Stradling Yocca Carlson & Rauth
Draft dated September 21, 2022
4869-3961-1434v2/022620-0105
FIRST SUPPLEMENTAL INDENTURE
Dated as of October 1, 2022
Between
ANAHEIM HOUSING AUTHORITY, as Issuer
and
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee
Relating to
$_________
ANAHEIM HOUSING AUTHORITY
MULTIFAMILY HOUSING REVENUE BONDS
(JAMBOREE ANAHEIM PSH APARTMENTS) 2022 SERIES A
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TABLE OF CONTENTS
Page
ARTICLE XIV DEFINITIONS ............................................................................................................ 2 Section 14.01 Definitions ................................................................................................................. 2 ARTICLE XV THE SERIES 2022 BONDS ........................................................................................ 4 Section 15.01 Terms ........................................................................................................................ 4 Section 15.02 Form of 2022 Bonds ................................................................................................. 5 ARTICLE XVI REDEMPTION OF 2022 BONDS ............................................................................. 5 Section 16.01 Redemption of Series 2022 Bonds ............................................................................ 5 ARTICLE XVII APPLICATION OF PROCEEDS OF THE 2022 BONDS ....................................... 6 Section 17.01 Application of Proceeds of Sale of 2022 Bonds ....................................................... 6 ARTICLE XVIII MISCELLANEOUS ................................................................................................. 6 Section 18.01 Terms of the 2022 Bonds Subject to the Original Indenture .................................... 6 Section 18.02 Severability ............................................................................................................... 6 Section 18.03 Execution in Counterparts ......................................................................................... 7 Section 18.04 Governing Law ......................................................................................................... 7 Signature Page .............................................................................................................................. S-1
EXHIBIT A FORM OF 2022 BOND ......................................................................................... A-1 EXHIBIT B FORM OF INVESTOR LETTER ......................................................................... B-1
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FIRST SUPPLEMENTAL INDENTURE
This FIRST SUPPLEMENTAL INDENTURE, dated as of October 1, 2022 (the “First Supplemental Indenture”), is entered into by ANAHEIM HOUSING AUTHORITY, a public body, corporate and politic, (together with its successors and assigns, the “Issuer”), and Wilmington Trust, National Association, a national banking association, in its capacity as trustee (together w ith any successor trustee or co -trustee appointed hereunder, the “Trustee”), and supplements the indenture, dated as of April 1, 2020 (the “Original Indenture” and as supplemented by this First Supplemental Indenture, the “Indenture”) by and between the Issuer and the Trustee. (Capitalized terms used in the Whereas clauses and not defined therein shall have the meanings provided in the Indenture.) WITNESSETH:
WHEREAS, pursuant to the provisions of Chapter 1 of Part 2 of Division 24 of the California Healt h and Safety Code, as amended (the “Act”), to issue revenue bonds to provide financing for the acquisition, construction, development and rehabilitation of residential housing for low and moderate income Persons; and
WHEREAS, by proceedings adopted pursuan t to and in accordance with the provisions of the Act and to finance a portion of the costs of the acquisition, rehabilitation and equipping of multifamily rental housing facilities known as “Buena Esperanza” and previously known as the “Jamboree Anaheim P SH Apartments,” located in Anaheim, California (the “Project”), the Issuer previously authorized and issued its Anaheim Housing Authority Multifamily Housing Revenue Bonds (Jamboree Anaheim PSH Apartments) 2020 Series A in the original aggregate face amoun t (maximum principal amount) of up to $12,200,000 (the “2020 Bonds”); and WHEREAS, additional bond proceeds are required to finance the Project, and the Issuer has authorized the issuance of an additional series of bonds to finance the Project on a parity basis with the 2020 Bonds under the Indenture to be known as the “Anaheim Housing Authority Multifamily Housing Revenue Bonds (Jamboree Anaheim PSH Apartments) 2022 Series A in an aggregate principal amount of $_______________ (the “2022 Bonds,” and, toget her with the 2020 Bonds, the “Bonds”); and
WHEREAS, pursuant to a Loan Agreement between the Issuer and La Palma Housing Partners, LP, a California limited partnership (the “Borrower”), dated as of April 1, 2020 (the “Original Loan Agreement”), as suppleme nted by a First Supplement to Loan Agreement, between the Issuer and the Borrower, dated as of October 1, 2022 (the “First Supplement to Loan Agreement, and, together with the Original Loan Agreement, the “Loan Agreement”), the Issuer issued the 2020 Bonds and has agreed to issue the 2022 Bonds and lend the proceeds thereof to the Borrower and the Borrower has agreed to (a) apply the proceeds of the Loan to pay a portion of the costs of acquisition, rehabilitation and equipping of the Project, (b) make pay ments sufficient to pay the principal of, premium, if any, and interest on the Bonds when due (whether at maturity, by redemption, acceleration or otherwise), and (c) observe the other covenants and agreements and make the other payments set forth therein; and
