption of this Bond at the rate of percent ( %) per annum, payable on the 1st day of March and the 1st day of September of each year commencing March 1, 1983. Principal of, interest and redemption premium, if any, on this Bond are payable in lawful money of the United States of America which at the time of payment is legal tender for the payment of public and private debts. This Bond is one of an authorized issue of Bonds of the Agency issued in the aggregate principal amount of $18,200,000 (the "Bonds") issued for the purpose of acquiring certain mortgage loans secured by first mortgage liens (the "Mortgage loans") on single family townhouse leasehold estates in the Agency's Riverfront Redevelopment Project Area in Seal Beach, California, to be originated for and sold without recourse to the Trustee on behalf of Agency, by a certain entity (the "Originator/Servicer") and for the paying of necessary expenses incidental thereto. The proceeds' of the Bonds, less expenses of issuance and certain reserve and interest deposits, will be used by Agency to fund the Mortgage loans originated by the Originator/Servicer and serviced by the Originator/Servicer pursuant to an Origination and Servicing Agreement dated as of February I, 1982 (the "Agreement") with the Origi nator/Servi cer and, pursuant thereto, the Origi nator/Servi cer has agreed 13 . to collect Mortgage Loan payments of principal (including prepayments) and interest for the benefit of Trustee, to otherwise service the Mortgage Loans that such Originator/Servicer originates pursuant to the Agreement, and to perform certain other duties. The Bonds are all issued under and are equally and ratably secured by and entitled to the protection of Resolution No. 82-3 of the Agency dated February 25, 1982 (the "Resolution"), duly adopted and delivered by Agency to the Trustee, pursuant to the Redevelopment Construction Loans Act, Chapter 8, commencing with Section 33750, of Part 1 of Division 24 of the Health and Safety Code of the State of California (the "Act"). Pursuant to the Resolution, Agency has pledged and assigned the Mortgage Loans and the proceeds thereof to Trustee, to secure payment (a) of principal of, ,premium, if any, and interest on the Bonds and (b) of Repayment Obl igations, as defined in the Resolution. In addition, First Interstate Bank of California (the "Bank") has entered into a Letter of Credit Agreement among the Agency, the Trustee and it, pursuant to which the Bank has unconditionally and irrevocably agreed to issue annually, commencing on the date of issuance of the Bonds and on every March 16 thereafter so long as any Bonds are outstanding, an Irrevocable Letter of Credit (the "Irrevocable Letter of Credit") for the account of Agency and the benefit of Trustee pursuant to I which Trustee, on behalf of Agency, may, under certain circumstances, draw down moneys to pay principal and interest on the Bonds (the "Drawings"). Reference is hereby made to the Resolution, the Agreement, the Letter of Credit Agreement and the Irrevocable Letter of Credit, and certain resolutions of Agency adopting and approving such instruments for a description of the provisions, among others, with respect to the custody and application of the proceeds of the Bonds issued under the Resolution, the collection and disposition of the revenues derived from the Mortgage Loans, the funds charged with and pledged to the payment of the principal of and interest on the Bonds . and to the repayment of Drawi ngs under the Letter of Credit and the nature and extent of such security, the terms and conditions under which the Bonds are or may be issued, the rights, duties and obl igations of Agency and of Trustee, the rights of the owners of the Bonds, and the provisions regulating the manner in which the terms of the Agreement, the Resolution, this Bond and the rights of the owner hereof, may be modified, to all of which provisions the owner of thi s Bond, on behalf of himself and his successors in interest, assents by acceptance hereof. This Bond is transferable, as provided in the Resolution, only upon the bond register kept for that purpose at the principal corporate trust office of Trustee by the registered owner hereof in person, or' by his attorney duly authorized in writing, upon the surrender of this Bond together with a written instrument of transfer satisfactory to Trustee duly executed by the registered owner or his attorney duly authorized in writing, and thereupon a new Bond, in I the same aggregate principal amount and of the same maturity, shall be issued to the transferee in exchange therefor as provided in the Resolution, upon the payment of the charges, if any, including, after the first exchange, the cost of preparing new Bonds, therein prescribed. The Bonds are issuable in the form of fully registered Bonds in the denomination of $5,000 or any integral multiple thereof. Any Bond, upon 14 . - 1 . " , , I . surrender thereof at the principal corporate trust office of Trustee may, at the option of the holder thereof, be exchanged for an equal aggregate principal amount of Bonds of the same maturity and of any other authorized denominations, in the manner, subject to the conditions, and upon payment of the charges, if any, including any tax, fee or governmental charge as provided in the Resolution. The Bonds are subject to mandatory redemption in whole at any time, or in part on any Interest Payment Date, at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date, from and to the extent there are depos its avail abl e for such purposes in the Principal Prepayment Subaccount (as defined in the Resolution) from: (i) funds in the Mortgage Loan Account which are not used to purchase Mortgage Loans, as those terms are defined in the Resolution, on or before January 15, 1985, or at such later date as provided in the Resolution; (ii) Principal Prepayments, Insurance Proceeds and Liquidation Proceeds, as those terms are defined in the Resolution; (iii) decreases in the amounts required to be maintained in the Mortgage Reserve Fund and the Debt Service Reserve Fund, as those terms are defined in the Resolution; and (iv) certain excess Revenues accumulated in the Accumulation Reserve Subaccount. If at any time the sum of moneys in the Debt Service Reserve Fund, Mortgage Reserve Fund, Principal Account, Principal Prepayment Subaccount and the Accumul at ion Reserve Subaccount equals or exceeds the pri ncipal amount of the then Outstanding Bonds, plus unpaid accrued interest to the redemption date, the Bonds shall be redeemed from such moneys on any date in whole at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. In addition, the Bonds are subject to redemption, at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date (i) in part on any Interest Payment Date if the Bank exercises its option under the Letter of Credit Agreement to purchase any Mortgage Loans in default at a price equal to the unpaid balance thereof together with accrued interest to the date of purchase, and (i i) in whole at any time, if the Bank exercises its option under the Letter of Credit Agreement to provide for the redemption of all of the Outstanding Bonds, together with certain other amounts, in accordance with the Resolution. On any date on or after March 1, 1998, if the aggregate unpaid principal amount of Mortgage Loans is less than $500,000, Agency may sell the Mortgage Loans for a purchase price sufficient, together with moneys on deposit in the Debt Service Reserve Fund, Mortgage Reserve Fund, Principal Account, Principal Prepayment Subaccount and Accumulation Reserve Subaccount, to repay any unpaid drawings, including interest thereon, under the Letter of Credit and to redeem the Bonds in whole at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. The Bonds maturing on or after March 1, 1993, are subject to redemption, at the option of Agency, in whole at any time or in part on any Interest 15 . Payment Date on or after March 1, 1992, in the manner provided above, at the redemption prices (expressed as percentages of principal amount) set forth in the following table, together with accrued interest to the date fixed for redemption. Redemption Dates (Inclusive) March 1, 1992 to February 28, 1993 March 1, 1993 to February 28, 1994 March 1, 1994 to February 28, 1995 March 1, 1995 to February 29, 1996 March I, 1996 to February 28, 1997 March 1, 1997 to February 28, 1998 March 1, 1998, and thereafter Redemption Prices 103% 102-1/2% 102% 101-1/2% 101% 100-1/2% 100% The Term Bonds shall be subject to redemption in part by lot by operation of sinking fund installments as provided in the Resolution, at a redemption price equal to the principal amount of each Bond or portion thereof to be redeemed, together with accrued interest to the date of redemption, I without premium (unless any such principal amount shall be reduced as provided in the Resolution by reason of earlier redemption of Bonds). Sinking fund installments shall be made with respect to the Term Bonds as follows: With respect to the Term Bonds maturing March 1, 2002: Year Amount Year Amount 1995 $ 190,000 1999 $ 305,000 . 1996 215,000 2000 345,000 1997 245,000 2001 390,000 1998 275,000 2002 (Maturity) 440,000 With respect to the Term Bonds maturing March 1, 2015: Year Amount Year Amount $ 490,000 2009 $1,025,000 555,000 2010 1,160,000 630,000 2011 1,310,000 710,000 2012 1,480,000 805,000 2013 1,670,000 905,000 2014 1,890,000 2015 (Maturity) 2,135,000 16 . - I . I , I . to purchase Bonds subject to such redemption, but no Bonds will be purchased within 30 days preceding any redemption date. In the event the Bonds are to be redeemed in part, the Bonds to be redeemed shall be selected by lot and redeemed on a reasonably proportionate basis from among all the then existing maturities of the Bonds, such basis to be determined and effectuated as nearly as practicable by Trustee by multiplying the total amount of moneys available to redeem Bonds on the date fixed for redemption by the ratio which the principal amount of all Bonds Outstanding in each maturity bears to the principal amount of all Bonds then outstanding. Bonds shall be redeemed only in multiples of $5,000. In the event of the redemption of any or all of the Bonds, notice shall be mailed postage prepaid, not less than twenty (20) days nor more than forty-five (45) days prior to the redemption date to the registered owners of any Bonds or portions of Bonds to be redeemed. Notice 1)Iailed as provided in the Resolution shall be conclusively presumed to have been duly given whether or not received. Notice of redemption having been given, as aforesaid, Bonds or portions thereof so called for redemption shall become due and payable at the appl icable redemption price herein described, and from and after the date so fixed for redemption, provided adequate funds are then available to pay such Bonds to be redeemed, interest on the Bonds or portions thereof so called for redemption shall cease to accrue and become payable. This Bond shall not be deemed to constitute a debt or liability of the City of Seal Beach, the State of California or any other political subdivision of the State other than Agency. Neither the faith or credit nor the taxing power of Agency, the City of Sea 1 Beach, the State of Ca 1 iforni a or any political subdivision thereof is pledged to the payment of the Bonds. This Bond is a special obligation of Agency, payable solely from Bond proceeds, revenues and other amounts deri ved by Agency on Mortgage Loans acqu i red wi th Bond proceeds (including earnings thereon and certain insurance with respect thereto), and payments by Bank pursuant to the Letter of Credit Agreement and the Irrevocabl e Letter of Credit issued thereafter and the other funds and accounts pledged therefor in the Resolution. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt 1 imitaton or restriction. Neither the members of Agency nor any persons executing the Bonds shall be Hable personally on the Bonds or subject to any personal liability or accountability by reason of the issuance thereof. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by the Constitution and statutes of the State of California and the Resolution to exist, to have happened and to have been performed precedent to and in the issuance of this Bond, exist. have happened and have been performed in due time, form and manner as required by law and that the issuance of the Bonds, together with all other indebtedness of Agency, is within every debt and other limit prescribed by law. This Bond shall not be entitled to any benefit under the Resolution or become valid or obligatory for any purpose until it shall have been authenticated by the certificate of Trustee endorsed hereon. 17 IN WITNESS WHEREOF, the Redevelopment Agency of the City of Seal Beach has caused this Bond to be executed in its name by the manual or facsimile signature of its Chairman and a facsimile of its corporate seal to be reproduced hereon, and attested by the manual or facsimile signature of its Secretary all as of the date set forth below. REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH By Cha i rman (SEAL) ATTEST: Secretary DATED: 18 . I . -, I . - I . r I . (Form of Certificate of Authentication) This Bond is one of an issue described in the Resolution within mentioned. SECURITY PACIFIC NATIONAL BANK, as Trustee By Authorized Officer ASSIGNMENT For value received undersigned do(es) hereby sell, assign and transfer unto the within-mentioned appoint(s) the Bond and hereby irrevocably constitute(s) and to transfer substitution attorney, the same on the bond register of Trustee with full power of in the premises. Dated: Note:The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever. Section 2.06. Delivery of Bonds. Upon the adoption, execution and delivery of this Resolution, Agency shall execute and deliver to Trustee and Trustee shall authenticate the Bonds and deliver them as directed by Agency as hereinafter in this Section provided. Prior to the delivery by Trustee of any of the Bonds there shall be delivered to Trustee: 1. A copy of the Resolution, certified by an Authorized Officer. 2. Original executed counterparts of the Agreement. 3. An original executed counterpart of the Developer Agreement and the letter of credit required thereby. 19 4. A request and authorization to Trustee on behalf of Agency and si gned by an Authorized Offi cer of Agency to authent i cate and deliver the Bonds in accordance with the resolution awarding sale of the Bonds. 5. An originally executed counterpart of the letter of Credit Agreement and the Irrevocable letter of Credit dated as of the issuance of the Bonds, and expiring March IS, 1983. 6. An opinion of counsel for Agency stating that the execution and delivery of the Agreement has been duly authorized by Agency, that the Agreement is in the form so authorized and has been executed and del ivered by Agency and that, assuming proper authorization and the execution and delivery of the Agreement by the Originator/Servicer, the Agreement is a val id and binding agreement, enforceable against Agency in accordance with its terms (subject to any applicable bankruptcy, reorganization, insolvency, moratorium or simila~ law affecting the enforcement of creditors' rights generally). 7. An opinion of counsel for the Originator/Servicer stating that the signer is of the opinion that the execution and del ivery of the Agreement has been duly authorized by such Originator/Servicer, that the Agreement is in the form so authorized, that the Agreement of such Originator/Servicer has been duly executed and del ivered by such Originator/Servicer and that, assuming proper authorization and the execution and del ivery of the acceptance by Agency of such Originator/Servicer's Agreement, the Agreement is a valid and binding agreement, enforceable against such Originator/Servicer in accordance with its terms (subject to any applicable bankruptcy, reorganization, insolvency, moratorium or similar law affecting the enforcement of creditors' rights generally). 