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HomeMy WebLinkAbout5498_CCv0001.pdf RESOLUTION NO. 5498 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDLANDS APPROVING THE EXECUTION AND DELIVERY OF A SECOND SUPPLEMENTAL INDENTURE OF TRUST AND APPROVING AN AMENDMENT TO THE FORM OF A PROMISSORY NOTE, AND AUTHORIZING THE EXECUTION AND DELIVERY OF CERTAIN OTHER DOCUMENTS THE CITY COUNCIL OF THE CITY OF REDLANDS HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: Section 1. Second- Supplemental Indenture of Trust. The Second Supplemental Indenture of Trust (the "Second Supplemental Indenture") , dated as of March 1, 1998, by and between the City of Redlands (the "City") and First Trust National Association, as Trustee (the "Trustee") , in substantially the form on file with the City Clerk and presented to the City Council at this meeting, is hereby approved. The Mayor and City Clerk are hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Second Supplemental Indenture with such insertions and changes in the interest of the City as may be approved by the officers executing the same, after consultation with bond counsel to the City, such approval to be conclusively evidenced by such execution and delivery. Section 2. Amendment to Form of Promissory Not,. The form of the Promissory Note Secured by Deed of Trust (the "Promissory Note") , attached as Exhibit B to the Loan Origination and Servicing Agreement (the "Loan Agreement") , dated as of July 1, 1988, by and among the City, the Trustee, Thomas Tomanek and Angelita Tomanek (as successors in interest to Maskan Development Company, a California Limited Partnership) , and Redlands Federal Savings and Loan Association, and in substantially the form on file with the City Clerk and presented to the City Council at this meeting, is hereby approved. The Mayor and City Clerk are hereby authorized and directed, for and in the name and on behalf of the City, to approve such further insertions and changes to the Promissory Note in the interest of the City as may be approved by them after consultation with bond counsel to the city. Section 3 . Further Authorization. The Mayor, the City Clerk and other officers of the City are hereby authorized and directed to do all things and take all actions necessary or desirable to effectuate the transactions contemplated by this Resolution, and to execute such other assignments, agreements, certificates, receipts, and other documents in connection with such transactions. 9 903 01 16 910-01 000 syc 4321673 4 Section 4. Effective mate. This Resolution shall become effective mediately upon adoption. PASSED, APPROVED and ADOPTED on March 3, 199.8, 1998. AYES: Councilmembera Banda, Gilbreath, George, freedman; Mayor Cunningham NOES: None ABSENT: None ABSTAIN: None Mayors ATTEST: Cit Clerk 980302 Rbaao-ttlOW qc 0"1673 4 - 2 PROMISSORY NOTE SECURED BY DEED OF TRUST $7, 400, 000 As of March 1, 1988 FOR VALUE RECEIVED, the undersigned (the "Maker") promises to pay to First Trust National Association (the "Payee") not individually, but as Trustee under a certain Indenture of Trust dated as of July 1, 1988 between the Payee and the City of Redlands, California (the "City") , as modified by the Second Supplemental Indenture of Trust, dated as of March 1, 1988, between the Payee and the City (as modified, the "Indenture") , or order, at Bond Trustee Services, 1001 Fourth Avenue, 11th Floor, holder hereof may from time to time designate, a principal sum equal to Seven Million Four Hundred Thousand Dollars ($7, 400, 000) , with interest on the unpaid principal balance from time to time outstanding, at the rates set forth below, payment of principal and interest to be made in the lawful money of the United States of America that is legal tender for public and private debts at the time of payment. All terms not specifically defined herein shall have the same meaning as ascribed to them in the Indenture. Principal and interest shall be payable as follows: 1. (a) The Note shall bear interest at the Bond Rate (as defined in the Loan Origination and servicing Agreement dated as of July 1, 1988 among the City, the Payee and Maker's predecessor (the "Loan Agreement") ) . (b) Interest-only payments shall be paid quarterly by the Maker on the first Business Day of each February, May, August and November commencing on May 1, 1998 and continuing until the date required under the Loan Agreement; provided that if the entire outstanding principal balance of this Note is not prepaid as hereinafter provided, the Maker shall make the payment of principal on August 1, 2018 (the "Maturity Date, ) on which the entire outstanding principal balance of this Note, together with all accrued but unpaid interest, shall be applied first to any .interest that has accrued on this Note, and the balance, if any, shall be applied to the outstanding principal balance hereof. 