WHEREAS, the Borrower has delivered to the Issuer its (i) promissory note dated April 30, 2020 in an aggregate original principal amount equal to the original aggregate face amount of the 2020 Bonds (as the same may be amended, supplemented, replaced or modified from time to time,
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the “2020 Note”), and (ii) promissory note dated October __, 2022 in an aggregate original principal amount equal to the aggregate principal amount of the 2022 Bonds (as the same may be amended, supplemented, replaced or modified from time to time, the “2022 Note,” and, together with the 2020 Note, the “Notes”), and the Notes evidence the Borrower’s obligation to repay the Loan, and the Issuer has made the Loan to the Borrower, subject to the terms and conditions of the Loan Agreement and the Indenture as amended, supplemented and modified hereby; and WHEREAS, the obligations of the Borrower under the Loan Agreement and the Notes are secured by, among other things, the Collateral; and
WHEREAS, in addition to the issuance of the 2022 Bonds, the Borrower desires to amend the Original Indenture to extend the Conversion Date and, among other things, amend the mechanics for determining the Variable Rate with respect to the 2020 Bonds, as set forth in the First Amendment to Loan Docum ents, by and among the Borrower, the Trustee and U.S. Bank National Association, dated as of ______________, 2022 (the “First Amendment to Loan Documents”); and NOW THEREFORE, in consideration of the premises and of the mutual agreements and covenants contained herein and for other valuable consideration, the parties do hereby agree as follows:
ARTICLE XIV
DEFINITIONS
Section 14.01 Definitions. Except as otherwise provided in this Section 14.01, all terms used herein which are defined in the Original Indenture shall have the meanings assigned to them therein. All other capitalized terms used herein without definition shall have the meaning given to such terms in the Loan Agreement.
“Authorized Amount” means (i) with respect to the 2020 Bonds, $12,200,000, the maximum aggregate principal amount of 2020 Bonds authorized to be issued under the Indenture, and (ii) with respect to the 2022 Bonds, $____________, the maximum aggregate principal amount of the 2022 Bonds authorized to be issued under the Indenture.
“Bond Purchase Agreement” means the Bond Purchase Agreement, dated as of April 1, 2020 by and among U.S. Bank National Association, CCRC, and the Borrower, as it may be amended and supplemented according to its terms, including but not limited to the First Amendment to Bond Purchase Agreement, pursuant to which and subject to the terms and conditions there, CCRC has agreed to purchase up to $5,760,000 principal amount of the Bonds upon Conversion. “Bonds” has the meaning set forth in the Recitals to this First Supplemental Indenture. “Closing Date” means (i) with respect to the 2020 Bonds, April 30, 2020, the date of original issuance and delivery of the 2020 Bonds, and (ii) with respect to the 2022 Bonds, October __, 2022, the date of original issuance and delivery of the 2022 Bonds. “Deed of Trust” means the deed of trust dated April 1, 2020 executed by Borrower for the benefit of Issuer, and securing the Loan, as assigned pursuant to that certain Assignment of Deed of Trust and Related Documents executed by Issuer in favor of Trustee, and as amended pursuant to that
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certain First Amendment to Deed of Trust dated as of October __, 2022, executed by and between Borrower and Trustee.
“First Amendment to Bond Purchase Agreement” means the First Amendment to Bond Purchase Agreement, by and among the Borrower, CCRC and U.S. Bank National Association, dated as of October __, 2022.
“First Amendment to Loan Documents” has the meaning set forth in the Recitals to this First Supplemental Indenture.
“First Supplement to Regulatory Agreeme nt” means the First Supplement to Regulatory Agreement and Declaration of Restrictive Covenants, dated as of October 1, 2022, by and between the Issuer and the Borrower, supplementing, modifying and amending the Regulatory Agreement. “Indenture” has the meaning set forth in the Recitals to this First Supplemental Indenture. “Issuer Authorizing Resolution” means (i) with respect to the 2020 Bonds, resolution number AHA-2020-1 of the Issuer adopted on March 24, 2020 authorizing the issuance of the 2020 Bonds and the execution and delivery of the Issuer Documents, and (ii ) with respect to the 2022 Bonds, resolution number __________ of the Issuer adopted on ________, 2022 authorizing the issuance of the 2022 Bonds and the execution and delivery of certain suppl ements to the Issuer Documents to accommodate the issuance of the 2022 Bonds.
“Investor Letter” means, with respect to the 2022 Bonds, an Investor Letter in the form set forth in Exhibit B hereto.
“Loan Agreement” has the meaning set forth in the Recitals to this First Supplemental Indenture.
“Loan Documents” means the Loan Agreement, the Notes, the Construction Bond Financing Agreement, the Regulatory Agreement, the Deed of Trust, the Deed of Trust Assignment, the “Loan Documents” as defined in the Constru ction Bond Financing Agreement, the First Amendment to Loan Documents, the UCC financing statements, and upon the Conversion Date, the Permanent Period Supplemental Agreement, together with all other documents or agreements evidencing or relating to the Loan.