8. An opinion of nationally recognized bond counsel stating that such bond counsel is of the opinion that the interest on the Bonds issued under the provisions of this Resolution is exempt from present federal and personal State income taxes under existing law. g. An opinion of bond counsel stating that the issuance of said -l Bonds has been duly and validly authorized, that this Resolution has been duly and validly adopted and executed and that all conditions precedent to the delivery of said Bonds have been fulfilled, and that said Bonds and this Resolution are valid and binding special obl igati ons, enforceable agai ns t Agency in accordance with thei r terms (subject to any applicable bankruptcy, reorganization, insolvency, moratorium or similar law affecting the enforcement of creditors' rights I genera lly) . 10. A certificate of an Authorized Officer stating the amounts of the proceeds of the Bonds (and any other funds) to be credited to all funds and accounts referred to in Section 5.02 at the time of del ivery of the Bonds. 20 . I . . - I . I I . Upon receipt of these documents, Trustee shall authenticate and deliver the BorKls as directed by Agency, but only upon payment to Trustee of the purchase price of the Bonds, together with accrued interest thereon. The proceeds received by Trustee from the sale of such Bonds shall be deposited in the various funds and accounts specifi ed in, and pursuant to, Section 2.10 below. Section 2.07. Mutilated, Lost, Stolen or Destroyed Bonds. In the event any Bond is mutilated, lost, stolen or destroyed, Agency may execute and Trustee may authenticate a new Bond of like date, maturity and denomination, bearing a number not contemporaneous ly Outstanding, as that muti lated, lost, stolen or destroyed; provided that, in the case of any mutilated Bond, such mutilated Bond shall first be surrendered to Agency, and, in the case of any lost, sto len or destroyed Bond, there shall be fi rst furn ished to Agency and Trustee evidence of such loss, theft or destruction satisfactory to Agency and Trustee, together with an indemnity satisfactory to them. In the event any such BorKl shall have matured or been called for redemption, instead of issuing a dup 1 i cate Bond, Agency may pay the same without surrender thereof. Agency and Trustee may charge the holder or owner of such Bond with their reasonable fees and expenses in this connection. Section 2.08. Registration of Bonds; Persons Treated as Owners. Agency shall cause books for the registration of the Bonds as provided in this Resolution to be kept by Trustee which is hereby constituted and appointed the Bond registrar of Agency. At reasonable times and under reasonable regulations established by Trustee, said list may be inspected and copied by Agency, or by owners (or a designated representative thereof) of 15 percent or more in aggregate principal amount of Bonds then Outstanding. Upon surrender for transfer of any Bond at its corporate trust office, Trustee shall authenticate and deliver in the name of the transferee or transferees a new Bond or BorKls of authorized denomination of the same maturity for the aggregate principal amount which the registered owner is entitled to receive. Any Bond shall be exchangeable for Bonds of the same series, maturity arKl interest rate, of any authorized denomination, in an aggregate principal amount equal to the unpaid principal amount of the Bond or Bonds presented for exchange. BorKls to be exchanged shall be surrendered at the principal corporate trust office of the Trustee and Trustee shall authenticate and deliver in exchange therefor the Bond or Bonds which the Bondholder making the exchange shall be entitled to receive. All Bonds delivered in exchange shall be so dated that neither gain nor loss in interest shall result from the transfer or exchange. All Bonds presented for transfer, exchange, redemption or payment (if so required by Agency or Trustee), shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in form and with guaranty of signature sat isfactory to Agency and Trustee, duly executed by the registered holder. 21 - Trustee shall require payment of a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in relation to any such exchange or transfer of the Bonds. Such charges and expenses shall be paid before any such new Bond shall be delivered. Agency and Trustee shall not be required (a) to issue, transfer or exchange any Bonds during a period beginning at the opening of business on the 15th day next preceding either any Interest Payment Date or any date of selection of Bonds to be redeemed and ending at the close of business on the Interest Payment Date or day on which the applicable notice of redemption is given or (b) to transfer or exchange any Bonds selected, called or being called for redemption in whole or in part. New Bonds delivered upon any transfer or exchange shall be valid special obl igations of Agency, evidencing the same debt as the Bonds surrendered, shall be secured by this Resolution and shall be entitled to all of the security and benefits hereof to the same extent as the Bonds surrendered. Agency and Trustee may treat the registered owner as the absolute owner I thereof for all purposes, whether or not such Bond shall be overdue, and shall not be bound by any notice to the contrary. The person in whose name any Bond is registered may be deemed the owner thereof by Agency and Trustee, and any notice, except to the contrary, shall not be binding upon Agency or Trustee. Section 2.09. Destruction of Bonds. Whenever any outstanding Bond shall be delivered to Trustee for cancellation pursuant to this Resolution, . upon payment of the pri nc i pa 1 amount or i nteres t represented thereby or for replacement pursuant to Section 2.07 hereof or transfer or exchange pursuant to Section 2.08 hereof, such Bond shall be canceled and destroyed by Trustee and counterparts of a certificate of destruction evidencing such destruction shall be furnished by Trustee to Agency. Section 2.10. Application of Bond Proceeds. The proceeds of the Bonds shall be deposited with Trustee as follows: -~ (a) In the Bond Fund, the sum of $97,467.71 which is accrued interest and premium, if any, on the Bonds. $8,496.22 of such accrued interest shall be invested along with the funds in the Debt Service Reserve Fund. The funds so used wi 11 be returned to the Bond Fund pri or to the first Interest Payment Date; (b) In the Issuance Expense Account, the sum of $246,000; (c) In the Debt Service Reserve Fund, the sum of $1,820,000; (d) In the Mortgage Loan Account, the sum of $15,406,000. Section 2.11. Temporary Bonds. Until definitive Bonds are ready for delivery, there may be executed, and upon request of Agency, Trustee shall authenticate and deliver, in lieu of definitive Bonds and subject to the same limitations and conditions, temporary typewritten, printed, engraved or 22 I . '. 'I . I' I ,I . lithographed Bonds, in the form of the Bonds in denominations of Five Thousand Dollars ($5,000) or any integral multiple thereof, or both, as Agency by resolution may provide, substantially of the tenor of the Bonds set forth in this Resolution and with such appropriate omissions, insertions and variations as may be required. If temporary Bonds shall be issued, Agency shall cause the definitive Bonds to be prepared and to be executed and delivered to Trustee, and Trustee, upon presentation to it at its principal corporate trust office of any temporary Bond shall cancel the same and authenticate and del iver in exchange therefor at the place designated by the holder, without charge to the holder thereof, a definitive Bond or Bonds of an equal aggregate principal amount, of the same maturity and bearing interest at the same rate as the temporary Bond surrendered. Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefit and security of this Resolution as the definitive Bonds to be issued and authenticated hereunder. 23 - ARTICLE III REDEMPTION OF BONDS BEFORE MATURITY Sect ion 3.01. Redempti on Dates and Pri ces. The Bonds are subject to mandatory redemption in whole at any time, or in part on any Interest Payment Date, at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date, without premium, from and to the extent there are depos its in the Pri nc ipa 1 Prepayment Subaccount that are not used to cure deficiencies in other accounts pursuant to Section 5.08 below from: (1) Funds in the Mortgage Loan Account I'ot1 i ch are not used to purchase Mortgage Loans within thi rty-four and one-half (34-1/2) months of the date of issuance of the Bonds or within forty-six and one-half (46-1/2) months, if the Agency shall exercise its authorization to extend the period, as provided in Section 5.06:; (2) Principal Prepayments, Insurance Proceeds and Liquidation Proceeds; (3) Decreases in the amounts required to be maintained in the Mortgage Reserve Fund and the Debt Service Reserve Fund: (4) Revenues accumul ated in the Accumul ati on Reserve Subaccount; I and If at any time the sum of moneys in the Debt Service Reserve Fund, Mortgage Reserve Fund, Principal Account, Principal Prepayment Subaccount and . Accumulation Reserve Subaccount equals or exceeds the principal amount of the then Outstanding Bonds, plus unpaid accrued interest to the redemption date, the Bonds sha 11 be redeemed from such IIDneys on any date in who 1 e at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. In addition, the Bonds are subject to redemption, at a redemption price equa 1 to the pri nci pa 1 amount thereof plus accrued interest on any Interest 1 Payment Date to the redemption date without premium (i) in part on any Interest Payment Date if the Bank exercises its option under the Letter of Credit Agreement to purchase any Mortgage Loans in default at a price equal to the unpaid balance thereof together with accrued interest to the date of purchase, and (ii) in whole on any Interest Payment Date, if the Bank exercises its option under the Letter of Credit Agr.eement to purchase all of the Mortgage Loans at a price sufficient to payor provide for the payment of I such redemption price, together with certain other amounts, pursuant to Article IX. On or after March 1, 1998, if the ag9regate unpaid principal amount of Mortgage Loans is less than $500,000, Agency may sell the Mortgage Loans for a purchase price sufficient, together with moneys on deposit in the Debt Service Reserve Fund, Mortgage Reserve Fund, Principal Account, Principa 1 Prepayment . 24 - Subaccount and Accumu1 ation Reserve Subaccount, to repay any unpaid Drawings and interest under the Letter of Credit and to redeem the Bonds in whole at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date without premium, and, in such case, the Bonds shall be redeemed on any date from such amounts. The Bonds maturing on or after March I, 1993, are subject to redemption, at the option of Agency, in whole at any time or in part on any Interest Payment Date on or after March I, 1992, in the manner provided above, at the redemption prices (expressed as percentages or principal amount) set forth in the fo llowi ng table, together wi th accrued interest to the date fi xed for redemption: Redemption Dates (Inclusive) Redemption Prices March I, 1992 to February 28, 1993 103% March I, 1993 to February 28, 1994 102-1/2% I March I, 1994 to February 28, 1995 102% March I, 1995 to February 29, 1996 101-1/2% March I, 1996 to February 28, 1997 101% March I, 1997 to February 28, 1998 100-1/2% March I, 1998, and thereafter 100% . r J I . The Bonds maturing on March I, 2002 (the "2002 Term Bonds") are also subject to mandatory redemption in part from sinking fund payments provided in Section 3.02 hereof on March I, 1995, and on each March 1 thereafter to and including March I, 2002, at the principal amount thereof, plus accrued interest to the redemption date without premium. The Bonds maturing on March I, 2015 (the "2015 Term Bonds") are also subject to mandatory redemption in part from sinking fund payments provided in Section 3.02 hereof on March I, 2003, and on each March 1 thereafter to and including March I, 2015, at the principal amount thereof, plus accrued interest to the redemption date without premium. A 11 spec i a 1 and opt i ona 1 redemption of Bonds shall be app 1 i ed fi rst to Bonds maturing March I, 2002, and thereafter on a pro rata basis to the remaining Bonds. In the event the Bonds are to be redeemed in part, the Bonds to be redeemed shall be selected by lot within a maturity (in such manner as the Trustee may determine) and redeemed on a reasonably proportionate basis from among all the then existing maturities of the Bonds, such basis to be determined and effectuated as nearly as practicable by Trustee by multiplying the total amount of moneys available to redeem Bonds on the date fixed for redemption by the ratio which the principal amount of all Bonds Outstanding in each maturity bears to the principal amount of all Bonds then Outstanding. Bonds shall be redeemed only in integral multiples of $5,000. 25 Section 3.02 Sinking Funds. Trustee shall deposit or cause to be deposited in the Bond Fund pursuant to Section 5.03 hereof on the date hereinafter set forth for the 2002 Term Bonds and the 2015 Term Bonds, respectively, a sum in inrnediately available funds which, together with other moneys available therefor in the Bond Fund, is sufficient to redeem (after credit as provided below) the principal amounts of Bonds maturing as set forth below: With res pect to the Term Bonds Maturing March I, 2002: Marc h 1 Principal March 1 Principal of the Year Amount of the Year Amount 1995 $ 190,000 1999 $ 305,000 1996 215,000 2000 345,000 1997 245,000 2001 390,000 1998 275,000 2002 (Maturity) 440,000 With respect to the Term Bonds Maturing March 1, 2015: March 1 Principal March 1 Principal of the Year Amount of the Year Amount 2003 $ 490,000 2009 $1,025,000 2004 555,000 2010 1,160,000 2005 630,000 2011 1,310,000 2006 710,000 2012 1,4BO,000 2007 B05,000 2013 1,670,000 200B 905,000 2014 1,890,000 2015 (Maturity) 2,135,000 - I . Provided, however, that to the extent Bonds maturing on March I, 2002, and March I, 2015, have been previously purchased or called for redemption in part and otherwise than from the sinking fund payments, the principal amount of each remaining aforesaid annual sinking fund payment with respect to such respective Bonds shall be reduced by the amount obtained by multiplying the --1 principal amount of such Bonds of such maturity so purchased or called for redemption during the current Bond Year by the ratio which each remaining annual sinking fund payment with respect to such respective Bonds, as adjusted, bears to the total Outstanding principal amount of Bonds of such maturity (including the Bonds of such maturity purchased or called for redemption during the current Bond Year, but excluding the Debt Service Reserve Term Bonds), and by rounding each sinking fund payment to the nearest I $5,000 integral multiple. In case a Bond subject to sinking fund redemption under this Section 3.02 is of a denomination larger than $5,000, a portion of such Bond ($5,000 or any multiple thereof) may be redeemed, but Bonds shall be redeemed only in the pri nc i pa 1 amount of $5,000 each or any integral mu It i p 1 e thereof. On or before the 30th day prior to each such slnking fund redemption date, Trustee 26 . - I . II I . shall select for redemption (by lot in such manner as Trustee may determine) from all Outstanding Bonds subject to sinking fund redemption under this Section a principal amount of such Bonds equal to the aggregate principal amount of such Bonds redeemable with the required sinking fund payment, and shall call such Bonds or portions thereof ($5,000 or any multiple thereof) for redemption from such sinking fund payment on the next March I, and give notice of such ca 11. Trustee may apply moneys in the Principal Account held for sinking fund payment to the purchase of Outstanding Bonds subject to redemption from such sinking fund payments as herein provided, and upon such purchase such Bonds shall be canceled and the amount of such sinking fund payment shall thereupon be reduced by the pri nc ipa 1 amount of such Bonds so purchased and canceled, provided that no