2 . (a) This Note is subject to mandatory prepayment in accordance with Section 8. 1 (a) of the Loan Agreement and scheduled sinking fund prepayments on August 1, 1998 in the amount of $200, 000 and on August 1, 2003 in the amount of $250, 000. (b) This Note is subject to optional prepayment in accordance with Section 8. 1 (b) of the Loan Agreement_ 980302 R6880-01000 syc M1690 I 3 . Notwithstanding anything to the contrary contained herein, the entire unpaid principal balance hereof, together with all accrued but unpaid interest hereon, shall become due and payable at the option of the Payee upon the occurrence of any Acceleration Default on the part of the Maker under the Regulatory Agreement. 4. At the option of the holder hereof, the entire balance hereof together with all accrued but unpaid principal thereon, shall be immediately due and payable without notice or demand, upon the occurrence of any of the following events: (a) Failure to pay when due any payment of principal and interest due hereunder or under the Developer Loan Documents; or (b) Failure to perform or observe the terms and conditions of the Developer Mortgage, beyond any applicable grace period; or (c) Default in the payment or performance of any other term or condition hereof on the part of the Maker, for 30 days after receipt of written notice; or (d) The making of any assignment for the benefit of creditors by the Maker, or the voluntary appointment (at the request of the Maker or with the consent of the Maker) of a receiver, custodian, liquidator or trustee in bankruptcy of the Maker's property or the filing by the Maker of a petition in bankruptcy or other similar proceeding under law for relief of debtors; or (e) The filing against the Maker of a petition in bankruptcy or other similar proceeding under law for relief of debtors, or in the involuntary appointment of a receiver, custodian, liquidator or trustee in bankruptcy of the property of the Maker and such petition or appointment in not vacated or discharged within sixty (60) calendar days after the filing or making thereof. Neither Maker shall be deemed to have an personal liability for the payments of any amounts that are due or shall become due pursuant to this Note. The Payee shall not exercise any rights or institute any action against the Maker or any of its employees for the payments of any sum of money that is or may become payable under this Note or the Developer Mortgage securing the same other than the right to foreclose the Developer Mortgage and the right to realize upon any collateral given as security for the payment of this Note in addition to the property given under the Developer Mortgage. The Payee shall not seek against the Maker or any of its employees any judgment for a deficiency in any action to foreclose the Developer Mortgage or to realize upon such collateral, provided, however, that nothing contained 91MM R699"1000 oya 03716201 — 2 — herein shall be or be deemed to be a release or impairment of such indebtedness or of the Developer Mortgage or of any security interest in any collateral pledged to secure the indebtedness evidenced by this Note, or preclude the Payee from foreclosing the Developer Mortgage or realizing upon any such collateral upon the happening of any event of default under this Note, the Developer Mortgage or any other documents executed in connection therewith. Further, nothing contained in the foregoing shall in any way limit or affect the personal liability of the Maker for the performance and fulfillment of any and all of the covenants and agreements of the Maker under the Developer Mortgage. Nothing in this paragraph shall preclude the Payee from proceeding directly against the Maker in connection with the obligations of the Maker to indemnify the Payee, the Issuer and the Administrator under Section 9.2 and 9 . 3 of the Loan Agreement and Section 5 of the Regulatory Agreement or to make any payment to the Payee or to any paying agent required to be paid by the Maker pursuant to the provisions of Sections 4 .3 and 7. 