“Maturity Date” means May 1, 2038 with respect to each series of Bonds. “Notes” has the meaning set forth in the Recitals to this First Supplemental Indenture. “Note” in the Original Indenture shall mean “Notes” unless context indicates reference to a particular Note. “Regulatory Agreement” means the Regulatory Agreement and Declaration of Restrictive Covenants, dated as of April 1, 2020, by and between the Issuer and the Borrower, with respect to the Project, as supplemented, modified and amended by the First Supplement to Regulatory Agreement. “2020 Bonds” has the meaning set forth in the Recitals to this First Supplemental Indenture. “2022 Bonds” has the meaning set forth in the Recitals to this First Supplemental Indenture. “2020 Note” has the meaning set forth in the Recitals to this First Supplemental Indenture.
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“2022 Note” has the meaning set forth in the Recitals to this First Supplemental Indenture. “Variable Rate” has the meaning set forth in the First Amendment to Loan Documents.
ARTICLE XV
THE SERIES 2022 BONDS
Section 15.01 Terms.
(a) Designation. There is hereby authorized, established and created an issue of 2022 Bonds of the Issuer designated as the “Anaheim Housing Authority Multifamily Housing Revenue Bonds (Jamboree Anaheim Apartments PSH) 2022 Series A.” (b) Principal Amount. The total principal amount of the 2022 Bonds that may be issued hereunder is hereby expressly limited to the Authorized Amount. (c) Registered Bonds; Numbering; Authorized Denominations . The 2022 Bonds shall be issued, sold, assigned, tran sferred or otherwise disposed of only in Authorized Denominations to the Bondholder of the 2020 Bonds . The 2022 Bonds shall be issuable as fully registered bonds without coupons. The 2022 Bonds shall be numbered separately from R -1 upwards or otherwise i n such manner as the Trustee shall determine. The 2022 Bonds shall be issued as a single bond with a stated principal amount of the Authorized Amount. (d) Dated Date; Maturity. The 2022 Bonds shall be dated as of the Closing Date and shall mature on the Maturity Date.
(e) Interest Rate; Accrual or Accretion of Interest.
(i) Interest on the unpaid principal balance of the 2022 Bonds shall be computed on the basis of a 360-day year, but shall be charged for the actual number of days principal is unpaid. The Bonds shal l bear interest at the Variable Rate in accordance with the terms of 2022 Note. The Bondholder shall determine the Variable Rate and will notify the Trustee, the Issuer and the Borrower of such rate at least two Business Days prior to the Interest Payment Date. If (A) an Event of Default occurs or (B) the Note Maturity Date occurs, upon written direction from the Bondholder, interest on the 2022 Bonds shall begin to accrue at the Default Rate. (ii) Any determination of the interest on the 2022 Bonds by the Bondholder shall be conclusive absent manifest error. Interest shall be computed by the Bondholder and provided to the Trustee. The Trustee shall not be held liable for any errors in the computation of interest.
(iii) If, as shown by the records of the Trustee, i nterest on the 2022 Bonds are in default, interest on a 2022 Bond issued in exchange for a 2022 Bond surrendered for registration of transfer or exchange shall accrue from the date to which interest has been paid in full on the 2022 Bonds, or, if no intere st has been paid on the 2022 Bonds, from the Closing Date. The amount of interest payable on the 2022 Bonds on each Interest Payment Date shall be the amount of interest accrued thereon from the preceding Interest Payment Date (or other date as described above) to, but not including, the Interest Payment Date on which interest is being paid.
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(f) Interest Payments. Interest shall be due and payable on the 2022 Bonds, in arrears, on each applicable Interest Payment Date. Priority of Interest Payments shall be provided in Section 6.04(c) of the Indenture. In any case where any Interest Payment Date is not a Business Day, then payment need not be made on such date, but may be made on the next succeeding Business Day and the extension of time shall be included in the computation of interest and fees. (g) Principal Payments. Principal of the 2022 Bonds shall be payable as provided herein on the Maturity Date and upon redemption or acceleration thereof.
Section 15.02 Form of 2022 Bonds . The 2022 Bonds and the certificate of authent ication thereof shall be in the form set forth in Exhibit A attached hereto, as applicable, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture. Any portion of the text of the 2022 Bonds may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the 2022 Bonds. The 2022 Bonds may be typewritten, printed, engraved, lithographed or otherwise produced. Unless requested by the Bondholder and at the e xpense of the Bondholder, (a) no rating shall be sought from a Rating Agency with respect to the 2022 Bonds, (b) the 2022 Bonds shall not have been offered pursuant to any type of offering document or official statement, and (c) no CUSIP number has been as signed to the 2022 Bonds.
ARTICLE XVI
REDEMPTION OF 2022 BONDS
Section 16.01 Redemption of Series 2022 Bonds.