such Bonds shall be so purchased within the 30 days next preceding the sinking fund payment date. The price paid by Trustee (excluding accrued interest, but including any brokerage and other charges) for any Bond purchased pursuant to this paragraph shall not exceed the principal amount thereof; Trustee shall also pay '(from the Bond Fund) accrued interest on any such Bond to the date of purchase. Subject to the above limitations, Trustee shall purchase Bonds at such times, for such prices, in such amounts and in such manner (whether after advertisement for tenders or otherwise) as Trustee in its discretion may determine and as may be possible with the amount of money available in the Principal Account. Section 3.03. Notice of Redemption. Notice of the call for any redemption, identifying the Bonds or portions thereof to be redeemed, shall be given by Trustee by mailing a copy of the redemption notice by first class mail (postage prepaid) not more than 45 days and not less than 20 days prior to the date fixed for redemption to the registered owner of each Bond to be redeemed in whole or in part at the address shown on the registration books maintained by Trustee, and to owners of any bearer Bonds to be redeemed who have fi led their names and addresses and numbers of Bonds with Trustee for such purpose. Failure to give such notice by mailing to any Bondholder, or any defect therein, shall not affect the validity of any proceedings for the redemption of Bonds. Any notice mailed as provided in this Section shall be conclusively presumed to have been duly given, whether or not the owner of such Bonds receives the notice. Section 3.04. Redemption Payments. Prior to the date fixed for redemption, funds shall be deposited with Trustee to pay, and Trustee is hereby authorized and directed to apply such funds to the payment of, the Bonds or portions thereof called, together with accrued interest thereon to the redemption date. Upon the giving of notice and the deposit of funds for redemption, interest on the Bonds or portions thereof thus called shall no longer accrue after the date fixed for redemption. No payment shall be made by Trustee upon any Bond or portion thereof called for redemption until such Bond or portion thereof shall have been delivered for payment or cancellation, 27 . or Trustee shall have received the items required by Section 2.07 hereof with I respect to any mutilated, lost, stolen or destroyed Bond. Section 3.05 Cancellation. All Bonds which have been redeemed, paid or retired or received by Trustee for exchange shall not be reissued but shall be canceled and destroyed by Trustee in accordance with Section 2.09 hereof. Section 3.06 Partial Redemption of Bonds. Upon surrender of any Bond for redemption in part only, Trustee shall authenticate and del iver to the holder thereof, the costs of which shall be paid from the General Account, a new Bond or Bonds of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond surrendered. I . 1 I . 28 - 1 . r I . ARTICLE IV GENERAL COVENANTS Section 4.01. Payment of Principal and Interest. Agency covenants that it will promptly pay the principal of and interest on every Bond issued under this Resolution at the place, on the dates and in the manner provided herein and in said Bonds according to the true intent and meaning thereof, prOVided that the principal and interest are payable by Agency solely from the Revenues and other amounts deri ved from the Mortgage Loans (i ncl uding earnings thereon and certain insurance with respect thereto), Drawings on the Letters of Credit and certain reserve funds estab 1 i shed in connecti on herewith and the interest thereon, and nothing in the Bonds or this Resolution should be considered as assigning or pledging any other funds or assets of Agency other than such funds and the interest thereon, the Revenues and other amounts derived from the Mortgage Loans, Drawings under the Letter of Credit 'and the right, title and interest of Agency in the Mortgage Loans, certain insurance, the Developer Agreement (excluding moneys payable under Section 5.07 of the Developer Agreement) and the Agreement. Section 4.02. Performance of Covenants by Aqency. Agency covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Resolution, in any and every Bond executed, authenticated and delivered hereunder and in all of its proceedings pertaining hereto. Agency covenants that it is duly authorized under the Constituti on and 1 aws of the State, i ncl udi ng particularly the Act, to issue the Bonds authorized hereby and to adopt this Resolution, to execute and deliver the Agreement to purchase the Mortgage Loans, to assign the Developer Agreement, the Agreement, and the Mortgage Loans, and to execute and deliver the Letter of Credit Agreement; that all action on its part for the issuance of the Bonds and the adoption of this Resolution has been duly and effectively taken; and that the Bonds in the hands of the owners thereof are and will be val i d and enforceable speci a 1 obligations of Agency according to the terms thereof and hereof. Section 4.03. Instruments of Further Assurance. Agency agrees that Trustee may defend its ri ghts to the payments and other amounts due under the Mortgage Loans, for the benefit of the owners of the Bonds against the claims and demands of all persons whomsoever. Agency covenants that it will do, execute, adopt, acknowledge and deliver, or cause to be done, executed, adopted, acknowledged and delivered, such resolutions supplemental hereto and such further acts, instruments and transfers as Trustee may reasonably require for the better assuring, transferring, pledging, assigning and confinning unto Trustee all and singular the rights assigned hereby and the amounts pledged hereby to the payment of the principal of and interest on the Bonds. Agency covenants and agrees that, except as herein and in the Agreement and the Letter of Credit Agreement otherwise provided, it will not sell, convey, assign, pledge, encumber or otherwise dispose of any part of the Revenues and receipts payable under the Mortgage Loans, the Agreement or the Developer Agreement (excluding moneys payable under Section 5.07 of the Developer 29 - Agreement) the Letter of Credit Agreement and the Letter of Credit issued pursuant thereto or its rights thereunder. Section 4.04. Recording and Filing. Trustee will cause to be filed all financing statements related to this Resolution and all supplements hereto, and the Agreement and Letter of Credit Agreement and all supplements thereto, and such other documents as may be, in the opinion of counsel acceptable to Bank and Trustee, necessary to be kept and filed in such manner and in such places as may be requ i red by 1 aw in order to preserve and protect fu lly the security of the holders and owners of the Bonds and the rights of Trustee hereunder. Section 4.05. Rights Under Aqreement. The Agreement, a duly executed counterpart of which has been filed with Trustee, sets forth the covenants and obligations of Agency and the Originator/Servicer, including provisions that, subsequent to the issuance of the Bonds and prior to the payment in full or provision for payment thereof in accordance with the provisions hereof, the Agreement (except as expressly provided therein) may not be effectively I amended, changed, modified, altered or terminated without the concurring wri tten consent of Trustee, as provi ded in Articl e XII hereof, and reference is hereby made to the Agreement for a detailed statement of said covenants and obligations of the Ori~inator/Servicer thereunder, and Agency agrees that Trustee in its name or (to the: extent required by law) in the name of Agency, may enforce all rights of Agency and all obligations of the Originator/Servicer under and pursuant to the Agreement for and on behalf of the Bondholders whether or not Agency is in default hereunder. Section 4.06. Possession and Inspection of Mortgage Notes. Trustee or . its des i gnated depos itory agent shall retai n possession of the Mortgage Notes and release the Mortgage Notes only in accordance with the provisions of this Resolution, the Agreement and the Letter of Credit Agreement. Agency and Trustee covenant and agree that all books and documents in their possession relating to the Mortgage Loan receipts and to the distribution of proceeds thereof shall at all times be open to inspection by such accountants or other agencies as the other parties may from time to time designate. Section 4.07. List of Bondholders. The Agency shall under the terms of this Section 4.07, keep on file at the principal corporate trust office of Trustee a list of names and addresses of the last known. holders of all Bonds and believed to be held by each of such last known holders. Trustee and Agency shall be under no responsibility with regard to the accuracy of said 1 ist. Section 4.08. Consent to Amendment of Terms and Conditions of a I Mortqaqe Loan and Release of Property From the Lien of a Mortgage. Trustee may, subject to any Private Mortgage Insurance Policy and subject to the prior written consent of the Bank, consent in writing to specified changes in the terms and conditions of any Mortgage Loan, the release of specified property from the lien of a Mortgage or the grant of an easement or right of way upon property securing a Mortgage Loan, provided that such amendment, release or . 30 - 1 . r' I I . grant does not, in the judgment of Trustee in any manner adversely affect the interests of the holders of the Bonds, and provided further that no such change shall affect the time or amounts of payment of principal and interest on the Mortgage Loan or the obl i gation to pay taxes and insurance on the property securing the Mortgage Loan at the times and in the manner specified in the Agreement. Section 4.09. Maintenance of Hazard Insurance Pol icy. Trustee shall take all steps necessary to assure that the Hazard Insurance Policy remains in full force and effect in accordance with the requirements of the Agreement. Section 4.10. Maintenance of Special Hazard Insurance Policy. Trustee shall take all steps necessary to assure that the Special Hazard Insurance Policy remains in full force and effect. Secti on 4.11. Performance of Repayment Obl igati ons. Agency covenants that it will faithfully perfonn its Repayment Obligations and that the Letter of Credit Agreement is a valid and enforceable special obligation of the Agency according to its terms. 31 ARTICLE V REVENUES AND FUNDS Section 5.01. Source of Payment of Bonds. The Bonds herein authorized and all payments by Agency hereunder are not general obligations of Agency but are special obligations payable solely and only from Revenues and receipts derived from the Mortgage Loans (including earnings thereon and insurance with respect thereto), Drawings under the Letters of Credit, and certain reserve funds (and the interest thereon) established in connection therewith and as authorized by the Constitution and laws of the State, including the Act, and provided herein. Section 5.02. Creation of Funds and Accounts. There are hereby created by Agency and ordered established the following funds and accounts to be held by Trustee: (1) the Bond Fund; (2) the Debt Service Reserve Fund; (3) the Mortgage Reserve Fund; (4) the Mortgage Loan Account; (5) Mortgage Loan Subaccount; (6) the Issuance Expense Account; (7) the Principal Account (and therein the Principal Prepayment Subaccount); (8) the General Account (and therein the Accumulation Reserve Subaccount). In addition, the Originator/Servicer shall establish a Receipts Account and an Escrow Account in accordance with the Agreement for the benefit of Trustee on behalf of Agency. The OriginatorlServicer is required at certain specified dates and under certain conditions to transfer funds in the Receipts Account to the Trustee. If the OriginatorlServicer fails to do so, Trustee shall have the right to withdraw or approve withdrawals of moneys from the Receipts Account. Section 5.03. Use of Moneys in the Bond Fund. Moneys in the Bond Fund (including the Letters of Credit and Drawings thereunder, which shall be deposited in the Bond Fund by the Trustee) shall be used solely for the payment of the principal of, premium, if any, and interest on the Bonds. Agency hereby covenants and agrees that so long as any of the Bonds issued hereunder are Outstanding it will depos it, or cause to be paid to Trustee for deposit in the Bond Fund for its account, sufficient sums from Revenues and receipts derived from the Mortgage Loans (including earnings thereon and certain insurance with respect thereto), Drawings under the Letters of Credit, and funds held by Trustee (including earnings thereon), promptly to meet and pay the principal of and interest on the Bonds as the same become due and payable at maturity or upon redemption. Nothing herein, shall be construed' as requiring Agency to use for such purpose any funds or revenues from any source other than the funds and Revenues derived from the Mortgage Loans and under the Developer Agreement and the Agreement and Drawings under the Letters of Credit and all assets of the Trust Estate. Sect i on 5.04. Use of Moneys in the Mortgage Reserve Fund. Moneys in the Mortgage Reser.ve Fund shall be used (i) to pay the principal of and interest on the Bonds, but only when and to the extent that other moneys are not available therefor in the Bond Fund, Principal Account, Principal Prepayment Subaccount the General Account or the Accumulation Reserve Subaccount; provided that rooneys in the Mortgage Reserve Fund may be used to 32 - I . l I . - I . r" i I I' . redeem all the Outstanding ~onds pursuant to Section 3.01 hereof, and (ii) to pay unpaid escrow payments, foreclosure fees, appraisal and legal fees and similar expenses required to preserve Residences or to acquire title to property subject on ly to 1 i ens or encumbrances permitted under the Agreement through the protection or enforcement of Trustee's rights conferred by law or the applicable Mortgage Loan. Moneys in the Mortgage Reserve Fund shall be used to pay principal and interest on the Bonds before moneys in the Debt Service Reserve Fund. After January is, 1985, or January is, 1986, if the Agency is requi red to extend the conmi tment period pursuant to Section 5.06, on the business day next preceding each Bond principal payment date, any moneys in the Mortgage Reserve Fund in excess of the Mortgage Reserve Fund Requirement shall be transferred to the Principal Prepayment Subaccount, and applied to the prior redemption of Bonds on the next Interest Payment Date. The Mortgage Reserve Fund snal1 be funded with funds from excess earnings from the Debt Service Reserve Fund, the General Account and the Developer's commitment fees pursuant to tne Developer Agreement, Sections 4.03, 4.04 and 4.05. ' Section !i.05. Use of Moneys in the Debt Service Reserve Fund. Moneys in the Debt Service Reserve Fund shall be used solely for the payment of the principal of and interest on the Bonds, but only when and to the extent that other moneys are not availao1e therefor, pursuant to this Resolution or the Agreement (including withdrawals from the Mortgage Reserve Fund and the Accumulation Reserve Subaccount) or from other sources, provided that moneys in the Debt Service Reserve Fund may be used to redeem all the Outstanding Bonds pursuant to Sect ion 3.01 hereof. Moneys in the Debt Serv ice Reserve Fund shall be used to pay principal and interest on the Bonds only after the Mortgage Reserve Fund is exnausted. Excess moneys in the Debt Service Reserve Fund shall be first transferred to the Mortgage Reserve Fund until January is, 1985, or January is, 1986, if the Agency is required to extend the Commitment Perioo, or until the Mortgage Reserve Fund requirement is satisfied and thereafter transferred to the Principal Prepayment Subaccount on the business day next preceding March 1 of each year, commencing in the first year in which such excesses materialize, and applied to the prior redemption of Bonds on the next Interest Payment Date. Section 5.06. Use of Moneys in the Mortgage Loan Account and Mortgage Loan