3 of the Loan Agreement and Section 19 of the Regulatory Agreement. If this Note is not paid when due, whether at maturity or by acceleration, the Maker shall pay all costs of collection, including without limitation reasonable attorneys' fees and all expenses in connection with the protection or realization of the collateral securing this Note incurred by the. Payee on account of such collection, whether or not suite is filed hereon. Such costs and expenses shall include without limitation all costs, attorneys' fees and expenses incurred by the Payee in connection with any insolvency, bankruptcy, reorganization, arrangement or other similar proceedings involving the Maker, that in any way affects the exercise by the Payee hereof of its rights and remedies under this Note or under the Developer Mortgage. Should interest not be paid when due, it shall thereafter bear interest at the rate for unpaid principal. Presentment, demand, protest, notices of protest, dishonor and nonpayment of this Note are hereby waived. To the extent permitted by applicable law, the defense of the statute of limitations is hereby waived. No single or partial exercise of any power hereunder or any Security Instrument shall preclude other or further exercise thereof or the exercise of any other Power. The Payee shall at all times have the right to proceed against any portion of the security held herefor in such order and in such manner as the holder may deem fit, without waiving any rights with respect to any other security. No delay or omission on the part of the Payee in exercising any right hereunder shall operate as a waiver of such right or any other right under this Note. The release of any party liable on this Note shall not operate to release other party liable thereon. This Note will be secured by a Deed of trust for the benefit of the Payee, which Deed of Trust contains provisions for 990302 86990-01000*yc 0321690 1 — 3 — the acceleration of the maturity date hereof upon the happening of certain stated events. The Loan evidenced by this Note is made pursuant to and shall be construed and governed by the laws of the State of California. It is the intent of the Maker and the Payee in the execution of this Note and all other instruments securing this Note to contract in strict compliance with the usury laws of the State of California governing the loan evidenced by this Note. In furtherance thereof, the Payee and the Maker stipulate and agree that note of the terms and provisions contained in this Note or in any other document or instrument shall ever be construed to create a contract for the use, forbearance or detention of money requiring payment of interest at a rate in excess of the maximum interest rate permitted to be charged by the laws of the State of California governing the loan evidenced by this Note. The Maker shall never be liable for unearned interest on this Note and shall never be required to pay interest on this Note at a rate in excess of the maximum interest that may be lawfully charged under the laws of the State of California. The provisions of this paragraph shall control over the other provisions hereof an over any other instrument executed in connection herewith that may be apparent conflict herewith. If any Payee shall collect moneys that are deemed to constitute interest that would otherwise increase the effective rate of this Note to a rate in excess of that permitted to be charged by the laws of the State of California, all such sums deemed to constitute interest in excess of the legal rate shall be immediately returned to the Maker upon such determination. By: Thomas Tomanek By: Angelita Tomanek 980302 86880-01000 sye 0321680 1 — 4 — SECOND SUPPLEMENTAL INDENTURE OF TRUST THIS SECOND SUPPLEMENTAL INDENTURE OF TRUST (the "Supplemental Indenture") , dated as of March 1, 1998, is made by and between the City of Redlands, California, a municipal corporation and public body (the "Issuer") , and First Trust National Association, a national banking Association organized under the laws of the United States of America (together with any successor Trustee serving as such pursuant to this Second Supplemental Indenture and any separate or co-trustee serving as such hereunder, the "Trustee") . All terms not otherwise defined herein shall have the meanings set forth in that certain Indenture of Trust, dated as of July 1, 1988, between the Issuer and the Trustee. W I T N E S S E T H WHEREAS, the Issuer is duly organized and existing under the laws of the state of California and authorized under Chapter 7 (commencing with Section 52075) of Part 5 of Division 31 of the Health and Safety Code of the State of California, as amended (the "Act") , to finance the construction or development of multifamily rental, housing and the provision of capital improvements in connection therewith and determined necessary to such multifamily rental housing through the issuance of revenue bonds; and WHEREAS, the Issuer has issued, sold and delivered its Variable Rate Demand Multifamily Housing Revenue Bonds 1988 Series A and 1988 Series B (Orange Village Apartments Project) , (the "Bonds") in the original aggregate principal amount of $8, 0.00, 000 in order to obtain moneys to carry out the Program and to pay all or a portion of the costs of issuing the Bonds and financing expenses, all under and in accordance with the laws of the State of California, including the Act; and WHEREAS, there have heretofore been principal