(a) Optional Redemption. The 2022 Bonds may be redeemed in whole or in part on any Business Day upon prepayment of the 2022 Note by the Borrower pursuant to Section 2.10 of the Loan Agreement, to the extent permitted under the 2022 Note and the Construction Bond Financing Agreement. The 2022 Bonds may be redeemed pursuant to this Section 16.01 on any date on which the 2022 Note may be prepaid pursuant to its terms at the Redemption Price and upon notice to the Bondholder given by the Trustee in accordance with Section 4.06 of the Indenture. No such optional redemption of 2022 Bonds shall be permitted unless the Trustee shall have received Eligible Funds in an amount that will be sufficient to pay the Redemption Price of the 2022 Bonds not less than one Business Day prior to the date that the 2022 Bonds are to be redeemed.
The Borrower may exercise the option in 1 6.01(a) by giving Written Notice to the Issuer, the Trustee, the Investor Limited Partner and the Bondholder, of its election to prepay the 2022 Note, not less than 20 days prior to the proposed redemption date. Any such notice shall specify the date fixed for optional redemption and contain a certification of the Borrower to the effect that all conditions precedent to such optional redemption have been (or will be, as of the optional redemption date) satisfied. The Bondholder shall, not less than 5 days prior to the date set for such optional redemption, deliver a Written Certificate to the Trustee and to the Borrower setting forth the amount of accrued interest that will be due and payable as of the date fixed for optional redemption. (b) Mandatory Redemption. The 2022 Bonds shall be redeemed in whole or in part at the Written Direction of the Bondholder, upon prepayment of the 2022 Note by the Borrower as required by Section 2.11 of the Loan Agreement on the earliest Business Day for which notice can
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be given in accordance with Section 4.06 at the Redemption Price, i ncluding in connection with any mandatory prepayment of all or a part of the principal of the 2022 Note on the Conversion Date. (c) The 2022 Bonds shall be subject to redemption in whole or in part at a price equal to the principal amount of 2022 Bonds to be redeemed plus interest accrued thereon to the date fixed for redemption, plus a Premium equal in amount to any premium payable pu rsuant to the 2022 Note or the Construction Bond Financing Agreement in connection with any scheduled principal payment or any mandatory prepayment of the principal of the Note (as required or permitted under the terms of the 2022 Note), upon the date of any such scheduled payment or mandatory or voluntary prepayment of the 2022 Note in whole or in part.
(d) The 2022 Bonds shall be subject to redemption in whole on the Termination Date under the Construction Bond Financing Agreement in the event the Conversion Date does not occur on or before the Termination Date at the Redemption Price. (e) Redemption for Loan Agreement Default . The 2022 Bonds shall be redeemed in whole or in part upon the acceleration of the 2022 Note pursuant to Section 7.02 of the Loan Agreement and upon Written Direction of the Bondholder, to the Trustee, in the event of the occurrence of a Loan Agreement Default and the expiration of the applicable cure period or notice and cure period, if any, specified therein, on the earliest Business Day f or which notice can be given as required by Section 4.06, at the Redemption Price.
ARTICLE XVII
APPLICATION OF PROCEEDS OF THE 2022 BONDS
Section 17.01 Application of Proceeds of Sale of 2022 Bonds . The proceeds received by the Trustee from the Bondholder for the 2022 Bonds shall be immediately transferred by the Trustee to the Project Fund.
ARTICLE XVIII
MISCELLANEOUS
Section 18.01 Security Pledge on a Parity Basis for Each Series of Bonds. The following sentence shall be added to the end of Section 6.01 of the Original Indenture: “The pledge and security interest granted hereby shall be on a parity basis for each series of Bonds and shall be equally payable for each series of Bonds withou t priority for number, date of the Bonds, date of sale, date of execution or date of delivery.”
Section 18.02 Terms of the 2022 Bonds Subject to the Original Indenture . Except as expressly provided in this First Supplemental Indenture, every term and condition containe d in the Original Indenture shall apply to this First Supplemental Indenture and the 2022 Bonds with the same force and effect as if the same were herein set forth at length, with such omissions, variations and modifications thereof as may be appropriate t o make the same conform to this First Supplemental Indenture.
Section 18.03 Severability. If any provision of this First Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions
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shall not in any way be affected or impaired. In case any covenant, stipulation, obligation or agreement contained in the 2022 Bonds or in the Indenture shall for any reason be held to be usurious or in violation of law, then such covenant, stipulation, obligation or agreement shall be deemed to be the covenant, stipulation, obligation or agreement of the Issuer or the Trustee only to the full extent permitted by law.
Section 18.04 Execution in Counterparts . This First Supplemental Indenture may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument.
Section 18.05 Governing Law. This First Supplemental Indenture shall be construed and governed in accordance with the laws of the State of California.
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IN WITNESS WHEREOF, the Issuer and the Trustee have caused this First Supplemental Indenture to be duly executed as of the date first written above.