Subaccount. (a) Moneys in the Mortgage Loan Account shall be used to purchase Mortgage Loans upon the submission of the Mortgage, Mortgage Note, and related documents by Originator/Servicer as required by, and upon the terms and conditions specified in, the Agreement. Subject to the Agency's ob ligation to extend the purchase period as set forth in the immediately succeed ing sentence, moneys remaining in the Mortgage Loan Account and not applied to purchase 'of the Mortgage Loans within thirty-four and one-half (34-1/2) months of the date of issuance of the Bonds, shall be transferred to the Principal Prepayment Suo account and applied to the prior redemption of the Bonds in accordance with Sections 3.01. If the Developer is not in default under any existing written agreement as of the end of the purchase periods thirty-four and one-half (34-1/2) months, then the Agency shall extend the purchase period to forty-six and one-half (46-1/2) months 33 from thirty-four and one-half (34-1/2) months if either (i) 85% of the original Bond proceeds deposited in the Mortgage Loan Account have been applied to the purchase of the Mortgage Loans, or (ii) the Agency has obtained a nationally recognized Bond or Tax Counsel's Opinion that the determination to so extend the period will not cause the Bonds to be arbitrage bonds within the meaning of Section 103(C) of the Internal Revenue Code of 1954, as amended, and the regulations promulgated thereunder. Whether or not the Agency is obl igated to extend the purchase period, it shall set forth in an officer's certificate to be delivered to the Trustee on or before January 15, 1985, or such later date as shall be acceptable to the Trustee, the basis for said action. If an extension is effected pursuant to the immediately preceding sentence, any amounts in the Mortgage Loan Account on January 15, 1986, shall be transferred to the Principal Prepayment Subaccount and appl ied to the redemption of Bonds. Subject to the Oeveloper's rights under the Developer Agreement at any time that Trustee determines that the moneys in the Mortgage Loan Account cannot be invested at a yield at least equal to the yield on the Bonds, any amounts in the Mortgage Loan Account shall be transferred to the Principal Prepayment Subaccount and appl ied to the prior redemption of Bonds in accordance with Articl e II 1. As of Marcha 16, 1982, the funds in the Mortgage Loan Account have been invested under the Investment Agreement at a yield at least equal to the yield on the Bonds for a period of three (3) years. (b) Pursuant to Subsections 4.03, 4.04 and 4.05 of the Developer Agreement all of the program commitment fees paid by the Developer and any and all draws on the letter of credit provided by the Developer to secure payment of said program commitment fees shall be deposited in the Mortgage Loan Account. Moneys transferred to the Mortgage Loan Account representing Developer program commitment fees shall be deposited in the Mortgage Loan Subaccount and shall be invested pursuant to Section 4.03 of the Developer Agreement. As such investments mature those funds, together with interest earnings thereon, shall be applied as follows: a portion to fund Mortgage Loans and, a portion to fund the Mortgage Reserve Fund. Notwithstanding any provision to the contrary contained in this Resolution, the Origination and Servicing Agreement, the Developer Agreement, the Letter of Credit Agreement or any other agreement pertaining to this transaction, no moneys paid by the Developer, whether paid directly or resulting fran a draw under the letter of credit provided by the Developer will be used by the Trustee to pay Debt Service (including premium) to the Bondholders unless and until such moneys have been held by the Trustee for no less than 91 days and during which time no petition in bankruptcy has been filed by or against the Developer. (c) If during the period of time the Trustee is holding said commitment fees, but prior to the day the funds can be used to pay Debt Service, petition in bankruptcy is filed by or against the Developer, the Letter of Credit shall be drawn upon to pay principal and interest, including premium, if any to the Bondholders. The commitment funds so held shall be retained by the Trustee until the bankruptcy court determines whether the commitment funds are subject to a preference pursuant to the Bankruptcy Act. If the commitment funds are not deemed to be subject to a preference, said funds shall be transferred to the Bank to repay the obl igation created by the draw. In the event the bankruptcy court rules that the commitment fees are subject to a preference, the Trustee shall pay the funds as directed by the bankruptcy court. 34 - "' I . -, I 'I . - 1 . r I . Section 5.07. Use of Mone1s in the Issuance Expense Account. Moneys in the Issuance Expense Account shall be used to the extent permitted by the Act to pay all costs and expenses of issuing the Bonds approved by Agency, including without limiting the generality of the foregoing, all printing expenses in connection with the Resolution, the Agreement, the Developer Agreement, Commitment Fees under the Letter of Credit Agreement and the initial Letter of Credit, the preliminary official statement, the final official statement and related underwriting documents, and the Bonds, the initial premiums with respect to insurance required to be maintained by Trustee under the Agreement, all legal fees and expenses of counsel to Agency, bond counsel and other special counsel, the rating agency fees, any accounti ng, computer and other expenses incurred in connection with determining or verifying the sufficiency of projected cash flows from Mortgage Loans to pay the Bonds and to determine that the Bonds are not arbitrage bonds, Trustee's initial fees, and the feasibility studies required in connection with the establ ishment of the lending program upon the submission of requisitions by an Authorized Officer stating that the amount thereon is justly due and owing, has not been the subject of another requisition that was paid and is a proper expense of issuing the Bonds. On September 1, 1982, or upon the payment of all the above cost s, wh i chever comes ear 1 i es t, any funds remaining in the Issuance Expense Account after the del ivery of the Bonds and not otherwise committed to the payment of such costs, as determined by certificate of an Authorized Officer, shall be transferred to the Agency free of the lien under this Resolution, and may be used for any lawful purpose. Section 5.08. Use of Moneys in the Principal Account and PrinCipal Prepayment Subaccount. Upon transfer of moneys from the Originator/Servicer's Receipts Account pursuant to the Agreement, Trustee shall deposit in the Pri nc ipa 1 Account all amounts representin9 payments of principal on Mortgage Loans, including regularly scheduled principal payments, whether timely or delinquent, Principal Prepayments, Liquidation Proceeds and Insurance Proceeds (but excluding delinquent principal payments for which amounts have been withdrawn from the Mortgage Reserve Fund or Debt Service Reserve Fund, which amount of delinquent principal payments shall be deposited first into the Debt Service Reserve Fund in amounts sufficient to maintain the Debt Service Reserve Fund Requirement and then into the Mortgage Reserve Fund in amounts sufficient to maintain the Mortgage Reserve Fund Requirement). Moneys in the PrinCipal Account representing regularly scheduled Mortgage Loan principal payments not theretofore used to purchase and cancel Bonds pursuant to Section 3.02 above shall be transferred to the Bond Fund on the day preceding each Bond principal payment date or each scheduled sinking fund redemption date and shall be used, first, to pay the prinCipal of the Bonds then maturing or then subject to sinking fund redemption, and thereafter to pay interest on the Bonds. Moneys transferred to the Principal Account representing Principal Prepayments (including Prepayment Penalties, if any, payable with respect thereto), Insurance Proceeds and Liquidation Proceeds, excess IlDneys in the Mortgage Reserve Fund, excess moneys in the Debt Service Reserve Fund, moneys transferred from the Accumulation Reserve Subaccount in accordance with 35 - Section 5.10 hereof, amounts in the Mortgage Loan Account which cannot be invested as provided in Section 5.06, and proceeds of sale of Mortgage Loans to Bank pursuant to Section 9.03 shall be deposited in the Principal Prepaymen t Subaccount. Moneys in the Pri nCipa 1 Prepaymen t Subaccount shall first be used to pay principal and interest on the Bonds past due or next becoming due to the extent moneys on deposit in the Principal Account, the Genera 1 Account, the Accumul at i on Reserve Subaccount and the Bond Fund are insufficient therefor. Subject to the provisions of Section 3.01 hereof, moneys remaining in the Principal Prepayment Subaccount may be used to purchase Bonds at any time or shall be transferred to the Bond Fund on the business day next preceding each Interest Payment Date in such amount as is necessary to redeem a like principal amount of Bonds to be called for redemption and shall be used to redeem such Bonds on such Interest Payment Date. Principal Prepayments received less than 30 days before March 1 and September 1 shall be applied to redeem Bonds on the next succeeding Interest Payment Date. Section 5.09. Use of Moneys in the General Account. After making the I deposits required under Section 5.08, Trustee shall deposit in the General Account all moneys received or collected from Whatever sources derived. Moneys in the General Account shall be used for the following payments in the fo llowi ng order of priority (moneys resulti ng from interest earned on amounts in the Principal Account and the Principal Prepayment Subaccount to be used prior to any other moneys in the General Account): (i) On the day preceding each Interest Payment Date, there shall be transferred to the Bond Fund an amount suffi ci ent to pay interest becoming due on the Bonds on such date, and on such other dates as Trustee may purchase Bonds pursuant to Section 3.02 or Section 5.08 hereof, there shall be transferred to the Bond Fund an amount sufficient to pay accrued interest on the Bonds to be purchased, in each case to the extent such funds are not available from the Principal Account for such purpose; (ii) On the day preceding each Bond principal or sinking fund payment date, there shall be transferred to the Bond Fund any amount necessary to pay the Bond principal maturing or sinking fund payments coming due on such date to the extent not availabl!! from amounts in the Principal Account representing payments of regularly scheduled principal payments on Mortgage Loans; (iii) Except as provided in Section 10.02 hereof, at such times as shall be necessary, to pay administrative expenses, the fees and expenses of Trustee, the Paying Agents and certain Agency Program Expenses (including the commitment fees for the Letter of Credit); (iv) After provision is made on a monthly basis for the payments required under paragraphs (i) through (iii) above, on the first day of each month, to pay to BanK the amounts of the Drawi ngs made under the 36 . ~, I . - I . r I . Letter of Credit, together with interest thereon, pursuant to Section 9.06 hereof; (v) On the day preceding a Bond Interest Payment Date to reimburse first the Debt Service Reserve Fund and then the Mortgage Reserve Fund, in amounts sufficient to maintain the Debt Service Reserve Fund Requirement and Mortgage Reserve Fund Requirement, respectively; (vi) On the business day after each Bond principal or sinking fund payment date, there shall be transferred to the Accumulation Reserve Subaccount all moneys remaining in the General Account. Section 5.10. Use of Moneys in the Accumulation Reserve Subaccount. Amounts in the Accumulation Reserve Subaccount may be used at any time to make up any deficiencies in amounts available to make payments required by paragraphs (i) through (vi) of Section 5.09 hereof. ,Any amounts in the Accumulation Reserve Subaccount on the day next preceding any Interest Payment Date shall be transferred on such date to the Principal Prepayment Subaccount and applied to the redemption of Bonds on the next Interest Payment Date unless Agency files with Trustee and Bank a certificate of assets and revenues (the "Certificate of Assets and Revenues") in the form hereinafter described. For purposes of this Resolution, a Certificate of Assets and Revenues shall set forth the following for the current and each subsequent Bond Year: (1) the Revenues estimated to be received from all outstanding Mortgage Loans; (2) all other estimated Revenues, including interest and income to be derived from Permitted Investments (valued in accordance with this Resolution) held in the various funds and accounts; (3) the moneys and Permitted Investments (valued in accordance with this Resolution) held in the various funds and accounts; (4) the remaining principal of and interest to become due on all Bonds Outstanding; (5) estimated Agency Program Expenses; (6) the estimated amount of Principal Prepayments to be received on all outstanding Mortgage Loans based on Agency's actual prepayment experience during the term of the Bonds or 400% of then current Federal Housing Administration prepayment experience for the State, whichever is higher. If the Certificate of Assets and Revenues shall demonstrate to the satisfaction of Trustee and Bank that: (i) Revenues estimated to be received in each subsequent Bond Year will be at least equal the principal of and interest on all Outstanding Bonds and Program Expenses to become due in each 37 such Bond Year, and (ii) the outstanding principal balance of all Mortgage Loans, together with rroneys and Permitted Investments (valued in accordance with this Resolution), held in the Mortgage Reserve Fund, the Debt Service Reserve Fund and the Accumulation Reserve Subaccount will be equal to at least 104% of the aggregate principal amount of all Bonds Outstanding, the amounts in excess of the funds needed to satisfy the test under subsections (i) and (ii) above shall be paid to Agency for application to any lawful purpose under the Act. Notwithstanding the above demonstration the amounts in excess of the funds needed to satisfy the test under sections (i) and (ii) shall not be transferred to the Agency if the amount in the Accumulation Reserve Subaccount is or will fall below $75,000, without the consent of the Bank. Otherwise, all amounts held in the Accumulation Reserve Subaccount shall be transferred to the Principal Prepayment Subaccount and used to redeem Bonds. Section 5.11. Use of Moneys in the Receipts Account. On or before the 5th day of each month, and at such other times as shall be necessary in order to reduce the aggregate amount of rroney in the Receipts Account below the appl icable 1 imits of the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation insurance coverage or $100,000, whichever is less, the Originator/Servicer shall remit to the Trustee all amounts on deposit in the Receipts Account as of the 25th day of the preceding month, which amounts, together with additional amounts as may be remitted by Originator/Servicer shall be deposited first in the Principal Account and the Principal Prepayment Subaccount to the extent required to be deposited therein pursuant to Section 5.08, and then in the General Account all funds remaining in the Receipts Account. Section 5.12. Nonpresentment of Bonds. In the event any Bond shall not be presented for payment when the principal thereof becomes due, either at maturity or at the date fixed for redemption thereof, or otherwise, if funds sufficient to pay such Bond shall have been made available to Trustee for the benefit or the Otmer thereof, all liability of Agency to the owner or holder thereof for the payment of such Bond shall forthwith cease, terminate and be completely discharged, and thereupon it shall be the duty of Trustee to hold such funds, without 1 i abil ity for interest thereon, for the benefit of the owner or holder of such Bond, who shall thereafter be restricted exclusively to such funds, for any claim of whatever nature on his part under this Resolution or on, or with respect to, said Bond. Section 5.13. Moneys to be Held in Trust. All moneys required to be deposited with or paid to Trustee for account of any fund or account established under any provisions of this Resolution or the Agreement shall be held by Trustee in trust, and, except for moneys deposited with or paid to Trustee for the redemption of Bonds, notice of the redemption of which has been duly given, shall, while held by Trustee, constitute part of the Trust Estate and be subject to the security interest created thereby. Section 5.14. Amounts RemaininQ in Funds and Accounts. Any amounts remaining in any fund or account after full pa,vrnent of the Bonds, the fees, charges and expenses of Trustee and the Orlglnator/Servicer, all Drawings, interest thereon and commitment fees under the Letter of Credit, and all other 38 - I . 