payments on the Bonds of $600, 000, and the current amount of Bonds Outstanding is $7,400, 000; and WHEREAS, the current owners of the Project and Redlands Federal Bank, the provider of a letter of credit that secures payment of principal and interest on the Bonds, have requested that the Issuer approve a deferral of a portion of a principal payment on the Bonds due on August 1, 1998; and WHEREAS, the owners of all of the Bonds Outstanding have provided their written consent to the Trustee pursuant to Section 1002 of the Indenture, to the deferral of such principal payments and other matters as set forth in this second Supplemental Indenture. NOW, THEREFORE, this Second Supplemental Indenture witnesseth that the Issuer, in consideration of the premises, the Issuer and the Trustee agree as follows: 93MM RAID-01000 syp W21M 1 Section 1 . Paragraph (b) of Section 307 of the Indenture is hereby amended to read as follows: " (b) The Trustee shall deposit into the Principal Account of the Debt Service Fund from a draw on the Letter of credit, or from Collateral Funds or from other Eligible Funds, in that order of priority (provided that any premium shall be payable solely from seasoned Funds) , an amount sufficient to pay the principal of the Bonds maturing on the next Interest Payment date or the redemption date. Except as provided in Section 310, moneys on deposit in the Principal Account shall be applied solely to pay the principal of and premium, if any, on the Bonds as the same becomes due and payable at maturity or by prior redemption or acceleration, on each date on which any principal or premium becomes payable on the Bonds, the Trustee shall set aside and hold in trust, or remit to any Paying Agent to be held in trust, an amount from the Principal Account sufficient to pay the amount becoming due and payable on such date. The Trustee shall apply the Mandatory Sinking Account Payment or Payments required to be made on August 1, 1993, August 1, 1998 and August 1, 2003 to the redemption of the applicable Bonds upon the notice and in the manner provided in Article VI. At any time prior to giving such notice of such redemption, the Trustee may apply moneys in the Principal Account, in an amount not in excess of such respective Mandatory Sinking Account Payments, to the purchase of the applicable bonds at public or private sale, as and when and at such prices (including brokerage and other charges) as the Trustee may in its discretion determine, except that the purchase price (excluding accrued interest) shall not exceed the redemption price that would be payable for such Bonds upon redemption by application of such Mandatory -Sinking Account Payment. All Bonds so purchased or redeemed pursuant to this subsection shall be cancelled and delivered by the Trustee to or upon the order of the Issuer. Subject to the terms and conditions hereinbefore set forth, the Bonds shall be redeemed by application of Mandatory Sinking Account Payments in the amounts (after giving effect to the credits provided for in this Section) and upon the date hereinafter set forth; Mandatory Sinking Account Payments for Bonds ear A Dunt August 1, 1993 $275, 000 August 1, 1998 $200, 000 August 1, 2003 $250 , 000" 980302 R6880-01000 rye 0321679 1 — 2 — Section 2. Paragraph (i) of section 602 of the Indenture is hereby amended to read as follows: " (i) The Bonds shall be subject to redemption in part on August 1, 1993 , August 1, 1998 and August 1, 2003 at a price equal to the principal amount of Bonds redeemed plus interest accrued thereon to the date fixed for redemption from Mandatory Sinking Account Payments as provided in Section 307 hereof. " Section 3 . Paragraph (8) is hereby added to Section 1001 of the Indenture to read as follows: " (8) to modify, alter, amend or supplement this Indenture in any other respect, including amendments which would otherwise be described in Section 1002 hereof, if notice of the proposed supplemental indenture is given to Bondholders (in the same manner as notices of redemption are given) at least 30 days before the effective date thereof and, on or before such effective date, the Bondholders have the right to demand purchase of their Bonds pursuant to Section 1101 hereof. " IN WITNESS WHEREOF, the City of Redlands has caused these presents to be signed in its name and behalf by the Mayor and the City Clerk of the Issuer, and to evidence its acceptance of the trusts hereby created First Trust National Association has caused these presents to be signed in its name and behalf by one of its duly authorized officers, all as of the date first above written. CITY OF REDLANDS By: 1 � f - ATTEST: Mayor By:� _*Llf-c.c. � FIRST TRUST NATIONAL ASSOCIATION, as Trustee By: Assistant Vice President 99MO2 86890.01000 qc 0325679 2 — 3 T TC] F