ISSUER:
ANAHEIM HOUSING AUTHORITY,
a public body, corporate and politic
By:
Grace Stepter, Executive Director
or Authorized Designee
ATTEST:
AUTHORITY SECRETARY
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY,
CITY OF ANAHEIM
APPROVED AS TO FORM:
Stradling Yocca Carlson & Rauth,
Authority Special Counsel
Wilmington Trust, National Association,
as Trustee
By:
Name:
Title:
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EXHIBIT A
FORM OF 2022 BOND
THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THE
TRANSFERABILITY HEREOF IS RESTRICTED BY THE TERMS OF THE INDENTURE,
INCLUDING THE PROVISION THEREOF LIMITING OWNERSHIP OF THIS BOND TO “QUALIFIED INSTITUTIONAL BUYERS” AND “ACCREDITED INVESTORS” (AS DEFINED IN THE INDENTURE), SUBJECT TO CERTAIN EXCEPTIONS.
$________________
ANAHEIM HOUSING AUTHORITY
MULTIFAMILY HOUSING REVENUE BONDS
(JAMBOREE ANAHEIM PSH APARTMENTS) 2022 SERIES A
No. R-______ $__________
Dated Date Maturity Date Interest Rate
________ __, 2022 __________ 1, 20__ As determined in the below-defined Loan Agreement and Note
BONDHOLDER: U.S. Bank National Association
PRINCIPAL AMOUNT: ______________________________________________ The ANAHEIM HOUSING AUTHORITY, a public body, corporate and politic, duly organized and existing under the laws of the State of California (the “Issuer”), for value received, hereby promises to pay (but only out of the revenues and other assets pledged under the Indenture (hereinafter defined)) to the Bondholder specified above or registered assigns (subject to any right of prior redemption or tender), on the Maturity Date specifi ed above, the Principal Amount last appearing on the Principal Log attached hereto, and to pay interest thereon at the interest rate set forth above, payable on the first calendar day of each month, commencing on November 1, 2022, to the person whose name appears on the Bond Register as of the day next preceding any Interest Payment Date (a “Record Date”) and to pay any other amounts as specified in the Indenture (hereinafter defined); provided however, that if the first calendar day of each month is not al so a Business Day, then payment need not be made on such date, but may be made on the next succeeding Business Day and the extension of time shall be included in the computation of interest and fees. All capitalized terms not otherwise defined in this Bon d shall have the meaning ascribed thereto in the Indenture.
Principal of, and premium, if any, on this Bond is payable in such coin or currency of the United States as at time of payment is legal tender for payment of private and public debts, at the designated payment office of Wilmington Trust, National Association, as trustee (the “Trustee” and “Bond Registrar”), or its successor.
This Bond shall bear interest in the same manner as is provided with respect to interest on the Loan in the Note , Loan Agreem ent and the Construction Bond Financing Agreement . This Bond shall bear interest from the date to which interest has been paid on the Bonds next preceding the date of its authentication, unless it is authenticated as of an Interest Payment Date for which i nterest has
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been paid, in which event it shall bear interest from such Interest Payment Date, or unless it is authenticated on or before the first Interest Payment Date, in which event it shall bear interest from its Closing Date.
If a Bondholder so elects , any payment due to such Bondholder shall be made by electronic transfer of federal reserve funds to any account in the United States of America designated by such Bondholder if such Bondholder, at its expense, (a) so directs by written notice delivered t o the Trustee at least ten Business Days before the date upon which such electronic transfer or other arrangement is to be made and (b) otherwise complies with the reasonable requirements of the Trustee.
This Bond and the issue of which it is a part are li mited obligations of the Issuer, and the principal and premium, if any, and interest thereon are payable solely and only from revenues, and other amounts derived by the Issuer from the Loan Agreement pledged and assigned by the Issuer to the Trustee under the Indenture to secure payment of the principal of, premium, if any, and interest on this Bond.
THIS BOND AND THE INTEREST HEREON IS A LIMITED OBLIGATION OF THE ISSUER, PAYABLE SOLELY FROM THE TRUST ESTATE. NONE OF THE ISSUER, THE CITY OF ANAHEIM, THE STATE OF CALIFORNIA (THE “STATE”), NOR
ANY POLITICAL SUBDIVISION THEREOF (EXCEPT THE ISSUER, TO THE LIMITED
EXTENT SET FORTH IN THE INDENTURE) NOR ANY PUBLIC AGENCY SHALL IN
ANY EVENT BE LIABLE FOR THE PAYMENT OF THE PRINCIPAL OF, PREMIUM (IF
ANY) OR INTEREST ON THIS BOND OR FOR THE PERFORMANCE OF ANY PLEDGE,
OBLIGATION OR AGREEMENT OF ANY KIND WHATSOEVER EXCEPT AS SET
FORTH HEREIN AND IN THE INDENTURE, AND NONE OF THE BONDS OR ANY OF THE ISSUER’S AGREEMENTS OR OBLIGATIONS SHALL BE CONSTRUED TO
CONSTITUTE AN INDEBTEDNESS OF OR A PLEDGE OF THE FAITH AND CREDIT OF
OR A LOAN OF THE CREDIT OF OR A MORAL OBLIGATION OF ANY OF THE
FOREGOING WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION WHATSOEVER. THE ISSUER HAS NO TAXING POWER.