1 I . - I . r' I . amounts required to be paid hereunder and under the Agreement, and after surrender of the Letter of Credit Agreement and the outstanding Letter of Credit to Bank for cancell ation, shall be paid to Agency to be used for any lawful purpose under the Act. Section 5.15. Reports from Trustee. Trustee shall furnish to Agency monthly statements of the activity and assets held in the Mortgage Loan Account, as long as it exi sts, and month ly statements of the act ivi ty and assets held in the Principal Account, the Debt Service Reserve Fund, the Mortgage Reserve Fund, the General Account and the Bond Fund, including Permitted Investments therein. Section 5.16. Certain Verifications. Trustee may, at its own initiative, or upon the written request of Agency or holders of 25% of the aggregate principal amount of Bonds then Outstanding or Bank shall, cause a firm of independent certified public accountants or such other firms experienced in making such calculations to supply Agency, Trustee and Bank with such information as Agency, Trustee, Bank or such Bondholders may request in order to determine in a manner reasonably satisfactory to Agency, Trustee or Bank all matters relating to the sUfficiency of the monthly reports furnished pursuant to Section 5.15 hereof. 39 /)1JY .10.. 0.e f~ ARTICLE VI INVESTMENT OF MONEYS Any moneys held as part of any fund or account (excluding the Receipts Account and the Escrow Account) shall be invested or reinvested in Permitted Investments. All such investments shall at all times be a part of the fund or account from whence the moneys used to acquire such investments shall have come, and all income and profits on such investments shall be first used to offset any investment losses (including losses resulting from the sale of investments) in such fund or account, and then shall be credited to the General Account, except as provided by Section 4.08 of the Developer Agreement and the following paragraph. Duri ng the period of time that funds in the Mortgage Loan Account are i nves ted under the Investment Agreement under the ci rcumstances to the extent and at the time described below, a portion of any net earnings from such investments shall be released from the lien of the Resolution and distributed to the Developer. In the event that the Mortgage Loans are purchased by the Trustee, on later dates than provided in Exhibit A of the Investment Agreement (the "Draw Schedule") and therefore, the Trustee withdraws funds at a later date, then the Developer shall be entitled to a portion of the earnings on such funds which are withdrawn from the Investment Agreement later than provided in the Draw Schedule. The amount of earnings the Developer shall be entitled to shall be 5.26% of the difference between the amount of interest actually earned on the funds invested under the Investment Agreement through March 1, 1985, or its earlier termination date less the amount of interest anticipated to be earned to the schedule draw dates (such anticipated earnings bei ng $3,507,011). The amount of any of the earnings to which the Developer shall be entitled pursuant to this paragraph, shall be determined and distributed on the date thirty-five business days following the date on which all of the funds deposited under the Investment Ageement have been withdrawn by the Trustee and the Trustee has received the final Certificate of the Depository (as described below). During the period during which funds are held under the Investment Agreement, the Depository shall provide to the Trustee, at least semi-annually, a Certificate indicating the amount of earnings earned by the Trustee under the Investment Agreement on the funds deposited therein from the Mortgage Loan Account during the periOd covered by the Certificate. (The term earnings as referred to herein shall specifically exclude those earnings necessary to satisfy the Developer's Convnitment Fee obl igation under Section 4.03 of the Developer Agreement, said amount determined to be $20,250.00). The Trustee shall be entitled to retain a firm of independent certified public accountants to make or verify the determination of earnings required herein, any fees of such firm shall be payabl e as program expenses. The Trustee I s determination as to the amount of earnings shall be conclusive and binding upon all parties and shall not be subject to challenge by anyone. The Trustee shall deposit the Commitment Fees paid by the Developer pursuant to Section 4.03 of the Developer Agreement (or the amount drawn under the Letter of Cred it described therein) into the Mortgage Loan Subaccount. 40 - I . -l I . - 1 . r I . Upon such payment, the funds shall be invested by the Trustee pursuant to the Investment Agreement. When withdrawing money from the Investment Agreement as is needed to fund Mortgage Loans and to fund the Mortgage Reserve Fund, the Trustee shall first withdraw the funds which are earning the lowest rate of interest; provided, however, no moneys representing Developer Commitment Fees shall be withdrawn by the Trustee until such funds have been held by the Trustee for a period of at least 91 days. Investments shall be made under prudent investment standards reasonably expected to produce the maximum available investment yield permitted hereunder and by 1 aw. Trustee may purchase or se 11 to itse lf or any affi li ate as principal or agent, investments authorized by this Section. Prior investments shall be made giving full consideration for the time at which funds are required to be available. The Trustee shall sell and reduce to cash a sufficient amount of such investments in the respective fund or account whenever the cash balance therein is i nsuffici ent to pay the amounts then required to be paid therefrom. Notwithstanding any other provision of this Resolution, Trustee shall not sell any Permitted Investments initially made from moneys on deposit in the Mortgage Loan Account unless the Developer shall have made the payment or payments required under Section 3.04 of the Developer Agreement. In computing the amount in any fund or account held under the provisions of this Resolution, obligations purchased as an investment of moneys therein shall be valued at the cost or market price thereof, whichever is lower, exclusive of accrued interest, provided that Permitted Investments maturing within one year from the date of valuation may be valued at cost exclusive of accrued interest. Where market prices for obligations held hereunder are not readily available, the market price for such obligations may be determined in such manner as Trustee deems reasonable. Agency and Trustee severally certify to the holders of the Bonds from time to time outstanding that moneys on deposit in any fund or account in connection with the Bonds, whether or not such IOOneys were derived from the proceeds of the sale of the Bonds or from any other sources, will not be used in a manner which will cause the interest on the Bonds to become subject to federal income taxation. Agency and Trustee severally covenant with the holders of the Bonds from time to time outstanding, that so long as any of the Bonds remain outstanding, moneys on deposit in any fund or account in connection with the Bonds, whether or not such IOOneys were derived from the proceeds of the sale of the Bonds or' from any other sources, will not be used in any manner which will cause the interest on the Bonds to become subject to federal income taxation. Agency and Trustee reserve the right, however, to make any investment of such moneys in Permitted Investments if, when and to the extent that the Code or regulations promulgated thereunder shall be repealed or interpreted to permit such investment or shall be held void by final judgment of a court of competent jurisdiction, but only if such investment made by virtue of such repeal, interpretation or decision l'oOuld not, in the opinion of counsel of recognized competence in such matters, result in making thi! interest on the Bonds subject to federal income taxation. 41 ARTICLE VII DISCHARGE OF RESOLUTION If Agency shall pay or cause to be paid, or there shall be otherwise paid or provision for payment made, (a) to or for the owners of the Bonds the principal, premium, if any, of and interest due or to become due thereon at the times and in the manner stipul ated therein, and shall payor cause to be pa id to Tru stee all sums of moneys due or to become due accordi ng to the provisions hereof, and (b) to Bank all Repayment Obligations then these presents and the Trust Estate and rights hereby granted shall cease, determine and be void, whereupon Trustee shall cancel and discharge the lien of this Resolution, and execute and del iver to Agency such intruments in writing as shall be requisite to cancel and discharge the lien hereof, and release, assign and del iver unto Agency any and all the estate, right, title and interest in and to any and all rights assigned or pledged to Trustee, held by Trustee, or otherwise subject to the lien of this Resolution, except moneys or securities held by Trustee for the payment of the principal of and interest on the Bonds. Any Bond shall be deemed to be paid within the meaning of this Article when payment of the principal of such Bond, plus premium, if any, and interest thereon to the due date thereof (whether such due date be by reason of maturity or upon redemption as provided in this Resolution, or otherwise), either (a) shall have been made or caused to have been made in accordance with the terms thereof, or (b) shall have been provided by irrevocably depositing with Trustee, in trust and irrevocably setting aside exclusively for such payment (1) moneys sufficient to make such payment or (2) Governmental Obl igations, maturing as to principal and interest in such amount and at such times as, together with any other moneys deposited with the Trustee at the same time, wi 11 insure the avail abil ity of suffi ci ent moneys to make such payment, and all necessary and proper fees, compensation and expenses of Trustee and Paying Agent pertaining to the Bonds with respect to which such deposit is made shall have been paid or the payment thereof provided for to the sat i sfact i on of Trustee. At such times as a Bond shall be deemed to be paid hereunder, as aforesaid, it shall no longer be secured by or entitled to the benefits of this Resolution, except for the purposes of any such payment from such moneys or Governmental Obligations. Notwithstanding the foregoing, in the case of Bonds which by their terms may be redeemed prior to their stated maturity, no deposit under the immediately preceding paragraph shall be deemed a payment of such Bonds as aforesaid until Agency shall have given Trustee, in form satisfactory to Trustee, irrevocable instructions: 42 - I . -, I . - I . I I . (i) stating the date when the principal of each such Bonds is to be paid, whether at matur i ty or on a redempt i on date (wh i ch sha 11 be any redemption date permitted by this Resolution); (ii) requiring Trustee to call for redemption pursuant to this Reso luti on any Bonds to be redeemed prior to maturity pursuant to (i) hereof; and (iii) requiring Trustee to publish at least twice and mail, as soon as practicable, in the manner prescribed by Article III hereof, a notice to the holders of such Bonds that the deposit required by (b) above has been made with Trustee and that sai d Bonds are deemed to have been paid in accordance with this Article and stating the maturity or redemption date upon which moneys are to be available for the payment of the principal or redemption price, if applicable, on said Bonds as specified in (i) hereof. Any moneys so deposited with Trustee as provided in this Article may at the discretion of Agency also be invested and reinvested in Governmental Obligations, maturing in the amounts and times as hereinbefore set forth, and all income from all Governmental Obligations in the hands of Trustee pursuant to this Article which is not required for the payment of the Bonds and interest thereon with respect to whi ch such moneys shall have been so deposited, shall be deposited in the General Account as and when realized and collected for use and application as are other moneys deposited in that fund. No such deposit under this Article shall be made or accepted hereunder and no use made of any such deposit unless Trustee shall have received an opinion of counsel of recognized standing on the subject of municipal law and federal arbitrage regulations to the effect that such deposit and use would not cause the Bonds to be treated as arbitrage bonds within the meaning of Section l03(c)(2) of the Code. Anything in this Resolution to the contrary notwithstanding, if moneys or Governmental Obligations have been deposited or set aside with Trustee pursuant to this Article for the payment of Bonds and such Bonds shall not have in fact been actually paid in full, no amendment to the provisions of this Article shall be made without the consent of the holder of each Bond affected thereby. Anything in this Resolution to the contrary notwithstanding, but subject to the right of Trustee to require Agency to furnish an approving opinion of counsel acceptable to Trustee, any moneys held by Trustee in trust for the payment and discharge of any of the Bonds which remain unclaimed for four (4) years after the date when such Bonds have become due and payable, either at their stated maturity dates or by call for earlier redemption, if such moneys were held by Trustee at such date, or for four (4) years after the date of deposit of such moneys if deposited with Trustee after the said date when such Bonds become due and payable, shall, at the written request of Agency, be 43 repaid by Trustee to Agency, free from trust, and Trustee shall thereupon be releasoo and discharged with respect thereto and the Bondholders shall look only to Agency for the payment of such Bonds and interest thereon, if any. 44 . I . , I . . I . IJ I . ARTICLE VIII DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND BONDHOLDERS Section 8.01. Defaults; Events of Default. If any of the following events occur, subject to the provisions of Section 8.09 hereof, it is hereby defined as and declared to be and to constitute an "event of default": (a) Default in the due and punctual payment of any interest on any Bond; (b) Default in the due and punctual payment of the principal of and premium, if any, on any Bond, whether at the stated maturity thereof or when the same is scheduled to be called for redemption by sinking fund payment or otherwise; (c) Defau 1 t by the Bank under the Letter of Cred it Agreement or the Letter of Credit; or (d) Default in the performance or observance of any other of the covenants, agreements or conditions on the part of Agency contained in this Resolution or in the Bonds and failure to remedy the same after notice thereof pursuant to Section 8.09 hereof. Section 8.02. Remedies; Rights of Bondholders. Upon the occurrence of an event of default Trustee may pursue any available remedy at law or in equity to enforce the payment of the principal and interest on the Bonds then Outstanding, including enforcement of any rights of Agency under the Developer Agreement or the Agreement. If an event of default shall have occurred, Trustee may, and if requested so to do by the holders of not less than 25 percent in aggregate principal alOOunt of Bonds then Outstanding and indemnified as provided in Section 10.01(1) hereof, Trustee shall be obligated to exercise one or more of the rights and powers conferred by this Section, as Trustee, being advised by counsel, shall deem most expedient in the interests of the Bondholders. No remedy by the terms of this Resolution conferred upon or reserved to Trustee (or to the Bondholders) is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given to Trustee or to the Bondholders hereunder or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default or event of default shall impair any such right or power or shall be construed to be a waiver of any such default or event of default or acquiescence therein; and every such right and power may be exercised from time to time as often as may be deemed expedient. 