NO MEMBER, OFFICER, AGENT, EMPLOYEE OR ATTORNEY OF THE ISSUER
OR THE CITY OF ANAHEIM, INCLUDING ANY PERSON EXECUTING THE
INDENTURE OR THE BONDS, SHALL BE LIABLE PERSONALLY ON THE BONDS OR FOR ANY REASON RELATING TO THE ISSUANCE OF THE BONDS. NO RECOURSE
SHALL BE HAD FOR THE PAYMENT OF THE PRINCIPAL OF OR THE INTEREST ON
THE BONDS, OR FOR ANY CLAIM BASED ON THE BONDS, OR OTHERWISE IN
RESPECT OF THE BONDS, OR BASED ON OR IN RESPECT OF THE INDENTURE,
AGAINST ANY MEMBER, OFFICER, EMPLOYEE OR AGENT, AS SUCH, OF THE
ISSUER OR ANY SUCCESSOR, WHETHER BY VIRTUE OF ANY CONSTITUTION,
STATUTE OR RULE OF LAW, OR BY THE ENFORCEMENT OF ANY ASSESSMENT OR
PENALTY OR OTHERWISE, ALL SUCH LIABILITY BEING, BY THE ACCEPTANCE OF
THIS BOND AND AS PART OF THE CONSIDERATION FOR THE ISSUE OF THE BONDS, EXPRESSLY WAIVED AND RELEASED.
The Bond is issued under and is equally and ratably secured by the Trust Indenture dated as of April 1, 2020, as supplemented by the First Supplemental Indenture, dated as of October 1, 2022 (as amended and supplemented, the “Indenture”), each between the Issuer and the Trustee. The
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proceeds from the Bonds are to be used for the purpose of making a loan pursuant to the Loan Agreement dated as of April 1, 2020, as supplemented by the First Supplemental Loan Agreement, dated as of October 1, 2022 (as amended and supplemented, the “Loan Agreement”), each between the Issuer and La Palma Housing Partners, LP (the “Borrower”), to finance the acquisition and rehabilitation of a 70 -unit multifamily rental housing development located in the City of Anaheim, State of California previously known as “Jamboree Anaheim PSH Apartments” and currently known as “Buena Esperanza Apartments” (the “Project”). The Borrower’s payment obligations under the Loan Agreement will be evidenced by one or more promissory notes (the “Notes”). The Notes will be secured by the Collateral.
Reference is hereby made to the Indenture (including any amendments and supplements made thereto from time to time) for a description of the property pledged and assigned t o the Trustee and of the provisions, among others, with respect to the nature and extent of the security, the rights, duties and obligations of the Issuer and the Trustee, the terms on which the Bond is issued and secured. This Bond is subject to optional and mandatory redemption in whole or in part, on the dates, under the terms and conditions and at the redemption prices set forth in the Indenture, all of the provisions of which are, by this reference, incorporated into this Bond. Notice of redemption shall be given in the manner set forth in the Indenture.
No recourse under or upon any obligation, covenant or agreement contained in the Indenture or in any Bonds, or under any judgment obtained against the Issuer, or by the enforcement of any assessment o r by any legal or equitable proceeding by virtue of any constitution or statute or otherwise or under any circumstances, under or independent of the Indenture, shall be had against any member, officer or employee, as such, past, present or future, of the I ssuer, either directly or through the Issuer, or otherwise, for the payment for or to the Issuer or any receiver thereof, or for or to the Bondholder or otherwise of any sum that may be due and unpaid by the Issuer upon any the Bonds. Any and all personal liability of every nature, whether at common law or in equity, or by statute or by constitution or otherwise, of any such member, officer or employee, as such, to respond by reason of any act or omission on his/her part or otherwise, for the payment for o r to the Issuer or any receiver thereof, or for or to the Bondholder or otherwise, of any sum that may remain due and unpaid upon the Bonds thereby secured or any of them, is hereby expressly waived and released as a condition of and consideration for the execution of the Indenture and the issuance of the Bonds.
The Bondholder shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any event of default thereunder, or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Indenture.
Modifications or alterations of the Indenture or of any indenture supplemental thereto may be made only to the extent and in the circumstances permitted by the Indenture.
This Bond may be exchanged, and its transfer may be effected, only by the Bondholder in person or by his attorney duly authorized in writing at the designated corporate trust office of the Trustee, but only i n the manner and subject to the limitations provided in the Indenture, including, without limitation, the delivery of an Investor Letter to the extent required under the Indenture.
Upon exchange or registration of such transfer a new registered bonds or b onds of the same series, maturity and interest rate and of Authorized Denomination or Authorized Denominations for the same aggregate principal amount will be issued in exchange therefor.
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The Issuer and the Trustee may deem and treat the person in whose na me this Bond shall be registered on the Bond Register, as the absolute owner hereof for the purpose of receiving payment of or on account of principal hereof and interest due hereon and for all other purposes and neither the Issuer nor the Trustee shall be affected by any notice to the contrary.
This Bond shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until the Bond Registrar shall have executed the Certificate of Authentication appearing hereon.
IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts and things required to exist, happen and be performed precedent to or in the issuance of this Bond do exist, have happened and have been performed in regular and due form as required by law.
IN WITNESS WH EREOF, the Issuer has caused this Bond to be duly executed by the manual or facsimile signature of its duly Authorized Officer and attested by the manual or facsimile signature of its Secretary or Deputy Secretary, all as of the date first written above.
ANAHEIM HOUSING AUTHORITY
By:
Authorized Officer
ATTEST:
Secretary or Deputy Secretary
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CERTIFICATE OF AUTHENTICATION
This is to certify that this Bond is the Bond referred to in the within mentioned Indenture.
Date of Authentication: ______________ ____, _____
Wilmington Trust, National Association,
as Trustee
By:
Name:
Title:
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ASSIGNMENT
FOR VALUE RECEIVED, ____________________________________________, the undersigned sells, assigns and transfers unto:
_________________________________________________________________________________ (Social Security or Other Identifying Number of Assignee) _________________________________________________________________________________ (Please Print or Typewrite Name and Address of Assignee) the within Bonds and do(es) hereby irrevocably constitute and appoint _______________________ ____________________________ attorney, to transfer the same on the books of the Trustee, with full power of substitution in the premises.
Dated: _____________________
Signature: _____________________________
NOTICE: The signature on this assignment
must correspond with the name(s) of the
Registered owner as it appears upon the face of
the within Bonds in every particular without
alteration or enlargement or any cha nge
whatsoever.
SIGNATURE GUARANTEED:
NOTICE: Signature(s) must be guaranteed by a
member firm of the New York Stock Exchange
or a commercial bank or trust company and
must correspond with the name as it appears
upon the face of the within bonds in every
particular, without alteration or enlargement or
any change whatever.
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EXHIBIT B
FORM OF INVESTOR LETTER
Anaheim Housing Authority
201 S. Anaheim Boulevard, Suite 100
Anaheim, California 92805
Wilmington Trust, National Association
650 Town Center Drive, Suite 800
Costa Mesa, California 92626
Attention: Tom Demchuk
Re: $_____________ Anaheim Housing Authority Multifamily Housing Revenue Bonds (Jamboree Anaheim PSH Apartments) 2022 Series A
Ladies and Gentlemen:
The undersigned (the “Investor”) hereby acknowledges receipt of the above referenced bonds (the “Bonds”), dated October __, 2022 in fully registered form and in the aggregate principal amount of $________________. The Bonds have been checked, inspected and approved by the Investor.
The undersigned acknowledges that the Bonds were issued for the purpose of making a loan to assist in the financing of the acquisition, rehabilitation and equip ping of a multifamily housing project located in Anaheim, California (the “Project”) and that the loan is evidenced by the Loan Agreement dated as of April 1, 2020, as supplemented by the First Supplemental Loan Agreement, dated as of October 1, 2022 (as a mended and supplemented, the “Loan Agreement”), each by and between Anaheim Housing Authority (the “Issuer”) and La Palma Housing Partners, LP (the “Borrower”). The undersigned further acknowledges that the Bonds are secured by the Trust Indenture dated as of April 1, 2020, as supplemented by the First Supplemental Indenture, dated as of October 1, 2022 (as amended and supplemented, the “Indenture”) between the Issuer and Wilmington Trust, National Association, as trustee, which creates a security interest in the Trust Estate for the benefit of the owner of the Bonds. All capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Indenture.
In connection with the acquisition of the Bonds by the Investor, the Inv estor hereby makes the following representations upon which you may rely:
1. The Investor hereby certifies that it is a “Qualified Institutional Buyer” or an “Accredited Investor” (each such term as defined in the Indenture), and therefore has sufficient knowledge and experience in financial and business matters, including purchase and ownership of tax-exempt municipal obligations, to be able to evaluate the risks and merits of the investment represented by the Bonds.
2. The Investor has authority to purcha se the Bonds and to execute this letter and any other instruments and documents required to be executed by the Investor in connection with the purchase of the Bonds. The Bonds are being acquired by the Investor for its own account. The Investor does not presently intend to make a public distribution of, or to transfer, all or any part of the
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Bonds or any interests therein. The Investor understands that it may need to bear the risks of this investment for an indefinite time, since any sale prior to maturity may not be possible.
3. The Investor understands that the Bonds have not been registered under the Act. The Investor acknowledges that the Issuer requires that, if the Bonds are disposed of by it, current information, including all current financial st atements with respect to the Project, which meets the disclosure requirements of any applicable state and federal securities laws then in effect, concerning the Bonds and the Project must be furnished to any prospective Investor, and further acknowledges that any current exemption from registration of the Bonds does not affect or diminish such requirements. The Investor acknowledges that no disclosure document has been prepared in connection with the initial issuance and sale of the Bonds.