45 No waiver of any default or event of default hereunder, whether by Trustee or by the Bondholders, shall extend to or shall affect any other default or event of default or shall impair any rights or remedies consequent thereon. No assets of the Trust Estate may be so ld after the occurrence of an event of default unless unpaid Drawings are outstanding under the Letter of Credit. Section 8.03. Right of Bondholders to Direct Proceedings. Anything in this Resolution to the contrary notwithstanding, the holders of a majority in aggregate principal amount of Bonds then Outstanding shall have the right, at any time, subject to the provisions of Section 10.01(1), by an instrument or instruments in writing executed and delivered to Trustee, to direct the method and place of conducting all enforcement of the terms and conditions of this Reso lution, or for the appointment of a receiver or ,any other proceedings hereunder; provided that such direction shall not be othel'\~ise than in accordance with the provisions of law and of this Resolution. Section 8.04. Application of Moneys. All moneys received by Trustee pursuant to any right given or action taken under the provisions of this Article or by virtue of action taken under provisions of the Agreement shall, after payment of the costs and expenses of the proceedings resulting in the collection of such moneys and of the expenses, liabilities and advances incurred or made by Trustee, be deposited in the Bond Fund and all moneys in the Bond Fund (other than moneys held for redemption of Bonds duly called for redemption) shall be applied as follows: (a) Unless the principal of all the Bonds shall have become due and payable, all such moneys shall be applied: FIRST - To the payment to the persons entitled thereto of all interest then due on the Bonds, in the order of the maturity of such interest and, if the amount available shall not be sufficient to pay in full said amount, then to the payment ratably, according to the amounts due to the persons entit led thereto, without any discrimination or privilege; SECOND - To the payment to the persons entitled thereto of the unpaid principal of any of the Bonds which 'shall have become due (other than Bonds matured or called for redemption for the payment of which moneys are held pursuant to the provisions of this Resolution), in the order of their due dates, with interest on such Bonds from the respect ive dates upon wh i ch they became due at the rate borne by the Bonds and, if the amount available shall not be sufficient to pay in full Bonds due on any particular date, together with such interest, then to the payment ratably, according to the amount of principal due on such date, to the persons entitled thereto without any discrimination or privilege; and 46 - 1 . 1 I . - ,:1 . II 1 . THIRD - To be held for the payment to the persons entitled thereto as the same shall become due of the principal of and interest on the Bonds which may thereafter become due either at maturity or upon call for redemption prior to maturity and, if the amount available shall not be sufficient to pay in full Bonds due on any particular date, together with interest then due and owing thereon, payment shall be made ratably according to the amount of principal due on such date to the persons entitled thereto without any discrimination or privilege. (b) If the principal of all the Bonds shall have become due, all such moneys shall be applied to the payment of the principal and interest then due and unpaid upon the Bonds, without preference or priority of principal over interest or of interest over principal, or of any i nsta llment of interest over any other i nsta llment of interest, or of any Bond over any other Bond, ratably, according to the amounts due respectively for principal and interest, to the persons entitled thereto without any discrimination or privilege. Whenever moneys are to be applied pursuant to the provisions of this Section, such moneys shall be applied at such time, and from time to time, as Trustee shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. Whenever Trustee shall apply such funds, it shall fix the date (which shall be an Interest Payment Date unless it shall deem another date more suitable) upon which such application- is to be made and upon such date interest on the amounts of principal to be paid on such dates shall cease to accrue. Trustee shall give notice as it may deem appropriate of the deposit with it of any such moneys and of the fixing of any such date, and shall not be required to make payment to the ho lder of any Bond until such Bond shall be presented to Trustee for appropriate endorsement or for cancellation if fully paid. Whenever all principal of and interest on all Bonds have been paid under the provisions of this Section and all expenses and charges of Trustee have been paid, any balance remaining in the Bond Fund, and in any other fund or account hereunder, shall be paid to Agency as provided in Article V hereof. Section 8.05. Remedies Veste::l in Trustee. All rights (including the right to file proof of Claims) under this Resolution or'under any of the Bonds may be enforce::l by Trustee without the possession of any of the Bonds or the production thereof in any trial or other proceeding related thereto and any such suit or proceeding instituted by Trustee shall be brought in its name as Trustee without the necessity of joining as plaintiffs or defendants any holder of the Bonds, and any recovery of judgment shall be for the equal and ratable benefit of the holders of the Outstanding Bonds. Section 8.tli. Rights and Remedies of Bondholders. No holder of any Bond shall have any right to institute any suit, action or proceeding at law or in equity for the enforcement of this Resolution or for the execution of 47 any trust hereof or for the appointment of a receiver or any other remedy hereunder, unless and until (1) a default has occurred of which Trustee has been notified as provide:! in Section 10.01(h) hereof, or of which by said subsection it is deemed to have notice, (2) such default shall have become an event of default and the owners of not less than 25% in aggregate principal amount of Bonds then Outstanding shall have made written request of Trustee and shall have afforded it 10 days either to proceed to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name, (3) Trustee shall have been indemnified as provide:! in Section 10.01(1) hereof, and (4) Trustee shall thereafter fail or refuse to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name; it being understood and intended that no one or more owners or holders of the Bonds shall have any right in any manner whatsoever to affect, disturb or prejudice the liens of this Resolution by its, his or their action or to enforce any right hereunder except in the manner herein provided, and that all proceedings at law _or in equity shall be instituted, had and maintained in the manner herein provided and for the equal and ratable benefit of the owners of all Bonds then Outstanding. However, nothing contained in this Resolution shall affect or impair the right of any Bondholder to enforce the payment of the principal of and interest on any Bond at and after the maturity thereof, or the obligation of Agency to pay the principal of and interest on any Bond at and after the maturity thereof, or the obligation of Agency to pay the principal of and interest on each of the Bonds issued hereunder to the respective holders hereof at the time, place, from the source and in the manner in the Bonds expressed. Section 8.07. Termination of Proceedings. In case Trustee shall have proceeded to enforce any right under this Resolution by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely, then and in every such case Agency, Trustee and the Bondho lders shall be restored to their former positions and rights hereunder, respectively, with regard to the property herein subject to this Resolution, and all rights, remedies and powers of Trustee shall continue as if no such proceedings had been taken. Section 8.08. Waivers of Events of Default. Trustee may at its discretion waive any event of default hereunder and its consequences and rescind any declaration of maturity of principal, and shall do so upon the written request of the holders of (1) more than 66-2/3 percent in aggregate principal amount of all the Bonds then Outstanding in respect of which default in the payment of principal or interest, or both, exists, or (2) more than 50 percent in aggregate principal amount of all Bonds then Outstanding in the case of any other default; provided, however, that there shall not be waived (a) any event of default in the payment of the principal of any Outstanding Bonds at the date of maturity or mandatory sinking fund redemption date specified therein or (b) any default in the payment when due of the interest on any such Bonds unless, prior to such waiver or rescission, all arrears of interest or all arrears of payments of principal when due, as the case may be, with interest on overdue principal at the rate borne by the Bonds, and all expenses of Trustee in connection with such default shall have been paid or 48 - I~, . -l , , I I . - I . -i I . provided for, and in case of any such waiver or rescission, or in case any proceedings taken by Trustee on account of any such default shall have been d isconti nued or abandoned or determi ned adverse ly, then and in every such case Agency, Trustee and the Bondholders shall be restored to their former positions and rights hereunder, respectively, but ro such waiver or rescission sha 11 extend to any subsequent or other default, or impair any right consequent thereon. Section 8.09. Notice of Oefaults under Section 8.0l(d); Opportunity of Agency and the OriqinatorjServicer to Cure Such Oefaults. Anything herein to the contrary notwithstanding, no default under Section 8.0l(d) hereof shall constitute an event of default until actual notice of such default by first class ma i 1 (postage prepaid) sha 11 be given to Agency (with a copy to the OriginatorjServicer and the Bank) by Trustee or by the owners of not less than 25 percent in aggregate principal amount of all Bonds Outstanding and Agency, the Origi natorjServicer and the Bank shall have had 60 days after receipt of such notice to correct said default or cause said default to be corrected, and sha 11 not have corrected said default or caused said default to be corrected within the applicable period; provided, however, if said default be such that it cannot be corrected within the applicable period, it shall not constitute an event of default if corrective action is instituted by Agency, the OriginatorjServicer or the Bank within the applicable period and diligently pursued until the default is corrected. With regard to any alleged default concerning which notice is given to Agency, the OriginatorjServicer and the Bank under the provisions of this- Section, Agency hereby grants the OriginatorjServicer and the Bank full authority for the account of Agency to perform any covenant or obligation alleged in said rotice to constitute a default, in the name and stead of Agency \~ith full power to do any and all things and acts to the same extent that Agency could do and perform any such things and acts and with power of substitution. 49 ARTICLE IX THE LETTER Of CREDIT Section 9.01. General. Bank has entered into an agreement (the "Letter of Credit Agreement") as of March 1, 1982, with the Agency and the Trustee whereby the Bank has agreed to issue annual irrevocable letters of credit ("Irrevocable Letter of Credit") to provide for the payment of principal and interest on the Bonds as they become due in the event that other Revenues and reserves are insufficient to pay such amounts. This article establishes procedures for Drawings under the Letter of Credit and the application thereof to Bond payments, procedures for the repayment of such Drawings with interest, and establ is hes the security for such repayment. Nothwithstand ing any other provision of this Resolution (including other provisions qualified by phrases such as "Notwithstanding any other provision of this Resolution . . ." or which otherwise purport to control conflicting provision\>, except such phrases as set forth in Section 5.06(b) of this Resolution) the provisions of this Article shall control and prevail over any and all conflicting provisions. Section 9.02. Authority to Execute the Letter of Credit Agreement; fee. The Executive Director of Agency, in the name and on behalf of Agency, is authorized to execute and deliver the Letter of Credit Agreement. Trustee shall pay a fee to the Bank at the times and in the manner provided in the Letter of Cred it Agreement. Section 9.03. Drawings under Letter of Credit. In accordance with the Letter of Credit Agreement, prior to each Interest Payment Date the Trustee shall provide to the Bank a completed notice of accounting (as defined in the Letter of Credit Agreement) indicating whether there will be sufficient moneys to pay Debt Service coming due on said Interest Payment Date without drawing on the Letter of Credit or withdrawing moneys from the Debt Service Reserve fund. In the event the notice of accounting indicates that to pay Debt Service on the upcoming Interest Payment Date without drawing on the Letter of Credit the Trustee would be required to withdraw moneys from the Debt Service Reserve Fund, the Bank shall have the option pursuant to the Letter of Credit Agreement to direct the Trustee to draw upon the Letter of Cred it to pay Debt Service without withdrawing moneys from the Debt Service Reserve fund (withdrawal from other funds established under the Resolution made in accordance with the terms of the Resolution). In the event the notice of accounting indicates that in order to pay when due Debt Service due on the next Interest Payment Date, the Trustee would be reqUired to withdraw from the Debt Service Reserve Fund all moneys then on deposit therein and make a draw under the Letter of Credit, then the Bank shall have the option to deposit with the Trustee in the Principal Prepayment Subaccount sufficient funds to pay and retire all Outstanding Bonds and to discharge the Reso luti on in accordance with its terms on the Interest Payment Date next succeed ing the Interest Payment Date to wh i ch such draft relates. 50 - I . '-- I . - I . I I . After such funds are deposited with the Trustee, am after the Resolution has been discharged, the Trustee shall assign to the Bank all of its right, title and interest in and to the outstanding Mortgage Loans, Revenues (including all insurance policies or contracts of insurance or guarantees on or with respect to any Mortgage Loan), the Origination and Servicing Agreement, am all funds and accounts required to redeem all Outstanding Bonds and discharge the Resolution held under the Resolution. If the Bank should receive from the Trustee such notice of accounting that indicates that in order to pay when due Debt Service due on the next Interest Payment Date, the Trustee would be required to withdraw from the Debt Service Reserve Fund all moneys then on deposit therein am make a draw under the Letter of Credit, then the Bank shall also have the option to deposit with the Trustee sufficient funds to pay and retire a portion but not all of the Outstand ing Bonds the Agency or the Trustee shall designate certain of the outstanding Mortgage Loans then in default, the aggregate principal amount of Bonds so redeemed and shall assign all of their right, title and interest in and to the outstanding Mortgage Loans so designated and insurance policies or contracts of insurance or guarantee on or with respect to such Mortgage Loans to the Bank. Section 9.04. Application of Drawings. All Drawings paid by Bank to Trustee shall be deposited in the Bond Fund. Section 9.05. Repayment of Drawings. Drawings, together with interest, as provided in the Letter of Credit Agreement, shall be repaid from the General Account in accordance with the priorities established in Section 5.09. Section 9.00. Surrender of Irrevocable Letter of Credit. Upon such purchase of all Mortgage Loans, Trustee shall surrender the Letter of Credit Agreement and the then outstanding Irrevocable Letter of Credit for cance 11 at ion. Section 9.07. Bank Consent Required to Certain Acts. Without the prior written consent of Bank, (i) Agency may not adopt and Agency and Trustee may not enter into any resolution or resolutions supplemental to this Resolution until the Letter of Credit has been surrendered to Bank for cancellation; and (ii) the Agreement may not be amended, changed, modified, altered or terminated. Section 9.08. Books and Accounts. Agency and Trustee covenant and agree that all books and documents in their possession relating to the Mortgage Loans, funds, accounts, Revenues, Permitted Investments, and Bonds, and generally to the administration of the Trust Estate created by the Resolution, shall be open to inspection by authorized agents of Bank and that abstracts and copies thereof may be made by Bank I s agents. Section 9.09. Sale of Mortgage Loan Pursuant to Letter of Credit Agreement. Pursuant to the Letter of Credit Agreement the Bank shall at any time have the option to purchase only Mortgage Loans from Trustee, the 51 payments on which, at the time of such purchase, are in default, at a price equal to 100% of the unpaid principal balance of such Mortgage Loan. 52 - I . I . - I . r I . ARTICLE X TRUSTEE Section 10.01. Acceptance of the Trustee. Trustee hereby accepts the trusts imposed upon it by this Resolution, and agrees to perform said trusts, but only upon and subject to the following express terms and conditions: (a) Trustee, prior to the occurrence of an event of default and after the curing of all events of default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Resolution. In case an event of default has occurred (which has not been cured or waived), Trustee shall exercise such of the rights and powers vested in it by this Resolution, and use the same degree of care and skill in ,their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) Trustee may execute any of the trusts or powers hereof and perform any of its duties by or through attorneys, agents, receivers or employees but shall be answerable for the conduct of the same in accordance with the standard specified above (but with regard to attorneys and receivers, only with respect to their selection), and shall be entitled to advice of counsel concerning all matters of trusts hereof and the duties hereunder, and may in all cases pay such reasonable compensation to all such attorneys, agents, receivers and employees as may reasonably be employed in connection with the trusts hereof. Trustee may act upon the opinion or advice of any attorneys (who may be the attorney or attorneys for Agency or the Originator/Servicer), approved by Trustee in the exercise of reasonable care. Trustee shall not be responsible for any loss or damage resulting from any action or nonaction in good faith in reliance upon such opinion or advice. (c) Trustee shall not be respons ib 1 e for any rec ita 1 here i n, or in the Bonds, or for the recording or re-recording, filing or refiling of this Resolution, or any other instrument required by this Resolution to secure the Bonds, or for the validity of the execution by Agency of this Resolution or of any supplements thereto or instruments of further assurance, or for the sufficiency of the security for the Bonds issued hereunder or intended to be secured hereby. Except as otherwise provida:l in Section 8.02 hereof, Trustee shall have no obligation to perform any of the duties of Agency under the Agreement or the Oeveloper Agreement. (d) Trustee shall not be accountable for the use of any Bonds authenticated or delivered hereunder. Trustee may become the owner of Bonds secured hereby with the same rights which it would have if not Trustee. 53 (e) Trustee shall be protected in acting upon any notice, request, consent, certificate, order, affidavit, letter, telegram or other paper or document believed to be genuine and correct and to have been signed or sent by the proper person or persons. Trustee shall not withho ld unreasonably its consent, approval or action to any reasonable request of Agency or the OriginatorjServicer. Any action taken by Trustee pursuant to this Resolution upon the request or authority or consent of any person who at the time of making such request or giving such authority or consent is the owner of any Bond, shall be conclusive and binding upon all future owners of the same Bond and upon Bonds issued in exchange therefor or in place thereof. (f) As to the existence or nonexistence of any fact or as to the sufficiency or validity of any instrument, paper or proceeding, Trustee shall be entitled to rely upon a certificate signed by an Authorized Officer of Agency or the Originator/Servicer as sufficient evidence of the facts therein contained and prior to the occurrence of a default of which Trustee has been notified as provided in subsection (h) of this Section, or of which by said subsection it is deemed to have notice, shall also be at liberty to accept a similar certificate to the effect that any particular dealing, transaction or action is necessary or expedient, but may, at its discretion, secure such further evidence deemed necessary or advisable, but shall in no case be bound to secure the same. Trustee may accept a certificate of an Authorized Officer to the effect that a resolution in the form therein set forth has been adopted by Agency as conclusive evidence that such resolution has been duly adopted, and is in full force and effect. (g) The permissive right of Trustee to do things enumerated in this Resolution shall not be considered as a dJty and it shall not be answerable for other than its negligence or wi llful misconduct. (h) Trustee shall not be required to take notice or be deemed to have notice of any default hereunder except fai lure by Agency to cause to be made any of the payments to Trustee required to be made by Article IV hereof or the failure of Agency or the OriginatorlServicer to file with Trustee any document required by this Resolution or the Agreement to be so filed subsequent to the issuance of the Bonds, unless Trustee shall be specifically notified in writing of such default by Agency or by the owners of at least 25 percent in aggregate principal amount of Bonds then Outstanding and all notices or other instruments required by this Resolution to be delivered to Trustee must, in order to be effective, be delivered at the principal corporate trust office of Trustee, and, in the absence of such notice so delivered, Trustee may conclusively assume there is no default except as aforesaid. (i) At any and all reasonable times Trustee, and its duly au thorizecl agents, attorneys, experts, eng i neers, accountants and representatives, shall have the right fully to inspect any and all of the property herein conveyed, including all books, papers and records of 54 - I . I . - I . r-I I . Agency pertaining to the revenues and receipts under the Mortgage Loans and the Agreement and the Bonds, and to take such memoranda from and in regard thereto as may be desired. (j) Trustee shall not be required to give any bond or surety in respect of the execution of the said trusts and powers or otherwise in respect of the premises. (k) Notwithstanding anything elsewhere in this Resolution contained, Trustee shall have the right, but shall not be required, to demand, in respect of the authentication of any Bonds, the withdrawal of any cash, or the taking of any action whatsoever within the purviE?tl of this Reso luti on, the de 1 i very of any showi ngs, certifi cates, opi ni ons, appraisals or other information, or corporate action or evidence thereof, in addition to that by the terms hereof required as a condition of such action by Trustee deemed desirable for the purpose of establishing the right of Agency to the authentication of any Bonds, the withdrawal of any cash, or the taking of any other action by Trustee. (1) Before taking the action referred to in Section 8.02, 8.03, 8.06 or 9.04 hereof, Trustee may require that a satisfactory indemnity bond be furnished for the reimbursement of all expenses to which it may be put and to protect it against all liability, except liability which is adjudicated to have resulted from its negligence or willful default by reason of any action so taken. (m) All moneys received by Trustee shall, until used or applied or invested as herein provided, be held in trust for the purposes for which they were received but need not be segregated from other funds except to the extent required by law. Neither Trustee nor any paying agent shall be under any liability for interest on any moneys received hereunder except such as may be agreed upon. Section 10.02. Fees, Charges and Expenses of Trustee. Trustee shall be entitled to payment of reasonable fees for its services rendered hereunder and reimbursement of all advances, counsel fees and other expenses reasonably and necessarily made or incurred by Trustee in connection with its services as Trustee hereunder, all in accordance with the letter from Trustee accepting its appoi ntment, dated February 15, 1982, which letter is hereby approved and accepted. Such fees and expenses are payable solely from moneys available therefor as specified in Section 5.09 hereof. Section 10.03. Notice to Bondholders if Default Occurs. If a default occurs of which Trustee is by Section 10.01(h) hereof required to take notice or if notice of default be given as in Section 10.01(h) provided, then Trustee shall promptly give written notice thereof by registered or certified mail to the last known owners of all Bonds then Outstanding, shown by the list of Bondholders required by Section 4.07 hereof to be kept at the office of Trustee. 55 Section 10.04. Intervention by Trustee. In any judicial proceeding concerning the issuance or the payment of the Bonds to which Agency is a party and which in the opinion of Trustee and its counsel has a substantial bearing on the interest s of owners of the Bond s, Trustee may intervene on behalf of Bondholders and shall do so if requested in writing by the owners of at least 25 percent of the aggregate principal amount of Bonds then Outstanding, but only upon receipt of the indemnification as provided in Section 10.01(1) above. Section 10.05. Successor Trustee. Any corporation or association into which Trustee may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its tr'ust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party, ipso facto shall be and become successor Trustee hereunder and vested with all of the title to the trust estate and all the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding. Section 10.06. Resignation by Trustee. Trustee and any successor Trustee may at any time resign from the trusts hereby created by giving 30 days' written notice by registered or certified mail to Agency, and the Originator/Servicer, and by first class mail (postage prepaid) to the owners of each Bond, and by publication in the same manner as provided by Section 11.02 hereof with respect to supplemental resolutions and such resignation shall take effect upon the appointment of a successor Trustee by the Bondholders or by Agency. If no successor Trustee has been appointed by the Bondholders or Agency by the expiration of such 30-day period, Trustee may in its sole discretion appoint a successor Trustee meeting the qualifications set forth in Section 10.08 to serve as successor Trustee as such until a successor or temporary Trustee has been appointed pursuant to Section 10.08 below. Section 10.07. Removal of Trustee. Trustee may be removed at any time, by an instrument or concurrent instruments in writing delivered to Trustee, to Agency and to the Originator/Servicer, and signed by the owners of a majority in aggregate principal amount of Bonds then Outstanding. Section 10.00. Appointment of Successor Trustee by the Bondholders; Temporary Trustee. In case Trustee hereunder shall resign or be removed, or be dissolved, or shall be in course of dissolution or liquidation, or otherwise become incapable of acting hereunder, or in case it shall be taken under the control of any public officer or officers, or of a receiver appointed by a court, a successor may be appointed by the owners of a majority in aggregate principal amount of Bonds then Outstanding, by an instrument or concurrent instruments in writing signed by such owners, or by their attorneys in fact, duly authorized art! a copy of which shall be de1i"ered personally or sent by registered mail to Agency and the Originator/Serv .cr. Nevertheless, in case of such vacancy, Agency by resolution and upon written notice to the Originator/Servicer may appoint a temporary Trustee to fi 11 such vacancy until 56 - I . ,I '-- I . - I . ri ,~ I . a successor Trustee shall be appointed by the Bondholders in the manner above provided; and any such temporary Trustee so appointed by Agency shall imrned i ate 1y and without further act be superseded by Trustee so appoi nted by such Bondholders. Notice of the appointment of a successor Trustee shall be given in the same manner as provided by Section 10.06 hereof with respect to the resignation of a Trustee. Every successor Trustee appointed pursuant to the provisions of this Section shall be a trust company or bank in good standing, located in or incorporated under the laws of the State, duly authorized to exercise trust powers and subject to examination by federal or state authority, having a reported capital and surplus, as shown by its most recent audited statement (whiCh statement shall have been timely issued and shall have been accompanied by an unqualified opinion of its independent auditors), of not less than $50,000,000. Section 10.09. Concerning Any Successor Trustee. Every successor Tru stee appoi nted hereunder sha 11 execute, acknowl edge and de 1 iver to its or his predecessor and also to Agency and the Originator/Servicer an instrument in writing accepting such appointment hereunder, and thereupon such successor, without any further act, deed or conveyance, shall become fully vested with all the estates, properties, rights, powers, trusts, duties and obligations of its predecessors; but such predecessor shall, nevertheless, on the written request of Agency, or of its successor. execute and de 1 iver an instrument transferring to such successor Trustee all the estates. properties. rights, powers and trusts of such predecessor hereunder; and every predecessor Trustee shall deliver all securities and moneys held by it as Trustee hereunder to its or his successor. Should any instrument in writing from Agency be required by any successor Trustee for more fully and certainly vesting in such successor the estate, rights, powers and duties hereby vested or intended to be vested in the predecessor, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by Agency. The resignation of any Trustee and the instrument or instruments removing any Trustee and appointing a successor hereunder, together with all other instruments provided for in this Article, shall be fi led or recorded by the successor Trustee in each recording office where this Resolution or notice hereof shall have been filed or recorded. Section 10.10. Appointment of Co-Trustee. It is the purpose of this Resolution that there shall be no violation of any law or any jurisdiction (including particularly the law 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 Resolution. the Agreement, the Developer Agreement. the Mortgage Loans and in particular, in case of the enforcement thereof on default. or in case Trustee deems that by reason of any present or future law of any juriSdiction it may not exerc ise any of the powers, rights or remed ies herein granted to Trustee or hold title to the properties, in trust, as herein granted, or take any other action which may be desirable or necessary in connection therewith, it may be necessary that Trustee appoint an additional individual or institution as a separate or Co-Trustee. The following provisions of this Section are adopted to these ends. 57 . In the event that Trustee appoints an additional individual or institution as a separate or Co-Trustee, each and every remedy, power, right, claim, demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this Resolution to be exercised by or vested in or conveyed to Trustee with respect thereto shall be exercisable by and vest in such separate or Co-Trustee but on ly to the extent necessary to enable such separate or Co-Trustee 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 Issuer be required by a separate or Co-Trustee so appointed by 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, be executed, acknowledged and delivered by Agency. In case any separate or Co- Trustee, or a successor to either, shall die, become, incapable of acting, resign or be removed, all the estates, properties, rights, pOrlers, trusts, duties and obligations of such separate or Co-Trustee, so far as permitted by law, shall vest in and be exercised by Trustee until the appointment of a new I Trustee or successor to such separate or Co-Trustee. 58 . Il '- I . -if) , , / I . r I '_J I . ARTICLE XI SUPPLEMENTAL RESOLUTIONS Section 11.01. Supplemental Resolutions Not Requiring Consent of Bondholders. Agency and Trustee may, without the consent of, or notice to, any of the Bondholders, but only with the consent of the Bank, enter into a resolution or resolutions supplemental to this Resolution as shall not be inconsistent with the terms and provisions hereof for anyone or more of the following purposes: (a) To cure any ambiguity, inconsistency or formal defect or omission in this Resolution; (b) To grant to or confer upon Trustee for the benefi t of the Bondholders any additional benefits, rights, remedies, powers or authorities that may lawfully be granted to or conferred upon the Bondholders or Trustee, or to make any change which, in the judgment of Trustee, is not to the prejudice of the Bondholders or to the Bank; (c) To subject to this Resolution additional revenues, properties or co 11 atera 1 ; (d) To modify, amend or supplement this Resolution or any resolution supplemental hereto in such manner as to permit the qualification hereof and thereof under the Trust Indenture Act of 1939 or any similar federal statute now or hereafter in effect or to permit the qualification of the Bonds for sale under the securities laws of any of the states of the United States of America, and, if they so determi ne, to add to this Reso luti on or any reso luti on supp 1 ementa 1 hereto such other terms, conditions and provisions as may be permitted or required by said Trust Indenture Act of 1939 or similar federal statu te; or (e) To evidence the appointment of a separate or Co-Trustee or the succession of a new Trustee or Paying Agent hereunder. Section 11.02. Supplemental Resolutions Requiring Consent of Bondholders. Exclusive of supplemental resolutions covered by Section 11.01 hereof and subject to the terms and provisions contained in this Section, and not otherwise, the holders of not less than sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding shall have the right, from time to time, anything contained in this Resolution to the contrary notwithstanding, to consent to and approve the adoption by Agency and approval of Trustee of such other resolution or resolutions supplemental hereto as shall be deemed necessary and desirable by Trustee for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Resolution or in any supplemental resolution; provided, however, that nothing in this Section contained shall 59 permit, or be construed as permitting, without the consent of the holders of all Outstanding Bonds, (a) an extension of the maturity or mandatory sinking fund redemption date of the principal of or the interest on any Bond issued hereunder, or (b) a reduction in the principal amount of any Bond or the rate of interest, or sinking fund redemption requirements, thereon, or (c) a making of the principal of or interest on any Bond payable in any coin or currency other than that provided in the Resolution, or (d) a deprivation of any Bondholder of the lien on the Revenues and assets pledged under this Resolution, or (e) the creation of any lien on the Revenues pledged hereunder equal or prior to the lien on any Bond outstanding, or the lien for repayment obligation to the Bank, or (f) a privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (g) a reduction in the aggregate principal amount of the Bonds required for consent to such supplemental resolution, or (h) any modification of the trusts, powers, rights, obligations, duties, remedies, immunities and privileges of Trustee, without the written consent of Trustee. If at any time Agency shall request Trustee to enter into any such supplemental resolution for any of the purposes of this Section, Trustee shall, upon being satiSfactorily indemnifi ed with respect to expenses, cause notice of the proposed execution of such supplemental resolution to be mailed by registered mail or certified mail to each owner of a Bond as shown on the list of Bondholders required by Section 4.07 hereof, and published at least one time in a newspaper or financial journal published in the English language and of general circulation in the City. Such notice shall briefly set forth the nature of the proposed supplemental resolution and shall state that copies thereof are on file at the principal corporate trust office of Trustee for inspection by all Bondholders. If, within 60 days or such longer period as shall be prescribed by Agency following the final publication of such notice, the holders of not less than sixty percent (60%) in aggregate principal amount of the Bonds Outstanding at the time of the execution of any such supplemental resolution shall have consented to and approved the execution thereof as herein provided, no holder of any Bond shall have any right to object to any of the terms and provisions contained herein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain Trustee or Agency from executing the same or from taking any action pursuant to the prov i si ons thereof. Upon the execut i on of any such supplemental resolution as in this Section permitted and provided, this Resolution shall be and be deemed to be modified and amended in accordance therewi th. Anything herein to the contrary notwithstanding, (i) if the OriginatorlServicer or the Bank is not in default under the Agreement at such time, a supplemental resolution under this Article affecting the OriginatorlServicer's or the Bank's rights or obligations or in any way changing the priority or use of moneys under the Resolution or the Agreement or the Letter of Credit Agreement shall not become effective unless and until the OriginatorlServicer or the Bank as the case may be, shall have consented to the execution and delivery of such supplemental resolution. In this regard, Trustee shall cause notice of the proposed execution and delivery of 60 . I . II I . , " . u Ip . any such supplemental resolution together with a copy of the proposed supplemental resolution to be mailed by certified or registered mail to the OriginatorlServicer and to the Bank at least 15 days prior to the proposed date of execution and delivery of any such supplemental resolution. The OriginatorlServicer or the Bank shall be deemed to have consented to the execution and delivery of any such supplemental resolution if Trustee does not receive a letter of protest or objection thereto signed by or on behalf of such OriginatorlServicer or by the Bank on or before 4:30 p.m., local time, on the 15th day after the mailing of said notice and a copy of the proposed supplemental resolution. 61 - ARTICLE XII AMENDMENT OF AGREEMENT Section 12.01. Amendments, etc., to Agreement Not Requiring Consent of Bondholders. Agency and Trustee shall without the consent of or notice to the Bondho lders consent to any amendment, change or mod ifi cat i on of the Agreement as may be required (a) by the provisions of the Agreement or this Resolution, (b) for the purpose of curing any ambiguity or formal defect or omission, (c) so as to add additional rights required in accordance with the provisions of the Agreement, or (d) in connection with any other change therein which, in the judgment of Trustee, is not to the prejudice of Trustee, the holders of the Bonds, or the Bank. Section 12.02. Amendments, etc., to Agreement Requiring Consent of Bondholders. Except for the amendments, changes or modffications as provided in Section 12.01 hereof, neither Agency nor Trustee shall consent to any other amendment, change or modification of the Agreement without the prior publication of notice and the written approval or consent of the holders of not less than sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding given and procured as in this Section provided, or the Bank. If at any time Agency and the Originator/Servicer shall request the consent of Trustee to any such proposed amendment, change or modification of the Agreement, Trustee shall, upon being satisfactorily indemnified with respect to expenses, cause notice of such proposed amendment, change or modification to be published and mailed in the same manner as provided by Section 11.02 hereof with respect to supplemental resolutions. Such notice shall briefly set forth the nature of such proposed amendment, change or modification and shall state that copies of the instrument embodying the same are on file with Trustee for inspection by all Bondholders. Nothing contained in this Section shall permit, or be construed as permitting, a reduction of the aggregate principal amount of Bonds, the holders of which are required to consent to any amendment, change or modification of the Agreement, or a reduction in, or a postponement of, the payments under the Agreement, without the consent of the holders of all of the Bonds then Outstanding, 62 J . a T . - I . o I . ARTICLE XIII MI SC ELLANE OUS Section 13.01. Consents, etc., of Bondholders. Any consent, request, direction, approval, objection or other instrument required by this Resolution to be signed and executed by the Bondholders may be in any number of concurrent writings of similar tenor and may be signed or executed by such Bondholders in person or by agent appointed in writing. Proof of the execution of any such consent, request, direction, approval, objection or other instrument or of the wr it i ng appoi nti ng any such agent and of the ownership of Bonds, if made in the following manner shall be sufficient for any of the purposes of this Resolution, and shall be conclusive in favor of Trustee and any Paying Agent with regard to any act ion taken by it under such request or other instrument, namely: (a) The fact and date of the execution by any person of any such writing may be proved by the certificate of any officer in any jurisdicti on who by 1 aw has power to take acknowledgements within such jurisdiction that the person signing such writing acknowledged before him the execution thereof, or by an affidavit of any witness to such execution. (b) The fact of ownership of Bonds and the amount or amounts, numbers and other identification of Bonds, and the date of holding the same shall be proved by the registration books of Agency maintained by Trustee pursuant to Section 2.08 hereof. Section 13.02. Limitation of Rights. With the exception of rights herein expressly conferred, nothing expressed or mentioned in or to be implied from this Resolution or the Bonds is intended or shall be construed to give to any person or company other than the parties hereto, and the holders of the Bonds, and Bank any legal or equitable right, remedy or claim under or in respect to this Resolution or any covenants, conditions and provisions herein contained; this Resolution and all of the covenants, conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and the holders of the Bonds and Bank as herein provided. Section 13.03. Severability. If any provisions of this Resolution shall be held or deemed to be or shall, in fact, be illegal, inoperative or unenforceable, the same shall not affect any other provision or provisions herein contained or render the same invalid, inoperative or unenforceable to any extent whatever. Section 13.04. Notices. Any notice, request, complaint, demand, corrmunication or other paper shall be sufficiently given and shall be deemed given when delivered or mailed by registered or certified mail, postage prepaid, or sent by telegram, addressed to the appropriate Notice Address. A dupl icate copy of each notice required to be given hereunder by Trustee to 63 either Agency or the OriginatorlServicer shall also be given to the other. Agency, the OriginatorlServicer and Trustee may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. Section 13.05. Payments Due on Saturdays, Sundays and Holidays. In any case where the date of maturity or interest on or principal of the Bonds or the date fixed for redemption of any Bond shall be in the city of payment a Saturday or Sunday or a legal holiday or a day on which banking institutions are authorized by law to close, then payment of interest or principal may be made on the next succeeding busi ness day with the same force and effect as if made on the date of maturity or interest on or pri nc ipa 1 on the Bond s or the date fixed for redemption. Section 13.06. Counterparts. This Resolution may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument'. Section 13.07. Applicable Provisions of Law, Members of Agency Not Liable. This Resolution shall be governed by and construed in accordance with the laws of the State. No covenant, stipulation, obligation or agreement contained herein shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future member, agent or employee of Agency in his individual capacity, and neither the members of Agency nor any official executing the Bonds shall be liable personally on the Bonds or shall be subject to any personal 1i ability or accountability by reason of the issuance thereof. Section 13.08. Captions. The captions or headings in this Resolution are for convenience only and in no way define, limit or describe the scope or intent of any provisions or Sections of this Resolution. 64 - I . ] I . - .,1 ~ IN WITNESS WHEREOF, the Redeve}QP.IJlent Agency the City of Seal Beach has adopted this Resolution this"'?6!." day of , 1982, and caused this Resolution to be executed on its alf by 1 .Chairman and attested by its Secretary, and the seal of Agency to be here nto affixed and duly attached, and Trustee, to evidence its acceptance of the trusts created hereunder, has caused this Resolution to be executed in its name by its duly authorized officers and its corporate seal to be hereunto affixed and duly attested, all as of the day and year first above written. I . I I . REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH, Agency B~--~ Cha~ (Corporate Seal) By SECURITY PACIFIC NATIONAL BANK, Trustee ~~ -Authorized Officer (Corporate Seal) PASSED, APPROVED and ADOPTED BY THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH, CALIFORNIA, THIS 25th DAY OF FEBRUARY, 1982, BY THE FOllOWING OTE: AYES: NOES: ABSENT: Members tary, Redevelop y of Seal Beach ' 92'~