4. The Investor acknowledges that it is familiar with the conditions, financial and otherwise, of the Borrower and understands that the Borrower has no significant assets other than the Project for payment of the Bonds. Further, the Investor understands that the Bonds in volve a high degree of risk. Specifically, and without in any manner limiting the foregoing, the Investor understands and acknowledges that, among other risks, the Bonds are payable solely from the Collateral (as defined in the Indenture). The Investor has made such inquiry with respect to all of the foregoing as it believed to be desirable for its purposes and acknowledges that it has either been supplied with or been given access to information, including financial statements and other financial information, to which a reasonable investor would attach significance in making investment decisions, and the Investor has had the opportunity to ask questions and receive answers from knowledgeable individuals concerning the Borrower, the Project and the Bonds a nd the security therefor so that, as a reasonable investor, the Investor has been able to make its decision to purchase the Bonds.
5. It is acknowledged that no written information has been provided by the Issuer to the Investor with respect to the Bonds a nd that any written information furnished by any other party to the transaction does not purport to fully disclose all information pertinent to the Bonds.
6. The Investor is not now and has never been controlled by, or under common control with, the Borrow er. The Borrower has never been and is not now controlled by the Investor. The Investor has entered into no arrangements with the Borrower or with any affiliate of Borrower in connection with the Bonds, other than as disclosed to the Issuer.
7. The Investor has authority to purchase the Bonds and to execute this letter and any other instruments and documents required to be executed by the Investor in connection with the purchase of the Bonds.
8. In entering into this transaction the Investor has not relied upon any representations or opinions made by the Issuer relating to the legal consequences or other aspects of the transaction, nor has it looked to, nor expected, the Issuer to undertake or require any credit investigation or due diligence reviews relating to the Borrower, its financial condition or business operations, the Project (including the financing or management thereof), or any other matter pertaining to the merits or risks of the transaction, or the adequacy of the funds pledged to secure repayment of the Bonds. The Investor has further assumed sole responsibility for obtaining such information and making such review and investigation as the Investor has deemed necessary or desirable in connection with its decision to purchase the Bonds. In this regard, the Investor has relied upon the advice of, or has consulted with, only its own advisors.
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9. The Investor understands that the Bonds are not secured by any pledge of any moneys received or to be received from taxation by the State of Califo rnia or any political subdivision or taxing district thereof, including, without limitation, the Issuer; that the Bonds will never represent or constitute a general obligation or a pledge of the faith and credit of the Issuer, the City of Anaheim, the Stat e of California or any political subdivision thereof; that no right will exist to have taxes levied by the State of California or any political subdivision thereof for the payment of principal and interest on the Bonds; and that the liability of the Issuer with respect to the Bonds are subject to further limitations as set forth in the Bonds and the Indenture.
10. The Investor has been informed that the Bonds have not been and will not be registered or otherwise qualified for sale under the “Blue Sky” laws and regulations of any jurisdiction, (i) will not be listed on any stock or other securities exchange, and (ii) will carry no rating from any rating service.
11. The Investor acknowledges that it has the right to sell and transfer the Bonds, subject to compliance with the transfer restrictions set forth in Section 3.04 of the Indenture, including the requirement for the delivery to the Issuer an investor’s letter in the same form as this Investor’s Letter, including this paragraph 11. Failure to deliver su ch investor’s letter shall cause the purported transfer to be null and void. Investor further acknowledges that, in accordance with Section 3.04(e) of the Indenture, unless the Bonds are rated in the “A” category without regard to a modifier (or the equivalent) or better by a Rating Agency, the Bonds shall at all times be held by a single Bondholder and may only be transferred to a single Bondholder in accordance with the terms of the Indenture.
12. The Investor agrees to indemnify and hold harmless the Is suer, each officer, director, partner or employee of the Issuer, and each person who controls the Issuer within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended (collectiv ely called the “Indemnified Parties”), against any and all losses, claims, damages, liabilities or expenses (including any legal or other expenses incurred by it in connection with investigating any claims against it and defending any actions) whatsoever arising out of any sale, transfer or other disposition of the Bonds, or any interest therein, by Investor in violation of the provisions hereof. No Indemnified Parties other than the Issuer and its officers and employees shall be indemnified hereunder for any losses, claims, damages or liabilities resulting from the negligence of such Indemnified Parties. No Indemnified Party shall be indemnified hereunder for any losses, claims, damages or liabilities resulting from the willful misconduct of such parties.
13. The Investor acknowledges and understands that, in permitting the Investor to purchase and own the Bonds without credit enhancement, the Issuer is relying and will continue to rely on the statements made herein.
14. The Investor acknowledges and under stands that any transfers of the Bonds are restricted as set forth in the legend affixed to the face of the Bonds, and as set out in the Indenture.
The Investor further acknowledges that it has read and understands such legend and the relevant portions of the Indenture and agrees to comply with both.
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Very truly yours,
[INVESTOR]
By:
Name:
Title: